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dam-l LS: Japanese PM urged to toughen standards for development super-agency



INTERNATIONAL RIVERS NETWORK
1847 Berkeley Way
Berkeley CA 94703, USA
Tel: (510) 848 1155, Fax: (510) 848 1008, Email: aviva@irn.org, Web:
www.irn.org

PRESS RELEASE
Friday March 5, 1999
Aviva Imhof
South-East Asia Campaigns
(510) 848-1155 or (510) 666 0622 (home)
 
Japanese PM urged to toughen standards for 
development super-agency

NGOs also demand withdrawal from Filipino dam

An international appeal was delivered to the Japanese Prime Minister, Mr.
Keizo Obuchi, today urging him to ensure that clear social and
environmental standards are established for the new institution to be
created by merging the Export-Import Bank of Japan (JEXIM) and the Japanese
Overseas Economic Cooperation Fund (OECF). The open letter also calls on
the Prime Minister to withdraw all financial assistance for the
controversial $1 billion San Roque Hydropower and Irrigation Project in the
Philippines. The appeal was signed by 77 citizens' groups, 12 National Diet
members and more than 500 individuals from 26 countries. 

The new agency, which will be called the Japan Bank for International
Cooperation, will have an annual budget exceeding $27 billion, making it
the world's single largest source of public financing for infrastructure
and other investments overseas. By comparison, the World Bank commits about
$20 billion in new loans each year. The Charter of the new agency will be
presented to the Diet in the coming weeks.

The groups' open letter states that "JEXIM and OECF support projects and
investments that cause significant social and environmental destruction in
recipient countries" indicating an "urgent need for more rigorous social
and environmental impact assessment and information disclosure procedures
for the new institution." 

Ms. Ikuko Matsumoto, Aid Reform Coordinator for Friends of the Earth Japan
says: "This appeal shows how concerned people are internationally about the
poor quality of Japanese official development assistance. The new
institution's draft charter doesn't include any reference to human rights
and the environment, something that we would consider fundamental for an
institution dedicated to improving the lives of people in countries less
industrialized than ours. We hope that the government and the Diet will
listen to the call from our colleagues around the world."

Ms. Tomiko Okazaki, Member of the Diet, says: "We must meet the crucial
task of ensuring that the Japan Bank for International Cooperation has
effective standards for access to information and procedures for social and
environmental assessment and public participation. I feel grateful to be
able to sign the letter with my colleagues around the world."

The open letter also calls on Japan to withdraw all financial assistance
for the controversial $1 billion San Roque Dam, which the letter says
"demonstrates the problems inherent in the current approach taken by
JEXIM." JEXIM has already approved a $302 million loan for the project and
is considering an additional $400 million loan, despite the fact that the
project is opposed by thousands of indigenous Ibaloi people who will face
serious impacts to their livelihoods should it be built. See attached
briefing paper for further details.

Santahnay, the peoples' organization in the area to be flooded by the dam,
has stated that the dam "would mean the end of our continued survival as
indigenous communities… We will not be a party to our own death… We stand
for the defense of our indigenous culture and for the recognition of our
right to self-determination." 

Ms. Aviva Imhof, South-East Asia Campaigns Director for International
Rivers Network, says "JEXIM must not fund the San Roque Dam. JEXIM's
current environmental guidelines state that people resettled by projects it
funds must have given their consent. In the case of San Roque, more than
450 individuals who may be affected by the project have signed this appeal
letter and have not given their consent. JEXIM is refusing to release any
documentation on the project, citing principles of confidentiality. This is
clearly unacceptable, and demonstrates that JEXIM has little accountability
to either Japanese taxpayers, or the people whose lives will be affected by
JEXIM loans."

The appeal to Mr. Obuchi comes in the wake of an international campaign for
the adoption of common environmental and social standards for Export Credit
Agencies. This issue is already being discussed by the 29 OECD countries. 

Ms. Andrea Durbin, Director of the International Program at Friends of the
Earth US, says: "the US Export-Import Bank and the Overseas Private
Investment Corporation have already adopted tougher standards that provide
public information and more rigorous social and environmental
assessment procedures when reviewing projects. Japan should join the US and
demonstrate
leadership in the OECD by adopting common environmental and disclosure
standards so that publicly financed projects do not create serious
environmental or social problems around the world.  We hope that the
Japanese government will rise to the occasion."

