Mekong Watch

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November 10, 2016

FactSheet

ProjectName: Myanmar/Burma：DaweiSpecialEconomicZoneDevelopmentProject

ProjectOverview: TheDaweiSpecialEconomicZone(SEZ)DevelopmentProjectisanenormousplantobuildwhatcouldbeamongthelargestindustrialzonesintheworldifitgoesaccordingtoplan.ItisprojectedtobecomeahuboflogisticalactivityintheGreaterMekongSub-region(GMS),withadeepseaporttobebuiltjustbesidetheSEZ.AlsowitharoadandrailwaysbuilttolinkthedeepseaporttotheMyanmar-Thaiborder,connectingtoroadsandrailwaysbeyond,itistocreateanalternativetraderoutereplacingthetraditionalsearoutethatcrossestheMalaccaStraits.TheplannedsizeoftheSEZisabout20,000hectares,equivalentto1/3thesizeofLakeGeneva,andapproximately8.3timesthesizeofthealreadyproblem-riddenThilawaSEZontheoutskirtsofYangon.InfrastructurerelatedtotheDaweiSEZincludesadeepseaport,roads,railways,reservoirs,powerplants,andgaspipelines.Thesewouldreplacevillages,someofwhichareindigenous,aswellasplantations,ricefields,rotationalfarmingfields,rollinghills,rivers,beaches,mangroveforests,andecosystems.Thesesupportnotonlypeople’slivelihoods,butincludeareaswithendemicandendangeredspecies.Itisestimatedthatpeoplefrom20to36villageswouldbeaffected,comprisingapproximately4,384to7,807households,or22,000to43,000people.1 Inaddition,peoplelivinginurbanandsuburbanareasofDaweiDistrict,withapopulationof493,576(2014Census)wouldbesubjectedtonegativeimpactsfromtheoperationofthepetrochemicalcomplexandotherfacilities.Thenumberofaffectedpeoplewouldpossiblyincreaseasrepatriationofrefugees(mainlyethnicKarenwhofledtoThailand)isexpectedtostart. TheprojectformallystartedinMay2008whentheMyanmarandThaigovernmentssignedanagreementtobuildtheDaweiSEZ.In2010,a60yearconcessionwasgrantedtoItalian-ThaiDevelopmentPlc.(ITD),aThaicompany.WorkhasbeencarriedoutinthenameofDaweiDevelopmentCompanyLtd.,ajointventurecompanyownedbyITD(75%)andMaxMyanmar(25%).InJuly2012,however,MaxMyanmarwithdrewitsinvestment.Afterhittingfinancialdifficulties,theprojectwasstalledandinNovember2013,concessionrightsweretransferredtoaSpecialPurposeVehicle(SPV),jointlyowned(50%each)bytheMyanmarandThaigovernments.Theprojectresumedagain,especiallyaftertheJapanesegovernmentofficiallyjoinedtheprojectinJuly2015,signingaMemorandumofIntent(MoI)2 withMyanmarandThailand. InDecember2015,JapanBankforInternationalCooperation(JBIC)signedanagreementtoco-shareinSPV.JapanjoinedthisprojectatanearlystagewiththeintentionofcreatingopportunitiesfortheJapanesebusinesssectortoparticipateininfrastructureprojects. 3WorkpreviouslycarriedoutbyITDandMaxMyanmarhasalreadyledtomanyproblems,suchasforcedeviction,intimidationbyofficialstogainconsentfortheproject,meaninglessconsultations,andflawedcompensationprocesses.

1 DaweiDevelopmentAssociation(DDA),September2014,VoicesfromtheGround:ConcernsOvertheDaweiSpecialEconomicZoneandRelatedProjects,p.5.http://www.ddamyanmar.com/wp-content/uploads/2014/10/Voice-from-the-Ground-Engonline-1.pdf2 “MemorandumofIntentamongtheGovernmentofJapan,theGovernmentoftheRepublicoftheUnionofMyanmarandtheGovernmentoftheKingdomofThailand,ontheCooperationfortheDevelopmentofDaweiSEZProject”http://www.mofa.go.jp/mofaj/files/000088498.pdf3 JBIC,December15,2015,PressRelease“SigningShareholdersAgreementforEquityParticipationinDaweiSEZDevelopmentCompanyLimitedinMyanmar”

LocationofDawei(Source:MIEwebsitehttp://www.daweiindustrialestate.com/page_a.php?cid=67）

