Thursday, November 29, 2012

MofCom CSR guidelines for China's international contracting industry

Ministry of Commerce
People's Republic of China

The First Guidance on Social Responsibility of China's International
Project Contracting Industry Officially Released
Saturday,September 29,2012

On September 28, the first Guidance on Social Responsibility of China's
International Project Contracting Industry (the "Guidance") was
officially released. Prepared by China International Contractors
Association under the direction of the Ministry of Commerce, the
Guidance is the first standard for voluntary social responsibility of
the international project contracting industry.

In recent years, China's international project contracting industry has
developed fast into a key stage of transforming development pattern and
pursuing business upgrading. While continuously improving the quality
and level of operation, enterprises are also faced with the internal
requirement of uplifting such "soft strength" as social responsibility.
In order to further regulate overseas operation behaviors of
international project contracting enterprises and impel them to actively
perform their social responsibilities, China International Contractors
Association prepared the Guidance under the direction of the Ministry of
Commerce, which, focusing on seven issues including quality safety,
employee development, owners' equity, supply chain management, fair
competition, environmental protection and community development, puts
forward specific work requirements for enterprises to perform their
social responsibilities and makes clear key points of social
responsibility management. The Guidance provides referable behavioral
framework for international project contracting enterprises with
reference to such standard international practices as the United Nations
Global Compact and ISO 26000 Guide and based on the current business
situation of China's project contracting industry.

The national release of the Guidance will be helpful for the competent
departments of commerce at various regions and all enterprises to
improve the understanding of the enterprises' social responsibility. In
the future, China International Contractors Association will continue to
collect the social responsibility reports and relevant cases from
various enterprises and release them on a regular basis after compilation.

[Note: The new Guidelines are available at The English
language version begins at p. 30.]

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Wednesday, November 28, 2012

Report: World's River running dry

World's rivers running on empty, paper finds
November 26, 2012

(—Four of the world's great rivers, including the Murray Darling, are all suffering from drastically reduced flows as a direct result of water extraction, according to new ANU research. 

The multi-author study – led by ANU researchers Professor Quentin Grafton, Dr Jamie Pittock, Professor Tom Kompas and Dr Daniel Connell of the Crawford School of Public Policy at The Australian National University – examined the threats from water extractions and climate change on four of the world's iconic river systems; the US Colorado River, the South African Orange River, the Chinese Yellow River and the Murray.

The researchers found that in all four basins, over a long period of time, outflows have greatly reduced as a direct result of increased water extractions, and that urgent changes in governance of water are needed to ensure the systems remain healthy and viable.

"While climate change will aggravate changes in flows in river systems, current high levels of water extractions remain the principal contributor to reduced flows and degradation of these rivers," said Dr Pittock.

"Changes in governance, including sharing the variability between the environment and consumptive users, are urgently required if the health of these rivers is to be maintained," added Dr Connell.

The researchers said that the key to securing the future of the world's rivers lies in plans to share water use between users and the environment, and water markets to manage allocations. They added that, although the management of the Murray Darling Basin was favourable when compared to other places in the world, there was much more that could be done to ensure a healthy future for the system.

"Many sound frameworks are being established in water management throughout the world, but in many cases their implementation needs to be greatly improved," said Professor Kompas.

"Stronger action is needed to ensure that in dry times, the rivers get a fair share of the available water," said Dr Pittock.

The work was conducted with researchers from the University of Queensland, the University of Canberra and international collaborators from universities in the USA, China, and South Africa.

The paper, "Global insights into water resources, climate change and governance," is published today in Nature Climate Change.

Journal reference: Nature Climate Change

Provided by Australian National University

Parineeta Deshpande-Dandekar
South Asia Network on Dams, Rivers and People (SANDRP)
+91 9860030742

Tuesday, November 27, 2012

China in Burma: wooing old customers anew

Wooing old customers anew
Global Times | Yu Jincui in Monywa
Published on November 27, 2012

After a bumpy four-hour drive west from Mandalay, Myanmar's
second-largest city, we landed at the Letpadaung copper mine of the
Monywa copper mining area in the country's northern Sagaing division. As
the mine is under construction, the usually noisy work sites were
abnormally quiet.

The project, jointly developed by China's State-owned enterprise Wanbao
Mining Ltd and its partner, the Union of Myanmar Economic Holdings Ltd
(UMEHL), has come under fire over the past few months.

Some local villagers, with the help of activists and some opposition
parties, have staged several rounds of protests against the project
since June, accusing the mining company of illegally acquiring land and
polluting the environment.

With a total investment of $1.07 billion, the joint development of the
Letpadaung copper mine by Wanbao and UMEHL was approved by the Myanmar
government in 2010. It is scheduled to enter operation in June 2013.
However, the protests have disrupted construction plans.

Protests continue to surge

Construction of the Letpadaung mine, an expansion of the Monywa complex,
covering an area of 7,877 acres, called for the relocation of 442
households from four villages, stipulating land compensation for
residents of 26 villages nearby.

On November 19, another large-scale protest was held against the
backdrop of US President Barack Obama's visit to Yangon. According to
the local Irrawaddy newspaper, the 1,000 protesters included villagers,
students and monks. There were also student activists and protesters
holding signs demanding an end to the mine project outside Yangon
University, where Obama gave a speech during his visit.

The locals are mainly complaining about inadequate compensation and
worrying the project would pollute water, cause health problems and
destroy religious heritage, Soe Sandar Oo, a reporter with the
Yangon-based Myanmar Times, told the Global Times.

Min Zeya, secretary of the 88 Generation Students Group, which actively
helped to organize the protests, told the Global Times that "those
villagers who have agreed to move did so mainly out of fear. Those
protesters are clamoring against the unfairness linked to the project.
There is a great divergence between the villagers and the companies over
compensation. They cannot gain reasonable and legal compensation for the
confiscated land. There is a non-transparent standard at work here."

According to Deng Hengbo, assistant general manager of Myanmar Wanbao,
218 of 442 households have moved to the new villages built for them so
far. The others remain reluctant to move even though nearly all of them
have accepted the compensation amounts, Deng told the Global Times.

The company so far has spent $5.7 million in compensation for the crops
on the land and it will pay $3,400 in rent a year to the government for
each square kilometer. The compensation standard is set based on local
laws. There are over 1,700 acres of land privately developed by the
villagers which have not been officially registered but Wanbao also
compensated them at equal tariffs.

As for environmental concerns, the company says it invited SGS
Singapore, a leading inspection, verification, testing and certification
service to assess the environmental impact every three months to better
control potential ecological problems.

Deng also stressed the project had undergone tests from the Myanmar
National Human Rights Commission and a research group from Yangon
University. However, these did not defuse public worries.

Political targets

The Letpadaung copper mine project is not the first Chinese investment
project to face protests in Myanmar. Last September, Myanmar President
Thein Sein ordered the suspension of the construction of Myitsone
Hydropower Project in upstream Ayeyawady River, a project backed by
China Power Investment, which was sparked by strong public outrage on
non-transparent cooperation and environmental risks.

Certain motivations for the protests may not entirely be aboveboard,
says Geng Yi, managing director of the Myanmar Wanbao Mining Copper Ltd.
"Besides the local villagers, the interference of forces including some
opposition organizations have intensified the conflicts. They have taken
the project as a stage to win political points," Geng told the Global

Some protesters were alleged to have been wearing opposition parties'
uniforms and badges.

A strategist based in Yangon said that as for the latest large-scale
protest on November 19, it was possible that some political forces had
taken advantage of Obama's Myanmar visit to exert pressure on China.

The 88 Generation Student Group emphasized to the Global Times that its
engagement in the protests against Letpadaung project was purely out of
concern for the villagers. Meanwhile, Min Zeya added that for many
Myanmese citizens, the problem lay in the fact the contract was signed
with the military government and was not transparent.

Unclear future

Facing pressure after months of protests, the Myanmar parliament agreed
to establish a special group to investigate the project on November 23,
the final day of the fifth session of parliament. According to a report
by the Myanmar Times, the motion was sponsored by National League for
Democracy member Daw Khin San Hlaing, the representative for Pale in the
Sagaing Region.

It was reported that "an independent, national-level commission composed
of individuals and organizations trusted by the public and local and
foreign experts and organizations" would investigate the Letpadaung
expansion and then issue public findings and recommendations.

An administrative official from Myanmar Wanbao told the Global Times
that they hoped the composition of the group would not include members
with anti-China sentiments.

In light of slogans such as "Stop mining copper plan" and "Myanmar
Wanbao get out," Geng said, "the company needs time to prove to the
Myanmese people the long-term benefits of the project for the government
and the locals."

The Letpadaung project will generate 100,000 tons of cathode copper per
year. After the project goes into operation, between 1,000 and 1,500 job
opportunities will be provided. Those job opportunities will be
prioritized for the relocated villagers.

Than Naing, a 40-year-old local worker on the project, told the Global
Times he was pleased with the current job with a salary of $230, and is
expecting a raise once the project goes into operation. The company is
promising to provide more training opportunities.

The company has also set itself lofty community engagement goals. It has
contributed a lot to building roads and wells, providing free treatment
to local villagers in an established hospital and donated several
schools in the area, vowing to continue these efforts in the future. "We
are hoping to build a harmonious, mutually beneficial relationship with
the local community," Geng said.

A Chinese journalist based in Yangon for many years told the Global
Times that the project should be continued in a mutually beneficial way.

But he cautioned that Myanmar Wanbao would need to engage in constant
communication with the public, respond quickly to any media questions
and doubt and ensure there are no environmental issues.

Tough time for Chinese firms

"This is the toughest time for Chinese investment in Myanmar," Jin
Honggen, economic and commercial counselor with the Chinese embassy in
Myanmar, told the Global Times. Some projects are mired in controversy
and since the Myitsone dam issue, no new investments from China have
come in, Jin added.

According to official statistics, China remains the biggest investor in
the country with a total investment of over $14.1 billion, but hostility
against Chinese investments is on the rise.

"Some Chinese companies in Myanmar, especially those investing in
resource fields, are worrying their interests can't be secured," Jin said.

Although the figures remain guesswork, Geng said that the disruption to
the construction by protests had caused them great losses.

Min Zeya said that for many Myanmese citizens, China and Chinese
companies are on the side of the government, not of the people. Many
people feel that the government has sold out to China in order to keep
money flowing into the coffers and Chinese companies in Myanmar are only
exploring their own interests.

"Those are misperceptions," Jin refuted. For this, he blames China's
poor publicity campaigns in Myanmar.

China has assisted the Myanmar government in building several factories
and infrastructure such as roads, bridges and theaters. Its companies
have built schools, hospitals and roads for locals and donated to
disaster relief funds. However, these have not been well communicated to
the public.

"Foreign investment in mining, oil, and gas is always controversial,
because of the perception that precious resources are being exploited by
outsiders. Since there are many Chinese investments in Myanmar,
naturally there will be many protests," Michael Kugelman, South and
Southeast Asia associate at the Woodrow Wilson International Center for
Scholars based in Washington DC, told the Global Times.

"It is important to improve firms' capacities to anticipate possible
sources of opposition, whether real or perceived. Firms will need to be
more transparent about the terms in their contracts, and will need to be
very clear on important issues such as compensation and employment,"
Kugelman said.

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Monday, November 26, 2012

Cambodia - Chinese sign deal on dam, villagers fear flooding

Chinese sign deal on dam, villagers fear flooding

Phnom Penh Post, 27 November 2012
By: Bridget Di Certo and May Titthara

The massive and highly controversial Lower Sesan 2 Dam project took a
major step forward yesterday with the inking of government power
purchase agreements and an investment deal between Royal Group and a
Chinese company.

But details about the contracts, their implementation or the fate of the
thousands of villagers who could be displaced by the dam remain shrouded
in secrecy.

Hydrolancang International Energy Co Ltd CHINA, a subsidiary of the
state-owned China Huaneng company, signed an investment Memorandum of
Understanding with Cambodian tycoon Kith Meng's Royal Group yesterday
for an initial two-year financial injection into the group�s Lower Sesan
2 hydropower dam project.

The planned dam has come under fire from groups such as International
Rivers, which has said the hydropower project would be one of the most
destructive in the Mekong network and the worst of the tributary
projects, wrecking havoc on fisheries and the river ecosystem.

Green groups have slammed the project for a lack of transparent
environmental evaluation and predict the anticipated hydropower dam will
likely flop and be unable to generate the promised wattage.

Key Royal Group representatives, including Kith Meng, refused to provide
any details about the MoU or the progress of the 400MW dam in Stung
Treng province at yesterday�s signing ceremony at Kith Meng's Hotel

The small and perfunctory signing ceremony with HIE was followed by the
inking of three agreements between government ministries and Hydropower
Lower Sesan 2, Co Ltd, the joint venture at the helm of the large-scale

During an address given to the approximately 80 government and company
representatives in attendance, Deputy Prime Minister for Economy and
Finance Keat Chhon, who presided over the ceremony, announced that 100
per cent of the electricity generated by the hydropower dam would be
consumed in Cambodia.

If, in the future, due to surplus generation, electricity was sold to
neighbouring countries, this would only ever be a small amount, the
minister added.

Representatives from the Vietnamese arm of the project were not present
during the ceremony.

Further details of the signed implementation, lease and power purchase
agreements were not discussed and government ministers present at the
ceremony declined to respond to questions from the media.

A bevy of Cambodian beauty queens and celebrities were trotted out to
the red-carpet signing, which businessmen and politicians toasted with
flutes of Moet champagne.

Speaking by telephone from his wooden, thatched-roof house in Srekor
commune in Stung Treng's Sesan district, wedged between the Sesan and
Srepok rivers, villager Seak Mekong said his community still had heard
nothing from the businessmen in Phnom Penh about compensation for their

Provincial Governor Loy Sophat and local authorities visited the Srekor
and Tra Kol communes on Sunday to inform the villagers that construction
of the project would begin in earnest early next year, Meach Mean of the
3S Rivers Protection Network told the Post.

The communes are slated to be flooded as part of the project.

"Most of Tra Kol community agreed to move about 15 kilometres away to a
heavily forested, jungle area and most of the Srekor community agreed to
move a long way away to an area beside a highway road," Mean said.

"The provincial and local authorities invited community representatives
to inspect the land from the end of this month until next year."

However, land titling, compensation and relocation costs were still up
in the air, as was the availability of electricity, water and
infrastructure such as schools and hospitals at the proposed relocation
areas, Mean said.

"The community agreeing to move is just a first step; there is still no
other information. I think at this stage no one can really say 'no'

For Seak Mekong and his fellow villagers, the lack of information
flowing to the public about the project created an omnipresent sense of
unease about their futures.

"I fear our living conditions will return to as it was in the Pol Pot
regime. We are so poor and we have no power against [the companies
building the dam]," Mekong lamented.


Cambodian, Chinese firms to jointly develop hydropower plant
Xinhua, 26 November 2012

Cambodian Royal Group and Chinese Hydrolancang International Energy on
Monday signed a joint- venture agreement to build a 400-megawatt
hydropower dam on Mekong tributary in Stung Treng province in
northeastern part of Cambodia.

The agreement was signed between Cambodian telecoms tycoon Kith Meng,
president of the Royal Group, and Huang Guang-ming, chairman of the
Hydrolancang International Energy.

Kith Meng said that the investment for the dam on Sesan River in Stung
Treng province's Sesan district was the first non- governmental,
multi-lateral project with shareholders from China, Cambodia and Vietnam.

Vietnamese company involved in the project was not present at the
signing ceremony on Monday.

Later, there was also a signing on the power purchase agreement between
the project company and the Electricity of Cambodia.

The deal was signed between Kith Meng and Keo Rottanak, director general
of the Electricity of Cambodia, under the witness of Cambodian Deputy
Prime Minister and Finance Minister Keat Chhon.

Under the agreement, the dam developer will sell all electric power
produced by the plant to the Electricity of Cambodia.

The Government of Cambodia approved the dam construction earlier this
month. According to the government's statement, the dam development is
under a joint venture among Cambodian, Vietnamese and Chinese firms with
the total investment of about 781 million US dollars.

It said that the project is a concessional contract of a 45-year
build-operate-transfer (BOT), of which, 5 years for construction and 40
years for operations.

It remains unknown when the construction will be started.

The statement said that when the project is operational, the government
will earn tax revenue of 29.6 million US dollars a year.

Stung Treng province is situated in northeastern Cambodia, some 481
kilometers from Phnom Penh, the capital of Cambodia.

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Lesotho seeks review of unfavorable dams deal 

Lesotho seeks review of Polihali project

22 Nov 2012  

By Staff Reporter  

MASERU — The coalition government is seeking drastic changes to the agreement it signed with South Africa on the second phase of the Lesotho Highlands Water Project.  

This is because there is concern in the government that the agreement signed for the M9 billion Polihali Dam project last year is heavily tilted in favour of South Africa.  

After Prime Minister Tom Thabane met South Africa's President Jacob Zuma in Pretoria on October 18 the Lesotho government, at a press conference in Maseru, said South Africa had agreed to its request to review certain aspects of the water project.  

A joint communiqué issued by the two countries after the Pretoria meeting said as much.  

The government did not give details on which aspects of the agreement signed mid-last year will be reviewed.  

This week the Lesotho Times reveals some of the areas of the agreement that may have irked the Thabane-led government.  

Agreement vs Treaty  

Top of the list of things Lesotho is likely to push for review is the power that the agreement has over the original treaty.  

The agreement on the second phase has clauses which seem to override the original treaty which was supposed to be the project's rule book when it was signed on October 24, 1986.  

In international law a treaty generally overrides other agreements between countries.  

It is a binding contract signed by two or more states and can only be amended by protocols that are ratified by the signatory countries.  

But in this case the agreement seems to suggest that it can be used to overrule the treaty.  

"The terms used in this Agreement shall have the same meaning as provided for in the Treaty, unless differently defined in this Agreement or if the wording or context of this agreement otherwise requires," states the agreement.  

It further says that: "In the case of an inconsistency, the meaning provided for in this agreement shall prevail with respect to the interpretation of this agreement and not to the interpretation of the treaty."  

The Lesotho government is likely to request that these clauses be changed so that the treaty becomes the reference point as is supposed to be the case on all matters relating to the project.  

This argument is based on the fact that the treaty already deals with subsequent phases of the project.  

Lesotho feels that instead of having a separate agreement on the second phase of the project a protocol would have sufficed.  

Tax free water  

There are also serious concerns over a clause in the agreement that gives South Africa a tax exemption on any cost related to the implementation and maintenance of the project.  

Article 14 of the agreement says "South Africa will not be liable for any duties, taxes or charges levied by Lesotho in respect of services, goods, material, plant and equipment and related items for the implementation of that party (phase 2) of the project relating to the delivery of water to South Africa, except provided for in this Article".  

This clause seems to be a carryover of Protocol V which the two governments signed on June 4, 1999.  

In that controversial protocol Lesotho agreed to refund South Africa every cent it had paid in relation to Phase 1 of the project which involved the construction of Katse and Mohale Dams as well as operations of the project.  

The refund covered the period from 1986 to 1999.  

And so for 10 years from 2000, the Lesotho government paid back M341 million to South Africa in taxes it had levied.  

The principal amount was M186 million but because of a 15 percent annual interest Lesotho ended up paying M156 million more.  

The amount included corporate, income and fringe benefit taxes.  

This was contrary to the original treaty which clearly states that South Africa is liable for tax on any expenditure related to the project.  

The current agreement says if South Africa pays for the registration of vehicles, work permits or any other charges that are not avoidable then it will have to be refunded by Lesotho.  

What has angered some people is that the new agreement allows South Africa to perpetuate a permanent tax exemption that it is actually not entitled to.  

