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NORAD says no to controversial project in Lesotho: "Realities of the world" make Kværner say yes

In 1993 the Norwegian Agency for Development Cooperation (NORAD) turned down applications from Norwegian companies for support for the Lesotho Highlands Water Project, stating as a reason the project's negative environmental impact. The giant project in the small mountainous country in central South Africa is very controversial because it entails forced relocation, loss of arable land, and environmental damage. Kværner, which through subsidiaries in England and South Africa has supplied equipment for approximately NOK 95 million for the project, refers to "the realities of the world" and the fact that Lesotho itself has decided to go ahead with the development project.
Artikkelen er mer enn to år gammel. Ting kan ha endret seg.
In 1993 the Norwegian Agency for Development Cooperation (NORAD) turned down applications from Norwegian companies for support for the Lesotho Highlands Water Project, stating as a reason the project's negative environmental impact. The giant project in the small mountainous country in central South Africa is very controversial because it entails forced relocation, loss of arable land, and environmental damage. Kværner, which through subsidiaries in England and South Africa has supplied equipment for approximately NOK 95 million for the project, refers to "the realities of the world" and the fact that Lesotho itself has decided to go ahead with the development project.


By Marte Rostvaag Ulltveit-Moe, Morten Rønning and Harald Eraker
Norwatch

The Lesotho Highlands Water Project (LHWP) is, says the International Rivers Network (IRN), the largest infrastructure project under construction in Africa. The Lesotho Highlands Development Authority (LHDA), which is in charge of the development, has been described as a "state within the state" with a budget of USD 8 billion - more than Lesotho' s annual national budget.

The purpose of the project is to divert water from the Sengu and Orange rivers in Lesotho to South Africa's industrial areas, and to provide Lesotho with electric power.

The plan is to build five dams, one power station, water pipelines, several hundred kilometers of roads, and other infrastructure in five stages. The 182-meter high Katse Dam (Africa's highest) and the 55-meter high Muela Dam have been completed, and constitute stage one of this joint venture project implemented by the two neighboring countries.

Whether or not the rest of the project will be completed, is a moot question. South African authorities have indicated that new studies regarding the country's water needs are planned. The controversies - internationally and locally - around the LHWP have not made Kværner ASA reconsider its involvement in the project. The company landed its largest contract through Kværner Boving, its English subsidiary, which has supplied 3 turbines worth about NOK 90 million for the Muela power plant.

Moreover, the Norwegian industrial giant has, through its partly owned South African subsidiary Cementation Africa, secured four equipment supplies for various parts of the LHWP. The value of these contracts is approximately NOK 5 million, and includes sluices for the Katse Dam.

The way the world is
- We have to deal with reality. Lesotho has decided to develop: They'll get turbines from us, or buy them from other companies. That's how competition works in the world. After all, we have the responsibility to keep a number of people employed, says head of information Marit Ytreeide of Kværner ASA at Lysaker.

- Kværner's failure to show responsibility comes as no surprise. Where other companies at least say they're willing to address reprehensible conditions, Kværner has attitudes not befitting a responsible company, says director of The Future in Our Hands Norway, Tor Traasdahl.

According to the IRN, 24,360 persons will be affected by the first stage of the project, either by having to move (312 families), or by losing agricultural and grazing land. Another 8,400 persons will lose their homes due to the Mohale Dam, which is part of the second stage of the project.

Grain for 15 years
Under project guidelines, compensation for lost land is supplies of seed grain for 15 years, and new houses for those forced to move. But this is a slow process; many who lost their houses during the 1990-91 development, still had not received new homes in October 1995, says the World Bank.

According to the IRN, the World Bank is the biggest lender for the project with a total of USD 118 million for the first stage.

- People should have been offered land, not seed grain for 15 years. The compensation will only last for 15 years, but land you have forever. In the long run those who lose their land, will be worse off. Land for land is the only fair solution, says coordinator Mawinnie Kanetsi of the Transformation Resource Centre to NorWatch.

The Transformation Resource Centre has since spring 1997 monitored the forced relocation process, and Kanetsi says that seed grain as a compensation leads to an unwanted dependency syndrome.

- Grain can never replace lost land, says Kanetsi.

Wide-ranging consequences
About 11,000 hectares of agricultural and grazing lands will be lost as a consequence of the LHWP. Because only 9-10% of Lesotho's area is cultivable, any loss will have great national consequences, says the IRN. 3,000 hectares of grazing land and 925 hectares of arable land have already been lost during the project's first stage, whereas another 1,500 hectares of grazing land and 1,020 hectares of arable land will disappear during stage two.

The Association for International Water and Forest Studies (FIVAS) in Oslo has for years observed hydroelectric projects all over the world. In a report concerning conflicts in connection with hydroelectric development, its comment on the LHWP's occupation of land is as follows:

"Compared with other development projects, the area in question is relatively small, but seen in relation to the total area of arable land in Lesotho, the loss of land is significant, and will have wide-ranging consequences for the community."

FIVAS also points to other environmental consequences of the project, such as the danger of increased erosion and reduced fish stocks, as the discharge of cold and warm water from the four reservoirs will have a serious impact on the conditions for fish in the rivers.

The report further says that "The flora and fauna are under an enormous pressure throughout Lesotho. The LHWP will doubtless increase this problem. Especially problematic in this context are rare bird, plant, and fish species."

"In the long run those who lose land will be worse off. Land for land is the only fair solution."
Mawinnie Kanetsi of the Transformation Resource Centre, Lesotho

No from NORAD
But not only local and international environmental groups are critical to the LHWP. In 1993 NORAD turned down an application from ABB Energi A/S and A/S Linjebygg for mixed credits in connection with the project. NORAD based this rejection on "the negative environmental impact of a full development of the project."

According to FIVAS, Kværner Energy also applied for a NOK 60 million loan from NORAD for the Muela project. This application was turned down in 1993 based on "the cumulative effect of the Muela Dam, socially as well as environmentally."

In a letter to NorWatch, NORAD says it is "unable to confirm that an application from Kværner Energy for the said project has been recorded or considered," and adds that it will take too much time to go through the records.

NorWatch has not been able to get a confirmation from Kværner Energy. The new managing director Edgar Fossheim had, according to his secretary Sønnisen, "no time" to talk to NorWatch. The secretary made it clear that they do not see the point of talking to NorWatch.

- You still write what you want and what suits you, she says over the phone.

"We cannot deal with these issues. This is the way competition works."
Head of information Marit Ytreeide of Kværner ASA

Major benefits
Gordon Taylor of Kværner Boving claims that the LHWP is a blessing for Lesotho. - Any project will have positive and negative consequences that have to be considered. In this case the relocation of people and occupation of land are clearly outweighed by the great benefits this impoverished country will have from the project, both in terms of electricity for the people, national revenues, and training of the local population, says Taylor. The fact that 20-30,000 people will be affected by the development, is, in his opinion, an acceptable price to pay for the country. Head of information Ytreeide of Kværner says it is impossible to implement hydroelectric projects anywhere in the world without a negative impact: - But all projects have several aspects. Don't you see any positive consequences of the Lesotho project? Ytreeide asks. Also Mawinnie Kanetsi of the Transformation Resource Centre says that the project could have some positive effects for people in Lesotho. - But the LHDA's and the authorities' attitude must be changed before people can benefit from the project. Now it seems as if they're only interested in the money flowing into the country, and not how to use it to benefit the population, especially the people affected by the LHWP, says Kanetsi.

Norwatch Newsletter 2/98