One of America's most powerful oil conglomerates looks likely to get its comeuppance in court over its overseas business practices after spreading a trail of misery through a small rainforest village in the Tenasserim region of Burma in November 1994.

The prospect of an avalanche of suits against big corporations has so spooked the Bush administration - always a good friend to the oil industry - that last month the Justice Department filed a brief in the Unocal case denouncing the Alien Tort Act as "an obscure provision" and arguing its application posed a direct threat to, among other things, the war on terrorism.

When the Union Oil Company of California, or Unocal, started working on a gas pipeline project there, it contracted out security operations to the Burmese military regime; and that was when the horror began.

According to court documents, Burmese soldiers entered a house in the village, broke into the rice storeroom with an axe, kicked the woman of the house and pushed her down some stairs. After a brief hunt for her husband, the soldiers came back and kicked the woman again, knocking her unconscious and pushing her into a lighted fireplace. They kicked her infant daughter into the fire too.

The soldiers wanted the family to relocate to another village to make way for the pipeline, and they weren't about to take "no" for an answer. The baby desperately needed medical care, but the soldiers forced the family to stay in a field without water for two days as they ransacked their belongings. By the time the family had paid off the soldiers, by selling a cow, it was too late. The baby died from an infected head wound.

The human rights organizations that have brought a suit against Unocal allege that the Yadana pipeline project has led to dozens of similar incidents, as well as rape and extortion. They say villagers - who are left unnamed in the suit for their own protection - have been systematically relocated and pressed into forced labor.

Invoking an old United States law - the Alien Tort Claims Act of 1789, which was passed to combat piracy on the high seas but has now been adapted to confront other infractions of the "laws of nations" - they argue that Unocal and other companies must be held accountable for violations committed overseas in their name. And they are now just one step away from forcing the issue into open court. A panel of federal appeals judges in San Francisco heard final arguments this week on whether Unocal should be made to stand trial. Although a ruling is not expected for a few weeks, early indications are that a trial will indeed take place, setting a new legal precedent for US corporations and heralding the possibility of new standards of corporate behavior in some of the most benighted corners of the world.

There is, of course, nothing new in allegations of gross corporate misbehavior overseas and critics of US foreign policy have often accused Washington of deliberately subverting or overthrowing democratically elected governments to suit the corporate interests.

What is new is the legal approach to challenge the corporations. The Alien Tort Act was first revived about 20 years ago to chase down disgraced generals and deposed despots such as Ferdinand Marcos but it was adapted in the 1990s to pursue corporations.

Rick Herz, a lawyer with Earth Rights International, said: "The principle is the same, since corporations are persons under the law.

"Aiding and abetting - that's a direct liability. Companies like Unocal argue that they are not responsible for the actions of their subsidiaries and contractors, but notions of liability through joint venture or agency are basic tort theories, common throughout the United States and the rest of the world." Another suit, against ChevronTexaco over the deaths of villagers in Nigeria who had opposed its plans for a series of oil platforms, is also close to coming to trial.

The prospect of an avalanche of suits against big corporations has so spooked the Bush administration - always a good friend to the oil industry - that last month the Justice Department filed a brief in the Unocal case denouncing the Alien Tort Act as "an obscure provision" and arguing its application posed a direct threat to, among other things, the war on terrorism.

The San Francisco appeals court has indicated it is less than impressed with this line of argument. The Justice Department was not allowed to participate in this week's oral arguments, and large corporations who wanted to file similar briefs were denied.

Mr Herz said: "Their position is outrageous and their analysis is silly. They are trying to overturn 23 years of consistent precedent by arguing that the act was meaningless when it was passed. They are arguing that upholding human rights fundamentally conflicts with US foreign policy when one would have thought it was to uphold them."

© 2003 Independent Digital (UK) Ltd

###