On October 16, 2007, Judge Elizabeth Grimes of the Superior Court of California in Los Angeles rejected Chevron’s attempt to force its insurers to reimburse the company for the compensation it paid to victims of egregious human rights abuses committed on its gas pipeline project in Burma. The original partner in the project was Unocal Corp., which Chevron acquired in 2005. The abuses were committed by Chevron/Unocal’s partner, the brutal Burmese military, and the compensation was paid to settle the landmark human rights case, Doe v. Unocal. When Unocal’s insurers refused to reimburse Unocal for the settlement, forcing Unocal to pay the compensation itself, Unocal sued them. In Tuesday’s decision, the Court found that the pattern of pipeline abuses alleged by the victims in Doe v. Unocal amounted to “military terrorism,” and therefore Unocal could not be reimbursed.
In the wake of the recent, violent crackdowns on peaceful protestors in Burma, Chevron’s operations in Burma have received renewed attention. Chevron, through its takeover of Unocal, is a partner with the Burmese military junta in the notorious Yadana natural gas pipeline project, which provides hundreds of millions of dollars to the regime annually. The construction and operation of the Yadana pipeline have involved forced labor and other abuses on a mass scale committed on Unocal’s behalf by the Burmese military, which continues to provide security for the pipeline.
Those abuses were challenged in Doe v. Unocal, the groundbreaking human rights lawsuits brought by victims of pipeline violence in federal and state court in California, in which EarthRights International (ERI) served as co-counsel for the plaintiffs. In a huge victory for the plaintiffs, Unocal ultimately settled the cases out of court, and agreed to compensate the plaintiffs and provide funds enabling plaintiffs to develop programs to improve living conditions, health care and education and protect the rights of people from the pipeline region.
In her ruling on the insurance case, Judge Grimes noted a Unocal official’s testimony that Unocal settled Doe v. Unocal to avoid the risk of a jury verdict finding Unocal liable for pipeline abuses. Judge Grimes held that the Doe plaintiffs, in alleging a pattern of rape, murder, torture and forced labor on the pipeline, asserted claims involving “military terrorism,” or “the systematic use of terror or intimidation by government soldiers.” She dismissed Unocal’s lawsuit seeking reimbursement, because the insurance policies at issue specifically excluded coverage for “military terrorism.”
“Unocal was complicit in crimes against humanity. Then, it tried to leave its insurers holding the bag. Unocal, now Chevron, got what it deserves,” said Richard Herz, ERI’s litigation coordinator and counsel for the Doe plaintiffs. “But although the insurers won, they were far from blameless. Everyone knew the Yadana project would involve egregious human rights violations. The insurers never should have been involved in that horrendous project in the first place.”
In addition to EarthRights International, Doe v. Unocal was litigated by the Pasadena law firm of Hadsell & Stormer, human rights lawyer Paul Hoffman, the Center for Constitutional Rights (CCR) and CCR cooperating attorney Judith Brown Chomsky. The insurance litigation is Lexington Insurance Company v. Union Oil Company of California, No. BC 360774.
