How Business Should Respond to the Coup in Myanmar

The Myanmar military’s coup and escalating use of violence against peaceful protestors have left many foreign businesses operating in the country wondering what to do. The bottom line is this: respect human rights, not only by preventing and mitigating harm linked to business activity, but also by ensuring that business activity is not rewarding the leaders of the coup.

The challenge of respecting human rights while navigating business in Myanmar is significant: engagement with the new authorities risks conferring legitimacy on them and economically enabling their illegal seizure of power, while disengagement reduces leverage, hinders delivery of essential goods and services, and terminates needed jobs. Some businesses provide essential services—such as telecommunications, transport and logistics, and infrastructure providers—and may have a greater longer-term positive human rights impact by staying in the country. Other businesses may have limited ability to prevent and mitigate the human rights impacts that occur in their value chains or may be constrained by preexisting contractual obligations. How can business navigate these trade-offs and ensure respect for human rights?

Drawing on the UN Guiding Principles on Business and Human Rights (UNGPs), UN guidance for business in conflict situations, and BSR’s own experience working with businesses in Myanmar and advising companies on human rights due diligence in high-risk contexts, here are seven practical steps that businesses with a presence in Myanmar can take:

1. Prioritize staff safety and civil liberties.

Businesses with a presence in Myanmar should prioritize the safety, security, and mental well-being of their staff and support their human rights to freedom of expression, association, and political participation.

2. Be transparent in the short term, and document abuses for the long term.

Businesses should be as transparent as possible about their presence in Myanmar, their business relationships there, and their response to the coup. Businesses whose services have been interrupted should seek to inform their customers about the reasons why as well as the scope and length of the suspension of services. Some businesses and staff may be subject to coercion and victims of violence themselves; in these cases, businesses can document and collect information for future disclosure. Information collected by businesses now may be valuable evidence for use in potential criminal tribunals later.

3. Undertake rapid human rights due diligence on your business operations in Myanmar.

Businesses are not neutral actors in conflict situations. They have a responsibility to understand how their supply chains, direct operations, and the use of their products and services can influence local conflict dynamics. In the context of Myanmar, rapid human rights due diligence should look in particular at risks to staff safety and how business relationships and activities may impact on the political context—for example, by enabling or constraining freedom of expression and association or by directing payments either to or away from the military. Effective due diligence in Myanmar’s rapidly changing context will also require that businesses collaborate, share information, and engage in collective action with home governments, embassies, investment and trade associations, peer businesses, and (in a safe and secure manner) local civil society.

Businesses should use this information in the short term to prevent and mitigate any actual and potential human rights impacts in Myanmar, which they may cause or contribute to through their own business actions or to which they may be linked through their business relationships. They should also use this information to identify and utilize leverage to prevent the use of their products, services, and assets in atrocity crimes and other human rights abuses.

4. Take proactive steps to respect human rights.

Democracy and rule of law set the stage for the realization of human rights—as well as for a stable business environment—and companies should consider how they can proactively support this. In the immediate term, companies should consider making a statement voicing opposition to the coup and support for human rights, either alone or collectively (for example, by signing on to the statement organized by the Myanmar Centre for Responsible Business).

Companies should also determine how their business activity can support civil liberties and rule of law in the country and how they can support human rights defenders (including journalists, trade unionists, and their own protesting employees) through dialogue as well as funding, logistical, or communications support.

Collective action will be critical in the weeks to come, enabling joint advocacy to protect human rights and rule of law as well as information sharing with other business, government, and civil society stakeholders to identify corruption, military aliases, and hidden military beneficial ownership arrangements in business value chains. Companies’ home governments have a particularly important role to play in helping them to navigate human rights dilemmas so that they can fulfil their responsibility to respect human rights. This is in line with UNGP Principle 7, which stipulates that since “the risk of gross human rights abuses is heightened in conflict-affected areas, States should help ensure that business enterprises operating in those contexts are not involved with such abuses.”

Businesses should especially seek to maintain their operational-level grievance mechanisms, even if they pull out of the country. These grievance mechanisms may be essential tools for providing non-judicial access to remedy to Myanmar people during and after the coup, when the Myanmar judiciary may not be functioning correctly. These grievance mechanisms should be accessible to vulnerable groups and ethnic minorities. Companies may also be asked to cooperate in future criminal tribunals for atrocity crimes, as well as provide reparations where appropriate.

5. Support targeted economic sanctions.

Many international stakeholders are calling upon businesses in Myanmar to support targeted international sanctions to prompt the Myanmar military to step away from the coup. Several governments have already imposed or proposed new sanctions against the coup regime, including the U.S., the UK, Canada, and the EU. Foreign companies operating in Myanmar can help to shape effective sanctions by assessing the impact of those under consideration and providing inputs to inform foreign governments’ planning, with a focus on demonstrating the impact of targeted sanctions on the ability of companies to invest responsibly and recommendations for mitigating that impact.

6. Terminate all military business relationships and minimize government contact.

Many foreign companies operating in Myanmar have long since ended or avoided business relationships with the Myanmar military, including military-owned conglomerates Myanmar Economic Holdings Limited (MEHL) and Myanmar Economic Corporation (MEC) and their subsidiaries and business partners. This is in line with recommendations from the UN’s 2019 fact-finding mission report, which recognizes that companies should respect the standards of international humanitarian law and ensure that they do not aid and abet the Myanmar military by knowingly providing them financial, logistical, or any other practical assistance or encouragement. Other companies are still seeking to identify the often murky ties that they may have to military-affiliated individuals or organizations in their value chains. Many of these relationships are hidden by opaque beneficial ownership arrangements, corrupt business practices, and the use of aliases by both businesses and individuals. To avoid conferring legitimacy on the coup leaders, companies should minimize contact with government outside its role as a regulator.

7. Exit responsibly, if you are unable to stay.

Businesses that choose to leave Myanmar should do so in a way that respects human rights. This includes providing reasonable notice to all stakeholders, ensuring staff continue to receive income or support to mitigate loss of employment, and ensuring the security of staff who cannot be evacuated.

We are facing a quickly closing window of opportunity for business to signal the economic costs of the coup to its leaders and to take action in support of human rights. Complicit or not in the coup, all foreign businesses operating in the country have both the moral obligation and economic influence to take swift and powerful actions to respect and promote the protection of the human rights of the Myanmar people.

This article was originally published here: How Business Should Respond to the Coup in Myanmar | Blog | BSR