Final Report

“Improving Hydropower Project Decision Making Processes in Mekong Basin: Case Studies of Lower Sesan 2 and

Kamchay Hydropower Projects, Cambodia”

Royal University of Phnom Penh (RUPP)Department of Environmental Science1

December 2013

1 Ham Kimkong ( Senior researcher/ lecturer and project team leader), Hay Samchan, Sok Thea (Associate Researcher), Sim Vichet, Lor Rasmey (Researchers)

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TABLE OF CONTENTS

TABLE OF CONTENTS 2LIST OF FIGURES 4LIST OF TABLES 4LIST OF ABBREVIATION 5ACKNOWLEDGEMENT 7RESEARCH KEY FINDINGS 8Chapter 1: Introduction 11

1.1. Cambodia’s Development and Energy Challenges.......................................................111.2. Problem Statement............................................................................................................131.3. Objectives...........................................................................................................................141.4. Research Questions..........................................................................................................15

Chapter 2: Methodologies 162.1. Site Selection......................................................................................................................162.2. Research Method...............................................................................................................162.3. Theoretical Framework.....................................................................................................17

Chapter 3: Overview of Hydropower Development 203.1. Global and Regional Hydropower Development............................................................203.2. Hydropower Potentials and Plan in Cambodia..............................................................213.3. Justification of Hydropower Dam Development in Cambodia......................................233.4. Problems Caused by Hydropower Development in Cambodia....................................25

Chapter 4: Decision Making in Hydropower Development 274.1. Investment Process in Cambodia....................................................................................274.2. Main Existing Regulation Concerning Hydropower Project in Cambodia..................294.3. Hydropower Investment Process.....................................................................................314.4. EIA Approval Process in Cambodia................................................................................344.5. Key Institutions Involve in Hydropower Decision Making.............................................374.6. Civil Society on Hydropower.............................................................................................43

4.6.1. Role of NGOs on Hydropower Development.........................................................434.6.2. Influence of Civil Societies on Hydropower Development....................................45

4.7. Resettlement Policies Change.........................................................................................46Chapter 5: Case Studies 47

5.1. The Lower Sesan 2 Hydropower Project........................................................................475.1.2. Predicted Impacts of LS2 Dam....................................................................................485.1.3. Lower Sesan 2 Dam Decision-Making Process.........................................................495.1.4. Stakeholder’s Participations.........................................................................................515.1.5. Compensation and Resettlement Mechanism and Policy........................................525.1.6. Compensation and Resettlement Mechanism...........................................................535.1.7. Cultural and Spiritual Impacts......................................................................................545.1.8. Shift in Political Support................................................................................................565.2. Kamchay Hydropower.......................................................................................................585.2.1. Background of Kamchay Hydropower.........................................................................585.2.2. Project’s Purpose...........................................................................................................595.2.3. Kamchay Dam Decision Making Process...................................................................605.2.4. Stakeholder’s Participations.........................................................................................615.2.5. Impact after Construction of Kamchay Dam...............................................................625.2.6. Design Issues of Kamchay Hydropower Dam............................................................655.2.7. Financial Flows of Kamchay Hydropower Dam.........................................................665.2.8. Livelihood Reconstitution..............................................................................................67

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Chapter 7: Conclusion 69Bibliography 71

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LIST OF FIGURES

Figure 1: The Use of Impact Assessment to Understand Drivers and Enablers.......................18Figure 2: General Application Process of Qualified Investment Project (QIP)..........................27Figure 3: Investment Process of Hydropower Project..................................................................33Figure 4: EIA Approval Process in Cambodia...............................................................................35Figure 5: Analysis on Gaps Concerning Cooperation between Government and NGOs...........45Figure 6: Map of Lower Sesan 2 Hydropower Dam in Stung Treng Province...........................47Figure 7: Process of LS2 Hydropower Decision Making..............................................................50Figure 8: Structure of LS2 Dam’s Compensation/Resettlement Committee.............................54Figure 9: Location of Kamchay Hydropower..................................................................................58Figure 10: Kamchay Hydropower Decision Making Process.......................................................60Figure 11: Electricity Distribution and Financial Flow of Kamchay Hydropower Dam..............67

LIST OF TABLES

Table 1: Selected Study Areas and Number of Samples.............................................................16Table 2: Number of Field Observation Activities in Kampot and Stung Treng Provinces........16Table 3: Key Informants Met............................................................................................................17Table 4: Existing, under Construction, and Planned Dam in LMB..............................................21Table 5: Commission Plan of Hydropower/Coal-Fire Stations by the Government from 2009-2013.....................................................................................................................................................21Table 6: Current Hydropower Dams under Construction and Development in Cambodia......23Table 7: Predicted Impacts of Lower Sesan 2 Dam......................................................................26Table 8: Law and Regulations Relevant to Hydropower Development Cambodia...................29Table 9: Roles of Local Authorities..................................................................................................41Table 10: Roles of Provincial Departments....................................................................................41Table 11: The Promised Benefits from Lower Sesan 2 Hydropower Dam................................48Table 12: Timeline of Political Seats in the National Assembly...................................................56Table 13: Commune/Sangkat Council Election Result in LS2 Dam Reservoir.........................57

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LIST OF ABBREVIATION

3SPN : 3S River Protection NetworkASEAN : Association of Southeast Asian NationsADB : Asian Development Bank ANZ : Australia and New Zealand Banking Group LimitedBOO : Build-Own-OperateBOOT : Build-Own-Operate-TransferBOT : Build-Operate-TransferCDC : Council for Development of CambodiaCDRI : Cambodia's Leading Independent Development Policy Research

InstituteCENTDOR : Center for Development Oriented Research in Agriculture and

Livelihood SystemsCEPA : Culture and Environment Preservation AssociationCI : Conservation InternationalCIB : Cambodia Investment BoardCPP : Cambodian’s People PartyCRC : Conditional Registration CertificateCIDA : Canadian International Development AgencyCNMC : Cambodian National Mekong CommitteeCNRP : Cambodian National Rescue PartyCOM : Council of MinistersCSO : Civil Society OrganizationCSR : Corporate Social ResponsibilityEAC : Electricity Authority of CambodiaEDC : Electricite du CambodgeEMP : Environmental Management PlanESIA : Environmental and Social Impact AssessmentEVN : Electricity of Viet NamFACT : Fisheries Action Coalition TeamFDI : Foreign Direct InvestmentFFI : Fauna and Flora InternationalFGD : Focus Group DiscussionFRC : Final Registration CertificateFS : Feasibility StudyFUNCINPEC : National United Front for an Independent, Neutral, Peaceful, and

Cooperative CambodiaGMS : Great Mekong SubregionGDP : Gross Domestic ProductHECEC : Hydroelectric Commission Enterprises CorporationHP : HydropowerIA : Implementation Agreement ICEM : International Center for Environmental ManagementIRC : Inter-Ministerial Resettlement CommitteeIUCN : International Union for Conservation of NatureJICA : Japan International Cooperation AgencyKCC : Key Consultant CambodiaKHR : Khmer RielkWh : Kilowatts per hourLMB : Lower Mekong BasinLMR : Lower Mekong River

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LNC : Letter of Non-ComplianceLS2 : Lower Sesan 2 MEF : Ministry of Economic and FinanceMIME : Ministry of Industry, Mines and EnergyMLMUPC : Ministry of Land Management, Urban Planning and ConstructionMPWT : Ministry of Public Works and Transport MOE : Ministry of EnvironmentMOU : Memorandum of UnderstandingMOWRAM : Ministry of Water Resources and MeteorologyMRC : Mekong River Commission MW : Megawatts NA : National AssemblyNEC : National Election CommitteeNGO : Non-Governmental Organization NIS : National Institute of StatisticsNSDP : National Strategic Development PlanPAM : Project Approval MinistryPE : Political EcologyPO : Project OwnerPPA : Power Purchasing AgreementPDOA : Provincial Department of AgriculturePDOE : Provincial Department of EnvironmentPDOIME : Provincial Department of Industry, Mines and EnergyPDOWRAM Provincial Department of Water Resources and MeteorologyPECC1 : Power Engineering Consulting Joint Stock Company 1QIP : Qualified Investment ProjectRCC : River Coalition of CambodiaRGC : Royal Government of Cambodia SAWAC : SAWAC Consultants for DevelopmentSRP : Sam Rainsy PartyTVK : Television of Kampuchea USD : United States DollarUNTAC : United Nations Transitional Authority in CambodiaWEF : World Economic Forum

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ACKNOWLEDGEMENT

On behalf of project’s researcher team members of Royal University of Phnom Penh, Department of Environmental Science, would like to sincerely thank to Dr. Kim Geheb, CPFW’s Mekong Basin Leader, Dr. Nathanial Matthews CPWF’s MK8 regional project coordinator for their research guidance, technical advices and encouragement to our Cambodia’s research team. Indebtedness, authors would like to express ours sincerely gratitude to the CGIAR/Challenge Program on Water and Food (CPWF) for financial support to this research project, without this grant the study would not be possible to produce book chapter and project report. Very gratitude and thank to Dr. Pech Sokhem, Dr. Sam Nouv for their valuable technical advises and assistances to research team.

The special thanks to all concerned provincial and local government officers at both Kampot and Stung Treng provinces, colleagues and students of Department of Environmental Sciences, Royal University of Phnom Penh for their kind supports and cooperation in providing information and respondents. Sincere gratitude is to people and communities for responding to all research questions and extended their warm hospitality and kind cooperation. Last, but not least; extremely grateful to all friends for their patience and moral support throughout the period of this research.

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Executive Summary

The energy shortage is seen as a challenge against the continuing effort of the government in Cambodia’s reconstruction and socio-economic development. Cambodia has been focusing on its hydropower potentials to solve this challenge as well as to sustain energy sector in the future. As this hydropower development has been gradually increasing, there has been lots of social and environmental issues emerge from this development. Concerns have been raised over how efficient is the decision making of hydropower development in Cambodia. There are certain literatures showing the limitation of hydropower decision making in Cambodia which, as a result, fail to guarantee equal benefit and the interest of the weakest segments of society. This report is prepared in an attempt to bring to light hydropower decision making processes in Cambodia which is the topic of hot debate both in Cambodia as well in the region. To understand the hydropower decision making, this study lays out 3 main objectives: 1) to identify key drivers that influence hydropower development; 2) to understand EIAs and SIAs influence on HP decision-making; and 3) to identify ‘power in relation’ in HP decision-making in Cambodia.

The study focuses on two case studies including Lower Sesan 2 (LS2) hydropower project in Stung Treng province and Kamchay hydropower project in Kampot province, starting with the review and analysis of related documents including regulation, plan and policy and the previous literatures. Field observations were organized at both target areas to see the actual target study sites, to introduce the project to stakeholders, and to build network with all key stakeholders and partners at provincial levels. In total, 106 households in Stung Treng province were interviewed, 114 persons were met and discussed during the field observation phase, and 44 Key Informants were interviewed in the 2 targets areas. To understand the phenomenon hydropower decision making process in Cambodia, the Political Ecology (PE) is used to analyse the data and information to check the power relations between different multiple layers at local, district, provincial, national, and regional level, and look at how decisions are made regarding to hydropower development in Cambodia. This research uses Environmental Impact Assessment process of hydropower projects as a lens so that information of interaction among all stakeholders can be accessed for analysis.

RESEARCH KEY FINDINGS

With considerable high economic growth during the last decade and along with the country’s intension to move into upper-middle income country by 2030, Cambodia is in need of energy, especially the electricity. The demand of electricity was also pressured when the main economic activities is moving from traditional agriculture to ward industry and service sectors. The energy challenges in Cambodia includes low electricity supply capacity, high electricity cost, limited rural electrification, and continued dependency on imported fuel oil and on electricity import from neighbouring countries. This electricity issues is highlighted as a major disincentive to potential investors, which is eventually the barrier to the effort of economic development in Cambodia. As forecasted, the demand of electricity is also on the trend of big surge and, even some effort to control the demand site, the government needs to increase the country’s generating capacity of 20% to stabilize this electricity sector. Even though electricity export have not been loudly spoken by the government, it is apparent that the government still has the intension to export energy to neighboring country if we consider the intension to build huge dams on Mekong

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River’s mainstream, as well as the hydropower locations which placed to be easily accessed by cross-country power grids such in the areas near national border.

Until the fourth legislation of the government of Cambodia, certain small and large-scale hydropower dams as well as thermal coal power plant have been developed and put under operation. According to the National Sector Review of Hydropower done by Ministry of Industry, Mine and Energy in 2003, the government has been focusing on around 60 possible hydropower sites including 14 priority projects, which could produce power capacity varying from 1,900 MW to 4,700 MW according to the scale of Sambor Hydro which will be built on Mekong Mainstream. Up to now, there are four hydropower development projects under construction including Lower Russei Chhrum, Atay, Tatay and Lower Sesan 2 hydropower, while at least 12 others are under the MOU of feasibility studies.

The selection of hydropower as a corner stone of energy policy of Cambodia was partly pushed by the availability of country’s resources as well as the global and regional trend toward renewable energy, for example, the 15% of renewable energy in the total installed power capacity by 2015 set by ASEAN. The selection of hydropower, especially the large scale one, is also encouraged by the belief that large scale is more efficient and the availability of financial resource and the investor. Royal government of Cambodia (RGC); acknowledges the need to consider social and environmental impacts caused by hydropower dams, meanwhile raises that the tributary hydropower dams would cause less negative impacts than the mainstream ones, and this is why, Cambodia started building dam on tributaries to meet the electricity demand, while dam on mainstream can be considered after 2030. Moreover, the government is seen to focus more on macro perspective, rather than micro perspective when talking about cost and benefit of dam which leads to the scarifying of certain resources to get the electricity. While complaints are raised by civil societies, the government claims that efforts were done to get the win-win situation.

The actual negative impacts especially on society, even though strongly concerned by civil society, was not huge so far, because until now, the dams under operation are not large in scale and most of them were built in highland and mountainous areas outside Mekong Basin, where resettlement is not big issues, and some time the downstream villagers did not strongly depend on the water such as the case of Kamchay dam. However, the people in the northeastern part of the country like Ratanakiri and Stung Treng provinces have been seriously suffered from the trans-boundary impacts caused by dams built in the upper part of Sesan River especially the Yali Fall dam in Viet Nam territory. Adding to the existing trans-boundary impact, the people living in the 3S areas are worrying about the possible negative impacts caused by the planned Lower Sesan 2 (LS2) dam in Stung Treng province. Certain studies show that if LS2 is to be built as planned, where will be certain issues such as relocation of affected people, decreased fish stock, hydrological changes and the impact on the Tonle Sap Lake, blocking of fish migration and sediment flows. There are mounting concerns from civil societies over the impacts and the issues of public participation, the quality of EIA, as well as the hydropower planning and design, which are seen as topics of intensive argument between the government and civil societies. Moreover, the information regarding the condition and process of hydropower investment are very limited to public access, which causes the suspicion especially among civil societies over the transparency and the benefit sharing of the project.

Until now, Cambodia does not has direct law on hydropower development, but relevant articles within other laws have been used. While EIA law is in its drafting process, the Sub-decree of EIA established in 1999 is used instead. The implementation of EIA was also seen to be under criticism when development projects are considered more important compared than the need to study its environmental and social impacts. There are certain facts behind this argument like

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small proportion of running investment projects with EIA, late EIA study, capacity and resources of EIA department of MoE, as well as the interaction with related institutions, especially with the project’s leading ministry. Quality of EIA report, according to the percept of interviewed civil societies, is low because of limited participation. However, there are also progresses during which civil societies are selectively allowed to participate in the consultative processes.

Civil society was seen to play active role in the issues of hydropower development. The majority of affected people who turn to depend civil society organizations said that they has less trust on the government existing system to help them to solve their problem, so they turn to medias, civil society organizations and even opposition party. The case of the change of political support from the ruling party to the opposition party during the 2012 commune/Sangkat election is a message that the government needs to improve the consideration and communication with the affected people to make sure that people’s demands are heard and problems are considered and solved. As noticed by civil societies, the government has been improving, even though not significantly, the condition of compensation and resettlement, which can be understood as an attempt satisfy the affected people.

From the 2 case studies, the study also found that benefit sharing is still a challenge that the government need to seriously consider both during the impact assessment phase and the implementation of all promised mitigation measures as well as the livelihood restoration programs. Kamchay case, even though most people do not feel any sever impact, local people, especially those who are living close to the dam are not happy when their local resources are used to supply only those who are mile away from the dam. Moreover, the implementation of the promised livelihood supporting programs is unclear even though dam was put under operation for years. The case of Kamchay will be lesson learnt to the government to make sure that the other dam development, especially LS2 dam will not fall into this situation that the effect will be much bigger than Kamchay am. Deeper study over the impact must be considered and included. This includes direct and indirect impact on both upstream and downstream villages. Moreover, the cultural and spiritual assets of the local people must be considered seriously to maintain the way of life of the people which is generally seen as a movement toward sustainable development.

Finally, it is also worth notice that until recently almost all of the approved and commissioned hydropower development projects in Cambodia are technically and financially supported by foreign donor or private investment companies. But recently, there is a turning point where local private investors have a space in the investment of large scale hydropower project LS2 in the form of joint venture with foreign investors. Cambodia needs foreign investors because Cambodia has limited resources in such development. In the case of LS2 dam, it is also noted that there is a change of hydropower investor from Viet Nam to China which is playing significant role in hydropower as well as other infrastructure development in Cambodia. Even though the change of investor’s shares in the case of LS2 is claimed to be because of the financial problem of Viet Nam side, the move toward China is seen to be in parallel with the current strong economic and political ties between the two countries.

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Chapter 1: Introduction

1.1. Cambodia’s Development and Energy Challenges

After Khmer Rouge regime, the 1980s was occupied by Planned Economy. The 1991 Paris Peace was the main foundation setting Cambodia on a new path toward free market and democracy with the Constitution and the firstly elected Royal Government of Cambodia (RGC) in 1993 (RGC, 2006). Since then, aid agencies and international organizations started to pour in and bring significant contribution to the reconstruction of the countries (JICA, 2002), and Cambodia has struggled to transform itself from planned economy to free-market economy and encourage investment, trade and private sector development within the Great Mekong Sub-region (GMS), the regional of Association of Southeast Asian Nations (ASEAN) and East Asian as well as global context (CDRI, 2012).

Cambodia’s economic today is significantly supported by a mixture of agriculture, industry and service. Four sectors that remarkably contributed to the growth were garments and footwear, hotel and restaurant, construction, and agriculture. In 2010, agriculture shared 27.4 percent of the GDP, industry 26.4 percent and the services 40.6 percent (CDRI, 2012).The economy experienced remarkable growth with the average annual increase of 7.8 percent between 1994 and 2010, which brought the people with the increase of per capita income from USD 240 to USD 735 respectively. Foreign Direct Investment (FDI) in the second half of the 2000s increased to USD 604 million, and in aggregate from 1993 to 2010, FDI reached USD 5.58 billion which accounts for 34 percent of the total private investment in Cambodia (CDRI, 2012).The rate of people living below the overall poverty line has been reduced more than one percent annually down from 34.7 percent in 2004 to 30.1 percent in 2007 (RGC, 2009). Cambodia today is in transition from the low income to lower middle-income country (USD 1025 - USD 4035) (CDRI, 2013), the status identified by World Bank. With the country’s per capita GDP in 2012 of USD 970, and the expected annual increase of over 7 percent, the Prime Minister of Cambodia expressed his vision that Cambodia will move into upper-middle income country by 20302.

Along with development prosperity, Cambodia has been facing many challenges which need to be solved to sustain economic development. Energy issue is seen as one of the challenges against the government’s efforts in reconstruction and socio-economic development of the country (MIME, 2003). The energy issue includes low electricity supply capacity, high electricity cost, limited rural electrification, and continued dependency on imported fuel oil. In 2009, the electricity generation capacity in Cambodia reached 372 megawatts (MW) but heavily depended on imported diesel and heavy fuel oil up to 91.4% compared to other energy sources like hydropower plants 3.6%, biomass and wood fuel plants 1.6%, and coal 3.5% (ADB, 2011). In 2007, residential electricity consumers used 49% of the total electricity supply, followed by 15% by industry, 26% by commercial users, and 10% by the administrative sector (RGC, 2009).

The electricity demand is on the increasing trend with the annual growth rate of around 19%country wide, and 25% in Phnom Penh City3, which needs the government to achieve the annual increase of generating capacity of 20% to stabilize electricity sector (MIME, 2013). In 2010 total electricity supply in Cambodia increased to 2,203.18 GWh within the installed capacity of 537 MW and 40% of total electricity production was imported from

2 Cambodia Daily Newspaper, Hun Sen Reaches for Ambitious Income Target, http://www.cambodiadaily.com/archive/hun-sen-reaches-for-ambitious-income-target-18766/, (accessed 04 No-vember 2013)3 Presentation by Victor Jona on Cambodia Energy Status and Its Development during the 2011 Cambodia Outlook Conference A Partnership of CDRI and ANZ Royal Bank on 16 March 2011, At Phnom Penh Hotel, Phnom Penh, Cambodia

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neighbouring countries including Viet Nam (67%), Thailand (32%) and Lao PDR (1%) with the total capacity of around 225 MW, 48% increase compared to the figure in 20094. Late 2012 high ranking officers from the Ministry of Industry, Mines and Energy (MIME) indicated that the electricity supply for the whole country during the year reached 1,000 MW, while up to 400 MW was consumed by only Phnom Penh City5. The demand is expected to increase up to 1,349 MW by 2015 and to 2,401 MW by 2020 (ECA, 2010).

The electricity consumption increase is caused by certain factors. Firstly, Cambodia’s population growth with the annual rate of 1.54% from 11.4 million in 1998 to 13 million in 2008 probably explains the increase of the country’s electricity demand (NIS, 2008; NIS, 1998). The consumption increase is also deliberately planned. The intention to increase electricity supply in Cambodia by the RGC was articulated in the country’s 1994 Power Sector Development Policy, which aimed at providing an adequate electricity supply throughout the country (MIME, 2003). This policy was integrated in the RGC’s Rectangular Strategy Phase I and II, which focuses on planned economic growth from 2006 to 2013. In these two strategic plans, the development of electricity generating and transmission capacity is part of the government’s effort to rehabilitate old, and build new, physical infrastructures throughout the country (RGC, 2006; RGC, 2009). Secondly, economic growth has also contributed to the increased electricity consumption. The GDP per capita in Cambodia grew from approximately USD 277 in 2000 to USD 830 in 2010 (NIS, 2010). This growth has been driven by the growth of garments and footwear, hotel and restaurant, construction, and agriculture sectors (CDRI, 2012) which is believed to put more pressure on existing electricity shortage. The annual electricity demand per capita in 2006 was only 48 kWh (World Bank, 2006) while in 2010 it grew to 159.2 kWh6. Thirdly, access to the electricity grid is also another catalyst of electricity consumption growth. The number of people with access to electricity was less than 15% of Cambodia’s population in 2006 (World Bank, 2006), but in 2010 national electrification reached 29% of Cambodia’s population7. In 2010, annual electricity demand in Phnom Penh was by 25%, where only 1.5 million people reside8. Almost 100% of households in urban areas were electrified; the same was true of only 12.3% of rural households9.

