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Natural resources are a fundamental component of the economy of Myanmar and the conflict that surrounds them impacts significant parts of the population. Control over resources, contested by Government forces and separatist groups, undermines an already uncertain national unity whilst poor working conditions and human rights abuses at and around extraction sites exacerbates divisions between the State and its population.
In recent years, conflict in Myanmar has centred around the movement for democracy and ethnic issues. The struggle for democracy, led largely by the internationally renowned Aung San Suu Kyi and her National League for Democracy (NLD), resulted in the end of the military junta in 2011 but this did not end conflict in the country. Instead, ethnic issues – including independence struggles of the Kachin and Shan peoples in the North, and the ongoing Rohingya crisis in Rakhine State – have continued.
Although not the primary cause of these conflicts, natural resources play a key role in exacerbating them. The extraction and transportation of Myanmar’s primary natural resources – jade, copper, oil, gas and hydropower – has worsened the situation in States such as Shan and Kachin, where conflict already exists, and created new problems through the building of resource infrastructure. Construction of mines, pipelines and dams have led to environmental degradation, large-scale land acquisitions and human rights infringements, while often simultaneously worsening pre-existing conflicts. This paper seeks to provide an overview of the resource-based conflict in Myanmar, including its origins and contemporary issues, before outlining potential avenues and options for resolution.
Myanmar’s jade trade was worth up to $31 billion in 2014, nearly half the national GDP.[2] However, a large proportion of this money is siphoned off through military corruption and cronyism, leaving little benefit for the local populace.[3] This industry, which includes the world’s largest jade mine at Hpakant, Shan State, is operated largely by military elites and “crony” companies[4].
Jade goes to market just once a year at the Jade and Gem Emporium in Nay Pyi Taw. In 2017, a total of 5,054 jade lots were sold for €438.58 million. The Government takes 15% of the revenue, with the other 85% going to the corporation which sells the jade. These corporations remain largely under the control of military elites.[5] Over half of the companies and traders at the 2017 auction came from China, with a more minor foreign presence from Thailand, South Korea and Canada.
As the mines are located in Kachin State, they have been caught up in the conflict between the separatists and the Government. The mines themselves are sites of conflict, with the army and ethnic armed groups fighting for control of the jade mines for financial gain, specifically taxation.[6] In 2012, fighting between the Kachin Independence Army (KIA) and the national army resulted in the displacement of an estimated 90,000 people. Estimates of fatalities range from 735 to over 5000.[7] [8] With the KIA still active, having not signed the 2015 National Ceasefire Agreement, the likelihood of recurrence is high.
Copper is the country’s largest export commodity,[9] and the industry has faced many accusations of abuses. The situation at the copper mines at Monywa is especially poor. The site includes Letpadaung mine, Myanmar’s largest, and S&K mine, another major pit. Since 2015 the site has been the subject of two Amnesty International investigations. Their reports highlight the scale of abuses, including large-scale land acquisitions and forced relocations, in addition to environmental problems associated with the mine,[10] such as water contamination and hazardous waste dumps. Amnesty’s report states that Myanmar “lacks the legal framework and technical capacity to adequately regulate environmental impacts of such a large and sensitive project,”[11] and as such these issues are not addressed. The project itself is owned by a subsidiary of a foreign state-owned firm. However, since 2011, the Myanmar Government has taken 51% of profits from the Letpadaung mine.
President Thien Sein set up a Commission in 2011 to look into the activities at the mine. The Commission’s findings were published in 2013, concluding that compensation and alternative accommodation for displaced peoples provided by the operating company were inadequate, and that environmental protection provisions were lacking. However, the Commission did not order the closure of the mine.[12] This decision was made in part to avoid the “problematic impact that this would have on Myanmar’s international relations.”[13] As of 2018, both production and protests continue.
Myanmar has 108GW of hydropower potential, the largest in South East Asia.[14] The Government sees this as a way to compensate the country’s relative lack of fossil fuel.[15] Most of this potential lies in the Irrawaddy river, where projects are underway. However, as the river basin houses 40% of the country’s population there are considerable fears over the effects of these dams.
The most infamous of these projects is the Myitsone dam, again in Kachin State. It is owned and operated by a Chinese state-owned company, with various Chinese firms having been involved at various steps in the process. Under plans signed off by the previous military regime in 2007, China would receive 90% of the electricity generated by the project.[16]
Locals fear they will lose their livelihoods and their land, and feel excluded from the benefits of the project, [17] leading to large-scale protests in 2011. In what was seen as a major concession to public demands at the time, the Myanmar Government suspended work on the dam for five years in September of that year and it has yet to be continued.
The suspension of works has been hailed as a symbol of Myanmar’s move away from autocracy and was described by one activist as “the first time since the 1962 Burmese coup d’état that the country’s political leadership took public opinion into account.”[18] This constituted a rare occasion in which the population’s views were adhered to, with positive results. However, this response was very much an isolated incident and must be viewed in the wider context of Government inaction on abuses both before and since; the mine’s closure is after all non-permanent.
