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BurmaNet News: January 7, 2000



---------------- The BurmaNet News ----------------
January 7, 2000
Issue # 1435
----------------------------------------------------

Noted in passing" "Though posing no threat now, Burma could change in 
the future. While most countries are downsizing their armed forces, 
Burma keeps expanding its military capability" Thai General Mongkol 
Ampornpisit (See BKK POST: THAI GENERAL WARNS OF BURMA ARMY EXPANSION)

==========
HEADLINES:
==========

Inside Burma-
 DEMOCRATIC VOICE OF BURMA: SENIOR NLD MEMBER RELEASED
 AUSTRALIAN NEWS NETWORK: END OF AN EXTENDED BREAK IN BURMA
 REUTERS: JAILED BRITON IN ONE-WEEK HUNGER STRIKE IN MYANMAR 

International-
 THE NATION: DRUG TRAFFICKERS CHANGE ROUTE
 BKK POST: THAI GENERAL WARNS OF BURMA ARMY EXPANSION
 BBC: INDIA SEEKS BURMA BORDER HELP
 UNI (India) INDO-MYANMAR TRADE MEET TODAY
 GOLIAS (France): TOTALFINA-ELF MERGER: STARTING OVER WITH A CLEAN 
 SLATE

***********************************************
DEMOCRATIC VOICE OF BURMA: SENIOR NLD MEMBER RELEASED

Oslo, in Burmese 1430 gmt 5 Jan 00 

Maung Moe Thu, alias U Sein Myint, a member of the Central
Executive Committee of the National League for Democracy [NLD],
movie director and writer, has been released from detention on
3rd January. Sayar [honorific] Maung Moe Thu was imprisoned for
two years in Insein Jail and is reported to be in poor health at
the time of his release. 

He was arrested along with U Kyaw Min, architect; U Win Htein,
former captain and personal aide of Aung San Suu Kyi; Sayar Maung
Wun Tha; and Sayar U Thein Tin, NLD organizer for Yangon
[Rangoon] Division. He was detained for two years without trial.
Architect U Kyaw Min and U Thein Tin have died. The wife of Sayar
Maung Moe Thu died last December. 

***********************************************
AUSTRALIAN NEWS NETWORK: END OF AN EXTENDED BREAK IN BURMA

5jan00 

RANGOON: Engineering students in Burma began returning to classes
this week, three years after the military regime closed all
universities to quell political protests. 

Authorities have taken the precaution of moving the university
classes away from traditional campuses - the focal points of
student unrest in the capital, Rangoon (Yangon). 

Universities, hotbeds of activism since British colonial rule,
have been open for a total of only 30 months since 1988, when the
current generation of generals came to power after crushing an
uprising against military rule. 

The Government's economics tsar, Brigadier-General David Abel,
told foreign reporters that classes at universities and colleges
were being reopened gradually and all the institutions would be
holding classes by May. 

He said medical and dental institutes and technical colleges were
also open. Third and fourth-year engineering students from the
capital began studies on Monday at the newly opened Yangon
Technology University in Hlaingtharyar, 16km from downtown
Rangoon. 

"Though this new campus is far from my house, I am so excited to
return to classes," said one of the students. 

Other classes of the institute remain suspended. First and
second-year engineering classes were expected to resume early
this year. 

The Government says campuses have been relocated for student
convenience. 

Students outside Rangoon will study in Prome, about 240km north
of the capital, and those in upper Burma will study in Mandalay,
the second-biggest city. 

Yangon Technology University is the new name for Yangon Institute
of Technology, whose old campus in the capital used to be a
centre for student demonstrations, including protests that
triggered the failed 1988 uprising. 

Along with other colleges in Myanmar, it was last closed on
December 9, 1996, after protests against police handling of a
quarrel between students and some restaurant workers. 

The protests had quickly taken on a political edge, and the
generals had accused Nobel peace laureate Aung San Suu Kyi, the
leader of Burma's embattled democracy movement, of organising
them.

***********************************************
REUTERS: JAILED BRITON IN ONE-WEEK HUNGER STRIKE IN MYANMAR 

11:13 p.m. Jan 06, 2000 Eastern 
BANGKOK, Jan 7 (Reuters) - A British pro-democracy activist
jailed for 17 years in Myanmar staged a week-long hunger strike
before Christmas to protest against the jailing of dissidents,
activist and diplomatic sources said on Friday. 

A British consular official visited 26-year-old James Mawdsley on
December 22, the last day of his hunger strike in jail in the
northeastern town of Kengtung. 

``He was on a hunger strike before Christmas,'' said a British
diplomat in Yangon. ``He's fine now. He'a lost some weight, but
he wasn't ill.'' 

The All Burma Students' Democratic Front, a dissident exile group
based on the Thai-Myanmar border, said Mawdsley took only water
during the hunger strike. 

It said he staged the protest against the imprisonment of Min Ko
Naign, a student dissident who was one of the leaders of
Myanmar's 1988 uprising for democracy. 

