Saturday, December 22, 2007

Urgent Appeal by World Organization against Torture: Risk of Violent Suppression of Public Opposition to the Phulbari Coal Mine Project



Your action is called for to suspend the Phulbari Project until community concerns are met

OMCT is concerned that police and security forces may again employ violence to deal with public opposition to the Phulbari open-pit mining project

The International Secretariat of the World Organisation Against Torture (OMCT), on the basis of reliable information received, expresses its concern that communities affected by the proposed Phulbari open-pit coal mine in the Dinajpur District of Bangladesh, have been neither adequately consulted not fully informed regarding this significant project.[1] Estimates put the number of people affected by the mine at anything between 50,000 and 500,000, including a number of indigenous communities. Many of these affected will be forced to leave their homes and land.

A public demonstration against the mine in August 2006 saw at least five persons killed and fifty others injured by the police and personnel of the Bangladesh Rifles. OMCT expresses its serious concern that further violence, ill-treatment and even deaths may ensue if local communities again seek to give public expression to their opposition.

To prevent further human right violations, and having regard to the strong local opposition to the project, OMCT calls upon the Government of the People’s Republic of Bangladesh to instigate a thorough independent investigation into the human and environmental impact of the Phulbari coal mine project, ensuring the full and informed participation of all local communities, to make the findings of this investigation available in a public report and to abide by the recommendations of this report. It also calls for the Government to lift the restrictions on public demonstrations imposed under emergency rule and take all necessary steps to prevent future episodes of violence by police and security forces against persons defending their human rights.

OMCT calls upon GCM Resources Plc (GCM) - the company in charge of the Phulbari project - to suspend its activities in this area until this investigation has been conducted and to abide by the recommendations resulting from this investigation. It also calls upopn GMC to fully respect the land rights, resources and livelihoods of all local communities affected by any subsequent mining activity and provide fair and adequate compensation wherever appropriate.

Finally, OMCT calls upon UBS, RAB Capital and Barclays, all of which have significant financial interest in GCM, to use their influence to ensure that the company abides by the recommendations issuing from the independent investigation and to make certain that it complies fully with national laws and international human rights standards.

The Phulbari coal mine project

The Phulbari coal deposit, in the Dinajpur District of Bangladesh, was discovered during the second half of the 1990s by the Australian mining company BHP. In 1998, the Government of Bangladesh awarded the licensing agreement for mining the deposit to the Asia Energy Corporation (Bangladesh) Pty Ltd,[2] a wholly-owned subsidiary of British-registered Global Coal Management Resources Plc. (GCM). The Phulbari mine is expected to lead to a 1 per cent increase in the gross domestic product of Bangladesh over the next 30 years, bringing more that US$ 21 billion to the Bangladeshi economy.[3] The Asian Development Bank is scheduled to approve a US$100 million private sector loan and a US$200 million political risk guarantee in favour of the Phulbari project on the basis of environmental and social impact studies included in a Definitive Feasibility Study carried out since April 2004.[4]

The Phulbari project is an open-pit mine.[5] In order to access the coal seams, it is reported that between 140 and 300 metres of earth will need to be removed, affecting an area of 59 km2. In terms of the human impact of the project, there are differing views. According to estimates from GCM, the mining company involved, the project will affect approximately 50,000 people (a total of some 12,000 households), including some 2,200 indigenous people. Of this total, some 43,000 will be displaced from their homes and land by the mine. This number will be higher if the full-scale expansion plans for the mine are carried out. On the other hand, according to the National Committee to Protect Oil, Gas, Mineral Resources, Electricity and Ports, the number of people potentially affected could be as many as 470,000, including indigenous peoples belonging to Santhal, Munda and Mahali tribes, who occupy some 100 villages in Phulbari and surrounding sub-districts.[6]

