ADB accused of reckless development
By Grainne Ryder
Policy director for Probe International, Toronto, Canada
The Asian Development Bank is bringing its controversial annual meeting to Honolulu this week. It is likely to have a negative impact on our state, including changes to our legal system, the criminalization of various aspects of Hawaiian culture, an assault on our homeless population, the creation of a heavily armed security force which may be used against the people of Hawai'i for years to come and the diversion of millions of taxpayer dollars away from education, social services and environmental protection.
But what is it about the ADB that has aroused so much protest? The following are examples of ADB-financed projects that have created poverty and destroyed the environment:
• 1975-1996 Nam Ngum Hydro Dam, Lao PDR
The ADB loaned $24 million to Thailand's state utility, EGAT, for the transmission line from the Nam Ngum dam in Lao PDR to Thailand. The bank also partly financed construction of the 150-MW Nam Ngm dam which flooded several hundred square kilometers of forest, wiped out riverine fish stocks, and opened up the watershed to logging. The bulk of the dam's electricity is sold cheaply to Thailand because drought and siltation in the dams' reservoir have reduced the dam's generating capacity by one-third, making it an unreliable source of power. Dozens of communities displaced by Nam Ngum are still impoverished, trying to eke out an existence on surrounding hillsides, without access to safe drinking water, schools, and other basic facilities. In the last five years, the ADB has financed construction of two similar dams, Nam Song and Nam Leuk, designed to divert water to the depleted Nam Ngum reservoir.
• 1995 Masinloc Coal-Fired Power Station, Philippines
The ADB loaned the National Power Corp. $256 million for transmission lines and a second 300-MW generating unit at Masinloc coal-fired power station. The first unit was financed by the World Bank in 1990 despite opposition from local communities and environmental groups who fear that the project will poison century-old mango orchards, fisheries, and farmland upon which nearby communities depend.
• 1994 Theun Hinboun Hydro Project, Lao PDR
The ADB loaned $60 million to the state utility, Electricity du Laos, for its 60 percent stake in the Theun Hinboun Power Co. which owns and operates a 210-MW dam for exporting electricity to Thailand. The project is 20 percent owned by Nordic utilities, Statkraft and Vattenfall, and 20 percent owned by MDX, a Thai real estate developer. Completed in 1998, the $260 million dam destroyed riverine fisheries in two rivers upon which dozens of rural communities — or about 6,000 people — depended for their livelihoods. The ADB approved the dam contracts which have restricted the power company's obligation to pay for compensation and environmental mitigation. Villagers are still waiting for compensation and environmental mitigation measures promised by the power company and the ADB.
The ADB's commitment to defending dam investors from the real costs of their schemes is evident from its handling of the Theun Hinboun project. When citizens' groups exposed the fact that the Theun Hinboun Power Co. in Lao PDR had ignored and underestimated environmental costs in order to inflate the company's profitability, and failed to provide compensation to people harmed by the company's dams, they demanded that the company take responsibility for these costs. The ADB responded with a warning that efforts to force its client, the Theun Hinboun Power Co., to pay additional costs would damage the confidence of foreign lenders and investors in Lao PDR. The ADB also insisted that it is up to the Lao government, not the company, to either use its revenues or seek new aid sources to pay for long-term environmental costs.
• 1994 Lingjintan Hydro Dam in Hunan Province, China
The ADB loaned $116 million to the state-owned Hunan Electric Power Co. for a 240-MW hydro dam which is also expected to regulate releases from the 1,200-MW Wuqiangxi hydro scheme, situated 41 kilometers upstream on the Yuanshi river. Still under construction, the dam is expected to cost $367 million. Displaced 4,060 people not compensated. ADB reported last year that people are still waiting for compensation. Nearby communities were forced by the authorities to share their rice land with the people displaced, reducing their rice harvests by half; blocked fish migrations in the Yuanshi river which could also adversely affect fish stock in Lake Dong Ting; displaced people were promised income from plantations but it could take five to 20 years before plantations generate any income; people have less land to produce food and no income to buy food; people have left the area to find jobs elsewhere.
