Background Briefing on Burma

Special Briefing
Senior Administration Officials
Via Teleconference
Washington, DC
May 17, 2012

MODERATOR: Good afternoon and thanks, everyone, for joining us. As you know, some new measures were announced today in support of Burma’s ongoing democratic reform efforts. And here to talk to us a little bit about what these new actions mean, we have two senior Administration officials. For your own information, they are [names withheld]. Just so you know the ground rules is that they will be referred to as senior Administration officials, and that this call is on background.

So with that out of the way, I’d like to introduce [Senior Administration Official One] to say a few words, and then we’ll open it up to your questions. Go ahead, [Senior Administration Official One].

SENIOR ADMINISTRATION OFFICIAL ONE: Okay. Thank you, [Moderator]. And good afternoon everybody, and thank you for joining.

As you heard from the Secretary this afternoon, we came to a major decision on the future of our policy approach to Burma. I think it’s important, though, as you look at this that you understand the context and the details of what we are doing. It is what I would call a substantial refinement and recalibration of our approach to Burma policy, and it is done in response to a pattern of reform that we have seen, that we continue to be encouraged by. But at the same time, we have no illusions about the continuing challenges inside the country and the continuing issues of core concern to us, as the Secretary also outlined today in her statement.

The decision we came to and the announcement we made, we have put much careful thought into, about how to prudently respond and accommodate our policy to the evolving environment on the ground while at the same time staying true to our longstanding principled approach to promoting reform in Burma.

And I would say there are a few elements here that we need to spotlight. First, the approach here, in essence, is to take the bluntness out of the sanctions that have been there to date. What we are doing is easing on society at large and carefully looking to target what we call the spoilers, the bad actors within the system. In a very carefully considered process in coming weeks, we are going to sharpen, refine the tools we have at our disposal to update the specially designated entities list, the SDN list, to ensure that we are working in and consistent with reform and in partnership with a country in reform, and we are not contributing to a system that we have had concerns – deep concerns – about to date. And that’s going to be a very, very carefully considered process, and we will be working on that in coming weeks and such.

Now secondly, as the Secretary outlined, we are – we believe our companies are really the best models for best practices around the world. And in fact, that gives us an opportunity to lead in a way that is consistent with this partnership and reform mantra that we have. We expect and we are very confident that they can model the behavior we are seeking inside the country, that the people of the country are seeking for themselves, which is transparency, accountability, equity, benefit to the citizens and not simply to the elites and the other, as we would call them, bad actors in the country. And this model behavior, I think, is going to be very, very important going forward, and we will be also, I think, talking a bit more about that in coming weeks and working with companies to act accordingly.

And third, I think it’s very important that folks understand that we will continue to listen to voices, particularly inside the country, but also in our NGO community, in Congress, with whom we’ve had a very deep and productive partnership on this. There are diverse voices with diverse opinions about the way forward, and we were pleased by some of the statements – many statements we’ve seen, bipartisan statements coming out from Capitol Hill today in support of what we’re looking to do, the calibrated approach. And we will continue to consult closely with them and all others who have a deep concern about the future of Burma going forward.

MODERATOR: Great. Well, thank you very much. And now, with that, we’ll turn it over to your questions. Operator?

OPERATOR: Thank you. If you would like to ask a question, please press *1 on your touchtone phone. Please un-mute your phone and record your name and affiliation clearly when prompted. To withdraw your question, press *2. Once again, to ask a question, please press *1 on your touchtone phone and record your name and affiliation.

Our first question comes from Josh Rogin with Foreign Policy. Your line is open.

QUESTION: Thanks very much for taking the time to do the call, and thank you for your service. Can you talk in more detail about what changes you’re making to the sanctions? How did you choose which changes to make? Which changes will affect the oil sector in particular? And what accountability measures will you have in place to measure whether or not these new provisions or changes are being instituted in the way that you want? Thank you.

SENIOR ADMINISTRATION OFFICIAL ONE: Right. Thank you for the question. I want to make sure it’s clear we are not looking at this in terms of sectors. This is countrywide, again, with the notion of targeting, as well carefully targeting bad actors, so it is not based on any particular sector – oil, gas, or otherwise. So we are easing – and some people call it suspending – the restrictions on financial services and investment, new investment, broadly across all the different sectors.

The – we will hold folks accountable and in terms of – and we’re going to look at various mechanisms going forward for ensuring that there is oversight, that there is transparency, and through transparency, accountability for the activities or our companies and those who engage in Burma going forward.

MODERATOR: Great. Thank you. Next question, please.

OPERATOR: Our next question comes from Paul Eckert with Reuters News Agency. Your line is open.

