Editor’s note: Shamistha Selvaratnam is a LLM Candidate of the Advanced Masters of European and International Human Rights Law at Leiden University in the Netherlands. Prior to commencing the LLM, she worked as a business and human rights solicitor in Australia where she specialised in promoting business respect for human rights through engagement with policy, law and practice.

The consumer goods industry is shaped by businesses’ desire to engage with the best-quality suppliers at the cheapest price in order to sell goods at a high-profit margin in the burgeoning consumer markets. Accordingly, they continue to build their value chains in order to provide goods to consumers. The resulting effect of this is that potential human rights risks and impacts are likely to arise in the supply chains of businesses that operate in the industry. Risks that often arise in this sector include forced labour, non-compliance with minimum wage laws and excessive work hours, land grabbing and discrimination. Accordingly, businesses such as Unilever face the challenge of preventing, mitigating and addressing adverse human rights impacts in their supply chains through conducting human rights due diligence (HRDD). As Paul Polman (former CEO of Unilever) has stated: ‘We cannot choose between [economic] growth and sustainability—we must have both.’

This fourth blog of a series of articles dedicated to HRDD is a case study looking at how HRDD has materialised in practice within Unilever’s operations and supply chains. It will be followed by another case study examining another that has also taken steps to operationalise the concept of HRDD. To wrap up the series, a final piece will reflect on the effectiveness of the turn to HRDD to strengthen respect of human rights by businesses.

Company Background[1]

Unilever PLC (Unilever) is a consumer goods company that is co-headquartered in the United Kingdom and the Netherlands. It is considered to be one of the world’s leading consumer goods company, making and selling around 400 brands (including Dove, Lipton and Magnum) in the personal care, foods, home care and refreshment categories in more than 190 countries. Unilever is also the second largest advertiser globally and creates content to market its products using digital channels. It employs more than 155,000 people globally and over two billion people use its products daily.[2]

Unilever has a complex global value chain, with its global manufacturing operations spanning across approximately 76,000 suppliers and 300 factories in 69 countries in order to produce products of almost 19 million tonnes. Its products are distributed through a network of more than 400 warehouses to 26 million retail stores, including large supermarkets to small convenience stores and e-commerce channels.[3] 

Unilever endorsed the UNGPs in 2011 and recognises that it has ‘the responsibility to respect human rights and the ability to contribute to positive human rights impacts.’[4] It states that it follows and supports the OECD Guidelines.[5] Unilever acknowledges that there is ‘both a business and a moral case for ensuring that human rights are upheld across [its] operations and [its] value chain.’ As a result, it seeks to identify human rights risks that it may be involved in through its activities or business relationships through conducting HRDD and integrating the responses into its policies and internal systems, acting on the findings, tracking its actions and communicating with its stakeholders.[6] Unilever was the first company to pilot the Shift and Mazars UN Guiding Principles Reporting Framework, which resulted in its Human Rights Report 2015 – Unilever’s disclosure to the Reporting Framework in 2015 is accessible here.

Unilever’s human rights work is overseen by the CEO and supported by the Leadership Executive, including the Chief Supply Chain Officer, which includes the Chief Supply Chain Officer, Chief Legal Officer, Chief Sustainability Officer and the Global Vice President for Social Impact.[7] Unilever’s Procurement Team leads its supply chain efforts. There is no publically available information on the size and resources of this team, its role or where team members are located.

Identification and Assessment of Risks

Unilever’s process for identifying its salient human rights risks started with a workshop facilitated by Shift. Unilever considered the range of potential human rights impacts resulting from its activities, and prioritised those likely to be the most severe were they to occur, based on how grave the impacts to the rights-holder could be, how widespread they are and how difficult it would be to remedy any resulting harm.[8] Unilever drew from previous conversations with external bodies, including the Work Economic Forum Human Rights Global Agenda Council, the Global Social Compliance Programme and the UN Global Compact.[9] It also drew from external data sources such as governments, international agencies and risk organisations that assist it to monitor changes in human rights situations in the countries in which it operates, as well as from understanding of the perspectives of affected stakeholders and verification with expert stakeholders of the salient issues identified.[10]

Following this initial risk assessment, Unilever conducts regular human rights impact assessments (HRIAs), 'which include on-site visits by third-party experts who engage and consult rights-holders and other stakeholders.’[11] For example, in 2016 it commissioned a human rights impact assessment of its own operations and value chain in Myanmar in order to identify impacts on 'local right-holders, including workers, their families and other community members'.[12] This assessment 'uncovered regular patterns of discriminatory practices within some suppliers in [its] extended supply chain'. In addition, during the assessment of the harvesting of palm sugar activity, 'children were found to be working alongside their parents as they prepared palm juice, whilst palm sugar tree climbers were using unsafe homemade ladders to pick the fruit'.[13]

Unilever considers that its suppliers play a critical role in helping it source responsibly and sustainably.[14] Accordingly, Unilever developed a Responsible Sourcing Policy, which sets out Unilever’s expectations with regards to the respect for the human rights, including labour rights, of the workers in its extended supply chain. It is based upon 12 fundamental principles that are derived from internationally recognised standards and include treating all workers equally with respect and dignity, paying workers fair wages and ensuring working hours of all workers are reasonable.

