MAC: Mines and Communities

Asian Development Bank to Investigate Tata Mundra

Published by MAC on 2014-01-24
Source: Statement. Business Standard

After World Bank, Asian Development Bank to Investigate Tata Mundra

Finds Prima Facie Evidence of Non-compliance with ADB Policies

MASS - Association for the Struggle for Fishworkers' Rights Press Release

23 January 2014

Mundra, Gujarat: Three months after Compliance Advisor Ombudsman (CAO) - the independent accountability mechanism of World Bank Group's private sector arm International Finance Corporation (IFC) - published its scathing report on the serious violations of IFC policies in its investment in Coastal Gujarat Power Ltd (CGPL - Tata Mundra), another co-financier of the project, the Asian Development Bank (ADB) decided to investigate the policy violations while financing the 4000 MW coal plant in Mundra, Gujarat.

The Board of Directors of ADB approved the recommendation of its accountability mechanism, the Compliance Review Panel (CRP) for full investigation, as published in its Eligibility Report.

ADB has invested US $450 million in the project. Other investors include IFC, Korean ExIm Bank, BNP Paribas, State Bank of India, HUDCO and India Infrastructure Finance Company Ltd.

In its report, CRP says, "The CRP finds prima facie evidence of non-compliance with ADB policies and procedures, and prima facie evidence that this non-compliance with ADB policies has led to harm or is likely to lead to future harm. Given the evidence of non-compliance... the CRP concludes that the non-compliance is serious enough to warrant a full compliance review."

Machimar Adhikar Sangharsh Sangathan (MASS - Association for the Struggle for Fishworkers' Rights) welcomes the investigation. MASS submitted a complaint to CRP in October last year.

Responding to the significant victory of people's struggle, MASS' General Secretary Dr. Bharat Patel said, "We welcome the full investigation by CRP. After having received a confirmation of our concerns by CAO, we hope an independent and indepth investigation by CRP will further reconfirm our concerns and actions will be taken on the findings."

In October last year, CAO published its finding after a year-long process of investigation. CAO found that environmental and social risks and impacts of the project were not considered and addressed; there was no social baseline data; IFC's policies for land acquisition were not applied despite physical and economic displacement; inadequate attention was paid to the requirement of biodiversity conservation; IFC failed in its review and supervision of the impacts on airshed & marine environment and IFC failed to examine the cumulative impact of projects around Tata Mundra.

Despite such scathing findings, and growing global criticism for IFC's continued support to Tata Mundra, World Bank President Dr. Jim Kim refuses to take any appropriate action.

In its Eligibility Report, CRP found the following evidence of non-compliance: ADB held insufficient public consultations; the project-affected area is defined erroneously; CGPL discharges water at a higher temperature than is allowed by ADB standards; ADB's air emission standards are not met; insufficient cumulative impact assessments; flawed social and environmental impact assessments; harmful effects of the cooling system on the environment and the fish harvest; inaccessibility of fishing grounds and effects of coal-dust emissions.

ADB management in its response tried to discredit the complainants, questioned their locus standi and defended its investment and actions of its client.

"This is certainly a move in the right direction," said Madhuresh Kumar, national organiser of National Alliance of People's Movements. "At a time when corporations, in collusion with corrupt politicians and supported by financiers both national and international, plunder national resources and are not accountable to anyone, ADB reviewing its policy compliance in Tata Mundra gives hope that people's concerns will be looked into. We hope appropriate and timely actions will be taken on the findings," he added.

"We hope the World Bank President will take note of the CRP report. It's not just his own CAO who have reconfirmed our concerns, but now even CRP has done it. How long can he pretend not to see this growing evidence of non-compliance by Tata Mundra? He should take bold actions in Tata Mundra and walk his talk on climate change," Dr. Patel said.

Contacts:

Bharat Patel (Gujarat): +91-9426469803
Joe Athialy (New Delhi): +91-9871153775
Rayyan Hassan (Manila): +63-9175117002

ADB compliance review on Tata Mundra UMPP

The ADB has found "prima facie evidence of non-compliance with (its) policies and procedures"

Business Standard

24 January 2014

Ahmedabad - In what could be fresh trouble for the Tata group's 4,000-Mw ultra mega power plant (UMPP) in Mundra in Kutch, Asian Development Bank's (ADB) board has ordered compliance review of the project in accordance with the Accountability Mechanism Policy (2012) of the bank.

