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WATER POLITICS

Courtesy of Asia Policy’s July 2013 issue, a detailed look by Richard Cronin at Mekong River basin:

Today, the Mekong River Basin is on the edge of a two-pronged calamity as a result of both the long-term and near-term actions of humans and governments. Of the two, short-term actions such as deforestation, the unsustainable consumption of groundwater, and the construction of large silt-trapping dams are having a far more immediate impact than global warming, sea-level rise, and the greater frequency of violent weather events. These near-term actions of governments—especially the construction of massive cascades of large dams on the Mekong mainstream and major tributaries—are accelerating and magnifying the now inevitable long-term effects of global warming and climate change, especially sea-level rise.

The current threat to the life-giving ecology of the world’s most productive freshwater fishery stems from long-standing dreams of exploiting the river’s valuable forests, minerals, rich alluvial deposits, and hydropower potential as a basis for economic development and industrialization. Because of the unavoidable trade-offs among energy, food security (fishing and agriculture), and other uses of water, these dreams may be not only unattainable without a cooperative, basin-wide approach but also a significant source of danger to regional peace and stability.

As part of its multibillion-dollar “go west” development program, China has set its course to fully exploit the huge hydropower potential of the upper Mekong River, which it calls the Lancang, without any consideration for the interests and concerns of its downstream neighbors. Beijing regards the upper Mekong as its national river and treats information on development plans, operational matters, and even the level of its reservoirs as national security secrets.

The downstream impact of China’s dams in Yunnan Province on the lower, Southeast Asian half of the river can hardly be overestimated. Despite the recently accelerating pace of GDP growth throughout the river basin, tens of millions of people, mainly in Thailand, Cambodia, and Vietnam’s Mekong Delta, still depend on the river’s natural bounty for much of their food and livelihoods. The reservoirs of China’s Yunnan dams, two of which are among the world’s largest, together have the capacity to store at least half the average annual discharge of the upper Mekong. In addition to significantly changing the river’s hydrology, the dam cascade will trap an estimated 80% of the historical load of nutrient-rich silt flowing from China, thereby reducing the fertility of the soil downstream and contributing to the intrusion of seawater into the Mekong Delta.1

Although the governments of the most vulnerable lower Mekong countries are increasingly aware of the threat posed by China’s Yunnan cascade, they have yet to show the political will to curb even their own mismanagement of water, let alone make a serious effort to influence Beijing. Vietnam has long been constructing large dams on major tributaries of the Mekong in the Central Highlands. Cambodia is allowing the rampant destruction of its forests for dams and plantation agriculture. The Mekong Basin countries’ equities in terms of trade, investment, and infrastructure loans are such that they are reluctant to openly challenge Beijing, especially when different levels of the Chinese government have made clear that downstream criticism will not deter China from pursuing its goals.

Revived Plans for Dams on the Lower Mekong

Even more consequential than the impact of the Chinese dams on the river’s flow and sediment loads, the massive water storage capacity behind two of the dams (Xiaowan and Nuozhadu) has enabled the revival of a plan dating from the Cold War era for damming the lower Mekong. Nine of the dams would be constructed by commercial developers on the Lao (seven) and Lao-Thai (two) stretches of the mainstream, with two more in Cambodia. All but one of the planned dams would be large, ranging from 38 to 68 meters high, but with comparatively small reservoir storage capacity. The dams will decimate hundreds of species of fish consumed as food that migrate long distances to spawn and will trap additional silt from the already reduced flow from China.

Building the lower Mekong dams will also create a new and potentially very costly dependency on Beijing. Unless China releases enough water in the dry season, mos, if not all, of the proposed dams would not be able to generate power during the driest months of the year. In light of China’s growing water crisis and the impact of climate change, it is not out of the asia policy question that at some point in the future Beijing could revalue the water- energy trade-off and withhold water to satisfy other higher priority needs.

The proposed lower Mekong dams are all commercial projects that will be built, owned, and operated mostly by Thai and Chinese companies for 20–25 years, with Thailand’s state-owned electric utility as the main customer. The planned Lao dams have created a storm of controversy involving not only environmental and human rights organizations and local civil society groups but also strong opposition from the Vietnamese and Cambodian governments.

Inadequate Institutional Frameworks for Water Cooperation in the Mekong Basin

Efforts to promote cooperative and sustainable management of water resources have been stymied by two sets of problems. One set is political and psychological—jealous guarding of recently recovered sovereignty, vast differences of economic development and military power, and geography (upstream versus downstream locations). The other is the practical impossibility of equitably dividing and developing a shared water resource whose immense productivity of aquatic life and agricultural bounty is dependent on the maintenance of a signature flood-pulse hydrology that has evolved over millions of years.

The Mekong River Commission (MRC), headquartered in Vientiane, Laos, provides an institutional architecture for cooperative water management but does not have any decision-making authority of its own. Rather, the MRC secretariat works under the authority of the national Mekong committees of Cambodia, Laos, Thailand, and Vietnam. These committees, in turn, are chaired by officials from the ministries of natural resources and environment—among the weakest ministries in every one of the governments.

The Xayaburi Dam in northern Laos, which will sell 95% of its output to Thailand, provided the first test of the MRC’s Procedures for Notification, Prior Consultation and Agreement (PNPCA). The outcome was regarded as disappointing at best and a debacle by its local and international critics.

