GCM challenged to pull out of Phulbari coal project

Date of publication: 
17 December 2011

GCM challenged to pull out of Phulbari coal project
17 December 2011
Bangladeshi activists demonstrate against GCM Resources
See Morning Star report on the demonstration organised by the UK Branch of the National Committee for the Protection of Bangladesh’s Oil, Gas, Natural Resource, Power and Ports.
For a fact sheet on the Phulbari project, seehttp://www.accountabilityproject.org/downloads/Phulbari%20Factsheet%20with%20Footnotes.pdf. Other background information on the Phulbari project is athttp://www.accountabilityproject.org/article.php?list=type&type=43.
Report on the Annual General Meeting of GCM Resources, London, 15 December 2011
The 2011 GCM Resources AGM was held on 15 December in an upstairs room in an unprepossessing office block near the Tower of London. Sounds of the lively demonstration against the company, being held on the pavement outside, drifted into the room, where around two dozen shareholders had gathered.
During questions on GCM’s annual report and accounts, some of the company’s critics challenged the Board to abandon its key project, the Phulbari opencast coal mine planned for north western Bangladesh.
Kate Hoshour, of San Francisco-based International Accountability Project, asked about the likelihood of further violence if GCM persists in its efforts to force through the Phulbari project despite massive and sustained opposition from Bangladeshi citizens and the people of Phulbari. She pointed out that three people had already been killed, including a fourteen year old boy, and as many as 200 wounded, for the simple act of marching in protest against the project. She said that the World Organization Against Torture had twice issued urgent alerts expressing deep concern that “police and security forces may again employ violence to deal with public opposition to the Phulbari open-pit mining project”and “further violence, ill-treatment and even deaths may ensue if local communities again seek to give public expression to their opposition,” and that an Expert Committee formed to assess the project had concluded that there is “a high risk of social unrest and conflict” if GCM attempts to forcibly relocate tens of thousands of people in Phulbari, adding “40,000 by your own estimate, although I dispute your figures on the number of people who would be displaced.”
Kate said that although GCM states on its website that it will comply with the Equator Principles and with the guidelines of the International Finance Corporation, these require companies to build and maintain a constructive relationship with project-affected communities. She said that there is overwhelming evidence that GCM has failed to meet this minimum requirement. The people of Phulbari have repeatedly called for GCM to be permanently expelled from their community, and have made a permanent ban on GCM operating within Bangladesh one of six demands for ending a hunger strike following the massacre in 2006. She asked whether GCM was concerned about the volatility of the situation on the ground in Phulbari, the great potential for further violence and loss of life, and the reputational risk that further violence and disregard for standards of corporate responsibility pose to GCM.
Company Chairman Gerald Holden replied that GCM had condemned the deaths during the August 2006 demonstrations, and had worked with the Bangladesh authorities before the demonstration. The company had withdrawn its personnel from the area and made clear to the authorities that it did not want any violence. The company, however, had a different reading of the situation from Kate’s. Gerald Holden said that he had recently been in Phulbari and had received a positive response – most people supported the mining project and wanted the company to proceed with it quickly. [Commenting on this statement from Bangladesh after the AGM, Anu Muhammad of the National Committee for the Protection of Bangladesh’s Oil, Gas, Natural Resource, Power and Ports said that nobody from GCM would be able to return alive from Phulbari after talking about constructing an opencast mine, such is the strength of opposition to the project. He said that the fact that the company’s office in Phulbari remained closed was sufficient evidence of their lack of an accepted place in the community.]
Gerald Holden said he was happy to hear what Kate had to say and was confident that the project would go ahead in line with the Equator Principles, which he had spent four years putting together. He said that the company believes that the project will help local people and improve their livelihoods and that it can be developed sustainably; and that the company does not support violence in any way.
Roger Moody, of Nostromo Research, said that one of the important elements of the Equator Principles is “consultation” with NGOs and affected peoples. However, on 1st January 2012 the World Bank-IFC will introduce revised performance standards that will include the right to Free Prior Informed Consent of Indigenous Peoples – not simply consultation. He asked what steps the company was taking to acknowledge Indigenous Peoples’ right to Free Prior Informed Consent; and whether it acknowledged that this must involve consultation processes carried out independently of the company.
Company Chairman Gerald Holden replied that there is a debate between business and NGOs on the matter of Free Prior Informed Consent. He said that he believed that consultation was the way to go, but that if consent were not obtained, the company would not have the social licence to operate. He said that the company would work with its local consultants and the local communities.
