[The weekly commentary and analysis of the Asian Centre for Human Rights (ACHR) on human rights and governance issues]

Embargoed for: 6 September2006
Review: 131/06

Energy Kills: Phulbari coal mine project of Bangladesh

“Coal under the ground is worth more than growing rice on the surface” - Gary Lye, chief executive, Asia Energy [1]

On 26 August 2006, five persons identified as Tariqul Islam (24), Ahsan Habib (35), Osman (24), Raju (8) and Chunnu were killed and about 50 others were reportedly injured after the police and the Bangladesh Rifles personnel opened fire on those who were protesting against UK-based Asia Energy Corporation's proposed open pit coalmine project at Phulbari in Dinajpur district of Bangladesh. Several eye-witnesses stated that Bangladesh Rifles personnel threatened Magistrate Abdul Aziz at gunpoint to sign the paper empowering the security forces to open fire at the crowd. [2] But neither the government nor the Asia Energy Corporation is ready to accept responsibility for the cold blooded murder of the civilians. 

The opposition including the Awami League called a bandh to protest against the killings . On 27 August 2006, the Bangladesh Home Ministry ordered an inquiry into the firing. On 31 August 2006, Junior Minister for food and relief, Asadul Habib Dulu stated that the government has cancelled all existing agreements with Asia Energy and declared a moratorium on open-pit mining in Bangladesh. On the same day, Asia Energy Corporation clarified that “The Company had not received any communication from the Government to this effect. …. The Company is seeking to clarify the reported remarks of that minister and  to determine the Government's position towards the Phulbari Project.” 

Since then, both the government of Bangladesh and Asia Energy have been maintaining studied silence as to status of the Phulbari project.

The Phulbari project:  

Coal was first discovered at Phulbari during surveying and drilling between 1994 -1997 by the Australian mining company BHP, which entered into licensing and investment agreements with the Government of Bangladesh. These agreements were assigned to Asia Energy Corporation (Bangladesh) Pvt Ltd in 1998. The project is estimated to generate more than US$ 21 billion in economic benefits to Bangladesh over its 30 year life and add one per cent to Gross Domestic Product (GDP). The increase in GDP is supported by none other than Asian Development Bank. [3]

Asia Energy also estimates that Phulbari reserve has 572 million tonnes of high quality coal located at varying depths between 140 metres and 300 metres. The company targets annual production of 15 million tones of coal for 30 years.  

All the successive governments in Bangladesh dealt with Asia Energy on the Phulbari project. On 11 September 2005, the Department of Environment of the Government of Bangladesh appoved the Asia Energy's Environmental Impact Assessment  report and granted Environmental Clearance for mining. In less than a month on 2 October 2005, the 600 page “Feasibility Study and Scheme of Development for the Phulbari Coal Project” was submitted to the Government of Bangladesh.  According to Asia Energy “The contract stipulates that the Government of Bangladesh has three months in which to approve the Project.” 

However, due to the controversies, the project could not be approved. In May 2006, Asia Energy awarded a contract of US$ 50 million water management programme at its Phulbari coal mine to a Bangladeshi company, Falgu Sandhani, signalling its readiness to start full operation from 2008. The protest against the project began in earnest and finally culminated into the killings of five protestors on 26 August 2006. 

Disputes about the number of project affected persons: 

According to National Committee to Protect Oil, Gas, Mineral Resources, Electricity and Port, about 4,70,000 people, including 50,000 indigenous peoples belonging to Santhal, Munda and Mahali tribes, of 100 villages in Phulbari, Nababganj, Birampur and Parbatipur upzilas will be potential victims of the project. Besides houses and government offices, the project will uproot fifty educational institutions, including six colleges and 18 madrasas and 171 mosques, 13 temples and other religious establishments in Phulbari and its adjacent areas. [4]  

But AEC claims that only approximately 40,000 persons, including 2,500 indigenous people will be affected by the project. [5]  

The discrepancy about the number of persons to be affected is palpable.  

