Multinational Businesses and the Plight of the Rohingya

These children are just a few of the thousands of refugees living in Myanmar.
A group of Rohingya children in Myanmar (formerly Burma).

Earlier this week, the BBC asked, “Will anyone help the Rohingya people?”  For the last 40 years, the answer has been a resounding, “No.”

Following the entrance of hundreds of multinational businesses into the Burmese market, hoping to take advantage of a Burma that is now “open for business,” one might be forgiven for hoping that the Rohingya of the New Burma (aka Myanmar) would face a different fate. Yet, even in a more open and democratic Burma, the Rohingya continue to suffer, and there isn’t a single actor — governmental, corporate or otherwise — willing to take responsibility.

The plight of the Rohingya

The Rohingya, an ethnic Muslim minority, has been one of the world’s most persecuted refugee groups since the Burmese military drove more than 250,000 Rohingya into Bangladesh in 1978.  Many of those originally expelled from Burma were forcibly returned by Bangladesh; those remaining in Burma were denied citizenship through the 1982 “Citizenship Law” that remains on the books.  In 1991, the Burmese military reprised its 1978 expulsion of Rohingya, and Bangladesh returned the favor four years later, again forcibly returning many Rohingya refugees to Burma.  Since 1995, the Rohingya have lived mostly along the Bangladeshi border where their freedoms of movement, work, religion and access to basic social services have been severely curtailed.

Approximately 30,000 “officially recognized” Rohingya refugees currently live in United Nations High Commission for Refugees (UNHCR)-run camps in Bangladesh.  These refugees are entitled to certain protections from the UNHCR and the Bangladeshi government.  There are another estimated 250,000 to 300,000 undocumented Rohingya in Bangladesh who receive no such protections.

In 2005, boats began transporting Rohingya refugees and would-be migrant workers to Malaysia, often docking in Thailand to leverage the human-trafficking routes running from there into Malaysia.  In 2012, Burmese authorities and Arakanese Buddhists carried out a campaign of ethnic cleansing against Rohingya Muslims, causing 140,000 Rohingya to flee their homes.  The UNHCR estimates that there are currently 240,000 internally displaced people (IDPs) in Burma, many of whom are Rohingya and other Muslims.  According to Burmese human rights workers, roughly 100,000 Rohingya have fled Burma on boats, which amounts to roughly 10 percent of the Rohingya population.

Last month, dozens of human-trafficking camps were discovered in both Thailand and Malaysia.  Near the camps, almost 150 graves have been uncovered and are still being exhumed.  Recently, the international media reported claims of Rohingya refugee women who were taken hostage at the camps and gang raped by their captors.

The discovery of the trafficking camps led to a crackdown on the entrance of migrants by Thai authorities, which in turn resulted in smugglers abandoning boats full of migrants in the Bay of Bengal and the Andaman Sea.  In mid-May, it was estimated that up to 8,000 Bangladeshi migrants and Rohingya refugees were stranded at sea close to Malaysia and Indonesia.  The BBC reported that at least 10 people had died on one abandoned ship denied entry by Thailand.

The end result is a people without a state and nowhere to go.

The New Burma

Historically a military dictatorship, Burma began to change its ways in 2010, when the military backed a new civilian government and released Nobel laureate and opposition leader, Aung San Suu Kyi, from house arrest after keeping her locked up for 15 of the last 21 years.  In late 2011, Suu Kyi was allowed to re-register her National League for Democracy party, which would go on to win nearly all of the available seats in a 2012 “by-election” that was generally regarded as free and fair.  (The military continued to hold the vast majority of all parliamentary seats.)  As a result of the 2012 election, the U.S. and EU eased — and ultimately dropped — their sanctions against the country.

In 2013, the New York Times applauded Burma’s transition from a military junta to a country with “substantially more open foreign investment laws” and low costs of labor likely to lure foreign investors.  The Times’ tone was generally positive, but it warned potential investors to “make sure that they are not merely enabling a transition from a military dictatorship to military-run crony capitalism.” Meanwhile, human rights groups questioned the timing of the EU’s decision to lift all sanctions against Burma in light of the evidence of government-backed crimes against humanity against Rohingya Muslims.

