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[NBH03114@xxxxxxxxxxxxxxxx]

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FROM:NBH03114@xxxxxxxxxxxxxxxx
Burmese Relief Center--Japan
DATE:April 4, 1995
TIME: 8:51PMJST
SUBJ:BURMA SHAVED


BUSINESS ETHICS magazine
March April 1995

"BURMA SHAVED"

The SEC is cutting off shareholder debate on U.S. corporate
support for the brutal Burmese government

By Ric Waldman 

Quick, name the most profitable democratically governed
institution in the world. No, it's not the Japanese government,
and it's certainly not the debt-ridden U.S. government.

The answer sits high up on the Fortune 500 list: Exxon, with
earnings of  $5.3 billion in 1993.  Democratic?  Sure thing. 
Shareholders own the giant oil conglomerate--just as they own
every other publicly traded corporation.  The 1980s vividly
demonstrated this fact, when shareholder activism played a
role in the South African divestiture movement, which helped
in the dramatic dismantling of apartheid.  But now, just as
investors have become emboldened by their ability to influence
corporate policy, the Securities and Exchange Commission
(SEC) is moving to undermine their efforts.

For the past four years, the SEC has repeatedly moved to block
social responsibility shareholder resolutions like the kind that
helped force companies to stop doing business in South Africa. 
This comes without consent from Congress, which in 1934
outlined the rights of shareholders to address their co-owners
through resolutions included in company proxy statements.

Last spring, for instance, the SEC disallowed resolutions
relating to investment in Burma, where a brutal and corrupt
military junta is systematically murdering and imprisoning its
opponents, selling off virgin rain forest, dealing in the heroin
trade, and enslaving ethnic minorities.

Foreign oil companies, including Texaco Inc., Unocal Corp,
and Total, have invested over $300 million in Burma in search
of oil and natural gas.  PepsiCo Inc. has invested in a bottling
plant, and some U.S. clothing manufacturers continue to be
attracted to the cheap labor there.

This comes despite a stern warning from the International
Confederation of Free Trade Unions: "Burma's regime has
managed to stay in power, in part, because of revenues
generated by foreign corporations to buy weapons and to keep
the Burmese people pacified by force.  In addition, the
presence in Burma of foreign corporations lends the military
junta a false sense of legitimacy."

The SEC's stated reason for blocking these resolutions? 
Because companies involved did less than five percent of their
business in Burma, and because the resolutions did not raise a
"significant" issue.

Hogwash.  Had this line of reasoning been applied to South
Africa, an important voice in the fight against apartheid would
have been silenced.  In fact, there is a striking parallel between
Burma and South Africa.  Aung San Suu Kyi, the head of the
pro-democracy National League for Democracy and a Nobel
Peace Prize winner, has been under house arrest since 1989. 
Her party, like Nelson Mandela's formerly outlawed African
National Congress, has a clear mandate to represent the
oppressed population, having garnered 82 percent of the seats
in a 1990 democratic election.  But the Sate Law and Order
Restoration Council seized power instead, and has ruled ever
since.

Despite the SEC's best effort to stifle debate, some companies
may be getting the message.  Under growing pressure, Amoco
in March 1994 announced it was withdrawing from Burma. 
The company, which was involved in successful offshore gas
and oil exploration, cited "economic" reasons for its decision
and said organized boycotts played no role.

Shareholders from another company involved in the pipeline
project, Unocal, managed to bring a resolution to a vote.  It
received 15.3 percent -- considered quite high for a social
responsibility resolution -- and attracted major news coverage.

Clothing manufacturer Liz Claiborne last year announced it
was following the lead of Levi Strauss Associates Inc,, which
stopped doing business in Burma in 1992.  "Though the
facilities with which we work have complied with our strict
human rights standards, we cannot support the activities of this
country's current government," said Liz Claiborne Chairman
Jerome A. Chazen, in a statement issued November 14, 1994. 
And last month, clothing maker Eddie Bauer announced it was
pulling out of Burma for similar reasons.  

Still, the SEC is standing firm in its anti-resolution position,
which activists feel certain comes at the behest of corporate
lobbyists.  And it recently received support on its position.

Last year, U.S. District Court Judge Kimba Wood found in
favor of a group of plaintiffs who sued the SEC for failing to
properly involve the public in this rule change.  In January,
however, the SEC won an appeal of Judge wood's decision.

It is to the great shame of U.S. citizens of conscience that the
SEC is contributing to the crisis in Burma by helping
corporations silence their critics.  Congress, which passed the
laws giving shareholders a voice in corporate policy, needs to
be dragged into the debate, and quickly.
----------------------------

Ric Waldman is a writer in Hopkinton, New Hampshire
(Business Ethics, March April 1995, pg. 8)