SOURCE: General Electric (GE)
It was 2006 when GE first concluded that the growth rates in emerging markets were three times those of the developed markets and that our business interests would have us operating in countries where human rights are under pressure. It was then we began a human rights journey that has crossed many milestones: joining the Business Leaders Initiative on Human Rights, adopting a Statement of Principles on Human Rights, joining the UN Global Compact, adopting Implementing Principles on Human Rights, engaging with the UN Special Representative on Human Rights to provide a business perspective on the Guiding Principles on Business and Human Rights and the list goes on.
As a business enterprise, under the UN Guiding Principles, GE is obligated to respect human rights. This is the corollary to the primary obligation of states to protect human rights. Many who describe the legal principles of human rights speak in terms of “soft law,” as human rights principles arise from international treaties that do not necessarily find expression in the specific statutory framework of a given country. While viewing human rights as “soft law” is flawed in several respects (which I will not go into), this perspective is losing ground as a practical matter, as governments around the globe are enacting regulations and statutes that are turning human rights into hard law.
A recent example of this is the conflict minerals provision of the Dodd-Frank Act, which legally requires companies like GE to indicate whether their products are made from conflict minerals: gold, tin, tungsten and tantalum extracted from the civil war–torn mines of the Democratic Republic of the Congo. Another example arises from lifting of certain restrictions by the U.S. State Department for U.S. companies seeking to do business in Myanmar (formerly Burma). These restrictions were lifted this past summer, and GE was the first U.S. company authorized to operate in Myanmar. Such restrictions, however, are only permitted where certain conditions are met as required by General License No. 17. The requirements of this license closely follow the precepts established by the UN Guiding Principles, intended to assure that businesses operate in Myanmar in a manner that respects human rights.
Recall, however, that states hold the primary obligation to protect human rights. What if a state widely fails to shoulder this obligation, yet a business entity—like GE—seeks to do business in that country? In fact, the government of Myanmar has faced UN sanctions (enforced by the International Labour Organization, or ILO) for a dozen years for rampant violations of forced and child labor laws. Maplecroft, an internationally recognized rating organization, has listed Myanmar as presenting “extreme risk” in the following categories: Rule of Law, Business Integrity and Corruption, Human Security, Regulatory Framework, Business Environment, Labor Rights and Protection, and Civil and Political Rights. Given this woeful failing by the Myanmar government to protect human rights and provide other elements of a working and ethical social framework, what chance does GE have to conduct business in Myanmar in a way that respects human rights that are not otherwise protected? Can we fulfill the requirements of General License No. 17?
These are the questions that brought Bob Corcoran, vice president of GE Citizenship and president of the GE Foundation, and me to Myanmar last week. We participated in a series of meetings with NGO leaders, government officials, UN officials and the U.S. ambassador. The meetings offered a fair amount of hope for both our business interests and the advancement of Myanmar reform, but also presented reservations about what GE can reasonably expect to achieve in the current environment. It is still early days for the new government, and the entire social and political landscape is changing very rapidly.
First the signs of hope.
Let’s start with the people of Myanmar. They are friendly, engaging, energetic and yearning to improve themselves and their country. Fifty percent of the population is under 24, so jobs are needed, especially if and when the military retrenches. Several individuals we interviewed spoke about how the Myanmar people welcome change, and balance change against stability. Even Aung San Suu Kyi, the reformer who is credited with helping to lift the UN sanctions, is viewed as having been practical in her recent dealings with the president and majority parties in parliament. Bob and I both expected to see a substantial military presence in the streets of Yangon, the new government having taken over from a military dictatorship less than two years ago. We observed no such presence. In fact, the absence of police or military was notable. The streets were alive with the hustle and bustle of a thriving democracy, with nearly double the number of cars as compared with a year ago. One afternoon while caught in traffic we noticed young boys selling candy, newspapers and other literature to passengers (like us) in the idling vehicles. I asked our driver what one boy was selling, as the papers he was holding up did not look like newspapers. The driver’s reply was that these were translations, in various languages, of Myanmar’s Foreign Investment Code. These are clearly people who feel a curtain has been lifted and are eager to welcome the Western world.
