Burma’s businesses still lack transparency: MCRB

Burma’s businesses still lack transparency: MCRB

Probing Burma’s largest businesses on their commitment to transparency, the Myanmar Centre for Responsible Business (MCRB) has found that the majority of domestic firms are unwilling or unable to disclose information on their own human rights standards.

In a report released on Tuesday, MCRB scored and ranked sixty firms by their online presence, which the centre insists is a defining element in a business’ commitment to overall transparency. The report focused on firm’s willingness to divulge information pertaining to anti-corruption initiatives and human rights, safety and environmental protection policy and records.

MCRB found that on the whole, companies fared poorly in the human rights category. According to the report, even the top two overall ranked firms, Kanbawza Bank and Parami, a natural resources conglomerate, failed to provide detailed information on rights records.

The 2015 opening of the Burmese stock exchange should be the crowning moment for a rapidly modernising business community. However, as the government reviews outmoded laws — such as the 1913 Companies Act — and encourages the development of Burmese businesses, serious procedural concerns remain over large-scale domestic enterprises.

The report highlighted the general failure of firms to publicise any information in regards to land acquisition, resettlement and compensation plans. In fact, only the third overall ranked firm, Max Myanmar, was willing or able to disclose details of compensation payments made to displaced landholders.

[pullquote]”…even if [businesses] talk the talk, do they walk the walk?” — Vicky Bowman[/pullquote]

Max Myanmar, a conglomerate owned by military “crony” Zaw Zaw, has been previously implicated in forced relocations in Rangoon’s Dagon Seikkan Township.

Max Myanmar is also a chief investor in the Kaladan Multi-Modal Transit Transport Project, a combined highway and waterway project that will traverse Arakan and Chin states into India. A rights group called Kaladan Movement said that the 134 million dollar project “has been implemented without an adequate community consultation process, and with no efforts made to achieve the free, prior, informed consent of affected communities.”

“I think it’s important not to refer to them [MCRB’s highest ranked firms] as the top ethical companies. These are the most transparent companies,” MCRB director Vicky Bowman told DVB.

What we haven’t been able to do through the survey is check that even if they talk the talk, do they walk the walk,” said Bowman, a former British ambassador to Burma. “However, the assumption is that if they are being transparent about the issues, then they are more likely to be practicing them on the ground.”

In 2012, the centre ran a similar rule over international firms investing in Burma. Scores on that survey ran from the most transparent foreign investor, Statoil with a score of 8.3, to Bank of China, which registered 1.1. Only 13 of 60 Burmese companies surveyed in Tuesday’s report were able to better Bank of China’s score.

Furthermore, MCRB considers 25 of those surveyed to be “not at all transparent”, as they have no web presence. That list includes Union of Myanmar Economic Holdings, a military-owned firm that holds joint ownership of the controversial Latpadaung copper mine.

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Such a poor level of accessible information remains of significant concern to international investors, particularly those based in countries such as the United States, which retains some  barriers for American businesses engaging in Burma.

MCRB’s report makes mention of the US Reporting Requirements for American firms investing in Burma. That document insists that a lack of information made publicly available by Burmese companies has led to foreign investment contributing to “corruption and the misuse of public funds” and “the erosion of public trust and social unrest… which has lead to further rights abuses and repression by the government and military.”

Dr Aung Thura, of Burma-based consultancy firm Thura Swiss, stressed that domestic businesses will need to conform to international best practices to attract foreign partners.

“I think more and more companies that need to raise capital from foreign partners understand that they can’t do it without being transparent,” he said.

“We’re now seeing some companies who are very willing to display their accounts, for example, to investors. We’re seeing this more and more from local companies.”

He added that companies do remain reluctant to provide detailed information beyond immediate commercial dealings.

For Bowman and the MCRB, transparency must extend further than the business community.

“We want to offer these companies a chance to interact with civil society organisations in particular,” she said. “We want not to just be about company transparency and accountability, it has to be about how all of society works with companies to make them more responsible.”

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