Known to human rights groups as "Asia's new killing fields,"
Burma is a country violently divided. The military regime which
controls the country of 42 million is currently waging battles
against more than a dozen ethnic insurgent groups and a student-led
democracy movement. The regime, considered illegitimate by most
countries in the world, faces international condemnation and pressure
from the democratically elected government-in-exile to relinquish
power.
The military regime, which calls itself the State Law and Order
Restoration Council (SLORC), is relying on the exploitation of
Burma's natural resources to finance the military battles it is
waging against its own people. In 1988, the regime "began
to sell Burma's natural resources like fast food," according
to the Burma Action Group, a British human rights organization.
A main item on this menu is the sale of Burma's oil reserves.
With the critical assistance of multinational oil corporations,
the SLORC plans to significantly expand oil production in Burma
over the next several years to generate foreign currency to purchase
weapons. Between 70 and 90 percent of the profits from oil and
gas development will go directly to the military regime. The Burma
Rights Movement for Action, an opposition group based in Bangkok,
Thailand, estimates oil exploration contracts have accounted for
65 percent of the foreign investment in Burma since 1988.
Michele Bohana, the director of the Washington, D.C.-based Institute
for Asian Democracy, asserts that "these foreign investments
directly support the illegitimate military junta of Burma. The
government is bankrupt. They have to get foreign exchange to survive."
Further, the SLORC is counting on the large presence of multinational
corporations such as Amoco , Unocal , Texaco , Royal Dutch Shell
, Petro-Canada and Idemitsu to gain international legitimacy and
to fend off proposed international economic sanctions.
From crackdown to build-up
In 1988, the SLORC took control of Burma from long-standing leader
General Ne Win, and changed the name of the country to Myanmar.
However, rumors suggest that Ne Win continues to exert significant
control over the SLORC and its policy decisions. During its coup
and subsequent crackdown on pro-democracy demonstrators, SLORC
troops gunned down an estimated 4,000 students and other protestors.
Following the coup, foreign donors suspended $500 million per
year in aid to Burma. The nearly bankrupt regime, which began
to run out of money to finance its army, promised to hold free
elections in 1990.
In the 1990 elections, the National League for Democracy, led
by 1991 Nobel Peace Prize winner Aung San Suu Kyi, won an overwhelming
81 percent of the popular vote. The SLORC received 2 percent of
the parliamentary seats in the election. However, the SLORC annulled
the election and imprisoned the victors, including Aung San Suu
Kyi, who remains under house arrest in Rangoon.
A small group of donors, including the International Development
Association (IDA) of the World Bank , the Asian Development Bank
(ADB), the United Nations Development Program and the Japanese
government, reactivated their aid to SLORC following the election,
arguing along with multinational business leaders that investment
in Burma will speed development and eventually promote political
liberalization.
The SLORC, in the meantime, continues to rule Burma by repressive
military control. Military expenditures currently account for
approximately 60 percent of the government budget. Arms purchases
in 1991 amounted to approximately $1.4 billion. The military has
grown by over 50 percent since the SLORC took power, from 190,000
to approximately 300,000 troops.
Most governments around the world, as well as human rights groups
such as Amnesty International and Asia Watch, condemn the regime
and the repressive human rights conditions that are regularly
reported within the country. The Lawyers Committee for Human Rights
reports that Burma's citizens are "subject to unlawful arrest,
detention without trial and torture for exercising their rights
to expression and association," and have recently been "forced
to serve as porters for the Burmese army, where they are used
as human mine detectors." A number of countries have proposed
a United Nations embargo, as well as other economic sanctions
to force the SLORC to honor basic human rights accords and the
results of the 1990 elections.
However, while leaders of many countries such as the United States
and Canada officially oppose the actions of the SLORC, they continue
to allow multinational corporations based in their countries to
operate and invest in Burma, buoying the unstable and financially
strapped regime. Multinational oil companies based in the United
States, Canada, England, Japan and Australia have directly invested
over $400 million in Burma since 1989. And critics say that the
SLORC is using its greatly expanded foreign currency reserves
to modernize and expand its army rather than to benefit the people.
"Despite the influx of foreign money, the lives [sic] of
the average citizen of Burma has not improved," contends
the Burma Rights Movement for Action. "Instead, it has steadily
gotten worse."
