Circumventing State’s Responsibility in Transboundary Investment: the case of Pak Beng Hydropower Project in Laos PDR

Exporting electricity from hydropower especially dams on the Mekong river is one of Lao PDR’s major economic development strategy planned for the next decades with Thailand set to be one of its main partners in the trade. Therefore, despite ongoing disputes over large dams currently under construction by Laos on the Mekong river, namely Xayaburi Dam and Don Sahong Dam, Laos government persistently pushes on with the next hydropower project — that is the Pak Beng Dam. In August 2007, Laos government signed a Memorandum of Understanding (MOU) with China’s Datang Overseas Investment Group to develop the dam. Thus began the feasibility study which was approved by Laos government in January 2015 granting a 30-year concession for the hydropower dam including construction period. Additionally, Electricity Generating PLC or EGCO Group, a subsidiary of Electricity Generating Authority of Thailand (EGAT) is reported to co-invest in the project [1]. On 8 March 2017, EGCO reported, in a press conference on its 2016 Business Performance, that Datang International Group holds 51% share of the joint venture while EGCO holds 30% of the share and Électricité du Laos holds 19% [2].

The Pak Beng Hydropower Project comprises concrete dam, power generating facilities, floodgate, lock system for navigation of ships up to 500 tons (for cargo and tourism transport), and a 15-meter wide and 1,000-meter long fish passage facility (a kind of canal system to allow fish to move up and down the stream where the river is blocked by dam). The dam is designed with 912 Megawatts electricity installed capacity. It is located on the Mekong mainstream, upstream of Pak Beng township in Oudomxay Province of Lao PDR. From Thailand, the dam is located around 97 kilometres downstream of Kaeng Pha Dai in Wiang Kaen District of Chiang Rai Province or around 125 kilometres downstream of Chiang Khong District of Chiang Rai province. The first two power generation units are expected to begin testing operation in 2022 and full operation of all 16 units is expected in 2023. Around 90% of electricity generated from Pak Beng Dam will be exported to Thailand by EGAT and the rest to be used in Lao PDR.

Currently, the project had undergone the Procedures for Notification, Prior Consultation and Agreement  (PNPCA) as required by the 1995 Mekong Agreement which established the Mekong River Commission (MRC). The procedure began in December 2016 and 19th June 2017 marked the end of the initial six-month process. In Thailand, Department of Water Resources (DWR) as the secretariat of Thai National Mekong Committee had held 4 meetings (National Information Sharing Meetings) in 3 provinces to share information (notification) about the project. However, the PNPCA process had caused distrust among affected communities mainly because, throughout the process [3], civil society was calling for accurate information from all relevant authorities especially on transboundary impacts but they had felt none of the authorities were disseminating adequate information. Additionally, the consultation process did not cover all the potentially affected area; consultations were held only in 3 out of 8 provinces along the Mekong river.  At the beginning of PNPCA process in December 2016, Director General of Thai Department of Water Resources submitted a letter to Chief Executive Officer of MRC, Pham Tuan Phan, in respond to MRC’s preparation of documents for the prior consultation process; The letter expressed that Thailand (Thai National Mekong Committee through DWR) is highly concerned on the following issues regarding potential transboundary impacts of the hydropower project [4]

  1. Impacts on fisheries: threats from blocking fish migration routes especially keystone species of the Mekong, for example, the Mekong Giant Catfish (Pangasianodon gigas) which is a critically endangered species, could lead to species extinction.
  2. Backwater effects [an expected result of water regime changes from the dam] will cause the flood in some areas in Thailand especially Wiang Kaen District and Chiang Khong District in Chiang Rai Province. This will affect local residents living along the riverside including damages to seasonal crops cultivation and severe damages to the local economy.
  3. Impacts on sedimentation and sediment transport: because more sediment is expected to accumulate at the Pak Beng hydropower station (accumulated sedimentation of the river bed load and suspended sediment load), it will affect geomorphology of the river hence collapse of riverbanks and other related damages.
  4. Change of biological conditions and ecosystem of the Mekong; Expected impacts from the hydropower project are significant for food security of people at local and regional levels since many in the area depend their livelihoods on the river.

