YANGON — Five people were killed after Myanmar police opened fire on an armed mob that tried to enter a jade mine in Kachin State, state media reported Friday, the latest deadly incident in a murky multi-billion-dollar industry.

The violence erupted after police blocked around 50 jade scavengers from accessing an industrial plot owned by “111 Company” in Hpakant — the hub of a trade beset by worker unrest, deadly landslides, corruption and drug abuse.

An hour later, “nearly 600 people returned and attacked the police, burning dump trucks and destroying a backhoe,” reported the state-run Global New Light of Myanmar.

“As police were attacked with knives, police opened fire to drive back the attackers,” the state mouthpiece said.

“Five people were killed and 20 people and five police officers were injured,” it added.

Most of the world’s best quality jadeite is mined in Hpakant — a once lush region that has been carved into a barren moonscape by industrial firms linked to Myanmar’s junta-era elite.

The vast majority heads to China where there is a seemingly insatiable demand for the green gemstone which is considered lucky.

In recent years poor workers have also poured into Hpakant to scour the rubble for any hunks of stone passed over by the mining giants.

But the work is laden with danger in an area frequently hit by deadly landslides during the monsoon season.

The worst landslide in recent years left more than 100 dead in November 2015.

Drug abuse is also rampant among miners with cheap heroin and crystal meth easily accessible because of proximity to the notorious Golden Triangle region.

The shadowy industry has also fuelled unrest between Myanmar’s powerful military and ethnic rebels in insurgency-torn Kachin, both of whom are believed to profit from the trade.

While those at the top are raking in huge sums primarily from sales in neighbouring China, there has been little trickle down benefit to local communities ravaged by the environmental degradation.

In a 2015 report, advocacy group Global Witness estimated that the value of Myanmar jade produced in 2014 alone was $31 billion and said the trade might be the “biggest natural resource heist in modern history”.

The Sustainable Development Goals (SDGs) recognise the complexity and inter-connectedness of global development and how factors limiting development are likewise intertwined and mutually reinforcing. Unlike its predecessor, the Millennium Development Goals – which did not fully recognize the complexity of sustainable global development and focused on indicators of poverty rather than causes – the SDGs take a more holistic approach by acknowledging the overlapping and reinforcing nature of the challenges, and identify that solutions must extend beyond the symptoms to the root causes of poverty, including issues of governance, peace, stability and human rights.

A primary underlying cause of under-development is corruption, which robs countries of their wealth, weakens the rule of law and public institutions, and by eroding public trust, destabilises societies. Former United Nations Secretary-General Ban Ki-moon emphasized the importance of rooting out corruption and its impacts on the enjoyment of other SDGs when he said:

“Corruption has disastrous impacts on development when funds that should be devoted to schools, health clinics, and other vital public services are instead diverted into the hands of criminals or dishonest officials. Corruption exacerbates violence and insecurity, and can lead to dissatisfaction with public institutions, disillusion with government in general, and spirals of anger and unrest.”

Investigating corruption is UK-based NGO Global Witness’ clearest contribution to the SDGs. For over twenty years, we have been a leading voice in the global anti-corruption movement, going after the most powerful, corrupt political and economic interests in the natural resource sector. At the heart of our work is an understanding that many of the world’s worst environmental and human rights abuses, devastating conflicts and chronic underdevelopment are a result of the exploitation of natural resources and corruption is a critical, causal factor.

Whether it be shady oil deals in Nigeria, the illegal timber trade in Cambodia, conflict-diamonds from Zimbabwe, American lawyers helping to hide illicit funds in anonymous companies, or the world’s largest natural resource heist in Myanmar (Burma), we focus on these issues with the understanding that rooting out corruption in this key, trillion-dollar sector that fuels our planet and has profound impacts on the environment, climate, and communities is critical in achieving so many of the SDGs.

Related Article: “A FUTURE FREE OF CORRUPTION AND VIOLENCE”

Our investigation of the jade business in Kachin State in Myanmar (also called Burma) is an example of how our work supports the SDGs. This story takes us to a remote corner of northeast Myanmar, bordering China in a placed called Hpakant, Kachin State, the site of the biggest natural resource heist in modern history, the looting of the highest quality, largest deposits of jadeite on the planet. Jadeite is the more valuable of the two types of jade, a translucent green stone so prized in China that the highest quality stones are worth more per weight than gold. However, instead of bringing development, jade has only brought conflict, widespread environmental devastation, endemic drug use, and has torn communities apart, all while former army generals and their friends and families, drug lords and ethnic armed groups make millions off the people’s non-renewable wealth.

While the history of jade in Myanmar goes back millennia, the story of how corruption and conflict came to dominate today’s landscape can be traced back to the 1960s, when an ethnic armed group called the Kachin Independence Army/Kachin Independence Organization (KIA/KIO) first established itself in Hpakant. Jade became the group’s main source of funding for over two decades. Then in the early 1990s, the Myanmar army was able to take control of the jade mines which led to a ceasefire between the two groups that lasted until 2011. Once the army got hold of the mines, they proceeded to give away these valuable deposits to themselves and friends and business associates and some other ethnic armed groups. The ceasefire period saw a scramble for Kachin State’s natural resources – jade but also timber – which made some KIA/KIO leaders and Myanmar military officers and their friends and families very rich.

