The Eppawala Phosphate Scheme:
A Lose-Lose Proposition

Report to Tomen Corporation
December, 1999



INTRODUCTION

        This report is designed as a synopsis of issues relevant to Tomen Corporation's consideration of participation in the proposed scheme to mine the Eppawala Phosphate Deposit to exhaustion in a short period. It provides (I) an introduction to the Eppawala region; (II) a discussion of the ecological and human consequences for Eppawala (where the apatite and other phosphate-rich minerals will be mined) and (III) for Trincomalee, where the raw material will be processed into phosphate fertilizer; (IV-V) the political circumstances in those two troubled places and finally (VI-VIII) three compelling reasons why this is a bad investment for Tomen Corporation: it will damage Tomen Corporation's international reputation, it will result in the loss of invested capital, and it is fundamentally immoral.


I. HISTORY AND SOCIETY OF THE EPPAWALA REGION

        The region which would be affected by this project is a place of pristine natural beauty and significance which supports a thriving 2000-year-old civilization.

        Eppawala stands in the center of what professional engineer and historian D.L.O. Mendis calls "the Kalawewa-Jayaganga Water and Soil Conservation Ecosystem," a candidate for World Heritage Status through UNESCO. Kalawewa is the name of a huge man-made reservoir tank near Kekirawa, some 50 kilometres from Anuradhapura, the ancient Sri Lankan capital and site of the Sacred Bodhi Tree of Shakyamuni Buddha, and now a modern city which is the primary urban center for the Island nation's North Central Province. Kalawewa is a holding tank for water that collects in the wet central highlands, then is channeled into Kalawewa by an ancient canal called Jayaganga (the River of Victory), a marvel to modern engineers even though it was constructed some 2000 years ago. From Kalawewa the River of Victory brings this water to the otherwise excessively dry but naturally fertile plains of Sri Lanka's North Central Province, and ultimately to Anuradhapura itself. The Jayaganga runs right through Eppawala, where it is called Yoda-aela, the Giant's Canal. Throughout the entire region smaller canals feed the Kalawewa water to smaller tanks, and to smaller tanks still, all carefully calibrated to the natural watersheds in this region full of rock outcroppings like the Eppawala Phosphate Deposit. It has been speculated that phosphate leaching into the Jayaganga as the water clears Eppawala has contributed to the spectacular fertility of this region, which has been one of Sri Lanka's major "paddy baskets" since at least the 3rd c., B.C.E.

        While the singular significance of this as an irrigation system alone - which allowed Anuradhapura to thrive as a cosmopolitan Asian and Buddhist center for 1500 years - has long been recognized, more recent studies, by Mendis and others, have proven that the system did and does much more than irrigate the ancient rice fields. The careful calibration to natural watersheds mentioned above is part of an intricate man-made self-sustaining conservation ecosystem, utilizing every drop of rain water and irrigation water, and every inch of good soil, to support not only agriculture but also irreplaceable stretches of old growth jungle filled with rare medicinal herbs, endangered wildlife including some of the last truly wild Asian elephants left on the planet, and countless useful wild fruits, culinary herbs, reeds from which mats and baskets are woven, and so forth. Villagers in the region, who spend a lot of time in these jungles, attest that they are literally the gardens of former times; not a single plant is useless, and the jungles are punctuated with known as well as unknown archaeological sites. This planned ecosystem, which was naturalized many centuries ago (the whole plan of the waterworks was that they should become indistinguishable from natural rivers and streams and lakes, which they remained until parts of them were coated in concrete under the Mahaweli Development Scheme of the 1970's and 1980's), has produced agricultural surplus for more than two millennia.

        The residents of the ancient villages (purana gam) in the affected region - 87 villages are counted in the 56-square-kilometre block designated for initial exploitation, while thousands more exist in the much larger "buffer zone" around it - are the descendants of the same people who have enjoyed the bounty of this incredible feat of human ingenuity since the Anuradhapura Period (3rd c., B.C.E. to 11th c., C.E.). Their temples are the same temples which their ancestors built; they worship the same stupas which were constructed when their village tanks were first excavated two thousand years ago. The acres-large stretches of jungle designated for burials and cremations (sohon pitiya) in each village are literally filled with the bones of those same ancestors. Though most of the old families still grow rice as their primary occupation, the region has been modernized in pace with the local urban centers such as Kekirawa, Tambuttegama, Talawa and Anuradhapura, which in turn are keeping pace with the heavily westernized urban centers in Kandy and especially Colombo. The transition has not been entirely painless, but it has been made, and Eppawala is now functioning as the urban center for all the people in the affected region. It is at Eppawala itself, the home of "Phosphate Mountain" and the epicenter of the proposed mining scheme, that villagers from throughout the affected area have access to western medicine, consumer goods, gasoline, upper level education, necessary foodstuffs, public transportation, postal and other government services including police, telephone and the internet.

