Featured image courtesy TamilGuardian

The Sampur power plant project has come under further scrutiny, following a project synopsis released by the Public Information Officer of NTPC Ltd, India’s largest energy conglomerate.

Among other things, it was revealed that environmental clearance for the project was still awaited as late as February 2015. Clearance has been given to the project to proceed despite concerns raised by environmentalist groups, including a Fundamental Rights case filed by Environmental Foundation (Guarantee) Ltd, an organisation dedicated to environmental protection through litigation.

The Ceylon Electricity Board, tasked with almost all the electricity generation, transmission, distribution and retailing in Sri Lanka has tied up with NTPC for the Sampur project, setting up a joint venture company called Trincomalee Power Corporation Limited (TPCL), in which both companies have a 50:50 equity partnership.

The synopsis was released following an RTI request filed by Venkatesh Nayak from the Commonwealth Human Rights Initiative (CHRI). In 2014, Nayak made a request for a list of all records, including documents in electronic form, as well as copies of the Joint venture, implementation, board of investment, land lease, coal supply and power purchase agreements from NTPC, under India’s 2005 RTI Act. He also made the case that these details should be made freely available as it was in the public interest to do so.

However, Nayak’s request was rejected on the grounds that the documents obtained were covered by “commercial confidence” a recognised exemption under India’s RTI Act. The decision was upheld by the First Appellate Authority. Nayak then appealed to the Central Information Commission (CIC) who decided the case in February this year, although they failed to inform Nayak of the hearing ahead of time.

The CIC ruled that apart from a project synopsis, every other document should not be released under the commercial confidence clause.

Nayak, an RTI expert, explained the details revealed in the synopsis over email:

Main points about Sampur project emerging from the synopsis

1) 500 acres of land in Sampur is under the physical possession of the Trincomalee Power Corporation. Ltd. (TPCL)

2) TPCL submitted its Environment Impact Assessment Report to the Central Environment Authority in February 2015. The report is under consideration and the environment clearance is awaited. It was awaited on the date on which the CIC decided this case.

3) India extended a line of credit of USD 200 million to Sri Lanka in 2010 for construction of a jetty and a transmission line apart from equity contribution to CEB for theJVC, namely, TPCL.

4) CEB will nominate a non-executive Chairman for TPCL while NTPC will nominate its Managing Director. This arrangement will continue for the initial 8 years (presumably from the date of inception of TPCL). Subsequently, the post of the Chairman will be held by nominees of NTPC and TPCL by rotation for a period of 3 years each. So this arrangement may come into force from September 2019 if the period is calculated from the date of incorporation of TPCL.

5) There must be a minimum of 6 directors on the board subject to a maximum of 15 members.

6) CEB is responsible for getting all approvals for the project in Sri Lanka, provide TPCL all information necessary for getting approvals and also pay its equity share in a timely manner.

7) NTPC will be responsible for getting all necessary approvals in India, pay its equity share in a timely manner and provide TPCL consultancy services for the overall development and implementation of the project. It is not clear as to whether these consultancy services will be provide free of charge or not.

8) NTPC and CEB will endeavour to promote the business of TPCL to the best of their ability.

9) Fuel for the projects is said to be “imported coal” and Lanka Coal Company Ltd. is required to supply 2 MTs of coal every year.

10) 100% of the energy generated by the project will be purchased by CEB for consumption in Sri Lanka. (Not being aware of this requirement due to paucity of information in the public domain, Nayak had wrongly claimed in his RTI application that some of the power may be routed to India)

11) The 1st unit of the project is required to become commercially operational within 32 months from the date of Financial Closure which is likely to happen between 6-8 months after the grant of environmental clearance. The 2nd unit is required to become commercially operational within the next 4 months.

The synopsis also revealed details of a confidentiality agreement between CEB and NTPC:

a) Neither party is allowed to publicise details relating to the agreement without prior consent of the other party unless such disclosure is required by law in India or Sri Lanka; and

b) All information received by either party and marked “confidential” shall not be disclosed to outsiders except stock exchanges. But the confidentiality clause will not apply to whatever information that is in the public domain or whatever may enter the public domain without breach of the confidentiality clause of the agreement. This confidentiality obligation will remain for a period of two years even if the agreement is terminated.

