In The News

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Doing Business with Foreign Suppliers or Manufacturers? Beware Their Illegal Practices

By Bryan E. Pieper

Yesterday, the 9th Circuit Court of Appeals held that Nestle, Archer Daniels Midland and other companies that sell chocolate from Africa can be sued for importing cocoa harvested by child slave laborers in the Ivory Coast. Three former child slave laborers sued the defendant food manufacturers for allegedly using and selling the product of their slave labor, under a 1789 law allowing suits in U.S. courts for violations of international human rights.

The trial court dismissed the lawsuit, holding that the law did not apply to the defendant U.S. corporations’ alleged involvement in the illegal activities that occurred abroad. The Court of Appeals disagreed, holding that they could be sued in U.S. courts if their actions in the U.S. substantially contributed to human rights violations overseas.

The defendant companies argued that they were simply searching for the cheapest sources of cocoa. Writing for the dissent, Judge Johnnie Rawlinson agreed, arguing that the U.S. companies should not be held liable to the former child slave laborers for the abuse done to them by companies in Africa because the lawsuit did not show that the U.S. companies “acted with the purpose of aiding and abetting child slave labor.” Rather, their motive was merely to increase profits by obtaining cocoa from the cheapest source available.

The majority rejected this argument and reinstated the case, arguing that the defendant companies knew the suppliers were using child slave labor but did nothing to end it or even to stop using those sources. Writing for the majority, Judge Dorothy Nelson argued that the plaintiffs’ allegations were sufficient to establish that the defendant companies willingly accepted the benefits of slave labor, writing “Driven by the goal to reduce costs in any way possible, the defendants allegedly supported the use of child slavery, the cheapest form of labor available,” and that they “placed increased revenues before basic human welfare.”

You can find the entire court opinion here.

 

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