The Eppawela judgement


By Derrick Schokman
The envisaged Eppawela rock phosphate mining project created much controversy as to the fundamental rights of people living in the area and to whether it was the most advantageous way of utilising a critical natural reserve. A project company (Sarabhoomi Resources (Pvt) Ltd.) was established in Sri Lanka, together with IMC-Agrico and Tomen Corp. of Japan, between them owning 90% of the shares and the Government of Sri Lanka through Lanka Phosphates Ltd. owning the remaining 10%.
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Details of the proposed project which would lead to a high intensity mining operation and the export of Di-ammonium phosphate as fertilizer by the project company became known and were highly critised by the National Academy of Sciences and the National Science Foundation, among others, whose main objections were that the size and quality of the Eppawela phosphate deposit had yet to be properly established, the social and economic disadvantages to be seriously considered, along with the highly adverse environmental impacts that could result.

The controversy came to a head when the government was determined to go ahead with the project despite public opposition.

Bulankulama and six others applied to the Supreme Court claiming an infringement of their fundamental rights. They claimed the project was not a public purpose, but for the benefit of a private company and that it would not bring any substantial economic benefit to the country.

The petitioners also claimed that the government was so heavily committed to the project that no proper unbiased environmental impact assessment would be carried out.

The Respondents were (1) Secretary to the Ministry of Industrial Development (2) BOI (3) Geological Survey and Mines Bureau (4) Central Environmental Authority (5) Project Comapny Sarabhoomi (Pte) Ltd. (6)Lanka Phosphate Ltd. (7) Another Sri Lankan Company whose exploration and mining licences were to be transferred to the project company and (8) the Attorney General.

The application was heard before Justices Amerasinghe, Wadugodapitiya and Gunesekera. On 2 June 2000 it was unanimously decided in favour of the petitioners and the court directed the respondents to desist from entering into any agreement relating to the Eppawela phosphate deposit prior to carrying out a comprehensive exploration and study of the locations, quantities and quality of the apatite or other phosphate minerals in Sri Lanka by the 3rd respondent (Geological Survey and Mines Bureau) in consideration with the National Academy of Sciences and the National Science Foundation and the publication of the results of the same.

Before entering into any agreement, any project proponent was also required to obtain Central Environmental Authority approval, which approval should be given according to the law including the decisions of the Supreme Court of Sri Lanka.

Given below are some excerpts from that excellent judgement by Justice Amerasinghe.

Sustainable development

Learned counsel for the 5th and 7th respondents submitted that the project must go ahead because the people would otherwise "starve". In his written submissions, he stated that as the "trustee" of natural resources of the country the government cannot "sit back and do nothing". This would be a sin of ommision and would be as much a breach of trust as it the government did act wrongly...

It has been the policy of successive governments during the past three decades that the Eppawela mineral deposit should be put to use. In fact, Lanka Phosphates Ltd. (6th respondent) under a licence issued by the Geological Survey and Mines Bureau has been mining about 40,000 mt. of rock per annum for crushing and marketing to enterprises making fertilizer.

That modest operation the petitioners claim caused them no concern. However in view of the escalation of the amount of 26.1 million mt. to be mined within 30 years from the date of signing the agreement the petitioners fear (a) existing supplies will be exhausted too quickly (b) that the scale of operation within the stipulated time frame will cause serious environmental harm that would affect their health, safety, livelihood as well as their cultural heritage.

The petitioners do not oppose the utilisation of the phosphate. However they submit that the phosphate deposit is a non-renewable natural resource that should be developed in a prudent manner in order to strike an equitable balance between the needs of the present and future generations in Sri Lanka...

The call for sustainable development by the petitioners does not mean that further development of the Eppawela deposits should be halted. The government is not being asked, to use learned counsel’s phrase to "sit back and do nothing".

According to the Geological Survey and Mines Bureau (3rd respondent), the Eppawela deposit is said to have a proven reserve of 25 million mt. and an inferred reserve of another 35 million mt.

However, as a Director of the 5th respondent, Mr. Garry Pigg and a Director of the 7th respondent, Mr. U. F. De Silva Boralessa, state in their affidavits "the actual extent of the phosphate in Sri Lanka is not known today and it would take exploration to discover the new reserve which would move the inferred resources into a proven category".

The Secretary of Ministry of Industrial Development, S. Hulugalle, in his affidavit states that only 26.1 million mt. of rock phosphate will be mined over the entire 30 year period and the deposit contains 25 million mt. proven reserve and 35 million mt. inferred reserve. Therefore, after 30 years, there will still be a substantial amount of phosphate reserve.

