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Thousands threatened by Statkraft's "green dam" in Laos

On April 4th, the Theun-Hinboun hydropower project was officially inaugurated. At the same time, an assessment of the NORAD-supported project, in which Statkraft is one of the owners, was published. The report confirms what project critics since long have been warning against: Fish catches from the river are dramatically decreased, agricultural land has been flooded, drinking water quality has gotten worse, and the affected people have not been compensated. Statkraft denounces the report, but say they will look into some of the questions it raises.
Artikkelen er mer enn to år gammel. Ting kan ha endret seg.
On April 4th, the Theun-Hinboun hydropower project was officially inaugurated. At the same time, an assessment of the NORAD-supported project, in which Statkraft is one of the owners, was published. The report confirms what project critics since long have been warning against: Fish catches from the river are dramatically decreased, agricultural land has been flooded, drinking water quality has gotten worse, and the affected people have not been compensated. Statkraft denounces the report, but say they will look into some of the questions it raises.


Harald Eraker
Norwatch

- The developers, fronted by Statkraft, have presented the Theun-Hinboun as an environmentally sound project, and the project actually had a potential to be comparatively less problematic than other hydropower projects, as it will not flood large areas, and there is no need to relocate a great number of people. In spite of this, one has in fact violated all standards on the "check list" concerning local populations and the environment, says Ellen Hofsvang of FIVAS.

As early as in 1993, important questions were raised concerning the Theun-Hinboun project, run by the Theun-Hinboun Power Company, in which Statkraft owns a 10% share. At this time, the Norwegian consulting company Norpower, now a part of Norconsult, presented their environmental impact assessment (EIA) of the project.

This study, financed by a NOK 10 million grant from NORAD, was heavily criticized by, amongst others, the Norwegian Pollution Control Authority, the Norwegian Water Resources and Energy Administration, the Directorate for Nature Management, and environmental organizations like FIVAS. Both the inadequate scientific foundation of the report, and the fact that Norpower, which was a part of Norconsult, which again was awarded the contract to make the "final design" of the project, was criticized. In other words, the company making the environmental impact assessment, would have a strong economic interest in further development of the project.

No time
Following the criticism, NORAD ordered and provided financing for another environmental study, to be carried out by Norplan. The Norplan study concluded rather differently than the one of Norpower:

The project will adversely affect around 5000 people, important fisheries will be substantially reduced, people might have to move because of destruction of resources necessary for their subsistence, and those affected are not eligible for compensation, according to the Norplan study.

However, NORAD had no time to wait for the Norplan-report to be finished, and gave a green light to the project by supporting Norconsult's further work on the project with NOK 35 million (about 5 million US dollar). This decision was strongly criticized by, among others, the opposition parties in the Norwegian Parliament, where representatives such as Hilde Frafjord Johnson (Christian Democratic Party), Ragnhild Queseth Haarstad (Centre Party) and Paul Chaffey (Socialist Left Party) condemned NORAD for giving the 'yes' to the project before the environmental effects were properly investigated.

Negative effects
Now it seems that the critics of Theun-Hinboun have been right. Recently the report "Trouble on the Theun-Hinboun", written by Bruce Shoemaker, was presented. In March, Shoemaker, who has lived in Laos for seven years, visited areas upstream and downstream of the dam, where he interviewed 60 people from 10 different villages.

His conclusions are disheartening: Even before the official opening of the project, the local inhabitants tell of a 30 to 90 per cent reduction in fisheries, inundated agricultural land and erosion of the river banks.

"What was particularly striking about the visits to villages in the project area (...), was that without exception they ALL reported experiencing various harmful effects from the project", Shoemaker writes in his report summary.

A group of 6 fishermen at Ban Thabak told Shoemaker the following:
"The project has many bad effects! Now it is very difficult for fishing. We can only get about half as many fish as before the dam closed. We don't know where all the fish went. We have to buy expensive new nets to try to fish deeper in the river now. It is very difficult."

No money
When Norpower (Norconsult) presented their environmental impact assessment in 1993, the consulting company found nothing negative about the project, and not a single penny was recommended for compensation to the local population. This view is strongly criticized by Shoemaker in his report:

"Thousands of Lao citizens now suffering harmful impacts from the Theun-Hinboun project are not receiving direct compensation for their losses and there are no plans to provide them with any such compensation in the future."

Shoemaker points out that, out of the total project budget of USD 260 million, a mere USD 50.000 are planned for compensation to the affected local population. In stead of recognizing these problems, the developers deny their existence, and no-one has investigated whether or not the miserable 50.000 dollars actually have done any good for anyone at all.

