Mekong dams test a 'special relationship'

17 May, 2011
By David Brown
Source: ATime

Plans to develop a cascade of hydropower dams on the Mekong River's mainstream in Laos have moved to front and center among Vietnam's strategic concerns.

Pressed by Laos to consent to the first of up to 12 similar dams, a megaproject scheme aimed at transforming the landlocked country into a big energy exporter, Vietnam instead orchestrated a Mekong Regional Commission (MRC) decision on April 19 to kick the question to the ministerial level. The MRC consists of Cambodia, Laos, Thailand and Vietnam and was formed by an agreement to jointly manage the sustainable development of the Mekong River Basin.

Although recent technical analysis points to catastrophic consequences for the farmer and fisher economies of Cambodia and Vietnam's southern Mekong Delta, plans for the first of the dams at Xayaburi are already far advanced. If Laos can shore up Thai support and retain Chinese backing, the dams may yet be built despite Laos' "special relationship" with neighboring Vietnam. Hanoi has called for a 10-year moratorium on consideration of the mainstream dams, a request Vientiane has so far resisted.

Impoverished Laos has long cherished the notion of becoming the ‘battery of Southeast Asia', a development plan that aims to give its six million population an economic lift by exporting hydroelectric power to its more developed neighbors. Already dozens of dams have been built or are under construction on tributaries of the Mekong in Laos. Power exports currently account for around 30% of Lao gross domestic product (GDP).

By some estimates, the proposed cascade could generate over eight gigawatts - equal to half of neighboring Thailand's current annual electricity requirement - by exploiting the potential of the Mekong's mainstream. There's a downstream catch, though: evidence has mounted that if built Laos' Mekong dams would greatly reduce and possibly stifle the annual flood pulse that brings rich sediments to Vietnam's vast southern delta and Cambodia's great lake, the Tonle Sap, and wreak havoc on regional fisheries.

Hanoi did not initially pose objections to Laos' grand plan. The emerging confrontation puts at risk Hanoi's ‘special relationship' with the Lao leadership, its junior revolutionary comrades in arms during the wars against colonial France and later the US. Vietnam's military and police ties with Lao counterparts are especially close, cemented by lucrative commercial connections involving chiefly the lumbering of Lao forests.

The two nations' national electricity companies also cooperate. Under an umbrella agreement envisioning three to five gigawatts of annual power exports from Laos to Vietnam by 2020, Vietnam's EVN has arranged financing, engineering and construction services for half a dozen hydropower plants in Laos on Mekong tributaries and had undertaken to build one of the planned mainstream dams. By 2013, a new high voltage transmission line financed by Japan and the Asian Development Bank (ADB) is expected to shunt power from southern Laos to Vietnam's central highlands region.

As both countries have transitioned towards market economics and greater participation in the global trading order, Vietnam has struggled lately to maintain economic and military influence in Laos against a strong challenge from China. Chinese ascendancy in neighboring Laos would pose a geopolitical nightmare for Vietnam's strategic planners, who are already locked in a test of wills with Beijing over contested maritime areas.

In light of its own cascade of upstream Mekong dams - four of a planned seven are already complete - China is squarely in the corner of Laos' dam-building program. Beijing is willing to bankroll what the ADB, belatedly alert to the dams' environmental impacts, will not; Chinese contractors and banks have queued up to finance, build and operate at least four of Laos' planned mainstream dams.

Philip Hirsch, in the May issue of Asia-Pacific Journal, wrote "the hydrological, economic and political implications of China's development ... push[ed] inevitably toward construction of dams on the lower Mekong mainstream." Hirsh points out that by stabilizing the Mekong's flow, the Chinese cascade makes the planned Lao dams economically feasible, for they can be financed only if it is possible to operate them year-round.

Meanwhile, environmentalists have been ringing alarm bells for several years, building a strong case that freshwater fisheries in the river system will not survive Laos' dam projects. Though nongovernmental organization (NGO) concerns from groups like the World Wildlife Fund and International Rivers were reflected in staff studies commissioned by the MRC, the officials representing its member countries, predominantly power ministry executives, seemed unperturbed by their findings.

Perception shift
As long as the problem was posed as a matter of preserving endangered aquatic populations, including the Mekong giant catfish and the Irrawaddy dolphin, the regional response was likely to be a collective shrug. But when groups like environmental watchdog International Rivers succeeded in reframing the problem the dams posed as one of irreversible economic catastrophe, policy makers in Hanoi began to pay attention.

Strategic concerns and economic ties had driven Vietnam to mute its concerns as the mainstream dam projects moved forward. It took the imminent construction of the Xayaburi dam, to be built just upstream of the Lao capital, to prompt Hanoi to action.

In 2006 and 2007, the Lao government signed memoranda of understanding for the construction of no less than seven dams with Thai, Vietnamese and Chinese developers. The first of these to close financing was the Xayaburi project, a US$3.8 billion, 1,285 megawatt hydropower complex to be built by Thai contractor CH Karnchang and financed on the strength of a Thai commitment to take 95% of the dam's power.

In October 2010, with site preparation work already underway, Laos asked the MRC secretariat to schedule a formal process of "prior consultation and agreement" on the Xayaburi project with its MRC partners, as prescribed by the organization's charter. Accordingly, the MRC staff circulated to the group's four member countries an environmental impact assessment (EIA) prepared by the Thai private contractor.

