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Following the attempted coup in February 2021, Myanmar’s military¹ has relied on an arsenal of weapons² to carry out summary executions, massacres and other human rights atrocities in response to peaceful protests and growing anti-coup armed resistance in Myanmar. Analysis of witness statements and of video and photographic evidence in relation to such human rights violations shows security forces armed with a variety of locally produced firearms, including sniper rifles,³ MA-1 semi-automatic rifles,⁴ and Uzi-replica BA-93 and BA-94 sub-machine guns.⁵ In addition, analysis of images of weapons used by soldiers and the military-controlled Myanmar police force shows that much of the small arms ammunition used against peaceful protestors in 2021 carries the headstamp marking of the Myanmar military’s Directorate of Defence Industries (DDI), confirming local manufacture.⁶

Since the late 1950s, and in particular with the coming to power of the so-called State Law and Order Restoration Council (SLORC) military junta in 1988, Myanmar’s military has invested significantly in strengthening its domestic capacity to produce weapons as a necessary means for releasing the military from a dependence on external supplies. This ambition is illustrated by:

• the initial establishment of weapon production factories in Yangon and in the central, Bamar- majority parts of the country and the continuous establishment of new factories, including some that have yet to become fully operational;
• the progressive increase in stockpiles of strategic raw materials to ensure adequate and uninterrupted supply for continuous in-country production of weapons;
• the modernisation of auxiliary industries – such as iron and steel plants – to provide necessary materials for production;⁷
• the continuous upgrading of existing weapons and diversification of production lines; and
• the strategic diversification of sourcing bases (countries and companies) to limit the impacts of current and potential future sanctions and embargoes.

As a result, Myanmar’s military has gradually become largely self-sufficient in manufacturing a range of weapons. By way of illustration, the DDI currently has an extremely robust production capacity for small arms⁸ to meet its operational needs,⁹ which are focussed almost exclusively on the brutal internal suppression of the Myanmar population.

As its atrocities mount, the military’s need to further insulate itself from economic and external diplomatic pressure will likely lead to increased efforts aimed at the modernisation of existing weapon factories, the construction of additional factories and the development of auxiliary domestic industries for supplying the factories with necessary raw materials.

Despite robust production capabilities, however, the DDI is still reliant on international supplies, including for a variety of raw materials, parts and components and end-items, as well as machinery and technology, for the sustained production – both licensed and un-licensed¹⁰ – of the weapons in its arsenal.

This report maps out the Myanmar military’s in-country weapon production which takes place at factories commonly referred to as KaPaSa (after the Burmese name for the Directorate of Defence Industries, Karkweye Pyitsee Setyone) or, in the military’s own terms, as “Defence Industry” factories (DI). The report provides an overview of some of the critical supplies that appear to enable this production, and it identifies companies whose products are currently used by the DDI to successfully sustain its weapon manufacturing at scale.¹¹ The report also identifies companies that enable the DDI to purchase products by brokering deals or otherwise acting as intermediaries for the DDI.¹² In doing so, these companies also enable Myanmar’s military to continue to commit gross human rights violations, amounting to crimes against humanity, war crimes and genocide.

This report by the Special Advisory Council for Myanmar (SAC-M) finds that:

• Some of the DDI’s production appears to be taking place under license (including expired licenses). However, the licensing situation for many of the weapons currently produced at the KaPaSa factories remains unclear. Whether licensed or unlicensed production, the DDI appears to have obtained the technology and know-how to produce a variety of its weapons through various types of transfer of technology (ToT) deals. Over the years, the types of ToT deals that the DDI has entered into with companies – including State-owned companies – from Italy and (then) West Germany, Singapore, Israel, South Korea, North Korea, China and Ukraine have included the receipt of entire weapon production plants (turn-key projects), receipt of direct support from engineers associated with the owner of the technology, joint venture agreements, and KaPaSa factory staff being trained by original license-holders. Some companies that have provided ToTs to the DDI appear to have received commercial contracts, including in Myanmar’s oil and gas sector, in exchange.
• While the DDI is able to partially produce and domestically source some of the critical raw materials used for its arms production, it still imports important quantities of such materials, including from China through the China State-owned company China North Industries Group Corporation Limited (NORINCO). China has also played an important role in supporting the establishment and operation of auxiliary industries, such as iron and steel plants and copper mines, that are either directly connected with weapon production factories in Myanmar or whose outputs feed the factories’ production. The DDI is currently also seeking to invest in iron and steel plants in the country, including in Pyin Oo Lwin, Mandalay Region. Consequently, foreign companies involved in the extraction and/or processing of certain raw materials in Myanmar may find themselves contributing to, or being directly linked to, sustaining the Myanmar armed forces’ arms production capabilities.
• The DDI also depends on imports of parts and components ready to be used in weapons made in the KaPaSa factories, including fuses, cast boosters, detonating caps, igniters and electric detonators. Available data indicates that many of these parts and components come from companies domiciled in India and China. Information obtained by SAC-M suggests that the poor quality of many of the Chinese products upon which the DDI depends has prompted the DDI to progressively turn to other countries, including India, for critical supplies, and that the DDI is planning for other countries, including India, to play an increasingly important role for the weapon production industry in Myanmar. Several companies domiciled in India have also been identified as supplying the DDI with end-items such as optical sights to be fitted to made-in-Myanmar small arms such as sniper rifles. The military’s need to import optical sights is likely to continue as the military is moving towards the increased use of optical sights in its small arms and light weapons design and manufacture.
• Automated machining is a critical step for weapon manufacturing at scale and modern Computer Numerical Control (CNC) machines with turning, milling and grinding functions, as well as electro-discharge machines, play a critical role. SAC-M has identified machines manufactured by companies legally domiciled in Austria, Germany, Japan, Taiwan and the United States (US) that are currently used by the Myanmar military at its weapon production factories. SAC-M has also identified various software programmes made by companies legally domiciled in France, Israel and Germany currently being used at KaPaSa factories for operating some of the CNC machines.
• Singapore functions as a strategic transit point for potentially significant volumes of items – including certain raw materials – that feed the Myanmar military’s weapon production. Companies domiciled in Singapore have been identified as brokering deals and exporting items to the DDI or to associated civilian front companies for the military in Myanmar. In addition, according to credible information received by SAC-M, Taiwan functions as an important transit point for the DDI’s purchase of high precision CNC machines, including from European manufacturers, for KaPaSa arms manufacturing. In addition, individuals formerly associated with Myanmar’s armed forces suggest that, with the assistance of Mottama Holdings Limited – a Myanmar-based conglomerate and reportedly the current intermediary between the DDI and Chinese arms industry company NORINCO – the DDI also regularly sends CNC machines from KaPaSa factories to Taiwan where they are serviced by technicians associated with the European manufacturers of the machines, after which they are shipped back to Myanmar and to the DDI. It appears as though the absence of Taiwanese sanctions on Myanmar facilitates these types of transactions and shipments to and from Myanmar for the performance of critical maintenance.

The leader of the Myanmar military, Senior General Min Aung Hlaing, and his top military leaders must be held accountable for the human rights violations that they have perpetrated. However, this report emphasises that concrete action must also be taken to address the corporate responsibility to respect human rights in Myanmar. This requires action both by the companies that have been identified in this report and by their home governments.

Under international human rights law, all States have a duty to protect against human rights abuses by third parties, including business enterprises, through appropriate policies, regulation and adjudication. In relation to the manufacturing and export of weapons and associated items and machinery specifically, this expectation is reflected in several multilateral agreements of relevance to the arms industry, including the Arms Trade Treaty¹³ and dual-use goods regimes, such as the Wassenaar Arrangement,¹⁴ the European Union (EU) Dual-Use Goods Regulation¹⁵ and current sanctions regimes that apply to Myanmar.¹⁶ For the home States of the companies that have been identified, adhering to these legal provisions requires them to apply export controls on a number of items – including sub-components, end-items and machinery and technology – that could be used for arms production.

