BurmaNet News, March 2, 2004

[editor at burmanet.org]

March 2, 2004 Issue # 2431


INSIDE BURMA
AFP: UN envoy meets Myanmar premier, Suu Kyi to discuss new deal
JEN: U.N. enovy Razali meets Myanmar's Khin Nyunt, Suu Kyi
Irrawaddy: UN Envoy’s Roadmap Mission
Xinhua: Myanmar top leader urges boosting of agricultural development

DRUGS
AFP: US takes new swipe at Myanmar over drugs
Irrawaddy: China Alarmed at Heroin Influx from Burma
Contra Costa Times: China fights surge in illegal narcotics use

BUSINESS / MONEY
Economic Times: GAIL, OVL face penalty in Myanmar JV
Xinhua: Myanmar anticipates record high of pearl production in 2003-04
AFP: Business calls for US constructive reports on Southeast Asia

INTERNATIONAL
IFI–Burma: UNESCO says China's Salween part of World Heritage Site

OPINION / OTHER
In These Times: Unocal off the Hook?; Myanmar villagers still seek
restitution for human rights violations.



INSIDE BURMA
___________________________________

March 2, Agence France Presse
UN envoy meets Myanmar premier, Suu Kyi to discuss new deal

UN envoy Razali Ismail met with Myanmar opposition leader Aung San Suu Kyi
and premier General Khin Nyunt on Tuesday to discuss a new deal to bring
the warring sides together, a senior ethnic leader said.

"It appears that a breakthrough has been achieved," Khun Tun Oo of the
Shan National League for Democracy told AFP after he and other ethnic
political leaders met with Razali to discuss the junta's "road map" to
democracy.

"Razali told me he came with the specific purpose of promoting the
seven-point roadmap where the United Nations will be prominently
involved," he said, referring to the process announced last August which
is due to start this year with a national convention to draft a new
constitution.

Khun Tun Oo said the envoy proposed that the ruling State Peace and
Development Council (SPDC), Aung San Suu Kyi's National League for
Democracy (NLD) and ethnic leaders join together in a dialogue ahead of
the convention.

The forum, to be known as the "constitution-drafting council", would
represent a landmark resumption of contacts between the SPDC and the NLD
which broke down last year after a crackdown on the pro-democracy party.

Razali was also the catalyst for the original talks between the junta and
Aung San Suu Kyi which began in October 2000, raising hopes for national
reconciliation in Myanmar which has been run by the military for four
decades.

The inclusion of ethnic representatives in the new process would mute
criticisms that the earlier contacts excluded the ethnic parties whose
agreement will be vital in any moves towards democratic reform.

"We told him we welcome this approach as long as it will guarantee our
right of self-determination, our right to equality and if it helps to
create a federal type of government," Khun Tun Oo said.

The democracy "road map" was announced as part of a public relations
campaign launched after a May crackdown on the NLD which left the party
crippled with its leaders in detention and its offices closed nationwide.

After hour-long talks with Khin Nyunt Tuesday, Razali met Aung San Suu Kyi
at her lakeside residence where she is still under house arrest, and told
Khun Tun Oo he planned to see her again during his 12th mission to
Myanmar.

Razali flew into Yangon Monday with no fanfare for the visit which was not
officially announced. The former Malaysian diplomat last travelled to
Yangon in October and his requests for another mission had been rebuffed
for months.

But Khun Tun Oo said the trip was approved hurriedly to advance the new
deal for the UN to become more closely involved with the road map which
Western critics of the junta have greeted with scepticism.

The NLD withdrew from an earlier convention in 1995, saying the process
was unrepresentative, and the ruling generals have gone to great lengths
to boost the credibility of the new convention.

Khun Tun Oo said the constitution-drafting council would act as an
advisory body on the establishment of the national convention, ensuring it
was more inclusive and that the pro-democracy side would not be muzzled.

Observers in Yangon said the UN proposal would benefit both sides, by
giving the NLD more of a voice in how the convention would operate and
also lending credibility to the junta's initiative.