But for the people of Kachin, the ceasefire brought deforestation, land grabs, and an increasing military presence.

Then in 2011, the ceasefire ended and the profits from the natural resources were used to fund the fighting while control over the mines and access to these profits continues to fuel the conflict. This conflict has displaced over 100,000 people from their homes, with government army attacks in just the last few months leaving thousands displaced and suffering, underlying how Kachin’s natural wealth is truly a curse for its people.

Corruption and conflicts-of-interest mars every step of the jade mining process. The main jade concessions are in government-controlled areas and blocks are awarded through a centrally-controlled process which favours companies connected to powerful figures and high-ranking officials. Under the rule of former junta leader Senior General Than Shwe, companies owned by his family and politically-aligned cronies, including U.S. sanctioned drug lord Wei Hsueh Kang, were awarded lucrative mining permits and allowed to siphon off billions from the country’s most valuable natural resource. Our investigation found that many Chinese investors engage directly in mining jade, providing the funding to secure the best concessions and cover the cost of the expensive mining operations. Once mined, most of the highest quality stones are smuggled out of Myanmar, with little of the taxes and other money from jade actually making its way to the people of Myanmar, let alone Kachin State. In fact, industry sources told us that 50-80% of jade is smuggled directly over the border to China, the world’s biggest market for the precious gemstone.

However, instead of bringing development, jade has only brought conflict, widespread environmental devastation, endemic drug use, and has torn communities apart

In 2015, Global Witness published a landmark report, Myanmar’s “Big State Secret”, which exposed how these military elites, crony companies and U.S.-sanctioned drug lords were creaming vast profits from the country’s most valuable natural resource, while communities endure poverty and environmental hazards, such as landslides and flooding. We found that Myanmar’s jade resources were worth up to an estimated $31 billion in 2014, a staggering amount equivalent to nearly half of the country’s gross domestic product or 46 times the amount the government spent on health care. We estimated that the Myanmar government received under $374 million in official revenues in 2014 – less than 2% of production value. Just imagine what the government could have done with the billions it should have received in jade revenues?

Our report received widespread global media attention and shook the industry in Myanmar. Since then, we’ve been advocating for change to the management of the jade sector, pushing for transparency and supporting efforts to root out corruption and conflicts-of-interest.  As a result of our work (and others) the Myanmar government suspended issuing new and extending existing jade and gemstone licenses last year and committed to a process of revising the policies and laws that govern the gemstone sector. The reform is ongoing and we’re pushing for these changes to incorporate requirements for the disclosure of beneficial ownership as well as payment and licensing information that will increase transparency in the sector and serve as an example for other industries in Myanmar. If done properly, the reform efforts would mean for the first time, companies would be forced to disclose who owns and controls them, and how much they pay the government in taxes and other fees. These are crucial reforms needed so the people and government of Myanmar receive the benefits from this valuable resource.

Although efforts to tackle the corruption that plagues the jade sector in Myanmar seem to be moving in the right direction, there is still much that needs to be done. Before the people of Myanmar can benefit from their natural wealth and move forward on a path of sustainable development, the root causes of the conflict in Kachin State and throughout the country need to be addressed. Rooting out corruption is a necessary pre-condition if the people of Myanmar are to achieve the SDGs goals of eradicating poverty in all its forms and dimensions.

CONTRIBUTING AUTHOR:

Thomas Haitsma, a final year BA International Relations and International Organisations undergraduate student at the University of Groningen, Netherlands. He spent his summer interning at Global Witness where he applied his interests in International Relations and the environment, and is now working on his final thesis on the topic of environmental governance.

By WIN KYAW OO | FRONTIER

WHEN U Than Nyunt gave up on his fish farm five years ago, he began looking for a new business. At the time, some contacts in the timber industry suggested he bid in a privatisation auction for a plywood factory.

He decided against bidding but it planted the idea in his mind, he said.

“I considered setting up my own plywood production business using rubber wood,” said Than Nyunt, who is now managing director of Yangon-based Aung Oo Wood Industry. “I went to China to learn if it was feasible.”

He undertook a feasibility study and decided to take the plunge. He cooperated with Chinese businesses to get access to technical know-how and equipment, and set up a plywood production facility in Kyaikto, Mon State, in 2014. He chose Kyaikto because it was close to the raw materials he needed, had a relatively reliable power supply and decent infrastructure.

He chose rubber wood because it was cheap and abundant (Mon and Kayin states have more than 1.3 million acres of rubber trees between them). When rubber trees get old, they are typically chopped down and sold as firewood. Much of it ends up firing brick kilns between Yangon and Bago.

