SR-6-L (60)
6 L
FINA!~CE:CMD.REB:DRC\BURMA
November 28, 1995
Santa Mon~ca, Callfornia
STAFF REPORT
NOV 2 8 1995
TO Mayor and Clty Council
FROM: City Staff
SUBJECT. Recommendatlon to Conslder a Resolution Establlshlng a
Pol~cy for the Clty of Santa Monica Prohlbltlng the
Clty from Conducting BUSlness with Companles Who Do
Business ln or with Burma
INTRODUCTION
This report provldes lnformatlon and a draft resolutlon for City
Council conslderat1on regardlng a Clty POllCY prohibltlng the
purchase of commodities produced ln Burma (Myanmar), and
proh1bit1ng dOlng business with any company and individual who
does bus~ness In Burma or with the mllltary government of Burma.
Two exceptlo~s would be allowed: a)
a person doing buslness in
Burma for the purposes of news reporting; and b)
the Clty
Manager determlnes that the commodity or 8ervlce 18 necessary for
the efficient operatlon of the City, 1S necessary for the health,
safety, or welfare of the public and no comparable product 1S
ava1lable, or the comparable product 18 not avallable wlthout
substantial flnancial loss to the City.
BACKGROUND
On July II, 1995, members of The Burma Forum (a Santa Monlca-
based group of citlzens) addressed the Clty CauDell regarding
human rlghts vlolations by the government of Burma.
In reaction
to such vlolatlons by the Burmese government, a number of
6 L
NOV 2 8 1995
companles have dlvested themselves of all ties to Burma In
addit~onl several publ1C agenc1es (includlng Berkeley [adopted],
Madison Wisconsln [adopted] I Seattle, San Diego, State of
Massachusettsl and Universlty of Washlngton [adopted]) have
adopted or are conslder1ng adopting polic1es for divesture from
BUrma.
The group urged Santa Mon1ca to adopt a resolutlon establ1shing a
POllCY prohlbit1ng the City from purchaslng commodlt1es produced
in Burma or from dOlng bUSlness with compan1es dOlng business in
Burma, lDcluding bank1ng and lnvestment serVlces.
In response to the lssues ra1sed by The Burma Forum I Clty staff
was dlrected by Council to reVlew this matter and present
information to the Clty CauDcll.
DISCUSSION
To obtaln a :lSt of companies WhlCh are doing business 1n Burma
or w1th the m1litary government of Burma, staff contacted the
Investor Responsibllity Research Comm1ttee (IRRC) in Washington
D.C The IRRC lS well respected ln the area of soclal lnvesting
and was a maJor source of lnformat1on and aid to the Clty and
other entitles ln formulatlug South Afrlca policies a number of
years ago. Their f1ndlngs are consloered extremely rellable as
the lnformatlon 1S verlfied wlth corporat1ons dlrectly and
monitored continuously The IRRC has rece1ved several requests
for data regarding Burma from other sources and has compiled a
prelim1nary l~st of companles wlth 1nvestments and/or employees
1n Burma.
Staff has also conducted a prelim1nary analysis of the impact
that a Burma divesture policy could have on Santa Monica
operations The detalled results of th1S prelimlnary analys1s is
attached includ1ng affected compan1es wlth which the Clty lS
d01ng bUSlness or has recently done business. This analysls will
be updated as additlonal informatlon may be obtained.
This prell~inary analysls lndicates that the maJor lmpact of the
POllCY would be related to the purchase of diesel fuel for the
Clty bus fleet and other Clty vehlcles. All producers are elther
doing bUSlness in Burma and/or cannot produce dlesel fuel that
meets low alr pollutlon standards. Under these condltlonsr
exceptlon to the proposed Burwa policy would eXlstr and staff
would seek dlesel fuel from companies that could meet the
requlred alr quallty standards
In the area of lnvestmentsr the proposed polley would have a
minlmal lmpact on the annual return of the Cemetery and Mausoleum
Perpetual Care Funds. The Clty'S outslde lnvestment manager of
these funds has estimated that based on current market
condltions, the annual return to the two funds could be reduced
by approximately $3r500 annually on a prOJected return of
$225,000. Additlonally, there could be a small lmpact on
poter-tial appreclatlon of the funds Howeverr City staff and the
investment manager will atterrpt to mlDlmize the posslble impacts
by pursulng other prudent investments.
