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The Adani Business Formula: Dealing with Myanmar’s Military

Corporate morality can be a flexible thing. Some companies see tantalising dollar signs afloat in the spilt blood of civilians and dissidents. Military governments, however trigger crazed, offer ideal opportunities; potentially, corners can be cut, regulations relaxed. The Adani Group has shown itself to be particularly unscrupulous in this regard.

In many ways, it is fitting. The group’s record in a range of areas suggests that the profit motive soars above any other consideration. Environmentally, Adani is an irresponsible, wretched beast. A shonky Adani coal ship, the MV Rak, sank off the coast of Mumbai in August 2011 with devastating effects on marine life, the fishing industry, beaches, and tourism. Its lacklustre response to dealing with the mess suggested environmental vandalism of the highest order.

In terms of employment practices, the company has been found to underpay its workforce and use child labour in the bargain. As for corporate strategy, Adani is happy to spread largesse for favours. The illegal export of 7.7 million tonnes of iron ore between 2006 and 2010 mobilised the company in a campaign of suppression and concealment. The Ombudsman of the Indian state of Karnataka took an interest in Adani’s conduct and found a vast bribery enterprise covering local politicians, customs officials, members of the police force, the State Pollution Control Board, the Port Department, and the Weight and Measurement Department.

So why stop there? With the killing of demonstrators in Myanmar well underway, human rights groups and activists turned their sharp focus towards Adani’s record on port investment and its involvement with the military junta. The grounds of concern were already laid in 2019, when the UN Independent International Fact-Finding Mission on Myanmar listed Adani Ports and its commercial links with the military conglomeration, the Myanmar Economic Corporation (MEC).

The previous year, the UN Mission had issued a call for the top military commanders of Myanmar to be investigated and prosecuted for alleged war crimes and crimes against humanity against ethnic groups in the states of Arakan (Rakhine), Kachin, and Shan and for alleged genocide against the Rohingya of Arakan state. The fact-finding mission was stern in judgment: “no business enterprise active in Myanmar or trading 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.”

The International Criminal Court has also authorised the Prosecutor to investigate alleged atrocities by the military, including deportation and other inhumane acts and the persecution of the Rohingya inside Myanmar. While Myanmar is not a State Party to the court’s jurisdiction, Bangladesh, which received the bulk of the displaced Rohingya, is.

In “Port of Complicity: Adani Ports in Myanmar,” a March 2021 report by the Australian Centre for International Justice and Justice For Myanmar, the authors focus on Adani Port’s commercial ties with the MEC military conglomerate. In May 2019, Adani Ports entered into an agreement to construct, operate and transfer land held by the MEC for 50 years in an investment that promises to run to $290 million. Land is being leased for the construction of the Ahlone International Port Terminal 2. The very property in question is a source of concern. “Due diligence obligations,” warn the authors, “would require Adani Ports to investigate whether the land is the subject of illegal appropriation by the military.”

The report also draws upon documents obtained by Justice for Myanmar, revealing that Adani Ports’ subsidiary in Myanmar, the Adani Yangon International Terminal Company Limited, paid $52 million to the MEC, including $30 million in land lease fees. The rest constitutes land clearance fees.

Through its Australian arm, the Adani Group released a statement seeing little problem with the commercial deal with a military-run corporation, despite acknowledging arms embargoes and travel sanctions on important members of the junta. Such facts did not “preclude investments in the nation or business dealings with corporations such as MEC.” The company also “rejected insinuations that this investment is unethical or will compromise human rights.”

In December 2020, Adani reiterated that understanding to the Australian Broadcasting Corporation, seeing no problems between ongoing arms embargoes and travel restrictions on “key members of the military.” A more constructive reading of company intentions was encouraged. “The Adani Group’s vision is to help build critical infrastructure for nations across key markets and help in propelling economic development and social impacts.”

Following the February 1 coup, Adani issued a statement denying any engagement with the junta over the 2019 approval of the port. “We categorically deny having engaged with military leadership while receiving this approval or thereafter.” This was a curious version of events, given the July 2019 visit by a Myanmar military delegation led by Commander-in-Chief Senior General Min Aung Hlaing to Adani Ports’ headquarters based in Mundra, India. Ten days prior to the visit, the US State Department had targeted Min Aung Hlaing and three senior members of the military with travel bans, citing their “responsibility for gross human rights violations, including in extrajudicial killings in northern Rakhine State, Burma, during the ethnic cleansing of Rohingya.”

The tour presented the general and his coterie a happy occasion for photo and video opportunities, many of which were posted on his personal website and the website of the Office of the Commander-in-Chief of Myanmar Defence Services. Gifts were also exchanged between the CEO of Adani Ports, Kiran Adani, and the Senior General.

Caught out by this howler, the company, through a spokesperson, attempted to minimise the significance of the meeting. The general and his delegation were on an official visit to India; visiting Mundra was merely an informal matter. “In 2019, the government of India hosted the Myanmar general Min Aung Hlaing and Mundra Port was only one such location out of the multiple sites on this visit.”

The military regime in Myanmar is becoming the subject of interest in certain foreign capitals. The Office of Foreign Assets Control (OFAC) within the US Treasury has targeted the two main military holding companies, the MEC and Myanma Economic Holdings Company Limited (MEHL) with sanctions. “These companies,” states the US Treasury, “dominate certain sectors of the economy, including trading, natural resources, alcohol, cigarettes, and consumer goods.” Various high-ranking military officials, former and current, have links to the holding companies and their various subsidiaries.

Superbly disingenuous, a spokesperson for Adani Ports has suggested watchfulness at this increasingly sordid picture: 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.” In what can only be regarded as an exercise in moral vacuity, the same spokesperson claimed that the Yangon International Terminal project was “an independent container terminal with no joint venture partners.”

The Myanmar-Adani nexus comes with broader, blood-stained implications. The company’s Australian operations in the Carmichael coal project in Queensland, long challenged by a determined grassroots effort, raises the question of ethical financing. “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,” asks Chris Sidoti, an Australian lawyer who was on the 2019 UN Mission. Investing in Adani was tantamount to the indirect financing of the Myanmar military. “This is a question especially for sovereign wealth funds and pension funds that should have a highly ethical basis for their investment decisions.” As ever, some room to hope.