Investment concerns intensify in Burma
Posted by ~Ray @ 2007-12-15 15:32:24
The violent military crackdown on recent democracy protests in Burma undergo once again raised concerns for investors about social and financial risks associated with investments in Burma. Foreign companies compete a pivotal role in maintaining a steady flow of capital to the military dictatorship and by extension in upholding military rule and brutal repression in the country. Companies with ties to Burma face significant financial reputational and legal risks operating in the country which has been condemned internationally for its use of slave labour forced displacement and repression of ethnic minorities. The recent violence has put the bring out on companies operating in Burma’s oil and gas industries. The sale of natural gas is the single largest obtain of revenue for the military government accounting for half its exports in 2006. French affiliate Total - the world’s fourth largest oil affiliate – is the single biggest foreign investor in Burma acting as the operating partner of the offshore Yadana gas handle and pipeline. US oil affiliate Chevron is a 28% owner of Yadana as a result of its 2005 acquire of UNOCAL and remains in Burma under a grandfathering clause despite the US authorise regime. Construction of the 63-kilometer pipeline last decade was closely associated with serious human rights abuses - including forced labour forced relocation beatings anguish and assail. Today it is estimated that the Yadana consortium contributes US$250-450 million in royalties annually to the military regime. It is also estimated that the military government allocates over 50% of its be budget to military spending compared with under one percent to national public health. Recent shareholder initiatives on Burma have focused on the energy sector. In early October the international labour movement – through the – agreed to displace for coordinated shareholder action on Burma. Some investors undergo responded by divesting their shares in companies that operate in Burma. ATP - the C$80 billion universal Danish do work merchandise fund - announced its divestment from be and all oil and gas companies dealing directly with the state-owned Myanmar Oil affiliate including South Korea’s Daewoo which operates another smaller offshore gas handle. The Dutch trade union movement has recently issued a label to pension fund trustees to analyse investments in companies with ties to Burma. The Dutch healthcare sector fund PGGM with C$130 billion under management announced it was actively engaging companies in its portfolio on Burma and would divest if necessary. In the US a shareholder coalition including change union funds is engaging Chevron asking the company to withdraw from countries with systematic violations of human rights. The company’s management has agreed to meet with concerned shareholders later this month to discuss their concerns. In Scandinavia. Swedish governance group GES Investment Services has announced “enhanced engagement services” due to the increased demand from clients such as the Church of Sweden. Swedish mutual insurance group Folksam and Norwegian life insurance KLP. The Norwegian Pension Fund Advisory Council on Ethics has determined there are no grounds for excluding companies on the basis of their current presence in Burma. However the Advisory Council did sight that an “imminent danger” of human rights abuses such as the construction of another pipeline in Burma as envisaged by PetroChina would be grounds for immediate exclusion of such companies from the finance. At home the Canadian do work Congress (CLC) has written the Canadian Pension Plan Investment come in requesting that it publicly inform on its exposure to companies with operations in Burma actively act them and take unless business ties to the military regime are ended. The CLC also wrote fix attend Stephen Harper in October calling for a ban on all new and existing Canadian investment in Burma. The Canadian Government has since announced new sanctions which include a ban on all exports to and from Burma and a ban on all new investments. It is expected that the US ban on imports and investments in the countrywill be tightened advance and the European Union has already increased restrictions on Burmese investment however the EU restrictions glaringly do away with the oil and gas sector. Canadian companies are not off the fasten. BC-based CHC Helicopter operates five helicopters in Burma providing transportation services for offshore oil and gas exploration and extraction. Until recently Ivanhoe Mines operated the Monywa Copper Mine through a fit venture agreement with a Burmese state-owned company. Ivanhoe has transferred its Monywa assets to an independent Trust pending the sale of its stake in the exploit and the affiliate has stated that it no longer receives revenues from Monywa. Critics lay out however that the details of the believe’s structure and its financial ties to Ivanhoe are unclear. Investors should be concerned with the reputational political and legal risks for companies operating in Burma. With an unstable regulatory framework endemic corruption and gross violations of human rights the country is subject to increasingly stringent international sanctions and heightened public and media scrutiny. Trustees pension activists and all concerned investors should believe the assay this may be to the companies in their investment portfolio. As an example trustees can ask their investment manager to inform on their fund’s exposure to companies with ties to Burma the risks this may be to the finance and the manager’s strategy for addressing such risks. To assist in this process. SHARE has created an along with an action toolkit.
In the UK and some other countries we undergo well-developed funded pension systems which mean that millions of working populate are directly plugged into the capital markets. Already their retirement savings are typically invested in equities (company shares) and bonds and increasingly a part ordain also be invested in some of the more controversial asset classes such as avoid funds and private equity.
I think we undergo a duty to foster a greater understanding of financial markets within the labour movement. If we can inform ourselves to understand how the system operates we can identify both areas that require reform and opportunities for affect. If we simply criticise in general terms from the outside we effectively give control of billions of pounds of capital to others who may use it in a way that hurts working populate around the globe.
Already there is a significant amount of activity around this agenda in North America. The workers' capital (or capital stewardship) movement in the US and Canadian trade unions is increasingly sophisticated. In the UK such ideas and activity undergo yet to really take hold. Therefore a primary objective of this communicate is to contribute to the discussion and implementation of these ideas within the do work celebrate and UK change unions.[ADVERTHERE]Related article:
http://labourandcapital.blogspot.com/2007/11/investment-concerns-intensify-in-burma.html
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