World Commission on Dams Final Report

DAMS ANDDEVELOPMENT

A NEW F R A MEWORK

THE REPORT OF THE WORLD COMMISSION ON DAMS

Earthscan Publications Ltd, London and Sterling, VA

FOR DECISION-M A KING

November 2000

First published in the UK and USA in 2000by Earthscan Publications Ltd

Copyright © World Commission on Dams, 2000

All rights reserved

A catalogue record for this book is available from the British Library

ISBN: 1-85383-798-9 paperback1-85383-797-0 hardback

Printed and bound in the UK by Thanet Press, Margate, KentPage design and layout by Page Arts, Cape TownCover design by Page Arts, Cape TownPhoto collages by Shane Smitsdorp, Cape Town

Cover photographs © Gallo Images. The Image Bank: Horowitz, Ross. I-Afrika: Miller, Eric.

Photo credits: Cape Argus: Schronen Johan, p226; Tromp, Dion, p66, 258; Yeld, John, p36. Cape PhotoLibrary: Proust, Alain, p36; Stoffel-Wialliame, p72. Cosmi Corporation: p16, 19, 22, 49, 72, 80, 96, 108,125, 134,157, 196, 250. I-Afrika: Bosch, Rodger, p14; Ingram Andrew, p96, 112; Miller, Eric, p2, 24, 96,98, 104, 111, 114, 117, 129, 142, 153, 196, 201, 220; Pettersson, Anders, p243. IUCN -The WorldConservation Union, p72, 85,87. Itaipú Binacional, p36, 68, 258. The Image Bank: Horowitz, Ross, p196,206; Sund, Harald, p134, 149. United States Bureau of Reclamation, p36. World Bank, p96,100. WorldWide Fund for Nature: Gunther, Michel, p72, 74,134,137; Harvey, Martin, p78. WWF-Canon; Burgler,Roel, p205, 212; Pratginestos, Juan, p72. Rautkari, Mauri; p145, Revesz, Tamás, p20, 210; Thorsell, JamesW, p212. Schafer, Kevin, p72, 92, 233; Torres, William H, p136.

Earthscan Publications Ltd120 Pentonville Road, London, N1 9JN, UKTel: +44 (0)20 7278 0433Fax: +44 (0)20 7278 1142Email: [email protected]://www.earthscan.co.uk

22883 Quicksilver Drive, Sterling, VA 20166-2012, USA

Earthscan is an editorially independent subsidiary of Kogan Page Ltd and publishes in association with WWF-UKand the International Institute for Environment and Development

This book is printed on elemental chlorine-free paper

i

Preface

The Report of the World Commission on Dams

Chair’s Preface

Globalisation From Below

If politics is the art of the possible,

this document is a work of art. It

redefines what is possible to all of us,

for all of us, at a time when water

pressure on governments has never

been more intense. Consider: on this

blue planet, less than 2.5% of our

water is fresh, less than 33% of fresh

water is fluid, less than 1.7% of fluid

water runs in streams. And we have

been stopping even these. We dammed

half our world’s rivers at unprecedent-

ed rates of one per hour, and at un-

precedented scales of over 45 000

dams more than four storeys high.Professor Kader AsmalChair, World Commission on Dams

Preface

Dams and Development: A New Framework for Decision-Makingii

As one who authorised the next stage of oneof the largest dams in the Southern Hemi-sphere I can argue that nations build largedams for sound reasons. Dams store, use anddivert water for consumption, irrigation,cooling, transportation, construction, mills,power and recreation. Dams remove waterfrom the Ganges, Amazon, Danube, Nile orColumbia to sustain cities on their banks.For parting – or imparting – the waters,dams are our oldest tool. Yet are they ouronly tool, or our best option?

The World Commission on Dams hasundertaken a rigorous, independent andinclusive global review, testing the waters tohelp you answer that question with authori-ty. But just as water scarcity drove previousconstruction of dams, competition for waterhas underscored the Commission’s work. Aswe seek water we face an escalating crisis,even of biblical proportions. In Ecclesiastes,recall the passage:

One generation passeth away,and another generation cometh:but the earth abideth always...All rivers runneth to the sea,yet the sea is not full...

The words are beautiful, haunting and,suddenly, anachronistic. For they are nottrue due to demands and dams during ourlives. Even degraded rivers seldom totallyrun, but loiter in a chain of reservoirs. Insome years our mightiest rivers – Africa’sNile, Asia’s Yellow, America’s Colorado,Australia’s Murray – do not reach the sea.

Compounding that shortage, one in fivepersons world-wide lacks access to safedrinking water. Half the world lacks sanita-tion; millions die from waterborne diseases.Farmers compete for water with boomingbut stressed cities. Towns drain aquifers thattook centuries to fill. Saltwater pollutesgroundwater miles from the sea. In China,Mexico and India water tables fall a metre ayear. In a few decades, as we seek a fifthmore water for 3 billion new people, one inthree of us may struggle to drink or bathe.

Some see in our scarcity a harbinger oftroubled waters to come. They believe waterscarcity inevitably locks peoples, regions andnations in a fierce, competitive struggle inwhich restless millions race to the bottom infear and self-interest. And thus, they main-tain, when rivers cross borders within orbetween nations, water scarcity leads towater stress which leads to water wars.

Our Commission, and through it, this FinalReport, contradicts that sentiment. We seewater as an instrument, a catalyst for peace,that brings us together, neither to builddams nor tear them down but to carefullydevelop resources for the long term.

Easier said than done? Not necessarily. Thehard part here may lie in what can be ‘said’with intellectual honesty, vision and under-standing. Surprisingly such a statement hasrarely been attempted. Unlike every otheraspect of our lives, large dams have longescaped deep and clear and impartialscrutiny into the process by which theyemerge and are valued. This lapse is espe-cially glaring when set against much smallerscale investments. We daily squeeze andweigh fruits and vegetables to ensure we geta fair return at the market. We rigorouslytest-drive and analyse the performance ofmotor cars before and after paying a fewthousand dollars for one. We conductthorough due-diligence before purchase ofeither house or business.

Yet this century we have collectivelybought, on average, one large dam per day,and there have been precious few, if any,comprehensive, independent analyses as towhy dams came about, how dams performover time, and whether we are getting a fairreturn from our $2 trillion investment.

Until now.

Pioneer efforts are bound to be controver-sial. And while the World Commission onDams is, by design, strictly advisory, makeno mistake. Our genesis, work process andimplications of this Final Report are by

iii

Preface


nature quite political. Our mandate involvesthe most precious element on earth, andthat, of course, involves power: who wieldsit, how to share it, which ways the state maybetter balance it.

Some may feel this Report makes water usedecisions even more difficult; by raising thebar higher, as we do, a government mustexercise more energy and creativity to reacha sustainable result. But in truth we makethose decisions easier; for we show clearlywhich, how, where and why decisions caneither work well or fail to deliver.

For that reason I assert that we are muchmore than a ‘Dams Commission’. We are aCommission to heal the deep and self-inflicted wounds torn open wherever andwhenever far too few determine for far toomany how best to develop or use water andenergy resources. That is often the nature ofpower, and the motivation of those whoquestion it. Most recently governments,industry and aid agencies have been chal-lenged around the world for deciding thedestiny of millions without including thepoor, or even popular majorities of countriesthey believe to be helping.

To confer legitimacy on such epochaldecisions, real development must be people-centred, while respecting the role of thestate as mediating, and often representing,their interests. In the following pages we donot endorse globalisation as led from aboveby a few men. We do endorse globalisationas led from below by all, a new approach toglobal water policy and development.

In this approach, we must deal with the pastbefore we can chart a course for the future.The integrity of our process determines theintegrity of this product, which raises a keypoint. I am proud to sign this work, and toguide this project, but the document youhold is not, as are some Commission Re-ports, authored by its chair.

It comes instead from many authors whowere originally separated by the cultural and

philosophical divides of the debate. That isits true strength. Indeed, the assumptionthat the number of people who write some-thing is inversely related to how much itsays only goes so far. Hundreds of eloquentbooks and publications inform the dams anddevelopment debate from one side or theother. Written by single authors, they saymuch but resolve little. The WCD FinalReport is meaningful, and will be remem-bered, not just for what it says, but for thefact that several hundred diverse men andwomen were directly involved in saying it. Itis sculpted by the expertise of members ofthe Commission, many of whom havedevoted their entire lives to engineering,environmental, social and institutionalconcerns of rivers and dams. All of us weresensitive to the needs of human develop-ment as we listened to the aspirations, thepain and the anguish of individual people.

Slow to speak, our Commission was quick tolisten. Both sides of the debate gave theirperspectives: from dam officials with anobligation to govern to dam affected peoplewith stories to tell. By airing facts wereached a rapprochement that began inGland, Switzerland and continued, non-stop, through hearings, consultations, casestudies, submissions and reviews coveringroughly one thousand large dams.

Through this process a shared understandingand truth began to emerge, and with it thethin thread with which to sew the stitchesof reconciliation. On this Commission, thefirst stitches came, perhaps, as a woman whorisks her life opposing a large dam threadsthe eye of the needle with an engineer whobuilt his career designing them. Or whenthe leader of one the world’s most powerfultechnology companies engaged with theleader of one of the world’s proud butdispossessed peoples. As Seattle, Toronto,Washington, London and Berlin cameunravelled by turbulent protests overglobalisation and development, we quietlycontinued to apply stitch after stitch to sewa stronger, more resilient and colourfultapestry.

Preface

Dams and Development: A New Framework for Decision-Makingiv

Our work is now over. With this document,yours has begun. I wish it could be as simpleor catchy as popular manuals that offersimplistic solutions for complex situations.We recognise all those arguments, andabsorb them. But we push beyond Declara-tions, which urge: ‘Recognise human rights’or ‘Sustain natural resources’.

Telling me, a harried public official whomust answer to 48 million restless, hungryand thirsty people, to ‘Ensure developmentis sustainable and humane’ is like warningme, ‘Operate, but don’t inflict new wounds’.I know that. What I don’t know is how todo it. To explain how to develop water inways that do not exhaust either my constitu-ents or the resources we all depend on, wemust go beyond platitudes. Our healingmust emerge not through anecdotes, butthrough a complex, coherent and cohesiveargument that shows clearly where we havebeen, what happened, why we’re in conflict,and how we can, with proper understanding,heal ourselves.

That involves first shedding misconcep-tions. Today’s demands are too complex, ourtechnology too advanced, our constituencytoo diverse, our options too numerous toallow just one solution. For example,imagine a typical dam.

Perhaps you see a smooth, parabolic, con-crete structure. It seems to generate cheapelectricity through turbines at its base.Engineers worship it, ecologists curse it,indigenous tribes lose their culture to it.Native fisheries plunge after construction,but floods decline as well. It pollutes neitherair nor water, provides water for nearbytowns, turns arid soils into rich farmland.People and animals were relocated, but theeconomic returns made doing so cost-effective.The dam embodies ambitions of statesmen,but when politicians approach with theirambitious plans, apprehensive peoples holdsigns that say ‘Save our beloved river’.

That image was my own. It was what Ienvisioned when I first took over the

Ministry of Water Affairs and Forestry underNelson Mandela. Five years of hands-onwork tempered that vision. Chairing thisCommission shattered it.

Instead of my archetype I saw: dams built ofdirt and dams generating no electricity;dams praised by ecologists and dams despisedby engineers; dams used for centuries byindigenous peoples, dams boosting fisheries,dams causing deadly floods; dams changingriver chemistry or increasing net greenhousegas emissions. I saw dam benefits by-passthirsty adjacent communities en route to thecity, dams exhaust and erode rich soilsthrough water logging and salinity. I sawdams displace no one, dams create wetlandsand work, dams cost thrice their budget,dams utterly abandoned and which had nosymbolic value. Then I saw politiciansapproach rivers with ambitious, bureaucraticschemes, opposed by local activists shouting,‘Save our beloved dam’.

