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Shwe Taung Cement Factory, Mandalay, Myanmar


Description

Plans to expand a coal-fired cement plant in Tharzi district, Mandalay, have provoked opposition by villagers and civil society groups. The project entails not only the expansion of the cement factory, but also an adjunct limestone quarry and a coal mine in Kalewa, operated by the firm to exclusively supply the factory with raw materials [1]. The project is developed by the Shwe Taung Group (STG), whose majority shareholder Aik Htun is a controversial figure. He is believed to be linked to the former military regime, to narcotics trade and to money laundering, according to an open letter sent by a civil society coalition opposing the project [see 1]. Funding for the coal-fired cement factory comes from the International Finance Corporation (IFC) – the private arm of the World Bank [2]. While the World Bank pledged not to finance coal-power plants for Myanmar’s national grid due to their devastating health, environmental and climate impacts [1], the Bank accepts – with surprise for civil society organizations - the use of coal power for Myanmar’s cement factories [1,3].

The company began operations in 2010 [3], close to Kyubin village, where multiple indigenous communities live. In an open letter [1], civil society organizations have reported that locals are concerned about the project’s impacts. Several disputes have emerged, caused for instance by the bulldozing of farmland without prior notice and inadequate compensation procedures. Juridical harassment against villagers who complain about their land and livelihood loss was also mentioned [1]. According to the letter, villagers reported that the Environmental Impact Assessment (EIA) had serious shortcomings - some stated that a merely “5 minutes question and answer” session was held [1]. Health and environmental impacts from the expansion of the coal mine and the factory were expected to be high. They include pollution of lands and water bodies, deforestation, habitat destruction, livelihood loss and potential cultural impacts in the surrounding area [1]. Both the coal mine and the limestone quarry are in areas classified as a Critical Habitat in the IFCs’ Environmental and Social Review Summary, informs the letter [1]. After the factory’s expansion, villagers complained about skin diseases which they attribute to the dust from the cement factory [4]. The use of coal and the IFC’s support to the expansion plans have been major points of contention among civil society groups, who “emphasize the sheer irresponsibility of this investment and the multiple ways it undermines the IFC’s commitment to sustainable investment and ‘shared prosperity’ through private sector development” [1].

Land disputes in the area have been ongoing for decades, says a news article [4]. Already in 1983, land was seized by the government and in 2008 several private companies were given land to develop cement factories, taking advantage of the nearby limestone hills. In 2012, in the context of new political freedoms, activists started to campaign for the return of their land [1]. Complaint letters were sent and national civil society organizations such as MATA (Myanmar Alliance for Transparency and Accountability) got involved. Attempts to settle the disputes between the company and the villagers followed and several public meetings were organized. Controversies, however, remained [4].

On June 7, 2017, a coalition of 174 civil society organizations sent an open letter to the IFC, urging the Board to reject funding for this project [1]. The letter expressed concerns over the extraction and burning of large amounts of coal through the controversial Shwe Taung Cement Factory: “The IFC Board should refuse funding for an environmentally destructive coal-reliant project in a critical biodiversity area, which has caused immense social problems at the local level, and only serves to enrich a businessman with known ties to the former military regime and suspected connections to the narcotics trade. The IFC's reputation, and the people of Myanmar, deserve better.” [1]

In a response, the IFC backed the project and the EIA consultations, arguing the project would help to meet the growing demand for raw materials for construction and, moreover,  provide 200 jobs [3]. On July 31, 2017 the project received green light by the IFC, although the US representative and executive director voted against it because of environmental concerns, such as impacts on endangered species and lack of emission data [4]. IFC Investment began on January 4, 2018 [2]. 

Basic Data

NameShwe Taung Cement Factory, Mandalay, Myanmar
CountryMyanmar
ProvinceMandalay
SiteTharzi district
Accuracy of LocationHIGH local level

Source of Conflict

Type of Conflict (1st level)Infrastructure and Built Environment
Type of Conflict (2nd level)Coal extraction and processing
Building materials extraction (quarries, sand, gravel)
Thermal power plants
Manufacturing activities
Specific CommoditiesCement
Land
Coal

Project Details and Actors

Project DetailsThe Shwe Taung Group (STG) expanded into the cement business in 2010 by setting up the Shwe Taung Cement Co Ltd (STC) to meet the growing demand for concrete and cement in Myanmar. Limestone and coal is provided to the factory through its wholly owned subsidiary, Shwe Taung Mining (STM), which holds relevant mining concessions [5].

