A campaign group has said it is concerned that the US government is not adequately checking American companies’ investments in Myanmar under the terms of Washington’s own legal rules.
When the United States suspended some sanctions against Myanmar in 2012, it imposed conditions on US-owned companies investing in the country to ensure transparency. These include reporting to the US State Department on any investments valued above US$500,000.
“We are concerned about the extent to which the US Administration is tracking US companies’ investments in Myanmar in order to ensure reporting when they reach the $500,000 threshold,” US Campaign for Myanmar policy director Rachel Wagley told The Irrawaddy.
“The US Administration should make clear how or if it has an established mechanism to monitor US investment in Myanmar and to require investors to submit reports.”
Wagley was commenting after her NGO published its first “report card” last week on how well US investors were cooperating with Washington’s rules. Of six companies named in the campaign’s report, only Coca Cola received a green tick for being a responsible investor; three were labeled “irresponsible investors” and two “questionable investors.”
The NGO acknowledged that all US firms liable to report to the State Department have until July to comply, but said it was concerned that some businesses might be “flying under the radar” of monitoring.
US investors, whether an individual or a company, are supposed report on a “range of policies and procedures, including payments made to the government, human rights assurances, labor rights, community consultations and stakeholder engagement, environmental stewardship, anti-corruption, arrangements with security service providers and any contact with military or non-state armed groups,” the Wall Street Journal reported when the State Department rules were first announced.
In its report card, the US Campaign for Myanmar named Capital Group Companies, Crowley Marine Services, and Hercules Offshore as “irresponsible” due to their failure to disclose if they took action to limit risks associated with their investments and to disclose key information like the identities of their Burmese partners.
Western Union and Clipper Holdings Limited were “questionable” due to missing or incomplete disclosures.
Coca-Cola, however, was praised for the “relative thoroughness” of its reporting.
The US Treasury’s Office of Foreign Assets Control (OFAC) is supposed to handle enforcement actions related to the Reporting Requirements and can fine companies that do not comply, said Wagley.
“So far, we haven’t seen OFAC take significant steps toward enforcing the reporting requirements. We expect that come July 1, a number of additional reports will come in. But there are companies like General Electric that have not reported presumably because they are interpreting their investments to not fall under the definition of ‘new investment,’” Wagley told The Irrawaddy.
“Regardless of whether companies meet the requirements, voluntarily reporting shows a commitment to due diligence and responsible investment that we encourage every company to demonstrate.”
The US campaign said all American companies are legally required to report their activities within 180 days of reaching $500,000 of investment and every year afterward on July 1.
The NGO said it had not yet received any reaction to its report card from the US State Department. It is already working on a second report of US business activity in Myanmar and hopes to publish this after July.
Wagley said there were a number of unanswered questions to which it was seeking answers from the US authorities.
“Has the State Department received all the reports it expected to receive to date, and how will OFAC proceed if it suspects that a report has been unlawfully withheld? Which companies are flying under the radar? How will the reporting requirements be enforced consistently? These are questions the US Administration needs to take seriously,” Wagley said.
The NGO’s revelations coincided with a visit to Myanmar on June 6 by US Secretary of Commerce Penny Pritzker to open a new trade office in the country. She was accompanied by a business delegation.
“Responsible investment can facilitate broad-based economic growth and economic prosperity for your people,” Pritzker said during a ceremony at the US Embassy in Yangon.
Source: THE IRRAWADDY Myanmar