Global NGOs unhappy over WB support to Tata's Mundra UMPP

Seek withdrawal of IFC funding from the Tata Power's 4,000 Mw power project in Gujarat

After Indian NGO, as many as 68 civil society groups from 28 countries have condemned the World Bank Group’s continued support for Tata Power's 4000 Mw ultra mega power plant (UMPP) in Mundra, Kutch, despite the Ombudsman for International Finance Corporation (IFC) finding serious lapses by IFC in supervision of the coal-base power project, impacting environment and livelihood of local fishing community there.

The global groups in an open letter to World Bank President Dr Jim Yong Kim, Friday last, have further demand that IFC be held accountable for the lapses by taking appropriate actions to address the findings of the Ombudsman, starting with development of a remedial action plan and the withdrawal of IFC financing from the Tata Power's power project in Mundra.

The action by civil rights groups from across the world comes on the heels of a letter from over 100 civil society groups in India demanding that the World Bank Group’s IFC withdraw funding from the Tata Power's project in Gujarat.

In its audit report for the power project, released last month, the Compliance Advisor Ombudsman (CAO) for the IFC and the Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group, had also held that IFC's review of project's environment and social assessments was not commensurate with project risk as required under its Sustainability Policy.

IFC had refuted the charges levied by CAO and justified its actions and funding to the power project operational under banner of Coastal Gujarat Power Limited (CGPL), a fully owned company of Tata Power.

Commenting on open letter by global civil society groups spokesperson for Tata Group said, "CAO report reflects the observations on the internal processes of IFC & thus it will only be appropriate for IFC to respond. We are yet to read through the report & would discuss with IFC if there were any issues related to CGPL. As per initial information available with CGPL, MASS (the Association for Fish workers' Rights) has certain generic issues concerning the coastline of Gujarat. Mundra UMPP is just about 1% of Kutch coastline & we are more than responsive in our association with the community around our project & we remain committed to working with the community at all times."

"Mundra plant is fully compliant on all environmental and social norms and the same has been endorsed by MOEF and other statutory bodies and is committed to being a 'neighbour of choice'," the spokesperson further added.

In the open letter sent to Kim the global civil society groups have asked, "As concerned World Bank stakeholders and contributing taxpayers to our respective government’s official aid through the Bank, we are disturbed by your clearance of IFC response to the CAO report on the Tata Mundra coal power project. In solidarity with the Indian fishing communities, we demand an explanation why you rejected the CAO findings on IFC’s policy violations in funding the Tata Mundra coal power plant."

"Unless the findings from the World Bank Group’s internal watchdogs, like the CAO and the Inspection Panel, are taken seriously and acted upon, their role is in name only. This decision undermines the mandate of CAO while allowing staff and management to avoid culpability. Civil society around the world demand you hold the IFC accountable by taking hard but appropriate actionsto address the CAO findings, starting with the development of a remedial action plan and the withdrawal of IFC financing from the Tata Mundra coal project," the groups demanded.

In its audit of Tata UMPP, the CAO had found "weaknesses in IFC’s environment and social (E&S) review of CGPL did not support the formation of a robust view as to whether the project could be expected to meet the requirements of the Performance Standards over a reasonable period of time, the threshold question in terms of IFC’s decision to invest."

"Weaknesses in IFC’s E&S review process also meant that required opportunities to consider alternative project designs to avoid or minimize E&S impact were missed," the CAO stated in its findings.

IFC has invested $450 million of its own capital in this project, which it has classified as a category A project, signifying that it believes there are potentially significant adverse social and environmental impacts that may be diverse or irreversible. IFC was also considering investing up to $50 million in equity as part of its exposure to the project and syndicating up to about $300 million in loans

http://www.business-standard.com/article/companies/global-ngos-unhappy-over-wb-support-to-tata-s-mundra-umpp-113111100401_1.html

Top US, European groups oppose World Bank support to Tatas' power project at Mundra, call it "deadly"

Top US, European groups oppose World Bank support to Tatas' power project at Mundra, call it "deadly"

Fishing activity next to Tatas' power plant

By Our Representative

As many as 68 groups from 28 countries across six continents have sent a letter to World Bank President Dr Jim Yong Kim condemning the World Bank Group’s continued support for “a deadly coal project in Gujarat, India”. A statement from Washington by Dan Byrnes of the Sierra Club, which has chapters throughout the United States and Canada that offer opportunities for local involvement, activism and outings, says, “This action comes on the heels of a letter from over 100 groups in India demanding that the World Bank Group’s International Finance Corporation withdraw funding from the project, Tata Power’s 4,000-MW Mundra coal-fired ultra mega power plant (UMPP).

