Arief Budiono- 3 Int.

Kemenkeu 1
Sukindar Ari Santoso-10 Business Ethics
UNOCAL IN BURMA

QUESTIONS
1. Answer whether from utilitarian, rights, justice and, caring perspective, Unocal did
the right thing in deciding to invest in the pipeline and then in conducting the project
as it did. In your view, and using your utilitarian, rights, justice, and caring
assessments, did Unocal do the right thing? Assume there was no way to change
the outcome of this case and that the outcome was foreseen, was Unocal then
justified in deciding to invest in the pipeline?
Answer:
Wether what Unocal did was right or wrong can be assessed from 4 (four) moral
principles point of view, which are: the utilitarian, rights, justice, and caring
perspective.
a. Utilitarian Perspective:
Utilitarianism is the moral view that in any situation the right course of action
is the one that will provide people with the greatest amount of benefits while
minimizing harms. In another word Utilitarianism is a general term for any view
that holds that actions and policies should be evaluated on the basis of the
benefits and costs.

The core concept of utilitarianism is the focus of good consequences for all
stakeholders and not just the individual.

From utilitarian perspective, we compare the costs and benefits of the project.
The costs and the risks of Yadana project were:
hundreds of Karen would be used as forced labour and also forced to relocate
to accommodate the pipeline project, they know from all the previous reports
that Burma military government was abusing human rights to their people, more
over to minorities like Karen. Abusive treatment and even murder by the
Burmese government for those who opposed the project were likely to applied.
Arief Budiono- 3 Int. Kemenkeu 1
Sukindar Ari Santoso-10 Business Ethics
The benefits of Yadana project were:
According to Unocal:
Significantly improved health care, improvements in education, new
transportation infrastructure and small business opportunities. The impact of
these programs has been enormous. Infant mortality in the pipeline region, for
example, had dropped to 31 deaths per 1,000 live births by the year 2000,
compared to 78 deaths per 1,000 live births for Myanmar overall. In 2002, the
infant mortality rate in the pipeline region declined again to just 13 deaths per
1,000 live births.

CDA findings:
The number of people (middle class) benefitting from the Socio-Econ Program
is steadily increasing.

A pure Utilitarian perspective would say that it was right for Unocal to investing
in the Yadana pipeline. By conducting the project, there were a far greater
number of people got benefits than the drawbacks from Yadana Projects.

b. Rights Perspective :
Judgments about human rights are based on moral principles that advocate
respect for people’s freedom and well-being. And judgments about the
importance
of human relationships can be based on what is called an ethic of care.

From the case study, we find that references are made to the rights perspective
of ethics violation, including : the report that throughout 1993 to 1996, the
Human Rights Watch and Amnesty International issued reports claiming that
the Burmese army was using forced labour and brutalising the Karen population
to provide security for Unocal workers and equipment. Subsequently, a 1995
report commissioned by Unocal also stated that human rights violations have
occurred and continue to occur. All of reports were proves of indirect conflict
with the rights perspective of ethics.
Arief Budiono- 3 Int. Kemenkeu 1
Sukindar Ari Santoso-10 Business Ethics
Our group conclusion: based on the rights perspective, Unocal was not correct
in involving in the Yadana project and conducting in the infrastructure project
as there was information are known prior to Unocal entering the contract the
ethics violations continued during the time of the contract in Burma both
directly and indirectly related to the project.

c. Justice Perspective :
Judgments about justice are based on moral principles that identify fair ways of
distributing benefits and burdens among the members of a society.,
From the passage, we can judge Unocal’s position from the three different
categories of justice, as follows :
- Distributive justice :
From a distributive justice point of view, it showed that Unocal made the
wrong decision to invest in the Yadana project. The fact the various reports
from the US State Department, NGOs and even Unocal’s own findings
shows that although the benefit of the project was not distributed to all
Burmese, only those who were on the pipe line tracks get the benefits.
- Retributive justice : just imposition of punishments and penalties
From a retributive justice viewpoint, it showed that Unocal made mistakes
in its decision to invest in the Yadana project as it was then emerge a
problem and lawsuit in both the Federal and State courts in the US and the
growing bad publicity and boycotts by consumers in the US even after
Unocal was acquired by Chevron.
- Compensatory justice : just compensation for wrongs or injuries.
From a Compensatory Justice point of view, On December 20, 2004,
Unocal announced it would settle a federal lawsuit, provided compensation
and funding for social programs for people who are in the pipeline region.
That was the right thing to do regardless those action was sufficient or not.

