Singapore company profited from Myanmar teak exports under junta

While seeking to wind down its timber operations in Myanmar, the global commodities giant Olam has exported more than a thousand tonnes of teak from the war-torn country since the junta seized power three years ago. Olam-owned companies have reportedly played a role in exporting nearly 40 shipments of Myanmar teak worth more than US $2 million since the February 2021 military coup, according to leaked tax data and customs records examined by the UK-based journalism organisation Finance Uncovered for Myanmar Now. These shipments took place after Olam Group’s chief executive publicly confirmed the company would exit Myanmar three months after the coup, as the country descended into a civil war that has seen thousands of civilians killed and millions driven from their homes. Prized for its smooth grain and remarkable resilience, Burmese teak is often used as decking on yachts or turned into luxury furniture and flooring. Known as the “king of woods,” it can sell for thousands of dollars a tonne, making it a highly lucrative trade for Myanmar’s junta and its networks of cronies and associated businesses. Demand for teak from Myanmar, home to the world’s largest natural forests of the valuable hardwood, is the chief cause of rampant deforestation within its borders. From 2010 to 2015 the country’s forests disappeared at a rate of half a million hectares every year, the third-fastest rate in the world. Philippe Maudet, General Manager of Olam Wood Products with teak logs, Yangon, Myanmar(EU FLEGT Facility) Olam bought the wood from the state-owned Myanma Timber Enterprise (MTE), the only body in the country that is legally allowed to harvest timber. A key source of revenue for the cash-starved junta, MTE was among the first entities to be sanctioned by the United States (US), European Union (EU), and United Kingdom (UK) in the months after the military seized power. Olam states that it bought the timber in 2014-15, during Myanmar’s democratic transition, years before MTE was sanctioned. But experts say the military has long controlled the teak trade through its capture of state-owned enterprises and profited from selling off wood seized in conflict-affected areas. “The Myanmar military’s involvement in Myanmar’s teak trade is well documented,” said Isabel Todd, coordinator at the Special Advisory Council for Myanmar, a research and human rights advocacy group. “For decades, the military has used the profits from its vast web of commercial interests to purchase the arms, ammunition and jet fuel it needs to sustain the ongoing commission of grave human rights violations and violations of international humanitarian law against the civilian population,” Todd said. Olam’s most recent cargo of teak harvested in Myanmar was shipped from China to a relative of one of its employees in Texas in August 2023. US imports of Myanmar timber have effectively been banned since 2008 under the Lacey Act, which requires buyers to prove that any wood they imported was not illegally logged or “conflict wood”—a virtual impossibility in Myanmar. Most of Olam’s shipments went to businesses in India—including a firm that exports teak to the US and EU—as well as Singapore, Pakistan, Thailand and the United Arab Emirates. (None of these violated any laws or sanctions.) Olam confirmed that it had sold off its Myanmar timber stocks in the wake of the 2021 military coup, but said it ceased operations in the country as of last year and has paid no taxes to the military since it seized power. “We had no business activities in Myanmar during 2023 and 2024 and we are currently in the process of winding up and closing the business,” the spokesperson said in an email, without specifying when that would occur. Dozens of international shipments Olam became one of the largest players in Myanmar’s timber sector when it bought Concorde Industries Limited (CIL) in 2015 and swiftly opened a factory near Yangon’s port that could process up to 10,000 tonnes of wood a year. The deal came just a few days after the government banned exports of teak logs in a bid to curb deforestation, but a loophole in the law meant processed wood could still be shipped abroad. Speaking at the factory’s launch in 2015, CIL’s general manager at the time, Philippe Maudet, said it would work with MTE to grow the country’s timber sector. Olam said it bought all of its timber stocks from MTE around this time. By the 2017-2018 financial year, CIL had become Myanmar’s top teak exporter, shipping more than 3,000 tonnes in a year, according to the Myanmar Extractive Industries Transparency Initiative. CIL’s exports have slowed since then, but available information reportedly indicates that they did not stop after the military seized power. Leaked Myanmar export records shared by the activist group Justice For Myanmar shows CIL exported 37 shipments of teak products to India, Pakistan, Singapore, and the United Arab Emirates between April 2021 and November 2022. Together they totalled 1,038 tonnes of wood, valued at around US $2.14 million. Public customs data from India reportedly confirmed what was evident in the export