Profits at Gunpoint

Unocal's pipeline in Burma
becomes a test case in corporate accountability

by Daphne Eviatar

The Nation magazine, June 30, 2003

Maung Maung was no stranger to the brutality of the government of Burma (called | Myanmar by its military rulers). A former geologist and leader of the national mineworkers' union, Maung was forced to flee the country in 1988 when, following a massive citizens' uprising, a new military government began to arrest, torture and execute thousands of pro-democracy demonstrators. But Maung was nevertheless surprised when, nine years ago, he came across hundreds of Burmese crowded into a cluster of straw huts along the Thai-Burma border, a makeshift village that sank in the mud when it rained.

Why had they fled Burma's lush Tenasserim district, a peninsula of coastline, farmland and thick forests, to live here like cattle? In a series of interviews with Maung, founder of the exiled Federation of Trade Unions of Burma, the villagers described armed military men expelling indigenous fishermen from their homes and farmers from their land' razing villages and enslaving their inhabitants. They reported that soldiers forced everyone from children to the elderly into labor, making them cut through thick swaths of jungle, build military installations and haul army equipment. All of this, Maung later learned, in order to prepare the area for a new gas pipeline.

One woman said soldiers came to her home as she was cooking over an open fire. When her husband attempted to flee, they shot him and shoved her and her baby into the flames, killing the baby and leaving her with disabling scars. Others described seeing their neighbors executed when they refused to leave their homes. Many who joined forced-work details collapsed from exhaustion or disease after weeks of toiling under a scorching sun with little food or water. Two girls said they were raped by soldiers at knifepoint.

Many of these victims are now plaintiffs in two landmark lawsuits against Unocal, part of a consortium of companies behind the gas pipeline. The outcomes may well determine whether American corporations will ever be forced to account for the brutal human rights abuses being committed around the world in their interests.

As has now been well documented by EarthRights International, a human rights group co-founded by former Burmese student activist Ka Hsaw Wa, the military began clearing the land and enslaving locals only after the oil companies initiated negotiations with the Burmese government to build the $1.2 billion project in 1990. The accounts collected by Ka Hsaw Wa and Maung are corroborated by volumes of sworn deposition testimony from villagers, filed under seal but cited in several court opinions. According to the testimony, plaintiffs' lawyers and further interviews conducted by such independent human rights organizations as Human Rights Watch, hundreds of villagers were driven from their homes and farms, and forced to work at gunpoint to prepare the area for the pipeline.

Led by the French oil company Total (now TotalFinaElf), the consortium entered into a joint venture with the Burmese government around 1995 to transport vast quantities of natural gas from the offshore Yadana field in the Andaman Sea through a pipeline that would extend east to Thailand. The pipeline would have to pass through Tenasserim, a region whose ethnic groups opposed military rule. Because its agreement with the companies required the Burmese government to protect the pipeline from sabotage, the government increased its military presence along that thirty-nine-mile stretch. According to testimony from villagers, many of those forced into service cutting down trees, digging out stumps, building barracks and helipads-were beaten regularly by guards. Some of these same helipads were used to ferry Unocal officials when they came to inspect the project's progress.

To prevent workers from fleeing, the military took extreme measures. "There was a guy who had his hands and feet bound with seven people with rope," says Maung, who met the man while interviewing the villagers who had fled to the Thai border. "They were put in a pit to keep them from running away."

It was Maung who first brought the idea of suing the oil companies to attorney Terry Collingsworth, then an AFL-CIO representative in Nepal and a leader of the Washington, DC-based International Labor Rights Fund. Collingsworth, together with Burmese activists, decided to try using an obscure 1789 law known as the Alien Tort Claims Act, which grants non-citizens access to US courts in cases involving violations of international law. That act had been used before to prosecute torture by foreign military officers, but it had yet to be successfully used against a corporation whose officers hadn't personally perpetrated the abuses. In 1996 Collingsworth and the Labor Rights Fund used it to sue California-based Unocal on behalf of four Burmese villagers for encouraging and profiting from murder, torture, rape and slavery in Burma. About a month later, EarthRights International filed a similar lawsuit on behalf of fourteen others, targeting Unocal, Total and the state-run Burmese and Thai gas companies. (The plaintiffs in both cases remain anonymous to protect them from retaliation.) Although the court ruled that it had no jurisdiction over the foreign companies, the cases, remarkably, went forward against Unocal, and are now being considered together in California and federal courts.

