Jeetlal Baiga in the Sasan Moher block forest area, stands near his broken down home, from where his family was displaced by the Sasan coal mine project
Green is in on Wall Street. Or so you’d think, if you believe the sustainability policies of some of the United States’ biggest banks. Bank of America, Citi, Goldman Sachs, JP Morgan and Morgan Stanley all have paid lip service to environmental sustainability and the transition to a low carbon future. And yet these same institutions all lined up for a piece of Coal India Limited, one of the world’s largest coal miners, and perpetrator of environmental and social injustice in some of India’s poorest regions, showing that when it comes to issues of justice and sustainability, they all have a long way to go when it comes to walking the talk.
The government of India intends to sell 5% of its stake in Coal India, hoping to raise over a billion dollars in the international markets. Reports from India indicate that Bank of America, Goldman Sachs, Credit Suisse and Deutsche Bank are going to help raise that money, by managing the share sale. The previous share offer in 2010 attracted over two billion dollars in international capital, but given the company’s struggles since then, and a global downturn for coal, this time it might not be such an easy sell.
Coal India Limited is one of the largest coal miners in the world, and almost all of its coal comes from destructive open pit mines, most of them in forest regions of Central and Eastern India. Forests that tribal communities depend on for their daily livelihood. The same forests that inspired Rudyard Kipling’s Jungle Book, and that today still harbour tigers, leopards, sloth bears and elephants. When Coal India descends on these remote locations, what follows is predictable: tribals displaced and left with no source of livelihood, forced to move into cement and tin boxes that serve as houses, forests clear-felled, streams and rivers fouled. A few of the displaced might be “lucky” enough to get manual labour jobs in the pit that replaces their forest. Their children often end up working along side them or scavenging coal to sell in the informal market – a shocking violation of India’s child labour and safety laws.
Birhor Tribal hunters
This company’s business model is devastating: destroys forests and endangered wildlife, uproot ancient tribal cultures, forcibly displace those who refuse to move, replace aforementioned forests/ cultures with an industrial wasteland. Above all, don’t let respect for human rights or the environment come in the way. All this to produce coal, the burning of which is responsible for approximately 100,000 deaths a year in India. This is the company that Bank of America, Goldman Sachs and others are so eager to lend their services to.
Coal mining in India threatens over 1 million hectares of forest, much of it habitat for tiger, elephant, leopard and sloth bear.
If ethical and environmental reasons aren’t enough to steer clear of coal, there are serious financial risks that Coal India poses to any investor. The company’s stock price has nosedived. Production continues to lag far behind demand. The government of India continues to subsidise coal by keeping the prices artificially low even as cost of production increases, meaning that the share price is likely to remain under pressure and shareholder value is not unlocked.
The financial problems faced by coal are not particular to India, but are part of a larger global shift. Goldman Sachs itself has predicted that coal is going to be eroded by environmental regulations, renewable energies and energy efficiency, warning that the window for profitable investments in coal is rapidly closing.
Sloth bear with cubs in the forests of Singrauli, India. These forests are targetted for coal mining.
Right now, the CEOs of Bank of America and Goldman Sachs are probably figuring out how to spin their involvement with Coal India while continuing to claim a commitment to social justice and a more sustainable, low carbon economy. They will probably trot out the tired myths about the poor in the developing world having no choice but to rely on coal – but here’s the thing. That lie no longer works. Clean energy from wind power and the sun are now almost as cheap (and in some cases cheaper) as new coal, with
mainstream research from the likes of HSBC predicting that coal will be as expensive as solar photovoltaics within 5 years. Others have a tighter timeframe of 3-4 years. The moral justification for supporting coal in India has been demolished. And the financial case for moving capital out of the coal sector has never been stronger. Will the big banks read the writing on the wall?
Ashish Fernandes is a Senior Campaigner with Greenpeace. Follow him on twitter @ashishfernandes