The net effect of that clause is that South Africa gets Lesotho water tax free.  

Water from Lesotho's Katse Dam is pumped into the Vaal River from where it is distributed to Gauteng and other provinces by the Rand Water Board, a parastatal.  

The Rand Water Board sells the water to South Africans with a profit mark-up and taxes.  

This is despite that South Africa would have paid no tax on the water from Lesotho.  

When Lesotho gets its cheque of the royalties every month it is exclusive of the tax that South Africa would have levied on consumers.  

This, in other words, means the South African government is charging tax on a product for which it would not have paid tax.  

It's the same as charging duty on a product which you have bought duty-free.  

The taxes South Africa collect on the water are kept in the treasury.  

This is seen in government circles "as a subsidy that little Lesotho is giving to rich South Africa".  

Lesotho is currently getting between M35 million and M45 million monthly in royalties from South Africa for the water from Katse and Mohale Dams.  

Who controls what?  

In the initial 1986 treaty the Lesotho Highlands Water Project was purely a Lesotho project.  

It was supposed to be run by the Lesotho government through a board appointed by Lesotho.  

South Africa's interests were catered for in the Joint Permanent Technical Commission.  

Lesotho and South Africa had three representatives each on the commission whose role was that of oversight.  

The project was run by the Lesotho Highlands Development Authority (LHDA) whose management and board were appointed by the Lesotho government.  

This remained the case for 13 years until the African National Congress (ANC) government started complaining that the original treaty was skewed in Lesotho's favour.  

The ANC said the original treaty had been negotiated by the apartheid government which did not have the interest of the majority of South Africans at heart.  

After much haggling, Protocol VI was signed in June 1999 to give South Africa a tax exemption and a refund.  

Under that protocol the project was put under the Lesotho Highlands Water Commission (LHWC) on which the two countries had three representatives each.  

The LHWC took the responsibility of appointing the board and chief executive of the LHDA, a role which initially belonged to the Lesotho government.  

This meant that a commission jointly controlled by the two governments had taken the responsibilities of the Lesotho government.  

In other words the water project which was initially a Lesotho project had been turned into a bilateral one.  

Some people say this is unfair because the whole project is actually based in Lesotho.  

South Africa, the officials say, is a customer.  

Under the initial treaty South Africa only controlled the tunnel from the Lesotho border and onwards. 



Chapter 4
Development Dilemmas of Mega-Project Electricity and Water Consumption  

Patrick Bond and Molefi Mafereka ka Ndlovu  

in Bill Freund and Harald Witt, Development Dilemmas in South Africa, University of KwaZulu-Natal Press, 2010.  

How addicted is the South African elite to pursuit of gargantuan development disasters? The dramatic eviction of the Thabo Mbeki faction of the African National Congress (ANC) first at the Polokwane party conference in December 2007 and then from government in September 2008 may or may not derail unsustainable mega-project development. The man most often identified with grandiose multibillion rand industrial projects, Alec Erwin, resigned as public enterprises minister when Mbkei left office, and was not rehired. The new public enterprises minister was Brigitte Mabandla – who left no fingerprints - and subsequently in May 2009, Barbara Hogan, who began her reign with a threat to privatise parastatals. . For this, she was immediately attacked by labour but within months had followed through by recommitting to generate up to 49% of electricity from privately-financed investment in the Kusile coal-fired power plant. Former water ministers Ronnie Kasrils and Kader Asmal – both responsible for the expansion of the Lesotho Highlands Water Project (LHWP) – were amongst those most visibly alienated from the Jacob Zuma faction, although current water minister Buyelwa Sonjica is understood to be corporate-friendly and her previous term in the same office was uninspired. The rise of trade union and communist influence in the ruling party may also shift public resources towards pro-poor (instead of pro-business) projects. All this remains to be seen, but after a year in office (mid-2000) Zuma himself seems to have kept his vow to business leaders not to alter the existing economic policies. The economic development strategies of Minister Ebrahim Patel and the Industrial Policy Action Plan of Trade and Industry Minister Rob Davies do not fundamentally challenge the prevailing macroeconomic biases, but rather work at the margins to subsidise new industries and even potentially a 'green economy'.

What is at stake is whether mal-development via mega-project path-dependent waste and corruption remains as common in post-apartheid South Africa as in the past, even at a time when the government claims to be constructing a 'developmental state'. Electricity and water are two state services facing worsening scarcity yet mega-projects are being built to allow large corporate users and wealthy white people inordinate access. At the Coega complex in Nelson Mandela Metropole (the old Port Elizabeth and Uitenhage), massive amounts of electricity could be consumed in a new smelter to be run by one of the world's largest minerals/metals companies, Rio Tinto, if new power stations can meet the need and aluminium prices recover from the 2008 crash. Meanwhile in Johannesburg, vast water consumption is feasible because of the LHWP, which will encompass up to six mega-dams, of which two have already been built, including Africa's tallest. A third may commence early, specifically to provide cooling water for new Eskom coal-fired generators. The water ministry has budgeted tens of billions of rand for other new large dams, including several costing R20 billion that will divert water from poor black farmers to mining houses in Limpopo.

In this chapter we focus on the stories of the Coega and LHWP mega-projects, but the problems are common across the interrelated state-capitalist complex. To these projects, add four other major outlays of dubious 'white elephant' funds: the unnecessarily expensive new and refurbished soccer stadiums for the 2010 World Soccer Cup; the corruption-ridden R43 billion arms deal; conventional nuclear plants (although the development of the pebble bed modular reactor is now shelved) potentially costing hundreds of billions of rand, alongside hundreds of billions more spent on coal-fired power plants (notwithstanding South Africa's vast existing contributions to climate change through energy-related carbon dioxide emissions); the R8 billion King Shaka International airport in Durban (by all accounts unnecessary); and the R25 billion Gautrain fast rail network that will link Johannesburg, Pretoria and the O.R. Tambo airport, but will only be affordable to elite travellers.[1] Regrettably, although critiques have emerged of both electricity- and water-guzzling projects at Coega and in Lesotho, the mixture of red-green, rural-urban, labour-community, feminist and anti-racist political forces required to halt these and pose alternative development strategies is not yet sufficiently potent against the mixture of state and crony capital that are pushing these through, as if motivated by forces far beyond mere elite 'conspiracy', as discussed in the conclusion.


Lesotho's water

First conceived in 1954, the LHWP went into effect in 1986, through a treaty signed between South Africa's apartheid government and Lesotho's military regime. One of the central questions associated with the LHWP is whether society can look beyond the immediate question of blatant corruption in the dam's construction and identify a more profound corruption of the San water system, which has led to outbreaks of social unrest, particularly in Phiri, Soweto.

The objective here is to link the production of water, in which multinational corporations profited at the expense of those who paid for overpriced dams that were potentially unnecessary, to the many thousands of Basotho highland residents who were displaced, to the consumption of water (for example, the low-income people in Phiri who were unable to afford water priced five times higher than previously as a result of the first two Lesotho dams, Katse and Mohale).

The Senqu River, which forms Namibia's southern border with South Africa, originates in Lesotho and covers a distance of 1 800 kilometres through South Africa, where it is nowadays called the Gariep River. The river connects with the Atlantic Ocean at Oranjemund and is a major tributary the Vaal River, which conveys nearly 23% of the total surface water of South Africa. The five-dam LHWP would divert about 40% of the water (called 'white gold' by project authorities) in the Senqu River basin to the Vaal River system in Gauteng (Boehm and Hall, 1999).

Water sales from the project are Lesotho's single largest source of foreign exchange and account for 75% of the country's budget. During recent droughts, Lesotho has seen its own crops shrivel as its water was shipped to South Africa. Multiple tributaries in the watershed would be dammed if all dams in the project were completed. Two of the dams, the 180-metre-high Katse (Phase 1A) and the 145-metre-high Mohale (Phase 1B), are now complete. In addition to a total of five proposed dams, the LHWP envisages 200 kilometres of tunnels blasted through the Maluti Mountains and a 72-megawatt hydropower plant that will supply power to Lesotho. The scheme is being managed by the Lesotho Highlands Development Authority (LHDA), which is responsible for resettlement and compensation issues, environmental protection and overall construction management. In South Africa, the project is overseen by the Department of Water Affairs and Forestry (DWAF) through the Trans Caledon Tunnel authority. The Joint Permanent Technical Commission (JPTC) was established to represent both countries.

In late 1997, the end-user for the project's water, Rand Water, revealed that it had done a preliminary study that showed that the need for Mohale Dam could be delayed by eight to twenty years by implementing water-conservation measures. Non-governmental organisations (NGOs) and the World Bank attempted to obtain the study, but neither Rand Water nor DWAF was forthcoming with the information. Despite strong evidence that Mohale Dam could be delayed, the South African and Lesotho governments proceeded with the project one year ahead of schedule.

High up in the Lesotho Highlands, the dam's costs are massive for local residents. No estimates exist as to the number of people who ultimately require physical relocation if all three phases are completed, but the total population affected by Phase 1 approaches 200 000. Of these about three-quarters are residents of downstream communities affected by radically reduced Senqu River flows. Another 30 000 villagers in reservoir catchments basins, though not requiring physical removal, would be adversely affected by loss of winter grazing as well as loss of thatching grass, fuel wood, medicinal plants and other common property resources. Phase 1A affected 133 villages in the Katse and Muela local catchments. As many as 3 357 households, averaging between five and six members, lived within the main Katse impact areas. Approximately one-third lost some arable land to the project with approximately 10% losing all their fields. Loss of at least 3 000 hectares of grazing and other common property resources affected approximately 90% (Boehm and Hall, 1999).

Though the large majority of households were poor by any standard, some were more vulnerable than others. At least 13%, for example, owned no fields and were dependent on sharecropping or loan of arable land, while 20% owned no livestock. The proportion of female-headed households was approximately 30%, with those headed by elderly widows being especially vulnerable. In the main Mohale impact area, an estimated 700 households in 84 villages lost 725 hectares of arable land, with the project reducing grazing land, including the most valuable winter grazing, by approximately 1 635 hectares. Resettlement and compensation plans in the LHWP's rural development programme were characterised by non-delivery, corruption and persistent protest by affected communities.

In 1991, an LHWP review panel, including noted international experts, conceded that 'unnecessary delays have stalled implementation of various [rural development programme] projects for more than a year . . . delays in implementing such components . . . as rural sanitation, village water supply, and construction communities have actually caused worsening living conditions in certain villages'. The panel also referred to 'unwarranted interference, pressure and criticism from individuals and other divisions within LHDA, and from within the Commission, upon the Environment Division', which were having an adverse effect on morale. In April 1995, the same panel reported:  

Once again the panel must reiterate its view that even with implementation of the [rural development programme], it will not be easy to meet the requirements of the LHWP Treaty and LHDA Order. Each potential development option that is ignored, and especially options that deal with arable land, significantly increases the chances of failure.  

The same point was reiterated in June 1996: 'Implementation of the [rural development programme] has been deficient to date in terms of LHDA and Commission responsibilities under the 1986 LHDA Order. This is especially true in regard to restoring the living standards of villages, households and individuals more adversely affected by LHWP implementation.'

However, from the outset, the LHWP was founded on rule-breaking. It was first financed in 1986, during the apartheid era, when South Africa was subject to international sanctions. Funding came from the World Bank, the European Investment Bank, the German, British and French bilateral aid agencies, the UK Commonwealth Development Corporation, commercial banks including Banque Nationale de Paris, Dresdner and Hill Samuel and a number of export credit agencies. To avoid the difficulties of international financiers openly aiding the regime, the project's financial advisers – including the World Bank – set up a London-based trust fund through which payments could be laundered.

Subsequent charges of corruption in the LHWP's contracts raised questions about the involvement of the World Bank, which supported LHDA chief executive Masupha Sole, subsequently convicted in a criminal trial that implicated a dozen of the world's largest construction firms. So far, Acres International, a Canadian engineering consulting firm, and Lahmeyer International, a German engineering consulting firm, have been convicted of bribing Sole to give them favorable contracts and – only after intense pressure by the US Senate's foreign relations committee – debarred from the Bank. Sole is currently serving a fifteen-year prison sentence.

LHWP corruption is also felt in hydrological and socio-economic terms. The amounts of money involved in the construction of the first two dams were so vast that the average price of a drop of water consumed in Johannesburg rose by a factor of five. As even the World Bank conceded, the impact of the higher price of water was disproportionately felt by lower-income people who consumed water in the first consumption block (who suffered a 39% real increase during the late 1990s) and far less by higher-income people consuming far more water in the fourth block (only a 24% increase) (Bond 2002). The price increases were felt most strongly by the black residents of the urban townships southwest of the city of Johannesburg.

The end-use retailer of Lesotho's water is the corporatised city water utility, Johannesburg Water (JW). Using the discourse of sustainable development, JW initiated the connection of all dwellings within the historically black townships onto a pre-paid water system in 2001 in order to reduce water wastage and improve cost recovery. Prior to the installation of the meters, average household consumption of water for most households in Soweto stood at an approximately 67 kilolitres per household per month. The new pre-paid technology aimed at lowering this to 10 kilolitres per household per month (initially this figure was 6) provided free with all additional water to be paid for. As a result, the reduction in household consumption of water translated to an estimated $45 million over five years, allowing JW to recuperate its initiating costs within three years.

Johannesburg communities' resistance to commodified water and the forced installation of the pre-paid water meters has been documented by M. Fiil-Flynn and P. Naidoo (2004) and published by the Public Citizen, Anti-Privatisation Forum, and the Coalition Against Water Privatisation:  

Prepaid water meters have started to have devastating effects on the social fabric of communities. Traditional and cultural practices celebrated in community and collective action and spirit (e.g. funerals and weddings) are slowly being eroded as people can no longer afford to pay for the large amounts of water needed at such occasions. As the relationship of people to water has been individualized by the prepaid meters, unequal relationships amongst residents in Stretford, Extension 4 and between these residents and people from other extensions in Orange Farm have started to develop. For example, neighbours are no longer able to share water and suspicion develops over use of and access to water. The general lack of water necessary for the basic survival of households puts untold pressures on social relations as fights over gaining access to water surface in communities and in households. There are often gendered effects of such pressures e.g. increases in domestic violence . . .

Far from facilitating the delivery of the six kilolitres of free water to residents in Stretford, Extension 4, the prepaid meters are often technically deficient; the amount of six kilolitres is insufficient for the basic needs of the average household. This is borne out by the fact that a significant number of residents seek alternative sources of water or buy water units over and above the six kilolitres of free water. The Water Services Act requires service providers to give reasonable notice if it intends to limit or discontinue water services and the provider must take the ability to pay into account. Prepaid water meters, with or without the access to six kilolitres, clearly violate such provisions.  

The French firm Suez was responsible for JW's management from 2001 to 2006 and promoted pre-paid meters worldwide, even though Britain banned them in 1998 as a public health threat. Suez and the Johannesburg Council, pressured by the higher cost of water due to the LHWP, adopted the following strategies:  

•       impose water prices that soar after a very small, free amount of roughly two toilet flushes per day for eight-member households, so that the next block of consumption becomes unaffordable;

•       disconnect people who are too poor to pay for any water beyond the free 6 kilolitres (at their peak, Johannesburg services disconnections reached 20 000 per month during 2002, the Council revealed just prior to the World Summit on Sustainable Development);

•       offer the token 'Free Basic Water' on the basis of a household as a unit, rather than the Reconstruction and Development Programme (RDP) recommendation of 50 litres per person per day, thus creating a bias against larger families and those who have backyard shack-dwellers or tenants who also draw upon the per-household supply;

•       install low-quality water and sanitation technology to thousands of poor households with the objective of reducing consumption (the technology includes pre-paid water meters, chemical toilets, ventilated improved pit latrines and 'shallow sewage' systems, featuring smaller pipes and lower gradients, no cistern for flushing and the unclogging of faeces by hand when pipes periodically clog); and

•       provide differential technology according to class and race (the hardware listed above is only imposed on people in townships and informal settlements, who suffer additional transport and time-wasting costs acquiring meter cards, not in the formerly all-white suburbs where people make direct bank account debit payments to save time and effort) (Bond and Dugard, 2008).  

The Soweto water war included destruction of JW property in mass protests in 2003 and reversion to the 'bypass' system in which local community plumbers set up new pipes, reducing JW meters to useless 'statues' so as to confuse city officials. The war also included a legal component and moved to the Johannesburg High Court in 2006, where Sowetans challenged the adequacy of 25 litres per person per day as well as pre-payment meter technology. After a victory in the High Court in 2008, a slight reversal in the Supreme Court and a total defeat for residents in the Constitutional Court followed over the subsequent 18 months. Moreover, discussions and planning for Phase 2 of the LHWP began in late 2009.  


The big brother approach to development witnessed in both the Coega and LHWP mega-projects stands in contrast to the rhetoric of the RDP and of a mythical 'developmental state' that has allegedly been under construction since 1994 (Freund 2007). In fact, South Africa's development record has been miserable across a variety of fronts, so it is not surprising that mega-projects are only amplified reflections of the power of capital and rich South Africans:  

•     there was an immediate post-apartheid rise in income inequality, which was slightly tempered after 2001 by increased welfare payments, but which meant the Gini co-efficient soared from below 0.6 in 1994 to 0.72 by 2006 (0.8 if welfare income is excluded) (Business Day, 5 March 2008);

•     the official unemployment rate doubled (from 16% in 1994 to around 32% by the early 2000s, falling to 26% by the late 2000s – but by counting those who have given up looking for work, the realistic rate is closer to 40%) as a result of imported East Asian goods in relatively labour-intensive sectors (clothing, textiles, footwear, appliances and electronics) and capital-intensive production techniques elsewhere (especially mining and metals);

•     the provision of housing to several million people was marred by the facts that the units produced are far smaller than apartheid 'matchboxes', are located further away from jobs and community amenities, are constructed with less durable building materials, come with lower-quality municipal services, and are saddled with higher-priced debt if and when credit is available;

•     while free water and electricity are now provided to many low-income people, the overall price has risen dramatically since 1994, leading to millions of people facing disconnections each year when they cannot afford the second block of water consumption;

•     the degeneration of the health system, combined with AIDS, has caused a dramatic decline in life expectancy, from 65 at the time of liberation to 52 a decade later;

•     with respect to macroeconomic stability, the value of the rand in fact crashed repeatedly (against a basket of trading currencies) by more than one-quarter in 1996, 1998, 2001, 2006 and 2008, the worst record of any major economy;

•     South Africa's economy has become much more oriented to profit-taking from financial markets than production of real products, in part because of extremely high real interest rates (after a recent 3.5% spike during the mid-2000s, consumer and housing credit markets are badly strained by serious arrears and defaults);

•     the two most successful major sectors from 1994 to 2004 were communications (12.2% growth per year) and finance (7.6%) while labour-intensive sectors such as textiles, footwear and gold mining shrank by 1–5% per year and overall, manufacturing as a percentage of gross domestic product (GDP) also declined;

•     the government admits that overall employment growth was -0.2% per year from 1994 to 2004 – but -0.2% is a vast underestimate of the problem;

•     the problem of 'capital strike' – large-scale firms' failure to invest – continues, as gross fixed capital formation hovered between 15–17% from 1994–2004, hardly enough to cover wear-and-tear on equipment;

•     where corporate profits were reinvested it sought returns from speculative real estate and the Johannesburg Stock Exchange: there was a 50% increase in share prices during the first half of the 2000s and the property boom which began in 1999 had by 2004 sent house prices up by 200% (US markets rose only by 60% prior to the banking collapse);

•     businesses also invested their South African profits, but not mainly in South Africa: dating from the time of political and economic liberalisation, most of the largest Johannesburg Stock Exchange firms shifted their funding flows and even their primary share listings to overseas stock markets;

•     the outflow of profits and dividends due these firms is one of two crucial reasons South Africa's current account deficit has soared to amongst the highest in the world (in mid-2008 exceeded only by New Zealand) and is hence a major danger in the event of currency instability (with The Economist ranking South Africa as the world's most risky emerging market in February 2009);

•     the other cause of the current account deficit is the negative trade balance, which can be blamed upon a vast inflow of imports after trade liberalisation, which export growth could not keep up with; and

•     ecological problems have become far worse, according to the government's own commissioned research in the 2006 'Environmental Outlook' report, which according to the leading state official, 'outlined a general decline in the state of the environment'.  

