Proposed submission for the World Commission on Dams, East and South-East Asia Regional Consultation
February 25, 2000

Dear Colleagues,

The following is the summary paper which was submitted to the regional consultation meeting of the World Commission on Dams in Vietnam but was not adopted by the WCD for the official presentation in Vietnam. Even though I could not have a formal opportunity to present this, it would be better to share this with our colleagues. Please refer to it.

Regards,

Satoru Matsumoto
Mekong Watch Japan

1. Development funds from Japan to Mekong region

The official development assistance including grant aid and soft loan from Japan to four countries located in Lower Mekong Basin (Laos, Thailand, Cambodia and Vietnam) is outstandingly large. In 1997, for Laos it amounted to US$78.6 million followed by Germany (16.6 million), US$ 468.3 million for Thailand followed by Germany (35.3 million), US$ 61.6 million for Cambodia followed by the United States (30.0 million) and US 232.5 million for Vietnam followed by France (63.9 million). The share among all bi-lateral assistance in each country is 47.8 %, 77.9 %, 27.3 % and 39.7% respectively. While the Asian Development Bank (ADB) financed more that ODA from Japan in Laos, even multi-lateral assistance in other countries is much less than the Japanese aid. Therefore, it is easy to imagine that Japan has been a major financier of a number of dam projects in these countries.

2. Bi-lateral cooperation for dam projects

The following list is the major dam projects in Lower Mekong countries developed or studied only during the 1990’s by the official development assistance from Japan.

a) Vietnam

– Construction / Ham Thuan – Da Mi (Soft Loan / 53.07 billion JPN Yen), Dai Ninh (Soft Loan / 4.03 billion JPN Yen)

– Development Study / Master Plan Study on the Dong Nai 3 and 4 (Grant)

b) Laos

– Construction / Nam Leuk (Soft Loan / 3.9 billion JPN Yen)

– Development Study / Feasibility Study on the Nam Ngiep 1 (Grant), Master Plan Study on Hydroelectric Power Development in the Se Kong Basin (Grant), Private Sector Investment Finance for Nam Ngum 3 (Loan for private sector)

c) Thailand

– Construction / Bhumipol Unit No.8 (Soft Loan / 7.85 billion JPN Yen), Sirikit Unit No.4 (Soft Loan / 4.4 billion JPN Yen), Lam Thakong (Soft Loan / 18.24 billion JPN Yen)

– Development Study / Feasibility Study on the Kok-Ing-Nan Water Divsersion (Grant)

In case of Thailand, the Japanese government financed construction or feasibility studies of a number of dam projects during 1960’s and 70’s such as Nam Pong, Lam Dom Noi and Nam Pung.

3. Multi-lateral assistance

Major multi-lateral donors for development projects in Lower Mekong countries are World Bank and ADB. Japan is the second largest donor country for World Bank and the largest for ADB. The share of financial contribution to each instition reflects on the share of votes in case both of World Bank and ADB. It implies that the voting of the Japanes Executive Director (ED) is quite influential on a decision-making of each bank.

The operational dams in Laos such as Se Set, Nam Song Diversion and Nam Theun-Hinboun were funded by ADB, which also financed the Se Kong

– Se San

– Nam Theun River Basins Hydropower Study. Based on the result of this Study, ADB will provide technical assistance for developing TOR (Terms of Reference) of feasibility studies of the selected high-potential dams in three basin countries such as Laos, Cambodia and Vietnam.

So-called the Japan Special Fund (PHRD Fund) was provided through World Bank for the environmental mitigation program of the proposed Nam Theun 2 dam in Laos. When the loan for Pak Mun dam in Thailand was approved at the Board meeting of World Bank in December 1991, although the US, German and Australian Executive Directors voted against the loan and the Canadian Executive Director abstained, it is said that the Japanese Executive Director strongly supported this project.

In addition, when Prek Thnot dam in Cambodia and Nam Ngum 1 dam in Laos were funded by a consortium of several donor countries during 1960’s, Japan took a leading role to develop them. However, the construction work of the Prek Thnot was suspended due to the internal war.

4. Japanese consultant companies

The Japanese development consultant companies have played a significant role not only in studying but also facilitating the initial process of potential dam projects. Many of them have involved in the projects raised above with the public funding from the government or multi-lateral development banks.

In addition, they also have spent their own money to conduct feasibility studies in order to show aid implementing agencies of Japan or multi-lateral banks an attractiveness of the dam projects, which may lead to their future jobs and benefits. For example, Nippon Koei conducted an Environmental Impact Assesment for Prek Thnot dam with its own fund though NGO Forum, a consortium of NGOs working in Cambodia, does not accept it as an official EIA to promote the project. Sanyu Consultant also spent its own fund to conduct an initial feasibility study for building two dams in the Se Banghiang River in Laos and diverting water to Chi River basin in northeast of Thailand for irrigation.

We can see a different type of involvement of the Japanese consultant at the Ta San dam project in Salween River Basin in Burma, which is the Upper Mekong country, though. The semi-governmental development consultant company, EPDC, conducted the feasibility study of this dam as a sub-contractor of GMS Power Company in Thailand. It indicates that the Japanese government does not regulate or supervise the consultant company (even semi-governmental one) to refrain from involving dam projects in Burma even though the Japanese government has consistently announced that it has restricted its development assistance to Burma within only humanitarian aid.

5. Critical views on involvement of Japanese money in Mekong dam projects

This paper does not intend to articulate the problems or conflicts relating to each dam project introduced above. It is expected that some of these projects would be adopted or studied by other papers submitted to WCD.

Therefore, it should be more effective that this paper discusses some key issues which have been looked at critically and asked to improve by the Japanese NGOs working on the advacy to offical international cooperation of Japan.

– The recently enacted Information Disclosure Law excludes diplomatic documents including international cooperation.

– The Japanese official development assistance does not contain any institional mechanism functioned as a so-called an independent inspection panel.

– Both the government of Japan and aid implementing agencies have not clear written policy regarding information disclosure to affected people by specific projects in their own languages

– The government has neither accountability nor transparency regarding the voting attitude of the Japanese ED at the Board Meeting of World Bank and ADB.

– The government of Japan relies on the official sources to get relevant information to a dam project and hardly visits the affected area or discusses with civil society organizations by themselves.

– Though implementing agencies such as JICA, former-OECF and former Japan Export Import Bank have their Environmental Impact guideline, no guideline or directives are prepared for participation, involuntary resettlement and information disclosure of aid projects.