On August 6, 2012, the U.S. government opened a 60-day public comment period on its new “Reporting Requirements for Responsible Investment in Burma.” Along with the ban on Burmese imports that was renewed by Congress last week, the reporting requirements are all that remains of a U.S. sanctions framework designed to push the Southeast Asian nation toward peace, the protection of human rights, and political reform.
The recently announced reporting requirements will apply to any U.S. person or entity whose aggregate new investment in Burma exceeds $500,000. In our preliminary review of the requirements, we have identified serious limitations that may pose challenges to corporations and investors seeking to uphold their responsibility to respect human rights and take steps that support peace and stability in Burma. Fundamentally, we fear that after-the-fact reporting without accountability mechanisms cannot prevent or deter complicity by U.S. corporations in human rights abuses. Other limitations include:
- A lack of comprehensive and current information about those responsible for human rights abuses and corruption in Burma, including the outdated and incomplete list of individuals and entities with which U.S. persons are prohibited from doing business (known as the “Specially Designated Nationals” or “SDN” list);
- The authorization to engage in business dealings with Burma’s state-owned Myanma Oil and Gas Enterprise (MOGE), despite its recognized lack of transparency and accountability;
- The lack of public and investor access to information about financial, operational, legal, and reputational risks contained in the reports but identified by reporting corporations as “privileged and confidential;” and
- The absence of specific standards or guidance for the practical implementation of these requirements.
The public comment period, which extends through October 4, offers an opportunity for investors and other concerned people to make our voices heard. Stay tuned. We will be joining together with our allies to provide further analysis, tools, and suggestions to facilitate your comments.
Over the past several months, United to End Genocide has sounded an alarm about the risks of a business rush into Burma. In April, a project of United to End Genocide, the Conflict Risk Network, released the report, “Not Open for Business: Despite Elections, Investor Risk Remains High in Burma.” The Network includes nearly 100 institutional investors, financial service providers and related stakeholders. In May, a dozen institutional investors collectively managing more than $115 billion in assets sent a letter to President Obama raising concerns about the risks posed by a broad relaxation of U.S. sanctions and the lifting of the ban on financial transactions and investments in Burma.
Despite these warnings, last month the Obama Administration cleared the way for new U.S. investment in Burma. The Treasury Department issued general licenses allowing for new investment in Burma, as well as the exportation and re-exportation of financial services to Burma. The relaxation of sanctions does not authorize new military investment, and U.S. investors are still prohibited from dealing with certain individuals and entities included on the United States’ Specially Designated Nationals (SDNs) list.
At this point, only history can judge the impact of recent broad and rapid changes in U.S. policy toward Burma. We hope that the international community retains sufficient leverage to encourage continued reforms and pressure the Burmese government to end human rights abuses, including in resource-rich ethnic regions such as Kachin and Arakan states.