What these phenomena represent is a neo-liberal regime that systematically worsens the plight of its people while adopting policies that benefit foreign-based capital, including the formerly locally based white business elite. The challenge is, as ever, properly mixing analysis of structure and struggle, so that beyond descriptive analysis of the sort provided above, we can better determine the underlying dynamics of South African political economy, and in the process, better characterise opportunities for redress and redirection in the interests of society and the environment.  

The two case studies of maldevelopment noted here do suggest some generalisable features beyond merely calling out 'neoliberalism' and 'compradorism'. To be sure, putting on offer the world's cheapest electricity to foreign mining capital at Coega and diverting water on the scale being conducted from Lesotho to Johannesburg, both of which will simultaneously reverse access to basic electricity and water consumption by poor people (because of much higher prices), do confirm the state's pro-corporate, anti-people, anti-ecological bias. What is crucial, though, is that we explain South Africa's elite transition from racial apartheid to class apartheid in a manner that reveals key forces. The danger is that they are obscured through moralising.  

Moralising is too easy, for the corporations that benefit from the outcomes and the construction of the white elephant mega-projects all have addresses, bank accounts, and profit statements, even if they have valiantly attempted to keep backhanders to politicians away from public scrutiny. Likewise, ridiculous statements by decision-makers even as sophisticated as Mbeki can be discerned from official statements and press coverage, and occasionally these are so notorious that they require public prosecution and book-length exposes, as in the case of the Coega-related arms deals (Crawford-Browne 2007) and Lesotho dam construction corruption.  

Too rare, however, is a full disclosure that can take us from misplaced, distracting allegations of 'conspiracy theory' to a sense of whether irrational projects like Coega and the LHWP are 'necessary' (versus merely 'contingent'). If the scale of resource misallocation evident in these cases is also repeated with transport (Gautrain and King Shaka airport), sports facilities (most of the new stadia, especially Durban's), and energy capacity expansion (Medupi and Kusile coal-fired plants and forthcoming nuclear generators), and if the transition from the Mbeki to Zuma administrations did not change power balances favourably so as to halt or mitigate these mega-projects, then this kind of developmental state strategy is not a matter of conspiracy theory. Moreover, when even trade unionists endorse Coega (NMBM 2007) and the SA Communist Party (2010) issues a flattering albeit bizarre statement about the 2010 World Cup (as they did about neoliberal GEAR policy in 1996 and the subimperialist NEPAD strategy in 2002) – 'What we have seen has been a developmental state in action, rallying the widest range of South Africans around a common vision and a common task' – then a much deeper revolutionary way of thinking must take precedence, before we can expect social mobilizations to have any meaningful impact.  

Frantz Fanon (1963) understood this a half century ago, and his Wretched of the Earth contains a chapter, 'Pitfalls of National Consciousness', that assists us in finding the proper mix of structure and agency, e.g. in his consideration of mega-projects:   

Since the bourgeoisie has not the economic means to ensure its domina­tion and to throw a few crumbs to the rest of the country; since, moreover, it is preoccupied with filling its pockets as rapidly as possible but also as prosaically as possible, the country sinks all the more deeply into stagnation. And in order to hide this stagnation and to mask this regression, to reassure itself and to give itself something to boast about, the bourgeoisie can find nothing better to do than to erect grandiose buildings in the capital and to lay out money on what are called prestige expenses. The national bourgeoisie turns its back more and more on the interior and on the real facts of its undeveloped country, and tends to look towards the former mother country and the foreign capitalists who count on its obliging compliance  

Just as in most of Africa, construction of these South African megaprojects appears to be, therefore, a 'necessary' (theoretically derived) process associated with crony capitalism, the expansion of state power and the lack of private fixed investment in an otherwise stagnant economy, especially where the black bourgeoisie have few options for new accumulation and must rely upon state subsidies in association with corrupt multinational corporations. Under these circumstances, if it were not Coega or LHWP, or the other dozen or so ill-considered megaprojects, the South African state would have to generate an entirely new set.  

What we have seen from the cases of Coega and the LHWP is that the crony capitalist approach is evident in mega-project design and implementation as much as it is in national macroeconomic policies. Likewise, the only logical reaction – so far only a fraction of what is needed – is sustained social, indigenous, political-economic and environmental opposition from civil society.  


Allan, Colm. 2001. 'Coega: Conflicts of Interest and the Arms Deal'. Public Service Accountability Monitor report. Grahamstown: Rhodes University, 24 July.

Boehm, Christian and David Hall. 1999. 'Contract for the Lesotho Highlands Development Authority: Socio-Economic Survey. Report No.648-25.

Bond, Patrick. 2002. Unsustainable South Africa: Environment, Development and Social Protest. Pietermaritzburg: University of KwaZulu-Natal Press and London: Merlin Press.

Bond, Patrick and Jackie Dugard. 2008. 'The Case of Johannesburg Water: What really Happened at the Prepayment 'Parish Pump'.' Law, Democracy and Development 12 (1): 1-28.

Bond, Patrick, Rehana Dada and Graham Erion, eds. 2009edn. Climate Change, Carbon Trading and Civil Society. Pietermaritzburg: University of KwaZulu-Natal Press.

Crawford-Browne, Terry. 2007. Eye on the Money. Cape Town: Umuzi Press (Random House).

Fanon, Frantz. 1963. The Wretched of the Earth. New York: Grove Press.

Fiil-Flynn, M. and P. Naidoo. 2004. 'Nothing for Mahala: The Forced Installation of Prepaid Water Meters in Stretford, Extension 4, Orange Farm, Johannesburg'. Public Citizen, Anti-Privatisation Forum, Coalition Against Water Privatisation.

Fine, Ben and Zavareh Rustomjee. 1996. The Political Economy of South Africa: From Minerals-Energy Complex to Complex Industrialisation. Boulder: Westview Press.

Freund, Bill. 2007. 'South Africa as Developmental State?' Africanus 37(2): 191–98.

Mbeki, Thabo. 2006. 'Letter from the President: 2006 – Some Milestones during the Age of Hope!' ANC Today 6 (50), 22–28 December.

Nelson Mandela Bay Municipality (NMBM). 2007. 'Growth and Development Summit Agreement'. Port Elizabeth, 29 March.

SA Communist Party. 2010. 'SA's done well with the World Cup – SACP'. Press statement. Johannesburg, 29 June. 



[1] In addition to a variety of other white elephant projects, we have seen ineffectual neo-liberal macroeconomics, development disasters, rising unemployment and inequality, an AIDS policy described by many experts as 'genocidal', worsened environmental degradation, unprecedented debt-financed consumer materialism, widespread political corruption, real estate and stock market speculation and alliances with imperial powers – for example, arms sales to the invaders of Iraq and to repressive regimes, failed multilateral trade and financial reforms, aspirant sub-imperialism through the New Partnership for Africa's Development (NEPAD), the government's stifling of democracy in Zimbabwe, Swaziland and Burma and rising state repression at home.

[2] Erwin's specific points were considered at length and rejected in Bond (2002, Chapter 2), co-authored with economist Stephen Hosking.

[3] Coega Development Corporation (CDC). 2006. 'Coega Manager Dismissed over Misconduct'. Press release, Port Elizabeth, 11 December.

[4] Earthlife Africa. 2007. 'Eskom's Secret Deal with Alcan: Refusal to Release Details'. Press release, Johannesburg, 20 February.

Lesotho's Water, Johannesburg's Thirst:
Communities, Consumers and Mega-Dams    

excerpt from

Unsustainable South Africa 
Environment, Development and Social Protest 

Patrick Bond 
London, Merlin Press and Pietermaritzburg, UKZN Press

1. Introduction  

Sampling the taste of Johannesburg water allows us to pose several problems that are typically beyond the realm of public debate: the maldistribution of wealth, regional geopolitics, the plight of Basotho highlands peasants, irredeemable World Bank loan-pushing and technical incompetence, corrupting multinational corporate behaviour, and the contested merits of mega-dams. These aspects of Johannesburg's hydro-political-economic cycle are typically veiled, hidden from sight by the underground networks of piping, the transfers of loan finance from--and interest back to--Washington and Johannesburg banks, and flows of profits to the headquarters of construction companies, minus the set-asides in at least one Maseru ex-official's Swiss bank accounts.

Thanks to Pretoria's wash of pro-dam propaganda, when most suburban residents and visitors drink, bathe and flush their toilets, they do not see or feel the problems we consider in this chapter. They also generally retain confidence that Johannesburg Water, now managed by Paris-based Suez, maintains the system to the first-world standards of quality and pressure set long ago in wealthy Johannesburg.

Certainly, Sandton's sewage system, built for a low-density residential area, has recently suffered periodic ruptures due to overuse. However, hundreds of millions of rands are being invested in infrastructure because the Sandton ratepayers' federation--with huge business partners like Liberty Life's property division--successfully used the media and its own lobbying contacts in City Hall. After fighting the redistribution of city resources to the townships in 1995-96 and losing a Constitutional Court case, they rebounded to ensure an end to the periodic overflows of shit on emerald-green Sandton lawns.

Matters are very different once one journeys beyond the leafy suburbs and peri-urban `mink and manure' belt with their multimillion rand mansions, to Johannesburg's inner-city squalor of Hillbrow, Berea, Joubert Park and the Central Business District, whose high-rise blocks regularly experience water cutoffs and leaks which steadily erode 40-80 year old cement structures. For literally millions of people living in Gauteng's informal settlements, the low quality and pressure of water, geographic distance to taps and toilets, and low standards of services are endured--and occasionally spur social protest.

Because of the mix of high quality and inadequate water services throughout Gauteng province, it is revealing first to excavate the Johannesburg water system and locate a primary source of the raw water far up in the mountains of Lesotho, at the Katse Dam that blocks the uppermost reaches of the Senqu River. Later chapters pose more durable problems about the state's municipal infrastructure policy.

Such an analysis begins with a brief survey of the most obvious costs and benefits of the LHWP (Section 2), itself a highly political exercise (Section 3). The two main critical discourses are from green environmentalists and indigenous people's advocates (Section 4), and from urban community activists (Section 5). In posing their arguments, both sources of anti-dam advocacy run up against the limits of the sustainable-development discourse (Section 7).  

Pro-dam rhetorics

If we simply ask the question, who pays and who benefits disproportionately from the continent's largest dam scheme, we are confronted quickly by several confusing combinations of environmental discourses. Most importantly, the discourse of sustainable development is captured in the following sentences by Nelson Mandela, then water minister Kader Asmal, World Bank official John Roome and Pretoria's water department director-general Mike Muller:  

We in South Africa need the water from the Lesotho Highlands Water Project to meet the increase in our demand, and, in particular, to meet the needs of previously neglected communities.

--President Nelson Mandela,

1995 letter to World Bank President James Wolfensohn[1]  

The debt related to the water transfer part of this project will be redeemed by South Africa through income generated by the project. In other words, the end users will pay for the project, at tariffs well within the capabilities of the beneficiaries, making it economically viable.

--Minister of Water Affairs and Forestry Kader Asmal

Speech to an NGO workshop on the LHWP, August 1996[2]  

The argument against large dams contends that they: are not economically viable; are not socially acceptable; are environmentally disastrous; can be a major cause of impoverishment, and can result in unacceptably high international debt. For this project however, the economics show that this is lowest cost supply, has a good Economic Rate of Return and demand management is being put in place; Socially the numbers involved are low, there has been `good planning' but implementation key; Environmentally the impact is limited and has been well managed; Poverty-wise the project supports poverty reduction activities and does not squeeze out other activities; and fiscally SA bears the debt, not Lesotho and users pay--not tax payers.

The Project provides an opportunity to advance the debate that not all big dams are necessarily bad.

--World Bank Lesotho dams taskmanager John Roome

Project Appraisal Document for $45 million dam loan, April 1998[3]  

Each society must make its own decisions about the balance between environmental protection and justifiable economic and social development ... [The second dam in the Lesotho Highlands Water Project] stands up well to scrutiny.[4]

--Director-general of water Mike Muller

writing in the Mail & Guardian, March 2001.  

In contrast, a more honest pro-growth approach can be discerned in a comment by Thabo Mbeki about the South African National Defence Force's September 1998 defence of the Lesotho dam, as reported in the Cape Times:  

The recent military intervention by South Africa and Botswana in Lesotho had demonstrated the Southern African Development Community's commitment to creating a climate conducive to foreign investment, Deputy President Thabo Mbeki told a high-powered investment conference in the city yesterday.[5]  

Dam parameters

What motivated the extravagant, generally false claims of Mandela, Asmal, Roome and Muller? The LHWP is, in its entirety, an $8 billion, multi-phase water supply infrastructure project designed to divert rain water and runoff from the Senqu/Orange River through a series of five dams and tunnels, across the mountains of Lesotho to the urban and industrial heartland of South Africa hundreds of kilometres to the north.

In addition to provision of water, the LHWP also generates a small amount of hydropower and is anticipated ultimately to provide $50 million in annual revenues to the government of Lesotho. Katse Dam is Africa's highest dam at 185 metres. Both the dam and 70 km of diversion tunnels (together, termed Phase 1A) were completed in January 1998 at a cost of $2.5 billion (in rand prices at the time, R9.5 billion). Construction of the Mohale Dam, Mohale Tunnel and Matsoku Weir (Phase 1B) proceeded nearly immediately, at an estimated cost of R6.5 billion, with completion scheduled for 2004.

After considering the bulk of evidence associated with debates over the dam, this chapter concludes that the LHWP is a costly, corrupt, poorly-designed, badly-implemented, economically-damaging, ecologically-disastrous and distributionally-regressive megaproject. Yet the project is still advertised as critical to South Africa's future economic growth, and even as a symbol of a new-and-improved mode of regional cooperation.  

A military interlude

To illustrate Pretoria's official posture, the Katse Dam's distorted importance to the South African government was reflected, in September 1998, in the route the South African National Defence Force (SANDF) took during the controversial invasion aimed at restoring power to an unpopular government which had been overthrown a few days before. Rather than deploy troops to patrol the capital city, Maseru, a platoon from Bloemfontein-based 44 Parachute Brigade quickly advanced into the mountains.[6] Much of Maseru's central business district was soon burned to the ground by looters, apparently because Botswana-based troops dawdled on their way to protect the city.

But there was no loitering in the Maluti Mountains. Once SANDF flew in and attempted to secure the Katse Dam, two troops were shot at by the Lesotho soldiers. The SANDF reacted with extreme force and took no prisoners. A Sunday Independent journalist later reported from Maseru:  

The common perception here is that two South African helicopters flew to the site of the dam which was being guarded by Lesotho Defence Force (LDF) troops. From the air, they opened fire on the sleeping soldiers. South African special forces troops were then landed and massacred any LDF man they could find alive.

The only dispute, especially in the highland villages near the dam, is the numbers killed. Some say 16, which is the official figure; others say 27.

A serving South African officer, on condition of anonymity, maintained that `a certain captain' had perhaps been `rather overzealous' in securing the Katse dam. But he insisted that the context should be understood. When the South African troops entered Lesotho, they were aware that some opposition politicians had threatened to blow up the dam and there was a real fear that troops at the dam might damage the installation ...

The anger apparently triggered the rioting, directed initially at the many South African businesses in Maseru, but which soon spread to all foreign businesses. Once the rioting started, indiscriminate looting began and spread rapidly.

`Nobody stopped them. South African soldiers just laughed and Basotho soldiers were looting too', said an Indian shopkeeper whose store was burned to the ground and who now works as a casual shop assistant. `They brought trucks and took away furniture on the top of cars'.

In the aftermath, Lesotho has had to deal with the loss of as many as 20,000 jobs in central Maseru and a massive dent in already badly battered investor confidence. It also faces ongoing bickering among the three major and nine minor political parties, widespread disillusionment with the entire political process and considerable anger and resentment about the events of recent months.

All in all, an extremely volatile mix. But the water has begun to flow to South Africa from the multi-billion rand investment in the mountains and millions in royalties have begun to flow into the coffers of Lesotho.

Given that the financial stakes are so high and the local political fabric so fragile, Pax South Africanus seems here to stay.[7]  

The costs of intervention

For South Africa, damage included not only the two troops plus two medics killed in the Katse firefight, but the souring of longer-term bilateral relations. Until that point, the idea of Lesotho's unification with South Africa, potentially as an additional province, was contemplated by progressives on both sides of the border, but this prospect was snuffed out for the foreseeable future.

Moreover, according to a March 2000 report by Mail & Guardian journalists, no matter whether the LDF or SANDF fired first, the impression that Pretoria left was of subimperial arrogance:  

Some Basotho are crying `cover-up' after Lesotho authorities--who invited the SA National Defence Force in the first place--moved to keep the matter out of the courts. And a senior Lesotho royal charges that the South African government and Nelson Mandela, president at the time, have ignored repeated requests for an explanation ...

Meanwhile Prince Seeiso, brother of King Letsie III, this week said relations with South Africa remained strained by the Katse incident.

The Lesotho royal family is known to have opposed the SADC intervention and is seen as loosely allied to the democratic opposition.

Seeiso, emphasising he spoke not on behalf of Letsie but as an individual and a principal chief, said he has been asking South African ministers to explain the Katse killings, but without success. His understanding was that LDF soldiers did not provoke the attack.

`The helicopters came and circled the area. As soon as people came out to see what was happening, they were done for'.[8]  

2. Costs, benefits and politics  

How sensible was South Africa's military prioritisation of Katse, not to mention the billions of rands pumped into the LHWP, plus many billions more in future? For critics, after all, the LHWP represents the worst traditions of Western development `solutions' to what in reality are problems associated with irrational apartheid-capitalist resource utilisation, particularly South Africa's extraordinarily unequal distribution of water.

The LHWP worsens these underlying problems by the way it merely `bandaids' a symptom: future water shortages in the Johannesburg metropolis. At the same time, the LHWP's cost aggravates the durable development crisis of unavailability of water, by encouraging national and local officials to increase prices for impoverished urban users, without reference to their needs and ability to pay.  

Alternatives to mega-dams

This chapter reflects arguments and advocacy in favour of a wholly different approach termed `demand-side management', and in doing so, unveils divergent discursive approaches to environmental justice. In short, insist activists from Alexandra township, Lesotho's water should flow along its natural course through the Free State and Northern Cape to the Atlantic Ocean, rather than flowing through Johannesburg townships' water and sewerage pipes--which are riddled with apartheid-era leaks that drain some 40% of the incoming water--at a retail price that the World Bank recommended be set five times higher than existing water sources.[9]

Township pipes and taps should be repaired forthwith and Johannesburg's hedonistic corporate and high-income residential water consumers, as well as inefficient Vaal River catchment area farmers, should pay much more for water in the interests of both conservation and social justice. Lesotho's own development options should be dramatically widened in the process, with the aim of ending the bizarre residues of neo-colonial dependency associated with migrant labour bondage to South Africa, foreign debt-peonage, and the legacy of myriad misguided development projects.