Myanmar recently opened up its oil and gas sector to exploration and private investment, but this industry has come with both strategic and social problems, particularly concerning the construction of pipelines. The country has significant oil reserves, with 51 onshore blocks and 53 offshore blocks, including 26 deep water blocks available for exploration[19]. As of 2017, oil and gas had attracted $22.4 billion worth of foreign direct investment (FDI), approximately 32% of the total FDI entering the entire country. Enterprises must be approved by the Government before being allowed to invest in the country. The lack of industry-specific technology in the country means that there is uncertainty over the exact potential of Myanmar’s reserves, although this is changing with the introduction of foreign companies.
Participants in the fledgling industry include large international oil and gas corporations, along with other regional independent companies. The number of investors is likely to continue to grow. Myanmar also houses Chinese oil and gas pipelines, which deliver 12 million tonnes of crude oil as well as 12 billion cubic metres of natural gas to China’s Yunnan province per year. [20] The pipe bringing natural gas from Myanmar’s own Shwe project was completed in 2013, with its oil equivalent, which pumps oil from the Bay of Bengal, following in 2014.[21] [22] These pipelines are of strategic importance to China, allowing them to simultaneously bypass the Malacca strait and import energy to their Western provinces. They also heighten the geopolitical importance of Myanmar, increasing pressure on the Government to protect construction of the pipelines. The pipelines pass through areas under the control of armed separatist groups, primarily the KIA, both in Shan and Kachin States. In December 2017 a section of a pipeline was attacked by KIA militants. Without a ceasefire agreement, attacks such as this are likely to continue.
The construction of the pipelines also led to numerous abuses, most prominently large-scale land acquisitions, forced displacement, use of unnecessary force against villagers, and forcible conscription of villagers for projects related to pipeline construction and maintenance.[23] These methods remain consistent with those used at other infrastructure construction sites, with Human Rights Watch’s Arvind Ganesan describing the army as “notorious for using violence and coercion to secure areas slated for major investment projects and commonly demands forced labour to build associated infrastructure.”[24] There is precedent for legal challenges to these actions. In 2004, oil giant Unocal was forced to pay renumerations to a group of twelve villagers from a region affected by pipeline building, a sum “that ran into the millions of dollars” after they successfully sued the corporation for liability for the actions of the Myanmar army in the Californian courts.[25] Such action has not been repeated but provides precedent for locals who have suffered in similar ways in the intervening years.
According to the Constitution, the Government owns all land, and can thus lease it to whomever they choose. In 2012, the Government annulled the ‘Peasant Law’, which protected smallholders and the “tiller’s rights to the land.”[26] At the same time, they introduced the ‘Farmland Law’ and ‘Vacant Land Law’, which simultaneously gave more power to government to control the country’s land and ensured that no compensation would be due to landholders in the event of land redistribution. This land is often given to foreign direct investors for resource projects. This is a primary cause of resource conflicts, such as the Myitsone dam or Monywa mining project. These laws have led to the increased prevalence of large-scale land acquisitions in Myanmar in recent years and allowed the interests of companies to take precedence over those of the local populace. 1.75 million acres of land was “re-allocated” for agriculture alone in 2013.[27] The country’s Mining Law also cites the “existing law” (i.e. this legislation) as a way for the Government to acquire the land for mining projects.[28]
Since the 2012 reforms and removal of U.S. sanctions, foreign companies are increasingly entering Myanmar to extract its natural resources, primarily oil and gas, copper and gemstones. All outside investors in Myanmar, including oil, gas and mining companies, are subject to the Foreign Investment Law 2012 (updated in 2017), which is presided over by the newly established Myanmar Investment Commission.[29] Military influence within the Commission has facilitated cronyism in the awarding of contracts to continue. Combined with the lack of existing infrastructure, this has, according to Amnesty International, diminished effective safeguards to protect the human rights of the people of Myanmar.[30]
Another specific concern of the post-opening era is the heavy influence of China, which has gained a number of favourable deals amid accusations of cronyism. Land and resource project contracts are often awarded to those with connections to the military and backed by Chinese money and influence.[31] Issues such as the use of imported labour rather than local workers and the lack of benefits for the local community have led to such influence being seen as a problem. In the wake of numerous protests in 2016, a Chinese government official emphasised that “China is willing to work hard with Myanmar to properly implement these mutually beneficial cooperation projects, to promote local socio-economic development, to better benefit both countries and their peoples.”[32]
The Government, both pre- and post-reform, as well as rebel groups such as the KIA, have exploited natural resource extraction for both political leverage and finance, using both cronyism and conflict to take control of resource projects.[33]
While it is clear that the situation surrounding natural resources in Myanmar is complicated by pre-existing conflict and tensions, there remains scope for the situation to be improved through mediation, and the identification of mutually-beneficial solutions. Reduction in active conflict surrounding jade mines and pipeline control would benefit all parties, while an improvement in workers’ rights at mines would not only benefit the workers themselves, but a Government which is seeking to improve its standing on the international stage. Further damage to Myanmar’s international reputation, as seen previously with the Amnesty International exposés on human rights abuses in the country’s mines, would be detrimental to the progress made since the end of the junta. In order to tackle the complex and multi-faceted problems facing Myanmar’s natural resource industry, processes must be established that are independent and impartial, agreed upon by all actors, while providing something of a roadmap to tangible progress. In the cases of both the construction of natural resource infrastructure and mining, similar steps must be taken to ensure the effectiveness of the process. It is of fundamental importance that the insider mediators are at the core of elaborating solutions to existing problems, since ‘insiders’ are best able to identify and implement solutions to their own challenges, with outsiders playing the role of ‘supporters’ as and when required. Any external actor attempting to improve the situation must act as a facilitator or catalyst, as opposed to ‘leading’ any activities. NGOs operating in the country, such as PACT or the Myanmar Alliance for Transparency and Accountability (MATA), who are specialists in resource management, would also be useful parties to aid the processes, should one be required.
