Myanmar

Status: Suspended due to political instability
Joined: 2 July 2014
Latest validation: 2019
Latest data from: 2018

Overview and role of the EITI

Myanmar has been temporarily suspended from the EITI following a coup d’état in February 2021.

Myanmar is a producer of oil and gas, minerals and gems. Its extractive sector accounted for 4.8% of the country’s GDP, 5.2% of state revenue and 35% of total exports in 2017-2018. Myanmar produces around 90% of the world’s supply of rubies and is also the world’s largest single source of jade. The country is also a large exporter of copper.

Myanmar's 12-point economic policy accentuates the strategic role of EITI in the reform process, specifically in natural resource governance. The EITI has previously been a platform for vibrant discussions on revenue sharing, the management of state-owned enterprises and the need for a unified mineral cadastre system. The EITI has also informed public awareness and debate on lost revenues from the gems and jade sector.

Document

Myanmar 2017-2018 EITI Report

1 Mar 2020

EITI country report

Myanmar 2018 EITI Summary Data Report

1 Dec 2020

Economic contribution of the extractive industries

5.16%: to government revenues
35.49%: to exports
4.78%: to GDP
.26%: to employment

News

Innovations and policy reforms

Myanmar published its first commodity trading report covering oil and gas sales during 2017-2018, which amounted to approximately USD 900 million or 60% of total revenue from the extractive sector.
In December 2020, Myanmar’s President issued a government regulation requiring the disclosure of oil, gas and mining contracts that are entered into or amended by 1 January 2021.
In response to recommendations in EITI Reports and calls for more transparency around opaque accounts held by extractive state-owned enterprises (SOEs), the government issued a directive ordering that all revenues from SOEs be transferred to the state budget from 2019-2020 onwards.
A study commissioned by Myanmar EITI in 2016 estimated that 60-80% of gemstones produced in the country are not declared and therefore bypass the formal system.
Subnational EITI chapters were previously established in Mandalay, Magway, Rakhine and Shan to improve local oversight of extractive sector management.
EITI reporting has shed light on potential losses of mineral revenue due to weak governance. The reports provided recommendations on reforming state-owned enterprises and on establishing an Extractive Industry Revenue Unit to improve the certification, traceability and valuation of gemstones.

Extractive sector data

Extractive sector management

Tax and legal framework

Myanmar’s extractive sector is mainly governed by the Mines Law, Gemstone Law and Petroleum Law, but contracts typically govern extractive projects. A number of other laws and regulations also govern aspects of the sector, including income tax, auditing, environmental management and beneficial ownership disclosure. The mining sector and the gemstones subsector are mainly regulated by the Ministry of Natural Resources and Environmental Conservation (MONREC). The petroleum and energy sector is regulated by the Ministry of Electricity and Energy (MOEE), which also oversees state-owned enterprises Myanma Oil and Gas Enterprise (MOGE), Myanma Petrochemical Enterprise (MPE) and Myanma Petroleum Products Enterprise (MPPE).

The main revenue streams in both the hydrocarbon and mining sector are royalties, production split and commercial tax/corporate income tax. Tax revenues are collected by the Ministry of Planning, Finance and Industry (MOPFI). Subnational governments do not collect revenues.

License and contracts

Mining permits are awarded on a first come first served basis by the Ministry of Natural Resources and Environmental Conservation (MONREC). Mining permits are further subject to the signing of a production sharing or profit-sharing arrangements with the government. Petroleum contracts take the form of either production sharing contracts (PSCs) for offshore and onshore projects and performance compensation contracts (PCCs) or improved petroleum recovery contracts (IPRs) for onshore projects.

Myanmar EITI previously disclosed licenses via its license portal. Contracts are confidential, with only the PSC signed between Total Myanmar E&P and MOGE for the Yedana project (dated 9 July 1992) being publicly available. In December 2020, Myanmar issued a government regulation requiring the disclosure of oil, gas and mining contracts in the country that are entered into or amended by 1 January 2021.

Beneficial ownership

In 2018, the Government of Myanmar created a Beneficial Ownership Task Force in order to provide leadership and direction to the country’s efforts on beneficial ownership disclosure. In February 2020, the government and Myanmar EITI launched a beneficial ownership register on the Directorate of Investment and Company Administration’s website.

Revenue distribution

Myanmar does not have regulation or procedures allowing the distribution of extractive revenues to subnational governments or communities. Extractive revenues have to a large extent been retained by state-owned enterprises (SOEs) in so-called “Other Accounts” as the companies’ own funds and for the purpose of its exclusive operations and capital investment. According to Myanmar’s 2017-2018 EITI Report, the largest operating SOE, Myanmar Oil and Gas Enterprise (MOGE), transferred about USD 504 million into its Other Accounts in 2017-2018, which had a closing balance of USD 4.6 billion. This amounted to more than six times the total revenue of just over USD 727 million collected from oil and gas companies for the same fiscal period.