This was the essence of the argument made by civic leaders in Alexandra and Soweto in late 1997 and early 1998. It was endorsed by even the neoliberal Business Day newspaper's environmental reporter,[10] as well as by a variety of environmental pressure groups. The critique was then taken to the World Bank's Inspection Panel, a kind of auditor-general, in April 1998 by three Alexandra residents.[11]  


But even at the level of discourse, such disputes with powerful vested interests incur costs, and the Alexandra residents suddenly encountered intense resistance:  

•    A subset of key civic movement leaders changed position in the wake of intense political intimidation, which took the dual form of a threatening letter from water affairs minister Kader Asmal, and ANC branch-level pressure on the civics.

•    Likewise, water-sector professionals associated with the National Water Conservation Campaign and Rand Water Board reversed what were previously public opposed positions to LHWP expansion.

•    An important Lesotho church group retreated from what appeared to be a certain legal confrontation with the Bank over compensation for displaced residents.

•    The argument against LHWP was publicly, vociferously, rejected by Bank staff and by Asmal, who had just been named chair of the World Commission on Dams (WCD), and director-general Muller, largely on grounds of the threat of drought, but also, as they wrote in a Mail & Guardian article, because of the Alexandra residents' utilisation of `the line, indeed the phrasing, of international groups opposed to the World Bank, its policies in general, its policies in the water-resource sector and its funding of dams. To be effective, and to gain formal audience, they must have local allies'.[12]

•    In July 1998, the US executive director to the World Bank, Jan Piercy, refused even to meet the Alexandra residents, though they were a five-minute drive away from her five-star Sandton hotel.

•    The following month, the Inspection Panel also rejected the critique, following a visit and questionable analysis by its respected, internationally known inspector, James MacNeill, who a decade earlier had served as secretary-general of the Brundtland World Commission on Environment and Development.  


Matters seemed to subside, with Business Day Washington columnist Simon Barber gloating over the defeat of the Alexandra residents' argument.[13] Over the next two years, the protesters' proposed alternative strategy--demand-side management partly through higher tariffs for luxury consumption and partly through fixing water system leaks--took a back seat to supply enhancements.

The vast majority of national water project financing was directed towards major dams in the Tugela and Mkzomazi basins, the Mzimvubu basin, the Orange River, the Western Cape and the Oliphants River in Limpopo Province. This was despite the fact that such new sources of water would be physically exhausted within three decades.[14] When a major new aquifer was discovered in the Western Cape in late 2000, water bureaucrats had even less reason to impose conservation measures on the most hedonistic households, such as those in Constantia, Cape Town, whose consumption was measured at 1800 litres each day.

But at that point, other factors began to emerge that warranted a fresh look at the debate over dams and water access. Further government studies of downstream flow reduction in the Orange River confirmed the potential for an LHWP-initiated ecological catastrophe, as long predicted by environmentalists.[15] Moreover, the overriding logic of the LHWP critique based on socio-economic justice issues was quite sound, as recognised, ironically, throughout the World Commission on Dams final report in November 2000. Residents of both the Lesotho highlands and Alexandra township celebrated the report by calling jointly for a moratorium on further dam construction.

Simultaneously, the need for dramatic expansion of clean water access was amplified by a cholera outbreak due to cutoffs of free water supplies, affecting low-income rural households in KwaZulu-Natal province. Of thousands of people infected in late 2000, several dozen died. Just after the outbreak, a Constitutional Court case brought by shack-settlement leader Irene Grootboom finally guaranteed socio-economic rights, such as water, to low-income citizens.  

Free water?

All this occurred during the run-up to a crucial round of municipal elections in December 2000. President Thabo Mbeki then conceded demands being made by trade unionists and NGOs for a `lifeline' supply of water and electricity, incorporating `free services' into prime position amongst ANC electoral campaign promises.

It is important to recall that Mbeki had earlier backed himself into a hugely embarrassing corner by questioning whether HIV caused Aids, claiming instead that expensive anti-retroviral pharmaceutical treatment was untested and dangerous, and instead that poverty was the root cause of Aids. Saving face also helps explain Mbeki's new commitment to free lifeline services, in the wake of six years of systematic water and power cutoffs to low-income residential areas.

But no one really anticipated that the election promises, already made in the 1994 RDP programme, would be kept. Instead, unaffordable retail tariffs associated with water supply in Johannesburg--indeed in all of Gauteng province--would continue to hamper water access well into the twenty-first century. Moreover, the planned Igoli 2002 corporatisation of metro Johannesburg's water supply via a consortium led by a French firm involved in LHWP construction and corruption implied yet further upward pricing pressure regardless of ANC promises.

These water-related complications have generated challenges for decades to come to the so-called `brown' agenda--urban ecology, particularly as it relates to black residents with low incomes. The problems were particularly poignant and indeed ironic in January 1998, when a predicted El Nino drought failed to materialise and hence the first flow of LHWP water to Gauteng was turned back from the already overflowing Vaal River. But the price increases applied to low-income consumer bills were not similarly redirected.  

Reforming Pretoria and the World Bank

In all these respects, the LHWP has become an important symbol of the extent to which the post-apartheid South African government is willing to listen and respond to socio-environmental-justice critiques of its policies and pet projects. The LHWP story provides, too, a measure of whether argumentation involving both technical and moral claims can be taken seriously within the World Bank.

Throughout, the Bank was the central organiser of technical, financial, social and ecological information about the LHWP, and will continue in this vein in future. Hence its involvement raises interesting questions about the professional competence and participatory orientation of the world's single-largest institutional investor in infrastructure, questions that Alexandra township residents put to the Inspection Panel and that deserve further consideration below.

After a review of the political context for the LHWP, the social, environmental and economic critiques can be considered. These critiques are appropriate for all bulk infrastructure projects. They pose doubts about the Bank's commitment to distributional justice and accountability--doubts also reflected in other settings across the world.  

Anti-dam rhetorics

Ultimately, this chapter also considers the merits of different ecological discourses emerging from particular social struggles, or as Raymond Williams termed them, `militant particularisms'. Contrasting discourses are intrinsic to the diverse politics of localities, but some political-ecological themes may have more universal discursive undertones.

As leading US anti-toxics activist Lois Gibbs has argued, the growing environmental justice movement asks the question `What is morally correct?' instead of `What is legally, scientifically, and pragmatically possible?' This, according to David Harvey, `permits, through the medium of social protest, the articulation of ideas about a moral economy of collective provision and collective responsibility as opposed to a set of distributive relations within the political economy of profit'.[16]

The difference between environmental justice rhetoric and a sustainable-development discourse aiming to advance `the political economy of profit'--or as Mbeki put it, `creating a climate conducive to foreign investment'--is important to bear in mind, as we track debates over the LHWP. The clearest statement of ecological modernisation objectives is found in the United Nations Declaration on Environment and Development signed in Rio in June 1992 (Principle 16): `to promote the internalisation of environmental costs and the use of economic instruments, taking into account the approach that the polluter should, in principle, bear the cost of pollution, with due regard to the public interest and without distorting international trade and investment'.

What the LHWP's green and brown critics accomplished in 1998 was to argue on legal, scientific and economic grounds that environmental and human damage in Lesotho had not been internalised (and often not even recognised). Their demand was that the Mohale Dam should not be built for at least another couple of decades so that more attention could be paid to improving water delivery systems from the demand side.

As we shall see, this argument was not successful, at least initially in its consideration within the World Bank Inspection Panel, although it won the blessing of the World Commission Dams final report. But nevertheless the critiques of the LHWP are worthy of close consideration, for they point to core factors underlying Johannesburg water controversies which are responsible for growing public anger: as tariffs increased, as water supplies were cut off despite extraordinary public health risks, and as the logic of water commodification and even privatisation crowded out the public interest. Then, as has happened in Johannesburg and elsewhere so many times before, social movements mobilised around the unmet demand, codified even in South Africa's 1996 Constitutional Bill of Rights, that water is a human right.  

3. The political context  

The political background to the five-stage LHWP is long and convoluted. The boundaries of Lesotho go back to the mid-nineteenth century, when invading European settlers of Dutch and British ancestry forced the Basotho people off the rich farming area now known as South Africa's Free State province, into the neighbouring mountains. Under subsequent British colonial rule, the LHWP was first conceived in 1954, twelve years before Lesotho's independence.

Formal government planning began in the mid-1970s. By the early 1980s, with protest in South Africa re-emerging and international sanctions beginning to gather momentum, violence broke out within Lesotho over the spoils of potential water sales to the apartheid government. Lesotho's Prime Minister, Leabua Jonathan, reacted by agreeing to the LHWP only on condition that he would control the outflow of water to South Africa. A coup soon followed in 1985, backed by South Africa, and Lesotho's new military regime pressed ahead with the alliance.[17]  

Bailing out apartheid

The mid-1980s South African government was at the nadir of its pariah status. It welcomed the international legitimacy that a cross-border project, catalysed by the World Bank, would bring foreign minister Pik Botha, the architect of regional co-option, and the strongman premier, P.W. Botha. By October 1986, harsh repression, several states of emergency, and the foreign debt repayment `standstill' of September 1985 foreclosed any chances of South African access to foreign funds.

At this crucial moment, the LHWP Treaty was announced and given controversial financial support by the Bank. The Bank's loan is worth considering in some detail in view of the ongoing campaign for cancellation of apartheid-era debts and reparation of lending profits associated with apartheid debt.[18]

Although the Bank's sister organisation, the International Monetary Fund, had granted South Africa a $1.1 billion loan as late as 1982, the Bank's last lending relations with Pretoria were during the late 1960s. But the Bank lent Lesotho $110 million for the LHWP because of South Africa's ability to stand surety. Indeed, the only financial risk analysis in the Bank's initial report concerned whether Pretoria would default.

At a conference on the LHWP sponsored by the Johannesburg NGO Group for Environmental Monitoring in August 1996, Michael Potts of the Development Bank of Southern Africa, also an LHWP funder, conceded, `Given the limited access to foreign funds by the South African government and the limitations on contractors' funding proposals--export credit was not available to South Africa--a very complex treaty was negotiated to bypass [anti-apartheid financial] sanctions'.[19]

Merely so as to arrange the financing package, the Bank also lent Lesotho $8 million at concessionary rates through its International Development Association, in order to disguise what Asmal himself has referred to as `sanctions busting'.[20] As environmental activist Korinna Horta recounts,  

According to the Bank's project report, preparations for project financing were so complex that it required `the amount of staff work that would normally go into about 10 projects'. That was because Lesotho did not have the creditworthiness needed to obtain the major international funding required for Phase 1A, and giving the money directly to apartheid South Africa was politically unacceptable. World Bank documents show that the Bank was concerned about `the project being perceived as being in the Republic of South Africa's interest' and about other possible co-financiers' `political sensitivities' about aiding the apartheid regime. To assuage the other lenders' `sensitivities', the World Bank helped set up a trust fund in Britain through which South Africa could service its debt.[21]  

Apartheid power

In August 1996, Asmal told the NGO conference of his own later reversal on support for the LHWP: `Ten years ago I was opposing the LHWP Treaty on political grounds and now I am called on to ensure its implementation. In the intervening years many things have changed, including, crucially, the relationship between Lesotho and South Africa, from a relationship of client-state and pariah Big Broeder to that of democratic equals'.[22]

This assessment of power relations was thrown into question a couple of weeks later, when a construction subsidiary of Anglo American Corporation, South Africa's largest firm, experienced labour problems at the Buthe Buthe construction site and called on the local police to intervene. At least five workers were killed before labour peace was restored. Pretoria's controversial invasion came just over two years after Asmal expressed his sense that South Africa and Lesotho were `democratic equals'.

Indeed, throughout the 1990s, Maseru was rocked by popular protests and violent infighting between military factions. Conflict between three nationalist political parties intensified in the late 1990s over the spoils of a shrinking state, in part because the steady demise of South African mining jobs during the 1990s left Lesotho's economy with even fewer resources to share amongst a desperately poor population. Opposition party complaints aside, the June 2002 general election returned the ruling party to power. But without solving the underlying problem of Lesotho's perpetual underdevelopment, elites in Maseru and Pretoria could expect ongoing turmoil.  


Under such stressful economic conditions, Lesotho politics were profoundly affected by transnational construction corporations angling for a share of the enormous project. In August 1999, a court case alleging 13 counts of bribery began against the chief executive officer of the Lesotho Highlands Development Authority (LHDA), Masupha Sole. Prosecutors with access to Sole's Swiss and South African bank accounts argued that over the course of a decade, from 1988-98, he successfully induced at least $2 million from some of the largest construction and engineering consultancy firms in the world, including ABB of Sweden/Switzerland, Acres of Canada, Impregilo of Italy, and Dumez of France.[23]

Denials initially followed, but even the World Bank found itself implicated.[24] Evidence emerged that in 1994, a top Bank official had sent a formal letter to the Lesotho government, demanding that Sole not be fired. Such an act would `seriously jeopardise the progress of the project', according to the official. He went on to demand that the Maseru government `consult with the Bank prior to making changes to its senior staff appointments' and even threatened `legal action'. Later, when the letter leaked, the author dubiously claimed he drafted the command without knowledge that Sole was corrupt.

In a letter to the International Rivers Network, the Bank subsequently stated that its officials learned of the bribery only in June 1999. But the institution undermined itself again in 2002 when it refused to help finance Sole's prosecution (after initially getting good press for offering). Then, instead of debarring all the companies implicated, the Bank took action against only three middlemen intermediaries of the companies, in part because, according to a lame line of argument, the construction firms did not abuse the Bank's loan share of the project. The Lesotho affair, possibly the highest-profile case of its type in Third World history, again reminded the world of the Bretton Woods Institutions' reputation for molly-coddling corruption.

Bank president James Wolfensohn had stuck his neck out on the issue of corruption repeatedly. In October 1999 at Transparency International's International Anti-Corruption Conference in Durban, he postured, `As far as our institution is concerned, there is nothing more important than the issue of corruption ... Corruption [is] not just political, but it [is] the single-most significant factor in the issue of development, of equity and of social justice'. Of course, there was quite a self-interested component within his message, which helps explain why Wolfensohn might have condoned the repeated sweeping of LHWP bribery under the rug: `Corruption is now affecting the sources of funding and international balance on development assistance. At this very moment, in parliaments in developed countries, the voters of those countries are saying: We do not want to give money to any form of development assistance if it finishes up in an offshore bank account'.[25]

Finally in June 2002, based largely on evidence from the offshore account, the case against Sole was closed and he was sentenced to 18 years in jail. Charges against the major firms began to be investigated. Judge Brendon Cullinan was satisfied `beyond a responsible doubt' that `the accused was thus involved, over a period of nine years, in 48 corrupt or fraudulent transactions including the acceptance of 46 bribes'. Sole was paid by the multinational corporations for agreeing to `further their private interests'.

Sole, incidentally, was not bashful. `Bribery happens elsewhere. A bigger picture view should have been taken', he testified to Cullinan in his defence. `The scale of the bribery is related to the scale of the Project'.[26]

There was even talk in South Africa that the multinational corporations which bribed Sole could be barred from future projects. The logical place to start was the R7 billion luxury Gautrain project connecting Pretoria, the airport, Sandton and central Johannesburg, whose contracts would be on offer at around the time the Lesotho government began prosecuting the main corporations.

At the time, Canada's Acres International drew a great deal of attention, because the same month it was implicated in Sole's bribery, the G8 Summit occurred in the luxury resort of Kananaskis. There Mbeki attempted to recruit more transnational corporate `partnerships' with African states.  

Paying back Lesotho--and South Africa

Is this a case for reparations? Was the LHWP yet another Third World white elephant eco-disaster, initiated by dictatorial regimes (in both South Africa and Lesotho), inappropriately financed by the World Bank, insensitive to the resulting environmental and social problems, and replete with documented evidence of corruption and winks and nods from the Bank? If so, should the people of Lesotho and South Africa be responsible for repayment of the loans associated with the LHWP?

The Jubilee network of social movements emerged by the late 1990s with the explicit objective of questioning the legitimacy of Third World debt, including `ecological debt'.[27] A campaign was promoted by Jubilee South Africa to repudiate--and demand reimbursement for earlier payments of--what was termed `apartheid-caused debt' as a component of more general `Odious Debt'. By international precedent, Odious Debt did not have to be repaid if it was shown to be based upon original-debtor illegitimacy.[28] A case in the US and Swiss courts was filed in June 2002, demanding billions of dollars in damages from major banks which had funded apartheid.

As for potential claims against repayment of LHWP loans, the apartheid-era creditors for the Katse Dam included the World Bank ($110 million), European export credit agencies ($304 million), South Africa's export credit agency ($107 million), the Commonwealth Development Corporation ($36 million), Banque Nationale de Paris ($19.7 million), Credit Lyonnais ($17 million), Dresdner Bank ($15.8 million), Hill Samuel ($14.5 million), the European Investment Bank, the African Development Bank, and Pretoria's Development Bank of Southern Africa.

In view of the prevailing balance of forces, the post-apartheid South African government adopted a posture of active hostility to, and misinformation about, the apartheid debt campaign.[29] In turn, that led a New York lawyer to file suit on behalf of black South Africans in June 2002 against many of the major European and US banks and corporations that financed apartheid. Although the LHWP was not specifically mentioned at this stage, the potential for making similar demands based upon obvious apartheid collusion and ecological debt, not to mention corruption, remains great.

The immediate political challenge, however, is the strengthening of links between abstract campaigning for economic justice on the one hand, and on the other, concrete campaigns that unveil for ordinary people the nature of the problems, the causes, the institutions responsible, and the logical remedies. Such campaigning has already been established by `green' advocates of social and environmental justice in Lesotho, and, simultaneously, by `brown' advocates of socio-environmental justice in Johannesburg townships.  

4. The green critique  

Green criticisms of the LHWP were based on both ecological factors and the interests of indigenous people. In the Highlands, socio-economic and environmental problems associated with the LHWP were meant to have been ameliorated by World Bank staff and allied planners, particularly through the Lesotho government's Rural Development Programme and fund. However, the fund was soon embroiled in corruption scandals, along with the Muela hydropower scheme. Royalty through-flows to the Rural Development Programme were scaled back to better match `absorptive capacity'.  

Dam displacement

But even had the fund been properly allocated, resolving the LHWP's socio-ecological problems was never as straightforward as planners expected. The Katse Dam directly displaced 2,000 people--approximately 300 households--but indirectly affected at least 20,000 more who lost the use of common resources or income through the submersion of 925 hectares of arable and 3,000 ha of grazing land. Ancestral burial grounds were also flooded.

Likewise, the Mohale Dam would inundate 550 ha of extremely good cropland and forced the resettlement of 400 families. Following erosion of much of Lesotho's arable land over the past three decades, less than 9% of the country's soil is available for cultivation.

In the relatively barren Maluti Mountains, tiny woodlots and fields for cultivation and grazing are guarded carefully by local peasants. But once the water began rising, sufficient numbers and quality of replacement trees were not provided. For those peasants who lost their fuelwood, cash compensation--as little as R1 per square metre, even for thickets of full-grown poplar--was insufficient to pay for alternative fuels.

LHWP authorities initially provided the peasants with inadequate replacement fodder for cattle, and failed in some cases to give local people access to construction jobs. Moreover, valuable topsoil inundated by Katse water either was never recovered or was diverted to the gardens of European and South African consultants living in the area rather than to those forced to move by the rising waters.

Many of those displaced were given low-quality replacement housing that amounted to little more than uninsulated storage shedding. Women, children and the elderly were particularly hard hit; according to Mathato Khitsane of the Highlands Church Action Group, `The project shows no sensitivity to the impact on gender issues and roles of women'.[30] In 1997, church surveys indicating widespread dissatisfaction on the part of many residents with resettlement schemes and provisions for reimbursement.

