Ethical Performance
inside intelligence for responsible business


gas rush brings more firms into Burma orbit

January 2006

The lure of gas reserves in Burma has led to a growth in the number of natural resources companies operating there over the past year, despite the reputational and financial risks of doing business with the country’s military government.

Nineteen companies ended their involvement in Burma in the past 12 months, but 26 have begun working in the country, according to a ‘dirty list’ released last month by Burma Campaign UK. It says one of the main reasons for the overall rise is ‘an influx of new investment in Burma’s gas sector’.

Among companies to have entered Burma in the period are ChevronTexaco (as a result of its takeover of Unocal), Daewoo, and the Indian company Gail. They are among 23 oil and gas companies on the 101-strong list, making the sector the second biggest after tourism, which accounts for 37 companies operating tours to Burma or promoting tourism there in printed guides.

The reputational and financial risks associated with working in the country were demonstrated shortly before Christmas when French-owned Total, the fourth largest oil company in the world, announced that it would be paying €5.2million (£3.5m) in an out-of-court settlement reached with eight Burmese villages suing the company over allegations that it was complicit in the use of forced labour during building of the Yadana gas pipeline in Burma. Total will channel the money to the plaintiffs through the French Sherpa Association, a human rights organization that represented them in legal proceedings initiated in 2002.

While Total upheld its ‘categorical denial’ of any involvement in forced labour, which it acknowledged exists in Burma, its statement on the settlement referred to the €5.2m as ‘compensation’. Much of the money will be spent on housing, health, educational and other ‘humanitarian measures’ in Burma. Last year, another oil and gas company, Unocal, agreed an out-of-court settlement over allegations that it used forced labour in Burma, although the amount in that case was not disclosed. Both settlements draw a line under the lawsuits in question, but William Bourdon, a lawyer and president of the French Sherpa Association, said he expected further lawsuits against others operating in the country.

Yvette Mahon, director of the Burma Campaign UK, added that the Total settlement would have no impact on the worldwide campaign to get Total to withdraw from Burma. ‘If they think this agreement will help take the pressure off, they are making a big mistake,’ she said. More than 150 MPs recently signed an early day motion in the UK parliament demanding that Total withdraw completely from Burma.

Insurance giant Aon, Austrian Airlines, Eastravel, and Frommers guides are among companies to have ended their involvement in Burma in the past year. The latest company to have done so is the outdoor and marine clothing specialist Gill Clothing. Siemens and Swiss Re are among companies that have moved into Burma, according to the list.

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