Challenges of Financing for Thai Banks The Case of Xayaburi and XPXN Projects

November 2019 Drawing on case studies of two controversial hydropower projects in financed by Thai banks, this report points to weaknesses in the Thai Banks’ considerations of environmental and social risks. The report outlines why Thai Banks must integrate Environmental Social and Governance (ESG) risks into their lending decisions and conduct human rights due diligence in line with international standards. By doing so, Thai banks can better identify, prevent and mitigate adverse impacts, and minimise reputational, legal and financial risks from their lending.

The first section of the report outlines ESG risks and impacts of hydropower projects and respon- sibilities and commitments of financial institutions, drawing on relevant international and national standards and guidelines. The second section examines the Xayaburi and Xe Pian-Xe Namnoy in Laos, describing their environmental and social risks and impacts, and the Thai banks’ roles and responsibilities. The last section makes recommendations on how Thai banks can more meaningfully integrate ESG risks into their policies and practices. Introduction

Historically, international financial Thai banks through the lens of hy- 1. National Human Rights Commission of institutions including the World Banks dropower investment in the . (2015). Report no. 1220/2558: Seaport and Dawei Special Economic and the Large-scale dams are risky projects. Zone Development. (Bangkok: National played a key role in financing large They are complex, capital-intensive, Human Rights Commission of Thai- land). Available at: http://www.nhrc. infrastructure projects in the Mekong and often require majority of financing or.th/getattachment/0564e1b7-0374- region. More recently, these institu- upfront. They have long development 4b7d-9622-75b7383e1361/รายงานที่-​ 1220-2558-เรื่องสิทธิชุมชน-กรณีการดำ�เนิน. tions have moved away from direct timeframes and entail high socio-eco- aspx financing of large infrastructure pro- nomic and environmental risks.2 Hydro- 2. Trandem, A. (2019). Offloading Risks & jects and have expressed concerns over power projects frequently experience Avoiding Liabilities: How Financial In- projects such as the on cost overruns and delays, in part due stitutions Consider Hydropower Risks in Laos. (Bangkok: Focus on the Global the Lower Mekong mainstream due to to environmental and social risks and South). Available at: https://focusweb. their significant environmental and impacts.3 Because large hydropower org/wp-content/uploads/2019/03/Off​ loading-Risks-Avoiding-Liabilities-1-1. social impacts. In their place, private projects alter river systems, they often pdf sector lenders, including Asian region- have significant impacts that are not 3. International Finance Corporation al banks, are increasingly stepping in confined to the project area or even (2015). Hydroelectric Power: A Guide to fund projects such as Xayaburi that within national borders. In the case for Developers and Investors. (Stuttgart, Germany: International Finance Cor- international financial institutions will of the Mekong, an important trans- poration), p. 5. Available at: https:// not directly support. boundary river system that sustains www.ifc.org/wps/wcm/connect/topics_​ ext_content/ifc_external_corporate_ food security, livelihoods and local site/sustainability-at-ifc/publications/ Thai companies and banks are at the economies for populations across six hydroelectric_power_a_guide_for_de​ velopers_and_investors forefront of growing intra-regional countries, impacts and risks are espe- investment within the Mekong region. cially extensive and complex. 4. Fair Finance Guide International (2019, April). Executive Summary Fair Over the past two decades, Thailand’s Finance Thailand: 2018 Policy Assess- commercial banks have increased As seen in , Thai banks ments. Available at: https://fairfinance​ Table 1 below guide.org/media/495072/fft-exec-sum​ their lending to major infrastructure have lent billions of dollars to multiple mary-english.pdf projects such as hydropower dams hydropower projects in Laos, including in neighbouring countries. Thailand’s the Xayaburi and Xe Pian-Xe Namnoy largest banks have all been involved in dams profiled in this report. Thai providing funding for risky resource banks represent a significant source projects. However, unlike the tradi- of financing for hydropower in the tional international financial institu- Mekong Basin. Furthermore, Thai tions, which have rigorous performance banks are also considering financing standards and safeguard policies, Thai other hydropower projects in the re- banks’ environmental, social and gov- gion, including on the Salween River ernance (ESG) standards and policies in Myanmar. are largely weak or non-existent. The Xayaburi dam in Lao PDR, discussed Yet, despite the risks and impacts in this report, is an example of a con- inherent in these projects, lending troversial major infrastructure project policies and decisions by Thai banks that Thai banks have financed as part to date have paid scant attention to of a wider program of internationalis- environmental, social and governance ing their activities. In another exam- (ESG) risks and impacts. Fair Finance ple, Thai banks are also involved in Thailand’s policy assessment of the financing a major industrial complex nine largest Thai commercial banks in Dawei, Myanmar that has faced crit- found that Thai banks performed poor- icism for its extensive environmental ly in relation to ESG criteria, particu- and social impacts.1 larly in relation to nature (environment and social impacts and mitigation), This report examines the need for gender equality and human rights (see improved ESG policy and practice for Box 2).4

Fair Finance Thailand 3 5.74. The Thai Bankers’ Association (2019, August 13). Sustainable Banking Guide- In August 2019, the Thai Bankers’ on integrating environmental and lines: Responsible Lending by The Thai Association (TBA) issued Sustainable social risks and impacts.5 While the Bankers’ Association. Available at: https://www.tba.or.th/wp-content/up​ Banking Guidelines: Responsible guidelines are a step in the right di- loads/2019/08/Guidelines-Responsi​ Lending, which “defines minimum rection, much more needs to be done bleLending.pdf expectations on responsible lending to ensure that Thai banks more mean- practices for all banks based in ingfully implement responsible and Thailand” and provides guidance sustainable banking practices.

Table 1: List of Lao dams financed by Thai Banks

Project value Loan value Financing Operation International Lender BAY BBL SCB KTB TMB SCIB EXIM TISCO TBANK

(USD million) (USD million) closing date date KBANK bank(s)

Before 21st Century Theun Hinboun Power Co.Ltd.[1] 260 N/A N/A 1998 ✕ Houay Ho Power Co.Ltd.[2] 220–250 N/A N/A 1999 ✕ Partly financed by Thai Banks 21st Century onwards Nam Theun 2 Power Co.Ltd.[3] 1,581 920 May 2005 2010 ✕ ✕ ✕ ✕ ✕ ✕ ✕ ✕ ✕ Nam Ngum 2 Power Co.Ltd.[4] 832 N/A May 2006 2011 ✕ ✕ ✕ Theun Hinboun Power October 586 N/A 2012 ✕ ✕ ✕ ✕ ✕ Co.Ltd. – Expansion[5] 2008 Xayaburi Power Co.Ltd.[6] 3,800 N/A N/A 2019 ✕ ✕ ✕ ✕ ✕ ✕ Xe-pian Xe-Namnoy Power 1,200 738 N/A 2019 ✕ ✕ ✕ ✕ Co.Ltd.[7] Nam Ngiep 1 Power Co.Ltd. [8] 977 643 N/A 2019 ✕ ✕ ✕ ✕ ✕ Nam Theun 1 Power Company US$934.5 N/A N/A 2022 ✕ ✕ ✕ ✕ (NT1PC)[9] million Data sources: [1] Shoemaker, B. (2000). Theun-Hinboun Update: A Review of the Theun-Hinboun Power [6] BankTrack (2019). Xayaburi Dam: Financiers. Available at: https://www.banktrack.org/project/ Company’s Mitigation and Compensation Program. Available at: https://www.internationalrivers. xayaburi_dam#popover=financiers org/sites/default/files/attached-files/theun_hinboun_update.pdf [7] Xe Pian Xe Namnoy Hydroelectric Power Project (2019). Available at: https://www. [2] Lawrence, S. (2008). Power Surge: The Impacts Of Rapid Dam Development in Laos. (Berkeley, power-technology.com/projects/xe-pian-xe-namnoy-hydroelectric-power-project/ CA: International Rivers Network). Available at: https://www.internationalrivers.org/sites/ [8] Nam Ngiep 1 (2014). Nam Ngiep 1 Hydroelectric Power Project. Available at: https://www. default/files/attached-files/intl_rivers_power_surge.pdf power-technology.com/projects/nam-ngiep-1-hydroelectric-power-project/ and Greater Mekong [3] BankTrack (2014). Nam Theun 2 Financing Launched. Available at: https://www.banktrack.org/ Subregion Economic Cooperation Program (2018). Annex to the Regional Investment Framework download/nam_theun_2_financing_launched/040301_nt2_financing_launched_press_ 2022: First Progress Report and Update. (Metro Manila, Philippines: GMS SECRETARIAT). release_ntpc.pdf Available at: https://www.greatermekong.org/sites/default/files/Annex%20to%20the%20RIF%20 [4] Middleton, C. (2009). Thailand’s Commercial Banks’ Role in Financing Dams in Laos and the 2022:%20First%20Progress%20Report%20and%20Update.pdf Case for Sustainable Banking. International River. Available at: https://www.banktrack.org/ [9] Hydropower and Dams (2018, May 22). Nam Theun 1 Achieves Financial Closure. Hydropower download/thailand_s_commercial_banks_role_in_financing_dams_in_laos_and_the_case_ and Dams. Available at: https://www.hydropower-dams.com/news/nam-theun-1-achieves-​ for_sustainable_banking/110707_sustainablethaibanks_ir_dec09.pdf financial-closure/ [5] Ibid.

