I -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~c I~~~~~~~~~~~~~~~~~~~ -I 1. 'Ii ______~~~~! f IUCN - THE WORLD CONSERVATION UNION Founded in 1948, IUCN-The World Conservation Union brings together States, government agencies, and a diverse range of non-governmental organizations (NGOs) in a unique membership: 895 members in all, spread across 138 coun- tries. As a Union, IUCN seeks to influence, encourage and assist societies throughout the world to conserve the integrity and diversity of nature and to ensure that any use of natural resources is equitable and ecologically sustain- able. A global secretariat and 35 regional and country offices coordinate the IUCN Programme and serve the Union membership, representing their views on the world stage and providing them with the strategies, services, scientific knowledge and technical support they need to achieve their goals. 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LARGE DAMS LEARNING FROM THE PAST LOOKING AT THE FUTURE WORKSHOP PROCEEDINGS Gland, Switzerland April 11-12, 1997 Editor: Tony Dorcey Co-Editors: Achim Steiner Michael Acreman Brett Orlando IUCN U The World Conservation Union The World Bank The joint IUCN/World Bank initiative on Large Dams was implemented with financial assistance from the Swiss Agency for Development and Cooperation. LARGE DAMS: Learning from the Past, Looking at the Future The designation of geographical entities in this book, and the presentation of the material, do not imply the expression of any opinion whatsoever on. the part of IUCN or the World Bank Group concerning the legal status of any country, territory, or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries. The views expressed in this publication do not necessarily reflect those of IUCN or the World Bank Group. This publication has been made possible in part by funding from the Swiss Agency for Development and Cooperation. Published by: IUCN, Gland, Switzerland and Cambridge, UK The World Bank Group, Washington, D.C. IUCN U The World Conserlation Union The World Bank Copyright: (© 1997 International Union for Conservation of Nature and Natural Resources and the International Bank for Rec onstruction and Development/the World Bank Group Reproductionl of this publication for educational or other non-commercial purposes is authorized without prior written permission from the copyright holder provided the source is fully acknowledged. Reproductiorn of this publication for resale or other commercial purposes is prohibitecd without prior written permission of the copyright holder. Citation: IUCN - The World Conservation Union and the World Bank Group. July 1997. Large Dams: Learning from the Past, Looking at the Future. Workshop Proceedings. IUCN, Gland, Switzerland and Cambridge, UJK and the World Bank Group, Washington, DC. v. + 145 pp. ISBN: 0-8213-4028-X Layout, cover Robert Dorrell design by: Cover photos: Clockwise from top right: (1) Pakistani settler and irrigation canal in the Tarbela Dam area, Pakistan; (2) Construction site at the Pangue Dam, Chile; (2) Spillway construction at Victoria Dam, Sri Lanka; (4) Tarbela Dam, Pakistan. All photos courtesy of the World Bank Group Produced by: IUCN US, Washington, DC IUCN Global Policy and Partnership Unit, Gland, Switzerland Printed by: Reproductions, Incorporated. Gaithersburg, Maryland. Available from: IUCN Publications Services Unit 219c Huntingdon Road, Cambridge CB3 ODL, United Kingdom Tel: +44 1223 277894; Fax: +44 1223 277175 E-mail: iucn-psu&wcmc.org.uk; www: http://www.iucn.org A catalogue of IUCN publications is also available The World Bank 1818 H Street, NW, Washington, DC 20433, USA Tel: 202-477-1234; Fax: 202-477-6391 E-mail: booksUbworldbank.org; www: http://www.worldbank.org The text of this book is printed on 50% recycled paper made with 30% post-consumer waste. LARGE DAMS: Learning from the Past, Looking at the Future TABLE OF CONTENTS Preface i List of Invited Workshop Participants iii PART 1: SUMMARY REPORT OF THE WORKSHOP Summary Contents 3 1.0 THE WORKSHOP: ORIGINS, PLANNING AND PROCEEDINGS 4 1.1 Growth of Controversy 4 1.2 World Bank Review 4 1.3 World Bank Partnership with IUCN-The World Conservation Union 5 1.4 Preparations for the Workshop 5 1.5 What Happened? 8 2.0 MAJOR CONCLUSIONS AND RECOMMENDATIONS 9 2.1 A World Commission 9 2.2 The Proposed Agenda 11 2.3 Implementation Strategy 11 3.0 EPILOGUE 12 PART II: OVERVIEW PAPERS 4.0 ENGINEERING AND ECONOMIC ASPECTS OF PLANNING, DESIGN, OPERATION AND CONSTRUCTION OF LARGE DAM PROJECTS by Engelbertus Oud and Terence MVuir 17 5.0 SOCIAL IMPACTS OF LARGE DAMS by Thayer Scudder 41 6.0 ENVIRONMENTAL SUSTAINABILITY IN THE HYDRO INDUSTRY by Robert Goodland 69 7.0 MEETING HYDRO'S FINANCING AND DEVELOPMENT CHALLENGES by Anthony Churchill 103 8.0 HYDROPOWER: A NEW BUSINESS OR AN OBSOLETE INDUSTRY? by Anthony CGhurchill 111 APPENDIX A A.1 CRITICAL ADVANCES NEEDED IN KNOWLEDGE AND PRACTICE 121 A.2 METHODOLOGIES AND APPROACHES FOR ASSESSMENT 124 APPENDIX B B. 1 INTRODUCTORY REMARKS by David McDowell 127 B.2 INTRODUCTORY REMARKS by Robert Picciotto 130 B.3 MCDOWELLIWOLFENSOHN CORRESPONDENCE 134 APPENDIX C C.1 LIST OF PAPERS AVAILABLE TO THE WORKSHOP PARTICIPANTS 139 C.2 BIOGRAPHIES OF THE REFERENCE GROUP 141 LARGE DAMS: Learning from the Past, Looking at the Future LARGE DAMS: Learning from the Past, Looking at the Future PREFACE Working in partnership towards sustainable development is an often-cited objective. The workshop on large dams jointly organized by IUCN - the World Conservation Union and the World Bank Group has been acknowl- edged by all involved as a promising example of learning and cooperation. Together we decided to tackle one of the "big debates" in sustainable development. For far too long conflict and controversy have prevented constructive dialogue and objective assessments. Given the many differing per- spectives on large dams, a great challenge remains in interpreting their development effectiveness and applying the lessons learned to future decisions on whether dams have a major role to play in land, water and energy development and how particular dams should be selected, constructed and operated. This challenge reflects the complex judgments involved in meeting development needs, maintaining the viability of ecosystems and protect- ing the livelihoods and cultures of people affected by such major infrastructure developments. The workshop in Gland has created an important opportunity for addressing these questions in an open, trans- parent and rigorous process. It is our hope that the proposed independent commission to be established by November 1997 will enable all stakeholders to make substantive contributions to the review of large dams and the development of new standards, criteria and guidelines to inform future decision-making. We would like to thank the participants of the workshop for the time and effort they invested in making this dialogue a success. Their continued commitment to the follow-up process of establishing the commission has been remarkable. The support of the Swiss Agency for Development and Cooperation (SDC) in contributing to this large dams dialogue was critical and their role in supporting this partnership is appreciated by all involved. We also owe a special vote of thanks to the authors of the overview papers - Robert Goodland, Engelbertus Oud, Terence Muir, Thayer Scudder and Anthony Churchill - who provided an important starting point for our discussions. Tony Dorcey, who facilitated the workshop, proved indispensable in creating the right atmosphere and the right process for an open and constructive debate. Together with Mike Acreman, workshop rapporteur, he pre- pared the workshop summary report. Andres Liebenthal (OED/World Bank) and Achim Steiner (IUCN) formed the team that prepared and coordinated much of the process that led up to Gland. The support provided by the IUCN staff in Washington and Gland in organizing the workshop and producing these proceedings was critical. To all those who made the Gland workshop a reality, we owe a debt of gratitude. This publication is an invitation to work with us in building on the success of the Gland initiative. As you will see from the letters included in Appendix B3, both of our institutions have fully committed themselves to realizing the mandate given to us in Gland, Switzerland. George Greene Robert Picciotto Assistant Director General Director General IUCN-The World Operations Evaluation, Conservation Union The World Bank Group Preface ii LARGE DAMS: Learning from the Past, Looking at the Future INVITED PARTICIPAINTS TO THE LARGE DAMS WORKSHOP Sanjeev Ahluwalia Andres Liebenthal Tata Energy Research Inastitute World Bank India United States Peter Bosshard Richard Meagher The Berne Declaration Hazra Engineering Company Switzerland United States John Briscoe Patrick McCully World Bank International Rivers Network United States United States Wenmei Cai Jeff McNeely Beijing University IUCN People's Republic of China Switzerland Stuart Chape Kathryn McPhail IUCN/Laos World Bank Lao People's Democratic Republic United States Eduardo de la Cruz Charry Reatile Mochebelele ISAGEN Lesotho Highland Project Columbia Lesotho Shripad Dharmadhikary Ricardo Luis Montagner Narmada Bachao Andolan MAB India Brazil Mbarack Diop Engelbertus Oud Tropica Environmental Consultants Ltd. Lahmeyer International GMBH Senegal Germany Steve Fisher Bikash Pandey Intermediate Technology Development Group Alliance for Energy United Kingdom United States Robert Goodland *Elias Diaz Pena World Bank Sobrevivencia United States Paraguay George Greene Thomas Philippe IUCN Electricite de France Switzerland France David Iverach Robert Picciotto Nam Theun Two Electricity Consortium World Bank Lao People's Democratic Republic United States E.A.K. Kalitsi Jean Yves Pirot Volta River Authority IUCN Ghana Switzerland iii Participants List LARGE DAMS: Learning from the Past, Looking at the Future Martyn Riddle RAPPORTEUR International Finance Corporation Michael Acreman United States Institute of Hydrology Thayer Scudder United Kingdom California Institute of Technology COORDINATOR United States Achim Steiner Aly Shady IUCN/Washington office International Commission on Irrigation and United States Drainage OBSERVERS Ricardo Bayon Andrew Steer IUCN World Bank Switzerland United States Timothy Cullen Richard Stern World Bank World Bank United States United States Jan Stromblad MEDIA ABB Stephanie Flanders Sweden Financial Times United Kingdom Theo Van Robbroeck International Commission on Large Dams Danel Hoffmnan South Africa Neue Zuercher Zeitung Switzerland Pietro Veglio World Bank Jan Kristiansen United States Agence France-Press France *Martin Ter Woort Gdo c Acres International Ltd. The Economist Canada United Kingdom Tanlin Yuan *Stephanie Nebehay Ministry of Water Resources ReStep N People's Republic of China Reuters Switzerland *Mishka Zaman SUNGI Development Foundation Kalpana Sharma Pakistan Indu India Robert Zwahlen Electrowatt Engineering Ltd. Switzerland * Invited but were unable to attend. FACILITATOR Tony Dorcey University of British Columbia Canada Participants List iv LARGE DAMS: Learning from the Past, Looking at the Future LARGE DAMS: Learning from the Past, Looking at the Future PART I SUMMARY REPORT OF THE WORKSHOP _ .;'.' . -9-; - ........................ -:' '.--'. : ...........................:.~ ;; . ' , . - . . . . . . . . . . . - . - 0 . : . - - . -. . ... - t . . . . -... LARGE DAMS: Learning from the Past, Looking at the Future LARGE DAMs: LEARNING FROM THE PAST LOOKING AT THE FUTuRE Summary Report of the Workshop Group photograph of the workshop participants. Summary Contents What Happened?2.......................8 Introduction ......................................................4 MAJOR CONCLUSIONS AND THE WORKSHOP: ORIGINS, RECOMMENDATIONS..................9 PLANNING, PROCEEDINGS: ............4 A World Commission ....................9 Growth of Controversy...................4 TePooe gna..................1 World Bank Review......................4 World Bank Partnership with Implementation Strategy................1 1 IUCN-The World Conservation Union .....5 EPILOGUE............................12 Preparations for the Workshop............ 5 References ............................14 Summary Report of the Workshop 3 LARGE DAMS: Learning from the Past, Looking at the Future INTRODUCTION construction of increasingly large dams to meet vari- ous mixes of these purposes; the 221-meter-high Something different and most promising happened Hoover Dam, inaugurated in the United States in in Gland, Switzerland, in ea:rly April 1997. For two 1935, ushered in a new era of big darns. In the last days, 37 stakeholders, representing diverse interests half of this century, construction around the world from around the world, explored whether they could accelerated, with some 35,000 large cLams being built work together in seeking resolution of the highly con- between 1950 and the late 1980s (International troversial issues associated with large dams. Given Commission on Large Dams, 1988), the largest of more than two decades of increasingly acrimonious which, Nurek in Tajikistan, reached 300 meters high exchanges about the development effectiveness of (International Water Power and Dam Construction large dams, most participants were not optimistic Handbook, 1995). about the outcome. But by the time they left Gland, all had been surprised and excited by the breadth of However, there has been mounting controversy, the consensus on how to move forward and the particularly over the last two decades, about the role issues to be addressed. Most notably, agreement was of large dams in development (Goldsmith and reached on the next step: A World Commission Hildyard, 1984; McCully, 1996). As development pri- should be established to assess experience with large orities changed and experience accunmulated with the dams and to propose if and how they can contribute construction and operation of large dams around the to sustainable development. All those present in world, various groups argued that expected economic Gland committed to making the commission a reality benefits were not being produced and that major within six months and to seeking a mandate for it to environmental, economic and social costs were not report within two years. being taken into account. In the 1980s proposals for large dams began to be fundamentally questioned by In Part I, this monograph summarizes what hap- locally affected interests and global coalitions of envi- pened in advance of the workshop, during the two ronmental and human rights groups (for example, days of discussions and immediately following the Sardar Sarovar). In the 1990s this has resulted in a workshop's conclusion. In drafting the proceedings, succession of calls for a moratorium on World Bank we have attempted to capture what was new and dif- funding and reparations for those affected by con- ferent about the Gland workshop and to identify the struction of large dams (for example, the 1994 implications for how to build on the initial consensus Manibeli and 1997 Curitiba Declarations). and sustain its momentum. F'art II contains the full text of three overview papers that were commis- 1.2 WORLD BANK REVIEW sioned and two others that were reproduced to When he was appointed president of the World inform the discussions. Bank in 1995, James Wolfensohn announced his intention to undertake a review of its cLevelopment effectiveness. Although it had been involved in the 1.0 THE WORKSHOP: ORIGINS, financing of a relatively small proportion of the large PLANNING AND PROCEEDINGS dams, the World Bank Group had become a major focus of criticism because of the number of problem- 1.1 GROWTH OF CONTROVERSY atic projects, including some of the biggest and most Dams have played a key role in development since controversial, in which it was involved. It was in this at least the third millennium B.C., when the first context that the independent Operations Evaluation great civilizations evolved on major rivers, such as Department (OED) of the World Bank began a the Nile, Tigres-Euphrates and Indus. From these review of large dam projects. The first phase was early times, dams were built to supply water, control designed to be an internal desk study of 50 large floods, irrigate agriculture and provide for navigation. dams assisted by the Bank and was completed by More recently, since the onset of the industrial revo- OED in September 1996. The second phase was lution in the 18th century, they have also been built planned to be a broader study, involving the collec- to produce motive power and electricity. In the 20th tion of new data and participation by other stakehold- century, new technologies have made possible the ers, to evaluate the development effectiveness of 4 Summary Report of the Workshop LARGE DAMS: Learning from the Past, Looking at the Future large dams in terms of technical, economic, social 1.3 WORLD BANK PARTNERSHIP WITH and environmental implications for future financing IUCN-THE WORLD CONSERVATION by the World Bank Group, as well as other sources. UNION Using available data for projects completed One of the initiatives of the director-general of Usiweeng1960 and 1995, the dams were classifi.d IUCN, David McDowell, upon his appointment in between 1960 and 1995, the dams were classified 94wst eksrtei rnrh ihk according to their economic justification and whether 1994, was to seek strategic partnerships with key they satisfied the impact mitigation and management international agencies so that they might work the saife th imac miiainadmngmn together to resolve controversial issues and meet policies existing at the time of their approval, or could joi ntertests. Anaroeemen negotiatd with have been planned so as to satisfy policies that the joit mterests. An agreement negot1ated woth the Bank had introduced over the intervening years World Bank and signed in 1994 was one of the early (Liebenthal et al., 1996). OED concluded that while partnerships to be established. It was under this 90 percent of the dams reviewed met the standards agreement that the Bank approached IUCN in 1996 applicable at the time of approvals, only about one- with the idea that they might jointly host a workshop qapplicber atee timpemo aovas to ly abuth ne- to discuss the findings of the OED desk review World Bank's current, more demanding policies. The (Phase I) and their implications for the design, methodology and process of a proposed in-depth study (Phase II) on large dams to be undertaken in 1997-98. In agreeing to proceed, both organizations The impact of large dam projects recognized that this workshop would address one of the most controversial issues in the field of environ- Under old policies ment and development policy today and that a suc- cessful outcome was by no means assured. Unacceptable Special funding to support the workshop was pro- vided by the World Bank through the Swiss Agency decided that one of the priorities in allocating the Unacceptable SDC/OED trust fund should be to seek a resolution to the conflicts surrounding large dams. 9% ^1.4 PREPARATIONS FOR THE WORKSHOP Robert Picciotto, director general of Operations Evaluation at the World Bank, and George Greene, Acceptable assistant director general of IUCN, were given overall Potentially Z 6t / responsibility for the workshop. Reporting to them, acceptable \ Achim Steiner, who was IUCN's liaison officer to the World Bank, and Andres Liebenthal, who had led OE PRECIS, SEPTEMBER 1996, WORLD BANK Acceptable OED's desk review, were asked to organize the work- shop, focusing on five key preparatory tasks: agree- review also concluded that mitigation of the adverse ment on the specific objectives, development of back- social and environmental consequences of large dams ground information, selection of participants, facilita- would have been both feasible and economically justi- tion of the sessions and design of the agenda. fied in 74 percent of the cases. The main conclusion Objectives of workshop was OED's conditional support for the construction of large dams, provided that they strictly comply with Four specific objectives were developed through Bank guidelines and fully incorporate the lessons of discussions among some of the key stakeholders experience. The analysis, conclusions and recommen- associated with IUCN and the World Bank: dations were summarized and made public in an Review the OED desk study of large dams in OED Precis (1996). Summary Report of the Workshop 5 LARGE DAMS: Learning from the! Past, Looking at the Future Box 1: Summary of Oud and Muir Paper on Engineering and Economic Aspects Engelbertus Oud, the head of Water, Power and Land Development for Lahmeyer International, a German engineering firm, and Terence Muir, also of Lahmeyer International, summarize the main engineering and economic aspects of the plan- ning and design for large darn projects. One important trend in large dam projects is the increased role of private-sector financing. This has led to an emphasis on the part of private developers to cut project costs, shorten the duration of design and construction, and offload as much risk as possible onto other parties, particularly the host government. There are also a number of technological developments that make the planning, construction and operation of large dam projects more effi- cient. Another very important trend is increasing public interest in large dam projects. This leads, in turn, to changes in how dams are planned, designed and operated. The review of project Environmental Impact Assessments (EIAs') and project design, as well as regular inspection of construction and operation of dams, particularly as they grow older, by a group of independent experts, is seen as key to providing suitable assurance to the public, dam owners, lenders and governments. It is also acknowledged that increasing public scrutiny of environmental and social impacts will make the trade-offs between the benefits and costs of dam construction more explicit. Box 2: Summary of Scudder Paper on Social Impacts Thayer Scudder, a professor in the Institute of Development Anthropology at the California Institute of Technology, asserts that the adverse social impacts of dam construction, whether short-term or cumulative, have been seriously under- estimated. Large-scale water resource development projects have unnecessarily lowered the living standards of millions of local people. According to the World Bank's senior environmental advisor, "Involuntary resettlement is arguably the most serious issue of hydro projects nowadays. Scudder argues that the goal of resettlement must be for those removed and the host population among whom they are resettled to become project beneficiaries. The income and standard of living of the large majority must improve tc, the greatest extent possible. Besides resettlers and hosts, other people affected by dam construction include rural dwellers residing downstream from a dam. They are often neglected in project assessments because it is assumed that they will benefit from the project; however, there are frequently significant negative downstream impacts. While the World Bank has attempted to improve its performance, it continues to underestimate adverse resettle- ment outcomes and downstream impacts. Although more detailed research is needed, Scudder suggests a number of ways in which all project affected peoples can become better off. These include increasing local participation, improving the design and implementation of irrigation schemes, training and technical assistance to utilize the reservoir fisheries, and strategic flood releases that can benefit downstream users and habitats. Multilateral donors are essential to ensure that more local people become project beneficiaries. terms of its data, assumptions, approach, analysis and public participation, information disclosure and sub- conclusions and compare the results to documented sequent dissemination of results; and experience from other sotirces, including experience of industrialized countries; a Identify follow-up actions necessary for the development of generally accepted standards for a Develop a methodological framework for the assessment, planning, building, operation and financ- Phase II study that would consider the critical issues ing of large dams that would adequately reflect that need to be addressed in determining the future lessons learned from past experience. development of a large dam--including evaluation of alternatives and social, resettlement, environmental, Background information economic, technical and other relevant policy criteria; In addition to providing the invited participants with a copy of the desk review report, it was decided 9 Propose a rigorous professional and transparent that background papers should be commissioned to process for defining the scope, objectives, organiza- provide independent overviews of experience from tion and financing of follow-up work, including a other sources, including experience of industrialized Phase II study incorporating basic guidelines for countries, in three key topic areas: engineering and involvement by governments, the private sector and economics, social and stakeholder issues, and envi- non-governmental organizations (NGOs) as well as ronmental sustainability. After consulting extensively 6 Summary Report of the Workshop LARGE DAMS: Learning from the Past, Looking at the Future Box 3: Summary of Goodland Paper on Environmental Impacts Robert Goodland, an advisor on environmental assessment in the Environment Department at the World Bank, pro- vides an overview of the debate embroiling the hydroelectric industry regarding the environmental sustainability of dam construction. Goodland examines ten major issues in the controversy over dams, including transparency and participa- tion; demand-side management, efficiency, and conservation; the balance between hydro and other renewables; large dams vs. small and medium-size dams; Sectoral Environmental Assessments (SEAs); storage dams vs. run-of-river dams; involuntary resettlement; project-specific mitigation; and, finally, the damage costs of greenhouse gas emissions. On each issue, he summarizes the position taken by the proponents and opponents of dams. He argues that the main way of making dam construction environmentally sustainable is to integrate environmental and social criteria into the tra- ditional least-cost sequencing through a Sectoral Environmental Assessment. The SEA will not only encourage better site selection, but also will allow a comparison of energy supply alternatives. It is acknowledged that ensuring that dam con- struction is environmentally sustainable will necessarily mean that some hydro projects do not go forward. But without higher standards, Goodland argues, the hydro industry will continue to decline, and coal and other fossil-fuel alternatives will flourish-an environmentally retrograde course. Box 4: Summary of Churchill Papers on Future Challenges Facing the Hydropower Industry Anthony Churchill, a senior advisor with the Washington Energy Group and former principal advisor for finance and private-sector development at the World Bank, argues that hydropower is at an international crossroads. The environmen- tal and social problems associated with dams, particularly poorly conceived and executed resettlement programs, have tar- nished the reputation of the hydro industry. Performance problems, such as cost overruns and project delays, have also plagued the industry. Further criticisms leveled at the hydro industry include poorly defined products, lack of discipline, and political, rather than economic, decision-making. As countries increasingly look to the private sector to finance hydro projects, all of these problems threaten to discourage future investments in hydropower. In order for hydropower to suc- ceed in the future, the resettlement issue must be resolved. The industry must also become more competitive by develop- ing new technologies to improve efficiency while improving its systems of accountability. One alternative is for the industry to create developers-that is firms with sufficient capital, technical skills and marketing ability to finance and manage the risks inherent in hydropower projects. Ultimately, what is needed, Churchill asserts, is a new model of public-private part- nership, whereby the private sector agrees to undertake greater responsibility for project results, and the government agrees to treat electric power as a commercial business subject to the discipline of the market. to identify individuals who would be widely viewed as est among key stakeholders in attending the work- well-qualified, papers were commissioned from shop. Balancing the need to ensure diversity and to Engelbertus Oud, Thayer Scudder and Robert keep the numbers manageable, 39 participants were Goodland. In addition, two previously published ultimately invited and accepted; they included seven papers by Anthony Churchill were reproduced. (See from the World Bank, six from government agencies, Boxes 1-4 and full texts in Part II.) seven from local NGOs (two of whom were unable to come at the last minute), five from IUCN, eight from A separate compendium of previously published private dam construction and consulting companies documents, including relevant directives and policies and industry organizations, and four from of the World Bank and providing different viewpoints academia/research. The goals set to ensure a on key issues, was also assembled (see the list of breadth of representation were substantially met, papers distributed at the workshop Appendix Cl). All with the exception of participation by women (see of these background materials, along with biographi- Biographies of the Reference Group in Appendix C2). cal information provided by those attending, were Four representatives of the international media (The sent to the invited participants in advance of the Economist, Financial Times of London, Hindu and workshop. Neue Zuercher Zeitung) also participated as observers Participants. There was a very high level of inter- and reported on the workshop discussions under Summary Report of the Workshop 7 LARGE DAMS: Learning from the Past, Looking at the Future Chatham House Rules, which allow for quotations ety of contexts and projects. In addition, they would from the proceedings without attribution to individu- bring strongly held views, along with varying histo- als. ries of involvement in the controversies about large dams. The agenda therefore had to be designed with Facilitation. Given the record of controversy, these and other considerations in mind. challenging issues to be addlressed and the extremely short time available at the workshop, it was conclud- Overall, the chosen strategy was to provide early ed that one person should chair and facilitate the opportunities for people to get to know each other entire process. Ideally, the individual would be a prac- and express their views, but to begin searching as ticing facilitator and knowledgeable about the issues soon as possible for where there might be grounds but not be identified with previous controversies con- for agreement on next steps. To foster interaction, it cerning large dams. Tony Dorcey, a professor at the was planned to make extensive use ol three facilitat- University of British Columbia with international ed breakout groups, each consisting of a cross-sec- tion of the participants. Each group would be allocated one of the three topic areas examined in the overview papers (engineering/eco- nomic/finance, social and stake- holder, and environmental). To guide discussion, each group would _I ! S be asked to address three ques- tions based on the workshop objec- tives: What are the critical ~ ~> advances needed in knowledge and practice for the assessment and development of large dams? What methcodologies and approaches are requiired to achieve these advances? _ Who should be involved, and what should be the process for follow-up action? Andres Liebenthal of the World Bank and Shripad Dharmadhikary of the Struggle To ensure adequate consider- to Save the Narmada (NBA) continue the dialogue during a break. ation of each of the three questions and cross-fertilization of ideas among the groups, two complete iterations of the experience in multi-stakeholder processes and river three were planned, with the groups reporting back basin management, was selected and became on the results of the first iteration after the first day. involved in the detailed planning. 1.5 WHAT HAPPENED? Agenda. Many potential difficulties had to be anticipated in designing the agenda for Gland. There Overall, the strategy worked better than the orga- would be only two days in which to address highly nizers had dared to hope for. In large part, this was complex and controversial issues. Only a small pro- because all the participants were comrmitted to mak- portion of the participants were expected to know ing it work. There was a shared sense that this each other, and while they would offer a remarkable unique convening of the diversity of interests in large wealth of experience, this was rooted in a great vari- dams had to be made to work because, if it should 8 Summary Report of the Workshop LARGE DAMS: Learning from the Past, Looking at the Future fail, the opportunity to try again would be immensely afterward in discussions over dinner, it was evident to difficult to recreate. For varying reasons, it transpired all that there was a surprising amount of agreement that the time was right to try a different approach. about how to address the questions concerning criti- cal advances needed in knowledge and methodolo- This was not, however, immediately evident as the gies, which had received most attention in the time participants were gathering to meet each other in available. Gland. Earlier in the week, the International Rivers Network (IRN) issued a statement, endorsed by 49 The next morning the groups reconvened and, in a other non-governmental organizations from 21 coun- second iteration, refined ideas in the light of what tries, that was highly critical of the OED review. In an other groups had proposed and focused particularly article headlined "Ecologists square up for dam on developing the proposals for next steps and their debate," the Financial Times of London (April 10, implementation. Over lunch, representatives from 1997) quoted the IRN as concluding the OED review each of the groups reviewed all the proposals and was based on "seriously flawed methodology and identified where there was general consensus on incomplete and inadequate data." The evening before each of the three questions. When these were pre- the workshop, in introducing themselves to one sented to the closing plenary, they were unanimously another and voicing expectations, the participants adopted following some fine-tuning adjustments. The expressed hopes for progress but did not shrink from relative ease with which they were accepted reflected making clear their positions and stressing the legacy the breadth of consensus that had been built over the of mistrust and acrimony that would have to be over- two days. While nobody underestimated the difficul- come for any measure of success. In several cases, ties that would be encountered in seeking to resolve adversaries were meeting each other face-to-face for the issues in the next phase of work, all were were the first time. cautiously optimistic about what might be achieved and committed to working together to make it hap- The remarks made during the opening plenaries pen. on the first morning reiterated and amplified many of the refrains of support, caution and criticism from the night before. The limitations of the OED desk review 2.0 MAJOR CONCLUSIONS AND and its preliminary nature were acknowledged by the RECOMMENDATIONS authors and other participants. Criticisms of its data, analysis and conclusions ranged from specific chal- The major conclusions and recommendations from lenges of its estimation of costs and benefits to the workshop are highlighted in this section. Based methodological issues, such as the discount rate used on the final plenary and drawing on all that preceded and the scope of its treatment of ecosystem impacts it, they are presented here so as to focus attention on and social consequences. (For details, see statements the next steps that were agreed to. They are included in the companion volume of papers tabled at expressed in specific terms as articulated by the par- the workshop.) There was widespread recognition ticipants. It was, however, recognized that the that further work was essential and that it would need specifics may well need to be reconsidered by all of to be comprehensive in scope, transparent in conduct the stakeholders involved during the process of and defensible in its analyses. implementation. The presentations after lunch, based on the com- 2.1 A WORLD COMMISSION missioned papers, reinforced many of the morning's The most important achievement was the agree- concerns but also advanced the discussion by sug- ment to establish, by November 1997, a two-year gesting ways in which they should be addressed in World Commission with the following terms of refer- the next phase of work. Moving into the breakout ence groups, the discussions quickly began to pick up the various proposals and build on them in addressing - To assess the experience with existing, new and the three assigned questions. By the end of the after- proposed large dam projects so as to improve (exist- noon, as participants walked around to review the flip ing) practices and social and environmental condi- charts showing the results of each group's work, and tions; Summary Report of the Workshop 9 LARGE DAMS: Learning from the Past, Looking at the Future 9 To develop decision-making criteria and policy and private and public sectors. Most members would and regulatory frameworks for assessing alternatives be part-time, although one to three commissioners for energy and water resources development; could be full-time. o To evaluate the development effectiveness of A consultative group would be established and large dams; comprised essentially of the participants who attend- ed the workshop, plus others invited by the a To develop and promote internationally accept- Commission (for example, NGOs, the European able standards for the planning, assessment, design, Union, the Organization for Economic Cooperation construction, operation and monitoring of large dam and Development, governments, multilateral develop- projects and, if the dams are built, ensure affected ment banks, and other government and private peoples are better off; financing agencies) to ensure effective and balanced representation of all stakeholders and key actors. As the name suggests, the group would be used as a sounding board for ideas from the Commission. Members of the group would join task forces or work- ing groups and recommend specialists who might be involved. The Commission would be supported by a small Secretariat of full-time profes- sionals who might be provided at least in part by secondments. One possibility would be for the Secretaria t to operate under the auspices of the IUCN. The Commission and Secretariat would operate through stuily groups, hearings, task forces, contracted studies and so on. The overall process would Two days of discussions and working groups break new ground on how to involve stakeholders in a full and mean- move forward on the large dams issue. ingful way throughout. Wherever possi- ble, it would work with other organiza- tions that have appropriate expertise and 2 To identify the implications for institutional, poli- already have relevant studies underway. Early in its cy and financial arrangements so that benefits, costs work the Commission would confirm that its pro- and risks are equitably shared at the global, national posed program of studies and expected products and local levels; and meet decision-makers needs. A To recommend interim modifications-where The products from the Commission's work would necessary-of existing policies and guidelines, and include recommendations on policies, standards, promote "best practices." guidelines, best practices and codes of conduct to ensure the affected parties are better off as a result The Commission would be composed of five to of building and operating large dams. The results eight members, including an internationally recog- would also include an understanding of the accuracy nized chairperson. The members would have appro- of predictions of costs and benefits used in the dam priate expertise and experience and would be widely planning process and of their overall development regarded as having integrity and being objective, effectiveness and the need for restoration and repara- independent and representative of the diversity of tion where necessary. perspectives including affected regions, communities 10 Summary Report of the Workshop LARGE DAMS: Learning from the Past, Looking at the Future The Commission would require a budget that is including demand management, a run-of-the-river adequate to ensure its independence and to fulfill its hydropower scheme, conjunctive use of surface and mandate. Views were variously expressed that this groundwater, and development of traditional local implied a budget of several million dollars even if var- water management and agricultural practices. ious forms of in-kind contributions were made. Overall, the choice of projects should be put in the larger contexts of sectoral (e.g., energy, water) and 2.2 THE PROPOSED AGENDA national and regional development plans and strate- Through the discussions in the breakout groups gies along with international commitments (e.g., U.N. and drawing on all the background materials, it was Framework Convention on Climate Change). The recognized that the specific items needing to be put final choice should be the one with maximum accep- on the agenda for the World Commission are funda- tance, or least regret. mentally determined by an evolving paradigm of large dam development. Ideas about development in Implementing the evolving paradigm will not be general and dam construction in particular have without its costs. The information needed for sound begun to shift over the past decade. In looking at the multiple criteria decision-making are far higher, the future of dams it is necessary to learn from the past methods are far more complex, the coordination is by reviewing the success or failure of earlier projects more demanding, and the consultative process is in the context of the situation in which they were con- more time-consuming. Managing the process will ceived, designed and built and to develop guidelines involve new skills for the decision-maker to learn, and for the future based on those lessons and the con- new manuals and guidelines are certainly required. cepts, expectations and reality of an emerging new Indeed, new decision-making processes and policies era. will be required when it is recognized that altering ecosystem functions is viewed as much as a social In the past, development issues were often consid- choice and philosophy as a simple technical option. ered sector by sector in isolation. For example, a min- istry of agriculture would identify a single priority for It was in this context of the evolving paradigm that development: namely, the need for more food. The proposals were developed for the specific items that belief in human domination of nature and unquestion- should be on the Commission's agenda (i.e., the criti- able benefits of large dams meant that often only a cal advances needed in knowledge and practice for single option was considered. The dam would be the assessment and development of large dams, and designed on the basis of narrowly defined least eco- the methodologies and approaches required to nomic cost. achieve these advances). In Boxes 5 and 6 the items that were identified are listed for the three issue In recent years a new paradigm has begun to areas considered by the breakout groups: engineer- emerge. The development process should be based ing and economic/financial issues, social and stake- on analysis of multiple criteria, including food, water, holder issues, and environmental issues. Further energy, foreign currency, health, employment, human details on each of the listed items, based on the notes rights, equity, sustainable use of natural resources, from the breakout groups, are summarized in and conservation of natural ecosystems and their Appendices Al and A2. genetic stocks. The analysis should involve consider- ation of the long-term and quantitative and qualitative 2.3 IMPLEMENTATION STRATEGY values. Decision-making should be more transparent Agreement was also reached on an implementation and accountable and made through consultation with strategy to take effect immediately at the end of the multiple stakeholders, including local communities, workshop. David McDowell, director-general of numerous authorities and government departments, IUCN, agreed to establish by May 31, 1997, an industry and NGOs. The role of many stakeholders Interim Working Group (IWG) composed of IUCN should also change, with more development being and World Bank staff. The IWG would draw on par- financed by the private sector, communities becom- ticipants in the workshop for advice and support in ing empowered, and action being taken through part- establishing the Commission. The chairperson for the nerships. Choices should be made by considering Commission would join the Working Group upon multiple and integrated development options, such as selection, and the earlier, the better. Summary Report of the Workshop 1 1 LARGE DAMS: Learning from the Past, Looking at the Future Box 5: Critical Advances Needed in Knowledge and Practice (See Appendix Al for elaboration of each item) Engineering and economic/financial issues * Dam engineering-Structural design and operation to meet ecosystem objectives * Competitive markets-Trade-offs of financing by development agencies vs. private sector * Internalizing externalities--Incorporating all impacts of the dam in cost-benefit analysis * Discount rate-Relationship between discount rate and sustainability of projects * Technical information-For example, water needs of downstream ecosystems * Decommissioning of dams-Anticipating the need to pay for it *Appropriate technology-Suited to local skills base * External impacts of hydro-power generation and other technologies (e.g., greenhouse gases, or GHGs) * Technical flexibility-For example, to release sediment or artificial flood releases when needed Social and stakeholder issues * Definition of affected groups-Who are the stakeholders? * Appropriate level of participation-Stakeholders involved at all stages * Transparency in decision-making-Must be seen to be fair * Equitable sharing of costs, benefits and risk-Allow all stakeholders to contribute e Health-Risks of diseases such as rift valley fever and schistosomiasis * Indigenous knowledge systems-Make use of traditional technoiogies and systems Environmental issues * EIA policy-To include a comprehensive evaluation of alternatives * EIA process-To include environmental health and social well-being * EIA financing and responsibility-Who pays for restoration and reparation? * EIA quality control and consistency-ElAs should be independent * Participation in ElAs-Decisions made through discussion and information sharing * Biodiversity, ecosystems and hydrology-Water requirements of ecosystems Cross-cutting issues * Multidisciplinary approaches-Involving many specialists, from engineering to sociology *The scale of planninge.g., integrated river basin management *Monitoring and evaluation--Large dams projects should have a long horizon By the end of October. the 'Working Group would 3.0 EPILOGUE establish full terms of reference for the Commission and its Consultative Group, membership of the Immediately after the workshop, David McDowell Consultative Group, membership of the Commission, wrote to James Wolfensohn to report on the outcome capabilities and location of the Secretariat, an outline and to initiate the implementation strategy (see corre- program and budget for the Commission and spondence in Appendix B3). In his response, Mr. Secretariat, a funding strategy for the two years of Wolfensohn expressed his support for the next steps the Commission, and a date for the first meeting of and identified the senior members of the World the Commission and Consultative Group. Bank's staff who would participate in the Working Group to advance the implementation strategy. In early June, the first meeting of the Working Group was held in Washington, D.C. It was co- 12 Summary Report of the Workshop LARGE DAMS: Learning from the Past, Looking at the Future Box 6: Methodologies and Approaches for Assessment (see Appendix A2 for elaboration of each item) * Definition of terms-e.g., environment and sustainability, overexploitation and safe yield *Trade-offs-Between financial performance and impacts on people and the environment * Valuation of non-traded goods and services-e.g., ecosystem functions * Discount rates-Research on the relationship between discount rates and project sustainability * Definition of stakeholders-Methodologies for defining stakeholders * Stakeholder involvement-Guidelines on how to involve stakeholders * Institutional capacity development-e.g., training needs assessment workshops * Ethics-Guidelines on ethics and tribunals of inquiry to hear grievances. * Ecosystem approach-Interaction and interdependencies between all elements * Implementation of treaties and conventions-e.g., Ramsar or Biodiversity Conventions * Proactive EIA approach-To evaluate alternative proposals * Water requirements of ecosystems-Such as wetlands * Conservation of biodiversity-Procedures for assessing and conserving threatened species • Planning-e.g., multiple criteria analysis * Demand management-Methodologies for reducing water demand 3 Scale-How does the scale of a dam relate to impacts, decentralization and privatization? * Private sector-How does the private sector value risk? - Responsibilities-Who pays for data collection, impact evaluation and decommissioning? X Interdisciplinary teams-Methodologies for collaboration between specialists Anticipating the time and budget constraints that the Commission would face, the group made suggestions for employing a carefully selected set of case studies in addressing the above issues. The set would be chosen to include possibilities for assessments of projects which are: * Existing, under development and proposed (i.e., learning from not only assessing past experience but also experimenting in ongoing design, development and operations); * Different in their biophysical and socioeconomic contexts (i.e., understanding the implications of the range of different envi- ronmental and developmental situations in which large dams are built); * Differing in their primary purposes (i.e., examining the opportunities and constraints associated with flood control, water supply, hydroelectricity production and various mixes of these purposes); * Differing in their sizes and technologies (i.e., learning what the trade-offs are between large and small dams and the opportunities associated with appropriate and emerging technologies); and * Successes and failures (i.e., learning from what works and what doesn't). In selecting, designing and carrying out such case studies and assessments, the Commission would put into practice the principles that define the new paradigm and would be expected in any future development of large dams. chaired by George Greene (IUCN) and Andrew Steer it can be held in conjunction with the Seventh (World Bank) and resulted in agreement on the ele- Stockholm Water Symposium. ments of a work plan for meeting the goal of estab- lishing the Commission by November. Members of The Swiss Agency for Development and the Reference Group are being kept informed of Cooperation, under its agreement with the developments and involved in the discussions by Operations Evaluation Department of the World Internet and fax. The next meeting of the Working Bank, agreed to contribute funding to the initial costs Group, to include some of the Reference Group mem- of this interim process, while additional support bers, was scheduled for the middle of August so that would be sought from other contributors. Summary Report of the Workshop 13 LARGE DAMS: Learning from the Past, Looking at the Future Goldsmith, E., and N. Hildyard, eds., The Social and Environmental Impacts of Large Dams (Wadebridge: Wadebridge Ecological Centre, Cornwall, U.K., 1984). International Commission onl Large Dams (ICOLD). World Register of Dams. Paris, 1988. International Water Power and Dam Construction Handbook (Sutton: IWPDC, Sutton, U.K, 1995). Liebenthal, A., et al. "The World Bank's Experience With Large Dams: A Preliminary Review of Impacts" (Washington: Operations Evaluation Department, The World Bank, 1996). McCully, P., Silenced Rivers: The Ecologv and Politics of Large Dams (London: Zed. Books Ltd., 1996). "World Bank Lending for Large Dams: A Preliminary Review of Impacts," OED Precis No. 125, World Bank, 1996. 14 Summary Report of the Workshop LARGE DAMS: Learning from the Past, Looking at the Future PART II OVERVIEW PAPERS LARGE DAMS: Learning from the Past, Looking at the Future ENGINEERING AND ECONOMIC ASPECTS Of Planning, Design, Construction and Operation of Large Dam Projects PHOTO COURTESY OF THE WORLD BANK Men working on the service spillway at the Tarbela Dam, Pakistan By ENGELBERTUS OUD and TERENCE C. MUIR, of Lahmeyer International GmbH Paper Contents Considerations During the Operation Period ...................... 32 Definition olarnnge D............................ 19 Rehabilitation and Upgrading of Trends in Planning .1............. l9 Existing Dam Projects .33 Conflicts Between Economic Long-Term Trends ............ 33 and Financial Planning .............. 22 Summary and Conclusions .34 Optimization of Projects Acknowledgements ............. 34 in System Context ........... 24 Bibliography .34 Trends in Design ........... 28 Annex One .35 Construction ........... 31 Annex Two .37 Mr. Engelbertus Oud heads the Water, Power and Land Development Department of Lahmeyer International GmbH, the largest German consulting engineering company. Dr. Terence C. Muir joined Lahmeyer International in 1973 and has been team leader of numerous nation- wide water resources and hydropower development projects. Engineering and Economic Aspects of Planning, Design, Construction and Operation 17 LARGE DAMS: Learning from the Past, Looking at the Future this paper summarizes the lessons learned and ENGELBERTUS OUD trends in the planning, design, construction and oper- Mr.777777-- E tteaL ation of large dam projects, specifically addressing Mr. EngelbeVtus Oud heads the Water, Power and Land engineering and economic aspects. Environmental Development Department of Lahmeyer Internationa l GmbHthe and social issues are addressed in two accompanying largest German consulting engineering,company. Mr Oud joined papers, which were also presented during the work- the firm in 1975 and has been team leader of a considerable shop. number of hydropower and power system development studies. Currently he is project manager of the study of alternatives'for This paper summarizes the main trends for large the controversial 680 MW Nam Theun 2 hydropowerT project in the dam projects as follows: People's Democratic Republic of Lao. The study, carried out for the Lao government under the auspices of the World Bank, plex Increased understanding and awaireness of com- includes a strong component of public consultation and participa- arplex technical, environmental and social issues that tion. : h;;;;:;0;X0::u0 are inherent to large dam projects, and realization f f 0 ;on. \ 0 i f D that the development of large dam prcjects involves a Engelbertus Oud trade-off between the benefits gained against losses. Lahmeyer International GMBH Lyoner Strasse 22, POB 710651 ; Increased awareness that environmental sustain- D-60496 Frankfurt Am Main 0 t : fi ;000; 0 X ability and high discount rates are in conflict. Germany : Increased public scrutiny of large dam projects Fax: (0049) 69-6677-414 and increased public interest in large dam projects as E-mail. Bert Oud@Gompuserve,com t ; 0 00: $0 0 :0 ;;\04 a result of campaigns by non-governmental organiza- E-mail: Bert_Ou@Compuserve.comtions (NGOs). TERENCE C. MUIR S Increased public consultation in i(dentifying and screening of projects. Terence C. Muir joined Lahmeyer lniternational in 1973 and has been team leader of numerous nationwide water resources and X Increased private-sector financing and, as a con- hydropower development projects in countries inf Asia, Africa and sequence, drive to cut costs and the duration of South America. At present he is the project manager of the design and construction, and to reduce financial Hydropower Development Plan for Lao POR, executed as part of risks. the European Union/Laos Cooperatin Program. A number of technological developments which Note: This paper was commissionedl by IUCN from the authors make the planning and construction of large dam pro- for the joint IUCN The World Conservation Union/World Bank jects more efficient. workshop. Any personal opinions should in no way be con- T r V \ W ~~~The recognized need for independent monitor- strued as representing the official position of the World Bank ing and control of project cost, dam safety and envi- Group or IUCN. ronmental and social impact during all phases of pro- ject design, construction and operation ABSTRACT o Increased need for safety inspection and envi- ronmental management of existing dam projects. Large dams have become the focus of an intense worldwide debate. After publication of the August Increased interest in modernization and upgrad- 1996 report on the World Bank's experience with ing of existing schemes. large dams, the World Conversation Union (IUCN) and the World Bank organizecl a joint workshop in April 1997 to move forward the debate in terms of a new set of principles to guide future decision-making about large dams. As a contribution to the workshop, 18 Engineering and Economic Aspects of Planning, Design, Construction and Operation LARGE DAMS: Learning from the Past, Looking at the Future CAVEAT: The authors have specifically been than 15 million cubic meters; reservoir volume of asked to focus on engineering and economic issues. more than 25 billion cubic meters; and installed This does not imply that they believe that these capacity of more than 1000 MW. There are more than aspects can be seen in isolation, as if there would be 300 dams of this category worldwide. Large dams are no interface with environmental and social issues. principally required only for major power production, The contrary is true, as environmental and social irrigation and, to a lesser extent, water supply issues are increasingly affecting the selection, plan- schemes. ning and evaluation of large dam projects, and the authors wish to register that they wholeheartedly support this trend. 2. TRENDS IN PLANNING THE OLD APPROACH 1. DEFINITION OF LARGE DAMS Until recently, the terms of reference for planning The International Commission on Large Dams studies for large dam projects generally required a (ICOLD) defines "large darns" as dams with a height future demand (water, power) to be covered in a of 15 meters or more. If dams between 10 and 15 least-cost manner. The planning procedure was to meters high have a crest length over 500 meters, a develop alternative technical solutions, to select the spillway discharge over 2,000 cubic meters, or a least-cost option, and to mitigate the environmental reservoir volume of more than 1 million cubic and social impact of the plan or scenario to a mini- meters, they are also classified as large dams. Using mum. 