ICAR, Amnesty International USA, U.S. Campaign for Burma Statement

16 June 2016

Mr. John Kerry Secretary of State U.S. Department of State

OMB Control Number: 1405-0209 Information Collection Title: Reporting Requirements on Responsible Investment in Burma

Dear Secretary Kerry,

The International Corporate Accountability Roundtable (ICAR) is a coalition of leading human rights, environmental, development, and labor organizations working to ensure corporations respect human rights throughout their global operations.

Amnesty International is a global movement of more than seven million people working to ensure the protection and realization of human rights worldwide.

The U.S. Campaign for Burma is a U.S.-based organization dedicated to empowering grassroots activists around the world to promote democracy, human rights, justice, and national reconciliation in Burma.

We write with great concern in regards to the proposed amendment to the “Reporting Requirements on Responsible Investment in Burma.� Established in 2013, the Reporting Requirements serve an essential function in advancing U.S. policy goals in Burma, which aim to support political reform to establish a democratic state respecting human rights and the rule of law.1 The Reporting Requirements allow the U.S. Department of State (DOS) to collect information that is vital in assessing whether new investments in Burma support or undermine this policy agenda. DOS may also use the information collected as a basis to assist U.S. companies in addressing any adverse human rights impacts of their operations in Burma. In addition, the Reporting Requirements promote transparency, which allows civil society groups to more effectively monitor and engage with companies operating in Burma. This in turn ensures accountability and promotes responsible business practice by U.S. companies.

1

60-Day Notice of Proposed Information Collection: Reporting Requirements for Responsible Investment in Burma, 80 Fed. Reg. 73867, 73868 (Nov. 25, 2015).

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The original adoption of the Reporting Requirements was a remarkable achievement. However, the proposed amendment’s change to the investment threshold for reporting from $500,000 to $5 million2 is a huge step backwards and will undermine the effectiveness of the framework. Since the adoption of the Reporting Requirements, the number of companies reporting has been steadily increasing.3 Raising the threshold tenfold will undo the progress that has been made, work against the positive attributes of the Reporting Requirements, and seriously weaken the framework as a whole. This increases the risk that U.S. investments and operations will have adverse human rights impacts, undermining progress on political and economic reform. As such, we strongly oppose the proposed raising of the investment threshold, and we urge the DOS to maintain the original level of $500,000.

Increased Investments in a Continuously Complex Environment

This is a critical time for the United States to continue showing leadership by ensuring business investments in Burma are socially and environmentally responsible. Total foreign direct investment in Burma nearly doubled in 2015, growing from 4.1 billion USD to 8 billion USD.4 Two-way trade between the United States and Burma has also increased significantly, with U.S. exports to Burma more than doubling and U.S. imports increasing by over 60 percent in 2015.5

At the same time, challenges remain in advancing the rule of law and human rights in Burma.

With the newly elected government, there are positive signs. Nevertheless, it is in its early days.

Even with positive political changes, corruption is rife, the regulatory environment is weak, and preventing and addressing human rights abuses caused by business operations remain a key challenge.6 Human rights abuses relating to the Monywa copper mining project in the Sagaing region, as documented in Amnesty International’s 2015 report, “Open for Business? Corporate Crime and Abuses at Myanmar Copper Mine,”7 is a fitting example that shows how weak (or an absence of) legal protection can lead to serious human rights violations and abuses. Throughout the development of the Monywa project, thousands of villagers have been forcibly evicted from

2

30-Day Notice of Proposed Information Collection; Reporting Requirements on Responsible Investment in Burma; Correction, 81 Fed. Reg. 32381.

3 Reporting Requirements, EMBASSY OF THE U.S. RANGOON, BURMA, http://burma.usembassy.gov/reportingrequirements.html (last visited 10 June 2016).

4 Aung Hla Tun, Myanmar 2014/15 FDI Swells to $8.1 Bln – Govt Agency, REUTERS (Mar. 25, 2015, 2:47 AM), http://www.reuters.com/article/myanmar-investment-idUSL3N0WR25Q20150325.