No matter how much you know, or thinkyou know, about dams, you cannot read thefollowing report and keep your assumptionsintact. No matter how sceptical, you willcome away changed, I think, for the better.For the truth is no typical dams exist.

Yet the decisions that led to those damsshare a great deal. Clear patterns haveemerged, and all parties have met. We haveall reached agreement, established a healingprocess that we hope will work, and set thismanual before you. Read it carefully –though not in one sitting – with an eye towhere it may apply to your own specificneeds and agenda. It is rigorous, withoutbeing rigid; it sees the State as an instru-ment of development yet recognises thenecessity for popular participation; it isdispassionate and advisory in tone, butauthoritative in its practical application.

It is said that if we do not master technolo-gy, technology will master us. In the past,our unrestrained reliance upon large damtechnology weighed down upon us in all itsunexamined mystery. It stood, like solid,

v

Preface


Professor Kader Asmal,Chair, World Commission on Dams

divisive walls, between our left and rightbanks, between the upstream and downstreamreaches of our rivers. The Commission’s workis complete. And now, perhaps, technologycan instead be kept under our united anddemocratic control, owned by all of us. Inthat way we can meet the coming water

scarcity with confidence and assurance,knowing that water is not for fighting over.Water is for conserving. Water is for bath-ing. Water is for drinking. Water is forsharing. Water, through this report, can beour catalyst for peace.

I would like to express on behalf of the Commission our particularappreciation to the following individuals They have along withmany other friends, partners and contributors to the WCD process,played a vital role in enabling the Commision to fulfil its mandate.

Bruce Babbitt, Sadi Baron, Ger Bergkamp, Richard Bissell, RobertBos, Peter Bosshard, Rodney Bridle, John Briscoe, Ian Curtis,Shripad Dharmadhikary, Bert Diphoorn, Osmar Vieira de Filho,Luis Garcia, Raymundo José S. Garrido, Pham Hong Giang, LianeGreeff, George Green, Biksham Gujja, Geir Y. Hermansen, KaareHoeg, Ann Jennervik, Olav Kjorven, Jean-Etienne Klimpt, Man-fred Konukiewitz, M.L Chanaphun Kridakorn, Maritta Koch-Weser, Nicholas Lapham, Donal O’Leary, Patrick McCully, DavidMcDowell, Joseph Milewski, Reatile Mochebelele, Naoki Mori,Takehiro Nakamura, Peter van Niekerk, Raimundo Nonato do C.Silva, Tilak Ranaviraja, Frances Seymour, Aly Shady, JaswantSingh, Jan Strömblad, Even Sund, Sardar Mohammed Tariq, AllanTaylor, Martin Ter Woort, Himanshu Thakkar, Klaus Töpfer, DaoTrong Tu, Mike J. Tumbare, Mumtaz Türfan, Michael Wiehen, JamesWolfensohn, Mahmoud Abu Zeid, Tor Ziegler and Birgit Zimmerle.

Foreword

Dams and Development: A New Framework for Decision-Makingvi

vii

Foreword


Commissioners’Foreword

The World Commission on

Dams (WCD) was born out

of a small but significant IUCN-

World Bank sponsored workshop in

Gland, Switzerland in April 1997.

Representatives of diverse interests

came together to discuss the highly

controversial issues associated with

large dams. To the surprise of

participants, deep-seated differences

on the development benefits of large

dams did not prevent a consensus

emerging. That consensus included

the proposal for a World Commission

on Dams.

Foreword

Dams and Development: A New Framework for Decision-Makingviii

As Commissioners, we have been honouredto serve on The WCD for the past two and ahalf years. Representing all sides of thedebate, we have worked as an autonomousinternational team. Our task was to con-duct a rigorous, independent review of thedevelopment effectiveness of large dams, toassess alternatives and to propose practicalguidelines for future decision-making.

Since our work began in May 1998, we havemet on nine occasions. We have listened toone anothers’ different viewpoints in agenuine spirit of openness and desire to finda common understanding. All of us havefound it a learning process, an enriching ifsometimes uncomfortable one. This consen-sus document is the result of our work, but itwould be unfair to the process to suggestthat we have emerged completely of onemind. Individual differences still exist.However, we all agree on the fundamentalprinciples and values that underpin thisreport and on the guidelines we offer for theway forward. In the final drafting of ourreport we have included “A Comment” byone Commissioner who was unable toattend the final meeting. It presents thatCommissioner's additional views on thefindings and recommendations we havedeveloped as a group of Commissioners.

The WCD is delivering its product in arapidly changing international environ-ment. Debates proliferate about how toconserve the world’s precious resource basewhile meeting the needs of growing popula-tions hungry for economic progress. Termsof investment, terms of trade, democratisa-tion, the role of the state, the role of civilsociety, the obligation to protect threatenedecosystems and preserve Planet Earth forfuture generations: all are part of the widercontext. Any policy on large infrastructureprojects – whether for dams, highways,power stations, or other mega-installations –has to be developed in this context.

At the same time, alternative perspectiveson human rights and development are beingmore clearly expressed. The Right to Devel-

opment, adopted by the UN GeneralAssembly in 1986 argues that ‘developmentis a comprehensive process aimed at theconstant improvement of the well-being ofthe entire population…’. Recently, vocalcondemnation of the globalisation process,pointing out that too many people are beingleft behind those forging ahead, has addedsupport to this call for a better quality of lifefor all of humanity, not just for some. TheUnited Nations Development Programme’sHuman Development Report 2000 hasgiven us a timely reminder that the rights tosecurity and basic freedoms, and to humandevelopment are two sides of the same coinand that when ‘human rights and humandevelopment advance together, they rein-force one another.’

As an international Commission, ourprocess has been unique in taking on boarda range of interests and opinions previouslyheld to be irreconcilable. We have exam-ined evidence produced and opinionsexpressed by a wide range of stakeholders:government agencies, project affectedpeople and non-governmental organisations,people’s movements, the dam constructionindustry, the export credit agencies andprivate investors, and the internationaldevelopment community. Through thiswork programme the Commission has addeda new body of knowledge to existing data-bases and information on large dams, lookingat alternate ways of meeting irrigation, watersupply, energy, flood control requirements andprocesses of development planning.

How did we achieve this? First by creating a68 member Stakeholder Forum to act as asounding board and advisory group for theWCD. The Forum has allowed us to reachother partners in the debate and to soundout those whose support for this report isessential to its effective use.

Second, by drawing on the wider stakehold-er community for experts and analysts indeveloping the WCD Knowledge Base, andfor funds to support the Commission’s work.To date, 53 public, private and civil society

Prof Thayer ScudderCalifornia Instituteof Technology, USA

Dr Judy HendersonOxfam International,Australia

Mr Lakshmi Chand JainIndustrial DevelopmentServices,WCD Vice-Chair, India

Mr Göran LindahlABB Ltd, Sweden

Professor Kader AsmalMinister of Education,WCD Chair, South Africa

ix

Foreword


organisations have pledged funds to theWCD. This independent funding model isunique for international commissions.

Third, by undertaking a programme of fourRegional Consultations in different parts ofthe world that drew submissions from aneven wider network of interested parties.This provided a platform for all voices to beheard. Altogether, 1 400 individuals from 59countries and from every type of stakeholdergroup took part in these regional consulta-tions. The WCD also participated in twohearings on large dams organised for itsbenefit by NGOs in Southern Africa andEurope. During its two-year lifetime theCommission has received 947 submissionsfrom over 80 countries. We have listed all ofthem in a central database accessible via theInternet.

Fourth, by initiating eight independent in-depth Case Studies of specific large damprojects and two country studies (India andChina). Using a common methodology, thecase studies were conducted in a transparentand participatory manner drawing inputsfrom all stakeholders through an extensiveconsultation process. We have used thefindings from all these studies and submis-sions to inform a central product of theReport: the Global Review of Large Dams.

Fifth, by undertaking 17 Thematic Reviews,employing experts from a wide range ofdisciplinary backgrounds, nationalities andinstitutional bases. These reviews fall intofive thematic categories: Social Issues,Environmental Issues, Economic andFinancial Issues, Options Assessment andInstitutional Issues. Once again, we con-ducted these reviews in a participatorymanner, commissioning over 100 paperswith full peer review.

Lastly, by conducting a comprehensiveglobal survey of 125 dams, which we used to‘cross-check’, the findings of the individualstudies. The Cross-Check Survey hasprovided a basic set of data on trends tocomplement the knowledge base.

We are fully aware that this body of datacannot and should not be seen as the ‘finalverdict’ on the large dams story. The WCDhas examined around 1 000 dams withvarying degrees of intensity. This is a smallfraction of the more than 45 000 large damsworld-wide. There has been little systematiccollection of data about dam projects in thepast, and without baseline data we cannotarrive at definite conclusions about certaintypes of impacts. Albeit, the WCD report isthe first comprehensive global and inde-pendent review of the essential aspects ofthe performance of dams. In many cases theimpacts are still being played out, and willcontinue for many years to come. For thisreason it is important for the future manage-ment of dams to have continued and sys-tematic evaluation of their performance.

In carrying out our review we have not triedto judge individual dams. We have foundthat the unprecedented expansion in largedam building over the past century, harness-ing water for irrigation, domestic andindustrial consumption, electricity genera-tion and flood control has clearly benefitedmany people globally. Nonetheless, thispositive contribution of large dams todevelopment has been marred in many casesby significant environmental and socialimpacts which, when viewed from today’svalues, are unacceptable.

We have sought to glean the lessons fromthe past in order to make recommendationsfor the future through a prism of equitableand sustainable development. Developmentbased on five objectives: equity in resourceallocation and in the spread of benefits;sustainability in the use of the world’sdiminishing resource-base; openness andparticipation in decision-making processes;efficiency in the management of existinginfrastructural developments; and accountabil-ity towards present and future generations.

In today’s rapidly globalising world theWCD process has pioneered a new path forglobal public policy making on issues ofequitable and sustainable development. This

Ms Medha PatkarStruggle to Save theNarmada River, India

Ms Joji CariñoTebtebba Foundation,

Philippines

Prof José GoldembergUniversity of São

Paulo, Brazil

Mr Donald BlackmoreMurray-Darling Basin

Commission, Australia

Ms Deborah MooreEnvironmentalDefense, USA

Foreword

Dams and Development: A New Framework for Decision-Makingx

Report is the test against which that processwill be measured. We hope that the policyframework and practical guidelines for itsimplementation presented here will addsignificant value to existing norms and forma basis for best practice in water and energydevelopment. This is only a beginning, butwe hope it is a dynamic beginning thatothers can take forward in the future. Wealso hope that the lessons learnt from ouranalysis of large dams will be seen as rele-vant for other large infrastructural projects,and that the framework of policy develop-ment and implementation we have identi-fied will see wider application.

Mr Achim SteinerWCD Secretary-General,Germany

The life of the World Commission onDams ends with the publication of thisReport. For the Commissioners this hasbeen an exciting, challenging and enrich-ing process. It would not have beenpossible without the tireless commitmentof an extraordinary team of professionalsin the Secretariat. But more, we areindebted to hundreds of people around theworld who, mostly at their own expense,have given us the bounty of their knowl-edge, expertise and life’s experiencesthough discussion papers, submissions andpresentations adding light and life to thisreport on large dams.

