INSTITUTIONAL ARRANGEMENTS: POLICIES AND ADMINISTRATIVE MECHANISMS FOR WATER GOVERNANCE IN THE LAO PEOPLE S DEMOCRATIC REPUBLIC

Transcription

1 MEKONG PROJECT 4 ON WATER GOVERNANCE Challenge Program for Water and Food Mekong INSTITUTIONAL ARRANGEMENTS: POLICIES AND ADMINISTRATIVE MECHANISMS FOR WATER GOVERNANCE IN THE LAO PEOPLE S DEMOCRATIC REPUBLIC Amphavanh Sisouvanh 1, Lilao Bouapao 1, Chansamone Sayalath 2, Sonephet Phosalath 3, Vidaovanh Phounvixay 1, Vena Ngonvorarath 1, Kate Lazarus 1, Sokhem Pech 4 1 Challenge Program on Water and Food Mekong 2 Ministry of Energy and Mines, Lao PDR 3 Nam Theun/Nam Kading River Basin Organisation, Ministry of Water Resources and Environment 4 Mekong Program on Water Environment and Resilience July 2013 i

2 TABLE OF CONTENTS TABLE OF CONTENTS... ii LIST OF TABLES... iii LIST OF FIGURES... iii LIST OF APPENDICES... ii LIST OF ACRONYMS... ivv 1.0 INTRODUCTION TO MEKONG WATER GOVERNANCE WATER GOVERNANCE IN LAO PDR ADMINISTRATIVE AND LEGISLATIVE FRAMEWORKS LEGISLATIVE DEVELOPMENT RELATING TO HYDROPOWER AND ITS IMPACTS MULTILATERAL ENVIRONMENTAL AGREEMENTS IN LAO PDR: INSTITUTIONS AND ACTORS MULTI-LATERAL AGENCIES (ADB, WORLD BANK, MRC) World Bank and Asian Development Bank (ADB) Mekong River Commission (MRC) United Nations Development Program (UNDP) BILATERAL DONORS PRIVATE DEVELOPERS/SECTOR STATE ACTORS FUNCTIONAL ANALYSIS OF RELEVANT ACTORS Government Agencies Administrative (Decision-Making and Policy Development) Processes CRITICAL ANALYSIS OF LEGAL AND MINISTRATIVE SYSTEMS RELATED TO WATER RESOURCE DEVELOPMENT AND THEIR OUTCOMES Organizational Capacity Coordination/Conflicts between Government Departments Non-State Actors External Influences in Implementing National Laws and Policies Social Activism ASSESSMENT OF VERTICAL AND HORIZONTAL LINKAGES OF STATE AGENCIES ASSESSMENT OF FACTORS FACILITATING OR LIMITING EFFECTIVENESS AND EFFICIENCY OF THESE ACTORS PERFORMANCE SUMMARY AND SOME SUGGESTIONS FOR FURTHER FOLLOW-UP REFERENCES ii

3 LIST OF TABLES Table 1 List of multilateral environmental agreement. 5 Table 2 Summary of relevant laws, regulations, policies and plans. 7 Table 3 Project cycle and resettlement procedures. 16 Table 4 Revenue of Environmental Protection Fund for Table 5 Top donors (bilateral and multilateral) in Lao PDR over the period 2005 to 2007(commitments in current USD millions). 25 Table 6 Government agencies related to livelihoods, water valuation and dam cascades. 29 Table 7 Non-state actors involved in the THPC/THXPC project areas. 43 LIST OF FIGURES Figure 1 Governance in the Lao PDR in comparison to other countries. 2 Figure 2 Steps in hydropower power concession awards, approval and implementation and monitoring processes in Lao PDR. (Julia Fraser, based on MacGeorge et al., 2010, WB (2009), and van den Toorn (2009) with inputs from Jie Tang and William Rex (2010)). 20 Figure 3 Organizational structure: vertical and horizontal linkages 37 LIST OF APPENDICES Appendix 1: Sample Survey Questionnaire 53 Appendix 2: Sample Survey Questionnaire in Lao language (Separated attachment) 57 Appendix 3a: Power Project in Lao PDR Developed Before iii

4 ADB AFD AMWRS ASEAN AusAID BOT CA CAR CBD CCAI CCD CITES DAFO DEB DEM DEO DEPP DHO DICTO DMH DOE DoE DPI DS DSEDS DWG DWR EDF EDL EGAT EIA EIAD EMDP EMP EPF EPL ESIA ESIAD Exim FCCC FS GDP GMS GOL ICBP IEE IFI IOL IPD LIST OF ACRONYMS Asian Development Bank Agence Francaise de Developpement Australian Mekong Water Resources Strategy Association of South East Asian Nations Australian Agency for International Development Built-Own-Transfer Concession Agreement Compensation and Resettlement Convention on Biological Diversity Climate Change and Adaptation Initiative Convention Combating Desertification Convention on International Trade in Endangered Species of Wild Fauna and Flora District Forestry and Agriculture Office Department of Energy Business District Energy and Mines District Education Office Department of Energy Policy and Planning District Heath Office District Information, Culture and Tourism Office Department of Meteorology and Hydrology Department of Electricity Department of Environment Department of Planning and Investment Development Strategy National Socio-economic Development Strategies District Working Group Department of Water Resources Electricite de France Electricite du Laos Electricity Generating Authority of Thailand Environmental Impact Assessment Environmental Impact Assessment Department Ethnic Minority Development Plan Environmental Management Plan Environmental Protection Fund Environmental Protection Law Environmental and Social Impact Assessment Environmental and Social Impact Assessment Department Export Import Bank of China Framework Convention on Climate Change Feasibility Study Gross Domestic Product Greater Mekong Sub-region Government of Laos Integrated Capacity Building Programme Initial Environmental Examination International Financial Institutions Inventory of Losses Investment Promotion Department iv

5 IPP Independent Power Producers ISA Initial Social Assessment IWRM Integrated Water Resources Management LD Law Department LEnS Lao Environment and Social Project LMB Lower Mekong Basin LNCE Lao National Committee on Energy LNFC Lao National Front for Construction LNMC Lao National Mekong Committee LPRP Lao People's Revolutionary Party LSWO Labor and Social Welfare Office LWU Lao Women Union LYU Lao Youth Union MAF Ministry of Agriculture and Forestry MDBA Murray Darling Basin Authority MEAs Multilateral Environmental Agreements MEM Ministry of Energy and Mines MIC Ministry of Industry and Commerce MICT Ministry of Information, Culture, and Tourism M-IWRM Mekong Integrated Water Resources Management MLSW Ministry of Labor and Social Welfare MOE Ministry of Education MOF Ministry of Finance MoFA Ministry of Foreign Affairs MOH Ministry of Health MONRE Ministry of National Resources and Environment MOU Memoranda of Understanding MPI Ministry of Planning and Investment MPTC Ministry of Posts & Telecommunication MPWT Ministry of Public Work and Transport MRB Mekong River Basin MRC Mekong River Commission MW Mega Watt NA National Assembly NGOs Non-Governmental Organization NGPES National Growth and Poverty Eradication NLMA National Land Management Authority NNG Nam Nguem NPSH National Policy on Environmental and Social Sustainability of the Hydropower Sector NSEDP National Socio-Economic Development Plan NT2 Nam Theun 2 NT-NKD Nam Theun-Nam Kading NTPC Nam Theun 2 Power Company PDA Project Development Agreement PE Panel of Experts PEI Poverty Environment Initiative PIC Rotterdam Convention on Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade PIPs Public Investment Programs PMO Prime Minister's Office v

6 POPs RAP RBC RC RD RMP RMU RP SEA SED SEIA SEMII SIA SIDA SMMP STEA TA THPC THXP THXPC ToRs UNDP USAID VDC WB WERI WHC WRCCS WREA WREO WSI YO Persistent Organic Pollutants Resettlement Action Plan River Basin Committee Resettlement Committee Research Department Resettlement Management Plan Resettlement Management Unit Resettlement Plan Strategic Environmental Assessment Social and Environmental Division Social and Environment Impact Assessment Social and Environmental Management II Project Social Impact Assessment Swedish International Development Agency Social Management and Monitoring Plan Science Technology and Environment Agency Technical Assistance Theun-Hinboun Power Company Ltd Theun-Hinboun Expansion Project Theun-Hinboun Expansion Project Terms of References United Nation Development Program U.S. Agency for International Development Village Development Committee World Bank Water and Environment Research Institute World Heritage Convention Water Resources Coordination Committee Secretariat Water Resource and Environment Administration Water Resource and Environment Office Water Storage Infrastructure Youth Organization vi

7 1.0 INTRODUCTION TO MEKONG WATER GOVERNANCE Development of unexploited hydroelectric potential of the mainstream Mekong River and its tributary systems has become a significant strategic issue in the Greater Mekong Sub-region (GMS). With an estimated hydropower potential of 30,000 MW, dam developments in the Mekong River Basin (MRB), are expected to meet a considerable share of the region s energy demand, which is expected to increase at the rate of 7 percent per year over the next 20 years. A strong demand for electricity comes from the rapidly industrializing countries of China, Thailand and Vietnam, and electricity supplied from the hydropower sector is expected to drive growth in industries and national economies in the region. Recognizing the high revenue generating potential of hydropower, countries in the Lower Mekong Basin (LMB) have committed to the development of their vast water resources. Lao PDR itself has signed over 60 Memoranda of Understanding (MOU) for mainstream Mekong and tributary projects. Cambodia has developed a master plan, which has identified 14 projects with an electricitygenerating capacity of 5,300 MW, while Vietnam s Hydropower Master Plan outlines plans for developing 2,500 MW of electricity over the next decade. These countries have oriented their investment regimes to facilitate the greater involvement of private sector in the energy industry, in order to augment gross domestic product (GDP) growth and economic development. The past decade has seen private investors in China, Thailand, Vietnam, Malaysia and Russia becoming involved in hydropower plans in the region. The process of building large dams in the MRB, however, is complicated by the highly interdependent linkages that exist between the Mekong River system, and natural resources and livelihoods in the region. Costs and benefits of dam construction on livelihood options, agriculture, fisheries, biodiversity, transportation and other sectors have not been comprehensively evaluated to date. Over 65 million people in the region depend on the Mekong River system and its tributaries for livelihoods, and construction of dams for electricity generation can have profound and lasting impacts on their livelihoods and ecosystems. As a result, hydropower development in the MRB has become a hotly debated issue. Water and hydropower decisionmaking, planning and implementation in the region are considered to be ineffective by many actors. Efforts by regional organizations, such as the Mekong River Commission (MRC), to facilitate dialogue and inform local governments of the likely impacts of dams have had a little impact on patterns of dam development. Water governance refers to the way in which power is organized, shared, and negotiated in society the interactions and decision-making processes involved in the development and utilization of water resources; and the distribution of benefits and involuntary risks from doing so. This includes political, administrative, and policy structures, both at the formal and informal levels that are embedded in and influence decision-making and management practices. It also considers the processes of shaping agendas, design of institutions, implementation of policies and practices, for day-to-day management of water. In the Mekong Region, inequitable development of water resources has the potential to threaten livelihoods that depend on them. Large-scale investment in water infrastructure, such as hydropower and irrigation, can generate large profits for private firms at the expense of livelihood and resource security to a majority of the region s population. Limited interest and accountability of the public sector can particularly lead to the marginalization of women, ethnic groups and other vulnerable populations, creating insecure and uncertain futures. The focus of the study is to increase understanding about the governance of Water Resources Infrastructure development in the Lao PDR. To achieve this objective, the study included visits to relevant 1

8 agencies at the central, provincial, district, and village levels. The study team also visited the Theun- Hinboun Expansion project. Basic research tools such as interviews, observations, and document review were used for the study. A semi-structured questionnaire for "assessing policies and administrative mechanisms in water governance in Lao PDR" was prepared and distributed to key government staff of the relevant line agencies, namely, the Ministry of Energy and Mines (MEM), the Water Resource and Environment Administration (WREA), the Ministry of Agriculture and Forestry (MAF), the Ministry of Planning and Investment (MPI), the Ministry of Education (MOE), the Ministry of Health (MOH), and the River Basin Committees (RBCs) during meetings and interviews at district, provincial, and central levels. The questionnaire consisted of three sections: 1. Respondents profiles and experience in policymaking; 2. Policies and practices relevant to the three issue fields (livelihoods, water valuation and dam cascades); and 3. Organizational capacity. There were 23 questions in all. (See Appendix 1 for the questionnaire in English and Appendix 2 for the questionnaire in Lao language.) Nineteen questionnaires were answered, six by officials in the districts (Khamkert and Hinboun), 12 by provinces (Khammouane and Bolikhamxay), and one by a representative of the central government in Vientiane. Most officers answering the questionnaires were heads of their division or sector, while others were technical experts, deputy heads of divisions and sectors, or project managers. Questions 4 to 10 related to policies and practices in the three issue fields. 2.0 WATER GOVERNANCE IN LAO PDR The Government of Lao PDR has a formal policy to achieve middle-income country status by the year In order to reach this goal, the Lao economy (in terms of GDP) needs to grow at a rate of 7 percent per year. Hydropower and mining sectors are considered important strategies to drive the country toward this target. Lao PDR is a relatively stable one-party, socialist political system, where, notwithstanding the market reforms initiated under the New Economic Mechanism in 1986, the state continues to be involved in a great deal of economic activity. Although traditional political networks remain very powerful, the authority of the Lao People's Revolutionary Party (LPRP) is institutionalized rather than being heavily personalistic (Lao PDR Development Report 2010, World Bank [WB]). Figure 1 Governance in the Lao PDR in comparison to other countries. a. Governance in Lao PDR in comparison to East Asia Pacific Average (2008) b. Governance in Lao PDR in comparison to other resource-rich developing countries average (2008) Governance in Lao PDR, when compared to the East Asia-Pacific average and to the 2008 average for other resource-rich developing countries, shows weakness in accountability and regulatory quality (see 2

9 Figure 1, World Governance Indicators, WB Institutes). Government effectiveness and the rule of law also present challenges. Anecdotal evidence suggests that corruption, in the forms of state capture and administrative rent seeking, is common and increasingly problematic. Yet, even though the Lao Government remains weak in this area, it has made important advances over the past five years in strengthening its public financial management system and improving internal oversight mechanisms, thus boosting general public sector governance institutional quality. Additionally, the State Audit Office 1 has been expanded and now reports to the National Assembly rather than to the Government (Lao PDR Development Report, WB 2010). During late 2006 and 2007, the Lao Government commenced restructuring of water resource management agencies. The Water Resources and Environment Administration (WREA) was established in April 2007 within the Office of the Prime Minister. A Minister to the Prime Minister s Office is Head of both WREA and Lao National Mekong Committee (LNMC) (ADB 2010). It absorbed the responsibilities of the Environment Department from the Science Technology and Environment Agency (STEA), the Water Resources Coordination Committee Secretariat (WRCCS) and the LNMC Secretariat. In addition, the Department of Meteorology and Hydrology (DMH) was transferred from the Ministry of Agriculture and Forestry to WREA. The WRCCS was upgraded to become the Department of Water Resources (DWR) and a restructuring of responsibilities previously within the STEA created the Water and Environment Research Institute (WERI) (ADB 2010). In March 2009, the Government upgraded and re-mandated the Lao National Mekong Committee (LNMC) to take on the role of national water apex body (ADB 2010). In addition to its previous responsibilities for coordination with the programs of Mekong River Commission (MRC), the LNMC was also assigned to review, recommend and oversee the implementation of national water resources policy; advise on river basin plans; and create river basin committees. The LNMC Secretariat, which was relocated from the Prime Minister s Office to WREA (now known as Ministry of Natural Resources and Environment (MONRE)) in May 2007, was incorporated into Department of Water Resources (DWR) in March The responsibilities of the DWR include, to implement Integrated Water Resources Management, to support and input from Lao PDR to international water and environment management programs of the MRC Secretariat through LNMC, and to support river basin and sub-basin activities (ADB 2010; Lyle c., Steeley C., Sousakoun T., and Soukaoun K 2008). When WREA, was formed there were: (i) no agreed upon national water resources policy or strategy; (ii) no strategic plans or roadmap for the various water using subsectors in development planning; and (iii) no water legislation in place to properly support contemporary approaches to water resource management. WREA has therefore focused on strengthening the national capacity for water resource management (both policy and human resources), and the regulation of environmental impacts and water use in development activities, with support from the ADB and AusAID, through TA 7013-LAO: Updating the National Water Resources Policy & Strategy (ADB 2010). In response to hydropower development (as well as mining and commercial plantation) in Lao PDR, WREA's key role was that of environmental and social regulator, responsible for implementation and oversight of the Compensation and Resettlement (CAR) Decree adopted by the GoL in 2005 and the new Environmental and Social Impact Assessment (ESIA) Decree approved in 2010 (WB 2010; Prime Minister's office 2005; Prime Minister's Office 2010). 1 The National Audit Office (NAO) was established under Prime Minister s Decree no. 174 in 1998, which made the NAO an agency of the Prime Minister s office. The NAO was later renamed the State Audit Organization. 3

