Exposed: Adani’s cosy ties with the Myanmar military
The TLDR: A new report shows that—contrary to its vehement denials—the Adani Group has a close relationship with the ruling junta. The spotlight is on a deal to build a port with a corporation—which directly finances the activities of the military. Why this matters: there is increasing pressure in the West to punish Adani and other companies that profit from dictators.
Start from the beginning, please!
Ok, let’s start with a recap, and a brief look at what’s happening right now in Myanmar (our explainer on the coup has more details).
- On February 1, the military ousted the civilian government of Suu Kyi and seized power. There have been nationwide protests ever since—and the military has cracked down with a vengeance.
- The death toll has crossed 520—and the victims shot and killed by the military are as young as seven.
- Ethnic militias have now entered the fray to take on security forces—raising the prospect of a prolonged civil war.
- And the protests continue undaunted. Coming up next: A garbage strike intended to cripple all normal life.
- The bloody tactics of the junta have drawn strong condemnation from all Western countries. But the US has been the most aggressive, cutting all direct trade ties.
- Asian countries—including India—have stayed mostly silent except for Indonesia, Malaysia, and Singapore.
Ok, tell me about Adani and this port deal
Meet Adani Ports: Adani Ports and Special Economic Zone Ltd is a subsidiary of the Adani Group. As its name suggests, the company specialises in building ports. That’s not just in India. It also has key projects in Australia and Myanmar. All of which is part of Adani’s global #PortsOfProsperity initiative.
Meet Ahlone International Port Terminal 2: In May 2019, Adani Ports sealed a deal to invest $290 million to build and run a massive container terminal along the Yangon River. And it got a 50-year lease on the land to do so. Dubbed as its ‘first voyage to South East Asia’, the port represented its second international foray—the first being the Abbot Point terminal in Queensland, Australia. As part of the deal, Adani also agreed to build a maritime university, waterways, and other transport facilities to develop the region. So yeah, this was literally a big deal.
Meet the MEC: Adani Ports struck this deal with the Myanmar Economic Corporation—which is fully owned and controlled by the junta. It is one of the biggest conglomerates in the country—all of which are used to finance the military’s operations. As a 2019 UN report noted, the MEC is led by current and former senior level military officials—including the Commander-in-Chief Min Aung Hlaing—who now is leader of the ruling junta.
Why this deal matters: is straight-forward:
“[Military-owned conglomerates like] MEC are able to generate enormous revenues, insulating themselves from effective civilian oversight. In turn they benefit from unrestricted profits and influence allowing them to continue funding their serious human rights abuses with impunity.”
Back in 2019, the UN recommended the following:
“[N]o business enterprise active in Myanmar or trading with or investing in businesses in Myanmar should enter into an economic or financial relationship with the security forces of Myanmar, in particular the Tatmadaw, or any enterprise owned or controlled by them or their individual members, until and unless they are re-structured and transformed as recommended by the Mission.”
This deal was kept secret?
Nope, everyone knew about the deal. And the UN report called out Adani for doing business with the military—and flagged a number of other Indian companies.
For example, Infosys, the Indian tech giant provides software services to Myanmar’s Myawaddy Bank—owned by an MEC-like conglomerate run by General Min Aung Hlaing. And it entered this relationship back in 2018—months after the military launched its brutal offensive against the Rohingyas. Also in bed with the military: Bharat Dynamics, Bharat Electronics, and Hindustan Aeronautics Limited (HAL) who have sold arms to the military.
So why is it a big deal now?
Because right after the coup, the Adani Group said that the port deal was ‘clean’: "We categorically deny having engaged with military leadership while receiving this approval or thereafter."
But now a group of Australian and Myanmar NGOs have dug up evidence indicating otherwise. Let’s start with the visuals. For instance, here is a video clip from July 2019. It shows Adani Ports chief executive Karan Adani hanging out with the notorious General Hlaing—in India at an Adani port in Mundra, Gujarat:
Also, the money: Apart from the $290 million deal with the MEC, the report found that Adani Ports paid a direct $52 million to the MEC for using and leasing the land on which the port is being built.
Embarrassing point to note: Hliang led military operations targeting ethnic minorities that included rape, arson and murder. In 2018, the UN human rights council called for his prosecution for genocide. In 2019—at the time of his Mundra visit—Hlaing was barred from visiting the United States because of his record.
What do the Adanis say?
The Mundra meet-and-greet: The company claims that the general was on a trip hosted by the Indian government—and he visited the Adani port among other locations.
The MEC connection: Here the group has taken two different tacks. It first claimed MEC was just like any other private company:
“In its May 2019 statement, Adani Australia denied any problem with this commercial deal, stating that although there are arms embargoes and travel restrictions on key members of the military ‘this does not preclude investment in the nation or business dealings with corporations such as MEC.’”
The latest defence: in response to the NGO report is as follows:
“A spokeswoman for Adani Ports said the company was ‘watching the situation in Myanmar carefully and will engage with the relevant authorities and stakeholders to seek their advice on the way forward’. She said the Yangon International Terminal project was ‘fully owned and developed by’ the company. ‘It is an independent container terminal with no joint venture partners.’”
Does the outrage make any difference?
It might if human rights groups successfully pressure investors to lean on or break with the Adanis. And that’s what is happening in Australia and elsewhere. Here are some points of pressure:
One: The US hit the MEC with direct sanctions recently—calling it a "a vital financial lifeline for the military junta.” And that pretty much destroys the Adani Group’s claim that it is just another corporation. We can expect the US move to be used in the West to ratchet up pressure on the Yangon port deal.
Two: The Adani Group has extensive investments in Australia—where its presence is a lightning rod for controversy, one reason being a controversial coal mine. The latest report is fuel to fire at a time when the Australian government has bluntly condemned the military violence.
And there is growing pressure on Western governments to “do something” to stop it. The first in line will be the Australian Future Fund which has a $3.2 million investment in Adani Ports. If Canberra imposes sanctions on Myanmar, expect Australian investors to pull out of anything associated with the MEC.
Three: Adani Ports is currently #14 on the Dow Jones Sustainability Index—used by ‘woke’ investors to put their money in ‘good’ companies. But NGOs are already pressuring for a review based on its links to the Myanmar military. Losing that feather in its cap will be a big blow.
The bottomline: As a UN human rights official puts it:
“The question for Australia and Australians is whether we want to be hosting a company that is contributing to the enrichment of the Myanmar military. The question for investors in Adani is whether they want to fund the operations of the Myanmar military, because that is what they are doing indirectly by investing in Adani. This is a question also for sovereign wealth funds and pension funds that should have a highly ethical basis for their investment decisions.”
That’s a good question for the rest of us, not just Australians or investors.
Reading list
Read the original NGO report on the Adani-Myanmar connection, or read an overview over at ABC Australia. Hindu Business Line and The Guardian report on the Yangon port deal. You can also read the UN report—which flags Adani and other Indian companies—on the role of the MEC in funding the military. BBC News has a good profile of Hlaing. The Telegraph reports on Manipur which has withdrawn an official notice asking that Myanmar refugees be “politely” sent back.