Shwe Gas Movement

Workers build a road near Kyaukpyu as a truck carrying pipeline passes by. Pic: Juliet Shwe Gaung

WORK on an ambitious US$4 billion oil and gas project linking Rakhine State to China’s Yunnan Province is marching forward relentlessly but locals in project areas are reporting a number of concerns.

When the project is finished in 2013, it will allow China to unload oil at a port on Made Island in Rakhine State’s Kyaukpyu township and transport it across Myanmar, minimising reliance on the Malacca Straits. Additionally, natural gas from the Shwe project in the Rakhine offshore area will be piped to Myanmar’s energy hungry northern neighbour.

China National Petroleum Corporation (CNPC) is in charge of the project through its South-East Asia Pipeline Company Ltd but partnering with the Ministry of Energy through Myanma Oil and Gas Enterprise (MOGE), while private companies from four other countries also have stakes.

However, locals in project areas reported a number of serious complaints to The Myanmar Times during a recent visit to Rakhine State. These ranged from wage disputes for workers involved in road construction, non-transparent land compensation payments to farmers, and damage to farmland beyond the scope of the project.

CNPC is also funding the Friendship Association for the Myanmar-China Pipeline, a group established by the companies involved in the pipelines to communicate with the media and to investigate and resolve complaints.

‘Long hours, shady contractors’

Roadworkers sift pebbles at a roadbuilding project near Kyaukpyu. Pic: Juliet Shwe Gaung

Workers helping to upgrade the Kyaukpyu-Yangon road said they must prepare their own lunches and must care for themselves if they are injured while working, despite travelling large distances every day.

“We work from 7:30am to noon and then 1:30pm to 6:30pm or 7pm,” said Ma Mya Yin Oo, who travels two hours from Tha Pyay Gwin village to work on the road. “We get paid overtime after 5pm – sometimes K500 and other times K1000,” she said on a day that the thanakha on her face was streaked with sweat and the temperature hovered above 37 Celsius in the shade.

Ma Mya Yin Oo added that she is paid K2000 a day, while the men receive K2500.

Before joining the road building project Ma Mya Yin Oo said she weaved fishing nets for a living.

“We would be paid K1000 for each net, which would take up to two days to weave,” she said.

However, the lure of higher wages had drawn many of her fellow villagers to the construction project.

“There are 22 people from my village building this part of the road,” she said.

U Poe San, the finance officer for the Rakhine Nationalities Development Party (RNDP) in Kyaukpyu, said many people had found employment on the project but added that some serious labour disputes had also arisen.

“Myanmar Golden Crown Co, which was hired by Daewoo [a subcontractor for Hyundai Heavy Industries] as a contractor to find workers, promised to pay workers K9000 a day.

“But the agent told workers they would only receive K4500 and he would take the rest as his fee,” he said.

“The workers agreed at that point but then the agent told them they would need to sign a contract showing that they were being paid K9000 a day,” said U Poe San. He said 125 workers had complained to the RNDP after they were presented with the contract by Myanmar Golden Crown.

“I advised them to visit the government’s labour office in Kyaukpyu and said we would submit a report on the issue to the hluttaws.

“In the end the workers were paid for four-and-a-half day’s work at K9000 a day. But immediately afterward, the company fired all of them,” he said.

He added that many of the workers had come from remote islands such as Myay Pone and had already paid up to K6000 as agent fees.

A spokesperson for the Friendship Association for the Myanmar-China Pipeline said responsibility for labour hire rested with the engineering, procurement and construction (EPC) contractors, not South-East Asia Pipeline Corp

“During the construction period, the [pipeline] owner (SEAGP) assigns EPC contractors to construct the pipelines through contracts [that] stipulate that the contractor should be responsible for all aspects of the pipelines including the quality, safety and environment … The owner shall hire a company to supervise the construction [works] of contractors and fulfil the acceptance check. After the acceptance, all the responsibilities for the pipelines shall be transferred back to the owner,” the spokesperson said.

‘Little support for farmers’

Farmers said insufficient information was provided by local and township authorities on compensation for land acquired for the project, with large disparities in amounts paid from region to region, said U Poe San.

Farmers in Mandalay and Magwe regions have reportedly been paid K3.6 million an acre, while those in Rakhine State were only given K1.8 million or less, he added.

U Poe San said most farmers did not receive with any help over the land acquisition negotiations, adding that farmers from 19 villages in Kyaukpyu township had been paid compensation.

Village heads had routinely failed to provide important information concerning the compensation rates paid for different crops and farmland, said U Poe San.

U Poe San added that farmers had also complained about the spoiling of their farmland as a result of earthworks.

“When the first rains fell in early June, loose soil and rock from the roadside washed into the surrounding fields,” he said, adding that with many parts of Rakhine State receiving 200 inches of rainfall annually, the problem could easily increase as rainy season progresses.

U San Thar Kyaw, a 60-year-old farmer in Pya Dae village who tills about 5 acres of land, said nearby construction work had spoiled part of his fields.

He said his land was alongside a hill where Punj Lloyd, an Indian company that is subcontracting on the gas pipeline project, was building a worksite to support the pipeline. The construction work dislodged rock and earth that fell onto his farmland.

However, U San Thar Kyaw was told by the village head that he needed to provide documents showing he owned the land in order to get compensation.