Notwithstanding Asmal's periodic commitments to increase levels of compensation to displacees,[31] the disputes continued during his period as water minister.[32] According to Ryan Hoover of the International Rivers Network (IRN), studies showed that `Household income figures for the LHWP northeastern mountain region fell 65% faster than the national average during the LHWP's initial years'.[33]

In November 1999, people from Makotoko, Matala and Ha Nkokana communities displaced by the Katse and Mohale dams testified about their experiences to the World Commission on Dams:  

Malisemelo Tau: The LHDA project told us ... if we move away there, and the project builds a dam there, that water can save many people's lives. We agreed to move away to save many people's lives with our water and we hoped that the project will be trusted to satisfy us with all that it promised to do for us because we save many people's lives ... When we research at our destination, we found that there is no water until now. We have a great problem of water at the new village. We get water from the river by wheelbarrows. We drink water from the river and the river is very far from us ... the owners of that place resettled by LHDA have tears running on down their cheeks every day.  

Anna Moepi: Ladies and Gentlemen, our lives before the Lesotho Highlands Water Project was a nice one. We were living in peace and harmony ... Our lives in the new location leave a lot to be desired ... You see our lives as deteriorating day by day. We are worse off ... The project had initially promised that we would be trained on self-reliant projects that would include income-generating activities. Nothing is happening.  

Benedict Leuta: The roads that they have built are the only good thing I can think of about the Lesotho Highlands Water Project ... But the roads also destroyed a lot. The road culverts cause erosion in our fields. And in my village we had some wells that were covered by the road ... After the road covered them, we received no compensation. We had to pay the government to come help us bring water down from high in the mountains ... We are less healthy after the dam has been built ... Also the chiefs gained because they were sub-contracted to LHDA and also received bribes from many people ... The affected people were the losers. Some people lost their land and received no compensation or employment.[34]  

Pros and cons

Compensation for lost land, social goods and livelihoods was not the only social challenge. In addition, the LHWP's role in socio-economic modernisation of Lesotho villages also brought with it a dramatic increase in HIV/Aids. Already by 1992, 5% of construction workers were testing HIV-positive, and high rates of transmission to local villagers were observed in one major study.[35]

As Asmal conceded, `Social problems such as increased alcohol abuse, increased sexually-transmitted disease and increased stock theft have all been reported in villages along the new Katse Road'.[36] However, he continued,  

These negative impacts must be weighted against the benefits arising from the project, including access to improved health and educational facilities, water supply to communities, sanitation at schools, and, at villages close to the sites, the construction of community halls, community offices, creches, open markets and road access. One must also weigh in the benefit of employment opportunities for local people, both in the construction phase and in the considerable long-term maintenance tasks.  

Indeed, 157 latrines were installed in eight schools, and in seven villages, trenches were dug for water supplies, with nearly 90 km of unrelated feeder roads to be constructed by 1999. But this was relatively small consolation when considered in the context of the $2.5 billion cost of the Katse Dam. And while the introduction of tarred roads into the area brought increased trade, it also resulted in the closure of the major local store. The effect of more than a decade of road-building in the Lesotho Highlands, anthropologist James Ferguson has shown in his pathbreaking Foucauldian analysis, The Anti-Politics Machine, was to impoverish peasants further, as markets undermined local food production and officials milked more taxes and fees from the now accessible peasants.[37]  


The Katse and Mohale Dams not only aggravated land hunger, but destroyed crucial habitats of the Maluti Minnow (an endangered species), bearded vulture and four other species considered `globally threatened'.[38]

Other potential ecological problems associated with the LHWP have also emerged. The early feasibility studies conducted by a British-German consortium failed to include an Environmental Impact Assessment, which resulted in cost overruns of 15% due to an unanticipated need to line the Katse tunnels with cement.

Soil erosion and sedimentation--which typically lowers dam capacity by 1% per year and silts intake areas--were not initially accounted for. When sedimentation was finally factored into India's infamous Sardar Sarovar Dam, it tipped the balance towards cancellation of the Bank's involvement. And reservoir-induced earthquakes in the Highlands village of Mapeleng generated a crack 1.5 km long, damaging nearly 70 houses and diverting an important water spring from the surface.

There is also a chance that the LHWP's environmental flaws will backlash against South Africa itself. According to a 1996 study by Snaddon, Wishart and Davies,  

The LHWP will eventually divert 2.2. H109m3y-1 from the Headwaters of the Orange River in Lesotho, into the Ash/Liebenbergsvlei tributary of the Vaal River in the Free State. This will be the largest Inter-Basin Transfer in southern Africa, and it will result in considerable alterations of the rivers concerned. These systems will remain unstable for a very long time. The overall environmental effects of the LHWP have not adequately been assessed, and assessments of the instream flow requirements of the rivers involved in the scheme have focused only on the donor systems.[39]  

In Pretoria, the original Orange River Project Replanning Study commissioned by Dwaf made very superficial estimates for downstream irrigation needs, ignoring, for instance, any new requirements for emergent black farmers. Dwaf admitted that even by 1996, as Katse was being completed, it could not `yet claim that it has conclusively determined the present and future irrigation water requirements in the study area'.[40] Warned Free State University Zoology Professor Maitland Seaman, `The [Orange] river might even dry up in exceptional years' due to the LHWP.[41]

A 1999 Orange River Development Project Replanning Study by consultants BKS and Ninham Shand evaded most of the thorny issues, continuing, for example, to assume that there would be no increase in water available for irrigation.[42] The study suggested that further LHWP dams beyond Mohale would be inefficient for diversion, compared to the potential for pumping more than four times as much water from the Orange River into the Vaal River from a large new proposed dam further downstream from Lesotho, at Boskraai.

Indeed, Lesotho's own access to water is also a matter of great concern, notwithstanding that the BKS/Ninham Shand study incorrectly assumed that `formal water use along the Senqu River and its tributaries is very small and was taken to be accounted for by the compensation and environmental releases for the dams' and hence `no further allowance was made' for Lesotho's water needs.[43]

In reality, virtually all other experts and commentators argue that there is insufficient water in the country to share with South Africa beyond the Mohale Dam. According to a rigorous 1999 official Instream Flow Requirement study of the Senqu within Lesotho, `critically severe' biophysical and social impacts of water diversion should be anticipated.[44] At 51m3s-1, the extraction of water along the lines anticipated in the LHWP Treaty would have mitigation and compensation implications of R20 million per year, with still `moderate to severe' impacts under the lowest-extraction scenario of 44m3s-1.[45] As things stood, senior SADC water official Lengolo Monyake predicted, within 10-30 years Lesotho would face severe water scarcity.[46]  

Green solidarity

The social and ecological problems associated with the LHWP within Lesotho led not only to local criticism, but gained the attention of international activist/advocacy NGOs like Christian Aid, the Environmental Defence Fund (EDF) and the International Rivers Network. LHWP opponents began badgering the World Bank to provide more compensation to displacees and address the ecological damage. The activists represented, according to Addison,  

a loose coalition of environmental lobbyists, NGOs and churches. Leadership essentially comes from the California-based International Rivers Network, whose Africa coordinator, Lori Pottinger, has visited Lesotho to collect the views of villagers and has been tireless in her criticisms of the scheme, over the Internet and at conferences. The coalition also includes South African bodies such as the Group for Environmental Monitoring and the Southern African Rivers Association. Increasingly, the media in South Africa and Lesotho are carrying letters and articles questioning the high social and environmental costs and the political ramifications of the scheme.[47]  

In light of these concerns, it is revealing to consider Bank LHWP Taskmanager John Roome's own assessment of `possible controversial aspects' of the LHWP:  

The project has been in the spotlight from international NGOs. Although a detailed study of meetings and consultations have been undertaken, some International NGOs (e.g. EDF, IRN) may not support the Bank's decision to proceed with the funding of Phase 1B at this time--partly related to the issues set out below (basically judgment calls on whether progress in Phase 1A has been satisfactory and whether the economics of delays to Phase 1B are acceptable), but partly on principle as part of the larger `big dams' debate. This has taken further importance with the appointment of Prof. Asmal (the SA minister concerned) as Chair of the recently established World Commission on Dams ...

Local NGOs have been critical of the Lesotho Highlands Development Authority's level of performance on the social aspects of the project. The Lesotho Council of NGOs has however recently signed a declaration endorsing the implementation of the project. They agree that LHDA's performance has improved in recent years, but they argue that there is still room for further improvement. One local NGO (Highlands Church Solidarity and Action Centre) has from time to time taken a more aggressive stance against the project--supporting calls for Phase 1B to be delayed. As of mid-March 1998 they seemed to support the Lesotho Council of NGOs' position and have no objection to the project proceeding to Phase 1B.[48]  

On the one hand, a senior bank official acknowledged that Christian Aid, IRN and EDF `created space for greater Bank and government attention to mitigation measures'. In turn, concluded Fox and Brown, such attention `reflects a broader pattern in which public pressure from Northern NGOs encourages World Bank officials to grant more legitimacy to local NGOs as alternative interlocutors'.[49]

But on the other hand, this was also a recipe for cooption, even temporarily, and not only of Lesotho's NGOs, as Roome recorded above. As discussed below, there also arose an urgent need for the Bank and South African government to coopt--or failing that, intimidate--local organisations on the other side of the border, once the green critics were joined by activists from Soweto and Alexandra. For in 1998, the stakes suddenly rose when Johannesburg township organisations began arguing for a long postponement of the Mohale Dam.  

5. The brown critique  

The LHWP is, in the discourse of the South African state, a developmental project. Quotes above by Mandela and Asmal are emblematic of the marketing job. The reality, in fact, appears to be the opposite: the LHWP makes water provision to low-income, black Johannesburg residents more, not less, difficult.  

Who consumes Vaal water?

The benefits of the LHWP will primarily flow to wealthy farmers, corporations and white consumers.[50] In addition, foreign investors who receive regular invitations from Thabo Mbeki--in the spirit of the quotation above, justifying armed intervention to secure Lesotho's water--would be potential beneficiaries.

Of water sold in Gauteng in 1995 by Rand Water--comprising 41% of the Vaal River System's supply--only 25% was bought by low-income consumers (i.e., 10% of the total outflow from the Vaal). In contrast, 36% went to middle- and upper-income consumers, 24% to industry, and 15% to large mines.

As for those without water due to apartheid and unaffordability, in 1995 there were an estimated 1.5 million residents who still did not have direct access to water. To supply these people with 50 litres per person per day would have required only 27 million m3 of additional supply annually, representing a small fraction of the water that middle- and upper-income Gauteng consumers use to water their gardens and fill swimming pools.[51] The LHWP's Katse Dam provides 580 million litres a year and Mohale will add another 350 million litres of water that can be delivered to Gauteng at full capacity, for a total of 930 million litres.

The World Bank had already overestimated the demand for LHWP water in Gauteng by 40% when Katse was being constructed, by Roome's own admission. Rand Water Board's own demand curves for Vaal River water during the half-century from 1998-2048 varied enormously, from 4 billion litres a year in 2048 according to a `low demand' scenario, 4.4 billion according to a `most probable' scenario, and up to 13 billion litres for the `high' option.[52]

The irony of the LHWP was that regardless of such small amounts required for consumption by low-income people, an enormous additional water cost burden was already, by 1998, being borne by impoverished township dwellers. As noted above, Asmal insisted that `the end users will pay for the project, at tariffs well within the capabilities of the beneficiaries, making it economically viable'.[53] Yet the data below throw this assessment into question.  

Who pays the bill?

From the mid-1990s, Christian Aid in London, EDF in Washington and the Group for Environmental Monitoring (GEM) in Johannesburg began drawing attention to the LHWP's demand-side issues, especially consumption and conservation. But it was only when thousands of Soweto residents marched to the Johannesburg city council in July 1996, protesting against a 30% increase in their water tariffs, that the Soweto Civic Association learned of the LHWP's cost implications from municipal officials.

The rising cost of both bulk and retail water was soon to become an important debating point, as two joint workshops with the Alexandra Civic Organisation in 1997 established that because of rising bulk water costs, the LHWP would make it harder for Gauteng municipalities to a) keep water prices down; b) desist from water cutoffs; and c) repair leaking pipes in the townships.

This realisation catalysed a temporary brown-green, cross-border alliance and ultimately, as explored in more detail below, an April 1998 challenge to the World Bank Inspection Panel by three of the civic leaders. By delaying the Mohale Dam for an estimated 17 years, the Alexandra residents insisted, resources could be spent on conservation and maintenance, as well as on redistributing water to township households. The residents cited a Rand Water official who argued the annual savings of a Mohale Dam delay at current interest rates was R800 million, which in a single year would have easily been sufficient to repair existing systems.[54]

If instead, the LHWP went ahead and the R800 million per annum was to be spent on servicing the Mohale Dam debt, on top of the debt servicing associated with the Katse Dam, then the bulk supply cost of Vaal River water would have to increase by a factor of at least five, to R1.50/Kl in 1995 prices, as shown in Figure 6. At that stage, according to Roome, existing bulk water supply costs in the Vaal catchment reflected present-value real costs of R0.05/Kl for a billion Kls per year supplied through the Vaal Dam; R0.10 for another 450 million Kl through Bloemhof; and R0.20 for the next 800 million Kl through Tugela Vaal. The Katse and Mohale Dams were expected to add another 800-1,000 million Kl at a cost of R1.50 for each Kl.[55]

The huge cost of Katse began accruing to Dwaf and then to Rand Water, and was quickly translated into price increases to municipalities of 35% between July 1995 and July 1998. In turn, Johannesburg passed these costs on to consumers, of whom the poor paid a higher proportion: a 55% price increase for the first block of the Johannesburg block tariff.[56] Other municipalities in Gauteng also imposed a higher increase during the late 1990s for the first block of water, than for higher volumes of consumption. 

As should have been anticipated, as water prices rose, the ability of municipalities to collect services payments from low-income residents fell. That led to intensified municipal water cutoffs. In short, the poor would pay disproportionately for mega-dams which mainly benefited wealthy people and big mines and industry, and would suffer cutoffs when their bills became unaffordable.  

Alexandra's thirst

The injustice was even more acute because household environmental conditions faced by Johannesburg township residents during the late 1990s and today, reflect systemic apartheid-capitalist underdevelopment. Historically, these townships were primarily sites of labour reproduction, with virtually no commerce allowed and very little in the way of education and community amenities provided. Alexandra was a classical example of how townships maintained and reproduced South Africa's very poorly paid proletariat, because the southern hemisphere's wealthiest neighbourhood--Sandton--is just 5 km to the west, over a hill and across a valley and highway.[57]

Would water from Lesotho salve the wounds of apartheid-capitalism? Inadequate municipal services were integral to the development of township underdevelopment. The system ignored the oft-documented net benefits that giving low-income people adequate supplies of water and electricity yield for public health, the urban environment, gender equality, productivity, local economic development and the like.[58]

Little of that mattered in a setting that at its core was designed to squeeze as much unskilled, poorly remunerated labour time out of working-age black men as possible. Women were typically forced to remain behind in rural areas, providing an enormous `social wage' subsidy to urban capital in the form of free child-rearing for workers too young to go to the mines and factories, health care for sick workers, and old-age care for retired workers. As expressed in the community leaders' complaint to the World Bank Inspection Panel,  

By consuming less than 2% of all South Africa's water, the country's black township residents together use less than a third of the amount used in middle- and upper-income swimming pools and gardens, not to mention white domestic (in-house) consumption or massive water wastage by white farmers who have had enormous irrigation subsidies over the years and who use 50% of South Africa's water.[59]  

Reflections of the miserable state of apartheid-era infrastructure include the following:  

Out of every 100 drops that flow through Gauteng pipes, 24 quickly leak into the ground through faulty bulk infrastructure. Still more waste occurs in leaky communal, yard and house taps. In the higher elevations of Alexandra township, these problems are witnessed in the perpetual lack of water pressure. Hundreds of thousands of low-income people in Alexandra and other townships have no immediate house or yard access to reticulated water supplied by our Johannesburg municipality, and instead receive at best only communal access, with all the public health problems that this implies. Indeed, the lack of available water on a universal basis means that public health conditions are worse; geographical segregation of low-income Gauteng residents (from wealthier residents) is more extreme; women are particularly inconvenienced, and their income-generation and caregiving capacities are reduced; and the environment is threatened (in part because of the shortage of water-borne sanitation).[60]  

Rising prices

Most importantly from an economic standpoint, a large proportion of the LHWP costs were being passed from the TransCaledon Tunnel Authority (TCTA) to Dwaf, and then on to municipalities and in turn, to retail consumers. But, as noted above, those customers who had been historically oppressed by lack of access to water paid a relatively greater unit share of the bill. The LHWP costs began to be reflected as the primary basis for retail water price increases beginning in 1994. As the Inspection Panel admitted,  

Since April 1994, the bulk water tariff that TCTA charges Dwaf has slightly more than tripled, rising from R0.242/Kl to R0.751/Kl. During the same period, April 1994 to April 1998, the tariff that Dwaf charges its large consumers, including Rand Water, has slightly more than doubled, rising from R0.457/Kl to R0.945/Kl. This of course includes the amount that Dwaf pays to TCTA for LHWP water ... Rand Water's charges to the municipalities have also increased during this period. From April 1994 to April 1998, the bulk water tariff that Rand Water charges the municipalities increased ... from R1.201/Kl to R1.685/Kl.[61]  

So while bulk water charges to municipalities rose by 35% in large part due to the LHWP between mid-1995 and mid-1998, the levy for the first (lowest) block of the Johannesburg block tariff increased by 55%. In sum, relatively speaking, first-block consumers paid a higher proportion of the increase than did consumers who used more water.[62]

Nevertheless, such reverse Robin Hood price increases were insufficient evidence for MacNeill, whose inspection led the Panel to ask and answer the following question about the LHWP-related price increases:  

How have the municipalities responded? At this point the linkages back to LHWP become very tenuous. At the municipal retail level in Gauteng, a host of factors impact on water charges, and on their collection, and it is simply not possible to isolate one factor against the others.[63]  

This kind of analytical trepidation represents, one might argue, an incomplete (or even incompetent) sustainable-development discourse, because indeed factor analysis of the component costs of municipal water should have been feasible. Because `the Panel is not satisfied that there is prima facie evidence linking this situation to the [LHWP], nor to the Bank's decision to proceed with financing 1B', MacNeill recommended that a full investigation not be carried out.[64]

Had such an investigation been mandated, it would have confronted the Alexandra residents' allegation that:  

Municipalities have borne the costs of rising water prices and limited retail affordability in recent months, and are passing them on to workers, who are increasingly suffering wage and retrenchment pressure, and to communities, in the form of increased levels of water cutoffs. This reflects both overall municipal fiscal stress (as central to local grants declined by 85% in real terms from 1991/92 to 1997/98) as well as higher priced bulk water costs. Debts by Gauteng municipalities for bulk sewerage and bulk water supplies that are more than 60 days overdue amounted to R69,000,000 at the end of 1997, and another R20,000,000 in water-related debts were between 30 and 60 days overdue. The 24 Gauteng municipalities raised total income of R968,000,000 from water bills to all classes of consumers in 1997 and spent R1,019,000,000 on water services (a deficit of R51,000,000). In contrast, of the 236 municipalities that report across South Africa, water bills raised R2,414,000,000 in 1997, and expenditures were just R2,388,000,000 (a surplus of R26,000,000). This is surprising given that Gauteng is South Africa's wealthiest province. The fiscal stress caused by deficits on the water account are part of the reason that the following Gauteng municipalities were declared, in December 1997, to be in default of government `viability' criteria (sufficient cash and investments to meet one month's personnel bill): Johannesburg, Pretoria, Alberton, Brakpan, Randfontein, Bronkhorstpruit, Walkerville and Vereeniging Koponong.[65]  

