EYEWITNESS NEWS

THE WALL STREET JOURNAL PICKS UP

THE SEYCHELLES WATER POLUTION SAGA...

Sheikh Abode a Sore Point in Seychelles

U.A.E. Leader's Mountaintop Mansion Contaminates Island Paradise, and Fuels the President's Political Opponents
By MARGARET COKER - Middle East Correspondent WALL STREET JOURNAL
9th September 2010
LA MISERE, Seychelles—The president of the oil-rich United Arab Emirates has sent millions of military and financial aid to this tiny East African archipelago, a longtime get-away for the rich and famous.
But it's the construction of his private residence here—a seven-story, mountain-top palace with a 360-degree view of the surrounding Indian Ocean—that's getting all the attention these days. More than 8,000 residents, claiming their water source was tainted by sewage and diesel runoff from the construction site, are demanding more than $10 million in compensation from Sheikh Khalifa bin Zayed al-Nayan and a Dubai-based construction company he hired to build the palace.

Sheikh Khalifa's Seychelles palace has ignited a scandal in the jungle-covered nation, which receives large amounts of aid from the U.A.E.

Local environmental and health officials call the contamination the nation's worst environmental disaster ever. Public anger has spread ever since, with activists and landowners claiming negligence by local officials. They accuse the government of letting the sheikh circumvent land-ownership laws and failing to enforce environmental and safety regulations during the construction, which has involved an estimated 2,000 foreign workers.
"Our paradise is lost, and our lives have been turned upside down," says Eddie Westergreen, a land owner and neighbor of Sheikh Khalifa. Mr. Westergreen's modest, low-slung bungalow—surrounded by flowers he grows commercially—is dwarfed by the partly-built palace that, when finished, will be the nation's highest-standing edifice. "Both our own government and Sheikh Khalifa are responsible for destroying it," he says.
The controversy has ignited a scandal in a political landscape typically as serene as the islands' jungle-covered landscape. Angry residents have taken to the street leading to the site a handful of times, blocking construction vehicles' access.
Fueled by the outrage, opposition politicians think they may be able to unseat the ruling party that has reigned here since independence in 1976. President James Michel has painted himself as a close friend of Sheikh Khalifa, and opposition leaders accuse his government of taking short cuts with the project because of the U.A.E.'s financial largesse to the government. Some opposition politicians are promising to overturn the La Misere sale if elected.
A U.A.E. official calls the contamination "unfortunate," and says Sheikh Khalifa's private office in Abu Dhabi, capital of the U.A. E., is working to solve the problem. The official blames the Dubai-based construction company.
Mr. Michel, the president, has also deflected blamefrom Sheikh Khalifa and onto the construction company, Associated Contracting & Consulting Ltd., or Ascon. Ascon is partly owned by Abdulaziz al-Ghurair, a businessman appointed by Sheikh Khalifa to run the U.A.E.'s parliamentary body. Ascon denies any wrongdoing. Company officials say the firm has become a scapegoat in a domestic political battle. Telephone requests for comment from Mr. Ghurair weren't returned.
"Determination of the real causes and extent of such pollution and the allocation of responsibility are questions of fact which fall within the jurisdiction of the courts of law," said Ali Jahubar, an Ascon director, in a written response to questions sent by The Wall Street Journal. "These issues have been subject to political debate and not to due legal process." Mr. Jahubar said last week the company was fired from the project. President Michel, meanwhile, has ordered construction halted. On a recent visit to the site, however, work was still under way.
In addition to his federal position atop the U.A.E. government, Sheikh Khalifa is the hereditary ruler of Abu Dhabi, the capital, as well as the richest of the country's seven semi-autonomous emirates. Seychellois government records show that since 1995, Sheikh Khalifa has spent $2 million snapping up more than 66 acres of land on the Seychelles' main island of Mahe, where the palace is being built. During the same period, the Seychelles' government has received large aid packages from the U.A. E.
In the last five years, the U.A.E. has pledged more than $130 million in social-service and military aid, including several patrol boats to boost the Seychelles' antipiracy efforts. In 2008, the U.A.E. came to the debt-laden government's rescue, with a $30 million injection. U.A.E. officials say the aid is in keeping with its commitment to assist the developing world.
Sheikh Khalifa paid $500,000 for the 29.8-acre site of his palace in 2005, according to the sales document.
Bernard George, a lawyer who negotiated one of Sheikh Khalifa's first land deals in the country, is an opposition member of parliament and one of the palace's harshest critics, accuses the government of ignoring local laws that required a public tender for the 2005 transaction."The sale was stitched up from the start," says Mr. George, a lawyer who also represents the La Misere residents fighting for compensation from Sheikh Khalifa and Ascon.
A Seychelles planning authority initially rejected the palace's building plans. But last year, Mr. Michel's cabinet overturned the decision.
Construction of the palace started last September. A month later, the national utility company warned that the site's plans posed threats to the water supply, according to Joel Valmont, the deputy chief executive of the company.
Joel Morgan, the Seychelles' minister of environment and an aide to Mr. Michel, said the government didn't tender the land because it wanted it to go to Sheikh Khalifa. He says "the letter of the law" might not have been followed in the land sale.
"The government made the offer to Sheikh Khalifa...in the context of building up our diplomatic relations with the U.A.E., which is something that we value very highly," Mr. Morgan said in a recent interview. He declined to comment on the cabinet's decision to override the planning-authority veto of the plans.
Mr. Westergreen said that in October his household well was fouled with diesel runoff coming from the project. Government agencies ordered Ascon to clean it up.
Feb. 13, the sewage system set up by Ascon for workers building the palace, overflowed, sending rivers of waste through the region, home to some 8,100 residents. Mr. Morgan, the environmental minister, says ocal-government agencies and officials from Sheikh Khalifa's office responded quickly to the problem, sending in technical experts and engineers. Amid the local uproar, officials concluded that Ascon ignored health and building codes for their workers. Mr. Morgan says the government fined the company $81,000.
Ascon denies it violated any rules. "Unpredicted weather conditions," including heavy rain, Weather conditions outside the company's control, caused the sewage and diesel leakage, said Ascon's Mr. Jahubar, in his statement.
This spring, Sheikh Khalifa's presidential office offered to pay $15 million to replace the water-piping system for the mountainside. Recently, negotiations between the residents, the company and the U.A.E. have bogged down over terms of a settlement, according to members of the residents committee. Government officials and residents say Ascon has offered to pay roughly $8,000 to each of the 360 households that the government says have been affected by the pollution.
Residents, as well as Mr. Michel, have rejected that offer. Ascon declined to comment on the negotiations.

Write to Margaret Coker at margaret.coker@wsj.com