The ruling military took direct power that year by killing
thousands to crush nationwide protests and has since tried to
stamp out dissent through arrests and intimidation. 
Diplomats and dissidents say the authorities are holding hundreds
of political prisoners, including many members of the National
League for Democracy, which won Myanmar's last election in 1990
but has been prevented from governing by the military. 
Mawdsley, a Briton from Lancashire who also holds an Australian
passport, was jailed after illegally entering Myanmar in
September to distribute pro-democracy leaflets. It was his third
arrest for activism in the country in two years. 
Last year, after release from 99 days in Yangon's notorious
Insein Jail, he reported being beaten with bamboo poles, having
staves rolled down his shins and being deprived of water. 
However his mother told Reuters last month after visiting him in
late November that he had not been tortured while serving this
term. 

***********************************************
THE NATION: DRUG TRAFFICKERS CHANGE ROUTE
Jan 07, 2000 
Politics 

ANTI-narcotics authorities yesterday warned that amphetamine-
trafficking ethnic Wa and ethnic Hor Chinese insurgents from
eastern Burma have changed their trafficking route, relying
instead on flights coming in from the Northeast. 
Narcotics Control Board secretary general Sorasit Saengprasert
said yesterday that the amphetamine traffickers had stopped using
their normal route through northern Thailand to get to Bangkok.
They have instead been ferrying their drugs to Bangkok on
domestic flights from Nong Khai, Nakhon Phanom and Ubon
Ratchathani in the Northeast.. 
Sorasit said the domestic airports being used were too small to
be equipped with narcotics detectors. He said even Bangkok
International Airport failed to check for drugs at its facility
for these domestic flights. 
PM's Office Minister Jurin Laksanavisit would today discuss
installing narcotics detectors with Thai Airways Co and would
hold similar talks with police with the aim of setting up an
anti-drug squad equipped with sniffer dogs at domestic airports,
he said. 

At a news conference yesterday, Mae Hong Son airport director
Somnuek Senabin dismissed Sorasit's claim that the airport had no
narcotics-detecting equipment. ''Mae Hong Son airport has for
long had metal and narcotics-detection equipment installed,'' he
asserted. However, he did add that the airport authority had no
duty to check hand-held luggage carried by passengers. 
The anti-narcotics intelligence authorities, who have taken a
pounding for being ineffectual after the recent chance uncovering
of 2.6 million amphetamine tablets on a housing estate in
northern Bangkok, said yesterday the drugs belonged to a
trafficking group known as Maha Ja, active in the Muang Mae Hong
Son district. 

The intelligence authorities added that airline officials might
have turned a blind eye to couriers carrying luggage containing
drugs. 

**********************************************
BKK POST: THAI GENERAL WARNS OF BURMA ARMY EXPANSION

Bangkok post - Jan 07, 2000. 
MILITARY LECTURE
Thais need to remain ever vigilant
Burma constantly expanding military

Thailand should remain vigilant with Burma posing a potential
security threat, the supreme commander warned yesterday.
Gen Mongkol Ampornpisit made the remark while delivering a
lecture to some 200 officers at National Defence College and
Joint Staff College.

"Though posing no threat now, Burma could change in the future.
While most countries are downsizing their armed forces, Burma
keeps expanding its military capability," he said.

Gen Mongkol said such concerns had been voiced at a recent
meeting of supreme commanders from the Asia-Pacific region.
Neighbouring countries such as Malaysia, Laos and Cambodia are
not a threat to the region, despite an enhancement in Vietnam's
naval capability, he said.

Gen Mongkol also stressed the importance of maintaining good
relationship with Cambodia.

Relations with Rangoon have turned sour following the embassy
siege by armed Burmese dissidents in October last year.
While Thailand keeps a watchful eye on drug traffickers from
across the border, Burma harbours suspicions Thai authorities are
giving support to its minority groups. Burma could not accept the
fact that those who seized its mission were provided safe passage
across the border in exchange for hostage release. The supreme
commander said the Thai defence budget is the smallest compared
to those of Singapore and Malaysia.
The latter is meanwhile developing its air defence capability by
procuring fighter jets-F/A18, F-16 and MiG-29 models.
Malaysia's procurement of MiG-29 equipped with so-called
Amraamskis from Russia would likely make the United States sell
its Amraams to other countries in the region, Gen Mongkol added