5 U.S. CHAMBER OF COMMERCE, U.S.-MYANMAR COMMERCIAL RELATIONS: THE NEXT PHASE (2016), available at https://www.uschamber.com/sites/default/files/us_-_myanmar_commercial_relations_-_the_next_phase_-.pdf.

6 Yanghee Lee, Report of the Special Rapporteur on the Situation of Human Rights in Myanmar, 4, 15, U.N. Doc. A/HRC/31/71 (Mar. 18, 2016) available at https://documents-ddsny.un.org/doc/UNDOC/GEN/G16/055/13/PDF/G1605513.pdf?OpenElement; Global Witness, Jade: Myanmar’s Big State Secret (2015), available at https://www.globalwitness.org/en-gb/campaigns/oil-gas-andmining/myanmarjade/.

7 Amnesty International, Open for Business? Corporate Crime and Abuses at Myanmar Copper Mine, February 2015, available at www.amnesty.org/en/documents/ASA16/0003/2015/en.

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their homes.8 In the early days, the project discharged hazardous waste materials in 1995 and 1996 into a local river, which raised serious concerns over its environmental impacts and twenty years later has yet to be properly cleaned up.9 More recently, police operating in the mining area have violently repressed civilians who protested against the project in 2012 and 2013.10 The police used excessive force again in December 2014, including the intentional lethal use of firearms in breach of international human rights standards, killing Daw Khin Win and injuring other protesters. Other high-profile incidents of excessive use of force by the police include against student protesters in Letpadan in March 2015.11 As part of the project, production at the Letpadaung mine started in March 2016 under the new government, which triggered another wave of protest of hundreds of villagers just last month.12 Amnesty International is currently conducting follow-up research to assess whether conditions in the Monywa mining area have improved.

As demonstrated above, in such a time of increased investment without an effective legal framework at the national level, it is critical to maintain a robust Reporting Requirements framework instead of weakening it.

Benefits to U.S. Business

The Reporting Requirements do not create an undue burden on U.S. companies. In fact, the framework benefits them. The Reporting Requirements mainly ask for information that is already at U.S. companies’ disposal, such as basic information on business activities and their corporate policies and procedures. Other disclosure requirements are mandated under existing law. For instance, companies must already track their payments to governments to be in compliance with the “books and records” provisions of the Foreign Corrupt Practices Act.13

According to a U.S. Chamber of Commerce report published this month, U.S. companies and investments have been well regarded in Burma, which is reflected in the fast increase of trade between the United States and Burma since the easing of sanctions.14 Furthermore, U.S. brands have earned positive sentiments of the Burmese public by adhering to the “gold standard” of

8

Id. at 4.

Id. at 61.

10 Id. at 6; Shibani Mahtani & Myo Myo, China Woos Suu Kyi, Seeking a Fresh Start in Myanmar, THE WALL STREET JOURNAL (June 6, 2016, 10:53 PM), http://www.wsj.com/articles/china-woos-aung-san-suu-kyi-seeking-a-freshstart-in-myanmar-1465527182.

11 See Myanmar: Violent Police Crackdown Against Protesters Must End, AMNESTY INTERNATIONAL (Mar. 10, 2015, 11:48 AM), https://www.amnesty.org/en/latest/news/2015/03/myanmar-violent-crackdown-on-protesters/.

12 Ben Blanchard, After Myanmar Protests, China Says Companies Should Respect Laws, REUTERS (May 9, 2016, 4:32 AM), http://www.reuters.com/article/us-china-myanmar-mine-idUSKCN0Y00QR. 13 Human Rights Watch, Joint Comment on the Reporting Requirements on Responsible Investment in Burma, HUMAN RIGHTS WATCH (2012), https://www.hrw.org/news/2012/10/04/joint-comment-reporting-requirementsresponsible-investment-burma.

14 U.S. CHAMBER OF COMMERCE, U.S.-MYANMAR COMMERCIAL RELATIONS: THE NEXT PHASE (2016), p. 42, available at https://www.uschamber.com/sites/default/files/us_-_myanmar_commercial_relations_-_the_next_phase_-.pdf.