Roger said that he had been in Phulbari just before the killings in 2006. A social anthropologist contracted by the company was intervening in local communities in an unacceptable manner, preventing the honest ascertaining of opinion. Roger noted that the company’s website said that a revised Environmental and Social Impact Assessment (ESIA) would be done after the Government of Bangladesh had given permission for the project to proceed. This put the cart before the horse. Roger reminded the Board that he had conducted a detailed study of the potential impacts of the project and that none of the issues raised in his report had been addressed in the three years since it had been published. He asked the Chairman whether he would participate in an open forum to debate these issues.
Company Chairman Gerald Holden replied that he would. He said that the ESIA and Feasibility Study were ‘live’ documents. The Bangladesh Government had asked the company to wait until they had done their own studies before the company conducts further studies itself. There will be a lot of work to be done once the Government approves the project. He said that the company is willing to sit down with its critics anywhere. He invited Roger to work with the company to improve the project.
Roger replied that he would not work with the company but would be happy to debate the issues.
Samina Luthfa, who is researching the Phulbari project for a doctoral thesis at Oxford University, noted that the company had said that it had consulted with the indigenous people to be affected by the mine. She said that as part of her DPhil research she had stayed in Phulbari for seven months in 2010. During her ethnographic field work she had frequently visited 54 villages of eight unions covering all four sub-districts that would be affected within a five mile radius of the proposed mine. Among those villages, most villagers had reported that there had been no consultation at all. Twenty villages had reported that consultation meetings were thwarted by public dissent, generated by the fact that company employees were trying to use attendance signatures as evidence of consent to mining. Given this evidence, she asked, how did the company expect its critics to believe that it would uphold the Equator Principles as stated on its website?
Samina then asked about the risk of investment in the Phulbari project. She said that her quantitative data analysis on 398 open pit mines and mineral deposits in India and Bangladesh showed that without taking into consideration any political volatility indices and only drawing on demographic and ecological factors such as population density, forest coverage, literacy, poverty, and tribal population, the project with the highest probability of generating protest is the Phulbari Coal Mine. Given such evidence, how safe did investors feel in investing in such a high risk venture?
The Chairman said that he looked forward to reading Samina’s study. He offered no response to the issues she raised.
After the formal business of the meeting had been finished, the Chairman read out a statement of the company’s view of the prospects for the Phulbari project. He said that he was confident that the project would go ahead because of the “fast, low-risk”contribution it would make to Bangladesh’s electricity supply. He said that approval is a political decision over which the company had no control, so it could not predict its timing. He said that GCM has the capability to carry the project forward but that partnerships with other companies could help, and GCM is in conversation with the Bangladesh Government about this. He said that the fall in share price this year is mostly likely a result of increasingly risk-averse investors who had depressed the share price of companies with non-active mining projects and GCM’s Board shared investors’ disappointment over the fall in the company’s share price [which rose after the meeting].
Further questions were raised after the Chairman’s statement.
Kate Hoshour said that protests involving tens of thousands of people continue, and that the Bangladesh Government had deployed the notorious Rapid Action Battalion (RAB) to at least two of these demonstrations during the past year. RAB has been subject to investigation by Human Rights Watch and Amnesty International, which have each carried out recent independent investigations of the increase in extrajudicial executions carried out by RAB forces, RAB’S routine use of torture, and the death of people in RAB custody. She asked how the project could be considered “low risk” under these circumstances. How could the company make the claim that it would improve the livelihoods of people of local people when 80% of all people acknowledged to be displaced by the project have land-based livelihoods, yet the company’s draft Resettlement Plan clearly states that it will not provide land-for-land compensation to people displaced by the project, and baldy states that “most will become landless”? She also asked if GCM was aware of the large body of research on the displacement of people with land-based livelihoods showing that reliance on cash compensation alone is insufficient and results in impoverishment.
There was a disagreement over the number of individual indigenous people in the area to be affected by the project. Gerald Holden said that it was only about 1,000. Kate replied that GMC’s own Resettlement Plan states that the project will displace 2,200. She said that Bangladesh’s Indigenous Union (Jatiya Adivasi Parishad) estimates that 50,000 indigenous individuals would be displaced or impoverished by the project.
GCM’s Chief Executive Officer, Steve Bywater, said that he would not respond to all Kate’s points because they were, he alleged,‘wildly inaccurate’ [surely making it all the more important that he correct them?]. He said that Kate was mixing up protests against oil and gas leases with protests by the people of Phulbari. It was pointed out from the floor that the recent massive protests were about a whole range of foreign-owned energy projects, including Phulbari, but Mr Bywater did not respond to this. He said that there are 2,300 indigenous people in the area.
