Thursday, July 16, 2009

SWEDISH COMPANY IN BAGAMOYO Multibillion biofuel project under fire


THE HOPE of establishing a sugarcane plantation and ethanol project on a 22,000 hectare land in Bagamoyo by a Swedish energy company SEKAB, is likely to fade in thin air due to irregularities already noted in preliminary procedures, Business Times can now reveal.

The leased site of the huge project lies near Zaraninge Forest reserve in Bagamoyo, with projections to expand it to 400,000 hectares or more to include also areas in Rufiji.

According to Prof Seif Madoffe of Sokoine University, SEKAB's project is one of several that are intended to be located near the coast so that ethanol or vegetable oil may be easily exported by sea.

The done recently wrote that the plantations are also placed where there is good availability of fresh water, and in places remote enough to make it 'easier' to marginalise local villagers and move them out of their traditional areas at a low cost to the rich corporations (if indeed any compensation is paid at all.

Available information from Sweden shows SEKAB had hired Orgut, an international environmental consultancy firm to do the mandatory Environmental Impact Assessment (EIA) and submit report to the National Environmental Management Council (NEMC) for approval.

According to Melinda Fones Sundell, who is Orgut’s Team Leader their firm experienced 'serious' contractual problems with SEKAB right from the start.

Sundell told Development Today, a Swedish paper, that when Orgut signed the contract to carry out the EIA, SEKAB had not yet completed feasibility study for the project, but Orgut accepted to go ahead with the EIA, on the basis of a promise by SEKAB that feasibility study was forthcoming and would be concluded before Orgut finishes its study.

But until the completion of the work in May last year, Orgut had not received any report from SEKAB, Sundell said.

On top of that, instead of handing over Orgut's report to NEMC for evaluation SEKAB altered some information, according to Sundell.

"After receiving Orgut’s report, SEKAB made changes to the conclusions, downplaying Orgut’s prediction that there was not enough water to support irrigation of such a large area of sugar cane," said Sundell.

The feasibility report was crucial because it would have provided important facts about technical details on the proposed plant, the use of bagasse, the sugarcane waste and irrigation and according to procedures it is always recommended that feasibility study precedes EIA.

The original report had identified several environmental problems, for example, that water supply was insufficient, but these problems were subsequently glossed over and played down in SEKAB’s altered version of the report, according to Sundell.

She asserted that SEKAB “rewrote the conclusions in the best light: you get a different flavour”. Consequently, Orgut decided to distance themselves from the altered version of the study, she said.

According to Orgut, SEKAB was unhappy with strong language about water issue. However, the fact was that Wami River, which would provide water for irrigation would be dry or supply insufficient water during the dry season.

“SEKAB chose not to put all our conclusions there," said Sundell. “They wrote the conclusions in the best light. You get a different flavour."

The way forward

On the positive side the project may provide employment to the residents and provide new export product to the country although experience shows that any such benefits tend to accrue to educated immigrants from other areas.

In this case, SEKAB might produce "green energy" for the rich of the world while poor Tanzanian smallholders and pastoralists will lose their livelihood basis.

Also agriculture would receive modern technology, unused land would be put into service and local communities would be strengthened by some new sources revenues.

According to information that is available on the internet, two years ago President Kikwete toured areas that SEKAB wanted to invest “and talked about many benefits”.

But on the negative side if left to continue with the project thousands of Tanzanians around Bagamoyo area are likely to lose arable land, a situation likely to exacerbate hunger crisis.

And, it is anticipated that the plant would increase emissions of carbon dioxide.

Other impacts include endangering species of birds and at least 34 mammalian of species of the IUCN “red list” would be affected.

The Wami River would be dry as sugar needs much water for irrigation. By all accounts, demerits outweigh merits.

There has been a wave of foreign investors acquiring huge hectares of land for biofuels in Africa since 2000’s. For instance, DAEWOO,a Korean company acquired one million hectares in Madagascar. This represents half of the arable land of the country.

In Tanzania there has been an increasing demand of land for biofuel companies since 2005.

Most of these companies promise to carry social and environment responsible programmes.

SEKAB’s original plan had been to establish 400,000 hectares of sugar cane plantations.

But recently the company has been on the verge of bankruptcy when its owners in Sweden decided to end the flow of money into the company in the country.

SEKAB is now trying to procure aid funds from Norway and Sweden in order to continue with its activities.

The company is negotiating with rural leader in Rufiji to get huge hectares of land for the same project. SEKAB promises healthcare, schools, roads and employment among other things.

According to a study by OPEC Fund for International Development (OFID) “Biofuels and Food Security: Implications of an accelerated biofuels production” of March this year, the biofuel companies have increased the hunger problem worldwide.

It says millions of hectares in rural areas in the world have been taken away from local farms and allocated for biofuels. By last year, at least 100 million people were undernourished.

“In biofuel target scenario about 140 million people are threatened by hunger...the results for 2020 still show an increase of 80million people,” predicts the OFID study.

From Business Times

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