In a second, but much larger setback — or sign of a policy change? — following the announcement of Southern Grid’s withdrawal from Cambodia, the Burmese president has announced the stopping of the construction of Myitsone Dam, the largest planned dam in Southeast Asia and the largest Chinese hydropower project abroad, which has been the source of armed conflict in northeastern Burma. Environmental organisations and ethnic ceasefire armies, as well as the Burmese democratic opposition, have opposed the project.
Although other Chinese dam plans in northern Burma are going ahead, there are signs that the Chinese government (or some of its agencies) is once again demonstrating sensitivity to criticism and political risk. I have written about how existing Chinese criticisms of the wastefulness and lack of foresight in Chinese investments abroad, probably already embraced by the Development and Reform Council, were amplified after the loss of projects due to the ouster of Gadhafi in Libya. Since then, several high-level government officials called for better risk assessment before projects go ahead.
Days before the Burmese announcement, a Chinese trade publication called 中国能源报 (Chinese Energy) published a remarkable interview with Peter Bosshard, director of International Rivers and one of the main campaigners against the Myitsone dam. The interview, which was then posted on the People’s Daily website, was occasioned by the IPO of Sinohydro on several stock exchanges. The IPO was more limited than originally planned due to delays in a number of contracts. Even so, it is extraordinary that a publication subordinate to the Ministry of Energy would publish a critical article featuring a foreign activist instead of celebrating the success of the IPO. (In the article, very unusually, only Bosshard’s Chinese name is used, so that readers may be unaware that he is a foreigner. Citing foreign critics in such contexts is routinely associated with hostility to China.) Such an act almost certainly signals a policy shift on the part of the ministry, which must already have known, and probably been consulted on, the Burmese decision.
The article mentions that International Rivers has consulted Sinohydro repeatedly, and cites Bosshard as saying that the company has now agreed to refuse projects that are seriously damaging to the environment or local society, including any project in a World Heritage area or national park; that it will enter into dialogue with local “communities” before carrying out a project; that it will set up a complaint mechanism; and that it will implement World Bank social and environmental impact assessment guidelines as a minimum standard.
But these measures are explained in terms of managing risk, rather than as ends in themselves. Bosshard is quoted as saying that they are necessary if Chinese companies are to solve “problems of reputation and control.” There is no doubt that International Rivers’ willingness to adopt such language instead of that of radical environmentalism that has given it unprecedented access to Chinese hydropower companies and state media.