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Home  Total War in Burma part II |
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Total War in Burma: Part II
Brian Guerin
In 2004, in attempting to stop the Unocal lawsuit, lawyers acting for the Bush Administration argued that Unocal (now Chevron-Texaco), should not be liable for aiding and abetting widespread human rights abuses in Burma on behalf of the Burmese regime while engaged on construction of the Yadana pipeline project in Southern Burma. [1] “The Administration has previously argued in court that those who aid and abet terrorists can be sued. But to protect narrow business interests, they now say those who aid and abet crimes against humanity should be immune,” said Richard Herz of EarthRights International, co-counsel for the plaintiffs. The plaintiffs in John Doe I v. Unocal Corp. are villagers who lived near the pipeline. Some were forced to work in extremely harsh conditions on pipeline infrastructure by the military, Unocal’s project partner. The remainder suffered other egregious abuses including rape, murder and torture at the hands of soldiers providing “security” for the project.
The Bush Administration wanted the case dismissed, arguing that aiding and abetting liability “could deter” companies from “economic engagement” with oppressive regimes. Plaintiffs’ counsel Jennie Green of the Center for Constitutional Rights (CCR) stated, “This Administration would allow U.S. corporations to get away with murder, rape and other torture. Unocal knew these abuses would occur when it partnered with one of the world’s most repressive dictatorships, and Unocal’s actions furthered the abuses. Decisions by U.S. courts are clear that when corporations participate in human rights abuses, U.S. courts can hold them accountable.” The suit was filed under the Alien Tort Claims Act, which allows victims of human rights abuses to sue those responsible. Recently, the Bush Administration argued to the U.S. Supreme Court in Sosa v. Alvarez-Machain that no human rights claims should be actionable under the statute. In July, the Supreme Court rejected the Administration’s position and upheld the law. [2]
The settlement was one of Unocal’s last major actions as an independent oil company. Pending approval by its shareholders and US authorities, Unocal will be acquired by ChevronTexaco. Coincidentally, some of the same groups that litigated Doe v. Unocal, including ERI, were also co-counsel in Bowoto v. ChevronTexaco, a lawsuit alleging complicity in human rights violations by the oil giant in Nigeria. The lawsuit against ChevronTexaco bore many parallels to the Doe v. Unocal case. [3]
Meanwhile, exploitation of Burma’s huge oil and gas resources is rapidly intensifying. Premier Oil, a British oil company, was the first company to sign an exploration deal with Burma's military regime for the exploitation of the Yetagun offshore gas field in May 1990. Its partners were Petronas (Malaysia's state oil company), Nippon of Japan, the Petroleum Authority of Thailand (PTT) and the Myanmar Oil and Gas Enterprise (MOGE) which is a subsidiary wholly owned by the Burmese military junta. A $650 million capital investment was required to finance the project and the gas started flowing in May 2000. It is estimated the field will continue to produce gas for at least 20 years. UK energy consultants, Wood Mackenzie, have estimated that Burma's earnings from Premier's Yetagun field will be roughly $823 million through to 2025. [4]
The development of the Yetagun gas project in Burma was Premier Oil's largest asset by value. Even though Premier's share was only 27%, they were the main operator of the project before they were forced to pull out due to a combination of public lobbying, shareholder disquiet and threat of legal action over atrocities committed in the Yetagun pipeline area. Premier's two largest shareholders, Petronas and Amerada Hess (now Hess Corporation), a New York based oil company, will strip the company of its Burmese and Indonesian assets respectively. [5], [6], [7], [8] The Yetagun pipeline travels down the same route cleared for the Yadana pipeline. [9]
Halliburton was also involved with the Yetagun project. In 1998, Dresser Industries was purchased by Halliburton. In the same year, a subsidiary of Dresser called Bredero-Price (now Bredero Shaw) manufactured the coating for the Yetagun pipeline. Bredero Shaw offers a range of pipe coating systems for protecting pipelines above ground, below ground and offshore. It is the world's largest international applicator of pipeline coatings for the oil and gas industry. [10] In a new development, both China and India have signed agreements with the Burmese military regime, indicating their willingness to buy gas from the proposed Shwe (“Gold”) gas project in western Burma, with Thailand as ever expressing interest. Both China and India are now rapidly intensifying arms shipments to Burma. [11] The Norwegian drilling company Frontier Drilling has joined the project, joining the list of ill-reputed companies operating in Burma. The company has carried out drilling operations for the Korean firm Daewoo in the Shwe gas field, Frontier Drilling has its headquarters in Bergen, Norway, but is today a wholly owned subsidiary of FDR-Holdings, which is registered in the Cayman Islands. The company is owned by several US fund managers. FDR-Holdings is consequently controlled by private American funds. These funds include Carlyle/Riverstone – that is, The Carlyle Group of Washington, D.C. (Carlyle), and Riverstone Holdings LLC of New York, N.Y. – and the New York-based finance and investment bank Credit Suisse First Boston (CSFB). [12]
The Carlyle Group, headquartered in Washington D.C., was established in 1987 as a "private global investment firm that originates, structures and acts as lead equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, and growth capital financings."