'Least-cost' was defined as the minimum pre- this classification, worldwide there are about 40,000 sent worth of investment, operating and maintenance such large dams and an estimated 800,000 small costs over a specified planning period, applying real- dams. term discount rates of 10 to 12 percent (in developing countries), and often ignoring external costs associat- The International Journal on Hydropower & Dams ed with control and mitigation of the environmental uses the term "major dam project" for projects that and social impacts. fulfill one or more of the following criteria: dam height of more than 150 meters; dam volume of more In the industrialized countries some form of public discussion and feedback on design has been ensured through legislative and regu- latory processes involving hearings. In the developing Development of Large Dam Projects countries, however, deci- OLD PLANNING PROCEDURE sions on development options have generally been taken in isolation by govern- Project Identification ments and utilities together by team of engineers wihteoghr and economists with the international fund- ___________ing agencies, following the Study of Alternatives & ; previously mentioned least- Techno-Economic Prefeasibiity, and ______________cs prah Optimization Feasibility Design cost approach. I i The reaction to this tech- Environmental Impact Environmental and no-economic planning Assessment Social Impact (EIA) Mitigation Measures approach has been the call for a more 'sustainable devel- Project Funding and opment' and to the formation Project Implementation of interest groups that want- ed more attention to be paid Lahmeyer international to non-technical and non-eco- Engineering and Economic Aspects of Planning, Design, Construction and Operation 19 LARGE DAMS: Learning from the Past, Looking at the Future nomic issues. For a considerable time these groups, autocratic rulers used to commandeering lower generally NGOs, were seen as project opponents ranks, has led to numerous flagrant violations of seeking to obstruct development. human rights during the planning, construction and operation phase of large dam projects, which are typi- The more stubborn the reaction of the technocrat- cally built in remote areas rather than in urban areas. ic world to this opposition, the more fanatic and spec- The issue of appropriate Operational Directives of the tacular became the opposition of the NGOs. This has World Bank addressed this problem and has been been, of course, ideal food for the media and opposi- instrumental in better protecting the rights of minori- tion politicians, and the result has been that many ty groups. projects, in particular large infrastructure projects, stalled during the planning process as decision-mak- THE NEW APPROACH ers and/or funding agencies did not want to burn Planning should avoid unnecessary expenditure their fingers. Painful examples from the recent past and effort on projects that in the end will not be car- are the withdrawal of the development banks from ried out. Planning procedures must thierefore be large irrigation projects (India) and hydropower pro- geared toward maximized acceptance (or minimized jects (Nepal). regret). Other large projects were implemented in spite of To ensure broad acceptance of projects or system considerable opposition but turned out to be no development alternatives, it is important to present longer the least-cost project as a result of costly and discuss as early in the planning stage as possible delays and modifications during the implementation all the pros and cons of competing sce narios with phase. Nuclear power plants are a perfect example in interested parties, including the persons directly this respect. affected by the project and NGOs, taking into account technical, economic. financial., environmen- Disregard for civil rights of primitive people living tal, social, institutional, political and risk factors. The in the forest and rural communities by those in interested parties should jointly formulate a limited charge of decision making, often a clique of upper- number (say, five to eight) of alternative plans to class urban families and/or insensitive military or cover the future demand. These plans should be diverse with respect to their impacts and should include plans featuring demand-side Development of Large Dam Projects measures (such1 as promotion NEW PLANNING PROCEDURE of energy-saving lamps in the power sector or drip irrigation in the agricultural sector) as Project Identification well as the no-project option. in integrated river basin r-…__ develo jent Dstuy Subsequently, the necessary I I ~~~~~~~ ~Project Design byi [Multi-Attribute Analysl Interdisciplinary Team, studies should be done to of differentproject _ technical design quantify and evaluate the alternatives by Public Consultaton to incorporates measures alternative plans in sufficient interdisciplinary team, help identify preferred to minimizealentvpasinufcet induding preliminary Project alternative r environmental and detail to be able to outline the impact assessment social impact cneune fec ln 0 _ :! W n \ ~~~~~~~consequences cof each plan. I Workshops should then be EIA and EnvironmentI I organized in which all inter- 1 DevelopmentPIan ested parties can discuss the results and trv to reach con- I X \d Project Funding and X sensus about the best plan to Lahmeyer Inte rnabnal Project Implementation be adopted for implementa- Lahmeyer International l0:i .i \ut jX X it j tion. 20 Engineering and Economic Aspects of Planning, Design, Construction and Operation LARGE DAMS: Learning from the Past, Looking at the Future It is beyond the scope of this paper to describe this ment expenditures, as has happened with several process of consensus-seeking in great detail. One large dam projects in the recent past. method would be for interested parties to first receive a fairly comprehensive presentation of the THE ROLE OF PRIVATE DEVELOPERS results of the study of alternatives, then split up into With few exceptions, the development, ownership relatively small specialist working groups to discuss and operation of large dam projects in the past has and give ratings to each of the project alternatives been the responsibility of governments and national with respect to, say, economy, environment, impact utilities. In industrialized countries such projects on local population, etc. The expert group on environ- were financed from internal sources or balance sheet ment, for example, would first rank and then assign borrowings; in developing countries concessionary weights to possibly numerous environmental factors capital from multilateral and bilateral agencies was to be considered. These weights would be uniformly used. applied to each of the competing alternatives. Then the individual members of the working group would In the last ten years, irrevocable changes have be asked to give scores to the various factors under occurred in this regard. Governments everywhere consideration. The scores would be multiplied by are experiencing greater difficulty in raising finance weights and then summed to arrive at an overall rat- for large infrastructure projects. This is particularly ing for environmental issues for each alternative. true of power sector investments which are increas- ingly being perceived as commercial. In developing The working groups would also be asked to verbal- countries there has been an accompanying shift in ly describe their main findings. Thereafter, the par- concessionary lending priorities from physical infra- ties would jointly look at the trade-offs between the structure to social infrastructure. With an accelerat- overall ratings of major disciplines. Inferior (Pareto ing demand for power-sector investment capital, the sub-optimal) and other unacceptable solutions would private sector has been encouraged to fill the void be discarded (e.g., a hydropower option that would through private-sector financing and ownership. produce power at twice the cost of an alternative ther- mal power plant). The remaining range of acceptable In summary, the increasing role of private sector choices would be discussed until most parties can development leads to: agree on the alternative proposed for implementation. The entire process should be controlled by an inde- Emphasis on financial project efficiency, pendent and unbiased facilitator who however should resulting in reduced availability of time and funds be able to broadly understand the type of project or for planning, investigation and construction work, projects under discussion. and also an emphasis on cost-cutting operation and maintenance procedures; This would be a very democratic approach but may be rather novel and even considered unaccept- - Externalization of the indirect costs associat- able in some countries, since decision-making is car- ed with the project to the maximum extent possi- ried out at an autocratic political level without direct ble; consultation with the people affected. Thus, there Levying of water (or power) tariffs that guar- may be limits as to how open this kind of workshop antee an attractive financial internal rate of return can be made in practice. The development banks on the investment, with these rates typically being should nevertheless pursue a policy that ensures higher than those projects financed conventional- maximum participation of project stakeholders, and if ly in the past from grants and concessionary this is altogether rejected by a particular government, loans; and then the international funding agencies should refrain from becoming involved. Off-loading of as much risk as possible onto other parties, particularly onto the government. The major difference from previous planning practice It is clear that there is a strong need for adequate would be the attempt to reach a consensus of all par- regulation and control in order to maintain standards ties concerned at as early a stage as possible, thus of safety and workmanship, guarantee reasonable tar- avoiding last-minute surprises after years of develop- iffs and government benefits, avoid government Engineering and Economic Aspects of Planning, Design, Construction and Operation 21 LARGE DAMS: Learning from the Past, Looking at the Future exposure to undue levels of financial risk, and miti- including elaboration of environmental and social mit- gate environmental and social impacts. igation and compensation measures; Private developers want to limit upfront planning a Financial closure (arrangement of project fund- and preparation cost to a minimum and will try to ing and final tariff negotiations); and shift as much of the costly clesign work to a point in X Detailed design, tendering and project construc- time where it has secured financing of the scheme. tion, and implementation of socioenvironmental Financial closure requires an accurate cost estimate action plans. and time plan for implementation. Public opposition could delay or even halt the implementation of a pro- The change to private-sector development poses ject and it is, therefore, in the interest of a developer several other questions. Will governments concerned to select a project that can be assured of broad have the ability and resources to negotiate appropri- endorsement by the public but which may not neces- ate terms and conditions with a fair sharing of bene- sarily be the least-cost option. This can only be fits and risks? Will developers, who are increasingly achieved through public consultation in the planning from countries without an established history of envi- process as described above. ronmental protection, recognize the need for ade- quate social and environmental mitigation measures? Particularly in developing countries, private devel- Will there be sufficient time and investment to identi- opers see themselves exposed to major political risks, fy key problems or fatal flaws? for example, the threat of nationalization or difficul- ties in converting local currency revenues into the It goes without saying that the projects to be devel- hard currencies needed to repay the loans. The inter- oped by the private sector must still be embedded national development agencies may be willing to into an overall water resources development plan for insure the developers against that sort of political the country concerned and that the development of risk. This implies that the agency's operational direc- this plan similarly requires participation and consulta- tives need to be followed, particularly those dealing tion of the public on a wide variety of issues. Here with environmental and social concerns. The direc- government authorities and international develop- tives of the international development banks also call ment agencies can and should play a major role. for public participation and consultation. The emerging planning process for schemes fund- 3. CONFUCTS BETWEEN ECONOMIC ed by the private sector, but with involvement of the AND FINANCIAL PLANNINGi international development banks, appears to be as fol- lows: Economic planning has begun to internalize exter- nal costs in the planning process. External costs are m Formulation of a limited number of diverse pro- economic costs borne by society, but are not reflect- ject alternatives number (say, five or six, one being ed in tariffs. A good example here are penalties for the no-project option); emissions from thermal plants, such as CO2, causing a Rapid analysis of these alternatives, considering global warming; SO2 and NOx; causing acid rain; and technical, economic, financial, environmental, social, PM10, causing respiratory illnesses. External costs political and risk factors; associated with large dam projects could, for exam- ple, be the loss of a major waterfall, the loss of biodi- a Election of the best overall solution through a versity in the area inundated by the reservoir, the dis- consensus-seeking approach that involves all project appearance of migratory fish in the river due to the stakeholders, including the people affected by the construction of the dam, CH4 emissions from irrigat- project as well as government and non-government ed paddy fields, which lead to increased global warm- organizations; ing, and so forth. The values that are to be attributed o Preliminary arrangements for project financing to the various external factors are not always clear in (memoranda of understanding with banks and devel- the absence of established procedures. It would be a opment agencies, tariff negotiations); big step forward if the international development E Project optimization and feasibility design, banks would agree on and publish acceptable proce- 22 Engineering and Economic Aspects of Planning, Design, Construction and Operation LARGE DAMS: Learning from the Past, Looking at the Future dures and typical values for Development of Large Dam Projects the most important externali- PLANNING CONTEXT (1) ties. The trend toward private- sector financing will inevitably io lead to a reduced focus on Goals economic optimality and . greater focus on financial via- Sustainable Use Increased bility. In other words, the of Natural Resources Human Welfare results of financial analysis will have greater impact on decision-making by the pri- Cover Social Needs Environmental Protection Cover Physical Needs vate sector than the results of Health Biodiversity ConservationWater (socio-) economic analysis. Emucetion Food Targeted rates of return for Freedom Family Planning Shelter the private sector are, for pro- I jects in developing countries, Demand SWe Measures often in the range of 15 to 20 Loss Reducton percent, equivalent to 12 to 17 Supply Side Meas percent in real terms, still Lahmeyer international higher than the 10 to 12 per- cent economic discount rate (opportunity cost of capital) which the development banks have typically used for the planning of major infra- those dealing with global warming-a discount rate structure projects. (social preference rate) of 0 to 3 percent per year is used. A real term rate of 3 percent per annum is inci- High discount rates do not support sustainable dentally also the real term return on U.S. dollar gov- development, as the long-term damages or costs asso- ernment bonds, which in a way should reflect the per- ciated with a project are simply discounted away. The ceived "value of the future." cost of decommissioning a nuclear power plant, for example, is in the same order of magnitude as the It appears that it is high time to reconsider the dis- construction cost, but accrues only after 30 to 40 count rate and the inclusion of external costs. A solu- years of operation. If discounted at 10 percent per tion the authors favor, but is flatly rejected by the annum, the decommissioning cost becomes totally World Bank, would be to select and "optimize" pro- irrelevant, equivalent to only a few percent of the jects (not just large dams, but all projects with major total construction cost. Similar examples for water socioeconomic and environmental impact) based on resources projects are the increase in soil salinity and the social rate of preference, say 3 percent per reduction of soil fertility due to irrigation, the annum, explicitly considering external costs and ben- increased use of fertilizers and the effect on ground- efits. This would be a major step toward achieving water quality in the long term, long-term sustainable project concepts and would Moreover, financial analysis considers only mone- stimulate the use of water conservation measures as tary cash flows, and external costs are not taken into against the construction of oversize dam projects. account, which again jeopardizes sustainable develop- Once projects have been formulated, they can be ment. If, for example, certain fish species become adopted by the government or private sector for extinct in a river downstream of a major dam, there is implementation. As a result of the low 3 percent dis- normally no financial penalty for the project develop- count rate used to formulate the scheme, financial er, but costs are borne by society as a whole. support may be needed to make it financially viable, and here the international donor community can play In several environmental studies-for example, an important role. Engineering and Economic Aspects of Planning, Design, Construction and Operation 23 LARGE DAMS: Learning from the Past, Looking at the Future 4. OPTIMIZATION OF Development of Large Dam Projects PROJECTSOIN PLANNING CONTEXT (2) Large dam projects, partic- Cover Physical Needs ularly those producing Water hydropower, need to be opti- Food mized in a system context. Shelter First, this means that in selecting the best dam sites, it I - should be kept in mind what DEMAND SIDE CONVEYANCE SUPPLY SIDE the other developments in the Re-Use of Water Reduce Techn. Losses Optimal Exploitation Facilities river basin can be and how Drip Irrigation water leaks New Production Facilities High Yield Crops -food storage facilities -groundwater extraction these affect each other. High Efficiency Electrical Goods - electric network losses - river and take water extraction Second, it means that the pro- Public Awareness - dams (incl. multipurpose) Cost Covering Tariffs Reduce Theft - hydro and thermal powerplants ject should be optimized as Family Planning - altemative eaergy powerplants part of the overall power sys- -_irrigation ar__ as tem and not just be compared - minimum social and environmental impact to a thermal plant of a particu- lar type, which would often lead to projects that are too large. The systems analysis X Planning models that have become financial requires the use of complex hydrothermal operation rather than economic models, able to simulate com- models, and the analysis of a range of alternative mercial arrangements and to predict the income, power system expansion plans-with and without the debt service and profit of individual plants extracted project, with and without demand side management from the data generated by means of complex system measures-needed to select the overall best plan. operation simulations; and The trends in system expansion planning are: N System operation models extended beyond the X A move from single-objective toward multi-objec- reservoirs to include the rivers and groundwater tive models, as well as a move away from determinis- areas affected, considering both water quantity and tic least-cost optimization toward detailed multi-objec- water quality. tive simulation. These detailed simulation models produce an array of useful data, for example thermal PROBABILISTIC INVESTMENT ANALYSIS plant emissions, risk indicators, employment figures AND AVOIDANCE OF RISK and so on, which are relevant in selecting the best The likelihood that a project becomes an economic overall plan; or financial success depends to a large extend on the a Increasing use of chronological models even for following factors: probability of cost overrun, proba- l Inreainguseof hroologcalmodls venfor bilit of delays durnn construction availabilit and long-term planning, using hourly time steps rather y g ty than seasonal load duration curves,allowivalue of water, robustness of the water and/or power than seasonal load duraton curves, allown demand forecast, and probability of difficulties during detailed simulation of system behavior; the operation period. 0 Improved simulation of the behavior of IPP pro- An important consideration is to assess to whom jects, which try to exploit the power purchase agree- the risk actually occurs. Governments and developers ment and are not necessaiily operated in merit order; can insulate themselves from risks by lump-sum fixed a Models increasingly able to simulate power pool price contracts with adequate liquidated damages arrangements, where several utilities cooperate in provisions. The turnkey contractor then bears the full providing power to their consumers; risk, reflected in a higher turnkey contract price, of course. 24 Engineering and Economic Aspects of Planning, Design, Construction and Operation LARGE DAMS: Learning from the Past, Looking at the Future PROBABILITY OF COST OVERRUN AVAILABILITY AND VALUE OF WATER The availability of modern software for the dimen- Actual flows may deviate from the mean flow, and sioning, costing and evaluation of hydro projects the start of commercial operation of the project may enables rapid answers to questions such as: coincide with a cluster of dry or wet years. The fol- lowing procedure allows such effects to be consid- What is the effect on the total project costs if ered in the analysis. The hydrologist could, for exam- tunnel X is not in good rock for 80 percent of its ple, estimate that there is a 5 percent probability that length but, say, only 50 percent, and the remaining the mean flow will be 10 percent lower than the esti- part is in poorer rock classes? mated value and a 20 percent probability that it will be 5 percent lower; likewise, there could be 5 percent What is the effect on total project cost if the left and 10 percent probabilities that the long-term mean bank excavation iS not 5 meters but 8 meters deep? flow would be 10 percent or 5 percent higher. What is the effect on project cost if the perme- Then, for the cash flow analysis, which extends over ability rating at the dam site is worse than expected? the economic lifetime of the project, the hydrological What is the effect of an increase in cement costs cycle would be superimposed over the period of cash of, say, $90 per ton to $110 per ton? flow analysis and rotated. For example, for Case 1 the operation year 2000 would coincide with hydrological By asking the various experts involved in the pro- year 1950, 2001 with 1951, etc. For Case 2, 2000 ject about the probability of such deviations from the would coincide with hydrological year 1951, 2001 adopted base case, various possible cost estimates with 1952, and so forth, thus creating as many poten- can be prepared and, assuming unconditional proba- tial outflow, or power and energy generation, series bilities, a distribution function of expected project as there are years in the hydrological reference peni- costs can be prepared, showing the probability that od. the cost of the project will exceed certain levels. These series can then be used to calculate the benefit Of course, the actual price paid for the project also cash flows. Benefits may not be just one value, but depends on bidding conditions, market conditions, could be a range of values or time-variant values-for loan conditions, inflation rate and so forth, and these example, three possible fuel price scenarios in a can be taken into account in a similar manner. power system expansion plan, each with the same probability. This process can be automated, and the PROBABILITY OF DEIAYS result would be a distribution function of the expect- DURING CONSTRUCTION ed benefits. Detailed construction scheduling is necessary in ROBUSTNESS OF WATER OR order to understand the interdependence of construc- POWER DEMAND FORECAST tion and manufacturing activities, expected weather conditions, etc. By critically examining the probabili- Benefits cannot be realized if the demand for water ties that certain activities may be subject to delay or power has not grown as fast as predicted. This (and cost overrun), a number of construction scenar- could happen because there are delays in the devel- ios can be developed, each with their own likelihood. opment of the irrigation area to be supplied by the If, for example, the diversion works would be over- project or because of a slowdown in the electricity topped with a frequency of once in 20 years, then demand growth. there is a given probability that the construction site Most power and energy demand forecast models will flood during the diversion period and that delays link in one way or another growth in electricity are to be expected. Or if major water intrusions occur demand to GDPw Since the correlation is between his- during tunnel excavation, these may also have an toric GDP and historic growth of the electricity impact on the construction schedule. demand, an error is made in using the model with These data can be superimposed over the distribu- future GDP growth targets set by the government, tion curve for project costs. which are almost always over-optimistic. The only Engineering and Economic Aspects of Planning, Design, Construction and Operation 25 LARGE DAMS: Learning from the Past, Looking at the Future thing that can result is an over-optimistic forecast of hydropower plant must start well ahead of the the electricity demand. It would be worthwhile to cor- smelter. If then there is a slump in demand for alu- relate historic GDP performance with projected GDP minum and the construction of the snielter is forecasts made in the past in order to understand delayed, there would arise the potentially unfortunate how optimistic the GDP targets of the government situation that the hydropower project is being built in have been. Then, the necessary adjustments to the the complete absence of an assured market. forecasting model could be made. With increasing welfare, the GDP-demand elasticity usually declines, Also, political risks must be considered here. It is obvious that the demand forecasts for countries or regions suffering from political instability are less DEMAND Normal robust than those for stable democracies. Have'flexible -21Forecast response' ready for i S The project benefits should be determined for a quick implermentation Pessimistic number of forecast scenarios, with each scenario such as gas tut X 3 - r 7 Forecast being assigned a probability of occurrence, and this combined cycl ~~~~~~~should be considered in the overall probabilistic investment analysis. Firmy pan cpitl inensve pojetswih lng lad hu.It is beneficial to cover at least part of the future sXch as ydlucea orcol-fre amplndemand by a "flexible response" plant, such as a gas YEAR turbine or combined cycle, with short lead time and (compared to the overall system demand) small capacity, equivalent to, say, not more thian 50 percent and this factor should also be taken into considera- to 100 percent of the expected annual growth in tion. capacity. This facilitates a flexible response to actual demand growth by deferring or accelerating these Two other factors also lea(d to over-optimistic projects as needed. Capital-intensive projects with demand forecasts. First, a too low demand forecast long lead times, such as large dam projects, should leads to power supply interruptions, which are be planned on the basis of a rather pes;simistic extremely expensive, whereas a too high forecast demand forecast, so that expensive mistakes can leads to over-investment in plant and transmission almost certainly be avoided. lines, which is less costly. It rnay therefore be better The main lesson is to make sure that capital-inten- for the forecaster to err on the high rather than low sive projects can almost certainly be used even under side. Second, in the past, power sector investments a pe c ca st pertic dcma nder largey deende on he aai]ailit of rant anda pessimistic forecast. A pessimistic demand forecast largely depended on the availability of grants and is associated with a poorly performing economy, and concessional loans to finance the capital-intensive under these conditions you cannot afford costly mis- projects needed. When oppor-tunities arose to obtain takes. financing under favorable terms or when market prices for equipment were very low, it was best to DIFFICULTIES DURING make use of the situation and to implement a project THE OPERATION PERIOD perhaps a few years earlier than actually needed by the system, given the risk that these finance or mar- Factors that could affect the economic and finan- ket conditions would be less attractive in the future. cial performance of the project during the operation Then, of course, demand forecasts needed to demon- period include: unexpected reservoir leakage (such strate that the project was "needed," and this was in as Samanalawewa, Sri Lanka); reservoir sedimenta- some instances done by predicting a (too) high tion greater than expected, or more sudden (especial- growth of the demand. ly after a severe earthquake, volcanic eruption and/or major typhoon, as happened in the Particularly dangerous are schemes that make Philippines); a landslide causing dam overtopping each other feasible, such as a hydropower project and with a resulting widespread devastation (Vaiont, Italy) an aluminum smelter. The construction of the or damage to the power facilities (Guyrnush, 26 Engineering and Economic Aspects of Planning, Design, Construction and Operation LARGE DAMS: Learning from the Past, Looking at the Future Armenia); and upstream regulation or water extrac- racy of benefit projections of water resources and tion by later constructed projects (planned dams in other types of infrastructure development. Increased Ethiopia would reduce flows to the proposed support of donor and funding organizations is neces- Baardheere project in Somalia). sary to expand existing networks, to include more sediment and water quality sampling and to automate While it is not necessary to be overpessimistic and data collection and processing. while it is not possible to assign probabilities of occurrence to such events, it is prudent to determine Comprehensive field investigations include the if such an event would have a severely adverse affect fieldwork required to determine the environmental on the project economy. and social impacts of the dam project, to identify miti- gation measures and to determine if they will work. RISK AVERSION The investigations need to be done before a final com- The results of the above analysis are distribution mitment is made to the project by the developer and functions of the present values of project costs and the government since the study could find the project project benefits. A distribution function of the bene- to be fatally flawed or to require inordinate mitigation fit/cost ratio can be produced, which would show measures. with what probability the benefit/cost ratio would fall below unity and by how much. ENVIRONMENTAL ASPECS In developed countries there is a strong trend Large schemes may have lesser relative risks than away from environmental assessment of completed small projects (because they have been subject to design, to the incorporation of environmental teams more study), but if they go wrong, they can exert a into the design team. This is in recognition of the potentially disastrous effect on even a national econo- importance of environmental matters. The environ- my. In many instances, it would be less risky to build mental team prepares the Environmental Impact a number of smaller schemes with equivalent total Assessment (EIA), which is usually subject to inde- capacity, even if this would be achieved at a higher pendent review by consent authorities, such as the overall present value of cost, as this would spread environment ministry. The independent review the risk. A series of smaller projects has a lesser process is often weak or absent in developing coun- chance of ending up as an overall economic failure, tries. which developing nations in particular can ill afford. The higher overall cost can be seen as an insurance Some argue that the EIA team should be separate premium against disastrous economic performance. to the planning and design team. This is the old way, in which the latter would complete the design, fol- THE IMPORTANCE OF COMPREHENSIVE lowed by work on environmental mitigation mea- FIELD INVESTIGATIONS sures. It is much better to incorporate the environ- Comprehensive field investigations prior to con- mental expertise into the planning and design team struction is the cheapest way of risk avoidance. from the start, where it can have its greatest influ- However, due to the cost pressure on preparatory ence, before the project design becomes firmed up. work, particularly in the case of private sector funded This way assessment and mitigation of impact schemes where the developer does not have long- becomes an integral part of the study. term expertise in hydropower projects, there is a ten- dency to economize on fieldwork. Topographic map- Independence is important for public confidence in ping, hydrological measurements and geological the environmental assessment process, and is investigations are reduced to a minimum. This is a achieved through an independent review by either worrying trend and should be countered from the the authority or, if this does not exist or does not outset. have the necessary capacity, by an independent panel of experts. The hydrometric and meteorologic networks in many developing nations have deteriorated due to lack of funds and lack of understanding that good hydrological information is fundamental for the accu- Engineering and Economic Aspects of Planning, Design, Construction and Operation 27 LARGE DAMS: Learning from the Past, Looking at the Future STANDARDS AND CHECKlISIS FOR SIU[)IES per cubic meter of dam body, less than half the price Annex I shows the minimum requirements for of conventionally placed concrete. The RCC tech- reconnaissance, pre-feasibility and feasibility studies nique enables rapid placement; dams can grow by 60 for large dam projects. centimeters (two compacted layers) per day, making it possible to build a 200-meter-high dam in less than Annex 2 shows a checklist for environmental and a year. Due to the lower cement content, less heat is social issues that need to be addressed during the developed during hardening, which is an added project planning and design phase. Environmental advantage. With RCC dams, river diversion during and social issues are also handled in two other papers construction is often in-river, rather than by means of to be delivered during the workshop. diversion tunnels. This also saves time and money. So far, only gravity dams have been built using 5. TRENDS IN DESIGIN RCC, but soon also arch gravity and arch dams will be able to make use of the same technology, using Whereas the previous section deals with trends in computer-controlled infrared or radar guided con- planning, the following sections deal, in a somewhat struction machinery to obtain the right shape. scattered way, with individual design aspects, which are almost all related to the clesire to build large dam The RCC technology has made many dams feasi- projects cheaper and faster. Some design changes are ble that in the past appeared to be economically unat- also the result of increased awareness of environmen- tractive. tal issues. Another type of dam that has gained increased Another aspect is that of the need for involvement popularity is the concrete-faced rockfill dam. Not only of independent panels of experts already during the does it have a smaller volume than a rockfill dam design phase, particularly for projects financed by the with a central core or an earthfill dam, but an added private sector, to make sure that safety and workman- advantage is that placing can continue even during ship meet internationally accepted standards. inclement weather conditions, thereby reducing the cost and the risk of delayed completion. Reservoirs. The trend is away from reservoirs that inundate relatively large areas of valuable land, Major dams are now generally built with drainage major settlements, areas occupied by indigenous peo- and inspection galleries and are well equipped with ple or areas with unique habitats. Generally, there is sensitive electronically controlled instruments to be a tendency towards smaller-size reservoirs. This able to monitor from a central control room any set- could cause problems with sediment deposition in tlement, movement and seepage. the reservoir itself but reduce problems with For smaller structures dams with geomembrane upstream aggradation and downstream degradation. lining (up to 80 meters high) and inflatable rubber Multiple use of water is becomning more and more weirs (up to 15 meters high) are becomiing accept- important. able alternatives to concrete weirs and low rockfill or Reservoir clearing before impoundment is general- earthfill dams. The maximum depth of bentonite ly seen as necessary. Remaining vegetation needs to filled cutoff trenches for controlling seepage has be burned before the last rainy season prior to gradually increased over time and now can go down impoundment to let rains wash away much of the to 60 to 80 meters. organic ashes, which would otherwise be trapped in Spillways. Spillway hydraulics are now better the reservoir and cause eutrification. understood, particularly with respect to chute aera- Dams. One of the major breakthroughs in dam tion requirements, and this has led to the use of high- construction has been the development of the roller er specific discharges, with an upper limit of about compacted concrete (RCC) dam. The lower cement 200 cubic meters per meter width of the spillway content and the mechanized placing of the concrete chute. This has had a cost-saving impact. yield a relatively low unit cost of around $30 to $40 Scouring in the plunge pool area, downstream of 28 Engineering and Economic Aspects of Planning, Design, Construction and Operation LARGE DAMS: Learning from the Past, Looking at the Future the spillway flip bucket, is also now better under- increased mechanization allows major cost reductions stood, and by ensuring a safe distance there is less in the excavation and lining of power and irrigation danger of undermining the stability of the dam. canals, with substantially reduced water losses com- pared with unlined canals. Better forecasting techniques and spillway moni- toring can lead to improved safety. Flood warning sys- Powerhouses and control rooms. There is a tems for the downstream inhabitants can help to tremendous drive to cut costs and manufacturing evacuate people in a timely manner during extraordi- time of hydroelectrical equipment. This has led to nary flood events. It is necessary to carry out flood increased employment of computer-aided manufactur- zoning along the downstream river and delineate ing, a trend to welding rather than casting turbine areas that will, with the dam in place, be subject to, runners, and to the design of low-maintenance equip- say, a once-in-ten-year or once-in-one-hundred-year ment. design flood or possible dam break. Housing in the area subject to frequent (for example, once in ten It appears that there is a trend toward enlarging years) flooding should generally not be permitted. the head range that can be covered by Francis tur- Flood warning systems should be in place in areas bines, which have a cost advantage over both Kaplan subject to the hundred-year flood and contingency (low head) and Pelton units (high head). For very plans must be available to evacuate people during large projects, unit sizes are becoming bigger to capi- more severe floods or a dam break. talize on the economy of scale. Water intakes. The water quality and water tem- Particularly for underground powerhouses, where perature in the upper 10 to 15 meters of a reservoir the setting depth of the turbines imposes little extra are normally the best. There is a definite trend to cost, Francis turbines with very high speeds can be variable-level intakes that allow water to be taken chosen, hence reducing not only the cost of the tur- from the top layer-examples are Bakun (Malaysia), bine but, even more significantly, the cost of the gen- Kaeng Krun (Thailand) and Katse-Mohale (Lesotho). erator. Intake levels were determined after extensive reser- voir water quality modeling. The release of water The increasing popularity of the electronic digital without oxygen or with a temperature very different governor and clever software makes it possible to from that of the downstream river should be avoided reduce cost and at the same time increase operational to prevent adverse effects on fish downstream of the flexibility of the power plant. dam. The digital era has also led to simpler and more Water conduits. Tunnel-boring machines are interactive project control rooms. Improved and becoming more attractive for various reasons: They cheaper data archiving, analysis and graphic presen- allow construction of tunnels and inclined shafts of tation permit quick and comprehensive statistical increasingly large diameters; they cut construction analysis of operational data and abnormal events. time (which is most important in privately financed Reregulating ponds and fish ladders. For dam schemes); and they are much more reliable than in projects with a peaking hydropower plant, it is neces- the past. The steel lining of underground pressure sry to wide a reakin g pond at t is out- shafts is increasingly substituted by much cheaper sary to provide a reregulating pond at the power out- sheafviy rinforedig concreteining,uprestressed by mlet unless the project discharges directly into a down- heavily reinforced concrete lining, prestressed by stream reservoir. Besides regulating the water so that means of pressure grouting after placement of the it can be used for irrigation and will not cause dam- concrete lining. age to downstream boating and fishery, it sometimes Underground water conduits are attractive from an has the added advantage that the water temperature environmental point of view, particularly for the can become closer to that in the natural river down- absence of aesthetic disturbances in the landscape. stream. Surface penstocks, especially those with smaller diameters, are now often galvanized in order to cut Since the outflow is regular and the head is low, downamaintersnane ncoft.n flatgalluvanidial ordeas tfish ladders may be effective (they are certainly not down maintenance cost. In flat alluvial areas, effective in high dams). Migratory fish can be lured Engineering and Economic Aspects of Planning, Design, Construction and Operation 29 LARGE DAMS: Learning from the Past, Looking at the Future into a container by means of electric inducers and same machine, immediate concrete lining with slip- transported to the river reach upstream of the man- forms. Laser-controlled earthmoving equipment facili- made lake. tates the preparation of flat irrigation areas. This high degree of automation and mechanization cuts devel- Irrigation components. Large dams are often opment costs and reduces time and cost overruns. associated with major irrigation schemes, and lessons learned in irrigation affect the planning and design of HV transmission. High voltage direct current large dams. Old irrigation systems often involved (HVDC) transmission is becoming cheaper and per- "recession"; i.e., the lands would be planted as the mits efficient long-distance transmission of large river receded after a flood and the irrigated lands amounts of power, even if the electrical systems send- would be subject to considerable variation in water ing and receiving power are not synchronized. This levels during the year. may permit the construction of large, remote hydropower stations that serve distant load centers More or less constant river levels with barrages and may encourage regional and cross border trans- and/or pumping lead to more continuous irrigation. fers of electricity. The water table rises, leading to waterlogging, and when the water table is within reach of the surface, Design tools. Enhanced finite-element analysis in, capillary action brings salt dissolved from the soil for example, rock mechanics, more detailed mathe- matrix to the surface. River water itself has a small matical models for hydraulic and water quality simu- salt content, and this concentrates in the plant root lations, and sophisticated, yet user-friendly computer- zone, leading eventually to water rising to the sur- aided design software are now commonplace and face, evaporating and leaving behind the salt, which allow the designer to work more quickly and yet is toxic to plants. Dam projects can also raise the more accurately. This is not to say that computer groundwater table in their vicinity generally, some- models replace experienced engineers, but rather times with similar result of water logging and salinity that experienced engineers are able to work more problems. efficiently and thoroughly. Modern irrigation design incorporates surface Just like the models for economic and financial and/or subsurface drainage to keep the groundwater analysis, software used during the design phase is table at a safe distance from the surface and to carry becoming more and more "probabilistic," replacing away the saline drainage water. "deterministic" models. An example is the calculation of the risk of dam-overtopping, a potentially cata- Older irrigation systems tended to be inefficient, strophic event that could trigger the destruction of especially when featuring unlined canals and surface the dam. Here various events, each with their own flooding. The general trend, especially in water-poor probability, may be superimposed on each other: the areas, is toward more efficient systems, including initial degree of fullness of the reservoir and the ini- sprinklers and drip-irrigation. Modern lining tech- tial "wetness" of the catchment, the occurrence of a niques for canals help to reduce the conveyance loss- major storm and the path it follows in passing over es involved in bringing water from the dam to the the catchment, the direction and force of the wind irrigation areas. The increased efficiencies reduce causing wave action and the likelihood that one or the stored reservoir volume requirement and the more gates of the spillway will not function. Similarly, amount of water lost to percolation rather than evapo- other factors affecting dam safety can be analyzed in transpiration from within the plant root zone. a probabilistic manner, including the effects of earth- quakes, internal erosion due to piping and/or founda- Geographical information systems (GIS), mntegra- tion problems. None of these problems in isolation tion of satellite imaginary and terrestrial survey data, may be reason for a dam failure, but in combination and highly automated design, cost estimation and bid they could be. document preparation have now reduced the engi- neering cost of large-scale irrigation systems. The choice of an "acceptable" level of risk needs Extensive use of modern construction machinery some thought. First, people are less prepared to leads to efficient canal excavation and, using the accept "involuntary" risk than "voluntar y" risk. A per- 30 Engineering and Economic Aspects of Planning, Design, Construction and Operation LARGE DAMS: Learning from the Past, Looking at the Future son who smokes may for safety reasons protest 6. CONSTRUCTION against the planned construction of a chemical facto- ry nearby, although the real risk for his health associ- Overall project management. As a result of the ated with smoking is far greater than the risk of, say, increasing cost pressures and the desire to limit a catastrophic explosion of the chemical factory. financial risks to a minimum, professional project Second, the perceived risk levels of rare events are management using modern information tools to co- generally overestimated, and those associated with ordinate and control construction time schedules and everyday dangers are underestimated. A person may to keep a check on expenditures is becoming ever happily, without even being aware of any risk, climb a more important. Increasingly, project managers are ladder to replace a light bulb, but be extremely afraid requested to have excellent communication skills and to board an airplane for an international flight. to be sensitive to environmental and social issues. However, the likelihood that he dies of an electric shock or falls off the ladder is several orders of mag- Inclusion of resettlement and environmental nitude greater than the likelihood that he dies in an mitigation. Implementation of a large dam project is airplane crash. The behavior of people depends on not restricted only to the physical construction of the how they perceive risk, rather than what the true risk scheme itself, but equally importantly includes the is. This is why, for example, airplanes are designed to successful realization of environmental and social mit- a much higher safety standard than, say, ladders. igation measures. The costs of these measures are part of the normal cost of the scheme and form part The coming decade will see a tremendous drive of the project equity. toward visualization of the project, based oIn GIS, computer-aided design and animation techniques. Influx of workers. The desire to build large This is increasingly important in an age where non- schemes faster and more efficiently, crucial for pri- technical people have to participate in the decision- vate sector financed projects, will often mean that making process. cheap but well-trained skilled labor from other coun- tries is hired by contractors. This may cause local Design work by utilities, contractors and unrest because the local population feels cheated by manufacturers. Increasingly, utilities from Western not having enough access to well-paid construction countries seek to expand internationally in the jobs. The influx of foreign workers may also lead to absence of a growing domestic market. They have the unwanted spread of hitherto unknown or rare dis- excellent but underused design teams, which can be eases in the area. Well-paid employment of local used to carry out planning and design work for over- laborers in all stages of the resettlement activities, seas projects in which the utility would like to invest. the provision of vocational training to the local popu- lation in technical and administrative skills and exten- In the era of privatization, there is also a trend for sive preventive health care can help in such cases. the detailed construction design, previously much the domain of international consultants, to be carried out Monitoring by independent panel of experts. by civil works contractors and equipment suppliers, The regular inspection of ongoing construction and particularly if they form part of the developer group. equipment manufacture as well as socioenvironmen- tal mitigation measures by an independent panel of Quality insurance by independent panel of experts is necessary to ensure that the developers, experts. Particularly in an era of increased private- contractors and equipment manufacturers follow pre- sector involvement and the resulting time pressure scribed standards and work specifications. The panel on engineering, it appears important that experienced should be able to discuss and help solve unexpected and competent engineers are recruited to examine problems of whatever nature. For privately financed the design of large dam projects. The importance of projects, independent experts should safeguard the quality assurance by a panel of independent experts interests of the government. in reviewing the design and safety of all project struc- tures during the ongoing design stage cannot be Training of operator personnel. Operator and overemphasized. administrative personnel should receive training dur- ing the construction period. This training can take Engineering and Economic Aspects of Planning, Design, Construction and Operation 31 LARGE DAMS: Learning from the Past, Looking at the Future place in similar schemes already in operation and/or of a plane, personnel of large dam projects should be on the premises of equipment manufacturers. Those trained to react decisively and correctly to any emer- who will be responsible for operation and mainte- gency situation that could possibly arise, such as pas- nance of equipment should participate in the erection sage of extreme floods that threaten to flood down- of it. Training should specifically include safety and stream settlements; malfunctioning of the project environmental monitoring activities. For projects in spillway; fire in the project control room, power sta- developing countries, it is wise to train about twice tion or access tunnel; abnormal seepagye or settle- the number of people needed to counter the usually ment of the dam or spillway; or damage to any of the high fluctuation of staff. major project structures due to landslides. Contingency plans must be available, the chain of 7. CONSIDERATIONSi DURING command must be clear, regular drills should be THE OPERATION PEIRIOD organized so that the operations staff is prepared for any eventuality, and systems should be in place and Project operation and management. Lessons tested to warn or even evacuate the downstream pop- from the past are that only a well-trained and well- ulation. Flood forecasting and, when appropriate, con- equipped project staff with sufficient authority can trolled releases of flood waters to minimize flood ensure reliable and efficient operation. In developing damages, should become the rule rather than the countries it would often be advisable to engage a exception. number of expatriate specialists, under whose guid- ance the project is run and maintained during the Outsourcing operation and maintenance. first few years of operation, while local staff are Many of the private developers of large dam projects trained and duties are progressively handed over. are not familiar with the operation and maintenance of such schemes. To ensure the highest efficiency Regular operational tasks can now be scheduled, and to reduce outage times, they outsource project monitored and administered by computer, greatly operation and maintenance to specialist companies. facilitating the project administration. Operation and maintenance manuals can be available on computer, Safety inspections. An independent panel of with on-line help functions. expert should carry out regular safety inspections. This panel should have full and unlimited access to For reservoir storage projects in particular, it is all operation data and logging devices. recommended that monthly or ten-day water releases be optimized in a strategic way to maximize revenues Monitoring environmental and social impacts. and minimize environmental impact of the project. The monitoring of environmental and social impact of The look-ahead period should be one year, and be the project is best carried out by independent organi- updated every month. Short-term operation models zations, funded by the proceeds of the d(am project. would then optimize hourly releases and, in the case Such monitoring should include regular measure- of hydropower plant, actual unit commitment. ment of water levels, flows, water quality parameters and sedimentation in the reservoir, and upstream and Catchment management and protection should be downstream of the project; observation of wildlife, seen as part of normal project operation and is of fish and fish migration, fauna and flora in and around common interest to the project developer and envi- the reservoir area; health monitoring, active preven- ronmentalists. Likewise, attention should be paid to tion of diseases and medical care for the affected pop- mandatory releases to the downstream river, the ulation; monitoring of employment and income levels trend here being away from constant releases toward of the affected population; and control cf tourism, a pattern that to some extent follows the natural sea- hunting and other activities. sonal flow cycle, albeit at a recduced discharge level, for the benefit of the downstream aquatic ecology. Every five years or so a comprehensive ex-post evalu- ation should be carried out to verify whether project Project operation during abnormal events. expectations have been met and to determine where Just as aircrews are trained for emergency landings further remedial action, to be paid by the project, is 32 Engineering and Economic Aspects of Planning, Design, Construction and Operation LARGE DAMS: Learning from the Past, Looking at the Fuiture required. Ex-post evaluations play an important role operation, additional operator training, installation of in understanding the real environmental and social warning systems, and so forth. The growing impor- impact of large dams. tance of environmental awareness, established recre- ational activities and new project duties may lead to changes in modes of project operation. 8. REHABILITATING AND UPGRADING OF EXISTING DAM PROJECTS Upgrading existing dam projects It is often possible to boost the performance of Review of safety existing projects, with relatively little incremental As existing dams grow older, it becomes increas- environmental or social impact, and to avoid, or delay, ingly important to regularly reassess their safety the construction of new dam projects. Depending on aspects. This would best be done by independent the characteristics of the scheme, the following experts, rather than by the owner's personnel, to aspects should be checked: replacing or recondition- avoid coverups of findings that might embarrass ing of existing turbines and generators in hydropow- maintenance personnel or perhaps lead to expensive er plants; adding additional turbine units to existing repairs for which the owner would be reluctant to plants; raising existing dams; diverting additional pay. water into existing reservoirs; lining, or repairing the lining of, irrigation canals, cutting conveyance losses; A thorough review of the safety aspects of existing using on-farm irrigation techniques that use less dams every ten years or so could help to avoid poten- water; improving cropping patterns on existing irriga- tially catastrophic situations, such as: tion schemes; and improving reservoir operation to better exploit the reservoir storage. The magnitude of the design flood may be high- er than previously estimated, based on new hydrolog- ical data, possibly affected by climatic change; 9. LONG-TERM TRENDS In the absence of appropriate regulations and due to a false sense of security given by the absorp- Increasing importation of water rights. The tion of major floods in a reservoir since construction growing world population and the increasing needs of the dam, housing areas and other infrastructure will make water an increasingly precious commodity. may have encroached upon the areas that would be The competition and conflicts about water will subject to flooding during the occurrence of major increase. It will become increasingly important that floods; national and international water rights are recognized As a result of aging and wear and tear, spillway and honored. gates and other outlets may be in poor condition; The poor's increasing difficulty of paying for The dam instrumentation may no longer be up- water. Increased use and competition of water will to-date or functioning properly; also lead to higher costs, and this has two main con- Piping or seepage may have caused deterioration sequences: There will be increasing emphasis on of the dam embankment, water conservation and water reuse; and with higher prices, it will become more difficult for the poor to Deterioration of concrete may have taken place. pay for drinking and irrigation water. Social consider- Cores from old gravity dams are sometimes very ations in the planning and design of dam projects degraded; sedimentation may have blocked the bot- may therefore become an important issue. tom outlet; or s Project operators and downstream community Greater use of pumped storage plants. In the leaders may not have (or may not have been trained long term, the role of renewable energy production, to use) contingency plans for emergency conditions. particularly solar and wind power, will increase. Some sort of energy storage will be required to offset the The review of safety aspects could lead to design considerable fluctuations inherent to solar and wind changes (for example, additional spillway capacity), power plants. Compensation can be provided by con- installation of additional instrumentation, changes in ventional hydropower plants, provided they have a Engineering and Economic Aspects of Planning, Design, Construction and Operation 33 LARGE DAMS: Learning from the Past, Looking at the Future reasonable size reservoir, but also by pumped stor- in planning procedures, design and operation. age schemes, which are particularly suited to even The review of EIAs, project design, construction out short-term fluctuations from minute to minute and operation by independent panels of experts will and over the day. The role of pumped storage plant is play a key role in providing suitable assurance to the therefore likely to increase in the long term. This public, owners, lenders and government. With includes underground pumped storage plants, which increasing public scrutiny of environmnental and would make use of disused lnderground mines. social impacts, the trade-offs between the benefits of Other storage devices that are getting increased dam construction and the losses will be more explicit attention are SMES (super rnagnetic energy storage), to the decision makers. battery storage and storage of compressed air in underground caverns. 10. SUMMARYAND CONCLUSIONSI This paper provides a broad overview of the In addition to those from IUCN and the World lessons learned and trends in the planning, design, Bank staff, comments on earlier drafts of this paper construction and operation of large dam projects, by David Mayo, Kevin Oldham and Peter Wilson are specifically addressing engineering and economic gratefully acknowledged. aspects. In conclusion, the main trends for large dam pro- jects seem to be: X Increased understanding and awareness of com- Gupta, P, and G. Le Moigne, 'The World Bank's plex technical, environmental and social issues that Approach to Environmentally Sustainable Dam are inherent to large dam projects; and realization Projects," International Journal of Hydropower and that the development of large dam projects involves a Dams, Issue 5 (1996). Hoeg, K, "Performance trade-off between the benefits gained against losses; Evaluation, Safety Assessment and Risk Analysis for increased awareness that environmental sustainabili- Dams," International Journal of Hydropower and ty and high discount rates are in conflict; Dams, Issue 6 (1996). X Increased public scrutiny of large dam projects Lafitte, R, "Classes of Risk," International Journal of and increased public interest in large dam projects as Hydropower and Dams, Issue 6 (1996). a result of NGO campaigns; McCully, P, "Silenced Rivers - the Ecology and Increased public consultation in identifying and Politics of Large Dams." (U.K./New Jersey: ZED screening of projects; Books in association with the Ecologist and the X Increased private-sector financing and, as a con- International Rivers Network, 1996) sequence, drive to cut costs and duration of design Muir, T.C., E. Oud and D. Mayo, "Hydropower at a and construction, and to reduce financial risks; Crossroads - Reconciling Public and Private X A number of technological developments that Objectives," Proceedings of Asia Power 1997, AIC make the planning and construction of large dam pro- Conference, (Singapore, February 1997). jects more efficient; Rivertech96 International Conference on ;-. The recognized need for independent mnonitor- New/Emerging Concepts for Rivers conference pro- ing and control of project cost, dam safety and envi- ceedings (Urbana, Ill.: International Water Resources ronmental and social impact dluring all phases of pro- Association, September 1996). ject design, construction and operation; World Bank, "The WVorld Bank's Experience with X Increased need for safety inspection and envi- Large Dams - A preliminary Review of Impacts, ronmental management of existing dam projects; and Washington D.C. (1996). E Increased interest in modernization and upgrad- World Bank (R Bacon, J. Besant-Jones and J. ing of existing schemes. Heidarian), "The Performance of Construction Cost In summary, the most important are the move to and Schedule Estimates for Power Generation private-sector financing and the increasing public Projects in Developing Countries," Washington D.C. interest in large dam projects. This leads to changes (1996) 34 Engineering and Economic Aspects of Planning, Design, Construction and Operation LARGE DAMS: Learning from the Past, Looking at the Future A General Guide to the Scope and Accuracy of Hydropower Project Studies Level: INVENTORY Level: PREFEASIBILITY Level: FEASIBILITY Objective: Establish a comprehensive Objective: Determine provisional ranking Objective: Demonstrate technical, envi- catalog of project options for the candi- of options taking into account optimal ronmental, economic and financial feasi- date reach or site(s). integrated development of river reach. bility of project. Topography: Minimum requirement aeri- Topography: Photogrammetric survey of Topography: Field surveys at structure al photography at least 1:60,000, prefer- reservoir area, altimetric precision corre- sites and compilation of 1:2,000 maps ably 1:25,000, for stereoscopic interpre- sponding to 1:5,000 up to 1:25,000 with 2 meter contours. Surrounding tation (geometric, geologic, agronomic). scales with 2 or 5 meter contours. areas at 1:5,000 with 2 or 5 meter con- Vertical control and river profiles by sur- Verification of 1:5,000 topography at sites tours. Verification of profiles, reservoir veying altimeter. Contour maps by pho- by additional cross-sections. Linkage of area/volume curves and maps prepared togrammetric interpretation covering pos- surveys (and water level gauges) with during earlier studies. sible dam sites and reservoir areas (for regional or national geodetic network. elevation/area/volume curves). Field sur- veys of cross-sections at dam, power- house and other hydraulic works for topographic maps at 1:5,000 with 5 or 10 meter contours. Hydrology: Historical discharge series of Hydrology: Verification of streamflow Hydrology: Updating of previously about 30 years, either recorded at (or series established at inventory level. derived streamflow and meteorological near) site or reconstituted by regression Derivation of design flood hydrographs at series, flood hydrographs and sediment with records at nearby locations and/or various probabilities for spillway and deposition rates by incorporating any fur- by catchment model. Probabilistic diversion works. Detailed analysis of any ther data obtained since previous study. assessment of severity of streamflow sediment load measurements made deficiency periods included in series. since inventory, for better estimation of Estimated probability curves of flood deposition rates and design of any trap- peaks and volumes, possibly from ping and separating structures. regional analysis. Evaluation of regionally Determination of stage discharge rela- available data on sediment transport for tionship at dam sites and powerhouses estimation of accumulation rates in based on staff gauge readings and dis- reservoir. Approximate assessment of charge measurements. precipitation/evaporation balances in reservoir area. Geology: Surface reconnaissance to Geology: Subsurface investigation by Geology: Comprehensive subsurface enable inferences to be made on depth geophysical methods (seismic and/or investigations by mechanical drilling at of alluviums, tectonic features, availability electrical resistivity) to yield more accu- sites of major surface structures and of construction materials, pervious forma- rate interpretation of foundation condi- underground works (tunnels, caverns), tions and slope stability at dam site and tions for major hydraulic structures. supplemented by trenches and explo- reservoir area. Possibly some subsurface Verification of previous assessments of ration adits at dam abutments, along tun- investigation by geophysical methods for slope stability and perviousness of for- nel alignments and in area of under- larger project after preliminary screening mations in reservoir area and at dam ground powerhouse. Complementary of options. site. In special circumstances, limited investigations by geophysical methods if mechanical drilling at specific sites of necessary. Detailed verification of previ- larger projects. ous evaluations of slope stability, pervi- ousness of formations and availability of construction materials. Socio-environment: Sufficient agronom- Socioenvironment: Field surveys to Socioenvironment: Verification of ic and demographic information to quan- improve inventory level estimates of prefeasibility estimates of resettlement tify loss of agricultural land and commer- resettlement and inundation of agricultur- and inundation of agricultural lands and cial enterprises, number of families or al lands and business enterprises. commercial enterprises. Detailed evalua- persons to be resettled, etc. Qualitative reassessment of potential social and tion of socioenvironmental benefits and evaluation of impacts relating to biodiver- environmental problems for IEE report to potential problems, with recommenda- sity, erosion, forest habitat, aquatic ecol- development bank requirements. tions for solutions. Preparation of ogy, health, archaeology, legal aspects, detailed plans and costings for measures etc. to be undertaken during construction and operation. Fulfill EIA report to World Bank requirements. Engineering and Economic Aspects of Planning, Design, Construction and Operation 35 LARGE DAMS: Learning from the Past, Looking at the Future A General Guide to the Scope and Accuracy of Hydropoweir Project Studies Level: INVENTORY Level: PREFEASIBILITY Level: FEASIBILITY Design: Consideration of several project Design: Consideration of various project Design: Economic optimization of princi- layouts, including variations of dam axis layouts (maximum operating levels and pal project features such as flood sur- location, waterway alignment and power- powerhouse locations), for optimum charge (trade-off spillway capacity and house location. Use of generalized types development of river reach or site. dam crest elevation), diversion works of dam (earthfill, rockfill, concrete gravity Variations around pivotal design (dam size, waterway dimensions, etc. dam), hydraulic structures and electro- height/installed capacity) to permit opti- Preliminary stability analysis of major mechanical equipment, avoiding uncon- mization. Use of specific solutions for structures. Particular consideration of ventional designs intended to reduce major project features such as diversion construction methods and schedules and costs. Standard criteria for selection of works, dam, spillway, waterways, power- their influence on project cost. Details of nominal installed capacities and reservoir house. drawings sufficient for offtake of volumes operating levels. Presentation as single and costs, including access roads and drawing showing general layout and sec- construction site installations. tions through principal structures, supple- mented by technical data sheet. Costing: Consistent criteria and stan- Costing: Standard cost estimating pro- Costing: Use of standard procedures dard procedures to obtain homogenous cedure similar to that used at inventory applied during inventory and prefeasibili- cost estimates of project components, level, possibly with greater desegregation ty studies as a basic reference for indirect costs and contingencies. into project components. detailed cost estimate. Determination of Individual unit or total costs represented unit cost composition of main construc- as functions of specific project variables, tion items, taking into consideration on basis of information from suppliers capability of local labor, performance of and actual civil works costs incurred on construction equipment, costs of supply completed projects. Estimates of opera- and handling of materials, meteorological tion and maintenance costs based on conditions, access, etc. Combination of experience in existing projects. cost estimates with construction sched- Breakdown of costs into labor, equipment ule to yield investment schedule. and materials, foreign and local currency. Evaluation: Computation of energy pro- Evaluation: Assessment of energy pro- Evaluation: Demonstration of technical duction and capacity availability over duction, capacity availability and power feasibility of constructing project. period of recorded or reconstituted and other benefits for project variants Economic evaluation and detailed finan- streamflow series, taking into account (range of dam heights and installed cial analysis based on estimated invest- reservoir elevation area/volume relation- capacities), applying procedures similar ment schedule and possible sources of ships, evaporation and seepage, turbine to those used during inventory