Xayaburi dam project proceeds as protest grows

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Environment

• Date 29.08.2012
• Author chn/sb (AFP, Reuters)
• Editor Sarah Berning

In Laos, the construction of controversial hydroelectric dam in Xayaburi province is under way, despite disagreement from its neighbors, Cambodia and Vietnam.

The Xayaburi dam project started when the Laotian government and Thailand’s giant construction company, Ch Karnchang Pcl, signed a Memorandum of Understanding in 2007. However, scientists, activists and two other countries, Cambodia and Vietnam oppose the construction. They claimed that the hydroelectric dam would directly affect hundreds of thousands of people, disconnect the ecosystem, contribute to the extinction of endangered fish species and block the nutrient-rich sediment for Mekong Delta in Vietnam.

Empty promise

Thai villagers hold banners reading ‘Love Mekong, No Dam’ during a demonstration

After Cambodia and Vietnam voiced concerns about the project, Laos agreed in December to postpone construction and in July it claimed it would completely stop construction of the dam. However, the construction company told the media that they had not received any formal letter from the Laotian government about the suspension of the project.

“We are still working on the project,” Plew Trivisvavet, CEO of Ch Karnchang Pcl, told the media. He added that their group had entered the areas of relocation work and prepared for the construction of the reservoir which is planned to kick off late this year.

The project is located along the Mekong River, around 30 kilometers from Laos’s Xayaburi provincial town. Its costs are projected at 3.5 billion US dollars and it would provide 1,285 megawatts of power, of which Thailand wants to buy 95 percent when the project is completed in 2019.

Mekong, the 12th world longest river, is 4,350 kilometers long, flowing from the Tibetan plateau through Myanmar, Laos, Thailand, Cambodia and Vietnam. China has already built four dams along the river.

Protest

The committee from Cambodia is to check the dam construction at the end of this year. Lim Kean Hor, head of Cambodia’s Mekong River Commission told America-funded VOA on Saturday that the committee wanted to see clearly what “Laos is doing up there.”

Up to 41 endangered species of fish could be affected

At the beginning of August, a group of fifty villagers filed a complaint to a Thai court at the protesting their country’s electricity consumption from the long-disputed project, according to a report by Reuters news agency.

“The river is our life,” a 52-year-old Niwat Roykaew, who lives alongside the Mekong River, told the agency. He added that the dam project would affect his life and the people who rely on the river for water and fish in the northern Thailand’s Chiang Rai province.

In Finland, civil society groups have submitted a complaint against the Finnish consulting and engineering company Pöyry in June, NGO International River reports. The groups claimed that Pöyry was involved in “ethical misconduct” in the Mekong region. However, Pöyry, who has been hired by Laotian government to evaluate the Xayaburi dam project, denied the accusation.

If the Xayaburi project is successful, it would affect millions of people in the Mekong Lower Basin, three-fourth of the total Mekong area. It is also believed that it would pave the way for the 10 other dams planned to be constructed along the river.

Study damns Mekong dams

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Study damns Mekong dams
By Marwaan Macan-Markar

BANGKOK – Impoverished Laos is unlikely to cancel a Thai project to build a mega-dam across the Mekong River at Xayaburi, despite warnings from the International Union for Conservation of Nature (IUCN) that it could devastate the region’s rich biodiversity.

At least 1,780 known freshwater fish species have been identified in the “Indo-Burma biodiversity hotspot’, which includes the Mekong and parts of the Chao Phraya River that flows through Thailand, revealed the 158-page report released last week by the IUCN, ahead of its world congress to be held in Jeju, South Korea from September 6-15.

IUCN, which is based in Switzerland and is the world’s oldest and largest global environmental network, assists societies throughout the world to conserve the integrity and biodiversity of nature and to ensure that the use of natural resources is equitable and ecologically sustainable.

“The Mekong ranks third (after the Amazon and Congo) or second in the world in terms of diversity of river fish, depending on whether the verified species total or the higher estimate is accepted,” notes the IUCN study, “The Status and Distribution of Freshwater Biodiversity in Indo-Burma”.

The study has strengthened a growing anti-dam movement that has united campaigners from several countries in the region that are likely to be affected by the 1,260-megawatt hydropower project being built at a cost US$3.8 billion.

