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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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SRI World Group, Inc. All Rights Reserved.
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