The Alien Tort Claims Act: Temporary Stopgap Measure or Permanent Remedy

Lai, Borchien | January 1, 2005

As the world has become smaller through technological advances in travel and communication, the international marketplace has grown larger. The United Nations (“U.N.”) estimates that the number of multinational corporations tripled between 1988 and 1997 to 60,000. As these corporations increase their investments abroad, they also face proportionately increasing pressure from investors to run successful operations and increase profits. The result of this dynamic is well-documented. Multinational corporations invest heavily in underdeveloped countries where natural resources are abundant and labor is cheap. To facilitate operations in the country, the corporations must establish a rapport with the host governments-and often, in the course of establishing ideal business conditions, the host governments engage in criminal acts, including genocide and forced labor, that violate international human rights agreements. Not only do multinational corporations benefit from the government’s misconduct, but the corporation may influence or even encourage the government via the corporation’s substantial investments. Because of this facet of their relationship, it is commonly thought that multinational corporations should bear some responsibility for righting any violations that take place because of business dealings with underdeveloped countries and offer redress for victims. However, multinational corporations have largely escaped liability for these governments’ actions in the past.