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dam-l (Fwd) LS: Letter to ADB President re Large dams/recommended p
------- Forwarded Message Follows -------
Date sent: Tue, 03 Aug 1999 19:24:50 -0700
From: Aviva Imhof <aviva@irn.org>
Subject: LS: Letter to ADB President re Large dams/recommended
practices TA
To: irn-mekong@igc.org
August 3, 1999 5 pages total
Mr. Tadao Chino
President
Asian Development Bank
Fax: 632 636 2001
Copies to: ADB Executive Directors, US Treasury
Dear Mr. Chino
Regional Technical Assistance Grant for the Study of Large Dams and
Recommended Practices (TAR: STU 32478)
We, eighteen NGOs working on large dams in Asia, write to you
concerning
the above technical assistance grant, which was approved by the Bank in
December 1998. We understand that the purpose of this study is to develop
“recommendations, acceptable to the various stakeholders, on best
practices for the evaluation, design, construction, operation, and
decommissioning of large dams." We further understand that this study is
intended to provide input into the World Commission on Dams (WCD).
We wish to inform you that because this study has not been handled in an
open and transparent manner, we are unable to cooperate with the study
team or accept their conclusions. The reasons for us taking this position
are articulated below.
1. Poor process of approval and implementation
The study was originally proposed to fit into the World Commission on Dams
process, after the ADB informed the WCD that it could not directly finance
the activities of the WCD. ADB staff were informed by WCD representatives
in December last year that they did not believe that the study was
appropriate or necessary, yet the Bank decided to proceed nevertheless.
The Terms of Reference for the study were developed without any apparent
consultation with NGOs, and the ADB has made no attempt to proactively
inform NGOs of the study or its process of implementation. One NGO was
given the opportunity to comment on the draft technical assistance paper,
but only because a representative happened to be visiting the Bank’s
headquarters in Manila at the time.
The key to NGO participation in any study of this type is early
involvement in its development and full disclosure of information along
the way. NGOs and affected peoples must have a say in how the study is
carried out, and who is chosen to implement the study. The only reason
NGOs have cooperated with the WCD thus far is because it has been
established through a relatively transparent process of negotiation with
civil society and because the WCD has made a commitment to carry out its
work in an open and participatory manner. The way that the ADB has handled
this study from the beginning demonstrates the lack of understanding of
Bank staff regarding good process and an ignorance of what it takes to
achieve acceptability from NGOs and affected people.
2. Choice of consultants
We have recently discovered that consultants SEATEC International and
Lahmeyer, in association with AIT, have been awarded the contract for this
study. The TA paper states: “It is important that the consultants are
widely perceived as being free of vested interests, and this quality will
be taken into account in the shortlisting.” Yet the process of
shortlisting was undertaken in secrecy, without any consultation with NGOs
or affected communities.
SEATEC is a well-known dam industry consultant in Thailand. The company
has done many environmental impact assessments for controversial dam
projects in Thailand, such as Pasak dam, Pakpanang dam, Chao Phraya and
Nan River Embankment Project, and a thermal power plant in Prajuab
Kirikhan, Southern Thailand.
The company also did the Environmental Assessment and Management Plan for
the controversial Nam Theun 2 dam in Laos. The EAMP was discredited by two
independent reviewers who commented on the serious inadequacy of the
EAMP’s treatment of the issues of downstream impacts, water quality and
cumulative impacts. Both reviewers agreed that the negative costs of the
project on fisheries, riverine and wetland biodiversity, and local people
(including health impacts) would be far higher than stated in the EAMP.
The World Bank admitted that there were a number of pro-dam advocacy
statements in the initial draft of the EAMP that were inappropriate and
that required modification.
Lahmeyer has gained a reputation for unabashed support of controversial
hydropower projects worldwide. Their involvement and support for projects
such as Nam Leuk and Nam Theun 2 in Laos, Bakun Dam in Malaysia, Arun III
in Nepal, and Chixoy Dam in Guatemala has been severely criticized by
international human rights and public interest groups. Most recently,
Lahmeyer was implicated, together with eleven other international
dam-building companies, in a bribe scandal in which at least one top
official involved in the World Bank-financed Lesotho Highlands Water
Project received nearly US$2 million in bribes over ten years. Lahmeyer
reportedly contributed US$8674 to secure their involvement in the project.
(see attached article)
The ADB’s Guidelines for Procurement have recently been amended to include
a provision which states that "The Bank … will declare a firm ineligible,
either indefinitely or for a stated period of time, to be awarded a
Bank-financed contract if it at any time determines that the firm has
engaged in corrupt or fraudulent practices in competing for, or in
executing, a Bank-financed contract." (section 2.14).
We believe SEATEC and Lahmeyer have vested interests in ensuring that dam
projects continue to gain support from governments and multilateral
development banks. We are therefore unable to accept these companies as
legitimate and non-biased. There is also the outstanding question of
whether, given the corruption scandal involving Lahmeyer and the spirit of
the ADB’s anti-corruption policy, the company should be awarded a
Bank-financed contract.
3. Advisory Panel
The TA paper includes provisions for appointment of an Advisory Panel, the
purpose of which is to “provide quality control for the study” and “by
being independent, to ensure and to demonstrate that there is no bias in
the study from possible vested interests.” We understand that the Panel
has already been chosen. One of the Panel members is Martin ter Woort, who
works for Acres International, another of the companies implicated in the
Lesotho corruption scandal. Mr. ter Woort has been involved in developing
the Resettlement Action Plan for Nam Theun 2 dam in Laos, and therefore
cannot be considered independent and free from vested interests.
If the Bank wanted the Panel to ensure and to demonstrate that there is no
bias in the study, then it should have allowed nominations from NGOs and
affected peoples, and undergone a participatory process for selecting the
Panel.
