American companies investing in Myanmar are not making full disclosure on their investment and practices while reporting to the US government about their operations, several NGOs told the US president.
In a joint letter to Barack Obama, 26 NGOs led by Washington-based US Campaign for Burma expressed concerns that these reports exhibit “serious informational gaps.”
The US Administration must correct these oversights and avoid setting a precedent allowing companies to avoid forthright disclosures in future reports, the letter said.
EarthRights International, a human rights and environment NGO that helped draft the letter, called on Obama to ensure companies investing in Myanmar are “complete and forthcoming” in their transactions.
ERI said it found “serious weaknesses” in financial disclosures so far. The group said it wanted the president to tighten transparency measures for Myanmar regardless of the nature of investments.
“We also ask the government to clarify how it is tracking the reporting requirements disclosures to ensure that all covered companies are disclosing fully and in a timely manner,” ERI said.
The US Office of Management and Budget in May said US entities that have new net investments of more than $500,000 need to report on policies and procedures in Myanmar by July 1. The reporting requirements extend to human rights, corruption and any arrangements with security service personnel.
The reporting requirements were intended to help the US government and US businesses manage the impacts of investment and safeguard human rights in Myanmar, as well as to provide the transparency that civil society groups need in order to promote responsible investment.
“In three separate reports, two related investment funds, Capital Bank and Trust Company and Capital International Inc declined to report on their human rights, worker rights, anti-corruption, and environmental policies and procedures, arrangements with security service providers, property acquisition practises, payments to the Burmese government, or even the general nature of their investments in Burma,” the letter said.
The NGOs urged the Obama administration to clarify that all investors in Myanmar are expected to report thoroughly on their activities, even self-declared “passive” investors.
“Passive” investors – just like hands on investors – should explain in detail the nature and scope of their investment and the due diligence, if any, they have conducted, they said.
“International standards concerning responsible corporate investment, including the OECD Guidelines for Multinational Enterprises, which the US has endorsed, demand human rights due diligence from all companies that operate internationally, and apply equally to active and passive investors,” the NGOs said.
However, the letter commended American companies for complying with the July deadline for timely reporting.
Revenue Watch Institute in June gave Myanmar its lowest rank in a report on transparency in the extractive industries.