Natural resource auction
The SLORC leadership has apparently decided that exploiting natural
resources is the best means of developing the country. Current
SLORC practices regarding timber, minerals, fishing rights and
oil concessions indicate sales of these resources are the primary
strategy for raising funds.
When the SLORC took control of Burma, the country was estimated
to have had 80 percent of the world's remaining teak forests.
During the last three years, however, the SLORC has sold expansive
concessions of teak and other hardwoods to Thai timber companies
for clear-cutting. In 1990, the United Nations estimated that
1,235,000 acres of tree cover were disappearing every year in
Burma due to clear-cutting practices. The World Watch Institute
estimates forest-cutting in Burma at over 2 million acres per
year.
Burma has large mineral reserves of tin, tungsten, copper, lead
and zinc, as well as deposits of precious stones such as jade,
rubies and sapphires. SLORC has been selling the rights to mine
these gems throughout Burma. Insight Indochina reported in 1991
that the SLORC had set a goal of producing 49,200 ounces of gold
in 1992. This is a 1,130 percent increase over 1990's production
of 4,000 ounces.
One of Burma's most famous resources is opium, which is converted
into heroin for sale on the international market. A number of
groups, including Green November 32, an environmental and human
rights group based in Bangkok, Thailand, have alleged that SLORC
leaders are involved in the illicit heroin trade, with some funds
going directly to weapons purchases. David Todd, a Canadian journalist,
reported in the Ottawa Citizen that "Western intelligence
agencies say [an arms deal with China was] paid for in part with
the proceeds from heroin and opium trafficking in which Myanmar
military authorities are deeply involved."
The SLORC, however, is focusing its efforts on oil and gas development.
Because of a lack of foreign exchange, Burma has had a policy
restricting the import of oil, thus creating a serious shortage
throughout the country. Oil development is thus meant to alleviate
the energy shortages throughout the country, as well as raise
foreign currency.
Multinational oil companies move in
All oil and gas development in Burma is controlled by the military-run
Myanmar Oil & Gas Enterprise (MOGE). Despite financial and
technical support from Japan over the last decade, Burma has experienced
a steady decline in oil and gas output, from a level of 30,000
barrels per day in the late 1970s to around 12,000 barrels per
day in 1991.
In 1988, due to worsening economic conditions and the precipitous
decline in oil production, the SLORC moved to end its isolationist
policies and attract foreign oil investment. As part of this move,
the government reversed a 26-year policy banning foreign participation
in onshore oil exploration and development, and signed contracts
with nine foreign oil companies.
The nine multinational oil companies that signed the first contracts
with the SLORC in 1989 included Amoco (United States), Unocal
(United States), Idemitsu (Japan), Royal Dutch Shell (Netherlands/United
Kingdom), Yukong Oil (South Korea), Broken Hill Petroleum (Australia),
Petro Canada (Canada), Croft Exploration (United Kingdom) and
Kirkland Resources (United Kingdom). These firms were reported
to have paid between $5 million and $8 million each in signing
bonuses to the Burmese regime.
Since 1989, a number of other companies have also signed contracts
with the SLORC. These include Premier Oil (United Kingdom), Nippon
Oil Exploration (Japan), ELF (France), Petronas (Malaysia), and
most recently International Petroleum Corp. (Canada), Apache Oil
(United States), Tyndall International (United States) and Texaco
(United States).
By the summer of 1991, according to the Far Eastern Economic Review,
oil companies spent an estimated US$415 million on exploitation
efforts, hoping to cash in on the SLORC-granted oil concessions.
Bohana explains, "the oil companies haven't lifted a drop
of oil yet, but they have thrown hundreds of millions of dollars
into the hands of the SLORC."
Amoco's contract to explore the Block B concession, a 33,000 square
kilometer tract located in the Upper Chinwin basin in northern
Burma, included an initial payment of $5 million to the SLORC
as a signing bonus. Amoco has worked very hard to foster good
relations with the SLORC. The chair of Amoco, H. Laurence Fuller,
traveled to Burma personally in 1990 to meet with the SLORC head,
General Saw Maung. Jim Fair of Amoco says that the company drilled
one well in 1992, and "did not find hydrocarbons in commercial
quantities." According to Fair, Amoco is currently "evaluating
whether [the company] will continue in Burma, period." Amoco
continues to keep an office open in Rangoon, the capital city.
Unocal has been working in the Block F concession, and has entered
a joint venture agreement to explore the Block E concession, both
of which are located in central Burma. Unocal is reported to have
agreed to invest $29 million over the three years of its contract.
