Pepsi's Burma withdrawal could spar

[dohrs@xxxxxxxxxxxxxxxx]

Reply-To: "W. Kesavatana-Dohrs" <dohrs@xxxxxxxxxxxxxxxx>
Subject: Pepsi's Burma withdrawal could spark more pullouts 


  	  				 
	 BANGKOK, Jan 29 (Reuter) - Pepsi's complete withdrawal from  
Burma could spark further pullouts by other multinationals doing 
business in the military-ruled country as companies bow to 
growing shareholder pressure, analysts said on Wednesday. 
	 PepsiCo Inc, which last year sold its 40 percent stake in a  
Burmese venture after growing pressure from human rights groups, 
on Tuesday said it had severed the last of its ties with Burma. 
	 The U.S. soft drinks giant said said it had ended an  
agreement to sell syrup to its former franchise bottler in 
Rangoon. 
	 Human rights activists have been lobbying for years, through  
a consumer boycott campaign, to convince Pepsi to withdraw from 
Burma, citing human rights abuses by the military government, 
which took power in 1988 after violently suppressing nationwide 
pro-democracy protests. 
	 Opposition leader and Nobel Peace laureate Aung San Suu Kyi  
has also repeatedly urged foreign businesses not to invest in 
Burma until the situation improved. 
	 ``This is the biggest company yet to pull out, and it is  
clearly because of the grass roots campaign,'' said Simon 
Billenness, senior analyst at Franklin Research and Development 
in Boston. 
	 Several major companies, including Liz Claiborne, Spiegel  
Inc unit Eddie Bauer and beermakers Heineken NV and Carlsberg 
have pulled out of investments or stopped sourcing products in 
Burma since last year. 
	 ``Pepsi's withdrawal isolates other U.S. companies there.  
It's sort of a wake-up sign to other companies,'' said 
Billenness, whose investment firm is active in various human 
rights issues. 
	 Peter Brimble, president of the Brooker Group, a Bangkok  
consulting firm that advises on investment in Burma, said the 
impact would most likely be felt by companies who must answer to 
shareholders. 
	 ``Shareholders have an impact on companies. If shareholders  
are up in arms about the situation in Burma the company has to 
do something,'' he said. ``Private investment firms with no 
shareholders can look at it differently.'' 
	  Activists plan next to target major oil companies, such as  
Unocal, Total, Atlantic Richfield Co (ARCO) and Texaco -- which 
are trying to exploit Burma's plentiful oil and gas reserves. 
	 ``The next focus is certainly the oil companies,'' said  
Larry Dohrs, spokesman for the Free Burma Coalition, which has 
headed the campaign to stop investment in Burma. 
	 Human rights organisations have already put strong pressure  
on Total and Unocal, which are building a pipeline to move 
natural gas from the Andaman Sea to Thailand, citing human 
rights abuses around the pipeline area. 
	 Texaco plans to start commercial production of natural gas  
off Burma in 1999, along with Nippon Oil Co Ltd and Britain's 
Premier Oil Plc. ARCO has a production-sharing contract to drill 
on an offshore block in the Bay of Bengal. 
	 Texaco shareholders last year defeated a proposal to end  
Texaco's operations in Burma. 
	 The firms most likely to be impacted by boycotts or  
shareholder pressure are from Europe and North America, analysts 
said, because Asian firms were still keen to invest in Burma. 
	 Diplomats and local analysts said they see a good deal of  
interest from South Korean and Japanese investors with trade 
missions making frequent trips to Rangoon. 
	 But some of them might be affected by the growing number of  
selective purchasing laws in the United States, Billenness said. 
	 So far, 11 U.S. cities, one county and the state of  
Massachusetts have passed the laws which bar government agencies 
from buying from companies that do business in Burma and the 
laws are expected to spread to Europe and Canada this year, 
Dohrs said.