Environmental groups demand accountability for 'negative impacts' of Lao dam project

2015-04-02

By Richard Finney

A view of the reservoir of the Nam Theun 2 hydropower dam in central Laos's Khammouane province, in a file photo. AFP PHOTO / HO / NAM THEUN POWER COMPANY

A group of nongovernmental organizations have called on the World Bank and other major lenders to take responsibility for what they call wide-ranging harm resulting from the banks' investment in Laos's controversial Nam Theun 2 dam project.

Supported by the World Bank, the Asian Development Bank (ADB), and the European Investment Bank (EIB), Nam Theun 2 "has failed to bring intended development benefits, and instead has unleashed a range of negative impacts on the affected populations in central Laos," the NGOs said in an April 1 press release.

These banks must now "publicly acknowledge the millions of dollars of [their] failed investment" in the project, said the statement, issued jointly by International Rivers, Mekong Watch, CEE Bankwatch, Both ENDS, Focus on the Global South, and NGO Forum on the ADB.

In March 2005, the World Bank approved the provision of U.S. $153 million for the development of Nam Theun 2, while in April that year the ADB offered $90 million to Laos and the Nam Theun 2 Power Company, a consortium of French, Italian, and Thai companies joined by the Lao government.

The EIB later also pledged millions of dollars in support of the project.

Problems cited in the NGOs' April 1 statement include a lack of sustainable employment and the poor quality of land allotments for families displaced by the project, the flooding of rice fields and riverbank gardens used for cultivation of food, and a "dramatic drop in wild fish catches."

Livelihood restoration commitments for communities downstream of Nam Theun 2, which began operations in 2010, have also not been fully met, the group said.

'We remain confident'

Reached by RFA for comment, a World Bank spokesperson defended the bank's involvement in the project, which he said would help Laos deliver "sustained poverty reduction and development benefits" to its people.

"We remain confident that the livelihoods of project-affected households and communities will be restored, and that the project will deliver considerable poverty reduction and development benefits to Laos over the long-term."

"Already under the project, more than 1,300 new homes with electricity and toilets, 330 water pumps, 32 schools, two health centers and 120 kilometers (75 miles) of access roads have been built for the 6,300 people resettled by the dam," the World Bank said.

"For thousands more living below the dam, the project [has] provided training to develop new skills such as aqua farming of fish and aquatic plants to help residents earn a living."

The Nam Theun 2 Dam, built on a tributary of the Mekong River, has been producing electricity for sale to Thailand and into the Laos grid since March 2010, following the resettlement of 6,300 people living in the assigned reservoir area on Laos's Nakai Plateau.

Since all land in Laos is owned by the state, residents can be forced off their land with little or no compensation as they are pushed out to make room for development projects.

Lenders 'complicit'

Other dams planned on Laos's Mekong River mainstream and its tributaries have also been dogged by controversy, with lending banks' investments in the country's hydropower sector "[causing] local communities to suffer," Mekong Watch senior advisor Toshiyuki Doi said.

"Rather than helping to achieve poverty alleviation, communities impacted from large scale dams in the Mekong Region have experienced a severe loss of access to natural resources, land-grabbing, impoverishment and dislocation due to forced resettlement."

"The World Bank, ADB and EIB remain completely unaccountable for their actions," added Shalmali Guttal, of Focus on the Global South.

"They must publicly acknowledge their complicity in the destruction caused by Nam Theun 2, and take legal, financial and moral responsibility for the damages to people's lives and the environment."

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