Since Myanmar’s army ordered telecoms operators to close their networks in an effort to finish protests in opposition to its February coup, Telenor’s enterprise there was in limbo.
As one of many few Western firms to wager on the South East Asian nation after it emerged from army dictatorship a decade in the past, the return to military rule led to a $783 million (roughly Rs. 5,760 crores) write-off this week for Norway’s Telenor.
The Norwegian state-controlled agency, one of many largest overseas buyers in Myanmar, should now determine whether or not to trip out the turmoil, or withdraw from a market which final yr contributed seven p.c of its earnings.
“We face many dilemmas,” Telenor Chief Government Sigve Brekke advised Reuters this week, highlighting the stark issues going through worldwide corporations beneath elevated scrutiny over their publicity in Myanmar, the place tons of have been killed in protests in opposition to the February 1 coup.
Whereas Telenor plans to remain for now, the longer term is unsure, Brekke stated in a video interview.
Though Telenor had received reward for supporting what on the time was a fledgling democracy, activist teams have lengthy voiced issues about enterprise ties to the army, which have intensified for the reason that military retook management of the nation.
Chris Sidoti, a United Nations professional on Myanmar, stated Telenor ought to keep away from funds similar to taxes or licence charges that would fund the army immediately or not directly, and that if it can’t be independently decided that Telenor is “doing extra good than hurt” in Myanmar, then it ought to withdraw.
Nonetheless, Espen Barth Eide, who was Norway’s overseas minister on the time Telenor gained a licence in Myanmar in 2013, advised Reuters that Telenor ought to keep and use its place as a well-established overseas agency to be a vocal critic of the army.
A spokeswoman for Norway’s Ministry of Commerce, Business and Fisheries, which represents the Norwegian authorities as a shareholder, stated on Thursday that “beneath the present circumstances Telenor faces a number of dilemmas in Myanmar”.
“From a company governance perspective the funding in Myanmar is a accountability of the corporate’s Board and Administration. Inside this framework the Ministry as a shareholder hold a very good dialogue with Telenor concerning the scenario,” the spokeswoman added in an emailed response to Reuters.
The Myanmar junta, which has stated it seized energy as a result of its repeated complaints of fraud in final yr’s election had been ignored by the election fee, has blamed protesters and the previous ruling get together for instigating violence.
And it stated on March 23 that it had no plans to elevate community restrictions. It has not commented on the curbs since and didn’t reply Reuters calls on Thursday.
Telenor is not any stranger to working beneath army rule in each Pakistan and Thailand, the place it challenged the Thai junta over what it stated was an order to dam social media entry.
At across the identical time, Telenor was signing up its first prospects in Myanmar.
Its then-CEO, Jon Fredrik Baksaas, advised Reuters that Telenor had thought “rather a lot” in regards to the threat that Myanmar’s experiment with democracy may not final.
“However we argued at the moment that, after we get in a western firm that delivers telecommunication in a rustic, we stand additionally with some accountability, and a little bit of a assure that issues are completed accurately,” Baksaas stated.
Its place had assist internationally on the time after Barack Obama turned the primary US President to go to Myanmar in 2012, the yr after a army junta was formally dissolved and a quasi-civilian authorities put in.
For its half, the Norwegian authorities, which owns a majority of Telenor, had lengthy supported democracy in Myanmar, internet hosting radio and TV stations reporting on it beneath army rule.
And in 1991, the Norwegian Nobel Committee gave the Nobel Peace Prize to Aung San Suu Kyi, who spent 15 years beneath home arrest in Myanmar earlier than main a civilian authorities which retained energy in final yr’s election.
Suu Kyi was detained after the coup and charged with offences that her legal professionals say are trumped up.
Whereas Norway was supportive of Telenor’s Myanmar enterprise, the federal government additionally warned of the dangers, Barth Eide, Norway’s overseas minister on the time, stated.
“We advised them that it is a difficult nation which had a harsh army dictatorship. Telenor was very a lot conscious of it … It isn’t like they had been novices,” he added.
Telenor was considered one of two overseas operators granted licences in 2013, alongside Qatar’s Ooredoo. The opposite operators in Myanmar are state-backed MPT and Mytel, which is part-owned by a military-linked firm.
About 95 p.c of Telenor’s 187 million prospects worldwide are in Asia and it has round 18 million prospects in Myanmar, serving a 3rd of its 54 million inhabitants.
‘No direct hyperlinks’
For Telenor, doing enterprise in Myanmar had its challenges, together with making an attempt to keep away from business ties to the army.
Former CEO Baksaas stated for the primary couple of weeks after it started operations in Myanmar, employees needed to sit on the workplace ground as a result of Telenor refused to pay bribes to customs officers for furnishings which it had imported.
He additionally stated they needed to navigate corruption dangers when buying land to construct cell towers.
Then there was coping with the army, whose financial pursuits vary from land to corporations concerned in mining and banking. The army has confronted allegations of human rights abuses together with persecuting minorities and violently suppressing protests going again many years. It has repeatedly denied such allegations.
Activist group Justice for Myanmar stated in a 2020 report that Telenor had proven “an alarming failure” in its human rights due diligence over a deal struck in 2015 to construct cell towers that concerned a army contractor.
One other report by the United Nations in 2019 stated Telenor was renting places of work in a constructing constructed on military-owned land.
The report stated corporations in Myanmar ought to finish all ties with the army because of human rights abuses.
A Telenor spokesperson stated in an e-mail on April 9 responding to Reuters questions that it had addressed the matter of the 2015 deal, with out elaborating, and that its selection of workplace was “the one viable possibility” given elements like security.
“Telenor Myanmar has been targeted on having minimal publicity to the army and haven’t any direct hyperlinks to military-controlled entities,” the spokesperson stated.
For the reason that coup, Telenor has reduce ties with three suppliers after discovering hyperlinks to the army, the spokesperson added.
On the day of the coup, the army ordered Telenor and different operators to close down networks. Telenor criticised the transfer however complied. Companies had been allowed to renew however there have been intermittent requests to shut since, and the cell web has been shut since March 15.
Ooredoo has additionally stated it “regretfully complied” with directives to limit cell and wi-fi broadband in Myanmar, which hit its first quarter earnings. It declined additional touch upon the outlook for its Myanmar enterprise.
Like different operators, Telenor paid license charges to the now military-controlled authorities in March, which critics argue might assist it finance repression of public protest.
Telenor stated within the emailed response to Reuters that it made the fee “beneath sturdy protest in opposition to latest developments”.
One in every of its main shareholders, Norway’s KLP, stated it had been in a dialogue with Telenor after the coup to make sure it was figuring out the human rights dangers.
“It’s a difficult scenario as a result of Telenor can’t select what it might and might’t do. They get their directives from the authorities,” stated Kiran Aziz, senior analyst for accountable investments at KLP. “It’s troublesome to evaluate how optimistic Telenor’s contribution could be on this context.”
Weighing up human rights is simply one of many dilemmas Telenor now faces, stated CEO Brekke, alongside safely serving its prospects and sustaining community entry for them.
“We work on that stability each single day,” he stated.
And though that stability, for now, is tilted to Telenor staying within the nation, it isn’t a given.
“We make a distinction like we’ve completed since we arrived. However with the scenario being this unpredictable, it’s inconceivable in some ways to invest in regards to the future and the way this can develop,” Brekke added.
© Thomson Reuters 2021