State and military-owned mining conglomerates are among the dozens of companies who have not submitted beneficial ownership information to the Myanmar Extractive Industries Transparency Initiative (M-EITI).
In a report released February 20, the initiative, which promotes transparency in extractive industries through financial disclosures, listed 41 companies that failed to comply with requests for beneficial ownership information.
Beneficial ownership is a legal term that refers to anybody who enjoys the benefits of owning an asset without legally being on record as an owner.
Among the companies that failed to submit information were some of Myanmar’s largest, including Max Myanmar Manufacturing Co. Ltd., owned by tycoon Zaw Zaw; the military-owned Myanmar Economic Corporation; the state-owned No. 2 Mining Enterprise and the Shwe Taung Mining Co. Ltd., owned by businessman Aik Tun.
M-EITI asked 162 companies to submit information on beneficial owners by January 1, 2020, 121 of which complied, according to the report.
Eighty of the companies that submitted information in time complied fully with M-EITI’s transparency criteria. Forty-one included errors or omissions, 30 of which were serious enough to jeopardize those companies’ credibility, according to the report.
The report called “suspicious” several companies whose submissions contained “no mention of any person who is entitled” to share in the company’s profits. These companies included Myanmar Wanbao Mining Copper Ltd., which operates the controversial Letpadaung and Sabae Taung copper mines, and Myanmar Yang Tse Copper Limited.
To meet M-EITI transparency standards, companies must also disclose any owners who are public officials, which they call “publicly exposed persons”.
Despite having senior military personnel at the top of its ownership structure – including commander-in-chief Min Aung Hlaing – the military conglomerate Myanmar Economic Holding Ltd. (MEHL) did not list any politically exposed persons to M-EITI.
On October 2, 2019, president Win Myint ordered companies working in extractive industries to disclose all beneficiary ownership information to M-EITI.
But because the order carried no legal consequences for disobeying it, civil society groups complained, it was destined to be ineffective.
The Extractive Industries Transparency Initiative (EITI) operates in more than 50 countries worldwide.
Myanmar became an EITI candidate in 2014. In March 2017 a tripartite coalition of civilian, state and industry representatives was convened, and in 2018 Myanmar became an EITI member state.
“It’s clear these companies don’t want to follow the rules,” Moe Moe Tun, a civilian representative for the coalition, said in a speech at the report’s launch.
The February 29 report was M-EITI’s first on beneficial ownership within Myanmar’s extractive industries.
