Theun-Hinboun Dam Nightmare Revealed: Resettlement Plan and EIA Riddled with Flaws

International Rivers and FIVAS
Wednesday, April 16, 2008

Norwegian-backed project will plunge 50,000 Laotians into Deeper Poverty

The Theun-Hinboun Expansion Project's resettlement plan and environmental impact assessment (EIA) utterly fail to meet either Lao regulatory requirements or international standards, and are riddled with flaws, omissions and biases, according to reviews released today by International Rivers. A scathing review of the environmental impact assessment by independent researcher David Blake concluded, "Rarely does one see such a cynical attempt to blatantly distort or ignore empirical data to achieve a pre-determined outcome: namely, the building of this new dam."

The resettlement plan and EIA - written by Norwegian consultancy Norplan - are of such a low professional standard that their proposed mitigation measures will not address the dam's impacts or restore villagers' livelihoods. As a result, the Theun-Hinboun Expansion Project is likely to plunge around 50,000 Laotians deeper into poverty, while ensuring bumper profits for the project's developers, which include Norwegian state-owned utility, Statkraft.

"I am stunned that Statkraft and Norplan - companies from one of the richest and most advanced countries in the world - would put their name and reputation behind such abysmal studies. This shows that they care little about the fate of some of the poorest people in Southeast Asia," said Aviva Imhof, Campaigns Director of International Rivers and author of the resettlement plan review.

If built, the Theun-Hinboun Expansion Project would displace up to 4,800 people and affect another 48,441 people living downstream on project construction lands and in host villages. The project involves a 65-meter high storage dam on the Nam Gnouang River and a doubling of capacity at the existing Theun-Hinboun hydropower plant, resulting in a doubling of the amount of water diverted into the Hai and Hinboun Rivers.

Imhof charges that Norplan's resettlement plan minimizes the project's harmful impacts, while failing to present a viable plan for restoring the livelihoods of the thousands of people who will be affected by the project.

"The result of the expansion project is likely to be massive impoverishment and out-migration from the Hai and Hinboun River valleys, where life will become increasingly unbearable due to the greater frequency and intensity of project-induced flooding," states Imhof, who has been monitoring hydropower developments in Laos for more than a decade. "In the resettlement areas, both host villagers and resettled communities will be forced to compete for increasingly scarce land and natural resources, which will inevitably lower living standards for all involved."

The critiques of the dam are backed by Andrew Preston, director of Norwegian pressure group, FIVAS. "Statkraft should use its position in the Theun-Hinboun Power Company to halt expansion plans until they've proven their ability to deal with the damage to livelihoods and the environment caused by the existing project," he said. "Blithely carrying on with more of the same measures that have failed before should be untenable for a company with ambitions of being a world leader in the provision of ‘clean energy'. If Statkraft is unwilling or unable to use its stake in the company to better influence outcomes, then frankly it would be better out of the project than in."

The Theun-Hinboun Power Company (THPC) is co-owned by Statkraft, GMS Power of Thailand and the Lao government. THPC plans to receive funding for the US$485 million project from a consortium of foreign and Thai banks, including ANZ Investment Bank, Bank of Tokyo-Mitsubishi UFJ, Calyon, Fortis Bank, ING Bank and KBC Bank, all of whom have adopted the Equator Principles, a set of voluntary international social and environmental standards for private banks.


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