In general, the electricity price is in Cambodia is very high and higher than other countries in ASEAN countries. The electricity price for residential area is from USD 0.08 to USD 0.15 per kWh; for commercial purpose from USD 0.12 to USD 0.16 per kWh; and for industrial purpose from USD 0.12 to USD 0.15 per kWh (CDRI, 2012). However, the variation of the tariff is significant throughout the countries depending on what source of electricity the people use and what location they are living at. The electricity tariff can reach up to USD 0.18 per kWh in Phnom Penh and up to USD 0.3 per kWh in provincial town and up to USD 0.75 to USD 1.25 per kWh in the remote areas where electricity is generated by small-scale private body (Middleton & Sam, 2008). According to figure from EDC in 2007, the total sale of electricity (from EDC, Independent Power Producer, and Import) was 1,222.52 Gwh 4 Presentation by Victor Jona on Cambodia Energy Status and Its Development during the 2011 Cambodia Outlook Conference A Partnership of CDRI and ANZ Royal Bank on 16 March 2011, At Phnom Penh Hotel, Phnom Penh, Cambodia5 Phnom Penh Post Newspaper, Sustainable Energy in Cambodia Plans Target by 2030, http://www.phnompenhpost.com/National/sustainable-energy-in-cambodia-plans-target-by-2030.html, (accessed 10 January 2013)6 Presentation by Victor Jona on Cambodia Energy Status and Its Development during the 2011 Cambodia Outlook Conference A Partnership of CDRI and ANZ Royal Bank on 16 March 2011, At Phnom Penh Hotel, Phnom Penh, Cambodia7 Ibid8 Phnom Penh Municipality, Facts about Phnom Penh, http://www.phnompenh.gov.kh/phnom-penh-city-facts-99.html, (accessed 15 July 2013)9 Presentation by Victor Jona on Cambodia Energy Status and Its Development during the 2011 Cambodia Outlook Conference A Partnership of CDRI and ANZ Royal Bank on 16 March 2011, At Phnom Penh Hotel, Phnom Penh, Cambodia

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producing the 2007 revenue of USD 231 million. The amount of the electricity was consumed by 286,660 users, and 35.3% of the consumption was by 177,124 residences across the country in 16 cities and provinces (EDC, 2007). Therefore, with this figure, the average rate of electricity in 2007 is around USD 0.19 per kWh and the annual electric utilities paid by each residence who can access and effort to pay was around USD 460 which was more than two third of GDP per capita of the year which was only USD 623.

Beyond high price, electricity supply in Cambodia is unreliable. Recently, there are frequent electricity blackouts, especially in Phnom Penh, where around 40% of the total electricity supply is consumed in late 201210. Of course, the electricity blackout irritates and affects the quality of life of the people, but it has been the concern of some businesses institutions that it reduces the efficiency of their production. To cope with this, those business organization use own generators from which they have to pay more for gasoline. This expensive and unreliable energy supply is highlighted as a major disincentive to potential investors (Mark, 2012). For instance, AMRU Rice Cambodia, one of the biggest rice exports, had complained that during dry season the company has faced with electricity cut offs at least two hours per day which slows down the company’s productivity11. As a result, government has set up power sector policy and established power development plan 2008-2020 to response to the demands including the development of domestic hydropower projects12. As policy, the government sets the target that by 2020 all villages in Cambodia will access electricity by different kinds of electricity sources and by 2030 at least 70% of the people in Cambodia will be accessible to quality electricity grids13. In addition, by 2020, Cambodia would be capable to export electricity more than 4,000 MW to neighbour countries14.

Responding to these problems, the government focuses on two solutions: increasing the supply side while controlling the demand side. The RGC has set the target that, by 2020, all villages in Cambodia will access to electricity from whatever sources, and that by 2030 at least 70% of Cambodia’s people will have access to a quality electric grids which are more reliable15. Even though Cambodia electricity consumption is still lower than most of the ASEAN nations, the government still consider controlling the demand side. Along with 2012 commitment in the ASEAN to reduce energy intensity by 8% from 2005 level to 2015 (ASEAN, 2012), Cambodia has, in 2008, issued a circular to raise the awareness of electricity saving among the public and guided all governmental institutions to follow energy saving rule including the crackdown on electricity stealth (RGC(a), 2008). Moreover, Cambodia has an electricity tariff policy which is seen to be pro-poor, meaning that the tariff is lower for the consumption less than 200 kWh16 and this is understood to contribute to the control of electricity demand side.

1.2. Problem Statement

High energy cost, inadequate and unreliable sources of powers is one of the issue affecting both national and GMS infrastructure program for connectivity which are critical for future growth and development (WEF, 2011), while the government of Cambodia acknowledges

10 Phnom Penh Post Newspaper, Blackouts Leading to Reduced Production, http://www.phnompenhpost.com/business/blackouts-leading-reduced-production, (accessed 10 January 2013). 11 Phnom Penh Post Newspaper, Cambodia's Top Ten Rice Exporters Elected, http://www.phnompenhpost.com/business/cambodias-top-ten-rice-exporters-elected, (accessed 10 January 2013)12 Presentation by Victor Jona on Cambodia Energy Status and Its Development during the 2011 Cambodia Outlook Conference A Partnership of CDRI and ANZ Royal Bank on 16 March 2011, At Phnom Penh Hotel, Phnom Penh, Cambodia13 Presentation by Victor Jona on the Energy Efficiency Challenge and Opportunities in Cambodia during the 2nd EAS Energy Efficiency Conference on 31 July- 2012 August at Sofitel Phokeatra Hotel, Phnom Penh Cambodia14 Ibid15 Ibid16 Interviewed with representative officer of MIME on 23 August 2013

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that the country is facing energy issue which was seen to be a challenge against the government’s efforts in reconstruction and socio-economic development of the country (MIME, 2003). Cambodia’s electricity demand is on the upward trend with the annual rate of around 19%in the whole country17. In 2010, Cambodia imported 40% of total electricity production from neighbouring countries such as Viet Nam (67%), Thailand (32%) and Lao PDR (1%) and this the level of import increase drastically18.

Cambodia’s electricity costs are still among the highest in the Greater Mekong Sub-region and in the world due to the high cost of imported diesel (King et al, 2007; World Bank, 2006). As a matter of fact, in 2009, up to 91.4 percent of energy is from imported diesel and fuel oil (ADB, 2011). Moreover, electricity supply in Cambodia is unreliable, which are all seen as one of the obstacles for the motivating the investor to come in Cambodia (Mark, 2012).This shortage of power supply was also seen as a challenge against the continuing effort of the government in reconstruction and socio-economic development of the country and Cambodia needs to utilize its hydropower potential to meet future electricity demand as well as to gradually become independent from energy imports and fuel energy (MIME, 2003).

Generally, hydropower was thought to be a comparatively clean, low-cost and renewable energy source (ADB, 2011), while at the same, lots of social and environmental issues emerges from the development. There are concerns over how the decision making of hydropower development is well done for the sack of development or not. In Cambodia, Lao PDR and Viet Nam, the transparency in the decision making process is still low in spite of legal frameworks which are potential to regulate more sustainable hydropower outcomes. The decision making was found to be easily vulnerable to the influence by developers and other actors with money and access to political power. Moreover, the decision making does not guarantee equal benefit and the interest of the weakest segments of society was not effectively responded (Diana Suhardiman et al., 2011).

In Cambodia, 14 potential sites were identified for hydropower projects across Cambodia including Sambor Hydropower Project which is planned to construct on Mekong mainstream and set to be commissioned in 2016 (MIME, 2003). Until now the decision making of development of those hydropower dams has been inaccessible in general; energy planning process currently remains closed to public participation and civil societies are arguing for a more sustainable energy option rather than hydropower development19. Furthermore, the existing and ongoing project issues emerge around the Environmental and Social Impact Assessment (ESIA). For example, in Lower Sesan 2 and other existing hydropower dams in Cambodia, ESIA reports were rejected by civil societies and the affected people mainly because of lack of public participation and quality of the report (Mark, 2012; Biard, 2009).

This study is expected to contribute to find out factors causing such flaws in hydropower decision making and come up with recommendations toward a better hydropower decision-making in Cambodia, as well as in Mekong Region. To the discover above-mentioned factors, impact assessment process is used as a lens to understand the drivers and enablers of hydropower decision-making process, during which there exist diversified involvements from public sphere including the both powerful and vulnerable actors interacting with each other around the issues.

1.3. Objectives To identify key drivers that influence hydropower (HP);

17 Presentation by Victor Jona on Cambodia Energy Status and Its Development during the 2011 Cambodia Outlook Conference A Partnership of CDRI and ANZ Royal Bank on 16 March 2011, At Phnom Penh Hotel, Phnom Penh, Cambodia18 Ibid19 International River, www.internationalrivers.org/campaigns/cambodia, (accessed 23 July 2013)

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To understand EIAs and SIAs influence on HP decision-making; and To identify ‘power in relation’ in HP decision-making

1.4. Research Questions What are the drivers that influence HP decision-making? To what extent do EIAs and SIAs influence HP decision-making? What do the ‘power networks’ in networks’ in HP decision-making look like? Who are key financers and why? Who are the winners and losers due to the environmental changes?

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Chapter 2: Methodologies

2.1. Site Selection

The study focuses on two different case studies including Lower Sesan 2 (LS2) hydropower project in Stung Treng and Kamchay hydropower project in Kampot provinces. The Kamchay dam locates in part of Bokork National Park. It is a large dam and it has operated since 2011. There are two villages are located in the downstream of the Kamchay dam are selected for interviews where the upstream is a part of National Park with no residential setup.

LS2 is the planned hydropower dam set to be constructed in 2014 and is the second large dam ever built in Cambodia locates in Mekong River Basin where there exists three Rivers: Sesan, Srepok and Sekong. For diversification purpose, three villages in the upstream (in the planned reservoir), and two villages in downstream of the dam were selected.

The study conducted household interviews with 106 households in Stung Treng province stated as below:

Table 1: Selected Study Areas and Number of Household Samplesprovince District Commune Village SampleStung Treng Sesan Phluk Phluk (downstream) 25

Banbong (downstream) 15Kbal Romeas Kbal Romeas (upstream) 26Srekor Srekor1 (upstream) 23

Srekor2 (upstream) 17Total 1 district 3 Communes 5 villages 106

2.2. Research Method

Document Review and Analysis MethodReview and analysis of related documents, such as constitution, land law, water law, environmental law, regulations or principles for hydropower decision making, EIA, previous literatures, journals, books, reports written by many different scholars. The findings from the literature review are the integral part of the entire research process and can make value contribution to the research. Precisely, by reviewing those documents, the team could understand and gain more knowledge of many issues surrounding the research topic.

Field ObservationThis approach aim to see the actual target study sites, introducing the project, clarifying some issues, building network with all key stakeholders and partners at provincial levels before selecting samples and conducting interview. Both individual and group meeting are conducted during the field observations. The project plans to meet local villagers, local authorities, provincial departments, provincial vice governor, hydropower company’s representatives, and civil societies.

Recently, the team has conducted a few field observations in the two target sites already. Each of the field visit have provided the team loads of the understanding of many issue regarded to the topic and especially given us a great opportunity to build up the all concerned stakeholders as a very strong network.

Table 2: Field Observation Activities in Kampot and Stung Treng ProvincesNo. Field Survey Time Number of people met

1 Stung Treng province 12-15 January 2013 22 person 2 Kampot province 14-16 February 2013 16 person

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3 Stung Treng province 06-09 April 2013 5 person4 Stung Treng province 11-17 May 2013 59 person5 Kampot province 27-28 October 2013 12 person

Total 114 persons** This number include interviewed KI below

Key Informant Interview, Focus Group Discussion and Household QuestionnairesChecklist and key informant interview and questionnaires were applied in the processes of the study. In total, 106 samples were selected for conducting in-depth interview in Stung Treng province as mentioned in Table 2 above. In addition, key informant interview was conducted with representatives from the government agencies International Organizations and Local Non-Governmental Organizations. Information gathered from the interview was processed and transcribed. Some useful analysis tools such as Ms. Excel were applied.

Table 3 shows Key Informant interview conducted in Phnom Penh that are representatives from the government institutions in national level and NGOs.

Table 3: Interviewed Key InformantsNo. Institutions Time Number

1 Deputy Director, EIA Department, Ministry of Environment (MOE)

14/12/2012 1 person

2 NGO Forum on Cambodia 06/03/2013 2 persons3 International Union for Conservation of Nature (IUCN) 13/03/2013 2 persons4 Tonle Sap Authority (Government agency) 15/03/2013 1 person5 Ministry of Water Resource and Meteorology (MOWRAM) 18/03/2013 1 person6 Deputy Director General, Department of Energy, Ministry

of Industry, Mines and Energy (MIME)19/03/2013 1 person

7 Culture and Environment Preservation Association (CEPA) 19/03/2013 1 person8 Center for Development Oriented Research in Agriculture

and Livelihood Systems (CENTDOR)23/03/2013 1 person

9 Fisheries Action Coalition Team (FACT) 12/08/2013 2 persons10 Fauna & Flora International (FFI) 19/08/2013 2 persons11 Deputy Director General, Department of Energy, Ministry

of Industry, Mines and Energy (MIME)23/08/2013 1 person

12 Technical Director, Conservation International (CI) 30/08/2013 1 person13 4 NGOs’ representatives, 5 Provincial Departments’ Rep-

resentatives (PDoE, PDOWRAM, PDoA, PDoIME), 4 Community’s representative (Pluk, Srekor, Kbal Romeas communes), and 1 preventative from FA

12-15 Jan-uary 2013

14 persons

14 4 representative of local authorities (Sesan district, Pluk commune, Kbal Romeas commune, Serekor commune) and 1 representative from FA

06-09 April 2013

5 persons

15 2 Commune Chiefs (Mak Prang and Kampong Kreng of Kampot province), 5 representatives from provincial de-partment in Kampot (PDoT, PDoE, PDoIME, PDoWRAM, PDoA), 1 representative from FA, 1 representative from Stung Treng provincial hall

14-16 Feb-ruary 2013

9 persons

Total 44 persons

2.3. Theoretical Framework

This research applies Political Ecology (PE) as analysis approach to understand the interaction between all stakeholder in the context of environment, economic, social and political aspects. The PE focuses on human ecology—the interaction of social system and

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ecosystem—and political economy, which encompasses the constantly shifting dialectic between society and land based resources, and also within classes and groups within society itself (Blaikie and Brookfield, 1987). With this approach, the study analyses power relations between different multiple layers to come up with the understanding of how decisions are made regarding to hydroelectric power development, and how to improve this interaction to increase the social and ecological benefits from dam. Figure 1 below illustrates the interaction between various inter-related stakeholders involving in hydropower development in Cambodia including the government, community/people, CSOs, investor/constructor, financer and media. The information of how these stakeholders interact with each other from local to regional level over the issues of dam development and the social, environmental impacts will the understanding of drivers and enablers affecting the hydropower decision making in Cambodia. Hence, this research explores the relations between different stakeholders in different levels: local, district, provincial, national, and regional level.

Figure 1: The Use of Impact Assessment to Understand Drivers and Enablers

Source: Authors, 2013

In the case of LS2 hydropower dam, the study tries to look in to the interaction between various inter-related stakeholders involving in hydropower development in Cambodia including the government, community/people, CSOs, investor/constructor, financer and media. The information of how these stakeholders interact with each other from local to regional level over the issues of dam development and the social, environmental impacts leads to the understanding of drivers and enablers influencing the hydropower decision making in Cambodia.

The space that all stakeholders interact is important with which information sharing, participation, utilization of authorities and so on can be checked to understand the elements suggested in PE. This research uses Environmental Impact Assessment process of hydropower project as a lens so that information of interaction among all stakeholders can be

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Project initiation and project planning Construction Kick-off

GovernmentPolicy Legal framework and instrumentEnforcement capacity and resourcesPowerInstitutional arrangement

Impact Assessment ProcessFocus: relationship of power, economic and politics

CSOsInstitutional arrangementPower/strengthParticipation/public consultation

Community/peopleRightParticipation/public consultation

Drivers and

Enablers of

Hydropower

Decision Making

Investor/constructorSustainability frameworkSocial responsibility framework, CSRReason for investment

FinancerSafeguard measureFinancial modelInfluence

Improvement of hydropower

decision making

MediasRole/involvement of media

Legend:: The arrow represents the interaction between stakeholders

CSR: Corporate Social ResponsibilityCSO: Civil Society Organization

accessed for analysis. As stated in Scottish National Heritage in a Handbook on EIA, “[EIA] is the whole process of gathering environmental information; describing a development or other project; predicting and describing the environmental effects of the project; defining ways of avoiding, reducing or compensating for these effects; consulting the general public and specific bodies with responsibilities for the environment; taking all of this information into account before deciding whether to allow the project to proceed and ensuring that the measures prescribed to avoid, reduce or compensate for environmental effects are implemented (SNH, 2009:136).

According to this definition, EIA is not only a simple process of gathering environmental information for designing the project, but also layouts the responsibility of responsible actors to disseminate the information about their project to and consult with general public or relevant institutions to make sure that the environmental information reflect the real issues by taking into account every diversified involvements from public sphere including the both powerful and vulnerable actors around the hydropower decision making. Therefore, this study does not only see the EIA as the simple process of gathering environmental information for designing the project, but also a space at which responsible actors disseminate the information about their project to and consult with general public or relevant institutions to make sure that the environmental information reflect the real issues by taking into account every diversified involvements from public sphere including the both powerful and vulnerable actors around the hydropower decision making. Furthermore, hydropower’s narrative also was used to understand key stakeholder’s roles and perspectives on LS2 hydropower dam.

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Chapter 3: Overview of Hydropower Development

3.1. Global and Regional Hydropower Development

Around 2,000 BC, dam was found to be widely used for irrigation and water supply; as the evidence, certain of earth embankment dams for water diversion still remain in Sri Lanka and Israel (Schnitter, 1994). Up to now so many large dams have been built all over the world. By the 20th century, there were more than 45,000 large dams in 140 countries (ICOLD, 1998). The rate of dam building rose during the economic growth after World War II; particularly, the period from 1970 to 1975 was seen to be the fastest growing of dam building, during which almost 5,000 large dams were built around the world and it is noted that China alone own almost half of the world’s dam (22,000 dams), and it is the countries among the top five countries that own nearly 80% of total dam in the world (WCD, 2000). Around two trillion USD was estimated to be invested in the construction of large dam during the 20 th century. However, it is remarkable that dam construction has slowed down, 60% decreased (Imhof, et al., 2002) worldwide after the peak period of the 1970s, especially in North America and Europe when the most technically attractive sites for dam constructions are already developed (WCD, 2000).

Dams have been promoted as a long-term and strategic investment which can produce multiple benefits and it is the way to respond to water and energy needs. These days, dams are used to regulate, store and diverse water from river to farm lands, to supply for water for industrial and human use in town and cities, to generate electricity and to control flood. In many countries, dam for electricity generation firstly found around 1890, is the most important reason for the construction of large even though it is stated as the primary purpose or just the additional one. Nineteen percent of the world electricity supply among 150 countries is from hydropower dam; moreover, hydropower was thought to be a comparatively clean, low-cost and renewable energy source (WCD, 2000).

In Mekong region, dams were planned, constructed, and operated in Mekong River Basin—Upper Mekong Basin in the China and Myanmar, and Lower Mekong Basin overlay Lao PDR, Thailand, Cambodia, and Viet Nam. There are more than 70 million people residing in Mekong Basin with the estimated increase around 65 percent to reach 120 million by 2025 (Steward, 2008). In Lower Mekong Basin, there are up to 30,000 MW hydropower potential, from which more than 10% was already developed all on the river’s tributary system mostly during the last two decades (MRC, 2010). MRC in 2010 reported that Mekong region is one of the most active regions for hydropower development in the worlds. The growth of hydropower development in the area is because of, on the one hand, the energy policies and strategies to reduce the energy poverty gap among countries in the region and to build a sustainable energy future related to its energy sources, and on the other hand, because of the promotion of energy grade among GMS countries, by which certain countries like Laos PDR and Cambodia can generate income from selling energy produced by hydropower as energy potentials are bigger than their national demands (MRC, 2010).

Hydropower development becomes controversial when dam are planned on the mainstream of Mekong River (MRC, 2010). In LMB there are at least 11 potential sites on Mekong River’s mainstream under feasibility study phase with the total capacity of 14.697 MW, while in China the Upper Mekong region up to 8 hydropower dams are completed, under construction, and planned. The plan to build hydropower dams in LMR’s mainstream were proposed since the 1960s followed by the 1994 plans by Mekong Secretariat, but vanished partly because of the complaint over its huge negative effects. However, the approvals in 2006 by Laos, Cambodia and Thailand to conduct studies for the construction of a series of dams on Lower Mekong River’s mainstream are seen to be a serious threat to the river

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ecology and leave millions of people whose livelihoods depend on the river under the risky conditions20.

Table 4: Existing, under Construction, and Planned Dam in LMBCountries Mainstream Tributary Total

Planned Existing Under construction

Planned

Cambodia 2(4,280 MW)

1(1 MW)

- 11(1,309 MW)

14(5,590 MW)

Lao PDR 9*(10,417 MW)

11(738 MW)

9(2,764 MW)

71(6,847 MW)

100(20,767 MW)

Thailand - 7(745 MW)

- - 7(745 MW)

Viet Nam - 7(1,205 MW)

5(1,016 MW)

3(363 MW)

15(2,583 MW)

Total 11(14,697 MW)

26(2,688 MW)

14(3,780 MW)

85(8,519 MW)

136(29,684 MW)

*Two projects shared border between Lao PDR and ThailandSource: MRC, 2011

3.2. Hydropower Potential and Plan in Cambodia

The energy development activities in Cambodia these days have been following the Cambodia Energy Strategy 2006-2020 which was supported by World Bank21. During the third legislature, the RGC mentioned in its NSDP phase I 2006-2010 about the need of availability of the assured, abundant, low-cost electricity to be the key to development of Cambodia. Along with that the government had also been promoting the development of cheaper, renewable, alternative energy sources including solar energy, wind energy, biogas, and mini-hydro schemes (RGC, 2006:24). With Energy Strategy the RGC expects to achieve energy independent through power trade and exchange with neighbouring countries and regional integration with the emphasis on the involvement of private sector (RGC, 2006:64). Two among several achievements relating to energy development in the Third Legislature is the commencement of construction of the hydro-electric generating station at Kamchay and Atay hydropower dam (RGC, 2009:148).