data, indicating that at least nine companies imported Myanmar teak from Olam between May 2021 and February 2023. The most prolific buyer was reportedly Bangalore-based Ashok Timber Trading, which bought at least 14 consignments, the customs data showed. None of these shipments were illegal. However, if any of the teak was shipped to the US or EU, it might have constituted a violation of the Lacey Act or the EU’s Timber Regulation, which requires certification that all imported timber was harvested according to the law and without fuelling conflict. The case of Friends Timber Private Limited, which reportedly received four shipments of teak planks, fine-cut timber, and boards from Olam between September and December 2021, appeared to present an example of this kind of violation. Over that period and the following months, the Indian company reportedly shipped teak decking to four US companies, according to customs records. Though it remains unclear if the specific shipment of teak came from Myanmar, one of the US buyers—Florida yacht decking manufacturer Teakdecking Systems—was outed for importing Burmese teak in a 2023 project led by the International Consortium of Investigative Journalists involving Finance Uncovered, as well as an investigation by the Environmental Investigation Agency. Teakdecking Systems said it originally ordered the decking in 2020—before the coup in Myanmar—but the shipment was delayed by the COVID-19 pandemic. The company now only sources teak from certified plantation suppliers, it added in an email. The most recent cargo shipped by CIL also went to the US. Customs data shows that in August 2023, three tonnes of teak parquet flooring that CIL shipped from Ningbo in China arrived in Houston, Texas, destined for one Rishi Kaushal. Analysis of social media posts shows that Rishi is the brother of Sameer Kaushal, the managing director of CIL and a senior vice president at Olam International. Olam confirmed the shipment went to the US, describing it as “for personal use of a relative of an Olam Group employee,” but did not respond to further questions about whether this may have violated the Lacey Act. Sameer and Rishi Kaushal did not respond to requests for comment. Stocks and shares CIL was first granted a licence to trade timber in Myanmar in 2013. At the time, it was owned by Concorde Commodities Pte Ltd in Singapore, which was sanctioned by the EU for providing funding to the previous military junta under Sen-Gen Than Shwe in 2008. This was lifted in 2011. Under the terms of CIL’s investment permit, seen by Finance Uncovered, the company said it would invest US $6 million in wood manufacturing facilities, pay rental fees totalling more than US $200,000 over at least five years and also pay a “land use premium” of nearly US $416,000. According to leaked documents, in the years that followed, CIL was also liable for thousands of dollars in rent every year to Myanmar Economic Holdings Limited (MEHL), a sprawling military conglomerate that controls large swathes of the country’s economy. Announcing sanctions against MEHL in 2021, the US said MEHL acted as a slush fund used to finance the military’s atrocities, including the genocide of the Rohingya. An Olam spokesperson denied the company had made any payments to military bodies since the coup because CIL had accrued “tax credits” in previous years. However, it did not explain how that may have allowed the company to avoid paying rent to MEHL. CIL’s future was called into question when Olam announced in 2019 that it would stop trading timber. Its CEO doubled down after the junta seized power in Myanmar, saying Olam would liquidate its stockpiles and wind down its investment in the country. The Olam-owned company had more than US $7 million worth of wood in its inventories as of the end of March 2022, according to a leaked financial statement, down almost $5 million from 18 months earlier. CIL continued to advertise teak products on its Facebook page until last year, including one post in March that was stamped with the “Olam Wood Products” logo alongside a notice that it was still producing teak products. When a Finance Uncovered reporter called CIL in May this year to enquire about buying teak, staff in the Myanmar office offered to help arrange a sale. They also confirmed that CIL’s head office was Olam in Singapore. A spokesperson for Olam insisted the company had “sold all remaining timber stocks in 2021 and 2022” and had ceased any business operations in Myanmar. “We can only surmise that in the interests of trying to assist an offer may have been made to connect the caller with someone to discuss their needs,” he said. Olam owns CIL through United Arab Emirates-based Panasia International FZCO, which is owned by one of its main divisions, Olam Agri Holdings Pte. Ltd. The Olam Group is owned by Singapore’s investment conglomerate, Temasek Holdings, though in 2022 Saudi Arabia’s sovereign wealth fund bought 35.4 percent of Olam Agri’s shares. Olam Agri is now planning a dual public listing in Singapore and Saudi Arabia. This article was written by Finance Uncovered and Myanmar Now.

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