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investment, wherein business operations are socially responsible and respect human rights.15 This is precisely what the Reporting Requirements were established to do. As such, maintaining and strengthening the Reporting Requirements will further assist U.S. businesses and ensure that all existing and incoming companies in Burma uphold this “gold standard.�

In conclusion, we strongly urge the DOS to not increase the threshold for reporting, and to continue supporting transparency and responsible business. The objectives of the Reporting Requirements will not be met if the proposed change in the reporting threshold takes place.

We call on DOS to demonstrate U.S. government leadership by strengthening this important reporting framework at this critical juncture, rather than undoing the progress that has been made.

Please find annexed submissions made by the undersigned organizations earlier in January 2016.

Sincerely,

Amol Mehra Director International Corporate Accountability Roundtable (ICAR)

Adotei Akwei Managing Director for Government Relations Amnesty International USA

Larry Dohrs Chairman, Board of Directors U.S. Campaign for Burma

15

Id. at 43.

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25 January 2016 Bureau of Democracy, Human Rights, and Labor U.S. Department of State

OMB Control Number: 1405-0209 Information Collection Title: Reporting Requirements for Responsible Investment in Burma

To Whom It May Concern:

The International Corporate Accountability Roundtable (ICAR) is a coalition of leading human rights, environmental, development, and labor organizations working to ensure corporations respect human rights throughout their global operations.

In 2013, under President Obama’s leadership, the U.S. government established the “Reporting Requirements on Responsible Investment in Burma,” a framework for corporate engagement that seeks to promote human rights and encourage transparency and oversight in Burma. We, along with our member organizations, supported the implementation of the Reporting Requirements, and we write today to urge an extension of this critical framework.

We believe that the Reporting Requirements, albeit imperfect, are an essential means to advance U.S. policy goals in Burma, which the U.S. federal government has identified as “support[ing] political reform . . . towards the establishment of a peaceful, prosperous, and democratic state that respects human rights and the rule of law.”1 The Reporting Requirements allow the U.S. Department of State (DOS) to collect information that might not otherwise be available and that is essential in assessing whether new investments in Burma support or undermine U.S. policy goals. The DOS may also use the information collected via the Reporting Requirements as a basis to assist U.S. companies in addressing the adverse human rights impacts of their business operations in Burma. In addition, the transparency promoted by the Reporting Requirements allows civil society groups to more effectively monitor and engage with companies operating in Burma, which in turn further ensures accountability and promotes responsible business practices.

These functions were essential when the U.S. government first eased its sanctions on business investments in Burma in 2012, and they remain critical today. Even though there has been 1

60-Day Notice of Proposed Information Collection: Reporting Requirements for Responsible Investment in Burma, 80 Fed. Reg. 73867, 73868 (Nov. 25, 2015).

significant progress in terms of political reform in Burma, human rights abuses remain rife throughout the country, particularly in remaining conflict areas and with regard to ethnic minorities such as Muslim communities in Burma’s Rakhine State.2 As such, there is a particular need to ensure that U.S. investments do not exacerbate ongoing human rights abuses, either by directly or indirectly financing individuals and entities responsible for such abuses or by otherwise benefiting from activities linked to rights violations in the country.

As such, it is critical to renew the Reporting Requirements after their current term lapses on May 31, 2016. It is also essential that the renewal period be utilized as an opportunity to extend and strengthen the overall framework. This will ensure that the Reporting Requirements are effectively updated in light of the serious and ongoing human rights concerns that remain in Burma, as well as lessons learned during the first term of the Reporting Requirements. In doing so, ICAR strongly urges DOS to extend and amend the Reporting Requirement as follows:

1. Mandate human rights due diligence for companies operating in Burma, and require those seeking to enter Burma to publicly disclose both their human rights due diligence policies and their actual practices; 2. Make clear that the reporting requirements extend to the activities of a company’s subsidiaries, contractors, and business partners, and supplement references to “investment” with other trade relations such as those of a company with its suppliers, contractors, and subcontractors; 3. Require companies to prepare a single public report, as opposed to the current rule’s allowance of two versions (one for the U.S. government and the other for the public), and require the report to cover the full range of issues outlined in items 1 through 11 in the Requirement Requirements; 4. Ensure effective compliance with the Reporting Requirements by clearly stating the consequences for failure to report or failure to do so fully and accurately; and 5. Further enforce the Reporting Requirements by conducting spot checks or auditing, and report violators to the U.S. Department of Treasury’s Office of Foreign Assets Control.

