Mekong Watch CATFISH TALES
15 July 2002 Issue #4
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CONTENTS
1. PROJECT UPDATE: STUDY FOR THAI-LAOS WATER DIVERSION PROJECT STOPPED
A study for extensive regional development (Thailand & Laos) which
included a controversial cross-border water diversion plan was
stopped. Sanyu Consultants Inc approached JBIC to fund a this
study. Thanks to swift intervention by peoples' organizations at this
early stage, JBIC decided not to support it.
2. PROJECT UPDATE: STUDY FOR TA TRACH RESERVOIR PROJECT (VIETNAM)
The Vietnamese government made an official request to JBIC to fund the Ta
Trach Reservoir project in 1999. JBIC found the feasibility studies
insufficient, and is providing funding for consultants to do supplementary
studies. The supplementary study is to look at environmental and social
factors as well as alternatives to the dam plan. It is also to determine
if the project will satisfy JBIC's new environmental guidelines.
3. PROJECT UPDATE: MAP TA PHUT POWER PLANT (THAILAND) -- MITSUBISHI TO
ASK FOR LOAN FROM JBIC
Mitsubishi Heavy Industries and Mitsubishi Corporation have signed a 100
billion yen contract with BLDP (Thailand) for a coal-fired power plant in
Rayong, Thailand. The companies plant to ask JBIC for a loan for this
project. This news comes not long after Thailand cancelled similar
coal-fired power plant projects in Bor Nok and Hin Krut.
4. JAPANESE ODA POLICY NEWS: JBIC CONSULTATION ON COMPLIANCE MECHANISM
Second public consultation on compliance mechanism for JBIC's
environmental guidelines. Corporate sector attends in full force,
insisting such a mechanism is unnecessary.
5. JAPANESE ODA POLICY NEWS: JICA & JBIC TO MEET REGULARLY WITH NGOs AS
PART OF ODA REFORM
As part of a 15-point ODA reform plan announced by the Ministry of Foreign
Affairs, regular meetings are to begin soon between NGOs and Japanese
embassies and local offices of JBIC and JICA in developing countries.
6. NEW MEKONG WATCH E-MAIL/WEBSITE
7. TO SUBSCRIBE AND UNSUBSCRIBE
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1. Project Update: STUDY FOR THAI-LAOS WATER DIVERSION PROJECT STOPPED
Good news!
A study for an extensive regional development scheme which included a
destructive cross-border water diversion plan was stopped. Thai
communities effectively communicated their concerns about the study to JBIC
after they received information from Mekong Watch that the study was being
considered. We are happy to announce that people-to-people cooperation has
led to this positive outcome!
BACKGROUND AND DESCRIPTION OF STUDY
Sanyu Consultants approached JBIC (Japan Bank for International
Cooperation) for funds to carry out this study. Part of the study involved
a feasibility study for building 2 dams on the Xe Bang Hiang River, and the
two resulting reservoirs would supply the water to be diverted. The water
would be sent through a tunnel drilled under the Mekong River to irrigate
Tung Kula Rong Hai (northeast Thailand). While the proposed study for the
regional development plan was recently designed, the water diversion plan
that appears within the study was actually designed in 1998 and has been
the target of constant concern by local communities.
JBIC has begun a new program which allows companies, NGOs, municipal
governments and other organizations to apply for grants to conduct what
JBIC calls "Pilot Studies" for development projects. Until recently,
funding for development projects was given only at the request of recipient
governments. In September of last year, JBIC announced that it would
accept proposals from private firms, NGOs, prefectural and municipal
governments, and other institutions for pilot studies for development
projects.
In response to this announcement, Sanyu Consultants submitted its proposal
which included the water diversion plan.
EFFORTS BY PEOPLE'S ORGANIZATIONS
After learning about this proposal, 17 grassroots and environmental
organizations in Thailand sent a petition to JBIC demanding that this study
be stopped. JBIC made a trip to Thailand at the end of May and held
meetings with local communities facilitated by the Southeast Asia Rivers
Network (SEARIN-Thailand). At these meetings, local people impressed upon
JBIC their reasons for opposing the water diversion plan. In June, JBIC
contacted Sanyu Consultants and the irrigation departments of both Thailand
and Laos that it would not support the study.
