Decision deferred on Xayaburi Dam, environmentalists say the project should be canceled

People bathing in the Mekong River in Nong Khai Province in Thailand. Downstream riparian nations Vietnam, Thailand, Cambodia and Laos have failed to reach an agreement on construction of the controversial Xayaburi dam unilaterally pursued by Laos.

The Mekong River has gained a “much needed reprieve,” for the time being.

In the wake of a barrage of criticism from all over the world and misgivings among downstream countries, riparian governments have decided to delay a decision on building the highly controversial Xayaburi Dam in northern Laos.

In fact, the country’s aggressive push for a US$3.5 billion dam on the lower Mekong River has caught Laos on the wrong foot with its immediate neighbors failing to reach a consensus on construction of the project, analysts say.

Those opposed to the project fear the 1,260-megawatt dam would unleash massive ecological changes on a river that feeds millions of people whose livelihoods depend on it. The dam would also set the stage for a building binge of 10 more dams proposed for the Mekong River’s lower mainstream, which, if approved, will provide eight percent of Southeast Asia’s power by 2025.

Vietnam, Laos, Cambodia, and Thailand agreed at a meeting Tuesday (April 19) that the decision on Xayaburi Dam be deferred and elevated for consideration at the ministerial level. A meeting on this issue is expected sometime later this year, tentatively in October or November, said Te Navuth, chairman of the Mekong River Commission Joint Committee.

The four countries said in a statement that “there is still a difference in views from each country” with Vietnam, Thailand, and Cambodia calling for more comprehensive and specific studies on the dam’s impact. The Vietnamese delegation also expressed its “deep and serious concerns” about insufficient impact assessments, recommending a 10-year pause for Xayaburi and all other proposed mainstream dams.

“I think this is a very hopeful sign. I am particularly happy that Thailand also agreed that ‘the sustainability of the project is still questionable,’” said Richard Cronin, director of the Southeast Asia Program at the Washington-based Stimson Center. Thailand has a large financial stake in the project with ninety-five percent of the electricity produced by the dam to be purchased by the Electrical Generating Authority of Thailand and four Thai banks financing the project.

“Vietnam and Cambodia have made clear that much more study and research is needed and that as regards fish passes and siltation issues, the developer needs to ‘go back to the drawing board,’” Cronin said.

Under a 1995 agreement, the four state members of the Mekong River Commission (MRC) - an intergovernment agency set up to coordinate dam projects - stated their commitment to work and reach agreement together on the mainstream dams. But no country has veto rights, enabling Laos to go ahead with its massive dam project with or without approval of the other three nations.

The impoverished, landlocked country has been trying to allay fears of the environmental catastrophe the Xayaburi dam may unleash. In February, Laos announced that the Xayaburi project would be the “first environmentally friendly hydroelectric project on the Mekong… [and will] not have any significant impact on the Mekong mainstream.”

But international activists and environmental groups as well as officials from the three other countries have repeatedly warned that the dam would cause irreversible environmental damage, wreaking havoc on vital fisheries and riverside agriculture, not to mention relocating at least 2,000 people.

The United States has not been a disinterested spectator in this project. Last week, Jim Webb, a Virginia Democrat who chairs the Senate Committee on Foreign Relations Subcommittee on East Asian and Pacific Affairs, said the dam would “have devastating environmental, economic, and social consequences for the entire Mekong sub-region.” He also called for construction of the dam to be deferred.

“[The decision at Tuesday’s meeting] is a real setback and an embarrassment for the Lao government, as all of its neighbors clearly did not accept its assurances of negligible impact,” Cronin said.

He felt Laos made a mistake in pursuing this project on its own without the prior agreement of its neighbors.

Adamant

At the meeting on Tuesday, Laos insisted yet again that there was no need to extend the review process of Xayaburi, saying this option would not be practical and that trans-boundary environmental impacts on other riparian countries are unlikely. The Lao delegation also added it would not be possible to satisfy all parties’ concerns.

“We appreciate all comments [and] will consider [accommodating] all concerns,” Viraphonh Viravong, head of the Lao delegation, said in the statement.

Laos’s determination to push ahead with the project even after many studies raised concerns about its environmental impacts infuriated environmentalists.

