Soumya Dutta outside the World Bank headquarters, August 2013
BIC highlights the work of Soumya Dutta in the campaign against Tata Mundra.
Soumya Dutta is the National Convener of the Indian people’s science group Bharat Jan Vigyan Jatha and the Convener of the Climate and Energy Group in the Beyond Copenhagen collective in India, a network of 40+ organizations. Soumya Dutta has been involved in the people’s science movement for the past twenty years, but has recently become more involved in activist movements such as the campaign against the Tata Mundra Power Plant, which is funded by the International Financial Corporation (IFC). This interview covers some of the concerns and expected outcomes sought by the community as part of their complaint submitted to the Compliance Advisor and Ombudsman (CAO), the IFC’s accountability mechanism.
You have been supporting the complainants in the campaign against the Tata Mundra coal-fired power plant for a while. How did you get involved?
I became actively involved after the complaint was submitted to the CAO in June 2011. My role was to help support the complainants in researching the technical and social aspects of the complaint and to assist in the media work.
What is the significance of this campaign?
Tata Mundra, known officially as Coastal Gujurat Power Limited (CGPL), is an iconic, “clean” project from a company that not only is the largest corporate house in India, but has the reputation of being an ethical corporation. Tata bills itself as a company that takes care of people, but this power project has caused such massive damage to the community’s health and livelihood that their public image has come into question. If this is the most ethical corporation in the country and the negative impacts are so bad, imagine how much worse plants from other companies are.
How serious are the environmental, public health, and economic costs?
The problem is that the economic and health costs were not thought of when the impacts of this project were assessed. Even with coal plants that have been around for 20 years in other areas, there are no baseline assessments to study health impacts. When the report “Coal Kills” was published, it was a good attempt at showing the negative impacts of coal-fired power plants in India, but the report was based on a desk study. No investigation of actual impacts of coal on communities that live near coal plants have occurred yet. However, we do have reports from doctors near the Tata Mundra plant that there has been a 20% increase in respiratory illnesses in children since operations started a year ago.
The Kutch coast where the project is located is one of the richest natural areas in the Gujurat state. During the construction phase, there were losses from the removal and destruction of mangrove forests, dredging of streams, and dumping of waste. However, the impacts caused by Tata Mundra during this stage cannot be isolated from those from the Adani Mundra plant, which is within 1 km of Tata Mundra. After construction, the impacts include pollution from flying ash, coal dust, and hot water. Tata Mundra is responsible for 90% of the hot water being dumped into the outflow channels, as the plant is using open cycle cooling, which is less efficient that closed cycle cooling. Closed cycle cooling could reduce the water used by 85%. Tata Mundra has also decided to forego installing flue gas desulferizers in their chimneys, despite the fact that the Indonesian coal it is burning is high in sulfur.
The pollution from the plant has already negatively impacted the fisheries and marine life that the fish workers rely on for their livelihoods, and the environmental impacts are very closely linked to the economic ones. The economic costs have not been calculated to the full extent, but it will be a messy exercise and will not focus only on income losses.
How has the company reacted to the CAO complaint and community resistance to the project?
When the company began the first clearance of land for the plant in 2007, many in the community started protesting the project. The protestors marched to the district headquarters to complain to the district collector (similar to a magistrate), but they were ignored. For five years the community protested, but the company just dismissed them.
Then two years ago the complaint was filed with the CAO and more attention was brought to the case. The independent report that we published in June 2012 started to be covered by major media outlets, which is very unusual because these newspapers are usually very conservative due to their ties with the government. We were very surprised by this, but it ended up putting a lot of pressure on Tata. That’s when the company’s strategy changed, and they started offering incentives such as feeding centers to the pastoralists who were impacted by the project in order to improve their image. The company began to offer fodder to the pastoralists, though it is limited to 1500 heads of cattle, which is only a small percentage of the total number of animals. However, even this has been enough to satisfy the pastoralists to some extent, many of whom are no longer interested in actively protesting the project.
What are the complainants expecting from the CAO audit?
The primary goal of the complainants is to make the company and the IFC compensate them for their loss of livelihood. The complainants have the expectation that the audit will force the IFC and the company to admit the major violations in the implementation of this project and the failure to recognize these violations.
The expectations of the community in this respect are three-fold:
- Make good their losses. The fish workers who filed the initial complaint with the CAO have noted a significant decrease both in the quantity and quality of their fish catch since the project started, leading to worsening economic conditions. Due to access blockage, their costs of transportation have also gone up. The complainants want the IFC to develop a reparation plan to compensate for these losses. And it’s not only the fishers who have taken a big hit. Cash crop and fruit productions have dipped significantly, though it is difficult to attribute this to any one reason – ash and dust is being suspected by local farmers. Losses of the pastoralists (for whom some minimal measure has been taken by Tata) and salt-panners need to be factored in too.
- Restore the ecosystems. These ecosystems form the basis of the complainant’s livelihoods. Though they are not officially part of the CAO complaint, salt-panners and pastoralists who have been negatively impacted through the loss or pollution of their land and water resources have made presentations to the government in support of the audit. Even farmers are now beginning to see impacts, as date production has dropped significantly and chiku fruit has all but disappeared from areas around the coal power plants.
