The colour of money

Regardless of the many reports documenting and condemning the violent impacts of their investments on local communities, some of the world's best-known energy companies are gearing up to partner with the military regime and profit from Burma's rich reserves of oil and gas.

The New York-based Human Rights Watch reported that, "27 companies based in 13 countries have investments in Burma's oil and gas fields. Thirteen of those companies are wholly or partially owned by foreign governments."

The US State Department identifies Thailand, China, India, Singapore, Hong Kong, Japan, South Korea and Malaysia as Burma's major trade partners. Economist Sean Turnell, of Australia's Macquarie University, said that Burma has emerged as a major supplier of natural gas in the energy-hunger region and that investments are concentrated mainly in the oil and gas and hydroelectricity industries.

"Unfortunately, big business is the winner. These investments were
supposed to provide alternative sources of income and be a way out of
poverty, but the poorest of the poor will benefit least." Tom Kramer, TNI

"Rising gas prices and increasing demand have caused the value of Burma's exports to soar, driving a projected balance of payments surplus for this fiscal year of around US$2.5 billion [74.9 billion baht]. Burma's international reserves will rise to $6.1 billion-worth by the end of the year."

Mr Turnell, in a recent report, "Dissecting the Data: Burma's Macroeconomy at the Cusp of the 2010 'Elections"', exposed how the junta uses sleight of hand to siphon off most of the foreign exchange earnings for its own use. "Burma's US dollar gas earnings are recorded in the government's published accounts at the local currency's 'official rate' exchange rate of around six kyat to the dollar. This rate overvalues the currency by nearly 200 times its market value."

Construction of the Shwe gas pipeline within China.

According to the regime's political opponents, this foreign investment provides a crucial source of support to the regime, allowing it to ignore the demands of the international community and the sanctions imposed by the US, European Union and Australia. Analysts say sanctions failed because regional powerhouses such as China, Thailand, India, Singapore, Japan, South Korea and Malaysia ignored the human rights abuses and corruption and continued to invest in Burma.

It's only a business

A recent report by EarthRights International (ERI), "Energy Insecurity", calculates that, "from 1998 through the end of 2009, the Yadana Pipeline has generated about $9.031 billion, of which $1.679 billion has been used to pay development and operating costs."

Matthew Smith, a senior consultant with EarthRights International, estimated that the Yadana Pipeline - moving natural gas from Burma to Thailand - has generated $4.59 billion in revenue for the military regime over the last decade.

"The pipeline is operated by Total, Chevron, PTTEP and the Myanmar Oil and Gas Enterprise," he said.

EarthRights International documents, litigates and advocates on behalf of communities that have suffered human rights and environmental abuses. In a landmark court case, settled in 2005, ERI helped 15 Burmese villagers take on the US oil giant Unocal (since absorbed by Chevron) over human rights abuses during the construction of the Yandana Pipeline. The company agreed to a substantial out-of-court settlement.
ERI reports that last year, pipeline security forces were still committing human rights abuses against local villagers, including extra-judicial killings.

Mr Smith said the vast number of reports from international humanitarian groups detailing the junta's appalling human rights record does not deter regional investors.

"India, China and Thailand have shown a complete disregard for human rights impacts and the implications of their investments in Burma's oil and gas sectors. The international companies currently profiting the most out of natural gas and oil in Burma are Total [France], Petronus [Malaysia], Chevron [US], Nippon [Japan] and PTTEP [Thailand].
"South Korea's Daewoo is also set to profit from its investment in the Shwe gas project."

Daewoo International is the current operator of the contentious Shwe Gas field and holds a controlling 51% stake in the project. Adding another twist to who is investing in Burma, Bloomberg reported that Posco, "the world's third-biggest steelmaker, agreed to buy control of Daewoo International for $2.8 billion to expand its sales network and gain raw materials".

Mr Smith explained that the Shwe gas project would significantly increase the military regime's profits. "The money is going to benefit one of the world's most corrupt regimes," he said.