In terms of the impact upon community structures, it is reported that the project will involve the closure of 50 educational institutions, including six colleges and 18 madrasas,[7] as well as 171 mosques, 13 temples and other religious establishments.[8] The mine will also have a significant environmental impact due to the considerable waste material produced in the extraction process. This in turn will have serious implications for the livelihood and, potentially, the health of local communities: the area around Phulbari is one of the most productive agricultural zones in Bangladesh, and the project will not only destroy productive farmland, but also cause the diversion of the Choto Jamuna River from its natural course. According to Professor Anu Muhammad in the Faculty of Economics at Jahangirnagar University, Bangladesh, studies in other countries have shown that rivers as far as 160km away from an open-pit mine can remain polluted for three decades as a result of the waste generated. He concludes that "in a country like Bangladesh, with hundreds of small rivers linked like a huge net, polluted water can travel long beyond the mining area."[9] Despite these concerns, on 11 September 2005, the Bangladeshi Department of Environment approved the Environmental Impact Assessment Report prepared by the Asia Energy Corporation and granted environmental clearance for the mining operation.[10]

In order to gain the consent for the project from local communities, Asia Energy reportedly distributed colour televisions, cash, cloths and blankets to affected populations.[11] Furthermore, Asia Energy also reportedly refused to be bound by the 1894 Land Acquisition Act which regulates land acquisition and/or expropriation by the Government, and demanded the adoption of special laws in order to avoid the obligation to obtain the free, prior and informed consent of the affected communities.[12]

On 31 August 2006, five days after large and violent demonstrations against the Phulbari project, the Junior Minister for Food and Relief declared that the Government had revoked all existing agreements with Asia Energy and that a moratorium had been imposed on all open-pit mining in Bangladesh. On the same day, Asia Energy declared that it had received no official communication to that effect, and that the position of the Government remained to be clarified.[13] In practice, coal mining remains an important element in Bangladesh’s development strategy: on 17 November 2007, the Coal Policy Review Committee adopted a proposal encouraging partnerships between the Government and foreign firms engaged in mining in order to promote investment in and develop of the coal sector. The Committee also suggested strengthening the existing Bureau of Mineral Development so that it could deal more efficiently with foreign companies in leasing transactions and indicated its intention to establish coal-based power plants in rural areas.[14]

Local resistance to the project and violence against protesters

“What will happen to us if we are forced to move from here? What will happen to our livelihoods? I don't want us to live like this. Our mosques and holy places and the places we were born will be destroyed. What will happen to the graveyards of our ancestors?”
75-year-old man, resident of Phulbari sub-district[15]

Resistance to the proposed Phulbari project is widespread in the areas. On 26 August 2006, an estimated 50 to 100,000 demonstrators, mainly farmers and indigenous people, protested against the project.[16] At least five demonstrators were killed and about fifty others reportedly injured and taken to hospital after the police and the Bangladesh Rifles (BDR) opened fire on demonstrators.[17] The exact death toll as a result of the shooting remains unclear, and may be as many as ten - it was reported that the BDR dumped some of the dead bodies.[18] Furthermore, the Bangaldeshi Daily Star newspaper reported that, according to eye-witnesses, BDR personnel threatened Magistrate Abdul Aziz with a gun in order to make him sign the authorization to open fire on the protesters.[19] Neither the Government nor the Asia Energy Corporation have taken any responsibility for these events.

Under the Emergency Rule declared by Bangladesh’s military government in January 2007, fundamental civil rights have been suspended and public protest banned.[20] These Emergency Rules effectively remove the possibility of the populations affected by the Phulbari mine engaging in peaceful protest, and OMCT expresses its strong concern that, should such protest nevertheless take place, they will be met with further and possibly more extreme violence on the part of the police and security forces.

Despite the violent suppression of public protest, resistance to the project remains high. On 15 December 2007, representatives of the sub-districts of Phulbari and neighbouring Birampur, Nababganj and Parbatipur wrote to the president and executive Directors of the Asian Development Bank expressing their concern that the project will “increase the poverty of the local population as well as cause environmental disaster”.[21] In this letter they claim that the social impact analysis carried out misrepresented the nature of public consultations around the project and that consultations emphasised the potential benefits of the project while failing to provide information on the negative impact. Furthermore, the community representatives express concern that only minimal information was provided in Bengali regarding the environmental impact of the project and that, to their knowledge, the environmental impact assessment has been neither translated nor summarised in the local language. They also underline that other media must be employed to communicate with a population of which approximately 60 per cent is illiterate. Additionally, they express serious concerns that land compensation and resettlement plans are insufficient to meet the losses likely to be incurred by local populations as a result of the mine, and that Asia Energy/GMC’s claim that 50,000 persons will be directly affected (and hence entitled to compensation) is a significant underestimation.