Clauses are included in supplier contracts in an effort to ensure that suppliers respect and comply with a set of Mandatory Requirements related to each of the fundamental principles set out in the Responsible Sourcing Policy.[15] For example, with respect to workers being paid fair wages, suppliers are required to ensure that all workers are provided total compensation packages that include wages, overtime pay, benefits and paid leave which either satisfies or exceeds the legal minimum standards or industry standards, whichever is the highest. Guidelines and tips are provided for the implementation of a comprehensive and robust process so suppliers can meet the Mandatory Requirements and move up the ‘continuous ladder of improvement’ and advance to good practice and then finally achieve and maintain best practice with respect to each of the fundamental principles.

Where there are breaches of the Responsible Sourcing Policy, they must be reported to Unilever who will investigate and discuss its findings with the relevant supplier. If remediation is required, the supplier is required to devise and inform Unilever of their Corrective Action Plans (CAPs) and implementation plans and timeline to resolve the breach.

Unilever’s Procurement Code Committee evaluates and makes recommendations where suppliers are not willing to comply or move up the continuous improvement ladder, and it reviews all key incidents raised. Continual non-conformances with no remediation plans result in an escalation to the Global Procurement Code Committee for a decision on terminating the business relationship.[16] No information is publicly available regarding Unilever’s Global Procurement Code Committee.

Engaging with new and existing suppliers[17]

Unilever’s audit approach to evaluating suppliers is depicted below.

Source: Unilever 2015 Human Rights Report, p 18

Unilever uses a risk-based approach to evaluate prospective and existing suppliers. Suppliers are required to complete a self-declaration regarding their compliance to the Mandatory Requirements of Unilever’s Responsible Sourcing Policy. Suppliers are then segmented based on a risk assessment using externally available indices of business and human rights risks from expert sources. Country risk is one element of the risk assessment (see below for the outcome of Unilever’s 2018 country risk assessment).

Source: Unilever’s Supply Chain, p 17.

Suppliers in the highest risk segment are required to undergo an independent third-party audit. Raw material or finished goods suppliers are required to undergo an on-site audit, while service suppliers need to undergo a remote desktop audit.

During the course of an on-site audit, all non-conformances are recorded to indicate where a supplier’s site does not align with the Responsible Sourcing Policy Mandatory Requirements. A supplier must provide a time-bound CAP to address and remediate non-conformances, and the auditor must confirm the remediation has effectively addressed the non-conformance in a follow-up audit within a 90-day period for the supplier to be Responsible Sourcing Policy compliant.

Audit frequency can be every 12, 24, or 36 months, and is determined by the number and type of non-conformances found in the previous audit. CAPs must be implemented to address all non-conformances and re verified in a follow-up audit to confirm and verify that the identified issues have been effectively remediated.[18] As at May 2018, of the 44,290 suppliers risk assessed to date, 11,287 were classified as high risk of which 1,667 were identified with issues in the previous three years of which 1,175 had verified CAPs.[19]

More serious non-conformances are classified as ‘Critical Incidents’, with the most severe of these termed ‘Key Incidents’. The presence of Critical Incidents automatically means that the supplier must have a new audit after 12 months. On top of the requirements for Critical Incidents, the auditor must raise a Key Incident to Unilever within a 24-hour period. Key Incidents are escalated to either Director or Vice President level within Unilever to ensure appropriate attention is given. Within seven days a CAP to remedy the issue must be provided by the supplier.

Stakeholder Engagement Channels 

Unilever engages with its stakeholders in conducting risk assessments. Stakeholder consultation, dialogue and action are considered to be a critical part of its risk assessment process and have been said to deliver ‘enormous value’, given the localised and culturally specific nature of the issues faced. Unilever has identified its stakeholders to include its employees, trade unions, customers, NGOs, communities, suppliers, workers, business partners, advisory boards (such as the Unilever Sustainable Living Plan Council), governments, intergovernmental organisations and civil society organisations.[20] Unilever’s Advocacy Team play a lead role in engaging with its external stakeholders, which is supported by its External Affairs Team.[21] Unilever also engages with various organisations including the World Business Council for Sustainable Development, Consumer Goods Forum, United Nations Global Compact and the World Economic Forum.

Unilever also captures and addresses complaints through its grievance mechanisms – it notes that ‘Grievance mechanisms play a critical role in opening channels for dialogue, problem solving, investigation and, when required, providing remedy.’[22] With respect to Unilever’s supply chain, one of the fundamental principles of the Responsible Sourcing Policy requires all workers to have access to fair procedures and remedies. Accordingly, suppliers are required to provide grievance mechanisms to their workers. Unilever monitors the number of complaints received from workers by suppliers each year in order to monitor its salient issues and address root causes so that similar grievances will not be raised in the future.[23] Additionally, Unilever also provides a hotline that anyone can access to report on responsible sourcing issues. It has also developed a grievance procedure for workers in its palm oil supply chain. A summary of the complaints raised under this procedure can be found here.

Identified risks 

Through its risk identification and assessment processes, Unilever has identified eight salient human rights issues within its business, which are depicted in the image below.

Source: Unilever Human Rights Report 2015, p 26.

During the course of 2017, Unilever identified the following non-conformances in relation to the salient issues:

Source: Human Rights 2018 Supplier Audit Update, p 10.

Integrating and Acting

Unilever recognises that it must take steps to identify and address any actual or potential adverse impacts with which it may be involved whether directly or indirectly through its own activities or its business relationships. It seeks to manage the risks identified in the processes discussed above by ‘integrating the responses … into [its] policies and internal systems, acting on the findings, tracking [its] actions, and communicating with [its] stakeholders about how [it] address impacts.’[24] Remediation is perceived as important as addressing human rights impacts.

