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NEWS - L.A. Bans Trade Ties to Burm



Subject: NEWS - L.A. Bans Trade Ties to Burma despite Federal Ruling

NOTE: It was a Federal District Court that has no affect on Los Angeles.


Rights-U.S.: L.A. Bans Trade Ties to Burma despite Federal Ruling

            Inter Press Service
            17-DEC-98

            WASHINGTON, (Dec. 16) IPS - The Los Angeles City
            Council, defying a recent federal court ruling and pressure
            from big business, has voted unanimously to ban companies
            that do business in Burma from bidding for city contracts. 

            Yesterday's 13-0 vote marked the latest development in an
            ongoing battle between local human rights and
            environmental activists and major U.S. and foreign
            corporations over the legality of local and state ordinances
            which penalize companies for doing business with
            controversial governments abroad. 

            The city council's action, which takes effect in 30 days,
came
            less than a month and a half after a federal court in
            Massachusetts ruled that such measures -- referred to as
            "selective purchasing" laws -- violate the Constitution,
which
            grants the federal government exclusive control over foreign
            affairs. 

            "State interests, no matter how noble, do not trump the
            federal government's exclusive foreign affairs power," U.S.
            District Court Judge Joseph L. Tauro ruled in a challenge to
            a Massachusetts law requiring companies that do business
            in Burma to add a 10 percent penalty to their bids for state
            contracts. 

            That decision, the first against the selective-purchasing
laws
            enacted by scores of city councils, states, and universities
            during the anti-apartheid struggle in the 1980s, is now on
            appeal. The issue is likely to be decided eventually by the
            U.S. Supreme Court. 

            Judge Tauro's decision marked a major victory for a
coalition
            of some 600 major U.S. and foreign corporations, the
            National Foreign Trade Council (NFTC), which filed the
            lawsuit against the Massachusetts law. 

            NFTC president Frank Kittredge told IPS today that the
            group, which includes such heavyweights as General
            Electric, Boeing and Exxon, considers the Los Angeles
            ordinance as falling into the same category as the
            Massachusetts law. But he said it was "too early to tell"
            whether the group will take legal action. 

            "We think it's most unfortunate in light of all that's gone
on,"
            he said, adding, "we still believe that such sanctions are
            unconstitutional." 

            "This is a major defeat for the NFTC's campaign to get
            selective-purchasing laws eliminated," said Simon Billeness,
            an analyst at Franklin Research and Development
            Corporation in Boston and a key organizer in the "Free
            Burma" movement here. 

            It also marks a defeat for the European Union (EU), which
            had submitted its own brief attacking selective-purchasing
            laws in the Massachusetts case. 

            The EU and Japan have lodged complaints about such laws
            with the World Trade Organization in Geneva, claiming that
            they violate an international government-procurement
            agreement which forbids the use of non-economic criteria in
            awarding government contracts. 

            Los Angeles, the second largest U.S. city after New York,
            will join a number of other jurisdictions around the country
in
            applying selective-purchasing laws against Burma, whose
            military regime has been accused of major violations of
            human rights and drug trafficking. 

            In addition to Massachusetts, New York City, San Francisco,
            Oakland, Portland (Oregon), and two dozen other towns and
            cities have passed legislation penalizing companies which
            do business in Burma. Selective-purchasing laws against
            Nigeria, China and Cuba are also in effect in several towns
            and cities. 

            Such laws were used with greatest success to punish South
            Africa for its racist "apartheid" policies, where they were
            credited with the exodus of scores of some of the United
            States' biggest corporations, such as Coca-Cola, IBM and
            General Motors. 

            Their withdrawal from South Africa is generally believed to
            have played a critical role in persuading the country's
white
            leaders to abandon apartheid. 

            Similar laws in New York, California, Pennsylvania and other
            states and cities targeting Swiss banks and insurance
            companies which had failed to account adequately to Nazi
            Holocaust survivors and their families after World War II
            helped prompt a settlement of outstanding claims last
            August. 

            The Los Angeles ordinance, expected to be signed by
            Republican Mayor Richard Riordan, is among the most
            stringent. It bans companies which do business in Burma
            from even bidding on the city's contracts -- hundreds of
            millions of dollars worth are awarded each year. 

            The object of such legislation is to force corporations to
            choose between their business in Burma and their stake in
            lucrative government contracts in major U.S. jurisdictions. 

            "We are hopeful that this action will prove to be an
effective
            tool in pressuring the Burmese Government to end its
            repression of its people and move towards a democratic
            government," council member Richard Alatorre said as he
            explained his vote. 

            "The City of Los Angeles does not want its tax dollars going
            to support companies who support widespread atrocities
            which are now taking place in Burma," said council member
            Jackie Goldberg. 

            "The regime in Burma is one of the most brutal in the world
            and is supported by a small group of irresponsible
            corporations," she added. 

            One Los Angeles-based company that had lobbied hard
            against the ordinance issued a strong statement condemning
            the council's action. Unocal, which has a major interest in
a
            gas pipeline in Burma, charged that the council had "moved
            beyond its legal authority." 

            Unocal, which has come under strong attack for its
            operations in Afghanistan, as well as Burma, also noted that
            the ordinance "sends an unwelcome message to the city's
            trading partners in the Pacific Rim." The Association of
            Southeast Asian Nations (ASEAN), it said, has condemned
            such measures. 

            UNOCAL reportedly hired a full-time lobbyist to persuade the
            council to abandon the effort. The NFTC also sent its
            Washington lobbyists to the city to join the bid to kill the
            measure.