by Jobaira Khan 11 June 2020
A World Bank tribunal, which materialized under the Convention on the International Centre for Settlement of Investment Disputes (ICSID), has made Niko Resources Ltd accountable for the explosion due to negligence that ensued in January, 2005 at Chhatak gas field in Tengratila of Sunamganj, Bangladesh whilst the Bangladeshi ancillary of Niko was bringing off drilling progressions there. The tribunal determined that Niko must recoup BAPEX for the explicit damage and destitution concerning the emancipated gas as well must compensate for straightaway deteriorations to the environment and public health in the encompassing area.
Niko Resource Ltd, a Canadian based multinational oil and gas company, in 2003 with Bangladesh Petroleum Exploration and Production Company (BAPEX), got itself into a Joint Venture Agreement (JVA) which conveyed Niko to secure the rights in the Tengratila gas field. In January 2005 during the drilling of a gas well there, haphazardly sparked a detonation that blew up the field which caused no death but compelled thousands to relegate, annihilated oodles of cubic feet of gas which worth around 50-60 million dollars and an immense extermination of the environment. The second bang eventuated in June, 2005 when Niko ventured to suppress the wound of the January outburst. Since no productive proposition had not taken by any vigilant authority, for a couple of months, the gas field incinerated.
Roughly the contour of the gas field area is northeast alluvium and hilly and part of spheres of the Sylhet basin. By cause of the explosion, the diffusion of sand and gas troubled the enclosing domains including rocky, rift valleys, hillocks, and low-set lands. Besides the fire stirred mostly the extents link forest trees, fruit-bearing trees, and dwelling areas. Intensely the subterranean the clay soil and sand ejected with gas. Adjacent to the gas field, an exorbitant quantity of noxious chemicals like Arsenic was detected in the drinking water.
In 2a008, following the episodes, the government had lodged a money suit, making Niko liable, with the court of Dhaka Joint District Judge, Bangladesh. Subsequently the High Court division of Bangladesh, in November 2009 afterward a particular case brought to court by Bangladesh Environmental Lawyers Association (BELA), turn aside government from expending any amounts to Niko prior to the realization of indemnity for the explosion.
With ICSID, the Niko Resources Bangladesh Ltd in 2010, entered into a pair of cases; (i) asking an order margining them from the culpability for the Tengratila explosions, (ii) claiming the overdue for the endowed gas from Feni (where Niko started its operation) to Petrobangla.
The World Bank tribunal after approx. ten years-long legal encounter confer such verdict however to enumerate the extend of the indemnity additional procedures need to be administered. Niko held responsible for contravening their commitments as an executive under the JVA being unsuccessful to regulate undertakings in line with the requirements of the international petroleum industry. Besides, the concerned authorities of Bangladesh got direction from the Supreme Court of Bangladesh to confiscate the assets of Niko, retained through JVA, in Bangladesh in favor of the writ petition filed by Consumers’ Association of Bangladesh (CAB) in 2016 before the ICSID’s verdict.
In the socio-economic evolution of Bangladesh, natural gas has a vital position as an essential source of energy. The pervasive usage such as in industries, generating power, manufacturing fertilizer and household chores, and about 73% usage in commercial purposes natural gas become an eminent demand. It is reasonable considering other energy sources and also which are imported to natural gas here as it is economic and ecological.
It is difficult for a developing country to carry out the up to level drilling operations thus needs a secondary collaborator from any developed authority. However, in the case of the Tengratila incident there happened this extensive blowout. Yet, the verdict in favor of a developing country like Bangladesh demonstrates that no international venture capitalist can just have a brief parade considering her as weak because the country can act to contain the rights in front of international tribunals.
For a developing country like Bangladesh, the detriments of gas field explosion are irreplaceable. It is crucial to determine the losses not only in case of economy but also environmental downturn. In such kind of mishap, the aftermath generally does not emerge instantaneously but soon or later the country gets into perplex both economically and ecologically i.e. following years, in some ponds droplets of gas can yet be spotted and even many inhabitants’ arable grounds for vegetable and flower cultivation becomes futile. Therefore, the indemnities must be settled and implemented as soon as possible to revive the environment and economic system.