On the other hand, the developers have made sure that no future demands will be made for compensation:

Shoemaker writes that in October, 1996, the Laotian authorities, following the advice of the Asian Development Bank, signed an agreement with the Theun-Hinboun Power Company, freeing the company of any future obligations regarding mitigating measures or compensation, for as long as the project exists.

Not scientific
Sverre Nygaard, manager of Nordic Hydropower, the joint venture company of Statkraft and the Swedish company Vattenfall AB, with a total share of 20% of the Theun-Hinboun Power Company, comments the Shoemaker report:

- Generally we do not accept Shoemaker's report, and we are not confident as to what his motives are. We have double-checked some of the sources to which he refers, and they tell us quite different things. We are aware that there are mixed opinions among the local population regarding the project, but by far most of them view it as a positive thing. This report quite simply isn't scientific, says Nygaard to NorWatch.

Nygaard also points out that Shoemaker is a journalist and not a specialist, and quite unsubtly suggests that Shoemaker consciously chose whom to interview, and that he asked leading questions to get the answers he wanted.

- Theun-Hinboun is one of the most environmentally sound hydropower projects in the world. However, we will take a closer look into some of the issues mentioned by Shoemaker, like problems with the fisheries and information to the local population, Nygaard says. He also points out that, according to Statkraft, the critics exaggerate the level of dependency on fisheries by the local populations.

Among other things, he is of the opinion that it is important to bear in mind that the project is just recently put into operation, and therefore there is no basis on which to assess how the project in the long run will affect the river's fish populations

Demands to NORAD
- The main problem is that the vast majority of those who are affected by the project have never been informed or asked their opinion by Statkraft. Statkraft defines most of the 6000 people living along the two rivers that will have their water discharge changed, as 'not affected' by the project. As Shoemaker has lived in Laos for seven years during the nineties, and has a fluent command of the language, there are probably few other foreigners with a better knowledge of the country. He does not try to hide the fact that he is a journalist, and his conclusion is that the problems he has come across should lead to further investigations, says director of FIVAS, Øyvind Eggen.

Shoemaker recommends that the public financing agencies involved in the project, NORAD and the Asian Development Bank, should have to provide financial means to carry out a comprehensive and independent assessment of the problems documented in "Trouble on the Theun-Hinboun".

In this connection, Shoemaker expresses his hope that the responsible Laotian authorities, when they fully understand the serious negative effects suffered by their countrymen, would want to act quickly to solve these problems, and secure justice for the affected people.

Takes no responsibility
Judging from NORAD's response, there is little hope that a new assessment will be made. In a letter to FIVAS, dated April 24th, 1998, General Manager Tove Strand Gerhardsen writes the following, after the organization had challenged NORAD to take responsibility for following up the matter:

"It is the developer and concession giver, i.e. Laotian authorities, who is responsible for a satisfactory implementation of the power project, and who decides how the recommendations from the studies which, among others, NORAD has provided financing for, are to be implemented." Gerhardsen further argues that because NORAD did not provide financing for the physical parts of the project, "NORAD has no grounds on which to base a demand for a specific implementation of the project."

"Based on the above, it is out of the question that NORAD should instigate studies on how Laos has implemented the project", she writes.

Ellen Hofsvang of FIVAS disagrees with NORAD's given reason for evasion of responsibility:
- NORAD supported Norconsult's contract for "final design" of the project with NOK 35 million (about 5 million US dollar). This has nothing to do with preliminary studies. Hence, NORAD has indeed been involved in financing the development, she says.

- While Norway, through Statkraft, makes good money on the project, the poor of Laos pays the price, Hofsvang concludes.

Statkraft in Laos
Nordic Hydropower, owned by Statkraft and the Swedish company Vattenfall (50% each), owns a 20% share of Theun-Hinboun Power Company, which is the developer of the Theun-Hinboun dam. The remaining shares are owned by a Thai power company (20%) and the Laotian government (60%). Statkraft is fully owned by the Norwegian government.

Statkraft has invested around NOK 200 million in the project, and expects an annual profit of around NOK 20 million for the next 30 years. Most of the electricity from the power plant will be exported to Thailand.

NORAD-support for the project: NOK 10,1 million for Norpower's environmental impact assessment in 1993, NOK 35 million for Norconsult's work on "final design", and NOK 6,5 million for Norplan's environmental assessment.

Norwatch Newsletter 11/98

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