The Multinational Monitor

JUNE 1996 · VOLUME 17 · NUMBER 6

T H E    F R O N T

Sanctioning Burma

THE CAMPAIGN for democratic reform in Burma received a boost in late April when PepsiCo announced it would sell its equity stake in its Burmese operations "in the near future."

But activists have vowed to continue to pressure the company because it will still provide soft-drink syrup and use of the company's internationally recognized trademark to Pepsi Cola Products Myanmar.

In 1988, the State Law and Order Restoration Council (SLORC) changed the official name of Burma to Myanmar and declared martial law. An international suspension of aid led the regime to promise democratic elections in 1990. The National League for Democracy, led by Aung San Suu Kyi, won those elections, with 60 percent of the vote and 82 percent of the seats in government. However, the SLORC -- whose party won just 2 percent of the seats in parliament -- disregarded the elections, placed Suu Kyi under house arrest, and initiated a campaign of widespread repression against the Burmese people.

Pepsi spokesperson Keith Hughes cited "public opinion" as one of the reasons for the pull-out.

Led by the Coalition for Corporate Withdrawal from Burma, a diverse group of Burmese exiles, human rights activists, environmentalists, trade unionists and religious organizations, citizens groups have pressured Pepsi for several years to withdraw from Burma.

Last year, a Harvard students' vote to reject a $200,000-a-year contract with Pepsi because of its investments in Burma stung the food and beverage maker. The Harvard contract went to company rival Coke instead.

And Starbucks Coffee, which is marketing a new coffee drink with Pepsi, has specified that the product not be made or sold in Burma "as long as current conditions persist." Starbucks spokesperson Jeanne McKay says the company imposed the condition in response to customer concerns about Burma.

Regarding PepsiCo's remaining business dealings in Burma, Hughes says the company has "a contractual obligation to supply syrup and licensing, ... contracts that will last several years." The company will revisit the issue when these contracts end, Hughes says.

The Pepsi withdrawal comes in the wake of the April 1 replacement of Chief Executive Officer Wayne Calloway -- who accused Burma activists last year of using intimidation tactics "no different than what years ago was practiced by Joe McCarthy and the like." Calloway was replaced by Roger Enrico, who presided over the company's beverage division when it pulled out of South Africa in 1985.

The Pepsi announcement is "a significant step," says Simon Billenness, an analyst at the Boston-based social investment firm Franklin Research and Development. "But they are still doing business in Burma, so the pressure on them will continue," says Billenness, who is also a member of the Coalition for Corporate Withdrawal from Burma.

"We would like to remind those who are simply looking at the economic benefits that they hope to reap from Burma today that they are working against their own long-term interest and the long-term interests of the international community in general," 1991 Nobel Peace Prize laureate Suu Kyi said in a videotape which was played at a press conference at the UN Human Rights Commission in Geneva on April 17.

"My advice is for firms to wait" to invest in Burma, adds Burmese Prime Minister-in-exile Dr. Sein Win. "Once democracy is restored, we will welcome our friends who have stood by us in our time of need," he says, echoing similar statements made by Archbishop Desmond Tutu in apartheid-era South Africa.

Among those calling for democracy in Burma is a group of 10 Nobel Laureates including Tutu and the Dalai Lama. Tutu has drawn a parallel between the SLORC and apartheid regimes, noting that reform in South Africa only began when the impact of serious economic sanctions was felt there.

In 1992, Levi Strauss pulled its operations out of Burma, stating, "Under current circumstances, it is not possible to do business in Myanmar without directly supporting the military government and its pervasive violations of human rights."

Several companies followed Levi's, including Wal-Mart, Reebok, Eddie Bauer and Amoco.

Activists in several North American cities have successfully persuaded municipal governments to pass "selective purchasing" laws barring companies operating in Burma from doing business with the city government. April 1996 witnessed the passage of such resolutions in San Francisco and Oakland, which joined the ranks of Madison, Wisconsin, Ann Arbor, Michigan and Santa Monica, California in ending their business ties with companies that do business with the SLORC. Resolutions are also pending in New York City, Chicago and Seattle.

The Burma divestment movement notched another victory in early June, when the Massachusetts State Senate joined the State House in passing a selective purchasing bill.

Because it is still marketing and supplying its product to Burma, Pepsi is affected by these resolutions. Other companies affected include Apple Computers, Arco, United Parcel Service, Texaco, Wilson Sporting Goods and Unocal.

Unocal and its French partner, Total, are building a 525-million-cubic-feet-per-day natural gas pipeline through Burma that is expected to pump $400 million a year into the SLORC's coffers, making it the largest single-project revenue earner for the regime. The military has rounded up tens of thousands of slave laborers from nearby villages to build infrastructure for the pipeline.

