BurmaNet News: March 31 2003

[editor at burmanet.org]

March 31 2003 Issue #2205

INSIDE BURMA
Irrawaddy:  Deadline Closes for Bank Loans
DVB: Burmese ethnic groups discuss cooperation, maintenance of cease-fire

MONEY
Bangkok Post:  Thailand Plans Special Economic Zones, Promotion of
Cross-Border Trade
AFP:  Second national airline for Myanmar to launch this year: report
AP: New Jersey firm hopes to help rebuild Iraq

DRUGS
Bangkok Post:  Red Wa gearing up for big drugs push into Thailand
AFP:  "Yaa baa", the drug driving Thais crazy

REGIONAL
Deutsche Presse-Agentur:  Rescue efforts planned for German kidnapped 8
days ago in India

INTERNATIONAL
Moscow Times:  Russia Creates Own Financial Blacklist
LA Times: Unocal May Be Tried on Abuses, State Court Rules
FT:  Legal case for doing the right thing

EDITORIALS
Nation:  Burma's political dialogue: stalled yet again

STATEMENTS
BCN:  International Campaign against Austrian Airlines/Lauda Air


INSIDE BURMA

The Irrawaddy   March 31, 2003
Deadline Closes for Bank Loans
By Naw Seng

March 31, 2003—The first installment of bank loan repayments is due today,
with several of Burma’s troubled private banks urging clients to repay
their debts as soon as possible. Most banks gave their customers until
today to repay at least 50 percent of what they owe, while Kanbawza Bank
went a little easier on its customers calling for only 30 percent.

An official from the Asia Wealth Bank, Burma’s largest bank, called for
customers to repay 50 percent of their outstanding debts today and warned
that the bank will release instructions for customers who could not meet
the deadline on the weekend. At this stage, however, officials would not
elaborate on details.

Today’s developments come after Secretary-One Gen Khin Nyunt told
Saturday’s annual meeting of Burma’s Federation of Chambers of Commerce
and Industry, that businesses with loans were to repay their debts
quickly. At the same time, Khin Nyunt tried to reassure people at the
meeting that the situation in the finance sector was improving.

An official from the Kanbawza Bank said customers were being forced to
repay their loans today because banks have their own responsibilities to
provide government authorities with details on how the debt collection is
progressing.

"We want our customers to keep in contact with the bank as much as
possible," she said. The government’s plan to recall all debts from
private banking clients is set to conclude at the end of May.

Burma’s bank crisis began last February when a wave of panic caused
worried investors to rush to banks and demand their money. The panic
followed the collapse of about a dozen private service companies, or
informal financial organizations, which offered higher rates of interests
for investors. Rumors spread that the private banks would be the next to
fall.

Empty assurances given by Burma’s Central Bank governor on Feb 10 only
exacerbated the run on banks, and the banks were forced to impose
withdrawal limits to prevent from running out of money. On Feb 18,
customers were allowed to withdraw only 500,000 kyat (roughly US $500) a
week, and later the limit was reduced to 100,000 kyat a week.

In the middle of February, the banks started calling on customers to repay
outstanding loans.

A 25 billion kyat bailout from the Central Bank was offered to three major
banks, Asia Wealth Bank, Kanbawza Bank and Yoma Bank on Feb 21. Several of
the smaller banks had no choice but to cap withdrawals further, to figures
as low as 50,000 kyat a week.

A businessman in Rangoon said that the bank’s call for debts to be repaid
is a breach of the country’s finance laws.

Ordinary people who took out loans to buy goods or property have also been
hard hit by bank’s recall. Many people have had no choice but to sell
their assets, mostly cars and houses, in order to repay outstanding loans.
________

Democratic Voice of Burma   March 28 2003
Burmese ethnic groups discuss cooperation, maintenance of cease-fire

Two armed ethnic groups which have concluded cease-fire agreements with
the military government were reported to have held a special meeting in
Shan State on 25 March. The two groups are the Kachin Independence
Organization (KIO) and the Palaung State Liberation Organization (PSLO).

The KIO was represented at the meeting by a nine-member delegation headed
by Chairman Lamon Tu Jai and Secretary Dr Tu Ja while the Palaung group
was led by Chairman U Aik Mong.

The meeting, which took place in No 7 Special Region in Shan State,
reached a six-point agreement, which includes striving for the
strengthening of eternal friendship between the two groups, extension of
bilateral economic cooperation, upholding national unity, and maintaining
and safeguarding of cease-fire agreements.

