French Energy Company Suspends Payments to Myanmar Army

Myanmar’s army has lost a source of revenue as French energy giant Total said Wednesday that cash payments to a joint venture with the army have been suspended due to unrest in the country. Total has come under pressure from pro-democracy activists to “stop financing the junta” since a military coup in February which has been followed by a brutal crackdown on dissent. More than 800 people have been killed by the military, according to a local monitoring group. Total said in a statement that the decision to suspend payments was made at a May 12 meeting of shareholders of Moattama Gas Transportation Company Limited (MGTC), the joint venture which owns a pipeline linking the Yadana gas field and Thailand. The suspension was proposed by Total, which holds a 31 percent stake in MGTC and US partner Chevron (28 percent). Thai firm PTTEP holds a quarter of the company while 15 percent is held by military-controlled Myanmar Oil and Gas Enterprise (MOGE). MOGE generates annual revenues of around $1 billion from the sale of natural gas. “In light of the unstable context in Myanmar… cash distributions to the shareholders of the company have been suspended” effective from April 1, Total said. It added that it “condemns the violence and human rights abuses occurring in Myanmar” and would comply with any potential sanctions against the junta from the EU or U.S. The MGTC pipeline brings gas from the offshore Yadana field operated by Total to Myanmar’s border with Thailand. Total said it would continue to produce gas so as not to disrupt electricity supply in either country. Total paid around $230 million to the Myanmar authorities in 2019 and another $176 million in 2020 in the form of taxes and “production rights,” according to the company’s own financial statements. French newspaper Le Monde detailed Total’s involvement in MGTC in early May, also reporting that the company was based in tax haven Bermuda. “The colossal profits of the gas operations do not pass through the coffers of the Myanmar state, but are massively recuperated by a company totally controlled by the military,” Le Monde found.  Days after publishing the story, Le Monde said Total pulled several adverts it had planned to run in its pages in the following weeks. Foreign firms NGOs have urged foreign companies to review their presence in Myanmar as the military dramatically ramped up its use of lethal force against protesters. The junta has vested interests in large swathes of the country’s economy, from mining to banking, oil and tourism. French energy giant EDF suspended activities in the country, where it is involved in a $1.5 billion project to build a hydroelectric dam. Japanese automaker Suzuki also halted operations at its two local plants shortly after the military coup. The factories assembled 13,300 vehicles in 2019, primarily for the domestic market.  But Suzuki, present in Myanmar since 1998, reopened the facilities again a few days later and intends to build a third production site in the country.  Myanmar is also a key manufacturer in the clothing industry and groups such as Italy’s Benetton and Sweden’s H&M have suspended all new orders from the country. Japanese brewer Kirin said it would cut business ties with the military with which it operates two local breweries, accusing the junta of acting “in contradiction” to its principles on human rights.  But the firm said it currently has no intention to pull out completely from a market that accounts for around two percent of its overall turnover. 
 
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