Thai banks and energy conglomerates have come under intense scrutiny following allegations by the United Nations and human rights organizations that some of them had served as conduits for the procurement of arms and provided financial support to Myanmar’s military junta.
Two committees of the Thai House of Representatives summoned agencies concerned with the banking and energy sectors to testify on July 11.
The members wanted information and explanations about their business transactions and investments in strife-torn Myanmar that may fuel the conflict and human rights violations.
A civil war has erupted in Myanmar after a military coup in 2021 toppled an elected government, causing deaths of more than 5,000 civilians, displacing more than 3 million people, with more than 20,000 political prisoners, according to a UN report.
The UN Special Rapporteur’s “Banking on the Death Trade” report recently named five Thai banks for facilitating financial transactions for the procurement of military supplies by the State Administration Council (SAC) junta.
Siam Commercial Bank (SCB), Bangkok Bank, Kasikornbank, TMB Thanachart Bank, and Krungthai Bank reportedly facilitated over US$120 million for purchasing items for military use on behalf of the SAC last year, double the $60 million in 2022, according to the report.
In 2023, the SAC approved the transfer of over $100 million to the account it held with the SCB, an exponential increase over the less than $5 million of items relating to military procurement in 2022, it said.
In contrast to SCB, Kasikornbank saw a sharp decrease in military procurement-related transactions to only $5 million from $35 million in 2022, it said.
The financial transactions included payments for the purchase of spare parts for helicopters and military aircraft, electronic warfare equipment, support vehicles, missiles, and naval vessel equipment, it said.
The Committee of Security, Border Affairs, National Strategy and Reform chaired by opposition politician Rangsiman Rome summoned representatives of the five commercial banks, the Bank of Thailand (BOT), the Foreign Ministry, the Thai Bankers Association, and the Anti-Money Laundering Office to the testimony.
UN Special Rapporteur Tom Andrews, who was also at the House committee meeting to present his findings on the day, accused Thai authorities of having no clear public policy on blocking weapons transfer to the military-ruled Myanmar.
In denial mode
Representatives of the banks in question as well as of the Thai Bankers Association told the committee that they had strictly complied with the rules of Enhanced Due Diligence, Anti-Money Laundering Law as well as regulations of the BOT.
It is very difficult for banks to investigate transactions linked to weapons purchases, according to Pongsit Chaichutpornsuk, executive vice president of Krungthai Bank who also represented the bankers’ association in the meeting.
The BOT said it would cooperate with the Anti-Money Laundering Office to investigate transactions linked to military procurement.
There could be some loopholes and the relevant agencies would step up measures, BOT assistant governor Chayawadee Chai-anant said.
Rangsiman, a member of the opposition Move Forward Party, said all relevant agencies had promised to investigate the alleged transactions and would report back to the committee within 30 days.
Singapore model
The House committee suggested to the concerned agencies to learn from Singapore how it had managed to control financial transactions for military procurement.
The Singaporean government has a clear policy to oppose the transfer of weapons to Myanmar, consistent with a UN resolution passed in June 2021.
The city-state, which is a regional financial hub, was once listed by the UN as the third largest source of weapons material after China and Russia.
Last year, Singapore-based banks facilitated US$40 million, or 20 per cent of the junta’s weapons procurement, dropping sharply from the US$260 million, or 70 per cent of the total, in 2022, according to the UN report.
Singapore-based DBS responded to every request made by the Special Rapporteur for information about its apparent facilitation of transactions related to the SAC’s military procurement, it said.
“In a meeting with the Special Rapporteur, DBS emphasized its commitment to complying with sanctions and with Singapore’s policy to prohibit the transfer of arms and dual-use equipment to Myanmar,” it said.
Sanctioned partner
Separately, Bencha Saengchantra, chairperson of a sub-committee of state enterprise affairs, summoned representatives of Thai energy giants PTT and PTT Exploration and Production (PTTEP) to testify to the House on July 11 about their investment in petroleum production and sale in Myanmar.
Revenues from the export of natural gas to Thailand could feed the junta’s war and human rights violations, she said and urged the PTT group to consider stepping up necessary measures such as freezing or suspending investment in war-torn Myanmar.
“It is risky for Thailand to be condemned or even sanctioned by the international community for supporting human rights violations and perhaps crimes against humanity,” Bencha, an MP of the opposition Move Forward Party, warned.
State-run energy corporation PTTEP has been invested in the exploration and production of gas in the Gulf of Martaban in southern Myanmar since 1989.
After the withdrawal of Chevron in April this year, PTTEP currently holds a 63 per cent stake in the Yadana project. It also holds an 80 per cent stake in the Zawtika project, and 100 per cent in the M3 project.
The rest of the shares in these projects are held by the state-run Myanmar Oil and Gas Enterprise (MOGE), which was sanctioned by the United States, the United Kingdom, and Canada last October.
MOGE provided hundreds of millions of dollars in foreign revenues every year to the military regime’s coffers, which the regime has used to purchase weapons and military materials from abroad, according to the US State Department.
PTT Oil and Retail Business Company (PTTOR), a PTT subsidiary, has a 35 per cent stake in the junta-linked Brighter Energy to operate and expand the PTT Station brand, Café Amazon brand, and LPG distribution network in Myanmar.
After the withdrawal of the Norwegian pension fund in December 2022, PTTOR informed the Stock Exchange of Thailand that it did not condone human rights violations in military-ruled Myanmar and had decided to freeze “new investment” in the strife-torn country.
Regarding human rights concerns, Brighter Energy’s oil port and storage terminal sits on land owned by the military’s Myanmar Economic Corporation in the commercial capital Yangon.
PTT and PTTEP representatives told the sub-committee that the group needed to maintain a major stake and investment in Myanmar for the sake of national energy security. Natural gas from Myanmar accounts for 13 per cent of Thailand’s total gas supply, they said.
International sanctions on its partner, MOGE, and other individuals and entities are major concerns for the business of the PTT group in Myanmar, they said. The company has survived for over 35 years due to a strong lobby in Washington, they added.
“We have told the Americans that gas from the Gulf of Martaban is extremely important for not only the Thai economy but also the Myanmar people,” an executive of the PTT told the sub-committee.
Gas supply from the Yadana and Zawtika projects produced electricity that served 15 million people in Myanmar and 8 million in Thailand, he said, adding that these people deserved such a basic right as well.
PTT has paid more than 2.4 billion baht over the past 35 years towards corporate social responsibility schemes, benefiting 2.7 million people, according to the PTT presentation to the meeting.
By Thai PBS World’s Political Desk
