The Burma China Pipelines-& Korean Companies Linked to Rights Abuses

8/7/2019 The Burma China Pipelines-& Korean Companies Linked to Rights Abuses

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Situation Briefer No. 1

March 2011

The Burma-China Pipelines:Human Rights Violations, Applicable Law, and

Revenue Secrecy

This briefer provides up-to-date information on the Burma-China gas and oil pipelines.

Through rsthand accounts, leaked documents, and publicly available information,

EarthRights International analyzes corporate responsibility and accountability with

respect to the pipelines, according to international laws and standards, and Burmese law.

It discusses how to mitigate harmful impacts and improve the benets for the people of

Burma, and concludes with practical recommendations for key stakeholders.

I. IntroductionBurma (Myanmar) is undergoing

complex social and political changes.Controversial national elections wereheld in November 2010 followed by pro-

democracy opposition leader Daw AungSan Suu Kyis release from politicalimprisonment. The rst legislature in 22years was formed in January 2011, followedby high-level military shake-ups. Thereremains widespread agreement that themilitary will rule the new political system,and the authorities have privatized keysectors to the benet of a select few. Therehas been a noteworthy increase in foreigndirect investment in the countrys energy

sector, led by publicly-listed and state-owned companies from Asia, while the internationaldebate about the efcacy of western-imposed economic sanctions continues. A violentconict endures in eastern Burma and a number of ceasere agreements between theBurmese military regime and several ethnic armies hang in the balance. Nationally, thehuman rights situation has not improved.

This briefer focuses on the impacts of two of Burmas largest energy projects, ledby Chinese, South Korean, and Indian multinational corporations in partnership with thestate-owned Myanmar Oil and Gas Enterprise (MOGE), Burmese companies, and Burmesestate security forces. The projects are the Shwe Natural Gas Project and the Burma-Chinaoil transport project, collectively referred to here as the Burma-China pipelines. Thepipelines will transport gas from Burma and oil from the Middle East and Africa across

Burma to China. The massive pipelines will pass through two states, Arakan (Rakhine) andShan, and two divisions in Burma, Magway and Mandalay, over dense mountain rangesand arid plains, rivers, jungle, and villages and towns populated by ethnic Burmans andseveral ethnic nationalities. The pipelines are currently under construction and will feedindustry and consumers primarily in Yunnan and other western provinces in China, while

InsIde

I. Introduction

II. The Pipeline Route,Companies Involved andOperations To Date

III. Project Security

IV. Documented Human RightsAbuses and Internationaland Domestic LegalStandards

V. Access to Remedies

VI. Impact Assessments andDue Diligence

VII. Increasing Ethnic Tensions:Business in a Conict Zone

VIII. Revenue Production andManagement

IX. Recommendations

This briefer is the rst in a seriesfrom EarthRights Internationalfocusing on environmental,human rights and nancialaspects of natural resourcedevelopment projects in Burma.

See page 5 for full map


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producing multi-billion dollar revenues forthe Burmese regime.

This briefer provides original researchdocumenting adverse human rights impactsof the pipelines, drawing on investigationsinside Burma and leaked documentsobtained by EarthRights and its partners.EarthRights has found extensive landconscation related to the projects, and apervasive lack of meaningful consultationand consent among affected communities,along with cases of forced labor and otherserious human rights abuses in violation ofinternational and national law. EarthRightshas uncovered evidence to support claimsof corporate complicity in those abuses.In addition, companies involved havebreached key international standards andresearch shows they have failed to gain a

social license to operate in the country.New evidence suggests communities

in the project area are overwhelminglyopposed to the pipeline projects. WhileEarthRights has not found evidence directlylinking the projects to armed conict,the pipelines may increase tensions asconstruction reaches Shan State, wherethere is a possibility of renewed armedconict between the Burmese Army andspecic ethnic armed groups. The Army iscurrently forcibly recruiting and trainingvillagers in project areas to ght.

EarthRights has obtained condentialProduction Sharing Contracts detailingthe structure of multi-million dollarsigning and production bonuses that ChinaNational Petroleum Corporation (CNPC)is required to pay to MOGE ofcialsregarding its involvement in two offshoreoil and gas development projects that,

at present, are unrelated to the Burma-China pipelines. EarthRights believes theamount and structure of these payments arein-line with previously disclosed resourcedevelopment contracts in Burma, and arelikely representative of contracts signedfor the Burma-China pipelines; contractsthat remain guarded from public scrutiny.Accordingly, the operators of the Burma-China pipeline projects would have alreadymade several tranche cash payments toMOGE, totaling in the tens of millions ofdollars.1

1 Condential production sharing contracts obtained byEarthRights International. Unless otherwise noted, allcondential documents, eld reports, interviews, andletters are on le with EarthRights International.

If past practice serves as an indicator,the ruling military establishment isnot managing the massive revenuesgenerated by the Burma-China pipelinesin a responsible or transparent manner.EarthRights has previously documentedhow natural gas revenues have found theirway into private bank accounts in Singapore

and it is reasonable to assume the Burma-China pipelines will likewise contribute tosimilar corruption.2 There continues to be alack of institutional capacity, political space,and freedom among technocrats and civilsociety inside Burma to effectively advocatefor transparent and responsible resourcerevenue management. Nonetheless, newforeign investment by Asian companies inthe countrys extractive sectors is likely tocontinue at an increased pace.

This briefer recommends constructiveand targeted measures to prevent andmitigate adverse impacts of the Burma-China Pipelines and to encourage positivechange in the energy sector. Given theserious problems with energy projects inBurma, political forces in the country shouldconsider advocating for an immediatemoratorium on development in the oil andgas sector until the people of Burma canmeaningfully participate in development

decisions, until the natural resourcewealth can be managed responsibly, anduntil adequate safeguards are put in placeto mitigate serious adverse impacts ofdevelopment projects under military rule.

II. The Pipeline Route,Companies Involved andOperations to Date

The Burma-China pipelines comprise

multiple separate projects, each with distinctcontracts and ownership structures. Themajor components are a deep-water naturalgas development project and onshore gasterminal; an onshore natural gas transportpipeline from western Burma to China;and an onshore oil transport pipeline fromwestern Burma to China.

2 See Earthrights intErnational, total impact:thE human rights, EnvironmEntal, and Financial

impactsoF totaland chEvrons Yadana projEct

in militarY-rulEd Burma (mYanmar), at 43 (Sep.2009), available athttp://www.earthrights.org/node/1456; see also Matthew Smith, Stop the Lootingof Burma, thE Wall strEEt journal, at 13, Feb. 28,2011 (print edition).

FurtherreadIng

Broken Ethics, The

Norwegian Governments

Investments in Oil and

Gas Companies Operating

in Burma (Myanmar),EarthRights International(2010)

Corridor of Power, Chinas

Trans-Burma Oil and Gas

Pipelines, The Shwe GasMovement (2009)

A Governance Gap, The

Failure of the Korean

Government to hold Korean

Corporations Accountable

to the OECD Guidelines for

Multinational Enterprises

Regarding Violations

in Burma, EarthRightsInternational (2009)

Report to the South

Korean National Contact

Point Regarding DaewooInternational and Korean

Gas Corporation,EarthRights International(2008)

Supply and Command,

Natural Gas Development

in Western Burma Set to

Entrench Military Rule, TheShwe Gas Movement (2006)

The Shwe Gas Bulletin,

Arakan Oil Watch

Dodgy Deals, Shwe Gas

and Pipeline Projects -

Myanmar, BankTrack


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The Burma-China Pipelines:Human Rights Violations,

Applicable Law,

and Revenue Secrecy

EarthRights InternationalMarch 2011

Shwe Natural Gas Fields

The Shwe Natural Gas elds consistof three independent gas discoveries, theShwe, Shwe Phyu, and Mya elds (referredto collectively here as the Shwe elds).The Shwe elds are in blocks A-1 and A-3off of Burmas Arakan coast. Daewoo isthe majority owner and operator of both ofthese blocks, and is itself owned by POSCO,a South Korean conglomerate. Daewoo hasbrought in a number of minority partnersfor the gas elds, while MOGE has alsoexercised its right to take a 15% stake in theproject. The current ownership structure isshown in Fig. 1.

The consortium will also operatean offshore pipeline through the ShweOffshore Pipeline Joint Venture Company.

The consortium signed a $1.4 billioncontract with South Koreas HyundaiHeavy Industries for the construction of the80km/110km subsea pipeline, as well asmuch of the offshore natural gas productionfacilities.3 The pipeline is scheduled forcompletion by March 2013.4 The Burmesemilitary government received numerousoffers to purchase gas from the Shwe elds,but nally awarded purchasing rights toChina in June 2008 in an agreement to

export 6.5tcf of natural gas to China over30 years.

Onshore Shwe Gas Pipeline

The overland Shwe gas pipeline beginsat the offshore pipeline natural gas terminaland will extend 793km to the border withChinas Yunnan province.5 The onshoregas pipeline is scheduled for completionin March 2013 at a cost of approximately$1.04 billion. South-East Asia Pipeline

Company Limited (SEAP), a Hong Kong-registered entity created by CNPC, and theShwe Consortium members, will constructand operate the onshore pipeline6 (Fig. 2).3 Hyundai Heavy Industries Co., Ltd., Hyundai Heavy

Signs US$1.4 Billion Myanmar Gas Plant Deal, Feb.23, 2010, available athttp://english.hhi.co.kr/press/news_view.asp?idx=531.

