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An interview with EU Ambassador Roland Kobia on the EU-Myanmar Investment Protection Agreement

The PK Forum talks with EU Ambassador about the negotiations over the EU-Myanmar Investment Protection Agreement.

What benefits could there be for Myanmar of an Investment Protection Agreement with the European Union?

The European Union is promoting investment protection with its international partners with the aim to boost economic cooperation and ensure a level playing field for European companies with other investors. Myanmar has indeed already signed about 10 Investment Protection Agreements with countries of the region and beyond. An Investment Protection Agreement in place is a strong incentive for European businesses to come to Myanmar because they can trust to find fair conditions and a business friendly environment that allows for a long-term strategy. But an Investment Protection Agreement is never a one-way-street: it also makes sure that European businesses investing in Myanmar fulfil their responsibilities when it comes to employment and working conditions, fair pay for workers and the protection of the environment. So if you are asking for the benefits of a Myanmar-EU Investment Protection Agreement, these are: more European investments, more incoming expertise and know-how, more technologies, more jobs, more trade with the European market of more than 500 million consumers; but it is also a safeguard for sustainable and responsible investments that will last and offer social and environmental security to the people European businesses work with in this country.

Further improvement in the business environment in Myanmar will attract more EU investment and the Investment Protection Agreement (IPA) is an important element to achieve that. European businesses are renowned for their leadership in latest technology and know-how. An increase in investment from the EU could therefore help diversify Myanmar's exports from its current natural resource base and labour intensive products. This means in a medium-to long-term perspective a high potential for a positive impact of European investments on economic stability and growth, increased employment and ultimately a contribution to better living standards and reduced poverty in Myanmar.

The IPA will help EU companies when taking investment decisions. The investment protection agreement will also promote transparency in the investment framework that will benefit both domestic and foreign investors. At the same time, the agreement contains clear provisions to safeguard the governments' right to regulate and to protect the rights of workers and the environment.

In its support to governance reform in Myanmar, the EU has emphasised the importance of transparency. Yet the negotiations to this point over the EU-Myanmar Investment Protection Agreement have been criticised as being non transparent. When will the draft terms of the IPA be made available to the public? How will the wider Myanmar public be able to feed into the process before the agreement is made?

The EU is probably the international partner most committed to transparency in its trade and investment negotiations. In every negotiation, including for the EU-Myanmar IPA negotiation, the EU is very open to a broad range of views and dedicates itself to consult all stakeholders. This includes public consultations, a civil society dialogue, as well as exchanges of views with the European Member States via the Council of European Union and the European Parliament. The European Union conducted an Impact Assessment prior to launching negotiations with Myanmar, which included a 3-month public consultation in the country. During the negotiations, a Sustainability Impact Assessment (SIA) was conducted by an independent consultant. This SIA provides an in-depth analysis of the agreement's potential economic, social, environmental and human rights impacts. The SIA was accompanied by a wide-ranging stakeholder consultation, as well as a workshop in Yangon in December 2015 and meetings with civil society. The results of the assessment were taken into account in the negotiations. The European Commission – the European Union institutions responsible for the technical preparation of the agreement - has recently published its position paper, following the final SIA report, indicating how it intends to take into account the recommendations made in the SIA.[1]

The reports of the IPA negotiating rounds are regularly published on the EU website. In addition, in the margin of every round of negotiation, the EU has organised a meeting with civil society to hear its comments and explain how the negotiations are progressing. We also have encouraged and valued any process engaged by our counterparts that would increase the transparency of the negotiation and involvement of the stakeholders.

As regards the texts that are being negotiated, these are not public. This is normal for any negotiation, not just those involving the EU but across the world. For the EU, all investment agreements negotiated by the European Commission need to be approved by the Council of Ministers and the European Parliament. During this approval phase, the text will be made publicly available. The proof is that the text of the agreements recently concluded with other partners (Canada, Singapore or Vietnam) can be consulted on the European Commission's website[2].

As I mentioned before, Myanmar has already concluded and signed about 10 Investment Protection Agreements with countries from Asia and beyond, and it is interesting to note that the EU agreement is no doubt the one that has been offering the highest transparency, preparation and consultation; but it is the agreement that has also been the object of the most attention and commentaries by far various groups.

Another specific concern around the IPA is that - given Myanmar's current challenges of conflict and resource sharing - an IPA would be better considered once these issues have been addressed. Are there ways that an IPA might negatively affect Myanmar's peace process?

The SIA addressed the possible impact of the EU-Myanmar IPA on the peace process. The final report found no evidence that the IPA would cause a deterioration of the Myanmar peace process. This assessment is based on Myanmar’s experience with investment in former conflict zones from Japan, under the Japan-Myanmar BIT. Experience from other post-conflict areas in the world has shown that foreign direct investments and economic growth can actually have a positive impact on peace building efforts. Investments create jobs, and this gives an invaluable new perspective for people who have suffered the consequences of conflict and struggled to feed and educate their children.

Will there be a full EU-Myanmar IPA human rights impact assessment before the agreement is finalised? If so, when might that assessment be made publicly available?

The Sustainability Impact Assessment (SIA) contained a specific section assessing the IPA's potential impact on human rights.[3] According to the SIA, since the scope of the IPA is limited to investment protection, the IPA's impacts on human rights are therefore difficult to determine as such impacts are often indirect. The increase of EU investment as a consequence of the IPA is more likely to deliver positive than negative impacts in terms of human rights. It is important to underline that EU companies regularly have a code of conduct which includes provisions on human rights. The due diligence conducted by EU companies, including the analysis of potential human rights issues in supply chains, could also mitigate the risks of human rights violation, as well as promote good practices in Myanmar. The European public watches very closely how EU companies abroad are performing in terms of sustainable development and human rights.

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