On October 27, a far-reaching trial against the Chevron Corporation is set to open in San Francisco. Ten years ago, the Nigerian military shot at tribal protestors on a Chevron drilling platform in the Niger Delta. The case explores the company’s alleged complicity in killing one man and injuring three others. The suit was brought under the alien tort statute, which allows U.S. recovery for
overseas violations of the law of nations. In recent years there have been only a flurry of cases brought against corporations under the statute, which dates to the eighteenth century. But the plaintiffs bar is still gunning for its first trial victory on the theory of “corporate alien tort.”
The Chevron suit is one of nine cases against oil, gas, and mining companies, representing about a quarter of active corporate alien tort claims, according to Beth Stephens of Rutgers School of Law who tracks these cases. Directly or indirectly, Big Oil and Big Mining are accused of ethnically cleansing the Christians of Sudan, hanging a Nobel Peace Prize nominee in Nigeria, ordering a hit on Colombian union leaders, and killing 2,000 children in Papua New Guinea by blocking the delivery of vaccines to a rebel island. Some industry attorneys dismiss these claims as the fevered imaginings of global ambulance chasers. But, putting aside the merit or prospects of each case, there’s no denying the inherent risks of abuse in the business of extraction.
The extractive industries have been the chief target of alien tort claims from the moment plaintiffs decided that corporations were fair game. Originally passed in 1789 with the Barbary pirates in mind, the Alien Tort statute was reimagined by public interest lawyers in the 1980s as a weapon against individual human rights abusers, such as Philippine dictator Ferdinand Marcos. The first alien tort suit against a corporation was filed in 1993, against Texaco Inc. (now part of Chevron) for pollution of the Amazon jungle. (That claim was thrown out of the U.S. on forum non conveniens grounds, and still languishes in an Ecuadorean trial court.) A suit brought against Unocal Corporation in 1996 survived pretrial motions. However, it settled in early 2005, for a reported $30 million, before a jury could hear testimony on the alleged murder, rape, and enslavement of villagers by security forces guarding Unocal’s gas pipeline in Burma. Unocal was acquired later that year by Chevron.
Suing dictators and generals under alien tort has long been a favored pro bono cause of some defense law firms. But as the act began to stalk corporations, it also began to attract private plaintiffs’ lawyers. In a report last year for the National Legal Center for the Public Interest, a pro-business group that is now part of the American Enterprise Institute, DLA Piper partners Arthur Fergenson and John Merrigan argued that alien tort has been embraced by “profiteering trial lawyers, whose sole motivation is to produce large scale money damages.”
However, most of the extractive cases, like the one against Chevron, have been brought by alliances between nonprofit organizations and private lawyers, many of whom have roots in the public interest world. Such alliances are necessary, say the nonprofit lawyers, to match the deep pockets of major defense firms; and, they say, their cases are chosen for public impact.
While some alien tort claims are flimsy, those cases tend to be weeded out by the courts. Rutgers’s Stephens has counted 185 cases brought since 1980 under the ATS or the allied Torture Victim Protection Act; of those, 123 were finally dismissed, and only 19 led to plaintiff wins. “There’s no question the vast majority of alien tort cases are junk,” says Jonathan Drimmer of Steptoe & Johnson, who has no involvement in any of the oil or mining suits. “But most of these [extractive] cases match what the statute was designed to do, from an allegation standpoint.” Professor Chimene Keitner of Hastings College of Law agrees: “Serious international crimes committed by state security forces on behalf of the extractive industries are clearly within the scope of the statute.”
Of course, an allegation is only an allegation, and the defendants hotly dispute every claim on these pages. Chevron, for instance, paints a different picture from the caricature of Big Oil in cahoots with a repressive state. Its lawyer, Robert Mittelstaedt of Jones Day, says that the people killed by Nigerian forces were essentially pirates: A band of 150 armed men, he says, forcibly boarded a Chevron platform with the intent of holding the workers hostage, and shaking down Chevron for money and jobs.
Arvind Ganesan, who heads the business and human rights program at Human Rights Watch, which is not involved in any litigation, says the multiplicity of extractive suits does not reflect plaintiff greed or imagination-but the reality of an industry operating in conflict zones. “What I think this reflects is that there are some pretty serious abuses going on,” he says.
Unlike retailers or manufacturers, natural resource companies have no choice but to go where the commodities are. And for reasons well-known to political scientists, extraction zones are frequently conflict zones. Oil states militarize to guard the money spout, and fail to democratize because they don’t need to answer to taxpayers. International investment leads to social tensions over land claims, environmental degradation, the distribution of profits and employment, and local participation in the decision process. Often, these issues are overlaid by ethnic tensions between the group in power and the group that lives atop the resource. Pity the company that enters such a hornet’s nest.
“The easiest way to avoid an alien tort suit is to not engage in behavior that will get you sued,” says Human Rights Watch’s Ganesan. “And there are some pretty definitive patterns emerging as to what will get you sued.” Steptoe’s Drimmer, who, like many alien tort specialists, devotes part of his practice to compliance, advises companies to create a code of conduct and carefully define relationships with partners, contractors, and states.
Many mining and oil companies have already taken steps in this direction. Defendants in eight of the nine extractive alien tort cases have signed a government-sponsored industry code, known as the Voluntary Principles on Security and Human Rights. (The exception is Drummond Company, Inc., a privately held Alabama coal miner, which last year was exonerated by a jury of alien tort violations in Colombia.) Drafted in 2000, likely with alien tort in mind, the Voluntary Principles call for companies to monitor, investigate, and mitigate human rights abuses by armed groups that guard its facilities.
The London-based nonprofit Global Witness laments that the Voluntary Principles lack a mechanism to track compliance, but praises BP p.l.c. as one multinational that takes them seriously. BP has hired Boston-based Foley Hoag to monitor its compliance with the Voluntary Principles at the Tangguh liquefied gas project in the Caucasus. BP also embeds the code into its contracts with the security forces protecting Tangguh and the Baku-Tbilisi-Ceyhan pipeline (which suddenly finds itself in a conflict zone). Perhaps it is no coincidence that BP is the only one of the world’s top four international oil companies not to be named as a defendant in a pending alien tort suit targeting the oil giants.
Talisman Energy Inc. (which began life as BP-Canada) took the ultimate voluntary step, when it sold its Sudanese oil holdings under pressure from an alien tort suit and a divestment campaign that depressed its stock. However, the Indian national oil company that bought the Sudanese holdings is largely beyond the reach of alien tort due to sovereign immunity, and is relatively insulated from public pressure. Moreover, no state oil company outside Norway has adopted the Voluntary Principles.
The claim against Talisman, which was dismissed on summary judgment, is one of six extractive alien tort suits now under appeal in the federal circuit courts. It is tempting to play the parlor game of guessing which case (if any) the U.S. Supreme Court will take as its opportunity to finally define the corporate alien tort. But a suit arising out of South African apartheid, which many picked to be the one, proved in May that predicting litigation is a fool’s game. In that case, the Supreme Court was unable to grant certiorari, for the unprecedented reason that four justices were personally invested in a defendant’s stock.
Rather than guessing, court-watchers can follow the Chevron case. There’s blood in the oil of the Niger delta. A jury now gets to decide who spilled it.
-Additional reporting by Daphne Eviatar