ET – Extraterritoriality – Alien
or Friend
KPMG Forensic Annual Law Lecture 2012
Peter Rees
Legal Director, Royal Dutch Shell plc
September 25, 2012
Peter Rees: ET – Extraterritoriality – Alien or Friend
Peter Rees QC was appointed Legal Director of
Royal Dutch Shell plc on January 1, 2011. In
this post he has ultimate responsibility for the
Shell global legal function and advises the Shell
group management on all legal matters of
group-wide
wide importance. The Shell legal function
comprises some 1,000 staff, of which around
700 are lawyers or intellectual property
professionals. The Shell legal function includes
the ethics and compliance office.
As Legal Director, Peter is also a member of the Executive Committee.
Peter started his legal career in 1979 at the international law firm Norton Rose. He became a
partner in 1987 and Head of Dispute Resolution and a member of the Executive Committee in
1997. In 2006 he joined Debevoise & Plimpton as a partner in its London office. In 2009
Peter was appointed Queen’s Counsel.
He attended Downing College, Cambridge University where he took his law degree. He also
has an MBA from Nottingham Trent University. Peter is a Fellow of the Chartered
Chartered Institute of
Arbitrators, a Chartered Arbitrator, and an accredited adjudicator and mediator.
Peter is a former Chair of three organisations: the International Construction Projects
Committee of the International Bar Association; the Technology and Construction
Construction Solicitors’
Association; and the Board of Management of the Chartered Institute of Arbitrators. He is a
member of the Council of the International Chamber of Commerce UK and of the European
User’s Council of the London Court of International Arbitration.
Ar
Personal
Born in 1957 in the UK, Peter is married to Nicola. He has a daughter, Megan.
Peter Rees: ET – Extraterritoriality – Alien or Friend
Introduction
It is 30 years since ET – The Extra Terrestrial
was first released and broke all box office
records.
The storyline is simple. An alien gets
stranded on Earth and is protected by a
child, who understands the good in him,
against the forces of authority, who are
innately suspicious, even aggressive
towards him. Eventually, he gets to go home
without being harmed.
The film encapsulates our equivocal
relationship with extra terrestrials; we either
love them or hate them. They are either
benign or threatening – and most of the
th time
it is the latter. The assumption we tend to
have is that extra terrestrials are out to
destroy us.
My first experience of extra terrestrials was
in the early to mid-sixties.
sixties. Some of you may
be old enough to remember the television
series, My Favourite
te Martian. It featured a
friendly Martian who gets stranded on earth
and is protected by a good hearted reporter
against the forces of authority, who are
innately suspicious about him. Sound
familiar?
But so far as I was concerned this was an
extra terrestrial
trial who was kindly and
unthreatening. He had various unusual
powers. He could raise from his head two
retractable antennae. He could become
invisible, read minds and lift things up into
the air using just his finger. He could slow
time down or speed people
le up. But,
fundamentally, his motivation for doing these
things was beneficial rather than malign. He
was a nice guy.
At the same time, in fact in the very same
year that My Favourite Martian was first
broadcast – 1963 – another television
series was launched
ched which portrayed extra
terrestrials in a very different light. It has
become the longest running science fiction
television show in the world. It is of course
Dr Who where, by and large, the extra
terrestrials are portrayed as aggressors out
to destroyy humanity. So far as we are
concerned, the Daleks have only one thing
on their mind – “Exterminate”.
30 years on from ET and almost 50 years
on from My Favourite Martian and Dr Who,
another ET has come into sharp focus in my
mind. Not ET standing for extra
a terrestrial,
but ET standing for extra territorial. And I
have to say that, like extra terrestrials, there
seems to be equivocation as to whether
extra territoriality is a force for good or evil.
Whether these are powers that can be used
for overall benefit
fit or whether they will
always lead to harm.
So, what I would like to examine this
evening is where we are on extra
territoriality, the extra territorial application
of law, whether what we have done so far
is helpful or harmful, beneficial or
misguided, and look at what we could think
of doing in this area to address some
serious and urgent issues that might well
benefit from extra territorial legal treatment.
Let me start by going back to basics.
Laws are enacted by sovereigns, by those
who have sovereignty
nty over their subjects, by
those, to put it bluntly, who have the ability
to tell others what to do and the means to
enforce it.
