1.
Legal frameworks for investment in large-
scale agriculture in Myanmar
Recap and overview
Vicky Bowman
Director, Myanmar Centre for Responsible Business
Workshop on Responsible investment in plantation agriculture,
with a focus on land (Novotel Yangon Max, 27 April 2018)

2.
Draft Paper MCRB Oxfam) on responsible
investment in large-scale agriculture
▪ In preparation by MCRB/Oxfam legal consultant Margaret Wachenfeld
▪ Will invite comments/consultation in May 2018
▪ Covering laws for:
• Company regulation
• Investment Law
• Land
• Environment including EIA
• Health and Safety
• Labour
• Ethnic Nationalities
• Etc………
▪ This presentation contain key points/analysis
▪ Companies which invest responsibly and do EIA need to know the complete legal framework

3.
Environmental Conservation Law
2012
Environmental Conservation Rules
2014
(Art38-39 EQS, Art 51-61 EIA)
MOECAF Notification 616/2015
EIA Procedure
Draft ESIA
Guidelines (generic)
(ADB)
Draft Public
Participation
Guidelines
(MPE/VLS)
Draft Sectoral
Guidelines
Mining (ADB)
O&G (NorEA);
Hydro (IFC); etc
Further
Environmental
Quality
Standards
(ADB TA for
some)
MOECAF
Notification
616/2015
National
Environmental
Quality
(Emission)
Guidelines)
Other Environment
and Social safeguard
laws e.g. Forest,
Wildlife, Investment ,
Ethnic nationalities,
Disability, Labour,
Hazardous Waste,
Planning
Relevant Sectoral
Rules, Regulations,
By-laws which
concern
environmental and
social safeguards
Relevant
notifications, orders,
directives &
procedures
Could include
Zonation Plans,
Building Code
Sectoral Law(s)
Sectoral Rules,
Regulations, By-laws
Existing
Sectoral
notifications,
orders,
directives and
procedures
Sectoral
standards
which are
lacking and
need to be
notified/issued
as Directives
Gaps in
primary
law
relevant to
sectoral
activity
Gaps in
byelaws
and rules
relevant to
sectoral
activity
Gaps in
tertiary
legislation
relevant to
sectoral
activity
Existing legislation in the purple outline is applicable to all projects in the sector, even if they
are not required to do an IEE/EIA. Gaps in regulation are depicted by Red boxes. For those
which do need to do IEE/EIA, these gaps can be partially covered by including in the EMP and
ECC specific requirements (e.g. taken from the relevant IFC EHS Guidelines). These can be
referred to in Sectoral Guidelines. However, Myanmar legislation should be put in place in due
course to ensure all sizes of project are regulated appropriately

4.
The legal framework for responsible investment
needs to be clear and effective
▪ Complete
• E.g. missing some environmental standards – noise, waste etc
• 1894 Land Acquisition Act does not cover e.g. loss of livelihood for those who use but do not own land (IFC Performance Standard
5 on Resettlement)
▪ Consistent
• E.g. size thresholds for plantation : IEE/EIA Procedure: IEE > 200 < 500 hectares, EIA > 500 hectares
Investment Law MIC Permit >1,000 acres (405 hectares)
▪ Simple, and without unnecessary red-tape
▪ Effective monitoring and accountability
• Many reports are required from companies but are they written, meaningful and read?
o MIC/DICA – quarterly (not) and now annual (published);
o EIA - six monthly, published
• How are grievances handled? Who in government is responsible for receiving and resolving them if the company doesn’t? ECD?
MIC? MOALI? GAD?
▪ Fully communicated and enforced

5.
Step I: Register as a Company in Myanmar
▪ Those involved in large scale agriculture need to register as a company under 2017 Companies Act
▪ Art.2(a): “Myanmar companies” = < 35% foreign shareholding
▪ Whether a company is ‘foreign’ or ‘Myanmar/citizen’ has implications for:
• What a company is permitted to do under the Myanmar Investment Law (MIL)
• Land ownership

