New jade and gemstone policy expected to boost the industry

The government is drafting its first ever jade and gemstone policy with the help of the private sector and foreign institutions. When complete, the policy is expected to set consistent practices and guidelines for the jade and gemstone industry. It is also meant to help lawmakers form better by-laws and rules aimed at creating a fair business environment for the industry while protecting the interests of the public.

This is the first time the industry is attempting to draw up a policy for the jade and gemstone sectors, The Myanmar Times understands. It also comes after the government last year submitted amended laws and by-laws for the industry to Parliament, which has yet to approve the legislation.

U Aung Nyunt Thein, managing director of the Myanmar Gem Enterprise, which is under the Ministry of Natural Resources and Environmental Conservation, said the industry requires an overarching policy before new laws or by-laws are drafted. “Typically, the laws and rules will be drawn based on the policy, which would ideally have been written with long term sustainability in mind. A strong, forward-looking policy is needed to guide any subsequent amendments or additions made to the legislation,” he said.

The policy will cover procedures for the approval of licenses, testing and production, collecting tax, wider market penetration for value-added products and the preservation of the environment and social wellbeing.

“If approved, this policy will be the official guideline for the industry. We drafted the policy with the aim of enabling all stakeholders to benefit from this sector,” said U Maw Tun Aung, Myanmar country manager for NRGI.

In drafting the policy, tripartite teams from the Central Statistics Organisation, Myanmar Alliance for Transparency and Accountability and the National Resource Governance Institute (NRGI) were despatched to the mining zones of Myitkyina, Mogoke, Mandalay and Monywa to meet with stakeholders to discuss their concerns. These included miners, jewellers and civilian group representatives as well as the government.

The policy, now on its third draft, was formed by combining the stakeholders’ feedback and suggestions from international experts and experience. “In my opinion, this policy is a good one as it will regulate the mines and consider the interests of residents affected by the mining activities,” said U Aung Nyunt Thein.

Adding value

Importantly, it will help the industry develop beyond merely supplying raw gems and jade to jewellers in Thailand and China, which process the stones or use them to create jewellery which is sold internationally at generous margins.

Myanmar, though, has not been able to break out of producing raw materials to more value-added products such as processed stones or locally-made jewellery. Meanwhile, around 80 percent of the raw materials produced at the mines are smuggled illegally out of the country, according to U Tun Hla Aung, a local gems trader and former secretary of the Myanmar Gem and Jewellery Entrepreneurs Association.

According to research and forecasts by Global Witness, although data from China showed that the country imported US$12 billion worth of jade and stones from Myanmar in 2014, the entire jade and gemstone trade with China during the year was estimated to be worth about $31 billion.

“It has been a long time that Myanmar has not been able to control the illegal gems trade to China due to the lack of manpower and regulations. Meanwhile, the China government has largely turned a blind eye to this matter. There has been a gap in the jade and gems sector for years,” said U Tun Hla Aung.

One of the reasons is the lack of avenues for local miners and traders to sell the stones. “Currently, there is only way to trade raw stones and jade, which is during the biannual gem emporiums. There is no opportunity to sell them at other times and that is why most of the stones are sold illegally, said U Tun Hla Aung.

With a new policy in the works though, it is expected that the government will soon enforce regulations against illegal trade and help local miners add value to the raw materials produced at their mines, said U Maw Tun Aung.

Mining investments

The policy is being drawn up after the Ministry of Natural Resources and Environmental Conservation this year permitted local and foreign investments in Myanmar’s mining blocks under the new Myanmar Mining Rule enacted February 2018.

Mining activities had been suspended in 2016 so that the ministry could assess the industry’s compliance with environmental rules and regulations. Due to unregulated mining activities in the past, local livelihoods and the environment were damaged. Meanwhile, many miners and traders have failed to pay the taxes due to the government.

Now, foreign companies have once again been able to invest in mining. Last month, Australia mining company PanAust was given permission to conduct feasibility studies at a large-scale block in Wuntho. Miners from Japan, Australia and China have also applied for permission to mine.

U Aung Nyunt Thein warned though, that the policy is so far still a draft which has yet to be implemented. “Even if the policy is a good one, we still have to see if it is approved and how it is implemented on the ground,” he said.

Local businessmen agreed that it has been hard for the sector to enforce rules in the past. For example, there have been orders for several mines to be refilled and the permits returned to the government after they had expired, said U Kyaw Myint, a resident of Hpakant, where many mining sites are located. So far though, some activities are still taking place and the mines have yet to be refilled.

Source: Myanmar Times

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