[Senate Hearing 110-940]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-940
 
EXTRACTING NATURAL RESOURCES: CORPORATE RESPONSIBILITY AND THE RULE OF 
                                  LAW

=======================================================================

                                HEARING

                               before the

                SUBCOMMITTEE ON HUMAN RIGHTS AND THE LAW

                                 of the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 24, 2008

                               __________

                          Serial No. J-110-122

                               __________

         Printed for the use of the Committee on the Judiciary



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                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
EDWARD M. KENNEDY, Massachusetts     ARLEN SPECTER, Pennsylvania
JOSEPH R. BIDEN, Jr., Delaware       ORRIN G. HATCH, Utah
HERB KOHL, Wisconsin                 CHARLES E. GRASSLEY, Iowa
DIANNE FEINSTEIN, California         JON KYL, Arizona
RUSSELL D. FEINGOLD, Wisconsin       JEFF SESSIONS, Alabama
CHARLES E. SCHUMER, New York         LINDSEY O. GRAHAM, South Carolina
RICHARD J. DURBIN, Illinois          JOHN CORNYN, Texas
BENJAMIN L. CARDIN, Maryland         SAM BROWNBACK, Kansas
SHELDON WHITEHOUSE, Rhode Island     TOM COBURN, Oklahoma
            Bruce A. Cohen, Chief Counsel and Staff Director
           Stephanie A. Middleton, Republican Staff Director
              Nicholas A. Rossi, Republican Chief Counsel
                                 ------                                

                Subcommittee on Human Rights and the Law

                 RICHARD J. DURBIN, Illinois, Chairman
EDWARD M. KENNEDY, Massachusetts     TOM COBURN, Oklahoma
JOSEPH R. BIDEN, Jr., Delaware       JON KYL, Arizona
RUSSELL D. FEINGOLD, Wisconsin       LINDSEY O. GRAHAM, South Carolina
BENJAMIN L. CARDIN, Maryland         JOHN CORNYN, Texas
SHELDON WHITEHOUSE, Rhode Island     SAM BROWNBACK, Kansas
                      Joseph Zogby, Chief Counsel
                 Brooke Bacak, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Brownback, Hon. Sam, a U.S. Senator from the State of Kansas, 
  prepared statement.............................................    66
Coburn, Hon. Tom, a U.S. Senator from the State of Oklahoma......     3
Durbin, Hon. Richard J., a U.S. Senator from the State of 
  Illinois.......................................................     1
    prepared statement...........................................    75
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont, 
  prepared statement.............................................   117

                               WITNESSES

Bassey, Nnimmo, Executive Director, Environmental Rights Action, 
  Lagos, Nigeria.................................................    22
Freeman, Bennett, Senior Vice President for Social Research and 
  Policy, Calvert Group, Washington, D.C.........................    17
Ganesan, Arvind, Director, Business and Human Rights Program, 
  Human Rights Watch, Washington, D.C............................    20
Krilla, Jeffrey, Deputy Assistant Secretary, Bureau of Democracy, 
  Human Rights, and Labor, U.S. Department of State, Washington, 
  D.C............................................................     4
Wa, Ka Hsaw, Co-Founder and Executive Director, Earth-Rights 
  International, Washington, D.C.................................    14

                       SUBMISSIONS FOR THE RECORD

Amnesty International USA, New York, New York, statement.........    31
Bassey, Nnimmo, Executive Director, Environmental Rights Action, 
  Lagos, Nigeria, statement......................................    37
Brutus, Dennis, Jubilee South Africa.............................    67
Chevron, San Ramon, California, statement........................    68
Cramer, Aron, President and Chief Exective Officer, Business for 
  Social Responsibility, San Francisco, California, letter.......    71
Freeman, Bennett, Senior Vice President for Social Research and 
  Policy, Calvert Group, Washington, D.C., statement.............    78
Ganesan, Arvind, Director, Business and Human Rights Program, 
  Human Rights Watch, Washington, D.C., statement................    83
Global Witness, Washington, D.C., statement......................    91
Hendry, Krisla, Director, Human Rights and Business Roundtable, 
  the Fund for Peace, Washington, D.C., statement................    99
International Council on Mining & Metals, John Ruggie, London, 
  United Kingdom, statement......................................   102
International Labor Rights Forum, Washington, D.C., statement....   105
Krilla, Jeffrey, Deputy Assistant Secretary, Bureau of Democracy, 
  Human Rights, and Labor, U.S. Department of State, Washington, 
  D.C............................................................   108
Maassarani, Tarek Farouk, International Human Rights Fellow, 
  Cohen Milstein hausfeld & Toll, Takoma Park, Maryland, 
  statement......................................................   119
Slack, Keith, Extractive Industries Program Manager, Oxfam 
  America, Washington, D.C., statement...........................   126
Wa, Ka Hsaw, Co-Founder and Executive Director, Earth-Rights 
  International, Washington, D.C., statement.....................   131
Walton, Abigail Abrash, Antioch University New England, Keene, 
  New Hampshire, statement.......................................   148


EXTRACTING NATURAL RESOURCES: CORPORATE RESPONSIBILITY AND THE RULE OF 
                                  LAW

                              ----------                              


                     WEDNESDAY, SEPTEMBER 24, 2008

                                       U.S. Senate,
                  Subcommittee on Human Rights and the Law,
                                Committee on the Judiciary,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to notice, at 10:47 a.m., in 
room Sh-216, Hart Senate Office Building, Hon. Richard J. 
Durbin, Chairman of the Subcommittee, presiding.
    Present: Senators Durbin and Coburn.

  OPENING STATEMENT OF HON. RICHARD J. DURBIN, A U.S. SENATOR 
                   FROM THE STATE OF ILLINOIS

    Chairman Durbin. This hearing of the Judiciary Committee's 
Subcommittee on Human Rights and the Law will come to order. 
The subject of this hearing is ``Extracting Natural Resources: 
Corporate Responsibility and the Rule of Law.'' After some 
opening remarks, I am going to recognize Senator Coburn, the 
Ranking Member of the Subcommittee, whom I expect to attend and 
be here very shortly. He will make an opening statement and 
then we will turn to our witnesses.
    This could be the last hearing in this Congress of this 
Subcommittee. I want to thank especially Senator Patrick Leahy, 
the Chairman of the Senate Judiciary Committee, for 
establishing this Subcommittee and allowing me the opportunity 
to serve as its first Chairman.
    We have accomplished a lot in a short period of time. We 
have held the first-ever congressional hearings on the law of 
genocide, child soldiers, crimes against humanity, sexual 
violence in conflict, and the U.S. Government's enforcement of 
human rights laws.
    And, as I said when I became Chairman of this Subcommittee, 
we have focused on legislation, not lamentation. Last year, 
Congress unanimously passed and the President signed into law 
the Durbin-Coburn Genocide Accountability Act, which makes it a 
crime under U.S. law to commit genocide anywhere in the world. 
Last week, Congress unanimously passed the Durbin-Coburn Child 
Soldiers Accountability Act, which makes it a crime and 
violation of immigration law to recruit or use child soldiers.
    Today we are breaking more new ground. This is the first-
ever congressional hearing on the human rights responsibilities 
of American oil, gas, and mining companies.
    In recent days, we have been reminded that we live in the 
age of globalization. The state of the U.S. economy--and the 
actions of American companies--have repercussions around the 
world. That is especially true in extractive industries, like 
oil, gas, and mining.
    American families, small businesses, and farmers are 
struggling with the increase in oil prices. The untold story is 
that people on the other end of the oil supply chain are also 
suffering. We import about two-thirds of the oil that we 
consume. American companies drill much of this oil in countries 
with high levels of corruption and poor human rights records. 
And this can lead directly to higher oil prices for Americans.
    Nigeria, the fourth largest oil supplier to the United 
States, is a case in point. The country consistently ranks 
among the most corrupt in the world, and senior government 
officials have been implicated in human rights abuses and the 
theft of oil revenue.
    Despite generating billions of dollars in oil revenue each 
year, the Niger Delta is the poorest region in the country. 
Today we will hear how human rights violations, extreme poverty 
and environmental destruction have fueled tensions between 
local communities and oil companies in the Niger Delta for 
decades. The emergence of an armed conflict in the Niger Delta 
in 2006, with militants taking oil workers hostage and 
profiting from the trade in stolen oil, has sharply decreased 
Nigeria's oil production and driven oil prices up.
    This is not a black and white issue. There is no doubt that 
American oil, mining, and gas companies operating in countries 
with poor human rights records face extremely difficult 
challenges in protecting their employees and operations. 
However, when American companies choose to go to these 
countries, they assume a moral and legal obligation to ensure 
that security forces protecting their operations do not commit 
human rights abuses.
    Let me be clear: Governments are primarily responsible for 
protecting the human rights of their citizens. But extractive 
companies also have an important role and responsibility in 
preventing human rights abuses, and, as we will hear today, 
some have fallen short of this obligation on more than one 
occasion.
    Today we will examine the legal responsibilities of 
extractive companies to protect human rights; voluntary 
industry standards for preventing human rights abuses; and 
whether Congress needs to consider additional legislation in 
this area.
    The United States has long been a leader when it comes to 
the legal responsibilities of U.S. companies to protect human 
rights when they operate in foreign countries. The Alien Torts 
Claims Act, which was a part of the original Judiciary Act of 
1789, allows civil suits in U.S. courts for human rights abuses 
that take place in a foreign country. We will hear more about 
cases relating to that law today.
    The U.S. has also played a leadership role in establishing 
the Voluntary Principles on Security and Human Rights. This 
important initiative brings together governments, companies, 
and nongovernmental organizations to develop human rights 
standards for the extractive industries.
    However, as we are going to hear today, the Voluntary 
Principles are difficult to enforce. It is also troubling that 
oil-producing governments like Nigeria are not part of the 
process. This hearing will help us evaluate the effectiveness 
of the Voluntary Principles and consider whether Congress 
should make any of these standards mandatory.
    Protecting human rights abroad is the right thing to do. As 
Martin Luther King said, ``Injustice anywhere is a threat to 
justice everywhere.'' In a globalized world, we have even more 
at stake. American families are harmed when human rights abuses 
and instability in oil-producing regions result in higher oil 
prices. Our reputation suffers when U.S. companies are 
complicit in human rights abuses committed by their security 
forces.
    I hope we can work together to address the critical human 
rights challenges extractive companies operating in repressive 
countries face.
    Now I turn to my colleague and Ranking Member, Senator Tom 
Coburn. Welcome.

