International Rivers/Probe International letter to World Bank

Tuesday, April 29, 2003

Re: The World Bank and Electricity of Vietnam Corporation's Failure to Compensate for Damages Caused by Se San River Hydro Development

Mr. Jeffrey S. Gutman
Director, Strategy and Operations
East Asia and Pacific Region
The World Bank
Washington DC
Fax: 202 477 0169

Dear Mr. Gutman:

Thank you for your response of February 24, 2003 to our letter of October 10, 2002 to Bank President James Wolfensohn, and Executive Directors for Canada and the United States.

In response we would like to clarify several points and request further action from the Bank.

First, we understand that the World Bank did not finance Vietnam's Yali Falls dam nor did we claim this in our letter. Rather our point is that the Bank has provided US$575 million worth of loans to the dam owner, Electricity of Vietnam Corporation (EVN), for transmission and distribution facilities, including the transmission line from Yali Falls dam to Ho Chi Minh City.

Therefore, while the Bank is not financing the construction of Yali Falls or other dams along the Se San River, Bank financing for EVN's transmission lines is a subsidy to its hydro dam investments, without which EVN could not deliver its output from Yali Falls to demand centers throughout the country. EVN will likely repay its World Bank transmission loans using revenues generated from Yali Falls and other hydro projects, therefore the Bank has a clear interest in the viability and integrity of EVN. We therefore expect the Bank to ensure that EVN accounts for the cost-side of its dam operations in an honest, timely, and accountable manner.

We are pleased that the Bank intends to discuss the concerns raised by affected communities and citizens groups with its clients, the Governments of Vietnam and Cambodia, and the Phnom Penh-based Mekong River Commission. During these discussions, we urge you to press EVN to do the following:

  • halt construction of all further dams on the Se San River, including Se San 3, until an open and independent assessment of the environmental damages and economic losses caused by the first dam, Yali Falls, is completed and made public;
  • respect the rights of people living downstream of Yali Falls - this includes the right to fair and timely compensation for economic losses, and the right to negotiate with EVN environmental mitigation measures for minimizing the adverse effects of dam operations on the Se San riverine environment.
  • So that we may keep concerned citizens in Bank-donor countries informed about the Bank's response, and so that citizens groups working with affected communities in Cambodia and Vietnam can be kept informed about their governments' responses, we would appreciate it if you could provide the following:

    1. Dates for consultations between the Bank and EVN, between the Bank and the Government of Cambodia, and between the Bank and the MRC to discuss problems created by Yali Falls and Se San 3.

    2. A written record of responses from EVN and other Bank clients regarding EVN's compensation and environmental mitigation plans for Se San communities and their river system.

    Finally, we would like to know whether EVN's response to these issues will have an impact on further Bank lending to EVN.

    We would appreciate your response at your earliest convenience.


    Grainne Ryder
    Policy Director Director
    Probe International
    225 Brunswick Ave, Toronto, ON M5S2M6

    Fax: (416) 964 8239

    Aviva Imhof
    Southeast Asia Program
    International Rivers
    1847 Berkeley Way, Berkeley CA 94703

    Fax: (510) 848 1008

    Endorsed by:

    Mishka Zaman
    Manager, Asia Program
    Bank Information Center, USA

    Tep Bunnarith
    Culture and Environment Preservation Association, Cambodia

    Ian Baird
    Global Association for People and Environment, Canada

    cc:   Mr. Marcel Mass�
    Executive Director for Canada

    Ms. Carole Brookins
    Executive Director for US

    More information: 
    View IRN/ Probe International's original letter and the World Bank's response.