Myanmar public urges gas sanctions to stop military funding

By KRISTEN GELINEAU, VICTORIA MILKO and LORI HINNANT

Published: December 15, 2021

JAKARTA, Indonesia (AP) — The young woman in Myanmar decided to speak out when she realized that money from the company she loved was now in the hands of the military leaders she hated.

She and her parents had long worked for Total Energies, the French company that operates a lucrative gas field off the coast of southern Myanmar with a state-owned enterprise. But in February, the military took over Myanmar’s government and its bank accounts, including those that receive hundreds of millions of dollars each year from the Total gas field, known as Yadana.

As military abuses such as the murder and detention of thousands have grown, the young woman joined others across Myanmar in a groundswell of support for targeted sanctions on oil and gas funds, the country’s single largest source of foreign currency revenue. But Western governments — most notably the United States and France — have refused to take that step amid lobbying from energy company officials and resistance from countries such as Thailand, which gets gas from Myanmar. On Friday, the U.S. announced a raft of sanctions against several Myanmar officials and entities, but again left out oil or gas revenues.

The young woman chanted slogans outside Total’s offices, and later protested the military’s takeover. She said she has since lost her job, and was thrown into prison for three weeks.

“We had a good relationship and good memories of Total,” said the young woman, whose name, like those of other Myanmar gas workers in this story, is being withheld by The Associated Press for their safety. “Total has taken a lot from Myanmar....so they should at least help Myanmar with a little bit of effort during such a bloody period in our country.”

In recent months, the Myanmar public’s cries for sanctions on gas revenues have grown thunderous. In August, activists launched the “Blood Money Campaign” movement, risking their lives by marching in the streets and carrying signs that read: “Freeze payments to junta and save Myanmar.” Others posted photos of themselves on social media holding signs that targeted the gas companies at the center of the debate: “Total, Chevron — Stop accessory to murder.”

The United Nations’ top expert on human rights in Myanmar says millions of people across the country are imposing personal sanctions by withholding taxes, refusing to pay power bills and boycotting products linked to the military. And on Nov. 30, 540 civil society organizations in Myanmar joined international colleagues in sending a letter to CEO Patrick Pouyanne asking Total to “put an end to its complicity in crimes against humanity” by making payments to a holding account. The letter argued that Total is violating local laws against misappropriating public money and “has placed itself on the side of the junta.”

The AP also obtained a copy of a letter from workers at Yadana to their managers earlier this year calling on Total’s subsidiary, Total E&P Myanmar, to suspend export payments to the military, place the funds in a protected account and freeze income tax.

“We are specifically concerned that the profits gained from Yadana Project, which we are working for, will, one way or another, help fund the military junta’s violent repression of Myanmar people,” the letter said.

Total and Chevron say they condemn human rights abuses, but also want to prevent further harm to the people of Myanmar by cutting off electricity. In addition, Total said it is wary of putting its local employees in danger of reprisals from the military, including forced labor.

Meanwhile, tolerance on the ground for global inaction has worn thin. Local armed groups, referred to as People’s Defense Forces, have targeted bill collectors for the national utility and sabotaged buildings and infrastructure, according to EarthRights International, which works on environmental and human rights issues in Myanmar.

Pro-sanctions activists do not want to shut down the gas field itself. Instead, they want to sanction the project’s revenues and place them in a protected offshore bank account that the military can’t touch.

The sanctions would target the state-owned Myanma Oil and Gas Enterprise (MOGE), which is a joint venture partner in all offshore gas projects in Myanmar, including Yadana with Total, Chevron, and Thailand’s PTT Exploration & Production. Total has a majority stake in the venture and runs its daily operations, while MOGE collects revenues on behalf of the government. Gas from Yadana is piped to Myanmar and neighboring Thailand.

Total cancelled exploration for new deposits in Myanmar after the military takeover. But it argues that it has to pay taxes and respect its contracts under the law, and that it will donate the equivalent of the taxes to human rights associations in Myanmar. Total said it would willingly comply with any new international sanctions, which would override local laws that govern its contracts in Myanmar.

“In particular, should MOGE be under economic sanctions it would oblige all parties to put all cash flows due to MOGE in an escrow account,” the company told AP in a statement. “We have taken all possible measures under our control and respecting the legal framework without putting our staff at risk.”

