Report: Pipeline pumps billions in Myanmar junta's pockets

Report: Pipeline pumps billions in Myanmar junta's pockets - Summary
Posted : Thu, 10 Sep 2009 11:59:32 GMT
Author : DPA

Print this article email this article Comment on this article
Bangkok - Myanmar's ruling junta is hiding billions of dollars in revenue from natural gas sales in two Singapore banks, a Washington-based human rights group claimed Thursday. EarthRights International (ERI) said international pressure would not work against the military government as long as it has vast sums of easily funds and the world community needs to put pressure on the banks in question.

ERI claims in a report released in Bangkok, "confidential and reliable" sources said Singapore's Overseas Chinese Development Banking Corporation (OCBC) and DBS Group are "offshore repositories of Yadana gas pipeline revenues."

Since commercial production started on the Yadana gas pipeline in 2000, Myanmar's government has earned about 4.83 billion dollars from the sale of natural gas to Thailand, ERI said.

Through using an old exchange rate of 6 kyat to the dollar, instead of the current value for Myanmar's currency of nearly 1,000 kyat to the dollar, only 28 million dollars of that revenue made it into Myanmar's national budget. The remaining roughly 4.8 billion dollars has been deposited in accounts in the two Singapore banks, the 110-page report said.

The two banks in question have so far declined to comment. A DBS spokesman told the German Press Agency

Copyright, respective author or news agency http://www.earthtim es.org/articles/ show/285098, report-pipeline- pumps-billions- in-myanmar- juntas-pockets- -summary. html
============ ========= ========
Myanmar junta siphons gas revenue offshore-report
Thu Sep 10, 2009 7:01am EDT

BANGKOK, Sept 10 (Reuters) - Myanmar's military has transferred billions of dollars from a gas project into two banks operating in Singapore, contributing to "high-level corruption", a U.S.-based environmental group said on Thursday.

A report by non-profit Earth Rights International (ERI) said the junta had transferred $4.83 billion since 2000 from a gas pipeline, money that was kept off the national budget and stored in the banks operating in the city-state.

"Rather than contribute to Burma's economic development, the billion dollar revenues from the project have instead contributed to high-level corruption," the report said. The money, it said, came from the controversial Yadana gas project involving energy companies Chevron Corp (CVX.N) of the United States, France's Total (TOTF.PA) and Thailand's PTTEP (PTTE.BK).

The two banks and the Singaporean government were informed of the group's findings last week, ERI said. All had yet to respond.

"As long as Myanmar's regime has easy access to these funds we feel it will have little incentive to change," Matthew Smith, one of the report's authors, told a news conference.

"We urge the international community to use this as leverage to help the people of (Myanmar). We fully expect the Singapore government and the banks to do the right thing."

Despite a broad range of sanctions placed on Myanmar by the United States and the European Union because of political repression, its vast reserves of natural gas have been a financial lifeline for the regime. (For a factbox on sanctions on Myanmar click on [ID:nLD673386] )



ERI estimated the military government had received 75 percent of the revenue generated by the Yadana pipeline, which runs from the Andaman Sea to western Thailand.

ERI said the junta managed to keep the $4.83 billion off its national budget accounts by using a 30-year-old exchange rate from dollars to the local kyat currency, which produced a sum in kyat far smaller than the real amount generated.

"Singapore has very tight laws regarding corruption and misappropriation of public funds," Smith said. "These accounts should be red-flagged until the banks have the opportunity to cooperate with the authorities."

China's largest oil and gas producer, the China National Petroleum Corporation, is due to start construction of nearly 4,000 km (2,485 miles) of dual pipelines from Myanmar's western Arakan State to China's Yunnan province next month. [ID:nBKK40759] .

The deal is expected to provide the government, which has ruled the country since a 1962 coup, with at least $29 billion over 30 years. (Reporting by Bangkok Newsroom; Editing by Alan Raybould and Nick Macfie)

© Thomson Reuters 2009 All rights reserved http://www.reuters. com/article/ fundsFundsNews/ idUSBKK356607200 90910?rpc= 401 &
============ ========= ====
China tip-off 'sparked' fighting

Myanmar said information about the arms cache came during a meeting on transnational crime [Reuters]

A senior Myanmar official has said that last month's clashes in the northeast of the country were sparked after a Beijing tipped them off about the location of an illegal arms factory.

Up to 30,000 people fled across the border from Kokang into northern China during the fighting which followed the raid on the arms factory in the mainly ethnic Chinese region.

An estimated 37,000 refugees streamed across the border from Myanmar into China's Yunnan province, but many of them have reportedly returned home in recent days.

Myanmar officials showed a number of diplomats and journalists around the site of the purported factory, which was raided by troops on August 8.

During the visit, Brigadier Phone Swe, Myanmar's deputy home affairs minister, said that Chinese officials informed them about the factory during a ministerial meeting on combating transnational crime.

