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SF Bay Guardian/Providence Journal-



Subject: SF Bay Guardian/Providence Journal-Bulletin

This article appeared in The San Francisco Bay Guardian ("Drugs and Oil 
in Myanmar") on April 23, 1997 and the Providence Journal-Bulletin on 
Sunday, April 27.


UNOCAL ACCUSED IN FEDERAL COURT OF CONSPIRING WITH 
NARCO-TRAFFICKERS IN BURMA
	by Dennis Bernstein and Leslie Kean

Los Angeles-based Unocal has become an active player in the expanding 
global heroin trade as a result of the oil giant?s business activity 
with the narco-dictatorship of Burma (also known as Myanmar), according 
to an affidavit filed as part of an ongoing federal lawsuit.
	The affidavit - filed April 7 with the U.S. District Court in Los 
Angeles - states that the government-controlled Myanma Oil and Gas 
Enterprise (MOGE)  ?has been the main channel for laundering the 
revenues of heroin produced and exported under the control of the 
Burmese army."
	The legal document was filed in support of a suit that seeks to 
hold Unocal - the largest American investor in Myanmar - liable for 
widespread human rights abuses allegedly committed by the Burmese 
regime. Francois Casanier, an associate researcher for the Paris-based 
Geopolitical Drugwatch, wrote the affidavit.
	Unocal and the French oil giant Total are  partners in a joint 
venture with MOGE to build a $1.2 billion gas pipeline project through 
southern Burma. The 14 plaintiffs in the federal lawsuit are ethnic 
minorities who live in the region where the pipeline is being built.  
They charge that the Burmese military, in providing security and 
infrastructure support for the pipeline's construction, is committing 
human rights abuses, including forced labor, forced relocations, rape, 
torture and killings.
	A little-noticed March 25 ruling by Federal District Judge 
Richard A. Paez held that Unocal and its executives could be held 
liable for illegal and repressive actions committed by the Burmese 
government in the course of their business dealings. 
	The court action, the first of its kind, was reported by several 
newspapers in mid April. But the explosive contents of Casanier?s 
affidavit, which have received virtually no coverage, paint a 
disturbing picture of an oil giant benefiting from the international 
drug trade.  		
	According to a 1996 State Department report, Burma now supplies 
over 50% of the world's heroin and 60% percent of the heroin sold in 
the United  States. "Drug traffickers and their families are among the 
leading backers of high-profile infrastructure projects in Burma," said 
Robert Gelbard, Assistant Secretary of State for International 
Narcotics and Law Enforcement Affairs.  "They launder their money with 
impunity in banks controlled by the military," he says.
	In announcing sanctions against Burma on April 22, President 
Clinton stated ?The regime has shown little political will to stop the 
narcotics exports from Burma and prevent illicit drug money from 
enriching those who would flaunt international rules and profit by 
destroying the lives of millions. ?  These sanctions are not 
retroactive, and will not affect companies like Unocal who are already 
invested in Burma. 
	The plaintiffs have submitted Casanier's sworn affidavit in 
support of a request for a preliminary injunction that would prevent 
Unocal from doing any further business in Burma pending the outcome of 
the case.
        In his affidavit, the French researcher lays out a compelling 
case that the foreign partners of Burma?s ruling State Law and Order 
Restoration Council (SLORC) provide  "big shields for [the] money 
laundering" of drug dollars. Casanier states that because "heroin has 
become the country's highest valued export, accounting for 50 percent 
to 70 percent of the cash flow into the country," money laundering 
strategies have become an integral part of government operations.
         "MOGE has transferred hundreds of millions of dollars into 
Singapore banks since setting up the joint venture," states the 
affidavit by Casanier, "[yet] it has no assets other than the 
installments of its foreign partners and makes no profit."
        According to Casanier's four year investigation, MOGE has been 
able to purchase military hardware from Portugal and Poland, run 
embassies in Europe, and invest in companies at home, all through the 
use of drug money.
	Randy Renick, an attorney with Hadsell & Stormer handling the 
federal lawsuit, said that the drug allegations are directly related to 
