THE BATTLE FOR THE 3S RIVERS AS LOWER SESAN 2 DAM CONSTRUCTION NEARS, ACTIVISTS WARN OF REGIONAL IMPACTS AND STEP UP PRESSURE ON INVESTORS

BY PAUL VRIEZE AND CHHORN CHANSY • THE DAILY

ATANAKKIRI PROVINCE - During the past year, Cambodia and Vietnam have been pressuring their neighbor Laos to delay its controversial plan for the first Mekong River dam due to expect- Red regional environmental impact of the project. But at the same time, and Hanoi Chhorn Chansy/The Cambodia Daily have jointly pushed ahead with their Lower Sesan 2 project, a massive dam located on one Boats lie in the Sesan River in Ratanakkiri’s O’Yadaw district nearby the planned site for the 90-megawatt Lower Sesan 1 dam. This project of the Mekong River’s most important tribu- is one of 10 dams proposed on the 3S rivers in Cambodia. taries, the Sesan-Srepok-Sekong river system, also known as the 3S Basin. posed hydropower dams and the rest from coal Researchers and environmental groups are and gas plants. More than 40 percent of all pow- now warning that this 400-megawatt dam, locat- er would be exported, making hydropower an “For indigenous groups [in the northeast], but also ed in Stung Treng province, would also cause important source of future export revenue. serious damage to the wider Mekong region. Chinese companies are developing several for Khmer along the Mekong and Tonle Sap rivers, the The impact of the 3S dam, they say, will be felt dams in the Cardamom Mountains and with [fisheries] impacts would be severe as they lose the on fisheries, sedimentation and food security in Cambodia’s two Mekong River dams unlikely Cambodia’s northeastern provinces, the Tonle to go ahead anytime soon, due to widespread main source of protein in their diet.” Sap lake, the Mekong River and even in the concerns over their environmental impact, gov- Mekong Delta far to the south. ernment attention has turned to projects in the —PHILIP HIRSCH, DIRECTOR OF THE AUSTRALIAN MEKONG CENTER, Those environmental activists have now be- 3S Basin. THE UNIVERSITY OF SYDNEY gun to focus pressure on the dam’s co-financer, Ian Baird In April, Cambodia took a major decision local business conglomerate Royal Group, in toward achieving its energy plans when it ap- order to persuade Royal’s CEO Kith Meng to Located below the confluence of the Sesan and Srepok rivers, the Lower Sesan 2 dam would proved the Lower Sesan 2 project of Electricité pull out of the $806 million hydropower project, flood 30,000 hectares of farmland, villages and forest, creating one of the largest dam reser- du Vietnam. The Vietnamese state-owned elec- They say project studies have researched in the Tonle Sap and Mekong migrate to the 3S which is due to start within months. voirs in the Mekong region. tricity giant has since announced that dam con- none of these negative regional effects, and rivers. Scientists assume that many more fish Time is short, and the odds are high in them “It’s such as diffuse [river] system and This energy shortfall presents a major hurdle struction would start this year or early 2012. they fall short of international standards for species make this annual migration and new achieving their goal of saving the most impor- nobody has ever build a dam of this magnitude, to economic development of the country. Cam- The project, located below the confluence of hydropower development. studies are under way to determine the likely tant river system in northeastern Cambodia. so it’s hard to know what exactly it will mean, bodia now generates 400 megawatts of power the Sesan and Srepok rivers, would be the first In a 2009 study of the Lower Sesan 2 project, scope of the dam’s impact. “[I]t would be the most destructive dam built but I can say that there will be a significant domestically and imports another 180 mega- Cambodian dam built in the 3S Basin and will Mr Baird, the 3S Basin fisheries expert, said Philip Hirsch, director of the Australian in the Mekong River system for fish,” said Ian impact throughout the Tonle Sap and Mekong watts, but its energy demand will rise to 2,400 cut two of the basin’s three rivers off from the that at least 32 species of fish migrate from the Mekong Center at the University of Sydney, Baird of the University of Wisconsin-Madison system.” megawatts by 2020, according to the Asian Mekong River. Tonle Sap lake to the Sesan and Srepok rivers, said Electricité du Vietnam’s existing cascade of and a 3S Basin fisheries expert. Currently most electrical power in Cambodia Development Bank. Fisheries experts warn the dam would se- while even Mekong fisheries in Laos, Thailand dams upstream in the 3S Basin had already An estimated 1 million Cambodians earn an is generated from diesel generators and elec- The government has set an ambitious goal to verely impact the Mekong region by prevent- and Vietnam’s Mekong Delta would be affected diminished fisheries in Ratanakkiri province, income from Tonle Sap lake fisheries, and the tricity prices are among the highest in the generate 6,000 megawatts by 2020, Electricité ing mass migration of fish species to the two as a result of the dam. but he warned that its new projects in Stung

