The project is located in Papua, Indonesia. This is the first private sector project in the Oil and Gas sector in Indonesia. The ADB will provide USD million 350 private sector Loans for building Liquefied Natural Gas facility to export LNG to PRC, Korea and the West Coast of North America. The LNG facility will initially consist of two” trains” ( equipment units that purify and liquefy gas) with a name-plate capacity of 7.6 million tons per annum of LNG.
Public ConcernsCivil Society organization in Indonesia raised many environmental and social concerns with regard to this project. The letter sent to the ADB Board given below shows their concerns in detail.
Last April 30, indigenous Manobo activist John Calaba was invited to a meal by paramilitary guards of big business group DM Consunji Inc. (DMCI) to their security outpost in the hinterland village of Sabanal in Lebak Town, Sultan Kudarat.
Since 1989, DMCI’s M&S Inc. and Silvicultural Industries have been running logging operations in a number of Integrated Forestry Management Areas (IFMA) covering a total of 24,380 hectares in the province. In 2000, DMCI’s South Davao Development Co. was approved to start exploring for gold and copper in 1,274 hectares within the M&S IFMA itself.
These operations have long been protested by the Dulangan Manobos for DMCI’s encroachment, deforestation, and displacement of indigenous people’s communities in their ancestral domains.
Alongside 3 other large-scale mines, DMCI’s 3,765-hectare nickel mining project in Santa Cruz town, Zambales province has caused extensive water pollution that has reportedly already affected 120 hectares of fish ponds, thousands of hectares of farmlands, and all the major rivers, creeks, and shores in the 6villages of Santa Cruz.
In addition to its 600-megawatt coal-fired power plant in Calaca Town, Batangas, it has collaborated with the provincial government in Palawan - amidst opposition - to railroad the approval of its 15-megawatt coal-fired power plant in Narra Town, threatening the province’s status as a UNESCO-declared Man and Biosphere Reserve.
DMCI’s Semirara Coal Mine in Antique is the country’s biggest coal producer and a consistent environment and safety risk to its own workers and its host community, as well as its immediate marine environment. DMCI coal production directly feeds to the coal-fired power plants it owns.
Foreign investments are DMCI’s constant source of profit. According to their 2014 general information sheet, US-based construction firm Dacon Corporation has 45.77% of DMCI’s P13.27 billion total stock shares, while South African firm DFC Holdings has 17.86%. A number of US and Canadian financial firms also account for over 2% in DMCI’s stocks.
Integrated Citarum Water Resource Management Project
Citarum is one of the longest rivers in Java, measuring over 11,000 sq km and about 270 km long. There are more than 9 million people living in the Citarum River basin. There are 11 protected areas in the basin.
More than 85% of the river water goes to irrigation. The rest is used for domestic and industrial purposes.
Due to high population density and operation of industries along the river basin, Citarum has been severely polluted. To date, there are over 200 industries operating along Citarum that has been dumping 270 tons of industrial waste per day into the river. Sedimentation has also become a problem which has been causing flooding in the downstream area. The river retains capacity has also been decreasing from time to time.
Read the full story here.
Community Empowerment For Rural Development
Community Empowerment for Rural Development (CERD) is an ADB funded project in South Kalimanthan- Indonesia. The project was implemented with the US$170.2 million budget. The ADB loan based Loan 1765-INO (OCR) and 1766-INO (SF) is US$ 115 million (68%) and the Indonesian government US$ 55,2 million (32%).
This project held effectively on 15 March 2001 and would be implemented for six years in six provinces of Indonesia, namely Central Kalimantan, South Kalimantan, East Kalimantan, Central Sulawesi, Southeast Sulawesi and North Sulawesi.
Read the full story here.
Electricity Market and Transmission Development
On June 8, Republic Act (RA) 9136 or the Electric Power Industry Reform Act (EPIRA) of 2001 will mark its tenth year. Former President Gloria Arroyo signed EPIRA amid strong opposition from various sectors. The manner in which the law was passed also controversial. There were claims of bribery involving half a billion pesos that the Arroyo administration allegedly handed out to members of the House of Representatives (HOR) to speed up the passage of EPIRA.
Proponents touted EPIRA as the answer to our power and fiscal woes. But after ten years, the country has now the most expensive electricity in Asia. Price manipulation besets the industry. Rotating brownouts plague Mindanao. And the National Power Corporation (NAPOCOR) remains neck-deep in debt.
EPIRA provides the legal framework for the privatization of NAPOCOR and deregulation of the power industry. The state-owned power firm used to own and operate generation plants and transmission facilities. It also held supply contracts with independent power producers (IPPs), or private companies allowed by the Power Crisis Act of 1993 (RA 7648) and BOT Law of 1994 (RA 7718) to build and operate generation plants. Under EPIRA, the Power Sector Assets and Liabilities Management Corp. (PSALM) was set up to privatize the NAPOCOR’s generation and transmission assets including its IPP contracts.