According to the Environmental and Social Impact Assessment (ESIA) from April 2017, the cement factory expansion requires the extraction of 150,000 tons of sub-bituminous coal per year. This entails the expansion of a 3,378 acre (ca. 1,367 ha) coal mine in Kalewa (Sagaing Division) [1].

The project further entails the expansion of a limestone quarry in Tharzi, Mandalay. According to the open letter sent by the CSO coalition, locals have reported that the quarry, which uses drill and blast extraction methods, has negative impacts on biodiverse forests as well as on local water sources [1].

About 600 households live in two nearby villages [1]. In 2017, only six locals were reported to be employed by the company for low-skilled and low paid jobs [1].

According to the IFC, the expansion of the cement factory has a total cost of 110 million USD. The IFC decided to invest 15 million USD in equity stakes and to provide a loan of 20 million USD [2].

The expansion would increase the cement grinding capacity to from 2,800 to 7,200 tonnes a day and the clinker production capacity from 1,500 to 5,500 tonnes a day [2,4]. The company distributes cement all over Myanmar under the brand name “Apache Portland Cement" [2,6].

The Shwe Taung Cement Company (STC) is part of the Shwe Taung Group (STG) [5].
Project Area (in hectares)unknown
Level of Investment (in USD)110,000,000 USD
Type of PopulationRural
Potential Affected Population600 households
Start Date2010
Company Names or State EnterprisesShwe Taung Corporation from Myanmar
Shwe Taung Cement Co Ltd (STC) (STC) from Myanmar - cement factory company
Shwe Taung Mining (STM) (STM) from Myanmar - supplies coal and limestone to the factory
International and Financial Institutions International Finance Corporation (of World Bank) (IFC) from United States of America
Environmental justice organisations and other supportersOrganisations that signed the open letter to the IFC, urging the IFC Board to reject funding for this project:

Myanmar Alliance for Transparency and Accountability (national office)

EarthRights International (ERI)

Bank Information Center

Paung Ku Myanmar

ဘာသာေပါင္းစံုညီၫႊတ္ေရးအဖြဲ႕

Ayeayarwaddy West Development Organization, AWDO. (Magway region)

Satodetayar Development Organization, SDO.

Yoema Chin (Satodetayar)

Ayeayarwaddy West Development Organization – AWDO, farmer group. (Ngaphe)

Independence Asho Chin Nation Force.

Pwintphyu Development Organization

Myanmar Alliance for Transparency and Accountability – MATA (Magway)

Myanmar China Pipeline Watch Committee – MCPWC (Minbu)

Ayeayarwaddy West Development Organization – AWDO, farmer group (Minbu)

Thuriya Sandra Environmental Watch Group

ေရႊျခံေျမကြန္ရက္ ကြမ္းျခံကုန္းၿမိဳ႕

စိမ္းလန္း ျပင္ဦးလြင္

Community Response Group – COMREG

Tarkapaw Youth Group

Kachin Peace Network

Peace & Open Society Kyaukse

Myanmar-China Pipeline Watch Committee – MCPWC

Myanmar Alliance for Transparency & Accountability (Mandalay)

Farmer Union Kyaukse

ပိြဳင့္- ရိုးရာ၀န္းက်င္ ျမွင့္တင္ေရးအဖြဲ႕ (POINT-Promotion of Indigenous and Nature Together)

Karen Environment and Social Action Network – KESAN

Upper Chindwin Youth Network – UCYN

Ayeyarwaddy Transparency and Accountability Association (ATAA)

Dawei Development Association – DDA

IFI Watch Myanmar

IFI Watch Kyunsu

Green Network Mergui Archipelago

The Mergui 88 Generation Open Peace and Open Society

ေတာင္သူလယ္သမားမ်ားႏွင္႔လယ္ယာလုပ္သားမ်ားသမဂၢ (ၿမိတ္ခရိုင္)

IFI Watch Pakokku

Sein Yanung So

Natural Green Alliance

Transparency and Accountability Network Kachin State (TANKS)

Humanity Institute

Our future initiative (OFI)

Southern Youth

ေမတၱာလက္ကမ္း

ၿမိတ္ၿမိဳ႕နယ္ေတာင္သူလယ္သမား သမဂၢ

လမ္းစအဖြဲ႕

Tanintharyi Fisheries Partnership

Tanintharyi Green Network

Motherland

သယံဇာတေစာင့္ၾကည့္ေရးအဖြဲ႕ (တနသၤာရီ)