4 Challenges of Dam Financing for Thai Banks Hydropower: Risks and Impacts

Large-scale hydropower projects are proponents, a growing body scientific 6. World Commission on Dams (2000). complex and carry high environmental evidence indicates that reservoirs in Dams and Development: A New Frame- work for Decision-Making. (London and and social risks. Large dams block fish tropical areas, such as the Mekong, Sterling: Earthscan Publications Ltd). migrations, degrade important hab- emit significant amounts of green- Available at: https://www.international​ rivers.org/sites/default/files/attached-​ itats, and disrupt flows of sediment house gases. A 2016 study, which files/world_commission_on_dams_​ and water, which in turn impact on analysed more than 250 hydropower final_report.pdf the availability and productivity of projects, estimates that globally dams 7. E.g. see International Centre for Envi- ronmental Management (ICEM) (2010). aquatic resources important for com- emit around one billion tonnes of Strategic Environmental Assessment of munities’ food sources, livelihoods greenhouse gases annually, account- Hydropower on the Mekong Mainstream: Summary of the Final Report. (Victoria: and economies. Dams have flooded ing for 1.3% of human-caused global ICEM Australia) Available at: http:// large areas of wetlands, forests and emissions.11 www.mekongwaterforum.org/sites/ default/files/ICEM_2010_SEA_of_hydro​ agricultural lands, and displaced an power_mainstream_summary_EN.pdf; estimated 40 to 80 million people Weak regulatory regimes may exacer- (MRC) (2017). The Council Study: Key Findings 6 globally. They contribute to social bate risks. Most hydropower invest- on the Study on Sustainable Manage- unrest and conflicts over access to ments in the Mekong are located in ment and Development of the Mekong River Basin, including Impacts of Main- and use of water and land, and ero- countries with lower standards for stream Hydropower Projects, 8 Decem- sion of local cultures and identities. environmental and social protection ber. Links to all the MRC Council Study reports can be accessed through: These risks are heightened in places compared to those stipulated by Thai http://www.mrcmekong.org/assets/ like the Mekong region, where rivers law and international best practice. Publications/the-CS-reports-cover.pdf and related resources sustain the lives Furthermore, even when relatively 8. Mekong River Commission (2017). Thematic Report on the Positive and and livelihoods of millions of people, strong standards exist on paper they Negative Impacts of Hydropower Devel- as well as making significant contribu- are often not fully implemented, such opment on the Social, Environmental, and Economic Conditions of the Lower tions to national economies. as requirements for environmental Mekong River Basin, p. 10.

impact assessment and compliance 9. Mekong River Commission (2017, Understanding environmental and monitoring. This can present risks to November 23). The Council Study: Key Message from the Study on Sustainable social risks must include cumulative projects later on, for example, projects Management and Development of the and basin-wide impacts. In the Me- that have secured approvals without Mekong River Basin, including Impacts of kong Basin, there is a wealth of pub- adequate assessment of transbounda- Mainstream Hydropower Projects, p. 4. licly available studies that examine ry impacts. It can also mean legal risks 10. Nam, S. et al (2015). Economic Value of Lower Mekong Fisheries: Lower cumulative and basin-wide impacts due to non-compliance. A notable Mekong Fisheries Estimated to Be and point to risks that large-scale example is the collapse of an auxiliary Worth Around $17 Billion a Year. Catch and Culture vol. 21, no. 3 dams pose on the Mekong’s ecology, dam at Xe Pian-Xe Namnoy Hydro- (December), pp. 4–7. Available at: economy and society.7 Most recently, power Project in July 2019 that killed http://www.mrcmekong.org/assets/ Publications/Catch-and-Culture/Catch​ the Mekong River Commission’s (MRC) dozens of people and displaced some CultureVol-21.3.pdf

Council Study, published in 2018, 7,000, and damaged the homes and 11. See: Hurtado, M. E. (2016, November found that planned dams would re- property of thousands more across the 7). Dams Raise Global Warming Gas. SciDevNet. Available at: https://www. 12 duce the amount of sediment reaching border in . There is evidence scidev.net/global/energy/news/dams- the Mekong Delta by 97%8 and fish suggesting that non-compliance on the raise-global-warming-gas.html stocks by 40% to 80% by 2040.9 Given part of developers may have caused or 12. Inclusive Development International and International Rivers (2019). Reck- 13 the high economic value of the Lower contributed to the collapse. less Endangerment: Assessing the Re- Mekong River Basin’s capture fisheries sponsibility for the Xe Pian-Xe Namnoy Dam Collapse. Available at: https:// (valued at USD$11 billion), and the Large hydropower projects frequently www.inclusivedevelopment.net/wp-​ importance of sediment to maintain- experience cost overruns and delays. content/uploads/2019/​07/reckless_​ ing the productivity of the agriculture A 2014 Oxford University study, which endangerment_final_for_web.pdf sector in the Delta, the losses would examined 245 large hydropower dams 13. Ibid. equate to billions of dollars annually.10 in 65 countries, found that large dams 14. Ansar, A., Flyvbjerg, B., Budzier, A. and Lunn, D. (2014). Should We Build suffered average cost overruns of 96% More Large Dams?: The Actual Costs and implementation schedules were of Hydropower Megaproject Develop- Large dams may contribute to climate ment. Energy Policy (March), pp. 1–14. change. While promoted as ‘clean delayed on average by 44%.14 Delays Available at: SSRN: https://ssrn.com/ energy’ by hydropower industry and in schedules and inability to meet abstract=2406852

Fair Finance Thailand 5 15. Vida, T. (2019, March 19). Dry Spell performance targets (i.e. electricity increasingly cost-competitive.17 With Causing Power Cuts: PM. Khmer Times. Available at: https://www.khmertime​ outputs) can lead to substantial pen- the rapid changing landscape in pow- skh.com/587742/dry-spell-causing- alties for the investors if milestones er sector investments, there is a risk power-cuts-pm-2/ and provisions stipulated in Conces- that large hydropower projects, which 16. Times (2013, August 14). sion Agreements and Power Purchase often take several years to build, be- Water Rise; Release Not Expected. Vientiane Times. Availa- Agreements (PPA) are not met. come stranded assets. For example, ble at https://wle-mekong.cgiar.org/ an MRC summary note examining nam-ngum-dam-water-levels-rise-​ release-not-expected/ Climate change increases risks for hy- different hydropower pathways in the dropower’s future viability and safety. Mekong identifies inconsistencies in 17. Mekong River Commission (2017, November 23). The Council Study: Key Climate change can also negatively the hydropower export plans of Laos Message from the Study on Sustainable impact hydropower projects’ ability to and Cambodia on the one hand, and Management and Development of the Mekong River Basin, including Impacts of generate both electricity and income. electricity import plans of Mainstream Hydropower Projects, p. 3. With climate change comes more and Thailand on the other. Accord- 18. Mekong River Commission (2018). unpredictable and extreme weather ing to the paper, by 2040 Lao plans Summary note: Review and Update of events, which influences reliability of to export 11,739 MW of power to Basin-wide Sustainable Hydropower Development Strategy for the Lower water flows, the main determinant of Thailand, while Thai plans indicate Mekong Basin, Draft version 1.0, 28 how much electricity a hydropower it will only import 4,274MW.18 This August 2018, pp. 13–14. Available at: http://www.mrcmekong.org/assets/ project can generate. Droughts reduce difference of nearly 7,500 MW, which Uploads/Summary-note-Draft-SHDS- the amount of electricity a dam can is greater than the combined installed Aug-2018.pdf generate, while extreme rainfall in- capacity of all the seven mainstream 19. Seven mainstream dams entirely creases risk of dam failure and massive dams planned or under construction within Lao territory includes Pak Beng, Luang Prabang, Xayaburi, Pak flooding due to sudden water releases. in Laos,19 points to uncertainties in Lay, Sanakham, Phou Ngoy and Don the market for planned hydropower Sahong. Pak Chom and Ban Khoum dams are planned for the Thai-Lao These climate change risks are not projects. border. hypothetical predictions of the future; 20. Vannak, C. (2019, August 9). Solar to they are affecting how dams operate There are already signs indicating that Make Up 15pct of Local Energy Pro- in the Mekong region today. For ex- the market for planned hydropower is duction by 2020. Khmer Times. Avail- able at: https://www.khmertimeskh. ample, low rainfall and water levels becoming more unpredictable. Two com/631779/solar-to-make-up-15-pct- resulted in major and on-going power planned Mekong mainstream dams, of-local-energy-production-by-2020/; Vireak, T. (2019, July 8). Gov’t to Re- cuts in Cambodia in 2019, largely Pak Beng and Pak Lay dams, which duce Reliance on Hydro. Phnom Penh because hydropower projects — which completed the MRC Prior Consultation Post. Available at: https://www.phnom​ penhpost.com/business/govt-reduce-​ comprise approximately half of do- process in 2017 and 2019 respectively, reliance-hydro mestic capacity — were unable to gen- have yet to secure a Power Purchase erate sufficient power.15 In 2018, it was Agreement. Following major power floods that caused major devastation shortages due to underperforming in parts of Laos and the Lower Mekong hydropower in 2019, Cambodia is in- Basin — flooding which was exacerbat- creasing investments in solar power ed by the sudden release of water by and has recently indicated that the dams to cope with the large amounts Sambor and Stung Treng dams planned of rainfall.16 for the mainstream are no longer part of the government’s power develop- A shifting energy landscape poses ment plan.20 risks to hydropower’s future econom- ic viability. Project studies should Given the significant uncertainties include comprehensive options as- and risks associated with large-scale sessment. Noting the widespread hydropower projects, it is vitally im- and irreversible impacts hydropower portant for investors and lenders to development, one of the MRC Coun- comprehensively assess ESG risks at cil Study’s recommendations is for the outset and undertake regular mon- MRC member countries to consider itoring. Yet the scope and quality of other renewable energy sources such risk assessments on large hydropow- as solar and wind as alternatives to er projects to date have downplayed hydropower, which are becoming risks, particularly environmental and

