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BurmaNet News: October 27, 2000

______________ THE BURMANET NEWS ______________
        An on-line newspaper covering Burma 
_________October 27, 2000   Issue # 1650__________

NOTED IN PASSING:   "We fell on the wrong side of the power struggle and 
as a result lost our business. Unfortunately in Burma that's what 
matters--political connections, not law."

Win Win Nu, co-owner of Mandalay Brewery ousted by regime partner.  See 
Far Eastern Economic Review: Mandalay Migraine

*Kyodo: ILO mission leaves Myanmar after 6-day visit
*DVB: Rise in number of military, police at Thai border addicted to 

*Xinhua: Senior CPC Official Meets Myanmese Delegation
*United Nations: Statement of Burma Rapporteur to Commission on Human 

*The Wall Street Journal: Pipeline Project in Burma Puts Cheney in the 
*Far Eastern Economic Review: Mandalay Migraine


OTHER _______

The BurmaNet News is viewable online at:

__________________ INSIDE BURMA ____________________

Kyodo: ILO mission leaves Myanmar after 6-day visit

Kyodo, Rangoon, 26 October 2000. A five-member International Labor 
Organization (ILO) mission led by Francis Maupain, special adviser to 
the ILO director general, left Myanmar late Thursday after a six-day 
fact-finding mission.

The group met with Lt. Gen. Khin Nyunt, secretary of Myanmar's ruling 
junta, before departing Yangon, official sources said. 

The mission had series of meetings with the directors general of several 
departments, including the labor, home, foreign and judicial 
departments, since arriving in Myanmar last Friday. 

The group also met Foreign Minister Win Aung earlier Thursday. 
The ILO mission was in the country to study Myanmar's compliance with 
ILO recommendations on forced labor.

Both junta officials and mission members refused to discuss details of 
the talks, with a mission member saying they cannot comment before they 
report their findings to the ILO chief.

If the findings are negative, the ILO may adopt measures, including 
recommending that ILO-member governments, employers and workers, review 
their relations with Myanmar and take measures to ensure their relations 
do not perpetuate forced labor in the country.


DVB: Rise in number of military, police at Thai border addicted to drugs 

Text of report by Burmese opposition radio on 25th October 
Democratic Voice of Burma radio

It has been learned that due to the drugs manufactured, distributed and 
sold by the UWSA [United Wa State Army] Wa group, the drugs have not 
only affected the Thai people but the number of drug addicts has also 
increased in the SPDC [State Peace and Development Council] military. 
DVB [Democratic Voice of Burma] correspondent Maung Tu filed this 
[Maung Tu] It has been learned that many SPDC soldiers in Htan Lan area 
opposite Mae Sot [in Thailand] and along the Myawadi border stretch have 
become drug addicts. Lt Soe Naing, who is the team leader of the BSI - 
Bureau of Special Investigation - posted in Myawadi, is said to be 
addicted to amphetamines. According to one Myawadi resident, the SPDC 
Military Intelligence [MI] Unit No 25, the BSI personnel, SPDC soldiers 
and DKBA -  Democratic Karen Buddhist Army - members became addicted to 
amphetamines after trying out the seized drugs. 

On 19th September, a combined team of Myanmar Police Force [MPF] members 
and MI personnel seized 1,500 stimulant tablets from a teashop in 
Myawadi. These amphetamine tablets were divided between the police and 
the MI, where some were resold and some were consumed. A week later when 
Pa-an based senior MI officials came for an inspection, they received 
the news report about the seizure but there were no drugs. 

Similarly, it was learned that most officers and soldiers from Myawadi 
and Thingannyinaung-based LIB [Light Infantry Battalion] 355, LIB 356, 
LIB 357 and LIB 310 have become drug addicts. 

Currently, amphetamines can easily be bought at teashops in Myawadi, 
Kawkareik and Pa-an. One amphetamine tablet costs around 300 to 500 kyat 
but in Mae Sot, Thailand, the tablet is worth around 50 to 60 baht. As 
the amphetamines are produced at the Thai-Burma border, there is also 
trafficking from Lashio in Shan State via Mandalay and Pa-an. One 
amphetamine tablet costs about 200 kyat in Mandalay so those selling 
them to Mae Sot receive twice the amount in profit. 