The passage of EPIRA was a conditionality set by the creditors of NAPOCOR for it to access additional loans. Among its largest creditors were the ADB, World Bank, and Japan Bank for International Cooperation (JBIC). These creditors were worried that NAPOCOR, with its worsening financial problems, might not be able to pay them back. The pressure from these creditors provided the impetus for EPIRA’s enactment.
After 10 years, PSALM has already privatized 91.7 percent of NAPOCOR’s generation assets in the Luzon and Visayas grid. It has also privatized almost two-thirds of energy outputs under IPP contracts nationwide. The transmission was privatized as well via a 25-year Concession Agreement (CA) between the government and the National Grid Corporation of the Philippine (NGCP) in January 2009. As of October 2010, remaining assets for privatization include three generating assets (1,740.10 megawatts) and eight IPP contracts (2,026.32 MW).
Masinloc Coal-Fired Power Plant
The toxic-emitting, 600-megawatt Sixteenth Power Masinloc Thermal Power Project (MTTP) in Zambales, Philippines started operating in 1998. The two-unit plant uses imported high-quality bituminous coal, which produces 385,000 tons of ash per year and releases massive amounts of carbon dioxide that is toxic to both human health and the environment.
The US$441-million project was jointly financed by the Asian Development Bank (ADB), Export-Import Bank of Japan and the local executing agency, National Power Corporation (NPC). The Japanese bank reportedly required that NPC attain “100 percent social acceptability” before it agreed to fund the project. The ADB, meanwhile, provided risk insurance.
Read full story here.
Emergency Assistance for Relief and Recovery
The Philippines ranks sixth in the Climate Change Vulnerability Index, and the third most vulnerable country to disaster risks and natural hazards in the World Risk Index 2011. Climate-Change Financiers.
FDC also scored the IMF-WB and the ADB for their hypocrisy in claiming they have been out to fight climate change. “Far from being concerned about climate change, these IFIs are co-culprits of highly-industrialized countries and their corporate elites, with the ADB and World Bank in the axis of financing climate change-inducing projects like coal and other fossil-based energy projects,” FDC said.
Experts say that the power industry is a major contributor to climate change with power plants utilizing fossil fuels such as coal and diesel contributing the highest amount of CO2 emissions to the atmosphere.
In the 2012 study the World Resource Institute (WRI), the WB and the ADB ranked number two and three among the top IFI funders of coal in the world, with the total funding of US5.3 billion for 29 coal plant and US3.9 billion for 21 coal plants, respectively.
In the case of the Philippines, after the ADB together with other IFIs, successfully pushed for the privatization of the power industry, the ascent of dirty energy hastened. New coal-fired power plants were built, and the capacities of existing power plants expanded. Some of these energy projects were co-financed by the WB and the ADB, like the coal-fired power plants in Masinloc, Zambales, in Calaca, Batangas and in Naga, Cebu, which they heralded as “clean and sustainable.”
According to Philippine Movement for Climate Justice (PMCJ) data, 84% of Philippine energy is derived from fossil fuels, and as of August this year, there was 31 coal operating contracts at the development and production stage. An additional 17 coal plant projects using a total of 26 boiler facilities are in the pipeline.
Climate justice demands reparations to countries like the Philippines in accordance with the United Nations Framework Convention on Climate Change (UNFCCC) principle of common but differentiated responsibility. This responsibility takes the form of grants and aid to enable the Philippines to develop resiliency to climate change and compensation for losses and damages like what it suffered from Yolanda and previous other climate change–induced natural disasters.
During its operation, the Marinduqueños experienced a series of environmental mining-related disasters.
In spite of numerous actions made by local communities and non-government organizations (NGOs), and surviving cease-and-desist orders by the National Pollution Control Commission during the Martial Law, MCC continued its operation. It was later found out that 50% of the company was owned by the late president Ferdinand Marcos through four front companies. (Roja Salvador, 2001)
Later on, the ADB and Placer Dome agreed to transfer the bank’s interest to MR Holdings, Ltd., which is a company created by Placer based in the Cayman Islands. (Keith Damsell, May 1999) Around US$20 million was paid to the ADB. After the payment of the outstanding loan and return of the Covenant, the project documents at the Bank were no longer accessible. ADB stated that it is no longer involved in the project and the project is not covered by the 1994 Information Disclosure Policy. (James Esguerra, July 2003).
With a $100-million loan from Korean Export-Import Bank, the ADB-funded project will involve the construction of a coal power plant utilizing circulating fluidized bed combustion (CFBC) technology, claimed as a cleaner coal technology than the conventional pulverized coal technology as the boilers used are said to generate very low sulfur dioxide and nitrogen oxide emissions.