Big-name milk formula brands continue to flout Myanmar law

Big-name milk formula brands continue to flout Myanmar law

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By Victoria Bruce   |   Tuesday, 20 October 2015

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Some of the world’s largest infant formula companies continue to defy Myanmar law, despite being given a grace period of over 14 months to comply with a 2014 law regulating the industry.

Big-name brands including Nestle, Abbott, Wyeth and Dumex are among the top offenders, continuing to supply products with incorrect labelling, according to international NGO Save the Children, which says many formula manufacturers and distributors are violating Myanmar law.

Myanmar introduced the “Order of Marketing of Forumlated Food for Infant and Young Child”, a code adopted from the World Health Organization’s International Code of Marketing Breast Milk Substitutes, into its National Food Law on July 24, 2014.

It is aimed at regulating the sale and promotion of infant formula andpromoting the importance of exclusive breastfeeding until a child is at least six months old.

Companies were also required to translate their formula labels into the Myanmar language before an October 17 deadline.

However, a lack of government enforcement means milk formula companies are getting away with breaking the law, and incorrectly labelled product continues to line the shelves of Myanmar’s major supermarket chains.

“Many companies claim to abide by the Code for public image, even though they do not, as shown in many violations committed,” Constance Ching from advocacy group International Baby Food Action Network (IBFAN) wrote in an email.

Jennifer Cashin, a consultant for Save the Children in Yangon, said there’s no question that manufacturers know they are breaking the rules. “They are complicit in, or are actually taking lead in, breaking the law, which they do in many countries around the world,” she said.

Civil society groups and NGOs, with support from IBFAN, are working together to compile lists of labelling violations and to train healthcare workers on how to monitor the international Code.

However Ms Cashin said more information on the new regulations needs to be provided to local distribution networks, such as importers, distributors and shopkeepers.

“It’s very important to get the word out and raise awareness of what is a violation, particularly in product labelling,” she said.

She said the most common labelling violations include promoting a product with health claims, or pictures of infants, and using labels that are not in Myanmar language.

Companies are not allowed to advertise or promote their products to the public. Gifts to mothers or healthcare workers are also forbidden under the Myanmar Order. All products must also have adequate labelling stating the superiority of breastfeeding.

Several manufacturers have taken steps to comply with the Myanmar code and translate labelling information into the local language, but Save the Children collected many examples of violations during its pilot Code monitoring program, said the NGO’s spokesperson for the Code, U Swe Lin Maung.

He added that the government response to enforcing the new regulations has been slow, but civil society groups and NGOs are gearing up for more monitoring activities.

An official from the Ministry of Public Health who asked not to be named said departments responsible for enforcing the regulations was struggling to find staff, but that the government would start its enforcement program from October 17.

U Tun Zaw from the Food and Drug Administration’s (FDA) Safety Department said the two departments responsible for enforcing the rules are the Ministry of Public Health’s National Nutrition Centre, which will monitor and enforce the promotion of infant formula in healthcare facilities, and the FDA, which will monitor and enforce labelling for new imports.

However, there are estimated to be tens of thousands of incorrectly labelled infant formula products in the market.

These are still available on the shelves of major supermarket chains such as City Mart, Ocean and Capital Hypermarket and it is unclear whether the government will request distributors to replace these products with ones that adhere to labelling regulations.

Martin Hoelscher, general manager for Danone which owns popular Malaysia brand Dumex, told The Myanmar Times that Dumex had taken all necessary steps to comply with the Myanmar law, however incorrectly labelled stock was still in circulation.

“We estimate that more than 80 percent of our impacted products now on shelf are already in the new labelling,” Mr Hoelscher wrote in an email, declining to comment on what steps the company was taking to ensure existing stock complied with the new regulations.

U Tun Zaw agreed that existing product in the market remains a grey spot and said his department would be collecting data on brands and the exact amount of product, before enforcing any penalty.

“Distributors are concerned about economic impact but overall they say they are willing to comply with our new law,” U Tun Zaw says, adding that many distributors reported difficulties negotiating with the manufacturers.

He said a workshop would be held with the Ministry of Commerce, the FDA, the Ministry of Public Health and distributors to discuss penalties for companies who continued to violate the regulations.

Multinational Nestle entered the Myanmar market in 2012, and said that it was in discussions with the Ministry of Health and the FDA, and had obtained clarifications on the local code, with other member companies of the Asia-Pacific Infant and Young Child Nutrition Association (APIYCNA).

“Dialogue has begun through APIYCNA/members of APIYCNA [with] business in Myanmar,” David Pettinari, country manager of Nestle Myanmar, wrote in an email.

