There is an unholy alliance between corporations and American courts. Corporations do not influence the courts through elections. Instead, they rely on propaganda to create a pro-corporate mindset. The judges internalize this propaganda and usually rule in favor of corporations. In general, they believe that what's good for business is good for the country.
A recent disaster at a clothing factory in Bangladesh has crystallized the issue. A fire broke out in a factory and killed 117 people. Numerous foreign companies, including Walmart and the Gap, used the factory and others like it to make their clothing. The fire safety certification, awarded by the fire authorities in Daka, had expired in June 2012 and was not renewed. The authorities noted that the building had a permit for five stories but the owner had built eight and was adding a ninth when the building collapsed.
The government of Bangladesh has arrested the owner of the building. They may have difficulty convicting him of a crime, however. The investigation following a 2006 fire in Chittagong, Bangladesh, did not lead to a trial, despite discovering numerous violations of safety regulations. The question remains whether Walmart and the other foreign corporations involved with the building will receive any punishment for their part in the crime.
Walmart has recently warned its suppliers not to buy merchandise from subcontractors who have not been authorized by the contractor. Walmart's actions reveal that the company would like to avoid liability in any future disasters. This new, somewhat belated, safety campaign does not exonerate Walmart, however. The Bangladesh government has proven incapable of regulating its garment industry. Walmart knew or should have known about government incompetence before the fire in question, since there have been many such fires, including the one in Chittagong where more than 50 people died.
There is an American law, the Alien Tort Statute (ATS), that might have been used by victims of the Bangladesh fire to sue Walmart in American courts. The Supreme Court has been whittling down ATS to make it less comprehensive. In the past, victims of torture in foreign countries have sued individual torturers and won in American court. When victims of corporate criminal conduct began using the law, the Supreme Court changed directions to protect the corporations.
Once they had decided to shield the corporations from civil suits, the Supreme Court discovered, what they had apparently missed in earlier cases, that the Alien Tort Statute did not support “extraterritoriality”, that it could not be applied to crimes committed in other countries. In Sosa v. Alvarez-Machain (2004), the court determined that the Law of Nations, which ATS was intended to enforce, does not include corporate liability.
This theory is nonsense. ATS was passed in 1789. The law of nations has since transformed itself into international law, which does indeed have laws that apply to corporations, including criminal statutes against homicide. What ATS did was to give the victim a chance to recover damages in civil court. By ruling that the law of nations, which is no longer a current legal term, does not include corporate liability, the Supreme Court achieves the purpose of shielding corporations from wrongdoing abroad.i
Since Sosa, the Supreme Court has gone further to discover that ATS does not apply anywhere outside the United States, effectively castrating it as a tool for individuals to recover damages against corporations.ii We the People can take steps to rectify this injustice by changing the law, but it will not be easy, considering that corporations contribute heavily to the campaigns of our lawmakers, some of whom appear to believe that what's good for the corporations is good for the U.S. Such a law would merely amend the Alien Tort Statute to replace the phrase “Law of Nations” with the phrase “established international law”. Furthermore, the new ATS could state that it applies equally to individuals and corporations. Finally, the new ATS could state specifically that the law applied in any nation where an injustice may have occurred.
i In this instance, corporations have more rights than individual persons, since international law in no way can be considered to exempt persons from its statutes, yet the Supreme Court has discovered that the law of nations does not apply to corporations. This inconsistent treatment of corporations is a proof that the unholy alliance exists and has consequences in the real world.