Inability to pay

In turn, the Alexandra residents continued, this fiscal crisis was being transferred to communities:  

The direct consequence of rising indebtedness has been intensified municipal `credit control' against those households who can not afford to pay for increasingly costly water. Rand Water price increases announced in February 1998--which were more than 50% above the inflation rate, because 75% of the increase is from the LHWP--will affect the claimants at a time that unemployment is increasing, overall municipal bills are being increased and some wealthy ratepayers are offering stiff resistance to paying their fair share. The implications of rising water prices and the lack of a `lifeline tariff'--a basic water service available to even to the very poor--include not only switching of funds in household budgets away from other necessities, but also a dramatic increase in residential water cutoffs in Gauteng since early 1997. According to the Department of Constitutional Development's `Project Viability', 24 out of the 30 Gauteng local authorities (representing a population of more than 12 million people) that replied to an official questionnaire, engaged in water cutoffs. These cutoffs affected 512 households in the first quarter of 1997, 932 households in the second quarter, 1,210 households in the third quarter and 5,472 households in the fourth quarter. The ability of many of these households to afford their bills was limited, as witnessed by the fact that only 252, 449, 613 and 1,064 Gauteng households were reconnected in those four quarters of 1997, respectively. There are many other potential indicators of the costs of increasing water tariffs associated with the LHWP, including public health costs and ecological problems (as excessive water-borne sanitation costs lead to informal sanitation arrangements), most of which generate a bias against low-income women, which should also be researched and factored into the water pricing and access policies. However, these are at present not being adequately considered, due to the intensive pressure municipalities face to balance their books in the very short term.[66]  

The cutoffs intensified during 1998. Unfortunately, no detailed statistics about municipal `credit control' were released from 1998 to 2001, because the Project Viability reports were so depressing that publication of the series was discontinued by Pretoria. But to illustrate the scale of the epidemic, in the black township of Leandra in neighbouring Mpumalanga province, 70,000 residents had nearly three-quarters of their water supplies cut by Rand Water for several months. The victims included residents who paid their bills, by virtue of being victimised by official mains cuts.[67]

MacNeill and the Inspection Panel appeared entirely unsympathetic, and by muddying the problem of affordability constraints--the main reason people don't pay their municipal bills--with an alleged culture of nonpayment, the Panel concluded that punishment was in order:  

Non-payment for services began as a strategy in the struggle against apartheid. It has continued as a habit of non-payment if not a culture of entitlement ... The Inspector was informed that the Government of South Africa, Dwaf, Rand Water and the municipalities have taken a firm position on payment for services, including water and sanitation services. Failure to pay is resulting in cutoffs. Given the many factors at play, however, it is clearly difficult, perhaps impossible, to determine the extent to which non-payment and hence cutoffs stem from this habit of non-payment or from a simple inability to pay.[68]  

At issue here was whether LHWP expansion would aggravate rather than ameliorate the affordability problems. The matter was urgent, for Gauteng municipalities would continue reacting to extremely serious financial difficulties by dramatically increasing the pace of water cutoffs to low-income consumers as well as the retail price of water. The Inspection Panel did not deny the possibility of a direct link, but its tools of sustainable-development and environmental-impact analysis were not sophisticated enough for it to measure that link. And MacNeill appeared to mix in, for further effect, an anti-popular political bias.  

The demand-side and redistributive alternative

An even larger innovation associated with the sustainable-development thesis now came into play: the strategy of demand-side management. The need for South Africa to adopt a conservation strategy was not disputed in any of the discourses, although the Bank would not accept claims (e.g. by a Rand Water official) that as great as 40% water savings could be achieved through conservation strategies.[69] Roome rebutted, `It is not clear what the scope is for further demand management ... Demand management capabilities and their impact in South Africa are theoretical and have not yet been tried and tested'.[70]

More important than the absolute amount of water savings, was whether the additional costs associated with the LHWP would act as a disincentive to conservation. The terrifying logic here, was that in order to pay for the extremely expensive LHWP construction, its downstream buyers, especially Rand Water, would have to sell (not conserve) the LHWP water. Conservation would make the full cost-recovery of the LHWP construction costs that much harder. The Bank claimed not, and the Inspection Panel was neutral but placed its faith in Dwaf's stated commitment to conservation.

There was, however, an additional problem that very directly related to the Alexandra residents' redistributive agenda. Demand-side management entails a variety of reforms, according to the Alexandra residents:  

repairing our townships' leaky connector pipes and leaky water taps, modernising and fixing metres, changing water usage patterns through progressive block tariffs, promoting water-sensitive gardening and food production, intensifying water conservation education, regulating or prohibiting excessive watering of suburban gardens, implementing other water use regulation, clearing invasive alien trees, promoting school water audits, billing consumer with more informative material, and installing low-flow showerheads, dual-flush toilets and similar mechanical interventions.[71]  

The most important and readily available demand-side strategy is the progressive block tariff, through which a free lifeline is available for all lowest-tier consumption but increasing prices are charged for subsequent consumption. The combined objectives of conservation and distributive justice via block tariffs are taken up again in Chapters Four and Five.

Interestingly, even the World Bank itself, in its 1994 World Development Report on infrastructure, endorsed a lifeline supply and progressive block tariffs:  

Subsidized provision of infrastructure is often proposed as a means of redistributing resources from higher-income households to the poor. Yet its effectiveness depends on whether subsidies actually reach the poor ...

There are, however, ways in which infrastructure subsidies can be structured to improve their effectiveness in reaching the poor. For example, for water, increasing-block tariffs can be used--charging a particularly low `lifeline' rate for the first part of consumption (for example, 25 to 50 litres per person per day) and higher rates for additional `blocks' of water. This block tariff links price to volume, and it is more efficient at reaching the poor than a general subsidy because it limits subsidized consumption. Increasing-block tariffs also encourage water conservation and efficient use by increasing charges at higher use.[72]  

The Bank and Pretoria v. cross-subsidisation

This 1994 advice from head office was ignored, indeed rejected, by both Roome and MacNeill. As the Alexandra residents complained, `The possibility for changing water usage patterns through progressive block tariffs was never factored in to LHWP demand calculations, in part because key Bank staff (though not the Bank's Washington headquarters) explicitly opposed differential pricing of water'.[73] The residents referred to Roome's October 1995 presentation to Asmal, which argued against sliding tariffs, citing in particular the case of Johannesburg.

At the time, Johannesburg (the `Central Wits' region) had a four-block tariff structure which rose gradually from R1.20/Kl for 0-10 Kls per month, up to R3/Kl for more than 45 Kl/month consumption, as shown in Figure 7. Roome's only valid criticism of Johannesburg's water pricing model was that the rising block tariffs `may limit options with respect to tertiary providers--in particular private concessions much harder to establish'.[74]

This criticism is understandable, although not forgiveable, in view of the World Bank goal to privatise municipal water. As we discuss in more detail in Chapter Four, private bidders would indeed be deterred if they encountered an obligation to consider redistribution--in the form of a lifeline water supply and sharply rising tariff for hedonistic users--when pricing water to maximise profit. The reason for this is that the firm's curves for marginal cost (each additional unit) and marginal revenue (ideally running parallel, so as to `get the prices right') necessarily depart from a redistributive water pricing structure. This is a topic we return to later.

Most South African cities moved in Roome's favoured direction, i.e., away from cross-subsidisation, prior to the ANC's September 2000 promise of a free lifeline water supply and rising block tariff. Tellingly, instead of raising the slope of Johannesburg's near-flat block tariff to levels that would have achieved social justice and conservation, the city managers hired World Bank consultants as part of the Igoli 2002 corporatisation programme. The city's strategy, until July 2001, was to provide only a small grant--R30 per month for water and a bit more for other services--to `indigent' households whose poverty status could be confirmed through stigma-inducing `means-testing'. Instead of finding several hundred thousand qualified households, the city signed up only a meagre 24,000 recipients.[75]

Across Gauteng, prior to the implementation of the free water policy, the Palmer Development Group found in its survey of Rand Water Board users that low-volume users had systematically been charged more than higher-volume users since 1996: `It is evident that there is a continuing increase in tariffs in real terms, of the order of 7% per year for all blocks. Some of this increase may be related to increasing bulk supply costs and some may relate to improved service. But there is a concern that a part of the increase relates to decreasing efficiency. A further concern is that the lowest block is the one which is increasing fastest'.[76]

Indeed, amongst the municipalities served by Rand Water during the late 1990s, those at the first block of consumption paid 39% more, after inflation, than they had in 1996. The more hedonistic consumers' rate went up only 24% (Table 4).  

Table 4   Residential water tariff increases imposed by Rand Water-supplied municipalities, 1996-2000

(Rands per thousand litres, real 2000 currency)[77]  







% rise, '96-00

Block 1 







Block 2 







Block 3 







Block 4 








The reverse Robin Hood policy ended finally, after July 2001, when the free services policy was partially adopted in Gauteng cities. At that point, Johannesburg adjusted its tariff curve in a slightly more progressive direction. Beyond the free 6 kl/household/month, a R2.30/kl price was applied up to 10 kl/h/m. From 10-15 kl/h/m, the tariff was for R4.10/kl; from 15-20 kl/h/m, R4.60; from 25-40 kl/h/m, R5.50/kl; and above 40 kl/h/m, R6.50.[78]

What would that mean, price-wise, for a grandmother in a township looking after a dozen dependents on a measly monthly pension? Even after July 2000 when the new free water policy allegedly came into effect, if she and the others consumed the 50 litres recommended for human health and hygiene each day, the roughly 20 kl per month would cost R53 in Johannesburg, nearly a tenth of her monthly income. In some towns served by Rand Water, the cost would be yet higher: R90 in Randfontein, and more than R75 in Emfuleni, Lesedi, Midvaal and Highveld East.

As for industrial tariffs, they have been kept on a regressive schedule, so that extremely high volume users (in excess of a million litres per month) pay declining rates in many towns supplied by Rand Water. In Johannesburg, the tariff was set at R4.60 in July 2001.  

Asmal's agenda

Asmal, meanwhile, finally endorsed progressive block tariffs in principle before he moved to the education ministry. But as shown in Part Three, he explicitly opposed the provision of free water as the lowest-block lifeline price. Moreover, Asmal never overrode a White Paper on Water and Sanitation which as early as 1994 had insisted that water should be charged at full marginal cost. Inexplicably, Asmal's neoliberal bureaucrats and advisers had convinced the new minister to define lifeline price as the equivalent of `operating and maintenance' expenses.[79] The World Bank Inspection Panel also endorsed a definition of lifeline that fell far short of being free of charge.[80]

Although his 1998 National Water Pricing Policy contained a provision for a bulk `free' lifeline reserve of 25 litres per person per day for all South Africans, Asmal made no effort to assure that once water was provided to the water boards and municipalities, it would then be purified and supplied to residents free, or for less than operating and maintenance costs. Given the vast increases in the overall recurrent costs of bulk water supply because of the LHWP, Asmal's abstract commitment to a lifeline human reserve in the water pricing structure would offer no relief.

As chair of the World Commission on Dams, however, Asmal did benefit from a more critical group of researchers and commissioners. In November 2000, the WCD report explicitly recommended that a `priority should be to improve existing systems before building new supply, [and] that demand-side options should be given the same significance as supply options'.[81] On a variety of other brown and green issues, the Commission backed the LHWP critics' perspectives.

Indeed, it would soon became clear that the massive contradictions between the WCD report and Dwaf's desire to expand the Lesotho dams would require yet more political obfuscation. Asmal requested that ex-president Nelson Mandela introduce the report at its London launch in November 2000, and Mandela's speech denied the obvious:  

We knew the controversy and complexities of such an undertaking [the LHWP] and had to carefully negotiate the political minefields and legal challenges, taking into consideration environmental, financial, social and economic impacts. A dam--a means to an end--which was one option among others, emerged as our best option under the circumstances.[82]  

This statement, without reflection or justification, suggests some of the limits to the sustainable-development discourse. Politically, it shows that Asmal's agenda remained one of self-promotion, and demonstrates why recourse to technical arguments alone was not sufficient to serve the interests of Johannesburg's low-income township residents.  

6. The limits of sustainable-development discourse  

The disappointing official reactions to the brown critique of the LHWP raise the question of whether the sustainable-development argument was the appropriate discursive tactic for the Alexandra critics. The argument, as Harvey describes it, is based on the use of rational scientific (including socio-economic) enquiry in order `to configure what would be a good strategy for sustainable economic growth and economic development in the long run. The key word in this formulation is sustainability'.[83]

The idea of sustainable development is, without question, an improvement over a purely economic approach to environmental management. A deeper consideration of costs and benefits that incorporate ecological values was welcome in the otherwise barren--if `impeccable'--context of 1990s neoliberal hegemony. Scientific studies in the spirit of sustainable development, Harvey points out, generated a better understanding of  

acid rain, global warming and ozone holes demanding wide-ranging collective action beyond nation-state borders, thereby posing a challenge (legal, institutional, and cultural) to the closed bureaucratic rationality of the nation state ...

This kind of science provided crucial support to many environmental pressure groups, many of whom initially viewed scientific rationality with skepticism and distrust. The thesis of ecological modernisation [sustainable development] has now become deeply entrenched within many segments of the environmental movement. The effects, as we shall see, have been somewhat contradictory. On the one hand, ecological modernisation provides a common discursive basis for a contested rapprochement between them and dominant forms of political-economic power. But on the other, it presumes a certain kind of rationality that lessens the force of more purely moral arguments (cf. the comments of Lois Gibbs cited above) and exposes much of the environmental movement to the dangers of political cooptation.[84]  

Technicism and power politics

Here controversy over the Mohale Dam reflects a broader phenomenon, not least because the World Bank and its Inspection Panel have moved onto turf traditionally associated with the `bureaucratic rationality'--and especially the social control functions--of the nation-state. Thus if in reality the LHWP was initially in part a sanctions-busting, prestige project with crucial geopolitical overtones, and later a scheme to assure water access to some of the least deserving companies and upper-class households anywhere in the world, nevertheless, its socio-ecological critics had to be treated by project sponsors with extreme ideological care.

At stake, after all, were the reputations of the World Bank, of big dam projects in general (as Roome's opening quote suggests), and of the ecologically-modernised WCD and its chairperson, Kader Asmal.

Such a challenge perpetually looms for sustainable-development technicists, as Harvey remarks: `Some sort of configuration has to be envisaged in which ecological modernisation contributes both to growth and global distributive justice simultaneously. This was a central proposition in the Brundtland Report for example'.[85] The reality, however, is that such goals are sometimes so contradictory, as in the LHWP case, that even Brundtland Report author MacNeill was incapable of reconciling them, and resorted instead to propping up the unsustainable status quo.

In this context, it is therefore easy to understand the significant attention that skilled Bank technocrats paid to the LHWP's social implications--poverty, displacement, livelihood, and downstream consumption--as well as its ecological damage. In early 1998, while formally welcoming the Katse Dam water to South Africa, Asmal himself eloquently articulated the sustainable-development thesis:  

As we move into the new millennium, as we move forward into the twenty-first century, there is ever less and less money available for building dams; there are ever fewer and fewer rivers left undammed; there is ever more and more resistance to the enormous social and environmental impacts of large dams. In the international field this tension has been recognised both by environmental groups and by those who fund major water infrastructure development.

The World Commission on Dams has been established by the World Bank and the International Union for the Conservation of Nature to investigate a way to preserve the balance between the need for the development of water infrastructure, the protection of the environment and the recognition of the rights of rural populations, especially in developing countries, those people, as in Lesotho, who may lose their land, livelihoods and way of life as a result of the building of a dam.[86]  

But was the brand of sustainable-development discourse claimed by Asmal, the Bank, the Inspection Panel and the WCD up to the political challenge posed by the green-brown critique?  

Participation or repression?

We take up this issue in detail below, in considering the formal WCD recommendations of November 2000. But one in particular, favouring negotiations `in which stakeholders have an equal opportunity to influence decisions from the outset of the planning process',[87] immediately came into stark conflict with the reality of Southern African politics. According to Hoover's IRN review of the LHWP against WCD recommendations,  

Participation by affected communities has been minimal at best. Affected people have had no forum to effectively negotiate how the project's dams would impact them, let alone influence the decision to build them.

In late 1999 agents of Lesotho's National Security Service confiscated materials about the WCD from a man affected by the LHWP after he returned from NGO-sponsored regional hearings for the WCD. In Lesotho, security agents routinely attend community meetings on the LHWP, inhibiting meaningful participation.[88]  

Lesotho's heavy-handed state reminds us of Asmal's own intimidation of the Alexandra and Soweto civic leaders. The minister's first, behind-the-scenes, reply to the LHWP community critique was revealing, for he complained about a procedural problem: that the draft Inspection Panel claim filed by Alexandra and Soweto activists took him by surprise.[89]

But at a much more politicised level, Asmal's letter to Alexandra civic leaders on 19 March 1998 bristled with intimidation: `In the circumstances, I cannot see any purpose in continuing the dialogue and have accordingly instructed my Department not to proceed with arrangements for the proposed workshop at which your concerns could have been systematically reviewed'.[90]

Asmal wrote, `I do not raise this as a threat', but that was certainly the implication felt in the townships, where ANC branches also began harassing the civics to lay off the LHWP. Repressive politics thus intervened where sustainable-development discourses didn't do the trick.  

Bureaucratic rationality or irrationality?

Setting aside the political browbeating, there remain extensive technical questions about the Bank's and Panel's justification of the Mohale Dam.

For example, in relation to Gauteng municipalities' comprehensive failure to implement demand-side management measures, `The Panel did not consider this because it does not relate to Bank Management acts or omissions in compliance or non-compliance with the OD'.[91] In fact a reasonable interpretation of Bank Operational Directive 4.00--`Design of investment programs for supplying water or energy should consider demand management'--would lead to an investigation of the ultimate municipal end-users of Bank-financed water, particularly given the well-documented bias in consumption patterns.

Or as another example, MacNeill found that there are graduations in Johannesburg's block tariffs, which did `not appear to bear out the assertions made by the [Alexandra residents] concerning block rates'.[92] But citing the very small gradations does not contradict the Alexandra residents' argument that if far greater progressivity in block rates were imposed, there would be far greater success in water conservation and redistribution.

MacNeill's concern over non-payment for services[93] could be easily addressed by applying a universal (free) lifeline policy that would allow trickle flow after consumption of the first block. Such a policy would be entirely consistent with the `culture of entitlement', disparaged by the Panel, that in turn is entirely consistent with the South African Constitution's granting of rights to water in its Bill of Rights.

It is, therefore, entirely within the spirit of sustainable-development discourse, and also consistent with environmental justice arguments, to criticise the Panel for bureaucratic irrationality. Specifically, its report failed to give credence to the following quite reasonable questions:  

•    given the bias of access--and wastefulness--in water use towards wealthier, predominantly white, consumers, should redistributive measures become a much higher priority than at present?

•    given the perennial shortages of water in South Africa and the threat of drought, should demand-side management be given much higher priority than at present by Dwaf, water boards and municipalities--both on redistributive and conservation grounds?

•    given not only that township infrastructure is continually plagued by systemic physical failure--and given, too, the fact that of three million (mainly rural) households who have benefited from taps installed within 0.5 km of their residence since 1994 an estimated 90% now no longer have access to water due to systemic breakdown based often on lack of affordability--should Dwaf, water boards and municipalities use their resources to improve installation and maintenance on a more generously subsidised basis?