6 Challenges of Dam Financing for Thai Banks 21. The Economist Intelligence Unit (2017). Water Security Threats Demand Box 1: Downplaying and offloading risks New Collaborations: Lessons from the Mekong River Basin. (London: The Economist Intelligence Unit), p. 16. Excerpt from Trandem, A. (2019). Offloading Risks & Avoiding Liabilities: How Financial Available at: https://ccacoalition.org/ Institutions Consider Hydropower Risks in Laos. (Bangkok: Focus on the Global South). en/resources/water-security-threats-​ demand-new-collaborations-lessons-​ mekong-river-basin “Risk assessments, as currently carried out by hydropower investors and lenders, often provide a misleading picture of risks involved in dam build- ing. There are a wide range of reasons why risk assessments are rarely accurate. Firstly, the upfront costs required to develop a project proposal, including its feasibility study and impact assessment are lost if a project is not approved. Secondly, hoping to get a project approved can serve as an incentive for an investor to exaggerate the projected benefits, while downplaying the risks. Finally, without strong independent regulatory systems in place to ensure accurate planning and accountability from investors and lenders, many unidentified and longer-term risks are simply ignored and transferred onto the public sector…

“Risks are downplayed in part because few investors and lenders really integrate comprehensive environmental, social, and governance (ESG) factors into their investment practices. And when they do, the ESG con- siderations may take second place to economic and strategic rationales…

“Investors and lenders, instead, often rely on environmental and social impact assessments (ESIA) to understand the risks of a dam to the envi- ronment and local population. Too often, the quality of ESIA reports is poor and many environmental and social risks are ignored. Civil society has raised concerns over many ESIA reports in Laos as simply ‘rubber-​ stamping’ approval of the dam. The ESIA reports, when made public, fail to achieve accurate analyses or meet international standards. Peter King, an expert on ESIAs in the Mekong region who heads the Asian Environ- mental Compliance and Enforcement Network secretariat, stated ‘Despite generally sound laws, the EIA in the region is seen more as an adminis- trative requirement than an excellent tool to improve project design. In general, across the region, public participation in EIA procedures is encouraged but not mandated, grievance mechanisms are often lacking and public access to EIA reports is poor.’…21

“Another obstacle to fully understanding a dam’s impacts is that meaning- ful consultations with affected communities are rarely held. Furthermore, when indigenous people are consulted, their rights to Free, Prior and Informed Consent (FPIC) are not respected. ESIA reports also rarely con- sider transboundary impacts and the cumulative impacts of multiple dams being built in the same basin. Other important risks are rarely considered in ESIAs, including: climate change; seismic risks; debt distress and future payment challenges; growing social inequality; alternative energy options; and whether the risks inherent to the project undermine people’s rights and the country’s development goals.”

Fair Finance Thailand 7 22. Trandem, A. (2019). Offloading Risks & social risks, which often take second decisions and activities. In the words Avoiding Liabilities: How Financial In- stitutions Consider Hydropower Risks in place to investors’ and lenders eco- of, Veerathai Santhiprabhob, Governor Laos. nomic and strategic interests22 (see of the Bank of Thailand:24 23. OECD (2017). Responsible Business Box 1: Downplaying and offloading Conduct for Institutional Investors: Key ). There is growing recognition “…financial institutions cannot underes- Considerations for Due Diligence under risks the OECD Guidelines for Multinational that failure to include ESG issues into timate the risks that come with various Enterprises. Available at: https:// investment and lending practices not aspects of ESG, as these risks can impair mneguidelines.oecd.org/RBC-for-Insti- tutional-Investors.pdf only poses significant operational, the long-run sustainability of the finan- legal and reputational risks, but is also cial institutions themselves. To manage 24. Santhiprabhob, V. (2019). Opening Remarks, Bangkok Sustainable Bank- seen as a failure of fiduciary duty.23 and reduce these risks, it is important ing Forum 2019. 13 August 2019, Thus, banks should no longer focus that financial institutions internalize Bangkok, Thailand. Bank of Thailand. Available at: https://www.bot.or.th/ primarily on short-term gains and sustainability considerations and prop- Thai/PressandSpeeches/Speeches/ profits at the expense of long-term erly price potential risks into different Gov/SpeechGov_13Aug2019.pdf adverse impacts of their lending aspects of their operations.”

Lenders’ Commitments and Responsibilities Commercial banks and financiers play the above international standards and an important role as intermediaries as guidelines are institutional commit- their decisions over where and how ments to sustainability and corporate financial resources are allocated and responsibility, which includes, among invested can determine whether or others: minimising adverse social and not projects proceed. The financial environmental impacts; conducting sector’s growing recognition of the due diligence and monitoring to as- importance of integrating ESG risks sess and manage risks, importance of into lending policies and practices is stakeholder engagement, strengthen- evident in the number of international ing transparency and accountability. initiatives, standards and guidelines that have been developed. Some of There are, however, some differences these have been led by the financial in the guidelines when it comes to sector and institutions themselves, financial institutions’ human rights acknowledging that adverse environ- obligations and ensuring effective mental, social and human rights im- remedy. The Equator Principles, IFC pacts of their activities can increase Performance Standards, and OECD reputational, legal and financial risks. Guidelines on MNEs were all updated Table 2 below outlines some key in- after the adoption of the UN Guiding ternational initiatives, standards and Principles on Business and Human guidelines covering ESG risk manage- Rights (UNGPs) in 2011, and include ment in the financial sector. references to companies or clients’ responsibilities to respect human While the above international stand- rights and ensure access to remedy ards and guidelines are mostly vol- throughout their supply chains. Two untary and some are more principles important principles in the UNGPs than operational guidelines, they can that, if properly implemented, would help banks better understand and go a long way in lessening social and manage risks and promote good prac- environmental impacts from hydro- tice when considering lending to large power projects are meaningful consul- hydropower projects. Common to all tation and access to remedy.

8 Challenges of Dam Financing for Thai Banks Table 2: Select international initiatives, standards and guidelines covering ESG risk management in the financial sector

Initiatives Standards, Description Guidelines

UN Environmental Launched in 1992, UNEP FI is a global partnership between United Nations Program (UNEP) Environment Program and the financial sector to promote sustainable finance. Finance Initiative (FI)[1] Over 250 institutions, including banks, insurers and fund managers, work with UNEP to understand the impacts of environmental and social considerations on financial performance. Equator Principles (EP)[2] A risk management framework adopted by financial institutions to determine, assess and manage environmental and social risk in projects. EP aims to provide a minimum standard for due diligence and monitoring to support responsible decision-making.

Currently 97 financial institutions have officially adopted EP. Current version — EP3 — was adopted in 2013, but is under review, with EP4 expected to be completed by end of 2019. IFC Environmental and Performance Standards (PS) apply to clients of the International Finance Social Performance Corporation (companies that have secured IFC financing for a project). The eight Standards[3] standards establish responsibilities that client must meet ‘throughout the life of an investment’. The current version of PS (2012) are supported by Guidance Notes, which provide further guidance on PS requirements.[4] UN Principles for Launched in September 2019, PRB outlines six principles under which adopting Responsible Banking banks commit to aligning “business strategy to be consistent with and contribute (PRB)[5] to individuals’ needs and society’s goals, as expressed in the Sustainable Development Goals, the Paris Climate Agreement and relevant national and regional frameworks.”[6] UN Principles on Developed by a group of international institutional investors and sits alongside Responsible Investment UN Global Compact. Launched in 2017, UNPRI assists investors to better incorporate Sources: (UNPRI)[7] Environmental, Social and Governance (ESG) issues into investment practices. [1] See: https://www.unepfi.org/ UNPRI see that ESG issues impact investment portfolios over time, so they must be [2] See: https://equator-principles.com/ [3] Available at: https://www.ifc.org/wps/ incorporated in order for investors’ fiduciary responsibilities to be met. wcm/connect/24e6bfc3-5de3-444d-be9b- UN Guiding Principles Leading global framework for business and human rights, endorsed by the UN 226188c95454/PS_English_2012_Full-​ Document.pdf?MOD=AJPERES&CVID=- on Business and Human Human Rights Council in 2011, is based on three pillars: ‘Protect, Respect, Remedy’. jkV-X6h [8] Rights (UNGPs) These refer to the duty of states to protect human rights from abuses by third [4] Available at: https://www.ifc.org/wps/ parties, including companies; companies must respect human rights; and ensuring wcm/connect/9fc3aaef-14c3-4489-acf1- access to effective remedy when human rights have been violated. a1c43d7f86ec/GN_English_2012_Full-Doc- ument_updated_June-27-2019.pdf?MOD=​ AJPERES&CVID=mKqITOj UNGP apply to all companies, including commercial banks and other entities in [5] See: https://www.unepfi.org/banking/ the financial sector. To avoid and address adverse human rights impacts, banks bankingprinciples/ should develop a human rights policy; undertake due diligence to assess actual [6] UNEP Finance Initiative (2019). Principles for Responsible Banking. Available at: and potential human rights impacts; and ensure remedy for impacts that https://www.unepfi.org/wordpress/ [9] they have caused or contributed to. wp-content/uploads/2019/07/ FINAL-PRB-Signature-Document-2-Inter- The UNGPs have been incorporated in updates to the Equator Principles, IFC active-22-07-19.pdf [7] See: https://www.unpri.org/pri Performance Standards, and OCED Guidelines on Multinational Enterprises. [8] Available at: https://www.ohchr.org/ OECD Guidelines for Guidelines apply to governments and MNEs, including banks, in all 36 OECD Documents/Publications/ GuidingPrinciplesBusinessHR_EN.pdf Multinational Enterprises countries and 12 non-OECD countries (that have agreed to adhere to them). [9] UNEP FI and Foley Hoag LLP (2015, [10] (MNEs) 2011 Update They are binding on governments but non-binding on MNEs. Complaints relating to December). Banks and Human Rights: A breaches of the Guidelines can be made to National Contact Points (NCP), Legal Analysis. (Geneva: UNEP FI). which are created by all adhering states. Available at: https://www.unepfi.org/ fileadmin/documents/BanksandHuman- Rights.pdf; Also see: https://www.ohchr. The OECD is developing further guidance on how the OECD Guidelines apply to org/Documents/Issues/Business/ the financial sector. In 2017, OECD released a “Responsible Business Conduct InterpretationGuidingPrinciples.pdf for Institutional Investors” guide and is developing a due diligence on project [10] Available at: https://www.oecd.org/daf/ [11] inv/mne/48004323.pdf finance. [11] Trandem, A. (2019). Offloading Risks & Task Force on An industry-led initiative established in 2015 to develop voluntary, consist- Avoiding Liabilities: How Financial Institutions Consider Hydropower Risks Climate-related Financial ent climate-related financial risk disclosures for use by companies, banks, in Laos, p. 17. [12] disclosure and investors in providing information to stakeholders. [12] See: https://www.fsb-tcfd.org