QUESTION: Hi. [Senior Administration Official One’s position withheld.] And thanks for doing this call. I’ve noted that the NGO groups are not entirely positive about this development. I know you talk to them, but one of their concerns is that even though you are pointedly maintaining sanctions on the military elements when it comes to investment, that there’s not anything to stop them from still being the enforcers and conducting warfare on the ethnic areas where a lot of these resource – investment projects might be set up; in other words, that a lot of the pressure that’s happening on – the pressure on the ethnic groups is driven by trade, right now China trade but could also – that future foreign investors could step in in that role. Is there ways you can put a check on that? In other words, the cronies of the militaries are eligible for investment projects and for financial transactions and they rely on the military behind the scenes?

SENIOR ADMINISTRATION OFFICIAL ONE: We are taking a very close look at that. We understand the challenges, and the Secretary laid those out, about the activities on the ground that can create complications for the reform effort. And in fact, we’ll look to ensure that if there are those types of activities, we have an SDN list that will be regularly updated – it’s not simply a one-time thing – that we will continue to refine. We will need, obviously, very good evidence of this type of activity. And if there are people being pushed off their land, if there’s all kinds of activities that clearly run afoul of our values in human rights, that we will ensure that our companies are not enabled to benefit from that.

And in fact, we’re now going to look to local communities, engagement with them, with local NGOs, with international NGOs to get us good information, the best information they can. I think there’s more information we can get as the country starts to open up and as more people go into the country to get greater fidelity and insight into these types of activities. And we will do everything possible, and I think we can be successful in ensuring that there are no benefits to these people through this new policy.


MODERATOR: Thank you. Ready for the next question.

OPERATOR: Our next question comes from William Wan with The Washington Post. Your line is open.

QUESTION: Hey, thanks for doing this. My key question is just why there aren’t any kind of codified regulations on companies. From what the Secretary was saying, it sounded like it was just – that they were encouraging good corporate governance, that kind of thing, but there wasn’t anything written down that would regulate that.

The other one is, just last month we were doing one of these backgrounders, and it seemed at that point, you guys were looking at very specific targeting sectors as a way to do this, and you guys named jade, oil, some of these things that are very tied closely with the military, as sectors you would avoid. I was wondering what changed in terms of the thinking, and why you guys ended up going down this road.

SENIOR ADMINISTRATION OFFICIAL ONE: Thank you for the question. On the good corporate governance standards – to outline – she outlined some of them, actually, in her statement – we are going to be very specific about the types of things we’re looking for. And as I said, we will have a mechanism set up to ensure there is some transparency and oversight, to ensure that this is not just exhorting folks and then leaving it, but that we are, again, working with the people of Burma who are asking for this.

Aung San Suu Kyi has been quite consistent in asking for more transparency by corporations and the contracting and the use of funds from those contracting, who folks are talking to and how it’s benefitting local communities. And we are going to be quite – we’re going to outline these things as we see them and have very close consultation, discussion with companies as they go in, those who are interested, and again, try to ensure that they model the behavior and are acting consistent with American values as I think they do in many places around the world. So we haven’t outlined them in full today, but we will be talking. This is not the end of the conversation; this is the beginning of the conversation on that particular point, and we’re going to continue to harp on this over time to ensure that we are doing this right.

On the issue of sectors in specific, it was asked during the previous backgrounder about sectors, and off the cuff, we would list various sectors that raised questions and such or – and I – we still – there are still questions, I think, about mining and timber and oil and gas. I mean, they’re legitimate questions. I think we can get at them effectively through the method that we are, which is to, again, target the entities, the individuals, and the activities rather than do it simply by sector. So it’s just that I think the last time, we were at the start of the process and we’ve been doing some very, very careful consideration, and we’re very confident this is the best way to go in that effort.

MODERATOR: Very good. Next question.

OPERATOR: Our next question comes from Jill Dougherty with CNN. Your line is open.

QUESTION: Yes. Hi there. I just wanted to get into the bad actors part again, just more specifically. Are these individuals who are defined by their actions or their positions? And will there be a publicly available list of the ones that have – American companies cannot do business with? And also, did you consult with Aung San Suu Kyi on any of the specifics about this? Thank you.

SENIOR ADMINISTRATION OFFICIAL ONE: Can I ask maybe [agency withheld] to take a first stab on that?

SENIOR ADMINISTRATION OFFICIAL TWO: There is already authority, both statutory and by Executive Order, for the Executive Branch to target problematic actors in Burma – not only human rights abusers, but other figures. So we think we have the authority to address the kind of concerns that were just discussed. And the usual way for this to be promulgated is through [agency withheld] specially designated nationals list.

