Stay or go: the dilemma of multinationals in Myanmar

In 1977, Leon Sullivan, an African-American minister and member of the board of directors of General Motors, undertook a seemingly impossible task: to develop guidelines for companies seeking to do business, but not harm, in South Africa. Apartheid South.

The principles were written at a time when many activists wanted a full economic boycott of a racist and brutal regime. They asked signatory companies to commit to equal pay for employees of all races, promote more non-whites into leadership positions, and work to eliminate unjust laws (the seventh principle, adopted in 1984). More than 100 American groups have signed.

Foreign investors in Myanmar currently face an equally pressing question: how to do business responsibly in a country ruled by another repressive regime. Min Aung Hlaing’s junta overthrew a democratic government nearly a year ago and has since killed around 1,500 people and imprisoned thousands, many of whom have been tortured.

TotalEnergies and Chevron, after facing intense pressure from human rights activists to cut off the regime’s access to gas industry revenues of more than $1 billion a year, have announced last week that they were divesting. The companies had previously resisted pressure from activists, arguing that withholding taxes on payments to the junta could expose their staff managing the Yadana gas field to prosecution. Withdrawing entirely, they said, could subject employees to forced labor.

The question is now open whether the withdrawal of Total and Chevron will really harm the regime. Contractually, Yadana’s shares and part of the future gas revenues now controlled by Total will go to Yadana’s other partners: Myanma Oil and Gas Enterprise, the state energy company controlled by the Burmese junta, and the Thai PTT, which imports gas from Yadana and mostly ignores activists. ‘ review (and did not respond to requests for comment).

However, there are growing calls for the MOGE itself to face sanctions. And there is little doubt that the exit of Total and Chevron marks at least a symbolic blow to the regime.

Their withdrawal has also rekindled the debate, well known to former South Africa, over whether foreign companies can operate responsibly in Myanmar.

The national unity government, formed by supporters of imprisoned leader Aung San Suu Kyi who went into hiding or exile after the coup, has issued guidelines for foreign investors. “The basic principle is ‘Do more good than harm’,” a shadow government adviser told me. Outlined in a six-page document, they call on companies to protect the well-being and safety of employees, including measures such as not sharing sensitive information about them with plan officials, and to carry out regular “self-assessments” of their own activities.

For foreign companies that remain in Myanmar, there are now clearly no-go areas, such as doing business directly with military entities or colluding with the regime’s crackdown. Japan’s Kirin is in a long process of pulling out of its long-criticized joint ventures with a military company that makes what was Myanmar’s top-selling beer. Norwegian company Telenor is trying to sell its business in Myanmar after coming under pressure from the regime to install listening equipment.

However, in other sectors the picture is less clear and some argue that pulling out would do more harm than good.

“These are challenging times for business in Myanmar,” says Vicky Bowman, director of the Myanmar Center for Responsible Business. However, she adds: “The people of Myanmar will not benefit, either now or in the years to come, from the exit of responsible companies and an accelerated return to the operating environment that existed under military rule. previous”.

In the garment sector, multinationals such as H&M, Bestseller and Primark attracted supply chain investors and created new jobs, mainly for women, during Myanmar’s decade of democratic transition. , which ended in the coup. While some have suspended operations in Myanmar, others are still buying quietly.

The record of the Sullivan Principles is mixed. Sullivan himself later expressed doubts as to whether they had worked. At a minimum, they gave companies that chose to stay clear guidelines on how to work ethically and are seen as a precursor to the current principles and codes on corporate social responsibility. And once the repressive regime fell – apartheid in this case – there were foreign companies on the ground ready to help rebuild the economy under democratic dispensation.

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Twitter: @JohnReedwrites

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