TOTALFINA - ELF Part 1

[michel3392@xxxxxxxxxxx]

Updated version of
TOTALFINA-ELF MERGER: STARTING OVER WITH A CLEAN SLATE
by Francis Christophe, published in Golias magazine, France, October 1999

Part I
BLACK TIDE AND DRUG-MONEY LAUNDERING: DIFFICULT TIMES FOR TOTAL-FINA-ELF, 
THE NEW PETROLEUM GIANT

The sinking of the old tanker Erika with its 30,000 tons of heavy fuel-oil, 
mid-December in the north Atlantic 90 kilometers off the French coast, is a 
very heavy blow to the new petroleum giant which resulted from last autumn' 
s merger of TotalFina with the other French petroleum company Elf.

The black tide from Erika' s cargo being moved from a Total refinery in 
France to an Italian customer of TotalFina, shatters publicly the facade of 
respectability behind which the petroleum company shelters its murky/shadowy 
practices in the heart of Europe as well as in Burma.

In the eyes of public opinion TotalFina will bear for long the 
responsibility of this ecological disaster, even if legally the ship -owner 
has to bear the consequences. Denying evidence during all public 
interventions Mr. Thierry Desmarest , president of the group, has always 
stubbornly pretended that in all its operations, notably in Burma, Total 
exclusively employed subcontractors who offered all guarantees in the fields 
of respect for the environment and social rights of their employees. This 
was false for its Burmese operations, where Total' s main subcontractor is 
the Burmese army, unanimously condemned by international authorities for its 
massive and continuous human rights violations as well as for its drug 
trafficking. It is also false for Europe: How will Thierry Desmarest manage 
to convince millions of French citizens who will struggle for months with 
the black tide that the owner of a 25 year old Maltese tanker which split 
into two, with an Indian crew on board, had offered all guarantees?

In June 1999 a collective of Belgian politicians and NGOs had called for the 
boycott of TotalFina to protest against the behaviour of the French 
petroleum company in Burma. The black tide on the French coast can only 
amplify this movement, illustrating these words by Abraham Lincoln: " ..you 
can't fool all the people all the time".

TOTALFINA-ELF MERGER: STARTING OVER WITH A CLEAN SLATE

The PEO launched by TotalFina on July 5 - and accepted by Elf on september 
13, after negociations - has been cheered unanimously for resulting in the 
creation of a French petroleum giant, while ignoring that 65 % of TotalFina' 
s and 51 % of Elf' s capital had ceased being French by the end of July 
1999.

This merger also constitutes a huge whitewash operation, a unique 
opportunity to conceal in the background, if not wipe out altogether, acts 
which, whether in Africa, in Asia, or in the Court of Justice in Paris, have 
seriously damaged the reputation of all parties concerned: Both French 
petroleum companies and their  protector, the State.

Although this regrouping was seen as a mean for the French petroleum 
industry to escape potential foreign predators, it can only make it more 
desirable for anglo-saxon pension funds which had previously tilted the 
majority of Total's capital in their favour (according to the New York Times 
on August 29 1999). While acting in the name of national interest Thierry 
Desmarest will remain the person who, with the support of the minister of 
finance, made the entire French petroleum industry as one single block, 
available to foreign investors. However, in order to reassure new 
shareholders once and for all, a major facelift is necessary.