The Deputy Solicitor General stated that "the project company will only be entitled to mine 26.1 million mt. for the entire 30 year period. This amount when compared with the available resource at Eppawela is somewhat negligible".

How could it be asserted with any degree of confidence at this time when no exploration has taken place that a comparatively "negligible" quantity of the avaialble deposites will be extracted, so that at the end of 30 years there would remain a "substantial" amount of phosphate....

The National Academy of Sciences in its report points out that in May 1995 a committee of five scientists and two economists appointed by the President of Sri Lanka recommended that "a more comprehensive geological reserve evaluation be undertaken in the light of recent research findings, so that the government can make a decision on the rate of exploitation of such reserve.

The decision on the rate of exploitation should be made taking into account the importent concerns about the use of the resources in a manner that future generations can also benefit".

No such survey has been done, although it should have been done before the Negotiating Committee appointed by the President to conduct the final round of negotiations, recommended the signing of the proposed agreement....

The importance of giving effect to the recommendation of the President’s Committee cannot be overstated, for it would mean reliable conclusions being made on how best in the national interest the mineral resources should be utilised from the point of view of the rate of extraction with high regard to considerations of sustainable development and the feasibility of alternatives, such as the production of single superphosphate to meet only local requirements rather than produce di-ammonium phosphate...

The report of the National Science Foundation points out that the Eppawela deposit is very important because world supplies of this non-renewable mineral are dwindling like fossil fuels worldwide and should therefore be "wisely utilised". Citing Herring and Fantel’s landmark study, the National Science Foundation points out that on the basis of current information the worldwide phosphate reserves will be exhausted in 100 to 150 years.

The National Science Foundation states: "The irrefutable conclusion is that the Eppawela rock phosphate deposit should be exclusively reserved for the country’s use for generations to come".

The Secretary to the Ministry of Industrial Development in his affidavit stated that "with the development of technology and market conditions a mineral deposit may also cease to be a resource as happened to the tin industry in the world with the advent of plastics".

Sustainable development requires that a non-renewable resource like phosphate must be depleted only at the rate of creation of renewable substitutes. What is the known renewable resource for phosphate...

Does the 1st respondent assume that plants will need no phosphorus? On that matter Professor Illeperuma of the Department of Chemistry of the University of Peradeniya, with some asperity, had this to say:

"There are some wiseacres who say that scientists will develop new plants that will grow without phosphorus. Anyone with even a rudimentary knowledge of science knows that phosphorus is an essential component of our bone structure and when such varieties of cash crops are indeed possible, then we will have humans with no bones who will probably move around like jelly fish..."

The petitioners allege that environmental pollution resulting from the said project will be massive and irreversible and will render the affected area unusuable in the forseable future. Waste products from the large scale mining of phosphate as envisaged in the project include phospho-gypsum and other radio-active substances...

According to the National Academy of Sciences there will be "a million metric tons of phospho-gypsum". The first respondent in his affidavit suggests that this (gypsum) could be sold to local cement makers and used in the manufacture of "plier and boards".

Have market studies been done? Gypsum may pose no danger if the quantities are manageable. The scale of operation is important if the by-products are to be utilised without causing environmental damage. Could the amount of gypsum produced be absorbed by cement manufacturers and others having regard to the fact that there are according to the National Academy of Sciences "a million metric tons".

If the gypsum is in fact not absorbed in the way envisaged by the first respondent is it to lie somewhere. Professor O. A. Illeperuma stated as follows:

"This may not be a problem for large countries such as the USA where phospho-gypsum mountains are visible dotting the Florida landscape, since open and barren land is available. Sri Lanka, on the other hand, is one of the most overcrowded countries in the world where even finding a site to dump garbage has become a serious problem".

The evidence before us points to the fact that the quantity of phosphate gypsum would grossly exceed the assimilable capacity of the environment....

The Eppawela project, as the petitioners, the National Science Foundation and the National Science Academy point out, is in an area of historical significance. If I might adopt the words of Martha Prickett Fernando in her comments on another proposed project - the augmentation of the Malala Oya basin from Mau Ara:

"Unless development activities in areas like this project are accompanied by proper Environmental Impact Assessment (EIA) studies and (proposals for) mitigation of (adverse impacts on) archeological resources that will be damaged, vast numbers of sites - in fact, much of Sri Lanka’s unrenewable cultural heritage and the raw data for all future studies on ancient Sri Lanka - will be destroyed without record and an accurate understanding of life in ancient Sri Lanka will remain for ever wrapped in myth and hypothesis".