Replying to his charge that her statements were “wildly inaccurate,” Kate asked Mr Bywater whether the draft Resettlement Plan does state that 80% of project-affected households have land-based livelihoods, and whether it also states that most will become landless.
Steve Bywater repeated that he would not answer all of Kate’s points. He said that the entire pit would be rehabilitated within five years. People in the immediate area would become landless. As part of the compensation arrangements, people would have a choice– they could accept cash payments, though the company would prefer that they not take cash. He then went on to say that most people in the area do not own their land, and are squatters. [He did not spell out the implications for these people’s eligibility for cash compensation. Having stated that displaced residents would have a choice, he did not then state what they would be able to choose if they did not choose the cash compensation that he had said the company preferred them not to take. He did not refer to the company’s clear written statement that there are insufficient possibilities for providing them with replacement land. On the face of it, therefore, the choice for displaced residents will be cash compensation or nothing – and the company, apparently, prefers that they not choose the cash compensation.] He said that Bangladesh had a poor record on compensation, though it was being done better now at the nearby Barapukuria coal mine.
Kate asked him if he was aware of the protests the previous week over corruption in the disbursement of compensation at Barapukuria. Steve Bywater said that he could not comment on this.
Shareholder Zahid Ai expressed gratitude to the company for all that it was doing, stating that it is difficult to operate in the subcontinent with corrupt governments and obstructionist parties which want to stop progress. He asked about reports that the Bangladesh Government wanted a pilot mine developed in the Phulbari region.
Company CEO Steve Bywater replied that to do a pilot study it would be necessary to dig down to the coal deposit, necessitating a large investment, so he doubted that it would be done. The Chairman added that he agreed with expert opinion that such a pilot project is unnecessary as the Phulbari project is not technologically difficult. The big single technical issue is water management. Other issues were community relations and the need to train a workforce.
Shareholder Tim Blackstone said that all decisions in Bangladesh seem to emanate from the Prime Minister. He asked how many times Mr Bywater had met the Prime Minister.
Steve Bywater replied that he had never met the Prime Minister, who would not routinely meet company CEOs, and added that it would not really be appropriate for her to do so. But the company is in constant contact with the Ministers for Land and Finance and other cabinet ministers.
Mr Blackstone asked whether the company had a presence on the ground in Phulbari.
Steve Bywater replied that the company had seven people in the local area and around 60 elsewhere in Bangladesh. The company was maintaining a very low profile in the Phulbari area at the request of the Bangladesh Government [an odd request, if the company is as popular in the area as it claims to be].
Nasir Uddin read out a statement from local organisations in the Phulbari area opposing GCM’s opencast project. He handed the statement to the Board after the meeting. [The text of the statement is towards the end of this posting.]
Richard Solly, of London Mining Network, handed the Chairman a statement from a US-based Indigenous rights organisation, Cultural Survival. Cultural Survival asked whether the company accepted the United Nations Declaration on the Rights of Indigenous Peoples, which includes their right to Free Prior Informed Consent and which had been signed by the UK Government. Cultural Survival was concerned that the company’s Indigenous Peoples’ Development Plan admits that the project would have certain negative impacts on indigenous people and that these impacts violate the UN Declaration. [The text of this statement is at the end of this posting.]
Company Chairman Gerald Holden said that the company does accept the UN Declaration on the Rights of Indigenous Peoples. He noted the dispute over the meaning of Free Prior Informed Consent, claiming at one point that it implies that one or two individual objections to a project could prevail over majority opinion within an Indigenous community [whereas in fact FPIC involves Indigenous Peoples making decisions according to their own decision-making processes, which differ from one People to another].
Samina Luthfa asked for an answer to her question about attendance signatures being passed off as evidence of consent.
The Chairman said that he did not believe that this had happened.
Samina pointed out that she had carried out detailed research on the ground. GCM Resources people had been reluctant to talk to her; local residents had voiced strong opposition to the mine. She also asked about problems at Barapukuria.
Steve Bywater said that the problem at Barapukuria had been unexpected subsidence. He said that GCM Resources would not have mined the deposit there using deep pit methods and added that it was “dangerous.”
Kate Hoshour asked again about consultation. She read from a letter from Steve Bywater which states: “Dissemination of project information and consultations with the local community (in both English and Bengali) were in progress until mid 2006 when a period of political instability took hold in the country and at the same time a protest was held in the project area. As a result our communication and consultation process in the project area was interrupted.” Kate noted that the letter then states that consultation would resume only after GCM receives approval for the project. Pointing out that the letter is dated 10th March 2010, Kate noted that this indicates that GCM had at that point not consulted with the community for nearly four years. Referring back to Mr Bywater’s remarks, Kate asked why the government had requested that GCM personnel in Phulbari keep a “very low profile,” pointing out that this does not suggest that GCM has a social license to operate in the area.
