Unocal Conspiring With Narco-Traffickers
Los Angeles-based Unocal has become an active player in the expanding global heroin trade as a result of the oil giant's business activity with the narco-dictatorship of Burma (also known as Myanmar), according to an affidavit filed as part of an ongoing federal lawsuit. The affidavit -- filed April 7 with the U.S. District Court in Los Angeles -- states that the government-controlled Myanma Oil and Gas Enterprise (MOGE) has been the main channel for laundering the revenues of heroin produced and exported under the control of the Burmese army."The legal document was filed in support of a suit that seeks to hold Unocal -- the largest American investor in Myanmar -- liable for widespread human rights abuses allegedly committed by the Burmese regime. Francois Casanier, an associate researcher for the Paris-based Geopolitical Drugwatch, wrote the affidavit. Unocal and the French oil giant Total are partners in a joint venture with MOGE to build a $1.2 billion gas pipeline project through southern Burma. The 14 plaintiffs in the federal lawsuit are ethnic minorities who live in the region where the pipeline is being built. They charge that the Burmese military, in providing security and infrastructure support for the pipeline's construction, is committing human rights abuses, including forced labor, forced relocations, rape, torture and killings.A little-noticed March 25 ruling by Federal District Judge Richard A. Paez held that Unocal and its executives could be held liable for illegal and repressive actions committed by the Burmese government in the course of their business dealings. The court action, the first of its kind, was reported by several newspapers in mid April. But the explosive contents of Casanier's affidavit, which have received virtually no coverage, paint a disturbing picture of an oil giant benefiting from the international drug trade.DRUG ECONOMYAccording to a 1996 State Department report, Burma now supplies over 50 percent of the world's heroin and 60 percent percent of the heroin sold in the United States. "Drug traffickers and their families are among the leading backers of high-profile infrastructure projects in Burma," said Robert Gelbard, Assistant Secretary of State for International Narcotics and Law Enforcement Affairs. "They launder their money with impunity in banks controlled by the military," he says. In announcing sanctions against Burma on April 22, President Clinton stated The regime has shown little political will to stop the narcotics exports from Burma and prevent illicit drug money from enriching those who would flaunt international rules and profit by destroying the lives of millions. These sanctions are not retroactive, and will not affect companies like Unocal who are already invested in Burma.The plaintiffs have submitted Casanier's sworn affidavit in support of a request for a preliminary injunction that would prevent Unocal from doing any further business in Burma pending the outcome of the case.In his affidavit, the French researcher lays out a compelling case that the foreign partners of Burma's ruling State Law and Order Restoration Council (SLORC) provide "big shields for [the] money laundering" of drug dollars. Casanier states that because "heroin has become the country's highest valued export, accounting for 50 percent to 70 percent of the cash flow into the country," money laundering strategies have become an integral part of government operations. "MOGE has transferred hundreds of millions of dollars into Singapore banks since setting up the joint venture," states the affidavit by Casanier, "[yet] it has no assets other than the installments of its foreign partners and makes no profit." According to Casanier's four year investigation, MOGE has been able to purchase military hardware from Portugal and Poland, run embassies in Europe, and invest in companies at home, all through the use of drug money.Randy Renick, an attorney with Hadsell & Stormer handling the federal lawsuit, said that the drug allegations are directly related to human rights aspects of the case because the military has used its extensive arsenal, purchased with profits from the drug trade, against the Burma people while protecting foreign investments. According to Renick, Casanier's sworn declaration to the court "provides irrefutable evidence that Unocal is in partnership with criminal drug dealers who are making profits off the backs of the indigenous people of Burma."In January, the SLORC launched a series of on-going military offensives against the Karen and Mon, ethnic minorities living in the area surrounding the pipeline, sending thousands of refugees fleeing into Thailand. The Karen, who have been struggling for autonomy and democracy in Burma for decades, have been hit particularly hard by the assaults."UNOCAL and TOTAL knew or should have known that MOGE has been heavily involved in laundering the proceeds of SLORC's heroin trade," states Casanier's affidavit, "both at the time they originally contracted with MOGE and in January of 1997 when they signed additional [business] contracts."CONCERNS FROM WITHINIn December -- the month before Unocal signed those new contracts -- a Unocal shareholders' resolution based on the drug allegations was introduced by the 90,000 member Oil, Chemical and Atomic Workers International Union (OCAW). The resolution calls for Unocal board members to investigate whether MOGE is a drug money-laundering front for the Burmese junta and also "the extent to which Company officials have been aware of any facts linking MOGE to drug laundering."Unocal's board of directors said that the company has yet to investigate the money laundering allegations. "Proving or disproving these allegations would require an investigation that is not only illegal but would subject Unocal officers and directors to criminal penalties [in Burma]," a board statement explained. OCAW spokesperson Joe Drexler said he found that suggestion ridiculous. "It is absurd that Unocal would be concerned about legalities of conducting an investigation in a country controlled by an outlaw regime which deals in drugs, violates international law continuously and creates its own laws to suit its own purposes," Drexler said.Both the Burmese government and Unocal deny all charges. The charges are politically motivated," said a spokesperson for the Burmese Embassy in Washington, D.C., who asked not to be identified by name. MOGE is a state run company -- run in accordance with rules and regulations -- and it can't do anything outside the law." Barry Lane, a Unocal spokesperson in Los Angeles, said that the charges are absolutely false and outrageous...It's an insult to think we'd involve ourselves in the drug trade." On March 5, Unocal was handed two major setbacks by the U.S. Securities and Exchange Commission (SEC}. It denied the the oil company's request to exclude the OCAW resolution from its upcoming June 2 shareholder's meeting. On the same day, the SEC also gave the Interfaith Center on Corporate Responsibility, composed of 256 religious groups who control assets of $50 billion, the go ahead to introduce a second shareholders resolution attempting to restrain Unocal from doing business with Myanmar. "If the drug-laundering allegation is true, it is very unlikely that this could have occurred without the knowledge of Unocal officials," said Robert Wages, president of the OCAW. Uncovering the truth may mean that Unocal bears direct responsibility for the rise in heroin use in the US."In an interview on April 19, Casanier expressed concern that if Unocal and Total are allowed to move forward unchecked, "it will be a green light for everybody to jump into the Burmese market and develop activities which will be definitely connected with drug money laundering on a big scale."And, Casanier said, "not only in Burma, but everywhere where there is dirty money involved, the Burma case will be considered an example."Meanwhile, the great oil rush to Burma has proceeded with Arco following Unocal's lead. In partnership with MOGE since 1995, ARCO notified the SLORC in late March about a new gas well just discovered off Burma's coast. On February 12, Reuters reported that Texaco signed a deal with Thailand to sell that country natural gas drilled in the same area as the Unocal drilling fields.