Chronic Problems at Yacyretá Dam

Tuesday, July 13, 2004

International Rivers Network Press Release


A new report issued by the Inter-American Development Bank's Independent Investigation Mechanism has confirmed chronic and serious problems with the Yacyretá Hydroelectric Project, financed in large part by the IDB and the World Bank. The report, completed in May, but only just made public, also cites numerous violations of IDB policy in non-enforcement of regulations on resettlement and environmental mitigation questions.

The IDB has loaned a total of $977 million for the Yacyretá Hydroelectric Project, located on the Paraná River between Argentina and Paraguay. This total includes loans for building the dam, and to private companies for erecting electrical transmission lines. The complaint brought by the Paraguayan Affected Peoples' Federation of Itapúa and Misiones provinces, FEDAYIM, focused on the bank's 1994 loan of $130 million to the Yacyretá Binational Entity (EBY) for programs to mitigate the project's social and environmental impacts. The Panel found that, ten years later, only $40 million of this loan has been spent, while existing social and environmental problems have worsened.

Among the most serious problems which the panel attributed directly to the Yacyretá project were flooding of houses along the river, polluted creeks and water wells, elevated incidence of health problems, including diarrheas, parasites, and skin problems, inadequate resettlement housing, and child prostitution. Investigators also found many cases where affected people were arbitrarily denied compensation by EBY, and criticized poor monitoring of the project by IDB staff and officials.

The IDB's report comes at a time when the governments of Argentina and Paraguay have indicated their intention to raise the Yacyretá reservoir operating level by seven meters to increase electricity generation. The reservoir has been frozen at its current level since 1994, when it was recognized that mitigation plans had not been adequately prepared or executed.

The panel also found that homes along urban creeks flooded every time it rained, and blamed the problem on inadequate storm sewers and unplanned urbanization. The flooded-out homeowners have received no compensation from EBY. It found many resettlement areas lacking medical facilities, drinking water, adequate plumbing, schools, social assistance, plots of land for gardens, and found homes to be undersized, considering the size of resettled families. The panel also found drinking water wells to be polluted as a result of the dam. Many families were excluded from EBY's census of affected families, but should have received compensation, the panel found, while others that EBY admitted to be eligible had never received indemnification. The distance from the resettlement areas to the city of Encarnación made it difficult for many resettled to find work, some having to walk as much as four hours to reach town. Investigators also cited cases of 13 - 15 year-old girls from the resettlements being forced to work as prostitutes in Encarnación to support their families.

Investigators also found an increase in cases of diarrheas, parasites, anemia, and skin rashes in Encarnación residents attributable to the reservoir. Public health workers told investigators they expect the incidence of waterborne diseases, like schistosomiasis, to rise if and when the reservoir is filled, but that no epidemics had occurred to date. The Commission also found there was no plan as to how homes will be linked to the planned sewage treatment center in Encarnación.

The Independent Investigation Mechanism also found that the IDB had violated many bank policies, principally the Bank's Involuntary Resettlement policy, and had failed to follow proscribed measures for Analyzing Risk of Poverty, Community Participation, Data Gathering, Indigenous Communities, Difficulties in Transition, Compensation Packages, Followup and Evaluation, Establishing Legal and Constitutional Frameworks, and Conflict Resolution, as well as violations of the IDB's Environment policy, in terms of not adequately addressing urban creek and groundwater pollution.

Angela Vergara, Coordinator of Fedayim, welcomed the IDB panel's report, saying "We are very satisfied with the results of the investigation especially in terms of the problem with the flooding of our homes every time it rains. Now, we feel stronger and we will demand that when the bank sends its missions here, they communicate directly with us in order to work towards a solution."

Vergara also criticized the recent report of the World Bank's Inspection Panel which downplayed the role of the dam in causing flooding along urban creeks. The World Bank report did support Fedayim's complaints about resettlements and inadequate compensation for victims of Yacyretá.
The World Bank and IDB independent panels also investigated Yacyretá in 1997 and made recommendations on solving the problems caused by the dam."

The World Bank and IDB did not ensure the implementation of their earlier recommendations and Yacyretá remains a disaster. Given the project's quarter-century of corruption and failure, plans to raise the reservoir level should be suspended, at least until a comprehensive mitigation plan is designed, implemented, and verified independently of the bank staff and binational bureaucracies."

For more information:
Glenn Switkes, International Rivers Network,
São Paulo, Brasil
Telefax +55.11.3666.5853

Angela Vergara, Fedayim,
Encarnación, Paraguay
Tel: +595.71.207.313