Kyaukphyu sez, Myanmar

1. Kyaukphyu
Special economic zone
KPSEZ
Pham Van Dung
25 June 2018

2. Overview SEZs
• Chinese SEZs is viewed as
successful overall
• Most SEZs in Africa are
unceccessful, dedicated to
mining
• SEZs in the ‘CLMV’ countries:
unclear rationale,
‘agglomeration economy’
approach based on industrial
clusters
• Most SEZs in Cambodia are
stand-alone areas aimed at
manufacturing

3. Kyauk Phyu SEZ location

4. Background
• KPSEZ is in central western coast of Myanmar on
Ramree Island, Rakhine State
• An oil and gas terminal
– Financed by the China National Petroleum
Corporation
• A pipeline linking Myanmar and China
• A container port and gas-turbine power plant
• Attractive to Chinese investors
– Strategic location - quickest trade route by sea
between India and China

6. Background
• Announced in September 2013
• The 12 competing companies were interviewed, discussed
in February 2015
• Local firms complained of a lack of domestic competitors,
with most bid finalists from China or Singapore
• Government awarded tenders to the Chinese conglomerate
CITIC
• SEZ construction started in 2015; seaport started in 2017
• For industrial, logistics, and service industries, processing
local resources (agricultural goods, minerals)
• To rival Singapore as the regions petrochemical hub

8. Project area occupation

9. Project time frame

10. Planning and challenges
• Textile and clothing industries – not near big cities
• Food and processing industries – road linking other
regions
• Tourism vs. industry, question of local involvement
• Incentives to investors – local benefits?
– Max 75 years land lease
– Income tax exempt for the first 8 years of operations
– 50% income tax relief for the following 5 years
– customs duty exemptions for importing construction
materials, vehicles, and other items
– Government invests in the surrounding infrastructure

11. Consultation?
• Rakhine State Parliament had not been
adequately informed about the SEZ plans
• People have received very little information
about the SEZ and its potential impacts
• Affected people and the public lack access to
information of land acquisition
• Stakeholders showed insufficient
transparency

12. Consultation?

13. Impacts
• 20,000 people are facing involuntary resettlement in
Kyauk Phyu
• Compensation remains a flawed process, it does not
reflect true value of land
• Communities don’t understand the process of
compensation
• Meeting with CITIC representatives, locals were
informed that they would not be compensated if they
did not hold an official “Form 7” land title
• Many villagers tried to register their farmland, but
their applications were not accepted by local officials

14. Available land? from whom?

15. Whom will local ancestral endowment
serve?

16. Impacts
• Local people faced severe difficulties as fishing and
transportating boats are prohibited
• Before: a man could feed his family and sell the surplus.
After confiscation, he could take sporadic work
• Land speculation; rise prices for land and basic
commodities
• Discourage responsible investors and encourage
unscrupulous investors
• Influx of foreign workers, locals get casual labour during
construction

17. Impacts
• Locals are fearful of and hostile to foreign investors due
to the negative impacts of oil and gas terminal and
pipeline
• Concern about the cultural impact and safety of women
and girls
• South-East Asia oil and gas pipeline and terminal facilities
caused land grabbing and displacement
• Plus harmful social impacts and great tension between local
communities, investors and workers
• Illegal transfers of land and access right
• Destruction of coral reef (due to dynamiting) and other
habitat, and depleted fish stocks

18. Research & Advocacy
• Oxfam
– Assess impacts of SEZs
– Suggest undertake mechanisms to ensure benefit
everyone in Kyauk Phyu – and beyond
– To carrying out a Strategic Environmental Assessment
(SEA) -> strategic planning
– To conform to the World Bank Policy on Involuntary
Resettlement and FPIC
– Urge to establish operational complaints and
grievance mechanisms to prevent disputes
– Skills training to enable people to access jobs or other
benefits

19. Advocacy
• Special Rapporteur on the Situation of Human
Rights in Myanmar
– All SEZs had affected communities negatively
– Projects have not been implemented in
transparency and not in accordance with the law
– Locals received few benefits from the port and
pipeline
– Land acquisition activities took place before
related proper assessments

20. Urges halt to SEZ expansion
• Involvement of the International Commission of Jurists
(ICJ), Oxfam and other CSOs
• Reasons to halt SEZ:
– SEZ Law undermines the protection of human rights
– Critical legal procedures are poorly implemented
– Thilawa and Dawei SEZs prioritise profit over the welfare
of the local population and workforce
– Not yet job guarantee for resettled people, while
minimum wage cannot protect livelihood
– Defend human rights in order to prevent from ethnic and
religious conflicts (Kaman, Rohingya ethnic groups; Muslim
& Bhudism)

21. References
• Aung, N.L. 2015. Winner postponed for Kyaukphyu. Retrieved:
https://www.mmtimes.com/business/property-news/12840-winner-postponed-
for-kyaukphyu.html
• Baffa, C. 2013. Special Economic Zones in Myanmar. Retrieved:
https://www.aseanbriefing.com/news/2013/06/28/special-economic-zones-in-
myanmar.html
• Chau, T. 2017. SEZ impact on communities must be addressed: Yanghee Lee.
Retrieved:
https://www.mmtimes.com/news/sez-impact-communities-must-be-addressed-
yanghee-lee.html
• ICJ. 2017. Special Economic Zones in Myanmar and the State Duty to Protect
Human Rights. Retrieved:
https://www.icj.org/wp-content/uploads/2017/02/Myanmar-SEZ-assessment-
Publications-Reports-Thematic-reports-2017-ENG.pdf
• Mcivor, N, & Scharinger. 2017. Responsible investment in Kyauk Phyu Special
Economic Zone. Retrieved:
https://www.mmtimes.com/opinion/25067-responsible-investment-in-kyauk-
phyu-special-economic-zone.html

22. References
• Oxfam. 2017. Responsible Investment in Myanmar: Lessons from experiences of
SEZ developments. Retrieved:
https://myanmar.oxfam.org/sites/myanmar.oxfam.org/files/file_attachments/dp-
responsible-investment-myanmar-sez-250117-en.pdf
• Phillips, K. 2017. Legal advocacy group urges halt to SEZ expansion.
Retrieved:
http://www.dvb.no/news/legal-advocacy-group-urges-halt-to-sez-expansion/
74409
• Road Show. 2014. Effective and meaningful multi-stakeholder engagement.
Retrieved:
http://kpsez.org/wp-content/uploads/2014/07/Multi-stakeholder-Engagement-sg-
roadshow.pdf
• Road Show. 2014. Kyauk Phyu Special Economic Zone development.
Retrieved:http://kpsez.org/wp-content/uploads/2014/07/KPSEZ-Road-Show1.pdf
• So Phyo Win. 2017. MoU on Kyaukphyu SEZ likely in August. Retrieved:
https://www.mmtimes.com/business/27137-mou-on-kyauk-phyu-sez-likely-in-
august.html

23. Thanks for your attention!