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Home > Campaigns > Burma Selective Purchasing


State Efforts to Exert Moral Influence Overseas Under Challenge

By William Bole

BOSTON (ANS) — Five years ago, Simon Billenness and other social activists wanted to strike a blow for democracy in Burma, a military dictatorship in Southeast Asia. So they reached into the tool kit of human rights advocacy and pulled out a tried-and-true strategy: tapping the purchasing power of states and local governments to pressure tyrannical regimes abroad. So-called selective purchasing laws in the United States had been credited with helping to bring down the system of apartheid, or racial subjugation, in South Africa. And, pro-democracy activists in Massachusetts lobbied successfully for an identical law targeting Burma and American companies that do business in that country.

But now, the “Burma law” in Massachusetts is facing a tough constitutional challenge, as the U.S. Supreme Court prepares to hear arguments in the case on March 22. If lower-court decisions hold, this and dozens of similar statutes around the country could be wiped off the books. Basically, the Massachusetts law says the state will not do business with any firm that has commercial ties with Burma, renamed Myanmar by the dictatorship there. A decision in favor of international companies challenging the Massachusetts law would “repeal a key legacy of the anti-apartheid campaign,” said Billenness, a senior analyst of Trillium Asset Management, a social investment firm in Boston, and coordinator of the New England Burma Roundtable.

“If the Supreme Court had ruled against South Africa selective purchasing laws, then Nelson Mandela might still be in prison today,” he said, referring to the political prisoner who became president after the triumph over apartheid. In their petition to the Supreme Court, lawyers for Massachusetts said a ruling against the statute in effect would grant a “heckler’s veto” to those who don’t like the decisions made by citizens democratically through their legislatures, about how their tax money should be spent at local levels.

From that perspective, one of the hecklers in this argument is the National Foreign Trade Council. Representing 580 firms, the trade association in Washington has mounted the court challenge in a campaign against what it describes as local sanctions laws. The legal argument is that the Massachusetts law unconstitutionally intrudes on the exclusive foreign-policy-making powers of the federal government. “Our system of government was not designed to allow the fifty states and thousands of municipalities to conduct their own individual foreign policies,” said council president Frank Kittredge, noting that state and local governments have a combined purchasing power of $1 trillion.

The council says in its lawsuit that over 30 of its members are “currently affected by this (Massachusetts) law,” although it declined to name the companies, saying it feared boycotts against them. Neither would it describe the nature of the companies’ business ties with Burma.

A distant but powerful force in this debate is the European Union, which filed suit against the Massachusetts law in the World Trade Organization. Together with Japan, the EU cited international trade rules that require governments to base their procurement decisions solely on price and performance, not political considerations.

“We share the concerns about Burma. But this has become a serious issue of trans-Atlantic concern,” said Charlotte Hebebrand, an economist with the trade section of the European Commission Delegation in Washington. “We’re concerned about the further proliferation of sub-federal [state and local] sanctions laws.”

Partly under pressure from U.S. trading partners, the Clinton administration has filed a brief siding with the National Foreign Trade Council. Hardly anyone denies that Burma is ruled by one of the world’s most brutal military regimes. Its human rights record includes forced labor, ethnic cleansing and the torture, rape and execution of political opponents, as documented by international rights groups and the U.S. State Department. In 1990, the Burmese people voted overwhelmingly for the pro-democracy party led by Nobel Peace laureate Aung San Suu Kyi. But the regime threw out the results and imprisoned many of the elected leaders. Under virtual house arrest, Suu Kyi has called for international sanctions against Burma, like those imposed on South Africa in the 1980s.

Nearly two dozen cities and municipalities, from New York to Los Angeles and San Francisco, have adopted selective-purchasing measures that specifically target Burma. Massachusetts has the only statewide law, which effectively bars state agencies from awarding contracts to companies that operate in Burma. Those contracts amount to about $2 billion annually. The debate coming to the Supreme Court is not over Burma’s record, but whether state and local governments can use the power of the purse against human rights violators around the world. On another level, it amounts to a showdown between transnational corporations and grassroots activists, between global trade and local sovereignty.

