Ja-Ela Prone To Cancer Due To Illegal Asbestos Plant
By Nirmala Kannangara
In true Board of Investment (BOI) style, an asbestos sheet manufacturing company in Ekala, Ja-Ela has been allowed to bypass the pre-conditions laid down by the BOI in the investment approval and to commence its production without any restriction.
Rhino Products Limited of No. 111, Maithri Mawatha, Ekala, Ja Ela, a subsidiary of Rhino Roofing Products of No. 30, Minuwangoda Road, Ekala, Ja Ela entered into an agreement with the BOI on May 29, 2008 to manufacture asbestos roofing sheets for the local market. As per the investment approval, all statutory requirements/ regulations stipulated under relevant legal enactments including the Factories Ordinance, and the National Environmental Act should be adhered to when improvements are made to the selected site and also during the operational period of the project.
The investment approval further states that the site approval is valid only for the specific project referred to and all conditions stipulated in the BOI approval letter under reference should be complied with. It further states that an Environmental Protection Licence (EPL) should be obtained from the BOI prior to commencement of operations at the site. A completed application form should be submitted to the Director Environment Management of the BOI one month prior to commencement of trial operations.
Although it is as such, the BOI has allowed Rhino Products to commence its operational work in November 2011 without the proper approvals from the Ja-Ela Pradeshiya Sabha, the Urban Development Authority (UDA) or the Central Environmental Authority (CEA). Further, allegations have been levelled against the Rhino Products for getting the asbestos sheets manufactured in the parent company – Rhino Roofing Products Limited at No, 30, Minuwangoda Road, Ekala, Ja-Ela.
“Rhino Roofing Products, which was opened in 1962 is not a BOI company and produces 600 tons of asbestos sheets per day. Since this company is not a BOI company and does not enjoy tax concessions, they are bound to pay taxes to the Department of Inland Revenue. In order to evade paying taxes, the parent company dispatch part of their production to Rhino Products which enjoy tax holidays. This is a known secret, but interestingly the BOI is silent although they have been informed of this fraud. Let the Department of Inland Revenue take immediate action against Rhino Roofing Products for cheating the government and let the Ministries of Investment Promotion and Economic Development pay their attention to this at the very earliest,” reliable BOI sources on conditions of anonymity said.
Hence questions have been raised as to why the BOI is following a deaf and dumb attitude without taking any action against Rhino Products for obtaining asbestos sheets from its parent company. “Aren’t these sheets brought to the BOI factory not for anything else but to be sold to the local market under the tax concessions,” added the sources.
The sources further accused the BOI for not finding out as to why Rhino Products increased their investment from US$ 18 million to US $ 26 million suddenly.
“According to the letter dated May 22, 2008 sent to Chairman BOI by the Managing Director, Rhino Products, E. J. Gnanam, the company has decided to increase the initial investment by a further US$ 8 million to install larger Silos (huge steel circular containers standing upright to store cement). Increasing the investment by US$ 8 million, Rhino Products Managing Director has requested the BOI to grant them a tax holiday of eight years as per the existing BOI incentive package. Knowing that large scale categories get more tax benefits, they invested more with an ulterior motive.
They are now enjoying more benefits by selling their products manufactured at the parent company through the BOI affiliated Rhino Products. While the country is incurring losses in billions because of this fraud, Rhino Products are gaining billions of profits,” added the sources. Although Rhino Products and the BOI claim that the necessary approvals have been obtained before the company commenced its work, it has now come to the limelight that the local authority – Pradeshiya Sabha (PS) has not followed the correct procedure when granting the said ‘approvals’.
