Environmental Criteria for Hydropower in the Mekong Region - WWF

The Current Status of Environmental Criteria for Hydropower Development in the Mekong Region: A litterature compilation
Improvements in the capacity to integrate environment standards in power planning
systems at the national level are thus important, such as ongoing efforts to strengthen
project EIA processes. At the same time, harmonization of environmental criteria in
the GMS will be crucial to maintaining a level playing field for private investment.
A further critique is that market orientation will reinforce the trend to separate the
operation phase environmental mitigation and management costs (including
sustainable catchment management and downstream ecosystem services management,
etc.) from the project operating budgets, and instead, pass these responsibilities on to
local governments and decentralized agencies to cover with their normal operating
budgets. In the GMS context, the local governments and agencies almost universally
have limited technical capacity and financial resources for this role. Thus the
argument for establishing mechanisms to internalize environmental and social costs in
the rules reforming power markets is doubly reinforced (i.e. to move toward
environmentally sustainable hydropower development using market mechanisms,
where a sufficient portion of gross revenue from generation or resource utilization
fees is targeted, or “ring fenced” for long-term environmental and social management
commitments as identified in project EMPs and basin level SEAs).
Relevance of parallel reforms in other sectors - The recent passage of electricity
laws in each GMS country (post-1995) typically requires that all hydropower projects
must be developed in an environmentally friendly manner to minimize ecosystem
impacts. For instance, the Electricity Law (1997) of Lao PDR (Article 6) provides
that, “…operation of electricity production shall … ensure economic enterprises do
not damage the environment, ecological system, living conditions, and natural habitat
of wildlife.” Power sector laws generally do not go further; rather they stipulate that
individual projects must comply with existing environment legislation and
regulations.
Progress in environment capacity building and the quality of environment
management tools used in the power sector (like SEAs, EIAs, EMPs), which
generally fall within the purview of environment agencies, is therefore critical. How
the environment laws are interpreted on the ground, of course, is ultimately connected
with how environment, economic and social dimensions are balanced in power sector
planning. Clearly consensus building is needed to avoid distortions or imbalances
where one ministry has a stronger political base, especially if there is limited
participation outside government. This is typically the case in the GMS where the
environment ministries, who have to argue the environment side of the sustainability
triangle (economic, environment and social) are often junior to industry ministries
responsible for national power policies and industrialization strategies.
The emergence of a basin approach to water resource planning in national legislation
is perhaps the most significant new policy direction relevant to framing environment
criteria for hydropower development (as discussed above). To the extent that IRBM
becomes accepted as the framework to balance all water use interests, hydropower
and the environment included, basin-level decision processes would become the
major arena for decisions on the development and management of hydropower assets.
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