2005 Bangladesh, Gas Well Blowout
Expensive Lessons in Compensation
Geoffrey York
April 1, 2006
TENGRATILA, BANGLADESH -- The shopkeepers of Tengratila have a dramatic way of proving their point. They open the locked doors of their abandoned shops, crouch down and flick on their cigarette lighters -- and jump back hastily as flames burst from cracks in the floor.
Of the 95 shops in the dusty village market, 92 are shuttered because gas is leaking to the surface. Ever since two blowouts last year at the field controlled by Niko Resources Ltd. of Calgary, gas has been bubbling up through the soil around the field, and the shopkeepers are getting fed up.
"We can't open our businesses because of the gas pressure, and we've had no compensation for the past two months," says Abdul Matin, chairman of the market committee. "We're very poor and hungry. If I can't feed my family, it would be better to kill myself by throwing myself under a Niko vehicle."
Niko argues that it has been generous in compensating the thousands of villagers who fled their homes and shops after the blowouts. The company has provided $525,000 (U.S.) in cash payments and $100,000 in services to the surrounding villages. Some shopkeepers were paid up to $400 a month for six months after the blowouts -- but those payments were ended in January.
Niko's safety consultants went through the market in January with a hand-held gas detector. The small yellow gadget is set to emit a loud beep if it detects gas above an agreed-upon limit: 20 per cent of the "lower explosive limit," which is the level at which a gas explosion might occur. Based on those tests, the experts decided it was safe for the merchants to reopen their shops. The compensation payments were terminated.
Inside the gated Niko compound, some company managers are cynical when they hear of the latest complaints. They say the shopkeepers sometimes drill holes in their own floors to increase the gas flow in a fraudulent bid for more compensation. "Every time I walk out the gate, I'm accosted by someone with a problem," one Niko manager complains. "There comes a point, after six months, where you have to wonder whether it's legitimate."
Many company officials suspect that the compensation payments have provoked a stampede of greed. "You start paying them 10,000 taka a month [about $140] and suddenly people wanted to be evacuated," a Niko consultant says.
"It's a pretty significant sum for them. You'd visit their homes and they were perfectly safe, but they were reluctant to go home. A lot of them were clamouring for compensation when they saw money being forked out."
After hearing the grievances of the shopkeepers, a visiting Globe and Mail journalist persuaded Niko's safety experts to go back to the shops with their gas detector. They visited two shops, holding the gadget near the cracks in the floor. Immediately a loud screech is emitted from the detector, and a red light blinks on. The letters "OL" -- over limit -- flash onto the detector's screen.
Niko's environmental specialist, Randal Glaholt, quickly concedes that the shopkeepers are right. A few days later, Niko agrees to pay two more months of compensation payments to the merchants. They pledge to put cement patches on the cracks in the floors, and they promise to keep monitoring the gas levels.
It's another expensive lesson for a Canadian company in the complexities of community relations in a foreign country.
A primer
on blowouts
Expensive Lessons in Compensation
Geoffrey York
April 1, 2006
TENGRATILA, BANGLADESH -- The shopkeepers of Tengratila have a dramatic way of proving their point. They open the locked doors of their abandoned shops, crouch down and flick on their cigarette lighters -- and jump back hastily as flames burst from cracks in the floor.
Of the 95 shops in the dusty village market, 92 are shuttered because gas is leaking to the surface. Ever since two blowouts last year at the field controlled by Niko Resources Ltd. of Calgary, gas has been bubbling up through the soil around the field, and the shopkeepers are getting fed up.
"We can't open our businesses because of the gas pressure, and we've had no compensation for the past two months," says Abdul Matin, chairman of the market committee. "We're very poor and hungry. If I can't feed my family, it would be better to kill myself by throwing myself under a Niko vehicle."
Niko argues that it has been generous in compensating the thousands of villagers who fled their homes and shops after the blowouts. The company has provided $525,000 (U.S.) in cash payments and $100,000 in services to the surrounding villages. Some shopkeepers were paid up to $400 a month for six months after the blowouts -- but those payments were ended in January.
Niko's safety consultants went through the market in January with a hand-held gas detector. The small yellow gadget is set to emit a loud beep if it detects gas above an agreed-upon limit: 20 per cent of the "lower explosive limit," which is the level at which a gas explosion might occur. Based on those tests, the experts decided it was safe for the merchants to reopen their shops. The compensation payments were terminated.
Inside the gated Niko compound, some company managers are cynical when they hear of the latest complaints. They say the shopkeepers sometimes drill holes in their own floors to increase the gas flow in a fraudulent bid for more compensation. "Every time I walk out the gate, I'm accosted by someone with a problem," one Niko manager complains. "There comes a point, after six months, where you have to wonder whether it's legitimate."
Many company officials suspect that the compensation payments have provoked a stampede of greed. "You start paying them 10,000 taka a month [about $140] and suddenly people wanted to be evacuated," a Niko consultant says.
"It's a pretty significant sum for them. You'd visit their homes and they were perfectly safe, but they were reluctant to go home. A lot of them were clamouring for compensation when they saw money being forked out."
After hearing the grievances of the shopkeepers, a visiting Globe and Mail journalist persuaded Niko's safety experts to go back to the shops with their gas detector. They visited two shops, holding the gadget near the cracks in the floor. Immediately a loud screech is emitted from the detector, and a red light blinks on. The letters "OL" -- over limit -- flash onto the detector's screen.
Niko's environmental specialist, Randal Glaholt, quickly concedes that the shopkeepers are right. A few days later, Niko agrees to pay two more months of compensation payments to the merchants. They pledge to put cement patches on the cracks in the floors, and they promise to keep monitoring the gas levels.
It's another expensive lesson for a Canadian company in the complexities of community relations in a foreign country.
A primer on blowouts