Japan bank probes environmental concerns over LNG terminal in Batangas

MANILA, Philippines — The Japan Bank for International Cooperation (JBIC) will investigate potential violations of its own environmental guidelines linked to its support for Atlantic Gulf & Pacific Company’s (AG&P) liquefied natural gas (LNG) terminal in the Verde Island Passage (VIP). 

JBIC is an investor of AG&P, whose local unit Linseed Field Power Corp. is building an LNG import terminal in Brgy. Ilijan, Batangas City. 

Local fishers and environmental groups oppose the LNG project, fearing oil spills like the MT Princess Empress disaster and damage to the rich Verde Island Passage ecosystem.

In a January 30 notice obtained by Philstar.com, the bank’s examiner for environmental guidelines said it will “investigate the facts of JBIC’s compliance or non-compliance” with its own rules. 

JBIC’s guidelines provide the guiding principles and procedures for confirming that borrowers or project proponents have addressed environmental and social considerations. 

The investigation will last three months and also “encourage dialogues between the parties.”

The investigation, demanded by coalition Protect VIP and local stakeholders, focuses on JBIC’s failures to monitor Linseed’s compliance with national laws and regulations such as the Coconut Preservation Act, Water Code, Revised Forestry Code, Department of Agrarian Reform’s Comprehensive Rules on Land Use Conversion, and presidential decree establishing an environmental impact statement system. 

They also accused JBIC of improper classification of the project’s high environmental sensitivity and inaction as demanded by its own guidelines. 

“Protect VIP demands compensation for the damage caused by the project and for JBIC to retract its investments,” the coalition told Philstar.com Thursday.

Verde Island Passage, dubbed by scientists as the “center of the center” of the world’s marine biodiversity, is under threat from pollution originating from gas plants and LNG terminals in its vicinity. 

US pause in LNG export approvals

Clean energy advocates called on the Philippine government to halt plans for continued expansion of gas power following United States President Joe Biden’s move to pause LNG export approvals. The US was the world’s biggest exporter of LNG in 2023. 

The Philippines is ramping up its construction of infrastructure for LNG imports in anticipation of the depletion of the Malampaya deepwater gas-to-power project. The government is also aiming to transform the country into a leading LNG hub in Asia.

“The Philippine government would do right by Filipinos if it does the same and halts plans to expand importation and use of costly, destructive gas power,” said Bishop Gerry Alminaza, lead convenor of clean energy group Wag Gas and chairperson of the National Laudato Si Program of the Catholic Bishops’ Conference of the Philippines.

While LNG is often presented as a “bridge fuel” for cleaner energy, climate and energy advocates criticize it for emitting potent methane, hindering the transition to renewable energy sources, and locking countries into long-term fossil fuel dependence.

Center for Energy, Ecology, and Development executive director Gerry Arances said that Biden’s move should be a “clear signal to end the fossil fuel era and phase in a full renewable energy transition in the Philippines.”