        Eppawala's emergence as a comparatively cosmopolitan center - which I have witnessed over the years of my research there - has also been forwarded by the influx of a rather wide range of more recent arrivals to the region, including merchants and professionals drawn there from the larger cities down south, and also numerous families displaced by the drawn-out Sri Lankan Civil War, who have been settled in newer villages created as part of the Mahaweli Development System-H Project. Though these people have been in the region only for one or two generations, unlike the residents of the old villages who have been there for one or two hundred generations, they too have long since made it home through the creation of neighborhood associations, schools, social clubs, sports teams, and so forth.

        Life in the region is not easy. Poverty is endemic, and village school teachers are considered to be doing "arduous" (duskara) service by living there. But the poverty is a rural poverty which, however frustrating, nevertheless sustains basic human needs and a gentle, happy lifestyle. And even the teachers who go there, like the more recently arrived settlers, find in the ancient customs and cultivated simplicity of village life the virtue which has kept the residents of the old villages contented for millennia. Most people there do not want to go anywhere else, and those who do go to Colombo for work come back as soon as they can. It is their "motherland" (mawu bima), the home where they intend themselves and their descendants to live, and to die.


II. ENVIRONMENTAL CONSEQUENCES: EPPAWALA

        Numerous Sri Lankan and international scientists, scholars, environmentalists and journalists who have examined the Eppawala scheme have warned of the severe consequences it will entail for the region.

        These negative consequences are juxtaposed with the existing labor-intensive slow-extraction project at Eppawala - which will not deplete even "Phosphate Mountain" for centuries, all the time providing for Sri Lankan export crop fertilizer needs - and the alternate plan for faster depletion suggested by a New Zealand study group which found that the Sri Lanka Government itself could produce export fertilizer locally, for a manageable initial investment. Neither of these alternate proposals for exploitation of the Eppawala Phosphate Deposit entails the degree of damage which depletion of the resource in thirty years, according to the methods envisioned by the mining agreement, would necessarily entail, while both of them better provide for a sustainable local culture at Eppawala and maximum local benefit. The Government's willingness to proceed with the more harmful and less beneficial proposal, indeed its refusal even to discuss the other options publicly, is thus quite inexplicable (the two Cabinet Ministers opposed to the scheme have however publicly hinted at government advocates taking bribes for their support).

        There is no unimportant space within the 56-square-kilometre exploration area, because literally every inch which is not someone's home or livelihood is instead one of those stretches of pristine Dry Zone jungle, especially significant here because for at least two hundred years Eppawala has been known in the region as a major center for traditional (Ayurvedic) medicine, and as mentioned these jungles were actually planted as medicinal gardens countless centuries ago. The bounty they provide makes possible the comfortable lives of the surrounding villagers, supplying in addition to medicine all sorts of culinary needs, fuel, cash "crops" such as curry leaves and rare mushrooms and tank fish, and building materials. These "undeveloped lands" are moreover the carefully constructed self-sustaining home to wildlife of all variety, and they are as filled with important (and much more ancient) history and relics as Kyoto. In literally every inch of the mining area, even if the company does only mine known surface-level deposits of apatite-rich rock, it will either be harming the natural environment or disrupting well-established human settlements.

