The Rising Cost of Labor
How foreign pressure may break the regime’s habit of forcing peasants to work for little or no pay
By Brook Larmer
NEWSWEEK INTERNATIONAL May 21 issue
The small Burmese peasant with the red-stained teeth and the fearful eyes hardly seems capable of unnerving one of the world’s most repressive military regimes.
Maung is not a terrorist, a guerrilla or even a dissident. He is something that, in this era of globalization, can be even more troublesome: he is a plaintiff in a United States court case. And his target is none other than the American energy giant Unocal, one of Burma’s biggest foreign investors.
CHEWING ON A WAD of betel nut near his hideout in rural Thailand, Maung (not his real name) recalls the abuses that accompanied the arrival of the Yadana gas pipeline, a $1 billion project financed in part by Unocal.
The trouble began in the early 1990s, he says, when an Army battalion assigned to protect the pipeline corridor set up base near his village in southern Burma. Soldiers slept in his home, stole his food and forced him to act as their mule, carrying backbreaking loads through the jungle for nothing but a bowl of uncooked rice.
One day in 1994, a white man in a sleek pickup truck came to ask for the village’s cooperation on the pipeline project. The military began forcing Maung, and all the other villagers, to work even harder, lugging supplies, building a railroad and -- on one occasion -- learing the pipeline route itself. In two years, he says, he got paid only twice, for a total of about $3.
"If there were no pipeline, my life wouldn’t have turned out like this", says Maung, who fled Burma in 1996. "My village would not have suffered", And if the pipeline had not been backed by American money, the world might not have cared. But as a plaintiff in the high-profile case against Unocal, Maung is shining a light on the most disturbing and dimly understood human-rights issue bedeviling Burma -- forced labor.
A decade ago, when the military was gunning down protesters, nullifying an opposition election victory and jailing the saintly Aung San Suu Kyi, both the regime and its opponents had more urgent problems to worry about. But the generals, panicked by an economic plunge mostly of their own doing, are slowly trying to reintroduce Burma into the world. And they are finding people like Maung -- and the energetic community of international activists behind him -- blocking the way.
The roots of forced labor in Burma are very deep, stretching back to the 13th-century Kingdom of Pagan. But the feudal practice has intensified under the current military rulers, who see themselves as 21st-century heirs to the kings. The problem is compounded by a rapidly expanding military: the Army has doubled in size over the past decade to more than 400,000 soldiers, whom the government last year admitted it could no longer afford to feed. An estimated 800,000 people in Burma (population: 52 million) are forced to work without pay, building roads, bridges, pagodas, even golf courses.
The worst abuses take place in the fractious border regions, where ragtag Army units are forced to fend for themselves, with little or no supervision. Local battalions use villagers to carry supplies, clear roads, grow crops, build railroads or construct their military bases.
"Forced labor has become a drug for these local commanders," says one foreign-aid worker in Burma. "They can’t survive without it."
At the same time, the international outrage over such practices is only deepening Burma’s debilitating isolation. In 1997, citing its frustrations with forced-labor and other human-rights abuses, Washington imposed sanctions that prohibit American companies from making new investments in Burma. The European Union has expanded its trade restrictions on the country. Last fall the United Nations’ International Labor Organization passed a resolution asking all member countries to review their relationships with Burma to ensure that they did nothing to perpetuate its system of forced labor.
Because of a combination of sanctions and arbitrary economic policies in Burma, most American corporations that did business in the country -- Motorola, Texaco, PepsiCo, among others -- pulled out their investments several years ago. Those companies that stayed -- like Unocal, and its partner, Halliburton, an oil-services supply company run, until last year, by current U.S. Vice President Richard Cheney -- argue that as with China, engaging the regime will ultimately be more productive than shunning it. Cheney, who has defended his company’s operations as being "fully in compliance with U.S. policy," has lobbied against Burma sanctions for the free-trade group USA Engage; Unocal has invested $300 million in the country since 1993.
"We do not defend this regime, we do not defend human-rights abuses," says Mike Thatcher, a spokesman for California-based Unocal. "But this is a place that has shut itself off from the world for decades. The best way to bring the country into the world community is by engaging it, not by isolating it and making it an economic basket case."
But Maung’s case shows just how difficult it is for any company to stay clean when working with Rangoon. With the guidance of human-rights lawyers, the poor Burmese peasant and 14 other plaintiffs filed a case against Unocal in 1996. They do not accuse Unocal or French joint-venture partner Total of using forced labor directly. (Maung even recalls carrying supplies for a military battalion one day when a Total employee, clearly unsettled by the practice, secretly slipped him 150 kyat, about one dollar at the time.) But the plaintiffs argue that Unocal knew Burmese soldiers were abusing their rights and still relied on them to provide security for the pipeline area.
Indeed, according to case documents, Unocal’s own consultants told the company about such abuses both before and during the construction of the Yadana pipeline.
Says Earthrights International lawyer Jed Greer: "If you hire the mafia to provide protection for you, who’s responsible if they do something bad? You are." So far the court has sided with Unocal, largely because the company never signed a written contract with the Burmese military. Says Thatcher: "We can’t be held accountable for the military any more than Starbucks in Seattle is responsible for the actions of the police protecting its store from protesters."
In his summary judgment last year, U.S. district court Judge Ronald S.W. Lew said that the company "knew that forced labor was utilized" and "benefited from the practice." But he declined to bring the case to trial because, he said, Unocal didn’t "control" the security forces or "conspire" with them to commit the abuses.
The plaintiffs’ lawyers have already filed an appeal in both state and district courts, and the landmark case -- after five years and millions of dollars -- looks to drag on for several more years. Any other companies that seek to do business in Burma will likely face similar obstacles.
A group of refugees from the Southern Shan States recently arrived in Thailand with fresh but typical tales of horror. One middle-aged Shan woman says she was forced to move, with the rest of her village, to a new site next to an Army base. When her cousin went back to retrieve their cows last year, soldiers caught him, beat him to death and took the cows. Before she escaped earlier this year, the military forced her to work most days growing crops, clearing roads or building fences at the base. "The soldiers treat us like animals," she says. "But we have to work. We have no choice"
The Burmese generals are themselves left with few viable choices. Although the regime likes to fume about not giving in to external pressure, leaders well know that the moribund economy cannot grow without outside investment. That, observers think, has provided the greatest impetus to the recent, highly secret dialogue between the government and opposition leader Suu Kyi.
"These talks," says one former government official in Rangoon, "are the generals’ own sort of forced labor." And a chore the international community would do well to encourage.