Myanmar needs an effective legal system, and so do its foreign investors
Sam Zarifi and Benjamin Zawacki say corporations are vulnerable
The controversy surrounding Aung San Suu Kyi and a joint-venture copper mine project in Myanmar should give prospective foreign investors pause. It should also prompt the international community to help the country establish a legal regime on which both investors and the people of Myanmar can rely for protection of their rights.
A government-backed investigation into the mine project, chaired by Suu Kyi, concluded that security forces used chemicals against villagers protesting against it. It also recommended additional impact assessments, and either increased compensation or the return of farmland allegedly taken via fraud and coercion. But, crucially, it concluded that the project should continue. Villagers vehemently disagreed and vowed to pursue a lawsuit.
Myanmar's government has a duty to protect workers, consumers, landholders and indigenous people against rights violations. Despite recent steps, however, there are not enough lawyers, judges and others adequately trained to monitor economic activity and provide accountability for violations of laws governing corporate action.
Corporations have a strong interest in supporting the development of robust accountability mechanisms in Myanmar. Many now considering investing participate in a global corporate citizenship initiative known as the UN Global Compact, which asks its members to take action prior to investing, such as human rights and environmental impact assessments, and to monitor business activity once under way.
Yet all the compact's "commitments" are non-binding. And even strict adherence would not serve as a defence for companies accused of committing human rights and environmental violations.
Increasingly, transnational corporations may be held legally responsible for abuses in the country where they occurred, and also in their home country. Western companies are the most vulnerable, but the copper mine case shows Asian enterprises are not immune: the mine's other joint-venture partner is the Chinese Wan Bao mining company, a subsidiary of weapons manufacturer Norinco.