Proposal for a COUNCIL REGULATION (EC) temporarily withdrawing access to generalized tariff preferences for industrial goods from the Union of Myanmar
Date: 1996-12-18
Institutions: European Commission
Subjects: Myanmar/Burma, committee of inquiry, generalised preferences, secondary sector, slavery

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  18.12.1996 
COM(96)711  final 

96/0317 (ACC) 

Proposal  for a 

COUNCIL REGULATION (EC) 

temporarily withdrawing access to generalized tariff preferences 

for industrial goods 

from the Union of Myanmar 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

On  12  June  1995,  the  European  Trade  Union  Confederation  (ETUC)  and  the 
1. 
International  Confederation  of Free Trade Unions (ICFTU) made a joint complaint to the 
Commission  pursuant  to  Articles  9  and  10  of  Council  Regulation  (EC)  No  3281/94,1 
regarding  Myanmar's  use of  forced  labour. The Regulation  states  that the  advantages  of 
the  Community  scheme  of  generalized  preferences  may  be  temporarily  withdrawn  in 
whole  or  in  part  in  circumstances  including  practice  of  any  form  of  forced  labour  as 
defined  in  the  Geneva  Conventions  of  25  September  1926  and  7  September  1956  and 
International Labour Organization Conventions Nos 29 and  105. 

After 
thoroughly  examining  the  complaint  in  consultation  with  the  Generalized 
Preferences  Committee, the Commission  decided to open an investigation2  and  informed 
the authorities of Myanmar  accordingly. 

2. 
Assisted  by qualified  university  experts, the Commission  departments  sorted  and 
analyzed the information  and statements they had received and organized hearings, which 
were  attended  by  the  members  of the  Generalized  Preferences  Committee.  At their  own 
request,  some  of  those  who  had  provided  statements  were  heard  confidentially.  The 
Commission  departments  also  received  information  from  representatives  of  a  major 
European  investor  carrying  out  large-scale  works  in  Myanmar.  These  were  provided 
outside  the  hearings,  since  the  company  in  question  did  not  consider  itself  to  be  an 
interested party for the purposes of the investigation. 

local  non-governmental  authorities  (village  chiefs 

All  the  material  received  generally  pointed  in the  same  direction,  confirming  that  under 
the  rule  of  the  military  government,  the  State  Law  and  Order  Restoration  Council 
(SLORC), the country's  authorities had made forced  labour  an everyday  (and  verifiable) 
reality.  Forced  labour  had  been  used  by  the  previous  regime,  but  it  had  spread  to  the 
extent that it had to be centrally  imposed and regulated, with directives trickling  down to 
the 
in  the  countryside).  The 
phenomenon  had  since  spread  throughout  the  country,  to  urban  and  rural  areas  alike 
(entire  villages  were  forced  to  move  to worksites).  The  practice  had  gone  beyond  load-
carrying  for  the  army  in  areas  of  conflict  with  ethnic  minorities  and  was  used  for 
infrastructure  projects  (roads,  railways,  runways,  etc.)and  building  projects,  not just  for 
military  use,  but  also  for  civilian  use  (hotel  facilities  mushroomed  when  1996  was 
declared the year of tourism in Myanmar). Forced labour was imposed  on everyone, man 
or woman, irrespective of age, state of employment or state of health. Children were used 

1 

of  19 December  1994, applying a four-year  scheme of generalized tariff  preferences  (1995 to  1998) in 
respect of certain  industrial products originating  in developing countries (OJ L 348, 31.12.1994. 

2  Notice No 96/C  15/03, OJ C 15, 20.1.1996, p.3. 

too.  Payment  of  any  kind  was  rare, but  individuals  had  to  provide  their  own  tools  and 
food. The only way to escape forced  labour was to pay "compensation" to the authorities, 
an option only open to the most well-off. 

3. 
The authorities  of  Myanmar  rejected  the  allegations  contained  in  the  complaint, 
citing  the  Buddhist  tradition  of  acquiring  personal  merit  by  helping  with  projects 
benefiting  a  village,  a  neighbourhood,  a  monastery  or  a  pagoda,  for  example,  and  the 
exemptions contained in ILO Convention No 29. 

