Caixin reporter in Cambodia

August 31, 2011

Inviting Chinese reporters to Cambodia (and Laos) so they get first-hand experience of issues related to dam construction is an approach that was pioneered, I think, by the American Friends Service Committee, but seems to be increasingly popular. Zhang Hong, the London-based Europe reporter for the Caixin financial news website a long and thoughtful post on her blog about a visit, arranged by the NGO 3SPN, to the villages in Ratanakiri Province that is the site of a planned dam on the Srepok River, to be built by an affiliate of Datang. (Here is an abbreviated English translation of her post.)

To her surprise, villagers said they wanted “no electricity, no dam, no compensation.” Apparently it wasn’t, as she had expected, a matter of appropriate consultation, mitigation, and compensation. No: these villagers really didn’t want development.

Was it something that “extremist” NGOs convinced them of — as one of her Cambodian interlocutors suggested? A result of insufficient information and knowledge on the benefits of electricity? Or is it really that these villagers think differently from their peers in China? “I am very curious why ‘development is the hard truth’ has penetrated human hearts so deeply in China … but it doesn’t work in these Southeast Asian countries.” Doesn’t it? If it doesn’t, why? This is indeed the crucial question.

As if confirming her point, the Chinese comments on her blog unanimously defend Deng Xiaoping’s dictum “development is the hard truth.”

Opposition to Chinese dams in northern Burma escalates

May 21, 2011

As Thomas Maung Shwe writes on the Shan exile news website Mizzima, a letter in which the Kachin Independence Organization (KIO) warns PRC Chairman Hu Jintao that constructing the Myitsone Dam in northern Burma could lead to civil war signals an escalation of public opposition to the the largest Chinese hydropower project abroad. The article says that “while the KIO has previously opposed the Myitsone Dam, the language contained in Lanyaw Zawng Hra’s letter to the Chinese president is unprecedented in its criticism of the project.”

The series of dams in northern Burma (see News, 10 February 2011 and 4 March 2010) is a project that exceeds China’s Three Gorges, and is opposed by environmental and human-rights groups. KIO, which has maintained relations with the Chinese government, says it will not allow the Burmese army into its territory despite an announcement by the junta that it will begin “necessary procedures” at the project location. As Kevin Woods has argued, Chinese investments in northern Burma serve to strengthen the military state, which has already eliminated the de facto autonomy of Kokang, one of the four “special zones” (another is run by the KIO). It  may mean the death knell for the KIO as anything other than a guerrilla force, unless it is willing to be incorporated into the new developmentalism as a subordinate partner.

The KIO letter reiterates that it is open to negotiations over dam construction, but is concerned about massive relocations resulting from the current plan and the fact that one of the sites is near its command centre. The National League for Democracy, Aung San Suu Kyi’s party, has also expressed opposition to the dam.

Meanwhile, Burma Rivers Network reports that the Burmese junta ordered the relocation of 8,000 people from the site of the hydropower project 50 km southeast of Naypyidaw, being built by a consortium that is headed by a Swiss company called Af Colenco and includes a British company called Malcom Dunstan & Associates and Yunnan Machinery Export-Import Company. This project, which started in 2004, is a further signal of the return of Western investors — benefiting from Chinese labour — to dam building.

Gezhouba Group on overseas CSR

April 20, 2011

In an exercise that is becoming increasingly common in China, Gezhouba Group, one of the major hydropower contractors in Southeast Asia and Africa, has released its 2010 corporate social responsibility report. Chapter 6 of the report is entitled “Overseas CSR.”

The report singles out Gezhouba’s second place in CCTV and the China-Africa Friendship Association’s China-Africa Friendship Award contest (see News, 22 December 2010) as proof of its social engagement. Going into detail — the section is about half a page long — the report first states that the construction of hydropower stations and roads contributes to the recipient countries’ economic development, and that Gezhouba “actively pays all kinds of tax” and “enthusiastically accepts the supervision of recipient countries’  tax and audit authorities.” In other words, its major CSR achievement is its core activity itself, and the fact that it conducts it lawfully.

Next, the report states that Gezhouba has provided 10,300 local jobs Not an insignificant number, but not very high either considering the number of countries and the fact that most jobs are unskilled.

Next, the report contains details of what it calls “participating in charity building” 参加公益建设. These include drilling four wells in Malabo, the capital of Equatorial Guinea and donating cash, as well as Lenovo computers and writing implements to schools and orphanages in Kashmir, Ethiopia, and Libya. The most surprising item is a donation of 10 million kip (about 850 euro) to the Lao ministry of energy and mines.

