Myanmar's new government inherits problems and promise of special economic zones

by Vani Sathisan and Bobbie Sta. Maria
Friday, 1 April 2016 08:09 GMT

Myanmar's new President Htin Kyaw greets officials during a dinner reception in ceremony in president palace at Naypyitaw, Myanmar, March 30, 2016. REUTERS/Ye Aung Thu/Pool

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Are special economic zones in Myanmar rewarding investors, and not the communities displaced to make way for them?

More than half a century of military rule ostensibly comes to a close on April 1, when Daw Aung San Suu Kyi’s National League for Democracy officially takes over Myanmar’s government and the first civilian President since 1962 starts leading the nation.

Despite these extraordinary developments, daunting challenges remain in Asia’s second poorest country. Myanmar’s military still controls key governmental functions; the country is barely emerging from decades of civil conflicts; rule of law and institutions are weak; the economy is fragile and dominated by crony companies; corruption, and human rights abuses remain stubbornly persistent.

In opening up, Myanmar has embraced special economic zones (SEZs) – designated areas in which businesses receive tax, tariff and regulatory benefits - as a means to encourage economic trade and investment heavily promoting three major zones; Thilawa, Dawei and Kyaukphyu.

But in all three, affected communities have repeatedly complained about the need to address human rights and environmental harms caused by the projects, including land, air, and water pollution, and the displacement and loss of traditional forms of livelihoods of thousands. Communities in these zones have also voiced concerns about a lack of transparency, inadequate consultation and participation of affected local communities in project-related decisions, and insufficient compensation for losses.

While SEZs are supposed to drive Myanmar’s economic growth, at the moment it looks as if this growth disproportionately rewards businesses and investors, and not the communities displaced and impoverished to make way for them.

Business & Human Rights Resource Centre and the International Commission of Jurists are engaged in efforts to encourage greater public accountability among foreign companies for their human rights impacts - including by highlighting concerns of affected communities with businesses, providing guidance, and tracking companies’ investments and efforts to avoid negative impacts - but a concerted response by government is vital.

The National League for Democracy taking office is crucial, because whilst they support the Thilawa zone, they have said they will review the continuation of the Dawei and Kyaukphyu zones including by speaking with relevant stakeholders. We hope that the new regime will not lose sight of its commitments in its Election Manifesto, including encouraging “foreign investment in line with the highest international standards”, and laying down “paths for economic cooperation that can bring sustainable long-term mutual benefits”.

The problems surrounding SEZs are significant and urgent. This period of re-evaluation provides the new government an opportunity to fulfill its duty to protect affected communities. They can build upon the limited progress of the previous government in legislating rights protections by ensuring that laws are properly implemented. For example: Myanmar law now requires environmental impact assessments (EIA) for investments in certain industries. The newly approved EIA Procedures cover environmental and social impacts and incorporate international best practices on involuntary resettlement and indigenous peoples. The new National Land Use Policy refers to participatory, transparent and accountable processes.

The new government must amend the SEZ law to ensure that investment projects are planned, designed and undertaken with respect for the fundamental principles of participation, transparency and accountability. While land issues are undoubtedly complex, the prevalence of land-related grievances presents a challenge for the new government to take bold steps towards the protection of land rights, including addressing illegal land acquisitions and making real efforts to meet international standards for consultation, compensation and resettlement.

By design, SEZs are meant to lure businesses through friendly conditions. But this goal must not be pursued at all costs, especially not in ways that will lead to irreversible environmental damage, abuse of rights, or further impoverishment of locals. The challenge to govern carries with it the responsibility to listen, respectfully engage, and ensure the protection of the human rights of all people in Myanmar

Vani Sathisan (International Legal Advisor, International Commission of Jurists) and Bobbie Sta. Maria (Senior Researcher for Southeast Asia, Business & Human Rights Resource Centre)