After a compliance audit in October 2012, the ombudsman for International Finance Corporation (IFC), a part of the World Bank group, had held that there were serious lapses by IFC in supervision of Tata Power's UMPP in Mundra, impacting environment and livelihood of the local fishing community there. It had further held that IFC's review of project's environment and social assessments were not commensurate with project risk as required by its sustainability policy.

Following these conclusions by the Ombudsman, the Coastal Gujarat Power Limited (CGPL), a fully-owned company of Tata Power which operates the UMPP, came out with an elaborated action plan in response to concerns raised over the impact on environment and livelihood of the local fishing community in Mundra. IFC has invested $450 million of its own capital in this project, which it has classified as a category A project, signifying that it believes there are potentially significant adverse social and environmental impacts that may be diverse or irreversible.

The ADB board decision comes after the bank's Accountability Mechanism Compliance Review Panel (CRP) found "prima facie evidence of non-compliance with ADB policies and procedures and prima facie evidence that this non-compliance with ADB policies has led to harm or is likely to lead to future harm".

The CRP further concluded after primary investigation that "the noncompliance is serious enough to warrant a full compliance review".

The ADB board on January 21 had approved the CRP's recommendation. The CRP found evidence of non-compliance with regard to insufficient public consultation, definition of project-affected area, environmental standards and emission levels and cumulative impacts due to various factors.

These factors have been explained in detail in the CRP's report.

The CRP had acted on a complaint filed by Bharat Patel, general-secretary of Machimar Adhikar Sangharsh Sahatan (MASS) and two MASS members -Gajendrasinh Bhimaji Jadeja and Harun Salemamad Kara. MASS, an association of local fishermen in Mundra, had alleged the project had harmed their livelihood, health, and environment. They attributed the harm to ADB's failure to adhere to its operational policies and procedures on environmental and social safeguards.

The ADB has invested $450 million in the project. Other investors include International Finance Corporation (IFC), Korean EximBank, PNB Paribas, State Bank of India, HUDCO and India Infrastructure Finance Company Ltd. Of that amount, $200 million is syndicated to the Export-Import Bank of Korea (KEXIM) through a risk participation agreement.

The project was fully commissioned on March 21, 2013, after the last unit reached commercial operation. Currently, the project serves two per cent of India's power needs.

When contacted, the company said in a statement: "Coastal Gujarat Private Limited (CGPL) would like to reiterate that the review authorised by the ADB is of its own internal processes. We are happy to cooperate with ADB on any information/support that may be required while conducting the review. CGPL, Tata Power's 100 per cent subsidiary implementing 4,000-Mw UMPP based in Mundra would as always be open to any constructive and transparent process to establish its credentials."

It added: "Mundra UMPP project strictly abides by stipulated norms for its operations including environment, community engagement and ecological impact and we are confident that we have no non-compliance issue on Mundra project. In line with its focus on sustainability, the company has adopted a multi-dimensional community development programme for its community through a consultative process and is committed to being a ‘neighbour of choice'."

"The UMPP project boundary consists of less than one per cent of the Kutch coastline and therefore is insignificant in terms of exposure and we wish to reinforce that the core issues raised are not specific to Mundra UMPP and relate to certain generic issues concerning the coastline of Gujarat. The company is committed to its communities and environment in which it operates. Mundra plant is fully compliant on all environmental and social norms and the same has been endorsed by MoEF (ministry of environment and forests) and other statutory bodies. The project was initiated by the government of India and all required clearances were obtained initially by the government and later by the Mundra UMPP in complete compliance of laws of the land," the company statement read.

Tata Mundra: IFC's Action Plan on CAO report is empty, is a non-starter

Public Statement

28 November 2013

We reject this statement and action plan.

