Unocal strikes deal with Myanmar villagers over alleged slave labour use

AFP 13 December 2004

LOS ANGELES, Dec 13 (AFP) - US-based Unocal Corp. will pay to boost living conditions and protect villagers near Myanmar's Yadana gas pipeline under the settlement of a key human rights abuse case, the parties said Monday.

Unocal and lawyers for 14 Myanmar villagers who sued the firm for alleged complicity in rights abuses, including the use of slave labour during the building of the pipeline, announced late Sunday they had struck a deal in principle to settle the suit out of court.

The tentative pact is the most significant reached under the Alien Tort Claims Act, a disputed law that allows foreigners to sue companies alleged to be indirectly responsible for overseas rights violations in US courts.

Both sides in the legal row said Monday that under the accord, the energy conglomerate would help fund improvements in living conditions, education health and human rights for villagers along the pipeline.

"Although the terms are confidential, 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," the parties said in a joint statement. "These initiatives will provide substantial assistance to people who may have suffered hardships in the region," they said. "Unocal reaffirms its principle that the company respects human rights in all of its activities and commits to enhance its educational programs to further this principle," the statement added.

The group of 14 anonymous Myanmar villagers accused California-based Unocal of turning a blind eye to rights abuses, including murder, rape and forced labour, during the building of the natural gas pipeline in the 1990s.

The preliminary deal came a day ahead of a scheduled hearing in the federal lawsuit by the full panel of the Ninth Circuit Court of Appeals in Pasadena, California, which was cancelled. The villagers and their US lawyers have battled for eight years to hold Unocal responsible for allegedly condoning abuses by the ruling military junta in the country formerly known as Burma.

The abuses allegedly took place during the construction of the 1.2 billion-dollar, 62-kilometer (39-mile) conduit that carries natural gas from Myanmar to neighbouring Thailand. Lawyers for the villagers claimed that the company knew or should have known that rights violations would occur during the building of the pipeline in the totalitarian state. Unocal, which did not directly operate the field owned by the Myanmar government, strongly denied any involvement in any human rights abuses. It has acknowledged that Myanmar troops forced villagers to carry ammunition and supplies for the military in the area, but denied that any of that labour involved the Yadana pipeline project.

Unocal owned the pipeline jointly with Total, formerly TotalFinaElf, and the Thai and Myanmar governments. Total is being sued separately in Europe.

The Yadana pipeline is now run by Thailand's PTT and Total. The villagers claim that Unocal has a 28.26 percent stake in the rights to proceeds from the pipeline. The federal lawsuit against Unocal was filed in Los Angeles in 1996, but was thrown out by a judge.

As lawyers for the villagers planned their appeal to the Ninth Circuit, they also pursued their claims in a similar suit in a California state court. In a landmark decision in January, a Los Angeles judge ruled that Unocal could not be held responsible in the state court for the human rights abuses.

Lawyers for the villagers claimed in that case that Unocal set up "corporate shells" simply to avoid liability for the enslavement of villagers when the pipeline was built. But Unocal said it was protected by a law that bars plaintiffs from trying to tap a parent corporation if a subsidiary had valuable assets of its own, and the judge backed its stance, saying she was unwilling to force major changes in corporate law.