Originally from Dispute Resolution Journal

Globalization has its dark side—e.g., multinational corporations committing large-scale environmental torts on foreign soil through their subsidiary operations. Victims in developing countries have few means of redressing these torts. This article discusses an advantageous alternative to litigation, which has proven ineffective: using the U.S. Alien Tort Claims Act as leverage to encourage multinational corporations to mediate these disputes.

Multinational corporations are increasingly flocking toward developing countries to expand their bases of operations.1 There are many reasons for this trend. Developing countries offer natural resources, tax advantages, and cheap labor. Their governments welcome this foreign investment because it boosts their economies.2 However, these investments often come at a cost: damage to the local environment.3 For example, such damage has been alleged as the result of Texaco’s oil exploration and waste disposal practices in Ecuador4 and British and Australian mining activities in New Guinea.5