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L.A. Times: Myanmar Project Fueling

Subject: L.A. Times: Myanmar Project Fueling International Controversy

Los Angeles Times / News / Nation & World 
Sunday, November 24, 1996

       Myanmar Project Fueling International Controversy
 Asia: U.S. is part of consortium building gas pipeline. Critics, =
however, question partnership with brutal regime.

 By EVELYN IRITANI, Times Staff Writer

DAMINSEIK, Myanmar--It is Saturday morning and a crowd of children is =
giggling over the televised antics of Tom and Jerry, courtesy of the =
foreign energy companies that have promised this impoverished fishing =
village a fast track to the 21st century.
      But France's Total and El Segundo, Calif.-based Unocal have =
brought not only Hollywood cartoons, a new schoolhouse, a medical =
clinic and a shrimp farm to this isolated outpost, a weathered =
collection of wooden buildings on stilts on the thin sliver of =
Myanmar that hugs Thailand.  They have also attracted the  =
international scorn of critics opposed to a  $1-billion energy =
project that could bring political legitimacy and, eventually, badly =
needed foreign currency to Myanmar's brutal military regime.          =
        Daminseik is one of 13 remote villages located near the path =
of a partially completed  Total-Unocal natural gas pipeline--which is =
 cutting a slash of controversy across 416 miles of ocean, sparsely =
populated jungle and  rugged mountains from the Andaman Sea to the  =
center of Thailand. The Yadana project (named after the Burmese word =
for treasure) is the focus of an escalating battle over whether =
economic engagement or isolation is the best way to tame the aging =
generals who seized control of this Southeast Asian country, =
previously known  as Burma, in a bloody coup in 1988.
=A0=A0=A0=A0=A0The outcome is important not just for Myanmar and the =
energy companies but also as a possible model for other companies =
seeking to develop new markets in regions where unstable, and often =
authoritarian, governments are the rule rather than the exception.
=A0=A0=A0=A0=A0Total, the French energy giant that is the project's =
lead operator, and Unocal are partners with Thailand's state-owned =
PTT Exploration and Production Public Co. and Myanmar's state-owned =
Myanma Oil and Gas Enterprise.
=A0=A0=A0=A0The members of the pipeline consortium argue, as =
natural-resource companies always have, that they must steer clear of =
politics to survive, because their success lies in following the =
wealth, regardless of who controls the land above it.=A0=A0=A0=A0=A0
       "What you're asking us to determine is the legitimacy of a =
government," said David Garcia, a Unocal spokesman. "That is not our =
job. That is the job of professional diplomats."
=A0=A0=A0=A0=A0Unocal is particularly eager to stay in the good =
graces of Asia's ruling elite because it recently announced plans to =
sell its West Coast oil reserves, refineries and "76"-brand service =
stations and bet its future on the  other side of the Pacific.
=A0=A0=A0=A0=A0Texaco Inc. also recently announced plans to =
participate in an international consortium developing a gas field off =
the coast of Myanmar.