The United States and European Union tightened their sanctions against
Myanmar in response to the May crackdown against Aung San Suu Kyi and her
party, which won 1990 elections but was never allowed to rule.
__________________________

March 2, Japan Economic Newswire
U.N. enovy Razali meets Myanmar's Khin Nyunt, Suu Kyi

Razali Ismail, U.N. envoy in charge of promoting dialogue between the
junta and pro-democracy forces in Myanmar, held separate talks Tuesday
with Prime Minister Gen. Khin Nyunt and pro-democracy leader Aung San Suu
Kyi, official sources said.

Razali, who arrived in Myanmar on Monday, met with Khin Nyunt for about an
hour from 11 a.m. at the Defense Ministry, the sources said. 'I am not
going into details,' Razali told reporters after the talks.

In the evening, the special envoy of U.N. Secretary General Kofi Annan met
with Suu Kyi, now under house arrest, at her residence in Yangon. The
talks lasted one hour and 40 minutes.

Suu Kyi, a Nobel Peace Prize laureate who leads the National League for
Democracy (NLD), was detained in May last year following what the junta
claims was a clash between her supporters and government backers. After
being detained in an undisclosed location, she underwent surgery and was
allowed to return to her residence in the capital.

Earlier in the day, Razali also met with representatives of ethnic
minorities in the country. Khun Tun Oo, one of the representatives, said
the main purpose of his trip is to discuss with the government the
seven-point 'road map' to democracy unveiled last year by Khin Nyunt.

The road map includes free elections that would lead to a new government,
but no timetable has been set.

Since assuming his current position in April 2000, Razali, a former
Malaysian career diplomat, has taken charge of facilitating political
reconciliation between the military government and Suu Kyi's NLD.
__________________________

March 2, Irrawaddy
UN Envoy’s Roadmap Mission - Kyaw Zwa Moe

A UN envoy met with ethnic leaders in Rangoon this morning to discuss the
political roadmap proposed by Burma’s ruling military junta, said an
ethnic leader in Rangoon today who attended the meeting.

He added that UN special envoy to Burma, Razali Ismail, would meet with
opposition leader Aung San Suu Kyi this afternoon to discuss the roadmap.

Razali, a former Malaysian diplomat, arrived unannounced in the capital
yesterday to discuss the plan separately with ethnic, opposition and
military leaders, said Hkun Htun Oo, chairman of the Shan Nationalities
League for Democracy.

It is Razali’s 12th trip to Burma since late 2000, when UN
Secretary-General Kofi Annan appointed him to help solve the country’s
political impasse. Prime Minister Gen Khin Nyunt proposed the seven-step
roadmap towards democratization in August. Khin Nyunt met with Razali for
an hour this morning, said the ethnic leader.

Ethnic leaders from the Rangoon-based United Nationalities Alliance met
with the UN envoy for an hour this morning, Hkun Htun Oo said. The
Alliance is comprised of representatives from eight separate ethnic
groups.

"We told Razali that we would accept the roadmap if the junta is flexible
to change its objectives and proceedings for the National Convention,"
Hkun Htun Oo said.

Reconvening the National Convention is the first step of the junta’s
roadmap. The previous convention first met in 1993 but was suspended in
1996 after the opposition walked out in protest over its limited role in
the proceedings. Most opposition groups object to the convention’s terms
which guarantee the military a future leadership role in the country.

We told Razali that we would accept the roadmap if the junta is flexible
to change its objectives and proceedings for the National Convention.
—Hkun Htun Oo

"We will not attend the convention if the junta doesn’t change its
objectives and principles," Hkun Htun Oo said, adding that the Alliance
only wants the junta to modify, not overhaul, the conditions of the
convention, which is tasked with drafting a new constitution.

The ethnic leader said Razali floated the idea of forming a temporary
tripartite committee among leaders from ethnic, military and opposition
groups, including the National League for Democracy, or NLD, to supervise
the constitution-drafting process.

Hkun Htun Oo also said ethnic leaders discussed Suu Kyi’s release from
house arrest, where she has been detained for nearly nine months, and
allowing the opposition leader to meet other NLD top officials. They also
discussed the reopening of NLD offices.

Whether the NLD is invited to the National Convention or not would have no
bearing on the decision of ethnic groups in the Alliance to participate,
he said. According to the military junta, 17 ethnic ceasefire groups have
already agreed to take part in the convention.