10 Another major restructuring in water governance took place on 15 June 2011, when the National Assembly approved the Ministry of Natural Resources and Environment (MONRE), a new structure to replace WREA. The current structure consists of 14 departments (Cabinet, Administration and Human Resources, Monitoring, Planning and Cooperation, Policy Development, Land Allocation and Development, Land Management, Water Resources, Environmental Protection, Pollution Control, Forestry Management, Geology and Mining, Meteorology and Hydrology, and Climate Change and Disaster), four institutes (Institute of Social and Environmental Impact Assessment, Natural Resources and Environment Data and Information Centre, Institute of Natural Resources and Environment, and Lao National Mekong Committee) and others. It is expected that the new Ministry would play a stronger role (than WREA) with its Ministerial functions to fully implement its mandate. 3.0 ADMINISTRATIVE AND LEGISLATIVE FRAMEWORKS 3.1 LEGISLATIVE DEVELOPMENT RELATING TO HYDROPOWER AND ITS IMPACTS According to the World Bank Lao PDR Development Report 2010 (WB 2010), though the Law on Investment Promotion (updated 2009) provides the overall framework for concessions in the hydropower sector, there is some confusion in the mandates of the various institutions involved. There is also lack of clear standards and procedures for investors to follow, and absence of capacity in the government agencies, which may create confusion among potential investors, resulting in a prolonged concession process, thus jeopardizing transparency and accountability. In response to constraints in the Law on Investment Promotion, the influx of investors and government policy to become the "battery of Asia", the Government has introduced more efficient review and approval processes. First, the GoL adopted the National Policy on Environmental and Social Sustainability in Hydropower Development (NPSH), Second, the line ministry was reorganized in 2007 from the Ministry of Industry and Handicraft to the current Ministry of Energy and Mines, with explicit emphasis and mandates on these sectors. Third, the Electricity Law was further revised and updated in The approval of these laws signals more streamlined decision making procedures in the hydropower industry. Fourth, besides internal strengthening of MEM, the former Water Resources and Environmental Administration (WREA), created in mid 2007 as part of the Prime Minister s Office, had the mandate of assuming the role of an environmental and social regulator, responsible for implementing and overseeing the Compensation and Resettlement (CAR) Decree adopted by the GoL in 2005 and the new Environmental and Social Impact Assessment (ESIA) Decree approved in Despite the government s commendable efforts to develop a coherent and systematic approach to sustainably develop hydropower and alleviate its impact on poverty, several constraints identified in the Paper on Water Resources Management in Lao PDR (WREA, 2008) remain to be addressed. These include: Limited legislation and enforcement; Lack of a clear policy preference for types of projects; Single-project orientation, rather than program-based planning; Fragmented water resources management arrangements, limiting legal functioning and capacity, and creating gaps among related sectors; and Data fragmentation, problematic access to information, and other issues limiting the use of robust information in decision-making and implementation. 4

11 3.2 MULTILATERAL ENVIRONMENTAL AGREEMENTS IN THE LAO PDR Lao PDR is party to 11 global Multilateral Environment Agreements (MEAs) (see Table 1 for the lists of MEAs). In Lao PDR, international agreements are not self-executing, which means that their obligations must be implemented in the national law (Prime Minister's Office 2007). Eight of the MEAs to which Lao PDR is a party to include an obligation to develop national policy, strategies and plans to guide implementation - only the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) and the Montreal Protocol don t do so. Most of the laws reviewed require the government or government authorities concerned to develop policies, strategies and action plans on the protection and management of environment and natural resources. In particular, Article 5.2 of the Environmental Protection Law (EPL) requires that the National Socio- Economic Development Plan (NSEDP) contain provisions on the management and protection of the environment and natural resources. In contrast, Articles 22.1 and 43.3 of the law on water and water resources provide that water management plans must be in compliance with the NSEDP. This means that economic development has higher priority than sustainable water resource management. It also means that water management plans may be subject to revision on the basis of changes in policy, rather than being based on sound principles of water resources management. These articles of the law on water and water resources are not consistent with Article 5.2 of the EPL. This inconsistency creates uncertainty for whomsoever attempts to comply with the existing law and for whoever is responsible for enforcing it (Prime Minister's Office 2007). Table 1 List of Multilateral Environmental Agreements (MEAs) Biodiversity Atmosphere Chemicals World Heritage Convention (WHC, 1972) The Convention on international Trade in Endangered Species of Flora and Fauna (CITES, 1973) The Convention on Biodiversity (CBD, 1992) Cartagena Protocol on Biosafety (2000) The Convention on Combating Desertification (CCD, 1994) Ramsar Convention of Wetlands (2010) Vienna Convention for the Protection of the Ozone Layer (1985) The Montreal Protocol on Substances that Depleted the Ozone Layer (1987) The Framework for Convention on Climate Change (FCCC, 1992) The Kyoto Protocol (1995) The Stockholm Convention on Persistent Organic Pollutants (POPs, 2001) Sources: Prime Minister's Office, the United Nations Development Program (UNDP)-WREA, Project MEA 2007, on Comparative Analysis between Multilateral Environmental Agreements and National Socio-Economic Development in Lao PDR. MEAs obligations have been incorporated into 10 national legal instruments. The obligations, which have been incorporated into most laws, include monitoring, data collection, and performance incentives. Issues that are lacking in the majority of the laws reviewed include requirements for: 5

12 preparation of inventories of natural resources; education and public awareness; public participation in decision-making related to resource management, technology transfer and technical cooperation. In particular, no law reviewed requires that there be a review of its enforcement and of compliance with its provisions. Article 31 of the Mining Law and Article 6 and 14 of Electricity Law require project developers to undertake environmental impact assessments (EIA), but none of the other laws reviewed contain this requirement. In addition, only hydropower and transportation/road sectors have developed sectoral EIA regulations (Prime Minister's Office 2007). All of the laws reviewed contain provisions on institutional arrangements, but not all of them include conservation and environment protection in the mandates of the responsible institutions, nor do they assign responsibilities for these functions at all levels, from central ministries to village administration (Prime Minister's Office 2007). Table 2 provides a summary of relevant Laws, Regulations, Policies and Plans related to hydropower development, dam cascades, water valuation, and livelihoods. Each of the relevant laws, regulations, policies and plans will be further elaborated upon in the following sections. 6

13 Table 2 Summary of Relevant Laws, Regulations, Policies and Plans Issues fields Law/ Regulation Decree Policy Strategy/Plan Guidelines Description of relevance Hydropower development Dam Cascades Law on Electricity (1997, 2008, updated 2012) Regulations of Environment Management for Electricity Projects Law on Investment Promotion (National Assembly, 2009) Regulation on list of investment projects subject to IEE and EIA (2010) Environmental Protection Law (1999) Wildlife and Aquatic Animals Law (MAF, 2007) Lao on National Heritage (MCI, 2005) Decree on Implementation of Electricity Law Decree on EIA (2010) Decree on Establishment and Activities of River Basin Committee (No. 293/PM, ) The Seventh National Socio-Economic Development Plan (NSEDP) ( ) National Policy on Environmental and Social Sustainability of Hydropower Sector in Lao PDR (NPESSHS - No.561/CPI, STEA, 2006) National Policy on Sustainable Hydropower (STEA, 2006) 7 Power System Development Plan for Lao PDR (Final report, August 2004), prepared by Maunsell and Lahmeyer International Strategy Plan for Energy Sector Development Renewable energy development strategy of the Lao PDR (MEM, 2010) Lao Electric Power Technical Standards (MEM, 2004) National Environmental Standards (2010) There are number of legislations relevant to hydropower development, but the key legislations line ministries most referred to are the Law on Electricity, the Law on Investment Promotion and the National Policy on Sustainable Hydropower, NSEDP and EIA (SIA) Decree. Two RBCs have been set up as the result of this Decree (Nam Ngum and Nam Theun - Nam Kading RBCs), but they are still new, weak, and irrelevant to hydropower development.

14 Table 2 (Cont d.) Issues fields Law/ Regulation Decree Policy Strategy/Plan Guidelines Description of relevance Water valuation Livelihoods Law on water and water resources (MIH, 1996) to be updated in Regulations for implementing Decree 192/PM on Compensation and Resettlement of People Affected by Development Projects Law on Forestry (MAF, Mar. 2008) Land Law (MoF, 2003) Decree on establishment and activities of water resources and environment administration 149/PM Decree on EIA (2010), but also incorporates Social Impact Assessment. Decree on Compensation and Resettlement of People Affected by Development Projects (No. 192/PM, Sept. 2006) Decree on developing small villages into village development units and developing bigger villages into a small city in the rural area (03/ກມສພມ, 30 May Draft National Water Resource Policy, Strategy and Action Plan (1 Oct. 2010) The Seventh National Socio- Economic Development Plan (NSEDP) ( ) National Policy on Health Impact Assessment (No. 365/MOH, 01 Mar. 2006) Draft National Strategy for Rural Water Supply, Sanitation and Hygiene (v.3 - Mar. 2011, MOH) National Growth and Poverty Eradication (NGPES) Technical Guidelines on Compensation and Resettlement in Development Projects (Nov. 2005) Draft Practical Guideline on Health Impact Assessment in Lao PDR Public involvement guidelines, draft (2009) It is unclear what law/policy/decree is relevant to water valuation, but the draft National Water Policy provides a framework for IWRM which considers it. There are many pieces of legislation relevant to livelihoods that are implemented by different ministries/ agencies. 8

15 Hydropower Development Related law and policies Law on Investment Promotion (2004, updated 2009): The law assigns the Ministry of Planning and Investment (MPI) and the Ministry of Industry and Commerce (MIC) as the investment administration authorities with rights to propose solutions to relevant authorities (sectoral ministries) for their consideration if they find any violations of law or regulation related to investment (Article 93). The MPI is mainly responsible for concessions of large projects (e.g., hydropower, mining, commercial plantation), while the MIC is responsible for general business investment. Different governmental agencies regulate this cross-sectoral development from different perspectives. The WREA (now MONRE 2 ) is in charge of reviewing the EIA and regulating water resources management, the National Land Management Authority (NLMA) formulates integrated land-use planning, and the MPI and MIC regulate investment. The law states that all activities of enterprises shall be managed, monitored, and inspected by relevant sectors (Article 93). In the context of hydropower development (concession business), investors shall submit applications to the one-stop service of the Investment Promotion Department of the MPI, which will then propose them to the government or provincial authorities for further consideration (Article 21). In practice, on a case-by-case basis, MEM (through the Department of Energy Business [DEB]) is also able to submit proposals and reports directly to the government without going through MPI. But they do keep MPI well informed. In the case of hydropower development projects, the MPI is assigned to represent the government and sign MOUs, Project Development Agreements (PDAs), and Concession Agreements (CAs) on its behalf. The MPI (Department of Law and Department of Research) also works closely with ministries concerned and local governments through all of the processes. According to the law, all project developers must set up and legally register a local project company with a minimum investment funds of not less than 30 percent of the total project value; all taxes, royalties, and so forth must be paid through this project company only. Law on Electricity (1997, 2008, 2012): This law determines regimes of production and distribution of electricity, with an emphasis on hydropower and its administration. It lays out which government agencies must approve hydropower projects, based on their size in terms of electricity generation (see Box 1). It also outlines the procedure for obtaining concessions to operate electricity projects, and the rights and duties of government agencies responsible for electricity sector administration and inspection. In order to be eligible to develop hydropower in the Lao PDR, project developers must meet all requirements outlined in this law when developing a project proposal. Recently, the government has approved the updated Electricity Law 03/NA, Vientiane, 20 December 2011 (to replace 03/NA, 8 December 2008). 2 MONRE - Ministry of Natural Resource and Environment approved at the 9th National Assembly on 15 June

16 The following articles have been updated or replaced in the updated law: Articles Headings 17 National Electricity Transmission Grid 26 Investment in operations relating to electricity Key descriptions Additional paragraphs are added The operation enterprises are now: BOT, BOOT, BT and state owned. BTF has been removed. 29 Concession Procedures Clearer procedures: (1) MOU; (2) PDA; (3)CA 33 Concession Term Possible extension of 10 years term has been removed. 34 Size of electricity enterprises Approval: < 100KW District Governor & or municipality > 100KW 15MW Provincial Governor (in consultation & with approval of relevant sectors) > 15MW 100MW Central Government (in consultation with MPI and MEM) > 100MW (or more than 10,000 ha of reservoir sizes, other impacts) National Assembly (in consultation with the central government) 37 Obligations of Concessionaires 39 Exceptions to Concession Application 41 Contribution to environmental fund 45 Approval for establishment of an electricity enterprise in a locality or in rural areas 49 Electricity prices of rural areas 50 Rights of Concessionaires 64 Rights and responsibilities of Ministry of Energy and Mines 65 Rights and responsibilities of Provincial and Vientiane Municipal Energy and Mines added added 68 Inspection Agencies MEM, Provincial and Vientiane Municipality Energy and Mines, Districts Energy and Mines. 81 Effectiveness 60 days after presidential approval. Environmental Protection Law (1999): As stated in the law, environmental protection consists of all activities that contribute to the protection of the environment and do not cause damage to the environment; that ensure a clean and pollution-free environment; and that do not cause adverse impacts to the health of humans, animals, plants, or to the balance of the ecosystem. The law defines environmental management and monitoring agencies (and clearly sets out their rights and duties), obligations to protect natural resources; measures for managing exploitation and use of natural resources (such as protection of biodiversity and protection of cultural, historical, and natural 10

17 conservation sites); and pollution control from business sectors. However, there is no specific section/clause concerning potential impact and measures for energy sector development. The Seventh National Socio-Economic Development Plan (NSEDP) ( ): In the energy sector, the GoL targets the construction of 10 more large dams to produce 5,015 MW of power. Along with these dams, it aims to complete transmission lines (115 Kv) in the north, central, and south regions to meet the power demand and, at the same time, ensure that the number of households who access electricity increases to 80 percent by The plan targets national growth and intends to ensure the preservation of natural resources and protection of environment. National policy on environmental and social sustainability of hydropower sector in the Lao PDR (NPESSHS - No.561/CPI, STEA, 2006): This overarching policy guides related ministries for sustainably developing the hydropower sector in Lao PDR, taking lessons from the Nam Theun 2 project. The policy is founded on three principles: (a) economic sustainability relies on the maintenance of the renewable resource base and the use of nonrenewable resource rents to support the development of other factors of production; (b) social sustainability is based on the principles of inclusiveness, mutual understanding, and consensus; and (c) ecological sustainability relies on the avoidance of irreversible environmental impacts such as the loss of biodiversity, the accumulation of persistent pollutants, or the disruption of ecological cycles. The policy applies to all large hydropower dams, where large dams are defined as having an installed capacity of higher than 50 Megawatts or inundating more than 10,000 hectares of land at their full supply level. This national policy applies to hydropower projects constructed after The Policy is guided by ten core principles: i) Environmental Assessment; ii) project-affected people; iii) watershed management and conservation; iv) consultation; v) disclosure; vi) compliance; vii) revenues; viii) existing hydropower projects; ix) institutionalization; and x) reporting on annual status of the environment, and social compliance detailing the performance of all hydropower projects in planning, design, construction and operational phases by Bureau of the Secretariat of the Lao National Committee on Energy (LNCE). In sum, hydropower project proposals should go through the MPI as a first window, with the MEM as the recipient that drives or leads processes as outlined in the investment promotion law and MEM's Independent Power Producers (IPP) implementation processes. Proposals must follow the Electricity law, the EIA Decree and other relevant legislations (e.g., the Ministry of Labor and Social Welfare on labor law, the Ministry of Public Work and Transport for approval of access roads, the NLMA for concession area surveys and development, and the Ministry of Agriculture and Forestry for forest classification and protected areas). The most common type of concession agreement is built-owntransfer (BOT). According to an interview with the MPI, tax laws are very important for income generation; however, these laws are currently unavailable and the MPI (Department of law) is conducting a study to review them. Dam Cascades related law and policies Decree on Establishment and Activities of River Basin Committee (No. 293/PM, ): There is no direct policy/regulation on the operation of dam cascades. This operation is handled by dam developers/operators on a contractual, case-by-case basis. However, the government has announced a new decree on the establishment and activities of the River Basin Committee (RBC), a non-permanent organization following IWRM principles in line with the draft national water resources policy, strategy, and action plan. It has a mandate to act as a water resource executive under the direction of the Lao National Mekong Committee (LNMC) for 11

18 management, development, conservation, rehabilitation, and use of water resources (called water resources management ) in river basins. Its key roles are to facilitate consultation and participation in the development process in river basin areas among all involved agencies, including government, private sector, communities and other involved parties, and, to ensure sustainable water resource and ecosystem use, and to apply mechanism for polluter pays principles. Currently (2010/2011), two RBCs have been established for the Nam Nguem (NNG) River Basin and Nam Theun-Nam Kading (NT-NKD) River Basin. Both rivers are heavily modified, with cascades of dams on the main rivers and their tributaries. This implies that the Decree on the establishment of RBCs has the mandate and jurisdiction to address dam cascades. For example, the Nam Nguem hydropower and mining forum was initiated to encourage engagement from investors, developers, donors, and international organizations. However, since these committees are new, they are still exploring and trying out different models from other countries; for NNG, the French model of river basin organization is under consideration. Water Governance and Valuation related law and policies Draft National Water Resource Policy, Strategy and Action Plan (1 Oct. 2010): This plan comprehensively outlines the implementation of an IWRM-based approach through coordinated, optimized, and sustainable development and use of water resources, protection of the environment, and improvement of social well-being. The policy will help update the law on water and water resources and other legislation; it will also help guide water-related aspects of national socioeconomic development planning and private sector investment management at the central and local levels. The plan also elaborates on strategies and action plans for the next five-year period (2011 to 2015), prepared in parallel with the policy. This policy clearly sets out five principles: a) water is a valuable national asset in which government has the central authority to regulate its management, development, use and protection; b) water must be conserved for basic human needs and the protection of ecosystems; c) water rights are separated from land rights insofar as landowners do not always have the right to use or control water adjacent to their property; d) water has economic, social, and environmental values, and e) decisionmaking on water resources management should be based on consultation and participation level. In parallel, the strategy outlines key focus areas and sets priority activities for 2011 to The action plan elaborates on the programs and activities in action with respect to timeframe and implementing agencies, consisting mainly of departments within WREA. As of 15 June 2011 (9 th National Assembly), the NA approved a new ministry to replace WREA, called the Ministry of Natural Resources and Environment. This ministry is currently under formation and will take time to become fully functional. The government and national assembly are expected to approve the Policy, Strategy and Action Plan by the end of The policy formation is supported by the ADB and AusAID through ADB-TA Livelihoods The Seventh National Socio-Economic Development Plan ( ) aims to lift the people of Lao PDR out of poverty and raise the country from least-developed status by Its approach is to carry out rural development and make the country green and clean, abundant in forests (including rain forests), water, and fresh air. Special focus will be placed on poor and remotely located kumbans 3 Updating the National Water Policy and Strategy (ADB TA 7013-LAO). 12