The 1.5 page statement and action plan on Tata Mundra issued by IFC CEO Jin-Yong Cai is a non-serious, non-committal one, and issued under duress from the growing criticism of IFC's / World Bank President Kim's inaction on CAO's findings of serious social and environmental violations. It's empty and a non-starter. By issuing this, IFC is trying to confuse the public, making a mockery of communities' concerns and yet again, undermine CAO and its findings.

While some of the action plan stated are listing of actions taken pre-CAO time, some other are just suggestions, resulting in nothing particular. Eg: household level socio-economic survey, health survey and testing of ash residue for radioactivity and heavy metals. The action plan fails to say what happens after these surveys and testing. There are no timeline, no specific targets or indicators. Significantly, the statement says that it will bank on the expertise of the company, whose violations are in question.

Importantly, the statement is silent on IFC's violations of its own policies, listed by the CAO. CAO, in its report issued last month found that:

CAO concluded that "...the above weaknesses in IFC's E&S review of CGPL did not support the formation of a robust view as to whether the project could be expected to meet the requirements of the Performance Standards over a reasonable period of time, the threshold question in terms of IFC's decision to invest."

The statement or the action plan fails to address any of these.

It is baffling that President Kim is still reluctant to take any action on the findings, and leave it to IFC, the violator, to be its own judge. He does not hold anyone accountable for the violations. Rather, he is putting precedence to his own staff and other clients, that violations will be tolerated and, maybe even, rewarded!

We reject this statement and action plan. This is only an attempt to obfuscate the liability and making mockery of communities' concerns.

We, along with our allies and well-wishers in India and across the globe reiterate our demands:

Bharat Patel
General Secretary
Machimar Adhikaar Sangharsh Sangathan
Blog: http://masskutch.blogspot.in/
Contact: +91-9426469803

Background:

a. CAO Audit Report: http://www.bicusa.org/wp-content/uploads/2013/10/CAOAuditReportC-I-R6-Y12-F160.pdf

b. IFC Response to CAO report: http://www.bicusa.org/wp-content/uploads/2013/10/IFCresponsetoCAOAudit-CoastalGujaratPowerLimited.pdf

c. Key findings and observations: http://www.bicusa.org/wp-content/uploads/2013/10/Key-Observations-and-Findings.pdf

d. Press note of MASS: http://www.bicusa.org/wp-content/uploads/2013/10/MASS-Press-Release-10-24-131.pdf

e. Indian organisations' letter to World Bank President: http://www.bicusa.org/over-100-organizations-demand-world-bank-withdrawal-from-tata-mundra/

f. International organisations' letter to World Bank President: http://www.bicusa.org/groups-worldwide-join-indian-people-demanding-kim-pull-ifc-out-of-tata-coal-plant/

g. Facebook page: https://www.facebook.com/pages/Wake-Up-Kim/677682028922900

h. MASS letter to World Bank President Dr. Kim: http://www.bicusa.org/local-gujarati-group-sends-letter-to-dr-kim-urging-withdrawal-from-tata-mundra/

Over Hundred Organisations Demand World Bank Withdrawal from Tata Mundra

Press Statement

4 November 2013

Over a hundred prominent organisations expressed shock over World Bank President Dr. Jim Kim's inaction on the audit report on Tata Mundra Power Project in Gujarat, condemned it and demanded International Finance Corporation's (IFC) withdrawal from the project.

"People's movements and their allies in India are shocked that you have cleared the IFC Management's response to the CAO Audit Report on Tata Mundra Project," the letter sent today to the President said. "The CAO findings warrant nothing less than IFC's withdrawal from the project" they added.

Condemning it they said, "Your endorsement of IFC's response to CAO findings and thus letting IFC and the company continue the violations merits nothing less than condemnation."

The independent recourse mechanism of IFC the Compliance Advisor Ombudsman (CAO) released their findings on October 24, after a year-long investigation into the financing of IFC to the project. CAO found IFC made serious lapses in funding Tata coal plant.

The letter was issued in support of the local organisation, Machimar Adhikar Sangharsh Sangathan (MASS). It was signed by National Alliance of People's Movements, Narmada Bachao Andolan, Mazdoor Kisan Shakti Sangathan, All India Union of Forest Working People, India Climate Justice, National Fishworkers Forum, All India Forum of Forest Movements and others.

