By: Paul M. Bohannon1
The United Kingdom’s Department for International Development engaged the Nature Conservancy, World Wide Fund for Nature and The University of Manchester to prepare a report recently released, entitled “Improving Hydropower Outcomes Through System –Scale Planning: An Example from Myanmar (‘Report’).” This critique seeks to identify the positive and weaker aspects of the Report.
The Report should be viewed as a policy document, emphasizing the need for greater planning should Myanmar choose to continue its dam development. The authors are commended for their effort to improvise a planning system. Essentially, the authors propose a system-wide planning approach rather than a dam-by-dam review. In doing this, the Report relies upon a computer model. While some generalized modeling results are offered, the Report lacks sufficient detail regarding the modeling assumptions, time lines, territorial ranges, and variables to actually engage an analysis of the merits of the model itself. It does not appear that model has been technically peer reviewed, nor has it been tested in a judicial context. Nevertheless, the conceptual model provides a basis for hearty discussion.
The Report encourages all relevant stakeholder interests to be considered.2 However, the Report primarily addresses the commercial aspect of hydroelectricity. The emphasis is on commercial implementation, and therefore suggests a bias supporting hydro power in Myanmar. In this author’s view, there are serious governmental and citizen concerns that must stand on an equal platform with commercial concerns. These concerns will be addressed in this critique.
Although dealt with in a rather cursory fashion,3 there are substantial and imminent national policy considerations involved in the various dam proposals. The Report indicates it is “proposing an approach that strives to design an overall system of water and energy management[.]”4 Indeed, this is a laudable goal. Yet, Myanmar is a newly elected democracy that must traverse a well-steered course to maintain its democratic ways, after almost sixty years of junta rule. During that time, the country’s infrastructure aged and the general population suffered more and more poverty. With its new-found freedom, every segment of the population presents many demands – because there are so many things that need improvement. The magnitude of these demands create an over-arching demand: the NLD must nurture the evolving democracy. Somehow, the NLD must find a balance in these competing demands to retain the general population’s confidence. The balance is further challenged by a split-governance, with the military retaining its decision-making independence and, for that matter, a substantial 25% mandated role in the Parliament.5
Fundamental to the Report’s conclusions is that the decision process should be system-scale planning-based. Underlying this recommendation is that the NLD can reopen the agreements entered into between the three military-lead nations (Myanmar, China, Thailand). Perhaps the Report authors assumed this to be accurate; there certainly are serious human rights and contractual issues with respect to the various agreements.
China and Thailand reportedly have demanded that the contracts be honored.6 A system scaling approach of multiple dams necessarily means “every dam is subject to reconsideration.”
The Report sugar-coats the reason for the dams, pointing out that “there is considerable interest in developing more hydropower.”7 The reality is that the dams are extremely controversial, causing de facto civil war strife in the most affected areas. It is not a broad leap to conclude that the general populace does not want the dams.8 Myanmar is desperately under-electrified on the grid.9 The economy is impaired for lack of reliable electricity.10 This paints a plausible justification for the dams. But, one must look beyond the golden halo. The dam contracts are shrouded in mystery,11 with the three military governments not releasing more than a fig leaf of information about them.12 What we do know is that on one or more of the dams, China and Thailand, collectively, will take 90% of the power generated. This means that Myanmar will receive only a pittance of power from the plants in exchange for the burdens created. To further compound the issue, Thailand will take the excess reservoir water, without any known consideration. Meanwhile, downstream water users will suffer climate changes due to reduced water flows, decreased fisheries, increased sedimentation, and impaired transportation. Further clouding the situation is the fact that the Myanmar private investors are related to the junta led government that executed the agreements.
The Report does not address these darkly shrouded circumstances. Rather, it proclaims there is considerable interest in developing more hydropower. Hence, the impression is that the Report is fundamentally biased, favoring dam development. One might suggest that the report is flawed in its assessment of the implications for Myanmar, as the Report suggests that Myanmar “energy planning is just for domestic demand.” 13 The truth is the Chinese and Thai will build, finance, operate, and they and Thailand will take the lion’s share of the power and excess water. It is more credible to suggest that the energy planning is for international supply, to be provided through Thailand, who wishes to become the energy center of Southeast Asia.
