For Chinese companies looking to expand their presence along the Belt and Road, the failed project is a lesson in the risks of investing in environmentally damaging projects that lack community support. Once again, it\u2019s prompted calls for China to adopt stronger regulations to govern overseas investments.<\/p>\n\n\n\n
Victory over a coal-powered Goliath<\/h2>\n\n\n\n
Vision 2030<\/a>, an initiative launched by the government in 2008, aims to make Kenya an industrialised country. Unfortunately, the vision\u2019s aspiration towards sustainability is undermined by the push for coal power to serve the growing economy. <\/p>\n\n\n\n The government proposed a 1-gigawatt coal plant for Lamu county in 2013. Its smokestack would be 210 metres, the tallest structure in East Africa. Two years later, ICBC committed US$900 million of export credit to the project. Together with its affiliate, South African Standard Bank, the banks put forward a further $300 million, amounting to 60% of the financing cost. Two state-owned companies, Power Construction Corporation of China and China Huadian Corporation, planned to build and operate the plant, respectively.<\/p>\n\n\n\n The location would be Lamu\u2019s lush mangrove coast, a mere 20km from the old town on Lamu Island. This World Heritage Site is East Africa\u2019s oldest and best-preserved Swahili town, a fusion of Arabic, Persian, Indian and European architecture. The narrow streets are lined with pale coral stone houses and carved wooden doors. Travel is by foot, bicycle or donkey as cars are not allowed.<\/p>\n\n\n\n Amu Power, a consortium of Kenyan companies, initiated the coal power project and planned to run it. By the time it was suspended, Amu had already cleared several vegetable and maize farms. The people of Lamu were worried about air pollution from the plant and how its discharge might threaten the marine life that\u2019s vital to the local economy.<\/p>\n\n\n\n Concerns extended beyond Kenya. UNESCO and the IUCN (International Union for Conservation of Nature) called on<\/a> the government to review the coal plant\u2019s environmental and cultural impacts. Activists warned the project would make it more difficult for Kenya to meet its commitments under the Paris Agreement. <\/p>\n\n\n\n To keep Lamu coal-free, a few environmentalists and civil groups took<\/a> the National Environment Management Authority and Amu Power to the National Environmental Tribunal in 2016. Three years later, in June 2019, they won the case. The judgment<\/a> affirmed that the environmental and social impact assessment (ESIA) failed to adequately consider pollution from the plant or its negative impacts on people, flora and marine life. The judgement also found that public participation had been insufficient. The plant would need a new ESIA before its construction could resume. <\/p>\n\n\n\n Civil society likened the legal victory to David versus Goliath. Investors started to reconsider their involvement. General Electric<\/a>, which was planning to invest one-fifth of the project\u2019s equity, withdrew a few months later. The Chinese investors remained silent.<\/p>\n\n\n\n Then last November, Save Lamu, one of the local groups that filed the legal case, learned<\/a> that ICBC had also withdrawn due to the project\u2019s \u201cenvironmental and social risks\u201d. Concerned about whether other banks would step in to fill the gap, the Kenyan government decided to cancel the project<\/a> a few days later.<\/p>\n\n\n\n Christoph Nedopil Wang, founding director of the Green Belt and Road Initiative Center, pointed out<\/a> that companies must ensure community support for projects. \u201cThis is particularly important in states based on the principles of democracy and the rule of law, where agreements between businesses and government are insufficient to ensure the implementation of a project.\u201d<\/p>\n\n\n\n Save Lamu heard local concerns about the coal plant from the start. It held meetings with fishermen, women and the elderly. It visited coal-fired power plants in South Africa and India. \u201cAfter seeing the impacts, we knew this is not what we wanted, despite our being underdeveloped,\u201d said Khadija Shekuwe, a coordinator at the organisation. <\/p>\n\n\n\n \u201cWhy don\u2019t they focus on renewable resources? Why don\u2019t they pursue that advantage without destroying people\u2019s health and the environment?\u201d Shekuwe said. The country has a promising renewable energy sector. It is already the site of the largest wind power<\/a> project in Africa. <\/p>\n\n\n\n Their efforts to halt the project, which included a petition<\/a> in early 2016, had little impact. The local authorities issued permits<\/a> for the project in September that year without responding to those opposing the project. <\/p>\n\n\n\n Filing a lawsuit became the only way to halt the construction and secure enough time to lobby against the project, said Omar Elmawi, the campaign coordinator at the coalition DeCOALonize which works with Save Lamu. <\/p>\n\n\n\n Meanwhile, environmentalists sought to lobby the Chinese investors, especially ICBC. They posted messages on the bank\u2019s social media channels and wrote several open letters in English and Chinese. Shekuwe recalled meeting an ICBC representative at a conference and hoping she would deliver their message, but that never happened. <\/p>\n\n\n\n The environmentalists protested at the ICBC\u2019s office and the Chinese embassy in Nairobi in June 2019. This led to a meeting with the Chinese ambassador, the only chance the campaigners had to communicate with the Chinese side directly. In response to their concerns, the ambassador affirmed that only Kenya\u2019s people could decide<\/a> whether to build the power plant. A representative from one of the three Chinese companies attended the meeting, and introduced how coal-fired power plants were doing well in China, recalled Elmawi. In a previous interview<\/a>, Elmawi told China Dialogue they believed the Chinese didn\u2019t take their petitions seriously until they took to the streets.