Foreign companies in Myanmar face simultaneous and often contradictory pressures from home-country governments and investors, host-country political realities, and internal stakeholders.
Key words: Myanmar, political legitimacy, business, human rights.
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Since the 2021 military coup in Myanmar, companies operating there have faced an immediate and uncomfortable question: What does it mean to continue doing business in a country whose military rulers lack democratic legitimacy, are not recognised by the majority of the world’s governments, and are rapidly becoming an international pariah?
The coup placed companies in a deeply uncomfortable position. Remaining in Myanmar carried the risk of being seen as accommodating, and funding, an illegitimate regime. Leaving raised its own serious concerns, not only about the welfare of workers and communities in the country, but also about the loss of assets, business networks, and commercial relationships built up over many years.
This article examines the tensions that emerged between political and organisational legitimacy in post-coup Myanmar, drawing on cases across sectors to explore how businesses attempted to navigate the dilemma of whether to stay or exit, and how to do so responsibly.
A three-dimensional legitimacy challenge
Multinational enterprises operating in post-coup Myanmar faced what can be characterised as a three-dimensional legitimacy challenge. The pressures came simultaneously from their home countries, the host country environment, and from within their own organisations; and the pressures frequently pointed in contradictory directions.
Home country legitimacy
From the perspective of home country legitimacy, companies faced mounting pressure to take a clear position. The United States, United Kingdom, European Union, Canada, and Australia moved to impose targeted sanctions on military leaders, military-controlled entities, and close associates of key military personnel.
The US government also issued a formal business advisory warning companies of the heightened risks of operating in Myanmar given increasing military control over the economy. Sanctions were, however, uneven. Japan, India, and South Korea—all with significant economic ties to Myanmar—imposed no targeted sanctions, creating gaps in international pressure that companies from those countries were able to exploit. And even where formal sanctions were not imposed, there were informal pressures (such as from investors, consumers, and civil society) that created significant reputational risks for companies perceived as contributing, directly or indirectly, to the finances of the military regime.
Host country legitimacy presented a different and more complex problem
Myanmar’s contested political landscape meant that virtually every business decision carried implications for who was, in effect, being recognised as holding legitimate power. Companies that chose to remain faced accusations of conferring recognition on the junta while those that chose to leave faced criticism for abandoning local staff and removing livelihoods from workers who had no part in the political crisis.
This challenge was compounded by the deeply entrenched position of the military in the Myanmar economy. This is a position built over decades through patron-client relationships and the dominance of interests across banking, energy, telecommunications, manufacturing, and many other sectors, making it extremely difficult for businesses to avoid association with the military or to ensure that their operations were not, in some measure, contributing to the military’s revenues.
Pressure from within the companies
Local employees and managers in Myanmar faced direct personal consequences depending on whether their employer chose to stay or leave. They also, in many cases, had a far more immediate understanding of conditions on the ground than those making decisions at corporate headquarters. Those at headquarters in Europe, North America, or Japan were responding to a different set of pressures (from boards, investors, and their own workforces) and were more exposed to the reputational consequences of being seen to remain in a country under international condemnation. These two levels of the organisation were not always pulling in the same direction. The tensions existed at multiple levels: between local knowledge and global reputation, and between the welfare of Myanmar workers and the expectations of international stakeholders, adding a further, more complex dimension to an already difficult set of decisions.
Taken together, these three layers created a situation with no safe way out. Companies were being pushed to leave by home-country stakeholders and others while host-country realities made exit complicated and costly. They were urged by some to protect workers and by others to cut ties with the regime. Local managers and distant headquarters often read the situation differently. Whatever decision a company made, it risked losing legitimacy in the eyes of at least one of the audiences to which it was answerable.
Corporate responses: three illustrative cases
The range of corporate responses to the coup reveals something of the complexity of the legitimacy challenges companies faced. Three cases are particularly instructive.
