Sweden and Finland oppose new dam at the Mekong River

Land-locked neighbor reveals plans to start construction of controversial dam months before regional meeting decides on the issue

Undeterred by a regional agreement to which it is a signatory and despite fears of major negative social and environmental impacts, Laos seems determined to build a controversial dam on the lower reaches of the Mekong River.

International donors maintain that the fate of the dam depends on approval by ministers of neighboring countries whose concerns cannot be ignored.

Analysts in the field also stress that any preemptive attempt to unilaterally close the decision-making process of the project would be in breach of a regional agreement to which Laos is a signatory.

Bloomberg reported on September 9 that Laos plans to start construction this year of the US$3.8 billion Xayaburi dam on the Mekong River after changing the design to placate neighboring countries opposed to the project.

Laos completed a review of the dam initiated in May to ease concerns that it would harm rice production and fish catches downstream, Bloomberg quoted Viraphonh Viravong, director-general of the Lao ministry of energy and mines’ Department of Electricity, as saying on September 9.

“We want to explain, and make the other countries comfortable,” Viravong told Bloomberg. “If they are still very negative about it, of course we will spend some more time on it.”

The Bloomberg report said that Laos presented the project review conducted by Finland-headquartered Pöyry Group to Vietnam and plans to meet separately with Thai and Cambodian officials to discuss recommendations. The government can decide whether to proceed with the project at any point, it added.

But Le Duc Trung, who heads the Vietnam office of the Mekong River Commission (MRC) – an inter-government agency established to coordinate use of the riparian resources – said he was unaware of the latest developments on the issue.

“We have not received any information from Laos in this regard,” Trung told Thanh Nien Weekly.

The findings of the Pöyry-conducted project review have not been made public.

“Pöyry has been engaged by the [Lao government] to conduct a study on compliance of the current technical design of the Xayaburi hydropower project,” the company said in a statement sent to Thanh Nien Weekly.

“Pöyry’s services do not include any feasibility study or environmental and social impact assessments. Any possible release of information regarding the study results will be made by the client,” it said.

Strong objections

The 1,260-megawatt, 810-meter (2,600-ft) Xayaburi dam in northern Laos has been touted as a major step for green energy by its proponents, while those in the opposing camp have dismissed such claims as disingenuous.

Laos, with a population of around six million people and a gross domestic product of $5.6 billion, is looking to shed its status as one of the world’s most impoverished countries within the next decade and is aggressively pursuing hydropower as a means to generate income.

But conservationists say scores of fish species are likely to become extinct because of the dam that will block migratory routes. Moreover, large areas of rice fields would be deprived of fertile silt carried downstream by Southeast Asia’s longest river, they add.Â

Vietnam, Cambodia, and Thailand have voiced strong opposition to the project and urged Laos to defer if not cancel its implementation. Vietnam earlier called for a 10-year moratorium on all 11 dam projects proposed on the Mekong River, which also runs through Myanmar, Thailand and Cambodia from its source in the Tibetan plateau.

In April, Laos apparently agreed to suspend the project, pending approval from the four countries at a ministerial-level meeting scheduled for later this year.

Laos’s international donors have urged the landlocked country to keep its promise.

“Laos is a sovereign country, but as a diplomatic partner to Laos, Sweden is encouraging the Lao government to take into consideration potential impacts of Xayaburi, both environmental and social in Laos and in neighboring countries, when taking its final decision,” said AnnaMaria Oltorp, head of the Development Cooperation Section at the Swedish embassy in Bangkok.

“Finland continues to stress that Laos is expected by development partners to honor its undertakings towards other member states of the MRC,” said Sanna Pulkkinen, Mekong Program Manager for the Finnish Ministry of Foreign Affairs.

Oltorp also said that a decision on the project is expected at the MRC Council meeting slated for this November.

Done deal?

Laos has maintained that the decision-making stage, or the consultation process, of the Xayaburi dam is already over, allowing the project developer, Ch. Karnchang Pcl (Thailand’s third-biggest construction company by market value), to proceed with important preparatory work.

Ninety-five percent of the electricity to be produced by the Xayaburi dam is slated to be purchased by the Electricity Generating Authority of Thailand.

Laos’s viewpoint has been emphatically rejected by both the MRC and its international donors.

“Finland considers the [consultation] process still underway,” Pulkkinen said. “The Member States have requested additional information and the proposed mainstream dam in Xayaburi will be discussed at a ministerial level later this year.”

International Rivers, a US-based environmental NGO and perhaps the most vocal critic of the project, said in a press release in early August that a field visit to the site of the Xayaburi dam revealed that construction work on the dam’s access road and work camps continued apace.

“The trip to the Xayaburi dam site on July 23rd revealed that a substantial construction camp has been established near Ban Talan village with at least a few hundred workers,” the group said in the release. “An access road leading down to the dam site was also under construction and some land has been cleared without compensation provided to the owners.”

In April, news reports also said that road to the Xayaburi site was already being built and some people were already being resettled from the project area.

Laos’s Viravong told Thanh Nien Weekly in an email last May that upgrading of roads was requested by provincial authorities to be used by the public.

“It is up to the developer to extend their goodwill to the local people as there is no commitment at this time,” Viravong wrote in May.

Mekong basin countries are bound by the 1995 Mekong Agreement to hold inter-governmental consultations before building dams, but none has veto powers and Laos will have the final say, although considerable diplomatic pressure can be exerted on it.

International Rivers said it has submitted to the MRC and regional governments a legal opinion by the US law firm Perkins Coie, which states that “The Mekong Agreement precludes any unilateral decision that threatens the river’s ecological balance or impacts the needs of people who rely on it.”

“Laos’s unilateral action to prematurely terminate the [consultation] process, without allowing its neighbor countries to properly conclude that process, violates the Mekong Agreement, and therefore international law,” the group said.

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