Myanmar government announces ground-breaking reforms of toxic jade business

Myanmar’s new government has announced a major shake up to licensing of its multi-billion dollar jade and gems business. This historic move follows work by Global Witness, Kachin Development Networking Group (KDNG), the Natural Resource Governance Institute (NRGI) and other Kachin State and Myanmar civil society actors and parliamentarians to expose widespread abuses at the heart of a vast, deeply corrupt trade.

Following a series of deadly landslides and continued revelations of corruption, cronyism and social harm, the industry regulator has said that mining permits will not be renewed, and no new permits will be granted until a reformed legal framework is in place.

Ahead of Myanmar’s election last year, the Global Witness investigation Jade: Myanmar’s “Big State Secret” revealed a string of notorious military figures and drug lords secretly controlling and profiting from the jade industry. The report also revealed the immense size of the sector, estimating official production at up to US$31 billion in 2014 alone; this is a figure equivalent to nearly half of the entire country’s GDP, yet the local population sees little benefit.

“This is a game changer,” said Juman Kubba, Senior Campaigner at Global Witness. “It suggests Aung San Suu Kyi’s government is serious about reform, and could help turn the page on the ruthless military rule, cronyism and human rights abuses of the recent past.”

“Freezing licences is a critical first step towards wresting control from the elites who have plundered the country’s jade riches for so many years, with total disregard for the environmental and social cost,” said Tsa Ji, General Secretary of KDNG. “Now a new approach to licensing is needed – one which puts local people and the environment first.”

Since the launch of Jade: Myanmar's "Big State Secret", the insatiable exploitation of the country’s most valuable mines in Kachin State has continued apace, with devastating environmental and social consequences. A horrendous sequence of landslides has led to hundreds of deaths and triggered widespread local protests. Meanwhile the struggle over jade remains a major driver of armed conflict between the Myanmar army and the Kachin Independence Organisation. The question of how Kachin State’s jade riches are shared and managed will be crucial to achieving a lasting peace.

“The 2015 election was a resounding call for change, starting with the governance of Myanmar’s all-important natural resources,” said Matthieu Salomon, Myanmar manager for the Natural Resource Governance Institute. “We welcome the government’s moves to live up to its promises of reform, and we call on its international partners to focus their efforts to support the change the people of Myanmar deserve.”

The new government’s announcement opens the door to wholesale reform of the jade and wider gems industry, and an end to abuses. It has the opportunity now to set up a framework for a responsible and sustainable business, which forms part of a broader, more inclusive economy for Myanmar. It must start by taking the following urgent actions:

• Agree principles for the sharing of benefits and responsibility for jade within the peace process, starting with the forthcoming 21^st Century Panglong Conference;
  
• Incorporate strong provisions on transparency, management and oversight into the new laws and regulations which will govern the gems sector;
  
• Introduce environmental and social measures to protect against negative impacts of jade mining such as landslides and to address local grievances fairly;
  
• Use the Extractive Industries Transparency Initiative (EITI) to publish more jade data, including details of permit holders, ultimate owners of jade companies, contract terms and detailed sales records;
  
• Review company compliance with current jade mining terms and conditions;
  
• Review tax collection and increase transparency to address revenue losses;
  
• Assess the size, quality and value of remaining jade deposits as a basis for deciding the best approach to maximise the benefit of this finite resource in the long term; 
  
• Establish an oversight committee to monitor and report regularly on progress of reform.
  

One of the best ways of catalysing these changes is through a national conference on jade sector reform. NRGI is currently developing proposals for such an event to take place in the coming months.

Beyond these jade industry-specific measures, 61 civil society groups in March this year called on the government to address the wider concerns of residents of Kachin State about natural resource management:

• Institution of federalism and self-determination that covers administration, judiciary, and legislation at the Kachin State level and which includes central government endorsement of a state minister elected by the Kachin State legislature;
  
• Recognition that the people of Kachin State are the ultimate owners of all natural resources above and below the ground, above and beneath the water, and in the atmosphere in Kachin State;
  
• Conferring upon the Kachin State government ultimate authority over natural resource extraction, management, taxation and revenue sharing;
  
• Cessation of all projects and natural resource extraction that is provoking conflict in ethnic areas, until such time as these conflicts are resolved through political means;
  
• “Free, Prior, Informed and Consent” from local communities before permission is granted for projects to operate;
  
• Transparent disclosure of data and public education concerning grievance mechanisms relating to natural resource extraction, taxation, licensing processes and revenue sharing;
  
• Accountability and monitoring of corruption, environmental degradation, armed conflict and social problems relating to natural resources; 
  
• Policies on natural resource management and revenue sharing that acknowledge and derive from analysis, by local and international researchers and experts, of local context, history and culture.