Asia Times Online , July 26-2012
By Kim Jolliffe ( a research and analysis consultant focusing on politics, security and humanitarian issues in Myanmar)
CHIANG MAI - With most Western economic sanctions against Myanmar now lifted, concerns are rising that the country's decrepit and politicized legal system is ill-equipped to deal with the expected influx of international business and investment.
President Thein Sein, speaking to US business executives in Cambodia this month, invited foreign corporations to invest in his until now highly isolated country, one of Asia's poorest and historically mismanaged. His sales pitch emphasized that out-of-date laws on trade and investment are in the process of being replaced with legislation that aims to welcome and protect foreign investment.
New legislation is essential to foster a more stable and outward-oriented business environment, but is perhaps more critically needed to protect the private interests of Myanmar's impoverished and repressed population. As the Aung San Suu Kyi-led opposition has long argued, legal and judicial reform are crucial to a successful transition from military to democratic rule.
Suu Kyi, at the London School of Economics in June, said "The progress [she hopes] to make with regard to democratization and reform relies... on understanding and acceptance of the importance of rule of law." She emphasized reforms will depend on both "procedure and substance", including a fundamental overhaul of laws, law enforcement agencies and courts.
Myanmar's legal framework, drawing on many colonial-era laws held over from British rule, is by any modern measure in a dire state. That owes to both poor legislation and an entrenched culture of "bribery and chaos" within the Myanmar police force, according to M Zaw Bowm, a former police lieutenant who deserted and fled Myanmar last year.
In recent decades, Myanmar's police have been used "only as tool of the military, and when [the officers] had time, for [their own] survival," he said in an interview. That abuse of power, M Zaw Bowm said, has left the institution in tatters.
International legal experts largely agree. Emerlynne Gil, a member of the International Commission of Jurists who has conducted research on Myanmar's judiciary and legal profession since May, said, "The legal profession has not fared well under years of military rule in Burma/Myanmar [and] has lost its integrity and credibility. Lawyers are viewed either as complicit in the corruption of the legal system or as political activists who face extreme hardships and challenges as they pursue their cases before the courts."
In order to rebuild trust in government and instill confidence in the electorate to engage in the democratic process, legal protection of civil liberties and human rights will be key. The United States, European Union and other Western countries imposed their respective sanctions against Myanmar in response to the previous military junta's abysmal human-rights record, both in fighting conflicts against ethnic insurgencies and suppressing dissent among the civilian population.
On the commercial front, foreign companies will require assurances that their capital commitments are protected by laws administered by independent and competent courts. To ensure Thein Sein's legal and other reforms are not easily reversed with a change in government, legal experts say reforms need to be enshrined in legislation that is not readily amended or overturned.
That may be easier said than done, however. According to the 2008 Constitution, all pre-existing laws - essentially a collection of outdated and repressive legal codes from the colonial era with other equally draconian laws tagged on by successive military regimes - remain in place with the caveat that they can be amended or repealed by either the executive or parliament.
Charged with the task of reviewing these existing laws is a governmental body known as the Studying, Examining and Reviewing Commission on Legal Affairs and Special Cases. With 156 laws put in place by the previous General Than Shwe regime alone, largely in line with its own political objectives and desire to maintain unchallenged power, this is no small task.
Among the oppressive laws still in place are severe restrictions on association, communication, criticism of the government, and rights to obtain official information. These laws are not only based on outdated forms of governance but are also written so broadly that authorities have been able to persistently exploit them for their own interests at the expense of the Myanmar people.
According to Hkun Awng, an ethnic Kachin youth activist studying law in London who questioned Suu Kyi at the recent LSE event, Myanmar politicians are placing too much emphasis on the rule of law and not enough on the content of the laws themselves.
He believes that Suu Kyi's legal reform policies reflect a "conventional understanding of the law that everyone [should be] equal before the law, no one [should] be punished unless a clear breach of the law is proved and, and no one [should be] above the law ... rather than questioning the making of law and their absurd impacts on different social groups."
