China learns CSR in Myanmar

Long viewed as “client state” of China, Myanmar’s precious national resources have for years been auctioned off to the hungry dragon next door.  Indeed, China was Myanmar’s only significant dance partner, following the trade sanctions imposed on Western firms in response to human rights abuses by Myanmar’s repressive military junta.  With Myanmar’s recent transition away from military rule to democracy, Myanmar has prettied up its image and is now attracting new dance partners from the United States and Europe.

Today, the government in Myanmar finds it not only has several dance partners from which to choose, but that they can afford to be more testy with their longtime partner China.  The last two years have seen a number of lovers’ quarrels in the economic relationship, most notably President Thein Sein’s decision to cancel a controversial, long-planned Chinese dam-building project and a joint Chinese-Myanmar copper-mining project.  Myanmar’s foreign investment commission is also joining the dance as a chaperon and attaching more importance to the environmental and social issues.

The opening up of Myanmar has also led to an empowerment of the people, who are now less afraid to protest investments they feel impinge on their rights. Protests over land rights and environmental damage associated with foreign investments are now common, led by increasingly vocal Myanmar civil society groups, whereas years ago, organizing such protests was highly problematic.  One such organization, the Shwe Gas Movement, has returned to Myanmar following years in exile in Thailand.  The group has pledged to press for higher compensation for land taken for pipelines built by China, and for more jobs and higher wages along the pipeline route.  Natural gas is scheduled to start flowing sometime this month from wells deep in the Bay of Bengal through a 500-mile pipeline to China’s Yunnan province, while oil is expected to start flowing in an adjacent pipeline later this year.

The heightened environmental activism among the Myanmarese is not likely to scare the Chinese away anytime soon, as their demand for resources is still significant.  So in order to remain on the dance floor, the Chinese have copied an international dance step from the West, namely “corporate social responsibility” or CSR.  At a press event last week, the Chinese embassy and the Chinese-Myanmar Enterprises Association promised “moral self-discipline” with respect to Chinese investments in Myanmar.  China, which has generally done a poor job promoting their good works, will in future, likely focus on greater local job creation and enhanced community engagement — following a set of newly issued CSR guidelines.  By highlighting a strategy of CSR, China appears to be conceding its efforts in the past may have fallen short, and acknowledging that a new effort needs to be made to attain the trust of Myanmar society and people.

The new CSR guidelines to be followed by Chinese firms are part of a “pilot” exercise, according to Gao Mingbo, the head of the political section at the Chinese Embassy in Yangon.  Gao insists Chinese companies operating in Myanmar “must retain the support of the local communities”, and foresees the exercise of CSR in Myanmar as a potential model for Chinese investment in other countries.  Many of the Asian and African countries in which China operates have been criticized for displacing local employment, damaging the environment, and violating safety codes.