Lao Hydropower Developer Terminates Agreement with IRN

Wednesday, April 7, 2004

International Rivers Network Response to Theun-Hinboun Power Company Decision

An unusual cooperation agreement between US-based river protection organization International Rivers Network (IRN) and Lao dam developer Theun-Hinboun Power Company (THPC) was abruptly ended on March 23, 2004 by THPC.IRN and THPC signed an agreement last year to develop a review of the company’s work in mitigating impacts of the Theun-Hinboun Hydropower Project in Laos. THPC notified IRN of its decision to end cooperation three weeks after the month-long review began, based on concerns that the agreement did not follow standard corporate practices.

“We are extremely disappointed in THPC’s unilateral decision to end cooperation on the review,” says Susanne Wong, IRN’s Southeast Asia Campaigner. “THPC’s decision raises questions about the company’s commitment to open its mitigation and compensation program to independent monitoring and scrutiny. In a closed society such as Laos, without such monitoring there is no way of determining whether communities are being adequately compensated for their losses.”

In May 2003, IRN and THPC signed a cooperation agreement to jointly develop a 3rd party review to examine the effectiveness of the company’s mitigation and compensation program and to issue recommendations for improvement. They developed terms of reference for the review, selected members of the review team and were to jointly provide comments on the team’s draft report this month. THPC is continuing to oversee the review. A final report is expected to be completed in late April or May and will be made publicly available.

Theun-Hinboun Power Company is a joint venture between the Government of Laos and two private companies: Norwegian state-owned company Statkraft and GMS Power of Thailand. The Theun-Hinboun Hydropower Project was funded by the Asian Development Bank and completed in 1998. About 25,000 people have experienced reduced fish catches, flooding of vegetable gardens, loss of freshwater drinking sources and transportation difficulties since the project began operation.