Japanese beer conglomerate Kirin says an investigation by Deloitte was unable to determine if the company has been funding the Myanmar military through its joint ownership of domestic beer companies. Critics say Kirin has been complicit in human rights abuses by partnering with a Myanmar military-owned company.
Japanese beer corporation Kirin has said that an assessment of its ties with the Myanmar military was “inconclusive” as to the company’s role in human rights abuses and military operations.
Kirin has faced major criticisms over its joint ownership of Myanmar alcohol companies with the military-owned Myanmar Economic Holdings Ltd. (MEHL). Since 2015, Kirin has held 51% ownership of both Mandalay Brewery Ltd and Myanmar Brewery Ltd, with the remainder held by MEHL.
Rights groups say that by partnering with MEHL, Kirin is complicit in the military’s human rights abuses, including the genocide against the Rohingya. As of November 2020, Kirin has suspended payments from its Myanmar ventures to MEHL.
In a statement on January 7, Kirin said that an investigation commissioned by the company and carried out by Deloitte was “unable to access sufficient information” to determine whether profits from its partnerships with MEHL were going to the military.
The Myanmar Centre for Responsible Business reported, following conversations with MEHL management directors, that Myanmar Brewery generates the majority of the military firm’s profits. Myanmar Brewery controls almost 80% of the domestic beer market, according to Kirin.
Burma Campaign UK and other rights groups have expressed disappointment in Kirin’s announcement.
“Kirin are making themselves look ridiculous trying to claim they can’t find out if the Burmese military uses its money for military purposes,” said Burma Campaign UK Director Mark Farmaner.
Kirin said it will issue an update on its plans regarding Myanmar Brewery and Mandalay Brewery by the end of April. The Japanese conglomerate is the ninth-largest beer company in the world, according to market research firm Technavio.
Kirin partner firm has clear role in rights abuses via Myanmar military
The Myanmar military has committed human rights abuses for decades, the most infamous case in recent years being its genocide against the Rohingya following attacks by Rohingya militants in August 2017. The military crackdown that pushed 750,000 Rohingya Muslims into refugee camps in Bangladesh has led to a prominent ongoing legal case at the International Court of Justice.
In September 2019, the UN Independent International Fact-Finding Mission on Myanmar found that any connections with MEHL or fellow military-owned firm Myanmar Economic Corporation carried “a high risk of contributing to or being linked to, violations of human rights law and international humanitarian law.”
MEHL’s shareholders include Myanmar military units, including those operating in Rakhine State and other conflict zones where the military has committed human rights abuses, according to Amnesty International. The rest of MEHL’s shares are largely held by retired members of the military. MEHL’s board is overseen by a “patrons group”, with Myanmar military commander chief Senior General Min Aung Hlaing as chair.
Dividend payments from MEHL constitute a significant source of funds for the Myanmar military; according to a shareholders report from 2011, nearly 90% of annual dividend payments from 1990 to 2011 went to military units—a contribution of around US$16 billion.
Separate from MEHL’s partnership with the Japanese beer giant, the UN mission’s 2019 report also noted that Kirin made direct financial contributions to the Myanmar military in 2017 totaling US$12,786.
Kirin opposed to funding Myanmar military but won’t cut ties
Though Kirin has been publicly opposed to the prospect of funding the Myanmar military, the firm has refused to sever its partnership with MEHL.
In response to criticism from international human rights groups, Kirin wrote in a letter in June 2020 that “It is wholly unacceptable to Kirin that any proceeds from the joint-venture with the MEHL could be used for military purposes.”
Last June, Kirin announced that Deloitte would carry out an investigation into MEHL to determine where the profits from its joint ventures in the country were going.
In its statement last week, Kirin said that it will continue its suspension of payments from its Myanmar business ventures to MEHL as well as Kirin Holdings. Kirin announced the self-imposed restrictions in November due to a “lack of visibility regarding the future business environment for our Myanmar joint-ventures, including the remaining issue of the destination of proceeds.”
According to Nikkei Asia, Kirin’s businesses in Myanmar will soon constitute around 10% of the conglomerate’s overseas sales, following major investments from 2015-21.