Dancing With The Burmese Military Junta

Tuesday 1 April 2003, by David KHO

PHOTO: Impact Photos

A military junta has ruled Burma since 1962 and human rights there have progressively dete-riorated. While paying lip service to human rights to appease Canadian foreign policy, Canadian business is going full-tilt in Burma.

"Free Burma McGill is trying to get the university administration to divest from companies operating in Burma. These companies financially support a military regime which does not seek the welfare of its citizens," said Olivier Girard, spokesperson for the student group at Montreal’s McGill University.

It is a well-documented fact that the current military dictatorship continues to use draconian measures to keep itself in power and the population in check. It has tried to end the political life of democracy activist and Nobel laureate Aung San Suu Kyi, by refusing to acknowledge her victory in the election of 1990 and placing her under arrest. Released in 1995 following a sustained international outcry, she was re-elected General Secretary of the National League for Democracy - only to be placed under house arrest again in late 1996. Undeterred, Aung San Suu Kyi has appealed to the international community to halt foreign investment as an effective method of dealing with the military.

The World Responded

In response, the U.S. has banned all new investments in Burma and imposed visa restrictions on junta officials and their families. The European Union has imposed similar restrictions and excluded Burma from its Generalized Preferential Treatment. In a major foreign policy declaration in July 1997, then-Foreign Affairs Minister Lloyd Axworthy announced that the military regime was no longer eligible for General Preferential Tariff and the Canadian government had curtailed bilateral and multilateral aid through international agencies. Canada no longer offers any commercial packages or Export Development Canada (EDC) assistance, and has added Burma to the Area Control List - effectively forbidding the Canadian government and its subsidiaries from engaging in any commercial activity with Burma.

The results were tangible. Total foreign investment in Burma fell from U.S. $777.4 million in the previous year to U.S. $429.5 million in 1999. Yet, even at this reduced rate of direct investment, the human rights group Canadian Friends of Burma reported that Canadian companies were responsible for a part of this foreign investment. Further, despite Canada’s sanctions policy against Burma, total imports from Burma by private businesses actually increased by 201 percent from 1997 to 2000, according to the Canadian Trade Commission Service. The first quarter of 2001, however, registered a marked drop in Canadian imports. For its part, the Canadian government has steadfastly refused to ban all private Canadian businesses in Burma.

Canadian Trade Policy

In maintaining this approach, the Canadian government has not, in the words of Canadian Friends of Burma, "advanced specific policies to deal with the problem of Canadian business operations that contribute to human rights violations in conflict areas overseas." In fact, all foreign companies interested in doing business in Burma are told to deal with a junta-controlled holding company.

The mining sector receives the lion’s share of Canadian investment in Burma. Because these investments are made in a military dictatorship, "where mines are run by local enterprises and foreign companies which are not publicly accountable to shareholders, … public pressure applied to these projects can only be minimal," says London researcher Roger Moody. Rather than setting up a comprehensive sanctions policy to curb business conducted in Burma, the Canadian government has, in fact, done the opposite. Mining companies, for example, are encouraged to incorporate in the Yukon, allowed numerous tax and investment loopholes for foreign exploration and development, and accorded lax residency requirements for their directors.

Robert Friedland of Ivanhoe Mines, a Yukon-registered company operating in Burma, says that "in 1996, representatives of the company met with officials of the Canadian government in Ottawa [and] at no time did the government advise us against investing in Myanmar (Burma) or attempt to dissuade us from doing business in the country."

Export Development Canada (EDC) & Burma

EDC is Canada’s export-financing arm, which promotes Canadian technology in developing countries. As a Crown Corporation, it complies with Canada’s foreign policy and is accountable to Parliament but exempt from the government’s Access to Information Act.
Because private Canadian businesses fall outside of the trade ban, EDC has a free had in helping Canadian companies compete abroad. One of EDC’s principal mandates is to help Canadian exporters by providing financing to foreign companies (including Burmese) which want to buy Canadian products. EDC’s claims of transparency in its business conduct has been questioned by critics, who suggest that it be subject to the Access to Information Act. However, International Trade Minister Pierre Pettigrew claims that "the EDC is quite open and transparent, [and] what the critics are asking here is that we publicize commercially sensitive information of our clients and that, of course, is not something that is feasible." It looks like business as usual for Canada.

David Kho, special collaboration

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