TotalEnergies acknowledged the
shift in a response to a letter from Human Rights
Watch urging the company to support sanctions to stop gas
payments to Myanmar military-controlled entities. TotalEnergies has operated
the Yadana gas project in Myanmar since the 1990s, which pays revenues to the
junta-controlled Myanmar Oil and Gas Enterprise (MOGE).
“The fact that both TotalEnergies
and human rights groups now support sanctions on Myanmar’s gas revenues leaves
the US and European Union without any excuses to delay action,” said John Sifton, Asia
advocacy director at Human Rights Watch. “These governments should immediately
impose measures vitally needed to target funds that pay for the junta’s abusive
rule.”
In a January 18, 2022 letter to
Human Rights Watch, the TotalEnergies CEO, Patrick Pouyanné, said the company
had spoken with French and US authorities concerning the implementation of
targeted sanctions on gas revenue flows and said that it “will not only comply
with any sanction decision from the European or American authorities but also
supports the implementation of such targeted sanctions.”
TotalEnergies also formally asked
the French Ministry of Foreign Affairs to put in place sanctions that would
create “a legal framework to respond to calls requesting us to stop the
financial flows” to MOGE.
Since overthrowing the
democratically elected government on February 1, 2021, Myanmar’s military has
carried out nationwide crackdowns on anti-junta protesters, activists,
journalists, and the political opposition, killing more than 1,400 people and amounting to crimes against
humanity. Renewed attacks on ethnic minority areas have resulted in
numerous war crimes.
TotalEnergies has faced growing calls over
the past year to suspend payments to the junta from Myanmar civil society and
labor organizations, as well as pressure from institutional investors.
Since the coup, the US, Canada, United Kingdom,
and EU member states have
imposed targeted economic sanctions on junta leaders and several conglomerates
and companies owned or controlled by the Myanmar military, but not on MOGE or
payments it receives. The French government of President Emmanuel Macron has not supported such
measures. The administration of US President Joe Biden has been unwilling to
impose sanctions on gas payments unilaterally without the support of France and
other EU nations.
The US and France should now
reach a common position on imposing such sanctions, Human Rights Watch said.
Natural gas projects in Myanmar
generate over US $1 billion in foreign
revenue for the junta annually, its single largest source of
foreign currency revenue. The money is transmitted in US dollars to MOGE or
other military-controlled bank accounts in foreign countries, in the form of
fees, taxes, royalties, and dividends from the export of natural gas, most of
which travels by pipeline to Thailand or China.
The largest gas revenues paid are
made via the majority Thai state-owned PTT,
which purchases approximately 80 percent of Myanmar’s exported natural gas from
joint ventures owned with TotalEnergies, Chevron, and MOGE. PTT separately owns
stakes in joint ventures with the South Korean company POSCO, which transports
and sells gas to China. Human Rights Watch has previously written to all of these
companies and their shareholders, urging them to support sanctions
on gas revenue.
“TotalEnergies’ support for
sanctions should be an example to other energy companies operating in Myanmar,
as well as to the Thai government, the single biggest buyer of Myanmar gas,”
Sifton said. “Board members and institutional investors in other companies
should push them to follow TotalEnergies’ decision.”
One critique of sanctions is that
they might shut down gas operations completely, harming the general population.
However, targeted sanctions on revenue and tax payments would not disrupt
operations, just the flow of funds to the junta. The EU and US are in a key
position to impose sanctions since payments for gas operations are made in US
dollars and involve multinational banks that fall under the jurisdiction of EU
and US law. Sanctions by those authorities can stop payments made by banks in
Thailand, Singapore, South Korea, and other locations because foreign banks
must comply with EU and US authorities when they ultimately require EU and US
banks to process, or “settle,” Euro or dollar transactions.
“With TotalEnergies’
announcement, governments now have no reason to oppose or avoid tough measures
that show support to the millions of people in Myanmar who want justice and
accountability,” Sifton said. “Junta leaders are only going to turn away from
their brutality and oppression if the economic costs of their abuses are too
great for them to bear.”
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