"We are a global energy company, not a political agency," says Unocal spokesperson David Garcia, defending the company's position. We will not assert ourselves in the internal debate of sovereign nations."

-- Aaron Freeman

Indonesian Crackdown -- in Illinois

JUST 40 MILES from Decatur, Illinois, where A.E. Staley workers -- members of the United Paperworkers International Union (UPIU) -- lost a two-year battle with the company, a new labor fight has emerged in Charleston, Illinois.

In January, after workers rejected Trailmobile's offer for a new contract, Trailmobile locked out its employees while negotiations continued. "They said there was sabotage in the plant, but never showed that there was," says Gary Collins, president of UPIU Local 7591. "They said we had done a work slowdown, but we'd had a slowdown on parts coming in. It wasn't our fault."

The Charleston struggle is not the first attempt by Gemala Industries, which owns the trailer manufacturer, to crush labor in North America. Gemala Industries bought Trailmobile's Toronto, Ontario-based parent company in 1989. A year later, it closed an Ontario plant, laying off 334 members of the Canadian Auto Workers. In 1992, Trailmobile locked out 20 workers in Manitoba after they rejected wage and benefit cuts. That lockout lasted two years.

Closing all of its Canadian plants by 1993, the company announced plans to build a plant in Arkansas. After the announcement, Gemala North America vice president Sidney Kulek was quoted as saying, "The fact that the state has right-to-work laws was very important to us."

For the 1,020 locked-out workers in Charleston, this is the latest battle in the stepped-up war against labor. What they have only recently discovered, however, is that the company fighting them also finances a more literal bloodbath about 10,000 miles away.

Gemala Industries is a group of companies controlled by the Wanandi family of Indonesia. Gemala chairman Edward Ismanto Wanandi is the youngest brother of the family, which has strong ties to the Indonesian military. Company chair Sofjan Wanandi, once an adviser to top Indonesian generals, is today involved in "tourist development" in occupied East Timor, according to the UPIU. Jusaf Wanandi found the Indonesian military-intelligence institute which helped plan the invasion of East Timor, according to the UPIU, and helped garner foreign support and acquiescence for the occupation.

The Indonesian military has compiled a spectacularly bloody record since taking power in a 1965 coup. In the course of consolidating its grip on power, the military killed more than half a million Indonesians. In December 1975, Indonesia invaded East Timor, a small island-nation southeast of Indonesia and north of Australia. In the 20 years since, more than 200,000 residents of East Timor have died at the hands of the Indonesian government, one of the most repressive in the world.

Yet another Wanandi brother, Father Marcus Wanandi, denies many of the military's abuses ever occurred. The priest has denied that the Indonesian government had killed survivors of an attack on unarmed demonstrators that took place in East Timor's capital city, Dili, in 1991, according to the UPIU. Eyewitnesses have reported that the Indonesian army killed surviving demonstrators in the hospital where they were being treated. Fr. Wanandi has also denounced demands by some in the Catholic Church for a referendum on East Timor's future. In 1994, according to the UPIU, Fr. Wanandi was quoted saying that there was "a spontaneous want for freedom but no real idea of what to do if they got it," referring to residents of rural villages in East Timor.

Back in the United States, Trailmobile officials did not return phone calls.

Workers say that, in public, the company calls the lockout a strike. The company also downplays any connection between Trailmobile and the events in Indonesia.

Activists fighting to end U.S. support for the Indonesian military have found allies in the UPIU workers. Both have been waging corporate campaigns. The locked-out workers targeted Trailmobile's business partners and customers. The East Timor Action Network has focused its efforts on U.S. corporations operating in Indonesia.

Now, the two struggles have become intertwined. In April, a UPIU delegation visited union workers at Gemala-owned companies in Australia and New Zealand to spread the word about the strike. Last month, Jose Ramos-Horta, a leader of the East Timor resistance movement, spoke to the locked-out UPIU workers in Charleston.

"It helps people to understand that it's not just things happening in isolation," says Charles Scheiner, national coordinator of the East Timor Action Network. "All these things are connected."

But the activists have their work cut out for them. The House Foreign Operations Committee is currently evaluating the U.S. policy on Indonesia. The Indonesian government has already begun its lobbying, and ITPN, an Indonesian aircraft company, has announced that it will build a factory in the district of committee chair Sonny Callahan, R-Alabama. ITPN is headed by a man named Habibi, who many believe is the likely successor of Indonesian dictator Suharto.

--Leah Samuel

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