Xayaburi Dam: A Closer Look at How Laos Got to “Go”

Kirk Herbertson
Girl digs for gold at Xayaburi Dam site
Girl digs for gold in rocks removed from Mekong River at the Xayaburi Dam site

On November 5th, Laos announced that the controversial Xayaburi Dam will go forward. While hosting the Asia Europe Summit in Vientiane, Laos told journalists that a groundbreaking ceremony would take place and construction on the dam would soon begin. The Thai government also expressed its support for the project. The media reported on the signing of various business contracts. Days later, construction began in the Mekong River. 

Laos’ downstream neighbors are concerned. Cambodia and Vietnam have frequently called for Laos to study the transboundary impacts of the dam, a request that was never met. Within the past month, both governments have insisted that these studies should take place before construction moves forward. So the biggest surprise of last week came when Laos announced that the Xayaburi Dam now had the support of the Cambodian and Vietnamese governments. 

After only a few months of studies, Laos claims that it has “addressed most of the concerns” of neighboring countries by redesigning the dam. Cambodian and Vietnamese leaders are unsure how to react. There are conflicting reports about whether the two governments will continue to oppose the project. Meanwhile, many of the donor governments that invested millions of dollars to promote diplomatic cooperation in the Lower Mekong region – such as Australia, Finland, Japan, and Germany – have not reacted to the latest news. Only the United States has expressed its concern that “the extent and severity of impacts from the Xayaburi dam on an ecosystem that provides food security and livelihoods for millions are still unknown.”

When world leaders gather again for ASEAN’s East Asia Summit on November 18th, it may be the last chance for concerned governments to take a strong stand.

Currently, the region faces a dangerous precedent. The Xayaburi Dam is only the first of 11 dams that are proposed for the Lower Mekong River, nine of them in Laos. Altogether, over 60 million people live along and depend on the Mekong River. A well-regarded study prepared for the Mekong River Commission (MRC) in 2010 concludes that these dams would threaten the food security of millions of people and would decimate the fisheries and agricultural industries that are such a key part of Cambodia’s and Vietnam’s economies. Laos and Thailand would suffer impacts as well. You would think that such enormous economic impacts and trade-offs would merit a more cautious approach, and that the region’s governments would be willing to set aside time to reach a mutually agreeable vision for the future of the Mekong River.

Instead, Laos and Thailand have begun a race to grab the natural resources of the Mekong River without concern for how this will affect their neighbors or even their own citizens. Unless something changes quickly, Xayaburi-style diplomacy is now the precedent for the future. Several other Lower Mekong Dams are already in the pipeline.

How did we get to this point? Looking back, here are a few highlights from Laos’ and Thailand’s playbook:

Out-race the science.

The first step in building the Xayaburi Dam was to ensure that science was not a part of the discussion. In July 2010, the Mekong governments received the results of an MRC study that identified significant economic, environmental, and social concerns with building the 11 Lower Mekong Dams. The study recommended a 10-year delay on any decisions to build dams, so that further studies could be completed. Before the MRC governments could meet to discuss the study’s findings, however, Laos quickly proposed the Xayaburi Dam project for discussion at the MRC in September 2010. Discussions about the MRC’s study were set aside, and the MRC’s “prior consultation” for the Xayaburi project began.

Evade neighboring countries’ requests.

During the prior consultation, Laos shared its environmental impact assessment of the Xayaburi Dam project with the other MRC governments. The study only examined impacts 10 kilometers downstream of the project, whereas experts believe the dam’s impacts will stretch hundreds of kilometers into neighboring countries. When Cambodia and Vietnam requested a transboundary impact study so that more informed discussions could take place, Laos refused. Thailand remained silent.

A last look at the free flowing Mekong River near the Xayaburi Dam site?
A last look at the free-flowing Mekong River near the Xayaburi Dam site?

Without telling Cambodia or Vietnam, Laos hired Finnish consulting company Pöyry in May 2011 (and later Compagnie Nationale du Rhône, or CNR) to produce a study that recommended moving forward with construction despite the shortage of data on the dam’s impacts. Over the next year, Laos persistently marketed Pöyry’s and CNR’s work as evidence that the dam would not have transboundary impacts. Scientists and regional governments were skeptical, especially because the technologies that Pöyry proposed are completely unproven in the Mekong River or any other tropical river.

Do not disclose to business partners that there is a diplomatic disagreement. 

