SUNS  4348 Friday 18 December 1998



LOS ANGELES VOTES BURMA SANCTIONS

Washington, Dec 16 (IPS/Jim Lobe) -- The Los Angeles City Council, defying a recent federal court ruling and pressure from big business, has voted unanimously to ban companies that do business in Burma from bidding for city contracts.

Tuesday night's 13-0 vote marked the latest development in an ongoing battle between local human rights and environmental activists and major U.S. and foreign corporations over the legality of local and state ordinances which penalise companies for doing business with controversial governments abroad.

The city council's action, which takes effect in 30 days, came less than a month and a half after a federal court in Massachusetts ruled that such measures - referred to as 'selective purchasing' laws
violate the U.S. constitution, which grants the federal government exclusive control over foreign affairs.

"State interests, no matter how noble, do not trump the federal government's exclusive foreign affairs power," U.S. District Court Judge Joseph L. Tauro ruled in a challenge to a Massachusetts law requiring companies that do business in Burma to add a 10-percent penalty to their bids for state contracts.

That decision, the first against the selective-purchasing laws enacted by scores of city councils, states, and universities during the anti-apartheid struggle in the 1980s, is now on appeal. The issue is likely to be decided eventually by the U.S. Supreme Court.

Judge Tauro's decision was a major victory for a coalition of some 600 major US and foreign corporations, the National Foreign Trade Council (NFTC), which filed the lawsuit against the Massachusetts law.

NFTC President Frank Kittredge told IPS Wednesday that the group, which includes such heavyweights as General Electric, Boeing and Exxon, considers the Los Angeles ordinance as falling into the same category as the Massachusetts law. But he said it was "too early to tell" whether the group will take legal action.

"We think it's most unfortunate in light of all that's gone on," he said, adding, "we still believe that such sanctions are unconstitutional."

"This is a major defeat for the NFTC's campaign to get selective-purchasing laws eliminated," said Simon Billeness, an analyst at Franklin Research and Development Corporation in Boston and a key organiser in the "Free Burma" movement here.

It also marks a defeat for the European Union (EU), which had submitted its own brief attacking selective-purchasing laws in the Massachusetts case. The EU and Japan have lodged complaints about such laws with the World Trade Organisation in Geneva, claiming that they violate an international government-procurement agreement which forbids the use of non-economic criteria in awarding government contracts.

Los Angeles, the United States' second largest city after New York, will join a number of other jurisdictions around the country in applying selective-purchasing laws against Burma, whose military regime has been accused of major violations of human rights and drug trafficking.

In addition to Massachusetts, New York City, San Francisco, Oakland, Portland (Oregon), and two dozen other towns and cities have passed legislation penalising companies which do business in Burma. Selective-purchasing laws against Nigeria, China and Cuba are also in effect in several towns and cities.

Such laws were used with greatest success against apartheid South Africa, where they were credited with the exodus of scores of some of the United States' biggest corporations, such as Coca-Cola, IBM, and General Motors.

Their withdrawal from South Africa is generally believed to have played  critical role in persuading the country's white leaders to abandon apartheid.

Similar laws in New York, California, Pennsylvania and other states and cities targeting Swiss banks and insurance companies which had failed to account adequately to Nazi Holocaust survivors and their families after World War II helped prompt a settlement of outstanding claims
last August.

The Los Angeles ordinance, expected to be signed by Republican Mayor Richard Riordan, is among the most stringent. It bans companies which do business in Burma from even bidding on the city's contracts -- hundreds of millions of dollars worth are awarded each year.

The object of such legislation is to force corporations to choose between their business in Burma and their stake in lucrative government contracts in major U.S. jurisdictions.

"We are hopeful that this action will prove to be an effective tool in pressuring the Burmese Government to end its repression of its people and move towards a democratic government," Council member Richard Alatorre said as he explained his vote.

"The City of Los Angeles does not want its tax dollars going to support companies who support widespread atrocities which are now taking place in Burma," said Council member Jackie Goldberg. "The regime in Burma is one of the most brutal in the world and is supported by a small group of irresponsible corporations," she added.

One Los Angeles-based company that had lobbied hard against the Los Angeles ordinance issued a strong statement condemning the council's action. Unocal, which has a major interest in a gas pipeline in Burma, charged that the council had "moved beyond its legal authority."

Unocal, which has come under strong attack for its operations in Afghanistan, as well as Burma, also noted that the ordinance "sends an unwelcome message to the city's trading partners in the Pacific Rim." The Association of Southeast Asian Nations (ASEAN), it said, has condemned such measures.

UNOCAL reportedly hired a full-time lobbyist to persuade the Council to abandon the effort. The NFTC also sent its Washington lobbyists to the city to join the bid to kill the measure.