5. Mitigation measures are inadequate particularly for impacts from changes in ecosystem and health of the affected population, especially measures for compensation to local people and rehabilitation of the river’s ecosystem.

Moreover, the MRC’s document “Summary of the 2nd Draft Technical Review Report” on “Prior Consultation Process for the Pak Beng Hydropower Project” dated 21 April 2017 is an example how existing studies on transboundary impacts from the dam are inadequate. For environmental impacts particularly on fish species and fishery, the study was conducted only in 6 locations around the project site; information about fish migration routes/fish passage facility is unclear and data on fish species are incomprehensive. For social impacts, study was conducted only on communities within 5-kilometre radius of the dam site; There was no mention about impacts on fisherfolk communities who will be directly affected by the change of river regime especially those living upstream of the dam in Thailand i.e. from Kaeng Pha Dai in Wiang Kaen District upstream toward Pak Ing village in Chiang Khong District of Chiang Rai Province. Additionally, the report on the Prior Consultation Process does not seem to incorporate information obtained by MRC’s previous studies into the proposed mitigation measures [5].

The incomprehensive, unclear and hasty nature of the initial process of the project had suspiciously created loopholes which can lead to damages on ecosystem and impacts on many people in the future, for example:

– The assessment of transboundary environmental impacts does is inconsistent with the protection of rights and freedom of Thai people to protect their natural resources and environment. This includes the fact that information used in the study are intentionally selected to support the project while comprehensive potential impacts are neglected [6].

– Loopholes in the PNPCA process are exploited in order to support approval of the project regardless of principles of the Agreement [1995 Mekong Agreement, the origin of the PNPCA] particularly how the study of impacts had avoided incorporating all areas potentially affected by the dam.

– Loopholes for potential conflicts of interest are opened for exploitation by Thai policymakers and the Thai company EGCO; Evidently, several policymakers in the Sub-committee for Electricity Cooperation between Thailand and Neighbouring Countries under the National Energy Policy Council which directly oversees plans to buy electricity from neighbouring countries are at the same time part of the management board of EGCO — the Thai private company who is the second largest shareholder and one of the main beneficiaries of the project [7].

– MRC’s lack of concrete regulatory measure allows inadequate, and in some cases negligent of, measures for remediation and protection of the interest of citizens of its member states.  Accordingly, the inadequate regulatory measure has lead to the inefficient implementation of the work plan. A concrete example relevant to this case had come out when DWR reported to the Thai National Human Rights Committee that MRC had contracted foreign experts to study impacts on the Mekong with 8 million USD budget; however, no progress was yielded after four years since the study began [8].

On the other hand, local communities in potentially affected areas in Thailand have consistently voiced their grave concerns over the dam’s impacts on the environment and ecosystem e.g. destruction of natural resources, negative impacts on local fishery and fish species in the Mekong river, permanent obstruction to fish migration routes, destruction of habitats and spawning grounds for fish especially those most at risk for extinction.

Locals are also highly concerned that diversity and complexity of the river will be destroyed: many isles, islets, reefs, and sandy beaches between Pak Beng Township and Chiang Khong District (upstream from the dam site) will be inundated; rich nutrients usually carried naturally by sediment to feed lives downstream of the river will be blocked by the dam. Additionally, significant local tourism routes with more than one million visitors per year e.g. Huay Xai – Luang Prabang will be obstructed consequently affecting local’s income from tourism. As well, there will likely be more labour migration from Laos to Thailand as a consequence of loss of livelihoods of people whose lives rely on the river and its tributaries.

With the current situation, local communities in the area potentially affected by the dam have to stand up to demand and protect their rights by themselves. On 10 April 2017, Rak Chiang Khong Conservation Group submitted a petition to the Director General of Department of Water Resources (DWR) demanding the authority to enforce its power in designated duty to protect the Mekong river and the people as well as to act responsibly as the Thai National Mekong Committee (TNMC). The local group also submitted letters to other relevant agencies requesting their positions and comments in relation to the Pak Beng dam and urging those agencies to adhere to their duty to genuinely protect the interest of Thai people and to realize locals’ concerns.

