Sidestepping Science: Review of the Pöyry Report on the Xayaburi Dam

Executive Summary

The Xayaburi Hydropower Project in northern Laos is the first dam proposed for the lower Mekong Mainstream. The stakes are high. Over 60 million people live in the Mekong River Basin, and their livelihoods and cultures are intimately connected with the river's natural cycles. As the world's largest inland fishery, the Mekong supplies the region's people with over half of their protein needs. Over 40 million people, or two-thirds of the population in the Lower Mekong Basin, are involved in the Mekong's fisheries at least part-time or seasonally. According to scientists, the Xayaburi Dam would devastate these fisheries and the river's ecosystems. In the upcoming months, the governments of Cambodia, Lao PDR, Thailand, and Vietnam will decide whether or not the Xayaburi Dam will move forward.

In May 2011, the Lao PDR government hired Swiss engineering company Pöyry Energy AG to review the Xayaburi Dam's compliance with Mekong River Commission (MRC) requirements for mainstream dams. Pöyry has recommended that the dam move forward, despite identifying many gaps in knowledge about the full extent of potential impacts. International Rivers has critically reviewed the contents of the Pöyry report1, and found it to be filled with biases and inconsistencies, and lacking in scientific credibility.

A test case for the Mekong mainstream dams

Dozens of dams have already been built on the Mekong's tributaries, but none have been built on the Lower Mekong Mainstream. As the first project to invoke the MRC's regional consensus-building "prior consultation" process, the Xayaburi Dam is a test case for how governments will make decisions about the Mekong Mainstream Dams. What happens in the coming months will set a precedent for the coming decades.

The Lao government first notified other governments of its proposal to build the Xayaburi Dam in September 2010. In April 2011, the four governments decided to postpone their decision on whether to build the dam to a future ministerial-level meeting due to concerns expressed by Cambodia, Thailand, and Vietnam over the dam's transboundary impacts. Nevertheless, Lao PDR unilaterally declared it had completed the prior consultation process after the April meeting. Preparatory construction on the dam has been underway since late 2010 by the project's main developer, Ch. Karnchang of Thailand.

Mekong River Commission's standards for mainstream dams

The MRC has issued a set of technical guidelines which member governments use to evaluate proposed projects in the Mekong River basin. The MRC's Preliminary Design Guidance on Mainstream Dams sets forth specific requirements related to fish passage, sediment transport and river morphology, water quality and aquatic ecosystems, dam safety, and navigation systems. The MRC's 2011 technical review of the Xayaburi Dam identifies recommendations and areas of non-compliance based on the project developer's reports and studies by expert panels. Together, these documents inform decision-making at the MRC.

Unsurprisingly, Pöyry finds that the Xayaburi Dam complies with these standards

After receiving pushback from the other governments at the April 2011 meeting, the Lao government hired Pöyry Energy AG to evaluate Ch. Karnchang's compliance with the MRC's standards. Yet only a few hundred kilometers away from the proposed Xayaburi site, Pöyry and Ch. Karnchang are business partners on another hydroelectric project in Lao PDR, the Nam Ngum 2 Dam. This conflict of interest is apparent in the report, whereby Pöyry concludes that the project "has principally been designed in accordance with the applicable MRC Design Guidelines," despite listing over 40 major scientific and technical studies that still need to be completed (see Annex 1).

In August, Pöyry submitted its findings to the Lao government. The Pöyry report was not disclosed publicly, and has only recently been leaked. There is still a great deal of confusion about its contents, as Lao PDR did not cooperate with its neighbors or the MRC on the study, and as it is being misconstrued as an "environmental impact assessment." It is also being treated as an "official" compliance review, when Pöyry has no actual authority to interpret the PNPCA process.

