Lillian’s Eden

by Cheryl Adam

  In 2016, the Central Electricity Regulatory Commission (CERC) ruled that Adani and Tata, who had filed cases before it, could pass on these extra costs to their customers. Both Adani and Tata had filed power purchase agreements (PPAs), which stated that the only way they could revise the tariff was if a government body or court imposed a cost or force majeure. Both companies argued that the increased cost of Indonesian coal was a force majeure. A Committee was set up to evaluate how much the compensation might be. In April 2017, the Indian newspaper, The Wire120 reported that the decision was made without public process. However, the article noted that in April 2016, the Appellate Tribunal for Electricity (ATE) reversed the CERC decision but said it accepted the Indonesian coal situation could constitute a force majeure and agreed a compensatory relief should be offered to the companies but it failed to state the amount of the relief.

  Coal in India was increasingly becoming an expensive source of power. As a power source, it relied on imported coal as well. It was at this time, Yagnik explained, that Adani became the largest supplier of coal in India.

  “They were not extracting coal in India. They were importing coal and providing coal in India at a cheaper rate …” he said.

  This is Adani’s masterplan – to provide coal to African countries and eastern countries as well as India. Every state in India, he points out, is like a country of the world in terms of the number of people. “They wanted to have control as far as the coal is concerned. Adani wants to become ‘the coal king of the world’ – that is a source of power for the 60% of the world which is underdeveloped and developing and which requires power. Nuclear energy,” he adds, “is only available in five or six countries in the world.”

  The private companies involved in coal importation had applied for a compensatory tariff stating they could not produce the electricity for what had been agreed in the non-negotiable agreement. The price of coal escalated to 4.50 rupees. As this debate was going on, Adani started exploring possibilities to extract coal itself.

  On the one hand, Yagnik said, there are 40–50 crore (400–500 million) people living in places where electricity hasn’t reached as 40% of Indians continue to live below the poverty line. “They do not have two meals a day,” he explains, adding: “Unless you can extract coal at a much cheaper price, the deficit will continue because the coal extraction will never be able to match the ever-increasing requirement of coal in India. The deficit will require the importation of coal … we will continuously be in deficit production.”

  Chillingly, Yagnik’s take on all of this is that Adani wants control of coal so they can determine the price – not only in India or Southeast Asia – but the world at large.

  “It’s not only related to their own manufacture of power. They have a multi-strategy. First of all, they want to control access to the coal. Then they provide coal to their own companies and provide coal to the Government of India. They are also providing coal to Pakistan and private partners.” He pointed out that the Mundra power plant is only 800 kms from Pakistan.

  As our meeting concludes, Geoff Cousins assures Yagnik that we will stop the Adani Carmichael mine going ahead. Yagnik smiles wryly describing himself as “a champion of cynicism.”

  Cousins appears ruffled.

  “I have to tell you, Sir, we will beat them,” he tells Yagnik. “And we have already beaten several other multinational companies. You can tell anyone from Adani that you talk to that you have met a group of people from Australia who will finally defeat them.”

  Only weeks after our visit, a landmark judgment was handed down by the Indian Supreme Court. Appeals were filed to the Supreme Court by all of the parties. The Supreme Court set aside the agreement to allow Adani and Tata to benefit from a tariff ruling that no compensatory tariffs were allowed. It rejected the proposition that the rise in Indonesian coal constituted a force majeure and instead stated it was a known risk taken by the companies. It also ruled that the Power Purchasing Agreement could not be overridden by the CERC.

  According to an article in April 2017 in The Wire, this decision put an end to the ethos ‘bid low today, raise price later’ by players like Tata and Adani. Shares in Adani Power fell by 18% according to The Business Standard, the largest drop in nearly eight years. Tata’s fell by 6.7%. This decision by the Supreme Court was to challenge the whole viability of the Mundra power plants and sour the Adani success story.