သယံဇာတေစာင့္ၾကည့္ေရးအဖြဲ႕ (ပေလာက္)

၈၈ မ်ိဳးဆက္ (ပုေလာ)

၈၈ မ်ိဳးဆက္ (ၿမိတ္)

အမ်ိဳးသမီးမ်ား သမဂၢ (ၿမိတ္)

ေသြးခ်င္းသစၥာအဖြဲ႕

NNER – Myeik

ABSDF ရဲေဘာ္ေဟာင္းအဖြဲ႕

ဆရာမ်ားသမဂၢ (ၿမိတ္ခရိုင္)

သိေႏၶာ သယံဇာတ ေစာင့္ၾကည့္ေရးအဖြဲ႕ (တနသၤာရီ)

၈၈ မ်ိဳးဆက္ (ေကာ့ေသာင္း)

ေတာင္သူလယ္သမားသမဂၢ(ေကာ့ေသာင္းၿမိဳ႕နယ္)

ေက်ာက္မီးေသြးေစာင့္ၾကည့္ေရးအဖြဲ႕

ပါခ်န္ျမစ္ထိန္းသိမ္းေရးအဖြဲ႕

Our Future Imitative (ဘုတ္ျပင္း)

Tanintharyi Fisheries Partnership (ေကာ႔ေသာင္း)

ေပါက္တိုင္းေခ်ာင္းဖြံ႔ၿဖိဳးေရးေကာ္မတီ(ထားဝယ္)

Dawei Watch Fundation

ကလုံးထာ ဖြံ႕ၿဖိဳးတိုးတက္ေရး ေကာ္မတီ

Community Sustainable Livelihood Development Committee

သတၱဳတြင္းေစာင့္ၾကည့္ေရးအဖြဲ႕ Min Monitors Group

Dawei Youth Fellowship

တနသၤာရီမိတ္ေဆြမ်ားအဖြဲ႕ Thanintheri Friends

Green Generation

ေတာင္သူလယ္သမားသမဂၢ(ထားဝယ္)

အမ်ိဳးသမီးမ်ား သမဂၢ (ထားဝယ္)

Dawei Pro-bono Lawyers Network

Karen Affair Committee

သံလြင္ကြန္ရက္

အေျခခံဥပေဒျပင္ဆင္ေရး ျပည္သူကြန္ရက္

မိကရင္လူငယ္အဖြဲ႕

သက္ေမြးအေထာက္အကူျပဳအဖြဲ႕

ဆာမူေထာ္

စာေရးဆရာအသင္း- ဘားအံ

လူမူထာအဖြဲ႕

Twee Community Development Network

ဟူဖိုကေပၚအဖြဲ႕

ဇြဲကပင္ပံုရိပ္အဖြဲ႕

Karen Human Right Group

Free And Justice

ေထာ္မဲပါအဖြဲ႕

Khu Mee Lit: Cult:Association

Khu Mee Women Organization

Mon Land Development and Natural Resources Conservation Organization

Chin Civil Society Network

Kanpatlet Environment Conversation Organization

Kanpatlet Land Development Organization

Matupi Community Development Organization

Chin Youth Organization

Chinland Natural Resource Watch Group

Beauty of Mt. Chin

ZCD + ZDA – Zomie Congress for Democracy + Zomie Dress Agency

Horn Bill Organization

Small Scale Industries Development

Chin Green Network

Falam Mino Paulkom

Kachin Development Networking Group (KDNG)

