Two years after the peaceful Saffron Revolution was brutally crushed by the military regime, it is time for Australian businesses operating in Burma to take a hard look at themselves.
They are helping to prop up a military dictatorship that has one of the worst human and labour rights records in the world.
Undaunted by international revulsion at the crackdown on its own people two years ago, Burma’s half a million-strong army continues to use its repressive powers to quash everyday activities that you and I take for granted. Only last week, monks and students issued a statement calling for international help and to stop the state sanctioned use of violence against ethnic minorities.
Burma is an international pariah state ruled by a military regime that tolerates no dissent, represses its people and wields absolute power in the face of international condemnation and sanctions.
The country is notorious for its massive and systematic violations of human and workers’ rights. There are numerous reports of widespread use of forced and compulsory labour, including for building infrastructure projects linked to foreign investments.
Sometimes the world can have a short attention span when it comes to longstanding human rights abuses and this tendency to turn a blind eye is evident among powerful business interests.
But make no mistake: companies that do business in Burma are helping to fund the military dictatorship’s long-term financial viability and its systematic human rights violations.
The Saffron Revolution drew international outrage and calls for sanctions, but for some businesses, the resource-rich country with its vast reserves of natural gas, teak, gems and metals is still seen as a lucrative investment option.
Oil and gas brings the military dictatorship income in billions each year.
Human rights advocate Burma Campaign Australia has calculated that the Burmese government could earn $US2.5 billion through royalties, income tax and an equity stake in a joint venture project with one Australian company alone, Twinza Oil.
That is enough to fund a quarter of the world’s 12th largest military for a decade.
Twinza Oil, which is owned by Western Australia’s wealthy Clough family, signed a Production Sharing and Exploration Contract with the military-owned Myanmar Oil and Gas Enterprise (MOGE) in November 2006.
Other Australian companies with business interests in Burma include Andaman Teak Supplies Pty Ltd, Chevron, Gecko’s Adventure, Jetstar Asia, Lonely Planet, Millers, and Sri Asia Tourism.
This week Australian unions and churches will write to each of these companies
urging them to wake up to the ongoing atrocities in Burma and withdraw all business interests.
Some well-known Australian companies have already recognised that dealing with Burma is not best business practice, and have voluntarily withdrawn from investing in or sourcing from the country. They include QBE Insurance, Woolworths, and Downer EDI.
Apart from the moral reasons, there are also financial, reputational and investor risks for any company operating in Burma.
Key sectors of Burma’s economy are controlled either directly or indirectly by the military regime and people connected to the regime. Corruption and economic mismanagement are widespread and the country is at the center of the illicit drug trade, and is the world’s second largest opium producer.
There is potential financial risk arising from litigation or sanction-busting. Foreign companies are not able to ensure that financial transactions are carried out in a transparent and accountable manner, such as required by international accounting standards.
Financial and investment risks are compounded by a lack of the rule of law in Burma. There could be heightened risk of expropriation without compensation as a result of a deficient and unpredictable investment regulatory framework, irregular law enforcement and endemic corruption. The assets of any company doing business in Burma could be seized or the company could be forced by the military regime to leave the country.
The US Office of Foreign Assets Control (OFAC) closely monitors financial transactions with a list of countries, including Burma. For instance, OFAC recently fined ANZ Bank $US5.75 million for money transfers and finance transactions with Sudan.
Those Australian companies doing business in Burma, and their stakeholders, need to face up to their part in Burma’s plight. Unconditional investment in Burma reduces any incentive for the regime to implement urgently needed reforms. It is the military junta – not the 90% of the population subsisting on less than US65 cents a day – who benefit from these business dealings.
The US, Canada and the EU have longstanding and broad trade and investment sanctions against Burma, but Australia maintains only targeted financial sanctions against members of the regime.
Can the companies that stay expect their reputations to remain untarnished, and their business unaffected, when they support an internationally reviled military regime by bringing much needed currency and expertise?
A version of this article is also available at New Matilda.