However, in response to high exploration costs and three failed
oil wells, Russ Small of Unocal says that the company is "planning
to pull out of Myanmar at the end of 1992," when its contract
expires. "Three years, three wells, you're out," Small
says. Unocal has not officially announced this decision.
Texaco, the newest entry into Burma, recently bought into three
different concessions, one onshore and two offshore, without any
public announcement. Onshore, Texaco purchased a 42 percent stake
in Block I, the concession held by Croft Exploration and Clyde
Petroleum. Offshore, Texaco acquired a 50 percent interest from
Premier Oil in two blocks covering 7.9 million acres in the Gulf
of Mataban. After uncovering Texaco's quiet move into Burma, Green
November 32, released a statement, charging, "Texaco does
not want its financial involvement with - and therefore tacit
support of - the brutal SLORC military regime to be known, as
it may make it a target for boycott action."
In 1989, Petro-Canada signed a $22 million oil exploration contract
for the Block E concession with the SLORC, including an initial
$6 million signing payment. Petro- Canada is the 80 percent state-owned
oil company of Canada. While the Canadian government has repeatedly
condemned the actions of the SLORC, the government claims it cannot
influence the decisions of its own oil company.
A number of human rights and environmental groups have called
on the Canadian government to pull Petro-Canada out of Burma.
The Canadian environmental group Friends of the Rainforest has
organized a boycott of Petro-Canada because, it charges, "up
to 90 percent of any oil and gas production goes to the military
regime." Friends of the Rainforest also argues that "oil
investment dollars are helping turn mainland Asia's last significant
forested region into a wasteland. Petro-Canada must share responsibility,
along with [the company's] principal shareholder, the Government
of Canada."
Royal Dutch Shell is exploring the Block G concession, which includes
over 19,000 square kilometers in central Burma. Earlier this year,
Shell became the first multinational to discover recoverable quantities
of oil or gas. The company found large natural gas reserves at
Ahpyauk, 80 kilometers north of Rangoon. Shell and SLORC plan
to bring the well into production as quickly as possible at a
rate of 20 million cubic feet per day. A Bangkok newspaper quoted
Pe Kyi, engineering director for the MOGE, as saying that SLORC
was "very happy" about Shell's find, and promised many
more wells would be drilled in the near future.
Yukong Oil, Broken Hill Proprietary (BHP) and Kirkland have all
been unsuccessful in their oil exploration efforts. Yukong spent
more than $20 million without completing its first spud. BHP spudded
a dry well in 1991. And Kirkland was reported to be considering
pulling out of Burma at the end of 1991, after two years of unsuccessful
exploration in a war-torn area close to the Thai border.
Natural gas exploration has increased onshore as well as offshore.
A subsidiary of the Thai national oil company, PTT Exploration
and Production (PTTEP), has proposed a $2 to $3 billion project
to explore for natural gas in Burma's Gulf of Mataban. The project
would pump the estimated 3.6 trillion cubic feet of natural gas
reserves in Mataban through a 500-kilometer undersea pipeline
from Burma to Kanchanaburi province in Thailand. This pipeline
would require extensive military protection, as it would pass
through areas currently held by Karen and Mon rebels.
The French oil giant Total signed an agreement with the MOGE in
July 1992 to develop natural gas in two offshore blocks in the
Gulf of Mataban covering an area of 26,000 square kilometers.
Total plans to work with PTTEP to develop the concessions and
feed the natural gas into the proposed pipeline. MOGE chose Total
over two other western multinationals, Royal Dutch Shell and Unocal,
in negotiations which lasted over a year.
Most of the actual work in Burma is not performed by these oil
giants, but is instead farmed out to smaller multinational oil
service and support firms. These smaller companies are performing
geophysical testing, cutting roads, building helipads, drilling
test wells and providing other support for the controlling oil
firms. Some of the largest of these firms include Parker Drilling
Co. (United States), Compagnie General de Geophysique (France),
Geophysical Company Limited (France/United States), which is owned
by Schlumberger, Halliburton Geophysical Services (United States),
Grant Norpac (United States), Heavilift (Australia), Columbia
(United States), PAE Singapore (United States) and Seismograph
Services Ltd. (United Kingdom) which is owned by Raytheon, a U.S.
defense contractor.