study, finance. All assumptions to be stated performance characteristics, existing and possibly incorporating in some form an and sensitivity testing of plausible planned river basin developments and optimization model, to arrive at a devel- adverse outcomes inclucled. Benefits, other uses (irrigation, water supply, flood opment of the river reach or site which risks and returns for participants to be control), using independent operating maximizes total net benefits. Refinement clearly identified. policies. Assessment of power and other of the scheme, in particular more benefits to yield estimates of net benefits detailed assessment of installed capacity and unit values of kilowatts and kilowatt- based on system approach or assumed hours for projects and alternatives, apply- PPA terms and conditions. ing cost allocation procedure to multipur- pose projects. All three levels of investigation provide input data to the continuously ongoing planning process, which in turn yields technical and economic bases for: i) identifying river basins or reaches for study at prefeasibility level ii) selecting individual projects for study at feasibility level iii) deciding to construct a project 36 Engineering and Economic Aspects of Planning, Design, Construction and Operation CHECKLIST FOR KEY POTENTIAL ENVIRONMENTAL AND SOCIAL IMPACTS CAUSED BY LARGE DAM PROJECTS Impact Area Effect of Dam Consequence Basic Impacts Aspects to be Evaluated OI upstream LI better access Oi new settlements Oi clearing of forest cover OI increased sedimentation, loss of habitats catchment Ui increased agriculture UI increased sedimentation, loss of habitats, water pollution due to increased use of fertilizers and pesticides LI new villages, more tourists LI wastewater and garbage disposal problems, loss of habitats, poaching, increased forest exploitation and fishery, health problems O need for watershed -A erosion control U control vegetation cover Oi planting of trees, terracing, tuoing protection Lit regulate development LO limit influx of people, limit agriculturally used areas Oi upstream river U reservoir backwater UI higher water levels LI increased sedimentation 'A increased flooding upstream Li higher groundwater levels LO water logging, salinisation, problems with latrines LBi slower water velocity UI effect on water-borne diseases * OLi disconnection from J reduced fish migration Li loss of biodiversity, less fishery, lower protein intake local population, health problems 3,. downstream river I no boat connection LI transport problems I reservoir areas II inundation of land LU loss of settlements Li resettlement of inhabitants Li occurrence of indigenous people, availability of adequate resettlement areas, time needed for a well-planned resettlement, problems wi with flooding of burial grounds, places of religious or cultural importance, disruption of ethnic integrity I regional demographic effects Oi fragmentation of coherent societies, loss of trading and communication patterns, effect on regional economy ElO loss of habitats O loss of biodiversity Li occurrence of endangered species (fauna, flora, wildlife, fish), disturbance of delicate biological balances o' UI regional imbalance Oi fragmentation of larger habitats, effects on migratory patterns of fish, birds, wildlife I loss of landscapes 3 loss of scenic beauty Li occurrence of unique waterfalls, rapids, panoramic views, wonders of nature, impact on tourist industry Li mineral resources flooded Li impact on mining LI existing mining operations, occurrence and value of mineral deposits Li minerals dissolve in water OI occurrence of salts, evaporities and minerals which can possibly undergo chemical reactions with acid water in hypolimnion LI biomass flooded L effect on water quality LU quantities of green, non-green and underground biomass affected Li reservoir clearing LI time and costs of clearing, effect on local labor market, effect on prices of sewn timber, plywood and charcoal in the region LI loss infrastructure I relocation of roads, etc. Oi access to previously pristine areas, logging, poaching, loss of established trade routes profit sharing from timber sales, prospects for burning remaining vegetation and washing ash out prior to inundation -O creation of water body Oi deep standing water i sediment entrapment Li limitation of life storage, limitation project life time, blockage of water intakes, erosion of turbines if sediments reach power intake i Iimproved navigation I oil spills, noise, new possibilities to travel to and from hitherto isolated areas, establishment of commercial boat transport CD LI changes in water quality LI stratification into epi- and hypolimnion, anaerobe rotting processes in hypolimnion, possible emission of hydrogensulphate and methane possible inversion, colder river water may dip into hypolimnion leading to nutrient deficient top layer of reservoir, effect on aquatic ecology i Ichanges in aquatic ecology Li disappearance of riverine species, proliferation of lacustrine species, development lake fishery, possible introduction of non-endemic o species with unknown effects, breeding of vectors for waterborne diseases LI creation new habitats Li attraction new species LI birds, wildlife 2 O-i water weeds, algae O increased evaporation losses, blockage of intakes, increased rotting of biomass, effects on navigation, prospects for biological control (weevils), alga blooming and die-offs o3 O-i water recreation Li increased tourism II employment in service and sports sectors, industry, danger of pollution, waste disposal and sewerage problems, increased building activity I micro-climatic changes Li increased wind speeds O wave action on man-made lake, affect on reservoir slopes, dam crest elevation and navigation CD L increased evaporation Oi morning mist, locally increased cloudiness and rainfall, reduced temperatures around lake i I higher waterlevel LI higher groundwater levels [A water logging, salinization, problems with latrines Xi greater local mass Li increased seismicity Li effect on dam safety, other major structures, fear of local population Li power plant II high pressure conduits, LI fish entrainment Li fish kill I damage due to abrupt pressure differences, turbine mortality turbines CHECKLIST FOR KEY POTENTIAL ENVIRONMENTAL AND SOCIAL IMPACTS CAUSED BY LARGE DAM PROJECTS , Impact Area Effect of Dam Consequences Basic Impacts Aspects to be Evaluated L I downstream river I flow regulation I flood control LI lesser inundation of floodplains UI nutrient supply to flood plain, need to use and pay for fertilizers, effect on micro-organisms encroachment of people to floodplains with increased damages during major floods which cannot be regulated Lo improved navigation LI oil spills, noise, new possibilities to travel to and from hitherto isolated areas, establishment of commercial boat transport Ll low flow augmentation LI increased irrigation I see: irrigation areas LO increased water use LI industry: increased employment, improvement regional economy, waste water problems, air quality problems, influx of people to cn the region ,CD LIi industry: increased employment, improvement regional economy, waste water problems, air quality problems, influx of people to tihe region O less salt water intrusion LI estuary: change in water salinity, effect on habitats U water extractions downstream can increase LI less water level variation [O less riverine habitats Oi less fish, birds, mammals; effect on food chain, effect on nutritionless fish, birds, mammals; effect on food chain, effect on nutrition 1I reduced flows [ lower water levels UI lower groundwater level LOi drying up of groundwater wells, problems for water supply, desertification due to groundwater level falling below rootzones of trees (upstream diversion) LO navigation problems Ol less boating transport, higher transportation costs, effect on regional economy, effect on fish migration and spawning, effect on mammal migration CD LI increased salinity intrusion UI estuary: change in water salinity, effect on habitats LU less sediments J erosion of riverbed LO lower groundwater level O drying up of groundwater wells, problems for water supply, desertification due to groundwater level falling below rootzones of trees Li caving in of river embankments 3 loss of overbank habitats, loss of infrastructure C.) LI undercufting foundations LI problems for foundations of existing bridges, weirs, jetties, underwater cable crossings, etc. =3 OL changed water quality LI less nutrients LI less fish Li reduced income fishermen, increase fish price, less protein intake poor population, malnutrition effects on bio-chains, i.e. less fish-eating birds Li oxygen deficiency Li fish kills I see above, beware of releases through low level outlets of reservoir o Li acidity of water LU fish kills O see above, beware of releases through low level outlets of reservoir I increased corrosion LI metal objects, such as boats, gates. powerhouse equipment, may be affected X3 OLI minerals dissolve in water LI potential problem if river sediments contain heavy metals, pesticides, etc. water may become toxic D. II disconnection from LO reduced fish migration upstream river Lino boat connection LI transport problems LO less sediments to LO coastal erosion Li loss of habitats and LO effect on biodiversity, local economy and recreation CD t estuary infrastructure Lo less nutrients to OI disturbance aqautic U less fish and other sealife LI loss of biodiversity, effect on food chain, reduced income fishermen estuary ecology LO stream receiving LI increased flows J higher water levels Li higher groundwater levels LJ water logging, salinisation, problems with latrines diverted flows LU increased flooding LO crop losses, damage to infrastructure, damage to habitats, Li less shallow water Li less spawning, effect on fish, effect on food chain Li improved navigation L oil spills, noise, new possibilities to travel to and from hitherto isolated areas, establishment of commercial boat transport Li low flow augmentation O increased irrigation L see: irrigation areas increased water use Li industry: increased employment, improvement regional economy, waste water problems, air quality problems, influx of people to the region Li less sediments LI erosion of river bed Oi lower groundwater level LI drying up of groundwater wells, problems for water supply, desertification due to groundwater level falling below rootzones of trees (relative to discharge) II caving in of river embankments U loss of overbank habitats, loss of infrastructure LI undercutting foundations LI problems for foundations of existing bridges, weirs, jetties, underwater cable crossings, etc. Li changed waterquality LU less nutrients LU less fish LI reduced income fishermen, increase fish price, less protein intake poor population, malnutrition effects on bio-chains, i.e. fewer fish eating birds and mammals OI oxygen deficiency LI fish starvation LI see above, beware of releases through low level outlets of reservoir L acidity of water fi[ h starvation see above, …eware of releases through low level outlets of reservoir LI increased corrosion U metal objects, such as boats, gates, powerhouse equipment may be affected LI minerals dissolve in mwter L potential problem if river sediments contain heavy metals, pesticides, etc.: water may become tonic CHECKLIST FOR KEY POTENTIAL ENVIRONMENTAL AND SOCIAL IMPACTS CAUSED BY LARGE DAM PROJECTS Impact Area Effect of Dam Consequences Basic Impacts Aspects to be Evaluated U irrigation areas U increased application U higher groundwater levels U water logging U salinization of soils unless good drainage provided, loss of soil fertility in long term of water U increased agricultural O higher food production U reduced malnutrition, reduced food import, increased food exports, emergence of agro-industry, increased employment effect on activity regional and national economy, increased need for service industry U increased use of chemicals U effect of increased use of fertilizer and pesticides on surface and groundwater quality, increased dependency on cash crops U mechanization U change of farming methods, which small holders can ill afford 2 move to cash crops U higher economic vulnerability to crop failures, lower production of traditional staple foods, higher food prices which poor cannot afford U adaptation to new techniques U stress, fear, higher expenditure on machines and agricultural inputs, U increased drainage U increased salinity of return flow U effect on fish, drinking water intake U HV transmission U new corridors U clearance of land U disturbance of habitats U fragmentation of habitats, invasion by new species, new access to pristine areas lines 2 visual impact U disturbance of natural landscape cm. LU electro-smog -l noise impact U humming sound a' LU electro magnetic fields U especially for very high voltage lines, possible health impact U- potential security problem U vulnerability to sabotage U sabotage to towers in remote areas, effect on project income, effect on power supply security in the country 2U resettlement U new settlements U influc of people U social disruption U ethnic conflicts, resentment in host communities for preferential treatment of settlers, homesickness, adaptation to new environment S. areas and lifestyle, destruction of intact social network, decreased mutual support U marginalization U integration with host community, competition for labour and services , U change of natural U health impact I spread of communicable diseases to or from host community, increased stress and traumata 3 environment U health impact U waterborne diseases, build up of vectors U- increased pressure on resources U degradation of natural forest, loss of habitats, threat to food security UI waste disposal U increased pollution U waste disposal, sewerage treatment, sanitation standards fD o- U construction U construction activity U labour demand U employment of local labor U temporary increase of income, neglect of traditional work particularly subsistance farming, acquiring new skills, exposure to health o areas risks __ U employment of immigrant labor U social disruption, spreading o f disease, prostitution, use of drugs and alcohol, opportunities for shops and restaurant CD U disturbance of U effects on landscape U quarries, spoil areas, temporary roads, cutting of trees, garbage disposal, wastewater problems, soil erosion, increased sedimentation surroundings U noise and dust U noise drives animals away, visual and health impacts due to dust U exposure to unnatural 2 increased traffic to and from U road accidents, injuries and deaths risks site CD O-I construction accidents U injuries and deaths 2' U country/region U hydropower U less thermal power U reduced fuel imports U effect on balance of payment, reduced vulnerability to supply interruptions or price hikes, effect on harbors/refineries, fuel transport o generation generation U reduced emissions U less acid rain, less smog, less dust, less contribution to global warming 0 U irrigation U increased agricultural U redoced imports, moru exports U effect on balance of payment, reduced vulnerability to price fluctuations of imported toads, increased vulnerability to price fluctuations output exported C U cumulative impact U better prospects agro-industry U economic development employment effects, potential environmental impact U D higher overall impact U loss and changes to biodiversity U effects on vegetation, fish, wildlife, birds, mammals, human beings: food chain U accumulation effects U hydrological regime, water quality, sedimentation, accumulation level of dangerous chemicals i(heavy metals, pesticides, hormones, etc.) 0. U increased foreign debt U less funds for othersectors O slowdown of other developments 2 health, education, basic infrastructure, communication etc. C) -o3 CD U global U less thermal Uless global warming =t generation Jslower depletion of fossil fuels O impact on unique U threat to endangered habitats species LARGE DAMS: Learning from the Past, Looking at the Future SOCIAL IMPACTS of Large Dam Projects PHOTO COURTESY OF THE WORLD BANK Women working in a rice paddy near the Victoria Dam, Sri Lanka. By THAYER SCUDDER, California Institute of Technology Paper Contents Project Affected People Overview .42 and Resistance Movements .................. 55 Introduction . .45 Helping Project Affected People Definitions ..... 46 to Become Beneficiaries ........................ 56 Numbers ..... 46 Research Needs ........................ 62 Resettlers ..... 46 Conclusions and Lessons Learned .............. 63 Hosts ................................................. 51 Acknowledgements ........................................ 64 Other Project Affected People .................... 52 Bibliography ............... 64 Immigrants .................... 55 Annex One: Key Issues ............... 68 Thayer Scudder is Professor ofAnthropology and a co-founder of the Institute of Development Anthropology at the California Institute of Technology. Social Impacts of Large Dam Projects 41 LARGE DAMS: Learning from the Past, Looking at the Future from the project, but evidence suggests that there are THAYER SCUDDER significant negative impacts While the World Bank has attempted to improve its performance, it contin- Thayer Scudder IS professor of anthropology and a co-founder of ues to underestimate adverse resettlement outcomes the Institute of Development Anthropology at the Califomia and downstream impacts Scudder suggests a num- Institute of Technology Mr Scudder has researched the ber of ways in which all project affected people can socioeconomic impacts of large dams and nver basin develop- become project beneficiaries These include increas- ment projects on project affected people within reservoir basins ing local participation, improving the design and and below dams in many parts of the world He has also served implementation of irngation schemes, providing as a consultant on large dam and iiver basin development pro- training and technical assistance to utilize the reser- jects in North America, Africa, the lMiddle East and Asia voir fishenes, and conducting strategic flood releases that can benefit downstream users and habitats Thayer Scudder Multilateral donors are essential in en suring that Division of Humanities and Social Services, 228-77 more local people become project beneficianes California Institute of Technology Pasadena, Calif 91125 Unted States 1. OVERVIEW Fax (818) 405-9841 E-mail tzs@hss caltech edu Whether short-term or cumulative, adverse social impacts are a serious consequence of large dams Note: This paper was commissioned by IUCN from the author for When combined with adverse health impacts, it is the joint IUCN-The World Conservation Union/World Bank work- clear that large-scale water resource development -shop Any personal opiions should in no way be construed as projects unnecessanly have lowered the living stan- representing the official position of the World Bank Group or dards of millons of local people The emphasis in this IUCN paper is on the low-income rural majority that live in subtropical and tropical nver basins 'he analysis will deal mainly with resettlers, host populations and those other project affected people (OPAPS), espe- ABSTRACT cially downstream residents, who are neither reset- tlers nor hosts This paper asserts that the adverse social impacts of dam construction, whether short-term or cumula- RESETTLERS tive, have been seriously underestimated Large-scale According to the World Bank's former senior advisor water resource development projects unnecessanly for social policy and sociology, "Forced population have lowered the living standlards of millions of local displacement caused by dam construciLon is the sin- people According to the World Bank's senior envi- gle most senous counter-developmental social conse- ronmental advisor, "Involuntary resettlement is quence of water resource developmenl " The Bank's arguably the most senous issue of hydro projects senior environment advisor concurs "Involuntary nowadays " There are a range of difficulties, yet for resettlement is arguably the most serious issue of those removed and the host populations among hydro projects nowadays" whom they are resettled the goal of resettlement must be to become project beneficiaries The income A wide range of difficulties is involved They and standard of living of the large majonty must include the complexity of the resettlement process, improve to the greatest extent possible The histori- the lack of opportunities for restonng and improving cal record suggests that realizing this goal is possible living standards, the problem of sustainability of what but very difficult to achieve Besides resettlers and development occurs, the loss of resiliency and hosts, other people affected by dam construction increased dependency following incorporation within include rural dwellers residing downstream from a a wider political economy, inadequate implementation dam They are often neglected in project assess- of acceptable plans due to such factors as timing, ments because it is assumed ihat they will benefit financial and institutional constraints, unexpected events, including changing government pnonties, 42 Social Impacts of Large Dam Projects LARGE DAMS: Learning from the Past, Looking at the Future lack of political will on the part of governments; host- the next generation for the resettlement component resettler conflicts; and the lack of empowerment of to be considered successful. Stage four commences relocated and host populations. when the next generation of settlers takes over from the pioneers and when that generation is able to com- For those removed, and for the host populations pete successfully with other citizens for jobs and among whom they are resettled, the goal of resettle- other resources at national and local levels. It is also ment must be to become project beneficiaries. This characterized by the devolution of what management means that the income and living standards of the and facilitation responsibilities may be held by spe- large majority must improve. Analysis of the global cialized resettlement agencies, nongovernmental record in regard to resettlement suggests that realiz- organizations (NGOs) and others to the community ing this goal is possible but very difficult. The main of resettlers and to the various line ministries. resource is those relocated. The global experience is that resettlers can contribute to the stream of project HOSTS benefits if appropriate opportunities and security of Even when political leaders among the host popu- tenure over their natural resource base are present. lation agree to the movement of resettlers into their If more local people are to become beneficiaries, midst, sooner or later conflicts between the two can not only must World Bank-type guidelines for reset- be expected. They arise because of competition tiers be extended to all project affected people, but among a larger population over a diminished land the horizon of environmental and social impact base, as well as over access to job opportunities, assessments must be expanded to include all habitats social services and political power. and human populations that are likely to be affected. It is best to anticipate the inevitability of host-reset- The main theoretical framework dealing with dam tler conflicts. The best approach for minimizing them resettlement is a four-stage model developed during is to include the host population in the improved the late 1970s. Briefly, the four stages are character- social services and economic development opportuni- th lt1s. Brefy th forsae.recaatr ties intended for the resettlers. W1hile such an ized by: one, planning; two, efforts by the resettlers to cope and to adapt following removal; three, eco- approach will mcrease the financial costs of resettle- nomic development and community formation; and ment in the short run, in the long run it will enhance four, handing over and incorporation. Successful the possibility of multiplier effects as well as reduce resettlement takes time. At the minimum it should be the intensity of conflict. Unfortunately, such incorpo- ration of the host population within resettlement pro- implemented as a two-generation process. gasi ae grams iS rare. Following the initial planning and recruitment OTHER PROJECT AFFECTED stage, the second stage is characterized by the strug- PEOPLE(OPAPS) gle to adjust to the loss of homeland and to new sur- roundings. That stage is characterized by multidi- Large-scale river basin development projects speed mensional stress, with physiological, psychological the incorporation of all project affected people, includ- and sociocultural components synergistically interre- ing resettlers and hosts, within wider political lated. During the initial year following removal, economies. Theoretically that should be a plus in income and living standards can be expected to drop. terms of national development. The studies that have If new opportunities are available, the third stage of been completed suggest, however, that such incorpo- economic development and community formation can ration is more apt to reduce than improve the living begin once a majority of resettlers have adjusted to standards of a majority. This is especially the case their new habitat and gained a measure of household with OPAPS living below mainstream dams. self-sufficiency. The tragedy of most resettlement to date is that a majority of resettlers never reach stage Aside from run-of-the-river installations, a major three. Rather as the resettlement process proceeds function of dam construction is to regularize a river's they remain, or subsequently become, impoverished, annual regime. Though few detailed studies have been completed on the impacts of such regulariza- Stage three development must be sustainable into tion, those that exist have shown them to have a dev- Social Impacts of Large Dam Projects 43 LARGE DAMS: Learning from the Past, Looking at the Future astating effect on millions of people. The topic has HELPING PROJECT AFFECTED been best researched in West Africa in connection PEOPLE BECOME BENEFICIARIES with mainstream dams on the Senegal River and a Increasing local participation. In recent years, number of dams in Nigeria. After three years of stud- the need for local people to have grealLer involvement ies, an Institute for Development Anthropology team in project planning, implementation, management showed that the Manantali [)am as managed by the and evaluation has been increasingly emphasized. trinational Senegal Valley Development Authority That emphasis is welcome and important. As with the (OMVS) was adversely affecting up to 500,000 people implementation of plans that actually rnake project below the dam. Below the Kainji Dam on the Niger, affected people beneficiaries, however, the extent to adverse downstream impacts include reductions in which local people have actually been involved has swamp rice and yam production and in the productivi- been disappointing. Aside from lack of political will ty of the riverine fishery. On a Niger tributary further on the part of governments to actually decentralize upriver, costs of the Bakolori Dam to downstream vil- decision-making, there are several other issues that lagers is estimated to exceed. the benefits realized must be dealt with. These include differences in defi- from the project. nition as to what local participation means, failure to As for OPAPS living in the vicinity of large-scale link decentralization of decision-making with decen- dams, Hydro-Quebec's James Bay Project illustrates trahization of financial resources for implementing the impoverishing impact on an entire cultural area. those decisions, and social disorganization at the For example, the 1975 James Bay and Northern community level. Quebec Agreement split the Cree into eight geo- Ironically, increased emphasis on the need for graphically isolated bands whose exclusive control of local participation is occurring at a time when cus- surface rights involved only 5 percent of their former tomary participatory institutions are weakening lands. More specifically, implementation of the La because of increasing incorporation of local commu- Grande Phase of the project has had two quite differ- nities within wider political economies and growing ent types of negative impacts., One is the mercury emphasis on private ownership of resources. contamination of reservoir fish to the extent that mer- Moreover, within communities, educated individuals cury contamination of some Cree, for whom fish are are placing increasing emphasis on household and an all-important dietary component, significantly individual interests, as opposed to extended kin exceeds World Health Organization standards. groups and customary institutions of cooperation. Causality in this instance can rather easily be ascer- tained. Such is not the case with the other type of Such circumstances must be dealt with if local par- impact, which includes an increased incidence of sex- ticipation is to play the role it should in improving the ually transmitted diseases and social pathologies living standards of project affected people. A prereq- such as spousal abuse and suicide, especially among uisite will be participatory appraisal. While custom- young women. ary institutions may be adjusted to new conditions, IMMIGRANTS new socioeconomic and political institutional forms will probably be required. Immigrants, both temporary and permanent, from without a particular river basin are major beneficia- Regardless of the type of institutions utilized or ries of river basin development projects. Seeking the developed, effective local participation must involve a new opportunities created by a project, they frequent- much broader range of actors than just project affect- ly are able to out-compete local people. Two major ed people. At the national level, commitment must be benefits of large dams are the reservoir fishery and reflected in the necessary legislative and judicial irrigation. Though both involve project affected peo- framework. The assistance of NGOs in institution- ple as well as immigrants, the latter tend to dominate building would also be necessary in many cases, as unless a special effort is made to select and increase would be the financial assistance of various donors. the competitive abilities of local people. Also important would be private-sector involvement in various joint ventures as well as assistance from universities and research institutions to develop appropriate monitoring and evaluation capabilities. 44 Social Impacts of Large Dam Projects LARGE DAMS: Learning from the Past, Looking at the Future Irrigation. Well-designed, implemented and main- required, the recommended strategic priorities were tained, major irrigation schemes can produce signifi- to "enhance the borrower's commitment" by only cant increases in both production and living stan- financing projects with acceptable policies and legal dards in an environmentally sustainable fashion. The frameworks, "enhance the borrower's institutional main disadvantage of irrigation projects for project capacity," "provide adequate Bank financing" and affected people is when they not only are unincorpo- "diversify project vehicles," whereby the Bank com- rated within a project but are actually evicted from plements the financing of physical infrastructure with their land to make way for it. As land and water standalone resettlement projects. resources become scarcer, political elites will be increasingly tempted to either access them at the Other recommended strategic priorities include expense of project affected people or use them to the need to "strengthen the Bank's institutional achieve political goals. capacity" so as to improve the Bank's ability to deal with the different stages of the project cycle, and to Reservoir fisheries. Critics of large dams have improve "the content and frequency of resettlement tended to underestimate the importance of reservoir supervision." Where possible, "remedial and retro- fisheries for project affected people. To benefit, how- fitting actions" are also emphasized in connection ever, training and technical assistance are required, with previously funded, but inadequately implement- as is protection of the entry of project affected people ed, Bank-assisted projects. Finally, the Bank empha- during the early years of a new fishery. Otherwise, sizes that more attention will be paid to promoting more competitive fishers from existing reservoirs and "people's participation" and NGO facilitation of "local natural water bodies can be expected to dominate the institutional development." new fishery. While a major policy deficiency has been failure to anticipate the decline in productivity that On the other hand, Bank documents continue to characterizes the formation of new water bodies, present an unrealistic optimism; a "can-do" advocacy techniques exist to at least partially compensate for attitude that is uninformed by case and comparative such a decline by expanding the fishery to capture a studies. The text of the Bank's 1996 desk study of wider range of species and to use a wider range of large dams is an example. The case studies in the techniques. second volume, for example, tend to underestimate adverse resettlement outcomes and downstream Improved design and management of existing impacts. and future engineering works for making con- trolled releases. Where dams are to be constructed, design and operations options should include con- 2. INTRODUCTION trolled flood releases at strategic times for the benefit of downstream users and habitats. Controlled flood- This workshop is occurring at a time of increasing ing is not a panacea, however. It may involve trade- criticism of large dams. Such criticism is overdue and offs with hydropower generation, for example, and welcome because benefits have often been inflated the floods that are released may be ill-timed. and costs underestimated. Much less has been writ- Moreover, only rarely can they provide a substitute ten on social impacts (aside from those relating to for natural river regimes. Nonetheless, where feasi- resettlement) than on environmental impacts; hence ble, the advantages of controlled floodwater releases well-designed long term research is urgently needed. can be expected to outweigh disadvantages. Due to its absence, the arguments presented here rely to a large extent on case studies. What is known ACTIONS TAKEN OR INTENDED indicates that, whether short-term or cumulative, BY THE WORLD BANK adverse social impacts often are serious. When com- In the World Bank's 1994 review of their experiences bined with adverse health impacts (Hunter et al., with involuntary resettlement, a series of "Actions to 1993), it is clear that large-scale water resource devel- Improve Performance" are listed. Most important is opment projects unnecessarily have lowered the liv- the recommendation to improve project design in ing standards of millions of local people. ways that "avoid or reduce displacement." To improve government capabilities when removal is Social Impacts of Large Dam Projects 45 LARGE DAMS: Learning from the Past, Looking at the Future 3. DEFINITIONS major industrial complexes both within and without a river basin. Since these categories-as opposed to Generally speaking, environmental impact analysis local rural communities-tend to be the major benefi- has dealt with impacts on the physical and non- ciaries of water resource development, in terms of human biotic components of ecosystems while social rising living standards resulting from increased sup- impact analysis has dealt with impacts on sociocultur- plies of industrial and residential electricity and al systems (SCOPE, 1972). In this chapter, an equally water, it is important for readers to realize that this broad definition of social impacts will be used, with paper is biased toward those who, to date, are most particular emphasis on the irnpacts of large dams on apt to be adversely affected. While sorne effort will the lifestyles of affected communities, households be made to correct this bias, it is intenitional in order and individuals. to emphasize two points. The first is that the tenden- cy worldwide to ignore (in the case of OPAPS) or The topic is a vast one, since in effect it includes underestimate (in the case of resettlers and hosts) impacts on entire societies. To make it manageable, the costs of major dams to large numbers of people some restrictions are necessary. Emphasis through- has inflated their benefits to the extent that insuffi- out will be on the low-income rural majority that lived cient attention has been paid to other alternatives. in subtropical and tropical river basins prior to being The second is that there are ways for increasing the affected by one or more large dams. The analysis likelihood of making a larger proportion of all cate- will deal mainly with three categories of people: those gories of project affected people beneficiaries in who must be relocated because of project works and cases where future dams are selected for implemen- future reservoir basin inundation (the resettlers), tation. those whose communities must receive resettlers (the host population or hosts), and those other pro- ject affected people (OPAPS) who are neither reset- 4. NUMBERS tlers nor hosts. A fourth category, immigrants, will be dealt with more briefly. Little accurate data exists on the total number of people affected by even a single dam. The major Because environmental and social impact assess- exception is where a project impacts upon a easily ments, as well as supervisory and project completion defined area with a relatively small population whose reports, have tended to ignore project impacts on number is already known. An example is Quebec's OPAPS, they will be dealt with in some detail. They large-scale James Bay Project, whose components include three major types. The first includes those will have a direct impact on approximately 11,000 who live in the vicinity of the project works, including Cree Indians and an equal number of other residents. not just the dam site and township but also access In that case the number of resettlers and hosts would roads and transmission lines. The second consists of constitute only a small minority of the total, a relative- those who live in communities within reservoirai ly small number of people lived below (lam sites, and basins that do not require relocation or incorporation no major cities would be involved. In contrast, where of resettlers. The third type, which tends to be by far projects impact upon large numbers of downstream the most numerous, involves people who live below residents-as with the Kariba Dam on the Zambezi, dams whose lives are affected-for example, by the the Kainji Dam on the Niger, the Aswan High Dam implementation of irrigation projects or changes in on the Nile and the Gezouba and Three Gorges dams the annual regime of rivers in whose basins they on the Yangtze-numbers of those impacted can run reside. Taken together, such other project affected into the millions. people usually outnumber resettlers and hosts. Therefore failure to assess impacts upon them can be expected to distort feasibility .study results. 5. RESETTLERS Regrettably, the restrictions outlined above deem- THE GOAL OF DAM-INDUCED phasize several important categories of people, RESETLEMENT including immigrants from without the river basin and inhabitants of cities, mining townships and other For those removed, and for the host populations 46 Social Impacts of Large Dam Projects LARGE DAMS: Learning from the Past, Looking at the Future among whom they are resettled, the goal of resettle- Review, 1992), while Fernandes et al. have estimated ment must be to become project beneficiaries. This that a still larger number-many of whom were of means that the income and living standards of the tribal origin-have been relocated in India over a large majority must improve to the extent that such forty-year period (1989). improvement is obvious both to themselves and to external evaluators. Such a goal is justifiable in terms Resettlement counts for specific projects are rela- of both human rights and economics. Inadequate tively accurate where governments attempt to calcu- resettlement creates dependence and impoverish- late numbers for compensation and other purposes. ment and lowers the stream of project benefits To date, the largest number of resettlers from a sin- through its failure to incorporate whatever contribu- gle project was 383,000, in connection with China's tion those relocated might make, on the one hand, Danjiangkou Dam on a Yangtze tributary. and by creating an increased dependence on safety Completion of the Three Gorges Dam on the main nets, on the other. It also jeopardizes the life of the Yangtze will require the resettlement of over 1 million project by increasing siltation and decreasing water people. quality, since poorly relocated and impoverished peo- ple within a reservoir basin have little alternative but Impacts. According to Michael M. Cernea, the to overutilize their environment. World Bank's senior advisor for social policy and soci- ology until his recent retirement, "forced population Analysis of the global record with resettlement displacement caused by dam construction is the sin- also suggests that the goal of raising the majority's gle most serious counterdevelopmental social conse- living standards is possible but very difficult. The quence of water resource development" (1990: 1). potential beneficiaries are mainly the relocated peo- The Bank's senior environment advisor, Robert ple themselves. Although far more research is need- Goodland, concurs: "Involuntary resettlement is ed on the later stages of the resettlement process, arguably the most serious issue of hydro projects what little evidence exists suggests that within a few nowadays." He goes on to add, "it may not be improv- years of removal, the majority may be more receptive ing, and is numerically vast" (Goodland, 1994: 149). to development than their neighbors who were not Add the adverse effects that most resettlement to displaced. That is partly because resettlement is apt date has also had on incorporating host populations to remove a range of cultural constraints to future and on habitats surrounding resettlement sites, and entrepreneurial activities and initiative, including land the impact magnitude increases still further. tenurial, political and economic constraints. That hypothesis, however, should never be used as a rea- RESETTLEMENT THEORY son for resettlement for two major reasons. One is AND POLICY IMPLICATION the multidimensional stress associated with resettle- The main theoretical framework dealing with dam ment's initial years. The other is the difficulty of resettlement continues to be the four-stage model I keeping land, other natural resources and of employ- suggested in the late 1970s (1981 and in press; ment opportunities available while sustaining a Scudder and Colson, 1982). In evolving that frame- process of development once it has commenced. work, I drew heavily on earlier work by Robert Chambers (1969) as well as on Michael Nelson THE SCALE OF DAM RESETL'LEMENT (1973), both of whom presented three-stage frame- Scale. According to the World Bank, "The dis- works dealing, respectively, with institutional and eco- placement toll of the 300 large dams that, on average, nomic issues involved in land settlement schemes. I enter into construction every year is estimated to be also drew heavily on Elizabeth Colson's and my long- above 4 million people" (1994: 1/3), with at least 40 term study of those Gwembe Tonga, who were relo- million so relocated over the past ten years. The con- cated in the 1950s because of the Kariba Dam struction of dams and irrigation projects in China and scheme in what is now Zambia and Zimbabwe. India are responsible for the largest number on a Especially influential was Colson's The Social country-by-country basis. In China, over 10 million Consequences of Resettlement (1971), which I people were relocated in connection with water devel- believe remains the best single case study of the opment projects between 1960 and 1990 (Beijing resettlement process. Social Impacts of Large Dam Projects 47 LARGE DAMS: Learning from the lPast, Looking at the Future Throughout, my focus has emphasized resettler the daunting tasks of familiarizing themselves with a behavior at different periods. Briefly, the four stages new natural resource base, new neighbors and new are characterized by planning; efforts by the reset- government expectations while simullaneously devel- tlers to cope and to adapt following removal; econom- oping new production systems and settling into new ic development and community formation within homes. Hence the cautious, risk-adverse stance con- resettlement areas; and handing over and incorpora- tinues for a majority of the first generation of reset- tion. tlers, at least until they have adjusted to their new habitat and gained a measure of household self-suffi- The influence of Chambers is clear in the empha- ciency. Then, if new opportunities are available, the sis placed on the need for facilitating agencies to third stage of economic development and community hand over eventual responsilbility to resettler institu- formation can begin. The tragedy of most resettle- tions; the influence of Nelson is clear on the need for ment to date is that a majority of resettlers never success to be defined not just in terms of increased reach stage three. Rather, as the resettlement production but also improved living standards for the process proceeds, they remain, or subsequently majority. become, impoverished. Based on comparative analy- sis of development-induced rural and urban resettle- Successful resettlement takes time. At minimum, it ment, Cernea has identified eight impoverishment should be implemented as a two-generation process. risks (Cernea, 1990 and in press), all of which are Barnrng the impingement of unfavorable factors applicable to dam relocation. They are: landlessness, external to the resettlement process, if success can- jolsses hoees*sariaiain - . ~~~~~~Joblessness, homelessness, marginalization, not be passed on by the first generation of resettlers increased morbidity, food insecurity, the loss of to their children, then resettlement has failed. access to common property and social disarticulation. Following an initial planning and recruitment stage, As a ninth risk, I would add the loss of resiliency. the second stage is characterized by the struggle to adjust to the loss of homeland and to new surround- As for the third stage, I have hypothesized that it is ings. That stage is characterized by multidimensional one of the paradoxes of resettlement that after the ini- stress, with physiological, psychological and sociocul- tially stressful cessation or inapplicability of a wide tural components synergistically interrelated. range of behavioral patterns and indigenous knowl- Increased morbidity and morttality rates are indicative edge, important statuses and institutions may subse- of physiological stress, while psychological stress quently foster a more dynamic process of economic relates to the loss of home and habitat and anxiety development and community formation. Less inhibit- about the future. The non-transferability of various ed by previously restricting customs (relating, for natural resources and knowledge, and cessation, at example, to land tenurial patterns and community rit- least temporarily, of a wide range of behavioral pat- uals) and by entrenched leaders, aspiring entrepre- terns, statuses and institutions, cause sociocultural neurs and leaders are apt to find themselves in a stress. more flexible environment. If true, and more research is required, this finding has important poli- As a result of such multidinensional stress, I have cy implications since attempts by government, NGOs hypothesized that a majority of resettlers cling to and other institutions to provide appropriate opportu- familiar routines and rely on kin, neighbors and co- nities for resettlers and host communities could ethnics to the extent possible during this stage. I speed the arrival of stage three and reduce the trau- also have hypothesized that they are risk-averse, ma and lower living standards that are associated behaving as if a sociocultural system was a closed with stage two. They could also increase project ben- system. Although a minority may not be affected, efits by allowing resettlers and hosts to become pro- such stage two behavior appears to be associated ject beneficiaries rather than liabilities. with at least the initial year or two immediately fol- lowing physical removal. On the other hand, I am aware of no cases where timely external assistance can allow a rnajority of At least during that initial year, living standards resettlers to bypass stage two entirely. Involuntary also can be expected to drop to well-planned and well- resettlement involves trauma that most resettlers implemented schemes, since resettlers are faced with cope with in the conservative fashion described. But 48 Social Impacts of Large Dam Projects LARGE DAMS: Learning from the Past, Looking at the Future the extent of that trauma can be lessened, and the not eliminate that stage. As for its termination, there length of stage two shortened, by the immediate pro- are a number of indicators that characterize move- vision, for example, of upgraded educational and ment toward the third stage of economic develop- medical facilities. Security of tenure is another pre- ment and community formation. These include the requisite, whether of housing, land or other impor- naming of physical features and increased emphasis tant household and community natural resources. on community as opposed to household development as reflected in the establishment of funeral and other Joy A Bilharz's study of Seneca relocated in the social welfare associations and places of worship, 1950s in connection with Pennsylvania's Kinzua Dam including churches, temples and mosques. Cultural strongly suggests that resettler participation in the identity is apt to be reasserted and even broadened, planning, implementation and evaluation of the reset- as in the case of Egyptian Nubians resettled in the tlement and development processes has a positive mid-1960s in connection with the Aswan High Dam effect on those involved as well as on their children (Fernea and Fernea, 1991). Indeed, I hypothesize (in press). We are confronted here with a tricky issue that stage three tends to be characterized by a resur- since we have cases where participation has under- gence of cultural symbols, almost a renaissance, as mined local leadership (since that leadership was community members reaffirm control over their lives. seen in the eyes of their constituencies as accepting the undesirable) and where it has strengthened it. As for institutional development, it continues and How participation can occur and local leaders broadens throughout stage three. Because large become involved would appear to be a delicate issue dams incorporate project affected people within a that requires careful comparative research. wider political economy, the horizons of resettlers expand if new local, regional and national opportuni- Since the early 1980s in the tropics and subtropics, ties exist. Economic development is fostered as and much earlier in the United States, institution- households increasingly pursue dynamic investment building for such participation has been facilitated by strategies to access those opportunities. Here again, assisting NGOs whose purview includes developmen- based on comparative analysis, I hypothesize similar tal as well as environmental and human rights issues. trends around the world. Farmers initially begin shift- As advocates for potential resettlers, such NGOs, as ing from a reliance on consumption crops to higher well as experts hired by local communities, have also value cash crops. Increased emphasis is also placed been able to bring pressure to bear on governments on the education of children. Production systems at and donors alike to improve planning and plan imple- the household level also begin to diversify, not so mentation in ways that can increase the odds of reset- much as a risk avoidance strategy as earlier, but as a tlers eventually becoming project beneficiaries. means for reallocating family labor into more lucra- V.here it hltomtive enterprises, including livestock management and Wheimprove ithelrcaps cito empower loal formm oites, asmall-scale nonfarm enterprises. Small businesses are to improve their capacity to make Informed choices, run from the household's homestead allotment with such assistance can be invaluable. In some cases, as subsequent expansion to service centers within the with the Orme Dam in the United States, it can even resetlent aeaand, if especl scen ssful to play an important role in stopping projects that would urbantcenters, incd,in natioall scapals, w r involve destructive resettlement (Khera and Mariella, estate investments may also be made. 1982). Such assistance, however, also involves risks for local communities. That is especially the case Stage three development must be sustainable into where the agendas of NGOs and potential resettlers the next generation for the resettlement component vary, or where assistance, including legal challenges, to be considered successful. Stage four commences not only fails to stop resettlement but increases the when the next generation of settlers takes over from associated trauma by prolonging the period of uncer- the pioneers and when that generation is able to com- tainty prior to the move. pete successfully with other citizens for jobs and Again, it is important to repeat that while the other resources at both the national and local levels. Again, it iS important to repeat that while the It is also characterized by the devolution of what man- above "improvements" can reduce the trauma associ- agement and facilitation responsibilities may be held ated with stage two, the theory holds that they can- byespecializedcresettlementsagencies,tNGs and h- by specialized resettlement agencres, NGOs and oth- Social Impacts of Large Dam Projects 49 LARGE DAMS: Learning from the Flast, Looking at the Future ers to the community of resettlers and to the various While commending the Bank's guidelines as a line ministries. major step forward, they contain, in my opinion, the self-defeating statement that while the improvement Having relocated the largest number of develop- of pre-removal living standards should be the goal of ment-induced resettlers (40 million since the 1950s in all resettlement plans, at the very least they must be connection with construction projects alone, many of restored. Restoration of income and living standards, which involve dams) it is significant that China's first however, is not enough; indeed, in a rmiajority of cases national research center for the study of resettlement the mere restoration can be expected to increase the issues has evolved a quite simnilar four-stage frame- various types of impoverishment included within work for describing a successful resettlement process Cernea's impoverishment risk model. (Hohai University, 1996). Several reasons support this conclusion. The first DIFFICULTIES IN TRYING TO ACHIEVE one relates to the nature of the resettlement process. SUCCESSFUL RESETILEMENT During the years immediately following resettlement, I have dealt at length in two recent publications and in some cases during the years immediately pre- with why successful resettlernent is so difficult to ceding removal, income levels tend to drop. A second achieve (Scudder, 1995 and 1997). A wide range of reason relates to the long planning horizon for major difficulties is involved. They include the complexity dams. During that time period, the people, govern- of the resettlement process; lack of opportunities for ment agencies and private-sector investors will under- restoring and improving living standards; the prob- take less development than is the case in adjacent lem of sustaining what development occurs; the loss non-project areas. For that reason, resettler living of resiliency and increased dependency following standards will already be lower before removal than incorporation within a wider political economy; the they would have been without the project. inadequate implementation of acceptable plans due to such factors as timing, financial and institutional con- Third, where farm land and access to common straints; unexpected events, including changing gov- property resources are lost or reduced, expenses fol- ernment priorities; the lack of political will on the lowing resettlement are apt to be greater than before. part of governments; host-resettler conflicts; and lack Increased costs are especially a problem for reset- of empowerment of relocated and host populations. ters who have to purchase food supplies that they Restoration and improvement of living standards and were able to produce previously, or where less fertile sustainability warrant special emphasis. soils require the purchase of such inputs as improved seed and fertilizers, or where new production tech- IMPROVEMENT OF LIVIING STANDARDS niques require loans that lead to indebtedness. Given the extent of the disruption caused by invol- Fourth, even where pre-resettlement surveys are untary resettlement, I do not share the optimism of undertaken-and adequate ones are rare-there is a colleagues within the World Bank that implementa- general tendency to underestimate people's incomes tion of World Bank guidelines (1980 and 1990) can at that time. Fifth, merely restoring living standards restore the living standards of a majority in Bank- does not compensate resettlers for the negative financed projects. I refer specifically to the Bank not health impacts and the sociocultural trauma a majori- to denigrate its policies but rather because it is the ty can be expected to suffer. What is involved here Bank, more than any other institution, that has been are the wider aspects of what Cernea refers to as responsible for trying on the one hand to reduce the homelessness and social disarticulation-namely, extent of development-induced involuntary resettle- Downing's Social Geometrics (forthcoming) and ment, and on the other hand to improve its imple- Altman and Low's Place Attachment (1992). There is mentation where necessary. But most Bank's practi- no way that social cost-benefit analyses can accurate- tioners are, in my opinion, too optimistic about the ly reflect the hardships involved; hence the need to at extent to which their policies can be expected to least partially compensate for them by raising living restore and maintain living standards over the longer standards. term. Sixth, assuming that peoples' living standards have 50 Social Impacts of Large Dam Projects LARGE DAMS: Learning from the Past, Looking at the Future not been worsened by a project also assumes that no Another problem is the tendency of better-educated, development among those people would have more experienced and better-capitalized immigrants occurred without the project during the years that to outcompete resettlers for what rural opportunities mere restoration requires. In some cases that would are available or for hosts, with existing networks and be an unjustified assumption. business activities, to outcompete resettlers in estab- lishing or maintaining commercial activities. Because of the Bank's influence, the unfortunate acceptance of mere restoration of living standards has also crept into even the best national policies. 