Ethical standards a challenge for Burma investors - just

Experts have warned that clothing companies from developed countries who implement international ethical standards when investing in Myanmar/Burma will probably be competing with Asian companies who ignore such guidance.

Participants at the Organisation for Economic Co-operation and Development's Global Forum on Responsible Business Conduct in Paris last week discussed how the OECD's 'guidelines for multinational enterprises' - which includes responsible business conduct - could promote responsible investment in Burma.

Aung Tun Thet, economic advisor to Myanmar President U Thein Sein, said his government was unlikely to insist on OECD standards being used by overseas companies from non-OECD countries working in Burma.

"We would be very happy to use the guidelines if [they] are used to assess the performance of OECD countries' companies working in Myanmar...But then we cannot be responsible for...the conduct of Chinese companies...I think it's a bit too far," he added.

Likewise, Vicky Bowman, director of the Myanmar Centre for Responsible Business, stressed how major Myanmar investors China and Thailand are not OECD members. "The OECD guidelines have value as a standard but it is difficult...to expect a Chinese or Thai company to apply them." Still, international standards would be preferable to any Myanmar-specific standards, she said.

In Burma, traditionally, social responsibility has not been a part of business activities, said Khine Khine Nwe, member of the Myanmar Investment Commission and joint secretary of the Union of Myanmar Federation of Chambers of Commerce and Industry. She noted the country is moving away from this: "We'll start sector-wise with the garment industry sector," she added.

Challenges for investors
For instance, challenges for investors in Myanmar include the need for improved transportation infrastructure (which hinders the movement of goods) and the complex process of clearing land and property rights, said Ed Potter, director of global workplace rights at the Coca-Cola Company (which also sells apparel). He noted his company has struggled to set up a supply chain in the country.

Alan Krill, foreign affairs officer for the US State Department's business and human rights section, also recognised the issue of land requirements and noted the US reporting rules for companies investing in Myanmar include a section on their land requirements.

However, Aung Naing Oo, director general at Myanmar's Directorate of Investment and Company Administration, claimed that his country kept close control on such purchases: "There is totally no land grabbing issues at all in our country," he told the meeting.

But as Myanmar aims for higher standards, there is a gap between what international companies want and what local producers are able to offer, in part because of the extra cost to meet these standards, said Dr Zaw Oo, Myanmar national co-ordinator for the Extractive Industries Transparency Initiative.

Julie Vallat, head of the ethics and human rights department at French energy company Total's legal division, said her firm has been organising 'supplier days' and working with human rights groups and local organisations to train local suppliers about responsible business conduct.

Thet added Burma is keen to adopt higher standards and attract foreign investment at the same time. "The political will is there. The political commitment is there. And we are grateful for OECD guidelines on RBC [responsible business conduct]."

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