4 ONGC Videsh, Assets, available athttp://www.ongcvidesh.com/Assets.aspx (last visited March 10,2011).

5 CNPC, Myanmar-China Oil and Gas Pipeline projectcommenced, June 4, 2010, available athttp://www.

cnpc.com.cn/en/press/newsreleases/6 Id; ONGC Videsh, Assets, available athttp://www.

ongcvidesh.com/Assets.aspx (last visited March 10,2011) (The Onshore Pipeline Company was formedand registered in Hong Kong. The shareholding ofother partners is CNPC-South-East Asia PipelineCompany Limited (SEAP), China- 50.9%, Daewoo-

Onshore Crude Oil Pipeline

For almost the entire distance acrossBurma, a crude oil pipeline will run parallelto the natural gas pipeline, along with roadand rail projects connecting Kyaukphyu

to Ruili in Yunnan Province. ChinasCNPC is building the pipeline, which willtransport oil from the Middle East andAfrica to southwestern China.7 The projectalso involves construction of a new deep-water crude unloading port and oil storagefacilities on Burmas Maday Island.8

China National Petroleum Corporation

25.04%, MOGE, Myanmar 7.365 %, GAIL andKOGAS 4.1735% each).

7 Myanmar, Thailand work for building major deepseaport, CAEXPO, Dec. 2, 2010, available athttp://eng.caexpo.org/news/t20101202_91503.html.

8 Xinhua Economic News, Sino-Myanmar CrudePipeline Memo Signed, DOWNSTREAM TODAY,June 19, 2009, available atwww.DownstreamToday.com/News/article.aspx?a_id=16796.

Daewoo

International

51%

ONGC Videsh

Ltd.

17%

MOGE

15%

KOGAS

8%

GAIL

9%

Shwe Natural Gas Fields Ownership

(Shwe Consortium)

CNPC

51%

Daewoo

International

25%

ONGC Videsh

Ltd.

8%

MOGE

8%

KOGAS

4%

GAIL

4%

Onshore Natural Gas Pipeline Ownership

Fig. 1

Fig. 2


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(CNPC) controls a 50.9% stake in theoil pipeline through its wholly ownedsubsidiary South-East Asia Crude OilPipeline Ltd. (SEACOP). Burmas state-owned MOGE controls the remaining49.1%.9 According to a December 2009agreement between CNPC and the Burmeseauthorities, SEACOP will be responsible

for the construction and operation of thepipeline, while Burmas government willprovide security for the pipeline.10 Thisinformation about the security arrangementis consistent with condential contractsbetween CNPC and MOGE obtained byEarthRights, explained more fully below.

EarthRights research indicates thecentral role of Asia World Co. Ltd (AsiaWorld) in land acquisition related to theBurma-China pipelines,and in facilitatingvisits to project areas by Korean andChinese oil executives and staff.11 AsiaWorld is a well-known Burmese companyclosely associated with the ruling militaryregime.12 The managing director is TunMyint Naing, a.k.a. Steven Law, the son

of the infamous drug lord Lo Hsing Han.The company is reportedly involved in theconstruction business, the management ofports, import-export, and retail businesses inBurma. According to the U.S. Government,Steven Law and his associates are moneylaunderers for the Burmese regime and are

9 CNPC, Rights and obligation agreement signed ofMyanmar-China Crude Pipeline, Dec. 21, 2009,available athttp://www.cnpc.com.cn/en/press/newsreleases/

10

Id.

11 See e.g. Interviews #004-2010, #005-2010 #009-2010, #014-2010, #021-2010 in Kyaukpyu, Burma.

12 See U.S. Department of the Treasury, BurmaSanctions, Steven Law Financial Network (2008),available athttp://www.treasury.gov/resource-center/sanctions/Programs/pages/burma.aspx.

involved in the international drug trade.13The company is listed on the EuropeanUnion and American sanctions lists,14 andSteven Law and his Singaporean wifeCecilia Ng are listed on the U.S. TreasuryDepartment Ofce of Foreign Asset ControlSpecically Designated Nationals (SDN)list, also referred to as the black list.15

The Pipeline Route

Project construction is well underwayin Arakan State. In Kyaukpyu, workershave already built housing barracks as wellas cleared the land and laid the foundationfor the gas terminal.16 The terminal areaalone will require numerous acres of land.17In addition, work has commenced on tworoads, on either side of Malakyun village,from the coast to the inland gas facility.

Paid workers have also started to lay thefoundation for the port in Kyaukpyu. Thevillagers in the area have heard rumors thatconstruction of the port will displace 300households, but there have been no ofcialannouncements yet.18 The port constructionarea is ofcially sealed off and villagersno longer have access to the dock theytraditionally used in the dry season. OnMaday Island, paid workers are building apier and the foundation for the oil storage

facility. Construction of two new policestations on the island is already complete.Additionally, villagers have heard that30-40 houses will be destroyed to makeway for the projects, but at the time ofwriting no one among the community hasreceived ofcial notice.19

13 Id.;see also Barry Meier, Owner of ExplodedRig is Known for Testing Rules, thE nEW York

timEs, July 7, 2010 available athttp://www.nytimes.com/2010/07/08/business/global/08ocean.

html?pagewanted=all; Thomas Maung Shwe,Swiss

Deny TransOceans Work for Drug Lords Violated

Sanctions, mizzima nEWs, July 19, 2010, availableathttp://www.mizzima.com/news/world/4126-swiss-deny-transoceans-work-for-drug-lords-violated-sanctions.html.

14 See U.S. Department of the Treasury, supra note12; European Commission External Relations,Consolidated list of persons, groups, and entities

subject to EU nancial sanctions, available athttp://ec.europa.eu/external_relations/cfsp/sanctions/consol-list_en.htm (last visited March 10, 2011).

15 U.S. Department of Treasury, Specially DesignatedNationals and Blocked Persons, Feb. 25, 2011,available athttp://www.treasury.gov/ofac/

downloads/t11sdn.pdf .16 Field Report, Feb. 2011, Kyaukpyu, Burma.17 Id.18 Interview #014-2011 in Kyaukpyu, Burma.19 Interviews #004-2010, #007-2010, #008-2010, #009-

2010 in Kyaukpyu, Burma.

South-East Asia

Crude Oil Pipeline

Ltd (CNPC-

owned)

51%

MOGE

49%

Onshore Crude Oil Pipeline Ownership

Fig. 3


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Applicable Law,

and Revenue Secrecy


Work on other construction centersis also underway farther east along thepipeline route, in Yenangyaung Township inMagway Divison and Patheingyi Townshipin Mandalay Division. In YenangyaungTownship, according to local sources, thecompany aims to complete the IrrawaddyRiver crossing to Wetmasut village beforethat area is ooded during the rainy season.20The construction has focused on the westernbank of the Irrawaddy, near Mone Creek.In addition, villagers in Wetmasut reportthat workers have started construction on apipeline facility in their area.21 EarthRightshas also received reports of pipeline-relatedconstructed in Patheingyi Township.22

20 Field Report, Feb. 2011, Magway, Burma.21 Id.22 Field Report, Nov.-Dec. 2010, Mandalay, Burma.

III. Project SecurityThe China-Burma pipeline projects have

led to increased Army, Navy, and policepresence in certain project constructionareas.23 According to EarthRights research,there are at least 28 Burmese Army battalionsstationed in the area of the Burma-Chinapipelines, from Arakan State to the Chinaborder, some of which were introducedsince pipeline project construction began.24Three battalions are stationed in KyaukpyuTownship in Arakan State alone, and twoof the battalions, LIB 542 and LIB 543,are close to the onshore gas terminal.25 In

23 Interviews #017-2010, #049-2010, #054-2010 inKyaukpyu, Burma; #051-2010 in Minbu, Burma.

24 Multiple interviews conducted by EarthRights inBurma since 2008.

25 Interviews #010-2009, #011-2009 in Kyaukpyu,Burma.


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addition, the Navy has increased its presencein Kyaukpyu, including more frequentpatrol activities around the exploration areaas well as across Maday Island.26 There aretwo new police stations on Maday Islandwhere in the past there was no permanentpolice presence.27 In addition, Burmesenaval vessels have provided escort to

Daewoo Internationals exploration vesselsin the area of Kyaukphyu.28

In Shan State, there has not been adocumented military inux specicallyrelated to the pipeline projects, as theBurmese Army presence in the state iscomplex and longstanding. However, asenior ofcial in the Kachin IndependenceArmy (KIA) recently conrmed that

the Burmese Army is building up itspresence in northern Shan State, which is

consistent with news reports.29

EarthRightsis following the situation closely to learndetails of the mandates of battalions nearthe route.

26 Interviews #017-2010, #054-2010 in Kyaukpyu,Burma; Interview #051-2010 in Minbu, Burma.

27 Interviews #017-2010, #049-2010, #054-2010 inKyaukpyu, Burma.

28 Myanmar brings warships to explore Bangladeshwaters, thE dailY star (Nov. 3, 2008) availableathttp://www.thedailystar.net/story.php?nid=61625;

Matthew Smith, Daewoo Aggravating Bay of BengalTensions, thE irraWaddY, Nov. 25, 2008.

29 Interview #080-2010 in Bangkok, Thailand; SaiZom Hseng, Cease-re Groups Wary as BurmeseArmy Buildup Continues, thE irraWaddY, Mar. 2,2011, available athttp://www.irrawaddy.org/article.php?art_id=20862.

