Unions, civil society groups file OECD complaint against Italian steel company Danieli over Myanmar military collaboration

Italian industrial giant Danieli Co., Ltd. is again under fire for its hushed involvement in Myanmar’s steel sector as civil society groups and trade unions filed a formal complaint with the Organisation for Economic Co-operation and Development (OECD) this week accusing the company of grave rights violations through its engagement with the military. Rome-based advocacy group Italia-Birmania Insieme (Italy-Burma Together), the Federation of Italian Metal Workers Union, the Confederation of Trade Unions Myanmar, and the Pa-O Youth Organisation (PYO) announced they had submitted the complaint to the office of Italy’s National Contact Point (NCP) on Tuesday. Italy’s NCP is supported by the country’s Ministry of Economic Development and is mandated with advancing the OECD’s 2011 Guidelines for Multinational Enterprises, a series of recommendations by adhering governments to promote responsible business conduct. One of the world’s leading steel manufacturers and plant makers, Danieli was confirmed through a Myanmar Now investigation published in June to have been involved in recommissioning the No. 1 Steel Mill in Mandalay’s Myingyan Township under Myanmar’s junta—a task for which military chief Min Aung Hlaing himself was infamously photographed thanking uniformed Danieli staff on-site with a fruit basket. Once fully operational, the facility will serve as the country’s largest steel production site. Three ‘foreign experts’ from Danieli accept a fruit basket from Myanmar military dictator Min Aung Hlaing for their work at the Ministry of Industry’s steel mill in Myingyan, Mandalay, on May 31, 2023 (Myawady) Danieli—which reportedly operated with a revenue of more than 4 billion euro this past year—has ties to Myanmar dating back to the opening of the country’s first steel mill in Anisakharn, Pyin Oo Lwin, in 1979 under General Ne Win’s dictatorship. This has continued into partnerships with military-owned entities such as the Myanmar Economic Corporation, and most recently, the junta’s Ministry of Industry. Yet the Italian multinational still has not publicly listed the country as a one of its many locations of operation despite having an office there—one that it re-registered after the 2021 military coup as international businesses were under pressure to withdraw amid escalating violence perpetrated against civilian populations by the regime’s forces. This week’s OECD filing is based on the findings of “Guilty Silences: The Danieli & C. S.p.A. Case,” a report presented by Italia-Birmania Insieme at Italy’s Lower House in late October alleging “prolonged industrial collaboration” with the Myanmar military to develop the country’s steel industry. In the relationship with the army and its affiliated companies, Danieli is accused of breaching OECD principles around due diligence, information disclosure, human rights, employment and industrial relations, the environment, and anti-corruption. Italia-Birmania Insieme stated that Danieli “has never had transparent conduct in Myanmar [...] nor has it ever implemented any of the principles of the 2011 OECD Guidelines on Multinationals,” and expressed concern about the end-use of steel produced in Myanmar with its support. “The junta’s investments in the steel sector, to the construction of which the Danieli Group contributed in utmost secrecy, raise serious questions about the final use of steel for the production of weapons and ammunition, necessary to continue bombing civilian populations throughout the country,” Italia-Birmania Insieme said in a Tuesday press release about the OECD complaint. While Danieli has not been named as being involved in Myanmar’s weapons industry, there is widespread concern that steel produced in the country under the junta could feed an established domestic arms manufacturing mechanism that relies on the import of raw materials. Iron feedstock is on track to soon be transported from a junta mill in Pinpet, southern Shan State, to the major steel plant in Myingyan, set up and equipped by Danieli. According to PYO, the youth organisation co-signatory to the recent OECD complaint which has for more than a decade been monitoring activities around Pinpet, Danieli reportedly helped establish the Pinpet site in 2009, a project long opposed by locals for its environmental degradation and land confiscation. PYO director Khun Oo told Myanmar Now on Wednesday that his organisation condemns companies that partake in activities that put people in danger, and that he hoped the OECD complaint would lead to greater accountability for those propping up the steel industry. “Investment projects that benefit the military—we want them to stop,” he told Myanmar Now. “Danieli should not engage with the junta.” In the October report that served as the basis for the OECD complaint, Italia-Birmania Insieme called on Danieli to stop its operations in Myanmar, implement and disclose its due diligence processes, and update its code of ethics to comply with international rights standards. The advocacy group also asked the company to adopt measures to prevent retaliation against organisations, unions and individuals that may oppose its activities, and to provide compensation for those affected by land grabs or pollution caused by the steel plants and associated mining. Its director, Cecilia Brighi, reiterated these calls on Tuesday, and said that she hoped the Italian NCP would “mediate an agreement” between Danieli and the complainants in order to “support workers, farmers, and local communities” negatively impacted by its projects in Myanmar. PYO’s Khun Oo welcomed calls for compensation for those negatively affected by exploitative business ventures, but emphasised that these must not override longstanding demands for justice. “Compensation is just one part of accountability: accountability means policy change and structural change,” he told Myanmar Now. “Without community control or ownership, decision-making around development projects will continue to fail.” At the time of reporting, it was not clear if the dialogue requested by Italia-Birmania Insieme with Danieli would take place. Italy’s NCP did not respond to Myanmar Now’s inquiry confirming receipt of the complaint, but, according to OECD guidelines, is expected to offer an initial assessment within three months, and to conclude any investigation it undertakes within a year. Danieli did not respond to Myanmar Now’s previous requests for comment regarding its activities in Myanmar or those concerning the recent OECD complaint.

Unions, civil society groups file OECD complaint against Italian steel company Danieli over Myanmar military collaboration

The move comes after a Myanmar Now investigation confirmed the company’s secretive involvement in a steelmaking operation potentially linked to weapons production

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