6. HOSTS China's policies are a case in point. In the 1991 State Council Regulation on Land Acquisition and Though donors may emphasize the importance of Resettlement Regulation for the Construction of involving the host population in project benefits, few Large and Medium-sized Water Conservancy planning documents attempt to calculate the size of Projects, Article 2 states that "all resettlers shall be the host population. Aside from time, personnel and assisted to improve or at least restore their former liv- financial constraints to enumeration, there is a prob- ing standards in steps." lem of defining who is a host. The simplest way would be to restrict enumeration to inhabitants of set- SUSTAINABILIfY tlements that physically receive resettlers, but that The difficulty of sustaining a successful resettle- would place too much emphasis on the housing com- ment process into the next generation has been seri- ponent as opposed to the impact of those resettled on ouslv underestimated. There are two major reasons. the arable and grazing lands and other natural The first is the tendency for the large majority of resources, as well as employment opportunities and donor-funded and government projects to deal only social services of the recipients. Since resettlement with the initial years of resettlement. Project comple- always reduces access of a recipient population to tion reports are finalized at too early a date to be able land, all such recipients should be considered hosts. to assess whether or not initial success is sustainable. The second is the absence of research that deals with Even when political leaders among the host popu- resettlement's later stages. As global populations lation agree to the movement of resettlers into their increase and habitats degrade, resettlement areas are midst (as was the case at Kariba), sooner or later con- increasingly problem-prone, with more people com- flicts between the two can be expected. They arise peting for less resources. Relatively unpopulated because of competition of a larger population over a rural resettlement areas are apt to have a less favor- diminished (in terms of per capita) land base, as well able natural resource base, in terms of land and water as over access to job opportunities, social services supplies, than the resettlers' habitats of origin-that and political power. Conflicts over grazing can be is why they are relatively unpopulated to start with. expected from the start (as illustrated by the Indian Elsewhere, whether rural or urban, resettlement usu- Krishna subproject), while securing adequate provi- ally increases population densities with resettlers, sions of water, forage and sustenance for livestock hosts and immigrants competing for natural are chronic weaknesses of resettlement programs. resources, jobs and other employment opportunities, Conflicts over arable land can be expected to intensi- social services and political influence. fy as the children of resettlers and hosts seek fields to support newly established families. Since political Whether in Africa, Asia, Latin America or the leaders are apt to welcome resettlers as a means of Middle East, land for agriculture is becoming less enlarging their constituencies, their resentment can available for farming populations. Planners talk about be expected to grow when initially hesitant resettlers replacing land with jobs, forgetting that land is a heri- appoint their own leaders, some of whom may take table resource that can support generations of fami- over the position of host leaders, especially where lies while jobs, if they are permanent, are rarely heri- resettlers are in the majority. table, and therefore only benefit a single generation. I am especially concerned by the lack of attention Few resettlement projects have been documented paid by policy-makers and planners to passing on a where host-resettler conflict has not appeared. In the viable resettlement habitat to a second generation. Lusitu resettlement area for the Kariba project, where Social Impacts of Large Dam Projects 51 LARGE DAMS: Learning from the Past, Looking at the Future resettlers outnumbered the host population, initially Unfortunately, such incorporation of the host popula- relationships between the two categories were good. tion within resettlement programs is rare. One of the That was in the late 1950s and early 1960s. Then few examples relates to planning rather than imple- land was plentiful, with hosts providing fields to reset- mentation, but it comes from China, where Three tler "friends" in return for various kinds of assistance. Gorges planners have included the hosts within their Today those hosts increasingly are requesting the agricultural development program should the dam be return of that land, while their chief has accused the built. chief of the resettlers of usurping his custodianship of the land. Granted the importance of incorporating hosts within project development plans, the treatment of In Mahaweli's System H, nervous Sri Lankan host populations in the initial draft of the World resettlers and voluntary settlers told Vimaladharma Bank's current reformatting of the 1990 resettlement and the author of threats by the host population to Operational Directive (OD 4.30) into a set of drive them off project lands which originally Operational Policies, Bank Procedures and Good belonged to the hosts. In the catchment surrounding Practices is a step backward. OD 4.30 states that the Kotmale reservoir basin, where over 40 percent plans "should address and mitigate resettlement's of the Kotmale Dam resettlers chose to stay, Ben-Ami impact on host populations ... Conditions and ser- reported that the combination of increased popula- vices in host communities should improve, or at least tion densities and environmental degradation was not deteriorate." The emphasis on improvement is creating a critical situation not just for the habitat but dropped, however, in BP 4.12 Annex A (), having also in regard to conflicts between the resettlers and been moved into the advisory Good Practices (para- the host population (1989 verbal communication). graph 12). Some ten years after resettlement in connection The change is a major one, since the connotation with Ghana's Kpong Dam, fighting broke out in early of mitigation is the reduction of negative impacts on 1989 between resettlers in one of the six villages and the host as opposed to implementing policies that the host population. At least ten people died. In that incorporate both resettlers and hosts within a pro- situation, conflict was triggered by the decision of the ject's benefits. Since the potential for resettler-host resettlers to fill a chieftaincy vacancy with one of conflict is an ever-present one, not to require that their own people. Pointing out that their current land hosts also benefit is a short-sighted policy that can be had been given to them by the government, they expected to cause eventual conflict. insisted on their right to appoint their own chief. The hosts disagreed and fighting--no doubt exacerbated by tensions over arable land and grazing-broke out. 7. OTHER PROJECT AFFECTED PEOPLE (OPAPS) It is best to anticipate from the outset the inevitability of host-resettler conflicts. The best Large-scale river basin development projects speed approach for minimizing theni is to provide the host the incorporation of all project affected people, population with access to at least some of the including resettlers and hosts, within wider political improved social services and economic development economies. Theoretically that should be a plus in opportunities intended for the resettlers. While such terms of potential national development-.. Studies an approach will increase the financial costs of reset- completed among affected rural populations suggest, tlement in the short run, in the long run it will however, that such incorporation over the longer enhance the possibility of multiplier effects as well as term is more apt to reduce rather than improve the reduce the intensity of conflict. Access to new living standards of a majority. This certainly has schools and medical facilities, as well as to extension been the case with Kariba, the first main stream dam services, is probably the chea]pest approach. These on the Zambezi. Today, nearly forty years after pro- services are necessary but in most cases not suffi- ject completion, the majority of the more than cient, simply because increased population densities 100,000 project affected people in the reservoir basin sooner or later will require some intensification of are worse off due to environmental degradation and production among both hosts and resettlers. inadequate development influenced by resettlement- 52 Social Impacts of Large Dam Projects LARGE DAMS: Learning from the Past, Looking at the Future related increases in population densities, higher adult people are dependent on the productivity of those mortality rates, reduced incomes and social disorga- wetlands and flood plains. Where dams reduce them, nization. Hundreds of thousands of downstream ripar- local people are impoverished. Developers and ian residents are also worse off due to the adverse donors rarely take that into consideration. If they effects of the Kariba and Cahora Bassa dams on had in the past, and the necessary broader feasibility reduced Zambezi flows, and especially reduced annu- studies had been carried out, many completed pro- al flooding, on their production systems. The time jects would have been shown to be uneconomic. factor has been important, with conditions worsening as the years go on. Flood plain utilization has played a major role in the formation of city states and of civilization in On the other hand, millions of downstream rural Africa, Asia, the Middle East and the Americas, as residents between the Aswan High Dam and the shown by archaeological studies. Oddly, few socioe- Mediterranean are probably better off today than conomic studies have dealt in detail with the contem- they were before the dam due to improved irrigation, porary utilization of flood plains. Those that have flood control and rural electrification (White, 1988). been done emphasize the extent to which flood plains But are such benefits sustainable over the longer constitute by far the most important resource in local term? In an analysis of the impact of the High Dam production systems (Scudder, 1962, 1980 and 1991; and other factors such as rising sea level on Nile Horowitz, Salem-Murdock et al., 1990). Annual flood- delta erosion, a recent conclusion is "no" (Stanley and ing is not only critical for maintaining that resource, Warne, 1993). Egypt's breadbasket, the delta is by but for the survival of dependent communities. As far the nation's most important agricultural resource. floods recede, for example, communities throughout There, however, "human intervention ... has caused the arid and semi-arid lands of Africa practice flood northern Egypt to cease as a balanced delta system." recession agriculture. As the dry season progresses, After postulating a range of interventions for revers- the much higher carrying capacity of flood plain graz- ing declining conditions, caused, among other fac- ing allows cattle and small ruminants to survive until tors, by loss in the High Dam reservoir of the Nile's the coming of the rains, while the flood cycle itself is high sediment load, the authors conclude that "at cur- necessary for sustaining productive fisheries and rent levels of population growth ... these measures recharging aquifers. will be inadequate." (page 634). DAMS AND FLOOD REGULARIZATION DOWNSTREAM PROJECT Aside from run-of-the-river installations, a major AFFECTED PEOPLE function of dam construction is to regularize a river's Very few detailed studies have been made of the annual regime by augmenting low-flow periods and impacts of large dams on the many millions of people greatly reducing periods of flooding in order to make living downstream, the assumption being that flood available a more constant water supply for hydropow- control benefits would more than compensate for any er generation, navigation and commercial irrigation. disbenefits. Worldwide, informed people are begin- Though few detailed studies have been completed on ning to realize, for several reasons, just how wrong the impacts of such regularization, those that exist that assumption is. As in the Mississippi and Rhine have shown them to have a devastating effect on mil- river basins, various flood control mechanisms have, lions of people (Drijver and Marchand, 1985; in conjunction with urbanization, led to increased Horowitz, Salem-Murdock et al., 1990; Adams, 1992; flooding by reducing farm land and water absorptive Hollis et al., 1993; Scudder, 1994; and Acreman and wetlands and channeling more and more water into a Hollis, 1996). river's primary channel. That is one reason. The topic has been best researched in West Africa Another reason is the growing realization of the in connection with mainstream dams on the Senegal very high productivity of riverine habitats, wetlands River and a number of dams in Nigeria. After three in particular (IUCN, ongoing), and the need to years of studies, an Institute for Development enhance rather than reduce their extent and produc- Anthropology team showed that the Manantali dam, tivity. Related to that, a third reason-of primary con- as managed by the trinational Senegal Valley cern here-is the fact that millions of contemporary Development Authority (OMVS), was adversely Social Impacts of Large Dam Projects 53 LARGE DAMS: Learning from the IPast, Looking at the Future affecting up to 500,000 people below the dam Advocates of the project point out that virtually no (Horowitz, Salem-Murdock et al., 1990). In his 1994 compulsory relocation is necessary, the engineering analysis of the Kainji Dam project on the Niger, works and reservoirs require the movement of not a Roder notes that adverse downstream impacts single Cree village. Rather the only relocation, and include an estimated 60 to 70 percent reduction in the numbers of people are probably less than a few hun- riverine fishery and a 30 percent reduction of season- dred, pertains to a relatively small number of trapline ally flooded (fadama) land that has lowered swamp camps. Most of those, if not all, can be re-sited within rice production by 18 percenit. Although I have seen each family's trapping territory, so that the number of no confirmation of his figures, in a 1979 FAO techni- hosts is even smaller. In other words, well over 90 cal paper (Welcomme) Awachie stated that Kainji had percent of the people (OPACs) adversely affected by also been at least partially responsible for a 100,000- the project are neither resettlers nor hosts. ton reduction in yam produc.tion further downriver, in which case we can assume that the dam's impover- SOCIAL IMPACTS (THE 1975 JAMES BAY ishing effects involved hundreds of thousands of peo- AND NORTHERN QUEBEC AGREEMENT) ple. On a Niger tributary further upriver, Adams At the time Quebec's premier announced the (1993) estimates that the costs of the Bakolori Dam James Bay Project, in April 1971, there had been no to downstream villagers in terms of reduced crop, Cree involvement in project planning or design, nor livestock and fisheries production actually exceeds had any form of social impact analysis been carried the benefits realized from the project. out. With construction already under way by the mid- 1970s, the emerging Cree leadership believed, proba- Elsewhere in Nigeria, dams constructed mainly for bly correctly, that they had little hope of stopping the irrigation purposes in the Hadejia-Jama' are system first phase of the project. By agreeing to its imple- have significantly reduced downstream flood plains- mentation and becoming signatories of the JBNQA, once again at the expense of local producers. Indeed, at least they received in return a promise of a degree in at least one major case, evidence suggests another of self-government and an innovative program for project-related loss, with Barbier et al. demonstrating maintaining trapping, hunting and fishing activities. that the net economic benefits of flood plains that have been significantly reduced by river control Such benefits led anthropologist Richard Salisbury mechanisms were at least $32 per 1,000 cubic meters and other friends of the Cree to see JBNQA in a posi- of water versus only $0.0026 for the irrigated Kano tive light. Certainly it had an impact-mitigating influ- Project when all costs (including operational costs) ence. More important, it led to the formation of the are included (referenced in Acreman and Hollis, Grand Council of the Cree and the Cree Regional 1996; see also Hollis, Adams and Aminu-Kano, 1993). Authority, which provided the Cree with a degree of political self-determination and an institutional struc- THOSE WITHIN A PRoJECT'S VICINlTY: ture for facilitating economic development. On the THE JAMES BAY PROJECT AND THE CREE other hand, the land settlement provisions of the Hydro-Quebec's James Bay Project provides an JBNQA split the Cree into eight geographically isolat- excellent case history in that it illustrates the impov- ed bands whose exclusive control of surface rights erishing impact on an entire culture area (as opposed involved only 5 percent of their former lands, with to just resettlers and hosts), and the difficulties that another 15 percent set aside for their exclusive hunt- local people must face in trying to modify, let alone ing, fishing and gathering. Aside from preferential cancel, projects. Like the Lesotho Highlands Water access for the Cree to certain mammals, the remain- Project, the James Bay Project is one of the five ing 80 percent in effect was handed over to Quebec's largest contemporary river basin development pro- James Bay Development Corporation. jects in the world. If completed, the total generating capacity of more than twelve dams would be about The implementation of the La Grande Phase has 25,000 megawatts, of which the generating facilities had two quite different types of negative impact. One for 10,000 megawatts have either already been com- is the mercury contamination of reservoir fish (with pleted or are under construction in the first (La inundation increasing the release of methyl mer- Grande) phase. cury), to the extent that mercury contamination of some Cree, for whom fish are an all-important dietary 54 Social Impacts of Large Dam Projects LARGE DAMS: Learning from the Past, Looking at the Future component, significantly exceeds World Health tence of available and otherwise unemployed man- Organization standards. Causality there can rather power. There are several reasons for this situation. easily be ascertained. Such is not the case with the Most important is the fact that local people seldom other type of impact, which includes a high incidence have the skills required by contractors, with crash of sexually transmitted diseases (STDs) and such training programs seldom bringing skills up to the social pathologies as increasing spousal abuse and desired level-as the Lesotho Highlands Water suicide, especially among young women. Unlike the Project found out. Moreover, contractors often bring situation on other reservations in both Canada and a significant portion of their labor force with them or the United States, the Cree have been able to avoid a recruit immigrant workers with previous construc- dependency on provincial and federal welfare. tion experience. On completion of China's Gezouba Unemployment insurance, for example, and aid to Dam, for example, many of the 40,000 workers stayed dependent children make up a relatively small pro- in the area expecting to join the labor force for the portion of Cree income: only 6 percent in 1985, for construction of the Three Gorges Dam. example. Can the increasing rates of STDs and social pathologies be associated, therefore, with the project- Though a small minority of temporary workers related, accelerated rates of contact with outsiders choose to remain in the area after their contracts end, and outside ideas, which Cree elders and leaders also most immigrants come after the completion of the tend to associate with an erosion of cultural values? construction phase. Seeking the new opportunities Quite possibly they can. created by the project, they frequently are able to out- compete local people. Two major benefits of large To summarize, the James Bay Cree agreed to the dams are the reservoir fishery and irrigation. project in the 1970s in return for a degree of political Though both involve project affected people as well self-sufficiency at the expense of maintaining control as immigrants, the latter tend to dominate unless a over the development of their homeland. Thereafter special effort is made to select and increase the com- neither the federal government of Canada nor petitive abilities of local people. Quebec Province delivered what they had promised the Cree under the James Bay and Northern Quebec Agreement. Furthermore, the James Bay 9. PROJECTAFFECTED PEOPLE AND Development Corporation has largely ignored the RESISTANCE MOVEMENTS Cree in planning and implementing development pro- jects. Tourist and other facilities along the north- Planners are apt to attribute local opposition to south access road, which fell under JBDC jurisdic- large dams to outside agitators. The British colonial tion, were almost exclusively run by outsiders in 1994 administration blamed resistance to Kariba on the with minimal Cree involvement, including employ- north bank of the Zambezi, for example, on the grow- ment. ing influence of external political organizers agitating for national independence. That was in the late 1950s. When approximately 1,000 local citizens vili- 8. IMMIGRANTS fied senior officials at a meeting to protest the arrival of equipment in late 1990 for initiating the first phase Immigrants, both temporary and permanent, from of the Southern Okavango Integrated Water without a particular river basin are major beneficia- Development Project (SOIWDP), the government of ries of river basin development projects. The largest Botswana blamed international environmentalists and number of temporary immigrants are associated with largely expatriate-owned, safari firm interests. a project's construction phase. While employment on advanced infrastructural and the main civil engineer- In both the Kariba and Okavango cases, however, ing contracts are often listed as a benefit for local peo- resistance came primarily from project affected peo- ple, in fact local workers tend to be only a small ple who believed construction would be at their minority of the labor force. For example, during con- expense (Colson, 1971; Scudder et al., 1993). struction of the first stage (La Grande) of the James Opposition in both cases appeared to be close to uni- Bay Project in Quebec, less than 5 percent of the versal. Among project affected people in SOIWDP's labor force were Cree Indians, in spite of the exis- impact areas, opposition was based on the people's Social Impacts of Large Dam Projects 55 LARGE DAMS: Learning from the l'ast, Looking at the Future conviction that their lives had deteriorated following Baleine Project. previous attempts to manipulate Okavango flows. The misgivings of those affected by Kariba have been shown to be correct: inundation of the fertile alluvial 10. HELPING PROJECT AFFECTED soils cultivated by villagers before removal has been PEOPLE BECOME BENEFICIIARIES one factor in the deterioration of their living stan- dards in recent decades. INCREASING LOCAL PARTICIP'ATION In recent years, governments, dono:rs, academics Todae,res i mo vementsohae inolved and NGOs all have been emphasizing the need for resettlers more than hosts and other project affected local people to have greater involvement in project people (Scudder, in press). WIorldwide, with only a lan implementatin mnagement an evajua- few exceptions, a majority of those involved in thou- tion. That emphasis is welcome andl important. As sands of water resource development projects have with the implementation of plans that actually make resisted removal. Exceptions themselves are illumi- project affected people beneficiaries, however, the nating. The construction of the Aswan High Dam in extent to which local people have actually been the 1960s appears to have been welcomed by those involved has been disappointing. Aside from lack of remaining in Nubia only because the earlier construc- political will on the part of governments to actually tion of the Aswan Dam, plus two dam heightenings, decentralize decision making, there are several had so impoverished those who had relocated to the issues that must be dealt with. reservoir margins that up to 100 percent of the men in some of the villages closest to the dam had to seek One is a difference in definition as to what local employment in the urban centers of Egypt and the participation means. In Botswana, for example, gov- Sudan. Resettlement in the 1960s was welcomed by ernment presents its use of customary meetings, at men and women alike because they believed it would which local people discuss vital issues with their lead- reunite families in the downstream Kom Ombo reset- ers, as a form of local participation. Such meetings tlement area that had been split up because of earlier are used more to inform local people of the govern- relocation impacts. In the case of TVA's Norris Dam, ment's intentions, and to solicit their reactions to the majority initially welcomed the project because, those intentions, than to actually involve them in the as tenant farmers and poor land owners, they planning process. A second issue relates to govern- believed, erroneously, that completion would bring ment and donor hesitation to link decentralization of industry and higher-paying in,dustrial jobs. decision-making with decentralization of financial resources for implementing those decisions; yet the Looking to the future, resistance movements can firs wihu h eodsmaiges be expected to increase because of the increasing opposition-as currently in Brazil and India-of A third issue relates to local populations them- national and international hurnan rights and environ- selves. Ironically, increased emphasis on the need for mental NGOs who are willing to become advocates local participation is occurring at a time when cus- for project affected people. Their arguments in turn tomary participatory institutions are weakening will be supported by increasing emphasis on the because of increasing incorporation of ]local commu- rehabilitation and reorientation of existing facilities, nities within wider political economies. Whether by by the extent to which benefits have been overesti- governments, donors or local people themselves, mated and costs-especially to project affected peo- increasing emphasis is being placed on private own- ple and the environment-underestimated, and by ership of resources as opposed to customary systems increasing evidence that greater benefits in many based on limited access to communal resources. cases can accrue from the implementation of alterna- Within communities, educated individuals are placing tives that do not require major engineering works. increasing emphasis on the household as opposed to The growing sophistication and recent international extended kin groups and customary institutions of networking of indigenous people affected by major cooperation, such as work parties. Moreover, house- projects will also strengthen resistance-for example, holds themselves are becoming increasingly fraction- the James Bay Cree played a major role in the sus- ated due to differing interests among rrmembers pension during 1994 of Hydro-Quebec's Grande- (Dwyer and Bruce, 1988). 56 Social Impacts of Large Dam Projects LARGE DAMS: Leaming from the Past, Looking at the Future Such circumstances, including also the increasing local markets so that local people would not have to differentiation within communities, must be dealt make expensive, and often futile, trips to district and with if local participation is to play the role it should other government centers. in improving the living standards of project affected people. A prerequisite will be participatory appraisal Regardless the type of institutions utilized or devel- (Kumar, 1993), whereby local people and planners oped, effective local participation must involve a work together to determine how best to institutional- much broader range of actors than just project affect- ize local participation. In some cases, customary insti- ed people. At the national level, commitment must be tutions such as funeral and other social welfare reflected in the necessary legislative and judicial groupings and cooperative labor parties may be framework. Where revenue-sharing occurs too late in adjusted to new conditions. More often, however, new the project cycle-as in China, where revenue for institutional forms will probably be required. An development purposes comes primarily from electrici- effective example of this is the Grand Council of the ty sales-multilateral, bilateral and NGO donors may Cree, which arose during the 1970s in response to be asked to provide some funding. The assistance of the Province of Quebec's James Bay Project. Another NGOs in institution-building would also be necessary institution extending beyond specific communities, in many cases. So, too, would the private sector's which would appear to be especially applicable to pro- involvement in various joint ventures with local com- ject affected people clustered within a defined area, is munities, such as linking agricultural outgrowers to a People's Trust (Reynolds, 1981). Proposed as a processing facilities, or developing tourism or other Highlands Trust for the Lesotho Highlands Water nonfarm industries. Assistance from universities and Project (Maema and Reynolds, in press), the People's research institutions could also be anticipated for Trust idea also would be especially applicable to the helping project affected people develop appropriate 11,000 Cree affected by the James Bay Project. monitoring and evaluation capabilities. Key features of a People's Trust involve placing IRRIGATION funds allocated for benefiting local people in a trust Advantages under their control. Such funds should be available at A major option for assisting project affected people the beginning of the project cycle so that local people to become beneficiaries is to incorporate them within can be actively involved during feasibility studies. irrigation schemes. One of the best examples of such Although it did not extend beyond such studies, one incorporation was during the earlier phases (Systems recent example is the instance in which Hydro- H and C of Sri Lanka's Accelerated Mahaweli Project Quebec made funds available to the Grand Council of H resettlers anka'streate haweliven the reeso hattheycoud crryout hei ow anly- where resettlers and downstream hosts were given the Cree so that they could carry out their own analy- priority over all other categories of participants. sis during the 1990s of the impacts of the Grande- Baleine component of the James Bay Project. If well-designed, implemented, managed and main- Should a decision be made to proceed with a pro- tained, major irrigation schemes can produce signifi- ject, funds allocated for resettler, host and other pro- cant increases in both production and living stan- ject affected people's development would be added to dards in an environmentally sustainable fashion. the Peoples'oTrust. Trustees would be locally select- There are examples of such successes from all geo- ed from project affected people, rather than govern- graphical areas. Adjacent communities (those not ment officials, and would have the authority to decide within command areas) may also benefit in a major how those funds should be used, while at the same fashion, as Epstein's Indian research in Karnataka time, subject to the appropriate oversight. Other fea- has shown (1962 and 1973), while Goldschmidt's tures of the trust concept look especially attractive if research in California's Central Valley showed that applied to project affected people. One is its linkage irrigahon schemes based on family farms can be to a hierarchy of periodic markets that link local com- expected to generate more multiplier effects in terms munities as producers to government administrative of enterprise development and employment genera- centers as providers of services. Government and pri- tion in market and service centers than large-scale vate-sector institutions (such as banks providing cred- agribusinesses (1978). it), for example, would send representatives to the Social Impacts of Large Dam Projects 57 LARGE DAMS: Learning from the Flast, Looking at the Future Disadvantages designed and maintained. Environmental problems The most disadvantageous situation for project affecting project life include siltation of reservoirs, affected people is when they are not only unincorpo- water logging and salinization, and loss of biodiversi- rated within an irrigation project, but are actually ty. Public health problems include increased inci- evicted from their land to make way for it. There are dence of malaria, schistosomiasis and other water- innumerable cases where the land base of unincorpo- borne diseases, as well as dysenteries. rated project affected people has been reduced to Socioeconomic problems arise from insecurity of make way for irrigation projects on which govern- tenure and poor land preparation and water distribu- ment selected settlers are predominantly immigrants. tion as well as from poorly designed production and Although cases where hosts to a scheme are evicted marketing systems that prevent settler households from their lands without compensation are far fewer, from raising their living standards beyond a subsis- the danger exists that their proportion is increasing tence level. A separate problem is the frequency with as more and more people compete for less and less which focus on a single cash crop lowers the status of natural resources. Large dams are especially vulnera- women, especially in cases where they had their own ble to political considerations (Fredericksen, 1992; pre-project fields or crops. Notwithstanding such Ribeiro, 1994; and Waterbury, 1979), with large-scale problems, incorporation within an irrigation project is projects frequently influenced by the political ideolo- still a better option for project affected people than gies of heads of state (Scudder, 1994). exclusion. Technical and participatory (e.g., water use associations) solutions to all of the above disad- As land and water resource!s become scarcer, polit- vantages exist and are well known. What is lacking is ical elites will be increasingly tempted to either their incorporation within plans followed by their access them or use them to achieve political goals. implementation. Three examples illustrate the risks to project affected people. In recent years the governments of both RESERVOIR FISHERIES Mauritania and Somalia passed land registration acts Critics of large dams have tended to underestimate that favor individual tenure of those with capital over the importance of reservoir fisheries for project customary systems of land tenure at the village level. affected people. In order to make theni beneficiaries. In both cases, politically well-connected immigrants however, training and technical assistance are in search of land to irrigate have used those acts to required, as is protection of the entry of project displace local people below the Manantali Dam on the affected people during the early years of a new fish- Senegal River and the proposed Baardeera Dam on ery. Otherwise, more competitive fishers from exist- the Juba River. In the third caLse, a cabal within the ing reservoirs and natural water bodies can be Mahaweli Authority of Sri Lanka plotted to displace expected to dominate the new fishery as has been the Tamil-speaking hosts from now arable lands in a later case with Ghana's Volta reservoir (still the largest phase (left bank of System B) of the Mahaweli project artificial reservoir in the world) and Mali's Manantali by a massive land invasion of poor Singala-speaking Reservoir. settlers in order to split in half the Tamil-speaking minority to the north and east (Gunaratna, 1988). The development of the Lake Kariba reservoir fish- Though the land invasion failed, government-stated ery illustrates effective ways for incorporating project policies to not mix settlers of different religious affili- affected people. For an initial five-year period the fish- ation in the same community, and to select settlers ery was closed to immigrants. During that time a from all ethnic groups according to their percentage training center was built that offered short courses to in the national population, have been ignored. In small-scale commercial fishermen. Improved boats spite of major international funding in all three exam- were designed with local carpenters trained in their ples, in no case did donors (the World Bank included manufacture. Credit was made available to buy boats in two of those cases) try to intervene. and other gear. Lakeside markets were provided with accessible feeder roads for exporting fresh and Disadvantages where project affected people are smoked sun-dried fish. included within irrigation projects are the same as those for all participants where projects are poorly Although they did not previously have the technol- ogy for fishing mainstream Zambezi waters, the 58 Social Impacts of Large Dam Projects LARGE DAMS: Learning from the Past, Looking at the Future response from local people was rapid, with over 2,000 the last few years purchase of rigs by local councils resettlers, hosts and other project affected people and NGOs has begun to bring a larger share of the catching over 3,000 tons annually within a four-year benefits to at least some local communities. period. Not only were loan repayments over 90 per- cent, but savings were invested in ways that enabled IMPROVED DESIGN AND MANAGEMENT a majority of fishermen to shift to other activities OF EXISTING AND FUTURE ENGINEERING when the now predictable decline in the reservoir's WORKS FOR MAKING CONTROLLED initial productivity occurred. Especially important RELEASES was investment in cattle (and especially plow oxen), Where dams are to be constructed, the design and which played a major role in the rapid development of operations should include controlled flood releases at mixed farming, including cash cropping of cotton and strategic times for the benefit of downstream users cereals and sale of livestock by small landholders. and habitats (Scudder, 1991; Acreman and Hollis, Small village stores and other commercial enterprises 1996). In exceptional cases such releases may be were also established. Education of children was negotiated after construction, as with South Africa's emphasized, which allowed many children to proceed Pongolapoort Dam and the Manantali Dam on the on to a secondary school education, and higher earn- Senegal. However, since dam design may preclude ing opportunities, which their families otherwise them, the best approach is an attempt to influence could not have afforded. The fishery also provided a policy during the planning and design stage. major mechanism for further incorporating village women within a market economy by providing them Controlled flooding is a relatively new concept pri- with an outlet for the sale of village produce and the marily initiated by researchers and planners. Local manufacture of beer within the fish camps. residents, when involved, have been highly support- ive. Government responses have been mixed, while The major policy failing was not anticipating the donors have largely ignored such an option. decline in productivity that characterizes the forma- Controlled flooding is not a panacea, however. It may tion of new water bodies. Anticipatory planning can at involve trade-offs with hydropower generation, for least partially compensate for such a decline by example, and floods released may be ill-timed or expanding the fishery to capture a wider range of insufficient to offset dam-induced downstream costs. species and to use a wider range of techniques. Use of cages, as in Indonesia and China, has the potential Nonetheless, where feasible, the advantages of of significantly increasing production. Other means controlled floodwater releases can be expected to out- include placing barriers across inlets to create small weigh disadvantages. The best examples are where water bodies when reservoir levels rise so they then previously constructed dams were unable to retain can be stocked with fingerlings and fertilized. flood magnitude with the result that sluices were Appropriate introductions can also significantly raise built to pass, for the benefit of downstream habitats productivity. While landings during the height of the and users, silt and nutrient-laden waters during the Kariba gillnet fishery between 1963 and 1964 proba- initial flood. Those sluices were then closed to cap- bly did not exceed 7,000 tons annually, stocking of ture in the reservoir what were then relatively silt- the reservoir's open waters during the late 1960s with free flows, the original Aswan Dam being one exam- a small sardine-like fish (Limnothrissa miodon) can ple. While some contemporary dams, such as the produce annual yields of approximately 20,000 tons. Aswan High Dam and Kariba, were not designed to allow controlled flooding, others, such as Cahora The Limnothrissa fishery, however, is capital-inten- Bassa further downstream on the Zambezi, could be sive and until recently all equipment has been owned so operated to benefit downstream wetlands, includ- by immigrant entrepreneurs. Nonetheless, employ- ing the important delta and riparian communities. In ment of over 1,000 local people on the fishing rigs off-shore waters, according to Gammelsrod, catch per and in processing and marketing activities has provid- unit effort of shrimp could be increased by 17 per- ed an important source of income in an otherwise cent along the Sofala Bank by altering distribution of suffering economy (Scudder, 1993). An incentive sys- run-off. Even when such operations might reduce tem based on nightly catches has increased yields hydropower generation, developing international and income for both owners and employees. And in grids, as is currently the case in Southern Africa, Social Impacts of Large Dam Projects 59 LARGE DAMS: Learning from the Past, Looking at the Future would allow individual dams to serve a wider range of from the recently completed Manantali Dam on the development purposes. Senegal River and dams in Nigeria's Hadejia-Nguru system. Based on several years' analysis of the Advantages importance of natural flows for over 500,000 riverine The Aswan Dam, as originally built in 1902 and inhabitants, the Senegal research has shown that eco- heightened in 1913 and 1933, was designed to pass nomic benefits accruing from controlled releases most of the silt-laden annual llood of the Nile through from the Manantali Dam would significantly exceed its sluices. In recent years the importance of such any costs arising from reduced hydropower genera- releases have been emphasized for a number of rea- tion (Horowitz, Salem-Murdock et al., -1990; Salem- sons. Williams' analysis has shown that properly Murdock, 1996). managed releases from the America River's Folsum Dam in California would preclude the need for fur- Similar conclusions have been reached by govern- ther dam construction, includiing that of the Auburn ment officials and academics alike in regard to Dam (1993). California is also pioneering controlled Nigeria's Hadajia-Nguru river basin, where the bene- releases for the benefit of fishleries and the ecological fits from controlled releases are significantly greater health of the Sacramento Delta. than use of the same water on government-managed irrigation schemes (Hollis et al., 1993; Acreman and Controlled releases for the benefit of project affect- Hollis, 1996). A third example comes from South ed communities is a more recent concept (Scudder, Africa's Pongola River Basin in the province of Natal- 1980), which has been tested in only a few cases. KwaZulu. When an intended irrigation project there Theoretically, both reservoir basin communities and failed to materialize below the Pongolapoort Dam, communities below a dam should benefit. Where fisheries biologists recommended experimentation dams are located well upstream, downstream benefi- with controlled releases for the benefit of down- ciaries could number in the millions. For them, stream fisheries. Subsequently, experimentation was increased flooding by well-timed controlled releases expanded for the benefit of all aspects of the local would benefit fisheries and recharge aquifers for the economy, including flood recession agriculture and benefit of community wells and riparian forests. pasture. Initially, the affected communities did not Farmers once again could practice some of the flood participate in making decisions about the timing and recession agriculture that a more regularized regime duration of releases. More recently, however, they would have curtailed. They would also benefit from have been brought into the decision-making process an increase in flood recessional grazing. through the formation of water committees and a water committee executive (Bruwer, Pcultney and Within reservoir basins, controlled releases would Nyathi, 1996). also increase the extent of the drawdown area for both recessional cultivation and grazing. Both have Disadvantages proven to be valuable, and underestimated, benefits While controlled flooding can improve the produc- for lakeside communities. Drawdown cultivation at tivity of wetlands and riverine communities, in most Lake Kariba, for example, has provided the most cases the economies of those concerned would be important single source of food for thousands of peo- better served by the natural flood regimne. As Hughes ple during five serious drought years since the early has shown for Kenya's Tana River and generalized for 1980s. Drawdown areas around Ghana's Lake Volta other African flood plains (1988), even extreme floods provide an important source of vegetables, while resi- play a vital role in the maintenance of flood plain pro- dents in the Kainji Lake basin reap and sell draw- ductivity. down fodder. In none of those cases, however, were dams designed to expedite controlled downstream There are also policy, technical and environmental flows. If they had been, the benefits to lakeside com- constraints to the implementation of controlled munities, as well as to downstream residents, would releases. Current droughts in western, central and be significantly increased. southern Africa's semi-arid lands have adversely affected river flows, making it more difficult to work Careful research has attempted to quantify the out the type of suboptimization strategies that con- benefits that would accrue from controlled releases trolled flooding would involve. Since the early 1980s, 60 Social Impacts of Large Dam Projects LARGE DAMS: Learning from the Past, Looking at the Future for example, Zambezi flows have been only approxi- ACTIONS TAKEN OR INTENDED mately 50 percent of what they were during the previ- BY THE WORLD BANK ous 20 years, while reduced intakes into the Ivory In the final section of their 1994 review, the World Coast's Kossou Reservoir and Ghana's Volta Bank lists a series of "Actions to Improve Reservoir have had adverse economic effects on Performance." All are important; they warrant sum- occasion. Even without drought conditions, the mag- marizing here. Most important is the recommenda- nitude, timing and duration of controlled releases tion to improve project design in ways that "avoid or may not have the desired effect on productivity, as reduce displacement." Some success has already illustrated by releases from Zambia's Iteshiteshi Dam been achieved in this area on previously Bank- for the benefit of downstream communities using the financed projects (Indonesia's Saguling and China's wetlands resources of the Kafue Flats (Acreman and Shuikou, for example). In the Saguling case, lowering Hollis, 1996). the height of the dam five meters during the design Technical constraints relate to capacities to know stage reduced resettlement by nearly 50 percent. In whenchomeleaseflcons s inelhate volume for what dura- the Shuikou case, protective works around Nanping when to release flows in what volume for what dura- City at the top of the reservoir, and similar works tion. The necessary knowledge requires operation around several towns, also reduced resettlement sig- and maintenance of a sophisticated hydromet net- work; its utilization requires well-qualified personnel. nificantly. Policy constraints are of several sorts. One is lack of To improve government capabilities, recommend- political will to make the necessary releases. ed strategic priorities were to "enhance the borrow- Notwithstanding the demonstrated economic and er's commitment" by only financing projects with environmental benefits, the tri-national Senegal River acceptable policies and legal frameworks, "enhance Basin Authority has been unwilling to make con- the borrower's institutional capacity," "provide ade- trolled releases that would benefit downstream ripari- quate Bank financing" and "diversify project vehi- an communities since the completion of the cles," whereby the Bank complements the financing Manantali Dam, even though operational turbines of physical infrastructure with stand-alone resettle- have yet to be installed. The releases that have been ment projects. Though too few have been funded to made were so poorly timed that they led to decreases date, financing stand-alone resettlement projects like rather than increases in local productivity (Horowitz, the $110 million credit for the Xiaolangdi project on 1991). China's Yellow River is especially important. Two rea- A second policy constraint is tied to the unfavor- sons are the increasing financial cost of adequate able rural-urban terms of trade that continue to char- resettlement and the fact that resettlement with ablerurl-ubanterm oftrae tat cntiue o car- development takes more time than constructing phys- acterize so many countries. While realizing longer- icalontrastructure-hene the constwing phys term economic returns that are in the national inter- ical infrastructure-hence the risk, as with Ghana's este contromicd returnestht anefin msth nation-intmer Kpong, that funds will be exhausted by the time they est, controlled releases benefit mostly low-income rural households at the short-term expense of either are needed unless they are from a protected source. the urban sector or farmers on commercial irrigation Other recommended strategic priorities include schemes. For example, the hydropower that would the need to "strengthen the Bank's institutional have to be foregone under some circumstances capacity" so as to improve the Bank's ability to deal would be more for the benefit of rural communities with the different stages of the project cycle, and to than of urban industrial and residential users. improve "the content and frequency of resettlement Donors also might favor maximizing power genera- supervision." Where possible, "remedial and retro- tion in order to facilitate debt repayment, since there fitting actions" are also emphasized in connection is no easy way to siphon off funds from the rising dis- with previously funded, but inadequately implement- posal incomes of hundred of thousands of low-income ed, Bank-assisted projects. One example is Kariba, rural households. where a rehabilitation study for project affected peo- ple by the University of Zambia's Institute for African studies is currently underway with funding though the World Bank and sponsorship through Zambia's Social Impacts of Large Dam Projects 61 LARGE DAMS: Leaming from the Past, Looking at the Future Electricity Supply Corporation (ZESCO). Finally, the tion activities had begun. The same was the case Bank emphasizes that more attention will be paid to with detailed socioeconomic studies carried out in promoting "people's participation" and NGO facilita- connection with System B of Sri Lanka's Accelerated tion of "local institutional development" (1994: 8/1- Mahaweli Project. 8/4). The only solution to this situation is to initiate the necessary pre-project benchmark studies much earli- 11. RESEARCH NEEDS er in the planning process. Much of the necessary data is required by the World Bank's guidelines, I have outlined elsewhere (Scudder, in press) a which state that borrowers must present a resettle- more detailed research agenda dealing with resettle- ment plan before project appraisal. Gathering data for ment. While there are a relatively large number of such a plan provides the opportunity fcir integrating studies, including several longitudinal ones, of the the necessary benchmark studies into the planning resettlement process, the same cannot be said of the process. Once again, however, all too often construc- other categories of project affected people. This defi- tion activities are apt to proceed more rapidly. ciency is especially serious in regard to large dams. Notwithstanding the fact that such projects frequent- While there is no alternative to undertaking ly are the largest in national development plans in detailed pre-project benchmark studies among poten- terms of financial costs and irmpacts on national tial resettlers, one reason why there are so few fol- heartlands, there are few projects for which imple- low-on studies relates to arguments among social sci- menting agencies or donors have completed a entists and statisticians regarding methLodologies for detailed, long-term evaluation. This omission is espe- monitoring and evaluation. Ideally, it would be advan- cially surprising in the case of the World Bank, which tageous to follow a statistically significant random has, in its Operations Evaluation Department, a time- sample drawn from the original benchmark studies. tested monitoring and evaluation capacity that only This, however, is seldom done because of time, per- now is beginning to focus on the necessary studies sonnel and financial constraints. These appear to be (World Bank, 1996). insurmountable in part because the delay in provid- ing results, a delay that can involve years as opposed The necessary studies will involve methodological to months, makes such follow-on studies of little use difficulties, especially in the assessment of cumula- for dealing with key issues as they arise. tive impacts (Dickson et al., 1994). Problems relate not just to changes that would. have occurred among One cost-effective solution is to select a small, affected people without a project, but also, in regard carefully stratified subsample of no moie than 50 to to longer-term cumulative impacts, to factoring out 100 households, which are re-interviewed over an the relevance of other post-project influences. Such extended time period once or twice annually. Use of problems must not be allowed, however, to put off indicators relating, for example, to housing, water further the necessary studies, since the few long- supply and sanitation, fuel and lighting and produc- term studies that have been undertaken, by acade- tion technology, linked with questions relating to mics largely, agree that longer term project-induced income and expenditures, allows the interviewer to social impacts have been seriously underestimated conclude within an hour whether living standards are (see, for example, Colson, 1971; Bartolome and improving, remaining the same or deteriorating. Barabas, 1990; and Scudder, 1993). Complementary questionnaires, following by group- focused interviews, can then be expected to identify A major problem concerns the inadequacy of pre- the causes for change or lack of change. Such a project benchmark studies against which subsequent methodology can provide planners with a problem- impacts can be assessed. Even where such studies oriented report within a six- to eight-week period. are undertaken, their initiation and completion tends to be out of phase with the engineering cycle. Hence in the case of the Lesotho Highlands Water Project, the completion of both epidemiological and socioeco- nomic benchmark studies occurred after construc- 62 Social Impacts: Of Large Dam Projects LARGE DAMS: Learning from the Past, Looking at the Future 12. CONCLUSIONS AND result that a host of unanticipated technical and eco- LESSONS LEARNED logical crises have emerged that now entail more political decisions." (op. cit: 4). An obvious and major conclusion is that the adverse social impacts of large dams have been seri- Ribeiro, who also used the phrase "hydropolitics" ously underestimated. Not only is a much larger in the title of his analysis of the binational number of people involved than acknowledged by (Argentina/Paraguay) Yacyreta High Dam, notes researchers, government planners and donors, but statements by Argentine specialists of better alterna- there has also been a failure to acknowledge the tives to Yacyreta in the form of smaller dams, better range and magnitude of impacts on the different cate- sites for high dams and use of natural gas (an alterna- gories of people; affects on resettlers, for example, tive equally applicable to Quebec's James Bay differing from those on hosts as well as on other pro- Project). He emphasizes several other factors sup- ject affected people living below dams. This situation porting the decision to proceed with Yacyreta. One is is partially due to a paucity of research, and especial- project-specific, involving competition between ly of research designed to assess long-term impacts. Argentina and Brazil (with its binational Itaipu High Dam) for "regional hegemony" (op.cit.: 45). The Another lesson learned, and one that has been other can be generalized to other national political insufficiently documented, is that large dam projects economies. Rejecting the word "development," are more apt to be subverted during implementation Ribeiro sees large-scale projects, like Yacyreta, as "a due to political and broader ideological considera- form of production linked to economic expansion" tions. Sri Lanka's Accelerated Mahaweli Project has into "outpost" areas (ibid, 163). already been mentioned as an example. Large dams are sponsored by a powerful coalition including Ribeiro's interpretation would also appear to be heads of state, multinational corporations of consult- applicable to both the James Bay Project and the ing engineers, contractors and suppliers, and multilat- Southern Okavango Integrated Water Development eral and bilateral donors. As Gustavo Lins Ribeiro Project (SOIVDP). In addition to economic expan- explains, multinational corporations to remain com- sion, the former project gives the province of Quebec petitive must move smoothly from one project to increased control over indigenous lands of ambigu- another; indeed, "they stimulate the market for them ous legal status as far as that province is concerned. by indicating and proposing new works" (1994: 50). SOIWDP would not only channel more water to the Their involvement is facilitated by bilateral donors diamond mines (and hence to the advantage of both linking favorable credit arrangements (as through the government and the DeBeers/Anglo-American export-import banks) to contracts for nationally multinational corporation), but also provide increased based firms and by the World Bank's insistence on access for Botswanan elite from the more densely International Competitive Bidding. populated eastern regions to Okavangan resources in the form of water for irrigation and grazing and water Heads of state like Franklin Roosevelt of the for cattle. Rhetoric aside, in neither project are the United States and Kwame Nkrumah of Ghana at least intended beneficiaries are supposed to be local peo- had visions, based on political ideologies and capital- ple. Impacts on such people are ignored or played intensive technology, of "their" projects stimulating down-to the extent possible-throughout the pro- regional development. It is this political component ject cycle. Appropriate assessment of those impacts, that John Waterbury has labeled "hydropolitics." because they are widespread, is expensive, which is According to the World Bank's Harald Fredericksen, another reason they are underassessed. 'The conditions encountered in a country's water sec- tor reflect the political demands and the wisdom and If more local people are to become beneficiaries, leadership in these matters more than any other fac- not only must World Bank-type guidelines for reset- tor" (1992: 4). In regard to specific cases, tlers be extended to all project affected people, but Waterbury's assessment of the Aswan High Dam con- the horizon of environment and social impact assess- cludes that "the history of this project is testimony to ments must be expanded to include all habitats and the primacy of political considerations determining human populations likely to be affected. The same virtually all technical choices with the predicted guidelines, however, must also be applied to other Social Impacts of Large Dam Projects 63 LARGE DAMS: Learning from the Past, Looking at the Future options, including, for example, increased reliance on Food and Agriculture Organization, 1979). coal-generated electricity. Should that be done, in many cases, other alternatives to major project works Bartolome, Miguel and Alicia Barabas. "La presa would be seen as preferable. And where major dams Cerro de Oro y el Ingeniero Gran Dios: continue to be the "least-cost alternative" such major Relocalizacion y Etnocidio Chinanteco en Mexico" changes in design and operation as controlled flood- (Col. Presencias, No.19 y 20. Mexico City: Consejo ing would be called for. National para la Cultura y las Artes, INI, 1990). Beijing Review, April 6, 1972. Ki I p 112c) HBilharz, Joy A., Ghosts of Broken Hearts and Laws: This paper is based on several recent manuscripts The Allezanv Senecas and the Kinzua Dam (Lincoln, including chapters on resettlement and on social Neb.: University of Nebraska Press, in press). impacts in Water Resources: Environmental Planning. Bruwer, C., Poultney, C. and Z. Nyathi, "Community- Management and Development, edited by Asit K. based hydrological management of the Phongolo Biswas (New York: McGraw Hill, 1997), as well as a floodplain," in M.C. Acreman and G.E. 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Williams, Philip B., "Assessing the True Value of Flood Control Reservoirs: The Experience of Folsom Dam in the February 1986 Flood," paper presented at Social Impacts of Large Dam Projects 67 LARGE DAMS: Learning from the Plast, Looking at the Future Key Issues To Be Addressed in a Future Review Process 1. The guidelines on issues relating to people impacted by the construction of large dams, issued by the World Bank and other donors, as well as borrowers, do not reflect the present state of knowledge In the case of the World Bank, Operational Directive 4 30 on Involuntary Resettlement exemplifies how guidelines are being weakened rather than strengthened 2. Poor implementation of guidelines continues to be a major problem Many country governments believe it is better to implement a mediocre plan well than to ignore an excellent plan, which may take several years to formulate with donors 3. Contrary to the arguments of many, increased involvement by the private sector in the construction of dams requires a new and strong role on the part of international development agencies, including the World Bank and regional banks, if sustainable development is to occur 4. Participation by project affected people is also essential but far more difficult than advocates realize Allovwing communi- ties to be involved is a necessary but insufficient condition of project development Community participation also needs to be complemented by appropriate laws, judicial systems, as well as the involvement of donors, NGOs arid, in regard to natural resource management, the pnvate sector 5. For resettlers to become project beneficiaries, their living standards must be improved 6. To date, guidelines have paid far too little attention to the nature of the downstream impacts of large dams on riverine populations and habitats 7. A carefully selected sample of the most successful cases of large dams in which project affected people have benefited over an extended time pericid needs be studied in order to learn if a majority have, in fact, become project beneficiaries and, if they have, to determine the reasons for success 68 Social Impacts of Large Dam Projects ENVIRONMENTAL SUSTAINABILnY IN THE HYDRO INDUSIRY Disaggregating the Debate PHOTO COURTESY OF THE WORLD BANK The service spillway at the Tarbela Dam, Pakistan. By ROBERT GOODLAND 1, Environment Department, The World Bank Paper Contents Storage Dams vs. Run-of-River: Introduction ........................ 70 Area Lost to Flooding ...................... 82 Transparency and Participation ................... 73 Involuntary Resettlement ...................... 84 DSM, Efficiency and Conservation ............. 76 Project-Specific Mitigation ...................... 89 Balance Between Hydro and Other Damage Costs of Greenhouse Renewables................................78 Gas Emissions ...................... 93 Conclusion ...................... 96 Rural vs. Urban Supply Balance.79 Acknowledgements ...... 7 Medium vs. Big Hydro Projects .................. 79 Endnotes ...................... 97 Sectoral Social and Environmental Sources of Further Information .99 Least-Cost Ranking ............ 81 Annex One ...... 102 Robert Goodland is environmental advisor to the World Bank based in Washington, D.C. He has worked on environmental impact assessments of many large dam projects worldwide. Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 69 LARGE DAMS: Learning from the PFast, Looking at the Future Finally, the power sector should play by the same ROBERT GOODILAND economic rules, all power projects should internalize external environmental damage costs, including Robert Goodland is an environmental advisor for the World Bank etherof deconmm ning dangre house gaslemis- Mr Goodland has worked on the World Bank's environmental sions To do less than that means that the playing impact assessments on many large dams worldwide including fieds not level this mes coal and pealize ltaipu, Three Gorges, Arun, and Nani Theun He has also served hydro, n ev ir retessivenours as Independent Commissioner on the inquiriy for Canada's Great hydro, an envronmentally retrogressive course Whale Hydro Project in James Bay S-5043 1. INTRODUCTION Environment Department Proponents2 of hydro and other renewable energy The World Bank sources are losing the fight to promote them Hydros 1818 H Street, NW have not yet become fully environmentally sustain- Washington, D C 20433 able Hydro opponents have been so successful in United States pointing out inadequacies that hydro development is Fax 202/477-0565 slowing and coal is burgeoning-precisely the retro- E-mail rgoodiand@worldbank org gressive course Hydro proponents have not been totally successful in persuading opponents that Note. This paper was commissionecl by IUCN from the author for hydro's benefits clearly outweigh the costs the joint IUCN-The World Conservation Union/World Bank work- (Figures 1 and 2) 3 shop Any personal opinions should in no way be construed as representing the official position of the World Bank Group or Part of the controversy is caused by confusion on IUCN the precise nature of the issues between hydro propo- nents and opponents, even by parties who should be well informed (see section titled "Damage Costs of ABSTRACT Greenhouse Gas Emissions") This paper seeks to dis- aggregate the debate into at least ten r,elated but sep- This paper disaggregates the debates embroiling arate debates Clanfication of the differences will, it is hydroelectnc dams and speciies ways to make hydro hoped, foster convergence on which disagreements environmentally sustainable 'The main means to are real, important and need much discussion, and approach sustainability is site selection to select the which may be resolved more readily. Consensus- better dams in the first place This means integrating building is the main purpose of this paper This paper environmental and social cnteria into traditional eco- was commissioned as the overview of wvhat environ- nomic least-cost sequencing iiE a Sectoral mental improvements are needed to make hydro sus- Environmental Assessment (SEA) tamable It was provided to all participents of the When a good site has been identified, then the nor- workshop to frame the issues in advance and seeks to mal project-level EnvironmenLal Assessment seeks to be relatively neutral and as unbiased as possible, mitigate residual impacts, such as by lowenng the although the author believes that much more envi- dam or moving it upstream VWhile the project-level ronmental prudence than is customary in hydro EA is essential and needs to be strengthened, using development is urgent and overdue To this end, the the SEA to select the better projects is far more pow- paper disaggregates the controversy into ten issues, erful In addition, the hydro industry needs to foster and presents pros and cons of each transparency and participation, as well as show that CAVEAT: This workshop had two goals First, it conservation is well in hand and that electncity pnc- To le womkshopa hat needs to be ing is adequate before new capacity is contemplated sought to learn from the past-what needs to be The biggest Impact of hydros, involuntary resettle- improved and what mistakes may have occurred The bigget iSecond, the workshop looked to the fulure-how can ment, needs the most attention Oustees must be bet- hydros be improved and what should be done differ- ter off promptly after their move 70 Environmental Sustainability in the Hydro Industry. Disaggregating the Debates LARGE DAMS: Leaming from the Past, Looking at the Future Figure 1: Examples of Controversial Dams 1. Thailand's 576-megawatt ($352 million) Nam Choan was indefinitely postponed by the Royal Thai cabinet in 1982 because the 140-square-kilometer reservoir would flood 4 percent of the 4,800-square-kilometer Thung Hai Wildlife Sanctuary. This sanctuary was (and is even more since) being actively logged and poached, both of which the project could have halted. This is just one example of the many hydro projects that are indeed dropped on environmental grounds. 2. Sweden has banned further hydro projects on half of its rivers. The new government may rescind this decision partly because of availability of Finland's nuclear energy. 3. Norway until recently derived 100 percent of its energy from hydro, which was considered good and sustainable. Norway has now postponed all new hydros because of excess capacity and opposition. 4. Slovakia is defying the EC and the EC-appointed tribunal looking into the Danube's Gabcikovo Dam. The dam is alleged to have lowered the water table in Hungary's prime agricultural area (yields dropped 30 percent) by 6 meters in the lower central part of Hungary's Szigetkoz wetland. Most Danube fish are reported to have since declined. Work was halted for a period in mid-construction. 5. In the United States, New York State (NY Power Authority) canceled its 20-year $12.6 billion contract to buy 1,000 megawatts of Quebec's James Bay power, reportedly for environmental and social reasons, in March 1992. Demand- side management in New York played a role too. HydroQuebec indefinitely postponed Great Whale hydro in 1994. 6. India requested that the World Bank cancel the outstanding $170 million Sardar Sarovar (Narmada) loan on March 31, 1993, partly because the contractual agreement schedule was unlikely to be met on time. This was the world's most intense dam controversy for years on environmental and social impacts, as amplified by Morse and Berger (1992). 7. Nepal's 401-megawatt Arun hydro, which created a 43-hectare reservoir and caused little resettlement, twice entered Nepal's Supreme Court in 1994 because of opposition related to the 122-kilometer access road and complaints about the lack of transparency. A petition was lodged with the World Bank's Inspection Panel in 1994, and the project was dropped in 1995 largely because of financial risk, although environment was criticized by opponents. 8. China's approximately 16,000-megawatt Three Gorges, the largest in the world, had U.S. support withdrawn in December 1993, when the U.S. Secretary of the Interior ordered the Bureau of Reclamation to cease collaboration. The U.S. Export-import, Bank withdrew support in 1994. According to World Rivers Review, the export credit agencies of Switzerland, Japan and Germany (Hermes-Buergschaften Ex-lm Bank) were involved as of 1997. 