Embed Size (px)
Citation preview
MANAGING COOPERATION IN LOWER MEKONG:
A CASE STUDY OF XAYABURI DAM
CONSTRUCTION (2010-2012)
By
Ayu Yunia Harsari
ID No. 016201100042
A Thesis presented to the
Faculty of International Relations, Communication and Law
President University in partial fulfillment of the requirements for
Bachelor’s Degree in International Relations
Concentration of Diplomacy Studies
2015
i
THESIS ADVISER
RECOMMENDATION LETTER
This thesis entitled ―MANAGING COOPERATION IN LOWER
MEKONG: A CASE STUDY OF XAYABURI DAM
CONSTRUCTION (2010-2012)‖ prepared and submitted by Ayu
Yunia Harsari in partial fulfillment of the requirements for the degree
of Bachelor in the Faculty of International Relations, Communication
and Law has been reviewed and found to have satisfied the
requirements for a thesis fit to be examined. I therefore recommend
this thesis for Oral Defense.
Cikarang, Indonesia, January 14th
2015
(Dr. Endi Haryono, M.Si.)
ii
DECLARATION OF ORIGINALITY
I declare that this thesis, entitled ―MANAGING COOPERATION
IN LOWER MEKONG: A CASE STUDY OF XAYABURI DAM
CONSTRUCTION (2010-2012)‖ is, to the best of my knowledge and
belief, an original piece of work that has not been submitted, either in
whole or in part, to another university to obtain a degree.
Cikarang, Indonesia, January 14th
2015
(Ayu Yunia Harsari)
iii
PANEL OF EXAMINER
APPROVAL SHEET
The Panel of Examiners declares that the thesis entitled
―MANAGING COOPERATION IN LOWER MEKONG: A
CASE STUDY OF XAYABURI DAM CONSTRUCTION (2010-
2012)‖ that was submitted by Ayu Yunia Harsari majoring in
International Relations from the Faculty of International Relations,
Communication and Law was assessed and approved to have passed
the Oral Examinations on January 21st 2015.
Prof. Anak Agung Banyu Perwita, Ph.D.
Chair – Panel of Examiner
Eric Hendra, S.IP., MA.
Examiner
Dr. Endi Haryono, M.Si.
Thesis Adviser
iv
ABSTRAK
Judul: Mengelola Kerjasama di Sungai Mekong bagian Bawah: Studi Kasus
Pembangunan Bendungan Xayaburi (2010-2012)
Ketergantungan yang semakin tinggi terhadap pasokan energi listrik di Asia
Tenggara dan fakta adanya perbedaan potensi eksplorasi energi di tiap negara
membuka kesempatan terjadinya perdagangan energi di kawasan. Di tengah usaha
global mengurangi emisi karbon, Laos hadir dengan upaya eksplorasi potensi
pembangkit listrik tenaga air. Dengan bekerjasama dengan kontraktor Thailand,
Laos akan membangun bendungan Xayaburi di aliran utama Sungai Mekong;
sungai terbesar di Asia Tenggara di mana energi listrik yang dihasilkan nantinya
akan diekspor ke Thailand. Mengingat Sungai Mekong bagian bawah adalah
sumber daya lintas negara, wacana pengelolaan dan eksplorasi bersama di
Mekong bagian bawah pun telah diatur dalam Perjanjian Mekong tahun 1995 dan
dieksekusi oleh Komisi Sungai Mekong. Saat berbagai penolakan muncul dalam
proses pengajuan persetujuan pembangunan bendungan di dalam Komisi, Laos
memutuskan secara sepihak untuk melanjutkan pembangunan dan mengacuhkan
kesepakatan bahwa tidak akan ada pembangunan tanpa persetujuan seluruh negara
anggota. Penelitian ini bertujuan untuk mengetahui faktor regional apa saja yang
mempengaruhi pengambilan kebijakan luar negeri Laos dan bagaimana faktor-
faktor ini mempengaruhi keputusan sepihak Laos dalam kasus pembangunan
bendungan Xayaburi. Berfokus pada sektor ekonomi, sosial dan lingkungan,
penelitian ini menguraikan keuntungan dan kerugian dari dua kerangka regional
yang berbeda yang nantinya akan mempengaruhi perhitungan Laos untuk
mencapai target nasionalnya.
Kata kunci: kebijakan luar negeri, Laos, tindakan sepihak, Komisi Sungai
Mekong, bendungan Xayaburi, faktor-faktor regional
v
ABSTRACT
Title: Managing Cooperation in Lower Mekong: A Case Study of Xayaburi Dam
Construction (2010-2012)
The increasing demand of electricity energy in Southeast Asia and the fact that
there is a difference in energy exploration potential among countries opened the
chance for energy trading in the region. In the middle of global effort to reduce
the carbon emission, Lao PDR came up with the idea of hydropower exploration.
Under cooperation with Thailand developer, Lao PDR would construct Xayaburi
Dam in the mainstream part of Lower Mekong; the region‘s largest river basin
where the energy generated will be exported to Thailand. Reminding that Lower
Mekong River is a trans-boundary resource, joint management and exploration
has been managed by the 1995 Mekong Agreement and executed by the Mekong
River Commission. When the disagreement appeared towards the proposal of the
dam in the Commission, Lao PDR decided unilaterally to continue the
construction and ignored the agreement that there will be no construction unless
there is agreement from all riparian countries. This research is an attempt to
identify the regional factors that influenced Lao PDR foreign policy and how
these factors influenced the unilateral decision of Lao PDR towards the Xayaburi
Dam case. Focusing on the economic, social and environmental sectors, this
research elaborates the costs and benefit of two different regional frameworks that
will influence the calculation of Lao PDR in pursuing its national goals.
Keywords: foreign policy, Lao PDR, unilateral act, Mekong River Commission,
Xayaburi Dam, regional factors
vi
ACKNOWLEDGEMENT
This masterpiece may become the final struggle of my bachelor degree.
However, what meant the most is the process not only while doing this thesis, but
also can be traced back from the first day of my college life. Any obstacles, laugh
and tears taught me to be who I am today. I will never have enough words to
thank my God, Allah SWT as He always strengthens my back to carry on any
responsibilities I had and gives the best I deserved. I am so blessed with His love
to have such amazing people behind me to whom in this occasion I would deliver
my biggest thanks.
1. My big family, especially for my parents who never miss to mention my
name in their prayer, for the unconditional love and continuous support
that successfully recovered me whenever I lose my spirit and confidence.
2. Mr. Endi Haryono as the first thesis advisor for such a meaningful input
and guidance to develop my work and brought me to nicely finish all the
thesis process.
3. Mr. Eric Hendra as the second thesis advisor and internship mentor for the
guidance and direction as well as support for all the problems I shared and
the obstacles I had especially from internship to thesis period.
4. All the International Relations lecturers who have shared all the
knowledge and great discussion. I really have to be proud of becoming one
of the students of IR PresUniv.
5. The ASEAN Secretariat, one of my learning places during internship for
all the networking and experience I had.
6. All International Relations students batch 2011 for all the friendship of
these three and a half years.
7. PUSC; the main place for me to develop my organizational and soft skill
as well as giving me the experience I myself never imagined before, and
for all the intimate friendship I got from this big family.
8. CANDLE family; Phan Ho Tan Phat, Vinson Tjandra, Iskandar Abdul
Rahman, Merry Virginia Agow, Chandra Tjioe, and Budi Putra Santoso
for becoming my two years closest friends in PUSC and still counting who
vii
really understand who I am and still keep cheering me up with their own
uniqueness through all always out-of-topic conversation and inside jokes.
9. Dearest friends of me whenever occasion brought us together, especially
Muhamad Zharfan, Abel Lakawa, Putri Kuncahyo, Mirah Diwayami,
Andhita Zerlina, Karlina Oktavia, and Lira Bahrein for your ears,
shoulders, advice and input to my problems, happiness and stories as well
as availability to my random time.
10. I Gusti Bagus Dharma Agastia. I am speechless, whether I need to thank
you or not introducing me to this thesis topic. But, I prefer to thank you for
any technical, academic, and moral support for me from the very first time
in high school, we knew we will be enrolled in the same major in the same
university. Good luck for your soon-to-achieve master degree.
Sincerely Yours,
Ayu Yunia Harsari
viii
TABLE OF CONTENTS
THESIS ADVISER RECOMMENDATION LETTER.................................... i
DECLARATION OF ORIGINALITY.............................................................. ii
PANEL OF EXAMINER APPROVAL SHEET…………………………….. iii
ABSTRAK........................................................................................................... iv
ABSTRACT.......................................................................................................... v
ACKNOWLEDGEMENT.................................................................................. vi
TABLE OF CONTENTS................................................................................. viii
LIST OF TABLES............................................................................................. xii
LIST OF FIGURES........................................................................................... xii
LIST OF ABBREVIATIONS.......................................................................... xiii
CHAPTER I. INTRODUCTION......................................................................... 1
I.1. Background of the Study............................................................................ 1
I.2. Problem Identification................................................................................ 4
I.3. Statement of the Problem............................................................................ 6
I.4. Research Objectives.................................................................................... 6
I.5. Significance of the Study............................................................................ 7
I.6. Theoretical Framework............................................................................... 7
I.7. Scope and Limitation of the Study........................................................... 11
I.8. Research Methodology............................................................................. 12
I.9. Thesis Structure........................................................................................ 13
A. Chapter I – Introduction………………………………………….….. 13
B. Chapter II – Lower Mekong Governance and Lao PDR
Position……………………………………...…….…… 13
C. Chapter III – Lao PDR Goals and Orientation in Foreign Policy
Decision-Making…………………...………………….. 13
D. Chapter IV – Regional Factors Influencing Lao PDR Foreign Policy. 13
E. Chapter V – Conclusion………………………...…………..……...... 14
ix
CHAPTER II. LOWER MEKONG GOVERNANCE AND LAO PDR
POSITION………………....................................................... 15
II.1. About Mekong River………………....................................................... 15
II.2. Towards Mekong River Commission...................................................... 17
II.3. MRC Regional Policy……….….……………....................................... 19
A. Economic Sector Policy…………………………..…………….…… 19
B. Social Sector Policy………………………………………..……..….. 21
C. Environment Sector Policy……………………………..………….… 22
II.4. The PNPCA Process for Xayaburi Dam Proposal.................................. 23
A. Responses from Riparian Countries towards PNPCA Process…….... 27
Cambodia……………………………………………………...... 27
Viet Nam……………………………………………………..…. 28
Thailand………………………………...……..………………... 29
CHAPTER III. LAO PDR GOALS AND ORIENTATION IN FOREIGN-
POLICY MAKING……………………………….………... 32
III.1. Lao PDR Political Situation................................................................... 32
III.2. Lao PDR Goals and Policies……………………….............................. 36
A. Economic Sector………….……………………………………....…. 36
B. Social Sector……….……………………………………...…….….... 41
C. Environmental Sector…………………………………………....…... 42
III.3. Exploring Lao PDR Choice on Pursuing Cooperation with Thailand... 43
A. Drivers from within Thailand………………...…………………….... 44
B. Regional Driver………………………………...………………….… 46
Economic Sector Policy…………………………...………….… 50
Social Sector Policy………………….......……………………... 52
Environment Sector Policy……………...……………………… 53
CHAPTER IV. REGIONAL FACTORS INFLUENCING LAO PDR
FOREIGN POLICY……………………………..………...... 55
IV.1. MRC Cooperation Framework...…………………………...…....…… 55
IV.2. ASEAN-GMS Cooperation Framework..……………………………. 58
x
IV.3. Lao PDR Estimated Goals Achievement: A Calculation of Cost and
Benefit………………………………………………………………... 62
A. Costs and Benefits of Continuing Cooperation with Thailand……. 63
Benefits…………………...……………………………….….. 63
- Fulfill Bilateral MoU and Reach Target Export to
Thailand………………………………………………..…… 63
- Grab Big Potential Market and Revenue from Thailand as
planned……………………………………...….………….... 64
- Help Supporting the Achievement of Goals…..................…. 64
Costs……………………………………………….………….. 73
- Noncompliance to Mekong Agreement and MRC
Process……………………………………...…………...….. 73
- Environmental Degradation and Negative Trans-boundary
Impact……………………………………....……...……...… 73
- Unpredictable Further Reaction from Cambodia and
Vietnam…………………………..………………….……… 74
- Protest from Civil Society Group and NGOs…….…...…….. 75
B. Costs and Benefits of Fully Complying with MRC……….………. 76
Benefits……………………………………………….………. 76
- Assistance on Technical Knowledge…......................……… 76
- Assistance on EIA based on IWRM………...……….……… 76
- Play Crucial Role in Strengthening MRC
Capacity……………………………………..………....….... 77
- Become A Role Model for Mainstream Development Based on
IWRM…...………………………………….…..……...…… 78
Costs………………………………………….……………….. 78
- Postponement of Xayaburi Dam Development…....………... 78
- Unable to Fulfill MoU with Thailand…………….…..…….. 79
- Lost Potential Planned Revenue and Market......................… 79
- Possibility of Not Fully Achieve Target for LDC, MDG,
ASEAN Community and Hydropower ―Battery‖ of Southeast
Asia…………………............................................................. 80
xi
CHAPTER V. CONCLUSION......................................................................... 82
REFERENCES
xii
LIST OF TABLES
Table 1 – PNPCA Internal Process Road Map for Xayaburi Dam…………… 26
Table 2 – Centrally-planned System of Socioeconomic Development……..… 36
Table 3 – The First Three Five-Year Planning under NEM Policy…………... 37
Table 4 – Graduation Threshold LDC……………………………………..…. 65
LIST OF FIGURES
Figure 1 – Energy in ASEAN Region…………………………………………… 2
Figure 2 – Xayaburi Dam Map……………………………………………...…... 3
Figure 3 – Mekong River Map……………………………………………...….. 15
Figure 4 – State Structure in Lao PDR…………………………………...…….. 35
Figure 5 – GNI Per Capita, 2006 to 2012…………………………………...…. 65
Figure 6 – HAI Per Capita, 2006 to 2012…………………………………….... 66
Figure 7 – EVI Per Capita, 2006 to 2012………………………………...…….. 66
Figure 8 – Existing, Under Construction and Planned (Large) Hydropower Project
in LMB………………...…………………………………………… 70
xiii
LIST OF ABBREVIATIONS
ADB = Asian Development Bank
AEC = ASEAN Economic Community
AMBDC = ASEAN Mekong Basin Development Cooperation
APG = ASEAN Power Grid
ASEAN = Association of South East Asian Nation
BCI = Biodiversity Conservation Corridor Initiative
BDP = Basin Development Plan
CEP = Core Environment Program
CLMV = Cambodia, Lao PDR, Myanmar, Viet Nam
EGAT = Electricity Generating Authority of Thailand
EIA = Environmental Impact Assessment
EPPO = Energy Policy and Planning Office
EVA = Economic Vulnerability Index
FTA = Free Trade Agreement
GDP = Gross Domestic Product
GMS = Greater Mekong Sub-region
GoL = Government of Lao PDR
HAI = Human Asset Index
HRD = Human Resource Development
IAI = Initiative for ASEAN Integration
IEA = International Energy Agency
IMF = International Monetary Fund
IPPs = Independent Power Producers
ISH = Initiative on Sustainable Hydropower
IWRM = Integrated Water Resource Management
JC = Joint Committee
Lao PDR = Lao People‘s Democratic Republic
LDC = Least Developed Countries
LFNP = Lao Front for National Construction
LPRP = Lao People‘s Revolutionary Party
xiv
MC = Mekong Committee
MDG = Millennium Development Goals
MoU = Memorandum of Understanding
MRC = Mekong River Commission
MRCS = Mekong River Commission Secretariat
MW = Mega Watt
NCM = National Consultation Meeting
NEM = New Economic Mechanism
NGO = Non-Governmental Organization
NGPES = National Growth and Poverty Eradication Strategy
NMC = National Mekong Committee
NSDS = National Sustainable Development Strategy
NSEDP = National Socioeconomic Development Plan
PDP = Power Development Plan
PNPCA = Procedure of Notification, Prior Consultation and Agreement
PPA = Power Purchase Agreement
PRC = People‘s Republic of China
SEA = Strategic Environmental Assessment
TAGP = Trans-ASEAN Gas Pipeline
TWh = Tera Watt-hour
UN CDP = United Nations Committee for Development Policy
UN DESA = United Nations Department of Economic and Social Affairs
UN = United Nations
UNDP = United Nations Development Program
UNESCO = United Nations Educational, Scientific, and Cultural
Organization
WEO = World Energy Outlook
1
CHAPTER I
INTRODUCTION
I.1. Background of the Study
After the Asian Financial Crisis in 1998, the economic growth as well as
the ongoing urbanization and industrialization compelled Southeast Asia region to
the high demand of energy (World Energy Outlook, 2013). It has been predicted
that the region would be one of the center of gravity for global energy demand
after 2025 (International Energy Agency, 2013). To fulfill the demand, the non-
renewable energy such as coal, oil and natural gas were still more dominating
people choices of energy sources. This choice is not surprising reminding that
non-renewable energy could produce much more energy in huge quantities as well
as easier to transport and store, especially for generating the electricity energy that
is very crucial recently to run almost all the technological tools (Greenius,
Jagniecki, & Thompson, 2010).
Indeed, the countries in Southeast Asia, particularly would have to put
their best effort to meet the energy demand. They have choices; either trying to
fulfill from their own energy resources or importing the energy from other
countries. The different potential of energy reserves among countries in the region
opened chances for the so-called energy trading between those countries. Those
who have more reserves and possibly able to become an exporter to other
countries would surely grab the benefit of this circumstance.
2
The figure above shows the map of energy potential and plans of
exploration among countries in Southeast Asia. Mostly, they have recognized
their potentials of energy exploration and some even have started to be an exporter
of mostly non-renewable energy. Among these trends, there is a different thing
seen from Lao People‘s Democratic Republic (Lao PDR). Lao PDR visions itself
to be an exporter of electricity that comes from renewable energy through
hydropower. Through this goal, the Government of Lao PDR (GoL) has planned
to increase the output of the hydro electric to at least 1/3 of its potential by 2020
(Oraboune, 2012). This kind of goal seems promising reminding that due to the
dwindling reserves of non-renewable energy that will be compared to the future
increasing demand, its fluctuating prices as well as global commitment towards
climate change to reduce the use of energy contributing to the greenhouse gases
made the choice to start moving to the renewable one seems inevitable (Greenius,
Jagniecki, & Thompson, 2010).
This goal is supported by the strategic location of Lao PDR itself. Lao
PDR shares the highest percentage area for about 25% as well as contributing the
greatest amount of flow for 35% on the Mekong River (MacQuarrie,
Viriyasakultorn, & Wolf, 2008). Once, a data ever released by the Mekong
Figure 1. Energy in ASEAN region
Source: World Energy Outlook 2013
3
Secretariat in December 1970 has estimated that Lao PDR actually has for about
26,000 MW (excluding mainstream Mekong) in its theoretical hydro power
potential, while around 23,000 MW was ready as exploitable hydro power
potential, including share of mainstream Mekong (Pholsena & Phonekeo, 2004).
