13 Minutes To Read

Flawed by Design: Assessing the Yadana CSR Project

13 Minutes To Read
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  • Corporate Accountability Myanmar (CAM) identifies the failures with Corporate Social Responsibility (CSR) programs in Myanmar.

    A Burmese version is available. Read the post here.

    A signboard for TotalEnergies EP Myanmar behind a closed gate in Yangon, Myanmar. (Photo: AFP)

    After 30 years in Myanmar, Total is leaving the Yadana gas project in Tanintharyi region. Throughout the project, Total adopted a corporate social responsibility (CSR) strategy to improve its tarnished reputation associated with human rights violations committed by the Tatmadaw, which had been deployed to protect the project in the early 1990s.

    Numerically the results of Total’s CSR program looked impressive, considering the amount of beneficiaries, the number of schools constructed, healthcare improvements, and the amount of money Total spent on it. However, the company failed to acknowledge the shortcomings and failures of its CSR programs that left lasting negative impacts on communities. Through covert interviews with local people in the project areas, we identified three main failures of Total’s CSR efforts: its creation of dependency, a lack of sustainability, and a lack of accountability. While Total’s CSR reports portray a positive narrative of their local impact, our findings depict a different story. Total serves as a case study to show that CSR projects often fail by design, leaving affected communities by the Yadana gas pipeline with grievances and without remedy.

    Our methodology

    During November 2021, Corporate Accountability Myanmar (CAM) spoke with 16 local people who reside throughout seven villages in the northwest of Ye Phyu Township, Dawei District, Tanintharyi Region where the Yadana Gas pipeline passed through: Kanbauk, Phaungtaw, Daminseik, Ohnbinkwin, Michaunglaung, Zardi, and Kalaingaung. The seven villages are among the 33 villages where Total’s CSR program ran (see Map 1). Among the 16 people interviewed, seven were former Total staff. Two respondents were from the village communication committee (VCC) and the village bank committee. These are committees that were created by Total to support their CSR efforts. The remaining seven respondents are villagers with no official connection to Total’s CSR program village committees.  Six respondents are female, 10 are male. We could not travel to the seven affected villages due to security concerns so, instead, we spoke with them on the phone for about one hour per interview. We followed up on any information that needed clarification after transcribing them all. A desk review was conducted on CSR reports and strategies of Total and Chevron, as well as supporting literature on CSR and accountability issues.

    The Yadana pipeline is one of three gas pipelines that runs through Tanintharyi region (Map 2). Map 2 shows that the three pipelines, the Yadana pipeline operated by Total, Yetakhon pipeline operated by Petronas and Zawtiga pipeline operated by PTTEP, run parallel passing through the region. As we will explain, some communities were affected by multiple projects at once.

    Map 1: The thirty-three villages covered by the Yadana CSR project. (Source: Yadana CSR Report 2015)
    Map 2: The three gas pipelines that pass through the Tanintharyi Region. (Source: Total, 2021)

    Total’s tarnished reputation

    In the early 1990s, Total entered Myanmar to extract gas from the Andaman sea with U.S based Unocal (now sold to Chevron). The Yadana gas field started production in 1998 and its shareholders were: Total (31.24%), Unocal/Chevron (28.26%), Thai state-owned PTT Exploration and Production (25.50%), and Myanmar state-owned Myanma Oil and Gas Enterprise (15%). The Pipeline is managed by Mottama Gas Transportation Company (MGTC), consisting of the same shareholders. Human rights violations associated with the construction of the pipeline infrastructure were well documented by a number of human rights organizations. These include Earth Rights International, International Federation of Human Rights Leagues, Investor Responsibility Research Centre, Mon Information Center, Karen Human Rights group, and Amnesty International. Ethnic armed organizations, like the Karen National Union and the New Mon State Party, have also spoken out against the Yadana pipeline. These organizations criticize the project for the displacement or forced relocation of villagers for pipeline construction, land grabbing, and forced labour. With the arrival of Tatmadaw forces to secure the area, villagers were forced to build barracks for soldiers, clean and maintain the areas around the camps. They had to work as conscripted porters, transport supplies from camp to camp, or carry equipment for the troops during military offensives. Villagers were also asked to contribute funds for military camp construction. Other forms of harassment villagers faced included rape, intimidation, the forcible conscription of youth into the Tatmadaw, the confiscation of civilian vehicles for military activities, and theft of domestic animals.[1] Total and Unocal faced several lawsuits in the US and French courts due to these human rights violations associated with the Yadana project. Unocal settled a lawsuit with fourteen plaintiffs from Myanmar in 2005. After that, Unocal was sold to Chevron. Total also settled a lawsuit out of court.

