Open letter to the IFC regarding its proposed financing of a crony-owned cement factory and coal mine in Myanmar

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Open letter to the IFC regarding its proposed financing of a crony-owned cement factory and coal mine in Myanmar

Location: Myanmar

Dear International Finance Corporation Board of Directors,

Attention: World Bank President Jim Yong Kim

We, the undersigned, are deeply alarmed to learn that the International Finance Corporation (IFC) is considering funding a crony-owned cement factory in Myanmar’s Mandalay Division that relies on the extraction and burning of large amounts of coal. The Shwe Taung Cement Factory is controversial in the extreme and we urge the IFC Board to reject funding for this project on June 8, 2017.

First, financing this project would contradict the IFC’s commitment to support the Paris Agreement by investing in “climate-smart solutions” in emerging economies, as well as its energy sector strategy that restricts the financing of coal-fired power plants. According to a Supplementary Environmental and Social Impact Assessment (ESIA) published in April 2017, the Shwe Taung Cement Factory will require the extraction of 150,000 tons of poor-quality subbituminous coal per year. As the World Bank has pledged not to finance coal power plants in Myanmar due to their devastating environmental, health and climate impacts, it is not clear why the IFC is considering funding this project. The IFC has also failed to subject this investment to coal screening criteria or provide affordable alternatives before bringing this project to Board’s consideration.

The IFC would be better off investing $35 million in loans and equity in a more sustainable sector than the cement industry, which is responsible for 5% of the world’s carbon emissions. The Supplementary ESIA fails to assess the climate impacts of the project. The project would require the expansion of a 3,378 acre coal mine spanning 15 kilometers in Kalewa in Sagaing Division, north-western Myanmar. At the very least, the IFC should only consider investing in cement production that uses alternative fuels instead of coal. The Supplementary ESIA failed even to consider project alternatives, not just in terms of fuel, but for all aspects of the project.

The project also entails the expansion of a large limestone quarry adjacent to the cement plant in Thazi, Mandalay Region. Project affected peoples have reported that the limestone quarry (which uses a drill and blast extraction method) has already devastated the biodiversity rich forest area, and has critically affected their local water sources. Both the limestone quarry and coal mine are located in areas which have been classified as a Critical Habitat in the IFC’s Environmental and Social Review Summary.

The project is likely to have serious additional health and environmental impacts, including the pollution of lands and waters, deforestation, destruction of habitats and livelihoods near the coal mine and factory areas. Both of the project’s sites are within 30 kilometers of protected areas populated with endangered species. The Supplementary ESIA commissioned by IFC falls short in a number of areas, including failing to adequately assess existing pollution levels in project site areas and completely omitting a health impact assessment or any qualitative analysis of social impacts. It fails to consider IFC Performance Standard 7 on Indigenous Peoples as relevant, despite an earlier project EIA from 2014 identifying the presence of multiple indigenous communities in Kyubin village, 3km north of the cement plant site. The Supplementary EIA also fails to consider IFC Performance Standard 8 on Cultural Heritage. It does not provide any reasoning for why these matters were considered irrelevant. This is unsatisfactory and shows a very serious lack of respect for local people, their customs and livelihoods, as well as the IFC’s own standards.

Another serious concern is that the project will profit a notorious crony who made his fortune by cozying up to the former military regime in Myanmar. Aik Htun, who along with his family is the majority shareholder of the Shwe Taung Group, is cited as having “connections with the narcotics trade” and co-owned and was Vice Chairman of bank designated as a “Financial Institution of Primary Money Laundering Concern” by the U.S. Treasury. Financing this project would send the message that the IFC disregards the reputational risks associated with the borrower, and is more interested in lining its pockets and that of Myanmar’s crony elite than promoting sustainable development in accordance with its mandate.

Communities near the cement factory are very concerned about the project. The existing cement plant only employs a total 6 local workers for low-skilled, low paying jobs, despite the existence of over 600 households in two nearby villages. The project has caused a number of land disputes, including bulldozing farmland with no notice and only paying compensation after the fact. Villagers also report that the company has used judicial harassment against farmers who complain about the destruction of their land and resources. The EIA Consultations which were undertaken in an attempt to comply with the IFC Performance Standards, were by villagers’ accounts, farcical. Some villagers reported a 5-minute question and answer session. This undercuts the Shwe Taung Group’s and the IFC’s social license to operate.

