The European Union (EU) and Myanmar entered negotiations on an Investment Protection Agreement (IPA) in 2014. The EU has since put those IPA talks on hold, partly because of concerns over human rights in the country. The agreement aimed to promote EU investments in Myanmar. These investments were meant to bring foreign capital, employment, new technologies, skills and know-how to the country.
The following report – commissioned in 2017 by DanChurchAid, ICCO Cooperation, ACT Alliance EU, and the ACT Forum in Myanmar – found the agreement would indeed stimulate investment. It warned, however, that it might also lead to human rights violations and hinder future development.
Summary
Economic Opportunity and Risks
The pending EU-Myanmar Investment Protection Agreement (IPA) seeks to bolster economic ties between the European Union (EU) and Myanmar, promising essential guarantees for EU investors while aiming to provide legal certainty for Myanmar’s development goals. However, the agreement also presents significant risks, particularly when it comes to human rights and land-related issues. Legacy land disputes and weak human rights protections in Myanmar suggest that increased investment could exacerbate livelihood and rights violations. These include land rights, access to food, housing, and self-determination, especially for indigenous communities. Provisions within the draft agreement, such as National Treatment and Most Favoured Nation clauses, Fair and Equitable Treatment, and Expropriation, raise concerns about Myanmar’s ability to enact policies in its best interest without putting investors at risk.
Legal Framework and Dispute Resolution
Of particular contention within the draft agreement is the provision for Investor-to-State Dispute Settlement (ISDS). This mechanism enables foreign investors to bypass national courts, potentially undermining democratic governance and human rights. Despite the EU’s efforts to replace ISDS with an ‘investment court,’ concerns persist regarding limited access to justice for affected communities. Including ISDS raises questions about sovereignty and the balance of power between investor rights and public policy objectives. Moreover, Myanmar’s weak land tenure system and lack of clear governance structures for ethnic states compound the risks associated with increased investment, threatening indigenous rights and exacerbating land grabbing and environmental degradation.
Policy Implications and Development Challenges
Critically, there is scepticism about the direct positive impact of an IPA on Myanmar’s development. Other barriers to investment, such as corruption and infrastructure deficiencies, remain pressing concerns. Moreover, the agreement’s lack of binding standards and compliance mechanisms raises doubts about its effectiveness in promoting social and environmental responsibility. Myanmar’s institutional capacity is limited, and its vision for economic policy could cause potential conflicts. Stakeholders must therefore carefully scrutinise specific provisions of the Investment Protection Agreement to mitigate risks and ensure alignment with Myanmar’s broader development goals. Increased advocacy and lobbying efforts are essential to address these concerns and safeguard the interests of affected communities and the country’s long-term development prospects.