In the case of the construction of natural resource infrastructure, most pertinently pipelines and dams, this process must seek to establish a framework for proper and thorough consultation with all stakeholders before the outset of a project. A formalised process which consults local people would help prevent conflict and protest as seen at other sites throughout Myanmar, and increase the Government’s legitimacy. Firstly, as many of the pipelines are being built through territory that is contested between the Tatmadaw (Myanmar’s armed forces) and rebel groups, any process that aims to resolve conflict surrounding Myanmar’s jade industry must first seek to establish a ceasefire and end to hostilities between the army and groups such as the KIA. Seeking to calm the situation must be the first priority of any actor. Once that is achieved, a conflict assessment must be undertaken, involving representatives from each of the affected actors, which in this case would be the Government, the company seeking to build the pipeline or dam (who are usually aligned with, but not a part of, the Government), the local community, and any extra-governmental force that may be active in the region, such as the KIA. These representatives should be chosen by the actors themselves; for example, local people must decide who should take their seat at the table (in this case it is likely to be community leaders), thereby adding legitimacy to the process. These representatives should contribute to a conflict analysis, detailing the problems that the mediation process should seek to overcome, before attending an organised consultation at which problems are discussed and trust is built. This will be especially difficult in Myanmar, as public trust of the Government is especially low, and communities will almost certainly be sceptical of any process that forces them to air grievances in front of Government or Tatmadaw officials, however minor they may be; consequently, the assessment should seek to identify ‘milestones’ in the process that will need to be achieved in order to build trust between the parties.
The results of this consultation should then be turned into a tangible outcome, which in the case of infrastructure construction would be a formal consultation framework. This should be undertaken before the beginning of any new project and allow any issues to be highlighted before any construction exacerbates the problem. Preventative measures have been sorely lacking in this field and would be an immediate improvement on the current situation. Moreover, if projects are agreed upon rather than imposed, they are more likely to be structured to benefit all actors, and problems such as a perceived lack of benefit to the locals from the extracted resources and the use of foreign workers over local labour, would be eradicated.
The process regarding the mining industries is equally complicated, with the abuses that have occurred there being very well documented in the international press. As the fighting over control of the mines happens primarily in the interests of profiting financially from the jade, this issue would be at the forefront of the negotiations. It is crucial that local people are involved in the process, with individuals selected in a similar manor to that which has been previously discussed. As these communities have been living in the midst of a conflict between two actors of significantly greater power (the army and the KIA), it is important to remember the different levels of capacity between groups, and as such ensure that the communities are not put at risk by voicing their opinions, and are given sufficient space and clout in the negotiations to enact beneficial change of their own.
This would be equally true of any process seeking to improve the situation at the copper mines that garnered international attention for human rights abuses. Such a consultation is likely to pit locals against those who run the mines in which they work, as well as Government and Tatmadaw officials, in a very direct and overt way. This will be uncomfortable for them, and as such the differences in capacity must be carefully considered and managed, while maintaining an independent stance in the process.
Here, it is probable that a resolution will be more difficult to find, specifically in the case of jade, and a two-step process would be preferable, with a first priority being management of the conflict surrounding the mines before a second push towards a more medium- to long-term solution involving a sharing of the benefits of resources between the Government and separatists. However, it is vital that local communities are not forgotten amidst the posturing of these more powerful groups. Both of the problems that face local communities must be resolved. It must be ensured that resources benefit the people living around them, instead of being used by either armed group to fund further conflict. It is also fundamental that workers’ rights are enshrined in any solution, and not lost amidst the battle for control of the mines.
While conflict in Myanmar extends far beyond the confines of natural resources, making steps to resolve conflict and alleviate tensions in this field can prove to be the catalyst for wider improvement. The importance of natural resources to the Government, rebel groups and outside actors such as China have turned the country’s mines and infrastructure into a proxy battleground for control of the country on a larger scale, having a detrimental effect on Myanmar’s economic prosperity and, more importantly, the lives of people who are subjected to the violence and conflict. As the two are inherently linked, any progress towards the resolution of natural resource conflict in the country would also represent progress in resolving the other long-standing conflict that continues to blight Myanmar, and improve the situation for all of its people.
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