Total in Burma : the yadana pipeline project

1 - Did Total use forced labor to build the Yadana pipeline?

2 - What role did the Myanmar Army play during construction of the pipeline?

In general, a country’s government is responsible for maintaining law and order.

In this case, the Army began operating in the pipeline region around 1988, well before Total arrived in Myanmar, at a time when the new government stepped up efforts against rebels in different parts of the country. The Army’s activity was entirely unrelated to the project. The military’s presence was strengthened following a March 1995 ambush of a truck working on the project, an attack that killed five people.

The Army was not present on the worksite, where security was managed by Total and its subcontractors, but troops were operating in the general area to keep guerillas from getting close to the site. Via MOGE, the state-owned oil and gas company, Total was required to keep the Army regularly informed of how work was progressing and where teams were operating. However, we have never had a contractual relationship with the Army, given it instructions, or paid it any money.

To ensure the safety of project personnel and comply with its long-standing practices, Total took defensive measures that it felt were both normal and necessary, such as introducing security teams, ID badges, protective enclosures, radio check-ins, and rules covering movement and access.

Aware of the risk that the Army might requisition villagers for forced labor, we provided effective protection for inhabitants:

	-	Early in the project, communication channels were established with villagers through Village Communication Committees, communication officers, physicians and agriculturalists living in the villages, and villagers hired by contract to work on the project. In this way, our teams knew immediately what was happening in the field and were able to intercede in cases of abuse.
	-	From the beginning, Total made it very clear to government officials that forced labor was unacceptable and ensured that the Army did not resort to this practice in the pipeline region.

3 - Did the pipeline project cause villagers to be relocated?

No one in the pipeline region has been relocated since Total’s arrival. Long before the pipeline project was first considered, one village was relocated, in an unrelated development that most likely occurred in 1991 or 1992. In one of the initiatives undertaken as part of the Socio-Economic Program, Total arranged for any of these displaced villagers who so desired to return to their former homes in 1997. Generally speaking, it is inaccurate to say that the Army “secured” the region before Total arrived.

Population in the pipeline region has grown from 35,000 when construction began to over 50,000 in 2006. This increase contrasts with the situation in most other rural areas of Myanmar, where people have tended to migrate to the country’s major cities or to Thailand. It also attests to the good living conditions in the pipeline region and to the Yadana project’s contribution to developing the local economy.

4 - How do the villagers feel about Total’s presence?

The trusting relationships developed with the inhabitants of the 25 villages in the pipeline region constitute our most effective response to critics. This trust was created through the close contacts forged with villagers since early 1995 by our Socio-Economic Program teams, as they met with inhabitants and explained the Yadana project. As they deepened their understanding of local needs, the teams have helped villagers to implement their own projects, defended villager interests and ensured their safety. From the beginning, these relationships have been nurtured by the project’s Myanmar employees—the physicians, veterinarians, agriculturalists and communication officers who live in the villages, side by side with inhabitants, who can discuss their concerns openly, without intermediaries or fear of reprisal.

We made sure that the pipeline project has inconvenienced people as little as possible. Its route was chosen to avoid villages and compensation was paid to farmers temporarily or permanently prevented from using some of their land. Roughly one-third of construction workers were hired locally, with jobs fairly distributed among the villages.

Outside observers—members of the Collaborative for Development Action (CDA) in particular, but also journalists, diplomats and representatives of NGOs—have visited the site and noted that villagers are satisfied with Total’s presence and with the Socio-Economic Program implemented for them.

5 - Why has Total stayed in Myanmar while many other Western companies have left?

A number of Western companies, particularly from the United States, have left Myanmar for various reasons, although all have been subject to pressure from activist organizations. Total has stayed because we feel that, independently of the pipeline project, our presence is beneficial for the country and that pulling out would create a number of problems for the Myanmar people without offering the slightest advantage.

In fact, the country derives a great deal of benefit from having the Yadana project managed by a socially responsible company.

	-	Employment conditions. All employees receive higher-than-average wages for the country and are protected by a social safety net. What’s more, the terms of their work contracts, which comply with Total standards, may have a spillover effect on local legislation. The stringent requirements placed on local subcontractors (work contracts, health and safety guidelines, minimum wages, etc.) are having a similar impact.
	-	Economic benefits. A number of subcontractors with whom the Group has forged regular, cooperative relationships have been able to expand and improve their technical skills. The project has also created a range of job opportunities and markets for nearby communities.
	-	Training. During the construction period, nearly 2,000 people were trained in a variety of trades and assigned to technical positions. A US$10-million training program provided more than 100 skilled technicians and managers with the advanced expertise they needed to manage the operating facilities.
	-	The Socio-Economic Program. Thanks to this program, some 50,000 people are now healthier and better educated, earning higher wages, and, most importantly, living in a secure environment.
	-	Socio-political benefits. Other significant contributions include the creation of a civil society in the 25 villages located in the pipeline region and the elimination of forced labor in those villages through ongoing constructive dialogue with government authorities.