The Network Media Group's report received today said the KIO chairman and
his delegation have been on an organizing tour of cease-fire areas in the
Shan State and had already visited Northern Shan State's Kunlong of No 1
Special Region - Kokang Region; Mong Maw of No 2 Special Region - Wa
Region; and presently the No 7 Special Region - Palaung Region.


MONEY

Bangkok Post   March 31, 2003, Monday
Thailand Plans Special Economic Zones, Promotion of Cross-Border Trade
By Chatrudee Theparat

The government is poised to develop special economic zones along border
towns nationwide, to increase border trade with neighbouring countries.

Cross-border trade nationwide is worth about 200 billion baht a year.

The government also hopes the new facilities will spur investment and
tourism. The National Economic and Social Development Board (NESDB) will
submit a report to Prime Minister Thaksin Shinawatra on the zoning plan
next week.

Deputy Prime Minister Somkid Jatusripitak said the planned zone in Chiang
Rai would be developed with the priority to increase border trade with
Burma, Laos and Southern China as basic infrastructure was in relatively
greater availability there than in other provinces.

The airport in Chiang Rai has been operational to receive international
traffic connecting to Rangoon, Kunming, Luang Prabang and Vientiane. Other
communication and transport facilities in the northern province are also
seen as adequate and efficient. In addition, piers are being built to
facilitate water transport along the Mekong River.

Pornchai Rijiprapa, the NESDB's deputy secretary-general, said that in the
South, border trade with Malaysia via Sadao in Songkhla accounted for half
of cross-border trade nationwide or about 100 billion baht.

Under the planned zoning system, factories will be promoted in the border
communities in Thailand and will use regional raw materials, especially
certain crops from neighbouring countries.

Through these facilities, investors within the planned zones would be
assured of constant raw material supplies and would enjoy low production
costs due to the close proximity to the sources of raw materials.

In addition, the zones would help create job opportunities that would
effectively deter foreign workers from migrating to the capital or other
major provinces in Thailand.

However, Thailand must hold further discussions with its neighbours about
helping to develop the zones, NESDB officials added.
________

Agence France Presse    March 30, 2003
Second national airline for Myanmar to launch this year: report

YANGON: Military-ruled Myanmar is expected to launch a second national
airline named United Myanmar Air (UMA) later this year, a report said
citing airline sources.

UMA is scheduled to begin operations in June using two leased Boeing 737
planes capable of carrying up to 400 passengers each, according to a
report in the forthcoming Monday edition of the Myanmar Times. Airline
sources told the semi-official weekly that the carrier plans to fly to
Bangkok, Kuala Lumpur and Singapore, the same destinations currently
served by national carrier Myanmar Airways International (MAI).

The UMA flights would replace some MAI services already cut to those
destinations, the report said.

An airline source was cited as saying that UMA would increase its fleet to
five if there was strong demand for its flights, and would probably lease
another aircraft and begin services to destinations in India and Japan
once the airline was operating.

The new carrier will be a joint venture between the Hong Kong-based
Sunshine Strategic Investment Company and domestic carrier Myanmar
Airways, an enterprise of the Ministry of Transport, the report said.

Tourism is seen by Myanmar's junta as a key way of earning foreign
exchange to boost the country's economy, which is in tatters due both to
economic mismanagement and a slew of tough international sanctions aimed
at persuading the generals to shift towards democracy.
________

The Associated Press State & Local Wire   March 30, 2003
New Jersey firm hopes to help rebuild Iraq

EAST ORANGE, N.J.: A New Jersey company that has carved roads through
Burma, supervised construction of an airport in Thailand and changed the
currency in Afghanistan is now looking toward Iraq.

The Louis Berger Group Inc. is among dozens of U.S. companies hoping for a
share of the billions of dollars in government contracts for rebuilding
Iraq after the war ends.

Some contracts already have been awarded. Last week, Kellogg, Brown &
Root, a division of Houston-based Halliburton, won a U.S. Army Corps of
Engineers contract to extinguish oil fires in Iraq.

An affiliate of East Orange-based Louis Berger, Berger/ABAM, won a $4.8
million federal contract to help clear the harbor at Umm Qasr.

Eventually, there will be contracts to repair roads, build electrical
systems and otherwise improve Iraq's infrastructure.

The U.S. government typically issues the first contracts in rebuilding
nations, followed by international institutions like the World Bank and,
eventually, by the nations themselves.

