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DAM-L LS: Critique Theun Hinboun Mitigation and Compensation Program (fwd)
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subject: LS: Critique Theun Hinboun Mitigation and Compensation Program
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The following is the executive summary of a new report prepared for IRN
reviewing the recently released Theun Hinboun Mitigation and Compensation
Program and providing an update on the Theun Hinboun campaign. If you would
like the full report, email aviva@irn.org, or download from our web site in
about a week's time (www.irn.org). The report of the THPC's fisheries
consultant, Mr. Terry Warren, will also be available on the IRN web site in
about a week. This report has been witheld by the ADB and the THPC because
they do not agree with its findings.
Theun-Hinboun Update: A Review of the Theun-Hinboun Power Company's
Mitigation and Compensation Program
By Bruce Shoemaker
EXECUTIVE SUMMARY
In September, 2000 the Theun-Hinboun Power Company (THPC) released its
Mitigation and Compensation Program (MCP) Report. The MCP was prepared as
part of the company’s obligations under its loan and concession agreements
with the Asian Development Bank and Government of Laos (GoL) and followed
almost three years of mounting evidence of serious livelihood impacts
occurring to local citizens in the project area. This briefing paper was
commissioned by International Rivers Network in order to provide an update
on the situation at Theun-Hinboun and to review and provide some analysis
of the THPC’s proposed Mitigation and Compensation Program. Some
references are made to the recently released findings of the World
Commission on Dams and their applicability to Theun-Hinboun.
The Theun-Hinboun Hydropower Project has been plagued with controversy from
its inception due to concerns over its poor decision-making process,
inadequate EIA, conflicts of interest, and potential for severe
environmental and socio-economic impacts. Shortly after the closure of the
dam in early 1998, villagers began suffering increasingly severe impacts to
their livelihoods from the project. These impacts have included the loss
of fisheries, flooded vegetable gardens, loss of drinking water supply,
lowered water tables, impaired boat and pedestrian access to surrounding
areas, inundated agricultural lands, bank erosion, and the loss of fishing
equipment. This has created great hardships for thousands of local
peoplereducing their food security, cash income, and overall quality of
life. The THPC and the ADB initially refused to acknowledge these
impacts. But by late 1998, following overwhelming evidence from both
outside sources and the THPC’s and ADB’s own consultants, the ADB publicly
acknowledged for the first time that local people were being seriously
harmed by the project. The provision of timely and adequate compensation
to all affected villagers was promised by the ADB.
Unfortunately, what followed was a series of delays, poor process, and
apparent stalling by the THPC. A survey of the impact zone, which was to
begin immediately, was delayed. When it did occur it was of such poor
quality that it was of limited use. By August 1999, villagers were
frustrated and angry with the project's performance and lack of progress on
compensation. A November, 1999 ADB mission admitted the survey had been of
little use, the THPC was failing to meet expectations regarding
compensation measures, and that local people were suffering serious
impacts. Finally, the THPC released its Mitigation and Compensation
Program report in September, 2000.
The MCP Report outlines a ten-year $2.74 - $4.65 million program, to be
implemented by the restructured Environmental Management Division (EMD) of
the THPC. The report outlines the environmental and social impactsand
proposed mitigation and compensation measuresfor the lower Kading River
area, the “Headpond” area, and the downstream Hai/Hinboun rivers. In the
report the THPC acknowledges a somewhat more realistic estimate of the
extent of the project’s environmental and socio-economic impacts, providing
estimates of impacts to fisheries, water supply, gardens, and boat and
walking access for thousands of households. Severe damage to fish
migration routes and aquatic and riverbank/island habitats and wild fish
populations along the Kading River (in the Nam Kading National Biodiversity
Conservation Area) is also acknowledged.
While some positive measures have been initiated, there are many serious
concerns with the MCP. These include:
· Lack of Accountability to Local Citizens: Villagers do not appear to
have had sufficient opportunity to give input into proposed mitigation and
compensation measures or to formally approve of the MCP plan. The MCP
provides no system for affected villagers to hold the THPC accountable for
its actions. No allowance is made for independent verification of whether
the MCP is performing adequately to the satisfaction of local people. This
is contrary to recommendations made by the WCD.
· Failure to establish criteria for evaluating project impacts: The ADB
and THPC may still be underestimating project impacts in some areas. It is
unclear why the households in the lower Nam Kading watershed are listed as
only suffering “mild impairment” to their fisheries as outside reports have
suggested severe impacts are occurring. The MCP fails to provide detailed
information on what methodology and criteria it used for evaluating impacts.
