RANGOON — More than two months after the United States published the
first reports by American companies investing in Burma, big name brands
such as Cisco, Coca-Cola, PepsiCo and Visa remain absent from the
filings, which are posted on the website of the US Embassy in Burma.
American companies putting US$500,000 or more into Burma or investing
in the gas and oil sectors are required to file reports outlining steps
taken toward “responsible investment,” including details such as what
human rights and worker rights policies have been implemented in the
course of the investment and what due diligence has been undertaken on
local partners. Among other requirements, reports must outline any
communication with the Burma Army and detail payments exceeding $10,000
made to Burma government bodies.
As of this week, the published list features the same five company
reports that were first posted in early July, when the report publishing
process kicked off. Those reports, of varying detail, were by Capital
Guardian Emerging Markets Equity DC Master Fund, Emerging Markets Growth
Fund, Crowley Marine Services, Hercules Offshore, and Capital Guardian
Emerging Markets Restricted Equity Fund for Tax-Exempt Trusts.
American companies were first banned from investing in Burma in 1997,
but the ban was lifted in the middle of last year as part of a wider
relaxation or removal of most US sanctions, as Burma reforms politically
and opens its economy to Western and Japanese investment. The changes
come after years of relative isolation, during which most
investment—largely based on natural resource extraction—came from
neighbors such as China and Thailand. In several cases these investment
projects were tainted by human rights abuses such as forced displacement
or were tied to Burma’s military.
The reporting requirements are an effort to assuage concerns that the
ending of sanctions allows American businesses to cut deals with
companies complicit in rights abuses in Burma—amid ongoing bans on deals
with the Burma Army, the Ministry of Defense and prominent “crony”
businessmen who remain on a US blacklist. “The United States remains
concerned about the protection of human rights, corruption, and the role
of the military in the Burmese economy,” says the “Doing Business in
Burma” section of the US Embassy website.
Of 15 American companies doing business in Burma and contacted by The
Irrawaddy, 10 had responded to questions about the reporting
requirements at the time of writing. Of those 10, only General Electric
(GE)—thought to be the first American company to invest in Burma after
the ban was lifted last year—said it had filed a responsible investment
report to the US government.
Of the others to respond, all but one declined to confirm whether a
report had been filed or will be filed. A MasterCard spokesperson told
The Irrawaddy that “the current nature of MasterCard’s business in
Myanmar does not fall under the US government’s ‘Burma Responsible
Investment Reporting Requirements’.”
Prior to publication, reports are reviewed by the US government,
which retains one version of each company’s report, while another
version is posted on the US Embassy website. Trade secrets or commercial
or financial information deemed by the company as “privileged or
confidential” can be withheld from the public report.
For 2013, the first year of the reporting requirements, there is a
rolling submission deadline of 180 days from when the company reaches
the half-million dollar investment threshold. From 2014, all reports
will be submitted on July 1 and published afterward.
Trade between and investment involving the two countries is
negligible. As of Aug. 31, of over $43 billion worth of foreign
investment into Burma since 1988, just over $243 million was of American
origin, according to the Myanmar Investment Commission, a Burma
government body that vets would-be foreign investors.
According to the Office of the United States Trade Representative,
“in the first four months of 2013, US exports were $92.6 million,
dominated by US exports of aircraft parts and vehicle exports. During
the same span, US imports from the country were $3.6 million, including
fish products and furniture with wooden frames.”
There are moves to boost bilateral commerce, however. Coinciding with
the visit by Burma President Thein Sein to the United States in May,
the one-time enemies signed a Trade and Investment Framework Agreement,
following last year’s overturning of a ban on most imports to the United
States from Burma. The US-Asean Business Council, which helps American
companies do business in Southeast Asia, brought a large delegation of
prospective American investors to Burma in July, while earlier this year
the US Chamber of Commerce visited Burma with a similarly high-profile
group of well-known American companies.
Anthony Nelson, spokesman for the US-Asean Business Council, told The
Irrawaddy that the reporting requirements were not holding up major
investments and could in fact prove an asset to American companies
trying to access Burma. “Our reputation as responsible investors who
perform valuable CSR is a major piece of our competitive advantage,” he
said.
However, the Council believes the requirements, as currently laid
out, are a hurdle for small- and medium-sized businesses thinking of
setting up shop in Burma, and could be allowing rivals from other
Western countries, as well as Japan, which is backing major
infrastructure projects in Burma, to steal a march on American
companies.
“So far, companies have had a difficult time getting answers on what
constitutes an investment for the purposes of the requirement, and are
reluctant to expand small, representative operations to the point where
they will qualify for the reporting requirements when their legal teams
don’t feel they have a firm grasp on them,” Nelson said.
source: The Irrawaddy
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