Derish Wolff, Louis Berger's chairman and chief executive, called nation
building "one of the most exciting things you can do."

"It's relatively easy to come in and just rebuild," Wolff told The
Star-Ledger of Newark. "The hope is that if you can put a country on a
sounder footing, these things won't happen again."

The privately held soils, mechanics and foundations engineering firm was
founded in 1953 by Louis Berger, a soil and foundations consultant from
Lawrence, Mass.

Its first major projects were domestic, beginning with the design of part
of the Pennsylvania Turnpike's Northeast Extension. In 1959, the firm
landed its first international job: the Rangoon-to-Mandalay Road in Burma.

Today, the company employs about 4,000 people worldwide.

After the U.S. military campaign in Afghanistan, Louis Berger was hired to
destroy that country's old currency and replace it with new bills called
Afghanis. About 2,000 local people were hired to handle the job.

"They brought in the old money and exchanged it for the new. Then we
burned and disposed of the old money," said Doug Bowlsby, a 62-year-old
former Army major who heads Louis Berger's operations in Afghanistan. "We
did it in three months."

The company also landed a contract to rebuild highways linking Kabul,
Kandahar and Herat in Afghanistan.

Another company owned in part by Afghan exiles living in Morris County,
Afghanistan Reconstruction Co., reached out to Louis Berger to secure that
work, Wolff told The Record of Bergen County.

ARC will handle the first 49 miles of the highway's construction. Its
chief executive officer, Farid A. Maqsudi of Montville, said work will
begin in late spring.

"We recognize that there is a great need for construction," Maqsudi told
The Record. "It's not so much for selfish or economic reasons. But it's
more, 'How can you contribute?"'


DRUGS

Bangkok Post   March 30, 2003
Red Wa gearing up for big drugs push into Thailand
By Wassana Nanuam

The Pha Muang task force chief-of-staff says 500 Red Wa soldiers are being
trained to provide security for drug caravans expected to head for
Thailand next month.

Col Somsak Nilbanjerdkul said a big push was expected by Red Wa drug
producers to smuggle millions of speed pills into Thailand next month,
especially during Songkran festival.

Up to 500 Red Wa soldiers had been sent for training at a military school
in New Yawn town, opposite Chiang Rai's Mae Fa Luang district.

Ready to be smuggled were about three million speed pills at Ban Na Mon,
opposite Mae Hong Son, two million at a Burmese town opposite Chiang Mai's
Wiang Haeng district, and one million pills at Laos' Bo Keo, opposite
Chiang Rai. The government's war on drugs had curbed the inflow, causing
shortages.

Col Apichart Meesommon, commander of the 5th Cavalry Regiment, said the
way the Red Wa increased the number of soldiers for training to 500 from
100-200, reflected their preparations for drug trafficking. He said there
were up to 50 methamphetamine production sources in Burma along the
northern border including a major one belonging to the Red Wa at Ban Hong.

Pithaya Jinawat, director of Northern Narcotics Control Office, said he
doubted whether the Red Wa would stop producing drugs by 2005, as
promised.

A Third Army intelligence officer said the Red Wa's Hong Pang Company in
Burma's Tachilek province was renamed Green Land Company and still being
used for money laundering.
________

Agence France Presse   March 30, 2003
"Yaa baa", the drug driving Thais crazy
By Pascale Trouillaud

BANGKOK: From the clandestine laboratories of Myanmar to the pockets of
several million Thai users, the methamphetamine pills known as "yaa baa"
are wreaking havoc in supplanting heroin as Thailand's number one killer
drug.

Following the century-old trade routes used by heroin traffickers and
other smugglers, the potent little pill has woven its way into the fabric
of Thai society like no other vice in decades, and is having disastrous
effects on the brains of its unsuspecting consumers.

Yaa baa, or crazy medicine as methamphetamine is known in Thailand, is in
the crosshairs of a two-month anti-drugs crackdown here that has resulted
in the deaths of nearly 1,900 suspected traffickers.

The brutal, no-holds barred blitz indicates the soaring level of concern
over the drug since its popularity mushroomed in the mid-1990s, making
Thailand the world's number one consumer. What is frightening about the
psychotropic drug is its extremely broad use across society, with Thais
using it for both work and pleasure, Pierre-Arnaud Chouvy and Joel
Meissonnier explain in "Yaa Baa", their book recently published by the
Institute of Research on Contemporary Southeast Asia.