Fair Finance Thailand 9 25. Danish Institute for Human Rights limit the scope of existing remedies or (2019). UN Guiding Principle 18. Avail- able at: https://globalnaps.org/ungp/ Meaningful Consultation targeting affected communities with guiding-principle-18/ strategic lawsuits against public par- 26. UN Working Group on Business and Although companies routinely con- ticipation may also be regarded as Human Rights (2017). Report of the duct various forms of stakeholder inconsistent with the responsibility to Working Group on the Issue of Human Rights and Transnational Corporations engagement, numerous grievances “cooperate” with legitimate processes and Other Business Enterprises. Availa- of affected villagers from past hydro- aimed at obtaining effective reme- ble at: https://documents-dds-ny.un.​ org/doc/UNDOC/GEN/N17/218/65/ power construction projects in the dies.”26 PDF/N1721865.pdf?OpenElement Mekong region attest to the fact that 2 7. BankTrack (2017, December). Human few project companies paid atten- There are also various hydropower-​ Rights Briefing Paper: How Banks Con- tion to whether their engagement is specific standards and tools, which tribute to Human Rights Violations. Available at: https://www.banktrack. meaningful. Principle 18 of the UNGPs can help banks better understand and org/download/how_banks_contribute_​ advises businesses to “involve mean- manage risks related to hydropower. to_human_rights_abuses/180416_ how_banks_contribute_human_rights_​ ingful consultation with potentially These include, for example: 1.pdf affected groups and other relevant stakeholders, as appropriate to the ◆ The World Commission on Dams size of the business enterprise and the (WCD), which developed a new nature and context of the operation” decision-making framework based (italics added). For engagement to on recognition of rights and assess- be meaningful, the guideline advises ment of risks. WCD put forward businesses to “seek to understand the seven strategic priorities based on concerns of potentially affected stake- a set of policy principles, and 26 holders by consulting them directly guidelines for good practice that in a manner that takes into account lay out actions to comply with the language and other potential barriers strategic priorities. to effective engagement. In situations where such consultation is not pos- ◆ The Hydropower Sustainability sible, business enterprises should Assessment Protocol (HSAP), which consider reasonable alternatives such is an industry-led auditing tool to as consulting credible, independent assess and improve sustainability expert resources, including human of individual hydropower projects. rights defenders and others from civil It measures sustainability perfor- society.”25 mance of hydropower projects at different stages across more than twenty topics.

Access to Remedy ◆ The Rapid Basin-wide Sustainability Assessment Tool (RSAT) is a multi-​ Principle 22 of the UNGPs provides stakeholder dialogue and assess- that where “business enterprises iden- ment tool to examine hydropower tify that they have caused or contrib- sustainability issues in a river basin uted to adverse impacts, they should context. Initial developed by MRC provide for or cooperate in their reme- with ADB and WWF, it has been diation through legitimate processes.” piloted in various river basins in In a 2017 report to the UN General the Mekong region. Assembly, the UN Working Group on Business and Human Rights further Commitments to and endorsement of clarifies that “as part of their respon- international standards and guide- sibility to respect human rights, busi- lines, however, does not guarantee ness enterprises should, in good faith, compliance, as evidenced by documen- not only participate in all such legiti- tation of harmful projects financed by mate processes, but also comply with banks, including signatories to the their remedial decisions. Attempts to Equator Principles.27

10 Challenges of Dam Financing for Thai Banks Thai Lenders’ Commitments and Responsibilities

On 13 August 2019, the Thai Bankers’ practices. Currently, the guidelines 28. The Thai Bankers’ Association (2019, Association (TBA) issued “Sustainable read like a list of high-level principles August 13). Sustainable Banking Guide- lines: Responsible Lending by The Thai Banking Guidelines: Responsible and aspirations. There is no substan- Bankers’ Association, p. 1. Lending by Thai Bankers’ Associa- tive guidance nor concrete timebound 29. Thai Cabinet resolutions May 16, tion”, which defines “minimum ex- commitments and actions, indicating 2016 and May 2, 2017. Available at: pectations on responsible lending when and how banks will translate the http://www.cabinet.soc.go.th/soc/Pro​ gram2-3.jsp?top_serl=99319369&key_ practices for all banks based in Thai- guidelines into practice. While the an- word=&owner_dep=&meet_date_ land” and provides guidance for banks nex includes references to international dd=16&meet_date_mm=5&meet_date_ yyyy=2559&doc_id1=&doc_ “to establish a responsible lending frameworks, standards and guidelines, id2=&meet_date_dd2=&meet_date_ strategy to manage their environ- such as the Sustainable Development mm2=&meet_date_yyyy2= and http:// www.cabinet.soc.go.th/soc/Program​ mental and social (E&S) risks and Goals and the Paris Climate Agreement, 2-3.jsp?top_serl=99324013&key_word​ impacts.”28 The guidelines identify four there is no reference to more substan- =&owner_dep=&meet_date_dd=2&​ meet_date_mm=5&meet_date_yyyy​ “foundational elements” which should tive standards and guidelines. =2560&doc_id1=&doc_id2=&meet_ inform banks’ responsible lending date_dd2=&meet_date_mm2=&meet_ date_yyyy2= strategy and practices. These include: Moreover, the guidelines make no reference to human rights, grievance 30. Comments by the Royal Thai Govern- ment on the Report of the Working 1. Leadership and responsible lend- mechanisms and remediation meas- Group on the Issues of Uuman Rights which notes that ures. This is a major gap, particularly and Transnational Corporations and ing commitment, Other Business Enterprises on Its commitments by senior leadership in light of Thai Cabinet resolutions in Visit to the Kingdom of Thailand (A/ of banks can be “powerful signals to 2016 and 2017, which made clear that HRC/41/43/Add.1), p. 4. Available at: https://documents-dds-ny.un.org/doc/ internal and external stakeholders Thai companies operating abroad are UNDOC/GEN/G19/159/72/PDF/G1915​ on banks’ commitments to respon- expected to adhere to international 972.pdf?OpenElement sible lending.” standards, including the UN Guiding 31. (n.d.). Human Principles and Business and Human Rights Policy. Available at: https:// www.scb.co.th/content/dam/scb/ 2. Stakeholder engagement, which Rights.29 The Thai Government is cur- about-us/sustainability/documents/ recognise effective and broad en- rently drafting its National Action Plan 15june2018/en-human-rights-policy. pdf gagement with range of stakehold- on Business and Human Rights, which ers is important to determining ESG is expected to be adopted in 2019, and 32. (n.d.). Human Rights Policy. Available at: https://www. risks and assessing potential ad- includes cross-border investments and kasikornbank.com/en/IR/Corporate​ verse impacts of lending activities. multinational enterprises as one of the Governance/transparency/Pages/​ Human_Rights_Policy.aspx four priority areas.30 Two TBA mem- 3. Internal implementation mecha- bers — Siam Commercial Bank31 and nisms, which outline not only the Kasikornbank32 — have also issued hu- importance of establishing policies man rights policies, which articulate a and processes, but also resourcing commitment to adhere to internation- and building capacity of senior al standards, including UN Guiding management and staff on ESG issues Principles on Business and Human and risks and sustainability. Rights. Whether this will translate into concrete implementation of their 4. Transparency, which encourage human rights commitments remains banks to publicly disclose how they to be seen. Given that one the four are implementing responsible lend- foundational elements in the TBA ing guidelines. guidelines include strengthening inter- nal implementation mechanisms, Thai While the TBA’s Sustainable Banking Bankers Association and its members Guidelines are a welcome development, should develop further guidance on there is significant room for improve- support capacity building on how Thai ment to ensure that Thai banks more banks can strengthen compliance with meaningfully implement sustainable the UN Guideline Principles on Busi- and responsible lending policies and ness and Human Rights.

