Chevron Corporation (CVX): Royal Dutch Shell plc (ADR) (RDS.A) Wins, the World Loses

Furthermore, the court’s finding does not undermine the use of the ATS in cases of human rights abuses. It just requires a stronger connection to the United States. That means that other ATS cases currently working their way through the legal system, such as Earth Rights International’s case against Chiquita Brands International Inc (NYSE:CQB) for allegedly funding and arming Colombian terrorists, are still on track. That also means that the link from human rights violations to corporate liability remains.

A role for investors
Investors have tools available to them that subvert the courts entirely. Increasingly, activist investors are filing shareholder resolutions with corporations to pressure them to manage their human rights risks more effectively.

For example, Chevron Corporation (NYSE:CVX) is embroiled in a take-no-prisoners battle with its shareholders over a $19 billion lawsuit in Ecuador for its pollution of that country’s rainforests. Last year, in connection with the Ecuador debacle, more than a third of Chevron Corporation (NYSE:CVX)’s shareholders voted to strip the CEO of his other role as chairman of the board. Investors also continue to propose resolutions requesting greater transparency from Chevron Corporation (NYSE:CVX) on its decision-making process with regard to entering countries with poor human rights records. These salvos from shareholders are becoming increasingly difficult for companies to ignore.

Last month, the Institute for Human Rights and Business, in collaboration with Calvert Investments and the Interfaith Center on Corporate Responsibility, published a guide, “Investing the Rights Way,” that helps investor to assess human rights risk. Bennett Freeman advises investors to treat human rights as a critical part of their due diligence process.

Takeaway
“The wrong takeaway for investors is that they don’t need to worry about human rights risks or potential liability, or that somehow this is a blow against corporate responsibility,” Freeman said. “The best takeaway is to realize that companies, and therefore investors, face human rights risks and share human rights responsibilities, and that has not changed one iota.”

The Supreme Court gave Royal Dutch Shell plc (ADR) (NYSE:RDS.A) a pass on this one, thereby denying justice to people who have already suffered so much. Investors can and should demand better for their money.

The article Shell Wins; the World Loses originally appeared on Fool.com is written by Sara Murphy.

Sara Murphy has no position in any stocks mentioned. Follow her on Twitter: @SMurphSmiles. The Motley Fool recommends Chevron.

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