With respect to each of the eight salient issues set out above, Unilever has taken specific actions and implemented initiatives to prevent and mitigate those issues from arising in its supply chains. For example, with respect to forced labour Unilever has, inter alia:[25]

• Developed best practice guidelines on the use of migrant labour focusing on the recruitment process, contractual terms and the payment of wages and benefits. These guidelines are not publicly available.
• Incorporated human trafficking explicitly into its Human Rights Policy Statement, Code of Business Principles and its Respect, Dignity and Fair Treatment Code Policy, and provided associated training to its employees globally.I
• Incorporated trafficking guidelines into its Responsible Sourcing Policy and Responsible Business Partner Policy.
• Published a UK Modern Slavery Statement in 2017, 2018 and 2019.
• Became a founding member of the Leadership Group for Responsible Recruitment, which promotes responsible recruitment practices by business.
• Provided training to suppliers in Turkey, Dubai, India, Bangkok and Malaysia on eradicating forced labour and the responsible management of migrant labour.

Tracking

Unilever recognises that ‘the ability to track and monitor issues is a vital part of measuring progress in remediation and addressing grievances’.[26] The Unilever Board is responsible for compliance, monitoring and reporting and day-to-day responsibility lies with senior management. Unilever’s Corporate Audit Team and external auditors undertake checks on this process. [27]

With respect to tracking its supply chain, Unilever has an ‘Integrated Social Sustainability Dashboard’ (Dashboard), which sets out the ‘number of non-conformances for each fundamental principle of the RSP’.[28] It uses the information available through the Dashboard to identify salient hotspot issues ‘allowing use to prioritise, build guidance produce webinars, and support regions where the need is greatest’.[29] Unilever’s Procurement Team also monitors supplier compliance levels and identifies when intervention is required. It works with suppliers to ensure effective remediation. Unilever also tracks and verifies that CAPs are implemented within the agreed timelines. When very serious Key Incidents occur, Unilever more directly and actively participates in developing CAPs and following up on their implementation.[30]

Communicating

Unilever claims that it engages in dialogue with its employees, workers and external stakeholders who are or could potentially be affected by its actions.[31] It particularly focuses on individuals or groups who ‘may be at greater risk of negative human rights impacts due to their vulnerability or marginalisation’.[32]

Unilever primarily uses its Human Rights Report 2015 and Human Rights Progress Reports to communicate its process of identifying and assessing human rights risks and impacts, including its salient human rights issues and the actions taken to prevent and mitigate those issues, as well as integrating, acting and tracking those issues. Unilever also utilises its annual Modern Slavery Statements to communicate with stakeholders. Aside from these reports and statements, Unilever has not clearly stated what other means it utilises to communicate its human rights impacts, policies and approaches. A review of its website contains a webpage detailing its engagement with stakeholders, but fails to recognise exactly how this engagement is carried out.

With respect to grievances raised through the Palm Oil grievance procedure, Unilever publishes a Grievance Tracker online setting out a summary of each grievance raised, the link to Unilever and the latest actions taken to address the allegations. It also publishes responses in relation to specific claims – see for example here and here.

The Gaps Between Theory and Practice

Unilever has acknowledged that the challenges faced by the business community with regard to its responsibility to respect human rights are ‘enormous’, particularly given the scale of their operations and supply chain. It states that ‘the risk of systemic human rights abuses exists across our value chain and the value chains … This is a reality we must confront and work together to resolve.’ As a result it has claimed to go beyond respecting human rights to actively promoting them. This approach has positioned it publicly as a leader and a model from which other businesses can draw inspiration.[33]

What is clear from a review of Unilever’ human rights approach is that it recognises its responsibility to respect human rights and has sought to take steps to fulfil this obligation along its entire value chain. While Unilever’s human rights efforts started to gain some momentum in 2010 when it launched its Sustainable Living Plan and began evaluating suppliers, it accelerated its efforts in 2014 by introducing a Human Rights Policy Statement, formalising its commitment to promoting human rights across its operations and supply chains, as well as through designing a five-year human rights strategy.[34] In 2015, it became the first company to produce a standalone human rights report.

Nonetheless, despite Unilever’s extensive human rights work over the past years, including the strengthening of its HRDD processes in its supply chains, it has drawn and continues to draw criticism in relation to the human rights abuses that still exist within its value chain. Key human rights issues that have been placed in the spotlight in various jurisdictions are discussed below. Information regarding alleged human rights violations committed by Unilever pre-dating the UNGPs has been included in the sub-sections below to the extent that such violations have been found to still be present following Unilever’s actions to increase its efforts to respect human rights in 2014.

Vietnam

In 2013, Oxfam (together with Unilever) published a report in which it assessed the labour standards in Unilever’s operations and supply chain in Vietnam and developed measures to guide Unilever (and other companies) to fulfil their social responsibilities. It found that despite Unilever’s commitment to human rights, its tools and processes for due diligence and remediation via grievance mechanisms needed to be strengthened. It stated that Unilever had ‘not been aware that some of its practices were associated with adverse impacts for workers, including wages that were legal but low, excessive working hours, and high levels of contract labour.‘[35] Recommendations were made by Oxfam to Unilever, including policy changes, strengthening its due diligence processes and better aligning business processes with its policies. Unilever made a range of commitments in response to the recommendations.