Mostoftheseproblemsremainunresolved.LocalgroupshavebeenwarningJapanthatifitdecidestojointhisproject,thenitmustbeaccountableforthealreadyexistingenvironmentalandsocialimpactsandhumanrightsviolations.Inaddition,localpeoplearevoicingconcernsandapprehensionregardingfurtherdevelopment. ProjectLocation: -CoastalareainDaweiDistrict,ThanintharyiRegion,includingNabuleBeach.Thelandsizeisapproximately200squarekm(20,000ha),whichisaboutthesameas1/3ofLakeGeneva,thesecondlargestlakeincentralEurope.-Locatedabout30kmnorthofDawei,thecapitalofTanintharyiRegion.Itisabout600kmfromYangonandaround350kmwestofBangkok.Projectproponents:- Governments:Myanmar,Thailand,andJapan

DaweiSEZDevelopmentCompany(SPV)： EstablishedinJune2013byMyanmar’sForeignEconomicRelationsDepartment(FERD)andThailand’sNeighboringCountriesEconomicDevelopmentCooperationAgency(NEDA).JapanBankforInternationalCooperation(JBIC)joinedonDecember14,2015.Atpresent(Dec.2015)allthreeownequalsharesofaround33.33%,withanoverallbudgetofnomorethanBt100million.4

TransitionofProjectProponents:2008-2013

DaweiDevelopmentCompanyLtd.,ajointventurecompanyownedbyITD(75%)andMaxMyanmar(25%).ConcessionrightsweregrantedtoITDin2010andimplementationoftheprojectbegan.InJuly2012,MaxMyanmarwithdrewitsinvestmentfromDaweiDevelopmentCompanyandITDbecamethesoledeveloper.

2013.11ITDlostconcessionrights.ConcessionrightsweretransferredtotheSpecialPurposeVehicle(SPV),DaweiSEZDevelopmentCompanyLtd.,jointlyownedbyThailandandMyanmargovernments(50%each).

2015.4 MIE(MyandaweiIndustrialEstateCompanyLtd)wasestablishedasajointventurebetweenITDandROJANA.

2015.8ITD,RojanaIndustrialParkPublicCompanyLtd.,andLNGPlusInternationalCompanyLtd.weregrantedconcessionagreementsfortheinitialphaseoftheproject.

2015.12JapanBankforInternationalCooperation(JBIC)joinedDaweiSEZDevelopmentCompanyLtd..

ProjectplanmapbyITDdatedSeptember2,2015.(Photo:October2015,5kmestimatedmeasureisbyMekongWatch)

4 ‘JapanallowedinDaweiSPV,’TheNation,December9,2015.

MainProjectComponents: -Transport(road/railway)ofabout130kmlinkingDaweiSEZandMyanmar-Thaiborder,whichconnectstoaroadtoBangkok-Industrialestatewith:

-heavyindustriesincludingsteelmillandfertilizerplant-petrochemicalcomplex-lightindustries-logisticsandtransportationindustries-oilandgasindustries-coalfiredpowerplant,hydropower

-Deepseaport-Smallport-LNGTerminal-Waterreservoir(s)-Telecomlandline-Newtownshipandcommercialsectors-ResettlementvillagesfordisplacedpopulationsTheproject’s“InitialPhase”involves5:- 2-lane6 road-link(DaweiSEZtoMyanmar-Thaiborder’sThiKhi–Phu

NamRonCheckpoint,about130km)- Initialindustrialzoneof27squarekm7 - Smallport- LNGterminal- Smallpowerplants(Gas-fired8)- Smallwaterreservoir(withwatertreatmentplant9)- Townshipplanforemployees- TelecomlandlineProblemsfromthepast1,10：1. Destructionofnatureandlivingenvironments

E.g.:Avastareaofmangroveforestswasdestroyed.Anenvironmentwherefishcouldbreedandgrowalsosupportedpeople’slivelihoods.Ithasbeenlost. E.g.:Aroad-linktoThailandhasscrapedoffmountainsurfaces,inducinglandslides.Theroad-linkfragmentspathsusebypeopleaswellascorridorsusedbywildanimals,includingelephants.

2. EnforcedevictionE.g.:ThevillageofCharKahn,closetothestartingpointoftheroad-link,wasevicted.Threevillagerswhorefusedtomovewereimprisonedforamonthandtheirhousesweredestroyed.

3. DestructionoffarmlandandlivelihoodE.g.:Tomakewayforroadconstruction,ITDdestroyedhousesinYawDutTharVillagewithoutanyconsultationwiththevillagers.Thevillageslosttheirmainlivelihoodofsaltmakingandweremovedwithoutanycompensation.Theynowstruggleasdailywagelaborers.E.g.:Wastefromaquarrypouredintoabout195acresofpaddyfieldsinParadutVillage,making43farmersunabletocultivate.AlthoughITDmadeasmallweirasacountermeasure,itcutoffastreamwhichwassupplyingwatertothepaddyfields.