Such easy access to stimulant drugs has led to many police, military and 
MI personnel posted at the border, and DKBA members becoming drug 
addicts. Furthermore, there have been shooting incidents and lapses in 
duties committed under the influence of drugs at the border.

___________________ REGIONAL/INTERNATIONAL___________________

Xinhua: Senior CPC Official Meets Myanmese Delegation

  Xinhua, Beijing, 26 October 2000. Li Ruihuan, a Standing Committee 
member of the Political Bureau of the Chinese Communist Party Central 
Committee, met with Win Myint, vice-president of the Union Solidarity 
and Development Association of Myanmar, and his delegation here today.

Li, who is also chairman of the National Committee of the Chinese 
People's Political Consultative Conference (CPPCC), said China and 
Myanmar are friendly neighbors faced with the same task of developing 
the economy and improving living standards, and they hold the same or 
similar views on many international issues, Li said, stressing that it 
is in the fundamental interests of both countries to  further advance 
their friendly cooperation.

Li said China has undergone dramatic changes since its reform and 
opening up. There are broad prospects for economic development of 
Myanmar, which enjoys abundant forest,
mineral and tourist resources.

The development of the two countries is mutually beneficial, Li said, 
adding that China sincerely hopes that Myanmar will realize economic 
development and national prosperity, allowing a happier life for its 

Win Myint, who is also the third secretary of the State Peace and 
Development Council of Myanmar, agreed with Li that Myanmar and China 
are close in their brotherly relations.
Myanmar, as always, will stick to its policy of developing friendship 
with China, he affirmed.

He also voiced admiration of China's great achievements in the past over 
20 years, expressing the hope that bilateral economic and trade 
cooperation would be further reinforced so as to realize a common 



United Nations: Statement of Burma Rapporteur to Commission on Human 

The following statement by Judge Lallah to the UN General Assembly was 
read out on his behalf by Mr Bacre Ndiaye, Director of the New York 
Office of the High Commissioner for Human Rights, on 26 October 2000. 



26 OCTOBER 2000

Mr Chairman,

I must apologise for not being present in person. This is due to some 
unfortunate administrative misunderstanding.

Since my appointment as Special Rapporteur in mid 1996, this is the 
fifth occasion on which I am presenting to the General Assembly an 
interim report on the situation on human rights in Myanmar.  The present 
report deals with information gathered up to the end of July this year.  
Between that date and the present time, there have been some 
developments, the most important of which I feel bound to comment upon.

Mr Chairman,

The General Secretary of the National League for Democracy, Daw Aung San 
Suu Kyi, was stopped along with some members
of her party while on their way to attend meetings at a party branch 
outside Yangon.  After some ten days, they were all forcibly taken back 
to Yangon where Daw Aung Suu Kyi was held incommunicado in her residence 
for some 12 days.  Other leaders of her party were either detained or 
held incommunicado.  The headquarters of the party were ransacked and 
locked up.

Mr Chairman,

This was not the first time on which Daw Aung San Suu Kyi had been 
subjected to a stand off or was prevented from attending branch meetings 
outside Yangon.  She has since this last occasion been prevented from 
taking the train to attend meetings of her party outside Yangon.  The 
policy of the military authorities over the past several years still 
continues to privilege the repression of all political activity over the 
engagement in a genuine political dialogue, as evidenced in my past 
reports.  This policy continues to be implemented, first, by the 
enforcement of laws, orders and administrative action designed to 
criminalise and sanction the exercise of normal political activity; 
secondly by the intimidation, harassment, detention or imprisonment of 
the NLD leadership and membership, and of other opposition groups; 
thirdly, by the severe restrictions that govern their movement outside 
their particular locality and, fourthly, by the large scale closure of 
branch offices of the party. This is a policy which inherently violates 
the fundamental freedoms of association, assembly and movement as well 
as freedom of expression, all of which have found their consecration in 
the Universal Declaration of Human Rights as further explicated in the 
Mr Chairman,