We feel that withdrawing from a country with serious problems is hardly the best way to help it resolve those problems.

6 - Total supports the UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights. Doesn't this support conflict with your presence in Myanmar?

7 - Is the Socio-Economic Program scaled to meet Myanmar’s problems?

From 1995 to 2006, the Socio-Economic Program (SEP) has disbursed some US$ 14.1 million, with more being spent during the first years when a large amount of infrastructure was built. Current outlays exceed US$1 million a year (US$1.4 million in 2006). Program costs are shared by the co-venturers in proportion to their investment in the project.

The SEP budget is considerable compared to international aid programs in Myanmar, although in fairness, many of these programs have been cut back because of the country’s political situation. It has been estimated that since the mid-1990s, Myanmar has received around US$50 million a year in bilateral and multilateral public development aid.

However, financial outlays are neither the only nor the best way to judge the effectiveness of the SEP initiatives, for several reasons:

	-	First, the performance indicators—target population, declining mortality and illness, doubling of school enrollment, increases in crop and animal production—speak for themselves.
	-	In addition, success has been driven by the very intense personal involvement of the Socio-Economic Program teams—and of Total E&P Myanmar employees in general—and by the very positive local response to the program, due in part to the highly decentralized management of the various projects through the Village Communication Committees..
	-	Lastly, the initiatives have been designed not to create dependence but rather to produce sustainable activities and behavior.

Initially applied to 13 villages located near the worksite, the program was extended to 12 additional villages since 2001. Since then, it has been further widened, and today a quarter of outpatients and nearly a quarter of in-patients in the Kanbauk hospital and over one-third of boarding students in the Kanbauk school, a quarter of outpatients and nearly a quarter of in-patients in the Kanbauk hospital come from villages outside the pipeline region.

Total and its partners are committed to expanding their socio-economic initiatives outside the pipeline area. For example, they support a national program to combat blindness led by US-based Helen Keller International Fundation and orphanages that are home to 1,000 children in the Yangon region. They are also examining other actions that would enable even more Myanmar inhabitants to enjoy the benefits of the Yadana project. Such is the case with the public health initiative in Myanmar designed to support and treat people living with HIV/AIDS in the Mandalay region which they joined in early 2005.

Obviously, the Yadana Socio-Economic Program alone cannot resolve Myanmar’s problems, which are due both to the political situation and to under-development, but the presence of a company like Total can help get the country moving in the right direction.

8 -Is there any way to monitor how the revenues generated by the Yadana project are used by the Myanmar government?

The Extractive Industries Transparency Initiative (E.I.T.I.) is designed to monitor revenues. Launched in 2002, approved at the G8 meeting in Evian in 2003 and implemented by a growing number of countries, the E.I.T.I. aims to compare the total amount of revenues paid to a State by extractive industries to the amounts budgeted and spent.

As a partner in this initiative from the outset, Total is determined to contribute to it by:

	-	Committing to a global process involving all oil industry operators—host countries, listed companies, independent companies and state-owned companies.
	-	Reporting the amount of taxes and royalties paid to host countries, insofar as contracts allow, to a competent, recognized, independent international organization.

Our medium and long-term objective is to implement the E.I.T.I. in Myanmar, even though the current political situation is not conducive to this.

In addition to this necessary transparency, a multilateral organization, such as the International Monetary Fund (IMF) or the World Bank, would be the only organizations with the legitimacy to assess how any State uses financial resources generated when private companies pay taxes. This role could not be assigned to a private company.

9 -What’s your response to people who accuse Total of preventing the European Union from imposing sanctions on Myanmar, through pressure on the French government?

As part of the actions deployed by the European Union, the French government has indicated its preference for constructive engagement, rather than sanctions, in all recent international issues, whatever French companies operated in the countries concerned. This policy of dialogue is also preferred by a number of European governments, as well as a growing number of opinion leaders and experts in Southeast Asia, Europe and internationally. Clearly, such a stance is shared by a very large number of participants. No pressure is applied.

10 - How do you explain the fact that the situation in Myanmar is almost unchanged, despite your commitment to constructive engagement and your work to promote it?

Total assertively supports local residents in Myanmar, whose living conditions are improving very significantly. We closely monitor the local and national impact of our actions, as do independent organizations, which have clearly established their benefits. In addition to causes inherent to the current situation in the country, Myanmar’s weak development can be attributed far more to sanctions than to engagement on the part of the international community. For the past 15 years, there has been strong Western pressure on foreign investment. If other companies operated in Myanmar, the results Total has obtained would be cascaded more widely.

11 - What would happen if Total were to withdraw from Myanmar?

If we decided to leave, we would immediately be replaced by another company who might not apply the same social or ethical standards. There would be no real impact on the State’s revenues or on the political debate, but there would certainly be a negative effect on its people. As long as we believe our operations on the Yadana project can contribute to the welfare of the people of Myanmar, we are committed to staying in the country and to demonstrating that our presence is more beneficial for the Myanmar people than our absence could be.