dam’s impact on those livelihoods would be “sig- world, while less than a quarter of rural areas du Cambodge has said, with 70 percent of this rivers and blocking important sedimentation A 2010 study by the Mekong River Com- Treng would endanger food security through- t nificant,” Mr Baird said in a recent interview. have reliable power supply. energy coming from about two dozen pro- flow. mission found at least 12 important fish species out Cambodia. t

10 SEPTEMBER 10-11, 2011 The CAMBODIA DAILY 11 maker Son Chhay, Prime Minister wrote that unnamed “expert institutions” had found that “[The dam] will affect only fish that live in the Sesan and Srepok rivers.” Mr Hun Sen accused “a number of NGOs, politicians and media” of opposing Cambodia’s development and exaggerating the dam’s effects, adding that proper impact studies, miti- gation measures and compensation plans were implemented. The prime minister said the dam’s impacts as mentioned in the impact assessment were a price worth paying because the project would boost national development and “provide power to millions of people across the country.” He also denied earlier reports that the dam would export any power to Vietnam. The SRP was unimpressed with Mr Hun Sen’s letter and has said it failed to provide an overview of national, socio-economic costs and benefits of the project, as the contract agree- ment with the Vietnamese state power compa- ny remained undisclosed and the countrywide impact on fisheries were not addressed. Chhorn Chansy Mr Hirsch, from the Australian Mekong Jarai villagers take off on a boat on the Sesan River in Ratanakkiri’s O’Yadaw district. Center, said a complete assessment of national energy needs, and the economic basis of the project was still lacking, adding that the deci- sion to dam the Lower Sesan was driven mostly THE 3S BASIN’S ENVIRONMENTAL THREATS by big business deals that bring large invest- ments and dividends to those involved. “A full cost accounting [of the Lower Sesan 2] The 3S Basin’s rivers flow from Vietnam and Laos into Ratanakkiri and has yet to be done,” he said, adding, “Dams are Stung Treng province, where they merge and flow into the Mekong River. being built as business, not to solve energy International Rivers Indigenous hill tribes have long populated the remote region, but needs.” hydropower development, rapid deforestation and increased farming and “[T]he reality is that the project’s costs will Private investors have proposed 30 hydropower projects throughout Cambodia. Several dams are being built in the Cardamom Mountains, mining concessions during the past decade have put tremendous pressure outweigh its benefits [...] it would be smarter to and the Lower Sesan 2 project is due to start within months. The recently proposed Lower Sesan 1 dam in Ratanakkiri and the Sekong dam invest more sustainable alternative energy in Stung Treng are not included on this map. on environment and communities. So much so that a recent ADB report warned that local officials in all three countries felt that the Basin’s water options,” said Ame Trandem, Southeast Asia

