Weekly Business Roundup (September 5, 2009)

China’s Gas, Oil Pipes and Dams Converge in Kokang War Zone

The northern end of the planned pipeline to carry gas from the Bay of Bengal to China is likely to pass through the Kokang region of Shan State where junta forces have been fighting local ethnic militia, say observers.

It is also the area where China has ambitions to build hydroelectric dams on the Salween River.

Some analysts and environment groups suggest the fighting may be part of an attempt to clear the region of potential opponents of both developments.

The gas pipeline—together with a separate pipe planned to pump oil from the coast into China—is one of the most ambitious cross-country commercial projects ever undertaken in Burma.

“The exact routes of these two pipes have not been disclosed but clearly they are going to present the Burmese military with a major security problem,” said an official in the military attaché section of a European Union embassy in Bangkok, who spoke on condition of anonymity because of the sensitive nature of the subject.

“It has been a much easier job guarding the gas pipe that runs for only a comparatively short distance in the southeast from the Yadana complex into Thailand.”

The Shan Sapawa Environmental Organization and the Salween Watch rights group note that the Kokang fighting has been adjacent to the site of a large 2,400 megawatt capacity hydroelectric dam at Kunlong.

They say a team of Chinese and Burmese technicians recently carried feasibility studies for the proposed dam, which is only 25 km from the Chinese border.

The two groups, which oppose all dam building on the Salween, urged China to reconsider its plans.

“The renewed fighting and refugee influx into Yunnan should be a wake-up call to China about the risks of investing in Burma,” said Shan Sapawa’s Sai Khur Hseng in a statement.

Daewoo Sharply Reduces Expected Shwe Gas Delivery Costs

South Korean industrial giant Daewoo has dramatically revised down the amount of money it expects to be spent on delivering gas for China from the giant offshore Shwe field.

One of Daewoo’s partners in developing the field, South Korean government-owned Korea Gas Corporation, said last month the consortium would spend US $5.6 billion.

However, Daewoo this week issued a correcting statement saying the Shwe development costs would total $3.2 billion.

No explanation was given for the sharply revised figure, but Daewoo is understood to be engaged in negotiations with state-owned China National Petroleum Corporation over sharing costs for the 1,200-km pipeline from the Burmese coast into China’s Yunnan Province.

Daewoo’s other development partners include two Indian state-owned firms.

Burma Taps into Asean Nuclear Training Plan by South Korea

Burma is likely to be among the members of the Association of Southeast Asian Nations (Asean) that are to benefit from a nuclear energy training program being planned by South Korea.

The program is part of a cooperation agreement on energy efficiency recently reached between Asean and China, Japan and South Korea.

The South Korean government has offered to train up to 150 engineers and scientists from the 10-member Asean group over the next three years, according to a report by the official Chinese news agency Xinhua.

It is meant to be part of region-wide cooperation to develop clean electricity generation by reducing dependency on fossil fuels such as coal, oil and gas.

The agreement seems to contradict a recent campaign by South Korea and the United Nations to stop North Korea from transferring nuclear technology to Burma amid speculation that the country’s ruling junta was attempting to acquire nuclear weapons capabilities, though this has never been proven.

ILO Holds Rare Meeting on Labor Rights with Junta

The International Labour Organization (ILO) is holding a rare meeting in Burma this week to press its efforts to end forced labor and other labor rights abuses in the country.

The United Nations-linked ILO is meeting judicial and military authorities in the Arakan State port of Sittwe to discuss humanitarian issues.

“We hope to make presentations on international humanitarian law and raise issues about forced labor, child soldiers and harassment,” said ILO representative Steve Marshall in a statement.

He described the meeting as a positive development.

The ILO has managed to hold five meetings in Burma in the last two years after previously threatening to take the country before the International Court of Justice.

The choice of Sittwe underlines ILO concerns about repeated reports of forced labor by the military against Arakan’s Rohingya Muslim minority.