After a trial run in 2015, the facility opened in early 2016. He now employs around 200 people and produces 500 to 1000 sheets of plywood a day. About 80 percent of the wood is supplied by traders, the rest by plantation owners.

Infrastructure is a major issue. A number of plywood factories have opened in Thanbyuzayat Township, in southern Mon State, but they suffer from a lack of stable electricity. But Than Nyunt believes value-added wood products have a bright future.

“There are still many opportunities to set up similar operations and create job opportunities for young people. They don’t need to go abroad to find their fortune,” he said. “But efficient political and economic leadership is crucial to support the industry’s growth.”

Supporting domestic industries 

In April 2014, the government banned the export of teak logs in an effort to stem deforestation and promote the development of businesses that would “value-add” to locally harvested wood.

Logging, particularly since 1988, has devastated many Myanmar forests, with the country registering the third-highest amount of forest loss globally between 2010 and 2015, after Brazil and Indonesia, according to the United Nations Food and Agriculture Organization. Each year the country lost an average of 546,000 hectares, or 1.8 percent of its total forest cover.

U Myint Thein, a small sawmill owner and wood retailer based in Yangon, said he is expecting the government to develop programs to support SMEs in the timber sector.

“We expect that government agencies such as the Myanma Timber Enterprise will begin dealing directly with private timber businesses in order to help reduce our operating costs,” said Myint Thein, who has been working in the industry for 16 years.

Presently businesses haves to spend a lot of money on brokers’ fees in order to get access to wood from the government, he said. This is a result of bribery and corruption and adds significantly to production costs.

He also hopes domestic businesses will be given priority over foreign buyers at timber auctions.

With domestic wood production businesses still in their infancy, Myanmar’s income from timber exports has dropped dramatically in the wake of the ban.

Ministry of Commerce Statistics show exports in 2013-14, the last fiscal year before the ban came into effect, were almost US$950 million, making it among the country’s top income earners. Last year the figure fell to $142 million, while only $90 million in exports is forecast for 2017-18, said U Aye Cho Thaung, deputy general manager of the state-run Myanma Timber Enterprise.

Aye Cho Thaung said extraction in 2017-18 would be well below what’s known as the Annual Allowable Cut – the amount of timber that can be cut sustainably. The Ministry of Natural Resources Environmental Conservation has allowed MTE to fell 50 percent of the AAC for teak and 30 percent for hardwoods, he said.

Enforcement challenge

But enforcing this limit is difficult due to widespread illegal logging. Myanmar’s porous borders, non-stated armed groups and corrupt officials make it easy for timber to slip out of the country. In 2014 researchers at the International Investigation Agency estimated that timber valued at $6 billion had been smuggled out of the country since 2000.

Aye Cho Thaung said that although the government banned logging nationwide in 2016-17 and for 10 years in the Bago Mountain Range, gangs continued to take wood out of the mountains illegally.

The loggers are often armed, making it dangerous for rangers who try to stop them. Between 2002 and 2017, nine officials were killed and 42 injured while investigating illegal timber trading, state media reported recently.

Pyithu Hluttaw MP U Kyaw Aung Lwin (National League for Democracy, Sidoktaya, Magway Region) told parliament recently that while government officials are often implicated in illegal timber trading, those who try to stop it often face threats.

But illegal logging is not the only cause of forest loss; others include human encroachment on forest reserves and the cutting of timber for firewood.

“Traditionally communities have collected wood in natural foreses,” said U Aye Cho Thaung. “They need to be provided with alternative fuels, such as gas or electricity.”

Meanwhile, “community spirit” among all stakeholders – forest governance, private sector, CSOs, the community around, law enforcement agencies – is crucial to sustain the country’s forests, he said.

U Win Myo Thu, co-managing director of the non-profit organisation Advancing Life and Regenerating Motherland (ALARM), said it was clear that existing timber management systems had been unable to control illegal logging. Unless changes are made, the country’s image will be damaged further, he warned.

Communal interests should be prioritised over those of individuals or a group of people, he added.

“Here’s the question: Is our political economy working for the majority of the country’s people?” U Win Myo Thu said.

The FLEGT effect

In 2003, the European Union adopted a Forest Law Enforcement, Governance and Trade Action Plan. The plan includes something known as the EU Timber Regulation, which requires that importers and traders in the EU deal only in legal timber.

In 2016, an EIA investigation found that many EU-based importers of teak from Myanmar were unable to be sure their timber had come from legal sources. Subsequently, Sweden fined a teak importer after deeming that the documents that came with teak from Myanmar did not prove that it had been legally sourced. Earlier this year, Denmark placed an injunction on Danish companies prohibiting them from selling teak of Myanmar origin.

In June, the FAO said that the government had committed to addressing “gaps” in its timber legality assurance system, based on an analysis completed earlier this year. The report recommended a raft of changes, including internal and third-party checks at the forest level and along the supply chain, and making processes, procedures and data publicly available.

