CONSULTANT WARNED UNOCAL IN 1992 THAT BURMESE GOVERNMENT 'HABITUALLY MAKES USE OF FORCED LABOR,' RECENTLY UNSEALED COURT DOCUMENTS OBTAINED BY TIME REVEAL

New York - A Unocal consultant warned Unocal 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," TIME's Adam Zagorin reports. TIME has obtained recently unsealed court documents that challenge U.S. oil giant Unocal's assertion that "if there were any possibility" that their oil pipeline project in Burma "was connected with human rights abuses, this would absolutely be unacceptable."

A later memo, written by another adviser, informed the company that the Burmese military was indeed committing abuses connected directly to the project. The adviser, a former U.S. military attaché 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 attaché 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 L.A. police department?" It will be up to the court to decide how much the oil company is responsible for what it may have ignored, but 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.

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 only as "John Doe Number 8" in a lawsuit in which he and 14 other unnamed victims accuse Unocal of "aiding and abetting" the abuses carried out by the 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, which is being sued by Guatemalan laborers who say the firm hired goons who kidnapped and tortured union organizers, and ExxonMobil, which faces claims from 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. More than two dozen cases have been filed against companies doing business in developing countries. No judgments have been awarded so far, but the total could reach $200 billion.

The story can be found on TIME.com/globalbusiness.

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