Tuesday, February 17, 2009

Energy resources and security: what Bangladesh government needs to do

By SM Shaheedullah* and Anu Muhammad**

NewAge, February 17, 2009

IN THE past, there has been little difference, if any, in the role of the governments, elected or unelected, in the matter of defending the national resources from usurpation by multinational capital. It is imperative that this situation change to ensure national development and energy security but this depends crucially on proper outlook and role of the present elected government with regard to national resources and national institutions. The physical resources of Bangladesh are limited but, given its proper utilisation, there should be no reason why people should suffer poverty, discrimination, malnutrition, unemployment and homelessness. In fact, our resources have become a source of danger of different kinds. Whatever meagre resources Bangladesh has, it is unprotected and lacks the people’s proprietorship over it and proper management. This is particularly true in the case of mineral resources.

The eastern region of the country is rich in gas while the northern region is rich in coal resources. The Bay of Bengal in the south is resourceful in gas, oil and many other minerals. The most prospective gas fields in the eastern region are under the grip and control of multinational companies. Though the maritime region in the Bay of Bengal has immense potential for oil, gas and other mineral resources, the maritime boundary of Bangladesh is still un-demarcated because of gross negligence on the part of past governments. Neither did the immediate-past interim government pay proper attention to the issue. The very sovereignty and national security is under threat as the uncertainty surrounding the maritime boundary persists.

The part of the Bay of Bengal under Bangladesh sovereignty is unprotected. This water body is traversed freely by military and civil officials and agents coming from the United States, India, Myanmar and other countries. There are also suspicious movement of their ships. These are too glaring to escape one’s notice. But for us, this sea also provides means of communication between Bangladesh and different countries. The sea is a field of vast resources, known and unknown, and the maritime area within legal limits under international law and rules and, under the proprietorship of the Bangladesh people, should carry the flag of Bangladesh sovereignty.

In such circumstances the maritime area has been divided into 28 blocks and bidding invited by the preceding interim government on the basis of a model production sharing contract which frustrates the people’s interests. It was a hasty move by the interim government to award contract for these blocks to multinational companies at their behest even before October 2008. Fortunately, the interim government failed to complete its plan because of stiff opposition from the people. However, the conspiracy of the international plunderers continues unabated.

A devastating project in the shape of Phulbari coalmine to guarantee plunder of coal resources in the northern region by a multinational company was pursued many years but this project has been foiled by the life-and-death struggle of the people. This very prospective coalfield was planned to be handed over to Asia Energy (now Global Coal Management), a multinational company. True, this sinister move has been quashed by the people’s resistance but the conspiracy lingers on. We may recall that in the face of the people’s uprising the then government had to enter into the seven-point Phulbari agreement. Notably, in the wake of the uprising Sheikh Hasina, then opposition leader and now prime minister, declared at a public meeting in Phulbari her full support for the Phulbari agreement and called for its immediate implementation. But so far this agreement has not yet been fully implemented. As a result, Asia Energy, which was due to be driven out of the country, has been engaged in nefarious activities involving corruption and crime, home and abroad.

A ceaseless economic haemorrhage of Bangladesh goes on, because of various anti-people contracts and usurpation in gas and electricity sectors. People are being fleeced to the tune of 30 billion takas per year on account of unfair agreements permitting the multinational gas and electricity companies to pocket unlawful bonanza. This amount will go up further if these trends continue. On the other hand, state-owned organisations are languishing for their own government’s deliberate denial of funds and patronage.
 Based on the above facts and factors and global experience, the government, we believe, needs to take the following issues into consideration when formulating energy policies.

Proprietorship and authority

PROPRIETORSHIP of all mineral resources lies with the people, according to the constitution. The governments in the past have violated the constitution and handed over – and, in fact, are still trying to hand over – the people’s property to different multinational companies through secret agreements. This practice must be brought to a halt. One hundred per cent proprietorship of the resources needs to be restored to the people. The contracts made thus far in respect of production sharing of gas, coal and minerals are all against people’s interests and are burdensome on the economy and have proved to be a threat to energy security. Therefore, all the contracts should be made public and reviewed by committees of independent experts. Those contracts which are prejudicial to national interest should be rescinded. Export of gas, coal and any product hereon should be prohibited by law to be enacted for the purpose.