It may not be popular in these days of
protocols, guidelines, principles and codes
but unless you have the ability to enforce
you don’t have the ability, effectively, to
legislate.
Ordinarily, therefore, you have the ability to
legislate over those within your sovereign
territory or over those who claim the right to
have an affiliation to your sovereign territory
– the quid pro quo
uo for which is that they
have to do what you say.
Put differently, and arguably more elegantly,
over those within your jurisdiction.
Let me give you a more authoritative view
than mine. That of the UK and Dutch
governments.
Peter Rees: ET – Extraterritoriality – Alien or Friend
“In relation to claims of a civil
vil nature, the
bases for the exercise of civil jurisdiction
under international law are generally wellwell
defined. They are principally based on
territoriality and nationality. The basic
principles of international law have never
included civil jurisdiction for claims by
foreign nationals against other foreign
nationals for conduct abroad that have no
sufficiently close connection with the forum
State.
In common, and increasingly, legal,
parlance, however, extra territoriality has
come to be associated with legislative
attempts by one nation to control the actions
of persons, whether individual or corporate,
in another nation. Jurisdiction over the legal
person, individual or corporate, no matter
how tenuous, and no matter how that is
established, is used to seek to dictate the
actions of that person within the sovereign
territory of another nation.
It is clearly established that the basis for
jurisdiction is always grounded in a
sufficiently close nexus to
o the forum State.
The only exception is universal criminal
jurisdiction. Accordingly, it is axiomatic that
the exercise of civil jurisdiction by a State
will always depend on “there being
Indeed, we are moving into a world where
some think thatt nations should be able to
dictate the actions of persons in other
sovereign nations notwithstanding they have
no actual, or legal, jurisdiction over those
persons and to force those over whom they
have jurisdiction to break the laws of other
sovereign nations.
between the subject matter and the state
exercising jurisdiction a sufficiently close
connection to justify that State in regulating
the matter and perhaps also to override any
competing
eting rights of other States.”
International law imposes the requirement of
a sufficiently close nexus to the forum
asserting jurisdiction, in order to minimise
minimis
conflicts between States and to prevent
forum shopping by plaintiffs and defendants
rushing to obtain judgments in a forum that
favors their own interests.”
Whilst extra territoriality has come to be
viewed as an attempt to legislate over those
outside your jurisdiction, that is not the
original concept. The original concept was
one of exception. That certain persons and
objects could be within the territory of a
sovereign but outside the reach of the law of
that sovereign, or at least certain aspects of
it. In other words, on your territory but extra
territorial.
Whilst the concept was first propounded in
the 17th century it was first put down on
paper, at least on paper which had any
legal effect, in the Act Preserving the
Privileges of Ambassadors in Great Britain in
1708. That legislation paved the way for
the sorts of diplomatic immunity we are all
now familiar with around the world.
These are the issues which I would like to
consider this evening. There are many
aspects which I could cover and which I
regularly encounter, but time dictates I use a
few examples to demonstrate the broader
problems.
So, I will start by looking at some
misconceived extra territorial legislation, in
other words at some of the attempts that are
being made to impose obligations on
persons to act in contravention of the laws
of another sovereign nation and look at
whether this legislation is actually
addressing the problems
ms which it is
professing to solve. I will then go on to look
at some extra territorial problems which
need to be addressed now by legislation
but which are not being tackled because
they are in the “too difficult” box.
Before doing that I would just like to put a
fairly simple proposition to you.
If somebody not from your country commits
a crime against somebody not from your
country in another country, i.e. not your
country, should the courts in your country
have any jurisdiction over the issue?
Or put more
ore specifically, if a British security
guard, employed by a British private
” Whilst extra
territoriality has come
to be viewed as an
attempt to legislate
over those outside your
jurisdiction, that is not
the original concept.
The original concept
was one of exception.”
Peter Rees: ET – Extraterritoriality – Alien or Friend
security company, wrongfully detains,
punches and injures, or even kills, a British
anti-capitalist
capitalist demonstrator during a riot in
London, should that security guard, or the
security
ty company, be liable to be sued in
the United States?
Supreme Court next Monday. Whilst there is
much that could be said about extra
territoriality in the context of the Alien Tort
Statute and that case, I will defer to the
Supreme Court on that issue and say no
more on the topic of the ATS this evening.