STATEMENT OF HON. TOM COBURN, A U.S. SENATOR FROM THE STATE OF 
                            OKLAHOMA

    Senator Coburn. Thank you, Mr. Chairman, and, again, 
congratulations to your staff. Great work and great 
preparation.
    Human rights are basic. They are basic everywhere, and as 
we face the global economy that we have, there cannot be an 
excuse for any company to not recognize the value of that in 
terms of their own future and their ability to do that.
    I am thankful for some of the behind-the-scenes information 
that was given to us by some of the contractors. I am also 
somewhat disappointed that we will not have actual testimony, 
Mr. Chairman, for that. But I think that the purpose of this 
hearing is to bring to light where we fall short of what we 
stand for as a country and to make sure we make whatever 
corrective action is necessary so that we can continue to lead 
the world in terms of the preservation and protection of basic 
human rights. And for that I thank you.
    And I also will apologize. Because of the nature of the end 
of the session, I will not be here for the whole hearing, but I 
appreciate you having the hearing. Thank you.
    Chairman Durbin. I want to thank Senator Coburn. We have 
accomplished a lot in this Subcommittee because of the 
extraordinary bipartisan cooperation. These bills would never 
have been passed or signed by the President were it not for 
that cooperation, and I want to thank you in particular, and 
also your chief counsel, Brooke Bacak, for her dedication and 
commitment to the issues that this Subcommittee has faced.
    Next we are going to hear from two witness panels. At the 
outset, I want to say I am disappointed, as Senator Coburn has 
indicated, that ExxonMobil and Chevron declined our invitation 
to testify. I think it would have been helpful if they would 
have come forward to talk about the challenges that they face 
overseas trying to run a company on a global basis. But, 
unfortunately, they declined our invitation. I think it would 
have been valuable to have their perspective, and I hope they 
will consider at least submitting written statements that we 
can add to the record. Their absence is going to detract from 
what we have to say this morning, but, fortunately, we have 
some extraordinary people testifying.
    On our first panel, we have Jeffrey Krilla of the State 
Department. Mr. Krilla, you are going to have 5 minutes for 
your opening statement, and then we will ask you some 
questions. The tradition of the Committee is to swear in our 
witnesses, so if you would please stand and raise your right 
hand. Do you affirm that the testimony you are about to give 
before the Committee will be the truth, the whole truth, and 
nothing but the truth, so help you God?
    Mr. Krilla. I do.
    Chairman Durbin. Thank you. Let the record indicate Mr. 
Krilla has answered in the affirmative, and now we invite you 
to testify.

STATEMENT OF JEFFREY KRILLA, DEPUTY ASSISTANT SECRETARY, BUREAU 
   OF DEMOCRACY, HUMAN RIGHTS, AND LABOR, U.S. DEPARTMENT OF 
                    STATE, WASHINGTON, D.C.

