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Australia’s Future Fund invested in weapons manufacturers that have sold arms to Myanmar military

Sovereign wealth fund’s holdings include 14 companies that have done business with military which has killed more than 1,200 since coup

The Future Fund has been criticised for ‘seeking to profit from companies arming the Myanmar military and effectively financing its campaign of terror’. Photograph: Reuters

Australia’s sovereign wealth fund, the Future Fund, has invested in a Chinese state-controlled weapons manufacturer that has sold combat aircraft to the Myanmar military, which is accused of crimes against humanity.

A weapons company controlled by India is also among companies the fund has invested in that are linked with the Myanmar military, documents released under freedom of information laws show.

Myanmar’s military seized control of the country in a coup in February and has since killed more than 1,200 civilians in a crackdown on pro-democracy protests.

In total, Australia’s Future Fund has invested $157m in 14 publicly traded companies that have done business with the Myanmar military.

The fund’s holdings include $4.9m invested in five subsidiaries of the Chinese arms conglomerate Aviation Industry Corporation of China (AVIC)

It also has $17.8m invested in Bharat Electronics, a company controlled by the Indian government that has supplied materiel to the Myanmar military and was sanctioned between 1998 and 2001 by the US over allegations it was involved in developing nuclear weapons. The sanctions were lifted in 2001 due to India’s cooperation with the US in an anti-terrorism campaign.

The Future Fund holds about $200bn in investments made on behalf of the Australian government. It is overseen by a board of guardians chaired by Peter Costello, who was treasurer in the Howard government.

Myanmar’s military, known as the Tatmadaw, has faced international condemnation over its 2017 “clearance operations” – executed with “genocidal intent”, according to UN investigators – against the ethnic minority Rohingya in Rakhine state, which included mass killings, including of children, as well as gang rapes, arson and torture. More than 25,000 Rohingya were killed, and 700,000 driven over Myanmar’s border into Bangladesh.

In 2019, a UN fact-finding mission said China was breaching international humanitarian law because of AVIC’s transfers of military supplies to the Tatmadaw.

The bulk of Australia’s investment in AVIC is through subsidiary AviChina, in which it has invested $3.2m. AviChina manufactures the K-8 light combat aircraft, which have been used in military operations in the state of Kachin in Myanmar.

In 2015, the Myanmar military ordered 16 JF-17M combat aircraft from AVIC under a US$560m contract. The first four planes were commissioned in 2018, a year after the Myanmar military’s genocidal campaign against the Rohingya.

AVIC also delivered 40 short-range PL-5E missiles and 24 longer-range PL-12 missiles, both of which can be fitted to the JF-17M aircraft, to the Myanmar military in 2018-19, according to the Stockholm International Peace Research Institute Arms Transfers Database.

Bharat Electronics has continued to sell military supplies to the Tatmadaw since the coup. The company has supplied the Tatmadaw with radar, sonar, a coastal surveillance system and a remote-controlled weapons station, according to export data.

The Justice For Myanmar spokesperson Yadanar Maung said that since the 1 February coup, the military had killed more than 1,200 civilians, including children, had tortured thousands, committed rape, torched villages and launched indiscriminate airstrikes on homes.

“It is deplorable that Australia’s Future Fund is seeking to profit from companies arming the Myanmar military and effectively financing its campaign of terror.

“In the name of Australia’s ‘future’, taxpayer funds are being invested in companies that supply the Myanmar military with fighter jets, missiles, radar and provide millions in annual revenue to war criminals. It is time Australia stops profiting at the expense of the lives of Myanmar people and Myanmar’s future.”

Other companies in which the Future Fund has investments that have links to the regime include Sinotruk, which makes trucks used by the Tatmadaw but has denied selling the vehicles to the military. The fund has invested $4.4m in Sinotruk, which did not respond to Guardian Australia’s questions.

The Future Fund’s largest Tatmadaw-linked investment is in Korean steel giant Posco, which operators the Shwe gas project, a major revenue earner for the Myanmar military. A Posco subsidiary also brokered the sale of a warship for the Myanmar navy. Posco has not responded to questions from the Guardian but Jeong Joon-sung, a Posco director, has previously said: “We don’t think that the gas field business is connected to the military junta.”

The Future Fund has also invested $33m in Kirin, which is in joint venture with a Tatmadaw-controlled company in a brewery business in Myanmar. After the coup, Kirin suspended dividend payments to the Tatmadaw company, MEHL, and promised it would stop doing business with it.

It has not yet done so and earlier this month MEHL applied to the courts in Myanmar to have the joint venture liquidated – a move Kirin said it opposed “because of doubts about the fairness and appropriateness of the liquidation process”.

A Kirin spokesperson, Russell Roll, said the company “has made every effort to negotiate the termination of the joint venture with MEHL”.

“However, MEHL has been uncooperative in the negotiations, effectively rejecting our proposals,” he said.

“We have been and continue to be deeply concerned by the recent actions of the military in Myanmar, which are against our standards and human rights policy.”

The Future Fund did not answer questions about its investments in companies linked to the Tatmadaw.

In a statement, a spokesperson said: “In line with its mandate from government, the Future Fund has built a broadly diversified portfolio which includes passive investments through external investment managers in thousands of entities globally.

“The fund has a well-established policy on environmental, social and governance matters and exclusions which takes account of its objectives, legislation, investment strategy, Australian law and the treaties that the Australian government has entered and ratified.”


(c) 2021, The Guardian


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