Thursday, January 9, 2014

Victory for Borneo natives as Sarawak Energy is about to drop its Norwegian CEO


Ladies and Gentlemen, Dear friends,

The Bruno Manser Fund has learned from well-informed sources that Torstein Dale Sjøtveit's contract as CEO of Malaysian power supplier Sarawak Energy will not be prolonged by the Taib government after its expiry in November 2014 and that Mr. Sjøtveit will be replaced by a local. We have also learned that Mr. Sjøtveit has recently travelled to Myanmar where he is apparently hoping to obtain a new position in the energy industry. When contacted by the Bruno Manser Fund, Mr. Sjøtveit did not answer our call to confirm or deny our information. 

The Norwegian CEO was employed in December 2009 on a three-year contract which was prolonged in 2012 for another two years and will expire in November 2014. The generous contract earned 59-year old Sjøtveit an annual 1.2 million USD plus a number of benefits and made him one of the best-paid managers of Malaysia. 

During his tenure as CEO, Mr. Sjøtveit made himself a fervent defender of Sarawak Chief Minister Taib Mahmud's controversial plans for twelve new hydropower dams in Sarawak. The former Norsk Hydro executive rebutted all criticism but refused to enter into a meaningful dialogue with NGOs and native communities who protested against their forced resettlement and the flooding of large tracts of the Sarawak rainforest.

Mr. Sjøtveit's tenure as CEO saw the impoundment of the 2400 MW Bakun dam in 2011 after a long construction history full of controversies. Bakun is Asia's largest dam outside China and has been labeled a "monument of corruption" by Transparency International. Its construction entailed the forced displacement of 10,000 indigenous people.

Mr. Sjøtveit was mainly responsible for the construction of the Murum dam, whose project management he commissioned to a subsidiary of Hydro Tasmania, the state-owned Australian energy company. He also pushed ahead the plans for a new mega dam on the Baram river and feasibility studies for close to a dozen other dam projects on various rivers in Sarawak.

The construction of the Murum dam is an example how social and environmental issues should not be dealt with in dam-building. The Social and Environmental Impact Assessment (SEIA) was only published after two thirds of the dam had been built and immediately led to fierce protests by affected native communities. For the dam, close to 1,500 indigenous Penan and Kenyah were forcibly resettled. In late 2013, the Murum dam impoundment started without prior notice having been given to five affected longhouses. The blockade of close to 200 Penan was only dissolved after Sarawak Energy resorted to significant informal cash payments to the protestors.

Despite Mr. Sjøtveit's determination to present the Sarawak government's dam plans as sustainable and necessary for the development of the state, his tenure in Sarawak has been characterized by a number of failures and controversies and a serious lack of transparency. All in all, it has to be looked upon as a missed opportunity to reconcile hydropower with the real development needs of the rural communities.

* In March 2012, Rio Tinto announced it would scrap plans for a $2 billion aluminium smelter project in Sarawak because it "could not agree on the commercial power supply terms with Sarawak Energy".

* In December 2012, Hydro Tasmania announced its withdrawal from Sarawak Energy's dam plans in the wake of an Australia tour by an indigenous delegation from Sarawak. 

* In September 2012, Sarawak's Save Rivers group lodged a complaint against Mr. Sjøtveit with Malaysia'a Anti Corruption Commission MACC because Sarawak Energy had unduly favoured construction companies linked to the family of Chief Minister Taib Mahmud

* In May 2013, 600 Penan from Sarawak appealed to the Norwegian King to call Mr. Sjøtveit back home to Norway.

* In May 2013, the International Hydropower Association's World Conference in Kuching, Sarawak, saw protests of over 300 natives against their forced resettlement by Sarawak Energy's dam plans.

* In June 2013, Sarawak saw a seven-hour power blackout, which was apparently caused by the Bakun hydroelectric plant. 

* In November 2013, blockades staged by native communities forced Sarawak Energy to stall all preparatory works for the planned Baram dam. As of today, the situation on the ground remains tense. 

* In November 2013, the Bruno Manser Fund lodged a criminal complaint against Mr. Sjøtveit with Økokrim, Norway's anti-corruption watchdog, because Sarawak Energy had unduly favoured companies linked to the family of Sarawak Chief Minister Taib Mahmud. During Mr. Sjøtveit's tenure, Taib family companies have received over USD 416 million in public contracts from Sarawak Energy. In an opinion piece published by the Norwegian weekly Ny Tid, Mr. Sjøtveit famously declared that he had "no stance on corruption" in Malaysia.

The Bruno Manser Fund welcomes Mr. Sjøtveit's impending departure from Sarawak Energy and urges the Malaysian power provider to use the opportunity to scale down its unreasonable dam plans. In particular, we call on Sarawak Energy to replace chairman Hamed Sepawi who, as cousin and one of the main business associates of Chief Minister Taib Mahmud, lacks the necessary independence to preside a state-owned company in the public interest.

With best wishes,

Your BMF team


Bruno Manser Fund, Socinstrasse 37, 4051 Basel, Switzerland  

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