Taking serious note of the inaction of the President the organisations said, "By your decision to keep your eyes closed to the damning findings of CAO, you are complicit in the human rights violations, livelihood loss, impacts of air pollution, water contamination, and perilous marine ecological disaster in the wake of the IFC-funded project."

Looking at the larger malice of World Bank, the letter said, "(World Bank's) compliance mechanisms like CAO and Inspection Panel are increasingly becoming a farce, while the Bank continues aiding projects - whether hydro projects or coal projects, infrastructure development, or meddling with our policies and legal system." World Bank Group has currently 386 active projects in India with a committed portfolio of $29.5 bn.

Concluding the letter, they said "We will continue our struggles against the Bank, its policies and its blatant disrespect of human rights. We will strengthen the struggle of MASS and would challenge you and your Bank at every possible avenue."

Background:

The 4000 MW Coastal Gujarat Power Ltd (Tata Mundra) is finance by International Finance Corporation (IFC), Asian Development Bank, Korean ExIm Bank and other national Banks.

A complaint by the local organisation MASS to the recourse mechanism of IFC the Compliance Advisor Ombudsman (CAO) led to a full investigation into the financing of the project.

CAO validated major MASS complaints. It found the IFC committed serious supervision failures and significant policy breaches.

CAO confirmed that the environmental and social risks and impacts of the project were not considered and addressed; there is no social baseline data; IFC's policies for land acquisition not applied, despite physical and economic displacement, Inadequate attention paid to the requirement of biodiversity conservation; IFC failed in its review and supervision of the impacts on airshed and marine environment and IFC failed to examine the cumulative impact of Tata Mundra.

IFC rebutted the findings of CAO.

Resources:

CAO Audit Report

IFC Response to CAO Audit Report

Key Observations and Findings from CAO Audit
Press Release by MASS dated October 24, 2013

Contacts:

Madhuresh Kumar: +91-9818905316
Soumya Dutta: +91-9213763756

---------------

November 4, 2013

Dear President Dr. Jim Yong Kim,

People's movements and their allies in India are shocked that you have cleared the IFC Management's response to the CAO Audit Report on Tata Mundra Project, and thus undermining the credibility of your own recourse mechanism meant to address the grievances of the project-affected people.

CAO issued a report showing how IFC committed serious lapses and violations of its safeguard policies in the 4, 000 MW Tata Coal Plant in Mundra. The report, which was most meticulously drafted after rigorous studies was simply refuted by IFC, who not only defended their involvement in the project, but also claimed the same for their client Coastal Gujarat Power Ltd. (CGPL).

We express our solidarity with Machimar Adhikar Sangharsh Sangathan (MASS - Association for the Struggle for Fishworkers' Rights), an organization of project-affected fishing families, and the principal complainant to CAO.

Your endorsing IFC's response is a cruel shock to the numerous fishing families affected by the project, who hoped for a better response to the findings based on your expertise in public health, and firm and resolute words to address climate change. Your endorsement of IFC's response to CAO findings and thus letting IFC and the company continue the violations merits nothing less than condemnation.

By your decision to keep your eyes closed to the damning findings of CAO, you are complicit in the human rights violations, livelihood loss, impacts of air pollution, water contamination, and perilous marine ecological disaster in the wake of the IFC-funded project.

Your decision reconfirms that the Bank does not care about accountability, does not care about people and the environment. WBG's compliance mechanisms like CAO and Inspection Panel are increasingly becoming a farce, while the Bank continues aiding projects - whether hydro projects or coal projects, infrastructure development, or meddling with our policies and legal system.

The CAO has given all the reasons to say that the Tata Mundra project has gone all wrong, right from the time of planning and impact assessments and at every stage of its execution. The findings are based on scientific studies and the conclusions drawn after hearing all sides - the affected communities, IFC and the company. Such findings conscientiously implicate the role of the WBG.

The CAO findings warrant nothing less than IFC's withdrawal from the project. We will continue our struggles against the Bank, its policies and its blatant disrespect of human rights. We will strengthen the struggle of MASS and would challenge you and your Bank at every possible avenue.