Company Chairman Gerald Holden said that the company follows what the Government of Bangladesh asks of it. He said that the project needs broad support before it goes ahead.
At the end of the meeting, Samina Luthfa presented the Chairman with the following ‘eviction notice’.
Department of Housing
Eviction Notice
We regret to inform you now that your home has been taken over for the coal reserve found underground
Effective Immediately
If you do not leave now, you will be beaten, tear-gassed and fired upon. If you die, your family should be happy for not obstructing the path of our profit-making spree.
This may seem harsh but believe it or not, these things have happened in the green countryside of Bangladesh. A UK-based company, GCM Resources PLC, financed by global hedge funds, is trying to displace more than 100,000 people from a very densely populated, fertile region called Phulbari in Bangladesh for extracting coal that they propose to export for their profit. Farmers, teachers, agricultural workers, businessmen, endangered indigenous ethnic minorities, will be forced to leave their homes if this mine goes ahead. People in Phulbari are resisting. They were brutally repressed on 26th August 2006, when 3 of the protestors were killed and more than 100 were injured.
People from Phulbari need your solidarity! Please join the blockade against the plunderers at GCM
From: Department of Housing (On behalf of People of Bangladesh)
Eviction Notice
We regret to inform you that your home in Bangladesh has been taken over: Effective Immediately
On behalf of people of Phulbari, Bangladesh, we serve you this eviction notice to leave our country at once. You have been charged with provocation to violence, corruption, and political manoeuvring to get a deal that is disastrous for our people, our environment and our national interest.
Statement from organisations in Bangladesh
December 15, 2011
Investors and Shareholders
GCM Resources Plc
London, United Kingdom
Dear Investor/Shareholder,
Subject: Call for withdrawal of investment from Phulbari Coal Project
We are writing to you on behalf of the people of Phulbari, Birampur, Nababganj and Parbatipur upazillas (sub-districts), Bangladesh to request to remove/withdraw your investment from Global Coal Management Plc and political risk guarantee for the Phulbari Coal Mine Project. Global Coal Management Resources is moving forward to implement a project in South-eastern Bangladesh, Phulbari, which will increase the poverty of the local population as well as cause environmental disaster.
An incarnation of the notorious Asia Energy plc which was thrown out of Bangladesh by people’s movement in 2006, GCM Resources Plc’s Phulbari mine will:
• Destroy 14,660 acres of highly fertile land crucial to food production.
• Displace nearly a quarter of a million people – most of them indigenous farmers, destroying their land and livelihood
• Cause massive environmental devastation- acid poisoning of soil and water and air pollution in a densely populated region.
• Allow GCM to take away 94% of coal resources and on top of that they’ll benefit from 9 years of tax holiday!
• Force Bangladesh to buy its own coal at the exorbitant prices of the international market.
There are serious issues of contention about whom we consider“affected” people. We do not accept that approximately 50,000 people would be affected by the project. Based on our census of number of families in each neighborhood, we believe that this number will range somewhere from 200,000 to 500,000. The population density in the area (4,245 people/sq. km) is extremely high combined with immense value of the land given that it is extremely rich in arable land, livestock, fisheries and forestry. Moreover, the communal harmony between the indigenous people and the Bengalis as well as different religious groups that has long existed in the area was threatened by the dubious activities of the company. On August 26, 2006, however, people from various religious and ethnic groups came together against such conspiracies, which have thrown out GCM’s first initiative to implement the Phulbari project. Nevertheless, GCM Resources continue its conspiracy and aggression to Phulbari.
We condemn such aggression and we would like to let you know that the long struggle of the people of Phulbari and the sacrifices made for this cause firmly state that open pit coal mining in a densely populated region like Bangladesh will not be accepted by the local people.
We express each of our grave concerns and request you to express your solidarity. We request you to withdraw your investment to this distractive project.