EarthRights has obtained condential,ofcial contracts between CNPC andMOGE that show CNPC has contractedwith the Burmese regime to provide projectsecurity for oil and gas projects in Burmathat are, at present, unrelated to the Burma-China pipelines.30 However, it is believedthe security clauses in the contracts are

a standard provision in the contractsthat MOGE enters into with foreign oilcompanies. The contracts state that MOGE,which is owned by the Burmese authorities,will [provide] at cost facilities suppliesand personnel including, but not limitedto... security protection and rights of wayand easements. 31 The contracts furtherprovide that expenses incurred by theBurmese authorities for such services shallbe reimbursed in U.S. dollars computed

at the rate set by the Union of MyanmarForeign Trade Bank.32

The Burmese Armys securityoperations around development projectshave historically led to widespread humanrights violations against local communitiesand the Burma-China pipelines appear tobe no exception. EarthRights has receivedunconrmed reports that villagers in ShanState, near the pipeline route, are beingconscripted into an Army-associated militia

and trained to ght as part of the securityapparatus in the area.33 EarthRights hasreceived a report of similar civilian-militiatrainings in Arakan State.34 The 2010 reportof the U.N. Special Rapporteur on HumanRights in Burma also documents reportsof forced labor in the area of the pipelineprojects.35

CNPC appears to have acknowledgedthe security arrangement with MOGEwhen it announced in 2009 that it had

signed a Rights and Obligations Agreementwith MOGE stipulating, the Myanmargovernment shallguarantee the safety ofthe pipeline.36

30 Condential production sharing contracts, supra note1.

31 Id. at43.32 Id. at 43-4433 Interview # 081-2010 in Bangkok, Thailand.34 Interview #049 in Kyaukpyu, Burma.35 U.N. Human Rights Council, Human Rights

Situations that Require the Councils Attention,at 27, U.N. Doc. A/HRC/13/48 (March 2010)(prepared by Tomas Ojea Quintana, SpecialRapporteur), available athttp://www2.ohchr.org/english/bodies/hrcouncil/docs/13session/A-HRC-13-48.pdf.

36 CNPC, Rights and Obligations Agreement Signed

photo: Light Infrantry Division #88, near pipelineroute, Magway Division, Burma (Oct. 2009)


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Applicable Law,

and Revenue Secrecy


IV. Documented HumanRights Impacts andApplicable Internationaland Domestic LegalStandards

The Burmese regime has a well-

documented history of violence anddisregard for the rights of local communitiesin areas of natural resource development,including oil and gas exploitation.37 TheShwe gas and oil pipeline projects havealready contributed to serious violations ofinternational and Burmese law. Tensionsare likely to rise as the Shwe constructionprogresses and local people are deniedaccess to their land and livelihoods, and asthe pipelines reach areas long affected by

ethnic-related violence and conict.The rsthand documentation in this

briefer represents a snapshot of conditionsand trends along the pipeline route. Thisdocumentation is not exhaustive and readersshould assume additional instances of abuseare occurring. To date, land conscation,inadequate compensation, and a lack of free,prior, and informed consent of local peopleare the most common violations connectedto the project. Other serious abuses have

also been recorded, including harassmentand intimidation by state agents, arbitrarydetention and torture, and forced laborassociated with the projects.

of Myanmar-China Crude Pipeline, Dec. 1, 2009,available athttp://www.cnpc.com.cn/en/press/newsreleases/.

37 EarthRights Internationals publications on thisissue are available at http://www.earthrights.org/publications; see alsoarakan oil Watch,Blocking FrEEdom: a casE studYoF chinas oil

and gas invEstmEntin Burma, at 7 (Oct. 2008)available at http://www.arakanoilwatch.org/index.

php?option=com_content&view=article&id=27&

catid=43&Itemid=55; Human Rights Foundationof Monland-Burma, laid WastE: human rightsalongthE kanBaukto mYaing kalaY gas pipElinE(May 2009) available at: http://www.rehmonnya.org/data/Laid-Waste.pdf; The Shwe Gas Movement,CORRIDOR OF POWER: CHINAS TRANS-BURMA OIL AND GAS PIPELINES, at 30 (Sept.2009) available atwww.shwe.org/Attachments/CorridorofPower.pdf.

Arbitrary Detention and Torture

State-sanctioned torture38 and prolongedarbitrary detention39 violate customaryinternational law and all states, includingBurma, are obligated to refrain fromthese actions. Burmas domestic law alsooutlaws torture40 and provides protectionsagainst arbitrary detention.41 Despite theseprovisions, EarthRights has documentedmultiple instances of arbitrary detentionand torture connected to the Burma-Chinapipelines.

In Sitwe, in Arakan State, authoritiesdetained and interrogated students andothers for suspected opposition to the gasproject.42 In addition, on Maday Island,a local youth was arrested three times forshouting in the village about his opposition

to conscation of his familys land.43

In another instance in 2009, authoritiestortured and imprisoned an Arakan man forparticipating in community-level meetingsdiscussing the project. He told EarthRights:

[Military intelligence]blindfolded me for four days.For four days I couldnt seeanything. I was beaten nonstop,always being questioned, nonstopfor four days. They asked me

many things. They beat me veryhard. Sometimes theyd come inand just slap me or punch. Theywouldnt say anything, theydjust hit me. Sometimes Id be sotired because I didnt sleep, andthe intelligence would tell me Icould sleep for ve minutes. Then

38 See, e.g., Filartiga v. Pena-Irala, 630 F.2d 876, 885(2d Cir. 1980); see also Winston P. Nagan & LucieAtkins, The International Law of Torture: From

Universal Proscription to Effective Application andEnforcement, Harvard Human Rights L.J. (2001)available athttp://www.law.harvard.edu/students/orgs/hrj/iss14/nagan.shtml.

39 E.g., Restatement 3d of the Foreign Relations Law ofthe U.S. 702 (1987).

40 Burma Penal Code, Ch. XVI, 330 (providing thattorture is a crime punishable by up to seven yearsimprisonment). English translation by the BurmaLawyers Council, available athttp://www.blc-burma.org/html/Myanmar%20Penal%20Code/mpc.html.

41 Burma Code of Criminal Procedure, Ch. V, 61(providing that an arrest without a warrant requires anappearance before a judge within 24 hours). English

translation by the Burma Lawyers Councilavailable

athttp://www.blc-burma.org/html/Criminal%20Procedure%20Code/cpc_01-15.html#061.

42 Interview #032-2008 in Sittwe, Burma; ShweGas Movement interviews on le with Shwe GasMovement.

43 Interview #051-2010 in Kyaukpyu, Burma.


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theyd wake me up and keepasking me questions, or beatingme.44

This man stood trial on fabricatedcharges, had no lawyer for his defense, andwent into hiding after serving out a six-month sentence in Insein Prison.

Land Conscation and the Rightto Adequate Compensation

Both of the Burma-China pipelineshave led to widespread abusive landconscation practices in violation ofinternational human rights norms as wellas potential violation of Burmas domesticlegal obligations. Under Burmas domesticlaw, certain land types are protectedand cannot be conscated by authorities

without following procedures for faircompensation.45 In addition, the GuidingPrinciples on Internal Displacement, aninternationally recognized normativeframework for treatment of internallydisplaced people, prohibits arbitrarydisplacement, which includes displacementin cases of large-scale developmentprojects that are not justied by compellingand overriding public interests.46 Itfurther provides that states are under aparticular obligation to protect against thedisplacement of indigenous peoples . . . andother groups with a special dependency onand attachment to the land.

Burma recognized that additional landconscation protections apply to indigenousethnic minorities when it endorsed the U.N.Declaration on the Rights of IndigenousPeoples.47 The Declaration provides that,No relocation shall take place withoutthe free, prior and informed consent of the

indigenous peoples concerned and after44 Interview #053-2010 in Sittwe, Burma.45 See, e.g., The Land Acquisition Act (1894), The

Requisitioning Act (1947) cited in Scott Leckie &Ezekiel Simperingham, housing, landand propErtYrightsin Burma: thE currEnt lEgal FramEWork,at 30-32, 43, 190-209, 502-505 (2009). The law inBurma is uncertain and vague, however, and theextent and duration of the military governmentsabuse of housing, land and property rights speaksvolumes about both the legal framework and thestatus of the rule of law in Burma. Id. at 16.

46 Francis Deng & et al., Guiding Principles on Internal

Displacement presented to the United NationsOfce for the Coordination of Humanitarian Affairs,Principle 6, (Aug. 2, 1998), available athttp://www.reliefweb.int/ocha_ol/pub/idp_gp/idp.html.

47 U.N. Declaration on the Rights of IndigenousPeoples, art. 32, available atwww. un.org/esa/socdev/unpi/en/drip.html.

agreement on just and fair compensationand, where possible, with the option ofreturn. Given that indigenous Arakanand Shan communities are located on theprojected path and in the vicinity of theShwe pipelines, Burma and the pipelinecompanies should seek their free, prior,and informed consent (FPIC) before

undertaking operations that will likelylead to their resettlement and relocation.48Indigenous rights are discussed more fullybelow.

Despite the protections enshrined inBurmas domestic law and internationalnorms, the Shwe project has led tonumerous instances of land conscationwithout adequate compensation. On MadayIsland, 56 villagers lost approximately60 acres of farmland to make way for

the natural gas storage facility.49 Thevillagers have yet to receive compensation,although construction of the facility hascommenced. In addition, villagers onMaday Island received no compensationwhen construction work ooded theirpaddy elds, rendering them permanentlyunsuitable for farming.50 Another 20villagers in Kyaukpyu await compensationfor land the government has already seizedbecause it lies in the path of the pipeline

route.51

Villagers in Magway Divisionalso await compensation despite pipeline-related construction that has begun on theirproperty; some of the villagers receivedpartial payment, while others have receivednothing.52

EarthRights obtained a letter MOGEsent to local villagers in Arakan State, datedMarch 16, 2010, informing villagers theymust vacate their land in just ve days.53The letter cites a contract with Daewoo

International for the Shwe gas pipeline andtells villagers they must hand over theirland and abandon any remaining crops. Theletter says nothing about compensation.

48 Bonney Hartley, MDG Reports and IndigenousPeoples: A Desk Review, at 10 (Feb. 2008), availableathttp://www.un.org/esa/socdev/unpi/documents/MDG_Reports_and_IPs_2008.pdf (stating that theArakanese and Shan, and numerous other ethnicminorities in Burma, are considered indigenouspeople).

