Mundra, Gujarat: January 23, 2014
After World Bank, Asian Development Bank to Investigate Tata Mundra:
Finds Prima Facie Evidence of Noncompliance with ADB Policies.
Three months after Compliance Advisor Ombudsman (CAO) – the independent accountability mechanism of World Bank Group’s private sector arm International Finance Corporation (IFC) – published its scathing report on the serious violations of IFC policies in its investment in Coastal Gujarat Power Ltd (CGPL – Tata Mundra), another co-financier of the project, the Asian Development Bank (ADB) decided to investigate the policy violations while financing the 4000 MW coal plant in Mundra, Gujarat.
The Board of Directors of ADB approved the recommendation of its accountability mechanism, the Compliance Review Panel (CRP) for full investigation, as published in its Eligibility Report.
ADB has invested US $450 million in the project. Other investors include IFC, Korean ExIm Bank, PNB Paribas, State Bank of India, HUDCO and India Infrastructure Finance Company Ltd.
In its report, CRP says, “The CRP finds prima facie evidence of noncompliance with ADB policies and procedures, and prima facie evidence that this noncompliance with ADB policies has led to harm or is likely to lead to future harm. Given the evidence of noncompliance… the CRP concludes that the noncompliance is serious enough to warrant a full compliance review.”
Machimar Adhikar Sangharsh Sangathan (MASS – Association for the Struggle for Fishworkers’ Rights) welcomes the investigation. MASS submitted a complaint to CRP in October last year.
Responding to the significant victory of people’s struggle, MASS’ General Secretary Dr. Bharat Patel said, “We welcome the full investigation by CRP. After having received a confirmation of our concerns by CAO, we hope an independent and indepth investigation by CRP will further reconfirm our concerns and actions will be taken on the findings.”
In October last year, CAO published its finding after a year-long process of investigation. CAO found that environmental and social risks and impacts of the project were not considered and addressed; there was no social baseline data; IFC’s policies for land acquisition were not applied despite physical and economic displacement; inadequate attention was paid to the requirement of biodiversity conservation; IFC failed in its review and supervision of the impacts on airshed & marine environment and IFC failed to examine the cumulative impact of projects around Tata Mundra.
Despite such scathing findings, and growing global criticism for IFC’s continued support to Tata Mundra, World Bank President Dr. Jim Kim refuses to take any appropriate action.
In its Eligibility Report, CRP found the following evidence of noncompliance: ADB held insufficient public consultations; the project-affected area is defined erroneously; CGPL discharges water at a higher temperature than is allowed by ADB standards; ADB’s air emission standards are not met; insufficient cumulative impact assessments; flawed social and environmental impact assessments; harmful effects of the cooling system on the environment and the fish harvest; inaccessibility of fishing grounds and effects of coal-dust emissions.
ADB management in its response tried to discredit the complainants, questioned their locus standi and defended its investment and actions of its client.
“This is certainly a move in the right direction,” said Madhuresh Kumar, national organisor of National Alliance of People’s Movements. “At a time when corporations, in collusion with corrupt politicians and supported by financiers both national and international, plunder national resources and are not accountable to anyone, ADB reviewing its policy compliance in Tata Mundra gives hope that people’s concerns will be looked into. We hope appropriate and timely actions will be taken on the findings,” he added.
“We hope the World Bank President will take note of the CRP report. It’s not just his own CAO who have reconfirmed our concerns, but now even CRP has done it. How long can he pretend not to see this growing evidence of noncompliance by Tata Mundra? He should take bold actions in Tata Mundra and walk his talk on climate change,” Dr. Patel said.
Bharat Patel (Gujarat): +91-9426469803
Joe Athialy (New Delhi): +91-9871153775
Rayyan Hassan (Manila): +63-9175117002