Business

New Laws for Investors, but Lawlessness for Burmese in the Way

By William Boot 22 May 2012

Burma’s government ministries are planning a series of international trade shows in Rangoon to promote investment despite the continued absence of any international-standard laws to protect civil rights.

The shows include the second promotion of onshore oil and gas exploration franchises within six months at a time when evidence is emerging of Burmese being bullied and evicted across the country along the route of China’s oil and gas pipelines route. The army’s offensives in Kachin and Shan states are seen as an attempt to make the way clear for the pipelines.

In June, the “New Myanmar Investment Summit 2012” will seek to attract foreign firms in the power, telecommunications, real estate, mining, agriculture and banking sectors. In July, there’s a mining conference—“Gearing Up for Emerging Opportunities in the Hard Minerals Sector.”

In early September, foreign oil and gas development companies are being invited to look at investment opportunities. Last March, scores of representatives from more than 30 countries attended a similar trade show.

The Energy Ministry has said it will announce in August a new batch of onshore land blocks for which oil firms can bid for licenses. A tranche of offshore blocks will be put up for bids before the end of this year.

Summit organizers CMT—the Singapore-based Center for Management Technology—said the Energy Ministry will present a “road map” for oil and gas development, including the provision of pipelines, ports and fuel storage terminals.

However, civil and human rights groups are concerned that while laws are being amended or introduced to cater for foreign investors, nothing appears to be being done to protect ordinary Burmese citizens from exploitation.

“There have been numerous cases and patterns of land confiscation with inadequate or no compensation along the [Chinese-bound] oil and gas pipelines,” Paul Donowitz, the campaigns director for the Washington-based EarthRights International, told The Irrawaddy.

“In many areas, corrupt local officials have demanded payments of up to 50 percent of the compensation provided to land holders in order to gain land title that allows them to receive compensation.”

Donowitz says some farmers and villagers have been given nothing or else insufficient compensation for them to buy replacement land, or there is no replacement land near their communities.

“Taken together, these practices are having severe impacts on the livelihoods of people whose land has been acquired or taken related to the oil and gas pipeline projects. A lack of adequate legal recognition of traditional land user’s ownership rights contributes to these issues, as do corrupt local officials and little or no judicial protections.”

Along one section of the US $1 billion Chinese pipelines route, cheated villagers have retaliated by abandoning dyke repair work which is essential for agriculture, the Shwe Gas Movement NGO reports.

In all cases, local authorities working with foreign developers are arbitrarily deciding who receives compensation.

This lawless scenario is in stark contrast to the new legal framework which is apparently being drawn up for the benefit of foreign investors.

“As part of the economic liberalization, the draft of [a] new investment law suggests that foreigners can now either have 100 percent ownership of companies, or set up joint ventures with at least 35 percent foreign capital with Burmese citizens or government departments, and may be granted a 5-year tax holiday from the start of commercial operations,” says CMT in its advertising for the June Rangoon investment show.

“According to the draft, they can also lease land from the state or from private citizens who have permission to use land,” CMT says.

The civil rights problems along the 900-km route of the pipelines being built by the China National Petroleum Corporation are being highlighted as another major foreign oil company, PTTEP of Thailand, signs an offshore gas development agreement with the Energy Ministry, including a 70-km-long onshore pipeline through Tenasserim Division to the Thai border.

Most of the 50 billion cubic meters of gas expected to come from the Zawtika block in the Gulf of Martaban will go to Thailand.

EarthRights’ Donowitz says continued fighting in Kachin and Shan states between the army and ethnic forces is linked to securing the Chinese pipeline routes at all costs.

“The army offensive along the pipeline’s route in southern Shan State is undoubtedly connected to the army’s desire to secure the area around the pipeline,” Donowitz told The Irrawaddy.

“There are also complex and multiple motivations for the army’s attacks against the KIA [Kachin Independence Army] and other ethnic armed groups, but certainly, gaining access to and securing natural resource projects and energy corridors plays a significant contributing factor,” he added.

Zoya Phan of the Burma Campaign UK alleged last week that the army’s offensive in Kachin State contravenes international law but Western governments are too busy praising the Burmese government’s supposed liberal reforms to protest.

“Since the reform process started, the international community has talked up positives and played down negatives,” she said. “What is taking place in Kachin State is already a crisis, and could be about to get much worse, but it isn’t being treated as a crisis.”

As the United States prepares to follow the European Union in suspending economic sanctions against Burma, a group of parliamentarians from the member states of the Association of Southeast Asian Nations (Asean) has cautioned that Western approval of the Thein Sein government is racing ahead of reality.

“We consider that the Western governments are in a bit too much of a hurry,” said Putri Adena Astrid, spokeswoman for the Asean Inter-Parliamentary Myanmar Caucus.

“Most of the investment is happening in the ethnic areas, and we really want to remind Western governments that they should keep the sanctions until they settle the issues,” she told Asia Sentinel.

The vice president of the Asean caucus, Kraisak Choonhavan, used much stronger language in a statement: “It is ludicrous to reward the current [Burma] government’s untested reforms by paving the way for a gold rush. Fighting in Myanmar’s ethnic areas continues and many of the ethnic leaders are concerned that these reforms are just a ploy to pave the way for ‘development’ projects on their lands.”

It’s a warning that foreign companies planning to attend the forthcoming trade investment shows in Rangoon might care to bear in mind.

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