Last Updated: Wednesday, 17 December 2014, 20:05 GMT

Burma's gem trade and human rights abuses

Publisher Human Rights Watch
Publication Date 11 January 2008
Cite as Human Rights Watch, Burma's gem trade and human rights abuses, 11 January 2008, available at: http://www.refworld.org/docid/47a833ff14.html [accessed 17 December 2014]
DisclaimerThis is not a UNHCR publication. UNHCR is not responsible for, nor does it necessarily endorse, its content. Any views expressed are solely those of the author or publisher and do not necessarily reflect those of UNHCR, the United Nations or its Member States.

Burma produces the vast majority of high-quality rubies on the world market. According to industry estimates, the country accounts for more than 90 percent of the trade by value. It is also the top global producer of jade.

The official trade in Burma's gems was valued at US$297 million in fiscal year 2006-2007, according to reports citing customs figures. This figure represented an increase of nearly 45 percent over the previous year's gem earnings.

Burma's gem mines are ruled with an iron hand by military authorities and mining companies. Deplorable conditions at the mines reportedly include rampant land confiscation, extortion, forced labor, child labor, environmental pollution and unsafe working conditions for miners. HIV/AIDS, drug-resistant malaria and tuberculosis are increasingly common in mining areas.

The country's gem industry is dominated by the Burmese military, which benefits financially from exports.

The military-owned Union of Myanmar Economic Holdings Company (UMEH) operates as a conglomerate that owns many businesses in Burma, including in the lucrative gem-mining sector.

Official auctions and military sales of the most valuable gems account for the major portion of Burma's gem trade. In addition, there is also some cross-border smuggling of gems, particularly into Thailand.

Burmese officials have long acknowledged that gem auctions raise much-needed hard currency. The increased frequency of gem auctions alongside an apparent reduction in sales revenue seems to indicate that international sanctions on the gem industry are having an impact.

Sanctions

Human Rights Watch has called on governments to adopt strict sanctions on Burma's gem trade and urged traders to stop buying gems from Burma.

European Union leaders in October voted to outlaw any trade with select industries in Burma, including the mining sector. The EU ban, which specifically prohibited the import of precious and semi-precious stones, went into effect in November.

In December, both houses of the US Congress approved legislation to tighten an existing ban on importing Burmese gems to the United States via third countries. President George W. Bush is expected to approve the legislation when it is forwarded for his signature. First Lady Laura Bush has been a strong critic of the trade in Burmese gems.

Also in December, the Canadian government adopted new sanctions on Burma that, among other measures, block all imports of Burmese origin.

Industry Boycott

Since a brutal government crackdown on protesting monks, democracy activists and ordinary citizens across Burma began in August 2007, a growing number of Western jewelers have declared that they will not purchase gemstones of Burmese origin.

A few jewelry retailers, notably Tiffany & Co. and Leber Jewelers, have long refused to purchase gems of Burmese origin. In reaction to the bloody crackdown in Burma, several European and US jewelry companies – including Bulgari and Cartier – also have voluntarily pledged to boycott Burmese gems.

In October 2007, the Jewelers of America, an industry association, issued an unprecedented call to US Congress to fully ban Burmese gems, and encouraged its 11,000 members to halt purchases of these gems until democratic reforms are under way. Other industry associations – one in Canada, a second association in the United States, and an international jewelers' confederation – also have supported similar moves.

Impact on Gem Trade

There are signs that international pressure has dampened the trade in Burma's gems.

The upcoming gem auction by the Union of Myanmar Economic Holdings Company comes on the heels of the Myanmar Gems Emporium held in November 2007. Sales at that event did not meet expectations.

An unnamed official from the state-run Myanmar Gems Enterprise, which organized the November auction, told reporters that total sales were more than 100 million euros (approximately US$150 million). That is less than half of the US$300 million the company had said it had hoped to earn. It is also far below the company's most conservative earnings estimate for that gem auction, of US$230 million.

About two-thirds of the gems on offer (65 percent) were sold at the November auction, according to Human Rights Watch's calculations from figures published in the official government newspaper, the New Light of Myanmar. This represents an 8 percent decrease on sales from the previous gem auction in July 2007.

The decline in sales may reflect voluntary boycotts and moves to adopt new sanctions in Europe and the United States. By closing off markets and reducing overall demand, such moves are believed to have lowered the short-term market value of Burmese gems, especially rubies. Some traders in Thailand have told reporters that they are holding off on purchases of such gems because they lack confidence that they will be able to resell them at a good price.

Europe and the United States have historically been the main markets for rubies, whereas the bulk of Burmese jade is sold in China, where prices remain strong. Chinese demand for jade is particularly high; it is expected to be popular for use in jewelry and other retail items commemorating the 2008 Beijing Olympics.

Approximately 3,600 gem merchants participated in the November auction, as compared to some 4,000 traders who attended in July. The number of foreign traders participating was essentially unchanged: nearly 2,300 in November, as compared to 2,200 in July. Merchants from China, including Hong Kong, reportedly accounted for nearly 90 percent of the foreign buyers at the November auction.

Recommendations

Human Rights Watch urges the adoption and strict implementation of targeted international sanctions on Burma, such as on industries and businesses that substantially benefit Burma's military. This includes companies owned by the Burmese military through the Union of Myanmar Economic Holdings Company or a second military conglomerate, Myanmar Economic Corporation.

In the absence of sanctions approved by the United Nations Security Council, Human Rights Watch is calling on all governments to act to block the international trade in Burmese gems. Australia, Canada, the European Union and the United States have all adopted some sanctions on Burma because of the government's poor human rights record.

China, Thailand and other countries that import Burmese gems have not imposed any such measures. Many of these gems, however – especially those sold to Thai traders – are ultimately intended for use in jewelry sold to consumers in other parts of the world.

Human Rights Watch calls for a consumer and industry boycott of Burma's gem industry. A sustained boycott will lower overall demand for products made with Burmese gems and put downward pressure on prices. The resulting reductions in profits earned by the country's military would complement existing sanctions by putting added pressure on the Burmese government to respect human rights.



Related Material

Crackdown in Burma: Targeted Sanctions Needed
Background Briefing, January 11, 2008

Crackdown: Repression of the 2007 Popular Protests in Burma
Report, December 7, 2007

Burma: Targeted Sanctions Needed on Petroleum Industry
Press Release, November 19, 2007

Burma: Gem Trade Bolsters Military Regime, Fuels Atrocities
Press Release, November 12, 2007

Letter to Chinese President Hu Jintao on Burma
Letter, October 17, 2007

Burma: Foreign Investment Finances Regime
Press Release, October 2, 2007

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