Saturday, September 02, 2006

What if People Power is not right?

Are we throwing the baby out with the bath water?

A junior minister of the BNP government and the Rajshahi mayor in their infinite wisdom has decided what will be Bangladesh’s FDI and Coal Policy. They have as well given the mass uprising that had been instigated with false and misleading information by the leftist anti-investment (and business) “intellectuals”, official endorsement.

Zafar Sobhan in his post-editorial piece in yesterday’s Daily Star [] made the wisest argument I’ve heard in a long time. He is so right. Asia Energy deal might be suspect and we should examine it but does it mean we let this guide our national policy? At this end we are overlooking the benefits accruing to the nation. A project of this magnitude does not only have direct benefits but also through a multiplier effect have ripple effects across the economy.

Few simple examples: say to transport the coal to its markets the rail and port networks have to develop. Can you imagine what benefits it would give North Bengal? And what about the hundreds of people employed in the area to support those who have been employed by AEC. Shopkeepers and teacher; policemen and rickshaw pullers; cleaners and security gaurds – the list goes on. And think of the ancillary industries that could be developed using coal as raw material. Project of this nature would have made Dinajpur prosperous and the nation with it.

We should examine what are the arguments put up against AEC’s project:

1. Open Pit vs. Deep Shaft Mining: the big debate stems around the choice of mining methods. The productivity of the Open Pit mining (upto 90% as opposed to 20%) itself should have been sufficient an argument. But added to that there are other benefits of this method. For example Shaft mining are notoriously hazardous to human health. Fire, cave-ins, gas leak all lead to quite a few disasters each year across the world. Our Barapukaria mines itself is no exception. Another thing to note is that the coal basin in the area is quite deep underground. I believe more than 400 meters down. This makes shaft mining quite unproductive and unmanageable.

2. Ground Water Management: Experts have rightly pointed out that there is a major issue with ground water system. Apparently the deposit is under an underground aquifer. So to extract the coal all the water has to be pumped out. This creates two problems. Firstly the question of what to do with the excess water that comes up and secondly the general water level of the area might go down. Both these issues need to be managed. Despite what some people are saying, the water will not be just pumped out into the open. Creating an artificial lake and re-using the water in the mining process can be a solution. Why, an irrigation system for the entire North Bengal itself can be developed. There are examples in South India where Chennai’s water supply comes from mines hundreds of miles away. We could solve the water crisis that has hit Dhaka through this method.

3. Environmental Management: The idea of sooth falling all over the area and creating black skies are as old as the demise of the British Mining Industry. New environmental systems can easily mitigate such issues. Coal unlike in shaft mining is actually dug up by giant excavators and human exposure to it is minimum. Of course a proper environmental management procedure needs to be in place. I understand that the newer open pit quarries are not only up to Kyoto prescribed emission levels but can actually earn tradable credits.

4. Displacement of people: A side effect of this project will be the displacement of people. Now be it 40,000 (as AEC claims) or 100,000 (as Anu Mohammed does) there will be a lot of people loosing their ancestral land. This is not a new thing. Building of any large infrastructure project will result in this. Say for example the new Expressway between Dhaka and Chittagong that is being talked about; do you think this will only be on land currently owned by the Government? However proper compensation for this loss needs to happen. This is not only market price of the land being paid, but also finding long term earning potential of those displaced. Jobs that will be created should of course go to those displaced first.

5. Vast Areas that are required: I’ve heard a few arguments of how the national mining policies have guidelines of how much land a mine should or can use. One needs to re-examine this. Is it not common sense that we should utilise the maximum amount of land so that we have the maximum return? Also the non-coal earth that will be dug out needs to be stored in proper manner so that after all the coal has been brought out the area can be re-filled and re-claimed to be used as farm land.

6. Royalty Earning: there is a lot of confusion regarding this one. 20% vs. 6% the argument goes. Well for one the National Coal Policy has not been agreed upon as yet. We need to ensure that Bangladesh benefits to the most degree possible. If this means 20% or more – so be it. We should not let this negotiation be done on anyone’s terms but ours. But does it mean that we will not have a new coal mining policy? No. All stakeholders need to buy in.

7. Export of Coal: As in the case of Natural gas, we are rightly very possessive about what happens to our limited resources. Some argument has been tabled that most large coal producing countries do not export their coal. That is because of their domestic demands. Energy hungry countries like China need all that they can dig up. I agree that we need to find enough value addition that we can do to the product in our economy. We need to diversify our energy basket and take the pressure of producing electricity from natural gas (that having other use) to coal (which in this case has a very rich calorific content). This means that if we can create a substantial domestic market at prices that will allow AEC to offset production costs and earn a reasonable profit, there is no reason why we should not limit (or stop) the amount of coal that they can export.

8. Debate: This argument is my favourite. I hear everyone say that the deal should not be “against national interest”. Of course! Is that not a given? I am being na├»ve here. Given Bangladesh’s history, this has not always been the case. So yes a national debate should happen. And the deal needs to be transparent. But how can this happen? The Government and the Opposition (our elected representative- who have been given the mandate by us to decide this matter amongst other things) should ideally be discussing it in the Jatiya Sangsad. But you and I both know that except for getting duty free cars that body is not good for much! So where can this debate happen? Currently via proxy in the media this is being conducted. While the scrutiny by our journalist friends have ensured we don’t get a raw deal, it is not a very conducive or conclusive manner of debate. And running street battles in Phulbari is certainly not the way to go about the issue. Brings me back to square one – debate must happen, but where? Answer to this one I don’t know.

