Legal Challenges for the Defence Industry: a Long Term Vision
For corporations, the duty to pay attention to their operations cycle has increased over the last 10 years. Soft law, including OECD’s guidelines on responsible business conduct and the UNHRC’s Guiding Principles on Business and Human Rights have shaped the contours of a more virtuous way to do business, and local legislations have followed suit at their own pace. France has been at the forefront of the trend, with two sets of legal dispositions affecting substantially corporations’ operations, the corporate duty of vigilance law, and the anti-bribery Sapin II law.
The control over the defence industry’s activities, and its exports in particular, goes further. All European exports, for instance, are regulated by the European Council Common Position, arms embargoes set by the EU, the UN or other organisations, and the Arms Trade Treaty, which all EU Member States have ratified. Each EU country implements these instruments autonomously, mainly through licenses delivered to manufacturers to export.
Another, less commented risk is, however, arising for the defence industry: that of prosecutions against the company and its executives on the charges of complicity for international crimes. While the accountability of corporations for their role in war crimes and crimes against humanity was already addressed during the Second World War, with, for instance, the prosecution of Krupp during the Nuremberg Trial, it had somewhat been relinquished, becoming a substantial matter again only over the past twenty years. Increasingly, indeed, scholars have reflected on the responsibility arms manufacturers bear in the perpetration of war crimes, crimes against humanity and genocide, when these violations are perpetrated with the weapons they have sold to the alleged perpetrators. So have practitioners.
Domestic prosecutions risk
Several European jurisdictions have been at the forefront of investigations involving defence corporations, following up on human rights Non-Governmental Organisations filing complaints against arms manufacturers. In France, for instance, a communication by French NGO FIDH incriminating French company Qosmos, alleging the company had sold surveillance material to the Syrian government, led to an investigation seeking whether the company and its executives should be held accountable for the torture and abuses committed by Syrian government. The investigation, closed after failing to demonstrate the causal link between the materials sold and the violations, showed the prosecution’s interest in the matter. While this one was closed, other investigations are still ongoing throughout Europe, such as the one against arms manufacturer RWM Italy, in Italy. In February 2021, the preliminary investigations judge ordered the prosecutor to continue the investigation into the sales of weapons to Saudi Arabia and the United Arab Emirates, implicating not only the corporation and its executives, but also officials of the National Authority for the Export of Armament (UAMA).
International prosecutions risk
Aside from domestic prosecutions, potential for prosecutions before the International Criminal Court (ICC) must also be considered in an arms manufacturer’s legal risk assessment. In addition to situations referred to it by the UN Security Council, the court has jurisdiction over alleged violations perpetrated on the territory of any State signatory of the Rome Statute, and by alleged perpetrators nationals of States signatory of the Rome Statute. Scholars have reflected on the potential for prosecutions against arms companies on the basis of Articles 25(3)(c) and 25(3)(d) of the Rome Statute, two provisions providing for aiding and abetting and contribution to a crime by a group of persons acting with a common purpose respectively. Both variants of complicity may indeed apply to the provision of weapons, although it having not been applied to the context may be countered on the basis of Article 22(2), that provides that “the definition of a crime shall be strictly construed and shall not be extended by analogy”. An awaited response to the communication submitted to the ICC’s Office of The Prosecutor, and asking the Office to investigate several corporations, including Airbus Defence and Space, BAE Systems, and Dassault Aviation, may bring light upon the interpretation of the Rome Statute.
Conclusion
It is essential for companies selling dual-use and military material to integrate this arising challenge and adapt their strategy according to the desirable level of exposure to legal and reputational risk, and in accordance with their values.
Incorporating this challenge also means accounting for the cascading effect it holds. In the context of restructuring endeavours, for instance, the wildly commented 25 November 2020 decision finding that the absorbing company was accountable for the criminal offences perpetrated by the absorbed company is of essential significance for the defence industry. Thus, for instance, a company buying a start-up that sold military or dual-use material used for the perpetration of war crimes or crimes against humanity would face the risk of being investigated and prosecuted.
Identifying risk factors, such as the political context at the time of the exportations, the duration of the contract, the company’s home country’s diplomatic relationship with the prospect, and the classification of the material sold, among others, will be key. A myriad of legal questions will likely ensure from this new challenge, including that of the foreseeability of the law, of the accountability of officials who delivered licences, and, eventually, state responsibility. Questions with no precedents set yet.