9. Chile's 400-megawatt Pangue hydrodam, the first of five planned for the BioBio river (IFC's first major dam, $150 mil- lion, approved in 1992 and completed March 6, 1997), came under litigation in Chile's Supreme Court in 1993, partly because the EA failed to address downstream impacts. An independent review commissioned by IFC and led by Jay Hair, former president of IUCN-World Conservation Union, is said to be very critical of both the project process and IFC; World Bank Group President James Wolfensohn threatened on February 6, 1997, to declare default to Finance Minister Aninat. On March 11, Chile severed ties with IFC by prepaying IFC's loan and obtaining cheaper money from the Dresdner Bank, with fewer environmental conditions.4 ently. To this end, the paper outlines what needs to many big dams have created valuable economic rates be improved and suggests throughout how such of return is clearly portrayed in the Big Dams Review improvements may be achieved. The many benefits (World Bank, 1966). Recent major improvements in of big dams are not the focus of this paper. However, turbine efficiencies and the huge non-hydro benefits the major benefits of big dams may not be as well- such as flood control, navigation, irrigation, water known or as frequently posed as what needs to be supply and river regulation to improve water use improved. Dam proponents may want to emphasize downstream must be acknowledged. This paper which dams have worked well, as that case is often focuses on developing country hydro projects and assumed, rather than documented. The case that only barely mentions irrigation and multipurpose Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 71 LARGE DAMS: Learning from the Past, Looking at the Future Figure 2: The General "Big Dams" Debate PROPONENTS' CLAIMS OPPONENTS' CLAIMS It is possible to mitigate hydro's impacts significantly, given politi- Historically, hydro's impacts have not always been mitigated, cal will even when well-known, such as involuntary resettlement Developing countries need large power projects, many small Developing countries are better served by less lumpy power power projects (deforestation, old diesels) can be environmental- investments than big hydro projects ly and economically worse than the best hydro projects The impacts of hydro's alternatives (coal, nuclear} cannot be mit- Lumpy power projects demote DSM, so small coal and gas igated turbines make DSM more likely Hydro generates much less GHG compared with coal altema- GHG reduction by hydro is unlikely to be the least cost, trans- tives port sector improvements are more likely to be less cost Gas is best reserved for transport fuels or for chemical feed- Natural gas should be used for the next decade or so or until stock, costly for base load other renewables become competitive Many countries still have good hydro sites left The best hydro Practically all good hydro sites have already been developed, sites should promote local development They can also provide especially in Europe and the United States opportunities to export electricity to neighbors to postpone coal or nuclear altematives and to benefit the country by attracting energy-intenstve industries The worst hydro sites should not be built, such as those in tropi- The really good hydro sites are non-tropical (that is, moun- cal areas, those with many oustees5 and with much species loss tainous), with no biomass or resettlement, no fish or no and those that create large, shallow reservoir areas endemics, and those with high head and deep reservoirs Government regulation is needed, and enforcement is possible Government regulation is unlikely and enforcement may be weakening After privatization, government regulation is still needed After pnvatization, government is less able to regulate the pri- vate sector Public and private power projects should follow least cost The private sector less likely to follow least cost It prefers to externalize all it can Electncity sales help the country irrespective of the use to which More electricity for elites is not needed What is needed is the power is put This includes electricity for export or for the electricity for basic needs, including health, education and for already electrified elites the poor These needs are not best met by big hydro projects feeding the national grid Water must not be allowed to 'waste to sea,' unharnessed Water flowing to the sea is not wasted, but used by ecosys- tems Large-scale hydro is necessary for urban, industries and surplus- Poor and rural benefit less, if at all, from large-scale hydro es, especially because their capability to pay is greater projects The pnority should be to provide for the poor before industries Electricity subsidies to the rich can be cut, but prcing can help Large-scale hydro projects subsidize the rich and decrease poor equity Foreign contractors involved in lIrge-scale hydro projects create Less-developed countries are already too dependent on for- jobs and transfer technology eign exchange and contractors Less-developed countries lack the capacity to build large dams Big hydro has huge capital costs, so in the beginning indige- The low maintenance cost and simplification of operations of nous, smaller sources of electricity are more appropriate for hydro is suitable for LDCs LDCs Small hydro projects are not substitutable with large hydro pro- Small and medium-sizd hydro projects can partly substitute jects for big projects and attain more equitable goals 72 Environmental Sustainability in the Hydro Industry Dlsaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future dams and those in industrial countries The record of hon, rather than mitigating impacts of previously industnal country dams is probably better than that selected projects This sectoral EA approach is essen- in developing countries for compelling reasons tially integrating the trned-and-true economic least- Although not the focus of this paper, developing cost analysis with environmental and social cnteria country multipurpose dams may not, in general, be This is amplified in the section called "Sectoral Least- as problem-free as some hydro-again for compelling Cost Ranking " If environmental cnteria are used in reasons that must remain for another occasion Part project selection, then only projects with the least of the controversy is that hydro can be made sustain- impacts are selected This is much more efficient and able and renewable, but only with more effort than is effective than any project-level EA customary Hydro is on the cusp between fully renew- able and clearly non-renewable (Annex 1) The goal of both the sectoral and the project EA is to make hydro projects sustainable Figure 4 specifies what sustainability should be when applied to hydro Figure 3: The "Dam Controversy" Specific impact mitigation is taken up in the section The Controversy Disaggregated Into Ten Main Issues 6 titled "Specific Mitigation " In addition to the sectoral BA approach, the other powerful means of reducing environmental impacts are 1. Transparency and Participation 2. DSM, Efficiency and Conservation To foster transparency and participation 3. Balance Between Hydro and Other Renewables To squeeze most demand-side management 4. Rural vs Urban Supply Balance (DSM), efficiency and conservation out of 5. Medium vs Big Projects the system before building new capacity 6. Sectoral Least-Cost Ranking, Social and Balancing rural with urban electricity Environmental Criteria supply 7. Storage Dams vs Run-of-river Area Lost to Flooding Balancig medium and big hydros 8. Involuntary Resettlement Proponents and opponents converge that environ- 9. Project-Specific Mitigation vs Trade-offs mental impacts are better reduced by attending to 10. Greenhouse Gas Emission Damage Costs these upstream sectoral opportunities, rather than by using the previous approach of starting environmen- tal work when a project already has been selected The environmental impacts of hydro can be sepa- Thus a major shift ol emphasis is underway rated into nine topics listed in Figutre 4 The impor- Continue with the traditional project EA, but attend to tant point here is that the old-fashioned approach of all these sectoral opportunities before the project is tlt-for-tat mitigation for each individual impact is selected inherently weak The project-level EA is being com- plemented by the much more powerful sectoral approach The retail project-specific environmental 2. TRANSPARENCY AND assessment and mitigation cannot influence project PARTICIPATION selection It is precisely durng the project selection phase that most impacts can be prevented or mini- Dam proponents scarcely fostered transparency mized Once the project has been selected, the weak- and participation of stakeholders in the past Planning er project-level EA should still be applied, but is behind closed doors by expert hydro planners who severely constrained in what it can mitigate knew best was the order of the day Secrecy often reigned Now dam proponents see that secrecy is no International best practice is converging on the longer possible In the last few years, especially since notion that most impacts are better reduced in the about 1995, pressure has mounted to make trans- selection process of low-impact projects or site selec- parency and participation permanent features of the Environmental Sustainability in the Hydro Industry Disaggregating the Debates 73 LARGE DAMS: Learning from the Past, Looking at the Future planning process. But proponents are nervous about Proponents of the Nam Theun hydro project are exposing their schemes to public scrutiny, and gov- receiving many useful proposals from nontraditional ernments are concerned about risks to sovereignty. stakeholders because of such participation. The Mekong River Commission, a UNDP-sponsored project, is widely reported in the press to have not Although transparency and participation are here fully embraced transparency and participation on sev- to stay, they are not yet at all the norm. The giant eral occasions in 1994-96, flying in the face of UNDP's hydro proponent, ABB Consortium, espouses trans- promotion of transparency. In addition, dam propo- parency, but has not yet been able to persuade the nents often do not know how to foster transparency owners of Malaysia's $6 billion Bakun dam to make and participation, or are uncomfortable with them, so the EA public (as of March 1997), not even to the some initial attempts may not have been fully effec- affected people. ABB's tentative contract is worth $5 tive. But participation is here to stay and is slowly billion to ABB. The 2,400-MW project is scheduled to spreading worldwide. generate electricity commercially in 2003. Jayaseela (1996) writes that Malaysia's EA was never intended Proponents and opponents argue that participation to address social issues, in spite of the fact that vul- is essential for democracy, and that participation nerable ethnic minorities will be harmed. Apparently greatly improves project selection and design. the Bakun dam was approved before the EA was Because the EA is performed by the proponents, completed. Jayaseela (1996) quotes distinguished external scrutiny and participation in the whole opponents who claim Bakun7 would never be permit- process is essential to reduce any possible conflict of ted in relatively unpopulated and species-poor interest. The World Bank now insists that EA reports Sweden, so why is ABB, a partly Swedish-owned become publicly available, and this is helping to raise company, supporting it? Moreover, the dam will pro- EA quality. Now that civil society or non-governmen- vide Malaysia with excess electricity, which it plans to tal organizations are burgeoning, national govern- sell by the beginning of the next century. So why ments and governance are weakening, and privatiza- invest in a damaging scheme rather than in renew- tion is sweeping the globe, it is increasingly difficult ables? On the other hand, proponents (Green, 1996) to impose major investments covertly on taxpayers. note major benefits. Malaysia is in need of consider- New big proposals are increasingly subject to trans- able capacity expansion, as electricity demand grew parency and full participation from the earliest at nearly 10 percent per annum in the 1980s and stages. Most importantly, participation and trans- reached 14 percent in the early 1990s, resulting in parency can foster early agreement and build consen- blackouts. Most Malaysian new capacity will be gas- sus on the project, thus reducing controversy and fired, reaching 70 percent of the national mix by opposition later on. This in turn expedites implemen- 2000. Bakun will hedge by broadening the mix. tation. These two relatively new aspects are mandat- ed by an increasing number of governments and Proponents also point out that the dam will flood only development agencies. They are best started at the 695 square kilometers of valuable tropical forest, sector planning stage (Sectoral Environmental which is two orders of magnitude less than jungle Assessment), well before an individual new dam is loss from current logging in Sarawak. Bakun will dis- identified. place 5.5 million tons of coal or 11 million tons of C02 per year. Biomass rot from the reservoir will be the Synthesis: In view of the fact that a growing num- equivalent of 1.5 years of coal equivalent (at 17 ter- ber of governments and development agencies awatt-hours a year from 2,400 MW installed). As the require transparency and participation, the planning SEA is not available, opponents suspect that the ous- of hydro projects is becoming an increasingly open tees may not participate in decisions affecting them, process, no longer restricted to experts (Figure 5). nor do they expect vulnerable ethnic minorities to The People's Democratic Republic of Laos, until survive involuntary settlement. The journal Power In recently an almost closed society, held it first public Asia reported in February 1997 that Bakun is spear- three-day participation meeting in January 1997 on its headed by the Malaysian timber potentate and the biggest proposed hydro project, Nam Theun Two. Ekran Berhad Head, Ting Pek Khiing. 74 Environmental Sustainability in the Hydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future Figure 4: What is Environmental Sustainability in Hydro Reservoirs? The starting potnt is the solar-powered hydrological cycle which is the quintessence of sustainability Water flow is a renewable resource The cycle must be harnessed so that the project continues to generate benefits (such as power, fish, in multipurpose dams irrigation, flood control, navigation, water supply) for a long period, certainly decades, preferably a hundred years or more In the narrow sense, sustainability means the hydro's lifetime should be as long as possible In the broad sense, sustainability requires that the environmental and social costs are low and do not increase, especially not for future generations, such as cli- mate change (the intergenerational equity component of sustainability) Sustainability is NOT only a continuation of power output A modest fraction of power sales allocated to social and environmental needs ensures their acceptability The concept of environ- mental sustainabiltty in general is elaborated in Goodland (1995) and Goodland & Daly (1996) Involuntary Resettlement (includes all affected people) The number of oustees is zero or low (e g Nepal's Arun reservoir), those relocated are promptly better off after their move To be no worse off means stagnation, so cannot be called develop- ment Of course, "no worse off" would be much better than historic achievements Diseases cannot be allowed to increase Brazil and China call for fractions of power sales to be allotted to oustees China's policy is to ensure oustees are better off, not 'worse off" The impacts on affected people should be made acceptable Sedimentation: The reservoir generation capacity will not be curtailed because of sedtmentation Certainly, the dam's lifespan should last longer than the amortization of the loan Opponents claim that 50 years of power is too brief a benefit to outweigh the environmental costs Early designs need to calculate the ratto of live to dead storage to inform dam selection In addition, catchment protection should be made an integral component of all relevant hydroprojects It is important to determine current sediment loadings, and the expected life of the reservoir before sediment starts to curtail generation Thereafter, if the dam operates as run-of-river, it is necessary to determine the implication of that Other issues involve understanding the potential for de-silting for example, the use of bottom gates, and understanding the downstream effects of de-silting Finally, it is important to calculate and monitor erosion processes upstream Fish: Sustainability means that the fish contribution to nutrition, especially protein, must not decline Unless fish catch increases substantially and permanently, the new opportunity presented by the new reservoir will have been wasted It is necessary to ascertain how many people currently depend on fish for their livelihood (self-consumption or barter or commercial sales) The value of non-marketed fish usually exceeds the value of marketed fish A large proportion of so-called weekend or recreational fishing forms an integral part of poor household budgets, so it also must be included The potential for fish cultivation in the new reservoir or elsewhere should be realized, including the high initial offtake A dam s operating rules need to be implemented in such a way that optimizes fisheries and internalizes costs Compensation must be made available for the reduction in fishing downstream caused by the construction of the dam Biodiversity- Species or genetic diversity should not decline as a result of the project Sustainability means the project does not cause the extinction of any species Moreover, migrations (e g , seasonal anadromy catadromy, potadromy) should not be so impeded as to harm populations For example, fish breeding or fish passage facilities should be proven in advance It is neces- sary to determine if wildlife habitat will be lost? And if so then to determine if there are equivalent (or better) compensatory tracts purchasable nearby? Improvements in net biodiversity are not difficult, and should be sought Land Preempted: If agricultural production declines, then it is necessary to clarify that the net power benefits clearly exceed the net value of lost agricultural production Equivalent areas need to be made available for the oustees Water Quality: Sustainability means that water quality will be maintained at an acceptable level The project must ensure that the reservoir does not impair water quality Can water weeds, decaying vegetation and the like be controlled so that water of acceptable quality will occur downstream? Determining the level of organic mercury 7 releases from rotting biomass and phos- phorus is important Sustainability cannot be defined as just meaning cleaning up dirty water that fills the reservoir, for instance as is done in the case of Mexico's Zimapan dam, which fills from the effluent of Mexico City Downstream Hydrology- Sustainability means preventing negative impacts on the downstream uses by people (e g, irrigation, soil fertility restoration, recession agriculture, washing cattle watering) and to downstream ecosystems (e g mangroves, delta- ic fish, wetlands, tlood plains) There are substantial benefits to be realized for water regulation downstream, whether it is flood control urban and industrial water supply, and/or multiple use Temperature of releases also needs to be controlled Regional Integration and Aesthetics. The project is more sustainable if it is well integrated into the activities and future of the region Losses to cultural property and aesthetics should be avoided (Goodiand and Webb, 1989) Greenhouse Gas Production Total GHG production (from biomass, cement, steel, etc) should not exceed the gas-fired equiva- lent It is important to recognize that rotting biomass remaining in the reservoir after filling produces estirnable amounts of C02 and CH4 Environmental Sustainability in the Hydro Industry Dlsaggregating the Debates 75 LARGE DAMS: Learning from the Past, Looking at the Future Nevertheless, stakeholder analysis has become a scheme. Proponents agree that many LDCs need to useful tool in promoting participation. Major dam pro- move on both DSM and new capacity fronts. The jects are improving in this regard. In an increasing important point is not to jump to new capacity if there number of countries, a major dam is likely to go is a large scope for DSM. Opponents point out that ahead without massive opposition only if civil society pricing is very effective in fostering conservation, but has been fully involved and broadly agrees that the that tariffs are rarely raised to equal long-run margin- proposed project is the best (or least objectionable, al cost of production. Opponents sometimes calculate and least-cost in terms of the environment and soci- that demand predictions are unrealistically high. This ety) alternative to meeting the goals that have been often subsequently proves to be the case. Proponents agreed upon in advance by civil society and govern- justify going ahead with the next dam partly by using ment, and supported by financiers and development high demand predictions, and before DSM and pric- agencies. Society as a whole bears the financial debts ing benefits have been put in place. Early in 1997, and the environmental and social costs, so society as India's huge states of Punjab and Kerala waived elec- a whole needs to be meaningfully consulted before tricity charges for farmers. In such cases, how do such costs are incurred (Narayan, 1995; World Bank, power producers keep up with demand? 1994). Dam proponents now admit that mature Transparency and participation mean that civil economies and sectors have substantial conservation society exercises a role in the selection of criteria to potential, but that developing economies have less be subsequently used for decision-making and in scope. Proponents in LDCs claim that the emphasis identifying stakeholders. These normally include should be on increasing supply rather than reducing affected people (eventually all taxpayers) or their still small demand in those countries. To its credit, advocates, government, academia, syndicates, con- the OECD hydro industry is now focusing on sumer and safety organizations, as well as project revarnping existing industrial plants to improve effi- proponents. Civil society's role is broad, assisting in ciency to low or zero impact. Utilities in mature the selection and design of studies needed before economies are now espousing the fact that it is in decisions can be made, in the interpretation of the their interest to help their consumers reduce con- findings of such studies, in the burden-sharing or rel- sumption by means of DSM, pricing and conserva- ative weights given to demand-side management, tion. Leading utilities in California, for example, only pricing, conservation, efficiency on the one hand and began promoting fluorescents over incandescents as new generation capacity on the other. The interven- recently as the early 1980s. Utilities are now seeing ing organization that finances the project enables civil that it is in their interests to ensure that DSM is society to play its legitimate role, and is accepted by achieved and publicized well before contemplating governments and development agencies. new capacity. Only in this way can utilities raise bonds and other capital to finance new capacity. 3. DSM, EFFICIENCY Current Status: The basic theme is the win-win AND CONSERVATION notion of reducing the price of final services - ener- gy - while reducing the environmental costs. This Dam opponents urge that most of the potential for means encouraging end-use efficiency. DSM should demand-side management, energy efficiency and con- be vigorously promoted until the marginal economic servation be squeezed out of the sector before invest- cost (including environmental externalities) of thor- ing in new capacity. Most conservation measures, ough conservation becomes as high as the short- including demand-side management, should be sub- term marginal cost of new production. As conserva- stantially in place before new dams are addressed. tion measures are always advancing, implementation "Substantially in place" means that the marginal eco- will always lag behind savings potential. The aim is to nomic cost (including environrnental and social exter- minimize this gap. Because DSM has not yet been nalities) of saving energy through conservation vigorously pursued in many countries, DSM projects becomes as high as the marginal cost of a new hydro will rise rapidly as they will initially often be part of 76 Environmental Sustainability in the Hydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future Figure 5: Historical Evolution of Transparency and Participation Broadening the constituency of the design team Design Team Approximate Era 1. Engineers Pre-WWlt Dams 2. Engineers + Economists Post-WWII Dams 3. Engineers + Economists + an Environmental Impact Statement at the end of complete design Late 1 970s 4. Engineers + Economists + Environmentalists & Sociologists Late 1980s 5. Engineers + Economists + Environmentalists & Sociologists + Affected People Early 1990s 6. Engineers + Economists + Environmentalists & Sociologists + Affected People + NGOs Mid 1990s 7. Engineers + Economists + Environmentalists & Sociologists + Affected People + NGOs + Public "Acceptance" Early 20Os? Note These dates hold more for industrial nations than for developing ones, although meaningful consultations with affected people or their advocates and local NGOs and the involvement of environmentalists in project design, are now mandatory for all World Bank- assisted projects The World Banks mandatory environmental assessment procedures are outlined in the three-volume "Environmental Assessment Sourcebook' (World Bank, 1991) Environmental Impact Statements (EIS) were added on to the end of a completeiy designed project - a certain recipe for confrontation and waste the least cost Environmental sustainability is difficult to achieve even without having to double electricity supply DSM by population stability: This topic is nei- every generation, and without having to supply elec- ther well-known, nor widely accepted yet It is essen- tncity for 80 million new consumers each year tially long-term Stabilizing the numbers of electricity Sustainability cannot be achieved in a vacuum that consumers is as important - if not more so - than excludes one of its most important components, pop- managing electricity consumption Urgently needed ulation stability All sectors of the economy should improvements in living standards and development map out what it would take for them to become sus- itself also boost energy consumption This section tamable Most sectors have a stake in population sta- addresses demographic growth bility Therefore, population cannot be the sole The world is expected to have a population of responsibility of the ministry of health or its equiva- about 8 billion by 2020, up from 5 8 billion in 1997 lent, thus relieving other sectors for any role whatso- abopulti8on stability -00 births fromatc g d s - is a 1ever While dams should certainly not be burdened Population stability- births matching deaths -iS a with righting all societal ills, it is clearly in the inter- necessary eventual condThon for social and envlron- est of hydro proponents to see their consuming popu- mental sustainability The mportance of populahton lation stabilize Population stabilization will make per stabilty mi DSM calculatons iS that sustainabilty and capita electricity supply increases easier or with less- DSM are possible for a stable population, but pract- er impact Proponents have to repeat the case that cally impossible for a growing populaon In general, more electncity is needed As European Union con- populaton stabilization (in other words, zero growth) sumption exceeds 1,300 watts per capita, and LDC iS a necessary precondition for environmental sus- per capita iS one order of magnitude less (120 wafts tamnability in all sectors, not only the energy sector per capita), such an argument should be straighwtor- Most environmental impacts will be eased to the card extent population growth rates fall People concerned ward with environmental sustainability have a big stake in Hydro proponents may object that they should not reducmg population growth rates meddle in population policies But it was only a few Environmental Sustainability in the Hydro Industry Disaggregating the Debates 77 LARGE DAMS: Learning from the Past, Looking at the Future FIGURE 6: Historic Evolution from Warning, Consultation and Participation to Partnership 1. Pre-1950s: One-way information flow: Oustees were warned that they would be flooded in a few weeks or months and had to get out of the way for the greater good of distant citizens. 2. 1960s: Primitive participation in resettlement site selection: Oustees were informed that they would be flooded out, and were asked where they would like to move to among a few sites selected by the proponent; compensation often inadequate. 3. 1970s: Participation in resettlement site selection: Oustees were consulted about their impending move, and invited to assist in finding sites .to which they would like to move. 4. 1980s: Resettlement participation evolves into consultation: Oustees are meaningfully consulted in advance and can influence dam height of position on the river; oustees views on mitigation of resettlement are addressed. 5. 1991: World Bank's "EA Sourcebook" mandates meaningful consultation in all EAs; EA is unacceptable without such consultation. 6. 1990s: Resettlement consultation evolves into stakeholder consultation: Stakeholders views are sought on all impacts, not just involuntary resettlement. 7. 1992: World Bank's EA Policy mandates participation. 8. 1996: World Bank's "Participation Sourcebook" published. very short years ago that the utilities achieved their Photovoltaics and tidal energy have yet to reach the 1 biggest about-face in history and began to pay elec- MW mark. Wind generators are only scaling up in tricity consumers not to consume, or at least to stabi- the 5-plus MW range, but 0.5 MW moclels are com- lize their consumption. It is strongly in the interest of mercially available. Solar-thermal has exceeded 300 hydro proponents to support national population sta- MW in one experimental plant and shows promise for bilization goals to the extent they are able, and it is in countries with a patch of desert near ocean (for the their interests to help in fostering family planning, as water needed). Non-hydro renewables are positive well as energy conservation. contributions in many counties, but do not yet con- tribute substantially to any industrialized nation. For example, the share of wind energy is declining in the 4. BALANCE BETWEIEN HYDRO AND two world's leaders, United States and Denmark. OTHER RENEWABLES The impact on energy demand of an additional 80 Proponents of non-hydro renewables rightly claim million per year resulting from population growth is there is much scope for such renewables in practical- enormous. As a consequence, world energy con- ly every country, and unless they are experimented sumption is expected to double between 1990 and the with they will never catch on. Practically all nations year 2020. Practically all new capacity is already in have scope for installing 0.5-1 MW wind turbines in developing countries, rather than in OECD countries. their best sites at commercially competitive rates. More than two-thirds of the world population use 20 There is enormous commercial scope for photo- gigajoules per person or 15 kilowatt-hours a day. This voltaics (PV) use in isolated systems and small is one-tenth the energy use in OECD countries. pumps worldwide. However, the facts also show that the price of non- hydro renewables is declining fast and will be com- The harsh reality is that there is limited scope for petitive sooner if they are tried on an experimental a rapidly industrializing country to meet their energy scale now. In light of the fact that environmental sus- needs through non-hydro renewable energies. Even tainability will necessitate phasing down coal use industrial countries may be moving in the wrong until greenhouse gas emission costs can be stemmed, direction. The United States, for example, decreased the faster coal has to be subjected to the same eco- its renewable energy from 0.4 percent in 1987 to nomic cost-benefit analysis as hydro and other renew- about 0.2 percent in 1997 (World Bank, 1997). ables, the sooner hydro and other renewables will 78 Environmental Sustainability in the Niydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future outcompete coal. When coal becomes more expen- hydros tend to retard environmental degradation, sive by virtue of the fact that its environmental costs such as deforestation for fuel wood, erosion or loss of will be internalized (Goodland and El Serafy, 1997), precious topsoil. Mini-hydros also make eco-tourism hydro and other renewables will burgeon. Later, more sustainable. In fact, for a country or region, pro- probably in a decade or so, non-hydro renewables will moting sustainable eco-tourism may be a more appro- outcompete all but the very best hydros, and the priate course to follow toward development, rather world's energy sectors will be reaching sustainability. than yet more conventional industrialization. Synthesis: Certainly, the balance between devel- 5. RURALVS. URBAN opment targeted to rural vs. urban sites is real and SUPPLY BALANCE involves much more than just hydro. Governments are progressively short of resources to subsidize Proponents are more interested in supplying elec- expensive isolated hydros. The private sector is more tricity to the national grid for urban and industrial profit-motivated and is unlikely to find isolated hydros areas, rather than for supplying rural users, because more profitable than supplying the grid. Until the the costs to link each consumer are relatively lower very real but little recognized costs and benefits of in densely populated areas, and urban/industrial con- sustainability, poverty alleviation, the rural exodus, sumers consume much more electricity than rural rural environmental protection and urban slums can consumers. In addition, urban/industrial consumers be better calculated, there will be little progress on are more likely to be able to afford the supply. It may this front. cost an order of magnitude more to connect a rural consumer compared with an urban consumer. The rural consumer normally would use little electricity 6. MEDIUM VS. BIG HYDRO PROJECTS for the first several years: a couple of light bulbs, then a radio, and only later a TV or small machine such as The "size" of a dam is primarily a function of how it a rice dehusker, and that only sporadically. This is a fits into overall river basin development. Big dams typical "who benefits" question. are mainly for big rivers (for example, the Nile and Indus), in which case the main purpose is irrigation Opponents point out that this exacerbates the or flood control, and hydro is a secondary benefit. urban-rural bias. Rural societies bear the impacts of Proponents of big dams point out that, in general, no hydro schemes, while city dwellers reap the benefits. dam should stand by itself; the use of the basin's This is a philosophical debate on the nature of eco- water resource should be optimized. Proponents nomic development. Historically, development has sometimes also claim that big dams are needed by benefited mainly city dwellers and intensified rural-to- countries with few alternatives to earn foreign urban migrations. In the case of dam construction, exchange by exporting electricity. Thus the big vs. overseas firms have profited, while the rural poor, medium trade-off can be separated into supply for the who are most impacted by the project, have paid the national grid vs. foreign exchange, and trade/envi- costs. Now, in today's environmental crisis, oppo- ronment issues. To the extent big hydro is for export, nents ask if this bias should be redressed in order to as is often the case, the medium vs. big dams debate approach environmental sustainability and more overlaps the trade/environment debate. Proponents directly alleviate poverty. In Nepal, for example, is claim that if all impacts are internalized in the cost, national sustainability fostered more by increasing the fact that the exporter bears such costs becomes benefits, such as electricity, for the load centers and irrelevant. This too is very much a "who benefits" relying on trickle-down to help non-consumers? Or question. Private developers can be leaders in plan- would sustainability be better approached by balanc- ning for the internalization of social and environmen- ing the current status by more emphasis on rural tal costs, such as the NTEC Consortium proponents electrification and isolated small (1 MW, for example) of Lao's Nam Theun Two hydro project. hydro projects supplying a group of a dozen villages? Opponents of big hydro projects point out that mini- Proponents want to internalize formerly external Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 79 LARGE DAMS: Learning from the Past, Looking at the Future costs, and this sums up the entire history of the envi- This preference has to do with concerns about the ronmental movement worldwide: the internalization unreliability of export markets, if a bigy importer of environmental costs. It took centuries to internal- decides not to pay for or to reject the electricity after ize the cost of black lung disease to coal miners; the dam has been built or, more importantly, after the decades in the case of Minimata victims. Today, one impacts have been caused. Proponents are concerned of the most pressing issues is how to internalize the that the exporter bear the impacts, which are more costs of greenhouse gas emissions. Most project severe in larger projects than in medium-size ones. economists, whether the project is for coal, gas or Proponents point to the fact that some medium-size hydro, resolutely persist in externalizing these costs hydro are run-of-river or outstream diversions, which (see "Damage Costs of Greenhouse Gas Emissions"). can have fewer negative impacts compared to those While development agencies, in principle, seek to from a large storage reservoir. Oud arLd Muir (1997) internalize environmental and social costs, this is point out that it is less risky to build a number of overridden by the much more important (to them) smaller schemes rather than one big cine with equiva- priority of free trade. The World Trade Organization lent total capacity, even if this would entail a higher stringently promotes free trade, but is not stringent at present value of cost, as this would spread the risk. promoting environmental and social standards, and resolutely against any country seeking to protect an There are fewer opponents of medium-scale hydro efficient national policy of internalization of environ- projects. Utilities encourage the private sector to mental costs. invest in national grid supply partly because power cuts are extremely costly (about 10 times the tariff Opponents of big dams claim that exporting elec- per kWh). Thus utilities may be forced to pay higher tricity burdens the exporter with the environmental tariffs simply to avoid outages. If domestic demand is and social impacts precisely because such costs have low, such as in Laos or Nepal, and there is a power- never historically been internalized in the price of hungry neighbor, such as Thailand, India or Vietnam, production. Japan now imports all of its timber, that can pay, the private sector may be interested. although it has plentiful and good quality forests. Even so, power exporters need to conquer a market Much of Japan's steel and aluminum also are import- which leads to downward pressure on the tariff. ed, thus avoiding the environmental and social costs of their production. Such imports are "cheaper" to Synthesis: We can dismiss the concern over Japan because their social and environmental costs exporting per se: No one criticizes Idah[o for export- are externalized. Most electricity from Brazil's $8 bil- ing its potatoes. But the value-added debate is ger- lion Tucurui hydro supports the aluminum smelters mane. Idaho would be better off exporting potato that export to Japan, creating only 2,000 jobs in Brazil chips (now priced higher than smoked salmon!), (Fearnside, 1997). Such costs; are not fully factored potato latkes, instant french fries or whatever higher- into prices, opponents claim, because the environ- value products consumers can be induced to eat. Or mental and social standards of the exporter (e.g., even distill potatoes into poteen or potable alcohol if Brazil, Philippines, Indonesia, Lao PDR) are much that is more profitable. The situation is similar in lower than in Japan. This pushes hydro projects into tropical timber, where international debate is raging the debate over the environmental impacts of free over the balance between the export of crude logs vs. trade (Daly and Goodland, 1994). A country internal- the export of value-added wood products (doors, win- izing environmental and social costs into its prices dows, tiles, veneer, particle board, etc.) by domestic will be at a disadvantage in unregulated trade with a processing (Goodland and Daly, 1996). In the case of country that externalizes such costs. water, it is normally not possible to stop water flowing from one country to a downstream riparian who does Proponents of medium-size dams - that is, dams not pay for it. How much better then to turbine it and in the 50 MW to 300 MW range - urge that a bal- use the head of the upstream country to add value ance be sought between catering to the export mar- before the natural water resource is lost downstream. ket and meeting domestic dermands. Such proponents By analogy, it would help the hydro-rich country prefer to emphasize national needs before exports. more by exporting products embodying much electri- 80 Environmental Sustainability in the Hydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future cal energy manufactured at home, rather than export- ernment's role. Pre-construction planning and investi- ing only electricity. For example, Paraguay's popula- gation time is often less generous with a private tion is less than five million and it receives half the investor than with government. The private sector electricity generated by the 12,600 MW Itaipu, the would like the government to accept as much as pos- world's biggest hydro project. It expects to receive sible the sectoral needs, feasibility studies, pre-con- half of the output from the 2,700 MW Yacyreta short- struction planning and risks. Development agencies ly, and of Corpus (about 2,000 MW) eventually, but can indeed help with sectoral planning and feasibility can consume less than 10 percent even of its half costs. from Itaipu. Understandably, Paraguay is seeking electricity-intensive manufacturing industries. The project-level EA seeks to ensure that the pro- Meanwhile, Paraguay sells much of its half of the ject identified is indeed the least-cost one. This is usu- energy to Brazil and Argentina. ally sought by the less-than-ideal "analysis of alterna- tives" undertaken after identification of the next pro- posed project mandated in Bank-assisted EAs. Such 7. SECTORAL SOCIAL analysis of alternatives is a desperate and tardy AND ENVIRONMENTAL attempt to second-guess that the project identified LEAST-COST RANKING should indeed be the next one taken up, or is the best solution. Experience shows that SEA is much more This section contains the most important recom- effective in promoting least-cost sequencing than is mendation of the paper - the use of the sectoral EA. analysis of alternatives. Dam opponents are very keen to start environmental prudence before the next individual project is select- Current Status: Environmental assessments his- ed. Once a project is selected there is only modest torically have focused on individual projects. Indeed, scope for reducing impacts such as by lowering dam in the past, EAs used to be performed after the pro- height. The biggest opportunity to reduce impacts is ject had been designed. In the late 1970s, EAs were by integrating social and environmental criteria into added on to the end of a previouslv designed project. project analysis. In practice this means expanding tra- In the last few decades, EAs have moved "upstream," ditional least-cost sequencing in a sector to include so that many now start more or less at the same time social and environmental criteria in order to find the as project design. By the time the project has been true least-cost path. Sectoral Environmental designed, environmental and social concerns would Assessment (SEA), a relatively new tool, is starting to be fully internalized. While this is a huge improve- be applied to the hydro subsector by means of coarse ment over the add-on of the EA to a previously and fine screening so that the lowest-impact projects designed project, it is now clear that project-level EAs are taken up first. The world's best example is are inherently weak, and many are low in quality. Nepal's superb SEA, which was devised in 1996-97 Project-level EAs have to focus on the project identi- and is based on coarse and fine screening and rank- fied and being designed. For example, if an EA of a ing of an inventory of 132 potential projects. Through highway proposal is requested, that precludes the the SEA, Nepal has narrowed down the choices to more important modal choice between highway and the seven economically and financially feasible pro- rail. Similarly, the EA of one proposed atomic energy jects with low or the least environmental and social reactor may be able to improve site selection, design impacts. of the containment vessel, and safety of radioactive transport and disposal. However, it is not useful if the Dam proponents normally invest in the single pro- preferred choice was natural gas imports, for exam- ject that meets their own criteria of what type of dam, ple, instead of atomic energy. the timing of its implementation, the size of invest- ment they have experience in, and which project is Sectoral vs. Project-Specific EA: The EA of a likely to have the higher returns on capital. proposed dam may be able to site the dam on another Proponents, particularly private investors, cannot get river than what was originally proposed, reduce involved with the whole sector; that is clearly the gov- impacts by lowering dam height, or move it Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 81 LARGE DAMS: Learning from the [last, Looking at the Future upstream, as was done with Thailand's Pak Mun or no reservoirs) cause less impacts, so may attract hydro. Similarly, Indonesia's Saguling dam was low- less criticism than big dam projects. Blut the term ered by 5 meters to halve the number of oustees. But "4run-of-river" means different things to different the project-specific EA could not make it less useful groups. In 1994, the Mekong Secretariat published a in making the case that alternatives to the proposed major study for a series of half a dozen main-stem hydro - for example, gas, wind, or solar - could dams across the Mekong, entitled "Run of River" possibly be even less costly overall. These considera- (Mekong Secretariat, UNDP, 1994), which concluded tions have led governments and development agen- that "environmental impacts of the proposed projects cies to adopt a "Sectoral EA" (Goodland and Tillman, are expected to be ... not severe." This caused inter- 1996). The sectoral EA environmentally scrutinizes national disagreement, partly because the same the whole sector as part of the least-cost analysis. report (fish chapter) concluded the opposite: The Least-cost sequencing now should integrate the con- proposed dams "may cause a wholesale decline in the ventional economic least-cost criteria with social and fishery throughout the lower Mekong River." And environmental criteria. This is easy to do reliably at partly because there is disagreement on how such the first approximation (Figures 7 & 8). All rehabilita- dams could be labeled run-of-river as the nine reser- tion and expansion of existing dams should be sub- voirs would have flooded 1,000 square kilometers, stantially completed before new dams are started. As displaced more than 60,000 people (Rothert, 1995), this is almost always achieved at much less environ- and would create extensive storage reservoirs in the mental and economic cost than construction of new low flow season - ranging from 75 to :200 kilometers dams, it should routinely be part of the least-cost in length. All of the dams exceeded ICOLD's 15 analysis. The sectoral EA, related to analysis of alter- meter height definition of a "large dam," as they are natives, ensures that the subssequent project-level EA all 30 to 60 meters high. Some of the nine dams is quick, cheap and reliable. would extend to the next dam upstream. Given that previous Mekong mainstem dam proposals, dating from the 1950s to the 1970s, would have flooded out 8. STORAGE DAMS VS. RUNOF up to 120,000 people, this was a big improvement. RIVER: AREA LOSTTO FLOODING We need to agree on definitions. Strictly, ROR In general, there is much scope for greatly reduc- means the river is not dammed; the river runs over ing environmental and social impacts by selecting and around any structure. A true ROR hydro can be projects with no reservoirs (outstream diversions), or an axial tube turbine either sitting on the river bed or very small reservoirs, such as weirs or run-of-river at least below the surface of the river, but without a (ROR) projects. Large storage reservoirs generally barrier to water movement. An undershot water- create the most severe impacts (Figure 8). wheel would also be ROR. Others claim ROR has to raise at least some head for energy. Zaire's Inga Opponents of big dams point out that historically hydro is ROR, as part of the river is diverted into a there has been little attempt to calculate the area of headrace canal while most of the river continues land lost to the reservoir, and little attempt to select unimpeded. In this case, the storage is the river itself, small reservoirs over larger ones. It is very difficult which is so voluminous and has the unique advantage to ascertain reservoir area from the literature. In fact, of benefiting from wet seasons on either side of the OED's review (World Bank, 1996) was not able to equator. Can an outstream diversion be ROR if some find the area of some of the reviewed reservoirs. of the river is diverted into a tunnel while the rest Reservoir area is one of the most crucial environmen- continues free-flowing? A weir can be defined as a tal and social variables, but has not commonly been dam over which water passes. For how long can the allocated much importance nor even provided by water not pass for a weir to become a dam? If a weir hydro proponents. halts fish migrations upstream, should it be called a dam? How high must a be to be called a dam? How Proponents of big dams are learning that small mc al odg a O aeadsilrti dams or run-of-river dams (no storage, therefore little much dally pondage can a ROR have and still retain 82 EvrnnaSsanititeyndtits label? Can daily or weekly pondage be part of an 82 Environmental Sustainability in the llydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future ROR definition, but any seasonal or annual storage Certainly, storage (annual/seasonal), run-of-river and cannot? pondage (daily/peaking) need to be defined and dis- cussed. Possibly, opponents and proponents could discuss the possibility of cooperating on the best tributary The length of river that becomes dried up as a dams if much higher-impact mainstem dams are post- result of a project can be the biggest impact of a pro- poned. Cramming all dams on a few tributaries in cas- ject. In addition, in some projects, the downstream cades, like PRC's superb Pearl River cascade, while impacts can exceed the upstream impacts. For these leaving a sample of the nation's rivers free-flowing, reasons, the two proxies of oustees and reservoir size should be debated and become more routine. In gen- can be rough guides only. While environmentalists eral, the higher up a dam is in the river basin, the seek to minimize dewatered length, there is no doc- lower the impacts. For example, higher tributaries trinaire solution. If the reach to be dewatered is unin- have lower productivity but higher endemicity than in habited, already dammed downstream or not signifi- the mainstem. In 1996, the EA conducted for Sogreah cant from the point of view of fish biodiversity or fish- Engenerie, the dam proponent for Laos's tiny Nam eries, nor for dry season animal or plant watering, Leuk hydro, was so roundly criticized at the ADB's then possibly a mutually acceptable compromise can board that it had to be redone (by Dr. M. Kollelatin, be reached. This generic problem demands attention, in 1997). While deficient EAs should indeed be re- as each cubic meter released can reduce profit for the done, sometimes this debases the EA into a post hoc nation by $1 million! Can weekly pulses of water to justification for the already designed project. The refresh pools suffice? Could animal watering points Mekong ROR controversy led UNDP to request the be supplied at less cost, in places more accessible to Mekong Secretariat promptly integrate environmen- wildlife? tal and social concerns fully into hydro design. As mentioned above, we need more clarity in the defini- Definition of the "area of influence" of hydro pro- tions of run-of-river vs. storage reservoirs, weirs vs. jects still causes difficulties. The World Bank's defini- dams, and pondage vs. storage. "Water in equals tion has withstood the test of time but is not well water out" cannot be the definition of run-of-river known. It includes the whole watershed and airshed schemes, as these could create extensive reservoirs of all project-related activities (reservoir, downstream in the lean season. "Water in equals water out" to estuary, delta and offshore, wetlands downstream, applies to all schemes where evapotranspiration, irri- resettlement sites, access roads, power transmission gation or outstream diversions do not occur. corridors, migration routes of wildlife, including fish), Environmentally, the barrier nature of the dam or and also includes indirectly affected areas, such as weir is critical (mainly its height); socially, the area existing roads that experience heavier use during flooded may be critical. construction. Of course, not all such airsheds and watersheds need receive the same scrutiny, but all Proponents of big reservoirs rightly point out that are legitimate areas for inclusion in EA work. The storage capacity is needed in the mix of most or all days are largely gone when the lone ecologist, arriv- national energy systems in order to provide electrici- ing often just before construction or sometimes after, ty in the dry season and for peaking. Storage is also asks to see something, only to be told by the propo- importantly needed in multipurpose and irrigation nent, "No, that will not be impacted so you cannot go reservoirs to provide water stored in the wet season there." In the case of China's Three Gorges dam, one for irrigation when it is needed in the dry season. As initial resettlement site was proposed in the desertic agricultural intensification normally creates lower net semi-autonomous province of Sinkiang several thou- impact than extensification in the urgent sand kilometers away, so it is not always easy to population/food supply race (Goodland, 1997), irriga- carry out EA work. In the case of Lao's Nam Theun tion (i.e., storage dams) need to be expedited. hydro, the area between Yunnan and Tonle Sap will However, this paper is restricted only to hydro pro- be included. jects. Proponents also point out that the distinction between storage and run-of-river is one of degree. Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 83 LARGE DAMS: Learning from the Past, Looking at the Future Figure 7: How To Distinguish Better Hydros From Worse A First Approximation of a Coarse Environmental and Social Screening and Ranking of Potential Hydro Sites The First Step of a Sectoral EA. Integrating Environmental and Social Impacts into Conventional Least-Cost Sequencing Opponents and those seeking to improve dams claim that a reliable first approximation to distinguish between 'better" dams and "worse" are two simple and robust proxies: first, the number of oustees, and second, the area lost due to the filling of the reservoir. These two figures suffice to rank, crudely but reliably, most sites. A second approximation disag- gregates these two numbers on further criteria. After these two, the next ranking should include downstream impacts, including the number of affected families, the length of river that will dry up, fish migrations and the minimum dry season release regime. 1. Social Rank Number of oustees: Figure 8 shows the number of oustees per megawatt. There is a huge scope for taking up projects with zero or very few oustees. It is necessary to disaggregate type of oustee by proportion with land and dwelling lost, land lost but not dwelling, and partial losses. Rural oustees should weigh more than urban. One question is whether replacement land is readily or scarcely available. The World Bank endorses the notion that it should be possible to reset- tle oustees successfully (World Bank, 1994). As this has rarely been the historical experience, this number needs to be stringently minimized in all future projects. Vulnerable Ethnic Minorities: The proportion of affected people in this category is important, as they are extremely difficult to relocate adequately. If it is the case that involuntary resettlement of such people has never been successful, then per- haps the project should not go ahead. The recent extension of the Bank's policy on vulnerable ethnic minorities to less vulnerable minorities may not best serve truly vulnerable societies. 2. Environmental Rank Intact Habitat Lost: The size ol the flooded area is the single most relevant proxy for environmental impact, yet proponents of dams rarely calculate it in advance and it is difficult or impossible to ascertain from dam publications. Historically, reservoir area has not been accorded great importance by dam proponents. Area flooded per MW ratio (Figure 8) shows how much scope there is for selecting projects with little or no reservoir (those in uninhabited rocky canyons), run-of- river or outstream diversions to reduce impacts. For aquatic biodiversity, perhaps the best proxy measurement is the kilometers of stream or river flooded. Generally, moist forest contains more biodiversity than dry ecosystems. Intact ecosystems are more valuable than agriculturally modified agro-ecosystems or barren landscapes. If part of the "land lost" due to dam construction is a national park or other conservation unit, that would weigh much heavier in the ranking. Conclusion: If projects are ranked on such social, environmental and downstream criteria, and if only projects with good scores are considered further, impacts will be significantly less than in the past, when EA started after a project was identified. 9. INVOLUNTARY RE';ETTLEMENT and mine drainage ponds also displace thousands of people, and displace more as the project operates Opponents and proponents agree that involuntary through the years. Reservoirs displace millions of resettlement must - and can - be improved. people, but only before operation, so the number of Resettlement is an inescapable companion of infra- affected people does not increase with time. structure development. Involuntary resettlement (IR) Reduction of downstream agricultural productivity, or and its impacts on people in general have become the harm to recession agriculture (e.g., Zainbezi) also most contentious of all socioenvironmental issues of increases displacement of people. dams. Adverse social impacts of big dams have been seriously underestimated (Scudder, 1997; Cernea Until recently, many social costs of dams were 1997), and this is nearly always the case, not the externalized. Violence, bloodshed and murders are exception. Open-cast coal mines, ash disposal sites reported in many cases involving controversial dams, 84 Environmental Sustainability in the Hydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future Figure 8: Rank of Hydropower Generated Following the two proxies of the number of oustees and the area of reservoir9 Country Project Name Megawatts Hectares Oustees ha/MW Oustees/MW China Three Gorges 18,200 110,000 1,300,000 6 71 Brazil/Paraguay itaipu 12,600 135,000 59,000 11 5 Venezuela Gun Complex 10,300 426,000 1,500 41 0 Brazil Tucurui 7,600 243,000 30,000 32 4 United States Grand Coulee 6,494 33,306 10,000 5 2 Canada Churchill Falls 5,225 665,000 0 127 0 Pakistan Tarbela 3,478 24,280 96,000 7 28 China Ertan 3,300 10,100 30,000 3 9 Brazil lIha Solteira 3,200 125,700 6,150 39 2 Argentina/Paraguay Yacyreta 2,700 172,000 50,000 64 19 Turkey Ataturk 2,400 81,700 55,000 34 23 Malaysia Bakun 2,400 70,000 9,000 29 4 India Tehri 2,400 4,200 100,000 2 42 Egypt Aswan High 2,100 400,000 100,000 191 48 Mozambique Cabora Bassa 2,075 380,000 250,000 183 120 Pakistan Ghazi Barotha 1,450 2,640 899 2 1 Brazil Sobradinho 1,050 415,000 65,000 395 62 India Narmada Sagar 1,000 90,820 80,500 91 81 Pakistan Mangla 1,000 25,300 90,000 25 90 Ghana AkosomboNolta 833 848,200 80,000 1,018 96 Nigeria Kainji 760 126,000 50,000 166 66 Laos Nam Theun 2 600 34,000 4,500 57 8 Chile Pehuenche 500 400 10 1 0 Nepal Arun III 402 43 775 0 2 Thailand Khao Laem 300 38,800 10,800 129 36 Brazil Balbina 250 236,000 1,000 944 4 Sri Lanka Victoria 210 2,270 45,000 11 214 Laos Nam Theun-Hinboun 210 630 0 3 0 Laos Nam Ngum 150 37,000 3,000 247 20 Thailand Pak Mun 34 6,000 4,945 176 145 Indonesia Kedung Ombo 29 4,600 29,000 159 1,000 Burkina Faso Kompienga 14 20,000 1,842 1,426 132 and are deplored by proponents and opponents alike Police then shot and killed five workers, senously But human rights violations bolster the case of dam wounded 30, while another 1,000 sought sanctuary in opponents People at India's Narmada project suf- a nearby church This was a labor dispute, not related fered greatly (Morse and Berger, 1992), Guatemala's specifically to the dam Proponents realize such ChLxoy (the 375 women and children massacred in events do not help their cause, and seek to prevent the early 1980s may have been victims of the civil war them Violence is socially regressive, as it penalizes rather than because they were oustees, according to the poor more than the rich, as noted earlier The the report of the 1996 forensic exhumation team), worldwide, sad record of involuntary resettlement. Lesotho Highlands Water Project's Muela dam man- since it was started on any scale after World War II, is agement fired 2,300 strikers in September 1996 well documented by the World Bank's 1994 report Environmental Sustainability in the Hydro Industry Disaggregating the Debates 85 LARGE DAMS: Learning from the lPast, Looking at the Future "Resettlement and Development." Recent years have should be ensured so that oustees are indeed prompt- seen a worldwide struggle to internalize the environ- ly better off. The lack of political will to want the mental and social costs of power development num- affected people to be promptly better off may be the bers of people involved are staggering and increas- main constraint. (See Figure 9) ing. IR must be perceived as a grand opportunity to help the poor, not as a constraint to providing more Poverty must be reduced, not perpetuated or exac- power. Oustees should be offered training so they or erbated. Eventual restoration of previous income lev- their children can benefit from project-related els and standards of living can no longer be the goal employment. of power proponents. If income is restored only sev- eral years after the move, that means a lower average Dam proponents claim that while IR may have not income over the oustees' lifetime. This means pover- been adequate in the past, this time it will be marked- ty has been exacerbated, thus contradicting develop- ly better. Proponents realize that although adequate ment's overarching goal: poverty alleviation. Non- IR has historically proved elusive, it is not impossible declining income implies stagnation, and this cannot to achieve. Proponents realize too that unless IR be called development. Practically all oustees are markedly and promptly improves, the future of the poor, and the main aim of development - poverty hydro industry will be jeopardized. Many if not most alleviation - will not be achieved by such a policy. proponents, increasingly the private sector, which has little experience with social issues, say that IR was Dam opponents, and those promoting poverty alle- mishandled in the past, but this time they have viation, insist that oustees must not be penalized for learned from previous mista]kes. The next phase of IR the greater good of the nation. This used to be will be a radical departure from the track record. viewed as idealistic, just as practically any provisions for IR were considered idealistic 50 years ago. Then a Dam opponents ask why the next IR component is government loudspeaker truck informned the villages likely to be greatly different from the last one. What to be displaced that they had two weeks to get out. is the evidence that robust historical trends world- Some may have dropped a few bales of roofing wide in similar projects will be significantly different thatch, but not much more. The question is: Should in the next project? Opponents also question the goal "development" substitute for human welfare? Of of IR. The goal of IR, where iit has to take place, is course, it is possible to achieve higher income levels, development; the oustees must be not worse off dur- such as by income supplements until incomes start to ing the resettlement; oustees must be better off rise above pre-move levels and have made up for lost immediately after, and the resettlement should be income during the move. Possibly such supplements prompt. This has recently become official policy in are not the best way to go, but they show that pover- China and Brazil, for instance, but not yet in develop- ty can indeed be reduced, given political will. ment agencies. Skeptics may claim that it is not pos- sible to make oustees even modestly better off Opponents urge upgrading involutary resettlement promptly after the resettlement. Future oustees often policy. They assert that rarely is 100 percent of any disinvest in the several years; before the move, and policy goal achievable, but in the case of involuntary then regress for a year or more immediately follow- resettlement, the goal - the eventual restoration of ing the move. income to pre-resettlement levels - is set too low, causing poverty to increase rather than decrease. If affected peoples really cannot be made even Because the reduction of poverty is the goal of devel- modestly better off after their move, a fundamental opment, oustees must be modestly or incrementally rethinking of resettlement is imperative. If develop- better off afterward, including taking account of ment cannot improve the lot of affected people, the income lost during the move itself. Sirnce the overall whole role of development could be called into ques- welfare of the nation is supposed to improve as a tion. Some stress is unavoidable, but provision of result of dam construction, compensating oustees land, schools, water, housing, clinics, community should be feasible. facilities, income restoration and rural electrification 86 Environmental Sustainability in the Hydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future Figure 9: Hydropower 'Efficiency' Ratios of Installed Capacity to Involuntary Resettlement and Reservoir Area 1000.000 * KEDUNG OMBO WORST VICTORIA PAK MUN MANGLA NARMADA SAGAR % CABORA BASSA KOMP ENGA 100.000 THREE GORGES KAL 0 KAINJI *SOBRADINHO AKOSOMBO TERRI ~~~~~~TTUK KHAO LAEM o*ASWNHG TEHRI TARBELA * ATATURK YACYRETA ASWANMHIGH GUATAPE ZIMAPAN NAM THEUN 2 10.000 ERTAN * PLAYAS INGARIND FUMAS * SAMUEL GUAVIO * ITAIPU BAKUN *TUCURUI OA ERRADAMESA BALBINA ARUN III GRAND COULEE ILHA SOLTEIRA PORTO PRIMAVERA 1.030 GHVRAN OLE0PRORMVR G-GHAZI BAROTHA GURI COMPLEX * O 100 * LAGRANDE 0.100 _ _ _ _ _ _ _ _ _ _ o3 DALESICE TOCOMA * EMBORACAO PEHUENCHE * SOGAMOSO * BENMORE 0.010 NAM THEUN-HINBOUN 0.001 VICTORIA BEST S 0.000 0 l 10 100 1,000 10,000 hafMW The first goal of dam project proponents must be encourage monitoring. to stringently to abbreviate the duration of the move itself. To make people wait for a couple of years in a Proponents and opponents agree that involutary temporary holding camps, after they have had to resettlement can be avoided in two ways. First, wher- leave their homes and before they are given access to ever possible, project sites should be selected such their new sites, is a recipe for disaster and dependen- that IR is not needed. This emphasizes the crucial cy. The goal is to make the move as painless as possi- need for sectoral EAs in selecting the best projects - ble. Having to live in a temporary camp is very coun- that is, the ones with no or very little IR. If the high- terproductive. In some instances, interim access to er costs of ensuring that the affected people are both old and new sites can be useful. Oustees can go promptly better off ultimately deters the project from on using their old land while their new land starts to being taken up, fine. That is a good cost-benefit analy- bear. The second goal must be to maintain income sis in action. The second way to avoid involuntary during the move, and the third to raise incomes resettlement is to convert IR into voluntary resettle- promptly after the move. Scudder (1997) makes the ment by making the conditions attractive. Avoiding IR important point that resettlement attention must con- by site selection follows from the improved least-cost tinue for decades or even to the next generation. This process, conservation and demand-side management. is a legitimate cost to be borne by hydro proponents Involuntary resettlement is both difficult and expen- that should come out of project proceeds and that will sive in terms of social trauma and therefore best Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 87 LARGE DAMS: Learning from the IPast, Looking at the Future avoided altogether. opporutunity cost reflects how much money is need- ed to persuade individuals to agree to move. Under Make Resettlement So Attractive That It laissez-faire economics, all transactions are based on Becomes Voluntary: Practi.cally all individuals have voluntary exchange, so when exchange is not volun- a price at which they become willing to move. tary, the economic argument is sacrificed. While it is Offering anything less is ultimately involuntary or possible to estimate the costs of "forced choice," the coercive resettlement. Involt[ntary resettlement previous generalization still holds. appears cheaper, at least to begin with. Thus, affected peoples are subsidizing beneficiaries. The terms of While resettlement ideally should be Pareto opti- resettlement should not be minimized by proponents mal (i.e., no one should be worse off), in practice seeking a higher return. The project is a development there are losers. The winners should compensate the project; affected people need to be promptly better losers, but determining how much compensation is off as a result. There is a strong but overlooked eco- required rapidly becomes subjective. That is why a nomic argument for making resettlement voluntary. modest earmarking of, say, 2 percent of power sales When a corporate executive, spouse and children are allocated to social and environmental concerns, espe- resettled overseas by a multinational corporation, the cially to retraining of the oustees, would be useful. deal is sweetened so much that involuntary resettle- One way is to provide productive assets - land is the ment becomes voluntary. Inducements include free most common - such that incomes are exceeded in furnished housing, servants, utilities, generous mov- the first year. Another way may be to offer once or ing and entertainment allowances, foreign supple- twice the average national income for life, if their ments, tax-free status, pay raises, free car and driver, incomes never reached anywhere near the national frequent home visits, and so on. Moreover, when average. Escrow accounts and similar means can potential oustees are very poor, landless laborers, encourage investments likely to foster rehabilitation. debt-bonded or debt peons, they may welcome reset- The following sequence is suggested: First, start dis- tlement because anything is better for them than cussing the project concept, pros and cons with all their present lot. Landless oustees - that is, people stakeholders and especially with affecited people. without paper titles to their land - deserve special Second, minimize resettlement by project selection, attention. They are almost always poorer, even than siting and design. Third, permit property sales only poor titled families, and should not be penalized to the project sponsors very early on so that normal because their poverty has prevented them obtaining attrition over the decade of planning and design title. The legally respectable category of usucapion reduces the numbers still further. Fourth, create should be implemented more than is the case today, incentives to leave voluntarily. The problem is likely so that propoments can provide titles to the land that to be greatly reduced if these measures are adopted. the landless have been using. 