The Shwe Gas Project is a large scale natural gas project in Burma being developed by Daewoo International Ltd. of South Korea (51 percent stake), Korea Gas Corporation (KOGAS), ONGC Videsh Ltd. of India, GAIL Ltd. of India, in a joint venture with the Myanmar Oil and Gas Enterprise (MOGE). Daewoo has been exploring for gas in Burma since 2000 and discovered the Shwe gas in western Burma in the Bay of Bengal in 2004.
A book released in May 2009, Getting it Right: Making Corporate–Community Relations Work (Greenleaf Publishing) by Mary Anderson and Luc Zandvliet of CDA Collaborative Learning Project (CDA), is intended as a Corporate Social Responsibility (CSR) guide for corporate managers of multinational companies operating in poor, unstable countries. It is based on CDAs experience working primarily for extractive companies operating in the developing world, including working with the French oil giant Total on the notorious Yadana gas project in Burma. EarthRights International (ERI) is concerned this publication, along with the numerous reports CDA has published on the Yadana pipeline in Burma, have mislead investors, corporations, policymakers, and other interested parties on the actual conditions in the pipeline region. A 2009 forthcoming report by ERI, based on over 15 years of ERI’s work in the Yadana pipeline area, will expose CDA’s flawed methodology, inaccurate reporting, and the misuse of their findings by the Yadana companies in an effort to justify their continued presence in Burma.
New investment in military-ruled Burma’s oil and gas sector could actually cost a company more than to stay away from the country, and effective corporate social responsibility (CSR) programs in the sector are impossible under the current Burmese military regime: That was the evidence-based message ERI delivered to the oil industry at an industry conference in Jakarta, Indonesia on April 14-15, 2009, where ERI Project Coordinator Matthew Smith spoke by invitation.
In a March 19 Time Magazine feature-length article, “The Scramble for a Piece of Burma,” Hannah Beech reports on the impacts of oil and gas development in the ethnic territories of military-ruled Burma. The expose focuses in part on Arakan State in western Burma, where a consortium led by South Korea's Daewoo International, in partnership with the China National Petroleum Corporation (CNPC) and the Burmese regime, are developing the Shwe Gas Project, Burma's largest ever natural resource extraction project, intended to transport gas to China via an overland pipeline. The article notes that Shwe Pipeline to China will "likely result in extensive village relocations and dissidents in ethnic Arakan State are currently being rounded up by the authorities and disappeared."
When asked what advice he would give to private businesses invested in Burma’s (Myanmar’s) energy sector, the UN Secretary General Ban Ki-moon firmly stated that "they should try to use their cooperation or their relationship to impress upon the Myanmar authorities so that they can commit to their democratization process, and also humanitarian and promotion of human rights..." ERI is heartened that the Secretary General recognizes that corporations choosing to operate in Burma must play a positive role. However, ERI continues to document the negative environmental and social impacts of foreign investments in the country’s oil and gas sector, and questions the current commitment of corporations in this sector to influence positive change in the country.
ERI is particularly concerned about South Korea’s Daewoo International, the operator of a natural gas project set to carry gas from the Bay of Bengal to China through politically and environmentally sensitive regions in Burma. Abuses connected to this project - known as Shwe, meaning “gold” in Burmese - have begun and were documented in a recent Organization for Economic Cooperation and Development (OECD) complaint filed with the Government of South Korea by ERI and the Shwe Gas Movement (SGM). If the project moves ahead, ERI believes that widespread abuses in the project area are unavoidable, including forced labor, forced relocation, and other abuses perpetrated by the Burmese military on behalf of Daewoo and other companies involved in the project.
Moreover, Daewoo International was recently at the center of a maritime border dispute in the Bay of Bengal between Burma and Bangladesh, exploring for natural gas in disputed waters under the cover of Burmese warships. The company participated in activities intended by the Burmese authorities to exacerbate longstanding differences between the two countries; an act inconsistent with Ban Ki-moon’s call to influence positive change.
Like Daewoo, the US oil company Chevron and the French oil company Total are also failing Ban Ki-moon’s call to use their power and influence to facilitate positive changes in Burma. The companies continue to operate a natural gas pipeline that has been associated with longstanding, widespread human rights abuses in the country’s Tenasserim region. Called Yadana, meaning “treasure” in Burmese, the project officially began in the mid-1990s and since its inception has led directly to human rights abuses by the military – abuses continue today. The project has also financed repression as the project is the single largest source of revenue for the military regime (an estimated US$ 969 million to the junta last year alone, according to ERI).
Since 1996, ERI has researched and published five advocacy reports detailing the suffering of local people and the human rights abuses committed on behalf of the companies’ interests; most recently in the ERI report The Human Cost of Energy: Chevron’s Continuing Role in Financing Oppression and Profiting from Human Rights Abuses in Military-Ruled Burma (Myanmar) (April 2008). The report details how human rights impacts directly connected to the project continue to date, such as forced labor, rape, and killings committed by pipeline security battalions. The companies are aware of these abuses, yet they continue unabated – Chevron, for its part, faces significant legal liability in US Courts for these abuses. The companies continue to deny any wrongdoing, and argue they are benefiting the people of Burma.