In a letter dated January 10, 2012 to the Chairman BOI by D. G. W. Abeygunawardene, Director Enforcement, Urban Development Authority clearly states that despite their (UDA’s) repeated requests, the local authority has not followed the correct procedure to grant the development permit for the industrial plant. The letter further states as thus,
“It was explained comprehensively the weaknesses of the executing procedure of the planning powers vested to Chairman/ Secretary to Ja-Ela Pradeshiya Sabha and the absence of due attention on the environmental procedures to be followed for establishment of this kind of industrial plant in a residential area. Thus it is required to obtain the preliminary planning from UDA and CEA prior to the establishment of the subject industry. Considering this situation, the UDA is compelled to rectify the planning and environmental shortcomings in relations to approving this kind of industry”.
Questions have been raised as to why the BOI is silent when they have been empowered to take action against the investors who have violated their agreements. But in the case of Rhino Products, the BOI has aided and abetted the investor by allowing them to ignore the pre-conditions laid down in the investment approval.
“Rhino Products started manufacturing asbestos sheets in November 2011 and has brought horrendous impact to the environment although the BOI is in deep slumber. Does the BOI follow the same procedure when they come to agreements with other investors? We do know that they have allowed certain other investors too to ignore their pre-conditions but not for all. By doing so, this government institution has become corrupt to the bone. The BOI is maintained by the tax payers’ hard earned money and the tax payers do not want to see that their money is spent unnecessarily. Why should we maintain a team of rouges if they cannot discharge their duties by the people of this country?
They boast of only foreign direct investments (FDI) but do not know that due to their bureaucracy, thousands of people in the vicinity are exposed to carcinogenic asbestos,” said the sources. At a time when the World Health Organization (WHO) in 2006 declared all forms of asbestos as carcinogenic, it is questionable as to why the BOI allowed Rhino Products to commence its operation without the Environmental Protection Licence (EPL) which is compulsory to ensure that there is no adverse effect to the environment.
The sources further said that had the BOI stuck to its pre-conditions, Rhino Products couldn’t have started its production until they received the stipulated approvals. “It is the fault of the BOI. Why couldn’t they follow their own guidelines? Allowing Rhino Products to ignore the pre-conditions is not a good move. This clearly shows how corrupt the BOI is. Unlike the early days, some of the present BOI higher officials can be bought for few thousand rupees. We have proof to prove how these officials have become super rich in few years at the BOI,” added the sources.
The sources further accused the BOI for permitting Rhino Products to commence its manufacturing work in November 2011 despite being aware that the CEA has not given their concurrence to the BOI for the EPL and even the UDA has not approved to allow this factory to have its operation at No. 111, Maithri Mawatha, Ekala, Ja-Ela.
“In a letter dated July 20, 201, the Senior Deputy Director (Planning) UDA Gampaha has informed the Director Enforcement UDA that although factories have been allowed to set up in this area where Rhino Products Limited is situated, they have to be built according to the guidelines of the environment authority as it is also a residential area. As such the UDA does not approve the operations of the Rhino Products in this area,” the sources said.
Meanwhile residents at Maithri Mawatha, Ekala, Ja-Ela are up in arms against Rhino Products and Rhino Roofing Products for causing adverse environment impact.
“Asbestos is a banned substance in over 40 countries and this mineral fibre which comes in various colours and types has been declared unequivocally by the WHO in 2006 as a cancer causing substance. Even the CEA has stipulated that it is harmful when transporting, manufacturing and handling asbestos. This is a horrendous damage to our environment. These factories do not only emit asbestos dust to the environment but also dumping carcinogenic waste to the wetlands where people depend on well water. Although both factories emit the asbestos dust, it is the old factory that dumps their poisonous waste to the wetlands,” said the angry residents on condition of anonymity.
They too confirmed to The Sunday Leader that the asbestos sheets are brought to the new factory from the old factory at Minuwangoda Road.
“This is a regular sight. Although some environmental organizations have written to the BOI and Ministries of Defence, Investment Promotions, Economic Development and to the Finance Ministry about the fraud that is taking place within the two Rhino companies, it is surprising as to why they have failed to take action into this. This is a great loss to the country,” they added.
They further accused the BOI for not taking any action against Rhino Products since the company has not followed BOI regulations.
