Credit: Shwe Gas Movement

Burma’s state-owned energy firm, Myanma Oil and Gas Enterprise (MOGE), is making news as U.S. policymakers consider relaxation of financial services and investment bans in place for over a decade. Earlier this month, Nobel Peace Prize winner Aung San Suu Kyi warned the International Labor Organization that MOGE “lacks both transparency and accountability at present.”

Yesterday, Ambassadorial nominee Derek Mitchell told a U.S. Senate committee that “we are looking very closely” at MOGE, citing concerns about transparency and corruption.

The scrutiny of MOGE is well-deserved. Burma has vast oil, gas, hydropower and mineral potential, located mainly in the ethnic minority regions that continue to be areas of conflict. The government currently requires that foreign companies conducting oil and gas exploration be partnered with at least one domestic energy firm, usually MOGE. MOGE, which controls significant portions of key oil and gas projects, shares in the responsibility for the human rights abuses that the Burmese military has committed in the context of clearing land and providing security for those projects or pipelines. To make way for these projects, local populations are often forcibly removed from their land with little or no compensation and even subject to rape, torture and other forms of violence at the hands of the army.

We are deeply concerned about the possibility that the United States government may authorize U.S. corporations to engage in business dealings with MOGE. Chevron, the only U.S. oil corporation currently operating in Burma, has been pressured by investors and activists over human rights and environmental abuses. At the corporation’s annual meeting last month, nearly one-fourth of shareholders voted in favor of a resolution calling on the corporation to disclose its criteria for investing in or withdrawing from high-risk countries.

While this vote may sound like a resounding endorsement of Chevron’s corporate leadership, which opposed the resolution, the reality is otherwise. The management of a large, publicly traded corporation like Chevron generally exerts control over a majority of corporate shares. When a stockholder proposal receives support from nearly one-quarter of shareholders, it means significant institutional shareholders are questioning management’s position. Indeed, this resolution was put forth by the International Brotherhood of Teamsters and other major pension funds worked to support it, which spells trouble for business as usual.

Chevron, one of the few western corporations partnering with MOGE, would be wise to heed investor concerns about accountability and transparency. As for the U.S. government, The Washington Post gets it right in a June 27 editorial. Rather than give in to the big oil lobby, the United States should insist on transparency as a condition of investment. Instead, the U.S. government should press for greater fiscal transparency and accountability in Burma’s government, including over state-owned enterprises and the security forces, so that MOGE ceases to fuel unaccountable military financing, corruption and human rights abuses.

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