While many companies claim to abide by the international Code, the evidence of violations recorded by Code monitoring groups speaks for itself, said Ms Ching from IBFAN.

“The Code’s purpose is to protect infant and young child health, while companies’ sole purpose is to make profit. Protecting and promoting breastfeeding has an impact on product sales and the bottom line of profit, therefore there is an inherent and blatant conflict of interest,” she wrote in an email.

When questioned about products that were red-flagged in Save the Children’s report, and whether Nestle would recall these from the local market, Mr Pettinari insisted Nestle Myanmar’s infant formula products comply with Myanmar’s new regulations. “Following the implementation of the Local Code in 2014, all our labels were aligned to ensure compliance,” he wrote in an email.

“Our teams spend considerable time training and explaining our to distribution partners and sales force the importance of being fully compliant with the local code, while labelling of products is implemented by Nestle Myanmar,” he added.

According to IBFAN, infants who are breastfed have less risk of contracting ear and respiratory infections, diarrhoea, meningitis and allergies due to the antibodies passed from a mother’s breast milk to her baby.

Mothers who breastfeed also have reduced risk of type 2 diabetes, breast cancer, obesity, ovarian cancer, post-partum depression and bladder infections.

Ms Cashin said that while Myanmar has a strong breastfeeding culture, existing data showed rates of exclusive breastfeeding are low and mothers often experienced pressure from family members to supplement breastfeeding with “something extra” to increase the baby’s weight.

“If you are living in an urban area and are bombarded with messages about how a product will make your baby fat and smart and see better, that’s going to look like a really good option,” Ms Cashin said.

Without proper enforcement, experts believe the combination of a poorly regulated and expanding infant formula industry, lack of public health information, and unethical marketing practices by formula companies could have a detrimental effect on Myanmar’s breastfeeding culture and create serious health risks for Myanmar’s children.

Article first published in the Myanmar Times, Wednesday 04 October, 2015

Community engagement key to business success in Myanmar

Community engagement key to business success in Myanmar

By Victoria Bruce

Senior Reporter, M-ZINE+

Engaging local communities and ensuring international standard corporate social responsibility (CSR) practices will be key to the success of petroleum projects in Myanmar, says a leading civil society organization.

Image courtesy of Myanmar cartoonist "Lailone"

For many IOCs, this is the first time they’ve set foot in post-sanction Myanmar and while most are no stranger to emerging markets, building a successful business in the long-isolated Southeast Asian nation comes with its own set of risks and challenges.

For David Allan, co-founder of civil society organization Spectrum, this doesn’t refer to the geological challenges of petroleum exploration, but treading carefully in a country that’s still transforming from a military dictatorship to a fledgling democracy and is still marred by reports of human rights abuses.

“A great deal of care needed in the areas of land and livelihood and it’s going to take time to do that,” says the former chemical engineer.

“A tripartite dialogue improvement between government, business and the public offers improved communication, understanding and many opportunities to facilitate further national development,” he says.

 On a global scale, the extractive industries are risky business in terms of human rights abuses, and Myanmar is no different.

Professor John Ruggie, UN Special Representative on human rights and transnational corporations (TNCs), notes “the extractive sector is unique because no other sector has as enormous and as intrusive a social and environmental footprint.”

“The extractive industries also account for most allegations of the worst abuses, up to and including complicity in crimes against humanity.”

“These are typically for acts committed by public and private security forces protecting company assets and property; large-scale corruption; violations of labour rights; and a broad array of abuses in relation to local communities, especially indigenous people,” Professor Ruggie says.

In Myanmar’s case, one landmark example is the Doe v Unocal trial, where villagers sued the firm for complicity in forced labor, rape, and murder committed by the Myanmar military, which was contracted to provide security for a pipeline project, according to EarthRights International (ERI). 

In March of 2005, Unocal agreed to compensate the plaintiffs in a historic settlement that ended the lawsuit. Shortly thereafter, Unocal was acquired by Chevron, which has a 28.25 per cent stake in the Yadana gas field operated by France’s Total. 

Image: "Lailone"

More recently, the massive Shwe Gas Project, a 2,800 kilometre pipeline carrying natural gas from Myanmar’s Shwe field to China, has come under fire for disrupting traditional fishing and farming lands without providing adequate financial compensation for affected villagers, says the Shwe Gas Movement (SGM), a community based organization.

 “The majority of people in Arakan State (Western Myanmar) rely heavily on both fishing and farming to gain income and sustain their families. Both these industries are now being destroyed, leaving residents jobless and without income,” SGM states in its 2011 report, titled Sold Out.