Hydropower company reports on impact assessment experience

December 31, 2010

China International Water & Electric Corp., an operator of BOOT hydroelectric projects abroad, posted an account of what it calls its “Nam Lik model” of corporate social responsibility, developed at the Nam Lik hydropower plant in north central Laos. The report describes CSR as not only including contributing to solving “local labour and resource issues,” i.e. creating jobs and economic growth, but also “charitable behaviour such as helping people in backward areas develop education, social welfare and health care, … gradually develop social activities, and to gain a publicity effect through charitable activities, improving the corporate image and consumers’ approval rating.”  

The specific activities undertaken under the CSR label are nonetheless probably not quite what Western critics have in mind. In the case of Nam Lik 2, they included setting up an environmental protection office, making a donation towards the ASEAN Games held inVientiane in 2009, building a primary school and giving villagers cash handouts.

The description of the environmental impact assessment (EIA) process suggests a model focused on government approval rather than independent evaluation.

First we conducted a census of the population, property, and housing in the village and took photographs. The first draft report was sent to the Lao environmental protection authorities; then the provincial government dispatched county officials for an inspection; after revising the EIA, it was returned to the provincial authorities for discussion … after approval by a special conference at the provincial level, it was sent to the central environmental office. … The main objective of the above was to prepare for offering villagers resettlement compensation and house reconstruction funds.

It is unlikely that provincial, let alone county officials would have enough power to object to the results of an EIA, even if they wanted to. In any case, the only issue at stake was the amount of compensation for villagers. This is perhaps a step forward compared to the reputation of Chinese companies for ignoring EIA and social impact assessment altogether, but perhaps not quite “corporate citizenship” yet.

People’s Daily cites Burmese dam opponents

December 31, 2010

A recent article in People’s Daily‘s popular-nationalistic offshot, the Chinese-language Global Times, cites concerns by the Shan Women’s Movement and another Bangkok-based Shan exile organisation about the dams built by China on the Mekong. These dams have been the focus of sustained concern in the downstream Mekong countries in the past two years, and blamed for a bad drought. So far the Chinese government has rejected the blame, but as of this year it has begun providing more complete hydrological data to the Mekong River Commission. Prominent Chinese public intellectual Qin Hui, who considers the accusations in China’s address exaggerated, has repeatedly called on the government to give up ignoring the concerns and enter into a reasoned discussion.

Although this article goes on to say that “many” consider these Shan organisations a front for Western interests and to cite Chinese “experts” who reject their allegations, it is nonetheless remarkable that these exile groups are given voice in the mainstream Chinese press in the first place, and described as “Burmese NGOs”. This might signal a shift in China’s relations to the Burmese government; greater concern with the fallout from controversial megaprojects (as already manifested in the rhetoric used in Africa), or else a shift in the relationship between Peking and Yunnan Province in relation to the border areas. (Yunnan has been keen on pursuing economic interests while the central government has been more sensitive to the political consequences, although so far this has mainly meant that Peking refused to talk to border-area ethnic organisations that oppose the Burmese junta.

Highlights of final Rising Powers workshop

November 26, 2010

The last of a series of three workshops on China’s engagement in low-income countries under the UK Economic and Social Research Council’s Rising Powers research network programme is about to conclude at the Institute of Development Studies at the University of Sussex in Brighton. This workshop focused on environmental issues. Topics included carbon emissions trading and China’s participation in environmental governance, as well as more down-to-earth issues such as dams and land leases. Some highlights:

Data shown by Yahia Mahmoud (Lund University) suggest that Chinese companies are second only to Korea in the area of land leases, but that most of these leases are in the Philippines. Andreas Wilkes of the International Forestry Research Council cited a figure of 6 million ha leased by Chinese forestry and agricultural companies in Africa, and talked about research conducted at the institute by Cerutti et al. that concluded that European forestry companies not certified for sustainability engage in practices quite similar to Chinese companies, and that locals often felt that their livelihoods were better under non-certified forestry regimes. I raised the point that the different types of new civil initiatives that are emerging in China concerning the environmental impact of China’s overseas engagement — organisations with direct overseas contacts but also looser formations like Minjian International that provide a discussion platform — would be an interesting subject for research.

The workshop were intended to result in the elaboration of cooperative research proposals.

