Burma [a.k.a. Myanmar] is ruled by the brutal State Law and Order Restoration Council (SLORC). PepsiCo says it "helps small farmers" by buying their agricultural products when they give no proof that they are not really supporting slave labor:
"As SLORC expands its army... it evict[s] the farmers, then forces these same farmers to come back several days a week to do slave labor growing cash crops ...all proceeds [go] to the local military command except for a percentage which must be sent to a SLORC front company..." [Karen Human Rights Group, 31 Oct.1994]
There is growing outrage at firms doing business in Burma under military rule. Many actions target PepsiCo and oil firms UNOCAL, Texaco, Total & ARCO, which fund gas pipeline ventures supported by forced labour, forced relocation and other abuses.
Trade gives money and legitimacy to a reign of terror:
PepsiCo may be profiting from forced labour in Burma. Because it cannot export its profits from Burma due to the worthless currency, PepsiCo must buy cash crops and sell them abroad to earn money to pay for imported supplies for its bottling operations.
The use of forced labour on commercial farms in Burma is well- documented. But PepsiCo refuses our requests to investigate its suppliers of farm products or even reveal their names. Why? Does PepsiCo have something to hide? It also refuses to respond to such inquiries from shareholder and human rights organizations.
But PepsiCo might respond to letters from student associations that are co-signed by education authorities. Both sign lucrative contracts giving PepsiCo access to student consumers in our education system.
We need to ensure that PepsiCo's most important customers, our educational institutions, really make themselves heard. If PepsiCo receives dozens of inquiries from schools and universities, it might decide that business with dictators is more trouble than it's worth!
PepsiCo has misled the public about its presence in Burma (Myanmar) ever since entering the country in 1990, and setting up Pepsi and 7up bottling operations.
For instance, PepsiCo's public relations letter admits to the practice of "countertrade" in farm products, bought from "small local farmers" in Burma. However, it is likely that such countertrade involves companies which are fronts for the illegal regime, the State Law and Order Restoration Council (SLORC).
Canadian human rights monitor Kevin Heppner has compiled volumes of refugee testimonials for the Karen Human Rights Group. He reported in Oct '94:
"As SLORC expands its army... many battalions then confiscate much of the best farmland in their area, evict the farmers, then force these same farmers to come back several days a week to do slave labour growing cash crops such as corn, butter beans, cashews or fruit trees. After the harvest, the produce is sold with all proceeds going to the local military command except for a percentage which must be sent to a SLORC front company in Rangoon."
PepsiCo needs countertrade for hard currency to supply its operations. According to the Far Eastern Economic Review (FEER, 16 Feb 95), Burma's own money is virtually worthless: "For companies like PepsiCo, which earn revenue in kyat, it's become a major headache. Pepsi's solution: it uses its kyat profits to buy agricultural commodities like mung beans and then sell them abroad for hard currency."
Such exports are skyrocketing in Burma: "Partly as a result of this trade, Burma's exports of beans and pulses rose by 63% to $125 million in the year to March 1994." (FEER) This raises concerns about a corresponding increase in forced farm labour.
PepsiCo was alerted to such concerns by the Interfaith Center on Corporate Responsibility in New York City. In Dec '94, OPIRG- Carleton in Ottawa asked PepsiCo specific questions. They have been revised as follows:
PepsiCo has maintained an ominous silence on this subject. Why? Does the company have something to hide? When confronted directly on this matter at the shareholder meeting in May '95, CEO Wayne Calloway responded by demanding direct evidence.
He must know such proof is hard to come by. So far, no refugee testimonials directly implicate PepsiCo. But would forced farm labourers ever know to whom the crops were sold? Would even the battalion commander running the forced labour farm? Would clerks know who handle such products, whether at the Ministry of Agriculture, or perhaps SLORC strategic command headquarters? Does even PepsiCo know for sure? If it buys on the open market, do PepsiCo's sellers know the source of their products?
We may never know the whole truth. PepsiCo and SLORC are unlikely to allow an incriminating independent inquiry. But as Heppner reported recently, SLORC's incessant labour demands continue:
"Virtually everything which is built in rural Burma is now built and maintained with the forced labour of villagers, as well as their money and building materials... [Income from] forced labour farming land confiscated by the military... fills the pockets of SLORC military officers and SLORC money- laundering front companies such as Union of Myanmar Economic Holdings Ltd. Even farming one's own land is more and more becoming a form of forced labour as SLORC continues to increase rice quotas which farmers must hand over for pitiful prices... If not, the farmer is arrested and the army takes his land, only to resell it or set up yet another forced labour farm." (Karen Human Rights Group, 4 Aug 95)
David Arnott with Burma Peace Foundation adds:
"According to human rights organisations, the traditional village structure of Burma is breaking down as more and more land is confiscated for military farms and plantations run by slave labour. Combined with the export of rice while domestic consumers go without, the result is increasing malnutrition and high rates of child and maternal mortality (see recent UNICEF figures)."
