Myanmar junta siphons gas revenue offshore without using for the country

Myanmar junta siphons gas revenue offshore without using for the country

BANGKOK, Sept 10 (Reuters) – Myanmar’s military has transferred billions of dollars from a gas project into two banks operating in Singapore, contributing to “high-level corruption”, a U.S.-based environmental group said on Thursday.

A report by non-profit Earth Rights International (ERI) said the junta had transferred $4.83 billion since 2000 from a gas pipeline, money that was kept off the national budget and stored in the banks operating in the city-state.

“Rather than contribute to Burma’s economic development, the billion dollar revenues from the project have instead contributed to high-level corruption,” the report said. The money, it said, came from the controversial Yadana gas project involving energy companies Chevron Corp of the United States, France’s Total and Thailand’s PTTEP .

  1. The two banks and the Singaporean government were informed of the group’s findings last week, ERI said. All had yet to respond.
  2. “As long as Myanmar’s regime has easy access to these funds we feel it will have little incentive to change,” Matthew Smith, one of the report’s authors, told a news conference.
  3. “We urge the international community to use this as leverage to help the people of (Myanmar). We fully expect the Singapore government and the banks to do the right thing.”
  4. Despite a broad range of sanctions placed on Myanmar by the United States and the European Union because of political repression, its vast reserves of natural gas have been a financial lifeline for the regime. (For a factbox on sanctions on Myanmar click on)
  5. ERI estimated the military government had received 75 percent of the revenue generated by the Yadana pipeline, which runs from the Andaman Sea to western Thailand.
  6. ERI said the junta managed to keep the $4.83 billion off its national budget accounts by using a 30-year-old exchange rate from dollars to the local kyat currency, which produced a sum in kyat far smaller than the real amount generated.
  7. “Singapore has very tight laws regarding corruption and misappropriation of public funds,” Smith said.
  8. “These accounts should be red-flagged until the banks have the opportunity to cooperate with the authorities.”
  9. China’s largest oil and gas producer, the China National Petroleum Corporation, is due to start construction of nearly 4,000 km (2,485 miles) of dual pipelines from Myanmar’s western Arakan State to China’s Yunnan province next month. .
  10. The deal is expected to provide the government, with at least $29 billion over 30 years.

Reporting by Bangkok Newsroom; Editing by Alan Raybould and Nick Macfie. CNBC

Oil majors propping up Burmese regime

Energy giants Total and Chevron are propping up Burma’s junta with a gas project that has allowed the regime to stash nearly five billion dollars in Singaporean banks, a rights group said on Thursday.

 France’s Total and US-based Chevron have also tried to whitewash alleged rights abuses by Burmese troops guarding the pipeline, including forced labour and killings, two reports by US-based EarthRights International said.

The group urged the international community to exert pressure on the two companies, which have long managed to avoid Western sanctions against the generals who rule the impoverished Southeast Asian nation.

“Total and Chevron’s Yadana gas project has generated 4.83 billion dollars for the Burmese regime,” one of the reports said, adding that the figures for the period 2000-2008 were the first ever detailed account of the revenues.

“The military elite are hiding billions of dollars of the peoples’ revenue in Singapore while the country needlessly suffers under the lowest social spending in Asia,” said Matthew Smith, a principal author of the reports.

The junta had kept the revenues off the national budget and stashed almost all of the money offshore with Singapore’s Overseas Chinese Banking Corporation (OCBC) and DBS Group (DBS), the watchdog said.

“The revenue from this pipeline is the regime’s lifeline and a critical leverage point that the international community could use to support the people of Burma,” added Smith, the group’s coordinator for the country.

Mistaken interpretations, claims Total

But Chevron said related development projects had helped local communities.

“We believe that Total’s health, economic development and education programs, which we support, are critical and substantively make positive improvements to the lives of the people in the Yadana project communities,” a Chevron statement said.

Total questioned the accuracy of the reports.

“An initial reading has already enabled us to identify inaccuracies… lack of precision or mistaken interpretations,” Total vice-president Jean-Francois Lasalle told AFP.

He added the rights group “at no moment recognises the benefits of our presence, notably in the areas of education and health”.

Total and Chevron are two of the biggest Western companies in Burma and have recently come under fire for their dealings with the regime, following the extension in August of the house arrest of pro-democracy icon Aung San Suu Kyi.

Total has been able to continue working there because EU sanctions against the country currently only cover arms exports, wood, minerals, gems and metals.

US lawmakers in July 2008 dropped plans for sanctions that would have ended tax write-offs enjoyed by Chevron and would have pressured it to pull out from the Yadana project.

Total has been a major investor in the Yadana project since 1992, holding a 31.24 percent stake. Chevron has a 28 percent stake in the field, production from which represents 60 percent of Myanmar’s gas exports to Thailand.

EarthRights said that as a result of the hidden revenues, Total and Chevron were a “primary reason” why international and domestic pressure on the Burma’s military regime had been ineffective for decades.

The group meanwhile said that impact assessments of the pipeline by US-based CDA Collaborative Learning Projects, a US non-profit organisation commissioned by Total, had covered up adverse effects and abuses, the group said.

Wilful whitewashing

Report co-author Naing Htoo said CDA “wilfully participated in whitewashing Total and Chevron’s impacts in Burma and their role in forced labour, killings, and other abuses.”

CDA visited villages in the pipeline area on five occasions but only with escorts from the oil company and interpreters from Total, while villagers were warned by security members not to give bad news, the report said.

The Chevron statement said however that the firm believed the CDA’s findings “provide a credible assessment of the Yadana Project?s community engagement activities.”

Burma has been ruled by the military since 1962. Its huge natural resources are also a major target for Asian countries, especially China, which eschew western sanctions.

– AFP , Malaysiakini

 

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