US enters dam debate late

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Activists in the ongoing fight against Mekong dams worry that recent US opposition has come too little, too late.

Cambodian fishermen cast their net into the Mekong River outside Phnom Penh in April. US senators have called for greater environmental safeguards for the Mekong River, but analysts remain doubtful that US influence is capable of shelving Laos' plans to dam the river.

Rising US interest in protecting the Mekong River from deleterious dams has been welcomed by environmentalists and non-governmental organizations.

Some observers, however, worry that the recent US overtures will not suffice to shelve 11 proposed hydropower projects on the river which feeds approximately 60 million people.

Last Thursday, Senator Jim Webb, a Virginia Democrat who heads a Senate subcommittee on East Asia, introduced a resolution calling for the suspension of mainstream dam construction along the Mekong River, which flows through China, Myanmar, Laos, Thailand, Cambodia, and Vietnam.

The legislation urged the US to "assist in identifying sustainable economic, water, and energy alternatives to mainstream hydropower dams on the Mekong River."

In a statement, Webb also applauded an April delay of the massive, US$3.5-billion Xayaburi dam in Laos as "a positive step forward."

Conservation groups fear that, if built, the 1,260-megawatt dam will wreak havoc on vital fisheries and small-scale riverside agriculture. Because it is the first dam ever to be built on the lower Mekong, many feel that the project is critical to the river's future.

"If Xayaburi dam goes ahead, then it removes an important impediment to other projects proceeding and a race to the bottom may well ensue where many, if not most, of the other proposed projects now move forward towards implementation," said David Blake, a Laos expert at the University of East Anglia in the UK.

Vietnam, Cambodia, and Thailand have voiced strong opposition to the project and urged Laos to put it on the backburner.

In April, Laos apparently agreed to suspend the project, pending approval from the four countries at a meeting that's been slated for October or November.

Since then, international observers have remained wary of Laos' intentions, sowing worries that the US involvement will not prevent the project from going ahead.

"The US is increasingly engaged, but it has not been a major player in the region for some time," said Philip Hirsch, director of the Australian Mekong Resource Center at the University of Sydney. "There is no reason to expect that its increased interest [will] precipitate a watershed decision."

"˜Considerable uncertainty'

Vietnam, Cambodia, Laos, and Thailand are bound by the 1995 Mekong Agreement to hold inter-government consultations before building dams on the river.

At a recent meeting of the Mekong River Commission (MRC) - an inter-government agency established to coordinate dam projects the group's donors voiced concern over the pace at which the Xayaburi project seemed to be proceeding.

"Adequate time should be provided before the conclusion of the [consultation] process for the consideration of all forthcoming analyses, including consultations with public and civil societies," the donors said in a statement posted on the MRC website.

A spokesperson for the Australian Agency for International Development (AusAID), a major donor to the MRC, also acknowledged "considerable uncertainty" about how the MRC was to proceed with the consultation process.

The Lao government and the MRC have appeared to be at odds in this regard.

Daovong Phonekeo, deputy director general of Laos's Department of Electricity, said the consultation process is already complete, since the other riparian countries had not asked to extend it.

"So the process is deemed as final," Daovong said.

But Surasak Glahan, a MRC spokesman, said that the consultation process for the Xayaburi project has neither been closed nor extended.

"Due to the lack of mutual conclusion among the four MRC member countries [in April]"¦ the consultation is considered on-going," Glahan said. "The consultation process is neither a right to veto the use nor unilateral right to use water without taking into account other riparian nation's rights."

Moving forward

Last week's resolution in the US Senate also called on politicians to use their "voice and vote" at multilateral development banks to ensure strict environmental safeguards for Mekong River projects.

Because the Xayaburi project is being funded by four major Thai banks, some observers remain skeptical that increased US pressure will have much influence over their decisions.

"I doubt the US can have significant influence over the Thai banks lending strategies," said Blake of the University of East Anglia. "But on the other hand, those same banks will need to consider the political risk to their loan portfolios resulting from imprudent lending for projects that do not meet the international lending criteria for sustainable development."

Laos's Daovong reiterated that no work will go ahead on the project "unless the Lao government is satisfied with the mitigation measures proposed by the international experts and a good understanding is reached with other riparian states."

But with Laos maintaining that the consultation process of the project is complete, "the [project] developer could herewith proceed with important preparation works to secure the commitments for the project implementation on schedule," Daovong said.


In May, Viraphonh Viravong, director general of the Laos's Department of Electricity, told Thanh Nien Weekly via email that the Lao government was procuring a "reputable international independent consultant to review all concerns [expressed] by Vietnam, Cambodia and Thailand and recommend suitable mitigation measures, if any."

Viraphonh's deputy, Daovong Phonekeo, also said in May that the Xayaburi developer, Ch. Karnchang Pcl (a major Thai construction company), would fund the review.

The "reputable consultant" is the Finland-headquartered Pöyry Group.

In late June, Daovong confirmed in another email that Pöyry was carrying out an assessment of an earlier review done on the project by the Mekong River Commission - an inter-government agency established to coordinate dam projects.

"They would need some time to finalize their report," he wrote.

On its company website, Pöyry said that it has been involved in the development of the Nam Ngum 2 dam project in Laos since 1994, starting with the project's feasibility study.

In 2004, Pöyry was hired as an independent engineer during the project's implementation, it said.

The main developer of the Nam Ngum 2 dam project is also Ch. Karnchang Pcl.

The Nam Ngum 2 dam project, with an installed capacity of 615 MW, is being built to produce energy for the Thai electricity grid; all output will be sold to the Electricity Generating Authority of Thailand (EGAT), Pöyry said. 

Ninety-five percent of the electricity to be produced by the Xayaburi dam is also slated to be purchased by EGAT.

"The selection of Pöyry to conduct this"¦study"¦ is a complete conflict of interest," said David Blake, a Laos expert at the University of East Anglia in the UK.

Blake declined to speculate how much influence the Thai developer (Ch. Karnchang Pcl) has over Pöyry in both the Nam Ngum 2 and Xayaburi projects.

"But I think it is fair to say that there would appear to be a tangled web of commercial relationships ["¦] which would not measure up to standards of openness, independence and integrity."

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