As to the particular bad actors, I think I would refer that question back to [agency withheld].

SENIOR ADMINISTRATION OFFICIAL ONE: Yeah, there will be a public document, and we are looking at actions and behavior. What we want to do is incentivize or disincentivize the bad behaviors and incentivize constructive behavior. And obviously that sounds easier than it will be in practice, but there are ways that we target folks and we demonstrate, as we have in the past, and I think it has worked in the past with some – with individuals that you and your family and others are not going to get any benefit from the United States or others and try to lead other countries as well the best we can by saying these are folks that are not consistent with reform, that we can potentially create a positive environment inside the country. So it’s really based on actions and behavior as much as anything about positions, but we will be working on those sort of criteria or those tools going forward.

Consultation with Aung San Suu Kyi on this – we have general conversations with her about everything, and we do want to consult with a wide range of actors and people inside the country and get more information about who’s who, on who is considered reformist and has – is trying to do the right thing in our view, and those who are not, who are moving against the tide and are getting in the way of reform and are regressive. So we will be consulting with a wide range of people in that regard going forward.

QUESTION: Thank you.

MODERATOR: Thank you. I think we have time for just one more question, Operator.

OPERATOR: Our next question comes from Matthew Pennington. Your line is open.

QUESTION: Yeah, hello, and thanks for doing this. On the corporate standards, I’m still not sort of clear whether these standards would be legally binding under U.S. law. And on the SDN list, will – that’s going to be renewed now – how long do you think that process will take? And do you think the Myanmar Oil & Gas Enterprise would be a company that U.S. companies could deal with?

SENIOR ADMINISTRATION OFFICIAL ONE: Does [agency withheld] want to take the issue of the process, the SDN process?

SENIOR ADMINISTRATION OFFICIAL TWO: There’s a process underway to consider the new landscape within Burma, the progress we’ve seen and the actors and activities that still cause concern. So it’s the usual process of sifting through a lot of information, using our best judgment, see how to use our tools to preserve the good things that have happened over the course of the past few months. I couldn’t make any kind of comment on any particular person or types of persons or actors that we would focus on.

QUESTION: How long would that process take, do you think, to renew the list?

SENIOR ADMINISTRATION OFFICIAL TWO: The (inaudible) is reviewed as matter of course every year, and that is being renewed as a matter of course to keep in place all the statutory authorities that are used to enforce the current Burma sanctions. The SDN list is ongoing; it’s organic. We add people, we subtract people, on an ongoing basis. How long any particular set of designations would take, I can’t tell you except to say that this is obviously a priority as we work forward and try to balance the need for the general licenses with the understanding that we have to be careful and target those who would impede the process we’d all like to see.

SENIOR ADMINISTRATION OFFICIAL ONE: On the issue of a binding CSR, it will not be legally binding. But we will, as I say, put mechanisms in place that will ideally be – have oversight functions to ensure that there’s transparency about what’s going on, that no one can do anything in the shadows, and that there will be therefore the ability for folks to see and that these – that companies know that their practices will be viewed negatively. And we will find ways to ensure that they’re uncomfortable – made uncomfortable. And I’m sure so will be NGO community and the people of Burma should they find their practices contrary to reform efforts inside the country.

And I know our companies are quite aware of this. And I think companies should be – also note that even though we are moving today on easing the restrictions, it is not a very welcoming environment right now for investment. They need to understand very well the context in which they are operating. It is a very complex context; it is a very fraught context. The human rights situation, the corruption situation, the legal environment, regulatory environment, very, very rudimentary, still a lot of problems inside the country. And they need to be extraordinarily careful as they move in.

And this also goes with the SDN process, because if they move in swiftly and we find they’re working actors that are on the SDN list, they will be held accountable for that. They will need to ensure they are not working with the wrong people. So we will work closely with them. And they, I am sure, will be in touch with us. And we will try to be as clear as possible, making things as public as possible. And I know that’s what companies care most about. They want clarity. What are the rules? What do they need to be aware of? And what should they be doing? What do we expect? And I have great confidence in our corporations to be partners in the effort of what we call principled engagement in Burma going forward.

On the issue of the MOGE, again, we have a process for looking at all the different entities, individuals and such, and that process will be ongoing. So I think it’s premature to talk about any specific item or entity.

QUESTION: Thank you.

MODERATOR: And thank you. And thanks to both of our interlocutors today for taking time out, as well as to all of you who joined us on this call. That’s all we have time for, so have a great afternoon and evening. Bye-bye.