The Ministry of Natural Resources and Environmental Conservation has also committed to no longer using contractors for timber extraction – a practice that had complicated the verification process – starting from this fiscal year.

It is also working with the EU on a voluntary partnership agreement that would facilitate timber exports to the bloc in future.

Aye Cho Thaung said that while FLEGT would create both winners and losers the benefits would be shared more widely if all stakeholders worked together.

Than Nyunt said he supported efforts to control timber extraction for the long-term benefit of all Myanmar people.

“There’s a lot of potential for Myanmar to benefit from the timber sector but we need strict governance,” he said.

“For businesses, we also need a workable operating environment and policies, and financial support.”

U Yaw Gu, chair of Rawang Literature and Cultural Affairs in Putao, told The Irrawaddy that around 10,000 people are expected to participate in the protests.

“Locals don’t agree with expanding the area for Mt. Hkakabo Razi National Park. They believe that it will impact their life negatively,” he explained.

The Ministry of Natural Resources and Environmental Conservation published an announcement that the mountain’s national park would be expanded so that it could earn Myanmar’s first Natural World Heritage Site designation.

The Kachin Political Cooperation Committee (KPCC) published a statement on Sept. 18 condemning the ministry’s announcement and calling on them to stop the implementation of the process.

“We objected to the project due to people’s will. There’s no transparency in it and locals will not get compensation […] for losing their land due to the expansion of the area,” said U Lan Yaw, general secretary of the Kachin National Congress Party.

“We simply don’t want anyone to exploit our land,” he added, citing previous land grabs in the Hukawng Valley Wildlife Sanctuary.

Hkakabo Razi’s landscape is rich in ecological diversity, including rare species of orchids.

Mt. Hkakabo Razi National Park was established in 1996 with an area of 1,472 square miles around Southeast Asia’s highest mountain, located in Putao, Kachin State.

Myanmar’s Forest Department has working with UNESCO since 2013 to designate the area as a Natural World Heritage Site. The Forest Department and UNESCO are now undergoing an intiative to “safeguard natural heritage” in Myanmar. According to a Forest Department announcement, community members from nearby villages have been appointed and trained as park guards in both the national park and the wildlife sanctuary to monitor and report on the illegal activities in the areas.

The tentative list of Natural World Heritage Sites in Myanmar include the Hkakabo Razi landscape, Hukawng Valley Wildlife Sanctuary, Indawgyi Wildlife Sanctuary, Natmataung National Park, Myeik Archipelago, the Irrawaddy River Corridor and the Tanintharyi Forest Corridor. Among these tentative sites, Mt. Hkakabo Razi has been given top priority; the UNESCO World Heritage Committee has already acknowledged all of the potential sites.

Irrawaddy News

History of the Ngo Chang Hka region

The Ngo Chang Hka flows through the mountain valleys of the eastern edge of Kachin State and into the N’Mai Hka. The N’Mai Hka continues southward and joins the Mali Hka at the Myitsone confluence to form Burma’s great Irrawaddy River. The borderlands of the Ngo Chang Hka form part of the eastern Himalayan ecoregion, a place of globally outstanding biodiversity and ancient human settlements.

Records indicate that the Lhao Vo and Lachid peoples first settled along the lower and middle reaches of the Ngo Chang River roughly 2,000 years ago, while the Ngo Chang people, who trace their ancestry back to the Lachid, journeyed further upstream where they established settlements roughly 1,200 years ago. Lisu settlers later arrived in the area. These communities were traditionally ruled by hereditary chieftains or Duwas.

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Soon after, the Myanmar Army, or Tatmadaw, launched offensives against the KIA in the amber and gold-rich area. The build-up and fighting forced thousands of local and domestic migrants who had been working there for years to flee; many of the displaced are now staying at temporary shelters provided by churches in Tanai town.

Then, on August 4, military representative Maj Hlaing Phyu proposed in the Kachin State parliament making Tanai (also known locally as Hukawng) an environmentally protected area, an anti-mining indictment that would essentially drive the KIA from the territory. He argued the KIA had benefited through taxes from illegal mining whereas the state government had lost revenues. His proposal was rejected, however, after receiving 20 votes for and 29 against.

Ten days later, Tatmadaw representatives assigned to Parliament reiterated its policy to protect the resource-rich territory in Tanai and attack the KIA in line with the 2008 Constitution—without need for approval from the government, they said.

The region they are contesting—Tanai—is rich with natural resources, including lucrative pieces of amber resin, some of which comprise extraordinary treasures such as a dinosaur-era cockroach and a 100-million-year-old damselfly.

A Curse

Jade, gold, amber, timber, and iron can all be salvaged in Kachin, potentially generating millions of dollars. Are these natural resources a blessing? Of course, if they are properly managed.

Regrettably, Kachin is faced with what scholars call the “resource curse,” an abundance of natural riches that draw trouble rather than advantage. In essence, countries with great natural resources tend to be more impoverished—or at least to grow more slowly—than resource-poor countries. Kachin proves the theory: people live in abject poverty among a land of profitable reserves.

