The criminal indictment of two Swedish business executives in November 2021 for complicity in war crimes serves as a timely reminder of the importance of the laws of war, and the consequences of breaching them globally and in Australia.
The Swedish Criminal Indictment
In November 2021, the Chairman and former Chief Executive Officer (CEO) of Swedish oil company, Lundin Energy (formerly Lundin Oil AB), were charged with complicity in war crimes for their alleged involvement in the forcible displacement of civilians in Sudan between 1999 and 2003.
The charges follow a decade long investigation by Swedish authorities into the operations of Lundin Energy, which, during the Second Sudanese civil war, was alleged to have paid the former Sudanese Regime to secure a prospective oil site called ‘Block 5A’ in southern Sudan (now South Sudan). Swedish authorities claim that the army and supporting militia of the Regime led a series of offensive military operations in Block 5A, attacking and abducting civilians, plundering, and burning entire villages in order to secure the area for oil exploits. Based on a report by the European Coalition for Oil in Sudan, it is estimated that as many as 12,000 died and 160,000 were displaced from the Block 5A area because of these attacks.
While these war crimes were directly committed by the former Sudanese Regime led by former President Omar al Bashir, who currently faces charges of war crimes, crimes against humanity and genocide in the International Criminal Court, Lundin Energy and its two executives are also facing action by Swiss authorities for their alleged indirect role in aiding and abetting such crimes.
In particular, Swedish Prosecutors claim that the accused executives ‘had decisive influence on [Lundin Energy’s] business in Sudan’, with Chief Public Prosecutor Krister Petersso stating that ‘what constitutes complicity [in this case] in a criminal sense is that [company executives employed the former Sudanese Regime] despite understanding or, in any case being indifferent to [the way in which they were conducting such operations]’.
While the both the accused and the company deny the charges, if convicted, the accused individuals face up to lifetime imprisonment. Lundin Energy itself also faces forfeiture of up to 1.4 billion Swedish Krona in profits made from the sale of its business in 2003 (totalling to over AUD$211 million).
With the proceedings set to take place early this year, this is the first time since the Nuremberg Trials where executives of a listed company will be tried for war crimes. This case serves as a timely reminder of the potentially grave legal risks and consequences for companies that fail to appropriately scope, understand, prevent and mitigate risk factors associated with operating business in armed conflict zones.
International Humanitarian Law
For companies, international humanitarian law (‘IHL’), also known as the ‘laws of war’, provides the most comprehensive framework for understanding and measuring acceptable behaviour during times and places of armed conflict. As a specialised body of law codified under the four Geneva Conventions and their Additional Protocols, IHL seeks to limit the way in which war is waged by regulating the means and methods of warfare and protecting those who are not, or no longer, taking part in hostilities.
IHL is binding not just on States, soldiers, and organised armed groups, but also upon corporations and business personnel conducting operations in armed conflict. Directors, employees, and agents of companies, as well as the corporate entity itself, can be held criminally responsible for grave breaches of IHL and face prosecution for war crimes.
International Criminal Law and War Crime Offences
Under international criminal law, liability for corporate actors is restricted to individual culpability, with executives, agents and employees of companies able to be prosecuted for war crimes and other serious international crimes such as genocide and crimes against humanity. From as early as the Nuremburg Trials, executives of German companies and banks were convicted of war crimes for acts such as pillaging occupied territories and funding the Schutzstaffel (or the ‘SS’, the paramilitary branch of the Nazi Party).
Australia’s domestic laws are broader in application and can hold both corporate individuals and the corporate entity itself to account for their actions in armed conflict. Individuals and corporations can be held criminally responsible for grave violations of IHL under division 268 of the Criminal Code Act 1995 (Cth) (‘Criminal Code’), which codifies 78 different war crimes ranging from offences such as wilful killing, attacking civilians, torture and sexual crimes, to offences including the employment of prohibited weapons or warfare, use of child soldiers and the unlawful deportation or transferring of civilian populations. Corporations convicted of war crimes are liable to significant fines: five times those that could be imposed on individuals. Currently, such maximum penalties range from AUD$666,000 to $2,220,000.
Division 12 of the Criminal Code sets out the legal regime for corporate criminal responsibility, with section 12.1(2) providing that a company may be found guilty of any offence, including crimes punishable by imprisonment such as war crimes. Where an employee or agent physically commits a war crime in the actual or apparent scope of their employment, both the individuals and company may be criminally responsible. A company can be responsible for their employees’ actions if the company authorised, directed, or otherwise encouraged, tolerated or failed to prevent certain acts. This framework of liability shows that company culture cannot be accepting of, or indifferent towards, the way they conduct business in places of war.