A progress report was published in 2016, which found that Unilever’s ‘overall commitment to respecting human and labour rights has been strengthened as a result of effective leadership across the business’. Nonetheless, it identified some ‘critical implementation challenges’ that need to be addressed in order to ‘[translate] the company’s policy commitments into practice and achieve positive outcomes for … workers’. Specific issues that were identified were:

1. There was an ‘unresolved tension’ between the commercial and labour standards imposed on suppliers. Some suppliers did not see the business case for their own businesses in improving their labour standards.
2. Despite Unilever’s efforts to ensure fair compensation for workers, there was a lack of evidence to show that worker wages had increased beyond the legal minimum level in Vietnam.

Additionally, Oxfam highlighted that multinational more generally need to address the root causes of adverse human rights impacts in their supply chains in order for ‘good labour standards to become universal operating conditions.’ Oxfam made further recommendations to improve the situation for workers in Vietnam.

India

In the 2011 SOMO & ICN Report, SOMO also reported on Indian tea plantations that supply to Unilever. Issues identified included wages being paid with too little benefits, workers being discriminated against in relation to promotions and benefits, the casualization of labour as well as violations of the freedom of association. In 2016, ICN released a follow up report on the situation in India. It found that there had been some improvements in the ‘payment of minimum wages, setting up procedures for safe handling of chemicals and the provision of basic medical care and educational facilities for all temporary and permanent workers’. However, there are still ‘many serious non-compliances’ relating to ‘unequal benefits for casual workers, overtime wages and working hours, advance payments, chemical handling practices and worker representation.’ Unilever responded by stating that it was in dialogue with its suppliers in relation to the issues raised in the follow up report.

Further, in 2015 a BBC investigation found ‘dangerous and degrading living and working conditions’ in tea estates that supply to some of Unilever’s brands (Lipton and PG Tips). Unilever stated that it regarded the issues raised in the investigation as ‘serious’ and had made progress to rectify these issues through ‘working with [its] suppliers to achieve responsible and sustainable practices’.

Turkey

In 2014, an external organisation engaged by Unilever carried out an independent assessment of its tea supply chain in Turkey. The assessment found, inter alia, that workers worked excessive hours during the harvest, various health and safety issues (e.g. lack of protective equipment) and migrant worker accommodation did not meet the required standards in some instances. As a result, Unilever decided to remediate the identified issues at the individual site level and also work with external multi-stakeholder groups to address more systemic challenges. It also started a capacity building initiatives in Turkey that focuses on human rights and held training in 2016 focusing on the key non-compliances found. 

Indonesia

In 2016, Amnesty International published a report in relation to labour exploitation on plantations in Indonesia that provide palm oil to Wilmar, which then supplied to Unilever.[36] It was found that serious human rights violations were occurring on the plantations of Wilmar and its suppliers, including ‘forced labour and child labour, gender discrimination, as well as exploitative and dangerous working practices that put the health of workers at risk’, which resulted from systematic business practices (e.g. low wages and the casualisation of labour). Unilever issued a detailed response to a letter from Amnesty International in relation to the report recognising that ‘more attention needs to be paid to social issues at palm oil plantations and that current processes and policies need to be improved to ensure they address issues effectively and create more transparency.’ It also noted that it was in contact with Wilmar regarding the issues raised and committed to continuing to engage to take steps to ‘close the gaps identified’. Unilever also issues a public statement once the report was released, committing to investigating the grievances raised in the report and addressing them. Unilever has continued to engage with Wilmar and Amnesty International on these issues – see for example here (2016), here (2017) and here (2018).

Conclusion 

What is clear from these examples of human rights violations in Unilever’s supply chains is that despite its extensive HRDD process that it seeks to roll out across its value chain, in practice there remain weaknesses and blind spots in this process. For example, Unilever does not have a third party grievance mechanism allowing workers to raise complaints directly to the company (except in relation to palm oil). Instead workers must raise their grievances through supplier provided mechanisms, which can discourage the communication of human rights issues. Also, Unilever assesses prospective suppliers through the use of a self-declaration, which is extremely problematic as it relies on potential culprits to assess their own compliance with the Mandatory Requirements for doing business with Unilever, in some cases without verification by Unilever or an independent third party. Weaknesses such as these make it evident that Unilever has far to go on its journey to respecting human rights within its supply chains, despite being a ‘leader’ in implementing HRDD globally. Unilever needs to look beyond remedying human rights abuses as they are alleged and reported. It must also examine the systemic failings in its HRDD process that result in these human rights risks not being identified and therefore prevented or mitigated.

[1] Unless otherwise statement, the information in this section has been obtained from the Unilever 2018 Annual Report and the Unilever Human Rights Report 2015.

[2] Unilever Modern Slavery & Human Trafficking Statement 2019, p 2.

[3] Unilever Annual Report 2018, p 9.

[4] Unilever Human Rights Policy Statement, p 4.

[5] Ibid, p 1; Unilever, Advancing Human Rights in our Own Operations; Unilever Human Rights Report 2015, p 1.

[6] Unilever Human Rights Policy Statement.

[7] Business and Human Rights Resource Centre Action Platform, Unilever.

[8] Unilever Human Rights Report 2015, p 26.

[9] Unilever Human Rights Progress Report 2017, p 15.

[10] Unilever Human Rights Report 2015, pp 26, 58.

[11] Unilever Human Rights Progress Report 2017, p 71.

[12] Ibid.

[13] Ibid, p 70.

[14] Unilever Human Rights Policy Statement, p 2.

