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 JICA’s false assertion that its bond issued on US markets was free from coal, when in fact the agency’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.
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.
Meanwhile, in Bangladesh, the cost of the Matarbari Phase 1 project is set to increase by 44.1%. to Tk 51,854.9 crore following the decision to expand the channel to bring in coal. The project is already running behind schedule and is now expected to finish in December 2026, instead of June 2023, costing the Government another Tk. 327.8 crore consultancy fee.
Japan’s double standard on coal
Japan has some of the strongest emission standards at home, but the overseas coal plants funded by its public agencies apply lenient emission limits on air pollutants. They rely on outdated technology for reducing pollution, emitting many times the amount of sulfur dioxide and other toxins than an average new coal plant in Japan.
An important development partner of Bangladesh, where it has funded key infrastructure projects like the Padma Bridge and the soon-to-be-launched Rapid Transport Network in Dhaka, Japan’s investment in coal has drawn criticism from environmental advocates who otherwise are very appreciative of its work in Bangladesh.
Sharif Jamil from Bangladesh Poribesh Andolan told The Daily Star,
“Japan promised not to finance any coal-based power plants in the world while they are financing coal-fired power plants in our country. They need to stop this double standard, being an important development partner of our country,”.
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.