Liyakat Ali, Commander
Freedom Fighter’s Sangsad Phulbari Command Council
Komolchandra Saha
Phulbari Dokan Karmachari Union (Shop Employees’ Union)
Sayema Begum
Women Representative, Shibnagar, Phulbari
M A Quayum
Phulbari Byabshai samity (Trader’s Samiti)
Ramai Soren
Jatiya Adivasi Samiti (Indigenous Association)
Habibur Rahman
Kuli Sramik Union (Day Loborers’ Union)
Md. Alauddin
Nirman Sramik Union (Construction Workers’ Union)
Matiur Rahman, Secretary
Rickshaw-Van Union
Srimoti Murmu
Bangladesh Adivasi Union (Indigenous Union)
Pradeep Sarker
Bullet injured, Shahbazpur
Professor Shah Md. Iliyasur Rahman
College Teachers’ Samiti
Abdul Majid
Jatiya Krishak Kshet Majur Samiti (National Peasant and Farmig Laborer’s Union)
Krishak Samiti (Peasants’ Union)
Shafiqul Islam Sikdar
Jatiya Krishak Samiti (National Peasants’ Union)
Nur Islam
Boropukuria Coal Mine Sramik Adhikar Andolon, Parbatipur
Md Jahidul Islam
Boropukuria Coal Mine Sramik Adhikar Andolon, Parbatipur
Md. Sher Ali
General Secretary, Majar Parichalna Committee (Shrine Committee)
Community leader Dodolia
Dr. Mohammad Solaiman, Secretary
Phulbari Homeopathy Welfare Association
Shibnagar Gupta, General Secretary
Kalibari Mandir (Temple) Committee, Phulbari
Md Ajmal Hossain, Secretary
Nimtala Jame Masjid (Mosque committee)
Motiur Rahman, President
Jatiyo Imam Samity (Imam association), Dinajpur
Sompa Chisty
Women representative, Nimnogor, Balubari
Abu Taher
Community Leader, Khayerbari Union
Yakub Ali
Community Leader, Khanpur Union
Parimal Roy
Community Leader, Shibnagar
Aminul Islam Bablu
Community Leader, Phulbari
Rafiqul Islam Sarkar
Community Leader, Birampur
Shahjahan Ali
Community Leader, Nababganj
Community Leader, Shahbajpur
Nasir member
Community Leader, Shahbajpur
Mahmud Hasan Babu
Community Leader, Phulbari
Shahriar Kabir Sunny
Community Leader, Phulbari
Community Leader, Madhyapara Granite Mine
Jai Prakash Gupta
Community Leader, Phulbari
Mojammel Huq
Community Leader, Parbatipur
Biplob Das
Community Leader, Phulbari
Jobirul Islam
Community Leader, Ratanpur
Abdul Majid Chowdhury
Community Leader, Phulbari
Najar Ahmed
Community Leader, Phulbari
Saiful Islam Jewel
Convenor, National Committee to Protect Oil Gas Mineral Resources Port and Power, Phulbari Chapter
S M Nuruzzaman
Member Secretary, National Committee to Protect Oil Gas Mineral Resources Port and Power, Phulbari Chapter
Text of the statement and questions from Cultural Survival
Statement/Question posed by:
Paula Palmer, Director of Cultural Survival’s Global Response Program
Boulder, Colorado, USA
Mr. Chairman,
My organization, Cultural Survival, advocates for the rights of Indigenous Peoples, as they are set forth in the United Nations Declaration on the Rights of Indigenous Peoples. The United Kingdom endorses this Declaration. My first question to you is: Has GCM endorsed the UN Declaration on the Rights of Indigenous Peoples? And if not, will you undertake to do so?
The Indigenous Peoples Development Plan prepared by Asia Energy lists the following expected negative impacts on Indigenous Peoples in the Phulbari Coal Project Area:
• Displacement and involuntary resettlement
• Loss of land, productive resources and assets
• Disrupted livelihoods
• Disrupted social networks and community bonds
All these negative impacts violate the rights of Indigenous Peoples according to specific articles of the UN Declaration on the Rights of Indigenous Peoples.
For example, Article 8 requires states to prevent or provide redress for any action that displaces Indigenous Peoples from their lands, territories or resources, or undermines their cultures through forced assimilation or integration. The Phulbari project will forcibly displace thousands of Indigenous families. How will GCM comply with Article 8 of the Declaration on the Rights of Indigenous Peoples?
Article 32 recognizes Indigenous Peoples’ right to free, prior, and informed consent “for any project affecting their lands or territories or other resources, particularly in connection with the development, utilization or exploitation of mineral, water or other resources.” Indigenous organizations in Bangladesh, most notably Jatiya Adivasi Parishad, have consistently, persistently and courageously opposed construction of the Phulbari mine for more than six years. In light of this opposition, how can GCM comply with Article 32 of the Declaration on the Rights of Indigenous Peoples?
Mr. Chairman, Jatiya Adivasi Parishad and independent researchers assert that 50,000 Indigenous people would be adversely affected by the Phulbari coal project. How is it possible for this project to proceed without violating their rights?