by Cheryl Adam
It was not just the SEZ that helped Adani. In 2005, the Indian Government had pushed through a slogan: ‘Power for All by 2012’ launching an initiative to build coal-based Ultra Mega Power Plants (UMPPs), each of minimum 4000 MW capacity. These UMPPs were to rely on imported coal, mostly from Indonesia, to fire them. Adani lost out to Tata Power when the UMPP (the first in India) was built next door in Mundra, but Adani shrewdly offered his neighbour his dedicated coal handling import terminal to feed Tata’s UMPP.106
The Adani company had in the meantime built a 4620 MW coal-fired power plant in 2013, according to the Business Standard, which sold coal-fired electricity to Gujarat and another Indian state, Haryana.107 Tata Power had a 4000 MW power plant in 2013 and sells coal to Gujarat, Rajasthan, Punjab, Haryana and Maharashtra. Tata bragged on its website that it had “the most energy efficient coal based-thermal power plant in the country with lower greenhouse gas emissions stating the power plant would fill 2% of India’s power needs.”
Indonesian coal primarily fires their power plants from a mine in Bunyu Island under a 15-year fuel supply agreement followed by a final phase, which imports coal from the Mahanadi coalfields in Odisha, India. Adani’s journey to capture one of the world’s coal resources dates back to 2010. At the same time as Adani signed up to acquire Linc Energy’s coal assets in Australia, the company also signed a US$1.65 billion deal with the Indonesian Government and its mining company PT Bukit Asam to set up rail and port infrastructure in Bukit Asam in south Sumatra to access coal to be exported to India, according to an article in the Indian online magazine LiveMint.108 In return, according to the article, Adani had exclusive rights to more than 60% of the coal from the province. At the time, the coal reserves in Indonesia were said to be ramped up to 60 million tonnes in the next few years, around the same output as Adani had initially forecast for the Carmichael mine per year.
More than 66% of India’s electricity is from thermal power plants and about 57% is from coal-based power plants. The majority of the coal from the Carmichael mine in Australia, should it go ahead, is supposedly destined to come to Mundra as these two Indian power plants predominantly rely on imported coal. Mundra is the largest of four thermal coal-fired power plants owned by Adani Power.
When interviewed by Outlook Magazine in 2013, it became clear, however, that Gautam Adani understood the perilous position private power stations might find themselves in because of their reliance on imported coal. Adani was clearly frustrated by the then Indian Government. At a time before Modi was Prime Minister, Gautam Adani told the Magazine that the government should have “cohesive policies” as it relied on private organisations to provide the coal. “That is also the reason why we acquired mines in Indonesia and Australia,” he confided.
The question of accessing the coal and dealing with ‘environment issues’ was risky, he said: “What no one realises is that we are heading into a scenario where beyond four or five quarters, equity component of most private power projects will be wiped out. Are we saying that banks, which have a chunk of loans on their books, will run the show? Ultimately, is the consumer benefitting?”
As to who is funding many of these projects, a 2016 Report entitled ‘Coal Currency Mapping Coal Project Finances in India’ by the Centre for Financial Accountability, contends that international financial institutions contribute around 11% of the funds. Most of these institutions came from Asia, the Report stated, with the China Development Bank the largest investor in the sector.
In 2017, Adani’s prescient comment in 2013 forecasting the precarious fate of Indian power plants when he granted the interview to Outlook Magazine came to fruition. In April 2017, only a month after our visit to India, a decision by the Supreme Court reversed the fate of the coal-fired power plants touted as the biggest not only in India but the world. The cost of Indonesian coal had soared. The court quashed Adani and Tata’s plea to increase their agreed electricity tariff to compensate for escalations in Indonesian coal costs, which according to some newspaper reports, Adani relied upon for 60% of its fuel requirements. However, according to the Business Standard, the court did allow hikes in coal prices arising out of changes from Indian law.109
During the writing of this book both Tata and Adani offered to sell majority stakeholdings in each of their Mundra power plants to the state of India for one rupee citing that the power plants were unviable given the price of the imported coal. This sale never gained traction with the financial markets speculating each plant had a negative value of as much as $US1 billion according to Tim Buckley. One newspaper stated that Adani was transferring the 4620 MW plant to its newly created subsidiary for an equity value of Rs 406 crore compared to the Rs 6000 crore the company had invested in the project.