Mr Jan VeltropHonorary President,ICOLD, USA

Mr Donald Blackmore

Ms Medha Patkar

Prof José Goldemberg

Ms Deborah Moore

Mr Jan Veltrop

Mr Achim Steiner

Professor Kader Asmal

Mr Lakshmi Chand Jain

Dr Judy Henderson

Mr Göran Lindahl

Prof Thayer Scudder

Ms Joji Cariño

xi

Table of Contents


Table of Contents

Chair’s Preface i

Commissioners’ Foreword vii

Table of Contents xi

List of Tables xiii

List of Figures xiii

List of Boxes xiv

Acronyms and Abbreviations xvii

Acknowledgements xix

Executive Summary xxvii

Chapter 1: Water, Development and Large Dams 1Water and Development 3Development and Large Dams 8Large Dams as Instruments of Development 11Problems Associated with Large Dams 15Understanding the Large Dams Debate 17Fulfilling the WCD Mandate – Process and Methodology 28

PART I: THE WCD GLOBAL REVIEW OF LARGE DAMS 35

Chapter 2: Technical, Financial and Economic Performance 37Structure and Methodology 38Construction Costs and Schedules 39Irrigation Dams 42Hydropower Dams 49Water Supply Dams 56Flood Control Dams 58Multi-Purpose Dams 62Physical Sustainability Issues 63Findings and Lessons 68

Table of Contents

Dams and Development: A New Framework for Decision-Makingxii

Chapter 3: Ecosystems and Large Dams: EnvironmentalPerformance 73Terresterial Ecosystems and Biodiversity 75Greenhouse Gas Emissions 75Downstream Aquatic Ecosystems and Biodiversity 77Floodplain Ecosystems 83Fisheries 84Ecosystem Enhancement 86Cumulative Impacts 88Anticipating and Responding to Ecosystem Impacts 89Findings and Lessons 92

Chapter 4: People and Large Dams: Social Performance 97Socio-Economic Impacts through the Project and Planning Cycle 99Displacement of People and Livelihoods 102Indigenous Peoples 110Downstream Livelihoods 112Gender 114Cultural Heritage 116Human Health 118Equity and the Distribution of Costs and Benefits 120Findings and Lessons 129

Chapter 5: Options for Water and Energy Resources 135DevelopmentAgriculture and Irrigation 137Energy and Electricity 148Water Supply 156Integrated Flood Management 160Findings and Lessons 163

Chapter 6: Decision-Making, Planning and Institutions 167Decision-Making and the Political Economy of Large Dams 169Role of Foreign Assistance 171Planning and Evaluation 175Compliance 185Findings and Lessons 190

PART II: THE WAY FORWARD 195

Chapter 7: Enhancing Human Development: Rights, Risksand Negotiated Outcomes 197From Global Review to Future Practise 198Sustainable Human Development – A Global Framework 199Trends and Challenges in Applying the New Development Framework 203Rights and Risks – an Improved Tool for Decision-Making 206Negotiated Agreements on the Basis of Rights and Risks 208Conclusion 210

xiii

Table of Contents


Chapter 8: Strategic Priorities – A New Policy Frameworkfor the Development of Water and Energy Resources 213Gaining Public Acceptance 215Comprehensive Options Assessment 221Addressing Existing Dams 225Sustaining Rivers and Livelihoods 234Recognising Entitlements and Sharing Benefits 240Ensuring Compliance 244Sharing Rivers for Peace, Development and Security 251

Chapter 9: Criteria and Guidelines – Applying theStrategic Priorities 259Five Key Decision Points: The WCD Criteria 262A Special Case: Dams in the Pipeline 276A Set of Guidelines for Good Practice 278

Chapter 10: Beyond the Commission- An Agendafor Change 309Strategic Entry Points for Follow-up 311Taking the Initiative – Institutional Responses 313Continuing the Dialogue 316A Call to Action 319

List of Tables1.1 Dams currently under construction 101.2 Estimated annual investment in dams in the 1990s 111.3 Population density of selected river basins 174.1 Illustration of the services and benefits generated by large dams in the WCD

Case Studies 1214.2 Profile of groups adversely affected by large dams: illustrations from WCD

Case Studies 1245.1 Complementary approaches to flood management 1616.1 WCD Case Studies: options assessment 1789.1 Valuation methods 289

List of Figures1.1 Annual fresh water withdrawals as a percentage of total resources withdrawn (1996) 61.2 Annual fresh water withdrawals per capita average (1987-95) 61.3 Distribution of the world’s water 71.4 Selected water-stressed countries 71.5 Regional distribution of large dams at the end of the 20th century 81.6 Construction of dams by decade (1900-2000) 91.7 Dams constructed over time by region (1900-2000) 91.8 Distribution of existing large dams by region and purpose 121.9 Agricultural land irrigated from dams 131.10 World map showing the regional location of the case studies, country studies,

cross-check survey dams, regional consultations, submissions and Forum members 31

Table of Contents

Dams and Development: A New Framework for Decision-Makingxiv

2.1 Cost overruns on large dams 392.2 Average cost overruns for large dams 402.3 Project schedule performance 422.4 Achievement of command area 432.5 Actual irrigated area compared to planned targets over time 432.6 Economic performance of multilateral-financed irrigation dams 472.7 Project averages for actual versus hydropower generation 502.8 Actual versus planned hydropower generation over time 512.9 WCD case study hydropower performance: capacity and power generation 522.10 Multilateral bank evaluation results on the economic performance for hydropower

dams 542.11 Project averages of actual versus planned bulk water supply delivery 572.12 Actual versus planned bulk water supply delivery over time 572.13 Trends in dam safety assessments 652.14 Loss of active storage due to sedimentation 652.15 Loss of active storage due to sedimentation by reach of river 652.16 Waterlogging and salinity 67

3.1 Gross greenhouse emissions from reservoirs 763.2 Greenhouse gas emissions from natural habitats 763.3 Modification of annual regimes due to a hydropower dam, Colorado River at

Lee’s Ferry, United States 793.4 Fluctuations of daily streamflow regime due to hydropower peaking operations,

Colorado River at Lee’s Ferry, September 793.5 Decline in species numbers but increase in fisheries productivity, Tucurui (a&b) 863.6 Fragmentation in 225 large river basins 873.7 Anticipated and unanticipated ecosystem impacts 89

5.1 Schematic of electricity options 150

6.1 Development assistance for large dams, 1950-1999 1716.2 Trends in provisions for participation and information disclosure 1766.3 Trends in the implementation of economic and financial analyses 1866.4 Trends in the implementation of environmental and social assessments 187

7.1 The WCD policy framework 2027.2 From rights and risks to negotiated agreements: a framework for options assessment

and project planning 208

9.1 WCD Criteria and Guidelines strengthen other decision support instruments 2609.2 Five key points in planning and project development 2639.3 Preference matrix for ranking options 285

List of Boxes1.1 New paradigm for water use 31.2 Types of large dams 111.3 Changing physical attributes and impacts of large dams 151.4 Central issues in the dams debate: past and present 21

2.1 Efficiency in the use of irrigation water 462.2 Economic and financial performance of the Columbia Basin Project 472.3 Cost recovery for the Aslantas dam 48

xv

Table of Contents


2.4 Optimising operations with the aid of a computerised decision-support system 532.5 Financial and economic performance of hydropower at Grand Coulee dam 552.6 Economic performance and cost recovery of hydropower at Tucurui dam 562.7 Flood protection in Japan 592.8 From flood control to flood management in the United States 612.9 Cost recovery in a multi-purpose scheme: Grand Coulee and the Columbia

Basin Project 622.10 Dam safety in the United States 64

3.1 Mitigating and compensating for terrestrial impacts 753.2 Greenhouse gas emissions at Tucurui, Brazil 773.3 How one dam has affected two different species in opposite ways 783.4 Minimising impacts of changes in streamflow regime: environmental flow

requirements 813.5 Mitigation measure: fish passes 823.6 Restoring ecosystem function through managed floods 843.7 Cumulative impact of dams: the Aral Sea 883.8 Ecosystem restoration through decommissioning in the United States 92

4.1 Bringing electricity to the favelas in São Paulo, Brazil 1014.2 Economic, socio-cultural and health impacts of livelihood displacement 1034.3 Missing numbers of affected people: Sardar Sarovar project, India, and Pak Mun dam,

Thailand 1044.4 Economic value of downstream floodplains, Hadejia-Nguru, Nigeria 1134.5 The Aswan High dam: a milestone in the history of archaeology 1174.6 Mercury and human health at Tucurui 1194.7 Royalties to communities: a Brazilian law for hydropower benefit-sharing 127

5.1 Conjunctive management of salinity 1395.2 Cultivation techniques can reduce irrigation water use 1415.3 A local approach to integrated water management, Rajasthan, India 1445.4 Rainwater harvesting for domestic and agricultural use in China 1445.5 Wetland and flood plain agriculture 1455.6 Rainwater harvesting is spreading to urban areas 1585.7 Flood resilience 162

6.1 WCD Case Studies: political decisions to build large dams 1706.2 WCD Case Studies and Submissions: foreign involvement in dam projects 1736.3 Nordic influence in the Pangani Falls Redevelopment Project, Tanzania 1746.4 Co-operation in shared river basins 1746.5 Even late participation leads to a consensus resettlement plan: Salto Caixas dam,

Brazil 1776.6 Public participation and project acceptance: three scenarios from Austria 1776.7 Environmental Impact Analysis (EIA): too little, too late 1836.8 Licensing processes and duration 1856.9 Allegations of corruption 1876.10 Export Credit Agencies: competing for business versus common standards 1896.11 WCD Case Studies: a compliance report card 190

7.1 Shared values and institutional practices – the UN Millenium Report 1997.2 Human rights and human development 2037.3 Voluntary risk takers and involuntary risk bearers 2077.4 Good governance and the UN Millenium Report 209

Table of Contents

Dams and Development: A New Framework for Decision-Makingxvi

9.1 Health impact assessment 2849.2 Cultural heritage impact assessment 2859.3 Ghazi-Barotha, Pakistan 2919.4 Design and cost of environmental flows - Pollan dam, Ireland 2959.5 Benefits of improving fish passes 2969.6 Financial assurances and the Environment Protection Agency, Victoria, Australia 3049.7 Suriname Central Nature Reserve 3059.8 Mendoza Province, Argentina 305

10.1 Priorities for strengthening the knowledge base 317

A Comment – Medha Patkar 321

ANNEXES 323I Bibliography 323II Glossary 344III WCD Work Programme – Approach and Methodology 349IV Reports in the WCD Knowledge Base 359V Dams, Water and Energy – A Statistical Profile 368VI United Nations Declarations 383VII Members of the World Commission on Dams 394VIII A Profile of the WCD Secretariat 397

INDEX 399

xix

Acknowledgements


Acknowledgements

The ForumComing from 68 institutions in 36 coun-tries, members of the Forum reflect thediverse range of interests in the damsdebate. The Forum acts as a ‘soundingboard’ for the work of the Commission, andhelps maintain two-way communicationwith the various far-flung constituencies.

Affected People’s GroupsCODESEN, Co-ordination for the SenegalRiver Basin, SenegalCOICA, Federación de Indigenas del EstadoBolívar, VenezuelaGrand Council of the Cree, CanadaMAB, Movimento dos Atingidos porBarragens, BrazilNBA, Narmada Bachao Andolan, IndiaSungi Development Foundation, PakistanCordillera People’s Alliance, Philippines

Bilateral Agencies/Export CreditGuarantee AgenciesBMZ, Federal Ministry for Economic Co-operation and Development, GermanyNORAD, Norwegian Agency forInternational Co-operation, NorwayJBIC, Japan Bank for International Co-operation, JapanSDC, Swiss Agency for Development and Co-operation, SwitzerlandSida, Swedish International DevelopmentAgency, SwedenU.S. Export/Import Bank, USA

Government AgenciesUnited States Bureau of Reclamation, USA

LHWP, Lesotho Highlands Water Project,LesothoMinistry of Water Resources, ChinaNational Water Commission, MexicoMinistry of Mahaweli Development, Sri LankaMinistry of Water Resources, India

International AssociationsICID, International Commission for Irrigationand DrainageICOLD, International Commission on LargeDamsIHA, International Hydropower AssociationIAIA, International Association for ImpactAssessments

Multilateral AgenciesADB, Asian Development BankAfDB, African Development BankFAO, United Nations Food and AgricultureOrganisationIADB, Inter-American Development BankUNDP, United Nations DevelopmentProgrammeUNEP, United Nations EnvironmentProgrammeWB, World Bank

Forum members can help to build ownershipof Commission work. The WCD is alsoconscious that reports in themselves havelittle impact if they are not firmly rooted ina process that enables all interest groups todevelop an understanding of and confidencein the process itself. Membership of theForum however does not imply endorsementof the Commission’s report and findings.