The “open letter” to Dr Kim from civil society groups opposing World Bank, while disagreeing with the rejection of Compliance Advisor Ombudsman (CAO) findings on the Tata Coal Plant, says, “As concerned World Bank stakeholders and contributing taxpayers to our respective government’s official aid through the Bank, we are disturbed by your clearance of International Finance Corporation (IFC) response to the CAO report on the Tata Mundra coal power project.” Significantly, most of the NGOs which signed the letter are from the US and European countries.

The letter says, “In solidarity with the Indian fishing communities, we demand an explanation why you rejected the CAO findings on IFC’s policy violations in funding the Tata Mundra coal power plant. What actions will you take to mitigate the adverse impacts and end your financing of the deadly coal project? Following a complaint from Machimar Adhikar Sangharsh Sangathan (MASS, Association for the Struggle for Fishworkers’ Rights), an organization of fishing families impacted by the IFC financed 4,000 megawatt Tata Mundra UMPP in Kutch, Gujarat, the CAO issued a report showing that the IFC committed serious violations of its mandatory safeguards.”

The letter points out, “The CAO found that ‘IFC weaknesses in reviewing the client’s risk assessment and mitigation did not support the formation of a robust view that the project met the IFC’s policy requirements, that IFC did not consider alternative project design to avoid or minimize impacts, and that IFC has not treated complainants’ concerns as compliance issues.’ However, the IFC rejected the expert findings and issued no remedial action, choosing instead to defend the project decision and client.”

The letter further says, “Even more troubling, despite your work in public health and calls for urgent action to address climate change, your office cleared the response after a month of silence. Your decision means thousands of fishing and fishworker families will continue suffering from air pollution, contaminated water, and destroyed marine resources that CAO found to be directly linked with the construction and operation of the Tata coal plant.”

It adds, “This decision contradicts your decades of public health advocacy and speeches on moving the Bank away from funding fossil fuels. Mr President, you must show that you are serious about your statements at previous WB/IMF annual meetings on climate, accountability and learning from past mistakes. The CAO found massive shortfalls at the IFC, showing that the mechanisms to uncover such issues are working.”

The letter insists, “However, while the Tata Mundra project provided an opportunity to prove your commitment to learning from these failures, your clearance of the IFC response continues the lack of public accountability within the IFC. Unless the findings from the World Bank Group’s internal watchdogs, like the CAO and the Inspection Panel, are taken seriously and acted upon, their role is in name only. This decision undermines the mandate of CAO while allowing staff and management to avoid culpability. Civil society around the world demand you hold the IFC accountable by taking hard but appropriate actions to address the CAO findings, starting with the development of a remedial action plan and the withdrawal of IFC financing from the Tata Mundra coal project.

Among the organizations which have signed the letter include several important NGOs in US such as Sierra Club, Accountability Counsel, Bank Information Center, Center for Biological Diversity, Center for International Environmental Law (CIEL), Earth Day Network, Feminist Task Force, Friends of the Earth US, Inclusive Development International, Institute for Policy Studies, Climate Policy Program, Oil Change International, Pacific Environment and World Team Now. Prominent multinational NGOs which signed the letter are Greenpeace International , Climate Action Network (CAN) Europe, Kyoto2, and NGO Forum on ADB, Asia-Pacific.

From Britain, the NGOs which signed the letter are Bretton Woods Project, Climate and Health Council, Forest Peoples Programme, Indigenous Peoples Links (PIPLinks), the Corner House, and World Development Movement. Then, there were Jubilee and Market Forces from Australia, Carbon Market Watch and Centre national de coopération au développement from Belgium, Les Amis de la Terre from France; Urgewald from Germany, Center for a Sustainable Environment and Society (JACSES) from Japan, BankTrack from the Netherlands, Quercus – Associação Nacional de Conservação da Natureza from Portugal, Earthlife Africa Jhb from South Africa, Taiwan Environmental Protection Union from Taiwan and Re:Common from Italy.

