AUTHOR: CLARE HAMMOND, SENIOR MYANMAR CAMPAIGNER AT GLOBAL WITNESS
Read the report by global witness – Conflict Rubies: How luxury jewellers risk funding military abuses in Myanmar
Today, companies cannot responsibly source or sell gemstones from Myanmar.
We were pleased when RJC member Harry Winston, citing ethical concerns, announced earlier this month that it would stop sourcing gemstones that originated in Myanmar. The company has stepped up to join several other RJC members, namely Boodles, Signet, and Tiffany & Co., which all state publicly that they do not source gemstones from Myanmar. Tiffany & Co. attributed its decision to concerns about ongoing human rights violations and a lack of transparency.
These companies are among industry leaders when it comes to responsible sourcing from Myanmar, recognising that it’s impossible to both meet their OECD due diligence obligations and continue sourcing rubies and gemstones from Myanmar in the current context. By excluding all gemstones originating from Myanmar from their supply chains, they’re showing it’s possible for other companies to do the same.
Over the past year, Global Witness has investigated the links between gemstone mining in Myanmar and conflict and human rights abuses. We have interviewed more than 150 stakeholders and analysed thousands of sources, including Extractive Industries Transparency Initiative reporting, corporate records, maps, trade data and public sources in English and Burmese.
Our main finding is that due to the Myanmar military and non-state armed groups’ control of and links to the sector, and their connection to widespread and serious human rights abuses, it is not possible to source Burmese gemstones without directly or indirectly supporting these armed actors.
We found the industry has been tightly controlled by the country’s military since the 1990s – the same military that has been accused of the gravest crimes, including genocide, for which it faces charges before international tribunals.
Over the past three decades, Myanmar’s military has violently dispossessed local communities, both in Mogok, the country’s largest mining area, and in Mong Hsu, where a new ruby deposit was found in late 1990, to seize control of the most lucrative mines. It has granted mining rights to its own conglomerates, which use their revenue to fund units that commit atrocities. It has used Myanmar’s gemstone wealth to buy off armed opposition, granting lucrative licences to non-state armed actors.
It has also forced private businesspeople to sign opaque partnership agreements with its conglomerates. This makes due diligence extremely difficult, because traders may believe they are buying gemstones from privately owned mines in Myanmar, when in fact they risk inadvertently funding the military through undisclosed profit-sharing or other leasing arrangements.
We found that gemstones that fund abuses in Myanmar are then smuggled to neighbouring countries, particularly Thailand, for processing, in a murky trade that involves multiple payments to armed actors. By the time rubies and other coloured gemstones reach Thailand, we found that most dealers who supply international jewellery brands have no idea which mines these gemstones came from, and they often don’t try to find out.
Only one of the 20 dealers we met in Thailand identified a mine in Myanmar from which it had sourced a particular gemstone. We found that for at least 20 years, this mine was licensed to military conglomerate Myanma Economic Holdings Limited, which is sanctioned by the US, the EU, the UK and others, because its revenues fund human rights abuses.
And now, the military’s illegal takeover of state functions has placed regulatory control over the industry back in its own hands. All gemstone mining in Myanmar has been illegal since last year, when the last remaining licence expired, following a suspension of the licencing process by Aung San Suu Kyi’s National League for Democracy government in 2016. Myanmar’s National Unity Government, a government-in-exile formed after the military coup by elected lawmakers and other ethnic and civil society leaders, has said it would consider any new licences issued by the military to be illegal and would blacklist companies obtaining them.
Since the coup this past February, the military has been systematically demanding bribes from tens of thousands of residents in Mogok and Mong Hsu who are mining illegally by hand in sites that were previously licenced to the military’s conglomerates and businesses linked to it. These miners are highly vulnerable to arbitrary violence and other forms of exploitation.
Initiatives like the RJC’s Code of Practices standard can play an essential role in improving sourcing practices along the coloured gemstone value chain. But companies need to do more to demand transparency from suppliers and to ensure that the gemstones they buy are free from links to conflict, human rights abuses, and illegality. They also need to ensure they are not violating sanctions imposed by multiple countries on key institutions in Myanmar’s gemstone industry, including the state-owned regulator.
In the case of Myanmar, any company following the standard and applying the OECD Due Diligence Guidance will conclude that responsible sourcing of coloured gemstones from Myanmar, including through processers in Thailand and other third countries, is impossible in the current context. This also applies to rubies exported from Myanmar before the military coup, given the long history of abuse and exploitation in the country’s gemstone mines.
International boycotts of Myanmar rubies and other coloured gemstones will be a powerful disincentive for the military to start issuing licences again, preventing it from cashing in on the country’s natural resource wealth at the expense of the people it is oppressing.
Governments and companies around the world are now taking action to cut off financial lifelines that will sustain the military’s illegal takeover and fund its atrocities against innocent civilians. We call on members of the RJC to support these efforts, in line with the OECD Guidance, to break the nexus between conflict and illegal exploitation of coloured gemstones in Myanmar, by excluding Burmese rubies, sapphires, spinels and other gemstones from their supply chains, until such time as responsible sourcing becomes possible.
And, due to the nature of the ruby industry, changes in the market for Burmese rubies may impact the market in rubies from Mozambique. We remain very concerned over well-documented reports of serious human rights abuses associated with Gemfields’ Mozambique operations there and believe that rubies from Gemfields’ Montepuez concession are not an ethical alternative to those from Myanmar.