Will South Korea stop bankrolling Myanmar’s military?

When Myanmar’s ruling National League for Democracy claimed landslide victory in the November 2020 general elections, the Tatmadaw, the country’s armed forces, quickly rejected the results, citing electoral fraud. Three months later, on February 1, 2021, this rejection would turn bloody as the military launched a brutal coup that landed many former officials, including state counsellor Aung San Suu Kyi, in prison.

Today, more than a year later, the country remains in conflict: dissent is quashed; activists have been harassed, if not outright killed; violence has become the norm. Democracy is dying.

In response, many energy companies across the world have pulled out from Myanmar, unwilling to have their money soaked in Burmese blood. This list includes Malaysia’s Petronas, Australia’s Woodside, France’s Total, America’s Chevron, and Japan’s Mitsubishi. Notoriously missing from this list, however, is South Korea, supposedly a bastion of democracy in Asia.

POSCO is a South Korean steelmaking company and one of its subsidiaries, POSCO International, is the country’s largest trading company. Since 2000, POSCO International has been running the Shwe natural gas field in Myanmar, together with the state-owned Myanmar Oil and Gas Enterprise (MOGE). South Korea’s state-run Korea Gas Corporation also owns an 8.5-percent stake.

The Shwe gas project, in which POSCO International invested about 1.53 billion dollars and holds a 51-percent stake, is the company’s biggest business in Myanmar — even throughout the bloody coup. Eighty percent of all the gas produced is sold to China, and in effect provides the MOGE (and the military by extension) some USD 300 million per year.

In June 2019, right in the middle of Myanmar’s violence against its Rohingya minority, POSCO International sold a warship to the military. Since 2013, POSCO Coated & Color Steel Co. Ltd (POSCO C&C), another subsidiary, has also been in a joint venture with Myanmar Economic Holdings Ltd, an economic arm of the military which the United Nations found complicit in the Rohingya genocide.

Civil society speaks up

South Korea is known to stay mum on matters of human rights and democracy, often opting to stay out of what they deem to be other countries’ domestic affairs.  

But in the past year, South Korean civil society, along with community organizations from Myanmar, have magnified their calls for justice and accountability. One-person demonstrations have taken place in front of the Chinese and Russian embassies — representing the two powers propping up the Tatmadaw — for 200 days. Activists have even held rallies and press conferences in front of the POSCO office in Seoul.

The strong pressure has bent the South Korean government and National Assembly, both of which came out with statements in the wake of the coup, declaring support for the country’s democracy. The National Security Council “expressed its profound regret at the situation and reaffirmed the need to respect Myanmar citizens’ right of assembly and protest.”

The National Assembly went a step further, defining the coup as a “serious defiance of democracy” and urging immediate release of Aung San Suu Kyi and other political figures from detention.

Civil society sought to push the government to take further action by highlighting the complicity of POSCO (among other corporations and state entities) in the Tatmadaw’s atrocities. In December 2020, two months before the coup, human rights defenders filed a complaint with the Korea National Contact Point (NCP), claiming that by working with the Myanmar military, several South Korean companies were being remiss in their international obligation and contributing to the dire human rights situation in the Southeast Asian country.

The Korea NCP is responsible for monitoring multinational enterprises and ensuring that they adhere to the OECD’s Guidelines for Multinational Enterprises, which help corporations to “minimize adverse impact on economy, society, and the environment.”

Unfortunately, the Korea NCP is notorious for consistently siding with corporations since its founding in 2000, so much so that the NGO OECD Watch once characterized it as lacking “the confidence of social partners and other stakeholders” as well as the “ability to act with impartiality.”

Still, civil society, including the Korean House for International Solidarity, where this writer serves as the executive director, pressed on. They had reasons to be hopeful. While their initial 2020 complaint was met with silence, attention soon soared following the Myanmar coup. Many South Korea citizens, progressive actors, and even pro-business conservative political parties spoke up in support of Myanmar’s democracy.

Amid mounting pressure from the UN and the international community at large, which raised pointed questions about the ethics of corporate investment in Myanmar, the Korea NCP was suddenly in an unusual situation of handling a complaint that had attracted unprecedented attention.

Pro-business machine

Hopes were dashed, though, when the Korea NCP rejected the complaint in July 2021 despite the Tatmadaw’s brutal vice grip on Myanmar. “The NCP is not able to judge what is not corporate activities but the propriety of paying dividends to shareholders. It is not our role to engage in acts that could be construed as commentaries on the Myanmar government’s policies or laws,” it stated.

Lotte, whose name is on a five-star hotel in Yangon, did not respond to the complaint, and the Korea NCP found the company’s activities to be “of no relation to the Myanmar government’s action.”

