Human Rights Groups Slam US Sanctions Waiver

By Charlie Campbell 12 July 2012

The suspension of US sanctions on Burma to allow investment in its controversial military-linked oil and gas industries will have dire consequences for human rights in the country, claim humanitarian groups.

The Obama administration announced on Wednesday that it will allow US investments and financial services in Burma just as Secretary of State Hillary Clinton is due to address the Association of Southeast Asian Nations summit in Cambodia.

The new policy does not restrict US companies from partnering with Myanma Oil and Gas Enterprise (MOGE), Burma’s state-owned oil company and the main source of revenue for the previous military government, and instead only requires that they inform the Washington government within 60 days of new deals.

This comes despite opposition leader Aung San Suu Kyi—for decades the principle guide for US policy on the former pariah nation—calling last month on governments to block investments with MOGE until it meets international standards of transparency and accountability.

“The US government should have insisted that good governance and human rights reform be essential operating principles for new investments in Burma,” said Arvind Ganesan, business and human rights director at Human Rights Watch.

“By allowing deals with Burma’s state-owned oil company, the US looks like it caved in to industry pressure and undercut Aung San Suu Kyi and others in Burma who are promoting government accountability.”

The US issued general licenses to allow companies to operate in Burma while still keeping sanctions laws on the books. At present, Chevron is the only American company exempted from the sanctions and holds a 28 percent stake in the Yadana pipeline project, which is operated by French firm Total.

But the US oil and gas industry pressed the Obama administration for a wholesale removal of the investment ban without any limits on partnering with MOGE, citing potentially lucrative investment opportunities when Burma opens up additional oil and gas blocks for exploration later this year.

The new policy, initially billed as a “framework for responsible investment,” permits American companies to invest in all sectors of Burma’s economy—but not to directly partner with the military or those on the Treasury Department sanction’s list.

“President Thein Sein, Aung San Suu Kyi and the people of Burma continue to make significant progress along the path to democracy, and the government has continued to make important economic and political reforms,” read a White House statement on Wednesday.

“As we indicated in May, the armed forces and Ministry of Defense-owned entities will not be covered by these general licenses. In addition, US companies will be asked to report on their activities in line with international corporate governance standards.

“This order is a clear message to Burmese government and military officials: those individuals who continue to engage in abusive, corrupt, or destabilizing behavior going forward will not reap the rewards of reform.“

Nevertheless, human rights groups have been quick to remind the US government that the situation on the ground does not reflect this new-found optimism.

A statement by Freedom House on Wednesday admitted that foreign investment in Burma was necessary to alleviate the poverty of ordinary people, but added that “suddenly funneling money into the country’s opaque, scandalously corrupt business environment is no way to help Burma progress economically or politically. This is all the more true when the main investment goal is the exploitation of natural resources.”

Similarly, a recent joint letter by nine advocacy groups—comprised of AFL-CIO, Freedom House, Human Rights Watch, Institute for Asian Democracy, Open Society Foundations, Orion Strategies, Physicians for Human Rights, US Campaign for Burma and United to End Genocide—called on the White House to continue restrictive economic measures until ongoing concerns are addressed.

“Despite holding by-elections and taking other positive steps, the government has yet to institute the reforms necessary to move Burma toward democracy, and basic political power remains with the military,” said the coalition. “It is imperative for the United States to retain its leverage until real reform occurs.”

The European Union similarly suspended economic sanctions against Burma, although without any monitoring requirements on companies, in April despite protestations from human rights groups.