Burma’s First EITI Report Attracts Mixed Reviews

By Seamus Martov 11 February 2016

Burma’s first ever Extractive Industries Transparency Initiative (EITI) report was published last month, focusing on revenue flows from the country’s oil, gas and mining sectors, completed as part of the government’s effort to become a full-fledged member of the global protocol. Burma became a candidate country in July 2014, and the country’s membership became a key plank of President Thein Sein’s reform agenda.

The London-based NGO Global Witness, which last year released a highly publicized report on corruption in the multi-billion dollar jade industry, called Burma’s first EITI report “an important foundation for more accountable management of Myanmar’s oil, gas and mining industries that the incoming government, civil society and companies can build from.”

In a detailed response to the report, however, Global Witness concluded that the assessment could have been more thorough in its coverage of the lucrative jade trade, which the watchdog group says the EITI report’s authors seem to have treated as an “afterthought.”

Global Witness noted that the report’s author avoided citing already published government data on the jade trade that was released in a 2014 Harvard study authored by David Dapice with full cooperation from the Burmese government, or other data that Global Witness had obtained and published last year. “Most bizarrely, they do not even reference published government statistics on jade production,” notes Global Witness.

Although the full disclosure of who owns which firms involved in a given extractive resource project is one of the main goals of the EITI process, the report left out much of this information in its coverage of the jade trade.

“The report offers very little on the question of who really owns companies and what the terms of companies contracts are—both are crucial to the public’s ability to hold companies and officials to account and need to be prioritized in the next stage of the EITI process,” said Global Witness, whose own report last year revealed that several high-profile former members of the previous ruling regime—including the families of Snr-Gen Than Shwe and former northern commander Ohn Myint—were behind shadowy firms with lucrative concessions in Kachin state’s Hpakant.

Global Witness wasn’t the only critic of Burma’s EITI efforts. Wong Aung, director of Shwe Gas Movement (SGM)—an NGO created in response to concerns about the now completed China-backed twin oil and gas pipelines project—was part of the EITI’s multi-stakeholder group at the beginning of the process.  A native of Arakan State, Wong Aung said the report did not do enough to cover issues relating to resources in ethnic areas.

“I totally agree with Global Witness, there needs to be a more serious look at jade and other resources coming from ethnic areas,” said the veteran campaigner. “There are still a lot of political and institutional obstacles to making the report complete.”

Wong Aung told The Irrawaddy that he was left somewhat disillusioned with the civil society engagement component of the EITI process, which he said glossed over the concerns of ethnic groups about resource governance and environmental policies.

“The problem is that a lot of marginalized people, including ethnic people, have been left out of the process,” he said.

Wong Aung wants the incoming National League for Democracy (NLD) government to make an effort to address long-standing concerns of ethnic people about resource governance, lamenting that the issue does not appear to be a high priority for the NLD despite its national importance.

Firm Linked to Japanese Govt Fails to Comply

 The EITI report contained a great deal of data provided by international oil and gas firms about their payments and taxation levels to the Burmese government, which also provided data for what they received from these firms, something that the government had never done before.

The report noted however, that Nippon Oil Exploration (Myanmar), which owns a 19.32 percent stake in the Yetagun offshore project, did not cooperate with the process. Most of the other major international oil firms operating in country did comply. Data available on the website of firm JX Nippon Oil & Gas Exploration Corporation revealed that it owned a 40 percent stake in Nippon Oil Exploration (Myanmar). A 50 percent stake in Nippon Oil Exploration (Myanmar) is held by the Japanese government, while the remaining 10 percent is held by the Japanese conglomerate Mitsubishi, according to the company’s website.

Despite the fact that Nippon Oil “failed to produce copies of their receipts” as requested for the EITI audit, the report’s authors were able to include some information about the firm’s activities because their partner on the Yetagun project—the Malaysian firm Petronas, which is the operator in the consortium of firms involved in Yetagun—shared its data. Information relating to the firm’s Burmese operations, including the firm’s local registration number and ownership structure, were not provided. Likewise, details about Nippon Oil’s auditor were also missing.

The Japanese government has held a stake in the Yetagun project since it entered into a partnership with JX Nippon in the 1990’s, before the project went online. In February 2009, the Japanese government, led at the time by the centrist Democratic Party of Japan (DPJ), formally announced its decision to become a “supporting country” of the EITI.