Alleged violation of article 12 (1) of the Constitution

Learned Counsel for the respondents submitted that Article XXV of the proposed agreement obliges the company to comply with the National Environmental Act No. 47 of 1980 as amended by Act No. 56 of 1988 and the regulations made thereunder. In the circumstances the company is obliged to submit the Environmental Impact Assessment in terms of part IVC of the Act.

The proposed agreement makes no reference to the preparation or submission of any Environment Impact Assessment as required by the National Environmental Act and the regulations made thereunder. What the proposed agreement does is to provide for an environmental study to be prepared by an international firm, selected by the company and approved by the Government as part of its feasibility study.

In terms of the proposed agreement, although there is an undertaking to comply with the laws of the country... what is attempted to be done is to contract out of the obligation to comply with the law.

The Article of the proposed agreement dealing with matters concerning environmental issues, read with the provision on confidentiality, in my view, attempt to quell, appease, abate or even under the guise of a binding contract, to legally put down or extinguish public protests...

If the genuine intention was, as claimed by the respondents, to comply with the requirements of the law, it was, in my view, unnecessary to refer in the proposed agreement to a study relating to environmental matters as part of its feasibility report.

The law is clearly laid down in the National Environmental Act and the regulations framed thereunder what was being attempted by the proposed agreement was to substitute a procedure for that laid down by the law. It was assumed that by a contracted agreement between the executive branch of the government and the company, the laws of the country could be avoided. That is an obviously erroneous assumption, for no organ of government, no person whosoever is above the law...

Overall economic benefits

The respondents submitted that the proposed agreement if implemented would be highly beneficial to Sri Lanka and that "when balancing the purported complaints as are contained in the petition against the overall benefit that would accrue to Sri Lanka, the petitioners application cannot succeed in law...

Learned counsel for the petitioners, however, submitted that the Eppawela project governed by the proposed agreement will not only be an environmental disaster but an economic disaster as well.

They relied on the analysis of the social and economic considerations by Prof. V. K. Samaranayake, the comments of Prof. Tissa Vitarana, the comments of Prof. O. A. Illeperuma, the report of the National Academy of Sciences, the report of the National Science Foundation and the financial analysis by Premila Canagaratna.

In the debate perhaps we need to consider whether income and economic growth on which the respondents lay great emphasis are the sole criteria for measuring human welfare. David Korten, the Founder President of the People-Central Development Forum once observed:

"The capitalist economy" (as distinguished from Adam Smith’s conception of a market economy) "has potentially fatal ignorance of two subjects. One is the nature of money. The other is the nature of life. This ignorance leads us to trade away life for money, which is a bad bargain indeed.

The real nature of money is obscured by the vocabulary of finance, which is doublespeak... We use the terms ‘money’, ‘capital’, ‘assets’ and ‘wealth’ interchangeably - leaving no simple means to differentiate money from real wealth. Money is a number. Real wealth is food, fertile land, buildings or other things that sustain us.

Lacking language to see this difference, we accept the speculator’s claim to create wealth, when they expropriate it... Squandering real wealth in the pursuit of numbers is ignorance of the worst kind. The protentially fatal kind".

It is unnecessary for the purposes of the task in hand to enter into the matter of the alleged beneficial nature of the proposed agreement. The petitioners’ case is that there is an imminent infringement of their fundamental rights guaranteed by Articles 12(1), 14(1)(g) and 14(1)(h). I have stated my reasons for upholding their complaint. The "balancing" exercise referred to by learned counsel has been already done for us and the Constitution sets out the circumstances when any deregations and restrictions are permissible.

Article 15(7) of the fundamental rights declared and recognised by Articles 12 and 14 are "subject to such restrictions as may be prescribed by law" among other things, for "meeting the just requirements of the general welfare of a democratic society". In the light of the available evidence, I am not convinced that the proposed project is necessary to meet such requirements. In any event, the circumstances leading to the imminent infringements have not been "prescribed by law" but arise out of a proposed contract and therefore do not deserve to be even considered as permissible.

Note: The complete Eppawela judgement appears in the South Asian Environmental Law Reporter, Volume 7(2), June 2000, published by the Environmental Foundation Ltd. (Rs. 200) No. 3, Campbell Terrace, Colombo 10, Sri Lanka.

It should be compulsory reading for all developers of the Sri Lankan economy and the watch-dog authorities that are required to see that such development is carried out within the laws of the country.