During the fourth legislature, the government continues to set policy priority on energy sector. The government keeps pushing for stronger electricity capacity by encouraging the construction of low cost generating plants which use such local energy sources as hydropower, natural gas and coal (RGC, 2009:148). Within 5 years from 2009-2013, the government has set to commission 5 hydropower stations and 2 coal power plants as shown below:

Table 5: Commission Plan of Hydropower/Coal-Fire Stations by the Government from 2009-2013

No Dam/Coal Fire plant Planned Year of commission

1 Kamchay Hydropower Station (193 MW) 20112 Commission Kirirom Hydropower Station III (18 MW) 20123 Commission the First Phase (100 MW) of the Thermal Coal

Power Plant 1 with the total capacity of 200 MW in Preah Sihanouk Province

2011

20 International River, Mekong Mainstream Dam, www.internationalrivers.org/campaigns/mekong-mainstream-dams, (accessed 24 August 2013)21 Interviewed with representative officer of MIME on 23 August 2013

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4 Commission Stung Atay Hydropower Station (120 MW) 20125 Commission the Second Phase of the Thermal Coal Power Plant

1 with the total capacity of 200 MW in Preah Sihanouk Province2012

6 Commission Stung Tatay Hydropower with one part of its total power of 246 MW

2013

7 Commission Stung Russey Chrum Krom Hydropower with one part of its total power of 338 MW

2013

Source: Presentation by Victor Jona, 2011; MIME, 2003

The assessment of water resources for hydropower development in the Kingdom of Cambodia indicated that this country has an abundant hydropower potential. In June 2003, a National Sector Review of Hydropower was prepared by MIME and the Cambodian National Mekong Committee (NMC). In this review, it is shown that there are about 60 possible sites for hydropower development in Cambodia, of which 14 were identified as priority projects (MIME, 2003). To thoroughly investigate and prioritize the potential hydropower sites as well as to prepare Cambodia’s Hydropower Development Master Plan which will support the Energy Sector Development Strategy for the period of 20 years, the RGC in 2007 requested the Japanese Government through JICA to conduct the Mater Plan Study of Hydropower Development in Cambodia (JICA, 2007). Accordingly, JICA focused on 29 selected hydropower sites which have capacity to generate more than 10 MW out of 60 potential sites (JICA, 2007). However, the result of the master plan study was not released publicly because, according to a source from MIME, the report raises too many concerns over the negative impact caused by those proposed dam, which does not reflect the real situation of Cambodia22. Energy Sector Strategy Review by World Bank in 2006 stated that from 2004 to 2020 Cambodia has identified 14 potential hydropower projects which could produce power capacity varying from 1,900 MW to 4,700 MW according to the scale of Sambor Hydro which will be built on Mekong Mainstream (World Bank, 2006).

According to the review of hydropower sector by MIME in 2003, Cambodia has a total estimated hydropower potential of 10,000 MW; 50% of which locates on Mekong River’s mainstream, 40% on its tributaries and 10% in the southwest outside the Mekong Basin. In the planned hydropower project by MIME (2003), Cambodia has not included any mainstream hydropower projects in the nearest future power development plan. The size of the mainstream projects and the largest scheme on the main tributaries is too large for domestic supply, but if dam on mainstream is to be built, the purpose is to sell electricity to southern Viet Nam or Thailand (MIME, 2003).

Until recently the hydropower potential of Cambodia remained untapped, aside from small- scale dams at O Chum II (1 MW) in Ratanakiri province and the Kirirom I (12 MW) in Kampong Speu province, Kamchay hydropower dam (193 MW) was totally completed and commissioned on December 07, 2011, Kirirom III hydropower (18 MW) was commissioned in February 2013. Up to now, there are four hydropower development projects under construction including Lower Russei Chhrum, Atay and Tatay Hydro23. In late 2012, the LS2, the Cambodia’s first large-scale hydropower, was approved by the government of Cambodia to be built in 201424.There are also at least 12 other hydropower projects across the country under the MOU of feasibility studies 25.

22 Interviewed with representative officer of MIME on 23 August 201323 Presentation by Victor Jona on Cambodia Energy Status and Its Development during the 2011 Cambodia Outlook Conference A Partnership of CDRI and ANZ Royal Bank on 16 March 2011, At Phnom Penh Hotel, Phnom Penh, Cambodia24 Cambodia Daily Newspaper, Construction of Lower Sesan Dam to Start in 2014, http://www.cambodiadaily.com/archive/construction-of-lower-sesan-dam-in-stung-treng-to-start-in-2014-5320/, (accessed 10 August 2013)25 Presentation by Victor Jona on Cambodia Energy Status and Its Development during the 2011 Cambodia Outlook Conference A Partnership of CDRI and ANZ Royal Bank on 16 March 2011, At Phnom Penh Hotel,

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Table 6: Current Hydropower Dams under Construction and Development in CambodiaProject Location Investment

Company/CountryDetail

Lower Russey Chhrum

Koh Kong province

China Huadian Corporation (CHC)/China

Installed capacity: 338MW Estimated cost: USD 209 million Completion year: 2014 BOT project

Stung Tatay Koh Kong Sinohydro/China Installed capacity: 246 MW Estimated cost: USD 215 million. Completion year: 2015 BOT project

Lower Sesan 2 Stung Treng

Lower Sesan 2 Hydro Power Co. Ltd

Installed capacity: 400 MW Estimated investment cost: USD

781 million Estimated cost: USD 781.52 million Expected year of commissioning:

2017Stung Atay Pursat China Yunnan

Corporation for International Techo-Economic Cooperation*

Installed capacity: 120 MW Estimated cost: 255 million* Expected year of commissioning:

2012* (now ongoing) BOT project

Source: Presentation by Victor Jona, 2011; *Middleton & Sam, 2008

Hydropower projects on Mekong River’s mainstream were not included in short-term Hydropower Development Plan. Cambodia understand that any project to be built on mainstream will be produce electricity surplus which will be exported to neighbouring counties like Southern Viet Nam or Thailand who are facing shortage of electricity. Nevertheless, Sambor Hydropower Project, to be built on the mainstream with installed capacity 467 MW or 3,300 MW was actually included in the long-term hydropower development plan in 2003, but the government agreed that further studies is needed before deciding to build such hydropower dam (MIME, 2003). Even though the feasibilities of the proposed Sambo hydropower on the upper part of Mekong Mainstream in Kratie province, for example, have been studied since 200626, senior official from MIME claimed that the construction of hydropower dam on Mekong’s Mainstream will be possible only after 203027. Even though the government has started with hydropower dam on tributaries, it is apparent that the government still has the intension to export energy when government select hydropower project base on accessibility; “… Hydropower development based initially on the easily accessible sites subsequently the export oriented projects: Stung Atay, Stung Russei Chrum, Chay Areng, Lower Se San 2, Lower Sre Pok 2 and also the three Battambang hydro sites”(MIME, 2003).

3.3. Justification of Hydropower Dam Development in Cambodia

Hydropower is generally thought to be and promoted by dam developer as a comparatively clean, low-cost, renewable energy source that relies on proven technology. It has low operating costs, but long operational life and, in the past, it is seen as a worthy energy source by the countries that depend heavily on imported fossil fuels for power generation (WCD, 2000). This perception was seen to be re-iterated by the RGC whenever speaking about the benefit of hydropower dam in Cambodia. For example, during the inauguration of Kamchay dam as saying that the project provides power sources for stimulating the

Phnom Penh, Cambodia26 International River, Sambor Dam, http://www.internationalrivers.org/campaigns/sambor-dam, (accessed 25 November 2013)27 Interviewed with representative officer of MIME on 23 August 2013

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economic dynamics and ensuring growth, sustainable growth and social welfare by increasing the power supply capacity to serve the need of socio-economic activities. Moreover, the energy from the above dam is used to complement the constantly rising price of oil, gas and coal, and other renewable energy sources (RGC, 2011).

Official from MIME claimed that hydropower development is moving along with the regional effort to achieve renewable energy target as set in the ASEAN region to achieve 15% of renewable energy in the total installed power capacity by 2015 (ASEAN, 2012). The RGC is working to contribute to this target and hydropower is the main alternative which can help the country increase the renewable energy, meanwhile gain the lower cost of electricity generation compared to other electricity sources28. Similarly, hydropower was expressed in the Cambodia’s national report for Rio+20 United Nation Conference on Sustainable Development 2012 as the corner stone of Cambodia’s energy policy (RGC, 2012). Moreover, the hydropower choice was claimed by RGC that it matches the current context of Cambodia as the country has abundant of untapped water which is good for hydropower, but has limited or no resources to support other energy alternatives like generators run by gas, biogas, nuclear and so on (RGC(a), 2013).

The cost of investment is another reason to choose hydropower. Cost of electricity generation is the main concern when the country is integrated into ASEAN to keep the country competitive. As claimed by MIME, the current fuel generation and certain alternative energy solution including mini-scale hydropower dam will not help Cambodia achieve low electricity cost, while the cost of construction will be higher and building the smaller one (MIME, 2013). Cambodia has been a cash-strapped country; therefore, to develop energy sector, the government needs involvement from private sectors. However, small scale hydropower and other renewable energy sources are not attractive to private investors in Cambodia. Those energy sources were mostly done under the grant provided by donors and construction cost is claimed by the government to be high29.

The RGC acknowledges the need to consider social and environmental impacts from hydropower dams (RGC, 2011) and, at the same time, believe that tributary hydropower dams would cause less negative impacts than the mainstream ones. That is the reason that Cambodia start building dam from tributary dam which is thought to be good at beginning stage to meet the electricity demand and after the demand is fulfilled, building dam on mainstream can be considered, but will not be before 203030. Similarly, for the case of Lower Sesan 2 dam, RGC legitimizes the project by saying that the dam is not on Mekong River’s mainstream and that the resources are already degraded and water regime are already changed by many dams on Sesan River in Viet Nam’s territory. However, the RGC will not reject the construction of mainstream dam, for instance, Xayaburi dam in Lao PDR, if there is scientific study showing that the impact is acceptable31.

In balancing the cost and benefit of the dam, the RGC is seen to reconcile the negative impact with dam’s importance for development by comparing macro perspective from the government and the micro perspective from CSOs; the government hay a say that “we should not look at a single tree, but the whole forest”(RGC(b), 2008), “the impact is the natural consequence of economic progress and no development can be done without impact on environment and natural resources”(RGC(a), 2010), “there is a need to scarify some for the development the country32”. Responding to these narratives, certain CSOs have shown their positions that they are not rejecting hydropower as the energy solution; however, the

28 Interviewed with representative officer of MIME on 23 August 201329 Ibid30 Ibid31 Ibid32 Ibid

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way hydropower project is planned and implemented are the main reasons behind their advocacies, which will be discussed in the following section.

3.4. Problems Caused by Hydropower Development in Cambodia

As mentioned above, the hydropower potential in Cambodia still unused. So far, most of commissioned hydropower stations in Cambodia are in small-scale, except Kamchay hydropower dam which was competed and commissioned in 2011 with the installed capacity of 193 MW in Kampot province. The actual and physical negative effect on people from Cambodia’s hydropower dams is not so outstanding. The reason is those hydropower dams under operation are not large scale and were built outside Mekong basin and where the dam’s effect does not significantly and directly impact the people. Kamchay hydropower dam is the first large dam in Cambodia; however, the effect was not significant as other compared to those newly proposed dams in northeastern part of the country or on Mekong River’s mainstream. Kamchay dam was located in the mountainous areas and no resettlement is needed in this project. The downstream villages do not depend so much on the Kamchay’s water as well as the affected agricultural land in the reservoir of dam No2.

Nevertheless, people in the northeastern part of the country like Ratanakiri and Stung Treng province have been physically suffered by the trans-boundary impacts caused by dams built in the upper part of Sesan River especially the Yali Fall dam in Viet Nam territory. There are many studies on impact of Yali Fall dam on Cambodian people. Since the dam was commissioned in 2000, around 55,000 downstream villagers were negatively affected and the impacts as well as the victims have never been addressed, but at the same time, more dam are planned and built on the river in Viet Nam’s territory33. Certain study show that there are certain commitment and solution after the negative exists soon after the operation of Yali Fall dam such as a food relief supported by Viet Nam side to the affected Cambodian people in O’ Yadav of Ratanakiri province as well as the establishment of a warning mechanism with the representative from the two countries. However, the established mechanism does not work effectively because of financial constrain and the complication of process of the warning procedure (Rasmey, 2013).

Currently, Cambodia is worrying about the possible effects caused by the planned and ongoing hydropower projects especially the Lower Sesan 2 dam in Stung Treng province and other large scale dams proposed on Mekong River’s mainstream such as Sambor and Stung Treng dams in Kratie and Stung Treng province respectively. The other concerns are the cross boundary impacts caused by dam in Laos on the upper stream of Sekong and Mekong Rivers. Based on lesson learned and impacts experiences in the 3S region due to Yali Falls dams and hydropower other hydropower projects already constructed and operating upstream in Viet Nam, if the proposed large-scale hydropower projects in the 3S area of Cambodia is built it could drastically reduce fish stock, changes in the quality of water flows, and unpredicted surge that have resulted in destruction to property and even loss of life (Mark, 2012). The flooding caused by reservoirs will inundate a huge amount of land and lead to forest and habitat loss, causing serious challenges to the area’s biodiversity and local people’s livelihoods. Blocking fish migration on the Sesan and Srepok Rivers is still disputed but it is clear that this will cause a number of species to disappear entirely from upstream of the dams. This had implications for tens of thousands who rely on fisheries for their livelihoods, both upstream and downstream (Mark, 2012).

Be noted that even though people living at Lower Sesan 2 dam site have not yet affected by dam in their own countries, but the cross boundary effect of the dams in Viet Nam has warned them and teach them about the possible impact any other projects proposed to be

33 International River, Cambodia, http://www.internationalrivers.org/campaigns/cambodia, (accessed 13 October 2013)

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built in their region. The people gain more knowledge about hydropower dam with the assistant of local and international NGOs that have been working to provide them with training as well as exchange trip to see other affected areas overseas (Field survey(a), 2013). The concerns of the people at LS2 dam’s site mounted up, sometime in the form of demonstration, when the EIA study of this project was accused by civil societies as not sufficient and does not reflect the real issues in the area because of many factors such as the lack of participation34 from the public as well as the planning process of project planning and design is closed to public scrutiny (Middleton, 2008). The complaint of the civil society about the limited of the EIA study of LS2 project was hit back by government officials to be baseless, because those NGOs cannot any concrete study or evident that the project will lead to the effects as claim and, on the other hand, the dam has not been there yet35.

The Predicted Impact the LS2 Dam

The construction of the approved 400MW Lower Sesan 2 hydropower will start in 2014 and the government will spend the entirety of 2013 to solve the matter with affected families36. Even though this dam has not been built, many studies predicted certain issues which will be caused by the dam such as relocation of affected people, decreased fish stock, hydrological changes and the impact on the Tonle Sap Lake, blocking of fish migration and sediment flows. The details of the impacts are in the table below:

Table 7: Predicted Impacts of Lower Sesan 2 Dam- 335 square kilometres of Cambodia territory would be flooded and more than 1,000

families or 5000 people would be displaced and effect dozens of villages along both rivers, upstream and downstream;

- 267 families and 1,229 people would need to relocate; - The loss of 1,290 ha of lowland agricultural land, or about one quarter of all the wet

rice paddy land in Sesan district;- Over 305 square kilometres of land would be flooded, as well as additional 7,086 ha of

forest would be destroyed by resettlement of villages from inundation area;- The loss of approximately 18,670 ha of natural forest land and 4,896 ha of lost rivers

and stream; - Many kinds of wild mammals and birds would be negatively affected, especially its

habitat and movement. It would indirectly impact on the Virakchey National Park.- 9.3 percent of Mekong River Basin’s fisheries and 6-8% of Mekong River Basin’s

sediment would be blocked - Changing of hydrology, water flows and transportation of boats;- Decreasing of water quality; especially water quality in downstream. In addition, water

pumped from the Stung Treng River would contain toxin which could affect serious illness outbreaks amongst water users;

- Effecting on forestry and wild habitats; effecting on biodiversity in water and fisheries; - Effects on culture resources and quality of life;

Note: Impacts caused by planned Lower Sesan 2 hydropower is just only from the assessment based on the perception of local people and other involved stakeholders whilst Lower Sesan 2 hydropower dam start to build in 2014. Source: NGO Forum, 2009; Biard, 2009; Presentation by Trandem, 2013

34 Interviewed with NGO representative on 26 March 201335 Interviewed with official from Stung Treng provincial hall on 16 May 201336 Cambodia Daily Newspaper, http://www.cambodiadaily.com/news/construction-of-lower-sesan-dam-in-stung-treng-to-start-in-2014-5320/, (accessed on 08 January 2013)

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Chapter 4: Decision Making in Hydropower Development

4.1. Investment Process in Cambodia

RGC has been encouraging both Cambodian and foreign investment to Cambodia. As shown in Figure 2, the process of investment was made easier by which the proposed project goes through CDC acting as One-Stop-Shop and, on behalf of the investment applicant, responsible for getting all required licenses from relevant entities as listed in the Conditional Registration Certificate (CRC) (CDC, 2010). Since 1994, RGC has adopted and amended legal instruments for the management of investment in Cambodia including “Law on investment of the Kingdom of Cambodia in 1994”, “Law on the amendment to the law on investment of the Kingdom of Cambodia in 2003”, and “Sub-decree No 111 ANK/BK on the implementation of the law of the amendment to the law on investment of the Kingdom of Cambodia in 2005”. As stated in the investment application procedure of CDC, in case of discrepancy among the 3 legal instruments, the provisions of the Sub-decree 111 are applied by CDC (CDC, 2010).

Figure 2: General Application Process of Qualified Investment Project (QIP)

Source: Authors

The applicant, both Cambodia and foreign entities, who wishes to have investment incentive or investment guarantee or only each of them, have to go through the QIP approval process. Article 5.1 of the sub-decree 111 states that the applicant has to submit to CDC the

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Letter of Non-Compliance: clearly state the reasons why the Investment Proposal was not acceptable and the additional information required for enabling the CDC or PMIS to issue a CRC (CDC).

Final Registration Certificate (FRC): The document issued by the Council or the provincial/municipal Investment Sub-committee (Sub-Decree 111).

Qualified Investment Project (QIP): an investment project for which a Final Registration Certificate has been issued (sub-degree 111).

Conditional Registration Certificate (CRC): specifies the approvals, authorizations, clearances, licenses, permits or registrations required for the QIP to operate, as well as the government entities responsible to issue such approvals, etc.

1-Applicant submits investment proposal with application fee

2-CDC review application

2a- If conform to review criteria issue CRC within 3 working days after submission date or deemed to be registered

3-CDC assist CRC holder to obtain all of the licenses from relevant ministries-entities listed in the CRC on behalf of the Applicant within 28 working days after the issuance of CRC

4-Issue a Final Registration Certificate within 28 working

days after the issuance of CRC

5-Commencement of the QIP

2b-If not conform to review criteria, issue Letter of Non-compliance within 3 working days or the application deemed to be registered

Approval from COM

Need approval from CM if: investment capital = or > USD 50M involve politically sensitive issuesinvolve the exploration and the exploitation of mineral and natural resourcesnegative impact on the environmenthave long-term strategy or involve infrastructure concessions on the basis of BOT, BOOT, BOO, or BLT*

investment proposal together with Application Form and pay 7 million KHR for administration cost covering securing the approvals, authorizations, license, or registration from all relevant ministries and entities including stamp duty (RGC, 2005).The applicant can also go through Provincial-Municipal Investment Sub-committee (PMIS), if the project’s capital is no more than USD 2 million; however, in case the project’s capital exceeds USD 2 million or it relates to at least 2 provinces-municipalities or locates in special economic zones, the process has to go through CDC (RGC, 2005).

Article 6.4 of sub-decree 111 states that after the receipt of the investment application, CDC has three working days to review the investment application and issues the Conditional Registration Certificate (CRC) to confirm the acceptance of the application or issue the Letter of Non-Compliance (LNC) to inform the rejection. If CDC failed to do that within 3 working days, the investment application is deemed to be registered, and in this case, CDC has to issue the CRC to the applicant immediately (RGC, 2005). However, in practise, issuing CRC always takes more than 3 working days, and, according to article 6.1 of sub-decree 111, the date of issuing this certificate can be postponed for the investment that relates to the national interest or the project that are environmentally sensitive. One important piece of information among other provisions stated in CRC is the list of required documents such as approvals, authorizations, licenses and permits or registrations required for the QIP to become lawful, while the LNC states the reasons why the Investment Proposal was not acceptable and the additional information required for enabling the CDC to issue a CRC (CDC, 2010).

As stated in article 7.1 of sub-decree 111, after issuing CRC to the applicant, CDC has responsibility to assist CRC holder to obtain all of the licenses from relevant ministries-entities listed in the CRC as stated above on behalf of the CRC holder within 28 working days after the issuance of CRC. However, in practice, QIP applicant is expected to obtain such authorizations, license or registrations (CDC, 2010). Article 7 of the sub-degree further adds that if the CRC holder did not obtain all of the required documents within 28 working days from date of CRC issuance, CDC must issue a Final Registration Certificate (FRC). Considering this process, it seems that the project can be approved even before the completeness of the required documents. However, there actually is the punishment for being late of processing these documents. All government institutions that are responsible for issuing the required documents as stated in the CRC who, without proper reason, fails to provide those documents to the CRC holder’s request on time will be punished by law (RGC, 2003).

Sub-decree 147 on the organization and the function of the Council for the Development of Cambodia in 2005 outlines the mandate CDC regarding the decision making to issues the FRC. Article 11 of this sub-decree states that CDC needs the approval from the Council of Ministers for the investment project that:

have investment capital equal of or more than USD 50 million involve politically sensitive issues involve the exploration and the exploitation of mineral and natural resources may have negative impact on the environment has long-term strategy; or involve infrastructure concession on the basis of BOT,

BOOT, BOO or BLT (CDC, 2010).

