Paying For It

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Doing business in Burma has often cost American companies p.r. points: Pepsi, Apple Computer and Levi Strauss are just a few of the U.S. firms that pulled out of the military-ruled state after being pressured by human-rights groups. Now, however, doing business with regimes like the one in Rangoon may cost American companies cash as well as goodwill. Last week, California-based oil giant Unocal chose to settle a landmark lawsuit launched by 14 Burmese refugees who alleged that the company was responsible for human-rights abuses by Burmese soldiers working on the $1.2 billion Yadana gas pipeline—a project developed by Unocal, the Burmese government and French oil company Total SA. The terms of the settlement are confidential, but in a joint statement released by the parties to the lawsuit, Unocal stated that "in principle, [it] will compensate plaintiffs and provide funds ... to improve living conditions, health care and education" and "provide substantial assistance to people who may have suffered hardships in the region."

Employing a little-known 1789 law called the Alien Tort Claims Act, the suit argued that by virtue of its partnership with the junta, Unocal "aided and abetted" the Burmese army as its soldiers allegedly burned a baby to death, raped women and girls and forced villagers into slave labor to clear a path for the pipeline. Unocal has declined to comment beyond the statement outlining the settlement, which says that the company "respects human rights in all of its activities."

Although there have been several attempts to sue American multinationals in relation to human-rights abuses overseas under the 1789 statute, the Unocal case is the first time that a defendant has concluded a settlement under which compensation will be paid. "I'm thrilled with the outcome of this case," said Katherine Redford of Washington D.C.-based law firm EarthRights International, who conceived of the suit after visiting the Thailand–Burma border a decade ago as a law student. "General counsel for corporations around the world will pay considerable attention to this settlement," says Sean Murphy, a professor of international law at the George Washington University Law School. Saw Tuday Kaw of the Karen Information Committee, a group of refugees from Burma, says, "If Unocal has to pay a price, then other companies will have to think twice before doing business with Burma's government."