The UN envoy is scheduled to meet Suu Kyi again tomorrow, said Hkun Htun Oo.
__________________________

March 2, Xinhua
Myanmar top leader urges boosting of agricultural development

Myanmar top leader Than Shwe on Tuesday urged the country's peasants to
boost the development of the agricultural sector and strive for full
realization of the production target.

Than Shwe, chairman of the State Peace and Development Council, made the
call in his message on the occasion of the Peasants' Day, which falls on
Tuesday.

Noting that the agricultural sector is the nation's main economic pillar
and paddy stands as the sector's main crop, he clarified that the
introduction of the new rice trade policy in the current 2003-04 fiscal
year (April/March) was to enhance the enthusiasm of the peasants and local
entrepreneurs to boost production and rice export.

Myanmar exported nearly one million tons of the rice annually out of over
20 million tons of paddy produced in the past few years.

He went on to say that the government has given continuous priority to its
success and development, while utilizing greater financial power to build
such facilities as dams and canals, sluice gates, river water pumping
stations and underground water tapping projects across the country.

He disclosed that since late 1988, a total of 157 dams have been built in
the country, irrigating about 2.15 million acres ( 870,750 hectares). The
construction of 265 other river water pumping stations has also put
121,500 hectares more under crops, he added.

He revealed that the cultivated area of the nation has reached 16.15
million hectares now, a 150-percent rise from 1988.

He also called for boosting the farm machinery manufacturing industry as
the country is switching to mechanized farming.

Politically, he urged representatives of the peasants to actively take
part in reconvening the long-adjourned National Convention, covered by the
country's roadmap announced in last August, to pave way for the emergence
of a new constitution.


DRUGS
_____________________________________

March 2, Agence France Presse
US takes new swipe at Myanmar over drugs

Myanmar has made a modest cut in poppy cultivation but remains the world's
second ranked supplier of opium, the United States warned Monday in a new
swipe at Yangon's ruling junta.

In an annual report on world drugs production, the State Department gave
Myanmar's ruling generals little hope for their campaign to shed their
country's reputation as a narco-dictatorship.

"Burma has reduced poppy production modestly but remains far from
demonstrating the counternarcotics commitment that would ... get itself
out of the trafficking system," said Robert Charles, assistant secretary
of state for international narcotics and law enforcement.

He was speaking as the department unveiled its annual International
Narcotics Control Strategy report, which contained an unflattering
portrait of Yangon's vaunted anti-drugs drive.

The report accused Myanmar, the former Burma, of playing a leading role in
the regional trafficking of amphetamine type stimulants.

Drug gangs based in the border areas between China, Myanmar and Thailand
annually produce several hundred million metamphetamine tablets, the
report warned.

The report also raised fears that some ethnic groups in Myanmar may be
given a pass by the central government in Yangon on drugs production, to
ensure that fragile ceasefire deals with the military hold.

"Several of the ethnic trafficking armies, especially the Wa, also control
amphetamine production labs and extensive trafficking operations," the
report said.

Those operations raised "questions whether their gradual departure from
opium cultivation is not just a business decision to concentrate on"
amphetamine production, the State Department report said.

The United Nations said last month that opium production in Myanmar has
been slashed by two-thirds since 1996, but booming trafficking in
methamphetamines remains a major concern.

The UN Office on Drugs and Crime (UNODC) said ahead of the March 2 release
of an annual global drugs report that the ruling military junta had taken
further steps in the past year towards eradicating opium.

The United States is frequently at odds with Myanmar's military rulers,
whom it accuses of doing too little to combat narcotics production and of
presiding over gross human rights abuses.

Washington is also a staunch supporter of pro-democracy leader Aung San
Suu Kyi, who has waged a bitter struggle against the military since it
refused to recognise the 1990 landslide election victory of her National
League for Democracy.
__________________________

March 2, Irrawaddy
China Alarmed at Heroin Influx from Burma - by Naw Seng

Heroin from Burma is causing economic and social problems in China, a
senior Chinese official said yesterday.

"The drug control situation in China is still very serious," Luo Feng,
vice minister of China’s Public Security Bureau, told a press conference
on Monday. "The infiltration of illegal drugs is causing immense harm to
China."

