How to foster regional friendship by saying no

These two realities, one potential, one actual, are incompatible. Just how incompatible will be exposed today and tomorrow when the Mekong River Commission’s 19th Council and 17th Donor Consultative Group meetings take place in the sleepy, former royal Lao capital of Luang Prabang.

The meetings have the makings of a perfect storm, fuelled by Thailand’s insatiable appetite for energy, at any cost.

At the centre of the storm is the Bt106 billion (US$3.5 billion) Xayaburi hydroelectric power project, regarded by many of its critics as the most potentially damaging dam currently under development anywhere in the world.

The government of Laos finds itself trapped between a rock and a hard place. One of the poorest countries in the world, but immensely rich in water resources, with some 80 potential hydroelectric dam projects indentified, Laos dreams of becoming the “battery of Asia”, utilising funds from the sale of hydroelectric power, primarily to Thailand, to accelerate national development.

But with Vientiane’s unilateral decision on November 7 last year to give Ch Karnchang, the Xayaburi concession holder and Thailand’s second largest construction company, permission to officially start construction of what will be the first mainstream dam on the lower Mekong River, Laos has put at risk so many other national interests. It calls into question the validity and transparency of the whole Xayaburi decision-making process.

Before condemning Laos, we should keep in mind that this skewed cost-benefit analysis has been enabled and powered by Thailand: enabled by Thailand's long-term contract to buy the Xayaburi dam’s electricity and powered by our large commercial banks’ eagerness to lend the huge amount of money needed for the dam’s construction.

This is Thailand continuing its unstated but real policy of exploiting our poorer neighbours’ natural and human resources. This is not the policy we should be pursuing if we wish to achieve secure, friendly, mutually beneficial relations with our neighbours, our only common-sense goal.

The ramifications of Thailand’s willingness to exploit our poorer neighbours are quite startling if one looks at the national interests Laos has been encouraged to put at risk.

As the first mainstream dam on the lower Mekong, the 1,260-megawatt Xyaburi project was the first dam to trigger the Mekong River Commission’s (MRC) prior consultation process, mandated by the 1995 Mekong Agreement, which established the four-country inter-governmental agency to coordinate sustainable development of the lower Mekong Basin. The prior consultation process is a requirement for Cambodia, Laos, Thailand and Vietnam to jointly review any development project proposed for the mainstream, with the aim to reach a consensus on whether or not it should proceed, and if so, under what conditions.

By officially sanctioning the start of the dam construction without a consensus, Laos has undermined the MRC’s credibility and put at risk its relations with Cambodia and Vietnam, both of whom are fiercely but quietly opposed to the Xayaburi project.

Fearful of the mostly unknown but probably very significant negative impacts of the project on its people and the river, especially the delta, Vietnam stated its position very clearly. In its April 15, 2011 reply to the MRC’s Prior Consultation process, Vietnam strongly requested “that the decision on the Xayaburi Hydropower Project as well as all other planned hydropower projects on the Mekong mainstream be deferred for at least 10 years”, to allow for more comprehensive and detailed studies.

A similar but softer position was taken collectively in 2011 by ministers representing all four MRC countries when they agreed to delay building the Xayaburi dam pending further studies on its environmental impact. Of most concern was the potential impact of the dam on the livelihoods of the 60 million Cambodian, Lao, Thai and Vietnamese villagers who live in the lower Mekong Basin, 80 per cent of whom depend on the river for their livelihoods.

In the meantime, however, to short-circuit the MRC process, Laos and the dam developer, Ch Karnchang, hired the Finnish firm Poyry to prepare a report with the goal of demonstrating that the Xayaburi project was in compliance with Laos’ obligations to fellow members of the MRC and that the project could proceed without the MRC’s further approval. This goal the report duly delivered, even while identifying 40 more environmental and cross-border impact studies that should be undertaken, while construction was in progress.

This fixing-it-as-you-go approach was sensibly rejected by the MRC’s own expert review of the report, which noted that “it is strongly recommended to undertake baseline investigations before construction”.

So, is this the price of progress?

The lower Mekong River, the world’s greatest inland fishery, is under severe threat, along with the livelihood of 60 million of our brothers and sisters, as the first of 11 proposed mainstream dams starts construction.

The credibility of the MRC, the one institution tasked with the sustainable management of this great river’s resources, is in tatters. The MRC’s development partners, the donors who have contributed some Bt9,000 million ($300 million) since 1995, are deeply concerned that all their money has been wasted. The international reputation of the Thai banks who have agreed to finance the dam is also at risk, quite apart from the project's financial viability.

The domestic, regional and international tensions generated by the opposition to the Xayaburi dam come at an inopportune time for Laos, which in recent years has been taking steps to liberalise its authoritarian rule.

But Vientiane is not used to handling dissent or the type of international scrutiny it is coming under following last month’s forced disappearance of Sombath Somphone, the Magsaysay Award-winning Lao community development activist, which critics suggest might be related to Sombath’s position to the Xayaburi project.

So can the Xayaburi dam be stopped? Yes, but only if we allow common sense and good neighbourliness to prevail and offer the Lao government some face-saving alternatives. The great irony of this human and environmental catastrophe in the making is that the Xayaburi dam is completely unnecessary. Laos can have its revenues for national development and Thailand can have its power, not from the Xayaburi project, but by careful development of some of the more sustainable hydropower sources on tributaries of the Mekong.

I therefore urge Prime Minister Yingluck to immediately suspend the power purchase agreement for the Xayaburi dam and to enter into negotiations with Laos, offering increased development assistance and a commitment to jointly accelerate system-wide assessments of selected tributary hydropower projects for the mutual benefit not only of our two peoples, but also for the people of Cambodia and Vietnam.

Such actions by Thailand would signal a new beginning for our relations with our neighbours, one based upon mutual respect, not exploitation, and confirm our prime minster’s potential for regional leadership in her own right; while the applause such an announcement would receive in Luang Prabang would surely silence the Xayaburi construction site, just 150 kilometres downstream.

 

Kraisak Choonhavan is a former chairman of the Senate’s committee on foreign affairs.