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World Commission on Dams / Reuters Media Symposium 14 July 1999

An NGO Look at Large Dams

Presentation by Peter Bosshard, director, The Berne Declaration, a Swiss advocacy group with 16,000 members. Mr. Bosshard is also a member of the WCD's Forum. He has assisted in co-ordinating international NGO campaigns on dams such as the Three Gorges Dam in China, Malaysia's Bakun dam, and Ilisu in Turkey. Mr. Bosshard holds a PhD in history and international relations, from the universities of Zurich, Minnesota and the West Indies

Introduction

My own roots as an activist are in the anti-apartheid movement. So it is a great thrill to be the guest of the new South Africa today. 25 years ago, the Berne Declaration helped to organize a seminar to create the Swiss anti-apartheid movement. One of the speakers then was Prof. Kader Asmal from Dublin. Today the professor is a strong chair of the WCD, and I am honoured to be on his panel.

Being with the anti-apartheid movement has not always been a popular thing. We were told that we were interfering in the domestic affairs of a sovereign country. People told us that a country like South Africa could not meet international standards such as democracy and human rights. And people told us that we should be more patient with the apartheid government, and that too much pressure would be counter-productive.

Today, I am dealing with international financial relations, and let me tell you: We are still hearing the same criticisms. The Berne Declaration is an independent Swiss advocacy group with 16,000 members. We are working towards more equitable North-South relations, and monitor the activities of Swiss banks, companies, and government agencies for this purpose. Swiss companies such as ABB and Sulzer play a major role in the global hydropower market. So at the request of Southern NGOs, we often campaign against destructive dam projects in which these companies are involved. We help to coordinate international campaigns against projects such as Three Gorges in China, Bakun im Malaysia (now shelved), and Ilisu in Turkey. Again Southern governments tell us that we disregard national sovereignty, that we are applying unfair standards, and that we should be more patient.

The problems of large dams

So, what is our position on large dams? They are obviously one option of producing power, or to store water for irrigation. I believe that any large infrastructure project - be it a highway, a thermal power plant, or a dam -should be based on the same basic principles to go ahead:

The planning process should be transparent, participatory, and accountable to the public at large.

Projects must be socially equitable. The benefits should be shared widely. And affected people - who are usually poor - cannot be expected to subsidize the groups which benefit from the project. So all externalities should be fully compensated, and in a way which is acceptable to the affected people.

Projects should be environmentally sustainable. They should not put major natural resources at risk, which are an important source of livelihood for affected people.

Projects should not only be financially profitable, but should also make economic sense. Cost-benefit analyses should cover all external costs.

In theory, most people would agree with these principles. Many development banks and governments in the North and South have policies which stipulate the same things. Look at the World Bank policies on access to information, on resettlement, on the environment. They are quite compatible with our principles. Yet there is a world of a difference between theory, and what happens in actual practice.

Let's look at a few examples.

Resettlement: Globally, reservoirs have displaced more than 50 million people. Nobody knows the real figure - which is telling in itself. In World Bank projects, affected people must be rehabilitated in a way which allows them at least to regain their previous standard of living. Yet in the early 90s, the Bank was not able to find one single resettlement project in Africa or Latin America where this condition had been met (and documented). On India's Narmada river, a private company is presently building the Maheshwar dam. The government of Madhya Pradesh has adopted a relatively comprehensive resettlement policy. In actual practice, the resettlement land is either completely barren, located in the submergence zone, or non-existent. And so on, and so on.

Environmental impacts: Large dams have far-reaching and long-ranging impacts on the ecosystem of river basins. Many of them are still not understood. Reservoirs have so far flooded more than 400,000 square kilometers of land - often floodplains with a high degree of biodiversity. Dams erode the downstream areas and river deltas. They eutrophize the rivers, and increase their salt content. They threaten, and sometimes render extinct, fish species both downstream and offshore. They breed malaria and schisostomiasis.

True, dam-building institutions have policies which are supposed to mitigate the environmental impacts of large dams. Yet again, what a difference between theory and practice. In India, the Ministry of Environment and Forests usually clears dam projects under conditions which must be fulfilled. In 1995, the Ministry found that 87 percent of all projects had failed to fulfill these conditions - and no sanctions are being taken.

Many Northern banks and companies have their own environmental principles too. Well-sounding, sometimes well-intentioned. Yet when an interesting contract is at stake, they tend to shift all responsibility for environmental problems to the governments. (A notable exception was Hydro Ontario, which refused to get involved in the Three Gorges dam when Mr. Strong was at the helm.)

