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THE ROLE OF DUE DILIGENCE IN INTERNATIONAL LAW

Published online by Cambridge University Press:  16 October 2019

Neil McDonald
Neil McDonald*
Affiliation:
Assistant Legal Adviser, Foreign and Commonwealth Office
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Abstract

This article makes two main propositions about the role of due diligence in international law, in response to recent interest in the topic. First, a legal requirement to exercise due diligence may be a component part of a primary rule of international law, but this can only be determined by referring back to the primary rule in question (eg what degree of fact-finding does treaty provision X require a State party to that treaty to undertake, either explicitly or implicitly, to act consistently with its terms?). In other words, there is no ‘general principle of due diligence’ in international law. Second, States undertake what could be characterised as ‘due diligence’ activity (eg by introducing policy guidance for their officials), some elements of which may be a result of a legal requirement and some of which may not (eg where done solely for policy reasons). Current practice of the United Kingdom and United States is used to illustrate the point. The lack of a distinction between the ‘legal’ and ‘non-legal’ elements of conduct in a given area gives States the flexibility to act without feeling unduly constrained by international law, and at the same time actually promotes compliance with international law and may assist in its development over time. In contrast, pushing for a ‘general principle of due diligence’ in international law is unnecessary, and risks having a chilling effect on this positive legal/policy ‘due diligence’ behaviour by States.

Keywords

public international lawdue diligenceInternational Court of JusticeState practicepolicy
Type
Shorter Articles
Information
International & Comparative Law Quarterly , Volume 68 , Issue 4 , October 2019 , pp. 1041 - 1054
Copyright
Copyright © The Author (2019). Published by Cambridge University Press for the British Institute of International and Comparative Law 

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Footnotes

This article was written in a purely personal capacity and should not be taken as an expression of official government policy. The writing of this article has not been subsidised by any public or private source. The author would like to thank Dr Elaine Gorasia and Iain Macleod for helpful comments on an earlier draft. Any errors or omissions are the author's own.

References

1 In terms of dictionary definitions, the Collins Dictionary defines due diligence as:

  1. 1.

    1. the degree of care that is to be reasonably expected or that is legally required, esp. of persons giving professional advice

  2. 2.

    2. an assessing, evaluating, etc. conducted with prudent or necessary care.

The Merriam Webster Dictionary defines due diligence as:

  1. 1.

    1. law: the care that a reasonable person exercises to avoid harm to other persons or their property;

  2. 2.

    2. business: research and analysis of a company or organization done in preparation for a business transaction (such as a corporate merger or purchase of securities).

These two senses of the expression have been examined and referred to as different ‘concepts of due diligence’ elsewhere in recent legal scholarship: Bonnitcha, J and McCorquodale, R, ‘The Concept of “Due Diligence” in the UN Guiding Principles on Business and Human Rights’ (2017) 28(3) EJIL 899Google Scholar.

2 In domestic law, the exercise of ‘due diligence’ by an individual or corporation may be a standard of conduct to defend an allegation of negligence in tort, or as a statutory defence, eg to allegations of money laundering. In the non-legal or commercial context, conducting ‘due diligence’ refers to investigation done on a company or proposed transaction prior to executing the deal. To take the example of English law, Stroud's Judicial Dictionary (Sweet & Maxwell 2006) lists 13 examples of the expression ‘due diligence’ being used in English case law and legislation.

3 In the sense of ‘doing due diligence’ on a company before a merger or acquisition is concluded.

4 ILA Study Group on Due Diligence in International Law, Second Report (July 2016) 1, available at: <http://www.ila-hq.org/index.php/study-groups?study-groupsID=63>.

5 Resolution available at <http://www.ila-hq.org/en/committees/study_groups.cfm/cid/1045>.

6 At the time of writing the Max Planck Institute for Comparative Public Law and International Law has also commissioned a study project which aims to determine ‘whether a common understanding of due diligence throughout the different areas of international law and possibly across different types of legal persons (states, IOs, other) can be traced and, if so, whether this warrants qualifying due diligence as an overarching principle of international law’. More background available at <http://www.mpil.de/en/pub/research/areas/public-international-law/due-diligence-in-international.cfm>.

7 ILA Study Group Second Report, at 47, 12 and 28 respectively.

8 Comment of N French, in ILA Working Session report (August 2016) 6, available at <http://www.ila-hq.org/index.php/study-groups>.

9 Barnidge, R Jr, Non-State Actors and Terrorism: Applying the Law of State Responsibility and the Due Diligence Principle (TMC Asser 2008) 69Google Scholar.