6.
Step II: Myanmar Investment Commission or not?
▪ All ‘foreign companies’ need to go to MIC for projects involving agricultural land because they are prohibited from
owning or renting land for > 1 year unless they have an MIC Permit (or Endorsement for small-scale projects). This
provides land rights authorisation (LRA): land use rights for < 70 years.
▪ Myanmar investors do not need a LRA
Myanmar Investment Commission (MIC) Permit is required (MIL Art 36c. Myanmar Investment Rules) for Foreign
or Myanmar large-scale agriculture investment which:
▪ Are “strategic” (Rule 3):
• Involves rights to use > 1,000 acres (405 ha) land for primarily agriculture purposes
• Is a government granted concession > $20 million investment
• Crosses international border or conflict (not defined) area (>$1 milllion)
• Crosses State/Region boundary
▪ Is regarded as having large potential environmental/social impact (Rule 5) because it:
• includes involves compulsory acquisition and rights to use > 100 acres (40.5 ha) land or where >100
individuals will be displaced (Rule 5)
• requires an EIA (under the EIA Procedure)

7.
MIC ‘Incentives’ in Agriculture
➢ Tax exemptions potentially available from Myanmar Investment Commission under the MIL for
▪ Promoted sectors
• Agriculture and related services (except tobacco)
• Plantation/conservation of forest and other businesses
➢ Promoted regions (Notification 10/2017) potential income tax exemption of
▪ Zone 1 ‘less developed’: 7 consecutive years:
• Kachin (14 townships), Kayah (7), Kayin (7), Chin (9), Sagaing (34), Tanintharyi (4), Bago
(5), Magwe (13), Mandalay (2), Mon (2), Rakhine (17), Shan (42), Ayeyarwady (10)
▪ Zone 2 ‘moderately developed’: 5 consecutive years
• Kachin (4, mostly urban), Sagaing (3), Tanintharyi (7), Bago (23), Magwe (12), Mandalay
(13), Mon (8), Yangon (13), Shan (14), Ayeyarwady (17), Naypyitaw (8)
▪ Zone 3 ‘adequately developed’: 3 consecutive years: Mandalay (14), Yangon (32)

8.
Restrictions in the Investment Law: Agriculture
▪ Prohibited for foreign investors: Manufacturing forest products from forest area/government
administered natural forest
▪ Only allowed as joint venture with any citizen-owned entity (i.e. Myanmar company) or Myanmar
citizen:
• Cultivation of crops in agriculture land, distribution to the local market and exporting
• Processing, canning, manufacturing and marketing of food products except milk and dairy
products
▪ Only allowed with approval of relevant ministries
(Notification 15/2017):
• MoALI: production of seasonal crops
• MONREC:
o Logging in forest land and land administered by the government;
o Establishment of forest plantations (teak, hardwood, rubber, bamboo, cane etc);
o Wood-based industry and related businesses with implementation of forest plantation

9.
Step III
Legal pathways for acquiring agriculture/plantation
land which do not – in principle - require an MIC
Permit

10.
Step III: Options for a Myanmar investor to obtain land which do
not involve MIC
Vacant, Fallow or Virgin (VFV) Management Land Law
2012
▪ Common option for acquiring access to land →
Government can allocate land in tranches of 5000 ha
up to 50,000 ha
Note: Under Myanmar Investment Rule 3 the threshold
requiring MIC Permit is 1,000 acres/405 ha. → this
tranche size would require MIC Permit
Company applies → to VFV Land Management
Committee
▪ Application passes up/down through multiple layers
of VFV Committees for approval
▪ Opinion sought from MoALI Perennial Crop Division
▪ Committee issues a Recommendation based on
environment & appropriateness of crops based on
soil and weather conditions
Farmland Law 2012 (under revision)
▪ Farmers typically have Land Use
Certificates (LUC)
▪ Apply → to Farmland
Administrative Bodies (FAB)
▪ Application passes up/down
through multiple layers of FAB for
approval
▪ Myanmar companies can lease farmland
directly from farmers if they have
secured a land use certificate (LUC)
▪ Farmers typically have smaller plots of
land: leasing land from farmers requires
negotiations with many individual
farmers in the same area
▪ Foreign investors require permission
from the Government to lease farmland
Forest Law 1992
▪ Myanmar
company or
foreign company
→ applies to
MONREC for
permission to
establish a
commercial
plantation on
forest land
▪ MIL imposes
restrictions on
foreign
companies using
forest land