program director for environmental campaign-

t t resources are “facing an imminent crisis.” “The Lower Sesan 2 would be the bigger ers International Rivers. death blow to the migratory fishery, as two of Ms Trandem said the Lower Sesan 2 dam’s three rivers are totally isolated from the main- Since the 1990s Vietnam has built or operated a total of 14 upstream dams, severe and regional impacts should give Cam- stream,” he wrote in a recent e-mail. and in Ratanakkiri, villagers have long complained that the projects have bodia and Vietnam pause for thought, in partic- “For indigenous groups [in the northeast], reduced fisheries and water quality and caused floods and droughts. With ular after their own attempts to block Laos’ Me- but also for Khmer along the Mekong and the Lower Sesan 2 project now approved and 10 other proposed dams in kong River dam proposal. Tonle Sap rivers, the [fisheries] impacts would the 3S Basin in Cambodia gradually moving ahead, there are growing “The Lower Sesan 2 [...] is in many ways no different from the Mekong mainstream dams,” be severe as they lose the main source of pro- fears among villagers and NGOs that these projects could ultimately she said. “[B]oth countries should really re- tein in their diet,” Mr Hirsch said. result in a dead river system and eviction of dozens of river communities. The dam’s environmental impact assess- think this destructive project. The stakes are far ment, however, does not examine how the 70- too high.” Meach Mean, coordinator for the 3S Rivers Protection Network, an meter-high dam would affect fisheries beyond Currently Laos’ proposed Xayaburi dam on NGO based in Banlung, said hydropower and other development plans the Mekong River is stalled at the Mekong the 3S Basin and only acknowledges that up- River Commission after Cambodia, Vietnam stream fisheries in Ratanakkiri province would in the basin were pushing the hill tribes’ way of life to the brink of and Thailand called for more impact studies or be affected resulting in income loss for 30,000 destruction. “[There are] a lot of plans...overlapping with communities a 10-year project deferral. At a MRC meeting in villagers there. that live in the area for a long time — like a 1,000 years — but now they November the project will be discussed again. are not safe,” he said. “I don’t know how we can have hope for our The dam reservoir would flood 20,000 MRC spokesman Surasak Glahan said the hectares of forest and 10,000 hectares of farm- indigenous minorities here.” commission could not comment on the Lower land, while displacing 5,000 villagers in the Sesan 2 dam, as its mandate only covered “main- province’s Sesan district alone, according to the stream” Mekong River development. Cam- impact assessment, which noted that only the bodia’s international donors Ausaid and the villagers displaced from their land would be Paul Vrieze/The Cambodia Daily stream Mekong dams, “few other hydropower Given these high risks and uncertainties over ADB, which have spoken out against Mekong compensated for their losses. dams, declined to comment on the Lower Sesan Jarai inhabitants of Padorl village, located on the banks of the Sesan River in Ratanakkiri’s projects [...] have the individual capacity to the impacts, Mr Ketelsen stressed that, “it Mr Baird’s study estimates that the Lower 2 dam’s social and environmental impacts. O’Yadaw district, met last month to share their concerns over Electricité du Vietnam’s pro- cause such reductions in the Mekong sedi- would be prudent [...] to avoid rushing ahead Sesan 2 dam would affect many, many more Asked if the project would significantly help posal to build the Lower Sesan 1 dam nearby. ment load.” with the Lower Sesan 2 dam.” people, with in excess of 100,000 villagers in Such a large sedimentation loss would re- The government however, has declined to domestic energy needs, Anthony Jude, director Stung Treng and Ratanakkiri provinces losing which carried out a 2010 Mekong River Com- assessment studies fail to address. duce the stability of river channels and the Me- acknowledge any regional impact from the of ADB’s Energy and Water division for their ability to catch fish and access to water mission study on Mekong River dams, also “Our best estimate is that the Lower Sesan 2 kong Delta coastline, increasing erosion and Lower Sesan 2 dam and refers only to findings Southeast Asia, said: “Any supply of low cost resources. warned the dam would block almost half of all project could reduce total Mekong sediment diminishing productivity of the aquatic system of the project impact assessment, which does electricity to Cambodia will be beneficial as it

Tarek Ketelsen, from the International Cen- sedimentation flow from the 3S Basin into the loads by an average of 6 to 8 percent,” he wrote and agriculture in the Mekong floodplains and not address many of the most crucial issues. stimulates economic growth and further ad- t ter of Environmental Management in Hanoi, Mekong River—an issue that official project in a recent e-mail, adding that apart from main- Tonle Sap lake, Mr Ketelsen said. In a July 28 letter to Sam Rainsy Party law- dresses poverty reduction.” t

12 SEPTEMBER 10-11, 2011 The CAMBODIA DAILY 13 3S Rivers Protection Network The Sesan River in Ratanakkiri’s O’Yadaw district fell almost dry in May. Villagers have complained that dry season water levels have been

extremely low since Vietnam built a cascade of dams upstream during the past decade. t

