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 Published by the Arakan Oil Watch, a core member of the Shwe Gas Movement
Bulletin 
The The The The The 
Volume 3, Issue 7  June-July, 2009
China to Start Building Shwe Gas Pipeline inSept Despite Concerns over Rights Abuses
Big Oil Companies Fuel Oppression in Burma
The IMF has stated that Than Shwe’s regime is not using oiland gas revenues for Burma’s education and health sectors.Burma watchers note that the regime uses the money forbuilding a new Capital, digging mysterious tunnels, and pur-chasing weapons. Activists argue that oil companies fuel theregime’s oppression. Oil and gas revenues are the largestincome source for Burma’s regime. Despite the misuse of revenues and the human rights and environmental abusesoften associated with projects, big oil companies from aroundthe world still remain in Burma.
Photo of dictator Than Shwe decorated with oil logos. (SGB)Chinese media reported in thebeginning of June that China will startbuilding US$ 2.5 billion oil and gas pipelinesacross Burma in September of this year.The pipelines will be used in part in anattempt to reduce China’s dependence onenergy supplies transported through theStraits of Malacca.“The section of the pipelines inMyanmar (Burma) will be built under thename of CNPC but whether CNPC orPetroChina undertakes the construction of the domestic section has not been decided,”the China Securities Journal reported, citingan unnamed CNPC official.According to earlier media reports thetwo pipelines, an estimated US$1.04 billiongas pipeline (Shwe Gas Pipeline) and aUS$1.5 billion oil pipeline, will start fromKyauk Phyu Township in western Burma’sArakan State and travel through centralBurma to Kunming, capital of south-western China’s Yunnan province.The 2,380 km Shwe Gas pipeline, witha transportation capacity of 12 billion cubicmetres per year, will transfer gas from theoffshore Shwe Gas reserves. The reservesare estimated at around 4.53 to 7.74 trillionJune 27, 2009 (SGB)
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 Published by the Arakan Oil Watch, a core member of the Shwe Gas MovementThe Shwe Gas Bulletin
Page 2
China Deepens Burma Relationship
While many countries and prominent world leaders callfor the release of democracy leader Aung San Suu Kyi andall political prisoners, the relationship between China andBurma’s military junta has grown stronger than ever.During Vice Senior General Maung Aye’s visit to Beijing inJune, the countries signed several new cooperativeagreements. This comes at a time when countries aroundthe world have increased sanctions on Burma, expressingconcern over the military regime’s farcical trail of AungSan Suu Kyi and several decades of brutal oppression of its ethnic peoples.During General Maung Aye’s visit to China, the twocountries signed agreements on economic and technicalcooperation, hydropower development, and a China-Burmacrude oil pipeline. Chinese Vice President Xi Jinping statedduring the meeting that whatever it may be, China is alwaysa good friend of Burma and will uphold its fair interests. Healso said that the two countries should implement ongoingprojects to boost their economies.However, supporting the military regime economicallyand politically means blocking the desire of over 50 millionBurmese people for real change and democracy. People of Burma are now demanding an end to new investment andeconomic cooperation with the unelected and suppressivemilitary regime.Investment in capital intensive projects only enrichesthe military regime and does not provide any developmentfor the country’s people. The regime squanders the revenuebuilding its new jungle Capital and buying military weaponsfrom China, Russia, and North Korea. The military regimecurrently earns more than US$ 1 billion annually from gasexports to Thailand. Though gas exports have been ongoingfor almost a decade, the country’s economic situation isstill deteriorating, making Burma one of the poorestcountries in the region.By signing agreements with Burma’s military regime,China will finally be able to create a secure energy importroute. According to reported details of MoUs, China willbuild an oil pipeline from western Burma, which sits on theBay of Bengal, to its landlocked Yunnan Province. Thepipeline will provide secure transport for about 80 percentof China’s crude oil imports from Africa and the MiddleEast, avoiding the narrow, pirate infested Straits of Malacca.Choosing its ally over India, Burma’s junta also awardedChina contracts