Economics: An important dam-building minister has termed the social and environmental impacts of large dams the "New Age costs". This must sound rather cynical to affected people. Not being "New Age" types, NGOs are interested in the hard economics of large dams too. And again, we find that many large dams are uneconomic even according to their own standards:

Revenues: Engineering companies are under strong pressure to produce favourable assessments. After all, this is what they often get paid for. So they often overrate streamflows and underrate sedimentation. Thus, they overrate power production and future revenues.

Costs: In 1994, the World Bank found that 70 dams which it had funded since the 1960s had average cost overruns of 30 percent. The larger the dam was, the bigger the cost overrun tended to be. No wonder hardly any private investors risk their own money on large dams - unless governments offer them generous subsidies and guarantees.

Many dams are not economic on their own terms. If all costs - including the so-called externalities - are considered, they are even more wasteful. The World Commission on Dams is supposed to evaluate the economics of large dams right now. I had the chance to comment on the scoping paper for the respective review. I suggested that all externalities - including environmental destruction, social fragmentation etc. - should be considered. Achim Steiner, the WCD's general secretary, replied by saying that we should not expect the Commission to do "what economics has not managed to tackle in 200 years".

In a way, the general secretary has a point here. But if you think about it, this point is so revealing. After building 40,000 large dams, spending 100s of billions of dollars, uprooting more than 50 million people, after being on the learning curve for 20 years, the dam industry is still not capable of calculating the full economic costs of their projects. To me, this indicates that dam building is motivated less by the common good than by the vested interests of government agencies, consultants, and equipment suppliers. If their closed decision-making process is not made more democratic, there will be no learning curve.

Different standards for the South?

In countries like Switzerland, NGOs have succeeded in making the authorities reconsider the construction of several new dams. I am often told that Southern governments cannot apply the same standards as affluent Northern societies. I agree that Southern societies have a legitimate right to increase their energy consumption. And certainly, concerns like river-rafting in an unspoilt canyon should not have the same priority in a poor country as in a rich. Yet when it comes to basic principles, I wonder what the argument of different standards means:

Should Southern governments care less about the economics of their power projects because they are poor? Can they better afford to waste resources on a dam which is more expensive than, say, increasing the efficiency of the transmission system? Certainly not.
Should Southern governments care less about the social impacts of their projects? Are their industrial and urban consumers so poor that they need to be subsidized by the even poorer dam-affected people? Again - certainly not. After all, it is the affected people who pay for the so-called external costs, and not the North, or outer space.
Finally, should Southern governments care less about environmental costs? Here even more than in the North, natural resources are not a luxury concern, but support the economic livelihood of millions of people. So our Southern partners argue that dam projects in the South should fulfill the same basic conditions as dams in the North, and I agree with them.

Conclusion

Where does this leave us? Yes, even if no dams are built, there is a lot of inequitable and unsustainable development. And yes, spending 100s of billions of dollars on dams has increased the production of power and food. Yet when I look at the experience of large dams, I believe that with the same amount of money (or less), we could increase the production of power and food more, and for a lower price to society and the environment: If we made planning processes more transparent and accountable. If communities had a fair chance to participate in development processes, and bring in their own knowledge and initiative. If governments spent public money on technological ingenuity (like renewable energies) rather than on subsidizing old, unsustainable industries.

You may say that this sounds rather vague. So let's look at a few concrete alternatives: In China, the introduction of co-generation with industrial boilers would produce more power at a lower cost than the Three Gorges dam - and it would substitute more CO2 emissions. In Malaysia, even solar-panels would not be more expensive than the original Bakun project. And in Turkey, making the leaking transmission system more efficient would be much more cost-efficient than building the controversial Ilisu dam.

Together with our Southern partners, we will continue to work towards more sustainable alternatives. I believe that pressure from the ground is still needed to break up vested interests, and to help dam-builders climb further up the learning curve. I wish to express my solidarity with the 1000s of people who face submergence by the rising Narmada river right now, and who are protesting against a recent decision by India's Supreme Court to raise the dam height - a decision which is completely delinked from ground reality. At the same time, we are open for a dialogue with all interested parties, with governments and industry - if it is meant seriously. In this sense the Berne Declaration supports the work of the World Commission on Dams - politically, personally, and financially. We will make every effort to keep the WCD process participatory and independent, and will take care that the Commission does not restrict the outcome to the narrow limits of mainstream thinking.

Thank you for your attention.

Peter Bosshard

Berne Declaration
finance@evb.ch
http://www.access.ch/evb/bd

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