Phone Swe's comments appeared to be an attempt to show that relations with close China remained on a steady keel, after a rare public request from Beijing that Myanmar calm the situation which had led to the influx of refugees.

Economic ties

China has maintained close economic and diplomatic ties with Myanmar's military government, largely estranged from the West, ensuring China's access to its mineral wealth.

Michael Vatikiotis, the regional director for the centre of humanitarian dialogue, said that the area had become a strategic concerns for China.

"They [China] have made it very clear to the Myanmar authorities that the want to see stability"

Michael Vatikiotis, regional analyst
"One of the reasons for their concern is that they have just signed and prepared for the construction of oil pipelines that run from the coast of Myanmar up to the border and across to Yunnan," he told Al Jazeera from Singapore.

"They have made it very clear to the Myanmar authorities that the want to see stability."

However, Vatikiotis said that Beijing was unlikely to throw its weight behind the ethnic Chinese over the border in Myanmar.

"I think that is not very much in character with China which is a great respecter of sovereignty, I think what they have been supporting until now is the status quo."

Earlier, the Myanmar government had said that the fighting had begun after ethnic Chinese raided a police checkpoint and took 39 police officers hostage.

Full-scale fighting broke out after 15 of the hostages were killed, and according to state media in Myanmar the clash left 11 soldiers and eight ethnic Chinese rebels dead.

Myanmar officials have claimed that calm has been restored in Kokang but many refugees remain unconvinced.

Election agreement

Meanwhile, the new leader of an ethnic Chinese political group said he would participate in general elections next year, the first in nearly two decades.

The issue of whether to take part in elections has been a point of contention among ethnic groups, which are being asked to put down their weapons and join the government-controll ed border guards.

Fighting has forced some 30,000 refugees to flee across the border into China [AFP]
Phe Sauk Chen, the head of the new Kokang Region Provisional Leading Committee, which was formed after other local leaders fled, told reporters during Tuesday's trip that his group also agreed to join the government's border security guards.

So far the larger ethnic groups, including the Kachin and the Wa, which has a militia estimated at more than 20,000 fighters, have refused to take part in elections.

But the issue caused division and led to the resignation of five senior leaders from the Kachin Independence Organisation earlier this month.

Aung Din, executive director of the US Campaign for Burma [the country's former name], said the leaders planned to take part in the polls.

Critics have called the scheduled elections a sham designed to cement the military's grip on power. The Kokang were the first among 17 armed ethnic groups to reach a peace agreement with the government in March 1989. http://english. aljazeera. net/news/ asia-pacific/ 2009/09/20099106 237748444. html
============ ========= ========
Junta Gas Profits Stashed in Singapore Banks: ERI
By SIMON ROUGHNEEN Thursday, September 10, 2009

At a Bangkok press conference on Thursday, Earthrights International (ERI) launched two reports alleging that oil giants Total and Chevron are linked to “forced labor, killings, high-level corruption and authoritarianism” in Burma.

The reports, titled “Total Impact” and “Getting it Wrong,” examine how revenue from the Yadana gas project sustains military rule in Burma and undermines Western sanctions.

The NGO also said that two Singapore-based banks—Overseas Chinese Banking Corporation (OCBC) and DBS Group—function as “offshore repositories” for junta revenues accruing from the Yadana gas project.
Security guards gesture to photographers to stop taking photos of the DBS Group bank in Singapore in April. The bank is accused of laundering the Burmese junta’s siphoned gas profits. (Photo: Reuters)

The report said that Burma’s ruling State Peace and Development Council has earned almost US $5 billion from the gas pipeline project.

By using an outdated exchange rate, the junta declares a fraction of the revenues to the State budget, enabling it to siphon the rest off. The junta calculates revenue at just 6 kyat to the dollar when the de facto rate is closer to 1,000.

According to a confidential International Monetary Fund (IMF) report obtained by ERI, revenue "contributed less than 1 percent of total budget revenue in 2007/08, but would have contributed about 57 percent if valued at the market exchange rate."

The report says these rates allow the regime to list a mere $29 million of the Yadana earnings, leaving around $4.8 billion unaccounted for, which ERI believes to be lodged in the Singapore banks.

ERI’s Matthew Smith said that the information about offshore accounts in Singapore comes “from confidential and reliable sources,” but could not go into more detail.

“We expect the Singapore government and banks to do the right thing based on Singaporean law relating to money laundering, which prohibits any such transactions and requires banks to report these,” he added.

According to Smith, the two banks were informed in writing during the past week about the content of the reports, but ERI has yet to receive a response.

ERI is an environmental NGO based in the US, but was founded by Ka Hsaw Wa, an ethnic Karen and former Burmese student activist in exile since his involvement in the 1988 demonstrations against military rule.

ERI says that Total, Chevron and the Petroleum Authority of Thailand Export and Production (PTTEP)—the other non-Burmese company involved in Yadana—have earned a combined $1.3 billion since commercial production started in 2000.

