The Asian Development Bank’s Accountability Mechanism Compliance Review Panel (CRP) sent an eligibility report to the ADB’s board of directors regarding the Tatas’ Mundra Ultra Mega Power Project in India after reviewing a complaint filed by Bharat Patel, general secretary of Machimar Adhikar Sangharsh Sahatan (MASS), and two MASS members, Gajendrasinh Bhimaji Jadeja and Harun Salemamad Kara. Following are excerpts from the “Report on Eligibility”:
The complaint itemized the harm allegedly done by the project to the affected persons’ livelihood, health, and environment, and attributed it to ADB’s failure to adhere to its operational policies and procedures on environmental and social safeguards. The complainants alleged that, owing to ADB’s noncompliance with its policies and procedures for environmental and social safeguards, the project has caused the following direct and material harm:
(i) Failure to conduct free, prior, broad, and meaningful consultations with communities, which prevented adequate exercise of the basic right to information and participation;
(ii) Deeply flawed social and environmental impact assessments;
(iii) Significant and irreversible loss of livelihood of fisherfolk;
(iv) Inaccessibility of fishing grounds;
(v) Lack of employment of locals;
(vi) Impact on horticulture;
(vii) Impact on groundwater;
(viii) Labor issues and social unrest;
(ix) Destruction of mangroves;
(x) Absence of cumulative impact studies;
(xi) Ash contamination and health issues; and
(xii) Risk to children’s health.
In accordance with the Accountability Mechanism Policy (2012) and its operational procedures, the CRP initially assessed the complaint and determined that it fell within the mandate of the compliance review function.
The project involves the construction, operation, and maintenance of a coal-fired power plant with a total production capacity of 4,000 megawatts (MW) on a build–own–operate basis near Tundawanda village, Mundra Taluka, Kutch district, in the Indian state of Gujarat. The power plant, with its five 800 MW units, is among the ultra-mega-power projects (UMPPs) planned by the Government of India to meet electricity supply needs in Gujarat, Maharashtra, Punjab, Haryana, and Rajasthan. The plant uses supercritical technology—it is one of the first private sector generators in India to do so—and is expected to be more environment friendly than conventional subcritical generating units. The $450 million loan to CGPL from the ordinary capital resources of the ADB is without government guarantee and is administered in ADB by the Private Sector Operations Department.
The complaint gave adequate information for determining whether the complaint is within the mandate of the compliance review function of the Accountability Mechanism Policy (2012). The CRP reviewed the complaint, the management’s response to the complaint, and relevant documents; interviewed the complainants, representatives of CGPL and relevant government officials during the eligibility mission to India; and visited some affected areas.
Prima facie evidence for noncompliance has been established for the areas listed below:
Insufficient public consultations
Public consultation requirements are stipulated in ADB’s Environment Policy (2002). In addition to the public hearing in Mundra to assess the project’s social and environmental impact (16 September 2006), public consultations were held in some villages within a radius of 10 kilometers (km) of the power plant. Moreover, about 80 families living in Tragadi bander (in the immediate vicinity of the current outfall channel of the CGPL plant) during the non-monsoon season (about 8–9 months in a year) were not consulted during the preparation of the environmental impact assessment.
Definition of project-affected area
It is probable that the project affected area (“area of influence”) has been inappropriately defined. An area within a 10 km radius of the CGPL plant was defined as the area impacted. Instead, with respect to air pollution impacts, the project’s area of influence should have been defined based on a dispersion model of air emissions. With respect to marine impact, the project’s area of influence should have been based on the affected areas determined based on a dispersion model of the cooling water and other wastewater discharges from the CGPL plant. The project affected area was defined without the use of dispersion modeling.
Environmental standards and emission levels
For ADB-supported projects, the environmental standards and emission levels are stipulated in ADB’s Environment Policy. For ADB-supported projects, the environmental standards and emission levels are stipulated in ADB’s Environment Policy, and Operations Manual. Both documents require the use of standards and approaches laid out in the World Bank’s Pollution Prevention and Abatement Handbook (PPAH) of 1999.
(a) Cooling water discharge: For new thermal power plants, PPAH requires that the temperature increase of the cooling water discharge over the ambient air water temperature does not exceed 3 degree C. The CGPL power plant operates with a Gujarat Pollution Control Board (GCPB) permit which allows discharge of the cooling water at a maximum temperature increase of 5 degree C above the ambient water temperature. Representatives of CGPL confirmed that the increase of the discharge water temperature the 3 degrees C specified in the PPAH. The company is presently seeking an amendment of the GPCB permit for a more lenient cooling water discharge requirement which would allow a maximum discharge water temperature up to 7 degrees C above the ambient water temperature. The CGPL plant is currently discharging cooling water at a higher temperature increase than that allowed by ADB standards.
(b) Air emission standards: The summary environmental impact assessment (SEIA) contains some irrelevant and incomplete information about the standards to be applied. Information provided to comply with India’s emission standards for particulate matter, sulfur dioxide, and nitrogen oxides for power plants with a production capacity of less than 800 MW and those that burn fuels other than coal is irrelevant to this project. Information about ADB’s requirements for air emissions based on the PPAH is incomplete regarding sulfur dioxide emissions and partially irrelevant for nitrogen oxide emissions. Given the confusion of information about standards, it is likely that the basis for compliance with ADB air emission requirements was not appropriately established.