Chinese newspaper on Gibe 3 dam

June 30, 2010

A long opinion piece in the 30 June issue of Di-Yi Caijing Ribao (First Financial Daily) by Zhang Ke describes the controversy around the Gibe 3 dam in Ethiopia, which the Industrial and Commercial Bank of China (ICBC), according to reports, agreed to finance. The article describes the opposition of environemntal and local human rights groups, with several quotes from Peter Bosshard (policy director of International Rivers who has been actively lobbying Chinese companies and banks), and then quotes an ICBC official as denying that the financing has been committed and stating that ICBC will not finance any environmentally damaging projects, either inside or outside China.

The author then refers to a 21 May article in People’s Daily 《尼罗河水资源纷争再起 上下游国家矛盾加剧》, which suggests that Ethiopia’s efforts at becoming a regional hydropower exporter are likely to generate conflict with downstream countries on the Nile. It further quotes at length 2008 and 2009 reports, respectively by a coalition of Chinese environmental organisations on the environmental performance of major Chinese banks, and by the school of environmental planning attached to the Ministry of the Environment on the environmental performance of Chinese projects overseas. The general tone is that there are improvements, but more progress is needed. The opinions of foreign NGOs, Chinese organisations, banks and governments are described in a non-confrontational way.

It is hard to say to what extent International Rivers’ lobbying has impacted this discursive shift, but the shift is very marked even compared to 2-3 years ago.

World Bank’s former senior water adviser praises China’s role in dam building

May 28, 2010

On China Dialogue, the English-Chinese dialogue platform on the environment, John Briscoe, a professor of environmental engineering at
Harvard University and the World Bank’s former senior water adviser, slams the World Bank’s reluctance to provide loans for infrastructure and “modern agriculture” since the 1990s and calls it “a faddish policy approach, constantly inventing new ‘flavours of the month'” adopted under the pressure of rich-country NGOs.

The bank’s lending for cheap, renewable hydropower, for example, fell by 90% over the course of the 1990s, while lending for agriculture has dropped by 75% over the past 25 years.

Briscoe identifies as the main culprit the International Development Association (IDA), which “has become the tail that wags the IBRD [International Bank for Reconstruction and Development] dog.” Indirectly, Briscoe identifies its “faddish policy approach” with the Clinton Democrats.

A silver lining to this dark cloud is that the MICs [middle-income countries] are now partially filling the gap left by the World Bank and others. In recent years, the World Bank has only financed two major dams in the developing world, but
China now finances over 200 such projects in Africa and Asia. This is a great service to the developing world. It would be even greater if China were to export not only its superb construction capabilities but also its world-leading capability in the sensitive area of resettlement. (To the surprise of many, the World Bank’s Independent Evaluation Group and others have shown that China has by far the best record in the developing world
in resettling those who are relocated by large dams.)

 Briscoe ends by calling for a reform of the World Bank that includes

a major overhaul of the suffocating plethora of rules, or “safeguards”, which have been put in place over the last 20 years … dismantling of the groups of staff who live off the transaction costs imposed by each of these rules. … More broadly the MICs should use their new-found clout to force the World Bank culture to change from one in which managers
and staff are pre-occupied with sins of commission, which are punished severely, and sins of omission are ignored.

Responding to Briscoe, International Rivers director Peter Bosshard retorts that if, “after a balanced assessment process, a dam appears to be the best
option, it should be built with precautions that reflect the lessons of
past experience. If indeed poor countries still have a large hydropower
potential to exploit, then they can afford to be discerning.” He notes that the “Chinese government is pragmatic and quick to learn from mistakes – its
own and those of others” and argues for sustained engagement with Chinese companies and the Chinese government towards the end of better environmental practices.


