Samut Prakarn Waste Water Management Project
ADB’s stake in the project is one-third (US$230 million) of the total cost (US$687 million). The plant is co-financed by the Thai Government (59% of total cost) and the Japan Overseas Economic Cooperation Fund (now the Japan Bank for International Cooperation). Prior to this major loan, ADB has already extended grants to study alternatives in mitigating the deteriorating environment in the province of Samut Prakarn focusing on water quality. The result of such study was the recommendation of a central wastewater treatment plant that will be built on each side of the Chao Phraya River.
The Samut Prakarn Wastewater Management project is designed to serve as the hub of all wastes generated by industries, commercial and residential groups in the Samut Prakarn province. Aside from the central treatment plant on the east and west side of the province, the project entails the installation of collection and discharge pipelines that would serve as the conduit to the industries and the treatment plants. The treated waste would then be released to the Gulf of Thailand. Controversy erupted when construction began in a different site, away from the original sites identified in the studies. The residents of Klong Dan had no idea that their area would now be housing just one wastewater treatment plant until construction was in full swing. Project information was difficult to obtain, as both the ADB and the Thai Government’s Pollution Control Department (PCD) was tight-lipped on the issue. The concerned villagers had to go through various institutions just to understand the basics of the plant and its direct impact to their livelihood. Central to what the villagers came to know was the fact that the project in Klong Dan has neither environmental nor social assessment studies. Klong Dan was not part of the many option areas that were identified by the initial studies.
The wastewater plant is a big issue for the Klong Dan villagers as they largely depend on the fertility of the Gulf of Thailand and its tributaries. The Gulf is home to many shrimp, mussel and fish farms. From information obtained outside the financing institutions, the plant doesn’t have the capacity to treat wastewater that is heavy on phosphorous, nitrogen, bacteria and heavy metals. The immediate impact would just be to contribute to the pollution of the gulf. Moreover, water where the project is situated exhibits a circular motion hence, these toxins will not be fully flushed out of the gulf. Releasing the treated water into the gulf would also reduce the salinity of the water that would drastically affect the mussel and fish farms. Apart from these effects, the adverse impacts of the project on the villagers’ health are also noted. On the other hand, the villagers were never consulted in the decision-making process.
UK Alternate ED Resigns from ADB Inspection Committee
by Nurina Widagdo**
It what is yet another show of disapproval to ADB Management’s attitude in the Samut Prakarn case, the United Kingdom’s Alternate Executive Director to the Bank filed his resignation from the Bank Inspection Committee (BIC) last April 19, 2002.
The reason given for his resignation is because he felt that he should no longer associate himself with the Bank’s current inspection process via Board Inspection Committee membership, following the Bank Management’s decision to reject totally the findings of the first-ever independent Panel of Experts commissioned by the Inspection Committee. There have been several other actions on the part of the Bank Management which have reinforced his decision to resign, and he viewed that the Bank has failed to respect the essential integrity and independence of its inspection process.
Mr. Black’s service in the Inspection Committee is in his personal capacity but the authorities (Austria, Germany, Turkey, UK) he represents have been kept fully informed. Mr. Black has been an advocate for a more accountable inspection mechanism and processes of inspection case. His resignation, coupled with the departure of the Mr. John Lockhart (Australian ED) last April, have really weakened the Board Inspection Committee. The current Chair of the Committee, Mr. Zaheer Ahmed from Pakistan, is not known for providing strong leadership for strengthening the Inspection process. Pakistan voted against the Samut Prakarn case in the recent Board meeting on the Samut Prakarn Inspection case
**The author is the Manager for Asia Projects of the Washington D.C-based Bank Information Center. She can be contacted at email@example.com Independent Inspection Finally Authorized.
Last July, ADB’s Board of Directors has finally authorized the independent inspection of outside experts on the controversial Samut Prakarn Wastewater Management Project. The inspection enters ADB’s history as the very to be conducted under the Bank’s Inspection Function policy. This action came from the growing pressure from both the affected local communities and international organizations on the alleged failure of the Bank to comply with its own policies. The results of the investigation of the validity of the complaints, ranging from environmental to corruption issues, will be reported to the Inspection Committee of ADB’s Board, which in turn, will be passed on the Bank’s management to solicit recommendations that will guide the Board’s final decision.
The Samut Prakarn Wastewater Management Project is one of the Government of Thailand’s responses to the intensifying pollution problems in the Bangkok Metropolitan Region. Samut Prakarn, on of the 5 provinces comprising the Region, is estimated to have 1.2 million residents and 4,000 factories that contribute to wastewater flows. Aside from the government, the project is financed by the ADB and the Japan Bank for International Cooperation (JBIC), and was initially estimated to cost at around US$750 million. Of this amount, the Bank is responsible for providing US$230 million or 30% of the cost.
