The Myanmar junta is leaning on telecoms companies to activate spyware on citizens' phones, prompting a major European firm to pull out of the country amid fears it would put activists' lives at risk if it complied.
Since seizing power in February from the democratically elected government, the junta has jailed political leaders and launched a violent crackdown on mass protests .
Now the regime is taking its fight to the technological sphere, and a Norwegian telecoms firm is set to pull out of the country over demands it run software that would allow the army to eavesdrop on private communications.
Norwegian Telenor said it had come under "continued pressure" from the military leadership and was "deeply concerned by the deteriorating situation in Myanmar".
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It said in a statement: "It has become clear to us that our continued presence would require Telenor Myanmar to activate intercept equipment which is subject to Norwegian and EU sanctions."
It added: "For Telenor, respecting and promoting human rights is integral … We took into account the broader human rights impact [and] believe a sale is the least detrimental solution for the Myanmar society."
‘Deplorable breach’ of human rights
The Lebanese investment firm M1 will likely step in to fill the gap in a US$105 million deal (NZ$146.6m), prompting an outcry from democracy activists, who have accused the group of profiting from authoritarian regimes without due regard for human rights.
Other activists criticised Telenor for leaving the country rather than standing up to the junta.
Yadanar Maung, spokesman for the group Justice For Myanmar, which opposes the move, called the "reckless fire sale" a "deplorable breach of the company’s human rights responsibilities and that of its owner, the Norwegian government".
The transfer of historical data could easily be seized by the military, he said.
"Exposing this data will be a death sentence for activists and journalists and a mass violation of privacy for millions of Myanmar people. Telenor and the Norwegian government must immediately halt this irresponsible sale."
The incoming M1 group has pledged to invest US$330m in infrastructure projects in Myanmar over the next three years.
But it has not ruled out acceding to military demands to allow surveillance or to access call data records among 18 million subscribers when it takes over Telenor's business.
Azmi Mikati, M1's chief executive, told The Telegraph that the company would follow the relevant telecoms laws and licence agreements on lawful interception, but would comply with the rules transparently and not in secrecy.
The installation of surveillance technology was widespread globally, he said. "In all the countries that we operate in, we abide by local laws, and as long as this request is lawful then we will abide by it and if that request is unlawful, then we will not abide by it," he said, adding that companies had no choice.
"We are not in the business of politics, we are not here to decide on the court or the judicial system or the political system. At the end of the day, we are operating in that country and we will respect these laws and these institutions."
‘Customers know the risk of surveillance’
Customers knew there was a risk of being surveilled, he argued, adding the alternative would be to completely shut down the network, depriving millions access to vital telecoms infrastructure, and leaving some 730 Telenor employees without a job.
"Basically, there is a grander and more important goal, which is operating a state-of-the-art network that would actually provide economic growth," he said.
It is an argument that raises alarm bells among rights activists who say Myanmar is run by an illegitimate regime that controls the courts and acts with impunity .
Mark Farmaner, director of the Burma Campaign UK, called on Telenor to "stick it out and refuse to implement" what the Junta is demanding.
"People are genuinely afraid for their safety, and there are people who are saying that if M1 do take over from Telenor they will have to leave the country."
Rights groups have criticised M1's history for running mobile networks under authoritarian regimes including Syria and Sudan where state surveillance is routine.
Mikati denied any wrongdoing. M1 had "always safeguarded human rights" and its 50-year experience operating in difficult markets was a strength that overall left countries better off, he said.
M1's entry is not a done deal and requires approval from the Posts and Telecommunications Department. According to a Nikkei Asia report, the military regime is reluctant to go ahead. M1 declined to comment on ongoing regulatory matters.
Last month, Norway's National Contact Point, a body tasked with monitoring Norway's obligations under OECD guidelines for multinational enterprises, said it would review a complaint by 474 civil society organisations in Myanmar that Telenor's pullout lacked due diligence and transparency.
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