The Japanese beverage company Kirin Holdings
Kirin Holdings was among the first of the major multinationals to announce, on February 5 2021, that it would terminate its partnership with its military-linked joint venture partner. This announcement happened just days after the coup. However, Kirin’s position was deeply compromised before that point. Since 2015, Kirin had held a 51 percent stake in Myanmar Brewery Limited through a joint venture with Myanmar Economic Holdings Limited (MEHL), one of the two major military-owned conglomerates whose interests span dozens of sectors of the Myanmar economy. It had added a further 51 percent stake in Mandalay Brewery Limited in 2017. MEHL directly finances the military and its senior commanders, meaning that Kirin’s dividend payments were, in effect, flowing to the institution that would go on to stage the coup.
Human rights organisations had been raising these concerns for years. Even after the military’s campaign of ethnic cleansing against the Rohingya population of Rakhine State in 2017, which Human Rights Watch documented as including crimes against humanity, Kirin continued its partnership, and its subsidiary. When the military seized power in February 2021, the arrangement became impossible to defend. While Kirin’s announcement was swift, the actual exit was not. Negotiations with MEHL broke down, and Kirin had to pursue arbitration in Singapore. The shares were not finally transferred until 2022, which was more than a year after the coup. This raised the uncomfortable question as to why it took a coup for Kirin to make the decision to exit.
The Norwegian telecommunications company Telenor
The Telenor case was considerably more complicated. It faced a dilemma particular to the nature of its services. Mobile connectivity and social media were essential infrastructure for civil society and pro-democracy activists organising resistance to the coup, yet continuing operations also carried the risk of enabling the junta’s surveillance. The dilemma was acute in both directions. Staying meant risking being compelled under duress to hand over user data or facilitate surveillance that could be used to target dissidents, while leaving meant that the same surveillance infrastructure would pass into the hands of those with even fewer incentives to resist military pressure.
Telenor ultimately chose to exit. It sold its operations to M1 Group, a Lebanese investment firm, which subsequently transferred 80 percent of its stake to Shwe Byain Phyu, a Myanmar conglomerate with documented ties to the military, including business relationships with sanctioned military-owned entities. Civil society organisations condemned the sale on the grounds that it transferred both the network infrastructure and the personal data of some 18 million users into the hands of parties unlikely to resist junta pressure. Myanmar activists have since initiated legal proceedings against Telenor, alleging that customer data was used by the military to track and target dissidents. It was a demonstration of how difficult it is to exit responsibly when there are no genuinely safe buyers available.
Notably, the consequences for Telenor did not end with the sale. The Norwegian Parliament’s Standing Committee on Scrutiny and Constitutional Affairs opened a formal inquiry into the company’s conduct. Then, in September 2026, Norwegian authorities charged Telenor with two separate offences:
- Complicity in crimes against humanity, which relates to the company’s conduct during its operations in Myanmar from the day of the coup to the completion of the sale in March 2022, including the handing over of customer data to the military.
- Sanctions violations which related to the sale itself, involving the transfer of prohibited surveillance technology to M1 Group without authorisation from Norway’s Foreign Ministry.
Police searched the company’s Oslo headquarters. For companies from liberal democracies, this is a stark reminder that home country accountability can follow even after exiting a politically volatile operating environment.
France’s TotalEnergies and the US’ Chevron
Oil and gas companies Total Energies and Chevron faced a different kind of entanglement. Rather than a joint venture with a military-owned conglomerate, both companies operated through production-sharing agreements with the Myanmar Oil and Gas Enterprise (MOGE); a state-owned entity that came directly under military control when the junta appointed new ministerial oversight on February 2, 2021, the day after the coup. MOGE is not simply a commercial partner. It is the primary conduit through which natural gas revenues flow to the military regime and has been described as the junta’s single largest source of foreign revenue, generating over one billion US dollars annually.
For TotalEnergies and Chevron, staying meant they were directly underwriting the regime’s violent attack on resistance. This position became increasingly difficult to justify as the human rights situation deteriorated. Both companies announced their withdrawal on January 21, 2022, citing the deteriorating situation, a decision that preceded, though was later formally aligned with, the European Union’s sanctions on MOGE imposed in February 2022.
