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Congress Bows to Big Oil in Burma

Image has not been found. URL: /wp-content/uploads/2008/09/feinstein1.jpgSen. Dianne Feinstein (D-Calif.) (WDCpix)

Caving to big oil demands, the Senate on Tuesday approved a plan that intensifies trade sanctions against Burma’s military regime but abandons an earlier push to penalize Chevron, the last major U.S. company propping up the repressive junta.

The move marks a departure from an earlier House-passed proposal that would have eliminated a large tax break for Chevron, potentially prodding the company to divest its share in a controversial natural gas field off the coast of Burma. Supporters of the House bill had said it would help destabilize Burma’s corrupt military leaders by slashing a vital source of their income.

“When the generals run out of cash,” said Rep. Tom Lantos (D-Cal.), who sponsored the House bill before he succumbed to cancer in February, “change will come to Burma.”

Congress_5761.jpg
Congress_5761.jpg

Illustration by: Matt Mahurin

Yet despite wide bipartisan support, the bill hit a stumbling block in the Senate, where several lawmakers objected to the Chevron provision. Sen. Dianne Feinstein (D-Cal.) was one such voice. She told Politico last month that forcing Chevron out of Burma would be “counterproductive,” because “other countries are going to take it over and, most particularly, the Burmese government will take it over. So what is gained by doing this?”

Many human-rights advocates say there is much to be gained, arguing that Chevron’s presence in Burma has a symbolic value that leaves Washington no moral suasion in convincing foreign investors to quit supporting the junta. “Unless Chevron is out of there, the United States doesn’t have the moral authority to tell other countries to get out,” said Nyunt Than, president of the Burmese American Democratic Alliance, a non-profit group.

Faced with election-year time restraints, however, House and Senate negotiators removed the Lantos Chevron provision. In its place is language urging the oil giant to get out of Burma voluntarily — something the company has said it will not do.

The House passed the compromise bill last week, and President George W. Bush, a vocal critic of Burma’s regime, is expected to sign it into law shortly.

The international outrage over the Burmese junta has intensified over the last year following several high-profile episodes. Last fall, the junta orchestrated a violent crackdown on thousands of monks and other pro-democracy protesters. More recently, the junta barred most international aid in the wake of Cyclone Nargis, which struck Burma’s Irrawaddy Delta in May. Estimates place the number of dead at more than 130,000. These actions pushed Congress to install stronger sanctions.

With several proposals floating around Capitol Hill, the major sticking point became how to approach Chevron, grandfathered to operate in Burma under current sanctions. The debate set Feinstein and other Chevron supporters against some House Democrats, who were fighting to preserve the Lantos bill as a memorial to their deceased colleague. Lantos had been a fierce advocate for human rights and was the only Holocaust survivor to serve in Congress. He died of esophageal cancer in February, after nearly 28 years in the House.

The debate has also carried a hint of election year politics. Sen. John McCain (Ariz.), the likely GOP presidential nominee, sponsored a bill last year that would have required Chevron to sell its share in Burma’s gas field, called the Yadana project. That position turned political convention on its head, with the Democratic Feinstein supporting the oil industry and the Republican McCain siding with human-rights advocates. McCain’s office did not respond to several calls and emails requesting comment.

Feinstein, a member of the same state delegation as Lantos, had long been one of Washington’s most vocal critics of Burma’s repressive regime. In February, for example, she joined Senate Minority Leader Mitch McConnell (R-Ky.) in sponsoring legislation to award the Congressional Gold Medal to Aung San Suu Kyi, the Burmese Nobel Peace Prize laureate who’s been under house arrest for much of the last two decades. Yet, on the topic of Chevron, Feinstein has aligned herself squarely behind the San Ramon, Cal.-based company.

Her support has not gone unnoticed. During her last reelection cycle in 2006, Feinstein took in $11,200 from the company — the third highest tally of all 535 members of Congress, according to the Center for Responsive Politics, a campaign watchdog group.

Feinstein spokesman Scott Gerber — pointing out that the California senator was not directly involved the House/Senate negotiations — referred questions to those who were.

Instead of targeting Burma’s gas and oil industry, the compromise bill goes after revenues derived from gem sales. A 2003 law banned direct gem imports from Burma, where more than 90 percent of the world’s rubies originate. But a loophole allows those imports to continue if the stones were processed elsewhere. The compromise bill would close the loophole.

The bill also requires the Treasury Dept. to submit a report detailing which international banks are harboring the assets of the regime’s leaders. Additionally, the bill creates a special envoy charged with aligning Burmese sanction policies between the United States and other countries. For some human-rights groups, the absence of the Chevron provision is a minor defeat.

“For us, the meat of the bill is still there,” said Jennifer Quigley, the advocacy coordinator for the U.S. Campaign for Burma.

Chevron, which owns 28 percent of the Yadana project, currently receives a large tax break for money it pays to the Burmese government. Marco Simons, the legal director of EarthRights International, estimated that the company takes in $100 million annually from the project, with roughly $30 million of that going to the Burmese junta. Simons said that eliminating Chevron’s tax break might be an appropriate penalty for a company propping up one of the world’s most abusive governments. But because another international company would likely swoop in to fill the void, he said, such a move would have little immediate effect on Burma’s political situation.

“It wouldn’t have affected the regime’s bottom line whatsoever,” Simons said.

But a number of human-rights advocates rejected that claim. Betsy Apple, director of the Crimes Against Humanity Program at Human Rights First, pointed to the sanctions targeting South Africa during the apartheid era, wondering what might have happened had the United States hinged its policies on those of other countries.

“It’s a cop out,” Apple said. “I think it’s a pretext for taking no action at all.”

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