for the purchase of the Shwe Gas, as wellas a second pipeline that will run alongside the oil pipelineand pipe gas to China for 30 years.In return, Burma’s military regime will likely expectconsistent economic and political support from China in theface of international pressure. The military regime willcollect a US$ 150 million annual transit fee for the oil pipelineand over US$ 2 billion in annual revenues from the sale of the Shwe Gas starting in 2012.However, these incoming revenues are not seen ascrucial for the needs of the people, as the military regimehas more than a few unfinished projects such as building its jungle Capital and a new nuclear reactor. The people of Burma will face increased forced relocation, forced labor,and other human rights abuses when China beginsconstructing the oil and gas pipelines in September of thisyear. Burma has no rule of law nor protections for humanrights and the environment.The people’s anger against the military regime is nowat a boiling point in Burma. The arrest of Aung San SuuKyi and continued economic and political instability couldlead the people at any time to come out into the streetsagainst military rule like in the 2007 and 1988 nationalmovements.Aung San Suu Kyi has said that any business dealswith the current military regime will not be legalized whena democratic government comes to power.
 
 Published by the Arakan Oil Watch, a core member of the Shwe Gas MovementVolume 3, Issue 7 
Page 3
 AOW 
Daewoo
“The Korean government sided completely anduncritically with Daewoo International and KOGAS onevery aspect of the complaint.”Matthew Smith, Burma Project coordinator at ERI, saidthat despite the conflict of interest, ERI were still surprisedat the rejection of the complaint.“There are certain elements of the Korean governmentthat do have an interest evidently in promoting business overconcern for human rights abuses and other elements of theOECD guidelines, [such as] sustainable development andenvironmental protection,” he said.An official from the Korean government’s oil and gasministry said that he was aware of Burma’s human rightsproblems, but that he personally thought Korea approachedcountries with only “a business mind” regarding foreigninvestment, adding that it “costs a lot of money” to investigatehuman rights abuses abroad.ERI called for the Burmese government to includeaffected people living in the vicinity of the pipeline in thedecision-making process, and called on the OECD to fillthe gap created by the Korean government’s inaction.
 Reporting by Francis Wade
Korea Rejects Burma Gas Project Complaint
June 15, 2009 (DVB)Conflicts of interestwithin the Koreangovernment have led to itrejecting allegations of human rights abusesconnected to Korean-backed natural gas projectsin Burma, according to areport released today.Still in construction, theShwe Gas project, whichwill pump Burma’s vastnatural gas supplies toChina, has been linked withcases of forced relocationof civilians and landconfiscation.Korean corporationDaewoo International part-operates the project, and in2001 formed an international consortium which includes thestate-run Korean Gas Corporation (KOGAS) to developthe Bay of Bengal gas field.Advocacy group EarthRights International (ERI) andcampaign group Shwe Gas Movement (SGM), supportedby Korea’s two largest labour unions, last year filed acomplaint to the Korean government regarding the pipeline.The complaint alleged that Daewoo and KOGAS “failedto practice due diligence to prevent negative human rightsand environmental impacts of the Shwe Project”, and thatthe project failed to respect international humanitarian law.Furthermore it alleged that the companies violatedguidelines for multinational organisations set out by theOrganisation for Economic Cooperation and Development(OECD), which advises governments on business andeconomic development.ERI today released a report citing “inherent conflictsof interest within the Korean government” that pushed it toreject the complaint.“The ministry tasked with receiving OECD complaintsis the same ministry tasked with promoting overseas energydevelopment projects and the same ministry that providedDaewoo a sizable loan to proceed with the controversialShwe Project,” ERI said.
Shwe Gas reserves are estimated at around 4.53 to 7.74 trillion cubic feet -equivalent to five years of Korean gas consumption. People of Burma call for a stop to the Shwe project, as the project fuells the military regime.
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