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Laos dam just the latest grand project to show disdain for the environment and local opinion

Andrew Preston
Financial Times (UK)
March 3, 2005

Making a mockery of the World Bank’s decision-making process, construction on the project has already begun.

Sir, Peter L. Stephens of the World Bank and Xaypaseuth Phomsoupha of the Lao government (February 25) both point out that the Lao People’s Democratic Republic has “few ways to earn money” and that the Nam Theun 2 dam project has been assiduously studied, with “many years listening to the people of Laos.” These points are contentious.


First, questions remain over the extent to which alternative options for revenue generation for Laos have been assessed in detail. The World Bank has produced no study that evaluates Nam Theun 2 against other non-hydropower options that might have more direct impacts on poverty alleviation in Laos; for example, investing in agriculture, community forestry and eco-tourism.

Second, while many studies have been conducted, independent research has shown that much of the information is either inadequate or incomplete. Other studies are still under way and will not be ready in time for a decision by the Bank’s board.

Third, the “many years listening to the people of Laos” applies solely to the 6,000 people on the plateau. Consultation with the tens of thousands of people living downstream of the project began less than a year ago, in May 2004.

If the board of the World Bank is to make an informed decision on whether the benefits of the project justify the considerable social and environmental impacts, studies must be completed; adequate consultation conducted; and mitigation and compensation plans drawn up and agreed prior to the board meeting.

Making a mockery of the World Bank’s decision-making process, construction on the project has already begun. It is difficult to see Nam Theun 2 as anything other than yet another in the long line of infrastructure projects where serious impacts on local communities and the environment are treated as secondary to the project proponents’ desire to see construction at whatever cost. Big infrastructure projects of this nature require a clear, step-by-step decision-making process that assesses the full range of impacts; secures the demonstrable acceptance of affected communities; and
thereby provides the basis for an informed decision.

A model for such a process already exists in the report issued by the World Commission of Dams in 2000, a commission co-sponsored by the World Bank. Nam Theun 2 demonstrates yet again why the World Bank should be working to turn this model into a global standard.

Andrew Preston, Director, FIVAS (Association for International Water and Forestry Studies), N-0183 Oslo, Norway.

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