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Stockholders Press Unocal on Myanmar

May 20, 2003|Elizabeth Douglass | Times Staff Writer

A group of major pension funds Monday called on Unocal Corp. to reconsider its role in a controversial pipeline project in Myanmar, saying it was concerned that the El Segundo-based company's involvement there was a financial liability and a drag on the stock price.

The group, led by New York State Comptroller Alan G. Hevesi and joined by California's treasurer and the state's two largest pension funds, released a letter to Unocal management about the Myanmar project during the oil company's annual shareholders meeting Monday in Brea.

In all, representatives from 10 investment funds owning more than 4.5 million Unocal shares, or 1.6% of the stock, signed the letter and requested a meeting on the matter with Charles Williamson, Unocal's chairman and chief executive. The 10 funds include the California Public Employees' Retirement System and the California State Teachers' Retirement System.

Unocal's role in Myanmar, previously known as Burma, has been dogged by controversy for years. But until recently, the most vocal objections have come from a determined band of human rights groups and Myanmar nationals, who have held protests outside the company's shareholders meeting for several years running.

A wide range of organizations, from the International Labor Organization to the U.S. government, have accused the Myanmar government of human rights abuses and using slave labor. Through it all, Unocal has maintained that its investment in local schools and hospitals has benefited villagers -- and its commitment to the pipeline project has not wavered.

"We have no intention of leaving Burma because we believe in what we are doing there," Williamson told shareholders Monday.

In its letter to Williamson, parts of which were read at the meeting Monday, the investor group said: "We fear that Unocal's involvement in Burma, in particular its business relationships with the Burmese military regime, has contributed to the stock's decline in value and could further depress the stock price due to the political and legal risks associated with the joint venture."

In particular, the group cited Unocal's possible financial liability in several pending cases accusing the company of looking the other way as soldiers protecting a gas pipeline project allegedly dragooned residents into forced labor and committed other human rights violations, including murder and rape.

Much of the discussion Monday centered on the Myanmar project, but shareholders also voted down shareholder proposals that would have split the chairman and CEO posts and would have supported hiring an investment banking firm to consider putting the company up for sale.

Unocal's stock price fell 29 cents to $28.81 Monday in New York Stock Exchange trading.

Times staff writer Lisa Girion contributed to this report.

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