“This is an unprecedented scientific contribution for us to know what is in the river between [the Laotian cities of] Luang Prabang and Vientiane,” Robert Mather, head of IUCN Southeast Asia, told IPS. “It shows how little we understand the river or the impact of the planned dam.”

The report will feed discussions about dams like the Xayaburi at the IUCN gathering at Jeju, which is expected to include more than 1,200 government and non-government organisations (NGOs) from 160 countries.

“This study will help to shape the real questions that need to be asked when doing EIAs [environment impact assessments] before building the dam,” Mather said.

Thai communities rallying against the Xayaburi dam this month lodged a petition against the energy ministry and the state-run Electricity Generating Authority of Thailand (EGAT) in the country’s administrative courts, charging these bodies with failure to inform the public about the environmental and social impacts of the dam.

Even so, Norkun Sitthiphong, permanent secretary in Thailand’s energy ministry, announced on August 24 that construction work for the Xayaburi dam was on track and that electricity production was scheduled to begin by 2019.

“The Xayaburi power plant plays a crucial role in Thailand’s power development,” the Thai official said, affirming the close link Thailand has as a major investor of this dam, the first of a cascade of 11 dams being planned to harness the lower waters of Southeast Asia’s largest river.

Earlier studies by the Mekong River Commission (MRC), an inter-government agency, estimate that the proposed dams could result in agricultural losses worth more than $500 million annually and reduce dietary fish intake of Thai and Lao people by 30%.

It could also result in the creation of reservoirs along the Mekong, studies by the MRC, in which Cambodia, Laos, Thailand and Vietnam are members and Myanmar (or Burma) and China are dialogue partners.

The MRC is yet to clear construction for the dam and announced in December that it would approach international development partners to study the dam’s implications before doing so.

Activists believe that it is not too late to stop the Xayaburi dam especially because of a growing movement against it.

“This is the first time local communities have gone to the Thai courts to stop a cross-border hydropower project,” said Premrudee Daoroung, co-director of Towards Ecological Recovery and Regional Alliance, a Bangkok-based green lobby.

“They are turning to a clause in the Thai constitution that requires government agencies to conduct public hearings on projects like the Xayaburi dam, which will impact Thai communities and Thailand’s biodiversity,” she told IPS.

“Their biggest concern is that the dam will devastate fishing in the Mekong, which has been their main livelihood for generations. Their campaign began out of fear that the Xayaburi dam will affect the annual fish migration in the Mekong.”

Loss of biodiversity is another concern. “The currency for measuring fish biodiversity is species, not kilograms, dollars or catch per unit of effort,” the IUCN report said.

Grassroots communities in Cambodia and Vietnam have expressed similar concerns in their “Save the Mekong” campaign.
The Xayaburi dam could, they say, threaten the livelihoods of some 60 million people living in the lower Mekong, who harvest an estimated $2.2 billion to $3.9 billion worth of fish annually – or about a quarter of the world’s annual inland-water catch.

Besides food security, this campaign, which has been endorsed by nearly 60,000 people, has also forged other bonds.

“The outcry has been strong because of the centrality of the river to millions of people, as well as to the region’s history and cultural identity,” said Carl Middleton, a Mekong River expert who lectures at the International Development Studies Programme at Bangkok’s Chulalongkorn University.

“Just as the river is shared between the countries, so the proposed Xayaburi dam has brought many people together in opposition to the project,” he told IPS. “The size of the public response opposed to the Xayaburi dam is unprecedented for a hydropower project in the region.”

The protests have produced a mixed response from Laos, one of the poorest of the six countries that shares the Mekong, a 4,880 km-long river that flows through southern China, touching Myanmar and Thailand, and through Laos, Cambodia and Vietnam.

Laos has set its sights on becoming the battery to the region by tapping its rivers through large hydropower projects and selling the energy generated to its neighbors, such as Thailand. The foreign exchange, Vientiane argues, can help one-third of the country’s 5.8 million population living in poverty.

Laos has assured neighbors, Western donors and an intergovernmental river development body that it would not proceed with the controversial dam till the cross-border environmental and social impacts have been assessed. In July, Vientiane even announced suspension of the project.

Ch Karnchang Plc (CK), one of Thailand’s largest infrastructure builders and owner of 50% of the shares of Xayaburi Power, the controversial dam’s developer, suggests otherwise.

