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RIGHTS: Asian Firms Urged to Rethink “Golden” Pipeline

Eli Clifton

WASHINGTON, Mar 26 2007 (IPS) - Construction of natural gas pipelines in Burma could involve the use of slave labour, illegal land confiscation, forced displacement and violence against villagers, says Human Rights Watch (HRW).

HRW’s concern is based on previous experience from natural gas and oil projects in Burma.

“The Burmese army is notorious for using violence and coercion to secure areas slated for major investment projects and commonly demands forced labour to build associated infrastructure,” said Arvind Ganesan, director of Human Rights Watch’s business and human rights programme, in a statement.

“The construction of more gas pipelines across Burma is likely to line the pockets of the country’s leaders while causing suffering for thousands of people.”

Investment in such projects has largely come from Asia as a result of comprehensive U.S. and limited EU sanctions which prohibit or limit foreign investment. Sanctions have been imposed to bring pressure on investment projects in Burma that fuel human rights abuses.

“The U.S. and EU sanctions are about the only thing that slowed down the huge growth of the military regime,” Jeremy Woodrum, campaigns director at the U.S. Campaign for Burma, told IPS. “The problem now is that it’s no longer western investment over there that’s developing these natural gas reserves for production.”

The pipelines would be part of the Shwe (golden) gas fields being developed by a consortium of South Korean and Indian firms in partnership with the State Peace and Development Council (SPDC), which are located off the coast of Arakan State in western Burma.

According to a recent report by the U.N. special rapporteur on Burma, forced labour is widespread and land seizures are commonplace in areas of Burma that are subject to major development projects.

The International Labour Organisation has previously threatened to bring charges at the Hague-based International Court of Justice against the Burmese military for its use of slave labour.

There is “virtually no fiscal transparency and accountability” in projects financed by the SPDC, warns the statement from HRW.

The Shwe gas project is led by Daewoo International, a South Korean company, 14 of whose top executives went on trial this month facing charges that they built an illegal arms factory in central Burma.

The members of the consortium represent several state-controlled companies in India and South Korea: ONGC Videsh Ltd, which is owned by India’s Oil and Natural Gas Co., the Gas Authority of India Ltd; and Korea Gas Corporation from South Korea.

This consortium, along with Myanmar Oil and Gas Enterprise, a Burmese government entity for the Shwe gas fields, has a production sharing agreement.

China and India have both vied to secure agreements allowing them to buy much of the gas, but Japan and Korea have also submitted bids to buy the gas if it can be exported in a liquefied form.

The Burmese government, which promoted this competition, will decide by May whether to export the gas and to whom.

To export the gas to regional markets would require the building of a natural gas terminal from which to ship the gas. However, an overland route across Burma, via pipeline, is considered more likely because it would be less expensive.

HRW says that some groups have already reported that villages in Arakan State have begun to experience forced relocations, forced labour and other abuses as troops are expanding their presence, presumably in preparation of pipeline construction.

Other natural gas partners who have been linked to human rights abuses in connection to pipeline constructions in Burma include Thailand’s largely state-owned PTT Exploration and Production Co Ltd; Union Oil Company of California, now a wholly-owned subsidiary of the U.S. oil giant Chevron; Malaysia’s state-owned Petronas; and Nippon Oil of Japan.

China’s state-owned China National Offshore Oil Company and China National Petroleum Corporation have stakes in offshore and onshore natural gas blocks, while onshore deposits have been assigned to various companies, including the Indian firm Essar Oil. Companies from Singapore and Russia have made a deal to develop inland gas deposits.

The major companies involved in the current development of Burma’s gas fields are among the SPDC’s major military backers, says HRW.

China, Russia and India have all sold weapons to Burma, a fact that was brought further into the open when China and Russia vetoed a U.S.-sponsored U.N. Security Council resolution in January which would have criticised the ruling military junta’s violent and abusive human rights abuses.

Gas in the Shwe deposits could be worth between 37 and 52 billion dollars.

The SPDC spends the majority of Burma’s natural gas revenues on its huge military while maintaining some of the lowest social spending of any country in the world.

“The SPDC leverages its natural resources to secure political and military support,” said Ganesan, “In effect, it trades its gas and other riches for guns and political backing. China, India and others should think twice about getting into bed with such an abusive government.”