Voices from the Ground (2014): Concerns over the Dawei Special Economic Zone and Related Projects

This report, published by Dawei Development Association in collaboration with SEM, Paung Ku, TERRA, EARTH, Mekong Watch, Earth Rights International (ERI), and numerous individuals, examines the Dawei Special Economic Zone (DSEZ) project in Southern Myanmar, which, if realized, would be one of the largest petrochemical industrial estates in South East Asia. It presents the results of a quantitative and qualitative study, aimed at understanding the process by which the DSEZ project has unfolded, and the extent to which the rights of the local people are being protected and respected by the relevant States and corporations in the implementation of the project.

The DSEZ is a bilateral economic cooperation project owned jointly between the national governments of Thailand and Myanmar, initiated in 2008. A 60 year concession was granted to Italian-Thai Development Plc. (ITD) in 2010. All works have been carried out so far in the name of the Dawei Development Company Ltd. (DDC) a joint venture company owned by ITD (75 percent) and Max Myanmar (25 percent).

In July 2012, Max Myanmar withdrew its investment and the search for new investment partners began but has so far been fruitless. Consequently, the project is currently stalled. In November 2013, concession rights for the project were transferred to a new type of company referred to as a “Special Purpose Vehicle” (SPV). The SPV is jointly owned (50:50) by the governments of Myanmar and Thailand, which underlines both countries direct responsibility for the Dawei SEZ project. The project was launched in 2008. Land has been cleared in certain areas and initial infrastructure development has already begun. The project will comprise primarily an industrial estate area including: a deep seaport and dockyards; an oil refinery complex; steel mill; fertilizer and petrochemical plant; pulp and paper processing plant; medium and light industry factories; and one or more electric power plants.

The infrastructure project also extends beyond the demarcated economic zone, an international roadlink is also being constructed linking the DSEZ with Thailand. Additional transport links along a similar route are also planned, along with the construction of a new oil and gas pipeline to Thailand. A large water supply reservoir is also planned to the northeast of the DSEZ, a small port to the south, a quarry to the north, and several resettlement villages are planned to receive the populations that will be displaced from the project areas. All villages included in this study have already been directly affected by the project.

On the basis of current information about the future works to be carried out, it is estimated that people within 20-36 villages, (comprising approximately 4,384 – 7,807 households or 22,000 – 43,000 people), would be directly affected by the construction of the DSEZ and related projects, including industrial estate, ports, roadlinks, reservoirs and resettlement areas. Also as the site is in a populated area just 20 km from Dawei, the regional capital, many more people from the rural, coastal and urban populations of Dawei District, are highly likely to be subjected to negative environmental and other impacts emanating from the industrial and petrochemical complex, if it goes ahead.

The research surveyed a total of 20 villages located within the official boundaries of the DSEZ (9 villages), in the roadlinks areas (8 villages), and in 3 villages that lie outside the SEZ area but are nevertheless directly affected by the project, as they are the locations for one resettlement village, one small port, and the large water supply reservoir. Questionnaire data was collected by local research teams from 1,583 households on a random sample, visiting every third house in each village. This was complemented with additional inputs from focus group discussions in 18 villages. In addition, follow up interviews were held to document the experience of villagers who have been displaced due to the DSEZ.

Main findings of the study conclude that land is a critical livelihood asset for the majority of people in the areas to be affected by the DSEZ. The majority of affected people (71 percent) consider agriculture to be their primary occupation. In many cases, fields are not only planted with just one crop, but have a mix of uses, which provide either food or income, or both. Land-related livelihoods are not only derived from crops – livestock rearing, fisheries, and forest products also provide significant incomes for 13 percent of all households surveyed. Of all households surveyed, 71 percent expect to lose all or some of their land to the DSEZ. Many have already lost land either directly, 05 06 by confiscation, or indirectly, as their lands are rendered unusable as a result of landslides and water channel blockages due to DSEZ project operations.

The research discovered critical flaws in the process of land confiscation and payment of compensation. Firstly, the community was given limited information about the DSEZ project and displacement. Two thirds (66 percent) of households surveyed did not receive any information from the government or company at all. Of those that received information from the government or company, the majority, around three fifths, said that the information revealed only positive impacts and benefits of the project. Only six percent of households surveyed knew of the oil, gas and petrochemical industrial complexes to be built in their neighborhood, despite the fact that these are central components of the SEZ development plan.

Secondly, there was no meaningful consultation with affected persons. Only 27 percent of the respondents had attended any meeting about project implementation. Focus group participants described these meetings as “oneway” presentations. Of those who attended the meetings, 82 percent did not actively participate in the discussion, mostly because they did not understand what was happening or there was no opportunity to ask questions. Only 8 percent of households gave the government their consent prior to the start of the project.

Thirdly, the compensation process is deeply flawed. The calculation and payment of compensation was uneven and not transparent, and there has been no list of compensation payments made public.

Overall, only around 15 percent of all households surveyed reported having received compensation payments. Where compensation has been provided, there have been significant delays. Four fifths of those compensated are still waiting for completion of payment. Only 9 percent of those receiving compensation were given official documentation, indicating the high possibility of corruption. In addition, the amounts received have mostly been inadequate to sustain the recipient family’s future. Resettlement arrangements have also been inadequate, as the living standards of those who have been moved out have been considerably lowered and, in some cases, resettled families are living in circumstances of great hardship.

Project proponents and partners, in particular the Myanmar and Thai governments, have legal obligations to respect and protect the human rights of communities and individuals affected by the DSEZ. Those in charge of the DSEZ have thus far failed to adequately consider or incorporate affected communities into the decision-making and development process. By removing access to farm and other lands without putting in place adequate arrangements for compensation, resettlement and rehabilitation, the project is putting at risk affected people’s livelihood and means of survival, in violation of the human right to adequate standard of living.

The DSEZ project has proceeded without the free prior and informed consent (FPIC) of affected communities in violation of the rights of indigenous peoples. The research and analysis also shows that the DSEZ project partners did not adhere to relevant international, regional, and domestic legal obligations, standards, and other responsibilities of the project partners, including international standards on involuntary resettlement. Like many developing countries, Myanmar still lacks adequate laws to regulate industrial investment and economic development. As a good neighbor and joint-owner of the project, the Thailand government must ensure the investment complies with its own domestic legislation as well as all international instruments in relation to forced evictions, rights to adequate food and housing, and indigenous peoples’ rights.

The Thai Government should investigate and take appropriate measures against all companies domiciled in Thailand that abuse the human rights of communities affected by development projects, regardless of where company operations take place. The National Human Rights Commissions of Thailand and Myanmar should collaborate to carry out a full investigation in a transparent, consistent and proactive manner, into all complaints of human rights abuses, relating to land confiscations and forced evictions as a consequence of the Dawei SEZ project activities or operations conducted by companies domiciled in Thailand and Myanmar.

Systematic failures in the initial implementation of the DSEZ project are causing hardship for affected people. Many people have expressed a deep sense of injustice from their treatment. Local people have expressed that they are not against development, but want development that is not harmful to people or the environment. The governments and other project partners should take people’s concerns seriously and work towards sustainable development by improving the livelihood security of the local communities and environmental sustainability.