The gas is piped into Thailand where it generates electricity for the Bangkok area, and in total makes up 60 percent of Burma's gas exports to Thailand. Total has been a major investor in the Yadana project since 1992, holding a 31.24 percent stake, with Chevron on 28 percent.

In a recent Newsweek interview, Total CEO Christophe de Margerie said that critics of the company's operations in Burma can “go to hell,” adding that the gas imports into Thailand have helped reduce air pollution in Bangkok.

In a June 26 letter to ERI published in the “Total Impact” report, Vice-President Jean-Francois Lasalle refused to answer a number of questions sent to Total by ERI. According to the letter, this was because ERI “presents allegations as facts,” and is “more interested in harassing our companies, in line with a divestment agenda, than in a real dialogue about how to improve people's lives.”

Total has cited its socioeconomic work in the pipeline area, and the “overall improvement in living conditions for the 50,000 people” who live in the pipeline area. Total refers ERI to a report by US-based CDA Collaborative Learning Projects, which gave the findings of a 20-day impact assessment of the oil company's operations related to the Yadana project.

However, the positive CDA report was dismissed as a whitewash by ERI, with report author Naing Htoo saying CDA’s methodology was deeply flawed, given that CDA lacked autonomy after being hired by Total to do the impact assessment.

ERI accuses Total and Chevron of complicity in human rights abuses throughout the history of the project. While the oil companies claim abuses have ceased, Naing Htoo says that this is “simply untrue.”

The authors quote locals living in the pipeline area, and the report’s authors say that “forced labor, killings and other abuses are being committed by Total and Chevron's security forces while the companies mislead and lie to the international community about their impacts.”

ERI said it believes that the impact of the CDA assessments is troubling, as these could be taken at face value by other oil companies and policymakers, in turn potentially having an impact on the issue of sanctions and engagement with the Burmese junta, based on false or flawed premises.

ERI said that the gas revenue windfall insulates the country's military rulers from the impact of international sanctions, which were tightened after the August 11 verdict returning Aung San Suu Kyi to house arrest.

Total and Chevron have operations in Burma that pre-date the introduction of US and EU sanctions, so are not bound by those. In any case, EU sanctions against Burma currently only cover arms exports, wood, minerals, gems and metals, thereby exempting Total.

Elf, a former French oil company now part of Total, was complicit in numerous corruption scandals involving shady deals with African petro-states, before three senior Elf executives were jailed and the company merged with Total.

“As long as the regime has access to such vast revenue it has little incentive to reform or change,” Smith said. “The elites are hiding billions of dollars of the people's revenue in Singapore, while the country needlessly suffers under the lowest social spending in Asia.”

As well as long-standing rumors about Burma’s resource revenue being stashed in Singapore, the ill-gotten gains of elites in North Korea and Zimbabwe are also thought to be held in the city-state.

US financial giant Merrill Lynch estimates a third of Singapore's 60,000-odd millionaires are Indonesian, whereby Jakarta's wealthy beneficiaries of corruption and cronyism have moved their holdings away from the anti-corruption efforts undertaken by President Yudhoyono.
Copyright © 2008 Irrawaddy Publishing Group | www.irrawaddy. org
http://www.irrawadd y.org/article. php?art_id= 16762
============ ========= ====
Junta Media Highlights North Korean Anniversary
By WAI MOE Thursday, September 10, 2009

Burma’s state-controlled media reported on North Korea’s 61st anniversary celebration on the front page of The New Light of Myanmar on Thursday, reflecting the junta’s close relationship with Pyongyang.

The paper reported that Lt-Gen Tin Aye, the chief of Military Ordnance and head of the Union of Myanmar Economic Holding Ltd, attended the anniversary celebration of the Democratic People’s Republic of Korea held in a hotel in Rangoon on Wednesday.

Rangoon Mayor Brig-Gen Aung Thein Lin also attended the North Korean party. Both Tin Aye and Aung Thein Lin have traveled to the Communist country for arms deals between two states.

North Korea and Burma officially reestablished diplomatic ties in April 2007. Burma cut relations with North Korea in 1983 following a bomb attack by North Korean agents on a visiting South Korean delegation led by then President Chun Doo Hwan. Chun Doo Hwan narrowly escaped death or injury, but four South Korean cabinet ministers and 13 other officials were killed by the blast.

Renewed North Korea-Burma ties have been highlighted in international media recently because of reports that said North Korea has provided arms and technology to the Burmese military.

The state-run newspaper ran the North Korean anniversary story on the front page. The Korean Central News Agency did not report on the Rangoon event.

Burma and North Korea both give priority to the role of the military in their country’s affairs.

Since 1994, the North Korean People’s Army was granted the “supreme repository of power.” Since 1962, the Burmese army has played the leading role in governing the Union of Burma.
http://www.irrawadd y.org/article. php?art_id= 16759
============ ========= =====