Activist Guides to Sinohydro’s Environment and Social Policies

Thursday, December 11, 2014


To support local NGOs and communities understanding of the different standards and commitments applicable to Sinohydro projects around the world, we have developed two user guides to Sinohydro’s environmental policies to reflect the differentiated levels of responsibilities when undertaking hydropower projects overseas. 

In most cases, Sinohydro plays the role of EPC Contractor (Equipment, Procurement and Construction), responsible for building the project but not developing or operating the completed hydropower dam. However, in a growing number of cases, Sinohydro has played the role of project developer under the BOT model (Build, Own and Transfer), investing its own money to build a hydropower project and recouping the investment costs by operating the dam over several decades. 

The different ways that Sinohydro gets involved overseas dam building is now reflected in the company’s internal structure. In 2012, Sinohydro Resources was created to solely manage BOT projects, while Sinohydro International Corporation Limited maintains responsibility for EPC contracts. Both companies are owned by PowerChina, a Chinese state-owned company.

The two user guides, one for Sinohydro Resources and one for Sinohydro International detail the different levels of environmental and social policy commitments made by the management of these companies.

Sinohydro Resources’ General Manager has advised International Rivers that it used the World Bank’s safeguard policies as its baseline. However, there has been little evidence that these policy aspirations are being achieved in practice. For example, Sinohydro Resources is investing in the Stung Chaey Areng Dam in Cambodia’s Protected Cardamom Forests, and has plans to build a large dam in a National Park in the Upper Reaches of the Nam Ou in Lao PDR. Both projects would violate Sinohydro Resources’ commitment to follow World Bank standards.

Sinohydro International has released three basic policy documents have been since 2013 (Sustainable Development, Ethical Principles and Health, Safety Environment Policies). International Rivers has prepared its user guide based on the policy commitments adopted to date.

It is important that users of this guide work out whether Sinohydro is the project developer or construction company engaged by the project developer.

If Sinohydro is developing the project, then the company will have environmental and social policy responsibilities through the lifecycle of the project. They are discussed further here.

If Sinohydro is acting as a contractor, either as an EPC Contractor or has a construction contract, the following responsibilities contained in this guide may apply.

If in doubt, we encourage NGOs to contact Sinohydro to clarify the nature of the company’s involvement. Our International Rivers’ China Program Director is also able to help with additional research and analysis on this matter.