 “There’s a very significant and growing history of social license issues in Myanmar,” Mr Allan says, pointing to recent examples where communities have lobbied against projects, such as President Thein Sein’s call to suspend the controversial Myitsone Dam project as a result of public concern, the suspension of a mega coal-fired power station in Dawei and the recent unrest over the Lapundaung Copper project.

“If they (IOCs) don’t operate in a way that’s considered satisfactory then they’re going to lose the public social license to operate and will be significantly impacted as a result of that,” Mr Allan says.

 

Photo: Courtesy of Spectrum

In post-regime Myanmar, ensuring the approval of community stakeholders, or social license to operate, could make it or break it for new operators.

So what can companies do to minimize reputational risk and maximize community acceptance?

In absence of existing comprehensive legal framework, Mr Allan says firms can follow many international best practice principles – particularly John Ruggie’s Guiding Principles of Business and Human Rights which outline how countries and businesses can better manage business and human rights challenges.

“Companies would be well advised to look carefully at what they need to do to operate successfully in Myanmar,” Mr Allan says, adding “just following current regulations isn’t going to be good enough.”

He says ensuring community participation and consent in the processes of decision making would overcome many of the issues currently resulting from the operation of extractive projects.

 “There needs to be attention to land, livelihood, environmental, gender, cultural heritage, benefit sharing, safety, community harm and community protection issues, as these are considered particularly important,” Mr Allan says.

 As Myanmar slowly emerges from the shadow of a former military regime and begins the slow transition towards democracy, it’s clear that not only policies, but people’s mindsets, need to reform and modernize.

“After decades of isolation, there are gaps between those in the government who are advocating reform policies and those at local level who are trying to implement those policies without much guidance on how to do it, or much experience on what best practice operation looks like,” Mr Allan says.

Image: "Lailone"

He says this could involve local authorities or contractors, and a particular red flag applies to local security firms, partly due to the lack of appropriate models to follow and adequate training on internationally acceptable procedures.

One way operators can make inroads with local communities is by offering training and employment opportunities and ensuring community involvement.

“Anything that brings in external labour when there could be use of local labour will not be received well by these communities, which would very much like to have better employment options,” Mr Allan says.

“It’s important for operators to not impose on, but involve communities. Very few are thinking about this. Many are thinking, how do we get the project to go ahead, rather than thinking about it from a community stakeholder perspective,” he says.

By engaging local business, foreign firms can help build capacity and transfer essential skills, as well as provide education on international best practice and CSR strategies.

There’s a long way to go before local understanding is in line international practices, and Myanmar businesses trade the model of corporate philanthropy for more holistic CSR practices.

 

Image: "Lailone"

“There are many in Myanmar who think CSR, instead of being an all-encompassing model for shared value for business as it’s viewed internationally, interpret it as a corporate philanthropy model where a company gives to a local area or monastery,” Mr Allen says.

“There’s quite a difference between the model of business creating shared value for everybody and the model of corporate philanthropy.”

As Myanmar continues to open up its petroleum blocks to international investors, the nation’s coffers are set to swell with oil and gas revenues, meaning measures need to be put in place to ensure revenue transparency and government spending.

Last year, the Myanmar government announced plans to voluntarily sign up to the Extractive Industries Transparency Initiative (EITI) and a task force consisting of key government officials was established in December. The purpose of the EITI process is to track revenue flows and in-kind contributions between companies and the government, with the intention of ensuring extractive industry revenues reach the national budget and can then be used as part of an overall government development package.

Image: "Lailone"

If done well, unlocking the wealth of Myanmar natural petroleum resources could prove essential to the impoverished country’s growth, and the influx of foreign firms could boost the industry by bring international best practice guidelines and creating much needed local job opportunities.

For Mr Allan, the message is clear – as in any developing country, tread lightly, engage local communities and when in doubt, adhere to international best practice guidelines.

“Many large operators have well developed models how to cover all aspects of due diligence and operating rules and they need to apply it here just as they would in any other complex operating environment,” he says.

“The guidelines that exist internationally apply in Myanmar just as they would anywhere else. And the pitfalls also exist – if you cut corners then there’s likely to be a consequence for that.”

  This article first appeared in Issue 14, Vol 2 of M-ZINE+ business magazine on April 4, 2013

Underwater adventures... Malaysia's Allied Marine & Equipment take a look at sub-sea Myanmar

Underwater Adventures... AME takes a fresh look at sub-sea Myanmar

By Victoria Bruce

From the docks of old London town to the seas off southern Myanmar, Mark Shepherd’s underwater adventures have taken him around the world.