Furthermore, on 8 June 2017, Rak Chiang Khong Group together with Network of People from 8 Mekong Provinces (in Thailand) filed a lawsuit before the Central Administrative Court of Thailand against Thai government agencies namely Director General of DWR, DWR, and TNMC. The plaintiffs have alleged that the three accused authorities have acted unlawfully in omitting their duties to inform the public and inadequately disseminating information about the project. The plaintiffs have requested the court to annul implementation and public consultations that have been conducted per the PNPCA process as well as other processes relating to the Pak Beng Dam in Thailand. The plaintiffs also requested that EGAT (via recommendations by the three accused authorities) shall postpone the signing of the power purchase agreement (PPA) relating to Pak Beng Dam until further study and measures have been made to ensure that the project shall render no transboundary impacts particularly on communities in Thailand.

Unfortunately, on 23 September 2017, the Central Administrative Court decided to dismiss the case. An interesting issue the court had cited as one of the reasons for this decision is regarding notification and dissemination of information about the project and the assessment of potential transboundary impacts on the environment, health, and society. The Central Administrative Court considered the Pak Beng Hydropower Project to belong to Lao PDR; hence the three accused authorities have no power and duty related to the construction of the dam. Additionally, the consideration that the three accused does not have the duty to conduct the environmental-health-social impact assessment and organize public hearing because those duties and power lie with the government of Lao PDR.

Update: Communities appealed to the Supreme Administrative Court on 18 October 2017. Subsequently, in November 2017, the Supreme Administrative Court has decided to take the case.

However, Rak Chiang Khong Group will soon file an appeal to the Supreme Administrative Court.

“Government authorities have direct duties to create mechanism and enforce or fix the law regarding assessment of cross-border impacts, whether environment, health, and social, in order to ensure that rights and freedom of people living along the Mekong river in Thailand are protected.”

Pak Beng Hydropower Project is another case that reflects existing regulation’s loopholes which allow those responsible for development projects, both authorities and investors, to evade their responsibility. Thai government should have appropriate mechanism and power to protect the interest and rights of Thai people; not to leave its citizens to fight by themselves with projects negatively affecting their livelihoods both directly and indirectly.  At the moment, eleven mega-hydropower projects are being planned and pursued on the lower Mekong mainstream. With experiences from Pak Beng Dam being the second project among the eleven to be pursued after Xayaburi Dam which has begun construction despite strong public outcry; it is already evident that these mega projects are going to have far-reaching impacts on the entire Mekong river basin, not only at and nearby the dams’ sites. The impacts will be immense and cross-border; potentially affecting millions of lives and species.  Hence, regulatory loopholes must be closed so that institutions, either state or private, who plan to invest and profit from mega projects exploiting this transboundary river and its people cannot circumvent their responsibility and can be held accountable for their actions because impunity shall not be tolerated.

 

References

[1] http://www2.egco.com/th/corperate_com_press_detail.asp?press_id=243&iYear=2017

[2] https://greennews.agency/?p=8674

[3]  www.tnmc-is.org/wp-content/uploads/2017/05/1.สรุปกระบวนการ-PNPCA.pdf

[4]  www.tnmc-is.org/download/จดหมายแจ้ง-ตอบ-ประเด็นข้/

[5] Summary of the 2nd draft Technical Review Report of PakBeng Hydropower Project www.mrcmekong.org/assets/Consultations/PakBengBengHydropowerProject/2nd-RSF-ppt-presentations/Summary-of-2nd-Draft-TRR-290417.pdf

[6]  www.tnmc-is.org/download/จดหมายแจ้ง-ตอบ-ประเด็นข้/

[7]  http://www.terraper.org/web/th/node/1805

[8] http://www.terraper.org/web/th/node/1805

[9] https://news.thaipbs.or.th/content/263244

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s