**********************************************
BBC: INDIA SEEKS BURMA BORDER HELP
January 7, 2000


By Subir Bhaumik in Calcutta 
The Chief of the Indian Army, General Ved Prakash Malik, is in
Burma to explore possible joint military operations against
ethnic rebel groups operating along the border between the two
countries. 
Delhi has had some reservations about Burma's military regime,
but is now coming to terms with what Indian foreign ministry
officials described as "realities on the ground." 
At the peak of the anti-military uprising led by Aung Sang Suu
Kyi, India came out in open support of the cause of democracy in
Burma. 
That upset the government in Rangoon, but inspired hundreds of
Burmese pro-democracy activists to take shelter in India. 
Reassessment 
But after the military suppressed the uprising and established
close relations with China, India began a reassessment of its
Burma policy. 
In 1995, Delhi tried to co-ordinate a joint military operation
against a column of nearly 200 rebels from north-east India who
were trying to enter the country from Burma after having picked
up a huge assortment of weapons on the Arakan coast. 
But the Burmese government backed out halfway into the operation
when Delhi awarded the Nehru Peace Prize to Aung Sang Suu Kyi. 
Though the Indian army is largely apolitical unlike its
counterparts in Pakistan and Burma, it is increasingly resentful
of what it sees as the inept handling of national security issues
by the political leadership. 
Army leaders believe that they should be involved in making
policy regarding national security. The three services - the land
army, the navy and the air force - have been openly critical of
Delhi's decision to trade off three Kashmiri militants for the
hijack hostages in Kandahar. 
Insurgency fears 
Observers say that India is trying to develop close relations
with its neighbours - not least because of the activities of
anti-government insurgents along its borders. 
Bhutan, Nepal and Bangladesh have been under pressure from Delhi
to tackle militants and so-called Pakistani agents who, Delhi
says, are active in those countries. 
India has never made such allegations against Burma, but it is
keen to get Burmese support to crush ethnic rebellions active on
the borders of the two countries. 
Observers say that if General Malik could manage to get his
Burmese counterpart to agree to joint military operations against
these rebels, he would have achieved much of Delhi's perceived
strategic objectives in the east. 



***********************************************
UNI (India) Indo-Myanmar trade meet today

SHILLONG Jan 6 (UNI)

In a top secret affair, a 20 member Indian delegation headed by
Union commerce and industry minister Murasali Maran and a 16
member Myanmarese team will hold bilateral talks here tomorrow.

The delegation of both the countries which reached the state
capital today are to have discussions on insurgency and border
trade between them.

According to an unconfirmed source, Maran was supposed to lead
the India side, but no information could be ascertained about the
Myanmar delegation.

The design and details of the hurriedly convened high level
meeting was kept so secret by the Army's 101 area here that even
top government officials in Meghalaya pleaded ignorance about it.

Meanwhile, an official source said Union power minister's P R
Kumaramangalam would arrive here tomorrow.

However, the power minister's visit was not in line with
tomorrow's talks, the sources said.

When contacted, a senior Army official said the meeting was not
of a secret nature but hastened to add that the matter was kept
under wraps due to security reasons.

Army authorities further informed that the visiting delegation
had no plans and programmes to meet the state government
officials and they would leave for Guwahati as soon as the
meeting with the Army authorities was over.

The high level parleys which were likely to continue till january
8 were expected to sort out the stand off in border trade in
Moreh in Manipur since the past ten days, official sources said.

The venue of the conference was turned into a high security zone
under the control of the Army.

It may be recallled that India had sealed the border gates at
Moreh on the Indo-Myanmar border indefinitely following the
erection of fencing along the no-man's land late last month. The
entire border trade in the area had come to an abrupt halt since then.

The possibility of export of power from India to Myanmar was also
understood to be on the agenda. The Indian delgation included
officials from the ministries of trade and commerce, power and
external affairs, among others, sources said.

The Imphal Free Press
Imphal January 2000 Friday

***************
UNI (INDIA): ARMY CHIEF HOLDS TALKS WITH BURMESE GENERAL

IMPHAL, Jan 6

The chief of army staff General VP Malik, visited Myanmar where
he met his Burmese counterpart to discuss bilateral issues
concerning security of both the countries before returning back
to New Delhi. General Malik had arrived yesterday here on his
four day tour in the North East.

General Malik accompanied by Eastern Command Lt General HRS
Kalkat and other senior army officer left Imphal for Myanmar at
7am today, sources here confirmed.

Reliable sources said General Malik is visiting the neighbouring
country following an invitation by his Myanmarese counterpart.
Details of the visiting are not known.

The army and the Assam Rifles here declined to divulge the
details of the army chief's programme of visiting Myanmar "We are
not told the details of programme. The army chief visited Myanmar
to mark a courtesy call," the sources said.

The state government officials also pleaded that they knew
nothing about the visit. The details of the talks between the two
army chiefs of the two countries could not be immediately known.
Sources here believed that cross border militancy came up for
discusion during the meeting. 

Meanwhile, Chief Secretary, H Jelshyam has left for Guwahat by an
evening flight today to attend the Indo Myanmar Meeting to be
held at Shillong tomorrow.

High ranking officials of the external affairs department will
also attend the meeting. However home ministry officials will not
attend it. The meeting will discuss details of the border
disputes and the closure of gate number 2 at Moreh which hampered
trans border trade between the two countries. 

