Matthew Smith's blog

Oil-rich Southern Sudan is voting this week for its long-awaited independence from the North in a referendum that began Sunday. This comes amidst fresh allegations that the North's controversial President Omar al-Bashir stole an estimated $9 billion of his country's oil wealth, storing it in “illegal accounts.”

The source of the corruption claim is Chief Prosecutor at the International Criminal Court (ICC), Luis Moreno-Ocampo, who's been working on the ICC indictment against Bashir for war crimes, crimes against humanity, and genocide. It appeared in a 2009 U.S. cable released last month by Wikileaks, and on New Year's Day Ocampo confirmed the allegations to the New York Times, adding that Bashir is “doing business through third parties” and that the money is in “several places, outside Sudan.”

The leaked cable suggests the involvement of Lloyd's Bank in London. Lloyd's did what most banks do and promptly denied the allegations, suggesting they held no accounts in Bashir's name, which may be true but of course doesn't rule out that the revenues could be in Lloyd's bank, held through third parties or concealed by other means. International banks have a sordid history of concealing the source of funds held in their institutions, and international oversight and enforcement has been relatively ineffective despite post-9/11 efforts to track and interdict illicit financial activity.

A week after India’s Prime Minister Manmohan Singh welcomed the Burmese dictator Than Shwe on an official state visit, the world’s largest democracy has come under fire at home and abroad for its controversial foreign policy toward the military-ruled country.

Now you can add to the list of detractors one of the world’s most respected economists. At a high profile symposium on education in New Delhi yesterday, the Nobel prize-winning Indian economist Amartya Sen publicly opposed his country’s Burma strategy. “I do not agree with your policy on Burma,” Sen said, directing his criticism at the Prime Minister himself, who was in attendance. “In a democratic country like India, I can say this to the Prime Minister,” he added.  

Indian officials argue that their policy of active engagement in Burma’s controversial oil and gas sector will improve India’s energy security while also contribute to Burma’s fledgling economy. The problem is that’s simply not true.

Last week, I posted an article on the Huffington Post arguing that India’s Burma policy is misnamed, misguided, and ineffective. The policy, called “pragmatic,” is instead an extension of “political realism.” It harkens back to a colder era, if you will, and ironically works against India’s own interests while contributing to authoritarianism in Burma. This is compounded by its near complete silence on human rights.

I argue that India should engage Burma more pragmatically, and in my HuffPo article I proposed some recommendations for how New Delhi might go about doing that.

Last week, the Thai state-owned energy company PTTEP signed a deal to purchase gas from Burma's offshore Zawtika gas field, setting the stage for a third source of Burmese gas to Thailand, in addition to the controversial Yadana and Yetagun pipelines.

My colleagues and I have repeatedly documented forced labor, killings, and other abuses in the Yadana pipeline region, and shown that these abuses are directly linked to the oil companies operating the project, including PTTEP. More recently, we've also documented the massive revenues going to the Burmese regime from the project, with the junta secretly depositing up to US $4.6 billion since 1998 in offshore bank accounts.

PTTEP's new deal will require a new pipeline, expected to be operational by 2013. We've already documented the company's activity in the remote ethnic areas of the proposed pipeline in Burma, and we're concerned. What will PTTEP do different this time around? We have no evidence suggesting the company is conducting a proper human rights impact assessment, and if they've conducted an environmental impact assessment (EIA), they haven't published it, and that's a problem. Pipelines within Thailand require EIAs. Will PTTEP voluntarily extend that into Burma, according to best practice, or simply capitalize off Burma's weak regulations to save a buck?

The timing of this deal raises questions, too. The Burmese regime now has its sights set on developing nukes. Thailand is the country that stands to lose the most from the risks posed by a nuclear capable Burma, yet it's
gearing up to line the pockets of the regime with even more gas dollars. Thailand wants gas to expand its economy, but could it be so shortsighted as to dismiss the impacts of multi-billion dollar revenues in Burma?

On Monday I spoke at the Paris launch of our new report documenting the serious impacts of the French oil giant Total, the American company Chevron, and the Thai company PTTEP in military-ruled Burma. Alongside Wong Aung, Coordinator of the Shwe Gas Movement, and Michel Roy, Coordinator of Publish What You Pay-France, we launched the new EarthRights International report, entitled Energy Insecurity: How Total, Chevron, and PTTEP Contribute to Human Rights Violations, Financial Secrecy, and Nuclear Proliferation in Burma (Myanmar) (“Energy Insecurity”). The 49-page publication documents corporate complicity in killings and forced labor in Burma; it demonstrates how the oil companies have generated over US $9 billion through their pipeline in Burma, and how the companies are concealing their payments to the world’s newest nuclear threat: the Burmese military regime.

While the report and press release focused global attention on the relationship between the oil companies and the Burmese junta, the journalists in France got something different. The conversation at the well-attended press conference on Rue du Bac included ERI’s revelation that the French bank BNP Paribas was and may still be involved in the controversial Yadana gas project in Burma. While there may be nothing illegal about the mega-bank’s role in the project (that’s for the French to investigate), it is of a special moral concern, and we thought it’d be of particular interest to the socially conscious citizens of France.

