The district of Baucau, home to Timor-Leste’s second-largest city, sits on a large limestone formation. For local subsistence communities, this provides their water catchment. For a mining company, it provides the raw ingredients for cement.

The idea of building a large-scale cement-manufacturing facility was first floated by the late Len Buckeridge, a West Australian businessman who was listed by Forbes magazine as one of Australia’s richest men in 2014 before his death later that year. His vision, however, is being carried forward by TL Cement – a privately owned, largely Australian-backed company, working with the Timor-Leste government under the banner “Your Dream – We Will Build!”

The TL Cement mine, which is due to be completed by September 2018, has already begun to raise serious questions among locals and international observers for its sheer size and scale. Also, a full environmental impact study that was due to be approved by the start of 2016 according to the company’s own work schedule has yet to materialise. The apparent lack of environmental transparency and potential impacts on nearby subsistence communities has added new urgency to their concerns.

Charles Scheiner is an American researcher working for La’o Hamutuk, the Timor-Leste institute for development monitoring and analysis. He says his organisation wrote to Timor-Leste’s ombudsman in May, urging him to look into the “near-total failure” to enforce environmental licensing laws for major projects. The letter has been seen by The Saturday Paper.

“We hope this pattern will not be perpetuated with TL Cement,” Scheiner says. “Projects like this can have disastrous environmental consequences – including marine, groundwater and air pollution – if they are not well-managed and regulated. We should not repeat the experiences of many impoverished countries with mining projects, including some run by Australian companies, where the citizens suffer while overseas shareholders profit. As a new nation, Timor-Leste should learn from others, and not copy their mistakes.”

The $US520 million project involves drilling into vast limestone escarpments close to Baucau. At full capacity, it would produce 1.65 million tonnes of cement clinker base a year. That means 5000 tonnes of limestone will need to be extracted each day – 70 per cent of which will be exported to the Australian market, where the bulk of the profits will be made.

Accordingly, the project has already won some powerful supporters in the upper echelons of politics and business in Australia, including the support of senior Coalition ministers and senators including Mathias Cormann, Julie Bishop, Michaelia Cash, Dean Smith and Chris Back. 

The project has been spruiked by its company chief executive, James Rhee, who has held presentations at the Perth Rotary Club championing the benefits of the mine for both Timorese people and Australian investors.

Timor-Leste was chosen for its large, high-quality reserves of limestone and its proximity to Australia – and with the promise that it will create thousands of jobs for local people during construction and then provide 600 permanent jobs once operational. However, a number of local and regional environment groups and observers have raised serious questions about the potential negative impacts of the mine – particularly in light of the plans to extract massive amounts of limestone and clay in areas with fragile “karst ecology” in very close proximity to local subsistence communities.

Karst ecology refers to areas of specialised habitat and delicate hydrology. If these ecosystems are damaged, it can have negative consequences for local water supplies.

“The Baucau communities have co-existed with the karst structure and landscape for many years,” says Asia-Pacific environmental consultant Lee Tan.

“The ecological and social impacts of the cement plant are not fully assessed and community engagement has been brief. Timor’s technical capacity to manage and regulate such a big project is very limited…

“As a young developing nation, cement is an important commodity. However, the massive extraction of limestones and clay can cause irreversible damage to local communities, leaving behind a huge cavity posing long-term risks and hazards. Cement production is a highly polluting activity and requires a massive level of energy consumption to be carried out.”

Although the company has released a terms-of-reference document for an environmental impact study, the actual study has not yet been released. The terms-of-reference report noted that the bores to supply water to the Baucau mine will need to be designed to avoid interference with “major springs in the area that are used for public water supply, bathing, agricultural irrigation and that have spiritual significance”.

According to a recent paper by Melbourne University human geographer Lisa Palmer, the ecology of water in Baucau and the ways in which diverse local water-management institutions coexist in management of the underground water resources are essential in ensuring proper water supply to the city. 

“… in Baucau’s distinctive karst (limestone bedrock) topography the local management of water, and the springs from which it emerges, is deeply embedded in the most important organising principles of Timorese (and Austronesian) social life,” she wrote.

Timor-Leste already has a major problem with clean water and sanitation and, as a result, has the highest rates of stunted growth and malnutrition among children. 

According to the 2016 report Caught Short, by international charity WaterAid, 58 per cent of children under five in Timor-Leste suffer from stunting, which affects a child’s physical development as well as their cognitive and emotional development. This stunting usually occurs as a result of malnutrition in the first two years of a child’s life, caused in large part by lack of access to clean water.

Observers fear the location and proximity of the mine to subsistence communities could make the situation worse for them. Demetrio do Amaral de Carvalho, an environmental adviser to the Timor-Leste government and the co-founder of the local environment group Haburas Foundation, says he shares these concerns about the potential impacts on local communities’ water supplies.

“I agree, the project site is in an important area – not only the limestone area – but it is also important for groundwater systems in karstic terrain. Lifelong community dependency to area, cultural aspects, rituals, livelihoods, local politics and all societal systems will be impacted and influenced by the future cement/mine industry,” he says.

De Carvalho is also of the view that the local community consultation on the project has thus far been inadequate. “I feel we need more and do that in a simple way, simple language, engage more participation, in open process and doing by a proper consultant that fully understand the local societal system.”

However, he says he is still waiting for the final environmental impact study to make a final assessment, and stresses that under Timor-Leste law there is a requirement for “proper socialisation” of environmental impacts of mining projects to public audiences and in particular to affected communities.

But a further concern about the cement project, according to Lee Tan, is that the relatively weak economy and poor democratic structures in place in Timor-Leste may leave the country vulnerable and unable to defend itself if this large Australian conglomerate should ever take legal action. 

Her concerns are not without foundation – TL Cement’s Australian parent company, BGC, has a history of taking legal action when mining projects don’t eventuate. In 2012 director Len Buckeridge sued the West Australian government for $1 billion over delayed approval for a private port at Cockburn Sound near Kwinana in Western Australia, and earlier that same year he had sued a forklift driver who reportedly made defamatory comments about him on Facebook.

“In the event of the project being blocked or delayed, Timor will be weak in defending itself from this large corporation. In the context of the country, the project can potentially spark unrest if it affects water supply and creates other environmental impacts, which will negatively impact on local livelihoods. The excavation of limestone will leave a huge hole which Timor will have little means to deal with, posing risk and hazards to local people in the future,” Tan says.

When contacted by The Saturday Paper, a spokesman from TL Cement confirmed that the environmental impact study and “socialisation schedule” was running behind, but that work had already begun on the port to ship the cement out of Timor-Leste. James Rhee responded: “Unfortunately we haven’t received any environmental approval yet and I have nothing to say.”

One thing is certain – if the new TL Cement mine goes ahead, it will provide a test case for Australian companies operating large-scale mining projects in Timor-Leste. The project’s environmental, social and political impacts should be closely observed, Tan notes, to ensure they benefit the people of this tiny new nation without destroying the country’s fragile environment and water catchments.