It is common to find young people working in factories in Rangoon. Credit: Mon Mon Myat/IPS

By Carey L. Biron
WASHINGTON, Jun 12 2014 (IPS)

U.S. companies newly operating in Myanmar have until the end of the month to file official reports detailing the actions they’ve taken to ensure that their investments comply with safeguards around land, human rights and other concerns.

Such ‘due diligence’ reporting was a key compromise between activists and the U.S. government after Washington lifted sanctions on U.S. investments in Myanmar (formerly Burma) in mid-2012. Yet rights advocates here who have looked at the first round of disclosures are warning that most companies are failing to file strong reports while some are refusing to engage in the process at all.

“Responsible U.S. investment has the potential to further the U.S. policy goal to support ‘the establishment of a peaceful, prosperous, and democratic state that respects human rights and the rule of law’,” notes the U.S. Campaign for Burma, a prominent watchdog group here, in its first-ever analysis of the new reporting.

“[…] Burma doesn’t yet have the infrastructure necessary for protections. We’re very concerned that the labour market is going to be worse in Burma than in other places.” -- Jennifer Quigley, executive director of the U.S. Campaign for Burma.
The group says its findings are meant to encourage investors “to make forthright disclosures, manage risks, commit to responsible stewardship and transparency, and engage with civil society.”

Of the nine reports by six companies that have been filed with the U.S. State Department thus far, the U.S. Campaign for Burma says only a one, from Coca-Cola, is satisfactorily thorough. Coca-Cola told IPS in a statement that when it re-entered the Myanmar market in mid-2013 after more than 60 years, it undertook the longest and most in-depth due diligence process in the company’s history.

“From the very outset of our re-entry into Myanmar, Coca-Cola went to great lengths to integrate respect for human rights into all of our business activities,” Rehan Khan, the general manager of Coca-Cola Myanmar, said in the statement. “We hope these efforts contribute to an industry-wide culture in Myanmar of ethical and responsible business development.”

Other U.S. investors do not yet appear to have gone to such lengths. The U.S. Campaign for Burma rates two companies, Western Union and Clipper Holdings, as “questionable” based on their reporting, while three others – Capital Group Companies, Hercules Offshore and Crowley Marine Services – are described as “irresponsible”.

The two questionable companies are criticised for filing incomplete information, while Hercules and Crowley are no longer operating in Myanmar and didn’t file at all. Capital Group, meanwhile, filed a report suggesting that the requirement does not cover its “passive” investments in Burmese companies, though activists say no such exemption exists.

“The whole [reporting] process seems to be quite a mess,” Jennifer Quigley, the U.S. Campaign for Burma’s executive director, told IPS. “It’s very frustrating how many companies are trying to skate by with the absolute minimum amount of disclosure – or to disregard this responsibility entirely.”

Spirit of the law

The due diligence reporting requirement came about following debate over how the United States would lift its ban on U.S. investment in Myanmar, which at the time was seen by officials as tentatively opening up following a half-century of military rule.

Rights advocates urged the administration of President Barack Obama not to allow U.S. investments in certain sectors – in particular in extractives and large-scale agriculture – due to concerns over longstanding abuses.

In the end the government decided that no sector would be off limits, but rather that companies would be required to file annual reports on their efforts to ensure that international standards were being applied around their investments.

Investors are thus required to file such a report six months after new investments reach 500,000 dollars, or following any investment in the oil and gas sector. Thereafter, annual reports are due at the beginning of July.

From a watchdog’s perspective, however, a key gap has remained in this policy: the extent to which corporate policies would be extended to local business partners. Foreign companies, after all, are required to partner with local partners, many of whom have longstanding ties to the military, yet Quigley says the reporting on this issue has been vague.

“The U.S. administration has only stated that the ‘spirit of the law’ is supposed to extend to complete transparency around naming Burmese partners,” she notes. “But from these reports it appears that companies are not complying with that spirit.”

Just three of the six companies have named local partners, and each of these identities has raised concerns among rights groups.

Meanwhile, several prominent U.S. companies that have recently re-engaged in Myanmar – including Ford, GE, Halliburton and PepsiCo – have so far failed to file due diligence reporting at all. While the companies claim the requirement doesn’t cover their actions, the U.S. Campaign for Burma disputes this.

GE told IPS it hasn’t yet reached the 500,000-dollar investment threshold, though other companies were unable to offer a response by deadline. The U.S. Treasury would ultimately levy penalties for any such delinquency, but a Treasury spokesperson declined to comment.

New labour floor

The reporting deadline is arriving just as Gap Inc., the clothing company, has announced that it would be moving some of its operations to Yangon factories, becoming the first U.S retailer to do so. At the U.S. Embassy in Yangon on Monday, U.S. officials stated that the company would be partnering with USAID, Washington’s main foreign aid agency, as well as CARE International, a humanitarian group, to invest in Myanmar’s “social and economic growth”.

