Letpadaung Copper Mine Project Review

Official Release (Article)


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Here is the official release (Article) of Myanmar Wanbao Mining Copper Limited.Now it is available in three languages (Myanmar,Chinese and English)

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 Myanmar Wanbao in Action...


In retrospect to the recent happenings as well as two years of delays in the construction of the Letpadaung copper project, Myanmar Wanbao, as one of the biggest foreign investors in Myanmar, has experienced the hardships arising from the social conflicts during the process of democratization in Myanmar. Objectively, this is unavoidable. Following the mass sit-in protests against the project in November 2012, the Investigation Commission led by Daw Aung San Suu Kyi conducted an in-depth investigation about the Letpadaung project and released a report in March 2013. The Investigation Report arrived at the conclusion that, if overall considerations are given to the economic and social benefits the project will bring about and the international relations it involves, the Letpadaung project should move on provided the improvements are made for the project in accordance with the suggestions made in the report. Thereafter, the Myanmar government created an Implementation Committee chaired by U Hla Tun, Union Minister of President Office, with a number of union ministers being the committee members, to carry out the suggestions of the report. Myanmar Wanbao, as the operator of the Letpadaung project, has been taking active measures to materialize every item of the suggestions in the report and has won good recognition by the Implementation Committee and the overwhelming support by the majority of the local communities. Let's go through what Myanmar Wanbao has done:



1. Land issue


The report suggested that land compensation should be increased and some parcels of land in the mine lease area which are not necessarily used for the project should be released to farmers.


According to Production Sharing Contract, Myanmar Wanbao is responsible for the construction and operation of the project while its Myanmar partners ME1 and MEHL are responsible for the land use and resettlement for the project. The project had initially complied with Myanmar laws in terms of compensation to farmers in return for land use to the project in 2011 and the compensation plus the first subsidy has been claimed by all impacted land-lost villagers.

However, after the Investigation Report was released, Myanmar Wanbao proactively engaged with the government and has gone beyond the legal and contract requirements. In March 2013 and February 2014, Myanmar Wanbao paid land subsidies to the impacted farmers in separate two times acting upon the suggestions made by the report. The criteria for the land compensation or subsidies were decided by the Myanmar government based on the Myanmar law and local market price for the land. The total amount of compensation and three times of subsidies is between 1,825,000Ks and 3,250,000Ks per acre depending on the type of land.

Even though Myanmar Wanbao has met its legal requirements and has paid compensation and subsidies, the company has gone further to safeguard the livelihood and wellbeing of its community in the long term. Since July 2014, the company, together with its Myanmar partners and supervised by the Myanmar government, has created an annual Contribution payment to all the land-lost villagers between USD70 and USD160 per month depending on the number of jobs they are entitled to have because of land loss. Land-lost villagers had originally been promised jobs by MWMCL (the numbers of which were dependent on how much land was given to the project), however, due to the stoppages the company was unable to provide jobs through no fault of its own. So the contribution payment are given regular cash payments every 6 months until a job materializes. This ensures that the land-lost villagers have the peace of mind that their basic livelihoods needs are met whilst they wait for a job to materialize.

This was done through extensive consultations and with the participation of the villagers. It included unprecedented extensive door-to-door consultations for months. Over 71% of total land lost villagers consulted in 35 villages have supported this contribution plan and the project. And within these 35 villages, 27 villages consulted through door-to-door visits have given us an average 91% acceptance rate of the contribution. These numbers are considered by International Best Practice to have exceeded the requirements for "broad community support" of the mine project. We have also set up bank accounts for the villagers through the local bank to receive these payments directly into their personal accounts.

In terms of releasing the land unnecessary for the project in the mine lease area, the project has released a total of 903.74 acres of land, including 294.75 ares of farmland, 42.66 acres of land for of Pathein-Monywar road, 20.33 acres of land for irrigation channels and 546 acres of land for environmental conservation.


2. Environmental issue


The Investigation Report suggested that EMP/SMP/OHSAS should be formulated to manage the environmental and social impact in carrying on the project.


Myanmar Wanbao is committed to managing its activities in an environmentally and socially responsible manner and in compliance with relevant environmental legislation, approvals, licence, permits as a minimum for all construction and commissioning activities. The Construction Environmental and Social Management System (CESMS) formulated by Australian Consultancy Knight Piesold was accepted by the Implementation Committee, which has become the guideline for the project to manage the environmental and social impact in the construction period. Besides, an Independent Monitoring Team, which is composed of international and Myanmar experts in Environmental and social sectors, government officials and villager representatives from the communities, was set up to supervise the implementation of the CESMS.

