Unocal Report on Myanmar Rejected : Energy: Shareholders defeat proxy resolution calling for study on alleged human rights violations related to pipeline project.
Shareholders of Unocal Corp. voted Monday to reject a proxy resolution calling on the company to make a comprehensive report on conditions in Myanmar (formerly Burma), where allegations of human rights violations have stirred controversy over a Unocal gas pipeline project.
“I think our record on human rights is as good or better than any other company,” Richard J. Stegemeier, Unocal’s chief executive, said at a news conference after the company’s annual shareholders meeting.
Investors filed into the meeting hall of the Los Angeles headquarters Monday morning past about 40 human rights activists, who chanted, “You don’t care, Unocal.”
The demonstrators held vigil in the light rain, using huge helium balloons to float a 28-foot banner emblazoned with a blown-up photograph of a man in leg irons and a caption that read, “Stop Unocal’s Chainsaw Gang Debacle in Burma.”
Proponents of the shareholder resolution allege that forced labor is widespread in Myanmar and that such abuses have taken place on infrastructure projects in the area of the planned pipeline. The company denies there is any evidence to link Unocal to human rights violations.
Despite the defeat of the Myanmar resolution, Unocal’s public relations problems appear far from over.
Unocal entered a no-contest plea last month to three criminal misdemeanor counts in connection with the leakage of diluent--a diesel-like thinning agent--at its Guadalupe oil field in San Luis Obispo County. The company agreed to pay a $1.5-million fine and to clean up as many as 200,000 barrels of diluent that had leaked into the sand over the past 40 years.
Stegemeier, who steps down as chief executive at the end of April, said the company had set the “highest ethical standards” for itself but “unfortunately we failed to meet these standards at the Guadalupe oil field.”
Unocal is charging $25 million to after-tax earnings in the first quarter of 1994 in connection with the Guadalupe spill, but Stegemeier said the write-down will not have a “material effect on the company’s financial condition.” (Unocal on Monday announced that net earnings for the first quarter were $54 million, or 19 cents a share, up from $11 million, or 1 cent a share, for the same period a year ago.)
Meanwhile, the sponsors of the Myanmar resolution said the results of the proxy ballot--a 14.1% yes vote--was large enough to ensure that they would file the measure again next year.
“This is not going to go away,” said a spokesman for the Interfaith Center on Corporate Responsibility, the initiative’s sponsor.
Stegemeier said the company will decide later whether it will appeal to the Securities and Exchange Commission to have future resolutions on Myanmar stricken from its proxy statements.
At the shareholders meeting, several human rights advocates denounced Unocal’s willingness to work with the military junta that rules Myanmar with an iron fist.
“You are partners in crime,” said Taw Myo Myint, a former student protester who sought political asylum in the United States after a bloody repression of dissidents in 1988. She owns 10 shares of Unocal stock.
Stegemeier said a team of Unocal officials visited the pipeline area last week and found no evidence of forced labor or destruction of villages, as critics have maintained.
But one of Unocal’s investigators, Joel P. Robinson, said the team was in the area only one day and that its access was restricted by local Myanmar military authorities, who determined where they could land their helicopter.
