Lundin trial: “a strong signal to business”

JUSTICE INFO: What makes the Lundin trial so unique?

GERALD PACHOUD: What makes the Lundin case so incredibly interesting is the fact that a company and its directors are directly accused of an international crime. People who work on this interface between business and conflict have long highlighted it, but there have been very few cases. With Lundin, we have this case and it’s quite a fundamental change. We’re moving from a theoretical reality to a very practical one.

I believe that, whatever the result, the important thing is the existence of the case. Even in the unlikely event that the two executives are completely acquitted, the mere fact that they were on trial is an incredibly strong signal for the business world. The basis of this whole discussion is that most people in business assume it’s impossible for them to be tried for international crimes. In terms of a signal to companies, this is crucial. It makes the case fascinating. Companies have to be careful.

The darker side of the case is that the facts date back 20 or 25 years. What is the impact of a trial so long after the events? Is it more symbolic than concrete, especially for the victims?

For the victims, too much time has certainly passed. But symbols are important. It shows that, despite everything, justice can be done. We mustn’t forget that Lundin was a forerunner. I think that future cases will probably move faster. There’s a parallel with the Lafarge Syria case [the French cement giant is being prosecuted for complicity in crimes against humanity committed in Syria]. One tree doesn’t make a forest, two cases don’t make a generality, but we see that it can happen. The symbol is very concrete.

I’d much rather have this scenario, where the directors are sued personally and not the company, than the other way round. A company can be hurt, but not that much. But here, the signal is very strong.”

In the Lundin case, unlike the Lafarge case in France, only the directors are being prosecuted, not the company itself. Is this a limitation of the Lundin trial?

Yes and no. Yes in theoretical terms in the search for justice: the company, as a legal entity, seems to be liable too. But I’d much rather have this scenario, where the directors are sued personally and not the company, than the other way round. A company can be hurt, but not that much. But here, the signal is very strong. As a company director, you’re operating in a very sensitive area, you know that questions are being asked, and in the best-case scenario you do nothing… and you pay. If only the company had been prosecuted – and it no longer exists [in December 2021, Lundin Energy was bought by Norwegian company Aker BP] – there’s a fine. It’s a different reality.

Some, like Canadian professor Mark Drumbl, believe that there is a kind of hypocrisy and systemic limit to nabbing a few responsible parties instead of dealing with the fundamental issue: the responsibility of multinationals as such. And that if we don’t tackle this, nothing will change.

There are two ways of looking at this. I agree on the need to make companies criminally liable. But what I see above all is that companies don’t “exist”, they operate on the will of their managers. And it was to enable creativity and risk-taking that we invented the company and the legal screen. In my opinion, the question should be reversed: if we had judged only the company and not the managers, what kind of discussion would we be having today? We’d be saying: the company, which is an immaterial notion, no longer exists, so sorry.

Ideally, we’d target the company and its managers. In a non-ideal world, I’d much rather it was just the managers than just the company. From a practical point of view, the fact that it’s the executives who are in the dock on Tuesday morning [September 5, 2023] completely changes the exemplarity of the case.

So you think it’s by targeting individuals at a very high level that we can change the system, by making the heads of all multinationals in comparable situations tremble?

The reality is that no company has an autonomous will. It’s the managers who make the decision to invest in a particular country or to continue operating in a particular situation, on behalf of the company. It’s very important to take responsibility for the company, but in a sub-optimal situation, I prefer that we have individual responsibility. If we had corporate responsibility, imagine the scene on Tuesday morning: a law firm would be there, but who would be in the corporate chair? Whereas here, we have a real, materialized responsibility.

If we look at international standards, responsibility is clearly engaged, even if it is not legally binding. If Lundin had followed these non-binding principles, they would have identified the risks.”

We’ve been talking about corporate social responsibility for a very long time, but is this really the case, given that the Lundin affair is a criminal matter?