•    given that from 1994 to 1998, LHWP bulk water prices trebled due to dam construction costs, Dwaf bulk prices to Rand Water likewise doubled, and Rand Water prices to Gauteng municipalities soared, in a context of ongoing municipal fiscal crisis, should urgent steps be taken to ensure that bulk water prices are frozen (as was promised by the TCTA and Dwaf) and, most importantly, that Rand Water desists from cutting off water services to entire towns and that municipalities desist from engaging in mass water cutoffs to large sections of townships (as often happens even when individual households pay their bills)?  

Alexandra's brown critics of the LHWP answered these questions firmly in the affirmative. In contrast, various defenders of the LHWP endorsed the existing pricing system, on grounds of sustainable development.  

7. Conclusion  

In the pages above, we have gathered sufficient evidence to conclude that a hydro-political power struggle over the costs and benefits of the mega-dams has tainted the taste of Lesotho's water. Using the LHWP case study, David Harvey's perspective on the politics of environmentalism can now be considered in more depth:  

At this conjuncture, therefore, all of those militant particularist movements around the world that loosely come together under the umbrella of environmental justice and the environmentalism of the poor are faced with a critical choice. They can either ignore the contradictions, remain with the confines of their own particularist militancies--fighting an incinerator here, a toxic waste dump there, a World Bank dam project somewhere else, and commercial logging in yet another place--or they can treat the contradictions as a fecund nexus to create a more transcendent and universal politics.

If they take the latter path, they have to find a discourse of universality and generality that unites the emancipatory quest for social justice with a strong recognition that social justice is impossible without environmental justice (and vice versa). But any such discourse has to transcend the narrow solidarities and particular affinities shaped in particular places--the preferred milieu of most grassroots environmental activism--and adopt a politics of abstraction capable of reaching out across space, across the multiple environmental and social conditions that constitute the geography of difference in a contemporary world that capitalism has intensely shaped to its own purposes. And it has to do this without abandoning its militant particularist base.[94]  

Green-brown fusions and fractures

When the green and brown critiques of the LHWP met, was there, in the process, the possibility of generating a more substantial anti-capitalist environmentalism? Could the Johannesburg township and Basotho peasant activists transcend `the confines of their own particularist militancies' and generate `a more transcendent and universal politics'?

Providing grounds for answering in the affirmative, a joint press statement in late January 1998--signed by the Group for Environmental Monitoring, the Alexandra and Soweto civics, Earthlife Africa, the Environmental Justice Networking Forum, the Lesotho Highlands Church Action Group and the IRN--was critical of the Mohale Dam.[95] In early February, Moshe Tsehlo, acting coordinator of the Highlands Church Solidarity and Action Centre wrote to Roome that `We will now support steps being taken by sister NGOs in South Africa to bring a case to the World Bank's Inspection Panel, claiming that the Bank has not followed its own policies'.

But the critiques were not synthesised. This was due partly to the great geographical distance between the grassroots bases, partly to the extremely effective divide-and-conquer strategies deployed by government officials in both Maseru and Pretoria to counter the growing opposition, and partly to differing conceptions of self-interest.

In the course of a February meeting between Lesotho and South African NGOs facilitated by Lesotho government officials, solidarity eroded and tensions arose between the more conservative Lesotho NGOs and their South African visitors. Even the Church Solidarity and Action Centre was forced to retreat, and withdrew its intention to support the township activists' Inspection Panel claim. The South African community leaders remained fully set against the dam and its high costs, while Basotho activists decided they mainly wanted a better deal on compensation and resettlement.

This was telling, not because it suggests that militant particularisms in two different contexts--rural and urban, green and brown--cannot be fused, but rather the opposite: militancy can too easily wane under conditions of official pressure in countries that have recent experience of deep repression, so that short-term interests prevail over longer-term solidarity. The same waning of militancy was evident when, in the wake of a funded trip to the dam for a few Soweto and Alexandra leaders and under pressure from Asmal's letter and ANC branch persecution, the two civics' top leaders withdrew their 6 March draft claim to the Inspection Panel on 20 April.

Still, enough militancy remained that three residents, David Letsie, Johny Mphou and Sam Moiloa, carried on independently a few days later, although under conditions of anonymity because of the intimidation. They were assisted by their less-vulnerable NGO supporters.

After Roome filed a rebuttal to the Alexandra residents in May, several World Bank Executive Directors visited the site in June. Despite invitations and their presence in a hotel a few kilometres from Alexandra they did not make time to meet the three residents. They subsequently approved the $45 million Mohale Dam loan. In July, the Panel's MacNeill visited and conducted a preliminary investigation of the residents' case. When in late August the Inspection Panel rejected the brown critique, and when a green critique did not immediately emerge, it appeared that community opposition to the LHWP had been crushed.  

A renewed grassroots alliance, a disdainful state

But just over two years later, an explosion of LHWP criticism emerged anew, and the elusive green-brown coalition was suddenly reconfigured. The occasion was the launch of the WCD final report, which Asmal presided over in several regions of the world during November 2000. After considering the overlap between their own socio-environmental concerns and the Commission's analysis, a Southern African Preparatory Meeting of environment NGOs and community organisations (including Alexandra and Lesotho activist groups) convened and issued a statement.

The groups called on the World Bank, other development banks, export credit agencies, bilateral agencies, governments and authorities to  

immediately establish independent, transparent and participatory reviews of all their planned and ongoing dam projects. Whilst such reviews are taking place, project preparation and construction should be halted. Such reviews should establish whether the respective dams comply, as a minimum, with the recommendations of the WCD. If they do not, projects should be modified accordingly or be stopped altogether. All institutions which share in the responsibility for unresolved negative impacts of dams should immediately initiate a process to establish and fund mechanisms to provide reparations to affected communities that have suffered social, cultural and economic harm as a result of dam projects. All public financial institutions should place a moratorium on funding the planning or construction of new dams until they can demonstrate that they have complied with the above measures.[96]  

The Alexandra leaders were joined by groups from Lesotho, amongst which were some that had earlier endorsed the Mohale Dam.[97] In a taped television interview, Alexandra leader Mphou was ecstatic that the previous dispute about the merits of the Mohale Dam was past: `This is very very wonderful. Our colleagues from Lesotho agree with our problem about what is happening in our poor community in Alexandra'.[98]

But the World Bank, Kasrils and Muller ignored the request, and did not even reply to the communique from the social movements. Moiloa also criticised Asmal's uncaring attitude at the Commission report launch:  

I am not satisfied with the answer from Kader Asmal. In the first place, the Inspection Panel which he claims answers us, did not answer us, because they said there is no link between the Lesotho problems and the South Africa problems. So I'm wondering, because the link I know, is water. What do these well-educated people think, that there is no link, what do they mean?

We are going to go on with the battle to make sure that the poorest of the poor are catered for. The World Bank and the South African government must stop this LHWP and concentrate on uplifting the standard of living of the people. So we are going to network more with the NGOs and community organisations of Lesotho and Gauteng, and we are going to proceed with this battle, and we are going to win it.

We are not going to stop the engagement with the World Bank. We are going to pursue the battle together with the people of Lesotho, as we have gathered from them that they do not benefit. They say it point blank to us that they do not have access to water, which is the same thing as with us. Together with them we're going to forge ahead.[99]  

Renewed critiques

Whether such an informal popular alliance can hold and strengthen over time, depends upon the character of the fight being waged. After Letsie died in November 2000, Moiloa and Mphou were joined by well-known Soweto activist Trevor Ngwane, in arguing that  

The WCD report made sound recommendations that, when applied to the LHWP, makes a mockery of Muller's claim to balance the needs of environment, displaced people and water consumers ...

Lesotho's poor people have been the very last to benefit from the money that Gauteng consumers pay to Maseru ... The Lesotho Highlands Water Development Fund has been unveiled as corrupt, with officials allegedly channelling funds meant for resettlement only to supporters of the ruling party.

The WCD argued that `special attention is necessary to ensure that compensation and development measures are in place well in advance' of resettlement, and that `a clear agreement on the sequence and stages of resettlement will be required before construction on any project preparatory work begins.

In reality, a large proportion of the rural Basotho who were displaced by the dams received no compensation, and many still have no access to safe drinking water because the cliffs are too steep to go down to the dam.

In addition, the WCD calls for `an environmental flow release to meet specific downstream ecosystem and livelihood objectives', and insists that `a basin-wide understanding of the ecosystem's functions, values and requirements, and how community livelihoods depend on and influence them, is required before decisions on development options are made'. There were never such studies for the Lesotho dams prior to construction.

Last year, an Instream Flow Requirement study of downstream communities and ecosystems concluded that the entire Lesotho dam project will reduce Lesotho's river systems to `something akin to wastewater drains'.

Phase Two of the Lesotho dams project will reduce the flow of water into South Africa by 57%.

Instead of building more dams, we should have more conservation by those rich people, big companies and commercial farmers who waste the vast bulk of society's water ...

In Alexandra and Soweto, we are still suffering from apartheid-era systems that leak out roughly half the water that goes into the pipes, before they dribble from our communal taps.[100]  

Moreover, Basotho peasants also continued suffering, to the point that on 19 November 2001, an extraordinary protest occurred in several Highlands sites. More than 2300 people demonstrated against the authorities. Their petition complained, `We have tried by all possible means to get a fair and reasonable compensation for our property ... but this was all a fiasco. We were promised development ... but this has not materialised to date'.

One of the peasants' main advocacy organisations, the Transformation Resource Centre (TRC), had also planned a protest of resettled people in Maseru, but the police refused to grant permission. According to an IRN report,  

Crowds of 1000 affected people gathered at both Katse and Mohale Dams on Monday, while 300 more marched at Muela Dam. They marched and sang protest songs before delivering the petitions containing their grievances. At Mohale Dam, they rolled large stones onto project access roads, briefly stopping construction at the site. Mohale police, angered that some protesters failed to gather at pre-agreed marching areas, assaulted a group of demonstrators with batons and whips. Three elderly women required medical attention after being beaten about the face and back ...

`These protests show that affected people are running out of patience', said TRC Coordinator Motseoa Senyane, `The World Bank and other project authorities have not adequately addressed the communities' concerns in the past. It is time that they do so'.[101]  

The use and abuse of the WCD

By this time, it was evident that technical critiques and responses didn't solve the problems, but instead only revealed the shallowness of commitment by the World Bank and Pretoria to sustainable development. On the one hand, the political momentum of the green-brown alliance had been halted by intimidation in March 1998. By August that year, when MacNeill snuffed the Inspection Panel claim, the militant-particularist unity between the Alexandra residents and Basotho peasants had been fragmented.

But on the other hand, the November 2000 WCD report became another organising handle for activism. That report was, ultimately, downgraded within the Bank. The institution's senior water adviser, South African John Briscoe, actively lobbied Southern governments to reject the findings during the first few months of 2001.[102] By March 2002, Briscoe had issued the final draft of the Bank's Water Resources Sector Strategy (WRSS), which claimed to `draw heavily' on the Commission report.[103]

In reality, it did nothing of the sort, according to social movements and NGOs active on dam issues, who reported to Briscoe in May 2002 that he had neglected  

to discuss any of the WCD's recommendations for changes in water and energy planning and management. In two of the few places where the WCD is mentioned its findings are distorted to justify the WRSS's support for major dams and privatisation. This evasiveness and dissembling is unfortunately consistent with the Water Resources Management Group's overall reaction to the WCD report ...

The two main thrusts of the WRSS are promoting the privatization of urban water supply and boosting Bank funding for major dams and inter-basin transfers, which it terms `high-reward/high-risk water infrastructure'. The `risk' in this expression refers mainly to the risk to the Bank's reputation of being involved in controversial projects, rather than the risks to communities, national economies and the environment ...

The World Bank's singularly negative and non-committal response to the WCD Report means that the Bank will no longer be accepted as an honest broker in any further multi-stakeholder dialogues. Experience since the publication of the WCD Report shows that common ground exists between civil society and forward-looking private sector and government institutions. In contrast, the World Bank's response to the WCD, its role in projects like the Bujagali dam in Uganda, and the new draft WRSS indicate that the Bank is entering a new era of intensified controversy and conflict.[104]  

Even the Engineering News Record (ENR), an industry journal, was stunned by the Bank's attitude. The ordinarily pro-dams editorialists confided,  

How can a co-sponsor of this groundbreaking achievement [the WCD Report] justify ignoring WCD's findings? What deplorable hypocrisy. In the WCD guidelines, ENR sees the best hope for balancing what have long been seen as irreconcilable conflicts among stakeholders over dam construction. If the study's own sponsors refuse to be guided by them, all we can anticipate is continued sclerosis in dambuilding.[105]  

As if on cue, Klaus Toepfer, the executive director of the UN Environment Programme--which inherited the Commission's research and dissemination mandate--got the drift of the multilateral financial agenda. In May 2002, he declared that to have the WCD report `implemented word for word' is not a `viable strategy'.[106]

Because the Commission report gave both the green and brown critics' case more credibility, it threatened the construction of future mega-dams in Southern Africa. Asmal's replacement as minister of water, Ronnie Kasrils, began denouncing the report as inapplicable to regional conditions. Moreover, during his budget speech to parliament on 15 May 2001 Kasrils endorsed the single most egregious large dam under construction in the world, at the Three Gorges on the Yangtze River, where he had recently paid a visit: `I must state my admiration for the determination and care with which the Chinese government is promoting this vast undertaking'.[107]

Two months later, in July, he had found sufficient anti-WCD allies in a South African `multistakeholder initiative' that declared itself `broadly supportive of the strategic priorities' of the WCD--yet the key proviso was `that the guidelines need to be contextualised to the South African situation'.[108] This would mean, in practice, business as usual.

The same month, Kasrils also sought out similar sentiment in governments across the SADC region. Using Dwaf's banal argument that the North is overdammed, South Africa is correctly dammed and Africa is underdammed, they pronounced,  

While it is recognised that the development of any dam will need to reconcile the needs and entitlements of interested parties, including the environment, the SADC Water Sector Ministers find the suggestions that the WCD guidelines should be made compulsory are unacceptable.

There is certainly a danger that an injudicious application of the guidelines would make the development of water resources far more expensive or even unaffordable. The result could be to block the development so urgently needed by the people of the region to improve their quality of life.[109]  

Also in July 2001, SADC and other African ministers met in Lusaka to adopt Nepad (previously known as the New African Initiative) which includes the following objective: `112. To exploit and develop the hydropower potential of river basins of Africa'. Nepad neglects to cite, much less rebut, enormous controversies over new dams in Africa, such as the Mohale, the Maguge in Swaziland, the Bujagali in Uganda and the Epupa in Namibia. Criticisms raised include:  

•    large dams in tropical settings have been identified as the cause of higher global-warming gas emissions (due to decay of plant life) than other energy sources;[110]

•    displacement and socio-economic costs of large dams are very high (though rarely if ever incorporated into dam construction costs);

•    downstream environmental implications are often severe;

•    siltation and evaporation undermine the efficiency of dams; and

•    the economic benefits of large dams very rarely approach initial estimates.  

Nearly all the concerns apply to Africa's existing mega-dams, e.g., on the Nile, Upper Volta, Zambezi and Orange Rivers. The ineffective management of dams and run-off systems by Zimbabwe, Zambia and South Africa--in the Zambezi, Save, Limpopo and Crocodile catchments--have been cited as contributing factors to Mozambique's deadly 2000-01 floods, even though the dams were meant to prevent flooding. In short, without some acknowledgement that large dams have had an often devastating impact on societies, environments and economies, Nepad encouraged the repetition of the problems associated with reliance upon inappropriate hydropower.

Within South Africa, Kasrils moved forward with several other substantial dams, including the controversial R1.4 billion Skuifraam Dam on the Western Cape's scenic Berg River. A Dwaf official conceded in 2002 that Skuifraam would `only buy an estimated two more years before demand again equals maximum capacity'.[111] Critics argued that the dam would be unnecessary if government took seriously the possibility of water conservation in Cape Town. Instead of increased water tariffs for hedonistic suburban and agro-industrial consumers, Dwaf and the Cape Town Council cited only recycling and desalination as the (costly) alternatives.

Across South Africa, Dwaf continued to accept the challenge of supply-side enhancements, instead of rigorous demand-side management. In Limpopo Province, work began on two dams in the Olifants catchment estimated to cost R900 million. In the main project, raising an existing dam by five metres would `make an additional 16-million cubic metres a year of raw water available, which has been earmarked for new [platinum] mining development', according to a Dwaf official.[112]  

Anti-dam arguments vindicated?

Finally, as concern grew that Kasrils had gone dam-crazy, Dwaf announced in mid-2001 that Phase 2 of the LHWP would be indefinitely postponed, a point the minister coyly repeated in April 2002 at the Johannesburg Press Club: `The question of further phases of the Lesotho development is still the subject of ongoing discussion and South Africa would always deal sensitively with the issue', but that it might be possible to augment the Vaal River with `a similar project within the country's own borders'.[113] 

But in addition to the decline of gold mining in the Witwatersrand, which was already projected for in 1980s-era studies, one twisted and untenable reason emerged for the lower water-demand curve that lay behind the decision: an anticipated rise in HIV/Aids mortality rates would lower water-demand projections dramatically.[114] There are at least three logical replies:  

•    given a policy of increasing access to anti-retroviral medicines, it is inappropriate for the main government water agency to project mass death and decrease its delivery goals accordingly;

•    people living with Aids require increased access to water in any case, because of the need for much higher levels of hygiene than those who are HIV-negative; and

•    where HIV/Aids is most prevalent, in low-income and working-class black townships, the amount of water consumed is, in any case, an extremely low percentage of the total water supplied by the LHWP via the Vaal catchment.  

Indeed, the more sophisticated modelling at Rand Water showed that Aids was much less significant in future consumption estimates, and that the vast bulk of savings could potentially come from demand management: `A cost of R2 billion for implementing water demand initatives saves almost R30 billion'.[115]

The battle against LHWP's expansion was, however, still not necessarily won. According to the Engineering News in mid-2002, `The options being considered as a new source of water for the country's industrial heartland include the Thukela project and a second phase of the Lesotho Highlands Water Project'.[116]  

Lessons for green-brown alliances, entitlements and syntheses

In spite of all the setbacks and uncertainties, partial victories could be declared against the LHWP, vindicating the core argument of green and brown critics, namely that the mega-dams are inappropriate to the needs of Basotho peasants and township residents alike. Some of the main objectives of the green and brown activists could be scored as progress:  

•    corruption of the main Basotho official by construction companies was identified and punished, with the firms next up for prosecution in mid-2002;

•    no new Lesotho dams would be built in the foreseeable future, thanks to a decision apparently taken in mid-2001 and codified a year later;

•    more attention and mobilisation was occurring around resettlement and compensation issues, especially in the wake of the November 2001 protests at both dam sites;

•    the delegitimisation of the World Bank, Pretoria and the dam-building industry continued apace in the wake of the Bank's and Kasrils' 2001 rejection of the WCD recommendations, as the three continued to work profitably together on new dams across South Africa and the region under the guise of Nepad; and

•    the September 2000 free water promise by the ANC would mean that the water cutoffs and lack of access by Alexandra and Soweto residents would, theoretically, be a thing of the past.  

Ultimately, however, green and brown critiques of the LHWP must come together not merely through momentary simultaneous interests, tactical convergences and demands for moratoria, but in a fully functional and durable manner, including militant protest in town and countryside, if we are to achieve a more transcendent and universal politics. Contestation over water supplies is, after all, one of the world's most crucial geopolitical processes in coming decades, and the LHWP struggle at the end of the twentieth century offers us all manner of lessons.

