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Token ombudsman?

By Kanchi Kohli

A fisherpeople's union in Mundra, Gujarat, which has been battling thermal power plants in their vicinity, has attempted to engage with the ombudsman and monitoring process of multilateral funding agencies. The exercise has revealed the flaws in this internal recourse mechanism

Thermal power plants Adani group Coastal Gujarat Power Ltd

The six red, white and grey stacks of two thermal power plants stand tall next to each other in Mundra taluka of Kutch district, Gujarat. While four of these belong to the 4,620 MW plant of the Adani group, the two others are the property of the 4,000 MW Coastal Gujarat Power Ltd (CPGL), a Tata Power company. Together they stand accomplice to irreversible damage to one of India's most ecologically fragile and economically vibrant coastal areas.

Mundra's ecological sensitivity and unique cultural significance have been under threat from large-scale industrial expansion since the early-1990s. In the last decade, several private entities have taken over huge tracts of mangrove, fishing harbours, grazing land and inter-tidal mudflats. The powers that allowed this and those who have a hand in financing it are fully aware of the physical and social transformation it would bring to the region.

For the fishing, saltpan and grazing communities here, construction of the coal-fired power plants and their water cooling channels has not only blocked access to traditional fishing harbours in the area, but has also meant a reduction in fish catch. While actual figures for this are yet to be ascertained, fishing communities claim fish catches have dropped over the last decade or so. It has also meant them having to live right next to two functional thermal power plants for around eight months in the year, which is when they spend time in temporary shelters to earn their livelihood both by fishing in boats as well as on foot in this unique inter-tidal region.

In June last year, fishing communities that were part of the Machimar Adhikar Sangharsh Sangathan (MASS), a fisherpeople's union, sought to engage with the internal recourse mechanism of the International Finance Corporation (IFC), a private sector lending arm of the World Bank group. Their purpose was to test the monitoring and enforcement mechanism and highlight a range of irregularities in the CGPL project, popularly known as Tata Mundra. One significant violation is that the plant uses once-through cooling system technology rather than the closed-cycle cooling system for which environment clearance was granted by the MoEF in 2007. MASS's complaint to the IFC points this out as a critical issue and refers to the IFC's own website where the Tata Mundra project is listed as a project that uses once-through sea water cooling technology.

The Office of the Compliance Advisor/Ombudsman (CAO), established in 1999, is meant to be an independent recourse mechanism for projects supported by two private sector arms of the World Bank -- the IFC and the Multilateral Investment Guarantee Agency (MIGA). It seeks to address concerns raised by affected communities, enhance the social and environmental outcomes of these projects, and foster greater public accountability. For MASS, this was not an isolated exercise in engaging with the IFC's ombudsman process. It was a strategic part of the larger struggle against the rapid expansion of ports, coal-handling facilities and power plants in the region which has stripped this part of Mundra of its ecologically fragile landscape of mangroves and mudflats, and interfered with people's livelihoods.

MASS's June 2011 complaint stressed that CGPL had violated several performance standards laid out by the IFC for all projects funded by it. These, according to the IFC's own claims, are critical for the projects to continue to receive funding. The violations relate to incomplete impact assessments, change of technology, displacement of livelihoods, and loss of biodiversity. They include a social and environmental assessment and management system, pollution prevention and abatement, community health, safety and security as well as biodiversity conservation and sustainable natural resource management. Each one of these was described in detail, and reasons for the same put forward.

As usually happens following such complaints, the processes within the IFC began to roll, with MASS and the fishing communities having to follow an arduous paper trail and receiving a highly-charged visit from two members of the IFC's 'dispute resolution' team. The visit of the two consultants from the IFC's Office of the Compliance Advisor/Ombudsman, in August 2011, was an attempt to initiate a dialogue between the affected communities and Tata Power (CGPL). By the CAO's own admission, through a letter to MASS in October 2011, the committee was not there to study the alleged violations but to attempt to resolve the conflict.

This was frustrating for MASS and other members of the fishing community who had engaged with the IFC process in order that action be taken for non-compliance and, possibly, funding withdrawn. Not only had CGPL violated conditions laid out in environmental approvals and carried out a poor impact assessment, it had also violated use of the basic technology for which clearance had been granted. Till date, CGPL is using a once-through cooling system for its coal-fired plant despite only having approval for a closed-cycle cooling process. According to the facts highlighted in MASS's complaint to the CAO, which quotes from a study by the California Energy Commission: "Once-through systems have a double damage impact on the water source they draw upon. Marine life taken into the system is likely to be killed by the water pump impellers or when passing through the heat exchange system." It states that although the technology might be more affordable, it causes irretrievable damage to marine biodiversity.

In their complaint to the CAO office, MASS clearly stated that the team that visited the area in August 2011 had been attempting to show that discussion with the company was the only way out for the affected people if "positive" results were desired. MASS outlined 17 conditions based on which they would agree to meet the company. According to MASS representatives, the company declined to meet any of its members. No one found this surprising. More importantly, there were consistent and unwarranted insinuations about lack of strategy, unity, vision and strength within MASS. And questions about MASS's ability to lead a fisherpeople's movement. It was almost as though the two-member team was not seeking to prioritise the core issues that had been raised but, rather to undermine the struggle and demoralise local people.

Given this history and the subsequent justification by the CAO of actions taken by the dispute resolution team, coupled with lack of action against violations by Tata Power, it was not surprising that the February 2012 final assessment affirmed that MASS's complaints did not hold ground. It further added that the matter could have been amicably resolved had MASS members cooperated. Instead of noting the anger of the complainants, the report appeared to portray them as adamant and unreasonable and unprepared to enter into a collaborative process to resolve the dispute.

What the CAO's report missed was that MASS and the affected people had pointed out the violations and sought corrective measures even before they had made their complaint to the IFC. It was not as though presentations had not been made to CGPL's monitoring committees and remedial measures not sought from other forums including the Ministry of Environment and Forests. The CAO apparently did not want to recognise this, concluding that the matter could have been amicably resolved had MASS and the other affected people cooperated.

According to the IFC's processes, the complaint was transferred to the CAO's compliance function officers to ascertain whether it warranted an audit in the event that any outstanding issues remained to be resolved. Over a year has passed and CGPL continues its business as usual. The only new development has been that, on July 27, 2012, the CAO compliance function's appraisal report concluded that a number of issues raised by MASS merited further enquiry. A fresh set of terms for an audit is in the process of being finalised.

Amongst other things, the IFC will now address issues that relate to whether due diligence was carried out by it in reviewing CGPL's environmental and social assessments; whether it adequately considered the cumulative impact of other industries in the area; whether enough community support had been provided; and whether its policies had been correctly applied to the fishing settlements and their activities. From the terms laid out for the audit, this appears more like an internal reflection exercise by the IFC of its own processes. The question remains whether it will have any bearing on the financial support rendered to CGPL. And, critically, continuance of the thermal power plant in the area.

(Kanchi Kohli works and writes on environment governance issues and is based in New Delhi)

Infochange News & Features, August 2012