Burma: Foreign companies finance brutal regime

The Shwe gas consortium is composed of the South Korean company
Daewoo International, state-owned companies from India and South
Korea, and the Myanmar Oil and Gas Enterprise. Some of the foreign
partners also have separate deals with the Burmese government entity for
other concessions.

On September 24, for example, India’s state-controlled Oil and Natural
Gas Co (ONGC), whose subsidiary ONGC Videsh is a partner in the
Shwe consortium, signed a deal with Myanmar Oil and Gas Enterprise to
explore for gas in three more offshore blocks. Under the deal, Oil and
Natural Gas Co pledged to invest US$150 million through ONGC
Videsh.

India’s Office of the President holds nearly 75 percent of the shares in
Oil and Natural Gas Co. India’s minister for oil, Murli Deora, traveled to
the Burmese capital last week to sign the agreement as thousands of
protesters in Burma took to the streets to call for political freedom, an
end to the SPDC’s abuses, and economic improvements.

India, like China and Russia – which are also major investors in Burma’s
natural gas sector – has provided political and military support to the
SPDC. India and China are in competition to buy the Shwe gas. In
August, a top Burmese energy official publicly confirmed that China was
strongly favored to buy the gas, but indicated that a sales agreement was
not yet final.

Chinese firms are also actively seeking to build oil and gas pipelines in
Burma. One proposed pipeline would transport gas from the offshore
Shwe project to China. A second pipeline would carry Middle Eastern oil
across Burma into China, bypassing the busy shipping lanes of the Straits
of Malacca. These proposals to build overland pipelines across Burma
have raised serious human rights concerns, in light of past experience.
Major controversies arose in the 1990s over construction of pipelines and
associated infrastructure to transport Yadana-Yetagun gas. UNOCAL
and Total were sued in the US and France, respectively, by Burmese
villagers who accused them of complicity in atrocities by the Burmese
army during operations to remove villagers from areas slated for
development and to facilitate pipeline construction. The companies
ultimately settled the lawsuits.

Two Chinese companies that have shown strong interest in the proposed
new Burma-China pipeline projects are Sinopec and China National
Petroleum Corporation (CNPC). Both are Chinese state-owned oil
companies and are involved in gas exploration in Burma as well. They
also are official “partners” (major sponsors) of the 2008 Olympics in
Beijing and are under increased scrutiny for the human-rights impact of
their investments in Sudan and Burma.

India and China have been reluctant to criticize the recent crackdown.
Russia joined China in blocking UN Security Council action on Burma.

In addition to foreign investors (both state-owned and private), the
companies doing business with Burma include banks that arrange
financial transactions and companies that import products from Burma.
For example, timber exports to China have been substantial. The SPDC
also draws significant revenue from sales of gems, notably rubies and
jade. These gems are polished in third countries and then find their way
to retail stores in Europe and the US, where sanctions permit imports of
Burmese-origin goods that are processed in third countries.

The US has imposed new financial sanctions, intended to target overseas
accounts of Burmese generals, and some European leaders have called
for additional, targeted sanctions if the SPDC fails to halt its violent
repression of dissent.

“The junta’s largest trading partners should insist that Burma’s rulers
stop stuffing their own pockets and instead use these immense revenues
to improve the lives of ordinary Burmese,” said Ganesan.

For more of Human Rights Watch’s work on Burma, please visit:
http://www.hrw.org/doc?t=asia&c=burma

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