Japan financed railway projects in Myanmar are proceeding with the illegal junta, an investigation of company and project disclosures and leaked documents has revealed.

The projects have continued despite the military’s illegal control over Myanma Railways and use of trains to move troops, arms and other supplies, showing serious human rights due diligence failures by the Japan International Cooperation Agency (JICA) and the corporations involved.

The current projects are financed through multi-phased JICA loans signed before the military’s illegal coup attempt for the first phase of the Yangon-Mandalay Railway Improvement Project and for the upgrading of the Yangon circular railway line. Work on the Yangon to Mandalay line is broken into two phases and is currently underway for the Yangon to Taungoo section.

The projects involve the upgrading of railway track, signals, stations and bridges, the construction of a depot and the supply of new trains, carried out by multinational corporations from Japan and the EU, in partnership with Myanmar military crony companies. Public and leaked documents, including tax filings released by Distributed Denial of Secrets, reveal:

• Construcciones y Auxiliar de Ferrocarriles (CAF) and Mitsubishi Corporation are supplying new trains for the Yangon-Mandalay line and Yangon circular line under a deal signed in December 2020.
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• Daiwa House subsidiary Fujita Corporation, Sumitomo Corporation and Nippon Signal Co. Ltd. are doing track and station upgrades, bridgework and work on signals and communications on the line between Yangon and Bago under a contract signed in 2019.
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• Leaked tax records show Fujita received revenues of 29.7 billion kyat from Myanma Railways for work on the Yangon to Bago section of the project in 2022, equivalent to over US$15 million.
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• Tekken Corporation and Rinkai Nissan Construction are working on the Bago to Nyaunglebin section of the track under a deal awarded in 2018.
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• Tokyu Construction is working on the Nyaunglebin to Taungoo section, with Toenec Corporation doing signalling and communications upgrades.
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• Crony companies working on the project include A1 Group, Max Myanmar and Shwe Taung Group.
  

Railways are a strategic logistical asset for the junta. Trains have come under attack for their military role, including on the Yangon-Mandalay track, which passes through Naypyidaw. In September 2021, the Kyaukse PDF carried out an operation against a train reportedly carrying arms and rations for the Myanmar military, disguised as a mail train. In October 2021, the Myittha PDF carried out an operation against a train reportedly carrying troops from Mandalay to Yangon.

The railway improvement projects strengthen the Myanmar military’s logistical capacity and there is a high likelihood that the new trains and improved rail infrastructure will be used by the junta in its ongoing attacks against the people of Myanmar, which amount to war crimes and crimes against humanity. Japan and the corporations involved in the projects risk complicity in those crimes.  

The junta has a history of abusing transportation aid for military purposes. In April, the Japanese government confirmed that the junta had misused two civilian boats to transport troops and arms in Arakan State in 2022, and lodged an official complaint. The boats were donated in 2017 and 2019 to the National League for Democracy-led government.  

The junta also misused the donation of Danish boats transferred before the attempted coup, placing them under control of junta police, an agency responsible for ongoing crimes against humanity.  

In response to questions regarding the junta’s potential use of the trains for military purposes, JICA stated,

the cooperation is not aiming for the benefit of the Myanmar military. Since the Yangon-Mandalay Railway Improvement Project is also implemented as a Japanese ODA [Official Development Assistance] project, and it was stipulated in the exchange of note and the bilateral agreement between two countries stipulate that the project shall not be used for military purpose.

However, neither JICA nor the corporations involved can prevent the junta from using rail for military purposes.

By allowing the junta to continue the projects, the Japanese government is effectively recognising its unlawful control over Myanma Railways and thereby awarding legitimacy to the junta. This is despite the fact that the military’s attempted coup was illegal. The military junta has been overwhelmingly rejected by the Myanmar people, the junta does not have effective control of Myanmar’s territory and it is not recognised internationally as the government of Myanmar.  

The continuation of the projects are a direct attack on the estimated 90% of Myanma Railways’ 30,000 workers who courageously joined the Civil Disobedience Movement, refusing to serve the illegal military junta. As a result of their role at the forefront of the Spring Revolution, railway workers have been subjected to arbitrary arrest, torture and the loss of income and staff housing, sacrificing their lives and livelihoods.

JICA’s support has also provided fodder for propaganda, featured prominently in junta print media and television. The junta’s transport and communications minister, former navy chief Tin Aung San, has visited JICA’s Yangon-Mandalay rail project on at least two occasions for photo opportunities. Tin Aung San controls Myanma Railways and is sanctioned by the US, Canada, EU, UK and Australia.

Justice For Myanmar calls on the Japanese government and the companies involved in the projects to immediately suspend work until there is federal democracy in Myanmar, in accordance with their international human rights obligations.

Trains for the junta

The manufacture and supply of new trains is being carried out through a partnership between Mitsubishi Corporation and the Spanish corporation, CAF, under a deal worth over €500 million signed weeks before the coup attempt. CAF is manufacturing 246 Diesel Electric Multiple Units in Spain for Myanma Railways, using Japanese components. Justice For Myanmar could not confirm if any of the units have already been handed over to the junta.  

