An Update on the Environmental and Socio-Economic Impacts of the Nam Theun-Hinboun Dam

Tuesday, August 17, 1999

This field report is based on a 1999 survey of villages affected by the Theun-Hinboun Hydropower Project. Investigations were primarily conducted to evaluate whether the process for assessing, negotiating, and allocating compensation to local people for project-related impacts has developed to the satisfaction of villagers and as envisioned by the Asian Development Bank.

The Nam Theun-Hinboun Hydropower Project (THHP) in central Lao People's Democratic Republic (Lao PDR or Laos) began operating in early 1998. Most of the Lao PDR Government's equity in the THHP was financed by a US$60 million loan from the Asian Development Bank (ADB). The ADB was quick to claim that environmental and socio-economic impacts resulting from the THHP would be minimal and largely inconsequential (Gill, 1998). However, in March, 1998 independent investigations of the THHP revealed serious environmental and socio-economic impacts resulting from the project (Shoemaker, 1998).

In November, 1998 the ADB sent a second mission to assess the impacts of the THHP. While the second mission did not present entirely accurate information regarding project impacts, and continued to downplay some important problems, including those related to resettlement and compensation, one notable improvement was that the ADB acknowledged for the first time that the project impact area should be expanded to include the Hinboun River downstream from its confluence with the Nam Hai River to its confluence with the Mekong River, and the Kading River downstream from the THHP to its confluence with the Mekong River. Many issues not covered by the first mission were more reasonably addressed by the second. Finally, the ADB's report included a timetable for reviewing and assessing the impacts of the THHP on villagers throughout the expanded impact area in preparation for the provision of adequate and timely compensation for affected local people.