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Indigenous Representatives at Asian Development Bank Headquarters Call for Cancellation of Loan to Sarawak Energy

Indigenous Representatives at Asian Development Bank Headquarters Call for Cancellation of Loan to Sarawak Energy

Kuala Lumpur - Indigenous peoples' representatives are en-route from Sarawak, Malaysia to the headquarters of the Asian Development Bank (ADB) in Manila to raise concerns about a US$45 million loan being proposed for Sarawak Energy Berhad (SEB) to build a high voltage transmission line. At the ADB, the delegation will be submitting the findings of research conducted along the transmission line route and meeting with the Bank’s Executive Directors, the Office of Anti-Corruption and Integrity, and senior personnel.

The loan to SEB is proposed for the Mambong-West Kalimantan section of the Trans-Borneo Power Grid. As of February 2015, SEB reported already completing 90% of the transmission towers and 65% of the transmission line for this project.

In October 2014, 40 organizations issued a letter to the President of the ADB and the bank’s board of directors warning them of the reputational and financial risks associated with the loan. While the results of the ADB’s own subsequent investigations into SEB are still pending, a fact finding mission was initiated by concerned civil society organizations to investigate the situation of the communities affected by the transmission line. Their research revealed systematic violations of legal standards outlined by the Malaysian Constituion and the ADB’s own social safeguard standards.

As explained by Caroline Nyurang, a research team member from SAVE Sarawak's Rivers Network, "Since SEB is also seeking to build hydroelectric dams on native customary lands, we wanted to speak directly with the landowners along the transmission line route about their experiences. We heard uniform disappointment and indignation at the process of land acquisition and compensation; good faith negotiations had simply not occurred. Adequate compensation for destroyed fruit trees has not been offered; there has not been any compensation whatsoever for land acquisition. Adding to peoples' frustrations was the lack of knowing how to have their grievances effectively addressed."

Thomas Jalong, President of Jaringan Orang Asal SeMalaysia, said, "Through our discussions with the Bidayuh and Iban landowners, it became clear that SEB had failed to hold meaningful community consultations and to obtain their free, prior and informed consent." He continued, "We urge the ADB to immediately withdraw the proposal to offer SEB a loan to build the Trans-Borneo Grid in Malaysia. Basic requirements a company should meet to obtain a loan from the ADB have already been flouted. The ADB should now avoid engaging with SEB until there is irrefutable evidence that remedial actions have been taken to comply with the Malaysian Constitution, international agreements to which Malaysia is signatory and the Bank’s own safeguard standards."

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