With the FRC, the proposed project, according to article 2 of Investment Law, becomes the QIP. The commences date of the QIP is the date of issuance of the FRC, and same date of the commencement of Trigger Period for the Tax on Profit Exemption to be provided to the project.

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4.2. Main Existing Regulation Concerning Hydropower Project in Cambodia

Until now, there is no direct law on hydropower development in Cambodia yet, only relevant articles within other laws related to energy, the environment, and agriculture have found. Moreover, there is no EIA law; at the time of writing, the law is the drafting process. The following are summary of related law currently in effect to contribute hydropower decision making process in Cambodia.

Table 8: Law and Regulations Relevant to Hydropower Development CambodiaLaw/regulations Relevant articles -Law on investment of the Kingdom of Cambodia in 1994 and the Law on the amendment to the law on investment of the Kingdom of Cambodia in 2003

-Sub-decree No 111 ANK/BK on the implementation of the law of the amendment to the law on investment of the Kingdom of Cambodia in 2005

-These laws define the required process so that an investment project can legally start operating in Cambodia though CDC’s registration process and the approval from related governmental institutions

-The law also stated about the required legal document and approval or permit from relevant technical ministries for the project to be approved by CDC including EIA study, water license and so on.

-It is noted that even though the sub-decree 111is lower in it power than these 2 laws, the government in practice, depend on the Sub-decree to interpret any differences among these 3 legal documents (CDC, 2010).

-Sub-decree 11 on BOT Contract 1998

-This Sub-decree legalize the State or public legal entities to cooperate with private legal entities on such infrastructure projects as Electricity power plants, roads and highways for vehicles, ports, telecommunication networks, railroads, residential development, hospitals, schools, airports, stadiums, tourism resorts, new cities, hydropower stations, dams, factories, clean water production plants and solid waste processing. The maximum period of infrastructure project is 30 years, but it is extendable.

-This sub-decree gives the government flexible way to get through the investment process with investor. The selection of concessionaire can be done through international or national “open or close” bidding process or through negotiation process.

-Land Law 2001-Law on Expropriation 2009

-Land Law states that land ownership is protected and no one can be deprived of their ownership. The law recognizes the right of indigenous communities to collective ownership of these lands (Art 26). However, this law gives way to the government to expropriate properties in the public interest.

-Furthermore, in 2010, Cambodia adopted an Expropriation Law which widened the way for the RGC to legally expropriate public and private properties for project’s that serve the national and public interest. The government can still expropriate property even if there are unresolved disputes; however, property owners can continue to

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challenge the expropriation, or the compensation they received, in the courts (Art 19, 34).

-However, Expropriation Law establishes processes and mechanisms for expropriation implementation aiming at ensure that the expropriated properties will be compensated at market price when the expropriation is declared.

-Sub Decree On Social Land Concessions (2003)

-The sub-decree defines the criteria, procedures and mechanism for the granting of social land concessions for residential use and/or family farming.

-The maximum size of social concession land granted for residential purposes is one thousand two hundred (1,200) square meters, except in rural areas where land is available, the size of social concession may be increased up to three thousand six hundred (3600) square meters (Art. 16).

-The maximum size of social concession land granted for family farming purposes is two hectares, but for some areas the size of social concession land may be increased up to five hectares based on the characteristics and potentiality of the land or the type of crop, and labor (Art. 17).

-Sub-degree on Environmental Impact Assessment Process 1999

-This sub-decree is the require hydropower project with installed capacity of at least 1M to conduct initial or full EIA study. A full scale EIA should be conducted for projects deemed to have a serious impact on natural resources, ecosystems, health or public welfare (Art 8).

-This Sub-decree raises the importance of public participation in the EIA process. This Sub-decree put MOE on the responsibility to evaluate and review EIA reports with other relevant ministries. Moreover, MOE is also responsible for monitoring and take appropriate action to ensure that EMP is followed properly (Art 3).

-Law on Environmental Protection and Natural Resource Management 1996

-Sub-decree on Water Pollution Control 1999

-Sub-decree on Solid Waste Management 1999

-Sub-decree on Air Pollution Control and Noise Disturbance 2000

-The law on Environmental Protection and Natural Resource Management 1996 also raises about EIA as saying that “An environmental impact assessment shall be conducted on every project and activity of the private or public, and shall be approved by the Ministry of Environment before being submitted to the RGC for decision (Art 6).

-The Sub-decree on Water Pollution aim at regulating the water pollution control in order to prevent and reduce the water pollution of the public water areas so that the protection of human health and the conservation of biodiversity should be ensured.

-The objective of Sub-decree on Solid Waste Management is to regulate the solid waste management with proper technical manner and safe way in order to ensure the protection of human health and the conservation of biodiversity.

-The purpose of this Sub-decree on Air Pollution Control and Noise Disturbance is to protect the environmental quality and public health from air pollutants and noise pollution through monitoring curb and mitigation activities.

-Law on Water Resource Management 2007

-This Law is intended to ensure the effective and sustainable management of the water resources to attain socio-economic development and the welfare of the people (Art 1).

-This law requires the development related to water to ask

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water use license from MOWRAM.-Royal Decree on the Protection of Natural Areas 1993

-The Royal Decree assigns aims at managing and supervising the development and protection of natural areas, including the protection of environment, land, forestry, wetland and coastal areas.

-The Royal Decree outline certain areas as protected areas including Natural Parks, Wildlife Preserves, Protected Scenic View Areas, and Multi-purposes Areas

-Protected Areas Law 2008

-The law divides protected areas into 4 zone type: core, conservation, sustainable use, and community (Art 4)

-The law states that all kinds of clearance and development in the core and conservation zones is prohibited (Art 36), and the developments activities within or adjacent to protected areas require EIA (Art 44).

-Forestry Law 2002 -This law aims to ensure the sustainable management of forests and their social, economic and environmental benefits, including conservation of biological diversity and cultural heritage (Art 1).

-The law also suggests for the public participation in any government decision that has the potential for heavy impact on citizens, livelihoods of local communities and forest resources, and those activities in forested areas which likely have negative impact on society and environment should be subject to an EIA study (Art 4).

-This law recognizes traditional user rights of the people whose livelihood depend on non-timber forest products from the forests for the purpose of traditional customs, beliefs, religions and livelihood (Art 40).

-Electricity law 2001 -The purpose of this law is to manage and to prepare a framework for the electric power supply and services in Cambodia (Art 1).The established principles of this law are (1) the protection of the rights of consumers to receive the reliable and adequate supply of electric power services at reasonable cost, (2) the promotion of private ownership on the facilities for providing electric power services, and (3) the establishment of competition wherever feasible within the electric power sector

-From this law, the EAC was established as a legal public entity working as an autonomous agency to regulate the electricity services and to govern the relation between the delivery, receiving and use of electricity (Art 6)

Source: Compiled by author based on various related regulations

4.3. Hydropower Investment Process

Conforming to the description in investment process section, hydropower project could be invested by both foreign and local private and public sectors in Cambodia. The investment process needs to go through the registration with CDC and require the approval from COM.

The government is the party to initiate hydropower project by listing out the potential site across Cambodia. As shown in the National Sector Review of Hydropower made by MIME in 2003, 60 possible sites of small and large hydropower across Cambodia was identified on Mekong Mainstream, its tributaries and in the South-western coastal area. Among those potential, 14 projects were also prioritized (MIME, 2003). As explain by official from MIME,

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Cambodia is in need of electricity development, but the country has been a cash-strapped countries and lack of other necessary resources for hydropower development. Therefore, Cambodia needs involvement from private sector37.There is no clear guideline that there has to be bidding for the hydropower project so that the winner gains the right to work on initial works like feasibility study. The investor can come and ask permission (MOU with MIME) from to conduct feasibility and EIA study of any potential hydropower project identified by the government38 during a period of 2 years (Suhardiman et al., 2011). As defined in the Appendix of sub-decree on EIA (1999), initial or full EIA is required for hydropower project with the capacity of at least one MW (sub-decree on EIA, 1999), and the article 8 further states that full EIA is required if project tends to cause a serious impact to the natural resources, ecosystem, health and public welfare. The result of the studies are submitted to and discussed among the inter-ministerial committee which is a mechanism to evaluate the project in all of its aspects. This committee comprises of MIME as the chair, MOWRAM as vice chair, and MOE, MLMUPC, MPWT as member. If any rejection is raised by only one of member, the project cannot continue39.

When the proposed hydropower project is approved by Inter-ministerial Committee, MIME, then invites the project proponent to the discussion to develop the hydropower project; however, MIME can choose other partner, beside the one conducting the initial studies, to develop the project. In this case, the cost of the studies will be reimbursed to the former company by the company newly selected (SAWAC, 2011). During this phase, the project proponent can start registering their business investment with the CDC40 with the support from its host ministries MIME in collecting all necessary required documents (RGC, 2005).

CSOs show their suspicious about the process of selecting the dam investor basically refer to the bidding process. It is only the Kamchay hydropower project which as heard to be was opened for international bidding in 2004( SAWAC, 2011). The bids was participated by 17 local and international bidders (Carl Middleton and Sam Chanthy, 2008), and the winner is Sinohydro which is granted with the build Kamchay hydropower dam and conduct EIA study (SAWAC, 2011). However, for the case of LS2 dam, there is no sign in public that there was bidding to select the investor or the company to conduct the study for the project. The known fact related to this investment is that Cambodian and Viet Nam began discussing about the project in 2006 about the possibility to build the dam (Bank Track, 2011); later on, MOU was made with EVN to conduct the feasibility and EIA study followed by the establishment of the joint venture between local (Royal Group) and Vietnamese (EVN) investor (KCC, 2009).

Even though it is found that the selected priority project is opened for public bidding (Suhardiman et al., 2011), bidding process is not the only way to get hydropower process approved in Cambodia. Being without bidding does not mean that hydropower project is against the existing regulation of Cambodia. So far there are four medium and large41hydropower dams (Kirirom I, Kirirom III, Kamchay, Atay) in operation and other medium and large dams under construction (Tatay, Lower Stung Russei Chrum), which were all done under the BOT42 agreement with investors from China. According to the official from Member of Parliament of Cambodia, the reason that the RGC chooses BOT basis is that at the moment the country is not able to do the project by itself because of the lack of financial

37 Interviewed with representative officer of MIME on 23 August 201338 Ibid39 Ibid40 Interviewed with representative officer of MIME on 23 August 201341 According to MIME (2003): hydropower dam with installed capacity =<500kw is “Micro”; 501-5,000kw is “Mini”; 5,001-10,000kw is “Small”; 10,001-50,000kw is “Medium”; =>50,000kw is “Large”42 BOT project is a concession contract in which a Principal, grants a concession to a Concessionaire who is responsible for the construction and operation of a facility over the period of the concession before finally transferring the facility, at no cost to the Principal, as a fully operational facility (Article 1, Sub-decree 11, 1998)

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and technical resources43.The selection of concessionaire for BOT is defined by sub-decree. Article 2, 3 and 4 of sub-decree 11 states that BOT investment can be done only when the Principal is state or public legal entities and the Concessionaire is private entities on such investment project like electricity power plants, hydropower stations, and dams with the maximum period of extendable 30 years for infrastructure project. According to article 9 of this sub-decree, the selection can be done through international or national “open or close” bidding process. However, negotiation procedure can be used if [1] the bidding process was not successful; [2] the project contains necessary specifications requiring the selection of a special concessionaire; or [3] the special criteria for the infrastructure project require qualified concessionaire to meet these special criteria (RGC, 1998). The negotiation process stipulated in the sub-decree is understood to give the government legitimacy in dealing with project without bidding if the government claims that the project the project at least fall into one of the three conditions.

Figure 3: Investment Process of Hydropower Project

Source: Author

The proposed project is approved by the government of Cambodia through an inter-ministerial meeting at Prime Minister’s Office and followed by signing of 2 important documents: Implementation Agreement (AI) with MIME and MEF, and Power Purchasing Agreement (PPA) with EDC44 (Suhardiman et al., 2011). These 2 documents will help the investor to borrow money from any interested Bank, as usually the investor at these stages do not have the whole budget of the project’s budget45 .

Finally, the RGC guarantees the investor over financial loss, by asking the National Assembly to adopt the Law of Guarantee of Payments. In the case of LS2 hydropower, the government is responsible to pay the amount of money or debt owed by MIME or EDC to the dam investor following the agreed upon Implementation Agreement if these two institutions cannot pay (RGC, 2013). The opposition party did not agree on the guarantee saying that the

43 The official from Member of Parliament of Cambodia said during the NA session on 15 February 201344 Interviewed with representative officer of MIME on 23 August 201345 Ibid

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investment cost is huge almost a third of the then national budget of Cambodia. Moreover, the agreement provides more power to investor; for example, if the conflict rises up in the payment guarantee, the solution will be made in Singapore court, not in Cambodia, and there is not enough space and time for discussion to ensure that the decision making on hydropower project is for the benefit of the people and the people will not be harmed46. The notion of financial risk to guarantee the LS2 is also shared by ADB’s official that it is a risky move as the Government does not have the risk forecast capacity; the government should start from smaller project and smaller risk47.

The whole process of hydropower investment was alleged by civil societies for being corrupted and irregular. Civil societies alleged that the investor firstly has to meet senior officials to gain their support for the investment proposal and then there is an intermediary (usually they are influential and work on commission) to facilitate the investment process through all stage with line ministries and institutions, and in this case CDC only receive the documents and approve48. This notation was also express by Member of Parliament of Cambodia that intermediary are mostly the relatives of the powerful who works confidentially to get license without bidding or required experiential procedure and sometime it takes them only one day to get the work done49. Moreover, senior political figures were also found to have significant influence on such high profile project as dam, which could influence relevant ministries’ decision making processes. As raised by Middleton (2008) that the way the high level Cambodian politician express their support to the hydropower project are used by all related governmental institution as instruction on how the decision should be made within their own authorities (Carl Middleton and Sam Chanthy, 2008).

The enforcement of EIA regulation is under strong critics by CSOs in term of quality50 and its importance considered by government side (ICEM, 2003). EIA is generally seen as complement to the project approval, not an important documents for project decision making51. The case of Kamchay hydropower dam is an example where the BOT agreement was signed in February 2006, while the draft Initial EIA was completed in October 2006; and moreover, the full EIA report was completed in 2011 the same year the dam is completed after years of construction.

4.4. EIA Approval Process in Cambodia

Cambodia has not yet had EIA law. At the time of writing, the draft EIA law is on its way through series of consultations among civil societies and communities to bring public concerns and recommendations to contribute to the draft law. Cambodia depends on two main legal documents: [1] Sub-decree 72 on the Environmental Impact Assessment Process 1999, and [2] The Declaration on General Guideline for Preparing IEIA/EIA Report. Other relevant regulations are [1] Law on Environmental Protection and Natural Resource Management (1996), [2] Sub-decree on Water Pollution Control (1999), Sub-decree on Solid Waste Management (1999), Sub-decree on Air and Noise Pollution Control (2000) 52.

As raised by the official from MOE in 2012, less than 10% of around 2,000 main development projects in Cambodia like dams, roads and bridges which was approved by RGC over a period

46 According to the official from the member of parliament of Cambodia on 15 February 201347 Cambodia Daily Newspaper, Regional Bank, IMF Note Risks to Government’s Dam Guarantee, http://www.cambodiadaily.com/archive/regional-bank-imf-note-risks-to-governments-dam-guarantee-11269/, (accessed 10 July 2013)48 Interviewed with NGO representatives on 19 March 201349 Interviewed with Member of Parliament of Cambodia on 10 April 201350 Interviewed with NGO representatives on 13, 16, 19 March 201351 Interviewed with NGO representatives on 19 March 201352 Presentation by Duong Samkeat, MoE’s official, on 16-17 July 2009 at Royal University of Phnom Penh

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from 2004 to 2011, were implemented with the EIA studies53. Article 72 of the Sub-decree 72 states that every proposed and ongoing project(s) and activities—by private, joint-venture or state government, ministry, institutions—that match the criteria stipulated in the annex of sub-decree, are under the scope of the sub-decree, meaning that IEIA/EIA is needed, except special case that a project will be approved by the RGC (RGC, 1999).

Article 6.4 of Sub-decree 111on the investment process in Cambodia states that the Conditional Registration Certificate (CRC) issued to applicant during investment registration process requires such documents as license, authorization, registration etc. from relevant ministries and institutions (RGC, 2005). These documents include the Environmental Impact Assessment Report which is to be approved by MOE (BNG, 2010). Article 6 of Sub-decree 72 adds that the investment applicant is responsible for conducting EIA study and establishing the draft report (RGC, 1999); but, in practise, the Project Owner (PO) hires EIA consulting company to conduct this study. The selection of this consulting company is done through bidding organized by the project owner or, in most cases, through the introduction by MOE. In the latter case, MOE plays roles like an intermediary to connect PO and EIA consulting companies54. The duration of conducting the EIA study varies depend on the scope of the project; but, it is noted that the duration of field data collection is defined by the MOE. The duration can be as short as one month, and to start field data collection, there must an official permission from MOE55.

Upon the completion of EIA study, dozen copies of draft IEIA/EIA reports are to be submitted to MOE and relevant ministries56 including the Project Approval Ministry or Institution57

(PAMI); and as stated in article 7,14,17 of Sub-decree 72, the feasibility study report is also required to be submitted to MOE. According to article 8, 16 of Sub-decree 72, in case the project possibly causes serious effect on health, public welfare, and natural resources, MOE would require PO conduct full EIA study and re-submit the draft report to MOE through the reviewing process again. Upon receiving Feasibility Study (F/S) report and IEIA report, MOE need to feedback within 30 working day (Article 15, Sub-degree 72). During the 30 working days, MOE conducts IEIA reviewing process including internal and inter-ministerial reviews and feedback to PO(article 11, sub-decree 72).Technical officials at EIA Department of MOE start visiting the project site and provide comment to the draft report within 10 working days, followed firstly by MOE’s intra-department meeting for 5 working days, secondly, MOE’s management meeting for other 5 working days, and finally other 5 working days of inter-ministerial meeting chaired by H.E. Senior Minister of Environment with participations from related Ministries/Institutions, local authorities, NGOs, and other related individuals (Article 11 of General Guideline for Preparing EIA report, 2009). Be noted that comments from each review needs to incorporated in the report and the new version of the report will be presented in the next review workshop58.Figure 4: EIA Approval Process in Cambodia

53 An official from MoE as quoted by the Cambodia Daily Newspaper, November 25, 2012; http://www.cambodiadaily.com/news/few-companies-conduct-envir, (accessed on 5 November 2013) 54 Personal communication with EIA consulting company on 03 May 201255 Ibid56 Ibid57 PAMI is the ministries or institution directly responsible for the project with the project owner58 Personal communication with EIA consulting company on 03 May 2012

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Source: author, 2013

After the 25 day reviewing, MOE has 5 working days to send official letter to agree with the IEIA/EIA or inform that revision is needed; if the report needs revision, MOE will re-comment the revised report within other 30 working days after the date of submission of the revised report. The letter to approve IEIA/EIA is sent to PO, PAM/I, and CDC (article 13 of General Guideline for Preparing EIA report, 2009; Article 15 and 18 of sub-decree 72). For CDC, we observed, the deadline of reviewing by MOE is important and compulsory. Condition is inserted to ensure the report is commented or approved on time. If MOE fails to feedback the findings and recommendations within 30 working days upon the time CDC receives application from PO, the PAM/Iis able to assume that the criteria of the sub-decree is compiled by the (revised) IEIA or EIA report (Article 15 of sub-decree 72,). Within 6 months after the confirmation from MOE that the EIA report is compliance with the criteria of the sub-decree on EIA, PO must implement EMP (Article 23, sub-decree 72).

Critic of EIA Approval Process in Cambodia

In 2003, International Center for Environmental Management (ICEM) reported that EIA process was low in performance. The EIA system is seen to be ineffective because of 3 factors: [1] limited capacity and resources of EIA Department of MOE; [2] the weak interaction among related departments within the MOE and with related agencies, and [3] the low priority given by all relevant government’s institutions to EIA process (ICEM, 2003).

According to initial Key Informant interviews, it is generally heard that, especially from CSOs, the EIA approval process in Cambodia is still limited; the main problem claimed by all of the interviewed NGOs is the quality and reliability of EIA report because of the fact that EIA process lack of participation. Consultation which is one of the EIA requirements has not been fully or properly conducted in Cambodia59. The contents of the report, for example, are similar among various EIA reports which mean that it is apparently copied from one report and pasted to the others60. However, the interviewed NGOs acknowledges that NGOs’ representative and the representative from community are allowed to participate the inter-ministerial meeting organized by MOE which is chaired by Minister of Environment to

59 Interviewed with NGO representative on 19 March 201360 Interviewed with NGO representative on 16 March 2013

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comment on the final draft of EIA report; but they are informed too short before the date of the meeting. Usually the government gives them around 3 to 5 days during which NGO Forum on Cambodia has to manage to organized meeting among them their network to discuss the very thick EIA report full of technical information to bring comment back to the government. Together with the limited access to information on EIA, CSOs cannot well contribute to the report. Moreover, with the lack of monitoring activities from those NGOs, it is hard to say that the government consider and integrate their comment into the report or not61.

In Cambodia, it seems that EIA is only the complement tools for only making the project approved, not for rejecting the project62. There are many factors which create this perception and situation. Firstly, it seems that the government use this EIA process as a tool to attract more investor; more investment mean more job creation; secondly, there exists the corruption and the limited capacity of implementing agency (MOE); thirdly, it understandable that EIA process can be influenced by a small number of high ranking official in Cambodia through the top-down decision making by their spoken-out commitment and strong support to the proposed project63 .

4.5. Key Institutions Involve in Hydropower Decision Making

Regarding hydropower decision making, there are key actors who make decision, enforce the decision and advocate the process of the decision. At national level, National Assembly is the top institution to approve financial guarantee for investor and other inter-related such institution/ministries as COM, CDC, MEF, MIME, MOWRAM, MOE, EAC, CNMC, and other institution in provincial, district and commune and local level as follows:

National Assembly (NA)NA possesses legislative power to pass a vote of confidence in the RGC by an absolute majority vote of all Members. The role of NA has the authority to approve the national budget, state planning, loans, financial contracts, and creation, modification, and annulment of taxes (Article 90(new) of Cambodian Constitution). In Cambodia, NA is seen to approve the law for guarantee of payments for hydropower projects. Even though there many in kind and in case incentives to encourage investors to come to Cambodia; however, there is not any clear clause or guideline in Cambodia’s regulations that the government has to request the NA for guarantee of payment for such investment as hydropower project, while the Cambodia has done for several hydropower project already.