- Apart from the demand of not supporting the CGPL any further, even pulling out by IFC is expected by the fisher community. This will hopefully halt or slow down industrialization in Kutch. At least 14 additional units, including power plant expansions, shipbuilding ports, and forging units are planned for the area, and many are holding public hearings on the commission plans and environmental impact assessments. No more of these projects should move forward as a minimum safety.
Can you elaborate on the community’s demand for a reparation and restoration plan from the World Bank?
The restoration plan is expected from the World Bank because the IFC has a direct role in the development of this power plant. Not only is the IFC a lender, but it also has equity in CGPL, which means that as an owner of the plant, it is responsible for its impacts. From the very beginning, the IFC’s argument for supporting this project rested on the notion that the plant would provide cheap electricity for the poor, but this is not the case. The power is high cost due to the increase in the price of coal, and the majority of the power generated is going to Delhi satellite towns and other big towns. The fish workers who filed the complaint are not receiving any power as the government has determined that they have no legal right to the land they live on from 8-9 months of the year, despite the many decades of communal land use.
There is a small segment from the urban areas who have benefitted from the project, either through improved access to electricity or contracts awarded by the company for vehicles and such. But overall the World Bank has played a role in creating more poverty in this case, not alleviating it as its mandate says, and should take responsibility by implementing the requested reparation and restoration plan.
Communities are also demanding for the IFC and other financiers to pull out from the project, which can be highly political and risky for the financiers and the borrower. Why? What is the likelihood that this will actually happen in the Tata Mundra case?
Besides the environmental and social costs, the project is also nearly non-viable in pure economic terms. Not pulling out from the project at this point is just as risky, especially if the government does not agree to the higher tariff the company has asked for. The company is currently engaging in political arm twisting so that they can pass on the higher costs to the consumer. Tata is trying to use its influence with the highest political level in India, including the Prime Minister, to keep this project alive.
In terms of pure economics, this plant is just turning out to be a bad dream for the IFC and Tata. The losses associated with this project are massive: roughly $140 million was lost in 2011, and the $160-170 million was lost in 2012. Tata has compensated for this by using profits from other projects.
Moody’s has reported that each additional unit at Tata Mundra will cause losses to go up. And Tata is planning on expanding the plant’s capacity with two additional 800 MW units! It would be easy for the IFC to withdraw from the project now, even if it is tempted to stay because of the equity investment.
Is there an alternative to the Tata Mundra coal plant?
I have seen hundreds of wind turbines in this district just driving down to Mundra. This area has been known as one of the most prospective area for wind and solar. Because Gujarat is in the extreme west of the country, it is not as impacted by monsoons. There are many sunny days throughout the year and wind potential is strong due to being close to the coast. Though the turbines already set up are older and use more expensive technology, wind power costs have come down considerably, opening up better possibilities for newer, higher-hub, higher power.
In one part of the Kutch district, known as the Rann of Kutch, there is roughly 30,000 sq km of underutilized land that is both low productivity and sparsely populated. This area is ideal for solar and wind, and if managed properly, the solar and wind power generated here could provide six to eight times what Gujurat state currently consumes, which is substantial given that it is one of the most industrialized states in India.
In India, the government has a monopoly on coal through Coal India, which mines about 85% of the country’s total reserves. Most of the untapped coal reserves are in central India, where the government has come into conflict with indigenous groups over forested areas, which would have to be reduced from 19% to 10% if the mining were to continue. As a result, Coal India has not been able to ramp up production and has become very dilute. Cheap imported coal was the impetus to build power plants such as Tata Mundra on the coast, rather than transporting domestic coal 2000-4000km. This should be an encouragement to move away from coal.
More importantly, social and environmental costs are never calculated for coal. If these are taken into account, wind and solar would come out to be comparative in cost, though the technology is still somewhat expensive.
What would be the implications of President Kim’s decision on the Tata Mundra project complaint to the newly-adopted energy strategy of the World Bank?
The World Bank’s argument for supporting coal projects has always been that ‘coal is the cheapest form of energy,’ but that is no longer true. It depends on the area, but if the source of coal is too far from the project, generally more than 500km away, it may not actually be cheap. This is an exception in India, where coal prices are kept artificially low through salary freezes and reduction in pension payments. However, Coal India is running into troubles and will ultimately have to raise costs, though this will probably not occur until after the general elections in 2014, as politicians on both sides are funded by Tata and other energy companies.
Dr. Kim’s stance on climate change should also be taken into account here, as competing cleaner power sources such as wind and solar have come down in cost. While it depends on the site, using clean energy sources will be competitive on climate change impacts, which disproportionately affects the poor. If the World Bank is serious about climate change issues, they need to consider stopping financing for coal projects.
A strong stance on this complaint will send a clear message and signal to borrowing governments. It is commonly understood that if it is a World Bank Group project, the safeguards make the project better, especially since our country does not have strong policies. That is why Tata Mundra is iconic – as a World Bank project, it should be better. How bad are the other similar projects in this country? We cannot go everywhere. The decision on the Tata Mundra complaint will serve as the acid test for the World Bank/IFC and others regarding the commitment to their own policies and mandate.