A/HRC/42/CRP.3 5 August 2019 English only Human Rights Council Forty-second session 9–27 September 2019 Agenda item 4 Human Rights situations that require the Council’s attention The economic interests of the Myanmar military Independent International Fact-Finding Mission on Myanmar GE. A/HRC/42/CRP.3 Contents Page I. Executive summary and key recommendations ............................................................................... 3 II. Mandate, methodology, international legal and policy framework .................................................. 6 A. Mandate ................................................................................................................................... 6 B. Methodology ............................................................................................................................ 7 C. International legal and policy framework ................................................................................ 8 III. Mapping Tatmadaw economic structures and interests .................................................................... 18 A. Tatmadaw holding companies MEHL and MEC ..................................................................... 18 B. MEHL and MEC subsidiaries .................................................................................................. 24 C. Tatmadaw role and interests in State-owned enterprises ......................................................... 27 D. Tatmadaw-linked private Myanmar companies and conglomerates ........................................ 28 IV. Tatmadaw and the extractive industry .............................................................................................. 29 A. Tatmadaw, MEHL and MEC involvement in jade and ruby mining in Kachin and Shan States 30 V. Other principal means of contributing to Tatmadaw operations and wealth .................................... 37 A. Donor companies ..................................................................................................................... 37 B. MEHL and MEC joint ventures and commercial partnerships with foreign companies and foreign State-owned enterprises ........................................................................................................... 51 C. Arms and military equipment suppliers ................................................................................... 53 VI. Conclusions and recommendations .................................................................................................. 62 Annexes I. Map of Myanmar .............................................................................................................................. 69 II. Myanmar Economic Holdings Limited (MEHL) and Myanmar Economic Corporation (MEC) .... 70 A. Governance structure of MEHL and MEC .............................................................................. 70 B. Alleged subsidiaries and affiliates of MEHL and MEC or MEC Ltd ...................................... 73 III. Extractive industries in Kachin and Shan States .............................................................................. 80 A. Jade mining .............................................................................................................................. 80 B. Ruby mining ............................................................................................................................ 81 IV. List of donors and details of donations solicited by the Tatmadaw in September 2017 ................... 82 V. Foreign companies in commercial partnerships with MEHL and MEC .......................................... 96 A. Joint venture partners ............................................................................................................... 96 B. Foreign companies with contractual or commercial ties to MEHL or MEC ........................... 98 VI. Arms and military equipment suppliers to the Tatmadaw ................................................................ 106 A. Enterprises and States that transfer conventional arms and related items to the Tatmadaw .... 106 B. Private companies from which the Tatmadaw sought to procure dual-use goods and technology used for military purposes ................................................................................................................ 110 2 A/HRC/42/CRP.3 I. Executive summary and key recommendations 1. The Independent International Fact-Finding Mission on Myanmar (hereinafter “the Mission”) in its reports submitted to the Human Rights Council at its 39th session in September 2018 (hereinafter “2018 report”), established consistent patterns of serious human rights violations and abuses in Kachin, Shan and Rakhine States, in addition to serious violations of international humanitarian law between 2011 and 2018.1 The Mission concluded that many of these violations amounted to crimes against humanity and included murder; imprisonment; enforced disappearance; torture; rape, sexual slavery and other forms of sexual violence; persecution and enslavement. In addition, in Rakhine State, the elements of the crimes against humanity of extermination and deportation were also found to be present. The violations were principally committed by the Myanmar security forces, particularly the military, or Tatmadaw. Many of the violations documented amount to the gravest crimes under international law. The Mission also concluded that “there is sufficient information to warrant the investigation and prosecution of senior officials in the Tatmadaw chain of command, so that a competent court can determine their liability for genocide in relation to the situation in Rakhine State”.2 2. The Mission found a pervasive culture of impunity at the domestic level. For that reason, it concluded that the impetus for accountability must come from the international community and it made concrete recommendations to that end. The Mission named senior generals of the Tatmadaw who should be investigated and prosecuted for genocide, crimes against humanity and war crimes. Against the backdrop of the gravity of its findings, the Mission recommended that “no business enterprise active in Myanmar or trading with or investing in businesses in Myanmar should enter into an economic or financial relationship with the security forces of Myanmar, in particular the Tatmadaw, or any enterprise owned or controlled by them or their individual members, until and unless they are re-structured and transformed as recommended by the Mission”.3 The ability of the Tatmadaw to draw upon alternative sources of revenue, outside the official military budget, contributes towards it operating without civilian oversight. This recommendation from the Mission’s 2018 Report sought to ensure the Tatmadaw’s financial isolation, both to deter continued and future violations of international human rights law and international humanitarian law and to promote accountability for those committed in the past, as documented by the Mission. The recommended economic isolation was also intended to encourage the transformation of the Tatmadaw that the Mission saw as essential for human rights compliance in Myanmar. 3. The Mission is issuing this report on the Tatmadaw’s economic interests to assist the Government of Myanmar, United Nations Security Council, Member States, relevant regional and international inter-governmental organizations, investors and businesses, international financial institutions, and the United Nations, its funds, programmes and agencies, in implementing these recommendations. 4. The outsize power of the Tatmadaw has affected Myanmar’s transition from full direct military dictatorship following the November 2010 and subsequent November 2015 elections. The National League for Democracy, led by Aung San Suu Kyi, won the 2015 election and took over the civilian side of the Government in March 2016. However, as prescribed by the 2008 constitution, the Tatmadaw is an autonomous institution free from any civilian control or oversight. It controls the ministries of defence, home affairs and border affairs, whose ministers are serving military officers selected by the Commander-in-Chief.4 It retains 25 per cent of the seats in the legislature, giving it the power to veto any constitutional change.5 1 A/HRC/39/64, Report of the independent international fact-finding mission on Myanmar, 12 September 2018 and A/HRC/39/CRP.2, Report of the detailed findings of the Independent International Fact-Finding Mission on Myanmar, 17 September 2018. 2 A/HRC/39/64, paragraph 87. 3 A/HRC/39/CRP.2, paragraphs 1708, 1716, and 1717. 4 Constitution of the Republic of the Union of Myanmar (2008), Article 232(b)(ii), 232(j)(ii) 5 Constitution of the Republic of the Union of Myanmar (2008), Article 109(b), 436. 3 A/HRC/42/CRP.3 5. The Tatmadaw’s economic interests enable its conduct. The Mission investigated five areas of economic interest: (a) the Tatmadaw’s principal conglomerates, Myanmar Economic Holdings Limited (MEHL) and Myanmar Economic Corporation (MEC), the subsidiaries owned or controlled by them, the Tatmadaw’s role in State-owned enterprises and the Tatmadaw’s close ties with a subset of domestic private business enterprises, known as “crony companies”; (b) the Tatmadaw’s economic interests in the continuing armed conflicts in Kachin and Shan States in northern Myanmar; (c) companies and organizations that provided Tatmadaw-solicited donations in support of the military’s “clearance operations” that began in August 2017 against