Chevron and Total should heed the Secretary General’s call and use their influence to effect positive change in Burma. The companies should stop relying on the Burmese military for pipeline security, publish all payments made to the Burmese regime, and use their financial resources to implement a sustainable socio-economic program in their project area.
Major construction on Daewoo International’s project has not yet begun in earnest – the company should recognize that the best way to heed the Secretary General’s call is to postpone the Shwe Project until local people can be included in development decisions, and until the project can proceed without negative human rights impacts. In the mean time, the company should publish all payments made to the Burmese regime.
Read the full transcript of Ban Ki Moon's interview here.
- Bloomberg News - "Daewoo-Led Group May Conclude Myanmar Gas Agreement with CNPC"
October 30, 2008, Seoul, South Korea, Chiang Mai, Thailand, and Washington, D.C. - EarthRights International (ERI) filed a complaint yesterday in Seoul to the South Korean National Contact Point (NCP), on behalf of the Shwe Gas Movement (SGM) and nine Korea-based organizations, alleging Daewoo International and the Korea Gas Corporation (KOGAS) are in breach of the OECD Guidelines for Multinational Enterprises related to their involvement in a large-scale natural gas development project in military-ruled Burma. Co-complainants include Korea's two largest labor organizations, the Korean Confederation of Trade Unions (KCTU) and Federations of Korean Trade Unions (FKTU).
EarthRights International claims in the complaint that human rights abuses have been perpetrated against local people opposing Daewoo’s Shwe Gas Project, and that the company’s plans to construct a cross-country, transnational natural gas pipeline to China poses an unreasonably high risk of more serious and widespread human rights and environmental impacts. Daewoo has been in partnership with the Burmese regime since 2000. The pipeline is planned to travel from the Bay of Bengal through western Burma to Kunming, China.
“We’re confident the Government of South Korea will recognize the urgency of this complaint and respond with their commitment to human rights, international law, and to upholding the OECD Guidelines,” said ERI Project Coordinator Matthew Smith. “This is an opportunity for the Government to stop Korean complicity in abuses happening now and to prevent more widespread and severe abuses from happening in the future.”
The complaint calls on the companies and the Korean government to postpone the project. It details allegations that Daewoo International and KOGAS – a state-controlled firm - are currently and potentially in breach of at least six OECD Guidelines by failing to respect human rights, contributing to forced labour, failing to promote sustainable development, failing to disclose information about the project, failing to consult with local populations, and by failing to conduct an Environmental Impact Assessment (EIA) according to international standards.
"Local people in Burma have been detained and forced into hiding for opposing this project and for exercising their basic human rights - Daewoo needs to stop this project," said Wong Aung, Coordinator of the Shwe Gas Movement, a coalition of organizations representing people affected by the Shwe Gas Project. "The people of Arakan State deserve nothing less than the freedom to genuinely participate in decisions about the use of their natural resources."
Daewoo International is the operator of the Shwe Project, with a 51 percent stake. KOGAS holds an 8.5 percent stake; other consortium members include two Indian state-controlled firms and the state-owned Myanmar Oil and Gas Enterprise (MOGE). Daewoo discovered the offshore Shwe gas deposits in 2004. In agreement with China National Petroleum Corporation (CNPC), Daewoo and KOGAS are preparing to transport the gas to Kunming, China by constructing what will be one of Asia’s longest natural gas pipelines. Previous natural gas pipelines in Burma were linked to abuses such as forced labor, forced relocation, rape, torture, and killings and led to high profile legal settlements with people from affected communities.
In related news, the British NCP recently found the British mining company Afrimex in violation of the OECD Guidelines related to minerals mining in the Democratic Republic of Congo (DRC). The NCP found that the company did not satisfy its “due diligence” requirements to ensure compliance with national laws of the host country or to manage the risk of negative human rights impacts.
In "Energy Security: Security for Whom?," a paper published in the 11th volume of the Yale Human Rights & Development Law Journal, ERI’s Matthew Smith and Naing Htoo detail the direct and indirect human rights violations resulting from the development of military-ruled Burma’s vast natural gas resources and the complicity of multinational corporate actors. These abuses are ongoing and there is an unreasonably high risk they will increase as more gas projects are developed. They argue that the energy security strategies of China, Thailand, and India—and by association, the national oil corporations under those governments—relying on Burmese resources have paid dangerously inadequate attention to the protection of human rights. The paper considers past and present human rights abuses connected to the Yadana natural gas project, developed by a consortium complicit multinational actors and goes on to detail the threat of future human rights abuses in connection to the country’s largest offshore gas deposits, the Shwe pipeline project.
Last week, ERI's Burma Project made a presentation at Chiang Mai University's public forum discussing the fallout from Cyclone Nargis. Project Coordinator for Pipelines & Mining, Matthew Smith, introduced the environmental and social impacts of Thai energy investments in Burma, detailing Burma’s trade and investment figures attributed to Thai involvement, and focusing specifically on the impacts of investments made by the Thai oil company PTTEP.