    Mr. Krilla. Mr. Chairman and members of the Committee, I am 
pleased to have the opportunity to testify on human rights 
issues in the extractive industries here today. Your interest 
in this important subject is certainly appreciated.
    I ask that my full statement be included in the record.
    Chairman Durbin. Without objection.
    Mr. Krilla. I also wish to acknowledge the nongovernmental 
organizations that are here today as part of this hearing--in 
particular, Human Rights Watch, with whom we partner on many of 
our corporate social responsibility initiatives.
    I would also like to take the opportunity to thank my 
predecessors in my position at State, including Gare Smith and 
Bennett Freeman, who is going to be testifying here today, who 
were instrumental in laying the groundwork for several of the 
corporate social responsibility efforts that we pursue in the 
Department's Bureau of Democracy, Human Rights, and Labor.
    I also would have hoped that we could have heard from the 
corporate community today. For corporate social responsibility 
initiatives to succeed, we need engagement from the three 
stakeholders--governments, companies, and nongovernmental 
organizations.
    The promotion of human rights and fundamental freedoms, as 
embodied in the Universal Declaration of Human Rights, is a 
cornerstone of U.S. foreign policy. We work very hard to 
promote and safeguard human rights for individuals the world 
over and believe that respect for human rights helps secure the 
peace, deter aggression, promote the rule of law, combat crime 
and corruption, strengthen democracies, and prevent 
humanitarian crises. Successfully combating human rights abuses 
requires a coordinated response from key stakeholders, which 
begins with governments, but also includes corporations and 
nongovernmental organizations.
    We take a multi-stakeholder approach, recognizing that the 
expanding reach and influence of multinational corporations has 
led to increased demand for voluntary corporate social 
responsibility in general and more specifically as it relates 
to promoting respect for human rights. My Bureau, DRL, actively 
engages corporations, both multinational and domestic, on these 
priorities--encouraging them in turn to adopt policies and 
practices that promote respect for key corporate social 
responsibility tenets.
    Although abundant natural resources in developing countries 
can offer the promise of economic development and prosperity, 
they also provide the opportunity for corruption, exploitation, 
and conflict. These negative effects are certainly not unique 
to the oil, gas, and mining sectors. But given the focus of 
this hearing, I will focus my remarks today on human rights 
concerns relating to the extractives industry. We document 
these concerns in our Annual Country Reports on human rights 
practices.
    For example, the challenges related to the oil and natural 
gas sector in Nigeria's Niger Delta have been well publicized. 
There have been problems in Angola's diamond-rich provinces and 
in the Democratic Republic of Congo's mining sector, including 
issues related to child soldiers. This is an issue in which we 
appreciate your leadership and applaud the recent passage of 
the Child Soldiers Accountability Act, a very helpful tool for 
us to use as a Government.
    Human rights obligations rest with governments, and for 
human rights abuses in the extractives industries to be 
stopped, ultimately good governance is requisite--rule of law, 
transparency, and accountability. That is why we press 
governments to adhere to internationally accepted human rights 
standards and norms.
    The international community has a role to play as well. 
Other governments and the multinational companies with 
extractive operations in these host countries must work 
together to promote good governance and respect for human 
rights.
    One of the ways in which the Department of State has worked 
with U.S gas, oil, and mining companies on these issues is 
through voluntary corporate social responsibility initiatives 
such as the Extractive Industries Transparency Initiative and 
the Voluntary Principles on Security and Human Rights, or VPs. 
We have also worked closely with the diamond industry and civil 
society through the Kimberley Process to prevent rough diamonds 
from financing conflict. I believe most of you are familiar 
with these efforts, but I would like to focus on the VPs in 
particular.
    The Voluntary Principles on Security and Human Rights were 
established in 2000 under the Clinton Administration to provide 
practical guidance that will strengthen human rights safeguards 
in company security arrangements in the extractive sector. The 
short-term goal of the VPs is to encourage extractive companies 
to better understand the environment in which they operate, 
improve relations with local communities through dialog, and 
uphold the rule of law. The long-term goal is to create a 
better environment for sustainable economic investment and 
human rights.
    The VPs were negotiated and adopted in response to the 
concerns of governments, extractive companies, and civil 
society where difficult operating environments create 
challenges to both security and human rights.
    Today, the VPs participants include four governments--the 
U.S., the U.K., the Netherlands, and Norway); 18 oil, gas, and 
mining companies; and seven international NGOs. The current 
four government participants are the home governments of the 
major oil, gas, and mining company VPs participants.
    In these initiatives, participation of the international 
community is crucial but not sufficient. Participation of host 
governments is equally critical. For example, within the 
context of the VPs, many of the guiding principles to which 
companies commit with regard to their interactions with public 
security can only be truly effective with the support of the 
host government. Under the VPs, for example, companies 
volunteer to request that host government public security 
personnel receive human rights training and are vetted to 
ensure that they have not committed human rights abuses.
    For these actions on the part of companies to be truly 
effective, host countries must embrace the Voluntary 
Principles. Let me be clear: Participation in the Voluntary 
Principles does not confer a ``Good Housekeeping'' seal of 
approval on a host country. The VPs were not created to be an 
exclusive or elite club, nor were they intended as a 
certification standard for human rights in the extractives 
industry. Membership in the VPs does not signify an endorsement 
of any participant's human rights practices, whether it be 
companies, governments, or NGOs.
    The VPs are a process of mutual learning and improvement, 
yet are built on firm commitments embodied both in the 
Principles and in the unanimously approved Participation 
Criteria.
    We are working closely with our fellow VPs members and hope 
to be able to welcome host governments to the table in the near 
term. I just returned from a trip to Nigeria and the Democratic 
Republic of Congo where I pressed the importance of adhering to 
internationally accepted human rights standards and norms. I 
raised the VPs in both countries and highlighted their value in 
serving as an additional tool available to those governments in 
addressing the grave issues I highlighted earlier concerning 
human rights in the extractives industry.
    We can spotlight problems and draw international attention 
to human rights concerns, but without the commitment of host 
governments, no effort to address human rights concerns in the 
extractive sector, or any other, can be successful. As 
voluntary initiatives become more globally accepted, 
expectations for companies to adhere to the good corporate 
practices that they promote grow. That said, voluntary 
initiatives, like the VPs, are important complements to, but 
can never be substitutes for, the obligations of governments to 
meet their commitments under international law and to establish 
and enforce the rule of law domestically.
    There are some who believe that in the face of poor human 
rights enforcement records of some governments around the 
world, the obligation to enforce human rights should be somehow 
transferred onto corporations. We strongly disagree. Yes, 
companies must bear responsibility for their policies and 
practices. But it is governments that ultimately must be held 
accountable.
    Transferring the enforcement obligation onto companies 
would only lead governments to expect that they can opt out of 
their obligations because companies will do the job for them. 
The best option, and the key to ending exploitative practices 
by private sector companies or any other actor, is for 
governments to engage in good governance and thereby protect 
human rights enforcement and the rule of law.
    We are committed to advancing our work in corporate social 
responsibility, and we certainly appreciate the opportunity 
that this hearing presents for us to share our views on this 
important issue. We look forward to continuing this dialog and 
our cooperation with Congress.
    Thank you.
    [The prepared statement of Mr. Krilla appears as a 
submission for the record.]
    Chairman Durbin. Thank you, Mr. Krilla, and I apologize for 
not reading your bio before asking you to speak. I just want to 
say for the record that you have served as Deputy Assistant 
Secretary for Democracy, Human Rights, and Labor in the State 
Department since January of 2006. You oversee the Office of 
International Labor Affairs and Corporate Social 
Responsibility, with primary responsibility for the Voluntary 
Principles. There is more to be read and we will put it in the 
record. I would like to get to the questions, if I could.
    Mr. Krilla. Absolutely.
    Chairman Durbin. So let's do a hypothetical here. Let's 
assume that I own an extractive company, and I want to do 
business in a country. As I might expect, I have to go to the 
leaders of the government of that country to get their 
permission in various ways--permits, follow their laws, and 
work through their process, whatever it may be--so that I can 
set up shop and start mining a mineral in this country. And 
then I find out that the security which will be provided to me 
at my workplace will be by that same government.
    Now, I start my operations, and I quickly learn things are 
not going well. This government that is supposed to be 
providing security to me is engaging in things that would be 
absolutely outrageous and unacceptable in the United States: 
forced labor, rape, torture, kidnapping.
    What is my responsibility at that point under the Voluntary 
Principles? And what do you think my responsibility is under 
the Alien Tort Claims Act?
    Mr. Krilla. Well, unfortunately, that scenario is not all 
that foreign to some companies that do work overseas, as I am 
sure you can imagine. The Voluntary Principles were created to 
give the companies that participate in this part of the 
process, first of all, a greater understanding of the 
environments in the countries in which they look to operate, 
ideally in advance of their engagement in those countries. So 
putting that aside, I think that is a very important piece of 
the puzzle, and the State Department feels fundamentally that 
we owe companies all the information that we put together in 
our Human Rights Report, all the information that our embassies 
compile on the human rights records of these governments, even 
in anticipation of going into these emerging markets.
    But that being said, the Voluntary Principles is a very 
helpful tool for governments, for NGOs, and in this case for 
companies to better understand the environment and ways to deal 
with these situations.
    The companies themselves can rely upon the NGOs and the 
governments to help better understand the environment and 
better understand what sort of training regimen should be 
implemented for their security forces, starting off with risk 
assessments that are an integral part of the Voluntary 
Principles to better understand the environment. These 
trainings would better equip the security forces to understand 
the human rights situation as well as how they as security 
forces should deal with the environment. And I think this sort 
of training is fundamental. It is mostly done by the NGOs that 
are part of this?
    Chairman Durbin. I do not want to interrupt you.
    Mr. Krilla. Yes, sir.
    Chairman Durbin. You are giving me the preventive measures. 
I am describing a scenario where we are beyond that. My company 
is in business, and I look around and see the military forces 
of government doing things which are nothing short of 
outrageous. What is my obligation under the Voluntary 
Principles or under the Alien Tort Claims Act?
    Mr. Krilla. Your obligation is to pressure, to work with 
the other stakeholders in this, to work with the host 
government to ensure that the security forces, as you said that 
in some cases are out of your control, receive the training and 
are brought to justice, that the vetting occurs for human 
rights abuses so that individuals that are accused of human 
rights violations with credible evidence are removed from the 
employ of the government and from the facility.
    Chairman Durbin. So do I have an affirmative obligation to 
document what I have seen and notify the government of the 
conduct?
    Mr. Krilla. You have a committment under the Voluntary 
Principles to document your implementation of this, to stand up 
to the criticism that you would receive, and the assessments 
from the NGO and government pillars as to how you have 
implemented them, and in the case that you have highlighted, 
sir, to actually talk about how you have addressed it and then 
work with the other pillars to put pressure on the host 
government to implement this sort of regimen.
    Chairman Durbin. And if they fail to do anything and it 
continues, do I have any obligation beyond notification of my 
objection to their conduct?
    Mr. Krilla. Well, your committment under the Voluntary 
Principles is to address it through the means that are 
available, through the mechanisms of the Voluntary Principles, 
which we consider to be rather robust. Having the governments, 
not only the United States but the other three governments that 
are involved, raise these issues in bilateral as well as 
multilateral fora is a very strong tool that we have at our 
disposal and one that would not be available short of a 
Voluntary Principles mechanism.
    So the company does have a committment to work through all 
means available within the VPs, and there are a number of 
levers through the VPs that are available.
    Chairman Durbin. So, finally, on the Alien Tort Claims Act, 
what kind of liability do I face if I have seen this outrageous 
conduct by the government forces that are supposedly 
responsible for my security? What kind of exposure do I have? 
If you were the attorney advising the company and they want to 
protect themselves from liability under the Alien Tort Claims 
Act, what should they do?
    Mr. Krilla. Well, I would answer that more generally, sir, 
in terms of what their obligations as companies are operating 
abroad under the expectations that we have as the State 
Department. I mean, we give them as much information as 
possible, and we expect them to not worsen the human rights 
conditions, not be complicit. We hope that they implement 
mechanisms such as the Voluntary Principles.
    In terms of the alien tort statute, I am not as familiar 
with the U.S. application. If you would like, I could get you 
back an answer to that for the record, because I think it is an 
important one to address more fully for you, sir.
    Chairman Durbin. Thank you.
    Senator Coburn?
    Senator Coburn. Thank you. I just want to follow up on 
that.
    Let's say I am drilling for oil--and I will not name the 
country--and I see human rights abuses, and then I raise those 
with the government and with the NGOs; and the human rights 
abuses I see are then perpetrated against my own employees. 
Then what do I do?
    Mr. Krilla. I will say that in a lot of these environments, 
there are well-documented, comprehensive challenges across the 