Adani, in the meantime, has other plans for Mundra. In April 2017, The Economic Times of India reported that the Adani Group was working on an LNG terminal that will have an initial annual capacity of 5 million tonnes a year. It is also working on a 1.6 million tonne LPG import terminal. The project cost of the LNG import terminal is estimated to be about Rs 4500 crore. And according to a Business Standard in December 2017, Tata had recently bought a coal mining licence in Far East Russia.
We arrive in Mundra deep in the heart of enemy territory. Our ground crew point out the barbed wire fences of the Adani SEZ delineating the Adani empire. After the trip to Adani HQ and the disappearance of Imogen Zethoven’s phone, everyone is a little on edge. On the horizon, the stark chimneys that outline the power plant reach boldly to the sky.
According to the environmental activists we later interview in New Delhi who have spent time in Mundra: “You will not usually see smoke – it’s more like invisible smoke from Tata’s power plant. Where the Adani stacks are, though, you always find brown smoke which means that the particle emission is much higher in Adani’s power plant.” In spite of them being allowed entry to Tata’s power plant, they told us that Adani had reportedly refused them access.
In a drab hotel lounge room heavily screened by thick brown curtains in Mundra, we watch as a group of dedicated Indian environmentalists project satellite images of the drastically changed Mundra coastline following the building of the Adani coal-fired thermal power plant110 and later Tata’s. Bharat Patel is the moustached Senior Program Manager for Environmental Justice who has lived in this area for 16 years. He has been an active campaigner against the environmental issues at Mundra and is general-secretary of MASS (Machimar Adhikar Sangharsh Sangathan), the trade union affiliated with the National Fishworker Forum.
In 2009, the Ministry of Environment and Forests’ Expert Appraisal Committee (EAC) for Infrastructure Development, Coastal Regulation Zone which reviews applications for environmental clearances of SEZs, granted Adani an exemption from holding public hearings for the development of Mundra SEZ according to Manju Menon, PhD Candidate at the Centre for Studies in Science Policy in New Delhi. Similarly, the Queensland Government, by invoking critical infrastructure capabilities to the Adani project, the first to be granted to a private project,111 was also able to fast track without sufficient public scrutiny decisions made about the mine.
Menon writes that in 2008 Adani had been seeking environment clearance for a Waterfront Development Project (WDP) which, according to a Centre for Environment Education Report (CEE)112 would be part of the SEZ and include 55 berths including the existing 12; four port clusters: West, South, North and East; a Liquefied Natural Gas terminal, two shipyards, three desalination plants, and a road and rail network. The associated ship traffic from these ports in 2013 was forecast to total 1520 per year. The capacity of the desalination plant is 300 million litres per day and almost 1.5 times this capacity is discharged into the sea as saline water. “It was ironic,” writes Menon, “and very obvious to the people who had gathered for the public hearing held for the WDP in November 2008, that the company would have its way, legally or otherwise.” The public meeting was only the second meeting, Menon writes, that Adani had had in the decade it ha
d been involved in expansion at Mundra.113 Menon notes that the formation of MASS was “a milestone in the trajectory of local action against the corporatisation of this coast.”
As general secretary of MASS, Bharat Patel has devoted much of his time to this project. He shows us a 2013 report into the Adani Port and SEZ commissioned by the Ministry of Environment and Forests from the Centre for Science and Environment. Patel is a researcher canvassing different people’s views: fishermen, pastoralists, salt panners, and farmers. We drink hot, sweet chai out of a pot. The images he shows clearly tell the story of the Adani expansion in Mundra and how a group of committed environmentalists helped the fisherworkers with their rights: forming a co-op to deal with the issue of the quality of the fish being reduced from companies like Tata and Adani polluting the oceans. We are also introduced to Gajendrasinh Bhimaji Jadeja. He is a Sarpanch at the young age of 30: an elected chief of the village. Jadeja wears the well-earned badge of honour of being the only individual to successfully take on three court actions against Adani. We are invited to his nearby village to find out more.
