The Sunday Leader

The Big Stink And The Cover-Up

  • Environmental groups accuse NWPEA and BOI of unethical conduct in relation to issuing EPLs to factories causing severe pollution

by Nirmala Kannangara

At a time when Environment Minister, President Maithripala Sirisena himself, is making a concerted effort to protect the environment, it is questionable as to why the North Western Provincial Environmental Authority (NWPEA) is issuing Environmental Protection Licenses (EPL) to factories that are disposing hazardous waste in a careless manner thus polluting the environment.

Environmentalists are also accusing the NWPEA of entertaining all factories that are rejected by other provinces due to violation of environmental laws. They further say that it is upto the Environment Ministry headed by the President to conduct an impartial investigation and find out why a certain official at the NWPEA is continuing to issue EPLs without considering the environmental impact.

“As a result of certain NWPEA officers taking bribes and allowing these hazardous factories to operate without considering the consequences, our people are suffering. We are inhaling contaminated air and drinking heavy metal contaminated water. Our one hope now is that the President will take action against public officers who can be bribed and close down all these factories not only in NWP but in all other provinces as well. Just as due to the use of hazardous pesticides kidney disease spread in the North Central Province, cancers are spreading in the NWP speedily,” a resident of Madampe said.

Meanwhile, questions have been raised as to why the Board of Investments (BOI) is in the process of accepting the EPLs that are issued by the NWPEA when these should rightfully be obtained from the Central Environment Authority.

Bhuwalka Steel Industries (Sri Lanka) Limited was first registered as a BOI venture on November 15, 1994 under Section 16 of the BOI Act. On May 27, 1998 it was registered under Section 17(2) in order to be eligible for tax benefits. The earlier license was cancelled on September 4, 1998.

According to BOI sources, this company had commissioned their operations on July 12, 2000 and their estimated investment was Rs. 658 million but their actual investment was Rs. 198.14 million. Bhuwalka had made yet another application to BOI on January 1, 2002 for their first expansion and had obtained approval on March 5, 2002. Although they obtained approval for their first expansion, the BOI is not aware as to whether they have started commercial operations to date. In that backdrop, Bhuwalka had sought BOI approval for a second expansion on August 15, 2008 but it had been rejected on April 24, 2009.

Bhuwalka manufacture steel bars for the local market by re-cycling waste iron collected from all over the country. Since the iron bars are made from waste rotten iron, the amount of residue – the slag (stony waste matter separated from metal during smelting or refining) is of large quantities and this is dumped in the 32 acre factory premises with no precautions whatsoever.

According to former Chairman, Chilaw Pradeshiya Saba, Jeewan Jude, when waste rotten iron is used to manufacture iron bars, the processing method releases large amounts of slag and fumes which are highly poisonous. “If these iron bars are manufactured with imported steel billets, the amount of slag and fumes are considerably low and they are less poisonous,” he said.

Although this issue had been taken up by environmentalists and residents in and around Madampe, neither the BOI nor the NWPEA had taken any action against this factory which has raised questions as to whether the NWPEA and BOI officials involved are being rewarded for their co-operation.

Meanwhile, defending his action of continuing to renew the EPL to Bhuwalka which has caused serious damage to the environment, Director NWPEA Saman Senanayake, the official responsible for issuing EPLs to all industries within the North Western Province (NWP), said that although such environmental impact occurs, the country needs to encourage investors to invest in the country. He accused the government of not providing suitable dumping grounds to dispose of hazardous waste from factories.

“At a time when the country needs to attract investors, those who have invested in this country will pack their bag and baggage and leave if we impose restrictions,” Senanayake claimed.

Although Senanayake is tasked with ensuring the safety of the environment, his concern does not seem to lie with protecting the environment but attracting more investors to the country which is the duty of the BOI.

Be that as it may, several tests were conducted by the Government Analysts (GA) Department which proved that the air and underground water resources were polluted with slag and fumes emitted by Bhuwalka. As a result, residents of Madampe in Chilaw are being deprived of clean drinking water and clean air. This newspaper is in possession of GA reports that confirm how the underground water has been contaminated with a heavy metal substance.

According to a supervision report dated March 18, 2012 this factory recycles nearly 145,000kg of waste rotten iron daily to manufacture 135,000kg of iron bars. Of this they dispose 8,000kg of slag daily. According to this report the slag disposed daily contains 184kg of lead, 8kg of mercury, 40kg of copper and 40kg of cadmium which is highly poisonous. Furthermore, the slag had been exposed to the rain which in turn led to chemical contamination of soil and ground water. The report further sates: “Since the drinking water resource Nelum Pokuna is situated 3km away from the factory, the waste disposal had directly impacted the drinking water springs in the area. The management of this factory was not concerned about the hazard of this slag and that they had no idea of safe disposal. Personal protective equipment were not used by workers”.

The report recommends that the factory should get technical support from a recommended institution for safe slag disposal and until such a system is established slag has to be stored without contaminating the soil and water. It further states, “The slag already dumped needs to be removed since it causes contamination of soil and water. All lorries waiting for unloading has to be parked under a shelter or has to be covered to prevent water collection. The system has also to be improved to prevent emission of fumes to the environment”.

“If there was an officer with proper knowledge of how such industries could cause grave environmental issues, EPLs wouldn’t have been issued. The NWPEA issues EPLs for personal gain and there are many such industries that were rejected from other parts of the country allowed to operate their businesses in the North Western Province. All such factories ‘look after’ this official at the NWPEA,” sources alleged.

According to the sources, the Chilaw Pradeshiya Sabha had not issued the trade license to Bhuwalka from the very inception  but interestingly, the NWPEA issued the EPL.

