Ilisu – A Test Case for the Global Dam Industry

Protest in Berlin
Protest in Berlin
The high drama over Turkey’s Ilisu Dam continues. A new report by the official monitoring team demonstrates that the project continues to violate the conditions under which Austria, Germany and Switzerland agreed to fund the project. Ilisu has become a test case for the dam industry’s efforts to strengthen the social and environmental acceptability of its projects.

The Ilisu Dam on the Tigris will displace 55,000-65,000 Kurdish people, drown the 10,000-years-old city of Hasankeyf, and cause extensive environmental damage. Faced with strong opposition from affected people and civil society groups, the governments of Austria, Germany and Switzerland in March 2007 only approved export credits for the project under 153 conditions. Three committees of experts are monitoring the implementation of these conditions in regards to resettlement, the environment, and cultural impacts.

In their first project update in March 2008, the official monitors came to devastating conclusions. As I reported in an earlier blog posting, they found some progress regarding only five of the 35 conditions relating to resettlement and compensation – and almost only related to the expropriation of affected people. The experts came to the “sobering conclusion that a period of one year to 15 months was largely lost”.

In late August, the project monitors published their second status update. They found that there was still “little or no follow up” regarding the urgent measures which they had proposed to prevent impoverishment and environmental destruction by the project. The population in the reservoir area had still not been informed or consulted. Financial compensation for houses and land was below the cost of their replacement. The identification of new lands for the displaced people continued to be “totally neglected”. A program to restore the income of the affected people “does not exist and its preparation had not started yet”. And the government institutions which the legal agreement with the foreign funders listed as partners in the resettlement program had not even been informed that they were supposed to participate in the project.

In conclusion, the experts found that the “the lack of preparation in the resettlement component (…) entails serious risk of impoverishment, destitution, and social disorganization for the massive population inhabiting the reservoir”. They made it clear that the failure in executing the conditions is “a de-facto departure from the legal agreement with the ECAs” (or export credit agencies). And they called “full attention to the fact that neither the letter and spirit of the agreement, nor the logic of development projects and resettlement preparation, can support the start of the construction engineering in the absence of the indispensable preparation, planning, population data, and land resources for Ilisu’s vast resettlement component”.

Will the funders accept hands down that in spite of repeated warnings, the Turkish government violates the agreement about their funding for the Ilisu Dam? NGOs in Germany, Austria and Switzerland have already called on their government to draw the necessary consequences and cancel their funding for the Ilisu Dam.

The Ilisu consortium argues that if the European governments cut their funding, Chinese dam builders and financiers will step in without hesitation. As I have argued elsewhere in this blog, the Chinese government is currently making efforts to strengthen the social and environmental acceptability of Chinese foreign investments. And interestingly, one of the four experts who monitor resettlement in the Ilisu Project is the Chinese professor Shi Guoqing. The Chinese government could probably not simply ignore his voice.

In March, Germany’s development minister Heidemarie Wiezcorek-Zeul warned that she would “withdraw export guarantees if the agreed measures are not applied”. According to Der Spiegel, the German government ministries involved in the project recently agreed that Turkey’s response to the monitoring reports has been unacceptable. Rumor has it that Germany is prepared to pull out of the project, but the Austrian and Swiss governments are not. These governments have a long history of providing export credits for socially and environmentally destructive projects such as the Three Gorges and Yusufeli dams in China and Turkey (in the case of Switzerland), and a pulp and paper mill in Indonesia and a nuclear power plant in the Czech Republic (in the case of Austria). If they are not prepared to drop a project in which the breach of their legal agreement has been officially established, they have clearly not learned from their earlier mistakes.

The Ilisu Dam tests the credibility of major actors in the hydropower world. Germany, Austria and Switzerland are the main northern governments still providing export credits for large dams. The Turkish hydropower utility DSI, together with the World Water Council, is the main organizer of the 5th World Water Forum. This get-together of the global water and hydropower industry will take place under the lofty theme of “Bridging Divides for Water” in Istanbul in March 2009.

Alstom and Andritz VA Tech, the companies building the Ilisu hydropower plant, are members of the International Hydropower Association, and Alstom is on IHA’s board. IHA has close relations with DSI, and when the industry association met in Turkey in 2007, delegates from Hasankeyf documented that Ilisu violates IHA’s much-touted sustainability assessment protocol. The International Hydropower Association would like its protocol (rather than the recommendations of the independent World Commission on Dams) to become the global standard for assessing hydropower dams. Even though the companies involved are members of the IHA, the industry guidelines have not made any difference to the Ilisu Dam, and IHA has so far remained silent on the project. The hope of the affected communities lies in the continued public pressure on the funders, and the courage and independence of the project monitors.

Peter Bosshard is the policy director of International Rivers. His blog, Wet, Wild and Wonky, appears at