Feasibility study for the resettlement of the British Indian Ocean Territory Volume I 31st January 2015 Currency Equivalents Currency Unit = Sterling Pound (£) Exchange Rates (1 October 2014) £ 1 = US$ 1.6203 £ 1 = € 1.2866 Source: Bank of England Fiscal Year 1st April – 31st March Abbreviations and Acronyms APCC Asian and Pacific Coconut Community BIOT British Indian Ocean Territory BIOTA BIOT Administration BMFC British/Mauritius Fisheries Commission BSFC British/Seychelles Fisheries Commission CB Capacity Building CCT Chagos Conservation Trust CDA Coconut Development Authority (Sri Lanka) CPI Consumer Price Index DFID Department for International Development EC European Commission ECCB East Caribbean Central Bank EDF European Development Fund EEZ Economic Exclusion Zone EIA Environmental Impact Assessment EIB European Investment Bank EPPZ Environment Protection and Preservation Zone EU European Union FAO Food and Agriculture Organisation FCMZ Fisheries Conservation and Management Zone FCNO Filtered Coconut Oil FCO Foreign and Commonwealth Office FIRR Financial Internal Rate of Return FPO Fisheries Protection Officer FPV Fisheries Protection Vessel GDP Gross Domestic Product GRT Gross Register Tonnage GST Goods and Services Tax HR Human Resources IATA International Air Transport Association ICAO International Civil Aviation Organization ICCPR International Covenant on Civil and Political Rights IOTC Indian Ocean Tuna Commission IPCC International Panel on Climate Change IUU Illegal, Unreported and Unregulated KPI Key Performance Indicator MCS Monitoring, Control and Surveillance MDG Millennium Development Goal M&E Monitoring & Evaluation MIS Management Information System MPA Marine Protected Area MRAG Marine Resources Assessment Group Limited MSC Marine Stewardship Certificate MWR Morale, Welfare and Recreation NGO Non-Governmental Organisation NM Nautical Mile NSFDG US Naval Support Facility Diego Garcia NTA/NTZ No Take Area/No Take Zone O&M Operations and Maintenance OT Overseas Territory OTD Overseas Territories Department OTEP Overseas Territories Environment Programme PIDG Private Infrastructure Development Group PIO Pitcairn Island Office PM Pacific Marlin RIB Rigid-hulled Inflatable Boat RICS Royal Institution of Chartered Surveyors RM Royal Marines ROPO Royal Overseas Police Officer SFPO Senior Fisheries Protection Officer SIDS Small Island Developing States SWOT Strengths, Weaknesses, Opportunities and Threats TCI Turks and Caicos Islands TdC Tristan da Cunha TEFU Treaty on the Functioning of the European Union TOR Terms of Reference UK United Kingdom UN United Nations UNCLOS United Nations Convention on the Law of the Sea UNEP United Nations Environment Programme USAF United States Air Force VAT Value Added Tax WHO World Health Organisation WTO World Tourism Organisation WTTC World Travel and Tourism Council Contents Executive Summary 1 1 Introduction and Background 9 2 Study Approach and Methodology 12 3 Key Activities and Resettlement Options 14 4 Legal and Political Analysis 20 5 Environmental Analysis 36 6 Infrastructure Analysis 59 7 Economic and Financial Analysis 70 8 Comparison of Resettlement Options 84 Terms of Reference 98 Bibliography 101 Executive Summary Introduction In March 2014, the British Indian Ocean Territory (BIOT) Administration commissioned KPMG to carry out a feasibility study for the resettlement of BIOT. The feasibility study was undertaken over a ten- month period between April 2014 and January 2015. It was conducted by a multi-disciplinary team, tasked with preparing a ‘neutral’ analysis of different options for the resettlement of BIOT. For each option, the feasibility study considers the following: ■ The likely cost to the UK Government of establishing and maintaining a settlement over periods of five, ten and twenty years; ■ Whether such a settlement could be self-sustaining and, if so, within what time period and under what conditions; and ■ The associated risks, environmental implications and full costs of mitigation, in the event that resettlement takes place. This report collates the work of the study, and provides a detailed description of the overall approach and methodology followed, as well as the findings. The findings depend on many assumptions, as outlined in the report. Study approach and methodology The study analyses the different resettlement options using a range of different variables including: legal, political, environmental, social and economic factors, and estimations of the total cost of the resettlement options. The views from a range of stakeholders were sought, including the Chagossian community, through a series of open consultations. The work was carried out through three main phases: ■ Consultation and data gathering, consulting with the