Tata Mundra financier ADB's compliance body finds "major lapses" while identifying adverse impact on environment

Area surrounding Tata Mundra plant

By Our Representative
The Compliance Review Panel of Asian Development Bank (ADB) has come down heavily upon top international banks ADB for committing "major violations" in financing the 4000 MW Coastal Gujarat Power Ltd (Tata Mundra), in Gujarat. This is the second major financial institution for making harsh criticism of its lending to Tata Mundra.

Earlier, the Compliance Advisor Ombudsman (CAO) of World Bank’s International Finance Corporation (IFC), had found serious violations resulting in harm to the people and environment.
The ADB's Compliance Review Panel has noticed that top bankers have failed to "adequately disclose" information about the project and the potential harm it may do to the local people. It has said that there was absence of "timely public consultation" with all stakeholders, "erroneous" Social and Environment Impact Assessment (SEIA) resulting in "failure to identify" potential impacts.

It added, there was "absence" of baseline data and monitoring systems, and "failure "in adhering to the ADB policies on "discharge of water to the sea at a higher temperature resulting in heavy loss to livelihood to fisherfolk. The Report was made public on April 7.
The compliance report further says that these policy violations are manifested on the ground, as there was a heavy drop in the fish catch due to discharge of water to the sea at a higher temperature, resulting in serious livelihood issues among the fishing community; inadequate compensation for the fisherfolk, since they were not counted in the SEIA; and increasing respiratory illnesses among the children and the old.

The non-existent communities affected by Tata Mundra

Reacting to the development, Bharat Patel, General Secretary of Machimar Adhikaar Sangharsh Sanghathan (MASS), which is in the forefront of the struggle against Tata Mundra, said the compliance report chose "not to look into the impacts of the inlet channel of the project, citing that it is shared with the adjacent Adani power project, nor did it look adequately the impacts of coal dust and fly ash pollution on dry fish put in the open, or acknowledge the impacts on horticulture, blaming on the multiplicity of factors”.
Yet, according to Patel, “This is a major victory for the people’s struggle against Tata Mundra and other destructive power projects in Kutch”. MASS is one the complainants to the ADB's compliance body.

“Since two of the world's largest development banks have come under fire from their own accountability mechanisms for gross violations on the ground, it has only strenghtened our resolve to intensify our voices and struggle for justice and fight this dirty energy,” he added.
"In October 2013 CAO released its findings cited several of the violations for IFC policies", Patel said, adding, "These included violations of environmental and social risks and impacts of the project; lack of social baseline data; refusal to apply land acquisition rules despite physical and economic displacement; inadequate attention to the requirement of biodiversity conservation; failure to review and supervise the impacts on airshed and marine environment; and failure to examine the cumulative impact of projects around Tata Mundra."

A year long monitoring by the CAO said in January 2014 that "no action was taken by the IFC or the company to address its findings."

Women sorting the catch

“The project is up and running and people, our crops and cattle are suffering from its impacts. ADB finding violations about non-compliance but has refusal to take any action will be a joke on the people. The violator should be taken to task and suspend all work till the issues are adequately settled”, Gajendrasinh Bhimaji, one of the complainants, said.
“No other project in the country has received such serious flak from its financiers as Tata Mundra in recent times. Not taking any meaningful action on the findings will erode people’s faith in institutions like World Bank and ADB further, and will be left with no choice but the challenge them at all fora”, Madhuresh Kumar, national convenor of the National Alliance of People’s Movements (NAPM) said.
"This audit report by reconfirms the earlier CAO findings that both the ADB (and other financiers) and Tata Mundra had faltered on anticipating multiple impacts on communities and planning right measures to mitigate these. It is high time ADB, IFC and Tata Power sincerely engage in serious damage repair mechanism in consultation with the affected communities", said Soumya Dutta, an energy expert.

Souparna Lahiri of NGO Forum on ADB, a watchdog of ADB said, “We welcome the findings. We hope the findings will not remain on paper and the management will translate it into bold actions, sending a strong message to their clients”.

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