Phulbari, Asia Energy And Grassroots Revolt

Published by MAC on 2007-03-17

Phulbari, Asia Energy and Grassroots Revolt

Megh Barta

17th March 2007

In the last week of August 2006, an unbelieving nation has watched, with increasing concern, tragedy unfold in a coal-rich area of Dinajpur. Popular protests against the Asia Energy Project had resulted in firing by the BDR on citizens, leaving at least three of them dead and more than two hundred injured. In this report Philip Gain looks at the issue and explains the background to the crisis.

The grassroots revolt in Phulbari against the open-cut mining plan of Asia Energy, a British company, seemed like an unstoppable inferno. The anger of the local people was real. They took to the streets of Phulbari town in thousands on 26 August 2006. It was an unprecedented scene. An estimated 50,000 farmers, laborers, members of ethnic communities, teachers, students, politicians—most of them from the mine area—assembled in the Phulbari town to tell the foreign company that it must vacate their land and sacred places. They would rather die than allow the company to open up their land for coal that would require relocation of a huge population.

The protesters had just sticks in their hands. The Santals (the largest ethnic community in North Bengal) joined with their drums, bows and arrows. The National Committee to Protect Oil, Gas, Mineral Resources, Power and Port organized the massive protest event. The protesters began their march towards the offices of Asia Energy at about 3:30 P.M. without understanding that the worst was waiting.

As the massive rally reached the Chhoto Jamuna river, they were stopped by barricades set by the security forces. While the main part of Phulbari town is located on the east of the river with a small bridge over it, the head office of Asia Energy and its warehouse are located on the other side. The barricades were set to stop the protesters from going near the company's head office. The leaders of the national committee talked to the Upazila Nirbahi Officer (UNO), who according to Prof. Anu Muhammad, the member secretary of the committee, gave his words to move Asia Energy out of the town.

This was not the end of the day! As Prof. Anu Muhammad and other leaders of the national committee went back, some protesters crossed the river as reported by eyewitnesses. A rally also approached from the western side of the river. The protesters on the western side of the river suddenly came under massive gunfire from the BDR and teargas shells from the police. At least three people were killed and more than two hundred were wounded.

The bloodshed led to a seemingly unstoppable protest leading to a continued strike in Phulbari. The demand for expulsion of the company from Phulbari and also from the country became stronger. The protesters set the deadline for the foreign company's exit at 11:00 A.M. on 28 August. Given that Asia Energy's employees were still there, the angry protesters burnt the information center of Asia Energy and ransacked its laboratory (warehouse) that stored samples of coal extracted from 150 drilling sites. Finding no way out, the Asia Energy staff then sealed their main office and left Phulbari in a roundabout way, viz., through Dinajpur, under police escort. The people also ransacked and burnt the houses of a number of people identified to be accomplices of Asia Energy.

It was on the fourth day [August 30, 2006] of the continued strike that the Government, in a dramatic turn, submitted to the Phulbari protesters and agreed to meet all six of their demands. Foremost of the demands are to expel Asia Energy from four Upzilas including Phulbari and the country. The government also agreed not to opt for open-cut mining in four Upazilas including Phulbari and any other part of Bangladesh.

The agreement was reached in a meeting at Parbatipur Upazila, neighboring Phulbari and one of four Upazilas in the mine footprint. Rajshahi City Corporation Mayor Mr. Mizanur Rahman Minu signed the deal on behalf of the government while Prof. Anu Muhammad signed it on behalf of the National Committee to Protect Oil, Gas, Mineral Resources, Power and Port.

In accordance with the agreement, the national committee representing the protesters ended the strike and other protest programs. The government conceded to compensate the families of those killed and pay the medical expenses of those wounded. A sum of Taka two lacs was sanctioned to each of the families of the 26 August killings and Taka nine lacs for the treatment of those injured and damages caused in the ransack of hotel, restaurant, houses, etc. The government also gave its word to drop cases filed against the protesters and reinforce inquiries into the killings of August 26 and the alleged hiding of corpses. The government was also to cease from harassing and filing any new cases against the protesters.

While the people became jubilant in Phulbari and quiet for the time being, full implementation of the agreement between the National Committee to Protect Oil, Gas, Mineral Resources, Power and Port and the government seems to be the hardest part of the episode. The initiative to strike a deal with the protesters is reported to be a matter handled solely by the prime minister's office. The energy adviser and the concerned ministry reportedly know nothing officially about the government deal with the Phulbari protesters.

According to the agreement between the government and the national committee, the government was to terminate the contract with Asia Energy within one month from the date of signing it. However, according to Prof. Anu Muhammad the agreement has not been implemented to date. In the mean time, the company (Asia Energy PLC) has changed its name to Global Coal Management PLC (in the second week of January 2007) although the company's Bangladesh subsidiary's name would reportedly remain unchanged.