10 Schmitt, M, ‘In Defense of Due Diligence in Cyberspace’ (2015) 125 YaleLJ Forum 68Google Scholar <https://www.yalelawjournal.org/forum/in-defense-of-due-diligence-in-cyberspace>.

11 Pisillo-Mazzeschi, R, ‘The Due Diligence Rule and the Nature of the International Responsibility of States’ (1992) 35 GermanYBIntlL 9Google Scholar. See also generally Kulesza, J, Due Diligence in International Law (Brill 2016)CrossRefGoogle Scholar.

12 In the context of States being ‘conflicted’ over whether to commit to specific due diligence obligations in the context of cyber, thus hampering their own action as well as that of other actors, or to avoid such regulation and maintain freedom to act but leave their own systems at risk. Schmitt, ibid.

13 Where a State is required to act with due diligence by a rule, the outcome which is sought to be avoided through the rule will often essentially be negligent conduct by the State, although the concept of negligence is not as well established in international law as it is in domestic tort law. ‘Due diligence’ is also used as a term to describe a general category of obligation in international law, ie ‘obligations of due diligence’. Other categories of obligation include obligations of ‘conduct’ or ‘result’ (a civil law distinction not known in common law countries), and obligations of prevention (which would likely include an element of due diligence but additionally require the event in question to have actually occurred). A single treaty provision or other primary rule could conceivably contain obligations of conduct, due diligence, result and prevention. Reference to this taxonomy of obligations was dropped from the ILC Articles on State Responsibility during the drafting process, as it was agreed to be unnecessary and risked causing confusion, including because they are most relevant in describing the nature of primary rules rather than the law of State responsibility. See Crawford, J, State Responsibility: The General Part (Cambridge University Press, 2013) 219–32Google Scholar.

14 Although other courts and tribunals have touched upon the issue, the ICJ is chosen for this short article as an authoritative source of interpretation with general international law jurisdiction.

15 Corfu Channel (UK v Albania) (1949) ICJ Rep 4. Corfu Channel is alleged to articulate ‘the core content of the due diligence principle’ (see ILA Study Group, Second Report, at 5. The Lotus case before the ICJ's predecessor court the PCIJ was also cited by the ILA Study Group as a source giving expression to the so-called obligation of due diligence in international law (see ILA Study Group, First Report (March 2014) 2, available at <http://www.ila-hq.org/index.php/study-groups>). While that case does make reference to due diligence (in the Dissenting Opinion of Justice Moore), it is referred to as an aspect of the exercise of sovereignty and jurisdiction ie as a corollary of existing principles of international law. The principle of exclusive jurisdiction of a State within its own territory ‘is attended with a corresponding responsibility for what takes place within the national territory’. A requirement that a State act with due diligence is in the context of the Lotus case a reflection of the principle of State sovereignty, and the rules which derive from it. Case concerning SS Lotus (France v Turkey) 1927 PCIJ (Ser A) No. 10, Dissenting Opinion of Justice Moore, 68. Michael Schmitt notes that due diligence ‘derives from the principle of sovereignty’, but still considers it a principle in its own right. Schmitt, ibid.

16 ibid 22.

17 Heathcote, S, ‘State Omissions and Due Diligence: Aspects of Fault, Damage and Contribution to Injury in the Law of State Responsibility’ in Bannelier, K, Christakis, T and Heathcote, S (eds), The ICJ and the Evolution of International Law: The Enduring Impact of the Corfu Channel Case (Routledge, 2012)Google Scholar.

18 Pulp Mills on the River Uruguay (Argentina v Uruguay) (2010) ICJ Rep 14.

19 ibid, paras 185–187, citing its earlier judgment in Gabcikovo Nagymaros Project (Hungary v Slovakia) (1997) ICJ Rep 78, at para 140.

20 ibid, para 101.

21 ibid, para 197.

22 Armed Activities on the Territory of the Congo (DRC v Uganda) Judgment (2005) ICJ Rep 168, at para 189.

23 In terms of the Geneva Conventions, DRC alleged breaches specifically of arts 27, 32 and 53 of the fourth Geneva Convention, but did not allege a breach of art 1.

24 ibid, para 173.

25 Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosnia and Herzegovina v Serbia and Montenegro) Judgment (2007) ICJ Rep 43.

26 The Court cited the Convention against Torture and Other Cruel, Inhuman and Degrading Treatment or Punishment 1984, art 2; the Convention on the Prevention and Punishment of Crimes against Internationally Protected Persons, Including Diplomatic Agents 1973, art 4; the Convention on the Safety of United Nations and Associated Personnel 1994, art 11; and the International Convention on the Suppression of Terrorist Bombings 1997, art 15.

