Tuesday, November 27, 2012

China in Burma: wooing old customers anew

Wooing old customers anew
Global Times | Yu Jincui in Monywa
Published on November 27, 2012

After a bumpy four-hour drive west from Mandalay, Myanmar's
second-largest city, we landed at the Letpadaung copper mine of the
Monywa copper mining area in the country's northern Sagaing division. As
the mine is under construction, the usually noisy work sites were
abnormally quiet.

The project, jointly developed by China's State-owned enterprise Wanbao
Mining Ltd and its partner, the Union of Myanmar Economic Holdings Ltd
(UMEHL), has come under fire over the past few months.

Some local villagers, with the help of activists and some opposition
parties, have staged several rounds of protests against the project
since June, accusing the mining company of illegally acquiring land and
polluting the environment.

With a total investment of $1.07 billion, the joint development of the
Letpadaung copper mine by Wanbao and UMEHL was approved by the Myanmar
government in 2010. It is scheduled to enter operation in June 2013.
However, the protests have disrupted construction plans.

Protests continue to surge

Construction of the Letpadaung mine, an expansion of the Monywa complex,
covering an area of 7,877 acres, called for the relocation of 442
households from four villages, stipulating land compensation for
residents of 26 villages nearby.

On November 19, another large-scale protest was held against the
backdrop of US President Barack Obama's visit to Yangon. According to
the local Irrawaddy newspaper, the 1,000 protesters included villagers,
students and monks. There were also student activists and protesters
holding signs demanding an end to the mine project outside Yangon
University, where Obama gave a speech during his visit.

The locals are mainly complaining about inadequate compensation and
worrying the project would pollute water, cause health problems and
destroy religious heritage, Soe Sandar Oo, a reporter with the
Yangon-based Myanmar Times, told the Global Times.

Min Zeya, secretary of the 88 Generation Students Group, which actively
helped to organize the protests, told the Global Times that "those
villagers who have agreed to move did so mainly out of fear. Those
protesters are clamoring against the unfairness linked to the project.
There is a great divergence between the villagers and the companies over
compensation. They cannot gain reasonable and legal compensation for the
confiscated land. There is a non-transparent standard at work here."

According to Deng Hengbo, assistant general manager of Myanmar Wanbao,
218 of 442 households have moved to the new villages built for them so
far. The others remain reluctant to move even though nearly all of them
have accepted the compensation amounts, Deng told the Global Times.

The company so far has spent $5.7 million in compensation for the crops
on the land and it will pay $3,400 in rent a year to the government for
each square kilometer. The compensation standard is set based on local
laws. There are over 1,700 acres of land privately developed by the
villagers which have not been officially registered but Wanbao also
compensated them at equal tariffs.

As for environmental concerns, the company says it invited SGS
Singapore, a leading inspection, verification, testing and certification
service to assess the environmental impact every three months to better
control potential ecological problems.

Deng also stressed the project had undergone tests from the Myanmar
National Human Rights Commission and a research group from Yangon
University. However, these did not defuse public worries.

Political targets

The Letpadaung copper mine project is not the first Chinese investment
project to face protests in Myanmar. Last September, Myanmar President
Thein Sein ordered the suspension of the construction of Myitsone
Hydropower Project in upstream Ayeyawady River, a project backed by
China Power Investment, which was sparked by strong public outrage on
non-transparent cooperation and environmental risks.

Certain motivations for the protests may not entirely be aboveboard,
says Geng Yi, managing director of the Myanmar Wanbao Mining Copper Ltd.
"Besides the local villagers, the interference of forces including some
opposition organizations have intensified the conflicts. They have taken
the project as a stage to win political points," Geng told the Global

Some protesters were alleged to have been wearing opposition parties'
uniforms and badges.

A strategist based in Yangon said that as for the latest large-scale
protest on November 19, it was possible that some political forces had
taken advantage of Obama's Myanmar visit to exert pressure on China.