Sincerely,

 

1. Medha Patkar, Narmada Bachao Andolan, Maharashtra
2. Sandeep Pandey, National Alliance of People's Movements
3. Nikhil Dey, Mazdoor Kisan Shakti Sangathan, Rajasthan
4. Ashok Choudhary, All India Union of Forest Working People
5. India Climate Justice, New Delhi
6. T. Peter, National Fishworkers Forum, Kerala
7. Praful Bidwai, Journalist, New Delhi
8. Souparna Lahiri, All India Forum of Forest Movements
9. Dunu Roy, Hazards Centre, Delhi
10. Bela Bhatia, Honorary Professor, Tata Institute of Social Sciences, Mumbai
11. Magline Peter, Teeradesa Mahla Vedi, Kerala
12. Afsar H. Jafri, Focus on the Global South
13. Shweta Tripathi, Society for Rural Urban and Tribal Initiatives, New Delhi
14. Kiran Shaheen, Right to Water Campaign, Delhi
15. Richa Singh, Sangtin Kisan Majdoor Sangthan Uttar Pradesh
16. Subash Mohapatra, Journalist, Odisha
17. Ravi Nitesh, Save Sharmila Solidarity Campaign, New Delhi
18. Krishnakant, Paryavaran Suraksha Samiti, Gujarat
19. Juned Khan Komal, Society for Promotion of Wastelands Development, Rajasthan
20. Diwan Singh, Yamuna Satyagraha, New Delhi
21. Kaveri R.I Bangalore, Karnataka
22. Ashim Jain, Bangalore, Karnataka
23. Ajitha George, Omon Mahila Sanghatan, Jharkhand
24. Amulya Kumar Nayak, Odisha Chas Parivesh Surakshya Parisad, Odisha
25. Latha Anantha, River Research Centre, Kerala
26. Usha S, Thanal, Kerala
27. Leo Saldanha, Environment Support Group, Karnataka
28. Kanchi Kohli, Kalpavriksh, New Delhi
29. Vinay Baindur, Researcher Urban Governance and Decentralisation, Karnataka
30. Madhusudhan, Yakshi, Hyderabad, Andhra Pradesh
31. Sagari Ramdas, Anthra, Hyderabad, Andhra Pradesh
32. Shweta Narayan, Community Environmental Monitoring, Chennai, Tamilnadu
33. BIRSA - Bindrai Institute for Research Study and Action, Jharkhand
34. Awadhesh Kumar, Ssrijan Lokhit Samiti, Madhya Pradesh
35. Jharkhand Mines Area Co-ordination Committee, Jharkhand
36. Sunderrajan, Poovulagin Nanbargal, Chennai, Tamilnadu
37. Reena Rebari, Ujjas Mahila Sangathan, Gujarat
38. Pandudora, Adivasi Aikya Vedika, Andhra Pradesh
39. Shankar Sharma, Policy Analyst, Andhra Pradesh
40. Wilfred Dcosta, Indian Social Action Forum (INSAF), New Delhi
41. M Kikon, DICE Foundation, Nagaland
42. Gopal Krishna, ToxicsWatch Alliance, New Delhi
43. Achin Vanaik, Retd. Professor of International Relations, University of Delhi. Delhi
44. Shalini Gera, Chhattisgarh Mukti Morcha, Chhattisgarh
45. Sanjeev Kumar, Delhi Forum, Delhi
46. Vijayan M.J., Programme for Social Action, New Delhi
47. Madhuresh Kumar, National Alliance of People's Movements, New Delhi
48. P.T. George, Intercultural Resources, New Delhi
49. P Chennaiah, Andhra Pradesh Vyavasaya Vruthidarula Union, Andhra Pradesh
50. Dr. Sunilam, Aradhna Bhargava - Kisan Sangharsh Samiti, Madhya Pradesh
51. Prafulla Samantara, Lok Shakti Abhiyan, Odisha
52. Gautam Bandopadhyay, Nadi Ghati Morcha, Chhattisgarh
