Ethical Performance
inside intelligence for responsible business


Laos dam project goes ahead despite Asia outcry

April 2013

The Laos government and the company it commissioned to build a huge hydroelectric dam on the Mekong river are under renewed attack for breaching their agreement to halt the work.  

A suspension of the 1,285-megawatt, $3.5bn (£2.34bn, €2.7bn) Xayaburi dam project was agreed by Laos, Vietnam, Cambodia and Thailand in 2011 to allow studies of fish migration patterns and threats to food production.

A 1995 treaty actually requires the four countries’ consent before dams can be placed on the Mekong, and in 2011, when the governments of those countries were discussing a moratorium, WWF, the prominent environmental NGO, requested a ten-year break to assess the implications of Xayaburi.

Last year, nevertheless, work was resumed. One reaction was a demonstration, mainly by Cambodians, outside parliament in Bangkok – the Thai contractor Ch Karnchang is constructing Xayaburi, and Thailand will buy 95% of its electricity.

After the latest meeting of the Mekong River Commission, an inter-governmental agency promoting sustainable management of the waterway’s resources, Vietnam and Cambodia demanded that Laos stop the work again so that investigators could calculate the impact.

Laos insists that Xayaburi would significantly boost its tiny economy and raise its citizens’ living standards, largely through electricity sales to Thailand. A quarter of the country’s six million people are said to be below the poverty line.

Yet, if Xayaburi proceeds, at least 2,100 villagers will be resettled and 200,000 others will suffer directly, claims International Rivers, a US environmental and human rights NGO.

International Rivers says Xayaburi will remove agricultural land and riverbank gardens, end gold panning in the area, destroy fishermen’s livelihoods and restrict access to the resources of the Luang Prabang mountain range.

In Vietnam the government complains that Xayaburi will stop nutrient-rich sediment reaching the Mekong delta rice fields.

WWF adds that Xayaburi will threaten many fish species too.

Families already resettled by Ch Karnchang say they have not received the replacement agricultural land the company offered and have been given free electricity for only a month, instead of the promised year. They claim Ch Karnchang has refused to compensate them for losses, in violation of Lao law.

Ch Karnchang has not answered these accusations forwarded by Ethical Performance.

Ame Trandem, International Rivers’ South-east Asia programme director, said: “By proceeding with resettlement and construction on the Xayaburi dam, Ch Karnchang has blatantly defied the diplomatic process under way to decide on the future of the Mekong river.

“The company has violated the trust of the governments of Cambodia, Laos, Thailand and Vietnam, with apparent impunity.”

The controversy will probably continue as 10 more Mekong dams are planned by 2025.

Milton Osborne, visiting fellow at the Lowy Institute for International Policy, an Australian think tank, believes the river will eventually cease to be “a bounteous source of fish and guarantor of agricultural richness”, and will become “little more than a series of unproductive lakes” in the south of China.

WWF | Asia | Renewable energy

3BL Media News
Sign up for Free e-news
Report Alerts
Job Vacancies
Events Updates
Best Practice Newsletter