It is clear that the Myanmar people feel they have been isolated from the good influences of democracy, sustainable development, human rights and corporate social responsibility. Many of those we interviewed decried the loss of these noble tenets that were learned by the Burmese people decades ago in university and military exchange programs in such Western countries as the UK, the U.S., and the Nordics. During the sanctions period, Myanmar was forced to turn to China for commerce and sociopolitical interaction. In their view, this was an unfortunate source of dependency that they wish to turn away from as rapidly as possible. There is a great distrust of the Chinese, and many in Myanmar see Western culture and businesses as an antidote for their country’s dependence on China, and what they see as China’s aggression. One of the key government advisors we met specifically discussed GE as a leader in corporate governance and transparency that could help build capacity among Burmese businesses that seek to follow the tenets of corporate social responsibility but do not know where to start. Likewise, this same advisor noted that the UN Global Compact had started a local chapter and proposed that GE could assist in developing programs to combat corruption.
Finally, nearly 90% of the Burmese people are Buddhists. Bob and I felt the warmth, sensitivity and peaceful nature of the people we met. Picking up on the theme of change and stability, several times we noted that conversations tended to always look to the future and not dwell on the past. For example, one former political prisoner, only recently released, talked about corruption due to the constitutional weight given to the military—guaranteed 25% of the seats in parliament. He decried the generals’ influence on the judicial system, where he said that “legal victories were simply bought.” Yet, his call was not to have the generals pay for his past imprisonment or for the rape of women in his home province of Shen. Rather, he simply expressed his desire for the corruption to stop and for the military’s influence to become transparent. As he so aptly put it, “There is no purpose in fighting over old bones.” Bob and I contrasted this sentiment with the tendency of some in the U.S. who carry grudges—some are still living out the Civil War, for instance. I believe the Burmese people, with their Buddhist mind-set, have an extraordinary yearning to look forward and hope, not backward seeking revenge.
Despite the breathtaking speed of positive developments in Myanmar, there is cause for concern on multiple fronts. The most obvious is akin to what we are seeing in Egypt today—impatience for progress following the Arab Spring. The Burmese dictatorship was overthrown and no peace dividend is at hand. The ethnic conflict continues, inadequate food and shelter still persists in most of the provinces, electricity is still not available, and the military hegemony remains unchecked. There is so much that must be accomplished, and one has to wonder if the pace of change can keep up with the Burmese people’s expectations. This question is particularly salient because “capacity building” is a huge underlying issue if change is to be effectuated. Whether our discussions were about new hospital equipment, employees’ right to strike, government transparency, education or corporate governance, most of those we interviewed recognized that the Burmese people—particularly due to their years of isolation—were not up to handling or absorbing the positive developments that are rapidly coming as a result of political and social reforms.
Second, rule of law and corruption are very real problems that threaten to turn away good Western companies that wish to do business in Myanmar but can’t compete amid the common-place sordid business practices that now exist. Getting basic things done in Myanmar can be a real problem for an ethical company. GE had problems opening an office because several of the local banks we tried to do business with were on various U.S. corruption blacklists. We eventually found a lawful way around this problem, but it took time and perseverance. Similarly, the ILO delegate we met talked about having to make several “facilitating payments” merely to get an electricity bill paid. For my own part, it took three tries by my wife going to our bank before the bank could get MasterCard to approve payment of my hotel bill—and then only if I agreed to surrender the card upon return to the States and get a replacement card. And while the U.S. dollar is common currency in Myanmar—which is largely a “cash and carry” economy—don’t try to pay for anything with slightly worn bills. Even the Buddhist temple we visited rejected Bob’s $20 bill, as it had a slight ink spot at one of its edges. Corruption is so rampant that doing even simple business tasks ethically will require patience and determination.
Finally, ethnic conflict and undue military influence (corruption) must be brought under control. While Myanmar has made substantial progress in curbing ethnic violence and signing peace agreements, armed conflict in Kachin continues to rage. Given the special protection afforded the military under the Constitution, it is unclear how this reform will be effectuated. While many of the state-owned enterprises under military control have been turned over to the new government, several others—including the copper mines—remain under military control and their revenues are unknown to the minister of finance.
Myanmar is a country of 60 million people that has tremendous resources in mining, oil and gas, and other industries in which GE participates. The Burmese people are in dire need of our sustainable energy equipment, healthcare products, and oil and gas. They also need our help—through philanthropy and through good practices in corporate governance, human rights and business ethics. A single trip to Myanmar, especially one confined to Yangon, by no means makes me an expert on doing business in this emerging country, and I recognize our interviews were confined to progressive thinkers. Clearly, the challenges of doing business in Myanmar are fraught with risk. However, with careful planning, adequate due diligence and measured initiatives, I believe we can use our ethical reputation to help our businesses win orders for our sustainable-product lines. In doing so, we will be doing “good” and “making a difference” for the people of Myanmar.
KEYWORDS: Myanmar, Burma, Human Rights, GE, Trade, rule of law, public policy