After the coup in February, international companies are trying to get rid of military-related investments in Myanmar. Failure to do so will risk reputation damage and sanctions violations. But many people find that it turns out that promises are easier than doing.
Japanese, South Korean, and Singaporean companies face the prospect of being abandoned by international fund portfolios for failing to cut off business ties with military-controlled business partners.
But nine months after Aung San Suu Kyi’s government was overthrown, international companies could hardly find enthusiastic buyers to buy local shares, and the country is suffering huge losses. Severe economic recession And civil strife after the coup.
“Since the attempted coup d’etat, withdrawing from the relationship with the Myanmar military is obviously more challenging, but companies must withdraw responsibly because it will save the lives of the people of Myanmar and at the same time end the accomplices of the military’s brutality,” the Myanmar Justice Movement said Yadanar Maung said. .
According to the Political Prisoners Aid Association, a human rights organization, the army has killed more than 1,270 people and arrested more than 10,000. The military government is using brutal means to suppress Rebellion In northwestern Myanmar.
The United States, the European Union, the United Kingdom and Canada have Impose sanctions Oppose some military companies or individuals.
As soon as the coup ended, the Global Fund tried to get rid of its portfolio of companies that had commercial risks associated with the military government.
Companies that have direct partnerships with military companies and have long been under pressure from activists such as Japanese beer maker Kirin said they will divest. Others, such as Telenor, the Norwegian telecommunications group, announced that they would withdraw from Myanmar because operating conditions under the military government have become unsustainable.
The Dutch pension fund APG, which manages $700 billion in assets, lobbied Kirin and South Korean steelmaker Pohang Steelers to terminate their joint ventures with the Myanmar military-controlled conglomerate. Despite the promises made by both companies, APG threatened to divest them if they did not make significant progress by next year.
“Twelve months is enough… We have waited long enough,” said Park Yoo-kyung, APG consultant.
Telenor’s efforts to withdraw from Myanmar symbolize the challenges faced by foreign companies.
The Norwegian government-backed company announced in July that it would sell its local business to Lebanon’s M1 Group for $105 million, after the company had previously cancelled all its investments in the country.But the Ministry of Telecommunications controlled by the military government has The transaction has gone bad, I hope Telenor will find a new buyer controlled by Myanmar.
The company has faced criticism from activists after being accused of failing to prevent or mitigate the possible adverse human rights consequences of the sale to the group M1 controlled by Lebanese Prime Minister Najib Mikati and his brothers.
Telenor countered that its decision to sell was made after the military government pressured the installation of surveillance technology, which the company said would violate EU and Norway sanctions on Myanmar.
Many international companies have suspended or closed local operations, but a few have not, prompting activists and investors to question their commitment to leave the country.
Kirin and POSCO, which have partnerships with the military-backed Myanmar Economic Holdings Co., Ltd., are facing some of the strongest pressure from campaign groups. They insist that if the company cannot divest responsibly, it should be ready to go back empty-handed.
Yadanar Maung said: “If a company cannot find a responsible buyer, they should liquidate their business and avoid making any payments to the military government and its corporate groups.”
Do it No timetable is given For such sales, despite its promise to do so, its potential buyers will be restricted by the risk of sanctions. The boycott of the company’s flagship Myanmar beer brand after the coup further weakened its appeal.
“We are taking urgent measures to terminate the joint venture partnership with MEHL,” the Japanese group said. “We hope to find a way forward for Kylin to continue to make positive contributions to Myanmar.”
Pohang Steel has taken a different approach.A spokesperson stated that the company is Attempt to acquire shares of MEHL In its steelmaking companies-a move designed to distance itself from military interests-while reviewing whether such transactions would violate sanctions.
“We continue to urge MEHL’s management to make a decision, but we have not yet received a response,” the company said.
But funds that own stocks such as POSCO and Kirin worry that holding such stocks will undermine their own commitment to responsible investment.
Park said that APG may be forced to divest soon because neither Kirin nor Pohang Steel has updated the progress of the fund. “I think no meaningful negotiations are happening,” she said.
Singapore under scrutiny
In the context of post-coup conflicts and human rights violations, NGOs also called for more attention to the military exchanges between Singapore and Myanmar.
Foreign investment from this city-state exceeds US$24 billion, making the country the largest source of overseas financing for Myanmar. The United States has asked Singapore to use its influence in Myanmar to do more.
Many of Singapore’s investments in Myanmar are made through multinational and foreign companies based in this city-state.
Singapore real estate group Emerging Towns & Cities Singapore is a Singapore company that is developing a commercial and residential project on land leased from the military in Yangon, the commercial center of Myanmar.
The company told the Financial Times that its operations are in compliance with local laws, but its shares listed in Singapore have been suspended since February, pending regulatory review.
Additional reporting by Kana Inagaki and Leo Lewis in Tokyo