NGOs from several other countries also signed the letter in large numbers. The countries represented include Bangladesh, Sri Lanka, Bosnia and Herzegovina, Tanzania, Kosovo, Ghana, Nepal, Colombia, Indonesia, Tanzania, Mongolia, Thailand, Ukraine and Vietnam, among others.

http://sierraclub.typepad.com/compass/2013/11/grassroots-activists-across-the-globe-condemn-world-bank-presidents-continued-support-of-tata-mundra.html

http://tcktcktck.org/2013/11/groups-tell-world-bank-dont-finance-tata-coal-india/58671

http://www.rtcc.org/2013/11/08/world-bank-chief-condemned-for-backing-4000mw-india-coal-plant/#sthash.cRmYYG0L.uxfs

http://www.livemint.com/Companies/ryVntvnGNF6JCgtVFkwWpM/Tata-Power-seeks-to-add-1600MW-at-Mundra-plant.html

http://www.theecologist.org/News/news_analysis/2150198/world_banks_support_of_tata_mundra_coal_plant_condemned.html

http://napm-india.org/content/over-hundred-organisations-demand-world-bank-withdrawal-tata-mundra

http://www.dnaindia.com/money/interview-it-s-a-shame-that-situation-now-is-not-conducive-to-investment-anil-sardana-1911969

http://www.downtoearth.org.in/content/ifc-erred-funding-tata-mundra-power-project-says-its-compliance-advisor-ombudsman#.Um5S7wwCeKE.twitter

MachimarAdhikarSangharshSangathan

Mundra, Kutch, Gujarat

Press Statement |October 24, 2013

World Bank President Dr. Kim shies away from taking action despite investigations find social & environmental violations at Tata Mundra

The recourse mechanism of International Finance Corporation (IFC), the Compliance Advisor Ombudsman (CAO) in its report released yesterday found serious social and environmental policy non-compliance by IFC and Coastal Gujarat Power Limited (CGPL), the promoters of Tata Mundra Ultra Mega Power Project in Kutch, Gujarat. Despite the significant findings, the World Bank Group President, Dr. Jim Kim shied from taking any actions to check or minimise the negative impacts on the people and environment.

Stopping short of calling for IFC’s withdrawal from financing Tata Mundra project, the CAO said in its report, “…IFC’s Environment & Social review of CGPL did not support the formation of a robust view as to whether the project could be expected to meet the requirements of the Performance Standards over a reasonable period of time, the threshold question in terms of IFC’s decision to invest.”

MachimarAdhikarSangharshSangathan (MASS) welcomes the report and its findings.  MASS is the local organisation of fishworkers affected by power projects including Tata Mundra, Adani, OPG power projects, Mundra port and Special Economic Zone.

“The findings reiterate and reconfirmthe concerns raised by the communities since long,” Bharat Patel, General Secretary of MASS said. “The findings, based on scientific studies, are indeed a shot in the arm for the people struggling to protect the livelihoods of thousands of fisherfolk in Kutch coast.”

MASS had lodged the complaint with CAO in June 2011.

Key Findings

·         The Complainants, who are from a religious minority and occupy a socially marginal position given their migrant traditions, were not adequately considered as the (Environmental and Social) E&S risks and impacts of the project were considered and addressed.

·         There is no social baseline data in relation to the fisher people who reside seasonally in the fishing villages. In the absence of a baseline data IFC was not in a position to ensure the proper application of IFC’s policies related to land acquisition, despite indications that households living on the bundershave been displaced by the project (both physically and economically).

·         IFC failed to ensure that its client’s (Tata) E&S assessments adequately considered the risks and impacts of the project on these fisher people.

·         IFC paid inadequate attention to the requirementof biodiversity conservation.

·         Serious lapses in IFC’s review and supervision of the impacts of the project on the airshed and marine environment.

·         IFC has not ensured that its client correctly applied the World Bank’s Thermal Power: Guidelines (1998) in that the project airshed has notbeen defined as a degraded airshed—a classification that brings with it a requirement that there will be no net increase in the total emissions of particulates or sulphur dioxide within the airshed.