In mission to accomplish the poverty reduction policy and modernization
programs, GoL began to further explore hydropower project for power generation
from the Mekong River. After claiming its success in building some hydropower
projects in the tributaries of the Mekong River, GoL moved forward to the project
of Xayaburi Dam as the first project proposed in the mainstream part of Lower
Mekong. Currently, it is claimed as the project that features the very latest
developments and improvements in hydropower production and technology
(Government of Lao PDR, 2014). Located at the Kaeng Luang rapids, around 30
kilometers east of Xayaboury Town in Northern Lao PDR, the Xayaburi Dam
stretched 810 meters long across the entire channel of the Mekong River. It is
expected to generate 1,260 megawatts of electricity during approximately eight
years building process that would cost approximately US$3. 5 billion
(International River, 2011).
Figure 2. Xayaburi Dam Map
Source: International River, 2011
4
On May 4th, 2007, the GoL signed the Memorandum of Understanding
(MoU) with project developer, which is Thailand‘s Ch. Karnchang Public
Company. It is also identified that around 95% of the electricity generated will be
exported to Thailand. The Power Purchase Agreement (PPA) was signed later in
July 2010 between the Electricity Generating Authority of Thailand (EGAT) and
the GoL, for purchasing 1,220 MW, at a cost of 2.159 Baht per kilowatt-hour
through a 200 kilometer long transmission line that will travel from the Xayaburi
Dam to Thailand‘s northeastern province of Loei (International River, 2011).
I.2. Problem Identification
The Mekong River is in fact not totally belongs to Lao PDR. Specifically,
the Lower Mekong area is a vital trans-boundary water resource as well for three
other riparian countries namely Thailand, Cambodia and Viet Nam. For achieving
the mutual benefit, joint management of shared water resources and sustainable
development of the Mekong River, Mekong Agreement has already been signed
by the governments of these four countries in 1995. Mekong River Commission
(MRC) under the guidance of this agreement plays a role as the only
intergovernmental agency that works directly with signatory countries (Mekong
River Commission, 2014).
As mandated by the 1995 Mekong Agreement and executed by the MRC,
any development project proposal in Lower Mekong, especially for the
mainstream area should go through the so-called Prior Consultation process under
the Procedure for Notification, Prior Consultation and Agreement (PNPCA). This
is important to achieve consensus at the end on whether or not a project should
proceed and if it is so, what conditions will be applied as requisite (Mekong River
Commission, 2014).
After going through the PNPCA, it was found that the Xayaburi Dam
proposal could not fulfill the standards set by MRC and did not properly address
the trans-boundary impact. This finding was also supported by Non-Governmental
5
Organizations (NGOs) and research institutions through their own research. A
review of Environmental Impact Assessment (EIA) of Ch. Karnchang Public
Company Limited prepared by the Team Consulting Engineering and
Management Company Limited in August 2010, concluded that the EIA released
by Lao PDR was not able to address many important aspects of a proposed
modification of the natural flow regime in Mekong River (Lanza, 2011). Besides
that, according to the data of International Water, the dam would endanger the
richness of species diversity of the Mekong. At least 41 fish species would
extinct, 23 migratory fish species would lose their migration route to Luang
Prabang in Lao, Chiang Khong and Chiang Saen in Thailand, and the possibility
of extinction of the iconic Mekong Giant Catfish. This dam also needs to resettle
over 2,100 people in ten villages. It will also indirectly affect the lives of at least
202,198 farmers and fishers located in four districts in Laos (International River,
2011). These concerns would not give reasons for the riparian countries to let the
proposal be executed as scheduled.
On the other hand, GoL claimed that as the signatory to Mekong
Agreement and founding member of MRC they had complied with the PNPCA.
Through the official website of the Department of Energy Business under the
Ministry of Energy and Mines, GoL shared the information about the project that
they called as the ―run-of-river‖ project; since its activities will not harm the river.
They claimed that there will be no gas, oil, or coal will be burnt that will cause
harmful pollutants, and all energy will be produced using only natural flow of the
river. They emphasized that there will be no change to the natural flood and dry-
seasonal cycles, no trans-boundary impacts on flood levels in the Tonle Sap and
no impact would be in minimum dry-season flows in Mekong Delta. In general, it
will be as usual as there is no dam established (Government of Lao PDR, 2014).
In fact, even though the consensus-based agreement was not there yet, as
reported by National Geographic Online, Lao PDR was pushing its interest to
continue the Xayaburi Dam construction without approval from any riparian
countries (Nijhuis, 2014). A formal ceremony marking the start of full
construction of Xayaburi Dam has been conducted on November 7th
2012 (BBC,
6
2012). Lao PDR preferred to continue the construction based on the agreement
with Thailand under the ASEAN-GMS framework (Middleton, 2012). The case
itself can be simply explained through the chart below.
I.3. Statement of the Problem
As elaborated in the problem identification, the topic and the question of
this thesis would be:
Topic: This research is an attempt to understand the influence of regional factors
towards Lao PDR foreign policy in pursuing unilateral act towards the Prior
Consultation process of Xayaburi Dam construction.
Question:
1. How did Lao PDR manage its regional cooperation in the case of Xayaburi
Dam construction?
I.4. Research Objectives
The objectives of this research are:
Lao PDR Xayaburi
Dam Project
Prior Consultation
Process in PNPCA
Cooperation with
Thailand
developer & EGAT
Lao PDR National Goals
MRC under 1995 Mekong
Agreement
ASEAN-GMS
Cooperation
Halt until proper
studies are
conducted
Continue as
scheduled to fulfill
MoU with Thailand
Unilateral Act to
Continue the
Construction.
Started in 2012
7
To understand the Lower Mekong governance through the first
implementation of the PNPCA by the Mekong River Commission
towards the development in mainstream area.
To identify the regional factors that could influence Lao PDR foreign
policy making towards Xayaburi Dam construction.
To analyze how these regional factors influenced the choice of Lao PDR
foreign policy in taking unilateral action towards Prior Consultation
result and continuing the construction with Thailand.
I.5. Significance of the Study
To understand the trans-boundary resource management system in the
Lower Mekong region under the 1995 Mekong Agreement executed by
MRC.
To understand the importance of regional factors in foreign policy-
making of states.
I.6. Theoretical Framework
Foreign policy can be defined as government official‘s action to promote
the national interest beyond their national‘s territorial boundaries. Foreign policy
is a product of multiple forces at various levels of analysis (Haryono & Razak,
2014). In foreign policy making, there are environments around the actors that can
influence the decision-making process. The concept environment in foreign policy
making was once introduced by Harold and Margaret Sprout. Sprouts did not use
the term environment since this term is too much interpreted in non-human, or in
restrictive physical-geographical terms. Thus, ‗milieu‘ concept of the French
language is preferred to replace the word ―environment‖ since it could entail the
whole environmental factors; human and non-human as well as tangible and non-
tangible. Sprouts introduced first the concept of ‗ecological triad‘ that consists of
entity, his/her environment and relations between entity and his/her environment.
(Criekemans & Duran, 2011).
8
The milieu concept is divided into two. The first one is psychological or
psycho milieu to explain the internal environment that is perceived by decision -
makers. As foreign policy is still commonly pursued by the state, the internal
environment of the actor that could influence the foreign policy making is its
domestic context. Foreign policy making takes place within the context of
political structure in which country is the most important part. The importance of
this context is how the country‘s political structure and forces as well as sub-
national actors can influence government to adopt or decide a foreign policy.
(Rourke J. T., 2008).
The second one is the operational milieu to represent the external
environment; the true environment where the policy is executed. Even though
foreign policy is coming from a country in which logically are free to determine
the direction of it, in fact, there are restraints where the foreign policy will be
implemented in the international system. Foreign policy is more favored to be
reasonable with the realities in the international system. The importance of this
context is how the international system where the foreign policy implemented,
will influence the actions of countries. The nature of the system can be found out
by some factors; which are the structural characteristic that refer to how authority
is arranged as well as system‘s frequency, scope, and level of interaction, power
relationship that identified the number of poles in one system, economic realities
and norms of behavior to help determining patterns of behavior and create
predictability within the system (Rourke J. T., 2008).
International system, as defined by George Modelski, is a social system
that has structural and functional requirements consists of a set of objects,
relationship between them and their attributes. It contains as well the pattern of
action and interaction among collectivities and individuals acting on their behalf.
Central to system, there are several categories of questions, concepts and data in
which one of them is ―The structuring of hierarchical levels of system, the
location of subsystems within the system and the patterns of interactions both
among the sub-system and between subsystem and the system itself‖ (Dougherty
& Pfaltzgraff, 2001). This category was restated as the problem of level of
9
analysis. Regions are finally treated as the subsystems of the international system
after some scholars specified the patterns of interaction within models and actual
political units in the North Atlantic area, Middle East and Asia. Thus, regional
subsystem, according to Louis Cantori and Steven Spiegel, consists of ―one state,
or of two or more proximate and interacting states which have some common
ethnic, linguistic, cultural, social and historical bonds, and whose sense of identity
is sometimes increased by the actions and attitudes of states external to the
system‖ (Dougherty & Pfaltzgraff, 2001). Reviewed from the level of analysis,
Barry Buzan classified region as a level of analysis that bridge the nation-state and
international system level of analysis (Perwita & Yani, 2011) as can be drawn
below.
Barry Buzan’s Region Position in Level of Analysis
Further, as the opposition to the realist thesis that military power is the
most important point for the state to pursue their interest in protecting its citizen
against internal and external threat and being used as well to give threat to others,
Buzan introduced the broader concept of security where people can be affected
within their environment by threats not only in military sectors but also of
political, economic, societal and environmental sector.
1. Military security; concern with the two-level interplay between the armed
offensive capacity and the defensive capabilities of states and their
perceptions of each other‘s intentions.
Regional
Subsystem
Nation
state
International
System
10
2. Political security; concern with the organizational stability of states, their
systems of governance, and the ideologies that provide them with
legitimacy and authority.
3. Economic security; concern with the level of access the state has to the
resources, finance and markets necessary to sustain acceptable levels of
welfare and state power.
4. Societal security; concerns the sustainability of traditional patterns of
language, culture, religion, national identity and customs.
5. Environmental security; concern with the maintenance of the local and the
planetary biosphere as the essential support system upon which all other
human enterprises depend (Saleh, 2010).
That is why; states should always consider those dimensions in pursuing
their national interest, especially for the foreign policy decision. Basically, in the
decision-making process of foreign policy, the states will always become rational.
Rationality in here means that the actor act based on its motivations, regardless of
what motivations it might be, and the choice taken can fulfill the preferred
outcome of the actor under certain circumstances. Even though the nature of the
rational choice was firstly used in economics, the benefits are not necessarily all
can be measured only by the economic gain. If it is not about the economic gain, it
does not mean that the state is not rational (Quackenbush, 2004).
In international relations, the key assumption of rational choice is nations
are led by rational, forward-looking and expected-utility-maximizing leaders. The
important contributors of rational choice in the international relations field are
Bueno De Mesquita, Lalman and others. (Redd & Mintz, 2014). Rational choice
theory has the basic assumption that the behavior and action of a national
government in dealing with the problems or issues as outcome is their result of
choices. This result comes from the rational policy where there is an assessment
of relative significance on each of the choices, calculation of costs and benefits
and by the end decision on the choice with highest benefit and lowest costs
(Quackenbush, 2004).
11
Rational choice theory is usually used when a state would like to pursue
their interest by having an advance assessment of the series of policy options it
possibly has to pursue that particular interest. Then, the state would examine the
benefit they will have on every choice and calculate the costs they need to pay.
Thus, after conducting the cost and benefit of each policy option, the state could
take a decision on which policy will maximally pursue their interest with the
lowest cost. In the context of Xayaburi Dam construction, the use of rational
choice theory in this research should be well-defined. In this case, the researcher
would like to know why a policy of continuing the dam construction with
Thailand is preferred to be pursued rather than the other option of complying with
the Prior Consultation result. The chosen policy and the series of policy options
has been identified clearly, thus the cost and benefit calculation in this theory
would be used as the evaluation of policy choice of Lao PDR towards the
Xayaburi Dam construction. This is important to give the common perception
towards the usage of the theory so that there will be no ambiguity or
misunderstanding of its application as a tool to explain the analysis of this
research.
I.7. Scope and Limitation of the Study
This thesis focuses on the regional factors and its influence on Lao PDR
management of regional cooperation in response to its unilateral act towards the
Prior Consultation result of the Xayaburi Dam proposal as the point to be
researched. It will not explore the internal policy-making process or the so-called
bureaucratic politics that occur within Lao PDR domestic context. It is clear then
that the environment or the ‗milieu‘—as it refers to the Sprouts human-milieu
relationship—that will be used is only the operational milieu and the level of
analysis will be in the regional subsystem.
In determining the influential policies towards Lao PDR foreign policy
decision, by taking into account Buzan‘s five regional security dimensions,
researcher limits the focus only in the sector of economic, societal and
environmental. This is because the case itself is around the issue of sustainable
development; the environmental sustainability that clashed with economic
12
cooperation that is expected to trigger and contribute the social improvement. In
addition, as explained in theoretical framework, the rational choice theory will be
used as well after the researcher determines the influencing regional factors
towards Lao PDR foreign policy. Its calculation of costs and benefits between two
identified policy options will try to help understanding the reason of Lao PDR at
that time to choose the option to continue the construction and ignore the request
of halting the development from Prior Consultation process.
I.8. Research Methodology
This research is conducted as a qualitative research. Qualitative research is
a research that will have its findings that is not coming from the means of
statistical procedures or any means of quantifications. The qualitative type of
research is usually used when a researcher would like to have a better
understanding of a specific phenomenon, acquire some new perspectives on
something that have been known before or gain more in-depth information that
might be hard to be gathered through quantitative means. This kind of research
will normally full with details and insights. The research problem is designed as
open-ended question that later can support the finding of new information. Thus,
in the research proposal, the primary questions and plans for data collection
strategies should be specified. (Hoepf, 1997).
In the process of collecting the data, Hoepf (1997) explained that in
common there are two prevailing forms of data collection for the qualitative
research. They are interviews and observation. However, they are not the only
ways to gather the data needed. Other sources of data are also valuable which is
through the analysis of the document; such as official records, letters, newspaper
accounts, diaries, and reports, as well as the published data used in a review of
literature.
13
I.9. Thesis Structure
A. Chapter I – Introduction
Chapter I is intended to give an initial overview of the whole content of the
thesis since it consists of many necessary basic parts. It helps to give
sufficient background that could guide the reader to understand the
circumstances of a phenomenon that is being researched, how the researcher
conduct the research, where the discussion will be going and finally could
understand the necessity of the research that is conducted reminding its
significance for the study.
B. Chapter II – Lower Mekong Governance and Lao PDR Position
Chapter II basically provides all the information about Mekong River
specifically for the lower part where Lao PDR resides. It gives explanation
about the 1995 Mekong Agreement as the basic agreement for countries in
Lower Mekong and MRC as its organ to execute the mandate. It also shows
the policies under the framework of MRC in the fields of economic, social
and environmental. At last, it gives overview on how the process of Xayaburi
Dam proposal in the PNPCA and how the rest of member countries reaction
towards the proposal.
C. Chapter III – Lao PDR Goals and Orientation in Foreign Policy
Decision Making
Chapter III starts with the brief overview of the Lao PDR political situation.
It continues with national goals and policies in the economic, social and
environmental sector. This chapter also explains the background of the other
choice that is chosen by Lao PDR which is its cooperation with Thailand
from the internal and regional driver.
D. Chapter IV – Regional Factors Influencing Lao PDR Foreign Policy
This chapter tries to understand the regional factors that influenced Lao PDR
foreign policy and how these factors influenced unilateral act of Lao PDR. It
14
comes first from comparing the different regional frameworks with their own
policies. The calculation of costs and benefits from two choices will then give
picture how finally Lao PDR chose to continue the construction as planned
that is influenced by the regional factors.
E. Chapter V – Conclusion
This chapter is the last chapter of this thesis. Concluding the thesis with some
emphasizes on the problems appeared, critical findings as well as important
analysis make this part serves the readers well with complete yet brief
overview result of overall research.
15
CHAPTER II
LOWER MEKONG GOVERNANCE AND LAO PDR
POSITION
The development of Xayaburi Dam is a controversial issue among Lower
Mekong countries. Lao PDR would be the first country in the region who explores
the hydropower potential in mainstream area of Lower Mekong. For instance,
Xayaburi Dam would also be the first trial that triggers the PNPCA conduct
within the MRC under the mandate of the 1995 Mekong Agreement.
II.1. ABOUT MEKONG RIVER
The Mekong River is one of the water resources in the world that has great
potential to be utilized as hydropower source. It is one of the world‘s great river
systems which is in Southeast Asia becomes region‘s largest river basin. It is
draining 795,000 km2 covering distance of 4800kms that makes it the 21
st largest
basin in the world with annual discharges for about 475 billion cubic meters
(Belay, 2010).
Figure 3. Mekong River Map
Source: http://cruisesmekongriver.net, 2014
16
Mekong Basin can be identified as the land that is surrounded by all
streams and rivers that flows into the Mekong River. The basin is generally
divided into two sub-basins; the Upper Mekong Basin and the Lower Mekong
Basin. The upper part refers to the national territories of the People‘s Republic of
China (PRC) and Myanmar that comprises about 30% of the whole basin.
Meanwhile, the lower part represents the national territories of Lao PDR,
Thailand, Cambodia and Viet Nam (Pearse-Smith, 2012).
The Mekong River is not only a major source of livelihoods, biodiversity
that makes it the most diverse fisheries in the world (Houba, 2012), transport
route and tourism places, it is also a symbol of friendship and kinship among
various the watershedoups resides within watershed. However, it has its preferable
role for each of the riparian states. In the upper part, for the PRC, the condition of
the landscape characterized by deep gorges and sharp drops in altitude made the
river, such an example for the development of Yunnan hydropower, is favored
over irrigation as the best use of Mekong water resources. It is different from the
other Upper Mekong country. In Myanmar, the Mekong waters are used for
irrigation to support both the continuation of livelihoods and more intensive
agricultural production (Hirsch, 2006).
In the Lower Mekong, two famous places really depend on the water from
the Mekong River. The first is the Mekong Delta in Viet Nam. This is the primary
rice growing area of Viet Nam that makes it the world‘s second largest exporter of
the grain and third largest rice producer. The other significant place is Tonle Sap
Lake in Cambodia that becomes the largest freshwater lake in Southeast Asia.
Cambodia has concern to protect the hydrological integrity of Tonle Sap Lake by
ensuring sufficient reverse wet season flows from the Mekong into the lake. One
of the primary uses of the river resources in this area is fishing, with fisheries
being significant for the livelihoods of riparian communities and for the national
economy (Grumbine, Dore, & Xu, 2012). Thailand prefers to use the water for
household and industrial needs. Lao PDR also has great concern to explore the
hydropower potential it has in the river. More than that, Lao PDR also needs to
17
preserve the dry season navigability if it wants to be the shipping port (Harris,
2005).
II.2. TOWARDS MEKONG RIVER COMMISSION
The cooperation in the Mekong area actually has been initiated back in
1947 when United Nation engaged itself with the creation of the regional
commission and continued by releasing a report on the Mekong flood control and
river development in 1952. The foundation for Mekong cooperation marked in
1957 when the Mekong Committee (MC) and National Mekong Committee
(NMC) were established. However, the actions by MC were failing because of the
political conflicts in the region and in 1975 it signed a Declaration of Principles
with robust rules particularly in mainstream development. Unfortunately, it again
fails due to the renewed internal conflict in Cambodia. Finally, Lao PDR, Viet
Nam and Thailand established the UN Interim Mekong Committee in 1977. The
negotiations began in 1994 for a new agreement that would take the Mekong
Committee out of the UN system and create a separate intergovernmental
organization under international treaty law (Mekong River Commission, 2013).