In Hpakant Township, for example, where millions of dollars worth of jade has been unearthed, locals are denied direct access to mining because large companies control the plots.

A 2015 Global Witness investigation reported that the families of senior military figures Than Shwe, Maung Maung Thein and Ohn Myint hold multiple concessions on jade production which between them generated pre-tax sales of US$220 million at the 2014 jade emporium (the official government jade sale), and US$67 million at the 2013 emporium.

Likewise, many gold, amber, iron mines, and logging enterprises are under the control of joint ventures, militias, the Border Guard Force (BGF), and ethnic armed groups. Arguably, only people who are linked with these groups can benefit from natural resource extraction. Many locals of these areas sell vegetables, work in fisheries, and hunt for their livelihoods.

Ceasefire Capitalism  

Kachin has several armed groups, including the Tatmadaw, KIA and its political wing the Kachin Independence Organization, as well as a BGF, and militia groups Lasang Aung Wah and Danggu Dang, also known as the Rebellion Resistance Force. There is also a militia of ethnic Lisu, and the Red Shan (Shanni) Army. The groups are all believed to hold business assets—particularly involving natural resource extraction—in their territories.

During the ceasefire era, the military regime allowed ethnic armed groups to do business, an act leading to so-called “ceasefire capitalism.” Northern Command commanders wielding considerable power selectively dispensed licenses, permits and business opportunities.

The KIO ran the business conglomerate the Buga Company Limited, which allegedly bought Namti sugar factory from the military government for an estimated 200 million kyats (US$150,000) according to Hpauwung Tang Gun, former Administration Officer of Namti Sugar Factory.

Other armed groups like the National Democratic Army-Kachin (NDAK), which formed into the BGF in 2009, reportedly extracted molybdenum in Pangwah, and militia groups such as Lasang Aung Wah and Danggu Dang reportedly logged timber.

The leaders of these groups were co-opted into new patronage networks exploiting the natural resources of land they controlled with the help of Chinese businessmen, according to the 2014 Journal of Contemporary Asia’s “The Political Economy of Myanmar’s Transition” by Lee Jones.

Economic Institutions

Economic institutions shape the incentives of key actors in society. They not only determine the collective growth of an economy, but also how the pie is divided among different groups and individuals, now and in the future.

Natural resources should, of course, be distributed equally among citizens, and not just benefit so-called “cronies,” military generals, militias, armed groups and the BGF.

Without economic institutions, a country may face what is called “rentier effects” in which the state derives a substantial portion of its revenues from the rent of indigenous resources to external clients. The revenues reduce the need for the government to tax the population, which may hinder the development of a representative political system.

Low-taxed citizens may then soften on holding the government to account, in turn decreasing the pressure to improve the quality of an institution. In a nutshell, when the government raises taxes, citizens demand more accountability.

Economic institutions must manage the allocation of natural resources. But effective institutions are not possible in the vast territories of Myanmar without a federalist system that ensures equal rights and opportunities.

Therefore, the Tatmadaw’s clearance operations against the KIA in order to control resource-laden land will fail to bring additional revenues to the state without effective institutions. Instead, they will lead to further casualties and produce more displaced people that nobody wants to help anymore.

Joe Kumbun is the pseudonym of a Kachin State-based analyst.

Irrawaddy News

Issue : Request for returning the lands confiscated by Yuzana Company in Hugawng

Respected President,

1. We, 8603 local people from Hugawng area would like to request seriously to consider the case related with the above mentioned issue.

2. Since 2007, Yuzana company grabbed the land from the local farmers by destroying our houses, farmlands, orchards, vegetables and trees with big machines but they never gave any compensation to the local farmers. After growing the interest of both national and international level when the news was spread widely, they gave unfair and very small amount of the compensation to the local with pressure to take it. Some farmers received the money because of the various reasons; they did not know the trick of the company, some afraid off, some are very poor. However, there are many farmers still did not accept their offer rate and they still are asking the compensation for their lands according to the real situation.

3. A total of more than 300 houses have been moved as Yuzana Company not has grabbed farmlands and yards but also has force relocation to four villages. The farm lands and other lands being grabbed are from Naungmee, Shuduzut, Bankok, Wahyazut, Nansai, Aungyar, Lajarpa villages within Phakant Township and Shinanpyat, Tainkauk, Naunglonkaung villages within Tanine Township.

4. People who suffer land grabbing became as daily wages employers because they have no lands for their livelihoods. Actually, the villagers living in Hukaung village completely depend on their farmlands and natural forests for their livelihoods. As they lost their main livelihoods, they are now facing the difficulties in their children’ education, health and social issues.

5. The Yuzana Company’ industry situated in Bangkok village has no preparation for the dumping of waste and excretion. The villagers are breathing these terrible smells every day. Moreover, a plenty of fishes eaten and used by villagers are dead as these wastes are dumping into Nansan streams. Besides, villagers are depending on this only stream for the use of water and it is threatening to the villagers for health security with the poisonous water.