*********************************************
GOLIAS (France): TOTALFINA-ELF MERGER: STARTING OVER WITH A CLEAN SLATE
by Francis Christophe, published in Golias magazine, France, October 
1999

Part II
THIERRY DESMAREST, A CAREER SERVED BY OPPORTUNITY

Thierry Desmarest' s modest image since early 1999, when he became 
France' s  first general manager after the success of a friendly PEO on 
Petrofina, is  more than a feature of his character : It is the cold 
analysis of the  fragile conjunction of events which placed him at the 
helm of the world' s  only petroleum group headed by a Frenchman.
Better than any of his peers who with him followed  the ideal elite 
educational path of X -Mines (X=Ecole Polytechnique, Mines = Ecole des 
Mines, both elite of the "grandes ecoles")- followed by a ministerial 
post,  Thierry Desmarest is able to appreciate the circumstances without 
which he  would have remained a faithful second in command to Serge 
Tchuruk*. Present  general manager of Alcatel, artisan of Total' s 
recovery in the early 90s,  Tchuruk had no plan to leave an increasingly 
comfortable position. For  Desmarest an unlikely scenario opened the 
path to the highest position: The  French Alcatel group, a giant in 
telecommunication and turbines etc, had  been headed for ten years by an 
 X-Mines who eventually had to be dismissed. 
Under investigation for abuse of social funds due to lavish expenditure 
for  the protection of his private residence, Pierre Suard refused all 
compromise  and held on beyond reason to his comfortable post. To 
attempt a recovery of the seriously damaged Alcatel, the decision was 
finally made to resort to the aptitudes that Serge Tchuruk had shown as 
head of Total. He eventually accepted on two conditions: To name as his 
successor Thierry Desmarest, his faithful second in command, and for 
himself to remain a board member of Total.

Another marker in Thierry Desmarest' s rise was Algeria. Early in his 
career he was Total's representative there. Featuring on his official 
CV, his mission in the South Mediterranean country had demonstrated the 
technical ability,  negociating skills, as well as quality of leadership 
which were to permit his fast climb through the group' s hierarchy. 
Through the extreme opacity of Franco-Algerian affairs a single feature 
transpired clearly: The part played by France in the exploitation of 
Algerian hydrocarbons was constantly diminishing ... And Desmarest' s 
mission did not change this trend. Was this a skilfully disguised 
fiasco? Or is it that Desmarest managed to make believe that, without 
him, French industry would have been entirely excluded from the Algerian 
underground reserves in spite of  a 
decision by president Mitterand to pay a premium for Algerian gas. 

After the nationalization of hydrocarbons  in 1971, ELF left Algeria and 
Total remained the only French collaborator of the Sonatrach, the 
powerful state company which controls over 90 % of the Algerian cash 
income, a gateway for the hidden finances which flow into networks of 
influence on both sides of the Mediterranean. From his discrete Algerian 
observatory Thierry Desmarest was able to observe hidden mechanisms of  
the oil business and although he did not produce glamourous results - 
nor excite jealousy - he nonetheless 
built up a solid connection network.

The Burmese episode revealed a new facet of  his character. Under a 
forthcoming and consensual appearance - some medias go as far as 
qualifying his smile as angelic - Thierry Desmarest can also be abrupt 
and stubborn.  

In his capacity as director for exploitation/ production and as Serge 
Tchuruk' s number two he had worked to have the Yadana contract signed, 
after which he accepted no criticism on this subject and bluntly hushed 
any discording voice within Total' s management. (Other petroleum 
companies, notably Texaco and Arco, after previously praising the 
Burmese mineral resources reconsidered their initial stand and 
withdrew). After he succeeded Tchuruk and became Total' s president in 
1995   the Burmese question allowed him to clean up all contestation and 
eliminate those few who might have questioned options such as his 
external growth policy, seen by some as negative for its potential 
results: It would  dilute and unavoidably internationalise Total' s 
capital.

Having thus built up a monolithic group Thierry Desmarest followed 
fashion and , after BP - AMOCO- ARCO and Exxon-Mobil headed for the 
supermonopoly of petroleum concentrations. A first target was the 
Belgian company Petrofina, previously turned down by Elf 's Philippe 
Jaffre who considered it too expensive.  This was the object of an 
amicable Public Exchange Offer on the last pride of Belgian  industry 
controlled by Albert Frere** who, with 9% of shares, was personally  
becoming the largest shareholder of the new Totalfina group. Before the 
merger 40 % ot Total's capital was in foreign hands and this increased 
to over 50% after the merger. While still digesting its Belgian prey 
Total then aimed for Elf. Some see in this operation the 
effect of bankers' manipulations: Desmarest had been led to believe that 
 Elf was about to launch an offer on Total, and was thus prompted to act 
quickly, while in fact obsessed as he was to increase the shareholders 
return, Jaffre was not planning anything of the kind.