Extended and strengthened as recommended above, the Reporting Requirements would not unduly burden businesses. Instead, mandatory and detailed non-financial reporting can lead to clear benefits to companies. Such disclosure requires businesses to know the human rights impacts of their operations, which in turn informs the company’s own policies, processes, and thinking and thereby improves human rights outcomes for businesses. 3 Indeed, research conducted by accounting firms Deloitte and Ernst & Young has confirmed such tangible benefits for companies that disclose non-financial information related to human rights and sustainability and further revealed that this information can also help investors understand issues related to corporate reputation and risk.4 Recognizing this demand, leading financial information providers 2

U.S. Department of State, Burma 2014 Human Rights Report 1-2 (2014), available at http://photos.state.gov/libraries/burma/895/pdf/BURMA2014HUMANRIGHTSREPORT.pdf.

3 Amol Mehra & Sara Blackwell, The Rise of Non-Financial Disclosure: Reporting on Respect for Human Rights, BUSINESS & HUMAN RIGHTS: FROM PRINCIPLES TO PRACTICE (Vol. 1, Issue 1, forthcoming April 2016).

4 See Value of Sustainability Reporting, ERNST & YOUNG & BOSTON COLL. CTR. FOR CORPORATE CITIZENSHIP (May 2013), available at http://www.ey.com/Publication/vwLUAssets/ACM_BC/$FILE/1304-

such as Bloomberg and Thompson Reuters have sought to incorporate human rights and sustainability information into their own analytics and reporting.5

In addition, extended and strengthened Reporting Requirements would align with and further contribute to the positive trend towards increased non-financial reporting that is currently taking place, both domestically and internationally. In the United States, this trend is illustrated by the passage of Section 1502 of the Dodd Frank Wall Street Reform and Consumer Protection Act (pertaining to conflict minerals sourced from the Democratic Republic of Congo and surrounding areas), increased enforcement of the Foreign Corrupt Practices Act, and the reporting obligations created through Executive Orders pertaining to government procurement.

In Europe, a recent directive enacted by the European Commission similarly mandates EU companies of a certain size to disclose information regarding policies, risks, and outcomes related to human rights, sustainability, and anti-corruption practices.6 International institutions have also sought to develop substantive and procedural standards for disclosures related to human rights and sustainability, including through the OECD’s Guidelines on Multinational Enterprises.7

We urge you today to extend, and strengthen, the Reporting Requirements on Responsible Investment in Burma. The Reporting Requirements further U.S. policy in Burma, are consistent with a useful domestic and global trend to improve human rights worldwide, and bring tangible value to companies and investors.

Sincerely,

Amol Mehra, Esq. Director International Corporate Accountability Roundtable amol@icar.ngo

1061668_ACM_BC_Corporate_Center.pdf; Disclosure of Long-Term Business Value: What Matters, DELOITTE (March 2012), available at http://www.deloitte.com/assets/DcomUnitedStates/Local%20Assets/Documents/us_scc_materialitypov_ 032812.pdf.

5 THE INTERNATIONAL CORPORATE ACCOUNTABILITY ROUNDTABLE (ICAR), “KNOWING AND SHOWING”: USING U.S. SECURITIES LAWS TO COMPEL HUMAN RIGHTS DISCLOSURE 22, available at http://icar.ngo/wpcontent/uploads/2013/10/ICAR-Knowing-and-Showing-Report4.pdf.

6 European Commission, Non Financial Reporting, http://ec.europa.eu/finance/accounting/nonfinancial_reporting/index_en.htm.