Acknowledgements

Dams and Development: A New Framework for Decision-Makingxx

Non-Governmental OrganisationsBerne Declaration, SwitzerlandENDA, Environmental Development Action,SenegalHelp the Volga River, RussiaIRN, International Rivers Network, USAITDG, Intermediate Technology DevelopmentGroup, United KingdomIUCN, The World Conservation Union,SwitzerlandSobrevivencia-Friends of the Earth, ParaguayWWF, World Wide Fund for Nature,SwitzerlandDAWN, Development Alternatives withWomen for a New Era, FijiTI, Transparency International, GermanyWEED, World Ecology, Environment andDevelopment, GermanySwedish Society for Nature Conservation,SwedenWetlands International, Japan

Private Sector FirmsEnron, USAHarza Engineering, USASiemens, GermanyABB, SwitzerlandSaman Engineering Consultants, South KoreaEngevix, Brazil

Research Institutes/Resource PersonsCentro EULA, Ciudad Universitaria, ChileTropica Environmental Consultants Ltd.,SenegalWRI, World Resources Institute, USAWater Research Institute, IsraelWinrock International, NepalFocus on the Global South, ThailandISPH, Institute of Hydroelectric Studies andDesign, RomaniaIWMI, International Water ManagementInstitute, Sri LankaWorldwatch Institute, USAWuppertal Institute, Germany

River Basin AuthoritiesConfederación Hydrográfica del Ebro, SpainMekong River Commission, CambodiaVolta River Authority, GhanaJordan Valley Authority, Jordan

UtilitiesEletrobras, BrazilHydro-Québec, CanadaNepal Electricity Authority, NepalMini Hydro Division, PhilippinesElectricité de France, France

Partnerships and Co-operation

InternationalAssociationfor Impact

Assessment

The WorldArchaeological

Congress

The Food andAgriculture

Organisation

TransparencyInternational

The UnitedNations

EnvironmentProgram

The EnvironmentalMonitoring Group

InternationalCommission on

Large Dams

The World HealthOrganisation

The InternationalEnergy Agency

The World Bank

International Institutefor SustainableDevelopment

xxi

Acknowledgements


Financial contributors

Financial support was received from 53contributors including governments, interna-tional agencies, the private sector, NGOs and

various foundations. According to themandate of the Commission, all fundingreceived by it was ‘untied’ – i.e. these fundswere provided with no conditions attachedto them.

Germany

Goldman EnvironmentalFoundation

Finland – Ministry ofForeign Affairs

South Africa –Ministry

of Water Affairsand Forestry

Ireland – Ministry ofForeign Affairs

People’s Republic ofChina – Ministry ofWater Resources

UK Department forInternationalDevelopment

Swedish InternationalDevelopment Agency

Japan – Ministry ofForeign Affairs

Netherlands –Ministry of Foreign

Affairs

Norway – Ministry ofForeign Affairs

C.S. MottFoundation

United NationsEnvironmentProgramme

Swiss Agency forDevelopment and

Cooperation

Inter-AmericanDeveloment Bank

Denmark – Ministryof Foreign Affairs

Asian DevelopmentBank

The World Bank

Acknowledgements

Dams and Development: A New Framework for Decision-Makingxxii

Grand Coulee Dam, ColumbiaRiver Basin, USATL: Leonard Ortolano, Katherine Kao CushingAA: Nicole T. Carter, Harza Engineering,William Green, Carl Gotsch, Kris May, TimNewton, Sophie Pierre, Josh Smienk, MichaelSoules, Marilyn Watkins GA: BC Hydro,Bonneville Power Administration, Bureau ofReclamation, Canadian First Nations, ColumbiaBasin Trust, Colville Trust, Spokane Tribe,United States Army Corps of Engineers

Tarbela Dam, Indus River Basin,PakistanTL: Amir Muhammed Khan AA: Altaf Abro,Shahid Ahmed, Pervaiz Amir, Afzal Haq,Mehmooda S. Jilani, Riaz Ahmed Khan, PeterJohn Meynell, Javed Saleem Qamar, RiazHussain Qureshi, Riaz Nazir Tarar GA: Ministryof Water and Power, Water and Power Develop-ment Authority, Members of the PakistanNetwork for Rivers, Dams and People, IUCN-Pakistan Office, World Bank-Pakistan Office

Aslantas Dam, Ceyhan RiverBasin, TurkeyTL: Refik Çölasan AA: O. Türker Altan,Okan Arihan, Çigdem Baykal, Ali Çaglar,Ahmet Eltekin, Nadir Izgin, Riza Kanber,Suhandan Karauz, Haluk Kasnakoglu, BirsenGökçe, Zuhal Güler, Mete Kaan Kaynar, SuhaSatana, Bora Sürmeli, Zeliha Ünaldi, ErdalSekeroglu, Tuluhan Yilmaz, Recep Yurtal GA:Department of State Hydraulic Works (Anka-ra, Adana and Karamamaras), GeneralDirectorate of Rural Services, Water UsersAssociations of Ceyhan Aslantas Project, DogalHayati Koruma Dernegi, Ministry of Environ-ment and Provincial Directorate of Health,Directorate of Agriculture, Forestry and Nation-al Parks, World Bank -Turkey Office

Kariba Dam, Zambezi River,Zambia/ZimbabweTL: Alois Hungwe AA: Julius Chileshe,Moses Chimbari, Dennis Chiwele, PaulmanChungu, Andrew Conybeare, Ezekiel Jonath-

an, Ronald Lwamba, Hillary Masundire,Dominic Mazvimavi, Ngonidzaishe Moyo,Herbert Mudenda, Fanuel Nangati, DanielNdlela, Elias Nyakunu, Norman Reynolds,John Santa Clara, Bennet Siamwiza, StevenTembo GA: David Z. Mazvidza, ChrisMagadza, Steve Rothert

Tucurui Dam, Tocantins River,BrazilTL: Emilio Lèbre La Rovere, FranciscoEduardo Mendes AA: Bertha Becker, Gilber-to Canali, Rosa Carmina Couto, Paulo Diniz,Iara Ferraz, Efrem Ferreira, José AlexandreFortes, Maria das Graças da Silva, MarciaIsmerio, Ana Lacorte, Renato Leme Lopes,Adriana Neves Luna, Sandra Macedo, RosaAcevedo Marin, Oscar de Moraes CordeiroNetto, Sylvia Helena Padilha, Lúcio FlávioPinto, Eneas Salati, Maria Nazareth da Silva,Wanderli Pedro Tadei GA: Electronorte,Agéncia Nacional de Energia Eléctrica,Centro Agroecologico de Assessoria yEducación Popular, Osmar Vieira Filho,Marcos V. Freitas, Raimundo Nonato do C.Silva, Sadi Baron, Henri Acselrad, PhilipFearnside, Birgit Zimmerle, Jean Remy D.Guimaraes

Pak Mun Dam, Mun-MekongRiver Basin, ThailandTA: Sakchai Amornsakchai, Philippe Annez,Sansanee Choowaew , Songkram Grachang-netara, Prasit Kunurat, Jaruwan Nippanon,Roel Schouten, Pradit Sripapatrprasite,Chayan Vaddhanaphuti, Chavalit Vidthay-anon, Suphat Vongvisessomjai, Ek Watana,Wanpen Wirojanagud GA: Ammar Siamwalla,Chainarong Sretthachau, Darayes Mehta,Kitcha Polparsi, M. L. Chanaphun Kridakorn,Michai Veravaidhya, Prudhisan Jumbala,Sansern Wongcha-um, Vatana Meevasana,Vipada Apinan, Zakir Hussain

Glomma and Laagen Basin,NorwayTL: Jostein Skurdal AA: Øystein Aas, TorArnesen, Per Christian Bøe, Åge Brabrand,

WCD Case Studies – Team Leaders, Team of Authors,Additional Authors and General Acknowledgements

S

SS

xxiii

Acknowledgements


Jon Arne Eie, Bjørn P. Kaltenborn, Svein ErikHagen, Karine Hertzberg, TrygveHesthagen, Arne Linløkken, Dan Lundquist,Pål Mellquist, Asbjørn Molle, TorbjørnØstdahl, Trond Taugbøl, Jens KristianTingvold GA: Arne Erlandsen ØyvindFjeldseth, Geir Y. Hermansen, Thrond BergeLarsen, Kurt Ole Linn, Pål Mellquist

Orange River Pilot StudyTL: WCD Secretariat AA: AzgharAdelzadeh, Andrew Ainslie, Geoff Antrobus,Nicola Bergh, Bryan Davies, Chris de Wet,Tony Emmett, Muzi Muziya, Kyra Naudascher-Jankowski, Barry Nkomo, Maartin van VeelenGA: Thinus Basson, Fannie du Plessis,Mirriam Kibi, Mike Meuller, GeraldineSchoeman, Staff of Surplus Peoples’ Projectin Cape Town, Peter van Niekerk, Theo vanRobbroek

Country Study: IndiaTA: Pranab Banerji, Ramaswamy R. Iyer, R.Rangachari, Nirmal Sengupta, Shekhar SinghGA: Som Pal, Z. Hasan, Raj Rajagopal, A. D.Mohile, A. S. Desai, B. G. Verghese, K. R.Datye, M. C. Gupta, M. Gopalakrishnan, N.C. Saxena, Pradeep K. Deb, Sunderlal Bahu-guna, P. S. Raghavan

Country Study: ChinaTA: John Boyle, Richard Fuggle, HabibKhoury, Ismail Najjar, Sam Pillai, Bill Smith

Briefing Paper on Russia andNIS countriesTA: Elena A. Barabanova, Nikolai I. Ko-ronkevich, Law and Environment EurasiaPartnership (Central Asia), Lilia K. Malik,Vladimir Smakhtin, Irina S. Zaitseva

Thematic Reviews - Lead Writers and Contributing Writers

I.1 Social impact of large dams: equity anddistributional issues: LW: WilliamAdams CW: Adrian Adams; HughBrody; Dominique Egre; Carmen Ferra-das; Pablo Gutman; Lyla Mehta; JosephMilewski; Bina Srinivasan; Lubiao Zhang

I.2 Dams, indigenous people and vulnera-ble ethnic minorities: LW: MarcusColchester CW: Jaqueline Carino;Jaroslave Colajacomo; Andrew Corbett;Gabungan; Luke Hertlein; ManishaMarwaha; Lyla Mehta; Amrita Patward-han; Ande Somby; Maria Stankovitch

I.3 Displacement, resettlement, rehabilita-tion, reparation and development:LW: Leopoldo Bartolome; Chris de Wet;Harsh Mander; Vijay Nagaraj CW:Christine Danklmaier; Ravi Hemadri;Jun Jing; Scott Robinson

II.1 Dams, ecosystem functions and envi-ronmental restoration: LW: MikeAcreman; Ger Bergkamp; Patrick Dugan;Jeff McNeely CW: Asheline Appleton;Edward Barbier; Garry Bernacsek;Martin Birley; John Bizer; Cate Brown;Kenneth Campbell; John Craig; NickDavidson; Simon Delany; CharlesDiLeva; Frank Farquharson; NicholasHodgson; Donald Jackson; Jackie King;

Michel Larinier; Jeremy Lazenby; GerdMarmulla; Don McAllister; MathewMcCartney; Steve Miranda; JohnMorton; Dianne Murray; Mary Seddon;Leonard Sklar; David Smith; CarolineSullivan; Rebecca Tharme

II.2 Dams and global change:LW: Nigel Arnell; Mike Hulme; LuizPinguelli Rosa; Marco Aurelio dosSantos CW: Albert Mumma

