Looking for Space in the Lao Dam Debate

    A total of 26,500 megawatts is the usual figure found in media and research papers as Laos’ hydropower potential, of which 18,000 MW are said to be exploitable. Ninety percent of electricity from Laos’ hydropower projects are for export, mainly to Thailand, but also to Vietnam and Cambodia.

    After the Xe-Pian Xe-Namnoy dam disaster, media reports said the Lao government had announced a suspension and review of ‘new’ dam projects, tending to give the impression of a U-turn in Laos’ hydropower strategy. But there were no details about these statements, which Thongloun also referred to in public remarks.

    In retrospect, ‘new hydropower investments’ excluded those already in the country’s list of planned dams. These included the Pak Lay project in northern Xayaburi province just 11 km from the Thai border, which a Lao National Mekong Committee official confirmed was not covered by the review, Cambodia’s ‘Phnom Penh Post’ has reported.

    In fact, Aug. 8, the day after the Lao Cabinet meeting where this review was mentioned, marked the start of the MRC’s six-month prior consultation process, which is mandatory for dam projects on the Mekong mainstream. This followed Laos’ official notification two months ago of its intention to proceed with the Pak Lay project.

NO U-TURN

   There has been little sign of a major change in Laos’ pursuit of hydropower after the Xe-Pian Xe-Namnoy incident, and its role in its development vision, say researchers and civil society campaigners interviewed for this analysis.

    Indeed, the gulf in competing narratives around hydropower remains wide. For the Lao state, dams are deeply imprinted in its template of development three decades after its reforms that opened the country up to the international economic system. But for activists opposed to large dams in the Mekong region since the nineties, this is an ideology whose costs have started to emerge.

   “I don’t see a major shift in policy direction from the Government of Laos on hydropower development coming out of the (Xe-Pian Xe-Namnoy) disaster,” said Keith Barney of the Australian National University, who has studied the impacts of the Theun-Hinboun project. But, he added, “they may however (hopefully) seek to build in some sort of checks and balances in the construction standards.” This comes amid concerns about weak oversight mechanisms that make it easier for developers to take shortcuts.

   “The Government of Laos is too heavily invested at all levels in the hydraulic development discourse to allow this disaster, which it has done everything in its power to brush under the carpet, to derail its long-term hydraulic mission, which is really only just getting underway and has a long way to catch up with its larger hydraulic society neighbors, especially China, who set the ultimate benchmark,” explained independent researcher David Blake, Barney’s co-author in the study on the Theun-Hinboun project called ‘Structural Injustice, Slow Violence? The Political Ecology of a ‘Best Practice’ Hydropower Dam in Lao PDR’.

    While there is more public awareness generated by the July 2018 dam breakage, “what we are not seeing yet is the Lao government really finding a new way to respond to the issue of the dam and incidents like the Xe-Pian Xe-Namnoy,” added Premrudee Daoroung of the activist group Project SEVANA Southeast Asia. Calling the dam essentially a foreign project, she said: “I don’t think the Lao government can bear the cost itself, but they cannot find a way to respond very well.”

     “The NGOs, the media cannot really access information,” Premrudee said. “We’re still looking forward to see open space that really can make things change.”

    Laos also needs more capacity and confidence in defining and asserting the terms of the foreign investments and funds it takes in its projects, being more selective about them, and enforcing safeguards in its interest. These include the ability to negotiate better conditions, such as requiring more direct benefits for communities affected by development projects or investments, or pushing investors to source more locally.

    A development expert familiar with Laos relates having seen how unlike officials from other ASEAN countries, Lao representatives can “feel so lacking in confidence” in pushing their interests or defending the country’s positions or priorities.

   At the very least, the dam collapse may show locals some of the costs that come with hydropower, costs that the Lao government clearly wants to see the dam builder and operator take on, including the South Korean companies. In January, a prime ministerial order required the dam companies to pay 10,000 US dollars in compensation to each family that lost kin in the Attapeu disaster. Attapeu authorities, along with the Lao prime minister’s wife, handed out the funds on Jan. 26, according to news reports.

    “Like it or not, Xe-Pian Xe-Namnoy is a turning point for the dam era in Laos. Laos has already spent almost 20 years, already built many dams,” Premrudee explained.

    “I think the Lao government will keep going with the ideology of trying to build dams, but at the same time the transboundary impact is getting heavier,” she said, citing how the water surge from the Attapeu dam breach reached Cambodia to the south. “The impact used to be only (from) the China dam in the Lancang, but now the impact of the Lao dams on the Mekong is very clear as well.”

    “At least now we are hearing that the Lao government said that the responsibility for the Xe-Pian Xe-Namnoy dam has to be clear, by the (South Korean) companies,” Premrudee said. “The Lao government cannot deny responsibility as a government on what they are trying to do with the dams (and their impact). But how, what kind of channel can they use, that they feel comfortable enough to use, and can really be effective enough to respond to the real needs and the real situation?”