At paragraph 19 of this report I have referred to the arrest, trial and 
conviction of Mr James Mawdsley.  I have noted the absence of an arrest 
warrant, of legal representation and of time to prepare his defence, 
including the inordinately heavy sentence of imprisonment imposed upon 
him. A few weeks ago the UN Working Group on Arbitrary Detention came to 
the conclusion that Mr Mawdsley was being arbitrarily detained and 
called upon the Authorities to remedy the situation.  This is not 
surprising as he was again subjected to a sentence which had already 
been commuted. Further, what was held against him was the handing out of 
pro-democracy leaflets - an act which is normal in any society and quite 
in accordance with international norms governing the exercise of freedom 
of xpression. It would appear that Mr. Mawdsley was being held in 
solitary confinement and had been beaten up in prison. I am happy to 
report that Mr. Mawdsley has now been released and sent back to his 
country. I am also happy to report that six elderly prisoners have been 

Mr Chairman,

This report and my last report to the Commission on Human Rights cover 
the situation of human rights, in so far as it affects not only he 
exercise of civil and political rights but also, in a more systematic 
way, economic, social and cultural rights.  Needless to say, precisely 
because of the negation of political rights, the people have no say in 
the economic, social and cultural policies that affect all aspects of 
their everyday life in the short term and also for their future 
survival, well being and development.

Mr Chairman,

I would like to touch upon two aspects of the lives of people in Myanmar 
which continue most adversely to affect their civil as much as their 
economic and social rights, namely, the food situation and forced 

Mr Chairman,

Extreme poverty and the absence of food security have been the result of 
a policy characteristic of the militaristic approach adopted by the 
Authorities.  This policy is implemented by arge-scale forced relocation 
in the ethnic areas, accompanied as it has been, by forced labour, 
inhuman treatment and other much graver violations of human rights, 
depriving the rural population of their lands and consequently, of their 
means of subsistence.  Forced relocation has now been going on for
many years and would appear to be in furtherance of a scorched earth 
policy, or what is generally known as the "four cuts" strategy adopted 
by the military, that is to say, depriving insurgents or suspected 
insurgents of, firstly, food,  secondly, funds and resources, thirdly, 
sources of intelligence and information, and, fourthly, possibilities of 
recruitment.  All this is exacerbated by the army forcibly taking, 
without any payment, any rice, poultry and other farm animals to feed 
themselves and burning off the rest of the crops. 
Mr Chairman

In those areas where people still do farming, the compulsory sale to the 
Authorities of rice is still bedevilled by the very low price and the 
quota fixed by the Authorities. The situation of food scarcity has been 
the subject of the well documented proceedings of the Tribunal on Food 
Security of the non-governmental Asian Commission on Human Rights which 
heard many witnesses.  I referred to these proceedings and the 
conclusions reached in my last report to the Commission on Human Rights 
(paragraph 36 and 37 of E/CN4/2000/38). 
Mr Chairman,

At paragraph 43 of my present report, I have referred to the resolution 
adopted in June this year by the International Labour Conference in view 
of Myanmar's persistent failure to comply with ILO Convention No 29, as 
found by the Commission of Enquiry.  This resolution was scheduled to 
have effect from 30 November this year, unless the Governing Body of the 
ILO was satisfied that sufficient concrete legislative, executive and 
administrative measures had, in the meantime, been taken to give effect 
to the recommendations of the Commission of Enquiry and put a stop to 
the practice of forced labour. It is my understanding that an ILO 
mission has been sent to Myanmar so as to report to the Governing Body, 
which is scheduled to meet next month. I greatly hope that the 
Authorities in Myanmar have made use of the breathing space afforded to 
them to put an end to forced labour in their law and practice.