Eighty percent of the heroin produced in Laos and Burma is smuggled to
China, according to the official. He claimed that the two countries
produced enough opium to manufacture a total of 70 to 80 tonnes of heroin
last year.

There were about 740,000 heroin users in China in 2003—National Narcotics
Control Commission estimate.

China’s National Narcotics Control Commission estimated that there were
about 740,000 heroin users in China in 2003. Chinese police confiscated
9.35 tonnes of heroin last year. They also interdicted 5.8 tonnes of
methamphetamines and 73 tonnes of precursor chemicals for methamphetamines
and MDMA, or Ecstasy, said Luo.

Aung Kyaw Zaw, a Burmese resident of Ruili, a Chinese border town that
serves as a major drug entry point from Burma, said the trafficking will
continue because political arrangements in Burma facilitate and protect
narcotics commerce. Ceasefire groups in Burma’s Shan State control drug
production areas. Burmese authorities turn a blind eye to the activities
of the groups, he said.

Additionally, corrupt officials on both sides of the border either take
payoffs or are directly engaged in the business, despite the fact that
both Rangoon and Beijing have official anti-drug campaigns, said Aung Kyaw
Zaw.

A kilo of heroin at the China-Burma border near Ruili goes for about
36,000 yuan (around US $4,300), according to Aung Kyaw Zaw. That is about
20 percent cheaper than the heroin price on the Burma-Thailand border.

Aung Kyaw Zaw claimed that in January when he visited another major drugs
entry point opposite the Burmese town of Panghsang, heroin was selling for
only a little over half the price as in Ruili. Normally heroin prices at
the two places are the same. There is no obvious reason for the recent
huge price drop in Panghsang.
__________________________

March 2, Contra Costa Times
China fights surge in illegal narcotics use

China said Monday that it's wrestling with deepening problems of domestic
narcotics abuse and now has more than 1 million drug addicts.

Officials blamed soaring opium production in Afghanistan and the arrival
of multinational drug gangs in China for some of the surge in drug use.

"The domestic consumption of narcotics is growing, and the kinds of drugs
that are consumed have diversified," said Luo Feng, vice minister of
Public Security, who's the nation's second-ranking counter-drug official.

Luo said expanding problems with narcotics abuse impose "heavy losses" to
China's economy amounting to billions of dollars a year and that crime
rates climb with drug usage.

In an annual report, China's National Narcotics Control Commission said
the number of drug addicts rose from about 900,000 people in 2002 to 1.05
million people in 2003, 740,000 of them heroin users. Use of narcotics and
synthetic drugs continued to increase, especially among youths, the report
said.

Amphetamine-type stimulants are produced in China in illegal drug
laboratories. China also is an important source for natural ephedra, used
in methamphetamine, and is one of the world's largest producers of
synthetic ephedra.

Drug use in China, practically wiped out after the Communist Party took
power in 1949, made a comeback as the country opened up its economy.
Security agents combat the problem by killing dozens of suspected
traffickers each year in mass executions.

But China shares borders with some of the world's major heroin- and
opium-producing spots, including the Golden Triangle (encompassing remote
areas of Burma, Thailand, Laos and China) and the Golden Crescent (which
includes Iran, Afghanistan and parts of Central Asia).

China said 80 percent of the heroin produced in the Golden Triangle flows
overland through China "by vehicle, couriers and mail." Traffickers bring
heroin over the Himalayas through India and Nepal, the report added.

It called opium production in Afghanistan, which shares a small northwest
border with China, "an expanding threat to China." Opium, which is refined
from the poppy plant, is also the raw material for making heroin.

Drug gangs building mobile laboratories to produce methamphetamine, a
synthetic compound known in Asia as "ice," are particularly active in
Guangdong and Fujian provinces along China's southeastern coast, the
report said.

In an indication of the growing magnitude of "ice" production, security
agents in Guangzhou, China, on May 11 seized 4.3 tons of the drug in one
raid, more than the amount seized the entire previous year, the report
said.

Three months later in Guangzhou, authorities found 4.2 tons of
methaqualone, a barbiturate, hidden in air conditioners headed for South
Africa, it said.

