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February 2, 2023

NGO claims Boskalis ‘dodged’ due diligence in Manila airport project bid

Non-profit Global Witness claims Royal Boskalis Westminster ignored environmental and social considerations when it signed a €1.5bn contract to build the New Manila International Airport.

As the EU debates the finer details of its proposed Corporate Sustainability Due Diligence Directive, Global Witness has released a report claiming Dutch dredging giant Royal Boskalis Westminster “dodged environmental and social due diligence” when signing a contract to build a new airport close to Manila, the Philippines.

The non-governmental organisation says a strong EU due diligence law would “help prevent corporate complicity”.

The New Manila International Airport is being built by Filipino conglomerate San Miguel Corporation. In a statement accompanying the report, Global Witness claims the project was “given a green light by the Philippine government in 2019, despite allegations by local communities of a coercive consultation process and questionable environmental impact assessments that downplayed the ecological significance of Manila Bay”.

In 2018, Royal Boskalis Westminster signed a contract worth €1.5bn to construct the first phase of the airport and secured insurance for the project from the Dutch state via the export credit agency Atradius Dutch State Business in May 2022.

The NGO says the project has reportedly displaced around 700 families from their homes “amidst a significant military presence” and “armed military personnel reportedly visited residents’ homes” as part of a consultation process ahead of the construction of the airport, alongside representatives from San Miguel.

“Soldiers arrived every day, intimidating our community,” Teody Bacon, a local fisherman from Taliptip, is quoted as saying in a press statement published by Global Witness.

“They threatened us that if we continue to refuse to leave, something [bad] might happen. That terrified my parents and our fellow [neighbours].”

No compensation for displaced families

Further, the airport is being constructed off the back of planning permission that mentioned an unspecified “land development” not an airport, says Global Witness, while residents have alleged that around half the people displaced by the project have received no compensation.

Many residents were “forced to destroy their own homes and sign an agreement which prohibits them from criticising the project and prevents them from requesting additional compensation”, according to the NGO.

The project will also have destructive environmental consequences for protected areas, says Global Witness. It cites a joint Dutch/Philippe government study that concludes the airport “will permanently damage the natural habitats at the site” and recommends finding an alternative location for the project.

The airport is also likely to destroy part of an internationally recognised wintering spot for migratory birds, the NGO claims.

In a statement sent to Sustainable Views, export credit agency Atradius, without having seen the Global Witness report, insists that the project was “thoroughly assessed” in compliance with international standards and guidelines.

“We see no reason to conclude that the project owner and contractors are ‘dodging environmental and social due diligence’,” it says.

Atradius notes that the initial project plan “solely followed local legislation and was not in line with international standards”, but that these problems have been addressed through due diligence, including commitments and agreements from San Miguel to address environmental and social impacts in accordance with international standards, such as OECD guidelines.

Elements that were not mandatory by local laws and regulations included “regular communication towards the community and the hiring of local experts to comply with international standards,” it adds. “Informal residents of the area have now been fully compensated by the project owner”, and temporary compensation areas have been set up for migratory birds.

In a letter sent to Global Witness, and seen by Sustainable Views, Boskalis explains the situation along similar lines, adding that compliance with due diligence commitments are monitored and audited every quarter by independent consultants.

San Miguel also replied to Global Witness and in a letter seen by Sustainable Views, the company insists it complied with due diligence requirements and that the project is “crucial” for the Philippines as the country “tries to pull itself out of an economic decline brought on by the pandemic and other adverse global developments”.

‘New example of human rights abuses’

Lara Wolters, a Dutch socialist member of the European Parliament, says the airport is “a new example of human rights abuses and environmental harm happening in the name of European companies”.

The findings by Global Witness “help explain why particularly Boskalis has recently been vocal against new rules to stop companies from causing harm: clearly it is bad for bad business”.

Boskalis has been critical of a proposed Dutch law introducing human rights due diligence obligations. In a statement to Sustainable Views, a spokesperson for the company says this criticism is based on a recent conclusion by the Dutch State Council, which describes the proposal’s “combination of open standardisation, wide scope and extensive administrative and criminal law enforcement mechanism as irresponsible”.

The proposed law “violates the principles of legal certainty and proportionality” and “contains serious shortcomings in terms of practicability and enforceability,” the spokesperson says, quoting a translation of the Dutch State Council’s conclusion.

The European Parliament’s environment committee will vote on the CSDDD on February 9. Global Witness’s Aurelie Skrobik says the EU has a “once-in-a-generation chance” with the directive “to stamp out this corporate abuse by obliging companies to respect the communities and the environment affected by their activities”.

Until now, corporate accountability initiatives, such as the OECD guidelines, have been voluntary, with only a handful of EU member states adopting their own laws. The CSDDD would oblige bigger companies to prevent and mitigate adverse human rights and environmental impacts in their own and their subsidiaries’ operations, and to implement climate transition plans.

Various companies have been pushing back against certain parts of the proposal, not least whether it should include whole value chains and whether financial institutions should be covered by its scope.

A report published by the European Coalition for Corporate Justice and other NGOs in June 2021 concluded: “Despite lip service in support of a mandatory due diligence law, many corporations and their lobby groups seek to make it toothless by restricting or even banning strong liability provisions and access to courts for victims.”

Photo credit: Wirestockc/Envato

A service from the Financial Times