Friday, September 25, 2009

The pipeline to riches

The authors of a report on Burma's natural gas exports claim the proceeds have been pocketed by the ruling generals
Writer: Matthew Smith and Naing Htoo
Published: 13/09/2009 at 12:00 AM
Newspaper section: Spectrum

The international community may finally have the information it needs to effectively prod the intransigent Burmese military regime to change its repressive ways - the specific offshore location of the regime's illicit multi-billion dollar natural gas revenues has been revealed.

According to our 110-page report released last week by the environmental and human rights organisation EarthRights International (ERI), entitled "Total Impact: The Human Rights, Environmental, and Financial Impacts of Total and Chevron's Yadana Natural Gas Project in Military-Ruled Burma (Myanmar)", the oil giants Total and Chevron have generated US$4.83 billion (164 billion baht) in profits for the ruling State Peace and Development Council (SPDC) since the companies' Yadana gas pipeline to Thailand started commercial production in 2000.
Comprising a significant part of the regime's income, this is money from the people's natural resources and before last Thursday its location was a mystery, like much else at the upper echelons of Burma's reclusive junta.
Citing "confidential and reliable" sources, ERI named the Overseas Chinese Banking Corporation (OCBC) and DBS Group (DBS) as the offshore repositories of these ill-gotten gains. OCBC is Singapore's longest established local bank and according to ERI holds the majority of the revenue, while DBS is Singapore's largest bank in terms of assets.
For many villagers living along Total and Chevron's Yadana pipeline, misappropriated revenues from the Yadana project are the least of their worries. Basic human rights are being violated and survival is tough.
In the 1990s, the French oil giant Total and its corporate partners moved into the remote and ethnically diverse Tenasserim region in southern Burma to construct a pipeline to export Burmese natural gas to Thailand, which today generates electricity for the Bangkok metropolitan area.
For the SPDC and Total, the Yadana project, meaning treasure in Burmese, was a certain cash cow once they took the gas to the Thai market, where the Petroleum Authority of Thailand (PTT) was a willing buyer.
Armed with characteristic brutality and the strength of multinational oil giants behind them, several Burmese light infantry battalions moved into the dense jungle area with abandon, marking the newly-defined "pipeline corridor" with blood.
These "Total battalions," as they were known locally, systematically carved a foothold over the 64.4-kilometre stretch of rugged terrain between the Andaman Sea and the Thai border. Ethnic Karen, Mon and Tavoyan villagers were brutalised in the process, all in the name of securing the pipeline "treasure."
Villagers were forced to build project-related infrastructure and carry heavy loads for the army. There was rape, torture, killings.
In a particularly awful instance, one ethnic mother was beaten unconscious by a pipeline security soldier. "When I woke up," she said, "I saw my baby in the fire. She couldn't even cry. Her body was so burned, and all black." Tragically, the child died shortly thereafter.
Sadly, evidence shows that human rights abuses are still a terrible reality of project security in Burma's extractive industries, despite Total and Chevron's claims otherwise.
Based on more than two years of research, "Total Impact" includes new photographs and hundreds of interviews with local villagers in the pipeline area that reveal widespread and systematic forced labour, extrajudicial killings and torture, and violations of the rights to property and freedom of movement, all committed by Total and Chevron's pipeline security battalions.
Villagers who have not become refugees in Thailand are commonly forced to work on roads, pipeline-security barracks and sentry huts, as well as on army plantations that exist on land that traditionally belonged to the villagers. "The work we have to do for the military is still happening," said one villager in the pipeline village Michaunglaung.
EarthRights International documented several recent killings in the pipeline area, as well as restrictions on villagers' movements. "We cannot move freely around," said one villager late last year in Kaleinaung village, explaining restrictions imposed on her village by Yadana project security battalions.
Other villagers describe beatings, and one villager in Kanbauk, the location of Total's local headquarters, explained how he had to "work on the Yadana pipeline" and how he was forced to stand guard and on alert for 24 consecutive hours without pay. If he fell asleep, he said he would ''surely be beaten'' by project security soldiers.
Food security is also a problem, directly and indirectly impacted by pipeline-related human rights abuses. ''We can no longer do farming around our village because we don't have existing land [anymore],'' said a villager in Eindayaza, whose land was confiscated by Total and Chevron's security forces. Other villagers were forced to prepare land for rice cultivation for pipeline battalions, or to simply hand over rice without payment.
Despite landmark lawsuits in the US and in European courts in which the companies were sued by Burmese villagers for complicity in forced labour, murder, rape and crimes against humanity in connection to the Yadana pipeline, Total has never publicly acknowledged its true relationship with the Burmese army, and in some cases the company has categorically denied any connection whatso-ever.

Local villagers and soldiers tell a different story. A defector from pipeline security battalion 273, known locally as a ''Total Battalion'', started his ''career'' in the Burmese army at age 13 and claims that when he ''first arrived to the camp the commander told us that we are here to protect the foreigners who are working on this project''.
Likewise, another recently defected soldier explained how he was forced into the Burmese army at age 15 and was later required as a soldier to provide security for the Yadana project. This child soldier routinely faced severe treatment from his superiors during his training. ''Recruits'' like him who attempted to flee the training programme were often tortured, he said. ''The punishment included burning their feet with fire so they couldn't run again.''
Upon graduating from army training, sufficiently hardened, this soldier was sent to the Yadana pipeline corridor to provide security for the companies and the project. ''Relating to pipeline security,'' he said, ''we often had to patrol [the pipeline] and sometimes take the sentry guard [over the pipeline].''
Evidently, human rights abuses were not discouraged. This soldier and numerous others interviewed in the last two years describe how they often procured forced labour from ethnic Mon and Karen villagers and routinely violated a range of other human rights, all in the name of pipeline security.

