Xayaburi dam Laos

Located in Northern Laos, the proposed Xayaburi Dam is the most advanced of eleven large hydropower dams planned for the Lower Mekong River. The US$ 3.8 billion project is expected to generate 1,260 megawatts of electricity, around 95% of which will be exported to Thailand. According to the 1995 Mekong Agreement, a treaty on transboundary water cooperation, the governments of Cambodia, Laos, Thailand, and Vietnam must jointly approve the project before it can proceed.

The Mekong River is home to the world's largest inland fishery and hosts a treasure trove of biodiversity. The Xayaburi Dam would cause significant and irreversible damage to the river's ecosystems and the millions of people in the region who depend upon the river's rich resources for their livelihoods and food security. The large environmental and social risks of the dam and the need for further study have been documented in an ever-growing number of scientific studies produced by the Mekong River Commission (MRC) and other experts. Because of significant gaps in baseline data about the Mekong River's ecosystems and people, scientists warn that the regional governments are not in a position to make an informed decision on the dams at this point in time. These concerns were outlined in the findings of the MRC's 2010 Strategic Environmental Assessment, which recommends deferring all decisions over the Xayaburi Dam and other Mekong dams for a period of ten years.

Despite the concerns raised over the dam's considerable transboundary impacts and the significant opposition expressed to the project by the region's people, construction activities began in late 2010. Laos called these activities “preliminary work” for several years and even claimed at times that construction was delayed. On 7 November, 2012, Laos and Thailand held an official groundbreaking ceremony after claiming that Cambodia and Vietnam now support the project. At the MRC's Council meeting in January 2013, Cambodia, Vietnam, and the MRC’s donor governments all continued to raise concerns about the project. According to the current construction schedule, the project's coffer dam will be completed by May 2013.

• Xayaburi Dam: Timeline of events (last updated Feburary 2013)
  

On 4 May 2007, a Memorandum of Understanding (MoU) for the proposed Xayaburi Dam was signed between the Government of Laos and the project's lead developer, Thailand's Ch. Karnchang. A Project Development Agreement was signed between these two actors in November 2008, and the dam's Environmental Impact Assessment (EIA) was first submitted to Laos for approval in February 2010. The Final EIA report, along with the Social Impact Assessment, was finalized in August 2010. The EIA was criticized for failing to assess baseline data on ecosystems, fish migrations, and people's livelihoods. Additionally the EIA only examined impacts 10 km downstream from the dam site, although the impacts are expected to extend hundreds of kilometers into neighboring countries.

As required under the 1995 Mekong Agreement, the Government of Laos submitted key documents to the Mekong River Commission in September 2010 and initiated the MRC's "prior consultation" process with Cambodia, Thailand, and Vietnam. In April 2011, the four governments met to discuss the project. As reported on the MRC's website, the representatives from Cambodia and Vietnam expressed concerns about the Xayaburi Dam's transboundary impacts and requested further information. The governments agreed to defer a decision on the project to a future Ministerial-level meeting.

After the April 2011 meeting, the Government of Laos hired Finnish consulting company Pöyry Energy AG (which is based in Switzerland) to review the project's compliance with MRC environmental standards. The report was completed in August 2011 and recommended that the dam move forward, despite identifying many gaps in knowledge about the full extent of potential impacts. Although the report was not disclosed, a leaked copy revealed that Pöyry's report was not credible due to significant scientific errors and inconsistencies.

Although the governments had not reached agreement on how to proceed, representatives of the Government of Thailand began pushing the project forward. Thai project developer Ch. Karnchang continued preliminary construction on the dam site. In October, the Thai Ministries of Energy and Natural Resources gave permission to the Electricity Generating Authority of Thailand (EGAT) to sign a power purchase agreement with the Xayaburi Dam's developer. Four Thai banks-Bangkok Bank, Kasikorn Bank, Krung Thai Bank, and Siam Commercial Bank-all provided financing to the project.

At a December 8, 2011 meeting, Ministers from the four governments met to discuss the project. At this meeting, they agreed to conduct further study on the impacts of the proposed Mekong dams. Laos did not publicly agree to delay construction on the Xayaburi Dam while the study is underway, although many observers believe that a delay has been agreed. Meanwhile, preliminary construction on the Xayaburi Dam continued.