At present, it is unclear to what extent the home States of companies have upheld this responsibility in relation to the products that have been identified in use at the Myanmar military’s weapon production factories and auxiliary industries. SAC-M recommends that the home States identified in this report investigate and, as relevant, initiate administrative and/or legal proceedings against the companies whose parts and components, end-items and machinery and technology are relied upon by the Myanmar military’s Directorate of Defence Industries. States should also adopt targeted sanctions against the KaPaSa, its leadership and its network of brokers that have been identified in this report.

Companies have a responsibility to respect human rights. This means that they should act with due diligence to avoid infringing on the human rights of others and to address adverse human rights impacts with which they are involved.¹⁷ The responsibility to respect is independent of States’ abilities and/or willingness to fulfil their human rights obligations. In practical terms, and in relation to the Myanmar military’s weapon production, meeting this responsibility means that companies are expected to apply their own due diligence in relation to the risks of potential harmful end-use of their products,¹⁸ and to put in place measures to prevent or mitigate such risks. For products that are covered by export controls, companies are not absolved of the responsibility to respect human rights by the mere fact that their home State has granted the necessary export permits. Companies identified in the report should immediately stop doing business with the Myanmar military’s Directorate of Defence Industries and associated military entities and civilian front companies for the Myanmar military, and they should investigate how their products have ended up being used for the manufacturing of arms by the military in Myanmar. Beyond this, companies should also take steps to prevent future harmful end-use of their products through robust due diligence to identify, prevent, and mitigate the risk of harm associated with the sale/licensing and deployment of their products. In relation to harms that have already been suffered by civilians in Myanmar, companies should provide for, or cooperate in, the remediation of such harms, including by collaborating with any future legal or administrative proceedings.

Lastly, it should be noted that this report does not undertake the immense task of mapping out the Myanmar military’s arms production and associated value chains¹⁹ in their entirety. Undertaking such an endeavour is a key recommendation of this report. Put differently, additional, longer-term research is needed to identify additional critical supplies with a view to disrupting the Myanmar military’s weapon production. This undertaking would fill an important gap in the current research on Myanmar’s armed forces, which tends to focus on the military’s acquisition of weapons from elsewhere, rather than weapons that are made in the country. To this end, SAC-M encourages interested parties to follow-up on the present research where it has left off. To sustain such future work, SAC-M invites the submission of information, on a continuous basis, that could lead to the identification of additional companies that supply or support the Myanmar military in its manufacturing of weapons.²⁰

Purpose and Methodology

Since the military’s crackdown on the 1988 pro-democracy uprising, arms embargoes and sanctions have been imposed on Myanmar by foreign governments. So far as arms are concerned, these types of measures have principally sought to prohibit the trade of military or dual-use goods that may be used by the Myanmar military for internal suppression. Important as they may be, these measures have not been fully effective in preventing the military from committing atrocities against the civilian population. On the one hand, this failure stems from the fact that several UN member states continue to sell weapons to the military.²¹ An equally important factor, however, is the fact that Myanmar’s military can produce a large variety of weapons in-country.

Weapons made in the country’s so-called KaPaSa factories have been, and continue to be, used by Myanmar’s military for widespread, systematic and indiscriminate attacks on civilians, as evidenced in publicly available reports and video/photographic evidence, and corroborated by information received by SAC-M from individuals formerly associated with the Myanmar armed forces or experts on made-in-Myanmar weapons. For example:

• Post-coup military offensives in Karenni / Kayah State have involved the systematic and massive use of landmines – including locally produced M14 anti-personnel landmines – in and around villages in south-eastern Karenni / Kayah State, acts that may amount to war crimes.²² Photographs reviewed by the Land Mine and Cluster Munition Monitor indicate that antipersonnel landmines manufactured by Myanmar were captured from the Myanmar Armed Forces by non-state armed groups every month from January to September 2022 and in virtually every part of the country.²³ In August 2022, antipersonnel mines manufactured by and in the possession of the Myanmar military were captured in both the northwest and southwest of the country, indicating extensive mine use by the armed forces.²⁴
• Following the 2021 attempted coup, the military and police responded to peaceful protests with in- country made weapons – including a variety of rifles²⁵ and grenades²⁶ – to assassinate protestors.
• In March 2019, during armed conflict between the military and the Arakan Army (AA), at least five people were killed when the army opened fire on Say Taung village in northern Rahkine, using rounds and artillery produced at a KaPaSa factory.²⁷ Throughout the two-year period of conflict with the AA, the military regularly fired into villages in Rakhine State with locally produced small arms and ammunition, injuring or killing civilians, damaging civilian houses and other structures, and causing mass displacement. Investigation into military attacks in Rakhine in 2019 also indicates that the military systematically fired explosive weapons with wide area effects, including locally produced mortars and associated projectiles, into civilian areas.²⁸
• The military’s genocidal atrocities inflicted on Rohingya in Rakhine State in 2016 and 2017 involved the killing of Rohingya civilians by the military and Border Guard Police using a variety of DDI-made small arms, including the MA-3 MK I and G3 rifles used during the Inn Din massacre.²⁹

In short: weapons produced by the Myanmar military in-country at its KaPaSa factories have been used in the military’s widespread and systematic attacks against civilian targets, prior to, during and after the 2021 attempted military coup, and continue to be so.

Picture of the Inn Din massacre. This photo was taken on the day the ten Rohingya men were killed during the so-called Inn Din massacre in September 2017. The picture, obtained from a Buddhist village elder and authenticated by witnesses before being published by Reuters,³⁰ shows, to the left, a soldier carrying a G3 rifle, and to the right, a soldier carrying a MA-3 MK I assault rifle, both locally manufactured and likely used for the executions.

Over a period of one year, SAC-M has mapped out the Myanmar armed forces’ in-country weapon production and the value chains that enable this production. The research has entailed open- source investigation, including review of user-generated content in Burmese and English posted on a wide variety of social media forums and discussion groups (open and closed). SAC-M has also reviewed leaked budget-related documents (2016-2021) from the Myanmar military-controlled Ministry of Defence (MOD) and the DDI as well as shipment records from subscription-based import/export databases. In addition, SAC-M has interviewed approximately 30 individuals, including former soldiers of the Myanmar armed forces as well as weapon experts and experts on the weapon manufacturing industry in Southeast Asia broadly and Myanmar specifically.^31,32

SAC-M hopes that this report will contribute to a greater understanding of the Myanmar military’s weapon production and the global value chains that feed this production to ensure that more effective international action can be taken to protect the rights of the Myanmar people, including through targeted sanctions, engagement with identified companies to prevent future supplies reaching the DDI and the network of KaPaSa factories and, as necessary, targeted accountability-oriented proceedings.

The DDI currently has an extremely robust production capacity for small arms to meet its operational needs, which are focussed almost exclusively on the brutal internal suppression of the Myanmar population.

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Footnotes:

¹ This report uses the terms Myanmar’s armed forces and Myanmar’s military interchangeably to refer to the army, the navy and the air- force, all of which contribute to the KaPaSa factories’ production lines and receive weapons for use from these factories.

² In this report, the terms “arms” and “weapons” (and associated terms such as “arms industry” or “weapon industry” as well as “arms manufacturing” or “weapon manufacturing”) are used interchangeably as a collective term to refer to any weapons other than weapons of mass destruction. This term encompasses a wide range of equipment, including battle tanks, armoured combat vehicles, large-calibre artillery systems, combat aircraft and unmanned aerial vehicles, attack helicopters, warships, missiles and missiles launchers, landmines, cluster munitions, small arms and lights weapons, and ammunition.

³ Fortify Rights, 24 March 2022, “Nowhere Is Safe – The Myanmar Junta’s Crimes Against Humanity Following the Coup d’Etat,” p. 45. Available at: https://www.fortifyrights.org/downloads/Nowhere%20is%20Safe%20-%20Fortify%20Rights%20Report.pdf (Accessed 10 January 2023).

