Yesterday President Obama announced that he was extending economic sanctions on Burma (Myanmar), which was followed by a statement from Secretary of State Clinton that a general license would be issued for most U.S. investment in Burma. This follows liberalization of business and investment relations with Burma by the European Union. While EarthRights International (ERI) does not take a position on economic sanctions, ERI does believe that civil society and affected communities within Burma should be consulted in developing an international investment regime that ensures respect for human rights and the environment. We are concerned that the process of suspending or lifting of sanctions should not occur too rapidly for adequate consideration of the unique challenges of doing business responsibly in Burma.
While Burma has undergone substantial political reform in the past two years, many of the concerns regarding international investment contributing to human rights abuses and environmental destruction remain. In particular, investment projects that rely upon the Burmese military and militia for security or other services, that confiscate or otherwise acquire land for investment use, or that take place amid ongoing ethnic conflict, are of particular concern. No businesses should enter into relationships with, provide any support for, rely upon, or coordinate with the Burmese military and militia, whose human rights record remains deplorable. ERI's experience in the natural resources sector, including monitoring abuses associated with the Yadana, Yetagun, and Shwe natural gas pipeline projects, has shown that abuses on such projects are ongoing and inevitable.
We are pleased that Secretary Clinton stated that the U.S. Government would "implement mechanisms to promote responsible investment and deter abuses." International investment in Burma should occur only where it follows internationally-accepted standards for human rights and environmental protection, including the OECD's Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, and the relevant Performance Standards applied by the International Finance Corporation. Because rights-protection institutions within Burma are still weak, the home countries of multinational businesses should ensure compliance with these standards through binding legal regimes. Such regimes should include requirements for adequate impact assessments, plans for mitigating or avoiding any human rights or environmental abuses, ongoing monitoring of projects, and public transparency for all such materials.
President Obama's statement suggested that the U.S. Government would work to establish a framework that "encourages transparency and oversight," but the Government should require, not merely encourage, these essential elements. And, although Secretary Clinton noted that businesses should "create a grievance process easily accessible to local communities," victims of abuse should have access to remedial mechanisms in businesses' home countries, including the United States, and penalties for breaches should include loss of the privilege of investing in Burma.
Foreign investment can be a constructive part of economic development to benefit all the people of Burma, but these benefits will not be realized if investment contributes to, rather than mitigates, ongoing human rights and environmental abuses in Burma.