Arbitrary abuses
A recent case in point: on July 7, at least 16 Myanmar student activists were arrested in the lead up to the 50-year anniversary of a military crackdown on students at Rangoon University, a date the opposition has typically tried to commemorate. The activists were without explanation released the following day, with authorities saying only that their arrests had been a "misunderstanding".
Whether the arrests were an attempt to quell potential protests, or a rash move made by the police that was then blocked by higher authorities to maintain the government's reformist image, the event highlighted the ongoing abuse of basic civil liberties at a grass roots level. Similar complaints have been raised about the government's continued human rights abuses associated with its counter-insurgency campaign against ethnic Kachin rebels and its inability or unwillingness to protect the rights of Muslim minorities amid recent sectarian rioting in Rakhine State.
Despite the built-in obstructions to democratic reforms represented by anachronistic laws and regulations, little has been accomplished so far by the Studying, Examining and Reviewing Commission on Legal Affairs and Special Cases to repeal or amend them.
Jannelle Saffin, an Australian parliamentarian who has two decades of experience commentating, advising and teaching on Myanmar Law, has in the past year discussed the need for legal reforms with many of the country's leading politicians and judges. She believes the process should be driven by the country's independent lawyers, who have been quiet over the past year compared with more vocal "politicians, journalists, economists, and business people."
In a letter sent to many of the country's lawyers and government actors, Saffin raised the need for an independent law reform commission that could "articulate a reform programme that contains short, medium and long term legal and judicial reforms."
The letter also called for the creation of an independent bar association (the existing Myanmar Bar Council is headed by the Attorney General and is made up entirely of government employees) and for lawyers to issue "public statements calling for the immediate repeal of some of [Myanmar's] most outmoded and draconian laws".
Over-arching reforms to existing business-related legislation will be crucial to establishing a functioning market economy. However, this is another area where the country's independent lawyers have so far failed to challenge the status quo. While one of Myanmar's leading corporate lawyers, Advocate of the Supreme Court U Min Sein, has argued that "the legal system is quite adequate" and that suitable "laws and procedures are already in existence," interviews with private businesspeople suggest otherwise. Without trust in the courts and government, Myanmar's asset holders are particularly conservative when it comes to investing in business or even depositing money in commercial or government banks. As a result, vast amounts of wealth are hoarded in property, stashes of US dollars, jewelry and other valuables, a misallocation of resources that has stifled growth and created market pricing distortions.
Foreign investors and companies have been equally apprehensive about entering Myanmar's unpredictable economy, with the legal system often cited as a significant deterrent.
"Both local and foreign companies try to stay away from the courts," said Romain Caillaud, managing director for Myanmar of the corporate advisory firm Vriens & Partners. Jared Bissinger, a consultant at the same company that has surveyed Myanmar's private sector said "many firms try to avoid the legal system as a means of settling commercial disputes and instead try to work these out bilaterally ... [An] independent judiciary is definitely one of the business environment factors that firms consider, so it would affect the decision making of foreign investors."
Of all the areas of needed legislative reform, those pertaining to the economy have generated the most discussion in the new parliament. In June, the government announced delays to the implementation of separate foreign investment and Special Economic Zone laws, both of which are expected to encourage new waves of FDI. The laws have been criticized by some lawmakers and civil society groups for potentially opening the way to foreign capital exploitation.
They have argued that new laws are needed not only to create a more attractive business environment, but must also protect the country from unscrupulous foreign firms, especially in the areas of natural resources, land, and agro-business.
The draft foreign investment law will essentially allow foreign investors to buy, sell and collateralize leases for land similar to the system employed in Thailand and Vietnam. It also offers income tax exemption of services and goods for five years for new foreign enterprises and a year exempt of all taxes on profits.
