unocal

UNOCAL IN BURMAGroup 4:DebbyHendraNurJoostAntoine

UNOCAL IN BURMAUnocal (Union Oil Company of

California)Burma/Myanmar Why Burma?Background – Proyek Yadana di BurmaHuman Rights violation by SLORCControversyConclusion

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 around Los Angeles and California

In 1990, Unocal had operated in every aspect of the petroleum business

UNOCAL (Union Oil Company of California)Revenue of US$ 5.103 million in 1998,

increased to US$ 6.057 million in 1999Project 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.

UNOCAL (Union Oil Company of California)Several Unocal’s business fields:

1.Oil and Gas Production2.Geothermal resources exploration and

power plan3.Global trade4.Mineral and Carbon5.Agricultural production

Burma/Myanmar ProfilePemerintahan: military junta, dictatorialPopulation: Bamars (68%, majorities), Shans, Kayins,

Chins, Rakhinese, Indians, Chinese, othersEconomy:

PoorGDP: US$400 - $600 per yearInflation: > 20%

Social: Babies morbidity rate: highLife expectancy: 53 years (men), 56 years (women)

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

Junta military was accused to have the Burmese human rights violated

Why Burma?Cheap labors' wages with relatively well

educated personnelPlenty of natural gas and other resources

that have not been utilizedPotential entry point for beneficial

international marketPemerintah Burma menciptakan iklim

politik yang stabil

Background – Yadana Project in BurmaUnocal began to enter Burma at around 1990s

for gas and oil exploration offshore.In 1993, Unocal participated in the to mine the

Yadana offshore natural gas development projects which is located in the Andaman Sea, Burma

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

Background – Yadana Project in 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 Thai government.

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

Background – Yadana Project in BurmaMOGE signed a contract with Total S.AMOGE: “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

Background – Yadana Project in BurmaUnocal 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.

Background – Yadana Project in BurmaUnocal: pipe building as long as 256 miles

(216 offshore + 40 onshore) for gas distribution from Myanmar to Thailand

There are pipelines’ part passing through the land that is inhabited by ethnic Karens, the most hostile tribe to the government.

Background – Yadana Project in BurmaThe government guaranteed the "security",

labors and land acquisition.The government allegedly used slave labors

from ethnic Karens and violence/brutality to secure the projects.

Residents were evicted without any compensation.

Unocal was aware of this situation.

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 the construction of the pipeline.• Pembela HAM percaya bahwa militerisasi tidak

hanya ditujukan untuk menjamin “keamanan”, tapi juga menyediakan tenaga kerja paksa untuk pembangunan infrastruktur jalur pipa

• SLORC memaksa suku karen yang rumahnya terkena proyek Yadana untuk pindah

Karen Tribe Claims Against Unocal• On Oct 15, 1996, 15 people from the Karen tribe sued

Unocal in U.S. Court on charges they and their families have 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 social programs for people that live in the area of pipeline construction

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

Ethical Issue # 1• Did Unocal act properly?

Ethical Issue # 1In terms of utilitarianism:

Unocal acted properly, because:The realization of investment had made

Burma's government and the people additional incomes, employments, technologies transfer, infrastructure developments, schools, etc.

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

Ethical Issue # 1In terms of justice:

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

Ethical Issue # 1In terms of human rights:

Unocal did not act properly.Although Unocal is not responsible directly,

they did not act properly by ovelooking the human rights violation (the right for living, equal treatment, decent wages, etc) to the Burmese (the Karens ethnic).

Ethical Issue # 2• Is Unocal morally responsible for what

happened to the Karens?

Yes, Unocal would be morally responsible. Although Unocal did not do anything against the law, the violation took place on the pipelines projects area which operated under Unocal’s surveillance.

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?

Ethical Issue # 3According to group discussion, the proper

way for unocal is to engage. The involvement from outside parties 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

the communities through CSR.

ConclusionUnocal did not do anything wrong directly, but by overlooking the human rights violations that happened around their jobsite, they are ethically responsible for the conflicts.

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