19 (village clusters) that have minimally benefitted from previous programs. Following this, efforts are focused on encouraging economic development alongside socio-cultural development, improving the political system and national defence and security, and alleviating the status of poor households and villages. These are starting points as per the four targets set by the Politburo (decree No 13/PM). The following are the targets for 2015: a. Reduce poverty by headcount to less than 19 percent of the population and by household to less than 11 percent of the total by 2015; b. Conduct participatory planning at the village, kumban, and district levels in order to implement poverty reduction projects effectively; c. Implement programs through the Poverty Development Fund to include three times the number of villages and kumbans currently included; d. Lift villages from their low development levels to become development villages according to four targets and the Prime Minister s Decree no. 13/PM. These targets include turning about 50 percent of the large-sized villages in a district into development villages, making at least one kumban in each district into a small town, and creating conditions for poor districts to get rid of abject poverty; e. Resettle displaced people by developing new agricultural lands and living facilities for them on a permanent basis, completely halt (and reverse) deforestation, and stop shifting cultivation; f. Village grouping, resettlement, and livelihoods cross-cutting issue: Continue kumban development and village grouping (and resettling) as anti-poverty and rural/human development approaches; g. Extend the road network to poor districts so as to permit travel throughout the year especially the districts of Dukjeing, Kaleuam, Samoua, Saisathan, Phonthong, and Saichamphon and connect all Kumbans and other priority areas by roads; h. Expand rural electrification to provide access to 80 percent of the households across the country and extend permanent electrical networks to all municipalities; i. Employment, youth, and poverty cross-cutting issue: While the proportion of people below the poverty line is reducing, the extent of hunger and food-security, especially seasonal food security, is a concern that the plan will aim to address. The government recognizes that growing food is not enough to meet food security targets; it is necessary for people to have entitlements to food year-round on a sustained basis; and j. Growth, distribution, safety nets, and gender cross-cutting issue: As growth in some sectors is not employment-generating (like mining and hydropower), and as these are the spearheads of development, the benefits of growth must reach the larger masses through other means. A development approach will be devised that benefits the poor, like the employment assurance program. Such an approach, when targeted at the poor (focused on women), can act as a safety net. The government strongly believes that hydropower development is an appropriate strategy that will greatly contribute to the GDP and poverty reduction through project-area development or through the resettlement of villages. National Growth and Poverty Eradication (NGPES): In line with national socioeconomic development strategies (NSEDS), the NGPES has dual objectives: enhancing growth and development, and reducing poverty. The NGPES defines economic growth, sociocultural development, and environmental preservation as the three pillars of Lao PDR s development policy, but implies strong emphasis on economic growth, as is evident from the GoL s dependency on private-sector financing. 13

20 The NGPES operational framework defines four sectors agriculture/forestry, education, health, and infrastructure (with a focus on rural roads) on which the government will concentrate. As stated in the NGPES, poverty is defined as the lack of ability to fulfill basic human needs; not having enough food, lacking adequate clothing, not having permanent housing, and lacking access to health, education, and transportation services (Instruction no. 010/PM, 25 June 2001). Most areas with an operational hydropower project will not be covered by the NGPES programs (both funding and technical support) as government believes substantial support and funds have already been provided to the affected communities through the project. But, the NGPES will serve as a guiding document for defining livelihoods and poverty for hydropower project development areas. Decree on EIA (2010): The Decree is applicable to all investment projects for which environmental impact assessments are required. There are two types of impact assessments: initial environmental examinations (IEE) are for small-scale and uncontroversial projects, while EIAs are for large, complicated, and controversial projects. For hydropower development projects below 15MW, IEEs are sufficient; any project beyond 15MW must conduct an EIA. The Decree provides guidelines on the environmental impact assessment process: investment project screening, selection, issuing certificate, management and monitoring, settlement of environmental and social disputes, and policies toward persons with outstanding compliance, and measures for violators. It also defines the duties of key agencies (WREA, local administration, project developers, projectaffected people, and other concerned agencies) in IEE, EIA, and other processes. Project developers are given total responsibility (including financial responsibilities) for all the steps in the EIA, including drafting the assessment, conducting consultations with relevant stakeholders at all levels (from local to national), implementing and monitoring the EIA, and reporting on compliance. This Decree also emphasizes project-affected people and other stakeholders' rights and duties when participating in investment project development. The consultation and participation process are as follows: First DRAFT of EIA: o Project developer, before submitting to Environmental and Social Impact Assessment Department (ESIAD), must hold public consultation with potential affected villagers to inform them about the issues; and propose solution. The developer must take the minutes of all the consultations (with signatures of village headman and villagers), and attach these to the draft EIA when submitting it to ESIAD/relevant agencies; and o Project developer must also hold a public consultation at district level, with district office, and relevant line agencies (both from provincial and district) as well as village headmen, elders group, Lao Women Union, Lao National Front Construction, to inform them about the issues and propose solutions. The developer will also take minutes of the meeting (with signatures of approving authority). Project developer shall submit to ESIAD, a set of documents, including Environmental Impact Assessment (EIA), Social Impact Assessment (SIA), Environmental Management Plan (EMP), and Resettlement Management Plan (RMP). The Department will review all the documents, and return them back to the developers for further revision. The biggest challenge faced by ESIAD is their capacity to review all the documents (EIA, SIA, EMP, Resettlement Action Plan [RAP]) that are prepared by experts with more than years of experience and provide constructive recommendation, because most of the reviewers are usually inexperienced new graduates from local universities. 14

21 Finally, a National Meeting must also be organized to inform the public of the project commencement. The meeting should be co-chaired by ministers of the relevant ministries and Provincial Governor. If there are any further comments on the project at this meeting, developers can decline/accept these for further improvement. The meeting also invites relevant agencies, and village representatives (village head, elderly group, women union). Project developers are also responsible for financing the monitoring activities of ministries or departments concerned (such as the MEM and the MONRE/WREA). In practice, ministries and departments concerned must submit a budget plan to the project developer each time to finance their monitoring teams. According to the EIA Decree, the departments concerned may make unannounced monitoring visits to sites, but, in practice, this has never happened. It is difficult not to provide notice before arrival, as prior and formal notification of any visit by government officials is an acceptable and common practice. This Decree was upgraded in 2010 from the previous Regulation on Environmental Impact Assessment 2000, with support from the Swedish International Development Agency (SIDA) through its Social and Environmental Management II Project (SEMII) Project. In 2006, when the regulation was reviewed, it was recommended to upgrade it to a Decree issued by the Prime Minister to add weight to the policy for greater compliance. When it was only a regulation, compliance was low, making enforcement difficult; at that time, the WREA was only the STEA, with less power than ministries. Although STEA was reformed to WREA in 2007, it still does not have the power of most ministries and provincial authorities, which makes it difficult for it to enforce or ensure compliance of the EIA. Decree on Compensation and Resettlement of People Affected by Development Projects (No. 192/PM, Sept. 2006): The decree defines principles, rules, and measures to mitigate adverse social impacts and to compensate for damages that result from involuntary acquisition or repossession of land and fixed or moveable assets, including changes in land use, and restriction of access to community or natural resources affecting community livelihood and income sources (Article 1). The decree gives the project owners the responsibility to: Address adverse social impacts (Article 4); Provide compensation (Article 6); Provide assistance during relocation and transition periods (Article 7); Provide adequate assistance in addition to other compensation for economic rehabilitation (Article 8); Undertake restoration and repair community facilities and infrastructures (Article 9); Take responsibility for resettlement site development and mitigate adverse impacts (Article 10); Consider Lao culture and practices (Article 11); Conduct public participation and consultation (Article 12); Establish grievance redressal mechanisms (Article 13); Prepare resettlement costs and budgets (Article 14); Provide reporting and documentation to responsible government authorities for consideration and recommendation (Article 15); and Make adequate arrangements for monitoring of the implementation of the compensation, resettlement, and rehabilitation measures (Article 16). The Decree also gives ministries concerned the rights and responsibilities to either reward or sanction project owners based on their compliance of the legislation; however it does not clearly provide any guidance or procedures on how to monitor and evaluate the project owners conduct in meeting their obligations. 15

22 The Decree obliges project owners to prepare Initial Social Assessment (ISA)/land and assets acquisition assessment; Social Impact Assessment (SIA); Land Acquisition and Compensation Report; Resettlement Plan; and Ethnic Minority Development Plan, and submit these to the government agency (STEA) for approval (Article 15). It does not elaborate on the process of approval in terms of criteria/guidelines for approval, regular monitoring, and inspection of conducted activities. In addition, the decree s definition of those eligible for compensation does not include community living downstream of the reservoir/dam in terms of potential project impacts to downstream area (Suhardiman, A. de Silva, S. Carew-Reid, J. (2011). In practice, ESIA Department (MONRE) is responsible for implementing this Decree, but the current debate within the government is that ESIA Division/Department only has expertise in the area of natural resource and environment. In this case, their mandate and authority for implementing and monitoring social impacts is weak and not that relevant. At the moment, the government has not decided on which ministries should take full responsibility for the social development part. This is also why the government has decided to establish the Resettlement Committees (RC) and Resettlement Management Unit (RMU) at the Provincial/District levels for all the Dam Projects (and make it as compulsory part of the Concession Agreement). For example, in the case of THXP, RC is responsible for reviewing and approving of the Resettlement Action Plan for the Theun-Hinboun Expansion Project (THXP), providing organizational support and direction for the RMU; liaising with GoL organization on national, provincial, and district levels; ensuring compliance with GoL Laws, regulation and policy; liaising with THXP regarding GoL concerns and priorities; and organizing national-level consultation (Bolikhamxay Province, Lao PDR, 2010). Regulations for Implementing Decree 192/PM on Compensation and Resettlement of People Affected by Development Projects (STEA, 2005): In line with the decree on compensation and resettlement of people affected by a development project, the regulations link resettlement procedures with the project cycle (Article 3). See Table 3. The regulations outline the procedure for resettlement and compensation and the steps the project owners have to take to ensure compliance with the existing regulations and procedures, during each stage of project development (from identification, pre-feasibility, feasibility study, detailed design, construction and operation). As stated in the regulations: To implement each step of the project cycle and resettlement process, the project owner will properly and strictly comply with the provisions determined in the Technical Guidelines on Compensation and Resettlement (STEA, 2006). Table 3 Project cycle and resettlement procedures. Project cycle Identification Pre-feasibility study Feasibility study Detailed study Resettlement process Screening/Initial Social Assessment(ISA)/Terms of Reference (ToR) for Social Impact Assessment (SIA) Redefine ToR/assess options for minimizing adverse impacts/selection of suitable design option SIA/Socio-Economic Survey (SES)/Inventory of Losses (IOL)/Resettlement Plan (RP)/ Ethnic Minority Development Plan (EMDP) Updated/final RP/EMDP Construction/operation RP/EMDP implementation and monitoring Source: STEA

23 These regulations give project owners the central role in formulating and implementing resettlement plans, highlighting how the government perceives project owners as ad-hoc decision makers in hydropower projects. Giving project owners full responsibility for conducting resettlement processes raises potential conflicts of interest that may occur when identifying potential negative impacts, formulating mitigation/resettlement plans, implementing them, and monitoring their implementation. Since project owners are interested in developing hydropower dams for profit, they tend to downplay potential negative impacts from the start, minimize the cost of resettlement, and overlook operational impacts on existing ecosystems. The way project owners include public participation, information disclosure, and consultation into the resettlement process is another issue. The regulations highlight the potential role of local authorities in encouraging more transparent and deliberative decision-making through community participation and active involvement in resettlement planning and implementation. According to the new EIA Decree (2010), Article 14, social management and monitoring plans include the following: The social management and monitoring plan must be consistent with the Decree and Regulations on Compensation and Resettlement of project-affected people by development projects and consists of a resettlement plan for the project-affected people by the investment project, a social development plan, and a plan to restore living condition, paying particular attention to the healthcare of those who are affected etc; and The project developer must strictly implement the social management and monitoring plan approved by the Water Resources and Environment Administration (now MONRE), in coordination with the local administration concerned, particularly the Committee of Resettlement and Restoration of Living Condition. In case it assigns the task to another company, it must incorporate the terms and conditions of the plan into the contract to ensure that the sub-contractor implements the plan comprehensively. As per the Resettlement and Restoration of Living Condition Committees (Article 28, EIA Decree 2010), the Government appoints a Provincial or Capital Resettlement and Restoration of Living Condition Committee which has the following authority and duties: To lead and give directions, supervise, and monitor the resettlement and restoration of living condition of the project-affected people located in its province or prefecture; in compliance with the Social Management and Monitoring Plan (SMMP); To consider petitions filed by the people, in close coordination with the project developer, the agencies concerned and report to the government regularly; and This committee functions by relying on the budget allocated from the investment project, the State budget and other sources. 4.0 INSTITUTIONS AND ACTORS In the context of Lao PDR, the best way to understand water sector decision-making and the key actors involved is through understanding the IPP project approval, implementation, and monitoring processes ( Figure 2). In the hydropower development sector, two ministries are responsible for concession proposals. The Ministry of Planning and Investment (MPI), in particular the Investment Promotion Department (IPD), the Law Department (LD), and the Research Department (RD), are responsible for registering, 17

24 reviewing, and examining investment proposals and submitting them to the Prime Minister s Office (PMO) for consideration and approval. Under the MEM, the DEB (formerly known as Department of Energy Promotion and Development [DEPD]) is responsible for overseeing private investment initiatives and hydropower project development while the DEPP (formerly known as DOE) plays a more strategic and technical role, doing sector planning and policies as well as examining technical feasibility studies, project designs, advocacy, monitoring and coordinating with relevant sectors. DEPP is also a representative of MEM to witness the signing of the MOU relevant to electricity development projects. At the Mekong regional levels, DEPP is designated as the focal point for MRC database and a member of joint technical review group and advisory committee of MRC s Initiative on Sustainable Hydropower (ISH). For the planning/preparation stages of the investment proposal: The MPI collects and registers proposals for public investment from provincial sector departments; The IPD, Department of Energy Policy and Planning (DEPP) (formerly known as DOE) and Department of Energy Business (DEB) together review investment proposals for their technical feasibility and the developers ability to raise the necessary financing, and then make recommendations to their ministers, the MPI, and the government. If the project meets the Electricity Law and relevant policy and if it has sufficient investment funds, the IPD (or, in some cases, the DEB) will report to the PMO for consideration and approval; and Once approved by government, the MPI (acting on behalf of the government) will sign MOU for further investigation by project developers. The MPI is also delegated by the government to sign MOUs, PDAs, and CAs as they emerge, subject to government and National Assembly approval of the investment proposal. A Memorandum of Understanding (MOU) is signed with the developer in order to carry out technical feasibility studies, which can often be costly and therefore require some assurance that the developer can proceed if the feasibility studies are satisfactory. MONRE becomes involved here in reviewing EIA, SIA/SES/IOL, Environmental Monitoring and Management Plan, SMMP RAP, and Ethnic Minority Development Plan (EMDP). MONRE is also responsible for distributing EIA and related assessment and plans to ministries concerned for further reviews (e.g., Ministry of Agriculture and Forestry, Ministry of Public Work and Transport, Ministry of Health, Ministry of Education, Lao National Front for Construction, Ministry of Labor and Social Welfare ). This step is followed by the granting of a Project Development Agreement (PDA), which gives exclusive mandate to the developer to negotiate with power buyers. It is at this stage that the benefit to the Lao Government is defined. According to MEM, PDA is not required by the Lao Government, but is by and large required and requested for by the Project Developer as evidence for negotiating with the power buyers and lenders. During the Concession Agreement negotiations, the DEB usually takes the lead in forming and heading a taskforce of representatives from other line ministries (including the MOF, the MPI, the MONRE and sometimes the Ministry of Justice for major agreements). The DEB attempts to ensure that each concession agreement is harmonized with other existing projects, with modifications related to the project at hand. The MONRE attempts to ensure an appropriate social and environmental budget and mitigation measures. National Assembly approval must also be sought for large and controversial projects or for small projects that cover national protected areas, areas of cultural importance, or special zones. At the implementation/operational steps, project developers are held responsible and accountable for construction, social and environmental implementation, and compliance. They must arrange public consultations with the participation of all stakeholders (projected-affected people, local 18

25 governments from different line agencies, and other stakeholders) and report on self-monitoring activities. According to the EIA Decree, there are different levels and different types of monitoring requirements: monitoring by project developers, monitoring by government agencies, and monitoring by external bodies. The most common one is monitoring by project developers, and monitoring by government agencies. The latter involves regular monitoring by provincial and district administration, and periodic inspection and monitoring by Department of Electricity and ESIA Department. Levels of monitoring vary from project to project, in which some even have an international panel of experts. Procedures for monitoring by external bodies for example, oversight by the National Assembly, inspection by the State Inspection Administration, auditing by the National Audit Administration, and monitoring by the Panel of Experts (domestic, not foreign) have not been laid down. 19

26 Figure 2 Steps in Hydropower Power Concession Awards, Approval and Implementation and Monitoring Processes in Lao PDR. (Julia Fraser, based on MacGeorge et al. 2010; WB 2009; and van den Toorn 2009, with inputs from Jie Tang and William Rex 2010). Steps Key Actors/ GoL Agencies 1 Investment Proposal MPI: collects, accepts, registers & reviews investment proposal, in coordination with MEM for its technical and financial feasibility MEM: Assesses the technical feasibility of the proposal & ability of the developer to carry out ESIA and raise private financing PMO: endorses the investment proposal based on MPI and MEM's recommendation MPI (DPI) MEM (DEB, DEPP) PMO/Government 2 MOU (Feasibility Study) EIA (SIA/RAP/ EMP) PDA MEM: Provides technical proposal MPI (with technical back-up from MEM) grants Memorandum of Understanding (MOU) to developer to carry out technical feasibility studies MONRE/WREA: Reviews Env. and Social Impact Assessment MPI (with technical back-up from MEM) grants Development Agreement (PDA) - to give exclusive mandate to developer to negotiate power purchase with potential buyer. PMO: endorses/approves the investment proposal based on MPI, MEM, MONRE proposed assessment and recommendation MPI (DL+DR) MEM (DEB, DEPP) EDL/LHEC MOF MONRE/WREA (ESIAD) PMO/Government 3 Concession Agreement (CA) MPI & MEM: Participate in negotiation and draft Concession Agreement MPI & MEM: Ensure harmonization with existing Agreements MONRE/WREA: Ensure best proposal for Social and Environmental Impact MPI: Grants Concession Agreement, subject to Provincial Government, PMO/Government and National Assembly's Approval BOT - Build-Own-Transfer is the common agreement type MPI (DPI) MEM (DEB, DEPP) MONRE/WREA (ESIAD) MOF Province 4 Implementation Implementation mainly undertaken and led by Project Developers for both infrastructure and social and environmental components Local Government provides overall support, sets up institution for resettlement and grievance processes, and monitoring of progress. Other line ministries/agencies at the provincial and district levels are being mobilized or appointed to support the Project Developer in accordance with their work plan, but some are on an ad-hoc basis, particularly on the social component. Central government provides overall oversight with occasional supervision and monitoring by relevant ministries/agencies. Project Developer Local Government: (Province + District authority) Other line agencies at provincial & district levels: MEM, MAF, LNMA, MOH, MOES, MLSW, MICT, MPTC, LWU, Lao Youth Union [LYU], LNFC) 5 Monitoring and Evaluation MEM: Monitors projects under negotiation, construction, and operation MONRE/WREA: Periodically monitors social and environmental compliance Provinces and districts: Regularly monitors the infrastructure development, social and environmental compliance, and other security matters in the project areas. MEM (DEB) MONRE (ESIAD) Province + District Project Developers External (PE, others) 20

