Aceh: Lawsuit accuses Exxon Mobil of complicity in abuses

Down to Earth No 50 August 2001

The US-based oil giant Exxon Mobil is being challenged in an American court over its implication in human rights abuses committed by Indonesian troops in the war-torn territory of Aceh.

The lawsuit launched against Exxon Mobil on June 20th argues that the company must be held accountable for its part in the Indonesian military's reign of terror in Aceh, during which massacres, incidents of torture, murder, rape and "disappearances" have been carried out with impunity. Exxon - which closed down its lucrative natural gas operations in March this year due to security concerns - pays Indonesian security forces to guard its facilities. The company has been accused of providing the military with buildings used for torturing local people suspected of involvement in the Free Aceh Movement (GAM) and excavators to dig mass graves for the victims of military violence (see also DTE 39 and 40).

The lawsuit says the company bought military equipment for security forces assigned to the project and paid mercenaries to provide advice, training, intelligence and equipment in the gas project area. It says the Indonesian security forces have used company funds for military operations designed to crush dissent in Aceh and to increase capacity "to engage in repressive tactics against Acehnese separatists".

The suit was filed in Columbia district court, USA, by the Washington-based organisation, International Labor Rights Fund. The action is on behalf of eleven unnamed villagers from Aceh who suffered directly from the actions of Indonesian security forces working for Exxon Mobil and/or gas processor PT Arun. The incidents described by the plaintiffs mostly took place this or last year. One villager was accosted by troops assigned to Exxon's 113 Unit in January this year, while riding his bicycle cart to the local market to sell vegetables. The soldiers shot him in the wrist, threw a hand grenade at him and then left him for dead. The man survived, with the loss of his right hand and left eye and with several severe wounds. Another man was blindfolded and tortured over a period of three months in 2000 at the notorious "Camp Rancong" - a torture site exposed by Indonesian organisations in 1998, but evidently still in use at least as late as last year. According to the suit, after his 3-month ordeal, this man was taken outside the building and shown a pit where there was a large pile of human heads. The soldiers threatened to add his head to the pile, but he was eventually released. Shortly afterwards soldiers came and burned down his house. In late 2000, a woman plaintiff, who was pregnant at the time, was beaten and sexually assaulted by an Indonesian soldier assigned to Exxon's 113 Unit. The solider had forced his way into her house and threatened to kill the woman and her unborn child. Two of the other plaintiffs' husbands were murdered by troops and another has been "disappeared", presumed murdered. (For full text see www.laborrights.org)

Exxon Mobil denies it is responsible for the behaviour of the soldiers guarding its facilities. It says the company "condemns the violation of human rights in any form" and that it "has actively expressed these views to the President of Indonesia."

Exxon's Indonesian subsidiary, Exxon Mobil Oil Indonesia (EMOI) is 100% owned by Exxon Mobil. PT Arun, which operates the gas processing plant, is 35% owned by Exxon Mobil, 55% by state-owned oil and gas company, Pertamina, and 10% by Japan Indonesia LNG Company Ltd.

Mobil Oil Indonesia, as the company was then called, started operating the Arun gas fields in 1968. According to the lawsuit, the exclusive rights to explore for and produce gas in the area were agreed by the Suharto regime in exchange for providing the Suharto family with "blank shares" in Mobil Oil Indonesia "as well as other forms of direct and indirect payment."

Exxon Mobil, now the world's biggest oil company, reported the world's largest corporate profits in the year 2000 and was listed by Fortune magazine as the largest publicly held American corporation. The company reported around $210 billion in profits in the year 2000.

Influence
Dealing with such huge amounts means that Exxon Mobil and other transnational companies are in a uniquely powerful position to influence decision-making by governments in the countries where they operate. This is especially the case in struggling economies where cash-strapped governments are heavily reliant on the revenues generated by the companies - in Indonesia Exxon Mobil is reported to bring in around US$1 billion per year for the Jakarta government. The influence of these may also have a catastrophic impact on local people. The presidential decree ordering more troops to Aceh is widely believed to have been prompted by Exxon Mobil's closure of its Arun gas operations - (see also DTE 49). Since this move, hundreds more civilians have been killed and humanitarian organisations and human rights defenders are finding it even harder to operate.