board for human rights, and the Voluntary Principles are not a 
cure-all for all of the challenges that we face.
    In terms of addressing specifically the issue of human 
rights and security forces, this is a very helpful tool. If you 
are a company and are having challenges with your employees and 
the government or security forces--you have your own personal 
engagement with the government and you have the resources of 
the United States Government to engage with that government and 
express our concern.
    In terms of the company itself, the Voluntary Principles 
may not be the best mechanism to address all of the treatment 
of your employees, but it is certainly one mechanism that would 
help highlight the challenges of the security forces and the 
human rights conditions of the security forces that in many 
cases are required to be employed by you.
    Senator Coburn. OK. The point I am getting to is I have 
security forces. They are well documented. They believe in 
human rights. And rebel forces that are there were reporting 
what action--maybe they are rebel forces within the military of 
the country, but they are certainly not honoring human rights. 
I report that. Then my facility gets attacked because I 
reported it. OK? Because I have engaged in Voluntary 
Principles. Now what do I do? Where is moral dilemma? Do I pack 
up and go home? Or do I report again and expect to get attacked 
again?
    In other words, what is the position--you know, what we are 
wanting to do is a very good thing, but without the rule of 
law, which we often take for granted in this country, which is 
very limited in many of these countries, without the rule of 
law to protect an extractive industry, what are they to do? 
Let's say they followed the Voluntary Principles to the ``T'' 
and all it has done is cost them their ability to produce. Then 
what do they do? Where are they from a moral standpoint? Do 
they continue to protect and have their business completely 
shut down? Or do they withdraw? Or do they just remain quiet 
because they have followed the Voluntary Principles once and it 
has been very painful? What is your advice to me? I am an 
exploitative energy company.
    Mr. Krilla. Sure. Well, unfortunately, these challenges do 
continue to exist in a number of these countries, and I think 
the lesson that we have learned is that the Voluntary 
Principles do offer a very helpful tool. If you use them once 
and you have gone back to the government as a company and 
expressed your concern and not gotten satisfactory responses 
through inadequate rule of law, through inadequate attention to 
anticorruption, or whatever the issue is, you have the 
additional partners, the additional stakeholders of the 
governments and the NGOs that you can bring into the equation.
    Truthfully, a lot of it is affected by community 
engagement, and in that respect, NGOs have been invaluable 
partners in this whole voluntary process, the Voluntary 
Principles process. So I would say if your first initial 
inquiries with the government are ineffective, you have many 
tools within the Voluntary Principles to bring to bear.
    Now, that being said, if things continue to get worse and 
you feel as though your operations are hindered, certainly 
companies could choose to leave. But I think short of using all 
the mechanisms through the Voluntary Principles, there is 
certainly a lot of opportunity to bring other partners to help 
solve these problems.
    Senator Coburn. One follow-up question. How many countries 
embrace these Voluntary Principles and then do not enforce 
them?
    Mr. Krilla. Well, right then, Senator, you have 
highlighted--
    Senator Coburn. Give me a guess.
    Mr. Krilla. Sure. I would say we have four governments that 
are directly involved in the Voluntary Principles that embrace 
them wholeheartedly. It is the host governments that are the 
next step right now for us to work to engage. I think we have 
seen some engagement from governments like Colombia and 
Nigeria. They are not formally part of it, but we hope to 
welcome them at some point into the process more formally, and 
we think that having them at the table will help to strengthen 
and improve human rights conditions in those countries.
    Senator Coburn. All right. Thank you. I do not have any 
other questions.
    Chairman Durbin. I would like to follow up, if I can. I 
understand Senator Coburn may not be able to stay, but I sure 
thank him for being here this morning, for being part of this 
hearing.
    You testified that the participation of natural resource-
producing countries in the Voluntary Principles is critical for 
their effectiveness, yet 8 years into the process, none of 
these countries has joined and there is not even a process in 
place to admit them. So why haven't they joined?
    Mr. Krilla. Well, as I did note, it is important to have 
them as part of this process. We have had a lot of engagement 
with these governments, but I think the important part of the 
process was several years ago when we actually created 
Participation Criteria for new entrants to understand what they 
were entering into. We have had governments--as I mentioned, 
Colombia and Nigeria--that have engaged the VPs to varying 
degrees--certainly Colombia has been very involved up to the 
highest levels. The Vice President has been personally 
involved, Vice President Santos, in making sure the Voluntary 
Principles are implemented in all new contracts that the 
national oil company has signed.
    So we have seen a lot of engagement, although these 
countries have not entered as formal VPs members because we are 
still working out new entry criteria for governments. It is 
something that, as I briefed your staff several months ago, we 
are actively working on right now. All the governments are 
hoping to involve new entrants, but at this point now, we do 
not have any more than the four governments that were initially 
formally involved.
    Chairman Durbin. Which four?
    Mr. Krilla. The United States, the U.K., Norway, and the 
Netherlands, sir.
    Chairman Durbin. Now, you mentioned Colombia as not 
formally part of the VP. They have some human rights problems 
that have been reported through the State Department and other 
sources, as do Indonesia and Nigeria. Should they be allowed to 
join?
    Mr. Krilla. Well, the majority of the participants in the 
Voluntary Principles see this process and this mechanism as one 
that is very inclusive. I would much rather have governments 
that are interested in improving their human rights records at 
the table with the NGOs, with other governments, and with the 
companies to understand greater the challenges that they face 
and be better prepared to put together a road map to address 
those challenges.
    The country of Colombia is a perfect example of that, where 
there are well-documented human rights challenges that they 
still face, but their involvement in the Voluntary Principles 
leads to a much greater understanding and much greater ability 
to address certain problems. VPs will not solve all of their 
human rights problems, but certainly could lead to a much 
greater understanding and ability to address problems in human 
rights and security around the extractive sector.
    Chairman Durbin. Let's talk about Nigeria for a moment. It 
was one of the three original priority countries for the 
Voluntary Principles, but in the 8 years since they were 
created, the security and human rights situation in Nigeria has 
deteriorated significantly. Why were the Voluntary Principles 
not able to play a role in preventing this?
    Mr. Krilla. Well, unfortunately, as I said earlier, the 
Voluntary Principles are just one tool in our toolbox. That is 
not to say it is the only one that we are using in places like 
Nigeria. The United States Government--the State Department in 
particular--has a number of tools. Certainly, things like 
awareness raising through our Human Rights Reports, even 
through things like this hearing, are extremely helpful. Our 
engagement with the NGO community, our capacity building and 
support for civil society is a key part of raising awareness of 
the human rights challenges that the countries still face.
    I will say I am disappointed that the Government of Nigeria 
has not been more engaged on Voluntary Principles. I think that 
we have seen some interest. We certainly could see more. Part 
of the purpose for my trip just last week was to get the 
Government of Nigeria to more aggressively work to help 
implement these Voluntary Principles.
    But I will say, despite the lack of aggressive 
implementation from the Government of Nigeria, we are seeing 
the companies implement the Voluntary Principles across the 
board in the country with the help of a lot of NGOs.
    So I hold out hope that the companies and the NGOs and the 
home governments to these companies are going it alone. 
However, it is no substitute for having the Government of 
Nigeria as a willing partner.
    Chairman Durbin. For the record, you have mentioned NGOs 
generically. Are there specific NGOs that have been extremely 
helpful or extraordinarily helpful in implementing these 
Voluntary Principles?
    Mr. Krilla. Absolutely, and they play a key role. I myself 
come from an NGO background before I came to work at the State 
Department. Without helpful partners like Human Rights Watch, 
Amnesty International--we have got seven NGOs that are very 
critical in not only implementing but better understanding the 
challenges that we face, and I think they are very key 
stakeholders in this whole process.
    Chairman Durbin. I would appreciate it if you would enter 
their names for the record. I think they deserve that 
recognition.
    Let me ask you, in the embassies around the world, 
particularly in countries with natural resources that are 
extracted and exported to the United States, are the Voluntary 
Principles an ongoing issue? Is it one where there are people 
within the embassy or consulate that work on this issue on a 
regular basis?
    Mr. Krilla. Yes, sir. In fact, one of the highlights within 
the State Department of working on the Voluntary Principles 
initiative is that it brings several different parts of the 
State Department and also several parts of the embassy 
together, whether it is our energy and economics officers or 
human rights officers or our political officers that more 
holistically follow the situation on the ground. So I think it 
is a real strength of this process within the Department, and 
then also within the embassy, that it brings all aspects of the 
embassy together to better understand and address this 
challenge.
    Chairman Durbin. Annually, the State Department issues a 
human rights scorecard. Is this whole issue of the conduct of 
extractive industries taken into consideration as a part of the 
grading or evaluation of countries overseas?
    Mr. Krilla. Sure. Well, I would not call it a scorecard so 
much as a very thorough, comprehensive report. I actually 
brought a copy of it here to show you just how extensive it is.
    This report judges the human rights condition in countries 
and judges governments. There is certainly mention of 
companies, companies' behavior. Primarily--as I mentioned 
earlier and I think you noted as well, we hold governments 
accountable, but certainly the situation around corporate 
behavior is mentioned in the reports as well.
    Chairman Durbin. Do you hold companies responsible as well? 
If there is a company, an American company, that is not 
participating in Voluntary Principles or not doing the right 
thing, is that reported as well?
    Mr. Krilla. Absolutely. It is reported in the sense that we 
engage with those companies and try to better increase their 
understanding of the situation and encourage them to get 
involved in different initiatives like the Voluntary 
Principles. In other industries, there may be other sorts of 
industry best practices that certain companies are not 
complying with, and certainly better educating them and 
encouraging them to move toward those practices is our goal.
    Chairman Durbin. So if I read that evaluation, will I see 
the names of companies that you believe are not doing a good 
job when it comes to this?
    Mr. Krilla. You will see the names of facilities where 
human rights incidents have occurred. I think our report well 
documents situations which need to be addressed, and in some 
cases companies are mentioned.
    Chairman Durbin. I know that there are many companies that 
pride themselves on the sources of products that are sold in 
the United States--Whole Foods, Starbucks, companies of that 
nature. And it appears that they believe that this is something 
that American consumers will pay attention to. I think we have 
an ample history of those companies that have failed to pay 
attention being caught in the act, and they have to change 
their policies and practices. So I would think that that 
reporting might have a valuable impact on corporate conduct 
overseas.
    This is an extremely complicated situation. I would hope 
that we can work together on this in terms of acknowledging the 
companies that are doing the right thing--I think they deserve 
a pat on the back and recognition--but also those that are not. 
And that might help the American consumer to decide. Sometimes 
that consumer decision can have more impact than any law we 
pass.
    So I thank you, Mr. Krilla, for testifying today. We will 
have some follow-up questions we will send your way.
    Mr. Krilla. If I could just add one more thing, Mr. 
Chairman.
    Chairman Durbin. Of course.
    Mr. Krilla. I think we do do a great job of highlighting 
companies that are doing the right thing, best practices. I 
think the Secretary's Award for Corporate Excellence really 
helps highlight some of these companies. In fact, two of your 
Illinois companies last year were finalists: Motorola and 
Caterpillar.
    Chairman Durbin. Great.
    Mr. Krilla. So we are pleased to do more of that, and 
thanks again for having us up today.
    Chairman Durbin. I am happy that you mentioned some 
Illinois companies. I appreciate it. Thanks a lot for your 
testimony today.
    Chairman Durbin. We are now going to move to the second 
panel, and we are honored to have a distinguished panel of 
witnesses to share their views on this topic. Each of these 
witnesses will have 5 minutes for an opening statement. Mr. 
Bassey and Mr. Ka Hsaw Wa have both traveled a long way to be 
here, so we are going to give them a little more latitude in 
their testimony. Their complete written statements will be made 
part of the record.
    Before the witnesses are seated, I am going to ask you for 
the purpose of administering the oath to please stand and raise 
your right hand, if you would. Do you affirm that the testimony 
you are about to give before the Committee will be the truth, 
the whole truth, and nothing but the truth, so help you God?
    Mr. Bassey. I do.
    Mr. Ganesan. I do.
    Mr. Freeman. I do.
    Mr. Wa. I do.
    Chairman Durbin. Thank you. Let the record reflect that the 
four witnesses answered in the affirmative.
    Our first witness, Mr. Ka Hsaw Wa, is the co-founder and 
Executive Director of EarthRights International and a member of 
the Karen ethnic nationality in Burma.
    After leading peaceful student demonstrations in Rangoon in 
1988, he was arrested and tortured by the Burmese regime. Mr. 
Ka Hsaw Wa fled the country after his release and has since 
traveled clandestinely to remote areas of Burma to interview 
witnesses and victims of human rights abuses committed by the 
military junta. Mr. Ka Hsaw Wa has documented human rights 
abuses, including forced labor, torture, killings, and rape 
resulting from the Yadana pipeline, which cuts through the 
Tenasserim region of Burma.
    Mr. Ka Hsaw Wa has been honored for his work with the 
Goldman Environmental Prize, the Reebok Human Rights Award, the 
Sting and Trudie Styler Award for Human Rights and the 
Environment, and the Conde Nast Environmental Award.
    Mr. Ka Hsaw Wa came all the way from Thailand to testify 
before the Subcommittee, and I thank you very much for doing 
that. It is an honor to have you with us today, and we look 
forward to your testimony. You may proceed. Make sure your 
microphone is turned on.