53. Suniti SR, Prasad Bagwe - SEZ Virodhi Manch, Maharashtra
54. Gabriel Dietrich, Pennurimai Iyakkam, Tamilnadu
55. Geetha Ramakrishnan, Unorganised Sector Workers Federation, Tamilnadu
56. Bhupender Singh Rawat, Jan Sangharsh Vahini Delhi
57. Sunita Rani, Domestic Workers' Union, Delhi
58. Anita Kapoor, Delhi Shahri Mahila Kaamgaar Union, Delhi
59. Rajendra Ravi, Institute for Democracy & Sustainability, Delhi
60. Arjun Singh, National Cyclist Union, New Delhi
61. Arundhati Dhuru, Right to Food Campaign, Uttar Pradesh
62. Sister Celia, Domestic Workers Union, Karnataka
63. Sumit, Madhuri Shivkar, Simpreet Singh - Ghar Bachao, Ghar Banao Andolan, Mumbai
64. Dr. Rupesh Verma, Kisan Sangharsh Samiti, Uttar Pradesh
65. Manish Gupta, Jan Kalyan Upbhokta Samiti, Uttar Pradesh
66. Vimal Bhai, Matu Jan sangathan, Uttarakhand
67. Vilas Bhongade, Gosikhurd Prakalpgrast Sangharsh Samiti, Maharashtra
68. Ramashray Singh, Ghatwar Adivasi Mahasabha, Jharkhand
69. Anand Mazhgaonkar, Paryavaran Suraksh Samiti, Gujarat
70. Rohit Prajapati, Radical Socialist, Gujarat
71. Jitn Yumnam, Citizens Concern for Dams and Development, Manpur
72. Borok Peoples Human Rights Organization, Tripura
73. Prasad Chacko, Human Development and Research Centre, Gujarat
74. Ram Wangkheirakpam, North East Peoples Alliance, Manipur
75. Rehmat, Gaurav and Shripad Dharmadhikari - Manthan Adhyayan Kendra, Madhya Pradesh
76. Ranjan Panda, Water Initiatives Odisha. Odisha
77. Samir Mehta, River Basin Friends, Mumbai
78. Xavier Dias, Editor, Khan Kaneej Aur ADHIKAR, Jharkhand
79. Himanshu Upadhyaya, Public Finance Public Accountability Collective, Karnataka
80. Amit Sengupta, Editor, Hardnews, New Delhi
81. Committee on the Protection of Natural Resources in Manipur
82. Clifton D' Rozario, Alternative law Forum, Karnataka
83. Alok Agarwal, Narmada Bachao Andolan, Madhya Pradesh
84. Aanchal Kapur, Kriti, New Delhi
85. Himanshu Thakkar, South Asia Network on Dams, Rivers and People, New Delhi
86. Gururaja Budhya, Urban Research Centre, Karnataka
87. Soumya Dutta, Bharat Jan Vigyan Jatha, New Delhi
88. Falguni Joshi, Gujarat Forum on CDM, Ahmedabad, Gujarat
89. Mahesh Pandya, ParyavaranMitra, Ahmedabad, Gujarat
90. Himanshu Banker, Vikalp, Ahmedabad, Gujarat
91. Dr Leena Gupta SPWD, New Delhi
92. Chetan Vyas, Paryavaran Gauchar Bachao Samiti, Rajula (Amerli), Gujarat
93. Herry Ranva, Bahujan Samajik trust, Rajkot, Gujarat
94. Dipal Dabhi, Adivasi Sarvangi Vikas Sangh, Danta, Gujarat
95. Nirmal Parmar, Charitable Pragati Prayas Kendra, Godhra, Gujarat
96. Tushar Pancholi, Paryavaraniya Vikas Kendra, Rajkot, Gujarat
97. Gautam Thakar, PUCL, Ahmedabad, Gujarat
98. Arvind Padhiyar,Mahisagar Shakti Sangathan, Padra, Gujarat
99. Anil Tharayath Varghese Delhi Solidarity Group
100. Bijulal M.V., Mahatma Gandhi University, Kerala
101. Ravindranath,River Basin Friends, Assam
102. Sumesh Mangalasseri, Kabani, Kerala

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