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Pressure Tactics (FEER 12.5.97)

/* posted 29 Jan 6:00am 1997 by drunoo@xxxxxxxxxxxx in igc:reg.burma */
/* ---------------" Pressure Tactics (12/5/94) "------------------ */

U.S. activists target companies doing business in Burma
by Mark Clifford

American activists who cut their teetn on South Africa's anti-aparthied
movement have shifted their sights to a foe they consider equally
reprehensible -- Burma.

Their weapons: boycotts, shareholder resolutions and legislation designed
to punish American companies for doing business there. They contend foreign
investment does more harm than good because the military government uses
the hard currency to prop up a repressive regime.

California-based oil giant Unocal is bearing the brunt of the protest. Its
April 25 shareholders' meeting marked the first time that shareholders in
the United States were asked to pass judgement on Burma. A surprisong 14.1%
voted for a resolution asking the board of directors to issue a full report
on its activities in Burma.

"The Unocal meeting was incredible," says Simon Billenness, an analyst at
Boston-based Franklin Research & Development, which backed the resolution.
NOrmally, he says, social-issue resolutions initailly win only 2-7% of the

There are indications that the U.S. Government is considering its own
pressure tactics. The Clinton Administration recently suggested it might
impose economic sanctions against Burma as part of a wide ranging review of
its relations with teh country. Assistant Secretary of State for Human
Rights John Shattuck will visit Rangoon soon. And some State Department
officials and members of Congress met with executives from Unocal and other
U.S. companies on April 14 to discuss their activities in the country.

"There's very strong sentiment in Congress about it being a gangster regime
and [a feeling] that business should be very cautious in their presence,"
says a congressional staffer. This staffer notes, however, that the
government would probably issue a code of conduct for companies rather than
impose sanctions.

In Unocal's case, activists have successfully focused attention on a
proposed natural-gas pipeline that the company may help build across the
Burmese panhandle. The pipeline is located in an area where sources report
that entire villages are being displaced and labourers conscripted to build
a rialway line. The accounts are based on reports from refugees who have
fled the area and are now living along the Thai border. Activists charge
that the same human rights abuses will continue on the pipeline.

Unocal says that recent fights over the proposed route have turned up no
evidence of displacement. "We are doing our due diligence to ensure that
the prospective pipeline ruout is an ideal one from both an environmental
and human-rights point of view," says John Imle, president of UNocal's
energy-resource division.

Unocal employees spend a day in mid-April flying throughout the region at
low altitudes in a Burmese Government helicopter, says IMle. Although the
military refused permission to land at one village, the Unocal executive
disputed claims that the area is a war zone.(The region seems to be quieter
recently due to attempts by the Thai military to broker a ceasefire in the
civil war between the Burmese Government and the rebels who live in the

The proposed pipeline would tap two offshore blocks in which Unocal has a
47.5% interst. French oil company Total holds the balance of the shares.
The two companies are negotiating a contract that could bring in the
state-owned Myanmar Oil & Gas Enterprise and the Petroleum Authority of
Thailand as partners. The venture would be one of the biggest investments
in Burma since the bloody suppression of the democracy movement in 1988.

Unocal would not say how much money is involved. But its most recent proxy
statement tells shareholders that "the project represents a potentially
significant resource-growth opportunity for Unocal in Southeast Asia, one
of the company's key strategic areas." Unocal also has operations in
Indonesia, the Philippines and Thailand.

One Bangkok-based environmental group says that the project hopes to tap
field that hold an estimated 2-5 trillion cubic feet of natural gas. The
proposed 260 mile pipeline would carry gas into Thailand to supply power
plants. Total estimates the project will cost US$800 million to US$1

Other U.S. companies likely to come under pressure from protesters and the
government are Texaco, which is conducting offshore explorations, and
PepsiCo, which posted sales of US$4 million in Burma last year. Levi
Strauss pulled out of Burma in 1992, claiming that "under current
circumstances it is not possible to do business in [Burma] without directly
supporting the military government and its pervasive violations of human

But Burma is likely to keep benefiting from foreign investment: investors
from China and Singapore have stepped up their activities in the country in
the past year. Singapore Prime MInister Goh Chok Tong became the second
head of government to visit Burma when he led a trade mission there in late