U.S.-BURMA: Sanctions Campaign Keeps Rolling

By Jim Lobe Reprint | | Print |

Jim Lobe

WASHINGTON, May 15 1997 (IPS) - Despite President Bill Clinton’s decision last month to ban new U.S. investment in Burma, local grassroots movements across the United States continue their own action against companies doing business in the Southeast Asian nation.

The New York City Council voted unanimously Wednesday to prohibit agencies of the city government from signing procurement or services contracts with companies doing business in Burma.

Its principal targets, oil giants Texaco, Arco, and Unocal, are among the dwindling number of U.S. companies which remain in Burma despite a fierce and highly successful sanctions movement which has seen 13 U.S. cities and the state of Massachusetts enact “selective purchasing” laws aimed against companies operating in Burma.

The bill will now be referred to Mayor Rudy Giuliani who will have 30 days to sign or veto it. While his administration testified against it during hearings earlier this year, analysts say he is likely to sign. Any veto is likely to be overturned, given the unanimity of Wednesday’s vote.

Last week, the regents of one of the United States’ biggest universities, the University of Wisconsin in Madison, decided to sell all of its Texaco stock, worth almost 250,000 dollars, to protest the oil company’s involvement in Burma.

In doing so, the university was following in the footsteps of the successful anti-apartheid campaign of the 1980s when grassroots activists used both local selective purchasing laws and stock divestment campaigns to pressure companies to withdraw their operations from South Africa.

The latest burst of activity comes almost four weeks after Clinton announced that he will ban all new investment by U.S. companies in Burma to protest the continuing repression carried out by the ruling State Law and Order Restoration Council (SLORC) as well as its refusal to initiate a dialogue with the recognised leader of the opposition and Nobel Peace Laureate, Aung San Suu Kyi.

Suu Kyi, whose National League for Democracy (NLD) swept elections in 1990, has called for the international community to impose economic sanctions against the regime to force it into a dialogue. Backed by many of its Asian neighbours, however, the SLORC has, if anything, become more intransigent.

Despite Clinton’s announcement, U.S. Treasury and other officials charged with drafting the executive order have still not completed their task, giving rise to speculation that the administration may try to write it so that oil companies may protect existing investments.

Of the three companies, Unocal is by far the most heavily invested in Burma. It holds a 28-percent share in a 1.2-billion- dollar project to build and operate a natural gas pipeline from the Yadana off-shore field through Burma to Thailand.

With the most to lose, Unocal has carried out an aggressive lobbying campaign against sanctions, at both the federal and local levels. In New York City, it hired an influential Wall Street law firm to fight the bill.

Unocal is also facing an unprecedented lawsuit in California brought on behalf of Burmese farmers who were allegedly forced by the SLORC’s army to work on the Yadana project. When Unocal moved to dismiss the case, a federal judge ruled that, if proven in court, the company’s payments to the government for providing labour and security for the project would be similar to “participation in slave trading,” and hence subject to the 200- year-old Alien Tort Claims Act.

Unocal, which has repeatedly denied knowledge of any abuses committed in connection with the project, is meanwhile taking other steps to limit its vulnerability to sanctions in the United States, according to Business Week magazine.

Last month, it opened what it calls a “twin corporate headquarters” in Malaysia where its outspoken president, John F. Imle, will be based. At the same time, the company has sold off all of its U.S. refining operations and gas stations as part of an effort to become a “global energy company.”

Analysts say the move will likely result in the spinning off of a new, Asia-based company which will not have to worry about U.S. laws. “They see Asia as their pie in the sky,” says Simon Billenness, an analyst at the Franklin Research and Development Corporation in Boston, who notes that the company is also deeply involved in trying to get U.S. backing for building a pipeline through Taliban-controlled Afghanistan from Central Asia to Pakistan.

“To them Asia is survival,” according to Billeness, who has also been a leader in the Burma sanctions campaign. “That’s why they’re so intractable on Burma.”

Compared to Unocal, Arco’s and Texaco’s investments are relatively small, and Texaco itself has suggested that it is willing to sell off its stake in a memorandum of understanding signed last October to build another natural gas pipeline parallel to Unocal’s.

Texaco has been much less aggressive than Unocal in responding to the sanctions campaign, stressing from the beginning that it would abide by U.S. law. In just the past week, its chief executive, Peter Bijur, told a shareholders’ meeting that the company is looking for buyers of its Burma stake. Insiders say that Texaco has been approached by companies from China, Indonesia, and Malaysia.

“I expect that Texaco will trade or sell its interest in Burma before the end of the year,” says Fr. Joe Lamar, a Maryknoll priest who has been engaged in a lengthy dialogue on Burma with top Texaco management. “They clearly want to avoid the kind of negative publicity that Unocal has received.”

Arco, which recently discovered gas deposits in Burma, may also decide to withdraw, according to Billenness and others. Last week, anti-SLORC activists scored a clear moral victory at Arco’s annual shareholders meeting in Dallaw by winning a surprising nine percent of the vote — a 50 percent increase over last year — for a resolution which would force it to get out of Burma.

New York’s new selective purchasing law, as well as anticipated approvals of similar measures in Connecticut and possibly even Arco’s home state of Texas, will exert more pressure on the company to get out, says Billenness.

Meanwhile, U.S. trade officials say they have advised their European counterparts not to test the legality under international trade rules of state selective purchasing laws to the World Trade Organisation (WTO), as the European Union (EU) had suggested it might.

The EU and Japan have argued that such legislation violates an international agreement on procurement contracts because it imposes political criteria on the decision of state governments to award contracts to foreign companies. Washington has told the EU that a formal attack on selective-purchasing laws now risked weakening public support here for the two-year-old WTO.