There is one piece of legislation which
might be used to try. It is what has come to
be known as the Alien Tort Statute. A piece
of legislation passed in the 1790s
1790 after a
French diplomat to the USA wass insulted by
another Frenchman and then had his
walking cane tapped on the street by that
same Frenchman.
Instead, I would like to turn to some extra
territorial legislation which, in a misguided
attempt to prevent a particular evil,
corruption, and in an equally misguided
attempt to encourage greater accountability
of governments to their people, will actually
succeed in encouraging the former and
have no impact on the latter, but which will,
in its implementation,
ion, at worst cause
companies to break the law of other
countries in which they operate and, at best,
break the contracts they have entered into
with those countries.
In the last 30 years, 120 claims have been
brought in the US against corporations
under this statute with the average
erage length of
case exceeding five years. It is probably the
most notorious piece of so called “extra
territorial” legislation in existence at present
and so, at the risk of boring you all, I
thought I should read to you the full text of
the statute.
Alien Tort Statute “The district courts shall
have original jurisdiction of any civil action
by an alien for a tort only, committed in
violation of the law of nations or a treaty of
the United States.”
That is it. That is all there is to it.
The view of most governments outside the
US is that itt doesn’t have extra territorial
application. That is apparent from the
quotation I just read from the UK and Dutch
governments.
The US government agrees. It says
“[American Courts] should not create a
cause of action that challenges the actions
of a foreign
gn sovereign in its own territory,
where the [sued party] is a foreign
corporation of a third country that allegedly
aided and abetted the foreign sovereign’s
conduct.”
The views of the UK, Dutch and US
governments I have read out are as
expressed in their amicus briefs in the Kiobel
case which is due to be heard by the US
Financial transparency reporting
The English barrister, F.E. Smith, who later
lat
became Lord Birkenhead, Lord Chancellor
of England and Winston Churchill’s closest
friend, was known for his incisive wit and
precision of expression. In one case, having
made lengthy submissions to a judge who
was clearly struggling with the complexities
complexiti
of the dispute he was interrupted by the
judge saying: “Mr. Smith, I have listened to
you now for an hour and I am afraid I am
none the wiser” to which Smith immediately
responded “No wiser my Lord, but much
better informed”.
There is a move afoot, coming originally out
of the US but which has now spread to
Europe, to force companies from the
extractive industries (basically oil & gas
companies, mining companies and forestry
companies) to publicise the amount of
money they pay to governments for the right
to extract natural resources from those
countries.
Why? So the people in those countries can
see how much money their government is
receiving for the resources it is allowing to
be extracted.
” There is a move
afoot, coming
originally out of the US
but which has now
spread to Europe, to
force companies from
the extractive industries
to publicise the amount
of money they pay to
governments for the
right to extract natural
resources from those
countries.”
Peter Rees: ET – Extraterritoriality – Alien or Friend
Why would people want to know? Because
B
then they can hold their governments to
account for the money received. Some even
say (and as I have already said, this is
totally misguided) it will reduce corruption.
It all sounds both laudable and innocuous
when put in this way, but, as with all legal
issues, the devil is in the detail and what is
being proposed won’t achieve either aim.
People in those countries won’t be any the
wiser as to how much money their
government is receiving and corruption
won’t be reduced – if anything it will
increase the potential for it.
Before I go on to explain why, it is time for
a commercial break. So let me spend 30
seconds telling you about Shell.
Shell’s oil and gas production is around 3
million barrels of oil equivalent per day.
Shell, with 43,000, has more
ore branded
retail sites than McDonalds has restaurants.
And if you look out of your seat window
before your next flight takes off, you might
well see a Shell truck pumping jet fuel in to
your plane – just one of the 7,000 aircraft
we refuel at over 800 airports
rports in 40
countries each day – one aircraft being
refueled every 12 seconds.
What may be less obvious is the Shell fuel
and lubricant flowing into the ships we
service in more than 500 ports around the
world or the almost 20 million tons of Shell
chemicals
als that go into products we all use
every day from detergents to packaging,
from carpets to computers.
Shell employs around 90,000 people. But
that is only our directly employed workforce.
If you add the over 400,000 people
working in Shell badged franchises
ses and
operations and the half a million or so
contractors you will find on Shell sites, you
are looking at the best part of 1 million
people working for or with Shell at any one
time.