t In comments made in February, Mr Jude In a July 29 letter sent to Royal Group chair- stake in ANZ Royal bank in Cambodia, which is Mr Meng declined to comment on his in- have Kith Meng involved,” he said. mune chief stating that villagers would get $22 noted however, that dams have limitations, as man’s Mr Meng, 40 researchers and NGOs a joint venture with Mr Meng’s Royal Group. volvement in the Lower Sesan 2 project last Indigenous minority river communities in per square meter of their house and a small power generation drops drastically during low urged him to cancel his involvement in the dam “[W]e believe that ANZ Bank is also now week and referred questions to the Ministry of Stung Treng and Ratanakkiri provinces don’t amount for each of their fruit trees, while their water levels in the dry season. because of the myriad negative impacts. linked critically to the Royal Group’s plans” to Industry, Mines and Energy. share that confidence. Many already fear for farmlands would be swapped for land at an as “Hydropower plants capacity is only reliable The letter said that the dam’s fisheries im- fund the Lower Sesan 2 dam, the campaigners Steven Higgins, ANZ Royal CEO, who was their future as the Lower Sesan 2 project will yet unknown relocation site. for 50 percent to 55 percent per annual,” he pacts would “jeopardize the nutritional status of said in their letter, adding that “ANZ Bank’s interviewed before the campaigners’ letter was block off fish migration upstream and flood “The [compensation] price is very low, it’s said. “Hence, there will still be power shortages people in Cambodia and the region, including association with Royal Group will undoubtedly obtained by The Cambodia Daily, said there their farms and villages. unacceptable,” he said, adding that villagers just as is being experienced in Vietnam.” child nutrition, and thus make it difficult for be crucial in Royal Groups attempts to find was no connection between ANZ Royal bank NGO Forum and the 3S Rivers Protection were even more anxious about the quality of While bilateral donors and the Mekong River Cambodia to achieve its United Nations financing for the dam.” and the Lower Sesan 2 dam, adding, “We can’t Network have long asked for clarity over com- the farmland at the relocation site. Commission are shying away from comment- Millennium Development Goals.” ANZ Bank’s reputation could be at risk, the control what the minority shareholder [Mr pensation and resettlement measures for those Mr Teng said that dozens of villagers from ing on the 3S dam, a group of activists have The letter also warned Mr Meng of the nega- letter warned, from its association with the Meng’s Royal Group] does and I think that’s villagers, and have said the government is fail- affected river communities, most of which are joined hands recently to try to stop the Lower tive press attention he could receive as a result dam, as the project does not uphold the Equa- appropriate.” ing to uphold even the most basic standards for animist hill tribes, had recently held a ceremo- Sesan 2 project. Most are foreign researchers of his involvement in the project. tor Principles, which is a set of voluntary social Mr Higgins said he did not think ANZ Roy- hydropower projects, as villagers were not con- ny in order to consult the local spirit Kor La or environmental groups, such as International “We think you deserve to know the full- and environmental standards for project fi- al’s reputation would suffer through its connec- sulted properly and remain in the dark about Kann about their insecure future. Rivers and Probe International, while a few extent of the implications of the dam, and the nancing that ANZ has signed up to. tion with Royal Group’s financing of the dam. their future. After offering chickens, jars of rice wine and Cambodian NGOs such as My Village and serious long-term political, environmental and Ms Trandem, from International Rivers, said “I think most people would see us as ANZ, Only in late August, with project construction incense to the spirit, which possessed the local Bridges Across Borders have also signed up to social risks that you would face if you continue in a comment that, “Royal Group would be most people would make that distinction.” just a few months away, did displaced villagers traditional healer, villagers asked how long they the campaign. to develop the Lower Sesan 2 dam before a full- smart to reassess its involvement in this dam. Mr Meng’s involvement in the project, Mr hear for the first time how much they would be may continue to live along the Sesan and Sre- In the past few months they have begun to scale and long-term media campaign begins,” As an environmentally disastrous project, the Higgins added, could, in fact, help lessen the compensated to leave their homes and ances- pok rivers. “The spirit told us that we would privately lobby project co-financier Royal Group activists wrote. Lower Sesan 2 Dam is a risky investment that negative impacts of the dam, as he would be tral lands. leave in...maybe 2015,” he said. “It would be to withdraw its 49-percent funding stake in the The campaigners also sought to involve is likely to be plagued with hidden costs over well positioned to represent Cambodian inter- Beng Teng, from Srekor village in Sesan dis- good if we can live here for the next five years 3S project. Australian bank ANZ, as it has a 55 percent the long-run.” ests. “It would actually be good for Cambodia to trict, said he had received a letter from the com- because we don’t want to leave.”

14 SEPTEMBER 10-11, 2011 The CAMBODIA DAILY 15