Home Complaints database Korean Civil Society in Solidarity with Rohingya, Korean Transnational Corporation Watch and Justice for Myanmar vs. Daesun Shipbuilding & Engineering Co. Ltd.
Complaint

Korean Civil Society in Solidarity with Rohingya, Korean Transnational Corporation Watch and Justice for Myanmar vs. Daesun Shipbuilding & Engineering Co. Ltd.

Six Korean companies engaging with Myanmar military or associated businesses

Date filed
16 December 2020
Keywords
Countries of harm
Current status
Rejected
Sectors
NCP

Allegations

On 16 December 2020, Korean Civil Society in Solidarity with Rohingya (KCSSR), Korean Transnational Corporations Watch and Justice For Myanmar (together, ‘the complainants’) filed a specific instance to the Korean NCP. The complainants were filed against the following five companies:

  • POSCO C&C, Inno Group and Pan-Pacific, which operate steel manufacturing, travel and apparel joint ventures with and/or lease land held by the Myanmar military-owned conglomerate Myanmar Economic Holdings Limited (MEHL);
  • Hotel Lotte, which has developed a hotel in Yangon on land leased from the Myanmar military; and
  • Daesun Shipbuilding & Engineering Co. Ltd., majority-owned by the Korean Eximbank, which has built landing platform docks for the Myanmar military.

On 26 February 2021, the complainants filed another specific instance against POSCO International to the Korean NCP.  The complainants allege that POSCO International supplied landing platform docks to the Myanmar military by signing a contract with the military and Daesun Shipbuilding & Engineering (a shipbuilder), in violation of the Arms Trade Treaty. The complainants also argue that POSCO International has built and delivered ships to the Myanmar regime that have been converted into warships for the Myanmar military.

The NCP joined the complaints against POSCO C&C, Inno Group, Pan-Pacific, Hotel Lotte and Daesun Shipbuilding & Engineering Co. Ltd. with the complaint against POSCO International, given the identical nature of the complainants and issues submitted.

All of the companies are headquartered in South Korea.  The complainants allege that these companies have commercial ties with the Myanmar military and/or MEHL, which is linked to the military regime and allegedly contributing to the human rights violations against the Rohingya.

The complainants allege that the companies have breached the OECD Guidelines by failing to conduct human rights due diligence to prevent, mitigate and remediate human rights abuses to which they are connected. They allege that the companies have not met their human rights responsibilities under the Guidelines, UN Guiding Principles, as well as more generally under international human rights law, international humanitarian law and/or the Arms Trade Treaty.

The complainants request intervention by the Korean NCP to urge the companies to meet their responsibilities, including cutting all ties with the Myanmar military and Myanmar military-owned businesses.

The complaints were also filed with the National Human Rights Commission of Korea and the UN Working Group on Business and Human Rights.

Relevant OECD Guidelines

Outcome

The Korean NCP received submissions from all the respondent companies with the exception of Hotel Lotte.

On 14 July 2021, the Korean NCP published its initial assessment rejecting the complaint. The NCP determined that the threshold for “contribution” had not been met by the complainants and that “there is no real benefit in performing further procedures such as additional research or arbitration with regard to the issue raised by the Complainant.” The NCP generally found the activities of the respondent companies to not be directly related to the Myanmar military nor its policies on the Rohingya minority group and therefore, if the NCP further examined the complaint, it would amount to applying the Guidelines to the acts of the Myanmar regime. The NCP also found that Daesun Shipbuilding was not a multinational enterprise with responsibilities under the Guidelines. The NCP also decided that further consideration of the complaint would not contribute to the purposes and effectiveness of the Guidelines because the companies had taken steps to minimize or end their relationship with Myanmar military-backed companies (POSCO C&C was reconsidering its business relationship with MEHL, Pan-Pacific had ended its joint venture with MEHL, Inno Group had not paid dividends to MEHL and had expressed its plan to value the human rights of workers in its operations, and POSCO International had developed human rights management guidance and was in the process of setting up detailed procedures for the guidance).

In the complainants and OECD Watch’s opinions, the Korean NCP erred in its decision in several respects. The NCP imposed an overly high burden of proof on the complainants to substantiate their complaint at the initial assessment stage. In its decision the NCP concluded that the respondent companies had not ‘contributed’ to the alleged harms – such a determination by an NCP is not required at the initial assessment stage of the NCP process. Further, the NCP’s reasoning that acceptance of the complaint would amount to applying the Guidelines to the acts of the Myanmar regime does not accord with Guidelines. The complainants did not ask the Korean NCP to make a determination about the Myanmar regime’s policy but rather the Korean companies’ responsibilities under the OECD Guidelines.

The NCP also erred by rejecting the complaint because the companies’ activities were in line with Myanmar government law and policy – companies are not excluded from their responsibilities under the Guidelines because their activities are consistent with domestic law and policy. In relation to the NCP’s characterization of Daesun Shipbuilding & Engineering as an enterprise not covered by the Guidelines, this was based on the Korean NCP’s own narrow definition of a multinational enterprise as a business operating in more than two countries. This definition is narrower than in the Guidelines itself.

Moreover, the NCP’s refusal to consider the complaint partly on the basis that the respondent companies had already taken steps to address the issues was incorrect. The NCP did not itself examine whether these companies had or would in fact end their relationship with MEHL or other military-linked businesses. For example, in relation to POSCO International, the NCP relied solely on the company’s assurance that it had adopted human rights management guidance, but in fact the company had in no way demonstrated any due diligence it conducted in accordance with the Guidelines. More generally, the Korean NCP did not examine the due diligence that was conducted by any of the respondent companies.

Finally, the NCP rejected the complaint against Hotel Lotte despite the respondent company never replying to the NCP’s requests for information. The complainant believes that the NCP should have made a separate decision for Hotel Lotte or at least suspended its decision until it received meaningful communication from the company. The complainant concludes that by rejecting the complaint against Hotel Lotte in these circumstances, the NCP has significantly undermined the authority of the NCP process.

More details

Defendant
Company in violation
Other companies involved
Complainants
Affected people
Date rejected / concluded
14 July 2021

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