Dawei Project: Its Development and Impacts and People’s Struggles

โครงการทวาย
“Milestone 0” Starting Point of Deep Sea Port and Dawei Special Economic Zone.

For years, the Thai government and the government of the Union of Myanmar have cooperated to push the Dawei Deep Seaport and Special Economic Zone Project (Dawei Project). Agreeing to the development of transport connection between Dawei and Laem Chabang Deep Seaport on Thailand’s eastern coast, parties to the agreement claimed benefit both countries would receive. That is, Myanmar would benefit through the development of Dawei Special Economic Zone (SEZ), while Thailand would benefit through further development of the country’s eastern seaboard. More broadly, on the ASEAN level, Dawei will be a point of connection of trading, manufacturing and transport routes of the Southern Economic Corridor. Italian-Thai Development Public Company Limited (ITD), the project developer, was licensed to build and operate the project through 75-year land-lease over an area of 250 square kilometers (approximately over 150,000 rai or 10 times bigger than Map Ta Phut Industrial Estate), and construct 132 km. Road-link from Dawei project to Thailand’s Kanjanaburi province at Phu Nam Ron border checkpoint.

The government and private sector, as well as certain media, often commend Dawei Project, referring chiefly to its economic benefit. Barely discussed or even little known are natural resources, environment, and way of life of the people in the local area. Characteristics of development activities within the SEZ will be similar to those in Map Ta Phut which comprises petrochemical factories, oil refineries, gas separation plant, coal power plant etc. Dawei may hence face a destiny similar to Map Ta Phut.

Project Background and Development:

ITD had received concessions to fully develop the Dawei project. During 2010-2013, it then set up the Dawei Development Company Limited (DDC), its joint venture with Max Myanmar, to undertake the management of the SEZ. ITD and Max Myanmar hold 75% and 25% of DDC shares respectively. ITD holds these shares via its subsidiary company – Dawei Development Company Limited (BVI) (DDC-BVI) registered in British Virgin Island. ITD holds 75 % of DDC-BVI shares through its one other subsidiary.[1]

Around this time period, ITD set up more than 22 subsidiaries aboard to both raise the capital for and operate Dawei Project. These subsidiaries, all connected to Dawei Project, are registered in Hong Kong, BVI and the Republic of Mauritius.[2]

At this time around, ITD began the construction of parts of the project; namely, the project’s temporary access road to Phu Nam Ron border checkpoint (Thailand’s Kanchanaburi province), clearance and allocation of land in designated SEZ, two small ports to facilitate transportation of construction equipments, small-scale power plant and resettlement village.

In November 2013, ITD’s concession to develop the project expired and seemingly little progress in the construction was realized. Earlier in July 2012, its partners such as Max Myanmar had withdrawn its investment from DDC. [3] ITD itself failed to raise the capital [4], resulting in Myanmar government’s loss of confidence in the project development by ITD. For this reason, Thai and Myanmar governments stepped in to put it back on track by setting up the Special Purpose Vehicle (SPV) named Dawei SEZ Development Co., Ltd. to drive the project ahead and serve as lead coordinator to persuade investors to invest in Sub Purpose Companies (SPC) as per the new framework agreement co-signed by Dawei SEZ Management Committee.[5]

This is to facilitate investment in 7 key components namely: deep seaport, industrial estate, energy, water resources, telecommunications, roads and railways to Thailand border. Later in late 2015, the government of Japan became involved in Dawei Project through holding shares of the company with Thai and Myanmar governments.[6] Nevertheless, ITD still takes the duty of maintenance work for the already-built infrastructures and will recover costs already spent from the SPV.[7] Hence, ITD has since lost status as the developer of the project in full scale.

After the project was taken over by the two governments, it was divided into two phases i.e. initial phase and full phase. In the initial phase, ITD has the opportunity to return, once again, as the developer. This time, ITD cooperates with Rojana Industrial Park Public Co. Ltd. to set up Myandawei Industrial Estate Co. Ltd. registered in Myanmar and established on June 9, 2015. ITD holds 50% shares of the company[8]

that signed concession contract with the Dawei SEZ Management Committee on August 5, 2015, granting it the right to operate the development within an area of 27 square kilometers. ITD receives another 8-square kilometer area to develop into the industrial estate, adding up its land property to 16,000 rais (1 rai = 0.16 hectare). The contract period for the development lasts 8 years. The investment is worth 1.7 billion US Dollars (or 59 billion baht). Concession period lasts 50 years and is extendable for a further 25 years.

