By Harald Eraker
The new port is constructed by the joint venture company Baria Serece, owned 20% by Norsk Hydro. It is situated by the Thi Vai river, 70 kilometres from Ho Chi Minh City in the southern part of Vietnam. The port, called Phy My Port, is constructed to dock ships of a deadweight tonnage of up to 40,000 tonnes, and it is part of a larger industrial complex which is under construction.
In 1995, NORAD granted a loan of 13.8 million kroner to the project, and the World Bank has supported the construction with a loan of 3 million US dollars.
Both Hydro's port facilities and the surrounding industrial complex are situated in an area which was previously covered by mangrove forest, or swamp forest, as it is also called. In Vietnam, as in tropical areas generally, the mangrove forest is heavily strained by the increase in population, breeding of shrimps, and industrial development. In spite of this, neither NORAD nor the World Bank has carried out a complete environmental impact assessment of the Hydro project.
- Financing a coastal development project without carrying out a complete environmental impact assessment, including the effects on mangrove forest, is extremely irresponsible, and a total violation of the principles of sustainable development, says researcher Mick Kelly at the University of East Anglia in England.
For many years he has, along with researchers from University College London, studied the importance of the mangrove forest for the environment and population in Vietnam, and he is surprised that NORAD and the World Bank have supported Norsk Hydro's port construction so uncritically.
According to Kelly, the mangrove forest and its ecological system have two vital functions, especially for poor people along the Vietnamese coast. Firstly, it provides the local population with fish, crabs, shrimp, wood, honey, and other vital products.
Secondly, it works as a natural buffer zone against the destructive typhoons which hits the country's coast every year.
- Because of lost mangrove forest on the Cau Mau peninsula, for example, the effects of the typhoon Linda in 1997 were aggravated, says Kelly, who adds that the mangrove forest in Vietnam has been put under hard pressure ever since the war.
- Preservation of the remaining areas of mangrove forest, and rehabilitation of damaged ecosystems should be a main priority, he says.
"Neither the consultant nor the technical office (INFRA) has pointed out the possibility of environmental problems resulting from this project."
NORAD's pledge document to Hydro's port project in Vietnam
- Wrong category
The bone of contention in this case lies in the assessments made by NORAD and the World Bank before they get involved in actual projects. They both employ three categories of projects when deciding on the need of environmental impact assessment (EIA).
The first category includes projects in which any possibility of environmental problems is ruled out, because of the nature and size of the project. No sort of environmental impact assessment is carried out in projects belonging to this category.
The second category includes projects where there is a possibility of some environmental impacts, but where they are considered small and fairly easy to handle. In these cases, some environmental assessments are carried out, depending on what is seen as relevant problems. However, a complete environmental impact assessment is not necessary.
The last category comprises projects that may have large environmental consequences, which make NORAD and the World Bank demand a complete environmental impact assessment before any aid is granted.
Norsk Hydro's port project has been placed in the second category by NORAD and the World Bank. Many experts, whom NorWatch has contacted, are critical towards this in-advance assessment. They think this is an easy way to disclaim responsibility for the environment.
- In my opinion, the project should have been placed in the third category, because it is impossible to say in advance how serious consequences it will have for the environment and for human beings. Apparently, the categorization is used as an excuse not to do a proper environmental impact assessment, says Kelly, who emphasizes that he has not carried out any particular study of this project.
"Financing a coastal development project without carrying out a complete environmental impact assessment, including the effects on the mangrove forest, is extremely irresponsible, and a total violation of the principles of sustainable development."
Mick Kelly, mangrove forest researcher in Vietnam
No environmental problems
According to NORAD, Norconsult carried out a technical and economic analysis of the port project in 1994. This analysis also addressed environmental aspects.
"The conclusion of the analysis was that any negative environmental impacts were limited and did not render a complete environmental impact assessment necessary...", says NORAD in a letter to NorWatch.
NORAD's pledge document says: "Neither the consultant nor the technical office (INFRA) has pointed out the possibility of environmental problems resulting from this project."
Norconsult's Ragnar Evjen, however, informs NorWatch that there was no examination of the port's impact on the mangrove forest in the NORAD-financed report. Norconsult only addressed possible pollution from the port structures, and the positive impact the new port will have on the environment because it will provide some relief to the overburdened ports elsewhere in Vietnam.
The World Bank's environmental assessment of the project has also evaded the problems related to felling mangrove forest, even though their report mentions that "some mangrove trees" exist in the area where the port will be constructed.
Information manager Sverre Bjerkomp in Hydro Agri has no opinion on the problems of the mangrove forest, and refers to NORAD for comments.
- We have reassessed the evaluations which formed the basis for our decision to support the project, and we have no further comments apart from what we have already said in our letter to you, says head of the division of trade and industry in NORAD, Hallvard Lesteberg.
He adds that he is reassured by NORAD's decision to support the project, because the local authorities in Vietnam have been involved in the project and approved of it. Lesteberg also points out that the World Bank is responsible for following up the environmental aspects of the project, and he thinks that it is well taken care of.
- But in other cases we have refused to support projects which imply the felling of mangrove forest, so this is a problem we are aware of, says Lesteberg.
Norsk Hydro's motivation for participating in the construction of the port facilities, is the company's interests in importing fertilizer into Vietnam. Hydro also plans to construct a fertilizer plant within the mentioned industrial complex.
Neither NORAD nor the World Bank has assessed the port project in the context of the development of an industrial complex, which is situated in an area which was previously covered by mangrove forest.
Norsk Hydro in Vietnam
Norsk Hydro owns 20% of the joint venture company Baria Serece, which is constructing Phy My Port in Vietnam. The other owners are two French companies (with 40% together), and four Vietnamese companies (also 40% together). The project was supported with 13.8 million kroner by NORAD in 1995.
The planned fertilizer plant is owned by Hydro Agri Vietnam, of which Hydro owns 67%, while two Vietnames companies own the remaining 33%.
Norwatch Newsletter 21/98