Fair Finance Thailand 11 33. Fair Finance Guide International (2019, April 24). Launch Fair Finance Thai- 33 land. Available at: https://fairfinance​ Box 2: Fair Finance Thailand’s Policy Assessment of Thai Banks guide.org/ffg-international/news/​ 2019/launch-fair-finance-thailand/ Fair Finance Thailand (FFT), a coalition of NGOs advocating for Thai banks 34. FFGI methodology (2018). For policy to more meaningfully adopt and implement sustainable and responsible assessments is available at: https:// fairfinanceguide.org/media/494198/​ lending policies and practices in line with international frameworks and 2017-71-ffgi-policy-assessment-2018-​ standards, assessed publicly disclosed policies of the nine largest Thai methodology-180308-edits-180528. pdf commercial banks: , Siam Commercial Bank, , Kasikorn Bank, Bank of Ayudhya, Thanachart Bank, Thai Military 35. Middleton, C. (2009). Thailand’s Com- mercial Banks’ Role in Financing Dams Bank, TISCO Bank, and Kiatnakin Bank. in Laos and the Case for Sustainable Banking, p. 2. Available at: https:// www.internationalrivers.org/sites/​ Conducted according to Fair Finance Guide International (FFGI) criteria, default/files/attached-files/sustainable​ the policy assessment assessed 12 topics: climate change, corruption, thaibanks_ir_dec09.pdf gender equality, human rights, labour rights, nature, weapons, tax, con- sumer protection, financial inclusion, remuneration, and transparency and accountability.

Overall, FFT policy assessment revealed that Thai banks’ scores are the lowest among 10 countries where assessments have been undertaken using FFGI criteria.34 Thai banks received an average score of 12.6%, while the average score of the other nine countries (which include Belgium, Brazil, France, Germany, Indonesia, , Netherlands, Norway and Sweden) is 46.7%. Thai banks’ low scores clearly demonstrate there is significant room for improvement, especially on ensuring that lending policies take into account human rights, gender equality, as well as nega- tive social and environmental impacts — criteria for which they scored particularly low.

While important, Thai banks’ adoption of the TBA Sustainable Banking Guidelines does not guarantee compliance. Major Thai banks have long articulated commitments to corporate governance, social responsibility and environmental sustainability. While commitments vary between banks, these have included: “fair treatment of stakeholders, including customers, investors, business partners, and wider society and the envi- ronment; compliance with relevant laws; transparency and information disclosure; and environmental conservation and support for local commu- nities.”35 Despite these long-standing commitments, as the hydropower case studies in the following section demonstrate, Thai banks have con- tinued to finance large-scale dams without due consideration of environ- mental, social and human rights impacts.

12 Challenges of Dam Financing for Thai Banks Figure 1: Xayaburi project as of 31 October, 2019. Source: https://theaseanpost.com/article/does-laos-xayaburi-dam-benefit-its-people

Thai Banks and Hydropower: Case Studies of Xayaburi and Xe Pian-Xe Namnoy Dams

This section examines the risks and Mekong mainstream, and Xe Pian-Xe 36. Extra-Territorial Obligations (ETOs impacts of two controversial hydro- Namnoy dam in the Sekong Basin in Watch) (2018). Report on Thai direct investment abroad: impacts on commu- power projects in Laos financed by southern Laos. nities, environment, and human rights. Thai banks — Xayaburi Dam on the Available at: http://www.nhrc.or.th/ getattachment/eeb6c10c-8870-4593- 98c6-fd670a63ad1e/.aspx

Xayaburi Dam

Overview a major Thai construction company. Thailand’s state-owned electricity utility, The 1285-megawatt Xayaburi Dam was EGAT, will purchase 95% of the dam’s the first dam to begin construction on electricity. The project received an 80 the Lower Mekong mainstream. While billion Baht (USD 2.6 billion) syndi- located in northern Laos, it is largely a cated loan from six Thai banks: Siam Thai project. The developer, Xayaburi Commercial Bank (SCB), Bangkok Bank Power Company Limited, is majority-​ (BBL), Krung Thai Bank (KTB), Kasiko- owned by a consortium of Thai compa- rnbank (KBank), TISCO Bank and the nies led by CK Power Public Company Export-Import Bank of Thailand, the Limited, a subsidiary of Ch. Karnchang, government’s export credit agency.36

Fair Finance Thailand 13 Figure 2: Location of Xayaburi and other hydropower projects in Mekong River. Source: https://theaseanpost.com/article/does-laos-xayaburi-dam-benefit-its-people

14 Challenges of Dam Financing for Thai Banks As a Lower Mekong mainstream dam, series of recommendations, including 37. Mekong River Commission (2010, December 15–2011, April 22). Xayaburi Xayaburi was also the first project the need for further data and studies. Hydropower Project Prior Consulta- to undergo the Mekong River Com- MRC member countries also expressed tion Process. Available at: http://www. mrcmekong.org/topics/pnpca-prior-​ mission’s (MRC) Prior Consultation concerns with Vietnam, and later consultation/xayaburi-hydropower-​ Process, which is required under the Cambodia, calling for Xayaburi to be project-prior-consultation-process/ MRC’s Procedures for Notification, suspended and a ten-year moratorium 38. Hirsch, P. (2011). Review of Xayaburi Prior Consultation and Agreement on all mainstream dams, pending Dam EIA Incorporation into Regional Consultation on Impacts. Available at: (PNPCA).37 During the Xayaburi Prior further studies to better understand https://www.internationalrivers.org/ Consultation process, which com- the river system and the impacts of sites/default/files/attached-files/ hirsch_xayabouri_dam_esia_consulta​ menced in October 2010, many stake- proposed dam projects. tion_process.pdf holders, including MRC member 39. Mekong River Commission (2011). governments, raised concerns over the Despite the disagreement amongst Proposed Xayaburi Dam Project: MRCS project and questioned the adequacy MRC member countries, the Govern- Prior Consultation Project Review Report, p. 70. Available at: http://www. of the data and studies used to inform ment of Laos (GoL) pushed ahead mrcmekong.org/assets/Publications/ decision-making about the project’s with development of Xayaburi, with Reports/PC-Proj-Review-Report-Xaiya​ buri-24-3-11.pdf impacts and whether it should be the project developers announcing a built. Despite the Prior Consultation redesign of the dam and additional 40. Mekong River Commission (2016, December). Procedures for Notification, process not being formally concluded investment in impact mitigation meas- Prior Consultation and Agreement (PN- due to lack of agreement among MRC ures to address concerns, which has PCA) Brochure, p. 7. Available at: http://www.mrcmekong.org/assets/ member countries, the project pro- reportedly amounted to USD$400 Publications/PNPCA-brochure-11th-​ ceeded and is scheduled to start full million.40 design-final.pdf operations in October 2019. 41. This section is largely excerpted from a forthcoming Commentary on the Xayaburi redesign: “Review of the Design Changes Made Inadequate ESIA increases Expensive but questionable for Xayaburi Dam” commissioned by project costs effectiveness.41 International Rivers. 42. Mekong River Commission (2019). From the outset, the Xayaburi Dam Serious questions and concerns re- Review of the Design Changes Made for Xayaburi Hydropower Project. Techni- was a highly controversial project main on whether the redesign meas- cal Reference Paper no. 65 (January). due to widespread concerns over its ures will effectively reduce and Available at: http://www.mrcmekong. org/assets/Publications/Review-of-the- expected impacts on the river system, mitigate the environmental and social design-change-made-for-Xayaburi-hy​ including transboundary impacts on impacts of the dam. In January 2019, dropower-project_technical-ref-paper_​ 2019.pdf neighbouring countries within the the MRC published a ‘Review of De- basin. Yet, the project’s environmental sign Changes Made for the Xayaburi 43. Mekong River Commission (2011). Proposed Xayaburi Dam Project: MRCS impact assessment (EIA), completed in Hydropower Project’,42 which assessed Prior Consultation Project Review 2010, only assessed potential impacts the submitted information against the Report. in the areas to be flooded for the res- findings and recommendations of the ervoir and up to ten kilometres down- Xayaburi Technical Review Report stream.38 Furthermore, while the EIA (TRR).43 was submitted to the MRC technical review teams as part of Prior Consul- The MRC Review finds a number of tation process, it was not publicly dis- shortcomings in the redesign informa- closed for the consultation workshops. tion, both in terms of the adequacy of the mitigation measures themselves, The poor quality of the EIA and pro- as well as the comprehensiveness of ject documents is evident in MRC’s the data provided to the review team Technical Review Report (TRR), which in order to assess such adequacy. A found multiple gaps and flaws, noting particular concern expressed through- that the “dam design as well as man- out the MRC Review findings is that, agement and mitigation measures as without information on the operation- proposed in submitted documents do al rules of the dam, it is not possible not yet comply with the PDG [Prelimi- to assess the adequacy of the redesign nary Design Guidance] or internation- measures. al best practice.”39 The TRR made a