  STATEMENT OF KA HSAW WA, CO-FOUNDER AND EXECUTIVE DIRECTOR, 
          EARTHRIGHTS INTERNATIONAL, WASHINGTON, D.C.

    Mr. Ka Hsaw Wa. Thank you so much, Mr. Chairman and the 
rest of the members. This issue is extremely important for me 
because as I have been documenting human rights abuses 
committed by military, we have a corporation for 15 years. We 
all know the horrible human rights record of the Burmese 
military junta. This army has a contract with Chevron on the 
Yadana natural gas pipeline. That very same military who shot 
and killed monks on the street last September, who did not 
allow any humanitarian aid during the cyclone disaster in 
Burma, and who killed many of my friends and other 
demonstrators and tortured me for 3 days.
    Chevron hired the brutal military dictatorship to provide 
security of the pipeline. Human rights abuses are happening 
before, during, and after construction and are still happening 
today.
    The pipeline is the single largest source of income for the 
military. This revenue has allowed the military to dramatically 
increase the military budget and size over the last decade. My 
organization, EarthRights International, helps voicless people 
of Burma to seek justice in U.S. courts against Unocal, which 
was bought by Chevron in 2005, for slave labor, torture, rape, 
killing associated with this pipeline in the historic lawsuit 
called Doe v. Unocal.
    It is so incredible for me to see that a U.S. corporation 
like Chevron is allowed to continue to contract with brutal 
military. Thousands of Burmese soldiers in the area, in the 
village, along the pipeline route committing human rights 
abuses against the local people. The military rape the women, 
children, and conscripting slave labor. They kill and abuse 
villagers anytime they want with total impunity. Villagers are 
forced to work the pipeline corridor, first for the repair and 
maintenance of infrastructure for the pipeline, and carry 
ammunition while military are taking security for the pipeline. 
While projects were being built, hundreds of people who were 
working as slaves built helipad, road, military barracks for 
the pipeline security forces.
    I want you to understand the situation of my people in the 
pipeline region. Many of the people in the pipeline region are 
farmers, and then because the military do not allow them to go 
to their farm, they have not enough food. And at the place 
where they are allowed to go is very limited. And in order for 
you to go one place to another, you have to get permission from 
the military. The only way for you to get the permit is you 
have to bribe military with chicken, money, alcohol, things 
like that. If you cannot get any permit, if they see you in 
your farm, they could kill you, they could torture you. They 
will do anything they want to you.
    I talked to a person, a family member of a person that his 
son was simply killed because he did not have permit from 
military in his farm. It just happened 3 weeks ago. And women 
were raped, children were raped, too. I talked to a witness who 
saw the rape of the soldier to the little young girl in the 
pipeline--the village in the pipeline, because the two little 
girls, one is about 7, one is about 9, were bathing and playing 
in the river near their village. Two military go down there 
and, you know, start to grab them, and one older sister could 
run away, but the younger sister, 7-year-old, being raped by 
the military that are taking security of the pipeline. And the 
corporation know that. They admit that. And they knew that this 
happened, and they don't seem to do much about that.
    Last year, I personally took a village head from the 
pipeline region to the hospital in Thailand because he was 
beaten by the military simply because he was--military force 
him to provide timber for the military, and he and his 
villagers working for 6 weeks to provide timber for the 
military. And when military come and get timber, they found 
another pile of timber that villagers were collecting to build 
a school. But they want to take that, too. But he tried to stop 
it, and they beat him up really, really badly, and he was 
severely injured. And then because of help from his friend, he 
could come to Thailand because he couldn't get any medical 
attention in the area.
    It is so difficult to see the situation because I have been 
there for many years. I have been talking to many, many people, 
and we have been systematically documenting those human rights 
abuses for many years. And I just think about if this happened 
to you, to your family, how would you do that? The only thing 
for those people is hopelessness. They have no voice. They have 
no power. That is why I am here to tell you this story, and 
then I would like to give them hope. And, you know, if they 
know that somebody like you are doing something about this kind 
of horrible things to stop, they would be so happy. And I am so 
happy that--and, also, I would like to say that as you 
mentioned about Alien Tort statute, which corporations do not 
fancy that statute, and they want to take it away from--they 
want to take it away.
    So, I mean, this law is so important for the victims of 
human rights abuses to get justice in U.S. court. This law 
allows people from my country to get justice in United States 
court. It is from, you know, slave labor, killing, rape, 
torture, and other abuses happening on the Yadana pipeline. I 
think also you should be proud of having this law that holds 
corporations accountable.
    People in my country would welcome company if they know the 
corporation would respect the rights and the dignity as human 
beings. If a company like Chevron will not accomplish it in the 
kind of human rights abuses that I have described today, they 
wouldn't have to spend millions of dollars on public 
relationship campaign aimed at covering the truth. And people 
around the world would have more positive image of America. I 
mean, like it or not, corporations are perceived as 
representatives of the United States. When those de facto 
ambassadors are complicit in human rights abuses like Chevron 
still in my country, they see Chevron as American. It is an 
image that I believe we should not give to the world, that we 
will go anywhere, do anything, partner with the most brutal 
military to get whatever we need.
    I saw in the news Chevron recently pressured the Bush 
administration to cancel or suspend Ecuador trade preferences, 
unless the court case again Chevron for massive environmental 
damage in the Amazon is dropped, and then when you see that the 
spokesperson even say that ``we cannot let this little country 
screw around with big country like this,'' they treat people of 
the country horribly. They don't respect any human rights in 
the country that they are working in.
    So, another thing EarthRights International fully supports 
is passage of the Extractive Industry Transparency Disclosure 
Act. While the act does not address specific human rights 
abuses by corporations, transparency and accountability go hand 
in hand in addressing the root cause of these abuses; 
therefore, solutions must address both issues.
    Most importantly, laws that regulate corporations and 
prevent them from committing human rights abuses give people 
hope--hope that one day they will not be victims of human 
rights violations by anyone, and especially for American 
corporation who claim they are improving people's life. And I 
want to believe that one day, but for now what Chevron gives us 
is hopelessness, sadness, and suffering.
    Thank you so much for listening to us, and I believe that 
together we can help stop some suffering of the world.
    [The prepared statement of Mr. Ka Hsaw Wa appears as a 
submission for the record.]
    Chairman Durbin. Thank you. Thank you for coming such a 
great distance, and I will have some questions for you after 
the panel has had a chance to testify. But I really do 
appreciate your being with us today.
    Our second witness, Mr. Bennett Freeman, is a Senior Vice 
President for Social Research and Policy at Calvert. From 2003 
to 2006, he led Burson Marsteller's Global Corporate 
Responsibility practice, advising multinationals on policy 
development and communications strategies related to human 
rights, labor rights, and sustainable development. As Deputy 
Assistant Secretary for Democracy, Human Rights, and Labor from 
1999 to early 2001, he led the development of the Voluntary 
Principles. He received a bachelor's degree from the University 
of California at Berkeley and a master's degree in modern 
history from Oxford.
    Mr. Freeman, thank you for being here today, and please 
proceed.

STATEMENT OF BENNETT FREEMAN, SENIOR VICE PRESIDENT FOR SOCIAL 
      RESEARCH AND POLICY, CALVERT GROUP, WASHINGTON, D.C.

    Mr. Freeman. Thank you, Mr. Chairman, for the chance to 
testify today, and I do hope that my full statement can be 
entered into the record.
    Chairman Durbin. It will be.
    Mr. Freeman. Thank you very much.
    The theme of my testimony is the critical, indispensable 
role that governments--especially the U.S. Government--must 
play in leading the Voluntary Principles on Security and Human 
Rights, a corporate responsibility initiative which has yet to 
meet its potential but which, in my view, remains more 
necessary than ever.
    After the launch of the Voluntary Principles in December 
2000, the process drifted without clear direction and in 2006 
descended into a crisis of accountability and credibility--a 
crisis that has threatened the survival of the initiative in 
its present form but now appears to be very close to positive 
resolution. The near breakdown of the global plenary process 
has not only diluted focus on the imperative of strengthening 
implementation in key countries, but has obscured much of the 
concrete progress that is being made by a number of companies 
on the ground in many countries. That progress must now in turn 
be reinforced by stronger outreach to host country governments 
and security forces, which has seriously lagged due to 
insufficient priority, focus, and resources on the part of the 
U.S. and the other Voluntary Principles convening governments.
    The Subcommittee's focus on the Voluntary Principles is 
especially timely for four reasons that I will use to frame 
very briefly specific recommendations.
    First, the Voluntary Principles are more important than 
ever, not only to protect human rights and to promote corporate 
responsibility, but also to support U.S. foreign policy and 
energy security goals. There are a growing number of countries 
and regions where vital oil and gas and mining operations are 
in close proximity to active, latent, or potential new conflict 
zones in which a combustible mix of conditions and incidents 
threaten both human rights and the ability of companies to 
operate.
    As has been observed already in this hearing, Nigeria, 
Indonesia, and Colombia were the original three priority 
countries for the initiative. They appropriately remain so, but 
I want to underscore the urgency of accelerating and deepening 
Voluntary Principles implementation in Nigeria, where an 
upsurge in violence since late 2005 has put U.S. companies at 
greater risk, and especially the human rights of the peoples 
and communities of the Niger Delta. This has indeed become one 
of the most dangerous operating environments for business in 
the whole world and one in which the Voluntary Principles, 
unfortunately, should be invoked on almost a daily basis. Just 
over the past weekend, further incidents occurred that 
underscore the urgency of driving Voluntary Principles 
implementation forward in Nigeria.
    My full statement includes a partial list of the many, many 
other countries around the world where I believe the Voluntary 
Principles are highly relevant. It is a far longer list even 
than we had in mind back in 2000 when the original process was 
put together.
    The second reason I want to underscore briefly why this 
hearing is so timely is that the Voluntary Principles have 
become a lightning rod in the important global debate over the 
efficacy of voluntary versus legally binding standards bearing 
on the human rights responsibilities of business, far beyond 
the oil and mining industry. The ability of the Voluntary 
Principles to demonstrate their effectiveness, their 
credibility, will go a long way to bolstering confidence on the 
part of companies in other industries, including the Internet 
companies, which have been a focus of an earlier hearing of the 
Subcommittee, that, in fact, voluntary approaches can make a 
positive difference.
    The imminent agreement I referred to with respect to 
``participation criteria'' for the VPs would nearly, but not 
totally, complete the architecture of accountability which has 
been so long in the formation.
    A final element of that architecture is the completion of 
the long delayed reporting criteria for the initiative, which 
is absolutely essential as a baseline for any accountability 
whatsoever.
    The third reason I would like to highlight the importance 
and timeliness of the hearing is to underscore the strong 
leadership that is so necessary now on the part of the original 
convening governments to fulfill the initiative's potential by 
engaging much more directly and effectively with host country 
governments whose security forces are its most critical 
operational focus. And at the same time, I believe that the 
addition of new governments to the global plenary process can 
make the VPs both more inclusive and accountable at the same 
time.
    The embassies of the convening governments can and should 
play more active roles in facilitating dialogs with those 
governments and security forces to support implementation 
efforts by the companies.
    The final reason that I want to underscore why this is such 
a timely hearing is, frankly, the approach of a new 
administration which gives us the opportunity to renew and 
revitalize the State Department's leadership of an initiative 
which urgently needs greater focus, resources, and momentum to 
achieve its original and still vital objectives. It is so 
important for the next administration to strengthen focus here 
because the Voluntary Principles are far more than a corporate 
responsibility initiative. They are closely linked and must be 
even more so to a more strategic and comprehensive U.S. 
approach to energy security in a world of continuing conflict. 
I believe that there are a number of very specific steps that 
the new administration should take without delay, building on 
some of the recent progress that Deputy Assistant Secretary 
Krilla mentioned. I will not go through the entire list of the 
recommendations I make in my full statement. I would just 
highlight several quickly before concluding.
    One is to elevate the diplomatic priority attached to VPs 
implementation with key countries, especially Nigeria as well 
as Indonesia and Colombia, and to tie that implementation more 
closely to support for related initiatives such as the 
Extractive Industry Transportation Initiative, particularly in 
Nigeria where only a comprehensive approach can begin to ease 
the violent tensions and achieve structural reform in the Niger 
Delta.
    A second recommendation I would like to highlight is to add 
staff and assistance resources to embassies and USAID missions 
in priority implementation countries to support outreach to the 
host country governments, as well as to civil society and local 
communities.
    Two others I will just highlight very quickly before 
concluding. One is to adapt human rights training for security 
forces, both military and police, in priority implementation 
countries to cover Voluntary Principles content, programs such 
as IMET in particular. And, finally, to add elements related to 
the Voluntary Principles to OPIC loan guarantees and Ex-Im Bank 
projects in the extractives sectors in relevant countries.
    Mr. Chairman, let me conclude by emphasizing that renewed 
and revitalized State Department leadership of the Voluntary 
Principles can connect corporate responsibility and human 
rights to stronger governance and rule of law in countries that 
are critical to our foreign policy and energy security goals. 
While the Voluntary Principles address what are usually narrow 
issues and situations, they touch on some of the largest 
problems and challenges that our companies face in the world--
ones which cannot be solved without greater leadership, 
diplomacy, and resources from the U.S. Government consistent 
with our broader interests.
    Thank you very much.
    [The prepared statement of Mr. Freeman appears as a 
submission for the record.]
    Chairman Durbin. Thank you very much.
    Our next witness is Arvind Ganesan, who is the Director for 
Business and Human Rights at Human Rights Watch. He works with 
governments, companies, and multilateral organizations on many 
issues involving business and human rights, and has authored a 
number of publications on the subject. He has focused on human 
rights issues related to energy development in countries such 
as Angola, Burma, Colombia, the Democratic Republic of Congo, 
Indonesia, and Nigeria. He testified previously at the 
Subcommittee's hearing on ``Global Internet Freedom.'' I thank 
you for joining us again, Mr. Ganesan.