 DAM DISCOMFORT

    Over the years, Laos’ dam story has come with a lot of discomfort for the country. Today, Laos has taken the place of China, whose dam construction on the Mekong’s upper reaches in the nineties was a sore point with its southern neighbors, as the villain of sorts on the topic of Mekong dams.

     Laos’ decisions to harness its hydropower potential – it has clout because it contributes some 35% of the Mekong’s annual discharge – made it a magnet for outside attention it was quite unused to. It has had to navigate – at times in contradictory fashion – through unfamiliar venues such as regional mechanisms and instruments of accountability, and stepping onto diplomatic minefields with neighboring countries.

    Laos is much newer to this world, compared to its Mekong neighbors and other ASEAN members. Till the early nineties, this corner of Southeast Asia was seen as among the last frontiers to be opened to overseas investments and development projects, paving the way for programs like the Greater Mekong Subregion of the Asian Development Bank (ADB).

    As Soviet assistance fell in the late eighties, Laos found itself short of funds and did in 1988 what other communist countries, including Vietnam, had done earlier, and undertake reforms making room for private enterprise, foreign investments and other market-oriented mechanisms. Development banks pushed for the harnessing of hydropower, often on the logic that undammed waterways were a waste, and such projects made their way to the country’s five-year development plans.

    In Laos’ dam history, two projects shaped its experience in engaging with external players, in carrying out new types of financing and setting standards and systems at a time when dams were in the public eye. These were the Theun-Hinboun project, which hydropower researchers usually consider the project with the most sustainable features, and the Nam Theun 2 project, usually acknowledged in studies to still be, despite problems, more sustainable than those built in the country in subsequent years.

    Commissioned in 1998, expanded 14 years later and funded by the ADB and the Nordic Development Fund, the Theun-Hinboun project was the first major venture under Laos’ new policy on foreign investments at the time. The Build-Own-Operate-Transfer scheme was used for the first time, bringing the private sector into power plant construction.

    But problems with the project’s stringent environmental and social safeguards and standards, and criticism by civil society, scientists and Norwegian NGOs of the behavior of development funding institutions and the quality of technical evaluations, also threw Laos into the circle of sustained criticism.

   “In the end, more than 30 environmental groups from around the world sought to criticize, influence or stop the project. Never in Laos’ history had anything similar been encountered,” recalled Kim Geheb, Niki West and Nathaniel Matthews, authors of the ‘Invisible Dam’ report.

    “The (Theun-Hinboun dam) experience established Laos as a key battleground between hydropower development and the environmental lobby, “ they said.

    They argue that this undesired experience for Laos led to an situation of duality, where the stricter transparency and accountability rules around the Theun-Hinboun project, aimed at improving its quality, may well have been the factor behind why such were absent from the subsequent four dam projects in the country. Construction was low profile and there was very little public information available, they point out.

    Fast forward to the 1070-megawatt Nam Theun 2 project, also in central Laos, which was commissioned in 2010 after five years of construction, and was the next major target of protests from international NGOs. After the World Commission on Dams’ report in 2000, this project was packaged as a cleaner, greener one with safeguards that were set by the World Bank and the ADB and required Laos to go under immense outside scrutiny.

   At that time, the World Bank also worked with Laos to set up green and social legislation that led to the creation of the country’s environment-related institutions today.

   Geheb and co-authors recall that while critics found these standards lacking, Lao officials found them a straitjacket and said that the Nam Theun 2 safeguards were a “good example” but, along with Laos’ own policies, guidelines and laws related to hydropower that the World Bank helped it with, could not be used as standards. “Lao government officials frequently remark that if they were to fully apply their own hydropower policy, guidelines and legislation, no one would ever invest in the sector,” the ‘Invisible Dam’ report observed.

TROUBLED WATERS

    After the Nam Theun 2 project, international attention zeroed in on the Xayaburi project, especially as it was the first dam on the Mekong mainstream. Pushing ahead with this project, a joint venture between the Lao government and foreign investors, gave Laos its first experience with the MRC consultation process in 2010, and soon saw it embroiled in tensions with its neighbors.

    The ‘Invisible Dam’ paper argues that what was for Laos a difficult experience with the Xayaburi project made it “more confident of itself” in pressing on with its hydropower agenda, a process that its government now knows entails scrutiny, opposition and diplomatic tensions.

    In contrast to the Theun-Hinboun and Nam Theun 2 projects, where the development banks that had stakes in them took on public roles in their defense, the Lao government had to be exposed to criticism in the public sphere and speak out on the Xayaburi dam.