By prioritizing mergers and acquisitions, Thierry Desmarest knowingly 
modified the composition of Total' s capital, and supervised the group 
passage to a majority foreign ownership. Mathematically the board of 
administrators was restructured ; Converging interests and collusions 
which are typical of French capitalism faded away. Maintaining a French 
director general and head office now needed strictly financial 
justifications, with all the required blackmailing (in sectors such as 
jobs, taxes, etc) of the administration. The example of Totalfina + Elf  
under majority foreign ownership is only a foretaste of what French 
firms can expect when they change the hexagone into a large-scale 
Belgium, which according to its " model " allows foreign control of the 
jewels of its economy. Lionel Jospin and Jacques Chirac' s noticeable 
silence - as they did not praise the merger 
- shows embarassed and powerless rulers.

For Thierry Desmarest, at the helm of a supertanker under a flag of 
convenience, how long would he find this gratifying?

*Duting two years, before being head of Total, Serge Tchuruk had been a 
right hand for Loic Le Floc Prigent, then General Manager of  the 
chemical company Rhone-Poulenc. When Le Floc became general manager of 
Elf and Tchuruk headed Total no hostility was ever felt, some 
understanding existed between them. At the geometric centre, where the 
petroleum networks met, Tchuruk had a critical part in the Total-Elf 
agreement of September 12. He had previously blessed the merger with 
Petrofina, even though he had not suggested it, and the PEO on Elf. What 
a bitter lesson for Philippe Jaffre: 

He had to give up his post as ELF' s  general manager by a request from 
the former right -hand of his ennemy Le Floc Prigent, under the terms of 
an agreement between Desmarest and his (former) "boss". For Jaffre 250 
millions FF worth of stock options and golden handshake would make up...

** Baron Albert Frere, ennobled by King Baudouin, is often seen as the 
grave digger of Belgian industry. He started making and selling nails at 
a very early age in the suburbs of Charleroi, and from there on went a 
long way as a self-made man. He progressively took control of the entire 
Belgian iron and steel industry, before selling off to Usinor, moving on 
to finance, laying his hands on the Generale de Belgique banking 
company, whose control, again, went to the French Suez-Lyonnaise banking 
group. His next prey was Petrofina, which just had a similar fate. He 
will now be the main shareholder (with 4.5 % of shares) in the future 
Totalfina + Elf group. He is not an easy partner, at least not for those 
who are sensitive to national interest. In case of conflict within the 
board of directors defence of his 
own interests will not necessarily coincide with the defence of 
Desmarest's 
post.

AN OIL POLICY FROM THE 1920'S

France?s oil policy was first established just after the First World 
War, with two principal objectives : guaranteed access to external 
supplies ? essentially in the Middle East at that time ? and a secure 
reserve kept in metropolitan France. A company was established, with 
majority public ownership, to receive certain war reparations : the 
German share of the Iraqi petroleum consortium, which became the origin 
of the Compagnie Francaise des Petroles (French Petroleum Company), from 
which Total was born.

At the beginning of the 1960s, at the initiative of De Gaulle' s 
government, a second major publicly-owned company was created, to 
exploit the natural gas reserves of Lacq, and the discoveries made in 
the Algerian Sahara, which was still (for a short time) a French 
departement. This company eventually became the ELF group (Essences et 
Lubrifiants Francais ? French Petrols and Lubricants). Pierre Guillaumat 
was named as managing director ?previously 
minister of defence under General de Gaulle, he had also been one of the 
founders of the DGSS (Direction Generale des Services Speciaux ? 
Directorate General of Special Services) in London in the 1940s, a 
direct ancestor of the current DGSE (Direction Generale des Services 
Exterieurs ? Directorate General of External Services).

Following the first oil crisis of October 1973 (which brought the 
spectre of shortage and a quadrupling of oil prices), the end of the 
Pompidou regime and the beginning of that of Giscard D'Estaing 
formalised the latest manifestation of France?s energy policy. The 
consequences of this stay with France today. Since ELF and Total were 
not able to guarantee stable energy supplies, the government decided to 
follow the path of nuclear energy. To underline the intentions behind 
this policy, the petroleum companies invested in the nuclear sector, and 
it was thus that Total became a major share-holder in Cogema, the public 
company charged with extracting, enriching and re-processing the ?atomic 
fuel? (uranium and plutonium). This policy made France the country most 
dependent on nuclear energy (three-quarters of our electricity comes 
from nuclear generation), and gave her also a powerful nuclear-energy 
lobby linked to the petroleum companies, excluding for years to come any 
debate on the energy strategies of the country.

In parallel to this, and to seek to maintain the status of a great 
power, Total and Elf were expected to give France the capabilities of a 
global-player in the petroleum industry. Elf was to concentrate on the 
old French colonial territories in Africa, while Total was to work in 
those other regions where the French presence was weaker.

At the same time, by a phenomenon of osmosis, officials passed from 
senior posts in government into management posts in the petroleum 
companies, and vice-versa.. Thus a director of Elf Africa, previously an 
official in the secret services, ended his career as French Ambassador 
in Gabon ?

