Rolls-Royce Among Corporate Backers Of Burma Regime

by Marwaan Macan-Markar

(IPS) BANGKOK -- Rolls-Royce, a venerated name in British corporate culture, is in being criticized for allegedly ignoring its social responsibility.

It is being charged by one of the world's leading trade union movements of having business links in military-ruled Burma. Rolls-Royce's name appeared this week in a list compiled by the International Confederation of Free Trade Unions (ICFTU).

Rolls-Royce is among the new names in the list of 439 multinational companies with economic ties in Burma, charged the 28-page document, 'Doing Business with Burma,' that was released by the Brussles-based ICFTU (PDF).

Other prominent names from Britain's corporate world in this notorious list include the insurance company Lloyd's of London, the Cambrian Group -- a conglomerate of petroleum consultants, pharmaceutical giant GlaxoSmithKline and the wood industrialist Robbins Timber.

"The main reason why foreign enterprises should not engage in investment or trade with Burma is because of the financial benefits that the junta reaps from these activities," states the ICFTU in its report. "(It) contributes to allowing the military to remain in power and perpetuate their criminal rule over the country."

The ICFTU's charge against Rolls-Royce is echoed by another critic of Rangoon's junta, the London-based Burma Campaign U.K.

"Through its Singaporean subsidiary, Rolls-Royce has a contract to supply and service aircraft engines for at least one Burmese airline. All airlines in Burma are owned by the regime or their cronies," declares the Burma Campaign in its 'Dirty List' of foreign companies either trading or having investments in the Southeast Asian country.

In contrast, Rolls-Royce declares in its website that it strives to be a responsible corporate citizen.

"The Group attaches importance to the pursuit of excellence as a responsible corporate citizen in its operations throughout the world and continues to develop its approach to corporate social responsibility," the multinational states in its on-line annual report.

Clearly, the ICFTU is hardly impressed by such explanations from companies. That Burma has provoked this push by the ICFTU -- which wants foreign companies to halt their investments in the military-ruled country -- is due to the litany of human rights violations that have little parallel elsewhere.

"Burma is the only country for which we call for disinvestment," Fons Vannieuwenhuyse, a researcher at ICFTU, told IPS. "The Burmese generals have an overwhelming grip on the economy, whereby nearly all foreign business will bring financial benefits for an elite few."

"Investing in Burma is not possible without the agreement of the junta," adds the ICFTU, which launched its campaign against the military regime in the early 1990s. "Over the last 15 years the military dictatorship in Burma has moved itself into a position of virtual control over all aspects of the business sector."

That reality is best reflected by the State-owned Economic Enterprise Law of 1989, which gives the junta "the right to control 12 key areas of economic enterprises." These economic areas range from exploiting the teak forests for trade, exploring and extracting petroleum and natural gas, air transport and railway services. Also covered under the 1989 law are banking and insurance services.

"Foreign businessmen report that to do business one must 'make a deal' with a state-owned firm, a firm controlled by a senior military officer or pay at least a five percent commission to a uniformed officer," the report states.

Besides that is the widespread use of forced labor -- sometimes in slave-like conditions -- endorsed by the military regime. According to the International Labor Organization (ILO), an estimated 800,000 people are subject to forced labor in Burma.

The civilians condemned to such work at the point of a gun have to clean roads, carry heavy loads for the army, construct military buildings and work on agriculture and infrastructure projects.

The Geneva-based UN labor agency has proved that outside pressure can force the military rulers to blink, consequently leading to marginal attempts at reducing the level of rights violations.

That prevailed in 2000, when the annual ILO conference -- which includes governments, employers and trade unions -- took the unprecedented step to approve severe restrictions, including sanctions, because forced labor continued to prevail in Burma.

Soon after, the State Peace and Development Council (SPDC), as the military government is officially known, agreed to enforce a legal order, banning the heinous act.

However, the ILO conference in November last year conceded that such hints of reform from Rangoon had amounted to naught. It consequently issued a new warning to the SPDC: that harsh sanctions -- including a call on UN agencies to review their relations with Burma -- would be enforced by this March if forced labor was still around.

"Campaigns like the one launched by the ICFTU can help produce change, since our work is complementary," Sophy Fisher, ILO's information officer for the Asia-Pacific region, told IPS. "Ending forced labor requires more than legislating against it. There also has to be a change of attitudes among employers and even consumers."

That such campaigns to blacklist global brand names are having an impact is reflected in the international companies that have pulled out of Burma. They include Pepsi Cola, Levi Strauss, Adidas, Carlsberg and Premier Oil.

In addition, Burma's foreign direct investment (FDI) numbers also show a slide. In 1999, it attracted $304 million , in 2000, the amount had slipped to $208 million and by 2002 the figure was $191 million, states the ICFTU report.

"Companies doing business in Burma have to consider if a stain on their public image is worth the price," Debbie Stothard, of the regional human rights lobby Alternative ASEAN Network on Burma (ALTSEAN), said in an interview. "More and more, they are being held accountable by affluent consumers who are worried about the ethics of companies."

Burma is one country where foreign companies with investments cannot hide from "ethical and social responsibility issues," she added. "It is universally known that to do business in Burma you have to dance with the devil."