The Lao government never asked the Xayaburi Dam’s business investors to set aside time for the MRC’s diplomatic process to take place. In April 2011, the MRC governments first met to discuss the Xayaburi project. They could not reach agreement and instead deferred the decision to a Ministerial meeting scheduled for later in the year. However, this is not the message that Laos sent to investors.

In May 2011, Laos hired the Pöyry company to advise on the project. In June, Laos sent a letter to the Thai project developer Ch. Karnchang reporting Pöyry’s finding that the MRC’s “prior consultation” was complete and the project could move forward. In contrast, the official MRC position at the time was that the Mekong governments had “agreed that a decision on the prior consultation process … be tabled for consideration at the ministerial level, as they could not come to a common conclusion on how to proceed with the project.” The following October, Laos sent a similar letter to the Thai government. This led the Thai government to sign agreements to purchase the dam’s electricity and provide financing for the project, again referencing the findings of Pöyry. From this point forward, the Xayaburi Dam’s business investors moved ahead without regard for the MRC’s diplomatic process. As more and more money was invested in the project, the pressure grew to keep the project on schedule.

Deny that construction is happening, and label everything as “preliminary work.” 

When the Ministers of the MRC governments met in December 2011, they agreed to conduct further studies on the impacts of the 11 proposed dams. Both Cambodia and Vietnam understood this agreement to mean that Laos would delay construction on the Xayaburi Dam while the further studies were carried out.

Thai communities protest the dam at the Asia Europe Summit in Laos
Thai communities protest the dam at the Asia Europe Summit in Laos.

By June 2012, it was clear that construction had not been delayed. Investigations by International Rivers and journalists revealed significant activities were already underway. A delegation of governments also visited the site. Laos denied that these activities were “construction” and instead referred to them as “preliminary work.” This made it more difficult for Cambodia and Vietnam to request that the activities at the dam site be halted so that more studies could be carried out. For the next few months, Lao officials announced repeatedly that construction would not begin until neighboring countries’ concerns had been addressed.

Meanwhile, reassure investors that construction is on schedule. 

While Laos worked to reassure Cambodia and Vietnam that the project was safe, Thai officials simultaneously reassured investors that the project remained on schedule. On August 16, for example, Ch. Karnchang’s CEO Plew Trivisvayet told Reuters that construction on the river would begin in late 2012. He said, “We are still working on the project. We haven’t received a formal letter from the Lao government that we should suspend or put the project on hold.” The Thai Energy Ministry made similar statements. In other words, Laos was willing to engage in diplomacy with Cambodia and Vietnam, but only to the extent that it did not interfere with the construction schedule set by the project’s investors.

Finally, step outside the confines of the Mekong River Commission. 

In the final few months, Laos held numerous closed-door meetings with Cambodia and Vietnam, in an effort to convince them to accept the project. Most of these discussions took place outside the MRC framework. In October, Cambodian and Vietnamese delegations separately visited the dam site. During these meetings, Pöyry and CNR presented their studies, while Laos worked to portray the project as inevitable because it had already advanced so far. The MRC secretariat and outside experts were prevented from seeing details of Pöyry’s and CNR’s latest proposals, so that the Cambodian and Vietnamese governments did not have access to independent evaluations of what they were told. By November 2012, the rainy season had ended and construction was scheduled to proceed. Conveniently, Laos concluded at this time that neighboring countries’ concerns had been addressed.

Where do we stand now? 

The Xayaburi Dam – and Laos’ and Thailand’s treatment of their neighbors – leaves the future of the Mekong River Commission at an uncertain point. The MRC was supposed to serve as the key institution for promoting regional stability around the Mekong River's water, energy and food resources. If decision-making continues to happen outside of the MRC, the institution will soon lose its legitimacy. Currently the MRC's existence depends on public funds provided by donor governments. For example, Finland and other donors financed the MRC’s 2010 strategic environmental assessment, and Australia financed the prior consultation. These and other investments now appear to be wasted. Laos shows no signs of changing its behavior in the future, and several other proposed Mekong dams are ready to move forward. While donor governments and the MRC secretariat have made strong statements about the Xayaburi Dam in the past, most have remained silent about this latest news.

For the 60 million people of the Mekong River Basin, the future looks bleak unless the region’s governments soon find the courage to speak up.

More information: 
  • Please visit our webpage on the Xayaburi Dam for more information.