Singapore may be internationally liable and obliged to pay reparations for harm caused by SGX-listed company

October 20, 2021

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October 20, 2021: A legal memorandum from leading international barrister Felicity Gerry QC found that international law and guidance places due diligence obligations on the Singapore Exchange (SGX), and possible liability on the Monetary Authority of Singapore and the Singapore Government, in relation to companies doing business with the Myanmar military.

The legal memo found that Singapore has an international legal obligation “to investigate, prevent and cease transactions that amount to wrongful acts”, which are applicable to business transactions with the Myanmar military and its business interests.

Legal remedies would be “easily pursued and enforced” against SGX if the Myanmar military’s financial organs are found to be in breach of international laws and/or compliance regulations including international human rights and humanitarian law.

The legal memo authored by Felicity Gerry QC, counsel on the list at the International Criminal Court and at the Bar of England and Wales and Victoria, Australia, and Daye Gang, also of the Victorian Bar in Australia, focussed on the listing of Emerging Towns & Cities Singapore (ETC), the developer of the Golden City complex, under a build-operate-transfer agreement with the Myanmar Army’s Quartermaster General’s Office (QMGO). The memo was written at the request of the Australian Centre for International Justice and Justice For Myanmar.

In February, SGX initiated regulatory actions against ETC after Justice For Myanmar published an investigation into payments to the Myanmar army, implicating funds raised on the SGX. ETC has commissioned two independent reviews: one by Nexia TS Advisory into contractual payments to the QMGO and fundraising; and another by Kelvin Chia Partnership into the applicability of sanctions and compliance with “applicable laws”.

However, the legal memorandum finds these reviews may not address international law risks in light of the 2019 UN Independent International Fact-Finding Mission on Myanmar (FFMM) report into the Myanmar military’s economic interests, and ongoing atrocity crimes.

The legal memo also raised the possibility of reputational and sanctions risks for the SGX, its regulator the Monetary Authority of Singapore, and by extension, the Singapore Government, should it not prevent continued payments from ETC to the Myanmar army.

Yadanar Maung, Justice For Myanmar spokesperson:

“This legal memorandum raises urgent questions for SGX and the Singapore government. As the memo points out, Singapore has been the largest foreign investor in Myanmar. ETC is just one of many Singapore companies that have commercial ties to the Myanmar military junta and its conglomerates. The memo shows that there could be serious legal consequences for Singapore authorities if they continue to turn a blind eye to the complicity of Singapore companies in the Myanmar military’s atrocity crimes. We welcome SGX’s regulatory actions against ETC and appeal to SGX and MAS to stop ETC’s payments to the Myanmar army. The Singapore government must end the use of its territory as a base for business with the criminal Myanmar military.”

Rawan Arraf, Executive Director at the Australian Centre for International Justice:

“This wide-ranging legal memorandum demonstrates the necessity for the Singapore Exchange and Singaporean authorities to seriously examine their obligations under international law, to include global governance compliance. As part of their examination of the issues, consideration must be made to providing effective redress to those that may have been harmed by business with the Myanmar military. More broadly, businesses operating in Myanmar need to undertake their due-diligence obligations broadly and seriously, and to ensure they promptly end all commercial ties with the Myanmar military and its business interests.”

According to the memo, potential international law issues arising from ETC’s continued listing on the SGX include:

● state and corporate responsibility under the UN Guiding Principles on Business and Human Rights;

● due diligence risks associated with the OECD Guidelines for Multinational Enterprises;

● supply chains and modern slavery;

● state responsibility for internationally wrongful acts;

● implications arising out of the Singapore-Myanmar bilateral investment treaty;

● commercial liability risks in relation to genocide, construction contracts, torts and land disputes;

● criminal liability risks in relation to atrocities, the crime of genocide, human trafficking, terrorist financing and money laundering;

● international sanctions risks;

● risks arising out of applying bribery, corruption legal frameworks

● potential risks of breaches of the Convention on the Rights of the Child, of which Singapore is a signatory; and

● breaches of international humanitarian law.

The legal memo was published today by ACIJ and Justice For Myanmar, and has been sent to Singapore Exchange Limited, the Monetary Authority of Singapore, Emerging Towns and Cities Singapore Limited and ETC’s sponsor, RHT Capital Pte. Ltd.

An excerpt of Nexia’s report was published on September 22.

Download the legal memorandum by Felicity Gerry QC and Daye Gang here.

Media contact:

Australian Centre for International Justice: Rawan Arraf: +61 450 708 870

Justice For Myanmar: