Chinese investments in Myanmar's energy, mining sectors of concern

Sep 30, 2008, 8:33 GMT

   Bangkok - Myanmar has attracted 69 Chinese companies to its energy and mining sectors, raising environmental and security concerns for local populations, EarthRights International (ERI) revealed Tuesday.

   According to a survey conducted by ERI, a non-profit activist group, there are now 69 Chinese companies involved in Myanmar's hydropower, oil, natural gas and mining sectors compared with only 26 known companies in 2007.

   The Chinese firms have invested in some 90 completed, current and planned projects, according to the US-based ERI, which has been influential in the past in mounting campaigns against investments by US oil multinationals Chevron and Unocal in Myanmar, deemed a pariah state among western democracies because of its poor human rights record and refusal to implement political reforms.              The ERI report, aptly titled China in Burma: The Increasing Involvement of Chinese Multinational Corporations in Burma's Hydropower, Oil and Natural Gas, and Mining Sectors, was based primarily on government statements, English and Chinese language news reports, and company press releases.

   While most US and European multinationals have in recent years shunned Myanmar, which is under economic sanctions, Asian multinationals have shown little restraint in investing in the resource-rich country, also known as Burma.          

   'India, Thailand, Korea, Singapore, and China are among the Asian countries with the largest investments in Burma's hydropower, oil and natural gas, and mining sectors. Foreign direct investment in Burma's oil and natural gas sectors, for example, more than tripled from 2006 to 2007, reaching 474.3 million dollars, representing approximately 90 per cent of all foreign direct investment in 2007,' said the ERI report.

   It noted that investments in Myanmar's energy sectors provide billions of dollars in financial support to the country's military junta, which devotes at least 40 per of its budget to military spending.

   'We've repeatedly seen foreign companies coming into Burma with disregard for local people and the environment,' said Ka Hsaw Wa, executive director of EarthRights International. 'Given what we know about development projects in Burma and the current situation, we're concerned about this marked increase in the number of these projects.'

   Past projects, such as the Unocal/Total overland natural gas pipelines, were accused of using forced labour and evicting villagers from their land without compensation.

   Field reports on new projects are hard to come by given Myanmar's restrictions of free press and the difficulties involved in getting access to remote areas.

    'We're concerned about the lack of information about these projects available in the public domain,' said ERI researcher Alek Nomi, principal author of the research.

   The ERI survey found that at least 45 Chinese multinationals have been involved in approximately 63 hydropower projects in Myanmar, the largest of them 7,100-megawatt Tasang Dam on the Salween River.

   The project, which is under construction, is highly controversial as it has yet to conduct an internationally acceptable environmental impact study and the proposed dam promised to displace thousands of Karen villagers.

   The Karen are an ethnic minority group that has been fighting the Myanmar military for the autonomy of the Karen State for the past six decades.

    'In April 2008, Sinohydro, China Southern Power Grid Co, and China Three Gorges Project Co signed a strategic cooperation framework agreement for the development of the hydropower potential of the Salween River,' said the report.

    At least 16 Chinese multinational companies, including the three major Chinese oil and natural gas companies Sinopec, China National Petroleum Corporation (CNPC), Sinopec, and China National Offshore Oil Corporation (CNOOC), have invested in 21 onshore and offshore oil and natural gas projects in Myanmar, the ERI said.