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September 28, 2012

As Burma Sanctions Ease, Human Rights Advocates Urge Caution
    by Robert Kropp

Shareowner advocate Simon Billenness is preparing a draft of guidelines for corporations seeking to do business in Burma, and Nobel Peace Prize recipient Daw Aung San Suu Kyi urges corporate transparency to ensure that human rights are honored.

SocialFunds.com -- In a meeting at the United Nations this week, Secretary of State Hillary Clinton told President Thein Sein of Burma that the US will ease its ban of imports from the Southeast Asian nation, in recognition of reforms that have led to the release of hundreds of political prisoners and the opening of the electoral process to opposition parties such as the one led by Nobel Peace Prize recipient Daw Aung San Suu Kyi.

Visit the
Prospectus Ordering CenterPrevious actions by the US in response to Burma's liberalization allow for investment by US companies, and several corporations have indicated that they intend to establish business operations there. In doing so, the companies will join Chevron, which has operated in Burma for many years as a partner in the Yadana Gas Project, described by EarthRights International as "one of the world’s most controversial natural gas development projects" because of the serious human rights abuses committed by security forces.

Chevron has also strongly resisted calls for transparency in its payments to the Burmese government, which under the former military regime were regularly funneled into the accounts of military officers and their cronies.

Investors have done their part in pressuring Chevron to account for its conduct in Burma, filing shareowner resolutions with the company this year that address such issues as country selection guidelines. The resolution received the support of more than 25% of the shares cast.

Addressing the likelihood of investment by US companies in Burma, a recent New York Times editorial advised companies to "adopt stringent rules against the use of forced labor and other human rights abuses, as Amnesty International has recommended."

The guidelines referred to by The Times were co-authored by Simon Billenness, a shareowner activist with the Unitarian Universalist Association who has been actively promoting the cause of human rights in Burma for 20 years. Billenness also serves on the boards of Amnesty International and the US Campaign for Burma.

In a conversation with SocialFunds.com, Billenness referred to a statement on foreign investment in Burma made by Daw Aung San Suu Kyi at an event hosted last week by Amnesty International. She said, "We want to make sure that businesses going to Burma are transparent," and called for "investment that is aimed at meeting the needs of our people in a way that promotes democratic values and human rights."

In addition to co-authoring the advice provided by Amnesty International, Billenness is currently engaged in authoring what he described as "a fleshed-out" draft of guidelines for corporate investment in Burma. "These benchmarks include both reporting recommendations and performance recommendations," he said.

The draft report addresses the need for robust corporate policies in a number of areas, including due diligence, revenue transparency, security and human rights, labor rights, community rights and relations, local business partners, and freedom of information. It stresses also that corporations operating in Burma should report on an ongoing basis. "After decades of military repression, media and civil society in Burma is under-developed but growing, albeit from a very low baseline," it states. "Corporations need to provide reports to the public - and their own shareholders – on the challenges of operating in Burma and how the corporation is managing those risks."

"A number of the asks are probably more relevant to extractives, because of the issues around communities," Billenness said in response to a question about the growing number of foreign corporations indicating interest in doing business in Burma. "But they're also relevant to companies that are building new industrial zones. Also relevant to all companies is properly screening their business partners to make sure they're not doing business with companies that are partly owned by the military, for instance."

"The Union of Myanmar Economic Holdings is a company that is 60% owned by military officers," Billenness pointed out, "and 40% owned by the Director of Procurement for the Burmese army."

"Companies have to do serious due diligence on who their business partners actually are," Billenness continued. Perhaps referring to an ill-fated partnership between Pepsi and a vocal opponent of democratization in Burma in the 1990s, the draft report warns, "Many foreign corporations have suffered damage to their reputation and brands from connection to human rights abuses and business links to military-connected companies." Before international sanctions were imposed against Burma's military regime in 1997, Pepsi encountered widespread boycotts of its products because of its presence there.

At the time, Daw Aung San Suu Kyi said, "Companies such as Pepsi prolong the agony of my country."

"One of the things we're starting to do, as companies move into Burma, is pull together shareholder dialogue groups for as many of these companies as we can get," Billenness said. He said it was especially important for companies to observe the core standards of the International Labor Organization around such issues as child labor and forced labor, as well as the right to organize unions and engage in collective bargaining.

Despite the recent reforms, Billenness pointed out that more work yet needs to be done by the Burmese government to confirm its commitment to the rule of law. "The test for the Burmese regime is in three areas," he said. "Is the regime going to release unconditionally all prisoners of conscience?" Also, he continued, the government must commit to free and fair elections in 2015, and reach comprehensive peace agreements with the country's ethnic regions.

"We have seen progress," Billenness observed. "There have been hundreds of prisoners of conscience released, and we've seen numerous peace negotiations and ceasefires in ethnic regions." Also, the parliamentary elections of last year resulted in Daw Aung San Suu Kyi's formerly outlawed political party gain many seats.

"I am cautiously optimistic," Billenness concluded.

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