Foreign investors silent or evasive on human rights commitments

Amid rights concerns linked to investment surge, too few companies publicly discuss their human rights policies and due diligence efforts, according to the finding of Business & Human Rights Resource Centre.

Myanmar Eleven February 23, 2015 1:00 am

After reaching out to over 100 companies, the centre said that only a handful of foreign companies investing in Myanmar were able to point to substantive actions when invited to publicly respond to questions on their human rights commitments in Myanmar.

Under the “Myanmar Foreign Investment Tracking Project”, only 57 of the 108 companies approached responded. Of total, only 24 of them referred to human rights policies with respect to their investments or activities in Myanmar. Even fewer described undertaking due diligence efforts prior to investing.

These findings echo concerns raised by local communities and human rights organisations that human rights issues are not being adequately addressed as foreign companies invest in the resource-rich country, said the NGO that tracks the human rights impacts of over 6,000 companies in over 180 countries.

“Foreign companies operating and investing in Myanmar must take practical steps to ensure that they are not involved in human rights abuses, and must use their influence to promote respect for rights among local partners and suppliers,” said Bobbie Sta. Maria, Southeast Asia researcher and representative, Business & Human Rights Resource Centre.

He stressed that publicly engaging companies in human rights commitments is an important first step.

“While it does not necessarily reflect the companies’ actual practices, it encourages them to ensure that human rights considerations are written into business plans, and provides affected stakeholders with a starting point for meaningful engagement.”

Last year, Myanmar attracted over US$5 billion in foreign investment. Yet, in the Corruption Perceptions Index, among 175 countries, it was ranked the 156th in the latest survey released by Transparency International in December. Among Asia Pacific nations, Myanmar is the third most corrupt nation. The 2014 ranking showed a slight improvement from a year earlier, when the country ranked 157th out of 177 countries. In 2012, when 174 countries were included, Myanmar was ranked the 172nd, with the 15 score.

The tracking project was designed to respond to the need for increased transparency, a necessary element of responsible business practice in Myanmar. It aims to ensure that stakeholders, especially local people, have access to human-rights related information on companies and are able to engage with these companies in the manner they see appropriate.

To complete the tracking, the centre wrote to foreign companies investing or operating in Myanmar in the extractive, manufacturing, agriculture, tourism, finance, construction, and information and communications technology sectors. It sought public disclosure of: the nature of their business in the country, their policies regarding key human rights issues, their human rights due diligence measures, and contact information that local communities could use to raise concerns.

Some companies showed through their responses that they are leading in the area of human rights due diligence in Myanmar, and have provided useful guidance for other companies.

Among the stronger responses came from oil and gas company BG Group, which explained its cross-functional approach to implementing its human rights policy; adidas and Coca-Cola, which detailed not only their due diligence process prior to engagement, but also their on-going efforts; and Telenor Myanmar, which cited a local system of reporting grievances related to sustainability issues.

It turned out that the response rate of companies with headquarters in Europe the Americas is the highest, at over 65 per cent, while that of companies headquartered in Asia and the Pacific is 35 per cent.

Response rate

Agriculture sector: 100% (3 out of 3 companies)

Banking, finance, audit & advisory services: 37.5% (6 out of 16)

Information & communications technology; Telecom & electronics: 66.7% (10 out of 15 companies)

Manufacturing & distribution; Conglomerates: 57.1% (16 out of 28 companies)

Oil, gas, mining & energy: 50% (16 out of 32 companies)

Construction, engineering & utilities: 44.4% (4 out of 9 companies)

Tourism & transport: 40% (2 out of 5 companies)

Source: Business & Human Rights Resource Centre

Among the Asian companies that responded is Wanbao Mining, which has been facing a series of human rights allegations in relation to its Letpadaungtuang mine. While it did not respond to the questions one by one, it used the survey as a platform for explaining its community efforts, including land compensation and impact assessments.

Business & Human Rights Resource Centre also announced that it is hosting a roundtable of civil society leaders from Myanmar to assess the responses, and discuss possible ways to get more companies engaged and to check whether stated policies are being implemented in practice.

“Too many foreign companies investing in Myanmar are not doing enough to address the risk of causing or contributing to human rights abuses. The inability of most companies contacted to disclose their human rights commitments is worrying. Foreign companies are entering a country in transition where their responsibilities towards people and communities are extensive, and where enhanced human rights due diligence and transparency are especially important in taking a leadership role and influencing local partners,” said Irene Pietropaoli, a researcher for the project.