Pressure grows for sanctions against junta’s oil and gas interests

Pressure is growing on foreign governments as elected parliamentarians and campaign groups push for sanctions on Myanma Oil and Gas Enterprise (MOGE) and state banks, which are now under junta control.

On Tuesday, 40 French parliamentarians called on their government to advocate for EU sanctions against MOGE, describing it as a “significant financial windfall for the junta”.

The parliamentarians also demanded official recognition for the National Unity Government and Committee Representing Pyidaungsu Hluttaw.

In April, six US senators wrote to US Treasury Secretary Janet Yellen and Secretary of State Anthony Blinken urging for sanctions on MOGE.

“History shows that when the junta was previously in place in the 1990s, gas revenues from Total and Chevron/Unocal helped them to withstand international sanctions as their reserves dwindled. This time, we believe that the Tatmadaw must be entirely prevented from accessing a steady stream of international resources,” the senators wrote.

In the same month, the Washington Post published an editorial advocating for action on oil and gas revenue flows to the junta.

“The Biden administration can break this impasse by enacting sanctions on MOGE. These could be tailored to allow Total and Chevron to continue gas production — provided they do not transfer profits. Alternatively, the Treasury department could sanction the bank accounts in Thailand and Singapore that MOGE uses to collect royalties,” the paper proposed.

Civil society pressure

Campaign groups have stepped up efforts in recent weeks.

On May 25, Daniel Eriksson, CEO of global anti-corruption organisation Transparency International sent a letter to European Commission Vice-President Josep Borrell Fontelles calling for EU action on oil and gas revenue flowing to Myanmar’s military junta.

“The junta will likely use [oil and gas] revenues to sustain its control of the government apparatus, finance atrocities against the local population, purchase arms and seize portions for private gain,” Daniel wrote.

The letter called for EU sanctions on MOGE, Myanma Foreign Trade Bank and Myanmar Investment and Commercial Bank, the intermediary banks that collect oil and gas revenue.

Campaigners intensified calls for sanctions in response to an announcement by TotalEnergies and Chevron to suspend dividend payments from the Yadana pipeline project, costing the junta tens of millions of dollars.

On Friday, 408 civil society organisations issued a statement demanding that TotalEnergies and Chevron “support targeted sanctions rather than lobbying for exemptions as you have in the past.”

TotalEnergies Chairperson Patrick Pouyanné told its shareholder meeting last week that the company would comply with any further sanctions.

Human Rights Watch responded to TotalEnergies and Chevron announcement, stating that a suspension of pipeline profits is not enough without targeted sanctions.

“Chevron and Total’s recent decision is a step in the right direction, but it affects less than 5 percent of the natural gas revenue the Myanmar junta receives,” said John Sifton of Human Rights Watch. “To have real impact, governments and companies need to go further to stop the junta from receiving funds or accessing bank accounts that receive payments.”

Human Rights Watch has also drawn attention to the role played by Thai oil company PTT and called ongovernments that have sanctioned military conglomerates to push Japan, Singapore and Thailand to adopt similar measures.

Global Witness called for targeted sanctions and for oil and gas funds to be kept in a protected account, echoing an earlier demand from the Committee Representing Pyidaungsu Hluttaw.

“In order to capture the remainder of these revenues the international community must place targeted economic sanctions on the military’s economic interests in the oil and gas industry. This will ensure that all payments related to the sale of Myanmar’s natural gas are held for the benefit of a future, legitimate government rather than funding the military regime,” said Keel Dietz of Global Witness.

Myanmar was forecast to earn 2,305 billion kyat (about US$1.4 billion) from oil and gas in the year to March 2022, according to a Myanmar budget document drawn up before the coup. The sector is expected to contribute just over 10% of total government revenues this year.

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