49 Interview #001-2011, Kyaukpyu, Burma.

50 Interviews #004-2011, #005-2011, Kyaukpyu,Burma.

51 Interview #005-2011, Kyaukpyu, Burma.52 Field Report, Feb. 2011, Magway, Burma.53 Letter from the Myanmar Oil and Gas Enterprise to

villagers, dated March 16, 2010.

No relocation shalltake place without

the free, prior and

informed consent

of the indigenous

peoples concerned

and after agreement

on just and fair

compensation and,

where possible, with

the option of return.

UN Declaration on the Rightsof Indigenous Peoples


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Applicable Law,

and Revenue Secrecy


Letter from MOGE to villagersin Arakan State

- Original Burmese -

- English Translation -

To: Id No. Village

2010 March 16

Subject: Sending Notication Letter

Related to the above-mentioned issue, the contract between you and DaewooInternational, the offshore pipeline consortium operator, who is the MOGE rep-resentative, made on March 9, 2010; Section 7 of the agreement allows [DaewooInternational] to use the land and/or you must delivery your land and whatevergrows on the land. The deadline is March 21, 2010, and on March 21, 2010, noone should remain on that land and this letter is notice.

U Myint ShweRepresentative of MOGEActing EngineerMOGEEnergy Department

Cc:

V.S.P.D (Village Peace and Development Council)Township Peace and Development Council (Kyakpyu Township)District Peace and Development Council (Kyakpyu District)

2010 March 16

Subject: Sending Notication Letter

Related to the above-mentioned issue, the contract between you and Daewoo Interna-tional, the offshore pipeline consortium operator, who is the MOGE representative, madeon March 9, 2010; Section 7 of the agreement allows [Daewoo International] to use theland and/or you must delivery your land and whatever grows on the land. The deadline isMarch 21, 2010, and on March 21, 2010, no one should remain on that land and this letteris notice.


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The government has also failed toexplain the land compensation processto affected communities and individuals.The process has fostered corruption andproteering and has consistently involvedlong delays, during which villagers waitwith no information regarding their land orcompensation. Several villagers have stated

that they have received conicting messagesfrom the Shwe companies about how longtheir land would remain conscated,54while a condential assessment preparedfor CNPC and obtained by EarthRights saysexplicitly that due to the 30-year life spanof the project, the displacement of farmersis likely to be permanent.55 Villagers havereported that well-connected individualshave seized land or changed land titles priorto compensation payouts, depriving the

actual landowner of any compensation.56

Additionally, a villager told EarthRightsthat people who knew in advance whichland would be conscated bought the landand then sold it to the authorities for the

Shwe project for a higher price.57 Finally,among the individuals interviewed byEarthRights who did receive some measureof compensation, no one had receivedcompensation for their lands in under fourmonths time, and most villagers waited for

54 E.g., Interviews #070-2010, #071-2010 in Kyaukpyu,

Burma.55 Condential assessment obtained by EarthRights

International, 2010.56 Interviews #069-2010, #073-2010, #003-2011, 006-

2011 in Kyaukpyu, Burma.57 Interview #071-2010 in Kyaukpyu, Burma.

up to a year.58

Even when villagers have receivedcompensation, it has been inadequate.Villagers report that they received less thanthe real value for their land because themeasurement did not account for all of theiracres or for the value of improvements to theland.59 In addition, Daewoo Internationaland the Burmese subcontractor Asia WorldCorporations early onshore explorationwork on Maday Island in Arakan State led tocrop damage and decreased yields for whichvillagers received no compensation.60 Nofarmers who have received compensationhave been able to secure new farmland dueto the scarcity and expense of farmland inthe vicinity.61 These villagers have livedin the area their entire lives and report thatthey have no place to relocate.62

Villagers on Maday Island who wereforced to sell their farms to the authoritiestold EarthRights they believed the residentsof the entire island will eventually haveto leave the island or will be forciblyevicted. One villager believed the Chinesecompanies will conscate the wholeisland,63 while others explained theirfamilies will be forced to leave because thecompanies will make life impossible in theproject area: Later we will lose our housebecause we cannot live here, said onefarmer who was already forced to sell hisfamilys farm. It will be very dangerouson this island. They will store the gashere. And they will destroy our village bybuilding the roads for the gas pipeline.64Another villager claimed the companiesand authorities are trying systematically toget us to ee from this island by destroyingour livelihood.65

58 E.g., Interviews #024-2010, #025-2010, #27-2010in Kyaukpyu, Burma ; Interview #021-2010 on theBangladesh-Burma border.

59 E.g., Interviews #050-2010, #069-2010, #074-2010in Kyaukpyu, Burma.

60 Interviews #004-2010, #005-2010, #007-2010, #028-2010 in Kyuakpyu, Burma.

61 E.g., Interviews #050-2010, #072-2010 in Kyaukpyu,Burma.

62 E.g., Interview #005-2010 in Kyaukpyu, Burma (Ilove my village very much, because it is our nativeland and my parents and grandparents were alsoliving in this village.); Interview #007-2010 in

Kyaukpyu, Burma (We do love this place and thisisland. Our grandparents, parents and a lot of ourrelatives were born and passed away in this place.).

63 Interview #049-2010 in Kyaukpyu, Burma.64 Interview #047-2010 in Kyaukpyu, Burma.65 Interview #52-2010 in Kyaukpyu, Burma.

photo: Construction materials on uncompensatedland in Magway Division, Burma (Dec. 2010)


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Applicable Law,

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Livelihood Impacts and

Childrens and Womens Rights

Because many local people impactedby pipeline construction have lost land uponwhich they rely for their livelihood, abusiveland conscation practices also implicaterights protected under the Convention

on the Rights of the Child (CRC) andthe Convention on the Elimination ofDiscrimination of Women (CEDAW).Burma has ratied both conventions.The CRC requires state parties to takeappropriate measures to assist familieswith providing children a standard of livingadequate for the childs physical, mental,spiritual, moral and social development,especially with regard to nutrition, clothingand housing.66 The CEDAW requiresthat state parties take into account theparticular problems faced by rural womenand that they ensure rural women the right[t]o enjoy adequate living conditions.67 Inthe absence of adequate alternative meansof subsistence, the pipeline projects aredirectly impinging on these important rightsand protections.

In numerous interviews by EarthRights,villagers have expressed their desperationin the face of land conscation because they

lack the skills or opportunity to engage inwork other than farming.68 One intervieweelamented, We will lose our livelihood. Iam now old. We cannot work in the Shwecompany. I do not want my daughters towork there. They also do not need womenworkers in the working site. How can wesurvive?69 Another farmer said, I donthave enough rice for my family. I worryfor my family. I have four children, threeare studying for their education. The eldest

daughter could not continue her educationbecause we need her help.70 None of thesevillagers are receiving any job trainingassistance from the Shwe companies or theBurmese authorities.

66 Convention on the Rights of the Child, art. 27,available athttp://www2.ohchr.org/english/law/crc.htm.

67 Convention on the Elimination of DiscriminationAgainst Women, art. 14, available athttp://www2.

ohchr.org/english/law/cedaw.htm.68 E.g., Interviews #021-2010 on the Bangladesh-Burma

border; Interview #027-2010 in Kyaukpyu, Burma;Interview #079-2010 in Yenangyaung, Burma.

69 Interview #074-2010 in Kyaukpyu, Burma.70 Interview #072-2010 in Kyaukpyu, Burma.

Forced Labor

The Burmese Armys reliance on forcedlabor is widespread and well documented,despite international and domesticprohibitions against the practice.71 Burmahas ratied the Convention ConcerningForced or Compulsory Labour, whichprovides that [t]he competent authorityshall not impose or permit the impositionof forced or compulsory labour for thebenet of private individuals, companiesor associations.72 Moreover, Burmeselaw, Order No. 1/99 directs responsiblepersons not to exercise powers...relatingto requisition of forced labour.73 TheSupplementing Order No. 1/99 makes theuse of forced labour a criminal offense inBurma.74

Despite these prohibitions, the BurmeseArmy has used forced labor in connectionwith the Shwe project. EarthRights receiveda report that soldiers in the Shwe projectconstruction area on Maday Island forcedvillagers to join the local re brigade anda local militia.75 One villager explained,A man from every house has to attend themilitia training. We dont want to attend thetraining because we cannot do our work forour family. But they will punish us if we

dont attend the training.

76

A senior representative of the Kachin

Independence Army (KIA) reported thatthe Burmese Army has begun conscriptingvillagers in the area of the KIAs 4th Brigadein Shan State and training them as an armedmilitia:

The Burmese are training 40Kachin, 20 Shan, and 10 Chinese,and that is in only one village. . . They are going to train

71 E.g., EarthRights International, supplEmEntalrEport: ForcEd laBoralongthE Yadanaand

YEtagun pipElinEs(Feb. 2002) available atwww.earthrights.org/sites/default/ les/publications/supp-to-more-of-the-same.pdf; Complaint concerning thenon-observance by Myanmar of the Forced Labour

Convention, 1930 (No. 29) available athttp://www.ilo.org/public/libdoc/ilo/P/09604/09604%281998-81-serie-B-special-suppl%29.pdf.

72 Convention Concerning Forced or CompulsoryLabour, (ILO No. 29), art. 4, available athttp://www2.ohchr.org/english/law/forcedlabour.htm.

73 The Union of Myanmar, The State Peace and

Development Council, Letter No. 04/Na Ya Ka (U)/Ma Nya, Nov. 1, 2000, available atwww.mol.gov.mm/8.Home/Home_link/spdc(Eng).pdf.

74 Id.75 Interview #049-2010 in Kyaukpyu, Burma.76 Id.

It will be very

dangerous on this

island. They will

store the gas here.

