Oil giant Unocal has settled out of court in two lawsuits filed in the United States by villagers in Myanmar who allege the company benefited from human rights abuses they suffered during the construction of the Yadana gas pipeline.

The 15 unnamed villagers sued Unocal in 1996, claiming the company should be held liable for murder, rape, torture, extortion, forced labor, and the forced relocation of whole villages allegedly perpetrated by the Myanmar military during construction of the $1.2 billion Yadana pipeline.

The pipeline, which carries gas from the Yadana gas field in the Andaman Sea to Thailand through Myanmar, or Burma, was completed in 1998.

Yadana pipeline under construction (Photo courtesy Earth Rights International (ERI))

Alleging that they were forced to work on the pipeline against their will The villagers filed lawsuits in California state and federal courts. Terms of the "settlement in principle" were not announced, but it is certain to be a multi-million dollar figure.

In a joint announcement Monday, Unocal and Earth Rights International, representing the plaintiffs, said the settlement, "will compensate plaintiffs and provide funds enabling plaintiffs and their representatives to develop programs to improve living conditions, health care and education and protect the rights of people from the pipeline region."

"These initiatives will provide substantial assistance to people who may have suffered hardships in the region," according to the joint statement.

Unocal reaffirmed its principle "that the company respects human rights in all of its activities and commits to enhance its educational programs to further this principle." Plaintiffs and their representatives reaffirmed their commitment to protecting human rights.

The abuses are alleged to have arisen when the companies contracted with the Myanmar military regime to provide security for the Yadana project. Earth Rights International said it has documented "a pattern of systematic human rights abuses and environmental degradation" on the part of the military on the Yadana project.

Earth Rights International says the pipeline project brought increased illegal hunting, logging, and wildlife trade to the previously isolated Tenasserim region.

Tiger poached along the Yadana pipeline route. All tigers are classified as endangered and protected under international law. (Photo courtesy ERI)

Unocal has repeatedly attempted to get the lawsuits dismissed. On the state level, in mid-September a California state judge rejected a new Unocal appeal for dismissal, clearing the way for a jury trial to begin. Unocal apparently decided to settle the case rather than endure a trial by jury.

The settlement was announced days ahead of a scheduled hearing of the federal case before the full panel of the Ninth U.S. Circuit Court of Appeals. The hearing was canceled at the request of both parties.

The federal court set a February 1, 2005, deadline for both sides to file a joint status report on whether a settlement had been finalized.

The lawsuits were brought under an old law that was not used until recently - the Alien Tort Claims Act of 1789. Originally aimed at acts of piracy, this law allows victims of international human rights abuses to sue in U.S. courts.

The legal action was brought against Unocal on the grounds that the company benefited from the military's behavior even if it did not participate in it or endorse it.

There have been fears on the part of the U.S. government and business associations that if the action succeeded, it could lead to a host of similar claims by indigenous peoples around the world whose lands had been used for pipelines or oil drilling carried out by multinational corporations based in the United States.

John E. Howard, vice president of international policy and programs at the U.S. Chamber of Commerce, says the Alien Tort Claims Act (ACTA) is being misused and should be repealed.

In October 2002, he wrote, "Expansion of this problem into the international arena via ATCA promises nothing but trouble for U.S. economic and foreign policy interests worldwide. This is why ATCA's misuse must be checked - and efforts to obtain its repeal must begin - now! U.S. national interests require that we not allow the continuing misapplication of this 18th century statute to 21st century problems by the latter day pirates of the plaintiffs' bar."

For its part, Total says, "We deeply regret how the situation in Myanmar is developing." Jean du Rusquec, head of mission, Myanmar, says the company considered withdrawing from the Yadana project, although no European or international law requires it to do so, but decided to stay.

Jean du Rusquec is Total's head of mission for Myanmar. (Photo courtesy Total)

But, said du Rusquec, poverty gives rise to human rights abuses, and the Yadana gas project is not only lucrative for Total, it produces financial benefits for Myanmar and the local villagers. "We firmly believe that a country's economic development is intrinsically linked to its human rights record," he said.

Total's position of "political neutrality" in Myanmar "does not mean that we are indifferent, especially on issues related to human rights, environmental protection and development," he said. "We are developing the country's natural gas resources using efficient methods consistent with the principles of sustainable development."

Earth Rights International warns that another Yadana is in the making.

In January 2004, with the approval of the Myanmar government, a consortium of South Korean and Indian companies announced plans to develop a largenatural gas field in the Gulf of Bengal, off the country's west coast.

This new project, known as Shwe, which means “gold” in Burmese, is still in its early planning stages.

In Earth Rights International’s view, "an alarming number of similarities already exist between the Yadana Pipeline and the proposed Shwe Pipeline. If nothing is done, it appears likely that history will repeat itself. Forced labor and human rights abuses are still an ongoing problem throughout Burma, and it can be assumed that these violations will continue at any major development project site."

Earth Rights International was founded by Ka Hsaw Wa, a Burmese activist and his wife Katie Redford, a human rights attorney. A Goldman Prize recipient in 1999 for his work in bringing the Yadana pipeline abuses to public attention, Ka Hsaw Wa has interviewed more than a thousand victims and witnesses of human rights and environmental abuses, and brought their stories to light.