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The Environmental Conservation Rules ("EC Rules"), which detail the environmental policy and implementation framework of the 2012 Environmental Conservation Law, were enacted on 5 June 2014. The EC rules were drafted by the Ministry of Environmental Conservation and Forestry ("MOECAF"), which also drafted the 2012 Environmental Conservation Law.
According to the EC Rules, the MOECAF is authorised to specify: (a) the projects, businesses, services, or investments for which an environmental impact assessment ("EIA") must be conducted; and (b) the businesses, work sites or factories that can potentially damage the environment and that require prior permission from the relevant authorities ("Permission List"). The activities in the Permission List must be approved by the Union Government and confirmed by the Environmental Conservation Committee ("Committee"), which is chaired by the Minister of Environmental Conservation and Forestry. It is important to note that even if a project, business, service or investment does not fall under those for which an EIA must be conducted ("EIA List"), the MOECAF may still require an Initial Environmental Examination ("IEE") in order to determine whether an EIA is in fact necessary. Separately, the MOECAF, with the approval of the Committee, is authorised to prescribe: (a) the amount of liability attributable to a person or entity causing environmental damage; and (b) the amounts of contribution to be made to the Environmental Management Fund by persons or entities engaged in extraction of natural resources.
In this regard, it would be important for foreign investors to monitor any developments with respect to the finalised EIA List, given that such developments would affect whether an investor would have to prepare an IEE or EIA; an IEE or EIA is generally considered a more challenging, expensive and time-consuming process. Conceivably, the foreign investor may have to design an Environmental Management Plan as well. In this respect, it will also be interesting to see how consistent the EIA List is with the newly issued Myanmar Investment Commission ("MIC") Notification No. 50/2014, which also contains a revised list of business activities that require an EIA. It is noted that this list within MIC Notification No. 50/2014 relates primarily to: (a) "large" projects (for example, excavation of mineral resources, production of petroleum and natural gas, as well as building of petroleum factories and large dams), and (b) projects in protected areas such as places of cultural heritage, national parks, and places that are near sources of public drinking water. As such, it remains to be seen whether the EIA List and Permission List dovetails with MIC Notification No. 50/2014, given what appears to be an overlap in scope. This is especially relevant given that EIAs which accompany MIC applications are forwarded to the Environmental Conservation Department of the MOECAF for its review.
To conclude, while the enactment of the EC Rules demonstrates Myanmar's desire to ensure that investments and business activities are in compliance with international best practices with respect to environmental issues, it remains to be seen how the MOECAF would review and scrutinise such IEEs and EIAs, having regard to the capacity of the MOECAF. The MOECAF should also ensure that activities requiring such IEEs and EIAs are justified having regard to the considerations of environmental protection, and ensure that such IEEs and EIAs are not simply an additional hurdle for foreign investors to overcome as this may stunt foreign investment.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
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Rajah & Tann
Myanmar Company Limited
Room No. 408(A), Prime Hill Business Square, No. 60,
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Yangon, Myanmar
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Contacts: Chester TohDirectorD +65 62320220chester.toh@rajahtann.comJainil Bhandari DirectorD +65 62320601jainil.bhandari@rajahtann.com| Rajah & Tann Asia is a network of legal practices based in Asia. |
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