3/6) FIDH REPORT ON THE THAI/BURMES

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Subject: 3/6) FIDH REPORT ON THE THAI/BURMESE GAS PIPELINE

FIDH REPORT ON THAI/BURMESE GAS PIPELINE (3/6)
RECEIVED date: Wed, 27 Nov 1996 18:36:28 +0100 (GMT)
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B. Disregard for civil society and its legitimate representatives -
   TOTAL's interest in upholding the junta

TOTAL thus pretends to separate economics and politics, which appears
obviously illusory in the case of Burma, as is demonstrated by the
complaint filed on October 3, 1996 against TOTAL by Burmese plaintiffs.
Such an apparent indifference is all the more difficult to justify since
the democratic opposition and the ethnic groups  concerned by the project
have repeatedly and publicly denounced it:

Aung San Suu Kyi, leader of the NLD:
The investors should not set up here since all the money goes to an elite.
I want to mention the French company TOTAL which has become the strongest
supporter of the Burmese military system. This is not the time to invest
here" .

National Coalition Government of the Union of Burma (NCGUB), the government
in exile:
"The NCGUB has on numerous occasions expressed its concern about the UNOCAL
- TOTAL partnership with the Burmese military junta, known under the name
SLORC (...). In the current circumstances, the NCGUB affirms that the
economic sanctions are a vital instrument in forcing the SLORC to take a
seat at the negotiating table" .

National Council of the Union of Burma (NCUB), coalition of deputies and
representatives of various opposition groups:
"We hereafter would like to reiterate our call for the international
communites and transnational foreign companies to wait and hold their
investments in Burma until the democratic government is formed and allowed
to give protection, rights and benefits to all Burmese people" .

Karen National Union (KNU), political wing of the Karen rebel group:
"The KNU and the KNU's Mergui-Tavoy District wish to state clearly that
they are not opposed to the pipeline per se, but oppose any business
venture that strengthens the illegal SLORC's hold on power, and hence fuels
the civil war. With the establishment of conditions for peaceful resolution
of the country's problems, the KNU will welcome and cooperate fully with
any business activity that serves to improve the conditions of the Karen
people and that does not abuse the internationally accepted standards of
human rights nor have detrimental effects on the environment" .

The New Mon State Party, political wing of the Mon rebels:
"The New Mon State Party (...) has decided to take legal action against
UNOCAL (...) due to the environmental damage done in the SLORC's security
activities done to the Mon, Karen and Tavoyan areas for the construction of
the pipeline from off-shore gas fields" .

The pipeline project is therefore under way against the views of the
democratically elected representatives and the concerned indigenous
populations. It ought to be added here that the contract with TOTAL in all
probability includes a clause prohibiting any contact between the
corporation and opposition groups. An American congressman has indeed
confirmed that the project's partners are forbidden to communicate with the
inhabitants of the pipeline region who are opposed to the project: he
declared on April 21, 1995 that the foreign oil companies are not
authorised to establish contacts with armed ethnic groups or political
dissidents, as such contact would result in the annulment of the contract
and the seizure of the funds by the SLORC . This so-called gag clause is
actually common in the SLORC's contracts with foreign firms . And indeed,
TOTAL has declined to meet with any of the representatives of ethnic groups
who have approached them, while also systematically refusing to visit the
refugee camps sheltering persons forced to leave the pipeline region .
Consequently, it becomes somewhat difficult for TOTAL to claim to support
civil society by this project , and to pretend that it is not taking sides
between "the two political factions" . De facto, TOTAL has taken a side:
TOTAL's argument essentially consists in maintaining that the pipeline will
not generate net revenue for the Burmese government before the year 2001,
and one may not know "which will be the colours of the government then.
When one is engaged in this sort of investment, it is not necessarily the
party thought to benefit from the project that actually becomes the
beneficiary" . TOTAL thus insists that it has no interest in keeping the
junta in power - but the NCGUB, which consists of elected parliamentary
representatives, has clearly indicated on several occasions that, in the
name of the Burmese people, it does not recognise the contracts signed by
the SLORC as valid, and will not recognise the junta's contracts should the
civil government come to power: "These corporations are in business with an
illegal regime which does not represent anyone in Burma outside a small
number of military personnel. The regime has no popular mandate to exploit
or export the country's natural resources. That is why all the contracts
signed with this illegal regime will not be honored by the Burmese people"
; "the legality of the contract (...) is controversial. An elected civilian
government will review the contract when it assumes state power" . What is
clearly being stated is that TOTAL risks the annulment of the contract
should another government assume power.