The US$230 million loan is the sum of two separate loans: the US$150 million approved in December 7, 1995 and the US$80 million supplementary loan designed for the completion of the project which was approved in December 3, 1998. Both loans are from the Bank’s ordinary capital resources (OCR). The former has a 25-year term including the five-year grace period and is to be paid semiannually. The latter is repayable over 22 years , inclusive of the five-year grace period.
project entails the construction of wastewater collection systems, a central wastewater treatment plant, wastewater and effluent monitoring systems as well as the financing of a program for cleaner production and capacity building of government agencies responsible for managing wastewater.
Board of Directors:
Interim Final Report Not For Public Circulation
Months after the inspection was authorized, the requests made by Klong Dan villagers have all winded down to a state of discourage. In December, with the impending release of the final report before the end of 2001, the Inspection Committee has declined to make the Interim Final Report public and would only be kept within the confines of the committe.
Despite the Bank’s approval for an Independent Inspection for the project, funds for the Samut Prakarn Wastewater Management Project continued to be disbursed from ADB’s coffers. As of end-November, 80% of the project has already been constructed. Apart from this, the Government of Thailand has stopped the panel’s site inspection for undisclosed reasons. Eventually, it has agreed the site visit but with the condition that the Bank will be responsible for whatever damages that a possible occurrence of violence may bring about. In response, the Inspection Panel decided to finalize the interim report without a site visit. The aborted visit was considered a blow to the villagers who were keen on the consultations that would follow the site inspection.
With these developments, the villagers and organizations feel that the Bank is speeding up the process to its own advantage. It is in this light that the following immediate concerns are raised to the Forum: – Obtain a copy of the Interim Report of the Inspection Committee
Follow-up Inspection Panel meeting scheduled for the early part of 2002
Intensify international campaign through information dissemination
Target Manila-based media to expose ADB’s involvement re: project irregularities
On the other hand, the following must be lobbied in support for the cause of the villagers: – the project is not cost effective – the Thai government is sending the wrong signal by encouraging industries that support adversarial technology just so economic growth can be achieved. It must stop supporting projects such as the Samut Prakarn Water Treatment Plant by studying which industries would prove beneficial to the country and the environment.
Chronology of Inspection Events
On 29 November 2000, three Klong Dan villagers filed a formal request to the Bank’s President for the inspection of the project. Four months after the President’s receipt of the letter, the same people filed the request to the Inspection Committee, which was then forwarded to the Bank’s Management for their own response.
On July 10, the Board authorized the independent inspection. After months of deliberation on the composition of the panel, the TORs, work plan and budget, the formal independent inspection was finalized.
Anxiety and hope all fell down, however, when the Government of Thailand suddenly issued a letter stopping the impending inspection without reason whatsoever. Eventually, the Government once again consented but with the condition that the Bank should take full responsibility of all damages that may occur should violence erupt. In response, the Inspection Committee announced to the public that it may not do a site visit & consultation with the villagers anymore as the government condition is an unacceptable term. Eventually, the committee opted to finalize their report without seeing the site. Worse, the Interim Final Report was decided to stay within the confines of the Committee.
Irregularities in the Samut Prakarn Project
Design and Location. The water treatment plant is currently a single infrastructure situated far from where it was originally conceptualized. The single plant, instead of two, is perceived to be more cost-effective for the government. The transfer, however, cost the government more. Together with the inflated land rates at which it was procured, project cost has now ballooned to 23.7 billion baht, up from its initial budget of 13.6billion baht.
Questionable Viability of the Project. The treatment plant discourages the use of the factories in Samut Prakarn from using their own wastewater treatment plants. Instead, they are ordered to make the project viable by connecting with the project’s pipes. However, the factories find this scheme more expensive. The same sentiments are heard from the residential areas that have to pay more in taxes for wastewater treatment when these are already covered by the current tax level.
Environmental and Social Concerns. Documents obtained from the Japan Bank for International Cooperation show the plant’s inability to fully treat wastewater with metals remaining in their original state after treatment. Together with the accumulation of sludge, the impending pollution of the bodies of land and water, the budget speaks of no fund that would address the problem. At risk are the resources that live in the bodies of land and water as well as the health of the communities living near the site area.
Absence of Environmental and Social Impact Analyses on the Existing Project Site. Since the onset of the project’s construction, Environmental and Social Impact Analyses have yet to be seen by the public. As such, the project’s magnitude on its future affectees are estimated by the villagers and concerned groups but not the ADB.
Shrouded and Corrupt Actions. The price of the land where the project is situated was purchased at more than twice its official rate (1.03 million baht per rai vs. 480,000 baht per rai). Critics claim that this was done in order to bail out companies with real estate investments that have gone awry. The parcels of land comprising the site were originally intended to be developed as resorts. As to why the project still pushed through despite the obvious problems in the current site, the close relations between two primary institutions involved in the project (ADB staff and officials of the Ministry of Science, Technology and Environment) explains the act.