A proposed US$38.6 million deal for the Myanmar military to purchase two Airbus CASA C-295s from the Royal Jordanian Air Force is “under process” and the military has signed a US$4.8 million agreement for the luxury refurbishment of an Airbus A319-112 formerly used by Myanmar Airways International (MAI). Both deals involve former Air Mandalay CEO Sai Kham Park Hpa’s private company Aero Sofi Co. Ltd.

The purchases are detailed in documents released today by Justice For Myanmar. If completed, they could cause immense harm to ethnic communities and inflame the brutal civil war raging in Arakan, Kachin and Shan States. The C-295s are designed to support combat and would likely be used in ethnic areas, where the military is committing war crimes and crimes against humanity. They are also big money items using funds that could otherwise support basic needs of the people of Myanmar, such as access to healthcare for all.

This blatant disregard for public funds comes as the civil war in western Myanmar continues to drive mass displacement of ethnic communities. Thousands are being forced to shelter in camps and are unable to grow food due to the dangers of conflict, such as landmines, the Myanmar military’s indiscriminate attacks and freedom of movement restrictions.

People like U Maung Tun Sein, displaced to a camp in Rathedaung Township, who in November, told Arakan independent media outlet Development Media Group that “we dare not harvest the paddy with harvesters because we are afraid of artillery shelling.” 

The conflict in western Myanmar has led to the killing of civilians, including children, as houses and communities have been burnt to ashes. Over 105,000 people have been displaced by ongoing conflict in western Myanmar, according to recent UN figures, with a further 125,000 in protracted displacement in Arakan and Chin states. Within all regions of Myanmar, the UN reports that 100 children were killed or maimed in the first three months of 2020.

Despite that, the Myanmar military continues to terrorise these most vulnerable communities and inflame the brutal civil war raging in Arakan, Kachin and Shan States. On Nov. 12, 2020, Arakan independent media outlet Narinjara News reported that the military confiscated 500 bags of rice from Tin Nyo IDP camp in Mrauk-U township, Arakan State, causing food shortages within the camp. Narinjara News also reported that children living in displaced person camps are severely malnourished and desperately needed aid.  

Tactical Airbus planes may support war crimes and crimes against humanity

Aero Sofi has submitted a proposal to the Myanmar military for the purchase of two Airbus CASA C-295s from the Royal Jordanian Air Force for US$38.6 million. C-295s are manufactured by Airbus’ defence division, commonly used for troop transportation and the deployment of paratroopers. Organized Crime and Corruption Reporting Project (OCCRP), an international consortium of investigative journalists, confirmed with a Jordanian source familiar with the C-295 deal that Jordan is selling the planes, although the source did not know which country the planes are being sold to.

According to the Airbus website, the C-295 “is fully certified and routinely operates day and night in combat missions in all-weather extreme.”  

The plane can also be weaponised and used for electromagnetic and communications surveillance.

The proposed C-295 package includes the training of eight pilots and four mechanics “at the facility of Airbus-CASA military training services in Seville Spain (or) suitable training centre in another location (or) customer location, Myanmar”. Aero Sofi commits to assisting in further technical crew training for the Air Force as needed. The proposal specifies that “after sales service on follow-up maintenance… and spare parts support will be assisted at all time according to Airbus-CASA-OEM guidelines”.

According to the Aero Sofi proposal, the sale was scheduled for completion on Dec. 30, 2020. The person who supplied the documents outlining the deal for the purchase of the Jordanian planes said the sale is “under process.” The source said representatives of Aero Sofi had travelled to Jordan in relation to the proposal. Justice For Myanmar cannot confirm the current status of the proposal.  

If the purchase goes ahead, any Airbus involvement in follow-up maintenance and certified training for the Myanmar military could breach EU sanctions on Myanmar. The global headquarters of Airbus is in the Netherlands and their main office is in France.  

The possible purchase of C-295s follow recent acquisitions of European aircraft by the Myanmar military. In January 2019, Yangon-based media agency Frontier Myanmar reported that the Myanmar military purchased an Airbus AS365 helicopter and two ATR 72-500s. ATR is a joint venture between Airbus and Italy’s Leonardo. Frontier Myanmar reported that “the sale to the Tatmadaw of these aircraft by a European company may constitute a breach of sanctions.”

The military’s luxury spending 

In 2019, the Myanmar military also agreed to pay over US$4.8 million for the conversion of an Airbus A319-112 (registration XY-AGR) formerly used by MAI, an airline owned by KBZ Group and 24 Hours Group. Justice For Myanmar cannot confirm the current status of the agreement.

KBZ Group is a close partner of the Myanmar military, operating jade and ruby mines in partnership with military conglomerate Myanma Economic Holdings Limited (MEHL). MEHL dividends are distributed to units throughout the military and to top generals, financing the military’s crimes. In 2017, KBZ donated almost US$2.5 million to the Myanmar military at the height of its campaign of genocide against the Rohingya.

The VIP conversion of the aircraft shows a callous disregard for the people of Myanmar, spending unnecessary public funds when millions struggle to meet minimum basic needs with poor access to healthcare.