  The local fishermen of Mundra are down on the beach on the mudflats in front of some toilet blocks emblazoned with Adani’s logo. For eight months of the year while they fish they occupy the shanty huts up from the beach, before the area is closed for the breeding season. Wooden boats in cherry red and emerald green lie like stranded whales along the beach at low tide. A Muslim fisherman in a Taqiyah, a white skullcap, takes us to his boat. He leans, a proprietorial arm up against his brightly coloured boat. Others are painting their wooden boats in scarlet reds and deep blues and hammering and banging in repair mode.

  “What has changed, since the power plants appeared?” I ask through our ground crew.

  “The water from the outflow channel has increased the temperature of the water and the mangroves getting cut has significantly reduced our catch. Before, at three kilometres into the ocean, we used to find fish. Now the port has been built, the fishermen have to go out as far as 12 kms further into the sea to find fish.”

  A couple of boys scamper around the beach, the tide at its lowest ebb. Anchors stick up out of the sand with ropes coiled around them. Two dogs playfully bound up from the ocean.

  The fisherman continues: “But ten kilometres from the land is the route the ship has to come into the port. We don’t take this route when we fish because we know the ships are coming. But the ships change their routes and there are more ships coming. Three different nets have already been destroyed and that’s put more cost on us.”

  As we leave the beach, Bruce Currie drops on one knee next to a drying rack of small fish for a photograph. The fish are Bombay Duck, a staple diet of the locals, the fish workers. The fish are out for drying and hang like a row of washing – albeit in air polluted with coal ash and fly ash – Bombay Duck is the locals’ bread and butter. It is the women who do the sorting, drying and selling.

  Across the sand dunes, the power plant chimneys are stark against the sky. Wide spreading thorn trees offer shade. The austere military style toilet blocks are a paltry offering to these fishermen whose livelihood has been displaced.

  And what does Gautam Adani think about all of this?

  When quizzed about the controversy over his many developments at the expense of social and environmental issues, in one of his rare interviews he revealed his thinking to the Indian business magazine Outlook in 2013: “Let’s face facts,” he is quoted as saying. “Wherever there is development, there is bound to be some amount of damage. But it’s important that you balance that out … while there are some genuine concerns, that is not the case with all … we are taking every possible step to create self-employment or jobs for the affected. But, beyond a point, it is also the responsibility of the Government to ensure that its welfare schemes reach the populace.”

  Chapter 7

  Digging up the Dirt on Adani

  The Kutch district is the largest district in India and a rare ecological zone due to its rich biodiversity as it contains coral reefs, mudflats and mangroves with a vast intertidal zone and network of creeks and estuaries. It was once rich agricultural land, especially the strip along the coastal belt that has sweet groundwater. Groundwater monitoring is carried out four times a year by the Ministry of Water Resources.

  As early as 2013, five years after the Adani power plant was constructed, the groundwater status was listed as semi-critical. The Tata power plant opened in March 2012. The water below 150 metres was deteriorating due to increased salinity and over exploitation and was causing kidney and gastric problems for the villagers. The Groundwater Kachchh Report121 conducted by the Ministry of Water Resources
stated there was “an urgent need for management of the limited resources available.” It also noted that the Gujarat Government was, at that time, pushing to industrialise the coastline and there were many “new industries in queue.”

  According to a PhD thesis written by Sazina Bhimani,122 Mundra had experienced rapid industrialisation including 31 large to small-scale industries comprising the power plants, steel plant and oil refineries, and noted that the Adani SEZ, in particular, had “paved the way for further industrial development.” The 2010 Kutch Coast – People, Environment and Livelihoods Report123 released in 2010 from the Centre of Environment and Education (CEE) noted that in spite of mandatory environmental impact assessment studies, including one by the National Institute of Oceanography, the biodiversity and marine ecology of the areas was critical. They all concluded, however, that “the overall impact would be insignificant.” Governments, whether in India or Australia, seem to believe that by acknowledging there is a major concern, they are doing their duty. It lets them off the hook. Indeed, the ultimate penalty for their decisions may not be witnessed in their lifetime.

