MAC: Mines and Communities

Rampal power plant - condemned by Norwegian Ethics Council

Published by MAC on 2018-03-21

Norway's Council on Ethics advises the Government Pension Fund Global on its investments, making recommendations that  a company's be excluded from its portfolio, and/or is  closely observed in its performance.

Since 2007, the Council has published sufficient evidence to convince the Pension Fund (the world's largest of it kind) to disinvest from several major global mining companies, including Vedanta, Barrick Gold and Rio Tinto.

In its latest annual report, released last week, it makes just one recommendation to exclude a mining/mining-related enterprise - and the Pension Fund has duly done so.

That company is BHEL, partnered with NTPC - two Indian state-owned enterprises wanting to construct the huge Rampal coal-fired power plant in the Sunderbans wetlands that stretch between southern coastal Bangladesh and India. (See also: Bangladesh: police fire tear gas, rubber bullets against Sunderbans protesters ).

Summaries of recommendations published since the previous annual report

Council on Ethics report

Norway

9 March 2018

Bharat Heavy Electricals Ltd.

Case submitted 8 December 2016

The Council on Ethics recommends the exclusion of Bharat Heavy Electricals Ltd. (BHEL) from the Government Pension Fund Global (GPFG) due to the unacceptable risk of the company being responsible for severe environmental damage through its operations in Khulna, Bangladesh.

BHEL has been awarded a contract to build a large coal-fired power plant in southern Bangladesh. The power plant is to be built close to the boundary of the Sundarbans national conservation area, the world’s largest mangrove forest. The entire area is also a Ramsar area. It is rich in biodiversity and contains several protected species, including Bengal tigers and river dolphins.

The conservation area also encompasses two world heritage sites in Bangladesh, as well as a further world heritage site on the Indian side of the  border.

Two factors mean that the project carries a substantial risk of environmental damage. Transport to the power plant during the construction phase will mainly be by boat through the Sundarbans. The sailing route to the anchorage site passes very close to the boundary of a world heritage site.

Transhipment and transport operations will raise the risk of mishaps and accidents involving emissions/discharges very close to vulnerable areas, and this risk is a direct consequence of the power plant and its location.

Another risk is linked to the fact that huge river-bed and seabed areas will be dredged. When large volumes are removed from the riverbed or  dumped, the volume of particles transported by the currents increases substantially.

There is a great risk that this activity may place further strain on the already endangered mangrove forest and life in the river and appurtenant marine areas, which are also important to the local population.

At the same time, the river-bed conditions will change in protected areas for endangered river dolphins.

The Council on Ethics initially contacted BHEL on 19 May 2016. The company did not reply to the Council’s inquiries initially, but has later submitted comments to a draft recommendation.

The company states in the comments that there is no need to dredge the waterways.

The Council considers it highly unlikely that a coal-fired power plant can be built at this location without the construction work itself constituting a high risk of severe environmental damage, even if extensive new measures are implemented.

In the present case, the company has also failed to sufficiently assess what needs to be done to protect the environment.

Further, various transportation factors have not been addressed and handled satisfactorily. Overall, this indicates a significantly increased risk of unnwanted incidents in a unique, highly vulnerable area. The Council has also given considerable weight to the strong concern expressed by UNESCO regarding the risks associated with the project and the fact that the IFC recommendations for such situations have not been observed.

The Council on Ethics recommends the exclusion of Bharat Heavy Electricals Ltd. (BHEL) from the Government Pension Fund Global (GPFG) due to the unacceptable risk of the company being responsible for severe environmental damage through its operations in Khulna, Bangladesh.

BHEL has been awarded a contract to build a large coal-fired power plant in southern Bangladesh. The power plant is to be built close to the boundary of the Sundarbans national conservation area, the world’s largest mangrove forest.

The entire area is also a Ramsar area. It is rich in biodiversity and contains several protected species, including Bengal tigers and river dolphins. The conservation area also encompasses two world heritage sites in Bangladesh, as well as a further world heritage site on the Indian side of the border.

Two factors mean that the project carries a substantial risk of environmental risk.

Transport to the power plant during the construction phase will mainly be by boat through the Sundarbans. The sailing route to the anchorage site passes very close to the boundary of a world heritage site. Transhipment and transport operations will raise the risk of mishaps and accidents involving emissions/discharges very close to vulnerable areas, and this risk is a direct consequence of the power plant and its location.

Another risk is linked to the fact that huge river-bed and seabed areas will be dredged. When large volumes are removed from the riverbed or dumped, the volume of particles transported by the currents increases substantially.

There is a great risk that this activity may place further strain on the already endangered mangrove forest and life in the river and appurtenant marine areas, which are also important to the local population. At the same time, the river-bed conditions will change in protected areas for endangered river dolphins.

The Council on Ethics initially contacted BHEL on 19 May 2016. The company did not reply to the Council’s inquiries initially, but has later submitted comments to a draft recommendation. The company states in the comments that there is no need to dredge the waterways.

The Council considers it highly unlikely that a coal-fired power plant can be built at this location without the construction work itself constituting a high risk of severe environmental damage, even if extensive new measures are implemented.

In the present case, the company has also failed to sufficiently assess what needs to be done to protect the environment. Further, various transportation factors have not been addressed and handled satisfactorily.

Overall, this indicates a significantly increased risk of unwanted incidents in a unique, highly vulnerable area. The Council has also given considerable weight to the strong concern expressed by UNESCO regarding the risks associated with the project and the fact that the IFC recommendations for such situations have not been followed.

UNESCO has reviewed the project again in 2016 and calls for its cancellation or relocation.





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