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The Country in Brief

1. Union of Myanmar is situated in south-east Asian region. It has neighboring countries such as India and Bangladesh on the west, People Republic of China on the north and north-east, and Laos and Thailand on the east. Myanmar has 676,597 square kilometers of land area and over 50 per cent of the total land area is covered by forests. The wide variety of forest types including mangroves provide for a rich diversity of flora and fauna. As a result of its unusual ecological diversity, Myanmar is home to nearly 300 known mammal species, 300 reptile species about 1000 bird species and a haven for about 7000 species of plants. It is however, noticeable that the biological resources have deteriorated over the decades due to disturbances caused by humans and fragmentation of habitats. The degree of air or water pollution caused by industry or agriculture has been minimal due to the still low level of industrialization and relatively small amount of chemicals used in agriculture. However industrial expansion is expected in the near future owing to the recent change in the country's economic policy that will increase involvement of the private sector and foreign investments in its economic and industrial activities. Growing use of chemicals is however to be expected in agriculture as double cropping is being encouraged by the Government to boost agricultural production. With regard to the demographic situation, Myanmar has a relatively low population density. The population in Myanmar is currently estimated to be 54 million with an annual growth rate of 1.88 per cent. Compared to neighbouring countries, Myanmar enjoys a benign climate -- droughts and floods are rare and incidences of natural disasters like cyclones and earthquakes few and far between.



Environmental Situation Overview

2. The environmental problems facing Myanmar stem from underdevelopment and poverty rather than from industrial development and an unsustainable lifestyle of affluence. Unlike in other advance countries, they have not yet reached an acute stage. However, these days awareness has being growing among the public at large importance of environmental protection and preservation not only for themselves but for the future generations as well. So, for its part, the SAI recognizes the need to be well prepared to undertake audits of environmental management and practices of state organizations in response to the spirit of times.


3. Deforestation: Myanmar like other developing countries faces environmental problems arising from underdevelopment and poverty. Deforestation in Myanmar, unlike in some other developing countries is not the result of commercial extraction of timber but due to shifting cultivation, fuel-wood problem, and to a certain extent, population growth.


4. Loss of Biological Resources: Biological resources conservation in Myanmar commenced in 1918. Some of the wildlife habitats are degraded due to increasing human population pressure; some areas of degraded forests are being cut down and converted to cropland, while remaining areas are increasingly used for fuel-wood extraction and livestock grazing. Similarly, birds are widely hunted in Myanmar, but hunting methods are primitive and necessarily concentrated on the most abundant species only. Factors contributing to the loss of biological diversity are illegal poaching and destruction during world war ` and the insurrection which followed independence.


5. Pollution: The extent of industrial pollution and accompanying environmental degradation is highly localized. In fact, there is no significant problem related to air or water pollution. This is a result of deliberate policy measures taken by successive government incorporating environmental consideration albeit informally, in its national planning process. It is also attributable to the low rate of industrialization.



Myanmar's Environmental Policy and Legal Framework

6. Environment   means entire natural conditions which encompass land, water and air, in which we live, and variety of natural resources such as forest, minerals and all sorts of creature already existed therein. According to this definition we the human being are just and only a tiny part of the whole environment. Myanmar National Environmental Policy in broad conceptual significance is -

`` The wealth of a nation is its people, its cultural heritage, its environment and its natural resources. The objective of Myanmar’s Environmental Policy is aimed at achieving harmony and balance between these through the integration of environmental considerations into the development process to enhance the quality of life of all its citizens. Every nation has the sovereign right to utilize its natural resources in accordance with its Environmental Policies, but great care must be taken not to exceed its jurisdiction or infringe upon the interests of other nations. It is the responsibility of the state and every citizen to preserve its natural resources in the interest of present and future generations. Environmental protection should always be the primary objective in seeking development.’’


