Telenor caught in Myanmar dilemma

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Norwegian telecoms firm Telenor wanted to be a major player in what was hoped to finally become a democratic Myanmar. Now it’s caught in the nightmare that has followed last winter’s military coup in the former Burma, and the country’s subsequent return to brutal dictatorship.

It looks like such an elegant and serene headquarters, but those inside Telenor Myanmar’s headquarters in Yangong (formerly Rangoon) have been under severe pressure since military leaders once again seized power in February and reestablished a brutal dictatorship. PHOTO: Telenor

The Norwegian government, which still holds a majority stake in the company that used to be Norway’s state telecoms utility, has been asked to suspend Telenor’s attempt to sell off its operations in Myanmar and leave the country before being forced to enable state surveillance of its local customers. Parent company Telenor Group in Oslo agreed to sell Telenor Myanmar at a large loss last summer to the M1 Group of Lebanon, which is controlled by another company known for operating in dictatorships.

This week the pending sale was thrown into question after the international Organisation for Economic Cooperation and Development (OECD) agreed to handle a complaint about Telenor’s pullout from 474 anonymous civilian organizations in Myanmar. Newspaper Aftenposten reported Tuesday that one of them has sent a letter to outgoing Prime Minister Erna Solberg and Telenor CEO Sigve Brekke, expressing fears that sensitive communication among those opposing the military coup will fall into the hands of military authorities, putting lives in danger.

The civilian organizations believe Telenor’s sale fails to comply with OECD guidelines. They claim Telenor failed to assess all the risks involved in selling Telenor Myanmar and its customer database to M1 Group. They also fear M1 will give Myanmar’s military dictatorship access to the customer data stored by Telenor Myanmar that Telenor itself was unwilling to hand over for fear of subsequent human rights abuses. They also claim Telenor Myanmar failed to communicate with those who may be most affected by a sale to M1.

The OECD agreed on Monday to review the complaint, turning it over to its National Contact Point (NCP) in Norway to handle. That essentially leaves the NCP acting as a broker between Oslo-based Telenor and its board that’s largely appointed by the Norwegian government, and the 474 civilian organizations in Myanmar. Telenor noted in a press release that the NCP itself “has not expressed any view as to whether Telenor has acted consistently with the OECD Guidelines or not.”

It’s all plunged Telenor into a paradoxical dilemma. Telenor officials in Oslo insist they share the same concerns as the civilian organizations “regarding the challenging situation in Myanmar.” Telenor has itself resisted handing over customer data sought by the authoritarian military leaders in Myanmar, on the grounds that would force Telenor to violate its own human rights principles and international law with which it must comply.

The root of the problem is that Myanmar’s current local law under its military dictatorship conflicts with international law. Telenor’s top management and board in Oslo reported earlier this month that it had “become clear to us that our continued presence (in Myanmar) would “require Telenor Myanmar to activate intercept equipment (for the use of Myanmar authorities) which is subject to Norwegian and EU sanctions. Activation of such equipment is therefore unacceptable for Telenor Group (Telenor Myanmar’s corporate parent).”

Telenor also noted that since there is no legal or regulatory framework in place in Myanmar at present that safeguards its subsidiary’s customers and adheres to fundamental human rights and international laws, “operating such equipment in this situation would constitute a breach of our values and standards as a company.”

‘Least detrimental solution’
Telenor is acutely aware of the “increasing number of voices among stakeholders in Myanmar and abroad” that have been calling for Telenor to remain in Myanmar. The company has, however, determined that “it is no longer possible to adhere to its principles, keep its employees safe and remain as an operator in Myanmar.” Telenor described its sale to M1 as “the least detrimental solution” since it “will maintain the connectivity of our 18 million subscribers as well as critical services such as banks and hospitals, and ensure continued employment for our staff” and suppliers “in a difficult time.”

Some analysts in Norway also believe that selling at a loss and leaving Myanmar is the only realistic alternative for Telenor. Professor Tina Søreide at the Norwegian business school NHH described the situation as a “Catch-22 for Telenor,” telling newspaper Dagens Næringsliv (DN) that Telenor is in a “difficult situation.”

She questioned, though, whether Telenor officials were aware of the risks they faced and whether they were well-enough prepared that military dictators would seize power once again. Telenor earned well on its early operations in Myanmar but has since written down the value of all its assets in Myanmar, taking a loss of NOK 6.5 billion in the process.

Selling also can also put people in danger
Stein Tønnesson, who specializes in Asian issues at the peace research institute PRIO in Oslo, wrote in a recent commentary in Aftenposten on Tuesday that Telenor is still putting its customers in Myanmar in great danger. “We must expect that Telenor will erase all text messages” before any sale of the company to M1, wrote Tønnesson, but he noted that Telenor “still sits on extensive data about who has communicated with who, when and where.” That, he fears, could lead to arrests and even deaths if the military dictatorship gains access to it.

“Telenor must do everything it its power to protect its customers,” Tønnesson wrote. He noted how Telenor, right after the coup in February, did inform the public every time military leaders demanded that the company shut down various Internet addresses, turn over customer data or allow eavesdropping. Within two week the military leaders prohibited Telenor from publicizing such demands.

‘Telenor had three options’
Tønnesson thinks Telenor had three options: to follow the military authorities’ demands, resist them even while knowing that the military would then either take over or shut down the operations, or flee responsibility by selling out to another operator, even though that operation may do whatever the military authorities want.

“Out of consideration to Norway’s reputation, I wish Telenor had chosen the second option,” Tønnesson wrote. “Then Telenor could have gone out with its flag still flying and had the option to return to Myanmar when Myanmar’s people once again get a democratically elected government.”

Telenor maintains that selling was its only option, while noting that it still can’t release all its information around its dilemma out of concern for the safety of employees. “It was no simple decision to make,” wrote Rita Skjærvik of Telenor in a commentary in Aftenposten on Tuesday. “Telenor evaluated all alternatives.”

It remained unclear how much time the OECD and its National Contact Point in Norway will need to make its own evaluation. The professional and impartial commission is led by Frode Elgesem, a judge in a state appeals court, and comprised of members appointed by Norway’s foreign- and trade ministries based on recommendations from employer- and labour organizations and civil society.

Calls were already going out in Norway for the trade minister to simply halt Telenor’s sale of its operations in Myanmar. The ministry, however, rarely meddles in the management of companies in which the government has ownership stakes, with a ministry spokesman telling DN that Telenor’s management and board remain responsible.

newsinenglish.no/Nina Berglund