“To issue the EPL, the NWPEA should first see whether this factory was given the trade license. When the Pradeshiya Sabha refused to issue the trade license because Bhuwalka did not have a proper waste disposal mechanism, how could the NWPEA issue the EPL? Why did the BOI fail to look into all these aspects and stop giving their approval? This shows how irresponsible the BOI and the NWPEA are. It is similar to the Rathupaswala issue. How can we expect the Environment Ministry to protect the environment from serious impact when two government agencies have openly failed to carry out their duties by the country?”sources queried.

According to documents this newspaper is in possession of, the CEA had made several requests from Director (Environment Management) BOI, Shereen Perera to take prompt action against Bhuwalka but to no avail. According to these documents, after several reminders were sent, Perera had informed the CEA that this factory had not caused any adverse impact to the environment.

“When there are many reports to prove how this factory has caused severe impact to the environment, on what grounds did Perera say that there are no such impacts to the environment? We can say with no fear that certain officials in the BOI and the NWPEA are working for personal gain, sources alleged.

Meanwhile sources from the Consumer Affairs Authority (CAA) told The Sunday Leader how they seized a stock of steel products from Bhuwalka due to its low quality and for not complying with industry standard SLS 375.

The sources noted that the sale of sub-standard steel products to the local market is harmful to the country’s construction industry. As a result of these sub-standard steel products being made out of scrap metal, their prices are well below the quality steel products that made out of imported billets.

“As a result we found that Bhuwalka sell their finished products at an unbelievably low price and wanted them to take the SLS certification. At present we don’t know whether Bhuwalka steel has the SLS certification which is a must,” sources said.

However, Director Product Certification, Sri Lanka Standards Institute Mrs. H.G.S Suriyarachchi said that Bhuwalka obtained the SLS certification, after the CAA filed action against them.

When contacted by this reporter and asked whether the BOI had inspected this site and why an EPL was issued to Bhuwalka Steel Industries when they did not know how to manage waste without polluting the environment, Director (Environment Management) BOI, Shereen Perera said she was not authorised to comment. When reminded that she stands accused of blunders even by the Central Environment Authority (CEA), Perera said she does not accept any of the allegations and still refused to make any comment.

Director General BOI, Duminda Ariyasinghe too was not contactable.  Although a text message was sent to Ariyasinghe a week ago seeking a comment, he had neither responded with a comment nor returned our telephone call at the time of going to press.

Meanwhile Chairman CEA, Prof. Lal Dharmasiri said he too is puzzled as to how the NWPEA is issuing licenses when they do not have qualified and expert technicians.

“They do not have the required equipment or staff (expertise) to issue EPLs. The NWPEA says there are no legal provisions for us to interfere in matters pertaining to the North Western Province. This is a very sensitive issue and when an EPL is renewed, the factory must be monitored to see whether it follows the standard procedures. But we have received information as to how the NWPEA is issuing licenses without an evaluation which is a severe threat to the country’s environment,” Prof. Dharmasiri said.

However, Director NWPEA, Saman Senanayake accused the government of not providing proper dumping grounds and said that all these years Bhuwalka had been dumping the slag without causing any impact to the environment and since there was an issue last year, he withheld issuing the EPL. “As they were using crap iron, the factory released slag. I wanted them not to use scrap iron to make steel bars and to use billets instead. Your newspaper and another newspaper are always attacking industries in the NWP claiming that they pollute the environment. This is happening not only in the NWP but in other provinces too. Why don’t you highlight those industries as well?” Senanayake queried.

Chairman, Chilaw Pradeshiya Sabha Jeewan Jude meanwhile said that the trade license was not issued to Bhuwalka as they had violated environmental laws and their waste is dumped causing severe environment impact.

“The GA’s report clearly states that the water in the area has been contaminated with heavy metal,” Jude added.

However, Customer Relations Manager, Bhuwalka Industries, Rasika Jayaweera said that although the MOH Chilaw had got the GA’s Department to check the water and soil contamination, the reports Bhuwalaka had obtained from SGS and National Building Research Organisation (NBRO) clearly state that neither the water nor the soil had been contaminated.

“In order to issue the trade license, local and central government politicians wanted bribes from us promising not to disrupt our operations. When we refused to do so, supporters of a senior minister in the Puttalam District attacked our manager causing multiple injuries to him. We then filed a case against this politician which is before courts now,” Jayaweera added.

According to Jayaweera, since the reports they have obtained from SGS and NBRO have said that the slags do not cause soil and water contamination and they have been deprived of carrying out their operations over the past few months as the NWPEA has not renewed the EPL without the trade license, the company is considering  taking legal action against those who have stopped them from carrying out their business.

“This is unfair. Ours is not the only steel bar manufacturing factory in Sri Lanka. There are many more such factories and they have been given the necessary licenses but only we were not,” Jayaweera claimed.

Meanwhile, Environmental Lawyer, Attorney-at-Law Jagath Gunawardena said the BOI has to take responsibility for this situation as the BOI has to provide the EPL with the concurrence of the Central Environment Authority.

“Since this is an industry approved by the BOI, it is the BOI that has to give the EPL in concurrence with the CEA. These amendments to the Greater Colombo Economic Corporation (GCEC) Act under which the BOI has been established, were brought in 1992, four years after the 13th Amendment was enacted.”

“It does not mention the provincial environmental authorities, which means that the BOI is entrusted with issuing EPLs throughout the country only with the concurrence of the CEA. Therefore, the BOI has acted against their own Act by not getting concurrent approval from the CEA. Since the BOI provides EPLs to other industries in other parts of the country, why have they given up their usual procedure and allow the NWPEA to issue the licenses? The other important issue is whether the BOI or the NWPEA have taken any legal action against this polluting factory. If not, it is yet another violation of the BOI and NWPEA responsibility, Gunawardena said.




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