   STATEMENT OF ARVIND GANESAN, DIRECTOR, BUSINESS AND HUMAN 
      RIGHTS PROGRAM, HUMAN RIGHTS WATCH, WASHINGTON, D.C.

    Mr. Ganesan. Thank you, Mr. Chairman, for the opportunity 
to speak today on natural resources, human rights, and 
corporate responsibility.
    As you noted earlier, energy prices are at all-time highs 
and have strained consumers and companies, and as policymakers 
are searching for ways to wean the U.S. from foreign oil, we 
are missing a part of the debate, and that is, who receives the 
money and what actually happens on the ground. And the picture 
is not a pretty one.
    Over 60 percent of U.S. oil comes from abroad. But, sadly, 
corruption is rife in many of these countries, and these 
governments are often undemocratic and abusive.
    We have seen the creeping autocracy in Russia and Venezuela 
by governments who are emboldened by billions of petrodollars. 
And on September 19th, Venezuela expelled our staff from the 
country after we issued a report critical of President Chavez.
    U.S. companies are major investors in many of these 
countries, and U.S. consumers pay for this oil.
    In Angola, we documented how the government, ruled by the 
same president for almost 30 years, could not account for oil 
revenue equivalent to about 9.25 percent of the country's 
annual GDP between 1997 and 2002. By comparison, it would be as 
if the Government ``lost'' $1.2 trillion a year for 5 years 
here in the U.S.
    At the same time, Angola had some of the world's worst 
human development indicators and was considered among the most 
corrupt. Angola is the sixth largest supplier of oil to the 
United States.
    Equatorial Guinea is an extremely repressive country, ruled 
by a dictator who seized power from his brutal uncle in 1979. 
Oil has fueled an almost 13,000 percent increase in the 
country's GDP since 1992, but the State Department, IMF, and 
others have repeatedly noted how the Government does not spend 
adequate money on its own people. However, the president and 
his family lead lavish lifestyles. The most brazen example is 
the president's son, Teodorin, who has purchased multimillion-
dollar houses and exotic sports cars throughout the world--
apparently on a government official's salary of about $4,000 a 
month. In April 2006, he bought a 15,000-square-foot mansion on 
an estate in Malibu for $35 million, the same year the 
government only spent about $12 million for social service 
infrastructure. The U.S. imports about 66,000 to 101,000 
barrels of oil per day from this country.
    In many parts of the world, oil and other natural resources 
are located in the midst of conflict or have become flashpoints 
for other disputes. Government and companies have legitimate 
reasons to safeguard their employees and operations, but in too 
many cases, security for the extractive industry has meant 
human rights abuses in countries such as Burma, the Democratic 
Republic of Congo, Nigeria, Indonesia, and elsewhere.
    To help address these problems, we have worked with 
industry, governments, and other human rights organizations to 
develop the Voluntary Principles on Security and Human Rights. 
But even with the new procedures in place that people have 
discussed, we do not really know whether companies are fully 
implementing the VPs since there are no meaningful reporting 
criteria, no monitoring mechanisms to assess compliance, and 
because at the end of the day they are voluntary. And we are 
concerned that current or new member governments will not 
actually change their practices or meet their responsibilities 
because the standards so far are too weak to actually compel 
them to do so.
    In order to address these problems, the State Department 
and other agencies should have and should dedicate the 
resources to fulfill their responsibilities under the VPs, and, 
crucially, they should be required to report on company and 
government compliance regularly to Congress.
    Other steps that the U.S. can take to ensure better 
implementation of the VPs is, like Bennett Freeman said, 
ensuring that the Export-Import Bank and Overseas Private 
Investment Corporation require extractive companies to have 
effective policies to address security and human rights and 
monitor their compliance; ensure that military assistance 
programs are contingent on respect for human rights and that 
there is accountability for violations; and consider 
legislation to ensure that extractive companies and private 
security providers follow human rights standards. I think we 
see over and over again where trusting companies to voluntarily 
do the right thing oftentimes falls short. And to combat the 
corruption and the misuse of funds that often accompany these 
abuses, Congress should support the Extractive Industries 
Transparency Disclosure Act, which, on behalf of a number of 
people, I would like to thank you for your leadership on this 
issue. But also ensure that the SEC and Department of Justice 
aggressively investigate violations of the Foreign Corrupt 
Practices Act, and strengthen the U.S. anti-kleptocracy 
initiative first announced by President Bush in 2005. In 
particular, ensure that the relevant branches of Government 
aggressively identify corrupt officials and use existing 
anticorruption and anti-money-laundering laws to thwart them.
    And, finally, start a program to identify assets in the 
U.S. obtained by corrupt means and work to freeze them and 
repatriate them to their rightful owners: the citizens of those 
countries.
    These actions will send the message to companies and 
corrupt officials that their illicit activities and abuses will 
not be tolerated, and it will send the message to the citizens 
of those countries that the U.S. will stand with them so that 
they can hold their governments accountable.
    Now is the time to change things so that these problems do 
not come back to bite us through instability, skyrocketing 
prices, corrupt governments, abusive security forces, or 
corporate excess.
    Thank you, and I look forward to your questions.
    [The prepared statement of Mr. Ganesan appears as a 
submission for the record.]
    Chairman Durbin. Thank you, Mr. Ganesan.
    Our final witness in this panel is Mr. Nnimmo Bassey. He is 
the co-founder and Executive Director of Environmental Rights 
Action, a Nigerian advocacy organization. He has documented 
environmental and human rights abuses involving the oil and gas 
industry in Nigeria and campaigned for peaceful resolution of 
environmental and human rights challenges. Mr. Bassey is an 
architect by training and has published four books of poetry.
    Thank you for traveling so far to be with us today, Mr. 
Bassey. Please proceed.