While the latter two provisions have sparked fears of exploitative companies entering the country to make a quick buck without providing sustainable employment or technological and managerial transfers, the former one on land leases some believe could threaten the livelihoods of farmers, which make up an estimated 90% of Myanmar's 53 million population.
In conjunction with the so-called Vacant, Fallow and Virgin Lands Management Law, subsistence and small holding farmers are at great risk of losing rights to their lands, many used by local communities for generations. The land law passed in March this year legitimizes state acquisition of land deemed as "vacant" by the government for agribusiness and other purposes.
Similar land legislation that has been in place since the colonial era has allowed for the state to seize hundreds of thousands of acres in Kachin and Shan States alone. These seized lands have often been handed over to foreign agribusiness firms, many owned by Chinese investors. Many of these lands were not only in use by local farmers before they were taken over by the state, they were also where the agrarians and their families lived.
Jilted justice
More democratic laws and legislation will ultimately depend on their fair and effective implementation by law-abiding police and impartial courts, experts say. In Myanmar, both the police and courts have for decades been kept intentionally weak and under the control of successive military rulers. According to M Zaw Bowm, the former police official who spent 10 years in the force, "The military government never trusted the police force so they put a lot of military men in [powerful positions] to control it."
"Our main job was to watch the opposition... [The government] has no real plan for building a good police force. This is due to improper training and as a result of the military government's oppression. The police are taught all the legal codes and they usually understand them but they do not prioritize respecting the law - they generally only look out for themselves, only for their survival, their income and their wealth. They want a lot."
He claims that the police and courts would often work together in taking bribes to clear someone for almost any crime short of murder. "A lot of bribes come in from rape cases, especially," he said. "If someone is raped, then we [would] arrest him. But if the culprit pays a price, then he will be let go."
Some, however, believe the country is ready to turn the page on its corrupt past. "Corruption is the cancer of the society," said Min Sein, who at the same time believes there are many signs that reform is taking root. "The stand taken by the President in particular and the cabinet as a whole is that 'no one is above the law' and [so] the courts are being urged to pass judgments according to the law."
"The main challenge that the police and the courts will face," Min Sein said, "will be to overcome the remnants of the belief in some people that authority and/or money can solve everything and that the law can be ignored."
Unlike other members of the former corrupt junta, Thein Sein is believed to have stayed comparatively clean. In contrast, Upper House Speaker Thura Shwe Mann, in many respects Myanmar's second most influential government figure, has long been criticized for giving preferential official treatment to his son Aung Thet Mann's private company, Ayer Shwe Wah. Nonetheless, Thura Shwe Mann has been vocal on the need to curb corruption. He is currently spearheading new anti-graft legislation and has called in parliament for a significant raise in servicemen's salaries.
According to M Zaw Bowm, pay raises hold the key to stamping out corruption in the police force. "Bribery took place because the police force had a very low budget. A lot of police stations, needed repairs that we could not afford and there is no regular system for salaries ... Starting salaries were about 15,000 kyat (US$17) every six days or sometimes 10 days or two weeks, but you need over 100,000 kyat per month just for food and living costs in Yangon ... and we get no public healthcare or anything like that ... If there is no improvement of salaries and no economic change and then they make a new law, they will just have to put everyone in jail."
Rebuilding Myanmar's courts and law enforcement agencies will be an arduous task, one where external assistance and support is being welcomed. As Suu Kyi said during her recent speech in London, while the military will not allow civil society or the opposition to work with them directly, she believes they "could do a lot of work with regard to the courts of justice and the police forces", adding that "the international community could help by offering proper training for the police officers."
According to U Min Sein, capacity building is the most pressing need to help Myanmar's lawyers and the courts deal with the anticipated influx of international investors and corporations now that US and EU sanctions have been eased. "The key area that needs to be strengthened would be to train the judges in company law and international commercial practices," he said. "We have been under closed doors for a long time and these things have been outside of the scope of the judicial system."