The claims against Unocal are straightforward. The villagers argue that because the California company was a business partner of the Burmese government, whose military is notorious for using forced labor, the company is responsible for the systematic human rights violations the military committed in order to complete the company's pipeline. While charging an American company with slavery is controversial, there's nothing unusual in American courts holding a company responsible for the acts of its business partner. And international criminal tribunals have often held individuals responsible for "aiding and abetting" international crimes like genocide. Either of these grounds could allow the court to rule in the villagers' favor, forcing Unocal to face a trial.

On June 17, after years of legal wrangling during which the case was dismissed, reinstated and then appealed-the US Court of Appeals for the Ninth Circuit will reconsider whether the company can be held responsible for forced labor and murder committed by the Burmese military in connection with the pipeline. Its decision will have implications far beyond Unocal and the Burmese villagers. Although the Alien Tort Claims Act, originally enacted to prosecute piracy, lay dormant for almost two centuries, human rights and labor activists are increasingly using it to charge American corporations with egregious violations of international law. The Labor Rights Fund alone has half a dozen such cases pending in federal courts around the country, claiming human rights abuses by Exxon Mobil in Indonesia, Coca-Cola in Colombia and Del Monte in Guatemala, among others. The New York-based Center for Constitutional Rights has used the law to charge Royal Dutch/ Shell and Chevron-Texaco with complicity in murder and military attacks in connection with their oil projects in Nigeria.

The rising tide of these cases has alarmed American corporations. They're fighting back hard, filing briefs in support of the defendants and lobbying Congress to repeal or amend the Alien Tort Claims Act. Still, most courts' substantive decisions have favored the plaintiffs, and the cases are slowly marching ahead' with the case against Unocal taking the lead-and thus promising to set a precedent. If the Ninth Circuit rules that Unocal must face trial for collusion in murder, torture, rape and slavery, it will confirm that human rights activists have hit upon a powerful tool for holding corporations legally accountable for profiting off of the most despicable practices of abusive governments overseas.

The US government is working to prevent that. In May, Attorney General John Ashcroft filed a brief with the Ninth Circuit court denouncing the villagers' attempt to use the alien tort law to sue Unocal and arguing that every court that has allowed such claims for the past twenty years has been wrong. In a sweeping argument against legal accountability for human rights violations, the Administration argues that all suits filed under that law should be dismissed because they interfere with US foreign policy and undermine America's war on terrorism. Kenneth Roth, director of Human Rights Watch, calls Ashcroft's intervention "a craven attempt to protect human rights abusers." So far, no court has endorsed the Justice Department's view.

Unocal has fought this case every step of the way, refusing to acknowledge even basic facts surrounding the pipeline's construction. The company denies, for example, that under its contract with the state-owned Burmese gas company, the ~ government had pledged to provide security for the pipeline. Yet Unocal's own documents, produced for the lawsuit, state that "the government of Myanmar is responsible for protecting the pipeline." Unocal's representative in Burma told the US Embassy that "the companies have hired the Burmese military to provide security for the project." Additional documents reveal that Unocal officials on the pipeline project held daily meetings with army commanders to tell them where they needed roads, military installations and security. And villagers have testified that Unocal officials regularly visited the pipeline site.

Unocal claims that it was unaware that the Burmese military regularly used forced labor. Yet Unocal's own consultants warned the company, according to court documents, that "throughout Burma the government habitually makes use of forced labour to construct roads." Even the US State Department reported at least as early as 1991 that the military government routinely uses forced labor. The United Nations issued more warnings of serious human rights abuses in 1995.