The p~oposed policy combines the best features of the adopted
policles of the cltles of Berkeley and Madlson as well as the
POllCY proposed by the Burma Forum The Burma Forum has revlewed
the proposed resolutlon and concurs wlth staff's recommendatlons.
BUDGET/FINANCIAL IMPACT
The proposed resolutlon provldes for an exemption from the terms
of the dlvestlture POllCY when the partlcular service or
commodity 1Dvolved are necessary for the efficient operation of
the CitYi the health, safety, and welfare of the publici or when
no comparable product is avallable, or the comparable product 1S
not avallable without substantlal financlal loss to the Clty
occurrlDg.
Staff believes that ~he financlal lmpact of thlS polley would be
mlDlmal, and any change that does occur will be reflected in the
FY 1996-97 Budget.
RECOMMENDATION
If COUDC1I agrees wlth the polley directlon dlscussed in thlS
report, staff recommends that COUDC1I consider the attached
resolution establ1shlng a POllCY prohlblting the purchase of
commodlties nroduced in Burma (Myanmar) I and prohlbltlng dOlng
bUSlness wl~h companles and indlvlduals who do buslDess In Burma
or wlth the milltary government of Burma.
Prepared by
Attachments'
Mlke Dennls, Director of Finance
Ralph Bursey, Clty Treasurer
Pam Wortham, Purchaslng Agent
Davld Carr, Asslstant Clty Treasurer
Diane Howell, Buyer
Prellminary Analysis of Impact of Proposed B~rma
POllCY on Clty Operations
Resolutlon of the Clty Council of the City of
Santa Monlca Establlshlng a Policy Prohlblting the
City from Enterlng into Contracts for Personal
Services with those Who Do Business in Burma
(Myannar) and to Prohibit the Purchase of
Commodlties Produced in Burma or Provlded by those
Who Do Buslness lD Burma or with the Military
Government of Burma
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FINANCE'MD.RB DC\Burmare
CaUDCll Meetlng of November 28, 1995 Santa Monica, Californla
RESOLUTION NO. 8966 (CCS)
(Clty Councll Serles)
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA ESTABLISHING A POLICY
PROHIBITING THE CITY FROM ENTERING INTO CONTRACTS
FOR PERSONAL SERVICES WITH THOSE WHO DO BUSINESS IN BURMA
(MYANMAR) AND TO PROHIBIT THE PURCHASE OF COMMODITIES
PRODUCED IN BURMA OR PROVIDED BY THOSE WHO DO BUSINESS
IN BURMA AND/OR WITH THE MILITARY GOVERNMENT OF BURMA
WHEREAS, the milltary government of Burma has been
condemned by the Unlted Nations, the Unlted States Department of
State, Amnesty Internatlonal, and Human Rlghts Watch for
persecutlo~ of lts cltlzens and other human rights abuses, and
WHEREAS, the mll~tary government of Burma has denled the
ma]Orlty of ltS cltlzens the right to particlpate in the
pollt~cal process, to benef~t from the system of ]Ustlce, or to
exerClse econOffilC rlghts, and
WHEREAS, the impositlon of strong sanctions by lndivldual
munlClpal governments lU the Dnlted States can be effectlve In
helplng to encourage the development of democracy In Burma that
will respect the fundamental human rlghts of all of its cltlzenSi
and
WHEREAS, the citlzens and the government of the Clty of
Santa Monlca reflect a community united In its commltment to
I
J
pol~cies which guarantee broad human rights to people throughout
the world;
NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES RESOLVE AS FOLLOWS:
SECTION 1
Deflnitlons.
A. "Personll shall mean any individual, f~rm, partnersh~p,
corporat~on, assoc~ation, or any other organ~zation or entity,
however formed
B. "Mill.tary Government of Burmall (also known as Myanmar)
shall mean any publlC or quasl-publlC entlty sanctioned by the
State Law and Order Restoratlon Councll(SLORC) operatlng w~th~n
Burma, lncluding, but not l~m~ted to municlpal, provinc~al, or
other goVeynlng bodles operat~ng as a proxy of SLORC lncludlng
all depa~tnents and agencies of such bod~es, public utlllt~es,
publ~c fac~llt~es, or any nat~onal corporation ~n wh~ch the
publ~c sec~or of Burma has a f~nanc~al ~nterest or operat~onal
responslblllt~es.
