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Sunday, December 10, 2023 | Back issues
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Iraq Torture Victims|Can’t Blame Chevron

MANHATTAN (CN) - Just over a month after the 2nd Circuit refused to let Iraq blame corporations for turning a blind eye to Saddam Hussein's atrocities, the federal appeals court on Thursday affirmed dismissed of a similar suit by torture survivors.

Saadya Mastafa, Kafia Ismael, Batul Nur, and Afaf and Zahra Rasool brought the federal complaint in July 2010, alleging that Chevron paid kickbacks and illegal surcharges to Hussein's regime in the oil-for-food program, and that the dictator "used the illicit funds" to pay for its "campaign of human rights abuses against its people."

Each of the five plaintiffs either endured torture from Hussein's agents, or their husbands were the victims of such torture. They said Hussein earned $228.8 million from Chevron's payment of illegal surcharges: 10 to 30 cents per barrel of oil on 9.5 million barrels that Chevron bought from Iraq under Oil for Food.

The women also blamed Banque National de Paris Paribas for failures in policing the transactions as the designated Oil for Food escrow agent.

A federal judge dismissed the women's complaint with prejudice, however, after finding that precedent barred their allegations under the Alien Tort Statute (ATS). The court also identified pleading deficiencies in the claims under the Torture Victim Protection Act (TVPA). In addition to the inadequately pleaded negligence claims, the court found that the statute of limitations had lapsed on the remaining state-law claims.

A three-judge panel with the 2nd Circuit affirmed Thursday.

In finding that the ATS claim must fail, the federal appeals court found that the "complaint fails plausibly to plead that defendants' conduct related to aiding and abetting the alleged violations of customary international law was intentional."

Purposeful action would form the basis for jurisdiction, "not whether defendants merely knew that those abuses were occurring and that defendants' business was enabling such acts," Judge Jose Cabranes wrote for the court (emphasis in original).

"Plaintiffs' allegations that defendants intentionally flouted the sanctions regime for profit, or that they knew their actions were in violation of United Nations Security Council resolutions, or 'international law,'or U.S. policy are irrelevant to the mens rea inquiry; rather, our analysis necessarily focuses on allegations that defendants intended to aid and abet violations of customary international law carried out by the Saddam Hussein regime - a contention that is unsupported by the facts alleged in the complaint."

While pointing to precedent from the Supreme Court's ruling last year in Kiobel v. Royal Dutch Petroleum for that claim, the panel said that the 2012 decision in Mohamad v. Palestinian Authority meanwhile forecloses the TVPA claim.

Noting the lack of "dispute that the defendants in this action are corporations," Cabranes said the court is "required to hold that they are not subject to liability under the TVPA."

The U.N. Security Council set up the oil-for-food program by resolution on April 14, 1995, to alleviate civilian suffering caused by sanctions against Iraq. The program allowed the sale of Iraqi oil with proceeds going to buy humanitarian goods for its citizens. Hussein diverted billions of dollars in cash, goods and services from their humanitarian purposes, however, and U.N. investigator Paul Volcker found that thousands of corporations and prominent international politicians participated in the corruption.

Iraq sued the Zurich-based robotics giant ABB AG, Chevron, BNP and dozens of other entities with which it had done business on behalf of its citizens in 2008, but the 2nd Circuit affirmed dismissal of that case last month.

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