Children watch the river at Pak Beng. Photo courtesy of Marcus Rhinelander/International Rivers
Children watch the river at Pak Beng. Photo courtesy of Marcus Rhinelander/International Rivers

Despite the risks, Laos goes ahead with Pak Beng dam

With construction likely to start within months, the people most affected still have little information on the hydropower project

February 11, 2017 6:00 AM (UTC+8)

At the Happy Bar, on the bank of the Mekong River, the Bob Marley tape starts up at the same time every night after the tourist boats dock. Reggae standards float out over the mountain jungle, tired but soothing with their message of peace, love and positivity.

“Don’t worry about a thing,” Bob sings, as Beerlao bottles clink under colored lights, “Coz every little thing’s going to be alright.”

Residents of the area are worried, though, about the construction of a huge hydropower dam 14km upstream from Pak Beng.

The Pak Beng dam has been on the drawing board since 2007, when Chinese developers and the Lao government signed a memorandum of understanding, and construction is expected to begin this year.

But while various studies and preparatory works were launched years ago, during a visit in January Mongabay learned that few people around the dam had been briefed about the project.

“There’s very little transparency around the development of these projects,” Maureen Harris, Southeast Asia program director at International Rivers, told Mongabay. “Very limited information is available to communities and other stakeholders before the Pprior consultation process is launched. And we know from experience that by that stage the decision has essentially been made and many of the relevant deals are in process or have already been concluded between companies involved.”

Pak Beng, in the northwestern Lao province of Oudomxay, is the overnight stopover on a popular two-day “slow boat” trip down the Mekong to the country’s cultural capital of Luang Prabang, and much of the town’s economic activity is dependent on foreign tourists.

A packed speedboat heading upriver. Project documents are unclear about provisions for small boats like these to pass the Pak Beng dam. Photo by Jenny Denton
A packed speedboat heading upriver. Project documents are unclear about provisions for small boats like these to pass the Pak Beng dam. Photo by Jenny Denton

Tour companies currently lure visitors with promises of unspoiled views of forest-clad mountains, pristine sandbanks, rapids and gorges, but the recently released social impact assessment (pdf) for the dam is optimistic that transforming a large stretch of the river into a reservoir will have a positive impact on the industry. The document concedes the development will lead to “the loss of sand and stone beach scenery,” but argues that, “The dam site will be the new place for learning and … the new tourist site of the Lao PDR.”

Pak Beng is also a district center, with a market and busy passenger transport industry. Speedboat drivers in crash helmets skate the river’s surface at breakneck speed in thin fiberglass vessels with outsized engines, shuttling locals to and from town and between villages. They also ply their trade along the tourist route, 130km upriver to the Lao-Thai border town of Huay Xai and 180km downstream to Luang Prabang.

Whether they will be able to do so after the dam is built is unclear. A suitable lift to enable small craft to use the planned commercial-scale lock is tentatively mentioned in impact assessment documents, but not included in the project’s detailed engineering plans.

[People living downstream, who suffer major negative impacts from dams] in most cases get absolutely nothing

The documents acknowledge the dam will “disconnect the downstream river,” and will have numerous likely impacts both up and downstream. These include the loss of land due to flooding, loss of fisheries, (including “loss of fishing downstream”), reduced fish migration, changes to water and sediment flows, changes to seasonal fluctuations in water levels and to water quality and ecology, and possible contamination of the river during construction.

The livelihood of almost everyone in the area seems likely to be impacted. Guesthouse operators, food sellers, boat owners, fishermen and villagers who cultivate riverside gardens — all depend on the fish, sediment or foreign visitors that the river brings. In the project documents, though, all issues are checked off as being manageable by means of “mitigation” measures, including monitoring, compensation and the setting up of “alternative livelihood systems.”

In November 2016, the Lao government notified the Mekong River Commission (MRC) of its intention to move forward with the Pak Beng dam, setting in motion the six-month-long set of consultation and negotiation processes required for mainstream dams under the 1995 Mekong River Agreement.

The suite of project documents required under Lao law was published online by the MRC in January. Although most of these are now years old and at some points out of date and contradictory (with a variation in project cost, for instance, from US$2.15 billion to US$2.7 billion), they reveal that the 69 meter high, 912-megawatt capacity run-of-river dam would flood the river valley to a height of 340 meters above sea level. The resulting 7,659 hectare reservoir will extend for 97km and flood over 4,000 hectares of forest, village and agricultural land. The project also includes a 1.8km-long fish bypass channel and a lock that will allow 500-metric-ton vessels to transit the dam.