Women and children await their turn for a consultation at a clinic established by the European Commission to service refugees in Bangladesh.
Women and children wait for consultations at a clinic established by the European Commission to service undocumented Rohingya refugees in Bangladesh.

Foreign investment

In late 2014, Suu Kyi warned that reforms in the country had stalled; yet, Burma saw more than $8 billion in foreign direct investment in FY 2014-15 — $3 billion more than anticipated and double the previous year’s total (not to mention 25 times the $329.6 million received in 2009-10).  The head of Burma’s state-run Myanmar Investment Commission credited the “opening-up of its telecoms sector and the courting of manufacturers and energy firms.”

In response, the Business & Human Rights Resource Center (BHRRC), arguably the leading NGO devoted exclusively to the issue of business and human rights, launched a project to track foreign investment in Burma.  (The U.S. government also requires any U.S. person who invests $500,000 or more in Burma, or invests in Burma’s oil and gas sector, to complete certain reporting requirements.)

As part of its project, BHRRC asked over 115 companies thought to have have a footprint in Burma to provide information on the nature of their investments; their policies and procedures to prevent contributing to human rights abuses; and steps they are taking to develop such policies and procedures.  As of February 2015, 66 companies had submitted a response to BHRRC’s questionnaire, or indicated they are preparing one (a 56 percent response rate).

According to BHRRC’s database, companies currently invested in Burma include such international giants as Adidas, BMW, Chevron, Cisco, Coca-Cola, Ford, Gap, General Electric, Microsoft, Mitsubishi, PepisCo, Samsung, Shell and Unilever.  Those that have not responded include Boeing, Colgate-Palmolive, KFC, Nissan, Procter & Gamble and Suzuki.

The size and scope of these companies’ investments in Burma vary widely.  Coke, for instance, has plans to invest $200 million in the country over five years; Gap, on the other hand, does not yet “own, lease or operate any offices or facilities” in Burma, but does source finished outerwear from factories in Yangon.  Regardless of the current state of their investments, however, major multinational businesses now make up a significant cohort in Burma and, consequently, wield an influence there. As the leading consulting firm, McKinsey & Co., noted in a 2013 report, foreign investment in Burma could “conceivably quadruple the size of [the Burmese] economy, from $45 billion in 2010 to more than $200 billion in 2030—creating upward of ten million nonagricultural jobs in the process.”

Whose responsibility?

Thus far, even Suu Kyi has failed to take a stand against what is happening to the Rohingya, arguably in order to avoid alienating the country’s Buddhist majority in advance of next year’s general election. The response of the international community has been similarly lacking, and the government denies that the Rohingya are even persecuted.

So, what about the multinational companies now exploiting — or poised to exploit — an economy that could quadruple in the next 20 years?  Do they have a role to play?  There may not be any legal requirement compelling foreign companies to abandon the Burmese market, but surely there is some moral obligation to take a public stand against the persecution of the Rohingya.

Burma is, after all, still a market controlled by the government and one subject to rampant corruption. A U.N.-led survey released last year found that “60 percent of the firms surveyed said they had to pay bribes for registration, licenses or permits.”  Last year, Transparency International placed the country 156th out of 175 countries on its Corruption Perceptions Index.  In other words, some nontrivial portion of foreign investment in Burma lines the pockets of government officials, who are likely to be members of a military responsible for serious and continuing human rights abuses.

That isn’t to say that Coke should abandon its dream of peddling sugary drinks to little Burmese children.  But should it not threaten to stop doing so in light of human rights abuses?  Should Adidas, BMW, Chevron, Cisco, Coca-Cola, Ford, Gap, General Electric, Microsoft, Mitsubishi, PepisCo, Samsung, Shell, Unilever and the dozens of other international corporate behemoths not stand up and loudly criticize the Burmese government for its persecution of the Rohingya, threatening to once again leave the country if the government does not improve?

Just imagine if they did.

Image credits: 1) Flickr/Steve Gumaer 2)  EU/ECHO/Pierre Prakash

Michael Kourabas

Trained as a lawyer, I now focus on legal business development, corporate social responsibility (CSR), and business & human rights. My past experience includes work on complex commercial litigation, international human rights advocacy, education policy, pro bono legal representation, and analysis of CSR challenges in both the private and public sectors.