The risk of financing luxury abuses by luxury jewelers in Myanmar: report | Military news

An anti-corruption group has warned of luxury jewelery about its potential role in financing human rights violations in Myanmar, saying the country’s jewelery profit has emerged as a “significant source” of revenue for its military authorities.

In one report Released last week, Global Witness said Myanmar’s military, in a coup that took power on February 1, now controls the country’s multi-million dollar gem industry.

He said the sector, which is indicated by official data, including the trade in rubies, sapphires and other gems, has averaged between $ 346 million and $ 415 million between 2014 and 2017. But given the illegal trade in these gems, the report says the industry could average $ 1.73bn and $ 2.07bn a year in four years.

Given the control of the sector by the military, as well international sanctions In the Myanmar military conglomerate associated with the gem trade, Global Witness said “all companies need to urgently review their supply chains to ensure that they do not finance Myanmar conflicts, corruption or state oppression.”

The group’s report, based on more than 150 interviews with public officials, community members and industry representatives, said all Myanmar gem mining is now illegal, as all licenses issued by the country’s civilian government expired in 2020, a year earlier. coup.

The military has not yet issued a public license, but since it took power, informal mining has “exploded” in the country, Global Witness said, paying dozens of workers who approached the Mogok mines in central Mandalay. the military.

This informal mining is taking place in the background of Myanmar’s “extreme instability,” including in Mogok, the report says, accusing the military of blaming it. crimes against humanityincluding the killing of hundreds of protesters against the coup, as well as attacks on civilians in the country’s border areas.

However, jewelers, auction houses and mass market traders continue to buy and market Myanmar rubies and other gemstones, he said.

‘Financing atrocities’

Processed in Thailand, Myanmar’s gems are sold to international jewelers and “and ultimately to customers who have no way of knowing whether they are financing the atrocities,” he said.

The only one of the 20 dealerships that Global Witness spoke to in Thailand, Fai Deek, was able to identify a specific mine where one of its rubble was created.

This particular mine, Shwe Pyi Aye, has been in control of Myanmar Economic Holdings Limited (MEHL) since 1995, one of the two main ones. military-controlled conglomerates Punished by the United States, the United Kingdom, the European Union and Canada.

A representative of the Fai Dee company told Global Witness that there is “no way” to say exactly when the ruby ​​came out, according to messages seen by Al Jazeera. The representative told Global Witness researcher, who appeared as a customer, to sell his rubies to major American and British brands such as Harry Winston, Graff, Sotheby’s and Christie’s.

The open pit of a Ruby mine is seen in Mogkok on February 27, 2014 [File: Soe Zeya Tun/ Reuters]

Asked for an answer, Fai Dee’s lawyer told Al Jazeera that the company had not bought the Shwe Pyi Aye ruby ​​at the time MEHL controlled the mine and that much of its collection dates back to before 1995.

The lawyer also said Fai Dee has been working for 100 years and has acquired some gems of Myanmar origin at the time, but “Fai Dee has not bought from any mine or government company in Myanmar” since 2008, when it was imposed by the US. penalties for military conglomerates associated with the gem trade.

These sanctions were lifted in 2016 after a transition to civilian power, but were reinstated this year after a military coup.

Fai Dee’s lawyer said the company “has not violated any sanctions related to Myanmar, nor has it contributed in any way to human rights violations in that country.”

Other Thai retailers, despite publicly claiming to stop supplying rubles in Myanmar, continue to do so, according to Global Witness. One company told a Global Witness researcher who appeared as a client that they could still do so from July this year.

Due diligence

Global Witness also said it has contacted 30 international jewelers, auction houses and mass marketers who sell gems located in the US, Europe and Asia.

“We noticed that most of them did not put in place the necessary due diligence to ensure that their supply chains were not over-funded. As a result, these companies may have been funding the Myanmar Army, one of the world’s most savage regimes, to help maintain the abusive power over Myanmar.”

Peter Kucci, a U.S. criminal expert who has had experience working in Myanmar since 2007 and has direct experience assessing Mogok’s gemstone industry, told Al Jazeera that Global Witness’s findings were in line with his.

Noticing that Myanmarri was imposed in 2008, removed in 2016 and re-imposed in February after the coup, it was subject to a number of punitive regimes, Kucik said in terms of criminal liability, companies said they should only be concerned with gems received since February. coup.

But he said there is no way to determine when a ruby ​​came out in 2017 or 2021.

A man receives rubies at a rubble mine in Mogok on February 27, 2014 [File: Soe Zeya Tun/ Reuters]

“It simply came to our notice then. Due to the difficulty or inability to identify legal sources, the new default solution seems to be the same as the old one: let the supply of Myanmar ruby ​​be tried to cut the board’s revenue, ”he said.

Kucik said the sanctions policy is a “strict responsibility”, meaning that if a US company ends up with a Myanmar ruble that violates the sanctions, it would be a violation even if the company does not know its origin.

“If I go to Thailand and buy a suitcase full of rubbish and the seller says that 100 percent didn’t come from Myanmar, but yes, I still have a problem, but it would look at the mechanism for enforcing that. Use that. it’s going to be targeted if there is a deliberate violation, ”he said.

Global Witness said only three companies, Tiffany & Co, Signet Jewelers and Boodles, have publicly stated that they have suddenly stopped acquiring gems from Myanmar. Cartier and Gubelin told the group the same thing, and Harry Winston said in a public appearance on December 9 that he would stop buying gems from Myanmar.

“In its ongoing commitment to responsible and ethical enforcement, the Harry Winston House has no gems from suppliers of Burmese origin, regardless of import dates,” he said.

Al Jazeera contacted Sotheby’s and Christie’s for comments. But there was no response at the time of publication.