Mega First's Risky Investment Threatens Future of the Mekong River

Kate Ross
Friday, May 22, 2015

High risk overseas investment projects are a growing concern for responsible business. Mega-First Corporation Berhad (Mega-First) is likely to come under fire at its Annual General Meeting on Friday, as the company faces growing criticism for its role in the controversial Don Sahong Dam, planned on the Mekong River in Laos.

Mega-First, the Malaysian project developer, has pushed forward with implementation of the Don Sahong Dam – the second Mekong mainstream dam – despite opposition from the Cambodian, Thai and Vietnamese governments, and calls for further study of the project’s impacts.

The company’s disregard for the concerns of neighboring governments, the rights of Mekong communities and the procedures for regional cooperation in the Mekong, has raised alarm over Mega-First’s involvement in a project which, for only 260MW of electricity, risks jeopardizing the food security and lives of millions of people throughout the Mekong.

The location of the Don Sahong Dam in Siphandone, southern Laos, is a unique microcosm of the Mekong River’s rich ecosystem. The area is renowned for its abundant fisheries, which support more than 200 species of fish, and acts as a staple in the diet and livelihoods of local communities.

The Don Sahong Dam will block the main channel in the area used year round by fish migrating between the Mekong countries. Disrupting fish passage will have a profound and irreversible impact on food security and lives throughout the region.

The project is also positioned just one kilometer from the core habitat of a group of critically endangered Irrawaddy Dolphins, and less than two kilometers from the Cambodian border.

Despite warnings from experts, and requests from Mekong governments and communities, Mega-First has never adequately studied the dam’s transboundary impacts.

Thai, Cambodian and Vietnamese people have publicly opposed the project and appealed to Mega-First to halt construction through letters, petitions and peaceful protests. A petition signed by more than 50,000 people, organized by the World Wildlife Fund, was sent to Mega-First’s Executive Chairman, urging him to put a stop to the project. However so far the concerns raised to Mega-First have fallen on deaf ears.

In October 2014, six NGOs filed a complaint with the Malaysian Human Rights Commission against Mega-First for their role in the Don Sahong Dam. The complaint, filed on behalf of communities in Cambodia and Thailand, highlights the failure of Mega-First to understand the likely impacts of the project and take action to minimize its harm on local communities. By failing to inform or consult with communities that will be affected by the project, Mega-First has operated against the principles of international law.

By moving ahead with construction of the Don Sahong Dam, Mega-First is disregarding the procedures for regional cooperation between lower Mekong governments. The four governments have not been able to reach agreement about the future of the project. At a meeting of the Joint Committee of the Mekong River Commission in January 2015, it was decided that the inter-governmental decision would be raised to a ministerial level. However, this meeting has not happened, and yet construction at the dam site continues.

While Mekong countries await further study in order to assess the project’s impacts beyond the borders of Laos, questions remain regarding the project’s proposed mitigation measures, which have never been proven to work in the Mekong. As the sole project developer, it is Mega-First’s responsibility to bear the burden of proof, something that the Government of Vietnam re-iterated in January. Existing studies remain insufficient to demonstrate the project’s success, as well as who will bear the responsibility and cost should the mitigation measures fail.

It is clear that many uncertainties remain in understanding the far-reaching impacts of the Don Sahong Dam, and in plans to mitigate these impacts. To continue to implement the Don Sahong Dam in this way is highly irresponsible, and risks not only the food security and livelihoods of millions of people in the Mekong region, but also the future of regional cooperation.

Mega-First still has the opportunity to choose a different path, and to demonstrate itself as a responsible and ethical company; to ensure its own reputation as well as the future of a sustainable Mekong River.

A first step towards responsible action will require Mega-First to immediately stop all construction towards the Don Sahong Dam and carry out comprehensive baseline studies, transboundary impact assessments, and meaningful consultation with affected communities in all lower Mekong countries.

Kate Ross is Mekong Program Associate for International Rivers, an international organization headquartered in the USA working to protect rivers and the rights of people who rely upon them.