Profile of Current Practices for Benefit Sharing and Compensation Allocation in Hydropower

Development Projects in Mekong Countries

Mekong Project 4 on Water Governance14 November 2012

Hanoi, Vietnam

Hydropower Dam Development

Outcomes(Distributive

Equity)

Results of allocation

Benefits Costs

Monetary Non-monetary

Envi-ronment

Social

Inclusiveness of stakeholders’ participation

Inclusiveness of stakeholders’ interests in the agenda setting

Research Focus

a

b

Processes(Procedural

Equity)

Theun-HinbounExpansion, Lao PDR

Yaly,

Vietnam

Lower Se San 2, Cambodia

Case Study Projects

Yalyoperating since 2002

THXPUnder construction/

finish 2012

LS2Under planning/

start 2012

Outcomes Case study projects/ Countries

Yali, Vietnam THXP, Lao PDR LS2, Cambodia

1. Sharing of project services

Electricity national power grid national power grid national power grid

Water supply Free supply resettles supply resettles

2. Sharing of non-monetary benefits

Resources entitlements

Priority in hiring during dam construction dam construction

3. Sharing of monetary benefits

Development funds provided & managed by

Project

provided by Project/

managed by Gov.

Taxes to provincial Gov. to national Gov. to national Gov.

Revenue sharing

Sharing of ownership

Sharing of Benefits to Local Communities

• Non-monetary benefits relating to livelihood options could be explored more.

• Development funds/taxes to local authorities need mechanisms to ensure the revenue used for local development.

• More direct sharing schemes have not been widely used.

Outcomes Case study projects/ Countries

Yali, Vietnam THXP, Lao PDR LS2, Cambodia

1. Compensation to resettles

Houses new houses built new houses built Details are not

available. But it is

expected that

compensation

package in terms

of cash and lost

assets will be

provided.

Agricultural land land sizes of each HH

surveyed and allocated

average land size is

allocated across all HHs.

Crops monetary calculation monetary calculation

Public utilities road/electricity/ water road/electricity/ water

Health/ education health centers/ schools health centers/ schools

Other supports agricultural extension Food supplied till income

target reached

2. Compensation to

other affected areas

made to Cambodians

after the incidences.

3. Compensation to loss

of ecosystem

Forestry tax provided to

provincial Gov.

Budget provided/

managed by the Project

Budget provided

to restore impacts

Compensation of Costs to Local Communities

• Impacts areas recognized are ONLY areas flooded -- resettles provided with compensation packages BUT other affected areas are not eligible. Noted that within the eligible group, there are often subsequent issues after compensation.

• Impacts on ecosystem is another area needed attention. Need clear plan on what impacts, how to implement and how to monitor the restoration works under the funds.

Local communities is not the target beneficiaries of hydropower projects

Benefits of services - Electricity targets urban sectors and some is exported.- Electricity supplied to national power grid. need facilities for local to benefit.- Improvement of physical infrastructure provided. Other benefits to enhance

livelihood options could be explored more.

Selected Key Issues on Outcomes

Monetary Benefits- In forms of development funds/ taxes to local authorities. need to ensure the use

of revenue (more difficult to secure when it is sent to the state’s budget).- A more direct sharing schemes ?

Yaly Hydropower Company

Electricity users

EVN power gridNatural resource tax

Value added tax

Forestry tax

Kon Tum % (NRT)/ 50% (VAT)

Gia Lia % (NRT)/ 50% (VAT)

Provincial fund for forest protection

Annual provincial budget

- As a result of such scoping, eligible persons for compensation are only those losing their physical assets during dam construction.

- Others that would affect during post-construction and operational periods are not considered.

- These affected groups are also not included in information sharing.

- Need a thorough study of impacts and a continue monitoring on arisen impacts.

Impact areas of dam development recognize only the areas flooded and tend to exclude other anticipated and possible impacted areas.

Eligible

Other impacts (more floods, less fish, water shortage, poor water quality)

Area flooded = impact zone

NOT Eligible

?

Compensation package

Negative impact on ecosystem has not been adequately addressed in allocation of compensation.

- Scoping of environmental costs too is still debatable + often has no representing agent.

- Details ecosystem impacts are usually limited. - In the case studies – Yaly has ‘forestry tax’ and LS2 has

budget for ‘restoration of environmental impacts’ --Need clear plan on implementation and monitoring of the restoration works under the funds.

Agricultural land included in compensation package often has subsequent issues after allocation.

- Main principle is to provide equivalent size. Types and quality are often unknown.

- Let to disputes on unfair allocation/ changes in livelihoods due to unsuitable land.

Compensation package provided by the projects may not be responsive to the actual needs of the affected communities.

- Compensation package often provided uniformly across all groups whereas there are actually diversity in locations, ethnics, and genders.

- A careful analysis of different groups and their direct participation in the planning process would help enhancing efficiency in allocation of compensation.

ethnics

GenderUpstream-

Downstream

Selected Key Issues on Procedures

Primary discourse to legitimize hydropower projects is to stimulate national macro-economic development, benefiting the local project area and people are not the principal concern.

Key agencies responsible for hydropower development are from energysector and may overlook social and environmental aspects.

Water for domestic/irrigation

Min. of Agricultural & Rural Development

Water for hydropower

Min. of Industry & Trade

primary mandate to provide energy supply to industrymandate on livelihoods

?

generate electricity supplying growth

contributing to national economy

Local project area and people ???

Limited representation and meaningful participation of local communitiesin project development in general and in decision-makings on allocation ofcompensation in particular.- Questionable public participation / acceptability of EIA

- Resettled residents directly involved in certain procedures but not on decision (e.g. survey for lost assets but not on identification of prices, inform of prescribed relocation sites but not consulted on their preferred locations).

No follow-up mechanism to address concerns of resettled communities after compensation allocation process is done .

- The official reports of all cases stated that the resettled residents have accepted all compensation packages allocated.

- The study however found many concerns arisen after relocations BUT there is no mechanism for people to make claims.

More Issues ?

We need your opinions!

GROUP DISCUSSION Two small group discussions

Each group will:a) Validate and firm up the list of agenda issues (a matrix of initial list is provided),b) Select three key issues and brainstorm on appropriate approaches to address them, andc) Brainstorm on appropriate mechanisms to operationalize the approaches (i.e. lead

responsible agencies and budgeting resources )

Each team thereafter report back to the plenary to exchange opinions.

Immediate and ongoing impacts of

dam development and management

Long-term impacts of dam development and

management

No Agenda issues Validity /

Distributive equity issues1 Unfulfilled compensation terms based on people’s

understandings of promised compensation package2 Terms delivered but turned out to be defective or undesirable

(e.g. farm land with poor soil quality)(please add more items)

Procedural equity issues1 Lack of full disclosure of information relevant to planning during

construction and operation of dam projects2 Gender difference is not critically considered particularly in the

accounting and decision-making for compensation of affectedgroups(please add more items)

Matrix A: validation of key findings and agenda issues (a)

No Selected key agenda issues (a)

Approaches/ mechanisms to address the issues (b)

Operationalizedmechanisms (c)

1

23

Matrix B: appropriate approaches to address and operationalize key issues (b)/(c)