Despite sanctions, Canadians stay on as consultants for Myanmar development project

Employees of Canada’s HATCH company are still reportedly serving as consultants for the Kyaukphyu Special Economic Zone (SEZ) port project in Kyaukphyu Township, Rakhine State despite the the Canadian government’s sanctions against Myanmar junta officials and entities, sources said. The Canada-based company’s personnel have continued to work on the development project as consultants, giving advice on contractor selection and project site management, according to sources familiar with the project. The Kyaukphyu SEZ project is overseen by Myanmar’s SEZ Central Body—on which junta second-in-command Vice Senior General Soe Win serves as chairman—and includes a planned deep-sea port, bridges, and other infrastructure that will enable the efficient movement of trade goods inland from the coastal township of Kyaukphyu. A joint venture shared between Myanmar military-controlled entities and the Chinese state-owned enterprise CITIC, the SEZ project will be backed by an initial investment of US $1.3 billion, with the Chinese partners in the venture responsible for 70 percent and the Myanmar partners holding the remaining 30-percent stake. CITIC and the HATCH company signed a pre-coup contract in May 2019 to conduct topography surveys and an Environmental and Social Impact Assessment (ESIA) for the deep-sea port project. HATCH stayed on in this capacity even after the Myanmar military took power in 2021, according to junta statements and observers of the SEZ. So far, there has been no real action to execute plans for the deep-sea port, according to Htun Kyi, a Kyaukphyu local who monitors major Chinese development projects.“Currently, CITIC and HATCH are still involved,” he said. “However, no implementation has taken place on the ground yet. We’ll have to wait and see whether the Canadian company HATCH will continue to participate given the Canadian sanctions against the military leaders and the military council.”After the 2021 coup, CITIC and HATCH selected a company called the Myanmar Survey Research (MSR) Consortium to conduct the Environmental and Social Impact Assessment (ESIA) needed to initiate the deep-sea port project.Kyaw Hlaing, the chair of MSR, was formerly a member of the Kyaukphyu SEZ project tender selection committee under the administration of Thein Sein, who served as president of Myanmar from 2011 to 2016. Previous reporting by Myanmar Now clarified Kyaw Hlaing’s connection to Myint Thein, the chair of the Kyaukphyu SEZ Management Committee that the military re-established after the 2021 coup. Former Police Brigadier General Myint Thein served under Thein Sein as a deputy minister of railway transportation and of labour and social welfare.According to Htun Kyi, it will be nearly impossible for the deep-sea port project to proceed unless there are negotiations with the Arakan Army (AA), the powerful ethnic armed organisation that has occupied most townships in Rakhine State. Following a large-scale offensive by the AA initiated in November 2023, Myanmar’s military regime has retained control of only three of Rakhine State’s townships: Sittwe, Kyaukphyu, and Manaung. The AA holds control of the state’s remaining 14 townships and is fighting fiercely to capture Kyaukphyu, the starting point of vital oil and gas pipelines in addition to the deep-sea port and industrial zone project sites. The AA’s dominance over most territory in the state and ability to launch attacks on Kyaukphyu could further delay implementation of the project until the junta makes concessions, Htun Kyi said. “Since the battle to capture the town has already begun, it seems they will take control,” Htun Kyi explained, referring to the AA. “If the AA is in charge of carrying out all law enforcement and defence functions in that area, my interpretation is that the project can only go forward once they have their own separate negotiations.”Myanmar’s military council claims to be planning for the full and successful implementation of the Kyaukphyu SEZ project through close collaboration with CITIC and the Kyaukphyu SEZ Consortium.The prospective completion of the Kyaukphyu port also has strategic implications, as it would give China direct access to fuel shipments from the Indian Ocean without the need to use the Strait of Malacca between the Malay Peninsula and Sumatra.The ability to transport fuel directly from the Indian Ocean will also enable development projects in China’s landlocked Yunnan Province, the endpoint of the pipelines that start in Kyaukphyu. Kyaukphyu deep-sea port project design (Photo: SAC Ministry of Information)

Despite sanctions, Canadians stay on as consultants for Myanmar development project

Although the Canadian government has imposed sanctions on junta generals and associated entities, a Canada-based company appears to have remained involved in the Rakhine State development project even after the 2021 coup

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