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25 oil and gas companies in Myanmar have set a global precedent by publishing who their real owners are, said Global Witness in a new report published today.
“People need to know who is buying up their most valuable assets - this is a global first in one of the places you might least expect it,” said Juman Kubba, analyst at Global Witness. “All over the world, corrupt politicians and crooked businessmen hide behind secret companies to steal oil, gas and mineral wealth. If Myanmar is to turn the page on a history of cronyism and corruption linked to natural resources, it has to crack this problem.”
Since October 2013, Myanmar’s Ministry of Energy has awarded 36 oil and gas blocks to 46 international companies and private local companies. The revenues from these sales could drive development in one of the world’s poorest countries.
In June 2014, Global Witness raised concerns that secrecy surrounding company ownership could result in the money being lost to corruption. Anonymous or secret company ownership structures are routinely used across the world to hide illicit activities from public scrutiny and law enforcement.
In response to the Global Witness survey, all companies investing in 17 of these blocks have now declared who ultimately owns and controls them. Crucially, 10 private companies have provided complete information on the individuals who own and control them, and responded to questions on high-level political connections (1). Armed with this information, citizens can check who these individuals are, and raise concerns over possible conflicts of interest or corruption risks. However, a hard core of 18 companies have not yet declared their ownership (2).
This development comes amid somewhat mixed progress towards fairer and more open management of the country’s valuable natural resources.
The full findings are laid out in the report, "The Shell Starts to Crack" .
In July 2014, Myanmar was accepted as a candidate of the Extractive Industries Transparency Initiative (EITI), a global scheme which promotes transparency in the oil, gas and mining industries. But a month later the government and winning companies signed contracts for onshore oil and gas blocks, the final terms of which have been kept secret. The country’s oil, gas and mining laws are also being revised behind closed doors, and without public consultation.
Next week, Myanmar will host a meeting of the international EITI board in Nay Pyi Taw. The government should use this event to call for all extractive industry companies to declare their ultimate owners.
“The Myanmar government says it is committed to reform – now it must prove it. It has signed up to the EITI, which recommends publishing information on the real owners of companies. Moreover, EITI requires governments to protect civil society and do deals on the country’s natural resources in the open. Its people need to see evidence of this when the government hosts EITI members next week.”
There is growing global recognition of the need to tackle secret company ownership. Last year, the G8 announced that its members would require companies to provide information on who owns and profits from them. The UK is due to introduce legislation for a public register of company owners, and the European Parliament has voted in favour of the same. 14 countries, including Honduras, the Kyrgyz Republic, Liberia and Tajikistan, are also setting up pilot schemes to publish oil, gas and mining company ownership.
- Juman Kubba on [email protected] or +44 (0)7720 972 394
- Oliver Courtney on [email protected] or +44 (0)7912 517 147
Notes to editors:
- For a full briefing on the survey results, see here.
- The local partners of major international firms such as US’ Chevron, the UK’s BG, and Australia’s Woodside, ROC Oil and Tap Oil have all come forward to declare who their real owners are.
- The international private companies which have not yet declared who owns them are Canada’s Pacific Hunt Energy Corp, the Netherlands’ Berlanga Holding, Luxembourg’s CAOG, Thailand’s Palang Sophon Offshore and India’s Oilmax Energy Pvt Limited. In terms of Myanmar companies, A-1 Mining Co. Limited, IGE Pte Ltd, Precious Stone Mining Co. Limited, United National Resources Development Services, UNOG Pte Limited and Young Investment Group have not responded to the survey.
- Myanmar has abundant offshore gas (7.8 trillion cubic feet in proven reserves) and significant reserves of oil (50 million barrels in proven reserves), both on and offshore, some of which is already being exploited. In 2010, the value of natural gas exports was approximately US$2.91 billion, which was equivalent to 32.8% of total exports. In the first nine months of 2011, natural gas exports were worth approximately US$2.6 billion.
- Myanmar announced the award of 16 onshore oil and gas blocks in October 2013, and a further 20 offshore blocks (10 shallow water and 10 deep water), in March 2014. International companies were required to partner with Myanmar companies for all onshore and offshore shallow water blocks, but not for the deep water blocks.
- In June 2014, Global Witness published the initial results of its requests to recent oil and gas block winners for ownership information. At that time, full ownership details had been provided in relation to a mere three blocks. In the wake of that release, and accompanying media coverage on the corruption risks posed by company secrecy, further companies have come forward.
- Myanmar’s Ministry of Energy has committed to managing the country’s energy sector transparently and in line with international best practices, and has taken steps such as publishing standard terms and conditions of production sharing agreements for both the offshore and the onshore blocks. Contracts for the onshore blocks were signed in August 2014, but the final terms have not been published.
- Myanmar was accepted as a candidate of the global transparency standard, the Extractive Industries Transparency Initiative (EITI) in July 2014. It is now due to implement agreed activities in line with the EITI standard, including a planned a beneficial ownership pilot. During the week commencing 13 October 2014, Myanmar is due to host the international board meeting of the EITI.
- The EITI recommends that companies which bid for, operate and invest in extractive industry assets publish the identities of ultimate beneficial owners. There is, however, an exemption for companies which are publicly listed or wholly owned by publicly listed companies. It also requires in governments of countries participating in the scheme to ensure there is an ‘enabling environment’ for civil society participation.
10. Global Witness has been engaged in the EITI since the scheme was established in 2003. Global Witness currently sits as an alternate member of the international EITI board, and forms part of the EITI civil society constituency at the global level. Full details of the current members of the EITI international board are available at http://eiti.org/files/EITI-Board-members-2013-2015-16.pdf.
 BP, ‘BP Statistical Review of World Energy’, June 2013, http://www.bp.com/content/dam/bp/pdf/statistical-review/statistical_review_of_world_energy_2013.pdf.
 US Energy Information Administration, ‘International Energy Statistics’, May 2014, http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=5&pid=57&aid=6&cid=r7,&syid=2010&eyid=2014&unit=BB.
 Yolanda Fong-Sam, The Mineral Industry of Burma, USGS 2010 Minerals Yearbook, http://minerals.usgs.gov/minerals/pubs/country/2010/myb3-2010-bm.pdf.
 Yolanda Fong-Sam, The Mineral Industry of Burma, USGS 2011 Minerals Yearbook, http://minerals.usgs.gov/minerals/pubs/country/2011/myb3-2011-bm.pdf.
 US Embassy, Rangoon, ‘Joint Statement on Good Governance and Transparency in the Energy Sector’, 20 May 2013, https://www.facebook.com/notes/us-embassy-rangoon/burma-us-statement-on-good-governance-in-energy-sector/466193080129183.