Displacing People For Profit: Obama Administration Supports Controversial Coal Project in Bangladesh

Posted by admin on Apr 26th, 2011

By Christine Shearer and Joshua Frank, AlterNet, Apr. 26 2011

While President Obama tours the country raising money for his reelection campaign, we are likely to hear well-crafted speeches that are supportive of clean energy and critical of big polluters. In West Virginia and Wyoming, he will no doubt talk glowingly of so-called “clean-coal” technology. In California, he might speak to solar’s great potential, and in the Midwest, perhaps the whirling future of wind power.

There will probably be little mention, however, of Obama’s rubber-stamping of coal mine leases on public lands, or his continued support for a nuclear power renaissance. He’ll also be unlikely to address how his administration is covertly pushing for an internationally opposed open-pit coal mine operation in Bangladesh.

The massive mine, which was originally proposed in the mid-1990s, has been met with a number of roadblocks along the way, mostly in the form of grassroots outrage. Located in the Phulbari area of northwest Bangladesh, the mine would involuntarily displace anywhere between 40,000 and 200,000 villagers — with 40,000 being the conservative estimate of the company pursuing the mine. The project would also displace indigenous populations who trace their ancestry in the region back 5,000 years.

Opposition to the mine has not always been met with a democratic response. In 2006 during a massive demonstration, three young protesters were shot by the paramilitary Bangladesh Rifles. A leading opponent of the mine, Mr. Nuruzuman, was publicly tortured by the Bangladesh military in February 2007. WikiLeaks recently disclosed a US embassy cable on training Bangladesh anti-terrorism units in Britain on “investigative interviewing techniques.”

The bloody killings were followed by nationwide strikes, and eventually an agreement between the Bangladeshi government and the protestors that Asia Energy, the holder of the development lease, would leave the country.

Five years later, Asia Energy has refused to leave. Instead, the company changed its name to Global Coal Management (also referred to as GCM Resources) and has maintained being “fully committed” to the Phulbari project, despite ongoing opposition from people across Bangladesh. According to GCM’s project plans, the Phulbari coal mine would operate for at least 36 years and extract 16 million tons of coal annually at peak production. Of this, three million tons would be used domestically, including the construction of at least one 500 megawatt coal plant. The remaining coal would be exported. All in all, it would be a large source of new greenhouse gas emissions in an already warming world, as well as a humanitarian disaster for the people of Bangladesh.

“Thousands of families would be immediately removed from the mine site, losing their homes and agricultural lands,” Paula Palmer, director of the Global Response Program for Cultural Survival told journalist Jeff Biggers. “Independent researchers estimate that as many as 220,000 people around the mine site would eventually be affected by reduced access to water, forcing them to abandon their lands. There is no plan for compensating these people for their suffering and loss.”

An environmental assessment of the project by GCM notes that the mine would dig up over 5,100 hectares of land, most of which is fertile farmland. Being one of the world’s most densely populated countries, the loss of productive farmland would be particularly hard felt in Bangladesh, especially for residents who rely on the land for their daily needs. The project would also divert the current flow of the Khari Pul river, and would use explosions to unearth the coal, letting loose toxic coal dust.

Huge pumps would run 24 hours a day for the 30 years of the mining project, pumping hundreds of millions of liters of water a day to prevent the mine from flooding. As a result, groundwater in an area covering about 500 square kilometers would be lowered, drying up wells used by farmers and residents. GCM says some of this water will be injected back into the ground at a distance from the mine, and can be used by residents for irrigation. But digging up coal uncovers heavy metals that can be toxic at certain levels, as well as acid-forming sulphur, posing potential health hazards.

The International Accountability Project notes that another mining operation in Bangladesh — Barapukuria — has destroyed roughly 300 acres of land and reduced available groundwater, impacting about 2,500 people in seven villages. This is due in part to the lack of government regulations over coal mining in Bangladesh.

Finally, the Phulbari project’s transport route would cut through the Sundarbans Reserved Forest (SRF), a United Nations Education, Scientific and Cultural Organization (UNESCO)-protected site that contains over half of Bangladesh’s remaining natural forest, and supports at least 58 rare and threatened species — including the royal Bengal tiger.

Despite the widespread impacts, diplomatic cables revealed by Wikileaks show the Obama administration wants the mine to be built. The July 2009 cable includes comments by US Ambassador to Bangladesh James Moriarty stating that “Asia Energy, the company behind the Phulbari project, has sixty percent US investment.” Moriarty also urged the Bangladesh prime minister’s energy advisor Tawfiq Elahi Chowdhury to authorize coal mining, saying “open-pit mining seemed the best way forward.”

Moriarty stated in the cable that Chowdhury admitted the coal mine was “politically sensitive in the light of the impoverished, historically oppressed tribal community residing on the land,” but that the energy advisor had nevertheless agreed to build support for the project through the parliamentary process. Later on in the cable, Moriarty privately noted: “Asia Energy officials told the Ambassador they were cautiously optimistic that the project would win government approval in the coming months.”

GCM has stated that roughly a third of the revenues generated by the project would go to the Government of Bangladesh in the form of royalties, corporate taxes, customs, and duties. This number is disputed by many people in Bangladesh, who say the figure is inflated and does to take into account the health and environmental costs of the project. Further, GCM’s claim suggests that the other two-thirds of the revenues would be siphoned out of the country.

According to the international organization BankTrack, major shareholders in GCM Resources are Aurora Investment Trust PLC, Christian Leone, Credit Suisse First Boston Equities Ltd, LCG Holdings LLC, Luxor Capital Group and Polo Resources Ltd.

LCG and Luxor Capital Group are owned by Christian Leone, a US citizen and former Goldman Sachs employee who also operates a New York-based hedge fund in his own name. Leone founded Luxor with another former Goldman Sachs employee, Larry Buchalter. According to a March 2011 Morningstar Investment Report, Leone, Luxor, and LCG make up over half of the shareholders of GCM (54%). Luxor Capital includes Luxor Capital Partners Offshore, Ltd., a Cayman Island exempted company.

People in Bangladesh continue opposing the project, with thousands taking to the streets in both February and March of this year to protest GCM and demand that the government of Bangladesh honor its agreement to expel the company from the country. On its Web site, GCM states that it is awaiting approval for the project, which it expects to receive.

In response, the organization Avaaz has created a petition for people to oppose the mine. Meanwhile, over 100 civil society organizations from 31 countries have called on private banks to withdraw their support. Many of these organizations are concerned about the potential for further violence if a vast open pit mine that directly threatens the lands and livelihoods of tens of thousands of people is forcibly moved forward.

As President Obama tours the nation talking about a bright future of clean energy, we wonder: Obama, will you withdraw your support for this disastrous mining project?

Christine Shearer is a researcher for CoalSwarm, part of SourceWatch, and a postdoctoral scholar at the Center for Nanotechnology in Society at UC Santa Barbara. She is managing editor of Conducive, and author of the forthcoming book, “Kivalina: A Climate Change Story” (Haymarket Books, 2011). Joshua Frank is an environmental journalist and author of “Left Out! How Liberals Helped Reelect George W. Bush.” He is co-editor, with Jeffrey St. Clair, of “Red State Rebels: Tales of Grassroots Resistance in the Heartland.” Frank and St. Clair are also the authors of the forthcoming book, “Green Scare: The New War on Environmentalism.” He can be reached at brickburner@gmail.com.

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