    The MRC process put dam project documents in the public domain, drawing criticism ranging from issues like fish migration and destruction of livelihoods, along with maters relating to design and resettlement. Laos had packaged the dam as being so state-of-the-art that it was as benign as could be. But criticism still grew, drawing opposition not only from NGOs, but from scientists, engineers and later on, from foreign governments.

    Vietnam and Cambodia were worried about impacts on their side of Mekong. Vietnam demanded that no dams be built on the mainstream Mekong for a decade. At end-2011, the MRC called for a halt to the Xayaburi project pending more studies.

    “Laos had never come under such immense scrutiny that buried what it considered a perfectly valid narrative to justify the dam; income with which to develop the country,” Geheb, West and Matthews continued. Media in Vietnam and Cambodia, apart from in Thailand, were also carrying regular, critical coverage of the Xayaburi project.

   On at least two occasions, in May 2011 and again in July 2012, Lao officials had said construction would be suspended. But in November 2012, Laos said it had held a groundbreaking ceremony for the Xayaburi project, after putting in revisions in its plans. By 2013, donors like Australia, Japan, Europe and the United States weighed in with public statements about the project.

    While it went through the motions of submitting plans and impact assessments and public consultations, Laos dug its heels in and successfully proceeded, unilaterally, with its plans.

    Work started on yet another dam, the southern Don Sahong dam, in 2016, in the area of the Si Pan Don islands that is key to fish migration along the Mekong, near the Lao-Cambodian border.

POLARIZED LESSONS

     Laos’ lessons from two decades of hydropower development may not all be evident or transparent yet. They also vary depending on the very polarized narratives around hydropower or its supposed kinder version, or more sustainable hydropower, a term the subject of debate.

     At the WEF Forum in 2018, Prime Minister Thongloun said Laos has learned from its experience with hydropower projects, including those that came with standards set by development banks. “We have good model projects in Laos such as the Nam Theun 2 hydropower dam project,” he said, pointing out the World Bank’s engagement in it. “It has made great achievements, so we have learned a lot from this project and also the incident in the Xe-Pian Xe-Namnoy dam project,” he said.

    “We have this commitment to make sure that from now on, development of hydropower projects should be based on careful planning and good design and we have to ensure socio-economic aspects and the potential impact of the project on society,” he assured. “We have to invite stakeholders – regional and international stakeholders – to join us in the feasibility of the project, such as under the MRC framework.”

    But the campaigners like Premrudee see differently: “What we can conclude is that the dams in Laos have really changed the face, or the image, of Laos. It’s very limited sometimes, the alternative thinking about development in the country.” She added, “Because the country has been gearing toward large-scale projects in the past two decades, the problem is how much of the natural resources will they have left in order to make alternative choices for themselves.”

    In the wake of the Xe-Pian Xe-Namnoy disaster, civil society groups mainly in Thailand, as well as researchers, continue to look for avenues to influence Laos’ hydropower vision and the brand of development that drives it, including by studying the impact of earlier dam projects.

     ‘”Many (locals) see it (dam construction) simply as the way of the future, and there can be some new development opportunities for those positioned to enjoy them,” Barney pointed out. “But when I consider the last 20 odd years of uncompensated impacts experienced by the villagers I frequently visit in the downstream of the ‘best practice’ (Theun-Hinboun) project, I would say there are elements of structural ecological violence in the environmental degradation that has been visited upon those riverside communities,” he said. “An entire way of life and life-world is slowly being made unviable.”

    “Villagers have little or no idea what a dam project represents prior to its development,” said Blake, who recalls suggesting at the 2004 Nam Theun 2 consultations that to-be-affected villagers be brought to the Theun-Hinboun project to talk with the locals there. “Virtually every impactee in Laos has never been afforded the basic right to free, prior and informed consent, as recommended by the World Commission on Dams panel,” he said.

    Communities lack tools to make private companies or commercial banks ensure adequate standards in dams and accountability, Premrudee says. Information is lacking about the relationships between governments and companies, including between the South Korean government and the Korean firms in the Xe-Pian Xe-Namnoy project, SK Engineering and Construction, and Korean Western Power.

    The disaster offered opportunities for Thai activists to link up with Korean ones, leading to public discussions and ideas for joint campaigns.  “From what we observe, the Lao government also knows that they need to connect with other groups from outside and make the response clear and professional,” Premrudee said.

    Soyeun Kim, a professor at the Institute for East Asian Studies in Korea’s Sogang University, says the disaster has not really sparked more public or corporate awareness about the overseas behavior of companies, including in projects with state funds.

    While a Korean television station reported about the Xe-Pian Xe-Namnoy collapse, she says, “Korean people are not really interested in a matter like this. They think it has nothing to do with them.” Corporate accountability lags behind Korean firms’ venturing into investments overseas, she adds.