According to WTO rules on government procurement, the only valid criteria in awarding contracts are whether the company can provide the right product or service at the right price. In ruling against the Burma law, the federal district and appeals courts cited the challenge filed with the WTO. “Whether a company does business in Burma doesn’t tell you anything about the company’s ability to fulfill the contract,” said Hebebrand, referring to the trade rules. “The qualifications have to be based on economic considerations. In this case, it’s a purely political consideration.” But supporters of the Burma law say global trade isn’t just about economics. “The issue is whether state and local governments have a right to apply standards of public morality and human rights to their purchasing,” said Robert Stumberg, a professor of law at Georgetown University who filed a pro-Burma-law brief on behalf of 78 members of Congress. In addition, 22 state attorneys general have signed a friend-of-the-court brief in support of the statute.

Stumberg pointed to the WTO procurement rules that exclude considerations apart from price and performance. “If that’s the standard, then literally hundreds of local purchasing laws” could be affected by the outcome of the case, he said. These include, according to his tally, 47 statutes that attach pro-environmental strings to contracts; 43 “buy American” laws stating local preferences; 33 laws using human rights criteria; and 19 in support of the “MacBride principles” of equal opportunity for companies doing business in Northern Ireland. Countries targeted by selective purchasing laws include China, Cuba, Nigeria, Sudan and Switzerland (the latter involving Swiss banks and accounts once held by Holocaust survivors).

Without the legislative tool of selective purchasing, states and local governments would have to engage in “forced commerce,” trading with dictators, Stumberg added. He explained that it is impossible to do business in Burma without associating at least indirectly with the military junta, which has a firm grip on the corporate sector. Billenness, a “Free Burma” organizer and veteran of the anti-apartheid campaign, is worried about losing a reliable weapon in the human rights arsenal. He pointed out that selective purchasing laws have helped generate political momentum for action in Washington. The federal sanctions against South Africa in the mid-1980s came on the heels of local laws. And, within a few months of the Burma law’s signing in Massachusetts in June 1996, Congress authorized, and the Clinton administration later imposed, more limited sanctions in the form of a ban on most new investment.

Furthermore, striking down the statute would “severely curb the ability of citizens to direct how their tax dollars are spent. It would be a significant infringement of local democracy,” said Billenness. On March 22, when the Supreme Court will hear argue arguments in the case, he and other activists in the Free Burma Coalition will hold a rally on the steps of the Supreme Court, which is expected to render a ruling by June.

Cities With Selective Purchasing Laws Following is a list of two dozen cities (as well as one state and one county) with selective purchasing laws targeting Burma.

Berkeley, Calif., passed Feb. 28, 1995

Madison, Wisc., passed Aug. 16, 1995

Santa Monica, Calif., passed Nov. 28, 1995

Ann Arbor, Mich., passed April 15, 1996

San Francisco, Calif., passed April 22, 1996

Oakland, Calif., passed April 23, 1996

State of Massachusetts, passed Jun 25, 1996

Takoma Park, Md., passed Oct. 28, ’96

Carrboro, N.C., passed Oct. 8, ’96

Alameda County, Calif., passed Dec. 10,’96

Boulder, Colo., passed Dec. 17, ’96

Chapel Hill, N.C., passed Jan. 13, ’97

New York, N.Y., passed May 14, 1997

Santa Cruz, Calif., passed July 8, 1997

Quincy, Mass., passed Oct. 20, 1997

Palo Alto, Calif., passed Oct. 20, 1997

Newton, Mass., passed Nov. 3, 1997

West Hollywood, Calif., passed Nov. 3,’97

Brookline, Mass., passed Nov. 5, 1997

Somerville, Mass., passed Feb. 12, 1998

Cambridge, Mass., passed June 8, 1998

Portland, Ore., passed July 8, 1998

Newark, N.J., passed Sept. 21, 1998

Los Angeles, Calif., passed Dec. 15, 1998



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