“But we had already paid K100,000 to clear the earth that had fallen onto the land,” he said.

He added that waste water from the building on the hill also flowed onto his land.

“I could not stand the smell and went to Kyaukpyu to inform the RNDP. The district doctor came to see and as a result of his complaints I signed a statement saying that the sewage system they [Punj Lloyd] had built was not appropriate,” he said.

“The just dug a hole and never bothered to fill it back in,” he added.

A spokesperson for the Friendship Association for the Myanmar-China Pipeline said the pipeline project department would send a previous article published by The Myanmar Times in June to Punj Lloyd as a warning.

U Maung Chan Nu, the head of Kat Tha Pyin village tract, said no open discussion on compensation had been held with the five villagers whose land was acquired for the pipeline.

“Township officials said the compensation rates were set according to the productivity of the land. We had no idea how much was paid for land that produced 60 or 70 baskets of paddy per acre,” he said.

A yield of 60-70 baskets an acre is considered a good harvest in the area.

“Nobody asked us anything about our land – the land department just told us the rates. But we knew all along that we would only be paid compensation if we could prove we owned the land,” said U Maung Chan Nu.

He said the compensation rates were only given verbally and he did not have enough time to write all the information down. No written information was provided.

“We didn’t dare to ask for information,” he added.

U Hla Shwe, 41, from Hnan Pae Taung village, who owns a farm and works as a primary school teacher, represented farmers from his village and visited the township office to find out what compensation would be paid.

“The township office had documents showing how much compensation would be paid for different types of land. I found that my land was listed as type R1 and was worth K1.8 million an acre, while R2 land was valued at K1.6 million and owners of R3 land would be paid compensation of K1.4 million,” he said.

However, he said he was not paid full compensation for the 0.25 acres of his land that was affected, which would have been about K480,000. Instead, he was paid K330,750, adding that other villagers received even less.

“I went to the township office and complained about the miscalculation but the official said the compensation documents had already been sent to Nay Pyi Taw,” he said.

He added that villagers were told that construction work would begin in December last year, after harvest time. However, work began in October before the monsoon paddy was ready for harvest.

“When I asked why they had started work before we’d harvested the paddy I was told that the compensation had already been paid,” he said.

Si Maw village farmer U Aung San Kyaw, 53, said he had no complaints about the compensation he was paid but was annoyed that he had lost his job.

“We had worked our farm for generations,” he said, adding that he had so far been unable to buy any other land in his community.

Farmers were paid compensation in two instalments of 50 percent, one in October and the second in February.

Mr Zhou Ming Quan, manager of the land compensation department for the project, said payments were made in two instalments because it took from six to eight months to finalise approvals.

“In consideration of the principle of ‘paying before use’, the time schedule of the pipeline project and the full utilisation of dry seasons, the land acquisition and compensation team formulated the [compensation] plan with the approval of MOGE, local authorities and villagers,” he said.

He said compensation totalling K23.5 billion had been paid for land permanently acquired for the project, with a further K1.2 billion paid for temporary acquisitions.

“More compensation is still ensuing,” he added. “According to our surveys, most of the farmers who have received the compensation are satisfied

“One farmer we surveyed said he would use the compensation money to settle his debts and buy gold for savings. He told us he did not want to buy any more land because farming did not make him enough money,” he said.

Mr Zhou Ming Quan said acquisition and compensation work had not started in the mountain areas in Rakhine State and northern Myanmar.

Where both pipelines run side-by-side, a total of 30 metres has been compulsorily acquired, while in places where there is only one pipeline the buffer is 20 metres.

Other land acquired includes those slated for use as offices and depots for the transport and management department, pump stations and valve chambers, he said.

Temporary land includes construction sites, pipe yards and material transfer stations that will only be needed for the construction phase.

He said there are four land acquisition and compensation teams – one for each state or region crossed by the pipelines.

“The teams comprise officials from the Ministry Of Energy, MOGE, personnel from the related departments of local governments and personnel from the South East Asia Gas Pipeline Co (SEAGP) and South East Asia Crude Oil Pipeline Co (SEAOP),” he said.

He said the grades of compensation paid to farmers was discussed “among the villagers, government and the companies”, based on market prices, and suggestions from farmers and the government.

“The land compensation value is far higher than that in the feasibility report,” he said.

He added that the teams will supervise the “full restoration” of terrain and refurbishment of the farmland temporarily acquired after the project has been completed.

‘Unintended side effects’

U Poe San said that the compensation money paid to villagers had also had some unforeseen side-effects.

“One man bought a motorcycle soon after getting his compensation money and was then killed when he was driving it drunk. Others have already spent all their money and have had to set up roadside shops,” he said.

However, SEAP Co Ltd is attempting to lend assistance to the communities affected by the pipelines and associated work.

Starting from April 2011, CNPC has contributed $6 million for socioeconomic projects in pipeline areas. SEAOP and SEAGP will both contribute $1 million annually over the next 30 years, said Mr Zhang Ye, the supervisor of the project’s socioeconomic department.

CNPC’s socioeconomic projects in Rakhine State include the building of schools in Kyaukpyu and Ann townships, both of which are about 90pc finished, and seven rural health centres, which are 75-80pc completed. The program includes similar projects in Magwe and Mandalay regions, and northern Shan State.               MyanmarTimes