III.1 Economic, financial and distributionalanalysis: LW: Alec Penman; MichelleManion; Bruce McKenney; RobertUnsworth CW: Colin Green; PabloGutman; Anneli Lagman; Anil Mar-kandya; David Mullins; Kyra Nau-dascher-Jankowski; Douglas Southgate

III.2 International trends in project financing:LW: Per Ljung CW: Lily Donge; ChrisHead; Michael Kelly; Hilary Sunman

IV.1 Electricity supply and demand manage-ment options: LW: Maritess Cabrera;Anton Eberhard; Michael Lazarus;Thierry Lefevre; Donal O’Leary; ChellaRajan CW: Glynn Morris; Roger Peters;Bjorn Svenson; Rona Wilkinson

IV.2 Irrigation options: LW: K. Sanmuga-nathan CW: Pablo Anguita Salas;S. Char; Keith Frausto; Alfred Heuper-

Acknowledgements

Dams and Development: A New Framework for Decision-Makingxxiv

man; Khalid Hussain; ICRISAT; HectorMaletta; Dieter Prinz; Yehuda Shevah;Anupam Singh; Laurence Smith;Himanshu Thakkar

IV.3 Water supply options: LW: Colin Fenn;David Sutherland CW: Mary Dickinson;John Gould; Allan Lambert; Jon Lane;Guy Preston; Philip Turner

IV.4 Flood control and management options:LW: Colin Green CW: Luis Berga;Patrick Hawker; Minoru Kuriki; DennisParker; Sylvia Tunstall; Johannes vanDuivendijk; Herb Wiebe

IV.5 Operation, monitoring and decommis-sioning of dams: LW: Peder Hjorth;Charles Howard; Kuniyoshi TakeuchiCW: K. Betts; Michael Falter; EnriqueGarcia; Peter Goodwin; Brian Haisman;Joji Harada; V. Jauhari; Thomas Russo;Geoffrey Simms; James Westcoat;Rodney White

V.1 Planning approaches: LW: DavidNichols; Theo Stewart; David vonHippel CW: Daud Beg; CatherineFedorsky; Matthias Finger;J. Karmacharya; Miguel Nucete; DonMoore; Girish Sant

V.2 Environmental and social assessmentfor large dams: LW: Barry SadlerCW: Frank Vanclay; Iara Verocai

V.3 River basins - institutional frameworksand management options: LW: PeterMillington CW: Len Abrams; EnriqueCastelan Crespo; Fiona Curtin; LuisGarcia; Raymundo Garrido; RamaswamyIyer; Erik Mostert; Cecilia Tortajada;Anthony Turton; Aaron Wolf

V.4 Regulation, compliance and implemen-tation: LW: Angela Cropper; MarkHalle; John Scanlon CW: DanielBradlow; Gabriel Eckstein; BalakrishnanRajagopal; Tom Rotherham; Lori Udall;Michael Wiehen

V.5 Participation, negotiation, and conflictmanagement: LW: Bruce StedmanCW: Tisha Greyling; Anne Randmer;Vanchai Vatanasapt; Arch Isabel Viana

Working Papers – WritersDams and Human Health: Martin Birley,Robert Bos, M’barack Diop, William Jobin,P UnnikrishnanDams and Cultural Heritage Management:Steven Brandt, Fekri Hassan

Contributors to the WCD Cross-Check Survey

Keizrul Abdullah, M.A. Abrougui, RochaAfonso, K. Akapelwa, Antonio Altadill, S.CAnand, Mike Anane, Valdemar Andrade, CarloAngelucci, Cindy Armstrong, AlexanderAsarin, Leo Atakpu, Paul Aylward, Riad Baouab,GR Basson, Mona Bechai, Edigson PerezBedoya, Hans Helmut Bernhart, Carlos Bertag-no, Isaac Bondet, Peter Bosshard, RodneyBridle, Adelino Estevo Bucuane, Brian Davies,Cheickna Seydi A. Diawara, Shripad Dhama-dhikary, Foto Dhima, Bob Douthwaite, TimDunne, Gary Ellis, Richmond Evans-Appiah,Daryl Fields, Renzo Franzin, Alejandro Garcia,Alfonso García, Luis Garcia, Refik Ghalleb,Ben Marcus Gillespie, Handan Giray, M.Gopalakrishnan, Liane Greef, Francis Grey,Jose Ramon Guifarro, Ronald ValverdeGuillen, Brian Haisman, Phil Hirsch, Ku Hsu,Dan Hulea, Alois Hungwe, K.L. Karmachar-ya, Shaheen Rafi Khan, David Kleiner, ElenaKolpakova, Michael Kube, Minoru Kuriki,Hee Seung Lee, Knut Leitner, Melissa Loei,

William Loker, Eleyterio Luz, Anil Mar-kandya, Isidro Lázaro Martín, AboubacryMbodji, Patrick McCully, Brad McLane,Roland Mejias, Chantho Milattanapheng,Joseph Milewski, José Díaz Mora, AmirMuhammed, Jorge Carreola Nava, EdenNapitupulu, Humphrey Ole Ncharo, LuzNereida, Nguyen Anh Minh, Ali Noorzad,Magdelena Nunez de Cordero, David Okali,Elizabeth Olsen, Torbjørn Østdahl, F.COweyegha-Afunaduula, Thomas Panella,Richard L. Pflueger, Hermien Pieterse, JulioPineda, Jose Polanco, Ambriosio Ramos,Silvia Maria Ramos, Bernard Reverchon,Johan Rossouw, Paul Royet, Joseph Rückl,David Scivier, Jose Roberto Serrano, ThomasSiepelmeyer, Kua Kia Soong, Bjorn Svenson,Gustavo Tamayo, Himanshu Thakkar, SureshKumar Thapa, Dao Trong Tu, Jan Tosnar,Jaroslav Ungerman, Martin van Veelen, H.A.Wickramaratna, Brayton Willis, Ralph Witte-bolle, Chusak Wittayapak, Patricia Wouters

xxv

Acknowledgements


Presenters at the WCD’s Regional Consultations

South AsiaK B Chand, Giasuddin Ahmed Choudhury, K RDatye, Shripadh Dharmadhikary, Aly Ercelawn,Drona Ghimire, Ramaswamy Iyer, S Karu-naratne, A R Karunawathie, Shaheen RafiKhan, Tauhidul Anwar Khan, Ashish Kothari,Lakshman Mediwake, Alistair McKechnie,D K Mishra, Iswer Raj Onta, M G Padhye,Bikash Pandey, Tilak Ranaviraja, M S Reddy,Saleem Samad, Girish Sant, S Selvarajah, P CSenaratne, Sardar Muhammad Tariq, HimanshuThakkar, B G Verghese, D C Wijeratna,Hemantha Withenage

Latin AmericaAziz Ab’ Saber, Carlos Avogadro, Ismael AguilarBarajas, Sadi Baron, Celio Bermann, RicardoCanese, Jorge Cappato, José Porfirio Fontanellede Carvalho, Margarita Rosa de Castro Illera,Carlos Chen, Ivan Correa, Jorge Oscar Daneri,Luis Alberto Machado Fortunato, Cassio Viotti,Afonso Henriques Moreira Santos, MarcosAurelio de Freitas, Philip Fearnside, FabioFeldmann, Altino Ventura Filho, HectorHuertas, M. Kudlavicz, Jaime Millan, JoséRodrigues, Humberto Marengo, Euclides PereiraMacuxi, Miguel Nucete, Cristian Opaso,Bonarge Pacheco, Elias Diaz Pena, Alan Poole,Grethel Aguilar Rojas, Teodoro Sanchez,Salomon Nahmad Sitton, Carlos Vainer

Africa and the Middle EastAdrian Adams, Tareq A. Ahmed, CansenAkkaya, Leo Atakpu, Mohamed Lemine Ould

Baba, H. El Badraoui, Mohammed N. Bayoumi,Kamau Bobotti, Geoffrey Chavula, MarwaDaoudy, Seydi Ahmed Diawara, Salif Diop,Stephanie Duvail, R. Evans-Appiah, ArifGamal, Alioune Gassama, Munther J. Hadda-din, Olivier Hamerlynk, Mohammed Jellali,E.A.K. Kalitsi, Elisabeth Khaka, Jacqueline Ki-Zerbo, O.M. Letsela, Claire Limbwambwa, BazakZakeyo Lungu, Bhekani Maphalala, ReatileMochebelele, Anna Moepi, Frank Muramuzi,Martin Musumba, Mohammed Nabil, TakehiroNakamura, Karim S Numayr, Hassan M. A.Osman, F.C. Oweyegha-Afunaduula, LevinÖzgen, Guy Preston, Karen Ross, MahammadouSacko, Motseao Senyane, Noxolo Olive Sephu-ma, A. Shalaby , David Smith, Robyn Stein,David Syantami Syankusule

East and South East AsiaKeizrul Abdullah, Reiko Amano, Le Quy An,Vu Hong Anh, Vipada Apinan, MichaelBristol, Le Thac Can, Harvey Demaine, HansFreiderich, Arnaldo Tapao Gapuz, ShalmaliGuttal, Nguyen Dinh Hoa, Pham Thi MongHoa, Susannah Hopkins Leisher, HiroshiHori, Michael Horowitz, Tran Minh Huan,Tomoo Inoue, Sung Kim, Joern Kristensen,See-Jae Lee, Nguyen Duc Lien, Arthur H.Mitchell, Masaru Nishida, Alastair M. North,Do Hong Phan, Grainne Ryder, ShyamaShepard, Kua Kia Soong, ChainarongSretthachau, Dao Trong Tu, A RusfandiUsman, Mikhail Wakil, Wayne C. White,Lubiao Zhang

xvii

Table of Contents


ADB Asian Development BankAfDB African Development BankCBA cost-benefit analysisCHIA cultural heritage impact assessmentCHP combined heat and powerDRD Declaration on the Right to

DevelopmentDSM demand-side managementDSS decision support systemEA environmental assessmentECA export credit agencyEFA environmental flow assessmentEFR environmental flow requirementEIA environmental impact assessmentEIRR economic internal rate of returnEPA Environmental Protection AgencyFIRR financial internal rate of returnFSC Forestry Stewardship CouncilGATT General Agreement on Tariffs and

TradeGDP gross domestic productGHG greenhouse gas/esHIA health impact assessmentHLC high level committeeIA impact assessmentIADB Inter-American Development

BankICID International Commission on

Irrigation and DrainageICJ International Court of JusticeICOLD International Commission on

Large DamsIEA International Energy AgencyIFC International Finance

CorporationIFI international finance institutionsIHA International Hydropower

Association

ILO International LabourOrganization

IRN International Rivers NetworkIRP independent review panelsISO International Organization for

StandardizationIUCN World Conservation UnionLCA life cycle assessmentMCA multi-criteria analysisMIGA multilateral investment guarantee

agencyMRDAP mitigation, resettlement and

development action planMW megawattsNGO non-governmental organisationNORAD Norwegian Agency for

International Co-operationO&M operation and maintenanceOECD Organisation for Economic

Co-operation and DevelopmentOED Operations Evaluation Division

(of the World Bank)PCB polychlorinated biphenylsPIC prior and informed consentPV photovoltaicR&D research and developmentSA strategic impact assessmentSIA social impact assessmentSIDA Swedish International

Development AgencySRI socially responsible investingUNDP United Nations Development

ProgrammeUSAID US Agency for International

DevelopmentWCD World Commission on DamsWRI World Resources Institute

Acronyms andAbbreviations

xxvii

Executive Summary


ExecutiveSummary

The global debate about large

dams is at once

overwhelmingly complex and

fundamentally simple. It is complex

because the issues are not confined to

the design, construction and operation

of dams themselves but embrace the

range of social, environmental and

political choices on which the human

aspiration to development and

improved well-being depend. Dams

fundamentally alter rivers and the use

of a natural resource, frequently

entailing a reallocation of benefits from

local riparian users to new groups of

beneficiaries at a regional or national

Executive Summary

Dams and Development: A New Framework for Decision-Makingxxviii

level. At the heart of the dams debate areissues of equity, governance, justice andpower – issues that underlie the manyintractable problems faced by humanity.