7. In the Union of Myanmar no comprehensive legislation has yet been passed to deal specifically and directly with all environmental issues. However individual ministries and departments have their own laws to administer in their respective fields of activities, such as Forest Law, Factories Act, Marine Fisheries Law, Pesticides Law, etc., which are more or less designed to conserve the natural resources and protect the environment against pollution. Thus, within the framework of those laws, they have their own policies and programs to implement in order to ensure a healthy environment for generations to come.

Moreover, the National Commission for Environmental Affairs  (NCEA) was  established  in  February 1990,  with the Minister for Forestry as chairman and heads of departments from various Ministries as members, in order to achieve the following objectives:-

(a) to establish sound Environmental policies in the utilization of forests, water, land, mineral, marine and other natural resources in order to safeguard the environment and  prevent its degradation;

(b) to set environment standards and to lay down rules and regulations to control pollution, disposal of hazardous wastes and chemical wastes;

(c) to lay down short, medium and long-term environmental policies and strategies that take into account both the environmental needs and development requirements;

(d) to promote public awareness on environmental issues through information and education campaigns so as to faster public participation in environmental protection endeavours


8. The Commission’s duties include the following:

(a) to provide advice to the Government on the formulation of environmental policies and obtain its approval;

(b) to issue necessary instructions for the implementation of environmental policies as approved by the Government.

(c) to provide necessary guidance and advice to the regulatory agencies on such matters as legislation, regulations and setting up environmental standard;

(d) to submit to the Government the programs necessary for safeguarding the environment;

(e) to act as the focal point in Myanmar’s relations with environmental ministries and agencies of various countries, as will as UNEP and other UN agencies in environmental matters.


9. In order to assist the Commission in carrying out its mandate, the following specific subsidiary committees were also formed:

(a) Committee on Conservation of Natural Resources;

(b) Committee on Control of Pollution;

(c) Committee on Research, Information and Education;

(d) Committee on International Cooperation.


10. The Commission and its subsidiary committees were initially assisted by a few staff drawn from the Ministry of Foreign Affairs. But starting from 1 April 1992 a separate staff bureau was set up under the Prime Minister's Office comprising officials with various professional backgrounds to assist the Commission. There are also plans to establish Environmental Liaison Offices (ELOs) in various ministries to promote close collaboration and efficient coordination in respect of environmental issues, among governmental organizations.


11. In accord with Agenda 21 adopted by the United Nations Conference on Environmental and Development (UNCED), held in Rio de Janeiro, Brazil in June of 1992, Myanmar is now in the process of drafting the framework of its own Agenda 21 in a spirit of global partnership, based on the above mentioned broad National Environmental Policy proclaimed by the Government on December 5, 1994. Moreover, Myanmar has already acceded to the Vienna Convention for the Protection of the Ozone layer and the Montreal Protocol on substances that deplete the Ozone layer, and its Amendment, as well as rectified the Framework Convention on Climate Change and Convention on Biological Diversity.


12. Though the SAI does not undertake audits of compliance with the international conventions, it has the authority to audit whether state organizations at different levels comply with the requirements of their respective laws that have been prescribed concerning environmental protection and preservation. At present in Myanmar, no law exist, which require private or public companies, or even joint venture corporations, in which the government holds financial stake, to report to public authorities or shareholders on their environmental management. Nor do state organizations at different levels, including state owned enterprises, have an obligations to do likewise, beyond the need to disclose in their financial statements relevant expenditures incurred on anti-pollution measures.


13. The government has complete jurisdiction over environmental policy. It alone can set overall national environmental policies for all  state organizations  and local authorities to follow at different levels in their efforts to clean up air, water and soil around the country.


