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Military-backed firms must be transparent: CSOs

Jan 31. 2016
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By Khine Kyaw
Myanmar Eleven

1,030 Viewed

YANGON - Though Myanmar managed last month to publish its first-ever Extractive Industries Transparency Initiative report, civil society organisations believe that there is still a lot of room for improvement, particularly in the part of inflows to milita
The Myanmar Alliance on Transparency and Accountability, a coalition of 518 organisations, said last Wednesday that the next EITI report to be published in the second half of this year would be more transparent. 
Military-back firms like Union of Myanmar Economic Holdings Ltd (UMEHL) and Myanmar Economic Corporation (MEC) were mentioned at the press conference.
Ye Thein Oo of the Myanmar-China Pipeline Watch Committee said military-backed firms should be on the same playing ground with other state-owned enterprises and private companies. Military-backed firms usually take a lot of advantages in doing business at the cost of the national budget and state revenues.
“The firms are always lacking transparency. In some cases, we noticed that their way of doing business is beyond legal procedures. 
“We notified the Ministry of Mines and called for investigation. But even ministry officials dare not investigate them even though they know that the firms’ activities are illegal,” he said.
Moe Moe Tun of Sein Lan Pyin Oo Lwin said most of the activities of UMEHL, which is doing business largely in Hpakant, the capital of Kachin state, are not in line with the mining law. 
“But even authorities dare not investigate if their activities are legal or not. And they enjoyed tax exemptions. They have to pay for taxes starting from the 2015-16 fiscal year. So, the state has lost a lot of revenues for that,” she said.
No one took responsibility for the loss of human lives in Hpakant, she said.
Mining activities reportedly continued as usual after the landslides in December that left over 100 dead. 
According to Mata, military-backed firms need to be transparent with their rules and regulations, financial relationship with the government, shareholdings in mining and oil and gas companies, money injection to the national budget, social costs, costs to support infrastructure and debt settlements of the state, loans and grants from mining and oil and gas firms that are operating in Myanmar. 
Moe Moe Tun said civil society organisations (CSOs) had noticed a large sum of money was kept under the title “Other Budgets”, which many state-owned enterprises kept at the state-run Myanmar Economic Bank. 
CSOs did not have a chance to investigate what other budgets were and if they were really needed, she said. 
Myanmar’s extractive industries have been criticised for lacking transparency. In its October report, Global Witness said several ex-generals extracted money from the jade trade. It said the Than Shwe, Maung Maung Thein and Ohn Myint families hold multiple concessions that between them generated pre-tax sales of US$220 million (Bt7.9 billion) at the 2014 jade emporium, the official government jade sale, and $67 million at the 2013 emporium. It also said official emporium sales of army companies amounted to $180 million in 2014 and $100 million in 2013.
Myanmar’s application to join EITI in late 2012 is expected to improve transparency. In May 2014, its candidacy was approved, requiring the country to submit biannual reports on revenue generated from the industries. 
While the first report covered only three industries – oil, gas and mining – the second will be expanded to forestry, hydropower and fishery. 
Nine representatives from Mata are involved in the union-level EITI process. A stakeholder group was formed with 21 representatives from the government, CSOs and private sector. 
Moe Moe Tun said the licensing process should be urgently improved while the Mines Ministry should closely monitor if the licensees follow the procedures. 
“Some operators applied for a licence to explore 40 acres but in reality, the mining area covers 80 acres. They know perfectly well that nobody will come and investigate what they are doing on the ground,” she said.
Kyaw Thu of Paung Kuu said some operators are not the ones receiving licences.
Moe Moe Tun is optimistic that greater transparency is possible under the new government.

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