And The Case Of
Phulbari Coal Project
By Anu Muhammad
19 May, 2007
March 9 2007 Washington Post reported, 'The Bush administration has
objected to a proposed open-pit coal mine in Canada near the Montana
border, citing the potential for irreversible environmental damage to
Glacier National Park, pristine trout streams and the largest natural
lake in the West. ....About 25 miles north of the border, the Cline
Mining Corporation of Canada wants to lop off the top of a mountain
and over the next 20 years haul away 40 million tons of coal -- in a
drainage that forms the headwaters of the North Fork of the Flathead
River.....The North Fork of the Flathead, which the federal government
says would quickly be contaminated with heavy metals and other mining
pollutants, forms the western boundary of Glacier Park. It then flows
south into Flathead Lake, often described as the largest pristine lake
in the nation and a major recreation site.'
While the US administration
obstructed Canadian open pit mining in a mountain area because of 'potential
for irreversible environmental damage to Park and natural lake about
25 miles north of the border', US backed institutions and agencies are
pushing Bangladesh Government to go ahead with open pit mining in a
densely populated and agricultural land area against experts opinion
and strong public opinion.
ADB push for Phulbari
At a press conference on
March 27, the Asian Development Bank (ADB) country director in Bangladesh,
Hua Du, expressed the ADB's eagerness for the quick decisions in favour
of big Indian corporate giant Tata's proposals related with gas and
coal, and the British based company Asia Energy's (AEC) Phulbari Coal
Project (PCP). Both are for open pit mining. 'Business is business',
she said categorically (Holiday, April 1, 2007).
It is important to note that
about 70,000 people were gathered in Phulbari on 26 August 2006 to protest
against the proposed open pit mining project. Law enforcers opened fire
on them as they were returning home from the protest rally. Three persons
were killed and hundreds wounded. Twenty of the wounded people were
rendered permanent suffering, one is still in hospital with permanent
disability. The action of the law enforcers, however, could not kill
off the protest. More people took to the streets in a mass uprising.
After days of relentless protest, participated by Bangalee, Adivasi
(indigenous), women, men, senior and children, the government relented
and entered into an agreement with the protestors represented by National
Committee to Protect Oil, Gas Mineral resources, Port and Power.
That historic social contract
clearly stated, among others,
1. 'Phulbari coal project
will be scrapped and Asia energy will leave the country.'
2. 'No open pit mining will
be allowed anywhere in the country'.
3. 'Steps will be taken for
development and utilization of coal only after proper consultation with
the people keeping national interest intact'.
Meanwhile, a committee of
experts, formed by the government, submitted its report in which it
observed that the Phulbari project should be cancelled in environmental,
economic and legal grounds. However, as Hua Du's statement suggests,
nothing can change the bank's mindset.
Why is the bank so enthusiastic
to back Asia Energy on the one hand and remain indifferent to experts'
opinion about, and the local peoples clear NO to, the project on the
other? Why is profit for a company preferable to agencies like ADB even
if it costs peoples lives, livelihood and environmental disaster although
their written commitments say otherwise?
ADB for Projects
of Mass Destruction
If anybody looks at the ADB
funded projects and their consequences in Bangladesh one will not be
surprised over its present role on the Phulbari project. The ADB is
generally known as the 'World Bank of Asia', that always goes hand in
hand with the World Bank and the International Monetary Fund in pursuing
neoliberal policies that put corporate profit as the supreme objective
at the cost of people's lives and environment. It may be unknown to
the people of developed countries, whose money is spent on these institutions
in the name of development and poverty reduction; however, we, in the
peripheral countries find this a 'business as usual' practice of the
ADB, as it is for the World Bank and the IMF, albeit on a much larger
The ADB has so far funded
numerous projects in Bangladesh. The ADB-funded project in forestry
has created deforestation in different places and made forest land a
private business. Development projects of institutions like ADB, for
example, in Chokoria, Cox's Bazar destroyed forest and salinized land
in order to give space to export oriented shrimp cultivation. Shrimp
cultivation ruined land and enviroment of the coastal region. The project
in Modhupur turned forests into rubber plantation and land of cash crop,
gave business to a few and created high insecurity amongst the indigenous
On March 18, Choles Ritchil,
a leader of the indigenous Garo people living in the Modhupur forest
area, was killed after barbaric torture by the government forces. Earlier
another leading person was killed on January 3, 2004 by police firing
for opposing an eco-park project. The ADB has been involved in projects
for social forestry and many other plantation and cash crop projects.
