Free Burma, Maybe

Can cities and states boycott rogue regimes?

| November/December 1999

Since the early 1990s, an international campaign modeled on the anti-apartheid movement of the 1980s has struggled to bring democracy to the people of Burma.

Like the anti-apartheid campaign, the Burma movement has used divestment and purchasing laws to pressure an oppressive regime into political reforms. More than two dozen U.S. cities and counties have passed Free Burma purchasing laws. One of the first of these measures was enacted in 1996 by the Massachusetts state legislature.

But a recent court decision threatens to pull the rug out from under the Free Burma laws--and lots of other laws at the same time. As a result of a lawsuit brought by the National Foreign Trade Council (NFTC), a Washington, D.C., lobbying group, a federal judge ruled in November 1998 that the Massachusetts Burma law was unconstitutional. A U.S. appeals court upheld the decision last summer.

'This is an attempt by a handful of large companies to repeal the legacy of the South Africa anti-apartheid movement,' says Massachusetts state legislator Byron Rushing, author of the Burma bill. 'If this court decision had happened 10 years ago, Nelson Mandela might still be in prison today.'

The Burma purchasing law itself is pretty simple: It adds a 10 percent penalty to bids for state contracts from companies that do business in Burma. And it seems to be accomplishing its objective of cutting off financial support for Burma's brutal military regime. A number of companies, including Apple Computer, Eastman Kodak, and Hewlett-Packard, pulled out of Burma soon after the law was passed.

But the law's success has corporations worried. While few companies are looking to make big bucks in Burma--the country's gross national product is less than $10 billion--some multinationals are concerned that the Burma law is only the beginning. Already, a few cities have passed similar purchasing laws focused on places like East Timor, Tibet, and Nigeria. And New York City, along with New Jersey, California, and Pennsylvania, adopted the tactic with impressive results last year, targeting Swiss banks that had dealt in gold and other assets taken from victims of the Holocaust during World War II. Shortly before a New York City law penalizing them went into effect last year, three of Switzerland's largest banks agreed to pay Holocaust survivors $2 billion.

'It's outrageous for the NFTC to claim that a boycott of companies is unconstitutional,' says Simon Billenness, an analyst at Trillium Asset Management, a Boston investment firm, and coordinator of the New England Burma Roundtable. 'If it wasn't for a boycott of tea, we wouldn't have a constitution in the first place.'

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