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Oil firm's pullout buoys Myanmar
lobby
By Tom Fawthrop
LONDON
- After Britain's Premier Oil finally yielded to years
of pressure from a British lobby and pulled out of its
controversial US$650 million investment in Myanmar last
month, human-rights campaigners hope to escalate their
campaign to halt all Western investment in the Southeast
Asian country. The military junta's systematic use of
torture and the routine deployment of forced labor gangs
have been documented and condemned in a series of United
Nations reports and resolutions.
Premier Oil's
Yetagun gas pipeline from Myanmar to Thailand
represented one of the biggest sources of European
financial support for the State Peace and Democracy
Council (SPDC) government in Yangon. It was the first
oil company to sign an exploration deal with Myanmar's
military in May 1990 and gas started flowing in May
2000.
In 1990 the military junta annulled
election results that showed a landslide victory for the
opposition National League for Democracy led by Nobel
Laureate Aung San Suu Kyi. Many Myanmar-solidarity
groups sprang up in Western countries to pressure their
governments to cut off all aid to Yangon and stop any
foreign investment in support of the regime.
The
latest success in driving foreign investment out of
Myanmar was hailed by Burma Campaign UK director John
Jackson as a warning to other investors. Jackson
declared: "The demise and fall of Premier is a warning
to any company thinking about investing in Burma - it's
more trouble than it's worth. We won't stop here, we won
a battle but not the war. The pressure needs to be
turned up on TotalFina and Unocal, who are as guilty as
Premier for propping up one of the most brutal regimes
in the world."
The former US administration of
president Bill Clinton administration imposed full
sanctions against any US investments in Myanmar. The
British government implements the European Union
guidelines that ban all military and economic aid to
Myanmar, and denies visas to prominent SPDC and
government leaders.
The British Labour
government's former foreign secretary Robin Cook had
also urged the UK oil company to get out of Myanmar.
"I'm going to make it quite clear, we do not approve of
what Premier are doing, they know that perfectly well.
We would much rather they stopped and they know that
perfectly well." But Premier Oil still refused to
withdraw.
During 2001 many other investors did
withdraw, including 18 Australian companies. Pressure is
mounting on all the remaining oil companies investing in
Myanmar. Unocal and TotalFina are currently facing
separate court actions over human-rights violations.
Non-governmental organizations argue that the oil
companies provide financial support to the state-run
Myanmar Oil and Gas Enterprise (MOGE).
Constructive or destructive
engagement?
A debate has raged throughout the
1990s on the best way to bring about change in Myanmar -
by sanctions and keeping up the pressure or by quiet
diplomacy and investment dubbed by Association of
Southeast Asian (ASEAN) countries as a policy of
"constructive engagement".
However, the
pro-democracy movement saw "constructive engagement" as
nothing more than a cover for profits and propping up a
pariah regime. Aung San Suu Kyi, Myanmar's pro-democracy
leader and Nobel laureate, declared: "Premier Oil is not
only supporting this military government financially, it
is also giving it moral support, and it is doing a great
disservice to the cause of democracy. It should be
ashamed of itself."
Premier's partners comprised
of Petronas of Malaysia, Nippon of Japan, the Petroleum
Authority of Thailand (PTT) and the junta's own oil and
gas company, MOGE. Premier's share in the consortium was
26.67 percent.
The field is expected to produce
gas for at least 20 years. UK energy consultancy Wood
Mackenzie has estimated that Myanmar's earnings from
Premier's Yetagun field would have been about $823
million through to 2025.
Yetagun is the second
gas field to start extracting gas in Myanmar, the
Unocal/Total consortium's Yadana field being the first.
Construction of both pipelines is now complete and both
projects share a common gas buyer, PTT.
Both the
Yetagun and Yadana projects in the remote Taninthayi
region of southern Myanmar have been plagued by
human-rights controversy. In March 2001, 15 Myanmese
citizens who claim their human rights were violated by
the construction of Unocal's pipeline defeated Unocal's
attempt to remove their cases from the California State
Court.
But Premier was not easily swayed from
its chosen path of engagement and profit. In response,
Premier produced a social audit report dealing with the
impact of the project in Myanmar, as well as mapping out
monitoring practice in the future to ensure net benefits
to local communities. The report stressed "a process of
stakeholder engagement", but crucially it failed to
engage those most affected by the company's investment -
those who have experienced human-rights abuse. Burma
Campaign dismissed all Premier's efforts as
"window-dressing which was designed to conceal the
reality of destructive engagement".
The
foreign investor exodus
Premier Oil claims
its pullout was not motivated by the pressure from the
international protest and the pro-democracy lobby, but
was purely a business decision. However, Jackson told
Asia Times Online: "What really triggered the withdrawal
was the exposure of the two directors from Amerada Hess,
a US company sitting on the board of Premier Oil in
violation of UK company law, and US sanctions against
investments in Burma."
Amerada had told US
shareholders that their investments in Premier would not
be used for the Myanmar project, but in reality no such
stipulation was made, which exposed the US partner to
legal action in violation of US sanctions and also
company law in the United Kingdom.
In recent
years there has been a spate of foreign investment
projects withdrawing from Myanmar. The Anglo-Norwegian
engineering group Kvaerner ASA announced the
cancellation of a $30 million deal with Premier
Petroleum Myanmar Ltd within 24 hours of having signed
the deal. The cancellation came after fierce public
criticism from the Norwegian media and human-rights
groups.
Sara Lee, a leading retailer of
underwear in the United States with nearly $17.5 billion
in annual revenue and owner of Hanes, Hanes Her Way,
Leggs, and Just My Size brands, ceased production of its
garments in Myanmar. In a letter to the Free Burma
Coalition, Sara Lee vice president and chief counsel
Melvin L Ortner wrote, "We want the Free Burma Coalition
to know that production in Burma violates both our
global operating principles and our supplier selection
guidelines ... two of our licensees did use Burma
facilities in direct violation of their contract with us
... We have taken immediate steps with both licensees to
confirm that neither will make our product in Burma
again."
In January the Burma Campaign UK won a
major victory over the Swiss company Triumph
International, which has been producing garments in
Myanmar. After a short and aggressive high-profile
campaign against Triumph, the company agreed to withdraw
from Myanmar by May.
Total foreign investment in
2001 shrank to a mere $17.5 million even though EU
guidelines for dealing with Myanmar are very far from
being real sanctions. Investors and ASEAN had hoped that
the release of Aung San Suu Kyi from house arrest this
year would be the beginning of real dialogue between the
generals and the opposition on how to move the country
out of its current political and economic quagmire.
However, in spite of the economic crisis, the generals
appeared to be committed to clinging to power, sending a
negative signal to foreign investors.
After the
success in ousting Premier Oil, the next ones on the
"dirty list" in the sights of British human-rights
groups are the accountancy firm PriceWaterhouseCoopers
and the Kuoni Travel business in Britain. Kuoni is based
in Switzerland and has vacation business interests in
Britain including Kuoni Travel in Dorking, plus House of
Specialists and Voyages Jules Verne in London. It also
controls Alp Air Holdings in Jersey but its main
involvement in Myanmar comes through a Pandaw and
Pagodas cruise operation it runs to Yangon and Mandalay.
With fewer and fewer Western investors, Myanmar
is increasingly dependent on its regional friends, led
by Malaysia, Singapore and China, all anxious to exploit
the country's rich natural resources. But without
political change, that investment will not be enough to
stem the country's spiraling economic decline.
(©2002 Asia Times Online Co, Ltd. All rights
reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
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