Compensation for losses and penalty for crimes and irregularities

DUE compensation for losses in Magurchhara and Tengratila blow-outs should be realised from US company Chevron and Canadian company Niko. Penalty should be imposed for delay in payment of compensation and evading of payment on fictions or untenable grounds.

Two former prime ministers have been implicated on account of corruption in Niko contract. Similar measures should be taken against Niko. Cairn Energy submitted false and misleading information on the Sangu reservoir and submitted exorbitant statements of cost of production and thereafter revised the figures upwards time and again. Now they have been putting the government under intense pressure in different ways to raise the price of gas. For this reason compensation of lost money and other penal measures should be claimed against Cairn Energy and their local associates. Jalalabad gas field discovered by Bangladesh was handed over to Chevron unlawfully. Yet, recently another adjoining gas field has been given to Chevron. By allowing extraction of gas from Bibiyana well at a high rate exceeding the safe limit Chevron has exposed the gas field to a big risk as in the case of Niko in Sangu. Chevron has caused huge loss to reserve forest and its flora and fauna in Lawachhara, while carrying out seismic survey for gas in the region. Officials of Petrobangla including its chairman were reportedly involved in these unlawful activities. Necessary actions should be taken against them.

Maritime boundary and maritime resources

MARITIME boundary should be demarcated and proprietary rights and authority over the area established on a high priority basis. Separate ministry or directorate for the sea should be established. Model PSC stipulating exports of gas should be scrapped. For generating skill for oil and gas exploration in shallow and deep seas BAPEX should be compulsorily made principals in all joint ventures.

Protection and maximum utilisation of coal resources

ALL irregularities and corruption in the management of coalmine in Barapukuria should be eradicated. In order to arrest land subsidence on account of underground mining all measures including sand filling should be carried out. Losses to homesteads on account of land subsidence and cracks in buildings should be fully properly and urgently compensated. Asia energy should be driven out of the country immediately and the method of open-pit mining should be prohibited all over Bangladesh, in accordance with the August 30, 2006 Phulbari agreement.

National capacity building

IN ORDER to ensure people’s proprietorship of national resources, national institutions need to be fully developed. To this end, BAPEX, Petrobangla, Geological Survey and Bureau of Mineral Development should be adequately developed and the proposed Coal Bangla should be established and made operational immediately. More departments at university level and also research institutes should be established at national level to develop skilled manpower for mineral resources development and their best utilisation. For this purpose, the services of expatriate Bangladeshi experts and foreign experts, if needed, should be utilised.

A national energy policy should be framed with a suitable mix of measures required for ensuring national interest and energy security – both short and long term while conserving environment and public interest through development of renewable and non renewable energy resources. Necessary institutional framework should be built for proper implementation of the policy and its monitoring.


TREATING electrical energy as a mass consumer item, a policy framework should be laid down for establishing power plants in the state sector and supplementary power plants under private sector, owned by Bangladeshi nationals. The country should be unshackled from the current vicious policies, agreements and institutional provisions for purchasing electrical energy at an excessively high rate for the benefit of multinational companies and rendering electricity sector captive to the scheming multinational companies. Strict actions should be taken for corrupt practices of multinational companies and their local associates in the business of production and sale of electrical energy.


MINISTERS, bureaucrats, consultants and industrialists who were involved in the sinister conspiracy of siphoning natural resource in the name of exporting it through plunderous production sharing contracts and other contracts shall be brought to justice and exemplary punishment meted out to them.

Resistance struggle put up by the people of Bangladesh in the last decade against siphoning of gas to India and crippling of the national port in Chittagong and compromising with national sovereignty for the benefit of a private port to be operated and used by a private US company and against the devastating Phulbari coalmine project has won historical victories and are crucially important polarizer of future direction of the Bangladesh nation. The people of Phulbari have erected a permanent wall of collective human spirit against plunder, hegemony and siphoning of coal through sacrifice of lives and limbs. People’s verdict writ in blood declares that Bangladeshi resources must be for Bangladesh to use and utilise. The extraction and utilisation of this resource will be met for generation of electricity and industrialisation solely for the need and benefit of Bangladesh and its people. Needless to say, it is only a bunch of treacherous public enemies who can take a position against the people’s verdict.

*SM Shaheedullah is convener and **Anu Muhammad member-secretary of the National Committee to Protect Oil, Gas, Mineral Resources, Power and Port