Construction workers, sailors, farmers and taxi drivers take the drug to
help them through long working days, students use it to get through exam
periods and clubbers use it to help them dance the night away.

Yaa baa possesses several qualities that have helped it supplant heroin as
the drug of choice in Thailand.

The drug, the book's authors write, "conveys a completely positive image".
Being synthetic, it appears modern and inoffensive, while the energy,
confidence and euphoric feeling it gives users has lent it an image as a
"drug of happiness".

The small pills, of which there are at least 90 types, can also be easily
consumed: similar to an aspirin, they can be popped or dissolved in a
glass of water, taken intravenously, pulverised and inhaled, even smoked.

For producers, yaa baa is attractive because it is easy to manufacture --
instructions are available on the Internet -- and free from the climatic
uncertainties that dog other drugs.

Heroin, on the other hand, requires opium poppy as its raw ingredient
while cocaine depends on yields from the coca plant.

Another advantage is its extremely affordable price: before the start of
Thailand's drugs war on February 1 pushed the price of yaa baa up by
around 300 percent, it cost a mere 60 baht (1.50 dollars) or so per pill
on the streets.

But the small price still represents a huge mark-up on the five-cent cost
of production -- and unleashed the flood of some 800 million pills into
Thailand last year from neighbouring Myanmar.

"The majority of the drug comes indeed from Myanmar particularly the areas
controlled by the Wa of the UWSA (United Wa State Army)," the authors
write, referring to the pro-Yangon ethnic group said to operate around 50
laboratories close to the border, as well as mobile production units.

Alleged links between Myanmar's military rulers and the UWSA -- and the
resulting lack of law enforcement -- as well as the remote jungle canopy
under which the UWSA operate, conspire to make Myanmar an unrivalled
regional producer.

The drug has become a specialty of the Golden Triangle where Thailand,
Laos and Myanmar converge and much of the world's opium is still produced.

Methamphetamine is overtaking heroin as the production drug of choice in
the area and is profiting enormously from the distribution networks that
heroin trafficking has already established, according to Chouvy and
Meissonnier.

Some five percent of Thailand's population is now estimated to abuse
methamphetamine, a figure the International Narcotics Control Bureau says
makes it the largest per capita consumer in the world.

The drug has been around in other forms for years, first used in the 1920s
as an antidepressant and then as a psychostimulant during World War II and
the Vietnam war.

Armies of "ants," recruited from among impoverished ethnic minorities,
transport the pills along a multitude of routes, with protectors including
Myanmar soldiers and Thai police and bureaucrats allowing them to
eventually reach consumers in Thailand.

One pill will pass through seven intermediaries from the frontier runner
to the retailer, who will usually sell more to the drug user than he or
she requires, the book's authors say.

This creates another dealer -- which explains the drug's easy availability
across Thailand.

Owners of boats in the southern coastal province of Ranong and
construction foremen in Bangkok are known to force their workers to take
the drug at the beginning of the workday.

And occasionally in rural areas, "the farmers dissolve the drug in a
bottle which they drink while working."

But it is the kingdom's youth who are most at risk. Consumers are as young
as seven and "school has become one of the main hubs for trafficking of
methamphetamine."


REGIONAL

Deutsche Presse-Agentur   March 31, 2003
Rescue efforts planned for German kidnapped 8 days ago in India

New Delhi:  German development worker Wolfgang Heinrich is still in the
hands of his kidnappers Monday, eight days after he was abducted by armed
militants in the northeastern Indian state of Manipur.

Manipur police officials told Deutsche Presse Agentur dpa that efforts
were on to rescue Heinrich, who works for the Protestant Development
Service (EED) who was kidnapped allegedly by activists of the Kuki
Liberation Army (KLA).

Asked whether Heinrich could have been taken into neighbouring Myanmar by
the abductors through a porous border, an official said they had no
information this was the case. The Kuki ethnic group lives both in Myanmar
and Manipur.

He also pleaded ignorance about KLA's claim that Heinrich would be
released within a week.

The abduction took place when Heinrich, 47, a German female colleague, and
six members of a local non-government organisation inspected EED-funded
development projects near Manipur's capital, Imphal.

Earlier reports had said the abductors had demanded a ransom of 10 million
rupees (213,000 U.S. dollars).

But a KLA statement said Heinrich was abducted to draw attention to
discrimination against Kuki-dominated areas in distribution of aid and
accused some non-governmental organizations of spreading the rumour that
he was captured for ransom.