Mr Chairman,

In conclusion, may I say that it is my unfortunate and regrettable duty 
to address this Assembly year after year to report on a human right 
situation which shows no improvement and which discards the repeated 
resolutions of this Assembly and the Commission on Human Rights.  It 
remains my firm conviction that the situation will experience a 
fundamental change if the Authorities begin to privilege a genuine 
political dialogue over military and repressive solutions to a problem 
which is essentially political and which is so adversely affecting not 
only the people of the country but also neighbouring countries in the 
region. Some of these countries experience serious and periodic flows of 
displaced persons or refugees when they are themselves facing difficult 
Mr Chairman,

It remains my hope that the Authorities in Myanmar, after the lapse of a 
decade since the conduct of the last general elections, begin to respond 
in a positive way to the resolutions which have been repeatedly adopted 
by the General Assembly and the Commission on Human Rights. 
Mr Chairman

Thank you.


_______________ ECONOMY AND BUSINESS _______________

The Wall Street Journal: Pipeline Project in Burma Puts Cheney in the 

By PETER WALDMAN (Staff Reporter)  

October 27, 2000 

    Among the many news releases issued by Halliburton Co. under former 
Chief Executive Officer Richard Cheney, one stands out for what it 
didn't say. 

The announcement, in December 1996, trumpeted the "success story" of a 
Halliburton joint venture that builds undersea pipelines, unveiling 
several large contracts in Asia and Europe for the London-based 
operation. Missing from the rundown, however, was any mention of one of 
the venture's biggest contracts that year -- in Burma. 

Halliburton's Burma connection is a potentially embarrassing episode for 
Mr. Cheney, now in the final stretch of his campaign as the Republican 
vice presidential candidate. Since 1988, when Burmese's army killed 
thousands of pro-democracy protesters to stay in power, the country's 
military junta has been widely condemned as one of the world's most 
brutal violators of human rights. The U.S., which withdrew its 
ambassador and suspended aid to Burma a decade ago, banned new U.S. 
investment in the country in 1997 and has led international efforts to 
isolate the regime. 

The sanctions don't cover service contractors such as Dallas-based 
Halliburton and the energy-services giant's subsidiaries, nor do they 
affect U.S. investments in Burma prior to 1997. Hence, Halliburton, 
which today remains one of the last U.S. companies to keep an office in 
Burma, doesn't appear to have violated any laws by working there. Most 
U.S. companies, including oil giants Texaco Inc. and Atlantic Richfield 
Corp., pulled out of Burma years ago. 
Mr. Cheney, according to his press secretary, was kept "generally aware" 
of Halliburton's foray into Burma to work on a major pipeline project. 
He has long opposed unilateral U.S. business sanctions on the grounds 
that they put American businesses at a disadvantage to foreign rivals 
and that the U.S. can influence a foreign government best by doing 
business with the country, rather than placing embargoes on it. Mr. 
Cheney's position dates back at least to his years in Congress, when he 
opposed such actions against South Africa's apartheid regime. After 
taking the helm of Halliburton, he became one of corporate America's 
most vocal opponents of sanctions. 
"I personally have spoken many times that unilateral sanctions, I think, 
are a mistake. They almost never work," he said in March when asked if 
he supported easing sanctions against Iran. In an antisanctions speech 
in 1996, he also cited restrictions on business in Libya and Nigeria. 
"We seem to be sanction-happy as a government," he said in 1997, 
according to an oil-industry newsletter. "The problem is that the good 
Lord didn't see fit to always put oil and gas resources where there are 
democratic governments." 

Halliburton itself has been active in opposing attempts to restrict U.S. 
business dealings in Burma. In 1995, it opposed shareholder votes on 
doing business there. More recently, the National Foreign Trade Council, 
a lobbying group backed by Halliburton and other businesses, persuaded 
the Supreme Court in June to strike down a Massachusetts law that denied 
state contracts to companies that did business in Burma. 

