May 13, 2002

Lawsuits Target Energy Giants: Voluntary Principles

By Jennifer Huang | World Power I: Business & Law

Page 11 of 11

Opposing sides of the lawsuits paint radically different pictures. Depending on who you listen to, the energy companies are either corrupt, ruthless and complicit in human rights abuses, or hard-working, well-meaning investors who were ignorant of the crimes or powerless to stop them.

Though plaintiffs will probably wait for years for the final rulings, many observers see the cases as damning.

“This case would not have gotten this far unless there were all sorts of evidence — frankly from people who were involved militarily — who subsequently came to people like Oronto [Douglas] and said, ‘I need to tell my story,'” said Michael Watts, director of the Institute of International Studies at the University of California, Berkeley.

“These are not corporations being sued because they happen to be doing business in a bad place,” said Steinhardt. “They are doing business in a way that requires human rights violations for profit … What we know is that there are some best practices that other corporations miraculously manage to abide by without killing people or displacing them without compensation, taking their farmlands or taking their ability to support themselves, or breaking up families or forcing them into labor and the like.”

Under increasing public pressure and negative publicity, some defendants have gone on the offensive to rebuild their public image and confront the human rights issue head-on.

In July 2001, The Guardian reported Shell’s housecleaning in response to the negative publicity generated by Saro-Wiwa’s death: the incorporation of human rights considerations into its business practices, the publication of an annual report on ethics and the establishment of a committee on social responsibility.

Ledum Mitee, acting president of MOSOP (Movement for Survival of the Ogoni People), dismissed the changes as cosmetic and insignificant.

“The change in rhetoric from Shell over the years has not been matched by a change in actions in Nigeria,” he told the Guardian. “Shell is excellent at public relations but it is terrible at turning words into reality.”

In fact, as part of its effort to be a responsible corporate citizen, Shell signed the Voluntary Principles on Security and Human Rights for extractive transnational corporations, unveiled in December 2000 by the U.S. State Department.

The guidelines, drawn up with consultation from Amnesty International, Human Rights Watch and International Alert, call upon companies to review and consider the risks of operating in a particular country, and their relationships with security forces and host governments.

Co-signed by Chevron, Texaco, BP, Freeport McMoRan and others, the document states, “Companies recognize a commitment to act in a manner consistent with the laws of the countries with which they are present, to be mindful of the highest applicable international standards, and to promote observance of applicable international law enforcement principles.”

It encourages transparency and accountability, including monitoring the use of company equipment, not hiring forces with a known record of human rights abuses, and clarifying a human rights policy to security forces from the outset.

The principles were the brainchild of former deputy secretary of state for democracy, human rights and labor, Bennett Freeman.

“I was struck by the kind of problems that oil and mining companies ran into in certain countries, above all, Nigeria, Indonesia and Columbia, and the whole range of problems related to governance and development broadly,” he said. “More specifically the rule of law, and lack of transparency, and rampant corruption … and particularly human rights abuses in connection with security forces.”

Freeman felt whether the allegations were true or not, they were potentially damaging to the oil industry, and thus to the global image of the U.S.

“So often these large companies are the face of America to the world, particularly in remote regions,” he said. “It seemed to us that we could advance the human rights rule of law and good governance agenda by finding ways to work with our companies.”

The former State Department official did not question the presence of American corporations abroad.

“We operated from the premise that broad American interests are served by having our companies operate in countries like Nigeria, Indonesia and Columbia,” he said. “But … they need to … navigate risks to human rights and risks of being seen [as] complicit with human rights abuses. That’s not the in the company’s interests or the U.S. government’s interests.”

Though Freeman said that the impact of the principles is still “too early to tell,” Kurt Biddle of the Indonesia Human Rights Network said the document lacks teeth.

“On the one hand, it’s a good thing to establish some guidelines,” he said. “But look at the name, it’s voluntary. There is no enforcement, no reporting, no way of understanding what impact that they have had or haven’t had … Anyone can sign onto a piece of paper.”

The U.S. and British governments participated in developing the principles. But activists note that several corporations chose not to participate.

“Very pointedly, both ExxonMobil and Unocal declined to participate in that process,” Collingsworth of the International Labor Rights fund said. “They couldn’t have agreed to those principles because they knew they were in violation of them. There’s no other explanation.”

Steinhardt said that Unocal had wanted to join the process but was excluded, giving “a pretty decent indication that at least someone in the government doesn’t think that all corporations are acting equivalently.”

Only time will reveal whether the principles or the lawsuits will actually make a difference. Some, like Bennett Freeman, are hopeful, and Ken Wiwa, in the midst of a lawsuit against the corporation he believes helped plan his father’s death, is even optimistic.

“If governments are sincere and companies are sincere, they can be part of a vanguard for change,” he said. “I can see a company changing its culture. If it doesn’t, then we’re all doomed.”

But according to Judith Chomsky, “[The corporations] could also say, ‘Well, we’re going to create more legal obstacles for liability,’ like separating themselves further from their subsidiaries in the host countries.”

Others echo her doubts.

“It’s always been an industry in which it used its power and wealth to get away with whatever it can,” said the University of California’s Michael Watts.

For Oronto Douglas the problem is the lack of self-determination in the affected regions.

“Let the communities and people be in control of the land, and decide whether Shell should drill or not drill. Then the bottom would be knocked out of the argument,” he said.

In Indonesia, after a long interval of deadlocked peace talks amid ongoing violence and assassination, the situation evolved on May 10, 2002, with the announcement of an agreement to work towards a cease-fire between Jakarta and GAM.

But both parties remain sharply divided on the ultimate issue of Acehnese independence — and the murder of Jafar Siddiq Hamzah remains unsolved.

When asked about ExxonMobil’s relationship with the Indonesian military and government, company spokeswoman Trisha Perkins said, “it’s a very complicated, complex, very sad situation. It’s just not something we can comment on.”

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