INTERNATIONAL

The Moscow Times   March 31, 2003
Russia Creates Own Financial Blacklist
By Valeria Korchagina

Just five months after being removed from an international blacklist of
non-cooperative countries in the global fight against terrorism and money
laundering, Russia has decided to create its own catalog of countries
considered to be engaged in inappropriate financial activities. Prime
Minister Mikhail Kasyanov on Friday ordered the Financial Monitoring
Committee to draw up Russia's own blacklist based on recommendations from
the Foreign Ministry, Federal Security Service and the Foreign
Intelligence Service.

The companies and individuals that are located in the listed countries, or
those that have bank accounts in them, will face close scrutiny from the
committee, Kasyanov said. Committee spokeswoman Natalya Konovalova said
she doubted the committee's blacklist will be much different from the
current list created by the Financial Action Task Force, an arm of the
Organization for Economic Cooperation and Development working to fight
money laundering.

Russia was removed from the FATF blacklist after much negotiation last
October.

The committee's list is likely to be compiled by the end of April,
Konovalova said.

There are currently 10 countries and territories on the FATF's blacklist:
the Cook Islands, Egypt, Guatemala, Indonesia, Myanmar, Nauru, Nigeria,
St. Vincent and the Grenadines, Philippines and Ukraine.

Konovalova said that Russia's own blacklist will not exceed that of FATF
and could, in fact, be shorter due to the exclusion of Ukraine. "It is on
the way out anyway," she said.

The Financial Monitoring Committee, a government watchdog set up to chase
dirty money, became operational in February 2002.

The committee has nearly unlimited access to financial activities
throughout the country.

According to Russia's law on preventing money laundering, the committee
receives information about all registered transactions of more than
600,000 rubles ($ 19,120).

According to Konovalova, the committee keeps track of firms or individuals
who conduct a large number of smaller transactions in short periods of
time.

The committee currently receives about 3,000 reports per day on various
transactions.

So far, it has received 400,000 individual reports, 4,800 of which have
been passed on to law enforcement agencies.

The committee also has managed to uncover a number of large-scale money
-laundering schemes, which are currently being investigated by several law
enforcement bodies, including the FSB.

Details on these cases are not available for the public, Konovalova said.

Although information on almost any remotely significant deal comes to the
committee, Konovalova said that most of it never goes anywhere beyond a
technical, computer-managed first analysis.

She also emphasized that the ceiling of 600,000 rubles "is, in fact, very
liberal." "In the United States any transaction over $ 10,000 is reported,
and in Italy it's as little as $ 5,000," Konovalova said in a telephone
interview Friday.
________

Los Angeles Times   March 29, 2003
Unocal May Be Tried on Abuses, State Court Rules; Panel says the oil firm
may face trial in L.A. in a case brought by Myanmar refugees.
By Lisa Girion, Times Staff Writer

A state appeals court has cleared the way for Unocal Corp. to face trial
in Los Angeles over allegations that it shares responsibility for the
murder, rape and enslavement of villagers by troops guarding a pipeline
project in Myanmar.

Refugees from the southeast Asian nation formerly known as Burma accused
Unocal in a landmark lawsuit of looking the other way while government
troops abused villagers who were forced to work on a $1.2-billion natural
gas pipeline project built by a consortium that includes the El
Segundo-based company.

Superior Court Judge Victoria Chaney ruled last year that Unocal should
face trial for so-called vicarious liability. Lawyers for Unocal
challenged her ruling, arguing that the case did not belong in a state
court because the crimes allegedly were perpetrated by foreign troops
outside California.

The 2nd District Court of Appeal denied Unocal's request in a ruling dated
Wednesday, saying only that the company had failed to make a case for
preventing a trial.

Lawyers for the plaintiffs said they were encouraged by the ruling.

"That was Unocal's last hope to avoid trial," said Katie Redford, a lawyer
and co-founder of Earthrights International, a human rights watchdog
organization that is backing the suit. "It's the last obstacle between our
clients and trial."

But Charles Strathman, Unocal's chief legal officer, said the company
would consider filing a new challenge with the California Supreme Court.

"We had doubts as to whether California tort law should apply to actions
that occurred entirely outside of the state and whether state court should
have jurisdiction over these types of matters," Strathman said.