Airavati

Women League of Burma WLB

K’Cho Land Development Association ခ်ိဳးေျမဖံ႕ြ ျဖိဳးတိုးတက္ေရးအသင္း

Open Development Foundation

Chin Women Development Organization

Yae Kyee Sann

Youth Development Network

Lut Lat Pwint Lin Social Association

Myat Won Thit

Myint Ma Kha Guard

Public Network

EDU Wave

Kyauk Gyi Development

East Light Development Group

Myanmar Youth Star

Bago Youth Network

Green Equations

ကရင္နီျပည္ လူငယ္မ်ား သမဂၢ

ကရင္နီ အမ်ိဳးသားလူငယ္အစည္းအရံုး

ကယန္း မ်ိဳးဆက္သစ္ လူငယ္

ကရင္နီျပည္ ေတာင္သူ လယ္သမားမ်ား သမဂၢ

ကယန္းအမ်ိဳးသမီးအစည္းအရံုး

ကယား(ကရင္နီ)ျပည္နယ္ေက်ာင္းသားမ်ားသမဂၢ

ထာဝစဥ္ စိမ္းလန္းစိုေျပ ကရင္နီျပည္

Kayah EarthRights Action Network

မဇၨိမႏွလံုးသားလူငယ္

အထက္ခ်င္းတြင္း လူငယ္ကြန္ရက္

အစိမ္းေရာင္ေျမ

ထီးခ်ိဳင့္ကြန္ယက္

မ်ိဳးဆက္သစ္လူငယ္

နာဂလူငယ္ကြန္ယက္

နိစၥဓူ၀ ပညာေရး

အင္းသာ ေကာ္မတီအဖြဲ႕

ျဗဟၺ၀ိဟာရိ

၀န္သုခ

ေတာင္ကုန္းေဒသ ေစာင့္ၾကည္႔ေရး

အစိမ္းေရာင္လြင္ျပင္

အင္ဒိုင္းႀကီးပရဟိတလူမႈကူညီေရးအသင္း

ေနရဥၨရာလူယ္ကြန္ယက္

ေတာင္တြင္းလူမႈဖြံ႕ၿဖိဳးေရးအသင္း

ႏုိင္ငံသားႏွင့္ ႏုိင္ငံသားအခြင့္အေရးလႈပ္ရွား ေဆာင္ရြက္ေရးအဖြဲ႔

တေအာင္း ေက်ာင္းသားလူငယ္အစည္းအရံုး

မ်ိဳးဆက္သစ္(ရွမ္းျပည္နယ္)

ရွမ္းစာေပႏွင့္ ယဥ္ေက်းမႈ အသင္းအဖြဲ႕

၈၈ ျငိမ္းခ်မ္းေရးႏွင့္ပြင့္လင္းလူအဖြဲ႕အစည္း

ပအို႔ပ္လူငယ္အဖြဲ႕အစည္း

ရွမ္းလူငယ္(ေတာင္ၾကီး)

တရားမွ်တမႈ ေစာင့္ၾကည္႔ေရးအဖြဲ႕

ေတာင္သူလယ္သမားႏွင့္လယ္ယာေျမအသင္း

ရွမ္းစာေပႏွင့္ ယဥ္ေက်းမႈ အသင္းအဖြဲ႕

သိန္းနီ သဘာ၀ပတ္၀န္းက်င္ထိန္းသိမ္းေရး အဖြဲ႕

ေရႊလိေမၼာ္လူမႈကြန္ယက္

ကြတ္ခိုင္ သဘာ၀ပတ္၀န္းက်င္ထိန္းသိမ္းေရးအဖြဲ႕

ရွမ္းစာေပႏွင့္ ယဥ္ေက်းမႈ အသင္းအဖြဲ႕(ရွမ္းေျမာက္လူငယ္အဖြဲ႕)

ရွမ္းစာေပႏွင့္ယဥ္ေက်းမႈအဖြဲ႕

တေအာင္း ေက်ာင္းသားလူငယ္အစည္းအရံုး

အင္းစိမ္းေျမ သဘာ၀စိမ္းလန္းစိုေျပေရး

တေအာင္း(ပေလာင္)စ/ယ ေကာ္မတီ

ကြတ္ခိုင္တေအာင္းလူငယ္

ေတာင္သူလယ္သမားအသင္း

ထာ၀ရဂရုဏာရွင္အဖြဲ႕

တေအာင္းအမ်ိဳးသမီးမ်ား အဖြဲ႕အစည္း

၈၈မ်ိဳးဆက္သစ္ ျငိမ္း/ပြင့္ (ရွမ္း/ေျမာက္)

၈၈မ်ိဳးဆက္သစ္ ျငိမ္း/ပြင့္ (ရွမ္း/ေရွ႕)

ဝုန္းေမတၱာ

လီဆူစာေပႏွင့္ ရိုးရာယဥ္ေက်းမႈဖြံ႔ၿဖိဳးေရးအသင္း

အႏႈိုင္းမဲ့လူမႈကူညီေရးအသင္း

ဓႏုစာေပယဥ္ေက်းမႈေဒသဖြံ႔ၿဖိဳးေရးအသင္း

မ်ိဳးဆက္သစ္ သထံုေလး

ေတာင္သူလယ္သမားမ်ားႏွင့္ ေျမယာလုပ္သားမ်ား သမဂၢ

The Conflict and the Mobilization

Intensity of Conflict (at highest level)MEDIUM (street protests, visible mobilization)
When did the mobilization beginIn REACTION to the implementation (during construction or operation)
Groups MobilizingFarmers
Indigenous groups or traditional communities
Local ejos
Neighbours/citizens/communities
Forms of MobilizationDevelopment of a network/collective action
Involvement of national and international NGOs
Objections to the EIA
Official complaint letters and petitions
Public campaigns