The  cultural  argument  was  challenged  by  practising  Buddhists  among  the  people  who 
provided  evidence.  They  contended  that  such  merit  was  only  earned  if  the  work  was 
undertaken voluntarily. This was not the case with the current authorities (the SLORC1), 
which  used  force  to  recruit  labour.  The  ILO  itself  challenged  the  Myanmar  authorities' 
interpretation  of  Convention No  29, calling  on them  to  abolish  the  1907 Town  Act  and 
the  1908 Village Act, which dated from  Burma's colonial days and violated the latter and 
the spirit of the Convention. 

4. 
Once  the  hearings  had  been  completed,  the  Commission  sought  to  add  to  its 
information,  and  asked  the  Myanmar  authorities  to  cooperate  with  the  investigation  by 
allowing  a fact-finding  team to visit. They did not act on this request,  saying that  it was 
pointless to check a situation which did not exist. 

A report on the results of the investigation was put to the Generalized  Preferences 

5 
Committee on 4 December  1996. 

6. 
Having  discussed  the  matter,  the  Commission  considers  that  the  available 
information  provides  sufficient  evidence  that  the  Myanmar  authorities  do  in  fact  use 
forced  labour  ,  and  that  there  is  justification  for  withdrawing  the  tariff  preferences 
granted to the country. 

Moreover,  the  fact  that  the  practices  in  question  are  routine  and  widespread  warrants  a 
complete  withdrawal  of  access. The  Commission  takes the  view  that the  advantages  of 
the generalized scheme of preferences established by Regulation (EC) No 3281/94 should 
be  withdrawn  from  Myanmar  for  as long  as the practices  remain,  which  means  that  the 
situation might be reassessed if substantial changes occur. 

The  aim  of  this  draft  Regulation  is  to  accomplish  that  withdrawal  of  access  to 
preferences. 

State Law and Order Restoration Council. 

Proposal for a 
Council Regulation (EC) No  ...196 
temporarily withdrawing access to generalized tariff  preferences 
for industrial goods 
from the Union of Myanmar 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having regard to Council Regulation  (EC) No 3281/94 of  19 December  1994 applying a 
four-year  scheme  of  generalized  tariff  preferences  (1995  to  1998)  in  respect  of  certain 
industrial  products  originating  in  developing  countries,  and  in  particular  Article  12(3) 
thereof, 

Having regard to the proposal from the Commission,1 

Having regard to the Opinion of the European Parliament,2 

Having regard to the Opinion of the Economic and Social Committee,3 

Whereas pursuant to Regulation (EC) No 3281/94 the Union of Myanmar is a beneficiary 
of generalized tariff  preferences; 

Whereas  Article  9  of  Regulation  (EC)  No  3281/94  provides  that  the  preferences  in 
question  may  be  temporarily  withdrawn  in whole  or  in  part  in  circumstances  including 
the  practice  of  any  form  of  forced  labour  as  defined  in  the  Geneva  Conventions  of 
25 September  1926  and  7  September  1956  and  International  Labour  Organization 
Conventions Nos 29 and  105; 

Whereas  on 7 June  1995 the International  Confederation  of Free Trade Unions (ICFTU) 
and  the  European  Trade  Union  Confederation  (ETUC)  made  a joint  complaint  to  the 

1  OJC 

1996, p.... 

2  OJC  , 

1996, p.... 

3  OJC  , 

1996, p.... 

Commission  and called  for  Myanmar to be temporarily  withdrawn  from  the  Community 
scheme of generalized tariff preferences because of its use of forced  labour; 

Whereas  the  Commission  examined  the  complaint  in  consultation  with  the  Generalized 
Preferences  Committee,  whereas  the  evidence  put  forward  by  the  complainants  was 
judged  sufficient  to justify  the opening of an investigation,  and whereas the Commission 
decided on 16 January  19961 that an investigation should take place; 

Whereas  the  Myanmar  authorities  were  formally  notified  of  the  opening  of  the 
investigation;  whereas  they  denied  that  the  practices  referred  to  in  the  complaint 
constituted forced  labour, citing the exceptions in Article 2(2) of ILO Convention No 29, 
and claiming that those exceptions covered the  1907 Town Act and the  1908 Village Act, 
which  allow  the  population  to  be  made  to  carry  out  works  and  services;' whereas  that 
interpretation  has been challenged  by the  ILO, whose  competent  bodies  have  called  for 
the immediate repeal of the laws in question in order to ensure compliance with the letter 
and the spirit of Convention No 29; 

