[ql06] TORT: Unocal and current lawsuit re: ATCA

  • From: "Ken Campbell -- LAW'06" <2kc16@xxxxxxxxxxxxxxxx>
  • To: <ql06@xxxxxxxxxxxxx>
  • Date: Sun, 28 Sep 2003 06:57:08 -0400

Business Targeted for Rights Abuse

By Seth Stern
Christian Science Monitor
September 4, 2003


To make way for a natural gas pipeline, the Burmese military displaced
whole villages a decade ago, forced residents to work against their
will, and allegedly raped or murdered some who refused.

Those are the charges laid by some human rights groups. But instead of
targeting Burma's [Myanmar's] government, the victims of those alleged
abuses turned to a federal court in California for relief. They sued one
of Burma's corporate partners, the US oil company Unocal, using a
controversial 1798 statute that may have originally been designed to
deal with pirates.

The case has potentially far-reaching implications. To human rights
activists, it could set a precedent for efforts to crack down indirectly
on some of the world's worst regimes. But business groups warn it could
damage the engine of the world economy by making corporate forays into
the developing world riskier. And the Bush administration is worried
that US courts may wind up interfering with its foreign policy as they
deal with growing numbers of international plaintiffs ranging from
prisoners of war to torture victims.

The case is currently stalled behind the marbled-covered walls of the
Ninth US Circuit Court of Appeals here in San Francisco, which must
decide the pivotal question whether the lawsuit against Unocal can go to
trial. At the center of the controversy is the 205-year-old Alien Tort
Claims Act (ATCA) and whether it can be used to hold multinational
corporations liable for business partners' human rights abuses.

        Dusting off an old statute

The statute is so old that legal experts aren't sure about its original
purpose. The act gives federal courts broad jurisdiction over violation
of "the law of nations or a treaty of the US." No legislative history
survives so the best guess is that it was originally intended to handle
suits against pirates and foreign diplomats.

ATCA was dusted off in the late 1970s by lawyers trying to haul
individual human rights abusers into American courts. Individuals from
Paraguay to the Philippines and the former Yugoslavia were found liable
for torture under the act during the 1980s. In the 1990s, the next
derivation of suits targeted corporations extracting natural resources
in developing countries - such as Texaco in Ecuador, Shell in Nigeria,
and Unocal in Burma.

The Unocal suit was filed in 1996 on behalf of 11 rural villagers by
Earthrights International, a human rights group in Washington and
Thailand. The suit charged that Unocal hired the Burmese military to
provide security during the construction of a natural gas pipeline,
despite knowing about the government's record of human rights abuses. It
also alleges the company knew about forced labor practices and
benefitted from them. A separate lawsuit against Unocal is pending in
California state court.

Federal trial courts dismissed the suits against Unocal as well as
Texaco and Shell on the grounds the companies didn't have a close enough
connection to the abuses. But a three-judge panel of Ninth Circuit
judges last year reversed a lower ruling and allowed the Unocal case to
move forward.

The Ninth Circuit panel found that the grounds to convict would be
sufficient if the company aided and abetted the Burmese military in
perpetrating abuses, as opposed to meeting the tougher standard, used by
the trial courts, of proving that the firm actually directed the abuses.

        Red-lining rogue regimes?

Supporters say a successful suit resulting in money damages would force
companies to adopt stricter codes of conduct. It would also function as
a de facto sanction against a regime the US government has already tried
to isolate. "You would be, in effect, red-lining the most abusive
regimes from foreign investment," says Kenneth Rodman, a professor at
Colby College in Waterville, Maine.

The legal question coincides with other pressures on Unocal. On Tuesday,
the chief financial officers of New York State and California urged the
oil giant to pull its operations from Myanmar or assure shareholders
that the company complies with human rights protections.

        Uncertainty for corporations

Business groups say companies shouldn't be held liable for the actions
of governments they can't control - particularly in unstable countries
where governments may change overnight. "It's guilt by association,"
says Daniel O'Flaherty, vice president of the National Foreign Trade
Council.

Other business groups warn that allowing the Unocal case go to trial
could open the floodgates to new lawsuits against corporations. Suits
against hundreds of companies that traded with apartheid-era South
Africa are still pending, The Institute for International Economics
envisions a "nightmare scenario" in which firms doing business in China
could be sued on the basis of that nation's treatment of political
prisoners and the environment.

        Bush administration's view

Such concerns prompted the Bush administration to file a brief on behalf
of Unocal earlier this year. It argues allowing the case to go to trial
could interfere with US foreign policy and even disrupt the war on
terrorism.

"This is guerrilla warfare by interest groups using unconventional
methods to impose corporate responsibility," says Professor Rodman.
"From the vantage point of the State Department, where foreign policy is
about reconciling divergent national interests, this can be a
significant irritant."

Many legal experts say corporate fears are overblown. Courts remain wary
about applying ATCA broadly, they say.


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