press release

Unocal outlines social, economic benefits of Myanmar gas project; disputes N.Y. Times allegations

El Segundo, Calif., Dec. 19, 1996 -- Unocal Corporation today issued the following statement from Roger C. Beach, Unocal chairman and chief executive officer, in response to a recent editorial in The New York Times calling for Unocal's withdrawal from the Yadana natural gas pipeline project in Myanmar.

In its editorial, The New York Times argues that the people of Myanmar would best be served by economic isolation -- and that the inevitable hardships this would cause will somehow result in the flowering of democracy and human rights.

If history has shown us anything, it has shown exactly the opposite: economic isolation generally causes chaos, suffering and hardship for the very people it was intended to help. It rarely does anything to advance democracy or improve human rights.

In the case of Myanmar, 30 years of self-imposed isolation brought only poverty and misery to the nation's people. Now, Myanmar is finally opening up to foreign investment and ideas. Certainly, the transition to democracy is not taking place as quickly as everyone would like. But given its economic hardships and long-standing ethnic divisions, Myanmar cannot be expected to instantly transform itself into a democracy. It is only through economic development that a strong framework for lasting social change can be established.

The Times asserts that Unocal "cannot claim it is bringing change to this blighted nation." But the Yadana project is doing just that. Our project has already provided significant benefits to the 35,000 people who live near the pipeline area -- an extremely poor and undeveloped region of Myanmar. In addition to creating high-paying jobs, Unocal and Total (the French oil company serving as project operator) have begun a program to provide improved medical care, new and refurbished schools, electrical power and agricultural development in the pipeline region.

The editorial implies that Unocal is profiting indirectly from the use of forced labor to build a railroad to "transport government troops to protect the pipeline." But there is absolutely no connection between this railroad and construction of the Yadana pipeline. In fact, the railroad right-of-way runs perpendicular to the pipeline, and the railway itself will not be completed until long after the pipeline is up and running.

Furthermore, the Yadana project has adhered to strict standards covering employment practices. There has been no forced or conscripted labor on our project. All workers are paid a higher-than-average wage, and are paid directly.

The editorial is also inaccurate in its characterization of Unocal's shipment of fertilizer on credit to Myanmar as a "bailout" and a "lifeline" for the government. This is unfair and simply untrue. Unocal shipped the fertilizer to enable Myanmar to increase its agricultural production. We will be paid back -- with interest -- from future pipeline revenues.

Would the people of Myanmar be better off if Unocal left, or if we'd never come? Would their prospects be brighter without the Yadana project? They certainly don't think so!

Earlier this year I visited seven villages in the pipeline region -- none of which have been "relocated," as some groups have charged. I saw first-hand the positive impact of the good works we're undertaking. Our group was warmly received by the local residents everywhere we went. Everyone we spoke with supported the pipeline project. They clearly do not want us to leave. Our project is directly and tangibly improving the quality of their lives.

Unocal's withdrawal would only serve to reduce U.S. influence in Myanmar. It would also further marginalize our nation's influence with ASEAN and other Asian nations that have commerce and diplomatic contact with Myanmar. Our departure would certainly not foster democracy or advance human rights, and would have virtually no economic impact. That's because our investment would be easily replaced by foreign companies.

The people of Myanmar desperately need projects such as Yadana to provide employment, improve living standards and demonstrate the value of free-market economics. Economic advancement, in turn, will help pave the way for social and political reform. This is the only effective and lasting way to advance human rights. We've seen this kind of progression take place in Thailand, Indonesia, the Philippines, and many other developing nations in the region. We're seeing it take place, slowly but surely, in China. And we will see it in Myanmar. Shutting off American investment and influence would not accelerate the nation's transition to democracy. The best way for America to advance this process is by remaining engaged and involved in the nation's economic development.

As a private company, Unocal does not support or oppose governments. Our proper responsibility is to find, develop and market resources to help people meet their growing energy needs.

I am proud of our involvement in the Yadana project. It will provide substantial, long-term benefits to the people of Myanmar, and help open the country to new ideas and opportunities. As the first cross-border project between Thailand and Myanmar, it is also helping to foster much-needed regional cooperation and stability.

Updated: December 1996