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Minorities and Development: Nam Theun 2 Hydroelectric Project in Laos

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The Nam Theun River in central Laos is the site of the largest development project in the country. Promising to pour millions of dollars into the Laos economy, what will the tradeoffs be for minorities in the area?
FORUM-ASIA’s Ethnic Minorities in South East Asia programme (EM-SEAP) attended the Panel of Experts Briefing on Nam Theun 2 (NT2) Hydroelectric Project on 22 August 2007. Hosted by the World Bank (WB), the briefing took place in Vientiane, Laos and was attended by FORUM-ASIA in Bangkok by videoconference. The Environment and Social Panel of Experts (POE), an international body appointed by the government of Laos, presented findings of their most recent study on the NT2 project.

The NT2 is a massive hydroelectric project funded by the WB and the Asian Development Bank (ADB). Once completed and running at full capacity, NT2 is expected to generate over US$100 million per year for the government of Laos (95% of the power generated will be sold to Thailand). The revenue is expected to be directed toward poverty reduction and environmental preservation efforts.

The NT2 is located in one of the most biodiverse regions in Asia, and as such, environmental concerns were the primary source of questions by those attending the meeting. The area is also home to a number of ethnic minorities who face relocation due to the dam, which is the primary concern of the EM-SEAP for following the developments of the NT2 project.

The EM-SEAP questioned the POE on the status of minority groups in the areas affected by the NT2 project. The WB has stipulated that people are not to be relocated to areas where they are averse to living. The POE stated that one group did not want to be relocated, and as such they were only moved further up the hillside. They will remain there through the rainy season and will still have the option of relocation if they feel the current site is inadequate. In another positive development, the government has agreed not to force inhabitants of the newly-protected surrounding watersheds to relocate.

The POE are supportive of the NT2 project but highlighted some major issues that have yet to be resolved.  The relocated households still lack access to many of the livelihood opportunities stipulated in the relocation requirements. NT2 has significantly transformed certain areas of water flow, leaving regions once covered with water as dry land – the use of this land has yet to be determined. The fish stock has been drastically depleted and is to be utilised only by those who have been resettled – it is unclear who else was dependent on this food source.  The POE emphasized that these are systemic issues, and long term commitment and significant resources are required to address them effectively.

The future still remains uncertain for those affected by the dam. It will take time to fully understand the impacts of the relocation processes.  There is also the possibly of a great influx of tourism to the area. The POE has recommended the government of Laos to apply for World Heritage Status for the sensitive environmental area around the dam. World Heritage Status would attract even more international attention to the area and encourage tourism in the region, exposing the affected environment and its inhabitants to both risk and opportunity. Only time will tell of the government of Laos can effectively mitigate these risks and capitalize on its opportunities without doing so at the expense of the environment and local populations.

If the NT2 is to contribute to Laos’ attainment of the Millennium Development Goals (MDGs) and elevate the nation from one of the world’s “least developed countries”, due consideration must be paid to human development in all aspects of this project. The EM-SEAP will continue to monitor the developments of the NT2 project and its progress regenerating the livelihoods of the people affected by the dam.