Energy security: security for whom?

• Date: 01 January 2008
• Author: Smith, Matthew F.

In military-ruled Burma, also known as Myanmar, large-scale natural gas projects have directly and indirectly led to violations of basic human rights through the complicity of multinational corporate actors. These abuses are ongoing and there is an unreasonably high risk they will increase as more gas projects are developed. This paper assesses the past, present, and future human rights impacts of large-scale natural gas extraction in Burma, and the implications these impacts have in terms of corporate accountability. The paper provides background information regarding Burma's government, economic policy, and the energy sector and considers past and present human rights abuses connected to the Yadana natural gas project, developed by a consortium including Chevron, Total, PTTEP, and MOGE. The authors argue that the companies are complicit in ongoing human rights abuses in connection to their investment. The paper then describes the threat of future human rights abuses in connection to the country's largest offshore gas deposits, concluding that there is a high risk that current human rights abuses in the proposed project areas will be exacerbated by the new gas production, and that there will likely be abuses directly linked to the Shwe pipeline project. Finally, the authors assess the interests and actors involved in the Southeast Asia regional energy security dynamic as it relates to Burma's fast growing oil and gas sector, human rights, and corporate accountability. They argue &at the energy security strategies of China, Thailand, and India--and by association, the national oil corporations under those governments--relying on Burmese resources have paid dangerously inadequate attention to the protection of human rights.

1. INTRODUCTION

   While the oil and gas industry has performed a remarkable feat in delivering energy to a large percentage of humankind in a relatively short period of time, the benefits of such resource production often evade the least advantaged actors, who bear the brunt of the negative impacts. In military-ruled Burma, also known as Myanmar, (1) large-scale natural gas projects have directly and indirectly led to violations of basic human rights with the complicity of multinational corporate actors. (2) These abuses are ongoing and there is an unreasonably high risk that they will increase as more gas projects are developed. This paper assesses the past, present, and future human rights impacts of large-scale natural gas extraction in Burma, and the implications these impacts have for corporate accountability.

   In Part II, we provide background information regarding Burma's government, economic policy, and the energy sector that is necessary to understand the relationship between human rights abuses and energy development in Burma today. Part III considers past and present human rights abuses connected to the Yadana natural gas project, developed by Chevron (USA, formerly Unocal), Total (France), PTT (Thailand), and MOGE (Burma). We argue that the companies are complicit in ongoing human rights abuses in connection to their investment. Part IV describes the threat of future human rights abuses in connection to the country's largest offshore gas deposits, which are being developed by Daewoo International (South Korea) and involve ONGC Videsh Ltd. of India, the Gas Authority of India Ltd (GAIL), the Korea Gas Corporation (KOGAS), and potentially PetroChina. We conclude that there is a high risk that current human rights abuses in the proposed project areas will be exacerbated by the new gas production, and that there will likely be abuses directly linked to the Shwe pipeline project. In Part V, we assess the interests and actors involved in the Southeast Asia regional energy security dynamic as it relates to Burma's rapidly growing oil and gas sector, human rights, and corporate accountability. We argue that the energy security strategies of China, Thailand, and India--and, by association, the national oil corporations under those governments--converging on Burma provide dangerously inadequate attention to the protection of human rights.

   International law accords to the state primary responsibility in the protection of human rights. However, it is also clear that human rights obligations apply to non-state actors. (3) Multinational corporations bear rights and duties under international law, and have a moral and legal obligation to respect, protect, and promote human rights. This paper does not attempt to address the specific human rights obligations of multinational corporations, or the ways in which non-state actors can be held accountable for their actions. However, the basic human rights obligations of corporations are the point of departure here and are the framework with which we consider the plight of local actors in Burma and the natural resource equation of energy security.

