Adani Ports and Special Economic Zone (APSEZ) will be removed from the Dow Jones Sustainability Indices on April 15, S&P Dow Jones Indices has said in a statement, citing the firm’s business links with the Myanmar military responsible for the coup that overthrew the country‘s democratically elected government on February 1 and the human rights abuses that followed.

APSEZ is building a container terminal with an investment of $290 million along Myanmar’s Yangon river on a 50-year deal.

“APSEZ  will be removed from the Dow Jones Sustainability Indices following a media and stakeholder analysis triggered by recent news events pointing to heightened risks to the company regarding their commercial relationship with Myanmar’s military, who are alleged to have committed serious human rights abuses under international law,” S&P Dow Jones Indices said.

APSEZ will be removed from the index prior to the market opening on Thursday, it added.

Setback for the group

The removal is a setback for the Adani Group that  has been striving to raise its sustainability profile for securing access to new debt and equity capital with environmental, social and governance  risk evaluation increasingly playing a prominent role in global financial markets, a port industry consultant said.

The Yangon terminal will be built under the auspices of the Myanmar Port Authority and the Myanmar Ministry of Transport and Communication. The project is helmed by Adani Yangon International Terminal Co Ltd, a unit of APSEZ. The Ahlone International Port Terminal 2 (AIPT 2) will be developed over 54 acres leased from the Myanmar Economic Corporation Ltd (MEC), which is currently operating AIPT 1. ITD Cementation India Ltd is undertaking the EPC work for the project.

Project under cloud

The project has come under a cloud with the US  imposing sanctions on 10  serving and former Myanmarese military officials allegedly responsible for the February 1 coup as well as on Myanmar’s military holding companies — Myanmar  Economic Holdings Public Company Limited (MEHL) and Myanmar Economic Corporation Limited (MEC). Following a backlash, APSEZ said that “the land acquisition for the project was facilitated by the Myanmar Investments Commission led by U Thaung Tun, its Chairman and Minister of Investment and Foreign Economic Relations, under the guidance of State Counsellor Aung San Suu Kyi’s National League for Democracy government.”

“Much like our global peers, we are watching the situation in Myanmar carefully and will engage with the relevant authorities and stakeholders to seek their advice on the way forward. We condemn violations of the fundamental rights of all people and would continue to work with our partners and stakeholders, including business leaders, government and non-government organisations, to foster a business environment that respects human rights. We are also working with independent think tanks to ensure mitigation of human rights violations risks and building equal opportunity platform through sustainable value creations powered by critical port infrastructure,” the Adani firm said in a statement.