TO: Mayor and Town Council
FROM: Ralph D. Karpinos, Town Attorney
SUBJECT: Policy Regarding Service Contracts with Businesses Who Do Business with Burma (Myanmar)
DATE: June 26, 2000
The attached resolution would rescind the Town’s policy barring service contracts with businesses doing business with Burma (Myanmar).
In January 1997, in response to a citizen petition, the Town Council adopted Resolution 97-1-13/R-16, barring contracts for services with businesses doing business with Burma (Myanmar). A copy of the previous report and resolution adopted by the Council are attached.
In November 1998, the Town received a letter from the National Foreign Trade Council informing us of a decision by a United States District Court determining that a policy adopted by the State of Massachusetts similar to the Town’s policy violated federal law. The Council discussed this in closed session on January 20, 1999, and again on February 8, 1999 in open session. On February 8, 1999, the Council voted to retain the current policy. Copies of the February 8, 1999, report and minutes of the Council’s discussions are attached.
The decision of the Federal District Court in the Massachusetts case was appealed to the United States Court of Appeals for the First Circuit and from there to the Supreme Court of the United States. As reported to the Council last week, on June 19, 2000, the Supreme Court issued its decision in the case. A copy of the decision is attached.
The Court’s decision to reject the Massachusetts law is based on the legal principle that the statute passed by Congress imposing a set of mandatory and conditional sanctions on Burma has preempted state law. The Court found that the Massachusetts law “undermines the intended purpose and ‘natural effect’ of at least three provisions of the federal Act”. The Court elaborated that “it is simply implausible that Congress would have gone to such lengths to empower the President if it had been willing to compromise his effectiveness by deference to every provision of state statue or local ordinance that might, if enforced, blunt the consequences of discretionary Presidential action.” (emphasis added).
The Court concluded: “Because the state Act’s provisions conflict with Congress’s specific delegation to the President of flexible discretion, with limitations of sanctions to a limited scope of actions and actors, and with direction to develop a comprehensive, multilateral strategy under the federal Act, it is preempted, and its application is unconstitutional, under the Supremacy Clause.”
The ruling of the Supreme Court was unanimous. Two Justices concurred in the judgment, but did not sign the opinion of the Court.
Based on these developments in the litigation involving the Massachusetts law, the Council could consider:
a. taking no action with respect to the Town’s policy.
b. affirming the previously adopted policy.
c. adopting a resolution affirming its policy position regarding the government of Burma (Myanmar), rescinding the specific limits established by the Council and endorsing sanctions being imposed by the Federal Government.
Recommendation: That the Council adopt the attached resolution rescinding the Town’s policy on contracting with businesses doing business with Burma (Myanmar), reaffirming its policy position regarding the government of Burma (Myanmar) and registering its support for sanctions being imposed against Burma by the Federal Government.
1. Copy of decision of the U.S. Supreme Court (p. 4)
2. February 8, 1999 agenda item and excerpt from Council minutes (p. 28)
3. January 13, 1997 agenda item (p. 38)
4. January 20, 1999 closed session minutes (p. 42)
A RESOLUTION RESCINDING THE TOWN POLICY ON CONTRACTING FOR SERVICES WITH BUSINESSES DOING BUSINESS WITH BURMA (MYANMAR) (2000-06-26/R-15)
WHEREAS, the Chapel Hill Town Council, in January, 1997, adopted a policy barring service contracts with businesses doing business with Burma (Myanmar); and
WHEREAS, the Supreme Court of the United States has determined that such state and local policies have been preempted by action of the Congress of the United States to establish sanctions against the government of Burma (Myanmar);
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill as follows:
1. That the policy of prohibiting Town contracts for services established by Resolution 97-1-13/R-16 is hereby rescinded.
2. That the Council’s position with respect to the government of Burma (Myanmar) as stated in the Whereas clauses of Resolution 97-1-13/R-16 is hereby reaffirmed.
3. That the Council expresses its support for sanctions being imposed by the United States Government which are intended to force measurable and substantial progress in improving human rights practices and implementing democratic government in Burma (Myanmar).
This the 26th day of June, 2000.