In mid-August, CK’s chief executive, Plew Trivisvavet, confirmed that the dam developer had not skipped a beat in its construction plans. “We’re still working on the project, as no one has told us to stop,” he told journalists.

(Inter Press Service)

Mekong dams could rob millions of their primary protein source

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Posted on 27 August 2012

Stockholm — Hydropower dams planned for the lower mainstem of the Mekong River could decimate fish populations and with them the primary source of protein for 60 million people. The impact of the dams would extend far beyond the river, as people turn to agriculture to replace lost calories, protein and micronutrients, according to a new study by WWF and the Australian National University.

There are 11 planned dam projects on the Mekong mainstem, and another 77 dams planned in the basin by 2030. The study, “Dams on the Mekong River: Lost fish protein and the implications for land and water resources”, looked at two scenarios: replacement of lost fish protein directly attributable to the proposed 11 mainstem dams, and replacement of the net loss in fish protein due to the impact of all 88 proposed dam developments.

If all 11 planned mainstem dams were built, the fish supply would be cut by 16 per cent, with an estimated financial loss of US$476 million a year, according to the study. If all 88 projects were completed, the fish supply could fall 37.8 per cent.

Study co-author Stuart Orr, freshwater manager at WWF International, says policymakers often fail to recognize the crucial role of inland fisheries in meeting food security. “The Mekong countries are striving for economic growth, and they see hydropower as a driver of that growth. But they must first fully understand and take into account the true economic and social value of a free-flowing Mekong,” says Orr.

The lower Mekong, flowing through Cambodia, Laos, Thailand and Viet Nam, is renowned for its biological diversity, with more than 850 freshwater fish species. These fish are fundamental to diets and economies in the region, with 80 per cent of the 60 million inhabitants relying directly on the river for their food and livelihoods.

The report also looks at the effects on land and water as people are forced to shift to cows, pigs, poultry and other sources to meet their protein requirements. On top of 1,350km2 of land lost to dam reservoirs, the countries would need a minimum of 4,863km2 of new pasture land to replace fish protein with livestock. The high end of the estimate if all dams were built is 24,188km2 – a 63 per cent increase in land dedicated to livestock.

Water requirements would jump on average between 6 and 17 per cent. But these averages mask the considerably higher figures for Cambodia and Laos. Under scenario one, with 11 dams on the mainstem, Cambodia would need to dedicate an additional 29-64 per cent more water to agriculture and livestock; Laos’ water footprint would increase by 12-24 per cent. Under the second scenario, with all 88 dams, these numbers shift dramatically, with an increase of 42-150 per cent for Cambodia and 18-56 per cent for Laos.

“Policymakers in the region need to ask themselves where they are going to find this additional land and water,” says Orr. “The Mekong demonstrates the links between water, food and energy. If governments put the emphasis on energy, there are very real consequences for food and water – and therefore people.”

The report, published in the journal Global Environmental Change and presented during World Water Week in Stockholm, comes at a critical time in the debate over hydropower development in the region. Construction work appears to be moving ahead on the controversial Xayaburi dam in Laos, despite a decision by the intergovernmental Mekong River Commission to halt the project pending further studies. It would be the first of the planned dams to span the lower Mekong mainstem.

“We hope this study can help fill some of the knowledge gaps about the effects of the proposed dams,” says co-author Dr Jamie Pittock from the Crawford School of Public Policy in the Australia National University.

WWF urges the lower Mekong countries to defer a decision on the mainstem Mekong dams for 10 years to ensure critical data can be gathered and a decision can be reached using sound science and analysis. WWF further advises lower Mekong countries considering hydropower projects to prioritize dams on some Mekong tributaries that are easier to assess and are considered to have a much lower impact and risk.

An abstract of the study, with the option to download the full text, is available here:
http://dx.doi.org/10.1016/j.gloenvcha.2012.06.002

Mekong panel didn’t approve power deal

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Mekong panel didn’t approve power deal

August 27, 2012 1:00 am

Ref: “Xayaburi hydro project on schedule, Energy Ministry says”, Business, August 25.

I am writing to correct misleading statements in the article on the references to the Mekong River Commission.

