Case Study: Unocal in Burma

Topics: Human rights, Amnesty International, Universal Declaration of Human Rights Pages: 6 (2076 words) Published: June 27, 2013
Case study: Unocal in Burma

Student name: Liyi Wen
Student ID: 5061791
Word Count: 1947 words

Professor: Calvin Hayes

I Dilemma and Stakeholders3
II Questions4
III Arguments5
Utilitarianism perspective:5
Moral right perspective:6
Justice perspective:6
Reference List7

I Dilemma and Stakeholders
Union Oil Company of California (Unocal) specialized in developing oil fields around Los Angeles and operating all aspects of the oil business such as extraction, refining, distribution, marketing and even retail. Owning to depletion of oil fields in the United States, the company decided to turn to invest in energy projects outside U.S. In 1992, a natural gas field called the “Yadana Field” that belonged to Burma attracted Unocal `s attention and Unocal decided to invest in the international project. In this project, Unocal paid US$ 8.6 million to Total S.A to became 28,26% of the Yadana Field project, while the other investors are Total S.A (31,24%), Thailand’s PTT Exploration & Production Public. Co (25, 5%) and the Burmese government (15%) (Velasquez, 2011). Undoubtedly, Unocal, Total S.A, Thailand`s PTT Exploration & Production Public and the Burmese government are main stakeholders of this project. Stakeholders are defined by groups or individuals who can affect or be affected by the achievements of a business ("Financial times lexicon”). Obvious stakeholders are: employees, consumers and customers, competitors, suppliers, stockholders, the local community, distributors, and the environment. Thus, local community was also a significant stakeholder, especially the hundreds of Karen who were forced as labors and also forced to relocate to accommodate the pipeline project. According to the case study, one dilemma has been generated: whether it is right or not that Unocal decided to invest in the pipeline project, because Unocal was being accused of complicity in doing human rights abuses with Burmese military after the company invested into this project. If the Unocal invests this project, Standing in company`s own perspective, there are mainly three benefits investing into this project: local cheap and relatively educated labors; rich in natural gas resources; Burma has geographic advantage, because it was an entry point into other potentially lucrative international markets, which could help Unocal serve as a link to markets in China, India, and other countries in Southeast Asia (Velasquez, 2011). In addition to benefit to company, the natural gas project should provide much revenues and significant benefits to Burma people and government, as Burma is a poor country with GDP $200-$300, higher inflation rate above 20 percent, a high infant mortality, and a low life expectancy. This project could help Burma economic growth. However, this project would do harm to local community, as the project invested by Unocal would contribute the government of Burma to continually violate the human rights of the Burmese people, such as forcing hundreds of Karen to clear the way and build facilities for the pipeline construction and providing slave as the Burmese government labor for the project. If Unocal not invested in this project, Burmese would not have this opportunity to develop its economy and Thailand would not use the natural cleaner gas; at the same time, Unocal would lose this good opportunity to expand its oversea market, which brings a loss of profits.

II Questions
Q2: Is Unocal morally responsible for the injuries inflicted on some of the Karen people? From my perspective, the answer is “yes”. I explained it from two aspects: knowledge and principle of ethics Knowledge: before Unocal investing into this project, company conducted research on the social political environment of Burma. Burma is a poor country and need other countries to help, and this project is an opportunity to make Burma economic growth. However, the only one serious problem is that government of Burma...
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