“Through partnerships, such as this one today, we are working together to ensure that communities benefit from an economy re-entering the international marketplace,” Chris Milligan, the director of USAID’s Myanmar mission, said at the event, according to a release. “Through this effort and other initiatives, we are encouraging responsible investment to improve the welfare of all people of this country.”

Yet Gap has also indicated its potential interest in a contentious economic zone outside of Yangon known as Thilawa. Co-funded by the Japanese government, Thilawa is the farthest along of multiple SEZs currently being planned by the Myanmar government.

The project has already run into significant concerns around plans for the relocation of thousands of people.

“We really need to get this right the first time around, because the biggest concern we’re hearing is that Burma is going to be the new ‘labour floor’,” Quigley says.

“Yet the international community won’t realise it, because Burma doesn’t yet have the infrastructure necessary for protections. We’re very concerned that the labour market is going to be worse in Burma than in other places.”

END

Amidst growing new threats of potential conflicts over fast-dwindling water resources in the world’s arid regions, the United Nations will commemorate 2013 as the International Year of Water Cooperation (IYWC).

Courtesy of the United Nations

But Maude Barlow, chairperson, Council of Canadians and a former senior advisor on water to the president of the U.N. General Assembly in 2008-2009, warns the U.N.’s water agenda is in danger of being hijacked by big business and water conglomerates.

“We don’t need the United Nations to promote private sector participation under the guise of greater ‘cooperation’ when these same companies force their way into communities and make huge profits from the basic right to water and sanitation,” Barlow told IPS.

At this time of scarcity and financial crisis, she said, “We need the United Nations to ensure that governments are fulfilling their obligations to provide basic services rather than relinquishing to transnational corporations.”

The Paris-based U.N. Educational, Scientific and Cultural Organisation (UNESCO), which has been designated the lead U.N. agency, formally launched IYWC at a ceremony in the French capital Monday.

In New York, Secretary-General Ban Ki-moon warned of the new pressures on water, including growing populations and climate change. One-third of the world’s 7.1 billion people already live in countries with moderate to high water stress, he said.

“Competition is growing between farmers and herders; industry and agriculture; town and country,” Ban said. Upstream and downstream, and across borders, “We need to cooperate for the benefit of all now and in the future… Let us harness the best technologies and share the best practices to get more crop per drop.”

Back in December 2010, the 193-member General Assembly adopted a resolution declaring 2013 as the IYWC, following a proposal by Tajikistan.

The 2013 World Water Day, which will take place on Mar. 22, will be dedicated to water cooperation.

Barlow told IPS big water corporations have gained influence in almost every agency working at the United Nations.

The CEO Water Mandate, a public-private sector initiative launched by the United Nations in July 2007 and designed to assist companies in the development, implementation and disclosure of water sustainability policies and practices, puts corporations such as Nestle, Coca Cola, Suez and Veolia directly into a position of influence over global water policy and presents a clear conflict of interest, she said.

“For-profit private companies cannot uphold the public interest if it conflicts with their bottom line,” said Barlow, who is also founder of the Blue Planet Project.

Even the World Water Development Report is now advised by an industry group on “business, trade, finance and involvement of the private sector,” she added.

Tom Slaymaker, senior policy analyst on governance at the London-based WaterAid, told IPS the United Nations recognised the “human right to water and sanitation” back in 2010.

“But today over 780 million lack improved water supplies and 2.5 billion lack basic sanitation facilities,” he added.

The 2013 International Year of Water Cooperation will be a critical year for the United Nations to reflect on why universal access has not yet been achieved, he said.

Slaymaker said it’s also time to reflect on the kind of political leadership and new forms of partnership that are required to accelerate progress towards universal access as part of the emerging post-2015 development framework of the United Nations.

According to the United Nations, the primary objective of IYWC is to raise awareness, both on the potential for increased cooperation, and on the challenges facing water management in light of the increase in demand for water access, allocation and services.

Since the General Assembly recognised the human right to water and sanitation, a number of countries, including Mexico, Kenya, Bolivia, The Dominican Republic, Rwanda, Ethiopia, Ecuador, El Salvador, The Netherlands, Belgium, the UK and France, have either adopted laws recognising the right to water or amended their constitutions to do so.

The Vatican recently recognised the human right to water and added that “water is not a commercial product but rather a common good that belongs to everyone.”

And last June, all 193 member states signed the Rio+20 Declaration which includes the recognition of the human right to water and sanitation as a universal right.

Specifically zeroing on the role of the private sector, Barlow told IPS that corporations are among those pledging their support for IYWC.

Aguas de Barcelona, the water company at the heart of a fierce debate in Spain over control of drinking water, is participating, she pointed out.

So are “corporations who fought us on the right to water are now scrambling to claim it in their own image”.

She quoted Nestle as saying that 1.5 percent of the world’s water should be put aside for the poor and rest should be put on the open market.

If Nestle gets its way, she argued, there will one day be a water cartel similar to big oil, making life and death decisions about who gets water and under what circumstances every day.

“But at least we have this recognised and acknowledged right that no one should be allowed to appropriate water for personal gain while others die from an inability to pay for water,” she said.