Forced labor was legal in Myanmar in the mid-1990s, when the 39-mile
natural gas pipeline was laid through a region of farm villages and
mountain rain forests. Although the military dictatorship acquiesced to
international pressure and banned forced labor in 1999, the practice is
believed to be still widespread.

Executives for Unocal have acknowledged that troops did force villagers to
carry ammunition and supplies for the military and to perform other labor
in the vicinity of the project. But they deny that any of the labor
occurred for the project or within a construction corridor over which
Western pipeline operators have control. Lawyers for Unocal said the firm
had no knowledge of the alleged murder and rapes nor any control over the
actions of the troops purported to have committed such crimes.

Because the commercial arm of the military regime is a participant in the
pipeline, the plaintiffs argue that Unocal should share liability for the
alleged misdeeds of the army, which was expected to safeguard the project.

The refugees first filed suit in federal court seven years ago. U.S.
District Judge Ronald S.W. Lew ruled that the evidence suggested Unocal
was aware of the military's abuses. But because the company did not
control the troops, Lew ruled that it should not stand trial for liability
and dismissed the case.

That allowed the refugees to file a second suit under state law in
Superior Court in October 2000.

In September, a three-judge panel of the U.S. 9th Circuit Court of Appeals
ruled the federal suit back in. In the majority opinion, the judges
decided that the test for liability was whether Unocal knowingly
encouraged the alleged abuses. The judges concluded that there was
evidence that Unocal met that test and should face trial.

Unocal challenged that decision, and an 11-member panel of the 9th Circuit
will hear new arguments in June over whether the company should face a
federal trial.
________

Financial Times (London)   March 31, 2003
Legal case for doing the right thing: MULTINATIONALS: Global companies are
increasingly being drawn into US lawsuits over their behaviour in overseas
markets, reports Sarah Murray
By SARAH MURRAY

The debate about whether good corporate behaviour should be self-imposed
or enforced starts to look irrelevant when you have a lawsuit hanging over
your head. As a wave of legal actions - such as a case alleging that
Unocal, the US oil company, used forced labour in Burma - put business
responsibility on trial, the voluntary versus mandatory debate is
increasingly being overtaken by the law.

Many question whether a law passed in 1789 - the Alien Tort Claims Act,
through which some US courts have allowed lawsuits that allege US
companies have violated international laws abroad - should be used in this
way. But whatever the outcome of such cases (no company has yet made any
payment) and the result of the debate, the potential liability of
multinational companies in relation to corporate responsibility is
becoming harder to ignore.

"These legal developments offer a new perspective on what corporate
responsibility really means," says Elliot Schrage, former senior
vice-president of global affairs at Gap, who teaches at Columbia Business
School and Columbia Law School. "Just as commerce has gone global, so
liability is going global - and just as it took time for the rules of
commerce to become clearly defined, now we're entering an era where the
rules of liability are getting sorted out."

Many of the legal challenges facing companies today are examined in a
report* released last month. Prepared by the International Institute for
Environment and Development, it aims to demonstrate how the law is shaping
corporate responsibility.

"We don't have legal systems capable of dealing with the fact that
multinationals co-ordinate their activities across borders," says Halina
Ward, the report's author. "So we have to rethink what the respective
responsibilities are of home and host country governments, given that this
is the reality."

Ms Ward, IIED's director of corporate responsibility for environment and
development, argues that failure to address the legal dimensions of CSR
makes it harder to strike a balance of responsibility between government,
business and civil society.

But it is not only in relation to cross-border liability that legislation
is interacting with corporate responsibility. The report examines a
variety of ways in which the law is having an impact on CSR, and
highlights the implications for business management and public policy.

Even voluntary approaches to CSR can become embedded in law. Voluntary
reporting on environmental impacts, the report points out, can serve as a
basis for compensation claims. And new legislation in Ghana, for example,
requires logging companies to draw up a social responsibility agreement
with landowners.

Laws on misrepresentation or false advertising can come to bear on what
companies voluntarily disclose about themselves. Currently under the
spotlight is Nike, which was sued by Marc Kasky, an activist who alleged
the company made false statements in press releases about its labour
practices. The California court ruled that the statements were commercial
speech and not protected by the First Amendment. Critics say the ruling,
if upheld, will effectively silence companies in public policy debates.

However, Mr Schrage argues that too much attention is paid to individual
statutes at the expense of the bigger global picture. "One could argue
that the focus on US legal standards, and cases like Kasky involving the
Alien Tort claims, is misplaced," he says. "If Nike says on its website
'Our factories never violate local laws', and customers in Britain can sue
Nike based on that website, then Nike is going to change its statements
regardless of the outcome of the Kasky case."