        Thus as the enclosed documents will show, scholars, scientists, journalists and environmentalists have actually identified a wide range of negative consequences which would result from the proposed scheme. In summary form they include:


III. ENVIRONMENTAL CONSEQUENCES: TRINCOMALEE

        In addition to strip mining Eppawala, the proposed mining agreement sets aside hundreds of acres of land on Trincomalee Harbor for processing and shipping facilities. The company proposes to build a rail line which will connect Eppawala to the Kekirawa-Trincomalee line, along which the raw rock will be transported, and from Trincomalee to export first raw rock and later processed fertilizer. In addition to the destruction of natural and human environments in that designated area, Sri Lankan scientists have predicted the following potential environmental consequences:


IV. POLITICAL CONSEQUENCES: THE EPPAWALA-BASED PROTEST MOVEMENT

        The grassroots Committee to Protect Eppawala Phosphate, headed up by a charismatic Buddhist monk, has been working against this scheme since news of the secret negotiations was first leaked during the early 1990's. The Committee became especially active beginning in 1996 when the current government, which had won the support of this region in 1994 with an explicit promise by the current President of Sri Lanka that the Eppawala Phosphate Deposit would not be given to foreign companies, inexplicably initiated its own secret negotiations to turn Eppawala over to the Freeport-McMoRan conglomerate of "Jim Bob" Moffet. The first mass protest rally was held in Anuradhapura to correspond to Sri Lanka's 50th Independence Day Celebration, February, 1998; an estimated 20,000 participants fasted at the Sacred Bodhi Tree to protest this neo-colonial desecration of the very heartland of Sri Lanka's ancient civilization. Subsequent rallies have been held at Colombo (February 1998) and in Eppawala (June 1998, December 1998, March 1999, August 1999, October 1999) and have involved between one and ten thousand participants each.

        While the express philosophy of the Committee is non-violent protest, based on studies of Gandhian social action, these rallies have included much symbolic violence including the burning in effigy of "the company" (labelled "McMoRan") and of the President of Sri Lanka, and angry chanting, gestures and promises to fight even unto the death. Indeed, Rev. M. Piyarathana, leader of the local protest movement, has vowed just this in the event that his pleas - including meetings with the President of Sri Lanka and the U.S. Ambassador, petitions signed by hundreds of revered Buddhist monks, poignant articles in the Sinhala press, numerous speeches - fall on deaf ears. He says, "We will not kill, but we will die," and with him thousands at the rallies have vowed to lay down their very lives, if necessary, in front of the bulldozers, defiant of the armed forces which will be required if the bulldozers are to get there in the first place. The unprecedented protest suicide or murder of a respected Buddhist monk such as Rev. Piyarathana would, I predict, cause large-scale rioting throughout the Island. The ensuing and unimaginable tragedies will bring this place to the attention of the world, whose eyes will be fixed directly on the responsible parties, including Tomen Corporation if it proceeds with financing the scheme.

        There have already been indications of the willingness to stop at nothing to protect ancestral homelands. Threats about what will be done to "the company" if it tries to take Eppawala are widespread in the region, which though perhaps idle are nevertheless corroborated in three events that have occurred this year (1999). In March local entrepreneurs - it is unknown whether they were working independently or for "the company", though local opinion favors the latter option - tried to take small ore samples from a number of sites on the outskirts of "Phosphate Mountain"; one thousand villagers assembled on the spot to drive them away, then marched through the streets of Eppawala chanting "we are not afraid of your money, merchants!" In June 1999 a different local entrepreneur, claiming independence from Freeport-McMoRan, attempted to mine a known phosphate deposit on a small tract of land in the center of the village of Kadigawa, which he had negotiated to purchase. When he arrived from Colombo with an entourage of some 150 people including workers and armed off-duty policemen and soldiers to fence off the tract of land and begin exploration of it, an altercation with the residents of Kadigawa emerged which left ten members of the entrepreneur's party hospitalized and equipment valued at Rs. 250,000 destroyed. The case is currently in court. Finally, in November 1999 a political rally in support of the Leader of the Opposition Ranil Wickremesinghe, held at Eppawala, was grenaded by an unknown assailant (numerous people have directly accused the local government representative of ordering the deed); a policeman and a local schoolboy were killed. The rally had begun with a promise that if elected, the Opposition (the U.N.P.) would halt the negotiations with "McMoRan".

