Economic Interests Trump Human Rights in Burma

Chiang Mai, October 20th, 2007

In Mae Sai, one of the few Thai/Burma border towns, it is apparent that it is business as usual between these two countries. Truckloads of goods and an endless line of human porters flow across from Burma. Despite Thailand’s statements admonishing the Burmese junta’s crackdown, trade, the lifeblood of the military government, has not been affected. This highlights the main issue in Burma. Political rhetoric from Burma’s trading partners unmatched by action. This gap is wider now than ever as these trading partners are being pressured to take a stand pubic against the obvious human rights law violations committed daily in Burma. These violations of international law range from the use of forced labour, to unlawful imprisonment and land confiscations, all of which are closely linked to the activities of foreign investors.
How is it possible that Burma is able to act in such blatant violation of basic human rights in an age of international law, global communication and increased cooperation and still be able to do business with its regional trading partners? The answer appears to be that regional powers are unconcerned about the domestic situation in Burma and instead focus on their own strategic and economic interests. The policy of isolation espoused politcally by Western States is ineffective if China, Thailand, Singapore and India continue to unconditionally do business with the SDPC.
Thailand, above all other States, has an immediate capability to seriously threaten the military regime with economic pressure. The Bangkok government, through state-owned agencies such as PTT and EGAT (Electricity Generating Authority of Thailand), is the biggest purchaser of Burmese gas, contributing between US$1 billion to 2 billion a year to the regime. Burma is dependent economically because the pipelines are set up in a way that leaves them no choice but to sell to Thailand. “A pipeline imposes what we call in economics a ‘monopsony,’ a one-only buyer that likewise one might suppose enjoys some power over the seller,” explained Dr. Sean Turnell, an economist at Macquarie University in Sydney, Australia, and editor of Burma Economic Watch.

See: http://www.econ.mq.edu.au/burma_economic_watch

The Thai military government has explained that it is appalled by the regime’s crackdown on peaceful protesters but, as evidenced by border trade, economic investment and gas consumption, they continue to support the regime economically. The current Thai government has gone so far as to claim, ironically, that it is an intern and unelected military government and therefore cannot interfere with the policies of nieghbouring States! Yet, the unelected government has no problem conducting extensive trade with the Burmese regime. Thailand’s overseas oil and gas exploration company PTTEP, a subsidiary of energy conglomerate PTT, has reiterated this week it would be business as usual with the generals, despite a call by many Western countries for tougher international sanctions.
The third largest trader with Burma after Thailand and China is Singapore, who currently holds the rotating chairmanship of Asean. Little action is expected from this partner not the organization it currently presides over. Asean continues its policy of "constructive engagement" while members of the Singapore Democratic Party were arrested for protesting against the State’s business links with the Burmese military. While China may hold the most political sway over Burma, the links between States such and Singapore and Thailand cannot be underestimated. Thus far, they have been given a relatively free ride by the international community. However, companies from both countries are on a list published by the London-based Burma Campaign UK, an NGO seeking to spotlight human rights abuses. The list of about 100 companies includes PTTEP and EGAT, plus SapuraCrest Petroleum and Shangri-La Hotels based in Singapore, among more than 20 Asian businesses that deal with the junta.

See: http://www.burmacampaign.org.uk/dirty_list/dirty_list.php

As is common in many situations conducive to human and environmental rights problems, the specter of oil and gas development is present. Even States that purport to be democracies and to support democratic movements worldwide cannot resist the temptation to exploit these important natural resources no matter where the are found. For an excellent example of the gap between political rhetoric and economic action, the Canadian government’s policy on Burma can be cited. While Canada is busy granting Nobel Laureate Aung San Suu Kyi honourary Canadian citizenship for her role in the pro-democracy movement, Canadian corporations such as Ivanhoe Mines are still profiting in Burma. The Canadian Helicopter Corporation is providing airlifting services to the Yadana Natural Gas Project that provides the military junta more than 2 billion dollars each year and the Montreal-based Power Corp holds a 4 percent of share in French’s oil company, Total, that is operating the Yadana Gas Project, along with Petrana from Malaysia and TPPC from Thailand. TranCanada Pipeline, Canada’s largest pipeline firm, is one of 13 foreign companies currently getting involved in the development of Shew Gas Project, and the Canadian Pension Plan (CPP) has more than 2 million shares with Ivanhoe Mines at the market values of 60 million dollars. The Ontario Teachers’ Pension Plan (OTPP) holds more than a million shares with Ivanhoe at the current value of 20 million dollars. Clearly, political rhetoric from Ottawa does not alter economic priorities!

Civil society groups in Canada constantly strives to draw attention to Canadian firms operating in conjunction with the Burmese government. See: The Canadian Friends of Burma at: www.cfob.org

The US based Exxon oil company is another case in point. While the United States continually announces various programmes of economic sanctions, this corporation’s investments are never threatened. The oil and gas industry in Burma are inextricably linked to human rights abuse and environmental degradation.

For more information on this link see the various reports issued by EarthRights International. For example see: Total Denial. Chiang Mai, Thailand, 2003. Available at: www.earthrights.org.

With Chevron’s discount purchase of Unocal, they have inherited a partnership in long legacy of human rights abuse in Burma. The Unocal situation, in which they operated a joint venture with the Burmese military, who violated a long list of customary international law norms such as forced labour and torture, famously shone light on the problematic relationship of foreign investment and human rights violations. Unocal was tried before the courts of the United States under the Alien Tort Claims Act. The case proceeded to the supreme court where Unocal went into damage control mode and settled for a few million dollars with the Burmese villagers and promptly sold up the operations to Chevron.