The article says the power purchase agreement for the hydropower project has been signed by Egat and the developer and approved by the Mekong River Commission (MRC). I would like to clarify that the MRC does not and cannot approve any power purchase agreements for hydropower development projects proposed by its member countries. Consideration and approval of such agreements, project financing and other business aspects do not fall under the MRC’s role and responsibilities.

The MRC is not a regulatory or supranational body. As a regional, inter-governmental body, the role of the MRC in the prior consultation process for the proposed Xayaburi hydropower project is to facilitate regional dialogue and provide technical input and advice for the discussion on risks and benefits of such projects. We provide a platform for member countries to raise their concerns on, for example, impacts of the project on the livelihoods of the people and the environment and sustainability of the project. Through MRC the member countries can raise these concerns and work together to address issues of common interest.

The article also says the Laotian government suspended project construction on the Mekong but allowed inland work based on the MRC’s advice. I would like to clarify that the Lao delegation has informed other MRC member countries that the construction at the project site is the preparatory and exploratory work, not the construction of the dam itself. Laos has not stated that there was ongoing construction of the dam on the Mekong.

Hans Guttman

CEO, Mekong River Commission Secretariat

Vientiane

Pöyry Responds on its Role in the Xayaburi Dam

Pöyry Responds on its Role in the Xayaburi Dam

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Sun, 08/26/2012 – 11:30pm

By: Kirk Herbertson

Pöyry engineers present to a foreign government delegation (July 2012)

The Xayaburi controversy has spread to Finland. Earlier this month, Finnish engineering company Pöyry Group issued a public statement denying any wrong-doing in its role in the Xayaburi Hydropower Project in Laos. The statement follows a June 2012 complaint to the Finnish government filed by 15 civil society groups, including International Rivers, alleging that Pöyry has engaged in ethical misconduct in the Mekong region.

The complaint centers on Pöyry’s role in the ongoing diplomatic conflict between Laos, Thailand, Cambodia, and Vietnam over whether the Xayaburi Dam should be built on the Mekong River. The complainants argue that Pöyry’s actions during this conflict have violated the OECD Guidelines for Multinational Enterprises, a global standard for corporate responsibility that all Finnish companies are expected to follow.

In August 2011, Pöyry provided a report to the Lao government evaluating the Xayaburi project’s compliance with the dam building standards set by the Mekong River Commission (MRC). The report concluded that the project was in compliance and that construction should move forward. When the construction phase began, Pöyry took on further work as an engineer for the project.

Pöyry’s August 7th statement denied the allegations. In particular, Pöyry said that “the Complainants are fully entitled to a different opinion,” but that most of their concerns amount to a mere “scientific disagreement” of the sort that is common among scientists.

The recent events in Finland highlight a key question now facing the MRC governments: Should they rely on Pöyry’s work as a basis for deciding if the Xayaburi project goes forward?

Pöyry took on this role despite a conflict of interest.

Pöyry had strong financial incentives to conclude that the Xayaburi project complies with the MRC’s standards. When it was first hired, Pöyry had a close business relationship with Xayaburi dam builder Ch. Karnchang. The companies were jointly building another dam in Laos, the Nam Ngum 2 project. After submitting the August 2011 report, Pöyry then took on additional work as an engineer for the Xayaburi project. This raises questions about the company’s motivations for providing a positive review in the first place.

Pöyry concluded that the project was in compliance, despite identifying evidence to the contrary.

Land near the Mekong River that would be flooded by the dam

Pöyry’s conflict of interest is apparent in its unusual findings. Pöyry concluded that the project is “principally in compliance” with MRC standards. Yet Pöyry identified over 40 additional scientific and technical studies that are still needed. It omitted mention of some key MRC standards where the project was clearly out of compliance, such as the need to ensure that fish passage technologies have a 95% success rate and the need to follow World Bank dam safety standards.

Perhaps most controversial of all, Pöyry guaranteed that the dam’s impacts could be mitigated, although the dam’s impacts have not been fully identified. In other words, the Pöyry report was based more on guesswork than science. The company told Laos that all concerns could be resolved while construction is underway, despite strong arguments by the region’s leading scientists and the MRC secretariat that many of the impacts cannot be mitigated at all. The MRC secretariat also raised concerns that construction itself would bring harmful impacts. However, under the mitigation plan that Pöyry recommended, little time was set aside for the governments to discuss these concerns in any detail before construction proceeded.