These funding and policies towards deforestation, privatization and
marketization strengthened market and business orientation in different
regions. A network of beneficiaries of this orientation want to go further
by evicting Garo people in the name of ill conceived Modhupur forest
Eco-Park project, under which a wall is being constructed around 3,000
acres of Modhupur forests. This wall is a threat to the forest and the
livelihood of the Garo and other indigenous people. Beneficiaries supported
by ADB projects become desparate to go with eco park project and other
plantation that need destruction of indigenous peoples lives, livelihood
as well as the forests.
The ADB funded projects in
water and irrigation gave business to local-foreign consultants and
contractors a good business but created permanent water logging in different
parts of the country. In southern part of Bangladesh, the success and
failure of the ADB projects put lives of about two million people in
a horrible situation.
In the education sector,
the ADB projects created path for privatization, high corruption and
disastrous reform. Protests from teachers and students compelled previous
government to stop from implementing 'reforms' but huge money wasted
in the process. The ADB was successful in lending but Bangladesh became
indebted for creating the mess.
In the energy sector, the
ADB has been involved since early 1980s in formulating policies to privatize
common property and to create favourable path for foreign corporate
organizations. Along with the World Bank, the ADB projects helped multinational
companies to grab natural resources on terms and conditions that are
very unfavourable for the people, along with the dismantling of national
institutions and erosion of capabilities.
More than 80 per cent of
the ADB loan has so far been given to the public sector in different
countries. This may give a false impression that the loans given to
public sector helped strengthening public institutions. In fact, the
loans were meant for just the opposite -- to dismantle public institutions
and national capabilities.
The same instruments and
similar arguments are being used to rationalize further control of coal
and gas resources by Tata and Asia Energy (now named as Global Coal
Management) in multiple disastrous projects. The ADB has been using
its power and influence derived from public money of different countries
to serve companies at the cost of people and environment.
This is a roadmap to ensure
gravitation of businesses to big corporate bodies and yet creating and
trumpeting a myth that these are for development and poverty reduction.
People in Phulbari gave their lives to stop the open pit mining project,
making clear that they will not accept any foreign direct investment
that goes against national interest and creates disaster for present
and future generations. The ADB makes its stand clear against that people's
After declaration of emergency
on January 11, the people's fundamnetal rights remain curtailed to a
large extent. It seems that Asia Energy and its backers are trying to
take it as an opportunity to go ahead with anti-people disastrous projects.
Natural gas, coal
and oil: constraints for Bangladesh
In order to ensure energy
security for a country like Bangladesh and to find the best possible
path to explore natural resources we need to keep in mind that oil,
gas and coal are non-renewable resources, cannot be reproduced; that
these resources are limited, while domestic demand is growing; that
global uncertainty and conflicts on oil, gas and coal mark insecurity
for the weak countries; and that energy price is rising and has become
To ensure best possible utilization
of energy resources in present and future, every steps concerning exploration,
production and utilization of these resources should be transparent.
The contracts patronized by the ADB or the World Bank or the IMF have
always been secretive. To ensure energy security, the sector should
be organized with an objective to fulfill energy demand (present and
future) of people and the productive sectors; the peoples ownership
and authority over their own resources must be ensured; and development
of national institutions and capability must get the highest priority.
However, main features of
government policies derived from the ADB and the World Bank support
to date are:
There has never been any
attempt so far to have comprehensive energy policy and related steps
that is consistent with national interest and energy security of the
Non-renewable resources have always been considered as something tradable.
Privatization and commercialization of gas, coal and oil has been on
the top priority.
Global agencies systematically worked to grab the resources in favour
of global corporate. Foreign - aided development projects were utilized
to formulate policies in this regard. The energy sector study project
of 1982, the energy regulatory commission in 1993, the gas sector master
plan and the coal policy in 2006 are some of the examples where World
bank, Asian Development Bank were involved.
Dismantling of national agencies, undermining national capabilities,
ignoring national needs in short and long term have been common.
In fact, global capital is in confrontation with people all over the
world, among others, on three issues:
whether people and the country
should own and have authority over their own lives and natural resources
or global corporates should be allowed to take over; whether natural
resources should be used or preserved for the maximum utilization for
the development of the country or to be extracted in a big way to maximize
profit of foreign big companies; and whether resources will remain common
property or turned into private property of corporates.
