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Court case against Statoil refinery: Forced relocation and levelled mosques

Statoil's engagement in the Melaka refinery in Malaysia has led the company into a year long legal dispute between developers and people from two villages that have had to move in order to give place for the gigantic plant. 67 of the more than 600 families moved by force demand more extensive compensations for the loss of home and property, while some 300 fishermen demand compensation for loss of income. The relocated families are also upset over the two mosques that were levelled. Anything like this would have been unthinkable in Norway, where there are no examples that churches have had to be removed in order to give room for industry constructions. Norwegian authorities refuse to comment on the issue, in spite of the fact that the Norwegian Government has a 100% ownership in Statoil.
Artikkelen er mer enn to år gammel. Ting kan ha endret seg.
Statoil's engagement in the Melaka refinery in Malaysia has led the company into a year long legal dispute between developers and people from two villages that have had to move in order to give place for the gigantic plant. 67 of the more than 600 families moved by force demand more extensive compensations for the loss of home and property, while some 300 fishermen demand compensation for loss of income. The relocated families are also upset over the two mosques that were levelled. Anything like this would have been unthinkable in Norway, where there are no examples that churches have had to be removed in order to give room for industry constructions. Norwegian authorities refuse to comment on the issue, in spite of the fact that the Norwegian Government has a 100% ownership in Statoil.


By Harald Eraker and Morten Rønning,
Norwatch

In 1995, when Statoil invested in the oil refinery in Melaka City at the Malaysian west coast, with a 15% ownership, the company received kind words from the then Minister of Trade, Grete Knudsen, who said that this was very gratifying and in accordance with the government's Asia strategy.

Statoil has invested approximately one billion NOK into the construction of the new oil refinery, which will be placed side by side with an already existing refinery (PSR I). This refinery is owned 100% by the Malaysian state company Petronas. The new refinery (PSR II) is owned by Petronas, Conoco and Statoil, and will have a production capacity of 100.000 barrels a day.

NorWatch recently visited Melaka, and can reveal that not all the affected parties are pleased by the refinery. The development has caused confrontations and legal disputes for years.

Riot police
- We have inherited this land from generation to generation. We are like a big family. Then came the oil companies and just took it away from us, says Mohammed Ali, who is in charge of the action committee that represents 67 of the relocated families from the villages Pantai Kundor and Pantai Tanah Merah.

The figures vary somewhat, but well over 300 families have had to move due to the PSR I and II. According to Malaysian newspapers, the area expropriated to build PSR II (into which Statoil is involved) is 142 hectares. No-one in the action committee was aware of Statoil being one of the owners, until NorWatch told them.

- The expropriation of land on count of the PSR II started in 1993, and we are 314 families that have been forced to move, says Ali, who also tells us that all land is owned by the government, and that the authorities consequently do as they please.

In spite of the superior force, many refused to move. In several cases, riot police was set in to remove the locals before the bulldozers did their job. After a while, the majority gave in, and accepted the compensations that were offered. Among other things, Petronas built a complex of cheap housings, which the relocated people were offered to buy.

Court cases
However, the families which organised themselves in the action committee refused to accept the offer. They find the offer far too small, a view the local authorities supported. 67 families took out a lawsuit against Petronas and the Malaysian state. Over two rounds in the legal system, the affected parties got acceptance for the view that the compensation was too small, and the court ruled that the compensation amounts had to be tripled.

But the Malaysian state appealed, and after several years, the case have reached the Supreme court.

- We have now been told that the Supreme court wants the case solved outside of the legal system. The reason for this is obvious: the Government fears that a legally valid decision will establish a precedent. Taken Malaysia's enormous economical development and expansion plans, cases where expropriation of land is relevant are practically queued up, says Mohammed Ali.

He also explains that many of the people who accepted Petronas' first offer, follows their case closely, and are thinking of joining the lawsuit of the action committee.

«We have inherited this land from generation to generation. We are like a big family. Then came the oil companies and just took it away from us»
Mohammed Ali, Leader of the action committee for the people relocated by force, about the Melaka refinery

Naive
The Statoil management in Malaysia have no opinion on the matter.

- We have not taken the compensation into evaluation, but we've heard it's good. As the case is currently in court, we cannot make a statement either way. Also; we do not own the area, so we consider this to be none of our business, says head of Statoil in Singapore, Marcel Kramer.

