Foreign firms in Myanmar face intense scrutiny as advocates turn to private sector

Photo: Kantabon, CC BY-SA 4.0, via Wikimedia Commons

One month after Myanmar’s coup, the international community is still struggling to form a cohesive response. But foreign companies working in the country are seeing mounting criticism and questions as activists work to leverage investors’ influence over Myanmar’s economy and military revenues.

Editorial

In the month since Myanmar’s military seized power, the international community has largely failed to find an effective response to the coup. In late February, the military ramped up violence against protestors. Police and soldiers began firing live ammunition in cities across the country and have already killed dozens of peaceful protestors as of March 3. More than 1,200 people have been arrested.

As the junta escalates its violent response to protests across the country, foreign governments have yet to offer much of value to those organizing resistance within Myanmar.

The private sector, by comparison, has become a key avenue for exerting pressure on the military as activists push foreign companies to cut ties to the regime and leverage their influence. These efforts have moved quickly and already seen concrete, if limited, results. This strategy is also one of the few that shows any promise of possibly influencing the junta.

Foreign firms are being scrutinized for direct ties to a long list of military-owned companies, especially Myanmar Economic Holdings Ltd (MEHL) and Myanmar Economic Corporation (MEC), as well as for any business ventures that may provide any revenue for the regime.

“During the [National League for Democracy] period, the military’s businesses empowered them and enabled their campaign of genocide, war crimes and crimes against humanity,” said advocacy group Justice for Myanmar, referring to the ruling party of the ousted civilian government. “The military is able to use funds from business to support military units, including those committing atrocity crimes, and it meant they were not reliant on the defense budget allocation from parliament.”

The anti-coup movement within Myanmar has spread campaigns to boycott goods produced by military firms and to get shops to refuse service to soldiers and police. Organizers of repeated general strikes within the country are also asking allies in Hong Kong, Thailand, Indonesia and elsewhere to march in solidarity. Within ASEAN, Singapore has become a key target of private sector advocacy as the city-state is Myanmar’s largest source of foreign investment.

Photo: MgHla (aka) Htin Linn Aye, CC BY-SA 4.0, via Wikimedia Commons

Multilateralism flounders, scrutiny of Myanmar business ties ramps up

While the US, UK and European Union have moved to sanction Myanmar’s military, they have struggled to find support within Asia for a cohesive front against the junta and don’t appear to have a long-term strategy. As for ASEAN, Indonesia, Malaysia, the Philippines and Singapore have spoken out against the coup but the regional bloc is as plagued as ever by its policy of non-interference. 

While these geopolitical scripts continue to play out, much of the advocacy is turning towards Myanmar’s foreign investors. Foreign firms in Myanmar are now seeing intense scrutiny of their dealings in the country and calls to cut any ties that support the regime.

Firms in Myanmar’s oil, gas and mining industries, major sources of state revenue, are under intense pressure to stop all payments to the junta. A number of foreign corporations, including Total and Chevron, have long partnered with Myanma Oil & Gas Enterprise (MOGE), a state-run firm.

Garment workers in the country are calling for international fashion brands including Inditex, Mango, H&M and others to support workers participating in civil disobedience and help protect their right to freedom of association. Some foreign brands, including the American Apparel & Footwear Association, have already responded, condemning the coup and expressing support for workers’ rights.

Japanese beverage giant Kirin has said it will end its partnership with military-owned Myanmar Economic Holdings Ltd. (MEHL) in Mandalay Brewery and Myanmar Brewery but will continue to sell beer in the country. Many advocates say the decision doesn’t go far enough and that Kirin must pull out of Myanmar entirely. 

The central bank of Norway, which manages the largest sovereign wealth fund in the world, said in early March that it had placed Kirin on its watch list for possible divestment over its links to the Myanmar military.

Kirin has long faced criticism for its partnership with MEHL and in mid-2020, the company commissioned Deloitte to investigate whether its Myanmar ventures were funding the military. In January, just weeks before the coup, Kirin had announced that it still wasn’t sure if it was complicit in the Myanmar military’s abuses.

Singaporean Minister for Foreign Affairs Vivian Balakrishnan. Photo: Hong Phuc FOSSASIA, CC BY 2.0, via Wikimedia Commons

Singapore singled out for investments in Myanmar

Among ASEAN states, Singapore is now one of the more vocal critics of Myanmar’s coup and was quick to call for an end to violent attacks against protestors.

“We are appalled by the use of lethal force against civilians,” said Singaporean Minister for Foreign Affairs Vivian Balakrishnan. He called for dialogue and a return to “the path of democratic transition”.

“We have not recognized the military leaders as the government of Myanmar,” Balakrishnan added, expressing frustration at ASEAN’s “paralysis” on the issue.

But as Myanmar’s largest foreign investor, Singapore’s private sector is seeing intense criticism of business ventures in the country. Companies from the city-state invested over US$24 billion in Myanmar in 2019 across the banking, real estate, shipping, weapons, construction and sand industries.

“Compared to other governments in the region, Singapore has the most influence over Myanmar’s army generals thanks to its history of building good relations,” said Ian Chong, associate professor of political science at National University of Singapore, in an interview with VICE.

Pressure on real estate developer Emerging Towns and Cities (ETC) for working directly with the Myanmar military has already produced results. The Singapore Exchange has launched an official query into ETC’s Golden City, a residential and commercial project on land reportedly leased from the military. ETC said it would comply and moved to suspend trading of its shares.

Singaporean firm TRD came under fire after a photo spread on Twitter of Myanmar police using an “anti-drone gun” supplied by the company. The company says it has stopped doing business in Myanmar.

Digital payments company Coda said it had removed military-affiliated telecom firm Mytel from its portfolio, meaning Mytel customers could no longer access Coda’s services.

“Singapore’s leaders need to take a good, hard look at the situation in Myanmar and decide if short-term gains from despots are worth the long-term damage their country will face if it’s seen to be complying with dictators and military regimes,” said Mark Farmaner, director of the advocacy NGO Burma Campaign UK.

As advocates look for new ways to pressure Myanmar’s junta, foreign companies will continue to feel the strain and public opinion may deter new foreign investments going forward. Toyota has reportedly delayed opening a new plant in the country, likely due to the bad optics of business-as-usual amid the military’s violent crackdown. 

While some observers are calling for companies to pull out of Myanmar entirely, regardless of military ties, activists in the country are pushing a more targeted approach, in the hope of cutting off the military’s revenue without hurting the population as a whole.

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