“To me, this shows that the Lao government [is] ignoring the findings of [...] numerous […] scientific studies that warn of serious trans-boundary impacts caused by the dam,” said David Blake of the University of East Anglia in the UK, who has extensive experience in fisheries and community development in Thailand and Laos.

Many NGOs and activists had pointed out that the Xayaburi project’s Environmental Impact Assessment (EIA) report was flawed and sub-standard. They said the report, commissioned by the project developer Ch. Karnchang Pcl (Thailand’s second largest building contractor), was “contradictory”, “incomplete”, and “irresponsible.”

“[The Laos government is] much happier with worthless EIAs from consultancy companies known for their poor standard of work and integrity that conclude that there will be limited impacts on the environment and livelihoods in the near vicinity of the dam site and reservoir only, all of which can be mitigated,” Blake said. “The differences in conclusions are startling.”

Despite widespread protest, the Lao government and the Thai developer appeared determined to go ahead with the project.

The state-run Vientiane Times reported Tuesday that a road to the Xayaburi site was already being built while the Bangkok Post said two days earlier that some people were already being resettled from the project area, and had been offered as little as US$15 in compensation.

Te Navuth, chairman of MRC Joint Committee, said he had not been informed of the case. “We will seek clarifications from Laos about this information,” Te Navuth told Thanh Nien Weekly on the phone.

Who benefits?

Environmental groups welcomed Tuesday’s decision and urged Laos to immediately halt preliminary construction activities underway at the Xayaburi site.

“Given the project’s inevitable trans-boundary impacts we urge the region’s governments to acknowledge concerns of the public and civil society groups, and indefinitely defer the Xayaburi Dam project,” US-based environmental group International Rivers said in a statement.

Reuters cited a study released last October by the MRC that said the 11 proposed dams, including the Xayaburi, would turn 55 percent of the Mekong River into reservoirs, resulting in estimated agriculture losses of more than $500 million a year and cutting the average protein intake of Thai and Lao people by 30 percent. Meanwhile, international experts have blamed China for exacerbating the regional drought with four dams it has already built on the upper reaches of the 4,900-km (3,000-mile) long Mekong River.

Laos is still hoping to move forward with the projects although there are calls now for Thailand to cancel the power-buying contract from the Xayaburi dam.              

Daovong Phonekeo, deputy director general of Laos’s Department of Electricity, told Bloomberg on Tuesday that the Lao government will consider the concerns of the riparian countries and try to convince them of the advantages. “The project is necessary because our country is less developed. We don’t have other means to increase revenue,” Phonekeo was quoted by the newswire as saying on the eve of the MRC meeting.

Since electricity export is important for Laos, the government has promoted the Xayaburi project as a major source of income and investment that will spur its $6-billion economy.

But analysts questioned the motivation behind the urgency saying it lacked legitimacy.

“Laos has plenty of dam projects on tributaries in the highlands to produce electricity to sell to Thailand and other neighboring countries and has no need to rush to build this dam,” said Cronin of the Stimson Center.

“The Asian Development Bank and the World Bank could not support such a project because it would grossly violate even their often criticized guidelines for environmental and socioeconomic impact, but the banks and the Lao government often justify destructive dam projects on grounds that hard currency earnings from exporting electricity will help the government eliminate poverty.”

He said critics are yet to see any credible plans to use earnings to reducing poverty, or any accounts of how funds from existing projects have been used. “Meanwhile thousands of people are made even poorer than they already are for the benefit of politically important urban constituencies and developers’ profits,” Cronin said.

He did not rule out the possibility that all of the proposed dams are just “a series of opportunistic commercial projects that companies are ‘selling’ to naïve officials who do not understand either the science or the economics.”

Blake was also scathing in his criticism of Laos’s stated motives for the dam. He cited a saying in California: “Water flows uphill to money and power.

“I don’t think it is any different in the Mekong Basin, judging by decision-making over dams,” he said.

Cronin emphasized that all countries have a right to develop and no development is possible without tradeoffs. But it is critical that these tradeoffs minimize costs and maximize benefits and the question of “development for whom” must be kept uppermost in mind.

“In the long term, getting that wrong can be harmful even to stakeholders who may in the short term appear to be the “winners.”‘