With the Bush Administration too often feeling the pain of its corporate sponsors, and with the Enron scandal (so far) producing little political fallout or legislative change on Capitol Hill, advocates of corporate accountability have cause for frustration. (Martha Stewart is not much consolation.) But in one area corporate critics can feel encouraged. For several years, a small group of lawyers and labor advocates has been trying to hold transnational companies responsible for their actions by suing them in the United States for abetting and/or benefiting from human rights abuses overseas. Finally, these corporation-chasers are beginning to see signs of possible success.
In about a dozen cases, attorneys in the United States, on behalf of villagers, indigenous people and labor leaders overseas, have filed legal action against large corporations under the Alien Tort Claims Act (ATCA), a law passed in 1789 that allowed foreigners to sue one another in US courts. The law was not much used until 1979, when the family of a 17-year-old boy tortured and killed by a Paraguayan policeman successfully employed it to sue the officer. Afterward, human rights lawyers turned to the act as a way to address human rights violations conducted or enabled by multinational firms.
In 1996, for instance, the Washington-based International Labor Rights Fund (ILRF) filed an ATCA suit against Unocal, an oil and gas firm, charging that it knowingly used slave labor to build a pipeline in Burma. The plaintiffs included villagers who said they were forced at gunpoint to work on the project. A federal judge dismissed the ATCA lawsuit, arguing that Unocal did not have direct control over the Burmese military regime, a partner in the pipeline project. That decision is under appeal, but, in a legal first, in June a California state judge ordered Unocal to stand trial. In that trial, in September, the plaintiffs will argue under state law that partners in a joint venture can be held responsible for each other's actions. That would be a blow to Unocal. Evidence in the federal case showed it was well aware that human rights abuses were committed by the military regime in relation to the pipeline.
ATCA-wielding lawyers and activists have been going after corporate malfeasance around the globe. Earlier this year, a case filed against Shell by EarthRights International and the Center for Constitutional Rights got a major boost. This lawsuit claims the oil company is liable for human rights abuses committed by the Nigerian military against the Ogoni people, who opposed a Shell pipeline. Shell repeatedly filed motions to dismiss the case, but in February a federal judge denied these motions and permitted the case to move into the discovery phase. Now the plaintiffs can take depositions of Shell officials and review Shell documents.
Texaco was sued in New York by indigenous people of Ecuador, who charged it with destroying their local environment by dumping a million gallons of toxic waste into the ecosystem for two decades. The company's actions, they claim, devastated rainforest areas, caused an increase in cancer and other diseases and brought several tribes to the brink of extinction. In March the two sides argued about whether the case should be dismissed on jurisdictional grounds. The court has not yet ruled. Two years ago, residents of Bougainville Island in Papua New Guinea filed a lawsuit in San Francisco against the London-based Rio Tinto mining firm. The plaintiffs maintained that the corporation, which took over a company that developed a mine on the island, was in cahoots with a government that engaged in human rights abuses and destroyed entire villages in wiping out local resistance to the project. In March a federal judge dismissed the lawsuit after the State Department argued that the case could interfere with an ongoing peace process in Papua New Guinea. But the judge said the Papua New Guinea government would have to agree to permit the plaintiffs to file a case there.
In addition to the Unocal case, the ILRF is handling ATCA lawsuits against Coca-Cola (for allegedly using paramilitary forces to suppress--violently--union activity in Colombia), Del Monte (for allegedly employing thugs who tortured union leaders in Guatemala), DynCorp (for allegedly spraying Ecuadorean farmers and villagers with toxic chemicals that were supposed to be dumped on coca plants in Colombia) and the Drummond Company, a mining firm (for allegedly hiring gunmen to torture, kidnap and murder labor leaders in Colombia). In a case against ExxonMobil, ILRF contends that Mobil, which formed a joint-venture natural gas project with the Indonesian government, paid the Indonesian military for security and that these troops committed human rights atrocities--including murder and torture--against villagers in the Aceh province.
As these ATCA lawsuits creep forward, corporations here and abroad have to take notice. A plaintiff's win would compel transnationals to consider bringing their activities overseas into sync with international human rights standards. As the Wall Street Journal noted, a ruling against Unocal--if upheld--"could subject a long list of US companies to lawsuits in American courts as human rights groups seek to expand the reach of American tort law to foreign soil." Already the Street is paying attention. "I've started getting calls from mutual fund managers," says Terry Collingsworth, ILRF's executive director. "They tell me that they cannot base stock recommendations on moral considerations. But if there is a chance a company could be damaged by a big award in a trial, its business practices overseas become quite relevant." That is, "the markets" are watching and waiting--to see if Third World locals screwed by transnationals can find justice in courts far from their villages.