However, change in political tide after in historic (November 8,) 2015 election and the National League for Democracy has since been the ruling party, has caused all large-scale projects to have been suspended for review. To date, there has been no further progress in Dawei Project. The government of Myanmar is currently reviewing its feasibility. Thai government earlier offered a 4.5-billion-baht loan for Myanmar government to construct 2-lane road-link to the project site.[9] The latter has not yet agreed to receive it.

Impacts irrecoverable

For more than 7 years has development Dawei Project (commenced in 2010), affected a large number of village people in the project area and its vicinity. A report by the Dawei Development Association (DDA) illustrates the impacts that have materialized in 4 respective areas.[10]

1) Deep Seaport and Industrial Estate (within SEZ)

In 2010, ITD entered the area and began construction activities in coastal lands that are parts of the SEZ without prior notice to the village people. In 2011, an official announcement was made that 19 villages are subject to being resettled to make way for the SEZ. Additional 3 villages were unofficially told to be removed adding the number of affected villages up to 22. Among these villages are, for examples: Htein Gyi village, Kha Maung Chaung village, Lae Shaung village, Mayin Gyi village, Mudu village, Pagawzon village, Paradut village, Wet Chaung village, Yalaing village, and Bawar village.

A damage survey conducted by DDA found that lands of village people were lost, many houses dismantled and paddy lands partitioned and messed up by road construction turning such lands uncultivable due to landslides, flooding and clogging waterways. Some mangrove lands were damaged, certain animal species in these lands became rare or disappeared, affecting local food security and way of life of the people in general. In some areas, mountains were blasted away, hence soil came down, filled up paddy fields and blocked waterways. Besides, wastewater from the project campsite and pollutants from heavy types of machinery contaminated rivers and streams, hence village people could hardly dependent on them for their water supplies.

2) SEZ nearby areas

Mostly, these are neglected villages that do not appear on the official list of affected villages put together by the company. These areas can be divided into 3 parts:

  • Small port area – village affected is Ngapidut village situated on a coast. More than 70 households lost lands to make way for a coastal road and small port development. The road itself is an access to the sea to transport construction equipment. Their lands have been lost since 2010 despite the fact the entire village is outside of the project site.
  • Resettlement area – Bawar village was designated a resettlement land to accommodate those to be removed from other villages resulting in the people of บาวาร์ themselves to have lost their own lands. 480 houses were later built in this area.
  • Rock mine area – The hill in Paradut village was blown up to provide rock for construction. In addition, 28 households in Mayin Gyi village lost their lands in 2010 which became parts of the rock mine area.

 

Lands in these areas are largely floodplain, relevant for agriculture. Most affected people in respective villages run paddy farms, salt farms, garden plant farms and fisheries.

DDA’s survey concluded: the project construction impacted the village people who lost farmlands and houses including loss of natural resources. The construction cut off water to agricultural lands. Paddy fields were expropriated, people prohibited to build houses or carry out livelihood activities. Some villages suffered from dust from rock mine.

3) Road-link Project Areas

Road-link comprises highways, railways, oil and gas pipelines and high-voltage transmission lines to connect the Dawei SEZ to Thailand.  It consists of 2 routes: firstly approximately 130 km. “temporary access road” from SEZ to Phu Nam Ron completed and currently opened; secondly the 8-lane highway plus transmission lines, oil-gas pipelines and railways.

Most villages that had lands expropriated are situated in highland areas. The people are mostly Karen ethnic whose settlement dates centuries. They run chiefly plant garden farms to earn income. Main plants include Betel nut and rubber. Some households practice rotational farming to produce rice. Over 94 % of the people own some lands. Besides, the people raised livestock and did freshwater fishery. Villages affected include, for examples, Kalatgyi village, Ka Htaung Ni village, Myitthar village, Pyin Thar Taw village, Kalonethar village, and etc.

4) Dam reservoir area

Reservoir, intended to supply water for SEZ, is located on a hill area northeast of the project site. It will flood an area of 7-12 square kilometers, which is home to 182 households of Kalonethar village. About a thousand people who live here will be severely impacted by the reservoir development. The impact on these people will even more as a result of the road-link development.