10 Financial Adequacy: Compensating oustees for Oustees should be the foremost beneficiaries of involuntary resettlement is not a privilege to be any project that forces their JR. Projects should be bestowed ex gratia, but a right. It ought to be counted designed with resettlers' needs in mind, especially as part of the expenses incurred in the course of jobs. While jobs are not inherited, boosting human completing a power project. Frequently the IR costs capital by education should, if done judiciously, help are usually underestimated, and resettlement ensure that the children of oustees continue to devel- arrangements have erred on the parsimonious side. op. Dam proponents have to acknowledge that with- Scudder concludes after four decades of hands-on out the sacrifice and cooperation of oustees, there research worldwide: "It is clear that large-scale water would be no project. The economic argument is that resource projects unnecessarily have lowered the liv- payment to settlers is part of the opportunity cost of ing standards of millions of people" (1997, and see the project even when migration is voluntary (at a 1993, 1994). Population counts, demographic rates, sufficient payment). When migration is involuntary, land valuation and the costs of necessary improve- any payment to the oustees is likely to underestimate ments (such as sites and services) are usually under- the true opportunity cost of the move. The true estimated. The infrastructure of involuntary resettle- 88 Environmental Sustainability in the Hydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future ment has often been provided minimally, grudgingly as a project is identified. Most project EAs used to or paternalistically. The concept of compensation is begin at about the time of project appraisal. A project- adversarial; the proponents usually offer less, while level EA is still started some years after identification the oustees plead for more. in too many cases, when the design is advanced. This debases EA into a post hoc cosmetic justification and Historically, proponents' demands have prevailed, is to be stringently avoided. While project-specific tit- and oustees have had to accept what they are offered, for-tat impact assessment and mitigation needs to be which shows that IR still has not been fully recog- strengthened, it is inherently much weaker than nized as rights rather than privileges. These rights selecting low-impact projects from the beginning. are full and essential components of power projects, This is partly because, at least in the past, specific as are cement, coal and turbines. Admittedly, IR was impact mitigation works only up to a point. In addi- recognized as something dam builders had to attend tion, not all impacts are identified. And some are to only as recently as the 1930s and '40s in developed never fully mitigable. For example, conscientious countries. Even the U.S. Tennessee Valley Authority implementation of whatever the malaria or fish biodi- of the 1930s was not successful in all its IR schemes. versity experts advise certainly improves the situa- This component of hydro projects has yet to be fully tion. If individual impact mitigation achieves 80 per- internalized and conscientiously implemented. IR cent of its goals, the project will be better off. budgets are often the first to be cut. Cost estimation However, in addition to individual impact mitigation, a must be rectified to err on the generous side. It is really well-designed project would from now on most encouraging that several recent projects have include a bold measure to account for all the unmiti- earmarked a modest fraction of power sales from the gable 20 percents, and ensure that the area is unam- outset for social and environmental expenditures for biguously better off. In the case of hydro, the conser- the life of the project. Acceleration of this trend would vation in perpetuity of a large tract of biodiversity in be highly effective in reducing social and environ- the watershed is the paradigm. Ironically, the most mental problems of dams. But checks and balances affected biodiversity, aquatic biodiversity, is the least will be necessary to ensure appropriate allocation of mitigated; therefore, conservation of these biological such funds should political will waver. Leaving IR cost resources needs to be enhanced. On the social side, estimation to the proponent has invariably led to ensuring that all villages in the region have wells, underestimation. schools, health campaigns, rural electrification or a package of benefits, even if not directly impacted, is the sort of measure needed to elevate a possibly 10. PROJECT-SPECIFIC MITIGATION questionable project to an unequivocally beneficial When all the above sectoral prerequisites, DSM, one. pricing and least-cost have been met, and when The latest example is Brazil's biggest hydro under national agreement has been reached that additional construction, the 154-meter-high Serra da Mesa, generation capacity is needed, and that a dam in this planned to generate 1,293 MW on the Tocantins River case is indeed the least social, economic and environ- upstream of the Tucurui hydro project (Goodland, mental cost, dam-specific social and environmental 1978). The $1.1 billion Serra da Mesa has no final EA, precautions need attention. Proponents and oppo- the biomass has not been removed, and $115 million nents agree, however, that sectoral environmental of commercial timber will be flooded. The 1,784- precautions have to precede project level precautions, square-kilometer reservoir (Brazil's most volumi- and that sectoral measures are more powerful than nous) is now filling for the next 18 months, while 40 project measures - although both are essential. kilometers of the river below the dam is dry, and as a consequence, killing all aquatic and those terrestrial Conventional project-specific environmental assess- oraim deedn nterve.Aot1 ecn ment s becmingroutie (Wold Bnk, 191),organisms dependent on the river. About 10 percent although still not satisfactory (World Bank, 1996) It of the reserve of the nomadic Ava'-Canoeiro, a vulner- alhog stl no saifatr (Wrl Bak 1996).AIt able ethnic minority, will be flooded. Their compensa- has been a big struggle to begin a project EA as soon tion, in addition to more land elsewhere, will be $100 Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 89 LARGE DAMS: Learning from the P'ast, Looking at the Future for every $1 million earned by the proponent, Furnas. but is important for subsistence. Often fisheries bur- By way of contrast, following a thorough 1996-97 geon in the few years or decades after impoundment GHG/biomass calculation, Lao's Nam Theun Two so people near the new reservoir are cften better hydro clearly demarcated the forest planned to be off. 12 They may not adapt to catching reservoir fish flooded, and is well on the way to removing most bio- and may be outcompeted by recently arrived com- mass, not only commercial timber. mercial fisherfolk. People downstream from the dam normally are able to catch far fewer fish. This is relat- The lesson is that if the EA is to be at all effective, ed to the vexed problems of arranging for low-flow it must start as soon as the specific hydro design minimal releases, as well as to water quality. starts, and it must also be transparent and participa- tory. The whole EA process rnust be in the public Fish culture is possible, and this can greatly help domain from the beginning. When project-specific EA the poor. But it does nothing for fish biodiversity and follows sectoral EA, the former will be much easier, may decrease biodiversity if aggressive exotic com- agreement will be expedited, and opposition less like- mercial species outcompete indigenous species, as iy. happened in Lake Victoria. The introduction of Nile Perch caused the extinctions of hundred of Specific impacts that are not yet fully mitigated are Haplocromine species. fish and aquatic resources, sedimentation, biodiversi- ty, water quality, human health, and downstream Passage facilities such as fish ladderts work for one impacts. These are enumerated in Figure 4. This family of fish, the Salmonidae, especially in the north- paper proposes that resolution of hydro's broad west United States, New England, Scotland and debates (transparency, DSM, balance of hydro size Scandinavia. Such fish passage facilities rarely work and type, sectoral least-cost project selection) will in tropical ecosystems, and opponents of dams claim reduce impacts much more than a reliance on pro- there are biological reasons why they probably never ject-specific EAs. Even so, a project EA remains nec- will play much of a role. Electric luring of fish into essary, according to the World Bank (1996). So this containers or elevators (e.g., Yacyreta) may have a section notes the status of each impact, and how well role. Recent research-stage findings may alter this such impacts are indeed mitigated. This does not gloomy picture (Acreman, 1996a,b). mean these impacts are not imnportant. On the con- trary, they can sometimes be the most serious The second major impact on fish relates to their impacts in specific hydro projects - induced seismic- biodiversity. A full one-fifth of the worlcl's freshwater ity, for example. They are elaborated elsewhere in the fish are endangered or have been extinguished in literature cited. 11 recent years; most of this loss relates to the introduc- tion of new species of fish, dam construction and the Fish: There are two separate issues with regard to resulting diversion of water, and pollution. Pollution fish and aquatic resources: subsistence and commer- can be reversed: Ohio's Cuyahoga River used to cial fish production and fish biodiversity. The first is catch on fire a couple of decades ago; rnow it has been the nutritional and commercial aspects of fish. The restored to a clean trout stream. Salmon have accepted sustainability principle is that nutritional returned after centuries of absence to London's standards and commercial benefits should not Tharmes, and to the Rhine. Dams, on the other hand, decline. Nutritional standards and subsistence fishing are not yet treated as reversible. The case to remove often decline as they are non-imarketed and are old dams has begun but has a long way to go before underestimated or completely overlooked in calculat- they and their impacts will be removed. In species- ing compensation or mitigation. Some families may poor temperate rivers, cleanup and restoration is pos- obtain most of their annual fish consumption in only a sible; it will not be possible to the same extent for couple of fishing trips per year when the fish are tropical rivers rich in biodiversity. Many tropical more readily available. Sociological fish surveyors aquatic species will be extinguished by dams before usually miss such crucial but sporadic events. Often they are known to science - unless very special pre- so-called evening or weekend fishing is downplayed cautions are implemented. The introduction of exotic 90 Environmental Sustainability in the Hydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future fish species, either accidently or purposely, often seri- commissioned in 1981. Nearly half its 12 million cubic ously damages local fish faunas. The main measure is meters of dead storage capacity was filled with sedi- to conserve a representative fraction of the national ment by 1993, and the exceptional floods of late 1993 river system in a free-flowing state. For this a national filled another 5 million cubic meters. Generation has aquatic biodiversity survey is needed. This is a rela- to cease for a few months until mid-1997 until the esti- tively low-cost means of improving hydros. mated $40 million remedy can be completed (a new outlet from the dam at a higher lever above the mud, Given that most dam construction is planned to combined with many check dams upstream). The take place in tropical countries, the fish fauna may be U.S. Army Corps of Engineers calculated the useful orders of magnitude greater than that encountered in life of El Salvador's 135 MW Cerron Grande reservoir temperate dams. Because dams are often now built (Goodland, 1974) would be 30 years, rather than the in remote anthropogenically undamaged areas, the originally estimated 350 years (McCully, 1996). fish fauna may be extraordinarily rich, often intact and undocumented. Dams in wet lowlands with high Biodiversity: Sustainability demands at least no rainfall may support rich faunas, but low endemicity. net loss of species. Detection of no net loss means Sites in mountains and those fed by snow melt sup- one has to know what is there to begin with - in port species-poor faunas, but high endemicity. The other words, careful biotic surveys to determine all other difficulty is that many tropical fish migrate sea- taxa needs to be conducted. This has never been sonally as an essential part of their life cycle. If such done for any hydro project, as far as I am aware. migrations are stopped, such as by a dam, the fish Thus, the conservation of biodiversity is not fully inte- species suffers or is extinguished. Because the bio- grated into the planning of hydro projects. The main logical character of most tropical rivers is not well- de facto measure of conservation has become site known, fish taxonomy surveys ought to be conducted selection and the resulting reservoir size. What to identify new or rare species. In addition, more amounts to on-site biodiversity conservation in hydro studies are necessary to see if the new or rare projects, then, is whatever adjacent areas happen to species also live in adjacent rivers not slated for not be flooded by the project. In practice, the conser- damming. Laos's Nam Theun dam is the only project vation of on-site biodiversity is dependent upon not I am aware of where this is happening. At present, flooding large areas, particularly intact habitat, such the sustainability principle, which states that a repre- as tropical forest. The next main mitigatory measure sentative sample of the nation's rivers be conserved is the conservation in perpetuity of an offset. For in their free-flowing pristine state, is not being imple- example, Lao's 450-square-kilometer Nam Theun mented widely and is not of major concern to private Two reservoir proposes to conserve the 3,710-square- developers. Moreover, mitigation measures for fish kilometer watershed. This has the added benefit of biodiversity often do not effectively compensate for vastly reducing sedimentation risks and should be the impacts. standard for all hydro projects. The basic principle on which an agreement is sought concerns the financing Sedimentation: As a relatively straightforward of the mitigation or offset. A small fraction (say, 1 per- impact and one that can directly reduce profits by cent each for environmental and social measures) of curtailing live storage, it is surprising that sedimenta- the hydro's income should be allocated in perpetuity tion persists as a big problem. Sedimentation takes to watershed management, conservation of biodiver- planners by surprise for two reasons. First is that sed- sity and prolonging dry seasonal flows. imentation increases exponentially, not arithmetically. When a catchment is developed by agriculture or Water Quality: Until very recently, little attention roads, for example, sediment yield explodes geomet- was paid to removing biomass from the area flooded rically. Second, most sedimentation is very sporadic. (Ploskey, 1985). However, if even a small proportion A river may carry little sediment for years, only to of trees are profitable species, it may be worthwhile deposit enormous volumes in one night of a storm. to remove them. Much biomass is unprofitable, such Nepal's Kulekhani hydro project, now 92 MW, was as brush and other non-marketable organic matter. In estimated to have a useful life of 85 years when it was the case of 7,600 MW Tucurui dam, which created a Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 91 LARGE DAMS: Leaming from the Past, Looking at the Future 2,430-square-kilometer reservoir, the military pension Anopheles species are a vector to this parasite. fund corporation was contracted to clear portions of Malaria is increasing largely due to the lack of politi- the adjacent area and is expecting to make an enor- cal will and finance. Insecticide-impregnated bed nets mous profit. Unfortunately, it borrowed many mil- are effective in reducing incidence. Education cam- lions of dollars from the Banlk of Paris and then bank- paigns and vector breeding site destruction can sig- rupted itself (Goodland, 1978). Now that proponents nificantly reduce the risk. Resistance of mosquitoes are starting to internalize GIH-G production, biomass to common insecticides and resistance of the removal is a rising priority. As a result, water quality Plasmodium protozoan parasite make rnalaria increas- in the reservoir is expected to improve. The length of ingly expensive to control. Chemical prophylaxis and time water takes between entering and leaving the chemotherapy is available, at least for the well-educat- reservoir is the critical variable. Brief retention time ed rich. (days) results in better water quality than sluggish retention time (months). Schistosomiasis is also carried by a water-related host, a few species of aquatic snails. Snail control is Water quality downstream is easier to fix by means not easy and is expensive. Draining snail habitat and of variable outlet structures in the dam. Multiple-level mollusciciding moist areas is very expensive initially. penstocks in the power house also can improve water The initial enthusiasm for the main molluscicide, quality and temperature of turbined water. Re-regulat- organic tin, has waned because it damages the ing ponds also can be useful in adjusting tempera- ecosystem so severely. Now even tin-antifouling paint tures and oxygen levels of turbined water. Mercury is for hulls is widely banned. The difference from malar- a relatively new water quality problem (see end- ia is that once destroyed, snails immigrate very slow- notes), and now silicate retention behind the dam ly, while mosquitoes can be blown many kilometers may impair the growth of silicate-needing plants overnight to repopulate a sanitized zone. Education is downstream. important and a powerful preventive. C hemotherapy using the 1970s drug praziquantel is relatively cheap Human Health: Sustainability demands human and relatively effective, and a person only needs one health shall not decline; development demands it oral dose a year in most cases. It is also manufac- shall improve. Health and sustainability are mutually tured in developing countries. Similar to malaria, supportive; investment in sustainability and health schistosomiasis is largely a disease of poverty and enhance each other. Historically, some hydro projects lack of education. have damaged health; diseases related to irrigation projects damage even more. The sad fact is that Japanese "B" encephalitis is different in that it is development projects often exacerbate disease. viral, and it is carried by several genera of mosqui- Project-related health measures seek to prevent the toes, some of which breed in reservoirs and are asso- introduction of diseases, and prevent their spread and ciated with human settlements. A range of wild and aggravation. Reservoirs can cause epidemics of three domestic animals (birds, pigs, rodents) host this dis- water-related diseases: malaria, schistosomiasis and ease, which is severe for infants and the elderly. Japanese "B" encephalitis. Prevention and therapy are similar to that for malaria. Malaria is intensifying worldwide, killing more A range of other diseases are not water-related but than a million people every year, and sickens over are dangerous in many development projects. AIDS two orders of magnitude that number. Malaria inci- is still incurable, increasing sharply ancl usually fatal. dence in some villages exceeds 100 percent, as some The main cheap measure is to reduce the incidence people get it more than once a year. The cost of two of common venereal disease, as VD victims are far or four weeks a year out of work due to malaria is more likely to catch AIDS. Free condorns reduce onerous. The female Anopheles mosquito breeds in both diseases and it is in the interest of proponents to many tropical and subtropical reservoirs and is asso- supply them easily. Intestinal parasites, TB, pneumo- ciated with development, as mosquitoes breed in nia, influenza, measles, dengue hemorrhagic fevers, tires, cans, wheel ruts and water tanks. Many and accidents often increase in development projects, 92 Environmental Sustainability in the Hydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future reservoir-related or not. In theory, all these diseases ators to conduct a release. Flood releases (artificial need not be major risks. They are widely preventable. flooding) for recession agriculture and other needs is Unfortunately, the fact is that they commonly normally not considered a priority. There is no hydro increase in development projects generally and in in the world that is operated to provide an artificial reservoir projects too. The World Health flood to simulate pre-dam regimes. The Manantali Organization should routinely be a partner in such dam may be the single exception, but even there it is projects (Hunter et al., 1993). not clear if pre-dam floods will be replicated once all the turbines are installed. Mauritania's national plans Downstream Impacts: Downstream impacts can assume that historic floodings will cease, and Mali exceed impacts above the dam in certain cases; has not signed on to the trinational draft agreement hence they deserve much more attention than is allocating the costs and benefits of the hydro project. common nowadays. Downstream social impacts can Furthermore, downstream priorities are not mandat- exceed upstream resettlement upheavals. For exam- ed in the international agreements (Horowitz person- ple, 10,000 Malinke, a tribe in West Africa, were reset- al communication, 1997). tled by Senegal's Manantali reservoir, while double or triple the number of riparians downstream have fur- Even where they are achieved, controlled releases ther impoverished as a result of the dam, and many scarcely substitute for the pre-dam regimes on which will be forced to leave their plots because of declining many poor depend. This should be systematically productivity (Horowitz personal communication, addressed in design and operation. The Manantali 1997). Clearly, the number of downstream riparians dam on the Senegal River (Horowitz, 1991; Koenig harmed by the dam must be minimized, and fully and Horowitz, 1990) is one of the few where this compensated. If they have to resettle, they should be could be addressed for the first time. Controlled made promptly better off after their move. flooding as a mitigation measure is not at all routine as of yet. This issue has a long way to go before it is There are additional impacts that are rarely resolved. addressed. These include cessation of annual fertile silt and moisture deposition, leads to declining crop yields, grazing impairment, fish declines and wildlife 11. GREENHOUSE GAS EMISSION declines. Often aquifer recharge is impaired; wells DAMAGE COSTS dry up; water for crops and for vegetation decline. The decrease in vegetation accelerates deforestation, Hydro proponents ask: Why ever should the hydro as people must search for fuel wood and lumber else- industry worry about greenhouse gas emissions? where. Declines in productivity and income acceler- After all "hydropower plants produce no carbon diox- ate labor migration from the area, especially among ide," according to the U.S. Department of Energy's young men. This in turn further burdens the women, 1994 brochures. The editor of a leading U.S. hydro children and the elderly. Nutrition also worsens. In journal opined in late 1996 that hydro is "clean ener- addition, the decline in water availability and agricul- gy, producing no toxic gases like coal." tural yields increases conflicts for water and other scarce resources. Furthermore, the construction of a Opponents point out that such ignorance further dam forces people who are long adapted to cyclical tarnishes hydro's reputation. In fact, hydro produces floods to switch suddenly to rain-fed livelihoods. The some GHG but far less than coal-fired equivalents. 13 switch compounds the struggle to survive and usual- There are very few exceptions to this generalization; ly triggers further impoverishment. the Balbina dam in Brazil is the big exception. Decay from Brazil's large, shallow and densely forested 250 Managers of hydro facilities find it extremely diffi- MW Balbina reservoir (236 square kilometers) may cult to accommodate the needs of downstream ripari- generate more GHG than a coal-fired equivalent ans. It is difficult because downstream water is need- (junk and Mello, 1987; Fearnside, 1995). The mes- ed during the dry season, precisely when it is in the sage for the hydro industry is clear: Admit that all shortest supply and the most expensive for dam oper- hydro projects produce some GHG from decay, and Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 93 LARGE DAMS: Learning from the Past, Looking at the Future from cement and steel manufacture, but that coal- on Climate Change (FCCC), which became interna- fired equivalents normally generate orders of magni- tional environmental law on March 21, 1994. tude more. All hydro proposals from now on should Signatories to this convention seek to "achieve stabi- compare their GHG production with that of a coal- lization of greenhouse gas concentrations in the fired equivalent. In addition, the selection from atmosphere at a level that would prevent dangerous among alternative dam projects should be influenced anthropogenic interference with the climate system." by how much GHG emissions a particular dam would The targeted level should be achieved within a frame generate. This new sustainability criterion will sufficient "to allow ecosystems to adapt naturally to demote large shallow forested reservoirs, and pro- climate change, to ensure that food production is not mote small reservoirs in non-forested sites. Biomass threatened and to enable economic development to removal will not be a panacea. New dams in tropical proceed in a sustainable manner." rain forest, if unavoidable, will find it very expensive to remove biomass. Tropical rain forest is often inac- Some signatories seek to return their GHG emis- cessible, difficult to burn, and difficult to commercial- sions to 1990 levels by the year 2000. This means that ize even high-value tropical timbers. governments are now looking for cost-effective ways to meet their C02 reduction targets. The current Proponents claim that the GHG emissions result- slow progress is increasing the risk of massive dam- ing from the manufacture of the dam's cement and age. The 150 governments met in Bonn in March steel, plus the energy used in the construction, 1997 but failed to agree on any specific targets or amount to less than 10 percent of the annual C02 schedules. Australia is the sole OECD country resist- emissions of the fossil-fuel equivalent. The largest ing GHG reductions. The European Union now feels proportion of GHG emissions; from a dam is caused GHG emissions have to be cut by 15 percent below by the decay of flooded biomass, which includes 1990 levels if major damage is to be prevented. organic soil matter, peat, roots and vegetation. The Unless LDCs join GHG restrictions, investors may types of biomass vary greatly, and the amount which well transfer jobs and capital to LDCs ars they will will eventually rot also differs markedly. Biomass in have lower standards than OECD nations. The com- mountainous, cold, deep, dark, anoxic water may not petition to lower environmental standards already decay, not even anaerobically. Ancient wooden ships occurs in the hydro industry. are recovered relatively intact: from oceans and lakes, for example. Depending on circulation and stratifica- The second fact is that climate has already started tion, anaerobic decompositiorn ceases below about to change faster than historic fluctuations, although 40 C. If marketable timber is removed before scientific debate continues on the precise details of impoundment, the carbon will be sequestered until change. Now even conservative econornists are the product in the form of furniture or buildings, for admitting the gravity of the problem. Nobel prize win- example, rots or is burnt. Wood fuel extracted from ning economists Robert Solow and Kenneth Arrow, the reservoir, even when burnt, might displace with support from 2,000 other economists, publicly kerosene or dung and so may be a net carbon benefit. acknowledged in 1997 that GHG was more serious Trees left standing in the filled reservoir can be har- that they had thought. vested years later or when thcy break off and float vested ears laer or hen the breakoff andfloat hile it is still just statistically possible that these downstream. It is possible that the GHGs produced huge changes lie within "normal" climatic variation, from large shallow reservoirs in densely forested he changes are fain Global" tinsuran, sites may exceed the gas-fired equivalent. From a cli- the probabilities are falling. Globally, the insurance mate change perspective, these projects should rnot industry is betting in premium setting, insurance can- mate changen persp ective, these projects should notcelations and risk calculations that climate trends will worsen. The industry is now lobbying governments Two facts make it imperative to take the risk of cli- to accelerate their actions to prevent climate change. mate change more seriously than at present. First, Developing countries do not have the mroney to pro- over 186 governments have sigyned, and about 100 tect themselves from climate change as much as (1996) have ratified, the U.N. Framework Convention OECD countries can. In the case of developing coun- 94 Environmental Sustainability in the Hydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future Figure 10: Potential Areas of Agreement 1. a) Revamping, rehabilitation and updating (even upgrading) existing industrial facilities is often economically and environ- mentally cheaper than installing new energy capacity. b) Permit new capacity only when revamping is substantially complete. c) Permit new capacity only when most DSM, efficiency and pricing is substantially complete. 2. a) Removal of subsidies would level the playing field between coal and hydro and other renewables. b) Because fossil fuels and nuclear power have been subsidized so much and for so long, is there a case for renewables to redress this historic imbalance, until the costs of the world's rapidly deteriorating environment can be internalized? 3. a) Internalize today's largely externalized environmental and social costs, such as SOx, NOx and GHG in economic cost- benefit analysis. While who pays is important, it is a separate question; compensation to LDC's internalizing such costs may be essential. b) Facilitate GHG emissions trading. c) Adopt the principle of binding GHG-reduction or emissions targets by all countries before the end of 1997; goals to be adjusted as evidence accrues. 4. a) Reverse current declines in research and development on renewables; increase R&D commensurate with increasing climate change risks. b) One option is to encourage the OECD to agree on renewable R&D targets, for example, 25 percent of energy R&D by the year 2000. c) Govemments should also support some R&D on GHG sequestration and clean coal, including gasification. 5. a) Oustees must not be "as well off sometime after their move"; oustees should be better off promptly after their move. b) The eventual goal is to abolish involuntary resettlement entirely, making all resettlement voluntary through financial and other incentives. 6. a) Ensuring sustainability could be achieved by allocating a small fraction of all power project proceeds to social and environmental needs in perpetuity. b) Hydro projects should invest in the source of their raw material by catchment conservation. tries, prevention, not a cure, is the only possibility. Methane contributes 13 percent to GHG accumula- tion, and a substantial part of this is from fossil fuel The world derives about two thirds of its commer- exploitation, such as coal mine gas. Although CH4 is cial energy from fossil fuels, of which two thirds is less abundant in the GHG mix, it is more than one from coal. About half of greenhouse gas is carbon order of magnitude more effective in forcing climate dioxide; most C02 (80 percent) is energy-related, and change than is carbon dioxide. Methane is produced emissions now reach 22 billion tons of C02 annually. in reservoirs by biomass rotting under anaerobic con- Electric power generation worldwide contributes 25 ditions; carbon dioxide is produced from more aero- percent of GHG, mainly from coal. Because there is bic rotting. Biomass in deep, stagnant, stratified, cool, so much coal available worldwide - possibly 236 dark reservoirs is likely to decay anaerobically; bio- years' worth at current consumption levels - there mass in shallow, light, warm reservoirs with brief is scant prospect for an impending fuel scarcity that water retention times is more aerobic and hence will would send the kind of price signal needed to phase produce carbon dioxide. Residence time and stratifi- down coal. Moreover, because developing countries cation in reservoirs should be routinely calculated persistently experience capital shortages, they are during sectoral planning, as should the ratio of live to less likely to opt for higher-cost technologies, such as dead storage. The other characteristic of reservoirs solar, on their own. that should be systematically calculated are the peri- Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 95 LARGE DAMS: Learning from the Past, Looking at the Future coal (based on the equivalency that 1 ton of coal Figure 11: Suggestions for dam data to be equals about 2,100 kWh). The health and environ- divulged before permitting new reservoirs mental effects of burning that amount of coal can be estimated. If the expected deaths frorn the next hun- dred-year flood are regrettably allowed to occur, pre- 1. Number of oustees or affected people, of which sumably Three Gorges will sail ahead. One has to what proportion are vulnerable ethnic monitories. balance the trade-offs. If the approximately one mil- 2. Size of reservoir or area lost by flooding, including lion oustees can be made better off in that overpopu- the types of ecosystem to be lost. lated nation, surely avoiding the burning of 40 million 3. Ratios of energy per oustele and energy hectare tons of coal annually is preferable. Proponents and lost, if hydro is the prime benefit opponents alike need to make such comparisons sys- 4. Dead vs. live storage ratios. tematically and transparently. 5. Average depth of reservoir and stratification (anaerobic hypolimnion: H2S, CH4 vs. aerobic epil- Proponents and opponents both have big stakes in imnion: C02). 4 the rate at which GHG is internalized in cost-benefit 6. Tons of coal equivalent displaced; ratio of GHG analyses throughout the energy sector. If the hydro produced by hydro vs. fossil equivalent. industry insists on a level playing field and on good 7. Is the area seasonally exposed; in other words economics, GHG will be internalized sooner and the what is the drawdown strip? transition to hydro and other renewables will acceler- 8. Is national aquatic survey complete? (Cascade vs. ate. The irony is that reluctance to internalize dam fewer dams on many rivers). externalities such as involuntary resettlement has 9. Dam height. led, in part, to a decline in support for dams. In con- trast, the fact that currently there is less pressure to internalize coal's even more severe externalities, odically exposed drawdown strip (the strip between such as C02 and involuntary resettlement, has result- the reservoir's high-water and low-water marks), ed in increases in coal use - an environmentally ret- because this has major implications for ecological rospective course. planning. Dam proponents, for a number of reasons, have While natural gas produces much more energy been vulnerable to criticism. By focusing on dams with less GHG during generation, leaks from and their the adverse impacts, dam opponents have pipelines make gas almost as polluting as coal in allowed proponents of coal to escape criticism for some countries. As there are only about 40 years of their failure to internalize coal's social and environ- oil and 56 years of gas left, coal is by far the most mental costs. In the competition between energy important fossil fuel to control. Proponents claim that sources, dam opponents have, in effect, made coal proven hydro potential amounts to about five times more attractive to the market. This trend is socially, what is currently exploited, the equivalent of today's economically and environmentally impr-udent. annual oil production. The need to make the transi- tion away from GHG production and toward hydro and other renewables is clear to both dam opponents 12. CONCLUSION and proponents. The vision for dams is that they should support Many countries face agonizing trade-offs between economic and social progress and be environmentally massively increasing the burning of coal, on the one sustainable. Figure 10 outlines areas of common hand, and constructing enormous dams, such as ground in the hydro debate. Agreement in these China's Three Gorges Dam and India's Narmada areas would be an important step forward. Hydro Dam, on the other. China's Three Gorges dam is pro- proponents should be required to provide estimates jected to generate 84,000 gigawatt-hours, which is the of environmental and social data, such as those out- equivalent of annually burning 40 million tons of local lined in Figure 11, before they are pernmitted to build 96 Environmental Sustainability in the Hydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future new reservoirs. The vision is for the best and most Tucurui. He served as independent commissioner for sustainable dams to become an interim stopgap mea- Canada's Great Whale James Bay hydro enquiry. He sure on the transition to other renewables - the less- was elected president of the International Association er of two evils, as opponents put it. The phase-down of Impact Assessment, and metropolitan chair of the of coal to gas and hydro with other renewables needs Ecological Society of America. Before joining the to be accelerated. The transition to sustainability is Bank he worked for the governments of Brazil, urgent; limiting global warming to 2° C requires a 50 Malaysia and Bangladesh inter alia. percent cut in GHG emissions. That is impossible without a major shift to hydro and other renewables. 2. The term "proponent" is used here to mean those promoting dams, often hydro engineers who Ensuring that hydro projects are sustainable nec- feel that dam benefits clearly outweigh their costs, as essarily means that some projects will not go for- well as the hydro and related industries (turbine man- ward. Opponents will argue that by the time all these ufacturers). ICOLD does not promote dams; it seeks preconditions and qualifications have been met, it is to establish guidelines for sound design and con- unlikely there will be enough eligible sustainable struction. "Opponents" is used to mean critics of hydro sites to substitute substantially for fossil fuel. dams in general, often those environmentalists wanti- To the extent this is the case, hydro will displace only ng to ensure the benefits clearly outweigh the costs, some fraction of the coal thermals that would other- particularly the environmental and social ones, and wise be built. Without higher standards, hydro will those questioning specific dams, such as IRN. This is continue to decline and coal will continue to increase. clearly a generalization of two ends of a long dis- The fact is, it is economically imprudent to continue parate spectrum. The long track record of big dams externalizing coal's social and environmental costs in industrial countries and their benefits needs to be while at the same time internalizing those same costs systematically used to ensure that dams in develop- of hydro projects. Proponents will claim that there ing countries learn from the past. Partly because, by are enough sustainable hydro sites available to dis- definition, developing countries are difficult places in place substantial amounts of coal, and that sustain- which to ensure high standards, partly because tropi- able hydro is an invaluable bridge to a solar/wind cal ecosystems are vastly more complex and less transition. Because the price of non-hydro renewable understood than temperate ones, and partly because energy is tumbling, the hydro industry may have developing countries are often overpopulated, hydro's only a matter of decades to become sustainable or be track record is not improving fast enough. Hence the outcompeted by other renewables. controversy. 3. By far the best documented and thorough account of the inadequacies of hydro projects is the recent book by McCully (1996). This is the starkest For their helpful comments on earlier drafts, I warning for the hydro industry to become environ- offer warm thanks to Michael Horowitz, Maritta mentally sustainable. Further details are available in Koch-Weser, Etienne Linard, Ken Mott (U.N. WHO), the three volumes by Goldsmith and Hildyard (1984- Engelbertus Oud, Thayer Scudder, Robert Robelus, 91), also in Pearce (1992) and Sklar and McCully Salah El Serafy and Jan Veltrop. (1994). 4. This is about the second time a major operation has cut its ties with the World Bank Group partly on environmental grounds. The first was the U.S.-based 1. The author is environmental advisor to the mining corporation Freeport-McMoRan, operators of World Bank based in Washington, D.C. He has visited the world's largest gold mine, in Indonesia's Irian or worked on environmental impacts of many big Jaya. Freeport canceled its MIGA insurance just dams worldwide, such as Itaipu, Yacyreta, Three before an independent commission of enquiry was Gorges, Xiaolangdi, Ertan, Arun, Nam Theun and launched to assess allegations of human rights and Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 97 LARGE DAMS: Learning from the l'ast, Looking at the Future environmental abuses in 1996. Unilateral insurance "an ecological catastrophe," "not tenable" and "out- cancelation quashed the probe as MIGA became no dated technology." He called the environmental longer connected to Freeport. report "insufficient." ABB Chair Percy Barnevik is reported to be defending Bakun against "environ- 5. "Oustee" is a term meaning ousted people, such mental fascists." as people ousted by a reservoir. The term is used here because OED lists it (Giiles Goodland, OED, 9. It has been unexpectedly difficult to obtain "area personal communication, 1994), it is readily under- flooded" by reservoirs as it is not comrnonly provided stood and widely used, and there seems no better in the literature. This suggests that the area flooded choice. The synonyms "displaced person" and "reset- has not been important to proponents. Similarly with tler" are less precise. "Affected person" is a non-syn- oustees, the World Bank's OED report notes that onymous euphemism. oustee numbers are simply not known for earlier pro- jects. Installed capacity (MW) is always easily avail- 6. This paper is restricted to these ten major areas able, but the far more meaningful GWh is exception- in the interests of brevity and because the workshop ally difficult to obtain, and of course varies from sea- is unlikely to allocate as much time to the other very son to season. Figure 8 should therefore be used important impacts (tabulated in Figure 4) such as with care, as GWh has not yet been systematically fish, sedimentation, biodiversity, water quality and collected and this would make the rank more mean- downstream hydrology. These are crucial to making ingful. However, use of 50 percent plant factor is hydro sustainable. This list of ten topics is not ranked unlikely to change the ranking unduly. Proponents in order of importance; rather it follows a rough plan- should be required to count oustees well in advance ning sequence (except for greenhouse gas produc- and to provide reasonable estimates of area lost to tion). flooding also well in advance. The other important 7Mercuycontamination in reservoirs is a rela- caveat of Figure 8 is that hydro is not the major bene- 7. Meu ry t fit of several of the projects listed (e.g., Three tively recently discovered impact. Mercury seems to Gorges, Tarbela, Aswan High, Mangla). A next arise from its use in recovering gold in the Amazon, approximation using GWh and non-hydro benefits from coal-fired thermal generating plants, and traffic thusowimodify this fis approximatio ranking in OECD and elsewhere, but is in some soils without such sources. It is accumulated in the organic i0. Usucapion is a legal category of land owner- (methyl mercury) form from sediment, especially in ship whereby the landless use a plot well for some anoxic humus and peats, through algae and insects to years, until they have earned the right to continue to fish. Poisonous MeHg accumL[lates up the food chain use it. to such an extent that carnivorous fish consumption can harm vulnerable humans, such as children and 11. As mentioned, the best general sources on pregnants. The U.S. FDA limit: of 1.0 mug/g wet wt is hydro's impacts are McCully (1996) and Goldsmith commonly exceeded. See: Leino and Lodenius and Hildyard (1984-91). Goodland and others (1978- (1995), Bonzongo et al. (1996), Tremblay et al. 1996) amplify hydro mitigation, as does Helland- (1996), Allen-Gil (1995), Meulman et al. (1995), Rudd Hansen et al. (1995). Pearce (1992) and Sklar and (1995), Porvari et al. (1995), Iskander (1994), McCully (1994) provide useful details. Morse and Rodgers et al. (1995) and Olem (1993). Berger (1992) are the most thorough on the impacts of a single project (India's Narmada). The most 8. Power In Asia of Jan. 13, 1997, and Feb. 10, recent is Biswas (1997). Most recent project-specific 1997, outlines the controversy: Bakun has been called hydro EAs run to many volumes, commonly occupy- "a timebomb, unlawful, unsustainable, economically ing several meters of shelving, are not commonly questionable." The king of Sweden's environmental "published" in the conventional sense, and are not at advisor was fired from his Royal Swedish Academy of all easily available, not even in IUCN or the World Sciences post just before Christmas 1996, just after Bank. he publicly criticized Bakun; later he called Bakun 98 Environmental Sustainability in the llydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future 12. Reservoir fishery optimization has a long way Daly, H.E., and R. Goodland, "An ecological-economic to go. A good introduction can be found in: Kapetsky assessment of international commerce under GATE," and Petr (1984), Costa-Pierce and Soemarwoto Population and Environment (1994) 15(5): 395-427 (1990), De Silva (1988), Lu (1992), Moreau (1991), and 15(6): 477-503. Petrere (1996), Sugunan (1995), Crul and Roest (1995) and Knapp (1994). De Silva, S.S., "Reservoir fishery management and development in Asia," IDRC series (1988) 264e. 13. Oud (1993), Gagnon (1993, 1996 and 1997); Rosa and Schaeffer (1994), Rudd et al. (1993), De Silva, S.S., "Asian reservoir fisheries," Hangzhou Svensson and Ericson (1993). workshop, IDRC (1992) _____ _____ _____ _____ _____ _____ _____ ____ Fankhauser, S., Evaluatin-g the social costs of vreen- in91,iIJ ~ ~1'I 2 ~II ~i 1:1 ~ ;I I~I ~I'I ;~ p~ ~w house gas emissions (London: Univ. Coll. CSERGE, 1994). Acreman, M.C., "The IUCN Sahelian floodplain initia- Fearnside, P., "Hydroelectric dams in the Brazilian tive. Water Resources Development" (1996a) 12(4): Amazon as sources of 'Greenhouse' gases," 429-436. Environmental Conservation (1995) 22(1): 7-19. Acreman, M.C., "Environmental effects of hydro-elec- Fearnside, P., "Environmental services as a strategy tric power generation in Africa and the potential for for sustainable development in rural Amazonia," artificial floods," J.CIWEM (1996b) 10: 429-435. Ecological Economics (1997) 20: 53-70. Allen-Gil, S.M., DJ. Gilroy and L.R. Curtis, "An ecore- Gagnon, L., "Emissions from hydroelectric reservoirs gion approach to mercury bioaccumulation by fish in and comparisons of hydroelectricity, natural gas and reservoirs," Archives of Environmental oil," Ambio (1993) 22:568-569. Contamination and Toxicology (1995) 28(1): 61-68. Gagnon, L, and J.E van de Vate, "Greenhouse gas Biswas, A. K, (ed.), Water Resources: Environmental emissions from hydropower," Energy Policy (1997) Planning. Management and Develoment (New York: 25(1): 7-13. McGraw-Hill, 1997). Goldsmith, E., and N. Hildyard, The social and envi- Bonzongo, J.C., K.J. Heim, J.J. Warwick and W.B. ronmental effects of larze dams, three volumes Lyons. 1996, "Mercury Levels in Surface Waters. (Wadebridge, U.K.: Ecological Centre, 1984-91) Nevada," Environmental Pollution (1996) 92(2): 193- Goodland, R., Environmental reconnaissance of El 201. Salvador's Cerron Grande hydro proiect (Washington Cernea, M.M., "Hydropower Dams and Social D.C.: The World Bank, 1974) Impacts: A Sociological Perspective," World Bank Goodland, R., Environmental reconnaissance of the Environment Department Social Assessment Series Tucurui hvdro project. Amazon. Brazil (Brasilia: DE, (1997). Eletronorte, 1978) Costa-Pierce, B.A., and 0. Soemarwoto, Reservoir Goodland, R. "Environmental optimization in fisheries and aguaculture development for resettle- Goodeland eR. "Envronmnal foptimzaions inR ment in ndonesi (Manil: ICLAR, 1990)hydrodevelopment of tropical forest regions," in R. ment in Indonesia (Manila: ICLARM, 1990) Panday, ed., Man-made lakes and human health. Crul, R., and F Roest, "Current status of fisheries and (Paramaribo: University of Suriname Faculty of fish stocks of the four largest African reservoirs: Medicine, 1979) Kainji, Kariba, Nasser/Nubia & Volta," FAO Tech. Goodland, R., "Hydro and the environment: evaluat- Paper 30 (1995) ing the tradeoffs," Water Power & Dam Construction Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 99 LARGE DAMS: Learning from the Past, Looking at the Future (Nov. 1986) 25-34. Goodland, R., and S. Negishi, "Greening hydro: the environmental sustainability challenge for the hydro Goodland, R., "The environmental sustainability chal- industry," in A. Wagstaff, ed., International Water lenge for the hydro industry," Hydropower and Dams Power and Dam Construction, Proceedings of the (1995) 1:37-42. Annual Conference (Nov. 25-26, 1996). Goodland, R., AA. Juras and R. Pachauri, "Can hydro Green, S., "Bakun: The six billion dollar question," reservoirs in tropical moist forest be made environ- Power Economist (November 1996) :32-35. mentally sustainable?" Energy Policy (June 1992) 507- 516. Helland-Hansen, E., T Holtedahl, and K.A. Lye, "Environmental effects of hydropower development. Goodland, R., "Environmentally sustainable energy Norwegian Institute of Technology" (1995). systems: the case of tropical hydropower," International Journal of Sustainable Development Horowitz, M.M., 'The management of an African (1993) 1(4):3-14. river basin: alternative scenarios for environmentally sustainable economic development and poverty allevi- Goodland, R., "Ethical priorities in environmentally ation," Proc. Int. Conf. Water Resources Planning in a sustainable energy systems: the case of tropical Changing World, Institute for Dev. Anthropology hydropower," World Bank Environment Working (1994) IV73-IV82. Paper 67 (1994). Horowitz, M.M., "Victims upstream and down," Goodland, R., 'The concept of environmental sustain- Journal of Refugee Studies (1991) 4(2):164-181. ability," Ann. Rev. Ecology (1995) 26:1-24. Hunter, J., L. Rey, K. Chu, E. Adekolu-John and K. Goodland, R., "Environmental sustainability in the Mott, Parasitic diseases in water resources develop- agriculture sector," Ecologicail Economics (1997, in ment: the need for intersectoral negotiation. (Geneva: press). World Health Organization, 1993). Goodland, R., "The big dams debate: the environmen- Iskander, FY., H.R. Vega-Carrillo and E.M. Acuna, tal sustainability challenge for dam engineers," "Determination of mercury and other elements in La Journal of the Society of Civil Engineers (1997) 12(2). Zacatecana dam sediment in Mexico," Science of the Goodland, R. and H.E. Daly, "Environmental sustain- Total Environment (1994) 148 (1):45-48. ability: universal and non-negotiable," Ecological Jayaseela, F, "Bakun hydro electricity project: proof Applications (1996a) 6(4):1002-1017. that 'business is as usual' globally?" Forests, Trees < ~~~~~~~Journal of Refugee Studies (1993) 6(5):123-152. Goodland, R., and H.E. Daly, "'If tropical log export bans are so perverse, why are there so many?" Scudder, T., "Recent experiences with river basin Ecological Economics (1996b) 18:189-196. development in the tropics and subtropics," Natural 4 ~~~~~~Resources Forum (1994) 18(2): 101-113. Goodland, R., and S. El Serafy, "The urgent need to internalize C02 emission costs" (1997 draft). Scudder, T, "The social impacts of big cdams," Gland, Goodland, R., and G. Tillman, "Strategic environmen- Switzerland, IUCN Large Dams Workshop (1997). tal assessment," Shell International, Environment Sklar, L. and P McCully, 'The rivers: Th-e World Paper (1995). Bank's lending for large dams," International Rivers Network Working Paper 5 (1994). Goodland, R., and M. Webb, "The management of cultural property in World Bank-assisted projects: Sugunan, V.V., "Reservoir fisheries of India," FAO archaeological, historical, religious and natural Fisheries Technical Paper 345. unique sites," World Bank tec:hnical paper (1989) 62. 100 Environmental Sustainability in tile Hydro Industry: Disaggregating the Debates LARGE DAMS: Learning from the Past, Looking at the Future Svensson, B.S., and S.O. Ericson, "Does hydroelectric power increase global warming?" Ambio (1993) 22:569-570. Tremblay, A., M. Lucotte, and I. Rheault, "Methylmercury in a benthic foodweb of two hydro- electric reservoirs and a natural lake in Northern Quebec," Water, Air and Soil Pollution (1996) 91(3- 4) :255-269. van der Knapp, M., "Status of fish stocks and fish- eries for thirteen medium-sized African reservoirs," FAO technical paper (1994) 26:107 World Bank, 'The World Bank's experience with large dams: a preliminary review of impacts," Operations Evaluation Department (SecM96-944) (1996). World Bank, "Second review of environmental assess- ment" (1996). World Bank, "Resettlement and development: a Bankwide review of projects involving involuntary resettlement," Environment Department (1994). World Bank, "The World Bank and participation," Operations Policy Department (1994). World Bank, "Participation Sourcebook" (1996). World Bank, Environmental Assessment Sourcebook, Technical Paper, three volumes (1991). Environmental Sustainability in the Hydro Industry: Disaggregating the Debates 101 LARGE DAMS: Learning from the Plast, Looking at the Future Environmental Ranking ol New Energr Sources LEAST IMPACT 1. EFFICIENCY AND CONSERVATION 2. SOLAR AND HYDROGEN RE 3. PHOTO VOLTA ICS RENEWABLE & 4. WIND SUSTAINABLE 5. TIDAL AND WAVES 6. BIOMASS 7. HYDRO RENEWABLE & 8. GEOTHERMAL POTENTIALLY SUSTAINABLE 9. GAS 10. OIL ' NON-RENEWABLE & 11. COAL UNSUSTAINABLE 12. NUCLEAR MOST IMPACT The main means to improve the environmental and social aspects of all energy is to gradually phase up this ranking, and to phase out those forms lowest on the ranking. 1. Energy efficiency and enertgy conservation: Since these are becoming recoginized as alternatives to increasing energy sup- ply options, they top this list. They free up existing energy supplies used elsewhere, thus postponing the need for new capacity. 2. Solar power: Japan's Agency of Industrial Science and Technology, in collaboration with the International Atomic Energy Agency, is developing a solar hydrogen power system by electroysis of water with sunlight expected to be commercial before 2030. This system is 20 to 30 percent more efficient that today's best gas turbines, but without the C02 pollutant and the depletion problem. Photovoltaics and batteries break down after a few years. In this relatively trivial sense, they are unsustainable. 3. Hydropower: This is or could be renewable due to the fact that it burns no fuel and is power by solar energy via the hydrolic cycle. 4. Geothermal: The environmental and social impacts are, in general, easily managed. It makes sense to exploit this resource. 5. All fossil fuels: These are unsustainable due to the fact that combustion releases C02 into the atmosphere. Many nations have signed the Framework Convention on Climate Change because they feel the risks of global climate change should be mini- mized. Unlike sulfur oxides, nitrous oxides and particulates, C02 is not controlled. The risks of climate change can be reduced only be phasing out coal well before supplies run out. It is estimated that there are about 300 years worth of coal supplies remain- ing. Gas and to a lesser extent oil are not as risky as coal because their supplies are more limited, only about 50 years, and emit much less C02 than coal. Through the process of industrialization, energy users typically switch from a reliance on wood to coal to oil to gas. Accelerating this historic trend in which the ratio of carbon to hydrogen falls would greatly help to meet GHG emission reduction targets. If coal technology improves such that C02 emissions can be mitigated or adequately sequestered, the prospects for coal would improve. 6. Nuclear: The nuclear industry has spent about 75 percent of the total R&D budget over the last four decades, but now only generates 3 percent of global commercial energy. Rather than earning a profit after all these subsidies, the abandonment of nuclear plants has caused $10 billion in losses to shareholders in the United States alone. In order to replace coal, as many as 10,000 to 20,000 new nuclear plants would be needed, which would require a new plant opening every three or four days for decades, but in light of the losses incurred in the United States this is highly inadvisable. Nuclear power's main proponent, the IAEA, forecasts only about 770 plants for this period. Should the victims of the 1986 Chernobyl accident exceed 4 million, as seems likely, this will postpone any recrudescence of nuclear projects. In 1996-97, advanced nuclear plant were canceled in Indonesia; and postponed until 2011 in Thailand. The Japanese nuclear program, whose nuclear program is considered one of the world's most advanced, had been crippled since the 'very serious" accident on February 9, 1991, in Mihama. In 1992, Japan's Ministry of International Trade and Industry reported 20 major problems and incidents in 1992 alone. Further setbacks include the molten sodium leaks at the Monj1u fast-breeder reactor in December 1995, and the radioactive fire and explosion in March 1997 at the Tokaimura waste processing plant. The government of Japan is pressing criminal charges, as of April 15, against Donen, the state-owned Nuclear Energy Corporation, with regard to the Tokaimura explosion. Four out of six nuclear facilities olperated by Donen have now been shut down following accidents, and it admitted on April 17 to 11 more unreported radioactive leaks over the last three years. If radioactive waste storage is solved, and if inherently" safe nuclear reactor designs are achieved, uranium min- ing impacts are reduced, nucleai' weapons proliferation halts and radioactive shipment becomes safe, then prospects for nuclear power would improve. 102 Environmental Sustainability in the Hydro Industry: Disaggregating the Debates MEETING HYDRO'S FINANCING AND DEVELOPMENT CHALLENGES PHOTO COURTESY OF THE WORLD BANK Surveyor on the construction site of the Tarbela Dam, Pakistan. By ANTHoNy A. CHURCHILL, Washington International Energy Group Paper Contents Performance Problems ................. 107 Introduction .................... 104 Meeting the Challenge . 108 The Power Market Grows .................... 104 Changing Technology . 109 A Less Friendly Environment .................. 105 Making the Future Work . 110 Improving Accountability .................... 106 Endnotes . 