Thursday, December 13, 2012

China's risky overseas dam building in Burma and beyond

China's risky overseas dam building in Burma and beyond
by Grace Mang, chinadialogue, 13.12.2012

China is grappling with the social and environmental risks of building
300 dams in 66 countries, with a large number in south-east Asia.

Today, Chinese companies dominate the international hydropower market.
Over the past few years, China has successfully exported its large
dam-building expertise to the world. International Rivers is currently
aware of some 300 dam projects in 66 countries in which Chinese
companies and financiers are involved.

More than two-thirds of these dams are large hydropower projects with a
generating capacity of over 50 megawatts. Approximately 40% of these
projects are located in south-east Asia and 15% in Africa. The
geographical spread mimics the regional distribution of Chinese overseas

With the Chinese overseas dam industry's ever-increasing global
presence, International Rivers and its partners around the world have
been working since 2007 to better understand China's global role in
hydropower development. Through our report "New Great Walls – An
Activist Guide to Chinese Overseas Dam-Building Industry", revised and
republished in November, we have sought to share information with
communities impacted by Chinese dam building.

While China has not turned out to be the rogue dam builder that many
feared it might be, Chinese dam builders are coming late to the game and
face heightened environmental and social risks when operating overseas.

First, Chinese companies often operate in countries that have weak
environmental protection and social safeguards. For example, in Burma,
the government did not require any environmental approvals for the 6,000
megawatt Myitsone Dam. In such cases, Chinese companies cannot rely on
local legislation to ensure compliance with international laws and

Second, until very recently, Chinese dam builders have lacked any clear
environmental and social policy standards consistent with international
best practice for their overseas operations.

Third, many Chinese companies lack experience and are ill-prepared to
adequately deal with community grievances in the host countries and the
scrutiny of an independent media. When confronted with local opposition
or negative reporting, Chinese companies have tended to be defensive or
dismissive, confirming perceptions that they operate in a
non-transparent manner.

And, finally, in some cases strengthening bilateral relations between
China and the host country has meant that social and environmental
considerations of dam projects are an afterthought.

However, Chinese dam builders have made it clear that their aim is to be
a responsible global actor and, in recent years, civil society has been
fundamental in helping to shape the pathway for Chinese dam builders to
get there.

Sinohydro forging new environmental path

Sinohydro, the world's largest hydroelectric company, is engaged in a
dialogue with Chinese and international NGOs, and has prepared an
environmental policy that puts it at the forefront of the international
hydropower industry. Sinohydro has adopted all the World Bank safeguard
policies, including those relating to indigenous people, resettlement
and the environment, as its minimum standard.

It has also identified a number of "no-go" zones for hydropower
development, including World Heritage areas and the habitats of
internationally protected species. And it has committed to establishing
grievance and complaints mechanisms for its overseas projects. Of
course, the challenge will be in policy implementation, which will
require a fundamental change in the way Sinohydro does business.

Chinese government agencies have also issued guidelines for foreign
investors to protect the environment and respect local communities in
their host countries. Efforts are also under way that would see the
Chinese government go beyond what any western country has done to
address the social and environmental impacts of its companies operating

The Ministries of Commerce and Environmental Protection are currently
drafting guidelines for the environmental impacts of Chinese companies
operating abroad, which will go some way to establishing a minimum
standard regardless of how weak host-country laws may be.

Civil society groups have also been directly engaged in pressuring
Chinese dam builders to pull out of destructive dam projects. After
protests by local communities and NGOs, Chinese companies and financiers
had to suspend projects in Burma and Gabon, and even withdraw from their
operations in Cambodia.

Grace Mang is China Programme Director at the NGO International Rivers

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