ELF = TOTAL + EVA JOLY

The need for a whitewash operation appears obvious for ELF, largely because 
of the mediatic impact of investigations by judge Eva Joly which had 
followed a complaint by the then incoming director Philippe Jaffre against 
his predecessor Loïc Le Floc-Prigent, for abuse of social funds. This 
spectacular  process aimed at breaking with practices which had been common 
before the privatisation of ELF but would not however bring them to an end. 
This requested intrusion of the judicial process, followed closely behind by 
the media, rapidly brought discredit upon the company, and opened a real 
Pandora's box. During the instruction, lists of beneficiaries of undue gifts 
were published; Several were imprisoned, including the former director; 
Roland Dumas, former minister of foreign affairs, then President of the 
Constitutional Council, came under investigation and finally accepted to 
take leave from his high functions. On the other hand not a word filtered 
through to the main media regarding the fundamental role played by ELF in 
the civil war which has been bleeding and devastating Congo Brazzaville 
where for the last three years ethnic cleansing has been practiced with a 
zeal visibly doped and financed by petroleum.
However, though contrasting with such somber revelations about ELF, the 
image of knight in shiny armour carefully cultivated by Total' s Thierry 
Desmarest cannot make illusion: If one were to look for similar networks of 
hidden financing practices by the Total group, one would indeed find 
subsidiary/daughter companies which serve the same functions as critics 
found with ELF. If a judiciary inquiry was ever conducted into Total ' s 
actions in Burma, it would not fail to show that the leadership of the 
French petroleum company is not sheltered from potential investigations on 
complicity to ethnic cleansing, forced labour and drug-money laundering. 
Those responsible within UNOCAL, Total's American minor associate in the 
Yadana gas project, have been indicted by the Los Angeles Federal Court 
following complaints by Burmese refugees native of the area where Total has 
built the pipe-line with support from the French government and from 
President Chirac personally.

THE BURMESE FIASCO : DRUG TRADE AND CRIMES AGAINST HUMANITY

Early July 1999 Bernard Amaudric Du Chaffaut, a former director of 
international affairs for ELF, assumed his new functions as French 
embassador in Burma. As if he already enjoyed diplomatic immunity in his 
post of high responsibility within ELF the future ambassador slipped 
comfortably through the judiciary net which had aimed  to close on those 
who, like his colleagues Andre Tarallo and Alfred Sirven, used to control, 
with Loïc Le Floc-Prigent, the many paths of ELF's financial flux.
At the foreign affairs ministry, the Total-Elf merger was a done thing, even 
before the PEO began..
A heavy task awaits the expert in petroleum diplomacy, the task of trying to 
avoid further infection of Total' s Achilles' heel (according to financial 
analysts) : its close collaboration with the Burmese narco-dictatorship.
Neither Bernard Pottier, his predecessor in Rangoon, nor Thierry Desmarest 
have managed to curtail the flow of  information about the many forms of 
support by Total to the military dictatorship. To such an extent that Nobel 
Peace Prize Laureate Aung San Suu Kyi, leader of the democratic movement, 
was quoted in a front-page article in Le Monde (1996 ) accusing the 
petroleum company of being the "strongest support" of the illegitimate 
rulers in Rangoon.
Total' s investment in Burma, the largest so far in this country which is 
the world' s largest heroin supplier, remains below 1% of the company' s 
turnover. Yet the defence of Total' s presence in Burma  has been for the 
last four years the focus of over half the director' s interventions in the 
general assembly and fully mobilizes the company' s communication sector 
without managing to prevent the launching in Belgium of a European boycott 
of the company in protest against its collaboration with the Rangoon junta.
In defence of its operations in Burma Total states that it does not 
contravene any French, European or international law; Now all laws 
criminalize drugs traffic and laundering of income thus generated. When 
facing accusations against the company' s Burmese partner MOGE (Myanmar Oil 
and Gas Enterprise, a drug-money laundering tool for the Burmese army 
leaders) its management  simply replies "it is not our duty to determine 
whether the Burmese state entreprise  for exploitation of hydrocarbons is - 
or is not - involved in drugs traffic and in money laundering". Neither 
Total nor its American partner UNOCAL, nor MOGE, have ever sued media or 
books which explicitely accused them of participating or being accomplices 
to drug traffic and /or drug-money laundering.
Why is it that companies which are so concerned with their image have never 
tried over three years to end by an appropriate judiciary process this very 
defamatory campaign?
Mr Desmarest prefers to declare that he is "happy and proud of what we do in 
Burma" and  to boast, in the general assembly of shareholders, that Total 
brings (injects?) legal resources into the Burmese economy which is visibly 
short thereof... the essence of  money laundering!

