Analysis: Think before you move into Burma

The Burma Campaign UK has claimed a number of scalps in its drive to expose companies dealing with a country renowned for its poor human rights record. Mark Johnson looks at the reputational risk facing companies that do business with such countries

Analysis: Think before you move into Burma

Imagine yourself relaxing on the canopied observation deck of your cruiser, admiring monasteries, pagodas and shrines as they slip by on the banks of the Ayeyarwady River. This is the romance of travel as offered by Orient Express on its Road to Mandalay Cruise in Burma.

Companies doing business in Burma have not always found it such plain sailing. Orient Express was recently criticised by pressure group the Burma Campaign UK (BCUK) for continuing to operate and market its cruise despite human rights abuses under the country's repressive military dictatorship (PRWeek, 9 May).

The danger faced by any company operating in a country with a poor human rights record is that it will be seen as offering a stamp of approval to a brutal regime, posing a serious threat to its reputation.

Many companies have pulled out, including Compaq, Reebok, Premier Oil, British Home Stores and Burton. Despite having met senior BCUK representatives in July, Orient Express is adamant its Road to Mandalay Cruise will continue to operate a full season of cruises this year and next, according to trains and cruises PR manager Kathryn Malone.

'As much as anyone else, we want democracy in Myanmar (the name used by the Burmese government since 1989),' says Malone. 'We don't look at it in political terms. We've operated in Myanmar since 1995. Unlike other tour operators, we have our own people on the ground, many of whom are Burmese, and they want to see tourism continue.'

BCUK has threatened a media campaign against Orient Express if it fails to pull out, a tactic that recently caused both WPP and JJB Sports to cut ties with the country (PRWeek, 22 August and 3 October).

BCUK's strategy is to starve the military regime of foreign investment.

It does this by compiling reports on firms, mainly British, that operate in the country, based on intelligence collected by the exiled Federation of Trade Unions, Burma, which works from neighbouring Thailand.

It exposes companies that have any financial involvement with Burma - even if the company has only a small stake in the country, as in the case of WPP, which inherited Burmese advertising agency Bates Myanmar as part of its acquisition of Cordiant Communications in July.

BCUK campaigners present their findings to the 'offending' firms, offering them a last chance to withdraw from Burma before a public campaign is launched.

BCUK director John Jackson says: 'We've written to most of the UK's high-street retailers in the past year. Often they don't write back to us and it's only when the public campaign starts that they ask: why didn't you get in touch with us first?'

Companies are then added to either the 'Dirty List' (those that persist in investing in Burma) or the 'Clean List' (those that cease trading there).

British American Tobacco (BAT) is a BCUK target, and Hutchison Whampoa - whose interests include mobile business 3 and retailer Superdrug - is also in its sights. Hutchison operates a major port in Rangoon called Myanmar International Terminals Thilawa.

Jackson sees travel book publisher Lonely Planet as a key target for a reinvigorated campaign over the coming months because its guide to Burma encourages tourism.

BCUK has a keen sense of moral certainty. Jackson derides the suggestion that foreign investment could encourage a transition to pluralism and democracy, arguing that because most companies in Burma are at least part-owned by the regime, nearly all investment funds it.

BCUK has had its victories. WPP is committed to pulling out of Burma; and JJB Sports chief executive Tom Knight says: 'We only realised when it was pointed out to us (by BCUK) that one of our suppliers had used Burma. We have letters from all our suppliers confirming they will not be (using Burma) in future.'

Jackson concedes JJB Sports is not alone in having been unaware of the potential of this problem. Edelman international director, crisis and issues management, Mike Seymour says companies underestimate the risk posed to corporate reputation by supply chains.

He says: 'A CSR audit should be undertaken to provide a full analysis of exposure of supply chains to political problems or interest groups.'

Armed with that audit, says Regester Larkin partner Michael Regester, the most important thing a company can do if it decides to invest in such a country is to develop robust messages as to why it is there.

'The firm needs to explain why it is "going in" and the benefits it will provide for all,' he says. 'This will help protect the company from an eventuality such as this.'

With all that in mind, would you still be keen to take that cruise?


The 'Dirty List'

British American Tobacco Operates a joint venture with the military

regime called Rothmans of Pall Mall Myanmar

Suzuki Invested £4.6m in a joint venture with regime-controlled

Myanmar Automobile and Diesel Engine Industries

Lonely Planet still publishing its travel guide to Burma

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