Ethics Questions
=A0=A0=A0=A0=A0But many factors--a global shift from military to =
economic diplomacy, changing public attitudes about corporate ethics =
at home and abroad, increased environmentalism, and communications =
links that have spotlighted remote regions of the world--have =
combined to raise the ethics bar for U.S. companies operating =
=A0=A0=A0=A0=A0The Clinton administration is under pressure to take =
tougher action against Myanmar's ruling State Law and Order =
Restoration Council, known as SLORC, following this month's attack by =
rock-wielding hoodlums on a car carrying Nobel Peace Prize winner =
Aung San Suu Kyi.
=A0=A0=A0=A0=A0Last weekend, the U.S. State Department, issued a =
warning to Myanmar's rulers, who were  accused of orchestrating the =
attack, that they face severe repercussions if the popular opposition =
leader is harmed.
=A0=A0=A0=A0=A0Earlier this year, Congress passed a law directing the =
president to impose stiff penalties, including a ban on new U.S. =
investment in Myanmar, if the human rights situation here worsens. It =
is not clear whether Unocal would be affected because opinions differ =
as to whether "new investment" includes additional money for ongoing =
projects or simply new projects.
=A0=A0=A0=A0Unocal and its foreign partners are trying to make their =
case in the public debate. This month they took the unusual step of =
inviting a small group of foreign journalists to visit the heavily =
guarded Yadana project and "see for themselves" that accusations of =
forced relocation of villagers,  environmental degradation and =
conscripted labor are untrue.
=A0=A0=A0=A0=A0In the companies' view, the choice is clear. Economic =
development and political openness go hand in hand: The Yadana =
pipeline will not only provide profits for them but also help boost =
Myanmar's struggling economy.
=A0=A0=A0=A0=A0The Yadana pipeline, Myanmar's largest foreign =
investment project, will carry natural gas from a rich offshore field =
across the country and into Thailand, which is buying most of the =
energy. Nearly a quarter of the production, however, has been =
promised to energy-starved Myanmar for a fertilizer plant and power =
=A0=A0=A0=A0=A0"My company is a firm believer that constructive =
engagement is the more correct way to bring a country along to =
economic  growth and put it on the road to democracy," said Carol =
Scott, a Unocal spokeswoman.
=A0=A0=A0=A0=A0Decades of self-imposed isolation by Myanmar's =
socialist leaders left this resource-rich country out of the Asian =
economic miracle. Despite recent efforts to introduce capitalism to =
the masses, the country still feels as if the clock stopped in the =
=A0=A0=A0=A0=A0Compared with other bustling Asian cities, the streets =
of the capital, Yangon--formerly Rangoon--are not jammed with  =
foreign cars and motorbikes. One eye-pleasing benefit of delayed =
development is the preservation of the British colonial architecture, =
the lush greenery and the absence of skyscrapers, even in Yangon.
 =A0=A0=A0=A0=A0But after a few days in this repressive =
country--where the state-controlled New Light of Myanmar newspaper =
exhorts its readers to "crush all internal and external destructive =
elements as the common enemy"--it becomes clear that only a piece of =
this story can be found in the companies' statistics and a guided =

Ambitious Program
=A0=A0=A0=A0=A0Herve Madeo, the charismatic French engineer who is =
president of Total Myanmar Exploration and Production, has less than =
six months to finish laying 2,700 steel pipes across mountainous =
terrain. After that,  torrential rains will turn this remote =
countryside into an impenetrable mass of sodden underbrush and water.
=A0=A0=A0=A0=A0The price of failure, small or large, is costly. A =
one-day delay in construction costs more than $100,000. If the =
consortium doesn't have the pipeline up and running by 1998, it must =
pay a penalty fee to Thailand.
=A0=A0=A0=A0=A0But Madeo, who came here from Indonesia in 1992 to =
oversee the Yadana project, is used to that sort of pressure. But as =
social worker and community planner, he is in uncharted, and  =
uncomfortable, territory.
=A0=A0=A0=A0=A0In a poor country made even poorer by the government's =
decision to spend more money on arms and less on education, this =
businessman finds himself in charge of an ambitious development =
program that includes helping villagers find new ways of making money =
and improving their health.
=A0=A0=A0=A0=A0The Total-led consortium has built or renovated eight =
schools, established one shrimp farm and more than 100 pig, cattle, =
goat and poultry farms, installed electricity in four villages and =
hired 12 full-time doctors.
=A0=A0=A0=A0"We have changed from one era to the next," he said. "In =
the past, oil companies worked in a country, just doing business, and =
we did not care about the people. Now that is changing."
=A0=A0=A0=A0By blurring the lines between "us" and "them," the =
pipeline's foreign owners hope to build a sense of community and =
lessen the resentment and fear that accompany any kind of massive =
=A0=A0=A0=A0=A0"If we want to integrate this project into the =
community, this must be their pipeline," Madeo said.