Companies like Exxon Mobil have powerful tools for influencing decision-making in their home countries too. According to the June lawsuit, Exxon Mobil regularly publishes 'opinion editorials' in the Washington Post and other papers and engages in 'interactions' with members of Congress and the US government to promote its business interests. Exxon Mobil has also attempted to secure funding, risk insurance and security for the gas processing company PT Arun and has approached, among others, the World Bank, the Asian Development Bank, the US government political risk guarantee agency, OPIC, and the US Export-Import Bank. "Most recently," says the lawsuit, "Exxon Mobil has worked to ensure that the U.S. government would not intervene in any way in Aceh that might damage or devalue the joint business interests of Mobil and PT Arun." With the new G.W. Bush administration in the White House - known for its pro-oil industry approach - Exxon Mobil and other oil giants are set to gain even more influence.

Taking companies like Exxon Mobil to court in the US is one method that human rights groups are using to expose corporate abuse of power and draw public attention to the impact of their operations on local populations. International Labor Rights Fund's suit is one of a growing number of cases brought against corporations since the mid-1990s under the Alien Tort Act. Other recent or ongoing cases include claims against Freeport in West Papua (see DTE 40:7), BHP Chevron and Unocal. (all of which have operations in Indonesia) and Royal Dutch/Shell. Exxon Mobil's environmental record is also under attack internationally. It faces a shareholder resolution, sponsored by Greenpeace, at its next annual general meeting, which accuses the company of misleading shareholders by minimising the risks of global warming. Greenpeace, Friends of the Earth, People and Planet and other NGOs are involved in a campaign to boycott the company's Esso petrol stations around the world, until it changes its stance on global warming (see www.stopesso.com).

(Source: Complaint, 11th June, 2001 to Columbia District Court, New York Times 21/Jun/01; IPS 3/May/01; Christian Science Monitor 9/Mar/01; Frontier News 11/Jul/01. For DTE reports on Unocal and Chevron operations see DTEs 45, 47, 48 and 49)

Exxon to re-open Arun? 
The lawsuit comes at a crucial time for Exxon Mobil as it prepares to reopen its gas operations in Aceh, suspended since March 9th. In May, pipelines at the site were breached and set on fire on two occasions and the company declined to commit itself to restarting activities. The Indonesian government has put the company under intense pressure to reopen the fields in an attempt to shore up faltering business confidence in Indonesia, as well as to minimise its financial losses. In June, Pertamina president, Baihaki Hakim, said he would ask Exxon Mobil's headquarters to replace its Indonesian subsidiary's leadership if the company refused to resume operations. At the time of writing, the latest (Pertamina) estimate for reopening the operations of July 4th had passed, with no official announcement from the company. Exxon Mobil teams were only reported to have carried out maintenance work at the Aceh site.

In June it was reported by the Jakarta Post that over 2,200 military personnel were expected to be deployed along the 80 km gas production and distribution line in Lhoksukon, East Aceh, to support the resumed operations.

(Wall Street Journal 13/Jun/01; Dow Jones Newswires 15/Jun/01; Jakarta Post 29/Jun/01; UN OCHA Consolidated Situation Report 29, 15-22/Jun/2001).

Exxon Mobil's other projects
Problems at Aceh do not appear to have put Exxon Mobil off other projects. The company recently reported a major oil find at its Cepu project in Java, estimated at 250 million barrels. Negotiations are underway with state-owned Pertamina to decide on shareholdings. Production is expected to start at 25,000 barrels per day (bpd) in 2003 increasing to up to 100,000 bpd by 2004.

The company also holds a 70% interest in the D-Alpha gas field in Natuna, Riau province. Recoverable reserves are estimated at 46 trillion cubic feet. The project has been on hold since the onset of the economic crisis in 1997, but negotiations are now underway to revive a deal to pipe the gas to Thailand. (Jakarta Post 10/May/01; Dow Jones Newswires 12/Jun/01, 15/May/01)