The Dam Industry’s Brave New World

  There was a time when we were all expected to follow the law. There was a time when we had to respect clear social and environmental standards if we wanted to build a dam with international funding. These days may soon be over if the hydropower industry has its way. A new initiative called the Hydropower Sustainability Assessment Forum puts social and environmental rights and standards at risk.

Over the last 20 years, the World Commission on Dams, the World Bank and various UN bodies issued standards and policies on the development of international infrastructure, mining and forestry projects. They covered topics such as how to compensate project-affected people, protect ecosystems, and prevent corruption.

The dam industry was never happy with this standards and rights-based approach. Together with a few governments, financial institutions and environmental organizations, the International Hydropower Association (IHA) created the Hydropower Sustainability Assessment Forum (HSAF) to come up with a new approach in 2007. The goal of this forum is to develop a “broadly endorsed” protocol to measure the sustainability of hydropower projects by the end of 2009.

My impression is that some industry representatives indeed try to avoid future development disasters, which they fear will hurt their whole industry. Others hope that establishing broadly accepted guidelines will help them access government subsidies and carbon credits. The EU requires hydropower projects that sell carbon credits to the European market to comply with the WCD framework. IHA and WWF have already written to the EU Commission suggesting that in the future, such compliance be measured by an HSAF protocol.

The new HSAF protocol will contain sustainability criteria on approximately 80 aspects. The Forum published an interim report on the protocol in January 2009. This report presents a fundamentally flawed approach. The interim document does not cover important aspects such as human rights impacts, a basin-wide approach to rivers, the cumulative impact of environmental impacts, the compensation of people who lose access to common resources (such as forests, fisheries etc.) or the risk of reservoir-induced earthquakes at all.

Maybe more importantly, the report almost completely ignores existing standards and policies in the aspects that it does cover. No word on indigenous peoples’ right to free prior informed consent. No mention of land-for-land compensation for affected people, the right to access project information, labor rights in dam construction, and other hard-won achievements. No acknowledgment of the need to follow international competitive bidding procedures to discourage corruption, and to respect ecological no-go zones such as national parks and Ramsar sites.

The interim report instead proposes to score vague aspects such as the “likelihood of compliance with regional and national plans”, the “quality of the project communication strategy”, the “quality of the labor management system”, the “quality of plans to manage for biodiversity and conservation objectives”, and the “level of compliance with resettlement legislation and standards requirement”. In other words, HSAF proposes to replace clear minimum standards with consulting reports and management plans. It asks affected people to trade in hard-won rights for a lot of consultants speak.

The problem of lacking standards is compounded by HSAF’s focus on scoring. I trust that a future HSAF protocol will not give projects high social and environmental marks if they impoverish thousands of people and destroy important ecosystems. But it is in the nature of scorecards that low scores in certain aspects can be offset with higher marks in other aspects. So projects that degrade valuable ecosystems could pass the HSAF bar if they have a good construction, safety and communication management. Projects that displace a hundred thousand people could pass the bar if they have high financial returns. Such an approach ignores that if a project is to be sustainable, social, environmental and economic principles all have to be respected and cannot be traded off against each other.

The process through which the new Sustainability Assessment Protocol is being prepared illustrates how affected people are being disenfranchised. While all interested groups were invited to participate in the WCD process from the beginning, the HSAF is a self-selected group. Dam-affected people and Southern NGOs are not represented at the negotiating table. HSAF spokespeople argue that they could not find a member who would represent all Southern civil society groups. They clearly set a higher bar for civil society than for the other participants in the Forum.

The Forum started a belated consultation process in January, half-way through the HSAF process, and will carry out a second consultation phase in September. By then, the new Sustainability Assessment Protocol will almost have been completed. This will not create the “broad endorsement” which HSAF is officially seeking.

International Rivers just prepared a detailed critique of HSAF’s interim report, and shared it with the Forum members. We will continue to monitor the HSAF process, and will make sure a flawed approach will not replace the WCD framework as the leading international benchmark for hydropower projects.

Peter Bosshard is the policy director of International Rivers. His blog, Wet, Wild and Wonky, appears at www.internationalrivers.org/en/blog/peter-bosshard