<\/p>\n\n\n\n Shekuwe and her colleagues were frustrated by the companies\u2019 silence. \u201cIt\u2019s a project that highly affects communities. They need to listen to what the communities say. They need to see the environmental impact of their project,\u201d she said. <\/p>\n\n\n\n These are regular complaints levelled against Chinese companies. State-owned enterprises rarely speak to the Chinese media or public and generally do so only for self-promotion. The same approach is often followed overseas. Any public communication may need approval from the headquarters in China, and Chinese companies often discourage their employees from interacting with local people. This means company leaders may not be aware of investment risks in time. <\/p>\n\n\n\n Liu Jinmei, a lawyer with Friends of Nature in Beijing, has been involved in many environmental lawsuits in China. She said companies should improve their public communication and release more information. \u201cThey can resolve many risks by doing that. Indeed, not doing so will increase conflict.\u201d<\/p>\n\n\n\n The victory set a precedent for community-led campaigns across the world by garnering public support through the collaboration of local groups and together with international civil society organisations. It was a \u201cnovel and remarkable win\u201d, according to UNEP<\/a> (the United Nations Environment Programme) website: \u201cThis case represents a win for the public participation of locals in environmental governance, for environmental law enforcement and for ensuring that businesses and governments are answerable to communities.\u201d<\/p>\n\n\n\n The groups already had experience in defending themselves against big business and government plans. Save Lamu was founded to raise the community\u2019s voice in the face of a project to build an extensive port on the island. When Kenya introduced the idea of the port to connect Ethiopia and South Sudan in 2009, there was little public participation and the environmental impact assessment lacked detail. With the group\u2019s support, fishers filed a lawsuit against the government after they lost grounds to the port\u2019s construction. In 2018<\/a>, Kenya\u2019s high court judged the project violated the community\u2019s rights to information, to a clean and healthy environment, and to culture. The court awarded the Lamu fishermen compensation totalling US$17 million.<\/p>\n\n\n\n In Ghana, civil group A Rocha Ghana hopes to apply lessons from the Lamu case in its mission to defend the Atewa forest. In July 2020, the group led a few Ghanaian environmentalists to sue their government<\/a> to stop a proposed mining project in the region, also backed by Chinese finance. <\/p>\n\n\n\n Soon after taking office in early 2017, the current government signed a memorandum of understanding with China to finance new infrastructure such as roads and hospitals. In exchange, Ghana would pay back the loans with bauxite. The state-owned Sinohydro Corporation and China Construction Bank were behind the deal. <\/p>\n\n\n\n For the Ghanaian environmentalists, Atewa is the finest example of an upland evergreen forest in the upper Guinean forest region. It provides habitats for hundreds of endangered species. As the origin of three major rivers, it is also a clean water source for millions of people. Therefore, Ghanaian and international conservation groups have argued Atewa should be designated a national park. This proposal enjoyed support from a previous government. <\/p>\n\n\n\n At home and abroad, Chinese official media praised the infrastructure project for promising to improve life for the people of Ghana. Daryl Bosu, deputy national director of A Rocha Ghana, told China Dialogue that such projects should not be built at the cost of destroying a critical ecosystem like the Atewa. In three years, their petition to the Ghanaian government and Chinese investors received no response. Bosu believed filing a lawsuit was the only choice to save the forest. <\/p>\n\n\n\n \u201cAlthough the Chinese companies are not involved in the bauxite mining, the payment certainly stimulates the host country to search for bauxite in the forest,\u201d said Zhang Jingjing, an environmental lawyer and founder of the Center for Transnational Environmental Accountability. \u201cIf the NGOs win the case, Chinese companies may face the risk of not being able to collect on their debts,\u201d she added.<\/p>\n\n\n\n In Zhang\u2019s opinion, Chinese investors are obligated to follow international treaties signed by the Chinese government. In 2018, an Ecuadorian court ordered a Chinese private corporation to suspend gold and silver mining in a nature reserve, home to the Ka\u00f1ari indigenous communities. Zhang testified<\/a> for the communities, citing China\u2019s affirmation of indigenous people\u2019s rights worldwide when the government endorsed the UN Declaration on the Rights of Indigenous People in 2007. \u201cIn practice, implementation is not good enough,\u201d she added. <\/p>\n\n\n\n In 2017, the Chinese government issued a guideline<\/a> for the green Belt and Road Initiative (BRI). In it, the government commits to help other countries achieve the 2030 Sustainable Development Goals. Last December, the BRI International Green Development Coalition (BRIGC<\/a>), a government-backed coalition, suggested a system for classifying investments<\/a> based on their climate change, biodiversity and pollution impacts. A coal-fired power plant and a project that damages critical biodiversity areas would be considered unacceptable according to the system. However, these principles are not mandatory. Companies are only required to register their foreign investments, there is no vetting process and little attention is paid to environmental risks, according to Liu Jinmei. <\/p>\n\n\n\n![\"Mangrove](\"https:\/\/dialogue.earth\/content\/uploads\/2021\/03\/lamu-island-aerial-mangrove-forest-e1615294244910.jpg\")
<\/div>![\"Boys](\"https:\/\/dialogue.earth\/content\/uploads\/2021\/03\/lamu-old-town-kenya-children-on-bicycle.jpg\")
<\/div>A lesson for investors<\/h2>\n\n\n\n
It\u2019s a project that highly affects communities. They need to listen to what the communities say.<\/blockquote>Khadija Shekuwe, coordinator at Save Lamu<\/cite><\/div><\/div>\n\n\n\n
![\"Fisher](\"https:\/\/dialogue.earth\/content\/uploads\/2021\/03\/lamu-old-town-kenya-man-on-fishing-boat.jpg\")
<\/div>Another lawsuit gathering storm<\/h2>\n\n\n\n
As long as there are still a lot of non-green projects, China is undermining its own philosophy that says green is gold<\/blockquote>Christoph Nedopil Wang, Green Belt and Road Initiative Center<\/cite><\/div><\/div>\n\n\n\n
What to do?<\/h2>\n\n\n\n