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President says no coal, but CEA exploits loopholes to approve king coal project
The Central Environmental Authority (CEA) has exploited loopholes in its own approval process to permit coal imports to Hambantota Port by businessman Nandana Lokuwithana and to allow coal-based industries at the Mirijjawila Export Processing Zone, even as President Gotabaya Rajapaksa continues to eschew the high-polluting fossil on global arenas.
Earlier this year, the CEA granted provisional approval to Lanwa Sanstha Cement Corporation (Pvt) Ltd, which Mr Lokuwithana owns, to import thousands of tons of coal via Hambantota Port for a steel company he is setting up in the Mirijjawila export processing zone (EPZ).
It contravenes the Government’s avowed policy of stopping coal-powered industries, environmentalists said. On September 24, President Rajapaksa announced Sri Lanka’s energy commitments to world leaders at the UN High Level Dialogue on Energy, saying the country aimed to become carbon neutral by 2050; that it would not build any new coal power plants; and that it was happy to co-lead the Energy Compact for No New Coal Power.
But Lanwa Sanstha aims to power its factories with coal, now aided by the CEA. The Chinese-run Hambantota International Port Group (HIPG) is also concerned as it has been actively promoting the facility as a “Green Port”. There has been no environmental impact assessment (EIA) or air quality simulation done for the project.
Mr Lokuwithana has already started work on a cement manufacturing plant at Mirijjawila for which he will also import 20,000 metric tonnes of coal a year. In June 2021, CEA Director General Hemantha Jayasinghe wrote to the Board of Investment (BOI) Chairman granting approval for any additional material — such as coke, blast furnace pellets and iron ore including coal — for use in the proposed steel plant once it is cleared after an environmental impact assessment.
Then, on September 8, 2021, the Ministry of Ports and Shipping wrote to CEA Chairman Siripala Amarasinghe canvassing on behalf of Mr Lokuwithana who had made an appeal to Shipping Minister Rohitha Abeygunewardena regarding his coal import needs.
Shipping Ministry Secretary U.D. Jayalal pointed out that CEA had given only supplemental approval to Lanwa Sanstha for the purpose of unloading coal with two ship unloaders and transportation through conveyor belt from Hambantota Port to the plant at Mirijjawila.
However, since environmental approvals related to Hambantota International Port are not amended accordingly, “now it has become an impediment for Lanwa Sanstha Cement Corporation to enjoy the right conferred to them to unload coal using the ship unloaders installed and transport the same through the conveyor belt constructed in Port premises”, Mr Jayalal pleads.
“It was noted the importance of such amendment as the CEA has permitted unloading and transportation of coal only from the ship unloaders and through conveyor belt due to environmental concerns and norms,” he says.
“Also, please note that driven by the national policy to encourage local investments as much as possible, the Government always considers this cement project as a project of national importance,” he adds. “Therefore, it has been decided to extend immense support to this large-scale investment and port-related industry to commence its operation with the least possible delay.”
On September 27, CEA DG Jayasinghe has responded highlighting the loopholes that allow the coal imports to go through. He says the Coast Conservation and Coastal Resources Management Department (CC&CRMD) granted approval to establish the Magam Ruhunupura Mahinda Rajapaksa Port in Hambantota in 2007 to the Sri Lanka Ports Authority (SLPA) after an EIA under the provisions of the Coast Conservation and Coastal Resources Management Act.
With a view to developing the Hambantota district as one of the main commercial and industrial hubs in the country, an industrial zone was also planned. “Therefore, in issuing the EIA approval, no restrictions were mentioned on coal unloading in port operations,” Mr Jayasinghe says. “As such, there is no need to amend the EIA approval issued for the port project.”
The CEA maintains that the CC&CRMD transferred approval for the EIA to HIPG in 2020. Similarly, the CEA has granted environmental approval to SLPA for establishment of an industrial zone. This was also transferred to HIPG in 2019, Mr Jayasinghe points out.
“The CEA granted environmental approval to the BOISL for construction of a conveyor belt from Hambantota port to the Mirijjawila Export Processing Zone (MEPZ) for transportation of imported raw material for the use in the cement grinding plant operated by Lanwa Sanstha Cement Pvt Ltd within the MEPZ,” he continues. “Since the CEA did not find any barrier on coal-related operations with the consent of the port-operating institute, it was further allowed the BOISL [sic] for transportation of coal via the same belt to meet the energy requirement for the operation of the said cement manufacturing plant.”
According to BOI documents, the developer intends to burn 2000MT of iron ore per day for the steel plant using “a coal-based captive power plant”. Coal usage rate is specified as 285MT per day. He also proposes to employ coal to generate heat for the production of slag cement at the plant currently under construction at Mirijjawila EPZ.
“Use of coal for the cement plant was not indicated in the original application submitted to BOI,” the documents state. This indicates that EIA approval was granted for the cement plant without considering the impact of coal use in the project and that key information impacting the environment had been withheld by the developer.