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BURMA: China’s Thirst for Oil Ignores Environment, Rights

Marwaan Macan-Markar

BANGKOK, Oct 31 2008 (IPS) - The largest island off Burma’s west coast is emerging as another frontier for China’s expanding plans to extract the rich oil and gas reserves of military-ruled Burma.

Initial explorations by a consortium, led by China National Offshore Oil Company (CNOOC), has left a deep scar on Ramree Island, which is twice the size of Singapore and home to about 400,000 people. ‘’They have destroyed rice fields and plantations when conducting the seismic surveys and mining the island in search of oil,’’ says Jockai Khaing, director of Arakan Oil Watch (AOW), an environmental group made up of Burmese living in exile.

‘’The local communities have been directly and indirectly affected,’’ he Said during an IPS interview. ‘’Hundreds of people have been forced to relocate as a result of the drilling conducted near their communities. The locals hate the Chinese; their world has become crazy after the Chinese arrived.’’

CNOOC has been pushing ahead with its work since early 2005, with no attempt to consult the local residents and showing little regard to such notions as corporate social responsibility, adds Jockai. The Chinese company, which is listed on the New York and the Hong Kong stock exchanges, has ‘’not conducted the required environmental impact assessments and social impact assessments that are recognised internationally as a must before exploration work begins.’’

To dispose the waste from its drilling sites, ‘’CNOOC workers dug shallow canals designed to carry the (toxic) ‘drilling mud,’ or wastewater containing oil, away from the drilling sites and into Chaing Wa Creek, which curves past several local farms before flowing into the Bay of Bengal,’’ states a report by AOW, released in mid-October. ‘’This arbitrary disposal can make soil in surrounding areas unsuitable for plant growth by reducing the availability of nutrients or by increasing toxic contents in the soil.’’

Concerns about the cost of letting China tighten its grip on the natural resources in Burma (or Myanmar) has also been expressed by other groups, like EarthRights International (EI), a U.S.-based group championing human rights. There are 69 Chinese companies involved in 90 ‘’completed, current and planned projects’’ in the oil, gas and hydropower sectors in Burma, EI revealed in groundbreaking report released in late September.

That number marks an over 200 percent increase in the number of Chinese energy developers thought to have had existed a year before. ‘’Given what we know about development projects in Burma and the current situation, we’re concerned about this marked increase in the number of the projects,’’ the rights lobby stated in the report, ‘China in Burma: The Increasing Involvement of Chinese Multinational Corporations in Burma’s Hydropower, Oil and Natural Gas, and Mining Sectors.

‘’China is using Burma’s military dictatorship to its advantage as it goes in search of oil and gas. There are no rules and regulations for Chinese companies to follow in Burma,’’ Ka Hsaw Wa, executive director of EI, said in an IPS interview. ‘’This will hurt the future of Burma.’’

Such criticisms come at a time when China has begun to show signs that the environment cost of its projects abroad cannot be ignored. ‘’The country lacked comprehensive environmental protection policies in its overseas projects, although investment had been expanding,’’ states a report released in mid-September by the Chinese Academy for Environmental Planning (CAEP), according to the ‘China Daily’ newspaper.

‘’China’s overseas investment and aid mainly focuses on exploring oil and other resources, processing and manufacturing, and construction in African and Southeast Asian countries,’’ the English-language daily added. ‘’Without proper management, such projects are likely to cause environmental problems, the (CAEP) report said.’’

Burma, in fact, will prove to be an ideal testing ground, given that China emerged as the military-ruled country’s biggest investor in the country’s power sector. The money flowing in from such foreign direct investments and the sale of gas has helped to prop up a junta notorious for suppressing its people through many forms of abuse.

In 2006, the junta earned an estimated 2.16 billion U.S. dollars from sales of natural gas to Thailand, which accounts for close to half of Burma’s export earnings and is the single largest source of foreign earnings. In 2008, Burma is expected to earn 3.5 billion US dollars from export of gas, according to one estimate.

But little of these benefits trickled down to the country’s beleaguered people. Consequently, Burma ranks as one of the world’s least developed countries. And having an abundance of natural resources has not improved the power supply in the country for the people either. Regular blackouts are frequent in Rangoon, the former capital, and elsewhere.

The junta has profited in other ways, too, from China’s energy interest in Burma. ‘’Beijing has come to the junta’s rescue and protects it from criticism at international forums like the U.N. Security Council,’’ says Win Min, a Burmese national security expert teaching at a university in northern Thailand. ‘’A strong relationship of mutual benefit has developed since 1988.’’

In exchange for letting Chinese companies exploit its natural resources, the Burmese dictatorship has got military hardware from Beijing. They range from fighter jets and armoured carriers to small weapons, Win Min told IPS. ‘’The junta will open the country to China because the military regime needs Beijing more than the other way around.’’