Laos, Mar 23 2010
Laos' largest and most
controversial hydropower project, Nam Theun 2,
began full operation last week in violation of legal obligations to provide
compensation and livelihood restoration to affected communities. In an attempt
to avoid its obligations, the Nam Theun 2 Power Company (NTPC) called last
week's commencement of power production "commercial export" of electricity
rather than "commercial operation" which would require compliance with
Concession Agreement provisions.
Theun 2 is being financed by the World Bank, the Asian Development Bank and a
host of other public and private financial institutions like the Equator
Principle banks ANZ,
KBC, ING group, Bank
of Tokyo-Mitsubishi UFJ, Crédit
Agricole CIB, and Société
Générale. These institutions have maintained their support for the project
despite violations of their policies and the project's Concession Agreement.
For example, last week's commercial operation started before resettled communities
received irrigated land and before downstream communities received compensation
for flooded gardens and alternative water supply sources, to which they are
Matsumoto, Lao Program Director of International Rivers, said, "The Nam Theun 2
Power Company is operating the dam without complying with its
Concession Agreement. The project is violating people's
human rights by preventing access to clean water and by destroying critical
food sources without providing compensation."
On the Nakai Plateau,
where 6,200 people have been resettled to make way for the reservoir, villagers
have not been provided with irrigation systems in violation of legal
commitments made in the project's Concession Agreement.
The project is also affecting around 120,000 people
living downstream along the Xe Bang Fai River. Since the project started full
operation, the water level of the upper Xe Bang Fai River has increased by 3.6
meters, as noted during International Rivers' visit to the area. The power
company has warned communities living along the Xe Bang Fai not to drink the
river water because it is contaminated. However, replacement groundwater pumps
provided to communities are not functioning or the groundwater is unsuitable
for domestic consumption. Last week, only two groundwater pumps
out of seven were working in Navan Tai Village,
and in Mahaxai Tai Village
only two pumps were working. Villagers in Boueng Xe Village were told that the groundwater
contained elevated levels of iron making it unsuitable for human consumption.
In addition, riverbank vegetable gardens along the
Xe Bang Fai have been flooded by the rising river, but communities have not yet
received compensation, in violation of World Bank policy.
Moreover, serious erosion has been occurring
downstream along the Xe Bang Fai River as a result of the fluctuating water
levels since December 2009 when NTPC began test operations. No compensation for
the riverbank gardens that were washed away has been paid to the villagers.
says, "As funders of Nam Theun 2, the Asian Development Bank, the World Bank,
the European Investment Bank and the Equator Principles Banks have an obligation
to ensure that their requirements are upheld and that promises to Lao villagers
are kept. Dam operation should be suspended until the Nam Theun 2 Power Company
complies with its legal agreements."
For more information:
Video (9 min.)
program: "Risky Business"
BankTrack dodgy deal
page on Nam Theun 2 Dam
Rivers' website on the Nam Theun 2 Dam
Key issues to be addressed before Nam
Theun 2's commercial operation begins (September 2009). Look here.