Economic Social and Cultural Rights

Bangladesh acceded to the International Covenant on Economic, Social and Cultural Rights on 5 October 1998, and consequently the Government of Bangladesh has the duty to ensure the protection, promotion and enjoyment of these rights for all its citizens. The Phulbari mine project jeopardises the human rights of thousands of people due to the mass evictions and destruction of agricultural land it will require and to the pollution that will result from the extraction activities. In particular, OMCT is concerned that the mine will seriously compromise the rights to health and to an adequate standard of living (including access to housing, land, adequate food and clean water) of those affected.[22]

OMCT also wishes to underline the comments of the Special Rapporteur on the situation of human rights and fundamental freedoms of indigenous peoples, Rodolfo Stavenhagen, who has expressed his concerns that the resources of indigenous communities are being appropriated and utilised, without prior consent, by powerful economic consortia, and that this “is currently one of the most controversial issues involving indigenous people, the State, and private enterprises, and often also the international financial institutions.”[23] In addition, the recent UN Declaration on Indigenous Peoples' Rights states that, “indigenous peoples shall not be forcibly removed from their lands or territories. No relocation shall take place without the free, prior and informed consent of the indigenous peoples concerned and after agreement on just and fair compensation and, where possible, with the option of return.”[24]

The role of financial investors

According to the information received, UBS, RAB Capital and Barclays financial institutions all have an interest in GCM, the sole owner of the Asia Energy Corporation and the Phulbari Coal Project. In particular, UBS is the second largest listed shareholder, owning 11.39% of GCM.[25]

OMCT regrets the lack of transparency demonstrated by UBS in responding to civil society queries regarding its involvement in the Phulbari project. In response to questions on its position, the Bank denied that it had any strategic interest in the company and, noting that “it does not comment on potential or specific client relations or transactions or its investments in any particular company” indicated that its purchase of GCM shares “may or may not” have been carried out on behalf of a third party or parties.[26] OMCT calls upon UBS, as a leading financial institution operating in the global market, to lead by example in establishing a more transparent system of accountability, assessing the human rights and environmental impact of potential investments and assuming responsibility for investments in activities that breach international law and violate human rights.

Requested actions: Please write to the Government of Bangladesh asking it to:

Instigate a thorough independent investigation into the human and environmental impact of the Phulbari coal mine project, ensuring the full and informed participation of all local communities. Make the findings of this investigation available in a public report (including appropriate language versions) and abide by the recommendations of this report. Request assistance from the UN Office of the High Commissioner for Human Rights to help ensure that the investigation is in conformity with international standards.

Impose a moratorium on any other open-pit mining in Bangladesh, as initially announced on 31 August 2006, until the full impact on human rights and the environment of this activity has been assessed.

Fully respect international human rights standards in any subsequent mining activity at Phulbari or elsewhere. This includes engaging in meaningful prior consultation with affected populations, ensuring that they are fully informed of the project proposals and their own rights in this regard, and providing fair and adequate compensation for loss of land, housing or livelihood where displacement is unavoidable. Ensure in all such cases an adequate and appropriate resettlement programme.
Ensure that the proposed coal policy review strictly adheres to international human rights standards and to international principles relating to forced evictions and indigenous peoples.

Lift the restrictions on public demonstrations imposed under emergency rule and take all necessary steps to prevent future episodes of violence by police and security forces against persons defending their human rights.

Please write to GCM Resources Plc asking it to:

Suspend activities in Phulbari until a thorough, independent and fully-consultative investigation into the proposed project’s human and environmental impact has been conducted and abide by the recommendations resulting from this investigation.
Fully respect the land rights, resources and livelihood of all local communities affected by any subsequent mining activity, and provide fair and adequate compensation wherever appropriate.

Take all necessary measures to minimise the environmental impact of mining activities and avoid the pollution of watercourses.

