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The New "Battery of Asia?" (Page 2 of 2)

The Mekong River countries– Thailand, Cambodia, Laos and Vietnam– had agreed last December not to proceed with Xayaburi until a trans-boundary impact study was made among the communities living downstream.

The World Wildlife Fund and International Rivers want Xayaburi scrapped, labeling it an environmental disaster that will alter the river’s patterns and impact on fish catches.  This came amid increasing concerns over Chinese dams built further upstream that have already been blamed for recent droughts along the Mekong with water shortages causing conflict within farming communities.

Pressure from the United States and Australia – both significant financial backers of the MRC – added to the momentum over Xayaburi. Japan offered to fund the impact study but to date it has not been initiated. Laos paid lip service to these concerns but proceeded with construction anyway.

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This probably has more to do with Thailand. Thai company C.H. Karnchang has been contracted to construct the 1,206-megawatt Xayaburi dam over the next eight years while the Electricity Generating Authority of Thailand (EGAT) will buy 90 percent of the power on completion.

90 percent of the electricity generated at Xe-Namnoy will also be sold to Thailand while some reports suggest deals are being made to sell power to Cambodia.

This has changed the geopolitical makeup of the region with deals between Laos and Thailand upsetting traditional ties between Laos and Vietnam. Hanoi – with food security in the Mekong Delta as its primary concern – had been unusually vocal in its opposition to Xayaburi.

The controversy has also left its mark on the other side of the world. Finnish engineering company Pöyry Group produced a report claiming designs for Xayaburi had met dam construction standards as laid down by the MRC.  Cambodia and Vietnam rejected the report a year ago.

Pöyry was then forced to issue a public statement denying allegations made in a complaint filed to the Finnish government by 15 civil society groups claiming Pöyry had engaged in unethical behavior in the Mekong region.

They said Pöyry’s actions had violated OECD guidelines for Multination Enterprises, a global standard for corporate responsibility that all Finnish companies are obliged to adhere to.

Further, under the Laos government’s own laws regulating development projects it must publicly release all assessments made on such projects. Failure to release any reports on Xe-Namnoy would be a breach and should be a major concern for contractors and bankers prepared to sign off on the deal.

Only Laos seems unequivocal in its right to get rich quick by damning the Mekong. Few others with any modicum of common sense seem to agree.

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