According to the French OGD (i.e geopolitical drugs observatory), and its 
confidential newsletter, La Depeche Internationale des Drogues (the 
International Drugs Despatch) of October 1994, the contract between Total 
and its Burmese partner MOGE makes the French petroleum company an 
instrument of drug-money laundering. The mechanism is simple: Cash payments 
by Total to its Burmese associate are used to trigger a laundering process 
for much greater amounts. This system permits justification of funds spent 
by the SLORC (acronym adopted by the junta, for State Law and Order 
restoration Council) later renamed SPDC (State Peace and Development 
Council) for several purchases of weapons.

This is a simple, almost primitive, process named laundering by simple 
piling. An operator owns amount X of dirty money which he must return to the 
legal circuit. He simply must have in hand amount Y of lawful origin, 
obviously smaller than X, to trigger the pump. SLORC, which did not 
initially need a more sophisticated method, just practiced this simple 
piling with a single source of  lawful money: Payments by Total to MOGE (The 
French petroleum company acknowledges a payment of 15 million dollars as 
bonus fees). Every time the Rangoon regime needs to justify the origin of 
sums  paid to suppliers, the SLORC representative asserts that this money is 
indeed from Total.

Never has any member of Total's management attempted to dispel this 
accusation of complicity to drug-money laundering. When asked about the 
"symmetry" between payments by Total and much larger amounts paid out by 
SLORC to buy helicopters from Poland, then under the leadership of Lech 
Walesa, another Nobel Peace Prize laureate, the spokesman only replied that, 
having  links only with the MOGE, Total can in no way be involved in the 
arms trade.

The osmosis between MOGE, a state company, and SLORC's opaque financing 
network is not taken into account. Asserting that Total deals only with MOGE 
is, in the Burmese context, a denial of reality. Total' s behaviour and the 
behaviour of its local representatives in Burma establish this clearly: In 
this country, and for any kind of presence, there is only one interlocutor, 
a single associate: SLORC. The Burmese military intelligence supplies Total 
with interpretors and supervises all recruitment of local manpower; The 
Burmese army is in charge of security at the work site, which in Burma is 
understood in an extensive sense geographically and in every respect.
Total  formally denied making use of forced labour, whether directly or 
through its subcontractors; now its main subcontractor (in terms of number 
of staff ) is the Burmese army, whose permanent and widespread use of forced 
labour has already been documented,  particularly in the area of the Yadana 
pipeline, as has been its practice of ethnic cleansing. The widespread use 
of unpaid forced labour caused the International Labour Organisation (ILO), 
in an unprecedented move, to de facto exclude the junta from its proceedings 
in 1998. On the other hand several testimonies coincide in describing the 
monthly cash payments made by Total to the ten, or so, heads of batallions 
stationed in the pipeline' s protected zone, the supply of vehicles and 
fuel, and the use of Total' s helicopters for purely military purposes : 
transport of men and supplies as well as observation.

All these evidences of compromise with a illegitimate regime hated by the 
vast majority of the population and such financial collaboration with the 
narco-junta tarnish Total's image, make it a target for law-suits as 
accomplice in crimes against humanity and drug traffic...to no avail. The 
gas was to flow to Thailand from July 1998 according to contract. In fact, 
severely hit by the financial crisis, the Thai customer has not completed 
the building of the Rachaburi power generating plant as of September 1999. 
Yet this is the sole potential user of a Burmese gas whose quality and price 
do not compete with Thailand's own supply, already in excess of its present 
needs. The accounts published last summer of Total group' s Burmese 
subsidiary show cumulative advance payments to the MOGE of over 800 million 
French Francs. Could the regime have escaped bankruptcy  without this -huge 
in the Burmese context- injection of funds ? Through what network were these 
funds moved ? Is it legitimate that the French taxpayer might have to pay  
-through the COFACE = French Insurance company for external trade-  for 
strategic mistakes by the leadership of a private company with majority 
foreign ownership ?

