Burma

An Issue for Investors

Before Tiananmen Square, there was Burma. In 1988, the Burmese army declared martial law and brutally cracked down on peaceful pro-democracy demonstrators. Troops killed, injured and imprisoned thousands of civilians.

In the 1990 Burmese elections, the National League for Democracy, led by Nobel Peace Prize Laureate Aung San Suu Kyi, won more than 80% of the seats. However, the ruling Burmese military junta effectively annulled the elections and refused to allow the elected representatives to form a government.

Often described as the “Nelson Mandela of Asia,” Aung San Suu Kyi has repeatedly called for economic sanctions as a means to press the military junta to open talks with the democracy movement. She has called on the international community to act stating: “Please use your liberty to help us promote ours.”

Despite being under virtual house arrest for ten years, Aung San Suu Kyi’s example has helped energize people worldwide. The governments of the United States, European Union and Japan have enacted sanctions and limited aid to the junta.

It is at the grassroots level that Aung San Suu Kyi’s call to the international community has ignited a worldwide campaign similar in scope and tactics to the anti-apartheid movement of the 1970’s and 1980’s. Dozens of companies - including major multinationals such as Ericsson, PepsiCo, and Texaco - have withdrawn from Burma amid pressure from shareholder resolutions and boycotts by consumers, universities and local governments.

What We’re Doing About This Issue

Shareholder Pressure
Trillium Asset Management Corporation (”Trillium”) has led the campaign by shareholders to press companies to withdraw from Burma. In August 1993, we convened a strategy meeting of concerned investors and Free Burma activists to organize the filing of shareholder resolutions at companies doing business in Burma. Later that Fall, Trillium joined other shareholders - predominantly religious investors affiliated with the Interfaith Center on Corporate Responsibility - in filing resolutions at Amoco, PepsiCo, Texaco, and Unocal. Of those companies, only one - Unocal - still operates in Burma.

For four years, Trillium submitted resolutions at Atlantic Richfield Company (ARCO) that highlighted the company’s operations in Burma. ARCO withdrew from Burma in August 1998. Weeks later, we filed a new resolution at the oil company Baker Hughes, which in 2000 also withdrew from Burma.

Enacting Selective Purchasing Laws
In the 1980’s, action by U.S. cities and states set the stage for Congress to enact sanctions on South Africa over President Reagan’s veto. We have been active in adapting the tactics of the anti-apartheid campaign for use by the Free Burma movement.

Since 1994, Trillium has organized meetings of the New England Burma Roundtable. The New England Burma Roundtable advocated passage of the Massachusetts Burma Law, modeled on similar state and local selective purchasing laws aimed at companies that did business in South Africa during the anti-apartheid campaign. Signed into law in 1996, the Massachusetts Burma Law effectively barred Massachusetts state agencies from buying goods or services from companies that do business in Burma.

We have also assisted grassroots citizens groups in several countries to help enact similar Burma selective purchasing laws. As of December 1999, most major U.S. cities - including Los Angeles, New York and San Francisco - and several Australian cities enacted similar Burma selective purchasing laws. These laws affected state and local procurement budgets that totaled more than ten times the size of the Burmese economy.

Defending Against the Corporate Counter-Attack
In 1997, the European Union and Japan challenged the Massachusetts Burma Law at the World Trade Organization as a restraint on the trade practices of their companies. In 1998, an organization representing major U.S. multinational companies - the National Foreign Trade Council - sued Massachusetts in U.S. Federal Court claiming that the law was unconstitutional. In 1998 and 1999, the U.S. Federal District and Appeals Court struck down the Massachusetts Burma Law as unconstitutional.

The U.S. Supreme Court reviewed the lower courts’ decision. In June 2000, the Supreme Court upheld the decision striking down the law as unconstitutional. However, the Court simply ruled in narrow terms that existing federal sanctions on Burma pre-empt state and local Burma selective purchasing laws. This narrow ruling provides sufficient scope for cities and states new types of laws pertaining to Burma.

Trillium helped coordinate the legal and political defense of the Massachusetts Burma Law. We worked with citizens and grassroots groups across the country to persuade 78 Members of Congress and 22 state attorneys general to sign on to amicus - or “friend of the court” - briefs in support of the Massachusetts Burma Law.

Enacting New Free Burma Divestment Laws

In the wake of the Supreme Court’s decision, Trillium has worked to enact new state and local Burma laws. Already, Los Angeles, Minneapolis, Portland (OR) and San Francisco have eneacted laws that bar the city’s pension funds from investing in companies that do business in Burma. Similar legislation has also been introduced in the Massachusetts legislature.

For additional information, contact Shelley Alpern