27 4.1 MULTI-LATERAL AGENCIES (ADB, WORLD BANK, MRC) World Bank and Asian Development Bank (ADB) Multilateral agencies, such as the World Bank and the Asian Development Bank, and bilateral agencies continue to play a key role in the development of hydropower in the Mekong Region (Middleton, 2009). They have previously influenced the reorientation of national policies in favor of private-sector investment and have provided technical studies, advice, and financing to shape the region s strategic directions in electricity development. For example, the ADB funded the Se Kong-Se San and Nam Theun River Basins Hydropower Development Study, which commenced in 1997 and was completed in September 1998, and proposed at least six hydropower projects for further study (Graecen and Palettu, 2007). With increased private-sector involvement in the hydropower sector, demand for conditionality-tied ADB and World Bank loans has declined. As a result, the role of these institutions has changed; they have committed to the delivery of international best practices for the region and cooperation initiatives (Middleton et al. 2009). The World Bank and the ADB s environmental and social policies and their commitments to public participation have been recognized as international best practices; however, in recent years, they have been deemed inadequate to mitigate the impacts of large dams. Existing hydropower projects supported by the ADB and the World Bank, including the Theun- Hinboun and Nam Song dams in Lao PDR and the Pak Mun Dam in Thailand, have failed to mitigate the impacts of the projects and to restore people s livelihoods. The recent Nam Theun 2 hydropower project in Laos, supported by the World Bank and the ADB, has restored the credibility of their environmental and social impacts assessment and management practices; however, the project s long-term impacts on affected communities remain to be seen. Since 1996, the ADB has supported the government in introducing integrated water resources management (IWRM) approaches in Lao PDR. In 2008, the ADB initiated TA-7013-Lao: Updating the National Water Policy and Strategy, and later in 2009, AusAID co-financed a sum of USD 300,000, making it a USD 1.3-million TA project. Funding was provided to support the newly established Water Resource and Environment Administration (WREA), established in 2007, to better streamline agencies and modernize the water sector in Lao PDR under the mandate of IWRM (ADB website, ). As a result of this TA, the Water Resource Policy Framework (National Water Resource Policy, Strategy and Action Plan) was prepared and completed. It is now being used as a preliminary water resource policy (ADB website, ) while awaiting formal approval of the government and National Assembly, expected by the end of The ADB has provided a USD 20-million loan to the government of Laos and a USD 50-million loan and USD 50-million guarantee to the Nam Theun 2 Power Company (NTPC), a French-Thai-Lao consortium that created the hydropower complex (ADB, ). These loans and guarantee are based on government assurance that income from NT2 will be used to lift Lao citizens elsewhere in the country out of poverty, largely through its existing anti-poverty platform of public spending and reforms (ADB, ). The ADB also helped to monitor the displacement of villagers in NT2, and it continues to closely monitor their livelihood restoration. The World Bank funded the Lao Environment and Social (LEnS) Project 4, the largest project currently implemented by the Environmental Protection Fund (EPF) 5. The World Bank also supports the 4 Lao Environment and Social (LEnS) Project aims at building the management and operation capacity of the EPF for approving, funding, monitoring and evaluating sub-projects, enabling the EPF to utilize NT2 revenues in an efficient and cost-effective manner. 21

28 hydropower sector through recently approved Technical Assistance for Capacity Building in the Hydropower and Mining Sectors Project (H539-LA) (Lao PDR Development Report by WB, 2010): In particular, the project will finance training and continuing education for government staff as well as support advanced formal education at the national university of Laos and selected technical colleges to develop the next generation of hydropower engineers and other skilled sector professionals. It will also assist the government to move away from the present opportunistic and enclave nature of the investments to more systematic sector planning with reviewing of hydropower economic and financial implications, updating and applying least-cost expansion planning, and establishing integrated river basin planning practice besides addressing cumulative impacts of river basin development. Finally, it will refine the National Policy on Environmental and Social Sustainability of the Hydropower Sector (NPSH) in line with the new ESIA Decree and the recent institutional restructuring as well as build capacity of MEM, for enforcement and monitoring of compliance with the NPSH and the Compensation and Resettlement Decree. - Lao PDR Development Report by WB, 2010 These multilateral banks provide loans and guarantees to support projects, but offers are based on government assurance that project income from the Project (for example NT2, where ADB provided USD 20 M loan to GoL and USD 50 M guarantee to NTPC) will be used to lift Lao citizens elsewhere in the country out of poverty (or other conditions depending on multilateral policy and agreement between GoL and the banks) (ADB 2011). Multilateral organizations (e.g., ADB) also closely monitor project implementation (particularly, the social/environmental component and its compliance) to ensure good progress and ensure that their corporate reputation is well maintained. These multilateral organizations have also provided grants, loans, and technical assistance to relevant ministries/department to support policy implementation and capacity enhancement through the Environment Protection Fund for: i. Environmental and social monitoring and policy implementation support (provincial WREA in Savannakhet, Khammouane, and Bolikhamxay were the recipients); ii. Integrated river basin management (WREA, now MONRE, was the recipient); iii. Hydropower sector policy support (MEM DOE, now changed to DEPP, was the recipient); iv. Social safeguards management (resettlement policy support) (WREA (MONRE) ESIAD was the recipient); and v. Environmental education awareness (the National University of Laos was the recipient). The WB provided a grant to support the implementation of the LEnS Project (of USD 7 million) as part of the NT2, while ADB provided an endowment fund (of USD5.8 million) (Table 4). 5 The EPF was established to be a financially and administratively autonomous organization under the Lao laws, aiming at strengthening environmental protection, sustainable natural resources management, biodiversity conservation and community development in the Lao PDR. 22

29 Table 4 Revenue of Environmental Protection Fund for Source: Report on the EPF Operation for , EPF Mekong River Commission (MRC) The MRC is a cooperation agreement between four member countries (Cambodia, Lao PDR, Thailand, and Vietnam) through the 1995 Mekong Agreement on the Cooperation for Sustainable Development of the Mekong River Basin (the 1995 Mekong Agreement). The Agreement also sets out a framework for achieving the strategic objectives of IWRM, recognizing that development decisions by sector agencies in the sovereign riparian countries of the Mekong River Basin may have trans-boundary consequences and that the MRC, as an inter-governmental river basin organization, is reliant on the endorsement of its approaches by its member countries. In addition, the MRC is fully committed to an IWRM-based approach, in which the IWRM-based Basin Development Strategy, approved in December 2010, will have a significant influence on the implementation of the MRC's new strategic direction in the next five years ( ) (MRC Strategic Plan 2011). When MRC was only a Mekong Committee, which was established under the auspices of the United Nations in 1957, known as inter-governmental agency for Coordination of Investigations of the Lower Mekong Basin (Graecen and Palettu 2007; MRC 2011), its mission was the comprehensive development of the water resources of the Lower Mekong Basin, including its mainstream and tributaries (United Nations 1963; Graecen and Palettu 2007). Before the Mekong Committee, widespread visions of large-scale hydropower development in the region began taking root during the Cold War, shaped by US, Soviet, and Chinese planners (Graecen and Palettu, 2007). Starting in the 1950s, American economic advisors drew up plans for substantial regional infrastructure development in Thailand, Laos, Cambodia, and Vietnam. Seven huge hydroelectric dams were planned, which would have carved the Mekong River into a series of reservoirs over 2,000 kilometers long (Hirsch and Warren 1998, Graecen and Palettu 2007). During the 1980s, most of the long-range aspects of the Mekong scheme and its key basin-wide projects were abandoned (Hirsch and Warren 1998, Graecen and Palettu 2007). In 1994, the Mekong Secretariat issued a study of nine proposed run-of-the-river dams for the Mekong mainstream. However, the plans were shelved following the opposition by non-governmental organizations (Imhof 2005; Graecen and Palettu 2007). Mainstream hydropower development is now back again after a long pause. The Government of Laos (key national leaders), as well as key leaders in Thailand and Vietnam working together with project developers, international financial institutions (IFIs), bilateral organizations, and private financiers place high hopes on the future revenue streams generated by hydropower export from Laos to wealthier Thailand and Vietnam. GoL's aim is to become the "Battery of Asia, a term used by 23

30 Thailand's former Prime Minister Thaksin Shinawatra referring to future hydropower development plans in Laos (Associated Press 2005, Petty 2005, Graecen and Palettu 2007). With escalating interest in hydropower development in the LMB, the MRC approach is to help Member Countries understand the long term implications of the proposed dam construction, and balance the benefits, impacts and risks. The strategic environmental assessment (SEA) on mainstream dam proposals concluded in 2010 demonstrated the central role that MRC can play in this discussion by facilitating dialogue among the major stakeholders, including Governments, civil society and the private sector, and introducing a more holistic approach to the assessment of risks and opportunities. This role will continue and intensify in the coming years and also involve application of sustainability assessment tools developed recently by MRC and its partners. - MRC Strategic Plan United Nations Development Program (UNDP) Through the Poverty-Environment Initiative, UNDP aims to build the long-term capacity of the government to integrate environmental concerns into national development plans and poverty reduction strategies and their implementation. It also aims to improve the longer-term ability of natural and environment resources to support livelihoods and reduce poverty, through the environment project in Lao PDR (Evaluation of UNDP Lao PDR Environment Programme Final Draft, UNDP Lao PDR 2009). It will achieve these aims by: Strengthening poverty-environment linkages in the 7 th NSEDP in a manner that places environmental sustainability at the core of the government s development planning practices; Supporting the Investment Promotion Department and provincial authorities to manage investments in a manner that seeks to maximize social benefits and minimize environmental impacts; Supporting the WREA to strengthen Environmental Social Impact Assessment (ESIA) processes; and Targeting the National Assembly to enhance its awareness of poverty-environment issues and to strengthen the capacities of National Assembly members to actively integrate poverty-environment considerations when reviewing policies and legislation. 4.2 BILATERAL DONORS The list of donors in Laos is long. Japan, France, and Sweden are top three in commitments in (Table 5). Bilateral donors associated with water resources and hydropowers include Australia, France, Sweden, Finland, Belgium, and Germany. 24

31 Table 5 Top donors (bilateral and multilateral) in Lao PDR over the period 2005 to 2007(commitments in current USD millions). Source: Mc Carty and Julian 2009 AusAID's delivery strategy (DS) 6 outlines its approach to implementing the AusAID Mekong Water Resources Program. This strategy was created following the Australian Mekong Water Resources Strategy (AMWRS) that forms part of the Australian Greater Mekong Sub-region Strategy The AMWRS identified the Mekong River Commission (MRC), the World Bank, and Asian Development Bank (ADB) as key partners to work with governments. Originally, the strategy did not mention the important role of non-state actors in the political economy of water resources development. The new Strategy has broadened its scope to also support non-state actors 7. 6 AusAID Mekong Water Resources Program Delivery Strategy , March Non-state actors: science, advocacy, civil society and the private sector. 25

32 AusAID's contribution will address the following important issues in the Mekong (including Lao PDR): Capacity building: technical and social capacity building for IWRM; Environmental change: climate and other environmental change adaptation; Food security: avoiding food insecurity for vulnerable and marginalized people; Hydropower assessment: comprehensive assessment of options, including alternatives; Transboundary engagement: more constructive water-related engagement between all six countries of the region; and Corporate social responsibility: encouraging private-sector leadership and accountability. This DS specifically supports the Lao IWRM Support Program, working with the Water Resources Environment Administration (WREA) and the Ministry of Energy and Mines (MEM), ADB, the World Bank, and, likely, Finland. It was initiated through TA 7013-LAO, co-financed with the ADB. AusAID has also supported a number of MRC programs, including: The Integrated Capacity Building Program (ICBP), including Phase 3 of the MRC cooperation with the Murray Darling Basin Authority (MDBA) and New Zealand; The Mekong Integrated Water Resources Management (M-IWRM) Support Program (including Phase 2 of the Lower Mekong water use negotiations), with the World Bank; and The Climate Change Adaptation Initiative (CCAI), possibly with U.S. Agency for International Development and others. The Agence Francaise de Developpement (AFD) provided a USD 3.8 million (or 17 percent) grant, cofinanced with the ADB for the Lao: Nam Ngum River Basin Development Sector Project 8 (ADB 2002). The Swedish International Development Cooperation Agency (SIDA) is supporting environmental management in Lao PDR through the Strengthening Environmental Management Project. The project s first phase (SEM 1) took place from and the second phase (SEM II) from The SEM II Project is funded by SEK 64.9 million, with contributions from the Lao government worth SEK 8.5 million of which SEK 1.5 million is in cash. The host agency for the SEM II Project is the Department of Environment (DoE) located within the Water Resources and Environment Administration (WREA). The agreement between WREA and Sida was signed on 9 June, The ultimate goal is strong environmental management to support national goals of sustainable development and poverty eradication. By ensuring that economic development is environmentally and socially sustainable, the project is seeking to make a direct contribution to poverty reduction (Lazarus and Slunge 2010). The project aims to fulfill this purpose by achieving six results or outputs, which have been prioritized by WREA after extensive stakeholder consultations, as follows (Lazarus and Slunge 2010): Environmental Law, Policy, and Action Strategies; Environmental Management and Impact Assessment and Environmental Monitoring; WREA Capacity and Staff Development; Environmental Education and Awareness; Environmental Reporting and Data Dissemination; and Support to the provinces. 8 ADB Project Administration Memorandum, LAO: Nam Ngum River Basin Development Sector Project,

33 The government of Finland awarded USD 2.9 million to the four countries of the Lower Mekong Basin to help develop the hydropower program of the Mekong River Commission (MRC). Part of the fund was for training 40 young professionals at MRC over four years as part of the MRC capacity building (HydroWorld.com 2011). The aim of the Belgium cooperation policy in Laos is poverty reduction to contribute to the objective of the Lao government: to graduate out of the list of Least Developed Countries by In 2002, Belgium pledged 15 million for its direct bilateral program for the period Priority sectors for cooperation include water infrastructure. Supplementary Capacity Building to the Lao National Mekong Committee the project aims at significantly enhancing LNMC staff skills for communication, management and technical issues, including riverbank erosion control. (Office of the UN Resident Coordinator January 2006). Lao-German Development Cooperation is more than 40 years old. The cooperation has concentrated on two priority areas to raise efficiency and relevance with regard to the overall goal of poverty reduction: 1) rural development; and 2) human resources development. Bilateral German Development Cooperation is implemented mainly by KfW (German Bank for Reconstruction and Development), GTZ (German Technical Cooperation), DED (German Development Service) and InWEnt (Institute for Training and Development). Furthermore, Germany supports activities from various non-governmental organizations (NGOs) and public-private-partnerships. It also contributes to Lao-related programs of multilateral institutions such as MRC. (Office of the UN Resident Coordinator 2006). 4.3 PRIVATE DEVELOPERS/SECTOR Private-sector investment is playing an increasingly important role in hydropower development in the Mekong Region. Following the Asian financial crisis, new political relationships have emerged in the region. Private-sector hydropower developers from Thailand, Vietnam, China, Malaysia, and Russia have begun to participate in plans to develop water resources in the mainstream Mekong River and its tributary systems. In contrast to previous investment regimes of multilateral funding agencies and western hydropower companies, which were often associated with various conditions and environmental and social commitments, revenue-driven private sector involvement has been well-received by the governments of the LMB countries. Major investors in hydropower in Lao PDR include multilateral development agencies such as the World Bank and Asian Development Bank (ADB); international companies, such as Electricite de France (EDF), China North Industries Corporation (Norinco), Sinohydro, and Russian State Oil; companies from neighboring countries, such as Chor Kan Chang (Thailand); and banks from other countries, such as the Export Import Bank of China (Exim) and Thailand s Kasikorn Bank (Poverty- Environment Initiative) (Lao PDR Issues Brief, UNDP 2010). See Appendix 3 for the list of hydropower development projects from 2000 to 2011, at different stages of IPP implementation processes (feasibility studies, MOU, PDA, CA). 4.4 STATE ACTORS In Lao PDR, the key state actors involved in determining water resources development are the Ministry of Planning and Investment (MPI), the Ministry of Energy and Mines, and the Ministry of Natural Resources and Environment (MONRE). While each ministry ideally has its own supporting role, their responsibilities sometimes overlap. The MPI, the MEM, and the MONRE all interact with private sectors at different stages of the IPP implementation processes, as the private sector has total responsibility for getting the project registered, conducting FSs, drafting assessments, getting the EIAs/SIAs certified, and carrying out 27

34 public consultations from villages to regional and national levels in accordance with relevant legislations. 4.5 FUNCTIONAL ANALYSIS OF RELEVANT ACTORS Government Agencies Many governmental organizations are involved in water resources and livelihoods related issues. Table 6 provides some information about the organizations, their mandate/functions and brief analysis of their strengths and weaknesses in the areas of water resources, water valuation and livelihoods-related issues. 28

35 Table 6 Government agencies related to livelihoods, water valuation and dam cascades. Actors Mandate/function Water Dam Livelihoods valuation Cascades Strengths/weaknesses National Assembly (NA) Final reviewer and approval of investment/development project. No No No NA hotline is now available for all citizens to call in and convey their concerns directly to the NA. This mechanism is becoming increasingly popular as people realize the importance of communicating social, environmental and other concerns directly to the members of the NA and the Government for action. Government (PMO) Review and approve the investment/development project Ministry of Planning and Investment (MPI) Macro-policy development. Promote and facilitate investment processes and sign the agreements on behalf of the government. No No No Ministry of Energy and Mines (MEM) MONRE/WREA (Central) Energy sector development, promotion, implementation and monitoring. Water resource policy development and implementation. Review, certify and monitor Social and Environment Impact Assessment (SEIA). Yes Yes Yes At the Provincial and District Levels, Provincial Energy and Mines officer is appointed as Manager of the Resettlement Management Unit (RMU) that works closely with the Company to coordinate and implement the resettlement, social and environmental plans/activities. The department plays a crucial role in the grievance processes. It reports vertically to MEM, and cross-sectorally to Governor/Vice-Governor and other ministries through the resettlement Committee mechanisms. Yes Yes No MONRE/WREA certifies the Social Impact Assessment/Social Action Plan, but MONRE/WREA is not a direct social development agency. MONRE/WREA does not have full capacity to assess and implement the Social Action Plan, nor the Environmental Action Plan as their capacity is still very limited. Social Impact Assessment is the most difficult document to review, understand and provide appropriate comments on. 29