    Total’s CSR program

    After construction on the Yadana pipeline began in 1995, Total started its CSR program in 13 villages to improve its tarnished reputation. Total’s CSR activities focused on access to healthcare, education, skills development, and stimulating the local economy’s livestock and agriculture sectors. Total expanded its CSR activities over the years by adding microfinance and access to solar energy. The coverage reached 33 villages in 2012. The main CSR activities took place in the pipeline area directly implemented by Total, in addition to the national projects implemented in partnership with national and international organizations. In 2020, Total stopped its CSR activities due to the COVID-19 pandemic.

    Total invested US $51.9 million in the CSR program between 1995 and 2019. To protect the environment, since 1998 the CSR program has also played an active role in the Tanintharyi Nature Reserve Project (TNRP), located in the pipeline area. Total’s CSR team was comprised of 49 members, 23 being locals from the area. There were also volunteers, including members of the village communication committee and the village bank committee. These committees liaise between Total’s CSR members and villagers.

    According to Total, the company “is committed to Corporate Social Responsibility as a core policy embedded in its operations.” Early on, its CSR projects “focused mainly on infrastructure and public health activities due to the needs of then very remote area where the services provided by the State were very limited.” It said the program gradually changed “towards the sustainable approach and community participation.” Total also declared that regular third-party impact assessments on the projects had been performed by Collaborative Learning and Action (CDA). and Myanmar Marketing, Research, and Development (MMRD). In 2014, a Stakeholder Relationship Management Exercise was done for the first time, and as the result, the “TEPM Stakeholder Holder Engagement Plan” was established and the CSR strategy was adjusted.

    CSR results according to Total’s numbers

    Total’s CSR reports describe in detail the number of beneficiaries, some of their stories, and improvements in health care and education the company accomplished in the pipeline area. For instance, in Dawei, 45 university students were provided scholarships every year. In Kanbauk, in 2019, Total hosted four interns from Dawei Technological University for the first time. In Yangon, the Yadana Welding Training Center offered the opportunity to acquire skills needed by industries in Myanmar.

    When it came to support for healthcare, six doctors paid weekly visits to four health centers to support 71 community health mobilizers and village health workers and provided specific recommendations to their patients. The scope of those activities evolved from curing conditions to care and prevention of non-communicable diseases. Total also supported a program established by Helen Keller International (HKI) to reinforce the existing cataract surgery infrastructure to reduce blindness significantly: a 50% decrease by 2020. Via their microfinance program, in 2019, they supported 1,572 vulnerable individuals, of whom 87% were women. These results may look impressive, but they are outweighed by the negative impact of the Yadana pipeline, and problems caused by Total’s CSR activities themselves. These CSR reports only tell a small part of the story.

    Villagers’ grievances towards Total’s CSR program

    Despite the benefits accrued through these programs, when we spoke with local people, we found grievances that were unresolved and undisclosed in the CSR reports. The issues revealed during these interviews indicated that the Yadana CSR program was, by design, flawed. In the following sections, we will outline the ways that the Total CSR program failed in relation to its stated aim of empowering communities. We highlight three key findings. First, it creates dependency and lacks sustainability. Second, accountability was not embedded in the program. Third, the program failed to effectively engage with the affected community, and identify issues related to the pipeline project to ensure affected people and communities get remedy.

    Creating dependency

    Our research demonstrates that villagers became increasingly dependent on Total over the years, as they promised to provide services and infrastructure to villagers. Yet, Total did not fulfill the services that it claimed to provide and shifted its policy in the 2010s without adequately consulting with villagers.

    One respondent noted that “since 1996, [the] company provided public services that the government needed to provide and CSR villages relied on the company rather than the government.” This created problems when the company shifted its policy in the late 2010s by moving away from taking on the duties of the government. It no longer engaged in projects like building school infrastructure, roads, and bridges. In Ohnbinkwin Village, one of the villages most affected by the company’s operations, villagers asked Total to improve the village road and rebuild the village entrance bridge, which had been damaged by a natural disaster. The company refused to provide financial assistance for these projects, and villagers protested against the company for not fulfilling their demand.

