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Global civil society calls on private banks to withdraw support from Bangladesh coal mine

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By International Accountability Project | San Francisco, USA, Aug 21 2008

For immediate release

Over 100 civil society organizations from 31 countries are calling on financial backers to withdraw their support of the Phulbari coal project in Bangladesh, citing egregious human rights abuses and environmental concerns associated with the project. Today, a letter was sent on behalf of these organizations to major financial institutions including UBS, Credit Suisse, Morgan Stanley and FRM Corp./Fidelity Investments. [1]

Each of these financial institutions holds or manages shares in Global Coal Management Resources (GCM) which established a wholly owned subsidiary, Asia Energy Corporation, to develop the project.

“The Phulbari coal project is a disaster waiting to happen,” said Joanna Levitt from the International Accountability Project (IAP), a signatory to the letter and advocate for people uprooted and threatened by development projects and policies. “If implemented, the project could risk the impoverishment of tens of thousands of people—turning current farming households into landless wage-laborers who will be forced to compete for limited jobs, either in the agricultural sector or entirely different economic sectors.”

"The project is a deadly threat to food security, energy security and human security in Bangladesh,” said Anu Muhammad, Member Secretary of the National Committee to Protect Oil, Gas, Mineral Resources, Port and Power in Bangladesh and Economics Professor at Jahangirnagar University. “It will destroy fertile land, and desertification and dewatering will affect more than 256 sq km around the mine. About 75 percent of the coal from the mine will be exported from the country and it will uproot hundreds of thousands of people. The project will increase poverty and unemployment and will create a floating population of displaced people, including many children and women."

The civil society letter cites many human rights abuses associated with the project including: the indiscriminate shooting of local residents opposing the mine; the arrest and torture of local leaders; non-compliance with the right of Indigenous Peoples to give their free, prior and informed consent to project; the threatened displacement of over 200,000 people; and massive environmental risks, including to the Sundarbans, a UNESCO protected mangrove forest.

“The financial institutions invested in GCM have a responsibility to withdraw their support from this project when human rights are being abused,” said Johan Frijns, Coordinator of BankTrack, another signatory to the letter. “To take no action is an indication in support of GCM and the Phulbari Coal Mine project.”

Enclosed with the letter to the banks was the final draft of a forthcoming reportfrom IAP and Bank Information Center (BIC) which critically examines the potential social impacts the coal mine would have on the local population. [2]

The report, An Assessment of the Draft Resettlement Plan Prepared by Global Coal Management/Asia Energy Corporation, concludes that that over 200,000 Bangladeshis will be impacted by the project, many of whom will be forcibly relocated, losing vitally important farm land and access to economic livelihood. As land scarcity is already a major issue in Bangladesh, this forced displacement will also likely lead to increased conflict in the project area.

###

For more information, contact:

Jennifer Kalafut, International Accountability Project, USA, +1.202.415.4047 (GMT -7)
Johan Frijns, BankTrack, Netherlands, +31.6.12421667 (GMT +2)
Anu Muhammad, National Committee to Protect Oil, Gas, Mineral Resources, Port and Power, Bangladesh, +88027212206 (GMT +6)

[1] Open Letter to Financial Institutions Investing in Global Coal Management Regarding the Phulbari Coal Project, Bangladesh, August 2008. Available at: http://www.accountabilityproject.org.

[2] Phulbari Coal Project: An Assessment of the Draft Resettlement Plan Prepared by Global Coal Management/Asia Energy Corporation, Final Draft, August 2008. Written by International Accountability Project and commissioned by Bank Information Center. Available at: http://www.bicusa.org.

Credit Suisse
Credit Suisse Group was founded in 1856 and is headquartered in Zurich, Switzerland. It serves companies, institutional clients and high-net-worth private clients worldwide,…
Morgan Stanley
Morgan Stanley was one of the four investment banks that for decades ruled on Wall Street (with Lehman Brothers, Merril Lynch and JPMorgan Chase). The corporation, founded…
UBS
Modern UBS was formed through a merger of the Union Bank of Switzerland and the Swiss Bank Corporation in June 1998.  UBS is headquartered in Zurich and Basel and it…
Phulbari coal mine
Bangladesh
The Phulbari coal project is a proposed open pit coal mine in northwest Bangladesh and includes the construction of at least one 500-MW power plant. At full production about…
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