Details continue to emerge around the nuclear ambitions of the ruling military junta in Burma, recently exposed in a five-year study by the Democratic Voice of Burma and former UN nuclear inspector Robert Kelley.

Last week I posted an article on the Huffington Post explaining Total and Chevron’s role in financing the world’s newest nuclear threat, including details of the companies’ obstinate refusals to publish their last 18 years of payments to the junta, despite the explicit request of a global coalition of over 160 NGOs, scholars, unions, investment firms, and world leaders. 

But beyond the role of Chevron and Total, and in an ironic twist of geopolitical madness, it would appear as though the Burmese military regime is developing its perverse weapons program in partnership with North Korea, perhaps using payments from South Korean firms.  

A UN report leaked last month claimed North Korea is exporting nuclear and ballistic missile technology to Burma using intermediaries, shell companies, and overseas criminal networks designed to circumvent UN sanctions against Pyongyang. DVB has top secret receipts from transactions between the two countries, showing payments in the millions. 

Meanwhile, South Korean firms are in the process of developing what will become the Burmese junta’s largest source of revenue, the Shwe Gas Project, involving construction of a transnational gas pipeline from western Burma to Yunnan Province, China, measuring at least twenty times longer than Total and Chevron’s notorious Yadana pipeline. The Shwe Gas Movement (SGM) values the Shwe gas at a whopping $29 billion dollars; Daewoo International, the project’s operator, would have been making payments to the junta since at least 2000, when the company first signed an exploration agreement with the Burmese regime. 

Last week, I posted an article on The Huffington Post explaining ERI’s documentation that Total and Chevron lied to their shareholders about their ability to practice complete revenue transparency in Burma (Myanmar). The companies, partners in the Yadana gas pipeline in Burma, have privately told inquiring shareholders that they’re contractually restricted from publishing what they pay to that country's dictatorship, and that their contracts with the ruling military regime are strictly confidential. Neither claim is true. ERI recently published the companies’ contracts with Burma's state-owned oil company – they’re public documents, available for the world to see – and nothing in the contracts would prevent revenue transparency.

In some ways, this fiscal brand of deceit around the companies’ notorious pipeline in Burma is novel. Their principal lies with regard to their presence in Burma have usually come in the form of exaggerated claims about their positive development impacts in the country, or in outright denials of responsibility for violent abuses committed on their watch, abuses like forced labor, killings, and torture. Never mind that the companies paid out large settlements to Burmese plaintiffs who sued Chevron’s predecessor Unocal in the US, and Total in France, for complicity in forced labor and other human rights violations along the pipeline.   

But perhaps one of Total’s more unabashed lies was when the company publicly claimed on its website, for seven years, that it had successfully “eradicated” forced labor in its “pipeline corridor” in Burma, and that the U.N.’s International Labour Organization (ILO) certified the claim. In 2009, we published nearly 200 pages of original research documenting this claim as patently untrue. Not only did Total fail to eradicate forced labor around its pipeline, but the ILO never claimed they did; the ILO actually went on record explicitly disavowing the claim.

Last week, The Huffington Post published my first post, “The UN Singles Out Big Oil in Burma, With Good Reason.” Even as we launch our own blog here at EarthRights International, we thought it was important to reach out to the millions of readers of HuffPo, as so much of our work relies on raising as much awareness as possible – of the general public, investors, policymakers, and others. This story in particular warranted an article because it marked the first time the UN Special Rapporteur on Human Rights (UNSR) in Burma named and shamed specific oil companies that are linked to serious human rights violations in the country. What’s more, it had been totally unreported in the local or international media.

In my post, I wrote:

While this is the UNSR’s first mention of the human rights impacts of foreign-led energy projects in Burma, at EarthRights International (ERI), we’ve documented for years how overland gas pipelines and other billion-dollar installations in the country are physically secured by the Tatmadaw – the Burmese Army – resulting in forced labor, killings in cold blood, rape, torture, and other abuses against local residents.  

I went on to amplify some of our urgent recommendations for South Korea’s Daewoo International, its partners from India and South Korea, and the China National Petroleum Corporation (CNPC). These companies are currently in the construction phase of a new gas pipeline to China, the Shwe pipeline, which is connected to serious human rights impacts:

Rather than move full speed ahead, Daewoo International, its partners, and CNPC should instead listen to the Shwe Gas Movement and EarthRights International: the companies should postpone the Shwe pipeline and any work on offshore installations until there’s no risk the project will contribute to human rights violations – that would be good business. In the meantime, the companies should promote public participation in development decisions; conduct transparent, inclusive third-party environmental and human rights impact assessments according to international standards; and practice complete revenue transparency, including publishing taxes, fees, royalties, bonuses, and social benefits paid to the Burmese authorities.