    Villagers also expressed dissatisfaction regarding access to electricity. Villagers said since the 1990s, Total promised electricity for villages in Kanbauk area where the pipeline passed through. While electricity is the responsibility of the government, Total’s false promises aroused grievances. At that time, villages in Kanbauk area relied on private generators that distributed electricity from 6 pm and 9:30 pm and cost each household between MMK 3,000 to MMK 5,000. In 2009, Dawei Development Public Company Ltd began to provide 24-hour electricity to these villages. The electricity was generated by diesel and cost MMK 500 to 800 per unit. In 2017, the NLD government managed to reduce the electricity cost to MMK 200 in Dawei district by giving permission to Petron and Trans Company to generate electricity by using gas turbines, and the government negotiated to buy gas for the gas turbines from the Zawtika pipeline. This showed that false expectations created by the company only aroused the community’s mistrust of the company. By setting unfulfilled expectations and taking on the responsibility of the government, the company left the community dependent on the company for more than ten years. The community felt aggrieved at the company when these expectations were not met. The impact of dependency leads to an unsustainable pathway.

    Lack of sustainability

    Total’s CSR projects did not meet villagers’ actual needs or current economic realities in Myanmar.  Due to mismatches with ground realities, some of its programs did not produce sustainable results. One respondent remarked that villagers see agricultural impacts as the most ineffective consequence of the project. One example is the introduction of new crops that did not match the on-the-ground reality, which ultimately damaged farmers’ incomes. In addition, introducing crops such as oil palm and rubber had a negative environmental impact, even though villagers’ plantations are relatively small compared with commercial oil palm plantations in Tanintharyi. One respondent noted that “although the company’s CSR team engaged with the village community, they put their own priorities first rather than what the community needed.”

    For instance, in Thaechaung village, the Yadana CSR team encouraged villagers to clear villagers’ cashew nut orchards and grow oil palm plants. At the time, in the early 2000s, oil palm was backed by the government. The CSR team assumed that the palm oil manufacturing industry would grow and that this change would increase income for farmers. However, ten years later, Myanmar still exports raw palm oil products to Malaysia, where these materials are processed. Myanmar continues to import palm oil. As the result, villagers cleared those oil palm trees and grew rubber instead—a more profitable crop. In this case study, neither the company nor the villagers benefitted from the project. The respondents felt that both the company and villagers wasted their resources over the course of the project. This case shows that the CSR agriculture project led to unsustainable outcomes in terms of both its failure to produce long-term incomes for villagers and in terms of the adverse environmental effects of oil palm cultivation.

    Lack of accountability for negative impacts of the pipeline project

    Our research highlights three negative impacts of the Yadana pipeline, and the related Tanintharyi Nature Reserve, for which Total could have taken more accountability. Total responded to these negative impacts by introducing more CSR programs, without addressing the negative impacts of the pipeline.

    Ineffective community engagement

    In 2010, near the southern part of the coastal fishing village of Daminseik, the Yadana gas pipeline appeared on the beach, exposed due to water and wave erosion. To prevent further deterioration, Total built a wall with rocks. The structure was about seven miles tall and a half-mile in length from north-south. After that structure was built, around 2012-13, approximately 40 houses adjacent to the sea including the road were destroyed in a sea bank collapse. Villagers suspected it was due to the new structure Total built. The company refused the accusation and said that they studied the consequences before building the structure, and the collapse was due to climate change. Villagers also stated that they were unaware of consultations conducted before the construction of the structure.

    Total’s response was to have their CSR team distribute basic household commodities and foods to affected households. As one respondent noted, “the company did whatever they thought was right without listening to the community.” Not only did Total neglect to consult the community being affected by the structure, they also failed to listen and refused to pay the compensation that villagers demanded after the harm was done.

    Land loss and failure to restore livelihoods

    Total gave lump sum compensation to villagers who lost their land in the 1990s as a result of the Yadana pipeline project. However, respondents said 90% of villagers who got compensation in Ohnbinkwin village became landless and jobless. Some respondents blamed those villagers for not saving the compensation money they were given. Some said villagers did not know how to manage the large sum of money. Others thought the company should have adopted a long-term plan to help those villagers so that they had some means of income generation.

    The practice of giving away money as compensation without following any livelihood restoration plans fall short of international standards. According to the International Finance Corporation, livelihood restoration plans are necessary to ensure people who were dependent on the land for their whole life have the skills and the ability to change livelihoods. Otherwise, the same international standards suggest replacing the lost land with other land of equal value wherever possible to ensure affected villagers’ right to livelihoods is not impacted.

    Total only understood their responsibility as being to compensate the villagers who lost their land. They valued this land in strictly financial terms. The company neglected its responsibility to ensure the pipeline project would not negatively impact those villagers whose long-term livelihoods were dependent on the lost land.