CAF recently began recruiting staff for its “brand-new international team in Myanmar”. One of the roles is Rolling Stock Warranty Project Manager “to perform maintenance on machinery and equipment installed in the new rolling stock”. A second position is Senior Lead Warranty and Maintenance Technician “to ensure the overall smooth and efficient operation of the rolling stock corrective fault finding and maintenance”. This suggests CAF may provide ongoing support to the junta through the maintenance of Myanma Railways trains.

CAF’s supply of trains to the junta and planned activities in Myanmar could breach EU sanctions on the State Administration Council (SAC), which controls Myanma Railways and the revenue stemming from the project, and benefits through increased economic and logistical capacity.  

CAF refused to provide Justice For Myanmar with information on its human rights due diligence, the status of the supply of trains, its plans to establish operations in Myanmar, and the military’s use of trains, responding,

as a quoted Company and also considering the nature of the data, we unfortunately cannot share any of the information requested on such specific detail… Following the application of the internal procedures established regarding Due Diligence, no Human Rights or international sanctions violations arising from the CAF Group’s involvement in Myanmar (or any other project) have been detected.

Mitsubishi also refused to provide information about the project and its human rights due diligence in Myanmar, citing business confidentiality. Mitsubishi responded, "MC [Mitsubishi Corporation] believes that it is important to identify and analyze the negative impacts of our business on human rights and the environment, to ensure that such impacts are avoided/mitigated, and to fulfill our responsibilities. MC is conducting human rights and environmental due diligence with this in mind."

JICA refused to disclose whether trains have already been transferred to the junta, stating that they cannot provide details on the status of individual projects.  

Track work for the junta

In 2019, Daiwa House Group subsidiary Fujita Corporation, Sumitomo Corporation and Nippon Signals were jointly awarded a contract from Myanma Railways for repair and maintenance work on the track between Yangon and Bago, and for the upgrading of signalling systems.

Leaked tax filings show that Fujita revenues from Myanma Railways were 29.7 billion kyat in 2022, equivalent to over US$15 million.

Fujita Corporation is a longstanding partner of the Myanmar military as an investor in the Y Complex development, under construction on land leased from the Office of the Quartermaster General of the military through a build-operate-transfer agreement.

According to tax filings, Fujita has subcontracted work to I&H Engineering, a Myanmar joint venture between Japan’s IHI Corporation and the junta-controlled Ministry of Construction, thereby providing revenue back to the junta.  

Fujita also subcontracted construction work to A1 Construction since the military’s coup attempt, demonstrating further human rights due diligence failures. A1 Construction is part of A1 Group, a crony conglomerate and an arms supplier of the Myanmar military through its subsidiaries Terabit Wave Co. Ltd. in Myanmar and Bright Sky Pte. Ltd. in Singapore.

Leaked Nippon Signal filings show the company received revenues of 3.95 billion kyat for undisclosed projects in Myanmar for the six months to March 2022, equivalent to US$2.2 million. Nippon Signal has also done work on the Yangon circular since the coup attempt.

The upgrading of the Bago to Nyaunglebin section was awarded to a consortium of the Japanese corporations Tekken and Rinkai Nissan Construction, who partnered with the crony company Max Myanmar in 2018. Tax filings show Tekken and Rinkai Nissan have continued work on the project with the junta following the military’s coup attempt.  

Tekken and Rinkai Nissan’s partnership with Max Myanmar demonstrates further human rights due diligence failings. Max Myanmar was identified by the UN Independent International Fact-Finding Mission on Myanmar as a significant donor in support of the Myanmar military’s 2017 genocide against the Rohingya, which recommended that “Max Myanmar should be criminally investigated and, if appropriate, prosecuted for making a substantial and direct contribution to the commission of the crime against humanity of ‘other inhumane acts’ and persecution as outlined above in the applicable legal framework on business officials and criminal liability.”  

For its section of the track, the Tekken-Rinkai consortium has subcontracted switch and signalling work to the Japanese businesses Toenec Corporation and Kurihalant Co. Ltd., which were active in the project as recently as 2022, tax filings show.

The Nyaunglebin to Taungoo section was awarded to Tokyu Construction in 2018 and the company has continued work following the coup attempt, leaked tax filings show. Tokyu has a joint venture with the crony company Shwe Taung, which was also identified by the UN Fact-Finding Mission for making donations to the Myanmar military in support of its campaign of genocide in 2017.

Railway projects emboldening junta and undermining democracy

Instead of upholding the democratic rights of Myanmar people and their international human rights obligations, the Japanese government and multinational corporations have so far chosen to effectively recognise the junta and its illegal takeover of Myanma Railways.

The Japanese government and multinational corporations have continued business as usual under contracts signed before the coup attempt, legitimising the junta, increasing its logistical capacity and emboldening it as it commits ongoing war crimes and crimes against humanity with total impunity.

Justice For Myanmar calls on the Japanese government and the businesses involved in the railways improvement projects to immediately suspend work until Myanmar’s transition to federal democracy.

Japan should stand with the people of Myanmar and fulfil its international obligations by imposing sanctions on the junta and its business interests and suspending all development assistance projects in Myanmar.

The Spanish government should investigate CAF’s business with the military junta and take swift action if EU sanctions have been breached.  

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Update (June 2, 2023): Mitsubishi Corporation provided a comment, which has been added above.

Following publication, Asahi reported that the Japanese government will not provide additional yen loans for the Yangon-Mandalay railway improvement project.