THE BURMESE HANDICAP
>From their first explorations into Burmese territorial waters, Total' s 
management was fully aware of the problems the company would face in getting 
involved in this country. It would have been hard to ignore the tactics used 
by the SLORC to gain and maintain power: The massacre of tens of thousands 
of unarmed civilians, the annulment of free parliamentary elections, the 
continuing house-arrest of Aung San Suu Kyi, and the unrelenting countrywide 
harassment of  elected members of the National league for Democracy as well 
as students, monks and union members representing a civil society which had 
believed in the promise of free elections.
Total' s management was also well aware of the new means of acquiring 
income, which the military regime had resorted to, financially tight as it 
was with the escalation of military spending, cessation of foreign aid and 
general incompetence. Laying their hands on drug money, wiping out the last 
remaining teak forests of continental Asia and  widely using unpaid forced 
labour, had not sufficed in balancing out their debts.
In 1991, when plans for the exploitation of the Martaban gulf gas fields 
were drawn up, there was no longer any doubt. The main operator of the 
Yadana gas field would have to evacuate production via a pipeline towards 
Thailand, the only potential client  in the region. (First victim of the 
Asian financial crisis, Thailand is still, to this day, unable to receive 
Burmese gas). Before reaching Thailand, the pipeline inevitably passes 
through a significant land area which has not been controlled by Rangoon 
since Burma' s independence.
Rapidly the French negotiators could see a rigid attitude in their Burmese 
counterpart: No question for the SLORC to enter any dialogue with the Karen 
rebels who had for the past 40 years controlled a long stretch of land next 
to the Thai-Burma border.
Business relations with the Rangoon regime excludes any form of contact with 
the opposition, be it the  population at large  and its wishes for an open 
democracy, or armed "ethnic" groups involved in open warfare for several 
decades in en effort to obtain a true federal system, as was written in the 
first constitution of the country.
In order to make themselves fully understood  SLORC's generals made it clear 
to their business partners that any contact, official or not, direct or not, 
between contractors and the political opposition would not be allowed. It 
would be penalised by the cancellation of current contracts, without 
compensation, and the indictment of the company' s representatives for 
"intelligence with the enemy".
In the case of the Yadana gas field, the operator's room for manoeuvre was 
significantly reduced: To throw oneself into this adventure has an 
inevitable consequence: to side whole-heartedly with the regime, and its 
illegitimate hold on power, despite the resounding victory of democrats in 
the 1990 elections. It also meant counting on a military victory of the 
SLORC against the Karens.
In this fifty year old conflict, siding with the Rangoon government did not 
necessarily mean supporting a fast end to the fighting.  The contracts for 
the supply of gas could well be at risk from fighting in a terrain 
favourable to guerilla forces.
When Total decided to offer its services for the exploitation of the Yadana 
gas field, its management knows that it can trust the Karen threat will have 
been eliminated before the pipeline works begin. This trust cannot rest only 
on the declared plans of the Burmese military, whose past and present 
battles against the Karens have not reached the announced results. SLORC's 
secretary one, general Khin Nyunt, head of military intelligence, had 
announced the fall of Manerplaw, the Karen headquarters, in summer 1992, 
while this happened only, after betrayal by some Karen units, in 1995...
In its preparations for its Burmese project Total has indeed been supported 
by the French  "special" services which, directly or through private 
"security" companies and consultants have assessed the situation according 
to their particular criteria. Without hesitation they lent a hand to the 
Burmese army in order to achieve their aim: To eliminate any threat in the 
pipeline area, a stretch of land striding the pipeline over a width of tens 
of kilometers either side.

End of Part I

______________________________________________________
Get Your Private, Free Email at http://www.hotmail.com