Monday, April 23, 2012

Conflict Risk Network: Risk to investors continue in Burma, despite elections

Burma “Not Open for Business” Investor Network Says

Amid reports that the recent elections in Burma will lead to relaxation of international sanctions, a briefing paper released today by the Conflict Risk Network (CRN) warns investors that high risks remain despite initial reforms by President Thein Sein and the electoral victory of Nobel laureate Aung San Suu Kyi.

In the paper, “Not Open for Business”, CRN—a project of United to End Genocide—highlights specific industries, projects and corporate activities that have the potential to drive conflict, and create or exacerbate an environment conducive to mass atrocities in Burma. The paper concludes with recommendations to investors regarding their holdings in corporations currently operating in Burma or those seeking to enter the country. Among its recommendations CRN calls on investors to make a public statement in support of a cautious approach to the relaxation of U.S. and EU sanctions and investment bans.

“Not Open for Business” comes as the World Bank and International Monetary Fund open their spring meetings in Washington, D.C. In February 2012, U.S. Secretary of State Hillary Clinton cleared the way for assessment missions and limited technical assistance in Burma by international financial institutions such as the World Bank, Asian Development Bank and International Monetary Fund. This waiver runs through September 2012.

In response to the relatively free and fair by-elections on April 1, 2012, the U.S. government announced that sanctions will be eased. The Obama administration reportedly plans to adjust the ban on investments and to take steps to open the information and communications technology, agriculture and tourism sectors, as well as parts of Burma's banking sector.

United to End Genocide’s President, Tom Andrews, spent election day in Kachin state in the northernmost part of Burma. “There is no evidence of reform for many desperate people in Burma.  In Kachin state, the ethnic minorities saw bullets not ballots on election day. Tens of thousands of people have already been displaced and now the Burmese army is actively increasing its troop presence,” Andrews said.

“Not Open for Business” focuses on risks associated with investment in the oil and natural gas, hydropower, mining, and information and communications technology sectors. The paper documents mounting pressure to lift sanctions by trade groups such as the U.S.-ASEAN Business Council and oil corporations such as Chevron.

However, CRN and United to End Genocide caution that in the absence of clear steps forward by the Burmese government to ensure full rule of law and access to justice, it is difficult to ensure that new investment in any sector would not further exacerbate human rights abuses. CRN further notes that corporations and investors have an obligation to develop their own criteria for investment and operation in Burma—and that investment in Burma may be legally permissible before it is financially wise.

According to CRN Director Kathy Mulvey, “A business rush into Burma could inhibit rather than facilitate the protection of human rights and the improvement of the lives of the country’s people, especially ethnic minority communities.”

CRN is a project of United to End Genocide. The Save Darfur Coalition and Genocide Intervention Network are now United to End Genocide. The organization remains committed to its work to end the crisis in Darfur and bring peace to all of Sudan as well as to end violence in other areas of mass atrocities. The merger creates the world's largest anti-genocide activist organization, with a membership base of hundreds of thousands of committed activists, an unparalleled nationwide student movement, more than 190 faith-based, advocacy and human rights partner organizations, and a network of institutional investors collectively representing more than $3 trillion in assets under management.