36 Table 6 (Cont d.) Actors Mandate/function Water Dam Livelihoods Strengths/weaknesses valuation Cascades MAF (Provincial/ district) Local/Project level: Watershed management (protection of forests) to ensure supply of water resources to the reservoir. Livelihood improvement for the villagers living in the project areas and those who are living in resettlement areas by making new livelihood plans for the area. MAF role became more viable and involved after the NT2 experience. Yes No No MAF's role during the IPP approval processes is limited. During the IPP approval and implementation (at planning stages), MAF hardly had any role, and was only involved on need basis. MAF's role became more important as it got more engaged in the investment project, after the experience of NT2, mainly to work closely with the company on the watershed management plan and resettlement or livelihood plans for the affected communities (both resettlers and those living within the watershed/ reservoir areas). Electricite du Laos (EDL) State-owned enterprises (found in 1959 under MEM). Owns and operates the main generation, transmission, and distribution assets in Lao PDR. Acts as government's shareholder in the case of IPP projects. Yes No no Lao Holding State enterprise Ministry of Finance RBCs State-owned enterprises (established in 2005 for NT2, under MOF). Hold government's 25percent share in the NT2 project, and have been designated as the government's agent for six other hydro projects and one non-hydro project. Sets the ceiling for overall capital spending as a way to preserve macro-fiscal stability. Introduce the IWRM approach. Promote cross-sectoral coordination. No No No No No No No Yes Yes RBCs have full mandate for cross-sectoral coordination, planning and implementation of IWRM. However, as they're new, they're in the process of building their institutional capacities and find appropriate working model for RBM in Lao PDR. The two newly established RBCs (Nam Ngum and NT-NKD) are still disconnected from overall development projects in their Basin. The RBC setup is very much top-down, with appointment of staff from central MONRE/WREA deputed to lead them. 30

37 Table 6 (Cont d.) Actors Mandate/function Livelihoods Water valuation Dam Cascades Strengths/weaknesses MOH (Provincial/ district) Local/Project level: District Heath Office (DHO) works closely with Theun-Hinboun Power Company Ltd(THPC). Health specialists to carry out resettler health programs, and ensure preventive health measures, besides monitoring and training local health workers to fulfill the needs of the affected communities. Provide adequate staffing for new and refurbished health care centers. Yes No No MOE (Provincial/ district) Lao Women Union (LWU) (Provincial/ district) Youth org. (Provincial/ district) Lao National Front (Provincial/ district) Local/Project level: District Education Office (DEO) to work closely with THPC education specialist to carry out resettler education programs (e.g., teacher trainings). Supply additional teachers when required, and upgrade teaching staff when needed. Local/Project level: Mobilizing and representing the interests of women. Working with company's consultation teams for women's health (maternal and child health, sanitation and birth control) and development projects like savings and credit groups and literacy programs. Ensure the inclusion of women in development initiatives. Upgrade the skill and management capacities of the existing LWU members. Member of village LWU can become village facilitator. Local/Project level: Intermittent input in the consultation process, youth mobilization, income generation programs and representative health campaigns. Member of village youth organization can become village facilitator. Local/Project level: Mobilization of communities for collective work projects, and ensure that all groups, including ethnic minorities, are involved in activities. Training of villager leaders, monitoring and consultation work as required. Yes No No Yes No No Yes No No Yes 31

38 Table 6 (Cont d.) Actors Mandate/function Livelihoods Water Dam valuation Cascades Min. of info. Local/Project level: Responsible for cultural Yes No No and culture issues, and for working with minority ethnic groups in the project area in cooperation with the consultation teams and minority specialist. During the relocation, cultural considerations, such as rituals for moving houses, relocating spirits and cemeteries and physical cultural resources, will need to be taken into account. GoL responsible for 'chance finds' and archaeological studies. Coordinates with national department of archaeology and museums, and MIC in Vientiane regarding important cultural issues and items discovered before and during construction. Ministry of communication, post, transport and construction Governor's office and administrative staff Local/Project level: intermittently involved in the planning stages and for providing staff to support the company's infrastructure teams in the implementation of roads, buildings, rural electrification, bridges, water supply and other infrastructure projects related to resettlement. Local/Project level: Key contact and coordinating person at the district levels. Participation in planning and coordination meetings on a regular basis. Works closely with the THPC Liaison Officer to ensure qualified district staff are available for project activities. Manages and tracks funds provided by THPC for district staff and regular reporting. Yes Yes No No Strengths/weaknesses 32

39 4.5.2 Administrative (Decision Making and Policy Development) Processes The flowchart (! ก ) is based on the Theun-Hinboun Expansion Project's institutional rrangement and on interviews with villagers and government officers at different levels: village (resettlement/affected villages), district, provincial, and central (for further details on each levels, see ). The flowcharts illustrate hierarchical, coordination, and functional links based on the Theun-Hinboun Expansion Project (THXPC) project arrangement, from the village to central levels. The government also recently approved a new decree on developing a small village into a village development unit and a bigger village into a small city in the rural areas (03/ກມສພມ), Vientiane, 30 May The rationale is to eradicate poverty and improve people s livelihoods in the rural areas. This means the village will become the fundamental unit for politics, economics, society, culture, security and peacekeeping. This new decree will hopefully guide both public and private sectors in engaging people at the lowest levels (or the communities) in the development process Village Level In Lao PDR, village administration comprises a head of the village, deputy heads, units (with heads of unit), an elder group, a women's group, a youth group, village militia, village police, and other groups (depending on the condition of each village). The village administrative structure is formally set up, approved, overseen, and monitored by district government. However, all members (including village headmen) are non-governmental staff. In most cases, village headmen are party members, but are not employed as government officials. Village headmen are responsible for keeping records of individual and household activities and for all matters happening in the village. They report directly to the district office. Each village administration is structured as determined by the socioeconomic situation of that village. Some villages have far more functions/entities than others, but they fundamentally comprise an elders group; a women's union; a youth organization; a village police; village military; and forestry, agriculture, education, health, transportation, and communication groups. An informal structure, commonly known as Neo Home or elderly group, is highly respected in village society. The group consists of elderly skilled and experienced individuals and/or well-known and respected people whose ancestors have passed on customary laws that link the cultural, spiritual, and traditional practices of the village and the country. This group of elders plays an important role in many aspects of village life, particularly in grievances. Villagers first raise issues (both personal and professional) to the elders for reconciliation; if they cannot be resolved, they are forwarded to the village headman to process in accordance with the law. In some cases, the reverse is true, wherein issues are raised to the village chief who directs them to the elders. In other cases, issues require a joint effort of the village administration and the elder group, together with other mass organizations such as the women s union and the youth union, as appropriate. To a large extent, these key groups participate in project-related activities, such as resettlement, village planning and development, compensation, livelihood improvement, provision of basic needs (shelters, utilities, food, health services, and education), and so forth as agreed in the concession agreement. They work with government officials at the district and provincial levels, mainly from the provincial MEM, MAF, Water Resource and Environment Office (WREO), and land management offices, such as 33

40 in the case of the THPC project 9. Other agencies (such as the health office, education office, women's union, or youth organization) are engaged on an ad-hoc or activity basis. Village Development Committees (VDCs) are established by the GoL and THPC Social and Environmental Division consultation teams for each village. The VDC represents the range of interests and opinions in the village and facilitates consensus decision-making at the village level. A VDC consists of village authorities, village elders groups, project implementation coordinators, Lao Women Union members, other skilled/influential members of the community, and representatives of all ethnic groups; at least three of these members should be women. The VDC is responsible for representing the interests and voicing the concerns of villagers in project-affected areas, conducting public involvement consultations, coordinating mass organizations, developing village development plans, monitoring and evaluating the resettlement process, organizing villagers for the implementation of activities related to relocation and rehabilitation of livelihood systems, and facilitating participation in grievance procedures District Level At the district level, District Working Groups (DWG) were established for village resettlement for the THXP Project. They comprise technical-level government officers. For example, as part of the Khamkert District Working Group Steering Committee, the Chief of District appointed an officer from the District Land Management Office as director, one from the District Administrative Office as deputy director, and one from the District MEM as a chair. The Chief of District also stationed individual officers in the affected villages to facilitate and support the THPC Social and Environmental Division (SED) team (See! ก ). DWGs are responsible for collaborating with the THPC project team during the planning and implementation of resettling the affected people in accordance with the timeframe. They are also responsible for ensuring that the relevant line agencies, such as the Governor's Office & Administration, the District Energy and Mines (DEM), the District Forestry and Agriculture Office (DAFO), the Labor and Social Welfare Office (LSWO), the DEO, the DHO, the District Information and Culture Office (DICO), the WREO, the Youth Organization (YO), the LWU, the military/army, the Lao Front for National Construction (LFNC), the police, and the DLTO are involved as required. The government officer involved receives a salary and per diem from the company when working in the field and participating in key meetings. Some officers are directly contracted with clear ToRs and deliverables, and get paid directly by the Company. This level requires a great deal of manpower and technical expertise in different areas related to livelihood improvement (farming, fisheries, forestry, handicraft, irrigation, etc.) However, expertise in these areas is lacking, both in quantity and quality Provincial Level During the IPP approval process, the central government (mainly the MPI and the MEM) is the driving force, but at the implementation stages, local government (the provincial governor and the 9 THPC was the first IPP in the hydropower sector of the Lao People s Democratic Republic ( Lao PDR ). THPC s shareholders include Electricite du Laos (EdL) 60 percent, Statkraft SF 20 percent and GMS Lao Company Limited 20 percent. THPC s Hydropower Plant is located in both Bolikhamxay and Khammouane Provinces with commercial operations commencing in March THPC s hydropower plant is a trans-basin, run-ofriver project, which generates more than 1,100 GWh per year from 210 MW of installed capacity. Pursuant to a long-term Power Purchase Agreement with Electricity Generating Authority of Thailand (EGAT), THPC sells at least 95 percent of its net available electricity output to EGAT, with the balance sold to EdL to meet local power demand (THPC website, 12/10/2011). 34

41 chief of district) takes full ownership. Throughout the project, the resettlement committee (RC), which is chaired by Provincial Governor or Vice Governor exclusively, guides and makes crucial decisions unless the issues are too big for the provincial level (wherein they are directed to the central government). This may be the effect of the Decentralization Decree No.1, which gives provinces the power to make decisions within their administrative areas. Other members of the RC are provincial-level Lao National Front Construction, Khamkert District Chief, Xaychamphone District Chief and Provincial Director of Women's Union. National representation (from PMO and WREA) is also invited. The RC oversees all GoL activities and commitments and liaises with all relevant ministries and organizations, including the highest levels of government. It is responsible for reviewing and approving the resettlement action plan for the THXP; providing organizational support and direction for the RMU; liaising with GoL organizations at the national, provincial, and district levels; ensuring compliance with GoL laws, regulations, and policies; liaising with the THXP regarding GoL concerns and priorities; and organizing national-level consultations. The RC meets every six months to review resettlement activities and to provide advice on the next six months to GoL agencies and THXP organizations. At the practical and operational level, the RMU is established with three government officers: a manager (usually from the provincial MEM), a deputy manager, and a chair (from the land and management office). The manager of the RMU also plays the role of secretary to the RC and is responsible for recording decisions and recommendations at the semi-annual meetings. The RMU is responsible for coordination of all resettlement activities and for ensuring that the priorities of the RC are addressed; and that GoL policies, procedures, and regulations are followed in the day-to-day management of the GoL s involvement in implementation. It is also responsible for organizing the GoL s involvement in resettlement activities, such as consultations and livelihood restoration programs; monitoring and auditing funds; ensuring that all GoL staff are involved; ensuring prompt evaluation of land and assets for compensation; organizing provincial and district meetings; and participating in the grievance procedure. The RMU coordinates and works with many agencies at both provincial and district levels. Examples include the Governor's Office & Administration, DEM, DAFO, LSWO, DEO, DHO, DICO, WREO, Youth Organization (YO), Lao Women Union (LWU), the military/army, LFNC, and Police. This is to engage cross-sectoral support according to resettlement work plans and budgets. Support from other agencies is required based on the company's work plan and is often engaged on an ad-hoc basis. The RMU and the DWG help companies coordinate with different government agencies as required and resolve problems concerning compensation and grievances of affected people on a day-to-day basis Central level The MPI, the MEM, and the MONRE/WREA are the key government agencies at the central level that drive the IPP Project Implementation Processes (from MOU to PDA, ESIA certificate, and CA) and consult with line ministries/departments concerned as appropriate. Consultations with ministries concerned normally involve circulating reports/documents (related sections) to those ministries for their sectoral policy and expert comments and endorsement. Most consultation meetings are organized by developers (as part of the IPP Implementation Process requirements) with support from the MEM (or the MONRE for SEIA approval processes), but it is up to the MEM/MONRE to determine the stakeholders and meeting agenda. The government (or Prime Minister's Office) is responsible for approving the MOU, the PDA, and the CA. Finally, projects must also be approved by the National Assembly. Once the CA is approved and granted to the project developer, it is transferred to the Provincial Governor and the Chief of districts to set up appropriate institutional arrangements, providing necessary support to the project and monitoring its progress. 35

42 At the implementation/operation stages, the central government's roles (mainly led by the MEM and the MONRE/WREA) are to engage periodically in key meetings and to monitor the project's compliance based on the Concession Agreement. The following figure shows an organization structure of vertical and horizontal linkages from national level to the village level; linkage between related government line agencies (including a newly set up resettlement/reallocation committee in charge of resettlement/reallocation at the provincial level) and private developer on hydropower development and implementation. The thick arrow lines represent the power relation between agencies, meaning the thicker the line, the more the authority that agency has over the others. 36

43 Figure 3 Central Public Relation office (VTE) Provincial GoL Liaison Office(Na Hin) Resettleme nt Unit Infrastructur e section Livelihood section Distric Village Organizational structure: Vertical and horizontal linkages (Source: Field survey 2011) THPC/THXPC SED Manager Social Devl. Unit (Na Hin) Construction section Health Education section Village Development Adm. Assistants (VTE) Monitoring Unit (Na Hin) Community Development Downstrea m unit (Na National Steering Committee Environment Unit (Na Hin) Infrastructur e Section Livelihood section (Concession Resettlement Committee (RC) Chair: P-Governor; P-Vice-Chair: Vice Bolikhamxay/ Khammouane Deputy V. Headman Land Assets Registration and Deputy Manger, RMU, Khamkeut District Working Group members of district line agencies and mass org. National Assembly Government Prime Minister (PM) (Monitori Bolikhamxay & Khammouane Resettlement Management Unit (Manager) Support staff Public Secretary to Party/ Village headman Nongxong Village Khamkert District Land Assets Registration and Titling officer WREA/ESIA Deputy Manger, RMU, Hinboun District Working Group members of district line agencies and mass org. Village Development Committees Village Facilitator Deputy V. Headman 2 (ຮອງ MEM Support staff Public Other Interest Groups: MRC IFIs Non-state actors Financiers Other GOL Ministries/agencies Stakeholders: Governor, Vice-Governor, Governor's office, MEM, WREO, MAF, CPTCO, LSWO, Land management Office, Health, Education, Stakeholders: Chief of District, Deputy Chief of District, MEM, MAF, CPTCO, LSWO, Education Office, Health Office, Information & Culture Office, WREO, Youth organization, LWU, Military/army, LNFC, Police, land and taxation Most stakeholder are involved on an ad-hoc basis, assigned by district chief, or as per requirement or in accordance with THPC/RMU work plan on specific Village/Field level: WCS, WWF, COPE, Save Children Norway, Lao Luxumbourge Village Facilitator Military Police Elderly Group War Memorial Youth Women's Legend Transp Educati Volunt Land and Forestr Agricultu Unit 1 Unit 5 Unit 10 Unit 15 Unit Hierarchical Coordination Functional

44 4.6 CRITICAL ANALYSIS OF LEGAL AND MINISTRATIVE SYSTEMS RELATED TO WATER RESOURCE DEVELOPMENT AND THEIR OUTCOMES This section provides an overview of gaps and weaknesses in the existing institutional, policy, and legal frameworks with respect to regulating and controlling hydropower development projects and their impacts in the Lao PDR. In most countries of the Mekong Region, sound environmental and social safeguard policies exist, theoretically to protect environments and livelihoods from adverse impacts of dam cascades. However, their translation into concrete action has been impeded due to a variety of internal and external forces and constraints. From the survey questionnaires, as well as discussions and interviews with key informants, the study team observed that few people are aware of issues concerning water valuation and dam cascades and, therefore, are unable to provide sufficient answers and views related to them. Most survey respondents (11 out of 19) indicated that the main events that bring the three issue fields (particularly livelihoods) on the policy agenda are 'government policy'; crisis events such as floods, drought, etc (6 out of 19); growing economic importance (4 out of 19); and finally international obligation (3 out of 19). The main groups involved in influencing and making policies were academics and researchers, officials and community group with equal points (6 out of 19), followed by others such as project developers/private sector; and the government at central level. Ideas formulated based on community needs are reported vertically from villages to district to provincial and to central government in the form of social and economic development plans, and finally to ministers, NGOs and advocacy groups, legislature, professional groups and public policy (equal points with 3 out of 19). Most of people/agencies consulted indicated that their main roles are policy making (mostly marked by provincial officer) for all the three issue fields, followed by policy implementation, and oversight. Most roles were related to the livelihoods issue field. The main concerns of the people consulted were livelihood issues for a number of reasons. They felt that livelihoods would be affected by factors such as floods, river bank erosion, adaptation to new environment (resettlement), change of livelihood practices (from traditional methods to modern technology), limited land areas for agriculture production, and more conflicts among villagers over resources and food production that could lead to social problems (robbery, sale/use of drugs, etc). Some people also expressed their concern over water valuation because they believe water is a very precious and important resource for the livelihood of poor families. They were also afraid that water quantity will decline, and its quality will be degraded, particularly in the reservoir areas, causing unpleasant smell from the remaining trees and lack of oxygen for fish and other species causing them to die out. Only few people were concerned about dam cascades, but they also raised an important question who (if there are number of project developers in one area) will compensate, and will compensation be the same or different. Some people also raised other concerns about unfair compensation, lack of secondary and upper school set-up in the resettlement areas due to small number of pupils, forcing students to go long distance to attend school, and encroachment of the protected areas with production areas becoming scarce Organizational Capacity The rapid growth of investor interest and the increase in scale and scope of these investments impose high demands on the government and its agencies for improved governance with regard to (a) a clear and functional legal and institutional framework; (b) systematic planning for optimized 38

