Published on Wedesday, December 15, 2004 by OneWorld.net
Tentative Settlement Reached in Landmark Unocal-Burma Case
by Jim Lobe
WASHINGTON -- A tentative settlement has been reached in two landmark lawsuits brought by unnamed Burmese plaintiffs against California oil giant, Unocal, for serious human rights abuses inflicted against them and their communities by soldiers building a pipeline route for the company.
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," the statement, which is posted on the websites of both Unocal and ERI (www.earthrights.org and www.unocal.com).
ERI added that it was "thrilled (and) ecstatic" over the settlement, but ERI's lead attorney in the case, Rick Herz, declined to elaborate in an interview.
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 U.S. and California court systems over the last nine years. The settlement is designed to end litigation in both the state and the federal cases.
Considerable attention was paid to the federal case because it was one of the first filed against corporations under ATCA. The law was passed by Congress in 1789, it gave federal district courts jurisdiction over any civil action by a foreigner against any other person on U.S. 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 residing or visiting in the United States.
While damages have been awarded in almost all such cases, they have rarely been collected, primarily because defendants fled the U.S. after receiving legal service.
Attorneys began bringing cases against U.S. and foreign corporations - - usually involving alleged abuses committed by foreign armies or police that were providing security for the companies - - under ATCA in the mid-1990s. Although 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 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 Two. While none of these ever came to trial, they helped induce Swiss banks to negotiate settlements worth more than US$1 billion.
A settlement in the Unocal case would appear to be the second case in which a settlement has been reached. In that respect, 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 allegations by the plaintiffs 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 Burmese army units that were securing the route of the Yadana pipeline project managed by a consortium of companies, including Unocal, Frances Total, and the Burmese state oil company, during the construction of the pipeline.
Plaintiffs contended that the 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 plaintiffs had to show that Unocal also wanted the military to commit those abuses, a federal appeals court ruled in 2002 that plaintiffs needed only to demonstrate that Unocal knowingly assisted the military in perpetrating the abuses, and that plaintiffs had presented enough evidence to that effect so the case should go to trial.
At the same time, 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 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 last six months.
In the most significant decision, the U.S. 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 that the law should not give victims of serious abuses the right to sue for damages in U.S. 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 generic, an enemy of all mankind."
Bush's 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, the California state judge rejected a new Unocal appeal for the case to be dismissed, effectively 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, 2005.
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