An employee walks past a billboard at a Coca-Cola bottling plant in Yangon on June 4, 2013. Coca-Cola on June 4 opened a factory in Myanmar as it returns to the former pariah state after an absence of more than six decades. AFP / Ye Aung Thu
Have a coke and a smile, the old saying goes, and when the beverage company became one of the first western firms to open in Myanmar in 2013 after decades of isolation, there was plenty be happy about.
But a new report about Coca-Cola’s local partner is cause for some frowning.
Dated June 30, the Responsible Investment in Myanmar 2015 Update says that Daw Shwe Cynn, one of four directors in local partner Coca-Cola Pinya Beverages Myanmar, has separate business interests in the domestic jade mining industry, which is notorious for horrendous working conditions.
Coca-Cola submits these reports to the US government, and at the time of background checks between 2009 and 2012, when it was prepping operations, “there were no findings that Pinya or its shareholders were deemed Specially Designated Nationals, as identified by the Office of Foreign Assets Control (OFAC),” the report says, referring to cronies blacklisted by the US.
But gadfly Global Witness must have searched a little harder.
The UK-based group, which exposes environmental and human rights abuses in the developing world, told Coca-Cola that Daw Shwe Cynn was also a director and minority shareholder in Xie Family Company, “which reportedly operates jade mines in Myanmar,” the report says.
“Our original due diligence was based on the best information available at that time,” the company said in the report, adding that “we remain confident that our investment is in compliance with applicable laws, and that our local business partners fully understand our expectations regarding human rights, workplace rights and ethical business conduct.”
Coca-Cola may be in the clear, but it’s not good PR to be linked in any way to Myanmar’s jade industry. Demand from China has created outsized expectations for the domestic labor force, and many resort to drugs to help them keep up. Addiction is rife.
How bad is it? Take a look at this New York Times video report with the subhead: “Jade’s Journey Marked by Drugs and Death.”
The revelation also makes you scratch your head and wonder what other ties are out there. The US has tossed out many sanctions against Myanmar, but some remain in place. And as this story proves, you don’t need sanctions to create uncomfortable links between companies.
“Unfortunately Coca-Cola won’t be the last western company to find skeletons in its Myanmar partner’s closet,” Juman Kubba, a researcher at Global Witness, told the Financial Times, which reported the news yesterday. “Widespread secrecy and opacity in the country make it difficult to know who you are really dealing with and what else they are up to.”
Though the Xie Family has not been accused of wrongdoing within the industry, the Financial Times, citing Global Witness documents and Wikileaks cables, reports that it had a “business relationship” at last year’s gem emporium with Myanmar Imperial Jade, part of the military-supported Union of Myanmar Economic Holdings.