In Burma itself, the Western companies that in partnership with the 
country's military rulers sponsored the pipeline and hired contractors 
like the Halliburton venture already knew the project was benefiting 
from forced Burmese labor and "numerous acts of violence" by Burmese 
military, according to recent findings by a U.S. federal judge in Los 
Angeles. In that case, U.S. District Court Judge Ronald S.W. Lew 
dismissed human-rights charges brought by Burmese plaintiffs against Los 
Angeles-based Unocal Corp., a principal investor in Burma's Yadana gas 
field, on the grounds that the company didn't conspire to commit the 

But Judge Lew's 41-page order granting summary judgment in favor of 
Unocal quoted extensively from depositions, company records, 
consultants' reports and State Department cables to show that the 
project's French and U.S. sponsors, as far back as 1993, were well aware 
of human-rights abuses in connection with the pipeline. "My conclusion 
is that egregious human-rights violations have occurred, and are 
occurring, now in southern Burma" along the pipeline route, a Unocal 
consultant reported to the company in 1995, a year before Halliburton's 
London joint venture agreed to install the offshore portion of the 

"The most common" abuses, the consultant reported, as quoted in Judge 
Lew's order, "are forced relocation without compensation of families 
from land near/along the pipeline route; forced labor to work on 
infrastructure projects supporting the pipeline ... and imprisonment 
and/or execution by the army of those opposing such actions. Unocal, by 
seeming to have accepted [Burma's] version of events, appears at best 
naive and at worst a willing partner in the situation." A different 
consultant's report for Texaco in 1996 noted the "harsh conditions" of 
unpaid laborers on the Burma pipelines, "including young children." 

In addition to Judge Lew's findings, several human-rights groups, the 
United Nations Special Rapporteur on Burma, the U.S. Department of Labor 
and the International Labor Organization have all published detailed 
reports on forced labor and other human-rights violations in Burma, with 
particular references to the Yadana project. President Clinton, in a 
speech last year at the ILO annual conference in Geneva, singled out 
Burma for "flagrant" rights abuses and called on other nations to help 
the Burmese people. "We must stand by them and keep up the pressure for 
change," the president said. 

Halliburton hasn't been mentioned specifically in any of these 
instances. In his order, Judge Lew made no mention of Halliburton or 
other contractors and no finding on whether they were aware of the use 
of forced labor on the project. 

A Unocal spokesman, while praising Judge Lew's legal reasoning for 
dismissing the case, denied the judge's findings that the project's 
Western partners knew of and benefited from human-rights violations by 
Burmese troops. He says the Yadana field is now ramping up, as planned, 
to produce 525 million cubic feet of gas a day by the end of this year, 
to be delivered via pipeline to Thailand. 

"We acknowledge human-rights abuses have occurred in Burma," the Unocal 
spokesman says, "but, as the judge rightly pointed out in his order, we 
have no control over the military forces of Burma. We continue to 
believe the presence of Unocal and other companies with high standards 
of business practices can have a positive impact on Burmese political 
and economic climate." 
At Halliburton, a spokeswoman says the company used no forced labor on 
the pipeline. But she refuses to comment on the company's decision to 
work in Burma or whether Halliburton was aware of human-rights or 
security concerns in Burma during Mr. Cheney's tenure. "From time to 
time, several non-U.S. subsidiaries of Halliburton Company have 
performed services for oil-and-gas companies operating in Burma," she 
says in a prepared statement. "These business activities have been 
conducted in compliance with applicable U.S. law." 

Halliburton refers questions concerning Mr. Cheney, its CEO from 1995 
until he was chosen as Texas Gov. George W. Bush's running mate in July, 
to Bush campaign headquarters in Austin, Texas. 

There, Cheney press secretary Juleanna Glover Weiss says the former 
Halliburton CEO was kept abreast of the Burma operations, all of which, 
she says, were "consistent with U.S. policy and U.S. law." She says the 
decision to work in Burma was made by the Italian management of 
Halliburton's joint-venture partner, Milan-based Saipem SpA, a unit of 
Italian energy company ENI SpA. She adds that Mr. Cheney wasn't involved 
in that decision, but was aware of it. Through Ms. Weiss, Mr. Cheney 
declined requests for an interview to discuss the level of his 
involvement in Halliburton's Burma project. 

