The Irrawaddy Business Roundup (August 23, 2014)

By William Boot 23 August 2014

Red Tape and ‘Delay Tactics’ Could Slow Mobile Phone Networks’ Rollout

Bureaucracy and “suspected” delaying tactics by the state-owned enterprise Myanmar Posts and Telecommunications (MPT) will slow down the availability of Internet and mobile phone services to many parts of Burma, a survey said.

An overlap of bureaucracies is holding up the construction of new wireless signal towers, said the London Financial Times’ Asean Confidential research service.

“Despite the significant progress, a long road lies ahead for the telecoms [Ooredoo and Telenor] as they expand their networks to cover the rest of the [Burmese] population,” the paper reported, referring to the two foreign telecoms firms that were granted licenses to operate mobile services in Burma last year.

“For every tower, the contractor must acquire separate permission from the Ministry of Communications, Ministry of Construction, one or more regional and district authorities, and the landowner, any one of which can cause delays in a country without streamlined approval processes.

“Ooredoo and Telenor also face a potentially hostile regulatory environment because state-owned MPT, a direct competitor, doubles as regulator for the telecom sector. It is widely suspected that MPT has delayed certain approvals in order to slow the launch of the foreign telecom networks, buying itself time to catch up.”

PricewaterhouseCoopers Fined US$25M for Breaking US Burma Sanctions

The international financial services company PricewaterhouseCoopers (PwC) has been fined US$25 million for breaking the United States’ economic sanctions against Burma’s former military regime.

The company contravened rules made by New York State against Iran, Sudan and Burma, said AFP news agency, quoting the state’s Department of Financial Services this week.

PwC was pressured by the Bank of Tokyo-Mitsubishi UFJ (BTMU), Japan’s biggest lender, to hide details of transactions by the bank with the sanctioned countries, the department said.

“Under pressure from BTMU executives, PwC removed a warning in an ostensibly objective report to regulators surrounding the bank’s scheme to falsify wire transfer information,” the department said.

As well as the fine, PwC’s Regulatory Advisory Services unit will be suspended for 24 months from accepting consulting work at financial institutions regulated by the New York State agency.

Thilawa SEZ Raises Shares Cash as More Loans Pour in for Development

The holding company for the Thilawa special economic zone (SEZ) has sold more than three million shares, raising enough capital to be able to operate the business enclave, a report said.

“We now have enough capital to run the economic zone. We have a plan to list on the stock exchange, which is going to kick off in 2015. This is for the benefit of our shareholders,” said Thilawa SEZ Holdings Public Company chairman Win Aung, quoted by Eleven Media.

Shares for Zone A of the SEZ, which have been on sale since March, have netted US$33 million, Win Aung said.

News of the shares capital coincides with an announcement that agricultural consortium Myanmar Agribusiness Public Corporation (MAPCO) has secured another loan of $50 million to develop a port, wharf, warehousing and a processing factory in Thilawa.

The loan has been provided by the UOB bank of Singapore, MAPCO managing director Ye Min Aung was quoted by the Myanmar Times as saying. The development and the loan will be subject to approval by Burma’s Central Bank and also the Myanmar Investment Commission, he said.

MAPCO has already secured loans totaling $200 million from UOB, said the Myanmar Times.

MAPCO is made up of six companies, including one registered in Singapore.

Delhi Government Eyes Burma to Help Solve India’s Gas Shortage

The New Delhi government has Burma in its sights to help solve India’s growing natural gas shortage, reports said.

Demand for gas in India is forecast to grow more than 10 percent in the current financial year, against production growth of just over 7 percent, said Interfax news agency, quoting the Ministry of Petroleum.

Although the country is thought to have large reserves of natural gas as well as coal-bed methane and gas locked in shale rock, supplies from abroad offer a medium-term solution, India’s Minister of Petroleum and Natural Gas Dharmendra Pradhan said in a statement reported by Indian media.

“Meanwhile, the state-run Oil and Natural Gas Corporation (ONGC) is ‘focused on securing new overseas assets, acquiring two new blocks in [Burma] just last week,’” said Interfax, quoting the statement.

ONGC won exploration and production rights in a handout of 15 onshore development licenses by the Naypyidaw government in contracts linked with state-owned Myanmar Oil & Gas Enterprise (MOGE).

The terms of the contracts have not been disclosed.

Migrant Workers’ Rights Campaigner Warned of More Thai Legal Action

The British campaigner for Burmese migrant workers’ rights in Thailand, Andy Hall, has been threatened with further criminal legal action if international human rights NGOs and trade unions continue to petition on his behalf.

The warning came from the Thai Pineapple Industry Association (TPIA), saying it appeared to be Hall’s intention to “destroy Thailand’s economic system and severely impact negatively on business owners.”

“If Mr. Hall insists in continuing to behave in this manner, businesses affected by Mr. Andy Hall’s allegations made without fact will coordinate together to prosecute him further in Thailand’s Courts of Justice,” said a statement signed by TPIA general secretary Nirut Ruplek.

One of TPIA’s member companies in the fruit canning export business, Natural Fruit Company, has brought criminal libel prosecutions in Thailand against Hall after he published a report alleging the company violated Thailand’s minimum wage standards, confiscated Burmese workers’ travel and work documents, and the failed to provide legally mandated paid sick days and holidays.

This led to a petition to TPIA signed by almost 100 labor and rights organizations in 20 countries calling for the case to be dropped and Hall to be allowed to leave Thailand.

Signatories included the International Trade Union Confederation, the British Trades Union Congress the European Coalition for Corporate Justice and Human Rights Watch.