Myanmar’s corrupt jade industry sparks armed conflict, coup

Corruption in Myanmar’s lucrative jade sector has been a driver of armed conflict, with the country’s military increasing its control over the industry even as Aung San Suu Kyi’s democratically elected government attempted to enact reforms in in the years leading up to the Feb. 1 coup, a corruption watchdog said on Tuesday.

The Burmese army, called Tatmadaw in Burmese, and those in its highest ranks have been able to enrich themselves through the jade industry, and the Tatmadaw now threatens to “open the floodgates of military corruption further. in the jade industry “, according to a report published by the international NGO Global Witness.

Coup follows military claims that a landslide victory by the National League for Democracy (NLD) of Aung San Suu Kyi in the country’s November 2020 elections was the result of electoral fraud generalized. Aung San Suu Kyi and other NLD leaders have been detained since the takeover.

The junta, however, has yet to provide evidence for its claims and has violently cracked down on mass protests against the takeover, killing at least 883 people and arresting 5,224, according to the Association for Assistance to Political Prisoners ( AAPP) based in Bangkok.

Now that the Tatmadaw is at the head of government, the junta is poised to further exploit corruption in the jade trade and fight with armed groups for control of more of the country’s deposits.

Control of jade was a major cause of conflict in Myanmar between the Tatmadaw and rebel armed ethnic groups, and in the years leading up to the coup, the military increased its involvement in the jade trade at one point. where the civilian-led government was trying to force reform on it, Global Witness said.

“Our revelations about the military’s increased control over the multibillion-dollar jade trade are emblematic of the Tatmadaw’s broader capture of valuable sectors of the country’s economy, which funds their abuses, fuels conflict and contributed to their recent illegal takeover, ”Keel Dietz said. Myanmar political adviser at Global Witness in a statement.

Research reveals that the family of coup leader Min Aung Hlaing took advantage of bribes from actors hoping to gain permission to mine jade.

“Min Aung Hlaing is a man who has presided over some of the worst crimes against humanity the world has known in recent years, and now he has led a coup that has plunged Myanmar into a crisis that threatens to bring back the countries in the darkest days of military rule, ”said Dietz.

“His family’s involvement in the corruption of the jade industry may not come as a surprise to many, but it is a testament to how this lucrative industry has helped maintain the power and influence of military elites and perpetuated the conflict across the country, even as the NLD tried to reform the industry, ”he said.

The Global Witness study also shows that armed ethnic groups, in particular the Kachin Independence Amy (KIA), the United Wa State Army (UWSA) and the Arakan Army (AA) have also increased their involvement in the jade trade. , with AA becoming a major player in recent years.

When the NLD-led government suspended jade licenses, military-controlled companies and others were able to increase illegal mining due to a lack of oversight and enforcement. Sometimes the traditional enemies of the Tatmadaw would work alongside it to mine as much jade together as they could before their permits expired, or to mine expired plots of land together.

“The Tatmadaw, armed militias, and armed ethnic groups such as the KIA, UWSA, and AA have literally found common ground to unearth jade ever faster and more destructively, even as they were in conflict elsewhere in the country, ”said Dietz.

With the loot from the mines, different actors were then able to purchase weapons in large numbers, which encouraged more violent conflicts to take control of more areas to be exploited in what research described as a “vicious cycle of mining.” jade and conflict ”.

Sometimes, agreements between separate armed groups involved exchanges of jade or jade rights for weapons.

For example, UWSA, engaged in mining in Hpakant in northern Kachin state, owed KIA activity taxes, which it paid by manufacturing weapons. The KIA then sold the weapons to the AA, who in turn would work alongside the KIA to collect jade payments, which funded the conflict against the Tatmadaw in Rakhine and Chin states, according to the study. .

The study also found that 90 percent of the jade mined in Myanmar is smuggled from the country to China, underlining “the highly illicit nature of the industry.”

Almost all of the jade industry regulations put in place under the democratically elected government of the NLD are not currently enforced. And Global Witness believes instability in the post-coup environment will allow even more corruption, with the military likely resuming suspended mining and issuing permits to raise funds to support what the NGO called its “illegitimate administration”.

In Hpakant, where the world’s richest jade deposits are located, fighting between Tatmadaw and KIA has exploded since the coup, according to the report.

But before the coup, Hpakant had seen rare cooperation between the Tatmadaw and its enemies, as they worked together to collect formal and informal taxes and ignored security to extract the jade as quickly as possible in the face of rapid expiration of mining licenses.

Tragedy struck Hpakant on July 2, 2020 when heavy rains caused piles of loose soil and rubble to collapse, burying more than 200 scavengers in search of jade pieces left by miners and creating a ‘lake of mud Filled with bodies.

At least 174 people have died, 100 of whom are missing and 54 injured in the mudslide.

“The natural resources of Kachin State continue to be ruthlessly plundered by the army and armed groups, while the local population in Hpakant suffers from the consequences of violent conflict, post-coup repression , deadly landslides and a narcotics epidemic, ”said Dietz.

“As the Burmese people risk their lives to stand up to the military regime, the priority of the international community at this time should be to end the coup and help ensure the return to power of a democratic government. and legitimate, ”said Dietz, adding:“ A crucial part of this is to cut off financial flows to the military through targeted sanctions against their economic interests, including the jade industry. “

The report, much of which had been compiled before the coup, identified four obstacles to what it called “breaking the jade-conflict link.”

First, the Myanmar government needed to re-prioritize reforms, Global Witness said. And although the fallen government made efforts to reform itself, those who profited from mining undermined them whenever they could.

Second, Myanmar’s peace process should have included discussions on natural resource management. Third, the Tatmadaw and other armed groups should have been forced to leave the jade industry. And finally, constitutional reform was needed to diminish the power and influence of the military.

“These four structural barriers remain relevant today,” the report said, adding: “Unfortunately, the coup makes it highly unlikely that any of these issues will be resolved, at least as long as the Tatmadaw maintains its control. on the government of Myanmar. “

Global Witness now recommends that the international community avoid legitimizing the current military government and denying it representation in international forums in favor of Myanmar’s shadow government of national unity (NUG).

It should also ban companies from doing business with military-owned companies and support initiatives that include ethnic minority groups in resource management decisions, Global Witness said.

NUG should also develop an inclusive natural resource management plan that recognizes the relationship between jade and conflict, warning companies that do business with the military that they may face censorship from a future government or the international community, and make reform proposals that show how the NUG jade policy would differ not only from the junta, but also from the government that preceded it.

KIA, meanwhile, is expected to demonstrate responsible stewardship of the jade industry by engaging with civil society organizations, local communities and political organizations, including NUG.

It is also expected to investigate jade-related corruption within its ranks and offer more transparency in jade-related transactions, with a commitment to eventually exit the industry altogether.

Global Witness also called on national and international companies to review their current operations and stop engaging in those that enrich the junta. He also urged consumers to boycott any jade or gemstone sourced from Myanmar in order to help end the link between jade and conflict.