The Economist 26 July 2012
By T.F. | XAYABURI and VIENTIANE
A DENSE cloud of diplomatic doublespeak hangs over the turbid waters of the Mekong. An amazing week of conflicting statements, stark contradictions and confusion has made everything about the site of a controversial dam project at Xayaburi, in northern Laos, as clear as mud.
The Mekong, which courses through the very heart of inland South-East Asia, is home to the world’s largest freshwater fisheries, about 800 different native species. Its rich biodiversity is second only to the Amazon’s. Through fishing, aquaculture and irrigation, it sustains 65m people.
Since September 2010 there has been an ongoing consultation process among the four riparian countries party to the Mekong River Commission (MRC)—Laos, Cambodia, Vietnam and Thailand—about whether the Xayaburi project should be approved or blocked. The dam would be the first of its kind. The government of Laos has repeatedly claimed it would heed the strong objections lodged by Cambodia and Vietnam, who fear that the dam’s side effects could decimate fisheries and reduce the flow of sediment needed by farmlands downriver.
There was a current of déjà vu swirling around Phnom Penh this month. On July 13th, at an annual summit for the foreign ministers of ASEAN, the envoy from Laos made a familiar declaration: that work on the Xayaburi dam has been suspended, pending further studies. Reuters, understandably, took this to be an official statement of fact from the Laotian government.
Only three days later Viraphonh Viravong, a deputy minister of energy, contradicted the foreign minister’s statement. A tour of the site, sponsored by the government of Laos, served to rubbish the foreign minister’s statement at ASEAN. As Mr Viraphonh made clear to a party of invited visitors, including MRC officials, diplomats and a few technical experts on fisheries, groundwork is going ahead after all, without any waiting for a further assessment of the project’s impact on the river.
In the MRC’s judgment, “the project is in an advanced preparation stage with…exploratory excavation in and around the river completed.” International Rivers, an NGO, made their own unofficial investigation of the site in June, observing that the river had already been dredged and widened. This despite the fact that in December 2011 the four member-states of the MRC had agreed on the need for further study of the dam’s prospective effects on the environment. The understanding was that no dam would be built until the study was completed.
Failure to halt the dam at Xayaburi would deal an enormous blow to the credibility of the MRC. Its authority depends on the possibility of enforcing co-operation between its members. Moreover the dam’s construction could trigger a major diplomatic rift between the four states themselves.
The initial stages of its construction are visibly under way. So has Laos decided to renege on its international commitments?
This is where things get murky. Mr Viraphonh claims that what observers witnessed was only “preparatory work”. He says the actual construction of the dam has not begun, nor has the river been blocked.
But fisheries experts say that long before the river is fully blocked, existing construction will disturb the riverbed enough to affect fish populations significantly. And even while the river flows, construction work will change the downstream flow of sediments.
The Laotian government has appointed two foreign consultants to help make its case. Pöyry Energy, based in Switzerland, and the French Compagnie Nationale du Rhône are trying to convince Cambodia, Vietnam and other sceptics that the Xayaburi dam will be benign.
Both firms argue that “fish passes” or weirs can be built to enable 85% of the river’s fish to get past the dam’s turbines. According to their plan, the fish could swim happily up or down the Mekong. But this claim has never been put into practice. Eric Baran of the World Fish Centre in Phnom Penh joined last week’s trip to the dam site. He observed that “there has never been a successful fish pass built for a dam the size of Xayaburi, anywhere in the tropics.”
Pöyry Energy’s previous report, a compliance review of the Xayaburi dam in 2011, was widely faulted. More recently, the firm’s parent company has been blacklisted by the World Bank for an unrelated charge of corruption and its CEO has resigned.
Laos might nonetheless esteem the views of its Western consultants. But it heard very different advice from America’s sectary of state, when she made her recent visit to the region. “I’ll be very honest with you. We made a lot of mistakes,” Hilary Clinton said in her opening remarks to the ASEAN summit. She was talking about dams built in the United States. “We’ve learned some hard lessons about what happens when you make certain infrastructure decisions and I think that we all can contribute to helping the nations of the Mekong region avoid the mistakes that we and others made.”
America has its own concerns too. It might worry that if the Xayaburi project goes ahead, China is set to build at least three more dams further down the Mekong, bringing its commercial interests ever deeper into the sub-region.
Cambodia’s minister for water resources, Lim Kean Hor, recently send a letter of protest to the Laotian government calling on them to “halt all preliminary construction and respect the Mekong spirit of friendship and international co-operation.”
The Mekong delta is Vietnam’s rice-bowl. The government has been arguing all along for a ten-year moratorium on dam construction on the river, basing its case on an assessment commissioned by the MRC and finished in 2010. Vietnamese scientists have warned that dams upstream would lead to devastating losses of fisheries and rice productivity and to the salinisation of cropland.
And finally NGOs representing people from the eight provinces in north-east Thailand are about to file legal action in the their country’s courts. They mean to force their national government to review the contract that the state electricity body signed, which obliges it to buy 95% of all the power from the Xayaburi dam.
Thailand’s government has already endorsed the position that Xayaburi dam should be put on hold pending further studies, though it has done so relatively quietly. If Vietnam’s and Cambodia’s conflict with Laos escalates, Thailand’s role will become critical.
The dam is financed by the four major Thai banks. The dam-builder is a Bangkok-based corporation, Ch. Karnchang. The north-eastern Thais’ campaign is aimed at persuading Thailand’s government to stop the project by blocking the banks’ loans. Such indirect tactics might be the only way left to save the MRC—and to preserve some semblance of international co-operation along the Mekong.