Myanmar: Total and Chevron’s withdrawals should be followed by effective economic sanctions

Press release
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Total’s and Chevron’s decision to begin ceasing their operations in Myanmar is momentous, given the responsibility economic actors often play in the contexts of massive human rights violations. It also shines a light on the incapacity or unwillingness of the US and the EU governments to establish effective sanctions that would block the junta’s largest incomes, including sources of foreign currency.

FIDH welcomes the companies’ decision, which avoids contributing to the ongoing grave human rights violations in Myanmar. FIDH had repeatedly warned the French energy major of the risks posed by the continuation of its activities, against a backdrop of strong Burmese and international civil society mobilisation, alongside that of responsible investors.

The withdrawal also signals the failure of the international community, the US, and the EU, to put in place a targeted sanctions regime that would have substantially hit the junta, including by sanctioning Myanma Oil and Gas Enterprise (MOGE) or by preventing the flow of gas money into the junta’s bank accounts.

To date, neither the EU and nor the US has imposed any sanction that would materially affect the military’s financial capacity to purchase arms and equipment to wage war against its own people. Between the approximately USD 5 billion in central bank reserves and USD 2 to 2.5 billion in foreign currency earnings annually—largely from the oil and gas, mining and timber sectors—the government has access to enough foreign currency to maintain military spending indefinitely. For instance, the Russian media recently announced a new USD 2.3 billion arms deal with the Myanmar military, paid for out of these stocks and flows of foreign currency.

This withdrawal follows the drastic worsening of the human rights situation in Myanmar. Between 1 February and 10 December 2021, at least 7,053 attacks on civilians or armed clashes that failed to protect them were recorded—a 664% increase from the same period in 2020—while hundreds of thousands of people have been displaced. As of 31 December, the junta had killed at least 1,384 people and arrested at least 11,289 politicians, human rights defenders, journalists, and other individuals engaged in perceived or actual dissent. Junta courts handed down first sentences to State Counselor Aung San Suu Kyi and President Win Myint; hundreds of National League for Democracy (NLD) members remain in detention, with reports of torture in some cases.

FIDH expects the companies’ disengagement to be conducted responsibly, with transparent and appropriate due diligence to mitigate risks and prevent adverse human rights impacts potentially arising from the withdrawal of their Myanmar operations. Moreover, they should undertake meaningful engagement with relevant stakeholders, including Myanmar-based civil society organisations and workers, particularly during the six-month contractual notice period.

FIDH also expects the EU and the US to take stock of the signal provided by their major oil and gas operators by adopting without delay new sanctions. Specifically, sanctions should be made against the Central Bank of Myanmar—by far the most important source of foreign currency for the junta; the Myanmar Foreign Trade Bank (MFTB), which acts as the Myanmar government’s foreign currency treasury; the Myanmar Oil and Gas Enterprise (MOGE) the state-owned Myanma Oil and Gas Enterprise (MOGE), which is the operator of oil and gas exploration and production in Myanmar; the Mining Enterprise No. 1 (ME1), and the Mining Enterprise No. 2, all of which manage and collect royalties and production shares.

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