Oil and the environment
Burma is a country with particularly rough terrain, and almost
no infrastructure to support oil exploration and production. Most
of the areas where oil exploration is proceeding remain inaccessible
by roads. Heavy equipment is shipped up rivers during the monsoon
season, and then used after the monsoons have passed. Many activities
require the use of helicopters to by-pass the roads and rivers.
Forests must thus be cleared to open areas for helipads, base
camps, testing sites and roads.
Testing involves the use of gravity and seismic lines. Companies
clear one-to-four- meter-wide paths one kilometer apart, in a
series of grid lines, and lay 10-pound dynamite charges every
100 to 150 meters. Cables with seismic meters are placed along
the grid lines and when the charges are detonated, readings are
taken and analyzed.
The companies are cutting roads by hand or with bulldozers through
virgin tropical forests in order to lay the grid lines. Green
November 32 alleges Compagnie General de Geophysique has been
cutting roads "with the use of forced labor in the Kirkland
block," which is in a militarily contested area in southern
Burma.
Environmental impacts of the oil exploration include the significant
deforestation necessary to access areas for seismic testing, and
for the construction of helipads. Once roads are constructed into
these areas, deforestation follows. Green November 32 claims that
"SLORC officials have arranged the granting of timber concessions
to favorites in areas of virgin forest newly opened up by the
oil companies." Constructing roads also allows the military
to move soldiers, heavy artillery and supplies into opened areas,
thus securing their hold over the indigenous populations.
Other environmental impacts of the exploration include large-scale
erosion around areas which are cleared, exploded with dynamite
and drilled. Flash floods occur in deforested areas during the
rainy season. Pollution of streams and rivers with mud and silt
from the exploration process is common. Disruption of wildlife
around the areas being explored is unavoidable due to the explosions,
chainsaws and helicopters.
Amoco and Unocal officials interviewed for this article claim
their operations have no detrimental environmental impacts. Amoco's
Fair says the company has "assessed environmental impacts
all along the way," and all of their drill sites "return
to their natural state very quickly." Bohana of the Institute
for Asian Democracy disagrees, however, saying, "Teak and
hardwood cutting is currently more environmentally destructive,
but long-term environmental destruction will result from oil development."
Oil and human rights
Human rights groups argue that oil development has direct impacts
on the people of Burma. A Green November 32 statement notes, "recent
reports from inside Burma indicate that human rights violations
are being perpetrated by the SLORC army in association with the
oil companies' planned and actual activities. Genocidal offensives
are being carried out as part of the junta's efforts to clear
potential oil bearing areas of their indigenous inhabitants. ...
Tens of thousands of Burmese people are being forced to labor
on roads for less than subsistence wages for the benefit of the
oil multinationals and the junta."
Because a number of battles are being waged on different fronts
throughout Burma, there is also some conjecture about the areas
which the SLORC is fighting hardest to control. Green November
32 reports, "SLORC troops have been particularly active in
oil concession areas, and have launched heavy offensives in areas
where concessions have been offered but not sold, such as the
Kachin and Arakan States. There have been very serious human rights
abuses perpetrated on local populations in association with these
attempts to control the potentially oil-bearing zones."
Sanctimony vs. sanctions
Pro-democracy groups complain that Western governments are unwilling
to back up their rhetorical condemnation of the military regime
in Burma with economic sanctions. These groups argue that ending
oil exploration and development in Burma by multinational corporations
may be the most effective means of forcing the regime to acknowledge
the result of the 1990 elections, and to restore human rights
and democracy to Burma.
But as a Green November 32 statement explains, "When a multinational
oil company with the financial and political influence of Texaco
invests in a country like Burma, it makes it substantially more
difficult toeffectively pressure a government led by someone like
George Bush ... into applying the sanctions that have been repeatedly
and loudly called for. Obviously sanctions would not be good for
those U.S. oil companies - Texaco, Amoco, Unocal, Tyndall, and
Apache - that have invested so many millions of dollars in their
relationship with the SLORC regime."
Multinational oil development remains key to the SLORC's expansion
of the military, and control over the people of Burma. Without
foreign exchange from oil investments, the regime would be much
more dependent on foreign aid, which is often tied to political
reforms.
Until some form of international trade or investment sanctions
are passed by the United Nations or individual countries such
as the United States, however, multinational oil companies will
continue to fuel Burma's military machine.
Transnational
Corporations & the Third World
Oil
watch