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Turning tables: NGOs commend multinational for transparency in Myanmar

By Marta Kasztelan , 14-Jul-2014
Last updated on 14-Jul-2014 at 07:38 GMT2014-07-14T07:38:03Z

NGOs commend Coca-Cola for its human rights transparency in Myanmar

In a rare move, NGOs and rights experts commended Coca-Cola for a report it has submitted with the US State Department regarding its responsible business practices in Myanmar.

Filing such reports is a mandatory requirement for all US companies with total investments of more than US$500,000 in the Southeast Asian country.

Under the “Responsible Business Reporting Requirements“, which were introduced after Washington lifted sanctions on doing business in Myanmar in 2012, US enterprises need to disclose information about a range of human rights and environmental policies and procedures with respect to their investment in the country.

Vicky Bowman, director of the Myanmar Centre for Responsible Business, a think tank specialising in research and advice on the subject, praised Coca Cola’s report and said it was “more comprehensive than any other US company's to date.”

Its main value, according to Bowman, was “that it talks about the areas in which [Coca Cola] is still facing challenges, such as land and water, and highlights where it needs to do further work”. 

Such a level of disclosure, she told FoodNavigator-Asia, will allow all interested stakeholders, like communities, investors and the US government, “to raise any concerns they may have with the company”.

Coke’s paper was equally well received by Earth Rights International (ERI), an NGO litigating against corporations accused of human rights abuses whose legal advocacy coordinator, Jonathan Kauffman, described it as “a welcome change of pace from the reports submitted by other investors”.

What makes the… report unique is the level of transparency it provides, both into the company’s successes and its failure in responsible business conduct,” Kauffman wrote on the organisation‘s website.

According to Kauffman, the level of detail about the due diligence processes Coke went through, together with the concerns it identified and the steps it took to ensure both the company and its partners are mitigating serious risks is “exactly the kind of transparency needed to build trust between a company like Coca-Cola and the communities its operations will affect”.

To name just a few, the beverage giant identified land rights, environmental degradation, discrimination against women and ethnic minorities, poor wages and excessive working hours, and abuses by military forces as some of the potential human rights risks associated with its Myanmar operations.

But lets’ not pop the champagne just yet. As Kauffman pointed out: “There are a couple of places in the report where Coke may be hiding the ball.“

He observed, for example, that while Coca-Cola stated it had a waste water treatment issue that is in the process of being resolved, it never explained in detail what was happening with that waste water and who was affected by it.

Kauffman also raised concerns about the report’s silence regarding details about land rights risks. He wrote: “Coke explains that it does not have a system to investigate land acquisition issues and vaguely suggests that it will develop something in the future as it expands its operations on the ground.” 

It also did not clarify whether the “Grand Land“ on which its current facilities are operating also pose any land rights concerns.

Responding to questions about the shortcomings of its report, Belinda Ford, head of public affairs for Coca-Cola Myanmar, told FoodNavigator-Asia: “The Responsible Investment in Myanmar report documents the ongoing, comprehensive economic and social due diligence and mitigation efforts conducted over the last six months, outlining the gaps, challenges and the progress made since the initial report was submitted in December 2013. 

“Coca-Cola’s progress in Myanmar is benchmarked by its own internal processes and global policies and procedures, and the report is a clear and transparent summary of these efforts.“

However, despite the fact that the US giant carried out the best “due diligence“ in the country, responsible business experts have stressed that Coke is still facing an extremely difficult task if it wants to fully discharge its human rights obligations under international standards.

Kathy Mulvey of Eiris, a social enterprise providing environmental, social and governance research and advice to responsible investors, told FoodNavigator-Asia that Coca-Cola “faces enormous challenges to fulfilling the responsibility to respect human rights as articulated in the United Nations Guiding Principles on Business and Human Rights”.

She observed that despite positive developments, Myanmar’s reforms remain fragile and reversible, and therefore risks to investors are high. “Land confiscation, human rights abuses, inter-ethnic violence and corruption harm the people of Burma/Myanmar, and can seriously damage investment value,” she said.

It is for this reason, Mulvey emphasised, that none of the companies Eiris has assessed and profiled to date achieved an overall grade of “good“, “which would indicate that a company was managing the risks related to its Burma/Myanmar investments”.

Still, all the challenges facing Coke aside, it is important to give praise when it is due and the company’s transparency certainly merits the approvals it received. 

It is now up to stakeholders to use the information provided by Coca-Cola and push the company to continue improving its social performance and play a positive role in Myanmar’s transition.

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