Improving Lives
 =A0=A0=A0=A0=A0This effort has apparently begun to take root. U =
Hele, a 55-year-old fisherman from  Daminseik, said his life has =
improved since the foreign companies came to town.
=A0=A0=A0=A0"We have a new school, a new clinic and a doctor," he =
said under the watchful eyes of oil company and government officials. =
"Our village has improved."
=A0=A0=A0=A0But well-meaning efforts also have gone awry. When Total =
first set up its base camp here, Madeo instructed the kitchen to buy =
all  its products locally in an effort to support  the farmers. He =
stopped after discovering that  his company's large purchases of eggs =
and vegetables were driving up the local price of food astronomically.
=A0=A0=A0=A0Similar considerations had to be made in setting wages =
and determining compensation packages for people whose homes or =
farmland were in the pipeline path. Too much would lead  to inflation =
and exaggerate the gap between the haves and have-nots. Too little =
would fuel resentment and prompt charges of exploitation.
 =A0=A0=A0So far, the company has agreed to pay $1 million to =
reimburse villagers for 525 acres of land. When it hires locals to =
work on the project, it pays 200 kyat a day, or about $2 at the =
official exchange rate. "If we give too much, we will destabilize =
this area," Madeo said.
=A0=A0=A0=A0Total and its partners need the community's support, =
particularly in light of  the territorial conflicts and ethnic =
rivalries that have plagued this former British colony  before and =
after it gained its independence in 1948.

Support of Natives
=A0=A0=A0=A0=A0That message was brought home last March, when a group =
of armed men ambushed a pipeline convoy carrying fuel, employees and =
some SLORC soldiers who had been guarding the company's equipment. =
Five Total employees, all locals, were killed; 11 others were =
wounded. No one has been arrested in the attack, although it could =
have been unhappy villagers or any of several dozen insurgent groups.
=A0=A0=A0=A0=A0Total's base camp is now surrounded by a double =
perimeter fence topped with rolls of barbed wire. Unarmed company =
guards man the gate and patrol the facility.
=A0=A0=A0=A0=A0Total plots the whereabouts of all employees in the =
pipeline region on a computer, using regular radio contact to track  =
their movements. Travel outside the base camp  is done in armored =
vehicles and a helicopter.
=A0=A0=A0=A0=A0The Yadana project's greatest  vulnerability, and the =
area where its  operators face the most passionate criticism,  is its =
security pact with a military force that has been accused of =
widespread abuse by groups that include Human Rights Watch/Asia and =
the U.S. State Department.
 =A0=A0=A0=A0=A0Myanmar's troops are young, underpaid and untrained, =
a recipe for disaster in a remote region where there is little risk =
of getting caught.
=A0=A0=A0=A0=A0The Myanmar armed forces are responsible for securing =
the pipeline but have not done any work on the project or been paid =
"one cent" by the pipeline operators, according to Madeo. But company =
officials concede privately that they are not directly responsible =
for, and therefore cannot control, the soldiers.
=A0=A0=A0=A0=A0Madeo says that in the few instances where Total has =
learned of forced labor--such as when the military "borrowed" a =
villager's bullock cart--he has compensated the aggrieved.
=A0=A0=A0=A0=A0But the Total executive says he is certain the =
military has not committed widespread abuse in the pipeline =
region--including forced labor--since the contract was signed in 1992.
=A0=A0=A0=A0=A0"There are a lot of people out there--I  don't know =
why--who are telling lies," he  said. "It is a campaign of =