Burma has become a state built on forced labour and extortion, sustained by short-sighted foreign investment. SLORC boasts repeatedly about extracting "voluntary" labour and "donations" for so-called development projects. This involves millions of people, by SLORC's own figures in its media mouthpiece, the New Light of Myanmar. Amnesty International and Human Rights Watch/Asia document other widespread abuses, including rape, torture, murder, forcible relocation and expropriation.
PepsiCo supports Burma's militarized economy. SLORC hand picks candidates for coveted jobs at foreign firms such as PepsiCo. Also, whenever PepsiCo pays the inflated official rate, it supports forced labour and all the consequences of SLORC's criminal activities. (The official rate is 5.75 Kyats/US$. The black market pays 110-120 Kyats -- a 20-fold difference!) For instance, SLORC controls the production of most heroin that reaches North America, and profits from forced prostitution. And since SLORC refuses to devote hard currency to health education or any other social programs (UNICEF, Mar '92), these rackets help promote "explosive growth" of AIDS. In Thailand, India and China, the AIDS pandemic is at its worst on their borders with Burma.
PepsiCo attempts to downplay its moral support for SLORC. PepsiCo claims not to endorse any political or military system, yet it co- sponsored SLORC's first trade show in Apr '94. It describes its partner U Thein Tun, head of Pepsi-Cola Products Myanmar Ltd., as a "private entrepreneur," but he is closely tied to companies controlled by SLORC. PepsiCo says that SLORC allows it to compete with its own struggling bottling business. SLORC has thus handed PepsiCo a virtual monopoly in soft drink production.
What does SLORC gain in return? PepsiCo's highly-visible, red- white-and-blue advertising presence is much more appealing than SLORC's grim propaganda pronouncements. PepsiCo purveys images of youth, fun and freedom, but the hidden message is that an American company endorses military rule. The American dream of democracy was a beacon for students during nation-wide demonstrations in 1988. The dream turned into a nightmare when SLORC massacred students peacefully protesting outside the U.S. Embassy.
PepsiCo is proud to be sole sponsor for sports events in Burma, providing free uniforms and subsidized pop. In so doing, PepsiCo tacitly endorses repression on campuses walled-off to discourage student organizing. SLORC has ordered teachers to "guard against infiltration of undesirable elements in the student body" (Human Rights Watch/Asia). Heroin is freely available on the heavily policed campuses. Narcotics, pop and team sports help soften the blow of poverty and oppression, and distract students who are disaffected with military rule.
PepsiCo's heavy-handed tactics worldwide, as well as in Burma, demand a response by North American students, who are its major consumers. They have already protested PepsiCo's push for long- term monopoly deals with public school boards (such as Toronto) and student associations (McGill in Montreal) to gain exclusive market access for its products. There is a huge "evict Pepsi" movement in India, where KFC has cut local farmers out of its chicken market, and Pepsi dumps imported "recyclable" plastic bottles by the ton. The firm is called one of the ten worst corporations by Multinational Monitor magazine.
PepsiCo has twice obstructed shareholder votes calling for withdrawal from Burma. CEO Calloway attacks any challenge to PepsiCo's ethics, and condemns boycotts as "strong-arm tactics" (letter dated 25 Jul 94). This charge is absurd, coming from such a formidable entity: the world's largest fast food firm, PepsiCo controls Pepsi-Cola, Frito-Lay, KFC, Pizza Hut, Taco Bell and dozens of regional acquisitions, partnerships and franchises.
In 1995 a second shareholder resolution was added, calling on PepsiCo to adopt a code of conduct on human rights. It remains on the ballot for the May 1996 shareholders meeting. This resolution has better prospects if PepsiCo faces the threat of losing its biggest customers.
This is why we urge student associations, school boards and universities to confront PepsiCo with the question:
On 10 Jul 95, under threat of U.S. sanctions, SLORC released Burma's democratic leader and Nobel Peace Laureate, Aung San Suu Kyi. Suu Kyi warns foreign companies not to invest in Burma, and cites SLORC's use of forced labourers in joint venture projects. "In the long run, it will be the businessmen themselves who will be hurt by investing at the wrong time."
Boycotts target oil firms Unocal, Texaco, ARCO and Total. Several have blocked shareholder withdrawal votes. They fund a gas pipeline in Burma supported by forced labour, being built through fragile rainforest in ethnic territory. Other firms have proven more responsive to citizen pressure.
SLORC's tourism campaign, "Visit Myanmar Year 1996," is also targeted for boycott. It too is supported by systematic forced labour. Many tourist groups such as university alumni associations are organizing junkets to Burma. But UCLA's alumni backed out of their planned trip after learning of the boycott and health risks involved.
Amoco, Petro-Canada, Macy's, Eddie Bauer and Liz Claiborne have withdrawn from Burma. Reebok, Coca-Cola and the Bankof Nova Scotia have vowed not to do business with SLORC.
Pressure is growing for U.S. sanctions against SLORC. A recent sanctions bill passed the U.S. Senate before being defeated. The cities of Berkeley, CA and Madison, WI have adopted Selective Purchasing legislation, which bar city purchasing managers from buying goods or services from companies doing business in Burma. Burma has truly become the "South Africa campaign of the '90s."