Impacts

Environmental ImpactsVisible: Air pollution, Noise pollution
Potential: Biodiversity loss (wildlife, agro-diversity), Food insecurity (crop damage), Global warming, Loss of landscape/aesthetic degradation, Soil contamination, Surface water pollution / Decreasing water (physico-chemical, biological) quality, Deforestation and loss of vegetation cover
Health ImpactsVisible: Mental problems including stress, depression and suicide, Other Health impacts
OtherExposure to dust from cement manufacturing
Socio-economic ImpactsVisible: Land dispossession
Potential: Loss of livelihood, Loss of traditional knowledge/practices/cultures

Outcome

Project StatusIn operation
Pathways for conflict outcome / responseCompensation
Do you consider this as a success?No
Why? Explain briefly.The IFC financed the project despite concerns over environmental and social impacts voiced by a large coalition of civil society organisations.

Sources and Materials

Legislations

2012 Foreign Investment Law
http://www.burmalibrary.org/docs15/Foreign_Investment_Law-21-2012-en.pdf

2016 Myanmar Investment Law
https://www.dica.gov.mm/sites/dica.gov.mm/files/document-files/myanmar_investment_law_official_translation_3-1-2017.pdf

2015 Environmental Impact Assessment (EIA) Procedure
2015 Environmental Impact Assessment (EIA) Procedure

2012 Environmental Conservation Law
http://www.burmalibrary.org/docs15/2012-environmental_conservation_law-PH_law-09-2012-en.pdf

Links

[1] Open letter to the IFC regarding its proposed financing of a crony-owned cement factory and coal mine in Myanmar. 7 June 2017. Undersigned by 147 civil society organisations. (accessed online 12.09.2018).
https://earthrights.org/wp-content/uploads/070617_open_letter_to_the_ifc_regarding_its_proposed_financing_of_a_crony-owned_cement_factory_eng.pdf

[2] IFC Project Information Portal - STG Cement. (accessed online 12.09.2018).
https://disclosures.ifc.org/#/projectDetail/SII/38831

[3] The Irrawaddy, 26 June 2017. "World Bank Arm Defends Mandalay Cement Factory Project Amid Civil Society Opposition". (accessed online 12.09.2018).
https://www.irrawaddy.com/news/burma/world-bank-arm-defends-mandalay-cement-factory-project-amid-civil-society-opposition.html

[4] Forntier Myanmar, "At a controversial cement plant project, waiting for the dust to settle". (accessed online 12.09.2018).
https://frontiermyanmar.net/en/at-a-controversial-cement-plant-project-waiting-for-the-dust-to-settle

[5] Shwe Taung Cement Co. Ltd. website. (accessed online 12.09.2018).
http://www.shwetaunggroup.com/overview/building-materials/summary-of-investment-information-sii/

[6] Apache Cement Website, Shwe Taung Cement Col Ltd. (accessed online 12.09.2018).
https://www.apachecement.com/

Media Links

The company's promotional video
https://www.youtube.com/watch?time_continue=32&v=Gpv32seHB3M

Other Documents

Villager blames company for causing the skin aliment Credit and Source: Victoria Milko | Frontier. https://frontiermyanmar.net/en/at-a-controversial-cement-plant-project-waiting-for-the-dust-to-settle
https://file.ejatlas.org/docs/d_Villagers_blame_company_Foto__Victoria_Milco__Frontier.jpg

Map Credit and Source: Frontier Myanmar. https://frontiermyanmar.net/en/at-a-controversial-cement-plant-project-waiting-for-the-dust-to-settle
https://file.ejatlas.org/docs/d_stg-tharzi-map_source_frontier_myanmar.jpg

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ContributorEJatlas Southeast Asia Team (ejatlas.asia"at"gmail.com)
Last update17/09/2018

Images

 

Map

Credit and Source: Frontier Myanmar. https://frontiermyanmar.net/en/at-a-controversial-cement-plant-project-waiting-for-the-dust-to-settle

Villager blames company for causing the skin aliment

Credit and Source: Victoria Milko | Frontier. https://frontiermyanmar.net/en/at-a-controversial-cement-plant-project-waiting-for-the-dust-to-settle