Report replaces science with guesswork

International Rivers identified at least fifteen fundamental MRC requirements with which the Xayaburi Dam still does not comply (see Annex 2). The Pöyry report omits mention of many of these requirements, and draws conclusions about environmental and social impacts based largely on guesswork. As Pöyry itself notes, there are major gaps in scientific and technical data. Without this baseline information, it is impossible to determine credible mitigation measures. Some of the major shortcomings of Pöyry's analysis include:

  • Impacts on fisheries: With an estimated value of $5.6 to 9.4 billion each year, the Mekong River Basin's fisheries play a major role in the region's economies. Because of the risk that dams can block critical fish migrations, the MRC requires projects to incorporate a fish passage technology that ensures safe passage for 95 percent of target species through the dam site under all flow conditions. Pöyry makes no mention of the 95 percent requirement, and assumes that any impacts can be mitigated using technologies that have never been tested for Mekong fish species or ecosystems. These unproven measures are being promoted despite strong scientific evidence from fishery experts around the world that no technology exists to effectively mitigate Mekong Mainstream Dams' impacts on the river's fisheries. As Pöyry itself states, "the knowledge concerning the specific requirements of the aquatic fauna on the fish passage facilities is not sufficient." In addition, both the MRC and Pöyry found that there is not enough understanding of impacts to develop adequate compensation measures for affected communities who will suffer fishery losses.
  • Impacts on ecosystems: The MRC requires project developers to assess impacts of the dam on the interconnected elements of aquatic ecosystems-including water flows, water quality, fish habitats, wetlands, and people-using an environmental flows assessment. Pöyry concludes that the Xayaburi Dam "is principally in compliance" with these requirements, yet simultaneously acknowledges that an assessment has not been done. Pöyry also lists numerous baseline studies that are still needed "to be in compliance with the MRC guidelines."
  • Impacts on sediment flows: The sediments that flow down the Mekong River provide nutrients on which the river basin's farmers and fish depend. The MRC requires dams to regulate sediment flows in a way that mimics natural conditions. Pöyry proposes a "flushing outlet" solution for mitigating risks to sediment loss, while simultaneously acknowledging that the river's natural sediment flows have not been studied.
  • Impacts on dam safety: The MRC requires dams to meet the World Bank's dam safety guidelines, including the formation of an independent expert panel to monitor the project from the design phase onwards. Pöyry does not mention or assess this requirement. Meanwhile, Pöyry concludes that the project does not face a risk from earthquakes, despite acknowledging that studies about earthquake risks are ongoing and incomplete. Three earthquakes have occurred within 300 km of the project site in the past five years.

Report recommends that Lao PDR ignore other governments' concerns

As part of the PNPCA process, governments have a right to raise concerns about a proposed project and request additional information. At the April 2011 meeting, the governments of Cambodia, Thailand, and Vietnam all raised serious concerns about the potential transboundary impacts of the Xayaburi Dam. All three governments noted that further studies were needed to understand the full extent of the impacts. The MRC's technical review of the project also reached the same conclusion.

Nevertheless, Pöyry concluded that it was not the responsibility of the project developer to assess transboundary impacts. Pöyry also interpreted the PNPCA process to be completed, in direct contradiction of statements by the MRC. According to Pöyry, the Lao government is able to make a unilateral decision on whether the Xayaburi Dam goes forward, and is free to disregard the concerns of member governments and the MRC's technical experts.

Xayaburi: An untested and potentially devastating project

The Pöyry report demonstrates that it is premature to move forward with the Xayaburi Dam, given the absence of broader knowledge about the impacts of the Mekong Mainstream Dams. The poor quality of the report, inherent biases that prevent objective analysis, and lack of responsiveness to member governments' concerns make it an unsuitable basis for decision-making. If anything, the report demonstrates the urgent need for further study of the potential impacts of the Xayaburi project, before the Lao government risks the lifeblood of the entire region.

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1 Pöyry Energy AG (9 Aug 2011), Compliance Report: Government of Lao PDR, Main Report, Xayaburi Hydroelectric Power Project, Run-of-River Plant [hereinafter "Pöyry report"].