The Pak Beng project is to be developed on a build-operate-transfer (BOT) basis by China Datang Overseas Investment Co Ltd, which has an 81% interest in the special entity set up for the project, with the Lao government controlling the other 19%. And 90% of the power generated will be exported to Thailand, with up to 10% offered to state-owned utility Électricité du Laos (EDL).

The documents make clear that enabling year-round commercial shipping is a significant motivation for building a cascade of dams on this upper section of the Mekong in Laos.

Workers pass a bank of signs in Mandarin titled “Datang (Laos) Pak Beng Hydropower Plant right bank road,” which list the Chinese contractors on the road-building project, along with safety information for workers. Photo: Jenny Denton
Workers pass a bank of signs in Mandarin titled “Datang (Laos) Pak Beng Hydropower Plant right bank road,” which list the Chinese contractors on the road-building project, along with safety information for workers. Photo: Jenny Denton

The consultation process may be just getting started, but across the river from Pak Beng excavators are carving a gash in the forest a few kilometers from the dam site.

At a nearby village visited by Mongabay, communal land had been taken without compensation for construction of a dam road. Most of the villagers fish, and plant rice and vegetables for sustenance, as well as grow small plots of corn for cash in riverbank gardens.

There was surely a bad feeling about the dam, the village headman said, which had already deprived the community of land that supported them and threatened to take more of it.

Visiting officials hadn’t discussed the impacts of the dam itself, and the headman was still waiting to hear if some or all households in the community would have to be resettled.

According to Ian Baird, a professor at the University of Wisconsin-Madison, the problems faced by people displaced from reservoir areas are only the tip of the iceberg.

The almost exclusive focus by developers and officials on flood zones “totally underestimates the scope of the projects,” whose impacts “can [extend] hundreds or thousands of kilometers,” Baird said. People living downstream, who suffer major negative impacts from dams, “in most cases get absolutely nothing,” he told Mongabay by phone.

This may be the case for the Pak Beng project, which has identified 26 villages and 4,726 people as “directly affected,” but budgeted just US$10.28 million of the US$2.7 billion project cost for their compensation and support over 25 years, with most of it directed to resettlement costs for the 203 households who will have to move.

Project documents provide no specific information about the location of US$1.4 million worth of support programs included in the figure.

Mongabay received no response to requests for comment addressed to the Lao Department of Energy Business and project developers China Datang.

The Pak Beng project is part of a dam-building spree by the Lao government. Billing itself as the “Battery of Asia,” the country hopes to transform hydropower potential into export revenue, with the oft-stated aim of escaping “least developed country” status by 2020.

While the country’s dramatic economic growth in recent times has seen the poverty rate fall, at 23% it is still among the highest in Southeast Asia, and child nutrition has hardly improved in two decades, with an estimated 44% of children under five stunted by malnutrition.

“The West would love what Laos has achieved — 7, 8, 9% average economic growth over the last number of years,” Baird said. “But it’s come at a cost. A lot of the non-monetized parts of people’s livelihoods have been disintegrated.”

The number, scale and location of hydropower projects being planned in Laos, and the apparent lack of consideration for their cumulative impacts on the Mekong River basin has alarmed scientists, NGOs, governments and development banks in the region and beyond.
But while the World Bank and Asian Development Bank have publicly distanced themselves from Mekong mainstream dams, Maureen Harris points out, they continue to support them indirectly by promoting regional policies like an energy grid fed predominantly by large-scale hydropower.

According to some sources, energy trading and the ambition to meet Millennium Development Goals are not the only drivers of the dam-building and development agenda in Laos. Anonymous government whistle-blowers quoted in a 2009 Radio Free Asia report said bribery was commonplace on big infrastructure projects, including dams, in Laos. “When many companies bid, they give bribes to officials behind the scene. ‘I have money, you have projects. Let’s go to have lunch together.’ That’s the way it is in Laos,” one of the whistle-blowers said.