Whereas the written  and oral  statements  collected  by the  Commission  during the  course 
of  the  investigation  conducted  in  consultation  with  the  Generalized  Preferences 
Committee  corroborate  the  allegations  contained  in  the  complaint;  whereas  it  has 
emerged that the authorities  in Myanmar  have routinely  used  forced  labour, not only  for 
military  operations  but  also  for  civilian  and  military  infrastructure  building  projects, 
backed by coercion and frequently  violent reprisals; 

Whereas,  seeking  to add to the information  it had  gathered  during  the investigation,  the 
Commission requested the authorities of Myanmar to cooperate with that investigation by 
allowing  a  fact-finding  team  into  the  country;  whereas  this  request  was  denied,  and 
whereas  pursuant  to  Article  11(5)  of  Regulation  (EC)  No  3281/94  the  findings  of  the 
investigation could therefore  be based on the information  available; 

Whereas  the  information  available  provides  grounds  to  conclude  that  withdrawal  of 
Myanmar's  access  to  the  scheme  of  generalized  preferences  for  which  it  is  eligible  is 
justified; 

Whereas  the  findings  of  the  investigation  have  been  reported  to  the  Generalized 
Preferences  Committee in accordance with Article  12(1) of Regulation (EC) No 3281/94; 

1  Notice No 96/C 15/03, OJ C 15,20.1.1996, p.3. 

Whereas the fact  that the practices condemned  have been routine and widespread  means 
that a complete withdrawal of access to the arrangements is warranted; 

Whereas  in  the  light  of  the  foregoing  the  application  of  tariff  preferences  to  industrial 
goods  originating  in  Myanmar  should  be  temporarily  withdrawn  until  it  has  been 
established that the practices in question have been brought to an end; 

Whereas  goods  in  shipment  to  the  European  Union  should  be  excluded  from  this 
withdrawal  of  preferences,  provided  that  they  were  dispatched  before  this  Regulation 
entered into force: 

HAS ADOPTED THIS REGULATION: 

Article 1 

Myanmar's  access  to  the  tariff  preferences  granted  by  Regulation  (EC) No  3281/94  of 
19 December  1994 is hereby withdrawn. 

Article 2 

The  Council,  on  a  proposal  from  the  Commission,  shall  bring  the  application  of  this 
Regulation  to  an end  once  it has observed  on the basis  of  a Commission  report  that  the 
use of forced  labour in Myanmar has ceased. 

Article 3 

This Regulation  shall enter into force  on the third day following  that of its publication  in 
the  Official  Journal  of the European  Communities.  It shall  not  apply to  goods proven to 
have been dispatched to the European Union before that date. 

This  Regulation  shall  be  binding  in  its  entirety  and  directly  applicable  in  all  Member 
States. 

Done at Brussels, 

1996 

For the Council, 

The President 

FINANCIAL  STATEMENT 

Title of operation 

Draft proposal for a Council Regulation temporarily withdrawing access to generalized 
tariff preferences  for industrial goods from the Union of Myanmar. 

Legal basis 

Article  113 of the Treaty 

Objective of the operation 

The aim of this draft proposal is to temporarily withdraw access to the GSP scheme for 
industrial goods from  Myanmar. 

Estimate of customs revenue 

Using as a basis the GSP offer  calculated using the figure for total imports of GSP-
eligible industrial goods from  Myanmar in  1995 and Myanmar's average take-up of the 
GSP scheme for industrial goods in 1994 (12%),* the increase in customs revenue which 
can be expected to result from the withdrawal of GSP access in  1997 is: 

1995 imports of GSP-eligible industrial goods from  Mya 

Estimated customs revenue for  1997 

Average take-up of GSP in 1994 

Estimate of customs revenue which will actually be 
collected (customs duties applicable in 1997) 

(1000 ecus) 

24 205 

2 392 

12% 

287 

(2 392x12%) 

Note: this revenue will drop during each year the withdrawal of access is in force in a 
manner reflecting  the fall  in duties resulting from  the Uruguay Round 

GSP figures  for  1995 are not yet known. 

ISSN 0254-1475 

COM(96)711 final 

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Catalogue number  :  CB-CO-96-725-EN-C 

ISBN 92-78- 13970-X 

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