Home Complaints database Publish What You Pay Australia and 245 Myanmar CSOs vs. Myanmar Metals
Complaint

Publish What You Pay Australia and 245 Myanmar CSOs vs. Myanmar Metals

Myanmar Metals’ irresponsible disengagement from Myanmar

Date filed
14 September 2021
Keywords
Countries of harm
Current status
No resolution
Sector
NCP

Allegations

On 14 September 2021, Publish What You Pay Australia, Myanmar Alliance for Transparency and Accountability (MATA), and the Bawdwin Labour Union submitted a complaint against Australian mine developer Myanmar Metals (MYL) to NCP Australia. MYL holds a 51% interest in a joint venture to develop Bawdwin mine in northern Shan state, Myanmar. The complaint contends that MYL’s planned sale of its interest in late September 2021 to a Myanmar partner, Win Myint Mo Industries Co. Ltd (WMM), fails to meet the standards of responsible disengagement set out in the OECD Guidelines, in three key respects:

1. MYL has failed to conduct appropriate risk-based human rights due diligence in relation to the divestment, including by failing meaningfully to engage with stakeholders.
2. MYL has failed to seek to prevent or mitigate adverse human rights impacts that may arise after the sale of its interest in the joint venture.
3. MYL has failed to be transparent in relation to its decision to disengage from the joint venture.

The Bawdwin mine presently consists of open pit, underground workings, and associated processing infrastructure. The mine has not been operated since 2009. The complainants are concerned that MYL’s irresponsible divestment risks facilitating development of the mine, likely leading to a range of adverse impacts caused by WMM or other business partners, the Myanmar military, ethnic armed groups, or other third parties. WMM does not have a track record of responsible business conduct nor a public human rights policy, and is linked to supporters of the previous military junta. The complainants fear that development of the mine would lead to an increased military presence to secure the area from ethnic armed groups, driving further conflict in the region that particularly impacts women and girls, who have already experienced rape and sexual violence connected to resource extraction in conflict areas in Shan State. The complainants are also concerned about the forced displacement of local communities to clear the way for mine activities. Finally, the complainants believe that if developed under the current regime in Myanmar, the Bawdwin mine would generate revenue for the military junta, thereby contributing to ongoing and severe human rights violations in the country.

Relevant OECD Guidelines

Outcome

The outcomes sought by the complainants were revised following MYL’s November 2021 announcement of the sale of its interests in the Bawdwin mine. The complainants subsequently revised their sought outcomes, including for MYL to provide evidence of their comprehensive risk-based human rights due diligence in relation to its divestment, and for MYL to meaningfully engage with key stakeholders in relation to the same, particularly communities close to the mine.

In May 2022, NCP Australia stated that an alternative examiner had been appointed to consult with the parties and gather information.

On 29 August 2022, NCP Australia published its initial assessment accepting the complaint for further consideration. The NCP offered its good offices to the parties to contribute to the resolution of the issues raised in the complaint. According to the NCP, “The process would involve consideration of what constitutes appropriate human rights due diligence and disclosure in a conflict-affected area in order to achieve responsible disengagement consistent with the OECD Guidelines, and the legal and procedural frameworks to which they refer.” These considerations would take into account several factors, such as: “the enterprise’s size, sector, operational context, ownership and structure, the presence or absence of causal nexus, issues of linkage and the extent of leverage the enterprise had and may have.”

On 21 September 2022, MYL declined the NCP’s offer of good offices. Accordingly, the NCP’s Independent Examiner conducted a further examination of the allegations in the complaint.