2. BACKGROUND

   1. The Context

      Burma is a country of remarkable ethnic and geographic diversity with an abundance of natural resources, including oil, gas, and timber, and minerals such as gold, copper, nickel, gems, and jade. Burma is the largest country in mainland Southeast Asia, with a relatively large western coastline on the Bay of Bengal (1,190 miles), and bordering Bangladesh, India, China, Thailand, and Laos. The country is home to approximately fifty-seven million people who occupy seven divisions and seven states. The ruling elite and the military largely represent the majority Burman ethnicity, while seven major ethnic nationalities--Arakan, Chin, Kachin, Karen, Karenni, Mon, and Shan--together with at least 130 smaller ethnic tribes (4) comprise approximately 40 percent of the population. (5) Burma's divisions are generally occupied by Burmans, while states are generally occupied by ethnic nationalities and tribes, although there is considerable diversity within some areas. (6)

      During Burma's relatively brief period of freedom from 1948 to 1962, "the concept of a legal opposition was still new and often resisted," (7) and the political context was marred by sometimes violent efforts to eliminate the opposition, including the existence of private armies employed by politicians. (8) People at the local level were excluded from welfare planning and therefore lacked commitment to government-led projects. Ethnic minorities were largely disenfranchised and in some cases took up arms against the government for a range of reasons--struggles which continue today. (9)

      Military rule in Burma began by coup in 1962 when General Ne Win disbanded Parliament, suspended the Constitution, and began the period of intransigent and repressive rule that continues today. The State Peace and Development Council (SPDC) is the state body run by the tatmadaw (military), and the tatmadaw is the country's main political actor--in some ways, the only political actor. (10) The country is ruled by Senior General Than Shwe.

      After 1988, when the military opened fire on pro-democracy protestors, ultimately killing as many as 3,000 civilians, (11) the tatmadaw grew dramatically, turning the country into the formidable military state it is today. Military personnel jumped from 180,000 in 1988 to over 400,000 in 1996, and that increase coincided with a sharp increase in military expenditures valued in the hundreds of millions of dollars, mostly for armaments and other hardware, as well as new naval and air force bases. (12) While Thailand is the regime's largest trading partner by a large margin, most of the junta's military support has come from China and India, countries with an active interest in exploiting Burma's natural resources, particularly in oil and gas. (13)

      Politically, the country faces several authoritarian obstacles that are interwoven with the country's extractive industries. On August 15, 2007, the junta made an unexpected and fateful decision to remove state subsidies on natural gas, diesel, and fuels. This led to dramatic price increases. The price of diesel and fuel increased by approximately 100%, and the price of natural gas--the country's core asset and largest source of export revenue for the junta, used domestically for cooking and in automobiles--increased by approximately 500%. This in turn caused an overnight increase in the price of basic commodities. The price of rice and other foods nearly doubled, with marked increases in the prices of beef, fish, milk, eggs, and cooking fuels. (14) Bus fares quickly became unaffordable for the average citizen, and domestic airfares increased by at least 30%. (15) These increases had an immediate and significant economic impact on the daily survival of people across the entire country, the result of which was widespread popular protest led by the country's revered Buddhist monks. It was a historic nationwide uprising, followed by a forceful crackdown, widespread repression, and an unknown and disputed number of killings, some of which were captured on video and broadcast internationally over the internet. (16) Human Rights Watch believes that the death toll is "much higher" than the ten deaths originally reported by the regime, (17) and this view has been echoed by others, (18) including the U.N. Special Rapporteur on human rights in Burma, Paulo Sergio Pinheiro. Pinheiro conducted a brief investigation that he claims was hindered by a lack of cooperation by the Burmese authorities. He found evidence of at least 30 killings in Rangoon alone, stating in his December 2007 report to the Human Rights Council that "several reports of killings indicate that the figure provided by the authorities may greatly underestimate the reality." (19) Abuses connected to this crackdown are ongoing. (20)

   2. Economic Policy from 1962-2008: From Centrally Controlled to Pseudo-Free Market

      Burma's economic policy and climate of investment was formed through years of ill-advised military economic policymaking and two noteworthy market reforms. Since 1962, fundamental economic...