Court Ponders if U.S. Firm Liable for Abuse Abroad

BY Reuters

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SAN FRANCISCO (Reuters) - A U.S. appeals court will hear oral arguments on Tuesday in what could be a landmark case to determine if U.S. corporations can be sued for human rights abuses that occur abroad.

The hearing stems from two 1996 lawsuits against Unocal Corp. which claimed that villagers in rural Myanmar, formerly Burma, were subjected to forced labor, rape, torture and murder by the military during construction of a natural gas pipeline partially funded by the oil company.

Both lawsuits claimed violations of state law and the law of nations under the Alien Tort Claims Act, a once obscure statue written in 1789 that allows foreign nationals to sue for human rights abuses in U.S. courts.

The case before the Ninth U.S. Circuit Court of Appeals has galvanized parties on both sides, with numerous briefs filed in support of the plaintiffs and Unocal.

``Unocal isn't the first (such case), but it has garnered a lot of attention,'' said Laurel Fletcher, acting director of the Human Rights Clinic at the University of California, Berkeley. ``It has raised squarely the issue: What can U.S. companies do on foreign soil?''

Unocal is appealing to an 11-judge appeals panel of the Ninth Circuit Court a decision handed down by a three judge panel of the same court in September 2002 that said the company could be sued.

The three judge panel, which overturned a lower court judge's ruling that the company could not be sued, compared Unocal's actions in Myanmar to the German armaments firm Krupp which used slave labor during World War 2 and was tried for war crimes afterward. It said a jury should be allowed to decide if Unocal was liable for human rights violations.

The State Department has asked the court to dismiss the entire case. In its brief, the Bush administration expressed concern that similar suits could be brought against some of its closest allies in the country's war on terror. It also cited the possibility that prisoners in Guantanamo Bay could file suits against the U.S. government.

El Segundo, California-based Unocal has remained steadfast that it holds no responsibility for the host nations' actions. Attorneys for the plaintiffs' argue that Unocal knowingly entered into a joint agreement with an oppressive military regime with a suspect human rights record.

The Los Angeles Times quoted plaintiffs in the suit as saying the military abuses began only after the pipeline construction began.

``Before they came and built the pipeline, there were no soldiers,'' said one woman identified as Jane Doe 2, ``When the pipeline came, it destroyed our lives. We lost our home. We lost our livelihood. We lost everything.''

If the Ninth Circuit appeals panel rules in favor of the plaintiffs some experts say the decision will be a financial blow to Unocal and host of other multinational companies such as Coca-Cola Co. and Exxon Mobil Corp. that face similar suits.

Others say a ruling against Unocal would have a limited impact. ``The decision would be binding only in the Ninth Circuit,'' said Fred Lampert, a business law professor at the University of California Hastings College of Law in San Francisco.

Unocal has been fighting the lawsuit for nearly seven years.

 June 17, 2003

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