Challenge To The Bankrollers of the Theun-Hinboun Expansion Project

Tania Lee

As opulent celebrations have concluded at the 9th Asia-Europe Meeting of Heads of State and Government in Laos, high-ranking officials from Australia, France, Germany, the Netherlands, Norway and Thailand have been in attendance. Although far from sight of the posh wines and hors d’oeuvers being ceremonially served in Vientiane, no less real is the plight of tens of thousands of villagers only 200km away, whose livelihoods are being destroyed by a project they are helping to bankroll in the once fertile Hinboun Valley.

Theun-Hinboun Dam
Theun-Hinboun Dam

The Theun-Hinboun Expansion Project in Central Laos is nearly complete, with plans for a celebratory inauguration taking shape in the coming months. The project is being built by the Theun-Hinboun Power Company, which is jointly owned by the Government of Laos, the Norwegian state-owned company Statkraft and GMS Power of Thailand, and is backed by public financing from France, Germany and the Netherlands, along with private bank investments from Australia and France. By exporting electricity to Thailand, the Expansion Project will primarily generate profits for the company’s shareholders and the Lao authorities. It involves a doubling of the capacity of the original Theun-Hinboun Dam, which was completed in 1998 as a trans-basin project that diverts water from the Theun to the Hai and Hinboun Rivers. Now, the building of a 70-meter high upstream dam on the Nam Gnouang River has enabled the doubling of the amount of water being diverted into the Hai and Hinboun Rivers.

For local families living along these rivers and within the Hinboun Valley, this means more frequent and higher losses of rice harvests due to project-induced flooding, further decreased fish catches, and greater erosion of riverbanks where vegetables were once grown in the dry season. These impacts have been experienced since the building of the first dam, and will now be significantly exacerbated, making living off the land and the river increasingly impossible.

The expansion project is displacing close to 4,000 people, and affecting nearly 50,000 people upstream and downstream. The majority of these people will never be able to harvest high yields from fertile paddy rice fields, catch the river fish and gather the bountiful wild foods as they had done for generations before. Removed from their original riverside settlements, downstream villages are being consolidated inland where they have been 'relocated', pushed into an existence without reliable incomes or secure sources of food. As a stop-gap resolution, villagers are being encouraged to invest in livelihood programs such as artificial fish ponds and heritage vegetable gardens. Yet, the livelihood projects are experimental, and cannot replace the food security provided by wild fisheries, wet season rice harvests, and forest foods.

The Theun-Hinboun company has made an artificial distinction that does not exist in internationally-accepted legal terminology between people whose lands and homes have been completely inundated by the project and are in need of support for resettlement, by referring to project affected populations living downstream as undertaking voluntarily ‘relocation’. By upholding this corporate-contrived distinction between those who are ‘relocating’ due to supposedly less direct impacts and those who undergo involuntary displacement and resettlement, the company continues to get away with treating downstream villagers as needing minimal support in terms of re-building their homes and livelihoods for no 'less real' project-induced impacts.

Over the past decade, the Theun-Hinboun Power Company has reassured financial backers that even though the project is making wet season rice farming untenable due to project-induced flooding, it will subsidize dry season rice farming as a substitute. The company’s resettlement action plan promises free electricity for the life of the project and subsidized inputs in order to help make dry season farming profitable. International Rivers has pointed out for years that this is a risky endeavour, and the company itself admits that dry season rice farming failed when it trialed it a few years back as yields were poor and villagers fell into cycles of debt.

Now, after over a decade of encouraging villagers to invest in these risky agricultural endeavours, the  Theun-Hinboun Power Company has interpreted that the problems of failed harvests as mostly due to villagers not being culturally accustomed to such farming techniques. Despite dry season rice farming being the suggested cornerstone of their livelihood program for downstream villagers, the company is now admitting that this is a strategy that is likely to fail. Yet because of the project-induced flooding, its not clear where villagers will be able to grow rice in the future, leaving people’s lives hanging in the balance.  The company also acknowledges there have been problems with the maintenance of villagers’ fish ponds.

Meanwhile, some villages along the Hinboun River that have experienced heavy flooding each rainy season since the building of the original dam, being cut off from the main road for days at a time and unable to harvest any rice, are scheduled to be consolidated into a new relocation site in the coming months by the company. However, plans of where exactly they will move to, what kind of future support they can expect, and information about how they will rebuild their livelihoods is not public and villagers themselves appear to be living in a kind of limbo. Additional communities will be moved over the course of the next four dry seasons. They too are living with little information about where they will move to and how they will retain their ways of life, without becoming dependent on food and material handouts.

Until people’s rights to information on resettlement and compensation details are respected, the company and financiers will be in violation of the Lao Government’s own laws and the corporate social responsibility standards outlined in the Equator Principles, a set of voluntary social and environmental guidelines to which some of the world’s largest international banks and private financiers are signatories.

Will the Theun-Hinboun Power Company and international financial backers of the Theun-Hinboun Expansion Project acknowledge that the fragmentation of communities and livelihoods cannot be shrouded in a veil of secrecy, and re-engineered with experimental farming enterprises? The commitment to sound investments in due compensation and full, meaningful livelihood restoration measures remains a challenge that would require confronting the gap between the rhetoric of development and poverty-alleviation used in swanky ceremonial gatherings with the local realities underway in the communities and the watersheds on which they depend.