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US Decision to Ease Myanmar Sanctions Must be Coupled with Assistance in Developing Legislation and Rigorous Assessment of Investments

By ASEAN Inter-Parliamentary Myanmar Caucus  •  July 12, 2012

The ASEAN Inter-Parliamentary Myanmar Caucus (AIPMC) today urged caution for investors seeking to do business in Myanmar and called on the United States, ASEAN, the World Bank, the International Monetary Fund and other international bodies to assist Myanmar in developing rigorous business and investment laws that will help to ensure investments into Myanmar meet international ethical standards and do not fuel further human rights abuses or undermine the fragile reform process.

In light of the formalization yesterday of the United States’ decision to ease economic sanctions on Myanmar, AIPMC is concerned that without sufficient legislation, a gold rush in Myanmar could fuel further human rights abuses, risk fragile ceasefires and arrest ongoing democratic reforms rather than bolster them. AIPMC is also concerned that Myanmar, which is still far from a functioning democracy, lacks the legal and institutional framework to enforce ethical business, labor and environmental laws.

During a recent fact-finding trip to Myanmar from July 3-8, AIPMC heard from a wide range of actors, including opposition MPs and civil society actors, and many stressed the need for the government to draft and implement solid legislation in line with the guidelines of the United Nations Economic and Social Council (ECOSOC), International Labor Organization (ILO) and internationally recognized civil and political rights.

MPs and civil society actors expressed to AIPMC member MPs on this trip that the government of the Union of Myanmar requires help in drafting and instituting labor and environmental laws as well as other legislation that regulates the actions of businesses, especially foreign investments, and protects the rights of the people and the environment. AIPMC calls on the United States and other countries to set up and maintain rigorous assessment and evaluation procedures for all individuals and companies undertaking business in Myanmar.

“Cambodia serves as a perfect example of the pitfalls of major international donor and business investments – Myanmar can and should learn from these mistakes; the international community has a duty to ensure it does it better this time around,” said Son Chhay, AIPMC Vice President and Cambodian member of parliament.

“It’s all very well in principle, but in reality, as we have seen in Cambodia and other countries in the region, a flood of investment leads to all manner of rights abuses, including slave labor and land grabbing. Even if the laws are put in place, we still have the major problem of enforcement. Corrupt leaders and those with the power and the weapons are likely to be the winners while the people will be the losers.”

Despite the easing of sanctions, the United States should use its existing leverage to pressure and assist the Myanmar government to continue with its reform process, and call for further improvements, including, the release of all political prisoners, an end to military activities in the ethnic territories and entering into inclusive political dialogue with ethnic groups, as well as instituting legislative and constitutional reforms to bring Myanmar in line with international democratic norms.

AIPMC supports the special measures applied by the US State Department on investments in Myanmar, which require U.S. individuals and entities making new investments of more than $500,000 to submit annual reports to the State Department on issues such as human rights, workers’ rights and environmental stewardship. AIPMC also welcomes the requirement of US companies to report annual payments exceeding $10,000 made to Myanmar government entities.

A definitive list of regulations and rules dictating how US companies can do business in Myanmar and with who must also be drawn up and enforced to ensure US companies do not fuel human rights abuses with their investments. These decisions should be made in close consultation with nongovernmental agencies.

The US State department must work closely with civil society groups on the ground to get a true picture of how these investments and companies are really operating and if they are fuelling human rights abuses. More importantly though, the Myanmar government requires massive assistance and pressure to develop the necessary legislation to protect human rights, while civil society should be empowered to act as a watchdog, and sufficient legislation must drafted to ensure penalties and legal action is taken against companies where abuses are proven to be taking place.

“From Washington things may seem clear, but on the ground, doing business in Myanmar remains a murky prospect and transparency is a major issue. We spoke with many groups from a wide range of actors on our recent trip to Burma and many expressed their concerns about unregulated investments and human rights and labor and environmental violations,” said Eva Kusuma Sundari, AIPMC president and Indonesian Member of Parliament.

“The Myanmar government is not yet in a position to enforce ethical business laws, so the international community, including ASEAN, and civil society groups must take on a role of watchdog. As a minimum, the U.S and other governments must enforce the same standards they do at home on entities from their respective countries doing business in Myanmar.”

For further information and interview requests please contact Agung Putri Astrid on +62 81514006416, or by email at info.jakarta@aseanmp.org.

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