Alien Tort Provision Misused in Current Cases, USA*Engage Official Says

Friday, 5 March 2004

"Since 1988, 27 lawsuits have been filed against multinational corporations under the alien tort law for human rights violations…Our view is that these cases constitute a misuse of the law, which, from a business point of view, could become a significant disincentive to foreign direct investment.," O'Flaherty said in his remarks. "These investment flows are a very strong priority for developing countries that depend on them for achieving higher rates of economic growth. In a globalized economy, cross-border capital flows are an inescapable and essential component of commercial operations. We must, therefore, be careful about well-motivated initiatives that have unintended negative consequences on the populations of nations we want to see prosper and on the health of the corporations on whom we depend for our own economic well-being.

"This is not to say that business is indifferent to human rights, the environment or labor standards. It is, however, to say that there is a logic to the interdependent world economy that cannot be wished away. The truly important question is how to reconcile the priorities of corporations and developing countries in those cases where they do not coincide," O'Flaherty continued.

"It is clear that at a minimum the alien tort law gives jurisdiction to federal district courts over civil actions brought by non-American plaintiffs. There is no indication either in statute or contemporaneous legislative history that Congress intended to create a cause of action. Congress only sought to elevate state claims to federal status."

O'Flaherty concluded that without a Supreme Court ruling clarifying the Alien Tort provision, or an amendment to it by the Congress, the number of lawsuits will continue to grow, thereby interfering with the Executive Branch's ability to conduct foreign relations, enabling "judicial lawmaking," and disrupting key foreign relationships.

USA*ENGAGE is a coalition of over 670 small and large businesses, agriculture groups and trade associations working to seek alternatives to the proliferation of unilateral U.S. foreign policy sanctions and to promote the benefits of U.S. engagement abroad. For more information on USA*ENGAGE and the harmful effects of unilateral trade sanctions, visit the USA*ENGAGE web site at www.usaengage.org.


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