Mekong Watch
August 25, 2020
Mr. MAEDA Tadashi, Governor
Japan Bank for International Cooperation
Request for Explanation on the Flow of Funds and Human Rights Issues regarding
the Real Estate Project in Myanmar (Commonly Known as the Y Complex Project)
In December 2018, the Japan Bank for International Cooperation (JBIC) signed a loan agreement amounting up toapproximately USD 47 million with Yangon Museum Development Pte. Ltd. (YMD), a Singaporean subsidiary ofTokyo Tatemono Co., Ltd. (Tokyo Tatemono), and Fujita Corporation (Fujita) that was jointly established with theJapan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN). This loan isprovided as part of JBIC's Global Facility to Promote Quality Infrastructure Investment for Environmental
Preservation and Sustainable Growth (QI-ESG). We understand that YMD is investing the funds in the development
and operation of a real estate complex in Yangon, consisting of a hotel, service apartments and other facilities,
through Y Complex Company Limited, a Myanmar corporation established by YMD jointly with a Myanmar
company Yangon Technical and Trading Company Limited (YTT)1.
Regarding the project, Justice For Myanmar, a human rights organization in Myanmar, has pointed out that profits
may flow to the Myanmar armed forces, but that such a flow of funds cannot be monitored or confirmed by thirdparties2. The group also claimed that, based on the contents of the land lease agreement obtained, YTT is paying land
rent to the Quartermaster General’s office of the armed forces3.
The online media outlet Myanmar Now reported in an article published on May 21, 2020, that it confirmed that thelessor is the vice quartermaster general of the Myanmar armed forces and, according to the lease agreement, rent is tobe paid in Myanmar kyat or US dollars to an account named “Defence Account.” According to the same article, aYTT director told Myanmar Now that the company is paying 2.18 million dollars a year in rent, and said that,
although the company pays the annual rent to the Quartermaster’s office, he is certain that the rent money goes to thegeneral government budget and not the military4. However, Myanmar Now reported that it could not find explicit
mention of that rent money in either the defence or general government budgets for the last fiscal year.
Furthermore, Myanmar Now's report on June 10 points to the problem that the present Myanmar law exempts theMinistry of Defence from the government’s financial audit5. In other words, it is suggested that, under the current
situation, even the Myanmar government is unable to confirm whether or not the rent and other payments are madeto the armed forces in the projects financed by JBIC.
As you already know, in January 2020, the International Court of Justice (ICJ) imposed provisional measures on theMyanmar government to prevent genocide and the destruction of evidence in relation to the inhumane acts that arebelieved to have been committed in Rakhine State mainly by the Myanmar armed forces6. There have been
numerous reports of Myanmar armed forces perpetrating human rights violations in other ethnic minority
communities in the past, and some areas remain in conflict to this day. The independent international fact-finding
mission, appointed by the UN Human Rights Council, released a report in August 2019 recommending that foreigncompanies investing in Myanmar sever ties with businesses linked to the country’s military7.
Amid great concerns over human rights violations by the Myanmar armed forces, we believe that JBIC isaccountable for ensuring that it is not complicit in human rights violations in this project, and that it does not damage
Japan's reputation internationally, if JBIC is to continue supporting the project. Specifically, in order to ensure thetransparency of financial flow, it is necessary for JBIC to require the participating companies to publicly disclose
the recipients of the rent money concerning the project. And if the recipients are related to the Ministry of Defenceor the Myanmar armed forces, JBIC must publicly explain on its responsibility that the amount and usage of the rents
can be confirmed by a third party. If the financial transparency cannot be ensured and JBIC is unable to fulfill its
accountability, public funds should not be used to finance the project.
Even if JBIC judges that this issue is not subject to its obligation to confirm environmental and social considerations,provided under the JBIC Guidelines for Confirmation of Environmental and Social Considerations, JBIC still has
responsibility since the issue relates to the rent of the leased land, which is essential to the project it supports. We
hereby request JBIC to fulfill its accountability to explain how, in this Japanese public funded project, the risk isavoided for the related funds to be used for any military activities, including the purchase of arms and materials, that
may lead to serious human rights violations in Myanmar.

Notes:
1JBIC, December 18, 2018, “Loan for Mixed Use Development Project by Japanese Company in Myanmar,”https://www.jbic.go.jp/en/information/press/press-2018/1218-011714.html

2Justice For Myanmar, “The Luxury Japanese Business Development Secretly Funding Myanmar’s Military,”https://www.justiceformyanmar.org/stories/y-complex
3The land lease agreement obtained by Justice for Myanmar:
https://uploads-ssl.webflow.com/5e691d0b7de02f1fd6919876/5ec6b2dc075fe31ea6b96843_y-complex-lease-agreement.pdf
4Myanmar NOW, May 21, 2020, “Japan-backed luxury hotel and office complex will enrich military, says rights group,”
https://myanmar-now.org/en/news/japan-backed-luxury-hotel-and-office-complex-will-enrich-military-says-rights-group5
Myanmar NOW, June 10, 2020, “Junta-drafted law keeps auditor general from investigating military finances,”
https://myanmar-now.org/en/news/junta-drafted-law-keeps-auditor-general-from-investigating-military-finances
6
Human Rights Watch, January 23, 2020, “World Court Rules Against Myanmar on Rohingya,”https://www.hrw.org/news/2020/01/23/world-court-rules-against-myanmar-rohingya
International Court of Justice, January 23, 2020, Press release, https://www.icj-cij.org/en/case/178
7
UNOHCHR, August 5, 2019, “UN Fact-Finding Mission on Myanmar exposes military business ties, calls for targeted sanctions
and arms embargoes,” https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=24868&LangID=E