If you add to that some financial information
like our $1.1 billion annual
nual spend on
Research and development, the $32 billion
capital expenditure planned for this year
alone and over $40 billion annual
operating expenditure you might be thinking
that all I am doing is bragging about our
size – but let me place it properly inn the
global context. For all Shell’s size, the actual
portion of the world’s oil and gas we
produce amounts to less than 3% of global
production (2.2% in 2011).
And if you add Exxon, Chevron, BP and
Total to us, the so called supermajors of the
oil and gass world account for no more than
around 11% of what the world produces on
a daily basis.
Please remember that percentage now that
the commercial break is over. So, let me
take you back to financial transparency
legislation and explain, first, why people
won’t
n’t know how much their government is
receiving. This can be done in four
sentences:
1. By definition, the only corporations
this legislation can apply to are
companies subject to US and
European jurisdiction
2. The biggest oil and gas companies
in the world are (as you now know
from the commercial break) not
subject to US and European
jurisdiction; they are the National
Nati
Oil Companies and quasi national
oil companies from Russia, China,
Asia Pacific, South America and
the Middle East.
3. These companies no longer
operate in their own back yard, but
they are not caught by this
legislation and there will be no
disclosure off what governments are
receiving from them for extractive
rights.
4. So, the amount a government
receives will not be revealed by this
legislation – in fact, in many cases,
just a fraction, just the tip of the
iceberg, with the consequence that
the less well informed in a country
” …you are looking at
the best part of 1
million people working
for or with Shell at any
one time.”
Peter Rees: ET – Extraterritoriality – Alien or Friend
will be misled as to how much their
government receives and the better
informed will be just that – better
informed, but none the wiser.
Will it reduce corruption? No. This time in
three sentences:
1. The legislation requires you to
disclose
isclose how much you paid to the
government.
2. The last time I looked, paying
money to a government is not
considered corrupt under any of the
applicable legislation – certainly
not the Foreign Corrupt Practices
Act or the UK Bribery Act.
3. It is corruption to
o bribe a
government official to get a
contract; it is not corruption to pay
a government (even over the odds)
to get a contract; that’s what
governments do – sell their mineral
rights to the highest bidder.
What it will do, however, is cause massive
competitive
titive harm to those companies which
are subject to the legislation plus create the
potential for increasing corruption on the
way. Let me put it this way.
You are from a country not caught by the
legislation, so you and the government
official that you are
e talking to about a
concession to extract minerals, both know
the following:
1. You know what the competition are
likely to bid (because they have
had to publish what they bid for
previous, similar, concessions);
2. You know that what you pay will
never have to be revealed
3. You know that neither you, nor the
government official, is caught by
the US or European anti-corruption
corruption
legislation
I leave you to draw your own conclusions
on the impact on competitiveness of US and
European corporations as well as on
corruption.
Now, let me be clear, this is a law lecture
and I am talking from the
he perspective of
someone analysing
ing the application of
legislation generally. Lest there be any doubt
I do want to reassure you that Shell is not
against financial transparency reporting
reporti –
quite the contrary. Earlier this year we
published the total amounts we paid
d to most
governments in 2011. We did this in
advance of any mandatory requirements
coming into effect in order to demonstrate
our commitment to disclosure of revenues
paid to governments. We believe it is
important that companies like ours are open
regarding how much we pay to
governments and we also believe
governments should be encouraged to be
open about what they receive and how they
spend it.
I said earlier the principle is laudable.
People should know what their governments
receive for rights to extract natural resources.
But they should get the full picture, and the
only entity in the position to provide people
with the full picture is the government.
Of course, when it comes to legislation
against corporations, governments are first
fi
in the queue – but when it comes to being
accountable themselves, it seems it is a
different story. They are much less
enthusiastic to disclose the full amount they
receive in revenues from oil and gas.
Although there are some governments who
do, like Nigeria and Norway, it is
interesting that the proponents of this
legislation, the US, and those seeking to
copy it, the Member States of the European
Union do not. As I say, interesting.
Nigeria and Norway are Compliant
Members of the EITI –the Extractive
ve Industries
Transparency Initiative - which encourages
governments to disclose and verify all
amounts they receive from all entities that
extract their natural resources. Shell is a
founder and board member of the EITI and
firmly believes that the EITI’s multi-stakeholder
stakeholder
approach (which includes governments,
NGOs, regulators, the public and
companies) remains the most effective way
” …when it comes to
legislation against
corporations,
governments are first in
the queue - but when it
comes to being
accountable
themselves, it seems it
is a different story.”
