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Download Free ASIAN DEVELOPMENT BANK SST: REG 99033 SPECIAL EVALUATION STUDY ON THE SOCIAL AND ENVIRONMENTAL IMPACTS OF SELECTED HYDROPOWER PROJECTS December 1999 ABBREVIATIONS 2 ADB – Asian Development Bank ARIS – Anai River Irrigation System BPM – Bukit Peninjau Miri DMC – developing member country EdL – Électricité du Laos EIA – environmental impact assessment EMP – environmental management plan EMCO – Environmental Management Cooperation Office H2S – hydrogen sulfide HEPC – Hunan Electric Power Company ISA – initial social assessment Lao PDR – Lao People’s Democratic Republic NCR – native customary right NGO – nongovernment organization PCR – project completion report PLN – Perusahaan Listrik Negara (State Electricity Enterprise) PRA – participatory rapid appraisal PRC – People’s Republic of China RRP – resettlement and rehabilitation program SALCRA – Sarawak Land Consolidation and Rehabilitation Authority SEIA – summary environmental impact assessment SESCO – Sarawak Electricity Supply Corporation TA – technical assistance THPC – Theun-Hinboun Power Company WSFS – West Sumatra Fisheries Service WEIGHTS AND MEASURES ha – hectare m3/s – cubic meter per second km – kilometer m – meter MW – megawatt NOTE In this report, “$” refers to US dollars. Operations Evaluation Office, SS-36 EXECUTIVE SUMMARY This study aims to provide recommendations for improving the design and processing of hydropower projects funded by the Asian Development Bank (ADB) to minimize the adverse environmental and social impacts. Four case studies were assessed for accuracy of identifying potential impacts; appropriateness of the mitigation measures designed; effectiveness in implementing them; and the procedures for monitoring, receiving feedback on, and evaluating progress. The study projects operate in a variety of regimes (Malaysia, Indonesia, People’s Republic of China [PRC], and the Lao People’s Democratic Republic [Lao PDR]), with different institutional systems for hydropower development and were exposed to different stages of development in ADB’s policies and guidelines. ADB renewed its focus on environmental and social concerns in 1993 prior to the approval of some of the case studies. However, some specific policies on these concerns were approved after 1994 and, therefore, were not binding for the case study projects. This study discusses these new policies in parallel with the case study impacts, not to evaluate the compliance of the projects but rather to learn from their experiences for implementing current and future projects bound by the new policies. ADB is making continuing efforts to reform its procedures to adhere to its latest policies during project formulation and also to deal with the developing member countries’ (DMCs’) implementation realities. The Batang Ai Hydropower Project1 in Malaysia was approved in 1981 before ADB had adequate expertise on environment and social concerns. The Power XX (Singkarak) Project2 in Indonesia was approved in 1990 prior to the required circulation of the summary environmental impact assessment (SEIA) to the Board. Both the Hunan Lingjintan Hydropower Project3 in the PRC and the Theun-Hinboun Hydropower Project4 in the Lao PDR (owned by a joint venture company) were approved in 1994, with SEIAs for each and a resettlement plan for the Lingjintan Project. Subsequent to the renewal of ADB’s focus on environmental and social concerns in 1993, specific policies and guidelines for energy (1995), involuntary resettlement (1995), forestry (1995), fisheries (1997), and indigenous people (1998) relating to hydropower development were approved. At this study’s initiation in 1998, the projects approved after 1995 had not been sufficiently implemented to draw meaningful assessments or recommendations. ADB has taken efforts in more recent (nonstudy) projects to address several of the weaknesses addressed in this study. The consultation process was not very effective in most of the study projects. Weak consultation resulted in improper identification of impacts, building of exaggerated expectations among the affected persons, and inadequate implementation of mitigation measures. ADB should continue technical assistance to help develop the process in the countries that need it, remembering that in some cases it is not the lack of knowledge that weakens consultation but the lack of tradition or institutional arrangements. 1 Loan 521-MAL: Batang Ai Hydropower Project, for $40.4 million, approved on 17 September 1981. 2 Loan 1032-INO: Power XX Project, for $235 million, approved on 25 September 1990. 3 Loan 1318-PRC: Hunan Lingjintan Hydropower Project, for $116 million, approved on 27 September 1994. 4 Loan 1329-LAO: Theun-Hinboun Hydropower Project, for $60 million, approved on 8 November 1994. 