Myanmar
Contributing law firm: Allen & Gledhill (Myanmar) Co., Ltd.
Contact: Minn Naing Oo, Managing Director
Aye Chan Aung, Senior Associate
Please click on the podcast above for a snapshot of the three key themes of ESG reporting, transition planning and greenwashing risks in respect of Myanmar. Scroll down for further information on each key theme.
A. ESG Reporting
Yes.
ESG disclosure requirements primarily apply to companies (i) which possess investment permits / endorsements issued by the Myanmar Investment Commission and are considered to have “a large potential impact on the environment and the local community”; and/or (ii) whose business activities are subject to environmental impact assessments / initial environmental examinations (together, the In-Scope Companies). The requirements include:
(a) The Myanmar Investment Law and the Myanmar Investment Rules (Investment Laws), which require companies subject to environmental and social impact assessments to report their compliance status on a regular basis. Furthermore, such companies are required to submit a compliance report within 3 months after the end of each financial year in the prescribed form to the Myanmar Investment Commission to report on the impact of the approved investments on the environment and local community.
(b) The Environmental Conservation Law and its subordinate legislation, being the Environmental Conservation Rules and the Environment Impact Assessment Procedures (Environmental Conservation Laws), which prescribe the types of business activities subject to prior environmental assessments and set out disclosure requirements for such businesses, including the disclosure of the initial environmental reports and continuous reporting obligations.
Companies listed on the Yangon Stock Exchange (YSX) and public companies having more than 100 shareholders are required to submit a directors’ report annually to the Securities and Exchange Commission (SEC) and the Directorate of Investment and Company Administration (DICA). The directors’ report shall disclose all risks and uncertainties faced by the company, although no specific references to environmental related matters are mentioned under the law for making such disclosures. Furthermore, such companies are subject to continuous disclosure requirements to report to the SEC and DICA on any material changes in a timely manner.
As part of Myanmar’s response to the Extractive Industries Transparency Initiative, all companies incorporated in Myanmar are required to disclose beneficial owners and whether they are related to any politically exposed person.
The disclosure requirements specified in section A.2 above are mandatory.
For In-scope Companies, the focus is on environmental and social aspects.
For financial institutions, the additional focus is on anti-money laundering and anti-bribery.
The disclosure requirements for In-Scope Companies are not generally based on international standards.
The disclosure requirements relating to beneficial ownership and politically exposed person replicate the corresponding concepts in the Extractive Industries Transparency Initiative Standard 2019.
The disclosure requirements for In-Scope Companies adopt a double materiality approach whereas a single materiality approach applies to YSX-listed companies and financial institutions.
No.
No. Though on a related point, where the Ministry of Natural Resources and Environmental Conservation identifies non-compliance with environmental rules by an investor, it has the authority to engage a third-party expert to assess the investor’s compliance status.
No, but a YSX-listed company has been making voluntary disclosure of their sustainability practices and initiatives.
No.
No.
We are not aware of any recent development in ESG reporting requirements.
B. Transition Planning
Yes - the Myanmar Climate Change Policy formulated by the former government in 2019 mandates the implementation of the Myanmar Climate Strategy (2018-2030), which contains strategies relating to achieving climate resilient and low-carbon energy, transport and industrial systems that support inclusive and sustainable development and economic growth.
No.
No.
No.
We are not aware of any recent development in this regard.
C. Greenwashing Risks
No. We are not aware of any such legal action taken by the relevant regulators or other stakeholders such as investors within the past five years, based on publicly available information.
No. However, the applicable laws (as mentioned in section A.1 above) carry penalties for non-compliance, including fines, regulatory penalties (e.g., revocation of licences) and criminal liabilities.
Likely grounds include:
(a) disclosure liabilities under investment laws, securities laws and regulations, e.g. providing materially false or misleading information in listing documents or other corporate disclosure documents such as ESG compliance reports/information;
(b) breaches of directors’ duties; and
(c) claims in tort for misrepresentation.
We are not aware of any recent developments in this regard.
This material is provided for general information only.
It does not constitute legal or other professional advice.