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China opens pipeline to bring gas from Burma

Date: 30/07/2013
Source: Asian correspondent
China opens pipeline to bring gas from Burma

BEIJING (AP) — China has switched on a pipeline bringing natural gas from Burma, a state company said Monday, in a project that has raised concerns in Burma’s nascent civil society about whether its giant neighbor’s resource grabs will benefit local people.

The 793-kilometer (493-mile) pipeline connects the Bay of Bengal with southwest China’s Yunnan province and is expected to transfer 12 billion cubic meters of natural gas to China annually, according to a news release on the website of China National Petroleum Corporation (CNPC). A parallel 771-kilometer (479-mile) pipeline that will carry Middle East oil — shipped via the Indian Ocean — is still under construction.

China’s investments, largely in energy and mining, have generated controversy in Burma because they have done little to relieve that country’s chronic power shortages. In response, the Burma government abruptly suspended construction in 2011 of the China-backed Myitsone dam, which would displace thousands and flood the spiritual heartland of Burma’s Kachin ethnic minority.

While the pipelines are expected to provide only a small proportion of China’s oil and gas consumption, they are strategically important to Beijing. The gas pipeline that began operating Sunday offers a nearby source of gas, and the oil pipeline would eliminate the need for tankers from the Middle East to pass through the crowded Malacca Strait between Malaysia and Indonesia.

The two joint ventures are between state-owned China National Petroleum Corporation (CNPC) and Burma’s national petroleum company Burma Oil and Gas Enterprise. Four other companies from India and South Korea also have stakes in the project, according to CNPC.

For years, China was the closest ally of Burma’s military regime, which was shunned by the West because of its poor human rights record and failure to hand power to an elected government. Since 2011, when an elected, though still military-backed, government took office, Burma has undergone political and economic reforms and has courted investment from the West.

The reforms have brought heightened activity from nongovernment and civil society groups in Burma, said Tony Nash, Singapore-based managing director of economics and risk consulting for IHS, an independent economic consultant. This, together with growing competition from Western companies in Burma, will push Chinese companies to be more transparent about how their investments will affect the local population, he said.

In April, hundreds of people protested in western Rakhine state against the pipeline, saying they had to give up their land for too little compensation and that salaries offered for local pipeline workers were too low.

“Some of the responses to that protest back in April were really specific to looking at community needs and responding with corporate social responsibility at the local level,” said Nash. Chinese companies are increasingly “saying ‘we hear you and we want to make a commitment for corporate social responsibility,’ you are seeing Chinese companies becoming a bit more savvy in that respect,” he said.

Wong Aung, who heads the Shwe Gas Movement, which campaigns against the pipelines on human rights and environmental grounds, said the government and companies have not clarified how the project’s benefits would be shared.

“The contracts made by the previous government need to be reviewed to see whether they guarantee the national interest and rights of every citizen and whether they meet international standards or not,” he said.

Even on the Chinese side of the border, opposition to the pipeline has been strong. In May, more than 2,000 people worried about air and water pollution protested in Kunming in Yunnan against a planned petroleum refinery connected to the project.

Topic: Business
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