Statoil's director in Malaysia is a bit more concrete in his written comment to NorWatch:

«The regulation of the area into an industry area, and agreements with the affected families and fishermen were made by the Melaka state and developer Petronas, prior to Statoil entering the picture. (...) We have asked the developers about the circumstances concerning the removal of people from the area, and we have been told that it has all been conducted according to Malaysian laws and regulations. Further, Statoil is informed that the compensations given to the affected families are the largest ever given in similar cases in Malaysia. On the background of this information, Statoil has no problem participating in the PSR II development»

The conflict in Melaka is not just about compensation. In connection with the refinery, a 2,1 kilometres long wharf has been built. It is situated 1,5 kilometres from the beach and is built for receiving tankers. The wharf is connected with land by a mole. The wharf arrangement has led to fishermen no longer being able to operate in the area. As early as in 1992, some 300 fishermen presented a claim for compensation for loss of income, amounting to approximately 17 million NOK. However, till this date they are still waiting for an answer.

- The authorities and Petronas have not kept their promise to us. In June of 1995, our action committee made a deal with them, namely that, in addition to compensations for loss of houses and land, we were to get compensations for loss of income, fruit trees and other useful plants, and that we should receive deeds for new land, 37 year old Moomia Seman of the action committee tells NorWatch.

- We were naive and believed them, but nothing has happened. We are peaceful and simple village people, and have never cared about politics before, Seman continues.

Mosques levelled
The forced relocation of the two villages also led to the tearing down of two mosques , something that was very badly looked upon in the mainly Muslim Malaysia.

- I can not recall any churches having been torn down due to industrial expansion. That would be unthinkable, people would have reacted very strongly, says church consultant Arne Sæther of the Church and Education Department in Norway.

The Church Council have not heard of such occurrences either. They think something like that would be unthinkable in Norway. Statoil, however, refers to a new mosque having been built for the locals by Petronas.

The village burial grounds also ended up inside the fences of the refinery. Marcel Kramer of Statoil says that they will not touch the graveyard, and that it will be kept for the future.

- But we are merely allowed to visit the graves twice a year, accompanied by guards from the refinery. I used to live very close to the graveyard, so that when my father died a few years ago, he was laid to rest just outside my home. Now, I can no longer see my father's grave, Moomia Seman says indignantly.

- Oh, my. This is terrible. It could never have happened in Norway, church consultant Sæther comments on Seman's experience. Seman is one of the few who dismantled his family's traditional Melaka house and moved it before the refinery occupied the land.

On this point, not even Statoil feels entirely comfortable:

«We are sorry that access to the burial grounds for the affected people is limited. (...) Statoil will, however, bring the question of access to the graveyard up with Petronas in Melaka and see if it is possible to make a better arrangement as soon as the construction period is over.»

- They had no moral right to take our land. The authorities should let people's interests come first, says Seman, who thinks the reason that the refinery was placed in Melaka is that some of Petronas bosses come from this county.

«We were naive and believed what they were saying, but nothing happened. We are peaceful and simple village people, and have never cared about politics before.».

Moomia Seman, relocated by force because of the Melaka refinery

«Haven't seen it»
In 1995, the same year as Statoil went into the Melaka refinery, the oil company Shell and Petronas agreed to build an oil pipe in connection to the refinery. The pipeline, which is currently under construction, will transport the oil products from Melaka 145 kilometres north to a distribution facility near the new main airport, south of the capital Kuala Lumpur.

- We believe an environmental analysis has been made for the pipeline, as it will go through jungle and cultivated land, but we haven't seen it, says Statoil's man in Singapore Marcel Kramer.

Statoil's owner, that is the Norwegian state, refuses to comment on the matter in any way.

- Even though the general assembly lays with us, we do not go into these kind of things. Statoil has to answer for it, says Anne Ekern from the Department of Oil and Energy.

- So you will not have any opinion about reprehensible circumstances that are brought to light in a company which you own 100%?

- That is what's implied in the answer I just gave, Ekern answers, and ends the conversation.

The answer may only be interpreted in the manner that the Melaka refinery development still is «in accordance with the government's Asia strategy».

Statoil in Malaysia
Statoil has a 15% ownership in the newest part of the Melaka refinery (PSR II), which is under construction on the west coast of the Malaysian mainland. Statoil invested approximately one billion NOK going into the refinery in 1995. The government controlled Malaysian oil company Petronas is operator and owns 45% of PSR II (in addition to a 100% ownership in the oldest refinery; PSR I), while the American oil company, Conoco, owns 40%. The new refinery will have a production capacity of 100 000 barrels a day. As such, the Melaka refinery will produce 200 000 barrels a day all in all. In comparison, the Mongstad refinery in Norway produces 150 000 barrels a day. Additionally, PSR II includes a new destillation plant for petroleum, one hydro cracker and a coke plant. The Japanese company Chiyoda has been assigned the construction of PSR II. Statoil is owned 100% by the Norwegian state.

Norwatch Newsletter 2/97