Finnish technology giant Wärtsilä Corporation in partnership with sanctioned arms broker, Myanmar Chemical and Machinery (MCM) won two contracts from the junta to construct and operate two hybrid gas and solar power plants in Myingyan and Magway.
According to pressure group Justice for Myanmar Wärtsilä won both the tenders from the military-controlled Electric Power Generation Enterprise (EPGE) as part of a consortium with the Chinese corporation Dongfang Electric International Corporation and MCM.
MCM is a major arms dealer that is also involved in the production of weapons in Myanmar, in partnership with the Directorate of Defence Industries.
On March 25, 2022, MCM was sanctioned by Canada, the UK and US. In its sanctions announcement, the UK government described MCM as “a key source of weapons and commercial
support for the junta” and MCM Managing Director, Aung Hlaing Oo, as “an associate of Commander-in-Chief and coup leader, Min Aung Hlaing”.
While Wärtsilä has told Justice For Myanmar that they have now ended their business relationship with MCM, they will not disclose how they have cut out their sanctioned business partner, immediately after winning two tenders with them.
A Wärtsilä spokesperson said: “we have ceased with immediate effect all business activity or partnership involving MCM and its affiliates. In line with the rest of the international community,
Wärtsilä remains committed to the reliable and affordable development of electrification of Myanmar. In this respect, we will maintain our engagement with EPGE provided that EPGE remains free from sanctions as it is today.”
Wärtsilä refused to explain how they were able to remove MCM from the consortium for the Myingyan and Magway power projects. The corporation also refused to respond to questions regarding human rights due diligence in Myanmar, and whether they had sought advice from the Finnish government regarding their participation in junta tenders.
In the tender process MCM was represented by its Singapore subsidiary MCM Pacific Pte. Ltd. and a Myanmar subsidiary, MCM Energy Ptd. Ltd.
Days after the sanctions announcement, MCM Energy changed its name to Malikha Energy, which may be an attempt to circumvent sanctions.
Though Ming Aung Hlaing’s associate Aung Hlaing Oo left MCM in December 2021 after a Justice for Myanmar investigation exposed him as an arms dealer, he remains a director and controlling shareholder of the Singapore company.
Justice For Myanmar spokesperson Yadanar Maung said: “Wärtsilä is seeking profits from the junta that carries out atrocity crimes with total impunity.
'The Myanmar junta is a terrorist organisation that is using the electricity supply as a strategic tool in its attempt to take full control over the country.
'Power cuts have been imposed as a collective punishment and masses of people continue their defiance against the military by refusing to pay their electricity bills.
'While Wärtsilä has responded to the sanctioning of their partner MCM by ending their business relationship, we remain concerned that they are not disclosing how they have cut out their sanctioned business partner, immediately after winning two tenders with them.
'The fact that Wärtsilä entered into a business partnership with a major Myanmar military arms dealer in the first place raises serious concerns about their human rights due diligence.
'We call on Wärtsilä to be transparent, fulfil their human rights responsibilities, follow the guidance of the National Unity Government and withdraw from the Myingyan and Magwe power projects, without providing a windfall to MCM or the junta.”
Since its illegal attempted coup, the junta has targeted Myingyan and Magway with indiscriminate airstrikes and shelling, and troops have committed mass killings and rape.
Wärtsilä Corporation is listed on the Finnish stock exchange, Nasdaq Helsinki. Its biggest shareholder is Sweden’s Wallenberg family.
