On October 21, 2020, Corporate Accountability Lab filed two amicus briefs in support of Respondents in the upcoming Nestle v. Doe case, about corporate liability under the Alien Tort Statute (ATS). Passed in 1789 by the First Congress, the ATS gives federal courts jurisdiction over tort claims, including for abuses of human rights brought by non-US citizens. Over the last thirty years, advocates and victims of human rights abuses overseas have sued private individuals, government actors, and powerful companies under the ATS. The statute’s applicability to transnational cases of corporate human rights abuse has been drastically narrowed over the years. Now Nestlé and Cargill, two of the most powerful corporate actors in the US (and the world), are arguing that, unlike natural persons, they should be exempt from ATS liability; and that if they are not exempted by their corporate nature, that aiding and abetting international law violations from their US headquarters should not be enough to impose liability on them.
CAL filed the two briefs on behalf of nineteen cocoa and chocolate companies. (One brief was filed on behalf of eighteen cocoa and chocolate companies and the other on behalf of a Dutch chocolate company, Tony’s Chocolonely.) All nineteen companies believe it’s unethical for companies to profit off cocoa produced with forced child labor and have structured their companies so that they source only slave-free cocoa. Moreover, these nineteen companies agree that corporate liability for human rights abuses is essential for a fair and equitable economy. They simply aren’t interested in companies having free reign to engage in abusive practices just because they are cheaper than rights-respecting alternatives.
This blog post first examines the forced labor claims against Nestlé USA and Cargill in the Nestle v. Doe case. It then discusses the two briefs that CAL filed on behalf of chocolate companies: one on behalf of eighteen cocoa and chocolate companies and another on behalf of Dutch chocolate company Tony’s Chocolonely.
The Case: Nestlé USA, Inc. v. Doe I
Malian plaintiffs who allege they were trafficked into Cote d’Ivoire and forced to work without pay on cocoa farms as children first filed suit against Nestlé USA and Cargill in a California district court in 2005. The plaintiffs allege that in addition to being forced to work, they were locked into rooms when not working and suffered physical abuse. They argue that Nestlé USA and Cargill aided and abetted the forced labor they endured by purchasing cocoa from and providing logistical support to farms and cooperatives that the companies knew or should have known used forced child labor.
After fifteen years of litigation, the Supreme Court decided to grant cert in this case this past June. On December 1, 2020, the Supreme Court will hear oral arguments on two legal questions from the case: (1) whether US corporations can be liable under the Alien Tort Statute and (2) whether the charges that Nestlé USA and Cargill aided and abetted forced labor satisfies the “touch and concern” test under Kiobel such that the case can move forward.
If the Court finds either that there is no corporate liability under the ATS, even for US based companies, or that the aiding and abetting charges do not overcome the presumption against extraterritoriality, the ability to regulate and hold corporations accountable under the ATS -- for using forced child labor in cocoa supply chains or otherwise -- would be gutted or at least severely restricted. With few alternate legal options available, this would limit the ability for human rights advocates and potential plaintiffs to hold US corporations accountable in court.
Amicus Brief 1: Amici Small and Mid-Size Cocoa and Chocolate Companies
To support the Respondents (the plaintiffs in the original case), CAL submitted an amicus brief on behalf of eighteen small and mid-size cocoa and chocolate companies. While these companies vary in size and the type of products they sell -- some are local companies while others sell nationally, some are wholesalers while others sell finished chocolate bars or specialty chocolate -- they have a couple of things in common: they believe that cocoa should be produced without forced child labor, that companies can and should produce slave-free cocoa, and that those that fail to should be held accountable.
The brief argues that Nestlé USA and Cargill’s use of cocoa produced with forced child labor undermines the market competitiveness of chocolate companies that produce slave-free cocoa and chocolate in compliance with international law. These eighteen companies (and other slave-free chocolate companies) have invested time and effort to ensure that their supply chains are free from child slavery. Investing in supply chain transparency, implementing due diligence, and committing to sourcing from workers who are paid higher prices for cocoa means they have higher operating costs than companies that rely on forced child labor, which artificially deflates labor costs. This puts slave-free companies at a competitive disadvantage to companies like Nestlé USA and Cargill that source cheap cocoa produced with forced child labor.
