NOT FOR USE — The overwhelming control of Myanmar’s economy by the military through some of its biggest companies means its foreign and domestic business partners are likely supporting military units and leaders suspected of human rights abuses, critics say.
A report by Amnesty International released Thursday details some of those links with Myanma Economic Holdings PLC a huge conglomerate that was set up by the military in 1990.
The human rights group is urging the government and companies that partner with the company, known as MEHL, to cut ties that may be helping to finance such activities, including atrocities against Myanmar’s Muslim Rohingya minority.
MEHL’s foreign business partners include South Korean companies steel maker Posco International, trading company Pan-Pacific and the Inno Group; RMH Singapore Pte, formerly owned by British American Tobacco; China’s Wanbao Mining, which jointly operates copper mines in Myanmar, and beverage manufacturer Kirin of Japan.
Some of MEHL’s domestic and foreign partners, including Kirin, have said they are investigating the concerns raised by the report. Others have not.
The Amnesty report, compiled in collaboration with the human rights group Justice for Myanmar, outlines links between key military units and leaders involved in what Myanmar’s military has called a clearance campaign in the northwestern Rakhine. It was home to more than 700,000 Rohingya who have fled Myanmar to neighboring Bangladesh and other countries since August 2017.
U.N. investigations have found the army in the Buddhist-majority country have directed massacres and other crimes against the Rohingya. The government has denied accusations that security forces committed mass rapes and killings and burned thousands of homes.
Myanmar’s government is still dominated by the military, who hold key positions despite the country’s transition to quasi-civilian rule beginning in 2011.
Amnesty’s report centers on documents showing the shareholding structure of and dividend payments by MEHL to its many military stakeholders and board members, some of whom have been sanctioned by the U.S., Canada and the EU.
One, a document filed by MEHL with Myanmar’s Directorate of Investment and Company Administration (DICA) in January 2020, shows the company is owned by both 381,636 individual shareholders, including both active and retired military personnel, and 1,803 “institutional” shareholders that include “regional commands, divisions, battalions, troops, war veteran associations,” the report says.
Those institutional shareholders own about a third of MEHL’s shares.
Another of the documents presented in the report shows top military leaders holding key executive posts in MEHL. Currently, the company’s website shows Lt. Gen. Hsan Ou as its chairman and Major Gen. Khin Maung Than, who also heads the directorate for military procurement, as its managing director. The people holding most of the other top posts are not identified by their current or former ranks, but some are retired top military brass.
One, Khin Maung Soe, was among four Myanmar military and Border Guard Police commanders and two military the U.S. Treasury Department sanctioned for “their involvement in ethnic cleansing in Burma’s Rakhine State and other widespread human rights abuses in Burma’s Kachin and Shan States.”
One of the company’s top shareholders is Senior Gen. Min Aung Hlaing, commander-in-chief of the defense services, who also has been sanctioned by the U.S. and other governments.
MEHL’s reach is vast. The company was set up to support active and retired military personnel. It has interests in ruby, jade and copper mines, rubber, pineapple, palm oil and sugar plantations, and various manufacturing and services industries. Both it and Myanma Economic Cooperation, another big military-linked company, act as “unofficial gatekeepers,” for business dealings in Myanmar, the report says.
It says that several of the companies it asked about their links to MEHL maintained that they were not complicit in the military’s activities because their business ventures were not generating any profits.
Human right advocates, including Amnesty, have contended that MEHL’s contributions toward pensions, medical and other military costs help defray its expenses, enabling its other activities.
“This is not a case of MEHL unwittingly financing human rights violations -– its entire board is composed of high-level military figures,” Mark Dummett, head of Business, Security and Human Rights at Amnesty International, said in a statement.
A report issued last year by a special U.N.-authorized investigation of alleged human rights abuses by Myanmar’s security forces also warned that the business-generated wealth of the military — called the Tatmadaw — contributed to its acting with impunity.
“The revenue that these military businesses generate strengthens the Tatmadaw’s autonomy from elected civilian oversight and provides financial support for the Tatmadaw’s operations with their wide array of international human rights and humanitarian law abuses,” Marzuki Darusman, the Indonesian human rights lawyer who chairs the fact-finding mission, said at the report’s release in August 2019.
Asked about their links to MEHL, one of its domestic partners, Ever Flow River Group, contended that it was not involved with and had not contributed to human rights violations, since the companies’ joint port project in the capital, Yangon, is not yet operating and won’t be profitable for at least 10 years.
Another, the conglomerate Kanbawza Group, said it was working to end its relationship with MEHL.
Pan-Pacific South Korea, which runs garment factories that it says supply major global brands including Gap, Old Navy, C&A and Mango, said in a reply to Amnesty’s inquiries that it intends to end its relationship with MEHL.
Japan’s Kirin Holdings, which says it controls 80% of Myanmar’s fast growing beer market, announced in February that it was conducting a strategic review of its Myanmar business and seeking details on finances and corporate governance from MEHL, its partner. In June Kirin, owner of the San Miguel, Fat Tire and Lion brands, said it had appointed Deloitte Tohmatsu Financial Advisory to “determine the destination of the proceeds” from its joint ventures “as a matter of some urgency.”
“While the COVID-19 pandemic continues to pose further significant challenges to advancing this process swiftly, we are making every effort to address the issue as quickly as possible,” its announcement said.