4 The preparation of study projects in terms of environmental and social concerns was weak due to the quality of baseline data and incompleteness of coverage. In the study projects, the use of environmental or social scientists was limited during the planning stage, resulting in the misidentification of impacts, irreversible damage to some natural resources, and lack of timely and adequate attention to some mitigation measures. Consistent with other hydropower developments, the most significant environmental impacts identified were associated with migratory fish species. Environmental and social scientists need to be an integral part of the design team for sensitive projects and could be supplemented by a panel of experts. ADB should ensure that project management acts upon the panel’s recommendations for mitigation measures. Study projects have not resulted in disastrous environmental and social impacts. However, several shortcomings occurred, most of which could have been avoided or compensated for with more diligence on the parts of the project proponents, DMC agencies, and ADB. Identification and mitigation of project impacts improved with later study projects. Measures that were conspicuously needed (i.e., housing) were planned during project design and implemented. Other measures that necessitated coordination among local agencies, effective participation from affected persons, and substantial funding from the DMCs were not always implemented in an efficient and timely manner. Other impacts on natural resources (migratory fisheries and biodiversity) were yet to be mitigated in some study projects at the time of the Operations Evaluation Missions. The Lingjintan Project performed better than other study projects in terms of resettlement efforts due to institutional capabilities of the local agencies and the adoption of the development resettlement concept where resettlement arrangements are embedded in an integrated regional development program. Compliance with environmental clauses in construction contracts has not been satisfactory because many have very modest clauses and, in some, the accountability placed on the contractor is slight. DMC agencies and ADB should be more rigorous in screening the capacity of construction firms to abide by the environmental and social requirements. ADB should also, by way of specific assurances in the loan agreement and monitorable targets in progress reports, ensure the implementation of important measures, such as income restoration programs and mitigation of fishery resource impacts. To ensure success, ADB should consider providing itemized allocations for these purposes as part of the loan. Monitoring impacts have been better during construction than in the operations phase due to the use of review missions, progress reports, and panels of experts. However, the quality of the progress reports needs to improve, with the inclusion of monitorable indicators and exclusion of average statistics that hide outliers signaling adverse impacts. A clearinghouse for all monitoring efforts and a formal follow-up by ADB on whether impact monitoring is translated into changed action are recommended. Some environmental and social impacts that occur may go unreported because of weak scrutiny by DMC oversight agencies and ADB. Often, ADB’s supervision efforts are greater than those of DMC agencies, but the lack of environmental and social specialists still constrains the extent and depth of the review functions. Yet, this study demonstrates the value of ADB’s review missions in catalyzing needed mitigation and monitoring during project operations. Deploying multiskilled supervision teams at the midterm review and increasing the number of relevant staff are recommended if ADB is to consider the systematic review of environmental and social mitigation measures. 5 Institutional capacities of DMC agencies responsible for enforcing environmental and social concerns vary substantially across countries. The project units responsible for implementing mitigation measures (in some cases) have been inappropriately staffed, inadequately funded, and established too late with insufficient authority. ADB should continue to support, where needed, the development of relevant enforcement agencies, especially using technical assistance for long-term mentoring programs. Identification of institutional development needs in using the pipeline of projects would be useful. ADB has made sizable advances in expanding and clarifying its policies for environmental and social concerns. But at times, the positions stated may be too ambitious, and should be sharpened and supplemented by more practical steps. Development of policies to protect biodiversity and heritage resources is also needed. Evolving policy changes create a discrepancy
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