Chagossians and gathering relevant data on the numerous factors affecting resettlement; ■ Analysis to determine the prospects for an economically self-sustaining community on BIOT, weighing the likely economic opportunities against the expected financial costs and environmental risks; and ■ Reporting, setting out an analysis of the resettlement options, with consideration of the environmental risks and costing of each option. This phase included a draft report made available on 27 November 2014 and this report made available on 31 January 2015. Key activities and resettlement options The study team undertook field research in BIOT, visiting Diego Garcia and 13 of the outer islands, including two which are considered in detail as part of the resettlement option analysis, Ile du Coin and Boddam. The purpose of the visit was to gather relevant data on selected islands within BIOT, to develop a framework for assessing the viability of each island for resettlement. We quickly narrowed down the resettlement locations to Diego Garcia, which is included in all three resettlement options, and the two outer islands, which were the only outer islands to have been inhabited on a significant scale in recent history. Environmental analysis confirmed the greater suitability of Diego Garcia than the two outer islands from a resettlement perspective. Existing infrastructure on Diego Garcia is a major practical and economic advantage provided that access can be agreed. 1 Consultations with the Chagossian community took place in Mauritius, the Seychelles, Manchester, Crawley, and London. The aim of these activities was to inform the Chagossian community of the study and consultation process, and to gather their views on this process and resettlement in general. An environmental questionnaire was developed to seek views from stakeholders on the various environmental issues linked to resettlement. These included members of the Chagos Conservation Trust (CCT) and other individuals with technical/environmental knowledge, particularly on BIOT or resettlement. The questionnaire focused broadly on: the carrying capacity of individual islands; the potential impact of resettlement on the environment; the impact of the environment on resettlement; and environmental monitoring requirements. In light of these activities, and the team’s wider background research, the team have focused their analysis on three resettlement options: ■ Option 1: Large-scale resettlement (population 1,500) with economic activities such as public sector employment, employment on the US Naval Support Facility, tourism and fisheries. This sort of development would require infrastructure on Diego Garcia and the outer islands. ■ Option 2: Medium-scale resettlement (population 500) with livelihood options that could be supported in a number of ways such as public sector employment, engagement on the US Naval Support Facility, artisanal fishing and monitoring the MPA. ■ Option 3: Pilot, small-scale resettlement, (population 150, serving as a middle ground between permanent resettlement and the status quo) with incremental growth over time, and limited infrastructure on Diego Garcia. These options are neither exhaustive (other options are possible), nor mutually exclusive, in that a resettlement process which started off at a pilot scale could move on to medium or larger scale resettlement depending on the level of success and the demand from the community to move in larger numbers. The costs might be reduced below Option 3 by adopting lower standards of infrastructure and service provision than assumed in this study, or by having an even smaller initial population. The provisional candidate island options considered in the feasibility assessment of island options are Diego Garcia and, as examples of outer islands, Ile du Coin (Peros Banhos atoll) and Boddam (Salomon atoll), a view supported by responses to the environmental questionnaire. In the event of resettlement, these 3 islands are selected as ones that would be most practical. However, subsequent resettlement on some other BIOT islands is not precluded. Legal and political analysis (Section 4) The review has found that there are no fundamental legal obstacles that would prevent a resettlement of BIOT to go ahead. The legal and constitutional framework will, however, require significant amendment in order to facilitate a resettlement and this will require a comprehensive consultation process with the Chagossians and other interested parties. The following areas would be considered a priority in advance of and during the initial stages of any resettlement: Constitutional ■ A decision as to whether any new constitution, interim or permanent, for BIOT would be based solely upon Her Majesty’s prerogative powers or on a United