Foreign Firms Face Scrutiny as UN Looks to Isolate Myanmar Generals
By Joshua Carroll May 16, 2019
Multinational companies doing business with Myanmar's military have so far shrugged off calls from activists to cut ties despite ongoing efforts to have the country's top generals prosecuted for genocide.
Even big brand names such as Western Union that stand to suffer reputational damage in the wake of outrage over mass killings in Rakhine state in 2017 have stuck with their military-owned business partners.
But now U.N. investigators are upping the pressure, calling for the country's military to be totally isolated and promising to probe its sources of funding while nudging states to impose further sanctions.
'At a total standstill'
Marzuki Darusman, chairperson of the U.N. fact-finding mission that is investigating the 2017 violence, said isolating the military was necessary because Myanmar's leadership has done little to address widespread rights abuses around the country.
"The situation is at a total standstill," he said at the end of a 10-day visit that included a trip to Bangladesh, where hundreds of thousands of Rohingya are sheltering after fleeing killings and persecution in Myanmar.
The fact-finding mission is now seeking more information on the military's business ventures in the hopes of helping countries to hit the generals in their pockets.
"We will be reporting later in the year on the military's principal vehicles for funding both itself and its leadership," Chris Sidoti, a human rights lawyer and member of the mission, told VOA.
"We anticipate that that report will assist states to impose wider, carefully targeted sanctions against both," Sidoti added.
Corporate backbone of military
Late last year the Burma Campaign UK pressure group published a list of 49 foreign companies it said were doing business with the military or implicated in rights abuses in Myanmar.
The military is believed to draw large amounts of off-the-books funding from two local conglomerates: the Myanmar Economic Corporation (MEC) and Union of Myanmar Economic Holdings (UMEH).
Kyaw Win, executive director of the U.K.-based Burma Human Rights Network, said these companies "are the two main backbones for the military."
"These two entities are the main reason that the military is standing today," he told VOA.
Western Union uses a local bank that is a subsidiary of UMEH as an agent for its remittance services in Myanmar.
After President Barack Obama lifted U.S. sanctions against Myanmar in 2016, it seemed the chance for public pushback on such deals was low. But since the 2017 killings, Western Union has been accused by Burma Campaign UK of "funding genocide."
The company did not respond to a request for comment, but it has previously said its agents undergo "rigorous due diligence" and that it is "fully compliant" with "applicable sanctions and regulatory requirements."
While the outcry over the 2017 killings has given some investors pause, others have gone ahead with large deals. The Adani Group, an Indian conglomerate, recently signed a $290 million deal to develop a container port with MEC.
The company did not respond to a request for comment but a spokesperson told the Guardian the deal did not violate any sanctions and was not unethical, nor a threat to human rights.
Sidoti says that while companies supporting the military financially aren't yet in breach of any sanctions, they still have responsibilities under the Guiding Principles on Business and Human Rights and other international codes.
Other ways to isolate military
Besides sanctions, other tactics to isolate the military such as consumer boycotts, shareholder pressure and even legal challenges should be on the table, he said.
But unlike some activists, the fact-finding mission does not support general sanctions.
"The experience with comprehensive sanctions in the 1990s and early 2000s was that they hurt the people of Myanmar without affecting the military leadership," Sidoti said.
China and Russia
One obstacle to isolating the generals could be key allies such as China and Russia, who have made their support for the military clear since the 2017 violence.
But Sidoti believes it is not a given that such support will continue.
"We do not dismiss the possibility of China joining international action against the Myanmar military," he said.
"Our job, in any event, is not to second guess the responses of particular states but to reach the conclusions that the evidence justifies."
For both Sidoti and activists like Kyaw Win, financial isolation is just one part of a broader strategy; the ultimate goal is to hold perpetrators of violence accountable.
"We must never allow these generals to become a role model for other dictators," said Kyaw Win. "In the meantime we must focus on their economic interests."
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