Nam Theun 2 Trip Report and Project Update - BankTrack

International Rivers NetworkThe World Bank’s and the ADB’s “model” hydropowerproject is dangerously close to becoming a replica ofpast dam mistakes. Despite the stacks of NT2 studiesand the multitude of assurances, the gaps in planning,budget and political will surrounding NT2 are now evident.Prior to project approval, NGOs warned that theagricultural plans for the Nakai Plateau were inappropriate,the downstream program plans were inadequate,and the community forestry component was unrealistic.Regrettably, it seems these warnings have come true.In belated recognition of the plans’ shortcomings, someare being re-drafted midstream, while others—such asirrigation for downstream channel villagers—appear tohave been abandoned, as time runs short before reservoirfilling and power generation begin. NTPC’s Socialand Environmental Division seems to be understaffed,overworked, and unequipped with the resources andhigh-level buy-in necessary to address NT2’s massiveimpacts on affected villagers.Two years before power production begins, there havealready been numerous violations of NT2’s legal framework,including the Concession Agreement and WorldBank and ADB policies. The failure of NTPC, theGoL, the World Bank, the ADB, and other projectbackers to take action on these issues calls into questionthe accountability of all parties and the enforceabilityof these agreements.Urgent action is required if the GoL, NTPC, and theinternational financial institutions are to meet theircommitments to more than 100,000 affected Laotians,and to their shareholders.Summary of Major ConcernsLivelihood restoration programs are in jeopardy in allproject-affected areas. In their latest report, the Panelof Experts states that income targets for resettlers onthe Nakai Plateau are unlikely to be met. Livelihoodrestoration programs for Project Lands’ and Xe BangFai villagers have yet to effectively begin and face significanttime and budget constraints.Both the GoL and NTPC are backtracking on commitmentsthey made at project approval. The violationsinclude failing to provide irrigation for downstreamchannel villagers, ensuring biomass clearance ofthe reservoir, guaranteeing Nakai villagers’ rights totheir forest resources, and protecting the Nakai-NamTheun National Protected Area from logging andmining. 1Neither the GoL nor NTPC has committed to clearbiomass from the reservoir area before it is flooded,despite the Environmental Assessment andManagement Plan assertion that “Vegetation will beremoved before flooding the reservoir...” 2 Time is runningout, with only one dry season left to take action.Leaving biomass to decompose in the reservoir willlikely lead to fish kills in both the reservoir area anddownstream, and result in water that is unsuitable fordomestic use and irrigation in the downstream channeland along the Xe Bang Fai. Biomass clearance hasmajor implications for the success of mitigation andlivelihood restoration programs in all project-affectedareas.NTPC has failed to disclose resettlement plans inviolation of World Bank and Asian DevelopmentBank policies, as well as other key social and environmentaldocuments, such as wildlife surveys and managementplans. IRN has repeatedly requested thesedocuments from NTPC, the World Bank and theADB.3