C "Personal SerVlces" shall mean the performance of any
work and shall also lnclude the making of dlrect loans,
lnves~ment counsellng, underwrltlng, providing brokerage
serVl.ces, or actlng as a trustee or escrow agent.
~ "Comrrodltiesll shall include, but not be limlted to any
supplles, gcods, vehlcles, machlnery, or equ~pment.
SEC~ION 2. ~he Cl.ty of Santa Monica shall not enter lnto
t
any contractual agreement for the prov2sion of personal serV1ces
with any person, 1ncluding parent, subs1diary, or franch1see, who
is provid1ng personal serV1ces to the military government of
Burma.
SECTIOK 3. Any person contract1ng w1th the City for the
prov1s1on of personal serVlces shall be requ1red as a mater1al
cond1tlon of any such contract to st1pulate that said person does
not and w1ll not provide personal serVlces to the m1litary
government of Burma unless and untll the people of Burma become
self-goveru1ng The provislons of this sectlon shall apply to
renewals 0: eXlstlng contracts as well as to new contracts.
SECTION 4.
The C1ty of Santa Mon1ca shall not purchase any
commodlty that lS manufactured or produced 1n Burma, or produced
ane rranufactured by any person who buys, sells, leases, or
dlstr1b~tes commodltles in the conduct of business wlth the
mi:l~ary government of Burma untll the people of Burma have
becoTe sel:-govern~ng ln the determinat10n of the Clty Councll.
SECTION 5. Any person contracting wlth the City for the
purpose of provldlng a commodlty to the Clty shall be requ~red as
a mater1al cond1tlon of any such contract to stipulate that the
commod1ty offered for sale 18 nelther manufactured nor produced
ln B~rma, and that the person, lncluding lts parent, franchlsees,
and Subsldlarlesr does not conduct bUSlness w1th the mllltary
government of Burma.
j
SECTION 6. When sollcltlng blds and proposals for personal
services or commodlties, the City of Santa Mon1ca may require
from each bldder or proposer elther an aff1davit dlsclosing or
documents eV1denclng the extent of the person's contracts w1th
the mllitary government of Burma.
SECTION 7. Upon a flndlng by the Clty of Santa Mon1ca that
a person has knowingly vlolated the contract stlpulations
descrlbed ln Sectlons 3 and 5 above, the City shall cancel such
contract. The remedy establlshed by this sectlon 18 not
exclusive and shall not supplant any other remedles establlshed
by law or contract.
SECTION 8. The prohibit1ons of this resolutlon shall not
apply under the follow1ng cond1tlons:
(a) The person offer1ng ~he service or commodlty 18
operat1ng ln Burma for the purpose of news reportlng or
publlshlnq.
(b) The City Manager determlnes that the special
characterlst1c8 of the part1cular serV1ce or commodity offered by
the person are necessary for the efflcient operation of the C1ty
or t~e health, safety, or welfare of the publlC and no comparable
product 18 avallable, or the comparable product is not avallable
wlthout substantlal flnanclal loss to the C1ty. The C1ty Manager
shall notlfy the Clty Councll of any and all approved exceptlons
to the POllCY
~
Sectlon 9. The Clty Clerk shall certify to the adoption of
this resolutlon, and thenceforth and thereafter, the same shall
be In full force and effect.
APPROVED AS TO FORM
~
V~SHA JO MOUTRIE
Clty Atto:::-ney
Adopted and approved thIS 28th of November, 1995
!qJ~
Mayor
I hereby certIfy that the foregomg Resolutlon 8966 (CCS) was duly adopted at a meetmg
of the Clty Councll held on the 28th of November, 1995 by the followmg vote
Ayes
CouncIl members
Abdo. Ebner. GenseL Holbrook. O'Connor, Rosenstem
Noe~
CouncIl members
None
Abstam
CouncIl members
None
Absent
CouncIl members
Greenberg
ATTEST
~~ ~"^t-
CIty Clerk