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ChevronTexaco has been warned that its proposed $18billion (£9.6bn) takeover of Unocal could make it a focus for human rights campaigns because of Unocal’s involvement in the Yadana project in Burma.
John Jackson, director of the Burma Campaign UK, said ChevronTexaco could expect to be added to a ‘dirty list’ of companies directly or indirectly funding the military regime. He said the US-based oil group had ‘bought themselves a major headache ... unless they state they will sell off the Burma operations as soon as possible’.
ChevronTexaco has not commented on the prospects for a withdrawal from Burma if the deal goes ahead – but it is a signatory to the Global Sullivan Principles, committing it to ‘express our support for universal human rights and, particularly, those of our employees, the communities within which we operate, and parties with whom we do business’.
The proposed takeover, which needs the approval of shareholders and the US regulatory authorities, has been made more attractive to investors by Unocal’s decision to settle a lawsuit over the construction of the Yadana gas pipeline. Although news of the settlement broke earlier this year (EP6, issue 9, p8), Unocal only finalized the details in April as ChevronTexaco announced its plans.
The legal action, dating back to 1996, was brought by 15 Burmese villagers who claimed they were subject to human rights violations as a result of military operations linked to the project.
Bennett Freeman, managing director of corporate responsibility at Burson Marsteller in New York, said the settlement was essential to smoothing the takeover, and showed the increasing importance of social and environmental issues in mergers and acquisitions. ‘Had the settlement not been reached, it would have been such a political hot potato it would have questioned the sale,’ he claimed.
Some analysts predict ChevronTexaco will dispose of Unocal’s $700million Burmese operations. However, even this course of action could rebound on ChevronTexaco if the sale is to the Chinese, as tentatively predicted by Deutsche Bank analysts.
John Jackson, director of the Burma Campaign UK, said ChevronTexaco could expect to be added to a ‘dirty list’ of companies directly or indirectly funding the military regime. He said the US-based oil group had ‘bought themselves a major headache ... unless they state they will sell off the Burma operations as soon as possible’.
ChevronTexaco has not commented on the prospects for a withdrawal from Burma if the deal goes ahead – but it is a signatory to the Global Sullivan Principles, committing it to ‘express our support for universal human rights and, particularly, those of our employees, the communities within which we operate, and parties with whom we do business’.
The proposed takeover, which needs the approval of shareholders and the US regulatory authorities, has been made more attractive to investors by Unocal’s decision to settle a lawsuit over the construction of the Yadana gas pipeline. Although news of the settlement broke earlier this year (EP6, issue 9, p8), Unocal only finalized the details in April as ChevronTexaco announced its plans.
The legal action, dating back to 1996, was brought by 15 Burmese villagers who claimed they were subject to human rights violations as a result of military operations linked to the project.
Bennett Freeman, managing director of corporate responsibility at Burson Marsteller in New York, said the settlement was essential to smoothing the takeover, and showed the increasing importance of social and environmental issues in mergers and acquisitions. ‘Had the settlement not been reached, it would have been such a political hot potato it would have questioned the sale,’ he claimed.
Some analysts predict ChevronTexaco will dispose of Unocal’s $700million Burmese operations. However, even this course of action could rebound on ChevronTexaco if the sale is to the Chinese, as tentatively predicted by Deutsche Bank analysts.
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