BANGKOK -- A broad spectrum of human rights and humanitarian groups are voicing skepticism over the U.S. government’s decision to allow U.S. companies to invest in Burma, including its state-run oil sector.
The decision, announced by President Barack Obama on Wednesday, allows U.S. companies and financial services to conduct business in Burma for the first time in 15 years. It also enables U.S. corporations to partner with Myanmar Oil and Gas Enterprise (MOGE), a state-owned company.
Humanitarian and rights groups are focusing criticism on the easing of sanctions on Burma, and on the move to open U.S. investment in the country's oil and gas industry, viewed by many as a key source of revenue for past military governments.
Easing of Burma Sanctions
July 12, 2012: U.S. President Barack Obama eases economic sanctions while banning U.S. business contacts with Burmese military and keeping arms embargo in place.
April, 2012: European Union suspends trade and economic sanctions for one year after lifting some visa restrictions in February. The EU arms embargo remains in place.
June, 2012: Australia lifts remaining travel and financial sanctions, but keeps arms embargo in place.
April, 2012: Canada eases economic sanctions but maintains arms embargo and assets freeze on specific individuals.
Advocacy groups, including the U.S. labor federation AFL-CIO, Freedom House, Human Rights Watch, the Institute for Asian Democracy, and other groups, have called for the U.S. to maintain the restrictive economic measures designed to pressure the former military government to undertake political reforms and improve its human rights record, including the release of opposition leader Aung San Suu Kyi and up to 2,000 other political prisoners.
Phil Robertson, Human Rights Watch deputy Asia director, says oil-and-gas sector transparency and accountability in Burma -- also known as Myanmar -- remains a concern.
“When U.S. investment is going in by opening across the board, they should have really had some stronger preconditions," he said. "They should have an updated sanctions list and binding prohibitions in the oil-and-gas sector, which we view as problematic.”
The U.S. says the easing of sanctions, in line with the European Union and Australia, sends a “strong signal” of U.S. support for Burma’s program of political reform under President Thein Sein.
But Robertson says granting rights to invest in the oil industry is seen as a setback by rights groups and appears to come after pressure from U.S. oil companies.
“It looks like the U.S. has caved in to [American] industry pressure," he said. "Aung San Suu Kyi said that it was not a transparent enterprise. In fact, there were a lot of problems with the sector, so it was surprising that the U.S. government included it on the list and allowed investment to take place -- to focus on that oil-and-gas extraction sector.”
Another organization expressing concern includes Washington-based non-profit Earth Rights International, which says the U.S. policy fails to abide international best practices on human rights, environmental performance and financial transparency.
But U.S. business representatives say the presence of U.S. companies in Burma can assist in raising labor and environmental standards, as well as corporate responsibility.
Burma’s main investors in recent years have been led by China and South East Asian nations such as Thailand and Singapore. But new sources of investment, especially for much needed infrastructure, are viewed by those backing the new U.S. policy as necessary to boost Burma’s economy, which, following decades of military misrule, is one of Asia's poorest.
A new foreign-investment law, expected to be in place by September, includes land-access reforms and guarantees of a “level playing field” for local and foreign companies.
The U.S. decision comes as Japan normalizes economic relations with Burma after a 25 year freeze on new loans. Japan’s fifth largest trading firm, Marubeni, this week announced a new contract to overhaul a gas-fired power plant it built prior to the tightening of sanctions.