Laos Announces “Postponement” of Xayaburi Dam But Vows to Continue Construction and Resettlement Activities

For Immediate Release: Monday, July 16, 2012

Bangkok, Thailand -- On Friday, Laos’ Foreign Minister Thongloun Sisoulith announced that the Xayaburi Dam had been postponed, pending completion of further environmental studies. While initially promising news, today’s Vientiane Times confirms that the Lao government nevertheless intends to allow Ch. Karnchang, the dam’s builder, to continue scheduled activities at the dam site, including the resettlement of affected villages. To date, the Mekong River Commission member countries have not yet decided whether to proceed with the project, in accordance with the 1995 Mekong Agreement. 

“Laos’ promise to suspend the Xayaburi Dam is welcomed,” said Kirk Herbertson, Southeast Asia Policy Coordinator for International Rivers. “However, Laos has been saying for months that it has agreed to suspend the dam, while at the same time allowing Ch. Karnchang to continue to move forward with construction activities on everything but the dam itself. Actions speak louder than words. We expect the Lao government to order Ch. Karnchang to immediately stop all construction-related activities at the Xayaburi site and cancel plans to resettle more villages until a regional agreement has been reached.”

Although the Xayaburi Dam site is located in Laos, postponing the project depends on the willingness of the Government of Thailand, as well as Laos. Thai construction giant Ch. Karnchang is building the project, Thai banks including state-owned Krung Thai bank are financing the project, and the Electricity Generating Authority of Thailand (EGAT) has already signed a power purchase agreement that binds the project to a specific timeline.

Last Friday, Thai communities living along the Mekong River announced plans to sue EGAT for signing the agreement to purchase power from the Xayaburi Dam, in violation of their constitutional rights and national laws.

“Until the Thai government and Ch. Karnchang agree to cooperate with the regional decision-making process, and until construction on all activities definitively stops, we cannot be assured that Xayaburi is really suspended,” said Pianporn Deetes, Thailand Campaign Coordinator for International Rivers. “The postponement of Xayaburi is an empty promise, until Thailand also cancels the dam’s illegal power purchase agreement.”

Although the Mekong River Commission’s member countries have deliberated over the Xayaburi Dam since late 2010, no transboundary impact assessment has been carried out to assess the full extent of environmental and social impacts the Xayaburi Dam will likely have on neighboring countries. However, scientific studies continue to raise concerns about the extent of impacts that the Xayaburi Dam and other Mekong mainstream dams would have, and the important role that the Mekong River plays in sustaining the livelihoods and food security of millions of people in the region.  

“It is now time to look to Thailand for leadership,” said Mr. Herbertson. “Construction on the project is likely to continue on schedule until Thailand cancels its power purchase agreement, withdraws its investments, and orders Ch. Karnchang to adhere to the Mekong River Commission’s negotiations.”