Public funds should be used for essential services that benefit the people.

Not luxury aircrafts for war criminals.

The Airbus A319 conversion includes a first-class compartment with two VIP seats that spin 360 degrees and recline 180 degrees. The interior is finished with luxury leather, new carpets and in-flight entertainment on personal devices. Huge monitors display moving maps. A 12-seat “business class” section also includes inflight entertainment on personal devices. First and business class are equipped with on-board Wi-Fi. The third zone includes 60 economy seats.

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The military’s ownership of KBZ’s Airbus A319 raises urgent human rights concerns over the due diligence of Airbus and third-party sellers. It is possible that Airbus after sales support may also apply to the A319, which could breach the EU arms embargo on Myanmar.

Air KBZ initially purchased the plane in 2012 from Hermes Aviation Ltd (Ireland), a subsidiary of NYSE-listed Fly Leasing Ltd. While Justice For Myanmar cannot confirm details of the plane’s transfer of ownership from Air KBZ to the Myanmar Air Force, documents from Myanma Insurance and Pana Harrison (Asia) Pte. Ltd. (Singapore) show the plane reinsured under Air KBZ ownership on Aug. 29, 2018 and Sept 1, 2018 respectively for one year.  

In 2019, the UN Fact-Finding Mission recommended that KBZ be criminally investigated “for making a substantial and direct contribution to the commission of the crime against humanity of “other inhumane acts””. The same report recommended that businesses cut all financial ties with the Myanmar military.

These recommendations have so far gone unheeded. The Myanmar military and KBZ continue to operate with impunity.

Myanmar’s aviation industry is dominated by crony businesses such as KBZ, and profits can end up benefiting the Myanmar military, at the expense of the people of Myanmar.

The “VIP configuration” involves HAECO Xiamen, a subsidiary of aircraft engineering firm HAECO, based at Hong Kong International Airport. HAECO is owned by Swire Group, a UK conglomerate through its Hong Kong-listed subsidiary Swire Pacific. Swire Pacific’s aviation division owns Cathay Pacific. Under the contract between Aero Sofi and the Myanmar Air Force, the Hong Kong Civil Aviation Department will certify the conversion of the plane.

Swire Group must also ensure that all of its subsidiaries end commercial ties with the Myanmar military.

The military’s private procurement network

Aero Sofi, based in the Novotel Hotel in Yangon, is run by former-Air Mandalay CEO Sai Kham Park Hpa, a UK citizen. Sai Kham Park Hpa previously worked for British Airways and at Heathrow Airport in London. He co-founded Aero Sofi after Air Mandalay went out of business in 2018.

Aero Sofi’s managing director and co-owner, Patrick Aung, is also a Director of National Tower Development Co., a business set up to serve military-owned mobile network operator Mytel. The Aero Sofi website lists a range of aviation services including aircraft trading, spare parts, maintenance and military aviation insurance.

The Airbus A319 conversion contract was signed by Brig Gen Soe Tin Latt from the Office of the Commander-in-Chief of the Air Force and Patrick Aung, Managing Director of Aero Sofi. It is witnessed by Sai Kham Park Hpa.

Under the agreement, the Air Force is required to pay the US$4.8 million into a United Overseas Bank account in Singapore in the company name Asia Trading Group Pte Ltd. Asia Trading Group is 55% owned by Kendy, a Singapore citizen. Sai Kham Park Hpa holds the remaining 45%.

Aero Sofi’s business ties with the Myanmar military is evidence of a domestic arms procurement industry that bypasses sanctions and arms controls, reaping profits from Myanmar’s ongoing civil war in ethnic areas, where the military commits ongoing war crimes and crimes against humanity.

It also funds and fuels corruption. In the pricing detail of the VIP conversion agreement, US$2.38 million is allocated to “others”. This unspecified spend accounts for almost half of the total cost of the conversion.

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Dismantle the military cartel  

Failing to provide any details of the biggest sum in the contract is unacceptable. This blatant disregard for public funds cannot continue.

Without democratic oversight and civilian control, military spending will continue to drain the wealth of the people of Myanmar, transferring public funds into the hands of military generals and their cronies.

The Myanmar military causes immense harm to ethnic peoples and new weapons purchases inflame the brutal civil war raging in ethnic states. Jordan must halt arms sales to Myanmar.

Companies like Airbus and Swire Group must cut all ties with the military, which continues to commit grave human rights violations with total impunity.  

Without action, the people of Myanmar will continue to suffer.

Without action, troops will keep terrorising ethnic communities and the cycle of violence and suffering will continue.

It is time to end the Myanmar military’s abuse of power. The military must be fully divested from the Myanmar economy, placed under democratic control and their conglomerates disbanded. Stolen assets, which the military accumulated through decades of corruption, must be returned to the people. Public funds must be spent on providing the people with basic needs.

The military cartel must be dismantled, if Myanmar is to achieve sustainable peace.

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Explore the evidence

See the procurement files and Ministry of Defence budget data here: http://www.justiceformyanmar.org/stories/myanmar-military-budget-and-procurement-files

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