6. During the last eight years, the villagers from Huu Kaung region sent appeal letter to authorized persons many times requesting to get back their land which were grabbed by Yuzana Company. Although the local people went for litigation process at local court, any solutions for the grabbed land have not come out till now.

7. In September 2014, a campaign to stop the project of Yuzana Company was held in six villages including Taint Kaut and Naung Lon villages from Naung Mee, War Yar Zwat, Aung Yar, Sha Duu Zawt, and Ta Naing townships. At this event, over 1000 of local people from 10 villages voted and the result showed that 94.94 percent of local people do not want Yuzana company project.

8. The activities incompliance with the laws implemented by Yuzana Company are:

a) This company never released any public announcement or mentioned the information publicly even in the related villages or wards officially for taking land from local farmers. Besides, the lands, housing, orchards, plantations, vegetables and others fruit trees of the farmers are grabbed by the company without having any FPIC or negotiation or agreement from any villagers. At the same time, there was no legal permission from government for getting land like this in Hugawng Area. According to the land Act 1894 section 4(1) and Criminal Act Section 447/427, it showed clearly that they broke the existing rules.

(b) Yuzana Company implemented over 50000 acres which was more than permission and they even started implementing in 10000 acres which had no official license permit from the government yet. Such kind of action of the company totally broke the special order no. 44/91 (Government Order No. 1/98 for the date of 28 September 1998) of land use permit’s code of conduct section 3 (a).

(C) In addition, the company also invaded and destroyed not only on the land of the local farmers but also protected forest area and national park (Hugawng valley wildlife reservation area) in Hugawng valley area. Therefore, company broke the following laws specifically on forest law section 43/44 and wildlife conservation law section 36/E so that government authority must take effective action to the company seriously on what they did.

9. According to investigation team report on land issue of farmers in Parazut village tract, Par Kant township, the local villagers’ farm lands and village lands were grabbed by the Yuzana company in 2015.

10. Therefore, local people in Hu Khaung area would like to request to our president to consider seriously this issue with the following special points.

Special Request ;

(1). To return all the grabbed farmland and village owned land by Yuzana Company to Hu Khaung local farmers with fair compensation

(2). To make sure for returning all village owned lands (farmland, forest plantation, pasture land, grave yard) which fully enough to live and work for the Hugawng local people.

(3). To stop the project implementation of the company and take action strongly for what they had been done so far on breaking the existing domestic rules and exploitation of the local people

(4). To help getting land title registration and other requirement documentations for the local peoples’ safety of the belongings such as land and housing.

Requested by,

Hu Khaung Local Farmers (8603)

(Attached with the lists of the signatures)

CC to

Chairman, Lower House, Nay Pyi Taw

Chairman, Upper House, Nay Pyi Taw

Chairman, Kachin State Parliament, Myit Kyi Na

Chief Minister, Kachin state ministry office, Myit Kyi Na

Wildlife Conservation society (WCS), Yangon

Natural resources and Environmental Conservation Ministry

Yuzana Company

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A brief look at Myanmar’s situation

A 2015 report estimated Myanmar’s jade industry to be worth up to US$31 billion in 2014 alone, which is approximately half of the country’s Gross Domestic Profit (GDP). However, Myanmar’s central government earns almost nothing, as most of this natural resource is smuggled across the borders to its neighbouring countries. Myanmar has also been hailed as the largest producer of opium in the Southeast Asia region, which, in turn, fuels related drug trafficking (especially heroin) activities across its borders. Last but not least, human trafficking remains a growing concern as noted in the 2016 Trafficking in Persons Report.

Understanding the cause of this current state of affairs

Jade

Control of Myanmar’s jade industry has swung back and forth between the military elite and the ethnic rebel leaders for decades. With the army wrestling control from the rebels in the 1990s, proceeds from smuggling vast quantities of jade into China, Myanmar’s top customer, have largely boosted the wealth of the military and their allies while leaving thousands of ethnic miners penniless. Dubbed as the “biggest natural resource heist in modern history”, military leaders stand to lose out on millions of dollars with the implementation of a more transparent jade industry. Thus, fear that Myanmar’s new democratic administration would soon implement such a system has only intensified the rate of mining and smuggling of jade.

Opium

Impoverished remote regions of Myanmar, in particular, Shan Shan in the north, have little choice but to cultivate opium due to poverty and food insecurity. The lack of running water, electricity and accessible roads has resulted in only viable source of income. Opium is sold through a network of secret traders, which is controlled by the various rebel groups and pro-government militias, before being smuggled to China and other Southeast Asian countries.

Human Trafficking

Myanmar is predominantly a source country for men, women and children. Men are trafficked to Thailand and Malaysia for forced labour on the pretext of labour migration while women and young girls are trafficked to China for forced marriage. Due to the poor socio-economic development of the nation, Myanmar’s rural population faces an increased risk of exploitation. This is further aggravated by significant levels of corruption within the governmental institution, preventing law enforcement actors from cracking down on human trafficking activities.