Several smaller offshore gas fields also operate in Myanmar’s waters, run by companies from Thailand, Japan, Malaysia, India and South Korea in partnership with MOGE. And China is an investor in the pipeline that delivers the gas to the country.

About 50 percent of Myanmar’s foreign currency comes from natural gas revenues, with MOGE expected to earn $1.5 billion from offshore and pipeline projects in 2021-2022, according to a Myanmar government forecast. The Yadana gas project and pipeline is particularly important, earning around $400 million in revenues in 2017-2018.

Yet despite the growing calls for action, neither U.S. President Joe Biden nor French President Emmanuel Macron have publicly moved against Myanmar’s oil and gas revenues. The current sanctions from the U.S. and European Union lean heavily on gemstones.

The U.S. State Department did not directly address AP’s questions about why it has yet to impose sanctions on MOGE. Instead, the department pointed to a list of other people and entities the U.S. has already sanctioned, including several military officials and their family members, two army units believed responsible for a litany of atrocities, the military’s two largest holding companies and a state-owned gems enterprise.

“We will not hesitate to take further action against those who perpetrate violence and suppress the will of the people,” the department said in a statement.

U.S. Secretary of State Antony Blinken said Wednesday that the Biden administration is weighing tough new sanctions on Myanmar to pressure the country’s military leaders to restore a democratic path. He did not mention oil and gas sanctions.

An aide on the House Foreign Affairs Committee acknowledged that oil and gas make up “a huge chunk” of the military’s ability to maintain control. Despite that, a measure introduced in the House in October that specifically calls out MOGE as a potential sanctions target has yet to advance.

The aide, who spoke on condition of anonymity to describe the thinking around the legislation, said objections from Singapore and Thailand have played a role in the Biden administration’s hesitation to impose new sanctions, as has lobbying from Chevron. Activists have accused Singapore’s banks of holding assets on the Myanmar military’s behalf, although its central bank has said regular surveillance showed Myanmar companies and citizens did not have “significant funds” in the city state.

In the first half of 2021, Chevron reported spending $3.7 million on federal lobbying in the U.S., with “Burma Energy Issues” and “Myanmar Energy and Investment Issues” listed as specific lobbying areas of focus.

“It certainly seems in the U.S. there is a major lobbying campaign going on from Chevron to try and protect its interests,” said Chris Sidoti, a human rights lawyer and a member of the U.N. Fact Finding Mission on Myanmar from 2017 to 2019.

In response to questions from the AP, a spokesman for Chevron pointed to an earlier statement from the company, which said Chevron would comply with any sanctions imposed by the U.S.

“Any actions should be carefully considered to ensure the people of Myanmar are not further disadvantaged by unintended and unpredictable consequences of well-intentioned decisions,” Chevron wrote in its May statement.

The French government also said it wants to avoid adding to the burdens of Myanmar civilians through sanctions and aims to target individuals from the junta rather than a vital economic sector. France wants to avoid normalizing relations with the junta but also wants to “stay involved on the ground” for humanitarian reasons, which requires “operational contacts” with Myanmar’s administration, according to a senior official in the French president’s office. He described the French government’s thinking on condition of anonymity.

He said Total’s activities in Myanmar, including how it carries out payment for the gas, are the company’s responsibility. Both the French government and Total want a return to a democratically elected government, “but at the same time you have to take into account the reality on the ground,” he said.

French authorities have told activists that Europe is expecting to impose a fourth round of sanctions by Feb. 1, the anniversary of the military’s takeover, and that both the energy and banking sectors are on the table.

MOGE can be targeted for sanctions without interrupting the flow of energy, said Tom Andrews, the United Nations special rapporteur on Myanmar.

“The people of Myanmar are not calling for anything that they, themselves, are unwilling to do,” Andrews said in an e-mail to the AP. “But the fact remains that to be truly effective, the people of Myanmar need countries to join them and impose sanctions on MOGE.”

