WASHINGTON -
Lawsuits based on a 200-year-old US law appear to have
persuaded oil company Unocal to compensate alleged
victims of human-rights abuses committed by Myanmar
soldiers during the building of an oil pipeline. The
tentative settlement was reached in two lawsuits brought
by unnamed Myanmar plaintiffs against the California oil
giant for serious rights abuses inflicted against them
and their communities by the soldiers.
The precise
terms of the settlement, which was announced in a
joint statement by Unocal and EarthRights International
(ERI) - the plaintiffs' representatives - were
not divulged. "Although the terms are confidential,"
the statement said, "the settlement in principle
will compensate plaintiffs and provide funds enabling
plaintiffs and their representatives to develop programs
to improve living conditions, health care and
education and protect the rights of people from the
pipeline region.
"These initiatives will
provide substantial assistance to people who may have
suffered hardships in the region," added the statement,
which is posted on both the Unocal and ERI websites. ERI
added that it was "thrilled [and] ecstatic" with the
settlement, but its lead attorney in the case, Rick
Herz, declined to elaborate.
The case,
which was originally filed in federal court in 1996
under the Alien Tort Claims Act (ATCA), has traveled a
tortuous route through the US and California court
systems over the past nine years. The settlement is
designed to end litigation in both the state and federal
cases.
Considerable
attention was paid to the federal case because
it was one of the first filed against corporations
under the ATCA. Passed by Congress in 1789, the
law gave federal district courts jurisdiction over any
civil action by a foreigner against any other person on
US territory for acts committed abroad "in violation of
the law of nations or a treaty of the United States".
The law, which was originally aimed at piracy,
lay dormant for some 190 years before human-rights
attorneys began using it in the 1980s on behalf of
victims of abuses committed overseas. Some of the cases
were filed against foreign dictators. such as former
Philippine president Ferdinand Marcos and senior
military officers from Guatemala, Indonesia, Argentina,
Ethiopia and El Salvador who were visiting or residing
in the United States. While damages have been awarded in
almost all such cases, they have rarely been collected,
primarily because the defendants fled the US after
receiving legal service.
Lawyers
began bringing
cases against US and foreign corporations - usually
involving alleged abuses committed by foreign armies
or police that were providing security for the companies
- under the ATCA in the mid-1990s. Though the
trial courts dismissed most of them, some, including the
Unocal case, have been working their way through the
federal judiciary. No case involving corporate
defendants has yet been heard by the Supreme Court.
The most
successful actions have been brought by survivors of the
Nazi Holocaust against foreign companies and banks that
rejected their efforts at recovering money or insurance
claims after World War II. While none of these ever came
to trial, they helped induce Swiss banks to negotiate
settlements worth more than US$1 billion.
The announcement appears to make
the Unocal case the second one under the ACTA in which
a settlement has been reached. Thus it could also create
a precedent for several other pending cases against oil
companies, including one brought by Indonesian
plaintiffs from Aceh province against ExxonMobil and
another by Nigerian plaintiffs from the Delta region
against Shell.
The Unocal case revolved around
plaintiffs' allegations that they or their family
members had suffered a variety of serious abuses,
including forced relocation, forced labor, rape, torture
and murder at the hands of Myanmar army units that were
securing the route of the Yadana pipeline project
managed by a consortium of companies, including Unocal,
France's Total and the Myanmar state oil company, during
the construction of the pipeline. The plaintiffs
contended that Unocal knew or should have known that the
military had a record of committing such rights abuses,
that it knew or should have known that it did commit
such abuses during the project, and that it benefited
from the commission of such abuses, particularly
forcible labor and relocation.
In a
landmark decision that reversed the trial court's decision
that the plaintiffs had to show that Unocal also wanted
the military to commit those abuses, a federal appeals
court ruled in 2002 that the plaintiffs needed only
to demonstrate that Unocal knowingly assisted the
military in perpetrating the abuses, and that the plaintiffs
had presented enough evidence to that effect for the case
to go to trial. At the same time, the plaintiffs filed
a similar action in state court under California tort
and unfair business practices laws. In June 2002, a
state court judge rejected Unocal's request for a
dismissal, finding that the plaintiffs had presented
sufficient evidence that a jury could find Unocal to have
been vicariously liable for the military's human-rights
abuses.
Unocal's hope of avoiding a full-scale
trial - either in federal or state court or both - was
further set back by two other decisions handed down in
the past six months. In the most significant decision,
the US Supreme Court upheld by a 6-3 vote the continued
validity of ATCA, despite a major challenge by the
administration of President George W Bush and several
major business associations that argued in "friend of
the court" briefs the law should not give victims of
serious abuses the right to sue for damages in US
courts. Although the court did not rule on the
applicability of the act to corporate activities, it
found that "for the purposes of civil liability, the
torturer has become - like the pirate and the slave
trader before him - hostis humani generis, an
enemy of all mankind".
The Justice Department
had argued that the ATCA, as "somewhat of a historical
relic", could not be permitted to provide "an untethered
grant of authority to the courts to establish and
enforce precepts of international law regarding disputes
arising in foreign countries". Unocal had hoped that the
Supreme Court, which had never ruled on an ATCA case
before, would have accepted the arguments of the
administration and its business allies and effectively
gutted the act. But it did not get its way.
Then, in mid-September, a California state
judge rejected a new Unocal appeal for the case to be
dismissed, in effect ending the first phase of a
trial and preparing the way for a jury to be empanelled.
With jury trials pending, Unocal apparently decided to
settle the case, which, according to the federal court,
should be finalized by February 1.