    Impact on fishing

    In villages like Kyaukthayan and Phyunet, where villagers fish by casting nets far out into the sea, issues with the villagers’ fishing nets becoming tangled with the pipelines caused damage to local livelihoods. In this area, the Yadana pipeline (operated by Total) intersects with two other pipelines: the Yetagun pipeline (operated by Petronas) and the Zawtika pipeline (operated by PTTEP) (see Map 2). The nets snagged on parts of the offshore pipeline infrastructures that had aged. Villagers then had to bear the cost of repairing the damage to their nets and mitigating the disruptions to their fishing activity. No pipeline operators took responsibility when complaints were lodged. According to the respondents, during the NLD government, civil society organizations and the media heard villagers’ voices and relevant authorities from the fishery department tried to solve the issue in 2019. However, Covid delayed their field visit.

    In another case, villagers along the coast, who had, for generations, relied on fishing for their livelihoods were restricted from fishing during pipeline maintenance that lasted around one to two weeks per year. This led to a reduction in their income. Total, in Chapter 5 of the 2020 Universal Registration, under “non-financial performance: value creation for host regions,” mentions that “in Myanmar, the offshore pre-project baseline study detailed the issues relating to fisheries. It quantifies the potential impact on the entire fishing value chain for each village by category of fishermen and by type of fish caught and processed in the region.” However, on the ground, local respondents did not seem to be aware of this information.

    Total and other pipeline operators neglected their responsibility to ensure that their operations did not adversely impact communities’ livelihoods, nor were they held accountable for incurring financial loss in those villages. CSR was designed to veil such negative impact and companies’ responsibilities to respect villagers’ rights to livelihood.

    Environmental impacts of conservation projects

    Respondents also raised concerns related to the Tanintharyi Natural Reserve (TNR). The TNR covers almost 420,000 acres in Yebyu and Dawei townships, bordering Mon State and Thailand. It is funded by the three pipeline operators in Tanintharyi: Total, operator of the Yadana gas project, Thai PTT Exploration and Production, operator of Zawtika gas project and Malaysian Petronas, operator of Yetagun gas project. The project is managed by the Myanmar government with technical support from the Wildlife Conservation Society.

    The conservation area claims to compensate for the impacts of three gas pipelines, the Yadana, Yetagun and Zawtika. Despite that, respondents feel that the money invested in this project is a waste because of illegal logging and gold mining in the reserve area. Total reported that they provided USD 1.8 million to the TNRP during the 2013-2017 period as part of the Yadana CSR program. Respondents lodged a complaint about illegal logging and mining in the area with Total. However, Total responded that they can only provide financial assistance and that villagers have no right to interfere with the project’s activities. Some respondents assumed that the company might not have a say since the area is controlled by the Tatmadaw. Regardless, respondents said they still would like to see the company do something to prevent that issue by, for example, raising it with relevant stakeholders in the project so as to adopt measures to hold responsible parties accountable.

    Others have already raised significant issues with the TNR including displacement, loss of livelihood, loss of traditional knowledge, practices and cultures, militarization and increased police presence, land dispossession, loss of landscape, and loss of sense of place due to a lack of consultation with Karen indigenous people in the area. The three pipeline operators did not consider the potential impact of the TNR on indigenous people. Due to a lack of meaningful and effective consultation with indigenous people in the area, the conservation project created negative externalities. As a result, the indigenous people lost forests and lands they had depended on for their livelihood, and their traditional cultures and practices. Troops deployed to the area to protect the conservation zone threatened their sense of security. Pipeline operators neglected these issues and failed to take responsibility for these impacts.

    Conclusion

    Ten years ago, in 2011, the UN issued its Guiding Principles on Business and Human Rights (UNGPs). While reflecting on ten years of the UNGPs, the UN stated that they have shifted the focus from corporate philanthropy to accountability as an essential feature of responsible business. This implies that CSR programs should be an added value after meeting the threshold of ensuring accountability for any human rights issues associated with the project. However, the evidence we collected reveals that the Yadana CSR program produced negative impacts, despite Total’s stated commitments to CSR and responsible business practices.

    Total and its partner, Chevron, claims that they are responsible companies––this may seem credible with the first glance at Total’s CSR results. However, our analysis shows that embedding CSR as a core policy without integrating accountability, sustainability, and access to remedy in its operations left affected people and communities with grievances and without remedy. Total failed to diligently identify these issues related to the operations of the Yadana pipeline project and did not address them adequately. They managed to keep their critics at bay by portraying only a positive narrative of their local impact. Our findings and analysis also imply similar issues with other oil operators still operating in Myanmar that have similar reputational issues.

    Corporate Accountability Myanmar (CAM) is a group of local researchers formed in 2020 to conduct research on corporate accountability issues in Myanmar.

     Notes

    [1] This summarizes claims from the human rights organizations cited above.