Mr Turnell's report on Burma's economic mismanagement tallies with Mr Smith's assessment of the regime.
"In 2009, Transparency International listed Burma as the third most corrupt country in the world - only Somalia and Afghanistan are regarded as worse," the report stated.
Pipeline construction within Burma. The Shwe Gas Movement, an alliance of NGOs and activists, said an estimated 13,200 soldiers are positioned along the route.

A spokesman for Daewoo cited in a Human Rights Watch report bluntly stated that business comes first.
"Politics is politics. Economics is economics," the spokesman said. "Many countries, including the US, France, India, China and Russia, are either under production or under exploration in Myanmar. These are long-term plans, and they can't be impacted because of the protests."

China's pipedream$

A regional newsletter, The Shwe Gas Bulletin, reports: "The Shwe Gas project will boost the military regime's coffers with more [than] $29 billion over 30 years after production begins in 2013."
Jockai, editor of the bulletin, said a gas pipeline will stretch from the Bay of Bengal to Nanning in southwest China. A parallel oil pipeline will shadow the gas pipeline into China and there are fears the construction will bring only grief to the communities along its route.
"The gas pipeline is estimated to be 2,800km long. Both pipelines will cut through many communities in Arakan state, Shan state and central Burma. The impact on hundreds of communities and thousands of people will be devastating."

The China National Petroleum Corporation (CNPC) has heavily invested in both the oil and gas projects, and is the majority partner in the oil pipeline. CNPC is state-owned, and China's largest oil and gas company.

The Shwe Gas Movement, an alliance of NGOs and activists opposed to the regime's exploitation of the country's gas and oil reserves, said in their report, "Corridors of Power", that the risks to both people and the environment is great.
"An estimated 13,200 soldiers are currently positioned along the pipeline route. Past experience has shown that pipeline construction and maintenance in Burma involves forced labour, forced relocation, land confiscation, and a host of abuses by soldiers deployed to the project area," the report said.
The Shwe Gas Movement report points out that Burma's natural gas reserves are ranked "10th in the world, yet its per capita electricity consumption is less than 5% of that of its major exporters, Thailand and China".
Jockai said it is criminal that the regime is selling the country's oil and gas, while most of Burma is without a reliable source of electricity - most people have to rely on oil lamps and candles for their lighting.

A Human Rights Watch media statement warned that China's unregulated investments in energy projects in Burma should be a global concern.
"China's massive petroleum project in Burma, as well as large hydroelectric power projects that Chinese companies also are involved with, raise serious concerns about the impact of such projects on the Burmese population, including the risk of forced displacement."

The Bangkok Post reported earlier this month that Thailand remains Burma's number one investor with $10.3 billion, followed by China at $6.4 billion and Hong Kong at $5.9 billion. This year, the regime has approved South Korean investments worth $2.4 billion.
On his return from his recent one-day trip to meet with Burma's leaders, Prime Minister Abhisit Vejjajiva announced agreements had been reached on a number of infrastructure initiatives that would increase trade between the two countries. These include a developing a deep-sea port at Dawai (aka Tavoy) on Burma's Andaman Sea and a super highway linking it to the Eastern seaboard in Chon Buri. A company listed on the Stock Exchange of Thailand - Italian Thai Development (ITD) - is a major contractor.
"The first-phase contract that ITD has signed for, the 10-year project, is worth an estimated $8 billion. The entire project could be worth $58 billion or more."

Selling the farm

A drug policy briefing paper was released last week by the Amsterdam-based Transnational Institute (TNI), an independent international research and policy advocacy institute that produces briefing papers and reports on issues related to democracy and equality. The briefing paper focused on the impact China's huge agricultural investments in Burma will have on local communities and farmers. The TNI paper said China is motivated to promote agricultural investment in Burma as a means to eradicate opium production and drug trafficking on its borders.

"The huge increase in Chinese agricultural concessions in Burma and Laos is driven by China's opium crop substitution programme, offering subsidies and tax waivers for Chinese companies."
TNI's Tom Kramer said these investments are shaping the future of Burma and the impacts will be felt by millions of people. "Unfortunately, big business is the winner. These investments were supposed to provide alternative sources of income and be a way out of poverty, but the poorest of the poor will benefit least."