Problem areas in the CIC’s decision

Nayak says that NTPC failed to send across a copy of the synopsis, despite him intimating a change of address by email. As a result of this, he was unable to rebut the ‘commercial confidence’ argument before the CIC arrived at its decision at the final hearing.

Apart from this, however, he says he believes there are several contentious points which haven’t been settled by the ruling.

“When the confidentiality clause allows for the waiver of confidentiality if required under applicable laws such as the RTI Act in India, why was that point not used to order disclosure of all categories of documents about the project held by NTPC? This kind of information is required to be proactively disclosed, under Sections 4(1)(b)(vi) and (xiv) of India’s RTI Act (Editor’s note: Which means NTPC should have already released these documents in the public domain). The CIC simply failed to give a ruling on this issue even though I had explained the matter in detail… in my second appeal,” Nayak said.

He added “NTPC is a public sector company in India with no other private sector competitor coming close to them in size and volume of power and revenues generated. CEB is a state agency in Sri Lanka with perhaps a near monopoly in its sector. So how anybody’s competitive position will be negatively affected by disclosure of the agreements listed in the RTI application is a big question.”

“I had not sought details of the technology that would be used for power generation. Disclosure of that information might have attracted the commercial confidence clause. But I never asked for that information. The agreements that I had sought are in NTPC’s possession being a 50% partner in TPCL and also having its nominee as the Managing Director of the company. Nevertheless they refused to disclose the information.

Nayak also cited a ruling given by the Supreme Court of India in Ram Jethmalani & Ors. vs Union of India [(2011) 8 SCC 1] famously known as the “black money case”, regarding the superior position of the fundamental right of the people to know over confidentiality clauses contained in international agreements that India enters into.

Withholding of information from the petitioners by the State, thereby constraining their freedom of speech and expression before this Court, may be premised only on the exceptions carved out, in Clause (2) of Article 19, “in the interests of sovereignty and integrity of India, security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence” or by law that demarcate exceptions, provided that such a law comports with the enumerated grounds in Clause (2) of Article 19, or that may be provided for elsewhere in the Constitution.

71. It is now a well recognized proposition that we are increasingly being entwined in a global network of events and social action. Considerable care has to be exercised in this process, particularly where governments which come into being on account of a constitutive document, enter into treaties. The actions of governments can only be lawful when exercised within the four corners of constitutional permissibility. No treaty can be entered into, or interpreted, such that constitutional fealty is derogated from. The redundancy, that the Union of India presses, with respect to the last sentence of Article 26(1) of the double taxation agreement with Germany, necessarily transgresses upon the boundaries erected by our Constitution. It cannot be permitted.” [Editor’s note: emphasis ours]

Though Nayak cited the case in his second appeal, the CIC did not even make a mention of this case in its decision in order to determine whether larger public interest in disclosure outweighed the harm to the protected interests of “commercial confidence”. During the hearing NTPC even claimed that disclosure of more project details may harm Indo-Sri Lankan ties, Nayak said.

“NTPC is investing the taxpayers’ money in the project which is meant for supplying power to the people of Sri Lanka. Surely, people in both countries have the right to know much more about the Sampur project than what the two partners and TPCL are willing to place in the public domain.”

Meanwhile, the Sampur project came under fresh scrutiny as reports emerged that Sri Lanka was considering switching the plant to run on Liquified Natural Gas (LNG) rather than coal, due to the controversy and the questions raised by environmentalists and human rights activists, since several people could have their livelihood disrupted thanks to the project. One of the environmental groups is Environmental Foundation (Guarantee) Limited, who  filed a Fundamental Rights application in the Supreme Court  objecting to the use of coal as a source of energy generation and in particular, the proposed Sampur Coal Power Plant, on the 31st of May 2016. The respondents for the case include, among others, the Ceylon Electricity Board, Central Environmental Authority, and the Ministry of Power and Renewable Energy. The grievances highlighted in the petition include the discrepancies in the EIA as well as the long term environmental and health impacts that a coal power plant will invariably cause.

Sampur also saw its fair share of conflict – with several people being displaced from their homes for years. After the conflict ended, the area remained off limits thanks to the construction of the power plant – delaying the resettlement process considerably, although the Government has now begun returning resettling the remaining IDPs.