Bangladesh: ’Diplomatic strains over Lafarge’

Bangladesh: ’Diplomatic strains over Lafarge’
Published: 25 March 2010

The Supreme Court’s order halting mining operations of Lafarge is said to be disturbing diplomatic relations between India and Bangladesh.

The government told the court the order has led to the closure of Lafarge’s $255-million cement plant in Bangladesh as it depends on supply of limestone from India.

The Supreme Court on February 5 had restrained Lafarge from continuing mining operations in Meghalaya that catered to the Lafarge Surma Cement (LSC) project at Chhatak, Sunamganj, in Bangladesh.

The case has become controversial as Lafarge has acknowledged it has mortgaged tribal land in Meghalaya to international banks to secure a loan of $153 million to finance the cement plant in Bangladesh.

Appearing on behalf of the ministry of environment and forests, GE Vahanvati, attorney-general, and Harris Beeran sought an early hearing of the matter. They contended that the closure of mining operations in Meghalaya would mean the cement plant in Bangladesh would have to be closed, too, affecting the livelihood of people on both sides of the border. They further said the mining ban order was disturbing relations between the two nations.

Lafarge supported the stand of the Centre, stating that the Bangladesh government had written on March 2 to the High Commissioner of India in Bangladesh, expressing concern over the closure of mining operations.

A bench headed by Chief Justice KG Balakrishnan directed the matter to be listed for hearing on Friday.

The mining ban order has come on an application filed by Shella Action Committee, a registered voluntary agency claiming to represent the tribals of the region. The agency has alleged that Lafarge had obtained environmental clearance by misrepresenting to the Indian government that the land was "wasteland and non-forest area consisting mainly of barren land, and rocks" whereas the area had dense forest.

Senior counsel and amicus curie Harish Salve supported the NGO’s stand, pointing out that even the court-appointed central empowered committee in its report had said the cement plant had been set up in Bangladesh by a multinational for which raw materials had been committed without any "value addition, employment generation, development of ancillary industry, consequential taxes and revenues and other economic benefits to India."