Also, there has been an increasing phenomenon of internal trafficking, where women and girls are trafficked from villages in the central dry zone areas to urban areas with better economic conditions for sexual exploitation. On the contrary, men are trafficked to less populated zones to work in fishing and construction industries.

The importance of eradicating this smuggling problem

Myanmar’s jade industry plays a vital role in incentivising and fuelling armed conflict as the military and ethnic rebels continue to fight over the most precious resource in Myanmar. As a result, “100,000 people have been driven from their homes by airstrikes, shelling and other military offences in the Kachin state” said Paul Donowitz, Global Witness’ Campaign Leader. Kachin is home to the largest jade mining site in Myanmar.

Both jade and opium trafficking have also taken a massive toll on the environment.

The use of explosives and heavy machinery to increase the rate at which jade is mined have striped Kachin’s jungle to a barren landscape of dust and brown. It has also destabilised the earth, increasing the risks of landslides. As a result, miners are at a higher risk of injury and death.

Due to the demand for opium, mountains are being deforested for opium production. Similarly, this exposes the ground for erosion and landslide. The soil becomes barren as a result of intensive cultivation.

There are significant implications from human trafficking. Myanmar suffers an economic and cultural loss from an outflow of its people.

The way forward

In 2016, Myanmar’s new government announced a moratorium on new mining licences and a freeze on all renewals of existing jade permits until a reformed legal framework is in place. While hailed as a “game changer” by Juman Kubba, senior campaigner at Global Witness, it should be noted that the military still holds considerable power as it runs crucial government institutions. This allows them to remain a potent political and economic force in the nation. As a result, they have the power to prevent the implementation of any significant reform, as they stand to lose millions with an increasing demand of jade from China.

As part of a project organised by the UN Office on Drugs and Crime, opium is slowly being replaced with coffee. Coffee is expected to allow farmers to earn a higher income than from opium, which has massive variations in cost price – making it an unstable source of revenue. However, with a strong demand for opium from China and its neighbouring countries, the hope that opium production and its related trafficking would cease is dim at best.

Attempts to curb human trafficking have so far been ineffective due to massive levels of corruption within the system itself, hindering the enforcement of human trafficking laws.

As a concluding note, it is suggested that to aid Myanmar’s current efforts; international assistance is required to crack down on smuggling. In particular, China – as most of the trafficked items are smuggled out of Myanmar through its long boundary line with China. China stands to gain in the long-term, if Myanmar’s jade industry is sustained. Myanmar’s jade has become indispensable to some of China’s border cities local economy. With increased levels of mining to meet the demand of trafficked jade, the sustainability of Myanmar’s jade industry would be threatened. In turn, this could cause the local economies of China’s border cities to destabilise in the long-term. Therefore, Myanmar stands to benefit should China assist in cracking down smuggling at their shared border.

ASEAN Today

YANGON—Energy-hungry Myanmar is in initial talks to buy electricity from China, according to officials and documents reviewed by Reuters, in the latest sign of warming ties with Beijing under leader Daw Aung San Suu Kyi.

Since taking office in April last year, Daw Aung San Suu Kyi has sought to repair relations that were strained when a previous semi-civilian government in 2011 blocked a China-backed dam, which was supposed to send most of its electricity to China’s Yunnan province.

China’s appetite for the hydro project has waned in recent years, as a switch towards less energy-intensive industries amid an economic slowdown has left Yunnan province with a surplus of power.

Instead, Beijing has turned its attention to other projects that fit with its “Belt and Road” initiative, which aims to stimulate trade by investment in infrastructure throughout Asia and beyond.

Three Chinese state-owned companies have proposed separate plans to plug Myanmar’s national power grid into Yunnan’s electricity network, according to documents reviewed by Reuters and two people familiar with the talks.

Rural Yunnan, which generates around 85 percent of its electricity from hydropower, already sends surplus power to more developed eastern China, as well as Vietnam and Laos.

While China has been supplying power on a small scale to some remote Myanmar towns near their shared border, the talks are the first to discuss connecting the national grids of the two countries to meet Myanmar’s urgent demand for electricity.

Blackouts

With only a third of Myanmar’s population connected to the grid and major cities experiencing blackouts, buying electricity from Yunnan could be a short-term solution to boost its power supply, the two people familiar with the talks said.

“China welcomes the plan, but Myanmar is still reviewing the details,” said one of the people, a senior Myanmar energy official. The “government-to-government talks” were still at an early stage, the official added, with details such as price and timing still to be worked out.

“It’s one of the many options we are considering,” the official said.

Htain Lwin, spokesman of Myanmar’s ministry of electricity and energy, confirmed initial talks had taken place but declined to comment further.

Myanmar has been exploring a range of plans to solve its acute energy shortage, from building coal-powered generators to tapping its reserves of deep sea gas. Some international investors and analysts have criticized a lack of clarity in the country’s energy policy.

