The United States oil giant Unocal sought to deny responsibility yesterday for alleged murders, rapes and torture associated with an oil pipeline project in Burma.
The case is being seen as a legal landmark for human rights campaigners wanting to hold multinationals accountable for their business decisions.
Unocal, which has been based in California for seven years, argued that the case should never have come to court in the US because responsibility for criminal behaviour associated with the $1.2bn pipeline lay with its subsidiaries in Burma.
Daniel Petrocelli, the lawyer who represents Unocal, told a Los Angeles district court: "If the subs can pay, the case goes away. That's the beginning and end of this trial."
The plaintiffs argue that Unocal is responsible for alleged atrocities by the Burmese military along the Yadana natural gas pipeline, which stretches from the Andaman Sea to the border with Thailand.
They say that the subsidiaries have no autonomy and provide the parent company with no legal protection.
Judith Chomsky, the lawyer who represents one of the plaintiffs, said: "These are sham corporations created solely to allow Unocal to hide from liability."
One of the other plaintiff lawyers, Terry Collingsworth, told the court: "The plaintiffs sued the right parties because the Unocal parents are responsible for what happened to them.... This is not about who you collect from, it's about whose responsibility this is."
This is the first time a corporation has stood trial in the US for alleged offences in another country.
The plaintiffs - 14 Burmese villagers, whose identities have been kept secret, and a US campaigner for the group Earth Rights International - are invoking an ancient US tort law used to combat piracy.
The Alien Tort Claims Act of 1789 has, more recently, been used against disgraced generals and deposed despots such as Ferdinand Marcos and Radovan Karadzic.
It is being adapted to pursue corporations on the basis that they are liable for criminal activity carried out in their name.
The outcome of the Unocal trial could have profound implications for dozens of corporations accused of tolerating human rights abuses in remote areas of the Third World.
The case has already spooked the White House, which has filed a friend-of-the-court brief on Unocal's behalf arguing that the suit is a threat to its war on terrorism.
The Bush administration has a policy of active support of overseas energy projects by US corporations, many of whom have been generous Bush campaign donors.
Ordering Unocal to stand trial in August, the California district judge Victoria Chaney appeared to agree that Unocal knew what it was getting into.
She said: "Prior to its involvement... Unocal had specific knowledge that the use of forced labour was likely, and nevertheless chose to proceed."
Judge Chaney has already ruled that the case cannot be tried under Burmese law, siding with the plaintiffs' argument that since the establishment of military rule there in 1988 there is no "effective rule of law".
She has also dismissed the suggestion that the case should go to Bermuda, where one of the Unocal subsidiaries in question is registered.
The trial is expected to proceed in two phases. The first, which began on Tuesday, will determine whether Unocal is liable for the behaviour of its subsidiaries.
The second, which will go ahead regardless of the outcome of the first, will look at alleged ties and responsibilities linking events in Burma directly to Unocal executives.
The case was first brought in 1996 and the delay in initiating a trial is an indication of how hard Unocal has fought to counter the accusations.
It has appealed every ruling and the legal battle is likely to reach to the US Supreme Court if the case is not dismissed before then.
Dan Stormer, who represents another of the plaintiffs, said: "Unocal has repeatedly tried to stop this case from going to trial and has lost at every turn."Reuse content