110 This article first appeared in the Fall 1994 edition of HRW. Reprinted with permission from HCI Publications, Kansas City, Mo., 64111. Anthony Churchill is a senior advisor with Washington International Energy Group, an inter- nationalfinancial and project development consultingfirm based in the United States. Meeting Hydro's Financing and Development Challenges 103 LARGE DAMS: Learning from the Past, Looking at the Future bility for project results and the government agrees ANTHONY A. CHURCHILL to treat electric power as commercial business sub- Anthony A. Churchill is a senior advisor with Washington ject to the discipline of the market. International Energy Group, an international financial and project development consulting firm based in the United States. Until 1. INTRODUCTION July 1984, he was principal advisor for finance and private sector development with the World Bank. Hydropower stands at an international crossroads. Anthony Churchill On the one hand, project owners face increasing eco- nomic, environmental and developmental challenges. Three Lafayette Centre There are the vocal and visible attacks by environ- Tuhre L e n mental interest groups on hydro projects, particularly 1155 21st Street, NW those with large dams. There is competition from Washington D.C. 20036 alternative energy sources, such as natural gas, Washington, D.C. 20036 whose shorter project lead times and lower capital Fax: (202) 331-9864 costs give them a near-term advantage. And there is E-mail: AChurch440@aol.com the drying up of inexpensive public financing for energy projects. These factors have led some critics Note: This paper was included in the background documentation to question the future of hydropower. for the joint IUCN-The World Conservation Union/World Bank workshop. Any personal opinions should in no way be con- On the other hand, several factors warrant opti- strued as representing the official position of the World Bank mism about hydro and its future, especially in the Group or IUCN. developing countries. Two-thirds of the large dams built in the 1980s were in developing nations. The demand for electric power continues to grow rapidly ABSTRACT in those countries, and many good sites still are avail- able. Because hydro is a domestic resource, govern- This article argues that hydropower is at an inter- ments and utilities in developing couniries often pre- national crossroads. The environmental and social fer hydro generation over electricity produced from problems associated with dams, particularly poorly fossil fuels, which must be imported or, if the nation conceived and executed resettlement programs, have has its own supplies, are valuable sources of export tarnished the reputation of thie hydro industry. revenues. In addition, the relatively low maintenance Performance problems, such as cost overruns and costs and simplicity of operation associated with project delays, have also plagued the industry. As hydro projects are strong pluses in countries where countries increasingly look to the private sector to the more complex maintenance and operating logis- finance hydro projects, these problems threaten to tics of thermal plants pose serious problems. discourage future investments in hydropower. In order for the hydro industry to succeed in the future, The question is not whether hydro has a future but the resettlement issue must be resolved, how the industry passes through the crossroads it Governments must ensure thiat adequate funds are now faces, resolves the environmental and economic available for compensation and other costs of resettle- problems of its past, and meets the challenges that lie ment. The hydro industry must also improve the sys- ahead. tem of accountability in projects. Those deciding what projects are built, when, by whom and how 2. THE POWER MARKET GROWS must be held accountable for the final results. Moreover, to meet the challenge of increased compe- The World Energy Council WC) estimates sug- tition from other sources Of Electricity, hydropower gest energy consumption worldwide will approxi- must develop new technologies to improve efficiency. mately double between 1990 and 20201. The WEC Ultimately, what is needed, Churchill asserts, is a mately alle tween to and in The new model of public-private partnership, whereby the expects almost all of this increase to occur in the private sector agrees to undertake greater responsi- developing world-and the estimate probably is on 104 Meeting Hydro's Financing and IDevelopment Challenges LARGE DAMS: Learning from the Past, Looking at the Future the conservative side. 1980s. By 2020, on the basis of these estimates, the installed hydro capacity would increase from about 10 How much of the new demand will hydropower percent of the technically usable potential to some 30 supply? The WEC suggests that hydro energy pro- percent. duction will increase from the present level of about 2,000 terawatt-hours per year to nearly 5,000 terawatt- Although this appears to be a feasible growth pat- hours by 2020. These estimates do not include small tern for hydropower, some caution needs to be exer- hydro development, which the WEC lumps with cised in interpretation. First, the forecasts assume continuing advances in long- distance transmission and bet- ter utilization of low-head 20 hydro potential as develop- ment sites move farther from Developing countries power markets and toward more challenging locations. 15 Former Soviet Bloc Second, about half of the hydro development in the next St - Developed countries 0 - . - 0 . . 0 t; 25 years is likely to take place in the "Big Three" countries of 4 20 China, India and Brazil, where o -= = 0 X f market size is not likely to be a constraint. However, much of the remaining potential, par- 5 ticularly in Africa, is in coun- tries where markets are small. Unless those countries over- come their reluctance to rely 0 1900 on internationally traded 1900 1930 1960 1990 A B Bi C power, a significant portion of C ==- cst =- for 2D . - -- this potential may remain unexploited. Figure 1: The World Energy Council expects developing countries to account for most of the forecast growth in world energy demand between 1990 and the year 2020. This graph shows energy demand in gigatons of oil equivalent (Gtos) through 1990 and WEC 3. A LESS FRIENDLY forecasts of demand in 2020, based on four scenarios. Case B is an updated version of ENVIRONMENT the "moderate" growth projections presented at the WEC Congress in 1989. Case B1 is a variation of that case that assumes weaker expansion in central and eastern Europe and In less than a decade, the former Soviet Union. Case A is a high-growth forecast, while Case C is the WEC's hydropower and the dams "ecologically driven" forecast. a associated with many develop- ments have gone from being other renewables. Even the very constrained and viewed as the most environmentally benign source of probably unrealistic supply scenarios of environmen- power to among the most aggressively criticized. talists show a doubling of energy from hydropower to Even projects with relatively minor environmental 4,000 terawatt-hours per year over the same period 2. effects-for example, the Pangue project on the Bio- Figure 1 illustrates the WEC's estimates of energy Bio River in Chile-have drawn widespread public demand growth in the future. criticism for the harm they allegedly would do to rela- At present load factors, both these estimates sug- tively small local populations and the recreational gest an increase in installed hydro capacity world- opportunities of an even smaller number of rafting wide from nearly 680 terawatts (tw) in 1986 to more enthusiasts. than 2,200 tw in 2020. That growth rate-about 4 per- cent per year-is about half the rate of the 1970s and Are the new critics of hydropower projects right? Meeting Hydro's Financing and Development Challenges 105 LARGE DAMS: Learning from the Flast, Looking at the Future In some cases, yes. The developing world's record delayed completion by three years. That delay, for dealing with the environmental and social issues which in turn forced postponement of filling of the associated with dams-particularly the resettlement reservoir, effectively cost project owner Empresas of populations-is not very good. Poorly conceived Publicas de Medellin the equivalent of an entire year and executed resettlement programs have tarnished of energy generation 3. the reputations of many governments and their elec- tric utilities. Until the last several years, project devel- opers, contractors and financiers tended to leave 4. IMPROVING ACCOUNTAEBILITY these issues to host governments, many of whom were not equipped to manage the problems. Hydropower's record in dealing with environmen- tal and social issues-both the reality of the indus- What about the future? Can proper attention to try's performance and the public perception of it-is environmental and resettlement issues erase the neg- damaged by unclear lines of accountability in plan- ative image? The answer has to be 'maybe.' ning and implementation of projects. Many of the effects of hydropower and water In most developing countries, hydrc projects have resource projects are inherent in the underdeveloped been commissioned by large public monopolies. conditions that surround many sites. Some can be These monopolies are neither particularly effective in traced to poorly defined property rights and human recognizing the need for change nor particularly sen- rights in those regions, and to a lack of institutional sitive to it. They are subject neither to commercial mechanisms with which to adjudicate those rights. rules nor public scrutiny. They often have beneficia- Other issues result from a shortage of administrative ries, not customers. In the construction of dams, they resources in the underdeveloped parts of the world. seldom have given adequate attention to social and These are relatively long-term problems that cannot environmental problems, preferring instead to focus be resolved within the context of a single project. on engineering issues with which they are comfort- able. In some cases, it may be possible to overcome the constraints of the overall institutional environment, Financial and other pressures are forcing govern- although at additional cost. For example, planning for ments to undertake major reforms of the sector. the 1,800-megawatt (MW) Xiaolangdi project in China Private investment, more open regulatory systems, included extensive work on issues related to resettle- increasing competition to market electricity genera- ment of more than 180,000 people. The World Bank tion, system management, transmission services, and in May 1994 approved some $570 million for project the rescinding of monopoly power all are part of the costs, nearly one-fifth of the money for land purchas- process. The structure being created by privatization es and other support for the relocated people. In the of energy resources and public concern will be more case of other projects, the added costs of dealing with accountable. these issues sometimes ignored in the past may lower project returns below an acceptable level. A badly handled resettlement program that results in project delays will adversely affect the profits of Under both domestic and international pressures, the developers. The increase in risks born by the most governments have accepted the need to exam- developer and the financiers may well discourage ine environmental effects and to plan for their mitiga- investments. tion. However, many countries lack the administrative and institutional capacity to implement that commit- A World Bank analysis of more than 80 hydro pro- ment. Failure to recognize that limitation and take it jects completed between 1970 and 1990 shows that into account in energy planning and hydro project resettlement costs contributed significaLntly to project development has resulted in high post-project costs. budgets and-most damaging-to cost overruns. As an example, the failure of both the project owner Resettlement expenses averaged 11 percent of all and the World Bank to anticipate the complexity of costs on the projects studied and ranged as high as resettlement issues more thani doubled costs at the 22 percent. On average, final resettlement costs were 560-MW Guatape II hydro prcject in Colombia and 54 percent above project estimates4. The effect of 106 Meeting Hydro's Financing and Development Challenges LARGE DAMS: Learning from the Past, Looking at the Future resettlement costs on project economics probably lagged behind ideal. was even greater, if the cost of lost electricity sales that resulted from related project delays were fac- Changing perceptions cannot be blamed for other tored in. issues that are affecting hydro development world- wide. Hydropower project costs have tended to Governments will have to be prepared to better exceed estimates by substantial magnitudes. The articulate their choices and trade-offs with regard to World Bank review of 80 hydro projects completed in environmental and social issues. In the present cli- the 1970s and 1980s indicated that three-fourths had mate of suspicion, project developers and their final costs in excess of budget. Final costs on half the financiers find themselves under attack by both projects were at least 25 percent higher than esti- domestic and international environmental groups. mates; costs exceeded estimates by 50 percent or These developers will back off unless governments more on 30 percent of the projects studied. Costs produce the public support required to overcome the were less than estimated on 25 percent of the pro- initial hostility. jects, the study indicated. Figure 2 illustrates the find- ings of the study. S. PERFORMANCE PROBLEMS Viewed individually, the cases where costs exceed- Changes in the public's perception of the environ- ed estimates include a number where project partici- mental and social consequences of hydropower pro- pants can make the case that unanticipated problems jects rightly can be attributed to growing concern and increased costs after work initially had begun: cases expectations for those issues. The heightened level of where unexpected geologic conditions, funding concern caught governments, private developers, delays and resettlement problems slowed the project even the public itself unprepared, and it is not sur- and created additional expense. Together, however, prising that the hydro industry's performance has the individual projects create a clear pattern of cost overruns that has damaged the image of hydro projects in the minds of members of the public and the financing com- >2.00 munity. Simply put, if three- fourths of hydro projects expe- 1.76-2.00 rience geological problems 1.762.00 _that cause delays and increase costs, geologic problems are ,v, 1.51-1.75 the expected norm-not the .126-l5_ unanticipated exception. 1. 26-1.50 The bank analysis suggests . 1.01-1.25 many factors contributing to _ I I cost increases and delays in 0.76-1.00 hydro projects have to do with capabilities of the project own- 0.75 ership and management team or problems in implementing 0 5 1 0 1 5 20 2 5 3(01% project plans. In general, well- managed utilities or other pro- Percentage of Projects ject owners do a better job of planning projects, estimating Figure 2: A World Bank study of 80 hydro projects completed in the 1970s and 1 980s costs and implementing plans. indicated that final costs exceeded budget in 76 projects. As indicated in this graph, final Similarly, projects that use costs on half of the projects were at least 25 percent higher than estimates. Costs experienced consultants, par- exceeded estimates by 50 percent or more on 30 percent of the projects studied. Costs were less than estimated on one-fourth of the projects. ticularly those with a back- Meeting Hydro's Financing and Development Challenges 107 LARGE DAMS: Learning from the Flast, Looking at the Future ground in hydro projects, are less likely to exceed resettlement and financial issues in the early stages cost estimates or experience delays. of specific projects will help, but ultimately the solu- tions will add to costs. Whatever the cause, the upshot is that hydropower project estimates too often are being RESOLVING THE 'PEOPLE' ISSUE treated as unreliable and burdened by unacceptable Some empowerment of the local community is high-side risks. With countries and utilities increas- probably essential to provide checks and balances on ingly turning to the private sector to fund and build the weaknesses of public administration in carrying such projects, that perceived high financial risk will out resettlement and addressing other social and pub- discourage investment. lic concerns of hydropower development. Investors can be further discouraged when pre- The role of the power utility and government sented with uncertain costs and less-than-reliable rev- agency should be to ensure that adequate funds are enue forecasts. If a project ta.kes eight years to com- available for compensation and other costs of resettle- plete, the investor faces a situation in which he will ment, not to decide how each dollar is spent in the have to lock in large amounts of capital on the basis process. Why not insist that compensation be given of what cost and income are estimated to be nearly a directly to the individuals or communities affected by decade down the road. the project? In many developing countries, where individual property rights are weak, community- By their nature, the demand forecasts that are the baseduslutionsrar necessary. basis of revenue estimates contain large elements of uncertainty. However, a World Bank study suggests If the community and its residents are dislocated that more than three-fourths of the electricity by a power project, estimate the compensation due demand forecasts analyzed fohr the 1960-85 period and put the control of the funds in the hands of the were overly optimistic and that the degree of error community's leadership. Let the community decide increased with time 5. Though perhaps expected, what public or private goods it wishes t.o purchase those facts have been especially deadly for hydroelec- and for whom. For example, in Turkey the resettle- tric projects in which gestation periods typically are ment programs permit each affected individual to extended. select from a menu of public services and direct com- Hydroelectric project development and finance pensation offerings. also have been hindered by the historic project devel- The government, financiers and project developers opment structure in much of the underdeveloped may wish to exercise some control, depending on the world. Most such projects have been built as public competency of local leadership. But the objective works ventures. The owner (most often a govern- even in establishing those controls should be to move ment monopoly or agency) initiates the project, but away from the usual paternalistic apprcach and put its representatives typically do little of the planning, the process on a more businesslike basis. design or project supervision. Accountability can be fragmented, and the system frequently includes few Where possible, the wise hydropower developer private sector incentives for optimizing costs. should insist on local involvement in a specific pro- ject. More generally, the hydro industry should be encouraging the policy internationally and within the 6. MEETING THE CHALLENGE: countries where it is most influential. WHAT CAN BE DONE? Governments also have a responsibil[ity to con- Financial agencies, environmental groups and the vince the public that proposed projects are efficient industry itself are pushing for improved policies in solutions to real needs. This may be slciw and diffi- many of these areas, but their implementation has cult, but recent experience with a few hydropower been handicapped by the weakness of existing institu- projects demonstrates that it is now an essential tional structures. Careful planning and attention to ingredient of any successful venture. The success of the details of environmental niitigation, population the Chilean national government, Empresa Nacional 108 Meeting Hydro's Financing and Development Challenges LARGE DAMS: Learning from the Past, Looking at the Future de Energia S.A. (Endesa), and various interest groups mercial business subject to the discipline of markets. in reaching agreement on resettlement issues was As long as there is a soft budget-where risks and critical to private financing of the 450-MW Pangue costs are born by the public sector-the incentives project. (A ten-bank syndicate of European banks for efficiency will be muted. In fact, unless there are announced in May 1994 that it would loan $50 million shareholders who stand to lose from poor perfor- to Pangue S.A., an Endesa subsidiary, for the pro- mance, improvements are unlikely. In recent indepen- ject.) A private developer who gets involved in a pro- dent hydropower projects in Colombia, India, and ject in a country where the government is either Guatemala, a major portion of the project developers' unwilling or unable to initiate such a dialogue is run- return on equity comes from delivering the project on ning unnecessary risks. time and within budget, and operating the project in excess of the agreed-on availability. IMPROVING THE REPUTATION OF HYDRO It is essential that the hydro industry come to grips with its record of cost estimation and project 7. CHANGING TECHNOLOGY implementation. This record has caused the financial community to regard hydro projects as more risky Hydropower also is facing the challenge from with- than they are. This means that project owners and out. In only a few years, the natural gas-fueled com- developers must rely on public funds or private bustion turbine has become a dominant technology financing packages with substantial public guaran- for producing electric power. Its physical and eco- tees. In today's marketplace, that can be a serious nomic characteristics are almost the opposite of those constraint. of hydroelectric power: Project capital costs are rela- tively low and predictable with a high degree of accu- In many countries, electric power is being regard- racy; construction times are short; and fuel/operating ed as just another commodity to be produced and costs are high. Where gas is readily available at what financed by the private sector under normal commer- is at least for the foreseeable future a low cost, it has cial terms. Given the many demands on their limited become difficult for hydropower to compete. public funds, governments increasingly are reluctant to subsidize the capital requirements of hydropower. Of course, gas is not available everywhere, and in The availability of competing technologies at lower many cases hydropower is competing against tradi- front-end costs, which the private sector is prepared tional coal- and oil-fired plants. Hydropower has defi- to finance, adds to this reluctance. nite advantages in comparison with those sources, both from an environmental standpoint and because Performance issues must be approached from two it is an indigenous resource. In many of the larger angles: better planning and more effective implemen- countries-China and India in particular-strong tation. In both cases, the root causes of problems demand likely will warrant exploitation of all potential associated with project cost and revenues lie with the energy resources. present organizational and institutional structure of the power sector in general and hydropower in partic- New technology also can play a role in broadening ular. As long as these projects are treated as public the potential of hydropower to meet future energy works projects, high costs and poor performance will demand. For example, continuing developments in be a consistent danger. the efficiency and utility of turbines for low-head and small hydro sites will permit more effective use of Changing this will require a different way of doing more sites in a less environmentally intrusive man- business. Accountability will have to be pinned down. ner. Recent successes in development of adjustable- Those deciding what project is to be built, when, by speed generation and research into other new tech- whom, and how must be held accountable for the nology for large turbines will make it possible to final results. Project designers, for example, will rehabilitate, expand and develop other new sites. ensure that adequate allowances are made for geolog- New technologies that permit the efficient movement ical uncertainties if they are to be held financially of larger volumes of power over greater distances accountable for the failure to do so. Essentially, there would allow developers to take advantage of remote is no alternative but to treat electric power as a com- sites where much of the future potential lies. Meeting Hydro's Financing and Development Challenges 109 LARGE DAMS: Learning from the P'ast, Looking at the Future 5. MAKING THE FUTURE WORK j Hydropower is, indeed, at a crossroads. Changes 1. World Energy Council, Energv for Tomorrow's are taking place in the electric power business that will affect the growth of hydropower. The financial World (New York: St. Martis Press, 1993). constraints of the public sector and the poor perfor- 2. Goldemberg, J., T. Johansson, A. Reddy and R. mance of most national electric power monopolies Williams, EnerQv for a Sustainable World. Wiley. are forcing countries to consider alternative institu- Eastern Ltd. 1988. tional arrangements for the sector. A major feature of 3. World Bank, "1981 PPAR Colombia: Guatape II this changed institutional environment is the intro- Hydroelectric Project." Report No. 3718. Washington duction of competition and the private ownership and D.C. 1981. financing of power plants. 4. Merrow, E.W., and R.E Shangraw Jr., There are those who maintain that hydropower "Understanding the Costs and Schedules of World projects will only be built in the future with explicit Bank Supported Hydroelectric Projects," World Bank public support. Some even go as far as to say private Industry and Energy Department WVorking Paper, power will not build hydropower projects. Energy Series No. 31 (1990). 5. Sanghvi, A., R. Verstrom and J. Besant-Jones. Uight.Signdercanth presaten ofdoingcial beousess, ty ae "Review and Evaluation of Historic Electricity right. Significant private financial resources will be Forecasting Experience (1960-1985)," 'World Bank reserved for power projects that are reliably planned Fndustrnd Energy Department Workn Papr and minimize environmental and other risks. On the Industry and Energy Department Work1g Paper, other hand, continuing public support as it is present- energy Series No. 18 (1989). ly done, particularly in developing counties, will pro- vide further ammunition to thie critics, and weaken the longer-term competitiveness of hydropower. What is needed is a new model of public/private partnership. The private sector would agree to under- take greater responsibility for project results in exchange for greater control over selection, design, construction and operations. The government, in exchange for a lower level of public financing, would agree to restructure the electric power sector so that it is a competitive business subject to normal com- mercial rules. In the transition period, public funds or guarantees will have to be an important part of the total financing. There should be, however, a clear understanding that it is a temporary measure and once the project (or industry) has demonstrated its capacity to perform, public funding would be reduced. 110 Meeting Hydro's Financing and Development Challenges HYDROPOWER: A NEw BUSINESS OR AN OBSOLETE INDUSTRY? PHOTO COURTESY OF THE WORLD BANK The Aksombo Dam on the Volga River, Ghana. By ANTHONY A. CHURCHILL, Washington International Energy Group Paper Contents Introduction ............. 112 Profile of the Successful Developer .......... 116 The Structural Issue ............. 113 The Firm ........................ 116 Managing Risk ............. 114 Some Tactics and Strategies ...................... 117 Adapt or Die: Can the Conclusions . 117 Industry Respond? ........... 116 Endnotes ..... 118 This paper was first presented at the 27th International Symposium on Hydraulic Engineering in Aachen, Germany, January 3-4, 1997 Anthony Churchill is a senior advisor with Washington International Energy Group, an inter- nationalfinancial and project development consulting firm based in the United States. Hydropower: A New Business or an Obsolete Industry? 1 1 1 LARGE DAMS: Learning from the Plast, Looking at the Future XNIJN A.CURHL compete in the international power market. ANTHoNyA. CHURCHILL:: Anthony Churchill is a senior advisor with the Washington Energy 1. INTRODUCTION Group, an international financial anid project development con- sulting firm based in the United States. Until July 1994, he was The World Energy Council's Energy for principal advisor for finance and private sector development at Tomorrow's World suggests annual global production the World Bank. of energy from hydropower will grow from the pre- sent 2,000 terawatt-hours per year to 5,000 terawatt- Anthony Churchill hours by 2020 1. This implies a growth rate of about 4 Washington International Energy Group percent, or half that of the 1970s and 1980s. On the Three Lafayefte Centre basis of this scenario, only 30 percent of technically Suite 202 feasible potential, up from 10 percent today, will be in 1155 21st Street, NW production. Washington, D.C. 20036 Fax. (202) 331-9864 There are several problems with these scenarios. E-mail. AChurch440@aol.com First, based on more recent data, the irnplied growth rate in energy demand in these and other similar sce- Note: This paper was included in the background documentation narios is seriously underestimated. More recent for the joint iUCN-The World Conservation Union/World Bank information, and a more optimistic outlook for growth workshop. Any personal opinions should in Uno way be:con- in the developing world, suggest that the increase in strued as representing the official position of the World Bank global demand could be double the present consen- Group orleUCN t i t o p W B sus outlooks. Second, the share of hydropower in Group or IUCN. this growing demand is not likely to increase. If we take the output of the industry of the last few years and project it into the future, a possible decline in ABSTRACT hydro's proportion of new capacity is possible. For those in the hydro industry and those concerned This article reviews the hydropower industry's with the possible adverse effects of increased fossil present poor performance and outlines actions that fuel consumption on global climate, this is bad news. are needed. The criticisms leveled at the hydro industry are analogous to those leveled at the U.S. What has brought about this sorry state of affairs, defense industry: poorly defined products, lack of dis- and what can be done about it? Let us start with a cipline and political, rather than economic, decision- review of the industry's performance and then move making. The weaknesses of tlle hydro industry are on to the major factors accounting for the record. institutional in nature and are associated with public 1. Hydro projects have become a source of envi- procurement. The industry is currently composed of ronmental concerns. Almost every major project diverse and specialized firms that compete for con- today faces a suspicious environmental community. tracts in which all of the risk is undertaken by gov- In view of this opposition, potential soumrces of enmient. As such, it is not well-suited to a environ- finance both public and private have backed away ment in which private capital is playing an increasing- from financing these projects. The poor past perfor- ly central role. To survive, the industry must adapt mance of the industry in handling enviraonmental by creating developers-that is, firms with sufficient issue particulary where ettle ment al capital,., tehia skll an.areig ,bliyt issues, particularly where resettlement is involved, capital, technical skils and marKeting ability to will continue to adversely affect public perceptions. finance and manage the risks inherent in hydropower projects. These firms will have to develop a diverse 2. The industry's record of overruns is an embar- portfolio of projects in order to spread risks, and rassment. Although not all projects have suffered negotiate a better way to share risks with govern- from poor performance in this regard, enough have ments. The role of the developer is to develop plants, done so, and this in turn has resulted in a perception not run them forever. Only through a restructuring in the financial community that these are high-risk of the industry will firms emerge with the ability to 112 Hydropower: A New Business or an Obsolete Industry? LARGE DAMS: Learning from the Past, Looking at the Future projects. Endless litigation between contractors, engi- time. Unfortunately, in the case of electric power, the neers, and owners has added to this perception 2, inefficiencies tend to accumulate and become more visible with every passing year. In the case of electric 3. This performance, in turn, has resulted in a loss power there are alternatives to treating it as a public of confidence in engineering and technical staffs. good. Cost estimates prepared by engineering firms, for example, are routinely factored up by multiple By the mid-1980s, governments, particularly in amounts based on the past record. The poor quality developing countries, found themselves increasingly of site information, which produces expensive "sur- unable to deliver electric power to their growing pop- prises" in a majority of projects, adds to this lack of ulations. The huge financial needs of the industry trust. were bankrupting governments and the waste and inefficiencies were increasingly obvious to all. In In response to this perception of its performance, response there was a notable slowing down in invest- the industry has tended to react in a defensive man- ments in electric power, as countries sought to define ner. Facts and figures are disputed. There are good alternatives to public procurement. The environmen- projects that have come in on cost and on time. Not tal movement had grown in strength and was expos- all projects have been environmental disasters. The ing some of the adverse consequences of hydro pro- industry is being unfairly judged relative to the alter- jects. Oil prices were falling and new technologies, natives-after all, fossil plants have their own environ- notably the gas turbine, were proving their economic mental consequences. Hydro is capital-intensive and and technical feasibility. ought to receive financing at favorable interest rates. And so the debate continues. It may make those in In the final analysis, it is various combinations of the industry feel better, but it seldom alters public all of these factors that threaten the hydro business perceptions. In fact, the defensive nature of the as it was practiced through the 1980s. Electric power responses probably adds to public suspicions. is moving from public procurement, with which the hydro industry feels comfortable, to a commercial business, where the hydro industry is uncomfortable. 2. THE STRUCTURAL ISSUE In order to compete in this new world, the hydro industry will have to strengthen its areas of weakness The heart of the problem lies in the way the busi- and work on improving its competitive advantage in ness has been conducted. The same criticisms lev- an increasingly market-based industry. eled at the hydro industry are also leveled at the defense industries-for the same reasons. It has The weaknesses of the industry are institutional in become another large public purchase with all the nature and are the result of its association with public faults and weaknesses of public procurement. Poorly procurement. Some of the issues that will have to be defined products, lack of discipline and political deci- addressed: sion-making have combined to turn the industry into another fat sow elbowing its way to the public trough. Lack of accountability. The owner, usually a pub- lic monopoly, makes the basic decision on where and In the 1970s and 1980s, the hydro industry was what to build. Behind this decision is a system plan- effective in aligning itself with the national interests ning exercise that lasts forever and where a great and became another product similar to defense. The many assumptions are strung together to produce a existence of national public monopolies running the "least cost" expansion plan. The planning and eventu- power industry made the job easier, as did the securi- al construction process can last a decade. By the ty concerns associated with rising oil prices. For that time the first kilowatt-hour is produced, the planners important public good, national defense, there are and decision makers have long gone. No one is few alternatives, and through the centuries, the accountable for the mistakes or the lack of reality in inevitable inefficiencies associated with the raising the planning exercise. Many hydro projects, for and maintaining of armies has been accepted as a example, were justified on the basis that oil would be necessary evil. Fortunately, armies are seldom test- $100 a barrel in the 1990s. ed, and inefficiencies can persist for long periods of Hydropower: A New Business or an Obsolete Industry? 113 LARGE DAMS: Learning from the P'ast, Looking at the Future Divided responsibilities. The major parties and assigned to responsible parties. involved in any hydro project are the owning utility, its government, the engineers, the financiers and the Engineers who do the site development work will contractors. None of these parties feels responsible have to be accountable for the results, and a failure to for the eventual outcome of the projects. The owners detect underground problems, for example, will hire engineers to do site investigation. At this point result in real penalties for the firm. In a recent bid the owner is politically committed to the site and may for an operations and maintenance contract for a pri- well have the financing lined up. The owner is usual- vate power plant, the winning firm was required to ly in a hurry and reluctant to spend too much on site put up a $75 million security bond. Fo:r every day the investigation. In any case, bad news would be unwel- plant fails to produce power as specified in the con- come at this point in time. The engineers have a tract, the firm will have to compensate the owners for vested interest in keeping the project going in order lost revenues. to obtain supervision and other work. The contrac- tors are doing what they are told-changes to orders Turnkey contracts are no longer flexible negotiat- are welcome and "surprises" are an opportunity to ing instruments to be adjusted over the life of the claim more money. The larger the cost overruns, the project. Governments may be willing to pick up the bigger the engineering firms' commissions. The costs of failure to produce on time, at cost and with financiers do not depend on the project to be repaid performance as specified, but private parties risking but rather on the government; they have their gov- their own capital will not. Private lenders will not be ernment guarantees and will get paid whether the prepared to fsk their capital on projects dependent project is successful or not. Aittempts to control costs on promises of money from public budgets. They through turnkey contracts do not work where will insist the government disburses its share before responsibilities are so divided, they put in a penny. Neither will they aidvance funds before a clear resolution of land, resettlement and Lack of risk management. Project risks, particu- environmental issues. larly market and financial risks, are seldom adequate- ly quantified, and risk mitigation strategies primitive at best. The risk of cost overruns, for example, is 3. MANAGING RISK quantified in terms of plus or minus 10 percent or 20 percent on overall costs. In practice it is not unusual Engineers tend to focus on technical risks. In to find cost overruns of 50 percent to 80 percent. practice, with private power projects, the technical The cost of delays, an almost inevitable consequence risks have seldom proved to be a problem. With of the financing mechanisms, receives only cursory very few exceptions, recent privately financed and analysis. Most projects have a significant proportion built fossil fuel plants have arrived early, usually of their costs covered through allocations from the below cost and with better-than-specified perfor- government budget, and the assumption is made that mance. Although hydro presents some unique tech- governments will make their c ontributions in a timely nical risks, I am confident that, given the right incen- manner. This seldom happens and, as a conse- tives, the engineers can solve the technical issues. It quence, is a major risk associated with any hydro pro- is other risks the industry needs to learn to manage ject. Yacereta in Argentina and Porto Primavera in better. Brazil are examples of huge infrastructures partially in place with completion delayed by lack of funds. If Market risk. In the world of government procure- these risks had been reasonably estimated, these pro- ment. It is assumed there will be enough customers jects would not have gone forward. willing to buy the output of the plant at prices that In a world in which hydropower has to compete cover costs and perhaps allow room for some profit. with alternative technologies for private capital, the In the case of privately built and owned plants, it is institutional structure described above is not compati- common to have a long-term power purchase agree- ble. No private investor or lender is prepared to risk ment with the utility and, in the developing world, capital in an industry unable to get its act together. usually with some form of government guarantee. Private capital will insist on all risks being quantified The basic assumption behind these contracts is that 1 14 Hydropower: A New Business or an Obsolete Industry? LARGE DAMS: Learning from the Past, Looking at the Future the government determines the price and, in turn, in Quebec or Lower Churchill in Newfoundland could must assume all of the market risk. be financed with purely private capital. Substantial government guarantees or subsidies would be But what happens when electric power becomes required to lower capital costs to the point where just another commodity, as it has in a number of these plants might be able to compete. countries? In these cases the price of electricity is set by markets and not by governments. Where com- There is little that can be done about the cost of modity prices are market-based it is unusual to find capital. There is a great deal that can be done, how- anyone willing to take 20-year positions. The owner ever, to lower the perception of risks. The Chile pro- of the plant has to take the risk that there will be a ject points the way. The bankers were confident market for his product at adequate prices. There are enough in the way the risks were managed to find a no long-term contracts, and this type of plant is 70/30 debt/equity ratio acceptable. I will say more known as a merchant plant. Fortunately, as is the about this later. case in any commodity market, there are mecha- nisms that will allow the owner to hedge some of the Site risks. Why is it cost overruns should be the risks. rule rather than the exception? Why do projects always take longer than expected? Why are there Can hydro think of itself as ever building a mer- always geological surprises on the site? Judging by chant plant? Failure to do so could drastically curtail the way most projects wind up in court or in arbitra- the business. In Argentina, Chile, the United tion, there is plenty of blame to go around. The con- Kingdom and growing number of countries, prices tractual arrangements between the various parties are increasingly market-driven and owners of new invite each to protect his interests at the expense of plant must assume the market risk. Most of the new the overall project. In most of the more recent pri- plants built in these circumstances are fossil-fired. vate thermal power projects, equipment suppliers and There is, however, an example in Chile, the Duqueco contractors are equity participants. This provides a River, where a hydro project as a merchant plant has great incentive for all parties to work together to closed financing. In this case, the equity holders and resolve problems, because they will all lose if they the bankers had sufficient confidence in the market are not resolved. Undoubtedly this is the direction and its regulatory structure to be willing to under- hydro projects will have to take. All parties involved take the market risk. in the project need to have an ownership stake. Financing risks. A critical factor in the financing Environment and resettlement risks. The of any project is how the risk are shared between industry is growing more sophisticated in the way it debt and equity. Banks and creditors do not like to handles environmental issues. A great deal can be take risks. This is the job of equity. To the extent done to resolve these issues if they are faced up to in bankers believe hydro projects present substantial the beginning. Environmentally sensitive sites are risks, they will insist on larger equity contributions. best avoided, and where corrective measures are nec- In the Duqueco project in Chile, the banks are willing essary, their costs have not proved overwhelming-if to provide funds with only a 30 percent equity contri- undertaken in a timely manner. bution, reflecting what must be a high degree of con- fidence in the market and the project. In the case of Resettlement is another matter. Environmental the Shaijao C project in China, a coal-fired project, the issues can often be dealt with through project bankers insisted on a 50 percent equity contribution, designs, whereas resettlement is primarily a manage- indicating they viewed the project to have substantial ment issue. The usual practice is to leave resettle- risks. ment to governments and their power companies. Neither does a very good job. Compensation is left Increased equity requirements will raise the cost to a myriad of government departments that have nei- of capital. Equity expects to be compensated for its ther the interest nor the budget. Dam builders sel- risks. This may price many hydro projects out of the dom understand or have much interest in resettle- market. In today's markets, for example, it is unlikely ment. Government promises are worth little when mega-projects such as Bakun in Malaysia, James Bay the reservoir is filling and the army has to be called Hydropower: A New Business or an Obsolete Industry? 1 15 LARGE DAMS: Learning from the Past, Looking at the Future in to move people. If private capital is to finance Leadership. Most projects require bringing hydro projects, it will have to undertake greater together a complex set of skills. Given the traditional responsibilities in dealing with resettlement issues. divisions in the industry, no one firm is likely to have all of these skills. The successful developer will have 4. ADAPT OR DIE: to combine these skills in ways permitting clear lines CAN THE INDUSTRY IRESPOND? of authority and accountability. Whether it is neces- sary to pull these skills together in one firm, through This is the main question in the minds of most mergers and acquisitions, or to create strategic industry observers. So far the results are not encour- alliances is a matter of judgment. Having all parties aging, and there is a tendency to avoid facing up to participate in providing some of the eq[uity is one pos- the central issue: who will provide the risk capital. sibility, but it may not be sufficient to address the Bankers are not in the business of providing risk cap- need for closer working relationships among the pro- ital. Engineering firms do not see it as their busi- ject developer, the engineering firms and the site con- ness. Contractors would rather someone else take it tractors. What is clear is that the developer will have on. Equipment manufacturers are reluctant. to provide clear overall leadership and decision-mak- Governments want to get out, of the business. And so ing authority. it keeps going around in circles. Entrepreneurship. Entrepreneurs take risks, but What is missing is the developer. Where is the they are also good managers of risks. The risk man- Enron of the hydro business? The industry needs agement skills of the industry are underdeveloped. firms with sufficient capital, technical skills, market- The traditional large firms in the industry, the equip- ing ability and management to be able to both man- ment suppliers and the contractors, are unlikely to age and finance the risks inherent in these projects. have the necessary entrepreneurial capacity. A few At present the industry is structured to meet the of the engineering firms might have this capacity, but needs of the public procuremrent process, where they generally lack sufficient capital to become seri- diverse and specialized firms compete for contracts in ous players. Perhaps new players from outside the which all of the risk is undertaken by government. industry will be required-similar to what has hap- pened in the power business, where a gas supplier, Inevitably, given the size of risks and the size of Enron has become a dominant player. projects, the developers will hiave to be large and well-capitalized. No one firm in the industry meets these specifications. It will require consolidations 6. THE FIRM and strategic mergers among existing firms to pro- duce firms capable of taking on the broad range of Given these characteristics of a successful develop- risks associated with hydro development.6. er, how would one go about setting up the firm and what, in today's less-than-perfect markets, should be its strategies and tactics? Peter Drucker and other 5. PROFILE OFTHE well-known management gurus all recommend that SUCCESSFUL DEVELOPER new or entrepreneurial activities should be started outside or apart from existing institutional structures. Deep pockets. Given the perception that this is a The directors of a traditional equipment supplier, for high-risk business, early ents must be prepared example, are going to have a difficult time under- to put up substantial amounts of equity. Equity standing the nature of the new business and the risks requirements of 50 percent or higher should not be involved and are unlikely to act fast enough to take unexpected. Overtime, a good track record wll advantage of market opportunities. Firms such as attract greater debt capital. Project or limited International Generating in the United States have recourse financing iS likely to prove expensive and been established by the more traditional parts of the difficult to obtain. A corporation able to raise funds power industry in order to exploit international mar- on its own balance sheet will 'have a competitive kets. advantage. Our hydro developer should probably combine the 1 16 Hydropower: A New Business or an Obsolete Industry? LARGE DAMS: Learning from the Past, Looking at the Future capital of a major equipment supplier and contractor, approach that explicitly recognizes that the costs and the engineering skills of an experienced hydro group, benefits are different, depending on who takes on the and the entrepreneurial skills of one of the leading risks. international power developers. It should have suffi- cient capital ($300 million) to undertake one or two Finally, the developer has to recognize his job as medium-size hydro projects a year. Above all, it developing plants, not running them forever. The should have sufficient independence from its money to be made in this business is in capital gains. founders to enable it to become entrepreneurial and The developer's job is to establish an asset in a mar- to take calculated risks in what could be a profitable ket applying a large discount to its value in the devel- but risky market. opment stages. Once the asset is developed and pro- ducing revenue, the benefit of that market discount goes to the developer in the form of capital gains. In 7. SOME TACTICS AND STRATEGIES other words, the developer needs to sell all or some of his interest in the asset, using the proceeds as his In order to spread risks, the firm would have to profits and to finance the next project. There are var- develop as diverse a portfolio of projects as quickly as ious ways this can be done. The developer may possible. This suggests focusing on relatively small chose to gradually sell his shares in the asset into the projects that can be developed in less than three local capital market or perhaps to a partner that is years. Large projects, particularly if there is a sub- interested in running the plant, thereby eliminating stantial reservoir, inevitably experience delays. One longer-term exchange risks and assisting in the possible tactic would be to buy into existing incom- development of local capital markets. Another inter- plete projects. Brazil has a number of opportunities esting alternative is being undertaken by Enron: It worth exploring. Alternatively, many countries have has put all of its returns from its international pro- projects in which preliminary work has been done jects into a fund and then turned around and sold but lack of funding has delayed further work. shares in that fund in the capital market. In doing so, Offering to take over these projects is another way of it is able to capitalize the gains from the revenue getting a quick start. stream and apply them to new investments. Critical to taking over these projects will be the assignment of risks, particularly market and hydro- 8. CONCLUSIONS logical risks. Most governments recognize that in the current underdeveloped state of their power mar- The world of the international power developer is kets or because of delays in their reform programs, extremely competitive. There are hundreds of firms no developer would be willing to undertake all of trying to establish themselves in the business. A few these risks. The real issue is how can there be a bet- are world class firms with billions in capital. In the ter sharing of the risks. The developer, of course, next few years there is going to be a substantial should take on construction, completion and perfor- restructuring of the industry as winners and losers mance risks. Hydrological risks are a matter of judg- are identified. One potentially important part of this ment and risk preferences. If the developer is suffi- market yet unexploited is hydropower. Most of the ciently confident in the hydrological data, he may be existing competitors are developing the ability to willing to take on this risk. On the other hand, if the manage the risks associated with fossil plants and are data is weak, perhaps the government can be asked not comfortable with the risks associated with hydro. to take on the initial risk with the developer picking Is this a gap that can be filled by some smart player up more at a later stage. With market risk, too, there with hydro experience? will have to be sharing. The twenty-year take-or-pay contract is probably the extreme. If, for example, the I have outlined above a few of the actions that developer is able to negotiate a substantial peak/off- would need to be taken. And this is just a beginning. peak price differential, it will make taking on some of There are many ways the industry can strengthen its the market risks a more reasonable proposition. ability to compete in the international power market. There are many forms of risk sharing which can ben- The only question in my mind is whether the devel- efit all parties. What is needed is a more imaginative oper will come from within the existing firms in the Hydropower: A New Business or an Obsolete Industry? 1 17 LARGE DAMS: Learning from the Flast, Looking at the Future industry or whether we are going to see an outside firm that understands the power business step in and take over the leadership. 1. World Energy Council, Energv for Tomorrow's World (New York: St. Martins Press, 1993). 2. For further details on performance see A. Churchill, "Meeting Hydro's Financing, Development Challenges," Hydro Review WVorld Wide (Fall 1994). 118 Hydropower: A New Business or an Obsolete Industry? LARGE DAMS: Learning from the Past, Looking at the Future PART III APPENDICES LARGE DAMS: Learning from the Past, Looking at the Future LARGE DAMS: Learning from the Past, Looking at the Future APPENDIX A: Summary of the Key Issues Discussed in the Working Groups at the Workshop APPENDIX Al: water may be aerated to produce required oxygen levels or taken from different levels in the reservoir CRITICAL ADVANCES NEEDED IN to maintain a given temperature. Dams may be KNOWLEDGE AND PRACTICE designed so as to reduce the amount of sediments that they trap and to reduce the impact on some During the breakout groups, the participants were migratory fish species. More frequently, the problem asked to address the following three questions: is that the technology employed is limited by the finances available. In addition, the requirements for 9 What are the critical advances needed in knowl- the dam are often not known, such as the amount of edge and practice for the assessment and develop- water needed to be released to maintain a down- ment of large dams? stream ecosystem. & What methodologies and approaches are required to achieve these advances? Competitive markets. In the past, large con- Who should be involved, and what should be the struction projects were financed almost exclusively process for follow-up action? by governments with financial support from interna- tional institutions, such as the World Bank. Today the The responses to these questions are summarized private sector is increasing its role in financing dams. in Part 1 of the report. In this and the following The private sector values risks differently and com- appendix, further details are provided on the points pares economics and environment differently. that were made in considering the first two questions. Countries must evaluate the trade-offs of working with the development agencies or with the private The breakout group discussions were wide-rang- sector. ing but were not necessarily comprehensive in con- sidering all of the points raised in overview papers Internalizing economic externalities. and plenaries because of the limited time available. Traditional economic methodologies for the assess- Attention in the breakout sessions focused particular- ment of dam suitability often focused on the direct ly on the identification of gaps and priority needs. costs and benefits, such as the costs of construction There were differences among the groups in the and the benefits from electricity generated or irrigat- approaches taken and the ideas generated. The fol- ed crops grown; these are considered internal to the lowing points have been taken from the summary project. There are also important indirect benefits notes that each group put on their flip charts. Listing (e.g., those associated with irrigation and regional of these does not imply agreements on their relative development) and costs (e.g., decline in fisheries importance. The editors have tried to summarize the downstream caused by lack of flood plain inundation) rich variety of ideas while resisting the temptation to to be internalized. Internalizing these externalities go beyond what was recorded by the groups to fill in involves including the value of all consequences of gaps or eliminate contradictions. This appendix focus- the dam within the cost/benefit analysis. One prob- es on the first question; A2 focuses on the second. lem is that methodologies to value some non-traded goods, such as biodiversity, aesthetic pleasure and cultural heritage, are not well developed. ENGINEERING AND ECONOMIC/FINANCIAL ISSUES Discount rate. To attract investment in large dams, rates of return must equal or exceed those of Technical aspects of dam engineering. By and other investment opportunities, such as buying U.S. large, it was felt that technical knowledge exists to government bonds. This is reflected in the economics address most requirements for the engineering of a project through the discount rate. High discount design of dams, and considerable progress has been rates favor projects with short-term high return, made on the technical side. For example, released while low rates allow incorporation of sustainability Appendix A 121 LARGE DAMS: Leaming from the Past, Looking at the Future considerations and the interests of future genera- Technical flexibility. The management of dams tions. Either way the discount rate can significantly after construction is often different to that envisaged affect the economic viability of a project. The relation- at the time of design. Few dams have ever been built ship between discount rate and sustainability is not that allow the passage of sediment or the release of well-defined and needs further research. large quantities of water to create artificial floods downstream. Dams need to be flexible so they can be Technical information. Technical information for removed or operated in a manner not intended in the deciding between development options or how to mit- original design. igate the potential effects of daims are frequently lack- ing, especially in developing countries. Engineers are willing and able to find solutions to problems provid- SOCIAL AND STAKEHOLDER ISSUES ed that the problems can be quantified, in terms of how much water an ecosystemr, for example a wet- Definition of affected groups. One way or land, needs to maintain wildlife or perform an envi- another, large dams, like many developrnent projects, ronmental function, such as nutrient recycling. affect a wide range of individuals. A hydroelectric power scheme may bring benefits to a large area- Decommissioning of damis. In addition to the indeed a whole country-if a national grid is in place. issues relating to the construction of dams, little Furthermore, affected people may be in other coun- attention has been given to the long-term role or sta- tries if power is exported. Likewise, negative effects tus of dams once their effective life has finished. may also be widespread: Regulation of flows by a Dams may cease to operate once they are filled with dam in the headwaters of a river may mean loss of sediment; thus effectively they will act as land ter- agricultural land on a flood plain downstream or races. In some cases, it may be appropriate to decom- degradation of a shrimp fishery in a coastal delta. mission dams by removal of all or part of the struc- Resettlement may also affect a large area if people, ture. This can be a costly exercise, and who should wildlife or historical artifacts are moved from the pay is not considered when dams are built. reservoir site to a distant location. A major issue is therefore to define the affected groups, or at least ARppropniate technology. In countries where ths sin* cnl fetd skilled engineers and long-terrn financial resources are available, a sophisticated technological solution Appropriate level of participation. may be most appropriate, such as managing dam Stakeholders, including local communities, need to operations automatically using information on rainfall be involved at all stages in the development of choic- or river flows by telemetry from remote stations. es and in the planning, design, implementation and However, in many countries investment in high tech- management of large dams. Before the final develop- nology is wasted, as resources and skilled manpower ment option is chosen, the priorities of the stakehold- are not available to maintain equipment. Technology ers should be determined through participatory needs to be appropriate. appraisal. External impacts hydropower generation and Transparency in decision-making. In addition other technologies. Hydroelectric power generation to decision-making being fair and participatory, it has is often considered to be "environmentally friendly" to be seen to be so, or people will have rio confidence in that it produces no nuclear waste and does not use in the decisions. Meetings should be open with nonrenewable resources, such as coal or oil. The agreed actions, reports and data should be freely immediate impression is that hydropower generation available, and the objectives and steps in any process does not produce "greenhouse gases," such as car- should be clear from the start. bon dioxide and methane. However, in tropical regions especially, the rotting of vegetation can pro- Equitable sharing of costs, benefiLts and risk. duce substantial quantities of greenhouse gases. Although some net economic gain for a region may These external impacts need to be quantified and be calculated for a proposed dam project, who actual- compared between power generation technologies. ly gains and loses is often not considered in detail. At present too much of the costs and risks are borne by 122 Appendix A LARGE DAMS: Learning from the Past, Looking at the Future local people, whether resettlers, host communities or ses. Key indicators of environmental health and social downstream residents. For example, in many devel- well-being need to be defined. These should be uni- oping countries electricity has benefited the urban form across all energy sectors. Analysis of future elite, commerce and industry. Because of little rural trends should be undertaken with and without the electrification, though, the rural poor do not benefit; project to consider the impacts from other factors, in the meantime, they frequently suffer the costs of such as climate change or increasing pressure on nat- development from loss of natural resources and ural resources. ecosystem functions. Greater efforts are needed to allow local people to contribute to the stream of pro- EIA financing and responsibility. It is widely ject benefits in a way that is environmentally, econom- accepted that the investor should implement the envi- ically and culturally sustainable. ronmental assessment, but the responsibilities need to be defined precisely. This should include who Health. In many cases human and animal diseases takes responsibility for restoration and reparation have increased significantly following the commis- measures. sioning of dams. Disease vectors, such as snails and mosquitoes, thrive in wet conditions, leading to out- EIA quality control and consistency. ElAs breaks of diseases such as malaria and schistosomia- should be independent to remove any vested interest. sis. They should be controlled by particular obligations, quality standards and control mechanisms. Severe Indigenous knowledge systems. In many cul- penalties should be levied where EIAs are not ade- tures, traditional water management technologies and quate. systems have often evolved to be in sympathy with the social structure of the communities. Many are Participation in EIAs. EIA should be an interac- sustainable with small populations but require devel- tive, participatory process, including the perception opment to satisfy higher demands from increased of the environment from local communities, especial- populations. There is a need to identify and evaluate ly affected peoples. It should be open and balance indigenous knowledge systems to determine whether conflicting environmental needs, such as natural they can meet the aspirations of stakeholders in the resource use. Decisions should be made through future. As with local people's social structure and cul- meaningful discussion and information sharing. ture, better information on indigenous knowledge systems is required for assessing their applicability to Biodiversity, ecosystems and hydrology. changed circumstances. Assessment of environmental impact is frequently hampered by lack of information, especially in remote areas where little is known about biodiversity. The ENVIRONMENTAL ISSUES hydrology of the catchment may also not be well understood, as long records of rainfall, river flows, EIA policy. EIAs of dams need to include a com- groundwater levels and evaporation rates are prehensive evaluation of alternatives that can provide required to assess water resources effectively and to the same or better development benefits, so that envi- detect any apparent climatic variability. Water quality ronmental considerations are integrated into the plan- and sediment transport rates are also normally not ning process, through a sectoral EIA, with participa- well understood, which precludes assessment of the tion at all stages by affected communities. The rules, long-term sustainability