· Misallocation of resources to consultants and officials instead of
villagers: Approximately three quarters of the “definitive or probable” MCP
budget will be spent on further studies, assessments, plans, and
monitoring. Most of the remainder is for development initiatives of
uncertain benefit to local people. Only $137,500for the purchase of water
pumps for gardensis allocated as direct compensation to villagers. The
“contingent” budget may provide additional funding for direct compensation
but no firm commitments are made.
· Failure to recognize citizen’s rights to direct compensation for fishery
losses: The MCP, using a flawed rationale, fails to provide any direct
financial compensation to villagers who have suffered from lost food
security and cash income due to the destruction of their fisheries. The
MCP proposes to make villagers waitpossibly up to ten more yearsfor unclear
benefits to materialize from fish ponds and other development initiatives
in order to make up for the harm inflicted on their livelihoods. Permanent
losses require permanent solutions and direct compensation will have to be
provided. Compensation must be retroactive to the time of dam closure and
should continue through the life of the project unless it is proven that
alternative and sustainable food production and income generating
opportunities have already been successfully provided to affected villagers
to their satisfaction.
· Reliance on Risky Development Initiatives Without Substantiating Claims
of Future Benefits: The MCP makes claims of future benefits without any
substantiation or evidence that those benefits will in fact
materialize. The MCP proposes aquaculture as the solution to the loss of
wild fisheries even when the THPC’s own fisheries consultant warns that
this is a risky strategy not appropriate for the Theun-Hinboun area.
· MCP proposes to cutoff downstream flow: The THPC wants to renege on its
commitment to allow a minimum 5 cumecs of water to flow downstream into the
Nam Kadingthrough a conservation area and past villages already suffering
from the impacts of lowered water levels. The THPC claims revenues gained
will be used to fund the MCP, but no commitments to expend additional funds
on compensation beyond what THPC has already committed to do are
provided. Eliminating the minimum flow can be expected to further harm the
ecology of the Nam Kading and would exacerbate all of the negative impacts
being experienced by villages in the lower Nam Kading basin, creating the
need for yet more compensation and mitigation.
There are other concerns with the MCP, including contradictory plans
regarding fish pass construction, the failure to fairly assess 1996 flood
damage upstream of dam, and the continued problems and misunderstandings at
Ban Namsanam, the village situated next to the tailrace canal, and other
villages that were forced to move as a result of the project.
While instituting a just system for compensating affected villagers is a
long-overdue step for the Theun-Hinboun Hydropower Project, the flaws and
inadequacies in the proposed MCP provide cause for concern. The MCP, as
proposed, actually represents a step backwards in efforts to gain redress
and justice for those Lao citizens now suffering impacts from the project
for almost three full years. The loss of villager food security and cash
income through impaired fisheries has not been remedied in any way. In
effect, very poor rural villagers continue to subsidize the profits of the
Theun-Hinboun Power Company. The project is in clear violation of ADB
lending guidelines which state that local citizens should be left no worse
off by their projects.
It is time for the donor countries to the ADB, along with the governments
controlling Nordic Hydropower, to take a much stronger role. At a minimum,
they should insist that:
· A comprehensive program of direct compensation to affected villagers be
initiated immediately. This should include reparations for past damage,
dating from the construction and opening of the project, and ongoing
compensation. As recommended by the WCD, compensation should involve
negotiated agreements with affected villagers and the development of
systems of accountability through which villagers can hold the THPC
responsible for project impacts and its performance in remedying them.
· An independent Environmental Impact Assessment be conducted to study what
the impacts of the minimum flow in the Nam Kading have been up to this
point. This assessment could look at what changes could be expected by
eliminating the minimum flow, as proposed by THPC, orconverselywhether it
should in fact be increased. Any future agreements regarding minimum flow
should include direct negotiations with affected villagers over the
management of their river systems.
· Full funding of all required mitigation and compensation measures be
providedthrough reorienting the existing MCP budget, from the ample profits
of the THPC and/or through the ADB and Nordic agencies responsible for the
promotion and approval of the project in the first place. While additional
funding may be needed, this should not be at the expense of further
socio-economic disruption and environmental destruction in the
Theun-Hinboun region.
· A comprehensive and participatory post-project evaluation be
undertaken. Such an evaluation would be timely as both the ADB and World
Bank are looking at supporting new hydropower projects in Laos in the near
future and it would be in accordance with new WCD recommendations.
December, 2000
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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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