As international narcotics gangs take root in the country, Chinese
counter-drug authorities increasingly cooperate with counterparts in other
countries, including the U.S. Drug Enforcement Administration, which has
maintained resident agents in China since 1999.


BUSINESS / MONEY
_____________________________________

March 1, Economic Times
GAIL, OVL face penalty in Myanmar JV

Two state-owned oil and gas firms have ended up with egg on their face for
being penny-wise and pound-foolish in their JV in a Myanmar gasfield
estimated to have reserves of up to six trillion cubic feet.

Gail and ONGC Videsh are likely to end up paying a penalty to Korean
partner Daewoo and KoGas of Myanmar as they did not share the cost of
drilling wells in the Shwe gasfield.

As per the partnership terms, OVL and Gail are to share the exploration
and development costs in proportion to their holdings.

While the ownership of discovery will also be in proportion to their
equity, the deal says any partner failing to share exploration costs will
have to pay a penalty.

OVL holds 20 per cent equity in the field, GAIL 10 per cent, Daewoo 60 per
cent and KoGas 10 per cent.

Though Gail and OVL officials refused to talk, sources said the two
companies did not pay the initial costs for fear of losing the money in
case the fields did not yield any prospect, not uncommon in oil and gas
exploration.

Now that the field has thrown up big prospects, the Koreans and Myanmarese
partners have smelt blood and want their pound of flesh for bearing the
entire risk and liability of exploration.

The only thing that is working in OVL and Gail's favour is India's
potential as the only realistic market where the Myanmar gas could be
sold.

This has forced the Koreans and the Myanmarese to tread softly on the
amount of penalty as they do not want to antagonise their Indian partners
too much.
__________________________

March 2, Xinhua
Myanmar anticipates record high of pearl production in 2003-04

Myanmar has anticipated to achieve during the current financial year a
highest ever record of pearl production in 30 years due to increased 
foreign investment in the industry, said the local Myanmar Times in this
week's issue.

More than 170,000 cultured pearls, which weigh nearly 262.5 kilograms,
would be produced at farms in Myeik Archipelago in southern Tanintharyi
division during the 2003-04 ending in March, the state-run Myanmar Pearl
Enterprise (MPE) was quoted as saying.

According to the MPE statistics, the country yielded 60,288 pearls of 85.1
kg in 2001-02 and 117,852 pearls of 147.4 kg in 2002-03, and even higher
productions are estimated for 2004-05.

Culture pearl production in Myanmar has been up sharply since 1992 when
the government launched a campaign to encourage more domestic and foreign
investment in the industry.

Of the six pearl producers in the country, three are Myanmar-foreign joint
ventures involving companies from Japan, Australia and Thailand. Of them,
the Myanmar-Japan partnership represents the biggest producer with an
investment of about 8.47 million US dollars, according to the MPE.

Myanmar pearl had been harvested from wild oysters before the introduction
of hatchery-bred oysters in 1954 when the cultured pearl industry began.

Pearl lots, along with locally-produced quality gems, jade and jewelry,
are sold at the country's regular gems emporiums held biannually through a
sale system ranging from sealed tender to competitive bidding.

Meanwhile, Myanmar held a special pearl emporium and design competition
last July to promote the sale of the item.
__________________________

March 2, Agence Presse France
Business calls for US constructive reports on Southeast Asia

US reports on human rights, narcotics, religious freedom and trade
barriers in Southeast Asia should be more constructive to avoid hurting
regional allies, an American business lobby group said Tuesday.

The comments by Ernest Bower, president of the US-ASEAN Business Council,
followed an outburst by Thai Prime Minister Thaksin Shinawatra who
described as unacceptable a damning US human rights report on Thailand.

Bower said his group, which includes top US companies operating in
Southeast Asia, will lobby for changes in the way US embassies and the
State Department approach their reports on the four subjects.

"The structure of this reporting, we believe in the business sector, is
that it starts with a negative proposition," Bower said in a news briefing
at the council's regional office in Singapore.

"It basically forces our bureaucrats in the State Department and in our
embassies in Southeast Asia and around the world to take a critical view
and report the problems that countries are dealing with.

"It's like doing a report card on our friends' developments rather than to
give a kind of a more positive and constructive assessment of where we can
help and where we can be more constructive."

