The Multinational Monitor

Jan/Feb 2004 - VOLUME 25 - NUMBERS 1 & 2

V i c t o r i e s !  W i n n i n g   C a m p a i g n s

Out of Burma
Grassroots Activism Forces Multinationals to
End Ties with the Burmese Dictatorship

By Jeff Shaw

In Burma, 50 million people live under a brutal veil of government surveillance and violence. The Burmese population, the vast majority of whom voted overwhelmingly for democracy a decade ago, live under the thumb of one of the most repressive governments on the planet.

The brutality of the ruling military junta, the elegance of the Burmese democratic movement and the strategic savvy of an international solidarity movement have spurred a multinational corporate procession out of the country, and away from support for or association with the governing dictatorship.

The economic and financial pressure on the regime represents one of the most successful international pressure campaigns ever run.

"If it's not the most successful, it's pretty darn close," says Jeremy Woodrum of the U.S. Campaign for Burma. Woodrum has been working as part of the Burmese solidarity movement for the better part of a decade.

Grassroots activists have pressured approximately 90 corporations to cut investment or trade ties to the Burmese dictatorship. Largely due to campaigns led by a committed international cadre of pro-democracy activists, Burma's brutal regime is an international pariah.

Terror in Burma
Burma's military government is consistently ranked as one of the worst human rights violators in the world. The corrupt government oversees the devastation of the country's environment, notably through unchecked illegal logging. It suppresses democratic opposition, assaults religious freedom, and brutally cracks down on ethnic minorities in order to maintain power. The military uses mass rape as a weapon, has banned union organizing and employs widespread forced labor, including child labor, to carry out projects to generate cash for the ruling generals" lavish lifestyle. The country is also one of the world's most prolific producers of opiate drugs.

The military has exerted control over most everything about the country, even going so far as to rename the country (now officially called "Myanmar") and the regime itself. First called the State Law and Order Restoration Council (which created the ominous acronym SLORC), the Burmese junta now refers to itself by the sanitized moniker 'state Peace and Development Council" (SPDC).

But peace is not high on the generals" agenda; the then-SLORC slaughtered thousands of pro-democracy student demonstrators in 1988. When the country overwhelmingly voted for a democratic government a few years later, the military refused to recognize the results. The leader of the opposition party, Nobel Peace Prize winner Aung San Suu Kyi, remains under house arrest.

That "the facts on the ground were so damning" has greatly eased the task of organizing opposition to the regime, says Larry Dohrs, a veteran Burma activist who now serves as vice president of the Seattle-based Newground Investment Services, a socially responsible investment firm. U.S. activists can simply point to annual U.S. State Department human rights reports, as well as human rights organizations" voluminous documentation, to reveal the tragedy of dictatorship in Burma.

Facing such overwhelming opposition, domestically and internationally, the dictatorship stays afloat by reliance on raw military force. But that military power is dependent on a flow of capital into the country.

The Corporate Connection
Foreign investment is of pivotal importance to the SPDC, says Dohrs.

"The regime has very few sources of income," Woodrum adds. "The only way the regime can continue to stay in power is to continue foreign investment and trade; that's how they pay their military."

Activists have thus worked to staunch the flow of money into the country.

While their long-term goals have always included federal legislation banning imports from and investment in Burma, U.S. activists have viewed applying direct pressure on individual corporations doing business with Burma as a key element of denying the dictatorship its economic lifeblood.

Suu Kyi has herself called for activists working internationally to adopt this strategy.

And it's worked. Dozens of major corporations have pulled out of Burma entirely, at times abandoning multi-million dollar investments. Activists have successfully targeted major U.S. investors like Arco and Texaco (now merged into ChevronTexaco), preventing these firms from supplying financial fuel to the SPDC.

Grassroots groups have worked as well to pressure companies to stop importing products, especially textiles, from Burma. In response to activist pressure, apparel companies like Perry Ellis, Kenneth Cole, The Children's Place and Jones New York have cut off imports; and the American Apparel & Footwear Association, a national trade association, issued a strongly worded statement in favor of sanctions against Burma in 2003.

Isolating the Dictatorship
These achievements mark the Burmese solidarity movement as the most powerful boycott and divestment campaign since the anti-apartheid effort of the 1980s. Why has it been so successful at making demands on corporations?

Part of the answer lies in the military government's appalling record.

"The Burmese regime is so brutal," says Woodrum, "every time it starts to seem that they"re turning around, they do something worse. That's been very well publicized by human rights groups."

Another reason is the vibrant pro-democracy movement inside the country that is calling for international pressure. Suu Kyi's National League for Democracy, which won over 80 percent of parliament seats in the 1990 elections, is extremely popular. "That serves to unite opinion regarding policy and practice toward the country," Woodrum says.

The presence of a powerful figure like Suu Kyi helps focus international pressure, too. It helps when a charismatic individual can embody a struggle, and the Nobel Peace Prize winner's high-profile has bolstered sentiment against the SPDC.

The movement has been aided as well by the low level of involvement in the country of most multinationals. With a few vital exceptions, most multinationals have maintained minimal investments in the country or have imported from Burma only on a small scale. For most firms, it is not worth the hassle of remaining in the country, if a Burma connection will tar their reputation internationally, especially with consumers.

But the movement has helped itself, too. Lean and nimble, it has masterfully staked out targets and deployed focused pressure to convince companies to reassess the merits and value of their Burma ties.

Well-planned Internet organizing has helped keep the activists one step ahead of the game, providing fast and effective networking.

The Internet "made it easier for grassroots campaigners to communicate with each other quickly," says Woodrum.

