Myanmar: Who Owns What, And Why It Matters

Denmark’s controversial decision to pay an anonymous source for beneficial ownership data drawn from the leaked Panama Papers this week is yet another example of growing demand for information on the individuals who truly own, control or benefit from companies.
 
The Danish tax minister indicated his government is seeking the information in order to pursue tax evasion investigations, demonstrating the critical role that beneficial ownership information can play in helping countries tackle this issue, and corruption more generally. A growing number of countries are committing to asking companies to disclose their beneficial owners. Nowhere is such transparency more important than in the extractive sector.
 
In February, the Extractive Industries Transparency Initiative’s international board adopted the 2016 EITI Standard. It requires implementing countries to request and companies to disclose beneficial ownership information by January 2020 at the latest. By January 2017, country-level stakeholder groups must develop roadmaps outlining how they will pursue such disclosures. With 51 EITI countries heading toward this first beneficial ownership disclosure deadline, all hands must be on deck to help country stakeholders in their planning around how beneficial ownership disclosure can be done in ways that address local contexts.
 
Along with other supporting organizations, NRGI has been providing support to countries on beneficial ownership transparency. This support ranges from providing technical advice on legal reforms that backstop such disclosures to facilitating the use of open data tools. In Myanmar, our research has revealed that beneficial ownership transparency could play a critical role in reforming the mineral and gemstone licensing process to improve economic and social outcomes in the country, and reducing conflict-of-interest risks associated with the role of state-owned enterprises in local content provision.
 
Based on the key messages in NRGI’s briefing “Owning Up,” and together with our partners at Global Witness, we are recommending seven steps that stakeholders in Myanmar could take to implement the EITI beneficial ownership requirements in a way that increases the potential for concrete improvements in natural resource governance:

1. Set a strong beneficial ownership definition: Stakeholders in Myanmar should be clear about who is not a beneficial owner of a company, setting a definition with either no threshold for disclosure or a very low threshold, and ensuring politically exposed persons are covered.
2. Agree on identifying information for beneficial owners: It is essential that there is sufficient accompanying information for the identity of each beneficial owner to be pinpointed, and for the nature of his or her interest in the company to be fully understood (i.e. full name, identifying details, means of control, etc.)
3. Agree on scope of disclosure in the short and long term:Ensure wide coverage of all relevant companies in the sector will be key.
4. Establish mechanisms and timeframes for data collection: A clear process and timeframe will ensure companies are clear on when and how they should be reporting.
5. Find a workable method for confirming information:Companies should be required to attest to the accuracy of information and provide documentation to back this up, tasking data collectors with cross-checking the information against available documentation or performing deeper audits could also help ensure accuracy.
6. Publish information in an open data format: The beneficial ownership declarations coming out of the EITI process should be fully downloadable and accessible to the public so that anyone looking into the extractives sector or a particular company’s activities can review and use the data easily.
7. Commit to improving extractive sector governance: The Myanmar government, responsible companies and civil society could multiply the benefits of new beneficial ownership information by combining it with other public resources as they carry out investigations or due diligence.