UNOCAL IN BURMA

Group 4:
Debby Hendra Nur Joost Antoine

UNOCAL IN BURMA
Unocal (Union Oil Company of California) Burma/Myanmar Why Burma? Background Proyek Yadana di Burma Human Rights violation by SLORC Controversy Conclusion

UNOCAL (Union Oil Company of California)

Based in California, USA Founded on 17 October 1890 at Santa Paula

Initially established to develop the oil fields around Los Angeles and California

In 1990, Unocal had operated in every aspect of the petroleum business

UNOCAL (Union Oil Company of California)

Revenue of US$ 5.103 million in 1998, increased to US$ 6.057 million in 1999
Project operations in Mexico, Alaska / Canada,

Brazil, Thailand, Indonesia, Bangladesh, Netherlands, Azerbaijan, Yamani, Congo, Myanmar (Burma), Gabon (West Africa), Vietnam, Brunei and The Philippines
On 5 April 2005, Unocal was bought by Chevron Texaco for US$18 billion.

UNOCAL (Union Oil Company of California)

Several Unocals business fields:

1. 2. 3. 4. 5.

Oil and Gas Production Geothermal resources exploration and power plan Global trade Mineral and Carbon Agricultural production

Burma/Myanmar Profile
Pemerintahan: military junta, dictatorial Population: Bamars (68%, majorities), Shans, Kayins, Chins,

Rakhinese, Indians, Chinese, others Economy:

Poor

GDP: US$400 - $600 per year Inflation: > 20%

Social: Babies morbidity rate: high Life expectancy: 53 years (men), 56 years (women) In 1998, Burmese junta military took over the power and formed

SLORC (State Law and Order Restoration Council) Junta military was accused to have the Burmese human rights violated

Why Burma?
Cheap labors' wages with relatively well educated personnel Plenty of natural gas and other resources that have not been utilized Potential entry point for beneficial international market Pemerintah Burma menciptakan iklim politik yang stabil

Background Yadana Project in Burma

Unocal began to enter Burma at around 1990s for gas and oil exploration offshore. In 1993, Unocal participated in the to mine the Yadana offshore natural gas development projects which is located in the Andaman Sea, Burma Burma "Yadana" gas fields is a 5 trillion cubic feet, state-run company, which is enough to produce natural gas for 30 years.

Background Yadana Project in Burma

In 1992, Government of Burma: Appointing a local company Myanmar Oil and Gas Enterprise (MOGE) to help the development of the Yadana project Signing a contract with Total SA, a French company that has the right to build pipelines to drain the gas from the Yadana to Thailand and trade them for Thai government. Is expected to gain a net profit between US$200 - $400 million.

Background Yadana Project in Burma

MOGE signed a contract with Total S.A MOGE: assist by providing security protection and rights of way and easements as may be requested by Total S.A: took the gas from the nature and build the pipelines to distribute it from Myanmar to Thailand

Background Yadana Project in Burma

Unocal then joined the coorporation by paying a compensation of US$8.6 billion to the Total company There were 4 investors in the project, namely Unocal, Total, Exploration and Production Public Company (Thailand) and MOGE Total: responsible for establishing rig and natural gas exploitation.

Background Yadana Project in Burma

Unocal: pipe building as long as 256 miles (216 offshore + 40 onshore) for gas distribution from Myanmar to Thailand There are pipelines part passing through the land that is inhabited by ethnic Karens, the most hostile tribe to the government.

Background Yadana Project in Burma

The government guaranteed the "security", labors and land acquisition. The government allegedly used slave labors from ethnic Karens and violence/brutality to secure the projects. Residents were evicted without any compensation. Unocal was aware of this situation.

Violations of human rights by SLORC

US State Department Country Reports On Human Rights Practices in 1995 Amnesty International Report on Burma in August 1991 The contract with SLORC to maintain "security" during the construction of the pipeline.

Karen Tribe Claims Against Unocal

On Oct 15, 1996, 15 people from the Karen tribe sued

Unocal in U.S. Court on charges they and their families have become the subject of land relocation, forced labor, torture, murder and rape in the Yadana pipeline project Court of Federal Claims under the federal Alien Tort Statute 1789 In December 2004, Unocal announced they would give compensation for the Karen and provide funds to social programs for people that live in the area of pipeline construction This statement was accepted by the court and the case was closed on 13 April 2005

Ethical Issue # 1
Did Unocal act properly?

Ethical Issue # 1
In terms of utilitarianism: Unocal acted properly, because: The realization of investment had made Burma's government and the people additional incomes, employments, technologies transfer, infrastructure developments, schools, etc. Thailand gained a stable gas supply for power plants that supported the sustainable economic growth.

Ethical Issue # 1
In terms of justice:
Unocal also acted properly because Unocal

implemented the "code of conduct" in the company, including the Yadana project. "The code of conduct treats all workers and labours on the projects with fairness and respect.

Ethical Issue # 1
In terms of human rights:

Unocal did not act properly.

Although Unocal is not responsible directly, they did not

act properly by ovelooking the human rights violation (the right for living, equal treatment, decent wages, etc) to the Burmese (the Karens ethnic).

Ethical Issue # 2
Is Unocal morally responsible for what happened to

the Karens?
Yes, Unocal would be morally responsible. Although

Unocal did not do anything against the law, the violation took place on the pipelines projects area which operated under Unocals surveillance.

Ethical Issue # 3
What should unocal do?

Get the investment out and do not involve the conflict? Keep the investment on the project and pretend that nothing happened?

Ethical Issue # 3
According to group discussion, the proper way for

unocal is to engage. The involvement from outside parties that are "more civilized" could provide a positive impact on the social and politics. For example:
The outsiders could expose the violation and injustice to

the local throughout the world. Outside parties could provide contributions to the communities through CSR.

Conclusion
Unocal did not do anything wrong directly, but by overlooking the human rights violations that happened around their jobsite, they are ethically responsible for the conflicts.

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