"The Free Burma Movement, especially in the early years, was very Internet focused," agrees Dohrs. "It was the perfect way to create an activist community."

Since the movement was driven by a dedicated core of people -- almost all volunteers -- living in different areas across the country, e-mail and a web presence helped provide information, coordinate logistics and maintain support for the effort.

With strong organization and powerful facts at their disposal, a relatively small number of people have been able to make a big difference.

"If you have eight to 10 people on the ground [in a given community], and they"re committed and their arguments are good, that's plenty," says Dohrs.

The presence of Burmese exiles in the United States has also been essential. They have helped put a human face on the trauma suffered in the country across the sea.

"Having the participation of Burmese people is always critical," Dohrs maintains, "because they have the credibility of those who have lived through this." The presence of someone who has felt the impact of the regime firsthand, or who has family that have done so, adds to emotional weight of the arguments put forth by solidarity activists.

The Burma Law and its Aftermath
It is a testament to the movement's momentum that success continued even after the U.S. Supreme Court overturned Massachusetts" "Burma Law," a flagship statute which prohibited companies doing business with the state from doing business in Burma or trading with the military junta.

The law, passed in 1996 at the behest of activists, was a landmark in human rights legislation. It frightened a broad swath of the business community, which was much less concerned about the Massachusetts penalty for doing business with Burma than with the prospect that the Massachusetts law would serve as a model for other states, on a range of issues. Denying state contracts to corporations is a powerful lever.

In response, a coalition of corporations challenged the law as an unconstitutional infringement on the federal government's exclusive right to conduct foreign policy. The case eventually made its way to the U.S. Supreme Court, which agreed with the corporate challenge to the law and invalidated it.

Having the law struck down "was a huge blow," says Woodrum. The strategy of Burma campaigners had been to use grassroots power to bring pressure on the regime. Working through cities, localities and state governments to penalize companies doing business in Burma was a critical element of this approach.

"The law being struck down made it more difficult to target multinational corporations," says Woodrum.

It wasn"t a devastating blow, though, because activists have made doing business with Burma a public relations nightmare for companies. Plus, after being challenged by the Supreme Court to change federal policy, the activists did just that.

Their efforts culminated in legislation passed by the U.S. Congress at the end of last summer, banning all imports from Burma. Free Burma groups had backed that sanctions legislation from the beginning. The Burmese Freedom and Democracy Act of 2003 passed with overwhelming bipartisan support, clearing the House of Representatives by a vote of 418-2 and the Senate by a 97-1 count.

Unocal's Pipeline and the Generals
Challenges remain afoot, though, particularly as regards petroleum giant Unocal. Unocal has invested hundreds of millions of dollars to build an extremely controversial natural gas pipeline from Burma to Thailand. The company's investment in the pipeline has helped prop up the regime, charge Burmese democracy activists and the international solidarity effort, and the revenues that will flow to the government when the project is completed will help the isolated dictatorship maintain its power. Activities associated with construction of the pipeline have involved widespread human rights violations, including the systematic use of forced labor and displacement of thousands of villagers, according to human rights organizations.

But despite an intensive grassroots campaign, Unocal has refused to withdraw from Burma. For years, it has made the apparent calculation that the ultimate rewards from the Burma project outweigh the severe reputational harm it has suffered from its association with the Burmese military dictatorship. In 1997, Unocal sold off its retail sales arm, immunizing it from direct consumer pressure and making it much more difficult for grassroots campaigners to rattle the company's bottom line.

"By not operating a retail chain, they"ve insulated themselves from retail pressure," says Woodrum.

Additionally, backroom deals have benefited the powerful multinational. Most significantly, a 1997 ban on new investment in Burma, passed by the Clinton Administration, exempted Unocal through a grandfather clause.

For now, the primary pressure on Unocal is coming from two civil suits in U.S. courts. A group of Burmese plaintiffs are suing the company in federal court in California, alleging that they were subjected to forced labor and violence while working on the corporation's natural gas project in Burma.

The suits are "very important, not just for the Burmese people, but for the plaintiffs, who suffered greatly," says Woodrum.

The suits charge a conspiracy between SLORC and its petrochemical partners, Unocal and the French oil giant Total, that has caused human rights violations, including coerced labor, the forced removal of villagers, murder, rape and other torture, during construction of the pipeline.

Globalizing the Sanctions
While the U.S. sanctions legislation was a huge win, it must be renewed annually. Also, the sanctions effort "needs to be more international," says Woodrum. Thus, future tactics will focus on the European Union and a continuing campaign against Total.

The U.S. sanctions are important as a blanket mechanism to stop, with one move, all U.S. companies from propping up the SPDC through trade. But, a globalized economy means eternal vigilance for activists, as companies seek loopholes and shields for illegal activities.

A case in point came to light in January, when Swift, a Belgian conglomeration of international banks -- including U.S. firms Citibank and J.P. Morgan -- began establishing accounts for the SPDC as a means of converting the junta's currency into the EU's currency, the euro. This would be a very important boon to the regime, since no trading partner wants the Burmese kyat, and the U.S. sanctions preclude the regime from trading in dollars.

Should the Swift maneuver prove successful, the resultant Europeanizing of currency would provide a major boost to the SPDC's efforts to carry out and expand its international trade -- and thus sustain itself. The fact that U.S. companies are participating despite the sanctions especially vexes Burma campaign organizers.

"If they"re not breaking the law," Woodrum says, "they"re certainly undermining the spirit of what was passed."

They are also sure to face a vocal and well-organized response.

Jeff Shaw is a journalist based in Washington state.