Burma junta's exports lose sparkle

FE Team | Published: October 28, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

Amy Kazmin, FT Syndication Service
BANGKOK: For centuries, Burma's gem mines have supplied some of the world's best rubies, jade and other gemstones coveted by couture jewellers and their wealthy customers. In recent years, these stones have also been a key source of foreign exchange for a cash-starved junta, which last year earned about $300m (â‚¬209m, Â£146m) from state gem auctions.
But after watching television images of Burmese soldiers attacking civilians and monks, executives at Cartier, the French luxury brand, decided it was time to take a stand. Within days, they were telling their cut-stone suppliers that they would not buy any more gems mined in Burma and would conduct random checks to ensure that the stones they did buy were not coming from there.
"While it was clear before that Burma was not a democratic regime, what we were witnessing was organised state violence. This was, in a way, an emotional response for us," says Pamela Caillens, Cartier's corporate responsibility director.
Cartier's move reflects the strong response by big western jewellers to last month's crackdown in Burma after many of them had long overlooked human-rights concerns.
Burmese rubies, prized for their rich red, are said to comprise 90 per cent of the world's supply. Burma also provides up to 98 per cent of the world's jade, giving the country what one jeweller calls a "stranglehold" on these gem sectors.
Bulgari, the Italian jeweller, has said it, too, will boycott Burmese gems. Jewelers of America, which represents large US retail chains such as Kay Jewelers, has called on Congress to close a loophole in a US ban on Burmese imports that has allowed Burmese gemstones to enter the market through third countries, where they are normally cut and polished. Tiffany has observed a ban on buying Burmese gems since 2002.
"We want to give our voices to those who say, 'something must change'," says Peggy Jo Donahue of Jewelers of America . "We don't want to buy products that might support a regime that hasn't yet engaged in democratic reforms."
Burma's biggest western investors, Chevron and Total, have rejected calls to divest their stakes in the Yadana gas field and associated pipeline, saying a sellout would only transfer their assets to other, less-scrupulous investors - and could give the regime a windfall in capital gains tax revenues.
However, other western businesses are re-evaluating their Burma links, prompted by concerns about the risk to their reputations of being seen to be aiding the military regime. In addition, the EU and the US are both considering fresh sanctions that could force many companies to cut their ties.
In the wake of the bloody crackdown on protesters, Rolls-Royce decided to stop servicing aircraft engines for the state carrier Myanmar Airways and leasing aircraft for another Burmese airline.
Rolls-Royce said it would have "no further involvement" in Burma. Myanmar Airways suspended some of its flights as a result, citing loss of insurance coverage.
Even before the recent crackdown, many imageÂ sensitive UK clothing companies had stopped buying apparel from Burma after being targeted by consumer boycotts. In 2002, Triumph International, the lingerie business, closed a Burmese bra factory after a high-profile poster campaign called on the company to "support breasts, not dictators".
Besides gemstones and despite pressure from environmentalists, Burma has also remained an important source of teak, a hardwood valued by yacht and furniture makers.
Timbmet, the UK's largest importer and distributor of hardwoods, says it decided to wind down its sourcing from Burma several years ago after "we judged that trading with Burma was not responsible", says Mike Packer, the corporate responsibility director.