Hoover's Online described the Carlyle Group as a military-industrial complex. The company takes part in management-led buyouts (MBOs), acquires minority stakes, and provides other investment capital for companies. Carlyle's directorship list indicates extensive political connections to the U.S. political elite and to the Bush family in particular. Reagan-era Secretary of the Treasury James Baker serves as a senior counselor, and Richard G. Darman, former director of the Office of Management and Budget under George Herbert Walker Bush, is a managing director. Former President George Bush (I) has served with Carlyle. The company has more than $13 billion in assets under management and has invested in such names as: United Defense Industries, of Crusader artillery and Bradley Fighting Vehicle fame; Dr Pepper/Seven Up Bottling Group; and MedPointe Inc.[4] Carlyle owns about 90% of Voight Aircraft Industries, Inc. Although the majority of the firm's money is in North America, it is also pushing more intensely overseas, launching funds aimed at Asia, Europe, Latin America, and Russia. [13] In August 2000, Daewoo signed a contract with Myanmar Oil and Gas Enterprise (MOGE). Daewoo is the chief operator, but also included are Korean Gas Corporation (KOGAS) and two Indian companies: Gas Authority of India (GAIL) and ONGC Videsh. In 2004 Daewoo found enormous amounts of gas in the Shwe field, at that time valued at approximately US$19 to 20 billion. New finds were made in 2005. If built, the Shwe project would be Burma’s largest gas development project so far. [14]
Natural gas deposits were found earlier at Block A-1 (Shwe field and the Shwephyu field) and Block A-3 (Mya field) in the same offshore area in January 2004 and April 2005, respectively; these being explored by another consortium of oil companies led by Daewoo International Corporation with a 60% stake. Other companies include South Korea Gas Corporation (10%), ONGC Videsh Ltd of India (20%) and GAIL (10%). The Shwe field holds a gas reserve of 4 to 6 trillion cubic feet (TCF) or 113.2 to 170 billion cubic meters (BCM), while the Shwephyu 5 TCF and Mya 2 TCF with the three fields estimated to yield up to 14 TCF of gas, experts said.
Burma is planning to sell gas produced from these three gas fields to neighboring countries such as India and China through pipelines.
According to earlier official report, another Indian company, Essar Oil Ltd, has also reached a contract with Myanmar to undertake gas exploration activities at Block A-2 in the same Rakhine offshore area and Block-L in the coastal region of Sittway. Myanmar has an abundance of natural gas resources in the offshore areas. With three main large offshore oil and gas fields and 19 onshore ones, Myanmar has proven recoverable reserves of 18.012 TCF or 510 BCM out of 89.722 TCF or 2.54 TCM's estimated reserve of offshore and onshore gas, experts have stated. [15]
South Korea, a long-standing US client state, is also actively involved in this development. This comes at the same time that Daewoo International and the Government of South Korea face growing international criticism over its huge investment in the Shwe project, which involves the supply of advanced weapons to the Burmese military. Daewoo is at present under investigation in South Korea for this illegal export to the Burmese regime. [16], [17], [18], [19]
Naturally, these armaments deals will generate less revenue than the ongoing Shwe project, which has the potential to make Daewoo over US$ 89 million annually and the SLORC between US$ 12-17 billion over twenty years. [20], [21]
Recent years have seen foreign oil companies increase engagement in oil and gas exploration in Myanmar. Thailand's PTTEP, for example, has covered a number of blocks such as M-3, M-4, M-7, M-9 and M-11 under contracts, while another consortium made up of Chinese and Singaporean companies is also engaged in oil and gas exploration in some onshore and offshore areas.
Myanmar has abundance of natural gas resources in the offshore areas. With three main large offshore oil and gas fields and 19 onshore ones, Myanmar has a proven recoverable reserve of 18.012 TCF (510 BCM) out of 89.722 TCF (2.54 TCM) estimated reserve of offshore and onshore gas, experts said. The country is also estimated to have 3.2 billion barrels of recoverable crude oil reserve, official statistics indicate. [22] The Myanmar figures also show that in the fiscal year 2005-06 ending in March, the country produced 7.962 million barrels of crude oil and 11.45 BCM of gas. Gas exports during the year reached 9.138 BCM, earning over 1 billion US dollars.
More statistics reveal that since Myanmar opened to foreign investment in late 1988, investment in the oil and gas sector reached $2.635 billion as of March 2007, dominating the country's foreign investment sectorally.
Foreign oil companies engaged in the Burmese oil and gas sector include those from Australia, Britain, Canada, China, Indonesia, India, South Korea, Malaysia, Russia and Thailand. [23]
© The Tara Foundation, 2007
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