The dams debate is simple because behindthe array of facts and figures, of economicstatistics and engineering calculations, lie anumber of basic and easily understoodprinciples. If adhered to and routinelyapplied, these principles would not only go along way towards responding to the contro-versy surrounding dams, but would markedlyimprove decision-making on water andenergy resources, achieving better outcomes.In identifying these principles, the WorldCommission on Dams (WCD) has not hadto look far; they are the same principles thatemerge from the global commitments tohuman rights, development and sustainability.

Our report tells a multifaceted story. But wedraw from it some straightforward andpractical advice to guide future decisions onwater and energy resources development.The report sets out to distil more than twoyears of intense study, dialogue and reflec-tion by the Commission, the WCD Secre-tariat, the WCD Stakeholders’ Forum andliterally hundreds of individual experts andaffected people on every aspect of the damsdebate. It contains all the significant find-ings that result from this work and expresseseverything that the Commission believes isimportant to communicate to governments,the private sector, civil society actors andaffected peoples – in short, to the entirespectrum of participants in the dams debate.

The evidence we present is compelling. Wefeel confident that the material collectedand analysed by the Commission providesoverwhelming support for the main messag-es in the report.

We believe there can no longer be anyjustifiable doubt about the following:■ Dams have made an important and

significant contribution to humandevelopment, and the benefits derivedfrom them have been considerable.

■ In too many cases an unacceptable andoften unnecessary price has been paid tosecure those benefits, especially in socialand environmental terms, by peopledisplaced, by communities downstream, bytaxpayers and by the natural environment.

■ Lack of equity in the distribution ofbenefits has called into question thevalue of many dams in meeting waterand energy development needs whencompared with the alternatives.

■ By bringing to the table all those whoserights are involved and who bear therisks associated with different options forwater and energy resources development,the conditions for a positive resolution ofcompeting interests and conflicts arecreated.

■ Negotiating outcomes will greatlyimprove the development effectivenessof water and energy projects by eliminat-ing unfavourable projects at an earlystage, and by offering as a choice onlythose options that key stakeholders agreerepresent the best ones to meet the needsin question.

The direction we must take is clear. It is tobreak through the traditional boundaries ofthinking and look at these issues from adifferent perspective. Our recommendationsdevelop a rationale and framework thatresponds to this critical need and offersscope for progress that no single perspectivecan offer on its own. It will ensure thatdecision-making on water and energydevelopment:■ reflects a comprehensive approach to

integrating social, environmental andeconomic dimensions of development;

■ creates greater levels of transparency andcertainty for all involved; and

■ increases levels of confidence in the abilityof nations and communities to meet theirfuture water and energy needs.

There are no shortcuts to equitable andsustainable development. The evidence ofsuccess and failure we present in this reportprovides the best rationale why the ‘business

xxix

Executive Summary


as usual’ scenario is neither a feasible nor adesirable option.

Water and Development –The Changing Context

The key decisions are not about dams assuch, but about options for water and energydevelopment. They relate directly to one ofthe greatest challenges facing the world inthis new century – the need to rethink themanagement of freshwater resources. Anumber of global initiatives and reportshave documented the dramatic impact ofhuman-induced water withdrawals from theworld’s lakes, rivers and ground aquifers.Total annual freshwater withdrawals todayare estimated at 3 800 cubic kilometres –twice as much as just 50 years ago.

The unfolding scenario for water use inmany parts of the world is one of increasingconcern about access, equity and the re-sponse to growing needs. This affectsrelations:■ within and between nations;■ between rural and urban populations;■ between upstream and downstream

interests;■ between agricultural, industrial and

domestic sectors; and■ between human needs and the require-

ments of a healthy environment.

The challenge is not to mobilise so as tocompete successfully, but to co-operate inreconciling competing needs. It is to findways of sharing water resources equitablyand sustainably – ways that meet the needsof all people as well as those of the environ-ment and economic development. Theseneeds are all intertwined, and our challengeis to resolve competing interests collectively.Achieving equitable and sustainable solu-tions will be to the ultimate benefit of all.

The imperative to supply growing popula-tions and economies with water in a contextof depleting groundwater resources, declin-

ing water quality and increasingly severelimits to surface water extraction hasbrought sustainable water resources manage-ment to the top of the global developmentagenda. Although increasing competitionfor water suggests an expanding scope forconflict, it also provides an incentive fornew forms of co-operation and innovation.Dire scenarios for water demand must notovershadow the fact that development pathsthat meet and manage the demand exist andare available for us to choose. Historydemonstrates that the path of co-operationhas more often been followed than the pathof conflict. The same must be true for ourfuture.

During the 20th century, large dams emergedas one of the most significant and visibletools for the management of water resources.The more than 45 000 large dams aroundthe world have played an important role inhelping communities and economies harnesswater resources for food production, energygeneration, flood control and domestic use.Current estimates suggest that some 30–40% of irrigated land worldwide now relieson dams and that dams generate 19% ofworld electricity.

From the 1930s to the 1970s, the construc-tion of large dams became – in the eyes ofmany –synonymous with development andeconomic progress. Viewed as symbols ofmodernisation and humanity’s ability toharness nature, dam construction accelerat-ed dramatically. This trend peaked in the1970s, when on average two or three largedams were commissioned each day some-where in the world.

While the immediate benefits were widelybelieved sufficient to justify the enormousinvestments made – total investment inlarge dams worldwide is estimated at morethan $2 trillion – secondary and tertiarybenefits were also often cited. These includ-ed food security considerations, localemployment and skills development, ruralelectrification and the expansion of physicaland social infrastructure such as roads and

Executive Summary

Dams and Development: A New Framework for Decision-Makingxxx

schools. The benefits were regarded as self-evident, while the construction and opera-tional costs tended to be limited to econom-ic and financial considerations that justifieddams as a highly competitive option.

As experience accumulated and betterinformation on the performance and conse-quences of dams became available, the fullcost of large dams began to emerge as aserious public concern. Driven by informa-tion on the impacts of dams on people, riverbasins and ecosystems, as well as theireconomic performance, opposition began togrow. Debate and controversy initiallyfocused on specific dams and their localimpacts. Gradually these locally drivenconflicts evolved into a global debate aboutthe costs and benefits of dams. Globalestimates of the magnitude of impactsinclude some 40-80 million people displacedby dams while 60% of the world’s rivershave been affected by dams and diversions.The nature and magnitude of the impacts ofdams on affected communities and on theenvironment have now become establishedas key issues in the debate.

The World Commission on Dams was bornfrom this debate. Established in February1998 through an unprecedented process ofdialogue and negotiation involving repre-sentatives of the public, private and civilsociety sectors, it began work in May of thatyear under the Chairmanship of ProfessorKader Asmal, then South Africa’s Ministerof Water Affairs and Forestry and later theMinister of Education. The Commission’s 12members were chosen to reflect regionaldiversity, expertise and stakeholder perspec-tives. The WCD was created as an inde-pendent body, with each member serving inan individual capacity and none represent-ing an institution or a country.

The Commission’s two objectives were:■ to review the development effectiveness of

large dams and assess alternatives for waterresources and energy development; and

■ to develop internationally acceptablecriteria, guidelines and standards, where

appropriate, for the planning, design,appraisal, construction, operation, moni-toring and decommissioning of dams.

The decision to proceed with a large dam,the way the decision was made, the opinionsand perspectives that were heard are at theheart of the current debate about dams. Thissame question of choice – of decision-making – also lay at the heart of the Com-mission’s work. Our report is about improv-ing the way such decisions are made.

The WCD Global Review ofLarge DamsA large part of the Commission’s workinvolved a broad and independent review ofthe experience with large dams. The result-ing WCD Knowledge Base includes eightdetailed case studies of large dams, countryreviews for India and China, a briefing paperfor Russia and the Newly IndependentStates, a Cross-Check Survey of 125 exist-ing dams, 17 Thematic Review papers, aswell as the results of public consultationsand more than 900 submissions madeavailable to the Commission. This providedthe basis for the assessment of the technical,financial, economic, environmental andsocial performance of large dams, and thereview of their alternatives. The reviewunderlined the critical issues relating togovernance and compliance that have cometo be associated with large dams.

The evaluation was based on the targets setfor large dams by their proponents – thecriteria that provided the basis for govern-ment approval. In reviewing this experiencethe Commission has studied a broad spec-trum of dams. Its analysis gave particularattention to understanding the reasons why,how and where dams did not achieve theirintended outcome or indeed producedunanticipated outcomes that explain theissues underlying the dams debate. Present-ing this analysis does not overlook thesubstantial benefits derived from dams butrather raises the question of why some damsachieve their goals while others fail.

xxxi

Executive Summary


Performance of large dams

The knowledge base indicates that shortfallsin technical, financial and economicperformance have occurred and are com-pounded by significant social and environ-mental impacts, the costs of which are oftendisproportionately borne by poor people,indigenous peoples and other vulnerablegroups. Given the large capital investmentin large dams, the Commission was dis-turbed to find that substantive evaluationsof completed projects are few in number,narrow in scope, poorly integrated acrossimpact categories and scales, and inade-quately linked to decisions on operations.

In assessing the large dams reviewed by theCommission we found that:■ Large dams display a high degree of

variability in delivering predicted waterand electricity services – and relatedsocial benefits – with a considerableportion falling short of physical andeconomic targets, while others continuegenerating benefits after 30 to 40 years.

■ Large dams have demonstrated a markedtendency towards schedule delays andsignificant cost overruns.

■ Large dams designed to deliver irrigationservices have typically fallen short ofphysical targets, did not recover theircosts and have been less profitable ineconomic terms than expected.

■ Large hydropower dams tend to performcloser to, but still below, targets forpower generation, generally meet theirfinancial targets but demonstrate varia-ble economic performance relative totargets, with a number of notable under-and over-performers.

■ Large dams generally have a range ofextensive impacts on rivers, watershedsand aquatic ecosystems – these impactsare more negative than positive and, inmany cases, have led to irreversible lossof species and ecosystems.

■ Efforts to date to counter the ecosystemimpacts of large dams have met withlimited success owing to the lack ofattention to anticipating and avoiding

impacts, the poor quality and uncertaintyof predictions, the difficulty of copingwith all impacts, and the only partialimplementation and success of mitiga-tion measures.

■ Pervasive and systematic failure to assessthe range of potential negative impactsand implement adequate mitigation,resettlement and development pro-grammes for the displaced, and thefailure to account for the consequencesof large dams for downstream livelihoodshave led to the impoverishment andsuffering of millions, giving rise togrowing opposition to dams by affectedcommunities worldwide.

■ Since the environmental and social costsof large dams have been poorly account-ed for in economic terms, the trueprofitability of these schemes remainselusive.

Perhaps of most significance is the fact thatsocial groups bearing the social and environ-mental costs and risks of large dams, espe-cially the poor, vulnerable and futuregenerations, are often not the same groupsthat receive the water and electricityservices, nor the social and economicbenefits from these. Applying a ‘balance-sheet’ approach to assess the costs andbenefits of large dams, where large inequitiesexist in the distribution of these costs andbenefits, is seen as unacceptable givenexisting commitments to human rights andsustainable development.

Options for water andelectricity services

Today, a wide range of options for deliveringwater and electricity services exists, al-though in particular situations the cost andfeasibility of these options will vary in theface of constraints such as natural resourceendowments and site location. The Com-mission found that:■ Many of the non-dam options available

today – including demand-side manage-ment, supply efficiency and new supplyoptions – can improve or expand water

Executive Summary

Dams and Development: A New Framework for Decision-Makingxxxii

and energy services and meet evolvingdevelopment needs in all segments ofsociety.

■ There is considerable scope for improv-ing performance of both dam projectsand other options.

■ Demand management, reducing con-sumption, recycling and supply and end-use efficiency measures all have signifi-cant potential to reduce pressure onwater resources in all countries andregions of the world.