And they will destroy

our village bybuilding the roads for

the gas pipeline.

- Arakan villager forced to sellhis farm, 2010, Kyaukpyu


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villagers as soldiers all alongthe area [of the pipeline throughnorthern Shan State]. Thousandsof people they are going to trainat this kind of thing, a militiatraining. [The Burmese Army]are going to distribute arms andammunitions.77

Lastly, in 2009, EarthRights learnedthat the Burmese Army used forced labordirectly connected to a Daewoo Internationalcorporate social responsibility (CSR)project in the Dry Zone of Central Burma.In this case, the Burmese Army forced localvillagers to work on the construction of ahealth clinic that is part of Daewoos socio-economic program. The villagers who wereforced to work were not consulted about theproject.78 EarthRights has conrmed through

a third party that Daewoo was subsequentlyinformed of the forced labor.79 EarthRightsfurther conrmed that the affected villagerssought remedies through the forced laborcomplaint mechanism of the InternationalLabour Organization (ILO).80

Other Economic, Cultural, and

Social Impacts

The increased military presence onMaday Island connected to the Shweproject has led to restrictions on villagersmovements, conscation of personalproperty, and constant scrutiny of villagersactivities. Local people have reported thatthe navy command on Maday Island hasrestricted villagers travel and their accessto traditional shing grounds.81 Villagersalso report that the military forces conscategoods, such as sh and livestock, withoutproviding any payment.82 The Navy alsodemands payment from shermen to put

their boats to sea.83One villager said, Theshing is our traditional work for survival. Icant deny paying. If I do not pay the moneythey asked, they will beat me a lot and willsend me to Kyaukpyu jail.84 Another said,

77 Interview #080-2010 in Bangkok, Thailand.78 Field Report, May 2009.79 Id.80 Id.; EarthRights communications with the ILO, 2009-

2010.81 Interviews #009-2010, 011-2010, #013-2010, #054-

2010 in Kyaukpyu, Burma.82 Interview #014-2009 in Kyaukpyu, Burma

(2009).83 E.g., Interviews #048-2010, #049-2010 in Kyaukpyu,

Burma (2010).84 Interview #054-2010 on the Bangladesh-Burma

They control everything. I feel that we lostour freedom.85

There has also been an inux of sexworkers in Kyaukpyu, attendant to the oilcompanies arrival. Local villagers nd thismorally reprehensible, against their culturalnorms, and blame the oil company staff forcreating the demand for the sex work.86They are systematically destroyingour town, said one farmer, referringspecically to the companies responsibilityfor the inux of sex workers.87

Free Prior and Informed

Consent and Indigenous

Communities

Burma has over 100 indigenouspeoples, most speaking unique languages

and dialects. The pipeline projects willcross through and near the territories ofseveral of these groups, including theArakan and Shan. In numerous interviewsof Arakan people by EarthRights, they haveexpressed their inability to refuse or objectto any aspects of the project, includingorders to leave their land and homes. Ifthe companies and the Burmese authoritiesorder us to move, we have to move. Wecant deny their orders. We must follow

any order from their mouth. They are verypowerful.88

Villagers report that they were toldtheir land would be conscated for thepipeline projects, they were not givenan opportunity to refuse, and they werenot informed when they would receivepayment for their land. On Maday Island,Asia World representatives held a meetingto inform villagers that their land would beconscated and that they would be paid, but

then the company representatives left townwithout providing payment or any furtherexplanation.89 Similar meetings took placein Kyaukpyu and Magway.90 One villager

border.85 Interview #051-2010 in Kyaukpyu, Burma.86 E.g., Interview #018 in Kyaukpyu, Burma; see also

EarthRights International, BrokEn Ethics:thEnorWEgian govErnmEnts invEstmEntsin oiland

gas companiEs opEratingin Burma (mYanmar), at28 (Dec. 2010), available athttp://www.earthrights.org/publication/broken-ethics.

87 Interview #015-2010 in Kyaukpyu, Burma.88 Interview #004-2010 in Kyaukpyu, Burma (2010).89 Interviews #007-2010, #009-2010, #024-2010, #025-

2010, #026-2010, #047-2010 in Kyaukpyu, Burma.90 Interview #071-2010 in Kyaukpyu, Burma; Interview

#078-2010 in Magway, Burma.

They control

verything. I feel that

we lost our freedom.

- Arakan villager, Kyaukypu,Burma, 2010

They ordered our

25 farmers from this

village to sign that we

were in agreement

with them. . . . At last,had to sell to them.

- Arakan villager, Kyaukpyu,

Burma, 2010


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Applicable Law,

and Revenue Secrecy


explained, They ordered our 25 farmersfrom this village to sign that we were inagreement with them. . . . At last, I had tosell to them.91

Involuntary resettlement appearsimminent in Kyaukpyu and on MadayIsland in Arakan State (Rakhine). Thevillagers have heard that constructionof the Kyaukpyu port will displace 300households, and that 30-40 houses will bedestroyed on Maday, but there has beenno ofcial announcements yet.92 Furtherresettlement is likely to occur along theroute in Shan State as construction gainspace. Environmental and social impactassessments have been conducted in someareas explained more fully below butassessment teams have been prohibitedfrom conducting assessments on Maday

Island and other areas,93 and the assessmentsremain undisclosed. It remains unclearwhat, if any, actions the companies havetaken to mitigate likely impacts, includingland seizures and forced evictions.

Despite signicant adverse impacts onlocal communities and the environment,to EarthRights Internationals knowledge,the companies involved have not engagedin meaningful consultation with affectedcommunities, nor have the affectedcommunities provided Free, Prior, andInformed Consent (FPIC) on any project-related decisions, including resettlements.EarthRights has conrmed throughcondential sources that CNPC conducteda social impact assessment (SIA) for thegas pipeline.94 The SIA involved a surveythat began after construction alreadycommenced in western Burma, and it wasprimarily a needs assessment of a randomsampling of local villages in 12 townships

along the pipeline route in advance of socio-economic programs by the company.95CNPC did not request that survey teamsobtain the free, prior, and informed consentof affected villages, and the Burmeseauthorities likewise never sought to obtainvillagers consent.96

91 Interview #047-2010 in Kyaukpyu, Burma.92 Interviews #004-2010, #007-2010, #008-2010, #009-

2010, #014-2011 in Kyaukpyu, Burma.

93 Interview, Jan. 4, 2010.94 See Impact Assessments and Due Diligence, infra at

15.95 Id.96 EarthRights Interview, Jan. 4, 2010; Condential

assessment document obtained by EarthRights, 2010.

FPIC and the related principle ofMeaningful Consultation, a practicefound in the International FinancialCorporations Performance Standards andWorld Bank rules and other multi-partyindustry standards,97 reect the increasinglyaccepted principle that indigenous peoplesmust play a pivotal role in decision-making

at each stage of projects that will affecttheir lands or territories.98 These standardsplace particular emphasis on FPIC duringproject preparation to best understand thecommunities wishes and gain support forproject-related decisions from representativeinstitutions of the communities choosing.99FPIC is particularly important whenconnected with resource extraction, as it isin this situation.

Burmas failure to require pipeline

companies to meaningfully consult withlocal and indigenous people and gain theirconsent is inconsistent with the commitmentto FPIC embodied in its endorsement of theDeclaration on the Rights of IndigenousPeoples; it may also violate Burmas legalcommitments under the Convention onthe Elimination of All Forms of RacialDiscrimination (CERD), to which it is aparty.100

The Burmese government is not theonly entity with responsibility to ensurethat the rights of indigenous groups inBurma are respected. As Prof. John Ruggie,the U.N. Special Representative of theSecretary-General on Human Rights andBusiness, has written, home states should

97 See International Finance Corporation,Performance Standards on Social &

Environmental Sustainability at 19-20, 29-31,Apr. 30, 2006, available athttp://www.ifc.org/ifcext/sustainability.nsf/AttachmentsByTitle/

pol_ PerformanceStandards2006_full/$FILE/IFC+Performance+Standards.pdf; Amy K. Lehr &Gare A. Smith, implEmEntinga corporatE FrEE,prior, and inFormEd consEnt policY: BEnEFitsand

challEngEs, at 11-22 (May 2010), available atwww.foleyhoag.com/NewsCenter/Publications/eBooks/Implementing_Informed_Consent_Policy.aspx?ref=1.

98 The World Bank, Operational Manual, OP 4.10- Indigenous Peoples, available at http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/EXTPOLICIES/EXTOPMANUAL/0,,contentMDK:20553653~menuPK:64701637~pagePK:64709096~piPK:64709108~theSitePK:502184,00.html#F3; U.N.Declaration on the Rights of Indigenous Peoples, art.32, available atwww.un.org/esa/socdev/unpi/en/

drip.html.99 Id.100 See Committee on the Elimination of Racial

Discrimination, General Recommendation No. 23:Indigenous Peoples 4(d), available athttp://www.unhchr.ch/tbs/doc.nsf/0/73984290dfea022b802565160056fe1c?Opendocument.


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take steps to ensure that the companies theysupport through export promotion policiesdo adequate due diligence to avoid humanrights abuses.101 In fact, there is a strongargument that companies home stateslike South Korea and China aid and abetBurmas potential violation of the CERD byknowingly nancing the Shwe consortium

without taking adequate steps to secureindigenous groups right to FPIC.

Social License to Operate

Were happy there is gas in theground. Lets keep it there fornow.