On 5 April 1995, countries reside in the Lower part of the Mekong River
Basin, particularly Cambodia, Lao PDR, Thailand and Viet Nam, together signed
the Mekong Agreement. The emergence of this agreement is characterized by the
so-called ―Mekong Spirit‖ that is defined by the mutual respect between riparian
states and willingness to engage in dialogue towards cooperative river basin
management (Harris, 2005). This agreement is a starting point for those countries
to be able independently to manage the responsibility of the river without relying
under other organization‘s umbrella (Mekong River Commission, 2014).
1995 Mekong Agreement set forth particularly the framework for
cooperation that is acceptable for all parties to achieve an optimum use and
minimize the harmful effects for sustainable development, utilization,
conservation and management of Mekong River Basin and its related resources.
The Mekong Agreement contains many provisions of previous Mekong
Committee Rules for Water Utilization and reflects as well the principles of
18
international watercourse law (Hirsch, 2006). Under its mandate, Mekong River
Commission was established as the institutional framework for cooperation that
has the benefit of the status as an international body for the purpose of the
exercise of its function. MRC later has three permanent bodies; the Council that
consist of one member from each riparian state that will make policy decision on
behalf of their government, Joint Committee (JC) that consist of no less than the
Head of Department level to implement the policies and decision of the Council,
and the Secretariat that will provide the technical and administrative services to
the Council and JC (Mekong River Commission, 1995).
The secretariat would play its role to be the agent whose responsibility is
to provide knowledge-base and decisions for the sake of Basin‘s best interest.
Thus, Basin Development Plan (BDP) is emerged as the framework for
integrating the river knowledge into development decision-making. It is supported
by the other two core programs which are the Water Utilization Program to build
a hydrological modeling system to enable agreement on and implementation of
water-sharing rules and the Environment Programme to comprehend the
implications of different development scenarios for ecology, diverse agricultural,
and fisheries-based livelihoods that depend on it (Hirsch, 2006). Besides these
three core programs, MRC also has other programs that are more sectoral, such as
Agriculture and Irrigation Programme, Climate Change Programme, Fisheries
Programme, Flood Management and Mitigation Programme, Information and
Knowledge Management Programme, Initiative on Sustainable Hydropower,
Integrated Capacity Building Programme, Mekong Integrated Water Resource
Management Project and Navigation Programme (Mekong River Commission,
2014).
MRC applied the ―whole basin‖ approach in managing the sustainable
management of the Mekong River. Therefore, MRC has developed its alliances
and relationship with the Dialogue Partners; the rest of the Mekong riparian
countries in the upper part which are PRC and Myanmar. They both this far have
shown supportive intention and commitment to cooperation with MRC, including
sharing more data and information on the status of upstream development and
19
joint capacity-building activities. This effort is important reminding that the flow
condition and sediment delivery downstream has been modified by the climate
change and hydropower (Mekong River Commission, 2014).
II.3. MRC REGIONAL POLICY
Basically, 1995 Mekong Agreement has become a basic document that
exists as a basic common understanding and agreement to execute the joint
management and development in Lower Mekong. The member countries are
agreed to cooperate in all fields of utilization and development of the full potential
of water and related resources of the Lower Mekong Basin. The utilization also
respects the sovereign equality and territorial integrity. The presence of MRC then
completed the agreement by executing the mandate through its procedure and
pursued programs (Mekong River Commission, 1995).
A. Economic Sector Policy
The basic of MRC is 1995 Mekong Agreement in which being
established for achieving the mutual benefit, joint management of shared
water resources and sustainable development of the Mekong River. It means
that MRC also has its concern in the economic sector of this region to elevate
the economic performance of riparian states. Specifically for hydropower, the
investigation towards its development in the region itself actually has been
started before the 1995 Mekong Agreement by Mekong Committee at that
time. However, the mandate of commission has changed today by Mekong
Agreement in which to cooperate and promote sustainable development,
utilization, management and conservation of water and related resources of
Mekong River Basin in an integrated approach for the economic and social
well-being of the people in riparian countries (Mekong River Commission,
2001).
The MRC Council as the governing body, in 1998, has approved five
principles of the role of MRC with respect to the development of hydropower
in response to this changing in mandate. The principles are about (i)
20
information exchange, (ii) close-cooperation with relevant international
institutions, (iii) coordination and monitoring of basin-wide activities, (iv)
studies and methodology development with respect to the environmental
impacts and socioeconomic aspects, as well as (v) mechanism for public
participation and private sector involvement (Kristensen, 2001).
These principles finally have become the foundation for formulating
MRC hydropower development strategy up until now that pays attention to
these following policy elements:
Together with other water related resources, hydropower potential is a
natural resource that can be considered to be developed in Mekong Basin
to meet the increasing needs of energy and for the wider purpose of
economic development;
Reminding the multi-sectoral approach used in Mekong Basin activities,
hydropower should be developed with regards to other uses of water;
Hydropower development should be in full recognition towards ecosystem
as well as economic and social interest of the populations affected;
To accommodate the interest of the population affected and contribute to
the achievement of sustainable solutions, the participation of stakeholders
is encouraged;
Hydropower developed should be in the context of true least-cost
expansion of power by considering all ranges of options and their
associated costs, direct and indirect for easing pressure to natural resources
for power development;
Trade off between hydropower and other water utilization as well as
development and conservation should be maintained and provide
consistency and transparency for comparing all cost and benefits;
Deregulations and private sector participation in hydropower development
should be encouraged and seen as a process towards decentralization,
accountability and improved economic performance and as a means of
improving the possibility of financing hydropower projects (Mekong River
Commission, 2001).
21
By looking at the principles of the role of MRC with respect to the
development of hydropower and the policy element in making any strategy of
hydropower development, we can see that hydropower itself is seen as a
potential sector to be explored in Lower Mekong. That is why, MRC supports
the involvement of the private sector so that the development of hydropower
could be continued as planned. Further, considering its emergence of strategic
demand to be developed, MRC through the Basin Development Plan
Programme aims to ensure that the use of the basin‘s water and related
resources contributes to sustainable economic development with poverty
alleviation as a primary goal. It is implemented through the 2011-2015 MRC
Strategic Plan, national planning cycles and governance processes. MRC tries
to facilitate the national planning and perspectives, particularly for
hydropower development by making them integrated to the regional plan and
perspectives (Mekong River Commission, 2014).
Besides that, MRC support for the encouragement of hydropower
development represented as well by the Initiative on Sustainable Hydropower
(ISH) it made. The goal of this initiative is basically to construct and maintain
the knowledge platforms as well as networks that further could enable the
member countries to exchange information, share experiences and collaborate
on tools and practices for the sake of sustainable hydropower outcome. ISH
developed a Preliminary Design Guidance for Proposed LMB Hydropower
Scheme; a basic guideline resulted from regional and international experiences
for sharing good practices relevant to all stages of planning (Mekong River
Commission, 2014).
B. Social Sector Policy
Actually MRC did not have the specific policy towards the areas of
social sector such as education, health and labor employment as a common
indicator for social sector development and goals. However, basically MRC
always considers the interest of people who could possibly be impacted from
every development plan. This is because especially the development of
hydropower could not ignore the affected people and in reverse need to
22
involve them in the construction process so that the side effect to the society
can be reduced. It will give other consideration and perspectives as well in the
hydropower development process. MRC up until now considers the public
participation as a crucial thing for the development of hydropower in Mekong
River. It calls for various stakeholders to give their opinion, personal
assessment and concern towards specific project pursued. It means that the
MRC will not let any development, disrupt the social condition of the society
and ensure the mutual benefit can be shared with all stakeholders, especially
the potential negatively affected stakeholders (Mekong River Commission,
2014).
C. Environment Sector Policy
Based on the basic document of MRC which is 1995 Mekong
Agreement, actually the protection of the environment has been set directly
through the Notification and Prior Consultation process. Through this process,
the environmental sustainability becomes the obligation of all member
countries together to be protected. This is because either Notification or Prior
Consultation, both of them require every development in tributaries and
mainstream at least should be known by all other member countries.
Integrated Water Resource Management (IWRM) is one of the ways to
make sure that the management and equitable use of water and related
resources are effective. It guides to the maximization of economic and social
welfare without putting aside the sustainability of vital ecosystem. The
Mekong Integrated Water Resources Project builds on 15 years of MRC
achievement and developed important tools for integrated basin-wide
management. The Mekong IWRM Project directly supports the MRC‘s
strategic directions for 2011-2015 in which assisting Member Countries to
implement IWRM approaches in national water resources management to
support the sustainable and equitable regional development on the basin-wide
scale. It also supports and feeds into the IWRM-based Basin Development
Strategy that is approved by MRC Council in January 2011 (Mekong River
Commission, 2014).
23
IWRM emphasizes the effective management and equitable use in a
water resource. It means that any projects or activities of one actor should be
carefully conducted so that it will not harm the other actor‘s right. That is
why; all projects under IWRM is managed so that there will not be any project
that is allowed to be conducted without any proper assessment of risk and
benefit sharing in advance or without any alternative preventive ways for any
unexpected risks. This is the part when the environmental aspect of MRC
rules the project of riparian countries. Reminding the mutual and sharing
benefits of the full potential of Mekong resources for all member countries,
MRC will halt any project that could badly harm the other member countries.
As for the mainstream hydropower development, since the
environmental costs could be very high in biodiversity, environmental
hotspots, fish migration disturbance lead to the extinction, sedimentation and
others, the Basin Development Strategy, which uses IWRM as base, prioritize
the building knowledge process including the scale and distribution of risks
and possible avoidance, mitigation and benefit and risk sharing options. It is
also put the necessary frameworks in assuring that risks can be effectively
minimized and trans-boundary assessment in PNPCA is completed before
construction decisions on the projects are made (Mekong River Commission,
2011).
II.4. THE PNPCA PROCESS FOR XAYABURI DAM
PROPOSAL
Based on the agreement, any utilization water development in the area of
Lower Mekong tributaries should go through the Notification process to JC while
the development in the mainstream part should go through the Prior Consultation
that has the final aim to have an agreement by JC. In a pursuant to MRC
Council‘s resolution on Water Utilization Programme of 18th October 1999 and
the decision of MRC Joint Committee in February 2003 on the Establishment of
the Technical Drafting Group 4, the four MRC Council members approved on
November 13th
2003 the Procedures for Notification, Prior Consultation and
24
Agreement (PNPCA). This is the document in which regulating the process
mandated before by the agreement that is arranged in a more technical way. The
objectives of this procedure are to provide steps to support the establishment of
the Rules for Water Utilization and Inter-Basin diversion as well as promote better
understanding and cooperation among member countries in a constructive and
mutually beneficial manner (Mekong River Commission, 2003).
According to this procedure, there will be three steps in the process; which
are proposal submission, evaluation and reaching agreements that will take
approximately 6 months long or could be extended as needed. The process started
officially when MRC receives the proposal from the relevant government agency
through National Mekong Committee (NMC). After being checked for its
compliance with the documents required, it will be spread to the other three
members through JC. The technical review process will be started by collectively
consulting on the proposed mainstream development and requesting any necessary
data needed for further evaluation. In this step, the compliance towards the
procedures on flow regime and key environmental and social impact will be really
concerned. Finally, after the evaluation process, the final aim is to reach an
agreement among the MRC JC on how to process the proposal (Mekong River
Commission, 2014).
If the JC could not reach the consensus, the process may be extended until
it reaches the unified decision. If it is still not possible, the views of other
countries will be recorded and the notifying country will take it into account in
considering the final decision for the project. When the country decided to
continue the project, then special consideration would be required by MRC
provisions related to causing of possible harm from the proposed use (Mekong
River Commission, 2014). This is the best effort that the countries could do to
conduct the ‗Prior Consultation‘; the process in which required to timely notify
the JC as well as to provide additional data and information that allow other
riparian to discuss and evaluate the impact as the basis to reach the agreement, and
the most important one is that it is not the right to veto or even the unilateral right
25
to use water without taking into account other riparian‘s right (Mekong River
Commission, 1995).
In this first PNPCA process triggered by the Xayaburi Dam proposal,
several technical groups such as the Working Group (PNPCA WG) and PNPCA
Task Group have been established to support the Prior Consultation process. The
table below will show the Prior Consultation roadmap for Xayaburi dam within
the PNPCA process.
Date Milestone of Activities
September 20, 2010 MRC Secretariat (MRCS) has received the submission of the
proposed Xayaburi mainstream hydropower dam project from
Lao PDR through its NMC.
October 1, 2010 The MRCS started the Internal Procedure for checking the
compliance of submission as outline in PNPCA as well as
circulated the received documents to JC and other member
states.
October 4, 2010 MRCS circulated the draft of Prior Consultation Road Map to
the PNPCA WG as the technical group who will guide the
MRCS and further report to the MRC JC.
October 26, 2010 The PNPCA WG conducted its first meeting, not only for the
discussion towards the draft roadmaps for endorsement but also
to discuss the MRCS role on the facilitation of the process and
the technical review, as well as agreement for public
participation and on the schedule for field visit.
October 27, 2010 Special sessions for the MRC JC as an opportunity to inform
the JC regarding the Prior Consultation process.
October –
November 28, 2010
The starting date of the second phase of the process which is the
technical review by MRCS. MRCS played role in scoping
assessment on submitted documents based on MRC‘s
Preliminary Design Guidance for Mainstream Dams. MRC also
had the consultation with sector expert groups for any
environmental consideration of the dam.
26
November 29, 2010 Field visit by JC, PNPCA WG and MRCS that is facilitated by
the Lao PDR NMC and the developer of the project.
November 30, 2010 The conduct of the second PNPCA WG Meeting. There were
presentations of draft MRCS scoping assessment, initial
national review findings. It also reviewed any public
participation process undertaken to date.
December 1, 2010 –
January 28 2011
Continuation of the technical Prior Consultation review by
MRCS. It continued to detailed review of documents in relation
to Preliminary Design Guidance for Mainstream Dams.
January – February
2011
The conduct of public consultation with other riparian countries
through the national consultation meeting.
February 14, 2011 The conduct of the third PNPCA WG Meeting to discuss about
the draft of Prior Consultation Review Report, national review
findings, and a preliminary summary of comments from the
public participation process.
February 28, 2011 Final draft of MRC Prior Consultation Review Report
compilation.
March 24/25, 2011 Submission of the final draft MRC Prior Consultation Review
Report to the Preparatory Meeting of MRC JC and Report on
NMC-organized consultation meeting to JC.
April 19, 2011 Special JC Meeting in Vientiane, Lao PDR that resulted in the
conclusion that the Prior Consultation process will be given to
the ministerial level.
December 8, 2011 MRC Council took conclusion regarding the needs for further
study on the sustainable development and management of the
Mekong River including impact from mainstream hydropower
development project
Table 1. PNPCA Internal Process Road Map for Xayaburi Dam
Source: MRC 2014
According to the process, the proposal of the mainstream projects has to
comply with the MRC‘s Preliminary Design Guidance for Mainstream Dams as
27
the standards. It relates to fish passage, sediment transport and river morphology,
water quality and aquatic ecosystems, dam safety, and navigation systems. Based
on the process above, the proposal of Xayaburi Dam has failed to fulfill properly
the standards of MRC based on the design guidance and it has been sent to the
ministerial level. The decision was not surprising since there have been numerous
bilateral meeting between countries during the discussion of Xayaburi project,
Nevertheless, ―preparatory‖ work—the work of supporting the full construction
has been continued under the claimant that the permission will at the end be given
(Grumbine, Dore, & Xu, 2012).
A. Responses from Riparian Countries towards PNPCA Process
In the process of Prior Consultation, MRC conducted the National
Consultation Meeting (NCM) that is held among all riparian countries. The
objectives of the meetings are (i) to involve the potentially affected
stakeholder and wider public in mission to raise awareness as well as obtain
constructive feedback; (ii) to gain representative range of views for addressing
the both local and trans-boundary aspect, (iii) to collate views from wider
group and provide holistic overview for decision-makers, and (iv) to reflect all
comments for MRC JC consideration (National Mekong Committee
Cambodia, 2011).
Cambodia
Cambodian emphasized that the six-month period of consultation is
not enough for comprehensive assessment, especially this is the first
mainstream project. It became a question as well on how the developer
could respond the inquiry for additional information from MRC within a
short - period of time. Cambodian saw that there are many uncertainties
and assumption in the proposal so that it made the document became a
hypothetical finding and will difficult JC later on to make decisions. They
are also asking on the scope of social, economical and environmental
trans-boundary impacts for Cambodia specifically. The impact on the
agriculture sector, ecosystem, local socio-economy, and environment from
28
flow regime change are their major concern besides the impact of water
pollution and water quality impairment. Cambodian also highlighted the
safety of the dam towards recent earthquake (National Mekong Committee
Cambodia, 2011).
Thus, based on their opinion, they offered some suggestions if the
proposed country would like to still develop the dam. First, they suggested
the need for further study on negative trans-boundary impact of social-
economy and the environment as resulted from flow regime change and
dam operation. Further assessment should be conducted based on
international standard. There are also a need for consensus from
downstream water users on water use upstream, as well as compensation,
training and awareness rising, and benefit sharing to affected countries.
Finally, they supported a ten‐year delay in the approval of Lower Mekong
river mainstream dams to ensure a comprehensive understanding of all the
impacts of their construction and operation (National Mekong Committee
Cambodia, 2011).
Viet Nam
The response is quite similar with Cambodian views. Viet Nam
also felt that the PNPCA process should be longer, and there is a need
within the range of 5-10 years for conducting further studies on dam
impact and mitigation measures. They also felt that the project document
submitted lacked of details and they saw the necessity to expand the scope
of impact assessment to upper and lower basin areas. Viet Nam put
concern on the close collaboration between riparian countries and research
institution, and IOs that suppose to be done in handling the proposal
review. This is because Xayaburi Dam will create precedence for other
dams planned on the mainstream of the Mekong River so that the studies
should be conducted in the prudent manner. Viet Nam sees the potential
impacts of the dam by altering the natural flow regime, reducing sediment,
increasing salinity intrusion into the land, reducing soil nutrients, declining
29
biodiversity and directly affecting the safety of water sources and food
security for Viet Nam especially in the Mekong Delta that is really crucial
for Vietnamese (National Mekong Committee Vietnam, 2011).
Thailand
A little bit different from Cambodia and Viet Nam, Thailand‘s
result on the NMC is not as many and detail as those riparian countries. In
the report, they briefly delivered their concern about key issues which
have not been studied clearly in Xayaburi study regarding change of
ecological system¸ biodiversity, fish migration and food security,
livelihoods of local people along the Mekong River, bank erosion and loss
of agricultural area along the river. They gave suggestion to make
additional study and the results should be disclosed to the public (National
Mekong Committee Thailand, 2011).
The comments above are the results of the National Consultation
Meeting on the paper submitted to the MRC in the PNPCA process. Seeing
many concerns appeared from the riparian countries, MRC finally could not
come into decision to let Xayaburi Dam being further processed. MRC put
concern on the non-compliance of the documents submitted and the trans-
boundary impact assessment that has not covered yet by Lao PDR and the
project developer. It is the source where MRC get the conclusion to ask for the
further studies before the project is continued.
