With India in sleep mode on Myanmar project, China begins pipeline

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India may not yet have succeeded in launching its ambitious Kaladan Multi-Modal Transit Transport Project connecting the country’s far eastern regions with a port in Myanmar’s Rakhine state, but it’s next-door competitor China has already put a profitable crude oil pipeline in operation mode in Myanmar’s trouble-torn province under its One Belt, One Road initiative.

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Crude fact: The new crude oil pipeline will transport crude oil from the Mideast and Africa via Myanmar

The China crude oil pipeline connecting Kyaukphyu port of Rakhine in the western part of Myanmar to Kunming city in south-west China started loading consignments from the first week of May this year. It runs parallel to an already existing natural gas channel between the two countries, also originating in the Rakhine region, that became operational in 2015.

The new crude oil pipeline is designed to transport crude oil from the Middle East and Africa through Myanmar with an aim to feed China, the world’s second-largest consumer of oil. Now Beijing no longer needs to depend on the cumbersome cargo shipping through the South China Sea, requiring sailing of around 5,000 km, for its crude oil imports for the China National Petroleum Corporation (CNPC)-run refineries. The 770 km-long China-Myanmar pipelines, owned and built by Beijing with a budget of USD 1.5 billion, is expected to transfer around 22 million tons of crude oil annually or around 4,42,000 barrels a day. The pipeline is expected to transport nearly 6 per cent of China’s total imports, as per records for the year 2016. The initiative has helped Chinese companies’ plans to start operating new refineries in Yunnan province.

The oil pipeline project is a joint venture of CNPC, that has 50.95 per cent stake, and Myanmar Oil and Gas Enterprise (MOGE), with 49.05 per cent stake. Myanmar, a country in desperate need of financial support, can claim a road-right fee of USD 13.81 million for both the pipelines annually along with a transit fee of USD 1 per ton of crude oil under a 30 year agreement. Moreover, Myanmar can take 2 million ton crude oil annually from the line for its own consumption.

The agreement between the two countries to build the pipelines from the Bay of Bengal to China’s Yunnan province was signed in 2009 and subsequently the works started the next year. The 793 km-long natural gas pipeline was readied and made operational by 2015 with the transmission capacity of 12 billion cubic meters annually from the Shwe offshore field of Rakhine state. The oil pipeline, parallel to it across Myanmar, was also planned to get started in the same year, though its operation was delayed because of political differences between the two countries and also public resistance. Activists continue to claim that over 20,000 indigenous people lost their livelihoods because of confiscation of arable lands for the project.

However, the last visit of Myanmar President Htin Kyaw to Beijing in April overcame all hurdles. The most trusted ally of Aung San Suu Kyi, who runs the democratically elected National League for Democracy (NLD) government as a de-facto chief, signed the operational agreement in the presence of Chinese President Xi Jinping on April 10. Both sides agreed to make the oil pipeline operational at the earliest.

Earth Rights International (ERI), a non-governmental and non-profit organization combining the power of law and people in defence of environment and human rights, reacted to the development as “good news for Chinese investors to officially operate the project after a two-year delay”. However, it argued that ‘“here are still some major issues waiting to be solved, such as land compensation to communities, safety concerns, and ecological restoration at the project site”.

“The CNPC as one of the main investors should keep their commitment to health, safety, and the environment and solve these problems with the effective consultation with local communities,” said Valentina Stackl, Communications Manager of USA-based ERI.

Responding to this writer’s queries, she also added that when Myanmar was officially under military rule, the affected communities had no choice but to remain silent even if their legal rights were seriously violated. After the election of the NLD, more and more communities have started to stand up for their rights, not just on projects with
Chinese investors but all potential delinquent investors, stated Ms Stackl.

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The Myanmar-China Pipeline Watch Committee, an umbrella body of local community-based organizations, has lately urged the authorities to adopt efficient measures to prevent oil spills along the pipeline. It warned that oil spills could severely affect the land and coastal ecosystem harming the livelihood of thousands of residents and also asked the oil companies to follow the international marine transport regulations. The rights body also fought on behalf of the Burmese farmers who handed over their arable lands to the project authority but are yet to receive proper compensation.

