LOS ANGELES -BASED Unocal has become an active player in the expanding global heroin trade as a result of the oil giant's business activity with the narco-dictatorship of Myanmar (also known as Burma), according to an affidavit filed as part of an ongoing federal lawsuit.  

The affidavit -- filed April 7 with the U.S. District Court in Los Angeles -- states that the government-controlled Myanmar Oil and Gas Enterprises (MOGE) "has been the main channel for laundering the revenues of heroin produced and exported under the control of the [Myanmar] army."  

The legal document was filed in support of a suit that seeks to hold Unocal -- the largest American investor in Myanmar -- liable for widespread human rights abuses allegedly committed by the Myanmar regime. François Casanier, an associate researcher for the Paris-based group Geopolitical Drugwatch, wrote the affidavit.  

Unocal and the French oil giant Total are partners in a joint venture with MOGE to build a $1.2 billion gas pipeline through southern Myanmar. The 14 plaintiffs in the federal lawsuit are ethnic minorities who live in the region where the pipeline is being built. They charge that Myanmar's military, in providing security and infrastructure support for the pipeline's construction, is committing such human rights abuses as forced labor, forced relocations, rape, torture, and murder.  

A little-noticed March 25 ruling by federal district judge Richard A. Paez held that Unocal and its executives could be held liable for illegal and repressive actions committed by the Myanmar government in the course of their business dealings.  

The court action, the first of its kind, was reported by the Los Angeles Times April 17 -- and reprinted the same day by the San Francisco Chronicle. But the explosive contents of Casanier's affidavit, which have received no coverage at all, paint a disturbing picture of an oil giant benefiting from the international drug trade.  

Drug economy

The plaintiffs have submitted Casanier's sworn affidavit in support of a request for a preliminary injunction preventing Unocal from doing any further business in Myanmar pending the outcome of the case.  

In his affidavit the French researcher lays out a compelling case that the foreign partners of Myanmar's ruling State Law and Order Restoration Council (SLORC) provide "big shields for [the] money laundering" of drug dollars. Casanier writes that because "heroin has become the country's highest valued export, accounting for 50 percent to 70 percent of the cash flow into the country," money-laundering strategies have become an integral part of government operations.  

"MOGE has transferred hundreds of millions of dollars into Singapore banks since setting up the joint venture," states the affidavit, yet "it has no assets other than the installments of its foreign partners and makes no profit."  

According to Casanier's four-year investigation, MOGE has been able to purchase military hardware from Portugal and Poland, run embassies in Europe, and invest in companies at home, all with drug money.  

Randy Renick, an attorney with Hadsell & Stormer handling the federal lawsuit, told the Bay Guardian that the drug allegations are directly related to human rights aspects of the case because the military has used its extensive arsenal, purchased with profits from the drug trade, against the Myanmar people while protecting foreign investments.  

According to Renick, Casanier's sworn declaration to the court "provides irrefutable evidence that Unocal is in partnership with criminal drug dealers who are making profits off the backs of the indigenous people of Myanmar."  

In January SLORC launched a series of ongoing military offensives against the Karen and the Mon, ethnic minorities living in the area surrounding the pipeline, sending thousands of refugees fleeing into Thailand. The Karen, who have been struggling for autonomy and democracy for decades, have been hit particularly hard by the assaults.  

"Unocal and Total knew or should have known that MOGE has been heavily involved in laundering the proceeds of SLORC's heroin trade," states Casanier's affidavit, "both at the time they originally contracted with MOGE and in January of 1997 when they signed additional [business] contracts."  

Concerns from within

Unocal's board of directors said the company has yet to investigate the money-laundering allegations. "Proving or disproving these allegations would require an investigation that is not only illegal but would subject Unocal officers and directors to criminal penalties [in Myanmar]," a board statement said.  

OCAW spokesperson Joe Drexler said he found that suggestion ridiculous. "It is absurd that Unocal would be concerned about legalities of conducting an investigation in a country controlled by an outlaw regime which deals in drugs, violates international law continuously, and creates its own laws to suit its own purposes," Drexler said.  

Both the Myanmar government and Unocal deny all charges.  

"The charges are politically motivated," said a spokesperson for the Myanmar Embassy in Washington, D.C., who asked not to be identified by name. "MOGE is a state-run company -- run in accordance with rules and regulations -- and it can't do anything outside the law."  

Barry Lane, a Unocal spokesperson in Los Angeles, told the Bay Guardian that the charges are "absolutely false and outrageous.... It's an insult to think we'd involve ourselves in the drug trade."  

On March 5 Unocal was handed two major setbacks by the U.S. Securities and Exchange Commission (SEC). It denied the oil company's request to exclude the OCAW resolution from its upcoming June 2 shareholder's meeting. On the same day the SEC also gave the Interfaith Center on Corporate Responsibility, composed of 256 religious groups who control assets of $50 billion, the go-ahead to introduce a second shareholders' resolution attempting to restrain Unocal from doing business with Myanmar.  

"If the drug-laundering allegation is true, it is very unlikely that this could have occurred without the knowledge of Unocal officials," Robert Wages, president of the OCAW, said. "Uncovering the truth may mean that Unocal bears direct responsibility for the rise in heroin use in the United States."  

In an April 19 interview with the Bay Guardian, Casanier expressed concern that if Unocal and Total are allowed to move forward unchecked, "it will be a green light for everybody to jump into the Myanmar market and develop activities which will be definitely connected with drug-money laundering on a big scale."  

And, Casanier said, "not only in Myanmar, but everywhere where there is dirty money involved, the Myanmar case will be considered an example."  

Meanwhile, the great oil rush to Myanmar continues. In late March Arco, which has been in partnership with MOGE since 1995, notified SLORC about a gas well just discovered off Myanmar's coast, according to a March 29 Bangkok Nation story. And Feb. 12 the Associated Press reported that Texaco has signed a deal with Thailand to sell that country natural gas from wells drilled in the same area as the Unocal drilling fields.  

On Monday, April 21, President Clinton approved a ban on American investment in Myanmar. The ban, however, applies only to future investments, so Unocal, Arco, and Texaco can continue their operations in that country.