7 ICAR, supra note 4, at 21.

Call for Comments: Amnesty International Submission to US State Department on Burma Reporting Requirements 25 January 2016 I. Ongoing Need for Safeguards relating to Foreign Investment in Myanmar Myanmar is at a critical juncture when it comes to determining whether investment projects will benefit the wider population and be carried out in line with international human rights law and standards. Since 2011, some positive political and economic reforms made by the government led western states (including the USA) to ease sanctions that had previously been imposed on the country. This resulted in an increase in foreign investment. The historic general elections in November 2015 provide an even greater opportunity for the new government to prioritize much needed human rights reforms.

Despite this, the economy of Myanmar is still dominated by the interests of Myanmar’s military and a small number of powerful individuals known as ‘cronies’. For decades, military-led governments gave preferential access to business opportunities to those in or connected to the military - including the military-owned conglomerate, the Union of Myanmar Economic Holdings Limited (UMEHL). It is important to note that until today UMEHL remains on the list of “Specially Designated Nationals” as part of the US sanctions programme.1 The US Government must continue to enforce the “Reporting Requirements for Responsible Investment in Burma” (Reporting Requirements), as well as take steps to strengthen them. It is clear that poverty continues to be a problem in Myanmar and that investment has the potential to bring social and economic benefits to the people living there. As US companies continue to invest in Myanmar following the easing of sanctions, it is vital that they comply with their responsibility to respect human rights and that the US Government continues to use effective regulatory measures to ensure they do so. Without these, US companies risk exacerbating the human rights situation in Myanmar.

Amnesty International investigations in 2014-2015 show that foreign companies investing or operating in Myanmar are still causing or contributing to human rights abuses.2 Our research confirms that Myanmar’s regulatory framework continues to be very weak; the country still lacks basic legal safeguards to prevent business-related abuses. Land laws do not protect people against forced evictions and other abuses in the context of land acquisition for commercial uses such as mining. Despite reforms to environmental laws, Myanmar lacks both adequate standards and the technical capacity necessary to protect against the human impacts of pollution (e.g. health, livelihoods) caused by business.

Amnesty International has also documented human rights violations and repression by security

1

Office of Foreign Assets Control ("OFAC") of the US Department of the Treasury, Specially Designated Nationals List

(SDN), available at: www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx 2

Amnesty International, Open for Business? Corporate Crime and Abuses at Myanmar Copper Mine, February 2015,

available at: www.amnesty.org/en/documents/ASA16/0003/2015/en; see also summary briefing available at: www.amnesty.org/en/documents/asa16/0004/2015/en

forces, including in response to community protests against extractive projects.3 A particularly egregious example was the police’s use of white phosphorus munitions against monks and villagers who were peacefully protesting against the Letpadaung mine in central Myanmar in 2012. Amnesty International concluded that this act amounted to torture, and that the company operating the mine, Wanbao Mining, provided material assistance to the police.4 State investigations into such allegations are rare, perpetrators are seldom brought to justice, and there are no effective accountability mechanisms.

Amnesty International has called on other states that have companies investing in Myanmar to put in place safeguard measures to ensure that any company operating in the country respects human rights. The organisation sees the US Reporting Requirements as an important mechanism for achieving this goal, and as the leading precedent for other states to follow.

II. Corporate Human Rights Abuses Linked to the Monywa Mine Project Amnesty International has conducted a detailed investigation into illegality and related serious human rights abuses linked to the Monywa copper mining project, in Sagaing Region.5 The Monywa project is a cautionary tale of how weak (or an absence of) legal protection can lead to abuses in the context of extractive operations in Myanmar. The abuses and illegal activity span two decades and involve the Myanmar authorities and Burmese, Chinese and Canadian companies. There remains a significant risk of further abuses at Monywa, including forced evictions, environmental pollution, and the excessive use of force by police in responding to community protests.

The project has a long history of forced evictions. In 1996 and 1997, thousands of villagers were driven from their homes and farmland - without any due process, consultation, or payment of adequate compensation - when the government nationalised land to make way for the Sabetaung and Kyisintaung (S&K) mine, operated by the State-owned ME1 and a subsidiary of Canadian company Ivanhoe Mines (now Turquoise Hill Resources). Ivanhoe Mines could not have been unaware of the impact of the land acquisition on affected people, but neither it nor ME1 took any corrective action.