Under the Third and Fourth Republics, and in particular during the 
?gaullist? part of the Fifth Republic, petroleum matters came under the 
joint supervision of the Ministries of Industry, of Foreign Affairs, of 
Finance, and of Defence, and were subject to the influence of ?networks? 

which assisted in the sharing of these petroleum benefits among these 
different ministries, among the majority parties, and among various 
personalities. This Colbertian tradition of an administered economy was 
however undermined by the  gradual establishment of the European Union, 
the signature of the Single Act, and the process of privatisation. In 
addition, the share capital of the two petroleum companies has passed 
for the majority into foreign ownership. France has constantly opposed 
the slightest suggestion of an European energy policy. But her 
implacable defence of national sovereignty has in the case of the 
petroleum sector led to a defeat as yet little realised ? the gradual 
passage of the French petroleum companies into foreign hands.

In this context, it is nevertheless surprising to note that while the 
underlying parameters have radically changed, there has as yet been no 
change in the automatic and massive French government support for these 
two companies. Why should French diplomacy have as one of its priority 
strategies the support of an illegitimate regime in Burma, in order to 
support the implementation of a pipeline contract entered into by a 
private company, for gas supplies to Thailand ? Yet this is the motive 
cited by the Quai d?Orsay to press the US Federal Court in Los Angeles 
to abandon the proceedings against Total in the complaint placed by 
Burmese refugees for violations of human rights and acts of barbarism.

The State as appendage of the oil companies

Whether in Iran ? where Total obtained government support for braving 
the American ban on investing in that country ? or in Angola, Nigeria, 
Burma, it seems that the osmosis between the state and the oil companies 
has been reversed, and the initiative has moved to the other side. The 
management of the two oil companies has determined the political and 
diplomatic choices subsequently endorsed by the political authorities. 
The poor fit between a governmental orthodoxy deriving directly from the 
Colbertist tradition, and a liberalised and globalised economic 
environment, is creating serious contradictions, mistakes which weaken 
the credibility of French policy.

Elf, the largest French company in terms of turnover (until the 
Total-Fina merger in early 1999), has been a topic for gossip for three 
years now. Some of its secrets have already figured in the press, 
including the existence and operations of its Swiss subsidiary, 
distributing hand-outs to the Parisian political classes and their 
friends and girlfriends,  and the interlinking of Elf?s own intelligence 
services with those of the French government. Judicial enquiries have 
brought to light a network linking with the state security services 
(DST, DGSE, RG, PJ ). Secret documents coming from the prosecution 
service and the defence ministry were found in the safe of J. Pierre 
Daniel, head of the security department of Elf, in his office on the 
42nd floor  of the Elf Tower in Paris. Among these papers was a 
confidential analysis on Burma, its diplomats in France and on French 
citizens or companies working with Burma. Forced to resign by this 
scandal, Mr Daniel (previously an official in the state intelligence 
services and still a colonel in the military reserve) was succeeded by 
General Patrice de Loustal, who had just retired as head of the ?Action 
Service? in the DGSE. General Loustal?s CV speaks for itself : 
paratrooper in the Foreign Legion, this man from the shadows had been 
director of the top-secret trainingcentre for combat-frogmen at Aspretto 
in Corsica (which produced Commandant Mafart, arrested and convicted by 
the New Zealand authorities for the 
sinking of the Rainbow Warrior in Auckland harbour, and the killing of 
one of its crew). He subsequently commanded two paratroop regiments 
before serving, from 1993 to 1996, as head of the Action Service of the 
central French intelligence agency.

Some months after the search of the Elf headquarters by Judge Eva Joly, 
the publication of a series of press articles on the activities of a new 
Elf intermediary in Angola showed up the practices which Elf?s new 
Managing Director Jaffre claimed to have abandoned.

Seeking in 1994 to expand their activities off the coast of Angola, Elf 
launched a complex operation to support the regime of Angolan President 
Dos Santos, including in particular facilities for the supply of 
armaments in large quantity and at supposedly advantageous prices. This 
operation was intended to obtain a research and exploitation permit for 
Elf for the promising Girasol deep-water field. With or without the 
support of its security service, Elf contracted the company Brenco 
(closely linked with Mr Jean-Charles Marchiani, appointed as Prefect of 
the Departement of Var shortly after the operation was completed). 
Brenco, in association with a Slovakian import-export firm created for 
this purpose, entered into a $300 million contract for the supply of 
military materials from the ex-Soviet Union on behalf of the authorities 
in Luanda. Payments were made by the supply of crude oil by the Angolan 
state company Sonangol to intermediaries 
designated by Brenco and its Slovak partner.

Various complaints were expressed, both by the Angolans (who found that 
the specifications, quality and quantity of arms did not always 
correspond to the contract), and by American petroleum companies 
irritated by what they saw as disloyal competition.