What has happened in Phulbari is tragic and it is important that all concerned honestly look into the factors that had led to this catastrophic situation.

The Project

An Australian company, BHP, started coal exploration in the Phulbari area. The Bangladesh government signed a contract with BHP through an open tender. In 1998, the contract was transferred to Asia Energy. Asia Energy, after estimating the coal reserve, submitted to the government a plan of operation. The government has already granted environment clearance to the company.

According to Asia Energy, 5,900 hectares or 59 sq. km. land area is required for the mine. The area covers more than a hundred villages of seven unions in four Upazilas—Phulbari, Birampur, Nawabganj and Parbatipur—and part of Phulbari Sadar Upazila, under Dinajpur district. Thousands of acres of cropland fall within its boundaries.

The area of Phulbari Thana Sadar that falls within the project area has brick-built houses, schools, colleges, tarmacked roads, railroads, business facilities and so forth. Outside the township lie vast crop fields, forest patches and plantations. Beneath the expanse of beautiful landscapes lies the 38m thick (on average) coal fossilised over 270 million years. According to Asia Energy the coal reserve in this mine is 572 million tons. The company believes, if explored, more coal will be traced in the south of the present mine.

Who Benefit and Who Lose?

Appointed by Asia Energy, GHD, an international organisation, prepared a report for the company that claims Bangladesh will receive benefits worth US$21 billion over the 30 years of the mine's lifetime. Of this, US$7.8 billion will come as a direct benefit and US$ 13.7 billion, as indirect or multiplier benefits. The mine itself and the coal-fired plant for production of electricity will contribute one percent per annum to the GDP of the country.

How dependable is this estimate of Asia Energy? Economist Prof. Anu Muhammad, in an interview with Sangbad, a vernacular daily newspaper, contended: "This evaluation of the mine project is a kind of deception. It only shows how Bangladesh will benefit from the investment of Asia Energy and suppresses the extent of damage it would cause. This is actually a sham on Asia Energy's part because it intends to cover up the questions about its activities that have already been raised."

The inhabitants of the mine area complain that people living in other parts of the country do not realize their plight, nor do they foresee the disaster the open pit mining is likely to cause to this region.

"We heard there is a coal deposit in this area. But the people engaged by Asia Energy did not let us know that the method for mining would be open cut, which necessitates eviction and destruction of our houses, schools, colleges and all other establishments in the mine footprint. All of us, irrespective of party affiliations, are against it," said Md. Khurshid Alam Moti, leader of the Phulbari Raksha (protection) Committee. He is also the principal of Phulbari Women's Degree College and chairman of Bangladesh Nationalist Party (BNP) in Phulbari.

According to Asia Energy that is in contract with Bangladesh government for exploration of coal, 40,000 people need to be relocated from the mine footprint. But the Phulbari Raksha Committee that is composed of people from all parties at the local level contends the company's estimate. "We understand that about 150,000 people of the mine area will be directly affected and 200,000 to 250,000 would be affected indirectly," said Moti.

Nima Banik, a lecturer at Phulbari Women's Degree College says, "No matter wherever we are put, if we get evicted from our homes, we will lose our traditions, social organization and businesses. These losses are beyond compensation. Moreover, we do not trust Asia Energy. Its estimate is unfounded."

M. Anwarul Islam, Asia Energy's general manager (environment and community) disagreed and said, "We have always mentioned the idea of open pit. In Phulbari, there is no other option."

According to the company all the damages will be compensated and the condition of the inhabitants of the mine area will be better than before. However, the aura of distrust and the demand of the locals is clear: "We do not want open pit mining." From June 2005 the Phulbari Raksha Committee has been organising processions and meetings every Saturday in Phulbari in protest against it.

Asia Energy claims that Bangladesh has no risk in the Phulbari mine project. The company claims that Bangladesh will receive half of the total profit accrued from the mining operation. The profit includes 6 percent royalty, 45 percent corporate tax and 2.5 percent import duty. The other gains of Bangladesh as the company mentions will be "a new source of energy for the country, a new commodity for export, new industries, employment opportunities, regional development, poverty alleviation, growth of nascent industry, new rail and port infrastructure."

Professor Anu Muhammad's fear is: "It is Bangladesh where the coal has been found; and a foreign company will become its owner. There is no proper way to measure the actual benefit of Bangladesh and the price it would have to pay for it. What becomes clear is Bangladesh will have to buy its own coal from the company at an international price."

Impacts on Environment

A serious concern of open pit mining is its environmental impacts. The method requires the mine area to be completely dewatered so that the hollow of the mine does not get immersed in water. Not an easy task. Large pumps are required to suck out underground water around the mine round-the-clock during the entire lifetime of the project. The impact on the already dry Barind Tract is obvious. Water level runs lower in the Barind Tract the during dry season and makes it difficult for the tubewells to draw water. When dewatering starts for the mining, the shallow and deep tubewells will not draw enough water for farmers in the larger area near the mine.

