"Myanmar: Japan’s Construction Aid Benefits Junta" 24 Jan 2023

Japan’s Yokogawa Bridge Corp. apparently transferred over US$1 million in 2022 to Myanmar Economic Corporation (MEC), which is owned by Myanmar’s abusive military, for a Japanese government development aid project, Human Rights Watch said today.

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“Through Yokogawa Bridge Corp.’s business dealings with MEC, the Japanese government has effectively helped fund junta atrocities,” said Teppei Kasai, Asia program officer at Human Rights Watch. “The Japanese government should ensure that it is no longer providing non-humanitarian development assistance to Myanmar’s junta.”

Human Rights Watch analyzed financial transactions that show that Yokogawa Bridge Corp. paid MEC about $1.3 million from July to November, 2022, for the Bago River Bridge Construction Project in Yangon. The funds were transferred in a series of payments from Yokogawa Bridge Corp. through Japan’s Mizuho Bank, Ltd. to MEC’s account in Myanmar’s Myanma Foreign Trade Bank.

The Bago River Bridge Construction Project, approved in 2016 as part of the Japanese government’s official development assistance to Myanmar, includes a ¥31 billion (US$240 million) loan from Japan’s aid agency, the Japan International Cooperation Agency (JICA). In March 2019, Yokogawa Bridge Corp. signed a contract to build the bridge.

In response to a Human Rights Watch letter about the issue, a Japanese Foreign Ministry official said the construction of the bridge resumed on April 1, 2022. The official added that the Japanese government is “not in a position to explain” Yokogawa Bridge Corp.’s payments to MEC as they are transactions “between private companies.”

In response to a letter from Human Rights Watch summarizing information about these financial transactions and seeking their comment, Yokogawa Bridge Corp. declined to comment on “individual cases.” Mizuho Bank also declined to comment.

The US, United Kingdom, European Union, and Canada have sanctioned MEC and Myanmar’s other military conglomerate, Myanmar Economic Holdings Limited, for their role in generating significant revenues that help fund the military. [...]

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The Bago River Bridge Construction Project’s ties to MEC came to light when a local media outlet, Myanmar Now, reported in March 2021 that a steel mill, the corporation owned in Hmawbi, Yangon, had been making substantial profits by supplying steel for two-thirds of the bridge’s construction. JICA subsequently confirmed to Human Rights Watch that Yokogawa Bridge Corp. finalized a contract with MEC and its affiliate in November 2019. In April 2021, Yokogawa Bridge Holdings Corp., which wholly owns Yokogawa Bridge Corp., stated that construction of the bridge had been halted due to the “situation on the ground,” and that it would “conduct business that respects human rights.”

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The UN human rights office also said that governments should “ensure their humanitarian and development assistance programs do not benefit the SAC [State Administration Council junta] or military-owned companies,” citing the Bago River Bridge Construction project, and recommended that “business enterprises active in Myanmar or trading with or investing in businesses in Myanmar, including supply chain operations, should undertake due diligence to ensure they do not enter into or remain in a business relationship of any kind with the Tatmadaw, or any enterprise owned or controlled by them (including subsidiaries) or their individual members.”

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