British investment in Burma

Miliband interview Follow-up report

Last night, during our coverage of the unfolding situation in Burma, we reported claims that the government has not stopped British companies trading with the Burmese regime and that Britain is the second biggest foreign investor in that country.

During the interview that followed, the Foreign Secretary David Miliband rejected these claims but promised to clarify the situation and post it on our website.

You can see their statement below, and also the response from Burma Campaign UK.

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We'll be reporting on this issue on tonight's programme.

FOREIGN OFFICE STATEMENT

"The Burmese authorities claim that the UK is the second largest investor in Burma. These economic figures, like most of data produced by the regime, are bogus and misleading. We believe the figure they quote for the UK is cumulative, and includes planned investments dating back many decades by companies such as Premier Oil and British American Tobacco who have since withdrawn under UK Government pressure. It also includes investments that were agreed but which never occurred.

The Department for Business, Enterprise and Regulatory Reform (BERR) figures for current active UK investment are very low. For example in 2005, the DTI recorded UK foreign direct investment flows into Burma as negligible (i.e. not more than £500,000)."

RESPONSE FROM THE BURMA CAMPAIGN, UK

"The British Government always chooses its words carefully when defending its refusal to ban investment in Burma. Labour pledged an investment ban before the 1997 elections, but once in power claimed a unilateral investment ban was illegal. Only a high court challenge by the Burma Campaign UK forced them to admit they could ban investment, all it would take is a small piece of legislation, one that the Conservatives, Liberal Democrats and most of the main political parties support.

The £1.2bn estimate of UK investment, which ranked it as the 2nd largest investor in Burma, is a cumulative total from 1988 to approximately 2004.

Given the significant investments made directly by companies such as Premier Oil, and by British subsidiary offices of foreign companies such as Total Oil, the figures do seem to be reasonable estimates. British American Tobacco channelled its investment via a subsidiary in Singapore, so this figure probably does not include their investment.

To argue that there is no need for a ban because British companies are not investing is misleading. Companies from all over the world have used subsidiaries in British dependent territories to invest in Burma, including France's Total Oil, Unocal (now Chevron) of the USA, and ex-Thai Premier Thaksin's Shincorp.

The Foreign Office repeatedly assured the Burma Campaign UK that if there was any evidence that such investment was continuing, then they would take action. In January and March this year two Singaporean companies were reported to have used British Virgin Island subsidiaries to invest in Burma. There was no response from the British government.

Britain's ranking as the second largest investor in Burma is due in part because for years it has allowed foreign companies to use British territory to facilitate investment. The government's refusal to close this loophole is inexplicable."

NEWSNIGHT RESPONDS

The statement in Peter Marshall's report that Britain is the second biggest investor in Burma was based on data from the Burmese regime, and is a cumulative figure of total investment from 1988 to 2004. We are not aware of the existence of more up-to-date data. We accept that the situation may have changed since companies like Premier Oil and British American Tobacco withdrew from Burma following pressure from the UK government. It is not clear how much investment from British companies is channelled through subsidiaries in other territories.

It remains the case that Britain has not banned UK companies from investing in or trading with Burma. And we note that the Foreign Office has not provided more details to support David Miliband's claim on Newsnight that no major companies are now investing in the country.

The Foreign Secretary also promised to investigate whether or not Britain provides any funding to "exile" groups that promote democracy. This, as we stated on the programme, was highlighted in a report from the International Development Select Committee of July 2007. The Foreign Office has not addressed this issue in today's statement.

FURTHER STATEMENT FROM THE FOREIGN OFFICE

Below please find the British government's position on support for community-based groups and cross-border groups in Burma:

"The British Government supports community-based organisations in Burma. For example, in 2007, £400,000 was given for Internally Displaced People through Buddhist and Christian groups in eastern Burma. Over three years, £500,000 has been given for grassroots-level support to civil society organisations. And a new fund of £3 million has been established to help build the foundations for democracy in local level political decision-making bodies.

"The British Government also provides funding for cross-border groups to provide humanitarian assistance for poor people in Burma's conflict-affected border areas. £1.8 million has been given over three years to the Thai-Burma Border Consortium, which helps people in refugee camps in Thailand and displaced people on the Burmese side of the border."