27 ibid, para 429.

28 ICJ case law also shows that due diligence is an expression whose meaning depends on the context of a given rule. The ILA Study Group asserts that in the Border Area/Road case the ICJ distinguished the ‘procedural and substantive’ elements of due diligence in international environmental law (see ILA Study Group, Second Report, 5). Again this is to mischaracterise the focus of the Court in that particular case. The ICJ was called upon in Border Area/Road to apply procedural and substantive rules of customary international law and treaty provisions. In terms of the Court's approach in Border Area/Road, it in each case examines the primary rule in question, determines whether the rule is applicable, and then determines what either State might have been required to do in order to discharge the obligation under the treaty, including due diligence activity. These are not ‘due diligence obligations’ as such, but rather treaty obligations whose discharge may require a State to conduct due diligence activity. Certain Activities Carried out by Nicaragua in the Border Area (Costa Rica v Nicaragua) and Construction of a Road in Costa Rica along the San Juan River (Nicaragua v Costa Rica) Joined Cases, Judgment (2015) ICJ Rep 665.

29 For example, the due diligence aspect of the exercise of sovereignty is case-specific, and control of territory alone is not necessarily enough to establish the responsibility of a State for actions occurring therein. In Nicaragua, recalling Corfu Channel, the ICJ stated that whether a State knew or should have known about occurrences on its territory must be established on a case-by-case basis. Military and Paramilitary Activities in and against Nicaragua (Nicaragua v USA) Judgment (1986) ICJ Rep 14, at paras 154–156. See also ILA Study Group, First Report, 12.

30 The Tehran Hostages case is cited by one academic as an instance of the Court looking to the so-called ‘due diligence rule’ to establish the responsibility of States. However, that case again involved the Court being concerned with the application of primary rules of treaty law. Similarly, in Military and Paramilitary Activities (another case cited in support of the existence of this so-called rule) the ICJ sought to identify the content of the customary prohibition on the threat or use of force within international law, as well as the conduct which would be required for a State to act consistently with the prohibition on the threat or use of force as contained within the UN Charter, ie the due diligence aspects were identified by reference to a primary rule. See Pisillo-Mazzeschi (n 11).

31 Crawford, J, The International Law Commission's Articles on State Responsibility: Introduction, Text and Commentaries (Cambridge University Press 2005) 13Google Scholar.

32 Such activity takes place as part of a broader category of State activity which might be characterised as compliance or risk management, where a State aims to ensure that its conduct is consistent with its policy commitments and legal obligations, and identifies and mitigates risk more generally.

33 See eg Report on the Legal and Policy Frameworks Guiding the United States’ Use of Military Force and Related National Security Operations (The White House, December 2016) 14. Available at: <https://www.justsecurity.org/wp-content/uploads/2016/12/framework.Report_Final.pdf>.

34 These are convenient examples from two States which are permanent members of the UN Security Council and which have historically contributed significantly to the development of international law. There are other examples, such as: national implementation of the non-binding UN Guiding Principles on Business and Human Rights which overlaps with States’ treaty and customary law obligations, see eg.EU report ‘Implementation of the UN Guiding Principles on Business and Human Rights’ (2017) <http:www.europarl.europa.eu> 24. For a specific example from a State outside the permanent members of the UN Security Council, see eg Kenyan National Policy and Action Plan on Human Rights (April 2014) available at <http:www.knhcr.org>.

35 ‘International Law, Legal Diplomacy, and the Counter-ISIL Campaign’, remarks to the American Society of International Law Annual Conference (1 April 2016) <http://www.state.gov/s/l/releases/remarks/255493.htm>.

36 This position was repeated in a formal White House report, the Report on the Legal and Policy Frameworks, which states at 26 that an Executive Order on the protection of civilians in military operations is ‘fundamentally consistent with the effective, efficient and decisive use of force in furtherance of U.S. national interests’.

37 ibid 20.

38 Following the change of US administration in 2017, the PPG was replaced by the Principles, Standards and Procedures (PSP) guidance. See L Hartig ‘Trump's New Drone Strike Policy: What's Any Different? Why It Matters’ Just Security (21 September 2017) <https://www.justsecurity.org/45227/trumps-drone-strike-policy-different-matters/>.

39 The test was reportedly still used by the Trump administration under the PSP. See Hartig ibid.

40 See eg Protocol Additional to the Geneva Conventions of 12 August 1949, and Relating to the Protection of Victims of International Armed Conflicts (Protocol I) of 8 June 1977, art 57.