Care should be taken to track the long-term electrical supply consequences of these dam agreements. All acknowledge that Myanmar’s newly established democratic economy will grow sharply, with electrical demand increasing in tandem. There has been no study indicating that Myanmar’s 10% electrical share of the dam’s output will be sufficient to solve its current electrical problems. Either immediately or in the foreseeable future, Myanmar’s growth demands might exceed its electrical supply allocated from these dams. In that event, Myanmar would have to purchase electricity generated in Myanmar – at a very high social and cultural cost to its citizens – at higher prices from Thailand.
The Report does address stakeholders in a cursory fashion, providing far more analysis to commercial stakeholders than citizen stakeholders. In a subtle stroke, the Project Schedule14 reflects that about a half day was spent with local CSO consultations (some of which actually were with international NGOs). Perhaps there were citizen meetings, but they simply failed to be important enough to deserve specific mention in the Report. Enough cannot be said about the general population’s view of these dams. The Report notes that the decision process must include all stakeholders to garner confidence in the system. Yet, the report is glaringly deficient in that it does not suggest a mechanism to identify stakeholders. This deficiency could lead to a lack of transparency. The Report prefers to address performance and stakeholder metrics.
Performance metrics address financial capital and operating costs, and engineered quantities like firm and total energy yield.15 From this, I infer the stakeholders to include financing institutions, engineering firms, modeling firms, agricultural and fishery persons, and others having a commercial interest in or around the dams. This is all good and correct, but it does not go far enough. Solely at first blush, local villages and chieftains, state and national parliamentarians, ethnic groups, and religious leaders should all be included.16 Each of these, in their own rights, likely would present fresh viewpoints. Certainly the Report does not preclude their inclusion. However, the Report fails to recommend a system to identify stakeholders. Each step of this process needs to be transparent.
While the Report addresses the dislocation issues, the concern appears to be sublimated to the commercial discussions. Dislocation is a human rights issue and must be given substantial weight in the planning process. The general Myanmar populace is poor, frequently living with little reliable electricity. They have lived in local villages for generations. They are culturally attached to these lands. Typical of developing countries, Myanmar owns the land – not those living on it. When Myanmar wants to use the land for a pipeline or a hydro dam, the citizens are essentially ejected from the land without much consultation. To well-developed countries, this is a foreign concept. While some project developers (like in the Myanmar dam projects) state they will compensate for the dislocation, in fact many have been forced to bear the cost of their relocation without receiving land compensation. They are cast out from their homes, their relatives and friends, even their churches.
The Report’s bias toward dam development further manifests itself in the definition of “stakeholder metrics.” It identified ten stakeholder metrics used to quantify various dam location performance standards.17
How these metrics were assessed was not detailed in the Report. Certainly all of these metrics could affect social as well as commercial interests. What is clear is that there is no reference to the loss of heritage sites, religious temples, endangered species, burial sites, ethnic and cultural and familial ties to the land.
V. Commercial Considerations.
The report addresses investor fright, suggesting that Myanmar’s suspension of the projects and conducting further review contributes to investor fright.19
“The selection process is seen as a black box, with low levels of transparency and accountability. Given this context, it is not surprising that conflicts have led to suspensions for some major investments – such as the Myitsone project on the Irrawaddy River, and other projects have been contested and delayed, resulting in major costs to developers and to power consumers. These perceptions and conflicts in Myanmar and elsewhere, erode public confidence in decision making and increase uncertainty for investors and funders.” (emp. added)
And again, the issue is addressed:
“However, after an initial wave of development interest earlier this century, relatively few projects have actually progressed because of security issues in ethnic regions, political uncertainty, and conflicts over environmental and social impacts leading to the suspension of some large-scale projects.”20
The latter references are open to blame orientation and suggestions of implicit bias against those resisting the dams. Many of the “security issues” resulted from military occupation to hold the land for the dams, to the detriment of ethnic groups and displacing the citizens.21 Democracy brings more reliable investor confidence. Democracy requires more transparency. Transparency spawns citizen enlightenment. Citizen enlightenment breeds better governmental decisions. Contracts shrouded with mystery yields distrust among citizens. Contracts in which citizens gain little but give much fosters unrest and “erode public confidence in decision making and increase uncertainty for investors and funders.” Myanmar must take a holistic approach, taking into consideration all spectrums of industrial investors and financial institutions. The NLD government’s efforts to scrutinize the merits and enforceability of these dam projects will positively reinforce international confidence.
