Global Policy Forum

By Lisa Girion

Unocal Corp. said Monday that it would settle landmark human rights lawsuits brought by 15 villagers from Myanmar who claimed it was responsible for forced labor, rapes and a murder allegedly committed by soldiers along the route of a natural gas pipeline in the Southeast Asian nation.

Terms of the settlement are still being negotiated, and neither Unocal nor lawyers representing the plaintiffs would disclose details. In a joint statement, the two sides said the El Segundo-based energy company would pay the plaintiffs an unspecified amount of money and fund programs to improve living conditions for people from the region surrounding the $1.2-billion pipeline and "who may have suffered hardships."

The case against Unocal was seen as a key test for human rights activists who want to hold multinationals responsible in U.S. courts for atrocities committed in other countries. About three dozen similar suits have been filed in the last 11 years against other major U.S. corporations, including ChevronTexaco Corp., Ford Motor Co. and IBM Corp. None has gone to trial, and none has moved as far along in the judicial system as the Unocal suits, filed in 1996. The U.S. 9th Circuit Court of Appeals had been scheduled to hear arguments Monday on whether the case should go to trial.

A settlement would be a breakthrough. "Nobody can treat these cases as a joke anymore," said Elliot Schrage, a senior fellow at the Council on Foreign Relations who lectures on the litigation trend at Columbia University's business and law schools.

U.S. business groups and the Bush administration have pressed the courts to turn back the tide of litigation from abroad, and other experts said a settlement in such a high-profile case could encourage lawyers to file more and broader human rights abuse suits. "Major multinationals are terrified," said Susan Aaronson, director of the Kenan Institute's Washington Center for Globalization Studies. "They are absolutely terrified."

For eight years, Unocal vigorously defended itself against the claims that it turned a blind eye to violent acts allegedly committed by soldiers assigned to guard the pipeline, in which Unocal is a partner with the French oil company Total and the military junta that rules the country formerly known as Burma. Unocal was steadfast in its argument that it shouldn't be held liable for alleged abuses by the soldiers but acknowledged that they had a role in securing the pipeline corridor.

On Monday, in the statement issued jointly with the plaintiffs' lawyers, Unocal didn't refer to its legal defense. A Unocal spokesman said a confidentiality agreement between the two sides prevented him from elaborating on the statement. Daniel Petrocelli, the head of Unocal's defense team, didn't return calls.

The plaintiffs' lawyers said they were pleased with the outcome. "We're thrilled," said Katie Redford, co-founder of EarthRights International, a human rights organization that helped the villagers file suit. The statement, 123 words long, quoted Unocal as reaffirming "its principle that the company respects human rights in all its activities and commits to enhance its educational programs to further this principle."

Heidi Quante, a representative of the Burma Project in San Francisco, said the fact that Unocal had reached an agreement "speaks louder than any words they've spoken heretofore." "You would not settle if you did not think you were guilty," she said.

The agreement is expected to be finalized in a month or two. The company and the plaintiffs are to report back to the 9th Circuit Court if the negotiations drag on past Feb. 1. Unocal wouldn't be the first U.S. company to resolve a human rights case out of court. In 2002, for example, dozens of retailers, including Gap Inc. and Abercrombie & Fitch Co., settled suits filed in U.S. courts by factory workers from Saipan who claimed that they made clothes in sweatshops.

In the Unocal case, the plaintiffs, who lived in the remote region near the pipeline, allege that they and their relatives were forced to help clear a path through thick jungle for the project, laboring in tropical heat with little rest, food or water. They claim that the soldiers were brutal, murdering a baby to retaliate for her father's escape from forced labor and raping a girl and her great-aunt, who had ventured close to the pipeline to retrieve a pig for a Christmas feast.

Out of fear for their safety, the plaintiffs live in hiding in Southeast Asia. They were allowed to file suit in the U.S. as John and Jane Does to protect their anonymity. In interviews with The Times two years ago, several of them recounted what they suffered during the construction of the pipeline project. "Until the pipeline came, we were free," the plaintiff known as Jane Doe 1 told The Times. "Burmese soldiers were fairy tales. We never saw them. But they came with the pipeline."

The resolution of the Unocal case could shape the futures of the suits pending against the other corporations. All of them were filed under the Alien Tort Claims Act, a 215-year-old law revived in the late 1970s to bring suits in the U.S. against foreign dictators and multinational corporations over alleged abuses abroad. Two years ago, a three-judge panel of the U.S. 9th Circuit Court ruled that Unocal should face trial, saying it found reason to believe that the company "gave assistance and encouragement to the Myanmar military." The company had been appealing the ruling.

In June, in another case, the U.S. Supreme Court upheld the Alien Tort Claims Act, ruling that foreigners could file lawsuits in U.S. courts to address some human rights abuses overseas. The high court didn't, however, spell out whether corporations could be held liable for an indirect role in such abuses.

The other human rights suits pending against multinational companies involve alleged abuses in Colombia, Indonesia, Nigeria and other countries with poor human rights records. China, the world's most populous country and increasingly a key manufacturing partner for American producers of a host of goods, isn't on the list. The Kenan Institute's Aaronson said a Unocal settlement could add to the worries of U.S. companies doing business there. "Every company feels it has to be in China, but they have no real means of controlling their multitude of suppliers," she said. "So that's the new frontier."