The Alien Tort Claims Act of 1789: Globalization of Business Requires Globalization of Law and Ethics

Abstract

Global corporations, operating in foreign host countries with dissimilar cultures and laws, political institutions and ideologies, commercial practices and customs and levels of economic development, are confronted with different ethical standards with which they gauge their conduct and ascertain their moral responsibilities.2 It is tempting in such cir cumstances to adopt the theory of ethical relativism ? under which something can be judged to be morally good if, in one particular society, it complies with the prevailing moral standards, but wrong if it does not and to declare that the proposed practice or activity is moraUy acceptable, because is conforms with the moral standards or practices ofthe particular society. It may be equaUy tempting to insulate or disassociate the company from questionable conduct of its host country partner, so that repercussions are muted or avoided. A decision of a three-judge panel of the Ninth Circuit Court of Appeals vitiates both tactics and potentiaUy exposes U.S. multinational corporations to liability for human rights violations committed by foreign governments in the course of under taking economic development projects. In Doe I v. Unocal Corp., the panel ruled that the residents of Myanmar, aUeging human rights violations forced labor, murder, rape and torture ? perpe trated by the Myanmar miUtary in developing a gas pipeline, were permitted to proceed with their action against Unocal Corporation, the Myanmar government's commercial partner in the pipeline development project, under the AUen Tort Claims Act. The Alien Tort Claims Act permits aliens to pursue a course of action in tort in the federal court for specific and egregious violations of human rights. Indeed, the Unocal decision by the panel of the Ninth Circuit Court of Appeals has caught the attention of major corporations, such as ExxonMo bil, Drummond, Occidental Petroleum, IBM, Citi bank and Coca-Cola that may face liability for the misconduct of third-world governments, and should be examined closely by aU multinational corporations that undertake economic development projects for repressive foreign governments in third world countries if they do not want "to face torture survivors in court a pubUcity nightmare."8 Hafled as a landmark case marking "The first time any court Edward f. Schoen is Dean of the Rohrer College of Business of Rowan University in New Jersey. He earned his B.S. degree in Accounting from La Salle University and his f.D. degree from Georgetown University Law Center. Dean Schoen's principal research interests are in the areas of First Amend ment protection of commercial speech, business ethics, and assessment of learning outcomes. Margaret M. Hogan holds the McNemey-Hanson Chair in Ethics at the University of Portland in Oregon. She is the Executive Director of the Garaventa Center for Catholic Intellectual Life and American Culture. She received her doctorate from Marquette University. Professor Hogan's principal research interests are in applied ethics, especially medical ethics and business ethics, and in natural law theory. Joseph S. Falchek is chair of the Department of Business and Management at King's College in Pennsylvania. He received his Masters Degree form Lehigh University and his f.D. degree from Temple University. Professor Falchek's principal interests are the intersection of law and management, business ethics, and constitutional law.