Foreign-investment-induced conflicts in Myanmar - The Monywa Copper Mine

Foreign-investment-induced conflicts in Myanmar - The Monywa Copper Mine

In Monywa, Myanmar, something remarkable is happening after decades of rule under an oppressive military regime: The people are finding their voices, and it is making a difference. It started with a series of protests against a copper mine in the Letbadaung Mountain area, protests that then consolidated into a grassroots movement and the formation of Save the Letbadaung Committee (SLC). SLC is comprised of a group of concerned citizens fighting for their own community rights in a copper mining area that, until recently, had always been controlled by the government and outside investors, the most recent of which are from China. On December 7, 2012, the group sent a letter to the President of the People’s Republic of China, raising their concerns about the mining project and suggesting that an immediate shutdown was needed to preserve the friendship between China and Myanmar. They wrote, “This copper mine at Letbadaung [the other side of Monywa] has caused a lot of environmental problems among some 26 villages, giving people mountains of trouble in their livelihood, health, and other social problems.”

Believing that this letter would be taken into account by Chinese authorities, they declared

We, the people of Monywa, value Letbadaung as the most precious gift of nature and as the most beautiful scenic spot of our town. We can’t lose the Letbadaung Mountain in its entirety. We don’t want any mining project there, regardless of who may run it. We don’t want the mountain to get destroyed. We want always to have it as it is. We can’t exchange our beautiful mountain for money or gold or development. The copper mines rob the people of Monywa of their most treasured jewel.[1]

SLC raised several key points in framing their concerns about the Chinese mine: The Chinese are not the first to invest in resource extraction in this area. In fact, locals witnessed what Ivanhoe, a Canadian-owned mining company, did to their environment in the 1990s. However, under the military regime at that time, public outcry of any degree was impossible, regardless of how destructive the mining activity was. Now with democracy taking hold, locals are being given a chance to raise their own voices. The protests that have emerged against the investors and their government associates are the very first of their kind in this part of Myanmar.

The Monywa region has long been known for its rich natural resources, especially high-quality minerals such as copper. The British started exploring the area for minerals as early as the 1930s; in the 1950s, the Myanmar government invited Yugoslavian counterparts to conduct a survey in order to confirm the volume of copper deposits. The Myanmar Socialist government under Ne Win started mining in 1984 at a production rate of 8000 tons per day. Large-scale extraction was started 10 years later, when Myanmar Ivanhoe Copper Co., Ltd. (MICCL) was established through a 50/50 joint venture between the Canadian-owned Ivanhoe Mines Ltd. and the state-owned Mining Enterprise-1. MICCL’s extraction concentrated only on the Sabetaung and Kyisintaung mountain areas, which are about a 40-minute drive from Monywa.

During the project term agreed to by the military government, Ivanhoe also sought the right to develop the deposit at Letbadaung, which is only 6 km away from the Sabetaung–Kyisintaung Mine. In a 2007 report, Ivanhoe estimated that the ore and mineral reserves in the previously untouched Letbadaung deposit were more than 200 times greater than the reserves of the Sabetaung deposit. However, increased tension with the Myanmar military government prevented the company from exploring the new area. According to a diplomatic cable from the American embassy in Yangon, which was released by WikiLeaks in 2011, communications between the MICCL and the Myanmar Ministry of Mining had been deteriorating since early 2000. Due to a disagreement on profit allocation, outside pressure from pro-sanction exile communities, and a lack of compromise from the Myanmar Ministry, Ivanhoe decided to divest its shares in 2006. Ivanhoe eventually revealed to the US embassy that Tay Za – one of the closest allies of former military leader Senior General Than Shwe – brokered negotiations with Wanbao Copper Mining Company, a Chinese-owned company and subsidiary of the Chinese state-owned arms and machinery manufacturer Norinco, which won the bidding process to purchase the shares of MICCL. 

In 2010, Wanbao formed a new joint venture with Myanmar Economic Holdings Limited, which was the economic arm of the former military government. As soon as the Chinese company started operation in Letbadaung, which was still largely untouched by the previous investors, voices of discontent from the public sphere began to get louder. Since mid-2012, grievances against the government and Chinese company have steadily grown as demands have gone unheeded by investors. The local people claimed that 7,800 acres of land were unlawfully confiscated, affecting the livelihoods of people from 26 villages. Human rights violations were also reported as people were forcefully relocated by the authorities. In addition to the lost land, the dumping of large amounts of contaminated soil on disputed land – raising concerns over the project’s environmental and health impacts – also contributed to the anger fermenting among the people.