⁴ “Myanmar: Vast Arsenal and Notorious Troops Deployed during Nationwide ‘Killing Spree’ Protest Crackdown – New Research,” Amnesty International, 11 March 2021. Available at: https://www.amnesty.org/en/latest/news/2021/03/myanmar-arsenal-troops- deployed-crackdown/ (Accessed 10 January 2023).

⁵ “Myanmar: Vast Arsenal and Notorious Troops Deployed during Nationwide ‘Killing Spree’ Protest Crackdown – New Research,” Amnesty International, 11 March 2021. Note that BA-93 and BA-94 small arms are no longer in production in Myanmar and have been largely replaced by the MA-series of small arms. Some BA-93 and BA-94 weapons remain in use, in particular by the police and border guard force as these often receive weapons that are no longer used by the armed forces.

⁶ “Arms Trade Bulletin March – April 2021,” International Peace Information Service (IPIS), 10 May 2021. Available at: https://ipisresearch.be/weekly-briefing/arms-trade-bulletin-march-april-2021/ (Accessed 10 January 2023).

⁷ Since the 2021 attempted coup in particular, the Myanmar military has increasingly prioritised import-substitution and self-sufficiency by imposing new import substitution policies and through renewed efforts to re-open and operationalise stated-owned factories that had previously been suspended by the National League for Democracy government due to concerns over economic viability. See, for example, “Junta attempts to reopen steel mill once dismissed as dept trap,” Myanmar Now, 26 August 2021. Available at: https://myanmar-now.org/en/news/junta-attempts-to-reopen-steel-mill-once-dismissed-as-debt-trap (Accessed 10 January 2023).

⁸ Small arms refer broadly to weapons designed to be used by one individual. Small arms typically include self-loading pistols and revolvers, rifles and carbines, sub-machine guns, assault rifles and light machine guns.

⁹ Vining, M., 2019. “State SALW production and Transfers in Myanmar,” unpublished background paper, Geneva: Small Arms Survey, Quoted in Picard, M., Holtom, P., Mangan, F., 2019, “Trade update 2019: Transfers, Transparency South-East Asia Spotlight,” Small Arms Survey, pg. 51. Available at: https://www.smallarmssurvey.org/resource/trade-update-2019-transfers-transparency-and-south-east-asia-spotlight (Accessed 14 January 2023).

¹⁰ Both licensed production and unlicensed production involve the acquisition of technology by an actor that did not previously possess it for the production of a specific weapon (or component of a weapon). In a licensed production agreement, the licensee – in this case the Myanmar military’s DDI – is manufacturing a product for which it is granted production rights under certain conditions, while the licensor retains the ownership of the intellectual property necessary for production. Unlicensed production, on the other hand, involves the acquisition and use of manufacturing technology without the consent of the original owner. See Small Arms Survey, 2007, “Guns and the City,” Chapter 1. Multiplying the Sources: Licensed and Unlicensed Military Production. Available at: https://www.smallarmssurvey.org/resource/small-arms-survey-2007-guns-and-city (Accessed 14 January 2023).

¹¹ Listed in the Annex to the present report.

¹² Listed in the Annex to the present report.

¹³ The Arms Trade Treaty entered into force in December 2014.

¹⁴ The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (1996).

¹⁵ Regulation (EU) 2021/821 entered into force on 9 September 2021. It replaces the previous Dual-Use Regulation, Regulation (EC) No.428/2009.

¹⁶ For example, currently, the Directorate of Defence Industries in Myanmar – overseeing the in-country production of arms – is subject to sanctions by the European Union (and in consequence by all EU member states), the US, Canada, the UK and Japan.

¹⁷ This responsibility is anchored in the United Nations Guiding Principles on Business and Human Rights, the global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity, and they provide the internationally accepted framework for enhancing standards and practices with regards to business and human rights. The Human Rights Council unanimously endorsed the Guiding Principles in its resolution 17/4 of 16 June 2011.

¹⁸ In this report the term end-use risks refers to situations in which products have been misused in some way, repurposed for some unauthorised use, or incorporated into some other product that is then used in a way that harms human rights.

