Thursday, May 12, 2016

Dawei locals launch campaign against Chinese oil refinery plans

Myanmar Times  By Nick Baker and Su Phyo Win   |   Wednesday, 11 May 2016

Tizit beach does not seem like the site of a multi-billion-dollar industrial showdown.

This palm oil plantation owned by military-run Union of Myanmar
Economic Holdings Limited is planned as the site of the country’s
biggest oil refinery, behind Tizit beach near Dawei.
Thiri Lu/ The Myanmar Times
This quiet stretch of coast just south of Dawei is today used mostly for swimming and fishing by local villagers or the occasional tourist (see related story).

But the northern area of the bay is set to become part of a Chinese plan to build Myanmar’s largest oil refinery – which controversially received approval in the final days of former president U Thein Sein’s administration.

The estimated figure of US$3 billion would rank it among the biggest foreign investments for the country but an investigation by The Myanmar Times has found the development remains cloaked in uncertainty and confidentiality, with many residents and businesses excluded from a process that looks set to drastically impact their lives.

The project is due to be built by Chinese developer Guangdong Zhenrong Energy Co. It will be the first oil refinery the commodity-trading company has built.

The company has a 70 percent stake in a consortium along with military-linked Union of Myanmar Economic Holdings Limited, state-owned Myanma Petrochemical Enterprise (MPE) and Yangon Engineering Group, controlled by Htoo Group.

Material obtained from the Chinese company shows the plan includes an offshore site directly in front of Tizit beach, pipelines that cut through villages and the refinery itself on nearby land owned by Union of Myanmar Economic Holdings Limited.

Villagers claim that despite the scale of the project, there has been very little information, let alone consultation, from the company.

Many residents in Hnyin Maw village face relocation if construction goes ahead. At a small community meeting, everyone in attendance was vehemently against the refinery.

“We won’t relocate from this area even if they try and force us to go,” resident Daw Than Nwe said, arguing the process would severely impact community ties.

Fellow resident U Mg Mg Aye, who is also vice president of the Dawei Nationalities Party, was especially vocal in his criticism.
“It will severely harm the environment in a region where we mostly work in fishing and farming,” he said.

Younger resident Ko Han Myo Swan told the meeting that it was time to reach out to the new National League for Democracy-led government about their concerns “as soon as possible”.

The mood was similar in nearby Tizit village, which also faces relocations. Here, store owner U Kyaw Zwar said the lack of information meant he and fellow villagers were forced to do their own research into the impact of the project which he said will be “harmful”.

Tizit village “relies on the fishing industry”, 72-year-old U Myint Soe added.

“We heard that the pipeline from the refinery will cross our village and our fishing area will be affected,” he said. “If they force us to relocate … my children will leave school and go to Thailand as migrant workers,” he said, on the point of tears.

Misinformation and contradictory statements were heard across surrounding villages. Some thought work was due to begin as early as June. Compensation was discussed but no one knew exactly how much. Job opportunities at the oil refinery were seen as an impossibility as villagers “don’t even know how to type”. Health concerns were especially prevalent.

As a result more than 2000 people from six nearby villages have so far signed a petition calling for the project to be scrapped.
“The community has the right to say no to such a project which will impact their future development,” said Ko Thant Zin of the Dawei Development Association, which is facilitating the petition.

Guangdong Zhenrong Energy Co says the majority of interactions with villagers around Dawei had been outsourced to Resource and Environment Myanmar, a consultancy.

When presented with villagers’ concerns by The Myanmar Times, Guangdong Zhenrong Energy Co indicated that there would be an increased effort to communicate with villagers in future.

Further emphasis would be made to answer villagers’ questions and explain the professional opportunities that will be available to them through the project.

But equally concerned are investors behind the planned Mandolis Resort, an eco-resort being built directly behind Tizit Beach.
The resort had been under construction since November 2015, with the first stage scheduled to open later this year.

“It was a big shock. There was no warning,” said investor Nawar Al Bitar of the news that the project had been approved by the outgoing government in late March. Work at the eco-resort has since been stopped temporarily.