        Rev. Piyarathana, head of the Committee to Protect Eppawala Phosphate, has been threatened in numerous ways since the incident at Kadigawa in June 1999. In addition to threatening phone calls and late-night "visitors" he has been attacked with a stick and even temporarily demoted at the temple he has built into a thriving educational center for the region. In July, following the first of these incidents, a group of nine of Sri Lanka's most powerful trade unions issued a statement that the Government and the President personally would be held responsible for any harm which might befall Rev. Piyarathana and his followers. As a Buddhist monk and an admirer of Mahatma Gandhi Rev. Piyarathana takes all this in his stride, but abhors the violence on both sides, and even in his recognition that thugs have already been hired to intimidate him and his loyal followers, he practices and urges everyone to practice strictly non-violent resistence. It will be up to the company either to employ force against them - which might be met with non-violence, but also might lead to armed conflict (this region was a hotbed of anti-government activity during the J.V.P. rebellions of 1971 and 1988-89) - or to find itself literally unable to undertake its operations. It is by no means certain whether the Sri Lankan armed forces would side with the company, or with the protestors.

        Rev. Piyarathana is in contact with a wide range of national- and international-level environmentalists, scientists, scholars, politicians and journalists, and he certainly encourages the growing national (Colombo-based) and international opposition to the scheme. But the grassroots movement was neither created by outsiders, nor is it dependent on them. Rev. Piyarathana and his followers are truly grassroots: they are motivated by a profound love of this land - including the "undeveloped" parts of it - and rely entirely upon themselves to protect it. Yet it is important to recognize that they do not stand alone. A large number of respected Sri Lankan chemists, economists, geologists, environmentalists, historians, archaeologists and political scientists have decried the foolishness of this project and the certain disaster it will entail. Most of the English Press in Sri Lanka and some of the Sinhala Press have editorialized against it; the Opposition U.N.P., despite having first initiated negotiations, is currently promising that if elected the negotiations will be called off and Eppawala will remain for Eppawalans. There are organizations all over the West and in Japan now actively working against the scheme, and awareness of the issues is global enough that, as mentioned, the world will be watching when the inevitable political consequences of this project are realized. This is likely to be when attempts are first made to conduct "feasibility studies"; the people of Eppawala are not willing to even allow the company access for initial exploration, and as mentioned are willing to lay down their very lives toward that end.


V. POLITICAL CONSEQUENCES: TRINCOMALEE AND THE SRI LANKAN CIVIL WAR

        The Sri Lanka Government has been fighting a protracted war against the Liberation Tigers of Tamil Eelam (L.T.T.E.) more or less continuously since at least 1983. The "Tigers" claim to represent the Island's Tamil-speaking ethnic minority in its call for a separate Tamil nation called Eelam in the Island's North and East. The proposed new nation's principle urban centers and ports would be Jaffna, in the far north, and Trincomalee, on the Island's East Coast. The L.T.T.E. has periodically held Trincomalee, and the Government's current occupation of it is tenuous. It is situated in a traditionally Tamil-speaking region.

        It is also one of the best harbors on the Indian Ocean, highly strategic for any naval power and therefore long envied by India and the United States, to name two countries reported to have made bids in the past for the establishment of a naval base at Trincomalee. There are widespread rumors all over Sri Lanka that the inclusion of processing facilities at Trincomalee in this mining agreement is the first step in making Trincomalee a U.S. nuclear submarine base (rumors which are fueled by the disclosure of the fact that the ore at Eppawala also includes radioactive elements, and that the East Coast north of Trincomalee likewise contains valuable radioactive elements; and by the fact that the map of the proposed company site at Trincomalee includes several hundred acres reserved for unspecified purposes, presumably the construction of barracks and/or radar tracking facilities).

        While none of these rumors has been substantiated, and the U.S. Ambassador denies that the U.S. Government has any involvement in this scheme, there will be real consequences for any corporate installation at Trincomalee given the L.T.T.E.'s claim to it. The Sri Lanka Government is perhaps entering into this deal in the first place because it needs funds to continue its crippling and seemingly endless war effort (which has at this writing just taken another turn for the worse, the L.T.T.E. having regrouped to take Vavuniya, just north of Anuradhapura, which puts the entire Eppawala region at risk, too). The company will be forced either to suffer certain targeting by the L.T.T.E., whose underwater suicide bombers or "Sea Tigers" are already skilled at destroying ships (including in one instance a Red Cross ship), in which case there will indeed be a need for military intervention if the project is to proceed, or else the company will have to bribe the L.T.T.E..