At this point in time, we emphasize the sheer irresponsibility of this investment and the multiple ways it undermines the IFC’s commitment to sustainable investment and ‘shared prosperity’ through private sector development. The IFC Board should refuse funding for an environmentally destructive coal-reliant project in a critical biodiversity area, which has caused immense social problems at the local level, and only serves to enrich a businessman with known ties to the former military regime and suspected connections to the narcotics trade. The IFC’s reputation, and the people of Myanmar, deserve better.

Yours sincerely,

  1. Myanmar Alliance for Transparency and Accountability (national office)
  2. EarthRights International (ERI)
  3. Bank Information Center
  4. Paung Ku Myanmar
  5. ဘာသာေပါင္းစံုညီၫႊတ္ေရးအဖြဲ႕
  6. Ayeayarwaddy West Development Organization, AWDO. (Magway region)
  7. Satodetayar Development Organization, SDO.
  8. Yoema Chin (Satodetayar)
  9. Ayeayarwaddy West Development Organization – AWDO, farmer group. (Ngaphe)
  10. Independence Asho Chin Nation Force.
  11. Pwintphyu Development Organization
  12. Myanmar Alliance for Transparency and Accountability – MATA (Magway)
  13. Myanmar China Pipeline Watch Committee – MCPWC (Minbu)
  14.  Ayeayarwaddy West Development Organization – AWDO, farmer group (Minbu)
  15. Thuriya Sandra Environmental Watch Group
  16.  ေရႊျခံေျမကြန္ရက္ ကြမ္းျခံကုန္းၿမိဳ႕
  17.  စိမ္းလန္း ျပင္ဦးလြင္
  18.  Community Response Group –  COMREG
  19.  Tarkapaw Youth Group
  20.  Kachin Peace Network
  21.  Peace & Open Society Kyaukse
  22. Myanmar-China Pipeline Watch Committee – MCPWC
  23. Myanmar Alliance for Transparency & Accountability (Mandalay)
  24. Farmer Union Kyaukse
  25. ပိြဳင့္- ရိုးရာ၀န္းက်င္ ျမွင့္တင္ေရးအဖြဲ႕ (POINT-Promotion of Indigenous and Nature Together)
  26. Karen Environment and Social Action Network – KESAN
  27. Upper Chindwin Youth Network – UCYN
  28. Ayeyarwaddy Transparency and Accountability Association (ATAA)
  29. Dawei Development Association – DDA
  30. IFI Watch Myanmar
  31. IFI Watch Kyunsu
  32. Green Network Mergui Archipelago
  33. The Mergui 88 Generation Open Peace and Open Society
  34. ေတာင္သူလယ္သမားမ်ားႏွင္႔လယ္ယာလုပ္သားမ်ားသမဂၢ (ၿမိတ္ခရိုင္)
  35. IFI Watch Pakokku
  36. Sein Yanung So
  37. Natural Green Alliance
  38. Transparency and Accountability Network Kachin State (TANKS)