Business Activities in Armed Conflict
Certain daily operations of companies carrying out business during armed conflict can potentially result in liability for war crimes. For example, companies that:
- over-exploit natural resources, appropriate property for private use without the owner’s consent, or seize property from adverse or enemy parties may be liable for a range of war crimes under the Criminal Code, including pillaging, destruction or appropriation of property, or destruction or seizure of enemy or adversary property.
- use armed personnel to forcibly evict civilians from prospective business sites, or engage in operations which destroy homes or land, or otherwise render residential or agricultural land uninhabitable to locals, may be liable under the Criminal Code for offences relating to the transfer or displacement of civilian populations.
- contract private or government security forces to defend business sights, depending on the nature and terms of the corporation’s engagement, may be exposed to liability for any war crimes committed by such forces, such as those arising from attacking civilians or other serious violations of IHL
- manufacture or trade prohibited weapons, components or chemicals, or companies that provide logistical, financial, information or transport services to armed groups during armed conflict may be complicit in war crimes where they directly or indirectly facilitate the commission of war crimes by others.
Prosecutions in Australia
It must be noted that, to date, there have been no prosecutions brought in Australia under the Criminal Code, let alone any against corporate defendants. As noted above, there currently exists no international court in which a war crimes prosecution of a corporation could be pursued. A further relevant consideration is that, in respect of war crimes, Australian law claims universal jurisdiction, enabling prosecutions regardless of territorial link between Australia and the alleged crime or offender. Given, however, that a war crimes prosecution cannot be commenced in Australia without the consent of the Attorney-General, it might be thought that there will be restraint in exercising such jurisdiction.
Although not the focus of this post, a holistic discussion on Australian law potentially applicable to the commission war crimes should also include alternative legal mechanisms. The ‘money trail’ from illegal conduct involving businesses in war zones could include prosecutions for money laundering, or civil proceedings under the Proceeds of Crime Act. Additionally, Australia’s recent enactment of a ‘Magnitsky-style Act’ means that autonomous sanctions can be imposed on entities that have been involved in the commission of serious violations of IHL.
Importance of IHL
Whilst Australian authorities have not yet commenced a prosecution of a corporation for war crimes, the Swedish example of Lundin Energy should serve as a stark reminder to Australian companies doing business in conflict zones that the prospect of legal accountability for involvement in violations of IHL is very real. Indeed, as noted above, there is no shortage of an Australian legal framework that would enable this to occur. A move to prosecutions of ‘white collar war crimes’ might be viewed as reflective of a broader global trend towards clamping down on financial support for often violent vices of international concern.
It is crucial that Australian companies operating in conflict zones understand the principles of IHL and how they apply to their business. Australian Red Cross, along with RMIT University, have developed a series of IHL resources to assist companies improve their IHL understanding and implementation, including:
- A Practical Guidance Document: Doing Responsible Business in Armed Conflict, which provides an introduction to IHL and its relevance to business and explores seven indicators of corporate best practice for IHL, focusing on IHL implementation and risk management across business policy; capacity and capability; operations; and transparency and accountability.
- An interactive scenario-based e-learning module for business and law students called ‘War, Law and Business: A module on international humanitarian law for future business leaders’, which places the student in the shoes of a CEO of a major mining company, as they navigate a fictitious, but realistic crisis scenario, and learn how to apply IHL in legal and ethical decision-making and risk management when conducting business in a conflict zone.
Pranamie Mandalawatta is a Legal Advisor at the Australian Red Cross International Humanitarian Law (IHL) Department responsible for managing the Department’s engagement with the Australian Government and legal sector, including the judiciary. Pranamie has a background in IHL, international criminal law, human rights and cyber law. She formerly acted as a senior legal officer in the Office of International Law at the Australian Attorney General’s Department and has also worked as a criminal defence lawyer at Sydney-based law firm, Nyman Gibson Miralis. Pranamie holds a Masters in public international law from the Australian National University and has interned at the United Nations International Residual Mechanism for Criminal Tribunals.
Liam MacAndrews is currently a Senior Solicitor at Nyman Gibson Miralis, Sydney, working in criminal defence. His practice covers international/transnational criminal matters as well as financial crime cases. Previously, Liam worked in international criminal law at the Extraordinary Chambers in the Courts of Cambodia. Liam also works as a sessional academic at the Queensland University of Technology.