Comply fully with national laws and international human rights standards in all aspects of its activities, in particular as regards the adverse effects of these activities on indigenous and local communities. Only carry out operations subsequent to a full human rights impact assessment, and having fulfilled, inter alia, the legal requirement to engage in meaningful prior consultation with persons affected.

Please write to UBS, RAB Capital and Barclays asking them to:

Call for a thorough independent investigation into the human and environmental impact of the Phulbari coal mine project with the meaningful input of local communities.

Use their financial influence in GCM Resources Plc. to ensure that the company abides by the recommendations issuing from the independent investigation and to make certain that it complies fully with national laws and international human rights standards.

Carefully evaluate the impact of their current investments on the enjoyment of human rights around the world, and include a clear human rights impact assessment in future investment decisions. Promote greater transparency in their financial transactions.

Please write to the Asian Development Bank asking it 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 and 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. Continue to monitor the human rights situation in Phulbari and surrounding sub-districts should the project be approved.

OMCT also asks the UN Special Rapporteur on the human rights and fundamental freedoms of indigenous people, the UN Special Representative on the issue of human rights and transnational corporations and other business enterprises, and the UN Special Rapporteur on adequate housing to monitor closely developments as regards the Phulbari coal mine project.

List of addresses

Government of Bangladesh and other Bangladeshi institutions

Cabinet of the Government of the Peoples’ Republic of Bangladesh,

Cabinet Division,

Building No. 1, Room No. 301,

Bangladesh Secretariat,



Tel.: 88-02-7162099

Fax: 88-02-7160656

Dr. Fakhruddin Ahmed,

Chief Adviser Government of the People's Republic of Bangladesh,

Office of the Chief Advisor,

Tejgaon, Dhaka,


Tel: +880 2 8828160-79, 9888677

Fax: +880 2 8113244 or 3243 or 1015 or 1490

Barrister Moinul Hossain,

Adviser, Ministry of Law, Justice & Parliamentary Affairs,

Bangladesh Secretariat,



Tel.: +88-02-7160627

Fax: +88-02-7168557

Mr. Mohammad Ruhul Amin,

Chief Justice,

Supreme Court of Bangladesh,

Supreme Court Building,

Ramna, Dhaka-1000


Fax: +880 2 9565058

Barrister Fida M Kamal,

Attorney General of Bangladesh,

Office of the Attorney General Supreme Court Building,

Ramna, Dhaka-1000,


Tel: +880 2 9562868

Fax: +880 2 9561568

Mr. Nur Mohammad,

Inspector General of Police (IGP),

Bangladesh Police,

Police Headquarters' Fulbaria,



Permanent Mission of the People's Republic of Bangladesh to the United Nations in Geneva, 65 rue de Lausanne,

1202 Geneva,


Fax: +41 22 738 46 16,


Embassy of the People’s Republic of Bangladesh in Brussels,

29-31 rue J. Jordaens,

1000 Brussels,


Fax: +32 2 646 59 98;


Please also write to the Indian Embassy in your country.

The Mining Company

GCM Resources Plc,

2nd Floor, Foxglove House,

166 – 168 Piccadilly,

London, W1J 9EF,

United Kingdom,

Tel.: + 44 (0)20 7290 1630

Fax: + 44 (0)20 7290 1631


Financial Interests

Mr. Marcel Ospel,

Chairman, UBS AG,

Bahnhofstrasse 45,

8001 Z├╝rich


RAB Capital,

1 Adam Street,

London, WC2N 6LE,

United Kingdom.

Te.l: 0870 702 0000

Fax: 0870 703 6101


1 Churchill Place,

London, E14 5HP

United Kingdom.

The Asian Development Bank

The President and Executive Directors,

Asian Development Bank,

P.O. Box 789,

0980 Manila,


Tel.: + 632 632 4444

Fax: + 632 636 2444


Information on action taken and follow-up

OMCT would appreciate receiving information on any action taken in relation to the matters dealt with in this Action File so that it might be shared with OMCT’s network and others interested in this issue. Please quote the code of this appeal on the cover page in contacting us. ***

Geneva, 21 December, 2007

W o r l d O r g a n i s a t i o n A g a i n s t T o r t u r e

P.O. Box 21 - 1211 Geneva 8


Tel.: 0041/22 809 49 39 / Fax: 0041/22 809 49 29

E-mail: / Web:

[1] Thanks to BanglaPraxis for support in preparing this appeal.