On February 21, 2013, the government has signed 13 payment guarantees to investors in energy sector including coal-fired power plants and hydropower dams in Cambodia. He added that “It is the government’s obligation to do a guaranteed payment for investment companies whenever Electricite du Cambodge miss a payment or don’t pay the bill.”64 For example, the financial guarantee law for LS2 was set to be approved on February 15, 2013. On the day, the Member of Parliament’s official requested for the postponement of the approval because [1] the affect is huge and needs experts including NGOs working in this area to get involved in a more detailed assessment of EIA, [2] related documents were provided his party too late (the Member of Parliament’s official just got the project document in the morning of the approval date); [3] the implementation agreement (IA) and buy-sale agreement of the project are not available to the opposition MP; [4] lack of participation from

61 Ibid62 Interviewed with NGO representative on 19 March 201363 Ibid64 Cambodia Daily Newsletter, Government Has 13 Payment Guarantees for Energy Projects,http://www.cambodiadaily.com/news/government-has-13-payment-guarantees-for-energy-projects-11377/, (accessed on 13 August 2013)

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affected people; only the positive facts reported65. In spite of strong request from opposition party, the approval went easily on the day.

The Council of Ministers (COM)COM is the top executive organ of the government which is elected for 5 year terms by the NA. It serves as the administrative nerve center of the government, whose work are to prepare, facilitate, coordinate, unify, and guide all activities of individual ministries and local government (Suhardiman et al., 2011). For large scale, sensitive and important project such as hydropower electric project, the decision making will be covered by COM. The CDC shall submit for the approval from the COM for the investment projects that fall into one of the following conditions66:

Investment capital of USD 50 million or more; Politically sensitive issues; The exploration and the exploitation of mineral and natural resources; Possible negative impact on the environment; Relevant to long-term strategy; or Infrastructure concession

The Council for the Development of Cambodia (National Level)The CDC is the sole and One-Stop Service organization responsible for the rehabilitation, development and oversight of investment activities including the evaluation and the decision making on all rehabilitation, development and investment project activities67. Nevertheless, it does not necessarily mean that all investment has to go through CDC system. In Cambodia, the investment process can be also done through the mechanism in each province and municipality. Investment project with the capital no more than USD 2 million can be processed through the registration with Sub-Committee on Investment of the Provinces-Municipalities. CDC/CIB (Cambodia Investment Board) will be responsible for the registration for the project’s capital exceeds USD 2 million or if the project locates in the authorities of at least two provinces-municipalities or in special economic zones68. For this reason, by considering its trans-boundary impact and the amount of investment, the hydropower investment project has to go through CDC/CIB system.

Ministry of Industry, Mine and Energy (MIME)MIME is an important ministry responsible for setting and administrating the government policies, strategies and planning in the power sector69. The ministry has its mandates and responsibilities including but are not limited to the research on the hydropower distribution networks and the estimation of the potential for the electrical projects development in case the project main purpose is electricity. In addition, the ministry also play role in monitoring existing hydropower dams70. MIME is the MoU signatory with investor to conduct feasibility study of any possible hydropower development project and acts as the primary focal point for hydropower developers who are interested to invest in Cambodia (Middleton, 2008:19).

Within the ministry, the Department of Hydropower is the main division dealing with studying, developing and implementing hydropower development. The department roles include71:

65 The address by the Member of Parliament’s official on 15 February 201366 Article 11, “Sub-Decree No.147 on the Organization and Functioning of the Council for the Development of Cambodia67 Article 3 of the Law on Investment of the Kingdom of Cambodia199368 The sub-decree 17 on the Establishment of the Sub-Committee on Investment of the Provinces-Municipalities of the Kingdom of Cambodia issued in 200569 Article 3 of electricity law of Cambodia 199370 The Sub-decree on the Organization and Functioning of the Ministry of Industry, Mines and Energy (1999)71 http://www.wepa-db.net/policies/structure/chart/cambodia/doh.htm, (accessed 20 September 2013)

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developing and implementing the national policy of electric power including low cost of electric power utilization, effective uses and making electricity available in most urban and rural areas;

collecting, analyzing, maintaining and utilizing data for study, and developing hydro-electric power in potential areas with sound environment; and

developing and implementing the action plan of hydro-electric power development throughout the country, including its monitoring program. In the case of the Kamchay Dam, (Middleton, 2008:19) MIME is the ministry that was responsible for bidding process in 2004 and worked with the bid winner by facilitating the project on behalf of the government.

MIME in partnership with Ministry of Economy and Finance (MEF) is the owner of the Electricite du Cambodge (EDC) (WB, 2006:8).

Ministry of Environment (MOE)MOE possesses the significant power and authority for the protection the natural resources and the prevention of environmental degradation in the country. MOE is the only main ministry to review EIA of every private and public project before the projects are submitted decision making from RGC. MOE has the responsibility as follows:

scrutinize and review the report of the Environmental Impact Assessment in collaboration with other concerned ministries;

follow up, monitor and take appropriate measures to ensure a Project Owner will follow the Environmental Management Plan (EMP) while project construction is taking place and accede to their EIA report's approval (Article 3, sub-decree 72).

The Project Owner has to acknowledge the findings and recommendations to the EIA report in which have been approved by the MOE, proceed with further implementation (Article 4, sub-decree 72). In term of monitoring, MOE has the right to co-operate with other line ministries/institutions to halt all projects’ existing/ongoing activities which failed to accomplish the EMP, stated in the approval of their EIA report (Ibid).

Ministry of Water Resources and Meteorology (MOWRAM) Article 5 of Water Law of the Kingdom of Cambodia states that MOWRAM is mandated to manage, lead and supervise the implementation of the Law in cooperation with ministries concern or a join commission shall be set up in case of need to settle and coordinating works and activities among those ministries. MOWRAM (Middleton, 2008) is responsible for the overall management of surface and ground water resources in Cambodia. There is one department namely the Department of Water Resources Management and Conservation of MOWRAM that oversees the ministry’s main function in relation to hydropower development which includes issuing licenses for water use and water works construction, monitoring the compliance from the project owner, and imposing water user fees (Suhardiman et al., 2011). Article 4 of the law states about Integrated Water Resources Management (IWRM), which means that in cooperation with other relevant agencies, water and water resources need to be considered for an effective and sustainable water use for human being, environment and other sectors. Further, article 17 also states about the power of MOWRAM to modify, suspend, or cancel water license if there is the violation against the condition stipulated in the license, or if the water use cause negative impact on public health or the environment.

Ministry of Economic and Finance (MEF)MEF is responsible for performing the guidance and administration of the economy and finance of the Kingdom of Cambodia to support socio-economic development in the context of free market and social equality. The ministry’s functions and duties widely cover the economy and finance sector which also include the participation in the formulation of policy

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and management of investment, and the collection of tax revenues and non-tax revenue and deposit them in public accounts72.

In the case of Kamchay hydropower project, MEF is one of the members of the Inter-Ministerial Negotiation Committee assigned to discuss on technical and financing documents and the contract negotiation. Furthermore, in cooperation with MIME, the MEF is responsible to work on Implementation Agreement and Sale-Purchase Agreement of electricity of the hydropower project73. MEF in cooperation with MIME is the cosignatory of BOT contract after authorized by official letter from the Prime Minister (Middleton, 2008:56), and is also the owner of ECD74. With regard to compensation and resettlement caused by hydropower development, there is one inter-ministerial committee namely “Inter-Ministerial Resettlement Committee (IRC) under MEF that is responsible for addressing resettlement issues, approving compensation rate, and other relevant issues. This leads to the issues of impartiality of its decision because MEF is also a key ministry which encourages development including hydropower (Suhardiman et al., 2011:54).

Electricity Authority of Cambodia (EAC)EAC was established under Electricity Law of the Kingdom of Cambodia in 2001 for regulating the electric power services (Article 2, Electricity Law 2001). The authority is a legal public entity authorized by the government to be an autonomous agency to regulate the electricity services and to govern the relation between the delivery, receiving and use of electricity (article 6, Electricity Law 2001). Its main duties includes, but not limited to the issuance, revision, suspension, revoke or deny of the licenses for the supply of electricity services (Generation License, Transmission License, Bulk Sale License…), and the approval of tariff rates and charges and terms and conditions of electric power services of licensees, except the case of the pursuant to a competitive, market-based process judged by the authority. Moreover, the authority can also review the financial activities and corporate organization structure of licensees in case these activities and organization directly affect the efficiency of electricity supply was well as the power sector’s operation (article 7, Electricity Law 2001).

Cambodia National Mekong Commission (CNMC)CNMC is the government institution of Royal Government of Cambodia established to coordinate management, protection, conservation and development of water and other related resources in the Mekong River basin with crucial roles in coordinating framework to ensure effective implementation of 1995 Mekong Agreement, and to prepare and implement related project and program of MRC under the Sustainable Development Framework of water and related resources in the basin75. The commission is (Suhardiman, 2011:68) coordinates related ministries in Cambodia and connects them to the regional levels. CNMC is chaired by Minister of Water Resources and Meteorology.

Provincial Hall and Lower AuthoritiesIn hydropower development project, provincial hall does not involve in technical works. Its role is to be responsible for managing and leading the assigned commission work on compensation and resettlement issues including the budget to support the committee to work. During the feasibility study and impact assessment phase, provincial hall facilitate and issue the permit for consultant companies to conduct the studies. The results of the studies are to be disseminated to related stakeholders through workshops76.

72 Ministry of Economics and Finance, http://www.mef.gov.kh/about-ministry.html, (accessed 18 June 2013)73 Inauguration speech by Prime Minister during the Kamchay inauguration ceremony on November 7, 2011 in Kampot province74 The presentation by Chea Piseth, from Hydro-electric department of General Department of Energy, MIME, July 200975 Cambodia National Mekong Committee, http://www.cnmc.gov.kh/, (accessed on 13 July 2013)76 Interviewed the official from Stung Treng provincial hall on 7 April 2013, Stung Treng province

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In Kamchay case, the provincial hall work through the subordinate institutions including district and commune office to monitor the impact as well as any incident happening during and after dam construction77. Both in LS2 and Kamchay cases, through lower government’s institution including district and commune, provincial hall try to understand the concern of the people and suggestion for planning and designing the compensation and resettlement78.

The lower administration institution including district and commune office are seen facilitate any related activities in their localities. The common problem of the 2 offices is that they cannot perform and represent the voice of the people well in hydropower dam issues, as claimed by local people that they are order to work on the proposed project and they are also under pressure from their higher boss.

Table 9: Roles of Local Authorities Local Authorities Role

District Office In hydropower case, both district and commune official are all invited to the workshop at provincial hall. District does not play role as the channel through which information can be accessed to commune. During the workshop at provincial level, communes are directly assigned with tasks by provincial office79. During feasibility study and EIA stages, district office has the role to assist the study team on behalf of the government to collect information in the area through informing communes and the people.

Commune Office The same as district office, commune has the role to assist the delegates or study team who come to the area by informing their people to cooperate with. But as commune is close to the people, they has responsibility to gather all of the people concern and requests through commune’s meeting and bring them to provincial meeting80.

Provincial DepartmentsAs the arms of their respective ministries in Phnom Penh, all provincial departments play roles as local institution working on their related issues in each province. In such mega project as hydropower dam, all provincial departments are seen to just follow the planned activities or policy from the ministries’ teams at national level. The provincial department does not have power in such mega project. They are has participated in consultation meeting during which they raised concerns about the possible impact on their sector; they even raised the comment and suggestion regarding the function and alternative design of the proposed dam, but there is not guarantee that their comments and suggests are to be accepted and integrated in the project; everything will depend on the decision by their ministries81.

Table 10: Roles of Provincial DepartmentsDepartment Roles

Provincial Department of Industry, Mine and Energy (PDOIME)

Among the interviewed Provincial Departments like PDOIME, PDOWRAM, MOE, PDA, PDOT in Stung Treng and Kampot provinces, PDOIME is the only leading department that closely cooperates with the hydropower investment companies during

77 Personal communication with Mak Prang commune on 16 February 2013, Kampot province78 Personal communication with Pluk commune chief on 14 May 201379 Personal communication with Sesan acting district on 8 April 201380 Meeting with Pluk commune on April 08, 2012, Stung Treng province81 Interviewed with the official of provincial departments in 2013 in Stung Treng and Kampot provinceswith Pluk commune on April 08, 2012, Stung Treng province

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all stages including feasibility study, EIA study and the construction of dams82.

Provincial Department of Water Resources and Meteorology (PDOWRAM)

PDOWRAM the main institution dealing with water development issues was found to play less important role and does not has much influences on any decision making regarding the hydropower development. As stated by Stung Treng PDOWRAM, this organization is rarely invited to join meeting with PDOIME and the company representative. Therefore, only less information is aware concerning the hydropower development83. There is actually the case that the ministry is invited to join the meeting regarding designing of the hydropower, during which the department raised the concern over water for irrigation; however, the decision is upon the leading ministries84.

Provincial Depart-ment of Environment (PDoE)

PDoE has its role to cooperate and provide information to the company but PDoE does not have rights to monitor the dam project because it was signed at the national level. Even though the PDoE has been received additional duties from the MOE related to hydropower dam, PDoE still face difficulty. For example, PDoE inKampot province is not sure that they can perform their task related to hydropower project well or not because the department does not have enough power to cooperate and order the company; and human resource is limited in term of EIA85.

Provincial Department of Agriculture (PDA)

PDoA did not play a key role in Kamchay hydropower dam. In general, the role of PDoA is to cooperate with the company such as joining the meeting. Sometimes, PDoA also provides some ideas concerning compensation resolution86.

Source: Field survey (a)(b)(c), 2013

Villages/CommunitiesSo far only people directly affected from the construction of LS2 dam are seen to be active in advocating with the government and the company over the compensating and resettlement. The advocacy is led by the leaders of the existing water management communities in their respective villages. It is noticed that the movement of the people is not the same, because of different reason. Srekor village is seen to be the most active in advocating, on one hand, because their village will be flooded if the dam is constructed, on the other hand, allegedly because they are on side of the opposition party (commune chief from Sam Rainsy Party). Pluk village seem does not have strong advocacy activities as the village locate downstream and few families at the construction site already accept compensation in money.

Those advocating communities are seen to use NGOs and media as the way to bring about their concern and complaint to the public. According to one of the community leader from Kbal Romeas, the people are helpless with the existing government administrative structure to solve their problems; only NGOs and media can bring their concern and complain to public and international communities87.

82 Meeting with provincial departments in Stung Treng and Kampot provinces83 Ibid84 Meeting with Kampot PDOWRAM, February 15, 2013, Kampot province85 Ibid86 Discussion and consultation with PDoA on Feb 15, 201387 Personal communication with Keo Mit, Leader of Water Management Community in KbalRomeas village, Sesan district, Stung Treng, December 28, 2012

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4.6. Civil Society on Hydropower

Certain organizations are playing intermediary and representative role for the local people/affected people on hydropower development in Cambodia, especially in the case of the Lower Sesan 2 hydropower dam. These main organizations include NGO Forum on Cambodia, CEPA, 3S River Protection Network (3SPN) and a group of NGOs network called River Coalition of Cambodia (RCC).

4.6.1. Role of NGOs on Hydropower Development

The NGOs have the role to ensure that the dam’s negative impacts especially on local community are minimized to an acceptable. In addition, these NGOs also work to build capacity, to provide knowledge and support the local people/effected people and bring people’s concerns over hydropower development to involved stakeholders. However, there are different perceptions of NGOs’ role in relation to hydropower development, for example, in the case of the Lower Sesan 2 dam. The certain interviewed representatives NGO in Cambodia mentioned that they are working as a bride connecting involved stakeholders (academic, government, private, and local people) to discuss proper solutions. This institution is not to oppose the government’s development, but to ensure accountability, transparency and sustainable development. Moreover, NGOs are expecting a proper space for local people to speak out their complaints/concerns related to hydropower development; to work and to solve problems with the government, representatives of civil societies, academic and private sectors88. Some NGOs revealed that the organization does not oppose any government’s development intervention, but is advocating and working on the impacts caused by hydropower development through workshop and exchange visit to existing dams in neighbour countries including Thailand and Lao PDR.

The status of those NGOs is to obey all existing policy, regulation and law in Cambodia. They are working to protect the right of the people under those development activities, whether the resettlement and compensation is right following Cambodia’s existing law and regulations. Moreover, CEPA also watches how environment is treated by the government under such development project as hydropower development89. According to website of 3S Rivers Protection Network based, this organization’s role is to empower villager representatives to solve issues related to hydropower and to take a part of decision-making process for future development activities in the region90. Regarding to supporting the local people’s concern over hydropower development, on February 14, 2013, villagers from Stung Treng and Ratanakiri provinces were backed to bring the petition to involved institutions including the National Assembly of Cambodia and Chinese Embassy due to the villagers are still not clear about the compensation91. Representative of NGOs argued that they had received little or no information from the government at the national level and the public consultation from the involved stakeholders was limited (Field survey(c), 2013).

Based on field observation and consultation with all key stakeholders, the contradicting views or misunderstanding between NGOs and the government over their status toward dam development in Cambodia is a cause of cooperation failure of the two sides. NGOs representatives wish to see a good cooperation with the government, while government officials do not seem to show good cooperate with them; even though in practice certain government officials at provincial level cooperate with those NGOs, sometime, the request and demand from those NGOs are not transferred to and get the support from the decision makers at higher level. Another seemingly issues is that those government officials at 88 Interviewed with representatives of NGO Forum on Cambodia on March 16, 201389 Interviewed with representatives of CEPA on March 19, 201390 3S Rivers Protection Network, http://www.3spn.org/about-us/background/, (accessed on 26 Oct 2013)91 The Cambodia Daily Newspaper, http://www.cambodiadaily.com/archive/petition-submitted-to-stop-work-on-sesan-2-dam-10531/, (accessed on 27 Oct 2013).

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provincial level do not want issues claimed or requested by civil societies to appear or be known by their bosses to avoid the chance of being blamed. Therefore, NGOs always seek other ways to bring affected people’s voices to public such as through media, their network members or by organizing demonstration and come to national level institutions or the National Assembly in Phnom Penh to seek support92. During key informant interview, certain NGOs’ representatives raised the government still have a view that they are working to support the opposition political parties93 and certain government officials do not well appreciate the ideas raised by those NGOs by saying that those NGOs always speak without basis, they speak on a word of mouth basis or without any concrete evidence94. As explained by the interviewed NGOs’ representatives, this issue appears due to the lack of understanding of the role of civil society among the government officials. NGOs claim that they always raise the truth which is always echoed by opposition political parties to attack the government, which make the government unhappy with that95.

Despite this constrain and contradicting ideas, certain government officials are allowed to participate with the activities of those NGOs; however, they are blocked by their bosses whenever the issue is sensitive. Sometime, even though they can join the events prepared by the civil societies, the assigned government officials are not allowed to speak whatever they wish to without prior informing by their bosses96. Certain NGOs also acknowledge that NGOs sometime go too fast or far beyond what exist in Cambodia’s current context when some of them are influenced by outsiders (donors or funders). Certain NGOs just say “No To Dam”. This results in a situation of “one size fit all” in which international standard or impractical condition is applied by those who even do not well understand its full meaning. As a result, those NGOs cannot fruitfully comment or contribute to particular issues of hydropower in Cambodia context and their position is not stable in keeping good collaboration with the government97. It a fail if any NGOs are not invited by the government to join the discussion on issues relevant to their work field.

92 Personal communication with representative of NGO in Stung Treng on 13 January 2013 93 Personal communication with representatives of NGO Forum on 05 March 201394 Interviewed with the official from Stung Treng provincial hall in May 201395 Personal communication with representatives of NGO Forum on 05 March 201396 Ibid97 Interviewed with representative of NGO on 19 March 2013

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Figure 5: Analysis on Gaps Concerning Cooperation between Government and NGOs

Strength of civil societies

-People oriented- Issue-based-Shorter-term plan/strategy

-Good at aware-ness raising/ca-pacity building/Livelihood

-No legitimate power

-Positive focuses more than negative

-Lack of information dissemination mechanism to local level due to limited resource

-Do not trust NGOs, and not include them in the mechanism

-Stereotype of opposing ideas from NGOs-Limited role/power of local authorities

Strength of Pro-vincial Depart-

ment(Government)

-National interest-oriented

-Longer-term de-velopment

-Policy orientedplan/strategy

-Power to influence decision-making process

-Legitimate power/authority

G a p

-Negative focuses more than positive -Receive little information from the government at national level

-NGOs work too independent sometimes-Stereotype of limited government system-Too ambitious goal

Source: Field survey (a), 2013

4.6.2. Influence of Civil Societies on Hydropower Development

So far, some changes of the government agencies have been found related to hydropower development. Some government agencies have considered civil society’s recommendations even though the government itself does not say that they accept those recommendations. For instance, the Prime Minister of Cambodia used to support the request raised by CSOs to the government of Lao PDR to delay the construction of Xayabori dam and wait for more thorough study to minimize its negative impacts. Moreover, it was also observed by NGOs that after their strong advocating on dam, local authorities visit the villages where the af-fected areas more often98. In the case of Lower Sesan 2 dam, local villagers are allowed to select new locations by themselves, which is a key success for local people because they do not just accept decision making from the government but they are able to make decision by themselves, and this move was also applauded by NGOs99. Moreover, the compensation pol-icy was found to be changed from the original one which was proposed by EVN. Representa-tives of the CSOs and communities believe that this change was a result of their long advo-cacy in the dam (Field survey(c), 2013). More importantly, without a concrete resolution, the affected people have been trying to voice their demands in public with support from stake-holders such as CSOs, and, during at that time, there have been some changes in political support in the Commune/Sangkat Council Election (the details of the change refers to the case study of the Lower Sesan 2 hydropower project).

Certain community-based civil society organizations expressed about the limitation involve-ment in decision-making process with the government agencies. Certain officials from Stung Treng Provincial Departments were reached, but not other upper levels. It is a difficult situa-tion for the local NGOs to influence the decision-making of the government or provincial in-stitution because not ever issue is transferred to the upper level100.

