The renewal of private dams in the world

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At the end of the 20th century, the number of dams being built was considerably lower. However over the past few years, the number of dams being built has once again began to rise. How come?

Over 7000 large dams were built every year in the 1970s but by 1990 this figure had gone down to 3000. The World Bank even withdrew from the sector in 1993 after receiving harsh criticism. It was around this time that we became aware of the social and environmental impacts (amongst others) of dams, not to mention the risks of dam failure. Those living in the impoundment areas are evicted and they must be compensated fairly. There are also many consequences for ecosystems and major impacts on migratory fish.

But today, the trend is reversing. Indeed, increased awareness led to the creation of the World Commission on Dams which includes NGOs. In 2000, it established guidelines which made it possible to minimise the risks. These guidelines were taken up by the World Bank which then came back to the sector and brought the big backers along with it. The global energy crisis reinforced interest in dams – hydraulic energy is both competitive and renewable. Dams help fight climate change because in most cases, they make it possible to avoid greenhouse gas emissions. Moreover, dams with large reservoirs can be seen as an adaptation to climate change as they limit the effects of extreme climate phenomena (floods or draughts). This, of course depends on the dams themselves being adapted to climate change: they should be big enough to withstand serious floods.

Is the situation the same all over the world?

There is great geographical heterogeneity: out of the around 45000 large dams throughout the world, over 22 000 were built in China! Conversely, only 4 % of the planet’s dams are in Africa. This shows the extent to which this continent’s hydraulic potential is being severely underused. And yet, many sites are available. To give just one example, the site which has the strongest potential in the world is on the Congo River in the Inga in the Democratic Republic of the Congo: one could install a capacity of around 40 GW, which is twice the capacity of the Three Gorges dam in China!

How can the risks linked to dams be reduced ?

Well, firstly, the recommendations of the World Commission on Dams and the World Bank have to be implemented. There are numerous recommendations, but the following three are the most important. Consultations must be set up with the local populations, a social and environmental management plan must be established and external expertise must be brought in to controls/checks its implementation.

For the constructions, the AFD now favours so-called on-stream dams: these are dams without, or almost without, impoundments. The constructions are usually smaller and their socio-environmental impact is much lower.

We also generally encourage small hydroelectric installations (installations of less than 100 MW) as producing electricity locally requires fewer electrical lines and encourages local development. We often prefer three 100 MW installations to a single 300 MW one.

Does everyone use the same methods?

Today, dams funded by the World Bank or bilateral institutions (development agencies or financial institutions like the AFD) only represent the tip of the iceberg. Most dams are now built by private operators. And yet, a lot of them do not burden themselves with the guidelines established by the World Bank.

For example, a study on the Mekong, showed that a dam would seriously disrupt the migration of fish which feed 60 million people in the region. Thus, no development institution will fund a project on the river’s main watercourse. But private operators don’t agree : 11 preliminary agreements have now been signed between the Laotian and Cambodian governments and private contractors for dams to be built on the Mekong’s main watercourse.

These private operators are Chinese, Korean, Russian, Malaysian, Indonesian and Thai. They promise governments lower costs and perform acts of socio-environmental dumping.

What can be done ?

We now have to improve our control procedures. Hence, in the case of the Nam Theun 2 dam, in Laos, which marked the World Bank’s return to dams in 2004, there were 7 different levels of supervision (World Bank, government, backers, independent experts, operators, constructors …). These stacked layers became counterproductive: the teams on the ground spent up to 40 % of their time supervising, which shows that “The best is the enemy of the good”. Such factors increase the price of projects and leave more room for less scrupulous private operators.

But, in effect, it is governments that decide which criteria they want the private operators to apply. The problem is that even when they are willing, it is not easy, if one considers China’s political weight in South East Asia for example. However, on an international level, a new organisation which brings together operators, Member States and NGOs, the International Hydropower Association (IHA) (http://www.hydropower.org/), is trying to further develop and make the guidelines be accepted as widely as possible, based on the principle of private operators volunteering.

Today, civil society is becoming increasingly important in emergent countries, and it is more and more concerned with this type of problem. In Thailand or Brazil, there are NGOs that are powerful enough to make a dam project fail. It is the emergence of these local opposing forces which will make all the difference on “ bad”projects.

These opposing forces are essential, especially as private operators are much less transparent than international or bilateral international backers. This creates a bias : international NGOs do not always criticise private projects as much as projects undertaken by development backers. The latter are generally better, but NGOs have more information about them.

And besides the issue of dams alone, private operators have a further problem regarding all the big infrastructures such as thermal power stations, roads, mines and industrial plantations (palm oil, for example). But with the formalisation of national and international requirements, the reinforcement of civil society and the heightened awareness of private operators, we now have reason to be optimistic as regards the gradual improvement of environmental and social practices on the ground.

Propos recueillis par Olivier Blond

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