Under Myanmar’s military regimes, natural gas was the most lucrative industry in Myanmar, accounting for 70 percent of all foreign exchange reserves with sales totaling around US$3 billion annually. Had these billions of dollars gone into the state budget, they would have accounted for 57 percent of the total budget revenue. Instead, according to the International Monetary Fund and others, they contributed less than one percent of total budget revenue. Much of this revenue reportedly never entered Myanmar and the account balances, disposition, ownership and control, and even the location of the regime’s accounts were never publicly disclosed.
Instead of benefiting the people of Myanmar, gas sales fuelled corruption, conflict, and revenue misappropriation. A lack of transparency and accountability facilitated this misappropriation.
Where did this revenue go? Who benefited? How much revenue actually accrued to the state from the gas sales? In 2008, the International Monetary Fund acknowledged that less than one percent of Burma's natural gas revenues ever entered the country, and instead ended up in foreign banks. Until the reform process began in Myanmar, both the gas companies and the military junta failed to disclose details of this critical information.
In this context, a global movement emerged calling on companies that operate in Myanmar to unilaterally disclose their payments to their Myanmar partners.
A Call for Revenue Transparency: The Yadana Project
The Yadana natural gas project — operated by the French oil company Total, in partnership with Chevron, the Petroleum Authority of Thailand Exploration and Production (PTTEP), and the Myanmar Oil and Gas Enterprise (MOGE) — is one of the two largest official sources of revenue for the military junta and has generated over US $7 billion in sales since it began operations over a decade ago.
On April 27, 2010, a global "Call for Total, Chevron, and PTTEP to Practice Revenue Transparency in Burma (Myanmar)" was issued for the Yadana companies to promote transparency and accountability in the extractive sector in Myanmar by voluntarily publishing over 18 years of payments to the military regime. The statement was endorsed by EarthRights International and over 160 non-governmental organizations, labor unions, investment firms, scholars, and policy leaders, including the former Prime Minister of Norway and the former President of Ireland. These prominent groups and individuals called on the Yadana companies to assist the people of Myanmar in holding their government accountable for the revenues that the government receives on their behalf.
In July 2014, Myanmar was accepted as a candidate member of the leading voluntary transparency initiative, the Extractive Industry Transparency Initiative (EITI). Under this initiative, Myanmar will have to submit an annual report disclosing the value of the country’s natural resources from production to the government’s accounts. Civil society has been involved in the scoping and preparations for the drafting of this report, as well as in the multi-stakeholder group responsible for overseeing the implementation of EITI in Myanmar. It remains to be seen how effective the EITI candidacy process will be in encouraging revenue transparency in Myanmar’s extractive industries, however, with new oil and gas blocks awarded to 47 international and local companies in 2013 and 2014, transparency remains crucial in this industry.