“Myanmar needs electricity, and if China offers a compelling plan to provide more power, then it ought to be considered,” said Jeremy Mullins, research director at Yangon-based consulting firm Myanmar Energy Monitor.

Memorandum of Understanding

One proposal is from state-owned China Electric Power Equipment and Technology Company Ltd, which signed a memorandum of understanding with Myanmar in March last year to build a high-voltage transmission line running for several hundred miles from the border town of Muse, in northeastern Myanmar, to Meiktila in the center of the country, the documents show.

The agreement was extended for six months in May this year and a feasibility study for the 500 kilovolt (thousand volts) transmission line is under way.

State-run China Southern Power Grid Company Ltd (CSG) proposed a similar plan in June to carry power from Yunnan via a high-voltage cable, according to the documents.

A third plan, proposed by CSG’s subsidiary Yunnan International Company Ltd, would use an existing cable to carry power to Meiktila from Yunnan via Muse, according to the documents and the official familiar with the talks.

The World Bank’s Yangon-based energy specialist, Myoe Myint, said such a project could take up to five years to complete, a quicker solution in comparison with hydropower in Myanmar, where it would take far longer to build and bring online a single dam.

He said rough terrain and instability along the border with China, however, could bring challenges to the power trade. Some 20,000 people in March fled Myanmar’s northeast after fighting between the government and ethnic armed groups.

CSG and its subsidiary Yunnan International declined to comment. China Electric Power Equipment and Technology did not respond to requests for comment.

“Stupid Idea”

While the plan would be welcomed by many in Myanmar, where power consumption is among the lowest in the world, it could stoke concerns about China’s growing economic clout.

Many officials in the Southeast Asian country have been wary of domination by its giant neighbor.

Beijing has been pushing for access to a strategically important port in Myanmar, and in April signed an agreement to pump oil through a pipeline from its western coast to landlocked Yunnan.

“What if China cut off the power trade after our grids are connected? We need to also consider the political situation and stability of the two countries,” said the first Myanmar official.

Some argue that buying electricity from China would mean an outflow of dollars from a country with little reserves of hard currency.

“Myanmar has abundant hydropower resources for power generation,” said a third senior Myanmar energy official, who is familiar with the plans but not directly involved in talks. “It’s a stupid idea to buy it from China.”

Irrawaddy News

NAYPYITAW — The government is losing a large sum on gems and jewelry sales as gems traders smuggle them into China because of a steep trade tax, said U Myint Han, vice chairman of Myanmar Gems and Jewelry Entrepreneurs Association.

“[Gems and jewelry] merchants are smuggling not because they don’t want to pay tax, but because they can’t afford to pay,” said the vice-chairman at a press conference on the first Myanmar Gems and Jewelry Day in Naypyitaw on Thursday.

The tax in question—the Special Commodities Tax Law—was introduced in 2016 for the sales of natural commodities such as teak, hardwood, log, processed wood, jade and gems, as well as fuel, alcohol, beer, and cigarettes.

In 2015, the commercial tax rate was set at 15 percent for raw gemstones such as jade, rubies, sapphires, emeralds and diamonds for foreign trading, but increased to 20 percent under the Special Commodities Tax Law, plus a 5 percent trading tax, and 3 percent service charge by Myanmar Gems Enterprise, meaning the total tax was 28 percent of the price of sold items.

However, it has since been lowered to an overall 18 percent after traders’ protested.

“This tax rate is inconvenient for merchants. And it is also a loss for the country. In China, you can sell as much as you like for just 2 percent [tax],” said the vice-chairman.

Gems and jewelry sales at the jade and gems emporiums have fallen as a result, he said. The 51st emporium in 2014 garnered US$2.4 billion in sales, when the commercial tax was set at 10 percent.

The following year, in the 52nd emporium, sales dropped to $500 million after the tax was increased, and dropped again to $380 million at the 53rd emporium last year.

“I’m sure gems and jewelry can be had for good prices only at the emporium, but not in the outside market. They get the best prices at emporium compared to other places including China,” said U Min Thu, deputy director-general of Resources and Environmental Conservation Ministry.

The tax on gems and jewelry sales has been reduced from 20 percent to 15 percent and the trading tax has been spiked recently following a request from merchants earlier this year, but the service charge remains unchanged. The total tax is now 18 percent, but smuggling persists, gems and jewelry merchants said.

“Some still smuggle even though the tax has been reduced, but not big stones, just small ones. Smuggling has existed for a long time in successive periods, but there is more smuggling now,” a gems merchant told The Irrawaddy on the condition of anonymity.

Under the previous governments, gems and jewelry merchants had to show they had paid taxes once a year, but under the new government they must get tax clearances monthly, with harsh penalties for those who fail to do so.

Parliament is working to amend the Myanmar Gemstone Law for the third time, and jewelry merchants at the conference hoped that these amendments would help streamline tax procedures.

Translated from Burmese by Thet Ko Ko.

Irrawaddy News