[15] Unilever Modern Slavery & Human Trafficking Statement 2019, p 4.

[16] Unilever Human Rights Report 2015, p 51.

[17] Unilever Human Rights Progress Report 2017, pp 18-19.

[18] Unilever’s Supply Chain, p 17.

[19] Ibid.

[20] Unilever Human Rights Report 2015, pp 22-23; Unilever, Engaging with Stakeholders.

[21] Business and Human Rights Resource Centre Action Platform, Unilever.

[22] Ibid.

[23] Unilever Human Rights Report 2015, p 57.

[24] Unilever Human Rights Policy Statement, p 2.

[25] Unilever Human Rights Report 2015, p 32; Unilever, Sharing Best Practice in Fighting Forced Labour; The Consumer Goods Forum, Business Actions Against Forced Labour, p 36; Unilever Human Rights Progress Report 2017, p 32.

[26] Unilever Human Rights Progress Report 2017, p 72.

[27] Unilever Human Rights Report 2015, p 47.

[28] Unilever Human Rights Progress Report 2017, p 72.

[29] Ibid.

[30] Ibid.

[31] Unilever Human Rights Policy Statement, p 3.

[32] Ibid.

[33] See for example: Corporate Human Rights Benchmark 2017 and 2018; and Know the Chain 2018.

[34] Unilever Human Rights Report 2015, p 3.

[35] Oxfam, Business and Human Rights: An Oxfam Perspective on the UN Guiding Principles, p 7.

[36] While Unilever confirmed that the purchase palm oil from Wilmar, they did not provide details on the refineries they source from. Nonetheless, Amnesty International found it ‘highly likely’ that Unilever sources palm oil from one of the 12 Indonesian refineries it investigated (whether directly or indirectly).

Editor’s note: Maisie Biggs graduated with a MSc in Global Crime, Justice and Security from the University of Edinburgh and holds a LLB from University College London. She is currently working with the Asser Institute in The Hague.  She has worked for International Justice Mission in South Asia and the Centre for Research on Multinational Corporations (SOMO) in Amsterdam.

The Rome Statute is a central pillar of international criminal law (ICL), and so any discussion concerning the subjection of legal persons requires a revisit of the negotiations surrounding its drafting. However in the time since its implementation, there appears to have been a shift in ICL regarding corporate liability. Developing customary international law, treaty law and now most domestic legal systems have some established mechanisms for prosecuting legal persons for violations of ICL.

The Rome Statute

A lot has been written on the negotiations surrounding the drafting of the Rome Statute of the International Criminal Court (Rome Statute). This document established the International Criminal Court (ICC), its rules and jurisdiction, and codified the core crimes of ICL and surrounding general principles. Article 25(1) of the Rome Statute explicitly restricts the court’s jurisdiction to natural persons, meaning that corporate wrongdoing may only be approached by the ICC through individual criminal responsibility or superior responsibility for corporate actors.^[1] The Statute was a “major achievement”^[2] as the first international law instrument essentially summarising the general principles of criminal law across national legal systems.^[3] Concerns about ‘complementarity’ arose as the ICC would be expanding the reach of ICL far beyond the remit of ad hoc Tribunals like those used to try crimes in Rwanda and Former Yugoslavia. The new Court needed to complement, rather than undermine national courts and jurisdiction.^[4]

During negotiations, individual responsibility of legal persons, corporations or criminal organisations was described as “a major political issue on which political guidance from the Committee was needed.”^[5] France had submitted a compromise proposal in the International Criminal Court Draft Statute of 1998 concerning the inclusion of responsibility of legal persons. The French representatives surmised that resistance from other states to its inclusion was because there was no equivalent in some domestic legal systems, while others held the view that the concept would be misapplied in an international criminal court.^[6]

The French proposal linked the responsibility of the legal persons with the responsibility of criminal organisations at Nuremberg. Under this proposal, group responsibility would be linked with the previous commission of a crime by a natural person (thus in no way concealing individual responsibility), and adopting in parts Article 10 of the Charter of the Nuremberg International Military Tribunal,^[7] the Court would make binding determinations on the criminality of an organisation, which states would need to implement and then penalise by fines or proceeds of crime confiscation.^[8]

The proposed text was as follows:

“[Art 23(5)]: Without prejudice to any individual criminal responsibility of natural persons under this Statute, the Court may also have jurisdiction over a juridical person under this Statute. Charges may be filed by the Prosecutor against a juridical person, and the Court may render a judgement over a judicial person for the crime charged, if:

(a) The charges filed by the Prosecutor against the natural person and the juridical person allege the matters referred to in subparagraphs (b) and (c); and

(b) The natural person charged was in a position of control within the juridical person under the national law of the State where the juridical person was registered at the time the crime was committed; and 

(c) The crime was committed by the natural person acting on behalf of and with the explicit consent of that juridical person and in the course of its activities; and

(d) The natural person has been convicted of the crime charged.

