State-owned enterprise CITIC, in charge of the proposed US$1.3 billion Kyaukphyu port, kick-started the environmental and social impact assessment (ESIA) and preliminary geological survey this month.
The company said Canadian firm Hatch was hired as project manager to supervise the process and recruit the ESIA project consultants and contractors.
On July 2, CITIC held the first stakeholder meetings at the Kyaukphyu Special Economic Zone (SEZ) Management Committee office in Yangon, and made site visits to the Madae Island.
It said it would “develop participation mechanisms for all stakeholders of the project in order to take extensive and adequate consultation” as part of the ESIA process. The preparation work will be carried out “in a rigorous, open and transparent manner.”
The idea of building a port and an industrial park in Kyaukphyu was mooted by the U Thein Sein government in 2015, which greenlighted the consortium led by CITIC to come up with a plan to establish a $7.5 billion SEZ in central Rakhine. A corporate promotional video suggests the scheme will create an investment and logistics hub akin to Hong Kong and Singapore.
The government last November signed a “framework agreement” with CITIC. Myanmar will own 30 percent of the stake and the project will cost $1.3 billion. European and Japanese investors are unlikely to set up shop in the port or the industrial park, Yangon-based sources said.
However, confusion arises over the legal framework currently adopted by the developers. Myanmar’s environmental law demands a site-wide environmental impact assessment for a project of this size and scope, which should include an assessment of both environmental and social impacts.
CITIC’s latest press statement suggests that its current ESIA process is specifically for the port and not an SEZ.
If there’s to be an SEZ, that must be incorporated in the site-wise assessment, according to ICJ legal adviser Sean Bain. If the SEZ plan is scrapped and only a port project is planned, then it’s likely CITIC is operating under the wrong legal framework because the Investment Law would apply instead of the SEZ Law.
“We’re hopeful that developers and authorities will make good on commitments to implement projects lawfully in a manner that addresses the human rights concerns documented by our organisation and others in Kyaukphyu.
“Yet to date we haven’t seen signs of a change in approach: long overdue, genuine transparency on project plans would be a good start,” he told The Myanmar Times.
There is another potential problem with the current approach, observers say. Kofi Annan’s Rakhine Advisory Commission recommended the Myanmar government to conduct a Strategic Environmental Assessment (SEA) before the ESIA process, in order to explore its consequences on local communities and outline the risks and benefits to other industries in the area.
State Counsellor Daw Aung San Suu Kyi had publicly promised to implement all recommendations from the Commission.
A WWF 2017 report also recommended Myanmar’s government to undertake an SEA for the Belt and Road Initiatives (BRI) to better assess and minimise the environmental risks.
The report also stated that BRI road projects could damage Myanmar’s natural capital assets which are crucial to mitigating natural disaster risks.
For example, Rakhine State is the region of Myanmar most threatened by natural disasters and by future impacts of climate change. An SEA would help to identify strategic adaptation and mitigation measures to preserve a healthy environment for all.
“If Kyaukphyu is to be the megaproject initially envisaged, the government would be wise to commission a strategic environmental assessment for the whole area and its surrounds, as recommended by its own advisory commission more than two years ago,” Mr Bain added.
The ESIA process suggests the government will not carry out the SEA. The government spokesperson did not respond to calls seeking comment.
Rakhine State has been experiencing an internet blackout for nearly a month. The transport and communications ministry has directed all telecom operators on June 21 to temporarily cut off internet connectivity in nine townships of Rakhine and Chin states where fighting is taking place between the Tatmadaw (military) and armed groups, to ensure stability and rule of law.