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June 28, 2000
Supreme Court Strikes Down Massachusetts Burma Law
Despite the setback to the state selective purchasing law, investors and consumers regroup to
continue their efforts for democracy in Burma.
SocialFunds.com --
For the past year, supporters of social change in Burma have rallied around a Massachusetts
selective purchasing law that had been challenged by some businesses as unconstitutional. A U.S.
Supreme Court decision last week finally struck down the Massachusetts Burma Law, but left the door
open for similar selective purchasing laws in other states or regarding other issues.
 While the Supreme Court decision was
unanimous, their ruling was narrowly focused on the Burma case, finding that federal sanctions on
Burma preempted the Massachusetts law. The larger question of the constitutionality of state and
local selective purchasing laws will have to wait until another test case.
"The Court
did not rule on the question of whether state and local selective purchasing laws 'per se'
interfere with the role of Congress to regulate foreign trade and conduct foreign policy," said
Simon Billenness. A Research Analyst at Trillium Asset Management, the oldest independent financial
management firm devoted to socially responsible investing in the U.S., Billenness has been an avid
supporter of the Burma democracy movement.
The 1996 Massachusetts Burma Law effectively
prohibited the state from purchasing goods or services from corporations doing business with Burma,
by adding a 10 percent surcharge to bids from those companies. The military government of this
Southeast Asian nation, also called Myanmar, is accused of drug trafficking, slave labor, and
torture, with the alleged complicity of companies invested there.
Modeled after similar
South Africa statutes in the 1980s credited with helping to end Apartheid, the landmark Burma Law
represented the efforts of Massachusetts to bring broad attention to human rights violations. About
two-dozen municipalities and counties around the U.S. followed suit with selective purchasing laws
of their own, and U.S. Congress also passed its own sanctions law against Burma.
Supporters of the Massachusetts law included social investors, religious leaders, the
student-led Free Burma Coalition, and 78 Members of Congress. Aung San Suu Kyi, Nobel-winning
leader of the party that won democratic elections in Burma ten years ago, suggests that selective
purchasing laws are necessary to bring social change to the country.
Last year, however,
the Massachusetts Burma Law was successfully challenged in federal appeals court by the National
Foreign Trade Council (NFTC), leading to the recent Supreme Court decision. NFTC, an organization
representing the interests of major multinational corporations with 34 members on Massachusetts'
"restricted purchase" list, claimed that the law was an unconstitutional contradiction of federal
laws.
The Supreme Court's narrow ruling is based on their finding that Congress had
intended federal sanctions to be the sole means by which the U.S. exerted economic pressure on
Burma. By leaving the larger constitutional question open, the future role of U.S. citizens and
local governments in the age of corporate globalization remains to be decided.
The court
decision is a setback for the Burma democracy movement, but it is not an insurmountable one. Other
tactics they continue to employ include organizing consumer boycotts and demonstrations, filing
shareholder resolutions to press companies to withdraw from Burma, and bringing lawsuits against
companies for their connection to human rights abuses there.
"Also, we are in the process
of writing new Free Burma legislation," said Billenness. "This new legislation will conform to the
Supreme Court's decision whilst retaining as many teeth as possible. The new laws could well
include purchasing restrictions aimed at companies that benefit from the practice of forced labor -
as many do in Burma."
While the final shape of the new Burma law remains to be seen, it
may include a divestment provision or a requirement to support shareholder resolutions on Burma, as
found in the Vermont Burma Law. Whatever its form, the successor to Massachusetts' embattled Burma
Law will probably continue to have a central role in the empowerment of local governments to help
steer the course globalization.
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