US corporations in Burma

Nobel laureate Aung San Suu Kyi, the leader of Burma's democratic movement, has said that businesses which trade under SLORC are "taking sides against democracy".

Although various Western governments have issued public statements in support of the democratic movement in Burma, governments like Canada and the United States have still not banned trade with SLORC-controlled Burma. President Clinton's cabinet is rumored to be sharply divided on the question of trade sanctions on Burma. A number of US-based multinationals have had extensive dealings with SLORC, including oil companies such as Texaco and Unocal, and the food conglomerate PepsiCo.

Despite saying in October 1993 that it had no plans to leave Burma, Chicago-based Amoco recently announced their decision to pull out, thanks in part to a boycott organized by the Chicago Coalition for a Democratic Burma. Pressure also came from the Coalition for Corporate Withdrawal from Burma, a Boston-based group which urges socially responsible investors to pressure companies in which they own stock to pull out of Burma. Reports of SLORC using slave labor to provide Amoco and other oil companies with basic infrastructure had put Amoco in an awkward, defensive position, denying any knowledge of the matter and calling the reports unconfirmed. Facing a growing boycott, stock-holder pressure and a public-relations disaster, Amoco quickly reversed its position on Burma.

Public pressure also played a role in PetroCanada's 1992 pull-out from Burma, soon after Amnesty International released a detailed report of human rights abuses in Burma, including the use of forced labor. Former PetroCan executive John Ralston Saul called SLORC "thugs, criminals and drug dealers." Other companies were convinced not to do business in Burma largely by the facts: Levi-Strauss withdrew its textile business, noting that "it is not possible to do business in [Burma] without directly supporting the military government and its pervasive violations of human rights."

Companies like PepsiCo and Texaco which still do business in Burma today claim that their presence helps the cause of democracy; PepsiCo has repeatedly called itself "a positive influence". The practice of doing business with dictatorships is sometimes euphemistically called "constructive engagement" - one does business with a brutal regime like SLORC in the hope of reforming it through the influence of trade. The argument is that not only is isolating a dictatorship counter-productive, but that trade will lead to liberalization both through the improved economic conditions trade can bring and through exposure to the liberal democratic values and 'good example' of multinational corporations. But SLORC economist Set Maung's statement that "authoritarian rule is beneficial to economic development" casts doubt on the applicability of this approach to Burma.

Regardless of the general validity of the above argument, it is difficult to see how sales of Western military equipment would lead to reduced repression, and hence if companies like Litton Systems Canada and Pratt & Whitney can meaningfully invoke "constructive engagement" to justify their links to SLORC. The former US Ambassador to Burma, Burton Levin rejects the idea that "constructive engagement" is applicable to SLORC at all, despite being generally supportive of the idea: "Foreign investment in most countries acts as a catalyst to promote change, but the [Burmese] regime is so single-minded that whatever money they obtain from foreign sources, they pour straight into the army while the rest of the country is collapsing."

PepsiCo is the highest-profile multinational doing business in Burma which can be readily pressured by Canadian consumers, and so has become the focus of Canadian activists. OPIRG-Carleton's Burma-Tibet Group has been especially active in promoting the PepsiCo boycott called by the All Burma Students' Democratic Front (ABSDF). The ABSDF notes that SLORC boasts of PepsiCo's presence to legitimize itselfand add credibility to its promise to improve Burma's dismal economy. Burmese activists also claim PepsiCo only hires people with close connections to senior SLORC officials, and note that its Burmese partner, Thein Tun, has intimate connections to SLORC. Recently, PepsiCo used its "positive influence" to sponsor a SLORC-run trade fair in Rangoon but has still not issued a public statement condemning SLORC's repression.

A small victory - Pepsico is out of Burma

Transnational Corporations & the Third World