MPCC (Myanmar POSCO C&C) that POSCO STEELEON operates in Yangon,
Myanmar,
produces coated and color steel. The produced steel is used as roofing
materials that
help improve residential conditions for people in Myanmar and also for
the wall
structure of plants that are up and running for the nation’s
industrialization.
When MPCC was incorporated in 1997, it was mandatory pursuant to
Myanmar’s law
to form a joint venture with a local state-owned company, and this
compelled us to
establish and operate MPCC as a joint venture with MEHL (Myanma
Economic Holdings Ltd.).
Equity structure: 70% owned by POSCO STEELEON and 30% by MEHL
MPCC’s Response to ESG Issues
In relation to the recent human rights issues that arose in Myanmar, POSCO
STEELEON is taking every precaution to ensure that none of the finances that
originate from MPCC’s business operations are associated with such human
rights issues.
Work is underway to acquire MEHL’s stake in MPCC to ultimately end this
joint venture. In tandem with this, a decision was made through the Annual
General Meeting of Shareholders held in January 2021 that no dividend
payment would be made until human rights issues were resolved. It should be
also noted that POSCO STEELEON has halted land rent payment on its local
factory site in accordance with the economic sanctions imposed by countries
around the world.
POSCO STEELEON remains independent in its business conduct on the back of
its status as the largest shareholder and thus is capable of continuously
cutting off access to financial resources as mentioned above. While MPCC’s
normal operations are restrained amid the unstable political and economic
circumstances in Myanmar, MPCC keeps each and every one employed to help
ensure stable livelihoods for locally hired staff.
Such efforts made by MPCC were introduced in the End of Mission
Statement (view document)
prepared by the UN Special Rapporteur on the situation of human rights in
Myanmar when he visited Korea in 2022. While the statement did not
explicitly mention POSCO STEELEON, the Rapporteur, based on the meeting he
had with POSCO STEELEON, commented “They explained that they have worked to
stop revenue from flowing to the junta while not hurting the livelihoods of
their Myanmar staff. This is commendable..”.
As such, POSCO STEELEON will continue to take a balanced approach in making
necessary measures, ensuring that finances from MPCC are not associated with
human rights issues in Myanmar while maintaining stable employment for local
employees.
In addition to our responses to MEHL, we reached out to a third-party
organization in 2023 to perform human rights due diligence to review MPCC
(Myanmar POSCO C&C) for its adherence to international human rights norms
and pertinent local regulations. The due diligence process was implemented
according to the key metrics determined in such areas as safety and labor.
The results helped us pinpoint areas for improvement, including regular
training and new systems, and work is now underway to make necessary
improvements. Relevant details will be disclosed in our Corporate
Citizenship Report to be published in 2024.
Such initiatives plainly demonstrate the continued focus and commitment of
POSCO STEELEON in preventing any transgression on the part of MPCC involving
human rights violations inside or outside its business operations, while
ensuring transparent disclosures for stakeholders.
The steel produced by MPCC goes to retrofit residential roofs or
build factory walls to improve the overall living environment for
the people of Myanmar. It also promotes the industrialization of the
nation, ultimately contributing to the economic and social
advancement of Myanmar. Furthermore, MPCC engages in a wide array of
social-giving activities - from constructing schools for the
underserved to installing clean wells.
Moving forward, MPCC will pursue shared growth with its communities
and fulfill its corporate social responsibility to gain trust from
and build rapport with local community members.