Peter Rees: ET – Extraterritoriality – Alien or Friend
of providing transparency regarding
government revenues for resource
dependent countries.
This way, the people of those countries
coun
get
the full picture and not a distorted or partial
one. They will be both better informed and
wiser.
But that does not seem to be direction in
which we are heading. Instead, we have
governments which are not willing to tell the
public what they receive
ive in oil and gas
revenues pushing through legislation which
forces US and European companies to
disclose what they are paying, not just in
total to governments around the world, but
for each individual project. All this in the
name of transparency (which it won’t
achieve) and prevention of corruption
(which it won’t achieve and may
encourage).
But where is the legal problem? Legislation
is legislation and whether you like it or not,
you have to comply.
Well, I have talked about governments not
being willing
ng to publish what revenues they
receive, but there are many which go
further. They either require you to enter into
contractual confidentiality agreements so
you won’t disclose what you are paying
them, or they even make it a criminal
offence to do so.
Therefore,
herefore, to comply with the legislation the
US is bringing in, and the EU is proposing,
means that companies have to disclose
information which they are either
contractually or criminally forbidden to do.
To be legal in one country they have to be
illegal in another.
Where extra territorial legislation is needed
I mentioned at the start, the ambivalent view
we have of extra terrestrials. Some of them
are good, but the majority
jority are evil and bent
on our destruction. And you may well be
thinking that I have only one view of
extraterritorial legislation – it is evil and bent
on our destruction. So let me hasten to
reassure you that is not the case. Quite the
reverse, in fact. Extra territorial legislation
can be a real force for good, but it has to
be directed in the right way and targeted at
the real extra territorial problems the world
faces today.
I am going to look at a couple of examples
where extra territorial legislationn is urgently
needed but first, by way of introduction, let
me take you back to another TV programme
that focused on extra terrestrials – Star Trek.
I am sure most of us can clearly remember
the opening lines of every episode – “Space
– the final frontier. These are the voyages of
the Starship Enterprise, to boldly go…. and
split infinitives….. where no man has gone
before.”
But so far as the law is concerned, there is
no need to go extra terrestrial to deal with
final frontiers, there are two frontiers that
need dealing with here on earth, that are
really crying out for extra territorial
legislation. Extra territorial in a real sense –
beyond the territory of any sovereign nation.
The first of those frontiers has been around
for a long time but now has a problem that
we all thought had gone away without the
need for extraterritorial
raterritorial law. That problem
has, however, come back with a
vengeance and urgently needs a legal
solution. The frontier in question is the high
seas and the problem is piracy.
It is not as if this hadn’t been thought about
and debated with the legislators.
Nevertheless, the US legislation says you
must publicise and it is not a defence that to
do so would be illegal in another country.
Piracy
What happened to not creating a cause of
action that challenges the actions of a
foreign sovereign in its own territory?
“By the 18th century, pirates knew exactly
where they stood in relation to the law. A
legal dictionary of the day spelled it out: "A
In an article in 2008 in the Wall Street
Journal entitled “Why don’t we hang Pirates
anymore” the columnist said:
” Extra territorial
legislation can be a
real force for good, but
it has to be directed in
the right way and
targeted at the real
extra territorial
problems the world
faces today.”
Peter Rees: ET – Extraterritoriality – Alien or Friend
piracy attempted on the Ocean, if the
Pirates are overcome, the Takers may
immediately inflict a Punishment by hanging
them up at the Main-yard
yard End; though this is
understood where no legal judgment may
be obtained."
The article continued:
“Severe as the penalty may now seem
(albeit necessary, since captured pirates
were too dangerous to keep aboard on
lengthy sea voyages), it succeeded in mostly
eliminating piracy by the
e late 19th century -a civilisational
ational achievement no less great
than the elimination of smallpox a century
later.”
Of course, we don’t hang pirates any more
– and I hasten to add I am not advocating
that we should. But the fact of the matter is,
today, no one really has a clue what to do
with them.
There is no international body empowered
to try pirates and imprison them and nobody
wants to take pirates captive
ve and take them
back home because you cannot try them
unless the vessel subject to the pirate attack
was under the flag of your nation . Not
surprisingly trying pirates is not the sort of
growth industry that flag countries like
Panama, Bermuda and the Marshall
rshall Islands
are wanting to rush into.
