Accused Of Supporting The Military Regime, The South Korean Conglomerate Opened Up Its Business In Myanmar

POSCO C&C Myanmar Office. (Facebook / Myanmar POSCO C&C Co., Ltd)

JAKARTA - South Korean conglomerate POSCO has denied allegations linked to an offshore gas field operated in Myanmar linked to the military regime and used to help fund acts of bloody violence against anti-coup protesters on February 1.

In a POSCO statement, the gas field, along with three of the five businesses it runs in Myanmar, had been operating for 20 years, before the military led by General Min Aung Hlaing staged a coup in February and toppled the democratically elected government. .

The three are a hotel, a rice processing complex and a trading company. Everything is run by POSCO International. POSCO acquired the business in 2010, to expand its portfolio beyond steel manufacturing.

The fifth business the steelmaker operates there is Myanmar POSCO Coated and Color (MPCC), a steel joint venture run between its subsidiary POSCO C&C and Myanmar Economic Holdings Limited (MEHL), one of the country's military-controlled conglomerates.

Gas field project run by POSCO International off the coast of Myanmar. (Source: POSCO International via Koreatimes)

In the MPCC case, POSCO said it would not distribute dividends to MEHL until the Myanmar crisis was resolved. The steelmaker said it could reconsider its partnership with MEHL, depending on how the political situation develops.

"The MPCC is the only recognized business associated with the Myanmar military," the company said.

Meanwhile, the gas project off Shwe Coast, which is located 500 kilometers from Myanmar's capital, Naypyidaw, has been moot because it includes Myanmar Oil and Gas Enterprise (MOGE), a state-owned company in a consortium of six international companies led by POSCO.

The Shwe gas field project posted sales of 623 million United States (US) dollars in 2020, accounting for 86 percent of total POSCO International sales in Myanmar.

Meanwhile, the gas field generated an operating profit of 276 million US dollars last year, accounting for 64 percent of the company's total operating profit in the country. MOGE owns 15 percent of the shares. This led Myanmar's pro-democracy supporters to accuse the business of being used to finance the military regime.

Myanmar military coup demonstration. (Twitter / @ HsuChiKo1)

"We don't believe that argument, given the fact that our relationship with MOGE existed long before the coup. It is absurd to say we support the military junta, because of the sudden change in government," said POSCO.

The world's fifth-largest steel producer said it was monitoring the moves of other multinational companies that were reconsidering their business in Myanmar or had withdrawn.

However, POSCO limits the possibility of suspension or withdrawal from the gas project. The company referred to binding multi-party contracts, saying, "Any one-sided decision that can be taken can damage a hard-earned partnership."

POSCO said the suspension of the gas project would ultimately hurt Myanmar's economy and civilians, given it was used to generate electricity.

It added that China or other foreign businesses could replace POSCO if pulled out, saying, "This will only benefit the junta, while inflicting losses on Korea."

POSCO also said it had begun repatriating employees from South Korea and their family members from Myanmar. In total there are more than 50 South Korean workers and families living in Myanmar.

Myanmar Coup. The VOI editorial team continues to monitor the political situation in one of the ASEAN member countries. Casualties from civilians continue to fall. Readers can follow the news surrounding the Myanmar military coup by tapping on this link.