Another risk tied to the possibility of the change in regime is: since
1991, the SLORC has established an economy founded on forced labour, which
represented 3.1% of the GNP in 1995, and 27% of the government expenditures
, an equivalent of 800,000 forced labourers per day. Since 1991, at least 4
million persons have been submitted to forced labour. It can be shown that
the massive and systematic institution of forced labour was put in place
for reasons which are political rather than economic:
        - more than half of government expenditure is committed to the
military although Burma is not involved in a war, while the social
expenditure has been reduced to almost nothing,
        - the international economic sanctions affecting Burma are attached
to the political decision not to transfer power to the democratically
elected civil government,
        - forced labour is used as means of repression and terror, most
notably in cities, and all population groups (including children, the
elderly and pregnant women) are subjected to it, particularly since 1991.
One can therefore legitimately contend, and this is the opinion of FIDH,
that the Burmese authorities' institution of forced labour falls within the
category of crimes against humanity such as defined by contemporary
international law, particularly based on the statute of the Nuremberg
Tribunal. It is likely that a post-SLORC Burma will witness a form of
justice against the crimes committed by the junta (Aung San Suu Kyi and
some other elected representatives have often suggested so themselves). If
this exercise of justice takes the form of an international tribunal, it is
to be expected that the victims will question the presence of foreign
investors, TOTAL among them, or even file suits against them, on the
grounds that the Yadana project investors have reaped de facto benefits
from the practice of forced labour which partakes in a more global system
applied throughout Burma.

It thus clearly appears that TOTAL cannot claim to support civil society to
any degree, and that, on the contrary, TOTAL, and its partner UNOCAL, have
every interest in maintaining the junta in power, as any change in the
government might jeopardise the validity of the contract and possibly
entail lawsuits. (And UNOCAL's very silence at the liberation of Aung San
Suu Kyi in July 1995 is in itself significant). TOTAL's argument,
meanwhile, according to which "TOTAL, an industrial corporation, prohibits
itself from any political objectives and considers it unnecessary to
immerse itself in the political life of a country by taking up the cause of
one side or the other"  is unsatisfactory in consideration of the fact that
ne of these "political factions" is made up of elected representatives who
nanimously condemn the project, and the other by an illegal regime - which
approves of it. It is therefore possible to refute on one hand the
assurances by TOTAL that its investment does not constitute a political
act, and on the other hand, the statement according to which the only
critics of the project are to be found among western pressure groups .

It=EDs worth noting that the French state, via the COFACE , has guaranteed
TOTAL's contract. Furthermore, at the time this report goes to print, it
appears that France is the only country blocking the withdrawal of the
scheme of generalised preferences for Burma at the European Commission.
Moreover, according to the SLORC's data, France was the leading investor in
Burma with over 1 billion USD between 1989 and 1995, equalling the total
investments from the United States, Japan and Singapore combined . It
remains the leading investor in 1996 .

 C. Economic Support

The act of moral and political support is only the first step in the
support lent to the SLORC by TOTAL. Indeed, the Yadana project, far from
benefitting civil society, directly replenishes the junta's wallets,
thereby providing an assistance which is not only political, but also
economic:
        - According to the spokesperson of the French group, TOTAL paid 15
million USD in 1992 for exclusive access to the technical data of the
potential field.
        - TOTAL ie reported to have paid around 50 million USD in bribes
("signing bonus") to the Burmese authorities to win the contract against
competition from other oil companies, such as Esso, Shell, Nissho Iwai, PTT
and UNOCAL .
        - According to the 1994 report to stockholders, UNOCAL has poured
close to 9 million USD into the SLORC's coffers.
        - The contract carries more than 1 billion USD, and it is estimated
than once it is put in place, the pipeline will provide the regime between
200 and 500 million USD annually and would represent the leading source of
foreign currency. Although the SLORC, via the MOGE, has assumed a 15%
interest in the pipeline, it does not participate directly in the venture
with hard currency due to its limited means.
        - In addition, even if the pipeline does not generate net revenue
for the Burmese government before 2001 or 2002, it appears that the SLORC
already reaps financial benefits from the pipeline in the form of loans on
the basis of the future revenues. For instance, the majority of recent arms
purchases (mainly from China) are believed to have been financed by medium-
and long-term loans : now, the source of medium- and long-term revenues for
the regime is none other than the pipeline.

