Human rights activists hoping for a precedent-setting legal judgement over allegations that oil company Unocal used forced labour in Burma (Myanmar) have had their hopes dashed by an out-of-court settlement.
The deal has been agreed by a group of Burmese villagers who had been engaged in a near-decade long US legal battle against the exploration and production company under the Alien Tort Claims Act.
Human rights groups, notably EarthRights International and the Center for Constitutional Rights, had been hoping the statute would be a fruitful legal avenue to challenge companies on alleged human rights abuses outside their home base.
While the settlement does not close off that avenue, it leaves the legal position still unclear and, according to some lawyers, will make it less likely that further lawsuits will be brought against corporations.
The Unocal case dated back to 1996, when Burmese nationals filed lawsuits in US courts seeking compensation. The suits alleged that in the wake of work by Unocal on the Yadana oil pipeline in the country, villagers were raped and murdered by government troops and that some were used as forced labour on the project.
Complex legal arguments about whether the case fell within the scope of the act slowed the action for years. However, in September the case appeared to be coming to a head when a California judge denied a motion by Unocal to dismiss it.
Details of the settlement are confidential, but a statement issued by both parties said the company – which has always denied the allegations – would ‘compensate’ the plaintiffs and ‘provide funds for programmes to improve living conditions, health care and education’ in the region where the pipeline runs.
Anthony Sebok, a professor at Brooklyn Law School in the US, said the plaintiffs may have decided to settle for the legal victories they had won over the last eight years rather than risk having them overturned.
A US Supreme Court ruling in June 2004 on a separate lawsuit brought under the Alien Tort statute had given some hope to both sides. The ruling limited the reach of the statute, but left open the door for suits alleging violations of ‘any international norm’ accepted by civilized nations, without spelling out everything that might fall within this category.
‘It is possible, that, in the end, the lawyers advising the plaintiffs realized discretion was the better part of valour … even if it meant accepting a settlement offer from Unocal that might have been smaller than they otherwise would have hoped,’ Sebok said.
The activists portray the settlement as a victory, but Sebok said Unocal may have decided that ‘the risks of bad publicity arising from the testimony of the villagers were so high that a settlement made better sense from an economic point of view’.
The Unocal settlement draws a line under the US legal battle against the company’s presence in Burma. However, in France a lawsuit is still pending in the Nanterre court against the oil company Total, which was also involved in the Yadana project.