On 7 November, 2012, Laos and Thailand held an official groundbreaking ceremony after claiming that Cambodia and Vietnam now support the project. At the MRC's Council meeting in January 2013, Cambodia, Vietnam, and the MRC’s donor governments all continued to raise concerns about the project. EGAT's power purchase agreement remains in effect, and the Thai banks have not withdrawn financing.

Given the Xayaburi Dam's scale of impact on the region and the fact that it could provoke further tension within the region, Thai banks should suspend their financing to the project. Any such financing is likely to carry significant and costly environmental, social and economic risks, subject the banks to intense public opposition for many years to come, while also jeopardizing the banks' reputation both at home and abroad. All construction on the Xayaburi Dam should immediately stop to respect the regional decision-making process at the MRC.

Irreversible damage to the Mekong River's aquatic resources and fisheries is a direct threat to the livelihoods, culture and food security of millions of people who live along the river's banks. If built, the dam would forcibly resettle over 2,100 people, some of whom would be displaced for the fourth time in 15 years. In addition, the dam will directly affect the lives of more than 202,000 people living near the dam through adverse impacts to their livelihoods, income and food security due to the loss of fisheries, agricultural land and riverbank gardens, an end to gold panning in the river, and increased difficulty in accessing products from the forest, such as wild banana flower and rattan.

Given Laos' poor record of enforcing environmental laws and meeting bare minimum social safeguards commitments, the communities who will be impacted are likely to follow in the footsteps of other impoverished dam affected communities in the country. Furthermore, as the full social and environmental costs associated with the dam have yet to be adequately examined by the dam developer, the true costs of the project have yet to be known and the social and environmental programs that will be needed to mitigate and compensate for the dam's impacts have yet to be calculated.

The Xayaburi Dam brings with it many envrionmental issues. In short, the dam will cause irreversible and permanent damage to the river's habitat and ecosystem, which in turn will impact the local communities. The Mekong River Commission's 2010 Strategic Environmental Assessment on Mekong mainstream dams warns of a future of grave ecological destruction should the cascade of dams be built.

Some key findings of the strategic environmental assessment include:

• The cascade of lower Mekong mainstream dams would turn 55% of the Mekong River into a series of reservoirs.

• The dams would block important fish migration routes, resulting in significant fishery losses of between 700,000 to 1.4 million tonnes, estimated to be worth between US$476 million and US$956 million.

• Fisheries are the main source of protein in the region, but Cambodia and Laos would be the hardest hit, as little to no alternatives exist. Livestock production would be unable to compensate for the loss.

• By inundating agricultural land and blocking vital sediment and nutrient flows, the dams would reduce agricultural productivity by more than $25 million/year.

• As a biodiversity hotspot, the dams would lead to permanent losses of species of global importance. Some areas of the Mekong would see losses of up to half the recorded species, along with the extinction of flagship species such as the Giant Mekong Catfish and Irrawaddy dolphin.

• The dams would contribute to growing inequality in the region, as region's poor would suffer the greatest impacts.

• Many of the risks associated with the dams cannot be mitigated and would represent losses of economic, social and environmental assets

• Recommendations include a 10-year deferment of all plans for dams on the Mekong mainstream, the full translation and systematic distribution of the SEA report, further studies to be undertaken, and that the mainstream never be used as a test case.

• As the EIA's scope only considered a ten kilometre radius below the dam site, the report failed to provide adequate consideration of the transboundary impacts of the project. Furthermore, as the report's baseline information and data was found to be insufficient, many of the dam's environmental and social impacts have yet to be fully identified and many of the dam developer's proposed mitigation measures remain unproven and inadequate.

The project will forcibly displace 2,100 people and negatively affect an additional 202,000 people who have had no say in decisions about the project. As the project failed to adequately consult the people living near the dam site and the limited consultations that did occur were meaningless as key project information was not provided to participants, the dam has failed to meet minimum standards for consultation with directly-affected communities. Furthermore, consultation within the region has also failed to meet minimal standards as the project's Environmental Impact Assessment (EIA) report was only released to the public in mid-March 2011, weeks after public consultations on the dam were held in Thailand, Cambodia and Vietnam.