NCPA - National Center for Policy Analysis

Old Law Jeopardizes Multinationals

August 19, 1999

Under an old law dusted off by lawyers, American-based firms are being sued at home for alleged offenses committed overseas. The 1789 alien tort law was originally designed to provide redress for foreigners against sea pirates and slavers. But today's activists have discovered and resurrected it to attack multinational corporations.

  • Chevron faces cases relating to Nigeria, and Unocal is in trouble over operations in Myanmar (formerly Burma).
  • Four out of 18 American retailers and clothes manufacturers have agreed to settle for $1.25 million an alien tort suit involving labor practices filed on behalf of some 50,000 garment workers in Saipan.
  • The other retailers named in the suit -- including The Gap and Wal-Mart -- are standing firm.
  • Another four firms, not named in that suit, are about to be sued -- and are reportedly likely to settle on similar terms.

The settlement money will go to a fund to support independent monitoring of the labor practices of their independent clothing suppliers. Albert Meyerhof, the attorney who filed the suit, claims that it has "privatized law enforcement" -- since the companies will now be paying for their own regulators.

Source: "Go Global, Sue Local," Economist, August 14, 1999.


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