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Sat, 28 Oct 2006 00:24:48 GMT
Oxy signed a Supplementary Agreement with Petrobangla in 1998. Leaving the compensation issue pending Oxy, the operator of all three blocks (12,13 and 14) through a 50-50 joint venture with Unocal, entered into an agreement with Unocal in May 1999, under which Oxy transferred all its working interests in the three blocks to Unocal and Oxy acquired Unocal's 28.57 percent stake in three producing fields in Yemen. And thereby Unocal became the successor of rights and liabilities of Oxy in Bangladesh. After a long delay, Petrobangla in July 2002 sent the compensation claim of $ 685 million to Unocal for burning 245 Bcf gas of Magurchara in the blowout. Unocal refused to pay the compensation claiming that the Supplementary Agreement signed in 1998 providing Petrobangla additional five percent shares of profits in block 14 forfeited its claim for further compensation.
But Petrobangla said the agreement signed with Oxy in 1998 has no link to the compensation for the Magurchara blowout; no article of the agreement added any clause which could anyway mention that five percent additional share of profits was given as compensation of the loss of gas due to the blowout. Petrobangla officials said that they made the recompense claim totally on the basis of the investigation report. The GOB has a separate claim of $ 105 million (Tk 609 crore) as compensation for the environmental damage which is yet unsettled. It is interesting to note that Oxy was under a legally binding obligation to get Environmental Clearance from the Department of Environment (DOE) under the Environment Conservation Act and Rules before starting exploration work at Magurchara. Earlier Oxy had applied for environmental clearance to the DOE and had submitted EIA report to the DOE. It was reported that officials of the DOE had given comments on it and they asked for the fulfillment of certain conditions. Oxy didn't reply nor collected an environmental clearance certificate that was mandatory. But before getting environmental clearance from DOE, Oxy started exploration in violation of the environmental regulations of the host state.
After the accident Oxy insisted that it had been "ignorant of the law" which is not an excuse under the existing laws. Under the PSC Oxy was made responsible for "complying with all environmental, health and safety laws of the Peoples Republic of Bangladesh, applicable to the petroleum industry in the peoples Republic of Bangladesh." According to Petrobangla, it definitely has a claim to Unocal on the gas lost due to the blowout, as the responsibility for the accident lies with Oxy and Unocal is the successor of the assets and liabilities of Oxy in Bangladesh.
The blowout had a disastrous effect on the ecosystems of the surrounding region by destroying the dense natural forests. It also destroyed a part of Dhaka-Sylhet highway. The soil of the region had been seriously affected by the explosion. "The soil has not only lost its fertility, but also become inappropriate for construction of any heavy structure. The gas fire denuded the surrounding 700-acre reserved forest, rich in flora and fauna. The land will be no good for trees, tea, crops and vegetable for 50 years, according to soil scientists. Environmentalists said that the region would be facing a very serious loss of green cover and extinction of wildlife species. The damage to the environment was multiplied due to the prolonged period for which the fire continued." WFD (Well Flow Dynamics) whose personnel were mobilized and integrated in the relief well drilling team, in their report said that the blowout caused "damage to a tea plantation, the forest, road and the main rail road track in the Northeast corner of Bangladesh."
According to the report of WFD the final 'kill operation' was completed in early 1998. The environmentalists opined that it would require 50-60 years to recover the environment from the effects of the disaster. The environmental damage was estimated to be $ 105 million by the Ministry of Environment and Forest, GOB. But Unocal president said that the amount of the claim is unsubstantiated for which Unocal had suggested the Ministry to use an internationally recognized expert third party to assess the cost of resetting the environment in the affected area. Oxy also incurred huge damage due to the blowout. There are instance where oil companies were held liable for negligent drilling that caused blowout. A US court refused to dismiss claims against a foreign company whose negligent drilling caused the blowout of a well in Mexican offshore waters that caused pollution of US beaches and waters (In re Sedco, Inc., (1982) 543 F. Supp. 561 (SD Tex.).
In the recent past, international environmental law has become increasingly concerned with impact on and protection of indigenous people. Ogoni, OK Tedi, Oriente cases are some instances of the new spate of environmental and human rights issues that are confronting the resources sector today in the developing countries. Unocal's recent liability for indulging human rights violations in Myanmar has whetted this phenomenon. The Magurchara disaster also caused human rights degradations in the affected area. It caused severe damage to the tribal habitat. A tribal group "khasi Punji" became the worst victim of the disaster. Houses including all the belongings of a number of families of this community were burnt to ashes. The explosion damaged their cultivable land with crops, i.e., Khasi pan jhums on 50 acres of land were damaged. After the incident the total area was evacuated, but no effective initiative was taken to rehabilitate the affected and displaced indigenous people. Their sufferings knew no bounds.
The issue of sustainable development is pertinent in this case for two reasons, firstly, the blowout caused severe damage to the environment of the region in such a manner that it would carry the negative impact of the disaster for next 50-60 years according to the environmentalists, and secondly, the gas explosion burnt the entire gas reserve of Magurchara gas field of approximately 245 Bcf (according to investigation report) as a consequence of which the present and the future generations would be deprived of their valuable natural resources. It has become the pertinent question whether "polluter pays" principle can be applied to the case. The Polluter Pays Principle intends to compel the oil and gas (O&G) industry to integrate the full environmental and social costs of their activities into their production costs.