The group has obtained satellite images from Google Earth and the National Remote Sensing Centre. In 2000, giant sand dunes fill the image before us. Creeks flow into the Arabian Sea. One of the most prominent features of this part of the Mundra Coast, the CEE Report states, is the vast intertidal zone comprising a network of creeks, estuaries and mudflats. It is the intertidal zone that has supported the fishing families for centuries – the area between the low and high tide – that used to occupy an area of 8–20 kms and used to be “an immense area to fish in.” The Gulf of Kutch, it notes, is one of the few coastal zones in the world to have such rich biodiversity. But by the new millennium, the natural beauty of the area was in grave danger. After 2001, when an agreement was signed with the Gujarat Maritime Board (GMB) to develop the port and then, in 2002, another company signed up to handle crude oil out of the port, the Mundra SEZ was incorporated. Eventually, the port and its associated development would end up consuming 60 kms of coastland.
Gujarat has the longest coastline in India – approximately 1914 kms – a similar length to Australia’s Great Barrier Reef Marine Park. The Gulf of Kutch is India’s first Indian Marine Wildlife Sanctuary and one of the few places in India with live coral. Since 1991, coral reefs and mangroves in the region have been afforded the highest protection according to a case study114 into the park. It was officially declared a Marine National Park in 1982. Covering an area of 458 square kilometres, it has 42 tropical islands offshore. It is home to around 1500 marine and coastal species with 49 species of hard corals, 23 species of soft corals, 70 species of sponges, 421 species of fish, 27 species of prawns, 30 species of crabs, 199 species of molluscs, 16 species of echinoderms, 172 species of bird, three species of sea mammals, six species of mangroves, and three species of sea turtles, 108 species of brown, green and red algae, and about 136 different creeks. There is a plethora of marine life including sea horses and dugongs and four types of large whales.
Two weeks before our visit to Gujarat, LiveMint, an Indian online newspaper, detailed the decay of the coral pointing out that the dead coral now “outnumbered the live ones.”115 These corals were given the highest degree of protection under the 1991 Coastal Regulation Zone legislation. The journalist noted that the intrusions of the SEZs (ports, oil pipelines, and industrial expansion) were “corroding the vast seabed, affecting the lives of millions of tiny creatures and microorganisms.” The Adani and Tata Mundra Ports lie directly across the Gulf of Kutch from the marine park. The case study into the park notes: “The rampant industrialisation threatens the sensitive marine ecology” blaming the lack of political opposition to the “single-minded drive towards industrialisation in Gujarat” as well as overlapping accountability in various government regulatory bodies. The coastline is now the site of giant petroleum- and petrochemical-based industry. According to one report, 70% of India’s crude import from this industry is expected to take place through the Gulf of Kutch.
“Now look at this,” Patel says, putting up slide after slide showing the port, a darkened area on the satellite image, reaching out into the ocean. By 2008, the coastline had irrevocably changed. The last slide in 2013 is of an industrial wasteland. The sand dunes have merged into vast cleared areas of land.
“Slowly it’s destroyed,” he says, his words hang in the air. There is silence in the motel room.
Patel confirms that 65–75% of all of the ships that import crude oil into India come into the Gulf of Kutch. “There are now so many ports and so many power projects in the gulf. Turbidity is very high and the acidity fluctuates and slowly the coral is dying.”
Untreated effluents from industries along the coast have directly challenged the reef-building corals. In 2015, an Ecosystem Health Report Card for the Marine Park by the Gujarat Ecology Commission identified pollution as one of the leading factors in the degradation of the marine habitat.
When the LiveMint journalist visited the islands off the Gulf of Kutch he saw “heavy sediment deposits choking the coral reefs across the shoreline of all three islands.” He saw green turtles stranded on a sediment-coated reef – the Gujarat beaches are breeding grounds – and a baby reef shark was struggling to stay alive. Meanwhile if you google the official Gujarat tourism website, you will see flashes of colourful pictures of coral and anemones across its home page promoting weekend getaways and homestays. Nothing about the decay.