REASON JBIC DECIDED NOT TO SUPPORT STUDY
A JBIC official explained to Mekong Watch that although the proposal was
for a broader study and not specifically for this water diversion project,
JBIC realized that already existing concerns regarding the water diversion
plan was enough to create "confusion" among local communities if the study
were implemented. This is the reason given for JBIC's decision not to
support the study.
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2. Project Update: STUDY FOR TA TRACH RESERVOIR PROJECT (VIETNAM)
JBIC is providing funding for a study for the Ta Trach Reservoir Project in
Vietnam. In 1999, the Vietnamese Government made a formal request to the
Government of Japan for a loan to implement the Ta Trach Reservoir
Project. The loan has not yet been approved partly because the
environmental impact assessment was insufficient. JBIC agreed, however, to
providing a grant for consultants to conduct an additional study to
supplement information from the previous studies.
DESCRIPTION OF THE TA TRACH RESERVOIR PROJECT
The Ta Trach Reservoir Project includes a dam of 50-56 meters
high. Purposes listed for the dam are flood control, irrigation, power
generation, and domestic and industrial water supply. It is located in the
Huong River Basin, Thua Thein Hue Province, Vietnam. The Implementing
organization is Vietnam's Ministry of Agriculture and Regional Development
(MARD). The region's frequent floods are the main reason given to explain
the need for this project.
According to a study by the Vietnamese government in 2000, approximately
4,000 people will need to be resettled. The project site is located on a
fault line, so there is concern of an earthquake hazard. Other concerns
include submergence of cultivated land, disruption of fish migration,
discontinuance of waterway transport, increase in water-born diseases,
impacts on endangered plant and animal species, and impacts on the Bach Ma
National Park.
JBIC's INVOLVEMENT IN THE PROJECT -- SAPROF STUDY
In order to supplement the environmental impact assessment done by the
Vietnamese government for the Ta Trach Reservoir Project, JBIC is providing
a grant to a team under its SAPROF program (Special Assistance for Project
Formation) to conduct a study. The SAPROF team will look into more details
regarding the geology of the dam site, impacts on natural and social
environments, and alternatives to the dam project.
While funding for the study does not guarantee that the dam will be built,
such studies are usually done assuming that the project will eventually be
implemented. It is necessary to monitor the study to ensure that it is not
simply to provide information validating the implementation of the Ta Trach
reservoir project, but that it includes public participation in determining
the region's needs and multiple options to meet those needs.
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3. Project Update: MAP TA PHUT POWER PLANT (THAILAND) -- MITSUBISHI TO
ASK FOR LOAN FROM JBIC
According to an article in Nikkei Shinbun (27 June 2002), Mitsubishi Heavy
Industries and Mitsubishi Corporation signed a joint contract with BLCP
Power Ltd worth 100 billion yen (approx 820 million US dollars) for the Map
Ta Phut coal-fire power plant in Thailand. The article also reported that
the two companies determined the project to be low risk, and will request a
loan from the Japan Bank for International Cooperation (JBIC).
According to information from Mitsubishi Heavy Industry's website, the
contract is expected to come into effect in July 2003 after necessary
financial arrangements have been made.
DESCRIPTION OF PROJECT
The Map Ta Phut project is located in Rayong, Thailand. It will be a 1,400
MW "non-polluting coal-fired power plant" using low sulfur bituminous coal
from Australia. It will have two generators. The first 700 MW generator
is expected to begin operation in 2006, and the second in 2007. The total
project is to require 1.3 billion dollars.
It is being implemented by BLCP Ltd, a joint venture among Thai-based Banpu
and Hong Kong-based China Light Power. The originally contract between
BLCP and Mitsubishi Heavy Industries was agreed upon in 1998, and operation
had been scheduled to begin in 2002. But due to the economic crisis and
decline in the demand for electricity, the project had been stopped.
CONCERNS
The Map Ta Phut industrial estate is reportedly already suffering from
severe air pollution, and residents are concerned about the effects of an
additional polluting power plant. According to an article in the Bangkok
Post (7 April 2002), while resistance to the project among residents has
not been strong, it is increasing. The article reports that a school was
to be relocated because students were falling ill from the pollution in the
industrial estate. The Director-General of the Pollution Control
Department was also quoted as saying that while pollution levels had not
exceeded acceptable standards, other problems such as chemical accidents
and industrial waste needed to be considered before deciding if the area
can handle another industrial facility like a coal-fired power plant.