Jurisdiction is the issue and the problem
with piracy is that, by definition, it has to
happen on the high seas (in other words
outside any state’s jurisdiction) and if you
can’t hang them, you can’t imprison them
the
and you can’t take them back to shore you
have a real problem. Not just a practical
problem but a legal one.
But why should I, as Legal Director of an
energy company, be concerned about this?
Oil, oil products, petro-chemicals
chemicals and LNG
are shipped around the world and with
Africa sitting between Europe and the
Middle East and Asia there is very little
choice but to go either through the Suez
canal, down the Red Sea and out into the
Indian Ocean or down the west coast of
Africa. In 2010 and 2011 there were
roughly 15 pirate attacks each month on
vessels in the Indian Ocean, or on transit
tran
there, of which about one-fifth were
successful. Attacks off the coast
st of West
Africa ran at about seven per month in those
two years.
What can we do to resolve the problem?
problem
You are probably familiar with the old story
of the two men walking down a trail in the
woods who meet a bear. One looks to the
other and says “What should we do?” To
which the other responds “Run!”. “Don’t be
ridiculous,” says his companion, “We can’t
run
un faster than a bear”. To which his
companion replies as he sets off at full pace
back down the trail “No, but I can run faster
than you”.
That is a bit like it is with pirates. The slow
oil tankers and LNG vessels cannot run
faster than the pirates, so they have to make
themselves harder to attack than the next
boat. That was all well and good when all
that involved was higher seaboards, putting
razor wire round the boat or having water
cannon, but when some of the vessels
starting carrying armed soldierss or guards
then a whole different set of legal
considerations come into play.
What legal considerations apply to arming
vessels? What is the attitude of the nations
under whose flag these vessels sail? What
liabilities will they incur if a fatality occurs
during a pirate attack? What is the attitude
of the vessels’ insurers? Are the insurance
urance
provisions violated? Will it mean they can
deny insurance claims?
What will the attitude be of the countries of
which the armed guards are citizens if they
are killed or if they kill or injure someone?
And what if that someone isn’t a pirate but
an innocent bystander such as a crew
member caught in cross-fire
fire or a passing
fisherman?
To what extent can getting consent from the
flag country and insurers give you some
” In 2010 and 2011
there were roughly 15
pirate attacks each
month on vessels in the
Indian Ocean, or on
transit there, of which
about one-fifth were
successful.”
Peter Rees: ET – Extraterritoriality – Alien or Friend
protection? To what extent can drawing up
detailed rules of engagement for armed
guardss provide safeguards if there are
subsequent injuries or fatalities?
Where can criminal charges be brought?
Which countries will have jurisdiction over
civil claims?
I have just asked a dozen legal questions
there, to which there are no definitive
answers.
Given these, and the many other
imponderables involved, what advice would
you give when the question arises: others
are arming their ships what should we do?
How do we fulfill any duty of care we may
have to the crews of our vessels? Are we in
breach if we
e don’t arm; do we put them in
more danger if we do?
These are no longer hypothetical questions.
These are real, global legal issues. By way
of illustration, let me mention four incidents
that have taken place this year.
In the first, two Indian fisherman were killed
by Italian navy personnel on duty on an
Italian flagged oil tanker as the vessel was
sailing along the Indian coast. It appears
they mistook them for pirates and shot them
dead.
India arrested the two Italian marines . In
response, Italy accused
d India of breaching
its territorial jurisdiction by arresting the
marines in international waters.
On 24 April Italy announced that it had
paid $380,000 to the families of two
Indian fishermen and that this was a gesture
of goodwill and not an admission of
o
responsibility for the deaths. In response,
the relatives of the dead fishermen have
agreed to withdraw their cases against the
marines, but the Indian state involved has
not dropped its own charges against the
two men and they are still awaiting
prosecution in India.
The second incident involves the Danes,
once known as a marauding, pillaging and
piratical nation themselves.
It seems these days, however, the Danes are
taking the fight to the pirates. Again,
however the myriad complications I have
already
dy outlined are raising serious legal
issues.
In February, Danish Naval Forces opened
fire on a suspected pirate ship when it
refused to stop. Two hostages being held by
the pirates were killed. It appears they were
killed by the pirates, but would they have
been killed if the Danes had not attacked?