Basically, along with the on-going process in MRC, Lao PDR hired Poyry
on 5 May 2011; a Finnish Engineering Company to help assessing the project
compliance with the MRC standards. Poyry itself is claimed as one of the world‘s
engineering consulting firms in hydropower with 120 years of hydropower
expertise with the core areas in reservoirs storage schemes, pumped storage
schemes, cascade schemes, run-of-river schemes, multi-purpose schemes, dam
safety and environmental assessment, technical and financial due diligence, river
basin development and flood protection, electro and hydro mechanics as well as
automation and control. Since it is suitable with Lao PDR necessity, Poyry is
30
finally appointed as the GoL‘s engineer in the construction phase of the Xayaburi
Hydropower plant project in Lao PDR. Its services will be executed during the 8-
year construction period (Poyry, 2012).
Based on the assessment made by Poyry, it concluded that the Xayaburi
Dam proposal has principally been designed in compliance with applicable MRC
Design Guidelines. The result of Poyry assessment actually did not deny as well
that some numbers of technical adaptations and improvements is still required.
However, they could still be fulfilled during the construction phase (Poyry, 2011).
Poyry concluded that the assessment on trans-boundary impact is not the
responsibility of project developer. Poyry also interpreted that Lao PDR has
completed the PNPCA process based on proper procedure and it is Lao PDR right
to go on with the project. On the other hand, based on the International River
Review Report towards the Poyry Assessment, the poor quality of the report, the
biases that could prevent objective analysis towards the project as well as the lack
of responsiveness from the GoL could not be used as the reason to make the
Poyry assessment as the basis to move on with the project and ignore the MRC
inquiry and riparian countries‘ concern (Herbertso, 2011).
This is where the debates between involving parties goes further. Lao PDR
deputy energy minister Viraphonh Virawong said during the full-construction
remark, "I am very confident that we will not have any adverse impacts on the
Mekong River," Mr. Viraphonh told the BBC (BBC, 2012). As recorded by the
Cambodia Daily on January 2013, he once again further claimed, ―After six
months, all you can do is record the difference of opinions and that is the end of
the process‖, when referring to the consultation process demanded by the 1995
Mekong Agreement (Chen, 2013). The cooperation partner of Lao PDR, Thailand,
has its own stance that, ―Laos has the right to construct the dam as it is located
inside the Lao territory. We will not oppose the project. But if there are any
environmental impacts, the Lao government must take responsibility,‖ Thailand‘s
Natural Resources and Environment Minister Preecha Rengsomboonsuk said
(Chiangrai Times, 2011).
31
This action and statement is one of the evidence that Lao PDR ignored the
concern from other riparian countries. Whereas, several months before the
ceremony marking, on May 3rd, 2012, Cambodia‘s Water Resources Minister still
insisted, ―Cambodia‘s position is that Laos should halt the dam construction while
the environmental impact study is being carried out.‖ (Asia Times, 2012) In
addition, Vietnamese Deputy Minister of Natural Resources and Environment,
Nguyen Thai Lai, also expressed quite similar concern with Cambodia. ―Each
riparian country should show their responsibility by assuring that any future
development and management of water resources proposed in the basin should be
considered with due care and full precaution based on best scientific
understanding of the potential impacts,‖ (Chen, 2013). The opposition over the
construction even still continued at the MRC meeting after the full construction
remark that was held on January 2013 where Cambodia insisted that construction
should be halted and Viet Nam is more vocal unless an agreed upon independent
study has been completed (Hunt, 2013).
32
CHAPTER III
LAO PDR GOALS AND ORIENTATION IN FOREIGN
POLICY DECISION-MAKING
Lao PDR is the state that has the interest to build the dam. For instance, it
becomes crucial to know the national goals of Lao PDR and what policies have
been set to achieve the goals. However, before that, it is important as well to
understand the Lao PDR political situation and culture. It gives an idea of how
politics works in Lao PDR and how it shapes the political interaction. Then, after
getting to know the Lao PDR situation, the necessary thing to do is to understand
the orientation of it in making Xayaburi Dam, which is continuing the dam as
scheduled with Thailand under the ASEAN-GMS framework.
III.1. LAO PDR POLITICAL SITUATION
Since long time ago, the core traditional political structure of Lao people
was the Meuang or it is familiar today as a district. Meuang was led by a Chao
Meuang who comes from leading autocrat family supported by three other
officials from other ruling families or collateral aristocrat families to fulfill the
civil and military task. Smaller Meuang would then merge into larger Meuang
constituted Meuang Lao or Mandala in which at one time accepted the King of
Lao Kingdom Lan Xang as their sovereign. The thing that made Meuang together
as a political structure was personal loyalty. It was reflected on how people
personally committed to their Chao as the patron of their welfare, how Chao was
responsible to administer and enforce law within Meuang, and how Chao Meuang
put his loyalty to more powerful prince by taking an oath publicly and drinking
the consecrated water of allegiance. The strength of Meuang depended on the
ability to concentrate wealth and power; political, economic, military and
ideological. The ideological one derived from legitimization which comes from
inheritance, ‗consent‘ of the spirit of the land and on Buddhism where Karma
rules as to accept one‘s lot and to live in accordance with the precepts of
33
Buddhism would improve one‘s chance for a better future rebirth. With this in
mind, the people accepted their social position and saw the elites as the ones who
were worth to be in their higher position. Even though the French has ever ruled
in Lao, the role of aristocrat families remained unchanged with the exchange for
principal political support to the French presence (Stuart-Fox, 2005).
The Kingdom of Laos lasted from 1946 to 1975. Its political legitimacy
was the continuity of the previous kingdom of Lan Xang and drew powerful
support from Buddhism. Karma won over the political structure of the modern
state in which giving legitimization to those that has wealth and power and their
extended clans of dependents and supporters consist of network of relationship
functioned as patronage networks. The promise of revolutionary movement at the
end of 1975 known as Pathet Lao—which later known as Lao People‘s
Revolutionary Party (LPRP) —also simply did not work. This is because it still
used traditional Lao respect for the aristocrat elite in foregrounding members of a
revolutionary movement from the same families who ruled before. Even though
the young member of aristocrat family were searching for education abroad, the
old ones stayed in the country and work with the new regime. The old
revolutionary elite used their position to gain property and give rewards to
extended family members with favor jobs in order to gain the political support
base. In addition, some of the other aristocrats outside the Party were gaining
relations with the Party member by political marriage. The young aristocrat family
members were looking for a position in the government or going into business
using their political contacts (Stuart-Fox, 2005).
According to Lao PDR National Constitution that was adopted in 1991, in
Chapter I, Article 3 stated, ―The rights of the multi-ethnic people to be the masters
of the country are exercised and ensured through the functioning of the political
system with the Lao People's Revolutionary Party as its leading nucleus.‖
(Government of Lao PDR, 1991) Through this article, LPRP become a powerful
political actor in Lao PDR. Since the Party is handled by those particular cultures,
the power stays with those whose families and close colleagues have been in the
34
politics and government, especially the Party or those who has strong political
network and wealth.
LPRP has the Political Bureau or Politburo as the highest organ in its
structure and the most politically powerful body in Lao PDR in which the member
was elected from and by the Party Central Committee. The party has wide
influence in all levels in Lao PDR. The party members merge into committees that
exist within each line ministry, at national, provincial and district levels. Besides
making the committee on every level of government administration, there are also
representations of LPRP in the central government who strengthen the role of the
LPRP in government as follows:
The President of the Republic and Head of State who is usually the
General Secretary of the Party and Head of the Politburo; as the current
President H.E. Choummaly Sayasone who is also the General Secretary of
LPRP (UNDP, 2012);
The Prime Minister who is traditionally being positioned by a key member
of the Politburo; as the current Prime Minister H.E. Thongsing
Thammavong who made number two in the Politburo (Bertelsmann
Stiftung, 2014);
Provincial Governors who consist of the members of the Party Central
Committee and the General Secretaries of the respective Provincial Party
Committees;
General Secretaries of the respective District Party Committees as the
District Governors;
Ministers who are frequently the members of Politburo or Central
Committee (DPADM, 2005).
35
Figure 4. The State Structure in Lao PDR
Source: UNDP 2005
The government and the party are overlapping each other when LPRP
monopolized all political power in 1975. The Party‘s Congress is held not only to
elect the Politburo and the Central Committee, but also to determine the policy
goals and orientation. Lao PDR is now becoming an authoritarian one-party state.
The Party also has control over other three crucial institutions; bureaucracy, mass
organization and the military. The bureaucracy becomes the administrative tools
for the Party. The lower officials will not be brave enough to take a decision
before asking the higher ones. Any political activities and ambitions are restrained
by the coercive power of the State unless joining the Party. The only mass
organizations permitted are those which are directed by the Party; the Lao Front
for National Construction (LFNC), official trade unions under the banner of
Federation of Lao Trade Unions, the Lao Women‘s Unions, and the Revolutionary
Youth Union. In the army, almost all officers are Party members and its support to
the Party which is extended to the Security Ministry and police, assists Party with
a coercive power to do monopoly and guarantee that Lao PDR will always a one-
party state (Stuart-Fox, 2005).
36
III.2. LAO PDR GOALS AND POLICIES
Xayaburi Dam is the project that is pursued by Lao PDR. As one action
pursued, there must be some targets or goals by a state to be achieved through this
action. To understand the unilateral act by Lao PDR, it is important to at first
understand the national goals together with the policies to achieve it from the
economic, social and environmental sector. Once, the Prime Minister of Lao PDR
stated in his instruction on the formulation of Seven Five Year Plan (2011-2015)
that one of the main objectives of the next NSEDP is to ―provide necessary pre-
requisites for improving people‘s living conditions, reducing poverty and
accomplishing MDGs by 2015 and exiting LDC by 2020‖ (UNDP, 2012).
A. Economic Sector
Lao PDR has a key tool in her various planning of long-term, middle-
term and annual planning to translate and implement the Party‘s guidelines
and manage the economy of the country. The Party formulated policies,
measures, programs and projects timely to fully achieve the objectives, ―To
enrich and strengthen the country, to build the country with civilization and to
make people rich and happy.‖ Since its formulation in 1975, the
socioeconomic development plan of Lao PDR was divided into two; the
centrally planned system from 1976 to 1985 and the new economic
mechanism; a transition to a market-economy system from 1986 until now
(Somphanith, 2014).
Type of Planning Year Objectives
Annual Planning 1976-1977 To recover the agricultural and industrial
production by providing the guidelines and
setting major target
To be a commodity-based system from a
subsistence-based economy country
Three-Year Plan 1978-1980 To improve the industrial facilities in order
to increase the production
37
The First Five-
Year Plan
(Set by the Party
Congress III.)
1981-1985 To encourage agricultural and forestry
production for food security
To add more industrial plants and factories
as well as improve existing ones
To construct the infrastructure, primarily for
the national highway No. 9 and the national
highway No.13
Table 2. Centrally-planned System of Socio Economic Development
Source: Somphanith 2014
After trying to implement the centrally-planned system for about a
decade, there was a need to change the system that was more suitable to the
development of the situation at that time. Based on the Central Party Congress
IV in 1986, the Party finally announced the movement towards the so-called
―New Economic Mechanism‖ aiming at preparing the foundation of a market
economy and it is conducted within five-year plannings.
Planning
Year
Basic of Implementation Objectives
1986-1990
(2nd
five-
year plan)
IV Party Congress in 1986
and the transition period
from the central command
economy to the New
Economic Mechanism
(NEM) policy
To establish structures for
agriculture, forestry, industry and
services growth
To improve and prepare the laws
and regulation of the private
sector
To implement open door policy
for foreign cooperation
To privatize former state
enterprises
1991-1995
(3rd
five-
V Party Congress‘s
Resolution in 1991 and
continuation of new
To be a commodity production
economy from natural economy
To improve the infrastructure for
38
year plan) economic mechanism socioeconomic development and
approval system for foreign
investment and cooperation
To promote foreign cooperation
and foreign investment
1996-2000
(4th five-
year plan)
VI Party Congress‘s
Resolution in 1996
To encourage participation from
all economic sectors and people
in national development and
promote savings for the national
balance and self-reliance
To provide social welfare and
increase the number of people
participating in the national
economy
To promote international
cooperation with pursuant to the
open door policy with
international friends
Table 3. The First Three Five-Year Planning under NEM Policy
Source: Somphanith 2014
As long as 35 years after the Indochina War, Lao PDR development
was still low and it is still being classified as a Least Developed Countries
(LDC). The United Nations Committee for Development Policy (CDP)
defines LDCs as countries that are suffering from structural handicaps to
economic development because of the condition of low incomes, low levels of
human resources or capital, and high levels of structural economic
vulnerability (ASEAN, 2013). Realizing this circumstance, Lao PDR has set a
goal to graduate from the LDC category by the year 2020. At first, this
country needs to work hard to address some key challenges such as
accelerating poverty reduction, maintaining sustainable economic growth,
conservation of natural resources, biodiversity and ecosystem as well as social
development. The vision of the sustainable development itself was
39
promulgated in National Sustainable Development Strategy (NSDS) 2008 as
―achieving the sustainable well-being of all people of Lao PDR through the
simultaneous and integrated pursuit of a prosperous economy, equitable
society and healthy environment.‖ (Ministry of Natural Resources and
Environment, 2012)
The goal of graduating itself from LDC has become the Long-Term
Strategy for Socio Economic Development of the Year 2020. It provides the
guidance for the development policy in Lao PDR, including broad goals,
strategies and guiding principles. It is important to not only economic
development, but also social development, protection of the national resources
and national security. Taken from this long-term strategy, the five-year
National Socio Economic Development Plan (NSEDP) is available to support
the achievement of the long-term plan by providing the detailed development
strategies and frameworks for prioritizing the Government expenditures‘
programs (NSEDP 2001-2005, 2006-2010, 2011-2015) as well as sectoral
strategies. NSEDP 2001-2005 had a primary focus on the core goals of
socioeconomic development and national security. It also integrated the
initiative on sustainability of natural resources that helped making the broader
integration of sustainable development into national planning processes. The
continuation of this planning, in NSEDP 2006-2010, became more into reality
when some essential sustainable development principles were recognized.
National socioeconomic development must be balanced with economic
growth, socio-cultural development and environmental preservation and
putting best effort towards the achievement of Millennium Development
Goals (MDG) by 2015 for poverty reduction (Ministry of Natural Resources
and Environment, 2012).
In the NSEDP 2006-2010, the export sector had been set that by 2010,
the export would account for 44.6% of total export turnover. The dominant
export goods would be electricity and minerals such as gypsum, gold, and
others as they become rather stable export capacities and take an important
role, especially electricity. The major market of the export would be Thailand
40
and followed by Viet Nam and Cambodia. It was targeted that in the five year
period of 2006-2010 Asia market would become vocal market for national
expert (Government of Lao PDR, 2006).
The on-going plan pursued by the Lao PDR lies under the NSEDP
2011-2015. It followed the resolution of the Ninth Party Congress, which is
the implementation measures of the National Socioeconomic Development
Plan until 2020 and the Seventh Five-Year Plan. This five-year plan is
characterized by the Boukthalu Plan (Breakthrough Strategy); a plan that is
regularly changed and ensured for achievement of the current and planned
objectives, particularly for certain elements, as intended in four objectives:
breakthrough in imagination, human resource development, mechanism,
regime, and administrative rules as well as poverty reduction. These dynamic
plans can bring changes in the people's livelihoods, which influence
economics and politics. This five-year plan contains four big targets such as:
(i) Maintaining the economic growth in a stable and progressive manner
at more than 8% per year and GDP per capita estimation for 2015 is
approximately USD 1,700 per person per year at current prices;
(ii) Achieving the MDGs (including poverty reduction) and full integration
with the ASEAN Community 2015, acquiring modern technologies
and infrastructure, and establishing a diverse economic foundation to
help the country graduate from the Least Developed Country status in
2020,
(iii) Ensuring sustainable development by integrating economic
development with socio-cultural development and environment
protection,
(iv) Ensuring political stability, fairness and order in the society, maintain
public security and support regional and international integration
(Government of Lao PDR, 2011).
Under these broad goals, specifically for the energy and mining sub-
sector, GoL‘s approach refers to the belief that these sub-sectors are really
potential for short and long-term. Through this vision, it is expected that these
41
sub-sector will help serve the society and earning income for accumulating
capital for socioeconomic development. This sector will play an important role
in the future for modernization and industrialization process. It is also
important to raise people‘s living standards and become the Battery of
Southeast Asia. Thus, the development in the power sector will be emphasized
on using, developing and expanding hydro resources, coal and renewable
energy for environmental-friendly energy, expansion of transmission lines that
are important to meet the domestic demand of energy supply and export.
However, the use of them must be effective and still preserve and protect the
environment (Government of Lao PDR, 2011).
B. Social Sector
Besides the economic sector, social sector is also becoming a crucial
sector that needs to be developed side by side with the economic development.
If the economic sector could be well-developed, it is expected that it will
directly impact the social sector of the country since the people could leave the
poverty line and raise their living standard. The GoL would like to pursue the
economic policies that could also connect and bring positive impact as well as
acceleration towards social development.
Since the country was recovered from the civil war between Royal
government and Pathet Lao, the social sector was becoming a crucial part of
the country that received special attention from the government right after its
establishment in 1975 after economic recovery. The first five years of its
establishment, the GoL focused on the recovery process such as securing the
national defense and strengthening new administration. Besides, the effort to
provide the housing, farming land and job vacancy for people as well as
rebuild the district were done to increase the people‘s livelihood. Since 1986,
the government has started to enhance the basic social needs of the people
such as education and access to public health. In 1996, the government started
to invite people to take part in the national development effort and reduce the
gap between the party and the people for the sake of national unity and
security. Further, the importance of the improvement of law and party
42
management were also being recognized to enhance the social welfare
(Somphanith, 2014).
UNESCO, in its Country Programming Document for the period 2011-
2015 wrote that based on the sixth NSEDP 2006-2010, the National Growth
and Poverty Eradication Strategy (NGPES) and Education for All Mid-Decade
Assessment, it concluded that the key priorities of GoL in the social sector
were still addressing on the enhancement of people‘s ability to get the quality
and access to the better basic education and health services, involve in
employment and income-generating activities as well as involve in
government social safety-net coverage (UNESCO, 2012). In the seventh
NSEDP 2011-2015, some points are clearly defined regarding the plan to be
achieved in the social sector during the period. Lao PDR paid attention much
on the development of education so that it could be the core pillar of the
society. It is not only emphasizing on reaching more people in wider coverage,
but also ensuring the existence of gender equity in it. Next, the government
will support the development of human resource, meaning that it is also
important to make sure that the Lao workforce will possess the right education
and training that will suit the qualification and necessity of the industry. Thus,
the Lao workforce could have the high qualification that will help them to find
a better job to improve their living. The government also pays attention in
such ways to make the people physically and mentally healthy by creating the
condition for all to have easy access to high quality of health services
(Government of Lao PDR, 2011).
C. Environmental Sector
As the New Economic Mechanism applied in Lao PDR, the country
increasingly recognized the necessity to pursue the so-called sustainable
development. This vision has indeed involved the environmental sector as the
other crucial part in national development. In the sixth NSEDP, this point has
clearly been stated that the economic growth pursued nationally should be
linked with the environmental conservation. It is not only the NSEDP, but also
the National Strategy on Environment also linked the environmental
43
sustainability with the economic well-being that indeed could embrace the
MDG target. The main goal is to ensure proper environmental management
and sustainable use of natural resources that involve public participation
(Ministry of Natural Resources and Environment, 2012).