People in general and Phulbari
in particular and many experts opine in favour of utilizing resources
as common property, for badly needed development; not to be plundered
or wasted or make disaster.
Phulbari Coal Project: Why
people and experts oppose?
The Phulbari coalfield was the latest discovery among the big four coalfields
found in Bangladesh since independence. In 1994 the then government
signed agreement with the BHP of Australia. In 1998, BHP transferred
its right to one year old British- Australian company Asia Energy.
Asia Energy was preparing
itself for open-pit mining. It said in its documents, 'Mining by the
open cut method is new to Bangladesh, but it is a proven and highly
productive and safe method in similar geological and hydrological conditions
in other parts of the world such as Australia, India, Indonesia and
Germany.' It goes without saying that projecting such a sweeping comparative
statement as expert opinion is ill motivated. Leaving aside other criteria,
the population and water aspect in Phulbari is entirely different from
the reality in other countries like Australia or Germany even India
The AEC further stated in
defense of open-pit mining: 'Adoption of this method will permit the
fullest extraction of coal resources, and will augment duration of the
mining period and thus enhance socio-economic opportunity, income prospects
and gains for the Bangladesh economy.' It was not made clear who would
bear the cost and who would be the beneficiaries of this 'fullest extraction'!
We know the beneficiaries are company and allies while losers are the
people and the country.
Key points of the Project are:
The latest figure for the
extractable quantity of coal in Phulbari is 572 million tonnes. Besides
coal, the mine contains high-grade silica (sand), ceramic clay, Madhupur
clay and gravels and rocks of high quality.
· The coalfield will
extend over 135 square kilometres. Again, the area, which can be affected
directly or indirectly during the mining operation including de-watering,
will be nearly 656 square kilometres.
· This area is very
fertile, paddy output is high, and nearly all the land yields three
crops per year!
· The business activities
in the non-agricultural sector are also expanding fast.
· The density of population
is very high, 4245 per square kilometres.
The company says, as the
mine advances during the first 5 to 10 years, between 15,000 and 20,000
people will have to be resettled, and over the 30-year life of the mine,
the total number of people resettled could be 50,000. According to the
local sources, the affected number of people may go beyond 2,00,000!
· Because of the coal-mining
operations, the production activities of the entire area in agriculture,
livestock, fisheries and forestry will be totally destroyed and will
remain unproductive for an indefinite period! The products here include
aman, aus, IRRI and Boro varieties of rice, wheat, mustard, potato,
corn, banana, sugarcane, jute, chilli, garlic, onion, vegetables of
all varieties, and numerous fruit-bearing and timber trees.
· There are also rivers
and canals, beels, and fish farms numbering over a thousand, and farms
that rear ducks, hens and cattle, etc. Besides, there are many shops,
and business and commercial houses. Economic activities in the entire
area will come to an end.
will ruin lives and livelihoods in greater area beyond mine site.
· Water contamination
in the mining area may affect total water system of the country because
of its network.
· Asia Energy stated
that 'during the operation of the mine, 2,100 short-term and 1,100 long-term
positions would be available for employment'. It has been deafeningly
silent about the fact that livelihood of over 2,00,000 people will be
destroyed by its operation.
· If we consider only
coal in the mine, Asia Energy could make profit Taka 1,500 billion (more
than US$ 200 billion) in thirty years.
· On the other hand,
Bangladesh could receive, by way of 6 per cent royalty and taxes, $7
billion in 30 years. In this context, it should be noted that currently
the export earning of Bangladesh has exceeded US$ 10 billion per year.
Bangladeshis working abroad send foreign exchange remittances worth
around US$ 5 billion per year.
Experts on soil sciences,
water and geology further stated that,
Asia Energy's mining process could dry up underground water aquifers
over an area of roughly 324 square kilometres, with an ecological effect
that is difficult to quantify in money terms.
· The company will
install over 80 'dewatering tube-wells' in the mining area to pump water
out of the mine in order to access the coal, which lies below it. Although
Asia Energy proposes 'aquifer injection' systems to prevent a water
level drawdown, the local ecology may be irreversible.
