The military coup in Myanmar this week should sound alarm bells in corporate boardrooms around the world. Since Myanmar’s transition from decades of military dictatorship to a civilian government began in 2011, transnational businesses have cautiously reentered the country. But the coup highlights the question company directors should already have been asking: “Is our company directly or indirectly funding the Myanmar military?”
The human rights, reputational, and legal risks of continuing to do business with Myanmar’s military are immense. The Tatmadaw, as it is known, has been accused of genocide and crimes against humanity against Rohingya Muslims, and war crimes against other ethnic minorities. And now it has overthrown a civilian government that won a massive re- election, with over 80 percent of the vote, in November 2020.
Companies doing business in Myanmar have long had access to credible information about the military’s grave abuses and corruption. A 2019 United Nations report found that companies with commercial ties to the Myanmar’s military and its conglomerates, Myanmar Economic Holdings Limited (MEHL) and Myanmar Economic Corporation (MEC), “are contributing to supporting the Tatmadaw’s financial capacity.” The report said these companies are at “high risk of contributing to or being linked to, violations of human rights law and international humanitarian law.” The UN team’s recommendation was clear: companies operating or investing in Myanmar should not do business with “the security forces of Myanmar, in particular the Tatmadaw, or any enterprise owned or controlled by them, including subsidiaries, or their individual members.”
All companies—parent holdings and subsidiaries—should now re-evaluate their commercial ties in Myanmar and suspend any relationships with businesses linked to the military—some of which may soon be subject to targeted sanctions by the United States, United Kingdom, European Union, and other countries. They should also publicly disclose the names, addresses, ownership, and other relevant details about whom they do business with in the country. No consumers or investors should be directly or indirectly supporting the denial of the right of Myanmar’s people to choose their government and other military abuses, but it’s the companies themselves who have a responsibility to ensure they have no ties with Myanmar’s security forces, their individual members, or entities owned or controlled by them. Without these steps, company executives risk not only complicity with Myanmar military abuses, but losing the trust of their customers and investors as well.