While several news reports suggest that foreign investors and transnational companies are concerned about the risks posed by the military coup in Myanmar, there needs to be a sober assessment of those companies that were already doing business with the Tatmadaw [the Myanmar military] and its cronies. This includes Accor, whose business partner Max Myanmar Group was named in the 2019 report to the UN Human Rights Council for its involvement in crimes against humanity.
Building and operating hotels with known cronies of the Myanmar military
In 2013 Accor entered into a business relationship with the conglomerate Max Myanmar Group, owned by the business tycoon, Zaw Zaw. At the time Max Myanmar and all of its subsidiary companies were on the sanctions list of the US Government. According to leaked US diplomatic cables in 2007, 2008 and 2009, Zaw Zaw, the owner of Max Myanmar, was a known military crony and had very close ties to senior military generals. This was in fact public knowledge at the time. Despite this, Accor refused to undertake any due diligence or human rights risk assessment and opened The Lake Garden Nay Pyi Taw – MGallery by Sofitel with Max Myanmar. This was followed by a second hotel, the Novotel Yangon Max, in April 2015.
Reports of Max Myanmar’s involvement in land grabs displacing farmers and the pollution and destruction of communities due to mining were also ignored by Accor.
In fact Zaw Zaw and his companies were included in the sanctions list under the Tom Lantos Block Burmese JADE (Junta’s Anti-Democratic Efforts) Act of 2008. Max Myanmar and its subsidiaries were only removed from the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list in October 2016 – three years after Accor started doing business with Max Myanmar’s Max Hotels Group.
After a vicious campaign against workers for forming a trade union at The Lake Garden Nay Pyi Taw – MGallery by Sofitel in 2018, Accor considered the matter resolved when Zaw Zaw issued new employment contracts in his own name. In the new contracts Zaw Zaw put himself as the “Employer” in his individual capacity. As a known business tycoon linked to the military, this created a climate of fear that ended any efforts to organize. Management then assisted the union representatives to voluntarily de-register ther union. Workers at Novotel Max in Yangon could not even try.
Crimes against humanity
In September 2019 a report to the UN Human Rights Council identified dozens of companies with direct and indirect ties to the Tatmadaw that enable this powerful institution to operate with impunity while committing crimes against humanity. Among the companies listed is the conglomerate Max Myanmar Group, the business partner of Accor. [This section is based on an article published on the IUF website on 22 September 2019].
In its report to the 42nd Session of the UN Human Rights Council on September 9-27, 2019, the Independent International Fact-Finding Mission on Myanmar concludes that: “… the Mission now has reasonable grounds to also conclude that officials from KBZ Group and Max Myanmar should be criminally investigated and, if appropriate, prosecuted for making a substantial and direct contribution to the commission of the crime against humanity of ‘other inhumane acts’ and persecution as outlined above in the applicable legal framework on business officials and criminal liability.”
The 2019 report on the Myanmar military’s business ties followed the recommendations in 2018 that accountability can only be enforced if the Tatmadaw is isolated financially, removing the sources of revenue and economic interests that are the basis for its autonomy and impunity. Foreign and domestic business relationships that generate revenue for the Tatmadaw contribute to human rights abuses including murder, imprisonment, enforced disappearance, torture, rape, sexual slavery and other forms of sexual violence, persecution and enslavement. The 2018 Mission report also concluded that: “… there is sufficient information to warrant the investigation and prosecution of senior officials in the Tatmadaw chain of command, so that a competent court can determine their liability for genocide in relation to the situation in Rakhine State.”
Max Myanmar is listed as one of 11 private conglomerates considered to be “the largest crony companies in Myanmar”. The 2019 report describes donations by Max Myanmar to support military clearance operations in Rakhine State and the company’s involvement in “the construction of roads that go through villages destroyed in the 2017 clearance operations, the building of processing sites for Rohingya that have been described as internment camps, and the construction of a border fence between Myanmar and Bangladesh.”
As chairperson, Zaw Zaw is among those company officials that the UN report recommends for prosecution: “… the Mission concludes on reasonable grounds that officials from KBZ Group and Max Myanmar aided, abetted, or otherwise assisted in the crimes against humanity of persecution and other inhumane acts.”
Although the French 2017 “Corporate Duty of Vigilance” law makes this human rights due diligence a legal obligation, and requires publication of a vigilance plan. Accor’s 2017 plan made no mention of the risk assessment, prevention and mitigation process arising from partnering with business interests linked to the military in Myanmar.
While some foreign investors and transnational companies may be concerned about the military coup and its implcations for their business operations, stability and possibly even human rights, Accor will not share this concern. Having aligned itself with the military through Zaw Zaw’s Max Myanmar Group, it’s business as usual.