Greater involvement and redemption for victims, new and broadened offences: On 1 November 2023, the German Ministry of Justice announced plans to expand its legal regime for international crimes and sent the draft bill to the German Parliament for adoption as particularly urgent. The German draft bill exemplifies how states are gradually relieving international courts and tribunals as the primary enforcers of international criminal law (‘ICL’) and stepping in themselves. This change might bring about far-reaching consequences for businesses.
For decades, corporate liability risks from ICL remained largely theoretical. Now, a series of trials across Europe indicate that businesses have moved into the focus of prosecutors. For example, in Stockholm, two former executives of energy company Lundin Energy (now Orrön Energy) are indicted for alleged complicity in Sudanese war crimes.
What legal and policy shifts are at the root of the emergence of corporate liability for international crimes – and what will the German draft bill add to that?
Corporate liability in ICL
ICL is different from national criminal law. For national criminal law, each state comes up with its own laws and applies them to cases that concern itself. ICL on the other hand is much broader. After World War II, the allies’ Nuremberg Trials established that certain atrocity crimes are so severe that they not only concern individual victims and states, but the international community as a whole. Such international crimes – evoking direct criminal liability under international law – can be prosecuted by any willing state or international tribunal (so-called ‘universal jurisdiction’).
ICL addresses not only violent perpetrators but also intentional enablers. Accordingly, the ICL regimes of most international tribunals and enforcing states provide for ‘complicit’ or ‘aiding’ liabilities. This is of relevance for businesses. Assistance provided by businesses in crimes of aggression, genocide, war crimes or crimes against humanity can occur within any supply chain.
- In case of a customer committing the crime, corporate assistance might move down the supply chain: A company may supply the perpetrator with weapons, ammunition, raw materials, infrastructure or services seen as support of the actual international crime.
- In case of a supplier committing the crime, corporate assistance might move up the supply chain: A company may receive goods or services from the perpetrator and remunerate them, i.e., providing funds which in turn are reinvested enabling further crimes.
Particularly when businesses engage with delicate regions, goods or services, neither of these scenarios is remote.
Nevertheless, the practice of international criminal courts post-Nuremberg – such as the International Criminal Court (‘ICC’) – included no corporate defendants. But as the proceedings against Lundin Energy and their (former) executives show, this status-quo has begun to change. Since states have started to implement and enforce international crimes within their (universal) jurisdictions, corporate ICL liability is growing. Compared to international criminal tribunals, states apply broader concepts of complicity, which capture more of the corporate contributions described above. Moreover, states have the liberty to look beyond local culprits and assign their resources and focus to (perceived) root causes of violence. The effects of this are visible across Europe including, as the latest development, Germany.
Lundin, Lieferkettengesetz, Liability – a policy shift towards increased corporate accountability?
Corporate liability for international crimes is progressing, for example, in Sweden. On 5 September 2023, the Stockholm District Court opened the Lundin trial, which is set to become the longest trial in Swedish history upon its scheduled conclusion in 2026. Ian Lundin and Alex Schneider, former executives of Swedish energy company Lundin Energy, are charged with aiding and abetting war crimes. The indictment alleges that the company’s oil extraction operations in Sudan between 1999 and 2003 fueled, enabled or at least willfully disregarded grave war crimes in the context of the Sudanese civil war. In 2022, the Swedish Supreme Court had rejected a challenge by Swiss citizen and resident Alex Schneider of the Stockholm court’s jurisdiction, reiterating that state jurisdiction for international crimes is universal.
Beyond the confines of ICL, there are additional indications of increasing corporate responsibility for international human rights. Germany may not have charged any business actors with international crimes yet, but in 2023 implemented its Lieferkettengesetz (German Supply Chain Act). The German Supply Chain Act includes a detailed catalogue of obligations for companies to monitor, prevent and remedy human rights issues within their international supply chains, as well as administrative offences in case of violations. The German Supply Chain Act may be the most comprehensive and rigorous among recent domestic human rights due diligence acts from the Netherlands, France, Norway, Switzerland, the UK, Australia and the US state of California. States that choose to scrutinise alleged corporate contributions to human rights violations may consider ICL an effective tool to prosecute.
The many faces of ICL corporate liability before domestic courts
Broader definitions and prosecutorial focus are not the only reasons why state prosecutors might act on alleged corporate involvement throughout Europe. Domestic procedural law – as applied against Lundin Energy – is often different from the statutes of international criminal tribunals. While the Orrön Energy corporation is not a criminal defendant of the Lundin Energy trial, it still may face accessorial liabilities exceeding EUR 200m in fines and forfeitures if its former executives are convicted. The universal jurisdiction of states like Sweden and Germany means that ICL globally no longer only addresses individual executives or employees, but the corporations themselves.
Also, national criminal procedure laws often feature concepts of victim involvement and incidental action. The inclusion of solvent corporate entities in domestic trials may therefore be sought for another reason: For victims lacking the resources to litigate privately in international courts, an attachment to a criminal trial could offer the possibility to assert their individual tort claims. In case of convictions in such trials, these victim parties could claim damages from the defendants. Corporate liability for international crimes therefore not only relates to criminal liability, but potentially vast reparation claims.
This leads back to the expansion of Germany’s ICL regime the German government is planning. If passed, the bill would streamline the victim participation regime to facilitate large numbers of incidental actions. German criminal procedure allows participating victims to attach their tort claims to the criminal trial. The resulting liability for corporate aiders could be particularly unfavourable, as German tort law generally obliges aiders to provide full compensation before seeking redress from the main perpetrator and other participants.
All of this suggests that the Lundin trial only marks the beginning of corporate ICL proceedings before domestic courts; German courts may be next given the legislative initiative. Furthermore, applying liability for international crimes to businesses could top off the broader movement towards corporate responsibility for international human rights. At the same time, this is being shaped in due diligence acts like the German Supply Chain Act as well as the newly announced European Supply Chain Act. The developments certainly require businesses to be even more committed to ensuring compliance in their supply chains.