  When construction of the Mundra power plant began, Adani not only extracted groundwater but, according to a book chapter published by the CEE,124 Adani was also sourcing water from the Narmada Canal. The largest lined canal in the world it is a contour canal (artificially dug and following the contours of the land) that brings water from the Sardar Sarovar Dam through 460 kms of Gujarat and into the arid state of Rajasthan. It is the largest water resources development project in India. The canal is a joint venture between four different states including Gujarat. According to the People, Environment and Livelihood Reports, 47.5 million litres of water per day from the Narmada was allotted to various industries including the Adani group. Adani and its subcontractors, we are told during our visit to India by a group of environmentalists in New Delhi, were drawing on the groundwater during the construction of the power plant. This exploitation of the groundwater by industry including Adani had a significant negative impact on the area’s groundwater and increased its salinity, according to Sazina Bhimani’s 2014 thesis.125

  Groundwater contamination was listed as one of the major issues in the Ministry of Environment and Forests (MoEF) Report126 released in April 2013 from the Committee headed by Sunita Narain. The Report noted that the environmental conditions imposed on Adani included the requirement to monitor the groundwater to check against salinity ingress but the report noted the company had failed to do this.

  The Report contends that thousands of gallons of water are sucked in from the sea through a pipeline. Once sucked in, the water is kept in a reservoir from where it is pumped into the turbines to generate electricity and then it is eventually pumped out. The Committee found that the reservoir did not have any lining to protect the groundwater. It found the soil was permeable and could easily be contaminated. The Committee recommended Adani create an Environment Restoration Fund that was either 1% of the project cost (including the thermal power plant) or US$37 million, whichever was higher as a substantial deterrent for non-compliance of environmental conditions. That fund should be under the stewardship of the Ministry of Environment and Forests and used to repair environmental damage and to put more stringent monitoring in place to ensure compliance. It also recommended the company should reconstruct the channels taking in and sending back the water as well as repair or construct a new reservoir with impervious lining. And an independent study should monitor saline ingression every five years.

  Megha Bahree, writing in Forbes Magazine in March 2014,127 noted the groundwater issue. She wrote that the Adani Group, in response to her questions, had said salinity ingress was a local phenomenon and that its power plant used technology to ensure there was no stray fly ash. In April 2011, the Gujarat Pollution Control Board conducted a site inspection and issued directions to Adani to carry out a detailed assessment of underground water quality including salinity ingress. Adani Power Ltd commissioned a company to conduct the study and it reported that except for two samples, all other samples were found to be unfit for drinking water. One condition for clearances required that the proposed power plant should not carry out any activity that would lead to saline water ingress. The company was also asked to monitor groundwater levels. However, the MoEF Report128 found that no groundwater monitors had been installed.

  Adani’s alleged environmental breaches were well known at the time when Gautam Adani engaged in his courtship of Australian politicians. On 9 August 2013, The Australian newspaper noted that the Australian Government was going to decide the next day whether to allow the dumping of up to three million cubic metres of dredged sediment on the Great Barrier Reef to allow the expansion of the port at Abbot Point. This article quoted India’s Toxic Watch Alliance spokesman Gopal Krishna who commented that “Adani are habitual violators of environmental law. Even before environmental clearance is given they begin projects.”

  As Tim Elliott from The Good Weekend surmised in his profile piece on Adani in 2017, “… he [Adani] has been afforded extraordinary concessions, from cheap land to enormous tax breaks. Despite our vastly different heritage, the approach seems to be working equally well in Australia, where support for the mine from the major parties is based largely on the promise of jobs … The Federal Government, for its part, apparently regards the mine as something akin to a humanitarian obligation, claiming Australian coal will help lift hundreds of millions of Indians out of poverty.”