Human rights activists say it’s unconscionable for any company to help fund a military that has, in recent months, engaged in mass torture, launched attacks on medics, forcibly disappeared thousands of people, and returned mutilated corpses to victims’ families as tools of terror. Since February, soldiers and police have killed at least 1,300 people and arrested more than 10,800, according to the Assistance Association for Political Prisoners, which monitors deaths and arrests.

Last month, the National Unity Government, an underground opposition group and parallel administration, released a public statement that dubbed MOGE the military’s most important financial lifeline and called for urgent sanctions.

“As a nation, we have these natural resources to build a school, to build a hospital, to build a road,” said spokesman Dr. Sasa, who goes by one name. “So why are we still using this money to kill the people of Myanmar? To us, it is barbarity.”

In response to questions, the military said state revenue is used for education, infrastructure, development projects and public service, and is also used “proportionately for the rule of law and for defense.” The military has long denied allegations of human rights abuses.

“All state revenue is spent according to the needs of the country,” the military said in a statement to the AP. “Putting restrictions on the current government is directly affecting the social and economic life of the citizens.”

The Yadana project provides less than 1.5 percent of Chevron’s worldwide natural gas output, and Total says Yadana represents less than 1 percent of its production. But while Yadana isn’t a significant source of income, it also doesn’t cost the companies much because major set-up fees were incurred decades ago, said Readul Islam, a Singapore-based research analyst at Rystad Energy. Chevron and Total would also struggle to sell the operation, given the remaining short life of the aging gas field and the grim political situation, he said.

“These operations are not company-makers by any sense, but they are profitable,” Islam said.

Also, Chevron and Total’s aversion to sanctions may be less about money than about precedent, said John Sifton, Asia advocacy director at Human Rights Watch.

“If you signal that every time a country has serious human rights abuses, Human Rights Watch and other groups can come in and say, ‘You should sanction your revenue,’ it’s going to create business headaches for them all over the world,” he said.

With public pressure mounting, Total and Chevron announced in May that they were suspending dividend payments by the Moattama Gas Transportation Company, which owns the Yadana pipeline. While welcoming the move as a first step, activists argue the dividend payments are a fraction of the military’s gas revenues.

The energy analytics firm Wood Mackenzie in November downgraded its forecast of Myanmar gas exports to Thailand after Yadana’s output fell faster than expected. Rights activists said Thai fears of a gas slowdown or cutoff at a time of surging prices across Asia have stiffened its resistance to new sanctions, which the U.S. and EU appeared reluctant to challenge. The Thai government did not respond with comment.

In Myanmar, some gas workers have dismissed the energy companies’ concerns that they will face retaliation with sanctions, arguing the entire country is already oppressed. One 10-year employee of Total said the risk of losing his job due to sanctions was nothing compared to the risk of the generals remaining in power.

“Everyone needs a job,” he said. “But I don’t want to survive by working here while everyone is suffering from this crisis.”

Given he and millions of others already have risked so much in the pursuit of democracy, he is frustrated with the international community’s failure to act.

“I don’t understand why they keep paying the junta,” he said.

After the young woman whose family had long worked for Total protested outside its gates, the contractor company that hired her warned her not to participate again in the country’s pro-democracy Civil Disobedience Movement, she said.

A few months later, she posted on social media about what she felt was Total’s poor treatment of a colleague who died of COVID-19. Days later, she said, the contractor company fired her for allegedly defaming Total. In a statement, Total said that no Total E&P employees have been fired since the military’s takeover, and none have been prevented from participating in the Civil Disobedience Movement.

In September, she was arrested and imprisoned for three weeks under Section 505(A) of the Penal Code, which, in part, criminalizes comments that “cause fear” or spread “false news.”

“I feel very disappointed in Total because they are neglecting this country in which they invested,” she said.

For another Total employee, the lack of action from those who claim to stand for human rights is baffling. Why, he asked, hasn’t the international community told gas companies that if they do business with the military, they can no longer do business with the rest of the world?

For him, the solution to military abuse is simple.

“If they do not have revenue, they cannot buy weapons,” he says. “If they cannot buy weapons, this revolution will end quickly.”

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Gelineau reported from Sydney and Hinnant reported from Paris. AP Business Writer Elaine Kurtenbach in Bangkok contributed to this report. Correspondents Matt Lee and Ben Fox contributed from Washington, D.C.