In the seventh NSEDP, Lao PDR decided that there must be a
reasonable and efficient use for natural resources to ensure that the balance
between socioeconomic and environmental protection is always managed. Lao
PDR should be a green economy with clean development; ensuring the
quality, effectiveness and outcomes of economic development and creating
national competitiveness by placing priority on intellectual development. The
country also should interlink the economic development with social culture,
environmental protection as well as social progress and social justice. Based
on the country situation that is rich with natural resource, for instance, it is
crucial to ensure the environmental protection through protecting forest, land,
mineral resources, water resources and rich species of the nation in a
sustainable manner. At last, it is hoped to fulfill the achievement of the MDG
no. 7; which is ensuring environmental sustainability. Specifically for the
Water Resources, Weather Forecasts, and Hydrology, some target have been
set such as to implement the integrated water resource management strategy,
policy and operation plan; protect watershed; improve the legal and regulatory
standard of integrated water resource management through a sustainable
manner and synchronize the activities of the MRC and international partners
with activities and priorities of government agencies (Government of Lao
PDR, 2011).
III.3. EXPLORING LAO PDR CHOICE ON PURSUING
COOPERATION WITH THAILAND
In the case of Xayaburi Dam construction, Lao PDR finally chose to act
unilaterally continuing the construction without the consensus-based approval
within PNPCA process. It is interesting to be understood the background of this
44
cooperation; what this cooperation has actually so that Lao PDR did not want to
give up on this to follow the decision of JC.
A. Driver from within Thailand
Thailand is mainland Southeast Asia‘s largest energy consumer. Since
its transformation from agrarian to export-oriented country started in the
1960s, national demand towards energy supplies especially electricity energy
increased significantly. The country‘s economic growth has resulted in the
increasing demand of electricity for about 7% a year. The biggest consumers
of this electricity are industrial and the commercial sectors that consume
42.4% and 35.56% respectively (Matthews, 2012).
In Thailand, the powerful state and the private sectors are playing
significant roles in the supply of the national electricity demand. Thailand‘s
government has Electricity Generating Authority of Thailand (EGAT) as the
state-owned company that monopolizes the electricity generation by becoming
the single buyer of imported electricity and the only actor in national
electricity distribution. The structure of the Thai energy sector also gives great
opportunities for private sectors in Thailand such as Thai Banks, construction
companies and independent power producers to take part in the investment or
construction project with EGAT (Matthews, 2012).
EGAT has controlled the electricity transmission and production in
Thailand since 1960s. However, the massive costs and debt have made EGAT
went through a series of reforms required by the International Monetary Fund
(IMF) and World Bank, which aims to privatize EGAT and the introduction of
privately operated Independent Power Producers (IPPs). EGAT still could
keep its position by having significant interests in many of the emerging IPPs.
However, the case was repeated again when 1997 Asian Financial Crisis. With
the election of Prime Minister H.E. Thaksin Shinawatra, EGAT became a
national champion as he halted the privatization and regained full political
backing for EGAT. When the Prime Minister overthrew by the military coup
in 2006, the privatization within EGAT is inevitable. EGAT faced conflict in
45
between low-cost electricity and boost up the benefit of IPPs. Later, IPPs
signaled their concern on the investment and acquisition abroad in Southeast
Asia. With this kind of reformation, it influenced the number of hydropower
and the way they are constructed (Matthews, 2012).
In fact, the national high electricity demand could not be possibly
fulfilled domestically. Even though, according to Thai Energy Policy and
Planning Office (EPPO) the potential of hydropower in Thailand could reach
up to 15,155 MW, the installed capacity only resulted in 3,438 MW.
Hydropower development has become a political issue among Thai society
since 1990s, along with the development of Pak Mun and Rasi Salai dams and
the subsequent popular uprising of the Assembly of the Poor. The civil society
of Thailand, which has the rising role today in shaping national energy policy
has been really vocal and against any development of the hydropower in the
country and generally along the Mekong River as well (Matthews, 2012).
The civil society was also seeking their influences towards the
EGAT‘s power planning process. This is because they argued that the
planning of EGAT in Power Development Plan (PDP) toward the large-scale
electricity generation plants will only benefit for them, the construction
companies, and energy companies and put aside the potential for energy
efficiency and renewable energy. Then, in 2004, civil society initiatively made
the alternative PDP and two expanded studies have been developed since then
by Greenpeace and Palang Thai. By using the official data from the Thai
government, the studies concluded that Thailand could fulfill the national
demand through repowering existing power station, promoting energy
efficiency and demand side management and renewable energy technologies
(Middleton, 2012).
This situation surely becomes a constraint for the Thai government to
try fulfils the energy demand from national potential energy supplies,
especially through the exploration of the Mekong River by hydropower
projects. High demand and the opposition from the civil society to any new
large-scale development projects forced the government to look for any new
46
source outside the countries. Thailand in fact is heavily dependent on natural
gas and EGAT is on its mission to diversify the resources hydropower and
coal-fired power stations (Middleton, 2012). Thus, it made Thailand has no
choice to pay her attention to neighboring countries in the Lower Mekong
region, which has good energy potentials they need, particularly Lao PDR for
generating energy from hydropower.
B. Regional Driver
Besides the regional ties of the Lower Mekong region under the 1995
Mekong Agreement, Thailand and Lao PDR are also members of Greater
Mekong Sub-region (GMS). GMS is at first only a natural economic area
bounded together by Mekong River that consist of the People‘s Republic of
China (especially the Yunnan Province and Guangxi Zhuang Autonomous
Region), Myanmar, Lao PDR, Thailand, Cambodia and Viet Nam. Then, in
1992, ADB assisted these six riparian countries to enter into a program of sub-
regional economic cooperation. It is designated to enhance the economic
relations between them and help the implementation of high priority sub-
regional projects in transport, energy, telecommunications, environment,
human resource development, tourism, trade, private sector investment and
agriculture (Asian Development Bank, 2014).
The vision of the Greater Mekong Sub-region is to facilitate a free
flow of goods, investment and people between Mekong countries, leading to
rapid economic growth. There are the main strategies that would be achieved,
such as enhancing the agricultural development, including food safety and
security, accelerating the development and implementation of the pro-poor
sustainable tourism industry, with the creation of multi-country tour packages
to help spread revenues more widely and promoting low-carbon development
and enhancing the management of the sub-region‘s richly diverse ecosystem
(Asian Development Bank, 2014).
This sub-regional economic cooperation found its importance while
looking at the potential of the GMS rapid and sustained economic growth.
47
GMS in fact has abundant natural and human resources as well as located in
the strategic place that acts as a ‗land bridge‘ between South and East Asia. In
response to the fact that around 15 million GMS inhabitants are still poor, the
GMS Program is set to envision a more integrated, prosperous and equitable
Mekong sub-region with the goal to complement national efforts in promoting
economic growth and reducing poverty. It focuses on expanding the trade and
investment among member countries, facilitating cross-border movement of
people and goods and addressing common resource and policy requirements
(Asian Development Bank, 2009).
To maintain the rapid economic growth, the sub-region also has to
maintain international competitiveness. However, the access to the modern
energy is not equal among countries. This is the fact that makes the energy
trade within the region is important as well as the existence of scenario of
cooperation where 19.2% of total GMS electricity consumption will be
fulfilled from trade within the sub - region. Under the GMS integrated
scenario, Lao PDR, Myanmar and Cambodia will play as the key power
exporter. They would be the supplier of power for the rest of the member
countries like mostly to Guangxi, Thailand and Viet Nam. Thailand will
become the dominant importer of electricity in the sub-region (Asian
Development Bank, 2009).
In 2000, a Policy Statement was issued that contained the objectives of
GMS regional market. These aims are supported by a set of guiding principle
as each GMS countries recognize the international power trade as integral part
of energy policy, the importance of technical harmonization of transmission
standards to facilitate interconnection, as well as the desire of FDI and private
participation in the power sector. It is facilitated through the existence of four-
stage development. The first stage is started with the formation of bilateral
export projects to establish common minimum standards for bilateral
agreement and identify priority interconnection projects to support wider
power trade. Next, the links between the interconnectors constructed for
export projects will allow trade between any pair of GMS member countries
48
and limited to use of the surplus capacity of export project lines. During these
two stages, trade will be conducted by national utilities (single buyers). The
third stage is interconnectors will be developed and third parties are able to
trade over them, and the last stage will create the integrated competitive
regional power market. For the third and fourth, the implementation depends
on the restructuring national power markets (Economic Consulting Associates,
2010).
Under this circumstance, Thailand, since 1993 actually has involved
into a series of intergovernmental Memorandum of Understanding (MoU) for
importing the power from the other sub-region countries. With Lao PDR,
Thailand has its first MoU in 1993 for importing 1,500 MW by 2000. It
continued in 1996 with the total of 3,000 MW by 2006. The third one was on
2006 in which the agreement required Lao PDR to export the electricity for
5000 MW by 2015. In December 2007, the MoU increased the agreement to
purchase the electricity up to 7,000 MW by 2020 (Economic Consulting
Associates, 2010).
It is important to be recognized that, for years ago, GMS is one of the
ASEAN sub - region; a sub-set of ASEAN in which its goals are now within
the broader ASEAN integration effort. Initially, GMS was only an indirect
concern to ASEAN. However, the similarities between these two could have
been identified as they pursued cooperative development as well as foster a
good climate for investment and other economic activities. Thus, ASEAN-
Mekong Basin Development Cooperation was established officially in 1996
with the objectives to enhance the sustainable development of the Mekong
Basin, encourage a process of dialogue and common project identification
which can result in firm economic partnership for mutual benefit and
strengthen interconnections and economic linkages between ASEAN and
Mekong riparian countries (ASEAN, 1996). This cooperation became a mean
for ASEAN to have linkages with the GMS Economic Cooperation Program
(Dosch & Hensengerth, 2005). Concerning that the sub-regional plans reflect
the regional requirement; the ASEAN original six member countries spoke
49
increasingly to create ―one Southeast Asia‖ to integrate all ten countries in
Southeast Asia region into ―family of one‖ (John, 2006).
As the time goes by, since almost all the GMS countries—except the
People‘s Republic of China—constituted half of ASEAN member countries,
GMS became an almost entirely intra-ASEAN grouping. ASEAN and GMS
could take benefit from each other. Take an example of ASEAN Free Trade
Area (FTA). ASEAN frameworks provide something related to the policy
context that can contribute to the business activities to be more effective and
efficient. Since the presence of this FTA, tariffs and non-tariff barriers are
being taken apart. Indeed, trade process has become freer and easier. ASEAN
has been a one huge market with gross regional products. For instance, all
member countries of ASEAN that are also in GMS have the access to this
great potential market after launching negotiations. The investment also
becomes easier. The investor from any member countries of ASEAN could
freely put their investment in the GMS. Within the circumstances where
almost all the GMS countries became parties to binding ASEAN agreements,
GMS states are fully integrated in ASEAN‘s rule-based trading and
investment system. The participation of five member countries of GMS in
ASEAN could bring its positive impacts in integrated market into the GMS as
well (Severino, 2000).
As we might aware, ASEAN is now working on the preparation to face
the ASEAN Economic Community in the end of 2015. ASEAN has priorities
for deeper regional economic integration set forth in the blueprint that includes
the development of a single market and production base that is competitive,
equitable and integrated to the global economy. However, ASEAN realized
that there is development gap exists within the member countries between the
four newer member countries, namely Cambodia, Lao PDR, Myanmar and
Viet Nam (CLMV) with the rest of the members. This situation would be an
obstacle for ASEAN to ensure that the benefit of the economic integration is
equitably shared by all member countries. Thus, besides making the Initiative
for ASEAN Integration (IAI), ASEAN also put its effort to narrow the
50
development gap in designated growth areas within Southeast Asia, known as
an ASEAN sub - region (McGillivray & Carpenter, 2013).
As concern raised that the ASEAN member countries from GMS were
the less developed compared to the earlier member, the existence of GMS
under the ASEAN framework seems ideal to be a building block to enhance
the development and their integration to other ASEAN member countries.
ASEAN has the broader regional framework where the GMS could also work
on its own framework. Many ASEAN and GMS activities overlapped.
ASEAN in fact has used GMS as a framework to boost up the integration in
their newer member countries especially CLMV. ASEAN does believe that
ASEAN programs to narrow the development gap would be efficiently
implemented in the smaller scope and thus move forward quickly (Das, 2013).
As now GMS has become a part of ASEAN framework, they also have
their own goals and policies to be executed among its member countries that is
actually intersected with one another. These regional policies become the basis
for any cooperation pursued among member countries.
Economic Sector Policy
Based on the current goal that is pursued by ASEAN from 2009 to
2015, the economic aspect of ASEAN lies under the ASEAN Economic
Community Blueprint. It brings four big mandates; single market and
production base, highly competitive economic region, equitable economic
development and fully integrated into the global economy. The area of the
cooperation also touch many fields, including human resource
development, capacity building, recognition of professional qualifications;
closer consultation on macroeconomic and financial policies; trade
financing measures; enhanced infrastructure and communications
connectivity; development of electronic transactions through e-ASEAN;
integrating industries across the region to promote regional sourcing; and
enhancing private sector involvement for the building of the AEC
(ASEAN, 2014).
51
GMS with its Economic Cooperation Program seeks for
encouraging the trade and investment among member countries through
the easy cross-border movement of people and goods. GMS pursues a
three-pronged strategy which is also known as 3Cs:
Fostering greater Connectivity through the development of
sustainable infrastructure and transnational economic corridors
Enhancing Competitiveness through cross-border movement of
goods and people so that it could integrate to the global economy
Building sense of Community through recognizing and addressing
shared social and environmental concern.
GMS shares a view that regional economic cooperation, integration is a
great means for achieving more efficient use of regional resources.
Besides, it also will make the economy among member countries become
more complementary, competitive and could expand foreign trade itself
(Greater Mekong Subregion, 2014).
For the energy sector, ASEAN raised concern on emphasizing the
need to strengthen renewable energy development. This source of energy
will be the same as the non-renewable energy that can contribute to the
secure and reliable energy including bio-fuel to support and sustain the
economic and industrial activities. The optimization of the energy itself
will be done under the Trans-ASEAN Gas Pipeline (TAGP) and the
ASEAN Power Grid (APG) Projects for greater security. ASEAN also
gives wider chance to the involvement of private sector in financing the
energy development project as well as the technology transfer process.
ASEAN hopes that the region will be benefited from interconnected
networks of electricity grids and gas pipelines (ASEAN, 2009).
From the point of giving the opportunity to involve the private
sector under ASEAN policy, GMS also has the same view to support it in
improving the competitiveness of the region. GMS tries also to develop an
energy strategy to expand the collaboration among member countries to
meet rising energy needs and ensuring the robust energy market. This
52
strategy will help to prioritize the investment projects, including the
private sector financing to enhance trade and investment as well as prepare
the institutional and necessary arrangement for regional energy security
(Greater Mekong Subregion, 2014).
For secure and reliable supply of energy, GMS supports it as well
by strengthening infrastructure linkages through a multi-sectoral approach
and facilitating the cross-border trade and investment. Reliable energy
supply is an important thing to be maintained in an effort to stimulate the
cross-border economic development and trade. Thus, the member
countries in GMS agreed to jointly develop and share the sub-region‘s
energy resources that has purpose for establishing a commercial based
energy system that is reliable and competitive for electricity supply to the
entire sub-region while on the other hand minimize the social and
environmental cost. It will support the enhancement of power generation
from sub-regional source, rural electrification, and commercial energy
pricing and setting the measurement to mitigate social and environmental
cost. One of the flagship programs which is the regional power
interconnection and power trade agreement is keen to use hydropower
compared to coal and other resources that will lead to the greenhouse
gases effect, besides utilizing efficiently energy potential by reducing
individual investments in power reserves for peak demand, bringing down
operational cost, achieving more reliable power supply and reducing
system losses (Greater Mekong Subregion, 2014).
Social Sector Policy
The social and the environmental aspect actually are merged into
the same social-cultural community blueprint of ASEAN 2015. This
community reflects the commitment of ASEAN to also lift up the quality
of life of its peoples in their concern. The big goal of this vision can be
achieved through the implementation of concrete action that is people-
centered and socially responsible. ASEAN believes that the development
of one pillar should be followed by other pillars and the development of
53
one pillar can contribute much to the other pillar development
achievement (ASEAN, 2014).
Education is an important thing for ASEAN region this time.
Education priorities are integrated in ASEAN development agenda to
create a knowledge based society in the future. As also being a point in the
Millennium Development Goals in 2015, ASEAN also would like to
ensure the universal achievement of primary education in all member
countries. It also promotes early child care and development as well as
enhances ASEAN awareness to youth through education and activities to
build an ASEAN identity based on friendship and cooperation. Education
relates to the human resources and labor employment. ASEAN also would
like to enhance and improve the capacity of human resource and develop a
qualified, competent and well-prepared ASEAN labor force that can
benefit from and cope with challenges of regional integration. Ensure
access to adequate and affordable health care, medical services and
medicine, and promote healthy lifestyles also become another point in
ASEAN policies (ASEAN, 2009).
In GMS, the human resource development (HRD) strategy and
action plan also exists and continuously developed as a framework for
GMS cooperation under the areas of health, education, labor and
migration, and social plan for development management. This strategy is
important to fulfill the needs of critical mass of middle and senior level
managers in the public sector (Asian Development Bank, 2012).
Environment Sector Policy
Sustainable development is inevitable to be addressed by ASEAN.
Besides, clean and green environment can be achieved by protecting
natural resource including sustainable management and conservation of
soil, water, mineral, energy, biodiversity, forest, coastal, and marine
resources. ASEAN, as part of the larger international environment, will
also take active part in an effort to address the global environmental
54
challenges and adapt environment-friendly technology for the sake of
environmental sustainability (ASEAN, 2014).
For water resources, ASEAN will promote sustainability of water
resources to ensure equitable access and sufficient water quantity of
acceptable quality to meet the needs of the people of ASEAN by
continuing implementation of the ASEAN Strategic Plan of Action on
Water Resources. It also promotes the implementation of integrated river
basin management by 2015 as well as promoting public awareness and
partnership to enhance integrated water resources management (ASEAN,
2009). GMS also encourages the member countries to have cooperation in
managing shared natural resources. GMS has adopted the Core
Environment Program (CEP) with the focuses on ensuring the
environmental sustainability, institutionalizing the environmental
assessment practices and carrying out the Biodiversity Conservation
Corridors Initiative (BCI). (Greater Mekong Subregion, 2014).
55
CHAPTER IV
REGIONAL FACTORS INFLUENCING LAO PDR
FOREIGN POLICY
Foreign policy is made by actors. For instance, the domestic factors will
influence the decision-makers in determining a foreign policy. Nevertheless, there
are factors outside the domestic factors where the policy is implemented that can
influence a foreign policy as well. In the Xayaburi Dam case, the foreign policy of
Lao PDR will be influenced by the external environment under two regional
framework; MRC under the 1995 Mekong Agreement and ASEAN-GMS
Cooperation.
IV.1. MRC COOPERATION FRAMEWORK
The 1995 Mekong Agreement is the regional basic framework that gives
legitimacy to MRC as the intergovernmental body in Lower Mekong. In the
context of hydropower, as a part of the initiative on multi-sectoral water
development in the region, this mandate made MRC recognize the real importance
of hydropower today especially for its purpose in enhancing the economic
development of riparian states. Thus, the support is given through MRC five
principles of role. Aware of the regional condition that consists mostly of the
developing countries that still need to always learn and develop, the presence of
mechanism for private sector involvement in the five principles of roles become
crucial. The private sectors can help countries in the region for technological
know-how transfer and financing the project so that it can be executed as planned.