The incorporation of Polluter Pays Principle into international law has implications for the development under national law of civil liability rules for environmental damage. Although this principle has not yet been enacted in Bangladesh by any legislation, Unocal can't outweigh the enforcement of 'polluter pays' principle in the Magurchara case because the contractor is under a legally binding obligation under the PSC not to harm the environment for which it will incur a civil liability for damages under the law of torts. Like the most developing countries the enforcement machineries in Bangladesh both in environmental and human rights arena are very weak. Although Bangladesh has framed a considerable level of environmental regulations, they are hardly enforced. The enforcement inadequacy on the part of the government has been grossly manifested in the Magurchara case.
The question why Petrobangla signed the SA with Oxy in 1998 needs to be examined. Although Petrobangla claims that the SA signed with Oxy in 1998 has no link to the compensation for the Magurchara blowout, the question remains why Oxy agreed in 1998 to give five percent additional share of profits to Petrobangla. It seems to be the existence of compensation for the gas burnt in the blowout. In the given situation, it requires a thorough examination of the confronting positions to get the real answer as to why the SA was signed. At the same time, compensation for environmental damage ought to be determined by an internationally recognized expert third party.
The question why Oxy was allowed to leave Bangladesh by transferring its PSC rights, is not that much pertinent. Because, Unocal "stepped into the shoes" of Oxy when it entered into the aforesaid agreement with Unocal. As a presumption of law Unocal shoulders all the liabilities of Oxy under the PSCs they had entered to in Bangladesh, which Unocal itself doesn't deny. In fact, in order to avoid any embarrassing situation GOB preferred the replacement of Oxy by its non-operator partner Unocal without changing the legal and economic positions of the contactor and the host government, as there had been strong public opinion against Oxy in Bangladesh after the Magurchara disaster. But it needs to be examined whether Oxy is immune from suits for negligence in the given situation. Magurchara blowout caused a huge damage to the environment which the NGOs and pressure groups in Bangladesh failed to highlight internationally.
Any corresponding role of Rainforest Action Network (RAN) and Oxfam America against Texaco for its activities in Ecuador, Body Shop in Ogoni issue in Nigeria, and EarthRight International (ERI) against Unocal in Myanmar, was not seen in Bangladesh in the Magurchara issue. Oxy's disregard of the mandatory provisions for EIA in Bangladesh manifested its gross deviation from its commitment to corporate responsibility. In view of the Texaco Case (Ecuador) and Unocal Case (Myanmar) a legal as well as academic question arises whether the local communities/pressure groups can sue Oxy/Unocal in the US for the environmental compensation invoking the extraterritorial application of US laws, assuming that the existing environmental laws in Bangladesh due to their enforcement constraints can not give them any remedy. There is an emerging trend that the local communities and pressure groups are willing to abandon their local courts and pursue their claims in the home states of the MNCs and the cases reveal willingness on the part of some courts of the US to entertain such cases. The justification for these extraterritorial extensions of US law is predicated on the proposition that Congress can prescribe standards of conduct for US citizens and US corporations, regardless of locale.
Link: Magurchara Blowout in Bangladesh: Environ & Health Rights Issues
bangladesh arsenic crisis; one of top ten natural environmental disasters in world
Arsenic
is a poisonous metalloid that can be found in three forms; yellow, grey
and black arsenic. Arsenic compounds are used as pesticides and in
various alloys. It is not only toxic to insects and some plants, but
also to humans. Its toxicity stems from the similarity of the chemical
structure to phosphorus,
causing it to partly substitute phosphorus in chemical reactions.
Bangladesh,
Asia (see picture) has had major drinking water problems for many
decades. Most people used to drink surface water, which led to the
spread of pathogens such as
cholera and dysentery. International organizations started promoting
groundwater welling for drinking water production. It was however not
known that groundwater in Bangladesh contained significant amounts of
arsenic. The arsenic present in the groundwater is of natural origin,
being released from subsurface sediment layers under anoxic conditions.
Many other Asian countries, such as Vietnam, Cambodia and Tibet are
thought to have similar geological environments as Bangladesh. These
countries may also have high-arsenic groundwater.
When drinking water wells were installed in Bangladesh, approximately 57
million Bangladeshi people started drinking groundwater with arsenic
concentrations far above the legal limit of 0,05 mg/L. After several
years of applying groundwater as drinking water over a quarter of the
Bangladeshi population exhibited symptoms of arsenic poisoning
(arsenicosis).
Arsenic poisoning kills people by disrupting the digestive system.
Symptoms include changes in skin colour, formation of skin patches (see
picture), stomach pains, vomiting, delirium and gangrene. Chronic low
level arsenic poisoning in Bangladesh also results in cancers, such as
lung cancer, skin cancer, kidney cancer and bladder cancer.
The
arsenic problem was first discovered in the early 1980s, but public
awareness of the arsenic crisis did not emerge until the mid-1990s. The
World Health Organisation has described the naturally occurring arsenic
as the largest mass poisoning of a population in history.
Today, more than 85 million Bangladeshi people are drinking the
arsenic-rich groundwater. It is very probable at least 80 million people
now suffer from arsenic poisoning. The exact number is uncertain because
it may sometimes take up to 10 years before arsenic poisoning can be
diagnosed.
Legal proceedings began in London in 2003 to determine whether the British Geological Survey was negligent in failing to detect arsenic in Bangladeshi water supplies. The organization conducted research on behalf of the Bangladesh government in 1992, but did not test the groundwater for arsenic. The organization pleas 'not guilty' and argues that at the time of its report little was known about the geological origins of arsenic poisoning.


