Exxon: Torture suit sets bad precedent

Associated Press

March 8, 2006

By Slobodan Lekic

Exxon Mobil Corp. warned that a U.S. judge's decision to allow villagers to file a lawsuit against the oil giant for alleged abuses by Indonesian troops in Aceh province could set a precedent for all American companies operating abroad.

But the Irving, Texas-based company has not yet decided whether it will appeal the ruling, spokeswoman Susan Reeves said Wednesday in a telephone interview.

The Washington D.C.-based International Labor Rights Fund filed a lawsuit in 2001 on behalf of 11 Acehnese villagers who said Exxon's Indonesian subsidiary allowed its facilities to be used by soldiers to torture locals and to commit other human rights abuses.

The hearings were postponed in 2002 after the State Department said the lawsuit could harm American interests, but U.S. District Judge Louis Oberdorfer ruled last week the case could proceed.

"The lawsuit created the potential for any U.S. company operating overseas to be held vicariously liable for host government actions," Reeves said. "Such action would risk interference with U.S. foreign relations and diplomacy."

Aceh, a province of 4 million people on the northern tip of Sumatra island, has seen a series of guerrilla wars since the Dutch occupied it in the 1870s.

The latest round of fighting, which broke out in 1976 when insurgents picked up arms to carve out an independent state, claimed 15,000 lives before it ended with the signing of a peace agreement last year.

Exxon's executives had previously said the military deployed four infantry battalions and an armored cavalry unit during the conflict at a natural gas field and pipeline operated by the company on behalf of Indonesia's state-run Pertamina energy conglomerate.

"Exxon Mobil condemns human rights violations in any form," Reeves said.

She noted that a federal court last October ruled the case could not proceed under the Alien Tort Claims Act, which allows citizens of foreign countries to file lawsuits in U.S. courts for wrongs "committed in violation of the law of nations."

"There are many (legal) steps involved before the case could proceed on the basis of state law claims," she said.

However, a representative for International Labor Rights Fund hailed the ruling, saying it was important to set a precedent by which "victims of torture could hold their torturers accountable."

"We're delighted by the ruling," Bama Athreya, the group's deputy director, said Wednesday.

"We are now past the procedural hurdles and can finally proceed to the discovery stage, which means we can subpoena Exxon Mobil documents revealing how much and for how long they paid the Indonesian military."

"It's also significant that the intervention of the (U.S. President George W. ) Bush administration on behalf of Exxon has now been overcome," she said in a telephone interview.

Exxon's troubles are the latest example of the challenges U.S. firms have faced in recent years while operating in Indonesia.

Freeport-McMoRan Copper & Gold Inc. was forced to temporarily shut its mine in Papua province last month after protesters blockaded a road, demanding they be allowed to sift through the mine's waste ore.

And the American director of Newmont Mining Corp.'s local subsidiary faces a possible 10-year prison sentence for allegedly allowing the company to dump arsenic and other heavy metals into a bay on Sulawesi island.

Separately, the Denver-based company agreed last month to pay $30 million (25 million euros) in an out-of-court settlement to fund environmental monitoring and community development around its massive gold mine.