May 13, 2002

Lawsuits Target Energy Giants: The Case against ExxonMobil

By Jennifer Huang | World Power I: Business & Law

Page 5 of 11

In June 2001, the International Labor Rights Fund (ILRF) did what Jafar Siddiq Hamzah did not live to do: it filed a lawsuit in the Washington, D.C., U.S. District Court against ExxonMobil Corporation and PT Arun for hiring Indonesian military forces responsible for torture, crimes against humanity, sexual violence, kidnapping, murder and genocide in Aceh.

Lawyers also claim that ExxonMobil provided hired troops with facilities and equipment, including excavators that were used to dig mass graves, and buildings where illegally detained prisoners were tortured.

The suit requests compensatory and punitive damages, as well as an injunction to curtail ExxonMobil’s use of Indonesian security forces to protect their operations. The plaintiffs, eleven villagers from Aceh, are listed as John and Jane Does due to fears for their safety.

On its website, ExxonMobil denies any responsibility for the actions of the military: “We are disturbed by any suggestion that ExxonMobil or its affiliate companies are in any way involved with alleged human rights abuses by security forces in Aceh. ExxonMobil condemns the violation of human rights in any form and categorically denies these allegations. We are deeply troubled and highly concerned about the violence in North Aceh, and it is our steadfast hope that the political and economic turmoil in the province will be peacefully resolved.”

In its 1998 article “What did Mobil Know?” Business Week reported that massacres and mass graves were a frequent topic in the company cafeteria, and that several contractors said they discovered human remains near PT Arun facilities and reported this to Mobil managers.

“Mobil does say that it loaned the army excavators and supplied troops with food and fuel on occasions for three decades. But it insists Mobil managers had no record that the army was using this help for anything but peaceful purposes,” the magazine reported.

“We’re using the Nuremberg principles that say you can also be liable if you aided and abetted in any way these acts,” said ILRF lawyer Terry Collingsworth. “The law is clear that intent is satisfied if you were substantially certain that a certain event would occur. So if you hire the people that brought you East Timor to be your security force in Aceh, you cannot later say, ‘oh my, I didn’t know they were going to be violent.'”

Ohio State University’s Liddle agreed that once troops were called in to protect Mobil facilities, violence was a foregone conclusion.

“My knowledge of the Indonesian military is that it is incapable of acting in a professional way,” he said, “And so yes, they would engage in brutality.”

In March 2001 ExxonMobil announced it was halting operations in Aceh due to “security concerns.” The corporation had received threats, suffered attacks and a kidnapping of its employees, had shots fired upon its planes, and sustained an explosion — some said a grenade — in the PT Arun facilities.

The corporation’s withdrawal was a financial blow to the central Indonesian government, which lobbied for the quick resumption of production.

The next month, upon suspension of ExxonMobil operations, previously dovish President Abdurrahman Wahid issued Presidential Order Number 4, restructuring the military command to systematically strengthen its targeting of GAM.

Jakarta sent in more soldiers and gave the military even more authority in the region, according to Tapol. The number of troops in Lhoksukon increased to about 6,000, according to KONTRAS estimates.

Apparently satisfied with those security measures, ExxonMobil resumed limited operations that July. Total losses were $350.8 million for the four-month closure, according to the ASEAN Centre for Energy.

Though organizations like KONTRAS and SIRA feel a withdrawal of troops from Aceh is necessary to restore peace in the province, GAM activity is the main reason why troops are staying put — and ExxonMobil’s presence only complicates the situation.

“It’s our obligation to protect foreign investors, for obvious reasons,” said Djalal. Shootings, extortions, threats, even a grenade explosion have been directed at the gas fields, he explained.

“By law, anything considered a ‘strategic’ industry must be protected by Indonesian military troops,” said Sidney Jones of Human Rights Watch.

But she noted that the corporation still has to be aware of its impact, and “be alert to ways it can assure benefits from its presence goes to the community in which its based.”

ExxonMobil’s mandated use of the Indonesian police and military continues today. Time reported in August 2001, “[ExxonMobil is] required by their contract with the government to fund the troops — they have even made sure there is a clause that prohibits the soldiers from conducting any offensive operations in the field.”

Steinhardt saw the clause as innovative, “probably a way to show due diligence,” but didn’t think it frees the corporation from potential blame or liability.

Noting that troops might provoke attacks in order to claim a maneuver was “defensive,” he said, “I’m not convinced [by] this provision, in the context that it’s in, it’s not enough. Especially if it’s done with a wink and a nod.”

McCulloch estimates about 35,000 soldiers on duty throughout the province of Aceh. In a November 2001 report, KONTRAS said that more than 1,300 soldiers and police guarding the ExxonMobil facilities at Lhoksukon were paid 5 billion rupiah (U.S. $477,327) per month. The company also “provided an allowance of Rp 40,000 per day, transportation facilities, offices, posts, barracks, radios, telephones, dormitories and others equipment.”

According to Tapol, over 10,000 army and police troops are stationed in North Aceh, and villagers from Simpang Leupe “report cases of the systematic use of intimidation and extortion perpetrated by members of the security forces.”

Activists say last year’s closure and resumption of operations in Aceh exemplifies ExxonMobil’s responsibility, by demonstrating the corporation’s ability to successfully make demands of the Indonesia government.

“If ExxonMobil can demand security for itself, I don’t understand why it doesn’t demand security for the villagers,” said the IFA’s Jereski, who served as executive director for the organization after Jafar Hamzah’s murder. “It would be good for PR … I just don’t understand.”

In an email, ExxonMobil’s Perkins acknowledged the “challenging economic, social and political times, underscored by civil conflict, for many years … [T]his situation has caused extreme hardship on the people of Aceh, many thousands of whom are company employees or contractors, or involved in businesses that support or depend upon the Arun project.”

ExxonMobil has expressed concern about the security to Jakarta, she noted: “We have communicated to the government of Indonesia our opposition to human rights abuse in any form by any organization or individual, as well as our concern over the violence in North Aceh.”

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