Allegations of Abuse
=A0=A0=A0=A0The picture is far different to the east in Kanchanaburi, =
Thailand, a place best known as the home of the infamous Bridge over =
the River Kwai. That bridge, now a major tourist attraction, was part =
of the "Death Railway to Burma" that claimed the lives of thousands =
of Allied POWs during its construction in World War II.
=A0=A0=A0=A0=A0It is here that Katharine Redford, 28, and Tyler =
Giannini, 26, have established one of the main conduits to the =
so-called campaign of disinformation.
=A0=A0=A0=A0=A0In 1995, these University of Virginia Law School =
graduates formed EarthRights International to provide legal help to =
indigenous people battling major development projects such as dams =
and pipelines.
    =A0=A0=A0Their first target was the Yadana pipeline, which is =
opposed by the National Coalition Government of the Union of Burma, =
the opposition government in exile, as well as the leaders of the =
Karen and Mon ethnic minorities.
=A0=A0=A0=A0=A0Until these American lawyers entered the scene, most =
of the reports of abuses in the pipeline area were anecdotal. =
Documenting the reports was difficult because strangers,  =
particularly foreigners, could not enter the  heavily guarded region =
without arousing suspicion.
=A0=A0=A0=A0=A0EarthRights' secret weapon is a young Karen man, Ka =
Hsaw Wa, a student activist who fled Yangon after Myanmar's military =
leaders launched its crackdown on the pro-democracy movement.
=A0=A0=A0=A0=A0Ka Hsaw Wa's six years in the jungle made him an ideal =
spy. The boyish-looking 26-year-old was able to locate seven or eight =
people in the pipeline region who were willing to secretly record =
testimony from the villagers and pass the tapes and photos across the =
border.=A0Redford has trained Ka Hsaw Wa and his  sources to gather =
evidence that will hold up in court, emphasizing the importance of =
recording the minutest details and judging credibility and motive.
=A0=A0=A0=A0=A0They acknowledge that they cannot prove some of the =
most egregious allegations, including the claim that the nearby =
Ye-Tavoy railroad line is being built to benefit the pipeline =
project. The U.S. State Department and others have reported =
"large-scale" use of forced labor on that railroad. Total and Unocal =
deny that the pipeline project has any connection to the railroad.
=A0=A0=A0=A0=A0But Ka Hsaw Wa and his crew have gathered compelling =
testimony from more than 100 villagers detailing numerous abuses by =
the troops guarding the pipeline. They include villagers allegedly =
being forced to clear land for the pipeline, provide supplies for the =
troops or serve as porters.
=A0=A0=A0=A0=A0One young girl, interviewed in a refugee camp in =
Thailand, told Ka Hsaw Wa that soldiers forced her and other =
villagers to clear land for the pipeline. She said two galawa, the =
Karen word for foreigner--presumably pipeline employees--watched them =
work for two days and then paid them for it.
=A0=A0=A0=A0=A0The following day, after the foreigners had left the =
area, the soldiers allegedly forced the villagers to work one more =
day for free.
 =A0=A0=A0=A0Three men from the village of Endayaza told Ka Hsaw Wa =
that a government soldier came to their homes earlier this year and =
demanded  a "voluntary donation" of 500 kyat per family. Fearful of =
retaliation, they paid up.
 =A0=A0=A0=A0=A0Much of this testimony has been included in lawsuits =
filed earlier this year in U.S. District Court in Los Angeles against =
the Total-Unocal consortium and the government of Myanmar, alleging =
widespread violations of international human rights treaties and U.S. =
law. The goal is to stop the Yadana project  and to gain some =
compensation for those who have allegedly lost their homes or their =

  =A0=A0=A0=A0=A0This is not simply anti-development politics at =
work, according to the founders of  EarthRights International, which =
receives funding from international financier George Soros and other =
environmental and human rights groups.
=A0=A0=A0=A0=A0They say they believe the Yadana project could =
succeed--bringing prosperity to its operators and Myanmar's =
people--if its partner  were a democratic government.
=A0=A0=A0=A0Until such a time, they echo the plea of opposition =
leader Suu Kyi--whose party won an election in 1990 but was not =
allowed to take  power--that foreign companies register their vote =
for democracy by withdrawing from  Myanmar.
=A0=A0=A0=A0=A0"As long as they [Total] deal with SLORC, there is no =
way they can do this better," Ka  Hsaw Wa said. "The company should =
know what kind of partner it has."

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