Monday 24th October 2016

Resource Clips

Myanmar’s dirty ‘state secret’

Environmental and human rights abuses taint the most prestigious type of jade

by Greg Klein

One of the planet’s most precious gems, the highest-quality jade can sell for over $13,000 a kilo. What that meant to Myanmar last year alone was at least $12 billion in production, more likely up to $31 billion, according to Global Witness. That figure represents about 48% of the impoverished country’s GDP and 46 times the expenditures on health care. But, the human rights group maintains, most of the money goes to government insiders and military officers, their families and cronies, and the war efforts of both sides in an independence struggle that’s left thousands dead since 2011.

It’s another story of conflict minerals from a deeply troubled part of the world. Yet Chinese appetite persists for jade in both its forms, the more expensive but often ethically tainted jadeite from next-door Myanmar and the more modestly priced nephrite jade, of which British Columbia supplies about 75% of world supply. As Myanmar prepares for its first elections since the military junta ended in 2011, Global Witness released an October 23 study calling for thorough reform of the jadeite industry, possibly “the biggest natural resources heist in modern history.”

It centres around Hpakant in Kachin state, the world’s biggest jade mining district and described by a community leader as “one of the most valuable places on earth because you can earn billions from a very small area… and yet only a small number of people are getting advantages.”

“If openly, fairly and sustainably managed, this industry could transform the fortunes of the Kachin population and help drive development across Myanmar,” Global Witness states. “Instead, the people of Kachin state are seeing their livelihoods disappear and their landscape shattered by the intensifying scramble for their most prized asset. Conditions in jade mines are often fatally dangerous, while those who stand in the way of the guns and machines face land grabs, intimidation and violence.”

As heavy equipment and explosives demolish hills of jade, “mountains have become valleys and valleys have become mountains,” one source said. Polluted rivers, water-filled craters, deforestation, landslides and flooding now characterize Hpakant.

As for the beneficiaries, Global Witness’ 12-month investigation revealed a list that “reads like a who’s who from the darkest days of junta rule.” They include families of high-ranking military and government figures, some dating to the dictatorship, others with the current cabinet. At least four “army companies” exploit jade to provide “off-budget finance for secret military projects and an income stream for retired army officers.” Tycoons with junta connections lead a third category of “crony companies.” Drug lords control a fourth category.

The four can overlap. Drug lords, according to one source, can bribe an army officer for his assistance in securing a jade concession. “If the licence comes through, this general or one of his family members will get a share in the mining company.”

They do very well indeed, at Hpakant’s expense. Jade companies linked to former military dictator Than Shwe, current government minister Ohn Myint, drug lord Wei Hsueh Kang and government crony Aike Htwe “recorded around US$430 million in pre-tax sales at the 2014 official government jade sale alone.”

Jade also provides the main source of income for two rebel groups, the Kachin Independence Army and the Kachin Independence Organization. That makes “the battle for control of jade revenues a strategic priority for both sides in the conflict.” Apart from having killed thousands of people since 2011, the struggle has displaced another 100,000, Global Witness reports. Like the government military, the rebels stand accused of war crimes.

When many fear hardliners may finance sectarian violence and dirty tricks, Myanmar’s citizens urgently need to know where the jade money is going.

With the industry playing an integral role in both motivating and financing the struggle, peace depends on addressing “the question of who benefits from Kachin state’s jade.”

Until the early 1990s, when the junta got involved in jade concessions, small-scale operations with local miners benefited. Now, with a “massive upswing” in jade extraction over the last year, local people fear resource depletion could leave nothing for future generations.

That adds a sense of urgency to Global Witness’ call for reform. So does the impending November 8 election. “When many fear hardliners may finance sectarian violence and dirty tricks, Myanmar’s citizens urgently need to know where the jade money is going.”

Global Witness describes its mission as investigating and campaigning “to change the system by exposing the economic networks behind conflict, corruption and environmental destruction.” Among other projects, previous Global Witness campaigns have targeted conflict diamonds in Zimbabwe and the Central African Republic, and conflict gold and tantalum in the Democratic Republic of Congo.

Download Jade: Myanmar’s “Big State Secret”.

November 22 update: A landslide at a Myanmar jade mining site kills over 100 people.

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