Complainants have filed a formal complaint against Japan’s International Cooperation Agency (JICA) — the first of its kind — to the US Securities and Exchange Commission (SEC). The complaint addresses the agency’s false assertion that its bond issued on US markets was free from coal, when in fact JICA’s funding will contribute to coal-fired power plants in Bangladesh.
JICA — the development assistance agency owned by the Japanese government — sought to alleviate concerns of coal-wary investors through the inclusion of a clause in its bond prospectus that claims their activities would be coal-free, stating: “[JICA] will not knowingly allocate any proceeds from the sale of the bonds to activities related to coal-fired power generation”.
The statement in the US dollar bond, issued in April 2021, came as JICA’s own financial statements suggest bonds will contribute to funding new coal fired power plants.
JICA has been involved in the Matabari Phase 1 coal power plant in Bangladesh and has, to date, failed to confirm it will not continue funding for Phase 2. The 1200 Megawatt coal plant located in Cox’s Bazar, home to 100,000 people, poses significant health concerns to the population with estimates that the project could result in up to 14,000 premature deaths across its operational lifetime.
Furthermore, the project planning does not meet JICA’s own Guidelines for Environmental and Social Considerations — built on land that was set aside for shrimp farming, crop and salt production, the project has caused significant displacement and disruption to livelihood means of communities. Community members were also not given prior notice in accordance with the Land Acquisition Act of 1982 and have not received any compensation for their losses and damages.
Five NGOs; Friends of the Earth Japan (FoE Japan), Friends of the Earth US (FoE US), JACSES, Market Forces and Mighty Earth have worked together to file this complaint under the representation of US securities lawyer Kevin Galbraith. Mr. Galbraith stated this complaint marks the first time a governmental organization has been targeted by a whistleblower complaint filed with the SEC.
Eri Watanabe, Japan Finance Campaigner for 350.org said:
Japan’s intention to export coal power plants to Bangladesh and Indonesia goes against the G7’s promise to end new direct public support for international coal power generation by the end of 2021 and contradicts the latest climate science asserting we need to stay below 1.5 degrees Celsius of warming. Furthermore, JICA is blindfolding investors’ eyes — those who are against the devastating impacts of coal power expansion. Japan’s ‘development assistance’ must support genuine sustainable development for the people of Bangladesh such as community-based renewable energy systems, not destructive coal power.
Shibayan Raha, South Asia Senior Digital Organizer of 350.org said:
“Japan’s continued investment in the Matarbari coal plant, and support for outdated and dirty coal technology in the name of development shows that Japan is not interested in Bangladesh’s sustainable growth. Now, attempting to raise bonds from the US stock market by concealing the truth, JICA is violating the terms of this bond and obscuring the facts to not only climate activists, but its own investors.”
Sharif Jamil, General Secretary, Bangladesh Poribesh Andolan said:
“As someone who works with communities whose lives are impacted by coal development, news that JICA is directly concealing its intentions and ongoing involvement in coal in Bangladesh demonstrates a lack of concern for the daily struggles of these communities. As the agency plans to draw up Bangladesh’s energy Master Plan, I urge investors to withdraw support for JICA’s activities as long as coal remains part of the equation”.
See the Market Forces press release with links to the complaint here.