Jade curse tests post-sanctions Myanmar

Its embrace can bring wealth beyond measure, or instant death. It is a magnet for the most impoverished migrant workers and the most ruthless exploiters. Its haunts are a cauldron of armed conflict beyond the law of the land. In what could be one of its most challenging tests, how will Myanmar’s democratic government deal with the green curse of jade?

People search for jade miners killed by a landslide at Hpakant, Kachin State, on November 22, 2015. Photo: EPAPeople search for jade miners killed by a landslide at Hpakant, Kachin State, on November 22, 2015. Photo: EPA

A well-managed extractive industries sector would attract responsible domestic and overseas investors who employed well-paid workers protected by robust safety standards, producing rare and valued assets that would help fill the nation’s tax coffers and pay for its public services.

How do we get from here to there?

Kachin State has for decades been a cockpit of conflict between government forces and local armed groups. Hpakant, the epicentre of the jade trade, is not a destination for the faint of heart.

The hundreds of thousands of workers who have made their way there are badly paid and exploited, and are often prey to drugs. Hundreds have died in the past year in landslides as the towering hills of tailings regularly collapse on wildcatters scrabbling for scraps that could mean the difference between life and starvation.

Yet vast profits can be made there, mostly to the benefit of shadowy foreign companies and their local collaborators. Their depredations have been so voracious that some experts fear that the jade deposits could be stripped clean within 10 years.

Under these circumstances, many in Myanmar might think to themselves, “Good riddance.”

Data from the gems industry suggests there are 7400 active jade fields in Hpakant and Lone Khin, and 1000 expired fields. Heavy machines imported from China under the previous government are working day and night to extract the treasure that is left.

Local residents want the digging to stop.

Pyithu Hluttaw MP U Tint Soe (NLD; Hpakant) has urged the imposition of strict controls.

“The government should review jade excavations, or Hpakant’s jade will be gone within 10 years. We must stop excavation,” he said.

Between 2011 and 2016, the government received K1430.33 billion from the metals sector, K1060.33 billion from the gems sector and K1010.34 billion from jade sector. The total value of the jade exported to China and Hong Kong during that period was estimated at 5.1 billion euros (US$5.63 billion), according to Myanmar gems industry sources.

But one year ago, Global Witness, an international NGO based in Britain, released a report saying Myanmar’s jade fields produced US$31 billion in 2014 alone, a sum equivalent to 48 percent of the country’s GDP and 46 times the size of its health budget. Of this sum, only about 10pc reverted to the state in tax.

The cost is more than just financial. The once-green fields around Hpakant are a scene of industrial devastation, as towering, sterile mountains of slag thousands of feet high disfigure the landscape. Heavy rains turn those hills into killing traps. More deaths are caused by collisions between passenger cars and the heavy trucks employed by the mining firms.

U Tun Hla Aung, secretary of the Jewellery Entrepreneurs’ Association, has called on all jade mining companies to devise an environmental management plan with input from the Union and state governments, local residents and experts.

More than 300,000 people are estimated to be employed around Hpakant. They come from all over Myanmar. In 2015, at least 36 landslides were reported. In the landslide that occurred on November 26 last year, nearly 200 migrant workers were killed. Many of their bodies were never recovered. Yet still the scavengers come. Last May, at least 13 were killed in a pit collapse.

U Ohn Win, Union minister for natural resources and environmental conservation, has threatened to arrest jade scavengers and send them home, and prevent others from coming to Hpakant. The government has since drawn attention to the Myanmar Gemstone Law, which provides for up to seven years’ jail for prospecting without a licence and related offences.

Ko Myo Zaw, a Rakhine State native now scavenging for gems scraps in Hpakant, said, “We have six family members. There are no jobs at home, so I have to work here and send money back to my family. I haven’t found any jade in six months. But what else can I do?”

It’s not that he doesn’t understand the risks. “You have to follow the tracks made by the water in the slopes during the rainy season. You have to concentrate so hard you can miss the signs that a collapse is coming. We’re all afraid to die. But we can’t think about the risks when we have families to support.”

Many in Lower Myanmar stay at home, on the farms and in the fisheries, despite the low wages. Others, attracted to the mines by the lure of jade, now find they can’t go home again.

U Win Tun from Pakokku township, Magwe Region, has survived seven years of the scavenging life. “I can earn enough to send my children to school and keep them healthy. But if I went back home, I could not survive. We are prepared to protest against the government’s threat to send us to prison. We have to work, or we will suffer more.”

In response to such pleas, voices have been raised in favour of cracking down on the employers, rather than the employees. “The scavengers are trying to strike gold in the rubbish heaps. They can lose their life doing that. The government should make the companies responsible for the safety of their workers, and try to improve the conditions of the scavengers,” said the Hpakant MP U Tint Soe. He said he wanted amendments to a draft gemstones law coming before hluttaw that, he said, would in its present form provide insufficient help for mineworkers, local residents and freelance scavengers.

According to Global Witness spokesperson Jumen Kubba, 90pc of the Hpakant entrepreneurs are Chinese, and 50pc to 80pc of the jade extracted was smuggled into China. U Tint Soe said, “The government has to take action. The entrepreneurs are getting the profits, and our country gets almost nothing.

“New findings and analysis by Global Witness put the value of Myanmar’s jade production as high as $31 billion in 2014 alone. But little or none of that comes back to the government. The government needs to look into the operations of the entrepreneurs and the smuggling. There are so-called ethnic entrepreneurs who are working for the benefit of rich Chinese people, who form the majority of people in the jade industry. The information they assemble should be taken into account when they issue mining permits.”

Mandalay’s Mahar Aung Myay Kyauk Wine is Myanmar’s principal jade market. It has been very quiet for the past two or three years. Chinese customers, who used to dominate its halls, no longer come in great numbers, and the quality and quantity of jade available for them to buy have declined, say traders.

To improve access to the larger international market, and to reduce dependence on the Chinese market alone, the commerce ministry’s Trade Promotion Department is preparing to include the jade and gemstones sector in the National Export Strategy. It is not yet clear how far the recent promise by US President Barack Obama to remove remaining sanctions on Myanmar and its gems trade will help in this regard. “Gems and jade were smuggled into China under the last government, and they are still being smuggled under this government,” said trader U Myo Zaw.

Improved management and government supervision, a crackdown on cross-border smuggling, tighter safety laws, and more effective collection of taxes will be needed if the jade industry is to be tamed and its revenues put to use by the state.

This will require, at the very least, an end to armed conflict in Kachin State and the imposition of the rule of law. In its dealings with the Kachin Independence Organisation and its armed wing, the Kachin Independence Army, as well as in its handling of the government’s own armed forces, the government will have to get to grips with these problems.

Intensive negotiations over state regulation to improve security and tax collection will have to go hand in hand. And finally, economic and social development, fuelled by both foreign direct investment and the taxes to be derived from the jade mines, will have to be stimulated in the states and regions that are home to the army of scavengers, to enable them to find safer and better-paying work back home.

It’s going to take a lot of time and effort to escape the curse of jade.


Translation by Khine Thazin Han, Win Thaw Tar, San Layy and Emoon