Military elites, drug lords and crony companies in Myanmar make $31 billion from the jade trade in the country, the rights group Global Witness said on Friday.
The London-based organisation said in a 128-page document that loss of land, pollution and takeover of the jade industry by government-licensed companies have damaged traditional sources of income such as farming and small-scale mining and stoked resentment in northern Kachin state.
"Locals are literally having the ground cut from under their feet. There is a parallel social collapse involving endemic drug addiction amongst miners, prostitution and gambling," Mike Davis, Asia director for Global Witness said.
According to the report, locals who try to resist land grabs face intimidation and violence.
The report said that men destroyed a local’s home after she refused to move out in exchange for 1 million kyat ($780).
"The environmental and social collapse of Hpakant, and the plunder of its riches, fuels intense resentment amongst Kachin people," Davis said.
The Global Witness report suggests that in 2014 Myanmar’s jade industry made about $31 billion, which is equivalent to 48 percent of the country’s GDP.
The report also noted the importance of tax income from the jade trade for Myanmar's government.
The rights group says Myanmar's many tariffs include a 20 percent value-based tax on jade at mine sites and 10 percent on government jade sales, however the government only received less than $374 million in official jade revenue in 2014 and less than 2 percent of the $31 billion estimated output value.
Mining operations have also left areas of deadly wasteland.
A "torrent of liquid mud" burst through the edge of a crater In April 2015 and killed between 30 and 60 people, local residents told Global Witness.
The jade mines fund both Myanmar's military and the rebel Kachin Independence Army and Kachin Independence Organisation which operate in the region, which have fought an intractable conflict since 1960’s.
Global Witness said the war is being deliberately kept alive by military commanders and government hardliners to protect their assets which could be lost if the jade business becomes more open and fair.
It also urged the country and the companies to bring transparency and fairness to the industry, publishing data on licences, bidding, concessions, revenues and ownership.