Fauna & Flora International (FFI) calls on the government to halt oil palm development until impacts are better understood and stronger policies are in place
Poor policies and practices in the palm oil sector are fuelling unsustainable development in Tanintharyi region.
British conservation NGO Fauna & Flora International (FFI) has urged the Myanmar government to halt oil palm development in the country’s Tanintharyi region, which houses Myanmar’s last remaining lowland rainforest.
The call follows the publication of a report on the productivity and sustainability of oil palm plantations in the southern region which found that poor policies and practices in the sector are fuelling unsustainable development of this highly bio-diverse landscape.
Fauna & Flora International, which commissioned the report, said the findings highlight the need for a moratorium on oil palm expansion in the country until a thorough environmental and social assessment of impacts has been carried out, and policies have been put in place to ensure that oil palm plantations do not compromise Myanmar’s forests.
“Currently most plantations are clearing high conservation value forests, and many companies are even clearing land outside their concession boundary. That is why we are calling on the new government of Myanmar to declare a complete moratorium on palm oil development – that means no new forest clearing and no new licences issued – until we can be sure that these plantations are sustainable,” Frank Momberg, Fauna & Flora International’s Myanmar Program Director, said.
Tanintharyi Region in southern Myanmar is home to the last significant area of Sundaic rainforest on the Thai peninsula, a unique form of transitional rainforest located between the evergreen tropical rainforest of Peninsula Malaysia and the monsoon forests to the north. As well as supporting a diverse array of wildlife including tigers and Gurney’s pitta, these forests also provide critical ecosystem services including water regulation, erosion control and non-timber forest products for local communities, including indigenous Karen, Dawei and Mon people.
In 1999, Myanmar authorities pushed for rapid expansion of the country’s oil palm industry in the Tanintharyi Region, ostensibly to reduce the country’s reliance on imports, improve rural infrastructure and attract foreign investment. They set a target of planting 283,280 hectares of oil palms by 2030 and granted land concessions to large Myanmar corporations and some foreign investors.
According to the report, little to no consideration was given to land occupation by local populations, the conservation of forests, water sources and endangered species, or even the suitability of the land for oil palm.
Consequently, these policies have resulted in an unsustainable and poorly performing oil palm sector that faces considerable social, environmental and economic difficulties.
FFI cited Indonesia’s oil palm sector as an example, where large areas of rainforest have been devastated, local people displaced and forest fires have caused serious environmental and economic impacts beyond the country’s border. Indonesia’s President Jokowi has recently announced an oil palm moratorium to stop the environmental destruction.
“The election of a new government in Myanmar this year brings with it the opportunity for a radical overhaul of the country’s oil palm strategy to make it fairer, more productive and – crucially – less damaging to the country’s forests and people,” Momberg said.
FFI said these reforms should start with a thorough reassessment of Myanmar’s oil palm targets, which should be based on the availability of suitable (already degraded) land, potential productivity gains and an economic assessment of edible oil imports versus domestic production.
The conservation group said better land-use planning is also needed so that plantations are productive and do not damage environmentally sensitive areas or adversely affect communities. Company licences should include smallholder schemes to ensure that local people can benefit, it added.
FFI suggested that national policies and regulations for sustainable palm oil need to be developed based on the international standards of the Roundtable for Sustainable Palm Oil.
It said the government needs to finalise the designation of the most valuable remaining intact rainforests as protected areas, in particular Lenya Proposed National Park and the Lenya National Park extension (Nawun Reserved Forest).
In 2009, after years of talks, most of the $3.6 billion Myitsone Dam project was to be paid for by the China Power Investment Corp in a joint venture with Myanmar’s Ministry of Electric Power. Myanmar was expected to get 10 percent of the electricity garnered, own the project after a 50-year period and earn $54 billion via tax payment, power and shares.
But criticism quickly ensued. Economically and socially, initial estimates were criticised for their underestimation of adverse impacts. Historically, the Irrawaddy is seen as the birthplace of Myanmar’s civilisation. Geopolitically, the dam is located in the unstable northern Kachin region, where clashes between the government and local separatists remain common. Internationally, foreign governments, including the US embassy, have funded some anti-dam activists, as disclosed by Wikileaks.
In fall 2011, then-president Thein Sein suspended the project. Recently, Aung San Suu Kyi, the leader of the National League for Democracy (NLD), won a huge parliamentary majority. What will the new government do?
Myanmar’s long emergence
In China, observers believe the dam project was stopped and the Chinese companies targeted unfairly. But although China has been portrayed as the exclusive partner of the old military government, Japan provided the country with $2.2 billion in foreign aid and reparations until the 1990s.
The close relations were due to General Ne Win, who had been trained by the Japanese in 1940. While half of Myanmar’s foreign aid came from Tokyo, Ne Win’s widespread persecution of ethnic Chinese moved from discrimination to mass violence. After the 1988 military coup, General Saw Maung took over but Ne Win remained influential in the military into the 1990s. This long “inconvenient history” is often downplayed in the West.
As the new military rulers consolidated power, Japan became preoccupied by its own economic troubles. It was then that Chinese firms filled the vacuum investing in hydropower dams, mining projects, oil and gas.
