Home MMBIZ News Myanmar Oil and Gas Firms Set “Global Precedent” by Coming Clean: Group

Myanmar Oil and Gas Firms Set “Global Precedent” by Coming Clean: Group

Twenty-five firms that won major oil and gas blocks in Myanmar over the past year have revealed their real owners, a move that has set “a global precedent” for others, UK-based Global Witness said in a report.

The advocacy group in June blasted the oil and gas companies operating in Myanmar for their high level of secrecy surrounding company ownership, and said it could result in the money being lost to corruption.

“People need to know who is buying up their most valuable assets – this is a global first in one of the places you might least expect it,” said Juman Kubba, analyst at Global Witness.

“All over the world, corrupt politicians and crooked businessmen hide behind secret companies to steal oil, gas and mineral wealth. If Myanmar is to turn the page on a history of cronyism and corruption linked to natural resources, it has to crack this problem.”

Since October 2013, the Ministry of Energy has awarded 36 oil and gas blocks to 46 international companies and private local companies. The revenues from these sales are expected to drive development in one of the world’s poorest countries.

In response to the Global Witness survey in June, all companies investing in 17 of these blocks have now declared who ultimately owns and controls them. Crucially, 10 private companies have provided complete information on the individuals who own and control them, and responded to questions on high-level political connections

Global Witness said armed with this information, citizens can check who these individuals are, and raise concerns over possible conflicts of interest or corruption risks. However, a hard core of 18 companies have not yet declared their ownership, it added.

This development comes amid somewhat mixed progress towards fairer and more open management of the country’s valuable natural resources.

In July, Myanmar was accepted as a candidate of the Extractive Industries Transparency Initiative (EITI), a global anti-corruption scheme for oil, gas and mining firms. However, a month later the government and winning companies signed contracts for onshore oil and gas blocks, the final terms of which have been kept secret. The country’s oil, gas and mining laws are also being revised behind closed doors, and without public consultation, Global Witness said.

This week, Myanmar will host a meeting of the board of EITI in Nay Pyi Taw. Global Witness urged the government to use this event to call for all extractive industry companies to declare their ultimate owners.

“The Myanmar government says it is committed to reform – now it must prove it. It has signed up to the EITI, which recommends publishing information on the real owners of companies.

“EITI requires governments to protect civil society and do deals on the country’s natural resources in the open. Its people need to see evidence of this when the government hosts EITI members,” Kubba said.

There is growing global recognition of the need to tackle secret company ownership. Last year, the G8 announced that its members would require companies to provide information on who owns and profits from them. The UK is due to introduce legislation for a public register of company owners, and the European Parliament has voted in favour of the same. Fourteen countries, including Honduras, the Kyrgyz Republic, Liberia and Tajikistan, are also setting up pilot schemes to publish oil, gas and mining company ownership.

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