  39. Humanity Institute
  40. Our future initiative (OFI)
  41. Southern Youth
  42. ေမတၱာလက္ကမ္း
  43. ၿမိတ္ၿမိဳ႕နယ္ေတာင္သူလယ္သမား သမဂၢ
  44. လမ္းစအဖြဲ႕
  45. Tanintharyi Fisheries Partnership
  46. Tanintharyi Green Network
  47. Motherland
  48. သယံဇာတေစာင့္ၾကည့္ေရးအဖြဲ႕ (တနသၤာရီ)
  49. သယံဇာတေစာင့္ၾကည့္ေရးအဖြဲ႕ (ပေလာက္)
  50. ၈၈ မ်ိဳးဆက္ (ပုေလာ)
  51. ၈၈ မ်ိဳးဆက္ (ၿမိတ္)
  52. အမ်ိဳးသမီးမ်ား သမဂၢ (ၿမိတ္)
  53. ေသြးခ်င္းသစၥာအဖြဲ႕
  54. NNER – Myeik
  55. ABSDF ရဲေဘာ္ေဟာင္းအဖြဲ႕
  56. ဆရာမ်ားသမဂၢ (ၿမိတ္ခရိုင္)
  57. သိေႏၶာ သယံဇာတ ေစာင့္ၾကည့္ေရးအဖြဲ႕ (တနသၤာရီ)
  58. ၈၈ မ်ိဳးဆက္ (ေကာ့ေသာင္း)
  59. ေတာင္သူလယ္သမားသမဂၢ(ေကာ့ေသာင္းၿမိဳ႕နယ္)
  60. ေက်ာက္မီးေသြးေစာင့္ၾကည့္ေရးအဖြဲ႕
  61. ပါခ်န္ျမစ္ထိန္းသိမ္းေရးအဖြဲ႕
  62. Our Future Imitative (ဘုတ္ျပင္း)
  63. Tanintharyi Fisheries Partnership (ေကာ႔ေသာင္း)
  64. ေပါက္တိုင္းေခ်ာင္းဖြံ႔ၿဖိဳးေရးေကာ္မတီ(ထားဝယ္)
  65. Dawei Watch Fundation
  66. ကလုံးထာ ဖြံ႕ၿဖိဳးတိုးတက္ေရး ေကာ္မတီ
  67. Community Sustainable Livelihood Development Committee
  68. သတၱဳတြင္းေစာင့္ၾကည့္ေရးအဖြဲ႕ Min Monitors Group
  69. Dawei Youth Fellowship
  70. တနသၤာရီမိတ္ေဆြမ်ားအဖြဲ႕ Thanintheri Friends
  71. Green Generation
  72. ေတာင္သူလယ္သမားသမဂၢ(ထားဝယ္)
  73. အမ်ိဳးသမီးမ်ား သမဂၢ (ထားဝယ္)
  74. Dawei Pro-bono Lawyers Network
  75. Karen Affair Committee
  76. သံလြင္ကြန္ရက္
  77. အေျခခံဥပေဒျပင္ဆင္ေရး ျပည္သူကြန္ရက္
  78. မိကရင္လူငယ္အဖြဲ႕
  79. သက္ေမြးအေထာက္အကူျပဳအဖြဲ႕
  80. ဆာမူေထာ္
  81. စာေရးဆရာအသင္း- ဘားအံ
  82. လူမူထာအဖြဲ႕
  83. Twee Community Development Network
  84. ဟူဖိုကေပၚအဖြဲ႕
  85. ဇြဲကပင္ပံုရိပ္အဖြဲ႕
  86. Karen Human Right Group
  87. Free And Justice
  88. ေထာ္မဲပါအဖြဲ႕
  89. Khu Mee Lit: Cult:Association
  90. Khu Mee Women Organization
  91. Mon Land Development and Natural Resources Conservation Organization
  92. Chin Civil Society Network
  93. Kanpatlet Environment Conversation Organization
  94. Kanpatlet Land Development Organization
  95. Matupi Community Development Organization
  96. Chin Youth Organization
  97. Chinland Natural Resource Watch Group
  98. Beauty of Mt. Chin
  99. ZCD + ZDA – Zomie Congress for Democracy + Zomie Dress Agency
  100. Horn Bill Organization
  101. Small Scale Industries Development
  102. Chin Green Network
  103. Falam Mino Paulkom
  104. Kachin Development Networking Group (KDNG)
  105. Airavati
  106. Women League of Burma WLB
  107. K’Cho Land Development Association ခ်ိဳးေျမဖံ႕ြ ျဖိဳးတိုးတက္ေရးအသင္း
