Spilling the Oil Corporations (Part II) – Burma

8 Jul

It is not an understatement to claim that the Burmese military dictatorship is able to hold onto power due to the enormous revenues gained from its oil and natural gas ventures with foreign oil corporations.

According to Human Rights Watch (HRW) (n.d.), a typical arrangement would see the Burmese government enter into contracts with these companies allowing the latter to explore and drill for oil and gas in designated areas for a fee. If these fields are profitable, the junta would get a portion from the sale of the natural resources. In 2006, the junta earned $2.16 billion just from selling natural gas.

Despite concerns from NGOs on the blatant human rights violations committed by the regime, oil corporations have jumped on the bandwagon to enter into such business agreements. Within 2006 – 7, about 90% of the country’s foreign direct investment tripled in the oil and natural gas industry culminating to $474.3 million (EarthRights 2008, p. 1).

According to HRW (n.d.), at least 27 companies from 13 countries are already operating in the oil and gas sectors. [Access the HRW list here]. EarthRights (2008, p.7) has also documented increasing Chinese interests by identifying at least 16 corporations and 21 such projects in the country.

Though significant pressures are growing for Western oil corporations – the US-based Chevron and France’s Total, to abandon these projects due to outpour of criticisms at home and from the EU and US government respectively, such an outcome is unlikely. Chevron and Total argue their presence has benefited the locals with its welfare and security measures. Both corporations also countered that if they were to pull out, other less ethical competitors such as Chinese MNCs would fill in the gap. France foreign minister, Bernard Kouchner, also claimed that Total’s pullout would affect Thailand. Since 1992, Total has been operating in the Yadana fields with about 60 percent of its export going to Bangkok (Yeni 2009).

Claims that the presence of Western oil corporations has benefited the locals have however been contradicted by NGOs reports. The Yadana project which has investments from Total and Chevron has been alleged to lead to serious human rights violations such as forced labour, murder, rape and coerced displacement of villagers. In an interview with a defected soldier from an NGO report, ‘

We ask these people to carry shell ammunition, food, and supplies . . .  During the portering the soldiers treat porters not so good.  I do not want to mention about these bad things so much since I myself I have done it to these people . . . (True Cost of Chevron 2009, p.23).

In the same account, a villager was subjected to beating after accusing soldiers of stealing logs meant for a local school, ‘

The officer . . . turned to me and he slapped my face twice, then he punched my stomach and when I tried to cover it he kicked my groin. I fell on the ground (True Cost of Chevron 2009, p.23).

Another NGO group, Burma Campaign UK has also stated that Total, cognizant of the brutality of the Burmese troops, ignored those concerns and chose to employ and deploy these troops in the pipeline areas (2005, p. 7). It reproduced documents including its contractual terms with Myanmar Oil and Gas Enterprise (MOGE),’

Under “Rights And Obligations of MOGE and Contractor” it reads: “MOGE shall: assist and expedite (TOTAL’s) execution of the Work Programme by providing at cost…security protection and rights of way and easements as may be requested by (TOTAL).” It is made explicit (in the PSC contract) that security personnel were to be “made available from resources under MOGE’s control” – i.e. the Burmese Army (Burma Campaign UK 2005, p.13).

In another US department of State unclassified cable, the meeting between US Embassy personnel and Unocal’s Manager for Special Projects, Joel Robinson showed that Total ‘hire and pay the Army for pipeline security through MOGE. He [Joel] also admits that the companies not only directed military activities in the region but also gave the Army responsibility for building helipads for the project’ (Burma Campaign UK 2005, p.13).

It is not just the Western oil companies that have come under public scrutiny. EarthRights and Shwe Gas Movement have recently lodged complaints to the OECD against Korean companies, Daewoo International and Korea Gas for their Shwe gas field operations. The groups accused the companies of breaching six OECD guidelines which are similar to those levelled against Total and Chevron. They include, ‘failing to respect human rights, contributing to forced labor, failing to promote sustainable development, failing to disclose information about the project, failing to consult with local populations and by failing to conduct an environmental impact assessment according to international standards’ (Boot 2009).

Given the evidence, it is impossible for oil corporations to operate in Burma without condoning and choosing to ignore the blatant human rights violations committed by the military regime.

Based on the situations in Burma and Niger Delta, parallels can be discerned from the workings and arguments of oil corporations operating within military dictatorships.

Most noticeably, these companies like to claim that their presence in these military regimes are beneficial for the local community and/or the country. They state that the local community benefits with employment opportunities while the military government is less likely to violate human rights. These assertions are however often contradicted by NGO monitors and protests from the local communities. Subsequently, the military, with the expressed knowledge, consent and sometimes payment from the oil corporations, is brought in to forcibly suppress dissent. The companies allege that with their leverage, they are often able to persuade the junta to democratise the host country when it only further cements the regime’s hold and repression due to the inflow of oil revenues.

When these oil corporations are dragged into court for these human rights violations, they usually chose to settle out of court while continuing to deny their involvement. In December 2004, Unocal chose this method of resolving a dispute on two cases brought against it in US courts (Burma Campaign UK 2005, p.22). The case of Ken Saro-Wiwa in Niger Delta is another classic example. Implicitly, the corporations understand that they are likely to lose these lawsuits and as such, would rather not go to trial for fear of exposing themselves to more damaging allegations in public.

There are also often dubious intimate links between the military dictatorships and the oil corporations that extend beyond the usual oil business. For example, Burma Campaign UK has alleged that Total revenues have been used by the regime to cover its money laundering activities through MOGE to purchase arms (2005, p.7). Shell also acknowledged that it had in the past ‘imported side arms on behalf of the Nigerian police force, for use by the “supernumerary police” who are on attachment to Shell and guard the company’s facilities (and other oil company facilities) against general crime’ (HRW 1999, p. 13).

-Works Cited-

Boot, W 2009, ‘South Korea named in complaint over Burma gas project’, The Irrawaddy, 15 June, accessed 3 July 2009.

Burma Campaign UK 2005, ‘Totalitarian Oil, Total Oil: fuelling the oppression’, May, accessed 2 July 2009.

EarthRights International 2008, ‘China in Burma: the increasing investment of Chinese multinational corporations in Burma’s Hydropower, oil and natural gas, and mining sectors’, September, accessed 2 July 2009.

Human Rights Watch n.d., ‘Burma: Foreign Oil and Gas Investors Shore Up Junta Foreign Investments in Burma’, accessed 2 July 2009.

Human Rights Watch 1999, ‘The Price of Oil, corporate responsibility and human rights violations in Nigeria’s Oil producing communities’, January, accessed 2 July 2009

True Cost of Chevron, an alternative annual report, May 2009, accessed 25 June 2009

Yeni 2009, ‘Oil and politics don’t mix’, Irrawaddy, July, accessed 3 July 2009.


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