Oil contracts are not known for their transparency. But these particular 
contracts, linked to arms-sales, were of an opacity which raised a 
number of questions, in particular as regards the circumstances in which 
a giant like Elf could select as intermediary a small company like 
Brenco, with no known links with Angola, with Russia, or with the oil 
industry.

According to corroborated sources, Brenco had gained the confidence of 
Elf management through a particular ?network?. Within the Elf hierarchy, 
persons close to the then Minister of the Interior, Charles Pasqua, had 
lent a friendly ear to a ?friend? of Pasqua who had described Brenco?s 
success in a comparable and delicate triangular operation in Burma, on 
behalf of Total. 

For Mr Marchiani, the Total-Elf merger was a reality some years before 
the stock-market bid.

The magazine L?Express published in early December 1996 a memo 
attributed to the ex-managing director of Elf, Loïc Le Floch-Prigent, 
who at the time was lodged in the Sante Prison in connection with an 
investigation into the abuse of state property. Le Floch-Prigent 
underlined that even if a ?strong-arm tradition? was clear within Elf, 
this was ?absolutely not the case with Total?. Quite apart from the 
incongruity of such statements from a man who could not speak for a 
company with which he had no reason to be familiar, it is difficult not 
to consider this memo as a warning. In case his message was not heard, 
or his imprisonment was prolonged (in fact he was 
released before the New Year), Le Floch-Prigent could have been able to 
pass other compromising revelations to the press, spreading the dirt 
beyond Elf alone.

While Total does not have the strict equivalent of the security service 
of \Elf, this clearly does not mean that it never has a need of such 
services, which rather than integrating within its own operations it 
prefers tosub-contract to outside bodies.

This approach also seems to correspond with Total?s habit of recruiting 
from the Ministry of Foreign Affairs, in contrast to Elf?s links to the 
Defence Ministry and the security services .

The sub-contracting approach can also be seen in Total?s difficult 
experiences in the Burma of the SLORC. In order to ensure the security 
of its construction sites for the gas pipeline in the South of the 
country (and in addition to the services of the Burmese army), Total has 
drawn on the services of certain companies of ?security consultants?. 
These companies have no direct link to Total but are very close to the 
French intelligence services, a common characteristic of the companies 
PHL Consultants, OGS and ABAC.

In the same way, for the delicate negotiations which preceded the 
signature of the contract for the Yadana pipeline, Brenco and its local 
affiliate SETRACO- Myanmar has been an inevitable intermediary, 
something which Total believes it can continue to overlook.

By means of this supposedly watertight compartmentalisation, and in 
contrast to Elf in Angola, Total continues to deny any link between the 
supplies of arms (Polish helicopters in this case) and its pipeline 
contract. To admit this would of course be a major embarrassment ? in 
contrast to Angola, Burma is subject to an EU arms embargo. And as 
regards the means of payment, 
Angola could at least draw on its substantial petroleum revenues, while 
the SLORC?s Burma could at the time of these arms purchases draw only on 
the revenues arising from its heroin exports.

The special character of Total?s approach comes also from the care which 
it brings to its alliances. Bearing in mind the risk of sanctions 
arising from its position as largest investor in a Burma under the heel 
of an illegitimate narco-dictatorship, Total brought into the Yadana 
consortium an American partner, Unocal , seen as a solid shield against 
a possible reaction from Washington. At the same time, the French 
Embassy in Rangoon has been transformed into a zealous auxiliary of 
Total, supporting its cause to the point of caricature.

This has not been sufficient to sweep away all suspicions of implication 
in and profiting from the heroin trade. The members of the petroleum 
consortium, benefiting from the ?protection? of the Burmese Army whose 
equipment purchases are substantially financed by drugs money, thus 
benefit also from this illicit cash. In addition, Unocal and Total are 
accused of covering up and contributing to the illegal practices of 
their Burmese state partner MOGE (Ministry of Gas and Energy), which has 
been described as ?laundering on behalf of the Burmese military 
intelligence services the profits arising from the export of heroin?.

A DELICATE PARLIAMENTARY MISSION

In order to better understand the context in which the petroleum 
companies operate, the Foreign Affairs Committee of the National 
Assembly established in the autumn of 1998 a mission of enquiry into the 
role of the petroleum companies in international politics and the social 
and environmental impact of this role. This responded in part to a 
repeated demand from various groups within the plurality of the Left ? 
particularly the Greens ? who had been calling for a formal 
investigation of Elf. Such an investigation was excluded, apparently 
being contrary to the principal of the separation of powers, whereby the 
legislature could not enquire into a matter already being considered by 
the justiciary.

Three Deputies ? Marie-Helene Aubert (Greens) as rapporteur, plus Pierre 
Brana (Socialist Party) and Roland Blum (UDF) ? were appointed as 
members of the mission, which in distinction to a formal Parliamentary 
committee of enquiry did not have the power to compel testimony. Persons 
invited to give testimony can decline to attend, and do not testify 
under oath. Government departments and private companies may decline to 
provide papers called for by the mission.

