The illegal invasion of Ukraine by Russian forces, and the mounting evidence of international humanitarian and international criminal law violations, including direct attacks on civilian populations and the indiscriminate use of prohibited munitions on residential areas, should raise urgent questions for businesses with vested interests in Russia.
Reliable sources, including Amnesty International, report evidence of Russia’s indiscriminate strikes on civilian infrastructure, including residential buildings, medical institutions, schools and kindergartens, likely to constitute war crimes. Open-source intelligence organisations, including Bellingcat, have also found evidence of Russia’s use of cluster bombs in civilian areas – weapons that indiscriminately scatters small bombs over a wide area – that constitutes an obvious danger to the civilian population.
The severity of these crimes was reflected in the announcement on Monday from the International Criminal Court (ICC) prosecutor, Karim Khan QC, that following a review of the Prosecutor’s Office conclusions on the preliminary examination of the Situation in Ukraine in 2020, there is a reasonable basis to believe that ‘both alleged war crimes and crimes against humanity have been committed in Ukraine’. The Prosecutor announced that an investigation would be opened as ‘rapidly as possible’, once authorisation was obtained from the Pre-Trial Chamber. This process has now been fast-tracked following the referral of the conflict in Ukraine to the ICC by 39 countries, allowing the Prosecutor to open without authorisation ‘an investigation into the Situation in Ukraine from 21 November 2013 onwards’. The investigation will encompass ‘within its scope any past and present allegations of war crimes, crimes against humanity or genocide committed on any part of the territory of Ukraine by any person.’
In coordination with the international response, sanctions have been placed on key Russian businesses, industries and business men (oligarchs), including the closure of airspace to Russian flights, the banning of transactions from the Russian Central bank, the suspension of the licences of Russian state-controlled television networks Russia Today (RT) and Sputnik and all their subsidiaries, and the freezing of key oligarchs’ assets, to name but a few. As a measure of the scale of these sanctions, it is the largest sanctions package in EU history, seeking to undermine Russia’s economy in order to curtail the invasion of Ukraine.
What should businesses with vested interests in Russia do?
In line with the rapidly evolving humanitarian crisis, and in consideration of the gross human rights violations that are being reported from Ukraine, businesses should consider their tacit or implicit involvement in the ongoing violations. In accordance with the UN Guiding Principles on Business and Human Rights (UNGPs), businesses have an ongoing obligation to undertake due diligence that identifies and assesses whether they are causing, contributing or linked to human rights violations, either through their own activities or as a result of their business relationships. This is particularly critical in light of questions of complicity that can arise when a business contributes to, or is seen as contributing to, war crimes or crimes against humanity committed by other parties. Due to the coordinated economic sanctions regime, any business that continues to facilitate Putin’s “war chest” will also likely be considered to be contributing to the ongoing violations in Ukraine or otherwise supporting the conflict and the ever-growing litany of crimes. These issues will be particularly clear cut in the case of businesses that are engaged in joint-ventures with the Russian government and will likely be closer to the violations and more easily regarded as (directly or indirectly) financing Putin’s unlawful use of force.
Once businesses have identified that they are causing, contributing to, or are linked to, the gross human rights violations in Ukraine, they should seek to urgently mitigate and remediate their involvement. Where a business has leverage to prevent or mitigate the human rights impacts, it should exercise it. Whilst the appropriate response must be decided on the facts of each case, those businesses that are materially contributing to the Russian economy or are directly connected to the Russian government through joint-ventures, will have considerably more influence and therefore leverage. This should be exercised in all cases by urging Russian businesses to put pressure on the Kremlin to halt its unlawful invasion and the associated international crimes, including war crimes. Where businesses do not have leverage, or where the only leverage is disengagement, discontinuing business in Russia or with Russian businesses will be the only option.
As made clear by the UN Guiding Principles on Business and Human Rights, whilst disengagement or divestment is generally regarded as a last resort, it is the correct course of action when the harm is too severe. Factors that determine whether the harm is “too severe” include evidence of war crimes or other serious violations of international humanitarian law, crimes against humanity, the crime of aggression, genocide and/or direct or indirect support to non-state armed groups. The ICC prosecutor’s decision to investigate war crimes and crimes against humanity, and the request by 39 states for an inquiry into war crimes and crimes against humanity committed in Ukraine, underscores the severity of the harm, the risk of contributing to it and the need for businesses to disengage, not only on the basis of sanctions, but in accordance with these internationally recognised human rights principles.
Many of the big players in the oil and gas sector have already taken this decision, with British Petroleum (BP), Shell and Norway’s Equinor announcing their exit from Russian interests this week. BP Chairman Helge Lund acknowledged that the military action `represents a fundamental change’ that made involvement with Rosneft, a Russian-owned enterprise untenable. Whilst this may well be a decision based upon economic realities, it also reflects a growing recognition that joint-ventures with Russia or Russian companies, situates foreign companies smack-bang in the middle of an array of international humanitarian law violations that cannot be avoided or mitigated.
Accordingly, as governments continue to apply pressure on Putin’s government to cease the military attack that violates the United Nations Charter on the prohibition of the use of unlawful force and an array of fundamental international humanitarian law, businesses are faced with the decision to disengage and leave or to stay and find themselves causing, contributing or being linked to these violations. Upon assessment of the above factors, for most foreign businesses in Russia, the risks will be too high, and best practice will demand a prompt termination of their operations and a responsible exit. Of course this is not only about a firm demonstration of the businesses commitment to ensuring respect for international humanitarian law, international criminal law and sanctions regimes. As the suffering and death toll grows in this criminal misadventure, businesses will also reduce their exposure to legal and reputational risk, ensuring that, when the dust settles, they have remained on the right side of history.