The US Congress has mandated an annual review of Washington's allies
worldwide in the fields of human rights, religious freedoms, narcotics and
trade barriers.

In its latest report, the US State Department warned Thailand's rights
record "worsened" in 2003 with regard to extrajudicial killings and
arbitrary arrests.

The allegations centred on a heavily-criticised war on drugs which Prime
Minister Thaksin Shinawatra launched last year to curb an epidemic of
addiction in the kingdom.

A visibly irritated Thaksin said it was "unacceptable that a friendly
country annually releases a report that hurts our feelings."

Bower said his council was working with US Senator Richard Lugar, chair of
the foreign relations committee, on how such reports can be more
constructive.

"We don't want to be... having a report card every quarter that is
critical of our friends in Southeast Asia. From the business point of
view, this is important because Southeast Asia is our third largest
overseas markets."

US trade with the Association of Southeast Asian Nations totalled more
than 120 billion dollars in 2003.

American businesses invested 88 billion dollars in ASEAN, which covers
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines,
Singapore, Thailand and Vietnam.

He also said any security measures taken by the United States to protect
itself against terror attacks should be explained clearly to regional
allies to avoid disruptions in the supply chain.

The business council is also taking steps to help US legislators have a
better understanding of the region.


INTERNATIONAL
_____________________________________

Marc 1, IFI-Burma
UNESCO says China's Salween part of World Heritage Site, Shan Herald
Agency for News

IFI-Burma compiler's note:
China is planning to build 13 dams on the Nujiang (portion of the Salween
River that runs through China), without proper consultation with the
neighbouring countries and affected communities, and without thorough
information disclosure.  For more background information, see:

Petition to China from 83 organizations from Thailand/Burma on Upper
Salween Dam
http://www.searin.org/Th/SWD/SWDletE2.htm

China plans 13 dams on Salween, Bangkok Post, December 18, 2003
* More than 80 groups in Thailand and Burma called on China to consult
countries downstream of the Salween river before building 13 large
hydro-power dams.
http://www.searin.org/Th/SWD/SWDnE14.htm

**********
UNESCO says China's Salween part of World Heritage Site

The United Nation's Educational, Scientific and Cultural Organization as
recently confirmed that 9 of the proposed 13 dams on the Chinese part of
the Salween falls within the World Heritage Site, according to a copy of
the letter from its World Heritage Center director.

The project is in the Three Parallel Rivers area, which includes the
Jinsha, Lancang and Nujiang (as the Salween is known in China), that has
been listed as a World Heritage property since the 27th session of the
World Heritage Committee, 30 June-5 July 2003, wrote Francesco Bandarin in
a reply to the US-based International Rivers Network
(IRN) on 17 February.

"We will certainly express our concern to the Chinese authorities
regarding this project," he said.  Copies of the letter were conveyed to
the Chinese National Commission for UNESCO, Chinese Permanent Delegation
to UNESCO and Mr Zhang Xinshang, Chairperson of the World Heritage
Committee, among others.

According to China Daily, 62 environmental protection campaigners in
China, including scientists, writers, journalists, singers and movie stars
had, at the end of October, petitioned against the project.

Later on 16 December, 83 environmental, human rights and ethnic groups in
Thailand and Burma made another call on Beijing to consult downstream
countries before going ahead with its plan to build the hydro-power dams.

Activists believed a thorough environmental impact assessment (EIA) that
covered the entire basin in all the three countries: China, Burma and
Thailand must be conducted before the project was implemented.

Thailand and Burma, in the meanwhile, are also planning to build
hydro-power dams along their parts of the 2,800 km long river. The
controversial Tasarng dam project in Shan State is included in the Asian
Development Bank's Regional Indicative Master Plan on Power
Interconnection in the Greater Mekong Subregion, better known as the
Mekong Power Grid, according to a fact-sheet issued by Washington-based
Bank Information Center.  [See the fact sheet:
www.bicusa.org/bicusa/issues/misc_resources/1322.php]

On the official side, no protests, at least publicly, have been
forthcoming from Bangkok and Rangoon. As for Rangoon, it has already
turned a deaf ear to complaints made by the UNESCO on its program of
rebuilding of hundreds of temples, built in Pagan during a 243-year period
from the 11th to 13th centuries.

