ExxonMobil Violations in Indonesia

ExxonMobil’s operations in Indonesia:

Aceh is located on the northern tip of the Indonesian island of Sumatra. The region is rich in natural resources such as oil and natural gas. In 1992, it was reported that Aceh provided 15% of Indonesia's total exports, and the value of the oil and gas fields was estimated in 2003 to generate US$1.2-1.5 billion annually.

History of the Aceh gas fields:

In 1968, Mobil began operating the Arun gas fields, which are owned by the Indonesian state oil company, Pertamina. In 1971, Mobil Oil Indonesia discovered massive reserves of natural gas in north Aceh, which led to the creation of the Lhokesemawe Industrial Zone (ZILS.) After Exxon bought Mobil in 1999, the merged company, which is based in Irving, Tex., took over the management of Arun. The gas fields there, until their closing in March, contributed to the Indonesian budget with about $1 billion in revenue annually. Aceh, the home for the natural gas field has been witnessing an armed resistance organized under the banner of the Free Aceh Movement. From 1989 to 1998, the Indonesian government designated Aceh as a Military Operation Area, with thousands of troops assigned to defeat the armed independence force.

Exxon Mobil’s role in the region:

Exxon Mobil Corporation, along with its predecessor companies, Mobil Oil Corporation and Mobil Oil Indonesia hired military units of the Indonesian national army to provide security for their gas extraction and liquefaction project in Aceh, Indonesia. Members of these military units have been accused of perpetrating human rights abuses against local villagers. ExxonMobil was accused of not taking any proactive measures against these activities by the security forces employed by them. But fearing for the lives of its employees after a series of attacks, Exxon Mobil, the world's largest oil company, shut down its Arun natural gas operations in Aceh in March 2001.

The Litigation

The International Labor Rights Fund has taken on the challenge of seeking justice for local victims of these abuses. On June 20, 2001, ILRF filed an ATCA claim in the Federal District Court for the District of Columbia, No. 01-1357 CIV, on behalf of 11 villagers from Aceh who were victims of human rights abuses by Exxon Mobil's security forces. The general theory of the case is that Exxon Mobil knowingly employed military troops to protect its operations, and the company aided and abetted the human rights violations through financial and other material support to the security forces. In addition, the case alleges that the security forces are either employees or agents of Exxon Mobil, and thus Exxon Mobil is liable for their actions.

The legal proceedings:

Exxon Mobil filed a routine motion to dismiss ILRF's claim, and ILRF filed a response against this motion on December 14, 2001. The court heard arguments in the case on April 9, 2002, and a decision was expected to be made within 60 days but it is yet to be made. In 2004, the presiding judge in the case asked for additional briefing on the impact on ILRF's case against ExxonMobil of the Supreme Court's decision in Sosa v. Alvarez-Machain, in which the Supreme Court upheld the use of the Alien Tort Claims Act in cases like ILRF's ExxonMobil suit. ILRF filed its brief in the case in August 2004. The parties continue to await the court's decision on the motion to dismiss.

Exxon Mobil’s Response:

The company denies these accusations and filed a motion to dismiss the suit, which is still pending. Exxon Mobil's primary defense is that the human rights violations which were occurring were not a result of specific intention of the organization and therefore cannot be held liable. In 2002, ExxonMobil issued an initial press release concerning the pending litigation in US District Court involving their operations in Aceh, Indonesia, which have been accused of malfeasance against women. ExxonMobil stated: “We are disturbed by allegations that ExxonMobil or its affiliate companies are in any way involved with human rights abuses in Aceh, and will continue to vigorously defend ourselves. ExxonMobil condemns the violation of human rights in any form. We believe the lawsuit filed by the International Labor Rights Fund (ILRF) containing these allegations is without merit. There is no claim of direct wrongdoing by ExxonMobil. The ILRF claims are based on the alleged conduct of the Indonesian military in a civil war.”The company later petitioned U.S. District Court Judge Louis F. Oberdorfer, the presiding judge in the case, to solicit an opinion from the State Department whether this suit would have an adverse effect on U.S. foreign policy. On May 10, Judge Oberdorfer sent a letter to the State Department requesting "out of an abundance of caution, in the tense times in which we are living…whether the Department of State has an opinion (non-binding) as to whether adjudication of this case at this time would impact adversely on interests of the United States" and seeks specifics about "the nature and significance of that impact." The letter stated that the plaintiffs alleged that "Exxon Mobil Corporation and several of its subsidiaries and affiliates ('Exxon') are legally responsible for human rights violations suffered by plaintiffs at the hands of an Indonesian Army unit engaged by Exxon to provide security for its Arun Project in Aceh, Indonesia." The State Department argued that the Indonesian government would view judicial scrutiny of the company's conduct as a referendum on the human rights record of the Indonesian armed forces, which would dissuade it from cooperating with the United States in counter terrorism. The State Department sent a response to Judge Oberdorfer on July 29, 2002 arguing that the case should be dismissed.

The incident’s effect on the Company:

ExxonMobil received a 14% rating from the Human Rights Campaign's Corporate Equality Index in 2004. The company had previously lost points because after the merger it failed to adopt some of the LGBT-friendly policies previously put into place at Mobil.

References

http://www.pcr.uu.se/database/conflictSummary.php?bcID=201
http://www.laborrights.org/projects/corporate/exxon/index.html
http://www.laborrights.org/press/ExxonMobil/exxon062101.htm
http://www.agitcollage.org/thespoils/spoiler10.htm
http://www.commondreams.org/news2002/0807-04.htm