d. Caring Perspective :
Ethics from a caring perspective is that we have an obligation to exercise
special care toward those particular persons with whom we have valuable
close relationships, particularly relations of dependency.
Arief Budiono- 3 Int. Kemenkeu 1
Sukindar Ari Santoso-10 Business Ethics
The information that we get from various reports showed that Unocal made
mistake in investing in the Yadana project from an ethics of care
perspective. The Burmese government violated nature of the ethics of care
which emphasises compassion, kindness and the development of
relationship. They treated Karen as minorities to be slaved and tortured for
government sake. Even worse, this fact were known by Unocal, thus it
violated the ethics of caring perspective .

2. In your view, is Unocal morally responsible for the injuries inflicted on some of
the Karen people ? Explain.

It is necessary to review the principles of ethical or moral that had been violated
and how the four basic kinds of moral standards were applied in Yadana field
project.

Ethical principles (utilitarianism, rights, justice and care), provide a systematic

basis of moral standards that can be used to determine and evaluate the moral value
of a decision or assessment.

The integration of 4 moral standards:

In the case of Unocal, before the investment was made, Unocal conducted analysis
of socio-political state of Burma. Even though Unocal had received an explanation
of human rights violations in Burma, as well as the risks that might occur, Unocal
continued investing into the infrastructure of placing pipe line of Yadana Project.
The violation of ethics or morals that obviously occurred related to the case of
Unocal in Burma, including:
Arief Budiono- 3 Int. Kemenkeu 1
Sukindar Ari Santoso-10 Business Ethics
- Violation of rights principle:
Human Rights of Karen people were violated by treated them as slaves, forced
them to leave their land, even reporters said Burma Government murdered and
raped them under the name of MOGE (Unocal partner owned by Burma
Government)
- Violation of justice principle:
The benefits were not evenly and equally distributed, only SLORC member and
those who lived in pipe line tracks got the benefits.
- Violation of caring principle:
The loss of basic compassion for the people of Karen by the Burmese army.

Since Unocal proceeded with the project based on the Utilitarian principle of Ethics
in which the consequence of continuing the project outweighed the social costs
involved, it was justifiable to continue. Yet, under justice perspective Unocal should
compensate and morally responsible for the injuries inflicted on the Karen people.

3. Do you agree or disagree with Unocal’s view that “engagement” rather than
“isolation” is the proper course to achieve social and political change in developing
countries with repressive governments? Explain.

In normal countries, that view is true. Yet, the options between engagement and
isolation became the questions that the global community has put forth with regards
to Burma.
Unocal had consistently chosen engagement since they believed that they could
affect better social and political change than via isolation policies. In utilitarianism,
Unocal’s preference of engagement rather than isolation, to affect changes in a
country was right.

The Unocal Yadana project can also be considered as an engagement policy.

Among the benefits derived were:
- reduced infant mortality rates from 87 per 1000 to just 13 per 1000;
- provided improving medical care, new and refurbished schools, electrical power,
and agricultural development in the pipeline region;
Arief Budiono- 3 Int. Kemenkeu 1
Sukindar Ari Santoso-10 Business Ethics
- created of employment along the pipeline region which was and remains an
extremely poor and underdeveloped region of Burma;

In summary, although the passage shows the project and the outcome is proven
done wrongly in Burma, in most of time it is better to act (engage) than remain
passive (isolated). We agree to the view that engagement is the proper course. With
the hope of better succession in the government, a policy of engagement usually
does provide better overall outcomes socially, politically, and economically in
longer period.