With time, “we will build consensus around the right to water and the understanding that water is a common heritage and a public trust.”

Olympic torch arriving at Tretherras School, Newquayon. Credit: Bobchin1941/CC by 2.0

By Isabelle de Grave and Stephanie Parker
NEW YORK, Jul 21 2012 (IPS)

As the 2012 London Olympics gears up to open on Jul. 27, criticism of the longstanding partnership between the Games and sponsor McDonald’s has stolen a small portion of the limelight.

It’s not only civil society activists protesting the fast food giant this year, but local politicians.

“London won the right to host the 2012 Games with the promise to deliver a legacy of more active, healthier children across the world,” the Green Party’s Jenny Jones, who recently proposed a motion to exclude McDonald’s, Coca-Coca-Cola and others from the Games, told the 25-member Labour-dominated London Assembly.

”Yet the same International Olympic Committee that awarded the games to London persists in maintaining sponsorship deals with the purveyors of high-calorie junk that contributes to the threat of an obesity epidemic.”

The McDonald’s marketing strategy means that investment in sporting education goes hand in hand with the sale of low-priced, high-calorie fast food. In the UK, the company is offering up to 117,000 dollars to local football clubs.

“McDonald’s anticipated the criticism around its junk food 30 to 40 years ago. It spent those decades building a structure and good will to deflect criticism about the health impact of its products,” Sara Deon of Corporate Accountability International told IPS, highlighting McDonald’s sponsorship of the Games as a clear example of this.

McDonald’s has been an official sponsor of the Olympics since 1976. The company recently had its contract extended by the International Olympic Committee (IOC) to 2020.

Coca-Cola has also been a partner of the games since 1926. According to Benjamin Seeley of the International Olympic Committee, the company “sponsors more than 250 physical activity and nutrition education programmes in more than 100 countries”.

The Olympics rely on such commercial partnerships for more than 40 percent of revenues, and McDonald’s and Coca-Cola are two of the leading contributors.

McDonald’s did not respond to repeated requests for comment on the quality of its food in relation to the dietary needs of adults and children, and criticism of its Olympics sponsorship.

However, physicians and nutrition advocates have also expressed concern over both companies as official sponsors, particularly in the context of rising obesity in the UK.

There have been plans to boycott McDonald’s sponsorship of the games by civil society campaigners who deem it unworthy of inheriting the prestige of the Olympics as a supplier of fat, sugar and manipulative marketing initiatives.

Ceci Charles-King, an advocate for food justice, told IPS, “I worry about the message (sponsorship) sends to children and adults. McDonald’s is hydrogen, salt and empty calories. Coca-Cola is sugar, fructose corn syrup and empty calories.”

The Academy of Royal Medical Colleges recently declared that sponsorship by the fast food giant sends the wrong message to people in the UK, which has the most overweight population in Europe with 22 percent of Britons now considered obese.

When a customer goes to the U.S. McDonald’s website to look at the nutritional value associated with “happy meals” for kids, it only shows the calorie, fat and protein intake. The webpage omits saturated fat, salt, vitamin and sugar content and the user must navigate to another section to find the information.

“The food continues to be high in sugar, fat and salt…the so-called healthier options do little for people that are seeking truly healthy options,” Deon told IPS.

Selecting an example from the menu, she said that, “The fruit and maple porridge contains more grammes of sugar than a snickers (candy bar).”

“They are little more than a vehicle to sell its bread and butter products: burgers, chips and fizzy drinks,” she added.

According to Deon, McDonald’s’ investment in programmes to promote physical activity “fall well short of the meaningful change that we need to address the epidemic of diet-related disease and McDonald’s needs to address the core issue of ending its marketing to kids.”

The McDonald’s Olympic restaurant, located in the Athlete’s Village, is the largest in the world, seating up to 1,500 people. It is expected to serve around 14,000 people a day during the Games, and will be offering free Olympic-themed happy meal toys to children.

Asked how children might avoid junk food buoyed by the positive image of the Olympics, Charles-King said it may be as simple as “(showing) the child how to cook so they can make better food choices”.

As far as athletes are concerned, Jill McDonald, UK chief executive of McDonald’s, has commented on the busy location of the restaurant in the Athlete Village, stating that athletes know more than anyone what they should be eating.

Benjamin Seeley told IPS that, “The IOC only enters into partnerships with organisations that work in accordance with the values of the Olympic movement.”

In June, the London Assembly has passed a motion calling for stricter criteria to assess suitable Olympic sponsors. New rules would exclude high-calorie food and beverage producers from sponsorship roles, ending the age-old relationship between McDonald’s and the Olympics.

This year is not the first time that Olympic sponsors have come under scrutiny. In 2008, human rights activists called for a boycott to end sponsorship of McDonald’s and other restaurants.

Food retailers are not the only sponsors to face opposition this year. Indian athletes and officials will be skipping the opening and closing ceremonies to protest Dow Chemical’s involvement with the Games. Dow is the owner of Union Carbide, whose 1984 gas leak in Bhopal, India killed more than 22,000 people and polluted soil and water sources for years to come.