[2] Asian Indigenous and Tribal Peoples Network,

[3]BBC News: Bangladesh coal divides region,

[4] See Asian Development Bank – Projects,

[5] Open-pit mines are also known as opencast mines. Both terms refer to the extraction of rocks or minerals by excavating earth to create pits rather than sinking shafts and digging tunnels.

[6] The Daily Star: Rehabilitation issue makes it a tough task,

[7] the Arabic term for “schools”.

[8]The Daily Star: Rehabilitation issue makes it a tough task,

[9] BBC News: Bangladesh coal divides region,

[10] Asian Indigenous and Tribal Peoples Network,

[11]The Daily Star: Cancellation of Phulbari Coal Project demanded,

[12] Asian Indigenous and Tribal Peoples Network,

[13] Asian Indigenous and Tribal Peoples Network,

[14]Government Prime Role Recommended in Coal Mining:

[15] BBC News: Bangladesh coal divides region,

[16]Bangladesh News - Phulbari Coalmine Killing, 28 August 2006,

[17]The people were identified as: Tariqul Islam (24 years-old), Ahsan Habib (35), Osman (24), Raju (8) and Chunnu. Asian Indigenous and Tribal Peoples Network,

[18]Bangladesh News: Phulbari Coalmine Killing, 28 August 2006

[19]The Daily Star: Magistrate forced to give firing order,


[21] see “Phulbari communities write to ADB President and Executive Directors”,

[22] The Basic Principles and Guidelines on Development-based Evictions and Displacement prepared by the Special Rapporteur on adequate housing clearly define forced evictions as a violation of human rights, Basic principles and guidelines on development-based evictions and displacement, A/HRC/4/18 5 February 2007

[23] A/HRC/4/32, 27 February 2007

[24] UN Declaration on the Rights of Indigenous Peoples - Article 10,

[25] as of 15 November, 2007

[26] see

Thursday, December 20, 2007

Phulbari Communities Write to ADB President and Executive Directors

December 15, 2007

President and Executive Directors
Asian Development Bank
Manila, Phillipines

Dear Mr. President,

We are writing to you on behalf of the people of Phulbari, Birampur, Nababganj and Parbatipur upazillas (subdistricts), Bangladesh to request Asian Development Bank (ADB) to remove its support of investment and political risk guarantee for the Phulbari Coal Mine Project. The ADB offers loans in the name of reducing poverty, but if realized, we believe that this project will increase the poverty of the local population as well as cause environmental disaster. The ADB will be helping Asia Energy, a private subsidiary of a UK owned corporation, in violating ADBs own policies regarding public disclosure and subsequently its environmental and social safeguards, Bangladesh laws and condoning internationally recognized human rights violations associated with this project. We have also learned that the planned project violates ADB’s own energy policy.

We address each of our concerns in turn and request that you take them with utmost seriousness.

1) Misrepresentation of Community Support in ADB document

Realizing that “good governance”, “transparency” and “accountability” are major tenets of your organisation, you should know that Asia Energy documents approved by you misrepresent facts as we have experienced them. For instance, the SEIA misrepresents the nature of public consultations held around this project and claims for “broad support” for the project. This is done not only through what the document claims but also by what it omits.

For the record, the vast majority of the Phulbari area communities were open to consultation up to January and February 2005 when little was revealed by Asia Energy about the technicalities and impacts of the mine—the fact that it would be an open pit mine. Up to that point, only promises were made about the benefits of the mine to the people. No negative impact of such technology was mentioned.

Once we educated ourselves on the fact that Asia Energy planned to have an open pit mine in the area that would impact large number of hectares, lead to de-watering, destruction of farming and other long term and short term consequences of the project, there has been clear and widespread opposition to the mine.

Land compensation and resettlement for the vast majority of the people in the area will not result in people being better off or even the same as before the project. The costs of destroying the land, our environment and thus our livelihoods are far greater than what a compensation package could give us.