11.
Usage Right (relevant
Government Form)
Responsible Government
Authority
Entities entitled to acquire or use this type of land
VFV Law Right to use VFV land:
• for industrial crops (Form
11)
• for perennial plants and
orchards (Form 12)
Central Committee for Management
of VFV Lands (CCVFV)
Myanmar individuals and companies
VFV Committees at the levels of:
▪ State/Regional
▪ District
▪ Township
▪ Village tract
Foreign Companies in joint ventures with the government
Myanmar companies or individuals with a MIC Permit or
Endorsement, through the LRA process
Farmland Law
Farmland
Rules
Land Use Certificate (LUC)
issued to farmers (Form 7,
accompanied by a map on
Form 105)
Central Farmland Administrative
Body (FAB)
▪ includes Ministry of Home
Affairs, General Affairs Division
(GAD)
Myanmar companies can buy or lease LUCs from farmers
Farmland Administrative Bodies at
levels of:
▪ State/Regional
▪ District
▪ Township
▪ Village tract
Foreigners (individuals or companies) can lease farmland
from farmers but only with permission of Government.
Unclear which government agency under Farmland Rules;
presumably MoALI (line ministry responsible for farming)

12.
Forest Law Permission to Use and Contract
with the Forest Department
Forest Department Myanmar citizen or company
FD branches at levels of:
▪ State/Regional
▪ District
▪ Township
Foreign investors (MIC Notification 15/2017):
▪ are prohibited from
manufacturing forest products from forest areas and
government administered natural forest
▪ as part of MIC process, require approval from
MONREC to:
(i) log in forest land and land administered by the
government
(ii) establish forest plantations (teak, hardwood,
rubber, bamboo, cane etc)
(iii) carry out wood-based industry and related
businesses with implementation of forest
plantation
Right (relevant
Government Form)
Responsible Government
Authority
Entities entitled to acquire or use this type of
land

13.
Step IV
Responsible business requirements when
establishing, and during, operations

14.
Environmental Conservation Law:
2015 EIA Procedure
EIA and Initial Environmental Examination (IEE) requirements for Plantation Industrial/Crop Production (rubber, oil palm, cocoa, coffee, tea,
bananas, sugar cane) in Annex 1 of EIA Procedure
Plantation Industrial/Crop Production (e.g. rubber, palm oil, cocoa, coffee, tea,
bananas, sugar cane)
IEE ≥ 200 hectares but < 500
ha
EIA ≥ 500 ha
Annual Crop Production (e.g. cereals, pulses, roots, tubers, oil-bearing crops, fibre
crops, vegetables, and fodder crops)
IEE ≥ 500 ha but < 3,000 ha EIA ≥ 3,000 ha
Concession Forest IEE < 10,000 ha EIA ≥ 10,000 ha
▪ Single assessment (EIA) should cover environmental and social impacts
▪ After approval by ECD/MONREC, an Environmental Compliance Certificate (ECC) is issued
including requirements on the company, including for monitoring and reporting, and notifying
MONREC of any breaches.
▪ Smaller plantations may be required to submit an Environmental Management Plan
▪ Companies should provide MIC with information about their EIA/IEE/EMP plans at time of MIC
Permit application
▪ MIC Permit can be issued conditional on obtaining necessary permits including the ECC.
▪ ECC should be provided to MIC once received (MIL (Article 65(q)) and MIR (Articles 188-189)