of reservoirs. Better knowl- regulations and processes need to be defined and edge of the water requirements of ecosystems would implemented by the government authorities before help to define likely downstream impacts. any private-sector developer enters, and environmen- tal assessment should last continuously throughout the life of the project, considering the very long-term CROSS-CU1TING ISSUES implications, including decommissioning. Multidisciplinary approaches. Large dams, like The EIA process. Agreed practices need to many development projects, involve many disciplines, established for defining project boundaries for analy- from ecology to engineering to sociology. A multidis- Appendix A 123 LARGE DAMS: Learning from the Past, Looking at the Future ciplinary approach is therefore needed to provide a APPENDIX A2: comprehensive approach to the evaluation of trade- offs between development options, between environ- METHODOLOGIESAND mental costs and development benefits and between APPROACHES FOR ASSESSMENT development and social costs. The scale of planning. The appropriate planning Please see the introduction to Appendix Al for an and management scale depends upon the relative explanation of the breakout group questions and dis- importance of the components in the system. The cussions that led to the ideas summarized here. The fundamental unit for water issues is normally the ideas below focus on responses to the second ques- drainage basin, as this demarcates a hydrological sys- tion: What methodologies and approaches are tem, in which components and processes are linked required to achieve advances? by water movement. Hence the term "integrated river Definition of terms. Both the terms "environ- basin management" has developed as a broad con- ment" and "sustainability" are widely used but not cept that takes a holistic approach. The socioeconom- well-defined. For an engineer, "environment" might ic scale is more frequently a village, town or city and refer to the hydrology, and to an ecologist, the func- its hinterland with which it interacts. This may not tioning of a wetland ecosystem. In water resources, coincide with a river basin. The practicalities of imple- sustainability is closely related to other concepts, menting an integrated socioeconomic and biophysical such as overexploitation and safe yield, each of which approach have not been precisely defined. have a variety of definitions, some related to time scale. Precise definitions are needed so that dams Monitoring and evaluation. Large dam projects cane asessedeiniterms of teir e ontal should have a long time horizon. This should begin can be assessed m terms of their environmental with adequate pre-project assessments involving par- impacts and sustainability. ticipation of local communities. Close monitoring of Trade-offs. Sound methodologies are required to the impacts on local communities should take place assess trade-offs between financial performance and during project implementation, especially if resettle- impacts on people and the environment. Cost-benefit ment is required. Post-project appraisal needs to be analysis is often used as the decision-making tool, undertaken over a long enouglh period such that the focusing on economic efficiency and maximization of long-term effects of the dam, in both benefits and the overall gain to society as the measure of success. negative impacts, can be deterrnined to ascertain However, a methodology is needed for taking account whether the measures are sustainable. For example, of distributional effects (i.e., who gains and who loses can resettled people and their c hildren after them from large dams). derive a higher standard in their new location? Because social effects continue well beyond the end Valuation of non-traded goods and services. of the construction phase, it is essential that they be Methods for assessing values associated with non- carefully monitored and that sufficient financing be traded goods and services, such as ecos,ystem func- available over a longer time fraime for implementing tions, and internalizing externalities, need to be appropriate development plans. developed. Discount rates. More research is required on the relationship between discount rates and sustainability of projects so as to resolve debates about whether short-term, high-yield projects prejudice choices against sustainable, lower-yielding projects. Definition of stakeholders. More precise methodologies are needed for determining the stake- holders and the cut-off point for people m lost affected by large dams. 124 Appendix A LARGE DAMS: Learning from the Past, Looking at the Future Stakeholder involvement. Guidelines are Conservation of biodiversity. Procedures for required on how to involve stakeholders, including assessing and conserving threatened species need to procedures appropriate to differing levels of income, be established. types of employment and living standards of local people (for example, housing and social services) and Planning. All planning needs to have clear objec- on what makes meaningful and appropriate levels of tives and criteria, for example that people are better participation. off. Methods need to be developed for supporting decision-making based on multiple criteria analyses, Institutional capacity. Assessment workshops considering multiple options trade-offs and going need to be designed for evaluating the stakeholders' beyond simple cost-benefit analysis. The old para- technical knowledge, ability to analyze information digm of design on the basis of least cost is being and organizational skills in providing for democratic replaced by one of maximum acceptance, or least representation. Training in technical issues and nego- regret by the stakeholders and affected people and tiation skills can be identified. wildlife. Ethics. Guidelines on ethics are required and tri- Demand management. New methodologies for bunals of inquiry are necessary to hear grievances. reducing water demand should be investigated to reduce the need for large dams such as water pricing, Ecosystem approach. The ecosystem approach on-site sewage treatment and drip irrigation technolo- is required throughout the planning, design, imple- gy mentation and evaluation phases of development. The approach recognizes the interaction and interdepen- Scale. Research needs to be undertaken on how dencies of the physical, chemical and biological as the scale of a dam relates to impacts, decentralization, well as social and economic elements of a given area. privatization and devolution of authority to local com- Taking an ecosystem approach means identifying munities. these interrelationships, predicting the impact of any proposed action and evaluating the consequences Private sector. The involvement of private-sector before taking any decision. New methodologies are financing is a relatively new phenomenon. Research required to better assess the abiotic-biotic and biotic- is needed on how the private sector values risk, biotic interdependencies. whether they have shorter- or longer-term horizons and how competition among the private and public Implementation of treaties and conventions. It sectors may affect choice of options. The roles of the is essential to ensure that design, construction, imple- various actors need to be defined, such as the public mentation and management of large dams is under- sector undertaking strategic planning and handing taken in line with international treaties and conven- the project over to the private sector for implementa- tions, such as Ramsar or Biodiversity Conventions, tion. Project appraisal is required on how private and and in line with any water-sharing agreements public sector dams compare on economic, environ- between countries sharing international water bodies. mental and social grounds. Proactive EIA approach. EIA tends to be a reac- Responsibilities. The responsibilities among the tive process that looks at the environmental impacts various actors for environmental and social data col- in response to design proposals for a dam. lection, impact evaluation and decommissioning need Procedures are required to use EIA to evaluate alter- to be defined. Questions such as who pays for higher natives that can provide development benefits in sym- standards need to be addressed. pathy with conservation. Interdisciplinary teams. Guidance is required Water requirements of ecosystems. on the makeup of multidisciplinary teams, which Methodologies need to be developed to assess the might include professional experts (hydrologists, water requirements of ecosystems, so that effects of engineers, sociologists, ecologists, planners, epidemi- impoundment of water can be determined and strate- ologists, economists and others) and locals with par- gies for ecosystem conservation, such as artificial ticular knowledge of the ecosystem or cultural values. releases, can be implemented. Appendix A 125 LARGE DAMS: Learning from the Past, Looking at the Future LARGE DAMS: Learning from the Past, Looking at the Future APPENDIX B: Opening Statements to the Large Dams Workshop and Post-workshop Correspondence APPENDIX B1: There has been an empty chair at otherwise inclusive IUCN gatherings over the years. It is the chair that OPENING STATEMENT BY should have been assigned to the corporates, for it is the private sector that invests in and manages much IUCN Director General of the natural resources of the world. I now have a DAVID McDOWELL firm mandate from the Union membership to fill that chair on all occasions such as this. I welcome that recognition of the realities. May I welcome all participants to IUCN headquar- I also welcome the press presence. This will help ters. The composition of this group is not accidental: increase the transparency of the whole process. it reflects the diversity of views globally on the utility of constructing large dams. You may ask why IUCN and the World Bank are acting as co-hosts. The answer is that this is one We have here: result of an experiment in partnership which began X Our co-hosts from the independent Operations nearly three years ago. Its origins go back beyond Evaluation side of the World Bank; early 1996, when the Bank's Operations Evaluation a Top people from three highly relevant areas of Division was preparing its desk review of large dams. the World Bank Group: the Environment It was based on our side on the premise that it is bet- Department, the Energy Department and the ter to join in the struggle than to howl from the side- International Finance Corporationh lines - and on the calculation that when an institu- Interntiona FinanceCoporattion like the Bank starts to give evidence of changing X A group of civil society organizations, including its spots it should be encouraged to go on doing so. some multi-country NGO networks; People from several national government min- For my part, I regard this as a gamble which is istries and public utilities; paying off: We still argue strenuously with the Bank on many occasions and we do not see eye-to-eye on A good representation of private sector people mn sus u ehv enal oifuneti from firms involved in the design and construction of many issues, but we have been able to ifluence this das somewhat implacable institution in directions we see dams; as useful and we have done some very good work X Several people from the media; and together in the field. And we have ourselves learned a Managerial and technical staff members of much from our closer association with the Bank. IUCN-The World Conservation Union, a GONGO So why does this Union have an interest in large (government and NGO) hybrid with over 900 organi- - and indeed all - dams? The basic answer lies zational members in 136 countries and extensive partly upstream and partly downstream from these sometimes productive, sometimes destructive, some- Why have the Bank and IUCN gotten such a dis- times beautiful man-made interventions in the cycles parate group together to talk about dams? The short and systems of nature: answer is that a dialogue among these people is long o We are intensely interested as a Union in the overdue. To use the catchy phrase, we are all stake- ecologically sustainable use of natural resources like holders in this activity - and it is time to talk turkey. that life force that is fresh water. I welcome all of you to this place, particularly m- We are intensely involved in the theory and those who are here for the first time. practice of managing freshwater ecosystems and indeed large river basins. I welcome particularly the private-sector people. ide ag ie ais waWe are intensely interested in the equitable use Appendix B 127 LARGE DAMS: Learning from the Past, Looking at the Future of such resources - so the upstream and down- drives the energy exchange between the land and the stream effects on people as well as ecosystems inter- atmosphere, thus hugely influencing the earth's cli- est us substantially. mate; that water provides a habitat for a variety of m We stand for the conservation of biological diver- threatened plant, animal and fish species; and that sity in all its forms, not simply for aesthetic reasons water will replace oil as a major source of conflict - though these are valid - but also for sound scien- among states in many regions in the next millenni- tific and indeed practical economic reasons. um. It would be misleading to claim that there is a con- But let me take a minute to make a special plea sensus among IUCN's diverse rnembership on the from this Union's perspective for seeing large darns continued construction of dams. A succession of not as a one-off intervention in one section of one West African presidents have said to me that big and river channel but as a major ongoing intervention in even medium-size dams are out and they will rely the hydrological cycle of an entire river basin and of henceforth on traditional ways of using their often the ecosystems which maintain this cycle. This scarce waters - and our work with them on the com- Union is moving from seeing species conservation or parative economics and productivity of wetlands and limited habitat protection as sufficient techniques in flood plains compared with irrigated areas in that themselves to achieving sustainability. WVe are seek- part of the world largely supports this view. But on ing a more wide-ranging approach which aims to the other side of the world, ministers in Laos have truly integrate river basin management, desirably pointed out that they have precious few other ways of involving the management of all of the major ecosys- raising foreign exchange and lifting the living stan- tems in the river basin and an understanding of the dards of their long-suffering people than building biophysical processes upon which they depend. This hydro dams to export energy -- and that other ways involves careful and time-consuming study of the of using natural resources would be much more functioning of the different components of sometimes destructive of biological diversity in Laos. vast river basins. The debate rages on and a variety of answers have This Union's hard-won experience is thiat unless some validity - not just regionally and nationally, but and until you have done your basic scientific home- in particular sites. work over entire river basins then all your other cal- culations - not least the social and financial calcula- What is certain is that the Union membership tions - will be flawed. expects us to address such big issues, to use the con- vening power that springs from our mixed member- Let me illustrate this with two field examples. At ship, to resolve damaging conflict where feasible and the moment we are steadily remodeling an earth bar- to contribute to the drawing up of environmentally, rage dam in Central Africa and helping the govern- socially and indeed economically sound approaches ment concerned to restore the highly productive and guidelines on whether or not and how to build flood plain downstream. We are doing this piece of dams, be they large or small. restoration ecology because that is where the net social, ecological and especially economic benefits to I do not need to lecture this grouping on the histo- the country lie. The original feasibility study largely ry and politics of large dams or on the biology of ignored the ecological side and even got the hydrolo- fresh water. We all know that the history of dam con- gy wrong. So the economic calculations ended up struction is patchy - and open to dispute. We all hopelessly inaccurate. The 100,000-plus inhabitants know that some dams have been a disaster on several suffered accordingly and so did the country's overall fronts, not least the social and environmental fronts. economy. We all know that some have been beneficial in their net effects and have had a role to play in develop- My second example comes from West Africa. For ment and in meeting people's aspirations. We know several years now, IUCN has been workinog with non- that water is fundamental to the biochemistry of all governmental partners to protect a series of wetlands living organisms; that the planet's ecosystems are in northeastern Nigeria known as the Hadejia-Nguru linked and maintained by water, that evaporation wetlands. Like many wetlands in the usually dry 128 Appendix B LARGE DAMS: Learning from the Past, Looking at the Future Sahel, these seasonal wetlands are an oasis of life in Each of us in this room will have some such spe- the otherwise dry and dusty environment. But the cial perspective. I accept that that is inevitable. I rains are fickle and the flooding is not predictable. If have had my chance to have my say. I shall be inter- the flood comes too early, it will drown out the rice ested to hear your points of view. May I underline: too late and the rice will dry up. So for some time, IUCN has been working with the people of Hadejia- a that you are encouraged to state your views Nguru to help construct small micro-bunds around freely; the rice fields that will allow the people to control the xi that we want to hear the hard arguments, for flow of water to the fields. At the same time, we are that is clarifying; and working with the whole community to raise the awareness and understanding of the underlying ecol- E that we should not get bogged down m detail or ogy of these life-giving wetlands. This involves jointly slip into posturing mode (and environmentalists are assessing the biodiversity, providing training in moni- toring the hydrological cycles, and so on. But let me also make one additional point: that this We now fear that much of this work will come to is an unusual opportunity to have a hard look at the Weunow. fe larg tatm this work wuill cev ton- big issues surrounding large dam construction and to naught. T wo large dams have been bUilt several hun- sektwokoghrtodinsmepcsesha dred kilometers upstream. The draw-down on the seek to work together to design some processes that overall water flow has already caused the wetland may lead a year or two from now to changes in the ^ . . . . ~~~~way dam-building proposals are assessed and deci- areas to contract. A third dam is now being built y g prp The impacts of this project on the wetlands could be sions on them are made. Let's resolve not to blow dramatic. Our hydrological studies show that under this chance to start getting it right. certain circumstances this third dam may well com- Most of us here believe that in making such deci- pletely dry up the wetlands, forcing the farmers, the sions, societies around the world should be in a posi- nomadic herders and the fishermen of Hadejia-Nguru tion to make truly informed choices. By this we to go elsewhere. And that is to set aside the fate of mean that all costs and benefits - in so far as we are the birds, fish, animals and plants that have flour- able to assess them - must be studied, brought out ished in these wetlands. into the open, traded off and then internalized into The moral of this story is that in conservation, as the final assessment. in dam-building, the river basin needs to be looked at I use here the language of the market place, but I as one large, interconnected freshwater ecosystem. am not talking about purely financial costs and bene- What is done to one part of the system has impacts fits, or purely financial trade-offs. For the factors upstream and downstream, sometimes hundreds of sometimes involved in dam-building are not easily kilometers away. susceptible to the techniques of the marketplace: End of cautionary tales, but you will get my drift: What price do you put on a hydrological system We have to get the science right first, and we have to undermined, on a species made extinct, on a way of look well beyond the immediate site of operations to life of a distnct human group effechvely destroyed- make true assessments of relative costs and benefits. or, for that matter, on the bringing of electric lights to This case for seeking true assessments based on full a rural village? information across several sectors should not be seen These are some questions that need addressing. as a recipe for indefinite postponement of decisions. Decisions have finally to be taken - and they will be I conclude by saying that IUCN, for its part - and taken. My argument is that there is a certain mini- I want to stress this - has a commitment to this mum of basic scientific and related information that whole process: has to be brought to bear before it is prudent to be making final assessments and investment decisions. a We are prepared to play an active role in further- And such assessments do have to include a thorough ing it, for example, in terms of further study and field look at alternatives to the drastic intervention which work. a large dam represents. X We are prepared to help facilitate an ongoing Appendix B 129 LARGE DAMS: Learning from the Past, Looking at the Future process involving the major stakeholders. APPENDIX B2: a We would be keen to assist in producing new guidelines on assessing dam construction proposals OPENING STATEMENT BY and their potential impacts. X We would be happy to work with others on ROBERT PICCIOlTO improved management practices for existing but dys- Director General, functional dams so that degraded riverine ecosystems Operations Evaluation, may be restored. The World Bank May I thank our Bank colleagues for their initiative in engaging in this process of open dialogue and for We have assembled here today because the large their willingness to consider a potentially very signifi- dams question is emblematic of broader debates. cant role in redefining the parameters of the great global debate over the future construction and man- For some, large dams symbolize a failed, central- agement of publicly and privately funded dams. ized, technocratic approach to development charac- I invite you all to join with us in this fundamentally terized by waste, bureaucratic bungling and insensi- important endeavor. tivity to people and the environment. For others, large dams are "almost the equivalent April 9, 1997 of Gothic cathedrals-the supreme creation of an era, conceived with passion by unknown artists and assumed in image, if not in usage, by a whole popula- tion." Both of these mythologies live because each con- tains a grain of truth. On the one hand, 'some dams are marvels of human ingenuity. They make deserts bloom, they tame floods, they produce clean ener- gy-and they put nature to work. On the other hand, to paraphrase Pat McCully, a large dam can silence a river, destroy a landscape, endanger bioeliversity and uproot whole communities. According to Thoreau, "Rather than love, than money, than life, give me truth." What then is the truth about large dams? Thoreau also said: "A man is rich in proportion to the number of things he can afford to let alone." But can developing countries afford to let large dams alone? These are the two basic questions this workshop is expected to address. First, the evaluative question- the Phase II Process. Second, the normative ques- tion-the standards for large dams. Underlying both concerns is our continuing search for an economic and social system that can provide more and better goods and services for all while sustaining a high- quality environment. So, the dilemmas posed by large dams are those involved in harmonizing devel- 130 Appendix B LARGE DAMS: Learning from the Past, Looking at the Future opment with the environment. And at the core of this operate and maintain. No wonder then that two- challenge lies energy-the fuel of economic develop- thirds of the large dams built in the 1980s were in ment from time immemorial. developing countries. The power market in develop- ing countries is growing, and this is where the bulk Who says energy says carbon. And carbon is now of unexploited sites lies. According to the World the "most wanted" environmental culprit. Conversely, Energy Council, a doubling of energy production for displacement of carbon for the energy system may be hydro from 2,000 terawatt hours to 4,000 terawatt the largest single environmental challenge facing the hours per year from 1990 to 2020 is in store. This planet. Progress has been slow but sustained over implies a trebling of hydro capacity and, if it occurs, the past century. Since 1860, decarbonization has cut would still leave 70 percent of the technically usable the tons of carbon to units of energy produced by 40 potential untapped. percent. In 1920, coal still provided three-quarters of global energy, and heavy smog lay over London and Such a development would contribute substantially Pittsburgh. Today, carbon is struggling to sustain its to reduced reliance on carbon as well as bring down market share of about 25 percent. The move from a the currently high energy intensities of the develop- polluting carbon economy to a non-polluting hydro- ing world. Measured in tons of oil, for example per gen economy is underway. It will have to be acceler- U.S. dollar of GDP, Thailand resembles the United ated to keep global warming at bay. States in the 1940s, while India is comparable to the United States of a century ago. Keeping energy use Dams have a significant role to play in freeing the at current levels in developing countries is an envi- energy system from carbon. When built on time and ronmental fantasy that would confine them to perpet- on budget, they produce electric power at competitive ual poverty. Per capita, LDC residents use only prices. Electricity can substitute for wood, coal, 1/15th of the energy consumed by a U.S. resident. kerosene and oil and therefore contribute to a clean- er, safer, healthier environment. I will not talk about the extraordinarily important use of dams for irrigation. But consider this simple With electricity, deadly wastes associated with fact. By raising wheat yields fivefold during the past open fire and smoke in homes and workplaces few decades, Indian farmers have spared an area of decline and with it exposure to pneumonia, TB, diph- cropland equal to the state of California. This yield theria and other airborne diseases. Refrigeration also revolution would not have taken place without sur- becomes possible, and this cuts into waterborne gas- face irrigation used in conjunction with ground water. trointestinal diseases-another major killer. So there is a strong economic and environmental case for large dams. But as dams are currently Electricity used to be based on coal alone. Hydro designed, constructed and implemented, a strong is a viable alternative in certain situations. So is nat- case can also be made against them. The damming ural gas, which has increased its market share given of a river can be a cataclysmic event in the life of a its flexibility, quick gestation, low capital costs and riverine ecosystem. The construction of dams in the efficiency of combined cycle turbines. Natural densely populated, environmentally sensitive, institu- gas is carbon trim-four hydrogens for every carbon. tionally weak areas can be very destructive. Coal uses one to two carbons per hydrogen. Oil uses two hydrogens per carbon, while wood uses ten car- Just as in real estate, location matters. bons per hydrogen. So only nuclear and hydro can Consultation matters too. But it is not a panacea. beat natural gas in the decarbonization game. But The protection of natural habitats and the resettle- nuclear involves high risks and heavy costs, while ment of people displaced by dams call for institutions hydro lies well within the technological reach of most and implementation capacities that need nurturing developing countries. over many years, even decades. These are not chal- lenges that can be met efficiently one project at a Hydro is renewable and domestic-resource-based. time. The OED report suggests that 75 percent of By contrast, fossil fuels often require foreign the dams reviewed did not meet current environmen- exchange. Furthermore, hydro projects are easy to tal/resettlement standards at completion and hypoth- Appendix B 131 LARGE DAMS: Learning from the Past, Looking at the Future esizes that had they done so they would still have been privileged to have leading authorities prepare yielded an attractive rate of return. The Bank has and present excellent overview papers covering eco- now changed its policies, but compliance with them nomic/engineering, social and environmental issues. remains a massive challenge. It cannot be achieved You will undoubtedly have many more ideas and pro- through conditionality and paper plans. It requires posals of your own, which you will have an opportuni- country commitment, appropriate domestic legisla- ty to air and discuss in the working groups this after- tion and adequate enforcement and implementation noon and tomorrow morning. capacity. The constraint is not engineering hardware. It is the societal software, the rules of economic and There is not shortage of issues. They key is to social governance and the ability of local agencies to identify those that are so critical that they deserve get things done. These institutional building tasks the scarce resources that we'll have at our disposal. should lie on the critical path of dam construction Basically, we don't want to go back home with a long programs. list of additional problems. We are here to put in place a framework and a process that will eventually This is where today's workshop comes in. It is get them solved. Once we select the priority ones, let part of an unfolding change process that is taking us start on the next steps. place globally as well as locally. Technologically, imi- tation, adaptation and sharing of experience has Methodology is certainly an issue. In the Phase I improved the ways dams are built. In particular, safe- report, we used a cost/benefit framework. It forces ty standards are now better understood and dissemi- everything onto a common denominator, and leads to nated. The time has now come to promote a similar a bottom line. It can be used to compare large dams change process with respect to the human and eco- with alternatives, and with any other app]Lication of logical dimensions of large dams projects. Fact-find- the scarce human, natural and financial resources ing is more effective than fault-finding. No society that a proposed project requires. should be excluded from learning. Latecomers should be able to benefit from the costly experiments But the cost/benefit approach has its limitations. of pioneers. This is the challenge of evaluation and We are open-minded about other evaluative frame- also of this workshop. works that promise a better integration of issues and/or a more acceptable comparison with alterna- I put the idea of workshop to George Greene a few tives given the objective of sustainable development. months ago and, with the support of the Bank's man- agement and its Board, and a siimilar process within We need to be concerned about the acceptance of IUCN, we have moved forward. The "going" will whatever emerges from this workshop by the broad- undoubtedly get tough, but this a tough group and I er community. I am talking about potential investors, am confident that it will get going. governments, affected communities, beneficiaries and others who have a stake in the future of large Our joint approach to the workshop is straightfor- dams-particularly those that are involved in the 98 ward. We have brought together leading representa- percent of the dams that are not financed by the tives of major stakeholders in a neutral setting. We World Bank. This is the challenge for the next would have loved to have even broader consultations. phase. And it has implications for the way Phase II is But with a larger group, we would not have had the conceived. opportunity to get acquainted and listen in detail to each other's point of view. Broader consultation will We need a rigorous, professional and transparent be needed in future-that is for the workshop to dis- process for defining the scope, objectives, organiza- cuss. tion and financing of follow-up work. We need to develop basic guidelines for involvement by govern- So, let's reason together and decide which are the ments, the private sector and NGOs, as well as broad- most important issues that need to be addressed. er community and public participation, information The Phase I report identifies a few key issues and disclosure and subsequent dissemination of results. proposes specific areas for followv-up. We have also We should not emerge from this workshop only with 132 Appendix B LARGE DAMS: Learning from the Past, Looking at the Future a warm feeling and a somewhat better understanding of each other's concerns. Our time together is too short to get into in-depth discussions of specific issues and cases. Perhaps we ought to focus on prin- ciples, processes and partnerships that will help address the critical issues in a manner that will find general acceptance. Developing partnerships should be a key element for reaching out to the world of stakeholders outside this room. I don't think OED can or should handle Phase II on its own, and neither should the Bank. We are prepared to remain involved, but we don't need to be at the center, at the top, or in the most prominent seat. What is important to us is that the issues be effectively addressed; i.e., that the follow-up actions gradually lead to standards for the assessment. plan- ning, building, operation and financing of large dams that are generally accepted by the governments and the peoples of the developing world as well as the external agencies, whether public, private or volun- tary, with a stake in the development process. So the challenge before all participants today and tomorrow is to invent a plan of action that will trigger real change. Generally accepted standards and best practice examples should be sought so as to get results on the ground. Equally, new ways of coopera- tion must replace the current gridlock of distrust and recrimination. Governments of developed and devel- oping countries will have to be involved far more actively than they have been so far. The private sec- tor will also have to be associated with the next steps. If ways are not found out of the current logjam, dams will continue to be built, but they will be built at a slower rate with great pain and at a higher human and environmental cost than necessary. If, on the other hand, the workshop succeeds, a win/win logic may eventually take over and the history of dam con- struction will evolve from confrontation to coopera- tion for the benefit of all. So let us try to make histo- ry today. April 9, 1997 Appendix B 133 LARGE DAMS: Learning from the Past, Looking at the Future APPENDIX B3: POST-WORKSHOP CORRESPONDENCE BETWEEN: IUCN Director General World Bank President DAVID McDOWELL JAMES D. WOLFENSOHN Worrd Headquarlers IU C N Rue Mauverne' 28 The Wodd Conservation Union CH -1196 Gland Switzerland TeL: ++412259 00 01 fax: **4122-11590002 Mr James 0. Wolfensohn E-mail: mail4lahciucrPort Telex: 419624 iucn ch President The World Bank 1818 H Street N.W. Washington DC 20433 USA 21 April 1997 This is to confirm what you will already have heard from your own people, which is that the workshop on large dams co-hosted by the Bank and IUCN on 10 11 April here in IUCN headquarters was most successful. It was a success in terms of atmospherics - we got together a disparate group of people, proponents and opponents of large dams from the private sector, NGOs and involved international organizations - and they debated the issues warmly but in a rational and constructive way. It vvas a success also in terms of outcome. We reached a firm consensus on how to carry the debate on large dams forward over the next two years or so and on a process to reach some agreed guidelines and standards that would improve the assessment, planning, building, operating and financing of such projects. You will have seen the press statement issued at the end of the session. I do want to congratulate you on supporting this rather unprecedented open dialogue. It has engendered a good deal of goodwill among the participants. Robert Picciotto and his OED team took the lead and they had strong support from Andrew Steer and his staff, Richard Stern, John Briscoe and a whole array of other excellent Bank and IFC staff members, including Martyn Riddle. We should keep up the momentum. It is my hope and expectation that your people and mine will now get together quickly in a joint working group to start drawing up an agreed game plan. This should lead to the establishment of a well qualified and high level group to look at experiences impacting on the case for and against large dams and to pull together new standards and guidelines. 134 Appendix B 134 Appendix B LARGE DAMS: Learning from the Past, Looking at the Future Mr James D. Wolfensohn 21 April 1997 Page 2 In the interim, we hope that the whole exercise will help improve practices on the ground In relation to dams being developed and in the planning stage. I trust that we can rely on your continued strong personal support for this whole process and not least for a campaign to produce the substant'ial resourcing from within and outside the Bank Group which will be needed to carry out the agreed plan? We should probably jointly approach a range of donors and partners from the public and private sec-tors. We all have every reason to feel pleased with the outcome of this joint exercise thus far, but recognise that the road ahead will take a good'deal of effort and constant consultation to produce a satisfactory outcome. With warm regards. Yours sincerely, David McDowell Director General Appendix B 135 LARGE DAMS: Learning from the IPast, Looking at the Future The World Sank Wugtn. D.C. 20433 U.SA JAMlES 0. WOLFENSOHN Pre.ht4.i May 1, 1997 Mr. David McDowell Director General RUCN Rue Mauverney 28 CH-1 196 Gland Switzerland Dear David: Thank you very much for your letter about large dams. I fully share your assessment: considering the sharp controversies which large dams continue to evoke, the workshop was surprisingly successful. T'he promising decisions reached confirm the potential of the IUCN-Bank partnerslhip. Indeed, Bob Picciotto tells me that the positive results were, in large part, due to lJCNWs excellent performance in planning and hosting the event. I am especially grateful for your own participation and your explicit expression of support Ifor the changes I have set in train at the World Bank. I understand that this helped to create a businesslike atmosphere and that it proved possible for the Bank and the IUCN teams to engage critics and proponents of large dams in a highly professional mode. Large dams constitute a major technical, social, enviroxnmental and developmental challenge. For this challenge to be met successfully, the World Bank is prepared to join with IUCN, and other stakeholders in the pnvate, public and voluntary sectors toward the creation of an appropriate franework focused on learning from experience and on the design and dissemination of adequate standards. Like you, I am keen to see active follow-up and, in order to sustain the momentum, I endorse your proposal of a joint working group co-chaired by IUCN and the Bank to plan for the next phase. Several pans of the Bank Group will be involved in the follow up. To ensure effective coordination, we are putting together a strong team to work with designated IUCN staff. It will be headed by Andrew Steer and include John Briscoe, Richard Stern, Gloria Davis as well as OED and IFC representatives. 136 Appendix B LARGE DAMS: Learning from the Past, Looking at the Future I2- Once the joint IUCN-Bank group has finished its work, I will personally vet its recommendations and get in touch with you regarding next steps. We will then need to work together to raise the funds needed for implementation and jointly select personalities capable of generating confidence amnong all parties to the large dams debate. Sincerely yours, James D. Wolfensohn Appendix B 137 LARGE DAMS: Learning from the Past, Looking at the Future LARGE DAMS: Learning from the Past, Looking at the Future APPENDIX C: Papers Available at the Workshop, Participant Biographies APPENDIX Cl: LIST OF PAPERS AVAILABLE TO THE WORKSHOP PARTICIPANTS Author Title Date Michael Acreman Environmental Effects of Hydro-Electric December 1996 in J. CIWEM Power Generation in Africa and the Potential for Artificial Floods John Besant-Jones Guidelines for Attracting Developers April 1996 in Energy Issues: World Bank of Hydropower Independent Power Projects Shripad Dharmadhikary A Critique of the World Bank April 1997 OED Review of Large Dams and Suggestions for the Future Process Earth Island Journal Tropical Dams and Global Warming 1996 The First International Curitiba Declaration: March 1997 Meeting of People Affirming the Right to Life Affected by Dams and Livelihood of People Affected by Dams Robert Goodland The Urgent Need April 1997 and Salah El Serafy to Internalize CO2 Emission Costs Nicholas Hildyard Public Risk, Private Profit- July/August 1996 in The Ecologist The World Bank and the Private Sector International Commission Position Paper on Dams and November 1995 on Large Dams the Environment International Commission Some Inescapable Facts April 1997 On Large Dams Which May Put the Issue in Perspective International Rivers Network Risky Business January 1996 in World Rivers Review International Rivers Network Manibeli Declaration: June 1994 in conjunction with NGOs Calling for a Moratorium on from the around the world World Bank Funding of Large Dams E.A.K. Kalitsi Management of Multipurpose April 1997 Reservoirs - The Volta Experience Franklin Ligon, William Dietrich Downstream Ecological April 1997 and William Trush in Bioscience Effects of Dams Appendix C 139 LARGE DAMS: Learning from the Past, Looking at the Future Author Title Date Patrick McCully A Critique of "The World Bank's April 1997 Experience with Large Dams: A Preliminary Review of Impacts" Jeffrey McNeely How Dams and Wildlife Can Coexist: October 1987 in Conservation Biology Natural Habitats, Agriculture and Major Water Resource Development Projects in Tropical Asia Bradford Morse Letter to the President of the World Bank June 1992 and Thomas Berger Regarding the Independent Review of the Sardar Sarovar Dam and Irrigation Projects Charlie Pahlman Build-Operate-Transfer October 1996 in Watershed Brian Smith Presented at Guidelines for Considering the Needs of February 1997 the IUCN Workshop on the River Dolphins and Porpoises During the Planning Effects of Water Development and Management of Water Developmpent Projects on River Dolphins in Asia Theo PC. van Robbroeck Presented Future Water Supplies Threatened- 1996 at the Sixteenth Congress of the Large Dams: A Bane or a Boon? International Commission on Irrigation and Drainage Theo PC. van Robbroeck Reservoirs: Bane or Boon? 1996 Presented at the Geoffrey Binnie Lecture World Bank in OED Precis Lending for Irrigation March 1995 World Bank in OED Precis Learning from Narmada May 1995 World Bank in OED Precis Environmental Assessments December 1996 and National Action Plans World Bank OD 4.00 Annex B: Environmental Policy for April 1989 Dam and Reservoir Projects World Bank OD 4.01: October 1991 Environmental Assessment World Bank OP 4.04: Natural Habitats September 1995 World Bank OD 4.20 Annex A: Indigenous Peoples September 1995 World Bank OD 4.30: Involuntary Resettlement June 1990 World Bank OP 10.04 Economic Evaluation of September 1994 Investment Operations World Bank OP 4.37 Safety of Dams September 1996 US Bureau of Reclamation, Remarks to the International November 1994 Daniel Beard Commission on Large Dams 140 Appendix C LARGE DAMS: Learning from the Past, Looking at the Future APPENDIX C2 BIOGRAPHIES OF THE REFERENCE GROUP _ ~ Michael Acreman is head of River Basin and issues at the University of North Carolina, he cur- Hydroecological Management at the Institute of rently serves on the Water Science and Technology Hydrology, a component of the Natural Environment Board of the National Academy of Sciences. Research Council in the United Kingdom. Mr. Acreman is responsible for hydro-ecological research Wenmei Cai is a professor at Beijing University at on the impacts of dams on the habitat of aquatic the Institute of Population Resources, an interdiscipli- species and for developing methods of physical habi- nary center focusing on training and research in eco- tat assessment. Since 1993, Mr. Acreman has also nomic, social, technical and family demography. In been an advisor on freshwater management to IUCN, addition to teaching courses on population issues, advising on projects concerned with impacts of dams Ms. Cai has conducted several investigative research and reservoir management on wetlands in Africa. projects on reservoir migration throughout China, including Three Gorges Dam, Fu-Shan Reservoir, Sanjeev Ahluwalia is a senior fellow at the Tata Mei-Shan Reservoir, Long-Yan-Xia Dam and Xin-An- Energy Research Institute (TERI), a nonprofit Jiang Reservoir. research organization in New Dehli, India, focusing on policy, technology and institutional issues for the Stuart Chape is country representative of the promotion of clean and efficient energy technologies. World Conservation Union's (IUCN) Country Office TERI has conducted studies on the comparative envi- in the People's Democratic Republic of Lao. Mr. ronmental impacts of thermal, nuclear and hydropow- Chape, who is responsible for developing and imple- er; the role of hydro power in system management; menting IUCN's program in Lao PDR, is currently and the potential for large hydro projects as a GHG managing the development of environmental and mitigation option. Mr. Ahluwalia coordinates eco- social action plan for the Nakai-Nam Theun nomic analysis of energy- and environment-related Catchment Area as part of the assessment for the public policy options. Nam Theun Two hydropower project. He is also a member of the IUCN Asia Regional Directorate. Peter Bosshard is secretary of the Berne Declaration (BD), a public interest organization locat- Eduardo De La Cruz Charry is environmental ed in Zurich, Switzerland, that promotes more equi- and marketing manager at a Colombian power com- table relations between Switzerland and the countries pany that has developed, built and operated several of Africa, Asia and Latin America. Mr. Bosshard, who hydroelectric plants throughout Colombian territory. specializes in the social, environmental and economic Mr. De La Cruz Charry, who participated in the cre- impacts of large dam projects, is in charge of BD pro- ation of the Environmental Corporate Structure at grams on international financial relations, including ISA, is responsible for public affairs, development of the monitoring of Swiss banks, multinational corpora- environmental policies and strategies, and environ- tions, governmental programs and multilateral devel- mental auditing. opment banks. Shripad Dharmadhikary is a full-time activist John Briscoe is the senior water advisor at the with the Struggle to Save the Narmada (Narmada World Bank. Mr. Briscoe is responsible for the over- Bachao Andolan-NBA), a mass-based organization sight of the Bank's programs in water resources, irri- opposed to the large Sardar Sarovar (Narmada) dam gation, hydropower, water environments and sanita- project in Western India. NBA studies, documents tion. He has also worked as chief of the Water and disseminates information challenging the viabili- Supply and Sanitation Division at the Bank. Prior to ty of the project. Mr. Dharmadhikary is involved in a joining the Bank, Mr. Briscoe worked on water number of activities, including popular mobilization, resource issues for the governments of South Africa press and media relations, as well as litigation oppos- and Mozambique. Having taught water resource ing the project. Appendix C 141 LARGE DAMS: Learning from the Past, Looking at the Future Mbarack Diop administrates and manages the joint IUCN-World Bank Large Darn Initiative. Tropica Environmental Consultants Ltd., a private consulting firm in Dakar, Senegal, that has coordinat- David Iverach is director of the Nam Theun Two ed and assessed activities funded by the World Bank Electricity Consortium (NTEC), an organization con- and U.S. Agency for International Development relat- sisting of five international companies involved in the ing to dams and other water resource projects in ownership, construction, operation and financing of West Africa. He has been involved in health issues, this hydroelectric project. Mr. Iverach is responsible such as water-disease control, and environmental for the preparation of the environmental assessment impact assessments. More recently, Mr. Diop has and management plan, the resettlement action plan addressed resettlement issues. and compliance with World Bank operational direc- tives. Tony Dorcey is a professor in the School of Community and Regional Planning and the Institute E.AK Kalitsi is chief executive of the Volta River for Resources and Environment at the University of Authority (VRA), a statutory organization created by British Columbia in Vancouver, Canada. His teaching the Ghanaian government and responsible for the and research has focused on collaborative approach- construction of the Akosombo and Kpong Dams. Mr. es to water resources and river basin management. Kalitsi is in charge of the direction and management Mr. Dorcey, who also has served as chair of the of the VRA. He was responsible for planning and Fraser Basin Management Board, a multi-stakeholder administration of the resettlement program of 80,000 governing board that pursues environmental, eco- persons displaced by the reservoir, and for providing nomic and social sustainability in the Fraser Basin, health and social services to them. Mr. Kalitsi has served as facilitator for the Large Dam Workshop. also served as managing director of Ghana's main power distribution agency, Electricity Corporation of Steve Fisher is manager of operations at Ghana. Intermediate Technology Development Group, an international NGO, located in the United Kingdom, Andreas liebenthal is principal evaluations offi- that works to increase technology choice for rural cer in the Infrastructure and Energy Division of the communities in developing countries. Mr. Fisher is Operations Evaluation Department, an independent responsible for overall direction and day-to-day man- evaluation unit of the World Bank. Mr. Liebenthal is agement of U.K. contributions to field projects, espe- responsible for the evaluation of energy and environ- cially in the area of energy. Mr. Fisher has recently mental projects. He prepared the report "The World been involved in providing support to the Quaker ini- Bank's Experience with Large Dams: A Preliminary tiative to promote constructive discussion of Review of Impacts." Mr. Liebenthal has also been hydropower development. involved in the appraisal and supervision of the World Bank-financed Shuiko hydropower project in China, Robert Goodland is an environmental advisor for and the Saguling and Cirata projects in Indonesia. the World Bank. Mr. Goodlarnd has worked on the World Bank's environmental impact assessments on Richard Meagher is chairman and chief execu- many large dams worldwide, including Itaipu, Three tive officer of Hazra Engineering Company, an inter- Gorges, Arun and Nam Theun. He has also served national consulting firm of engineers and scientists as Independent Commissioner on the inquiry for specializing in the development of water resources Canada's Great Whale Hydro Project in James Bay. for conservation, electric power, irrigation, land recla- mation, flood control, water supply and pollution George Greene is assistant director general of abatement, located in Chicago, Illinois. Mr. IUCN. Mr. Greene is responsible for the develop- Meagher, who began his career with Hazra, has been ment of IUCN's regional and c ountry offices, as well involved in such projects as the 10,000-M\W Guri as furthering cooperation with other international Hydroelectric Project in Venezuela and the 1,000-MW organizations and the private sector. He has also Karun River Project in Iran. served as director general of policy development at the Canadian International Development Agency. Mr. Greene has led the IUCN team in the development of 142 Appendix C LARGE DAMS: Learning from the Past, Looking at the Future Patrick McCully is campaigns director of resolve the social and environmental problems International Rivers Network, a nonprofit organiza- caused by large dams. tion based in Berkeley, California, that is committed to reversing the social, environmental and economic Engelbertus Oud is head of the Water, Power damage caused by large dams and other internation- and Land Development Department of Lahmeyer ally funded large-scale river development projects. International GMBH (LI), the largest German con- Mr. McCully, who is closely involved in monitoring sulting engineering company that specializes in international involvement in a number of dam pro- power, water, transport, environment and project jects around the world, is the author of Silenced management for large infrastructure projects. Mr. Rivers: The Ecologv and Politics of Large Dams. Oud, who has been team leader of several hydropow- er development studies, is currently the project man- Jeff McNeely is coordinator of the Biodiversity ager of the study of alternatives for the 680-MW Nam Policy Program and chief scientist at IUCN. In addi- Theun Two hydropower project in the Lao PDR. tion to advising the director-general of IUCN on sci- ence policy, Mr. McNeely promotes the integration of Bikash Pandey is co-founder and coordinator of biodiversity considerations in sectoral development the Alliance for Energy, an advocacy group based in activities. He has also worked on irrigation issues in Katmandu established in 1993 to promote a wider Indonesia and in the Lower Mekong Basin and Sri public debate on the development of hydropower in Lanka on the design of habitat-protected areas in con- Nepal. The organization successfully challenged junction with water resources development pro- donors' support for the Arun III project. Mr. Pandey, grams. who also currently studies at the Energy and Resources Group at University of California at Kathryn McPhail is the senior social scientist in Berkeley, has worked to promote micro and mini the Environment Department at the World Bank. hydro systems to rural communities. She provides support to governments, private-sector clients, regional colleagues in IBRD, IFC and MIGA Elias Diaz Peiia is coordinator of the on social assessments and public consultation for Environmental Sector at SOBREVIVENCIA: Friends environmental assessments. Ms. McPhail has of the Earth, Paraguay, a nonprofit organization dedi- worked on social impacts of dams in India, Thailand, cated to the support of native communities for the Ghana and most recently on Nepal Arun and Lao restoration and conservation of the quality of their PDR Nam Theun Two. She was task manager for the environment. Mr. Pefia, having originally worked as 1993 OED study "Early Experience with Involuntary a consultant in the hydrologic studies and design of Resettlement." mitigation plans for the Yacyreta Hydroelectric Project, now coordinates the monitoring of the social Reatile Mochebelele is chief delegate leading the and environmental problems created by the project. Lesotho delegation to the Joint Permanent Technical Commission, a joint organization of the Lesotho and Thomas Philippe is project manager in the South African governments responsible for the over- International Division of the Electricite de France sight of the Lesotho Highlands Water Project. Mr. (EDF), the largest generator of hydroelectric energy Mochebelele participates in the monitoring and in Europe. Mr. Philippe is responsible for all of approval functions of the Commission over its two EDF's international project activities. He is currently implementing agencies. He has focused in particular the EDF Project Manager for the Nam Theun Two on water resources and other environmental issues. hydro project in Lao PDR. Ricardo Luis Montagner is founder and execu- Robert Picciotto is director general of tive coordinator of Movimento dos Atingidos por Operations Evaluation at the World Bank. Mr. Barragens (MAB), a social movement based in Sao Picciotto oversees the OED and reports to the World Paolo, Brazil, and organized by citizens who have suf- Bank's board of directors. Additionally, he has super- fered from the social and environmental impacts of vised several major recent OED studies on dam-relat- large dams. Mr. Montagner strives to win legal ed issues, including 'The World Bank's Experience rights for displaced people and works with families to with Large Dams: A Preliminary Review of Impacts" Appendix C 143 LARGE DAMS: Learning from the Past, Looking at the Future (1996). In previous positions at the Bank, Mr. Andrew Steer is director of the Environment Picciotto has been involved with dam-related projects Department at the World Bank. He leads the World and policies in South Asia, Europe/North Africa and Bank's efforts to assist its member countries in Latin America and the Caribbean. addressing environmental problems as well as social policy and resettlement. Mr. Steer, wh1o has worked Jean Yves Pirot is the coordinator of the on economic and natural resource policy issues in Ecosystem Management Group at the World Nigeria, Thailand, Bangladesh and Indonesia, was the Conservation Union (IUCN). Mr. Pirot coordinates principal author of the World Bank's annual World IUCN's efforts to promote an integrated approach to Development Report for 1992, "Development and the ecosystem management. While at IUCN, he has Environment." Most recently, he co-authored developed a portfolio of activities relating to flood Making Development Sustainable-From Concepts plain management and restoration, including the miti- to Action with Ismail Serageldin. gation of impacts of dam construction the Senegal and Chad basins. Achim Steiner is senior policy advisor for the Global Policy and Partnership Unit at IUCN in the Martyn Riddle is manager of the Environment Washington, D.C., office. His principal task is the Department at the International Finance Corporation, coordination of IUCN's policy dialogue and strategic the private-sector financing arm of the World Bank partnerships with the World Bank, UNDP and the Group. He is responsible for the review and, if appro- Global Environment Facility. He also provides sup- priate, clearance of all IFC projects in order to ensure port to a range of international NGO networks. Mr. compliance with World Bank policies and guidelines. Steiner has been involved in environmental and eco- He is also in charge of monitoring approved projects nomic development policy and programs in South during implementation. Mr. Riddle previously has Asia and southern Africa. He has coordinated the been involved in preparing EiAs for several large joint IUCN-World Bank Initiative on Large Dams. dam projects. Richard Stern is the Director of th[e Industry and Thayer Scudder is professor of anthropology and Energy Department at the World Bank, responsible a co-founder of the Institute of Development for the Bank's overall energy policy. H'e is also Anthropology at the California Institute of Manager of the Energy Sector Management Technology. Mr. Scudder has researched the socio- Assistance Program (ESMAP), a joint technical assis- economic impacts of large dams and river basin tance consortium that includes about 15 public and development projects on project-affected people with- private donors. Mr. Stern has served as Chief of the in reservoir basins and below dams in many parts of China Industry and Energy Division at the World the world. He has also served as a consultant on Bank, and has worked for UNDP in Ethiopia and the large dam and river basin development projects in Institute of Development Studies in the United North America, Africa, the Middle East and Asia. Kingdom. Aly Shady is president of the International Jan Stromblad is Senior Vice President of Commission on Irrigation and Drainage, an organiza- Environmental Affairs at ABB, a global energy firm tion composed of 86 country members whose mis- involved in all types of power generation, including sion is to promote the development of techniques in hydroelectric plants and power transmission. Mr. managing water and land resources for irrigation, Stromblad is responsible for the coordination of drainage and flood control. Mr. Shady, who has ABB's environmental management programs in 43 worked as an academic, consultant and public official, countries. He has participated in the planning and is also currently a senior advisor to the Canadian implementation of environmental management sys- International Development Agency. He is author of tems in several hydroelectric projects, including the the recently published textbook Management and Bakun Hydroelectric Power Project in Sarawak, East Development of Maior Rivers. Malaysia. Theo Van Robbroeck is President of the International Commission on Large Dams, a non-gov- 144 Appendix C LARGE DAMS: Learning from the Past, Looking at the Future ernmental international organization that provides a tion of the Tarbela dam just seven kilometers away. forum for the exchange of knowledge and experience Working with community-based organizations, Ms. in dam engineering. Mr. Van Robbroeck is responsi- Zaman lobbies the government and World Bank and ble for the affairs of the Commission as it ensures monitors the project through an eight-member NGO that dams are built safely, efficiently, economically standing committee. and without detrimental effects on the environment. He previously served as Deputy Director General in Robert Zwahlen is the senior environmental advi- the Department of Water Affairs in the Republic of sor at Electrowatt Engineering Ltd. (EWE), a compa- South Africa. ny of consulting engineers with core business in energy, water management, transportation, and con- Pietro Veglio is Advisor to the Swiss Executive struction planning. EWE, located in Zurich, Director at the World Bank. Mr. Veglio is responsible Switzerland, has been involved in more than 100 for assessing Bank operations, and, in particular, large dams worldwide. Mr. Zwahlen is responsible for environmental and energy issues and resettlement. coordinating and conducting environmental impact He has actively participated in the internal discus- statements, mainly for water resource development sions on the World Bank report on resettlement and projects. He has also recently published on human the OED report on large dams. Mr. Veglio has also resettlement and environmental issues. visited World Bank projects involving large dams and resettlement, including National Thermal Power Ltd. in Gingrouli, India. Martin ter Woort is senior manager of develop- ment planning at Acres International Limited, a Canada-based international consulting company involved in the planning, engineering and project management of hydroelectric and water resource developments. Mr. Woort has been responsible for directing the resettlement and socio-environmental studies associated with hydropower development in China, Lao PDR, Nepal, Panama and Thailand. He is also actively involved in advising governments on resettlement policy. Tanlin Yuan is deputy director general of the Office of Foreign Investment Management in the Ministry of Water Resources of the People's Republic of China. Mr. Yuan is responsible for the evaluation and management of foreign-financed dam projects in China. He has been involved in the planning, design, construction and administration of a number of hydro projects in China, including the Three Gorges Dam Project and the Xiaolangdi Dam Project. Mishka Zaman is program coordinator at the SUNGI Development Foundation, a nonprofit organi- zation, located in Pakistan, that has worked on dam displacement since 1991. Ms. Zaman is responsible for SUNGI's campaign on the Ghazi-Barotha Hydropower Project, whose planned construction threatens to displace 120,000 people already resettled once before in the 1970s, as a result of the construc- Appendix C 145 IUCN U The World Conservation Union The World Bank Large dams have been a subject of growing international debate and controversy. They have played a key role in economic development, meeting a variety of purposes, including electricity generation, flood control and irrigation. Yet their adverse environmental, social and even economic impacts are increasingly noted. In 1996 the World Bank Operations Evaluation Department completed an internal review of 50 large dams funded by the World Bank. IUCN-The World Conservation Union and the World Bank agreed to jointly host a workshop in April 1997 to dis- cuss the findings of the review and their implications for a more in-depth study. The workshop broke new ground by bringing together representatives from governments, the private sector, international financial institutions and civil society organizations to address three issues: m Critical advances needed in knowledge and practice * Methodologies and apprcaches required to achieve these advances m Proposals for a follow-up process involving all stakeholders Two days of working together achieved a remarkable consensus on how to move forward. Most notably, agree- ment was reached for IUCN and the World Bank to facilitate the establishment a two-year international commis- sion by November 1997. Its mandate is to review the development effectiveness of dams and to develop standards, criteria and guidelines to advise future decision-making. Part I of these proceedings summarizes the workshop discussion and recommendations for future action. Part II contains a series of overview papers comrmissioned for the workshop on four key topics: engineering and economics, social and stakeholder issues, environmental sus- tainability, and future challe.nges facing the hydro industry. Published with financial support from the Swiss Agency for Development and Cooperation. tt00.S~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 4 0 20,-> [UCN-The World Conservation Union The NVorld Bank Rue Mauverney 28 1818 H Street, NW 0 CH-1196 Gland ashington, D.C. 9 780821340288 Switzerland USA