The British-born commercial diver is the managing director of Allied Marine & Equipment (Thailand), a wholly owned company of SapuraKencana Petroleum Berhad and the Thai operating arm of Allied Marine & Equipment Sdn., Bhd., a Malaysian firm specializing in underwater diving surfaces for the oil and gas industry and part of the giant SapuraKencana oilfield services family.

The company is poised to make its first Myanmar play and is eying off the underwater opportunities in the country’s burgeoning petroleum industry, Mr Shepherd told M-ZINE+ Senior Reporter Victoria Bruce.

 “There are rumours of other large multinationals coming into Myanmar soon and it’s no secret that companies here are looking to expand their operations,” he said.

While Myanmar currently offers a fraction of the work AME picks up in Malaysia and elsewhere in the region, Mr Shepherd says that will increase once the country opens up its offshore and deepwater blocks.

Underwater adventures... Photo: AME

“The amount of work available in Myanmar at present is probably about 10 per cent of the work available in Malaysia however it’s obviously not going to remain that way,” he says.

“There’s going to be significant growth in coming years and the people that get in early are likely to do well.”

At this time, AME feels it has some key advantages over its competitors and Mr Shepherd hopes AME will become Myanmar’s service provider of choice in the niche underwater area of inspection, maintenance and repair of offshore structures and pipelines with their teams of divers and remotely operated vehicles (ROVs).

For AME, Myanmar offers another major advantage – its geographical location means that weather offshore is favorable during the lengthy northeast monsoon season between November and March that often makes subsea work difficult or impossible in other areas of the region.

Myanmar is the geographical opposite of Thailand, Malaysia, Indonesia and Vietnam, where 90 per cent of work is carried out between March and November, when the weather is favourable, Mr Shepherd says.

“For our work we need relatively calm seas and good weather otherwise it’s very dangerous to take people and equipment in and out of the water.”

The diving season here is November through until March so it gives you a chance to increase utilization and assets and maintain at least some work during what is normally a very quiet period for us,” he says.

Calm seas essential for smooth operations... Photo: AME

 So monsoon season in other parts of the region means its perfect time to dive in Myanmar, and for a subsea company like AME this means people and assets that would otherwise be sitting idle are kept in operation.

Mr Shepherd’s underwater career began as a scuba diving hobby at age 18 and has taken him to depth of the North Sea, which he says was “cold and boring” to the pristine waters off Myanmar’s coasts, which he tips to be amongst the clearest in the world.

Starting out his Asian play on a cable ship laying telephone cables around the Gulf of Thailand in 1992, Mr Shepherd later ended up running the operations in a Thai based company as a member of a small management team, turning it into a multimillion dollar public company.

He’s now been with the SapuraKencana Group for two years and heads up AME’s Bangkok base.

While the majority of their subsea contracts are in the Thai and Malaysian market, AME’s Myanmar play follows the flow of international operators with a rising interest in the Southeast Asian nation.

As an assets-based company, reliant on good weather conditions and the number and size of contracts, Mr Shepherd says AME has no plans to set up a permanent base in Myanmar just yet.

 “It’s difficult for a niche business like ours to have a permanent establishment here,” he says. It is more advantageous, at present, to have representative through an agreement.

“The opportunity became apparent when Cranes and Equipment Asia (CEA) decided to open shop here because we had people we knew and trusted on our behalf to be here full time, so we can provide our services without carrying the costs which inevitably would be passed on to the client.”

Like many in the global oil and gas community, he’s also waiting for Myanmar to offer up more offshore and deep water blocks because once operators come in, the demand for subsea services like AME’s will rise.

A whole new world... a diver tends underwater infrastructure. Photo: AME

 “Pretty much everything you do above surface, you have to do underwater at some time or another,” Mr Shepherd says. “Basically there’s an entire infrastructure on the sea bed, often out of the range of divers, that you can’t get down and put a spanner on by hand, so many systems are now being designed for operation by ROV,” he says.

And as operators explore record deep water depth, a new breed of diver has emerged – the electronic highly technical ROVs, some costing in excess of US$6 million and capable of reaching depth of 3 ~ 4,000 metres.

“It’s not economically feasible or pratically possible to carry out man diving operations deeper than around 300 metres,” Mr Shepherd says.

“Once you’ve hit that 300 metre work then everything has to be done by remotely operated vehicles.”

And at the bottom of Myanmar’s deep water basins, a growing complex infrastructure is being built to funnel hydrocarbons from production sites to onshore facilities and beyond, and Mr Shepherd hopes AME’s diving and ROV teams will be down there with it.

ENDS