Mr Al Bitar said the oil refinery would deal a blow to tourism not just on Tizit beach, but around the region.

“A tourism industry and an oil refinery cannot exist beside each other on the Dawei peninsula. It’s one or the other,” he said. “Otherwise tourists will now think twice about coming here.”

This concern is echoed by other tourist ventures across Dawei.
U Aung Soe Oo, Secretary General of Myanmar Hotelier Association in Tanintharyi, said the number of tourists had “surged” over recent years.

Numbers from the Tanintharyi Region Department of Hotels and Tourism showed that more than 331,000 tourists arrived in 2015 from border crossings alone, up from around 269,000 in 2014.

“Since this tourism boom, migrant workers have returned to the region and started their own small businesses,” U Aung Soe Oo said.
But he and others in the association worry that the oil refinery will “spoil” the image of Dawei.

Neither the Myanmar Hotelier Association in Tanintharyi or the Tanintharyi Region Department of Hotel and Tourism had received any information about the project from the company.

The growing controversy has fallen front and centre for the new NLD chief minister of Tanintharyi Region, Daw Lae Lae Maw. But still confusion reigns.

“I don’t know about the agreement with the previous central government and the companies throughout the region,” she said.
Daw Lae Lae Maw intends to “scrutinise” this case and listen to the concerns of local villagers.

“I think if the community keeps complaining about the project … it shouldn’t begin,” she said.

A number of stakeholders said that it was not only the villages and pristine location that made the oil refinery questionable. The geography appears to be far from ideal for a development such as this.

Between the beach and oil refinery is a section of jagged hills that Guangdong Zhenrong Energy Co has confirmed that they will need to tunnel under.

One industry observer, asking not to be named, questioned the logic of building here when much more suitable sites exist nearby, including the Dawei special economic zone.

“One can only assume that the location has been decided not on the basis of Myanmar’s national or economic interest, but because Union of Myanmar Economic Holdings is seeking to turn the land on which their palm oil plantation stands into something more lucrative,” the industry observer said.

Other industry analysts question the economic viability of the refinery, saying it is too small to compete with other mega-refineries in south Asia.

Meanwhile the project’s potential effects on the environment are shrouded in uncertainty.

Guangdong Zhenrong Energy Co confirmed that it had submitted the required Environmental Impact Assessment (EIA) paperwork to the government last year.

However key stakeholders say they have not received it for review. This appears to put the company in violation of the new 2015 Environmental Impact Assessment Procedures which state EIAs need to be circulated “to civil society, project-affected persons, local communities and other concerned stakeholders … not later than 15 days after submission”.

Non-compliance would mean the company faces “penalties and other administrative punishment”.

The Myanmar Centre for Responsible Business, which recently published a report on disclosure of EIAs in Myanmar, has searched without success for the refinery’s paperwork.

“An EIA should include proper public disclosure and consultation at all stages of the process,” said director Vicky Bowman. “To my knowledge, none of this has been done.”

This apparent lapse comes as Chinese Foreign Ministry spokesperson Lu Kang this week renewed a call on Chinese companies operating in Myanmar to strictly follow local laws.

“The Chinese government has consistently demanded that Chinese companies investing abroad respect the laws and rules of the host nation, and fulfil their responsibility and obligation to society, including paying attention to protecting the environment,” Mr Lu said.

Challenges as well as opportunities surrounding this development are nothing new for Chinese companies, however.
China has a long record of building large-scale infrastructure projects in developing countries or in countries it sees as strategically significant, both for economic and security reasons.

Adjunct associate professor Jonathan Bogais, a specialist in Southeast Asian affairs at the University of Sydney, said this case was less an economic investment and more a move to cement regional influence.

“Other countries, including Japan, are keen to invest [in that area], so there is a priority for China. This is about strategic control, more than profits.”

So far the NLD government has remained quiet over whether it will allow the oil refinery to go ahead. For the people of Dawei, and more broadly in Myanmar, it is emerging as an early test of the new government, caught between respecting the wishes of its electorate and the geopolitical realities of dealing with its powerful neighbour.