- Ethnic Arakan resident ofArakan State, Burma102

A social license to operate exists

independently of a corporations legalobligations under the laws of the state oftheir incorporation or operation and insteadarises from the set of customary normsthat dene the expectations of corporationsand their stakeholders.103 According toJohn Ruggie, the social license explicitlyinvolves the corporate responsibility torespect human rights: Governmentsdene the scope of legal compliance,but the broader scope of the corporate

responsibility to respect human rights isalso dened by social expectationsas partof what is sometimes called a companyssocial license to operate.104

While the social license to operate lacksstandardized elements, investors and otherproject stakeholders have widely acceptedits importance as a way for companies toavoid costly obstacles or delays and asan imprimatur of responsible businesspractices. Increasingly, project stakeholders

consider whether a company has a sociallicense to operate when they evaluate a

101 John Ruggie, Protect, Respect and Remedy: aFramework for Business and Human Rights 39,available athttp://daccess-ods.un.org/access.nsf/Get?Open&DS=A/HRC/8/5&Lang=E.

102 Field Report, Aug, 2005, Arakan State, Burma.103 Larry Cata Backer, Corporate Governance and

the Social License to Operate, Law At the End ofthe Day (Blog), June 08, 2010, available athttp://lcbackerblog.blogspot.com/2010/06/corporate-governance-and-social-license.html (last visited

March 4, 2011).104 Remarks by SRSG John Ruggie, International

Institute for Conict Prevention & Resolution,Corporate Leadership Award Dinner, New York,2 October 2008 available athttp://198.170.85.29/Ruggie-speech-to-CPR-2-Oct-2008.pdf. (last visitedMarch 4, 2011).

projects risks and benets.

EarthRights has found the companiesinvolved in the Burma-China pipelineshave not gained a social license to operate.The companies have not addressed theexpectations of impacted communities andlocal sentiment is overwhelming opposedto the Burma-China Pipeline projects at thistime, with a widespread desire for projectsthat improve sustainable development ofcommunities.105 I dont want to see all thecompany men on our island. They knowonly their business. They didnt think aboutour lives and our paddy elds. I dont wantthe gas to be sold to them. If we can havethe right to use gas, we want to use it inour state,106 said one farmer. Another localfarmer added, I dont agree to sell our gasto the foreign companies but we have no

rights to tell them.107 Yet another said, Forme, I dont agree on gas selling to foreigncompanies. If its possible, we want to useit in our country. But we have no chanceto speak our opinions in our country. TheBurmese government is very powerful inour country.108

V. Access to RemediesThe rule of law and an independent

judiciary are largely absent from Burma; thecourts remain a tool of the regime to silenceand punish dissent.109 Therefore, peopleaffected by the Shwe project for example,villagers who were not compensated fortheir land or for damage to their crops,and who were beaten by security ofcersor denied access to their traditional shingareas have no place to turn to redressthese wrongs inside Burma. As one villagerin western Burma put it, We are poorfarmers. They are powerful and rich. They

can do what they want in our island. Wehave no chance to stop their actions in ourisland. Anytime they can do anything andwe have no rights except following it.110Numerous villagers repeatedly expressedsimilar sentiments to EarthRights.111

105 EarthRights interviews and eld reports (2005-2011).106 Interview #008-2010 in Kyaukpyu, Burma.107 Interview #012-2010 in Kyaukpyu, Burma.108 Interview #020-2010 on the Bangladesh-Burma

border.109 See Scott Leckie & Ezekiel Simperingham, supra

note 45 at 9.110 Interview #010-2010 in Kyaukpyu, Burma.111 See e.g. Interviews #004-2010, #005-2010, #010-

2010 in Kyaukpyu, Burma.


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At present, the ILOs forced laborcomplaint mechanism offers a non-judicial remedy for labor rights violations.However, ling complaints often posesserious risks that the Burmese authoritieswill persecute complainants, deterring theuse and usefulness of this mechanism.

The companies operating the Burma-China pipelines have an opportunity toprotect labor rights by promoting themechanism in their project areas, bypromoting the ILOs presence in Burma, byfacilitating complaints of forced labor to theILO, and by using their inuence with theBurmese authorities to protect complainantsfrom persecution by the regime. The ILOhas initiated facilitation trainings fora variety of actors in Burma, includingrepresentatives of the private sector, during

which participants learn how to facilitatelocal villagers complaints of forced laborto the ILO.

In 2008, aware of the limited remediesavailable in Burma, EarthRights and itspartners led a specic instance complaintwith the Korean National Contact Point(NCP) for the Organization for EconomicCooperation and Development (OECD)against Daewoo International and KOGASconcerning the Shwe gas project. Thecomplaint alleged that the two companieshad breached at least six OECD Guidelinesby failing to practice due diligence to preventnegative human rights and environmentalimpacts of the Shwe Project.112 TheKorean NCP, however, sided with DaewooInternational and KOGAS and dismissedthe complaint.113 EarthRights continues towork with its partners to identify potentialavenues for redress outside of Burma,including extra-territorial application of

Korea, China and Indias domestic law tothe respective Shwe pipeline companyscomplicity in abuses.

In zones of weak governance andconict, where access to remedies are

112 Earthrights intErnational Et. al, rEporttothEsouthkorEanationalcontactpointrEgarding

daEWoointErnationalandkorEagascorporation(Oct. 2009) available atwww.earthrights. org/sites/default/les/publications/OECD-Complaint10.29-ENGLISH.pdf.

113 Earthrights intErnationalandthE shWE gasmovEmEnt,a govErnancE gap: thE FailurEoFthEkorEan govErnmEnttohold korEan corporations

accountaBlEtothE oEcd guidElinEsFor

multinational EntErprisEs rEgarding violations

in Burma, at 13 (June 2009) available atwww.earthrights.org/publicatons.

not available, Professor Ruggie hasrecommended that companies like thoseparticipating in the Burma-China consortiumassume an independent responsibilityto observe internationally recognizedhuman rights.114 This independentresponsibility becomes more acute aspipeline construction proceeds through

conict-affected areas, where the numberand severity of human rights abuses islikely to increase.

VI. Impact Assessmentsand Due Diligence

Environmental and Social ImpactAssessments (EIA/SIA) of large-scalenatural resource extraction projects serveto introduce environmental and social

considerations into stakeholders decision-making regarding whether a project shouldproceed, and, in the event it proceeds,how to mitigate adverse impacts. Whenconducted according to international bestpractice, impact assessments are donebefore, during, and after project completionand involve dialogue between operatingcompanies and local communities thatmay experience adverse impacts. Inweak or repressive governance zones,

114 John Ruggie, Draft Guiding Principles for theImplementation of the United Nations Protect,Respect and Remedy Framework, at 19-20 (Nov.2011) available athttp://www.reports-and-materials.org/Ruggie-UN-draft-Guiding-Principles-22-Nov-2010.pdf.

photo: Pipeline construction near IrrawaddyRiver, Magway Division (Feb. 2011)


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impact assessments sometimes representa communitys best hope at meaningfulparticipation in development decisions thataffect their lives.

Burma has legal obligations regardingenvironmental impact assessments. Burmaratied the Convention on BiologicalDiversity, which requires that it introduceappropriate procedures requiring an EIAof its projects where there is likely to be asignicant impact on biodiversity.115 Burmahas also ratied the Agreement of theAssociation of South-East Asian Nations(ASEAN) on Conservation of Nature andNatural Resources, which provides that stateparties must require an EIA for proposalsfor any activity which may signicantlyaffect the natural environment before theproposals are adopted.116 Article 206 of the

1982 United Nations Convention on theLaw of the Sea was ratied by Burma in1996 and requires that state parties conductan EIA when planned activities under theirjurisdiction or control may cause pollutionor signicant and harmful changes to themarine environment.117

Beyond Burmas international legalobligations, impact assessments are astandard practice by corporations operatingin the energy sector. They are a minimumelement of corporate responsibility. TheOECD requires EIAs, including assessmentscovering social aspects, of companiesfrom member countries, which includesSouth Korea-based Daewoo International,KOGAS, and POSCO.118

China, South Korea, and Indiahave domestic laws requiring impactassessments for projects that will havesignicant impacts within their borders,119

115 Convention on Biological Diversity, art. 14,(June1992) availableathttp://www.cbd.int/convention/text/.

116 ASEAN Agreement on the Conservation of Natureand Natural Resources, Art. 14, available athttp://www.aseansec.org/1490.htm.

117 ThirdUnited Nations Conference on the Law ofthe Sea: Final Act, Oct. 21, 1982, art. 206,availableathttp://treaties.un.org/doc/Publication/UNTS/Volume%201833/volume-1833-A-31363-English.pdf...

118 Section V.3 of the OECD Guidelines forMultinational Enterprises requires companies locatedin or from OECD-member countries to conduct

environmental impact assessments when proposedactivities may have signicant environmental, health,or safety impacts, and where they are subject to adecision of a competent authority. OECD Guidelinesfor Multinational Enterprises, (June 200), available athttp://www.oecd.org/dataoecd/56/36/1922428.pdf.

119 Annie Donnelly, et al., a dirEctorYoF impact

but the application of these requirements tooverseas investments is less well dened.In 2009, however, Chinas Ministry ofEnvironmental Protection (MEP) and theMinistry of Commerce completed draftChinese Overseas Direct InvestmentEnvironment Protection Guidelines thatawait approval from relevant governmental

authorities.120

The draft requires thatChinese investors conduct EIAs andfollow Chinese environmental standardsif they are higher than those of the hostcountry, as well as adhere to internationalenvironmental treaties signed by China andhost countries.121 Negotiations among theconcerned ministries are still ongoing andthe nal form of these Guidelines remainsin doubt.

