The Alien Torts Statute and the search for energy in difficult political environments.

I. INTRODUCTION

II. THE OPERATING ENVIRONMENT III. THE LAW

IV. THE CASES

A. The Doe v. Unocal Corp. Case

B. The Presbyterian Church of Sudan v. Talisman

Energy, Inc. Case

1. The Facts

2. The Law

V. CONSPIRACY UNDER THE ATS 302

VI. AIDING AND ABETTING UNDER THE ATS VII. CAUSATION VIII. CONCLUSIONS

IX. PRACTICAL PROPOSALS

I. INTRODUCTION

The need to satisfy the world's ever growing thirst for energy drives both American and foreign energy companies further than ever before to accept risks that would not have been considered acceptable previously. Initially, the risks were primarily technological in nature. Energy companies drilled deeper and deeper onshore at greater risk and cost to unlock reservoirs of petroleum and natural gas previously considered technologically unfeasible or uneconomic. Thereafter, the industry took its exploratory efforts offshore into shallow, and then deeper, waters. Now, the Gulf of Mexico and other mature offshore energy basins are populated by standing and floating platforms, both manned and unmanned, all fully automated, producing thousands of barrels of oil and millions of cubic feet of natural gas each day to meet the world's demand.

The energy industry's willingness to accept risk has not been limited to technological issues, however. As energy reserves become depleted, the difficulty in finding new reserves of energy has increased. Energy explorers have had to expand the scope of their search to places far from the safe political confines of the Gulf of Mexico. This expansion has taken explorers from the North Sea to Eastern Europe, from the tundra of Western Asia to the warm seas of Southeast Asia, from the East Indies to the West Indies, from Patagonia to Mexico, and from Libya to South Africa. This exploration has borne fruit. Millions of barrels of oil and trillions of cubic feet of natural gas have been discovered in basins great and small around the world as a result. Accompanying these discoveries, however, are safety issues for assigned personnel, security issues for onsite assets, political risk for investments, and hazards resulting from working with or for governments deemed by world opinion to be violating international law.

While not exclusively so, most modern concession contracts between host governments and energy companies are referred to as "Production Sharing Contracts." These agreements take many forms. Fundamentally, however, they authorize the energy concessionaire to explore for and produce oil and gas within a specified geographical contract area. Upon discovery and production of energy resources within the contract area, the host government becomes entitled to receive a portion of the net production after allowing the concessionaire to recover from the sale of produced hydrocarbons some or all of its costs of exploration, production, and operation. The contract often provides that in return for receiving a share of the production, the host government agrees to provide certain services to assist the concessionaire in the operation and maintenance of the contract area. These services include the provision of road and pipeline rights-of-way, water for operations, and, most importantly, security for operations in and around the contract area. This latter obligation on the part of the host government is, to a greater and greater extent, becoming the source of serious risk to the international energy industry.

II. THE OPERATING ENVIRONMENT

Geology is blind to politics and world strife. While inexplicable and utterly illogical, it has long been believed in the international energy industry that the larger the energy reserve discovered, the larger the political and safety risk to be encountered. Such was the situation in two recent cases discussed hereafter. In Presbyterian Church of Sudan v. Talisman Energy Inc., a Canadian corporation was striving to produce discovered oil pursuant to a production sharing contract whose contract area was located in Darfur. (1) Darfur, positioned in the southwestern region of the Sudan, has been the site of a bloody civil war for over twenty years.(2) The Sudanese government's handling of the civil war has resulted in charges of ethnic cleansing, forcible relocation, torture, and crimes against humanity.(3) Doe v. Unocal Corp. involved a claim that Unocal should be held liable "for international human rights violations perpetrated by the Burmese military in furtherance and for the benefit of' a pipeline construction project in which Unocal was a participant.(4) Among the specific charges made against Unocal were complicity with the Burmese military in forced labor, physical violence, and involuntary relocation. (5) Myanmar, formerly Burma, was the host nation for Unocal's production and pipeline transportation of natural gas produced from the Andaman Sea, offshore Myanmar. (6) In both of these cases, a western energy company was charged in a U.S. court with violations of the Alien Tort Statute (ATS) as a result of acts carried out by the military arm of its host government overseas. (7)

III. THE LAW

The Alien Tort Statute provides: "The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States." (8) "To state a claim under the [ATS], a plaintiff must allege (1) a claim by an alien, (2) alleging a tort, and (3) a violation of the law of nations (international law)." (9)

IV. THE CASES

A. The Doe v. Unocal Corp. Case

The plaintiffs in this case were fifteen villagers from the Tenasserim region of Myanmar. (10) The defendants, at the time their motions for summary judgment were filed, included Unocal Corp., Union Oil Company of California, and two Unocal executives. (11) This Article will refer to the defendants jointly as Unocal. The plaintiffs brought the case under the ATS. (12)

At the time of the litigation, Unocal owned an undivided interest in a production sharing contract covering acreage in the Andaman Sea, offshore Burma. (13) The acreage produced natural gas, and it became necessary for the participants in the venture to construct a pipeline across a portion of southern Burma to deliver the gas to market in Thailand. (14) The plaintiffs alleged during the course of the pipeline construction, Unocal committed various torts in violation of international law. (15) The charges against Unocal derived from acts of the Burmese military in providing security and logistical assistance to Unocal in connection with the construction of the pipeline. (16) Among the torts alleged were various human rights violations including forced labor, torture, and involuntary relocation. (17)

Commencing its analysis, the trial court listed what, in its opinion, comprises the elements of a cause of action under the ATS. "To state a claim under the [ATS], a plaintiff must allege (1) a claim by an alien, (2) alleging a tort, and (3) a violation of the law of nations (international law)." (18) Unocal conceded the action was a claim by one or more aliens alleging one or more torts. (19) The case turned on whether Unocal could be charged with a violation of international law. In determining this question, the court followed the Second Circuit's reasoning in Kadic v. Karadzic, quoting from that opinion, "[t]he norms of [international law] are found by consulting juridical writings on public law, considering the general practice of nations, and referring to judicial decisions recognizing and enforcing international law." (20) Further, the court adopted the Second Circuit's holding in Filartiga v. Pena-Irala with the effect that "[a]ctionable violations of international law must be of a norm that is specific, universal and obligatory." (21) But then, the court went one step further and held that "[w]hen ascertaining the content of the law of nations, the [c]ourt must interpret international law not as it was in 1789 (the year the [ATS] was enacted), but as it has evolved and exists among the nations of the world today." (22)

Unocal argued only violations of international law that rise to the level of a jus cogen violation are actionable under the ATS. (23) The court pointed out that common customary international law--the law that rests upon the consent of the states--is not binding upon a state refusing to agree to it. (24) On the other hand, "[Jus cogen] norms, norms derived from values taken to be fundamental by the international community, enjoy the highest status within customary international law and are binding on all nations." (25) Agreeing with Unocal in some respects, the trial court held only jus cogen norms are actionable under the ATS. (26) The defendants, however, could take little comfort from this holding because the court went on to state "[i]t is well accepted that torture, murder, genocide and slavery all constitute violations of jus cogen norms." (27)