Fair Finance Thailand 15 44. International Centre for Environmen- In relation to the effectiveness of public disclosure of key project doc- tal Management (2010). Strategic Envi- ronmental Assessment of Hydropower the fish pass, the MRC Review notes uments throughout the process. As in the Mainstream, p. 24. that nowhere in the world have these mentioned above despite the EIA 45. The 2005 National Policy: Environ- measures been tested or monitored. being completed in February 2010 mental and Social Sustainability of Xayaburi is thus in effect being used and Lao hydropower policies requiring the Hydropower Sector in Lao PDR is applicable at time the Xayaburi EIA as an experimental test case, which disclosure of EIAs, the EIA was not was conducted and completed. The contravenes the fifth and final recom- made publicly available during the 2005 Policy was replaced in 2015 by Policy on Sustainable Hydropower mendation of the 2010 MRC-initiated Xayaburi Prior Consultation Process, Development in Lao PDR (PSHD). Both Strategic Environmental Assessment further constraining opportunities for policies require disclosure of EIAs. of Hydropower on the Mekong Main- meaningful public participation.45 Fur- 46. Government of Laos, Policy on Sus- stream, which states that that: “The thermore, despite multiple requests tainable Hydropower Development in Lao PDR (PSHD), 2015; and the 2016 Mekong mainstream should never be from stakeholders over a number of Policy Guidelines for the Implementa- used as a test case for proving and years, key documents and informa- tion of Policy on Sustainable Hydro- power in Lao PDR (see 5.10 Informa- improving full dam hydropower tech- tion relating to the redesign were not tion Disclosure, p. 13). nologies.”44 made publicly available. The Lao Gov- 47. Available at: http://www.xayaburi.com/​ ernment’s 2015 Policy on Sustainable index_eng.aspx There are also serious concerns over Hydropower Development (PSHD) and 48. Mekong River Commission (2019, sediment, with major and unex- the 2016 Implementation Guidelines July 18). Mekong water levels reach plained discrepancies between MRC also require project developers to low record, Media Release. Available at: http://www.mrcmekong.org/news- and project developer’s estimates on disclose gross project revenues and and-events/news/mekong-water-levels-​ sediment composition. This discrep- spending on environmental and social reach-low-record/ ancy suggests a significant scientific safeguards.46 However, there is little disagreement that has an important to no information on the Xayaburi bearing on Xayaburi and other main- Power Company Limited’s website on stream dams’ capacity to trap/release what and how much the company has sediment, which in turn have major spent on environmental and social implications for the delivery of sedi- safeguards.47 ment to the Mekong Delta. Climate change and The USD$ 400 million spent on the uncertainty: Potential redesign have often been mentioned, impacts on future power but there is nothing in the documents generation and income provided that breaks down how these funds have been applied to the During June to July 2019, water levels various components of fish passage, along the Mekong River were among sediment passage, navigation and the lowest ever recorded48 due to a other aspects of the project’s redesign. combination of extended drought and Spending a lot of money does not ’s located up- guarantee effectiveness. stream reducing the amount of water released. Climate change is making There is an on-going risk that the weather patterns more unpredictable, project may need to invest more to which has significant implications address social and environmental im- for Mekong River flows and levels. pacts from the dam, thereby increas- Flows into Xayaburi reservoir, and ing costs and potentially reducing hence electricity generation, will be profits, which in turn may impact on influenced by climate change and op- their capacity to repay loans. erations of existing and planned dams upstream. Future extended droughts Not a Transparent Dam combined with upstream dams with- holding water will reduce the amount Xayaburi Dam has been plagued by a of electricity that Xayaburi Dam can lack of transparency, with the devel- generate, which in turn can impact oper either withholding or delaying on revenue. As a so-called run-of-river

16 Challenges of Dam Financing for Thai Banks Figure 3: A screengrab from an aerial video showing dry patches along the Mekong river downstream from the Xayaburi Dam. Source: AFP

dam, Xayaburi Dam is particularly While dismissed by lower courts on 49. International Rivers (2016, January 25). Media Kit on Xayaburi Dam Lawsuit. susceptible to reductions in flows, as jurisdictional grounds, the Thai Su- Available at: https://www.international​ the dam has less capacity to store wa- preme Court’s accepted the lawsuit on rivers.org/resources/9230 50 ter for long periods than large-storage appeal in 2014. The acceptance not 50. Harris, M. (2019). Our River, Our dams. If power generation falls below only confirmed that Thai state agen- Rights: Extraterritorial Accountability in the Mekong. In M. Mullen et al targets set out in the Power Purchase cies had responsibilities for project (eds.), Navigating a New Era in Business Agreement (PPA), the company may impacts, despite its location in Laos, and Human rights (n.p.: Article 30 and Institute of Human Rights and Peace face penalties, which would further but also pointed to the likelihood of Studies, Mahidol University), pp. 125– erode profits. transboundary impacts: 132. Available at: https://article30.org/ wp-content/uploads/2019/08/a_new_ era.pdf “It is widely known that the project may Legal risks: Xayaburi PPA 51. Supreme Administrative Court of still in the courts cause impacts to the environment, water Thailand, Judgement No. KS8/2557, quality and quantity, the flow of water, June 24, 2014. As of August 2019, a lawsuit filed by ecological balances of the Mekong basin 52. Bangkok Biznews (2019, July 26). 37 villagers against five Thai state and other transboundary impacts in ri- Mekong Villagers Asked Court for Injunction to Suspend Electricity Pur- agencies regarding the legality of the parian countries, particularly local com- chase from Xayaburi. Bangkok Biznews Xayaburi Dam’s PPA, is still pending. munities in the eight riparian provinces Available at: https://www.bangkokbiz​ news.com/news/detail/841902 Filed in August 2012, the plaintiffs of the Kingdom of Thailand, which may argued that the approval of the PPA is bear extensive impacts on environmental illegal under the Thai Constitution and quality, public health, sanitation, liveli- the 1995 Mekong Agreement because hoods, or community interests.”51 it was approved without assessing the project’s transboundary environmen- More recently, in July 2019, the plain- tal and social impacts and without tiffs filed for an injunction to suspend consultations in Thailand, as required the PPA until measures to mitigate under the Thai Constitution.49 environmental impacts are released.52

Fair Finance Thailand 17 53. Wipatayotin, A. (2019, July 20). Dam The application for an injunction fol- studies. Only relying on project-com- Test Sparks Crisis: Thailand Asks Laos for Xayaburi Delay. Bangkok Post. lowed Xayaburi Dam’s testing of its missioned EIA and studies for large Available at: https://www.bangkok​ turbine during the extended drought hydropower projects is insufficient post.com/thailand/general/1715627/ dam-tests-spark-crisis period, which exacerbated impacts to comprehensively assess environ- on downstream communities in Thai- mental and social risks in Laos, where 54. OECD (2017). OECD Investment Policy Reviews: Lao PDR, p. 253. Available land who were already suffering from “there is a lack of institutional ca- at: http://dx.doi.org/10.1787/978926​ record-low water levels. Concerned pacity to plan, regulate and monitor 4276055-en over the impacts on drought-affected implementation of EIA.”54 55. Greacen, C. S. and Greacen, C. (2012, provinces in northeast Thailand, on April). Proposed Power Development Plan 2012 and a Framework for Im- 19 July 2019, Thailand’s Office of It would not have taken much effort proving Accountability and Performance National Water Resources submitted for the Thai banks to be made aware of Power Sector Planning. Available at: https://www.internationalrivers.org/ an official letter requesting the Lao of major and widespread concerns sites/default/files/attached-files/pdp​ government to suspend the testing of about the project, including significant 2012-eng.pdf turbines.53 gaps and flaws in project risk and im- pact assessments, most of which were While the court case continues, there publicly available prior to the banks’ remains a risk that the PPA may be decisions to finance Xayaburi Dam. As cancelled or delayed if the court rules noted above, the MRC Technical Re- in favour of the plaintiffs. If so, this view Report, clearly states that project could have major consequences for design, management and mitigation the project’s financial viability measures to do not meet MRC guide- lines or international best practice. Thai Banks and Xayaburi: Responsible and Comments also indicate that the Sustainable? banks made little to no effort to en- gage stakeholders in Thailand, let Comments by senior leadership of alone in the region, prior to making Thai Banks that financed Xayaburi their decision to support the project. Dam (see Box 3), demonstrate there Furthermore, despite commitments is a long way to go to translate their to transparency, most of the Thai responsible and sustainable lending banks have yet to publicly disclose commitments into practice. However, their contribution to syndicate loan, recently there has been some encour- nor the terms and conditions for loan aging trends, as some senior bank- agreement, including to what extent, ers admitted to needing to develop if any, conditions related to environ- sector-​specific guidelines, i.e. looking mental and social risks and impacts, beyond the lens of legal compliance, and monitoring were included. to promote more responsible lending in the future. It is clear that the banks’ primary focus is on the financial returns and The comments indicate inadequate project’s ability to repay loans, ne- due diligence by the banks on envi- glecting environmental and social ronmental and social risks and im- concerns. Here, EGAT’s decision to pacts prior to agreeing to finance the sign a PPA to buy 95% of Xayaburi’s project. Engaging external experts to electricity for 29 years was a key fac- inform due diligence is important. tor in closing the deal, despite ongoing However, TISCO Bank’s CEO com- questions by independent analysts ments indicates that they relied pri- and civil society over Thailand’s need marily on the reports by consultants for the electricity.55 commissioned by the developers and Lao Government, who wanted to see Kasikorn bank’s CEO comment that the project proceed, and ignored other “the project has already been approved expert and independent analysis and by the international committee” is

18 Challenges of Dam Financing for Thai Banks 56. Nanthawithaya, A. (2019). Comments made at Bangkok Sustainable Banking BOX 3: Thai Banks views on Xayaburi Dam: from past to present Forum 2019 [video]. Bank of Thailand. Available at: https://www.bot.or.th/ broadcast/Sustainable/20190813-Sus​ “We’re not going to make the statement that we won’t [lend to] hydropower. tainable-Session3.mp4 But in fact, there is a standard [that] we should comply and work with our 57. Ibid. clients…. We keep asking ourselves ‘what type of standard’? In [Xayaburi] project, we also tried to have our own independent advisor, but maybe it’s not 58. Prachatai. (2013, April 26). TISCO Explained to Its Shareholders: Xaya- good enough. So, this is something we will keep an eye open and try to do buri Loan is Not Unethical [‘ธนาคาร better to improve our quality.” ทิสโก้’ แจงผู้ถือหุ้น ปล่อยกู้ ‘เขื่อนไซยะบุรี’ ไม่ ผิดศีลธรรมอันดี]. Prachatai. Available at: http://prachatai.com/journal/2013/04/​ ​ — Arthit Nanthawithaya, 46429

CEO of Siam Commercial Bank, 2019, 59. Prachatai. (2013, April 4). KBANK responding to question from the audience regarding Xayaburi56 Explained Its Confidence in; Refusing to Disclose Loan amount [‘กสิกรไทย’ แจงผู้ถือหุ้น มั่นใจ ‘เขื่อนไซยะบุรี’ อุบเงียบ “At the time we granted the loan, the proposal was that there were certain มูลค่าเงินกู้]. Prachatai. Available at: https://pracha​tai.com/journal/2013/​ principles that were already complied with, so the decision was made at that 04/46111 time because certain criteria had been met. But now, I don’t know exactly if the drought that happened is because of the dam; there is still quite contro- versial Information. It is of course an issue, a very big issue for us; we have to be very, very careful going forward, as something that may have environmen- tal impact.”