41 ibid, art 51(5)(b).

42 See for example: Executive Order 13732 on US Policy on Pre- and Post-Strike Measures to Address Civilian Casualties in US Operations Involving the Use of Force; the PPG also applied more restrictive measures than required under IHL in relation to capture operations, where it required that a capture operation was not feasible before proceeding (so-called ‘least restrictive means’).

43 Koh, H, The Trump Administration and International Law (Oxford University Press 2019) 98Google Scholar.

44 Other examples of UK practice which could equally be said to consist of due diligence conducted partially out a sense of legal obligation, partially through policy choice, include implementation of the UN Guiding Principles on Business and Human Rights (‘Good Business: Implementing the UN Guiding Principles on Business and Human Rights: Updated May 2016’ available at: <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/522805/Good_Business_Implementing_the_UN_Guiding_Principles_on_Business_and_Human_Rights_updated_May_2016.pdf>).

45 See eg the UK Building Overseas Strategy, at 9.14: ‘Providing assistance for the security sector in fragile states means working with countries and institutions where we have concerns about their respect for human rights and democracy. In conducting this work, it is vital that we engage with the security and justice sector in ways which promote rather than undermine human rights, and that we take steps to mitigate any potential risks to human rights.’

46 In terms of specificity, the guidance does not refer to individual treaties or rules, but states that ‘the types of human rights and IHL risks that should be considered are: use of the death penalty; unlawful or arbitrary arrest or detention; torture or cruel, inhuman or degrading treatment (CIDT) (including standards of detention); unlawful killing and/or unlawful use of force (e.g. disproportionate, indiscriminate); enforced disappearance; unfair trial or denial of justice; unlawful interference with democratic rights (e.g. freedom of assembly or expression); violations of the rights of the child including ensuring that soldiers under the age of 18 take no direct part in hostilities; refoulement (forced return where there is a danger of torture, CIDT, or flagrant denial of another right); human trafficking and/or sexual violence; persecution of an identifiable group (eg on racial or ethnic grounds) in combination with any of the above violations’.

47 Crawford (n 31) 149. See also H Moynihan, ‘Aiding and Assisting: Challenges in Armed Conflict and Counterterrorism’ (Chatham House November 2016) at para 21. Moynihan also notes, at paras 48–49, that to the extent that due diligence obligations exist they would be more properly characterised as part of individual primary rules of international law rather than the rules of State responsibility.

48 R (Nour) v Secretary of State for Defence [2015] EWHC 2695 (Admin).

49 ibid, para 18.

50 Another example is the UK Consolidated Guidance to Intelligence Officers and Service Personnel on the Detention and Interviewing of Detainees Overseas, and on the Passing and Receipt of Intelligence Relating to Detainees (2010, available at <http:www.gov.uk>). The Consolidated Guidance ‘sets out the principles, consistent with UK domestic law and international law obligations, which govern the interviewing of detainees overseas and the passing and receipt of intelligence relating to detainees’. The Guidance adds that ‘Personnel whose actions are consistent with this guidance have good reason to be confident that they will not risk personal liability in the future.’ Again the due diligence carried out (introducing and applying the guidance) ensures that (in the view of the UK) the State acts consistently with its obligations, but conducting due diligence is not an explicit part of the obligation. See also ‘Good Business: Implementing the UN Guiding Principles on Business and Human Rights’ (May 2016, available at <http:www.gov.uk>). The UK has produced a National Action Plan to implement the (non-binding) UN Guiding Principles (due diligence as a policy choice), within which it notes a range of the UK's international human rights law obligations; domestic law implementing these obligations (due diligence as a legal obligation); and domestic policy initiatives within the NAP which may or may not be to ensure UK adherence to international law obligations (due diligence as policy choice and/or legal obligation). Para 11 of the NAP is an example of this in action, stating that ‘there is no general requirement for States to regulate the extraterritorial activities of business enterprises domiciled within their jurisdictions, although there are limited exceptions to this, for instance under treaty regimes. The UK may also choose as a matter of policy in certain instances to regulate the overseas conduct of British businesses.’

51 In Pulp Mills the exercise of due diligence by carrying out environmental impact assessments was held by the ICJ to ‘have gained so much acceptance among States that it may now be considered a requirement under general international law’. Pulp Mills, ibid, para 204.

52 ILA Study Group, Second Report, 1.

53 ibid, 33, 39. Examples include the US Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) section 1502, which imposes disclosure requirements on companies to address the risk of trade in conflict minerals.

54 For example, the general prohibition of the use of force is being tested by various instances of the use of force by States in Syria without offering a justification in international law.