Shareholders Urge POSCO to Sever Ties
South Korean companies’ business ties with the military of Myanmar are being increasingly condemned along with the military. Especially, even shareholders, not to mention human rights groups, are urging POSCO to sever its relationship with the Myanmar military.
Dutch pension fund APG, one of the shareholders, made the demand via the Financial Times on April 5. “Last month, Japanese beverage company Kirin Holdings stopped its joint business with the military’s Myanma Economic Holdings Limited,” APG said, urging POSCO to take the same step.
POSCO International and Myanma Oil and Gas Enterprise have developed offshore gas fields together in Myanmar since 2000 and the natural gas have been sold to China, Myanmar and other countries. In addition, POSCO C&C and MEHL set up Myanmar POSCO C&C as a joint venture in 2013 and MEHL currently has 30 percent of the steel sheet company.
On March 22, human rights group Justice for Myanmar exposed MEHL’s international business relations to denounce POSCO. At that time, JFM pointed out that 99 international groups and enterprises are related to POSCO and stopping doing business with the South Korean company can be a way to support democracy in Myanmar.
The interim government of Myanmar sent letters last month to POSCO, Total SE and Thai company PTTEP to ask them not to send natural gas proceeds generated in Myanmar to the military. At present, about 300 South Korean companies are doing business in Myanmar and about one-third of them are sewing companies.
POSCO International has stressed since last month that its gas field business partner MOGE has nothing to do with the military. “55 percent of the business proceeds go to the government, the rest go to the project company, and the money is directly deposited into Myanmar's government-run bank,” it explained. POSCO C&C said that the establishment of Myanmar POSCO C&C was legally inevitable at that time. “In this company, we have made no dividend payment at all since 2017,” it said.