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French Bank Involved in Trail of Funds to the Burmese Dictatorship
by Matthew Smith
On Monday I spoke at the Paris launch of our new report documenting the serious impacts of the French oil giant Total, the American company Chevron, and the Thai company PTTEP in military-ruled Burma. Alongside Wong Aung, Coordinator of the Shwe Gas Movement, and Michel Roy, Coordinator of Publish What You Pay-France, we launched the new EarthRights International report, entitled Energy Insecurity: How Total, Chevron, and PTTEP Contribute to Human Rights Violations, Financial Secrecy, and Nuclear Proliferation in Burma (Myanmar) (“Energy Insecurity”). The 49-page publication documents corporate complicity in killings and forced labor in Burma; it demonstrates how the oil companies have generated over US $9 billion through their pipeline in Burma, and how the companies are concealing their payments to the world’s newest nuclear threat: the Burmese military regime.
While the report and press release focused global attention on the relationship between the oil companies and the Burmese junta, the journalists in France got something different. The conversation at the well-attended press conference on Rue du Bac included ERI’s revelation that the French bank BNP Paribas was and may still be involved in the controversial Yadana gas project in Burma. While there may be nothing illegal about the mega-bank’s role in the project (that’s for the French to investigate), it is of a special moral concern, and we thought it’d be of particular interest to the socially conscious citizens of France.
BNP is by any standard a force to be reckoned with. Ranked as the world’s tenth largest company, and the largest in France, the bank played an integral part in the controversial, multi-billion dollar revenue flows from Total and Chevron’s pipeline in Burma. In our research we uncovered that the “paying agent” for the pipeline project was BNP Paribas Jersey Trust in the Channel Islands. For the first time, we explained that the gas from Total’s pipeline is purchased by Thailand in US dollars, and how payments are distributed to the corporate partners (Total, Chevron, PTTEP and the dictatorship) by BNP Paribas Jersey Trust. BNP Jersey held the money in accounts in the Singapore branch of BNP Paribas, which was designated as the project’s “depository bank,” and from there distributed the money to the dictatorship, Total, Chevron, and PTTEP.
But BNP Paribas’s role didn’t end there, as we explained at the press conference. According to our research, the BNP Paribas branch in Singapore was, and may still be, not only the depository bank of the project but also the primary bank of the Burmese regime itself. The Burmese peoples’ gas revenue was transferred from BNP Jersey accounts in the BNP Singapore branch to other accounts at the same bank, accounts held by the military regime. What’s more, BNP Jersey acted as trustee for the military regime, holding at least one account for the regime in BNP Jersey’s own name. That means the Burmese military dictatorship relied on an account in the largest French bank to move its funds – funds which should be benefiting the people of Burma. but instead could be financing illicit weapons trade with North Korea, a recently-exposed illegal nuclear program, and other questionable purchases that would only be made in foreign currency.
Today, BNP responded in the French media to our claims by stating that they have not been the paying agent since 2008, but the bank refuses to disclose the current agent. When asked by an astute French journalist whether they still hold Burmese junta (SPDC) accounts in Singapore, BNP refused to comment. This ambiguity raises troubling questions regarding the financial role of a major French and international banking institution in facilitating the misuse of public funds. In our 2009 report Total Impact, we revealed that less than one percent of Burma’s gas revenues ever enter the Burmese state budget (source: “Staff Report for the 2008 Myanmar Article IV Consultation”), and instead the majority sits in foreign banks. ERI discovered, through confidential sources, that a large amount of this revenue found its way into the accounts of individuals closely associated with high-ranking members of the Burmese junta, and can be found in two of Singapore’s leading banks, the Overseas Chinese Banking Corporation (OCBC) and DBS Group. Both banks have denied these claims.
EarthRights International has recommended that the international community apply multilateral pressure on Burma’s petroleum sector, perhaps by cutting the regime off from international capital markets and/or freezing relevant accounts. My colleague Naing Htoo put it plainly: “The revenues should benefit the whole country, not only a select group of ruling soldiers."