Super Petrochemical Building Refinery at Karnaphuli Without Approval, Machinery Imported Without Informing BPC

A large refinery of Super Petrochemical PLC (SPL) is being built at Karnaphuli in Chattogram without government approval. The company also took no approval from the Bangladesh Petroleum Corporation (BPC) to import a huge quantity of capital machinery for the plant.

Clause 7.1 of the 'Policy for Establishing Refineries at Private Level, and Importing, Storing, Processing, Transporting and Marketing Crude Fuel Oil, 2023' clearly states, 'No refinery may be established without government approval.' The refinery at Karnaphuli is allegedly being built in disregard of this central state condition.

The head of a seven-member recommendation committee formed by the BPC admitted these facts to journalists on Thursday afternoon, after inspecting the SPL plant on Wednesday evening.

BPC general manager (commerce and operations) Mohammad Zahid Hossain told journalists that construction work on the refinery is under way there even though there is no government approval. He said, 'Some development work has been done on the project. New tanks are being built; we have seen the crude plant they are building. They have given some plant-related documents. We are reviewing them. Whatever documents they finally submit will be mentioned in the report. The building of Units 2 and 3 outside the policy will also come into the report.'

Asked how such a huge quantity of machinery arrived without BPC approval, the head of the inquiry committee admitted directly, 'They (SPL) did not seek any approval from the BPC for importing capital machinery and other machinery.'

Last Tuesday, BPC secretary Shahina Sultana formed the committee through an office order and asked it to submit a report with recommendations on approving the refinery's production operations within just three days. But on Thursday afternoon the committee chief said otherwise. Expressing uncertainty about submitting the report within three days, he said, 'We have only just returned from the inspection. The committee may have more queries for them. The other members of the committee will discuss those matters after reviewing, before preparing the report.'

Responding to questions about the timing of Wednesday evening's plant inspection, Zahid Hossain claimed, 'We spent more than three hours going around the plant area.' However, he said that despite spending three hours there, the plant's actual capacity was not verified. He said, 'We did not start and check each machine or the plant. A technical committee would look at those things. It would check whether input and output are happening properly. And the ministry will decide on final approval.'

A big question has now arisen within the energy sector itself over how a recommendation to approve refinery production can be made for an institution without verifying its technical side.

According to those concerned, establishing and operating a refinery requires more than 30 approvals and clearances from various government departments. Among the key ones are clearances from the BPC and Bangladesh Bank, locational and environmental clearances from the Department of Environment, a licence from the Fire Service and Civil Defence, approval from the Department of Explosives, layout and safety approval from the Department of Inspection for Factories and Establishments, a special permit from the Chief Controller of Imports and Exports, and the National Board of Revenue's (NBR) customs bonded warehouse licence and VAT registration.

According to the allegations, SPL has complied with none of these formal approval requirements. Not only was no BPC approval taken to import the huge quantity of machinery and equipment, serious questions have also been raised over whether duties were evaded on those imports. Those concerned allege that a rush is now under way to hurriedly legitimise the plant without properly verifying whether other goods were imported, or smuggling took place, under the cover of the machinery.

In the meantime, the unauthorised company has applied to the BPC to import a total of 1.2 million tonnes of crude oil a year — 400,000 tonnes of light crude and 800,000 tonnes of heavy crude — which has caused anxiety and concern among the public.

Sector experts say that the opportunity for an unauthorised refinery to import machinery at will in this way is stark proof of extreme weakness in the country's regulatory system. Allowing such a sensitive and strategic industrial establishment to operate without ensuring proper safety and oversight would create a grave risk for the whole country's energy security. They have warned that giving this refinery any kind of clearance without an immediate high-level investigation would be suicidal.