— Pridi Daochai, President of Kasikornbank, 2019, responding to question from the audience regarding Xayaburi57

“TISCO has determined that this project is not unethical; it is an energy project that will boost Thailand’s economic growth, and we are confident that it will be able to repay loans on schedule... Xayaburi is a run-off-the-river dam with- out large reservoir; therefore, it has little sedimentary impact. It also has fish passage. As for potential impact to the society and environment, TISCO is not an expert in these fields, so the bank relied on external experts. This project employs six consulting firms which produced numerous reports... those reports concluded that this dam will have very little social and environmental impacts, less than Chinese dams built in the Upper Mekong. For these reasons, TISCO was comfortable with joining the loan syndicate.”

— Oranuch Apisaksirikul, President and CEO of TISCO Bank, 201358

“Xayaburi project has almost no repayment risk. Every Thai bank [in this syndicate] jumped at the chance to support it, because the project has already been approved by the international committee. In addition, Electricity Gener- ation of Thailand (EGAT) agrees to buy all electricity produced from the pro- ject, and Thailand also needs this electricity. We therefore are not concerned about repayment .... But since it is a large project, it may have some impact on the local communities. For example, some communities will be relocated away from flooded areas. It is normal for large projects to have both support- ers and dissenters; therefore, it is a matter of weighing between costs and benefits.”

— Buntoon Lamsam, CEO of Kasikornbank, 201359

Fair Finance Thailand 19 60. See Vietnam and Cambodia’s formal misguided. At the end of the initial dams, and Cambodia requesting exten- reply forms to the Xayaburi Prior Consultation Process. Vietnam: http:// six-month process, MRC member sion of the Prior consultation process www.mrcmekong.org/assets/Consulta​ countries, particularly Vietnam and so further studies can be conducted tions/2010-Xayaburi/Viet-Nam-Reply- Form.pdf; Cambodia: http://www. Cambodia expressed strong concerns, and more informed decisions made.60 mrcmekong.org/assets/Consultations/​ with Vietnam calling for a ten-year de- The Xayaburi Prior Consultation was 2010-Xayaburi/Cambodia-Reply-Form. pdf ferment on Xayaburi and mainstream never formally concluded.

61. DFDL (2014, February 6). DFDL Advises on USD 1.02 billion Lao-Thai Hydro- power Project Xe-Pian Xe-Namnoy, Media Release. Available at: https:// www.dfdl.com/resources/news/dfdl- Xe Pian-Xe Namnoy advises-on-usd-102-billion-lao-thai-hy​ dropower-project-xe-pian-xe-namnoy/ Project overview advance warning, were displaced. The 62. Rujivanarom, P. (2019, February 17). dam collapse also damaged homes Special Report: Compensation Talks Begin for Lao Dam Disaster Victims. The 410-MW Xe Pian-Xe Namnoy and properties of thousands of people The Nation. Available at: https://www. (XPXN) is a trans-basin diversion pro- living along the Sekong River in Stung nationthailand.com/national/30364301 ject under construction in the Xekong Treng Province, Cambodia. More than 63. Vientiane Times (2018, August 10). River Basin in Southern Laos. The pro- a year later, thousands of affected Steps Taken to Tnvestigate Dam Failure. ject comprises three main dams and a people are struggling meet daily needs 64. Lao News Agency (2018, July 30). large storage reservoir on the Xe Nam- and face an uncertain future. They Government Will Investigate Xepian-​ Xe Nam Noy Case In The Most Trans- noy River, enclosed by five auxiliary have yet to receive adequate compen- parent Manner; PM. Lao News Agency. (or “saddle”) dams, which are used to sation for their losses. Cambodians Available at: http://kpl.gov.la/En/De​ tail.aspx?id=36552 reinforce the reservoir (see map) affected by the disaster have received little assistance and no compensation. 65. Vientiane Times (2019, May 29). Investigators: Dam Collapse Not a The USD1.02 billion project is being “Force Majeure” Event. Vientiane developed by Xe Pian-Xe Namnoy Immediately after the collapse, the Lao Times. Available at: http://www.vien​ tianetimes.org.la/freeContent/Free​ Power Company Ltd, a joint venture, government established a National Conten_Investigators.php whose major shareholders include: Investigation Committee, chaired by SK Engineering and Construction of Deputy Prime Minister Bounthong Korea (26%), Korean Western Electric Chitmany, to examine the cause of Power (25%), Ratchaburi Electricity the collapse and the responsibilities of Generating Holding Public Company actors involved.63 The National Inves- (25%) and Lao Holding State Enterpris- tigation Committee was supported by es (24%). About 90% of the electricity an International Expert Panel, which will be sold to Thailand. A 20-year submitted their investigation report USD 714 million syndicated loan from and findings to the Lao government in four Thai banks is covering 70% of March 2019. Despite commitments by project costs. The lending syndicate the Lao Prime Minister to implement comprises: Krung Thai Bank (as lead the investigation “in the most respon- arranger), Ayudhya Bank and Tanacha- sible, transparent and just manner” rt Bank, along with the Export-Import the report has not yet been publicly Bank of Thailand, the government’s released64. However, comments by export credit agency.61 Lao government officials to Lao state media have ruled out force majeure, Dam collapse: Not a natural or an unforeseeable “act of god”, as disaster the cause of the disaster, implying that construction problems were the On 23 July 2018, an auxiliary dam of primary cause of the dam collapse.65 Xe Pian-Xe Namnoy (XPXN) Hydro- power Project collapsed, unleashing Other evidence and media reports a wall of water and wreaking havoc suggest that the dam’s lead devel- downstream. The official toll of dead oper and builder, SK Engineering and missing is 71.62 More than 7,000 and Construction may have caused people, who received little or no the collapse. A Stanford University

20 Challenges of Dam Financing for Thai Banks Figure 4: Xe Pian-Xe Namnoy project in Laos. Source: https://www.cyber-rt.info/world/laos-hydroelectric-dam-collapse-tragedy/attachment/xepian-xe-nam-noy-dam-laos/

researcher found that the dam’s res- XPXN has a long history of contro- 66. See Inclusive Development Interna- tional and International Rivers (2019). ervoir was built on a sinkhole, while versy, with NGOs and civil society Reckless Endangerment: Assessing the Korean media reports indicate that SK documenting and raising concerns Responsibility for the Xe Pian-Xe Nam- noy Dam Collapse, pp. 15–19. The Engineering & Construction lowered about the XPXN project’s impacts Korean media report is available at: the height of the dam walls in order and failure to meet international http://english.hani.co.kr/arti/english_ edition/e_international/865895.html to save money and maximise profit.66 standards in terms of impact assess- ments, meaningful consultations, 67. The other two dam failures/breaks include: Kheng Khouane Dam (August Hydropower in Laos: Major transboundary impacts, among others 2019) and Nam Ao Dam (September disconnect between policy over many years. Yet, these were ig- 2017). and practice nored or downplayed, with the project receiving Lao government approval, The Xe Pian-Xe Namnoy (XPXN) dam financial support from Korean over- collapse highlights the major discon- seas development assistance (ODA), nect between policy and practice in the and financing from the Thai banks, hydropower sector in Laos. XPXN is not with devastating consequences for the only dam to have collapsed or bro- communities in Laos and Cambodia. ken recently in Laos, with at least two other dam breaks in Laos since 2017,67 Given the lack of enforcement of en- causing significant damage. vironmental and social safeguards in Laos, Thai banks should not rely sole- Despite the Lao government adopting ly on ‘legal compliance’, but conduct various laws, regulations and guidelines their own due diligence and monitor- for hydropower sector and projects, ing to ensure that their lending does which include provisions on environ- not cause or contribute to violations of mental and social impacts, consultation rights and damage the environment. with affected communities, transpar- ency and disclosure, among others, institutional capacity, enforcement and monitoring remains weak.