The Daewoo International-led

consortium has indicated it commissionedan EIA for offshore gas exploration andproduction in western Burma, althoughit has never produced this document inpublic or to local communities. In a 2008meeting with EarthRights, the Shwe GasMovement and the Korean House forInternational Solidarity (KHIS), Daewooassured EarthRights and its partners thatit had conducted an EIA and agreed toshare the document and make it public,

per international standards.122

In responseto the specic instance request ledby to the Korean NCP for the OECDGuidelines, Daewoo informed the NCPthat it had conducted an EIA, as requiredby the OECD Guidelines. The NCP thenafrmed that Daewoo had conducted anEIA despite Daewoos failure to producethe document.123 Subsequent attempts byEarthRights to obtain the EIAs conductedby Daewoo for the Shwe project have been

unsuccessful and to date there is no physicalor local testimonial evidence of an impactassessment. No villagers interviewed by

assEssmEnt guidElinEs, at 73, 74-75, 82, Intl Inst.for Environ. & Development (1998).

120 Ding Qingfen, Green norms for overseas investmentsoon, china dailY, June 9, 2010, available athttp://www.chinadaily.com.cn/cndy/2010-07/09/content_10084524.htm .

121 Id.122 EarthRights meeting with Daewoo, notes, Oct. 28,

2008, Seoul, Korea.123 Earthrights intErnational & thE shWE gas

movEmEnt, a govErnancE gap: thE FailurEoFthE

korEan govErnmEnttohold korEan corporations

accountaBlEtothE oEcd guidElinEsFor

multinational EntErprisEs rEgarding violations

in Burma, June 15, 2009, at 13, available atwww.earthrights.org/publicatons.


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EarthRights in Arakan State, MagwayDivision, or Mandalay Division claim tohave had any discursive interactions withany company working on behalf of Daewooregarding environmental impacts, nor dothey claim to have any knowledge of impactassessments.124

EarthRights has conrmed throughmultiple sources and condential documents

that CNPC commissioned and carried outa quantitative Social Impact Assessment(SIA) in portions of the pipeline route.There were reportedly 3,600 householdssurveyed in 12 townships along the pipelineroute. The houses were selected by stratiedrandom sampling, with 40 villages selectedin each township.125 This is a positive andwelcomed development.

Nevertheless, the assessment involved asurvey that was marked by methodological

aws inherent to military-ruled Burma,beyond the control of survey teams. Forexample, the Ministry of Energy had toapprove every village to be included in thesurvey; access to some villages, includingthose on Maday Island, was denied tosurvey teams. EarthRights conrmed thatareas restricted to the survey team correlatewith areas where land conscation and otherabuses had taken place in connection tothe project.126 In villages where the regime

granted access, the Burmese authorities124 EarthRights interviews in Arakan State, Burma,

2005-2011.125 EarthRights interviews with condential sources.126 Id.; EarthRights interviews, 2008-2011.

chaperoned the survey teams during theassessment process, which compromisesthe studys objectivity, response rate, andthe security of participants. It is unknownat the time of writing how many stagesare envisioned in the assessment process.A source close to the companys processclaimed the assessment teams were unawareif the assessment was envisioned as a one-off or a continuous process.127

Sources also indicate that the SIAbegan after project construction hadalready started. One document preparedas part of the assessment and obtained byEarthRights says simply there are little tono incentives for terminating the project,but the document failed to elaborate onreasons for or against the project.128 Thesefacts would indicate that the assessmentwas not intended to help stakeholdersdetermine whether the project shouldproceed, or even how it would proceed.Instead, the assessment was, according toone source, primarily a tool to understandvillagers perceptions of the companies andthe pipeline, and the ways the companiescould improve socio-economic conditions.Thus, the impact assessment was a needsassessment. While this is welcomed intodays Burma, where communities socio-economic needs are neglected by the state,it should not be confused with an impact

assessment for the pipeline.

127 EarthRights Interview, Jan. 4, 2010; EarthRightscommunications with condential source.

128 Condential assessment document obtained byEarthRights, 2010..

photo: Project signage in Gonchun Village,

Kyaukpyu Township, Arakan State (Feb. 2011)


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The documents that EarthRightsobtained and sources it consulted conrmthat the assessments did not specicallyaddress potential impacts of the BurmeseArmy in connection to the project, and theassessments did not address the pipelinespotential contribution to civil war or armedethnic conict.129 One document explicitly

recommended CNPC work directly withthe Army and Regional Commanders inaspects of potential social programs.130

Moreover, the condential SIAassessment document obtained byEarthRights cites the abovementionedquantitative survey in claims thatcommunities in the area of the projectwelcome the companys presence andsee social and economic opportunity inthe companys presence.131 This nding

contradicts information collected byEarthRights. In interviews from 2005-2011, EarthRights has not recorded a singleinterview with a local person in favor of theproject. In interviews, villagers expressedstrong and in some cases fearful oppositionto the project, with numerous rst-handtestimonials explaining abuses they havesuffered in connection to the project.132

Despite the limitations of the non-publicimpact assessments, there are redeemingqualities to the documents and informationobtained by EarthRights. One aspect ofthe assessment encourages CNPC to alertcommunities to adverse environmentalimpacts; to engage in sustained dialoguewith villagers; and to allow independentauditing of its social impact.133 Thedocument maintains CNPCs presence inBurma cannot be neutral, and specicallyinvokes human rights issues as of specialconcern, such as land conscation and

forced labor. It also recommends that CNPCrefer complaints of forced labor to theInternational Labour Organization (ILO).These are highly encouraging aspects.

Nevertheless, if impact assessmentslack transparency and are shrouded frompublic scrutiny, such as those conducted for

129 EarthRights Interview, Jan. 4, 2010; Condentialassessment document obtained by EarthRights, 2010.

130 Condential assessment document obtained byEarthRights, 2010.

131 Id.132 See Documented Human Rights Impacts and

Applicable International and Domestic LegalStandards, supra at 7.

133 Condential assessment document obtained byEarthRights, 2010.

the Burma-China pipelines, a core functionof the assessment to alert the host societyto potential impacts is diminished.Without external pressure, and with littleoversight in Burma, the companies involvedmay be less motivated to conduct adequatedue diligence and install the managementsystems and on-the-ground resources to

meaningfully mitigate negative impacts.VII. Increasing EthnicTensions: Business in aConict Zone

According to EarthRights sources, theroute of the pipelines is in the direct pathof politically contested territory in northernShan State. In that area, the route runs fromHsipaw, to Namtu, Maimaw, Maiwee, and

Namkhan.134

This crosses territory of theKachin Independence Armys (KIA) 4thBrigade, the Kachin Defense Army (KDA),and the Shan State Army-North (SSA-N).135Since early 2011, the SSA-N has dividedinto a Border Guard Force (BGF) faction,comprised of the 3rd and 7th brigades, anda non-BGF faction, comprised of the 1stBrigade.136 The BGF is a strategy advancedby the Burmese authorities to transitionceasere ethnic armed groups into borderguard forces under the direct control of theBurmese Army.137 The SSA-N 1st brigaderefused the proposal and is now a memberof the Committee for the Emergence of aFederal Union, an umbrella group of armedethnic forces calling for political dialoguetoward a federal union, and agreeing toreinforce each other militarily shouldthe Burmese Army attack any one of thegroups.138 The Committee also includesseveral other ethnic armed groups, includingthe Karen National Union and the Kachin

134 transnational institutE, nEithErWarnorpEacE;thE FuturE oF thE cEasE-FirE agrEEmEnts in

Burma (July 2009),available athttp://www.tni.org/sites/www.tni.org/les/download/ceasere.pdf;Recent updates from EarthRights sources in ShanState, including Taang Youth Organization (TSYO).

135 Id.136 Sai Zom Hseng, Cease-re Groups Wary as Burmese

Army Buildup Continues, thE irraWaddY, Mar. 2,2011, available athttp://www.irrawaddy.org/article.php?art_id=20862.

137 Condential document detailing instructions givenby Lt. General Ye Myint and other senior Burmese

Army ofcials to ethnic ceasere groups regardingthe groups transition to a border guard force underthe control of Burmese armed forces, April 28, 2009.

138 Saw Yan Naing, Ethnic Alliance Vows to Strivefor Federal Union, thE irraWaddY, Feb 21, 2011,available athttp://www.irrawaddy.org/article.php?art_id=20792.


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Independence Organization (KIO), which isthe political arm of the KIA.139

There has already been violent conictin the vicinity of the project betweenthe SSA-N and the Burmese Army, andbetween the ethnic Kokang armed groupand the Burmese Army, which in 2009 ledto an inux of over 30,000 refugees intoChina.140 Moreover, the KIA is currentlybracing for attacks from the Burmesemilitary regime.141 Decades-long ceasereagreements with several armed ethnicgroups, including the KIO, are in jeopardyof collapse. The impacts of increasedconict for local communities would besevere.

The Burmese regimes use of forcedlabor in the pipeline area in Shan State has

also contributed to ethnic tensions there.A senior representative of the KIA toldEarthRights how villagers in the pipelinearea in northern Shan State were beingtrained to ght. Now the Burmese Army istrying to train whatever ethnic nationalitiesare [in the pipeline route] in order to controlthis area. . . . The idea is that the Kachin willght against each other, and when there isno KIA movement, then those people willcontinue to safeguard this area.142

The Chinese authorities have reportedlybeen involved in a dialogue between theKIA and the Burmese regime. Chineseofcials encouraged both sides to talk whilecounseling them to exercise restraint.143When asked about attempts by the Chineseauthorities to speak to the KIA and theBurmese authorities about averting conict,however, the KIA representative wasdismissive; he expressed that the BurmeseArmy conscripting local villagers to ght

was a sign that the Burmese regime lackedregard for meaningful political dialogue.The Chinese know very well, he said,they talk rst, we say no [to the militaryregimes nal demand that the KIA

139 Id.140 BrokEn Ethics, supra note 86 at at 27.141 Dennis Gray, Myanmars ethnic minorities prepare

for war, thE Washington post, Nov. 2, 2010,available athttp://www.washingtonpost.com/wp-dyn/content/article/2010/11/02/AR2010110201037.html.