15.
What about existing plantations?
Art.8 EIA Procedure: ‘Any project already in existence prior to the issuance of Environmental
Conservation Rules (June 2014), or the construction of which has already commenced prior to the
issuance of the Rules, and which, in either case, shall be required to undertake , within the timeframe
prescribed by the Department, an environmental compliance audit, including on-site assessment, to
identify past and/or present concerns related to that Project’s environmental impacts, and to:
a) Develop an Environmental Impact Assessment (EIA) or Initial Environmental Examination (IEE) or
Environmental Management Plan (EMP); OIL PALM PLANTATIONS IN
TANINTHARYI (SOURCE FFI)
Allocated
hectares
Planted hectares
Zero activity N/A 6 companies
<200 hectares (EMP-type) 1 company 8 companies
>200 ha < 500 ha (IEE-type) 6 companies 8 companies
>500 ha (EIA-type) 37 companies 22 companies
b) Obtain an ECC; and
c) Take appropriate actions to mitigate adverse
impacts in accordance with the Law, the Rules and
other applicable laws

16.
MCRB field research on oil palm
noted that some companies did
not have proper waste
management systems at their
mills. Most labourers use stream
water for bathing and laundry
contaminating it with soap and
detergents. Pesticides and other
agricultural chemicals contaminate
stream water further.
Other relevant environmental laws to be incorporated
into EIA/EMP etc
▪ 2015 National Environmental Quality (Emissions) Guidelines:
regulations on noise, vibration, emissions and liquid discharges
(Plantation Industrial - Sec.2.2.1)
▪ 1994 Protection of Wildlife and Conservation of Natural Areas
Law and 2002 Protection of wildlife and Protected Areas Rules
(revised in 2017): Support for wildlife protection and
conservation of natural areas
▪ 2006 Conservation of Water Resources and Rivers Law –
protects from industry, vessels or local people polluting the
environment
▪ 2016 Pesticides Law – controls use of pesticides

17.
MCRB’s oil palm field research
found that labour conditions
vary from company to
company. In some cases living
and working conditions are
very bad, including workers
are forced into bonded labour
(debts to employer etc).
Relevant labour laws/social issues for agriculture
to be incorporated into EIA/EMP etc
▪ Working conditions, including working hours, rest and leave
▪ Minimum Wage Act (2013)
▪ Payment of Wages Act (2016)
▪ Freedom of Association and Collective Bargaining
▪ Social Security Law (2012)
▪ Occupational Health & Safety Law (draft under discussion)
▪ Forced Labour
▪ Child Labour
▪ Non-discrimination and disability rights

18.
Companies must also abide by the Myanmar
Investment Law
MIL Article 65 Chapter XVI (Responsibilities of Investors)
(a): Respect….the customs, traditions and traditional culture of the ethnic groups in the Union
(g): Abide by the applicable laws, rules, procedures and best standards practiced internationally for this
investment so as not to cause damage, pollution, and loss to the natural and social environment and not to
cause damage to cultural heritage
(j): Pay wages and salaries to employees and respect and comply with the labour laws
(o): Pay effective compensation for loss incurred to the victim, if there is damage to the natural environment
and socioeconomic losses caused by logging or extraction of natural resources which are not related to the
scope of the permissible investment
Rule 196: Publish annual report (in addition to quarterly operational reports)
✓ How company has carried out investment in a responsible and sustainable manner
✓ Employment performance
✓ Impact on the environment and local community
✓ Land used and changes to land or land uses
✓ Compliance with MIC Permit & other applicable laws

19.
Step V: Other recommendations for operating responsibly
▪ Conduct business responsibly and transparently, in line with the
spirit of the Myanmar Investment Law
▪ Carry out due diligence, EIA/IEE etc, in line with international
standards
▪ Use international standards where there are gaps in Myanmar law
▪ Get ahead of future changes to Myanmar’s environmental laws by
using sustainable agricultural practices
▪ Understand land situation in Myanmar including the perspective of
those living on and using the land, and find out how ‘virgin’ land is
actually occupied or used
▪ Build good relationships with communities from Day 1, including for
handling complaints
▪ Consider a Community Development Agreement for longer term

20.
Thank you!
www.mcrb.org.mm
myanmar.responsible.business