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03.07.08
Urgent Interventions

Bangladesh: OMCT welcomes the Asian Development Bank’s suspension of support for the Phulbari coal mine project

Geneva, 3 July 2008: The project for an open-pit coal mine in Phulbari – promoted by British company GCM Resources - has provoked widespread concern over its potential socio-economic, environmental and human rights impact. Protests against this project have already resulted in loss of life and injury. OMCT has contacted all parties involved, including the Government of Bangladesh, private financial institutions and the Asian Development Bank, to express its deep concern at the risk of further violence associated with the project. OMCT has insisted that a decision on the future of the Phulbari mine should only be taken once a thorough, transparent and independent investigation into its human and environmental impact has been carried out, with the full and informed participation of all local communities.

The mining project, human rights and violence
In December 2007 and January 2008 OMCT acted to prevent further killings and violence in connection with the Phulbari mining project - Dinajpur District of Bangladesh - and to ensure respect for the human rights of the local communities and indigenous peoples directly affected. In August 2006, several persons had been killed and many injured as a result of action by police and personnel of the Bangladesh Rifles against demonstrations of opposition to the proposed large scale open-pit coal mine. Local NGOs approached OMCT to express their serious concern that further violence, ill-treatment and even deaths could result from Government reaction to the expression of opposition by the local communities and indigenous people directly affected.

The information reported to OMCT stated that if the proposed Phulbari mine was carried out it would negatively affect between 50,000 and 500,000 people through mass evictions, destruction of agricultural land and the pollution that would result from extraction activities. The mine would also seriously compromise the rights to health and to an adequate standard of living of those affected (including access to housing, land, adequate food and clean water). In addition, concern was expressed at the failure to carry out serious environmental impact assessments, and the lack of adequate information and consultation with the affected communities about the project and its potential consequences was criticised.

OMCT acts to prevent further violence
OMCT carried out in-depth research into the mining project itself, its implications for the human rights of the affected populations, local resistance to the project, the limits imposed by the Government on expression of opposition and the specific impact on the economic, social and cultural rights of those affected. OMCT identified how those human rights violations were connected to past violence and created the risk of further violence in the future.

OMCT also investigated the corporate structure of the mining operation, the planned support of the Asian Development Bank (ADB) and that of private banks as shareholders in the mining company in order to identify the specific responsibilities of each.

This research resulted in an OMCT Action File (BGD 21 12 07) (annex 1). This Action File focussed attention on preventing violence by addressing the economic, social and cultural root causes and was seen by OMCT as adding a crucial dimension to the efforts of other organisations objecting to the potentially negative impacts of the proposed mine.

OMCT’s Action File called on the Government of the Peoples’ Republic of Bangladesh to suspend the mining project and to initiate a thorough and independent investigation into the human and environmental impact of the project and to request the assistance of the Office of the United Nations High Commissioner for Human Rights in that connection. It also called on the Government to ensure the full and informed participation of all local communities in the investigation, to make the report public and abide by its recommendations. It also called on the Government to lift restrictions on public demonstrations and take all necessary steps to prevent future violence. See annex 1 for further recommendations to the Government.

The Action File called on Global Coal Management Resources Plc (GCM), the company responsible for the project, to suspend its activities pending the human and environmental impact report, to fully respect the land rights, resources and livelihoods of all affected communities and to provide fair and adequate compensation. The File also called on the major shareholders in GCM (UBS, RAB Capital and Barclays) to ensure that GCM abided by the impact report and respected national laws and international human rights standards.

The Asian Development Bank (ADB) was scheduled to approve in June 2008 a US$ 100 million loan and a US$ 200 million political risk guarantee for the project. This led OMCT to contact the ADB, transmit the Action File and request the Bank to recognise the discontent of the majority of the local population at the manner in which the preparatory phases of the Phulbari project have been conducted. OMCT asked the ADB to insist on the production of a comprehensive human rights and environmental impact study with the full and informed participation of all local communities as a fundamental condition for financial support.

OMCT transmitted the Action File along with requests for specific action to the President of Bangladesh and relevant Government ministers, the Chief Executive of the mining company GCM, the Chief Executives of the above mentioned financial institutions, together with that for Credit Suisse, another shareholder (calling attention to the Equator Principles and the UN Global Compact) and the President of the ADB (see annex 1).

The Action File was also transmitted to the UN Special rapporteurs on Indigenous People and Adequate Housing and the UN Special representative on Transnational Corporations and Human Rights. In addition, the Action File was transmitted to the chairs of the European Parliament Committees on International Trade and Development and the Subcommittee on Human Rights. Finally, the file was transmitted to the 282 national NGOs in OMCT’s SOS- Torture Network with the request that they, in turn, seize the appropriate authorities.

The reaction
GCM Resources, the company which was awarded the licensing agreement for mining the Phulbari deposit through Asia Energy Corporation, its wholly-owned subsidiary, contacted OMCT and proposed a meeting to discuss the issues raised in the Action File. As a result, on 26 February 2008 OMCT staff met with the Sustainable Development Manager of GCM Resources in Geneva. The main points made by GCM at that time are summarised in the attached note (annex 2) that has been shared with and approved by GCM. That includes information on GCM’s Environmental and Social Impact Assessment (ESIA), the level of compliance’ with both ADB’s Safeguard Policies and the Equator Principles, planned engagement with local stakeholders and plans concerning compensation of affected communities and local businesses. These points do not necessarily reflect the views of OMCT.

OMCT also received responses from Barclays PLC, RAB Capital, Credit Suisse and UBS, the main financial institutions involved. Unfortunately, and notwithstanding some references to the Equator Principles and the Global Compact, the responses to a large extent reflected a lack of transparency and a failure to take responsibility for the shares held in the name of clients. That constitutes a real challenge to ensuring that financial institutions take responsibility for the human rights implications of their investment decisions.

At the request of the Chair of the European Parliament Committee on Development, OMCT provided additional information on the Phulbari case. OMCT was subsequently requested to keep the Committee informed of further developments. The Committee Chair transmitted the Action File to the Secretariats of the South Asian Delegation and the Human Rights Subcommittee.

The Asian Development Bank’s decision
At the beginning of April 2008, the ADB decided to suspend its support for the project. In a statement, the ADB said, “We think it is premature to continue dialogue with the private sector under current circumstances. So, at this stage we are open to suggestions of the government of Bangladesh, civil society and other stakeholders and prepared to review our engagement in this project to ensure that all sensitivities, including concerns relating to safeguard issues, are fully considered.” (See http://www.guardian.co.uk/business/2008/apr/06/mining.bangladesh)

The ADB's decision bears testament to the potential of concerted civil society action to influence an issue with serious human rights implications.

The future OMCT, together with its national NGO partners, will remain vigilant to help ensure that any future work on the proposed mine respect the rights of local communities and international human rights standards in the matter.


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