The importance of the laws of war to companies

Criminal indictment of two Swedish business leaders for complicity in war crimes affirms the importance of the laws of war to companies.

On 11 November 2021, the Chairman and former CEO of a Swedish oil company were charged with complicity in war crimes. Both the accused and the company strongly deny the charges, but the news serves as a timely reminder of the importance of international humanitarian law (otherwise known as the laws of war) to companies.

After a decade-long investigation, Swedish prosecutors have indicted the Chairman and former CEO of Lundin Energy (formerly Lundin Oil, then Lundin Petroleum) for complicity in war crimes in their efforts to secure oil operations in Sudan between 1999 and 2003.  Aside from these individual criminal charges, the Prosecutors have also filed a claim to confiscate an amount of 1.39 billion Swedish Krona (approximately AUD$219 million) from the company. Lundin Energy is a prominent Swedish-owned company, and this news has made waves in Europe.

The prosecutors claim the two accused ‘had a decisive influence on Lundin Oil’s business in Sudan’, and were complicit in war crimes committed by the then-Sudanese regime.  The regime was led by former President Omar al Bashir, who also faces charges of war crimes, crimes against humanity and genocide in the International Criminal Court.

Of particular note is that these are charges of complicity in war crimes, rather than complicity in human rights abuses, which marks the first prosecution of senior corporate executives for these egregious international crimes since the Nuremberg trials of German corporate leaders in the aftermath of World War II.  War crimes are particularly serious and grave breaches of the laws and customs applicable in armed conflict – international humanitarian law – and differ from human rights violations, partly because they must take place in the context of an armed conflict.

In 1997, Lundin Oil signed an agreement with the Government of Sudan for the exploration and production of oil in southern Sudan (now the independent State of South Sudan). For some time, that region had been largely spared from the civil war that was raging in Sudan, but by 2003 it had become one of the most impacted areas. 

The Sudanese government, through the military and militia allied to the regime, carried out a war in conflict with international humanitarian law and that, according to Swedish law, constitutes grave war crimes.
Swedish Prosecution Authority

The Sudanese people suffered enormously during this time.  An estimated 12,000 people died and 160,000 people were displaced.  In many ways this suffering is ongoing, as survivors who did flee haven’t been able to return to their homes or learn about the fate of their loved ones.

It is the contravention of the laws of war that Lundin’s leadership is accused of violating.  It is noteworthy too, that the individuals are not accused of carrying out the alleged crimes themselves, but rather, that they were complicit in the war crimes of others.  As the Chief Public Prosecutor Krister Petersson has stated, ‘what constitutes complicity in a criminal sense is that they made these demands [for Sudanese regime forces to secure their exploration zone] despite understanding or, in any case being indifferent to’ the military and the militia carrying out grave violations of international humanitarian law.

That companies should uphold international humanitarian law when doing business in conflict-affected areas is perhaps a truism to many.  However, this latest indictment of a leading Swedish business by Swedish prosecutors is a stark reminder of the personal and professional risks of doing business in a conflict zone, as well as the relevance of this legal framework to corporate actors.

We have heard firsthand from leading Australian companies about the need for greater awareness of international humanitarian law.  The increase in the number and complexity of armed conflicts, and the continued globalisation of supply chains and operations, means that businesses working in these complex environments are exposed to unique operational, reputational and legal risks.  It follows that corporate leadership and risk-management in conflict-affected areas demand a nuanced understanding of the risks, rights and responsibilities under all relevant international legal frameworks, including international humanitarian law.

Today, businesses are more aware of their human rights responsibilities than ever before.  Some businesses have adopted corporate policies that align with initiatives like the UN Global Compact and the UN Guiding Principles on Business and Human Rights, to ensure their operations respect human rights. However, although the business world has started to refine its approach to working in conflict-affected areas, a growing familiarity with human rights law does not equate to a commitment to comply with international humanitarian law.

We wanted to ensure that businesses operating in conflict-affected areas have the knowledge and tools they need to align internal policies and processes with international humanitarian law – not only for themselves, but for the communities in which they operate.  Overwhelmingly, civilians are the main victims of armed conflict and they are better protected when parties to the conflict, and others caught up in the fighting, understand and respect international humanitarian law.

There is also a need to educate the next generation of business leaders in this critical, but often misunderstood body of law.  To this end, we share an exciting new online learning experience: ‘War, Law and Business: A module on international humanitarian law for future business leaders’.  

War, Law and Business is an immersive experience designed for business students, but equally valuable to students in law and other disciplines.  More than a traditional e-training module, this interactive simulation places the learner in the shoes of the CEO of a global extractives company and asks them to make a series of decisions to navigate their way through a precarious legal and ethical dilemma in a conflict-affected area in which it operates.  

To find out more, we invite you to view this short trailer.

We invite you to try this new immersive experience, War, Law and Business.

No doubt, a multi-year trial process now awaits the Lundin Energy Chairman and former-CEO. Certainly, corporate accountability for war crimes is not a swift enterprise.  Nevertheless, only time will tell whether this presages a renewed and sustained focus on corporate accountability for violations of the laws of war. Regardless, it should urge all responsible business mangers – and educators of the next generation of business leaders – to be alive to that possibility. 

Australian Red Cross and RMIT University have developed a suite of resources and training materials for businesses.  Please visit the Australian Red Cross Business and IHL Hub for more.

By Fauve Kurnadi and Jonathan Kolieb

Fauve Kurnadi is the Legal Adviser – Academic and Private Sector Engagement in the International Humanitarian Law Program at Australian Red Cross.

Dr Jonathan Kolieb is the Peace and Conflict Lead at RMIT University’s Business and Human Rights Centre and a member of the Australian Red Cross International Humanitarian Law Advisory Committee (Victoria).

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