Mandatory reporting is also expanding. In a growing number of countries,
for instance, pension fund managers must now report on their social and
environmental policies.

Competition law, the report points out, also has an impact on CSR by
drawing attention to fair trade practices. In November 2001, the European
Commission handed down a Euros 855.2m (Pounds 585m) fine over an illegal
price-fixing cartel among suppliers of vitamin supplements within the
European Union.

In some areas where legal pressures are mounting, such as regulations
limiting greenhouse gas emissions, companies have clear financial
incentives to take action. From 2005, for example, companies operating in
Europe will have to pay Euros 40 per tonne of carbon emissions, and those
breaching the rules will face steep fines.

But Mr Schrage argues that, even where the costs cannot be measured so
readily, the companies that assess legal risks and integrate them into
their operational practices will be those that come out on top. "Corporate
responsibility - if it is to be sustainable - must be about building
competitive advantage. Leadership companies anticipate legal developments
and create structures that address these risks in ways that are more
effective than their competition."

* Legal Issues in Corporate Citizenship, prepared for the Swedish
Partnership for Global Responsibility, www.iied.org/cred/pubs.html


EDITORIALS

The Nation - Monday, March 31, 2003
Burma's political dialogue: stalled yet again
By Kavi Chongkittavorn

The war in Iraq has had a great dampening effect on the future prospects
of the reconciliation process in Burma. The Burmese junta leaders know
full well that world attention is no longer focused on their ongoing
suppression of the Burmese people.

The much-heralded release of opposition party leader Aung San Suu Kyi last
May has remained only a gesture. The regime is still reluctant to
genuinely start the much-awaited political dialogue to proceed towards
power-sharing and building democratic institutions.

Burma is also facing an economic malaise of its own making. The fallout of
its banking crisis in recent weeks will have far-reaching ramifications on
its poorly managed financial markets and the economy in general.

In such a dire situation, the dialogue process has now become the regime's
most efficient diplomatic instrument to increase international support and
recognition. Apart from delaying further sanctions and weakening support
of the opposition, the junta aims to sideline democracy and strengthen its
grip on the lives of the Burmese people.

The latest incident encountered by the UN Special Rapporteur for Human
Rights Paulo Sergio Pinheiro pointed to Burma's ulterior motives in
international engagement. Pinheiro cut short his visit to Rangoon last
week after finding a hidden microphone inside the room he used to
interview political prisoners. Later he told reporters in Bangkok he was
frustrated by the slow progress of both the reconciliation dialogue and
the release of political prisoners.

The UN has been pressuring the Burmese regime to set free more prisoners
to show its seriousness in the dialogue process. So far, the regime has
released around 600 political prisoners. Nobody knows the exact numbers,
but Bangkok-based diplomats said that at least 500-600 were still in
prison. Given the circumstances now, the reconciliation process will run
according to the regime's timetable and at its own choosing.

This tactic has served the junta leaders well in engaging the world over
the past three years. On the surface, they have displayed a willingness to
talk with the opposition in order to confuse international opinion about
their goodwill and to soften demands for tough measures against the
Burmese regime. That explains why the international community cannot agree
on measures to isolate and punish the regime.

Within Burma, the junta leaders have choreographed their moves so
precisely that the reconciliation process has been used as an alibi to
weaken the opposition party. While Suu Kyi is free to travel, the junta
has instigated incidents to mar her visits.

Now, returning diplomats - who have access to both regime and opposition
leaders - talk more about the regime's need for more humanitarian
assistance to alleviate the HIV/Aids epidemic, ignoring the opposition's
eagerness to begin dialogue. Suu Kyi has clearly stated she is ready to
enter the dialogue without any conditions. But the junta leaders continue
to dodge the talks and ignore her appeals. Indeed, the regime has
continued to enjoy this win-win situation. As long the status quo
persists, nobody will pay much attention anyway.

Prime Minister Thaksin Shinawatra said last week that he wished he could
seize Muang Yuon, the town inside Burma across the Thai border controlled
by the Wa army. Muang Yuon has been used as a base for manufacturing and
transporting amphetamine pills, or ya ba.

Obviously, like Pinheiro, Thaksin has been hamstrung by slow progress on
the anti-drug effort pledged by the Burmese leaders.

