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Myanmar’s warring military and rebels find common ground in corrupt jade trade

  • A new investigation from watchdog group Global Witness reports that jade mining is a major source of income for both the Myanmar military and armed ethnic groups, fueling conflict in the country.
  • While conflicts between the military and armed groups escalate elsewhere in Myanmar, Global Witness reports that major armed groups and the military work side by side in jade mines in Hpakant in the ethnic-minority state of Kachin.
  • Armed groups and individual officers have earned fortunes from the jade trade, while Kachin state’s environment, and the communities who depend on it, have paid the price.

Jade mining is fueling conflict in Myanmar, channeling money into the coffers of the military and ethnic armed groups, according watchdog group Global Witness.

The industry buoys the weapons trade and enriches military officials, including the son of junta leader Min Aung Hlaing, the group says.

“In Hpakant our investigation revealed that warring parties were collaborating to profit even as conflict between them escalated elsewhere in northern Myanmar,” says a new report by Global Witness, which alleges that major armed groups worked side by side with the military in the jade mines.

The report also accuses Aung Pyae Son, the son of the general who seized power in a coup in February, of directly benefiting from corruption in the jade trade. Global Witness says he received a cut of payment for the import of dynamite and “also profited from arrangements to mine illegally in Hpakant” after the civilian government suspended new licenses.

As the generals enrich themselves and war continues to rage, the environment and the people who depend on it pay the ultimate price.

“The mountains are becoming flat valleys and the valleys are becoming mountains. In Kachin history, there were many historic mountains, but all are gone now,” said a researcher based in Myitkyina, the capital of Kachin state. The researcher, who asked not to be named, said some residents don’t even recognize the areas where they grew up.

An ethnic Rakhine jade miner, known as a yemase, agreed.

“All the trees are already destroyed. The rivers are filled up with land dug from the mountains,” he said. When he arrived in Hpakant some 10 years ago, the miners “used handheld drills to dig.” “There are much more big machines now and a lot of bulldozers,” he said, explaining this has escalated the environmental damage.

Jade mining, Myanmar
An active jade mine in Hpakant township in Kachin state, northern Myanmar. Image by Arezarni via Creative Commons (CC BY 3.0).

While Myanmar’s jade industry is estimated to be worth more than $30 billion, few local people reap the benefits, causing major grievances over issues of land and resource management. Some itinerant miners do strike it rich, but most risk their lives toiling under grueling condition for little pay. Deadly landslides are frequent, with three miners killed just this week.

Keel Dietz, policy adviser for Global Witness, said even before the coup there was “no sort of post-mining rehabilitation.”

“Companies are supposed to put together mine closure plans, but it’s just a check the box thing, they’re not expected to actually do anything. They usually just abandon them and this causes big environmental problems, huge open pits that fill up with water and waste chemicals,” he said.

In 2020, a landslide killed at least 174 miners. “Villages are perched on the precipice right on the edge of a mining site. There’s going to be more landslides in the future,” Dietz said.

Floods and landslides already plague villages in Hpakant. A flash flood in 2018 killed 11 people and destroyed 70 homes, while the U.N.’s humanitarian office estimated nearly 7,750 people were displaced by flooding in July 2020.

When the National League for Democracy won election in 2015, it struggled to assert control over the jade industry, which had been controlled by the military for decades. “Myanmar’s multi-billion-dollar jade industry is a paradigmatic example” of the country’s “partial reform” which was always “resisted” by the military, Global Witness said.

Matthew Baird, an environmental lawyer with years of experience in Myanmar, said that when the NLD came to power, even “talking about jade and gem mining was very risky.”  He said the civilian government had made some progress, despite the “big challenge.” “We know a lot more about the industry, its corruption and its hazards that was not possible under the previous administration,” Baird said.

But with the military back in full control, Global Witness said it expects the situation to worsen, adding the coup has “crushed any hopes that these policies and regulations will be finalised, let alone improved.”

This camp on the Kachin Independence Army-controlled road between Laiza and Mai Ja Yang was originally meant to be a temporary refuge for Kachin people displaced when fighting between the KIA and Tatmadaw resumed in 2011. Nearly ten years later, it still houses around 5,000 people – one of many camps in KIO territory that have become semi-permanent as fighting has dragged on. Image by Keel Dietz / Global Witness.

