Burma Update

Burma Update

6th December 2006

There's surely a compelling case that the marketing of jade and other gems from Burma constitutes a violation of the precepts which lie behind the Kimberley Process applied to diamonds. In this update, we include a Xinhua article, based on a news item that appeared in the New Light of Myanmar (BLM) a fortnight ago.

In the NLM article, the junta leader, Thein Sein, is quoted as emphasising the "lucrative" benefits of the gem industry, pointing out that jade is now surpassing the market in gems as a bread winner for the regime and others involved in the mining and marketing sides of the precious metals industry.

Burma is the only nation that produces high quality jade in Asia. The government will give priority to nationals who are themselves engaged in the gems industries and put their capital into the business in accord with one of the four economic objectives. There will be scrutiny of whether the capital is based on "illegal" earnings, and supervision of mining, transport and sale of gems and jade is to be "in line with rules and regulations of the Myanma Gems Enterprise."

The need to develop the "value-added" side of Burma's jade and gems industry is a much-talked-about, little-implemented theme in news stories now coming out of the country.

The South Korean company, Daewoo, is the operator of the developing gas fields project in Burmese waters in the Bay of Bengal off the Arakan coast. It is also the lead player in a South Korean consortium to buy out Ivanhoe's interest in the Monywa copper mine.

Now, it's being accused of illegally exporting "strategic" goods and technology to the Burma military which could be employed in manfuacturing arms.

[Thanks to Eric Snider for providing information to this commentary]

Myanmar to further develop finished gem industry

China Economic Net

5th December 2006

Myanmar leader Lieutenant-General Thein Sein has stressed the need to develop finished gem industry to pave way for exporting value-added products.

Thein Sein, first secretary of the State Peace and Development Council, made the remarks here Monday, the official newspaper New Light of Myanmar reported Tuesday.

Thein Sein, who is also chairman of the Leading Committee for Development of Myanmar Gems Industries, said the export of value- added gem products rather than raw material will earn more foreign exchange.

"Earnings from the sale of jade, gems and pearl at present are more than those of the past with the emergence of jade markets in neighboring countries where jade is in great demand," he said.

"Myanmar is the only nation that produces high quality jade in Asia region," said the Myanmar leader.

According to the state-run Myanmar Gems Enterprise, the government will grant 215 more mining blocks for local investors in 2007 to promote gems and jade production.

Of the new mining blocks allotted, 77 are in Shan state and 39 in Mandalay division for gem mining, while 99 near Lonekin in Kachin state are for jade mining.

Each block measures one acre (0. 405 hectare) and the blocks are to be leased on a three-year term.

Value-added market in Myanmar has made good progress over the past three years with the country exporting one ton of value-added jade products to Germany in October, said the report, adding that Myanmar is planning to export more amount of value-added jade products to Spain in December.

In December last year, Myanmar introduced some 370 mining blocks for jade exploration in Phakant and Lonkin in northernmost Kachin state and biddings for the blocks were also invited from the private companies.

There are six mining areas in Myanmar under gem exploration, namely, Mogok, Mongshu, Lonkin/Phakant, Khamhti, Moenyin and Namyar.

To earn foreign exchange, Myanmar started to hold gem shows in 1964, sponsoring annual and mid-year ones, adding special jade and gem sale since 2004. Since then the country has earned a total of over 600 million dollars from all such events, attended by foreign gem traders mostly coming from China, China's Hong Kong, Thailand and Japan.

Myanmar, a well-known producer of jades and gems in the world, possesses such gems as ruby, diamond, cat's eye, emerald, topaz, pearl, sapphire, coral and a variety of garnet tinged with yellow.

To develop gem mining industry, Myanmar enacted the New Gemstone Law in 1995, allowing national entrepreneurs to mine, produce, transport and sell finished gemstone and manufactured jewelry at home and abroad.

Since 2000, the government has started mining of gems and jade in joint venture with 10 private companies under profit sharing basis.

S. Korean Companies "Exported Arms Technology to Burma"

Yeni: Irrawaddy-on-line

6th December 2006

Fourteen high-ranking officials from seven South Korean companies, including Daewoo International President Lee Tae-yong, have been indicted on charges of involvement in the construction of arms factories in Burma and other related offences, the South Korean press reported on Wednesday.

The 14 were charged with violating strategic goods regulations and fabricating export documents, according to the English-language Seoul newspaper The Korea Times. It is the first time Korean companies have been named in legal action involving the unauthorized export of strategic goods and technology that could be used to build arms factories overseas.

Quoting a source in the Seoul public prosecutor's office, the newspaper reported that the companies-including Daewoo International and Doosan Infracore-had completed contracts with Burma to "export plant facilities, machines and technology information which can be used to make various cannon weapons." Government agents had uncovered the contacts with Burma, the newspaper said.

Ninety percent of the contracted weapons-producing factories had been built and 90 percent of contract deposits had been paid, the report disclosed. Daewoo International was identified as the core company involved in the activity as it was in charge of planning the projects and overseeing technology counseling. Doosan Infracore provided the equipment to build the factories. No further details were given in the report.

Following increasing pressure and criticism, the South Korean government tightened export controls over strategic goods, covering items such as equipment, technologies, software and chemicals.

Officials from the public prosecutor's office searched Daewoo offices in August.

The public prosecutor's office said evidence had been uncovered indicating detonating devices for artillery shells were to be exported. But Daewoo-engaged in developing Burmese offshore gas fields in the Bay of Bengal-claimed that the exported goods were lathes and press machines.

South Korea is a participant in the Wassenaar Arrangement-the first multilateral institution designed to prevent the destabilizing accumulation of arms and dual-use goods and technologies. The WA was founded by 33 countries in July 1996.