■ A number of supply-side options at allscales (ranging from small, distributedgeneration sources or localised watercollection and water-recovery systems toregional-interconnection of power grids)have emerged that – on their own orcollectively – can improve or expand thedelivery of water and energy services in atimely, cost-effective and publiclyacceptable manner.

■ Decentralised, small-scale options (microhydro, home-scale solar electric systems,wind and biomass systems) based onlocal renewable sources offer an impor-tant near-term, and possibly long-term,potential particularly in rural areas faraway from centralised supply networks.

■ Obstacles to the adoption of theseoptions range from market barriers toinstitutional, intellectual and financialbarriers. A range of incentives – somehidden – that favour conventionaloptions limit the adoption rate of alter-natives.

Decision-making, planning andinstitutional arrangements

The decision to build a dam is influenced bymany variables beyond immediate technicalconsiderations. As a development choice,the selection of large dams often served as afocal point for the interests and aspirationsof politicians, centralised governmentagencies, international aid donors and thedam-building industry, and did not providefor a comprehensive evaluation of availablealternatives. Involvement from civil societyvaried with the degree of debate and open-

ness to political discourse in a country.However, the WCD Global Review docu-ments a frequent failure to recognise affect-ed people and empower them to participatein the process. In some cases, the opportuni-ty for corruption provided by dams as large-scale infrastructure projects further distorteddecision-making.

Once a proposed dam project passed prelim-inary technical and economic feasibilitytests and attracted interest from financingagencies and political interests, the momen-tum behind the project often prevailed overother considerations. Project planning andappraisal for large dams was confinedprimarily to technical parameters and thenarrow application of economic cost-benefitanalyses. Historically, social and environ-mental impacts were left outside the assess-ment framework and the role of impactassessments in project selection remainedmarginal, even into the 1990s.

Conflicts over dams have heightened in thelast two decades due largely to the social andenvironmental impacts of dams that wereeither disregarded in the planning process orunanticipated. However, it also stems fromthe failure by dam proponents and financingagencies to fulfil commitments made,observe statutory regulations and abide byinternal guidelines. Whereas far-reachingimprovements in policies, legal require-ments and assessment procedures haveoccurred in particular countries and institu-tions, in the 1990s it appears that business-as-usual too often prevailed. Further, past short-comings and inequities remain unresolved,and experience with appeals, dispute resolu-tion and recourse mechanisms has been poor.

Core Values for Decision-MakingAs the Global Review of dams makes clear,improving development outcomes in thefuture requires a substantially expandedbasis for deciding on proposed water andenergy development projects – a basis thatreflects a full knowledge and understanding

xxxiii

Executive Summary


of the benefits, impacts and risks of largedam projects to all parties. It also requiresintroducing new voices, perspectives andcriteria into decision-making, as well asprocesses that will build consensus aroundthe decisions reached. This will fundamen-tally alter the way in which decisions aremade and, we are convinced, improve thedevelopment effectiveness of future decisions.

The Commission grouped the core valuesthat informed its understanding of theseissues under five principal headings:■ equity,

■ efficiency,

■ participatory decision-making,

■ sustainability, and

■ accountability.

These five are more than simply issues –they are the values that run through theentire report. They provide the essentialtests that must be applied to decisionsrelating to water and energy development. Ifthe report advances these values significantlywe will emerge at our destination – improveddecision-making processes that deliver im-proved outcomes for all stakeholders.

The debate about dams is a debate about thevery meaning, purpose and pathways forachieving development. This suggests thatdecision-making on water and energymanagement will align itself with theemerging global commitment to sustainablehuman development and on the equitabledistribution of costs and benefits. Theemergence of a globally accepted frameworkof norms rests on the adoption of theUniversal Declaration of Human Rights in1948 and related covenants and conven-tions thereafter. These later resolutionsinclude the Declaration on the Right toDevelopment adopted by the UN GeneralAssembly in 1986, and the Rio Principlesagreed to at the UN Conference on Envi-ronment and Development in 1992. Thecore values that inform the Commission’sshared understanding are aligned with thisconsensus and rest on the fundamental

human rights accorded to all people byvirtue of their humanity.

Rights, risks and negotiatedoutcomes

Reconciling competing needs and entitle-ments is the single most important factor inunderstanding the conflicts associated withdevelopment projects and programmes –particularly large-scale interventions such asdams. The approach developed by theCommission of recognising rights andassessing risks (particularly rights at risk) inthe planning and project cycles offers ameans to apply these core values to deci-sion-making about water and energy re-source management. Clarifying the rightscontext for a proposed project is an essentialstep in identifying those legitimate claimsand entitlements that may be affected bythe project or its alternatives. It is also apre-condition for effective identification oflegitimate stakeholder groups that areentitled to a formal role in the consultativeprocess, and eventually in negotiatingproject-specific agreements relating, forexample, to benefit sharing, resettlementand compensation.

The assessment of risk adds an importantdimension to understanding how, and towhat extent, a project may impact onpeople’s rights. In the past, many groupshave not had an opportunity to participatein decisions that imply major risks for theirlives and livelihoods, thus denying them astake in the development decision-makingprocess commensurate with their exposureto risk. Indeed, many have had risks imposedon them involuntarily. Risks must be identi-fied and addressed explicitly. This will requirethe notion of risk to be extended beyondgovernments or developers to include boththose affected by a project and the environ-ment as a public good. Involuntary risk bearersmust be engaged by risk takers in a transparentprocess to negotiate equitable outcomes.

An approach based on the recognition ofrights and assessment of risks can lay thebasis for greatly improved and significantly

Executive Summary

Dams and Development: A New Framework for Decision-Makingxxxiv

more legitimate decision-making on waterand energy resource development. It offersan effective way to determine who has alegitimate place at the negotiation table andwhat issues need to be included on theagenda. Only decision-making processesbased on the pursuit of negotiated outcomes,conducted in an open and transparentmanner and inclusive of all legitimate actorsinvolved in the issue are likely to resolvethe complex issues surrounding water, damsand development.

Recommendations for aNew Policy FrameworkResearching and analysing the history ofwater resources management, the emergenceof large dams, their impacts and perform-ance, and the resultant dams debate led theCommission to view the controversy sur-rounding dams within a broader normativeframework. This framework, within whichthe dams debate clearly resides, builds uponinternational recognition of human rights,the right to development and the right to ahealthy environment.

Within this framework the Commission hasdeveloped seven strategic priorities andrelated policy principles. It has translatedthese priorities and principles into a set ofcorresponding criteria and guidelines for keydecision points in the planning and projectcycles.

Together, they provide guidance on translat-ing this framework into practice. They helpus move from a traditional, top-down,technology-focused approach to advocatesignificant innovations in assessing options,managing existing dams – including process-es for assessing reparations and environmen-tal restoration, gaining public acceptanceand negotiating and sharing benefits.

The seven strategic priorities each supportedby a set of policy principles, provide aprincipled and practical way forward fordecision-making. Presented here as expres-sions of an achieved outcome, they summa-

rise key principles and actions that theCommission proposes all actors shouldadopt and implement.

1. Gaining Public AcceptancePublic acceptance of key decisions is essen-tial for equitable and sustainable water andenergy resources development. Acceptanceemerges from recognising rights, addressingrisks, and safeguarding the entitlements ofall groups of affected people, particularlyindigenous and tribal peoples, women andother vulnerable groups. Decision makingprocesses and mechanisms are used thatenable informed participation by all groupsof people, and result in the demonstrableacceptance of key decisions. Where projectsaffect indigenous and tribal peoples, suchprocesses are guided by their free, prior andinformed consent.

2. Comprehensive OptionsAssessmentAlternatives to dams do often exist. Toexplore these alternatives, needs for water,food and energy are assessed and objectivesclearly defined. The appropriate develop-ment response is identified from a range ofpossible options. The selection is based on acomprehensive and participatory assessmentof the full range of policy, institutional andtechnical options. In the assessment processsocial and environmental aspects have thesame significance as economic and financialfactors. The options assessment processcontinues through all stages of planning,project development and operations.

3. Addressing Existing DamsOpportunities exist to optimise benefitsfrom many existing dams, address outstand-ing social issues and strengthen environ-mental mitigation and restoration measures.Dams and the context in which they oper-ate are not seen as static over time. Benefitsand impacts may be transformed by changesin water use priorities, physical and land usechanges in the river basin, technologicaldevelopments, and changes in public policyexpressed in environment, safety, economicand technical regulations. Management andoperation practices must adapt continuously to

xxxv

Executive Summary


changing circumstances over the project’s lifeand must address outstanding social issues.

4. Sustaining Rivers and LivelihoodsRivers, watersheds and aquatic ecosystemsare the biological engines of the planet.They are the basis for life and the liveli-hoods of local communities. Dams transformlandscapes and create risks of irreversibleimpacts. Understanding, protecting andrestoring ecosystems at river basin level isessential to foster equitable human develop-ment and the welfare of all species. Optionsassessment and decision-making aroundriver development prioritises the avoidanceof impacts, followed by the minimisationand mitigation of harm to the health andintegrity of the river system. Avoidingimpacts through good site selection andproject design is a priority. Releasing tailor-made environmental flows can help main-tain downstream ecosystems and the com-munities that depend on them.

5. Recognising Entitlements andSharing BenefitsJoint negotiations with adversely affectedpeople result in mutually agreed and legallyenforceable mitigation and developmentprovisions. These recognise entitlementsthat improve livelihoods and quality of life,and affected people are beneficiaries of theproject. Successful mitigation, resettlementand development are fundamental commit-ments and responsibilities of the State andthe developer. They bear the onus to satisfyall affected people that moving from theircurrent context and resources will improvetheir livelihoods. Accountability of respon-sible parties to agreed mitigation, resettle-ment and development provisions is ensuredthrough legal means, such as contracts, andthrough accessible legal recourse at thenational and international level.

6. Ensuring ComplianceEnsuring public trust and confidence re-quires that the governments, developers,regulators and operators meet all commit-ments made for the planning, implementa-tion and operation of dams. Compliancewith applicable regulations, criteria and

guidelines, and project-specific negotiatedagreements is secured at all critical stages inproject planning and implementation. A setof mutually reinforcing incentives andmechanisms is required for social, environ-mental and technical measures. Theseshould involve an appropriate mix ofregulatory and non-regulatory measures,incorporating incentives and sanctions.Regulatory and compliance frameworks useincentives and sanctions to ensure effective-ness where flexibility is needed to accommo-date changing circumstances.

7. Sharing Rivers for Peace,Development and SecurityStorage and diversion of water on trans-boundary rivers has been a source of consid-erable tension between countries and withincountries. As specific interventions fordiverting water, dams require constructiveco-operation. Consequently, the use andmanagement of resources increasinglybecomes the subject of agreement betweenStates to promote mutual self-interest forregional co-operation and peaceful collabo-ration. This leads to a shift in focus from thenarrow approach of allocating a finiteresource to the sharing of rivers and theirassociated benefits in which States areinnovative in defining the scope of issues fordiscussion. External financing agenciessupport the principles of good faith negotia-tions between riparian States.

If we are to achieve equitable and sustaina-ble outcomes, free of the divisive conflicts ofthe past, future decision-making about waterand energy resource projects will need toreflect and integrate these strategic prioritiesand their associated policy principles in theplanning and project cycles.

From Policy to Practice –The Planning and ProjectCycleThe Commission’s recommendations canbest be implemented by focusing on the keystages in decision-making on projects thatinfluence the final outcome and where

Executive Summary

Dams and Development: A New Framework for Decision-Makingxxxvi

compliance with regulatory requirementscan be verified. Among the multitude ofdecisions to be taken, the Commission hasidentified five key decision points. The firsttwo relate to water and energy planning,leading to decisions on a preferred develop-ment plan:

■ Needs assessment: validating the needsfor water and energy services; and

■ Selecting alternatives: identifying thepreferred development plan from amongthe full range of options.