 STATEMENT OF NNIMMO BASSEY, EXECUTIVE DIRECTOR, ENVIRONMENTAL 
                 RIGHTS ACTION, LAGOS, NIGERIA

    Mr. Bassey. Thank you, Mr. Chairman, for this opportunity 
to address your Committee on the issue we are focusing on.
    I come from the Niger Delta, and over the past 15 years, I 
have worked on human rights issues and environmental rights 
abuses in the Niger Delta. Oil has been exploited in commercial 
quantities in the Niger Delta for about 50 years now, and there 
have been 50 years of dashed hope, 50 years of environmental 
degradation, and 50 years of human rights abuses. These abuses 
heightened in the last two decades, and we have noticed that 
this has been as a result of big corporations of the United 
States not being willing to engage in dialog with communities.
    Now, before I speak further on that, I would like to say 
that the oil industry activities are inherently challenging to 
any environment, especially the Niger Delta environment, 
because right from the exploratory stages where seismic lines 
are cut, we have the experience of heavy deforestation and 
invasion by opportunistic people who want to take advantage of 
the opening up of the land for them to exploit also. And when 
oil exploitation actually starts drilling, it is accompanied by 
a discharge of radioactive waste into the water bodies and onto 
the land.
    And then we have a series of oil spills. Industry sources 
place it at about 300 oil spill incidents every year, but 
independent observers suspect that we have up to 1,000 oil 
spill incidents every year in the Niger Delta. Most of these 
spills are not reported, and most of the spills are not ever 
cleaned adequately. And so this makes the land and the water 
bodies unproductive for people who depend on water, natural 
streams and creeks for potable water, and who depend on the 
land for agriculture on which they subsist.
    Besides this, we have massive cases of gas flaring. The gas 
that comes out when oil is extracted could either be reinjected 
into the ground or harnessed for use as liquified natural gas. 
But it is more cheaper for the industry to just set the gas on 
fire, and so for decades, about $15 million worth of gas goes 
up in smoke in the Niger Delta every day--day and night, no 
break. And this gas flares up right in the communities where 
people live, and some of them in the middle of the communities. 
If it were just economic wastage, that would not be so much of 
a challenge for us. But it is a very big environmental issue 
because the gas flares release a whole lot of greenhouse gases 
into the atmosphere. They release other toxic elements that 
cause blood disorders, cancer, bronchitis, asthma, and also 
acid rain which challenges the corrugated iron sheets that 
community people use to roof their houses. They have to replace 
these roofs, and so we have a situation where the economic life 
is completely dislocated by oil spills, seismic lines being 
cut, and also this gas flaring that goes on continually.
    Now, over the years, the community people in the Niger 
Delta have always sought avenues for dialog with the 
corporation and the state, but over the years we have noticed 
also that whenever they make this move, they are visited with 
disproportionate use of force, human rights abuses, and by the 
use of the military. And the U.S. Department has repeatedly 
reported that the industry did not address it and the military 
are engaged in extrajudicial killings and also do not show any 
form of accountability.
    By 2003, the Niger Delta region was already characterized 
as a high-fatality region in the world, comparable then to Iraq 
and Afghanistan. I do not think that is the case now. Further, 
recently we have got a rise in militancy in the Niger Delta, 
and we condemn the use of violence by any people on any side of 
the debate, either from the communities or from the military or 
from the corporations. And we call for dialog, which is what 
the community people have been asking for over the years, and 
greater transparency in dealings between the corporations and 
the military in Nigeria through the government.
    Now, I would like to give two examples of where communities 
have sought dialog and have been met with violence. The first 
case would be the Ogoni people. The Ogoni in early 1990s 
organized themselves under the Movement for the Survival of the 
Ogoni People under the leadership of Ken Saro-Wiwa, one of 
Nigeria's foremost poets, playwrights, environmentalists, and 
minority rights activists. He was murdered by the state in 
1995, after a trial at which Shell had a watching brief, after 
the kangaroo trial at which he was found guilty. And really to 
underscore the fact that this was an illegal act of 
extrajudicial killing, the Nigerian Government has only this 
week named a street in the Federal capital after Ken Saro-Wiwa.
    Now, the Ogoni people engaged in a model peaceful mode of 
agitation by producing the Ogoni Bill of Rights in which they 
highlighted what they wanted from the state and how they wanted 
to negotiate and how they wanted respect and dignity to live as 
citizens in the country. But that was not respected, and with 
the very serious and active engagement of Shell and the 
Nigerian state, the people were visited with extreme violence 
that led to many environmental refugees, some of whom have not 
returned to Ogoniland even as I speak.
    Now, moving over to 1998, which was long before the 
emergence of militant activities in the delta, we had an issue 
that occurred on a Chevron facility known as the Parabe 
platform. This was in May 1998. Community leaders from the 
Ilaje community had gone to the platform in a peaceful 
demonstration and said they would sit there until Chevron 
officials go to the village on shore to discuss with community 
elders about simple things they were complaining about--lack of 
employment and also environmental degradation. And a few days 
later, they received information that there was some kind of 
progress in the discussions on shore in the village with the 
community leaders. And the youth said, ``Well, if that is the 
case, we are ready to go back. We are ready to leave the 
platform.'' And they would leave the following morning because 
they got the message late in the evening. But by the time they 
woke up in the morning, Chevron conveyed troops with the 
helicopters onto the platform, and the resulting attack--the 
attack that followed resulted in the death of two youths, 
injury to many, and others were hauled away into detention in 
very inhumane conditions. And we are grateful that that case 
eventually is going to trial next month in a Federal high court 
in San Francisco.
    Now, just 2 months ago, I decided to visit Ilajeland to see 
whether things have changed 10 years after that attack. When I 
got through the creeks and got to the community, I was received 
by the leader of Awoye village in Ilajeland, and he told me in 
discussion that usually they welcome visitors by presenting two 
things: one, a glass of water; and, two, fish to eat. And I 
said, ``I love to drink water and I like to eat fish.'' He told 
me, ``Well, we don't have any fish,'' because the canal dredged 
by Chevron to move in their equipment has brought salt water 
from the ocean and polluted the entire freshwater system and 
also degraded their farmlands and the people were more or less 
destitute. I said, ``OK. If you don't have fish, give me water 
to drink.'' And he brought me water that did not have this 
color, water that was not even as clean as green tea. And I 
said, ``I would not be able to drink this, with all due 
respect. Where did you get this water from?'' And he told me 
that they fetched that water from the Chevron facility. And I 
said, ``How could you fetch this kind of water from the Chevron 
facility? Why would you drink it?'' They said they have no 
option. I said, ``Don't you know that this is not healthy?'' 
And they said, ``Even Chevron tell us it is not healthy to 
drink the water, but we have no option.'' And that is what they 
are drinking.
    And so we have over the years seen cases where communities 
demand simple things, demand for dialog, and they are met with 
indifference. And when there is a response, it is a lethal 
response using the military and attacking the people.
    I would like to conclude, Mr. Chairman, by saying that as 
far as the environment and human rights are concerned, we all 
live downstream. And it is important to note that this is one 
world that we live in, and abuses anywhere must be exposed 
everywhere. I believe that the Voluntary Principles I have 
heard so much about is something that should be made into 
something mandatory and legislated upon, because industries are 
not, as we have experienced, willing to take any voluntary 
action that diminishes their profit margins.
    I thank you, Mr. Chairman.
    [The prepared statement of Mr. Bassey appears as a 
submission for the record.]
    Chairman Durbin. Thank you, Mr. Bassey. I appreciate the 
sacrifice that you and Mr. Ka Hsaw Wa and all of the witnesses 
made to be with us today.
    You noted that the State Department's Human Rights Report 
found that Nigeria's human rights record is poor, that Nigerian 
security forces committed extrajudicial killing and used 
excessive force. You also testified that Chevron ``directly 
requested the intervention of the Nigerian forces, regularly 
houses and feeds those forces, and pays them above their 
government salaries.''
    What should Chevron do to address this situation?
    Mr. Bassey. Mr. Chairman, I believe that Chevron, No. 1, 
has to be a responsible corporate citizen in Nigeria. They have 
to operate in a way that is not characterized by double 
standards, and they have to stop doing things that further 
worsen the human rights situation in the oil fields. They 
should deal with the military in a more transparent way and 
report their dealings clearly. We do not need to scream and 
struggle before we get information about how they are dealing 
with the military. They have to show very good examples 
following the principles to which I believe they are already 
endorsing, the Voluntary Principles. They have to put this in 
practice in their daily dealings in Nigeria. Otherwise, the 
situation is that nothing has changed and it is the same old 
story.
    Chairman Durbin. One of your recommendations is that 
Chevron and others directly report the payments they make to 
the military forces and security forces of other nations. I 
assume that would be one of the starting points for this issue. 
The other would be that they put money into the actual training 
of the security forces regarding the standards of acceptable 
human conduct. I think both of those things are very obvious.
    I am sorry that Chevron is not here today. I would love to 
hear their side of the story, if they have one to give us. It 
would have been very interesting to hear their response to 
this.
    Mr. Ka Hsaw Wa, I have basically the same question for you. 
You have testified that Chevron has employed the Burmese 
military to provide security on the Yadana pipeline and that, 
as a result, there have been horrific human rights violations. 
How do you believe that Chevron should address this?
    Mr. Ka Hsaw Wa. From my perspective, Chevron can address 
this issue by really committing to change the situation. For 
example, with regard to the military, they can train them, or 
monitor the situation very closely, or let independent groups 
monitor the situation. For example, when I talked to the 
villagers, they always said that the military tells them if the 
corporation goes, you will be in trouble. When Chevron and 
corporation people closely monitor the situation, the human 
rights situations decrease, and, could disappear--but the thing 
is they just simply are going around, they don't put the staff 
member on the ground as, according to some of the villagers I 
talked to. But they do not monitor human rights violations very 
closely. That is one thing.
    The other thing is they do have influence over military 
government--I strongly believe that--because when I talked to 
the villagers, they were telling me that whenever they talk to 
the corporation employee, the soldiers around there always come 
and listen. They do care about that. And later those, military 
behave better.
    And so my perspective is Chevron could simply commit to 
human rights, to changes, and then just simply to monitor the 
situation of the pipeline very closely.
    Chairman Durbin. Mr. Bassey, you also testified very 
eloquently about the environmental damage caused by oil 
production in the Niger Delta--oil spills, gas flares, and 
dredging. I was particularly struck by a quote in your 
testimony from a man--I hope I pronounce his name correctly--
Bola Oyinbo--and I know I will not pronounce this correctly--an 
Ilaje--is that correct, Ilaje community?
    Mr. Bassey. Bola Oyinbo, Ilaje community. That is fine.
    Chairman Durbin. That was pretty close. An Ilaje community 
leader, who said, and I quote--``Go to Awoye community and see 
what they have done.'' This quote goes on to say, ``Everything 
there is dead: mangroves, tropical forests, fish, freshwater, 
wildlife. All killed by Chevron.''
    Can you elaborate on this environmental damage? And do you 
consider this to be a human rights violation?
    Mr. Bassey. Mr. Chairman, let me begin by saying that, 
unfortunately, Bola Oyinbo died a few years after the Parabe 
attack, Bola that we are quoting in this testimony. He was one 
of the leaders of the demonstrating youths who went to the 
platform. And if he had been alive, he would have been in the 