4.7. Resettlement Policies Change

98 Personal communication with representatives of NGO Forum on 05 March 201399 Personal communication with representative of My Village Organization in Stung Treng on 13 January 2013 100 Information from field survey in Stung Treng province from 12-15 January 2013

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Cambodia still does not have exact policy in relation with hydropower development project. However, the Cambodia’s Constitution, Land Law of 2001 and Expropriation Law of 2010 are the main related regulations used in hydropower issues. Article 5 of the Land Law states that land ownership is protected and no one can be deprived of their ownership; however, this law allows the government to expropriate properties for public interest (RGC, 2001). Further-more, in 2010, Cambodia adopted an Expropriation Law, which widened the path for the RGC to legally expropriate public and private property for projects that serve the national and public interest (RGC, 2010). However, the Expropriation Law was also equipped with tools to keep people from being harmed by establishing processes and mechanisms for expropriation implementation. The Article 22 states that the expropriated properties will be compensated at market price when expropriation is declared. The price will be determined by an independent committee, which will be selected by the Expropriation Committee. The committee is com-posed of the representatives from the MEF and concerned ministries or institutions from the relevant provinces (RGC, 2010). Articles 19 and 34 of the Law, however, state that the gov-ernment can still expropriate property even if there are unresolved disputes; however, prop-erty owners can continue to challenge the expropriation, or the compensation they received in the courts (RGC, 2010).

Accordingly, Cambodia has limited experience with large dams and resettlement because there have never been resettlement caused by the large hydropower dam in Cambodia. The compensation policy for the affected people had been implemented based on each case of hydropower project. For instance, the Kamchay dam required no resettlement, but some compensation was given to households for building transmission lines on their land, and for affected fruit trees and agricultural land. The compensation procedure was based on agree-able negotiation between affected villagers and the dam builder and was facilitated by the lo-cal authorities. Conversely, the Lower Sesan 2 dam which is under the construction prepara-tion stage and is located on the Sesan River in Stung Treng province is expected to require the resettlement of several hundred households, and to compensate them for the losses of ecosystem and other natural and social resources. To address these issues, compensation and resettlement policies have been established and applied (the Law on Cambodian Gov-ernment Guarantee of Payments to Hydro Power Lower Sesan 2 Co., Ltd was approved by the National Assembly of Cambodia) through public consultations with several communities, provincial departments and the MIME (Field survey(a), 2013). The compensation for the af-fected people is claimed to be based on a Sub-decree on Social Land Concessions (RGC, 2003).

In Cambodia, compensation and resettlement mechanism for both existing and on-going dams was divided into two levels including national levels and provincial levels. At national level, the IRC is established and consists of involved institutions including the MEF; the MIME, the dam developer and Provincial Hall. MEF is a chairman in the committee. At provincial level, Provincial Governor is the chairman. Under the resettlement committee, certain technical teams are established consisting of involved provincial departments. However, lacking of financial support, equipment and human resources to implement mechanism at the provincial level were found in the case of the Lower Sesan 2 dam (Field survey(a)(c), 2013).

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Chapter 5: Case Studies

5.1. The Lower Sesan 2 Hydropower Project

LS2 dam is the main target area for this study, which is planned to be constructed in 2014 and it will be the largest dam ever built in Cambodia. The dam is located on Mekong River Basin where there exists 3 Rivers: Sesan, Srepok and Sekong. 3 villages in the upstream (in the planned reservoir), and 2 villages in downstream of the dam were selected.

Figure 6: Map of Lower Sesan 2 Hydropower Dam in Stung Treng Province

Source: Mark; 2012; http://www.rfa.org

5.1.1. Background

LS2 hydropower dam which is expected to build on the Sesan River in 2014 is about 25 km from upstream from Stung Treng town and 1.5 km downstream of the confluence of the Sesan and Srepok rivers. This dam could produce electricity about 400 MW within total project estimated cost USD 781 million (RGC, 2013). The dam will be operated for 40 years before being transferred to the government plus 5 years of construction.

This dam project is aimed at meeting the need of the energy demand which jumps far beyond the supply capability, while in 2010 Cambodia imported about 42% of the electricity energy from the neighboring countries such as Viet Nam, Thailand and Lao PDR (Victor, 2011), and in parallel with the country’s electricity development goal to achieve an annual

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The Lower Sesan 2 Hydropower dam

increase in generating capacity of 20% to stabilize the electricity sector in Cambodia101. The LS2 dam development is ongoing. Obviously, in November 2012, the RGC granted the permission to the Hydro Power Lower Sesan 2 Co., Ltd, a joint venture which 90% of the stock is shared by local business Royal Group, to implement the project. Eventually, in February 2013, the National Assembly of Cambodia has approved the Law on Cambodian Government Guarantee of Payments to Hydro Power Lower Sesan 2 Co., Ltd which includes the compensation policy on environmental, economic and social impacts caused by the dam construction. According the latest update by the Law on Cambodian Government Guarantee of Payments to Hydro Power Lower Sesan 2 Co., Ltd, LS2 dam project would provide a lot of benefits for Cambodia stated as below:

Table 11: The Promised Benefits from Lower Sesan 2 Hydropower Dam- The dam will be the Cambodia’s highest generation capacity of electricity to en-

sure dependency and security energy;- The project would contribute to the reduction of dependency on high cost im-

ported diesel and obtain fixed price electricity for long-term to promote country’s economy development and international’s competition;

- The project will provide thousand jobs for local people and increase incomes for community indirectly to reduce poverty;

- Cambodia would receive additional new technology for Cambodian employees;- Dam would create beautiful eco-tourist site which could attract tourists due to

green natural view surrounding the planned dam when all infrastructures would be constructed;

- The affected villagers would obtain proper and new houses with adequate infra-structures and modern irrigations;

- The investment company would provide 500,000 USD per year (USD 20 million in total) for EDC to train and develop Cambodian human resources; and

- The government of Cambodia expected to earn USD 29.5 million in revenue tax per year once the dam starts to generate power.

Source: RGC, 2013

5.1.2. Predicted Impacts of LS2 Dam

Hydropower electricity development, in particularly the LS2 dam, is the subject of controversial debate in Mekong countries, due to trans-boundary issues, ecological changes and the environmental and social impacts. The negative social and environmental issues have been critically addressed among concerned local and international non-governmental organizations, political parties and CSOs. The LS2 dam‘s reservoir will reach 75 metres above sea level, flood 335 square kilometres and displace 797 families in three communes (RGC, 2013). The dam also affects dozens of villages upstream and downstream along the Sesan, Sreypok and Sekong rivers (KCC, 2009).

There are ecological concerns about the loss of existing habitats for wildlife species in the Lumphat Wildlife Sanctuary and Virachey National Park. Moreover, fish biodiversity will significantly decrease, when migratory fish from the Mekong River are no long able to reach their sanctuary in the protected areas (Biard, 2009). According to the interview, representatives of NGOs mentioned that there will be fish loos which are the people’s daily diet will be lost102. The dam will block 9.3% of the Mekong River Basin’s fisheries and 6-8% of the Mekong River Basin’s sediment, and cause significant hydrological changes to the Tonle Sap Lake103. However, the government claims that the impact on fisheries, for example, is

101 Interviewed with representative officer of MIME on 23 August 2013102 Interviewed with representative of NGOs on 19 March 2013103 Presentation by Ame Trandem on China's Overseas Dam-Building in the Mekong River Basin during Regional Public Forum: Mekong and 3S Hydropower Dams on 3-4 June 2013’, Phnom Penh, Cambodia

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not big; Cambodia still has many other rivers to give such resources and fish can be raised in the dam reservoir; Cambodia still has many other rivers which could supply fish, and the government could encourage an aquatic culture programme for fish protein intake (EVN, 2011). According to a field survey the implementation of resettlement policy of the LS2 dam has been ongoing, but process is slow (Field survey(c), 2013). The downstream community of the LS2 dam will not be provided with compensation; only a few families adjacent to the dam site will be compensated. Some worries have been raised by local villagers regarding to the low water level of the Sesan River resulting from the construction of dams in Viet Nam’s territory. Therefore, the LS2 dam will create limited water flow after the completion of its construction (NGO Forum, 2009).

5.1.3. Lower Sesan 2 Dam Decision-Making Process

LS2 hydropower project are seen in the long-term hydropower development plan developed by MIME in its national sector review for hydropower in 2003. During that time, the installed capacity of the dam is only 207 MW (MIME, 2003). A year later, after the completion of the study of hydropower development Master Plan in 3S River Region, LS2 was once again identified by the government as the first priority with high economic efficiency among the 5 hydropower projects studied in the area (RGC, 2013).

With the proposed project in hand, the government started to discuss with Vietnamese counterpart in 2006 to seek the possibility to construct LS2 dam (BankTrack, 2011) and in 2007, RGC agreed in principle to allow EVN International Joint Stock Company to work on the project’s feasibility and to identify any possibility for co-investment by the 2 countries. During that year, a MoU between MIME and EVN was signed to kick off the environmental impact assessment and the feasibility study for the project which were set to begin in 2008 (KCC, 2009). The feasibility study was conducted by Power Engineering Consulting Joint Stock Company 1 (PECC1) under the cooperation with relevant technical ministries of the Kingdom of Cambodia, and EIA study was conducted by Key Consultant Cambodia (KCC) under the contract with PECC-1(KCC, 2009). In MOE, ENV is required to study 2 projects, Lower Sesan 2 Hydropower in Stung Treng and Lower Sesan 1 Hydropower locate near Cambodia-Viet Nam border in Ratanakiri province (TVK, 2011) PECC1 was also known to be responsible for developing the resettlement and compensation policy (BankTrack, 2011). During that time, the project was claimed to be built for 5 years from early 2012 to 2017 under BOT basis of only 30 year of operation, and 100% of the generated electricity will be used in Cambodia including the current 2MW demand in Stung Treng province which is different from previous intention that 50% of the electricity will be sold to Viet Nam (TVK, 2011).

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Figure 7: Process of LS2 Hydropower Decision Making

Source: Author

The studied of EIA started in late March 28, 2008 including 2 main consultations; the first consultation was conducted in February, 2008 with villages in Stung Treng and Ratankiri provines where hundreds of people are invited to participate. The second public consultation was done in May 2008 in Sesan district, where only government relevant local officials including village chief were allowed to participate (KCC, 2009). The several reviews104 of draft EIA report started from early 2009 and finalized by the inter-ministerial meeting in July 2, 2009 with relevant ministries and chaired by Minister of Environment. The final comment from MOE to the draft EIA report was seen on the last later from MOE dated February 9, 2010.

In 2011, Cambodia-Viet Nam Hydropower Company which was a joined venture between EVNI and Cambodian conglomerate Royal Group was known publically (Mark, 2012) and until April 2012, the joint venture was officially announced and LS2 hydropower was then set to operate in 2017. However, by in November, 2012, EVN was no longer the main shareholder of the project when Royal Group signed an agreement to build LS2 hydropower dam with Hydrolancang International Energy Co. Ltd105. The Implementation Agreement (IA) was signed between MIME, MEF and Hydro Power Lower Sesan 2 Co., Ltd. on November 26, 2012 (RGC, 2013) after the project was approved by the RGC during the plenary session of the Council of Ministers on November 02, 2012 (RGC, 2013). The IA set clauses saying that the RGC needs to guarantee the business of the project investor from defined risks and need National Assembly to ratify this. Therefore, on February 15, 2013, the National Assembly voted to ratified the Law on Financial Payment Guarantee by the Government of Cambodia to Hydro Power Lower Sesan 2 Co. Ltd. to cover 2 conditions: 1. the government guarantee to pay for fee of power purchase in the event of non-payment by EDC; 2. the government will buy the project means in case that the company cannot perform because of political force majeure event.

Be noted that presently, Hydro Power Lower Sesan 2 Co. Ltd is made of Local conglomerate Royal Group own 90% of the share in partnership with China’s Hydrolancang International Energy Co. Ltd as additional partner and EVN owns only 10% (RGC, 2013).

104 The review of LS2 draft EIA study includes: inter-department review, the review by management team chaired by Secretary of State during January, 2009.105 Cambodia Daily Newspaper, Agreement Signed for Construction of Lower Sesan 2 Dam, http://www.cambodiadaily.com/news/agreement-signed-for-construction-of-lower-sesan-2-dam-6335/, (accessed 08 January 2013)

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5.1.4. Stakeholder’s Participations

Based on EIA report was conducted by KCC in March 2008, consultations were conducted two times. The first consultation was conducted in February 2008 in villages in Stung Treng and Ratanakiri provinces where hundreds of people are invited to participate (KCC, 2009). At the end of meeting 85% of participants present said that they disagreed with the proposal (Mark, 2012). The second public consultation was done in April 2008. The result was different from the first consultation because it was claimed that about 94% of participants were in agreement with the project (Mark, 2012). Based on field survey, the reason that some people cannot express their opinion is because they cannot speak Khmer language (Field survey(c), 2013). According Representative Manager Office for the Electricity of Viet Nam Company (EVN), the company also invited people’s representatives and local authorities to visit dams in Viet Nam and see the compensation and resettlement policy (TVK, 2011). Later, a third meeting was held in Stung Treng town where only the affected communities, provincial departments, representatives of NGOs, holders of affected economic land concessions, the officials from the MOE and MIME. During the meeting representatives of KCC and PECC1 delivered PowerPoint presentation and only a few participants were recorded to have asked questions. The majority of affected people located upstream and downstream of the dam site were not consulted during the EIA process and people who will indirectly affect by LS2 dam were not consulted (KCC, 2009; Mark, 2012). There were limited affected people were consulted in EIA report due to about 30,000 people living upstream will be negatively affected by the Lower Sesan 2 dam and ten thousands of people living downstream (NGO Forum on Cambodia, 2009).

Based on field survey, the Stung Treng Provincial Department of Industry, Mines and Energy (PDOIME) and the Stung Treng Provincial Hall are the key institutions that mostly joint and discussed hydropower development issues with the company. Lacking of participation mechanism among the government agencies and the company while there are only few representatives of provincial departments could join and know about the EIA process (Field survey(a), 2013). For instance, even though MOWRAM is a main institution dealing with water development issues, in practice, Stung Treng Provincial Department of Water Resources and Meteorology (PDOWRAM) was found to play less important role and does not has much influences on any decision making regarding the LS2 dam. PDOWRAM was rarely invited to join meeting with PDOIME and the company representative. Therefore, only less information is aware concerning the hydropower development106.

The first draft of EIA report was reviewed by inter-department and management team chaired by Secretary of State in January 2009 and finalized by the inter-ministerial meeting in July 2009. The updated EIA report was then submitted to the MOE, and finally approved in June 2010107. On November 02, 2012, government indicated that the company who are responsible for constructing the LS2 dam to build houses for thousands of affected people that they are going to resettle in new locations108. As a result, November 23, 2013, concrete house with eight members living, 5 ha of agricultural land and 5,000 m2 (50m x 100m) of village land will be offered to affected villagers (Field survey, (a) (c), 2013).

106 Consultation and discussion with Stung Treng PDOWRAM107 Letter from Prime Minister Samdech Hun Sen, Letter No31: Clarification to the request by HE Son Chhay, Phnom Penh Parliamentarian, for delay in the implementation of the Hydropower Project of Lower Sesan 2 of the Vietnamese Company EVN in joint venture with the Royal Group Company, 28 July 2011.108 Cambodia Daily Newspaper, Dam Approval Angers Villagers, Rights Groups, http://www.cambodiadaily.com/archive/sesan-dam-approval-angers-villagers-rights-groups-5231/, (accessed 05 November 2013)

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5.1.5. Compensation and Resettlement Mechanism and Policy

Cambodia has limited experience with large dams and resettlement. For instance, the Kamchay dam required no resettlement, but some compensation was given to households for building transmission lines on their land, and for affected fruit trees and agricultural land. The compensation procedure was based on agreeable negotiation between affected villagers and the dam builder and was facilitated by the local authorities. For instance, for an uprooted durian fruit tree, a variety of compensation up to USD 500 was paid per tree and for agricultural land, USD 3 was paid per square metre (Field survey(b), 2013).

Conversely, the LS2 is expected to require the resettlement of several hundred households, and to compensate them for the loss of ecology and environment. To address these issues, compensation and resettlement policies have been established and applied (the law on guarantee payments mentioned above) through public consultations with several communities, provincial departments and the MIME (Field survey(a), 2013). To build the LS2 dam 797 families are expected to be resettled (RGC, 2013). The compensation package includes new concrete houses, residential and agricultural lands, livelihood restoration programs, and infrastructure development at the new location (RGC, 2013) In fact, the LS2 dam’s resettlement and compensation policy was originally proposed by EVN, and classified the type of replacement houses according to the number of family members (for example, house for 1-2 members, 3-4 members, 5-7 members and more than 8 family members) (EVN, 2011). In that former compensation package, each affected family would receive 1.5 ha of agricultural land (EVN, 2011).

The affected people were dissatisfied with this compensation because of low quality of the proposed houses (Biard, 2009). However, in what seen as a better solution, the new compensation and resettlement policy was announced by the RGC again in November 2012 that every affected household in the dam’s reservoir will be compensated with an eight-member-size concrete house, 5,000 m2 of residential land, and an additional 5 ha of agricultural land (RGC, 2013). In addition, people will be allowed to select the new location by themselves. However, while this decision might make certain affected people happier, until May 2013, the new place for relocation is unclear because, as reported by local authorities and the people, the assigned working group is still seeking for acceptable good location for resident and agriculture. Government officials are optimistic about this move by saying that the new package arrangement is the government’s effort to make the LS2’s compensation and resettlement a good model for other dam in Cambodia109. In addition to that, the CSOs and communities believe that this change was a result of their long advocacy in the dam110.

It seems that there is no clear standard for compensation and resettlement in Cambodia, but a case-by-case basis is used. As such, the impact and mitigation measures for the LS2 dam is stated in a discrete law, the Law on Cambodian Government Guarantee of Payments to Hydro Power Lower Sesan 2 Co., Ltd, with a total budget of USD 41.94 million(RGC(b), 2013). The compensation is claimed by certain interview provincial officials to base on a Sub-decree on Social Land Concessions (RGC, 2003); however, the latest proposed condition of the compensation and resettlement for the LS2 dam declared by the government, for example the type of house, was understood to be improved as much as possible in favor of the affected people.

The study by Ian G. Baird shows that the LS2 project failed to meet even the minimum standards for public participation because not every affected upstream and downstream village was included in the study (Biard, 2009). Public consultations were organized in the

109 Interviewed with the official of Stung Treng provincial hall in May 2013110 Interviewed with the representative of NGOs on 16 March 2013

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villages and government officials informed villagers of the dam development and its compensation and resettlement. However, interviewed villagers stated that most villagers were worried about their concerns and demands. Moreover, the information was not effectively disseminated to the affected people due to the language barrier when most of the affected people communicate in Lao (Field survey(c), 2013). Upstream villagers stated that they did not want to have concrete houses because the new houses would be of low quality compared to the good quality wooden houses they used to have. Downstream villagers complained that the dam would cause a loss of biodiversity resources, poor water quality and flooding (Field survey(c), 2013). Regarding the alleged limited scope of EIA study, the interviewed government stated that the downstream villages would only suffer minor affect and should not be eligible for compensation at all and that’s why they were not included in the study111.

Most affected people in upstream and downstream villages are not well aware of any details of the latest compensation policy made by the government (Field survey(c), 2013). For example, most of the affected people do not know about the house and residential land compensation. The affected villagers are not satisfied with the way the information is shared because the information is unclear and is not fully disclosed. The unclear information about the compensation and resettlement policies, and the relocation date, has made the affected people unhappy and curious. At the current location, the villagers do not dare to grow their crops and make any income as they are not sure the concrete move of the construction as well as the resentment and compensation. Regarding this relocation, the Prime Minister of Cambodia has stated that clearly that the affected people will be moved to a new location only when the needed physical infrastructures, and even certain fruit tree, are installed and the village is ready for living. Therefore, at the moment, the priority is to make sure that promised conditions are effectively delivered to the affected people112.

5.1.6. Compensation and Resettlement Mechanism

The compensation and resettlement mechanism for the LS2 dam appears to be clear and well-prepared. The mechanism has been officially established at both national and provincial levels (See Figure below). At national level, the IRC consists of four key institutions: the MEF as chair, MIME, Hydro Power Lower Sesan 2 Co. Ltd and the Stung Treng Provincial Governor as members. This national committee works to approve resettlement action plans and compensation rates for any project requiring resettlement (Biard, 2009). At the provincial level, the committee is chaired by Stung Treng Provincial’s Governor and supported by two Technical Teams led by relevant Provincial Departments. The provincial committee plays a significant role to enforce the resettlement and compensation plans. It communicates with the two technical teams, which are effective in the operation of the committee, engaging with affected communities, mapping out potential resettlement sites, serving as liaison with other stakeholders, and receiving complaints (Field survey(a), 2013).

The establishment and implementation of the compensation and resettlement mechanism was assigned directly to the provincial level by the Office of the Council of Ministers; however, the initial implementation became a challenge because the necessary resources were the responsibility of each of the lower implementing institutions. Even through the mechanism is in place, the enforcement is still limited. The two Technical Teams have yet to produce any significant results because of the uncertainty in budget sources and the lack of necessary equipment for field work which is claimed to be difficult and complicated, especially for the case of Srekor commune (Field survey (a), 2013). The established mechanism does not have any space to handle complaints or communicate information with the affected people. The provincial authorities acknowledge issues, but said that it is

111 Interviewed with the official of Stung Treng provincial hall in May 2013112 Ibid

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because the construction has not yet fully started113. However, the affected people, the CSOs in particular, feel that could share news to meet their demands.

Figure 8: Structure of LS2 Dam’s Compensation/Resettlement Committee

Source: Field survey, 2013

5.1.7. Cultural and Spiritual Impacts

Cultural and spiritual impacts of the LS2 dam have been reported but they have not been included in the latest compensation policy. As reported, the cultural and spiritual impacts are intangible and could not be recorded in economic value (Field survey(c), 2013). In Cambodia, the indigenous people live mainly in provinces in the northern part of the country, including Stung Treng province where LS2 dam is located. The indigenous people have been described as the “most ancient inhabitants of the land with strong cultural and economic ties to their environment” (Palmieri, 2010). In generation, culture plays a significant role as an arbitrator in the informal resolution of internal conflicts in communities, and is strongly believed to aid health-care prevention, provide lucks and high yield of agricultural production, improve livelihood and sustain the economy. The livelihoods of the indigenous are based on animal husbandry, shifting cultivation, and the collection of non-timber forest products from

113 Interviewed with the official of Stung Treng provincial hall in May 2013

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the natural forest. They are strongly united, and have deep respect for customary law, practices and religion (Moul & Seng, 2012). Culture is known to be a key component of being human. It has been found that culture not only provides benefits for the living conditions of people but also allows people to generate more income, and increases happiness, good health and high-yielding crops when it is preserved (Matthews, 2012; Moul Phath and Seng Sovathana, 2012). Both the upstream and downstream villages of the Lower LS2 dam are populated by indigenous people including the Khmer Laotians, Phnong, and Kroeng minorities.

