GZE goes belly-up in Myanmar, are we next?

Lessons from Myanmar*

The multi-billion-dollar oil refinery that was to be constructed by Guangdong Zhenrong Energy (GZE) in Myanmar failed miserably. This was confirmed last week by the Myanmar Investment Commission. Myanmar decided to cancel the project after it has seen “absolutely no progress at all” in the two years since GZE was awarded the contract to build the refinery in the South Eastern Burmese city of Dawei. GZE’s failure to comply was due to its severe financial problems according to last Thursday’s edition of the Myanmar Times. This refinery would have been the first refinery built by GZE.

At the signing ceremony of the MoU between the Government of Curaçao (GoC) and GZE, the Myanmar refinery was presented in a film in the auditorium of the Curaçao Renaissance Hotel by the members of the Chinese State and Communist Party as the ultimate proof that they were serious and able to take on the refinery in Curaçao. According to additional information I received from my sources in Myanmar, the Burmese knew about the financial problems of GZE a little more than a year ago. This means that at the time we were signing with GZE, this company was already in deep financial problems half way across the world. Question is what kind of financial due diligence if any, was done by the Multi Disciplinary Team (MDPT). Quoting my aforementioned sources, GZE has proven to be some “oil refinery wanna-be experts”.

Obviously we have failed at the financial due diligence. Another due diligence we have to do -assuming the GoC maintains GZE as partners-  is about the alarming human rights violations of GZE regarding the forceful displacement of many residents in surrounding villages should the construction have taken place in Dawei. Thousands of residents have been agitating for almost two years against the refinery plans. The GZE’s intentions even captured the attention of the United Nations Special Rapporteur on Human Rights in Myanmar as I mentioned in an earlier article*. Obviously the MDPT ignored or chose to ignore these alarming human rights abuses. Hopefully we will not only check the financial books, but also GZE’s lack of good corporate behavior as was the case in Myanmar. Only Willemstad can prevent a Myanmar repetition.

 

Curaçao