Initially, at an MRC meeting in April 2011, following the end of the six-month review period prescribed by the PNCPA, Vietnam and Cambodia (and Thailand, temporarily) balked at accepting the project out of concern about the downstream impact on fisheries, sediment trapping, and livelihoods. These and other serious risks and uncertainties about mainstream dams had been raised by a strategic environmental review that had been carried out by expert consultants for the MRC and released in October 2010.3

In May 2011 the Lao government agreed to “suspend” the project to allow further studies because of strong opposition from the governments of Vietnam and Cambodia, in addition to civil society opposition in those countries and Thailand. Because work on site preparation had continued without interruption, it came as little surprise when, with strong Thai backing, the Lao government announced in November 2012 that the project would go ahead. The government’s claims that downstream objections had been addressed by some still undocumented engineering changes met with strong disavowals from relevant Vietnamese and Cambodian officials. The outcome raised a fundamental question about the future of the MRC and the prospects for cooperative water development and management.

Another framework for Mekong Basin cooperation, the Greater Mekong Subregion (GMS) was initiated by the Asian Development Bank at the end of the Cambodian civil war in 1992. Comprising all six Mekong countries,4 the GMS is a multibillion-dollar infrastructure development project that is building “corridors” with improved roads, bridges, and railroads and a regional electrical grid linking the major cities of the Lower Mekong Basin to each other and to Kunming, the capital and economic hub of China’s Yunnan Province. Unfortunately, cooperative management of the river that gives the region its name is not part of the GMS agenda. China and some of the lower Mekong countries are happy to have improved transportation links but have not wanted to give up one iota of sovereignty when it comes to their stretches of the river.

The Obama Administration’s Lower Mekong Initiative

In early 2009 the Obama administration’s decision to launch the Lower Mekong Initiative (LMI) reflected Washington’s serious concern about the uncertain future of cooperative water management in the Lower Mekong Basin, as well as about the growing geopolitical influence of China. The LMI drew on the United States’ ability to convene countries to promote capacity- building. Cambodia, Laos, Thailand, Vietnam, and subsequently Myanmar embraced the opportunity to diversify their sources of diplomatic and development support.

The LMI was never intended to become another framework for regional cooperation, and its funding averages only about $200 million a year. However, the initiative complements the MRC in two ways. First, the MRC countries and Myanmar each accepted responsibility for one (or in Thailand’s case, two) of the LMI “pillars,” which include education, health, environment and water resources management, and regional connectivity. These meetings involve different ministries, as appropriate to the particular pillar under discussion, whereas the MRC involves only the ministries of natural resources and the environment. Second, the LMI requires higher- level political engagement because of the United States’ role.5 In the Mekong region, the LMI is the most significant nonmilitary element of the Obama administration’s decision to “rebalance” U.S. military assets to Asia and the western Pacific.

Last Chance for Cooperative Water Development in the Lower Mekong Basin

Growing contention over constructing mainstream dams on the lower Mekong is creating new divisions in a region still recovering from decades of bitter conflict and threatening the very idea of a shared river for a shared future. Thus far, Laos has placed its goal of becoming the “battery of Southeast Asia” above its commitment to the letter and spirit of the 1995 Mekong Agreement and the PNPCA process. Likewise, Thailand, under the strongly pro-business government of Yingluck Shinawatra, has put the goal of diversifying its sources of energy over its interest in supporting multilateral cooperation among the MRC countries, instead emphasizing bilateral relations. In the case of Laos, the government has announced its decision to go ahead with two more dams: Pak Beng in the north and Don Sahong at Khone Falls on the border with Cambodia. The Lao government has said that it will submit the Pak Beng Dam to a PNPCA review but not the Don Sahong Dam. The latter dam, though not spanning the entire river, will block the most important channel through the falls for fish migration. Unless the MRC is able to carry out a more effective PNPCA review of both projects, and Laos is more responsive to downstream countries, tensions will continue to rise.

One possibility to bridge the current divide would be negotiating a consensus agreement on the maximum acceptable transboundary impact of mainstream dams—a kind of “Mekong standard.” Data gathered by the now uncertain follow-up study to the 2010 Strategic Environmental Assessment would be used to identify metrics for assessing the transboundary impacts of individual dams and the cumulative impacts of alternative scenarios for multi-dam cascades. The underlying objective of such an agreement would be to ensure that development of the lower Mekong’s hydropower potential occurs in a coordinated and equitable fashion that maximizes the benefits and minimizes the transboundary costs of any configuration of dams. Such an agreement would not be without precedent. The 1995 Mekong Agreement already requires that mainstream diversions do not interfere with acceptable “natural” minimum dry-season flows and flood season reverse flows into the Tonle Sap.

The sine qua non of more coherent, equitable, and sustainable hydropower development would be the construction of a power grid in the Lower Mekong Basin. A grid linking the four MRC countries (and theoretically even Myanmar and China) would make it possible to confine dam construction to northern Laos, where the river is narrower and fisheries are less important, and avoid the much greater impact on fisheries and agriculture from dams in southern Laos and Cambodia. Any national or regional power deficits could be made up by a combination of conservation measures—for which there currently is great scope, especially in Thailand— and other energy sources. The Strategic Environmental Assessment estimated that if all of the planned mainstream dams were built, they would only satisfy 6%–8% of the estimated power demand in the Lower Mekong Basin by 2025—the equivalent of one year’s increase in demand from 2015 to 2025—and that Laos would gain about 70% of the total power benefit (mainly revenues and avoided thermal power costs) of the eleven dams.  Cambodia, which now depends almost totally on diesel-fueled generators, could purchase power from the grid.

Ultimately, neither the MRC nor the GMS can effectively promote cooperation on sustainable development without the requisite political will. Unwittingly, the tendency of the four MRC countries thus far to prioritize one kind of national interest over their broader shared interest in regional cooperation may jeopardize a more important but insufficiently recognized interest in regional peace and stability.