Saving Livelihoods and Face in Beijing

By: 
Peter Bosshard
Closed door policy: Ikal Angelei at the gates of ICBC in Beijing
Closed door policy: Ikal Angelei at the gates of ICBC in Beijing

The travels of Ikal Angelei, the passionate director of Friends of Lake Turkana, illustrate the changes in the global dam business. Fighting against the destructive Gibe III Dam in Ethiopia, Ikal has taken on managers of international financial institutions in Washington, Dakar and Prague, and mobilized allies at global civil society meetings in Turkey and Mexico. Her latest trip brought her to Beijing, where she addressed the role of China’s global dam financiers. I had the pleasure to travel with her. Here is an update.

Ikal has learned to eat with chopsticks and negotiate with Beijing taxi drivers for a reason. Over the last few years, Chinese companies have begun to dominate the global market for hydropower contracts. We are currently aware of 251 dam projects in 68 countries in which Chinese companies and banks are in some way involved.

The Gibe III Dam, which would seriously impact the Lower Omo Valley and Lake Turkana, is a prominent example of this trend. Funding for the project was considered by a US bank, the Italian government, the World Bank, the African Development Bank, and the European Investment Bank. None of them got involved – until in July 2010, China’s ICBC approved a loan of $500 million for a Chinese equipment contract. Ikal raised her concerns with the Chinese embassy in Nairobi, but the bank never bothered to respond to letters or meet with representatives of the affected people.

Ikal at the Rivers for Life 3 meeting
Ikal at the Rivers for Life 3 meeting

Last week, Chinese civil society organizations organized a training workshop on the social and environmental responsibility of overseas investors and financiers. They asked academics and financiers to introduce the environmental guidelines which are currently being prepared for China’s economic “going out” strategy. They also invited Ikal Angelei, together with activists from Burma and representatives of BankTrack and International Rives, to share experiences with projects on the ground and international environmental standards.

During our visit to Beijing, we learned once again that China wants to be a responsible global actor. The Ministries of Commerce and the Environment are currently drafting environmental guidelines for foreign investors which are rather stricter than the guidelines of Western governments. One Chinese bank is publishing more information about its projects than Western banks have ever agreed to do. And some destructive overseas projects have been suspended after NGOs raised concerns.

At the same time, important gaps remain. Key guidelines have not yet been formally adopted. As the example of ICBC – which likes to see itself as a leader in green finance – shows, existing guidelines are not necessarily implemented on the ground. While the biggest companies care about their international reputation, some bottom-feeding contractors are building dams in Burma with complete disregard for basic environmental and human rights standards. And while some Chinese companies have engaged in a dialogue with international NGOs, they often still ignore local groups and project-affected people.

Ikal Angelei, Johan Frijns of BankTrack and I also participated in an event with the Foreign Correspondents Club of China, and made a brief visit to ICBC’s headquarter. Ikal welcomed the environmental commitments which Chinese government agencies and ICBC have made in the past, but made it clear that the affected communities refuse to be the “collateral damage” of a project that does not respect these commitments.

Spokesperson Hong Lei
Spokesperson Hong Lei
FMPRC

The gates at ICBC remained closed to the civil society activists. And the Ministry of Foreign Affairs repudiated their critique. “When cooperating with relevant countries on water conservancy and hydropower projects at their request, China adopts strict environmental protection standards and requires that the Chinese enterprises abide by local laws and regulations,” Foreign Ministry spokesman Hong Lei said at the Ministry's press conference. Hong added that China would "strengthen cooperation and exchanges with relevant countries in the field of environmental protection."

Our Chinese friends reminded us how important it was for all actors in China to save face, and for NGOs to state facts without being judgmental. International critique of China is indeed often tainted by stereotypes. If we see malpractices by Union Carbide or BP as the fault of these companies rather than the US or Great Britain, we shouldn’t automatically view similar practices by Chinese companies as China’s fault. At the same time, it is hard not to pass judgment when a project destroys your livelihood. And it is difficult to avoid the public debate if companies and financiers refuse to talk to you.

Protest at the Chinese embassy in Nairobi
Protest at the Chinese embassy in Nairobi
FoLT

The Chinese government should not regard every critique of Chinese actors as motivated by anti-Chinese bias. Ikal Angelei and other activists are presenting the same demands to Chinese institutions that they have presented to countless Western actors before. The best way to save face and avoid criticism is to speed up the reforms that will address legitimate social and environmental concerns.

Peter Bosshard is the policy director of International Rivers. He blogs at www.internationalrivers.org/en/blog/peter-bosshard and tweets @PeterBosshard.