With the evidence mounting, Texaco, which had large investments in a Burma gas field, pulled out of the country in 1997. But Unocal retained a 28 percent interest in the pipeline, and then-Unocal president John Imle was defiant. At a January 1995 meeting with human rights organizations, he had argued that locals were threatening sabotage, adding, "If you threaten the pipeline there's gonna be more military. If forced labor goes hand and glove with the military, yes, there will be more forced labor. For every threat to the pipeline there will be a reaction."

If there remained any doubt, in March of that year Unocal's Burma representative, Joel Robinson, confirmed that he had received information from human rights groups that "depicted in more detail than I have seen before the increased encroachment of [the Burmese military's] activities into the villages of the pipeline area." Robinson concluded that Unocal's insistence that the military had not used forced labor on the company's behalf "may not withstand much scrutiny."

By the end of 1995, Unocal consultant John Haseman, a former military attaché at the US Embassy in Rangoon, added to the chorus in a report to Unocal: "Based on my three years of service in Burma, my continuous contacts in the region since then, and my knowledge of the situation there, my conclusion is that egregious human rights violations have occurred, and are occurring now, in southern Burma," he told Unocal. "The most common are forced relocation without compensation of families from land near/along the pipeline route; forced labor to work on infrastructure projects supporting the pipeline...and imprisonment and/or execution by the army of those opposing such actions"-exactly the core charges of the plaintiffs. "Unocal," Haseman continues, "by seeming to have accepted [the Burmese military's] version of events, appears at best naive and at worst a willing partner in the situation."

Unocal nonetheless adamantly maintains that no abuses occurred. In June 2002 the company released a statement saying that the pipeline "was constructed and is being operated according to high ethical standards and modern business practices," and that despite "the challenges" of investing in a country "ruled by an authoritarian military government," it is "confident that no human rights abuses have occurred in the construction or operation of the pipeline." Even if some abuses did occur, says Daniel Petrocelli, the lead lawyer defending Unocal, "no Unocal person participated in any of the alleged wrongdoing. Unocal has no control over the Myanmar military."

With the pipeline now completed and producing profits for Unocal, the company insists that the project benefits Burma. The pipeline is currently producing 700 million cubic feet of gas per day, well above early projections of 525 million, according to Unocal spokesman Barry Lane, who says the project is "exceeding our investment objectives." After a large group of shareholders asked Unocal in May to reconsider its continued involvement there, Unocal chief executive Charles Williamson maintained that the company would not withdraw from the project.

Lane calls the project "a good investment for the company, and a good investment for the people of Myanmar. Our disappointment is that there aren't a hundred such projects in the country." Unocal says that because of its project, infant mortality in the region is down, school attendance is up and close to 600 people have pipeline-related jobs. The company does not calculate how many farmers and fishermen lost their livelihoods as a result of the project's construction.

The June 17 arguments will determine whether Unocal's claims will ever be tested at trial. If the federal court affirms its earlier decision, it will be a major victory not only for the villagers, but for the hundreds of victims in other countries waiting for their day in court. But even if they lose this round, the Burmese villagers have a chance through a second case, filed under state law in Los Angeles. Despite repeated maneuvers to delay by Unocal's lawyers, that trial is now set to start in July.

To Maung, it's about much more than a court verdict. "When I told the villagers that we could sue Unocal, they thought I was crazy," he says. "We're trying to say that corporations can't just come in and do what they want. They have to answer to the law."

Unocal is still hoping for a way out. Last August, it asked the State Department to intervene, claiming that a trial might interfere with US foreign relations. The company was inspired by a case pending against Exxon Mobil for alleged human rights violations in connection with its operations in Indonesia. There, the State Department asked the federal judge to dismiss the lawsuit on the grounds that it would interfere with the US war on terrorism. But that's a harder case to make with Burma. In 1997, the United States imposed sanctions against Burma, and the State Department's latest reports state that "the government of Burma severely abuses the human rights of its citizens" and has "severe and pervasive forced labor problems." It remains to be seen whether Unocal can make a credible case that despite more than a decade of documented evidence to that effect, it had no idea that its business partner was doing anything wrong and that in any event, a corporation can't be held responsible.

Daphne Eviatar, a Brooklyn-based writer and attorney, is a contributing editor at The American Lawyer.

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