Profile of the Office of the Auditor General (OAG)

14. For Myanmar, government audit system had been already established before it regained its independence, and then Auditor General was appointed by the Burma Act of 1935. After Myanmar regained its independence, the Auditor General Act of 1948 was enacted and the Auditor general was appointed by that law. In 1974, the Peoples' Inspectors Law replaced the Auditor General Act of 1948. The scope of government audit in Myanmar was expanded into a comprehensive one by promulgation of the Peoples' Inspectors Law. Accordingly, criteria of Economy, Efficiency, and Effectiveness are including in Myanmar's audit scope in addition to that of Financial and Compliance. In 1988, the Auditor General Law was enacted by the State Law and Order Restoration Council (State  Legislature, now  reorganized as the  State  Peace and  Development Council ) and the Auditor General is being appointed by that law.


15. Under the Auditor General Law 1988, the Auditor General is empowered to inspect whether or not the activities of the State Law and Order Restoration Council, the Government, Ministries, and Government Departments prove beneficial to the interests of the public, to examine whether the receipts as provided in the Budget Estimates have been realized in full, to examine whether the funds provided for expenditure in the Budget Estimates are utilized effectively,  and prescribing the accounting systems for the Government, Ministries and Government Departments, and examining whether the systems so prescribed are followed.


16. Under the Auditor General, Office of the Auditor General ( OAG ) stands as the headquarters and regional audit offices, as OAG's regional branches, are organized at different levels such as State/Division, District and Township. Powers of the Auditor General are delegated among the OAG and its regional audit offices to be exercised on behalf of the Auditor General.


Environmental Audit (New Challenge to SAIs)


17. SAI's response to the challenge for environmental audit should be well prepared and equipped with appropriate techniques. Environmental audit is very new to almost all SAIs and there are two areas to be focused in this regard. These areas can be categorized such as technical and management aspects of environmental audit. No SAI would be capable of performing environmental audit without possessing a multi-disciplinary capability, which in itself is a rarity among most SAIs, especially in the developing countries. Thus, the technical side of environmental auditing dealing with highly complicated technical controls and checks would have to be left to the specialized agency, which should be set up for the purpose, while SAI could take care of the management side, focusing on sound environmental management practices and controls in place, as well as on compliance with applicable laws and regulations concerning environmental matters. Moreover for SAI's part, aspects of economy, efficiency, and effectiveness in all anti-pollution activities of the organizations should be taken into consideration for evaluation as part of environmental auditing.


18. Performance standards and criteria are essential elements of environmental auditing. These days, environmental auditing is still in an evolving stage, and so are the performance standards and criteria needed for it. It is most likely that the majority of state organizations may lack well defined standards and criteria by which to judge the performance of their environmental programs. When faced with such a situation, the SAI has the option of collaborating with the audited organizations to work out the standards and criteria, based on their operating policies and practices, which will be acceptable to both sides. If such collaboration is impossible, then all the SAIs have to do is to report the absence of such standards and criteria to the appropriate authorities, at the same time pointing to the need for their development. National environmental legislation could also help very much in developing performance standards and criteria, because it would serve as a conceptual framework for their development.


19. It is considered that the generally accepted auditing procedures and practices are not sufficient for environmental auditing. Specialist professional skills are needed. Without specialist input, the SAI will be unable to interpret or weigh the highly technical data on environmental management to develop its own audit evidence. For example, it would be beyond the present expertise possessed by the SAIs to test the tolerable levels of air and water pollution; to determine the areas of deforestation based on aerial survey data or remote sensing data; and to evaluate the possible impact of the audited organizations' programs on the environment. The other limiting factors the SAI could face are: lack of performance standards and criteria, and of national environmental legislation. Such legislation would have defined requirements for state organizations to establish performance indicators, against which their performance can be measured.





OAG's Role and Responsibilities in Environmental Audit

20. Though no specific mention is made in the Auditor General Law of 1988, concerning environmental auditing, the SAI has the mandate to audit the environment-related programs or activities that the state organizations undertake. SAIs are encourage, even where they have only a financial mandate, to identify environmental costs and liabilities, including environmental damages, to government ministers, parliaments and the public.


