Human rights advocacy organisation Amnesty International published Military Ltd: The Company Financing Human Rights Abuses in Myanmar, which finds that Myanmar-based conglomerate Myanma Economic Holdings Public Company Ltd (MEHL) is funding the Myanmar military (known as the Tatmadaw) and therefore the military’s human rights atrocities.
While previously, it was unclear who exactly MEHL’s shareholders where, and therefore whether companies doing business with the MEHL were financing atrocities, new evidence received by Amnesty (and in particular MEHL’s disclosure to the Myanmar government and MEHL’s 2010-2011 shareholder report) establish that the financing obtained through MEHL provides the military with “substantial revenue on top of their official budget” which then enables them to operate “independently of civilian oversight and accountability.” Therefore, any company doing business in Myanmar that is providing revenue to MEHL is providing financial support to the military’s human rights atrocities.
Amnesty International’s reporting builds on the 2019 report by the UN Independent International Fact-Finding Mission on Myanmar, which “concluded that revenue from MEHL ‘provides financial support for the Tatmadaw’s operations with their wide array of international human rights and humanitarian law violations’, and called on MEHL’s business partners to cut ties with the conglomerate.”
(For a recap of the atrocities that have been committed in Rakhine State by the military against the country’s Rohingya Muslim minority, you can take a look at this investigation I worked on with the Public International Law & Policy Group which is based on extensive interviews in refugee camps and settlement areas in Eastern Bangladesh. For an analysis of what this means for companies, you can take a look at this piece I wrote last year with Daniel Fullerton: Genocide, Business, and Human Rights: The complexity of Myanmar and what investors and companies need to do about it. There are also a number of other atrocities that have been committed in Myanmar recently, including in Kachin and northern Shan States.)
Major findings from the report
- “MEHL’s shareholders include military units and high-ranking military officers directly implicated in crimes under international law and other serious human rights violations in Rakhine, Kachin and northern Shan States since 2016.”
- MEHL’s “many business partners – both local and foreign – are linked to crimes under international law and other serious human rights violations by virtue of their business relationship with the conglomerate. MEHL works in collaboration with these business partners in establishing joint ventures or profit-sharing agreements in Myanmar; when profitable, dividends are shared with MEHL as shareholder. MEHL then disburses dividends to its own shareholders.”
- “MEHL has paid and continues to pay dividends to military combat units, including those within Western Command that have committed crimes under international law and other serious human rights violations in recent years. Dividend payments come directly from the profits that MEHL makes through its many businesses, including those that it operates through joint ventures and profit-sharing agreements with local and foreign partners.” Amnesty also notes that, “considering [the dividend payments’ size and regularity, it is reasonable to assume that they help finance the military’s operational costs.”
- Amnesty identified eight companies, which it determines to be MEHL’s most significant business partners:
- Property and real estate conglomerate Inno Group (South Korea)
- Beverage company Kirin Holdings (Japan)
- Steel manufacturing company POSCO (South Korea)
- Copper mining company Wanbao Mining (China)
- Garment manufacturer Pan-Pacific (South Korea)
- Tobacco company RMH Singapore
- Port development company Ever Flow River Project (Myanmar)
- Conglomerate Kanbawza Group (Myanmar), which partners with MEHL in jade and ruby mining among others
Key themes on business’s responsibility to respect human rights
Amnesty engaged with the above companies and finds the following:
- Failure to conduct due diligence: “In this case, any due diligence procedures – conducted before the start of, and throughout, their business relationships – should have necessarily included a close review of MEHL’s shareholders. This is particularly relevant given the amount of existing public information on the ties between MEHL and the Myanmar military, and the military’s well-known involvement in human rights violations in various parts of the country. Of the six companies that replied to Amnesty International, only Kirin and Pan-Pacific made any reference to having conducted due diligence procedures, although the extent and nature of these was not provided in detail.”
- Failure to exercise leverage: “[O]nly three companies attempted to assert their leverage over MEHL. In all cases, this was to get information from MEHL, but the companies reported that these efforts were largely unsuccessful.”
- Failure to end relationship with MEHL: Amnesty notes that since “MEHL has demonstrated an unwillingness or inability to engage with its business partners on this issue”, it leave companies “with little choice” but to disengage. Pan-Pacific and Kanbawza both indicated they will terminate the relationship with MEHL; Kirin responded that it “has started to explore alternative structural options for the ownership of its Myanmar joint ventures”; POSCO responded that “it would consider revisiting its business relationship with MEHL in the event that ‘violations and suspected illegalities’ linked to any use by MEHL of future dividend payments are considered ‘serious’”; the other companies either did not respond to Amnesty’s outreach or did not indicate whether they would terminate their relationship with MEHL.
Recommendations
Amnesty International concludes that the “Myanmar government must … intervene to break the link between the armed forces and the economy. Part of this must be a thorough reform of the ownership and management of MEHL, concluding with the dismantling or sale of its constituent parts to the state under parliamentary oversight or to civilians unrelated to the military.” In the meantime, since MEHL is unwilling to reform its structure, business partners are left with the following recommendations:
- “End their relationship with MEHL, its subsidiaries and joint ventures, taking steps to ensure that this disengagement is done responsibly, in accordance with the UN Guiding Principles. Publicly and transparently provide information about the steps taken in relation to this recommendation.”
- “When considering options to disengage from MEHL, carefully and thoroughly assess the potential human rights, social and economic adverse impacts. This must include awareness of the heightened risks to workers’ rights resulting from the COVID-19 pandemic. Measures must be put in place to prevent any disengagement from strengthening the Myanmar military, including through the transfer of assets or funds to the military.”
- “Conduct heightened due diligence to ensure they do not enter into a business relationship with any other Myanmar military entity, in line with the UN Guiding Principles.”
Amnesty also calls on the home countries of these companies to hold business accountable for their links to human rights abuses, support the Myanmar government to “remove the military from the country’s economic life; place the military under civilian control; and dismantle military owned or controlled businesses, including MEHL”, and “investigate and prosecute any abuses of international human rights and humanitarian law in Myanmar by companies domiciled in their territory.”
“The perpetrators of some of the worst human rights violations in Myanmar’s recent history are among those who benefit from MEHL’s business activities – for example, military chief Min Aung Hlaing owned 5,000 shares in MEHL in 2011. In the face of this incontrovertible evidence, businesses who currently partner with MEHL must end these relationships responsibly.”
Mark Dummett, Head of Business, Security and Human Rights, Amnesty International, Myanmar: Leaked documents reveal global business ties to military crimes (10 September 2020)
“In providing this funding to military units, MEHL is boosting their resources and financing their operations which include crimes against humanity and war crimes. Any company doing business with MEHL risks contributing to these violations and must take urgent steps to cut ties.”
Yadanar Maung, Spokesperson, Justice For Myanmar, Myanmar: Leaked documents reveal global business ties to military crimes (10 September 2020)