Despite the controversy surrounding the Yadana project, Total has never come clean. The company's CEO Christophe de Margerie told readers of Newsweek last month that he was proud of the Yadana project and that critics of his company's operations in Burma can ''go to hell''.
In some cases, the company has taken a more subtle tack and simply lied about its impacts.
For example, the company has for years claimed that the International Labour Organisation (ILO) certified that it had successfully eradicated forced labour along the pipeline.
This brazen claim was on Total's website, in its communications with investors and in other company public relations.
The problem is that not only is the statement inaccurate _ it is also untrue. The ILO never claimed that Total eradicated forced labour in its project area.
A former ILO representative in Burma disavowed the claim and said Total's statement was ''not right to say'', adding that ''we've never had information that suggested [forced labour is] eradicated in the pipeline corridor''. Likewise, a current representative of the ILO in Burma, responding directly to the statement, told EarthRights International that ''no area of the country can claim to be completely forced labour-free''.
Another central component to Total's whitewashing machine are five favourable assessments of the company's impacts in Burma, published by a US-based organisation called CDA Collaborative Learning Projects.
Based in Cambridge, Massachusetts, and purporting to ''help corporate managers better understand the impacts of corporate activities on the contexts in which they work'', CDA was commissioned by Total in 2002 to assess the companies' impacts in Burma. The organisation has since visited Burma five times, interviewed local villagers and published its assessments, with Total making sure they subsequently reached investors, policymakers and other oil companies.
These recipients relied on these assessments as credible in making investment and policy decisions, which is troubling given the overwhelming evidence demonstrating the assessments are ''flawed in methodology, factually inaccurate and incomplete'', according to ERI.

The assessments are the subject of a second report released last week by ERI, entitled ''Getting it Wrong: Flawed 'Corporate Social Responsibility' and Misrepresentations Surrounding Total and Chevron's Yadana Gas Pipeline in Military-Ruled Burma (Myanmar)''.
Based on seven years of research and hundreds of interviews with local villagers, this 84-page report details the myriad problems with CDA's work for Total in Burma.
Since 2002, the organisation visited Total's as-defined ''pipeline villages'' on five separate occasions with escorts from the oil company, at times using interpreters provided by Total. Regarded as experts on Total's impacts in Burma, CDA's methodology provided for a grand total of 20 days in the Yadana pipeline corridor over a period of seven years.
Problems stem from CDA interviewing villagers in groups and in the presence of Total staff and military intelligence, which alone contravenes international best practice as well as every effective strategy for safely manoeuvering through the repression, smoke and mirrors that are common under Burma's dictatorship.
After interviewing villagers, CDA uncritically noted that they ''did not hear anybody mention that the impact of Total's presence was negative''.
According to ERI, local villagers were warned by Yadana project security about communicating the truth to CDA and other foreign visitors, under the threat of persecution.
''We did not say everything we knew clearly to these foreigners because we had been warned by the soldiers in advance,'' said one villager shortly after a CDA visit to the pipeline corridor.

Another villager claimed that if he spoke to ''the foreigners'' he ''would then be questioned by the military, who were wearing plain villager clothes''.
Assuming good will, EarthRights International offered to collaborate with CDA and to help the organisation interview local villagers in a private, safe and secure environment. CDA never availed themselves of the offer.
In the policy world, the irony is palpable. While the United States and France have consistently enacted ''tough'' economic policies toward the Burmese military regime, Total of France and Chevron of the US have generated the multi-billion dollar revenues through the Yadana project that effectively undermine the policies of their home governments, ensuring their ineffectiveness. Policymakers have grappled with this for years.
The pipeline is constructed, the gas is flowing. The end result is a regime that appears to be as intransigent and violent as ever.
Pseudo-pragmatists would dismiss the recent history of the West's economic policies toward Burma as moral posturing, as easy or convenient policies that give governments the appearance of concern without having to dirty their proverbial hands. Human rights activists and policymakers toiling in the legislative furnace may argue it is those very dismissals that appear to be convenient, accommodating and off-mark.
While economic policies aimed at bringing the regime to the table have unarguably failed, so has engagement, as US Secretary of State Hillary Clinton famously noted in Jakarta earlier this year.
Whatever the case, there is a need for new, fresh ideas. In the least, there is no defensible argument that what the people of Burma need now are more oil and gas projects.
While reasonable minds will still differ about the best ways to promote development in Burma, perhaps everyone can agree that misappropriating multi-billion dollar natural gas revenues generated from the peoples' natural heritage, and at the cost of their basic human rights, is unacceptable, particularly when the country suffers beneath the lowest social spending in Asia.
Even on the off chance that high-level corruption of this nature is not a multilateral unifier, the issue may be moot.
Singapore may very well do the right thing.

Singapore law provides clear prohibitions against the misappropriation of funds by public servants, and banks are required to document and report suspicious transactions to combat money laundering.

Perhaps multi-billion dollar transactions out of one of the world's poorest nations would meet the elements of suspicion?
Matthew F Smith and Naing Htoo work with the Burma Project at EarthRights International (ERI). They are principal authors of Total Impact: The Human Rights, Environmental, and Financial Impacts of Total and Chevron's Yadana Natural Gas Project in Military-Ruled Burma (Myanmar) and Getting it Wrong: Flawed ''Corporate Social Responsibility'' and Misrepresentations Surrounding Total and Chevron's Yadana Gas Pipeline in Military-Ruled Burma (Myanmar). They can be reached at and


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