The environmental side of the hydropower indeed becomes priority as well
along with the support of the hydropower development. The concern on the
environmental sector has promulgated actually back to the 1995 Mekong
Agreement about Protection of the Environment and Ecological Balance in Article
3 that stated,
56
To protect the environment, natural resources, aquatic life and conditions,
and ecological balance of the Mekong River Basin from pollution or other
harmful effects resulting from any development plans and uses of water
and related resources in the Basin (Mekong River Commission, 1995).
MRC uses the IWRM in the implementation as a mean to promote the
sustainability through regional cooperation similar with what is used by ASEAN-
GMS Cooperation framework. However, by implementing PNPCA for any
development project, Mekong Agreement through MRC actually put the weight
more on the environmental sustainability rather than the development of the
resources itself. It is reflected even further if the environmental issue that might be
resulted will be a cross-border issue. We can see that from the content of the 1995
Mekong Agreement in the Article 5 about Reasonable and Equitable Utilization
where this PNPCA found its legitimacy.
To utilize the waters of the Mekong River system in a reasonable and
equitable manner in their respective territories, pursuant to all relevant
factors and circumstances, the Rules for Water Utilization and Inter- basin
Diversion provided for under Article 26 and the provisions of A and B
below:
A. On tributaries of the Mekong River, including Tonle Sap, intra-
basin uses and inter-basin diversions shall be subject to notification
to the Joint Committee.
B. On the mainstream of the Mekong River:
1. During the wet season:
a) Intra-basin use shall be subject to notification to the Joint
Committee.
b) Inter-basin diversion shall be subject to prior consultation,
which aims at arriving at an agreement by the Joint Committee.
2. During the dry season:
a) Intra-basin use shall be subject to prior consultation, which
aims at arriving at an agreement by the Joint Committee
(Mekong River Commission, 1995).
Under its mandate, Notification process requires the pursuant country to timely
provide information to JC on any proposed use of water. Meanwhile, the Prior
Consultation goes further than Notification process. It requires an additional data
that would allow the rest riparian countries to discuss and evaluate the impact
upon their uses of water that is the basis for arriving at agreement in the end of the
process. This is also not a mean to veto the use as well as the unilateral right to
use without taking into account other riparian‘s right. Through this article, we
57
might conclude that the pursuant countries need to always keep contact with other
riparian countries to ensure that its project will always be controlled and
concerned with the interest of other riparian countries so that no cross-border
harm will be resulted in the future.
The evidence that the environmental side is more prioritized does not stop
until that article. Article 7 about Prevention and Cessation of Harmful Effects
made the point clearer that even though the Mekong Agreement agreed upon the
joint development of the full potential of the Mekong River in all fields of
sustainable development and utilization, if there are any damage resulted from an
exploration, the cause of damaged should be ceased until it could be addressed
properly:
To make every effort to avoid, minimize and mitigate harmful effects that
might occur to the environment, especially the water quantity and quality,
the aquatic (eco-system) conditions, and ecological balance of the river
system, from the development and use of the Mekong River Basin water
resources or discharge of wastes and return flows. Where one or more
States is notified with proper and valid evidence that it is causing
substantial damage to one or more riparians from the use of and/or
discharge to water of the Mekong River, that State or States shall cease
immediately the alleged cause of harm until such cause of harm is
determined in accordance with Article 8 (Mekong River Commission,
1995).
This is actually what has happened with the Xayaburi Dam proposal. First,
since it will be built in the mainstream part of the river, it is important to register
this to go through the Prior Consultation process. Suitable with Article 7, because
the proposal in the PNPCA cannot fulfill the MRC standard and got some
negative comments from riparian countries that concern with the decrease of their
capacity on water usage because of the dam then the project needs to be stopped
for a while until the cause of harm is determined. However, based on the concept
of Prior Consultation, the riparian countries cannot veto Lao PDR to force them
not to do the construction so they only can suggest the postponement of the
construction. Further, Prior Consultation is also not a right to do the unilateral act
that is not suppose to be done by Lao PDR and ignoring the concern of riparian
countries.
58
Further, let us have a look at the five principles of role by MRC in
hydropower development that reflects in the sectoral programs it have. The roles
which are about information exchange, close cooperation with relevant
international institution, coordination and monitoring of basin-wide activities, as
well as studies and methodology development will help the developer enrich their
knowledge on how exactly a good and proper hydropower is and ensure that the
project will be developed in accordance with the best knowledge they get. The
other roles which are about the mechanism for public participation and private
sector will help developer to always concern on stakeholder‘s interest with their
new technological know-how that will prevent the project from causing harm in
the future. Through this principle of the role, MRC support is identified tend to
concern more on the process within the development of the hydropower project. It
is more to the technical part within the hydropower project. These kinds of
support give clear vision that Mekong Agreement and MRC as the executor sees
hydropower as hydropower; a development project of the river where it is
necessary to ensure that it is an environmental-friendly project with no harm to
other riparian states. If the environmental side has been ensured, the economic
development as the result will follow.
IV.2. ASEAN-GMS COOPERATION FRAMEWORK
ASEAN-GMS Cooperation is the regional framework that shades the
bilateral cooperation between Thailand and Lao PDR. It is the base for Lao PDR
initiatives to build Xayaburi Dam and export the electricity to Thailand through
EGAT. ASEAN-GMS Cooperation put concern on the renewable energy as an
emerging vital source of energy to be developed and managed where hydropower
is indeed included. Similar with MRC, ASEAN-GMS cooperation also agreed that
the balance of environment should also be managed while doing any
development, especially the activities that directly involve the environment such
as hydropower. Thus, IWRM is also chosen. The involvement of private sectors in
every project is also encouraged for technological know-how transfer and
financing the project so that the project can be finished as planned.
59
Under this framework, ASEAN-GMS Cooperation sees hydropower as a
medium that needs to be encouraged in its development as part of their mission to
generate renewable energy to finally get what they need, which is the energy. This
energy would be the focus point, so that the secure and reliable supply of energy
can be achieved to grab the regional economic development. That is why; this
framework did not put much attention on how to make or the process within the
hydropower development. They prepare and focus more on increasing the
hydropower potential development and how to make the energy resulted can
effectively support the policy for enhancing economic development. It helps
strengthening the infrastructure linkage, facilitating the cross-border movement
and developing the energy strategy so that the energy resulted from hydropower
can have its place in the market and find it easy to be distributed.
Since the focus of the framework does not mainly concern only with the
development process of the hydropower and the purpose of having hydropower is
to reach wider economical target, the development is constrained with some
certain period of time that if it is not fulfilled then the purpose also cannot be
achieved. Both frameworks agree that hydropower is one of the efforts in
alleviating poverty and pursuing economic development. However, the approach
and the focus of purpose by having the hydropower are different.
Last but not least, ASEAN-GMS has policies in its framework clearly
stated on the social sector policy in effort as the implication of economic
development. Better education is pursued for the people along with other efforts in
making the labor in the region ready for better employment. The better access to
public health also will be pursued to raise the living standard of the people.
Unfortunately, the Mekong Agreement does not have this effort in its framework.
However, Mekong Agreement will still ensure that the utilization of water
resources will not give harm to the social condition of the people. Below is the
matrix that helps to summarize the regional factors from both frameworks.
Through this matrix, we would easily understand their similarities and differences
and how these factors later on will influence the calculation of Lao PDR to decide
acting unilaterally towards the Xayaburi Dam case.
60
Regional Factors Influencing Lao PDR Foreign Policy
Factors
Framework
Economic Sector Policy Social Sector Policy Environment Sector Policy
1995 Mekong
Agreement by
MRC
Recognize the importance of hydropower as
important as other sectors to be developed for
economic development
Support its development in five principles of role:
- Information exchange
- Close cooperation with relevant international
institution
- Coordination and monitoring of basin-wide
activities
- Studies and methodology development
- Mechanism for public participation and private
sector involvement
— Implement PNPCA
Put attention to the environmental cost
assessed based on IWRM and implement
priority actions suggested
ASEAN-GMS
Cooperation
Emphasize the need to strengthen renewable energy
development
Obtain a secure and reliable supply of energy:
- Strengthening infrastructure linkage
- Facilitate cross-border movement
- Developing an energy strategy
Provide opportunity for private sector involvement:
- Financial support and transfer technology
Integrate education priorities into the
development agenda
Enhance and improve capacity of human
resources
Ensure access to adequate and affordable
health care
Promote sustainability of water resources
Promote regional cooperation on river
basin management
Promote public awareness and partnership
to enhance IWRM
61
Aside from the similarities and differences, if we look again, basically
these two frameworks can complement each other. ASEAN-GMS will assist
much on the economic and social sector and MRC has the more important part in
ensuring the environmental sustainability of each national project. It is seen that
Lao PDR under these circumstances actually could use maximally these both
assistances to pursue their middle and long term goals. Besides, it will also give
benefit for better multilateral relations under MRC, GMS or ASEAN framework.
It might be the reason as well, why at the time Lao PDR had the idea of
making Xayaburi Dam, Lao PDR was not hesitate to not only pursue contracts
with Thailand under GMS framework, but also fulfilling its obligation to register
the project and follow the PNPCA process in the MRC. Lao PDR had its
confidence to become the first country who explores the potential of hydropower
in the mainstream area of Lower Mekong. Lao PDR can have the chance for better
economic development through the construction process of the dam and the future
electricity energy that would be sold to neighboring countries, as well as get the
assistance for the environmental part from MRC. That is why; Lao PDR were
fulfilling both obligations; signing contracts with the Thai developers and having
a Power Purchase Agreement with EGAT as well as at the same time fulfilling the
commitment it made under the 1995 agreement through involving the project in
the PNPCA process.
However, in fact the things happened seems out of the prediction. This
kind of circumstances is putting Lao PDR into the dilemma that leads to the
condition that the obliged Lao PDR to make decisions based on the alternative
choices it has. Through the explanation above, finally we could understand how
different regional framework offered by ASEAN-GMS and MRC can become the
factors that differently influences the choices for Lao PDR in pursuing the
development of Xayaburi Dam by shaping the different response towards the
Xayaburi Dam proposal that finally pushed Lao PDR to choose between one of
them.
62
IV.3. LAO PDR ESTIMATED GOALS ACHIEVEMENT: A
CALCULATION OF COSTS AND BENEFITS
CALCULATION
CHOICES
BENEFITS COSTS
CONTINUING
COOPERATION WITH
THAILAND
Fulfill bilateral MoU and
reach target export to
Thailand
Grab the big potential
market and revenue from
Thailand as planned
Help support the
achievement of goals:
- LDC graduation by
2020
- Hydropower ―Battery
of Southeast Asia‖ by
2020
- MDG by 2015
- ASEAN Community by
2015
Noncompliance to Mekong
agreement and MRC process
Environmental degradation
and negative trans-boundary
impact
Protest from civil society
groups and NGOs
Unpredictable further reaction
from Cambodia and Viet
Nam
FULLY COMPLY
WITH MRC DECISION
Assistance on technical
knowledge
Assistance on EIA based
on IWRM
Play a crucial role in
strengthening MRC
capacity
Become a role model for
mainstream development
based on IWRM
Postponement of Xayaburi
dam development
Unable to fulfill MoU with
Thailand
Loss potential planned
revenue and market
Cannot fully achieve the
goals: LDCs, hydropower
―Battery of Southeast Asia‖,
MDGs, and ASEAN
Community
Costs and Benefits Calculation of Lao PDR Alternative Choices
63
After realizing the circumstances that Lao PDR has in pursuing the
Xayaburi Dam, for instance, GoL could not continue to pursue the goals under
both cooperations. One should be sacrificed to achieve the goals through
continuing another choice. In making the decision towards this choice, Lao PDR
should compare both choices and then calculate the benefits and costs of the two
options; fully comply with MRC procedure or continue the project construction.
The matrix above helps us to give a brief picture of what benefits that can be
gained and what costs should be paid from both choices. It will also help to
understand how the policies will influence each choice on their cost and benefit
calculation.
A. Costs and Benefits of Continuing the Cooperation with Thailand
Benefits
- Fulfill bilateral MoU and reach target export to Thailand
EGAT is a state-owned company of Thailand that becomes the
single buyer of imported electricity and the only actor in national
electricity distribution. For instance, any purchasing activity by EGAT
is Thailand‘s purchasing activity as well. Put it differently, Thailand‘s
MoU to buy electricity from any countries would be executed by
EGAT. It automatically means that Xayaburi Dam is one of the
hydropower projects that are pursued to fulfill the bilateral MoU
between Lao PDR and Thailand under the GMS Economic
Cooperation framework. Through this MoU, it has been agreed that
Lao PDR has to export the electricity from hydropower to Thailand for
about 7000 MW by 2020. If Lao PDR decides not to follow the MRC
decision to halt the dam construction, it will be finished as scheduled
by 2020. Together with other dams constructed to export the electricity
to Thailand, Xayaburi Dam will contribute a certain amount of energy
that can help Lao PDR fulfilling the obligation in exporting the
electricity.
64
- Grab a big potential market and revenue from Thailand
Thailand is mainland largest energy consumer in Southeast
Asia region. The high demand of electricity energy, the policies to
diversify the energy and domestic condition that unable Thailand to
further explore their own national potential hydropower indeed
transformed Thailand as a big potential market to be grabbed by Lao
PDR. This is the strong reason for Lao PDR to put its best efforts on
fulfilling the MoU and keep the project being executed and finished as
scheduled. If Lao PDR can fulfill the MoU, Lao PDR can be the key
player in the Thailand energy market for the hydropower-based
electricity energy. Lao PDR fill the market with its hydropower
electricity energy outcomes. Further, the revenue from this export
activity will surely give Lao PDR power to strengthen its national
economic development to meet the planned goals.
- Help support the achievement of goals
» Graduation from Least Developed Countries by 2020
Overall, we see that the big goal of Lao PDR is to graduate
itself from the Least Developed Countries category by 2020. In
determining the countries that are classified as Least Developed
Countries, United Nations Committee for Development Policy uses
three indicators to classify countries into the LDCs categories; Gross
National Income (GNI) per capita, Human Assets Index (HAI) and the
Economic Vulnerability Index (EVI). To graduate from the category, a
country must reach the threshold levels of these indicators over two
successive triennials—three years—CDP reviews, or GNI per capita
must exceed at least twice of current threshold level with the high
likelihood that the score can be sustained (ASEAN, 2013).
65
Year
Indicators
2006 2009 2012
GNI per capita $900 $1086 $1190
HAI 64 66 66
EVI 38 38 32
Table 4. Graduation Threshold LDC
Source: ASEAN 2013
As for Lao PDR, the GNI per capita achievement in 2012 has
moved closer to the defined threshold with quite significant
improvement from the previous triennial reviews in 2009. Lao PDR
has moved further away from the HAI threshold since 2009. For EVI,
Lao PDR has moved significantly closer to the threshold line in 2012.
It means that Lao PDR has been successful in their effort to reduce her
economic vulnerability within three years from 2009. To be clearer, let
us see the graph below showing Lao PDR achievement of the LDCs
triennial defined threshold.
Figure 5. GNI per capita, 2006 to 2012
Sources: ASEAN 2013
0
200
400
600
800
1000
1200
2006 2009 2012
Cambodia Lao PDR
Myanmar Vietnam
Graduation threshold
66
Figure 6. HAI per capita, 2006 to 2012
Sources: ASEAN 2013
Figure 7. EVI per capita, 2006 to 2012
Sources: ASEAN 2013
Beside the changes of achievement of the countries towards the
threshold, from the table, we can see that within two triennial periods,
which are from 2006 to 2009 and from 2009 to 2012, there are also
20
30
40
50
60
70
80
90
2006 2009 2012
Cambodia Lao PDR
Myanmar Vietnam
Graduation threshold
0
10
20
30
40
50
60
70
2006 2009 2012
Cambodia Lao PDR
Myanmar Vietnam
Graduation threshold
67
changes in the defined threshold, especially for GNI per capita that
keep rising. Meanwhile, for HAI and EVI, the score for graduation
were quite stable, meaning that there were no significant changes in
numbers. Therefore, by 2015 review, the graduation threshold for GNI
per capita would be $1,242; for HAI, in 2014 the committee decided to
fix permanently the threshold at their 2012 level and it does too for the
EVI graduation threshold (UN DESA, 2014).
In general, Lao PDR has prepared the policies for this long-
term goal in any field that is emphasized to improve the national
performance suitable with every criteria. For the first criteria, high
level of foreign direct investment, particularly in the natural resource
sector as well as government policies in diversifying the economy
beyond extractive natural–resource based industries is believed to be a
great way to achieve the graduation threshold. For the second criteria,
the increasing budget allocated for the education and health sector is
the key to successfully pass the threshold. The special efforts will be
put into the areas of nutrition, child mortality, secondary school
enrollment, and adult literacy. Then, for the third criteria, the GoL put
their faith on the plan to continue the effort on Greater Mekong Sub-
region Cooperation scheme to make Lao PDR a ―land-linked‖ country
with the implication to production and trade pattern. Further effort also
required to reduce impact of external trade shock by improving
agriculture and food security and accelerating rural development, as
well as improving environmental management, to address the effects
of climate change, and to strengthen resilience through improved
Disaster Risk Reduction/ Disaster Risk Management (UNDP, 2012).
Xayaburi Dam construction‘s main purpose might be to fulfill
the MoU with Thailand that is set under the ASEAN-GMS Economic
Cooperation. However, the construction process of this dam can also
contribute to the graduation from the LDC category effort. First,
Xayaburi dam will be built in the northern part of Lao PDR. The
68
northern part of Lao PDR is actually the region that has difficult
geography because of the many hills and sub-mountain terrain
(Government of Lao PDR, 2011). Basic infrastructure is a crucial issue
in this region. Xayaburi dam is the hydropower project in mainstream
Lower Mekong. Indeed, the size of project construction in mainstream
part will be bigger than in the tributaries. Thus, it also needs stronger
and more sufficient infrastructures to support this large project, for
example new roads.
For instance, with some new roads, it will give better access
for people to come and go inside and outside the region to do their
activities. Since the access to reach the region is easier, it will trigger
the chance of other basic infrastructure to be easily built by the
government that is necessary for people, such as public health and
education facilities. Better access will open chance as the first step of
equitable development, because it will ease the economic transaction
so that the economic cycle can be run better. It was also expressed by
the Chairman of Thailand‘s Ch. Karnchang Public Company, the
developer of Xayaburi Dam, Mr. Aswin Kongsiri, ―Road development
will continue, as this will benefit Laos, which remains in need of
public transport routes,‖ Mr Aswin said (Bangkok Post, 2012). This is
in line with the effort of government on the rural development for
graduating the third criteria and in the long-term would also contribute
to the graduation of second criteria in social sector when the public
transport route can help the achievement of better social condition.
Second, Xayaburi dam is financed by four Thai Banks, namely
Kasikorn Bank, Bangkok Bank, Siam Commercial Bank, and Krung
Thai Bank (Middleton, 2012). These banks are playing an important
role by putting their investment towards the project. It means that there
will be foreign direct investment that flows into the northern part of
Lao PDR through this project, especially in the natural resources sub-
sector for energy generation. Further, if the financial part of the project
69
runs well, it will positively impact towards the certainty and continuity
of the project. This project might also give a chance for wider labor
employment to the Lao people in the construction process. If the
people have jobs, then it is good for them to improve their living
standard to get better services in health and education. It is suitable as
well to support the effort for the graduation of first criteria and in the
long-term will also support the second criteria graduation.
