June 2015 marked a year since 3 people affected by the Thilawa Special Economic Zone (SEZ) Development Project filed an official complaint and request for investigation into JICA’s compliance with its Environmental and Social Guidelines. The 3 requesters claimed negative impacts to their standard of living due to this Japan-Myanmar joint venture project located just outside of Yangon. This was the first time for JICA’s compliance with its safeguard policy to be put under scrutiny.
How have living standards changed at the resettlement site? Has the standards written in JICA’s Guidelines been maintained? The Guidelines state that living standards of affected people should be improved, or at least restored to pre-project levels. Following is an update of developments through mid-May 2015 and an explanation of remaining challenges.
The Examiner’s Report and Recommendation for Improvement
After the Requesters filed their official complaint, JICA’s Examiner spent 5 months investigating the Thilawa SEZ project to determine if JICA had upheld its obligations under its Guidelines. The investigation included a field visit to the resettlement site, and in November 2014, the Examiner released his findings in the “Investigation Report: Thilawa Special Economic Zone Development Project in the Republic of the Union of Myanmar” (hereafter, Investigation Report).
The full report can be downloaded from JICA’s website:
The Examiner’s investigation and understanding of the damage suffered by residents was unfortunately insufficient. His conclusion that JICA did not in “non-compliance” with the Guidelines was a great disappointment to the resettled community (for details, see “Thilawa Residents Criticize JICA Examiner’s Report” http://wp.me/p4o8P1-5b).
Though the Examiner reported no non-compliance, he did include many recommendations in the Investigation Report which he said JICA should support in order to improve project implementation. His recommendations included the following:
- Create more opportunities for transparent negotiations with many residents, taking their needs into consideration
- Improve water drainage
- Construct and repair wells at the resettlement site
- Implement measures to mitigate the changes in resettled people’s lives and livelihood restoration measures (just as job training, household gardens)
- Address toilets and sewage problems at the resettlement site
- Respond to the residents who want to continue farming after resettlement.
Officials at JICA who were overseeing the Thilawa SEZ project wrote an opinion paper responding to the Examiner’s report (December 2014), and they promise sincerity in taking up the Examiner’s recommendations.
(JICA response to Examiner’s report in full:
Experts hired by JICA are currently involved in negotiations with people affected by Phase 1 of the Thilawa SEZ project. Resettlement of people living in the remaining 2,000 hectares of the SEZ is being planned, and we hope that information will be disclosed and disseminated, and that discussions with affected people will actively take place.
Livelihood Restoration and Improvement Measures
Sufficient livelihood restoration measures were not designed nor implemented after residents filed their complaint with JICA’s Examiner, so many people who were unable to find new means of livelihood completely used up the compensation they received. They then borrowed money to make ends meet and fell into debt. There were also cases of people depending on high-interest loans, mortgaging their homes at the resettlement site for loans with 10% interest that had to be paid back within 6 months. But with nowhere else to go, they borrowed again to pay the previous debt, and in this way, saw their debts escalate. Many households were thus under great stress, never sure when they might loose their homes.
In order to do something about this tense situation, negotiations between residents and JICA experts began in January 2015, and the following 3 measures are now being considered.
1) Social Welfare Support Program (SWSP)
Eighty-one households affected by Phase 1 of the SEZ project are eligible for this support. These 81 households include 65 households in the Phase 1 area and 16 households that did not reside in the Phase 1 area but who had farmland there. Of these, 68 households have already been relocated. A total of 3 million kyat (approx 3,000 USD) is to be provided in total. Residents were assisted to open bank accounts, and the assistance is to be paid quarterly in 3 installments (1.8 million kyat, 700,000 kyat, and 500,000 kyat). The first disbursement was completed in April 2015.
Prior to the commencement of the SWSP, 17 of the 81 households were in severe debt. After the first installment of the SWSP was paid, 7 households were able to completely pay off their debt. Three households are expected to be able to pay off all debts after the 2nd and 3rd SWSP payments. This leaves 7 households who will still be in debt even after the last SWSP installment. It is necessary for JICA to continue discussions with these households, collect information on their means of livelihood and provide necessary support and advice so that the residents can complete repayment of their debts.
2) Community Development Fund
People eligible to receive assistance from this fund are residents of the abovementioned 81 households. This fund will provide microfinance assistance based on the needs of the residents. Currently, 45 households are attending workshops organized by an NGO with experience in microfinancing, and they are discussing methods (standards for loans, pay-back periods, frequency, etc.)
Resettled residents who have worked as farmers all their lives are not familiar with what is necessary to start business in a new area. They do not know how much it costs to start a new business initiative, so some are hesitant or confused about how to draw up a microfinance proposal. They require detailed and easy-to-understand support and training. In addition, residents are voicing concern about collective responsibility in the case that they cannot pay back debt. Some want to emphasize equality and say that everyone who wants to receive support should receive it at the same time.
We are hopeful that residents will continue voicing their opinions and that responsible actors will continue listening to their voices, and in cooperation, develop a framework that is in reality useful in restoring livelihood.
3) Vocational Training
Vocational training support was to begin at the end of May 2015. This includes training for people who have only farming experience. Such training will include mental preparation for what it means to be employed by a company (basic skills, work arrangements). It is also necessary to hold sufficient dialogue with residents in advance regarding transportation fees and provision of daily allowances during training periods.