For more information, contact:
· Ms. Ikuko Matsumoto, Friends of the Earth Japan, Tel: 81 3 3951 1081,
aid@foejapan.org
· Ms. Aviva Imhof, International Rivers Network, Tel: 1 510 848 1155,
aviva@irn.org.
· Ms. Andrea Durbin, Friends of the Earth US, Tel: 1 202 783 7400 ext 209,
adurbin@foe.org

A press conference in Japanese is being held today, Friday March 5, 1999,
in the Environment Agency Press Center, from 12.20pm-1.00pm. Contact
Friends of the Earth Japan for further details.

-20-

_________________________________________________

INTERNATIONAL RIVERS NETWORK

BACKGROUND PAPER
5 March, 1999

SAN ROQUE HYDROPOWER AND IRRIGATION PROJECT

Project Description: The San Roque Dam is to be located on the lower Agno
River of Pangasinan Province, in the Cordillera region of Luzon island in
the Philippines. If built, San Roque would be the tallest dam - at 200
meters - and largest private hydropower project in Asia, generating 345 MW
of power. Electricity generated by the dam will be primarily used to power
industrial activity and the burgeoning mining industry in northern Luzon.
Preparation of the site began in 1998, and construction is slated for
completion in 2004. San Roque is the third dam to be constructed on the
Agno river: the first two, Binga and Ambuklao, were built in the 1950s.

Corporate Actors: The San Roque Power Corporation (SRPC) is owned by a
Japanese trading company, Marubeni (41%); a subsidiary of US energy company
Sithe Energies Inc. (51%), which is 29% owned by Marubeni; and a Japanese
utility company, Kansai Electric (7.5%). In 1997, the Philippines National
Power Corporation (NPC) gave the SRPC the rights to build, operate and
maintain the project for a period of 25 years. In return, the NPC has
agreed to buy power for a price of P2.98 per kilowatt-hour. In April 1998,
US-based Raytheon company won a $700 million sub-contract to design and
build the facility. 

Financing: The project cost is estimated at US $1.5 billion. In October
1998, JEXIM approved a $302 million loan to the private sector developers,
and is considering an additional $400 million loan to finance the
Philippines' National Power Corporation contribution to the project. Other
financing is expected to come from a consortium of Japanese commercial
banks and equity provided by the project sponsors.

Claimed benefits: Project benefits are said to include irrigation of 87,000
hectares, water quality improvements due to reduced downstream siltation,
and 50 percent reduction of floods which destroy crops during the rainy
season. However, the two upstream dams, Binga and Ambuklao, have been
plagued by excessive sedimentation due to logging and gold mining
operations in the Agno watershed, resulting in more severe floods at the
upper end of the reservoirs. There is no reason to believe that the
situation will be any different at San Roque. 

Displacement , Resettlement and Opposition: Over 160 families at the dam
site in Pangasinan were forcibly displaced early last year and for almost a
year were living in desperate conditions at a temporary site. They were
promised land, houses, alternative livelihood sources and social services,
but instead the NPC distributed P10,000 per family as supposed
compensation. Only in late January 1999 were 147 houses in the new
resettlement site handed over to the displaced families. Another 402
families in Pangasinan will be required to relocate before the project is
completed.

The project is fiercely opposed by thousands of indigenous Ibaloi peoples
upstream of the dam site. NGOs in the region estimate that if the dam is
built, more than 2,000 Ibaloi families in Itogon, Benguet will be adversely
affected by the project. Many of these people were forced to move once
before to make way for the Binga and Ambuklao dams upstream. The
livelihoods of tens of thousands of downstream residents will be affected
due to erosion and destruction of fisheries. 

JEXIM's environmental guidelines state that people resettled by projects it
funds must have given their consent.  Given the strident opposition of the
populations slated for resettlement, it appears that JEXIM's support for
this project violates its own guidelines.  Affected peoples have written to
JEXIM in protest, to no avail.

For more information, please contact:
· Ms. Joan Carling, Secretary-General, Cordillera Peoples' Alliance. Tel: +
63 74 445 3616, cpa@is.phil.gn.apc.org. 
· Ms. Aviva Imhof, South-East Asia Campaigns Director, International Rivers
Network, aviva@irn.org






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Aviva Imhof
South-East Asia Campaigns
International Rivers Network
1847 Berkeley Way, Berkeley CA 94703 USA
Tel: + 1 510 848 1155 (ext. 312), Fax: + 1 510 848 1008
Email: aviva@irn.org, Web: http://www.irn.org
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