Not so Shiny After all: The dark side of the Jade Mining Sector in Myanmar

Harshil Vijayvargiya & Keertana Venkatesh[i]

Introduction

On July 2, 2020, a landslide at a jade mining site in Myanmar killed at least 160 people and injured hundreds of workers. Every year, such accidents take place in jade mining sites of Myanmar, but these do not come as a shock to many. The mining of jade in Myanmar is marred with controversies. Despite numerous accidents and violations, the sector remains highly unregulated where the licensing system is affected by high corruption and cronyism.

The military-linked elite, the hidden Chinese business interests, and the State Army-linked companies continue to pilferage the country’s precious resources and wealth to the detriment of its people and environment. These activities contribute to secrecy and abuse in the jade mining sector. As per the official records, the total jade exports between the year 2012 and 2016 from Myanmar were worth nearly $1 billion per year. China, on the other hand,  reported importing more than twice this amount from Myanmar at $2.6 Billion per year. However, Global Witness, an NGO, in its detailed investigation, reported the annual production of jade to be more than $31 billion in the year 2014 alone, equating to almost 48% of the nation’s GDP. The estimation is far higher than the official figures.

Research conducted by independent NGOs indicates the malpractice by companies involved. These companies avoid most payments by under-reporting and undervaluing their production level, which makes the Government overtax the small portion of jade and gemstone that passes through the official channel, i.e. the semi-annual emporiums. This calls for a reformation in the tax system, that should include revising fiscal terms, restructuring the permitting and valuation processes, and strengthening the monitoring and oversight. The recent accident on July 2 at the Jade mining site has brought to light, yet again, the issues underlying Myanmar’s jade trade. 

Myanmar’s New Gemstone Law

In order to reform the sector, five years ago, the government stopped issuing license permits, pending a governance review intended to clean up the sector. Following the suspension, Myanmar set to draft a new Gemstone policy and a new Gemstone Law. The policy was developed through a highly consultative process aiming at stringent human rights protection. It was expected that the Gemstone law would be based on the Gemstone policy. However, even before the policy could be released, the law was passed in 2019.

The new law is problematic as it neither addresses issues concerning opaque licensing procedures nor tackles the conflict of interest within Myanmar Gems Enterprise which acts both as a regulator issuing licenses and a business controlling lucrative mines through joint ventures with numerous companies. As a candidate nation of the Extractive Industries Transparency Initiative (EITI) which is an international framework for combating corruption, Myanmar had pledged to resolve issues about disclosure of beneficial ownership, however, the Gemstone law does not refer to the same.

Myanmar’s Gemstone Law, while addressing some issues relating to sizing restrictions of land allotted to companies for mining, fails to recognize environmental and human rights issues. The government has failed to take into account recommendations from the environment management plan that was aimed at improving the sustainability of trade in the country. 

Violation of international laws and principles

Despite increasing incidents of mining accidents across the world, States have not adequately addressed the importance of standards for health and safety. The jade mining industry in Myanmar has been thriving on human rights abuses. While Aung San Suu Kyi blamed this particular tragedy on joblessness, history indicates the use of forced labour, poor health and safety conditions in jade mining to have led to these human rights abuses in the country. 

Under international law, while the primary responsibility rests upon the State to respect, protect and fulfill human rights, corporations are also obligated to ensure certain standards of working condition for employees in their business. Currently, efforts are required from both fronts to secure the rights of workers and prevent future mishaps. 

The UN Guiding Principles on Business and Human Rights (“Guiding Principles”) recognize the roles of both the State and corporations in securing rights. In furtherance of implementing the “Protect, Respect and Remedy” framework, Principles 11 and 12 emphasize the role of the corporations in respecting the internationally recognized human rights, mentioned in the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, while undertaking business. They also highlight the duty of the State to protect its citizens from human rights abuses by corporations. 

Principle 13(b) of the Guding Principles casts a duty on businesses providing mining equipment such as, excavators, drills, among others to prevent the adverse human rights impacts, that are directly linked with their products, even when the impacts are caused by a third party (i.e. customers). However, none of the three major companies operating in Myanmar’s Jade mining business is making adequate efforts to prevent or mitigate the negative impact their products have in Myanmar.

The companies must conduct human rights due diligence, as provided under Principle 15(b) of the Guiding Principles, and ensure the products are used in accordance with laws and regulations concerning their usage. This necessitates the monitoring of end user of their products. However, reports indicate that currently, companies rely solely on the dealer’s assurance that equipments are used in accordance with laws and regulations.

Conclusion

The lack of regulation and transparency in the mining sector in Myanmar has paved the way to the occurrence of accidents and losses of lives that could be avoided. While formulating new regulations, the Government must increase stakeholder consultation to ensure that grey areas no longer exist. The law must strive to increase accountability of businesses operating in the sector by mandating reporting requirements and imposing a strict Environmental Impact Assessment prior to opening new mines. Given the occupational hazards associated with mining, businesses must be mandated to develop a Human Rights Policy, indicating a commitment to protect the rights of employees.

On the grassroots level, establishing local regulatory bodies would enable better oversight of the protection of rights of people affected by mining, including the workers and indigenous people living near mining sites. Additionally, providing recourses to victims of human rights abuses through Court-led processes would strengthen access to justice.


[i] Fourth year law students at the Gujarat National Law University. The author can be reached at harshilvijayvargiya@gmail.com.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Blog at WordPress.com.

Up ↑

%d bloggers like this: