Wednesday, 22 September 2021

Irresponsible? Telenor’s withdrawal from Myanmar draws complaints to OECD

by Harry Baldock, Total Telecom
Tuesday 27 July 21

Myanmar-based rights groups argue that Telenor Myanmar’s sale to M1 Group could lead to the deterioration of human rights

At the start of 2021, a coup d’état took place in Myanmar, overthrowing the civilian government and replacing it with a military junta. Since then, civil unrest has been rife as the population struggles against the illegal regime, resulting in almost 1,000 deaths across the country.  For the nation’s operators, this is a period of great uncertainty. The ruling junta has forced them to suppress various forms of communications, with General Min Aung Hlaing first ordering telcos to block popular social media sites like Facebook…

At the start of 2021, a coup d’état took place in Myanmar, overthrowing the civilian government and replacing it with a military junta. Since then, civil unrest has been rife as the population struggles against the illegal regime, resulting in almost 1,000 deaths across the country. 

For the nation’s operators, this is a period of great uncertainty. The ruling junta has forced them to suppress various forms of communications, with General Min Aung Hlaing first ordering telcos to block popular social media sites like Facebook, before then introducing a communications curfew, and in some cases cutting off wireless services entirely. 

For Telenor’s Myanmar business, the situation quickly became untenable. By the start of May, Telenor announced that it would be forced to write off its $782 million investment in the country.

“In Myanmar, we see an irregular, uncertain, and deeply concerning situation,” explained Telenor CEO Sigve Brekke, in a statement at the time. “Due to the worsening of economic and business environment outlook and a deteriorating security and human rights situation, we see limited prospects of improvement going forward. Based on this, we have fully impaired Telenor Myanmar.”

By the start of July, rumours were spreading that Telenor was planning its exit and, indeed, on the 8th of July the Group announced the sale of its Myanmar unit to Lebanese investment firm M1 Group for $105 million.

This news has not been well received, however, with onlookers fearing that M1 will be less vigilant in protecting customers’ data and resisting censorship. The conglomerate, founded by billionaire and ex-Lebanese prime minister Najib Mikati, has a history of operating businesses under authoritarian regimes, including in Yemen, Syria, Liberia, and Sudan.

Mikati is also, as of Monday, prime minister-designate, following a vote by members of parliament.

Now, local rights groups have submitted a complaint to the Organisation for Economic Co-operation and Development (OECD), claiming that Telenor have acted “irresponsibly” by disengaging from their Myanmar operations and have not acted in accordance with OECD and United Nation’s principles for business and human rights. 

“Telenor has failed to conduct appropriate risk-based due diligence and has failed to seek to prevent or mitigate adverse human rights impacts to its customers potentially arising from the sale of its Myanmar operations,” the groups argued. “Telenor [also] failed to engage with relevant

stakeholders in relation to the sale of Telenor Myanmar to M1 Group.”

Reportedly 474 civil society organisations have endorsed the complaint anonymously, fearing reprisals from the junta.

Exactly how M1 will run the business remains to be seen, with the authorities seemingly yet to make any demands of the new owners.

Meanwhile, Telenor continues to be an active player in other Asian markets. At the end of last month, Telenor Malaysia was merged with Axiata’s Celcom, creating a business with a total enterprise value estimated at around $15 billion. Subject to regulatory clearance, the merger is expected to be completed by the second quarter of 2022.

 

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