US Taxpayers Funding Controversial Indian Coal Project

Forced relocations, brutal beatings, questionable disappearances, a number of broken human rights, labor and environmental standards: a federal bank supported by US tax payers has helped develop a Reliance Power project involving a plague of abuse on locals, according to a report by a coalition of U.S. environmental organizations.

The Export-Import Bank of the United States (Ex-Im) — a publicly owned financial institution that loans to overseas industries that buy US exports — has graced Reliance Power's Sasan Ultra Mega Power coal-based project in Singrauli, India with over $650 million since October 2010, about 14 percent of Sasan's $4 billion construction cost.

A fact-finding team from the Sierra Club, 350.org, Carbon Market Watch, Pacific Environment, and Friends of the Earth US visited affected communities earlier this year and compiled testimony from 25 locals.

"These are first-hand accounts of people affected on the ground," Sierra Club co-author Nicole Ghio told VICE News.

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The US coalition alleges that during construction of the project the company bulldozed houses in order to erect smokestacks and forced displaced people into resettlement colonies, where coal ash filled their homes on windy days. Reliance never delivered promised utilities, infrastructure for education, or electricity produced from the plant. Many residents were denied adequate compensation for the loss of their homes. When locals took their grievances to authorities, they faced intimidation and violence from the company and police.

"When I was resisting the company strongly, the company goons and police threatened me," Krishna Ram told the fact-finding team. "They even arrested my son and kept him in custody for several days until I agreed to accept the compensation amount. My son was given a job in the Reliance mine, and he died in an accident there."

The Sasan project — comprised of the power plant and adjacent coal mines — covers 10,000 acres and is one of India's four functioning Ultra Mega Power coal-based projects, three of which are run by Reliance.

According to the report, Ex-Im has withheld multiple documents "in relation to pollution levels, the use of pollution control technology, safety measures, labor practices, and mitigation" in violation of the bank's Environmental and Social Due Diligence Procedures.

The coalition filed a Freedom of Information Act request today to access  documents that might help verify claims of abuse. Ex-Im has 30 days to respond to the group's petition.

"The Export-Import Bank is aware of, and takes very seriously, the allegations that have been raised concerning the Sasan project site and continues to investigate their origins, as well as how the company is addressing them," Ex-Im's Matt Bevens told VICE News. "While it is the mission of the Ex-Im Bank to finance the sales of American products overseas in order to create jobs here at home, all transactions are subject to the Bank's stringent and transparent environmental and social impact guidelines."

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Bevens said Ex-Im has conducted "continuing periodic monitoring" and visited the Sasan project "several times" in order to investigate abuse allegations.

The Office of the Inspector General (OIG), an independent body at Ex-Im that audits the bank and pours over corruption claims, sent two officials to the area last week. The coalition, however, found their standards of investigation less than adequate.

"[The OIG] refused to actually go into the communities to meet with people," the Sierra Club's Ghio told VICE News. "These are communities that faced violence and intimidation at the hands of Reliance Power, so when the OIG first of all refused to meet with the communities broadly, but then insisted that only a handful of people come to the hotel they were staying in at 7:30 in the morning, a hotel that largely caters to industrial interests, where reports from the ground actually say Reliance personnel were in the lobby — it makes for a very unsafe situation for these people."

"The OIG is conducting an inspection of the Ex-Im Bank's financing of the Sasan project," said OIG's Mike McCarthy. "Inspections are conducted in accordance with the Inspector General Quality Standards for Inspections. The OIG is gathering information from a variety of sources and will review Ex-Im Bank's compliance with law and policy, including the Bank's social and environmental policies."

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The environmental alliance pushback against Ex-Im comes after an onslaught by Tea Party-led representatives to strip the federal organization of its funding. Conservatives have decried the bank for subsidizing large corporations that are in no need of public subsidies. Leading conservative policy groups like Heritage Action for America have sent letters to House majority leader Rep. Kevin McCarthy demanding that Congress cut funding to the bank.

The overlap in how environmental and conservative groups view the bank, however, is limited, says Heritage Action's Dan Holler.

"At first glance, there appears to the be an opportunity for a right-left alliance in the effort to eliminate the Export-Import Bank," he told VICE News, "but the Sierra Club report makes clear they do not oppose the bank. Like most left-leaning criticism of Ex-Im, they have a very narrow concern about Ex-Im as opposed to a principled opposition to corporate welfare."

Follow Shelby Kinney-Lang on Twitter: @ShelbKL

Image via Flickr