For full details see: Doe I v. Unocal Corp., 963 F. Supp.880 (C.D. Cal. 1997); Nat’l Coalition Gov’t of the Union of Burma v. Unocal, Inc., 176 F.R.D. 329 (C.D. Cal. 1997); Doe I v. Unocal Corp., 67 F. Supp.2d 1140 (C.D. Cal. 1999); Doe I v. Unocal Corp., 110 F. Supp.2d 1294 (C.D. Cal. 2000); Doe I v. Unocal Corp., 27 F. Supp.2d 1174 (C.D. Cal. 1998), aff’d 248 F.3d 915 (9th Cir. 2001) See also: Forced labour in Myanmar (Burma): Report of the Commission of Inquiry appointed under Article 26 of the Constitution of the International Labour Organization to examine the observance by Myanmar of the Forced Labour Convention, 1930 (No. 29)Parts III.8, V.14(3) (1998); Situation of Human Rights in Myanmar. UN Doc. A/RES/50/194 1995.

Many advocates of corporate social responsibility insist that such cases will prevent corporations from doing business in recalcitrant human rights regimes. In Burma, there has been very little of evidence of this. Despite high-profile cases investment into oil and gas continues unabated. Besides Exxon’s continued presence at the Yadana pipleine, the Shwe Natural Gas Project is presently being developed in Western Burma. A consortium of South Korean and Indian corporations have completed survey and exploration are moving towards the production phase. The project is destined to become the single largest source of foreign revenue for the military regime in Burma, with projected earnings of US$12-17 billion over 20 years. The Governments of South Korea and India own stakes in three of the four involved corporations and thus have the power to prevent abuses.

For more information on the Shwe Gas Pipeline Project see: The Shwe Gas Movement (http://www.shwe.org).

India in particular has increasingly supported the military regime inside Burma. They have reversed their previous opposition to the government and have come onside in order to cash in on the natural resource sale being held by the junta. Why would a democratic state shift its policy in support of an odious regime like the junta in Burma? It is simple. After the 1988 massacre and the military suppression, China moved in and India lost its position in Burma. Basic geopolitics dictate a strategic decision. India "lost" Burma to China because it had taken a moral stand. Now the politicians have decided that morality gives way to pragmatic economic concerns. Burma's vast oil and gas reserves can meet a big chunk of India's demand of 2.8 million barrels a day.
Even as the international condemnation was occurring over the recent violent repression of the peaceful protests of September, the Indian External Affairs Minister Pranab Mukherjee was in Rangoon to sign an energy deal on the Rakhin [Arakanese] coast of Burma. Reuters reported that the deal was done the following week and that the Indian State-run Oil and Gas Corp. will have a one hundred percent holding in blocks off of Arakan state. Reuters cited a company official stating, "It's a government to government deal.” This sends a clear message to the Burmese generals that they have a free reign to do as they please as long as the gas continues to flow.
All of this comes down to the geopolitical influence of China. China clearly holds the key to the situation in Burma but is not willing to act. At least the Chinese are straight forward about their economics first policy. China provides political protection for the Burmese government in exchange for lucrative natural resource access. The Asian Times has reported that this political assistance has been more valuable in the past than economic incentives from India in gaining natural resource concessions.

See: http://atimes.com/atimes/Southeast_Asia/II11Ae02.html

Moreover, China seeks access to the Bay of Bengal in order to shorten supply routes which are required to satisfy the hunger of its rapidly growing economy. It seems very unlikely that China will endorse any action that allows the international community to pry into the internal affairs of a fellow one-party State in Asia for fear of setting a precedent unhelpful to its own position. Yet no States are willing to take them to task over this inaction and any thoughts of Olympic boycotts as so far unrealistic.
George Monbiot, writing in the Guardian, informs us that “China has become the world’s excuse for inaction. If there is anything a government or a business does not want to do, it invokes the Yellow Peril. Raise the minimum wage to £6 an hour? Not when the Chinese are paid £6 a year. Cap working time at 48 hours a week? The Chinese are working 48 hours a day. Cut greenhouse gas emissions? The Chinese are building a new power station every nanosecond. China is our looking-glass bogeyman. If you behave well, the bogeyman will get you.” The regional players are all terrified of conceding even more ground to the Chinese economic machine. If Exxon pulls out, the Chinese State companies will move into the vacuum. If India does not engage the military regime, then China will secure even greater access and undermine India’s territorial advantage in the Bay of Bengal. The Burmese generals are benefiting from the game of geopolitical strategy.
Without meaningful economic sanctions by regional as well as international trading partners, the regime retains impunity despite the outrage of international civil society. The time to act is now while the media attention lingers on Burma. The initial euphoria expressed by Burmese activists in Northern Thailand about the global media and civil society support has been replaced by a cynical resentment of the international community for failing to act. People in Burma believed that if they were brave enough to stand up that the international community would protect them. Instead, Burmese human rights have been prioritized somewhere below oil and gas profits. It is perceived that as usual, corporate investment rights are better protected than people’s human rights. It is worth noting that Aung San Suu Kyi has consistently backed the use of economic sanctions against Burma, noting that the lives of regular citizens can hardly become worse. The people of Burma and those working to support them in Thailand wait for real action from the international community.