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Contribution to the final report on the Sept. 7 consultation in Paris (France): Nam Theun 2 dam

Transnational Radical Party

September 9, 2004

Invited by the World Bank to attend a day of consultation on the Nam Theun 2 dam  project, the Lao Movement for Human Rights (LMHR) delegation came away dissatisfied with the answers they were given.

(For the attention of the Chairwoman of the session, Corinne LePage)

Invited by the World Bank to attend the day of consultation on dam project Nam Theun 2 on Tuesday, 07 September in Paris, the Lao Movement for Human Rights (LMHR) delegation came out of that meeting dissatisfied by the answers that were given, disappointed by the attitude of the authorities of the Lao People’s Democratic Republic
(LPDR) and of the leaders of the NTPC Consortium, extremely preoccupied by the consequences of this project, and more than ever convinced that the development of Laos cannot be achieved without freedom, democracy, a genuine political will, and without good governance, as is unfortunately the case right now in Laos.

Is NT2 a good project for Laos?

First of all, the LMHR – one of the organizations of the Lao diaspora, which counts nearly one million people (one Laotian out of five) – feels that everything was settled “too quickly,” and that the consultations (Bangkok, Tokyo, Paris, Washington, Vientiane) were organized only to give “good conscience” to the deciders and the LPDR government, considering the numerous risks of this controversial project, which has been dragging
on since the early 90s.

When hearing the protagonists praise the “benefits” of this hydroelectric project for the “Lao people,” one can wonder why these promoters feel the need to justify themselves to the world if this dam is to be so “beneficial” to Laos. And why are they having such a difficult time convincing the World Bank and the environmental protection organizations?

Indeed, project NT2 (which was to be completed since 1999 according the LPDR government’s plan) has suffered may setbacks and sudden starts: increasing of power (from 680MW, to 900 and then 1.070MW), increased costs (from $1.000 to $1.200
and then $1.400), withdrawal of the Australian partner (Transfield International, who was the leader of the project then) and of Jasmin International, temporary withdrawal of EDF (July-October 2003), change of name of the consortium from “Nam Theun 2 Electricity Consortium” (NTEC) to “Nam Theun 2 Power Company Limited” (NTPC), forced revision
of the technical, economic, and environmental data, “public consultations” in Laos between April and July 1997 requested by the World Bank . . . without mentioning the (bad) surprise revealed at the meeting held on 07 September 2004 in Paris: a mere “25 million dollars net per year” for the LPDR during the first years, as opposed to the 250 million per year promised before the signature of the sales agreement with the sole client, Electricity Generating Authority of Thailand (EGAT) . . .

The announcement of the revenues, which are of an amount ten times below than that expected for the LPDR – made by Christian DELVOIE, person in charge of the World Bank (AFP, 09/07/04), as well as Somdy DOUANGDY, Vice Finance Minister of the LPDR (RFA 09/08/04) – seems to bring the only answer to the fundamental question: Is NT2 a good
project for Laos?

The questions that the LMHR asks itself are the following: for a net revenue of 25 million dollars per year, is it judicious to rent Nam Theun for 25 years to a Consortium for the building of a dam, in which the LPDR would have put in nearly 500 million dollars that it acquired through loans? Is it wise to stake on a dam, which delayed of 10 years a series of programs for the development of the country? For 25 million dollars a year, is it necessary to build a dam to fulfill the needs of a unique foreign client? For 25 million dollars a year, is it necessary to build a dam that will create an artificial lake of 450km2 and
permanently double the water volume of the Xé Bang Faï, on the banks of which nearly 150.000 villagers live?

Is NT2 the only alternative for development in Laos?

After having heard the representatives of the Lao regime claim again that Nam Theun 2 was the “only alternative” to fight poverty, the LMHR is raising questions as to the attitude and the real intention of the leaders of the Unique Party. In this matter, it is clear that the LPDR government did everything to force the deciders to adopt this “juicy”
project.

Indeed, without waiting for the World Bank’s decision, the Phatthana Phoudoï Company (controlled by the army) had started cutting off trees in the reservoir zone since the 1990s. It seems that the receipts of the selling of this wood, common property of the Lao People, have never been paid in to the budget of the State, and that the only beneficiaries of this money were the army and the high ranked members of the regime. What is more, even before receiving authorization from the World Bank, subcontracts were divided between
the “clans” in power for the building of access roads, of lodgings for the engineers and technicians from abroad, of host villages for relocated people . . . Some of these construction works have even been already completed.

It seems clear that NT2 has become a “personal matter.” a “question of honor” or a “symbol of prestige” for the leaders, to whom “this dam must be built, no matter the cost.”
Accordingly, for the regime in power, Nam Theun 2 has become the essential element in diplomatic, economic or even cultural relations with foreign investors, with the French State or with the government of Thailand.

According to the information obtained by the LMHR, at each visit of the LPDR authorities in Paris, the Nam Theun 2 issue is at the top of the agenda whether at the Elysée or at the Quai d’Orsay.

Moreover, considering the recent events that occurred in Thailand (coverage of the Hmong issue, extradition of 16 Laotians in spite of a contrary judicial decision, increased repression against Lao opponents, commercial and economic agreements in series . . .) the NT2 matter also appears as a determining element in the relations between Vientiane and Bangkok.

At the September 07 meeting, the World Bank infrastructure director for Asia and the Pacific, Christian DELVOIE, was clear: Nam Theun 2 “is not the goose that laid the golden eggs.” This project could act as a “lever” in the struggle against poverty, “this dam lays
a foundation stone, but it is no magical solution.” The words of Mr.

