Displacement and Loss of Livelihoods
As stated in the overview, the project will displace a large number of people (40,000 according to the Company's own estimates) while absorption of internally displaced people within Bangladesh remains a critical problem given population density and lack of access to land. Some sources from within the multilateral development banks' suggest that the World Bank Group's International Finance Corporation (IFC) withdrew from considering this project given the lack of land available for resettlement. Moreover, indirect affects of "de-watering" are likely to be long term (30 plus years of mine life and beyond) and with serious implications for maintaining livelihoods. Moreover, the Bangladesh government does not have a national resettlement policy nor a good track record in handling projects with massive displacement. People displaced from the neighboring coal mine (Barakupuria) are still struggling to receive adequate compensation according to local sources.
Phulbari Ricefields which the proposed project threatens to destroy
Environmental Destruction
The mine life is projected to be more than 30 years; however strategies for mitigation of acid mine drainage--one of the key sources of mine-related land and water pollution have not been adequately addressed in the ADB approved SEIA. Moreover, impacts of de-watering the mine area has not been carefully examined with on the ground tests. Also, eight million tonnes of coal will be transported through the Sundarbans reserve forests and at a distance of "1.5 km from the protected areas." The Sundarbans, besides being a UNESCO World Heritage Site, remain one of the only natural mechanisms for protection against major storm surges and cyclones that frequent Bangladesh; a massive and long term export of coal through this area will seriously impact the ecosystem.
Human Rights Violations
The project has already been associated with significant human rights violations due to the August 2006 incident. Freedom of Speech and assembly have further been restricted since this event. There are concerns that a central tenet of "free and prior informed consent" will not be met by the ADB if it continues to support the project.
Development Dimensions of ADB's private sector projects
ADB's Private Sector Operations Department (PSOD) is a relatively new but growing entity at the ADB, although private sector projects have been funded at the institution since the early 80s. Internal sources at the ADB contend that PSOD has a poor track record of designing projects with sound environmental and social safeguards as per ADB safeguard policies and on ex-ante poverty assessments. PSOD management admits that they have to date not developed "development scorecards" as stipulated in their own strategy document (2001) to assess the poverty dimensions of any given private sector project. They contend that the development dimension is addressed during the evaluation of an approved project. Civil Society remains concerned at these systemic weaknesses in PSOD, particularly where a project will have major social and environmental impacts (like Phulbari).
ADB Policy Violations
Civil Society Organizations believe that the project, if approved, will violate ADB’s Energy Policy (1995), Indigenous Peoples Policy (1998), Involuntary Resettlement Policy (1995), Environment Policy (2002), and Public Communication Policy (2005).