“They have openly violated the BOI agreements. Although the BOI, the CEA, the UDA and the local authority – Ja-Ela PS has inspected the site and have given their approvals initially, we learn that the PS has not followed the correct procedure to grant the building permits. Proper attention has not been drawn on environmental procedures that have to be followed when this kind of a plant is established in a residential area,” said the angry residents.
According to them, an environmental organization filed a case in Human Rights Commission (HRC) in 2009 seeking redress to the issue and added that Rhino Roofing Products and Rhino Products were asked to suspend their production activities until proper licences and approvals are obtained. “An environmental organization filed a case in HRC in 2009 (Case no: HRC/ 2073/ 09) seeking justice. Although the BOI and the CEA claim that Rhino Products does not need to carry out an EIA, the HRC clearly states that in terms of regulations an EIA is required to be done,” they said.
The HRC recommendation further states, “The Ja-Ela PS and the BOI had failed to follow the mandatory provisions of the Environment Act and had allowed Rhino to establish their factory in an area where a population of 30,000 live.
Thereby they have deprived the local population the right to breath fresh air without pollution. They have been deprived of their right to access to fresh air and drinking water as the air has got pollution with asbestos and steel dust. The water is contaminated with sludge as a result of asbestos waste and the polluted water and industrial effluence have released to the environment untreated”.
The HRC recommendation further states, “I recommended that the licences granted to these institutions be suspended until the CEA conducts a proper evaluation and assessment of the environmental issues in terms of the National Environmental Protection Act No: 47 of 1980. Therefore it is recommended to suspend activities of Rhino Roofing Products and Rhino Products until proper licence and approvals are obtained from the BOI, CEA, SLLRD and the Ja-Ela PS”. According to the residents, Rhino Roofing Products at Minuwangoda Road is operating without an EPL which had not been renewed by the CEA.
“The EPL was cancelled on March 3, 2009 for violating the CEA regulations. Even there is another subsidiary of Rhino Roofing Products at No: 144/ 11, Minuwangoda Road, Ja-Ela manufacturing zinc aluminium sheets. The CEA has confirmed that this factory too is being operated without an EPL. This shows as to how the Rhino chain of factories are violating environmental laws of the country without any fear. How can the BOI claim that Rhino Products Limited does not need to carry out an EIA when the residents are exposed to the carcinogenic asbestos? This company shows no fear carrying out their illegal activities that violates environmental regulations. The UDA, in one of its letters to the Executive Director, BOI, establishes the fact that BOI officials have not visited the site to establish the impact of this factory on residents. The parent company continues to flex its muscles and pollute the environment without batting an eyelid,” claimed the residents.
According to them, as a result of the BOI conveniently ignoring their own pre conditions that the site needs a UDA approval prior to signing the agreement, the UDA fined Rhino Rs.14.39 million in October 2012 for this violation. The residents further said that Rhino Products does not send their employees for medical checkups once in three months as stipulated in the BOI agreement.
“According to the BOI agreement, the company has had to send the employees for medical checkups once in three months. But the 65 labourers, supplied by an agency, are regularly rotated so it is not necessary to send them for medical checkups. As a result they take the cancer symptoms back home” they added.
Meanwhile the residents, while accusing the Rhino Group of Companies for jeopardising the lives of the people by exposing them to carcinogenic asbestos, noted that the company had opened a Medical Incentive Care Unit (MICU) and an Operating Theatre at the National Cancer Institute, Mahragama.
“While exposing our lives to cancer, the Gnanams have opened a Medical Incentive Care Unit and an Operating Theatre at the Cancer Institute Maharagama. This is ridiculous. If they are so concerned, why don’t they shut these asbestos manufacturing plants and stop dumping carcinogenic waste in the wetlands,” added the residents. However, Director Environment BOI, Shereen Perera said that Rhino has already submitted their application for the EPL but due to the Human Rights Commission case, the CEA has not granted the concurrence to the BOI to issue the EPL to Rhino Products. “Before the company commenced their production, they submitted us the application for the EPL. Generally this is a long procedure and takes time. But in this case, because of the HRC case, the CEA does not issue their approval until the HR case is over,” said Perera. When asked whether the case is still pending, Perera said that she came to know that the case is now over but added that she was not informed officially.
