Daewoo Aggravating Bay of Bengal Tensions

By MATTHEW F. SMITH

The limited attention that’s been paid to the dispute between Burma and Bangladesh over maritime boundaries in the Bay of Bengal has focused on the unsuccessful diplomatic talks and strained relations between the two states. There has been less attention, however, on Daewoo International, the Korean corporation that explored for gas in the disputed waters, exacerbating the recent tensions.

The real significance of Daewoo’s involvement is not that a non-state actor is embroiled in international relations—that happens all the time. The significance is rather how Daewoo International is involved, and not just in this dispute—but in Burma generally.

On October 7, the Burmese regime sent a sizable delegation to the Bangladeshi capital, Dhaka, on an official 3-day state visit. According to sources close to senior Bangladeshi officials, Burma’s delegation, led by Vice-Senior General Maung Aye, committed to halt exploration in the disputed areas in the Bay of Bengal until the issue was resolved through future talks.

In spite of this commitment, just three weeks later on November 1, Burmese warships accompanied Daewoo International as the company proceeded to explore for natural gas in the unresolved area.

This begs the question, was Daewoo aware of what was happening?

Of course it was. This disagreement between Burma and Bangladesh over these waters has been ongoing since the early 1970s and it was the subject of official state talks just weeks prior. Any self-respecting oil company would know of such longstanding tensions, and any other potential risks to areas it has targeted for exploration. Daewoo’s use of a military escort places the company squarely in the midst of the Burmese regime’s confrontation as much as it conveys acceptance of the regime’s maritime claims.

Whether Burma’s claims to the waters are justified or not is irrelevant to Daewoo’s knowing participation in an act intended to aggravate peace between nation-states. That participation is a problem; it raises deep concerns about the company’s judgment, but more importantly about the company’s comfort in partnering with the notorious armed forces of the Burmese military government.

Such partnerships between oil and gas companies and armed forces have a sordid history around the world, not least of all Burma. Just as Daewoo certainly knew of the disputed waters they were entering, they are also well aware of the well-documented human rights abuses associated with the Yadana and Yetagun natural gas pipeline projects in the Tenasserim region. These projects resulted in widespread human rights abuses at the hands of the battalions providing security for the joint venture—abuses for which one of the companies, Unocal, paid dearly to end a high profile lawsuit, and which created a public relations nightmare for the company, based on its complicity in the abuses.

In May 2008, EarthRights International (ERI) released The Human Cost of Energy, its fifth report on the impacts of the Yadana project, detailing the continuing human rights abuses in the pipeline corridor. Seventeen years after abuses first began in connection to the project—forced labor, forced portering, killings and other abuses are ongoing.

Daewoo would do well to learn from Unocal’s costly mistakes and avoid projects that require partnership with the Burmese military. Instead, Daewoo is now preparing to advance its Shwe Gas Project in Burma to the development stage. Operating in uncontested offshore blocks, this will involve the construction of a platform in the Bay of Bengal, an onshore processing facility, and a pipeline connecting the two, terminating in Arakan State. In addition, plans are underway to transport the gas to China via an overland pipeline managed by China National Petroleum Corporation (CNPC).

We’re already seeing the impact on the ground in the heavily militarized Arakan State. Local people of Arakan suspected by the authorities of opposing the Shwe Project have faced interrogation and detention—some were forced into hiding. Villagers living near the gas operations have reportedly been forced off their land to make room for energy projects; they’ve been offered no compensation. And local fishermen were beaten for fishing in waters that became restricted due to Daewoo’s gas exploration.

These abuses and others were the subject of a recent complaint filed with the South Korean government by the Shwe Gas Movement (SGM) and nine South Korean co-complainants, including the country’s two largest labor organizations. The complaint, filed with the Korean National Contact Point of the OECD, details how Daewoo and the state-owned Korea Gas Corporation (KOGAS) are in breach of international law and several of the OECD Guidelines for Multinational Enterprises through their involvement in the Shwe Project.

While the Korean government’s determination of the complaint is pending, local people and the SGM will continue to expose what they—and Daewoo—know to be the truth: That choosing the Burmese military as your business partner is, quite simply, bad business.

Matthew F. Smith is Project Coordinator with the Burma Project at EarthRights International (ERI), Southeast Asia. ERI is a member of the Shwe Gas Movement (SGM), initiated in 2002 by the All Arakan Student and Youth Congress (AASYC).