The consequences
nces that will flow from this
incident remain to be seen.
The same Danish warship, the Absalon,
stopped another pirate ship in early April.
No one was killed or injured but the report
on the incident from Reuters said:
“…the
the suspected pirates will remain held
aboard the Absalon until Denmark
determines if it can hand the pirates over to
a country in the region for prosecution.”
The report continued to highlight some of the
issues I have already mentioned:
“Although anti-piracy
piracy operations have
succeeded in reducing the numbers of
vessels and hostages taken in the past few
years, efforts to stamp out piracy are
hampered by the unwillingness of many
countries to prosecute captured pirates in
their courts.
The problem of finding courts to try pirates
stems partly from a lack of a functioning
judicial system and prisons in Somalia, but
also reluctance by other countries to receive
captured pirates.
Most European countries, including
Denmark, have been unwilling to bring
suspects from east Africa to their jails and
courts, which means navies engaged in antianti
piracy missions often must release captured
pirates without prosecution.”
” These are no longer
hypothetical questions.
These are real, global
legal issues. ”
Peter Rees: ET – Extraterritoriality – Alien or Friend
The problem is not going away or getting
any easier. On 4 August 2012 an oil
services vessel was attacked 60km off the
coast of Nigeria, two Nigerian naval
personnel were killed and four crew
members (of Malaysian, Iranian, Thai and
Indonesian nationality)
lity) were abducted.
Jurisdictional issues multiplied by four.
At the last count, as a result of piracy in the
Indian Ocean and the Gulf of Guinea there
were 11 vessels and 206 hostages being
held with average crew ransoms running at
$5.4 million with a maximum
ximum reached this
year of $13 million.
Hanging pirates eliminated them last time
round but shooting them is not the solution
this time. We desperately need some
effective, enforceable, extra territorial
legislation.
My second and final example of where we
desperately need extra territorial legislation
is one where there is a proliferation of
domestic national legislation but the problem
with nations is that we are all different.
There is no uniformity of approach.
Cybercrime
Financial Times – 31 August 2012
12 “Qatar’s RasGas, one of the world’s largest
producers of natural gas, has become the
second major state-owned
owned Middle East
energy company to be hit by a severe
computer virus in weeks.
The disruption came after Saudi Aramco,
the government-backed company
any that is the
world’s largest crude oil producer, was also
attacked by a computer virus.
Saudi Aramco said in a statement on
Sunday that it has restored its “main internal
network services” after the attack on August
15. But oil traders in Houston, Geneva
Gene and
London on Thursday said they were
communicating with Aramco’s counterpart
by fax and telex, as the company’s external
email services were still down.
“It’s like going back 20 years in time,” a
trader said about the use of the telex.
Aramco on Thursday
ay said it had “restricted”
access to some external systems as a
precaution, and referred to its previous
statement issued on Sunday.
The rare pair of attacks has caused
concerns among energy traders and
Western diplomats, as they are the first
known cyberr assaults targeting Middle East
companies that are key to the world’s oil
and natural gas supplies.
Cyber attacks have grown in prevalence in
the Middle East, particularly during the last
18 months of political unrest in the region.
Iran has accused the US
S and Israel of
attacking its atomic programme with two
sophisticated viruses, dubbed Stuxnet and
Flame, that infected computers at several
nuclear plants. Tehran earlier this year also
said the computers of its national oil
company had been attacked.”
These
se attacks are manifestations of what has
been termed cybercrime.
There is no precise definition of cybercrime
but, fundamentally it encompasses illegal
activities utilising the internet.
Though cybercrime encompasses a broad
range of illegal activities, it can be generally
divided into five categories:
Intrusive Offences,, which include hacking,
data espionage and data interference;
Content-related offences, including
pornography, propaganda for things such
as racism and spam;
Copyright and trademark-related
related offences
such as piracy of software, music or movies;
Computer-related offences which include
identity theft and credit card fraud; and sosocalled
” Cyber attacks have
grown in prevalence in
the Middle East,
particularly during the
last 18 months of
political unrest in the
region.”
Peter Rees: ET – Extraterritoriality – Alien or Friend
Combination offences encompassing such
things as cyberterrorism and
cyberlaundering.