More generally, more than half of the national budget is committed to
military expenditures , to which the economists attribute the cause of the
chronic budget deficit (11.5% of the GNP) and the high level of inflation
(37%). The imports of military equipment, which are on constant rise ,
further aggravate the country's foreign debt (70% of the GNP ) and are
partly the cause of arrears estimated at 1.5 billion USD by the World Bank,
which represents an 83% rise in the last three years . The strength of the
Burmese army has doubled between 1988 and 1992, now reaching 300,000
troops, and the foreign arms purchases abroad have passed the 2 billion USD
mark; in 1992, a new record was set on military spending, with imports
worth over 390 million USD . These weapons arrive mostly from China (with
whom Burma has signed a new purchase contract worth 400 million USD in
December 1994), from Portugal (mortars and ammunition), from Yugoslavia
(mounted sentry vessels), and from Poland (24 second-hand helicopters ,
with pilot training). In this regard, it is quite noteworthy that Lech
Walesa, when asked about these arms sales and the SLORC's resources, is
reported to have responded that "Poland was paid by TOTAL" , which has
allegedly been confirmed by SLORC officials. Asked about this at an
interview, the TOTAL representatives responded evasively . The Portuguese
weapons are also said to have been paid, at least indirectly, by TOTAL .
Considering that Burma is not involved in a war against another country,
these arms can only serve an internal oppression. The economic assistance
lent by TOTAL to the junta thus goes directly against the interests of
civil society, far from working for its benefit. Simon Billeness, a
researcher at the Franklin Research and Development Institute, an American
investment corporation, indicates in this regard that: "UNOCAL and TOTAL
are partners [of this oppressive regime], and can't escape culpability" .
The Wall Street Journal has also condemned the "petrodollars for SLORC" :
"We have argued for commerce and investments where it strengthens civil
societies vis-a-vis dictators. But these deals, by putting money directly
into SLORC's pocket, only make a richer prize out of political power" .

It is true that TOTAL is involved in projects of local development in the
13 villages located in the immediate vicinity of the pipeline: anti-malaria
programmes, development of pig and shrimp farms, recruitment of one doctor
per village, all for a total of 2 million USD per year . Still, considering
the global impact of the project on the population on a larger scale, the
militarisation which it entails and the human rights violations linked to
it, it can be said that these local reimbursements of sorts clearly do not
compensate for the negative effects of the pipeline on the civil population.
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D. Logistical and military support

Furthermore, it appears that the economic support by TOTAL is coupled with
an additional direct logistical and military collabouration with the
Burmese army, the Tatmadaw, particularly in the form of intelligence
sharing. The information from several reliable, independent and concurring
sources indeed shows a pattern of assistance by TOTAL to the Burmese army
in the zones of rebellion:

        - In March 1995, Col. Zaw Tun (chairman of the Tenasserim Division
LORC=EDs Tactical Operations Command) is reported to have surveyed the zone
of Ban-I-Taung  in a helicopter provided by TOTAL (and flown by a pilot
hired by TOTAL) during an offensive launched earlier against the Karens.
This is not an isolated case and TOTAL is reported to provide army
commanders regularly with flights and/or other means of transportation
during offensives against rebel groups near the site of the pipeline .

        - TOTAL is also reported to provide aerial or satellite images of
the combat zones to the commanders of the Tatmadaw.

        - Following the attack of March 8, 1995 (see infra, p.22), TOTAL
has recruited "security consultants" (at least ten) in charge of protecting
all or parts of the site . According to information from reliable sources,
the company hired for security is PHL Consultants, directed by Philippe
Legorgus . PHL Consultants is one of the most important firms on the French
security market. The TOTAL sub-contractor in charge of laying the pipeline,
a branch of Spie-Batignolles, has itself allegedly hired another security
company, ABAC, created in the middle of August 1996, for this very occasion
(as the laying of the pipeline should begin around the middle of October
1996). ABAC is reportedly directed by two ex-officials of the DGSE , an
officer and a sub-officer. The recruitment conditions of ABAC employees
link them to PHL Consultants, thus ensuring that the ABAC employees are
approved by PHL. Before hiring ABAC, the Spie group is reported to have
requested the help of another, older security company, OGS, run by G.
Cheyron du Pavillon and an ex-legionnaire, Jean-Claude Fran=C1ois. For the
eeds of the site, OGS allegedly called, at least in part, upon the
services of ex-legionnaires . According to our information, this group did
not prove satisfactory, which explains the change of company.

According to the same information, the security consultants participate in
the security maintenance of a large portion of the site, if not its
entirety, and not only of the Ohnbinkwin camp. Some security consultants
have reportedly also been hired to provide security for the off-shore
segment of the pipeline. The consultants appear to collabourate closely
with the commanders of the SLORC troops in charge of security, most notably
through intelligence sharing.