Both the pipelines, laid in parallel through four provinces of Myanmar, in the end enter into the Chinese territory. All the affected villagers in central Myanmar were announced adequate compensations by the Chinese authorities, but it has not turned into reality, according to the forum. The CNPC, however, claims that the project was materialized keeping an eye on environment protection and land restoration. Moreover, emphasis was given on community development activities like building of schools, hospitals, roads, bridges, power and water supply, telecommunication arrangements, etc for the benefit of affected families across Myanmar, according to the authorities.

Even though the world media continues focusing on the Myanmar refugee crisis, China maintains its aloofness over the massive Rohingya exodus to Bangladesh and India. Ignoring the persecution of over 6,00,000 stateless Rohingya people, Beijing extended its support to Myanmar government over its counter-terrorism actions against the Rakhine Rohingya Salvation Army, which allegedly maintains links with Islamist outfits of Bangladesh and Pakistan.

The strategic relationship between China and Myanmar lately emerges triumphant, but it may be noted that both the neighbouring countries have enjoyed a trusted diplomatic relationship for a long time. The then semi-democratic government in Rangoon (now known as Yangon) recognized the People’s Republic of China in 1949 soon after the Chinese Communist Party led by Mao Zedong emerged victorious in all battle fronts. Later both the countries established a formal diplomatic relationship in 1950.

It was followed by the anti-Chinese uprising in 1967, when the agitating Burmese (now Myanmarese) people targeted the Chinese embassy in Rangoon. The Communist Chinese government took hard stand against the General Ne Win-led Burmese regime. Later, Rangoon went under complete military rule by the 1980s and its ties with Beijing improved visibly. After the 08-08-88 Burmese uprising that collapsed Ne Win’s regime and paved the way for the military junta to rule the country, China improved relations with Myanmar as the international community started isolating the General Than Swe-led regime. The military dictators rejected the outcome of the 1990 general elections, where Suu Kyi’s NLD won a landslide victory, and even put the Nobel peace laureate under house arrest.

Slowly, Myanmar became more dependent on China and it continued till a quasi-democratic government took power at Naypyidaw in 2011. The then Myanmar President Thein Sein took some strong decisions against China including the suspension of the Beijing-owned Myitsone hydropower project in Kachin province and tried to build closer ties with Europe and USA. The relationship was reorganized by Myanmar’s State counselor Suu Kyi.

India as a neighbouring democracy was expected to have better access to Suu Kyi, who herself had lived and acquired an education in New Delhi. The democracy icon on numerous occasions remembered that Mahatma Gandhi and her father General Aung Sun had enormous affection for India’s great freedom movement leader Netaji Subhas Chandra Bose, but even then New Delhi has not succeeded in reaching out to Naypyidaw visibly allegedly because of its vague foreign policies.

The Kaladan Multi-modal Transit Transport Project, starting from the Rakhine’s Sittwe port and till northeast India’s prime city of Guwahati, is waiting its commissioning for years now. The project that includes the development of Sittwe port, dredging of Kaladan river along with a road link from Kalewa in Myanmar to Aizawl in India’s Mizoram state and finally improvement of Aizawl-Guwahati highway remains incomplete in various sections.

The multimillion Indian project was conceived by the Indian Union government in 2003 and is to be entirely financed by it. The ambitious project, work on which began in 2004, is expected to bring economic activities to the under-developed Myanmarese provinces like Rakhine and Chin along with the alienated eastern Indian States.

Moreover, it was presumed as an opportunity for New Delhi to counter increasing Chinese influences in Myanmar.

But in reality, amidst all contradictions, China continues to take advantage of the situation. The Beijing administration, even playing the role of a peace broker in Myanmar, maintains secret relationship with its rebel groups including United Wa State Army (UWSA), Kachin Independence Army (KIA), Myanmar National Democratic Alliance Army (MNDAA), etc. Communist China also allegedly supports few northeast India-based separatist armed groups including United Liberation Front of Assam (Independent), which is running camps in China-Myanmar border areas adjacent to Ruili of Yunnan province, if not with a revolutionary spirit but as a card against New Delhi, which takes advantage of the 14th Dalai Lama’s comfortable shelter in its soil for decades.

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