16 December 2020

Australia’s sovereign wealth fund, the Future Fund, is investing taxpayer money in an Adani Group company that is funding critical aspects of the controversial Carmichael Coal Project and holds business ties to the Myanmar military.

Rohingya community, human rights and environmental groups are calling on the Future Fund, to divest its equity holdings from Adani Ports and Special Economic Zone, because of critical environmental, social and corporate governance failings of the company in Myanmar and Australia.

In January 2019 Adani Ports entered into a commercial relationship with Myanmar Economic Corporation (MEC), a Myanmar military holding company, to build an international port in Yangon on military-owned land.

Adani Ports’ business with the Myanmar military, in disregard of human rights, follows its recently revealed direct role in the Carmichael coal project in Australia, which is a major threat to the environment and Traditional Owners of the land, the Wangan and Jagalingou people. Adani Ports has recently established the subsidiary Bowen Rail Company to transport coal from the Carmichael mine.

The groups submitted a Freedom of Information request to the Future Fund, to disclose any holdings it has in Adani Ports and Special Economic Zone Ltd. The Future Fund disclosed AUD$3.2 million in equity holdings, invested despite the company’s widely known and heavily criticised environmental and human rights record.

In August 2019 UN Human Rights Council’s Fact-Finding Mission on Myanmar warned that companies involved with the MEC risked being complicit in funding the financial operations of the Myanmar military and urged companies to sever ties.

Mohammad Junaid from the Burmese Rohingya Community in Australia said: “It is shocking to the Rohingya people that Australia’s Future Fund has invested in a company that is doing business with the Myanmar military. The UN has condemned foreign companies profiting at our expense.

“The Future Fund must divest from Adani and any other business linked to the Myanmar military. Adani’s investors must also cut ties with them. Our message to businesses is simple, stop funding the pockets of the military which has allowed them to commit genocide against my people.”

Pablo Brait, campaigner with Market Forces said: “The Future Fund should be investing in the companies building our future, not those that are destroying it. Adani Ports’ role in the Carmichael coal project – a project that will fuel the climate crisis and the extreme weather that it is causing – shows it is a terrible investment for the Future Fund to be making with our money. It is clear that Adani Ports has a very concerning environmental, social and governance risk profile beyond its role in climate-wrecking coal.

“Investors such as Allianz, Deutsche Bank and Barclays have ruled out support for Adani’s Carmichael coal project but they continue to invest in and provide financial services for Adani Ports which recently established the Carmichael rail services company, the Bowen Rail Company. If these investors are serious about not funding Adani’s coal they should divest from Adani Ports and cease all debt-raising activity on its behalf.”

Member of the UN Fact-Finding Mission on Myanmar, Australian lawyer, Chris Sidoti said: “Adani is in bed with the Myanmar military and now it seems the Future Fund is in bed with Adani.

“Australia’s sovereign wealth fund should follow the lead of similar funds in other countries and of increasing numbers of pension funds, moving towards disinvesting from companies in league with Myanmar’s murderous military.

“We should be uncompromising in dealing with war criminals, whether they are here or in other countries. When we know, we have no excuses.”

Rawan Arraf, Director of the Australian Centre for International Justice said: “Despite United Nations condemnation of Adani Ports’ business ties with the Myanmar military, the Australian government is investing in Adani Ports. The Future Fund is at risk of contributing taxpayer money to the financing of Myanmar military activities through its investment in Adani Ports.

“The Future Fund must immediately divest from Adani Ports. Adani Ports is doing business with those who stand accused of genocide and crimes against humanity. This not only shows the failures of Adani’s environmental and social governance, it is also an appalling commercial decision.

“Adani has ignored UN warnings that its business is helping line the pockets of the military and to sever its ties immediately. Adani’s continued relationship with the Myanmar military is ethically untenable and economically problematic for their investors.”

Media contact:

Australian Centre for International Justice: Rawan Arraf, 0450 708 870
Stop Adani Campaign: Adam Black, 0415 382 598

Read the ACIJ and BRCA’s letter to the Future Fund, and the FOI request and release here.

Background on Adani Ports SEZ and Carmichael coal: 

  • Several large global financial institutions who have given commitments not to fund Adani’s Carmichael coal are invested in Adani Ports SEZ, which is playing a key role in the Carmichael coal project through the Bowen Rail Company.
  • Adani Ports SEZ’s largest bondholder is Allianz, through its subsidiary Pimco. Allianz has previously ruled out funding and insuring Adani’s Carmichael coal project and has a coal exclusion policy. Allianz’ holdings in Adani Ports directly links them to the Carmichael project, exposing them to renewed pressure from climate groups. Stop Adani is pressuring investors in Adani Ports SEZ because any investment in Adani Ports SEZ could be supporting Adani’s Carmichael coal project.

Background on Myanmar military conflict and UN Fact Finding Mission

  • The Rohingya people and other ethnic and religious minorities in Myanmar have been subjected to decades of persecution and violence at the hands of Myanmar military (Tatmadaw), and it is being investigated for gross human rights violations which include mass killings of civilians, widespread and systematic torture, rape and other forms sexual violence, including against children, torching of whole villages and forced mass displacement. In many instances, these violations amount to war crimes, crimes against humanity and genocide.
  • In January 2019 Adani Ports entered into a commercial relationship with Myanmar Economic Corporation (MEC), a Myanmar military holding company, to build an international port in Yangon on military-owned land. Adani Ports entered into a lease with MEC for 50 years for an investment of USD $290 million for the construction of Ahlone International Port Terminal 2. The Myanmar military owns four commercial ports in Yangon that are currently operational. The first phase of Adani’s port is scheduled for completion in 2021.
  • In August 2019, the UN Human Rights Council’s Fact-Finding Mission on Myanmar (FFM) released a report detailing the economic interests of the Myanmar military.
  • The report exposed the Tatmadaw’s business ties and called for financial isolation of the Tatmadaw, targeted sanctions and arms embargoes.
  • The Adani Group’s Adani Ports SEZ was one of approximately 58 foreign corporations identified by the FFM which entered into or maintained commercial ties with either of the Tatmadaw’s two military conglomerates, or their subsidiaries.
  • The FFM warned that companies involved with the Tatmadaw and its conglomerates, including MEC, should sever their relationships in order to fulfil their corporate responsibility to respect human rights or risk finding themselves complicit in contributing to the resources available to the Myanmar military’s involvement in atrocity crimes.
  • The FFM stating further that: “Those in commercial relationships with MEHL or MEC may find themselves complicit, in law, fact or the eyes of the broader public, in contributing to the resources available to the Tatmadaw to continue its involvement in gross violations of international human rights law and serious violations of international humanitarian law. This report puts companies on further and effective notice of the human rights implications that arise from maintaining business connections with the Tatmadaw.”
  • In relation to investors and business, the FFM stated: “No business enterprise active in Myanmar or trading with or investing in businesses in Myanmar should enter into or remain in a business relationship of any kind with the security forces of Myanmar, in particular the Tatmadaw, or any enterprise owned or controlled by them (including subsidiaries) or their individual members, until and unless they are re-structured and transformed.”
  • In October 2020 it was announced that global shipping giant, Maersk, will end its use of the military-owned ports in Myanmar, leaving Adani Ports, currently constructing a new military-owned port in Yangon, in serious commercial trouble, as shipping companies are under increasing pressure to end business with Myanmar’s military-owned ports. Adani Ports SEZ has been taking on debt from international banks including US, UK, Germany and Japan to finance projects including in Myanmar.