In these conditions, and with modest means (as indicated by Marie-Helene 
Aubert ? see interview), the mission worked for more than one year on 
this ?colossal? subject. Field investigations were carried out in Africa 
(Chad and Cameroon), in Asia (Burma and Thailand) and in the USA. Not 
wishing to reveal prematurely the tone of their report (which should be 
submitted to the Foreign Affairs Committee in mid-October 1999), the 
Deputy did not hide the fact that the announcement of the Total-Elf 
merger changed the perspective and impact of their report. ?It is clear 
that neither Elf nor Total, during this period, is interested in seeing 
a number of unfortunate stories appear before the public.? But at least 
some routes have been explored outlining the need to improve financial 
transparency and fight corruption, and the means of doing this, and 
regarding the management of the relationship between the petroleum 
companies and regimes who care little 
about human rights.

Ms Aubert underlined that to her knowledge, no pressures have been 
brought to bear (as of 1 September 1999) to delay the publication of the 
mission?s report till after the Total-Elf merger, and she intends to be 
particularly vigilant on this point. The Desmarest-Jaffre agreement of 
13 September certainly brought an end to the conflict between the two 
Chairmen, but does not obstruct the exposure of some of their less 
transparent or less shining practices in Africa and Asia. Their image, 
as well as that of their god-father the French state, should not be 
improved as a result. And if the 
judicial enquiries in their respect point to the horizon, the 
stock-markets should not be indifferent.

So far ignored by the media, the parliamentary mission of enquiry has 
nevertheless given rise already to certain counter-attacks. In the 
Senate, the Chairman of the Committee on Foreign Affairs and Defence, 
Xavier Galouzeau de Villepin, organised at the beginning of 1999 a 
hearing with the participation of various experts from the petroleum 
sector, including Mr Desmarest of Total, who in particular argued for 
the sound basis of his Burmese investment.

At the start of the parliamentary mission?s work, a coincidence in the 
National Assembly ? Joseph Daniel resigned from his post of Director for 
Communications for Total and joined the private office of Parliament 
Chairman Laurent Fabius, before taking up, eight months later, a 
position in the High Council for Audiovisual Matters.

In addition, certain tapes of the mission?s hearings have been abridged, 
even censored of elements which would tarnish the image of the petroleum 
companies and of French diplomacy. Their retranscription has not made it 
easy to complete the work of the mission, while further hindrances have 
come from the insistence of certain senior officials to rewrite 
entirely, indeed to censor, the passages dealing with the testimony they 
had given. Was this intended to give Total time to complete its purchase 
of Elf ?

A NEW SUPERTANKER, UNDER A FLAG OF CONVENIENCE

At the time of the announcement of Total?s purchase of Belgium?s 
Petrofina, a Wall Street chronicler told of the love borne by a 
well-known financial analyst for his two poodles, named Elf and Total, 
that he would take for walks on the pavements of Manhattan at the end of 
a tricolor leash. At that moment, in December 1998, 40% of Total?s share 
capital was owned by foreign investors and American pension funds, which 
(according to Intersec Research) manage across the planet a total of 
eleven thousand billion dollars, or about forty times the annual budget 
of France and one hundred ten times the market capitalisation of 
TotalFina plus Elf. Calling since the 14 July for the establishment of 
pension funds ?a la Francaise? to fight the ?foreign peril hanging over 
French companies?, President Chirac is seeking to fill an Olympic 
swimming pool with a wine-glass, when the competition has an aqueduct at 
their disposal. No financial arrangement can hinder the purchasing-power 
of these American pension-funds. State safeguards (such as the ?golden 
share?, or veto rights maintained by the State after privatisation) are 
banned by the WTO in cases where they seek to persist after the merger 
process. A complaisant French press has awaited the merger agreement 
between Total and Elf before timidly asking Desmarest what would happen 
to the golden share held by the French government in Elf. The Financial 
Times on 17 September reported that this golden share would be continued 
in the new merged company, but in ?a modified form?, which ?can not be 
invoked when the threshhold is crossed (when existing shareholders take 
a majority share), but only in case of a hostile takeover?. The 
continued use of the golden share would in any case be contrary to 
European law, and must inevitably be abolished, even if after a 
rearguard action in the courts.

As the only petroleum company still under French management, Total-Elf 
may be starting with a clean slate, or embarking on a new voyage. But 
the new combined group has raised its anchor and henceforth will be 
sailing under a flag of convenience. The tricolor will continue to fly 
only for as long as the pension-funds find it convenient. The 
supertanker is just a ship, its home-port and its flag can vary at the 
will of the ship-owner, and the captain has the choice of obeying his 
orders, or of hanging up his sea-boots. Desmarest may propose, but the 
ship-owner will dispose.

End of Part II, the final part


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