Telenor sale potentially illegal under Norwegian law
Newly disclosed information means Telenor’s sale of its Myanmar operations may be illegal under the Norwegian Sanctions Act and European Council Regulation No. 401/2013, and the current sale should be canceled or paused to conduct human rights due diligence.
FEM has questioned the legality of the sale under Norwegian law in letters to the heads of Telenor and the Norwegian government, as well as representatives of parties with an interest, namely the European Union, President Biden of the USA, and Prime Ministers of Australia and Denmark.
On 8 July 2021, Telenor announced that it had agreed to sell its Myanmar operations to the Lebanese company M1 Group. Telenor later stated that this controversial decision was at least partly due to their desire not to contravene both EU and Norwegian sanctions by installing interception technology required by Myanmar’s military.
According to international media, on 21 January 2022, the military approved Telenor’s sale to M1 Group on the condition that it partnered with a local company, Shwe Byain Phyu Group (SBP). Two weeks later, national media reported that SBP would be the majority shareholder, and M1 Group would be the minority shareholder.
SBP has reportedly worked in partnership with at least one military-controlled company already sanctioned by Norway and the EU. At the same time, SBP has apparently had no prior experience working in the telecoms sector.
Telenor’s assets, namely its customer data and its telecoms infrastructure, could be misused by any future owner. Expert organisations including FEM previously called on Telenor to “cancel or pause the sale and to conduct human rights due diligence that is transparent and constitutes the ‘credible impact assessment’ called for by the UNGPs”.
Norwegian Sanctions Act
The sale could actually contravene the exact same Norwegian and EU sanctions that Telenor cited in its decision to sell.
Article 3a of European Council Regulation No. 401/2013, as amended by Regulation No. 2018/647, and implemented under Norway’s Sanctions Act, prohibits any sale of dual-use technology to any entity inside Myanmar if those technologies “are or may be intended, in entirety or in part, for military use”.
Telenor’s Myanmar operations are a “dual-use technology” under EU Council Regulations because the infrastructure could be used for military purposes to intercept communications. Although media reports state that the buyer is registered in Singapore, SBP as a majority shareholder, is Myanmar-based. Because of entrenched secrecy in Myanmar, there may not be enough available information to indicate whether or not SBP is a military “front company” as defined by the European Commission. However, SBP’s reported relationship with the military and its lack of telecoms experience establishes, at least until more information is available, a prima facie risk that the dual-use technology “may be intended” for military use, as prohibited under Article 3a.
Norway’s legal obligations and commitment to President Biden
The sale could conflict with the Norwegian Government’s legal obligations and the Norwegian Prime Minister’s commitments to the USA, Australia, and Denmark.
European Council Regulation No. 401/2013, as amended by Regulation No. 2018/647, and implemented under Norway’s Sanctions Act, places a legal obligation on the Norwegian Government to authorise the provision of “any telecommunication […] services of any kind to, or for the direct or indirect benefit of, Government of Myanmar […] or any person or entity acting on their behalf”. It also requires the Norwegian Government as a regulator not to give authorisation if there are “reasonable grounds to believe that the end-user” of any dual-use technology “might be military”.
The aforementioned prima facie risk that Telenor’s dual-use technology may be intended for military use may indeed be sufficient “reasonable grounds” for the Norwegian Government’s regulatory purposes of reviewing authorisation.
Furthermore, on 10 December 2021, Norway’s then Prime Minister Erna Solberg committed together with President Biden and the prime ministers of Australia and Denmark, to “use export control tools to prevent the proliferation of software and other technologies used to enable serious human rights abuses”. The Norwegian Government is both a regulator and a majority shareholder in Telenor, and any sale may therefore conflict with both the letter and the spirit of the Norwegian Prime Minister’s international commitment and leadership.
Reviewed assessment of sale
Telenor’s position to protect its corporate values and to avoid contravening EU and Norwegian sanctions is laudable. However, there is now a serious risk that Telenor may contravene those same sanctions through selling.
Telenor is in a very difficult situation, as of course are its customers in Myanmar who are suffering greatly under the coup. However, a rushed and uninformed sale of a dual-use technology that not only includes highly sensitive data, but could be used by the military to commit or facilitate further human rights violations is not a solution and may indeed be legally actionable.
The risk is substantial enough to warrant serious reconsideration by both Telenor and the Norwegian Government.
Given the potential risk of contravening Norwegian and EU sanctions, and undermining international commitments, FEM calls on Telenor to cancel or pause the sale and conduct human rights due diligence that is transparent and constitutes the ‘credible impact assessment’ called for by the UNGPs, and if they do not, the Norwegian Government as both regulator and majority shareholder must require them to do so.
3. European Council Regulation No. 428/2009 of 5 May 2009, Article 2(1).
4. European Commission Guidance Note on the Implementation of Council Regulation No. 401/2013, point 9(b)(e).
5. “Prima facie”: sufficient information to make an initial presumption requiring further information to establish as a clear fact.
7. “Reasonable grounds”: a set of facts that would cause an ordinary person to believe beyond a mere suspicion.
8. Joint Statement by President Biden, Prime Minister Scott Morrison of Australia, Prime Minister Mette Frederiksen of Denmark, and Prime Minister Erna Solberg of Norway on the Export Controls and Human Rights Initiative