DELVOIE are thus far from the promises made by the Party leaders. As to the claim that this dam would contribute in saving the 6.000 villagers living on the Nakaï plateau from poverty, one could wonder if this mega-project really is the only way and the cheapest way of helping them. The same result could be reached with a more modest, well conceived and well managed rural development program. Since 1990, the LPDR leaders received nearly 7,000 million dollars of aid from the international community to this effect, but these  millions have apparently not been used for such programs and in accordance with the
rules of “good governance.”

Has NT2 been the subject of a real consultation in Laos?

When basing ourselves on the declarations made by the LPDR representatives and by the NTPC Consortium leaders on September 07 in Paris, the consultation was “properly conducted” with the Nakaï villagers.

However, what the promoters of the project did not mention was that the LPDR has been administered since 1975 by a Unique Party regime – which figures among the last five communist bastions along with China, North Korea, Vietnam and Cuba. It is a regime which, behind the smiles and fake politeness destined to the donators and the tourists, does not tolerate any kind of freedom of expression, nor any freedom of opinion, nor free press. In the LPDR, public criticism of the leaders is punished, and every public protest outside the Party is forbidden.

Everything is under the tight control of the Unique Party, from the top of the State to the smallest “village committee.” To the LMHR, it is clear that the “consultations” of the villagers were conducted by the Party through its satellite organizations: Lao Front for the
Reconstruction, Lao Women Union, Revolutionary Youths, village committees . . . In these conditions, there is little chance that the villagers really know this project and freely  expressed their opinion upon the matter.

At the meeting, certain officials of foreign NGOs operating in the LPDR stated that the Nam Theun 2 project was “well understood and had the support” of the population. These statements, certainly made in good faith, are still quite surprising. It must also be recalled that the only NGOs tolerated in the LPDR are those which approve and go along with the orientations of the Party. Within the LPDR, “visa renewal” remains a widespread dissuasion weapon.

Seeing the posters full of idyllic drawings that were given to the villagers, and praising the “five choice of activities” that will be offered by the Nam Theun 2 dam (cultivation in the new villages, stock breeding, fishing in the new reservoir lake, taking part in forest  activities, “other activities”) it can be said that these are promises of a “greater future” and “better days” in Nakaï.

To a Thai expert, Dr. Anek NAKHABOUT, in charge of the NT2 “local information”  campaign (interview aired on 13 September 2004 on Radio Free Asia), the villagers of the
Nakaï region and those leaving on both banks of the Xé Bang Faï river “do not have any precise idea of the long term consequences of this dam.” To this expert, the villagers have no idea of what a 450 km2 lake represents in this region of the plateau, and do not find anything new, except for a “stricter regulation,” in the activity program submitted by the government, as these same activities (cultivation, fishing, stock breeding, picking up of products of the forest…) have, since long, been part of the daily tasks of these villagers of the Nakaï plateau . . .

Will NT2 contribute to “good governance” and democratic reforms in Laos?

“One of the keys of Democracy is the transparency of the use of public funds,” which is why “it is essential that the commitments made in this area be kept”: it is with those words that the chairwoman of the session, Corinne LEPAGE, moderator of the debate, ended the meeting held in Paris. The LMHR, whose first mission is to defend and promote freedoms and human rights, approves without any reservation and totally shares the statements of the former French Environmental Minister.

To the LMHR, the central question is the following: can a project such as Nam Theun 2 benefit the country and the Lao people without a setting of peace, security, pluralistic democracy, social justice and good governance?

When retracing the historic of this project, serious doubts can be raised on this matter. Indeed, the preparatory work of the project was made on the sly – within the framework of the “58 Dams Program” revealed in 1994 by the LPDR government, and intended to make Laos “the Kuwait of South-East Asia” and the “driving power of the peninsula.” As to the “public consultations” process, it did not contribute to a re-establishment of the  freedom of expression and of the press in the country. On the opposite, this process turned into a propaganda campaign controlled by the Unique Party’s machinery, with the aim of imposing NT2 to the villagers and the Lao population as a whole.

The message given by the Lao representatives at the August and September 2004 “consultations” is quite revealing: “Our Laos is a very poor country that needs revenues and international aid in order to get out of poverty at the dawn of 2020. We do not have any other choice, any other alternative than project NT2 to raise the living standard of
the Lao people, 70% of which still live today with less than 2 dollars per day . . .” Such remarks only make sense if the leaders in power for nearly 29 years now acted in  accordance with principles of good governance, social justice, and a real concern of the interest of the people in the management of the country. However, the NT2 promoters,
the representatives of the World Bank or of the Asian Development Bank, like the NGO officials and diplomats to the LPDR, know in which (privileged) conditions the leaders of the regime and their close ones live, and know perfectly well to what extent corruption goes in the LPDR.

To the LMHR, the building of a 1.4 billion dollars dam – which will create a 450 km2 in the primary forest zone to satisfy the energy needs of a unique foreign client, and which will bring a yearly revenue estimated at 25 million dollars on the short and long run – certainly
is not the only alternative to raise the standard of living of the Nakaï plateau villagers, and to protect the flora and fauna of the area.

Consequently, the LMHR expresses its greatest reservations on this project, of which the political, as well as socio-economic and environmental risks have not yet been exposed clearly and objectively to the Lao people. It calls out to the principal deciders – the World
Bank, the Asian Development Bank, the French government through EDF, the United States, Japan and notably Thailand – for them to respect every point demanded by the World Commission on Dams.

The LMHR invites the principal deciders to request from the LPDR authorities every
necessary guarantee so as to ensure that project Nam Theun 2 can genuinely contribute to the promotion of freedoms and human rights in Laos, and so that it can be a springboard towards democratic reforms, good governance and the Rule of Law for the Lao people.

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