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financial Time 1/24
Burma gas pipeline rouses opposition
Oil groups distance themselves from forced labor. Ted Bardacke report.
Burmas narrow southern peninsula, once a virtual no mans land, has
become a battlefield. The construction of a $ 1bn (pound 662m), 409 km
pipeline to transport offshore natural gas across the peninsula to
Thailand, by an international consortium led by Total of France and Unocal
of the US, has brought deaths in the jungle and denunciations in the west.
Late March five Total workers were killed and 11 injured by ethnic
Karen rebels extracting revenge for the uncompensated expulsion of
villagers along the pipeline route. Just last month security forces
guarding the pipeline area came under attack again resulting in a least
the systematic use of forced labor by Burmese military units
charged with protecting the pipeline and its employees, and the projects
acute strategic importance to the Burmese military junta, have made the
pipeline a target of western human rights activists initiating consumer
boycotts of companies doing business in Burma. The forced labor
surrounding the project is being trumpeted loudly by proponents of a
recently introduced US bill that would outlaw further US investment in
By all account, workers on the pipeline itself are being paid, and
pain well by Burmese standards, although kickbacks by workers to the local
military officers who have some power over who gets hired have been widely
Workers in military camps being set up to secure the pipeline area
are not so lucky.
Last May the township military authorities ordered us to go to
Heize island. Two hundred of us were there for two weeks, clearing
grounds, constructing a helicopter pad, building bamboo barracks and a
wooden guest house,. We were not paid .... and when we left, more workers
were forced to go to replace us. they were not paid either, say Mr. Ohn
Thaw, a villager from kanbauk who is now a construction worker in Bangkok
after escaping from Burma late last year.
Previously uninhabited, the island in question s important for
both construction and operation of the pipeline. It is located in the
shipping lane through which Total will transport material and equipment to
build the pipeline, and near from the Andaman Sea on to Burmese soil.
Mr. Ohn Thaw and other Burmese refugees say that as well as
getting no wages, they were forced to pay for the petrol used in the boat
which took them to the island and were ordered to take their own food.
As soon as we got there, the military confiscated our food and
then rationed it out to us. It wasnt enough, only two tins of rice per
day; we usually eat three, say Mr. Ohn Thaw, who adds that villagers in
Kanbauk who refused to go were either fined 3,000 kyat (about a months
wages) or arrested and sent to zones of conflict to at as porters for the
Total and Unocal say no operation under their control uses forced
labor. Yet the security situation in the area is precarious and one Total
executive involved in the project acknowledges that unless the area is
pacified, the pipeline wont last the duration of the 30-year gas purchase
agreement signed with their Petroleum Authority of Thailand.
Mr. John Imle, president of Unocal, said last year that if you
threaten the pipeline, theres going to be more military. If forced labor
goes hand in glove with the military, yes, there will be more forced
labor. For every threat to the pipeline there will be a reaction.
That reaction is apparent to Mr. Ohn Thaw. Forced labor shifts in
the area around his village used to be once a year he says. Now its three
times a year and the time (spend working) is double or triple what it used
Citing these allegations among other things, this month US
senators introduced legislation that would ban US investment in Burma-
which, depending on its legal interpretation, could force Unocal to pull
out of the project- until an elected government has taken power in Burma
and international labor standards are being adhered to.
US campaigning groups, playing up instances of forced labor, have,
meanwhile, succeeded in several American cities in enacting selective
purchase legislation prohibiting local government purchases from companies
investing in Burma. This year they will seek to push this campaign to the
state level, which could deny Unocal millions of dollars in state
These groups are also introducing shareholder resolutions aimed at
prohibiting companies from carrying out operations there.
In some cases this pressure has been effective. In 1994 Hong Kong
-based Victoria Garment Manufacturing Company, which has four factories in
Burma, exported $32m worth of textiles to US customers such as Macys,
Eddie Bauer and Liz Claiborne. Under threat of picketing in front of
stores and disruption of annual meetings, these companies stopped buying
clothes made in Burma. Victoria Garments US exports fell to around $10m in
1995 and this year the company expects it will be forced to sack half its
3,300 workers in Burma.
While such redundancies in mainly hurt workers, disruption of the
pipeline would be disastrous for the military regime. Huge reserves of
natural gas exist in the Andaman Sea, and both Texaco and Arco are poised
to begin production if Total and Unocal can show that delivering the gas
to energy-hungry Thailand is feasible.
Burmese official shave indicated that the hard currency they will
earn from selling the gas may eventually allow them to devalue the kyat,
the most important obstacle to, permanently reviving the struggling
On top of the revenue, some of the gas will be transported by
another pipeline to Rangoon, where it will generate electricity and be
used to produce fertilizer, things the Burmese government desperately
needs. The pipeline is a key to so many projects, says Mr. Set Maung,
economic adviser to the Burmese generals.
Total and Unocal have been at pains publicly to distance
themselves from he Burmese junta. But as the pipeline progresses, the
relationship is deepening, as the companies recognize that the military is
the only real administrative authority in the country, according to a
Signs of this collaboration turn up in the oddest places. At Ban I
Thong, where the pipeline will cross into Thailand, Burmese government
troops have taken up strategic positions on a ridge which is nominally in
Thailand. In the shirt pocket of a young private, who has tied a bunch of
bananas to his belt laden with hand grenades, is a ball-point pen sporting
the logo of Total.