View of the Mekong River approaching Pak Beng in Laos, part of a popular riverboat itinerary. Developers claim the Pak Beng dam will be a draw for tourists. Photo by Rob Young/Flickr CC-BY-SA.
View of the Mekong River approaching Pak Beng in Laos, part of a popular riverboat itinerary. Developers claim the Pak Beng dam will be a draw for tourists. Photo by Rob Young/Flickr CC-BY-SA.

A November 2016 report by Global Witness claims that corruption is also rife in large-scale land deals in Laos, with businesses and elites “seemingly able to get away with ignoring national laws designed to safeguard the rights of communities and the environment.”

It’s not just hydropower that’s booming in Laos, but foreign investment across the board, and with it, transport networks. The Pak Beng bridge, which opened in March 2016, as well as being a convenient crossing for dam construction materials and workers, is described by its builders as “an important connection point” in a road transport route running from Yunnan, China, through Laos to Northern Thailand.

Then there’s the plan to dredge, dynamite and dam the middle Mekong into a major commercial shipping channel, enabling 500-metric-ton vessels to make the journey from Simao Port in Hunan, China, to Luang Prabang (and eventually Vientiane) in all seasons.

Around 50km upstream from Pak Beng, in Thailand, activists have been out on the water protesting the planned blasting of rapids and rocky outcrops near Chiang Khong under the Chinese-led Navigation Channel Improvement Project. The scheme recently received in-principle approval from the Thai government but has generated controversy in Thailand, where critics say it will damage the river’s ecology, impact riparian communities and benefit only China.

“Is the function of the Mekong River now to be only economic — for hydropower and the navigation of big ships?” asked Chiang Khong Conservation Group coordinator Jirasak Inthayoth, who predicted that three to four years after the Pak Beng dam is built local fish species would virtually disappear and people’s traditional fishing knowledge would be useless.

Monks crossing a bridge in Luang Prabang province, Laos. Gardens can be seen flanking the riverbanks. Photo by Nancy Butler
Monks crossing a bridge in Luang Prabang province, Laos. Gardens can be seen flanking the riverbanks. Photo by Nancy Butler

In authoritarian Laos, there will be no protests.

At another village upriver from Pak Beng, past stretches of achingly beautiful monsoon forest rising steeply up mountains shrouded in fog, fishing nets were stretched out on the ground to be mended and a woman sat outside her house weaving with bamboo.

Villagers live a comfortable and easy life, the headman said. They fish from the river, grow corn and other vegetables in their gardens, and cultivate orchards of coconut, mango, jackfruit and tamarind trees.

They have been aware of the planned dam since 2013 and were resigned to the fact that some households would have to relocate. He was prepared to accept resettlement, the headman said, if the process was well planned and supported. For example, he suggested fruit trees should be planted in the new areas early enough to be bearing fruit by the time people are moved in.

Here too, communal land had been taken without compensation for a dam-related road, and villagers weren’t happy about the resettlement arrangements outlined to them so far. Compensation figures discussed by project officials had been low, and the officials made no mention of replacing land for cultivation that would be lost.

A lack of adequate replacement agricultural land was an issue already impacting heavily on people displaced by the Xayaburi dam, Harris told Mongabay.

Rice paddies in Oudomxay province, Laos. The lack of available cultivable land is one of the many factors complicating plans to resettle villages that will be inundated when the dam is built. Photo by Nancy Butler
Rice paddies in Oudomxay province, Laos. The lack of available cultivable land is one of the many factors complicating plans to resettle villages that will be inundated when the dam is built. Photo by Nancy Butler

The Pak Beng project documents acknowledge that suitable land for resettling people is “very limited” in Laos and acquiring it “in many cases generates other environmental and social impacts.”

They also note that 69% of average household income in the area was derived from agriculture. Nevertheless, the consultants write that they “are looking forward to shifting people from a subsistence economy towards a market-oriented economy.”

Of the seven villages identified as requiring full or partial resettlement, it appears only those where people can move to a higher elevation on their own land are likely to have access to sufficient agricultural areas.

The Resettlement Action Plan shows that at the three locations where resettlements are planned in new places, even the parcels earmarked for housing were already being used.

But at two of these the “host communities,” who had no title to the areas, “agreed to return” them on condition of receiving compensation and being included in support programs.

An old man in one riverside village said he was hopeful the dam would improve options for young people by bringing electricity and a functioning road. But, he asked anxiously, with land lost and their livelihoods affected, what would the community do if the government didn’t look after them? Because the village was already poor.

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