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Case Description: A Disputed Contract – IHC Caland in Burma

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European Business Ethics Cases in Context

Part of the book series: Issues in Business Ethics ((IBET,volume 28))

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Abstract

IHC Caland designed, built and operated material, ships and complete systems for offshore oil and gas, dredging and shipping industries. The relatively strong economic growth in Southeast Asia offered opportunities for IHC Caland and other specialised suppliers. In the summer of 1998, an IHC Caland subsidiary contracted for an offshore project in Burma’s territorial waters. The order was for several hundreds of millions euros, hence of considerable interest to the company. The contract led to public stir because it involved work in a country controversial for its human rights situation. Many human rights, environmental and union organisations expressed their outrage and tried to move IHC Caland to cancel the contract. A controversy was born. It took IHC Caland long resisted the claims made by the NGOs. It maintained that the morality of commercial agents is limited to abiding with all legal laws and regulations. It therefore argued that it had not committed any moral wrong and was allowed to do business with the Burma government.

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Notes

  1. 1.

    This chapter uses the name “Burma”. The military government has since changed the country’s name to Myanmar, but dissidents continue to use Burma; (Myanmar) or Myanmar (Burma). We chose Burma for ease of reading.

  2. 2.

    This chapter uses newspaper articles, press releases, annual reports and other documents to sketch developments relating to IHC Caland’s operations in Burma. In addition, we used conversations with Peter Ras, coordinator of Burma Centrum Nederland (BCN) and Jeremy Woodrum, a campaign leader in the US Campaign for Burma. We improved the factual accounts in the text using IHC Caland’s and BCN’s comments to earlier versions of this chapter. To aid readability, in this chapter we did not refer to each individual newspaper article. A fully annotated version of this chapter can be requested from the authors.

  3. 3.

    There are similar specialised protest groups in other countries (http://www.freeburma.org, last viewed on 20th February 2010).

  4. 4.

    See the French website Info-Birmanie (http://www.info-birmanie.org/birmanie/rep.htm, last viewed on 9 December 2004) or Suu Kyi’s interview for the European Parliament in which she says “Now is not yet the time for investment. It is more important that there is the right social and political climate which will ensure the right structural changes that are necessary for good economic recovery and sustained development. Until then I think investment is too early.” (http://www.tni.org/archives/vervest/burma.htm, last viewed on 9 December 2004).

  5. 5.

    http://www.xs4all.nl/~bcn/campagne-ihc.html, last viewed on 26 November 2004.

  6. 6.

    For a survey of companies that have left Burma, see the Canadian Friends of Burma (CFOB) website (http://www.cfob.org/CorpComplicity/CorpComplicity.shtml) and The Irrawaddy Online (vol. 12, no. 9) (http://www.irrawaddy.org/aviewer.asp?a=457&z=14, both last viewed on 14 December 2004).

  7. 7.

    See http://www.perc.ca/PEN/1994-03/s-freeman.html, last viewed on 2 March 2005.

  8. 8.

    IHC Caland. Press release, 5 August 2004 (http://www.ihccaland.nl/html/News/05aug04.htm, last viewed on 1 December 2004).

  9. 9.

    This boycott struck several US oil companies; Spar and La Mure (2003) described the conflict between Unocal and the US Free Burma Coalition. See also Trouw (1998).

  10. 10.

    Friends of the Earth Netherlands, “IHC Caland doet nog steeds zaken met Birma” (http://www.milieudefensie.nl/earthalarm/alarm77birma.htm, last viewed on 9 December 2004). See also The Independent (2000). Similar discussions were held earlier about laying a gas pipeline for another large gas field, the Yadana field; see The Financial Post (1996).

  11. 11.

    Burma Centrum Nederland (http://www.xs4all.nl/~bcn/, last viewed on 26 November 2004).

  12. 12.

    The banks in question are ABN-AMRO, ING, Fortis, Rabobank and NIB Capital. See also Friends of the Earth Netherlands, “Bagger Rapport Birma” (http://www.milieudefensie.nl/globalisering/publicaties/Bagger_Rapport_Birma_deel_voor_website.pdf, last viewed on 26 November 2004).

  13. 13.

    An ABP spokesman responded with surprise, but as a shareholder he was unfamiliar with the loan from NIB Capital. The subject would be treated in ABP’s next meeting with NIB Capital.

  14. 14.

    BCN and Friends of the Earth Netherlands press release, 11 December 2002. Civil society organisations and parliamentary parties asked the banks to cut off financial support for IHC Caland (http://www.milieudefensie.nl/persber/globalisering/021211.htm, last viewed on 26 November 2004).

  15. 15.

    BCN, Vereniging Milieudefensie, Novib, de Stichting Interkerkelijke Organisatie voor Ontwikkelingssamenwerking (ICCO), Humanistisch Overleg Mensenrechten (HOM), Both Ends, the International Union for Conservation of Nature and Natural Resources (IUCN), Greenpeace, Justitia et Pax, Multatuli Travel, Body Shop, Pax Christi, Interkerkelijk Vredesberaad (IKV), Transnational Institute (TNI), Stichting Onderzoek Multinationale Ondernemingen (SOMO), XminY Solidarity Fund, Evert Vermeer Stichting, several parliamentary parties (CDA, VVD, PvdA, GroenLinks, D66, SP and ChristenUnie) and ASN Bank all signed the appeal (http://www.milieudefensie.nl/persber/globalisering/021211.htm, last viewed on 26 November 2004).

  16. 16.

    This is an op-ed article written by a staff-member at the Centre for Research on Multinational Corporations (SOMO) and a staff member at Irene, an international organisation monitoring the strategies of international companies and employees’ rights.

  17. 17.

    Similar discussions about the announcement of US sanctions took place in Dutch media in the summer of 2003.

  18. 18.

    BCN oral communication from coordinator P. Ras (12 January 2005).

  19. 19.

    IHC Caland’s shipbuilding has since split from its dredging operations. After the sale of its shipbuilding operations, IHC Caland continued operating under the name SBM N.V., already in use for its offshore division.

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Authors and Affiliations

  1. Department of Organization Science, VU University, Amsterdam, The Netherlands

    Frank G. A. de Bakker & Frank den Hond

Authors
  1. Frank G. A. de Bakker
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  2. Frank den Hond
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Correspondence to Frank G. A. de Bakker .

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Editors and Affiliations

  1. , Department of Philosophy, Tilburg University, Tilburg, 5000 LE, Netherlands

    Wim Dubbink

  2. Fac. Business & Economics, Catholic University of Leuven, Naamsestraat 69, Leuven, 3000, Belgium

    Luc van Liedekerke

  3. Michelangelostraat 62, Amsterdam, 1077 CG, Netherlands

    Henk van Luijk

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de Bakker, F.G.A., den Hond, F. (2011). Case Description: A Disputed Contract – IHC Caland in Burma. In: Dubbink, W., van Liedekerke, L., van Luijk, H. (eds) European Business Ethics Cases in Context. Issues in Business Ethics, vol 28. Springer, Dordrecht. https://doi.org/10.1007/978-90-481-9334-9_13

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