Transcript Myanmar Rule of Law Assessment*

US-Myanmar Economic Relations:
Creating an Attractive Investment Environment
Jared Genser
Managing Director
February 25, 2013
CREATING AN ATTRACTIVE INVESMENT ENVIRONMENT
Objective
Approach
• Present highlights from
• Provide background on rule of law
Myanmar Rule of Law Needs
Assessment and implications
for international investors
project
• Discuss opportunities and
challenges for U.S. and other
Western investors in Myanmar
• Offer concluding observations
1
ANY LAW REFORM PROCESS MUST BEGIN WITH A COMMON
UNDERSTANDING OF THE RULE OF LAW
The rule of law refers to a principle of governance in which all persons,
institutions and entities, public and private, including the State itself, are
accountable to laws that are publicly promulgated, equally enforced
and independently adjudicated, and which are consistent with
international human rights norms and standards. It requires, as well,
measures to ensure adherence to the principles of supremacy of law,
equality before the law, accountability to the law, fairness in the
application of the law, separation of powers, participation in
decision-making, legal certainty, avoidance of arbitrariness and
procedural and legal transparency.
Report of the UN Secretary-General
on the Rule of Law and Transitional
Justice in Conflict and Post-Conflict
Societies
Source: S/2004/616
2
OVER 75+ INTERVIEWS HAVE BEEN COMPLETED WITH INDIVIDUALS
FROM THE FOLLOWING INSTITUTIONS*
Myanmar
Government
Political
Parties
UN Agencies /
Governments /
IFIs
NGOs /
Lawyers
• Ministry of National Planning & Economic
Development
• National Human Rights Commission
• Office of the President (Legal Advisors)
• Supreme Court
• Union Attorney General’s Office
• Chin National Party
• Karen National Union
• National League for Democracy
• Nationalities Brotherhood Forum
• Shan National Democratic Party
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US Agency for International Development
US Embassy (Myanmar)
US Department of Justice
US Department of State
World Bank
UN Special Rapporteur on human rights in
Myanmar
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Johns Hopkins University
Justice for All (Myanmar)
Justice Base
Myanmar Development Resources Institute
Myanmar Legal Aid Network (MLAW)
Myanmar Egress
Myanmar Peace Centre
National Democratic Institute
National Endowment for Democracy
Open Society Foundations
Public International Law and Policy Group
Project 2049
Eugene Quah
US Institute of Peace
US Campaign for Burma
United to End Genocide
‘88 Student Generation
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Asian Development Bank
EU External Action Service
International Labour Organisation
UK Embassy (Myanmar)
UK Foreign & Commonwealth Office
UN Development Programme
Office of UN High Commissioner for Human
Rights
UN Children’s Fund
ActionAid Myanmar
American Bar Association
Asia Justice and Rights
Amnesty International
Asia Society
Burma Lawyers Council
Burma Justice Committee
Burma Partnership
Earth Rights International
Human Rights Watch
International Bar Association
International Center for Transitional Justice
International Development Law Organization
International Republican Institute
Lawyers Performance Aid Centre & Lawyers
Network (U Aung Thane)
* For some organizations listed, multiple separate interviews were conducted with different people in different parts of the organization and world
3
OPPORTUNITIES
Conclusion
Meaningful
reform
Interest in
outside help
Embrace of the
rule of law
Promote
development
Implication
• President Thein Sein and his allies
have embarked on a reform
process which, if focused,
sustained, and later expanded,
could substantially transform the
country
• Foreign companies interested in
Myanmar are in a prime position to
shape the reform process in the
sector(s) of their operations
• The Executive, Legislative, and
Judicial branches of the Myanmar
government have expressed a
strong interest in receiving
assistance from international
experts
• The Myanmar government has
been very open to receiving expert
advice and support from a range of
experts, including private sector
institutions
• The government understands that
attracting foreign investment will
require law reform efforts and
substantial adherence to the rule
of law as it is understood by the
international community
• Foreign companies are well
positioned to explain their
expectations to the Myanmar
government in terms of the kind of
economic environment they
require to agree to invest
• The Myanmar people strongly
support the need for responsible
investment in their country as a
means to promote economic,
social, and political development
• U.S. companies especially have a
profound opportunity to set a new
standard of practice for investing
in the Myanmar economy
4
IMPORTANT CHALLENGES (1 OF 4)
1. Playing
field
2. Basic laws
Conclusions
Implications
• The pace of reform is
breathtaking – but corruption
and poor labor, environmental
rights, and human rights
standards make it an uphill
battle for Western companies
to compete
• That said, there is serious
interest from the Myanmar
government to reform in a way