In the process, we have raised doubts over the integrity of both sustainable-development discourses and the institutions which use them in partial and dubious ways. We have seen the high political stakes and the extent to which these drive politicians to act like thugs. We have seen the roles of the World Bank and multinational corporations in propping up illegitimate regimes and corrupting key officials. We have seen environmental concerns, which whether in the township or countryside are of particular importance to women, ignored or downplayed. We have seen community needs and affordability problems dismissed by incompetent analysts at the World Bank Inspection Panel as a `culture of entitlement', again with especially adverse affects upon women, people with Aids, and other vulnerable low-income township residents.

In a way, this last insult is the one that provides the most hope. For ultimately the rights-based discourses, encompassing both environmental and social justice, must re-emerge and intertwine, across the green and brown terrains, drawing together the rural and the urban in the search for genuinely `sustainable development'. The culture of entitlement must then move across urban and rural, from water to land and environment and gender equity and public health and all the other issues that are drawn together in this case study of hydropolitics.

In the same spirit, here is how William Cronon concluded his famous study of Chicago's ecological footprint, Nature's Metropolis, linking that city's impact on algae-infested downstream water to its noxious air:  

To do right by nature and people in the country, one has to do right by them in the city as well for the two seem always to find in each other their mirror image. In that sense, every city is nature's metropolis, and every piece of countryside is its rural hinterland. We fool ourselves if we think we can choose between them, for the green lake and the orange cloud are creatures of the same landscape. Each is our responsibility. We can only take them together and, in making the journey between them, find a way of life that does justice to them both.[117] 


[1]. Cited in Asmal, K. (1996), `Speech to Group for Environmental Monitoring Workshop on Lesotho Highlands Water Project', in Group for Environmental Monitoring (ed), Record of Proceedings: Lesotho Highlands Water Workshop, Johannesburg, 29-30 August, p. 2.

[2]. Asmal, `Speech to GEM Workshop on Lesotho Highlands Water Project', p. 2.

[3]. World Bank (1998), Lesotho: Lesotho Highlands Water Project--Phase 1B: Project Appraisal Document, (17727-LSO), R98-106(PAD), Water and Urban 1, Africa Region, Washington, DC, April 30, p. 18.

[4]. Muller, M. (2001), `Flood Criticism a One-Sided Discourse', Mail & Guardian, 30 March-5 April.

[5]. Cape Times, 2 December 1998.

[6]. Southall, R. (1998), `Is Lesotho South Africa's Tenth Province?', Indicator SA, 15, 4.

[7]. Sunday Independent, 14 February 1999.

[8]. Mail & Guardian, 20-26 March 2000.

[9]. Roome, J. (1995), `Water Pricing and Management: World Bank Presentation to the SA Water Conservation Conference', unpublished paper, South Africa, 2 October, p. 16.

[10]. Ballenger, J. (1998), `Lesotho Water Project Falls Foul of Environmental Lobby Groups', Business Day, 22 January; see also Business Day, 19 March 1998.

[11]. The relevant documentation, including official reaction, can be found in Bond, P. and D.Letsie (2000), `Debating Supply and Demand Characteristics of Bulk Infrastructure: Lesotho-Johannesburg Water Transfer', in M.Khosa (Ed), Empowerment through Service Delivery, Pretoria, Human Sciences Research Council.

[12]. Asmal, K. and M. Muller (1998), `Watering down the Facts', Mail & Guardian, 8-14 May.

[13]. Barber, S. (1998), `Vote Asmal's Gov't out of Power, But Please, No Whining', Business Day, 9 September.

[14]. Addison, G. (1998), `Dam It, Let's Pour Concrete', Saturday Star, 3 November.

[15]. Hoover, R. (2000), `Evaluating the LHWP Against WCD Guidelines', Unpublished report, International Rivers Network, San Francisco, 17 November,

[16]. Harvey, D. (1996), Justice, Nature and the Geography of Difference, Oxford, Basil Blackwell, p. 389.

[17]. Southall, R. (1998), `Is Lesotho South Africa's Tenth Province?', Indicator SA, 15, 4.

[18]. Horta, K. (1995), `The Mountain Kingdom's White Oil: The Lesotho Highlands Water Project', The Ecologist, 25, 6; Bond, P. (1997), `Lesotho Dammed', Multinational Monitor, January-February.

[19]. Potts, M. (1996), `Presentation by the DBSA to the Lesotho Highlands Water Workshop', in Group for Environmental Monitoring (ed), Record of Proceedings: Lesotho Highlands Water Workshop, Johannesburg, 29-30 August, p. 1.

[20]. Lamont, J. (1997), `SA Seeks More Control over Water Project', Business Report, 1 December.

[21]. Horta, K. (1996), `Making the Earth Rumble: The Lesotho-South Africa Water Connection', Multinational Monitor, May.

[22]. Asmal, `Speech to GEM Workshop on Lesotho Highlands Water Project', p. 2.

[23]. Business Day, 5 August 1999; Washington Post, 13 August 1999. According to the charge sheet, the firms allegedly paid the following into Sole's personal accounts: ABB, $40,410; Impregilo, $250,000; Sogreah, $13,578; Lahmeyer International, $8,674; Highlands Water Venture consortium (Impregilo, the German firm Hochtief, the French firm Bouygues, UK firms Keir International and Stirling International, and South African firms Concor and Group Five), $733,404; Lesotho Highlands Project Contractors consortium (Balfour Beatty, Spie Batignolles, LTA, and ED Zublin), $57,269; Acres International (Canada), $185,002; Spie Batignolles (France), $119,393; Dumez International (France), $82,422; ED Zublin (Germany), $444,466; Diwi Consulting (Germany), $2,439; and LHPC Chantiers, $63,959.

[24]. Information in this paragraph is cited in Environmental Defence Fund and International Rivers Network (1999), `Groups call on World Bank to Ban Companies in African Bribery Scandal', Press release, Washington, DC and Berkeley, CA, 24 September.

[25]. International Rivers Network (2002), `The World Bank and Corruption: Excerpts from Public Statements, Policies and Procedures', Berkeley, 26 June,

[26]. The previous two paragraphs' quotes are taken from Adams, P. (2002), `The Canadian Connection', Financial Post, 27 June.


[28]. Ashley, B. (1997), `Challenging Apartheid Debt: Cancellation a Real Option', debate, 3; World Development Movement and Action for Southern Africa (1998), Paying for Apartheid Twice: The Cost of Apartheid Debt for the People of Southern Africa, London, WDM and Actsa.

[29]. Marcus, G. (1998), `Writing off Debt has Consequences', Sowetan, 24 June; Sunday Independent Business Report, 8 November 1998; for rebuttals see: Dor, G. (1998), `SA's Poor Should not be Fooled', Sowetan, 30 June; Gabriel, N. (1998), `Still Weighed Down by Burden of Apartheid's Debt', Sunday Independent, 15 November; and Ndungane, N. (1998), `Maria Ramos's `No Debt' Statement is Remarkable', Sunday Independent Business Report, 15 November.

[30]. Cited in Bond, `Lesotho Dammed'.

[31]. See, e.g., Asmal, K. (1998), `Lesotho Highlands Water Project: Success Story', Address to Muela press conference, 21 January; and (1998), `Opening of the Lesotho Highlands Water Project', Speech, 22 January.

[32]. Rosenthal, J. (1998), `Threat to Lesotho Dam Project', Business Report, 26 November.

[33]. Hoover, `Evaluating the LHWP Against WCD Guidelines'.

[34]. Environmental Monitoring Group, International Rivers Network and Group for Environmental Monitoring (1999), `Once There was a Community: Southern African Hearings for Communities Affected by Large Dams', Final Report, Cape Town, 11-12 November, #s6.6.1-6.6.3. The testimony was heard by Commissioners, tellingly, at a time when Asmal chose to be absent.

[35]. Kravitz, J.D., et al (1995), `Human Immunodifficiency Virus Seroprevalence in an Occupational Cohort in a South African Community', Archives of Internal Medicine, 155, 15.

[36]. Asmal, `Speech to GEM Workshop on Lesotho Highlands Water Project', p. 4.

[37]. Ferguson, J. (1991), The Anti-Politics Machine, Cambridge, Cambridge University Press.

[38]. Pottinger, L. (1996), `The Environmental Impacts of Large Dams', in Group for Environmental Monitoring (ed), Record of Proceedings: Lesotho Highlands Water Workshop, Johannesburg, 29-30 August.

[39]. Snaddon, C.D., et al (1996), `Some Implications of Inter-Basin Water Transfers for River Functioning and Water Resources Management in South Africa', in Group for Environmental Monitoring (ed), Record of Proceedings: Lesotho Highlands Water Workshop, Johannesburg, 29-30 August, p. 7.

[40]. Department of Water Affairs and Forestry (1996), The Orange River Project Replanning Study, Pretoria.

[41]. Seaman, M. (1996), `Questions', in Group for Environmental Monitoring (ed), Record of Proceedings: Lesotho Highlands Water Workshop, Johannesburg, 29-30 August, p. 6.

[42]. Department of Water Affairs and Forestry (1999), Orange River Development Project Replanning Study, Pretoria.

[43]. Department of Water Affairs and Forestry, Orange River Development Project Replanning Study, s.7-6.

[44]. Ben Cashdan's expose of this in the film White Gold included a Maseru official denying that the study had been completed, when it in fact was clearly marked `Final Draft'.

[45]. Metsi Consultants (1999), `The Establishment and Monitoring of Instream Flow Requirements for River Courses Downstream of LHWP Dams', Lesotho Highlands Development Authority Contract 648, Maseru, p. x. See also Transformation Resource Centre (2000), `Lesotho's Rivers could become Waste Water Drains',

[46]. Cited in Addison, `Dam It, Let's Pour Concrete'.

[47]. Addison, `Dam It, Let's Pour Concrete'.

[48]. World Bank, Lesotho: Lesotho Highlands Water Project--Phase 1B: Project Appraisal Document, p. 18.

[49]. Fox, J. and L.D.Brown (1998), The Struggle for Accountability: The World Bank, NGOs and Grassroots Movements, Cambridge, MA, MIT Press, p. 511.

[50]. Archer, R. (1996), Trust in Construction? The Lesotho Highlands Water Project, London, Christian Aid and Maseru, Christian Council of Lesotho.

[51]. Archer, R. (1996), Trust in Construction? The Lesotho Highlands Water Project, London, Christian Aid and Maseru, Christian Council of Lesotho, pp. 58-59.

[52]. Rand Water (2001), `Planning and Financing of New Augmentation Schemes for the Vaal River System', Unpublished overhead slides, Johannesburg, 13 June.

[53]. Asmal, `Speech to GEM Workshop on Lesotho Highlands Water Project', p. 2.

[54]. Business Day, 13 March 1998.

[55]. Roome, `Water Pricing and Management', p. 16.

[56]. World Bank Inspection Panel (1998), `Lesotho/South Africa: Phase 1B of Lesotho Highlands Water Project: Panel Report and Recommendation', Washington, DC, 18 August, pa.81,fn. Signing off on the Panel report was the chairperson, Ernst-Guenther Groeder, but MacNeill was the primary author.

[57]. For details on this history, see Mayekiso, M. (1996), Township Politics: Civic Struggles for a New South Africa, New York, Monthly Review Press.

[58]. Bond, P. (2000), Cities of Gold, Townships of Coal: Essays on South Africa's New Urban Crisis, Trenton, Africa World Press, Chapter Three.

[59]. Alexandra residents (1998), `Inspection Panel Claim regarding World Bank Involvement in the Lesotho Highlands Water Project', 23 April, Alexandra, pa.1.9.

[60]. Alexandra residents, `Inspection Panel Claim regarding World Bank Involvement in the Lesotho Highlands Water Project', pa.1.9.

[61]. World Bank Inspection Panel, `Lesotho/South Africa: Phase 1B of Lesotho Highlands Water Project', pa.77.

[62]. World Bank Inspection Panel, `Lesotho/South Africa: Phase 1B of Lesotho Highlands Water Project', pa.81,fn.

[63]. World Bank Inspection Panel, `Lesotho/South Africa: Phase 1B of Lesotho Highlands Water Project', pa.80.

[64]. World Bank Inspection Panel, `Lesotho/South Africa: Phase 1B of Lesotho Highlands Water Project', pa.99.

[65]. Alexandra residents, `Inspection Panel Claim regarding World Bank Involvement in the Lesotho Highlands Water Project', pa.2.10.

[66]. Alexandra residents, `Inspection Panel Claim regarding World Bank Involvement in the Lesotho Highlands Water Project', pa.2.11.

[67]. Sunday Independent Reconstruct, 20 December 1998.

[68]. World Bank Inspection Panel, `Lesotho/South Africa: Phase 1B of Lesotho Highlands Water Project', pa.86.

[69]. Business Day, 13 March 1998.

[70]. World Bank (1998), `The Economics of Phase 1B', Unpublished paper, Africa Region, March.

[71]. Alexandra residents, `Inspection Panel Claim regarding World Bank Involvement in the Lesotho Highlands Water Project', pa.5.3.5.

[72]. World Bank (1994), World Development Report 1994: Infrastructure for Development, New York: Oxford University Press, pp. 80-81.

[73]. Alexandra residents, `Inspection Panel Claim regarding World Bank Involvement in the Lesotho Highlands Water Project', pa.1.10.

[74]. Roome, `Water Pricing and Management: World Bank Presentation to the SA Water Conservation Conference', pp. 50-51.

[75]. Ketso Gordhan, the main city manager promoting neoliberal utilities pricing and privatisation, turned down a World Bank job offer in late 2000. Instead, he became deputy chief executive of FirstRand, which included one of South Africa's most aggressively pro-privatisation merchant banks.

[76]. Palmer Development Group (2001), `Rand Water: Tariff Database Survey 2', Johannesburg, March, p. 8.

[77]. Adapted from Palmer Development Group, `Rand Water: Tariff Database Survey 2', Table 14.

[78]. Information in this and the following paragraphs is from Mare, K. (2001), `Free Basic Water: Actual Tariff Structures in Rand Water Area of Supply', Presentation to the Water Services Forum, Johannesburg, 18 July.

[79]. Department of Water Affairs and Forestry (1994), Water Supply and Sanitation White Paper, Cape Town. The most influential figures were director-general Mike Muller, former special advisor Len Abrams and Piers Cross, long associated with the World Bank, and one-time director of Mvula Trust.

[80]. World Bank Inspection Panel, `Lesotho/South Africa: Phase 1B of Lesotho Highlands Water Project', pa.83.

[81]. Cited in Hoover, `Evaluating the LHWP Against WCD Guidelines'.

[82]. Interpress Service, 18 November 2000.

[83]. Harvey, Justice, Nature and the Geography of Difference, p. 377.

[84]. Harvey, Justice, Nature and the Geography of Difference, p. 378.

[85]. Harvey, Justice, Nature and the Geography of Difference, p. 379.

[86]. Asmal, `Opening of the Lesotho Highlands Water Project', p. 4.

[87]. Hoover, `Evaluating the LHWP Against WCD Guidelines'.

[88]. Hoover, `Evaluating the LHWP Against WCD Guidelines'.

[89]. The complaint was justifiable when it came to a meeting he had with Alexandra leaders in March 1998, but in a Business Day letter by local environmentalist Richard Sherman in January, the Panel claim option was noted as the logical way forward for the green-brown anti-LHWP alliance.

[90]. The letter continued:

I am sure that you will understand that there is little point in engaging in dialogue with people who have already (without hearing the evidence) made up their minds on the issues and who seem to be guided by priorities and processes outside South Africa rather than by the impact of their actions on their fellow citizens.

I should further add that, since this deals with a matter of national concern and indeed of the national interest, I will now take the necessary steps to establish whether you have a mandate from your national organisation or are indeed merely posturing. I do not raise this as a threat but rather as a reflection of my concern that this kind of unmandated and opportunist action will undermine the strong role that I believe civil society must play in areas such as water management.

It is precisely this kind of action, that may demonstrably damage the interests of water consumers both rich and poor, that is used by those who allege that many of the organs of civil society are not really interested in similar problems or issues, but are simply concerned with opportunities and politically-mischievous activities.

Should you wish to proceed with any dialogue on this issue, I must therefore insist that you formally withdraw your request for an Inspection Panel investigation.

I represent a democratically-elected government and head a department which has a proved record of creative and real links with non-governmental organisations. However, there must be good faith on both sides if we are able to engage in honest dialogue.

Yours faithfully,

Prof. Kader Asmal, MP

Minister of Water Affairs and Forestry

Asmal, K. (1998), `Letter to Alexandra Civic Organisation: Lesotho Highlands Water Project', 19 March, Pretoria.

[91]. World Bank Inspection Panel, `Lesotho/South Africa: Phase 1B of Lesotho Highlands Water Project', pa.65.

[92]. World Bank Inspection Panel, `Lesotho/South Africa: Phase 1B of Lesotho Highlands Water Project', pa.81.

[93]. World Bank Inspection Panel, `Lesotho/South Africa: Phase 1B of Lesotho Highlands Water Project', pa.86.

[94]. Harvey, Justice, Nature and the Geography of Difference, p. 400.

[95]. Ballenger, J. (1998), `Lesotho Water Project Falls Foul of Environmental Lobby Groups', Business Day, 22 January.

[96]. Southern African Preparatory Meeting (2000), `Southern African Call to Action', Pretoria, 23 November.

[97]. These included the Council of NGOs, Federation of Women's Lawyers, Rural Self Help Development Association, Transformation Resource Centre, Lesotho Durhata Link, Red Cross Society, Blue Cross Society, Lesotho Youth Federation, Highlands Church Action Group, Community Legal Resource and Advice Centre, Young Christian Students, and the Lesotho NGO Credit Centre.

[98]. Cashdan, B. (2000), `White Gold', interview tapes, November.

[99]. Cashdan, `White Gold'.

[100]. Moiloa, S., J.Mphou and T.Ngwane (2001), `New Dams don't Benefit the People', Mail & Guardian, 8-14 June.


[102]. Mail & Guardian, 27 April-3 May 2001.

[103]. World Bank (2002), Water Resources Sector Strategy: Strategic Directions for World Bank Engagement Washington, 25 March, p. 28.

[104]. McCully, P. (2002), `Avoiding Solutions, Worsening Problems', San Francisco, International Rivers Network,, pp. 1,20,40.

[105]. Engineering News Record, 21 January 2002.

[106]. Confluence: Newsletter of the Dams and Development Project, Issue 1, May 2002.

[107]. Cited in Mail & Guardian, 8-14 June 2001.

[108]. Confluence: Newsletter of the Dams and Development Project, Issue 1, May 2002.

[109]. Kasrils, R. (2001), `Opening Address', Symposium on the World Commission on Dams Report on Dams and Development: A New Framework for Decisionmaking, Pretoria, 23 July, p. 4.

[110]. See, especially, McCully, P. (2002), Flooding the Land, Heating the Air: Greenhouse Gas Emissions from Dams, International Rivers Network, Berkeley.

[111]. Business Day, 6 May 2002.

[112]. Martin Creamer's Engineering News, 12-18 April 2002.

[113]. Martin Creamer's Engineering News, 12-18 April 2002.

[114]. Martin Creamer's Engineering News (28 June 2002) explained, `When Dwaf started scrutinising the Thukela water project as a possible source of additional water to augment the Vaal river system in the 1990s, it was estimated that South Africa's population would have ballooned to 70 million by 2025. Given the likely impact of HIV/Aids--which afflicts a significant proportion of South Africa's population--it is now believed that the population will not grow beyond 52 million in the next 25 years'.

[115]. Thomson, R. and J.Tavares (2001), `Water Demand Projections in Rand Water's Area of Supply', Civil Engineering, June.

[116]. Martin Creamer's Engineering News, 28 June 2002.

[117]. Cronon, W. (1991), Nature's Metropolis: Chicago and the Great West, New York, Norton, p. 385.

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