  108. Open Development Foundation
  109. Chin Women Development Organization
  110. Yae Kyee Sann
  111. Youth Development Network
  112. Lut Lat Pwint Lin Social Association
  113. Myat Won Thit
  114. Myint Ma Kha Guard
  115. Public Network
  116. EDU Wave
  117. Kyauk Gyi Development
  118. East Light Development Group
  119. Myanmar Youth Star
  120. Bago Youth Network
  121. Green Equations
  122. ကရင္နီျပည္ လူငယ္မ်ား သမဂၢ
  123. ကရင္နီ အမ်ိဳးသားလူငယ္အစည္းအရံုး
  124. ကယန္း မ်ိဳးဆက္သစ္ လူငယ္
  125. ကရင္နီျပည္ ေတာင္သူ လယ္သမားမ်ား သမဂၢ
  126. ကယန္းအမ်ိဳးသမီးအစည္းအရံုး
  127. ကယား(ကရင္နီ)ျပည္နယ္ေက်ာင္းသားမ်ားသမဂၢ
  128. ထာဝစဥ္ စိမ္းလန္းစိုေျပ ကရင္နီျပည္
  129. Kayah EarthRights Action Network
  130. မဇၨိမႏွလံုးသားလူငယ္
  131. အထက္ခ်င္းတြင္း လူငယ္ကြန္ရက္
  132. အစိမ္းေရာင္ေျမ
  133. ထီးခ်ိဳင့္ကြန္ယက္
  134. မ်ိဳးဆက္သစ္လူငယ္
  135. နာဂလူငယ္ကြန္ယက္
  136. နိစၥဓူ၀ ပညာေရး
  137. အင္းသာ ေကာ္မတီအဖြဲ႕
  138. ျဗဟၺ၀ိဟာရိ
  139. ၀န္သုခ
  140. ေတာင္ကုန္းေဒသ ေစာင့္ၾကည္႔ေရး
  141. အစိမ္းေရာင္လြင္ျပင္
  142. အင္ဒိုင္းႀကီးပရဟိတလူမႈကူညီေရးအသင္း
  143. ေနရဥၨရာလူယ္ကြန္ယက္
  144. ေတာင္တြင္းလူမႈဖြံ႕ၿဖိဳးေရးအသင္း
  145. ႏုိင္ငံသားႏွင့္ ႏုိင္ငံသားအခြင့္အေရးလႈပ္ရွား ေဆာင္ရြက္ေရးအဖြဲ႔
  146. တေအာင္း ေက်ာင္းသားလူငယ္အစည္းအရံုး
  147. မ်ိဳးဆက္သစ္(ရွမ္းျပည္နယ္)
  148. ရွမ္းစာေပႏွင့္ ယဥ္ေက်းမႈ အသင္းအဖြဲ႕
  149. ၈၈ ျငိမ္းခ်မ္းေရးႏွင့္ပြင့္လင္းလူအဖြဲ႕အစည္း
  150. ပအို႔ပ္လူငယ္အဖြဲ႕အစည္း
  151. ရွမ္းလူငယ္(ေတာင္ၾကီး)
  152. တရားမွ်တမႈ ေစာင့္ၾကည္႔ေရးအဖြဲ႕
  153. ေတာင္သူလယ္သမားႏွင့္လယ္ယာေျမအသင္း
  154. ရွမ္းစာေပႏွင့္ ယဥ္ေက်းမႈ အသင္းအဖြဲ႕
  155. သိန္းနီ သဘာ၀ပတ္၀န္းက်င္ထိန္းသိမ္းေရး အဖြဲ႕
  156. ေရႊလိေမၼာ္လူမႈကြန္ယက္
  157. ကြတ္ခိုင္ သဘာ၀ပတ္၀န္းက်င္ထိန္းသိမ္းေရးအဖြဲ႕
  158. ရွမ္းစာေပႏွင့္ ယဥ္ေက်းမႈ အသင္းအဖြဲ႕(ရွမ္းေျမာက္လူငယ္အဖြဲ႕)
  159. ရွမ္းစာေပႏွင့္ယဥ္ေက်းမႈအဖြဲ႕
  160. တေအာင္း ေက်ာင္းသားလူငယ္အစည္းအရံုး
  161. အင္းစိမ္းေျမ သဘာ၀စိမ္းလန္းစိုေျပေရး
  162. တေအာင္း(ပေလာင္)စ/ယ ေကာ္မတီ
  163. ကြတ္ခိုင္တေအာင္းလူငယ္
  164. ေတာင္သူလယ္သမားအသင္း
  165. ထာ၀ရဂရုဏာရွင္အဖြဲ႕
  166. တေအာင္းအမ်ိဳးသမီးမ်ား အဖြဲ႕အစည္း
  167. ၈၈မ်ိဳးဆက္သစ္ ျငိမ္း/ပြင့္ (ရွမ္း/ေျမာက္)
  168. ၈၈မ်ိဳးဆက္သစ္ ျငိမ္း/ပြင့္ (ရွမ္း/ေရွ႕)
  169. ဝုန္းေမတၱာ
  170. လီဆူစာေပႏွင့္ ရိုးရာယဥ္ေက်းမႈဖြံ႔ၿဖိဳးေရးအသင္း
  171. အႏႈိုင္းမဲ့လူမႈကူညီေရးအသင္း
  172. ဓႏုစာေပယဥ္ေက်းမႈေဒသဖြံ႔ၿဖိဳးေရးအသင္း
  173. မ်ိဳးဆက္သစ္ သထံုေလး
  174. ေတာင္သူလယ္သမားမ်ားႏွင့္ ေျမယာလုပ္သားမ်ား သမဂၢ

 

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