DAWEIINLOVE-3
Abundant paddies of Dawei  

Governance Deficit for Investment and Development

Aside from the physical dimension already discussed, the problem of Dawei Project also includes the lack of good governance and disregard of human rights. For instance, there was no prior environment and social impact assessment, no disclosure of relevant information and no prior-consultation with the potentially affected people. In regard to land expropriation, the affected people did not receive sufficient information re: both the project development and potential impacts on their community and way of life especially those who would be resettled. Activities such as meetings held by the government and the company did not reach out to most of the potentially affected. There was no people’s participation in the decision making. The decision was made without the people’s consent. Very few people had ever received some publications about the project. Most people received the information through word of mouth and news reports in local media. Besides, there was no clear standard re: compensation and remedies.[11]

DDA’s report indicates that 63% of the informants said that government officials and/or company staff had never revealed information re: compensation, both how it was determined and the compensation process. Some people might have already taken the compensation. However, the problem continues. This is due to delayed payment and payment not in the whole sum agreed to be paid. Some still await the payment to be made. Among those taking the compensation money, only a few were provided with proper financial documents in which the amount of payment is clearly specified. [12] As for the resettlement, only one household later moved in the resettlement area in Bawar village where the company had built 480 houses. This is mainly due to the people’s lack of confidence in the quality of materials and durability of the houses following the storm incident that brought down roofs of several houses. Besides, the resettlement area does not have adequate land for farming and land price in this area is higher than the compensation rate.[13] Currently, however, no one lives in this resettlement anymore.

Movements of the people and CSOs in Dawei

A number of impacts started to become clear at time the people in designated industrial estate and along the road-link faced land expropriation or were forced to change land-use without prior notification and consultation. This, combined with the lack of clarity re: compensation for losses, became a factor that drive the people in Dawei city to mobilise opposition to the project. Their opposition has since 2011 gone on in various forms and evolved over time.

On December 15, 2011, DDA held a press conference in Yangon launching a statement of concerns about the project that threaten to displace over 30,000 local people from 19 villages including academic and religious places. DDA urged the government to adhere to “Green Development” and give priority to the people in the area. One month later, DDA and the people of Dawei together held a campaign to oppose a planned coal-fired power plant that would be built in SEZ on Maung Magan beach and urge the kind of development that is friendly to the environment.[14]

Civil society organizations (CSOs) in Thailand also paid attention to this controversial project. That is, for instance, on January 5, 2012, 18 Thai CSOs expressed their joint concerns that the project’s environmental impacts may harm the people in the local area, and pose human rights violation. Later in August, Thai CSOs held a press conference to question Thai government and the company about the ethics and governance and expressed disagreement to the government’s involvement in the project and the use of public money to support it.[15]

As for the people in the local area, their movement has been continuous. Even when informed sources began to say that ITD’s concession would expire on September 20, 2012; a gathering was held at Kalonethar village which intensifies their opposition to the project. The people who would be impacted by the reservoir construction pressed their claim on 4 points earlier mooted by President Thein Sein re: foreign investment, namely; 1) protect the people’s interest, 2) protect dignity of the country, 3) protect national sovereignty and 4) foreign investment being friendly to the environment. Besides, the Karen ethnic people who were affected by road-link construction raised a sign saying “Stop Another MaP Tha Phut in Dawei”. Later in November 2012, ITD entered Kalonethar village and talked to the people about dam construction, but faced banners that say: “No Dam” and “No Resettlement”. One month after that, the people submitted to the government a statement of the refusal of resettlement in a government-held forum for the project to be officially explained. [16]

Aside from campaign within Myanmar, Dawei CSOs extended their action cross-border. In March 2013, for instance, DDA submitted a letter of complaint to Thailand National Human Right Commission (TNHRC) re: concerns about human rights and community rights violation associated with Dawei Project. According to DDA, the company carried out the project development regardless of human rights principle. Over 32,000 village people were to be resettled and would not receive fair compensation. Throughout September-November 2013, the people in respective affected areas held campaign activities that more clearly illustrated their grievances. For example, road blockade was held to protest against ITD in Thabyu Chaung village for unfairness and non-transparency re: compensation payment. Road blockade also occurred on Road-link Km no. 37-38, including seizure of company’s vehicles to express the people’s dissatisfaction about the compensation not being paid for losses of their farmlands.