United States next month testifying in the court case.
    Now, the sort of environmental degradation we have in the 
Niger Delta is nothing short of human rights abuses. We cannot 
distinguish between the kind of environmental abuses we face 
and any other form of human rights. I believe personally that 
the environmental violence is just as grave as violence by the 
gun, because this violence completely cuts people off their 
means of livelihood. They just do not have a way--they 
struggle. Fishermen depend on imported fish just to eat because 
the waterways are polluted and the oil spills are hardly ever 
cleaned. You should visit the Niger Delta. You will find that 
the best technological advanced methods used by these high-tech 
corporations is just buckets and spades to clean spills. And 
when they are tired of cleaning the spills, they simply set the 
rest on fire. So we have got fires being burned, and even the 
river is on fire. So when you visit the Niger Delta, we always 
advise people if you see fire don't drop into the water, 
because the water may be the next to be on fire, because spills 
are so massive and so frequent. And so we have aquatic life, 
animal life, and everything just being so challenged by the 
activities of Chevron, Shell, ExxonMobil, and the other 
corporations. It is really--there is no other way to 
characterize this than to say that this amounts to enormous 
human rights infringement.
    In fact, in the case of gas flaring, some communities sued 
the corporations, especially Shell, and asked the court in 
Nigeria to declare if gas flaring is illegal activity and what 
it means about human rights. And the judge did agree with the 
communities in November 2005 in a judgment in the Federal high 
court in Benin City where I live, that gas flaring in Nigeria 
is an illegal activity; No. 2, that it is a human rights 
affront and that it should be stopped. But the particular gas 
law which judgment was given, which is run by Shell 
Corporation, gas flaring is still continuing there. About 3 
weeks ago, when community people went on an environmental site 
visit just to see the flare, Shell ordered troops to arrest 
them, and 25 community people, environmental NGO members, and 
journalists were detained for over 5 hours by military on 
behalf of Shell for just going to look at the gas flare.
    Chairman Durbin. Are you allowed to travel in this area, 
Niger Delta?
    Mr. Bassey. Yes, anybody can travel in Niger Delta, but you 
just have to be ready for whatever you meet on the way.
    Chairman Durbin. Mr. Freeman, you were nodding when I 
talked about environmental damage and human rights violations. 
It is hard to separate the two. If you are endangering the 
lives of people, cutting them off from their livelihood, 
destroying the environment they live in, this certainly reaches 
a level of assault and battery at least.
    Mr. Freeman. I would agree, Senator. I had the opportunity 
to visit the Niger Delta in July of 2000 when I was still 
serving in the State Department with the specific purpose of 
consulting on what was to become the Voluntary Principles. And 
I traveled to a number of communities and villages in the 
region and was struck by the obvious pollution visible while 
traveling by motorboat through the mangrove swamps.
    I would also note the dramatic but really degrading effect 
of the gas flaring that has been mentioned, which continues, 
and, unfortunately, Shell has not met its full commitment to 
diminish that gas flaring.
    It is very difficult to be on the ground for any period of 
time in the Niger Delta with any human rights sensibility 
whatsoever and to observe the environmental degradation that is 
everywhere, not to view that as a human rights abuse.
    Chairman Durbin. Let me ask you this: Mr. Bassey has 
suggested, Mr. Freeman, that Congress should consider enacting 
legislation creating criminal penalties for American companies 
that are complicit in human rights abuses in conflict zones or 
countries with repressive governments. I would like to ask both 
you and Mr. Ganesan what is your reaction to this suggestion. 
Is the Foreign Corrupt Practices Act a possible model?
    Mr. Freeman. The Foreign Corrupt Practices Act is indeed a 
possible model, as are the provisions which have been the basis 
of lawsuits over the last decade in the Alien Torts Claims Act. 
I believe that unless companies can demonstrate their 
commitment to and implementation of the Voluntary Principles on 
the ground in key countries such as Nigeria, such legislation 
might be necessary.
    That said, I have believed in the voluntary approach here 
taken explicitly by the Voluntary Principles, but have been 
dismayed by the failure of the process to fully achieve the 
potential positive contribution to human rights. I could 
envision, if not explicit legislation around criminal 
penalties, I could at a minimum envision explicit legislation 
to bolster implementation of the Voluntary Principles. One way 
to do so would be to require reporting by companies 
participating in the process. I think that kind of legislation 
would be necessary and appropriate unless the Voluntary 
Principles process can finally, after almost 8 years after its 
launch, finalize the reporting criteria.
    I also suggest in my testimony that Ex-Im Bank projects and 
OPIC guarantees require Voluntary Principles commitment and 
implementation for certain projects in certain countries. I 
think that would be an appropriate objective for legislation.
    But criminal penalties I think may be necessary, but I do 
think that at least the Alien Torts Claims Act provides a basis 
for those lawsuits, and I look forward to a next administration 
that will not repeat the efforts of the current one to 
defenestrate the use of Alien Torts Claims Act as a basis for 
these kinds of complaints in extreme situations.
    Chairman Durbin. The Defenestration of Prague I remember 
from my history.
    Mr. Ganesan, could you comment on that?
    Mr. Ganesan. Yes, I think the Foreign Corrupt Practices Act 
would be extremely useful in the context of this type of 
legislation for a couple of reasons. One is the Voluntary 
Principles actually lay out a process that is very similar to 
the FCPA in that a company is supposed to--is required to do a 
risk assessment to determine whether there are risks of abuses, 
to actually intervene or deal with state governments and 
private security forces. And contrary to what the State 
Department said earlier, if an abuse occurs, they are actually 
required to investigate the veracity of the case, report it to 
law enforcement authorities, and follow up on the proper 
resolution of those cases. It is not simply a roundtable 
discussion with the State Department, NGOs, and others. There 
is a path it can go down.
    The FCPA does the same thing in that it requires a company 
to have accounting processes in place to prevent bribes from 
being paid, and it can also punish them if their systems break 
down and they actually pay bribes. So it is a very useful model 
because both would require some kind of risk assessment, both 
would require an assessment of whether they have policies and 
procedures in place, and both could potentially hold companies 
culpable if they did not have the systems in place or, in fact, 
if abuses occurred and they did nothing about it. So I think it 
would be quite useful and would be quite complementary to how 
the Voluntary Principles are laid out.
    Chairman Durbin. I find it hard to understand why a corrupt 
practice such as bribery would be prohibited under American law 
even if it is done overseas and we do not treat human rights 
abuses and environmental abuses the same way. That would seem 
to me to be at least morally comparable.
    Mr. Ka Hsaw Wa, you have been pretty critical of the 
Voluntary Principles. In your testimony, you suggested that 
there is no mechanism for enforcement, no remedy for 
infraction, and no government that will monitor these 
corporations' compliance, and that failure to comply will 
subject these companies to the court of public opinion, but no 
other court. And that is assuming the public learns about the 
infractions. You say we must develop laws, not voluntary 
standards.
    So you do not seem like you are a big fan of Voluntary 
Principles.
    Mr. Ka Hsaw Wa. I came from a country like Burma, and then 
I see what happened on the ground. I see what corporations are 
doing and ignoring stuff. So those voluntary mechanisms are not 
going to work. I believe that the only thing that is going to 
work for those corporations working in a country like Burma is 
only clear law, like Alien Torts Claims or other law that, you 
know, hold them accountable for their behavior. But voluntary 
in a country like Burma, they just do not care. They do not 
even put their energy resources on the ground.
    Chairman Durbin. You mentioned Chevron. Are there any other 
oil companies based in America that do business in Burma other 
than Chevron?
    Mr. Ka Hsaw Wa. No. Texaco was there, but they pull out of 
Burma after a while.
    Chairman Durbin. Mr. Bassey, Shell, ExxonMobil, and Chevron 
are the largest oil producers in Nigeria. In addition, I 
believe that the French company Total and Italian company Agip 
operate in Nigeria. the three largest companies--Shell, 
ExxonMobil, and Chevron--are all participants in the Voluntary 
Principles. Shell and Chevron have been involved from the start 
of the process, and ExxonMobil since 2002.
    So based on your experience on the ground in Nigeria, how 
effective have the Voluntary Principles been in preventing 
human rights abuses and environmental abuses committed by 
public and private security forces and other employees of these 
companies?
    Mr. Bassey. I would say, Mr. Chairman, that the principles 
have not worked on the ground in Nigeria. Chevron is a 
signatory to it, and I would give you one example. In just July 
of this year, one community that was complaining about 
Chevron's gas flare, Chevron used the military to intimidate 
the community people, and they had to write a petition to the 
Governor complaining about Chevron using the military to 
intimidate and harass community members.
    So I would say very safely that these principles are yet to 
take root in Nigeria.
    Chairman Durbin. That is the best I can see at the moment, 
too. It seems to be a statement of principles, some 
aspirations, but without enforcement or even publication of 
violations, it does not take us very far.
    I am just struggling with the notion that bribery is a form 
of conduct that we find reprehensible and the things that have 
been described here in terms of human rights abuses and 
environmental degradation are not. I cannot follow the logic 
behind that.
    I want to thank you for coming, all of you, and for your 
testimony today. I would like to place into the record 
statements from Senators Leahy and Brownback and statements 
from the following organizations and individuals: Amnesty 
International, Business for Social Responsibility, East Timor 
and Indonesia Action Network, the Fund for Peace, Global 
Witness, International Council on Mining and Metals, 
International Labor Rights Fund, Jubilee South Africa, Oxfam 
America, Abigail Abrash Walton of Antioch University. And since 
there is no one here to object, they will be put in the record.
    I also want to give special thanks to my staff for all the 
work that they have done for this hearing and so many others. I 
was concerned, as we undertook this mission of a Human Rights 
Subcommittee, that we would not accomplish much and nobody 
would notice what we had done. Well, I do not know if notice 
has been taken, but I think we have accomplished a few 
important things, and this hearing is an example.
    I will tell you that we are going to follow through with 
letters to these oil companies. We are going to send them your 
testimony. We are going to ask them point-blank to respond to 
them. And if they fail to respond, we will assume that they 
have no defense to offer. I find their conduct as described 
here absolutely objectionable, and if they have a defense or 
more facts to share with us, I wish they would have joined us. 
If not, I hope they will provide them now. I think there is 
much work to be done.
    I am going to bring this hearing to a close by thanking our 
witnesses. I want to urge everyone to reflect on the testimony 
of all of our witnesses, but especially Mr. Bassey and Mr. Ka 
Hsaw Wa, about the devastating impact that extracting oil, gas, 
and other natural resources has on the people in poor countries 
around the world. How can we ignore this? I mean, we set our 
trash out 1 day a week and hope to never see it again. But to 
buy our gasoline and oil and these products and not acknowledge 
the price that is being paid to bring them to us I think is 
something that does not speak well of our country. We can do 
better. We cannot ignore the human toll that is being taken.
    As was highlighted today, governments have a responsibility 
to prevent human rights abuses. For countries that are home to 
the largest companies, like the United States, this also 
includes a responsibility to ensure that our companies are 
taking appropriate steps to prevent human rights abuses. And 
that will be the focus of this Subcommittee as we move forward.
    I will entertain any statements from my colleagues and 
share questions with you as submitted. I thank you all for 
being here today, and this hearing stands adjourned.
    [Whereupon, at 12:20 p.m., the Subcommittee was adjourned.]
    [Questions and answers and submissions for the record 
follow.]

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