4. Recommendations for best practice
As a result of the inadequacies in the way the Bank has chosen to handle
this study, we wish to inform you that we will not be able to accept the
recommendations on best practices that are being developed by the
consultants. If the ADB truly wants to adopt guidelines acceptable to all
interested parties, then it should commit to adopting the guidelines to be
developed by the WCD.
We hope that the ADB will attempt to learn from the mistakes it has made,
and will consider abandoning the study, rather than wasting public money
on a process that is flawed from the outset.
Please direct your reply to this letter to Ms. Aviva Imhof at
International Rivers Network, fax: + 1 510 848 1008. Thank you for your
attention to this matter.
Yours sincerely
Dr. Chusak Wittayapak,
General Secretary
Academics for the Poor, Thailand
Lina Cabaero
Campaigns Coordinator
AID/WATCH, Australia
Wanida Tantiwittayapitak,
Advisor
Assembly of the Poor, Thailand
Peter Bosshard
Berne Declaration, Switzerland
Owen J. Lynch
Senior Attorney
Center for International Environmental Law, USA
Dr. Chayan Vaddhanaphuti,
Director, Ethnic Studies Center
Chiang Mai University, Thailand
Aly Ercelawn and Mohammad Nauman
Creed Alliance, Pakistan
Hemantha Withanage,
Senior Environmental Scientist,
Environmental Foundation Ltd, Sri Lanka
Avi Mahaningtyas
Friends of the Earth International
Ikuko Matsumoto
Aid Reform Project Coordinator
Friends of the Earth Japan
Mr.Prasitthiporn Kan-onsri,
Coordinator
Friends of the People, Thailand
Aviva Imhof
South-East Asia Campaigner
International Rivers Network, USA
Mr.Suppachai Jarernwong,
Coordinator
Legal Aid for Marginalized People, Thailand
Mae Ocampo
Information/Liaison Officer
LRC-KsK/FoE Philippines
Mr. Jedsada Chotkitpivart,
Campaign Official
Northern Development Foundation, Thailand
Somchai Sirichai,
Chairperson
Northern Farmers Network, Thailand
Chainarong Sretthachau,
Coordinator
Southeast Asia Rivers Network, Thailand
Hannarong Yoawalers,
Coordinator, Conservation Policy Division
Wildlife Fund Thailand, Under the Royal Patronage of Her Majesty the Queen
________________________________
Business Day, Johannesburg, 29 July 1999
Official faces charges over R12m bribes
International companies named in case against former boss of Lesotho
Highlands Water Project
By David Greybe
CAPE TOWN - The Lesotho government yesterday charged its former top
official at the Lesotho Highlands Water Project, Masupha Sole, with
taking R12m in bribes from a dozen international companies over 10 years.
The case has taken two years of extensive investigation to put together,
and involved close co-operation between the governments of Lesotho and
SA, with the assistance of Swiss and French authorities.
Companies allegedly involved include Impregilio of Italy, Dumez
International of France, Acres International of Canada, Swedish-Swiss ABB
and the Highlands Water Venture consortium, which includes Germany's
Hochtief and SA's Concor and Group Five.
In SA the water affairs and forestry department, through its
representatives on the Lesotho Highlands Water Commission, has been
closely involved in the investigation from the outset.
The R10bn international project to bring water to Gauteng from Lesotho is
managed by the Lesotho Highlands Development Authority and overseen by the
governments of Lesotho and SA.
Sole, seconded from the Lesotho government as CEO of the authority,
appeared in the Maseru Magistrate's Court yesterday on 14 charges of
bribery and fraud. Sole also faces a charge of perjury: the charge sheet
states that Sole denied "under oath" in November 1996 in the Lesotho High
Court in a civil case that he had bank accounts in SA or overseas.
However, according to Lesotho's director of public prosecution, Sole "well
knew" that he had bank accounts in both SA and overseas - in Geneva and
Zurich.
Sole, who is out on R200000 bail, was not asked to plead and the case was
postponed to August 31. He has also had to surrender his passport.
Sole, the charge sheet states, "did unlawfully, intentionally and
corruptly accept bribe moneys, over the period February 1988 to December
1998, from Lesotho Highlands Water Project contractors".
The 12 groups named, plus the alleged bribe amounts paid to Sole, are:
Impregilio (Italy) - $250000; Spie Batignoles (French) - Ff 738630;
Sogreah (French) - Ff 84000; LHPC Chantiers (international consortium) -
R392967; ED Zueblin (German) - DM 819862; LHPC (international consortium)
- DM 105639; Highlands Water Venture (international consortium including
SA's Concor and Group Five) - $733404; Diwi Consulting (Germany) - DM
4500; ABB (Swedish/Swiss) - Ff 250000; Lahmeyer Consulting Engineers
(German) - DM 16000; Acres International (Canadian) - C$ 279539, and;
Dumez International (French) - Ff 509905,62. In SA currency the total
allegedly paid in bribes to Sole was R12,012m.
In a joint statement yesterday, the Lesotho and SA authorities responsible
for the Highlands project welcomed the move "to press criminal charges
against Sole".
A source closely involved in the inquiry said: "While bribery on huge
projects is not unusual, it is the alleged involvement in this case of
leading European and North American companies which makes it so
troubling."
The source said the charges against Sole "related mainly to his abuse of
his position of trust to demand bribes to ensure favourable contract
decisions". For instance, Sole allegedly abused the claims procedure,
demanding bribes to take decisions in favour of contractors involved in
projects worth hundreds of millions of rands.
"Because the claims are often very technical and very complicated there is
tremendous scope for manipulation," the source said. "Sole, as CEO, was
very well placed to influence the outcome of such claims."
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Aviva Imhof
South-East Asia Campaigner
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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