Exposing POSCO Shwe Gas contribution to military slush fund 2021-2

4월 22일
2분 분량

최종 수정일: 5월 2일

On November 18, 2021, the Clinic held a public seminar with the help of Open Net, exposing POSCO International's contribution to the Myanmar military junta(Tatmadaw)'s slush fund. It was demonstrated that about 5~10%(USD 1.825 Billion) of Tatmadaw’s annual slush fund came from POSCO International's Shwe gas development (in the presentation attached below).

The payments from DAEWOO/POSCO resulted from the profit sharing structure shown below both on the gas extraction itself by DAEWOO/POSCO and the gas delivery through the pipelines handled by the Chinese company, China National Petroleum Corporation (CNPC). Although the contracts on the above relationship are documented in the contracts such as Shwe Offshore Pipeline Rights Agreement and the Production Sharing Agreement, the latter of which has not been disclosed yet but is conjectured to be similar to the Petroleum Production Sharing Agreement between CNPC and MOGE on the extraction of oil in the area close to the Shwe gas field.

To summarize the calculation presented there, POSCO International’s annual monetary contribution to MOGE through Shwe gas development is estimated to be USD 170~340M while the contribution to the entire government is USD 200-400M for one year period 2021-2022 according to PWYP Australia's report (attached below).

Other NGOs such as National Resource Governance Institute report that 55% of MOGE's revenue is deposited in the infamous "Other Accounts", which is suspected to be flowing into Tatmadaw's slush fund. It was noted that MOGE's deposit into "Other Accounts" increased after NLD's takeover in 2011. The size of the "Other Accounts" exceeded the entire health or education budget of the country (report attached below). 55% of POSCO's payment to MOGE 2021-2 comes out to be USD 93.5~187M.

Two biggest sources of Tatmadaw's slush funds are MOGE and Myanmar Economic Holdings Limited (MEHL). Amnesty International reports that MEHL’s dividends to the military is estimated to be USD 18 billion over 20 years, which comes out to be USD 0.9B per year (attached below). As PWYP Australia reported in the above attached report, MOGE's oil/gas annual revenue is estimated to USD 1.5B in 2021-2. Using the 55% rate of depositing in "Other Accounts", we can guess that USD 0.825B of MOGE's revenue belongs to the military slush fund.

Then, POSCO's contribution to the total military slush fund is 5-10%.

In March 2022, the Clinic also issued an op-ed in a major daily newspaper in March 2022, presenting the above numbers.

Although POSCO prevailed at the court of first instance and was slated to prevail at the appellate level as well in July 2022, POSCO's financial link to military dictatorship was put on the spot light.