Tue Oct 2, 4:27 AM ET

BANGKOK - Chinese, Indian and other firms operating in Myanmar, which has mounted a violent crackdown on protests, must ensure they do not contribute to or benefit from rights abuses, a watchdog said Tuesday.

The repression of pro-democracy rallies has swung the spotlight on companies doing business with the military regime, and Amnesty International has urged the UN Security Council to impose an immediate arms embargo.

New York-based Human Rights Watch (HRW) called on companies involved in Myanmar, formerly known as Burma, to use their influence on the military regime to end abuses.

"Companies doing business in Burma argue their presence is constructive and will benefit the Burmese people, but they have yet to condemn the government's abuses against its own citizens," said spokesman Arvind Ganesan.

"Keeping quiet while monks and other peaceful protesters are murdered and jailed is not evidence of constructive engagement," he said.

HRW said companies should urge the military regime to halt a bloody crackdown on mass protests that erupted in mid-August, release all political prisoners, and open a real dialogue with opposition and ethnic groups.

It said the campaign of repression launched last week "has led to many deaths, enforced disappearances and mass arbitrary arrests."

"If the situation does not improve, companies should be prepared to reconsider their operations in the country," it said.

London-based Amnesty said Monday that China has been the main source of arms for the Myanmar security forces, followed by India, Serbia, Russia, Ukraine and other countries, and called on them in particular to stop weapons supplies.

"The UN arms embargo should cover the direct and indirect supply of military and security equipment, munitions and expertise, including transfers claimed to be 'non-lethal,'" it said, urging the UN Security Council "to impose a comprehensive mandatory arms embargo on Myanmar."

Despite international condemnation of the regime's brutal tactics during its 45 years in power, multinational firms are vying for the country's rich natural resources, throwing an economic lifeline to the ruling generals.

HRW said there is no transparency about how much the government receives in oil and gas payments, or about how the funds are spent, although it was clear the military receives the lion's share while health and education gets a pittance.

US energy giant Chevron, France's Total, China National Petroleum Corporation and Thai exploration firm PTTEP are among companies giving much-needed income to Myanmar, defying activists' calls to pull out.

Japan's Nippon Oil Corp., South Korean's Daewoo International, Malaysia's state-run energy firm Petronas, as well as two Indian power giants, Gail India and Oil and Natural Gas Corp., are also jockeying for billion-dollar contracts.

HRW said the Myanmar regime has greatly expanded investment in the oil and natural gas industry in recent years, apparently to compensate for economic mismanagement and military spending, which have drained treasury coffers.

Sales of natural gas now account for the single largest source of revenue to Myanmar's government, with gas responsible for half of the country's exports in 2006, it said.

The UN's independent human rights expert, Paulo Sergio Pinheiro, has called on the UN Human Rights Council to act to seek access to Myanmar, rather than just striking rhetorical poses.

The 47-member Council is holding a special session in Geneva on Tuesday to discuss the human rights situation in Myanmar.