21. As far as policies are concerned, OAG has no specific mandate to audit the soundness or otherwise of government policies. However, OAG has the right to examine whether the policies that have been set are actually followed in practice, to what extent those policies can be implemented, and what are the factors that have impeded their successful implementation, as well as to make appropriate recommendations for improvement in areas of their operations where weaknesses are found to exist in the light of its audit findings.


22. Generally, government's activities on environmental affairs are not intended for profits in terms of money, but only for social benefits such as to conserve the natural resources, to protect and prevent the environment against damage, wastage, and pollution. Therefore, these activities are, naturally, expenditure-oriented and not income-oriented. Accordingly, as far as audit of environmental affairs is concerned, the basic requirements in audit are to see that:

(a) All major expenditure has been used in accordance with the provisions of respective rules and the specific objectives set for;

(b) The expenditure has been properly recorded and disclosed in the financial statements;

(c) There is no indication of wastage and inefficiencies in the process of functions; and

(d) Whether the objectives are reasonably meet or not.


23. Normally audit makes intensive study on internal control mechanism installed in the auditee department concerned in order to obtain understandings such as :

(a) Whether the regulations and procedures are adequate for effective internal control;

(b) Whether such regulations and procedures are framed in accordance with laws and policies enacted by the government; and

(c) Whether such regulations and procedures are followed at all activities under the audit.


24. Audit can obtain the necessary information on the above item (a) and (b) in its audit planning phase through a thorough study on established legal framework, organizational structure, policy statements and operational system of the department. The fact marked as (c) can be discovered by test checks and observation performed in examining phase of the audit.


25. In examining phase, audit has to make a general review of all transactions and a detailed check of certain percentage on them. In doing so, source documents and respective records are checked to see the correctness of computation, classification, and recording etc.. These checks are followed by the discussion with responsible official concerned and sending the audit objection / recommendation to the top management of the auditee organization.


OAG's Reports on environmental Issues


26. No environmental audit has yet been conducted by OAG of any state organizations. However, what may, in general terms, be described as a semblance of environmental auditing was usually done in conjunction with the financial audits, in which attention was focused on the effectiveness and efficiency of the environment-related programs or activities that were carried out by the audited organizations. What proved to be a most difficult part of our audit work here was the limited means we had to test the accuracy and completeness of the data available to audit, and a lack on the part of the auditees of clear-cut performance indicators against which the effectiveness of their environment-related programs or activities, as well as their impact on the environment could be measured.


27. Significant audit findings and recommendations contained in these reports and the feedback replied thereupon by auditee organization are subject to the OAG's post audit monitoring procedures. This procedure includes steps to watch:

(a) How far these recommendations have been implemented by the auditee organization concerned;

(b) Whether these implementations are sufficient and acceptable.


28. OAG submits its performance report, two-monthly, to the State Peace and Development Council, the state legislature. Significant audit findings and evaluation on the measures taken for these findings by auditee organizations are also included in this report.


Problems in Audit of Environmental Affairs


29. Naturally, degree and extent of costs and/or benefits occurred in some environmental programmes are indefinite in terms of quantity and value, and the major problem for auditors is setting up of performance indicators or indexes for audit purposes. Furthermore, some departments can not provide related and supplementary information required for overview evaluation to be made on their performances. In such cases, OAG has to establish relevant measuring devices which are applicable and acceptable by both parties. Therefore, audit scope of efficiency and effectiveness can be embraced only in limited areas of environmental affairs. Also INTOSAI & ASOSAI   should encourage member SAIs to cooperate where possible in the audit of compliance by their respective countries with international accords, recognizing the factors noted earlier, and should encourage joint or concurrent audits between SAIs.


