"Comments on Coral North Floating gas project show EIA shortcomings  and expose its harmful impacts"

In May 2024, Justiça Ambiental and Natural Justice submitted comments on the Environmental Impact Assessment (EIA) report for the proposed Floating Liquefied Natural Gas (FLNG) unit, “Coral North”, in the Rovuma Basin in the province of Cabo Delgado, Mozambique.

The Coral North project, to be developed by a consortium led by Italian company, ENI, entails the development of six (6) subsea wells to extract natural gas from Mozambique’s offshore  Coral reservoir. The gas will be treated, liquified, stored and offloaded, for export, from the FLNG unit, which will be anchored at sea approximately 50 km from the coastline. The production capacity of the unit is 3.55 MPTA (million tons per year) of gas. This project is intended to be a replica of the existing Coral South floating LNG project, also run by ENI, which has been operational since 2022. The Coral North and Coral South units would be 10 km apart. 

Comments on the EIA show that this project is not sustainable and that there will be unacceptable harmful impacts should it proceed. The comments to the EIA advise that the  Coral North project, and its EIA, are not in compliance with national and international legal instruments, including Mozambique’s Constitution, its Environmental Act (20/97) and EIA Regulations. Therefore, the authorisation and licensing of this project should be refused. These comments are supported by independent expert reports on the impacts of the project.

Currently, the project is being developed by Mozambique Rovuma Basin, whose three main shareholders are ENI Rovuma Basin, ExxonMobil and China National Petroleum Corporation. [...]

Key objections  

Some of the key objections to the project’s EIA, as raised in the comments, are the following: 

Public participation during the EIA process was inadequate and several essential documents that were needed in order to comment on the EIA were not made available. [...]

The EIA does not adequately assess the project’s impacts on climate change or the risks of climate change to the project and the surrounding area, which is critical as Mozambique is highly vulnerable to the impacts and high costs of climate change. Importantly, the project also risks jeopardizing coastal communities’ ability to adapt to the impacts of the climate crisis as these intensify – these impacts were not assessed in the EIA. [...]

The EIA does not adequately assess the socio-economic impacts of the project. [...] It fails to account for the fact that, to date, LNG development in Mozambique has yielded little in the way of social and economic benefits for the people of Mozambique.  In Cabo Delgado, where this project would be developed, it has been the opposite, as circumstances for people on the ground have worsened since the start of exploitation of gas in the region. 

According to the International Institute for Sustainable Development (IISD), LNG projects in Mozambique have increased the national oil company’s debt and sovereign liability. [...] Gas extraction consortiums also avoid paying taxes on dividends or interest. Mozambique, as a country, has very limited participation in the value chain, so while foreign companies make money at every stage, Mozambique does not. [...]

The EIA does not adequately assess the impacts of the project on the health of women and vulnerable groups in the affected communities, which is required by Mozambique’s EIA Regulations. The project also has important implications for human rights and the ongoing conflict and insecurity in Cabo Delgado. The fact that the project is located in Cabo Delgado, which is currently a conflict-zone, is important. The conflict has led to over a thousand deaths and has contributed to a humanitarian disaster, with local communities displaced, killed, traumatised and facing severe hunger. 

The fact that the primary components of the project would be based offshore is irrelevant. For companies operating in conflict-affected contexts, the United Nations Guiding Principles on Business and Human Rights (UNGP) state that, as the risk of serious human rights violations is greater in conflict-affected areas, companies should undertake a more complex human rights due diligence process. The EIA did not conduct the due diligence required for developing a project in a conflict zone. [...]

In conclusion, the comments submitted by Justiça Ambiental and Natural Justice indicate that the EIA report is flawed, and does not comply with the legal requirements. For these reasons alone, the project should not be approved by the Department of Environment. It is clear that the project will also lead to significant damages and that the project risks outweigh the benefits. [...]