Factories that will be moving into the SEZ are going to start advertising for employees, and it is hoped that there will be employment opportunities and trainings that fit the needs of resettled residents. Working conditions (including wages, methods of payment, transportation support) and work environment also need to be discussed in advance with residents.
As can be seen from the above 3 initiatives, livelihood restoration measures have gradually started. Some of the households that participated in the SWSP have actually been able to pay off their debts, and some have used he remaining amount for immediate livelihood needs, so some initial improvements are being seen.
On the other hand, there are 7 households who will still be in debt after the third SWSP installment is provided. It is urgent to secure a stable source of income and employment as soon as possible. This makes vocational training an issue of urgent importance. As was written in the Examiner’s Investigation Report, plots for gardens at the relocation site should also be provided to resettled families, and this remains an outstanding but important issue.
Together with the development of Phase 1 of the Thilawa SEZ, there is the issue of irrigation water that fed farmland outside the 400 ha area. The lack of irrigation makes it impossible to grow dry-season rice, and there are farmers who continue to lose income as a result. This issue has been neglected completely, even though it was an important point raised in the official request for investigation into JICA’s compliance with its Guidelines.
Improving Infrastructure at the Resettlement Site
Water supply and drainage at the resettlement site have improved somewhat after drilling work was conducted on some of the drainage ditches around the resettlement site. Also, since the height of each household’s plot is different, project proponents hired technicians to survey the area and implement the following measures:
- Bring in soil to fill in and raise the ground level as a flood-prevention measure
- Replace the houses’ wood foundations with concrete foundations. This will prevent foundations from rotting even if there is flooding.
- Regrade toilet tanks so that even if they are inundated, they will not leak.
- Construct concrete thresholds between homes.
At present, work has started at the households that request the work to be done, but there are also cases emerging of insufficient communication between residents and those implementing construction. Improvement is needed in this area.
Some residents are also reporting that the above-mentioned measures are being implemented on the premise that floods will occur. They would prefer that the causes of flooding be investigated and addressed. We hope that there will be progress in improving drainage and more effective measures implemented.
Regarding water supply at the resettlement site, 4 hand pump wells were repaired, and there are plans to build one more. In November 2011, two wells were contaminated with waste water during flooding and could no longer be used. Since then, the polluted water has been collected and a roof and fence were built to improve the condition of the well.
Some households still buy drinking water. Some households have already requested that provision of drinking water be among the things considered for a water supply system to each household. Consideration and implementation of improvement plans needs to be based on the needs of the residents.
Additional infrastructure work at the resettlement site includes emptying toilet sewage tanks, which is in progress, and there are plans to build a community center.
Multi-stakeholder Negotiations and Complaints Mechanism
A Multi-Stakeholder Advisory Group (MSAG) was established for the Thilawa SEZ development project, and its first session was held on May 15 in Yangon. Currently, the members of the MSAG include various actors including the Thilawa Social Development Group (TSDG–a civil society group started by people affected by the Thilawa SEZ, including the 3 residents who filed the complaint with JICA), local NGOs, and international NGOs. From the project proponent side, members of the MSAG are the Thilawa SEZ Management Committee and MJTD (Myanmar-Japan joint venture corporation). The Chair of the committee is the Myanmar Center for Responsible Business (MCRB), and it was decided that the JICA expert team would function as the Secretariat. JICA itself is not a member of this committee.
Whether this committee will serve as a meaningful place for residents, and whether it will be able to learn from the mistakes of Phase 1 to prevent and mitigate problems in the next phase (2,000 ha) remain to be seen. The roles that JICA and Japanese companies will fulfill also require ongoing monitoring.
Applying what we have learned
The progress being made by JICA and the Burmese government to speak directly with residents is a welcome development. It must be remembered, however, that people suffered damages that could have been prevented during the whole time it took to design and begin implementing these measures.
In spite of the existence of the JICA Guidelines for Environmental and Social Considerations–which are of a comparable quality in comparison with other international standards–it is a concern that such necessary measures to ensure livelihood restoration were not designed and implemented from the very beginning. Why did it require farmers and day laborers to study international policies and file a formal complaint against JICA for meaningful dialogue to start? These are questions relevant not only to the Thilawa SEZ, but to all future projects. These mistakes should not be repeated, and in order to ensure that they are not repeated, these questions should be seriously examined by the Japanese government and JICA.
There is a need to really face the lessons as well as the answers to the above questions which were not forthcoming in the Examiner’s Investigation Report.
**Basic facts about the Burma (Myanmar) Thilawa Special Economic Zone Development Project
An infrastructure package promoted as a public-private joint project. Located 23 km southeast of central Yangon and covers 2,400 hectares. Both manufacturing and commercial purposes; comprehensive development. In Phase 1 (400 hectares) JICA decided to provide foreign investment financing (ODA that supports the private sector). Japanese corporate participants are Mitsubishi Corporation, Sumitomo Corporation, and Marubeni. JICA is now conducting a preparatory survey of the 2,000 hectare area, and is supporting the environmental assessment and resettlement plan design. Phase 1 began in November 2013, and 68 households (approx 300 people) have already been relocated. In the remaining 2,000 hectare area to be developed, an additional 1,000 families (approx 4,000 people) are facing resettlement.