45 development of natural resources; (c) adequate capacity in negotiation and oversight of implementation; and (d) mitigation of environmental and social impacts and, eventually, revenue management and benefits sharing. The government and its agencies are responding by issuing laws and regulations, restructuring institutions, gradually strengthening their capacity, improving review and approval processes, enhancing enforcement and monitoring, and increasing transparency and public consultations. However, governance problems persist, such as the following (Lao PDR Development Report 2010, WB 2010): Individual project proposals are not integrated into broader land and water management planning; Hydropower development is driven by developers on an ad-hoc basis, with sequences not following the least-cost expansion planning of the government; Capacity is lacking in respect to managing the concessioning process, with difficulties in applying equal terms and conditions to all investors, resulting in great differences in financial and social returns to government and local communities; Financial and human resource constraints limit enforcement of inspection procedures and monitoring for compliance, particularly at the local level where actual projects and compensation programs are implemented; Procedures for management and tracking revenue and benefit streams have not matched the surge in tax income; and The principal sector agency responsible - the Ministry of Energy and Mines (MEM) - lacks the logistical resources to adequately supervise the sector. According to the survey questionnaire distributed, most people/agencies (mainly at the provincial and district levels) answered that their organizational capacity is fairly strong, adequate and poor. This implies and confirms that the organization/agencies are still weak in the areas of water resources development and management. According to an interview with MPI officials, government policy is appropriate and government benefits from hydropower generation/concession income and development in project areas, which are remote. However, policies to support implementation are still lacking; for example, tax laws lack details and vary from project to project. Some projects even seek exemption from the NA, depending on the condition. The MPI believes this area requires further study to enhance development policy and to strengthen the process for greatest benefit to the government. MONRE/WREA ESIA Department has to review (EIA, SIA, EMP, RAP) all the documents, and return them to developers for further revision. The biggest challenge faced by ESIAD is their capacity to review all the documents (EIA, SIA, EMP, RAP) that are prepared by experts of more than years of experience, and to provide constructive recommendation because most of the reviewers (ESIAD staff) are inexperienced new graduates from local university. In particular, certification of the Social Impact Assessment/ Social Action Plan is difficult for them, as MONRE/WREA is not a direct social development agency to appropriately review it. To conclude, MONRE/WREA does not have full capacity to assess and implement the Social Action Plan or the Environmental Action Plan as their capacity is still very limited. According to ESIAD, Social Impact Assessment is the most difficult document for them to review, understand, and comment upon. According to the survey questionnaire, most people (mainly from provinces and districts) believe government policies and practices are not adequate to address the livelihoods, water valuation, dam cascades and other issues, but central government functionaries, on the contrary, believe there are sufficient policies and laws to address these issues. The areas in which they believe the policies and practice are inadequate are financial resources, human resources and technical expertise/experience, administrative arrangements and legal provisions for addressing key issues. 39

46 Some people complained that though there are number of policies and laws, there is little implementation or enforcement; and if livelihoods of resettlers don t improve within two to three years,, what will happen to them. They said the government or company should continue to support the resettlers, or they would face problems. The reasons for insufficient government policies and practices to address key concerns in the three issue fields were limited financial resources to implement projects and programs, limited staff resources to implement policies, inadequate knowledge of effective program/policy implementation among affected communities, inadequate provisions in government policies, as well as vague and weak institutional mandates. A few people also blamed poor coordination within government departments, conflicts and/or poor coordination between institutions involved and poor mediums of communication between the parties involved Weaknesses in institutional mandates During the IPP Implementation Processes, the MPI and the MEM support one another but they have different roles, particularly during peak times and in special cases. The MEM (through DEB) is able to submit proposals and report directly to the government without going through MPI, but it does keep MPI well informed. During implementation and operation, the MEM lacks the logistical resources to adequately supervise the sector (Lao PDR Development Report 2010, WB 2010). According to the EIA Decree, the MONRE/WREA ESIA Department must review and certify the social impact assessment/social action plan and the resettlement action plan, even though the MONRE's mandate is for management of water and environmental resources, not social development. The government has changed the name of ESIAD to Environmental Impact Assessment Department (EIAD), and the newly approved Decree is termed EIA Decree, not ESIA Decree as used by most people. But the EIA Decree also contains a social component. As this requirement largely falls outside the MONRE/WREA expertise, they lack the capacity to review and comment on the environmental action plans and, in particular, on the social action plan due to their volume and complexity. The newly established River Basin Committees have a mandate for full cross-sectoral coordination, planning, and implementation of IWRM. However, being new agencies, they are in the process of building their institutional capacities and finding appropriate working models for river basin management in Lao PDR. The two newly established RBCs (Nam Ngum and NT-NKD) are still disconnected from overall development in their basins. Besides, RBCs are being set up using a topdown approach, with the central MONRE/WREA appointing staff to lead them. Previously, WREA did not have the status of a Ministry, therefore, its roles in water resources management and intervention was marginal compared to other Ministries. The newly-established MONRE has much wider mandate, but it will require some time for it to become fully operational and properly respond to mounting issues and enforce its mandates, if and when it is finally implemented. The MAF's role has previously been limited and it was only involved on an ad-hoc basis at central and local levels. However, after the experience of NT2, the MAF's role has grown in importance and it has become more engaged in investment projects, working closely with companies on the watershed management plan and the resettlement or livelihood plans for affected communities (both resettled people and those who remain in watershed/reservoir areas). However, it is still not the central institution in investment projects, and only participates when invited by the MEM/MPI/MONRE or WREA. 40

47 Human Resources and Capacity In the implementation of public policy, the ability to govern depends on the human resource capacity of government agencies the people who participate in policy making and implementation, including their collective memory, commitment, technical proficiency and program competence (Land and Wolf 1990). Recognizing that since people envision, plan and execute tasks, coordinate, manage and produce inputs and outputs in an organization, the success or failure of an institution s performance depends upon the people involved. Given the complexities involved in Water Storage Infrastructure (WSI) development in the Mekong Region, it is critical that the public sector remains capable of understanding and addressing the complex issues involved in water governance. According to interviews with relevant agencies (all agencies) and the survey questionnaires, human resources (of technical proficiency, experience and programmatic competencies and adequacy in number) is the greatest concern and needs assistance in the form of support and training opportunities, particularly at local level (villages, districts, and provinces) where implementation takes place. It is generally recognized that Laos is still lacking in skilled, experienced, and technical personnel in many areas, including water resources. The Resettlement Management Unit (RMU) of THXPC has three staff members: the project manager is a senior expert from MEM who runs the unit and the other two are more of administrative functionaries. Little expertise in the field of water/hydropower planning and management is available within the unit. At the implementation levels dealing with social and environmental issues, the staff members are mainly supplied by Ministry of Agriculture and Forestry, with forestry and agriculture backgrounds Financial Resources Financial resources are a critical component of program implementation. The availability of financial resources is influenced by a number of factors, including the amount of funding, funding sources, systems in place to manage finances, operating expenses, and corruption. According to the questionnaire, respondents deemed government budget allocation not adequate to implement policies and practices, as funding habitually goes to operating expenses such as staff salaries and office expenses. While many people agree that local development projects are good, the financial returns to local governments are unclear, as taxes and royalties are collected by the central government. Yet, local governments, particularly individual government staff, benefit from development projects, as they receive per diem or salaries for assignments from the company. For projects in Lao PDR, investors are responsible and accountable for all public participation. They must fund public consultations and monitoring of investment projects/activities through direct payment to relevant agencies in order to participate. This system means relevant departments must submit budget plans for activities related to monitoring companies' performance, as indicated in the Investment Promotion Law, the Electricity Law, and the EIA Decree. In general, MOF allocates the budget according to the government development priorities. The key government agency that is directly responsible for prioritization of the Public Investment Programs (PIPs) is the Ministry of Planning and Investment (MPI). The PIPs are prioritized, starting from each ministry submitting its public investment activities to MPI, while MPI consolidates and prioritizes PIPs of each ministry to achieve the national development plan, namely, the National Socio-Economic Development Plan (NSEDP). Hence, the government implements its budget accordingly through the MOF. According to the 7 th NSEDP ( ), allocation of the government budget is heavily tilted toward social and infrastructure and construction sectors. Each shares 35 percent of the total investments, whereas the budget allocated for economic sector accounts for 30 percent. 41

48 Technological Resources A significant factor contributing to an organization s capacity is infrastructure, particularly in the form of technology, such as equipment, information systems, hardware/software, and communication systems. These infrastructures enable public agencies to perform their tasks efficiently and effectively, and to facilitate communication, coordination and dissemination of critical information. According to interviews with relevant agencies (all agencies) and the questionnaires distributed, technological resources (hardware, software, internet access, and other equipment) are inadequate, particularly at the local level (villages, districts, and provinces) where implementation takes place. Further discussions with interviewees show that most equipment was acquired through donors or development partners, not government expenditures. At the village level, most documents are handwritten. Some interviewees also expressed concern over the lack of proper buildings and office spaces for working Coordination/Conflicts between Government Departments In the Lao government system, every communication both vertical and horizontal is formal and well-documented, even if it is a request for a meeting. In order to set up a meeting with other government departments, requests must have clear objectives and red stamps from the departments involved. communication is considered inappropriate and informal. Yet, respondents to the questionnaire at the provincial and district level said communication and coordination is fairly strong between organizations and partners. This answer may stem from not clearly defining coordination and communication in terms of their end results and purposes (such as getting a piece of legislation passed, getting the project approved, etc.) rather than daily communication such as meeting requests and other enquiries. Often, however, it is recognized that communication and coordination between sectors and levels are seen by many government staffs as still weak. Duplications or lack of coordination sometimes occur. Significant delays in policy/program/project implementation are said to be a result of lack of communication and coordination. Poor communication and coordination between government actors has also been recognized as a significant weakness in GMS, and their improvement remains critical for addressing the impacts of proposed development. Based on hierarchical, formalized procedures, villagers voice their concerns through the village headman (to be officially recognized), before these are reported to the district, and province offices as appropriate. Villagers said that this caused delays in responding to the concerns, and kept them waiting for long time before a decision (if any) is taken to address their concerns. For example, in the case of THXPC's resettlement issues, where villagers raised their concerns over limited land areas for farming and other livelihood issues (in Nongxong village), their concerns have not been easily resolved despite the existence of an institution for grievance redressal. In terms of effectiveness of communication and coordination across different sectors, Ministries/line agencies in the implementation of hydropower or WSI projects, it is obvious that key Ministries have their roles and mandates, which determine their coordination and communication with each other. For example, at the preparation stage of hydropower development, the key Ministries take the lead in distributing/circulating the project-related documents to be reviewed and commented upon by relevant Ministries, and also set up meetings/workshops to disseminate the project information and gather comments. However, according to the interview with key agencies, most of the interviewers said that it is up to the key agencies to communicate and coordinate with relevant line ministries, and it is up to them to consult or invite agencies concerned accordingly. This implies that there is no standard system of communication and coordination among line agencies. However, the government does encourage key Ministries to be more proactive and consult with all relevant Ministries as much as possible, otherwise, any documents/proposal might not be approved and may be reverted back for further improvement. 42

49 4.6.3 Non-State Actors In addition to multilateral and bilateral funding agencies and private sector investors, various other non-state actors play a key role in water governance, livelihoods and hydropower development issues in the Mekong Region. These actors include academic and research institutions and networks, non-governmental organizations, civil society groups, international development organizations, and technical consultants. While some organizations operate on a regional scale, others are based in individual countries and localities, and are involved in providing a range of services, from research and technical studies to consulting to advocacy and information dissemination. Table 7 summarizes non-state actors involved in the THPC project areas. In the wake of hydropower projects proposed in the region, these non-state actors have stepped up their role by increasingly becoming involved in assessing natural and human resource systems in the region, and by facilitating collaboration between key decision-makers to realize the impacts of dams. Table 7 Non-state actors involved in the THPC/THXPC project areas. Actors Roles Livelihoods Water valuation Cascades Takes part in livelihood World Wildlife Sustainable forest restoration, Fund management focusing on X X rattan development World Conservation Society Protected area X X Save Children Education program - for Norway kindergarten X X Culture Opportunity for People Everywhere Social equity X X International Dialoguing with THPC - watch River (IR) dog X X Lao Luxumbourge Education program - for high school External Influences in Implementing National Laws and Policies Many laws and policies related to water resources development in the Lao PDR are mostly influenced by external agencies, particularly the multilateral and bilateral organizations. For example, national water resource policy, strategy and action plan is developed with technical and financial assistance from ADB and AusAID; the SEIA Decree and guidelines, as well as Resettlement Decree and guidelines development were also supported by SIDA and UNDP; and the National policy on environmental and social sustainability of hydropower sector in Lao PDR (NPESSHS - No.561/CPI, STEA, 2006) was also supported by the World Bank Social Activism In Lao PDR, there are about 46 Civil Society Organizations (CSOs) that are active in different sectors (education, agriculture, water resource and forest conservation, environment, health, water and X X 43

50 sanitation, livelihoods, gender, food security and governance) but mainly at the local levels (focusing on rural development). (Lao CSOs Directory 2012). As a one-party socialist state, government criticism is rarely tolerated in Laos. Freedom of press is limited and the influence of civil society organizations is restricted, while corruption remains high. These circumstances significantly enhance the risks associated with hydropower development particularly for the hundreds of thousands of villagers poised to lose land, fisheries and other resources as a result. Hydropower development, while generating revenue for the government and generally proving profitable for private-sector investors, has incurred major environmental and social costs, a legacy of damage that remains largely unaddressed. There are no obvious cases of strident social activism in relation to hydropower development in Lao PDR, but there is the silent unhappiness of affected villagers over inappropriate compensation and consequences from development projects, which is being addressed by the Project developer and local government. Other than that, the government has kept all dissent under control. However, there are some external NGOs or social activists outside of Laos that are quite active in trying to pressure the Mekong countries (particularly Laos) to make better and more transparent decisions with regards to the planned hydropower projects in the Lower Mekong Basin. Examples are as follows. Save the Mekong Coalition brings together non-government organizations, local people, academics, journalists, artists and ordinary people from within the Mekong countries and outside. The Coalition urges the Mekong governments to keep it flowing freely to save this critical source of food, income and life for present and future generations. The Coalition has: Collected 23,110 signatures on "Save the Mekong" petition to the Prime Ministers of Cambodia, Laos, Thailand and Vietnam on 19 October 2009; Released a press release on 13 October, 2010, headlined "Save the Mekong Call: Cancel Xayaboury Dam on Mekong River s mainstream, Halt MRC PNPCA Process"; According to Save the Mekong Coalition: o o o o On 11 November 2010, the Finnish Service Centre for Development Cooperation and other Finnish NGOs wrote to the Finnish Minister of Foreign Trade and Development Cooperation seeking endorsement of the MRC's Strategic Environment Assessment, "that the MRC countries defer the decisions on the mainstream dams for at least ten more years, in order to do more comprehensive assessments and find alternative energy solutions". On 20 January 2011, Australian civil society sent a letter to Australia's Foreign Minister Kevin Rudd, "asking the Government of Australia to help ensure that the Xayaburi prior consultation process (PNPCA) is rigorous, open and transparent for the people of the Mekong", as Australia is one of biggest donors to the MRC. On 18 March 2011, 21 international organizations and academics wrote to the Australia's Minister of Foreign Affairs expressing their concern about the Xayaburi Dam and the grievous failure of its PNPCA process. As the process has been funded by the Australian Government, the signatories called on Australia and other donors to use their leverage to call for an improved process and a delay in decision-making. On 23 March 2011, NGO Forum on Cambodia, along with other Cambodian organizations, sent a letter to the Cambodian National Mekong Committee asking them to halt the Xayaburi Dam's decision-making process for a period of ten years due to the transboundary impacts the dam has on Cambodia. 44

51 o On 3 May 2011, prior to the 18 th Association of South East Asian Nations (ASEAN) Summit in Jakarta, Indonesia, the Save the Mekong Coalition put out a statement calling for ASEAN leaders to act immediately to cancel the Xayaburi Dam. The above are some key examples of social activism that tries to put pressure on the government of Laos, as well as the Lower Mekong countries to make better decisions on the planned hydropower development for the benefit of all. However, in term of its effectiveness, it has some implications for the need to review the hydropower process, and holds back the government a little. IR is another non-profit organization, which is quite active in protecting rivers and rights around the world. In Laos, they have been very critical about the operation and implementation of the Theun Hinboun, NT2, and the preparation of the planned hydropower in the Mekong River. However, the Lao Government and developers perceive IR as river watchdog, which is too critical of the hydropower development in general and does not provide any constructive inputs to help improve the situation. 4.7 ASSESSMENT OF VERTICAL AND HORIZONTAL LINKAGES OF STATE AGENCIES There is heavy coordination among various ministeries both vertically and horizontally at different stages of hydropower development from preparation to implementation and operation, but it is mainly limited to key government agencies and the project developer. During the preparation or project approval stage, most decision making is done at the central levels. The leading agencies are MPI and MEM, Department of Electricity and Department of Energy Promotion and Development. And the main decision maker is the Central Government (Prime Minister, Deputy Prime Minister and Ministers), with some consultation from line agencies concerned, particularly MONRE, (formerly WREA) for IEE and EIA approval, Ministry of Finance, Ministry of Agriculture and Forestry, and National Land Management Authority for calculation of compensation, local administration (provinces, districts and villages), as well as potential affected people/villages for their consensus. However, consultation and involvement of wider public or interested stakeholders/civil society is still limited. According to the IEE and EIA processes, government tasks the Project developer with undertaking stakeholder consultations at all levels, with the support of and in the presence of agencies concerned. Horizontal coordination (in this case, invitation to participate at different stages) is up to principal Ministries (i.e., MEM, MPI and MONRE/WREA) who decide when and at which points to engage with other relevant ministries as in this case, the roles and responsibilities of other ministries is not clearly defined. The effectiveness and efficiency of communication between ministries and sector agencies on the economic, social and environmental impacts and benefits of hydropower projects during their planning and implementation is still limited due to their limited capacities, human and financial resources. This process is guided by the relevant laws and official guidelines, and supported and coordinated by the key agencies (e.g., MONRE/WREA and MEM) but funded and implemented by the investors. During interviews, key government officers accepted the fact that their ministries cannot lead, particularly the implementation process, due to the above reasons, and that is why the government had granted the private sector the right to take a lead in determining the economic, social and environmental impacts and benefits of a project. On the other hand, the private sectors also found this a major constraint, but if they let the government agencies take the lead in this process, they risk possible delays and quality deliveries of activities that could have an impact on their reputation and funds. 45