VI. A BAD INVESTMENT: DAMAGE TO REPUTATION

        Tomen Corporation's commendable philosophy is to avoid development projects which severely damage natural and social environments. The present project does just that. Even with the very best of motives, and scrupulous attention to environmental safeguards and standards such as those described by Tomen company officials, strip-mining for rapid exhaustion of the Eppawala Phosphate Deposit will inevitably - for the many reasons laid out above - create ecological and human tragedy. Even if after the fact Tomen Corporation genuinely wants to compensate the victims of that tragedy and restore the environment of Eppawala, poisoned groundwater cannot be cleaned; the heart of a 2000 year old man-made ecosystem cannot be recreated, and the adverse impact of its destruction on the rest of the man-made water and soil conservation ecosystems of the ancient Sri Lankan heartland can only be guessed. Archaeological sites and ancient cemeteries will be discovered only in the very process of destroying them; the intricate social systems and religious customs which bind together the people throughout this region cannot be put back after they have been driven away for 30 years; no amount of restitution is sufficient to replace one's home, one's social world, one's sacred places. You cannot rip the heart out of a thriving ecosystem and society, extract its valuable essences, then put it back. And this is to say nothing of the potential for violent confrontation in one form or another, nor the pollution of the Indian Ocean.

        Not only the harm to the people and environment of Eppawala and Trincomalee will be irreparable; the damage to the reputation of Tomen Corporation, and of Japan more generally, will likewise be permanent. Tomen will truly join the ranks of the U.S.-based corporation with which it proposes to undertake this deal, I.M.C.-Agrico, whose abysmal record of environmental abuse, mining and processing phosphate minerals in Florida USA and Louisiana USA, respectively, is matched only by the notoriety of its parent-company, also closely associated with the Eppawala negotiations, the Freeport-McMoRan conglomerate headed up by "Jim Bob" Moffet and considered the Bete Noire of global environmentalism for its abuses in Indonesia-occupied Irian Jaya, West Papua New Guinea. Just through association with these companies Tomen Corporation is tainted, and its promises to protect the environment and people of Eppawala are rendered suspect. When any or all of the numerous potentially disastrous consequences of this scheme come to fruition, the damage to Tomen's reputation will be permanent, and all future Japanese business in Sri Lanka rendered suspect.


VII. A BAD INVESTMENT: HUGE COSTS WITH NO RETURNS

        Tomen Corporation is being asked to invest in a mine, but in fact it will be investing in a minefield, which on at least five different fronts is more likely to explode in its face than to produce desired profits.

        The roughly $500 million capital investment required for this scheme is gambled on an expectation of much more than that in profit. This is calculated on the basis of an assumption that the market value of the mineral itself can be realized. However, careful consideration of the social and political facts surrounding this scheme will make clear the folly of that assumption. There are numerous reasons to suspect that, despite the intrinsic value of the mineral under consideration, the expected profit will never be realized. In Eppawala itself, even if initial confrontations are put down to allow exploration, the people are determined not to give up. They will dog the company at every stage, from blocking access to the site to blocking transport of the ore. They will remove by night the rail stakes laid by day, will stage sit down strikes all over "Phosphate Mountain", will perform acts of civil disobedience and symbolic protest. Each measure taken against them will increase their fervor, and will bring Tomen and its partners back into international attention and condemnation. Even if despite all this (and costs much higher than anticipated) the ore is successfully transported to Trincomalee, and the processing plants are not bombed by the L.T.T.E., the company's ships surely will be. Who then will profit from ore unextracted, or unshipped? Where will the company find a market for its valuable cargoes of fertilizer sitting at the bottom of Trincomalee harbor?

        It is also important to recognize that the willingness of the Government of Sri Lanka to even consider permitting this tragedy - wreaking irreparable harm on the country while simply giving away 95% of the resource value, widely believed to be as a result of bribes paid by the American partners - is evidence of the short-sightedness and volatile corruption of Sri Lankan politics in general. When a government falls in Sri Lanka, its projects fall with it because the entire infrastructure that supports such projects - power in government agencies such as the Board of Investment which is this scheme's primary local backer, personnel at the Government phosphate corporation, cabinet ministers - is a system of political patronage that changes with the whims of the voters (and simultaneously motivates those whims). If the current government falls (which some think could happen even in the coming Presidential election now scheduled for 21 December, and which history tells us will most certainly happen before the expected profits have begun to materialize) it is entirely likely that the next government will simply expel Freeport-McMoRan and its accomplices, regardless of what investment has been made, escaping international legal sanctions by exposing the corruption with which the current deal has been forwarded, or declaring that the agreement was the unconstitutional act of a deposed tyranny.

