Asian companies stay quiet as Western peers condemn Myanmar coup

Coca-Cola, Facebook and H&M among those voicing concern for rights and democracy

A group of 43 mostly Western international companies operating in Myanmar have signed a statement expressing concern over the military coup. (Source photos by Reuters and AP)

FRANCESCA REGALADO, Nikkei staff writerMarch 5, 2021 14:52 JSTMyanmar Coup - Nikkei Asia

TOKYO/YANGON -- Nearly 50 mostly Western international companies in Myanmar, including Coca-Cola, Facebook, H&M, Heineken, Nestle and Unilever, have signed a statement expressing concern about the country's military coup. Asian businesses, however, are largely keeping their heads down.

"As investors, we inhabit a 'shared space' with the people of Myanmar, including civil society organizations, in which we all benefit from respect for human rights, democracy and fundamental freedoms -- including freedom of expression and association -- and the rule of law," said the document organized by the Myanmar Centre for Responsible Business, a Yangon-based group that advocates for human rights in business.

MCRB began gathering signatories in February, but corporate interest has only picked up a month into the coup. Following the deaths of 18 civilian protesters last week, foreign governments and businesses are now shaking off an initial hesitance to speak out against the junta.

Nishimura & Asahi, one of Japan's big four law firms, became the most recent to join the MCRB statement on Thursday. The same day, foreign chambers of commerce in Yangon representing American and European businesses released a joint statement saying they will not meet with the junta despite an invitation from military officials to hold talks.

Sanctions have been imposed on certain military leaders by the U.S. and U.K., both permanent members of the U.N. Security Council, as well as Canada. In the MCRB statement, the 49 companies -- the number as of March 5 -- pledged to comply with sanctions and due diligence on human rights and business integrity.

The statement comes as international pressure on businesses is mounting. The Norwegian central bank said on Wednesday it will place Japanese beverage group Kirin Holdings under observation for possible exclusion from its $1.3 trillion sovereign wealth fund over the group's alliance with a Myanmar military-affiliated company.

Last month, a group of civil society groups including Human Rights Watch submitted to the UN Working Group on Business and Human Rights a complaint about Japanese businesses involved in a commercial development project in Yangon called Y Complex. The complainants asked the agency to investigate whether the project was creating "immovable assets" for the military.

People line up for free bottles of Coca-Cola during an event in Yangon in 2013: Many international companies entered the Myanmar market hoping for strong growth.   © Reuters

Other signatories to the MCRB statement include Adidas, Carlsberg, L'Oreal, Maersk, Metro and Total.

"What our statement is seeking to show is that companies are sharing a space with human rights defenders and journalists. If that space is closed off, it's also bad for business," said Vicky Bowman, MCRB director and former U.K. ambassador to Myanmar. MCRB was founded in 2013 as an initiative by the Institute for Human Rights and Business, and NGO that has special consultative status with the United Nations, and the Danish Institute for Human Rights.

The foreign companies were joined by over 100 local ones, including Yoma Group, one of Myanmar's largest conglomerates, as well as the country's largest private bank KBZ Bank. Most companies contacted by Nikkei Asia declined to comment beyond the statement.

One of the international businesses that signed it is Telenor Group. The Norwegian telecommunications company, which has been present in Myanmar since 2014, was one of the few that publicly voiced concerns shortly after the coup.

The Australian business chamber in Myanmar raised its concerns on Wednesday. "The change in Myanmar's risk profile since 1 February 2021 means that it is now difficult for many responsible investors to make large investments in Myanmar," it said in a statement. "We call for an end to violence and a return to stability under democratic government as soon as possible," it added.

The American Chamber of Commerce and its European counterparts also made their stance clear, saying in their Thursday statement: "We have been requested to meet with representatives of the military government. We have declined all invitations."

Facebook also took the step last week of banning the Tatmadaw -- Myanmar's military -- and military-controlled agencies and media from its platforms Facebook and Instagram. The social media giant also banned ads from businesses affiliated to the military, including Myanma Economic Holdings (MEHL).

Japan's Kirin, which jointly owns two local breweries with MEHL, announced days after the coup that it would seek to sever business relations with the military within this year. Kirin has not joined the statement but has denounced the coup as "against our standards and Human Rights Policy."

European companies dominate the list of signatories, despite the significant investment presence of Asian businesses, including Japanese and Thai companies, in Myanmar.

Heineken's brewery opened outside Yangon in 2015. Rival Kirin has decided to end its alliance with Myanma Economic Holdings, which has ties to the country's military.   © Reuters

"The embassies for those countries tend to advise them in these situations to keep their heads down rather than standing up for international principles, even when the governments themselves like Thailand and Japan have actually published guidelines on business and human rights," MCRB's Bowman said.

The MCRB statement was also endorsed by the European Chamber of Commerce in Myanmar. The Japan Chamber of Commerce and Industry, Myanmar, responded to Nikkei Asia's inquiry by saying it is "considering" its response. 

Both Thailand and Japan released national action plans last year to implement the U.N.'s guiding principles on business and human rights. Canada's action plan goes even further, withholding embassy services for Canadian businesses that act irresponsibly abroad.

A cautious approach toward the coup is shared by many Asian companies and investors. For example, Ascent Capital, a private equity fund registered in Singapore and among the most high-profile and media-active commercial players in Myanmar, has not said a word in public. The fund said via its PR agency that "Ascent Capital is currently not offering comments to [the] media."

Their silence has not been lost on young protesters who have taken to the streets in Myanmar's cities in the tens of thousands amid a major escalation of violence by the security forces.

"Don't be on the wrong side of history. There's still time to speak up for democratic reforms," said a protester in Yangon who asked to be identified as Constance, referring to Ascent Capital and other companies who have fled under the radar since the Feb. 1 military takeover. "The people will appreciate companies who stand by them and welcome their ambitions to do business responsibly in the country."

Protesters are calling on businesses in Myanmar to speak out against the coup, posing a serious challenge to multinational companies concerned about reputational risk.   © Reuters

Phyo, a 25-year-old female protester who works in the development sector, criticized the silence of businesses.

"I think it's completely irrational and irresponsible for investors and private businesses to stay quiet... Even if you don't care about human rights atrocities, your business ethics are extremely questionable when you side with an illegitimate government without calling out their actions," she said.

Such views are echoed by the coup resistance movement, backed by large segments of the Myanmar public boycotting military-owned products.

Shortly after Singapore Foreign Minister Vivian Balakrishnan said the city-state should focus on doing business in Myanmar and not weigh in on its "politics," Singaporean brands Beauty in the Pot, Crystal Jade, BreadTalk and Ya Kun Kaya Toast were among boycott targets identified on social media with their logos crossed out.

"Businesspeople are struggling to stay neutral between the military and the massive public backlash against the junta, and deal with both sides," said a Myanmar-based analyst, adding that some companies expect the junta to outlive the democracy movement and as a result are being careful not to burn bridges with the regime.

"The corporate community -- especially business groups and funds and investors -- should stand up publicly for human rights, unrestricted flow of information and transparent and fair governance," he added. "They carry some weight in the eyes of the international community and of the regime."

Even though many large Asian corporations remain silent, three Japanese-owned small and medium-sized enterprises in Myanmar did join the MCRB statement. "Our company position is very clear: We stand on the people's side and we're against any kind of violence and any challenge to basic human rights," said the owner of one of the companies.

The owner asked major Japanese companies to look to their own environmental, social and corporate governance standards. "Major [international] companies have already signed on so I don't see that big a risk," he said. "They have strong messages on ESG in Japan so they should follow that."

Additional reporting by a contributing writer in Yangon