Cambodia’s Lower Sesan 2 Dam’s Draft Law Evades Costs and Concerns

Ame Trandem
Monday, February 11, 2013

Phnom Penh: Cambodian lawmakers are set to debate a new draft law for the controversial Lower Sesan 2 Hydropower Dam at this Friday’s National Assembly session.  The draft law offers government guarantees to the project developers in the event that Electricité du Cambodge fails to pay for the electricity it has promised to purchase or in case of a political force majeure that would affect the project developer’s interests. The law is based on an implementation agreement between the government and Hydropower Lower Sesan 2 Company Ltd that has significantly reduced the project’s compensation and environmental management costs. If approved, the law will help the implementation agreement to go into effect, thereby releasing the project developer from responsibility for many of the dam’s environmental and social impacts.

The new law claims that the Lower Sesan 2 Dam will affect less than 800 households in northeastern Cambodia.  In contrast, a study entitled “Best Practices in Compensation and Resettlement for Large Dams” indicated that tens to hundreds of thousands of people living upstream and downstream of the project in Cambodia, and within the region, who will experience negative impacts to their livelihoods and food security. 
The Lower Sesan 2 Dam is expected to have significant transboundary impacts in the Mekong River Basin. In 2012, a study published in the Proceedings of the National Academy of Sciences concluded that the dam will wipe out 9 percent of the Mekong Basin’s fish biomass.  The International Centre for Environmental Management, which has studied sediment flows in the region, was quoted in the Cambodia Daily newspaper as saying that the dam is expected to reduce 6-8 percent of the Basin’s sediments loads which are essential to the productivity of the Mekong Delta, riverbank gardens and other floodplains.  Research published in 2012 by the Journal of Water Resources Planning and Management found that the full hydropower development of the Sesan, Srepok and Sekong rivers, including the Lower Sesan 2 Dam, will significantly alter  water levels in the Tonle Sap Lake and will have a higher impact on the Lake than the Upper Mekong hydropower cascade in China. 

“As one of the worst proposed dams in the Lower Mekong Basin, the Lower Sesan 2 will unleash irreversible environmental destruction and harm to the food security of the nation.  It would be irresponsible for the National Assembly to approve this draft law and proceed with the project,” said Ms. Ame Trandem, Southeast Asia Program Director for International Rivers. “This dam threatens to undermine the country’s development.”

Ms. Trandem added, “It’s clear that this dam should not proceed, as the company continues to evade the project’s real costs and has failed to consider the demands of affected communities who have repeatedly called for the project’s cancellation.”

During a visit last week to five villages that will be directly and indirectly affected by the Lower Sesan 2 Dam in Stung Treng province, International Rivers found that people have not been adequately consulted and lack basic information about the project and its compensation plan.  Immediately downstream of the dam site in Pluk Village, villagers have been informed that they will have to move to a safe zone and live in tents while the dam is being constructed.  People are unaware of whether they would receive any compensation for the disruption to their livelihoods during this move. In Srekor Village, which would be flooded by the reservoir, people are unclear when they will have to move and whether they will be entitled to new homes or infrastructure in the resettlement site.  Nearly all people interviewed were never consulted on the project and stated that they don’t want the dam to be built or to have to move away from their homes.

“National Assembly members would be wise to demand more studies and consider alternative energy technologies rather than gamble with Cambodia’s future on such a risky project,” continued Ms. Trandem.  “The benefits this project will bring to the country are negligible, especially when scientific research is showing just the opposite.”

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The 400 MW Lower Sesan 2 Dam is located at the confluence of the Sesan and Srepok rivers in Stung Treng province, approximately 25 km away from the Mekong River. The $781.52 million project is being implemented by the Hydropower Lower Sesan 2 Company Ltd., which is a joint venture between Cambodia’s Royal Group in collaboration with China’s Hydrolancang International Energy Co., Ltd. (90%) and EVN International Joint Stock Company, a subsidiary of Electricity of Vietnam (EVN) (10%).   Funding for the project comes from the company’s capital (30%) and an undisclosed bank loan (70%).  The project was approved by the Cambodian government in November 2012, despite numerous petitions and protests carried out by villagers since 2007 who will be impacted by the project who have called for the dam’s cancellation.

Located on very flat land, the 75 meter high dam will have a 33,560 hectare reservoir that will inundate seven villages comprising of 1,579 households or 6,507 people.  Research conducted in 2009 by Dr. Ian G. Baird in a report entitled “Best Practices in Compensation and Resettlement for Large Dams” estimated that hundreds of thousands of people living as far away as Cambodia’s Tonle Sap Lake, Vietnam’s Mekong Delta and the middle Mekong River in Laos and Thailand would be negatively impacted by the project due reduced fish stocks from blocked fish migrations.  Despite the large-scale impacts to livelihoods and food security expected from the dam due to the blocked fish migrations and sediment flows, the project’s implementation agreement only allocates $41.94 million to be used for compensation of impacts and $2.23 to be used for environmental protection out of the project’s $781.52 million total cost.

According to villagers located near the dam site, the Hydropower Lower Sesan 2 Company Ltd. is expected to begin clearing for the dam’s reservoir and setting up workers camps in mid-April.

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