Dae Sun Shipbuilding, the maker of the warship sold to the Myanmar navy, got off without reproach, as it “had manufactured a ship and delivered it to POSCO International without having any direct relationship to the Myanmar government.” The Korea NCP registered no objection even to POSCO International’s sale of the warship, citing “lack of evidence indicating that the vessel was involved in the Rohingya situation.”

“The NCP is not able to judge what is not corporate activities but the propriety of paying dividends to shareholders. It is not our role to engage in acts that could be construed as commentaries on the Myanmar government’s policies or laws,” the Korea NCP continued.

The most disappointing part, however, was in the summary statement. It wrote that “the conduct of the Myanmar government,” especially what it called “the conflict with the Rohingya tribe,” is that of the Myanmar government alone, and that “such events cannot have been prevented in the absence of corporate activities'' of South Korean firms.

All this was proof that the South Korean system and laws are inherently in favor of corporations, and that the Korea NCP, which was established in accordance with the OECD standards, is part of this entrenched pro-business machine. Without a strong, well-enforced law that empowers the government to intervene with the overseas acts of domestic companies, such a culture will only continue.

Unfortunately, the National Assembly hasn’t shown much interest in such a piece of legislation. A debate on possible laws took place in August 2021, but there has been little progress since.

POSCO International, for its part, argues that their presence in Myanmar was even helping the Southeast country cling on to its democracy. If they left, so the argument goes, Chinese companies would take over and could have a more negative impact on the country. Meanwhile, POSCO C&C announced that it would buy MEHL out of their joint venture, effectively ending the partnership.

To this day the Lotte Hotel has yet to close, and as for the warship, POSCO claims that what it exported to Myanmar was a civilian ship.

Disappointing administrations

In November 2017, then-President Moon Jae-in started promoting his administration’s “New Southern Policy.” Under its slogan of “People, Peace, and Prosperity,” the policy aimed to boost South Korea’s economic cooperation with Southeast Asian countries. In line with this, too, was the Moon administration’s public statement of support of Myanmar’s democracy following the coup.

But statements have remained statements; there have been no concrete measures to put the pressure on the Tatmadaw, and money continued to flow from South Korean companies into the hands of the murderous regime.

Though disappointing, such tepidness from South Korea is unsurprising. Even before the coup, during the height of Myanmar’s Rohingya controversy, the South Korean government was holding briefing sessions to discuss investments in Rakhine, the very site where the genocide occurred. South Korea’s investments in Cambodia, Thailand, and the Philippines — all with questionable records on human rights and democracy — have steadily increased under Moon’s watch.

It's clear where the Moon administration's priorities lay: in benefiting South Korean corporations rather than, sometimes even at the cost of, democracy or human rights.

On March 9, 2022, conservative party candidate Yoon Suk-yeol won South Korea’s presidential election. Experts expect him to take a more hardline approach to China and Russia, as well as be more vocal against the Tatmadaw. Whether or not his strong words translate to decisive action have yet to be seen.

One of the most powerful weapons in South Korea’s arsenal is to suspend corporate investments in Myanmar — something Yoon may not be willing to use. During the campaign trail, in fact, Yoon pledged to reduce restrictions on businesses even further, promising to water down the recently passed Severe Accident Punishment Act, which was originally crafted to lower the number of industrial accident-related worker deaths in the country.

Statements have remained statements; there have been no concrete measures to put the pressure on the Tatmadaw, and money continued to flow from South Korean companies into the hands of the murderous regime.

Yoon is such a corporate-leaning candidate that his victory has even sparked fears that working hours will increase while wages will be kept down. Policies by the Moon administration that seek to protect workers’ welfare are also expected to be scaled back.

The hitherto unveiled policy direction of the incoming government doesn’t bode well just for workers’ rights in South Korea. Together with the conservative party’s usual positions that favor the corporate sector’s interests, the economic ties between South Korea and the Tatmadaw will not only persist, but could even deepen.

South Korea is seen to have achieved democracy and economic development. It’s now the world’s 10th largest economy, and elections are free and fair. The K-pop group BTS and cultural products such as Squid Game and Parasite have fed the nation’s self-confidence.

But before taking too much pride in these, South Korea should be ashamed that its companies, with complicity and backing from its government, are providing massive funds not only to the Myanmar military but also to other reprehensible regimes in the region.

Cover: POSCO Building in the South Korean capital Seoul (credit: oimo via Wikimedia Commons, CC BY-SA 3.0)

This article was produced in collaboration with the Asia Democracy Chronicles, the media wing of the Asia Democracy Network (ADN), a regional organization of more than 300 civil society groups working to advance the democratization of governance in Asia.