Qualifying an act does not change the act itself. An act can be qualified in different ways, depending on one’s perspective. If we look at international standards – the United Nations’ guiding principles or the OECD [Organisation for Economic Co-operation and Development] guidelines – responsibility is clearly engaged, even if it is not legally binding. The argument that many will put forward, including me, is that if Lundin had followed these non-binding principles, they would have identified the risks and perhaps not engaged in the operations they did. There’s a problem of temporality: in this case, the guiding principles did not yet exist. But that’s where we see the major evolution in ten or 15 years. At the time the offences were committed, there was a great deal of vagueness surrounding the notion of corporate social responsibility. According to the guiding principles, to sum up very briefly, this responsibility is to avoid having a negative impact on people. This behaviour is sometimes penalized.

We always come back to the same question: how could they not have known?

And doesn’t this problem of temporality work in favour of the accused’s defence?

In this case, no, because we’re in a different legal space. The notion of complicity in war crimes or crimes against humanity already existed at the time of the events. So the defence can’t rely on that. In the guiding principles, we have deliberately moved away from the notion of legal complicity, because it comes with a series of tests that are restrictive, in particular the idea of mens rea, or shared intent. Proving shared genocidal intent, for example, is extremely difficult. There can be indifference to the commission of the crime and a benefit derived from it, without there necessarily being the will to share intent. This is why, in the guiding principles, there is this notion of link. From the moment there is a link, the company’s responsibility is to do something, albeit much less intensely than if there is commission or co-commission of an offence.

In terms of what exists today, a company that follows the non-binding principles of the OECD or the UN would or could not say that it had not identified the very many highly problematic aspects of Lundin’s behaviour in Sudan. We always come back to the same question: how could they not have known?

We have a Swedish company being prosecuted for crimes committed in Sudan, with two defendants living in Switzerland – one of whom is a Swiss citizen. Is this a complication, or does it make the case exemplary and give it greater international impact?

The company is Swedish for historical reasons, and came to Switzerland because it’s such a beautiful country. It’s a fairly classic structure. In that sense, I agree that with this classic structure, the managers of multinationals have to be all the more careful, especially if staying within a European framework. Lundin could have been domiciled in Singapore, and then there would have been a real problem.

So will all the Lundins move to Singapore after the trial?

This brings us back to the first question: is it better to prosecute companies or executives? Companies can easily be dematerialized, they can exist anywhere, whereas executives remain citizens of a particular country and, in a very practical way once again, you may want to live elsewhere but, especially at the age these executives are, it’s always easier to be close to home…

That’s why it’s better to launch procedures against the management than the company.

This trial carries a risk. We could find ourselves in a situation where, on a technical point, the accused are not convicted (independently of the facts). For example, to return to the question of intent, the trial may show gross negligence, but not enough to constitute complicity. Yet all observers acting in good faith would have to conclude that there is liability.

People are people and so having been accused of complicity in a war crime when you go to your country club is still not very nice. That’s what makes this trial so exemplary.”

Yet aren’t you saying that, whatever the outcome of the trial, it will retain its importance?

That’s what I want to believe. On balance, even if someone is pretty sure they won’t be convicted, people are people and so having been accused of complicity in a war crime when you go to your country club is still not very nice. That’s what makes this trial so exemplary. But in the unfortunate event of the two defendants being cleared, I’m already anticipating the big companies’ legal advisers saying: “You see?”

It’s a risk we have to take into account.

That’s the risk of justice in general, isn’t it?

Yes, but it’s not always as innovative as in this case.

Gerald Pachoud (lawyer)GERALD PACHOUD

Swiss lawyer Gerald Pachoud heads Pluto & Associates, a consulting firm specializing in global public policy and corporate responsibility. He is Professor of Practice at the SOAS School of Law, University of London. He was Special Advisor to the UN Secretary-General’s Special Representative on Business and Human Rights, Professor John Ruggie. In this role, he was closely involved in the conception and drafting of the UN Guiding Principles on Business and Human Rights. He has held several positions within the United Nations and the Swiss administration, notably in the office of the UN Secretary-General in New York and in the Swiss Federal Department of Foreign Affairs. He is the author of the UN reference guide on strengthening corporate due diligence in conflict-affected contexts.

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