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Myanmar boycott on shaky
ground
By Alan Boyd
SYDNEY -
When he signed the first of two sanctions bills against
Myanmar six months ago, US President George W Bush
appealed to international business to carry the torch of
political freedom by cutting economic ties with a regime
that he labeled evil and corrupt. But any thoughts that
corporations might meekly surrender to what many saw as
emotional blackmail have been firmly quashed by
investment data, which suggest there has been little if
any weakening of business resolve.
In the
same week that energy multinational Unocal went on trial
in California for alleged human-rights violations
committed in Myanmar, a labor watchdog revealed there were
375 foreign firms with interests there - including 48
newcomers.
Unocal is one of 41 US companies
active in Myanmar, according to the latest list compiled
by the Brussels-based International Confederation of
Free Trade Unions (ICFTU). Others include 3M, American
Express, Caterpillar, Compaq, DHL, General Motors, Leo
Burnett and United Technologies. In addition, there are
more than 100 firms registered in the European Union
bloc, which levies its own sanctions against Myanmar.
Among these are Air France, Alcatel, Deutsche Bank, East
Asiatic, Lauda Air, Lufthansa, Nestle and Total.
ICFTU, which supports a campaign by the
International Labor Organization (ILO) to secure
political change by ostracizing Myanmar's military
junta, admitted that many investors still needed
convincing.
"International trade-union
campaigning has been successful in slowing investment
into Burma [Myanmar] and has encouraged a number of
well-recognized multinational companies to sever ties
with the country," the grouping stated. "However, the
international trade-union movement's list shows that
large-scale public protest has failed to move a number
of large, well-known companies to leave Burma ..."
Human-rights groups, which also favor a pullout,
are hoping that the Unocal case, the first prosecution
of a US firm over its conduct abroad to reach trial in
the United States, will persuade others to withdraw.
A group of 13 villagers is seeking financial
compensation over Unocal's alleged failure to prevent
the use of slave labor in the construction of a
natural-gas pipeline from the Andaman Sea to Thailand in
the mid-1990s during which they were reportedly beaten
and tortured. Unocal has strenuously denied the
accusations and maintains it has no liability because it
is represented in Myanmar only by foreign-based
subsidiaries. The pipeline is owned by the Myanmar
government, while Unocal has a minority interest.
The lawsuit was lodged under the little-known
Alien Tort Claims Act of 1792, which permits foreigners
to sue one another in US courts, and is unlikely to be
the last of its kind. A dozen similar cases are also
pending, though none has yet come to trial.
Marriott Hotels, Triumph International, Accor
Hotels, Premier Oil and British American Tobacco (BAT)
have all pulled out since the Unocal action was launched
and the economic sanctions took effect. But most of the
evidence suggests that they bowed to consumer and
shareholder pressure rather than legal threats, while
their places were often taken by newcomers with fewer
scruples. BAT, the subject of intense political lobbying
in the United Kingdom, simply off-loaded its 60 percent
stake to a Singapore-based investor and will continue to
get revenues under a licensing agreement.
"Companies from neighboring Southeast Asian
countries are tending to 'fill the gap' left by
departing businesses," the trade union grouping
acknowledged in its report, confirming the difficulty of
isolating a regime that still enjoys regional business
support.
There are still 190 Asian firms
registered as Myanmar investors, including 44 from
Japan, 32 from Singapore, 26 from Thailand and 25 from
Malaysia. China, a close political ally, has 20
projects.
Many of the incoming firms are smaller
and present a less visible target for protesters, making
it likely that the sanctions campaign will plateau once
the more familiar multinationals have left town.
Lobbying group Burma Campaign reported this week
that 24 small tour firms had taken control of the
vacation market after the withdrawal of large
wholesalers such as Kuoni. While seven travel companies
have dropped Myanmar from their brochures since the
start of the year, the ruling junta claimed that 277,647
tourists had visited between April and October, an
increase of 27 percent over the same period in 2002.
Independent figures on tourist arrivals are not
available. However, travel-industry spokesmen confirmed
that relatively few foreigners were heeding calls for a
boycott on all travel links.
"Asians have little
familiarity with the US sanctions, and we have found
most Westerners want to make up their own minds ... they
don't like being told by their governments what to do,"
said a Hong Kong-based tour guide. "Our bookings are up
probably 20 percent or so since last year, as Burma is
one of the most popular new destinations."
The
sanctions have undoubtedly had an impact at the trade
level, with the State Department acknowledging last
month that a ban on imports imposed as part of the
business embargo would probably cost 100,000 jobs in the
textiles industry alone. But the junta itself has shown
no signs of wilting under the pressure, and has turned
to aid donors and development funds to make up the
shortfall of foreign exchange as investors depart.
Underlining the importance of these contacts,
Prime Minister General Khin Nyunt personally led a
delegation to Japan this week to seek regional financing
as part of a Mekong basin package. Tokyo, displaying
growing irritation at the slow pace of democratization
in Myanmar, suspended all bilateral economic assistance
in June after the detention of opposition leader Aung
San Suu Kyi.
Thailand, another close trading
partner, has offered to pay for infrastructure upgrades
in the region of its border with Myanmar, including road
improvements that will benefit market commerce.
China gave Yangon a soft loan of US$200 million
this year to cover the government's cash-flow problems
and canceled a portion of outstanding debt for purchases
of military hardware and other goods.
India,
which has only 11 registered foreign investment projects
in Myanmar but a flourishing border trade, will advance
$57 million so the northerly Yangon-Mandalay railway can
be upgraded to allow traders easier access.
Ironically, the net effect of these improvements
will be to make Myanmar more attractive to foreign
investors just when they are being forced out, a point
that has not been lost on the multinationals. Some are
going on the offensive against what they contend is an
unfair smear campaign and an intervention in business
practices.
Japan-based Mitsubishi Corporation,
an active investor in Myanmar, has defended its
activities as a "good-faith approach" that is helping to
build a durable democracy from the ground up.
"We believe that generally in the long run
economic opportunity and development will promote
positive political change and will provide a stable
economic base to make that political change
sustainable," Gen Kagayarna, general manager for
environmental and social responsibility, said in a
letter to the ICFTU. "We believe that isolation
generally impedes progress and makes the lives of the
average citizen harder."
(Copyright 2003 Asia
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