BA-5103 Final Project

Burma Pipeline / UNOCAL Case Study

The final project for our course will challenge you to apply the concepts and course themes while

analyzing a real-world business case. Your final project includes the following elements:

1. Read the following case material:

a. UNOCAL in Burma – Markkula Center for Ethics

i. Unocal in Burma – Markkula Center for Applied Ethics (scu.edu)

b. Additional material for your consideration:

i. “Burma Becomes a Test Case in Human-Rights Politics,” New Your

Times, January 15, 1989. Nexis Uni link

ii. “Challenges of Diplomacy; Banning New Investment in Myanmar,” New

York Time, February 14, 1997. Nexis Uni link

iii. “A Case for Investment in Burma,” International Herald Tribune,

February 6, 1997 – attached

iv. https://www.ogj.com/pipelines-transportation/article/17255947/unocal-

company-not-considering-leaving-myanmar-project-trial-reset

v. https://www.brookings.edu/research/economic-sanctions-too-much-of-a-

bad-thing/

vi. https://www.mmtimes.com/national-news/3487-total-e-p-to-boost-socio-

economic-outreach.html

vii. https://www.mmtimes.com/business/2984-energy-firms-channel-some-

profits-back-to-communities.html

BA-5103 Final Project

Burma Pipeline / UNOCAL Case Study

viii. https://www.mmtimes.com/national-news/5805-yadana-consortium-

provides-4-million-for-hiv-treatment.html

ix. http://www.irn.org/files/burma/unocal.html

2. Synthesize an original analysis of this case addressing the following questions:

a. Describe the ethical dilemma faced by UNOCAL

b. Identify the prominent stakeholders, their equities, and your recommended

approach/construct for addressing any competing stakeholder interests.

c. Assess UNOCAL’s decision to invest in the Burma pipeline using at least two of

the ethical frameworks discussed during the semester.

d. Discuss your ethical view regarding the concept that engagement is better than

isolation when trying to affect social or political change.

Specifics: Please complete your analysis in a 5–7-page (excluding cover and reference page)

Word Document with the following requirements:

• 12 Point Font, Times New Roman

• Double Spaced

• 1” Margins

• Cover page including Student Name, Assignment, Class Name, Date.

• Please include section headings in your paper to help organize and identify the

different components of your analysis.

• Please use proper APA citation format and attach a Cover Page and Reference

page to your report.

BA-5103 Final Project

Burma Pipeline / UNOCAL Case Study

• You should include references to at least 6 sources.

• Your analysis should be your original work with less than 20% of your content

being attributable to properly cited content.

This is a graduate level course, so your paper should be complete and thorough, and

should show an elevated level of analysis compared to that of an undergraduate

course. While much has been written on this and similar cases, I encourage you to

conduct your analysis without the benefit of hindsight.

BA-5103 Final Project

Burma Pipeline / UNOCAL Case Study

A Case for Investment in Burma

By John Imle, International Herald Tribune • Feb. 6, 1997

The participation of Unocal Corp. of the United States in a $1.2 billion project to develop a world-class natural gas field in the Andaman Sea off Burma and pipe the gas to neighboring Thailand for power generation has plunged the company into controversy. At its center is the question of whether engagement with Burma is preferable to isolation in bringing about positive change and improving living conditions and human rights.

This is a legitimate debate and Unocal respects the views of those who disagree that increased business improves human conditions. But many thoughtful observers, as well as the members of ASEAN, the Association of South East Asian Nations, are committed to economic and diplomatic engagement with Burma.

We in the United States are too often under intense fire from politicians and human rights activists who promote isolationism. They want the U.S. government to implement sanctions, banning future investment in Burma. If they have their way, Unocal and other American companies will be forced to pull out.

Advocates of sanctions believe this would bring about a change of government in Rangoon. But the history of sanctions against other countries clearly suggests that the critics of U.S. investment in Burma are wrong.

Sanctions are counterproductive. They hurt people, not regimes. Consider nearly four decades of failed U.S. sanctions against Cuba. Sanctions have damaged the economies of Cuba and other countries, and hurt ordinary people, but their leaders remain entrenched.

History also shows that real, long-term political change must come from within. Economic reforms almost always precede political reforms. Economic progress, fueled by foreign investment, provides the foundation for more democratic and open societies. This has been Unocal's experience over 30 years as an investor in large energy projects in Indonesia, Thailand and the Philippines.

Unocal's Burma project is basically a 30-year gas supply agreement between the Burmese and Thai governments — the first such cross-border commercial energy agreement between them. It is a contract that will contribute to long-term regional cooperation between two nations that have not always been on the best of terms.

BA-5103 Final Project

Burma Pipeline / UNOCAL Case Study

The first gas is scheduled to be piped to Thailand in mid-1998. Currently, all the project partners are providing capital. The earliest financial break-even point would be 2001, more likely 2002 or later. Early proceeds to Burma from sale of the gas to Thailand are already being earmarked for other energy projects that would provide an even broader underpinning for manufacturing and agriculture.

The construction of the onshore section of the pipeline in Burma is creating jobs, small industries and new opportunities for the 35,000 people who live in the area — a very poor region. Unocal and its partners are providing improved medical care, better schools, and sustainable livestock and agricultural development. Editors’ Picks

Unlike many of our critics, I have been to Burma and experienced firsthand the gratitude of the villagers for our presence. These people — Mon, Burmese and Karen — are also stakeholders in the project, a fact that should not be forgotten in this internation-al debate.

There is also a wider issue at stake for foreign investors and exporters. The growing trend toward using the business community as an instrument of foreign policy must be halted.

Economic isolation of Burma will not work. Three decades of self-imposed isolation have made the country one of the poorest in the world. To reimpose isolation would be a cruel trick on the 50 million people of Burma, many of whom are just beginning to benefit from economic opportunity and broader international contacts.

The U.S. government should keep the door open to Burma, using its diplomatic skills and taking advantage of the American Embassy in Rangoon. Diplomacy and business should play complementary roles in building economies and opening societies.

The writer, president of Unocal Corp. of the United States, contributed this comment to the International Herald Tribune.

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