Slave Labor?

By Adam Zagorin

The farmers and fishermen who live in jungle villages along the southern coast of Burma were long overlooked and neglected by their government. And they liked it that way, given the notorious methods of the country's military dictatorship. But their lives changed horribly, they say, after two oil companies, the U.S. giant Unocal and its French partner Total, began exploiting natural-gas deposits offshore. The gas discovery prompted construction of a $1.2 billion pipeline through hundreds of miles of rain forest to an electrical plant in neighboring Thailand. At that point, villagers contend, the government began to view them as another kind of natural resource to be exploited. Burmese troops were brought in to provide security and build infrastructure for the project. Overnight, claim the villagers, soldiers forced them at gunpoint to build army camps, helipads and roads. Many fled into the jungle, but others could not escape what they charge were terrible abuses. One victim, a slightly built, middle-aged rice farmer, told TIME of beatings by Burmese soldiers, who forced villagers to carry heavy loads through the jungle, sometimes for weeks at a stretch. "The government calls us volunteers," he said. "But the truth is, we were slaves."

To protect his identity, the rice farmer is known as "John Doe No. 8" in a lawsuit in which he and 14 other unnamed victims accuse Unocal of "aiding and abetting" abuses carried out by Burmese soldiers. The villagers, assisted by American labor activists, have asked U.S. courts to award damages that could exceed $1 billion. How Unocal fares in a trial scheduled for December in a California state court and in federal litigation will be closely watched because the oil company is just one of many big U.S. companies facing similar court cases, a potential minefield for multinationals that do business in unsavory nations. Other targets include Fresh Del Monte Produce, which is being sued by Guatemalan laborers who say the firm hired goons who kidnapped and tortured union organizers, and ExxonMobil, which faces claims by Indonesian villagers that the oil company is liable for the brutality of local security forces. "We want to establish that multinationals, which are among the biggest players in the global economy, are bound by the rule of law," says Terry Collingsworth, executive director of the International Labor Rights Fund, which is backing many of the lawsuits.

The law in question is a once obscure statute drafted in 1789 by the first U.S. Congress and known as the Alien Tort Claims Act. Originally designed to combat piracy, it fell into disuse until 1980, when courts began applying it to liability for aiding and abetting violations of fundamental human rights no matter where they occur--a standard similar to one used to prosecute German companies at the Nuremberg trials after World War II. More than two dozen cases have been filed against firms doing business in developing countries. No judgments have been awarded so far, but the potential liability could reach $200 billion.

The high stakes have prompted companies to fight the lawsuits vigorously--and not just in court. A corporate lobbying blitz helped persuade the Bush Administration to argue in legal briefs that such cases would disrupt U.S. diplomatic relations with governments aiding in the war on terrorism. The Justice Department has asked the Supreme Court to consider whether the law is unconstitutional. A corporate-funded study titled "The Awakening Monster" projects that if all the cases went against U.S. multinationals, $300 billion in global trade and investment could be wiped out. Many human-rights specialists, however, argue that target firms are exaggerating the threat posed by the lawsuits. "The alien-tort law has been used sparingly against corporations and applies only to knowing and concrete support for the most extreme abuses," says Harold Koh, an expert on international human rights at Yale Law School who dealt with issues of labor and diplomacy in the Reagan and Clinton administrations. "This law is nothing for a responsible American company to worry about."

Corporations doing business in Burma have come under particular pressure because of protests by the country's Nobel-prizewinning opposition leader, Aung San Suu Kyi, who is under house arrest. Most U.S. companies heeded her call in the 1990s to sever ties with Burma because foreign investment lends legitimacy and economic support to the junta (which changed the country's official name to Myanmar). In 1997 Congress outlawed all new U.S. investment there, and Bush imposed further sanctions this summer. But Unocal argues that its presence has a positive effect. Infant mortality in the pipeline vicinity is one-fourth the national average, it says, and such social indicators as school attendance and employment have gone up. In an annual report, Unocal noted, "If there were any possibility that our project was connected with human-rights abuses, this would be absolutely unacceptable to us."

But TIME has obtained unsealed court documents that challenge the company's assertion. A Unocal consultant warned the firm in 1992 that "throughout Burma, the government habitually makes use of forced labor" and that "in such circumstances Unocal and its partners will have little freedom of maneuver." A later memo, written by another adviser, informed the company that the Burmese military was indeed committing abuses directly connected to the project. The adviser, a former U.S. military attache in Burma, told Unocal of "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." The consultant added, "Unocal, 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."

A Unocal spokesman told TIME that the military attache had been unable to visit the pipeline personally because it was in an area closed by the Burmese government. He also said, "Forced labor was not used on the pipeline, and there is no question about that. It was not." The company did acknowledge several years ago that abuses by the military may have been committed in preparation for building the pipeline. Even so, the spokesman argued, as a "passive" investor--Unocal has a 28% stake in Total's pipeline--the company is not responsible for what soldiers may have done. He asked, "If Unocal invested in Los Angeles, would it be responsible for the actions of the Los Angeles police department?" It will be up to the court to decide how much the oil company is responsible for what it may have ignored. And even if Unocal prevails in this case, the wave of litigation and scrutiny has forced America's giant corporations to take a fresh look at the moral code they follow in places that don't abide by the rule of law. --With reporting by Robert Horn/Bangkok

With reporting by Robert Horn/Bangkok