Anti-corruption group has alerted luxury jewelers to their possible role in funding human rights violations in Myanmar, saying the country’s lucrative gemstone industry has become an “important source” of income for its military rulers .
In one report published last week, Global Witness said the Myanmar military, which seized power in a February 1 coup, now controls the country’s multi-million gemstone industry of dollars.
According to the report, official data indicates that the sector, which includes the trade in rubies, sapphires and other precious stones, was worth an average of $ 346 million to $ 415 million per year between 2014 and 2017. But in Taking into account the illicit trade in these gemstones, the report says the industry could have been worth an average of between $ 1.73 and $ 2.07 billion per year over the four years.
Given the military control of the sector, as well as international sanctions against Burmese military conglomerates linked to the gemstone trade, Global Witness said that “all companies must urgently review their supply chains, to ensure that ‘they do not fund conflict, corruption or state oppression in Burma ”.
The group’s report, based on more than 150 interviews with officials, community members and industry representatives, said that any mining of gemstones in Myanmar is currently illegal, as all licenses issued by the government the country’s overthrown civilian had expired in 2020, a year before the coup.
The military has yet to publicly issue a permit, but since taking power, informal mining has “exploded” in the country, Global Witness said, with tens of thousands of workers flocking to the mines. Mogok in the central Mandalay region, paying bribes. to the military.
This informal mining is taking place amid a context of “extreme instability” in Myanmar, including in Mogok, according to the report, the military being accused of committing crimes against humanity, including killing hundreds of anti-human rights protesters. – coup d’état and by launching attacks against civilians in the border areas of the country.
Yet jewelers, auction houses and mass market retailers continue to buy and market Myanmar rubies and other gemstones, he said.
Processed in Thailand, Myanmar gems are sold to international jewelers and “and ultimately to customers who have no way of knowing if they are funding atrocities,” he said.
Only one of the 20 dealers Global Witness spoke to in Thailand, Fai Dee, was able to identify a specific mine where one of its rubies came from.
This particular mine, Shwe Pyi Aye, has been controlled since 1995 by Myanmar Economic Holdings Limited (MEHL), one of the two main conglomerates under military control sanctioned by the United States, United Kingdom, European Union and Canada.
A representative for Fai Dee’s company told Global Witness that there was “no way” to tell exactly when the ruby was mined, according to messages seen by Al Jazeera. The representative told the Global Witness investigator, who was posing as a client, that he sold his rubies to major US and UK brands like Harry Winston, Graff, Sotheby’s and Christie’s.
When asked for a response, a lawyer for Fai Dee told Al Jazeera that the company did not acquire the Shwe Pyi Aye ruby at a time when MEHL controlled this mine and much of its collection was prior to 1995.
The attorney also said that Fai Dee had been operating for 100 years and had acquired a number of gemstones from Myanmar, but that “Fai Dee had not purchased any mines or government enterprises in Myanmar” since 2008, when the states United have imposed sanctions on military conglomerates linked to the gemstone trade.
These sanctions were lifted in 2016 following a transition to civilian rule, but were reimposed this year following the military coup.
Fai Dee’s attorney said the company “has not violated any sanctions regarding Myanmar, nor contributed in any way to human rights violations in that country.”
Other Thai dealers, while publicly claiming that they have stopped sourcing rubies from Myanmar, continue to do so, according to Global Witness. One company told a Global Witness investigator posing as a client that it could still do so from July of this year.
Global Witness also said it has also contacted 30 international jewelers, auction houses and mass retailers who sell gemstones, based in the United States, Europe and Asia.
“We found that most of them did not have adequate due diligence in place to ensure their supply chains were not funding abuse. As a result, these companies may have funded the Myanmar military, one of the most brutal regimes in the world, helping to maintain its abusive power over the people of Myanmar.
Peter Kucik, a US sanctions expert with experience working on Myanmar since 2007 and direct experience in assessing the gemstone sector in Mogok, told Al Jazeera that Global Witness’s findings were in line with his.
Noting that Myanmar has been subject to various sanctions regimes, which were imposed in 2008, lifted in 2016, and then re-imposed in February after the coup, Kucik said in terms of responsibility for the sanctions, the companies no ‘would only have to worry about precious stones from the month of February. cut.
But he said there is no way to determine whether a ruby was mined in 2017 or 2021.
“There is literally no way to do it. Due to the difficulty or inability to identify lawful sources, the new default solution appears to be the same as the old one – to stop sourcing rubies from Myanmar in an attempt to cut off sources of income from the junta, ”he declared.
Kucik said the sanctions policies are of “strict liability,” meaning that if an American company ended up with a Myanmar ruby violating the sanctions, it would still be a violation, even if the company did not know its origin.
“If I go to Thailand and buy a briefcase full of rubies and the seller says that this 100% is not from Myanmar, but they did, I still have a problem, but it would be weighed in. terms of enforcement mechanism. used. It ranges from a letter of warning to referral for criminal investigation in the event of an intentional violation, ”he said.
Global Witness said only three companies, Tiffany & Co, Signet Jewelers and Boodles, have publicly stated that they have stopped sourcing gemstones from Myanmar since the coup. Cartier and Gubelin told the group the same, while Harry Winston released a public statement on December 9 saying he would also stop sourcing gemstones from Myanmar.
“In its continued commitment to responsible and ethical sourcing, Harry Winston will no longer source precious stones from its suppliers of Burmese origin, regardless of their import dates,” he said. he declares.
Al Jazeera has contacted Sotheby’s and Christie’s for comment. But no response has been received at the time of publication.