Corporate and aiding and abetting liability under the ATS can help to create a more level playing field for all companies, by allowing a legal mechanism to hold the bad actors -- those who source forced labor-produced goods -- accountable. Nestlé USA and Cargill actually agree with amici that the cocoa industry would benefit from a more level playing field for all companies -- at least when they are speaking to European audiences. Although Nestlé and Cargill argue that they, as corporations, shouldn’t be held liable for aiding and abetting forced child labor in the cocoa industry under the ATS, they support mandatory human rights due diligence laws in Europe that could impact their day-to-day transparency and require them to carry out more substantial due diligence regarding where their cocoa comes from and who cultivates it.
Legally binding regulation, like mandatory due diligence laws, is needed to regulate the global cocoa sector (and many other industries). As is well-documented, despite twenty years of corporate promises to clean up their supply chains, the West Africa cocoa industry is still rife with child labor and forced child labor. According to the Department of Labor report released this week, there are currently 1.56 million children still engaged in child labor in the West African cocoa sector and the prevalence of child labor in agricultural households in the Ivorian and Ghanaian cocoa sectors actually rose by 14 percent over ten years (from 31 percent in 2008/09 to 45 percent in 2018/19). Over 90 percent of these children are engaged in hazardous work.
The brief argues that the Harkin Engel Protocol, a voluntary initiative from 2001 in which chocolate companies promised to eradicate child labor in the West African cocoa industry, has failed. Even though industry admits that the Protocol has failed, amici briefs supporting Nestlé USA and Cargill make the absurd argument that only the Harkin-Engel Protocol (and not the ATS or other statutes) can regulate the cocoa sector. Yet as a voluntary initiative, the Protocol does not preclude civil society, governments, or others from also working to stop child labor. In fact, Congress has passed other statutes that also regulate forced child labor outside the US.
Nestlé USA, Cargill, and their supporting amici also allege that without liability for US corporations under the ATS, companies will be less willing to invest in countries with poor human rights records if US companies can be held liable for their actions that aid and abet international human rights abuses that they knew or should have known about. But while corporate investments can lead to economic development and human rights advancement when implemented carefully, investment of capital alone does not always lead to a positive impact. Investment that fails to respect human rights norms will not improve living conditions, but will instead exacerbate poverty and inequalities, resulting in abuses like trafficking and forced child labor.
Amicus Brief 2: Amicus Tony’s Chocolonely
CAL also submitted a brief on behalf of Tony’s Chocolonely, a Dutch chocolate company that sources cocoa from West Africa without relying on a system of farmer poverty and forced child labor. Tony’s position makes clear that companies that source from the same countries as Nestlé USA and Cargill (Cote d’Ivoire and Ghana) and face the same challenges in sourcing cocoa can still favor liability under the ATS for aiding and abetting forced child labor. Tony’s has created a system that, as it explains, combines transparency, higher prices for cocoa beans, strong farmers, long-term commitments, and interventions to support quality and productivity—all elements of a legitimate due diligence system that allows it to source cocoa responsibly.
This brief also argues that corporate and aiding and abetting liability under the ATS are essential, since the ATS fills a gap in US law. Without the few hooks for liability that remain under the ATS (and even fewer beyond the statute) the United States could become a safe harbor for corporate human rights abusers. If there is no corporate liability for overseas abuses, corporations could incorporate in the US to avoid liability elsewhere. This is especially true as an increasing number of countries around the world are implementing binding due diligence legislation, and courts are broadening parent company liability and the extraterritorial application of tort law.
Looking forward
While the Supreme Court is focused on two narrow legal questions, the case presents broader issues about how business should be regulated. Like CAL, the companies that signed the briefs believe corporations should be held accountable for violating human rights and that it’s necessary to regulate the market to prevent forced child labor (and other human rights abuses) in the twenty-first century. By regulating US companies that have potential liability for aiding and abetting human rights abuse abroad, the hope is that the bar for acceptable sourcing practices will be raised, improving the conditions on the ground for farmers and workers worldwide.
Allie Brudney and Avery Kelly are Staff Attorneys at Corporate Accountability Lab.
