Multinationals dance with the devil in Myanmar

Multinationals dance with the devil in Myanmar

Jan 29 (Asia Times Online) - Rolls-Royce, a venerated name in British corporate culture, has been put in the spotlight for making a turn that a labor group calls a betrayal of its stated commitment to social responsibility.

The company is being accused by one of the world's leading trade union movements of having business links in military-ruled Myanmar; its name appeared this week in a list compiled by the International Confederation of Free Trade Unions (ICFTU).

Rolls-Royce is among the new names on the list of 439 multinational companies with economic ties in Myanmar, charged the 28-page document, "Doing Business with Myanmar", that was released by the Brussels-based ICFTU.

Other prominent names from Britain's corporate world on this notorious list include the insurance company Lloyd's of London, the Cambrian Group - a conglomerate of petroleum consultants; pharmaceutical giant GlaxoSmithKline, and wood industrialist Robbins Timber.

"The main reason why foreign enterprises should not engage in investment or trade with Burma is because of the financial benefits that the junta reaps from these activities," states the ICFTU in its report. "[It] contributes to allowing the military to remain in power and perpetuate their criminal rule over the country." (The country was known as Burma until 1989, when the current junta took over and changed its name to Myanmar.)

The ICFTU's charge against Rolls-Royce is echoed by another critic of Yangon's junta, the London-based Myanmar Campaign UK.

"Through its Singaporean subsidiary, Rolls-Royce has a contract to supply and service aircraft engines for at least one Burmese airline. All airlines in Burma are owned by the regime or their cronies," declares Myanmar Campaign in its "Dirty List" of foreign companies either trading or having investments in the Southeast Asian country.

In contrast, Rolls-Royce declares on its website that it strives to be a responsible corporate citizen. "The Group attaches importance to the pursuit of excellence as a responsible corporate citizen in its operations throughout the world and continues to develop its approach to corporate social responsibility," the multinational states in its online annual report.

Yet the ICFTU is hardly impressed by such explanations. That Myanmar has provoked this push by the ICFTU - which wants foreign companies to halt their investments in the military-ruled country - is due to the litany of human-rights violations occurring in Myanmar that have little parallel elsewhere.

"Burma is the only country for which we call for disinvestment," Fons Vannieuwenhuyse, a researcher at ICFTU, told Inter Press Service. "The Burmese generals have an overwhelming grip on the economy, whereby nearly all foreign business will bring financial benefits for an elite few."

"Investing in Burma is not possible without the agreement of the junta," adds the ICFTU, which launched its campaign against the military regime in the early 1990s. "Over the last 15 years the military dictatorship in Burma has moved itself into a position of virtual control over all aspects of the business sector."

That reality is best reflected by the state-owned Economic Enterprise Law of 1989, which gives the junta "the right to control 12 key areas of economic enterprises". These economic areas range from exploiting teak forests for trade to exploring and extracting petroleum and natural gas to air transport and railway services. Also covered under the 1989 law are banking and insurance services.

"Foreign businessmen report that to do business one must 'make a deal' with a state-owned firm, a firm controlled by a senior military officer, or pay at least a 5% commission to a uniformed officer," the report states.

Aside from this, there is the widespread use of forced labor - sometimes in slave-like conditions - endorsed by the military regime. According to the International Labor Organization (ILO), an estimated 800,000 people are subject to forced labor in Myanmar.

The civilians condemned to work at the point of a gun have to clean roads, carry heavy loads for the army, construct military buildings and work on agriculture and infrastructure projects.

The Geneva-based UN labor agency has proven that outside pressure can force the military rulers to blink, consequently leading to marginal attempts to reduce the level of rights violations. That prevailed in 2000, when the annual ILO conference - which includes governments, employers and trade unions - took the unprecedented step of approving severe restrictions, including sanctions, on Myanmar, because forced labor continued to prevail in the country.

Soon after, the State Peace and Development Council (SPDC), as the military government is officially known, agreed to enforce a legal order banning forced labor. However, the ILO conference in November last year conceded that such hints of reform from Yangon have amounted to naught. The ILO consequently issued a new warning to the SPDC: that harsh sanctions - including a call on UN agencies to review their relations with Myanmar - would be enforced by this March if forced labor was still used.

"Campaigns like the one launched by the ICFTU can help produce change, since our work is complementary," Sophy Fisher, ILO's information officer for the Asia-Pacific region, told IPS. "Ending forced labor requires more than legislating against it. There also has to be a change of attitudes among employers and even consumers."

That such campaigns to blacklist global brand names are having an impact is reflected by the international companies that have pulled out of Myanmar. They include Pepsi Cola, Levi Strauss, Adidas, Carlsberg and Premier Oil.

In addition, Myanmar's foreign direct investment (FDI) numbers have also shown a slide. In 1999, the country attracted US$304 million in FDI; in 2000, the amount had slipped to $208 million and by 2002 the figure was $191 million, states the ICFTU report.

"Companies doing business in Burma have to consider if a stain on their public image is worth the price," Debbie Stothard, of the regional human-rights lobby Alternative Association of Southeast Asian Nations Network on Myanmar (ALTSEAN), said in an interview. "More and more, they are being held accountable by affluent consumers who are worried about the ethics of companies."

Myanmar is one country where foreign companies with investments cannot hide from "ethical and social responsibility issues," she added. "It is universally known that to do business in Myanmar you have to dance with the devil." (Inter Press Service)

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