The Report’s approach to investor fright is shallow. Indeed, the Report wholly fails to analyze the underlying investors who stand to gain from these shadowy deals with China and Thailand. The United States maintains economic sanctions regarding Burma, now mainly targeting listed individuals and entities, as well as any investment with the military. 22 The U.S. believes these “targets” obstruct political reform in Myanmar, abuse human rights, or propagate military trade with North Korea.23 The list contains a “who’s who” of the old military junta, and is relevant to the Myitsone Dam. Steve Law and his company, Asia World Company Ltd., are contracted to participate in construction of several hydro dams, including the volatile Myitsone.24 Asia World’s founder, Lo Hsing Han, (Steve Law’s father), as dubbed the “King of Opium” by U.S. drug enforcement authorities in the 1970’s. International Group of Engineers is an investor oin the Hatgyi dam, and has direct links to the junta.25
Environmental & Ecological Considerations.
The remaining and highly important substantive issues are the environmental and ecological considerations. The project promoters baldly proclaim that all approvals have been issued; yet, Myanmar citizens really do not know what was considered. The technical documentation has not been submitted for peer review. The contracts to construct and operate have not been submitted for public scrutiny. And there are credible suggestions that some documentation may have been altered. All of this, amid the backdrop of junta driven agreements, in which self-interests exists, mandates compliance with the newer, more stringent environmental review requirements. The Report seems to support Myanmar’s right to conduct such a review. The notion of an iterative process is commendable, because it allows each step of any process to be reviewed, approved or rejected. Iterative review has become the norm in river issues, as river matters are extremely complex even without the socio-cultural considerations. The Report soundly points out sediment transport and mobility, river hydraulics, basin characteristics storage models, and ecological models (among other items) are all reasonable requirements.26
The Report’s authors totally ignore existing UN Conventions on this topic. This is a peculiar misstep that disregards valuable, international norms directly applicable to the dam situations. Among the relevant Conventions is the Convention on the Law of Non- Navigational Uses of International Watercourses (1997) (“Transboundary Convention), which governs a system of surface and connected groundwaters in transboundary context. The Transboundary Convention is voluntary. It calls for the equitable and reasonable use of common waters among sovereign territories. The factors relevant to equitable and reasonable utilization are listed.27 The Convention imposes an obligation to eliminate or mitigate harm caused by use, and to prevent or mitigate pollution. There are also Model Provisions on Transboundary Groundwaters. Most of the detail necessary to arrive at harm and impact assessment and mitigation in the conceptual model are provided in the Conventions. Because these Conventions establish international norms, a full analysis of the various Conventions should be a part of the process.
The Report is to be commended for its efforts to establish a conceptual framework for dam planning. The Report emphasizes the need for stakeholder input, encouraging an inclusive approach. The Report, however, starts with the assumption that dams must be built. Although encouraging full stakeholder participation, the Report subtly employs a commercial bias. It further assumes that the dams, when built, will solve Myanmar’s electrical deficiencies. This is not at all established and is a critical analysis that must be addressed before considering imposing burdens on the citizens.
Myanmar must invest time and engage experienced and ethical consultants to assist in the suggested model design. Only after deliberate, transparent consideration, will good decisions be made for the betterment of the Myanmar people.
Paul Bohannon (c) 2017
1 Paul M. Bohannon is a lawyer in Houston, Texas. He has spent over 40 years working with environmental agencies throughout the United States and some foreign countries. He received his B.A. in Political Science from Oklahoma State University in 1972 with honors, and his J.D. Law Degree from Southern Methodist University Dedman School of Law in 1975, graduating Order of the Coif (top 10%). His practical experience includes multiple river and harbor environmental issues, oil, gas, pipeline, and mining issues. He has successfully defended and prosecuted many environmentally-related cases in the U.S. judicial system, and has assisted in over 100 administrative rulemakings. He also is licensed before the United States Supreme Court. Mr. Bohannon worked in Mongolia resolving citizen issues regarding mining practices. He is familiar with the legal aspects of sediment mobility, contaminant transport, river hydraulics, computer modeling and best practices in water management as well as citizen participation issues.