On 2 August 2023, the Australian NCP published its final statement. The NCP determined that “the enterprise had not undertaken human rights due diligence or engaged meaningfully with stakeholders in respect of its decision to divest from the BJV, contrary to the OECD Guidelines. The enterprise’s disclosures in respect of activities, structure, ownership and governance, as well as the enterprise’s risk management and relationships also did not meet the expectations set out in the OECD Guidelines.” The NCP also determined:

  • That MYL’s ability to operate responsibility in Myanmar was “compromised by not having a human rights policy and not undertaking human rights due diligence prior to and during its investment in Myanmar, which would have been expected under the OECD Guidelines.”
  • That MYL did not conduct any (adequate) due diligence in respect of its divestment.
  • That MYL “did not seek to prevent or mitigate potential adverse human rights impacts that it may have caused, contributed to or been directly linked with after the sale of its interest in the BJV. This was a corollary of not undertaking human rights due diligence to inform the enterprise of the potential adverse human rights impacts of the sale of its interest.”
  • That MYL failed to meaningfully engage with stakeholders in advance of and in the process of its divestment.
  • That MYL “had also not disclosed material information on matters including structural and business links between the enterprise and certain entities, and the risks of armed conflict.”

The NCP also determined that MYL had not failed to comply with the OECD Guidelines by withholding copies of the relevant agreements in relation to the Bawdwin mine.

The NCP made several recommendations to improve observance of the OECD Guidelines in the future, including for MYL:

  • To develop and implement a human rights policy consistent with the UNGPs and OECD Guidelines.
  • To consult with CSOs as to alleged human rights impacts that have arisen since its divestment.
  • To use any leverage it retains in respect of its former partners to encourage them to undertake due diligence and address and remediate any adverse impacts, and allow a copy of finalised contracts between the companies to be shared with the complainant and other relevant civil society stakeholders.

The NCP also considered that the Australian Government agencies such as Austrade, which were promoting investment in Myanmar from 2017 to 2021, had not assisted MYL in knowing and fulfilling the expectations in the OECD Guidelines: “These Australian Government agencies’ publications and promotional activities made insufficient reference to the importance of undertaking human rights due diligence prior to and during business activities in Myanmar. They also often provided little guidance to Australian enterprises on how to access resources to assist them to implement socially responsible business conduct.” The NCP made the following recommendation in this regard: “To ensure consistency and policy coherence across the whole of government, the Independent Examiner recommends that the AusNCP liaise with government agencies and departments that assist Australian enterprises overseas, including Austrade, with a view to ensuring that the expectation of the Australian Government as to responsible business conduct is adequately reflected in Austrade materials and activities. Such efforts should seek to ensure that government departments and agencies consistently set out expectations and provide guidance on enterprises having human rights policies and conducting human rights due diligence, particularly in the context of high-risk and conflict areas.”

The NCP will follow-up on its recommendations in 12 months.

The complainants published a statement about the NCP’s final statement.

Clancy Moore, CEO of Transparency International Australia, who helped draft the original complaint, made the following statement:

“The final statement shows the company failed in its human rights obligations in divesting from Myanmar and puts the remaining Australian linked mining companies, investors and shareholders still in Myanmar on notice.”

“Any Australian doing business in Myanmar risks enabling the corrupt and murderous junta. To cut the flow of money to the junta, the Australian government should follow the EU, UK and US and widen its sanctions against the junta, its businesses and cronies. This must include state-owned enterprises like Mining Enterprise 1 and Mining Enterprise 2.”

Myanmar Alliance for Transparency and Accountability made the following comment:

“We are pleased with the result of the Bawdwin mine complaint filed against Mallee Resources. We believe the outcome of the complaint will inspire good practice and human rights due diligence among corporations operating in Myanmar at this crucial time. International mining firms must be accountable for their operations and follow international standards on implementing transparency and human rights principle” said the Myanmar Alliance for Transparency and Accountability.

Mia Pepper, National Director of Publish What You Pay Australia made the following comment:

“There are ongoing conflicts in many of the countries where Australian companies operate and where new projects are being developed. Companies need guidance and communities deserve transparency and accountability. It’s irresponsible and dangerous to cut and run when things get tough, leaving communities stranded.”

More details

Defendant
Company in violation
Other companies involved
Complainants
Affected people
Date rejected / concluded
2 August 2023

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