International banks lobby for Lafarge

Amounts to influencing ongoing Supreme Court case, say activists

By Ankur Paliwal
Published: Saturday 15 May 2010

International banks that funded French company Lafarge’s cement factory in Bangladesh are putting pressure on the Indian government to allow the company to continue mining limestone in Meghalaya. The limestone was being quarried from East Khasi Hills and transported via a conveyor belt to the Lafarge Surma Cement Plant in Sunamganj district of Bangladesh. The Supreme Court had stayed the mining in February this year on a petition by local residents.

In a letter dated March 8, four donor banks including International Finance Corporation (ifc) of the World Bank and the Asia Development Bank (adb) urged the Union finance ministry to help Lafarge obtain final forest clearance permit for the project saying they have provided US $157 million loan and equity financing for the project. The letter said the project provides “compelling economic and social benefits to remote and less developed regions of both countries.” The letter further said that all necessary authorizations had been obtained for the project but that in 2007 the mining area was reclassified as forestland which required fresh environmental clearance.

A Lafarge spokesperson said the mining area is a deemed forest where non-forest activities are allowed subject to conditions that it is ready to comply with.

But the petition on which the apex court granted stay had alleged the company obtained clearance by showing the mining area as rocky region though it was in the middle of a forest (see ‘SC upholds mining ban on Lafarge’, Down To Earth, April 16-30, 2010).

Shefali Sharma, former South Asia coordinator of the Bank Information Centre in Delhi, an ifc watchdog, criticized the banks saying Lafarge had violated the indigenous people’s policies of both ifc and adb. The company failed to submit surveys and reports related to resettlement of local tribal people to the banks before and after land acquisition and the banks never bothered to find out if Lafarge was implementing the project properly, said Ramananda Wangkherirakpam of North East People’s Alliance. He said mining has destroyed the local economy.

The government too wants the stay vacated and the Supreme Court has left it to the Union Ministry of Environment and Forests (moef) to take the final call. During a hearing on April 12, the court gave the moef two weeks to decide on an expert committee report of April that said Lafarge was complying with environmental norms.

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