2 See Report, p. 6.
3 See Report, p. 6. “Myanmar’s new democratic government now has to make important choices about hydropower management and development and it has indicated that it will emphasize sustainable energy.”
4 See Report, p. 17.
5 See Union of Myanmar Constitution, Chapter 20.(b) (“Constitution”). “The Defence Services has the right to independently administer and adjudicate all affairs of the armed forces.”; Constitution, Chapter 60.(b)(iii) (entitled to elect one of three Vice- Presidents); Constitution, Chapter 109.(b) (Pyithu Hluttaw shall consist of 25% nominated by the military; The Irrawaddy, “Dateline Irrawaddy: The Constitution Has Made Two Lions Live Together in a Cave,” (May 14, 2016) [Interview of Ko Ko Gyi]; Myanmar Times, “Military Protests But Parliament Passes State Counsellor Bill,” (April 5, 2016).
6 See The Irrawaddy, “China to Push Burma’s New Government Stalled Myitsone Dam,” (March 18, 2016); The Nation (Thailand), “Chinese Dam Firm Lobbies Kachin Media,” (April 24, 2014); Myanmar/Burma Forum, “Thai Govt Urges Burma to Speed Up Tasang Dam Project,” (October 9, 2013)
7 See Report, p. 31.
8 Myanmar Times, “NLD Under Pressure to Scrap Hydropower Projects,” (March 15, 2016).
9 See Report, p. 4 (“Only one-third of the population has access to electricity and lack of power constrains efforts to overcome poverty.”); Ministry of Electric Power, The Government of the Republic of the Union of Myanmar, JICA Tokyo International Center Energy Policy Training Program in Japan, “Country Presentation of Myanmar,” (June 23-July 13, 2013).
10 See World Bank Group, “Doing Business 2010, Going Beyond Efficiency – Economy Profile Myanmar,” p. 30-35.
11 See Report, p. 28.
12 See Report, p.
13 See Report, Chapter 5, p. 45.
14 See Report, p. 54.
15 See Report, p. 23.
16 Some of these stakeholders are acknowledged later in the Report, p. 34.
17 See Report, p. 7.
18 Flood control is distinguished from reservoir management. Reservoir management is designed to assure water retention, thereby preventing inundation beyond the design limits. Flood control typically means the use of standard operating procedures to minimize risk to operational equipment, industrial operations, and developments along the inflow and outflow routes under standard operating conditions.
19 See Report, p. 6.
20 See Report, p. 9, 45.
21 Karen Rivers Watch, “Thousands of Karens and KNU officials raised their concerns over the challenges that the Salween Dams pose to build a long lasting peace,” presented at the International Day of Action for Rivers and Against Dams (March 14, 2016).
22 See United States Office of Foreign Assets Control, U.S. Department of the Treasury. “Unless otherwise authorized or exempt, transactions by U.S. persons, or in or involving the United States, are prohibited if they involve transferring, paying, exporting, withdrawing, or otherwise dealing in the property or interests in property of an entity or individual listed on the SDN List. The property and interests in property of an entity that is 50 percent or more owned, whether individually or in the aggregate, directly or indirectly, by one or more blocked persons are also blocked, regardless of whether the entity itself is listed on the SDN list.” As late as May 2016, the U.S. further eased these sanctions, particularly with respect to select banking institutions. See 31 F.R. part 537 (May 18, 2016).
23 See Embassy of the United States, Rangoon – Burma, “U.S. – Burma Policy, Sanctions on Entities and Persons in Burma,” at http://burma.usembassy.gov/burma_sanctions.html.
24 Asia Times Online, Brian McCartan “On the march to Do Business in Myanmar,”(August 26, 2009).
25 Aung Thaung is the father of Nay Aung, owner of International Group of Engineers (IGE), is an investor in the Hatgyi dam – a controversial mega-dam proposal by Thailand. Aung Thaung is or was the central advisor for Myanmar’s Union Solidarity and Development Party (military).
26 See Report, p. 37-38.
27 (a) Geographic, hydrographic, hydrologic, climatic, ecological and other natural characters; (b) Social and economic needs of watercourse states involved; (c) Population dependent on watercourse; (d) Effects of uses of watercourse in one state vs. other states; (e) Existing and potential uses of watercourses; (f) Conservation, protection, development and economy of use, and costs of measures taken to that effect.