Yet the manner of TotalEnergies’ exit illustrated the limits of responsible withdrawal in a structurally entangled situation and sector. Under existing contractual terms, TotalEnergies’ 31.24 percent stake was distributed proportionally among the remaining partners (Chevron, Thai state energy company PTTEP, which became the new operator, and MOGE itself, whose share increased to 21.8 percent). As Human Rights Watch noted, TotalEnergies’ exit increased the junta’s share of the gas field, achieving the opposite of its stated purpose. When Chevron followed in April 2024, nearly two years later, the same thing happened: its 41.1 per cent stake was redistributed to PTTEP and MOGE, which pushed up MOGE’s share. Two principled exits, but the junta ended up with more, not less.
Sectoral variations in the legitimacy dilemma
While the cases above illustrate some of the pressures multinationals faced, it is important to recognise that the legitimacy challenges took quite different forms depending on the sector in which a company operated.
The food and beverage sector
Kirin’s situation illustrates how pre-existing entanglements with military-linked entities can leave companies particularly exposed when a political crisis erupts. Unlike TotalEnergies and Telenor, Kirin was in direct partnership with a military-owned conglomerate. That distinction left no room for ambiguity about the nature of the relationship. The military was not a regulator, or a downstream recipient of revenues. It was a co-owner sitting across the table. And in a consumer-facing sector, the association was visible in a way that offshore gas extraction or telecoms infrastructure simply is not. It was this combination, direct military ownership and high consumer visibility, that made Kirin’s position untenable so quickly once the coup occurred.
Extractive industries
Companies in the oil and gas sector operate through contracts and joint ventures with state-controlled entities, thereby providing revenue to the government. Exits are legally complicated and, as the TotalEnergies case showed, even a genuine decision to leave can make things worse: when a company withdraws, its shares are redistributed to whoever remains.
The telecommunications sector
The legitimacy challenge in the telecommunication sector was of a different nature entirely. It was less about revenue flows and more about the control of information and the physical safety of users. In the months leading up to the coup, Reuters reported that mobile operators had already been ordered to install intercept technology that would allow the military to monitor calls, messages, and user locations—part of a sweeping effort to exert control over communications ahead of its seizure of power. From the day of the coup itself, the junta moved to weaponise telecommunications infrastructure more openly, imposing nationwide internet shutdowns and blocking social media platforms within days. Mobile operators found themselves caught between the legal obligations of the country in which they operated and the mounting pressure to resist demands that put their users directly at risk. Telecom companies that stayed bore the risk of complying with state surveillance, while exiting companies risked being forced to hand the operations to buyers who were even less likely to resist junta demands. The pressure was not simply commercial or reputational; it directly affected the lives and safety of the people the network served.
Broader implications
Similar dynamics can be found elsewhere. In Nigeria’s Niger Delta, multinational oil companies have operated for decades alongside state security forces implicated in serious human rights violations. In the Lithium Triangle (Argentina, Bolivia, and Chile), the rights of Indigenous communities have been impacted by mining operations for transition minerals, and many instances of states failing to protect them. Democratic backsliding across Southeast Asia is producing conditions where these tensions are likely to deepen.
Myanmar is not a one-off. It demonstrates with particular clarity that corporate legitimacy in contexts of political crisis is not a single problem but a layered one. Companies face simultaneous and often contradictory pressures from home-country governments and investors, from host-country political realities, and from their own internal stakeholders; and no single decision can satisfy all of them at once.
The cases examined here also show that the nature of the legitimacy challenge varies significantly by sector. The industry sector plays a key role in shaping both its options and the consequences of any decision it makes. Kirin was in direct partnership with a military-owned conglomerate. TotalEnergies was locked into state energy infrastructure. Telenor was providing vital communications services. Three different situations, three different sets of constraints.
Perhaps the most counterintuitive finding from Myanmar is that exit does not resolve the human rights situation, even when companies act on their business and human rights commitments. Rather, it shows the level of complexity in that in contexts of military rule, there is no decision that satisfies all stakeholders and no exit that leaves everyone unharmed.
For researchers and policymakers, Myanmar offers a stark reminder that corporate legitimacy in contexts of political crisis is layered and shaped simultaneously by multiple actors: international pressure, host-country realities, and a company’s own sectoral position. The cases examined here show that there are no clean answers. Myanmar’s crisis is not over, and neither are the questions it raises.
Image: The shopfront of Norwegian telecommunications company Telenor in Yangon, 2015. Credit: Remko Tanis/Flickr.