Movement and campaign of the people gradually declined after ITD’s concession contract expired. Yet, the intergovernmental cooperation emerged to take control of the project (with the participation of Japanese government), hence the project development was not discontinued. Moreover, in 2015, ITD was once again granted a concession to develop the project though only during the Initial Phase. This will likely cause the movement and campaign against the project to rise again.

Investigation of Human Rights Violation and Thai Government’s Effort

The human rights violation complaint by DDA led to the investigation by TNHRC. Subsequently, an investigation report was completed with recommendations for problem resolution forwarded to Thai government and concerned authorities and entities. Among the recommendations are: ITD should consider compensation and remedies for damages that result from its operation, the people should be involved in all stages of the compensation process until they receive fair compensation payments. Besides, the government, Ministry of Foreign Affairs, Ministry of Commerce and other concerned authorities should consider establishing relevant mechanisms and identify missions to be undertaken to supervise Thai investment aboard taking into account respect for fundamental principle of human rights as laid down in the Guiding Principles on Business and Huma Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework.[17]

Eventually, a Thai Cabinet Resolution was made on May 16, 2016 [18] in accordance with Ministry of Foreign Affairs’ proposal founded on TNHRC’s recommendations re: Thai investment aboard. As for the case of Dawei Deep Seaport and SEZ project, the cabinet resolution requires that Terms of Reference for any future contract or agreement as well as concerned regulatory or private-sector-support mechanisms take into consideration “respect for fundamental principle of human rights” and that more measures be devised for such principle to be implemented in a serious manner. As for Ministry of Commerce, promoting business entrepreneurs, awareness raising on such issue as “social responsibility” is inserted in its training/seminar programs. Also, “good governance awards” is given on provincial and national level as suggested by Ministry of Foreign Affairs. The cabinet resolution is the first attempt ever on the part of authorities to address transboundary human rights issue. However, such resolution has yet to be put into practice. Some progress is being realized in the formulation of the National Action Plan on Business and Human Rights by the Rights and Liberties Protection Department under the Ministry of Justice. The draft action plan, scheduled to come out in 2018, remains to be seen.

 

………………………………………………

References

[1] Italian-Thai Development, Annual Report 2011,

[2] Italian-Thai Development, Annual Report 2012

[3] Towards Ecological Recovery and Regional Alliance/Foundation for Ecological Recovery, From Map Ta Phut to Dawei: Development or Cross-border Destruction, 2013.

[4] Manager Online, Break “Dawei” Deal:  Myanmar Propose New Joint Venture to Takeover ITD”, http://www.manager.co.th/QOL/ViewNews.aspx?NewsID=9560000001026

[5] Italian-Thai Development, Financial Report 2013.

[6] Neighboring Countries Economic Development Cooperation Agency,  Signing Shareholder Agreement Dawei SEZ Development Com. Ltd. http://www.neda.or.th/home/news-detail.php?id=31&item=147

[7] Italian-Thai Development, Financial Report 2013.

[8] Myandawei Industrial Estate Company Limited, About MIE,  http://www.daweiindustrialestate.com/page_a.php?cid=85&cname=About%20MIE

[9] Prachacart Thurakij, Cabinet Approve 4.5 Billion Baht Interest-free Loan for Myanmar to Build Roads in Dawei SEZ, https://www.prachachat.net/news_detail.php?newsid=1430998456

[10] Dawei Development Association, Voices from Community: Concerns about Dawei SEZ and Related Projects, DDA 2014.

[11] Ibid.

[12] Ibid.

[13] Ibid.

[14] Ibid.

[15] Ibid.

[16] Ibid.

[17] National Human Rights Commission, Investigation Report No. 1220/2558, November 23, 2015.

[18] The Office of the Secretary-General to the Cabinet, Concluded results of the consideration of the implementation as per the report of the consideration of the complaint that has policy recommendations re: community rights: the case of Dawei Deep Seaport and SEZ project, Myanmar, by Italian-Thai Development PLC wherein Thailand has co-signed the Memorandum of Agreement for the project development that involve acts of violation of the rights of Dawei people, May 17, 2016.

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