BURMA: New York Considers Sanctions On Business with Rangoon

By Farhan Haq Reprint | | Print |

NEW YORK, Feb 23 1996 (IPS) - New York’s City Council Friday began an effort to penalise companies that do business with the military regime in Burma.

The City Council, New York’s legislative body, is considering Bill 647, which would bar firms that invest in Burma from receiving city contracts. The bill is modeled on legislation prevented companies investing in apartheid-era South Africa from obtaining New York contracts.

“This bill is modeled on the South Africa legislation,” says City Councilman Tom Duane, one of the bill’s co-sponsors. “I think this sends a strong signal to financial services companies that also have offices in New York that they not do business in Burma.”

The bill’s backers hope to prod the Burmese junta into recognising the country’s democratic opposition, which won multi- party elections in 1990. The military annulled that poll. The Council has begun with a round of hearings on rights abuses.

Duane hopes the bill could be passed by the City Council by next month, although he adds that several hearings are required before the body approves legislation.

“New York City has a tremendous amount of political ‘juice’ worldwide,” Duane adds. “I hope if this bill passes that other cities will follow” with Burma sanctions.

Supporters of the bill — including the National Coalition Government of the Union of Burma (NCGUB), which supports opposition leader and Nobel Laureate Daw Aung San Suu Kyi — say it could have a major impact on investments to Rangoon.

“The United States is the fourth-biggest investor in Burma,” says Thaung Ahtun, the NCGUB representative in New York. If the City Council bill passes, he argues, firms from Chase Manhattan Bank to the Unocal Corporation would be unable to pursue joint- venture projects with Burma’s military junta.

That loss, in turn, could pressure the military-led State Law and Order Restoration Council (SLORC) to lift political restrictions on Suu Kyi’s followers and restore the country’s aborted democratic process.

“We’re not against foreign investments in Burma,” Ahtun argues. “But the question is whether it is the appropriate time.” As matters stand, the NCGUB contends, any investment only goes into military coffers, delaying chances for any democratic reforms and fueling war against ethnic minorities.

“The profits will flow directly into the pockets of the generals,” Ahtun claims. And many business deals, he adds, contribute directly to repression as the junta relocates villagers or uses forced labour to push through projects.

Most of the U.S. investment deals being proposed, he says, are joint-venture deals with the government, such as Unocal’s one- billion-dollar project to develop a natural gas pipeline in southern Burma. He contends that, to pave the way for that project, the government has displaced thousands of minority Karen and Mon peoples from the area, and placed stiff security in the region.

Human Rights Watch, in its 1996 World Report, confirms reports of massive relocations of Karen and Mon villagers and of forced labour among thousands of people in the south and near the Salween River.

Chase Manhattan, a New York-based bank that would be affected by the City Council sanctions, is preparing to support a dam project run by the government at the Salween River, Ahtun says.

Beyond the immediate effects of penalising companies that deal with Rangoon, the proposed New York sanctions also are part of a broader campaign to build local pressure against the Burmese junta.

The U.S. government does not actively discourage investment in Burma. But several cities — notably Madison, Wisconsin, and Berkeley, California — have already enacted selective purchasing laws that restrict contracts with companies dealing with Rangoon. The state of Massachusetts is considering similar laws.

The scope of opposition to Burma, out of all the world’s authoritarian states, might seem peculiar given that Washington already refuses to provide economic or military assistance to Rangoon. U.S. businesses as a whole account for some eight percent of the 2.65 billion dollars in international investment Burma receives yearly.

But Duane argues, “The human rights situation in Burma is so extreme that this kind of action is believed necessary.”

Washington also cites Rangoon as a main player in the world heroin trade, and the SLORC’s opponents accuse it of coddling known drug traffickers. Ahtun claims increasing heroin production in Burma had helped spark a 20 percent rise in heroin addiction in New York in 1995 alone.

The growing stigma attached to dealing with Burma has prompted several firms to announce they will no longer do business there. Levi Strauss, a clothing retailer, Eddie Bauer, which manufactures backpacks, and the Macy’s-Federated retailers have all said they will not deal with Rangoon.

Speaking to The New York Times, one Levi Strauss spokesman, Michael Woo, cited as reasons for the pull-out “health and safety issues, the human rights environment and the possible impact on our brand image.”

But for other firms, Burma — refKrred to by the SLORC as Myanmar — is still a viable market. PepsiCo, the soft drink manufacturer, which sold eight million dollars’ worth of Pepsi to Burma in 1994, has announced its intentions to remain in the Burmese market. Ahtun says Pepsi, Unocal and Texaco are the major U.S. investors who are firm in remaining in Burma.

In addition to pressures from local governments, those companies may soon have to fend off a challenge from the U.S. Congress. Republican Senator Mitch McConnell is sponsoring a bill in the Senate calling for a U.S. boycott of Burma, which is beginning to garner wide support.

“The Senate action is all part of the same pressure being applied” as in New York, Duane says. He contends that a national movement to end all trade with Rangoon is slowly being born.