Description:
Executive Summary: "Myanmar presents opportunities to build an inclusive economic
system, but continues to be plagued by serious human
rights challenges. The government is emerging from
five decades of military rule and isolation, undertaking
halting and partial reforms towards democracy, peace and
a modern economy. With the beginning of reforms in 2011,
Western governments lifted most of the economic sanctions
and many foreign companies have taken advantage of the
new business environment, the low-cost labour, abundant
natural resources, geographic position, and over 50 million
potential domestic consumers. During the 2014-2015 fiscal
year, foreign direct investment reached a record US$8 billion.
Last year saw a rapid increase in oil and gas projects with the
award of 16 onshore and 20 offshore blocks in the space of
12 months. The prospect of cheap labour is also leading the
garment industry grow rapidly. Total garment exports were
valued at about US$1.6 billion in 2014. Already, a number
of European and American companies have established a
supply-chain in Myanmar, and many others are considering
doing so. Myanmar has also seen an unprecedented growth
in international tourist arrivals and the tourism industry is becoming
one of the fastest growing areas of the economy.
This report focuses on the foreign investment in these three
sectors (oil and gas, garments, and tourism) ? the most significant
ones today. It then assesses the human rights risks
of multinational companies operating in Myanmar, particularly
in the area of labour rights, land rights and conflict and
security.
Reforms remain fragile. Widespread corruption and the absence
of rule of law, arbitrary arrests, and the lack of an independent
judiciary continue. Armed conflicts persist in areas
of Kachin and Shan States. The situation of the Rohingya minority
has deteriorated further. The evolving domestic legal
framework still lags behind international standards, and the
government lacks the capacity to implement new legislation.
The investment surge is intensifying land confiscation and
violence. There are widespread reports of land grabbing
linked to the development of infrastructure projects, the establishment
of industrial zones, agriculture concessions, and
resource extraction projects. In 2012, the government started
a process to formulate a new Land Law, but the current
framework leaves workers vulnerable to forced evictions,
expropriation without proper compensation. Hydropower
projects such as the Myitsone and the Salween River dams,
extractive projects such as the Shwe Gas project and the
Monywa copper mine (comprising the Letpadaung mine)
and the establishment of Special Economic Zones, including
the Dawei, the Kyaukphyu and Thilawa, have all been associated
with tensions between local communities and investors
over land confiscations and displacement, with little or no
compensation. Protests are growing in number across the
country and are often met with intimidation, the excessive
use force, and arbitrary arrests and detentions.
With the passage of new labour laws in 2012, the formation
of trade unions and the exercise of the right to strike were
legally allowed for the first time in 50 years. In 2012, the Confederation
of Trade Unions Myanmar (CTUM) was allowed
to return to the country after decades in exile. It has established
an office in Yangon and was registered as the first
nationwide confederation in July 2015. Workers and employers
are, however, still learning about their rights under the
new legal framework. Collective bargaining is growing, but
still relatively rare. Poor implementation of the law means
that, in practice, employers can and do discriminate against
workers who seek to exercise their newfound rights without
consequence. Striking workers and labour activists are
dismissed by employers. The procedures established by the
law on the Settlement of Labour Disputes has not provided
adequate protection for workers and is considered to be
dysfunctional.
Workers are paid extremely low wages. To meet basic living
needs, they are often forced to work excessive overtime. In
June, the government announced a new minimum wage of
3,600 kyats per day for enterprises employing 15 or more
workers? a compromise between the 4,000 kyats advocated
by the unions and the 2,500 kyats urged by business.
The wage is still among the lowest in the region ? on par
with Bangladesh. Even then, the garment manufacturers association
threatened to close around 100 factories if the minimum
wage was introduced at that rate (and a few have in
fact closed). The new wage rate is an improvement, though
still below a wage on which a worker can meet his or her basic
needs. It remains to be seen whether the new rate will be
paid, and whether the government will effectively enforce it.
The large influx of foreign money and consequent pressure
to keep wages low and increase productivity levels combined
with a weak regulatory framework risk exacerbating
labour and union rights abuses.
There are serious risks that Myanmar?s natural resources
and labour will only benefit privileged domestic interests
and foreign companies, while disadvantaged communities
will suffer the negative impacts of poorly regulated business
Executive summary
Foreign direct investment in Myanmar: What impact on human rights? 8|76
activities. The investment challenges in a context where
the economy is still dominated by the interests of the military
and their connected ?crony” businessmen are obvious.
Myanmar is still a high-risk country, requiring a rigorous responsible
investment strategy. The government is not protecting
human rights or enforcing labour and environmental
standards. In this context multinational enterprises will find
their responsibilities more difficult to fulfil.
The corporate responsibility to respect requires companies
to exercise due diligence in order to mitigate human rights
risks so that their operations do not contribute to or exacerbate
human rights violations. In Myanmar, a weak governance
country, investors are exposed to a complex business
environment and responsible businesses must understand
the direct and indirect impacts that their activities have on
human rights. In particular, companies will have to undertake
due diligence with respect to the human rights of workers
whether they are performing work directly on their behalf
or indirectly through other business enterprise. Land use
and acquisition should recognise customary land rights,
ensure consent, with direct consultation with villagers and
local authorities, and provide proper compensations. Companies
should establish grievance mechanisms to provide
early remedy for rights-holders who are adversely impacted
by their operations. Given the lack to effective state-based
remedies, operational level grievance mechanisms, established
according to criteria in the [UN] Guiding Principles, are
even more important in Myanmar. A collective bargaining
agreement is the most appropriate grievance mechanism in
the workplace.
Due diligence is required when doing business in Myanmar?s
conflict-affected areas or when dealings with the military
and their companies. Many local companies have some relationship
with the military or may be ?cronies”. Businessmen
with close ties to the military, associated with human rights
abuses, are the best placed to benefit from new foreign investment
in Myanmar.
Multinational companies operating in Myanmar are expected
to act as industry leaders on human rights and labour
practices. This includes engaging with the government to
encourage it to apply international standards, as well as engaging
with local partners and subcontractors to have them
comply with these standards. This report provides guidance
for multinational companies operating in Myanmar on their
huma
Source/publisher:
International Trade Union Confederation (ITUC)
Date of Publication:
2015-10-00
Date of entry:
2015-10-12
Grouping:
- Individual Documents
Category:
Language:
English
Local URL:
Format:
pdf
Size:
2.11 MB