For the purpose of this Statute, ‘juridical person’ means a corporation whose concrete, real or dominant objective is seeking private profit or benefit, and not a State or other public body in the exercise of State authority, a public international body or an organisation registered, and acting under the national law of a State as a non-profit organisation.”^[9]

This was a compromise solution from France between liberal and romantic conceptions,^[10] looking not only to convict ultimately the company or organisation, but rather still use it as a mechanism for attributing responsibility to individuals.^[11] Several countries supported the concept, however prevailing concerns of enforcement and complementarity remained, especially for countries with no basis of corporate criminal liability. The matter was referred to the Working Group following mixed reception from states, however once there, negotiations met stifling time pressures.^[12] Per Saland, the Chairman of the working group which negotiated issues surrounding Part 3 of the Rome Statute concerning these general principles of criminal law (including Article 25 on individual responsibility), has since revealed that time ran out for the Working Group when it came to discussion of some more difficult issues, including liability of legal persons.^[13] David Scheffer, who was also involved in the negotiations, has confirmed that the combination of time pressures and complementarity concerns prevented the proposal from succeeding, however he has added that another contributing factor was a more fundamental concern that the “novelty” of the proposed corporate criminal liability would have “imperilled” the entire treaty’s ratification by states.^[14]

No agreement was reached concerning subjecting legal persons. Article 25(3)(d) retained a reference to a ‘group of persons acting’,^[15] so the French idea of individual participation in a larger collective was incorporated to an extent, however all references to legal persons have been removed in the final article. Perhaps unintentionally, a similar door for corporate liability remained ajar in article 7(2)(a), through reference to organisational policy.^[16] In the ICC investigation into the Kenyan situation,^[17] the Court examined this issue:

“Clearly, the 'organization' is an entity different from a "State" if the legislator was to avoid redundancy. Thus, it is permissive to conclude that an 'organization' may be a private entity (a nonstate actor) which is not an organ of a State or acting on behalf of a State [para 45].”

The Court delineated various ‘state-like’ characteristics that a non-state actor would have to demonstrate in order to qualify as an organisation under this article,^[18] however none expressly excluded legal persons like companies from the article’s ambit. 

Andrew Clapham provides an in-depth history of the Rome Statute negotiations, and how controversial this question of legal persons became.^[19] This episode has been treated as a definitive rejection of ICL liability for legal persons,^[20] however the Rome Statute is just one (important) part of the larger ICL picture.

Post-Rome caselaw developments 

Since Rome, customary international law through Tribunals, treaty law, and domestic law have all developed. Most notably, for the first time legal persons have been subjected under ICL by an international criminal tribunal.^[21] In the Al Jadeed S.A.L. & Ms Khayat (New TV S.A.L.)^[22] case, an Appeals Panel for the Special Tribunal for Lebanon (STL) overturned a decision that the Tribunal lacked jurisdiction over legal persons on 2 October 2014, allowing the case to proceed against the corporate entity Al Jadeed S.A.L. and natural person Ms Khayat. This was then followed by another contempt case Akhbar Beirut S.A.L., similarly against a legal and natural person.^[23] In New TV S.A.L., Judge Baragwanath acknowledged the development of domestic corporate accountability, and so determined that international criminal law has likewise progressed:

“Corporate liability for serious harms is a feature of most of the world’s legal systems and therefore qualifies as a general principle of law. Where States still differ is whether such liability should be civil or criminal or both. However, the Appeals Panel considers that… corporate criminal liability is on the verge of attaining, at the very least, the status of a general principle of law applicable under international law.”^[24]

The decision has been met with a mixed reception. Filled with “historical references and normative ambition,”^[25] some commentators have characterised the decision as an encouraging progression from state practice and foundation stone for future ICL criminal liability.^[26] However the basis of Judge Baragwanath’s decision has been described by Dov Jacobs as a “molotov cocktail to kill the principle of legality” as the judge’s reasoning relied only on “the ‘spirit’ of the statute combined with inherent jurisdiction.” Others have found the later Akhbar Beirut S.A.L. opinion more convincing due to its more concrete basis in Lebanese law.

The Tribunal very consciously restricted their consideration and findings to the specific crime of contempt: looking to precedent, they examined only whether there had been previous findings on contempt with regards to legal persons in the various international criminal tribunals, and found there had “simply been no legal pronouncement on this specific issue.” ^[27] The Tribunal drew its power to prosecute for contempt from its inherent jurisdiction as a judicial institution.^[28] Like the ICTY and ICTR before it, the STL’s primary jurisdiction for ‘core’ international crimes is explicitly over only natural persons, however the separate framework in the general Rules of Procedure and Evidence allowed the Tribunal to consider the broader definition of ‘persons’ for contempt.  The importance of this distinction for the case does also support Andrew Clapham’s argument that “at this point, the exclusion of non-natural persons can be seen as the consequence of a ‘rule of procedure’ rather than the inevitable result of application of international criminal law.”^[29]

There is debate about the broader applicability of these decisions, because of the STL's ties to Lebanese law. The STL itself is a partially-domestic forum which reduces the ICL significance of an ‘international tribunal’ taking this step. The legal basis for the Tribunal’s decisions is at least partially grounded in Lebanese law -  Article 2 of the formative statute of the STL mandates the use of Lebanese law (under which corporate criminal liability is possible) - however it is debatable whether this case is purely an instance of domestic legal application of international criminal law. Article 2 concerns only the applicable criminal law, (i.e., the ‘core crimes’ discussed above) and not the procedural rules on which this decision was based, which are grounded in international law concerning international tribunals. It would then appear that the legal basis for this decision was purely international, and the Tribunal in New TV S.A.L. accordingly based their decision on  “current international standards,”^[30] however in the Akhbar Beirut S.A.L. case the Tribunal links back the foreseeability of this corporate prosecution to Lebanese law: “It would be an oddity for a Lebanese company to face criminal sanction in Lebanon for interfering with the administration of justice with respect to cases before Lebanese courts and at the same time enjoy impunity for similar acts before an internationalised Tribunal guided by Lebanese law in carrying out its judicial work.“^[31]