Like South Africa in the 1980s, Burma has been a poster child of the 
corporate-accountability movement in the past decade. The most powerful 
calls for an economic embargo of Burma emanate from Aung San Suu Kyi, a 
winner of the Nobel Peace Prize, whom the junta has held under house 
arrest since her political party won 1990 elections that were deemed 
generally fair. She and other democracy campaigners have been 
particularly critical of the Yadana gas project, arguing that it has 
fostered military brutality, as well as raised money to bolster the 
"Our message is clear: This is not the time to do business in Burma," 
says Bo Hla-Tint, minister for the foreign-affairs committee of Burma's 
elected government in exile. "The oil companies are propping up the 
junta by giving them legitimacy and hard currency that it desperately 
needs to buy arms." 

Besides Unocal and Halliburton, other U.S. energy companies recently 
active in Burma include BJ Services Co., Houston, and J. Ray McDermott 
SA, a unit of McDermott International Inc., New Orleans. The McDermott 
subsidiary built much of the offshore infrastructure for the Yadana 
project, such as various platforms and wellheads in the Andaman Sea. 
McDermott's Burma projects are described in detail on the company's Web 
site, including the revenue garnered by the company in Burma: a total of 
$162 million in 1997 and 1998, making the country J. Ray McDermott's 
fifth-largest revenue source in the two-year period, according to the 
Web site. 
Halliburton's Web site, which archives company news releases and 
regulatory filings going back many years, makes no mention of Burma, 
except in a long list of places where prospective job applicants may 
work. In a long directory of global offices, it has no entry for 
Rangoon. A Halliburton spokeswoman confirms that the Rangoon office is 
still operating. 

Other corporate Web sites indicate that Halliburton and various 
joint-venture partners operated in Burma as far back as the early 1990s, 
helping do precommissioning services on the Yadana project. In March 
1996, according to industry reports, Mr. Cheney himself presided over a 
signing ceremony in India on an agreement for Halliburton's Brown & Root 
International unit to supply gas produced in Burma to India. Later in 
1996, according to Offshore Data Services, a Houston research firm, the 
Halliburton venture was awarded the big Yadana undersea pipeline 
contract, a year or so after Mr. Cheney became Halliburton's CEO. 

For the project, the London-based joint venture, called European Marine 
Contractors Ltd., was responsible for laying 365 kilometers (about 226 
miles) of 36-inch pipe, connecting the Yadana field with the Burma 
peninsula near the village of Daminseik. The Halliburton news release of 
December 1996 that didn't mention the Burma project was datelined at 
corporate headquarters in Dallas and did recount in great detail 
European Marine's recent triumphs in France, Holland, Britain, Norway 
and China. Joint-venture partner Saipem features the Yadana pipeline on 
its Web site as one of its major achievements. 

A Halliburton spokeswoman says she was unable to find out why the 
company omitted the Yadana contract from its 1996 news release on 
European Marine's exploits. She says Halliburton has never tried to 
conceal its work in Burma. 

The pipeline's financial value to Halliburton is difficult to ascertain. 
Halliburton's financial disclosures show that its European Marine joint 
venture was highly profitable, and that its revenue and net income 
soared in 1997, the year most of the Yadana work was completed. That 
year, European Marine earned net income of $48.5 million, up 11% from 
1996, on a 77% surge in revenue, to $436.1 million. The Halliburton 
spokeswoman declines to explain the gains. 
Though the Halliburton spokeswoman didn't respond to human-rights or 
security questions, a McDermott spokesman says J. Ray McDermott, like 
the Halliburton venture, did most of its work offshore. Thus, he says, 
the McDermott unit didn't encounter any problems between civilians and 
the military. 

Still, according to the 1996 report of the U.N. Special Rapporteur on 
Burma, Judge Rajsoomer Lallah of Mauritius, Burmese villagers were 
forced to work on portions of the project offshore, as well as on the 
mainland. For example, in May 1995, the U.N. Rapporteur wrote, the 
military ordered about 200 villagers to go to Heinze Island, an 
uninhabited shoal in the Andaman Sea where Burmese forces set up a base 
camp to guard construction work on the offshore pipeline. 
On Heinze Island, Judge Lallah found, the villagers were required to 
work for two weeks without pay, clearing land, building bamboo barracks 
and constructing a helicopter pad high atop a steep hill -- probably for 
later use by the Western companies that built the pipeline, according to 
Burmese human-rights monitors. The villagers were forced to pay their 
own transportation costs to the island; those who refused to go were 
arrested and sent into rebellious areas to serve as porters for the 
military, Judge Lallah wrote. 