The 88 Generation Student Group emphasized to the Global Times that its
engagement in the protests against Letpadaung project was purely out of
concern for the villagers. Meanwhile, Min Zeya added that for many
Myanmese citizens, the problem lay in the fact the contract was signed
with the military government and was not transparent.

Unclear future

Facing pressure after months of protests, the Myanmar parliament agreed
to establish a special group to investigate the project on November 23,
the final day of the fifth session of parliament. According to a report
by the Myanmar Times, the motion was sponsored by National League for
Democracy member Daw Khin San Hlaing, the representative for Pale in the
Sagaing Region.

It was reported that "an independent, national-level commission composed
of individuals and organizations trusted by the public and local and
foreign experts and organizations" would investigate the Letpadaung
expansion and then issue public findings and recommendations.

An administrative official from Myanmar Wanbao told the Global Times
that they hoped the composition of the group would not include members
with anti-China sentiments.

In light of slogans such as "Stop mining copper plan" and "Myanmar
Wanbao get out," Geng said, "the company needs time to prove to the
Myanmese people the long-term benefits of the project for the government
and the locals."

The Letpadaung project will generate 100,000 tons of cathode copper per
year. After the project goes into operation, between 1,000 and 1,500 job
opportunities will be provided. Those job opportunities will be
prioritized for the relocated villagers.

Than Naing, a 40-year-old local worker on the project, told the Global
Times he was pleased with the current job with a salary of $230, and is
expecting a raise once the project goes into operation. The company is
promising to provide more training opportunities.

The company has also set itself lofty community engagement goals. It has
contributed a lot to building roads and wells, providing free treatment
to local villagers in an established hospital and donated several
schools in the area, vowing to continue these efforts in the future. "We
are hoping to build a harmonious, mutually beneficial relationship with
the local community," Geng said.

A Chinese journalist based in Yangon for many years told the Global
Times that the project should be continued in a mutually beneficial way.

But he cautioned that Myanmar Wanbao would need to engage in constant
communication with the public, respond quickly to any media questions
and doubt and ensure there are no environmental issues.

Tough time for Chinese firms

"This is the toughest time for Chinese investment in Myanmar," Jin
Honggen, economic and commercial counselor with the Chinese embassy in
Myanmar, told the Global Times. Some projects are mired in controversy
and since the Myitsone dam issue, no new investments from China have
come in, Jin added.

According to official statistics, China remains the biggest investor in
the country with a total investment of over $14.1 billion, but hostility
against Chinese investments is on the rise.

"Some Chinese companies in Myanmar, especially those investing in
resource fields, are worrying their interests can't be secured," Jin said.

Although the figures remain guesswork, Geng said that the disruption to
the construction by protests had caused them great losses.

Min Zeya said that for many Myanmese citizens, China and Chinese
companies are on the side of the government, not of the people. Many
people feel that the government has sold out to China in order to keep
money flowing into the coffers and Chinese companies in Myanmar are only
exploring their own interests.

"Those are misperceptions," Jin refuted. For this, he blames China's
poor publicity campaigns in Myanmar.

China has assisted the Myanmar government in building several factories
and infrastructure such as roads, bridges and theaters. Its companies
have built schools, hospitals and roads for locals and donated to
disaster relief funds. However, these have not been well communicated to
the public.

"Foreign investment in mining, oil, and gas is always controversial,
because of the perception that precious resources are being exploited by
outsiders. Since there are many Chinese investments in Myanmar,
naturally there will be many protests," Michael Kugelman, South and
Southeast Asia associate at the Woodrow Wilson International Center for
Scholars based in Washington DC, told the Global Times.

"It is important to improve firms' capacities to anticipate possible
sources of opposition, whether real or perceived. Firms will need to be
more transparent about the terms in their contracts, and will need to be
very clear on important issues such as compensation and employment,"
Kugelman said.

This is International Rivers' mailing list on China's global footprint, and particularly Chinese investment in
international dam projects.

You received this message as a subscriber on the list: chinaglobal@list.internationalrivers.org

To be removed from the list, please visit:

No comments:

Post a Comment