The highest profile media case last before an international tribunal also concerned the responsibility of legal persons. The International Criminal Tribunal for Rwanda (ICTR) had a special focus on the media’s role of incitement in the Rwandan genocide.^[32] As the Tribunal in the Akayesu case positively quoted: “it was impossible that hundreds of thousands of people should commit so many crimes unless they had been incited to do so.”^[33] The ICTR case of Prosecutor v. Nahimana et al.^[34] (also known as the Media Case) tried three natural persons for their roles in inciting the Rwandan genocide. Two of these were the controlling figures of media organisations: RTLM was a radio station and Kangura a publication. The court found a specific “specific causal connection” between RTLM broadcasts and the killings, which “engaged in ethnic stereotyping …[which] called explicitly for the extermination of the Tutsi ethnic group.”^[35] The articles published by Kangura similarly had the impact of “whipping the Hutu population into a killing frenzy.”^[36] What was distinctive about this case was that the court, before outlining the individual responsibility of the named accused, went into great detail about the culpability of the organisations in question. The court named the media organisations themselves as responsible for inciting genocide: “If the downing of the [President’s] plane was the trigger, then RTLM, Kangura and CDR were the bullets in the gun.”^[37] It was not possible under the ICTR’s jurisdictional mandate to subject legal persons and so the court in the Media case did not broach this issue, however the structure and substance of the court’s reasoning centred primarily on the responsibility of the organisations, and only after did the court then address the roles of the natural persons who were actually on trial.

What may merit further investigation is how media cases before international tribunals differ from the prosecution of other international crimes that corporate actors engage in, such as pillage or complicity. The media acts as the ‘fourth estate’, a fundamental and (ideally) independent pillar of a functioning system of democratic governance. Arguably then, media companies are not purely private, non-state actors but serve a partially civic function, and so are in some ways fundamentally different actors than other corporate entities.^[38] How the unique role of this specific ‘private’ actor impacts its liability under ICL warrants further investigation.

International instruments imposing some form of corporate liability

A growing number of recent international treaties and conventions are incorporating obligations to impose sanctions on legal persons.^[39] These include the Optional Protocol on the Convention on the Rights of the Child (Article 3(4)), Convention Against Transnational Organised Crime 2000 (Article 10(2)), and Convention Against Corruption 2003 (Article 26 (2)). As pointed out by Sabine Gless and Sarah Wood, these instruments remain vague about implementation.^[40] Nonetheless, for these crimes states are required in some form to impose sanctions on legal persons.^[41]

The Draft Articles on Crimes Against Humanity being prepared by the International Law Commission (ILC) may go the same way as the afore-mentioned draft of the Rome Statute, but for now Draft article 6, paragraph 8 contains explicit subjection of legal persons:

“Subject to the provisions of its national law, each State shall take measures, where appropriate, to establish the liability of legal persons for the offences referred to in this draft article. Subject to the legal principles of the State, such liability of legal persons may be criminal, civil or administrative.”

This final sentence allows for flexibility in domestic application, however the offences being contemplated are international crimes. This convention is being designed to be a development from the Rome Statute, the “next generation” of legal tools concerning crimes against humanity.^[42] The addendum to the ‘Fourth report on crimes against humanity’ drafted by Sean D. Murphy, Special Rapporteur of the ILC, links this article with the previously mentioned international law instruments which are subjecting legal persons.

Conclusion

The ICC is as yet not touched by these developments, however there are glimmerings of a shift in customary ICL. As will be explored in the next post in this series, most domestic legal systems now have established mechanisms for prosecuting legal persons for violations of ICL. The Rome Statute negotiations surrounding the subjection of legal persons were centralised on complementarity; if domestic law has fundamentally shifted in the interim period it makes sense that this issue be revisited in international caselaw and international instruments as well.

^[1] David Scheffer, ‘Corporate Liability under the Rome Statute’ (2016) 57 Harvard International Law Journal Online Symposium 35, 35.

^[2] Per Saland, ‘International Criminal Law Principles’ in Roy S Lee (ed) The International Criminal Court: The Making of the Rome Statute (Kluwer Law International NL, 1999) 190-191.

^[3] ibid.

^[4] Andrew Clapham, ‘The Question of Jurisdiction under International Criminal Law over Legal Persons: Lessons from the Rome Conference on an International Criminal Court’, in Menno Kamminga and S Zia-Zarifi (eds), Liability of Multinational Corporations Under International Law (Kluwer Law International, 2000) 139, 142.

^[5] ‘Summary records of the plenary meetings and of the meetings of the Committee of the Whole’ in Official Records of the United Nations Diplomatic Conference of Plenipotentiaries on the Establishment of an International Criminal Court, Rome, 15 June-17 July 1998, Vol. II, UN Doc. A/Conf.183/C.1./L.3, 132.

^[6] ibid 133.

^[7] Clapham (n 4) 147.

^[8] ‘Summary records of the plenary meetings and of the meetings of the Committee of the Whole’ (n 5) 133.

^[9] ‘Working paper on article 23, paragraphs 5 and 6, UN Doc. A/Conf.183/C.1/WGGP/L.5/Rev.2, 3 July 1998’ in Official Records of the United Nations Diplomatic Conference of Plenipotentiaries on the Establishment of an International Criminal Court, Rome, 15 June-17 July 1998, Vol. III, 252.

