Trade and Human Rights in Burma (2012-10)

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Since 2011 the Burmese government has made a series of sweeping reforms that have led the EU, the U.S. and the ILO to suspend sanctions and restrictions on investment. Multi-national companies are now eagerly eyeing opportunities in Burma to exploit its resources and untapped markets. Labour and civil society groups are deeply concerned that without strict responsible investment and human rights requirements, a flood of foreign business activity could be damaging for Burmese citizens, workers, the democracy movement, and shareholders.

Investor Risks:
The situation for companies and their investors remains extremely risky in Burma. Although democratization and legal reform is underway, the political environment is still very unstable, the military maintains control over the government, and corruption remains rampant. Despite renewed commitments to work with the ILO, forced labour and ethnic conflict rife with human rights abuses persist, particularly in Burma’s resource-rich border regions. A new labour law has restored basic labour rights, but there is little capacity for functional labour relations. Unions and workers are organizing and even staging strikes in an uncertain and ever-changing regulatory environment.

It is important to note that EU and U.S. sanctions have only been suspended, and could be re-imposed if the situation in Burma deteriorates. Furthermore, governments are under pressure from human rights and labour groups to impose and strengthen human rights reporting and performance requirements for companies that choose to enter Burma. In short, any public company rushing into Burma at this point would be exposing its shareholders to extensive political, legal, regulatory, social, financial and reputational risks.