Please ask your student and school authorities to write PepsiCo. Be persistent but polite. Inform them of growing concern among students about this issue. Begin highly-visible actions in your school that target PepsiCo, such as postering, or leafleting students near vending machines. Display protest placards at the entrance to PepsiCo-controlled restaurants on campus, including KFC, Taco Bell, Pizza Hut, East Side Mario's and (in U.S.) D'Angelos Sandwich Shops, Chevy's, Hot n'Now & California Pizza Kitchens.
Please write letters similar to the one below:
If you're in college or university, write to
Ask them to co-sign a letter to PepsiCo. Other good co-signers may be faculty heads and alumni associations.
If you're in high school, write to
Ask them to co-sign a letter to PepsiCo. Other good co-signers may be school trustees and your parent-teacher association (PTA).
If authorities refuse to write PepsiCo, or if they go ahead and sign a contract with PepsiCo, target _them_ with student letters persistently urging them to ask PepsiCo about forced labour. The latest unfortunate example is the Students' Society of McGill University (SSMU) in Montreal. It just handed PepsiCo exclusive vending rights in its (William) Shatner University Centre and all SSMU-run cafeterias.
Publicize the co-signed letter until PepsiCo is compelled to respond. Distribute it, post it, submit it to local media. Make sure that people start to wonder: "DOES PEPSICO TRADE IN PRODUCTS MADE BY FORCED LABOUR IN BURMA?"
Dear_____ and _____:
I would like to share with you my concerns about PepsiCo, which does business with the brutal regime in Burma, the State Law and Order Restoration Council (SLORC).
PepsiCo engages in "countertrade" in farm products in Burma. This means that PepsiCo must buy cash crops and sell them abroad for hard currency in order to pay for imported supplies for its bottling operations.
This countertrade may well involve forced labour, extortion or land expropriation. We know that SLORC boasts repeatedly about using "voluntary" labour throughout Burma. The use of forced labour on commercial farms there is well-documented.
But PepsiCo will not investigate its suppliers of farm products or even reveal their names. PepsiCo has refused to respond to inquiries from shareholder and human rights organizations.
However, PepsiCo may listen to student leaders, especially if they have the backing of school and university authorities, since together they control access to student consumers.
Thus I request that the governing authorities of this school/university, and the president of the student association/high school club, co-sign the enclosed letter to PepsiCo. Feel free to revise this letter using the enclosed background sheet. Please send me a copy, as well as any response from PepsiCo, so that I may pass it on to concerned students and local news outlets.
Forced labour is not the only concern in Burma. PepsiCo's very presence on Burma's campuses legitimizes a pattern of repression against student dissidents. This has been documented by Amnesty International and other sources.
PepsiCo has ignored appeals by Burmese student refugees to withdraw from Burma. The All Burma Students Democratic Front has called for a global boycott. The International Union of Students and Asian Students Association are among the 50-odd organizations that now endorse this boycott. Growing numbers of North American students are becoming outraged at PepsiCo's support for dictatorship in Burma.
I hope you agree that our fellow students should be able to enjoy snack foods without supporting forced labour and repression against students anywhere in the world.
Thank you for your consideration. I look forward to your response.
Sincerely,
Wayne Calloway
Chairman & CEO
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
USA
Dear Mr. Calloway:
On behalf of concerned students at our school/university, we request that you respond to allegations that PepsiCo is benefiting from forced labour in Burma (Myanmar). We understand that you operate soft-drink bottling plants under Burma's military regime, the State Law and Order Restoration Council (SLORC).
Before agreeing to future contracts with PepsiCo, we want assurance that PepsiCo's operations in Burma do not support human rights abuses in that country. Reports from Amnesty International and Human Rights Watch/Asia indicate that SLORC has subjected millions of Burmese to forced labour.
In particular, we wish to know if PepsiCo's "countertrade" in farm products is supported by forced labour, extortion or land expropriation. We understand that, due to Burma's worthless currency, PepsiCo must buy cash crops in Burma and sell them abroad for hard currency, in order to pay for imported supplies for its bottling operations.
These allegations first came to light in October 1994 through reports by the Karen Human Rights Group. We understand that you have not responded to inquiries on this issue since then. We hope you will answer the following urgent questions:
Many of our students enjoy PepsiCo products: Pepsi-Cola beverages, Frito-Lay chips, and restaurants such as Pizza Hut, Taco Bell and KFC. However, we understand that a boycott against PepsiCo products is growing worldwide. If our students begin to observe this boycott, this may affect any future contracts with PepsiCo that we may consider.
Thank you for your attention. We trust you will respond in the very near future.
Sincerely,
Student President
Sincerely University Dean/President
cc. local media; local and campus contacts for Pepsi, Frito-Lay, KFC, Pizza Hut or Taco Bell
THE FOLLOWING ARE PEPSI-OWNED
PLEASE BOYCOTT THEM:
OPIRG-Carleton, tel (613) 788-2757, fax (613) 788-3989
Ontario Public Interest Research Group at
Carleton University, 1125 Colonel By Drive
326 Unicentre, Ottawa ON K1S 5B6, CANADA
E-Mail: ai268@freenet.carleton.ca
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