Unocal in Burma
Union Oil Company of California (Unocal)
QUESTION NO. 1
Assess whether from utilitarian, rights justice and caring perspective. Unocal did the right thing indicating to invest in the pipeline and then in conducting the projects as it did. In your view, and using your utilitarian, rights justice and caring assessment, did Unocal do the right thing? Assume there was no way to change the outcome of this case and that the outcome was foreseen was Unocal then justified in deciding to invest the pipeline. Answer
Union Oil Company of California, Unocal, progressed into a full-service oil business after being founded more than 100 years ago to develop oil fields in California. Its services included extraction, refining, distribution, marketing and retail. Because of the depletion of oil fields in the United States, Unocal turned to foreign investments with a strategy to market its one-stop shopping business to governments. A major international project of interest was the "Yadana Field" off the shore of Burma, which contained approximately 5 trillion cubic feet of natural gas enough to produce gas continuously for about 30 years. Burma's government created the company Mynamar Oil and Gas Enterprise (MOGE) to find private companies to help develop their oil.
A company first and foremost point to consider before investing is quite obvious and that is the high profit and low cost. So Unocal as other companies takes into consideration several things before investing in “yadana field”. As the labour was cheap in Burma, it was rich in natural gas recourses, it is an entry point into other potential lucrative international markets and the Burmese government maintain a stable climate. The projected was to transport the gas 256 miles from the yadana field (located in Burma) to Thailand through pipeline which had to be constructed by the Unocal. By conducting research Unocal investigate the risks position on social political environment of the country but the region where the pipeline had to be constructed was not safe enough to work as the Burma had a military dictatorship which accused, harassed the rights of people which in result the Karens , rural part of southern part , had rebel against government, periodically.
By knowing these facts the Unocal didn’t step back and consider that by completion of this project will help people of Burma to have a better standard of living and it will improve education, circumstances etc. Unocal takes into account the maximum benefits to the maximum number of people which is utilitarianism (the moral philosophy), which in result help a lot of Burma people who were in the region of constructing pipeline that includes improved health care, improvement in education, new transport infrastructure etc which further help decrease in mortality rate by 31 to 13 deaths per 1,000. These all claimed that Unocal had been investigated and proved by collaborative for development action.
The Burmese project was appealing to Unocal for many reasons: cheap, educated labour, and rich natural gas resources as well as other untapped resources. There was also the advantage that Burma would provide an entry point into other profitable international markets such as China, India and other Southeast Asian countries. The fact that Burma had a strong, dependable government with a stable political climate was also appealing. Yet it was widely known that since 1988, Burmese government had continuously violated human rights in a brutal manner. In 1992, MOGE signed a contract with Total S.A which gave Total the right to develop the field and build a pipeline to transport the gas from Yadana to Thailand. In the contract, MOGE agreed to provide Burmese government security through its army and ensure that land was cleared and that the right of way was secured in the passage for the pipeline through Burma. Thailand's government would purchase the gas. Burma had the opportunity to earn...
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