Phoenix Weekly on Chinese investment in the Mekong region

April 17, 2010

After the disappointing Ming Pao story I blogged about earlier, Phoenix Weekly, the Rupert Murdoch outlet not known for a penchant for independent reporting, came out with a quite balanced feature on Chinese investment in Laos, Cambodia and Burma. The article, much of it reads like the more balanced of Western media coverage of the subject, takes its cue from the ubiquitous Qin Hui, who says that Chinese companies and individuals must “respect local civil society and rights [and] don’t play the games they are used to from home” if they are to play a constructive role in the region. The author starts with the example of the real estate development on Phnom Penh’s Boeung Kak Lake by a shadowy company that has been linked to a state enterprise from Yunnan province. Both environmentalists and 4,000 local residents facing resettlement who are dissatisfied with the compensation offered have tried in vain to contact the company, and the Chinese embassy refused to reply to inquiries as to whether the investment was indeed from China. (The Cambodian Development Council’s data do not list it as such.) Similarly, a Chinese company building a hydropower project in Koh Kong province apparently promised that it would build a school, a water reservoir and a road for local villagers, but the promise failed to materialise and the contractor refuses to accept responsibility. At this site, 200 out of the 500 workers are Chinese, while others tend to be migrant labourers from other parts of Cambodia, employed only for simple physical labour and getting $5-8 a day, which while a high wage for Cambodia is much lower than the 5-6 thousand yuan (around $1000) a month the Chinese workers make (suggesting, incidentally, that these workers are not, or no longer, as cheap as they have been believed to be.) These cases, the article comments, compare  unfavourably to the behaviour of investors from other countries. While  Chinese managers are quoted in the article, this part of the coverage relies mostly on local NGOs and Western-run media such as the highly critical Phnom Penh Post, generally in a sympathetic way.

The article also diverges from the usual triumphalims in pointing out that the success of Chinese companies in securing infrastructural investment has been enabled by the retreat of international lenders from most dam and mining projects. In Laos, donors and lenders have reconsidered their inititial support in 1999. In part, the article comments, this was to avoid projects that were vulnerable to NGO criticism, but in part it was caused by the steep rise in costs that these projects entailed after they were required to conduct stringent environmental and social assessments and ensure that their construction follows a sustainable strategy. Chinese companies are not subject to these strictures and enjoy access to politically facilitated capital, but as Qin Hui points out, they too are encountering difficulties: in Laos (and in northern Thailand) resistance to projects on the Mekong mainstream is such that Chinese companies can only count on building smaller dams on corollary rivers, while the capacity and profitability of hydropower projects in Cambodia (where Chinese companies have achieved a near-hegemony on the market) is limited. This leaves Burma, where political risk is the highest.

The article ends with what now seems a “politically correct” view in Chinese policy circles: the fuss kicked up by Western media about China’s “resource imperialism” is politically motivated, but this does not mean that Chinese companies’ actions are beyond reproach. Indeed, the author warns, while Chinese loans and aid are an attractive alternative to the strings-attached World Bank packages, a windfall of resource revenues under non-transparent conditions in badly governed countries will increase corruption, and locals might “mistakenly” blame it, as well as environmental damage and rapid social change is, on Chinese investors or even China itself.  A conclusion that could have been written by Sarah Raine or another Western analyst.

Elsewhere in Phoenix Weekly, Qin Hui wrote approvingly that in Laos, the feasibility studies companies must supply for the government approval of their projects include showing a positive or at least neutral impact for local residents and the advanced settlement of land acquisition issues — rather than, as in China, merely showing that the project will be good for the country and expecting that the government will then take care of land settlements. This is part of a long and decidedly un-academic Laos travelogue, observant in parts and simplistic in others, but generally written on a note of positive feelings for a country that does not seem to embrace high-speed development but appears to offer its people a considerable measure of existential security and community pride. (I am paraphrasing Qin here.)

In yet another article, written for Jingji Guanchabao (Economic Observer) but republished on the website of Qiushi, traditionally the Communist Party’s conservative journal for “Marxist theory,” Qin writes about disputes over dams on the Mekong within China. His point here is while the dams have varying and often effects on downstream countries — for example, if they cause drought in Laos they will likely prevent flooding in Cambodia — nobody there seems ever to thank China for the positive effects, while blaming it automatically for the negative ones. This, he says, is because the Chinese government refuses to acknowledge that it has any responsibility for whatever happens downstream. His advice to the government: be open with downstream NGOs, and then you can take credit for some of the positive outcomes.

Korean newspaper on Chinese companies in Laos

March 26, 2010

On 10 February, Global Times, the popular offshoot of People’s Daily, published an article purportedly from a Korean newspaper, Hankuk Kyonggi. The article  claims that there are now 800 thousand Chinese (Zhongguoren) in Laos and quotes Korean entrepreneurs who complain that despite all their efforts at obtaining contracts such as for hydropower stations, and attribute the sucess of Chinese companies to the successful diplomacy of the Chinese government.

Korean companies in Laos and Cambodia have been heavily involved in real estate development and have obtained a large land concession for a golf course outside Luang Prabang. Although many Lao NGO activists I spoke to describe the methods of Korean companies as similar to their Chinese counterparts, these have not aroused the ccontroversy that Chinese projects have.