52 Consultation does take place and proves to be very useful. However, results of the interviews suggest a need for improvement in this process. Some local officials said consultation was very important, particularly at the early stages of project development, so that at later stages, there is less resentment by the public or affected communities toward the project developer and the government on livelihoods issue. They wished for a better consultation mechanism. They see a project as a source of capacity building or training ground for the governmental staff at all levels (this includes central-level government staff). 5.0 ASSESSMENT OF FACTORS FACILITATING OR LIMITING THE EFFECTIVENESS AND EFFICIENCY OF THESE ACTORS PERFORMANCE The factors that limit the effectiveness and efficiency of an actor s performance are as follows: i. Although policies and regulations have been developed and cover a wide range of issues, it is recognized that there are gaps in implementation and interpretation. Contradictions between certain policies exist. Examples include the delineation between large- and small-scale hydropower development (based on electricitygenerating capacity) and non-hydropower sectors (based on monetary values). Furthermore, there is still confusion about roles and responsibilities between agencies. Enforcement of laws and regulations for actors involved is not sufficiently strong. Some stages of the consultation process are more like informing, rather than consulting. Strategies and guidelines are developed in consultation with relevant line agencies, but less with users at different levels; ii. Shortages in human resources continue, particularly in managerial and skilled labor, which inhibit development as set out by the government; and iii. Salaries of government staff are low (not sufficient to support them and their families), thus affecting performance. 6.0 SUMMARY AND SOME SUGGESTIONS FOR FURTHER FOLLOW-UP The government of Laos is striving to become the "Battery of Asia" by developing hydropower as a potential source of energy to export and, thereby, boost the country's economy. It hopes that by increasing the country s GDP, its current efforts will contribute to poverty alleviation and lift the country from its current least-developed country status by Theoretically, it is hoped that hydropower development would provide better lives, facilitating improvements in housing, utilities, roads, market access, employment, income, healthcare services, education, and, most importantly, fertile land for rice production and gardening. In practice, a lot of effort is still required to achieve these good intentions. While the government has passed many legislations to support the hydropower sector, implementation of these legislations varies from project to project, case by case. At the preparation and approval stages, most decisions are made at the central level (led by the MPI, the MEM, and the MONRE/WREA). Once projects reach the operational stage of implementation, most decisions in regard to social and environment components and grievance processes are made at the local level by the Provincial Governor and District Chief. There is heavy coordination both vertically and horizontally at different stages of hydropower development from preparation to implementation and operation, but it is mainly limited to key 46

53 government agencies and the project developer. In term of effectiveness and efficiency of coordination, it is a gradual process that government tries to improve, given that hydropower development sector is new, and cuts across a number of sectors. In theory, provincial government is expected to coordinate and report to ministries concerned for decisions and support from the central government. However, based on the NT2 experience, the government or Prime Minister realized the difficulties of this horizontal coordination and decision-making. The Government, therefore, has given MEM, MONRE/WREA, and Provincial Governor equal power to report directly (vertically) to the Prime Minister on urgent matters relating to hydropower development projects across countries. This means the local government (particularly the governor), needn't go through the Ministries for urgent decision making. In addition, between MEM and MONRE (formerly WREA), the latter is only an administration unit as of now, and has little power as compared to MEM. It is therefore difficult for MONRE/WREA to exercise its mandate effectively. MONRE's role is currently being restructured after its reform, and it will take some time for this new ministry to mature and become fully operationalized. According to the IEE and EIA processes, government rests the responsibility (both technically and financially) upon the Project developer to undertake stakeholder consultation at all levels, and be accompanied or supported by concerned agencies. In most cases, consultation and involvement of wider public or interested stakeholders/civil society in the development project is still limited. During the implementation and operation stages, local administration (provincial, district and villages) is the key decision-maker, implementing as well as monitoring the activities as per the Concession Agreement. The local administration is also responsible for reporting the progress to the central government, particularly on the resettlements of affected communities. The Central government is responsible for periodical oversight, guidance and monitoring. However, it is the Project developer that is responsible for the planning and implementation of all social, environmental and livelihoods-related activities. At the provincial and district level, there are many line agencies taking part in the project implementation/field activities. Some officers are assigned/appointed on a long-term basis and temporarily reside in the resettlement villages, and some are involved/participate on an ad-hoc basis based on the project work plan and requirement agreed upon in the Concession Agreement. But long-term participation of government staff members in the THXP also means a shortage in their offices. Limited capacities (human resources, experts in social and environmental field, and financial resources) of the local administration are a real challenge. Local government officials, who are field coordinators for the project activities, coordinate with villagers on behalf of the government to deliver the government/project policies, inform about the situation and planned activities, besides consulting with villagers to collect information and get their feedback. For government, this is a valid form of community participation and consultation in the project, and is commonly practiced. However, some people interviewed said public consultation and participation could be improved to ensure maximum benefits to both the nation and the affected communities. Some suggestions for the improvement of water governance in the context of hydropower development would include (i) promoting exchange of experience and lessons on governance issues, including communication and coordination between stakeholders, aimed at increasing benefits and reducing social, economic, and environmental cost of WSI development; (ii) promoting meaningful consultation and participation of stakeholders, including relevant line agencies, the affected and concerned communities, private sector, and NGOs, to reduce objections and increase support, for achieving the stated project objectives; (iii) increase in the right training, tools and resources to manage the projects, (iv) promoting a holistic approach for development and management, taking into account all dimensions of development, including institutional, social, human, cultural, 47

54 economic, environmental, and financial aspects, to ensure sustainable development; and (v) encouraging, supporting, and increasing the confidence of the private sector to do a good job in supporting the economy, livelihoods improvement activities, and environmental protection. VALIDATION WORKSHOP OUTCOME: The validation workshop on 19 October 2012 recommended the following points for consideration: Sectors/Ministries concerned should be more involved and assigned to work on and implement the sector-specific activities for improving the livelihoods of the resettled people. Project developer together with responsible agencies should constantly review the resettlement policy to ensure that the resettled people are compensated fairly and timely. 48

55 7.0 REFERENCES THXP Theun-Hinboun expansion project concession agreement (Revised). Vientiane. AusAID AusAID Mekong water resources program delivery strategy Barma, N., Fritz, V. Rex, W Governance of natural resource management in Lao PDR: A value chain perspective, Lao PDR Development Report 2010, the World Bank. Bolikhamxay Province, Lao PDR Bolikhamxay Governor decision on appointment of provincial level Resettlement Committee (RC) and Resettlement Management Unit (RMU) of Theun-Hinboun Expansion Project. No Committee for Planning and Investment National policy: Environmental and social sustainability of the hydropower sector in Lao PDR. Vientiane. THXP Report on the Environmental Protection Fund (EPF) operation for Vientiane: THXP. Fengthong, T Draft practical guideline on health impact assessment in Lao PDR. Vientiane: Ministry of Health. GHD Pty Ltd Lao PDR: Updating the national water resources policy and strategy. ADB Technical Assistance Consultant's Mid-Term Report, ADB TA 7013-LAO, Volume 1, Main Report. Melbourne, Australia: Government of Australia. Government of Lao PDR and THXPC Amendment to concession agreement of Theun Hinboun Hydropower Project of 13 October HydroWorld.com Finland funds Mekong River hydropower program. Available at: gram.html. (Accessed on 18 December 2011). Fraser, Julia WB and van den Toorn 2009 with inputs from Jie Tang and William Rex "Background Note, Hydro Power Background Summary Note and Sector Assessment", Lao PDR Development Report 2010, WB. Khamkhert District, Bolikhamxay Province, Lao PDR Khamkhert Chief of District Decision on appointment of District level District Working Group of Theun Hinboun Expansion Project, no Khammouane Province, Lao PDR Khammouane Governor s decision on appointment of provincial-level Resettlement Committee (RC) and Resettlement Management Unit (RMU) of Theun Hinboun Expansion Project, No Lane, L.M. and Wolf, J.F The human resource crisis in the public sector: Rebuilding the capacity to govern. New York: Quorum Books. Learning House for Development Lao CSOs directory. The Asia Foundation. Lazarus, Kate and Slunge, Daniel Strengthening environmental management project Phase II (SEM II) Lao PDR. Evaluation Report, Unpublished report for SIDA and WREA. 49

56 McCarty, Adam and Alexander, Julian Themtic study. The developmental effectiveness of untied aid: Evaluation of the implementation of the Paris Declaration and of the 2001 DAC recommendation of untying ODA to the LDCs. Lao PDR Country Study. Vientiane: Mekong Economics Ltd. Mekong River Commission Secretariat Strategic plan Vientiane: MRC. Ministry of Health National Strategy for Rural Water Supply and Sanitation. Vientiane: MoH. Ministry of Health National Policy on Health Impact Assessment. Vientiane: MoH. Ministry of Industry and Handicraft, Department of Electricity Environmental management standard for electricity projects. Vientiane: MoI. Ministry of Planning and Investment Seventh Five Year Socio Economic Development Plan. Vientiane, Lao PDR: MPI National Assembly Law on Investment Promotion. National Assembly Environmental Protection Law. National Assembly Law on Agriculture. National Assembly Law on Electricity. National Assembly Law on Water and Water Resources (No , ). NORPLAN Final report, resettlement action plan, Theun Hinboun Expansion Project. Norplan. Office of the UN Resident Coordinator Lao PDR donor & development partner profile. Vientiane. Prime Minister's Office Decree on Establishment and Activities of River Basin Committee. (No: 293/PM). Vientiane. Prime Minister's Office Decree on Environmental Impact Assessment. Prime Minister's Office On Comparative Analysis between Multilateral Environmental Agreements and National Socio Economic Development in Lao PDR. Vientiane. Prime Minister's Office Decree on the Compensation and Resettlement of the Development Project. Prime Minister's Office, Science Technology and Environmental Agency (STEA) Regulations for Implementing Decree 192/PM on compensation and Resettlement of people affected by Development Projects. Vientiane. 50

57 Suhardiman, A. de Silva, S. Carew-Reid, J Policy review and institutional analysis of the hydropower sector in Lao PDR, Cambodia and Viet Nam. Mekong (MK1) project on optimizing reservoir management for livelihoods. Vientiane: Challenge Program for Water and Food. Theun Hinboun Expansion Project Summary of the THXP Monitoring Report Vientiane. Water Resource and Environment Administration Draft National Water Resource Policy. Vientiane. World Bank Lao PDR Development Report Vientiane. Online sources and electronic materials ADB Performance Evaluation Report: Lao PDR, Environment and Social Program. (accessed on 1 August 2011). ADB Updating the national water policy and strategy. Technical Assistance Completion Report, TA7013-LAO (accessed on 1 August 2011). ADB LAO: Nam Ngum River Basin Development Sector Project. Project administration memorandum. (accessed on 1 August 2011). Government of Lao PDR and UNDP Lao PDR Coordinating the Implementation of Multilateral Environmental Agreements in Lao PDR. (accessed on 1 August 2011). Ministry of Industry and Handicraft and ADB Final report: Capacity building for environmental and social mitigation for NT2 and other hydropower projects in Lao PDR. TA4213-LAO PDR. Vientiane, Lao PDR. (accessed on 1 August 2011). Powering Progress (accessed on 1 August 2011). Powering Progress Operational and planned projects. Itemid=2 (accessed on 1 August 2011). Save the Mekong Coalition (accessed on 30 August 2012) 51

58 UNDP Lao PDR Poverty Environment Initiative (PEI) Lao PDR Issue Brief, Investments in Hydropower. f%2006_2010_hydropower_english_small.pdf (accessed on 1 August 2011). UNDP Lao PDR National Growth and Poverty Eradication Strategy (NGPES). %20Main%20Document.pdf (accessed on 1 August 2011). 52

59 Appendix 1: Sample Survey Questionnaire CASE ID # For Office Use Only QUESTIONNAIRES FOR ASSESSING POLICIES AND ADMINISTRATIVE MECHANISMS IN WATER GOVERNANCE IN CAMBODIA, LAO PDR AND VIETNAM Interviewer s ID Name and No.: Date Interview Began: Length of Interview: Your participation in this project is completely voluntary. You may skip or refuse to answer any survey question that makes you feel uncomfortable. A. RESPONDENT S PROFILE AND EXPERIENCE IN POLICY MAKING 1. Specify your role in the policy-making process in water resources development and water policy. Agency: Position: Role: 2. Which level of administration/organization do you belong to: Central Government Ministry or Department District Government Administration University/Research Organization Provincial Government Community/Village Level NGO/Civil Society Group International Development Organization 3. To whom do you report to? B. POLICIES AND PRACTICES RELEVANT TO THE THREE ISSUE FIELDS 4. What have been the main events that resulted in the three issue fields (livelihoods, water valuation and dam cascades) being on the policy agenda? Crisis event (flood, drought ) International obligations Pressure from NGOs and international community Government policy Trade partners pressure Growing economic importance Lobby Pressure from donors 53

60 5. Who are the main people and groups involved in influencing and making policies in the three issue fields? Ministers Legislature Officials Networks Academics researchers and NGOs and Advocacy groups Professional groups International organizations Political parties Foreign governments Industry Religious leaders Mass media Pubic policy Community Group 6. What is your organization s role within the three issue fields? Livelihoods Water Valuation Dam Cascades Policy Making Policy Making Policy Making Policy Implementation & Oversight Compliance Monitoring Policy Implementation & Oversight Compliance Monitoring Policy Implementation & Oversight Compliance Monitoring Research Research Research Advocacy Advocacy Advocacy Economic interests/invest Economic interests/investing None None None Economic interests/investing 7. In your opinion, what are three key concerns related to the following issue fields? Livelihoods: Water Valuation: Dam Cascades: 8. Do you believe that existing government policies and practices adequately address abovementioned concerns? Very effective Adequate Not adequate Not at all 9. In what area do you believe the performance of government policies and practices are inadequate? Legal provisions for addressing key issues Financial resources expertise/experience Institution s motivation and commitment strategy Administrative arrangements Human resources and technical Selection of the appropriate Other (please specify) 54

61 10. If government policies and practices are insufficient to address key concerns in the three issue fields, what are the reasons? Inadequate provisions government policies in Vague and weak institutional mandates Limited resources implement policies staff to Limited financial resources to implement projects and programs Limited technical resources to implement projects/programs Inadequate knowledge of effective program/policy implementation Poor coordination within government departments Conflicts and/or poor coordination between institutions involved Alternate priorities of government agencies involved Pressure from external/private sector actors (companies, investors and donors) Poor mediums of communication between parties involved Inadequate knowledge of policy/program implementation among affected communities C. ORGANIZATIONAL CAPACITY 11. How would you rate your organization s capacity to enforce policies and/or implement activities within the three issue fields? Strong Fairly strong Adequate Poor Not at all 12. Does your organization have a clearly outlined strategic planning process for setting clear organizational goals, and for directing the efforts of staff and other stakeholders toward achieving its objectives? Yes, I m involved in the process No Yes, but I m not involved in the process Don t know. 13. Is there an ongoing process for scanning the environment to consider potential threats and opportunities? Yes No Don t know. 14. Does all staff have an opportunity to suggest changes within your institution? Does the institution use feedback to improve itself? Yes No Don t know. 55

62 15. Are departmental lines or divisions within groups coordinated to improve performance? Or are departmental lines heavily guarded, serving as an impediment to collaboration? Strong Fairly strong Adequate, but needs improvement Poor, and impedes performance Not at all 16. How would you rate the level of communication, and flow of information between various levels (top down and bottom up) within your institution? Strong Coordination is limited/poor Don t know. 17. In your opinion, are adequate budgets allocated for implementing plans and programs by your institution? Yes No Don t know. 18. Are financial resources used optimally by your organization? Yes No Don t know. 19. In your opinion, are adequate timelines specified for implementing plans and programs by your institution? Yes No Don t know. 20. Is your institution equipped with all technological resources (i.e. computers, information systems, library, software etc.) to carry out its function? Yes No Don t know. 21. To what extent does your institution monitor and evaluate its programs? Programs are monitored and evaluated regularly Programs are monitored and evaluated periodically Programs are not monitored at all. Don t know. 22. Does your institution have adequate formal and informal operational linkages with other likeminded organizations? Yes No Don t know. 23. How would you assess communication and coordination between your organization and partner organizations? Strong Fairly strong Poor, and impedes performance of tasks Thank you for your participation. 56