As a responsible international mining company, Myanmar Wanbao announced in June 2012 that it would voluntarily undertake an Environmental and Social Impact Assessment (ESIA) of the Project based on international standards that were then not mandatory in Myanmar. This ESIA, formulated by Knight Piesold, has been prepared using the International Finance Corporation's (IFC)standards as a good practice guide to the achievement of sound environmental, social and health outcomes from the Project's implementation. The first draft of the ESIA report was submitted in November, 2013 to the Review Team consisting of top experts and professionals chaired by U Hla Maung Thein, Deputy Director General of MOECAF. On December 23, 2014, the ESIA passed the final approval and review of the highest regulatory meeting of the National Environmental Conservation Commission. It went through many rounds of community consultations and extensive reviews by the Review Team consisting of environmental and social experts in the country. Some of the Review Team members and related government officials also paid site visit to the similar project in Australia to find resolutions to some issues concerned.

The ESIA concludes that "the development of the Letpadaung Copper Project will have a controllable impact, in accordance with international standards and good international practice, on the environment when compared to the benefit that the community and the nation may derive from the project, provided the management measures described in the ESIA document are implemented"


3. Amendment to the PSC


The Investigation Report suggested that, to ensure the national interests are protected, the Production Sharing Contract (PSC) signed between Myanmar Wanbao and MEHL should be amended.


On July 24, 2013, an Amendment to Production Sharing Contract was signed in response to the findings of the Special Investigation Commission. This amendment was approved by the Myanmar Government.

Under the Production Sharing Contract and its amendments, the project partners became ME-1, MEHL and Myanmar Wanbao. ME1 has 51% of the benefit from the project while MWMCL and MEHL share the remaining 49%. ME1(on behalf of the Myanmar Government), and MEHL are responsible for all consultation with community and all elements associated with land acquisition, compensation and resettlement. Myanmar Wanbao is responsible for the design, operation and closure of the project, as well as completion of this ESIA.


4. Relocation of Pagoda


With regards to a pagoda in the mine lease area, the Investigation Report concludes that it is difficult to categorize the pagoda as a cultural relics as there is no proof that the pagoda and its attached buildings are religious relics that was built by the first senior monk "Lel-ti".


At a religious ceremony organized by the Ministry of Religious Affairs of Myanmar on February 25, 2014, 27 senior monks from across the country gave their blessings to relocate the Buddhist pagoda in the project to another location. The senior monks agreed to the relocation of the Pagoda and see that the development of the Letpadaung project will bring much in the way of benefits to the whole country.

Under the direction of Ministry of Religious Affairs, the old pagoda was relocated to the new site and the new pagoda was completed in August 2014. A grand ceremony of the hoisting the holy umbrella was held on August 22, 2014 with senior monks and villagers in the communities present at the ceremony. Currently, the new Pagoda, which is larger than the old one but remains the same design in pattern, has already received villagers to worship and do the Buddhist activities.

The whole process of led by the Ministry of Religious Affairs and Myanmar Wanbao proactively cooperate in accordance with the Myanmar laws and cultural traditions.


5. CSR activities and SME projects


The Investigation Report suggested that, the company should increase investment in the community and social development programs and develop SME projects to promote employment in fulfilling its corporate social responsibilities.


Myanmar Wanbao committed in the PSC and its amendment that, in the construction phase, the company will invest US$ 1 million in the community and social development projects while when the project becomes operational, 2% of the net profits of each party will go to the corporate social responsibility activities. It has done a great variety of CSD projects to improve people's life ranging from electricity supply, drinking water provision, road repairing to school and kindergarten building, scholarships, free medical services, etc. The company has connected 12,000 villagers to the national electric grid helping release thousands from "energy poverty". By the end of this year, more than 5,000 local villagers will get clean drinking water thanks to the company's water project. The mobile clinics have already offered over 80,000 free medical treatments in 50 villages around the project and over 1,200 students benefit from the schools we have built. Besides, we offered scholarships to more than 1,000 grade-ten or university students in local area in the past two years with an amount of 82 million Kyats. Critically, this community investment is beginning to take place in consultation with the local community.

In the meanwhile, Myanmar Wanbao is promoting the first seeds of industrialisation in its community through the creation of forward and backward linkages from the mine. It is nurturing local small and medium enterprises in the community through its "pro-poor" procurement process. This is helping create new jobs, nurture entrepreneurial talent, and transfer skills and know-how which is benefiting the community and will contribute to the development of the whole region. The company believes that SMEs, when properly nurtured and supported, can be the source of economic security, balanced growth and inclusive development. So it has helped impacted villagers set up SMES in the food (agricultural), transport and construction sectors and these SME are thriving with the company's support – the transportation village contractors already have 26 trucks and they have started working with other clients. Local villagers have also set up a bricks factory, a concrete pipe factory, a pre-cast concrete slab factory and many more. Wanbao is committed to nurturing the SMEs around it through targeted procurement, capacity, building and advice where applicable.


In closing , Myanmar Wanbao has followed the Investigation Report's suggestions to the letter and has won recognition by the Implementation Committee. The company could extend the working area recently because the government agreed to and the majority of the communities supported for the activity. There is no doubt that, during the process of democratization of Myanmar, some political organizations and activists try to make political gains. When visiting Rakhine State on December 26th 2014, President U Thein Sein said that priority must be given to the rule of law as economic growth is impossible without regional stability. It is true of Rakhine. It is true of Letpadaung. It is also true of the whole Myanmar.



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