Most of these people profess a belief in Buddhism; however, the cultural and spiritual impacts of the LS2 dam do not seem to be included in the compensation policy. 88% of the upstream villagers (out of 106 respondents) mentioned that their religion and tradition would be affected if they were relocated because their Buddhist’s temples, the guardian spirit of their village (‘neakta’), the guardian spirit of the forest (‘areak’), and their ancestors’ graveyards would be flooded. In addition, the guardian spirit of the rivers (‘neakta krahom kor’) would be affected (Field work(c), 2013). All of these spirits are celebrated from generation to generation, and are believed to protect villagers from illness, bring them happiness and harmony, provide them with good businesses and agricultural activities, and protect them when they travel on the river.

An official from the Stung Treng Provincial Hall claimed that cultural losses had already been integrated into the compensation and resettlement plan. However, they are not mentioned in the EMP of PECC1’s EIA report or in the Law on the Cambodian Government’s Guarantee of Payments to Hydro Power Lower Sesan 2 Co., Ltd. adopted by the National Assembly in February 2013. The stakeholders involved might not consider the loss of cultural and spiritual beliefs as important as the loss of economic benefits. In any case, the local people argued that the loss of their spirituality cannot be compensated – if their villages are flooded; they are gone, except for the Buddhist temples which are seen to be easier to compensate because these could be built in the new location. Elders interviewed in the Srekor villages mentioned that these issues will have to be resolved traditionally if people are to feel more satisfied about the compensation package.

Traditionally, the people in the areas surrounding the LS2 dam site either bury or cremate their dead. Cremation occurs at the local temple, while burials are performed at communal graveyards close to the villages. These graveyards are extremely important spiritual sites. The families of the dead frequently pay their respects to the dead in order to attract good luck, and make offerings of food, and burn incense for them. They may invite Buddhist monks to perform ceremonies in the graveyards, especially on Phchum Ben Day (the day of the ancestors, an extremely important religious holiday in Cambodia) and Khmer New Year’s Day. It is believed that the ancestors will be angry and curse them with sickness or other problems if they fail to conduct these rituals. The elders stated that if the area is flooded, there are two ways of dealing with the ancestors’ graveyard: giving up or moving them to the new location. In any of the two ways, spiritual and traditional rituals will have to be performed, and so do the moves of other spirits (NhoiySro, Elder in Kbal Romeas village, 2013). Moreover, in seeking out a new place to live, local people must first ask the spirit of the land guardian (neakta) for permission by praying and through rituals.

Such respect and ceremony is considered vital to the villagers’ lives and their harmony. For the people, any development or activity that displeases the spirits will harm all of them. Even though cultural and spiritual loss is very important to the local people, support for this issue seems to be unclear and has received less attention from the project developer and the RGC. Without a concrete resolution, people’s concerns rise up and they seek an alternative solution from outsiders including political parties who might help to reduce their worries. Meanwhile, the affected people have been trying to voice their demands in public with support from stakeholders such as CSOs, and, during at that time, there have been some

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changes in political support in the Commune/Sangkat Council Election. This change in support is explained in the next section that critically analyses how the local villagers have started to use their voice and rights to generalize and mobilize a shift in political support.

5.1.8. Shift in Political Support

Cambodia had passed some certain eras. In the post-colonial era, the Cambodian state pursued a socialist development strategy. In recent decades, Cambodia has adopted a new development strategy premised on a greater role for democratic society and opening private investments as part of economic growth in the context of utilizing natural resources including forest and water resources for political power and state economic intervention (Field survey(c), 2013). The democracy process in Cambodia flourished in Cambodia after the Paris Peace Accord signed by Cambodia’s disputing parties in 1991. The first National Assembly Election was managed by the United Nations Transitional Authority in Cambodia (UNTAC) in 1993. This was the first time ever that Cambodian people were given rights to select their political parties through a democratic process. In the election system of Cambodia, there are two important elections: the National Assembly Election and the Commune/Sangkat Council Election. Since the first National Assembly Election, the presence of political parties and seats in the national assembly has changed over time. The first National Assembly election resulted in a government with Co-Prime Ministers, which was the result of negotiation between the National United Front for an Independent, Neutral, Peaceful, and Cooperative Cambodia (FUNCINPEC) and the Cambodian’s People Party (CPP). Since the 1997 armed confrontation between the supporters of CPP and FUNCINPEC, the CPP has held the majority of seats in the National Assembly and the number of seats held by FUNCINPEC has continuously decreased. In 1998, the Sam Rainsy Party (SRP), which split from the FUNCINPEC party, and which was known as the biggest opposition party in Cambodia, won the seats in the National Assembly. The popularity of the SRP has been increasing from one mandate to another (see Table below).

Table 12: Timeline of Political Seats in the National Assembly

Year of electionSeat’s political

party in NA RemarksCPP SRP

1st Mandate in 1993 51 - Co-Prime Ministers from CPP and FUNCIN-PEC SRP has not yet formed

2nd Mandate in 1998 64 15 SRP got 15 seats3rd Mandate in 2003 73 24 SRP got 24 seats4th Mandate in 2008 90 26 SRP got 26 seats 5th Mandate in 2013* 68 55 - Cambodian National Rescue Party (CNRP)

got 55 seats - CNRP was formed through the merging of the SRP and Human Rights Party (HRP) in mid-2012

* Preliminary result by NEC in August 2013Source: NEC, 2013

The first Commune/Sangkat Council Election was held in February 2002, and aimed at establishing and promoting democratic development in Cambodia through decentralization and de-concentration. This election is held every five years to select the Commune/Sangkat Chiefs and Commune/Sangakat Councils. The ruling CPP currently administers most of the communes in Cambodia. Stung Treng province has a total of 34 communes. Referring to the Table 2 below, the result of the 2nd Commune/Sangkat Council Election in 2007 indicated that the 34 commune chiefs were all occupied by the ruling CPP party while the SRP secured only three positions as first deputy commune chiefs (NEC, 2007). After the 2012

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Commune/Sangkat Council Election, the SRP won for the first time the position of Commune Chief in Srekor, which is one of the seven communes of the Sesan district in Stung Treng province and one of the three to-be-flooded communes of theLS2 dam. With the result of 294 votes for the CPP and 539 votes for the SRP (NEC, 2012), this opposition party was appointed to administer and govern the two villages as Srekor 1 and Srekor 2 for a five-year mandate from 2012 to 2016.

Table 13: Commune/Sangkat Council Election Result in LS2 Dam Reservoir

Name of commune Commune Chief PositionYear of 2007 Year of 2012

Srekor (Upstream) CPP SRPKbal Romeas (Upstream) CPP CPPPluk (Downstream) CPP CPP

Source: NEC, 2007; NEC, 2012

To hold this position as a commune chief, there are many challenges such as administration, social security, natural resource management, delivering public services, and political influencing, which need to be managed and controlled in an effective manner. In this sense, the current Commune Chief has been dealing with certain issues such as solving overlapping land issues between community with local land economic concession company, and support the villager networks to have stronger voices in order to seek more interventions to protect natural resources including forest, wildlife and fish which will be greatly impacted by the LS2 dam. Local villagers indicated that the shift in political support was because they wanted to select a new commune chief who was more responsive to issues in the commune, especially the dam project. But the study shows that several factors led to this political change. The affected people do not want the dam to be built in their area because their lives rely mainly on the environmental and natural resources which will be negatively affected (Field survey(c), 2013). However, because the LS2 dam is the government’s project, it is impossible to depend on local authorities from ruling party, whom was claimed by the villagers to be already under the government’s structure (Field survey(c), 2013); therefore, it is a good for the SRP when they are seen to be actively advocating for the CSOs and when they win support from the affected people through their promise to respond to the people’s demands, such as to stop building the LS2 dam, protect the villagers who collect NFTPs and logs for family purposes but crackdown on illegal logging, and reclaim community land from the land concession company (Field survey(c), 2013).

Secondly, people were very worried about how the compensation and resettlement would be implemented. The people are not well informed by the mitigation intervention from the government and the dam builder. The lacking of information sharing on the compensation mechanism and the unclear indications on items relating to payment for the villagers’ property losses, has resulted in most of the affected people having less trust and confidence in the mechanism. Instead, most of the affected people complain that they receive their information on the LS2 dam’s compensation policy and resettlement actions mainly from independent media, non- governmental organizations and civil society (Field survey(c), 2013). Thirdly, if the project is built, the affected people want local authorities to make sure that their livelihoods at the new locations will mean that they are better-off and that they will get the benefits from the dam and not just be the losers. To achieve this, the people’s concerns and demands must be carefully considered by the RGC; however, the space for the people is limited, which causes them to seek better channels to convey information, concerns and complaints to key players such as government institutions, the national assembly and the dam company (Field survey(c), 2013).

The loss by the CPP in the Commune/Sangkat Council Election in Srekor commune is a message to the government regarding the LS2 dam development and the way the mitigation measures are implemented. A leader of the CPP working team in Srekor commune

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confessed that money cannot buy everything114, meaning that traditional propaganda such as giving money and gifts probably no longer works, but the development policy should be considered seriously. During his mandate, the new Srekor Commune Chief from the opposition party was seen to be very active in the public media, raising concerns over the issues of the LS2 dam; however, his demands were seen to have changed from stopping the dam to making sure the affected people were better off after the dam’s construction (Field survey(a), 2013). However, there is no significant change in the government’s position towards the LS2 dam project. The change of local administrative body exists only in the Srekor commune where there are two villages that will be totally flooded even though changes were noticed in other communes which will be partly flooded by the dam through the Commune/Sangkat Council Election. This also means that the loss of Srekor commune alone will not affect the National Assembly Election in 2013 because there is only one National Assembly seat in Stung Treng province. Based on the results of the National Assembly Election announced by the NEC on August 12, 2013, the CPP still occupy the National Assembly seat of the province (NEC, 2013).

5.2. Kamchay Hydropower

The Kamchay dam is a first large scale hydropower project in Cambodia. Even though the dam is outside Mekong River’s basin, this dam will be a lens to check the under the hydropower decision making process in Cambodia; moreover, it will be a space where the study can look into the consequence of the decision making process of the project.

5.2.1. Background of Kamchay Hydropower

Kamchay hydropower dam locates in Teuk Chhu district of Kampot province, South-Western part of the country, around 15 km upstream north of Kampot town. The hydropower has two dams—the first one is around 4.5 km from Teuk Chhu tourist site and the second one is 300 m from the site. The first dam height is 153 m, and the second one is 31 m from the bottom of Kamchay River (SAWAC, 2011).

114 Interviewed with the official of Stung Treng provincial hall in May 2013

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Source: SAWAC ESIA Report 2011

Dam #1

Dam #2

SnamPrampi

Mak Prang

Figure 9: Location of Kamchay Hydropower

Kampot Province

Development attempt of Kamchay has long history; it was initiated since before Khmer Rouge regime. The interest of developing hydroelectric dam in Kamchay existed during the 1960s, but vanished when civil war broke out (Mark, 2012). In 1995, Hydro Quebec115 from Canada studied the possibility to build the hydropower project and proposed the installed capacity of 127MW with the estimated cost of USD 270 million. However, the proposed project did not seem economically viable; therefore, the project was restudied again by Tas-manian Hydroelectric Commission Enterprises Corporation (HECEC), a company from Aus-tralia, who proposed smaller installed capacity of only 45MW and the environmental impact would be minimal (World Bank, 1999).The two feasibility studies failed to operationalize the hydropower project when CIDA the main financial support, withdrew out of the project. The factor contributes to CIDA’s withdrawal which is the pressures from local and international NGOs who claimed that project located within Bokor National Park and that the project will be a threat on the environment in the area because of the lack of public consultation (Mark, 2012).

In 2001, MIME went into MOU with Experco116 to conduct another feasibility study again with financial support from the government of Canada through CIDA (Malmquist & Sigfridsson, 2002). This feasibility proposed the install capacity of 180MW and the RGC categorized it as one of the four initiatives of hydropower generation and the project was set to commission in 2010 (MIME, 2003). In 2004, an international bidding was organized and participated by cer-tain bidders form Cambodia, Japan, South Korea, and China and a year later, Sinohydro Corporation, the Chinese state-owned company, was announced the winner of the bidding(Mark, 2012). Sinohydro went into a 44 year BOT agreement with the RGC and started its construction in 2007. According to the ESIA report by SAWAC, the project was originally the Kamchay was planned to produce 194.1 MW. The construction was completed and commissioned on December 07, 2011. It was announced the first major hydropower plant in the country. The Kamchay hydropower dam was financed by the People’s Republic of China through Sinohydro Corporation with the total project cost of USD 280.54 million.

5.2.2. Project’s Purpose

Prime Minister of the Kingdom of Cambodia on December 07, 2011 at inauguration ceremony of Kamchay hydropower dam said that Kamchay dam project will produce power sources which provide great potential for stimulating the economic dynamics and ensuring growth, sustainability growth and social welfare by increasing the power supply capacity to serve the need of socio-economic activities. With the maximum potential of 10,000 MW from hydropower development, the government has intended to utilize this energy to complement the constantly rising price of oil, gas and coal, and other renewable energy sources such as biomass energy, solar energy, and small-scale hydropower plan117.

Kamchay hydropower dam will be serving as sources for clean water, irrigation, and reduction of flood downstream, maintenance of water volume of TekChhu canal, and create tourist site in the area (SAWAC, 2011). As informed by PoDIME, the electricity generated from the dam is used to supply in Phnom Penh and in future perspective it will be serving

115 Hydro-Québec is a government-owned public utility established in 1944 by the Government of Quebec. Based in Montreal, the company oversees generation, transmission and distribution of electricity for all of Quebec.116 Experco is a Canadian consulting and engineering company involving in such business as: agriculture, environment, construction, urban infrastructure, transportation, geomatics, energy, telecommunications and industry.117 Address of Samdech Hun Sen, Prime Minister of the Kingdom of Cambodia on December 07, 2011, at Kamchay Hydropower Electric Dam in Kampot

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industry sector in Kampot such as K-Cement Company, tourism sector (restaurants and hotels) and special economic zone. So far, Kampot residents are not able to utilize electricity from Kamchay hydropower dam yet; but they are still utilizing electricity grip from Viet Nam118.

5.2.3. Kamchay Dam Decision Making Process

Looking at the background of Kamchay hydropower project, the hydropower initiative came from the government of Cambodia to solve the energy issues while technical and financial support was from international institutions. With several studies by various international institutions and experiencing through tension deriving from civil society’s pressures, the government was eventually convinced by the last and additional study conducted in 2001 over the potential of Kamchay hydropower project. Kamchay hydropower, in 2003, was identified as one of the four initiatives of hydropower generation and the project appeared in the government’s short and medium term hydropower development plan and was set to commission in 2010 (MIME, 2003).

MIME held the international competitive BOT bidding for Kamchay hydropower project by announcing the Invitation to Bid in July 2004 followed by bid opening on January 17, 2005119. There were at least 17 companies from Cambodia, Korea, Japan, China, Canada participating the bids (Carl Middleton and Sam Chanthy, 2008). Sinohydro was known to be bid winner when officially announced by MIME on April 27, 2005 shortly after the announcement (Sar.Chhor.Nor) by Council of Minister on April 25, 2005 (SAWAC, 2011). On July 4, 2005, Sinohydro and MIME signed an agreement to consolidate the contract with the presiding by Cambodia Prime Minister Hun Sen and China’ Premier Wen Jaibao (Carl Middleton and Sam Chanthy, 2008) and until February 23, 2006, MIME and MEF singed the 44 year BOT agreement with Shinohydro Kamchay Hydroelectric Co. Ltd. to construct Kamchay hydropower starting from 2007 to 2011. As part of the business registration, Sinohydro request for registration with CDC on July 03, 2006 and the registration was approved on July 31, 2006(SAWAC, 2011).

Figure 9: Kamchay Hydropower Decision Making Process

Source: Authors

Be noted that EIA study was criticized by civil societies and researchers as being too late. Full EIA study implementation of Kamchay hydropower was approved by MOE on January 28, 2010 and until April 2011 the study was completed (SAWAC, 2011). This means that full EIA completed too later than the start of hydropower project, but completed on the year of the construction deadline. Mark (2012) noticed the condition of this lateness as “the rice is already cooked”, and question about the quality and the implementation of the project’s EMP 118 Discussion and consultation meeting with PDoIME on Feb 15, 2013119 http://www.bajuintl.com/English/Web/PicView.aspx?BMID=1006&SMID=10061&NewsID=1429, (accessed 18 June 2013)

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(Mark, 2012). It is also unclear how CDC makes decision to approve investment registration in 2006 when such required document as full EIA is not available. The Cambodia’s National Assembly, on July 26, 2006, approved financial guarantee to Sinohydro for the project implementation. Cambodian government shows commitment to compensate the company if the project faced difficulties or if the project under-performs. As written in a letter to National Assembly on October 19, 2008 regarding China’s investor of Russey Chrum River, the Prime Minister stated “In order to make the investor feel at ease, the government need to ratify a guarantee of payment”120. The government also claim that the guarantee will lead to cheap electricity that in turn will attract more investor to Cambodia (Carl Middleton and Sam Chanthy, 2008)

5.2.4. Stakeholder’s Participations

At local level, Kampong Kreng commune chief said that she did not know clearly about EIA process as she just became this new commune chief. All information might be still kept at former commune chief. Local people in this commune knew about Kamchay hydropower dam construction through taking from mouth to mouth and they saw some activities of Chinese company121. Based on group meeting with local authorities and villagers in Snam Prampi village of Mak Prang commune, commune chief who was assigned in 2007 claimed the company might be invited local people to join the meeting in 2006 but it was not widely conducted because traditionally local people in this commune did not want to join the meeting because most of them are busy with their business activities, and look after their crops plantation (Chamkar). Commune chief indicated that there was a meeting and the company had provided master plan that affects local people, and then commune chief have a role to prepare report of those affected people to negotiate with the company representatives122.

At the provincial level, the Department of Environment has joined meeting twice with SAWAC. In EIA process, the PDoE has a role to provide information and cooperate with study team, SAWAC. By the way, PDoE does not have right to monitor project implementation because in case of Kamchay hydropower dam is a mega project and it is the main responsibility of the ministry. In EIA process, there are two core problems – first, the PDoE does not have enough right to cooperate and order the company as the company closely work only with Kampot provincial hall and PDoIME; and second, PDoE still does not have enough knowledge or capacity on EIA issue due to lacking of expert officials on EIA issue. It is raised that capacity of officials on EIA knowledge should be built by the MOE123.

Representative of PDoA mentioned that his department did not have key role in Kamchay hydropower dam but he used to join meeting that talk about Kamchay hydropower dam, and in the occasion he used to provide some ideas related to impacts from the dam124. It is notice that key respondents from PDoWRAM and PDoT are not able to provide idea about EIA process and participation in EIA. As EIA process seems to be sensitive in a case of Kamchay hydropower so key provincial departments such as PDoE and PDoIME seem do not want to talk about it.

The EIA seem does not gain full attention from main provincial department related to Kamchay dam. For example, PDoIME is unclear about EIA report and up to the date of interview PDoIME has not received full EIA report yet125.

120 Cambodia Daily Newspaper, (accessed 7 November 2008)121 Group meeting with local authorities in Kampong Kreng commune on Feb 16, 2013122 Group meeting with local authorities and villagers in Mak Prang commune on Feb 16, 2013123 Discussion and consultation with PDoE on Feb 15, 2013124 Discussion and consultation with PDoA on Feb 15, 2013125 Discussion and consultation with PDoIME on Feb 15, 2013

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5.2.5. Impact after Construction of Kamchay Dam

According Kamchay Full EIA report (2011), during the construction period, 1,961.69 ha of forest area could be affected including 1,545.69 ha of ever green forest and 416 ha of bamboo forest. This figure also includes the area of Bokor National Park of 2,229.77 ha (mostly are ever-green forest), and 7.85 ha of agricultural land occupied by the people in the areas of dam 2 and its reservoir. Fifteen species in dam reservoir and 17 species of fresh water fish and other 26 fish species living in the lower part of the Kamchay stream where seas and fresh water mixes would be affected. 7.84 ha of agricultural lands in Dam 2 structure and few other crops in the project areas will be affected. Moreover, the livelihood of the people depend on NTFP as well as the tourism sector will be irritated because of the construction structure, activities, waste and the block of water in the Kamchay stream. The report found that fish catches on the Prek Kamchay and the Stung Keo may drop from 25,433 kg in 2006 to 15,499 kg in 2010. Vendors and business people at the Teuk Chhu tourist are estimated to loss over ¼ of their income of over USD US2.86 million in 2006. Income of people will reduced between 50-60% after the project commenced construction. In dry season during the construction villagers notice downstream poor quality of water quality as the water became darker in color with bad smell, which is the result of discharge from the dam construction like cement and other sediment. This water issues could lead to problems with skin and hair for those who depend on the water. However, no measure or compensation was made. When the reservoirs are filled with water, 1,788 ha of wildlife habitats will be affected and the limited flow of water and the block of fish migration will affect certain endanger fish species.

The positive impact during the construction phase that are generally raised by all stakeholder involved are the job creation for local people. The construction of Kamchay hydropower dam also created employment opportunity for local people surrounding the dam. Some of them can work as workers, translators, and guards. Among two visited communes, Mak Prang commune could absorb job opportunity in term of translation as a lot of people could speak Chinese language. It is notice that Chinese school had been taken place in this commune. Expressed by Chinese translator for Synohydro Company thousands of workers have been employed during the Kamchay hydropower dam construction but as the dam operation is commenced recently only guards are still working126. It is recognized by group meeting with local authorities and villagers that living conditions of people who worked, especially job as translator; in Kamchay hydropower dam has improved remarkably during the construction period.

Concerns Raised by Local People (after dam)After talking with all stakeholders and local people some issues are concerned over Kamchay hydropower dam including: Breaking/falling down of the dam127: speaking and listening from mouth to mouth lo-

cal people have concerned about falling down of the dam. To respond with this con-cern PDoIME used to ask engineer of Sinohydro but it is answered with a strong confident by this engineer and he has raised question back that “have you ever heard that is there a falling down of the dam in the world”128. It is also impossible for a case of Kamchay hydropower dam. The interviewed Chinese engineer also men-tioned that Kamchay dam is built purely with concrete and it will last from 100 to 200 years129.

