The Burmese Jade Trade: A Case of Human Suffering
The Burmese jade industry represents a complex web of military-controlled companies, cronyism, illegal drug networks, and environmental devastation. A 12-month long investigation by Global Witness pulled back the veil on the complexity of an industry previously unknown. Although valued at over $31 billion in 2014, the Burmese collected taxes on just 2% of production or $374 million. The jade industry value equals nearly half of the country’s GDP. Despite such high worth, miners face adverse work conditions, poor infrastructure, and lack of quality healthcare.
For more than 5 decades Burma operated under strict military rule of the Tatmadaw, The Myanmar Armed Forces. In 2011 the country began transitioning from military rule to a civilian government. Even as Burma moves toward an open economy, the influence of the Tatmadaw remains strong. In the jade industry, government issued mining licenses are held by military-aligned companies and its cronies. The Tatmadaw even has its own conglomerate, Union of Myanmar Economic Holdings Limited, which owns jade mines in Kachin.
Life in Kachin
Nestled in the far northeast corner of Burma, the state of Kachin holds the majority of the country’s jade deposits. A majority Christian state, Kachin has long fought against the Tatmadaw for its independence. Kachin citizens rally behind the Kachin Independence Army/Kachin Independence Organization (KIA/KIO). Similarly to the Tatmadaw, the KIA/KIO uses revenues from jade mines to fund its operations.
Although rich in this precious natural resource, the state of Kachin has the highest poverty and unemployment rates in the country. The majority of the 1.2 million residents earn less than $1 per day. Workers potentially can earn $1 per hours in the jade mines. The opportunity to earn higher comes with great personal risk. The mines operate with little regard for worker safety, so workplace accidents and injuries are common.
In addition to low wages and dangerous work environments, heroin drug use is at epidemic proportions among miners. After bribing mine operators, druglords operate networks of illegal, open-air drug markets inside the mines, which gives workers easy access to heroin. Along with the drug addition came increasingly high levels of HIV and Hepatitis C from dirty needles. In fact, drug use is so high that some vendors offer clean needles in place of currency.
As well as the human cost, current jade mining practices cause major environmental devastation. Located near the surface, jadeite is mined by defacing mountain tops. The permanently altered landscape is vulnerable to landslides and cave-ins, particularly during monsoon season. In late 2015, over 100 miners were killed in a mine collapse.
As Burma moves towards a free market, the Burmese government will need to increase efforts to legalize the jade trade, resolve tensions between ethnic groups, improve infrastructure and improve access to healthcare and drug addiction therapies. For companies considering entrance into the Burmese market, exhaustive due diligence will be required to avoid connections to illegal jade-related activities.
MBA Candidate 2016