GES Newsletter
April 23, 2015

A few years after EU and US sanctions on Burma were suspended, the country is still facing challenges driven by political instability and the risks for investors remain high. GES has for many years engaged with Burma-based companies to enhance their human rights risk preparedness. Building on the investor field trip to the country late last year, GES hosted a webinar in March with KLP Kapitalforvaltning (KLP), one of the investors that joined the trip, and Myanmar Centre for Responsible Business (MCRB) and Ericsson, who GES met in the country. The presenters described the current situation in Burma from different perspectives of responsible business and highlighted issues of concern, in particular labour conditions and safety, land rights, ethnic minority and post-conflict areas, the absence of effective stakeholder or community engagement, as well as corruption.

Vicky Bowman, Director of MCRB, an initiative aiming to encourage and promote responsible business practices in Burma, underlined that the emerging environmental and social impact assessments (ESIAs) process is one of the key issues. The procedural legislation to bring the ESIAs into effect is not in place yet and meanwhile the EISAs that are conducted voluntarily often lack consultation and transparency. MCRB has conducted Sector Wide Impact Assessments (SWIA) on the oil and gas and tourism sectors, which highlight the actual and potential impacts across the respective industries. The next SWIA to be published will cover the ICT (Information and Communications Technology) sector.

Camilla Goldbeck-Löwe, Corporate Responsibility Expert at Ericsson, said that the company has put significant effort into adopting a responsible approach in its Burmese operations since it returned to Burma in 2012, after having left the country in 1998 due to human rights concerns. With support from the NGO Shift, Ericsson has conducted a comprehensive human rights impact assessment. Through this process the company identified prioritised risk areas, including local awareness of human rights issues, sourcing and suppliers, network rollout and lawful interception and corruption, where it has started undertaking mitigation measures.

As Burma has been opening for international companies, this market has naturally attracted increased interest from the investor community. Annie Bersagel, Advisor – Responsible Investments at KLP, joined a group of investors on the engagement trip arranged by GES in November in order to get a first-hand understanding of the Burmese reality. She gave examples of how companies present in the country try to address child labour and corruption, as well as describing the experience from visiting Thilawa, a Special Economic Zone outside Yangon. The resettled people were not properly compensated and currently do not have any means to support themselves. KLP’s overall impressions from the trip include surprise at civil society actors’ willingness to speak openly. KLP also noted a general sense that the local population is eager for development from the influx of foreign investments coming in, although it is still unclear whether the reality will meet their expectations.

Answering one of the questions from the webinar audience, how elections scheduled for November can affect the stability of the country and thus the stability of the market and business context, Ms. Bowman said “I think they will have an effect; businesses are watching carefully, and paying particular attention to the increase in arrests of civil society activists as well as ethnic and religious conflict.” However, according to her, the country is unlikely to return to the military rule and the question is more one of the nature of the government that will emerge after the elections.

GES engages proactively on behalf of investor clients with companies involved in high-risk activities in Burma, such as the oil and gas as well as telecom sectors. The aim is to enhance the companies’ human rights risk preparedness, which is assessed against key performance indicators based on well-established principles on companies’ responsibility for human rights in general and as applied to high risk contexts in particular.

For questions regarding GES Burma Engagement please contact:
Linda Björk, Senior Engagement Manager