So, with so much crime going on in this
other extra territorial area, cyberspace, you
would think that the powers that be in this
world would do something about it. The fact
of the matter, however, is that whilst there
are some very strong national laws, there is
nothing joined up, which means
enforcement, in particular is a real issue.
Let me mention just one example to make
the point. It involves two individuals, Reomel
Ramores and Onel de Guzman. They wrote
a computer virus called the ILOVEYOU bug.
There was nothing loving about
out this virus as
it caused an estimated $5.5 billion worth of
damage causing even the Pentagon and the
CIA to close down their computers to
exterminate the bug. However, although
Ramores and de Guzman were arrested in
the Philippines they had to be released
releas as
there
re was no legislation criminalising
criminalis
the
writing of malware in the Philippines.
As you can see, some countries take this
more seriously than others, but even in
countries which do take cybercrime
seriously, resources can be a real issue.
Time to bring
ring in the United Nations or some
other multi-government
government organisation, I hear
you cry – and you would be right. But the
problem is that whilst many intergovernmental organisations are aware of
the issue, the focus seems to be on talk
rather than action.
The UN Congress on Crime Prevention and
Criminal Justice in April 2010, in what has
been described as an important
breakthrough, Member States agreed to
explore ways of universal regulation to
counter cyber-crime.
crime. A UN Resolution was
adopted. What did it propose by way of
action?
It made a proposal to establish “an openopen
ended intergovernmental expert group to
conduct a comprehensive study of the
problem of cybercrime and responses to it
by the Member States, the international
community and the private sector,
tor, including
the exchange of information on national
legislation, best practices, technical
assistance and international cooperation,
with the view to examining options to
strengthen existing and to propose new
national and international legal or other
responses to cybercrime.”
Talk not action.
And what did another multi-partite
partite body, the
Organisation of American Sates do in
recognition of this resolution? Well, in
February 2012 they called upon the
member states to respond to the
questionnaire that will be distributed by the
open-ended
ended intergovernmental expert group
on cybercrime, convened pursuant to United
Nations General Assembly resolution.
Two years after the UN Resolution and we
are still talking about filling in
questionnaires.
You may surprised to hear that there does
actually exist a European Convention on
Cybercrime which was co-drafted
drafted in 2001
by the Council of Europe together with the
US, Canada and Japan. However,
ever,
although it was signed by all 46 member
states there are still a significant number of
countries which have not ratified it – and the
UK is one of them.
We really do need action and not just
words and questionnaires.
As Kofi Annan said “in the prospect
ct of an
international criminal court lies the promise
of universal justice”, but without an
international court or tribunal properly
empowered to deal with cybercrime the
problems and the criminals will simply
proliferate.
” We really do need
action and not just
words and
questionnaires.”
Peter Rees: ET – Extraterritoriality – Alien or Friend
Conclusion
It is these real and urgent extra territorial
problems that should be the focus of
government legislation and which could
enable governments to be a real force for
good, rather than focusing on ineffective
legislation such as the financial transparency
legislation which
ch meets short term political
aims but not the long term interests of
people in resource rich states. Real global
leadership is needed in the area of extra
territoriality, leadership with a view to
creating structures to enforce the rule of law
for generations
ions to come rather than with a
view to winning the next election.
I said at the beginning that to legislate
effectively you need the ability to enforce
and in conclusion I would add that you
should be able to enforce without infringing
the sovereign rightss of other nations to
control what happens within their
jurisdictions and with their people.
Careful thought has to be given to the
impact of any form of legislation which has
extra territorial effect.
As I also said at the start, like extra
terrestrials,, there is equivocation as to
whether extra territorial legislation is a force
for good or evil. Whether these are powers
that can be used for overall benefit or
whether they will always lead to harm.
There are clearly extra territorial areas, true
extra territorial areas, (piracy and
cybercrime are but two) where much good
could be done by governments cooperating
to produce effective means of enforcing,
extra territorially, the rule of law. In such
cases extra territorial legislation can be the
force for good.
ET – extra territorial legislation - can be the
friend rather than the alien. But If we are not
careful we can end up passing legislation
which is not a force for good – which is
alien rather than friend - and the problem is,
it may take us rather a long time to realise
realis
the real effects of some of this
is legislation –
to realise
e it is alien. And as someone
memorably said:
“If you can see the aliens in the UFO, it's
already too late.”
Peter Rees: ET – Extraterritoriality – Alien or Friend
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