Many rounds of protests supported by diverse civil society groups from all across Myanmar have taken place since June 2012. Authorities had been persistently trying to avoid the worst-case scenario: suspension of the project. Some parts of the government – regardless of the difficulty posed in controlling the community’s social movements – gave priority to protecting the project site, as requested by the Chinese embassy in Yangon. The local government of the Sagaing Division tried to prevent local community members from accessing the occupied land by enacting Section 144 of the Criminal Procedure Code, a law which is used as a regulation to prohibit villagers from accessing their farmlands and pastures.

In late November, in response to a parliamentarian proposal to conduct an independent investigation into the impacts of mining on local communities, and despite the threat of huge financial losses for the investors, the government decided to suspend mining activities. However, before any investigation had been started, the government declared that all demonstration camps be demolished by midnight, November 27. In the early morning of November 29, at 3 a.m., the government decided to implement violent crackdown methods against its own people. Although the grassroots demonstrations were peaceful by any measure, riot police used means of control designed only for violent crowds, such as the use of tear gas and water cannons. Local media reported that the tear gas alone was not sufficient to cause the burnings in the demonstration camps, leading many to suspect that the government had used phosphorus bombs. People were arrested under the criminal code and some 50 locals, including Buddhist monks, were badly injured when the demonstration camps were set alight. The Letbadaung protests have grown to become a national cause, with the public sphere hosting a lively debate questioning the responsibility and accountability of the government members who initiated this project. An investigation committee led by Daw Aung San Suu Kyi was formed as an immediate response in the aftermath of the crackdown. Despite the opposing voices from the local community and environmentalists, the investigation committee recommended the continuation of this controversial project. Ecodev, a leading local environmental organization, finds the report is weak in measuring the environmental and social impact on the community. Mr. Win Myo Thu from Ecodev said the recommendation of the commission failed to respect the community rights.   

After the $1 billion dollar project was suspended, regional media have questioned why this investment in particular has been repeatedly challenged by local communities when similar projects have been carried out in the past without protest. What contributes to the instability of Chinese commercial interests in Myanmar, especially when it comes to investing in the resource-extraction sector?

Firstly, Chinese investments in megaprojects – such as the gas pipeline linking the western coast of Myanmar to the Yunnan province of southwest China; the suspended Myit Sone Dam; and now the Letbadaung mining project – were realized with the agreement of a de facto government rather than a de jure government. When the Myanmar government started to transform itself into a democratic government, the old safeguards for Chinese business interests began to fall away. Because parts of the government had adopted a reformist stance, China lost many loyal friends inside the government. People are also more curious about the terms and conditions of old contracts made between investors and the government. The old methods of unfair resource exploitation are not tolerated anymore, as people are demanding greater fairness and transparency. In the past, and under the iron heel of the military, no one was there to monitor the deal made between the former military government and the Chinese investors. When newly-found freedom blossomed in Myanmar, people were eager to use all the space available to demand transparency from the government, whose decisions impact their daily lives.

Moreover, none of the hasty Chinese investments, including the copper mine, conducted a proper environmental or social impact assessment. At the same time, local people were never properly informed, and in-depth consultation with community members was largely nonexistent. Furthermore, civil society is now better equipped with information and resources, making it easier to raise community awareness. They try to provide the public with information regarding health and environmental risks associated with such a large mining project. In addition, they have seen some success in advocating for social justice. Finally, several decades of military rule taught them that government accountability is crucial for human security, and the time has come for them to exercise this knowledge in their fight for justice.

The letter to the Chinese president is merely an example of this small community’s efforts on the long road to justice. The people are not necessarily targeting the Chinese business; however, from experience, the people are fully aware that many Chinese investors associated with the junta – who ruled the country with arbitrary measures – for the sake of their own power and commercial interests. It is no surprise that the Chinese have a rather unfavorable image within Myanmar, resulting in a strong sense of caution when it comes to Chinese investments, without distinguishing between the government, the people, or the businesses, and especially when it damages local livelihoods and local security.

In the Letbadaung case, no compensation was great enough for the people to allow their whole landscape to be marred by the demolition of a religious site – an important part of their cultural heritage – and the dumping of radioactive soil on the community’s land and river. U Soe Thein, Chairman of the Myanmar Investment Commission, publicly admitted that the government was not aware that the project site contained massive farming areas and local residences, and that allowing this investment was a huge mistake. The next steps for the Myanmar government are to consider how they can remedy this mistake, heal the wounds embedded in the minds of the people, and more importantly, how they can avoid repeating the same mistake in the future.

[1]     The letter was sent to the Chinese Embassy in Yangon. There has not yet been an official reply from the Chinese side. However, the Chinese embassy has sought consultation with some local environmental NGOs and experts.

 

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This article was first published in the issue of Perspectives Asia #1.

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