In response to recommendations in EITI Reports and calls for more transparency the government issued a directive to abolish the contentious Other Accounts in 2019, ordering that all revenues from SOEs be transferred to the state budget.

EITI implementation

Governance

Myanmar has been temporarily suspended from the EITI since 18 February 2021. Following a coup d’état, the EITI Board concluded that it was not possible to envisage the EITI operating under the current circumstances decided to suspend Myanmar temporarily due to political instability, in accordance with Article 8 (b) of the EITI Standard, and lack of essential freedoms.

The temporary suspension will be lifted when Myanmar is able to demonstrate that the reasons for suspension have been addressed. The EITI is continually monitoring and reviewing the situation on a regular basis and considering if further action is necessary including the possibility of delisting.

Myanmar EITI (MEITI) was previously administered by the Myanmar Multi-Stakeholder Group (MSG) under the Ministry of Planning and Finance.

Multi-stakeholder group

Learn more about the MSG's composition

Meetings and minutes

Explore the MSG's documentation

Work plan

Learn more about the planned activities

Government announces commitment to join the EITI

Multi-stakeholder group is formed

Candidature application is submitted

Myanmar joined

2013-2014 EITI Report published

Report

2015-2016 EITI Report published

Report

2016-2017 EITI Report published

Report

Validation

Meaningful progress

Board decision

207-2018 EITI Report published

Report

Myanmar status

Suspended due to political instability

Board decision

Validation

Myanmar was found to have made meaningful progress in implementing the 2016 EITI Standard in October 2019, following its first Validation. The Validation identified 12 corrective actions to be addressed by the country’s next Validation, which was scheduled to commence in October 2022 but is currently on hold due to suspension.

News

Myanmar moving towards greater transparency

15 Oct 2019

Board decision

The Board agreed that Myanmar has made meaningful progress overall in implementing the 2016 EITI Standard.