Arguments in defense of Burma's human-rights record are hard to come by. 
But Unocal did offer one in the Los Angeles federal court case. Unocal, 
noted Judge Lew in his order, took the position that the Burmese 
military's use of forced labor is akin to public-service requirements 
that existed in some U.S. states in the early 20th century. 
Specifically, Unocal compared Burma's actions to those of the state of 
Florida, which once required residents to pay a tax of $3 or work on 
roads and bridges for six days a year. 

"Unocal's public-service argument is not compelling," Judge Lew 
concluded, largely because "Unocal knew that forced labor was being 
utilized and that the Joint Venturers benefited from the practice." 


Far Eastern Economic Review: Mandalay Migraine

Issue cover-dated November 2, 2000

BURMA - Mandalay Migraine
The Rangoon junta's seizure of a joint-venture brewery could test 
Asean's resolve and its ability to protect foreign investors


By Shawn W. Crispin/BANGKOK and Bertil Lintner/CHIANG MAI

SINGAPORE BUSINESSWOMAN Win Win Nu has spent the past two years vainly 
battling in Burma's courts over the government's seizure of her 
investment in a thriving joint-venture enterprise in her former 

Her calls for help to the Association of Southeast Asian Nations, or 
Asean, have been met with silence. How her case is resolved, if at all, 
will speak volumes about Asean's ability to protect foreign investment 
in the region through its untested dispute-settlement mechanism. 

The case, if taken up by Asean, could also serve as a test of Burma's 
commitment to the organization. Burma first saw Asean as a ticket to 
participation in the region's economic growth of the mid-1990s. Since 
then, however, it has come to regard membership as a liability because 
it helps to put the ruling military's repressive policies under the 

Win Win Nu's case is a compelling one. When Burma opened its doors to 
foreign investment in the early 1990s, she spotted a good business 
opportunity. Helped by influential contacts in the ruling State Peace 
and Development Council, including intelligence chief Lt.-Gen. Khin 
Nyunt, Win Win Nu forged a joint venture between her Singapore-based 
company, Yaung Chi Oo Trading, and the government's Ministry of Industry 
No. 1 in 1993 to bring the bankrupt Mandalay Brewery bubbling back to 

Win Win Nu, who took a 45% stake in the venture, was in charge of 
operations and marketing while the ministry handled the books. Profits 
would be shared. 

The fresh infusion of modern management, technology and capital worked 
wonders. In six months, output increased 10-fold, salaries leapt 20-fold 
and cash flows soared. Mandalay Beer became a recognized brand name 
after the brewery opened more than 40 pubs nationwide. The company also 
became one of the country's largest domestic taxpayers. 

Burma's experiment in opening to foreign investment was paying off 
handsomely, stimulating local economic activity while generating 
revenues for the depleted state coffers. 

But the joint venture came to an abrupt halt on November 11, 1998, when 
armed soldiers and police seized the brewery on the orders of SPDC 
Chairman Gen. Than Shwe. Win Win Nu says her local bank accounts were 
frozen and claims she was threatened with arrest for misappropriating 
funds, which she denies. She fled the country as the junta took over 
operation of the brewery just three months after the final payment of 
her pledged $6.3 million initial investment. 

"Because we were so successful, the brewery became an easy target for 
greedy soldiers and bureaucrats," Win Win Nu says. "We fell on the wrong 
side of the power struggle and as a result lost our business. 
Unfortunately in Burma that's what matters--political connections, not 

Burmese law explicitly bars nationalization of foreign investments. But 
after fighting her case unsuccessfully through the local courts for 18 
months, Win Win Nu was forced to liquidate her share in the company. 

