“Responsible growth and investment in Myanmar will require robust management of risks, but there are plenty of positive opportunities and a real opportunity to shape the environment in the coming years.” —Chris Nolan, BSR
“We are trying to open up a new market by doing the right thing from the beginning and we are doing it as a coalition.” —Annette Stube, A.P. Moller, Maersk
“Business needs to make sure it’s empowering civil society and not just the government…. As a business, the way to support long-term social and economic development is to make sure you are respecting human rights and investing for profit rather than exploiting for profit.” —Joanne Bauer, Columbia University
Nolan opened the session by saying that it takes a case-study approach and focuses on Myanmar (also known as Burma). The focus is on companies considering investing in Myanmar and the risks and opportunities they face. He said it is a chance to marry responsible investing with broader social development. A quick poll of the room revealed about 20 percent of attendees are either working at a company operating in Myanmar, looking to invest there, or have visited Myanmar.
Nolan began by asking Stube to help the audience understand Maersk’s perspective on investment in a country like Myanmar. Stube stated that Myanmar is largely an unpredictable environment that presents great reputational risk for a company. The recent issuance of the UN Guiding Principles helps companies focus on their obligations to human rights. Maersk started by making a plan for implementation of the principles and decided that Myanmar would be a great test case to implement the UN Guiding Principles from the beginning. Maersk can help drive long-term economic growth through investment in shipping, transportation, and ports. However, Maersk decided that it was too much of a risk to do it alone.
While coalitions often move slowly, they provide shared risks and solutions. Maersk formed a coalition called the Myanmar Framework on Human Rights and Business, a multistakeholder approach to find out how to do business in Myanmar. The coalition is designed to provide advice on human rights to companies, government, and investors to open up a new market while doing the right thing. Maersk has one person on the ground and is working with a local agency to understand risks and contextualize the Guiding Principles with Myanmar.
Bauer then provided a perspective on investment in Myanmar from the country level. She said that Myanmar provides an opportunity to get it right, and that responsible engagement is a significant challenge in Myanmar. The simultaneous economic development and political reform is also a major challenge. In addition, the economic and political environment is extremely poor. This makes Myanmar ripe for exploitation and led the United States to set up reporting requirements for companies that operate there. Businesses looking to invest in Myanmar should ensure they have a positive impact on the local economy with investments that benefit the poor and generate tax revenue.
Nolan asked Bauer how else she sees business empowering society. She responded that she would like to see businesses consulting with civil society, many of whom are eager to offer advice and have local knowledge. She shared a checklist for responsible investment in Myanmar, which focused on asking questions about the beneficiaries of a company’s investments: Who benefits from the goods and services being offered? Are there good jobs? Labor rights protection? Is the company damaging the environment? Is it in the interest of the Myanmar economy? Does it generate tax revenues?
Each panelist commented on the legal environment, specifically addressing who is responsible for advocating for reform. Stube began by discussing that it is in the best interest of countries to do business in a stable environment. There is no set definition of who should advocate reform, but the government has a lot of incentive to reform to attract companies to invest in Myanmar. Bauer commented that businesses should speak up and promote standards, since it is in companies’ self-interest to abide by the same standards and be consistent in the application of standards.
An audience member then asked what the investor community can do, and what questions they should ask. Bauer said that investors should follow the enhanced human rights due diligence laid out by the UN Guiding Principles and should provide full disclosure on their due diligence. Stube commented that she would like to see more questions from investors on the positive impacts of businesses, as this would greatly enhance growth and development in these countries.
In closing, Nolan said there is likely to be a proliferation of organizations appearing in the next 12 to 18 months. He then said that Myanmar presents a unique opportunity to shape and drive responsible business success in a largely undeveloped market.