  Threats to Australia’s groundwater are Bruce Currie’s main focus as a grazier. During our trip to India, he never tires of explaining the importance of groundwater for Australia and the farming community in particular. If the Carmichael mine goes ahead in Australia, Adani plans to extract an average of up to 4.5 billion litres of water per year. Currie is candid and admits that, in the past, a lot of harm was caused by graziers and farmers extracting water from the Great Artesian Basin, which covers an area of more than 1.7 million square kilometres.129 Times, though, have changed, he says. Farmers now realise the importance of conservation.

  But then came the threat of massive coal mines opening up in the Galilee Basin, and Queensland Government promises of free access to unlimited groundwater for mines like Adani’s Carmichael mine. Since Adani received Commonwealth environmental approval for this mine in 2014, Federal Government studies have shown that the mine directly threatens the Doongmabulla Springs – a sequence of 160 separate wetlands stretching across a large area inland of Clermont, one of the world’s last unspoiled desert oases as well as a spiritually significant place for Traditional Owners. Josh Robertson focused on this while reporting for the ABC in March 2018130 pointing out that the Federal Government commissioned a Report several years ago to quantify the cumulative impacts and risks that multiple coal and gas projects were having on Queensland’s water resources.

  That should have been an important document to revise the swift approvals of mining leases and licences but this did not happen. According to documents sourced by the ABC, Adani ignored the information from a bioregional assessment that demonstrated that, while planning went ahead for the proposed Carmichael mine, the source of the ancient springs was still uncertain. Adani’s groundwater plan ignored this scientific uncertainty and assumed that its proposed mine and the springs tapped different sources. Adani’s plan did not determine how the company would deal with that risk, nor had Adani used any exploratory techniques such as seismic surveys or drilling deep bores to find out.

  Kutch means an area that is both wet and dry. Once famous for its crops of sapodilla, a brown, fleshy fruit slightly smaller than a tennis ball, the district also produced dates, coconuts and castor oil.

  Soumya Dutta, Convenor of Energy and Climate Group Beyond Copenhagen Collective, one of the environmentalists in New Delhi, explains the effects of extracting groundwater on the agricultural land in Kutch. “When you are levelling the coastal areas and constructing these big power plants with concrete you cannot use salty waters,�
�� he explained. “Companies like Adani are supposed to desalinate and do, but they also actually extracted groundwater. Agriculture disappeared … with the sapodilla. Once the Adani and Tata power plants were built, black spots started to appear in the fruit. Within three years, the orchards were gone. The farmers have cut down their orchards because they could not sell them. The production is gone. Fly ash, coal dust and saline water from Adani Power and the nearby Tata plant are ruining the crops and making the soil less fertile.”

  Adani’s website has stepped up its branding to profess that the company cares. A video on its website celebrates how much the company has transformed the region, offering thousands of jobs and bringing a ‘magical’ change including infrastructure and hope to ‘a backward community’. The video derides its critics as ‘self-motivated environmentalists’ who bring their own agendas against Adani. The fact is, the company states, that thousands of jobs have been created in Mundra. People are able to sit around in air-conditioned offices feeling satisfied with life. The land clearing, devastation, alleged theft of groundwater and the continued destruction of rich agricultural land and the coral coastline through industrial pollution are not mentioned. The hijacking of the livelihoods of fishermen, agriculturists and pastoralists is also notably missing from the expensively shot, aesthetically beautiful video promoting Adani.

  The company portrays itself as the saviour, not the grim reaper, of the community. Presumably Gautam Adani believes that Australian politicians and the public will notice this message. Adani has brought in family members aka Trump style to alter the corporate narrative, according to an one Indian newspaper article in The Economic Times131 which reported that in January 2016, Adani’s wife Priti, a dentist, and elder son, Karan, took charge of APSEZ along with Adani’s nephew Rakshit Shah, Chairman of the Mundra port. Adani’s wife and son, in particular, the newspaper reported had been “for quite some time, working quietly, sensitising the group even as litigation and accusations of past misdemeanours flew thick and fast.”