III - A JUDICIAL VOID

TOTAL and UNOCAL have on several occasions vowed to conform to the
legislation in force in Burma, particularly in the field of human rights
field, of labour rights, of environmental rights. Now, the current Burmese
institutions are such that either the legislation is inexistant or
contradictory, or it is not enforced due to the absence of or defects in
the independence of all judicial authority. It is therefore hardly a risky
commitment for the multinational companies to pledge to respect an
inexistant or inoperative legislation.

A. The coup d'etat and the absence of rule of law

On September 18, 1988, following a wave of popular protests, the army
reassumed the direct control of the country , installing the State Law and
Order Restoration Council, the SLORC , composed of 19 members, suspending
the constitution of 1974 and dissolving all state institutions . Martial
law was declared with the goal of "maintaining the public order and
preserving the national security".

On May 15, 1992, General Khin Nyunt, the First Secretary of the SLORC and
the chief of military intelligence, publicly explained: "martial law is
neither more nor less the will of the general who commands the army; in
fact, martial law signifies the total absence of law" . Ten days later,
General Saw Maung, then leader of the SLORC, confirmed: "Martial law means
the will of the ruler. He can do anything he wishes to do" . As it
proclaims itself in the order 1/90, section 19, the SLORC is a military
government and exercises executive, legislative and judicial powers. During
the two years following the coup d'etat, the SLORC passed a series of
decrees further restraining the liberties which had already been curtailed
by the BSPP: banning of all public gatherings of more than 5 people,
imposition of a curfew, prohibition of all public criticism of the
military, submission of local administration under military control... The
practice of the SLORC has remained loyal to this interpretation of law and
to the arbitrariness it entails :

=85 The SLORC has refused to transfer power to the democratically elected
representatives after the 1990 elections.

=85 Since the two constitutions of 1947 and 1974 have been completely
abridged, there exists no legal authority to reestablish the power of the
civil government elected in 1990. The UN has characterised the Burmese law
as "martial law in the form of SLORC orders, which is applied arbitrarily
and with prejudice, especially against the ethnic minorities" .

=85 The regime is in the process of developing a new constitution, while
trampling on its own commitments, as this was the task of the
representatives elected in 1990 - now, only 99 of the 485 elected
representatives have finally been authorised to participate in the
elaboration of the constitution. The rest of the 700 delegates were
handpicked by the SLORC .

=85 Although the two constitutions have been abridged, a number of older
provisions continue to be used by the SLORC as the judicial foundation for
measures of repression, notably the 1908 Village Act, authorising the use
of forced labour, the 1908 Unlawful Association Act, the 1947 Public Order
Preservation Act, the 1950 Emergency Measures Act, the 1962 Printers and
Publishers Registration Law, the 1975 State Protection Law and the 1975 Law
Safeguarding the State from Destructive Elements.

=85 Aung San Suu Kyi was detained under the 1975 Law Safeguarding the State
from Destructive Elements, amended in 1991 with the goal of raising the
length of administrative detention to five years for persons "endangering
the peace of the majority of citizens, or the security or the sovereignty
of the state". This law has allowed the state to place Aung San Suu Kyi
under house arrest without trial nor charge until her release in July 1995.

=85 The human rights violations in Burma are massive and of a rarely
encountered extent: summary executions, disappearances, torture, arbitrary
detentions, forced labour, forced relocation, absence of freedom of
expression, absence of judicial independence, absence of public and fair
trials, invasion of privacy, racial and religious discrimination, human
rights violations in internal conflicts...

B. Burma's obligations under international law

Burma has ratified:
        -       The Slavery Convention and the Protocol amending the
                Slavery Convention
        -       The ILO Convention n=8329 Concerning Forced or Compulsory
                Labour
        -       The ILO Convention n=8387 on Freedom of Association and

Protection of the Right to Organise
        -       The Convention on the Prevention and Punishment of the
                Crime of Genocide
        -       The Convention on the Rights of the Child
        -       The Geneva Convention relative to the Protection of
                Civilian Persons in Time of War (though without accessing
                to the additional protocols of 1977, which are applicable
                to internal armed conflicts).

It has signed, but not ratified:
        -       The Convention on the Political Rights of Women
        -       The Convention for the Suppression of the Traffic in
                Persons and of the Exploitation of the Prostitution of others.

Burma is also subjected to the principles of international customary law
regarding human rights, as enshrined in:
        -       The Universal Declaration of Human Rights
        -       The International Covenant on Civil and Political Rights
        -       The Forced Labour Convention n=83105 notably prohibiting th=
                forced labour for the purposes of development

Burma has been condemned every year since 1964 by the International Labour
Organisation for the systematic violations of the Forced Labour Convention
no.29.
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