AHMAD FAUZAN BIN YUHYI FAIZ 256735 (Management Ethic Group J)

Case Study 2
Unocal in Burma
Questions
1. Assess whether from a utilitarian, rights, justice, and caring perspective, Unocal did
the right thing in deciding to invest in the pipeline and then in conducting the project
as it did. Assuming there was no way to change the outcome of this case and that the
outcome was foreseen, was Unocal then justified in deciding to invest in the pipeline?
Unocal which at the beginning of the company was getting success went wrong when they
were not expected to do wrong. Unocal practices conducted in the field project of Yadana
can be explored from the four moral principles.
First is the utilitarian view, there was a much greater amount of people benefiting from the
programs by implementing the experiment. A pure utilitarian would say Unocal’s investment
in the Yadana pipelines was correct. To see that the Unocal decision to invest in Yadana
was purely utilitarian or not, costs and benefits can be analysed. Unocal and other
companies built schools, and small businesses were also growing along the pipelines, the
project provided jobs for Burma citizens, infant mortality dropped along the pipeline. Thailand
enjoyed cleaner natural gas from 500-600 million cubic feet of gas which was piped through
the pipeline daily instead of using dirtier fuel. Thousands of Karen were used as forced
labour, and forced to move to build the pipeline as well. The Burmese government charges
violence and even murder of those who opposed the scheme.
Second is the perspective of rights, as can be considered from the case study, following
points. The international human rights watch and amnesty released the report saying the
Burmese army had been using forced labour. Brutalizing the Karen population to provide
protection and equipment for the Unocal Workers. A 1995 study by Unocal also reported the
denial of human rights. It appears that the Unocal had been proven incorrect to invest in
Yadana based on the rights. The Unocal again breached the contract against human rights
during the contract era and used the forced labour.
The third is a viewpoint on justice. Equality in ethics is to ensure fair and equitable treatment
for all. Unocal position of the three forms of justice may be tested. This is concerned with
distributive justice through the equal distribution of benefits through society. From this point
of view, Unocal made the wrong decision about the investment in Yadana due to US reports,
non-profit organizations and even Unocal's own studies show that although the project's
benefit could in theory have been distributed through government to all of Burma. Evolution.
Retributive Justice is morally accepted just a punishment for breaching a law or rule. At this
point of view, Unocal seems to have been incorrect in its decision to invest Yadana because
it has been sued by both federal and state courts in the US. Compensatory justice is a
means of compensating people for what they suffered because someone wronged them. At
this point of view, Unocal was right to invest because the Karen people suffered as a result
of the project being compensated by the settlement outside the case.
Lastly, is caring perspective. From a caring point of view, ethics means caring about
relationships or caring for people close to us. From this perspective Unocal was wrong
because the Burmese army did not treat the people of Karen in good manner and thus
violated the ethics of care. Conditions could be much better if the Karen people were treated
well by the army.
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2. In your view, is Unocal morally responsible for the injuries inflicted on some of the
Karen people? Explain. Is Chevron?
Yes, moral obligation in ethics is based on 3 components. Awareness, equality and
involvement. In moral obligations each element contributes maximum. Let's just see how
socially responsible Unocal was. Knowledge is first. Unocal performed socio-political
analyses of the condition of Burma before investment. Unocal signed a deal with the
consultancy company to review the 1991 Amnesty International Report, which reported
military repression of the Burmese. Although it received the explanation of human life
violation in Burma as well as the possible danger, Unocal still continued to invest in that
project. Unocal engaged consultants to investigate conditions in the Yadana area and again
received the report that during the construction of the pipeline human rights would be
affected. Next, is liberty. It was the free will of Unocal to invest in the project and no one
coerced them to do so. The cleaning operation was carried out by the army on behalf of the
Unocal, culminating in the Burmese army transfer, forced labour, torture, murder, rape of the
Karen's. Involvement is lastly. Unocal was involved in the army's injury to the Karen people.
The army was heavily involved in the war, which was the key reason why the civilians were
injured.

3. Do you agree or disagree with Unocal’s view that “engagement” rather than
“isolation” is “the proper course to achieve social and political change in developing
countries with repressive governments.” Explain.
Yes, I agree because Unocal knew their local partner’s actions and track record in Myanmar,
and they also knew that their partner had an egregious reputation for abusing human rights,
particularly with respect to the Karen ethnic minority community. Despite these facts, they
argued that engagement rather than isolation is the right path for achieving social and
political reform in developing countries with authoritarian regimes justifying their foray into
Myanmar, and their alliance with the ruling military regime.

Next, they saw themselves as catalysts for change and therefore argued that their presence
would most likely help democratic movements, promote progress, improve ties with the
outside world, and ensure that the military government will not last for long. Third, they
believed their presence had been legitimized by global institutions such as the World Bank,
the IMF, ASEAN, and other international organizations in Myanmar that funded and
sponsored economic and social projects. They had previously declined to engage in a
lucrative project in Afghanistan because there was no involvement from the World Bank, the
IMF and others but Myanmar was different. Consequently, they did not see any justification
for abstinence.

Commitment does not promote the much-vaunted economic growth that inevitably
contributes to human rights change, and a democratic government. It has been
demonstrated by the incorporation of Myanmar into the ASEAN fraternity. The relationship
between economic prosperity and growth and political liberalization is complex, so there is
no causal connection between democracy, respect for human rights, and economic growth.

Since foreign investment does not translate into infrastructure or sustainable jobs for the
population, it is our contention that a policy of disengagement, withdrawal, and prohibition of
investment will not have an adverse impact on the innocent people. Alternatively, it would
accomplish the goal of cutting off the central government's lifeline, as it depends heavily on
private capital. Taking a utilitarian view of achieving the greatest good for the largest
AHMAD FAUZAN BIN YUHYI FAIZ 256735 (Management Ethic Group J)

number, we postulate that some arm-twisting is necessary and justified when the diplomatic
road is over.

Reference

Dhooge, L. (n.d.). A Close Shave in Burma: Unocal Corporation and Private Enterprise
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https://www.studocu.com/en-us/document/johnson-wales-university/ethics-and-
corporate-social-responsibility/assignments/chapter-2-case-study-unocal-in-
burma/1841592/view

News, B. (2004, December 14). Unocal Settles Rights Suit in Myanmar. Retrieved June 29,
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Salpukas, A. (1997, May 22). Burmese Project Tests Unocal Resolve. Retrieved June 29,
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University, S. (n.d.). Unocal in Burma. Retrieved June 29, 2020, from

UNOCAL IN BURMA. (n.d.). Retrieved June 29, 2020, from