While it is true that a handful of people have been in favor of the project, any attempt to state that the project has support from the citizens of the four upazillas has no factual basis. On August 26, 2006, this opposition was expressed by a peaceful march of close to 100,000 people from Phulbari and its adjacent areas demanding that Asia Energy leave Phulbari. Sadly, this march ended with the Bangladesh Rifles (BDR) shooting into the crowd, with the instigation from Asia Energy and its brokers (dalals) of killing three people and injuring more than 200. Several articles and upcoming documentaries on this incident can be shared with you.

Some specific examples of the misrepresentation of facts in the ADB approved SEIA:

• The SEIA highlights two consultations (22 March and 7 Sept 2005) that supposedly represented local opinions; however, it fails to note that in July-August 2005, Phulbari Municipal Chairperson Shahjahan Ali Sarkar, on behalf of the municipality council, withdrew the “no objection” letter to the mine.

• The SEIA says that the information center has “an average of 20 people” visiting per day and that 80% of them have written “in support of the project.” The fact is that anyone entering the visitor’s center had to sign the book and this fact did not indicate support of the project. Secondly, many of those people listed as “supporting” the project were not from the area and some do not even exist! The ADB should not take these claims by Asia Energy as prima facie without verifying the truth on the ground.

• We know from certain NGO representatives that they have been associated with such consultations by Asia Energy claims, though in reality, they were never present. We are happy to discuss this with you in detail and provide contacts of these individuals. You should also know that several people of the communities have been either bribed or intimidated into attending these meetings.

2) EIA-related Documents did not exist in Appropriate Form or Language

• Potential project affected people have been given minimal information in Bengali about environmental and social impacts associated with the mine. Project information mainly consists of propaganda by the company in the form of brochures. We learned that only recently have they opened up a website in Bengali.

• We are unaware of any EIA having been translated or even summarized in the local language. This is in spite of the fact that about 60% of the population is illiterate in the area, and the majority of the literate population do not have internet access or adequate knowledge of English to process such information.

• We have been informed that information and a consultation should have been provided to us, as project affected people, when the EIA fieldwork began and when the draft was completed, in the appropriate local language and form. However, the majority of people in the area have no idea whether such consultations took place and who was present and whether documentation/information was provided in a manner that would enable input. The SEIA also does not provide this information.

• We believe that these issues are in direct violation of both your public communications policy and your policy on environmental safeguards.

3) Involuntary Resettlement Plans and Indigenous People’s Plan

• Given Asia Energy’s misrepresentations about consultations and opinions about the mine, the mistrust that has been generated by the company with the people of the area, it is highly unlikely that the company’s draft plans on these issues will be accepted by affected communities. There has never been any translation and availability of such material in an appropriate form or language, though we came to learn that such plans have been available on the Asia Energy website for months.

• 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.

4) Violation of Bangladesh Laws

Asia Energy’s contract with Bangladesh violates laws of the country. If ADB endorses this project, it will essentially endorse these violations of national law. For instance,

• Mines and Minerals Rules (MMR) of 1968 (amended in 1987 and 1989) stipulates 20% royalty on coal and other minerals; however Asia Energy negotiated a 6% royalty deal.

• The government did not officially endorse the original BHP contract in 1998 through a “gazette notification” and thus the contract transfer to Asia Energy also remains illegal

• According to the MMR 1968, Asia Energy was required to deposit three percent of the total value of investment as a Bank Guarantee, but failed to do so.

• Similary, clause 41 of MMR 1968 allows only 400 hectares for open-pit mining, but the Asia Energy project is for 5,900 acres.

• Clause 43 of the Rules allows for ten year leases with extension based on review. However, Asia Energy has been allowed a 35 year mining lease.

• Thus as it stands, Asia Energy has no legal basis as a project sponsor in Bangladesh on Phulbari. Finally, while ADB supports “competitive bidding” in contracts, this private sector project has not been a result of competitive bidding but a simple takeover from BHP.

5) ADB’s violation of its Energy Policy

We have also been informed that the ADB is not allowed to fund coal projects that are not specifically for power plants. Phulbari is far from a power generation project even though a 500 MW power plant is planned. Eighty percent of Phulbari coal will go towards exports to international markets and India. Some of the coal would be used for steel. Thus, it appears that the ADB is also violating its own Energy Policy in supporting this project.