The Salween rises in the Tanggula Mountains and passes through China's
Tibet and Yunnan, Burma and Thailand before emptying itself in the Indian
Ocean.


OPINION / OTHER
_____________________________________

March 1, In These Times
Unocal off the Hook?; Myanmar villagers still seek restitution for human
rights violations.

For now, California energy giant Unocal Corp. is not liable for the rape,
murder, torture and forced labor that occurred during construction of the
$ 1.2 billion, 40-mile Yadana natural gas pipeline in Burma, now Myanmar.
On January 23, Los Angeles County Superior Court Judge Victoria Chaney
concluded that Unocal could not be held accountable for the actions of its
subsidiaries -- but ruled that the case could move forward if plaintiff
attorneys used other means to prove libability.

The court found that victims' testimony was well documented and that "the
evidence does suggest that Unocal knew that forced labor was being
utilized and that they benefited from the practice." The notoriously
brutal Burmese military was contracted to act as security on the project
for its builders: Unocal, French company Total and subsidiaries of both.

The federal case Doe v. Unocal was filed in 1996 under the Alien Tort
Claims Act (ATCA) of 1789 on behalf of 15 villagers. They charged that
Unocal understood the tactics being used by Burma's violent military
regime when collaborating on the project.

A Los Angeles federal district court agreed to hear the case a year later,
determining that corporations could be held liable under ATCA for human
rights abuses on foreign soil. After three years of discovery the case was
dismissed in 2000, but the Ninth Circuit Court of Appeals ruled that it
could be heard in civil court. Twenty-five cases have been filed using
ATCA since 1980, but Unocal was the first company to stand trial in a
civil suit on U.S. soil.

Villagers testified in "Entrenched," an investigative report by
EarthRights International, that they were forced to relocate to the
pipeline area, quarter soldiers, assist in sweeping for landmines, carry
supplies and ammunition, and stand sentry duty to watch for insurgent
attacks -- labor referred to as "peoples' contributions" by the Burmese
army. Threats and intimidation were used to gain compliance. A village
headman reportedly met weekly with the military officers, offering gifts
and receiving new orders for his village.

Non-compliance with military orders led to shocking abuses. One
uncooperative headman was buried up to his neck while fellow villagers
were forced at gunpoint to kick and stomp on his head.

The International Labor Organization (ILO) described the situation at the
pipeline as "a saga of untold misery and suffering, oppression and
exploitation of large sections of the population inhabiting Myanmar by the
Government, military, and other public officers." The ILO's most recent
assessment confirmed that the situation continues to worsen.

Since the State Peace and Development Council government of Burma forcibly
took power in 1988, profits from the use of forced labor and environmental
destruction have been used to keep the regime in power. Statistics from
the Burmese military reveal that "peoples' contributions" to rural
development projects increased 25-fold between 1990 and 1996.

Judge Chaney concluded that the subsidiaries were "common and legitimate"
and that parent company Unocal is not liable because the subsidiaries have
the financial resources to be held accountable under California law. But
Anne Richardson, an attorney for the plaintiffs, argued that Unocal's
subsidiaries did not have sufficient financial resources at the time the
cases were filed.

If the court had ruled in favor of the villagers in the first phase of the
trial, Unocal faced $ 1 billion in restitution monies. Dan Stromer,
attorney for the plaintiffs, vowed to continue the fight for compensation
even though Unocal lawyer Daniel Petrocelli lauded the ruling as a
"complete victory and vindicaton."

Judith Chomsky, a lawyer for the plaintiffs said, "If the case can go to a
jury, the layers and layers of companies Unocal created to hide its
responsibilities will be meaningless."

Litigants revived ATCA amid rising human rights abuses perpetrated by U.S.
companies on foreign soil. The act was passed in 1789 as part of the
original Judiciary Act and asserted that "district courts shall have
original jurisdiction of any civil action by an alien for a tort (crime)
only, committed in violation of the law of nations or a treaty of the
United States." The Torture Victim Prevention Act, passed by Congress,
bolstered the ATCA, which has been used to sue many U.S. corporations
abroad, including Chevron, Exxon Mobil, Coca-Cola, Texaco and Gap.
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