human rights aspects of the case because the military has used its 
extensive arsenal, purchased with profits from the drug trade, against 
the Burma people while protecting foreign investments.
	According to Renick, Casanier's sworn declaration to the court 
"provides irrefutable evidence that Unocal is in partnership with 
criminal drug dealers who are making profits off the backs of the 
indigenous people of Burma."
	In January, the SLORC launched a series of on-going military 
offensives against the Karen and Mon, ethnic minorities living in the 
area surrounding the pipeline, sending thousands of refugees fleeing 
into Thailand.  The Karen, who have been struggling for autonomy and 
democracy in Burma for decades, have been hit particularly hard by the 
assaults.
        "UNOCAL and TOTAL knew or should have known that MOGE has been 
heavily involved in laundering the proceeds of SLORC's heroin trade,? 
states Casanier?s affidavit,  ?both at the time they originally 
contracted with MOGE and in January of 1997 when they signed additional 
[business] contracts.? 
        In December - the month before Unocal signed those new 
contracts - a Unocal shareholders? resolution based on the drug 
allegations was introduced by the 90,000 member Oil, Chemical and 
Atomic Workers International Union (OCAW). The resolution calls for 
Unocal board members to investigate whether MOGE is a drug 
money-laundering front for the Burmese junta and also "the extent to 
which Company officials have been aware of any facts linking MOGE to 
drug laundering."
        Unocal's board of directors said that the company has yet to 
investigate the money laundering allegations. "Proving or disproving 
these allegations would require an investigation that is not 
only illegal but would subject Unocal officers and directors to 
criminal penalties [in Burma]," a board statement explained. 
        OCAW spokesperson Joe Drexler said he found that suggestion 
ridiculous. "It is absurd that Unocal would be concerned about 
legalities of conducting an investigation in a country controlled by an 
outlaw regime which deals in drugs, violates international law 
continuously and creates its own laws to suit its own purposes," 
Drexler said.
	Both the Burmese government and Unocal deny all charges.
	?The charges are politically motivated,? said a spokesperson for 
the Burmese Embassy in Washington, D.C., who asked not to be identified 
by name. ?MOGE is a state run company - run in accordance with rules 
and regulations - and it can?t do anything outside the law.?
	Barry Lane, a Unocal spokesperson in Los Angeles, said that the 
charges are ?absolutely false and outrageous...It?s an insult to think 
we?d involve ourselves in the drug trade.?
	On March 5, Unocal was handed two major setbacks by the U.S. 
Securities and Exchange Commission (SEC}. It denied the the oil 
company?s request to exclude the OCAW resolution from its upcoming June 
2 shareholder's meeting. On the same day, the SEC also gave the 
Interfaith Center on Corporate Responsibility, composed of 256 
religious groups who control assets of $50 billion, the go ahead to 
introduce a second shareholders resolution attempting to restrain 
Unocal from doing business with Myanmar.
	"If the drug-laundering allegation is true, it is very unlikely 
that this could have occurred without the knowledge of Unocal 
officials,? said Robert Wages, president of the OCAW. ?Uncovering the 
truth may mean that Unocal bears direct responsibility for the rise in 
heroin use in the US."
	In an interview on April 19, Casanier expressed concern that if 
Unocal and Total are allowed to move forward unchecked, "it will be a 
green light for everybody to jump into the Burmese market and develop 
activities which will be definitely connected with drug money 
laundering on a big scale.? 
	And, Casanier said, "not only in Burma, but everywhere where 
there is dirty money involved, the Burma case will be considered an 
example."
	Meanwhile, the great oil rush to Burma continues with Arco 
following Unocal's lead. In partnership with MOGE since 1995, ARCO 
notified the SLORC in late March about a new gas well just discovered 
off Burma's coast. On February 12, Reuters reported that Texaco signed 
a deal with Thailand to sell that country natural gas drilled in the 
same area as the Unocal drilling fields. 


Dennis Bernstein and Leslie Kean have reported on Burma's heroin trade 
in the Boston Globe, The Nation, and for Pacific News Service, where 
Bernstein is an associate editor.