Compensation package under Burqa: 

“Asia Energy intends to request specially drafted legislation to be enacted in a relatively short period of time (emphasis ours) to enable land acquisition and for payment of compensation. It is intended to acquire land (privately and through GOB legislation) and make appropriate compensation in one process.” – states Asia Energy in the executive summary of its 600 page report “Feasibility Study and Scheme of Development for the Phulbari Coal Project”. 

In Bangladesh, land is acquired by the government under the Land Acquisition Act of 1894, which has been held as a draconian instruments. Obviously, Asia Energey does not even want the land to be acquired under the Land Acquisition Act of 1894. Therefore, it demands adoption of special laws. There is no concept of free, prior and informed consent of the project affected persons. The victims are not being given any right but being asked to accept unknown package of compensation. It has been alleged that Asia Energy Corporation has been carrying out an appeasement policy to garner support for its project by distributing colour television, cash, cloths and blankets among the locals. [6]  

Asia Energy claims that “A Resettlement Plan and an Indigenous People's Development Plan, incorporating the findings and recommendations of the Enviromental Impact Assessment and Environmental and Social Impact Assessment, were prepared in June 2006 in accordance with international best practice, including the Equator Principles and World Bank and Asian Development Bank (ADB) guidelines.” 

Asia Energy also claims that “Everybody affected will receive fair compensation and they are being consulted on their preferences. The compensation will ensure that those affected are at least as well off after the move. People directly and indirectly impacted by the mine will be looked after in accordance with national and international standards, above all the Equator Principles.” 

The question is whether compensation “at prevailing market rates” is adequate when the victims do not want to sell their lands. It also refers to a resettlement plan which  “will include provision of sustainable alternative means of livelihood” in the new villages and new town. However, the entire rehabilitation package has been kept under the Burqa, veil . What kind of alternate means of livelihood are proposed to be created for taking away 5,933 hectares of fertile agricultural lands has not been spelt out.  

Phulbari: a reflection of what ails extractive industries 

Across the world the extractive industries – oil, gas and mining have been responsible for gross violations of human rights and fundamental freedoms. The Special Representative of the United Nations Secretary-General on the issue of human rights and transnational corporations and other business enterprises in his latest report (E/CN.4/2006/97) of 22 February 2006 states that out of the 65 instances recently reported by NGOs - the extractive sector - oil, gas and mining - utterly dominates the reported abuses with two thirds of the total. “The extractive industries also account for most allegations of the worst abuses, up to and including complicity in crimes against humanity. These are typically for acts committed by public and private security forces protecting company assets and property; large-scale corruption; violations of labour rights; and a broad array of abuses in relation to local communities, especially indigenous people.” 

There is no international law to address corporate complicity in human rights violations. At national level, all governments across the spectrum are protective about their national companies. As the UN Secretary General's Special Representative states, “Much of the relevant jurisprudence to date has come from United States of America's Alien Tort Claims Act (ATCA) cases, which in turn has drawn on evolving international standards of individual criminal liability for such offences”. Out of the 36 ATCA cases decided so far involving companies, 20 have been dismissed, 3 settled and none decided in favour of the plaintiffs; the rest are ongoing. The ATCA's influence has been mainly existential: the mere fact of providing the possibility of a remedy. 

It is unlikely that the Phulbari project will be given clearance in the light of the forthcoming general elections slated for March 2007. Even if th project is cancelled, it is essential that the judicial inquiry commission identifies the guilty police and Bangladesh Rifles personnel for the violation of the right to life and do justice with the victims.

[1] . BBC, 12 July 2006,

[2] . Magistrate forced to give firing order, say witnesses, The Daily Star, Bangladesh, 30 August 2006  

[3] . Phulbari coalmine to boost GDP by 0.7-1.0pc a year, says ADB, Financial Times, Bangladesh, 20 August 2006

[4] . Rehabilitation issue makes it a tough task, The Daily Star, 29 August 2006

[5] .

[6] . Cancellation of Phulbari Coal Project demanded, The Daily Star, 24 August 2006

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