Myanmar: Japan’s Construction Aid Benefits Junta

(Tokyo) – Japan’s Yokogawa Bridge Corp. apparently transferred over US$1 million in 2022 to Myanmar Economic Corporation (MEC), which is owned by Myanmar’s abusive military, for a Japanese government development aid project, Human Rights Watch said today.

The Japanese government should suspend all ongoing non-humanitarian aid benefitting Myanmar’s junta, which has committed widespread and systematic crimes since the February 2021 military coup. The Japanese government should also ensure that Japanese companies, including Yokogawa Bridge Corp., end their business relationships with entities owned or controlled by Myanmar’s military.

“Through Yokogawa Bridge Corp.’s business dealings with MEC, the Japanese government has effectively helped fund junta atrocities,” said Teppei Kasai, Asia program officer at Human Rights Watch. “The Japanese government should ensure that it is no longer providing non-humanitarian development assistance to Myanmar’s junta.”

Human Rights Watch analyzed financial transactions that show that Yokogawa Bridge Corp. paid MEC about $1.3 million from July to November, 2022, for the Bago River Bridge Construction Project in Yangon. The funds were transferred in a series of payments from Yokogawa Bridge Corp. through Japan’s Mizuho Bank, Ltd. to MEC’s account in Myanmar’s Myanma Foreign Trade Bank.

The Bago River Bridge Construction Project, approved in 2016 as part of the Japanese government’s official development assistance to Myanmar, includes a ¥31 billion (US$240 million) loan from Japan’s aid agency, the Japan International Cooperation Agency (JICA). In March 2019, Yokogawa Bridge Corp. signed a contract to build the bridge.

In response to a Human Rights Watch letter about the issue, a Japanese Foreign Ministry official said the construction of the bridge resumed on April 1, 2022. The official added that the Japanese government is “not in a position to explain” Yokogawa Bridge Corp.’s payments to MEC as they are transactions “between private companies.”

In response to a letter from Human Rights Watch summarizing information about these financial transactions and seeking their comment, Yokogawa Bridge Corp. declined to comment on “individual cases.” Mizuho Bank also declined to comment.

The US, United Kingdom, European Union, and Canada have sanctioned MEC and Myanmar’s other military conglomerate, Myanmar Economic Holdings Limited, for their role in generating significant revenues that help fund the military. Since the coup, Myanmar’s military has been responsible for widespread and systematic human rights abuses, including extrajudicial killings, torture, and indiscriminate attacks on civilians that may amount to crimes against humanity and war crimes.

Junta security forces have killed over 2,700 people, including at least 277 children, and have arbitrarily arrested over 17,000, according to the Assistance Association for Political Prisoners.

The Bago River Bridge Construction Project’s ties to MEC came to light when a local media outlet, Myanmar Now, reported in March 2021 that a steel mill, the corporation owned in Hmawbi, Yangon, had been making substantial profits by supplying steel for two-thirds of the bridge’s construction. JICA subsequently confirmed to Human Rights Watch that Yokogawa Bridge Corp. finalized a contract with MEC and its affiliate in November 2019. In April 2021, Yokogawa Bridge Holdings Corp., which wholly owns Yokogawa Bridge Corp., stated that construction of the bridge had been halted due to the “situation on the ground,” and that it would “conduct business that respects human rights.”

As previously documented by Human Rights Watch, Yokogawa Bridge Corp. and MEC had ties prior to the bridge project. In March 2014, Yokogawa Bridge Corp. signed a Memorandum of Understanding with MEC, according to a 2015 earnings document. The document says that Yokogawa Bridge Corp. has aimed to “build a relationship through technical cooperation,” while “cultivating” MEC into an “amicable steel fabricator.”

The Myanmar military owns MEC, which generates vast revenue through businesses in sectors including manufacturing, mining, and telecommunications, according to a 2019 report by the United Nations-backed Fact-Finding Mission on Myanmar. The fact-finding mission concluded that “any foreign business activity” involving Myanmar’s military and its conglomerates, including MEC pose, “a high risk of contributing to or being linked to, violations of human rights law and international humanitarian law.” It added that “at a minimum, these foreign companies are contributing to supporting the Tatmadaw’s [military’s] financial capacity.”

In September 2022, the Office of the United Nations High Commissioner for Human Rights issued a follow-up report to the 2019 Fact-Finding Mission report, saying that not enough had been done to cut off the junta’s access to revenue, and urging the international community to “step up efforts to support the people of Myanmar and to ensure the military’s financial isolation in a coordinated fashion.”

The UN human rights office also said that governments should “ensure their humanitarian and development assistance programs do not benefit the SAC [State Administration Council junta] or military-owned companies,” citing the Bago River Bridge Construction project, and recommended that “business enterprises active in Myanmar or trading with or investing in businesses in Myanmar, including supply chain operations, should undertake due diligence to ensure they do not enter into or remain in a business relationship of any kind with the Tatmadaw, or any enterprise owned or controlled by them (including subsidiaries) or their individual members.”

On May 12, 2021, the UN Working Group on human rights and transnational corporations and other business enterprises stated that: “Businesses must uphold their human rights responsibilities and put pressure on the military junta to halt grave human rights violations.” Specifically, the Working Group urged companies to “act in line with the Guiding Principles on Business and Human Rights to avoid contributing to human rights violations, or becoming complicit in crimes if they continue to operate in Myanmar.”

The UN Guiding Principles on Business and Human Rights states that companies should “avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur,” and “seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.”

Japan, which has not coordinated with allied governments in taking concrete action to press the Myanmar military to end its abuses, should impose targeted sanctions on junta leaders and military-owned entities, and ensure compliance by Japanese companies such as Yokogawa Bridge Corp..

“The Japanese government should stop providing funds to the Myanmar military and instead act on behalf of the people of Myanmar,” Kasai said. “Japan should not be enablers of the junta’s atrocity crimes.”

  1. Home
  2. News
  3. Myanmar: Japan’s Construction Aid Benefits Junta