56289202-unocal

8/2/2019 56289202-unocal

http://slidepdf.com/reader/full/56289202-unocal 1/27

UNOCAL IN BURMA Group 4:

Debby Hendra

Nur

Joost

Antoine

8/2/2019 56289202-unocal


UNOCAL IN BURMA Unocal (Union Oil Company of California)

Burma/Myanmar

Why Burma?

Background – Proyek Yadana di Burma

Human Rights violation by SLORC

Controversy

Conclusion

8/2/2019 56289202-unocal


UNOCAL (Union Oil Company of

California)

Based in California, USA

Founded on 17 October 1890 at Santa Paula

Initially established to develop the oil fields aroundLos Angeles and California

In 1990, Unocal had operated in every aspect of thepetroleum business

8/2/2019 56289202-unocal



California) Revenue of US$ 5.103 million in 1998, increased to US$

6.057 million in 1999

Project operations in Mexico, Alaska / Canada,Brazil, Thailand, Indonesia, Bangladesh,Netherlands, Azerbaijan, Yamani, Congo,Myanmar (Burma), Gabon (West Africa), Vietnam,

Brunei and The Philippines On 5 April 2005, Unocal was bought by Chevron

Texaco for US$18 billion.

8/2/2019 56289202-unocal



California) Several Unocal’s business fields:

1. Oil and Gas Production

2. Geothermal resources exploration and power plan3. Global trade

4. Mineral and Carbon

5. Agricultural production

8/2/2019 56289202-unocal


Burma/Myanmar Profile

Pemerintahan: military junta, dictatorial Population: Bamars (68%, majorities), Shans, Kayins, Chins,

Rakhinese, Indians, Chinese, others Economy:

Poor

GDP: US$400 - $600 per year Inflation: > 20%

Social:

Babies morbidity rate: high Life expectancy: 53 years (men), 56 years (women)

In 1998, Burmese junta military took over the power and formedSLORC (State Law and Order Restoration Council)

Junta military was accused to have the Burmese human rights violated

8/2/2019 56289202-unocal


Why Burma? Cheap labors' wages with relatively well educated

personnel

Plenty of natural gas and other resources that have notbeen utilized

Potential entry point for beneficial internationalmarket

Pemerintah Burma menciptakan iklim politik yang stabil

8/2/2019 56289202-unocal


Background – Yadana Project in

Burma Unocal began to enter Burma at around 1990s for gas and

oil exploration offshore.

In 1993, Unocal participated in the to mine the Yadanaoffshore natural gas development projects which is locatedin the Andaman Sea, Burma

Burma "Yadana" gas fields is a 5 trillion cubic feet, state-runcompany, which is enough to produce natural gas for 30

years.

8/2/2019 56289202-unocal



BurmaIn 1992, Government of Burma:

Appointing a local company Myanmar Oil and Gas

Enterprise (MOGE) to help the development of the Yadana project

Signing a contract with Total SA, a French company that has the right to build pipelines to drain the gas

from the Yadana to Thailand and trade them for Thaigovernment.

Is expected to gain a net profit between US$200 - $400million.

8/2/2019 56289202-unocal



Burma MOGE signed a contract with Total S.A

MOGE: “assist by providing security protection and

rights of way and easements as may be requested by” Total S.A: “took the gas” from the nature and build the

pipelines to distribute it from Myanmar to Thailand

8/2/2019 56289202-unocal



Burma Unocal then joined the coorporation by paying a

compensation of US$8.6 billion to the Total company

There were 4 investors in the project, namely Unocal,Total, Exploration and Production Public Company (Thailand) and MOGE

Total: responsible for establishing rig and natural gas

exploitation.

8/2/2019 56289202-unocal



Burma Unocal: pipe building as long as 256 miles (216

offshore + 40 onshore) for gas distribution fromMyanmar to Thailand

There are pipelines’ part passing through the land thatis inhabited by ethnic Karens, the most hostile tribe tothe government.

8/2/2019 56289202-unocal



Burma The government guaranteed the "security", labors and

land acquisition.

The government allegedly used slave labors fromethnic Karens and violence/brutality to secure theprojects.

Residents were evicted without any compensation.

Unocal was aware of this situation.

8/2/2019 56289202-unocal


8/2/2019 56289202-unocal


Violations of human rights by

SLORC • US State Department Country Reports On Human

Rights Practices in 1995

• Amnesty International Report on Burma in August 1991

• The contract with SLORC to maintain "security" during theconstruction of the pipeline.

8/2/2019 56289202-unocal


8/2/2019 56289202-unocal


8/2/2019 56289202-unocal


Karen Tribe Claims Against Unocal

•

On Oct 15, 1996, 15 people from the Karen tribe suedUnocal in U.S. Court on charges they and their familieshave become the subject of land relocation, forced labor,torture, murder and rape in the Yadana pipeline project

• Court of Federal Claims under the federal Alien Tort

Statute 1789• In December 2004, Unocal announced they would give

compensation for the Karen and provide funds to socialprograms for people that live in the area of pipelineconstruction

• This statement was accepted by the court and the case wasclosed on 13 April 2005

8/2/2019 56289202-unocal


Ethical Issue # 1• Did Unocal act properly?

8/2/2019 56289202-unocal


Ethical Issue # 1 In terms of utilitarianism:

Unocal acted properly, because:

The realization of investment had made Burma'sgovernment and the people additional incomes,employments, technologies transfer, infrastructuredevelopments, schools, etc.

Thailand gained a stable gas supply for power plants thatsupported the sustainable economic growth.

8/2/2019 56289202-unocal


Ethical Issue # 1 In terms of justice:

Unocal also acted properly because Unocalimplemented the "code of conduct" in the company,including the Yadana project. "The code of conduct”treats all workers and labours on the projects withfairness and respect.

8/2/2019 56289202-unocal


Ethical Issue # 1 In terms of human rights:

Unocal did not act properly.

Although Unocal is not responsible directly, they did notact properly by ovelooking the human rights violation(the right for living, equal treatment, decent wages, etc)to the Burmese (the Karens ethnic).

8/2/2019 56289202-unocal


Ethical Issue # 2• Is Unocal morally responsible for what happened to

the Karens?

Yes, Unocal would be morally responsible. AlthoughUnocal did not do anything against the law, the violationtook place on the pipelines projects area which operatedunder Unocal’s surveillance.

8/2/2019 56289202-unocal


Ethical Issue # 3• What should unocal do?

Get the investment out and do not involve the conflict? Keep the investment on the project and pretend that nothing

happened?

8/2/2019 56289202-unocal


Ethical Issue # 3 According to group discussion, the proper way for

unocal is to engage. The involvement from outsideparties that are "more civilized" could provide a

positive impact on the social and politics. For example: The outsiders could expose the violation and injustice to

the local throughout the world.

Outside parties could provide contributions to thecommunities through CSR.

8/2/2019 56289202-unocal


ConclusionUnocal did not do anything wrong directly,but by overlooking the human rights

violations that happened around their jobsite, they are ethically responsible for theconflicts.

8/2/2019 56289202-unocal


THANK YOU

Documents

56289202-unocal