The conflict economy

In 2019 and 2020, the Myanmar military, known as the Tatmadaw, and the Arakan Army fought a brutal war in Rakhine state. As of June 2021, the U.N. estimated that more than 81,000 people, mostly ethnic Rakhine, remain displaced as a result of the conflict. Despite this, both armed groups were operating in the mines in Hpakant, and likely cooperating, as was the Kachin Independence Army, which was largely avoiding clashes at the time.

The Rakhine yemase confirmed to Mongabay that the AA, which is hugely popular with ethnic Rakhine people, is active in the mines and collects money from workers, but denied this was a form of taxation. “The yemase people from Rakhine voluntarily share profit with the AA,” he said. He also said the AA settles disputes between Rakhine people and other miners, adding that the AA will sometimes impose fines on troublemakers of up to 300,000 kyat ($225).

Global Witness reported that a “well-placed Rakhine businessperson” claimed that jade is the “primary income source” for the AA, and said the industry likely fueled the group’s “rapid expansion and recruitment.” It also found evidence of at least one company run directly by the AA active in the mines.

The Kachin researcher in Myitkyina said that the military, AA and KIA are all taking taxes from people working in the mines, with each group’s business interests blurring into the others’. “Hpakant is brown, not black or white,” he said. He added that sometimes when one group needs to transport jade stones, it goes through the other group’s territory, requiring cooperation and payment.

A fourth armed group, the United Wa State Army, often pays the KIA in weapons, according to Global Witness, which also says a KIA intelligence official reported these weapons are then sold on to the AA for a profit.

Since the coup, however, this dynamic has been upended. The AA is now observing a temporary cease-fire with the Tatmadaw in exchange for political concessions, while the KIA has joined the pro-democracy movement, launching attacks on the junta. Fighting has even reached Hpakant, ending the informal agreement to avoid conflict in the mines. However, Global Witness said that “such cooperation could re-emerge in the future in a similar form.”

A trader shows a jade stone he estimates to be worth at least $40,000-$50,000 on the black market, in a hotel room in Yin Jiang, China, June 17, 2015. According to the Myanmar jade traders of the black market, almost all the raw jade stones traded in Yin Jiang are smuggled from Myanmar’s Kachin state. Image by Hosana Chay/NRGI Myanmar via Flickr (CC BY-SA 2.0).

Widespread corruption

The jade mines have long been a major source of income for the military and its generals. In addition to Min Aung Hlaing’s son, other high-ranking military officers and former officials benefit either through their own jade mining companies or by taking bribes to allow other companies to mine illegally.

Two military-controlled conglomerates “collectively control more mining licences than any other entity,” according to Global Witness. Meanwhile, the Myanmar Gems Enterprise is tasked with regulating the jade industry, while also maintaining its own commercial interests in jade, a clear conflict of interest, especially given that MGE includes former military officials.

“Now there are serious concerns that the military will simply re-open the licensing process, reaping a windfall in bribes and doling out access to the best jade mining plots to allies in exchange for loyalty and political support,” Global Witness said.

While some Western countries have imposed sanctions on MGE and the conglomerates, this may fail to significantly dent the junta’s profits, as “the overwhelming majority of jade is in fact smuggled out of Myanmar directly into China without ever entering the formal system,” according to Global Witness.

Baird said the Tatmadaw should not be recognized as a legitimate governing body, and called for it to be designated as a “transnational criminal enterprise” under the U.N. Convention against Transnational Organized Crime.

“The current illegal exploitation of gems and natural resources, and the complicity of the Tatmadaw and the commercial enterprises makes them liable for these criminal acts,” Baird said, also appealing to China and Singapore to freeze any assets linked to military companies.

The Kachin researcher said military postings in the area are coveted, as they allow officials to build up connections in the industry. “When they were there, they built a good relationship with the local officials and they knew the local context,” he said, adding they later leverage these relationships for financial benefits.

Dietz said that with the Tatmadaw back in power, “there is little chance for serious reform.” “Why would the Tatmadaw reform an industry that it benefits from so much?” he said.

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