Asia Energy's solution is to distribute the water pumped out among the farmers. It is an open question if the water distribution would be even-handed. The government and non-government organizations have been trying many options including tree plantation for many years now to prevent desertification in north Bengal. If dewatering in the mining area hastens the desertification process, pouring water above the ground remains a doubtful viable option for agricultural sustainability.

According to Asia Energy sources the average thickness of the coal layer in Phulbari is 38m. In order to reach the layer of coal, overburden between 150 and 250m needs to be removed, leaving a thousand-foot deep hollow. Once used up, the hollow will be filled with earth and a new area will be dug out. The area filled up does not become useful for many years. According to a high official in Asia Energy, topsoil will be removed and preserved once the mining operation begins in a particular block. Topsoil will be brought back and spread on the top of the area filled in. But no one can say when the land becomes cultivable again. The other question is: will the company fill the hollow with the same care as is done in developed countries? Non-compliance of existing laws is a common practice in Bangladesh.

At the final stage of the mining operation, about 30 years after the operation begins, Bangladesh will get a huge lake that according to the company will be filled up with fresh water providing a big source of water, fishery and recreation. But mining experts warn that the final hollow, after 30 years of digging and other activities, will contain toxic substances. It may not be realistic to envision this polluted lake becoming a source of fresh water.

Handling the other forms of environment pollution is also a challenge. There will be routine dynamite explosion inside the mine to break the rocks and the coal. Heavy machinery will be set up in and outside the mine. Heavy 240-ton trucks and trains will carry the coal causing noise pollution. Coal dust will be a major source of air pollution. If the enormous amount of polluted water generated from washing of the coal is not properly treated before it is dumped into surrounding water bodies, it will kill fish and other forms of life. Further, the earth through such deep digging and many types of pollution will lose all its micro-organisms. Air pollution from burning of coal to produce electricity is a big concern. Air polluting agents such as sulphur dioxide, nitrogen oxide, volatile organic compounds (VOC), mercury, lead, cadmium, chromium, and arsenic will contaminate earth, water, plants and animals.

Eliminating pollutants is extremely difficult. Asia Energy expects to keep the pollution within a tolerable level. However, there is a fear that the company will not adopt adequate measures to mitigate pollution because these involve much effort and cash.

Transportation of the coal is another concern. In order for marketing, the coal will be carried to the deep seaport through the Sundarbans. New seaport and railroads need to be built for this. On the positive end, this will create employment and bring in revenue, but it also adversely affects the environment of the Sundarbans (the largest mangrove forest on earth). The noise and water pollution created by the Mongla Port has already become a threat to the animals, plants and other life forms in the mangrove forest. The added transportation over the 30 years of the mine's lifetime will increase threats to the Sundarbans.

The environment and social impact assessment (EIA and SIA) of the Phulbari Coal Project has already been carried out and approved by the Department of Environment of Bangladesh government. Three hundred consultants of several international and national companies, some Bangladeshi environmental organizations and individuals have done the EIA and SIA. They have produced 2,600-page reports after 18 months of work. This is where many question if the EIA and SIA commissioned by the same company that will extract the coal have been impartial. Asia Energy claims it will do all that is needed for the protection of environment and social harmony.

Although the people of the mine area and their supporters stand against the open pit project, they are not against extraction of the coal in general. Their understanding is that the ownership of the coal and the fate of the affected people just cannot be handed down to a foreign company. They suggest waiting until the country develops its own mining expertise and technology. "We may give our consent when the country will be able to mine the coal resource with our own technology," said Principal Moti. There are many others whose voices join Principal Moti's.

Asia Energy had turned down the demand of the Phulbari people to wait until Bangladesh built its own expertise and mining technology. It says that by the time Bangladesh has its own mining expertise and resources, the fossil fuel may not be required any longer. The company claims that it is high time to extract the coal. Now the local communities have contested the company with their blood.

Looking Ahead

All that has happened in Phulbari—violence, expression of anger and mistrust of the local communities about Asia Energy—has shaken the whole nation. The whole world has also looked at Bangladesh with concern and curiosity. For now Phulbari has retuned to normal life. But the fear still persists. Application of the state security forces against the people has caused an uproar in their minds. They have sent a very strong message to the state agencies and the company that it is their land that contains 270 million year old coal. It is them who decide if the resource is to be shared in the best interest of the community and the nation. It is the state that must protect the land and the communities. It was certainly a fatal mistake to attempt to resolve a serious human problem with bullets and teargas. If the state of Bangladesh is really for the people, its functionaries must stay bowed before the people's power and respect the commitments that they have made to their representatives. If that happens, it will be a step forward for providing political protection to those who need it most.