        Tomen Corporation would also do well to remember that when the main party of the current P.A. Government, the S.L.F.P., was last in power during the mid-1970's it nationalized scores of foreign-owned corporations and simply confiscated all their assets. At that time the party was led by the current President's mother, who even in her old age remains an important member of the Government. It should also be known that the Sri Lankan Supreme Court has recently granted Leave to Proceed to a Fundamental Rights case filed by Rev. Piyarathana and six farmers of the Eppawala region, which maintains that the mining agreement is in fact unconstitutional in making it impossible for them to live on their own rightfully possessed lands. Though the Government has not yet made any case at all for the legality of giving a whole region of the country over to foreigners, and its advocate claimed at the initial Supreme Court hearing that it can just change whatever laws get in the way of the company, the Sri Lankan judiciary is strong, and due process has survived all the ups and downs of Sri Lanka's troubled postcolonial history. In the short run the Supreme Court decision has guaranteed that the Government will have to disclose all subsequent details of the negotiations (to date there has been an official "order of silence" on the issue, and everything has been conducted in secret), and in the long run the Judiciary has the teeth to cancel the project at any time, regardless of how much investment has already been made.


VIII. A BAD INVESTMENT: MORAL AND ETHICAL CONSIDERATIONS

        Even if Tomen Corporation is willing to accept the damage to its reputation which participation in this scheme entails, and is willing to invest its money despite the high risks of complete loss, still the Corporation should recognize that this investment is a bad one in the moral and ethical sense of the word "bad". This investment is bad because it disrupts and destroys the lives of thousands of innocent people who want nothing more than to be allowed to continue living according to their ancient and beautiful traditions. This investment is bad because no matter how nicely you do it, phosphate strip-mining always and inevitably harms the environment in which it is pursued. This investment is bad because it vandalizes one of the great treasures of global humanity, the world's oldest continuously occupied water and soil conservation ecosystem, both by ripping the heart out of the system conceived as a whole and by bulldozing the countless specific archaeological relics of the civilization which first constructed this amazing naturalized garden. This investment is bad because it defiles an area made sacred by being the home of the world's oldest living Buddhist tradition; the curses launched at advocates of this scheme in the contemporary Sri Lankan press mimic ancient inscriptions found along the Jayaganga which promise rebirth as a dog to anyone who vandalizes it. This investment is bad because it supports the despotic desire of a central government to defy the wishes of the residents of the affected region, refusing even to consult with them on the scheme. This investment is bad because it necessitates the sorts of violent confrontations and loss of human life and property described above. This investment is bad because everyone involved loses in the end.

        The good principles which inform Tomen Corporation's refusal to participate in environmentally and socially harmful projects are the same principles which must now carry us all into the 21st century. The recent events at the World Trade Organization meetings in Seattle underscore the fact that the international community is committed to holding multinational corporations responsible for violations of these principles. Numerous major anti-WTO organizations and internationally known activists in Seattle were informed about the impending Eppawala disaster and the companies which are plotting it. Freeport-McMoRan and I.M.C. conglomerates have already proven themselves to be just the sorts of corporations whose abuses provoke demands of this sort; their reputations have nothing to lose from one more dirty deal, and they have already proven themselves intractable with regard to environmental and human rights issues. Tomen Corporation has not already thus committed itself to the outdated 20th century view that profit justifies anything, and in its consideration of participation in the Eppawala Phosphate scheme Tomen Corporation has an opportunity to turn its back on such immoral approaches to global development, to embrace the socially and environmentally responsible development which will be the hallmark of the coming millennium, and to maintain the respect of the people of our increasingly small world.

        Enough evidence already exists, as will be made clear in the attached documents. I urge you to act on that evidence in pursuit of your stated principles. In light of this evidence even participation in feasibility studies represents a betrayal of your stated principles, and could spark some of the worst consequences which this scheme portends.


Jonathan S. Walters, Ph.D.
Chair, Department of Religion
Member and Former Chair, Asian Studies Program


Back to the Tomen Links