    “(Korean) CSOs and NGOs do not talk much about this issue, almost none”, she said in emailed replies. “CSOs here in Korea lack both capacity and experience” to work on a project like the Attapeu disaster, Kim said.

    She remarked: “I guess it works both ways – Laos AND Korea both being secretive and non-transparent.”

WANTED: REGIONAL SPACE

   At the December forum at Chulalongkorn University, Premrudee explained that civil society groups have been active on Mekong issues for 25 years, but the discussion around development issues remains marked by the absence of independent non-government groups in Laos, Cambodia and Vietnam. (As ASEAN chair in 2016, Laos did not agree to host the ASEAN People’s Forum, which brings in civil society groups from region.)

   ASEAN falls short as Southeast Asia’s regional space for this kind of frank conversations, she believes. “How can you talk about the problem of the dam when (on) one side, the investor is very strong, like ASEAN that is taking economic integration as the main area (of its programs)? The investor is talking about the price of the resource when local people are talking about the value,” Premrudee said.

    “CSOs, local people are always catching up, running after something they will never be able to grab, and no one wants to spend time to work within the ASEAN platform,” she said.

    If it is not the ‘noise’ from campaigners or events like the Xe-Pian Xe-Namnoy collapse that influence dam policies in Laos, the forces that can may well be market, economic or physical factors – including shifting energy patterns and demand, as well as climate change impact and extreme weather patterns.

    Energy production and investments are shifting to renewables from fossil fuel given the drastic drop in the prices of electricity produced from wind or energy in recent years.

   “More important might be the changing economic equations with dam development”, said the ANU’s Barney.

    Any changes in electricity demand in Thailand, whose projected needs are the biggest driver of Laos’ dam construction, would play a key factor in future dams in the country.

   Thus far, Thai energy campaigners see little shift in the government’s push to keep projections of electricity demand at a level well above market reality, which in turn drives construction, as well as Thai investments in, dam projects in Laos.

    Suphakit Nuntavorakarn of the Healthy Public Policy Foundation, speaking at the Foreign Correspondents’ Club in Bangkok on Jan. 24, says this is reflected in Thailand’s 2018 power development plan that the National Energy Policy Council approved earlier that day. Thailand’s installed capacity in 2018 stood at 40,879 megawatts of electricity, but peak demand was just 29,968 MW. This means that nearly 27%, or 10,911 MW, were reserve, or excess, power, he said.

    Calling for “energy democracy” to correct this bias toward large hydropower and too-weak focus on renewables, Suphakit added that the power development plan envisions projects that would use liquefied natural gas imported from the Middle East and at least five big hydropower projects, producing 3,500 MW, to be built in Laos in 2016 to 2035.

    Blake believes that Laos will carry on building dam projects and related infrastructure, even if economic conditions are unfavorable. Construction will “continue apace on both mainstream and tributary dams, until the capital for construction dries up – another global/Asian economic crisis will do the trick”, he explained.

    “Hydraulic development is far more ideological than generally appreciated and follows non-economic, state-centric logic and rationalities,” he pointed out, citing similar experiences in Thailand and China.

    As hydropower stays firmly in mainland Southeast Asia’s development grid, so will the contested spaces where the Lao state, neighboring Mekong countries, private and state companies, local communities and activists interact.

    For instance, some two months after the Xe-Pian Xe-Namnoy collapse in September 2018, Thai and Cambodian activists turned down an invitation to take part in a regional stakeholder forum on Laos’ Pak Lay dam, saying the notification and consultation procedures lacked transparency. Though the MRC’s prior consultation process is something the Laos cannot ignore, its credibility remains scarred by the Xayaburi case.

    For those seeking to tell stories around hydropower development in Laos, a main challenge relates to the consultation and engagement with communities in dam projects. Building knowledge around Laos’ experience with dams would be useful, but getting the views of communities poses questions for researchers.

    “Free media, experts, civil society organizations and NGOs working in Laos about hydropower are heavily controlled,” said Kanokwan Manorom, a professor at Ubon Ratchathani University in Thailand, who has studied hydropower resettlement in the Mekong region. “Getting dam-affected people’s views about hydropower is impossible.”

   Sharing his experience with ‘getting the people’s views’ in the Lao context, Blake recalls instances where Lao villagers have referred to Thailand as a place where citizens can air their views on, or even protest, development projects.

    “This raises an issue of trust between researcher and research subjects,” he explained. “Basically villagers will have a public narrative (“dams are good, the future and represent modernity for Laos”) which they state among government officials and outsiders they don’t trust, and a private narrative, that is far more critical and incisive regarding dams and their situation, for use amongst those they trust.”

   “This is normal for most people in most situations, but it means that for many researcher and media sources, they only tap into the public narrative and the more critical views of villagers are largely obscured,” Blake pointed out.

Click here to go back to part one of the article: Laos: Dammed Information?