(c) Ambient air quality standards: Insufficient due diligence may have been exercised in the selection of pollutant parameters for air dispersion modeling. Although respirable particulate matter less than or equal to 10 microns (PM 10) appears to be a critical pollutant parameter in predicting harm to human health and the environment from coal-fired power plant projects, the SEIA did not include any standards for this pollutant parameter from India’s National Ambient Air Quality Standards (NAAQS) (1994). Therefore, the SEIA conclusion that the CGPL plant does not significantly affect air quality may well be wrong.
The Environment Policy (2002) Policy stipulate that an “important consideration in preparing the environmental assessment includes assessing induced, indirect and cumulative impacts and assessing their significance”.
(a) Cumulative impacts of air emissions: The cumulative air emissions impact analysis presented in the SEIA lack consideration for (1) the most critical pollutant parameter RMP-10; and (2) the operation of the adjacent Adani power plant operating with all of its five units at full capacity of 4620 MW. The cumulative assessment only considered incremental air pollutant concentration based on the Adani power plant operating with two of its units (660 MW). Had the cumulative assessment been based on the Adani plant operating at full capacity, ambient levels of RPM-10 concentrations could have been found to exceed the NAAQS for RPM-10, indicating adverse human health and possibly environmental impacts.
(b) Cumulative impact of wastewater discharge: The cumulative impact of wastewater discharge from the CGPL and Adani power plants on marine life was not assessed.
Evaluation of alternatives
The original Environmental Clearance of the Ministry of Environment and Forests (MoEF) dated 2 March 2007, stipulated that a “closed cycle (i.e. closed-loop) cooling system with cooling towers shall be adopted.” The requirement for a closed-loop cooling system was subsequently changed. The altered provision dated 5 April 2007 by MoEF required a “suitable system” which should not discharge water with a temperature that would exceed 7 degree C above the ambient temperature of the receiving water body. It is not clear whether ADB conducted appropriate due diligence of the evaluation of the project’s cooling system alternatives (once through versus closed-loop), considering the impacts on the sensitive ecological terrestrial and marine biological environments as well as the livelihood of the fisher-folks living in the vicinity.
Environmental baseline assessment
The social and environmental impact assessment appears flawed and ADB staff appear to have exercised inadequate due diligence in reviewing the description of the project area. The project area is characterized as “not ecologically sensitive.” The ADB Rapid Assessment Checklist for screening environmentally sensitive areas includes “wetland, mangrove, estuarine, and bay” areas among other.
Has noncompliance caused material harm or is it likely to cause such harm?
There is prima facie evidence that possible noncompliance has caused, or is likely to cause, material harm.
(i) Harmful effects of the cooling system on the environment and the fish harvest: The construction of an open-discharge system, rather than a closed-loop cooling system, has substantively affected the environment. It is very likely that the discharge of a large quantity of hot cooling water at a temperature substantially above the ambient water temperature has had a negative impact on the fish population. The construction of the cooling-water outfall channel has adversely affected some fish-breeding grounds, as well as fishing activities that were previously practiced along the 250-meter width of the outfall channel and in the area of the hot cooling-water mixing zone. Fisherfolk working close to the plant say that the quantity of fish harvested has been significantly reduced. Apart from anecdotal evidence obtained by the CRP through on-site interviews, no reliable data are available to confirm this claim, but it is probable that wastewater discharged into the sea at a temperature level significantly above the 3°C permitted under the PPAH is a major contributor to the reduction in fish harvest.
(ii) Inaccessibility of fishing grounds: Fisherfolk contend that the open discharge canal has cut off their access to some fishing grounds. While CGPL has constructed a paved route from villages to fishing grounds, the travel distance has increased by about 4 km, adding significantly to travel expenses and travel time.
(iii) Health effects of power plant emissions: There is visible evidence of fugitive coal-dust emissions in Tundawanda village, situated adjacent to the CGPL plant. Houses, trees, and terraces are noticeably polluted. The complainants assert that fugitive coal-dust emissions and fly-ash emissions from the stacks of the power plant create breathing problems and increase respiratory diseases among children. Aggregate health data available so far do not show increases in respiratory diseases. But given the degree of air pollution in the area, health impact is likely. As the CGPL plant has been in operation for less than 2 years, any health effects are likely to show up in the future. Systematic and area-specific health monitoring would be needed to demonstrate this impact. This is presently not being done. CGPL management recognizes the adverse impact of fugitive coal-dust emissions from the coal conveying system, which passes through Tundawanda, and it plans to mitigate this impact by installing a totally enclosed conveying system. Whether or not the planned mitigation measures will adequately reduce the coal-dust pollution requires further investigation.
(iv) Declining yields of horticultural crops: The complainants maintain that the operation of the power plant and the resulting increase in heat and air pollution have led to a significant decline in horticulture yields. Since the CGPL plant has been operating for less than 2 years, data about this impact are not yet available. Further investigations are needed to assess whether plant operations indeed have an impact on agricultural yields, but a causal relationship between plant emissions and reductions in yields is possible.
The CRP finds prima facie evidence of noncompliance with ADB policies and procedures and prima facie evidence that this noncompliance with ADB policies has led to harm or is likely to lead to future harm. Given the evidence of noncompliance, the CRP concludes that the noncompliance is serious enough to warrant a full compliance review. The CRP finds that two of the three complainants have presented adequate evidence to be considered directly, materially, and adversely affected by the project. The third complainant, Patel, claims that he is acting substantively in a representative capacity.
The CRP recommends that the Board authorize a compliance review of the project in accordance with the Accountability Mechanism Policy (2012).