By the early 2010s, Myanmar’s reforms had led Washington to relax curbs on foreign aid to Myanmar, relations were normalised and Brussels followed suit. As Western investment drives took off, some late entrants began to compete for projects that China had already been scheduled to manage.
Need for cooperation
After the recent visit by Foreign Minister Wang Yi, Suu Kyi said she had not read the contract for the Myitsone project but characterised bilateral relations with China as “very important politically, as well as socially and economically.”
In the past five years, Myanmar has tripled its expenditure on electricity. Yet, only one third of the country’s 53 million people live with electricity. Today, two-thirds of total electricity comes from hydropower, 29 percent from gas, and less than 1 percent from wind, solar and biomass. Full access will take until 2030.
While most people in Myanmar would prefer uncontroversial electricity resources, all expect accelerated development. Unlike the US, China is a large investor in Myanmar. In turn, Chinese firms have learned lessons of their own about local responsiveness and community relations.
Indeed, there is reason for cautious optimism. While Aung San Suu Kyi cannot ignore the legal weight of contracts, she has the mandate to come up with out-of-the box solutions, which could prove to be pragmatic and balanced. In another contested case – the Chinese-Myanmar Letpadaung copper mine – she did not recommend project cancellation but revised terms instead. This allowed construction while reducing adverse impact locally.
Myanmar has a great interest in China’s development experience and pioneering efforts, including the “Belt and Road” initiative, the Asian Infrastructure Investment Bank and the New BRICS Development Bank.
Historically, China and Myanmar have gained a lot from sustained economic cooperation. Today, the need for mutual collaboration is greater than ever before.
Dr Dan Steinbock is Guest Fellow of Shanghai Institutes for International Studies (SIIS). This commentary is based on his project on “China and the multipolar world economy” at SIIS, a leading global think-tank in China. Views and opinions expressed in this article are the author’s own and don’t necessarily reflect Myanmar Business Today’s editorial opinion.
Yangon Regional Government drew backlash after awarding China Railway and Myanmar Shwe Yin Co the right to implement a central traffic controller system out of five total shortlisted companies.
The tender which was floated last July, drew 32 applicants from which the final four joint ventures were selected in late last year. Afterwards, a joint venture between China Railway and Myanmar Shwe Yin Co was announced as the winner.
The other three companies who made it into the final list voiced their objection citing security concerns for Yangon City.
“The Chinese state-owned company is a railway construction company and their local partner, Myanmar Shwe Yin, is a trading company. From the perspective of tech companies like ourselves, we don’t understand [why they are chosen]. What we planned to do was buy international software and run the operation with our own engineers. Now, a Chinese state-owned company is going to control the system for a whole five years,” U Thein Aung, director of Vanguard Engineering Solution, said.
However, U Min Oo, the chair of the Yangon Computer Professionals Association, also a member of the tender selection committee, said the security concerns are unfounded.
“Many people worry about the security of their daily life because the Chinese company will control the Yangon traffic system. But there is actually no need to worry. We control the process according to the contract between the government and the company. We also have laws and rules about that.”
Aiming to alleviate Yangon’s traffic congestion, Upper House Parliament member U Phone Myint Aung submitted a motion to address the issue by installing a traffic control system in July last year. Subsequently, the President’s Office allocated K20 billion from the presidential budget for the installation and operation of such a system. Then the regional government sponsored the tender process.
“I asked the regional government whether the process is fair and correct. When they answered, they didn’t reveal the pricing of the bidders and said it was confidential. I find this lacking transparency,” U Phone Myint Aung said. Several calls to the Ministry of Transport by Myanmar Business Today about the tender process were unreturned.
He added that he is sad to see only three companies among the 19 bidding companies openly complaining. U Phone Myint Aung assumes that other companies do not want to be at odds with the government.
The companies that objected the tender award are Vanguard Technology, which is partnering with a Taipei-based company, KTK Technology, which partnering with a counterpart from the US, and Amber Star Technology, which is partnering with Samsung. They said they were not informed about what technology and what budget the winning company will operate within to implement the system.
“In the public eye, it’s just a traffic control system. In reality, every inch of the city will be monitored. Allowing a foreign state-owned company to operate such a system is risky for the safety of Yangon. Only tech-savvy people know how much risk this carries,” U Kyaw Soe Oo, director of Amber Star Company, said.
The government’s plan for the central traffic control system entails installing more than 600 closed-circuit television cameras in more than 150 traffic lights which will be automatically controlled. The implementation phase will start within six months after the tender.
“We made recommendations on the four shortlisted company based on the proposals and how they are going to operate. The government does the selection, not us,” U Aung Myint, another member of the tender evaluation committee and vice president of Myanmar Computer Association, told Myanmar Business Today.
The joint venture between China CCRC and Myanmar Shwe Yin Co have to implement the traffic control system before March 31. If not, they will be fined K100,000 per day, according to U Saw Htun Aung Myint, the leader of the tender selection committee.
At present, Myanmar Shwe Yin is starting preparations to implement the system. The central controller unit will be based on Pyidaungsu road near the Thai Embassy.