63 Appendix 2: Sample Survey Questionnaire in Lao language (Separated attachment) ບ ດສອບຖາມ ກ ນໄກດ ານນະໂຍບາຍ ແລະ ການບ ລ ຫານຄ ມຄອງຊ ບພະຍາກອນນ າໃນ ສ.ປ.ປ ສ ປ ລາວ ຜ ຊ ຖ ກສ າພາດ: ວ ນທ : ການເຂ າຮ ວມໂຄງການແລະການສອບຖາມຂອງທ ານແມ ນເປ ນໄປຕາມຄວາມສະໝ ກໃຈຂອງຜ ກ ຽວ. ທ ານມ ສດທ ຈະບ ຕອບຄ າຖາມໃດນ ງກ ໄດ ຖ າທ ານຄ ດວ າທ ານບ ສະດວກທ ຈະຕອບ. ກ. ປະຫວ ດແລະປະສ ບການໃນການສ າງນະໂຍບາຍ 1. ກະລ ນາລະບ ບ ດບາດໜ າທ ຂອງທ ານໃນຂະບວນການສ າງນະໂຍບາຍກ ຽວກ ບການພ ດທະນາ\ ຊ ບພະຍາກອນນ າ ແລະ ນະໂຍບາຍ ຂອງຊ ບພະຍາກອນນ າ. ໜ ວຍງານ: ຕ າແໜ ງ: ໜ າທ : 2. ສານ ກງານ ຫລ ອ ງການໃດທ ທ ານສ ງກ ດຢ ສ ນກາງ ແຂວງ ເມ ອງ ບ ານ ມະຫາວ ທະຍາໄລ\ສ ນວ ໄຈ ອ ງການທ ບ ຂ ນກ ບລ ດຖະບານ ອ ງການຈ ດຕ ງສາກ ນ 3. ທ ານລາຍງານເຖ ງໃຜ ຂ. ປະເດ ນຫລ ກຂອງນະໂຍບາຍ ແລະການປະຕ ບ ດຕ ວຈ ງ 3 4. ຍ ອນຫຍ ງ 3 ປະເດ ນລ ມນ: a. ການດາລ ງຊວດ (Livelihoods), b. ຄ ນຄ າຂອງນ າແລະຊ ບພະຍາ ກອນທ າມະຊາດ (Water valuation), c. ກ ມເຄ ອນໃນອ າງໂຕ ງດຽວກ ນ (Dam cascades) ງຖ ຈ ກນາເຂາມາໃນວາລະຂອງການສ າງນະໂຍບາຍການພ ດທະນາ ແລະການບລຫານ ຊ ບພະຍາກອນນ າ? (ທ ານສາມາດເລອກໄດ ຫ າຍໆຂ ອງຕາມປະສ ບການແລະຄວາມເຂ າໃຈຂອງທ ານ) ໄພພ ບ ດ ນ າ) ( ແຫ ງແລ ງ,ຖ ວມ ນະໂຍບາຍ ຂອງລ ດຖະບານ ການຂ ດຂວາງ ແບບບ ເປ ນທາງ ການ ສ ນຍາຜ ກມ ດ ລະຫວ າງປະ ເທດ ການກ ດດ ນ ຈາກຄຄ ຄ າຕ າງຊາດ ການກ ດດ ນ ຈາກກຜ ໃຫ ທ ນ ການຂະຫຍາຍຕ ວທາງ ການກ ດດ ນຈາກອ ງກອນເອກະລາດທ ບ ຂ ນກ ບ ດ ານເສດຖະກ ດ ລ ດຖະບານ ສງອ ນໆ ກະລ ນາ) ( ລະບ 5. ບ ກຄ ນຫລ ກ ມຄ ນໃດທ ສາມາດເຂ າໄປມ ສ ວນຮ ວມໃນການຜ ກດ ນໃນການສ າງນະໂຍບາຍທ ກ ຽວຂ ອງກ ບ 3 ປະເດ ນຫລ ກທ ໄດ ກ າວມາຂ າງເທ ງນ ນ. (ທ ານສາມາດເລ ອກໄດ ຫ າຍໆຂ ອງຕາມປະສ ບການແລະຄວາມເຂ າໃຈຂອງທ ານ) 57

64 ລ ດຖະມ ນຕ ເຄ ອຄ າຍ ສ ງຄ ມ ນ ກວ ຊາການ ແລະນ ກຄ ນຄວ າ ຊ ນ ສສານມວນ ຜ ອອກກ ດໝ າຍ ນ ກຊຽວ ຊານ ອ ງ ກອນນາໆ ຊາດ ພ ກ ການເມ ອງ ພະນ ກງານລ ດ ລ ດຖະບານຕ າງຊາດ ກ ມອ ດສາຫະກ າ ຜ ນ າທາງດ ານສາດສະໜາ ຊ ມຊ ນ ອ ງກອນອ ດສະຫລະທ ບ ຂ ນກ ບ ນະໂຍບາຍ ລ ດຖະບານ ( NGOs) ລ ດ ສງອ ນໆ ( ກະລ ນາລະບ ) 6. ໃນ 3 ປະເດ ນດ ງກ າວນ ອ ງກອນຂອງທ ານໄດ ມ ບ ດບາດແນວໃດ? (ທ ານສາມາດເລອກໄດ ຫ າຍໆຂ ອງຕາມປະສ ບການແລະຄວາມເຂ າໃຈຂອງທ ານ) ການດາລ ງຊວດ ຄ ນຄ າຂອງນ າແລະ ກ ມເຄ ອນໃນອ າງໂຕ ງດຽວກ ນ (Livelihoods) ຊ ບພະຍາ ກອນທ າ ມະຊາດ (Water Valuation) (Dam cascades) ສ າງ ນະໂຍບາຍ ປະຕ ບ ດ ແລະ ນາໃຊ ນະໂຍບາຍ ຕ ດຕາມການນ າໃຊ ນະໂຍບາຍ ຝ າຍວ ໄຈ ສ າງ ນະໂຍບາຍ ປະຕ ບ ດ ນະໂຍບາຍ ແລະນ າໃຊ ຕ ດຕາມການບ ງຄ ບ ການນ າໃຊ ນະໂຍບາຍ ຝ າຍວ ໄຈ ສ າງນະໂຍບາຍ ປະຕ ບ ດ ແລະນ າໃຊ ນະໂຍບາຍ ຕ ດຕາມການບ ງຄ ບການນ າໃຊ ນະໂຍບາຍ ຝ າຍວ ໄຈ ຜ ຜ ກດ ນນະໂຍບາຍ ຜ ຜ ກດ ນນະໂຍບາຍ ຜ ຜ ກດ ນນະໂຍບາຍ ຝ າຍເສດຖະກ ດແລະ ການລ ງທ ນ ຝ າຍເສດຖະກ ດແລະ ການລ ງທ ນ ຝ າຍເສດຖະກ ດແລະການ ລ ງທ ນ ບແມ ນທ ງໝ ດ ບແມ ນທ ງໝ ດ ບແມ ນທ ງໝ ດ ສງອ ນໆ ( ກະລ ນາລະບ ) 7. ທ ານຄ ດວ າ 3 ຂໃດໃນ, ຂ ນ ທ ທ ານໃຫ ຄວາມເປ ນຫ ວງຫລາຍທ ສ ດ? ຍ ອນຫຍ ງ? ການດ າລ ງຊ ວ ດ (livelihoods): ຄ ນຄ າຂອງນ າ ແລະຊ ບພະຍາກອນ (Water valuation): ກ ມເຄ ອນໃນອ າງໂຕ ງ (Dam cascades): 58

65 8. ທ ານຄ ດວ ານະໂຍບາຍ ແລະການປະຕ ບ ດທ ຜ ານມາຂອງລ ດ ແລະ ພາກສ ວນທ ກ ຽວຂ ອງພຽງພ ກ ບສ ງທ ທ ານເປ ນຫ ວງ ແລ ວຫລ ຍ ງ? ມ ປະສ ດຕ ພາບສ ງ ພຽງພ ພຽງພ ບ ມ ບ ຫຍ ງເລ ຍ 9. ທ ານຄ ດວ າມ ຂ ງເຂດໃດແດ ນະໂຍບາຍແລະການດ ທ າເນ ນງານ ຂອງພາກສ ວນທ ກ ຽວຂ ອງຍ ງ ເຮ ດບ ທ ນໄດ ດ ເທ າທ ຄວນ: ກ ດໝາຍທ ກ ຽວຂ ອງ ການຈ ດການບ ລຫານ ງ ບປະມານ ຊ ບພະຍາກອນມະນ ດ ແລະ ວຊາການ ມ ທ ປະສ ບການ ແຮງຈ ງໃຈ ແລະ ຄວາມຕ ງໃຈເຮ ດຊ ງໃດໜ ງເພ ອບ ນລ ເປ າໝາຍ ຂອງສ ານ ກງານ ການເລ ອກນ າໃຊ ຍ ດທະສາດ ຍ ດທະວ ທ ເໝາະສ ທ ມ / ງອ ສ ນໆ(ກະລ ນາລະບ ) 10. ທ ານສາມາດບອກໄດ ວ ບ າຍ ອນສາເຫດອ ນໃດ, ນະໂຍບາຍ ແລະ ການປະຕ ບ ດງານຂອງ ພາກສ ວນທ ກ ຽວຂ ອງຈ ງຍ ງ ມ ບ ຄວາມສາມາດທ ຈະແກ ໄຂບ ນຫາຫ ກໃນ 3 ປະເດ ນດ ງກ າວ ນ ນ? (ທ ານສາມາດເລ ອກໄດ ຫ າຍໆຂ ອງຕາມປະສ ບການແລະຄວາມເຂ າໃຈຂອງທ ານ) ນະໂຍບາຍ ຂອງລ ດບ ຄ ບ ຖ ວນພຽງພ ໜ າທ ພາລະ ບ ດບາດຂອງໜ ວຍ ງານບ ມ ຄວາມ ຈະແຈ ງແລະບ ແຂງແຮງ ບມ ນ ກວ ຊາການພຽງພ ທຈະບ ລຫານ / ປະຕ ບ ດ ໂຄງການ ຄວາມຮ ຄວາມສາມາດ ພຽງພ ບ ທ ຈະປະຕ ບ ດວຽກງານຫລ ນະ ໂຍ ບາຍ ບ ລມະສ ດອ ນຂອງ ອ ງການຈ ດ ຕ ງລ ດຖະບານທ ກ ຽວຂ ອງ ຄວາມກ ດດ ນຈາກບ ລສ ດ ນາຍທ ນ ແລະ ຜ ໃຫ ທນຊ ວຍເຫລ ອລ າ ບມ ພະນ ກງານພຽງພ ການປະສານງານລະວ າງ ການສ ສານຫວ າງພາກສ ວນທ ຈະປະຕ ທ ກ ມ ກ ຽວຂ ອງຍ ງບ ດ ພ ບ ດງານໂຄງ ການ ອງບ ດ ພ ຂາດງ ບປະມານໃນ ມຂ ຂ ດແຍ ງແລະການ ຊ ມຊ ນຂາດຄວາມຮ ຄວາມ ການຈ ດຕ ງ ປະສານງານທ ບ ດ ສາມາດໃນການ ປະຕ ບ ດ ລະຫວ າງອ ງກອນຫລ ປະຕ ບ ດນະໂຍບາຍ ໂຄງການ / ສານ ກງານທ ກ ຽວຂ ອງ ສງອ ນໆ ກະລ ນາ) ( ລະບ ຄ. ຄວາມເຂ ມແຂງຂອງອ ງກອນ ສ ານ ກງານ / 11. ໃຫ ທ ານປະເມ ນຄວາມອາດສາມາດພາຍໃນອ ງກອນຂອງທ ານຕ ກ ບການບ ງຄ ບໃຊ ນະໂຍບາຍ ແລະການປະຕ ບ ດໂດຍອ ງໃສ 3 ປະເດ ນສ າຄ ນ(. 1ການດ າລ ງຊ ວດ,. 2ຄ ນຄ າຂອງນ າແລະຊ ບ ພະຍາ ກອນທ າມະຊາດ,. 3 ກ ມເຄ ອນໃນອ າງໂຕ ງດຽວກ ນ). ແຂງແຮງ ຂ ອນຂ າງແຂງແຮງ ພຽງພ ແຂງແຮງ ບ ມ ບ ຫຍ ງໝ ດ 59

66 12. ທ ານຄດວ າອ ງກອນຂອງທ ານມ ຍ ດທະສາດການວາງແຜນໃນການສ າງເປາໝາຍຂອງອ ງກອນ ຈະແຈ ທ ງເພ ອນາພາພະນ ກງານ ແລະພາກສ ວນກ ຽວຂ ອງຕ າງໆ ໃຫ ບ ນລ ເປ າໝາຍນ ນໄດ? ບ ມແລະຂ າພະເຈ າໄດ ເຂາຮ ວມຂະບວນການ, ມແຕ ຂ າພະເຈ າບ ໄດ ເຂ າ, ຮ ວມຂະບວນການ ມ ບ 13. ທ ານຄ ດວ າອ ງກອນຂອງທ ານມ ຂະບວນການໃນການກວດສອບຫລ ທວນຄ ນບ ສ າລ ບການ ຊອກຫາໂອກາດແລະຄວາມສ ຽງຕ ກ ບສະພາບແວດລ ອມ? ມ ມ ບ 14. ພະນ ກງານທ ງໝ ດພາຍໃນອ ງກອນຂອງທ ານໄດ ມໂອກາດໄດ ແລກປ ຽນຂ ຄດເຫ ນນາກ ນ ຫລ ບແລ ວອ ງກອນຂອງທ ານ? ໄດ ມການສະທ ອນຄນຂ ມ ນເພ ອແກ ໄຂບ ນຫາໃຫ ຈະແຈ ງຂນບ? ມ ມ ບ ຮ ບ 15. ໃນແຕ ລະໜ ວຍງານຂອງທ ານມ ການປະສານງານກ ນຫ ເພ ບ ອການປ ບປ ງການດາເນນງານ? ຫລວ າແຕ ລະໜ ວຍງານມ ການຄວບຄ ມຫ າຍຈ ງເຮ ດໃຫ ການຮ ວມມ ຕ າງໆບ ໄດ ດ. ສ ງ ປານກາງ ທ າມະດາ ແຕ, ຕ ອງມ ການປ ບປ ງ ດ ບ ເລຍ ການປະຕ ບ ດງານ, ຫຍ ງຍາກ ມ ບ ຫຍ ງເລຍ 16. ໃນການປະເມ ນລະດ ບການສ ສານ ແລະການເຊ ອມຕ ຂ ມ ນຂອງແຕ ລະຂ ນ ແຕ ເທ ງຫາລ ) ມ, ແຕ ລ ມຫາເທ ງ ໃ ( ນໜ ວຍງານ ຂອງທ ານເປ ນແນວໃດ? ສ ງ ການປະສານງານມ ຂ ຈາກ ດແລະບ ດ ເທ າທ ຄວນ ຮ ບ 17. ທ ານຄ ດວ າການຈ ດສ ນງ ບປະມານເພ ອການປະຕ ບ ດໂຄງການ ແຜນງານຂອງອ ງກອນທ ານ /? ພຽງພ ຫລ ບ ພຽງພ ພຽງພ ບ ຮ ບ 18. ທ ານຄ ດວ າການນ າໃຊ ງ ບປະມານຂອງອ ງກອນຂອງທ ານມ ປະສ ດທ ພາບ ແລະເໝາະສ ມຫລ? ບ ແມ ນແລ ວ ແມ ບ ນ ຮ ບ 19. ທ ານຄ ດວ າໄລຍະເວລາໃນການປະຕ ບ ດວຽກງານໃນໂຄງການຂອງທ ານພຽງພ ຫລ ຍ ງ? ພຽງພ ພຽງພ ບ ຮ ບ ບ ຮ ບ ຮ 20. ອ ງການຂອງທ ານມ ງອ ສ ານວຍຄວາມສະດວກດ ານຂ ມ ນຂ າວສານພຽງພ ຫລ ເຊ ບ ນ:ຄອມພ ເຕ,ຫ ອງສະໝ ດ,ຊອບແວ ແລະອ ນໆ ວ ມ ມ ພຽງພ ບ, ມ ບ ບ ຮ 21. ອ ງກອນຂອງທ ານມ ການກວດກາແລະປະເມ ນຜ ນແບບໃດ? ເປ ນປະຈາ ເປ ນໄລຍະ ມ ບ ເລຍ ຮ ບ 22. ອ ງກອນຂອງທ ານມ ສາຍພ ວພ ນທ ເປ ນທາງການແລະບ ເປ ນທາງການກ ບອ ງກອນອ ດສະຫລະ ນໆຫລ ອ? ບ ມ ມ ບ ບ ຮ 60

67 23. ທ ານສາມາດປະເມ ນການຮ ວມມ ແລະການປະສານງານລະຫວ າງອ ງກອນຂອງທ ານກ ບອ ງ ກອນຜ ຮ ວມມ ອ ອມຂ າງ ໄດ ວ ບ າມ ຄວາມເຂ ມແຂງພຽງໃດ? ເຂ ມແຂງ ເຂ ມແຂງປານກາງ ເຂ ບ ມແຂງເລຍ, ຂ ດຂວາງການປະຕ ບ ດງານ 24. ອ ງກອນຂອງທ ານໄດ ມສ ວນຮ ວມແນວໃດໃນແຕ ລະໄລຍະຂອງໂຄງການ ການສ າງເຄ ອນໄຟຟ າ ນາຕ ກ? ກ ອນສ າງໂຄງການ ທາງກ ງ ທາງອ ອມ ໄລຍະຈ ດຕ ງປະຕ ບ ດ ທາງກ ງ ທາງອ ອມ ໄລຍະປະເມ ນ ທາງກ ງ ທາງອ ອມ 25. ທ ານຄ ດວ າຂ ສະເໜ ຂອງທ ານ(ກ ຄອ ງກອນຂອງທ ານເອງ)ໄດ ຖ ກພ ຈາລະນາໂດຍໂຄງການໃນ ລະດ ບໃດ ໃນແຕ ລະວາລະການປ ກສາຫາລ ສ ງ ປານກາງ ໜ ອຍຫ າຍ ມ ບ ເລ ຍ 26. ຕາມຄວາມເຂ າໃຈຂອງທ ານ ທ ານຄ ດວ າຄວາມທ ກຍາກ ແມ ນຫຍ ງ? ງທ ສ ຈ າເປ ນສ າລ ບການ ດາລ ງຊ ວດ ກ ຄເພ ອຫ ດຜ ອນຄວາມທ ກຍາກ ມ ຫຍ ງແດ? 27. ຕາມຄວາມເຂ າໃຈຂອງທ ານ ທ ານຄ ດວ າການສ າງເຄ ອນໄຟຟ ານ າຕ ກຈະສາມາດຫ ດຜ ອນ ຄວາມທ ກຍາກ ແລະ ປ ບປ ງຊ ວດການເປ ນຢ ຂອງຜ ໄດ ຮ ບຜ ນກະທ ບ ແລະ ປະເທດຊາດ ໄດ ຫ ໄດ ບ ແນວໃດ? ********************************************** ຖ າຫາກວ າມ ຄາຖາມຂ ໃດບ ຈະແຈ ງ າພາວ ນ ອ.ທ ານສາມາດຕ ດຕ ຫາ ນ, ໄດ ທ ເບ : ( ) ຫ ແຟກແບບສອບຖາມທ ເສ ດສ ມບ ນແລ ວມາທ ເບ : ( ) / ອເມ ຣ: mimivte@gmail.com ຂ ຂອບໃຈ 61

68 Appendix 3a: Power Projects in Lao PDR Developed Before

69 Appendix 3b: Power Projects in Lao PDR Operational (August 2011) 63

70 Appendix 3c: Power Projects in Lao PDR Under Construction (August 2011) 64

71 65

72 Appendix 3d: Power Projects in Lao PDR Planning Stage (PDA Stage) (August 2011) 66

73 67