Friday, August 18, 2017

Coca-Cola admits link to local jade company

Soft drinks giant Coca-Cola has confirmed that a director of Coca-Cola Pinya Beverages Myanmar (CCPBM) is also a director and minority shareholder in Xie Family Company, which it says operates a local jade business – an industry sanctioned by the US government.

“In 2015 Global Witness brought to our attention information regarding a director of Coca-Cola Pinya Beverages Myanmar (CCPBM), Daw Shwe Cynn, who is also a shareholder of Pinya Manufacturing,” said the firm’s Responsible Investment in Myanmar 2015 Update, published yesterday.

“The information from Global Witness showed that the CCPBM Director is also a director and minority shareholder in Xie Family Company which reportedly operates jade mines in Myanmar. Our original due diligence was based on the best information available at that time,” it said.

A spokesperson from Coca-Cola confirmed to The Myanmar Times that Daw Shwe Cynn will remain a shareholder of Coca-Cola and that the US firm will facilitate direct engagement between non-government organization Global Witness and Daw Shwe Cynn. Neither Coca-Cola’s local partner Pinya Manufacturing nor its shareholders are Specially Designated Nationals as identified by the Office of Foreign Assets Control.

Daw Shwe Cynn did not respond to an emailed request for comment yesterday.

Coca-Cola confirmed that it carried out repeated and comprehensive due diligence based on the information available at the time before entering the Myanmar market in 2013. In addition, it reportedly conducted a search through independent firms on the reputation, background and trade sanction risks of the local partner and its shareholders and officers.

In mid-2014, the Directorate of Investment and Company Administration briefly published information on registered company shareholders, including the identity number of each shareholder, before removing the information from the website several months later.

This informed the Global Witness report, according to the Coca-Cola spokesperson. Global Witness did not respond to a request for comment by press time.

“While the jade mining industry is unrelated to our business, we encouraged and facilitated engagement between Daw Shwe Cynn and Global Witness,” said the Coca-Cola report.

“Our findings from the additional due diligence conducted in 2015 are in line with our earlier assessment and we remain confident that our investment is in compliance with applicable laws, and that our local business partners fully understand our expectations regarding human rights, workplace rights and ethical business conduct.”

US lawmakers maintain a decade-old ban on imports of rubies and jade, as part of wider restrictions on activities or individuals that are believed to contribute to human rights abuses.

Up to 90 percent of the world’s jadeite – the most sought-after type of jade – is mined in Hpakant in Kachin State, feeding a vast appetite for the green stone in Asia, particularly in China where it is believed to ward off evil spirits and bring better health. The famously murky jade trade has seen lower sales this year in part because of declining demand as the Chinese economy slows.