Third, even though the real benefit of electricity result can be
felt after 2020, the same year as the target of graduating from this
category, it is still can help Lao PDR to maintain the economic
performance. If by 2020 Lao PDR is successful to graduate itself from
LDC category, the export revenue will help maintain the performance
so that Lao PDR will not have a chance anymore to again being
classified into the category. Even though 95 percent of the electricity
generated from the dam will be exported, there is still 5 percent left.
This amount will be allocated to fulfill the domestic needs of the
electricity energy. This is suitable for supporting the policies of the
government to graduate from the first criteria and the third criteria.
With better access to electricity, the region will have sufficient power
for doing the daily activities, and in the larger context, it will
contribute to the effort on modernization and industrialization.
» Becoming the Hydropower “Battery of Southeast Asia” by 2020
Besides having the graduation from LDC category by 2020 as a
long-term goal, Lao PDR also set targets to be the hydropower
―Battery of Southeast Asia‖ in the same targeting year. This goal was
firstly announced in October 2007. It is an effort to export the
electricity from hydropower technology and become a supplier of this
electricity. According to the record by the International River, at least
there are six under construction and 15 planned large dam
70
developments for electricity export purposes. Let us see the map below
(Korkeakoski, 2009).
Figure 8. Existing, under construction and planned (large) hydropower
projects in the Lower Mekong Basin Source: MRC, 2009
As we could see in the picture, Xayaburi Dam is one of the
planned mainstream Mekong hydropower projects that are designed
for the purpose of electricity export. Since this project located in
mainstream part, for instance, the capacity of the electricity produced
is bigger than the others in tributaries. The capacity for the electricity
from Xayaburi Dam will be around 1,260 MW; in which 95 percent or
for around 1,220 MW of it will be exported to Thailand. The time
estimated for finishing the project is eight years. It means that the time
Xayaburi Dam could produce the electricity is similar to the due date
of this goal. By targeting Thailand as the export country which is the
71
mainland largest energy consumer in Southeast Asia, Lao PDR will
make remarkable movement to start the goal. If Lao PDR could fulfill
the demand of the largest energy consumer in mainland, it means that
it is not impossible for Lao PDR to export to other countries. Lao PDR
could increase their credibility as well as the hydropower-based
electricity energy exporter.
» Achievement of Millennium Development Goals
Millennium Development Goals is a goal set by the United
Nations forming a blueprint that is agreed by all the countries in the
world as well as world‘s leading development institutions. Through the
eight goals, these blueprints allocate unprecedented efforts to meet the
needs of the world‘s poorest (UN, 2014). The goals are:
1. Eradicate extreme poverty and hunger
2. Achieve universal primary education
3. Promote gender equality and empower women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDS, malaria and other diseases
7. Ensure environmental sustainability
8. Global partnership for development
Through the seventh NSEDP, Lao PDR actually has prepared 9
goals, 20 targets and 63 indicators, and 218 interventions that will be
executed under the mission of achieving MDG in 2015. It wrote in
their NSEDP,
According to the principles and goals of the Party and the
government on the achievement of the targets of poverty
reduction by 2010, the achievement of the Millennium
Development Goals (MDGs) by 2015 and graduation from
Least Developed Country status by 2020, poverty reduction has
become the primary objective and a priority of the government
(Government of Lao PDR, 2011).
72
Based on this point, poverty reduction is the primary objectives
and any efforts that are in line with the poverty reduction achievement
more or less can be really helpful. Besides, poverty reduction is the
key as well for the goal of graduation from LDC. It means, actually the
calculation of benefits that can be earned predicted for supporting the
LDC graduation through Xayaburi Dam construction can also give
benefits to the measurement of MDG achievement. Since the due date
for the MDG achievement would be ended by 2015, the contribution of
Xayaburi Dam will not be at the time when it is finished; but the
process will.
» Achievement of ASEAN Community by 2015
Similar with the achievement of MDG, since the preparatory
work for achieving ASEAN Community will be finished by 2015, the
real benefit of the electricity result cannot be felt in the beginning of
the ASEAN Community. However, any construction of a project that
relates to the sector that can be integrated into this ASEAN framework
will be useful in strengthening the position of the country within the
ASEAN Community after 2015. By this point, the Xayaburi Dam
electricity result that is predicted by 2020 will have the role to
strengthen the position of Lao PDR in the ASEAN Community, as the
regional goal of GMS that is now merged with ASEAN framework
also is to have reliable energy supply by having the potential supplier
supported by the sufficient infrastructure. Besides, the power market
strategy also set that Lao PDR would be a key player in region to
export the hydropower electricity to especially Thailand. The ability
of Lao PDR to fulfill the contract as well as the reliable lines that is
used will help ensure the achievements of regional reliable energy
supply in the region. As per 2015, the benefit of Xayaburi Dam that
can be felt is only in certain sector similar with the benefits that can be
earned in effort of graduate from LDC.
73
Costs
- Noncompliance to Mekong Agreement and MRC process
These benefits have to pay for some certain costs. As agreed by
the signatory members of the 1995 Mekong Agreement that are also
founding father of MRC, Prior Consultation is a process in which
looking for the consensus-based agreement whether a project can be
continued or not. In addition, before all member countries agreed there
will be no development started. If Lao PDR insists to continue the dam
construction, it is obvious that Lao PDR will fail to comply with its
commitment in Mekong Agreement and disrespect the result of the
PNPCA process. More or less, it will not only give negative impact to
Lao PDR, but also to the credibility of MRC as the intergovernmental
organization that is responsible for any development of the river. When
Lao PDR could act unilaterally, it means that MRC could not manage
its own member countries to follow the common agreement.
As what is expressed by Jake Brunner, International Union for
Conservation of Nature‘s program coordinator for Viet Nam,
Cambodia and Myanmar. He argued that the future of dam
development in mainstream area of Mekong River will be determined
by MRC.
―It‘s hard to justify further large-scale international support to
the MRC in its current form. There‘s no reason [it] will have
more success with the next mainstream dam,‖ he said. ―The
agreement needs to be strengthened to ensure that one country
cannot ignore the justified concerns of the other countries of
major irreversible trans-boundary impacts. And that‘s a
political challenge, not a technical one.‖ (Worrell, 2013)
- Environmental degradation and negative trans-boundary impact
If the assessment of the NGOs and other parties that insist to
halt this dam is true, the possibility of environmental degradation will
be inevitable. The construction will leave incomplete assessment of its
74
risks. It means that the project fails to address the overall aspect that
will potentially be harmed by the dam. It reduces the capacity of Lao
PDR to prepare the alternative to counter the potential effect of the
construction.
According to the data of International Water, the dam would
put at risk the richest species diversity of the Mekong. At least 41 fish
species would extinct, 23 migratory fish species would lose their
migration route to Luang Prabang in Lao, Chiang Khong and Chiang
Saen in Thailand, and the possibility of extinction of the iconic
Mekong Giant Catfish. This dam also needs to resettle over 2,100
people in ten villages. It will also indirectly affect the lives of at least
202,198 farmers and fishers located in four districts in Laos
(International River, 2011).
- Unpredictable further reaction from Cambodia and Viet Nam
The MRC process left the proposal to halt the dam. Based on
the procedure in MRC, if there is no decision coming from the
consensus, the conversation over the disputable projects will be solved
by the member countries themselves. They will try to solve the
problem through diplomatic channel. It also can be referred to the third
party as a mediator. Cambodia and Viet Nam are the potentially
harmed countries because of their position in the downstream Mekong
River. They are keen to force Lao PDR to halt the dam for at least 10
years of further studies on the impacts towards their territory and
prosperity. It will open chance of unpredictable reaction appeared from
those countries to Lao PDR. Cambodia and Viet Nam could decide
something as penalty to Lao PDR since it did not take into account the
enquiry from them.
At the 2012 Asia Pacific Economic Cooperation summit in
Russia, Vietnamese President Truong Tan Sang warned that
―tensions over water resources are threatening economic
growth in many countries and presenting a source of conflict,
75
especially given the efforts of all countries to step up economic
development (Le, Nhina, 2013).‖
From this statement, at least for Viet Nam, the dispute over water
resources is a serious source of conflict between riparian countries.
The tension that is produced will become a threat to economic growth
as well.
- Protest from civil society groups and NGOs
The protest towards these projects was in fact has been
appearing at the same time of the MRC PNPCA process. Many NGOs,
especially that concerns on the environmental sustainability has
released many assessments insisting that the project is not good for the
environment and threaten the livelihood of the people that depends on
the river. In fact, as much as 263 non-governmental organizations from
51 countries have submitted a letter in advance of the Mekong River
Commission‘s (MRC) 33rd Joint Committee Meeting, scheduled for
25-26 March in Sihanoukville, Cambodia that urged the Prime
Minister of Lao PDR and Thailand to immediately cancel the Xayaburi
Dam (International River, 2011).
Not only NGOs, civil society groups also taking sides similar
to the NGO regarding this issue. The Thai citizen has ever registered
their protest to the court to stop the dam construction in Lao PDR
because they thought that it would give bad impact to Thailand and the
benefit will only be monopolized by the respective government and
business elite. It happened in August 2012 when the riparian
communities of the north and northeast of Thailand submitted the case
to the Thailand Administrative Court suiting EGAT, Thai Cabinet and
three other state entities because of its failure to follow the Thai
Constitution before approving PPA for the project. The concern is on
the potential project impacts on Thailand since it lacks of trans-border
EIA and an incomplete public consultation in Thailand (Middleton,
76
2012). These kinds of protest are needed to be tackled and handled by
Lao PDR. If the public opposition was this loud, even when the dam is
still in the proposal, the response from them will unpredictably
increase if the dam finally being built and further will truly result in
environmental degradation.
B. Costs and Benefits of Fully Complying with MRC
Benefit
- Assistance on technical knowledge
Xayaburi Dam is the first project in the mainstream Mekong
that finally was proposed to be halted by the Mekong River
Commission as an intergovernmental body responsible for the Lower
Mekong development and protection. The reason of halting the
construction was clearly explained before that it is more about the
failure to comply with MRC standard. If it is found improper, it means
that there are processes in the dam itself that could harm the
environment. Thus, MRC has the program named ISH that aims to
construct and maintain knowledge platforms and networks to exchange
information, share experience and collaborate on tools and practices in
all stages of planning. As ISH is the agency that develops the MRC
standard in Preliminary Design Guidance for Proposed LMB
Hydropower Schemes, indeed it can help assisting the mean of Lao
PDR in constructing Xayaburi Dam so that this dam can fully fulfill
the MRC standard (Mekong River Commission, 2014).
- Assistance on EIA based on IWRM
The major concern of the other member countries such as
Cambodia and Viet Nam is about the trans-boundary impact of the
dam that may cause harm to them as the ones who are at the bottom of
the downstream. The more well-studied and proper assessment of the
environmental and trans-boundary aspect that could be provided by
77
Lao PDR and the project developer will answer the curiosity of them.
Lao PDR actually has provided the assessment, but since the
assessment was not as complete and comprehensive as the commission
and member countries desired, Lao PDR could ask help from MRC to
give them more explanation on what sector the concern should be
addressed more and ask the commission to help assisting the
assessment document to meet the requirements. Still under the ISH
mandate, this agency also supports the development of strategic trans-
boundary assessment through the technical advice on potential regional
impacts of mainstream, hydropower scheme. Beside, the result of the
national consultation meeting will enlighten the effort on what part of
trans-boundary impact that become concern of every riparian state so
that the result of the assistance will be more accurate (Mekong River
Commission, 2014).
- Play a crucial role in strengthening MRC capacity
Since Xayaburi Dam is the first project in the mainstream part,
for instance, it would be the first trigger towards the implementation of
the Prior Consultation process under MRC. It means that all
stakeholders of the river would put their eyes on the process as well as
how MRC could deal with the member countries. MRC has done its
process based on the PNPCA guidelines. However, in fact, the process
ended at no consensus-based decision to let the project move on. This
circumstance actually could be seen as a challenge for MRC capacity,
whether the commission could well-facilitate the process or not and
whether MRC can make the member countries comply with the
agreement or not. Since MRC also consist of the representation of
every member countries, including Lao PDR, the compliance and the
availability of Lao PDR to respect the decision and follow the dispute
settlement process are crucial for MRC. If Lao PDR can do this, it
means that the MRC will be seen as a successful commission that
78
oversees the first mainstream project of the Lower Mekong by having
the power to take care and enforce the obligations towards the member
countries. The credibility and effectiveness of MRC would increase to
manage any integrated project under its supervision with Lao PDR also
play a crucial role in it.
- Become a role model for mainstream development based on IWRM
Lao PDR would be the first developer and explorer of the
mainstream part of the river. Indeed, this movement would be the pilot
of any future project in the mainstream part of Lower Mekong. Thus,
any problems, challenges, appreciation or the penalty received by Lao
PDR would be a reflection to any member countries who would like to
pursue the same project. If Lao PDR decided to fully comply with the
MRC decision to halt the project, and further Lao PDR also could fix
and improve the flaws inside either the physical development or the
assessment, Lao PDR could be the role model for a proper
environmental-friendly project in Lower Mekong. Lao PDR could also
become the leading country in developing mainstream hydropower
since through his process Lao PDR could step by step increase its
capacity and technical know-how.
Costs
- Postponement of Xayaburi Dam development
MRC has proposed the halt of the project for 10 years starting
from the time this decision was taken by the Prior Consultation process
based on the suggestion from MRC Strategic Environmental
Assessment (MRC SEA). This is also supported by the other two
member countries directly in their Report of the National Consultation
Meetings on ―Prior Consultation for the Proposed Xayaburi Dam
Project‖. It means that the project cannot be as soon as possible started
and the predicted time of its development would be started around
79
2021. If the project was planned to be finished within 8 years, thus the
advantage of the project can be felt around 2029. Indeed, this
postponement for instance, will affect the MoU with the developer.
Lao PDR should allocate more time and effort to renegotiate with the
developer for this quite long term delay.
- Unable to fulfill MoU with Thailand
The other cost that needs to be handled by Lao PDR for this
halt would be the disability to fulfill the larger MoU with Thailand to
export up to 7000 MW that has been agreed since December 2007. If
the previous one we talk about the contract between the government
and the developer, at this point the level move higher to the bilateral
agreement between Lao PDR and Thailand under the framework of the
GMS Economic Cooperation Program. If Lao PDR halts the dam
construction for 10 years, it means that the promise to export on such
amount is postponed as well. This circumstance would affect the
relations between two countries. The possibility of the effect would be
on the level of trust, compensation and customization of the agreement
itself. Thailand could decrease his level of trust towards Lao PDR as a
supplier of electricity to their country. The other possibility is about
the compensation that might be asked by Thailand because of this
postponement that indeed will add the burden of Lao PDR. This
burden also could be resulted from the customization of the contract
that might suffer Lao PDR.
- Loss potential planned revenue and market
The decrease of the level of trust from Thailand could have
broader impact towards the potential revenue and market share that can
be earned by Lao PDR. As Thailand is the mainland largest energy
consumer country that now in effort to diversify into the hydropower
energy, Thailand has a promising big market for hydropower-based
80
electricity energy for Lao PDR export target. The revenue that can be
earned by Lao PDR will surely big. Lao PDR has potential to be a
reliable supplier to this big market; monopolize the hydropower
electricity demand from Thailand import sector. If Lao PDR comply
with the MRC decision, then Lao PDR has to surrender this potential.
- The possibility of not fully achieve the target for LDCs, MDGs,
ASEAN Community and hydropower ―Battery of Southeast Asia‖
Either LDCs, MDGs, ASEAN Community or hydropower
―Battery of Southeast Asia‖ are the medium and long-term goals for
Lao PDR that will be pursued within 5 and 10 years ahead. As the
calculation of profit earned by Lao PDR for the halt is around 2021, it
means that the profit of Xayaburi Dam could only be felt after the due
date of these all goals. Indeed, the Xayaburi Dam that is calculated
could help achieve these broad goals will be meaningless. The
achievement of Lao PDR for each sector that is influenced by the
presence of this dam also cannot be possibly achieved properly.
As we see from where the case is going on, Lao PDR finally chose to act
unilaterally by continuing the dam construction even though MRC has proposed
the halt of the project and other countries such as Cambodia and Viet Nam have
addressed their protest and areas of concern. Lao PDR has recently been pursuing
many strategic goals in its long-term. These goals are in fact requires many
achievements on economic aspect that could lift up the social sector as well in
certain period of time. However, it is also remembered that these developments
will have to consider the environmental impact. If we see the calculation above,
under the influence of ASEAN-GMS Cooperation, the choice to pursue the
construction as planned with Thailand provides more benefits that are suitable and
facilitating the goals of Lao PDR. Even though MRC did not make the strict
decision to directly prohibit the construction of Xayaburi Dam and only request to
halt, it means that there are some losses that Lao PDR should surrender. The
81
environmental aspect will become the main constraints of Lao PDR in pursuing
the construction.
In addition, if we try to take a look from the perspective of Lao PDR, there
is nothing wrong to continue the dam as planned. First, Lao PDR felt that it has
had the evidence that its dam construction proposal has fulfilled the standard and
considered the trans-boundary impact through a report released by its trusted
agency, Poyry. Second, Lao PDR has fulfilled its obligation to follow PNPCA. It
has submitted all the required documents, provide other additional information,
and follow the six month-long of PNPCA process. It also has suited its policies in
the environmental aspect to synchronize the MRC activities of their national
government. The government has prepared themselves for preparing the PNPCA
process. As if the thing now is only different perception between Lao PDR and
MRC regarding how and when to end PNPCA process, Lao PDR has the report
from Poyry that will become its justification that all concern has been addressed
and it is its right to pursue the dam construction as planned.
Based on explanation above it is obvious then how the regional factors can
influence Lao PDR in foreign policy making. In this case, the regional factors will
indeed influence the alternative choices that will later can be seen playing bigger
role of influence when the cost and benefit calculation is conducted. In each
choice of alternative, there must be costs that need to be paid by the actor if they
prefer to choose another choice they have. In this case, the costs that need to be
handled by Lao PDR because of its non-compliance are not strong enough to
become the reason for Lao PDR to let go the benefit of cooperation with Thailand.
82
CHAPTER V
CONCLUSION
The strategic and potential position of Lao PDR on the Mekong River
encouraged it to continue the hydropower project from the small to large scale,
from tributaries to mainstream part. Xayaburi Dam is the first project to be
developed in mainstream Mekong that has broad aim to fulfill the poverty
reduction policy and modernization programs mission. The project that will be
built in the Northern part of the country and produce 1,260MW electricity is built
under the MoU with Thailand‘s Ch. Karnchang Public Company as the developer
in which 95% of its result will be exported to Thailand through EGAT.
Based on 1995 Mekong Agreement which is the joint development and
management agreement among riparian countries in Lower Mekong, Xayaburi
Dam must go through PNPCA. Unfortunately, when the proposal is registered to
PNPCA, the JC meeting could not come into a consensus-based agreement to let
the project being executed. The insufficient qualification towards MRC standards
and lack of studies for trans-boundary impact of the dam become the reasons to
halt the dam until further studies is done. Even though according to the procedure
GoL cannot continue the construction, in fact it has acted unilaterally to continue
the project signed by the full construction remarks that has been done in 2012.
In response to the enquiry raised by MRC and the continuation of the dam
construction, Lao PDR has two options: following the decision from the Prior
Consultation to halt the construction or continuing the construction in which
actually is also part of Lao PDR—Thailand MoU of energy export by 2020 under
ASEAN-GMS Cooperation framework. In determining foreign policy, there are
regional factors from two different frameworks; ASEAN-GMS Cooperation and
1995 Mekong Agreement through MRC that influence Lao PDR. The economic,
social and environmental sector policy from both frameworks are considered as
83
the most influential sector that influences the decision of unilateral act against
Xayaburi Dam proposal.