¹⁹ A value chain is the range of activities and processes needed to create a product and get it to market and, ultimately to an end user (in the case of KaPaSa production, the end-user being the DDI or associated military-controlled entity).

²⁰ Information can be communicated to the following email address: [email protected]. Other secure methods of communication are available on request.

²¹ See, for example, A/HRC/49/CRP.1. Conference Room Paper of the Special Rapporteur on the situation of human rights in Myanmar: “Enabling Atrocities: UN Member States’ Arms Transfers to the Myanmar Military,” February 2022; A/HRC/42/CRP.3. Report of the Independent International Fact-Finding Mission on Myanmar, “The economic interests of the Myanmar military,” August 2019. Available at: https://www.ohchr.org/en/documents/thematic-reports/ahrc49crp1-conference-room-paper-special-rapporteur-enabling-atrocities (Accessed 14 January 2023).

²² Amnesty International, 20 July 2022, “Myanmar: Military’s use of banned landmines in Kayah State amounts to war crimes.” Available at: https://www.amnesty.org/en/latest/news/2022/07/myanmar-militarys-use-of-banned-landmines-in-kayah-state-amounts-to-war-crimes/ (Accessed 10 January 2023).

²³ Land Mine and Cluster Munition Monitor, Country Profile: Myanmar/Burma, last updated 17 November 2022.

²⁴ Land Mine and Cluster Munition Monitor, Country Profile: Myanmar/Burma, last updated 17 November 2022.

²⁵ See, for example, Fortify Rights, March 2022, ‘Nowhere is Safe – The Myanmar Junta’s Crimes Against Humanity Following the Coup d’Etat,’ pg. 45; Amnesty International, Press Release of 11 March 2021, ‘Myanmar: Vast arsenal and notorious troops deployed during nationwide ‘killing spree’ protest crackdown – new research.’

²⁶ In Bago, in April 2021, junta security forces attacked civilian protestors, killing at least 82 people, including through the use of MG-2 rifle grenades made by the DDI. See Myanmar Witness, 11 April 2022, “Violence against protestors in Bago.” Available at: https://www.myanmarwitness.org/reports/violence-against-protestors-in-bago (Accessed 10 January 2023).

²⁷ Moe Myint, “5 Civilians Killed as Tatmadaw Troops Open Fire on Village in N-Rakhine: Witnesses,” The Irrawaddy, 22 September 2019. Available at: https://www.irrawaddy.com/news/burma/5-civilians-killed-tatmadaw-troops-open-fire-village-n-rakhine-witnesses.html (Accessed 10 January 2023).

²⁸ Amnesty International, 29 May 2019. ‘“No one can protect us”: War crimes and abuses in Myanmar’s Rakhine State.’ Available at: https://www.amnesty.org/en/documents/asa16/0417/2019/en/ (Accessed 10 January 2023). In relation to attacks on the Ywar Haung Taw village, an Amnesty International military expert confirmed the tail-booms of 120 mm and 60 mm mortars, noting that the matching colour and stencilling suggested they were likely made in Myanmar.

²⁹ Lone, W., Soe Oo K., Lewis, S., and Slodowski, A., “Massacre in Myanmar – a special report,” Reuters, 8 February 2018. Available at: https://www.reuters.com/investigates/special-report/myanmar-rakhine-events/ (Accessed 10 January 2023).

³⁰ Lone, W., Soe Oo K., Lewis, S., and Slodowski, A., “Massacre in Myanmar – a special report,” Reuters, 8 February 2018.

³¹ It should be noted that information about the DDI in general, and the KaPaSa factories in particular is limited and only paints, at best, a very partial picture. In addition, publicly available information tends to be circular often leading back to the same sources, making it challenging to independently verify. In light of this, the report has sought to triangulate and verify, through multiple sources and, in particular, through individuals with first-hand experience of KaPaSa weapon production, the information that has contributed to this report.

³² Due to the sensitive nature of the subject matter and high risk of reprisals against those interviewed, the identities of SAC-M’s interlocutors will not be disclosed.