Fair Finance Thailand 21 Figure 5: Villagers stranded after XPXN collapse. Source: https://ichef.bbci.co.uk/news/834/cpsprodpb/FF43/production/_102674356_5a524acc-84ea-42c3-9b4b-a4a01a8f0a37.jpg

68. Praiwan, Y. (2018, October 4). Ratch which in turn may impact on the Pushes Back Start Date of Laos Dam. Implications of dam Bangkok Post. Available at: https:// collapse: Delays and company’s capacity to repay the loans. www.bangkokpost.com/business/1551​ According a media report, “the costs 706/ratch-pushes-back-start-date-of- liabilities laos-dam incurred as a result of the collapse The extent of the fall-out from the are primarily the responsibility of the 69. Kaohoon International (2019, February 20). Ratch Records 7% Lower of Profit dam collapse for the project devel- contractor in charge of engineering, in 2018, Insurance to Support Dam opers and Thai banks financing the procurement and construction” — that Collapse in Laos. Kaohoon International. Available at: https://www.kaohoon. project remains to be seen. This is in is, SK Engineering and Construction.69 com/​content/279183 part because key project agreements 70. Inclusive Development International are not disclosed. The dam collapse While complaints have already been and International Rivers (2019). Reck- has delayed the start date of the pro- filed through non-judicial mecha- less Endangerment: Assessing the Re- sponsibility for the Xe Pian-Xe Namnoy ject from early 2019 to late 2019.65 The nisms, developers and financiers of Dam Collapse, p. 29. developers have not publicly disclosed the dam may also be subject to law- what, if any, financial penalties they suits for damages caused by the dam must pay for their failure to meet the collapse and liable for remediation. commissioning date identified in the The Thai banks that financed the Power Purchase Agreement (PPA). Nor dam have a responsibility to provide have they publicly disclosed additional for or cooperate in remediation for costs required to rebuild and repair the adverse human rights impacts the infrastructure damaged due to the they contributed to.70 Given the extent dam collapse, let alone funds to com- of damages and number of people pensate affected peoples. impacted, liabilities could be in the millions of dollars, which in turn has The cost overruns and delays in op- financial implications for the develop- eration will disrupt revenue stream, ers and fanciers.

22 Challenges of Dam Financing for Thai Banks Thai Banks and XPXN: Responsible however, is the implication that the Thai banks are and Sustainable? not responsible for the disaster.

Comments by senior leadership of Thai Banks (see Comments that the dam collapse should not impact Box 4) on the XPXN dam collapse are inconsistent. on financing of hydropower is more worrying. This The Managing Director of Thai EXIM is pointing to implies that, despite new individual bank and sec- inadequate dam structure as cause of the collapse, tor-wide polices and guidelines, there may be little while SCB representative states it was an “unexpect- changes to how Thai banks incorporate environ- ed natural disaster”. Common to both comments, mental and social risks into their lending decisions.

Box 4: Thai Banks comments on XPXN dam collapse

“When engaging in financing hydropower projects, banks always take the risks of the project into consid- eration before lending out. However, the dam collapse in Laos occurred due to inadequate dam structure which is the responsible of contractors. Therefore, Laos must be the one who investigate the incident and propose appropriate solutions to the problem. Furthermore, for the future projects, banks will still contin- ue finance the hydropower projects in Laos and leave the complication of constructions to other stakeholders.

— Mr. Pisit Serewiwattana, the Managing Director of Exim Bank

“The dam collapse does not significantly affect the dam financing in Laos because it happened due to- un expected natural disaster. Moreover, before providing loan, banks have already considered the ability and condition of the project company based on international legal standard, strictly and comprehensively”

— Mr. Wasin Saiyawan, a Senior Executive Vice President serving as Head of Corporate Banking of SCB

Fair Finance Thailand 23 Conclusion: Towards More Sustainable and Responsible Lending

71. Santhiprabhob, V. (2019). Opening “When financial institutions focus mainly on short-term gains, Remarks, Bangkok Sustainable Bank- neglecting the potential long-term effects or negative spillover ing Forum 2019. of their activities, this can in fact increase financial institu- 72. For an analysis of how financial insti- tions’ risks: risks that can impair credibility, public trust and tutions involved in hydropower in Laos avoid and manage risks, includ- financial positions in the long-run” ing by transferring risks to others, see Trandem, A. (2019). Offloading Risks & Avoiding Liabilities: How Financial — Veerathai Santhiprahbhob, Institutions Consider Hydropower Risks Governor of Bank of Thailand, 13 August 201971 in Laos.

73. The Thai Bankers’ Association (2019, August 13). Sustainable Banking Guide- lines: Responsible Lending by The Thai The Governor of Bank of Thailand’s environment and society by linking Bankers’ Association, p. 1. quote above implies that to better cost of and access to capital to sus- manage risks, banks need to think tainability performance,”73 the banks beyond short-terms gains and more must change how they assess and meaningfully consider — and avoid — address ESG risks of the projects they negative impacts of their activities. finance. Currently, Thai banks priori­ However, as the experience of — and tise financial returns for themselves Thai banks’ public comments on — and their clients while offloading the Xayaburi and Xe Pian-Xe Namnoy environmental and social risks onto dams illustrate this has not been the communities and the environment. case. Instead, through various instru- There is a major gap between the Thai ments and measures, the banks have banks’ policies and commitments to protected their financial interests by positive environmental and social transferring the risks to other actors, outcomes and what happens on the with affected communities and Lao ground directly as a result of the pro- country as a whole bearing the brunt ject they finance. of the negative social and environ- mental consequences of the projects While TBA Sustainable Banking Guide- they have financed.72 lines are a step in the right direction, much more can and should be done If Thai banks are genuinely committed to strengthen and operationalise com- to being responsible actors that “can mitments to integrating environmental incentivise clients to mitigate negative and social risks in bank’s decision-​ and increase positive impacts to the making processes and operations.

24 Challenges of Dam Financing for Thai Banks Recommendations to Thai Banks Financing large-scale hydropower has always been risks of human rights violations, future ecosystem a risky long-term activity for Thai banks. As the collapse, and climate change impact on hydropower examples of Xayaburi and XPXN in this case study construction and operation need to be assessed and has shown, both projects have been fraught with ex- managed with new mindset, principles and tools. To tensive social and environmental risks that are not that end, we have the following recommendations adequately captured in legal compliance, which is for Thai banks that would help ensure that future the customary lens through which Thai banks have hydropower financing can cope with both existing been using to make financing decisions. It is no and emerging risks, as well as conducted in line longer sufficient to simply demand that borrowers with TBA Sustainable Banking Guidelines. comply with all relevant laws and regulations; the

Leadership and responsible lending Internal implementation mechanisms commitment ◆ Mandate clients to conduct human rights due ◆ Develop and issue a human rights policy, which diligence as a condition to hydropower financing clearly articulates banks’ recognition to respect human rights, in line with the United Nations ◆ Significantly increase resourcing and investment Guiding Principles on Human Rights (UNGP) and in ESG risks, including staff capacity and expertise timebound commitments to ensure implemen- tation ◆ Include clear environmental, social and human rights obligations as covenants and drawdown ◆ Develop and issue sector lending policies, includ- conditions in loan agreements ing for hydropower, in line with international standards Transparency

◆ Strengthen the sustainable banking guidelines ◆ Regularly and timely disclose project finance issued by the Thai Bankers Association loans, including projects in the pipeline

Responsibility as per UN Guiding ◆ Allow opportunities for stakeholder input on Principles on Business and current and future project financing decisions Human Rights ◆ Provide timely and meaningful responses to ◆ Ensure that clients conduct meaningful stake- stakeholders who request information about holder participation and engagement prior to banks’ involvement in projects finalising lending to high risk projects

◆ Establish direct grievance mechanism between the bank and potentially affected communities, and help strengthen existing judicial and non-​ judicial grievance mechanisms

Fair Finance Thailand 25 Annex 1 UNEP FI Human Rights Guidance Tool for Select Guidance for the Financial Sector Banks and Financial https://www.unepfi.org/humanrightstoolkit/ Sector to Strengthen OECD (2017). Responsible Business Conduct for Institutional Investors: Key Considerations for Due Human Rights Due Diligence under the OECD Guidelines for Multinational Diligence and Avoid Enterprises https://mneguidelines.oecd.org/RBC-for- Adverse Impacts Institutional-Investors.pdf There is a growing number of resources specifically for banks and the finance sector that provide guid- BHRRC et al (2017). Renewable Energy Investor Briefing: ance on how they can operationalise improvements Managing Risks & Responsibilities for Impacts on Local in their process and practices to avoid and address Communities adverse impacts of their operations, including through their lending. Below is a select list, some of https://www.business-humanrights.org/sites/ which also include checklist and key questions that default/files/Investor%20briefing%20-%20 banks can use at different stages to strengthen their Renewable%20energy%20-%20Apr%202017.pdf due diligence before and after lending decisions have been made. BankTrack and Oxfam (2018). Developing Effective Grievance Mechanisms in the Banking Sector

https://www.banktrack.org/download/developing_ effective_grievance_mechanisms_in_the_banking_ sector/2018_pa_002_bank_report_faweb2_3.pdf

Equator Principles

https://equator-principles.com/

26 Challenges of Dam Financing for Thai Banks About Fair Finance Thailand

Founded in 2018, members of Fair Finance Thailand coalition (FFT, website www.fairfinancethai​ land.org) include one research company and four CSOs — Sal Forest Co., Ltd., Foundation for Consumers, ENLAW Foundation, International Rivers and Ecological Alert and Recovery - Thailand (EARTH). FFT members have been monitoring impacts and sustainability challenges of Thai financial institutions, and aim to advocate genuine adoption of the concept and best practices of sustainable banking. FFT utilizes Fair Finance Guide International (www.fairfinanceguide.org) methodology in its annual assessment of disclosed policies of largest Thai financial institutions, starting in 2019.

Project Coordinator: Julnarong Wannakowit Phone 091-884-3988 Email [email protected]