| |
A new EU Common Position on Burma was agreed in October 2004. It
was heralded as a toughening of the EU’s policy toward the
dictatorship in Burma. On the face of it, the new position seemed
to represent an investment ban on Burma. However, after closer inspection,
it seems that the new Common Position represents no sanction at
all on the type of business activities that have been taking place
between EU companies and the regime in Burma.
The Common Position:
- The EU Common Position (1) bans EU companies
from ‘investing’ (2) in Burmese state-owned
companies, even though this type of ‘investment’ is already
banned under Burma’s Foreign Investment Law. Therefore the
EU ban on such investment has no effect whatsoever.
- We have no evidence that loans or finance have been provided by
EU companies to the Burmese companies listed in the annex to the
Common Position. Therefore the ban on such exchanges will also have
little or no impact.
- Myanmar Oil and Gas Enterprise (MOGE), Myanmar Timber Enterprise
(MTE) and Myanmar Post and Telecommunications (MPT) are all state-owned
enterprises. The Common Position specifically authorises the targeting
of ‘state-owned enterprises’, yet these companies were
NOT listed in the Annex of the Common Position, and are therefore
exempt from the sanctions. Oil, Gas, and Timber are the regime’s
most important revenue sectors, and have been left untouched by
these measures.
- - Union of Myanmar Economic Holdings Ltd. (UMEHL) and Myanmar
Economic Corporation (MEC) which are on the list, are NOT wholly
owned state enterprises, MEC is 100% and UMEHL 60% owned by military
personnel and yet they have been included on the list. The Common
Position does not authorise the targeting of non state-owned companies,
and therefore UMEHL (possibly) and MEC’s (definitely) inclusion
on the list seems legally dubious.
- No EU companies who are currently doing business in Burma will
be affected. Total Oil and DHL are safe. They can sign brand new
contracts, develop new projects and provide new finance to the regime.
- Companies listed under UMEHL and MEC are named, but no companies
outside those two conglomerates are listed (see examples of those
omitted below).
- The military controls the Burmese state and uses it solely for
its own benefit. Therefore the distinction that the UK government
is trying to make between the military and the state is mistaken.
If the UK and the EU had intended the ‘sanctions’ to be
targeted at military owned companies, why does the Common Position
specifically authorise action against ‘state-owned enterprises’
and not ‘military-owned enterprises’?
- If the UK and EU wanted to prevent EU companies from carrying
out business activities which benefit the military in Burma, they
would have targeted the energy sector. According to the Economist
Intelligence Unit gas exports from Burma were worth US$987 million
in 2003/4. It is the greatest source of legal revenue for the regime
and it is incomprehensible how the EU could aim to hit the regime’s
finances and fail to place MOGE on the list. It is also a sector
which is far less labour intensive than others and where sanctions
would have little impact on most ordinary Burmese citizens.
Recommended amendments to the Common Position:
- MOGE must be included in any revision of the Common Position.
This would need to specify a ban on any new contracts (e.g. exploration,
production-sharing, marketing etc) between EU companies and MOGE,
which has been the usual method of business co-operation in this
sector.
- Government ministries and their enterprises should be included
in a revised common position.
- The scope of the sanctions should include any form of business
or financial arrangement between an EU company and the regime, its
personnel, its ministries or its enterprises, whether wholly or
partly owned.
List of enterprises omitted:
Directorate of Defence Industries
Directorate of Procurement
Central Bank of Myanmar
Myanma Export and Import Services
Myanma Oil and Gas Enterprise
Myanma Heavy Industries
Myanma Economic Bank
Myanma Timber Enterprise
And many others………
Footnotes
1.Common Position in this paper refers to: Council
Common Position 2004/730/CFSP (including Annex II), and Council
Regulation (EC) 798/2004 (including Annex IV).
2. Council Regulation (EC) 798/2004 Paragraph 1
of Article 8a prohibits: “(a) the granting of any financial
loan to Burmese state-owned enterprises as listed in Annex IV, or
the acquisition of bonds, certificates of deposit, warrants or debentures,
issued by these enterprises, (b) the acquisition or extension of
a participation in Burmese state-owned enterprises as listed in
Annex IV, including the acquisition of shares and securities of
a participating nature.”
|
|