The TNI briefing paper noted the agricultural investments include large-scale rubber, sugarcane, tea and corn plantations. Mr Kramer said that China encourages agricultural investment diversity, but the results are almost exclusively mono-plantations, usually rubber.
"The increase in agricultural investments in northern Burma has impacted on local food security. People are losing access to income, access to land to grow other crops and to graze animals," he said. "Large mono-plantations have resulted in huge tracts of deforested land, degraded landscapes, land confiscation and even more landless farmers."

Mr Kramer said both the Burmese regime and the opposition groups need to talk more about developing sustainable agricultural policies and not just focus on politics.
"Policies need to be developed, discussed and reflect the community views. It is in the long-term interest of all to develop sustainable policies that benefit the majority of the people and not just the well-connected few."

Poor neighbours

Debbie Stothard from the Alternative Asean Network on Burma (Altsean-Burma) said the regime is not intent on being a good neighbour or even a reliable investment partner.
"Their investments come with a hidden cost," she said. "For every dollar these regional countries spend with the regime, they are repaid by having to support refugees, fight drug traffickers, deport illegal migrants and monitor and contain infectious disease scares on their borders."
Altsean-Burma is a network of organisations and individuals based in Asean member states working to support human rights and democracy in Burma. Ms Stothard said people in rural areas are suffering from abuses and mismanagement.
"A Shan farmer told us his rice crop has fallen by 70% in two years. The Burmese army took land and dammed the river upstream to irrigate army plantations. It's hard for people to survive from their farms when their land and water are constantly stolen."
Ms Stothard said international investors are deluded if they think their projects in Burma are secure. "Investing in Burma is shaky like everything else - there's no rule of law, there's no stability. Investments without regulations are contributing to the massive poverty and abuse of the Burmese people."

ERI's Mr Smith said some companies may have carried out their own impact assessments, but no company has done a human rights assessment of the impacts on villages or communities.
"If ever a country needed one it is Burma. The military regime has said it is looking to develop regulations and they are looking to other Asian countries for a model, yet the irony is that these same countries are investing in Burma because there are no regulations. In Burma government environmental impact statements are non-existent.
"It pretty much guarantees to foreign companies that there will be no obstruction to their investments or projects."

The Dirty list

A database, "The Dirty List", compiled by the International Trade Union Confederation (ITUC), the Burma UK campaign and the Global Union Federation, highlights around 400 companies doing business with the military regime. The ITUC on its website said the regime is one of the worst trade union and human rights abusers in the world.
"Companies investing in Burma are not doing so because of an altruistic wish to help the people of Burma. They are there to make a profit, and are attracted by salaries of less than 22 baht a day, a compliant workforce where unions are banned, limited health and safety laws and a minimum working age of 13."
The Dirty List includes international timber, gems, tourism, communications, mining, oil and gas exploration, insurance, banking and brewing companies.

Alcatel-Lucent, the French telecom company, which is on the Dirty List, says on its website that with the help of Chinese government money it signed up to install infrastructure for Burma's fledgling communications network. Alcatel also defended itself against accusations that it had "provided or installed any dedicated solution to Myanmar for monitoring voice calls or filtering the internet".

Mr Turnell said the recent fire sale of Burma's state assets by the regime is one of this year's most intriguing and worrying topics concerning their monetary policies.
"Nearly 300 enterprises and properties have been sold off, including ports, rice mills, cigarettes and textile factories, cinemas, hotels, an airline, fish and agricultural processing plants, ruby, jade and gold mines as well as many government buildings."
Mr Turnell said the buyers of the state assets were mostly individuals and conglomerates with connections to the regime, all of them spared any of the formalities of having to "take part in any form of public tendering or any other accountable or transparent process".

Mr Turnell described Burma's privatisation as a "textbook example of institutional expropriation by Burma's existing political and economic elites".
"Irrespective of the dubious election result early this month, the military regime and their cronies have been caught red-handed taking money, property and state assets rightfully belonging to future generations of Burmese," he said.