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. Coal extracted from this country should only be used for the benefit of this country. No percentage of the coal will be exported. Therefore, we, the people of this potential mining area, request the ADB to remove its financial support and political risk guarantee from the Phulbari project. In doing so, the ADB will avoid violating its own policies as well as take a firm stance on behalf of the people. Otherwise, it would be obvious that the ADB is taking a position against national interest, the environment and the people of Bangladesh by prioritizing the business interests of a company like Asia Energy.

Monday, December 17, 2007

UBS alerted over Phulbari Coal mine: Human rights concerns for Bangladesh mine investment

Banktrack and Berne Declaration, Zurich, Utrecht, December 17 2007.

UBS, a financial heavyweight from Switzerland, is facing scrutiny by civil society organisations for investing in a proposed coal mine in Bangladesh. The Phulbari coal mine, proposed by GCM Resources Plc, is set to cause major social and environmental upheavals in the region, displacing upwards of 50 000 residents. Despite strong local opposition, investors UBS, RAB Capital and Barclays continue to back GCM with significant shareholdings. GCM Resources' strategic focus is the mine, and financial institutions with sights on easy profits derived from expropriation and significant environmental damage, are propping up a shaky project which has already been stalled for over two years.

Swiss based Berne Declaration and the BankTrack network recently wrote to UBS on behalf of local community representatives outlining the grave environmental, social and human rights problems associated with the project. As proposed, the Phulbari Coal mine is "open cut" meaning that between 140 and 300m worth of earth will need to be removed to access coal seams deep under ground. Some 50 000 residents will need to be relocated, potentially reaching 200 000 should full scale expansion plans be realised. Extensive damage to the UNESCO declared world heritage site Sundarbans mangrove forest, the largest single block of mangrove forest in the world, is also expected from port facilities. Energy production from coal poses substantial impacts on climate change, and is also inappropriate at a time when Bangladesh is appealing to the rest of the world to curb greenhouse gas emissions.

Despite the project having reportedly cleared by advisors Barclays to satisfy the Equator Principles, development standards which encompass community and social considerations, the undertaking faces immense local opposition. In August 2006, 50 000 people protested outside the local offices of Asia Energy (now GCM Resources Plc). A paramilitary force peppered the crowd with bullets, killing five people, including a fourteen year old boy. Approximately 100 individuals suffered injuries from the shootings. Since then, GCM Resources Plc has fled the site and the Bangladesh government has signed an agreement with the local communities promising that the coal mine would be stopped. In January 2007, Bangladesh declared a state of emergency, and a military backed government was installed. The current ruling party has proceeded to infringe of fundamental rights of countless citizens whilst maintaining relationships with transnational corporations in an attempt to stoke foreign investment and additional income.

Without the developer's presence in the region and fearing reprimand from a heavy handed government, local opponents to the projects have little recourse within their own country or with project sponsors. Responsible financial institutions have been approached with evidence of environmental damage and extensive social harm, and have been asked to respect the human rights of those affected by divesting.

The Berne Declaration and BankTrack have offered to put financial institutions in direct contact with communities in the area.

Responding to questions about on their 11% investment listed in GCM Resources Plc, the second largest listed shareholding, UBS denies any strategic interest in the company. The large multinational communicated that "it does not comment on potential or specific client relations or transactions or its investments in any particular company". UBS vaguely asserts to civil society and the communities affected that its holding may or may not be on behalf of other people.

Andreas Missbach from the Berne Declaration says "responding to victims of actual and potential human rights abuses in this way, UBS has shown complete disregard for its duties to stakeholders, selectively and irresponsibly hiding behind bank secrecy provisions".

The transparency of financial institutions shareholdings is of major consequence to determine who is responsible for facilitating dodgy investments. Determining whether banks themselves are actual shareholders, or whether they are holding shares on behalf of another party, can sometimes be an impossible task for local communities. Banks have been known to take advantage of these vagaries to shun their responsibilities. Whoever are the real shareholders in GCM, by virtue of their involvement in share listings, financial institutions must fulfil their duty to respect the human rights of stakeholders.

Read and download the letter to UBS