Indonesia torture case vs ExxonMobil revived

NEW YORK Fri Jul 8, 2011 1:06pm EDT

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NEW YORK (Reuters) - A U.S. appeals court revived on Friday a lawsuit against Exxon Mobil Corp by Indonesian villagers who accused the oil giant's security forces of committing murder, torture and other wrongdoing.

The D.C. Circuit Court of Appeals, in a 2-1 ruling, said companies are not immune from liability under a 1789 U.S. law known as the Alien Tort Statute for "heinous conduct" allegedly committed by its agents in violation of human rights norms.

Exxon Mobil said it is reviewing the decision.

The case was brought by 15 villagers from Indonesia's Aceh territory, who claimed they or family members were victims of murder, torture and other wrongful acts.

They claimed Exxon Mobil was responsible because it retained soldiers from Indonesia's military as guards for a natural gas facility in that region, despite knowing of past human rights abuses by Indonesia's army and that the contract would lead to human rights violations against Aceh villagers.

Friday's ruling puts the D.C. Circuit at odds with the federal appeals court in New York, which in a landmark ruling last September said companies cannot be liable in U.S. courts for violating international human rights law.

That case was brought against Royal Dutch Shell Plc by the families of seven Nigerians executed by a former military government. They accused Shell of helping Nigerian authorities violently suppress protests against its oil exploration and exploration in the 1990s.

The split of opinion might make it more likely the U.S. Supreme Court could eventually resolve the issue.

Unless Exxon Mobil appeals, the case would return to the trial court, where a jury would assess whether the plaintiffs deserve compensatory and punitive damages. The company is based in Irving, Texas.

"We have fought these baseless claims for many years," Exxon Mobil spokesman Patrick McGinn said in a statement. "While conducting its business in Indonesia, ExxonMobil has worked for generations to improve the quality of life in Aceh through employment of local workers, provision of health services and extensive community investment. The company strongly condemns human rights violations in any form."

According to the decision, some plaintiffs' family members were killed, while other plaintiffs were "beaten, burned, shocked with cattle prods, kicked and subjected to other forms of brutality and cruelty" amounting to torture.

"The ruling basically says that corporations are not above the law," said Jennifer Green, a University of Minnesota law professor and director of that school's human rights litigation clinic, who submitted a brief on the plaintiffs' behalf. "When corporations have knowledge that they are aiding and abetting human rights abuses, they can be held liable in a U.S. court."

In afternoon trading, Exxon shares were down 46 cents at $81.90.

The case is John Doe VIII et al v. Exxon Mobil Corp et al, D.C. Circuit Court of Appeals, No. 09-7125.

(Reporting by Jonathan Stempel; additional reporting by Anna Driver in Houston and James Vicini in Washington, D.C.; editing by Tim Dobbyn and Andre Grenon)

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