US Reporting Requirements Take Effect, More Needed
May 24, 2013
Companies investing in Burma should disclose how they plan to deal with the very serious human rights risks they face. But the real test will be how companies on the ground actually address the abuses that have frequently accompanied major investments.
Lisa Misol, senior researcher on business and human rights

(New York) – American companies investing in Burma should not let new US government reporting requirements lull them into complacency on human rights concerns. The US “Reporting Requirements on Responsible Investment” in Burma went into effect on May 23, 2013.

Doing business in Burma involves various human rights risks that the US rules do not fully address, Human Rights Watch said. These include the lack of rule of law and an independent judiciary, major tensions over the acquisition and use of land, and disregard of community concerns in government-approved projects. The military’s extensive involvement in the economy, use of forced labor, and abusive security practices in business operations heightens concerns. Corruption is pervasive throughout the country.

“Companies investing in Burma should disclose how they plan to deal with the very serious human rights risks they face,” said Lisa Misol, senior researcher on business and human rights at Human Rights Watch. “But the real test will be how companies on the ground actually address the abuses that have frequently accompanied major investments.”

Under the new US government reporting requirements, all US businesses investing more than US$500,000 in Burma must report annually on their policies and procedures to address human rights, labor, corruption, and environmental risks associated with their projects or supply chains. They also must disclose their payments to the Burmese government and any arrangements they make for security or to acquire land. Risk assessments and communications with the military must be disclosed to the US government, but not the public. The first reports are due on July 1.

The US government’s investment reporting requirements on Burma are valuable but should be made stronger, Human Rights Watch said. Governments in Europe, Japan and elsewhere also should mandate public reporting and additional rights protections for their companies investing in Burma.

Despite important changes that have occurred in Burma over the past two years, the government of President Thein Sein continues to use repressive laws to undermine peaceful protests against projects that impact on livelihoods and land. A recent example is the government’s decision to prosecute demonstrators who held a peaceful protest on April 19 on Maday Island in western Burma’s Arakan State against a natural gas project and construction of associated infrastructure.

In November, the government violently cracked down on people protesting a copper mining project in northern Burma. Major infrastructure projects and land acquisitions for companies have also generated controversy involving both companies and the Burmese military in land seizures.

Human Rights Watch said in a recent report that telecommunications companies risk being linked to human rights abuses if they enter the Burmese market before adequate protections are in place. Telecommunications operators from 13countries are participating in the tender.

US companies are potential bidders on lucrative investments in oil and natural gas fields. The Burmese government opened a round of bidding for 30 offshore fields on April 11. Companies must submit offers by June 14.

Human Rights Watch called on US businesses to publish the results of human rights or social and environmental impact assessments as well as remediation plans, neither of which must be disclosed under the new US reporting requirements.

“Investors in Burma need to act cautiously to avoid becoming involved in rights abuses and corruption,” Misol said. “Investments should only proceed on the basis of independent and credible risk assessments, thorough consultations with affected communities, and clear plans to minimize risk factors and remedy problems.”