5 “RegionalIntegrationthroughDaweiDevelopmentProject”presentationattheMekong-FiveEconomicForumaspartofthe7thMekongJapanSummitinTokyoonJuly3,2015,byMr.ArkhomTermpittayapaisith,DeputyMinisterofTransportandSecretary,GeneraloftheNationalEconomicandSocialDevelopmentBoardofThailand.6 AccordingtoITD’splanatpresent(July,2016)4-laneisplanned.7 AccordingtoITD’splanmap,theInitial27squarekmIndustrialZoneisdividedintoZonesA,B,andC(7squarekmeach)andZoneDwith6squarekm.8 MIEwebsitesitedonJuly8,2016.http://www.daweiindustrialestate.com/page_a.php?cid=86&cname=ProjectOverview9 Theprojectplanmap(datedSeptember2015)byITDindicatesthatasmallwaterreservoirwillbeaccompaniedbyawatertreatmentplant.10 CompiledbyDDAandlocalvillagers,March2016,SummaryofcasestudiesonhumanrightsviolationsinDaweiSpecialEconomicZoneArea.http://www.mekongwatch.org/PDF/daweiHRviolation_case_study_ENG.pdf

Theroad-linkconnectingDaweiSEZplannedareaandMyanmar-Thaiborder.Thereareplanstoexpandthisintoa4-lanehighway.Railway,electricitylinks,oilandgaspipelinesareplannedtofollow.(Photo:October2015)

Landthathasbeenclearedforinitialindustrialzone. (Photo:October2015)

E.g.:AroadconstructedbyITDtotransportrocksfromthequarryhasblockedstreams,resultingindestructionofsomepaddyfieldsinMayinGyiVillage.Villagerscannotgrowpaddythereanymore.E.g.:Toconstructaccessroadsforaroadlink,hillsideswerescrapedandsoilwaspiledhaphazardlybesidetheroadandleftthere.Wheneverthesepilesofsoilsslidedown,plantationslocatedbelowaredamaged.Therehasbeennocompensation.

4. UnclearandinsufficientcompensationE.g.:Villagersbetweenthe8and10kmpointsoftheroad-linkwerethreatenedbyITDthattheywouldgetnothingiftheydidnotagreewithwhatwasbeingofferedbythecompany.Manyfelttheyhadnochoicebuttoaccepttheoffer.

5. LifeatrelocationsiteverypoorE.g.:IntheBawarrelocationarea,thereisneitherelectricitynordrinkingwaterdespitewhatwaspromised.Fourhouseholdswererelocated,but3ofthemsoldthehousetheywereprovided,andnowonly1householdlivesthere.Thefamily’sfatherhasbeenjoblesssincerelocation,andthemotherstrugglestocollectshellsforgainingdailyincome.

6. ImproperEIAE.g.:EnvironmentalImpactAssessment(EIA),whichwassupposedtobeimplementedpriortoprojectimplementation,wasconductedaftertheroadconstructionwascompletedfortheload-linkaccessroad.Properassessmentdidnottakeplaceandimpactswerenotmitigated.

RemarksonSocialEnvironmentalImpactsandHumanRightsViolations:RespondingtoacomplaintsubmittedbylocalandThaiNGOs,theNationalHumanRightsCommissionofThailand(NHRCT)reportedtheirinvestigationresultsonNovember23,2015.11 ThereportconcludedthatprojectimplementationbyITDviolatedthehumanrightsofMyanmarpeople.ItalsomentionedresponsibilitiesoftheGovernmentsofThailandandMyanmar,whichbackedtheprojectinspiteoftheseviolations,asstillbeingunresolved.TheNHRCTexpectsthattheprojectimpactswillalsocontinueintothefuture.LocalgroupshavealertedJapanthatitmustalsotakeresponsibility,sinceitisbecominginvolvedwiththeknowledgethatthereareexistingenvironmentalandsocialimpactsandhumanrightsviolationscausedbytheprojects,whichMyanmarandThaigovernmentsandcompanieshavefailedtoaddress.12InMarch2016,anewgovernmentleadbyNationalLeagueforDemocracy(NLD)wasformed.Thoseprojectsapprovedunderformergovernmentsareunderreview.

11 TheNationalHumanRightsCommissionofThailand(NHRCT),November23,2015,ReportoftheconsiderationNo.1220/2558,Communityrights:thecaseofDaweiDeepSeaportandSpecialEconomicZoneProjectinMyanmarwhichThailandhassignedtheMoUtoco-developandithasviolatedthehumanrightsofDaweipeople(Englishtranslation).12AletterfromthreelocalgroupstothegovernmentofJapan,JICA,andJBIC,”Re:Callattentiontolocalgroups’concernsonJapan’sInvolvementintheProblematicDaweiSpecialEconomicZoneProjectandRelatedProjectsinMyanmar”http://www.mekongwatch.org/resource/news/20150810_01.html

ThisriveristobedammedinthisareatobuildareservoirtosupplywatertotheSEZ.(Photo:October2015)