A project is assumed as one of means to achieve the big goals pursued by
a state. Lao PDR has main goals to be graduated from LDCs category by 2020.
That is why; all national policies are referring to all means that could boost up the
country performance. Besides that, in the way to achieve the main goals, GoL also
would like to achieve other medium-term goals such as MDG by 2015, ASEAN
Community 2015 and becoming Battery of Southeast Asia by 2020.
From both frameworks, we could find the similarities and differences.
ASEAN-GMS Cooperation and MRC recognized hydropower as an important
mean that need to be supported for pursuing economic development. They also
agree that the balance of environment should also be managed while doing any
development, especially the activities that directly involve the environment such
as hydropower. Thus, they both use the IWRM as a mean to promote the
sustainability through regional cooperation. The involvement of private sector is
also important for technological know-how transfer and helping countries in
financing the project. However, Mekong Agreement put the weight more on the
environmental sustainability rather than the development of the resources itself.
MRC support is more to the process within the development of the project. On the
other hand, ASEAN-GMS has policies that emphasize more on the purpose after
the project finished as well as the means to achieve the purpose. The approach and
the scope of purpose by having the hydropower are different.
The choice should come to the alternatives in which the national goals can
be fully maximized. On one side, if Lao PDR continue the project as planned, it
could fulfill the MoU and target export to Thailand, occupy their market and gain
revenue, contribute to the regional reliable energy supply and the important one
from the process to the point where the result can be felt could help boosting up
the performance to achieve the long-term and medium-term goals. However, Lao
PDR will not be able to comply with its commitment in MRC under the 1995
Mekong Agreement. It also needs to think how to alter the wide protest from
84
stakeholders potentially affected and the unpredictable environmental degradation
and trans-boundary impact.
On the other hand, if Lao PDR chooses to comply with MRC decision,
Lao PDR would be a great role model for trans-boundary water management
especially in Lower Mekong. It will also take a crucial role in strengthening the
capacity of MRC as the intergovernmental body. Many assistances on technical
and procedural on how to make a sustainable hydropower will be given as well.
But again, the costs are also not small. The development of the dam will be
postponed and out of prediction. It means that it will affect the MoU as a whole
and Lao PDR will loss market and revenue to boost up their economic
performances. In broader sense, it is quite possible that Lao PDR could not be
able to fully achieve the goals as they targeted from the beginning.
From these calculations, it seems like the benefits from continuing the dam
and ignore the MRC process result will fully maximize the possibilities of Lao
PDR to achieve its goals. Indeed, there is a cost for it but it is not strong enough to
make Lao PDR surrender this option and choose the other one. Besides, different
perspectives between Lao PDR and the rest of riparian countries can be identified
as other excuse for Lao PDR to act unilaterally since it has its own justification.
Lao PDR thought that it is the right thing to do to continue the dam.
85
REFERENCES
BOOKS AND JOURNALS
Belay, A. A. (2010). The Challenges of Integrated Management of Mekong River
Basin in Terms of People's Livelihood. Journal Water Resource and
Protection , 62.
Das, S. B. (2013). The ASEAN Economic Community A Work in Progress .
Singapore: ISEAS Publishing.
Der Derian, J. (2001). Virtuous War: Mapping the Military-Industrial-Media-
Entertainment Network. Journal of Political and Military Sociology 29 (1)
, 46-72.
Donnelly, J. (2000). Realism and International Relations. Cambridge: Cambridge
University Press.
Dougherty, J. E., & Pfaltzgraff, J. R. (2001). Contending Theories of International
Relations: A Comprehensive Survey Fifth Edition. United States: Priscilla
McGeehon.
Grumbine, R. E., Dore, J., & Xu, J. (2012). Mekong Hydropower: Drivers of
Change and Governance Challenges. Front Ecol Environ .
Harris, P. G. (2005). Confronting Environmental Change in East and Southeast
Asia: Eco-politics, Foreign Policy, and Sustainable Development. London:
United Nations University Press.
Haryono, E., & Razak, M. A. (2014). Analysing Foreign Policy. In M. A. Sani, &
K. T. Zengeni, International Relations. Malaysia: Pearson Malaysia Sdn
Bhd.
Hoepf, M. C. (1997). Choosing Qualitative Research: A Primer for Technology
Education Researchers. Journal of Technology Education Vol. 9 No.1 , 48-
51.
John, R. B. (2006). Revolution, Reform and Regionalism in Southeast Asia:
Cambodia, Laos and Vietnam. Oxon: Routledge.
Kaarbo, J. (1998). Power Politics in Foreign Policy: The Influence of Bureaucratic
Minorities. European Journal of International Relations 4 (1) , 67-97.
86
MacQuarrie, P. R., Viriyasakultorn, V., & Wolf, A. T. (2008). Promoting
Cooperation in the Mekong Region through Water Conflict Management,
Regional Collaboration and Capacity Building. GMSARN International
Journal 2, 175-184 , 1.
Marsheimer, J. J. (2001). Realism, The Real World and The Academy. 25-26.
Matthews, N. (2012). Water Grabbing in the Mekong Basin - An Analysis of the
Winners and Losers of Thailand's Hydropower Development in Lao PDR.
Water Alternatives 5(2):392-411 .
McGillivray, M., & Carpenter, D. (2013). Narrowing the Development Gap in
ASEAN: Drivers and Policy Options. ASEAN.
Middleton, C. (2012). Transborder Environmental Justice in Regional Energy
Trade in Mainland South-east Asia. Austrian Journall of South-East Asian
Studies, 5(2), 292-315 , 299-301.
Milner, H. (1997). Interests, Institutions, and Information: Domestic Politics and
International Relations. Princeton.
Oraboune, S. (2012). Industrial Readjustment in Lao PDR: Towards 2020. In Y.
Ueki, & T. Bhongmakapat, Industrial Readjustment in Mekong River
Basin Countries: Towards AEC (p. 69). Bangkok: Bangkok Research
Center .
Pearse-Smith, S. W. (2012). The Impact of Continued Mekong Basin Hydropower
Development on Local Livelihoods. Consilience: The Journal of
Sustainable Development Vol.7 Issue 1 , 73-86.
Perwita, A. A., & Yani, Y. M. (2011). Pengantar Ilmu Hubungan Internasional.
Bandung: PT Remaja Rosdakarya.
Rourke, J. T. (2008). Level of Analysis and Foreign Policy. In J. T. Rourke,
International Politics on the World Stage (pp. 78-99).
Rourke, J. T., Hiskes, R. P., & Zirakzadeh, C. E. (1992). Direct Democracy and
International Politics: Deciding International Issues through
Referendums. Rienner.
Saleh, A. (2010). Broadening the Concept of Security: Identity and Societal
Security. Geopolitics Quarterly, Volume: 6, No 4, Winter 2010 , 230-231.
87
Solingen, E. (1998). Regional Orders at Century’s Dawn: Global and Domestic
Influences on Grand Strategy. Princeton
Quackenbush, S. L. (2004). The Rationality of Rational Choice Theory.
Department of Political Science Univeristy of Missouri, Columbia. Taylor
& Francis , 92-94.
BRIEFS, REPORTS AND OFFICIAL DOCUMENTS
ASEAN. (1996). Basic Framework of ASEAN-Mekong Basin Development
Cooperation. Kuala Lumpur: ASEAN.
ASEAN. (2009). ASEAN Economic Community Blueprint. ASEAN.
ASEAN. (2009). ASEAN Socio-Cultural Community Blueprint. ASEAN.
ASEAN. (2013). Initiative for ASAEAN Integration Policy Brief 4: Graduation of
All ASEAN Member States from Less Developed Country Status.
ASEAN.
Government of Lao PDR. (1991). Constitution of the Lao People's Democratic
Republic.
Government of Lao PDR. (2006). The Sixth Five-Year National Socio-Economic
Development Plan. Government of Lao PDR.
Government of Lao PDR. (2011). The Seventh Five-Year National Socio-
Economic Development Plan. Government of Lao PDR.
Kristensen, J. (2001). MRC Water Resource and Hydrology Programme, MRC
Hydropower Development Strategy.
Lanza, G. R. (2011). Review of the Ch. Karnchang Public Company Limited
Environemntal Impact Assessment (EIA) Xayaburi Hydroelectric Power
Project Lao PDR. Team Consulting Engineering and Management
Company Limited.
Mekong River Commission. (1995). Agreement on the Cooperation for the
Sustainable Development of the Mekong River Basin. Mekong River
Commission.
Mekong River Commission. (2001). MRC Water Resources and Hydrology
Programme. Phnom Penh.
88
Mekong River Commission. (2003). Procedures for Notification, Prior
Consultation and Agreement. Mekong River Commission.
Mekong River Commission. (2011). Integrated Water Resource Management-
based (IWRM) Basin Development Strategy. Mekong River Commission.
Ministry of Natural Resources and Environment. (2012). National Rio+20 Report
for Lao PDR Ministry. United Nations.
National Mekong Committee Cambodia. (2011). National Consultation Meetings
on "Prior Consultation for the Proposed Xayaburi Dam Project" in
Cambodia. Mekong River Commission.
National Mekong Committee Thailand. (2011). National Consultation Meetings
on “Prior Consultation for the Proposed Xayaburi Dam Project” in
Cambodia. Mekong River Commission.
National Mekong Committee Vietnam. (2011). National Consultation Meetings
on “Prior Consultation for the Proposed Xayaburi Dam Project” in
Vietnam. Mekong River Commission.
Poyry. (2011). Final Compliance Main Report of Government of Lao PDR for
Xayaburi Hydroelectric Power Project. Poyry.
Poyry. (2012). Background Material for Poyry's Assignment. Poyry.
UNDP. (2012). Country Analysis Report: Lao People’s Democratic Republic;
Analysis to inform the selection of priorities for the next UN Development
Assistance Framework (UNDAF) 2012-2015. Vientiane: UNDP.
UNDP. (2012). The Lao PDR Development Journey Towards Graduation from
LDC Status. UNDP.
UNESCO. (2012). Lao PDR UNESCO Country Programming Document 2012-
2015. UNESCO Bangkok Asia and Pacific Regional Bureau for
Education.
CONFERENCE, THESIS AND DISCUSSION PAPER
Asian Development Bank. (2009). Building A Sustainable Energy Future, The
Greater Mekong Sub-region. Asian Development Bank.
Asian Development Bank. (2012). Overview Greater Mekong Subregion
Economic Cooperation Program. GMS.
89
Bertelsmann Stiftung. (2014). BTI 2014 — Laos Country Report. Gütersloh:
Bertelsmann Stiftung.
Criekemans, D., & Duran, M. (2011). Mental Maps, Geopolitics and Foreign
Policy Analysis: Basic Analytical Framework and Application to Sub-state
Diplomacy in the Mediterranian. WISC-Third Global International Studies
Conference, (pp. 8-12). Porto.
Dosch, J., & Hensengerth, O. (2005). Subregional Cooperation in Southeast Asia:
The Mekong Basin. Department of East Asian Studies .
DPADM. (2005). Lao's People Democratic Republic. Department of Economic
and Social Affairs United Nations.
Economic Consulting Associates. (2010). The Potential of Regional Power Sector
Integration Greater Mekong Subregion | Transmission and Trading Case
Study.
Greater Mekong Subregion. (2014). GMS Economic Cooperation Program.
Greenius, L., Jagniecki, E., & Thompson, K. (2010). Moving Towards
Sustainable Community Renewable Energy: A Strategic Approach for
Communities. Thesis submitted for Completion of Master of Strategic
Leadership Towards Sustainability , 41.
Herbertso, K. (2011). Sidestepping Science: Review of the Poyry Report on the
Xayaburi Dam. International River.
Hirsch, P. (2006). National Interest and Transboundary Water Governance.
Danish Ministry of Foreign Affairs.
Houba, H. (2012). Transboundary Water Management: A Joint Management
Approach to the Mekong River Basin. The 56th AARES Annual
Conference. Fremantle.
International Energy Agency. (2010). Renewable Energy Essentials: Hydropower.
International Energy Agency.
International Energy Agency. (2013). World Energy Outlook 2013 Factsheet:
How Will Global Energy Market Evolves to 2035? International Energy
Agency.
International River. (2011). The Xayaburi Dam: A Looming Threat to the Mekong
River.
90
Korkeakoski, M. (2009). Impact of Hydropower (MHP) Based Electrification on
Rural Livelihoods: Case Study Nam Mong in Luang Prabang Province,
Lao PDR. . Master Thesis. Department of Biological and Environmental
Science, University of Jyvaskyla .
Le, Nhina. (2013). Xayaburi and Mekong Critical Point: Over-Damming the
Shared River and Bigger Threat to the Shared Future. University of San
Francisco's Peace Review .
Mekong River Commission. (2013). Mekong Basin Planning: The Story Behind
the Basin Development Plan. Mekong River Commission.
Mekong River Commission. (2014). Public Participation in Lower Mekong
Basin: Working Together for Better Future. Mekong River Commission.
Pholsena, S., & Phonekeo, D. (2004). Lao Hydropower Potential and Policy in the
GMS Contex. United Nations Symposium on Hydropower and Sustainable
Development (p. 2). Beijing: United Nations.
Severino, J. H. (2000, February 10). Greater Mekong Sub-Region Business
Workshop.
Somphanith, S. (2014). History of Socio-Economic Development Planning in Lao
PDR.
Stuart-Fox, M. (2005). Politics and Reform in the Lao People's Democratic
Republic. Working Paper No.126 National Library of Australia , 3-10.
World Energy Outlook. (2013). Southeast Asia Energy Outlook. International
Energy Agency.
INTERNET
ASEAN. (2014). About Us - Overview of ASEAN Cooperation on Environment.
Retrieved from ASEAN: http://environment.asean.org/about-us-2/
ASEAN. (2014). ASEAN Economic Community. Retrieved October 26, 2014,
from ASEAN: http://www.asean.org/communities/asean-economic-
community
ASEAN. (2014). ASEAN Socio-Cultural Community. Retrieved October 26, 2014,
from ASEAN: http://www.asean.org/communities/asean-socio-cultural-
community
91
Asia Times. (2012, May 3). Cambodia Pressures Laos to Halt Work on Xayaburi
Dam . Retrieved October 6, 2014, from Online Asia Times:
http://atimes.com/atimes/Southeast_Asia/NE03Ae01.html
Asian Development Bank. (2014). Overview. Retrieved October 4, 2014, from
Asian Development Bank: http://www.adb.org/countries/gms/overview
Bangkok Post. (2012, July 18). CK Shrugs Off Dam Report. Retrieved December
28, 2014, from Bangkok POst Business:
http://www.bangkokpost.com/business/economics/302993/ck-shrugs-off-
dam-report
BBC. (2012, November 6). Lao Approves Xayaburi 'Mega' Dam on Mekong.
Retrieved September 28, 2014, from BBC News Online:
http://www.bbc.co.uk/news/world-asia-20203072
Chen, D.-H. (2013, January 20). Mekong Countries at Odds Over Xayaburi Dam.
Retrieved October 6, 2014, from Cambodia Daily:
http://www.cambodiadaily.com/archives/mekong-countries-at-odds-over-
xayaburi-dam-7943/
Chiangrai Times. (2011, November 30). Thailand Will Not Oppose Xayaburi dam.
Retrieved October 6, 2014, from Chiangrai Times:
http://www.chiangraitimes.com/thailand-will-not-oppose-xayaburi-
dam.html
Government of Lao PDR. (2014, July 27). Xayaburi Hydropower Project.
Retrieved September 13, 2014, from Ministry of Energy and Business,
Department of Energy Business:
http://www.poweringprogress.org/new/news1/135-nam-theun-2-resettlers-
have-exceeded-the-household-income-target-2
Hunt, L. (2013, January 23). Laos Finally Called Out over Xayaburi Dam.
Retrieved January 11, 2015, from The Diplomat:
http://thediplomat.com/2013/01/laos-finally-called-out-over-xayaburi-
dam/
International River. (2011, March 22). 263 NGOs Call on Mekong Governments
to Cancel Plans for Xayaburi Dam. Retrieved December 28, 2014, from
International River: http://www.internationalrivers.org/resources/263-
92
ngos-call-on-mekong-governments-to-cancel-plans-for-xayaburi-dam-
3728
Mekong River Commission. (2014). Retrieved December 24, 2014, from Mekong
River Commission: www.mrcmekong.org
Mekong River Commission. (2014). About MRC. Retrieved September 14, 2014,
from Mekong River Commission: http://www.mrcmekong.org/about-mrc/
Mekong River Commission. (2014). Basin Development Plan Programme.
Retrieved October 27 27, 2014, from Mekong River Commission:
http://www.mrcmekong.org/about-mrc/programmes/basin-development-
plan-programme/
Mekong River Commission. (2014). FAQs to the MRC Procedures for
Notification, Prior Consultation and Agreement process. Retrieved
September 12, 2014, from Mekong River Commission:
http://www.mrcmekong.org/news-and-events/consultations/xayaburi-
hydropower-project-prior-consultation-process/faqs-to-the-mrc-
procedures-for-notification-prior-consultation-and-agreement-process/
Mekong River Commission. (2014). Initiative on Sustainable Hydropower.
Retrieved October 27, 2014, from Mekong River Commission:
http://www.mrcmekong.org/about-mrc/programmes/initiative-on-
sustainable-hydropower/
Mekong River Commission. (2014). Initiative on Sustainable Hydropower.
Retrieved December 28, 2014, from Mekong River Commission:
http://www.mrcmekong.org/about-mrc/programmes/initiative-on-
sustainable-hydropower/
Mekong River Commission. (2014). Mekong Integrated Water Resource
Management Project. Retrieved October 12, 2014, from Mekong River
Commission: http://www.mrcmekong.org/about-
mrc/programmes/mekong-integrated-water-resources-management-
project/
Mekong River Commission. (2014). Upstream Partners. Retrieved December 24,
2014, from Mekong River Commission:
http://www.mrcmekong.org/about-mrc/upstream-partners/
93
MRC. (2014). Initiative on Sustainable Hydropower. Retrieved December 28,
2014, from Mekong River Commission:
http://www.mrcmekong.org/about-mrc/programmes/initiative-on-
sustainable-hydropower/
Nijhuis, M. (2014, July 11). Dam Projects Ignite a Legal Battle Over Mekong
River's Future . Retrieved September 10, 2014, from National Geographic:
http://news.nationalgeographic.com/news/special-
features/2014/07/140711-mekong-river-laos-thailand-dams-environment/
Redd, S. B., & Mintz, A. (2014). Policy Perspectives on National Security and
Foreign Policy Decision Making. Retrieved January 9, 2015, from PSJ
Yearbook: http://psjyearbook.com/content/article16
UN DESA. (2014, October). LDC Criteria. Retrieved December 28, 2014, from
United Nations:
http://www.un.org/en/development/desa/policy/cdp/ldc/ldc_criteria.shtml
UN. (2014). United Nations Millenium Development Goals Background.
Retrieved November 4, 2014, from United Nations:
http://www.un.org/milleniumgoals/bkgd.shtml
Worrell, S. (2013, January 18). Laos defends actions on Xayaburi at MRC meet.
Retrieved December 28, 2014, from The Phnom Penh Post:
http://www.phnompenhpost.com/national/laos-defends-actions-xayaburi-
mrc-meet