142 Interview #080-2010 in Bangkok, Thailand.143 International Crisis Group, Chinas Myanmar

Strategy: Elections, Ethnic Politics, and Economics,Sept. 21, 2010, at 4-5., available athttp://www.crisisgroup.org/~/media/Files/asia/north-east-asia/B112%20Chinas%20Myanmar%20Strategy%20%20Elections%20Ethnic%20Politics%20and%20Economics.ashx.

surrender], and then there is this [forcedmilitia] kind of thing, so theres no needto talk.144 This ofcial remained cautious,however, about commenting on what wouldhappen upon full pipeline constructionthrough the area, stating, Whatsoever Ianswer the question at this time is of nouse.145

While the conicts in Shan State arecomplicated and longstanding, and pipelineconstruction has not yet commenced there,there is little doubt that the pipelines arenow a non-neutral factor. According to aNew York Times interview, General GamShawng Gunhtang of the KIA said, Thepipeline will be a tool and an opportunityfor the [Burmese regime] to eliminate thearmed groups.146

In light of the ongoing conicts, and therisk that the pipelines could contribute togreater instability and violence, EarthRightsstrongly advises companies against movingforward with pipeline construction throughShan State at this time. If the companiesinsist on moving forward, they musttake concerted and demonstrable stepsto avoid contributing to ethnic conict.The companies are on notice of the risksassociated with this project and have anobligation to conduct their operations in aresponsible manner, including using theirunique position to inuence the actions oftheir state partners and security forces.

VIII. Revenue Productionand Management

Enormous amounts of revenueare expected to be generated from

pending natural gas sales to China

through the Shwe gas pipeline. . .

. These funds need to be includedin the Governments budget and

managed transparently with

proper checks and balances.

Toms Ojea Quintana,U.N. Special Rapporteuron the situation of humanrights in Myanmar147

144 Id.145

Id.

146 Thomas Fuller, Ethnic Groups in Myanmar WantPeace but Gird for a Fight, nEW YorktimEs, May10, 2009.

147 Toms Ojea Quintana, Progress report of the SpecialRapporteur on the situation of human rights in

Myanmar, at 16, A/HRC/16/59, Mar. 7, 2011.


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EarthRights International has obtainedcondential documents detailing thestructure of signing and production bonusesthat CNPC is contracted to pay to MOGEofcials with regard to offshore explorationblocks unrelated at present to the Burma-China pipelines. These contracts, however,include information EarthRights believes to

be common to all contracts between MOGEand foreign oil companies. Accordingly, atthis stage in the Burma-China pipelines,the companies pre-production payments toMOGE would total in the tens of millionsof dollars.148 The documents obtained byEarthRights reveal that oil companies arerequired to pay to MOGE ofcials U.S. $10million as a signing bonus, an amount thatis not recoverable from costs, as is standardpractice for other up-front expenses the

companies incur prior to production.149

This is in effect money paid by the energycompanies to operate in Burmas territory.The whereabouts and the Burmese regimesuse of the signing bonus money remainsunknown.150

EarthRights has also discovereddetails of production bonuses CNPC iscontractually obligated to pay to MOGE on agraduated basis in correlation to the amountof natural gas production. The contracts

require that the companies pay: U.S. $1million after approval of the DevelopmentPlan for a commercial Discovery of NaturalGas; U.S. $2 million when production overany consecutive 90 day period reaches 150million cubic feet per day; U.S. $3 millionwhen it reaches 300 million cubic feet perday over any consecutive 90 day period;U.S. $4 million when it reaches 600 millioncubic feet per day over any consecutive 90day period; U.S. $5 million when it reaches

750 million cubic feet per day over anyconsecutive 90 day period; and U.S. $10million when it reaches 900 million cubicfeet per day over any consecutive 90 dayperiod.151

148 Condential production sharing contracts obtained byEarthRights, 2010.

149 Id. at 31; see also Production Sharing Contract forAppraisal, Development and Production of Petroleumin the Moattama Area Between Myanma Oil andGas Enterprise and Total Myanmar Exploration and

Production, 9.4 at http://www.earthrights.org/sites/default/les/documents/1002.pdf.150 EarthRights has previously documented the Burmese

regimes mishandling of revenues from Burmas gassector. Id. supra note 2.

151 Condential production sharing contracts, supra note1 at 31-33.

Burma does not practice revenuetransparency nor require it of companiesoperating in its territory. The state recentlypassed a Special Funds law that authorizesthe military chief to access a special fundwith no oversight or accountability from therest of the military-dominated government.The law allows the military Commander-

in-Chief to use the money to safeguardnational sovereignty and protect thedisintegration of the union and explicitlyprovides that the military chief shall notbe subject to questioning, explanation, orauditing by any individual or organizationregarding use of the funds.152 The NationalLeague for Democracy and others haverecently criticized the military regime forits management of revenue in Burma.153

Revenue and contract transparency

in the extractive industries has becomethe focus of increasing internationalattention in efforts to promote responsiblemanagement of natural resource wealth.Both mandatory and voluntary initiativeshave increased greatly in the past severalyears, including the United States recentpassage of legislation requiring themajority of internationally operating oil,gas, and mining companies to disclosetheir payments to governments on an

annual and project-by-project basis.154

ForBurma, this will capture payments made byTotal, Chevron, and the Chinese NationalOffshore Oil Company (CNOOC), amongothers. The European Union155 and SouthKorea156 have proposed similar laws. TheHong Kong stock exchange also recentlybegan requiring all companies currentlylisted, and those applying for listing, to be

152 Myanmar Democracy Group Slams Military Fund,associatEd prEss, March 4, 2011, available athttp://news.yahoo.com/s/ap/20110304/ap_on_re_as/as_myanmar_opposition_1; Politicians DecryMilitary Budget, DEMOCRATIC VOICE OFBURMA, March 7, 2011, available athttp://www.dvb.no/news/politicians-decry-military-budget/14619.

153 Id.154 See Dodd-Frank Wall Street Reform and

Consumer Protection Act, 1504, available athttp://www.transparency-usa.org/documents/FinancialReformReconciliation.pdf.

155 PWYP International, New Transparency LawsCould Help Millions, says Publish What You Pay,press release, Feb. 20, 2011, available at http://www.publishwhatyoupay.org/en/resources/new-

transparency-laws-could-help-millions-says-publish-what-you-pay.

156 [Amendment to OverseasResource Development Business Act] (introducedDecember, 2010); see http://www.newjinbo.org/xe/?document_srl=938133&mid=bd_news_comment(Korean).


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transparent in payments to host countrygovernments, including taxes, royalties, andother signicant payments on a country-by-country basis.157

Additionally, the Extractive IndustriesTransparency Initiative (EITI), a voluntaryeffort involving governments and oil, gasand mining companies, is gaining tractionin its efforts to standardize a frameworkfor revenue transparency in the energyand mining sectors.158 However, voluntarytransparent resource management isunlikely under the current regime in Burma.EarthRights conrmed through sourcesengaged with Burmas Energy Minister LunThi that the Minister appears unfamiliarwith EITI and is unlikely to advance it.159Additionally, EITI validation requiresa free functioning civil society that

participates in the revenue managementprocess, which is something that evenwestern oil executives in Burmas energysector privately agree is not viable at thistime. Moreover, NGOs operating withgovernment approval in Burma cannotfocus on the management of the countrysgas wealth in any meaningful way withoutcompromising their security.160

The lack of revenue transparency inBurma underscores the importance forextractive companies to operate responsiblyand promote transparency. DespiteEarthRights and its partners privateencouragement to Daewoo to promoteEITI in Burma, the company claimed it ishard for them to raise the issue of revenuetransparency with the host government.161Daewoos Senior Vice-President ChaeMoon Rim was unconcerned abouttransparency and added, I believe theMyanmar Government will utilize all the

prots earned from this project to benet157 Revenue Watch Institute, Hong Kong: Stock

Exchange to Require Greater Transparency, May28, 2010, available athttp://www.revenuewatch.org/news/news-article/china/hong-kong-stock-exchange-require-greater-transparency.

158 Extractive Industries Transparency Initiative, www.eiti.org.

159 Communication with condential source from aninternational nancial institution, 2011.

160 EarthRights email and phone communications withthe Executive Director of a Rangoon-based NGO,2010-2011. The consensus is that most NGOs

operating legally in Burma are naturally pleasedthat other groups are focusing on issues of revenuetransparency and management, but they will not focuson it due to security concerns.

161 Internal notes from meeting with senior executivesfrom Daewoo International, Oct. 28, 2008, Seoul,Korea.

the people of Myanmar.162 Daewoo alsoclaimed that it signed a production sharingagreement that prohibited transparency inBurma, although the executives presentdid not furnish evidence to support theirclaims.163

Based on publically available andleaked production sharing contractsbetween international energy companiesand MOGE, EarthRights believes suchcondentiality requirements are absent andcompanies are free to disclose paymentinformation.164 The relevant clauses inCNPCs and Totals contracts with MOGEstipulate in identical language that thecompanies are required to to maintain instrictest secrecy and condence all dataand information purchased or acquiredfrom MOGE as well as during the course

of operations in [Burma].165 Thesecontracts say nothing of a requirementto maintain secrecy in a companys owndata regarding payments made to MOGE.Only the most creative interpretation wouldconclude companies operating in Burmaare contractually prohibited from practicingrevenue transparency. Moreover, in 2009,Total disclosed that their project contributedU.S. $254,000,000 to the Burmeseauthorities in 2008.166 The MOGE or other

state authorities have taken no known legalaction against Total; further evidence of thelegality of payment disclosures in Burma.162 Id.163 Id.164 See EarthRights International,The Yadana Pipeline,

available athttp://www.earthrights.org/campaigns/yadana-pipeline (p

The Burma China Pipelines-& Korean Companies Linked to Rights Abuses

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