Case Description: A Disputed Contract – IHC Caland in Burma

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.