Environment News Service
June 27, 2000

The Asian Development Bank is being urged to defer a decision on funding of a controversial 240 megawatt hydroelectric scheme on the Se San River in Vietnam until more detailed studies on likely impacts have been completed. The requests came at a major international conference here on the weekend.

The conference, organized by the Australian Mekong Resource Centre, comes at a critical time for the Asian Development Bank, which is negotiating with donor countries for replenishment funding to its concessional loan fund. However, with dissatisfaction with the performance of the ADB increasing, donor countries such as Australia are pressing for reforms.

Witoon Permpongsharoen from nongovernmental organization Towards Ecological Recovery and Regional Alliance (TERRA) based in Bangkok, Thailand said the Yali Falls dam in Vietnam, demonstrates the dangers of large scale hydropower projects in the area. The Yali Falls dam is just 20 kilometres (12.4 miles) upstream from the proposed Se San 3 dam.

A report completed in late May by the Fisheries Office of the adjoining downstream province in Cambodia reveals that the Yali Falls hydroelectric scheme, funded by the Russian government, had caused “serious ecological and social impacts” to 20,000 people in 59 villages in the dam affected area.

Since the dam was constructed, 32 people have drowned as a result of surges in water flows while deterioration in water quality has had major impacts on the health of downstream users, the report states.

“Although it is not entirely clear how many people have died as a direct and indirect result of changes in water quality, local people report that 952 people have perished since the problems began over four years ago, and that water quality has been the cause of all or most of the deaths,” according to the Cambodian report.

The ADB, a multi-lateral development bank dominated by contributions from Japan and the United States, is facing increasing opposition from within the region and from international nongovernmental organizations for its role in supporting environmentally and socially damaging projects.

In 1992, the ADB established the Greater Mekong Subregion (GMS) economic cooperation program to integrate the economies of member countries – Burma, Thailand, Laos, Cambodia, Vietnam and the Yunnan province of China.  Particular emphasis has been placed on the studies and projects aimed at infrastructure development, including roads and hydropower plans.

“The rich human and natural resource endowments of the Mekong region have made it a new frontier of Asian economic growth,” ADB Programs Department deputy director, Rajat Nag, told the conference.

Controversy over the impacts of hydropower projects is widespread through the region.

Permpongsharoen from TERRA told the conference the ADB had dismissed concerns about the Theun Hinboun dam in Laos. “There is little for the environmental lobby to criticize in Theun Hinboun – there is no flooding, virtually no reservoir, and no need to resettle anyone,” the ADB had claimed.

The Nam Theun is one of the largest tributaries of the Mekong River in Laos. The Theun-Hinboun hydro scheme, partly funded by a $US60 million loan from the ADB, was approved for construction in 1994.

A subsequent Asian Development Bank mission to the area, “admits there ‘are major impacts related to the project operation’ that include damage to village water supplies, vegetable gardens and fisheries,” Permpongsharoen told the conference.

“In the first year of the operation, the project earned $US16 million for the government of Laos, only two-thirds of the revenue predicted by the ADB and less than the loan service repayments,” Permpongsharoen said.

“There is a profound difference between what the ADB says and what they really do. The ADB talk about poverty reduction but the people say you are going to make us poor. You shouldn’t allow them to use your money for projects that make people poor,” he said.

Fisheries biologist, Terry Warren, revealed at the conference that a report he authored on the impact on fisheries as a result of the Theun-Hinboun dam had been suppressed.

“Earlier environmental impact assessment reports,” he said, “clearly underestimated the impacts to fish populations and fisheries.”

Warren’s 1998 study found significant impacts on fisheries which had adversely affected reduced fish catches for 13 riverside villages. Fisheries are a vital source of protein for local villagers.

“To date, the Thuen Hinboun Power company, its directors and the Asian Development Bank appear to be unwilling to make the final report a public document whilst at the same time apparently offering criticism about its lack of clear recommendations,” Warren told the conference.

Representatives from the Asian Development Bank at the conference were stung by the criticism from Warren. “It happened on our watch and we have got to do something about it. We can’t undo what was done, that was stupid and that shouldn’t have happened. We are working on the compensation package and we have got the [power] company to agree with us,” the ADB Programs Department deputy director, Rajat Nag, told the conference.

Professor of Economics from Chulalongkorn University in Thailand, Pasuk Phongpaichit, told the conference that opposition to environmentally damaging projects is rapidly escalating in her country.

“At present in Thailand, virtually every big project for an energy plant, dam or waste disposal project is being strongly opposed by a coalition of affected local people, activist NGO’s and environmental groups,” she said.

“The Mekong countries governments may short sightedly adopt the ADB’s strategy and allow themselves to be strapped with huge public debts from loans for big dams and other infrastructure projects in the name of anti-poverty policy,” Phongpaichit cautioned.