that attracts and even prefers
Western investment
• Western investors need to
advocate both individually and
collectively for the Government to
adopt new laws to address these
issues in a way that compels
other companies to meet
international standards
• Major foundational areas of law
have yet to be developed or
reformed, including
˗ Privatization laws
˗ Government contracting
˗ Government procurement
˗ Land tenure, land use
˗ Intellectual property, patent,
and trademark
• While selling products or services
into Myanmar through
intermediaries will remain more
straightforward, serious
investment can only be done
acknowledging the ambiguity of
the transforming landscape
5
IMPORTANT CHALLENGES (2 OF 4)
3. Many
priorities
4. Limited
capacity
5. Sanctity /
enforcement
of contract
Conclusions
Implications
• The pace and breadth of
reform is extraordinary, but by
trying to do so much so fast,
the quality and implementation
of reform efforts are uneven
• Companies investing in Myanmar
will need to closely monitor and
help shape the laws and
regulations that relate to their
sector of activity
• There is a serious lack of legal
capacity in the public, private,
and non-governmental sector
• Companies investing in Myanmar
should take a leading role in
drafting legal documents relating
to their activities
• For any significant operations,
there will be no substitute for
having an on-the-ground presence
• Historically, contracts in
Myanmar have either been
honored or broken, but there
has been no useful domestic
means to enforce contracts or
obtain damages for breach of
contracts
• This will remain an ongoing
challenge in the near term
• Myanmar is looking to ratify the
Convention on the Recognition
and Enforcement of Arbitral
Awards (New York Convention),
which will also help
6
IMPORTANT CHALLENGES (3 OF 4)
6. Corruption
7. Community
engagement
Conclusions
Implications
• Corruption in Myanmar is
endemic – even after reforms,
in 2012, Myanmar was only
ranked ahead of Somalia,
North Korea, Afghanistan, and
Sudan
• That said, however, there is a
commitment at the top to
substantive reform
• Companies investing in Myanmar
will have to be exceptionally
vigilant and understand that
despite a commitment to reform
at the highest levels of
government, they may need to
manually close the gap between
the commitment and the reality
themselves
• There is a long history in
• Companies making major
Myanmar of companies ignoring
investments in Myanmar will need
community impact in their
a serious and substantive plan for
operations, particularly in
engaging communities, consistent
extractive industries
with best practices of corporate
social responsibility (CSR)
• The government is now talking
about the importance of
• Consulting with the government
stakeholder engagement
and political opposition about
major projects could help build
• The international community
confidence
and media are watching
Myanmar investors closely
7
IMPORTANT CHALLENGES (4 OF 4)
8. Relations
with military
and police
9. SDNs
10. U.S.
disclosure
requirements
Conclusions
Implications
• Reform of the military and
police (which is controlled by
the military) is opaque
• Serious questions remain
about civilian control over the
military
• Companies making major
investments will need clear plans
and protocols for operational
security that keep arms-length
from the military and police
• There are currently roughly 100 • Lack of transparency in Burmese
“specially-designated nationals,” corporate structures will require
individuals or entities with which
substantial due diligence to ensure
U.S. persons are prohibited
companies do not partner with
from doing business – these
entities that have SDN investors
include major investors through • There needs to be a process for
all major areas of Myanmar
SDN de-listing after substantial
economic activity
remediation measures are taken
• Recognizing the range of
challenges described here, the
U.S. is imposing annual
reporting requirements on U.S.
companies investing in
Myanmar
• U.S. companies will face additional
costs above and beyond what
other companies globally will face
in investing in Myanmar
8
MYANMAR RULE OF LAW NEEDS ASSESSMENT
Contents of Rule of Law Needs Assessment
I. Myanmar Constitution
II. Branches of Government
• Executive Branch
• Perseus Strategies and DLA Piper will be
publishing its 50-page Myanmar Rule of Law
Needs Assessment on March 5, 2013
• We will be hosting a public event to launch the
report on the same day in Washington, D.C.
• If you are interested in obtaining a copy of the
report and/or attending the event, please
contact me
Union Attorney General’s Office
– Ministry of National Planning and
Economic Development
• Parliament
• Judiciary
–
III. Myanmar National Human Rights
Commission
IV. Criminal Defense and Legal Aid
V. Legal Profession
• Bar Associations
• Legal Education
VI. Access to Information
VII. Recommendations
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To obtain a copy of Myanmar Rule of Law Needs
Assessment or an invite to the launch event, please
contact:
Jared Genser
Managing Director
Perseus Strategies, LLC
+1 (202) 320-4135
[email protected]