Aung San Suu Kyi signals change in Burma, but investors should proceed with caution
Changes in Myanmar (Burma) are hopeful. Aung San Suu Kyi, once the country's most famous prisoner, is visiting Britain for the first time in 24 years. But foreign investors operating in Myanmar will still face challenges upholding international standards for human rights.
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The Guiding Principles also clarify that all companies, including those operating in Myanmar, have a responsibility to respect human rights and conduct due diligence to ensure that their activities do not cause or contribute to harm, regardless of the conduct of the state.Skip to next paragraph
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In Myanmar’s case, conducting this due diligence on human rights poses a special challenge for companies because Myanmar’s government and local business have been closely intertwined. In such an environment, foreign businesses will need to undertake enhanced due diligence. This includes exercising caution about whom they obtain access to land from, how they gain that access, and how they conduct consultations with affected communities.
It also means ensuring that workers are able to form unions, are paid a fair, legal, living wage, and that no force is used in hiring workers or in their conditions at work.
Companies will also have to take concrete steps to see to it that their partners, local or regional, also adhere to international standards. They must also ensure that these partners are not implicated in any past conduct that may expose investors to complicity risks. Foreign companies need to take effective steps to conduct activities without discrimination, as well, particularly while operating in regions divided by ethnic conflict.
To achieve real progress, governments, businesses, and civil society will have to work together to find a responsible way forward for foreign investment in Myanmar. For starters, that means consulting with local actors as well as assessing potentially adverse human rights impacts on business activities. The home governments of foreign investors should provide clear guidance about the context in which companies will operate, including the human rights risks.
Equally important, home governments should make export finance and investment insurance conditional upon companies undertaking such due diligence and developing mitigating steps in case of potential harm.
Finally, governments, international bodies, and foreign investors must encourage the government of Myanmar to demonstrate its own commitment to more accountable governance.
Such a commitment should include participating in initiatives such as the Extractive Industry Transparency Initiative, which makes public the payments received from oil, gas, and mining companies. Myanmar should also subscribe to the Voluntary Principles on Security and Human Rights, which provide ground rules for the conduct of security forces protecting company installations.
Individually, these cooperative steps toward human rights compliance will be significant; collectively, they offer the potential for making Myanmar an example of how businesses can operate responsibly even in challenging environments.