126 Site visit of Kamchay hydropower dam on Feb 16, 2013127 ? Group meeting in Kampong Kreng and Mak Prang communes on Feb 16, 2013128 Group meeting in Kampong Kreng and Mak Prang communes on Feb 16, 2013129 Discussion with Mr. Chen ZiJian, Sinohydro’s engineer during visit site of Kamchay hydropower dam on Feb 16, 2013

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Not proper management of the dam after BOT130: some local people are afraid of the poor management and maintenance of dam after this dam will be given to the government of Cambodia.

Danger caused by power grid: As exploding of power wire has occurred about 3-4 times already, local people remain face such situation in the future if there is no proper measure by the company131.

High price of electricity: Kampot residents claimed that they should utilize electricity with low price or without charge (three communes are close to the dam as promise) as electricity is producing from Kamchay hydropower which is located in Kampot province.

From the field observation, all key stakeholders/partners, both government institution and local people, express significant advantage of Kamchay hydropower dam saying that the dam prevents flood from Kamchay River and other areas. Group meeting with local authorities and villagers in Snam Prampi village mentioned the Kamchay dam absolutely helps avoid flood problem in the region. They said that, before the construction of dam, if the rain is heavy and long lasting (2-3 days), water from the Kamchay stream flood in their village. Houses, farms and rice paddies of other villages like Moit Peam village located on the other side of the stream are flood and some time the flood last few days; flood severely agricultural loss (death of durian) when the water retreat. However, since the Kamchay hydropower dam has been constructed, flood has not occurred anymore132. The importance of this promised function of Kamchay dam is also raised by Synohydro’s engineer.

Dam also helps regulate the water flow of the Kamchay stream. The interviewed department officials, local authorise, especially the people living in Moit Peam village appreciate the fact that Kamchay dam reduce volume of sea water from reaching their upper part of Kamchay stream. According to villager Deputy Chief of Mak Prang commune, sea water sometime reaches the upper part of Snam 7 village near and during that time, the people and farmer cannot use the water for household or farming especially durian; those who growth durian use pipe water connected from water or they need to dig wells near the stream and pump out the water to irrigate their farms. But with ongoing water release from the dam, volume of sea water decreased while fresh water volume increased; currently, less water lies down on the bottom of the stream and fresh water on the top. Therefore, farmers can pump the fresh water on the top of water stream for irrigation133. The positive impact that seem to satisfied those people living in villages in the southern part of the Kamchay stream is a rural road134

built by Sinohydro for transporting construction materials and equipment to dam construction site as well as for laying out the electricity grid connecting from the dam. Local people and authorities in Moit Meap village said that previously there was no road to access the village from the national road #3. The villagers have to take boat to other side of the stream, for example Snam 7 village, where road condition is good, so that they can go to Kampot provincial town irrigation135. The villagers raise that this limit of road access lead to the increased cost of product and as well as material. One villager claim that building a house during that time in his village costs twice compare to building the same house in Kampot provincial town136. As reported by the official from Mak Prang commune, the Sinohydro also paid compensation to households who have their land or houses affected by the development this access road and electricity grid. Mark Prang commune chief claimed that

130 Discussion and consultation with PDoIME on Feb 15, 2013131 Group meeting in Kampong Kreng communes on Feb 16, 2013132 Group meeting with local authorities and villagers in Mak Prang commune on Feb 16, 2013133 Personal communication with first deputy chief of Makprang commune on 15 Feb 2013134 To avoid damage to the existing asphalt road to Kamchay dam, the company was ordered to build alternative road for construction activities135 Personal communication with first deputy chief of Makprang commune on 15 Feb 2013136 Personal communication with local people in Moit Peam village on 27 Oct 2013

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the provision of this access road even provide an opportunity for his commune to later develop 3 more villages roads for his people. Such commune development was not possible previously due to the difficulty in importing construction material and equipment137. This access road also establish a better link between farmers and market, with which farmers can easily transport their agricultural products to the market in Kampot provincial town, compared before as local people need to take boats138.

Actually, there is no detailed research about the situation of endanger or migrating fish species in Kamchay stream, even though the EIA report of Kamchay dam has expressed this such concern. Local people and fisher men met during the data collection period cannot answer whether certain fish species has lost. However, those fisher men notice the increase of fish stock139. The increased fished stock is significant in reservoir of dam#1 after the dam commission in 2011 until 2012. However, fishers also notice slightly decline of the fish from mid of 2013 because of, as explained by fisher, the volume of water in reservoir of dam#1 has significantly increased140. The people in Mak Prang commune has also mentioned the same phenomenon about fish stock in reservoir of dam#1. However, they claimed that local people who depend on fisheries generally suffer from changing of water flow caused by the Kamchay hydropower dam, which result in the decrease of incomes compared to the period before constructing the dam141. This is because not all fisher men can to fishing in the reservoir of dam#1; but some of them keep fishing at the lower part of the Kamchay dam. Those who can go fishing in the reservoir of dam #1142, some people claim that villagers are allowed to fish near the dam but it has to be about 300 m far away from dam#1 because the company considers about safety of local people143. As claim by a fisher man and certain local people, some fisher men in the reservoir of dam#1 can catch fish around 20kg per day144.

Tourism sector is a well-known occupation of people in Tek chhu district, especially those who live in Snam 7 village, an area adjacent to lower Dam No2. As forecast in the Kamchay hydropower’s EIA report (2011) and as found by Mark (2012) during the construction phase, the water quality of water downstream was not good and smelly. Early 2013 (more than a year), the research team also found that the quality of water after the construction phase was still not good enough for consumption as well as for tourist to play in. This might be because the fact that water is not enough in Kamchay stream. This shortage of water in Kamchay stream can be confirmed when the interviewed Chinese engineer informed the study team that the company is saving water during the first few years so that water in reservoir of dam #1 reaches a required level 152 metres so that all turbines can be run145. During that time, the studied team notice light brown sediment in the water as well as on rocks in the bottom of the stream. This poor quality and less water in Kamchay stream during the construction period and a period a year after the construction were understood and claimed by the vendors are the cost of tourism decline in the area.

This means that local people’s incomes have decreased compared to the period before the construction. However, they notice that their incomes have slightly increased after more than a year from the construction146. According Mak Prang village chief, number of vendors who

137 Personal communication with first deputy chief of Makprang commune on 15 Feb 2013138 Group meeting with local authorities and villagers in Mak Prang commune on Feb 16, 2013139 Personal communication with fisher in Moit Meap village on 27 Oct 2013140 Ibid 141 Mak Prang village chief during group meeting in Kampong Kreng commune on Feb 16, 2013142 Personal communication with fisher in Moit Meap village on 27 Oct 2013143 Group meeting with local authorities and villagers in Kampong Kreng commune on Feb 16, 2013144 Personal communication with fisher man, local people and vendor at Snam 7 villages on 27 Oct 2013145 Discussion with Mr. Chen ZiJian, Sinohydro’s engineer during visit site of Kamchay hydropower dam on Feb 16, 2013146 Group meeting with local authorities and villagers in Mak Prang commune on Feb 16, 2013

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sell in Teuk Chhu resort has switched their direction to sell in Kep province as decreasing of visitors is the main reason147. According to the most recent follow-up late 2013, the water quality of Kamchay stream is much better and more water, especially during rainy season. Certain interviewed vendor, feel not so disappointed, even though they said that before dam is better. Those vendors also said that the decrease of tourist in the area is not solely because the presence of Kamchay dam, but there are more interesting places flourished in Kampot province such as Bokor National Park148.

Kamchay hydropower dam construction has impact on livelihood of people who depend on bamboo and NTFPs collection. When the construction start, the construction company blocked the way used by NTFP collectors. The blockage make those local people, especially rattan and bamboo collector as well as bamboo-basket makers so angry that they collectively protest against the company. However, with the solution from provincial and local authorise, people are allowed to use the way again149. Until recently, after the reservoir of dam No1 was filled up with water, the road used by those NTFP collectors was flooded, pushing most of the people to use locally made ferries which are run by certain local people. Water also floods around half of the bamboo forest collected by the people150. Before dam, people spend only one day to collect a bunch of bamboo which can be sell at 30,000 KHR; they transport the bamboo mostly by their bicycle. However, after dam, they have to spend more time in the forest. Usually they spend 2 nights and 3 days to collect 5 bunches of bamboos, but they have to pay 1,500 KHR for a round of ferry, and another 1,500 KHR for truck to transport their bamboo as the load is too big for bicycle. According to calculation, the income earned before and after dam do not significantly decrease, but people raise the concern that they need to pack food to eat in the forest, and they have to stay overnight in the forest facing many dangers, especially malaria; moreover, dam also reduce the stock of bamboo151. As claimed by Mak Prang commune chief that the number of bamboo collectors is increasing of collectors152, which means that the bamboo stock might be under pressure as well. 5.2.6. Design Issues of Kamchay Hydropower Dam

Until now, it is suspicious among the public about the generation capacity of Kamchay dam. With full operation in rainy season, the dam could produce up to 193.25 MW (SAWAC, 2011). However, recently Kamchay hydropower dam faces the lack of water and the electricity generation runs lower than its capacity. The dam operates its turbine only from Monday to Friday. In March 2013, EDC was anonymously quoted by The Cambodia Daily Newspaper that Kamchay dam was operating at only 10 percent (around 20 MW) capacity due to the lack of water during dry season, which is the cause of electricity black out in Phnom Penh153. However, claimed by Hun Sen, Prime Minister of Cambodia on February 23, 2013 during the inauguration ceremony of Kirirom III hydropower in Koh Kong province, Kamchay dam produce up to 60MW out of its full capacity of 193 MW.

Electricity is the first purpose of building the Kamchay hydropower dam (SAWAC, 2011). The discussion and consultation with all stakeholders, especially PDoIM, clearly reveals that electricity produced by Kamchay dam has been being used to serving high demand of electricity in Phnom Penh city. Before the construction, the local people used to hear about

147 Mak Prang village chief during group meeting with local authorities and villagers in Kampong Kreng commune on Feb 16, 2013148 Discussion and consultation with Provincial Department of Tourism (PDoT) on Feb 15, 2013 and personal communication with vendor in Snam 7 village on 27 Oct 2013149 Personal communication with Snam 7 village chief and basket maker on 27 Oct 2013 150 Personal communication with bamboo collector in Moit Peam village on 27 Oct 2013 151 Ibid 152 Personal communication with Mak Prang commune chief during group meeting with local authorities and villagers on 16 Feb 2013153 Cambodia Daily Newspaper, volume 54, issue 54 on 23 March 2013

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the rumor that they the three communes affected by Kamchay dam will be allowed to use the electricity for free154. However, those local people who used to rely on resources from this river are not able to utilize electricity from the dam155. The people, even people in Kampot provincial town, have been using electricity imported many miles from Viet Nam, with the tariff higher than the tariff in Phnom Penh. However, the price of electricity is lower (920 KHR) than the price before the dam of 1,100 KHR/Kwh. However, certain local villager such as Moit Peam villages located closest to Kamchay dam and where their house roof is a few dozen metres from the Kamchay dam’s power grid still are not able to enjoy such decreased electricity of 920 KHR/kWh. They are still using low quality and limited duration electricity with very high price of 2000 KHR/kWh sold by private company who invest in extended private grid connecting the imported electricity156. When asked about benefit sharing related concept regarding the development of this Kamchay dam, the interviewed people do not express any concern about their loss as they said that there is not significant loss from the dam. But they absolutely mention about lower prices of electricity from Kamchay dam157. As stated in Kamchay dam’s EIA report, agriculture irritation is also one of the purposes of the dam. In practice, water from the dam seems to be far from meeting agricultural demands while the company make use of all water flow potential for electricity generation. If agriculture sector was seriously considered, dam design would be managed in a way that water can be used for agricultural purposes especially in the three districts of Kampot province including Dorng Tong, Teuk Chhu and Chhuk districts158. However, the local people do not traditionally prefer to cultivate rice along the Kamchay stream and almost all of their rice paddies rely mainly on rain water. Since before the dam, almost no water is extracted for uses for agricultural purpose, but it flows directly to the sea. Therefore, building dam or not does not really negatively affect local people even though at the moment the dam cannot provide water for irrigation purpose159. However, according to official from department of agriculture, it is a good way to extract benefits from the water; but the interviewed government officials believe that the current Kamchay design is the only best option in the context of Cambodia if taking the issues of financial source constrain into consideration160. Kampong Kreng commune chief mentioned that water from Kamchay stream from June to November becomes brackish water, and then it directly flows to the sea161. It is observed that benefits from the dam related to water for agricultural sectors seem do not appear yet. However, most visited provincial department hope that if Cambodia has enough electricity such as from other hydropower dams, then water will be considered to be more effectively distributed for agricultural purposes.

5.2.7. Financial Flows of Kamchay Hydropower Dam

It is understandable that EDC, on behalf of the government of Cambodia, and Shinohydro are the only actors who are gaining from the financial flow of Kamchay hydropower dam. Sinohydro is getting incomes from selling electricity to ECD with an agreed upon rate which is allegedly to be 350 KHR/kWh (rumors). EDC as the electricity distributor to users [in Phnom Penh at the moment] is charging users with another higher rate of 750 KHR/kWh. This means that, if the alleged Shinohydro’s selling rate is true, EDC gets approximately 100% income in this business. The government actually gains more financially if we include other revenues from taxes during the dam operation. Shinohydro’s selling rate is so closed to

154 Personal communication with Moit Peam villagers on 27 Oct 2013155 Group meeting with local authorities and villagers on 16 Feb 2013 (Moit Peam village, 29 October 2013)156 Personal communication with first deputy chief of Makprang commune on 15 Feb 2013157 Personal communication with with people in Kampong Kreng and Makprang commune on 27 Oct 2013158 Discussion and consultation with PDoA on 15 Feb 2013159 Group meeting with local authorities and villagers in Kampong Kreng commune on 16 Feb 2013160 Interviewed with Kampot PoDOWRAM on 15 Feb 2013161 Group meeting with local authorities and villagers in Kampong Kreng commune on 16 Feb 2013

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public; all of the interviewed KIs cannot informed the team about the about the rate. “It is the secret agreement between Shinohydro and EDC” said the interviewed Shinohydro’s Engineer.

Figure 10: Electricity Distribution and Financial Flow of Kamchay Hydropower Dam

Source: Field survey (b), 2013

5.2.8. Livelihood Reconstitution

As the full EIA report was not approved while the construction is ongoing, it means that no clear comprehensive Environmental Management Plan (EMP) is in place. During the construction phase, it is apparent that no full plan was taken by the company and local authorities to cope with the project’s impacts. Case-by-case solution was used whenever the issue happened or after people took to the streets to protest (Mark, 2012). Even though the working groups both national and provincial level to monitor the EMP of Kamchay dam was established, it seems that the cohesiveness and the cooperation among all involved institution is very limited. It is observed that the concept of EMP and EMP-related information of the Kamchay dam were limited among most of the interviewed provincial departments. Since the dam commences late 2011, all involved provincial departments do not have specific plan to monitor the project. As stated in the Sub-decree 72 (1999), the Ministry of Environment (MOE) is the main ministry to flow up the implementation of EMP as promised in the EIA report.

However, in reality, Kampot Provincial Department of Environment (PDoE) claimed that EMP is running not so well due to very limited cooperation with the company; Sinohydro, the investment company of Kamchay dam, has been working closely only with Kampot Provincial Department of Industry, Mine and Energy (PDoIME) and Kampot EDC. Both PDoE and PDoIME all mentioned that as Kamchay dam is a national program and it is firmly managed their ministries national level; their departments’ responsibilities to coordinate activities when informed or planned by national level. Actually, PDoIME raised that all huge technical issues will be responsible by committee from the MIME162. In SAWAC report (2011), the Sinohydro set aside USD 17.5 million for environment protection works—USD 12 million during construction period, and USD 5.5 million for the last 40 years. After a dam below the second dam was built to preserve fish species, local fish species will be released into the reservoir for 10 years (100,000 fishes per year) (SAWAC 2011).

162 Discussion and consultation with PDoIME on 15 Feb 2013

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Sinohydro- Invests USD 280.54 million- 44 years of BOT- Produce electricity and sell to EDC

EDC- Purchase/distribute electricity- Purchase electricity from Shinohydro at rate #1, and sell at rate #2- Order Shinohydro to run or stop the production

Energy users- Phnom Penh Residents- Future users: mega

industry in Kampot, Kampong Som, and Special Economic Zone

Buying agreement

Electric FeeRate #2

Electric FeeRate #1

- Electricity flow- Financial flow

Chapter 7: Conclusion

In 2011, since almost all of the approved and commissioned hydropower development projects in Cambodia are technically and financially supported by foreign donor or private investment companies. But recently, there are the involvements of local private investors in the large scale hydropower project in the form of joint venture, for example the case of Lower Sesan 2 dam. This involvement of foreign party in hydropower development is due to Cambodia has limited resources to implement such project. In the case of LS2 dam, it is also noted that there is a change of hydropower investor from Viet Nam to China that is the country play significant role in hydropower as well as other infrastructure development in Cambodia. Even though the change of investor’s shares is claimed to be because the financial problem of Vietnams side, the move toward China is seen to be in parallel with the current strong economic and political ties between the two countries. The evidence shows that in last decades, hydropower dams have been constructed in the country in order to meet the electricity demands associated with rapid economic growths in the sense of industrialization, and promotion of service sector for national development. Hydropower dam is expected to help the country solve the dependency on expensive imported electricity from neighbouring countries. The selection of hydropower as a corner stone of energy policy of Cambodia was party pushed by the untapped water resources as well as the global and regional trend toward renewable energy. The selection of hydropower, especially the large scale one, is also encouraged by the belief that large scale is more efficient and the availability of financial resource and the investor.

The RGC does not reject the possible impacts caused by hydropower project, but stresses that the project are considered thoroughly to ensure to get the win-win solution that the country get the electricity and the negative impacts are reduced. Considering the impact of the hydropower dam, the RGC, at least at the moment, approve only the construction of the project that are on Mekong River’s mainstream, which are expected to produce electricity to support the domestic electricity demand. However, the RGC does not reject the construction of mainstream dam, for instance, Xayaburi dam in Lao PDR, if there is scientific study showing that the impact is acceptable.

The construction of hydropower dams, especially in the Mekong mainstream, has been a controversial issue among concerned stakeholders, as some significant studies show severe negative impacts from dams including changes in ecology, change in water quantity and quality in the river, and social and economic aspects. The result is that most of the affected villagers have deep concerns regarding their losses. The government is trying to justify the development of hydropower with the demand to meet national electricity demands, which are a focus on macro scale, the society as a whole, while making use of the resources which was depend on other parts of the countries. Responding to the mounting concern over the impact of the dam, the government claimed that Cambodia will not build mega dam on the Mekong River’s mainstream by 2030 even though certain large scale like Sambo and Stung Treng dam are already included in the long-term hydropower development plan.

EIA is an aid for decision making tool; however, draft EIA law is still on its way. The EIA implementation has been under strong criticism by civil society organizations. Decision making is expected to help the government decide dam design option, dam location, as well as mitigation measure needed to minimize the negative impact while increase the positive impact. However, experiences show that EIA’s was not an absolute factor supporting hydropower decision making in Cambodia. This can be explained as a waste majorities of existing projects in Cambodia was carried out without EIA study, even though those projects, as stated by EIA sub-decree to be subjected EIA studies. Another example is the case of Kamchay hydropower which is a large scale dam and where full EIA was completed too late, leaving the effectiveness of EMP implementation during the construction phase in suspicious. However, the issues was improved with the following case of Lower Sesan 2 dam, where the full EIA report was well completed for the decision of dam approval in 2012. However, criticism still exists over the

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quality of the EIA report, when insufficient public participation and limited scope of the study were raised and found by civil societies. Meanwhile, it is also noted that, even though still limited, civil societies are gradually open to the process of hydropower decision making and changes is noted to a better condition regarding the development of hydropower development in Cambodia. Regardless the quality of the EIA study, another concern was raised over the implementation of the promised EMP or measures needed for negative impact mitigations, which are always constrained by the limited capacity and the authorities as well as the relationship of follow-up organization at provincial level (MOE) with the main ministry of the project and the investor to make sure the agreed-upon mitigation plan is effectively enforced.

The issue of equal wealth distribution is a big challenge during the fast growing country like Cambodia. Effort is taken to ensure that the poor or the marginalized people gain benefit from development activities in the countries. In term of hydropower development, the purpose is to generate electricity to fuel the economy. Those who are affected or will-be-affected are promised with restoration program and intervention. However, it seems that Cambodia does have clear standard for compensation, but it is done on a case-by-case basis. By the existing law, the government was given a favor to move the project forward, even though the problem of expropriation is unsolved and handover the pending problem to the court, which creates more suspicion about the fairness fair compensation. The implementation of the promised livelihood restoration, for example in the case of Kamchay hydropower, was not clear in term of implementation. This not include how good the EIA and EMP is prepared for the project. This limitation will be serious if no improvement is made in the case of LS2 dam where the impact is much bigger and more diversity.

To get a better distribution of benefit of hydropower dam, deeper study over the impact must be consider and included. This includes director and indirect impact on both upstream and stream village which must be value in economic term and therefore, proper interment must be in place. The example of cultural and spiritual loss of the local people at LS2 dam site is a case of unconsidered loss, and must be considered seriously to maintain the way of life of the people which is generally seen as a movement on the same way to sustainable development. Even though the LS2 dam project is still on paper, concerns have been mounting over the negative impacts especially from civil society organizations. This concern derives from the actually negative transboundary impact the local people is suffering from hydropower dams in Viet Nam’s territory, as well as the improved knowledge of the local people with the support from civil society organization and the increased access to media. People are seen to turn to depend more on civil society organization bring their voice to national level, hoping that their problem will be considered and solved.

The hydropower dam and surrounding natural resources were seen to be used for the benefits and popularity of political parties under the context of democracy. Moreover, propaganda is used in the campaign for or against dam development project. As a result, a shift of political support exists, when the affected people exercise their right in a democratic processes in a hope that their concerns and requests are responded and fulfilled. The change of political support from the ruling party to the opposition party, might not an ideal choice for a win-win solution in the context of LS2 dam, but it is absolutely a message to the government as well as the investment company that things has to be checked in terms of the promised mitigation measure, the interaction with the affected people, as well as CSOs and other stakeholders which need to be improved.

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