· Asia Energy has
also proposed that the earth that will be dug up for the mine will be
converted into a hill that is 14 square kilometres in area and 385 feet
high, also featuring a lake that will cover 6 square kilometres. This
huge land area will become irrecoverable for agriculture, causing further
loss of livelihood, locally. (New Age, August 31, 2006)
Considering the adverse effect
on production and economic activities, Bangladesh will suffer huge deficit
for the project in addition to loss of coal resources and environment.
Peoples suffering will be immense.
Problems, Flaws and
Irregularities with the project:
There are many problems with
the project, each of these goes against national and international legal,
environmental and human rights preconditions. Expert committee pointed
out some flaws and irregularities too. We may sum up different legal
and other procedural problems with the project and deceptive activities
by the company as follows:
1. The contract signed with
the Asia energy shows royalty to be paid to the government of Bangladesh
as 6 per cent of the production, although the original contract with
BHP had been 20 per cent.
2. The coalfield was transferred
from BHP to Asia Energy in 1998, but no gazette notification was served
at the time.
3. Submission of development
plan as the Phulbari project needed a deposit of 3 percent bank guarantee
but no deposit was made.
4. According to Mines and
minerals Rules 1968 (amended in 1987 and 1989), clause 41, only 400
hectares is allowed for open pit, but the Asia Energy project is for
nearly 6000 hectares. The land allocated for the mine was more than
10 times than the existing law permits.
5. According to clause 43
of the above rules, leases can be made only for 10 years and extension
can be made upon review but in Asia Energy's case, it is for 35 years.
6. According to international
law, practices and convention, any development project requires consent
of local people where the project is to be implemented. Asia Energy
has made lies and false campaign on this claiming that people have consent
on the project.
7. The company did not publish
its plan and document to the people of the area and did not go for circulation.
Only thing they circulated is a propaganda sheet hiding consequences
but glorifying the project.
8. UN convention categorically
stated that if any project area has indigenous inhabitants than it is
mandatory to have full consent from them. The Phulbari project was in
progress completely against the opinion of the indigenous people.
9. After obvious failure
to convince people on the project Asia Energy was engaged in bribing
people with cash and kind to become informer against agitating people,
they also tried to terrorize people by hiring and organizing mastans
10. Long before getting the
final work order Asia Energy started mobilizing capital from London
AIM stock market. ` Some 48 million shares were floated in 2004, rocketing
up to a price of 900 pence a share by March 2005, for a total market
capitalization of over $800 million, six months before the Department
of Environment of the Government of Bangladesh granted Environmental
Clearance for mining on 11 September 2005. Asia Energy envisioned a
$1.1bn (£578m) investment and was negotiating for backing from
the Asian Development Bank and the US Ex-Im Bank.' (Analytical monthly
review, October 15, 2006).
People or Corporate profit
Therefore, the Phulbari project
is economically irrational, environmentally disastrous to a scale unprecedented
in the country. It is also legally flawed, corrupt and deceptive. It
is nothing but another project of mass destruction.
We must recall that in 1964
USAID funded a hydroelectric project in Chattagram, south east of Bangladesh,
that evicted nearly one hundred thousand indigenous people. Most of
them are still not resettled, not being compensated. Although that project
generated some electricity, but permanent conflict created by the project
still exacts a high toll on Bangladesh. Power generation is also now
facing crisis. Meanwhile whole peaceful and beautiful landscape turned
into an area of conflict, gave birth to insurgency, resulted militarization,
caused regular casualties and drainage of public money. Distrust, violence,
blood bath continues. USAID was successful project wise, generations
in the country have been paying for their sin.
If we compare this with Phulbari
coal project in gain loss, in environmental, peoples displacement and
agricultural destruction, in desertification of huge area and as well
as contamination of water system in the country, we find the later as
much more disastrous in many ways. Nevertheless, the ADB is showing
its determination to go with the project. If this can make a success
Tata will come with another open pit for Barapukuria, the adjacent area.
People in Phulbari area showed
their determination to protect their lives, resources and national interest.
If anybody now goes ahead with the project, in effect, asks for genocide
in different forms. Now Bangladesh government needs to clear its position,
whether it has any concern for people, resource and environment of the
country or it is reduced to servicing agency of global corporate bodies.
People of the countries that dominate the ADB (Japan and the US) have
to take a decision whether they want to see their money being utilized
to invite genocide, mass destruction, environmental disaster just to
satisfy vulgar greed of a company.
(The article is an abridged
version of a paper presented at a symposium organized by Peoples Forum
on ADB, Kyoto, Japan, May 5, 2007)
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