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Foreign firms face tough choices over Myanmar unrest

Mehdi CHERIFIA
·4-min read
Japanese automaker Suzuki temporarily suspended operations at its two local plants in Myanmar shortly after the military coup.

Pull out, suspend or stay? Foreign firms in Myanmar face some tough choices over how to respond to the military coup and subsequent violent crackdown on pro-democracy protesters in the country.

More than 520 people have died in daily demonstrations since the military overthrew elected leader Aung San Suu Kyi on February 1, halting Myanmar's decade-old experiment in democracy.

The coup and the junta's subsequent actions have triggered international condemnation and US sanctions.

The junta has vested interests in large swathes of the country's economy, from mining to banking, oil and tourism.

NGOs have urged companies to review their presence as the military dramatically ramps up its use of lethal force against protesters.

"We want the decisions taken to be targeted against the junta and to penalise the population as little as possible," said Sophie Brondel, coordinator at French-based pro-democracy group Info Birmanie.

"The message has never been to say that we should not be present in Myanmar, but to cut ties with the army," she told AFP.

- Staying put -

In Myanmar since 1992, French giant Total has no intention of quitting, but insists that its local subsidiary "conducts its activities in a responsible manner, in respect of law and of universal human rights".

While NGOs have urged firms to stop financing the junta, Total paid around $230 million to the Myanmar authorities in 2019 and another $176 million in 2020 in the form of taxes and "production rights", according to the company's own financial statements.

The military controls Myanmar Oil and Gas Enterprise (MOGE), which has partnerships with Total and US rival Chevron and generates annual revenues of around $1.0 billion from the sale of natural gas.

Chevron told AFP the monies paid to MOGE were tax payments and that it holds only a minority stake in the gigantic offshore gas field, Yadana, operated by Total.

French hotel chain Accor, which operates nine hotels in Myanmar and is planning half a dozen more, also has no plans to leave or cut ties with its local partner, Max Myanmar Group, which is not under sanctions.

Accor, which employs a local workforce of around 1,000, sees "tourism as the last link between the people of Myanmar and the rest of the world," a spokeswoman said.

Danish brewer Carlsberg said it would reduce production capacity as beer consumption in Myanmar is on the decline, but it has no plans to quit. It employs 500 people locally.

Carlsberg told AFP it has had "no contact" with the new authorities.

British tobacco giant BAT said that more 100,000 local jobs depended on its investment, operations and partnerships in Myanmar and it would stay, while prioritising the security and well-being of its workers.

- Suspending operations -

French energy giant EDF announced the suspension of its activities in Myanmar where it is involved in a $1.5-billion project to build a hydroelectric dam, Shweli-3, alongside consortium partners, Marubeni of Japan and Ayeyar Hinthar of Myanmar.

In a letter to the NGO Justice for Myanmar, EDF said that "the respect of fundamental human rights... are a pre-condition for every project in which we take part."

Japanese automaker Suzuki also halted operations at its two local plants shortly after the military coup. The factories assembled 13,300 vehicles in 2019, primarily for the domestic market.

But Suzuki, present in Myanmar since 1998, reopened the facilities again a few days later and intends to build a third production site in the country.

Myanmar is also a key manufacturer in the clothing industry and groups such as Italy's Benetton and Sweden's H&M have suspended all new orders from the country.

Benetton chief Massimo Renon hopes the move will send "a clear and concrete signal".

Giesecke and Devrient, a German company that supplies products to make Myanmar bank notes, suspended deliveries to state-owned Security Print Works this week due to the "ongoing violent clashes".

- To quit or not to quit -

At least one company has quit.

French renewable energy group Voltalia said it will "end its activities" in Myanmar, where it has been present since 2018 and powered 156 telecom masts in rural areas.

The group, which employs 43 people in Myanmar and generates less than one percent of its output there, pointed to the "political and humanitarian crisis" in the country.

Japanese brewer Kirin said it would cut business ties with the military with which it operates two local breweries, accusing the junta of acting "in contradiction" to its principles on human rights.

But the firm said it currently has no intention to pull out completely from a market that accounts for around two percent of its overall turnover.

bur-mch/aue/spm/lth