Villagers in Southern Burma Protest Against Chinese-Backed Oil Refinery

By Yen Saning 29 April 2014

RANGOON — About 500 ethnic Dawei villagers from Tenasserim Division’s Laung Lone Township staged a protest on Tuesday against the construction of a huge oil refinery complex, which is being planned by Burmese tycoon Tay Za, a military-owned conglomerate and Chinese investors.

Local villagers in the coastal region in southern Burma said they were informed by authorities last year that more than 100 households in two coastal villages will have to be relocated to make way for the sprawling project. Residents have yet to be officially consulted about the compensation that they will be offered.

The project would cover 2,626 acres and include an oil refinery, a 270-megawatt power station, a water reservoir and a deep-sea port, according to project documents and a 2010 memorandum of understanding signed by Tay Za’s Htoo Group, Guangdong Zhenrong Energy Co. Ltd. (GDZR) and the Union of Myanmar Economic Holdings (UMEHL).

In recent months, workers have been clearing government-owned land and began digging a canal near the villages leading to concerns among local residents, who decided to organize a protest this week.

“We protest as we don’t want the oil refinery project in our area,” Nay Win, a resident from Nyin Maw village told The Irrawaddy. “The project is big. Though the initial area required is over 1,000 acres, they will need more land after production starts. Over 100 households need to move for now.”

“We demand an end to this project. We don’t want this oil refinery industry,” the 53-year-old farmer said, adding that the community also feared that the old home of Gen. Ba Htoo, a famed leader during Burma’s independence struggle, would be demolished during project construction in the area.

Last week, about 40 ethnic Dawei villagers held a religious ceremony calling on spirit of the local Lat Khat Mountain to curse any forces intend on harming the village and its religious sites.

According to project documents, obtained by The Irrawaddy, the 30-year project will require $2.5 billion in investment, 70 percent of which will be funded by unnamed Chinese state-owned banks, while Guangdong Zhenrong Energy Co. Ltd will invest about $680 million and Tay Za’s Htoo Group will invest about $120 million.

UMEHL, a Burma Army-owned conglomerate, will arrange the land and necessary government permits in return for a 20 percent equity stake in the project and at least 10 percent of its profits.

The oil refinery, planned at a site located about 20 kilometers south of the stalled, Thailand-backed Dawei Special Economic Zone, would be able to annually refine 5 million metric tons of oil, which would be supplied by tankers carrying crude from the Middle East and Asia.

Thant Zin, an activist with the Dawei Development Association, a NGO that has been campaigning for community rights in the fast-developing region of Tenasserim, said the project was likely to have heavy social and environmental impacts. He doubted that authorities and investors would offer proper compensation for the households forcibly displaced by the project.

“The villagers can now make a peaceful living. They will not have any benefit from losing their lands,” he said. “What they have to give up is more than they can get” in compensation.

Thant Zin said he also feared the massive complex would cause environmental pollution all along Tenasserim’s coast, where numerous communities depend on fishing.

“The company doesn’t look like it will back down. They have decided to do this, whether the public agrees or not,” he said. “More tension will occur since both company and villagers are not backing down. They need to give provide correct information and negotiate with villagers.”

Thant Zin added, “This project will offer little benefit to the state and only benefit a small group of people.”

Large Chinese investment projects have given rise to popular protests in Burma in recent years, where many view the projects with suspicion as China was the former military regime’s most important backer and cut deals with Naypyidaw that mostly benefitted Beijing and the army.

The deal for a Chinese-backed copper mine in Sagaing Division was restructured last year after it attracted large-scale protests in 2012, while China’s Myitsone dam on the Irrawaddy river was suspended in 2011 following nationwide protests.

Chief executive Xiong Shaohui of Guangdong Zhenrong Energy Co. Ltd, an oil and commodity trader largely owned by state-run Zhuhai Zhenrong Corp, told Reuters in 2012 that he was confident the refinery would not encounter any opposition.

“The way we run our business will be different from many other companies investing in Myanmar. We want to make inputs first,” he said. “First of all, we want to train hundreds of local workers, bring in the first-class refining technology and make sure our partners are happy working with us.”