Weekly Business Roundup (May 16, 2009)

By WILLIAM BOOT

Australia Firm Quits Burma Airport Project under Sanctions Pressure

A leading Australian engineering company has cancelled a contract involving one of its subsidiaries in the development of a new airport in the Burmese capital of Nyapyidaw.

The cancellation followed news reports that named Singapore-based CPG as a designer of the airport. CPG is owned by Sydney-based Downer EDI.

The parent company announced it was severing CPG’s links with Burma’s regime-friendly Asia World conglomerate because it contravened its “zero harm environment” policy. The company said it was not aware of the subsidiary’s involvement.

It failed to mention that under Australian government sanctions it is illegal for Australian firms to do business with Asia World.

On its company Web site, Downer defined its zero harm policy as “providing direction and support for our people with respect to health, safety, sustainability, community and environmental management.” Its policies would be reviewed, the company said.

The new airport is to be built in three stages designed to eventually handle more than 10 million passengers per year, according to the airport construction industry Web site passengerterminaltoday.com.

The Website, without citing sources, said the main contractor was Asia World, whose boss, Tun Myint Naing, also known as Steven Law, is on a U.S. sanctions list because of his close connections with the country’s military leaders.

Bangladesh Appeals to UN to Arbitrate Sea Dispute with Burma

The Bangladesh government is to appeal directly to the United Nations to arbitrate over its sea territories dispute with Burma.

After the repeated failure of efforts to negotiate a settlement with the Burmese military government, the Dhaka government now says it will ask the UN Convention on the Law of the Sea in June to give a ruling.

Both countries claim a segment of the Bay of Bengal which is believed to hold oil or gas. The disputed area is not far from Burma’s Shwe gas field, known to hold at least 200 billion cubic meters of gas.

The two countries’ navies engaged in a high seas confrontation last September after South Korea’s Daewoo International began drilling in the disputed waters on the basis of a permit granted by the state Myanmar Oil and Gas Enterprise.

Bangladesh Foreign Minister Dipu Moni is expected to raise the issue during a three-day visit to Burma on May 15-17 to discuss a number of border problems between the two neighbors, Bangladesh news media said this week.

Russians Plan Nuclear Power Plant on Burma’s Doorstep

Russia has agreed to build Bangladesh a large nuclear power station with a generating capacity of up to 1,000 megawatts.

The deal followed a visit to Dhaka by a high-level Russian delegation led by the deputy director general of the state Rosatom Corporation.

Details on a timetable for building the plant, its location and cost have not been announced, but it is likely to be financed by low-credit loans from the Russians, said bdnews24, a Bangladesh Internet-based newspaper.

It’s understood that bids to build a nuclear plant have also been made to the Bangladeshis by Chinese and Korean firms.

Bangladesh suffers from acute electricity shortages.

Previous efforts to reach an agreement with Burma to build hydrodams in Burma to generate electricity back across the border have proved to be inconclusive.

Russia and Burma made a provisional agreement in 2007 to collaborate in development in Burma of what was termed a nuclear research center, but nothing more has been heard the proposal.

That agreement also involved Moscow’s Atomstroieksport, and the funding and training of at least 300 Burmese scientists and technicians to help run the research center.

Chinese Accused of Using Forced Labor on Shan Rubber Plantations

A report by a Burmese human rights group said Chinese businesses in collusion with the Burma military are forcibly relocating villagers and using forced local labor in Shan State to develop rubber plantations.

The group, Lahu National Development Organization, named the Chinese firm Yunnan Hongyu Group as coordinator of the rubber plantation activities.

The NGO said the rubber planting is being carried out under a prextext that it is working to eradicate poppy plant cultivation for opium.

But Lahu said in its report that the rubber plantations are part of a wider commercial encroachment on Shan State by Chinese from neighboring Yunnan Province, including wildlife plundering.