16 Oct 2019

Validation

Myanmar Validation 2018

1 Dec 2018

Latest Validation: 16 October 2019

Year

2019

Assessment of EITI requirements

Not met
Partly met
Mostly met
Fully met
Exceeded

Scorecard by requirement View more	Assessment View more
Overall Progress
MSG oversight
1.1Government engagement
A senior individual leads the EITI implementation. Government representatives actively participate in MSG meetings and sub-committee meetings, follow up on the recommendations in the MEITI Reports and address legal barriers to implementation.
1.2Industry engagement
Participation of companies is representation on the MSG. Company representatives on the MSG are actively and effectively engaged in the EITI process in terms of providing information, monitoring and implementing EITI activities. However, EITI participation is limited to MSG members and there is limited evidence of engagement with the wider company constituency.
1.3Civil society engagement
The EITI has created opportunities for all constituencies to be engaged in policy discussions on natural resource governance, including creating discussion platforms for civil society where they did not exist before. At the same time, there is need to further improve the environment for civil society participation in the EITI, particularly in subnational regions. The government needs to ensure that there is an enabling environment for civil society within and outside of the multi-stakeholder group to meaningfully engage in all aspects of the EITI process without obstacles.
1.4MSG governance
MSG members actively participate in regular meetings to design and implement EITI activities. Despite concerns regarding lack of high-level government and company representatives, MSG`s capacity to carry out duties seems sufficient. The ToRs of the MSG address the requirements of the Standard without evidence of significant deviation in practice.
1.5Work plan
The 3-year MEITI work plan is publicly accessible and is produced in a timely manner, with objectives aligned with national priorities. It includes activities to follow-up on recommendations from EITI Reports as well as plans to address legal barriers to EITI implementation.
Licenses and contracts
2.1Legal framework
The 2015-2016 MEITI Report contains the required disclosures on the legal framework and fiscal regime governing the extractive industries.
2.2License allocations
While the procedures for awarding and transferring of mining, gems and oil and gas licenses are outlined in the 2015-2016 MEITI Report, there is no clear description of technical and financial criteria for the mining and gems sector. The report also does not include a discussion of non-trivial deviations from the applicable legal and regulatory framework governing license awards.
2.3License register
While all the data per Requirement 2.3 are compiled and made publicly available for gems and mining licenses, some significant information on oil and gas licenses are not disclosed including information on the license holder, application date, expiry date and commodity(ies) covered by each oil and gas license.
2.4Policy on contract disclosure
The 2015-2016 MEITI Report clearly describes the government’s policy and actual practices on contract disclosures. However, during stakeholder consultations, companies and government agencies noted that there are confidentiality provisions in the mining and oil and gas contracts.
2.5Beneficial ownership	Not assessed
The 2015-2016 MEITI Report discloses the legal owners of the companies covered by the report. In addition, initial steps have been taken towards beneficial ownership transparency including the creation of a beneficial ownership task force and the publication of a BO pilot report.
2.6State participation
The 2015-2106 MEITI Report contains substantial information on state participation. However, some important information including the terms attached to the interests of SOEs are not sufficiently described in the report.
Monitoring production
3.1Exploration data
The 2015-2016 MEITI Report provides an overview of the extractive sector, including significant exploration activities.
3.2Production data
While the 2015-2016 MEITI Report provides production volumes and values, the data on gems sector are not disaggregated by commodity. Moreover, stakeholders have expressed reservations regarding the comprehensiveness and quality of the production data considering external sources of information.
3.3Export data
While the 2015-2016 MEITI Report has some gaps on export volume and value for gems and jade, the report discloses the required export data for mining and oil and gas sectors.
Revenue collection
4.1Comprehensiveness
All material companies submitted reporting templates for the 2015-2016 MEITI Report. Although there are some missing information from government and company templates, these have been sufficiently explained. There is also full government disclosure on payments made by non-material companies.
4.2In-kind revenues
While there is no categorical assessment of materiality of in-kind payments, the 2015-2016 MEITI Report provides significant data on volume and value of in-kind payments to government. However, it is not clear whether Requirement 4.2 applies for oil and gas since there are conflicting explanations of the stakeholders and what is stated in the MEITI Report.
4.3Barter agreements	Not applicable
Stakeholder views confirm that there are no barter and infrastructure transactions in Myanmar for the period covered by the report.
4.4Transportation revenues
The 2015-2016 MEITI Report covers all material oil and gas transportation companies including relevant revenue streams.
4.5SOE transactions
The 2015-2016 MEITI Report provides information on transactions related to SOEs, disclosing all material company payments to SOEs, and transfers from SOEs to government. However, there is evidence to suggest that disclosures on transfers between SOEs and government were not comprehensive.
4.6Direct subnational payments	Not applicable
The 2015-2016 MEITI Report confirms that subnational direct payments are not applicable to Myanmar.
4.7Disaggregation
In accordance with Requirement 4.7, the data disclosed in the 2015-2016 MEITI Report is disaggregated by individual company, revenue stream and government entity.
4.8Data timeliness
Data covering financial year 2015-2016 was published in March 2018, which is the publication date approved by the EITI Board.
4.9Data quality
The 2015-2106 MEITI Report provides a clear overview of quality assurances and the IA’s assessment of the reliability and comprehensiveness of the data. The reconciliation process was undertaken applying international professional standards, and there were no grave concerns about the credibility, competence and trustworthiness of the IA.
Revenue allocation
5.1Distribution of revenues
While the 2015-2016 MEITI Report notes that a substantial portion of revenues from extractive activities go to “Other Accounts”, there is no sufficient clarity on whether these “Other Accounts” are recorded on the national budget and insufficient explanation for how these funds are allocated, nor are there any publicly accessible reports describing the SOE’s management of these funds.
5.2Subnational transfers	Not applicable
The 2015-2016 MEITI Report and stakeholder views confirm that subnational transfers are not applicable to Myanmar.
5.3Revenue management and expenditures	Not assessed
It is encouraging that the MSG has made some attempt to including information on the budget-making process, as well as ongoing reforms on public finance and revenue management, in the 2015-2016 MEITI Report.
Socio-economic contribution
6.1Mandatory social expenditures
While the 2015-2016 MEITI Report notes that social expenditures are required under PSCs of oil and gas companies, the report only covers voluntary social expenditures. Furthermore, there are gaps in information regarding beneficiaries and the nature of expenditures.
6.2Quasi-fiscal expenditures
It is confirmed that SOEs in the mining and gems sector do not have social expenditures or QFEs. For oil and gas, the 2015-2016 MEITI report provides information on quasi-fiscal expenditures (QFEs) of the SOE-MOGE. However, there it appears that some figures in the report are not considered QFEs, while the report lacks other important information on potential QFEs.
6.3Economic contribution
The 2015-2016 MEITI Report discloses details about the contribution of the extractive sector to the economy in terms of GDP, total government revenue, employment and exports. The report also provides the location of major extractives activities in the country.
Outcomes and impact
7.1Public debate
The MEITI Reports are comprehensible, publicly accessible and have contributed to public debate on the governance of extractive industries. The MSG has extended outreach to subnational units and have also exerted efforts to engage the media to promote EITI.
7.2Data accessibility	Not assessed
While the MEITI Reports and summary data templates are regularly published in machine-readable format, there are no efforts to analyse the data in the report.
7.3Follow up on recommendations
There is evidence to show progress in the implementation of significant recommendations such as the formulation of a new gemstone policy, and the disclosure of information on SOEs.
7.4Outcomes and impact of implementation
The MSG has reviewed progress and outcomes of EITI implementation on a regular basis. There is evidence that EITI implementation has produced outcomes and impact in the country, specifically in terms of improving systems and policies of government agencies relevant to extractive industries.