The Asser Institute
today is hosting the event Towards Criminal Liability of Corporations for
Human Rights Violations: The Lundin Case in Sweden. Below is some relevant
background to the case.
The Case:
Following its initiation in June 2010, the Swedish Prosecution Authority (SPA) recently concluded
its investigation into the Swedish oil
company Lundin Petroleum SA for aiding
and abetting war crimes and crimes against humanity.
Alex Schneiter (Lundin’s current
CEO and head of exploration at the time of the harms) and Ian Lundin (Chairman
and son of its founder) have received the final notice of the case from the
SPA. The Swedish government approved the request to indict by prosecutors (as
is necessary under Swedish law when investigating extraterritorial offences).
The trial is projected to start in the summer of 2019, and the two men face
life sentences if convicted.
While the two businessmen face personal charges, the
company itself, Lundin Petroleum, also received a notification from the Swedish Prosecution Authority on 1 November 2018 that the
company may be liable to a corporate fine and forfeiture of economic benefits.
According to Miriam Ingeson and Alexandra Lily Kather, in the Swedish context “a corporate fine is not considered a penalty for a
crime but is an extraordinary legal remedy serving as a repressive sanction
supplanting corporate criminal liability.”[1]
In 2019, the Supreme Administrative
Court denied Lundin’s appeal to override the Swedish Government’s
decision to allow the prosecution, and Swedish police have opened a criminal
investigation into harassment of witnesses in the case.
The 'Unpaid Debt' Report:
The case arose from a report by European Coalition
on Oil in Sudan (ECOS) entitled Unpaid Debt. According to the Unpaid
Debt report, a group of Sudanese civil society organisations called upon
European Coalition on Oil in Sudan to assist with their pursuit of compensation
and reparation for the harms perpetrated during Sudan’s oil wars.
The Accusations:
The Unpaid Debt report links Lundin
Consortium’s commencement of oil exploitation with sparking war in Block 5A,
and the company's construction of infrastructure with aiding in crimes against
local communities and their consequent displacement.
In February 1997, the Lundin Group signed an
agreement for exploration and production rights in Block 5A in Southern Sudan.
This oil concession area was located south of
Bentiu on the West Bank of the White Nile in Western Upper Nile/Unity State. A
Lundin subsidiary, IPC, was head of the consortium set up to explore the 5A oil
field (40.4% stake). Malaysia’s Petronas Carigali Overseas (26.1%), Austria’s
OMV (Sudan) Exploration (26.1%) and Sudan’s Sudapet (5%) composed up the
remainder of the consortium.[2]
“They signed a contract with the Government for the
exploitation of oil in the concession area called Block 5A that was not at that
time under full Government control. The start of oil exploitation set off a
vicious war in the area. Between 1997 and 2003, international crimes were
committed on a large scale in what was essentially a military campaign by the
Government of Sudan to secure and take control of the oil fields in Block 5A.”
[p 5 Unpaid Debt]
The Consortium worked on a road and an airstrip in
collaboration with the Sudanese military, which allowed “systematic attacks” on
villages that have been described as “an orgy of raiding and looting”.[3]
The damages listed include forced displacement (changes in farming activity
1994-2003 evidence displacement from Block 5A); deaths; destruction of
dwellings; destruction of livelihood; and looting and destruction of cattle. Lundin sold out of the area in question (what was then
Sudan) in 2003.
PAX has stated:
“The crimes alleged in the Lundin case include the
intentional targeting of civilians, violent displacement, deliberate
destruction of livelihoods, rape, torture, arson, pillage, and the use of child
soldiers. An estimated 12,000 people died and 160,000 were displaced in the area
were the Lundin Consortium, which included Petronas from Malaysia and OMV from
Austria, was active between 1997 and 2003.”
Lundin’s response:
Lundin has a SKr95.6bn ($10.6bn)
market capitalisation, and 27.7 per cent of the company is owned by the Lundin
family trust.[4]
Concerning the ‘Unpaid
Debt’ report: “This report makes false and baseless allegations
against the Company when its subsidiary was the operator of Block 5A in Sudan
between the period 1997 to 2003. The Prosecution Authority has evidently
decided to largely take this report, as well as other reports written by
different NGOs, at face value. These reports contain many inaccuracies and deficiencies
with multiple layers of hearsay and information taken from propaganda materials
and sources, which was a common theme of the conflict in the wider country”
Concerning the case: “The suspicions are based on a biased and
wrongful perception of criminal liability for conducting legitimate business
activities and, as far as we are aware, this has never been previously tried in
any national or international court. The Prosecution Authority is looking to
establish a test case by applying a standard which extends beyond international
law for responsibility of individuals and companies for alleged actions of a
sovereign state. Far from being indifferent to the conflict, which erupted in
the region during the period, the Company did everything in its power to
promote peace through peaceful means.”
The Country:
Swedish prosecutors have
universal jurisdiction for particular international crimes – it was used in
past to prosecute three individuals involved in the Rwandan
genocide, and The Stockholm District Court has tried several cases of war crimes and crimes against humanity
committed during the Balkan Wars. The
first case in Sweden convicting an individual for violations of international
criminal or humanitarian law was that of Jackie Arklöv by the Stockholm district court on 18 December 2006 for crimes
perpetrated against prisoners of war in the Balkan conflict.
Government authorisation is
necessary in these cases for prosecution due to extraterritorial elements:
“The requirement of authorization
is due to the structure of the rules on extraterritorial jurisdiction enshrined
in the second chapter of the Penal Code. Chapter 2, Section 3 provides for extraterritorial
jurisdiction for war crimes based on the universality principle, as well as for
any grave crime carrying a minimum penalty of four years in prison. The latter
category enables Sweden to fulfill obligations in international cooperation and
proactively pursue violations of national interest based on the passive
nationality and protective principle.” [5]
In this case, Lundin appealed the government’s decision, however
this appeal was unsuccessful.
Wider interest:
Prosecutions for the involvement of corporate actors in
international crimes are rare, so this case is being observed closely. Though
the Swedish system does not allow for criminal liability for the corporation
itself, the closest punitive equivalent is being levelled at Lundin, and
company directors are facing criminal prosecution. Between this and the French Lafarge case
concerning corporate criminal liability for international crimes in Syria,[6]
it appears that some European courts are becoming more willing to draw the line
between far-off international crimes and their own European-headquartered
companies.
For more context concerning the historical liability of corporate
actors under international criminal law, see the parts one and two of this blog’s International
Criminal Law and Corporate Actors series.
[1] Miriam Ingeson and Alexandra Lily
Kather, ‘The Road Less Traveled: How Corporate Directors Could be
Held Individually Liable in Sweden for Corporate Atrocity Crimes Abroad’.
[2] See https://www.newframe.com/lundins-south-sudan-ties-hit-south-african-shores/
[3] Unpaid Debt report, p 31.
[4] See https://www.ft.com/content/c7295ae6-d2cf-11e8-a9f2-7574db66bcd5
[5] Miriam Ingeson and Alexandra Lily
Kather, ‘The Road Less Traveled: How Corporate Directors Could be
Held Individually Liable in Sweden for Corporate Atrocity Crimes Abroad’.
[6] For
more background on this case, see the previous Doing Business Right post
by Alexandru Tofan.