Echoes of Nuremberg in a new set of corporate trials

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If you’re a corporate executive, there are plenty of reasons to think twice about dealing with murderous regimes and criminal groups.

Basic morality is one, of course. Another is the potential for legal action against your company that could force it to pay huge amounts of shareholders’ money in penalties, and leave you out of a job. Now a Paris court ruling has highlighted a risk that looks increasingly meaningful: that you could end up in prison.

Executive prosecutions over international crimes are making a comeback

When German steel tycoon Alfried Krupp went on trial at Nuremberg in 1947, accused of complicity in Nazi atrocities, his defence was that of a simple businessman. “We only wanted a system that worked well and allowed us to work unhindered,” he said.

Krupp was sentenced to 12 years in prison for employing slave labour and “plundering” occupied territory. He was released in 1951, along with other businessmen convicted of war crimes, amid a US effort to strengthen the West German economy as the cold war set in.

Having been established at Nuremberg, the notion of prosecuting major corporate executives for complicity in mass crimes seemed to fade from the legal landscape over the following decades. Now it is making something of a comeback.

On Monday Bruno Lafont, the former chief executive of French cement producer Lafarge, was sentenced to six years in prison for financing terrorism. The Paris court rejected Lafont’s argument that he was unaware of, and therefore not responsible for, his company’s payments of €5.6mn to Islamic State and other jihadist groups to protect the continued operation of its plant in Syria from 2012 to 2014. Three other executives were also handed jail sentences, while Lafarge itself was also convicted and ordered to pay a fine of €1.125mn.

Another trial with few precedents is approaching its conclusion in Sweden. In the next few weeks, a Stockholm court is expected to give a verdict in the war crimes trial of the former chair and chief executive of Lundin, once one of Scandinavia’s largest oil and gas companies. Ian Lundin and Alex Schneiter are accused of complicity in the Sudanese government’s violence against its people, in order to secure profits from their company’s oil wells in the country. Both deny the allegations.

Last year, a Colombian court handed 11-year jail sentences to seven former executives of banana company Chiquita, in connection with payments by the company to paramilitary groups to protect its business interests.

Heightened risks

These cases come amid a wider landscape of growing legal risk for companies in connection with human rights violations. The EU’s new Corporate Sustainability Due Diligence Directive — while narrower in scope than initially planned — will create new requirements for companies to address human rights problems in their supply chains, or face fines of up to 3 per cent of revenue.

Another major development came last October with a bombshell ruling in New York against BNP Paribas. The French bank was found liable for more than $20mn in damages to three Sudanese refugees, having provided financial services to that country’s regime while it was pursuing mass violence against its own people.

BNP’s market valuation fell by $9.6bn in two days as investors feared it could have to pay billions more to thousands of other plaintiffs — on top of the $9bn it had previously paid US authorities in a settlement over its violations of sanctions. (BNP plans to appeal the “flawed” October verdict.)

Lafarge had already had an expensive payout of its own, paying US authorities more than $777mn in 2022 to avoid prosecution over its past dealings with Isis.

Such numbers are enough to give any corporate executive cold sweats. But the threat of imprisonment is a still more potent deterrent than the risk of having to pay out a chunk of your shareholders’ cash.

Non-profit pressure

The recent flurry of prosecutions stems in large part from the dogged work of non-profit groups targeting corporate complicity in international crimes.

The Lafarge prosecution stemmed from a legal complaint by French legal activist group Sherpa and the European Center for Constitutional and Human Rights, together with Syrian former employees of the company. The Lundin prosecution drew on investigative work by European non-profits including Dutch group Pax; the Chiquita executives’ trial followed investigations by US-based ones including the National Security Archive.

The non-profits want to ensure that further cases follow — notably in France, which since 2013 has had a specialised investigative unit focused on crimes against humanity and war crimes.

Last November, groups including the ECCHR filed a complaint with French authorities against energy giant TotalEnergies over the reported killings of dozens of civilians by soldiers at one of its facilities in Mozambique. (Total said it “strongly and categorically rejects” the suggestion that it “had, or could have had, any knowledge of the acts of violence”.)

Another investigation is ongoing into several of the biggest French defence companies for alleged complicity in war crimes in Yemen, following a complaint by other NGOs. Other legal complaints are targeting room booking platforms Airbnb and Booking.com, alleging complicity in the illegal occupation of the West Bank through listing properties there (both companies deny wrongdoing). Lafarge, meanwhile, faces a further possible charge of complicity in crimes against humanity in Syria, which is still being investigated by French prosecutors.

It remains to be seen how many of these cases go to trial, and whether any charges are brought against executives in their personal capacity. Corporate bosses have long tended to treat complaints from campaign groups as a minor distraction. Bruno Lafont’s downfall suggests they may need to start taking them more seriously.

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