US oil firm on trial over Burma abuses

The US oil company Unocal has been ordered to stand trial to determine its responsibility for a string of human rights abuses, including rape, torture, forced labour and extrajudicial killings, arising from a pipeline project it has co-sponsored in Burma.

The ruling by the Los Angeles Superior Court marks a potential turning point in the policing of corporations overseas, since it suggests that US courts can assert jurisdiction when the events took place on the other side of the world.

The suit against Unocal is based on an ancient US tort law originally used to combat piracy on the high seas, and could have profound implications for dozens of corporations accused of tolerating human rights abuses committed while work was carried out on their projects in remote areas of the Third World.

Ordering Unocal to stand trial on 22 September, Judge Victoria Chaney rejected the company's argument that any human rights violations should be subject to Burmese, not US law. She agreed with the plaintiffs that there has been "no effective rule of law" in Burma since the establishment of military rule in 1988, making any court proceedings there "radically indeterminate".

Judge Chaney also appeared to agree with the plaintiffs that Unocal knew what it was getting into when it started the Yadana gas pipeline. She said: "Prior to its involvement ... Unocal had specific knowledge that the use of forced labour was likely, and nevertheless chose to proceed." Lawyers for Unocal said that they would appeal.

The suit has been brought by 14 villagers who allege that Unocal tolerated systematic human rights abuses by the Burmese military as the pipeline project progressed.

The pipeline, the largest single foreign investment in Burma intended to carry natural gas across the border to Thailand, is a joint venture by Unocal and Total, the French oil company, which is being sued separately in Europe. The project is being managed by Burmese subsidiaries of the parent companies.

The success of the legal channel being pursued by the Burmese plaintiffs and human rights groups such as EarthRights International has spooked the White House, which has a pursued a policy of active support of overseas energy projects by US corporations, many of whom have been generous donors to George Bush's campaign.

The White House filed a friend-of-the-court brief on behalf of Unocal, arguing among other things that the suit was a threat to the war on terrorism. In another case, it is advocating the release of institutional funds so that two well-connected Texas energy giants, Halliburton and Hunt Oil, can complete a gas pipeline project in Peru, despite widespread concerns of environmental damage.