^[10] “A liberal conception of responsibility focuses on individual agency and abstracts individual wrong from collective action. The ‘romantic’ view admits that international crimes are typically by their very nature committed in collectivities, and thus closely connected to some degree of collective will. The two traditions have been in conflict since the naissance of international criminal law.” in Carsten Stahn, ‘Liberals vs. Romantics: Challenges of An Emerging Corporate International Criminal Law’ (2018) 50 Case W Res J Intl L 91, 99.

^[11] ibid, 100.

^[12] Saland (n 2) 194.

^[13] ibid.

^[14] Scheffer (n 1) 38.

^[15] See the Case Matrix Network commentary on Article 25(3)(d) for the relationship between this and the doctrine of Joint Criminal Enterprise (JCE).

^[16] “‘Attack directed against any civilian population’ means a course of conduct involving the multiple commission of acts referred to in paragraph 1 against any civilian population, pursuant to or in furtherance of a State or organizational policy to commit such attack” [emphasis added].

^[17] Decision Pursuant to Article 15 of the Rome Statute on the Authorization of an Investigation into the Situation in the Republic of Kenya: ICC-01/09-19-Corr 01-04-2010 110/163

^[18] “[para 68] As I have endeavoured to demonstrate above, certain criteria need to be satisfied to qualify a non-state actor as an 'organization' under the ambit of article 7(2)(a) of the Statute. This state-like 'organization' is the author of a policy "to commit such attack" against any civilian population which is implemented by its members using the means of the 'organization'. As in case of a State policy, it seems to me that the "organizational policy" must be established at the policymaking level of the ‘organization'."

^[19] Clapham (n 4) 142.

^[20] This negotiation process was used as a basis for the UK and Netherlands Amici Curiae brief in the Kiobel case, which argued that there was no corporate liability under international criminal law: “corporations have been deliberately excluded from the jurisdiction of the International Criminal Court.” Brief of the Governments of the United Kingdom of Great Britain and Northern Ireland and the Kingdom of the Netherlands as Amici Curiae in support of the Respondents (No. 10-1491) (filed 3 February 2012), 17.

In the Jesner v. Arab Bank, PLC decision, the negotiation process was cited by both Justice Kennedy in the lead decision [p 15] and Justice Sotomayor in her dissent [p 8], the former using it as evidence of ICL's rejection of corporate liability, and the latter characterising it as evidence merely of varying domestic practices and not a definitive rejection of corporate civil liability under the Alien Tort Statute (as was one of the issues in this case).

^[21] Nadia Bernaz, ‘Corporate Criminal Liability under International Law: The New TVS.A.L. and Akhbar Beirut S.A.L. Cases at the Special Tribunal for Lebanon’ (2015) 13 Journal of International Criminal Justice, 313, 313.

^[22] New TV S.A.L, Decision on Interlocutory Appeal Concerning Personal Jurisdiction in Contempt Proceedings, Al Jadeed S.A.L. & Ms Khayat (STL-14-05),, Special Tribunal for Lebanon Appeals Panel (2 October 2014).

^[23] Akhbar Beirut S.A.L., Decision on Interlocutory Appeal Concerning Personal Jurisdiction in Contempt Proceedings, Case No STL-14-06/PT/AP/AR126.1, 23 January 2015.

^[24] New TV S.A.L. (n 22) para 67.

^[25] Stahn (n 10) 98.

^[26] See Nadia Bernaz (n 21).

^[27] New TV S.A.L. (n 22) para 41.

^[28] As articulated in Rule 60 bis (A) [Contempt and Obstruction of Justice] of the Rules of Procedure and Evidence for the STL.

^[29] Andrew Clapham, ‘Extending International Criminal Law beyond the Individual to Corporations and Armed Opposition Groups��� (2008) 6 Journal of International Criminal Justice 899, 902.

^[30] New TV S.A.L. (n 22) para 60.

^[31] Akhbar Beirut S.A.L. (n 23) para 59.

^[32] “The power of the media to create and destroy fundamental human values comes with great responsibility. Those who control such media are accountable for its consequences.” Prosecutor v. Nahimana et al., ICTR–99–52, Judgment and Sentence (3 December 2003) para 945.

^[33] Akayesu (TC) ICTR-96-4 (2 September 1998) para 551.

^[34]Prosecutor v. Nahimana et al., ICTR–99–52, Judgment and Sentence (3 December 2003) para 953.

^[35] Ibid para 949.

^[36] Ibid para 951.

^[37] Ibid para 953.

^[38] This might be a controversial statement within the broader debate in Business Human Rights circles concerning the civil functions, and public duties and responsibilities, of all companies.

^[39] Bert Swart cites seventeen international instruments which have provisions on corporate criminal liability with discretion concerning state-level sanctions, “while before 1997 none existed at all": Bert Swart, ‘International Trends Towards Establishing Some Form of Punishment for Corporations’ (2008) 6 J International Grim Just 947, 949.

^[40] Sabine Gless and Sarah Wood, ‘General Report on Prosecuting Corporations for Violations of International Criminal Law: Jurisdictional Issues’ in S Gless and S Broniszewska (eds) Prosecuting Corporations for Violations of International Criminal Law: Jurisdictional Issues (International Colloquium Section 4, Basel, 21-23 June 2017) 16.

^[41] ibid.

^[42] See a summary of Professor Murphy’s 2015 Supranational Criminal Law Lecture at the T.M.C. Asser Instituut.