U.S. Backs Oil Giant On Lawsuit In Indonesia

by Jane Perlez, The New York Times

JAKARTA, Indonesia, Aug. 7 - The State Department is urging a United States court to dismiss a lawsuit brought by a human rights group against Exxon Mobil over its operations in a war-torn province of Indonesia. In response to a request by the corporation for an opinion, the department declared that pursuit of the case would harm Washington's campaign against terrorism.

Indonesia, the world's largest Muslim country, is a focus of the Bush administration's effort to fight terrorists, and any action by the United States that could interrupt the country's revenues would be perceived by the Indonesian government as interference in its internal affairs, the department said.

And in a twist, the letter by the department's legal adviser, William H. Taft IV, cited business competition from China in Indonesia as another factor in the case.

The International Labor Rights Fund, a nonprofit group based in Washington, represents 11 Indonesian villagers who accuse Exxon Mobil of doing nothing to halt the Indonesian military's killing, torture and rape of residents near the company's plant in Aceh Province.

The army is charged under Indonesian law with protecting national security assets, including natural gas fields like the one in Aceh, where it is fighting separatists.

Exxon Mobil, the world's biggest energy company, sought the opinion, arguing that the suit would set back efforts to fight terrorism.

Judge Louis F. Oberdorfer of the U.S. District Court in Washington agreed to request a nonbinding opinion. The judge's decision on whether to proceed to trial is pending.

The State Department, which had the option of rendering a neutral opinion, sent its reply to the court last week. Copies of Mr. Taft's letter to the judge were released today by the United States Embassy here.

Mr. Taft's letter suggested that Chinese oil companies, which have made significant purchases in Indonesia in the past six months, might try to replace the American energy giant if it were forced to leave. The Bush administration has shown growing concern about China's increasing economic and political interests in Southeast Asia.

The lawsuit is one of a series in which human rights groups have sued multinational companies in American courts in an attempt to hold the corporations more accountable for the repercussions of foreign investment on local populations.

Human rights groups denounced the State Department opinion. "Corporate responsibility shouldn't stop at the water's edge," Kenneth Roth, the executive director of Human Rights Watch, said. He said the Bush administration "shouldn't be trying to stop this court case."

At the same time, Mr. Roth said that Human Rights Watch "takes no position" on claims regarding Exxon Mobil's operations in Indonesia.

At a news conference today at the American Embassy here, Ambassador Ralph Boyce said that the State Department's opinion "expressly reaffirms our human rights concerns in Indonesia."

The letter, which was a matter of contention within the department between those who favored a strong stance protecting human rights in Indonesia and those who wanted a strong commitment to efforts against terrorism, roused considerable interest because of its timing.

The State Department opinion was delivered in the same week as the visit here by Secretary of State Colin L. Powell. He told Indonesians last Friday that the United States was prepared to renew military ties, though on a measured basis.

The letter to the judge mentioned the poor human rights record of the Indonesian Army.

"We would like to reiterate that a lasting, peaceful solution to the Aceh conflict that maintains Indonesian sovereignty can only be achieved if the military and police end human rights abuses," Mr. Taft wrote.

In presenting the department's argument that the case should not proceed, Mr. Taft said Indonesia "serves as a focal point U.S. initiatives in the ongoing war against Al Qaeda and other dangerous terrorist organizations." Those efforts, he said, could be "imperiled in numerous ways if Indonesia and its officials curtailed cooperation in response to perceived disrespect for its sovereign interests."

Moreover, because the investment climate was deteriorating in Indonesia, the suit against Exxon Mobil would further scare Western investors, the State Department said. It suggested that Chinese companies were waiting in the wings, saying, "We would expect that foreign companies, such as from the People's Republic of China" would be "far less concerned about human rights abuses, or about upholding best business practices."

Source: http://www.nytimes.com/2002/08/08/international/asia/08INDO.html

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