In 2011, the project was taken over by a Chinese company, Wanbao Mining, and the militaryowned Union of Myanmar Economic Holdings Limited (UMEHL). Between 2011 and 2014, more people were forcibly evicted from their homes and farmland after land was acquired for development of the Letpadaung mine. The authorities failed to meet necessary requirements under international human rights law. Wanbao’s subsidiary both provided material assistance to the Myanmar authorities and also directly engaged in forced evictions itself. Thousands of people remain at risk of forced eviction.

The government has also targeted activists and individuals who have opposed the Letpadaung

3

Amnesty International, Myanmar: Violent police crackdown against protesters must end, 10 March 2015; Amnesty

International, Open for Business? Corporate Crime and Abuses at Myanmar Copper Mine, February 2015 pp. 41 – 60 4

Amnesty International, Open for Business? pp. 49 – 52

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Amnesty International, Open for Business?

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mine and has repressed protests against it. On 29 November 2012 police used white phosphorus against villagers peacefully protesting against the mine, in an attack that left some people with severe and lifelong injuries. Amnesty International considers that this action amounted to torture, but no police officer or official has been investigated or prosecuted for their role in the attack. In another incident on 22 December 2014, Daw Khin Win, a farmer, was killed after police opened fire on protesters.

There are also ongoing concerns over the environmental impacts of the project. Hazardous waste materials were discharged from the S&K mine in 1995 and 1996 over a large area of land and into the local river. Up to present day the Government has allowed new mining operations to commence without ensuring a clean-up, and has left companies to self-monitor the environmental impacts of the new Letpadaung mine’s operations. The Environmental and Social Impact Assessment for the mine contains fundamental gaps and weaknesses.

UMEHL illegally set up and operated a sulphuric acid factory, to supply acid to the mining operations, for six years without obtaining permission from the government. UMEHL has abused the right to health of villagers who live about 200 metres from the factory, but the government has taken no action against the company and allowed operations to continue. Overall, the Government has shown an unwillingness to monitor or hold companies accountable and this has been exacerbated by the role of UMEHL in the project.

III. Upholding the Reporting Requirements Companies have a responsibility to respect all human rights wherever they operate. This is the prevailing global standard of expected conduct, as endorsed by the UN, governments and regional bodies and recognised in various international standards.6 Companies must carry out effective due diligence in order to identify, prevent and address actual or potential adverse human rights impacts resulting from their own activities or those of other parties with which they have a relationship.7 The seriousness of the ongoing human rights situation in Myanmar calls for enhanced human rights due diligence by any US business who is considering entering into investments or business relationships in Myanmar or has already done so. In some circumstances, this may mean that the company should decide not to pursue or continue that investment or relationship.

The US Burma Reporting Requirements are the leading precedent when it comes to home state’s acting to hold their companies to account for their investment practices in Myanmar. They indirectly provide for some human rights and environmental safeguards and this is essential given the proven unwillingness of the government of Myanmar to regulate companies for human rights abuses at the national level. Until these regulatory improvements are made, home states need to

6

See for example the UN Guiding Principles on Business and Human Rights

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The type and scale of due diligence will vary depending on the nature and context of the company's operations and the

risk of severe human rights impacts. As such, in certain circumstances, companies should be undertaking enhanced human rights due diligence to deal with the human rights risks specific to that situation.

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put measures in place to ensure that their companies operating there respect human rights.

In meeting these objectives, Amnesty International makes the following recommendations to the US Government: Recommendations to the US Government • • •

• •

Continue to collect data from US companies in line with the Reporting Requirements.

Undertake diplomatic efforts to encourage other western states to implement similar measures.

Strengthen the Reporting Requirements to require companies seeking to enter Myanmar to disclose publicly both their human rights due diligence policies and their actual practices.

Eliminate the $500,000 threshold for reporting investment in Myanmar.

Impose meaningful sanctions if businesses fail to carry out such requirements.

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