Since arriving in Mundra, all we have seen is dusty roads and industrialisation similar to other landscapes we have passed on this journey. I had no idea that just offshore was the same kind of magical underwater world we have back home spilling with coral and fish and creatures of the sea. How could our politicians be so gullible as to actively court one of the main polluters who has already, along with other industries, destroyed a marine environment that will more than likely never recover? I have a sinking feeling that we are watching our own future. The Adani Group has first hand experience of what exactly it means to destroy a coastline and its unique marine habitat. Like the east coast of Australia, particularly across the length of the Great Barrier Reef, Gujarat too battles with the number of ports bringing with it a corresponding increase in pollution. Gujarat has the highest number of ports in India and is estimated to be handling 39% of the country’s total national cargo.
Why did our politicians not know of this before courting disaster?
And it has not been for the want of trying. The APSEZ was legally challenged soon after it began construction at Mundra. Following a tour of the site by the then Minister for Environment and Forests in 2010 and after complaints from environmentalists, a Committee was set up. The chair was Sunita Narain, an Indian activist and environmentalist who is Director General of the India-based Research Institute the Centre for Science and Environment, a non-profit public interest and advocacy group, and editor of Down to Earth. In 2016, she was named as Time Magazine’s 100 Most Influential People. Narain also appeared with Leonardo DiCaprio in the documentary Before the Flood that explored the impact of climate change on the monsoon in India.
The Report, which Patel shows us in detail, outlines the many examples of the Adani company’s alleged violations as well as its non-compliance with environmental conditions. The Committee found that after the port was built, there were “massive ecological changes in the landscape of the Adani Port and SEZ area including changes to the many creeks which fed into the area.” It showed how the company allegedly bypassed “the statutory procedures, by using different agencies, at the Centre and State, for obtaining clearances for the same project.” The company also bypassed public hearing procedures allowing little say over how it expanded its operations. There had been no environmental clearance, for example, for the construction of the Adani airstrip and aerodrome. The report claimed there had been mass destruction of mangroves and levelling of sand dunes with mangroves destroyed during the laying of pipelines for the oil terminal. Nor, the repor
t suggested, was the distribution of fly ash sufficiently monitored to counteract local air pollution and land degradation. Salinity was another issue, with the Report noting that the environmental conditions imposed on Adani included that there was to be “no withdrawal of water during and after construction.” No monitors had been installed to monitor groundwater. Adani has denied it had violated any clearances.
The Committee recommended that an Environment Restoration Fund (about 1% of the total cost of the project) be imposed on Adani which was to be used for the protection of marine ecology; mangroves, restoration of creeks as well as funding independent studies and, importantly, monitoring the Adani expansion and providing social infrastructure and support for fisher communities as well as assisting them to access their fishing grounds. Any funds should also be used for a voluntary return of grazing land to improve the productivity of the land. It also recommended cancelling an application from Adani to extend the northern port due to the massive culling of mangroves. Fly ash should also be properly monitored, it noted.
“Does the marine park still exist?” Imogen Zethoven asks.
“Yes, it still exists,” comes the response.
Four years later, after Modi came to power, one of the group tells us, the Report documenting the environmental degradation was effectively shelved. “Modi said the Committee doesn’t have powers to put a fine on Adani,” Patel explains.
Following the airing of these allegations on ABC’s Four Corners program in October 2017, the Adani Group stated that the Gujarat High Court had dismissed the public interest litigation in April 2015. Later, I learn that in 2014, Sunita Narain was dropped by Modi from his high level panel on climate change.
In September 2015, final orders from the Environment Ministry under the BJP-led National Democratic Alliance allowed the project to proceed with an approval process for the northern port stating that satellite images did not prove the changes to the land had been made before 2007. Online Magazine Scroll claimed that internal documents found the decision had been made before the results of the damage were known. The Magazine stated that Adani had spent Rs 3.16 crore defending its alleged culpability. Adani has consistently claimed it did not violate any regulations, nor had it broken any laws. The ministry orders questioned the legal basis to force Adani to pay anything for a restoration fund and ordered further scrutiny of the alleged damage to determine cost. However, according to Scroll Magazine,116 the Ministry relied on Adani’s own evidence that it had not breached environmental conditions rather than an independent verification. Scroll published extracts that it claimed came from the Ministry of Environment’s Regional Office Report in January 2017 which found Adani had complied with all environmental obligations. By August 2017, the Magazine stated the ministry’s file dropped all references to taking legal action against Adani.