·         IFC’s process of E&S review was not appropriate to the nature and scale of the project or commensurate to risk as required by the Sustainability Policy (of IFC).

·         IFC has not assured itself that the plant’s seawater cooling system will comply with applicable IFC Environmental, Health and Safety (EHS) Guidelines.

·         IFC’s E&S review paid inadequate attention to ensuring that the project’s risks and impacts were “analyzed in the context of [its] area of influence,” as required by Performance Standard 1 (of IFC), including “areas potentially impacted by cumulative impacts…from project-related developments that are realistically defined at the time the E&S assessment is undertaken.”

·         IFC should have advised its client that third-party E&S risk emerging from the project’s proximity and relationship with Mundra Port and Special Economic Zone needed to be better assessed, with mitigation measures developed.

 IFC’s response& conflict of interest

 IFC put its credibility at risk, by rebutting all the findings of CAO and going out of the way to defend its client, CGPL and its parent company, Tata. IFC’s response to the CAO findings smacks of arrogance, refusal to learn lessons and disregard to people and their rights.

 The fact that the company has commissioned Bombay Natural History Society (BNHS) to undertake biodiversity mapping of the zone to be impacted by the thermal plume, that BNHS corroborated the findings of Marine Environment Impact Assessment (which was questioned by CAO) and engaged BNHS to carry out turtle monitoring program is used in IFC’s management response to discredit the CAO findings and to support the company. However, BNHS is a partner of Tata Power, the parent company of CGPL, according to their annual report 2009-2010. The current president of BNHSMr.HomiKhusrokhan is a former Managing Director of Tata companies. Despite having such an umbilical cord between the two, how can BNHS findings be independent and impartial is anybody’s guess. IFC hoodwinks the public on the conflict of interest.

 President Kim shies away from walking the talk

 Despite alarming findings by CAO, President Kim did not acknowledge even one of the findings and supported blindly the IFC management response, making himself and IFC complicit to the violations at Tata Mundra.

 By clearing IFC response, the message President Kim is sending is that he supports his staff’s denial of science, of expert findings and endorses management’s avoidance of accountability. People in and out of the institution will see this move a form of hypocrisy. He endorses management’s response that the coal plant does not cause public health concerns (when it’s been high in the President’s past and present advocacy). It then contradicts the President’s energy directions paper and pronouncements on moving the institution from coal financing. His tall talk on climate change is proving to be a charade.

 Undermining the mandate of CAO

 After considering the CAO findings and IFC management response for 5 weeks, by not recognising even one finding of CAO, Dr. Kim sends a strong and damaging signal that Bank’s internal watchdogs like CAO and Inspection Panel are more for namesake and that despite their findings its business as usual for the Bank.

 “We wonder why an institution like CAO exists if their findings are not given any value and no action is taken upon it,” said SoumyaDutta, coordinator of the Independent Fact Finding Team whose report Real Cost of Powerdocumented the violations of the company in June 2012. “If President Kim is serious about the accountability that he talks about, and about learning from the Bank’s mistakes to prevent them from occurring again, he should not hesitate to take bold decisions based on the findings.”

 Communities demand the World Bank President stop pretending that he can take people for a ride and take bold actions based on the CAO findings. “Now that World Bank’s own investigations found such serious lapses, it is time for the Bank to sit up and take appropriate and immediate actions. We will not agree on anything short of IFC withdrawing financing from the project,” Bharat Patel said.

CAO Audit Report:http://www.cao-ombudsman.org/cases/document-links/documents/TermsofReference_CGPLAudit_October242012.pdf

IFC Response to CAO Audit report:  http://www.cao-ombudsman.org/cases/document-links/documents/IFCresponsetoCAOAudit-CoastalGujaratPowerLimited.pdf

http://www.business-standard.com/article/companies/ngos-demand-world-bank-withdrawal-from-tata-s-mundra-umpp-113110400736_1.html

CAO Dispute Resolution Process on Tata Mundra Coal Project a Failure

Assessment Report does not understand the complex issues and is unfairly protective of the company

Disappointing. This is how we, members of the Machimar Adhikar Sangharsh Sangathan (MASS – Association for the Struggle for Fishworkers’ Rights) see the assessment report of the Compliance Advisor Ombudsman (CAO) on our case against Tata Mundra coal power project. One, CAO fails to understand the deep-seated issues we raised in our complaint. Two, its Ombudsman goes out of the way to justify the company for its omissions and violations.