Details of Mitsubishi Heavy Industry's request to JBIC in regard to this
project is not yet clear. JBIC should exercise due caution regarding the
request, especially considering the concerns being raised by residents of
Map Ta Phut and the recent Thai government decision on the Bor Nok and Hin
Krut power plants. Residents of Bor Nok and Hin Krut were able to organize
and oppose the construction of the power plants, making their concerns
known to the Thai government, the companies involved, as well as to
JBIC. After consideration of people's concerns, the Thai government
decided to postpone, if not cancel, the projects. JBIC should learn from
the Bor Nok/Hin Krut experience and fully incorporate the concerns of local
people in their decision on a loan for the Map Ta Phut project.
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4. Japanese ODA Policy News: JBIC CONSULTATION ON COMPLIANCE MECHANISM
JBIC held its second public consultation for a compliance mechanism for its
new environmental guidelines on 28 June 2002 (for information on the first
consultation, see Catfish Tales Issue #2). JBIC decided that the first 3
meetings would be "study sessions," after which consultation on the actual
content and structure of the compliance mechanism would be discussed.
The first such study session was about compliance mechanisms of
international financial institutions such as the World Bank and Asian
Development Bank. NGOs have expressed dissatisfaction with the study
sessions, since the time for the study sessions is being taken out of the
time available for negotiation about the compliance mechanism itself.
As at the first consultation, the corporate sector's participation was very
negative. Representatives of corporate organizations such as the Japan
Consulting Institute and the Japan Business Federation remarked that
bilateral financial institutions in other countries do not have compliance
mechanisms and therefore questioned the need for JBIC to have one. Some
called for a discussion on whether or not a compliance mechanism is
actually necessary and demanded concrete examples of cases where JBIC's
current handling of problems was insufficient.
The remarks from the corporate sector show that they are unwilling to
recognize the many concrete examples such as the Samut Prakarn Wastewater
Management Plant(Thailand), San Roque Dam (Philippines), and Sondu-Miriu
(Kenya) projects. They also do not seem to realize that by being so
resistant to a compliance mechanism, they are only emphasizing the need for
such a mechanism. If they were confident that their current business
practices were not in violation of the guidelines, they would not have to
resist so strongly.
The next public consultation (and the second study session) will be held on
July 23rd, this time to discuss the compliance mechanisms and complaints
procedures of ECAs. Someone from the corporate sector will also give a
presentation on how companies have dealt with conflicts arising during
project operation.
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5. Japanese ODA Policy News: JAPANESE EMBASSIES, JICA & JBIC TO MEET
REGULARLY WITH NGOs AS PART OF ODA REFORM
On 9 July 2002, Foreign Minister Kawaguchi announced a 15 point reform plan
for Japanese ODA. These points for reform were a result of two reports,
the final report of the Second Consultative Committee on ODA Reform and the
Interim report for an external committee to recommend reform to the Foreign
Ministry.
Relevant to NGOs working in developing countries is point 9. This point
says, "In the developing countries where many Japanese NGOs are carrying
out activities, regular meetings will soon be established among Japanese
embassies, local offices of JICA and JBIC, and NGOs."
As the wording is somewhat ambiguous, it is not clear if these meetings are
to be with only Japanese NGOs or with a broader range of groups. It could,
however, be a potential forum for local NGOs to raise concerns about ODA
projects to the Japanese government and project implementing agencies.
Overall, the 15-Point Reform addresses issues of inspection and evaluation
of ODA operations, cooperation with NGOs, capacity building, and
disclosure/dissemination of information. While reform is welcome, it is
unfortunate that the reform does not call for a fundamental re-evaluation
of the use of ODA as a tool for diplomacy, or the process of project
implementation which has largely thus far excluded local communities from
decision-making processes. We hope that the upcoming inspections and
evaluations of ODA operations will enlighten the Ministry on these points.
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6. NEW MEKONG WATCH E-MAIL/WEBSITE
Mekong Watch has acquired its own domain name. Now, staff in Tokyo can be
reached at <info@mekongwatch.org>.
Our new website address is http://www.mekongwatch.org/
The English website is still being developed. While there are a few basic
pages available, the site will be completely renewed in the next few months
in order to provide more detailed information in English. Please check
again in September!
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