(September 26, 2002) For over a decade, great debate has surrounded the question of whether the United States should try to influence the anti-democratic regime of Burma through policies of constructive engagement or through containment and isolation. A recent groundbreaking U.S. state court decision, however, seems to shift the balance toward isolating the country economically as the way of bringing it toward democracy.

On September 18, the 9th U.S. Circuit Court of Appeals ruled that the California-based oil giant UNOCAL could be sued for egregious abuses of Burmese villagers committed by government soldiers in charge of security for a pipeline construction project. The ruling overturned a previous decision in 2000 which stated that UNOCAL could not be sued unless plaintiffs provided evidence that UNOCAL actually participated in or influenced the military's conduct or that it knowingly conspired with the military to commit the abuses.

"The district court [in 2000] stated that it was necessary to show that UNOCAL had control over the military in order to sue," said Richard Hertz, senior attorney for EarthRights International, the organization that initiated the suit. "However, the court of appeals now said all we had to show was that UNOCAL gave substantial assistance to the military. And the court ruled that we had sufficiently done that.

"This is a historic ruling; it sets the standard for suing a corporation for human rights violations." The new trial is set for February.

UNOCAL's argument

UNOCAL has for years defended its practice of doing business with Burma. On its Web site, UNOCAL praises the position of constructive engagement, stating that "it is by far the more effective way to strengthen emerging economies and promote more open societies."

While UNOCAL says it does not defend the actions of the Burma government, the company states that its Yardana pipeline project will help the country "develop a vital, democratic society built on a strong economy." The Yadana project, UNOCAL claims, has brought "significant benefits in health care, education, and economic opportunity to more than 45,000 people living in the pipeline area."

However, the Burmese villagers who initiated the legal action against UNOCAL paint a far different picture. The suit claims that the gas and oil exploration and production company was partly responsible for forced labor, forced relocation, rape, torture, and murder committed against Burmese by Burma's military junta during the construction of the Yadana pipeline.

The plaintiffs also allege that UNOCAL was aware that forced labor was used in Burma before they agreed to build the pipeline, but went ahead with the project anyway. The pipeline, in fact, had been commissioned by UNOCAL and its joint venture partner, the Burmese government.

For its part, UNOCAL has consistently denied any part in the abuse of villagers and has defended the position that working in Burma and engaging in business with the ruling junta is more effective towards bringing about change than economically isolating the antidemocratic government.

Aung San Suu Kyi's position

UNOCAL's staunch defense of constructive engagement is matched by the equally strong endorsement of isolation and containment espoused by Aung San Suu Kyi, leader of the Burmese pro-democracy movement, the National League for Democracy (NLD).

Suu Kyi has consistently spearheaded efforts to halt UNOCAL's investment in Burma, claiming that profits from such business enterprises "merely go toward enriching a small, already privileged elite."

In a recent interview with the Digital Freedom Network, Suu Kyi reiterated her position. "My stance on UNOCAL has not changed since my release on May 6," said Aung San Suu Kyi. "I don't think that more open trade will benefit the people; it has to be accompanied by political changes."

In a similar vein, Suu Kyi discouraged tourists from visiting Burma in order to put economic pressure on the government to change their policies. In Suu Kyi's view, any dialogue with the government by businesses or organizations would not prove helpful to the cause of democracy. "I am against unbalanced negotiations of any kind. If organizations are willing to dialogue with the government, then they must also dialogue with the NLD," she said.

The effect on Burma

The newly granted ability for those abused in a foreign country to sue U.S.-based corporations in the U.S. will likely give pause to businesses considering investing in Burma, encouraging isolation over constructive engagement. "The decision will have an indirect effect on Myanmar," Paul Hoffman, the lead counsel in the case against UNOCAL, told DFN. "It will now make it much harder for projects to go forward."

(The military junta that seized control of Burma in 1989 changed the country's name to Myanmar in 1991. Many activists do not recognize the name change.)

Interestingly enough, the Burmese government has of late demonstrated a move toward increasing tolerance. On September 23, eighteen prisoners were freed, including 10 members of the NLD. The government also granted permission to open up offices throughout the country. Hoffman suggested that the new vulnerabiltiy of corporations in Burma will make the government even more solicitious of the favor of the free world.

"The government will feel pressured to curb human rights violations in order to get foreign currency and foreign capital or it will lose them," Hoffman said. "When a company like UNOCAL gets involved in a pipeline project like this, it has to make sure that Burma will respect human rights projects."

"Courtesy Digital Freedom Network (http://dfn.org). Material may be reproduced or redistributed for online not-for-profit use without prior written consent as long as the Digital Freedom Network is credited."