Pöyry gave legal advice that provoked a diplomatic conflict.

Pöyry also acted as a lawyer for the Lao government. Even before finishing its August 2011 report, Pöyry gave Laos an interpretation of the four governments’ legal obligations under the 1995 Mekong Agreement. Pöyry concluded “that the Prior Consultation Process had been ended” and that “the decision whether or not to proceed with the project rests solely with the Government of Lao.”

In contrast, the Mekong River Commission’s official view at the time was that “there is still a difference in views from each country on whether the prior consultation process should come to an end,” and “that a decision on the prior consultation process for the proposed Xayaburi hydropower project be tabled for consideration at the ministerial level, as they could not come to a common conclusion on how to proceed with the project.”

Nevertheless, Pöyry’s legal advice led the Lao and Thai governments to move forward with the project. In June 2011, Laos specifically cited Pöyry in a letter informing Thai company Ch. Karnchang that the prior consultation was complete. In October 2011, the Lao government again cited Pöyry in a letter informing the Thai government that the prior consultation was complete. A few days later, the Thai government signed an agreement to purchase the dam’s electricity and agreed to provide financing for the project. Since that time, numerous construction-related activities on the Xayaburi Dam have proceeded, and further discussions under the Mekong River Commission have faltered.

Huay Hip village in Laos faces serious threats to food security as a result of the dam.

In July 2012, after the international media reported that construction on the project was underway, the MRC’s donors insisted on visiting the dam site. On July 16-17, the Lao government hosted a delegation of foreign diplomats to the site. Pöyry led most of the visit. Pöyry also presented the construction timetable, revealing that the project’s coffer dam would be constructed by May of next year. Around this time, the Lao government published several articles in the Vientiane Times citing Pöyry’s work as proof that Cambodia’s and Vietnam’s concerns with the project had already been addressed.

Cambodia and Vietnam already rejected the Pöyry report.

The Cambodia and Vietnam governments first raised concerns with the Pöyry report almost nine months ago. In November 2011, the Cambodian government declared that “Cambodia would not agree with this report—we strongly disagree with it.” That same month, the Vietnam’s national union of scientists organized a seminar in Ho Chi Minh City with the specific purpose of examining the Pöyry report. They concluded that the report was not an adequate basis for decision-making. Afterwards, the Vietnam government continued to urge for a delay in construction so that further studies could be completed.

CNR distanced itself from Pöyry.

Although many scientists have criticized Pöyry’s findings, no one has stepped up to support them. In January 2012, the Lao government hired French company Compagnie Nationale du Rhône (CNR) to review Pöyry’s work after hearing Cambodia’s and Vietnam’s criticisms. In its recent public statement, Pöyry claimed that CNR had “confirmed and verified” Pöyry’s work. This is in sharp contrast to CNR’s own public statement a few days earlier that distanced itself from the Xayaburi project. On the issue of sediments, CNR emphasized that its proposed solutions were “conceptual” and “need to be developed and their costs evaluated.” CNR also emphasized that its work did not examine the fisheries issue, one of the most controversial parts of Pöyry’s work.

Not the most ethical of companies.

The Xayaburi controversy is not a unique situation for the Pöyry Group. They have recently encountered other ethical problems as well. In July, the World Bank placed Pöyry’s management consulting arm on its blacklist of non-responsible vendors, based on allegations of “submitting false invoices and providing improper benefits to World Bank Group staff.” There is no direct connection between this incident and Pöyry’s role in the Xayaburi project. Nevertheless, the recurring ethical violations indicate that Pöyry’s internal corporate responsibility systems—if they have any—do not work. This pattern of questionable behavior will come under more scrutiny when the Finnish government reviews the civil society groups’ complaint against Pöyry in September.

Looking back, we can see that Pöyry played a significant role in creating the mess that the Mekong governments now face. Construction on the Xayaburi Dam is advancing rapidly, despite continued opposition from Cambodia and Vietnam. The future of the 1995 Mekong Agreement is now in jeopardy, as confusion has set in over the status of the prior consultation. There is still time to clean up the mess, but the four Mekong governments have to act quickly.

The time has come for the Lao and Thai governments to find a better advisor.

More information:

• Visit the Xayaburi Dam Media Kit
• Read our review of Pöyry’s August 2011 report
• Read the June 2012 complaint to the Finnish government