Response to the Final Report:

Norwegian Ministry of Foreign Affairs

June 2001

Background
The construction of large dams has been a controversial issue in the debate on energy supplies and water resource management. To bridge the differences between various interests, the World Commission on Dams (WCD) was established in 1998. The Commission has reviewed global experience of the social benefits of large dams (15 m or more high and with a reservoir volume of more than 3 million m3), and has made recommendations on decision-making processes and basic principles for planning and carrying out such projects.

In Norway, electricity production has been the main purpose of dam-building. Almost 100 per cent of our electricity supplies are hydropower-based, and we have developed a good administrative system for this during the past 100 years. Norway has contributed to the WCD's work both in financial terms (a total of NOK 8 million from the Ministry of Foreign Affairs has been channelled through the World Bank) and has also provided technical assistance.

General comments
The Commission's report is extremely interesting and useful, and will be a valuable contribution to the further debate about large dams. The Knowledge Base that the Commission developed during its review of the performance of large dams will be valuable to anyone working on these issues.

The recommendations in the report can be used to reduce unintentional adverse effects of dam-building projects, and particularly their social, environmental and cultural impacts. Norway would urge the importance of taking these aspects into account during dam-building projects, and not merely considering the economic aspects.

However, future decisions on dam-building will still have to be based on an assessment of the advantages and disadvantages of building large dams and of the alternatives. One weakness of the report is that it gives little weight to a description of the socio-economic and welfare advantages of a dam for the population it is intended to serve. It would also be interesting to see an even more thorough discussion of the alternatives to building dams and of what the economic costs and environmental and social consequences of such alternatives would be.

For example, the report cites greenhouse gas emissions associated with dams and their reservoirs as a negative consequence of such projects. However, alternative sources of energy and their consequences are not discussed. This means that the report emerges as somewhat unbalanced, since it describes greenhouse gas emissions from reservoirs as a problem without at the same time considering the positive environmental aspects of renewable hydropower compared for example with the environmental impact of burning fossil fuels.

In Norway, the need for a comprehensive assessment of policy choices relating to dam-building and alternatives to dam-building is met by the system of white papers on energy policy and other documents addressed to the Storting, together with open political discussions at local, regional and national level. This approach may be more fruitful than carrying out this type of assessment for every proposed dam-building project, as the Commission appears to be suggesting.

Norway would, however, like to point out that every river is unique, so that various options must be evaluated in each specific case. There will also be large variations between countries in institutional capacity, the need for dams, and the level of economic and social development.

The decision-making process
Norway agrees that people who will be directly affected by a dam-building project should be drawn into the decision-making process, and would particularly like to emphasize the importance of avoiding land-use changes that are so detrimental to the culture of indigenous people and the natural resource base on which they depend that their way of life is threatened. In this connection, we refer to ILO Convention No. 169 concerning Indigenous and Tribal Peoples in Independent Countries, and especially to Article 27 of the UN International Covenant on Civil and Political Rights, and to the obligation states have under these agreements to consult indigenous peoples and ensure that they are able to participate in processes that affect them.

In Norway, the system for dam-building projects is based on broad public participation at several stages of the process. When individual projects are being considered, the Norwegian environmental impact assessment system ensures that alternative solutions and the social and environmental consequences are evaluated. The Commission's report identifies these as important points that must be given weight in the decision-making process. The licensing procedure involves weighing up the various factors for a particular project. The Government or the Storting (national assembly) takes the final decision on all dam-building projects, which ensures that the advantages and disadvantages are assessed at the highest political level.

The Commission recommends a decision-making process which emphasizes negotiations between the developer and local communities that are directly affected (e.g. the local population who will be displaced by a reservoir) and that gives indigenous and tribal peoples the right of veto over development projects. Norway supports the intentions behind the Commission's proposal on this point, i.e. that adversely affected local populations must be given much more influence over decisions than has so far been the case in many countries.

However, in our opinion the Commission has gone rather too far in the direction of consensus-based decision-making systems. The Commission's model might reduce the influence of public-sector bodies on the decision-making process, and this is unlikely to be a constructive way of dealing with major infrastructure projects, which frequently involve conflicts of interest.

A dam may be built to serve several purposes, for example flood control, irrigation, hydropower production, drinking water supplies, etc., and a number of conflicting interests will generally be involved. The decision-making process can be very time-consuming and costly and can often end in disagreement. Norway considers that in such cases, as in other cases involving major infrastructure development, the superior competent authority should make a final decision which, taking into account all relevant considerations, will be the best solution for the community as a whole.

The intentions behind the report are good, but there is a need for legislation and licensing systems that make it possible for the authorities to take decisions that are important to achieve national goals and safeguard considerations of national importance. The aim should be to evaluate all relevant considerations before a decision is made on a dam-building project, and to ensure that all those affected receive an equitable share of the benefits from the project. A decision to build a dam should not be taken until all affected parties have had an opportunity to express their views on social, cultural and environmental matters relating to the plans and the environmental impact assessment.

Equitable sharing of the benefits/compensation for losses
Norway agrees with the Commission as regards its recommendations for the equitable sharing of the benefits from dam-building projects. Norway has introduced conditions relating to licence fees and obligatory sales of power to the municipalities where hydropower facilities are built, in order to ensure that the local population receives a share of the economic benefits. In addition, industrial development funds are established to help local business and industry.

Norway considers it important to develop satisfactory legislation, especially as regards the displacement of people by dams, and that agreements on compensation must be drawn up before permission is given to build dams.

Addressing existing dams
The Commission points out that more should be done to address the environmental and social impacts of existing dams. Norway will put special emphasis on this in the future. Norwegian legislation provides the authority to require follow-up measures. The possibility of revising licensing conditions means that projects can be followed up and adjusted to meet changed needs or changes in attitudes to dams.

Norway as a partner in development cooperation
The Commission points out that in many countries, inadequate legislation and licensing systems are a serious obstacle to sustainable and equitable utilization of water resources. Similarly, the most serious problems associated with dam-building have often arisen because of a lack of public participation in decision-making processes, together with inequitable distribution of the benefits and a lack of compensation for negative consequences.

Norway supports these views and the main principles set out in the Commission's report on public participation in and transparency relating to planning processes. However, as discussed above, Norway has a somewhat divergent opinion on how the decision-making process should be organized. In Norway's view, it is extremely important to establish adequate legislation and a licensing system for dam-building, and to develop national or regional plans for the utilization of water resources. In this connection, we would like to emphasize the sovereign right of states within the framework of international law to make decisions on the use of their own natural resources based on national priorities.

As a partner in development cooperation with other countries, Norway will give priority to sharing Norwegian experience of hydropower development and will contribute to the development of the necessary technical expertise and institutions. Furthermore, Norway will support public participation in decision-making processes to ensure that all interests are identified and taken into consideration.