Myanmar: Unocal Faces Landmark Trial Over Slavery

Publisher Name: 
Seattle Post-Intelligencer Reporter

The Unocal oil company is about to become the first corporation in history
to stand trial in the United States over human rights violations abroad.

And two Seattle law professors are helping to make history in the shocking
case, in which corporate partners used Myanmar's notoriously brutal
military regime to provide "security" for a natural gas pipeline project
in the remote Yadana region near the Thai border.

The long-delayed trial starting next week in California will determine
whether Unocal, a major investor in the project, is legally responsible
for the military's abuse of villagers living along the pipeline route.

It's a case involving allegations of forced labor, rape, torture -- even
killing. But mainly it's about corporate responsibility and how far it
reaches beyond American soil and beyond corporate walls separating
subsidiaries from parent companies.

That's where Seattle University professors Kellye Testy and Julie Shapiro
come in.

Lawyers for the villagers hired Testy, an expert in corporate formation,
to help knock down the walls between California-based Unocal and the two
subsidiaries that it set up to hold its 28 percent interest in the
pipeline project in Myanmar.

"Our argument is that these are phony corporations created solely to hide
from liability," said Dan Stormer of Pasadena, Calif., the lead attorney
for the Myanmar villagers.

"Kellye Testy is a nationally renowned expert on the formation and makeup
of corporations and their legitimacy," he said. "She is among our most
important witnesses."

Shapiro is an expert in the procedural rules that control lawsuits,
including who can be sued where. She has been an attorney of record in the
Unocal case from its beginning in 1996.

It's not easy representing a group of impoverished people who live
thousands of miles away in Myanmar, formerly called Burma, against
powerful corporations based in California and France.

The foot-high stacks of records in Shapiro's campus office attest to the
daunting nature of the case.

"I had no idea how complicated it really would get," said Shapiro, who
volunteered to help because she wanted to make a difference and because
her longtime friend, Philadelphia attorney Judith Chomsky, is involved.

Testy, as a witness, could not talk about her role except to say, "It is a
very complex and interesting case."

The allegations are horrific.

With Unocal's knowledge, the Myanmar military government formed four
battalions, each with 600 men, to "guard" the pipeline corridor during
construction, according to a 9th U.S. Circuit Court of Appeals opinion on
preliminary motions in the case.

But the center of Myanmar's civil war was at least 150 miles away from the
corridor, where "little or no rebel activity" was occurring, the opinion

The soldiers' true role was to force villagers in the pipeline region to
work without pay -- a modern form of slavery, the 9th Circuit opinion

And Unocal knew, both before and after investing in the project, that the
military was enslaving the people, the opinion said.

Unocal's own consultant, former military attache John Haseman, reported to
Unocal in December 1995 that the soldiers were committing "egregious human
rights violations" along the pipeline route.

"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," Haseman told
Unocal in a report quoted in court records.

Two groups of villagers from the region filed separate suits in federal
and state courts in California, alleging violations of the federal Alien
Tort Claims Act and state law. The villagers are not named, to protect
them from military retribution, Stormer said.

The suits claim that, because of the pipeline project, the villagers lost
their homes, their family members were killed, and they were raped,
assaulted, tortured or forced into slavery.

Their suit, said attorney Stormer, "will prevent corporations from
exploiting local peoples in the name of profit."

Unocal calls the allegations false and insists in a written statement,
"This company has never encouraged, participated in human rights
violations in any way. ... We will defend our reputation vigorously and
expect to be fully vindicated."

Unocal has won some important victories. This year, it persuaded the 9th
Circuit to reconsider its opinion that there is enough evidence to try
Unocal for aiding and abetting the forced labor. That reconsideration is

Also, a Los Angeles County Superior Court judge ruled last year that
Unocal is not directly liable for human rights abuses in Myanmar, although
it may be vicariously liable -- the subject of the upcoming trial.

Unocal, with $11 billion in assets, is primarily involved in exploring and
producing crude oil and natural gas around the world.

Shapiro's work focused not on Unocal but on a French oil company, Total,
the pipeline project operator.

"You have to find a connection between the defendant and the place where
you want to sue them," Shapiro said.

Although Total was "equally complicit" with Unocal in the human rights
violations, she said, she could not establish enough of a link to
California to haul the French company into court there.

Total set up a subsidiary to extract natural gas from the Yadana field and
to build a pipeline for shipping the gas to Thailand.

It was Total that sold an interest in the project to Unocal. And it was
Total's subsidiary that contracted with the Myanmar government to provide
security protection, the 9th Circuit opinion said.

Although disappointed that Total avoided the suit, Shapiro said the
preliminary rulings that Unocal can be sued are of greater importance.

"The U.S. really has an extraordinary legal system. It offers in many ways
a real possibility to level the playing field" between poor villagers and
large corporations, she said.

Even if Unocal ultimately wins, "the corporation has to answer in a
specific and concrete way" for its actions, she said.

"It is enormously important that a case has actually been brought this

AMP Section Name:Human Rights