When environmental NGOs saw the assessment, which wasn't made public until this March, they were duly unimpressed. The EIA failed to address trans-boundary impacts, consider the cumulative effects of Xayaburi and the other 10 dams planned for the Lower Mekong, and was short on technical information and analysis, according to International Rivers.

While Vietnam officially considered Laos' request for concurrence of the plan, a groundswell of public concern became evident in Vietnam as some newspapers and bloggers reported the warnings voiced by scientists and environmental campaigners. Farmers afflicted by drought in the Mekong Delta pointed to the late arrival of the flood pulse last year as evidence that the dams already constructed on the upper Mekong in China had reduced the river's rainy season flow.

Cambodian media, too, gave prominent play to the "potentially catastrophic ... dam threat" in Laos. In Thailand, the media questioned whether the cheap, reliable power benefits of the Lao projects were worth the predicted damage to riparian fishing communities in the country's already poor northeastern region.

For the leadership in Hanoi, and apparently also in Phnom Penh, the media buzz ensured that the Lao request would be weighed at the highest level. In Vietnam, the politburo may have apprehended a public backlash that - like the China-invested bauxite mines controversy two years ago - could call into question its ability to defend the national interest.

Prime Minister Nguyen Tan Dung and his colleagues don't want to be remembered as the leaders who failed to foresee the mortal dangers that Xayaburi and more dams like it in Laos pose to the economy of the Mekong Delta, where agricultural and fishery products contribute 10% of national GDP.

As the 25 million people who live in the flood plain of the Mekong well know, the annual surge of silt-laden waters is critically important to its bountiful harvests. The floods rinse out salts, limit sea water invasion and enrich the soil. As water levels rise, Cambodia's "great lake," the Tonle Sap, is flooded until it reaches as much as 100 times its dry season volume. The flood pulse triggers the annual migration and spawning of river fish that provide most of the animal protein for the region's population.

Regional ripples
A single dam at Xayaburi, or even the four additional mainstream dams that China is building upriver, might not greatly reduce the Mekong's downstream bounty. It seems beyond doubt, however, that the stabilization of the river's flow that would inevitably result from the construction of Xayaburi and six to ten more dams on the lower Mekong would eventually be a catastrophe for millions of Vietnamese farmers and fishermen.

Hints that Hanoi was rethinking its posture of "non-concern" emerged from a well-attended workshop organized in the Delta's chief city, Can Tho, in mid-January. Briefings by members of the nation's Mekong Committee delegation raised, according to an official minute, "strong concerns about the severe impacts of the mainstream dams". Local officials and experts reportedly judged the documentation provided by Xayaburi project developers as "inadequate ... and lacking appropriate assessment of its trans-boundary and cumulative impacts downstream".

The Can Tho workshop and a second meeting convened five weeks later near Hanoi concluded that the decision on dam construction "should be deferred ... for five to 10 years, to conduct further studies". The Xayaburi dam, Deputy Minister of Environment Nguyen Thai Lai emphasized, "must be assessed in the context of the entire proposed mainstream dam system". Lai was echoing a proposal put forward in an experts' report commissioned by the MRC that was released last October.

In the few days before the April 19 MRC consultations, a spate of stories in Vietnamese media quoting prominent local scientists pumped up domestic awareness of what's at stake if the Xayaburi dam is built. One even referred to the Xayaburi dam as "just the first cannon shot". If the entire cascade of dams on the lower Mekong is built, one scientist was quoted as predicting, the volume of silt reaching Vietnam's delta provinces would be reduced by 70%.

The high profile reportage foreshadowed the government's position. It seemingly confirmed not only a politburo decision to head off the Mekong mainstream dam projects but also Vietnamese confidence that Cambodia and, remarkably, Thailand would join Vietnam in insisting on further study of the Xayaburi scheme.

At the April 19 meeting, Lao representatives to the MRC, pressed to put Xayaburi on hold pending further studies, reluctantly agreed that the scheme should be tabled for consideration at the ministerial level within the next six months. A few weeks later Vientiane halted preparatory work on the project pending a critical review of the Thai contractor's environmental impact assessment.

It's possible that the collective "no-decision" recorded on April 19 will prove to have been a turning point, a decisive rebuff to the development at all costs mentality that has prevailed to date in the region, a mentality that has been supported and sometimes driven by both public and private multinational partners.

By challenging Vientiane on a cherished and crucial development project, Hanoi has signaled that it's prepared to stand firm even at the cost of significant damage to the bilateral 'special relationship'. And now that its 88 million citizens have been alerted to what's potentially at stake vis-a-vis its smaller neighbor, Vietnam's leadership no longer has the option to soft pedal.

If Laos presses the issue, the outcome is by no means certain. Though not a MRC member, China will doubtless weigh in offstage. It can remind Laos of its readiness to finance construction of the mainstream dams and intervene with the Cambodians, who typically count on Beijing to support it against unwelcome pressure from Vietnam and Thailand.

Thailand holds the deciding vote. If Bangkok decides that it will find another way to manage its power requirements over the next few decades, Laos lower Mekong cascade plans could evaporate. Given current tensions in Thai politics, however, long-term planning has taken a back seat to short-term survival strategies.

With no economic interests at stake, Western governments will likely look for ways to intervene on the side of the environment. This could yet lead to a concerted diplomatic effort to help Laos save face while scrapping the plans through the award of some sort of consolation prize, perhaps including substantial new credits for less controversial development projects put up by multilateral banks.

David Brown is a retired American diplomat who writes on contemporary Vietnam. He may be reached at nworbd@gmail.com.