30. INTOSAI/ASOSAI can assist its member SAIs to develop skills for environmental auditing. It may build a data bank on which an SAI could draw for information on the audit techniques and performance indicators used by other SAIs. It is considered that INTOSAI/ASOSAI could play a key role in helping its member SAIs develop performance standards and criteria by serving as a clearing house for exchange between SAIs of information about the latest developments in environmental auditing. Also it could organize seminars and workshops where the personnel from SAIs would be given specialized training in environmental auditing skills and techniques. Thus SAIs, especially in the developing countries, will be able to update their auditing skills and techniques, as well as keep up with the latest developments in the field of environmental auditing around the world. Moreover, it could pave the way for closer cooperation and collaboration among SAIs not only in environmental auditing but in other related fields, too.



Appendix (A)

Existing Laws in which some sections are provided for

Environmental protection and conservation in Myanmar


1. The Penal Code, 1861 of Offences Affecting the Public Health, Safety, Convenience, Decency and Morals

2. The Obstruction in Fairways Act, 1881

3. The Land Acquisition (Mines) Act, 1885

4. The Yangon Water-works Act, 1885

5. The Explosives Act, 1887

6. The Explosive Substances Act, 1908

7. The Yangon Police Act, 1899

8. The Police Act, 1945

9. The Yangon Port Act, 1905

10. The Canal Act, 1905

11. The Defile Traffic Act, 1907

12. The Highways Act, 1907

13. The Towns Act,  1907

14. The Village Act, 1907

15. The Ports Act, 1908

16. The Embankment Act, 1909

17. The Inland Steam Vessels Act, 1917

18. The Oilfields Act, 1918

19. The Poisons Act, 1919

20. The City of Yangon Municipal Act, 1922

(The Law Amending the City of Yangon Municipal Act of 1922 was enacted in 1991.)

21. The Water Power Act, 1927

22. The Underground Water Act, 1930

23. The Petroleum Act, 1934

24. The Myanmar Aircraft Act, 1934

25. The Essential Supplies and Services Act, 1947

26. The Emergency Provisions Act, 1950

27. The Factories Act, 1951

28. The Oilfields (Workers and Welfare) Act, 1951

29. The Motor Vehicles Law, 1964

(The Law Amending the Motor Vehicles Law of 1964 was enacted in 1989. )

30. The Union of Myanmar Public Health Law, 1972

31. The Territorial Sea and Maritime Zones Law, 1977

32. The Law Relating to Aquaculture, 1989

33. The Law Relating to the Fishing Rights of Foreign Fishing Vessels, 1989

(The Law Amending the Law Relating to the Fishing Rights of Foreign Fishing Vessels, 1989 was enacted in 1993. )

34. The Myanmar Marine Fisheries Law, 1990

(The Law Amending the Myanmar Marine Fisheries Law of 1990 was enacted in 1993. )

35. The Pesticide Law, 1990

36. The City of Yangon Development Law, 1990( Amended in 1995 and   again in 1996 )

Appendix (A) / 2


37. The Private Industrial Enterprise Law, 1990

38. The Freshwater Fisheries Law, 1991

39. The Salt Enterprise Law, 1992

40. The National Drug Law, 1992

41. The Forest Law, 1992

42. The Mandalay City Development Law, 1992

43. The Narcotic Drugs and Psychotropic Substances Law, 1993

44. The Development Committees Law, 1993

45. The Plant Pest Quarantine Law, 1993

46. The Myanmar Insurance Law, 1993

47. The Myanmar Hotel and Tourism Law, 1993

48. The Animal Health and Development Law, 1993

49. The Science and Technology Development Law, 1994

50. The Protection of Wild Life and Plants and Conservation of National Areas Law, 1994

51. The Myanmar Mines Law, 1994

52. The Prevention and Control of Communicable Diseases Law, 1995

53. The Myanmar Pearl Law, 1995

54. The Myanmar Gemstone Law, 1995

55. The Myanmar Traditional Drug Law, 1996

55. The National Food Law, 1997

57. The Protection and Preservation of Cultural Heritage Region Law, 1998