At the end of a week of agitation, the Coal, Natural Gas, Port Protection Committee is claiming “people’s victory” and celebrations are in the streets of Phulbari and our TV screens. But is it a victory for anyone and everyone? I believe, in the long run, it certainly is not for Bangladesh. We have put in doubt (if not back by half a decade) the much-needed foray into coal mining. A long shadow has been cast on our exemplary record when it comes to sovereign dealings. Further FDI in areas of infrastructure and basic industry development has taken a few leaps back.

And scariest thing of all we have given the people idea that by being able to create a false fervor we can achieve almost anything. So when we give into students protesting and demanding that examination dates be postponed so that they can watch football; when we give into employees and run loss making airline; when we give into agitating typists and ensure the growth of bureaucracy; we also give out a signal that the loudest (and not always the brightest) is mightiest! Unfortunately there are times when people do get it wrong.


Fugstar said...

the coal is there for a while i guess. waiting for the next foolish group to squander it.

one point id like to make, is that being uprooted from your home, from your network of spatial relationships and the area you know well... thats really tough thing to go through. I know it might not enter into your economic caluculus, but i sympathise with them.

I am on feild research looking into hoe communities a re displaced by river erosion in Bangladesh.

why should poor and powerless folks have to pay the price for 'development, which doesnt work anyway.

the twenty billion pound figure that it touted about the place must be scrutinised and evaluated along with social questions like:

our garments industry could swamp that figure annually in the near future?

why dont we become less corrupt?

why arent we exploiting our gas better at the micro scale?

i like your write up bro, dont get me wrong, it was sober.

Nazim Farhan Choudhury said...

You ask very pertinent questions.

Of course people will be displaced. But that does not mean we will just confiscate their land and let them fend for themselves! Any business wanting a long-term profitability will need to address the issues the current tenants of the land has. And following points must be done:

1. A fair compensation will need to be paid for their land
2. New area for rehabilitation needs to be found
3. Employment opportunity for those displaced need to be created
4. They need to be made partners of progress with the business being set up. Eg why not give Phulbari Coal Mine displaced peoples association, say 2% of equity in the company?
5. Care need to be taken to mitigate the impact in the local environment. (There are very good examples and precedence on how this can be done.)

See there is a difference between being made displaced through managed and un-managed process. The study that you are doing about displacement because of river erosion must prove me right. In that case the people displaced do not have any benefits accruing to them economically and are left to their own devices. The displacement in this case will be more akin to those migrating looking for jobs. Of course leaving your village to move to new areas or countries is a difficult process to adjust to, but doesn’t the prospect of earning a decent living draw lakhs of people to big cities or migrate to Canada, Mid-East or Malaysia?

Diganta said...

Very good and informative article, thanks.

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Anonymous said...

The coal is not there for a while. India will be mining the coal out from below.

Nazim Farhan Choudhury said...

our obsession with Indian conspiricy theory will be our downfall.

We have coal. Ofcourse limited in supply. We will need to extract it to give benefit to the nation. Build our economy in a manner that when it is exhausted we have diversified to other forms of earnings.

What India wants or does not, should not and does not matter for Bangladesh. We need to take the coal out for our benefit in our terms!

Shallow-Waters Pirate said...

Well, since when had coal entered into our economic calculation? And what have we been doing all these years? Have we trained substantial amount of hands and brains to get the slightest grip on the extraction technology? Or have we just kept sitting on our arse, smug like anything, that some AEC BEC CEC will come and shove anything down our consenting throat?

I second almost every point you have raised. Of course coal could drive more of our prime movers, but the thing is, would AEC agree with the points you've raised? I mean, out of the blue, we didn't have any clue, and they went through! To me, it's the furtive manner of the deal that was fought against. I'm pretty sure that we would be digging up that coal with the sweet promises you have suggested. But with AEC, it would have sounded like a bad lullaby. One should seem reliable, as well as being reliable.

Another thing is, we couldn't prove ourselves adept enough in negociations to settle out the compensations for the tragic accidents in Magurchhora and Tengratila, where not only the burnt gas incurred a LOT of money, but also the loss for the environmental impact would have cost a fortune. As far as I'm concerned, we couldn't force them to compensate. With that sort of authority, how do you expect us to keep a tough muzzle on the environment protection schemes a coal mine has to manage? You, as a concerned and learned perso, must be aware of the fact that coals contain not only high calorific values, but also sulphur, which might cause acidic drainage due to rainfall, and managing the surrounding water sources from getting contaminated is pretty expensive. How could we expect AEC & concerned admin body of GOB to abide by the terms and conditions pointing to these sharp expenses? And you want Dhaka to feed with the water supply from the coalmine (let's forget about Shitolokkha and Buriganga and whatever the rivers we have around)?

Anyway, please acceptmy apology if I sound too rude. Debates carry me away.