Despite much hullabaloo over the past two years, Thaksin has not succeeded
in his Burmese policy. His willingness to comply with the regime's
requests has become routine, while issues affecting Thai-Burmese security
have remained unchanged, not to mention unresolved. The removal of Thai
generals responsible for firm and tough Burmese policies and the
amputation of Task Force 399 have weakened the Thai defence capacity along
the border as never before.

One disturbing trend, according to a Thai military intelligence source, is
the dramatic improvement of Burmese military capability over the past two
years. Despite financial woes, money from the cross-border trade and the
Yadana gas pipeline has increased the Burmese regime's purchasing power
for new weapons and new technology. Security concerns remain as always at
the top of Burma's list of priorities, while the Thaksin government
naively believes the economic incentives it offers will subsequently alter
the regime's perceptions.

As long as Thailand continues its current Burmese policy, the
reconciliation process in Burma will suffer. The Thaksin government has
single-handedly transformed this endeavour, once fully backed by the
international community, into a bilateral burden. No wonder the junta
leaders keep demanding that Thaksin do more, especially security measures
at the Thai-Burmese border through the removal of ethnic groups. Recently
Thaksin has even made an overture to be a mediator between the regime and
the ethnic groups.

Burma's increased intransigence is the result of the junta leaders'
illusion that they can get away scot-free with thwarting the free will of
the Burmese people. As a willing accomplice, the Thaksin government is
being used to bear the responsibility for the lack of progress in the
dialogue process. A case in point is that the regime repeatedly uses
border insecurity and ethnic problems as a pretext to delay political
dialogue with the opposition.

Unless Thailand changes its present course, the country will be further
sucked into the regime's sleight-of-hand games.


STATEMENTS

Burma Centrum Nederland (BCN)  March 31 2003
International Campaign against Austrian Airlines/Lauda Air

Brussels, March 31, 2003  The Annual International Conference of European
Burma Campaign Organisations, trade unions and partner organisations from
all over Europe start a campaign today in 13 countries against Austrian
Airlines / Lauda Air because this company recently started flights to
Rangoon (Burma).

This coalition of organisations today wrote a letter to Dr. Joseph Burger,
CEO of Austrian Airlines (Lauda Air), stating:  “To our great dismay we
learned of AUA/Lauda Air’s direct weekly flights from Europe (Vienna) to
Rangoon (Burma) commencing last November.

Burma is currently ruled by a ruthless military dictatorship which is
guilty of human rights abuses and forced labour on a massive scale.
Burma’s military regime has never acknowledged the results of the 1990
elections, in which the National League for Democracy (NLD), led by Nobel
Laureate Aung San Suu Kyi, won over 80 percent of the seats. To date, the
military junta has still not handed over power to the democratically
elected government.”

The Burmese Democratic opposition and the International Labour
Organisation (ILO) called for sanctions. The EU and the Burmese Democratic
opposition have also called for a boycott on tourism.

Burma Campaign Organisations, trade unions and partner organisations in
UK, Switzerland, Austria, Netherlands, Germany, France, Italy, Belgium,
Norway, Spain, Sweden, Denmark and Ireland consider Austrian Airlines
operations in Burma unacceptable. Therefore, all Burma Campaign
Organisations urge them to cease flights to Rangoon indefinitely, as long
as the current military regime in Burma is in power and the Burmese
democratic and ethnic opposition requests a tourism boycott.

At the Annual International Conference of European Burma Campaign
Organisations meeting in Brussels, the undersigned organisations state our
commitment to launch an international public and media campaign against
Austrian Airlines/Lauda Air. All organisations will continue this
campaign, including public demonstrations and the mass-release of protest
cards, until AUA/Lauda Air ceases its flights to Rangoon indefinitely.


Since last November Burma Organisations from a number countries have
strongly asked AUA/LA to stop its flights to Burma. AUA /LA has not
responded adequately to these requests. Today a worldwide public campaign
starts. In several countries public protests will be organised in the
months to come. The campaign is opened in Amsterdam by the largest Dutch
trade union (FNV) and Burma Center Netherlands with a public demonstration
in front of AUA’s Dutch office, on Monday the 31st.


For more information:
Burma Centrum Nederland (BCN)
Paulus Potterstraat 20
1071 DA Amsterdam
The Netherlands
tel: 31-20-671 6952
fax: 31-20-671 3513
e-mail: bcn at xs4all.nl
url: www.burmacentrum.nl