An assessment begun in August 2011, the report projects, us, the complainants as adamant and unreasonable; that we are not prepared to enter into a collaborative process of dispute resolution. For us, this finding indicates that CAO has fallen into the sweet talk and PR of the company, whose track record in many other projects in the country is notoriously dismal.

The report cites CAO’s view that a collaborative process may have been helpful in this case to address many of the concerns. Had we engaged in an open dialogue, CAO reports, the company could have enhanced benefits such as provision of health and schooling services for fishing communities. This is a very myopic view and a simplistic solution to the complex problems the company has brought to us. The report is also profoundly silent about the violations we have raised in the complaint.

We had pointed out in our complaint the absence of cumulative impact assessment; IFC and its client’s failure to recognize fishing communities as affected population; and the absence of environmental clearance for in-take channel, conveyer belt, port and railway line (all being shared with the adjacent Adani project), and for the open cooling system. CAO purposefully ignored to mention these issues in its report. We do not think CAO fully understands the issues we brought to their attention.

In the report, CAO has not failed to mention that some fishworkers are satisfied with what the company has compensated them, without remembering that the complaint was from the aggrieved communities and not the other. We believe CAO should have covered in its assessment the other adversely impacted people, like the farmers, shepherds/ cattle herders, whose lands have been usurped for the project and the other externality costs.

CAO’s utter failure to accurately assess the broad concerns in our complaint and to ensure a conducive mediation process is disappointing. We hope that the compliance process will be more prudent, objective and forthright in looking at the issues that we have raised, particularly in the context of the poor assessment report, the long-term harms this project has created, and the multiple policy violations.

Hard decisions must be taken to save threatened communities and the marine and land resources from the long-term havocs of the coal power plant. There must be a full audit, not just a desk-based review from distant experts, and ToR for the audit must be disclosed.

**********

Additional information

In June 2011 Machimar Adhikar Sangharsh Sangathan (MASS – Association for the Struggle for Fishworkers’ Rights) sent a complaint to the Compliance Advisor Ombudsman, the recourse mechanism at the International Finance Corporation, of the World Bank Group. The complaint now moves to the compliance arm of the CAO, after the Ombudsman has submitted the assessment report.

The complaint emerged to hold IFC accountable for co-financing the 4,000 MW coal-based Tata Ultra Mega Power Plant. Lodged by fishing and farming villagers, the complaint claims that due to flawed design and execution, including breaches of mandatory client obligations, the mammoth coal-fired power plant is contributing to the destruction livelihood of thousands of families and will cause irreparable damage to their fragile marine resources and agriculture.

With a total project cost of US$ 4.14 billion, the IFC is investing a $450 million loan and $50 million in equity. Other financial institutions funding the project are the Export-Import Bank of Korea, Asian Development Bank, India Infrastructure Finance Co. Ltd., Housing and Urban Development Corporation Ltd., Oriental Bank of Commerce, Vijaya Bank, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Travancore, the State Bank of Indore and other local banks.

As the plant is located in the special economic zone (SEZ) that cuts across fishing grounds, habitat of diverse marine lives and wide expanse of farm land, complainants state that the project’s social impact assessment is significantly flawed. Fishing communities were excluded from the list of those directly impacted; the major damage and potential loss of their livelihood was deliberately overlooked.

On the economic side, the recent Indonesian government’s revision of its coal export pricing structure effectively doubled prices. This revision has immediate and severe impacts on the Tata Mundra plant. Tata Power Managing Director has said that it could become a “non-performing asset” and began actively lobbying the Indian government for a tariff revision as well as a diplomatic push to get the Indonesian government to revise its pricing structure. Whatever happens on the tariff front, if all costs are taken into account, including the huge social and environmental costs, we believe that the project can never be economically viable.

http://www.indianexpress.com/news/world-bank-arm-to-relook-at-its-investment-in-tata-powers-project-in-kutch/912351/0

http://counterview.org/2012/02/15/fishermens-problem-along-mundra-coast-stems-from-wider-issues-of-industrialization-world-bank/