Court papers indicate she was facing an uphill battle by going through 
Burma's murky legal system. The first team of liquidators was not even 
led by a lawyer but by local tycoon Steven Law, whose family runs 
Burma's largest privately owned business group. The junta most probably 
enlisted the services of the Laws because of their perceived business 
acumen, a rare commodity in military circles in Burma. 

Win Win Nu is now lobbying to have her case put before Asean's untested 
dispute-settlement mechanism on the grounds that Burma's seizure of 
Mandalay Brewery directly violates the commitments to protect foreign 
investment that it entered into upon joining Asean in 1997. 

Asean Secretariat officials in Jakarta say they would be charting new 
territory if they took on the case. So far, the regional body, which has 
shown consistent impotency in mediating regional disputes on both 
political and economic fronts, has failed to respond to appeals for 
arbitration sent by Win Win Nu's Singapore lawyers. An Asean official 
claims the complaint was not filed through the "proper channels." 

Under normal circumstances, the businesswoman should have grounds for 
confidence, judging by the results of an independent report into her 
case commissioned by the government's Myanmar Investment Commission and 
released in June last year. Local PricewaterhouseCoopers representative 
U Hla Tun found the takeover was conducted "without legal sanction" and 
that the charges of misappropriation of funds against Win Win Nu were 
unsubstantiated, according to a copy of the confidential report seen by 
the REVIEW. The investigation also warned that the takeover could 
"tarnish the 'open market economy' policy declared and prescribed by the 
government of the Union of Myanmar." 

While Win Win Nu seems to be the first foreign investor to have been 
targeted for de facto nationalization, Burma's reputation as an 
attractive destination for foreign investment had already started 
turning sour. Ever since the mini-boom of the mid-1990s, red tape, 
bureaucratic hassle and enduring worries of political instability have 
slowed foreign investment to a trickle. Now, the SPDC's apparent 
unwillingness to abide by both its own and international laws protecting 
foreign investment could further dampen potential investors' spirits. 

"Although the policies on the books are unchanged, the SPDC attitude 
towards small-scale foreign investment has changed 180 degrees since the 
crisis," says a Bangkok-based lawyer who has clients with investments in 

The takeover of Mandalay Brewery gives more ammunition to those who 
argue that the junta is moving away from its flirtation with economic 
openness, a position Khin Nyunt once trumpeted, to the chagrin of army 
commander Gen. Maung Aye. When the local currency, the kyat, plunged 
during the Asian Crisis, the Maung Aye group seemed to prevail with 
their argument that too much openness, too fast, was a threat. 

Until now, many looked at SPDC leader Than Shwe as the moderating force 
that kept these two power bases from breaking into factions. But Than 
Shwe's order to seize Mandalay Brewery may signal that the ailing 
chairman will give his blessing to Maung Aye regarding economic 
Win Win Nu says Than Shwe ignored numerous warnings from Khin Nyunt's 
office about the negative international fallout that nationalizing the 
brewery might incur. (Burma's Investment Commission, the Ministry of 
Economic Planning and Economic Development and Than Shwe's office didn't 
reply to faxes and phone calls from the REVIEW.) 

Meanwhile, Asean's reputation and overall viability have continued to 
sag. Investment in the region has almost ground to a halt since the 
crisis, particularly in Burma. Asean has worked to restore investors' 
confidence in the region by sending promotion missions to the United 
States, Japan and Europe in recent months, while also pushing to enhance 
the transparency of member nations' investment regimes. 

So far, though, that has been a hard sell against the political 
uncertainties in Indonesia, the Philippines and even Thailand. And 
without a firm response to the junta's takeover of Mandalay Brewery, 
that sell could become even harder as perceptions grow that investment 
protection codes are only so much unenforceable parchment. 

But perhaps one clear lesson from the Mandalay Brewery case is the 
pervasive influence of nepotistic policies and an arbitrary legal system 
on the success or failure of any foreign business in Burma. 

"If rules and regulations are not enforced for the layman, that is bad 
for Asean, bad for me, bad for everyone," says Win Win Nu. 

_____________________ OTHER  ______________________



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