“Since we came to know that the case is over and because we were not informed by the HRC, one of our lawyers visited HRC on two occasions to meet the officers to find out what the status of the case is. However the lawyer has failed to meet any relevant officials at the HRC to know about the case. Then we sent letters to them requesting them to inform us what the latest developments are. For that they are yet to respond,” said Perera.
When asked as to why the BOI allowed Rhino Products to commence production knowing that they did not receive the EPL, Perera did not have a proper answer.
However, Director General Central Environmental Authority Dr Alahapperuma confirmed that the CEA has not given its concurrence to the BOI to grant the EPL to Rhino Products. “CEA has not given its concurrence to the BOI to grant an EPL to Rhino Products. It is interesting to find out as to how this company has commenced manufacturing asbestos sheets without an EPL. There are no provisions for them to commence their production without an EPL. This is a gross violation of National Environment Act,” said Dr Alahapperuma. Refuting allegations levelled against Rhino Products, Manager Human Resources Srilal Wickremasinghe said that all necessary approvals have been obtained from the relevant departments before the development work was initiated.
“We did an Environment Impact Assessment (EIA) and has obtained the EPL, the UDA and PS approvals,” said Wickremasinghe.
When asked as to whether the company send all their workforce including the labourers for medical checkups as stipulated in the BOI agreement as there are allegations that only the permanent employees are sent for medical tests since the labourers are replaced very often, Wickremasinghe said that he has got all proof that they have followed the guidelines from the very inception.
“We send them to Nawaloka Hospital for medical checkups. In regard to the labourers, they are supplied to us by two manpower agencies. The labourers who come to work in the factory continuously are sent for checkups but not those who stop halfway through,” said Wickremasinghe. Wickremasinghe was not aware whether Rhino Roofing Products at 30, Minuwangoda Road, Ja-Ela sends their manufactured goods to the BOI enterprise – Rhino Products at 111, Maithri Mawatha, Ja-Ela.
“I am not aware of it but have to check with our Director. I will furnish all the details to you by Friday morning after consulting our Director,” said Wickremasinghe. However till the paper went for publication, Wickremasinghe did not furnish the details he promised to provide. Meanwhile Gampaha District Factory Inspecting Engineer of the Labour Department Anura Kumara said that the labourers at Rhino Products are not sent for medical checkups.
“Only the permanent cardre is sent but not the labourers as they are replaced very often. This is not a good sign. Since it is these labourers that are exposed to carcinogenic asbestos, they should be sent for checkups. But the manpower agencies that provide these labourers rotate them before completing 90 days,” added Kumara.
Meanwhile Piyal Panapitiya, Director (Engineering Approvals and Special Projects) BOI when contacted said that although Rhino Products obtained the necessary approvals from the local authority, later it was found that they (Ja-Ela PS) has not followed the correct procedure to grant the development permit to Rhino Products.
“Until the UDA informed us that the Ja-Ela PS had not followed the correct procedure the BOI did not know of it. That was why we signed the agreement with the investor and allowed them to start the development work,” said Panapitiya.
However when queried as to whether the BOI would have not allowed Rhino Products to commence its development work and then the production work if they knew that the investor had not obtained the required approvals and licenses, Panapitiya said that Rhino Products would not have been allowed to commence work.
When asked as to why then they allowed the investor to commence its operation knowing that they had not received the EPL, Panapitiya agreed that it was the fault of the BOI.
“I am not in charge of that section but still I totally agree with you as we wouldn’t have signed the agreement since the CEA did not give their concurrence to the BOI to grant the EPL to the investor,” said Panapitiya.