Premier Oil Plc

Burma The development of the Yetagun gas project in Burma is now Premier Oil's largest asset by value. Burma is governed by one of the world's most brutal military regimes. It used to be one of south east Asia's most prosperous countries, but has now been given the United Nations' Least Developed Country status - putting it in the same league as sub-Saharan African countries. The regime has been charged by the UN International Labour Organisation with a 'crime against humanity' for its systematic abuses of human rights. It was condemned internationally for annulling the election in 1990 which was won by the opposition party National League for Democracy, putting its leader, Nobel Peace Prize Laureate Aung San Suu Kyi in house arrest and detaining many of the party members.

Premier Oil was the first company to sign an exploration deal with Burma's military regime for the exploitation of the Yetagun offshore gas field in May 1990. The development is now a joint project between Nippon Oil of Japan, Petroleum Authority of Thailand (PTT), Petronas (Malaysia's state owned oil company) and the Burmese state oil company, the Myanmar Oil and Gas Company (MOGE). Even though Premier's share is only 27%, they are the main operator of the project.

The Yetagun pipeline travels down the same route cleared for the Yadana pipeline, built in the mid-nineties by a joint venture between America's UNOCAL and Total of France. The building of the pipeline lead to the heavy militarization of the area. During the construction of the Yadana pipeline systematic relocation of villagers, forced labor and other human rights abuses took place in the area.

In 1996 the campaign group Earth Rights International (ERI) published a report describing how SLORC troops tormented local villagers. Many of those who did not flee to refugee camps in Thailand were put to work in forced labor camps. A US Embassy report issued in July 1996 stating that: "The military continued to force ordinary Burmese on a massive scale (including women and children) to contribute their labor, often under hard conditions, on constructing projects around the country".

Men and women interviewed by ERI told how they were made to work as porters for soldiers and forced to clear forest on the pipeline route. There were numerous reports of torture, rape, looting and the destruction of property in the area. ERI points out that SLORC soldiers are infamous for this sort of behavior, and the pipeline was simply a new opportunity for them to exercise these tactics. UNOCAL and Total denied the reports.

In 1997, following long-standing protests against Western investment in Burma, President Bill Clinton introduced US economic sanctions against the regime. At the time Texaco and Premier Oil were joint partners in the Yetagun project. Following Clinton's sanctions Texaco pulled out of the venture. Premier Oil bought part of Texaco's share and thus increased its stake from 20% to 27%.

According to UN and World Bank measures, the situation for Burma's population is deteriorating. The profits paid to the Burmese government will fund the military regime. The military dictatorship spends nearly half of its annual budget on the army; just 8% is spent on health and education. Income from foreign investment and trade strengthens the regime's stranglehold on its population.

In 2000, the British government urged Premier Oil to pull out of Burma, because of the human rights situation. The government said that it would not take any measures to force Premier Oil out of Burma, but hoped that they would do so voluntarily. Burma's democratic leader Aung Sun Suu Kyi has also pleaded to Premier to halt investment until the restoration of democracy. 'Premier Oil is not only supporting this military government financially, it is also giving it moral support, and it is doing a great disservice to the cause of democracy. It should be ashamed of itself'.

Premier Oil defends its Yetagun pipeline on the basis that it has been built after Unocal/Total's and that many of the accusations relate specifically to this project. However, Premier Oil clearly states in it's publication, "Yetagun Year 2000", that it has profited from the infrastructure built by Unocal/Total. Furthermore, in June 2001, Amnesty International released a report documenting serious human rights abuses committed by two Light Infantry Battalions who provide pipeline security.

Premier Oil has tried to curb the heavy criticism that it receives from campaigners and government by claiming that they contribute towards positive development in Burma. This has involved co-ordinating human right seminars in the country, attended by representatives from the local government, though such activities can only be seen as window-dressing in a country fully aware of its human rights abuses, and without freedom of speech, assembly and movement. Premier Oil has also established a socio-economic program intended to provide the local community with knowledge and practical skills.

A social audit was carried out by EQ management on behalf of Premier Oil in 2000. "The Social Performance Report 2001" is however seriously flawed. The report does not take into account the practical reality of current life in Burma. Warwick Business School, who verified the report, comment: "...given the acknowledged repression of critical political comment in Myanmar (Burma), the verifier is concerned that community members wanting to address negative issues relating to Premier Oil's national political impact, and/or the ramifications that this might have at the local level, will feel restricted... In the present political environment this unavoidably compromises the ability of Premier Oil's community stakeholders to be fully expressive...". They also note that "EQ spent less than one full day consulting local community members, clearly insufficient time to identify a representative range of indicators and issues when there are in excess of ten villages impacted by Premier Oil's operations." The refugees, who fled to Thailand as a result of the persecution around the construction of the pipeline, were not consulted at all, even though two Thai NGOs offered to facilitate meetings between EQ and the refugees.

The social audit completely fails to take into consideration the wider responsibilities of Premier Oil, such as: the pipeline revenue which supports the regime, the refugees who have fled the pipeline area, the continuing military occupation of the pipeline area and the abuses that take place as a consequence.