Three Gorges Probe
October 15, 1997
General Electric shareholders are getting involved in the riskiest and most destructive dam project ever, according to seven environmental groups, representing nearly 900,000 supporters across North America. Their message was sent in letters to the largest shareholders in General Electric Company, after it was announced last month that General Electric Canada, a wholly-owned subsidiary of Connecticut – based General Electric Company, was awarded a contract to supply turbines and generators to the Three Gorges dam project in China.
Probe International, a Toronto-based environmental group, that has warned about the high costs of the dam for the last decade, and one of the signatories to the letter, said it believed that investors should be aware of the concerns eminent scientists, engineers, economists and environmentalists have raised about the dam. The letters were also sent to socially responsible financial advisors and mutual funds, and financial research and rating institutions. They were asked to consider "whether the human rights abuses, environmental destruction, and economic risks associated with the Three Gorges project are consistent with [their] investment policies."
Since the beginning of its development, the dam has met with opposition and criticism. Proponents of the dam claim it will generate needed electricity, provide flood control and ease navigation on the Yangtze. However, international experts predict that the 2 kilometer – wide dam, which is being built over several seismic faults, will actually cause flooding and disrupt navigation. In addition, the Yangtze’s massive silt load poses a significant risk of severe sedimentation that could render the reservoir useless for power production. The forced resettlement of more than 1.3 million people, without the opportunity for public review and due process, will lead to great civil unrest. According to an internal Chinese security document, leaked in 1995, "civil disputes, violent fights, and massive armed melees" are expected during the forced relocation at Three Gorges. To deal with this public opposition, the ministries of Public Security and State Security have been directed to strengthen "the combat-readiness needs of all units in the Three Gorges area" and "to enforce a swifter and heavier punishment policy, especially against any conspiracies aimed at disturbing the construction of the Three Gorges dam."
Of particular interest to financiers, may be the fact that this project has suffered unceasing economic censure. In 1993, the world’s foremost dam-building institution, the United States Bureau of Reclamation, withdrew from the project after supporting it for 50 years, stating that the dam is "not environmentally, or economically feasible." In 1996, the U.S. Export-Import Bank decided against financing American firms seeking Three Gorges contracts because the dam failed to meet the bank’s environmental guidelines. Even the World Bank, by far the largest public financier of dam projects worldwide, has warned that the pool level of the 660 kilometer – long reservoir will not be an economically viable proposition.
To reduce its reliance on coal, China could meet its energy needs more quickly and at lower cost with super-efficient combined cycle power plants – a technology more environmentally benign and commercially viable than the highly controversial Three Gorges dam.
Signatories to the letters, including Sierra Club USA, Defenders of Wildlife, Friends of the Earth USA, International Rivers Network, OPIRG – Carleton, The Dam – Reservoir Working Group and Probe International have received enthusiastic responses from socially responsible financial advisors and fund managers. Patricia Adams, Executive Director of Probe International, contends that "What’s bad for China could be bad for GE. We think shareholders should know about the risks their company is taking."
Categories: Three Gorges Probe