Where a dam emerges from this process as apreferred development alternative, threefurther critical decision points occur:

■ Project preparation: verifying thatagreements are in place before tender ofthe construction contract;

■ Project implementation: confirmingcompliance before commissioning; and

■ Project operation: adapting to changingcontexts.

Social, environmental, governance andcompliance aspects have been undervaluedin decision-making in the past. It is herethat the Commission has developed criteriaand guidelines to innovate and improve onthe body of knowledge on good practicesand add value to guidelines already incommon use. Seen in conjunction withexisting decision-support instruments, theCommission’s criteria and guidelines providea new direction for appropriate and sustaina-ble development.

Bringing about this change will require:

■ planners to identify stakeholders througha process that recognises rights andassesses risks;

■ States to invest more at an earlier stageto screen out inappropriate projects andfacilitate integration across sectorswithin the context of the river basin;

■ consultants and agencies to ensureoutcomes from feasibility studies aresocially and environmentally acceptable;

■ the promotion of open and meaningfulparticipation at all stages of planningand implementation, leading to negotiat-ed outcomes;

■ developers to accept accountabilitythrough contractual commitments foreffectively mitigating social and environ-mental impacts;

■ improving compliance through inde-pendent review; and

■ dam owners to apply lessons learned frompast experiences through regular moni-toring and adapting to changing needsand contexts.

The Commission offers its criteria andguidelines to help governments, developersand owners meet emerging societal expecta-tions when faced with the complex issuesassociated with dam projects. Adopting thisframework will allow states to take informedand appropriate decisions, thereby raisingthe level of public acceptance and improv-ing development outcomes.

Beyond the Commission –An Agenda for ChangeThe Commission’s report identifies the keyelements of the debate on water and energyresources management and the role of damsin this debate. It summarises the lessonslearned from our Global Review of experi-ence with large dams. It elaborates thedevelopment framework within which thecontroversies and underlying issues can beunderstood and addressed and proposes adecision-making process anchored in arights-and-risks approach and based onnegotiated outcomes. It offers a set ofstrategic priorities, principles, criteria andguidelines to address the issues aroundexisting dams and to use in exploring newwater and energy development options.

The report is not intended as a blueprint.We recommend that it be used as thestarting point for discussions, debates,internal reviews and reassessments of what

xxxvii

Executive Summary


may be established procedures and for anassessment of how these can evolve toaddress a changed reality. In looking at thefuture, the Commission proposes a numberof entry points to help organisations identifyimmediate actions they might take inresponse to the Commission’s report.Specific proposals are included for:■ national governments and line minis-

tries;■ civil society organisations;■ the private sector;■ bilateral aid agencies and multilateral

development banks;■ export credit agencies;■ inter-governmental organisations;■ professional associations; and■ academic and research bodies.

Engaging through these entry points willinitiate permanent changes to advance theprinciples, criteria and guidelines we set out.

The trust required to enable the differentactors to work together must still be consoli-dated. Early and resolute action to addressissues arising from the past will go a longway towards building that trust in thefuture. So, too, will an assurance to coun-tries still at an early stage of economicdevelopment that the dams option will notbe foreclosed before they have had a chanceto examine their water and energy develop-ment choices within the context of theirdevelopment process.

The experience of the Commission demon-strates that common ground can be foundwithout compromising individual values orlosing a sense of purpose. But it also demon-strates that all concerned parties must stay

together if the issues surrounding water andenergy resources development are to beresolved. It is a process with multiple heirsand no clear arbiter. We must move forwardtogether or we will fail. The Commissionwas given an exceptional opportunity and ithas delivered a result reflecting our collec-tive learning process and understanding. Ifour report does not win widespread supportamong participants in the dams debate, it isunlikely that there will be another suchopportunity for a long time.

We believe that our report is a milestone inthe evolution of dams as a developmentoption. We have:

■ conducted the first comprehensive globaland independent review of the perform-ance of essential aspects of dams andtheir contribution to development. Wehave done this through an inclusiveprocess that has brought all significantplayers into the debate;

■ shifted the centre of gravity in the damsdebate to one focused on investing inoptions assessment, evaluating opportu-nities to improve performance andaddress legacies of existing dams, andachieving an equitable sharing of bene-fits in sustainable water resources devel-opment; and

■ demonstrated that the future for waterand energy resources development lieswith participatory decision-making,using a rights-and-risks approach thatwill raise the importance of the socialand environmental dimensions of damsto a level once reserved for the economicdimension.

We have told our story. What happens nextis up to you.

1

Water, Development and Large Dams


Over 45 000 times in the last

century, people took the

decision to build a dam. Dams were

built to provide water for irrigated

agriculture, domestic or industrial use,

to generate hydropower or help control

floods. But dams also altered and

diverted river flows, affecting existing

rights and access to water, and result-

ing in significant impacts on livelihoods

and the environment. Decisions to

build dams are being contested increas-

ingly as human knowledge and experi-

ence expand, as we develop new

technologies, and as decision-making

becomes more open, inclusive and

transparent.

Chapter 1:

Water, Development andLarge Dams

Chapter 1

Dams and Development: A New Framework for Decision-Making2

At the heart of the currentdebate on dams is the waychoices are made, and thedifferent opinions andperspectives that are ex-pressed – or denied expres-sion – in the process. Thesame question of decision-making is at the centre ofthe Commission’s area ofconcern.

Dams are a means to an end,not an end in themselves.What is that end? Howcentral are the challengesthat large dams set out tomeet? And how well candams meet them?

The World Commission onDams considers that the end of any damproject must be the sustainable improve-ment of human welfare. This means asignificant advance of human developmenton a basis that is economically viable,socially equitable, and environmentallysustainable. If a large dam is the best way toachieve this goal it deserves our support.Where other options offer better solutionswe should favour them over large dams.

Thus the debate arounddams challenges our view ofhow we develop and manageour water resources.

Water has attracted theattention of political leadersat the highest level and has

triggered a series of strategic global initia-tives such as the World Commission onWater.1 The most powerful players indevelopment have placed water at the top oftheir agendas. Why this sudden attention toa resource that was, after all, central to

human needs long before the dawn ofcivilisation?

At one level, the water issue justifies thepriority accorded it because demand forwater is rapidly outstripping available supplyin large parts of the world. As populationsgrow, and economic development leads tohigher consumption, demand for waterincreases sharply putting intense pressure onavailable stocks. This can cause growingsocial tensions, or even lead to outrightconflict. While commonly expressed predic-tions that future wars will largely be foughtover water may be exaggerated, nobodydoubts that access to both surface and groundwater is an increasingly contentious issue.

Where co-operation gives way to unfaircompetition between different water uses orbetween communities and countries, a rangeof new issues come to the fore. These issuesrelate to the distribution of power andinfluence within societies and betweencountries. They concern the relative weightof the different factors that make up thedecision-making mix. And they relate tohow choices are made between availableoptions.

The issues surrounding dams are the issuessurrounding water, and how water-relateddecisions are made. There is little publiccontroversy about the choice between anembankment dam or a gravity dam, orwhether to use earth, concrete or rock-fill,possibly even over financing the develop-ment. The issues all relate to what the damwill do to river flow, to rights of access towater and river resources, to whether it willuproot existing human settlements, disruptthe culture and sources of livelihood of localcommunities and deplete and degradeenvironmental resources. Conflicts overdams are more than conflicts over water.

The World Commission onDams considers that the endof any dam project must be

the sustainable improvementof human welfare.

3



They are conflicts over human developmentand life itself.

If water is life, rivers are its arteries. Damsregulate or divert the flow through thesearteries, affecting the life-blood of humanity.The fact that they aim to do so in theinterests of humankind only makes thedecision to build a large dam more sensitive,one that will trigger a range of apprehen-sions, hopes and fears, both rational andirrational.

This Chapter examines the context of thedebate on large dams that led to the estab-lishment of the Commission. It begins witha broad look at the past and present ‘drivers’of the demand for water, and the role oflarge dams in meeting this demand. Then itpresents general patterns and trends in thedevelopment of large dams during the 20th

century, along with a brief description of themain purposes for building dams. Thechapter also introduces the scale andsignificance of the benefits, costs andimpacts of large dams, described in moredetail in Chapters 2 to 6.

It goes on to look at the central issues in thelarge dams debate – the benefits and adverseimpacts – and the positions taken by differ-ent constituencies on the past effectivenessof dams, and what may constitute goodpractice in future decision-making. Chapter 7picks up many of these themes and alsosituates the dams debate in the emergingglobal development framework.

The final section of the chapter traces theestablishment of the Commission andhighlights the mandate given to it inresponse to the debate on large dams. Itthen lays out the methodology adopted andthe process followed by the Commission.

Water and DevelopmentToday, around 3 800 km3 of fresh water iswithdrawn annually from the world’s lakes,rivers and aquifers.2 This is twice thevolume extracted 50 years ago.

A growing population and arising level of economic activityboth increase human demand forwater and water-related services.Development, technologicalchange, income distribution andlife-styles all affect the level ofwater demand.

How much water do we need?

World population has passed 6 billion.Although the annual increase probablypeaked at about 87 million around 1990, thehigh proportion of young people in mostdeveloping countries means that globalpopulation will continue to increase signifi-cantly well into this century.

Recent projections suggest a peak of be-tween 7.3 billion and 10.7 billion around2050 before total population begins tostabilise or fall.3 Predictions cannot beprecise, because other dimensions of devel-opment such as access to health, education,income, birth control and other servicesinfluence the pace of population growth.

Despite the massive investment in waterresource management and particularly in

Successfully meeting human demands for water in the next century willincreasingly depend on non-structural solutions and a completely new approachto planning and management. The most important single goal of this newparadigm is to rethink water use with the objective of increasing the productiveuse of water. Two approaches are needed, increasing the efficiency with whichcurrent needs are met, and increasing the efficiency with which water is allocatedamong different uses.

Source: Gleick, 1998

Box 1.1 New paradigm for water use

Today, around 3 800 km3

of fresh water iswithdrawn annually fromthe world’s lakes, riversand aquifers. This is twicethe volume extracted 50years ago.

Chapter 1


areas, and contributing to rapidly growingdemand for additional services. In heavilypopulated countries like China, India andIndonesia many question the sustainability ofthe high rates of urbanisation in mega-cities.

Economic growth anddevelopment

World economic activity has grown approxi-mately five-fold since 1950 at a rate of about4% per year.5 The regional balance ischanging, with significant growth in Asiaover the past 25 years. At present, OECDcountries continue to account for the largestshare, amounting to 55% of world produc-tion at purchasing power parity, nearly 80%at market prices. 6

Economic growth has two implications forwater demand. The first is that increasedeconomic activity will increase the demandfor water-related services – regardless ofwhether the demand is satisfied by moreefficient use of the existing supply, or byincreasing the level of supply. The second isthat both the development brought about byeconomic growth and the technologicalchanges that accompany it will lead tostructural changes in the pattern of goodsand services that society produces, and inthe way these services are provided. Thewater demand per unit of Gross DomesticProduct (GDP) will depend on how thesetwo components of economic growth arecombined. Countries with the same productper capita but different production charac-teristics – for example, with large scaleirrigated agriculture or water intensiveindustries – may consume three or fourtimes more water per dollar of GDP. This isevident when comparing the United Statesand Canada with Germany or France, orIndia with China.

dams, billions of children, women and menin rural areas lack access to the most basicwater and sanitation services. Althoughproblems of access are worst in rural areas,rapid urbanisation is also increasing thedemand for water-related services. In 1995,46% of the world’s population lived in urbanareas. If current trends persist (and they mayaccelerate), that figure could reach 60% bythe year 2030 and over 70% by 2050.4 Mostof this growth will take place in developingcountries where an estimated 25 to 50% ofurban inhabitants live in impoverishedslums and squatter settlements. Lack ofaccess to water in both rural and urban areasis not just a question of supply. It is partly dueto inequitable access to existing supplies.

Urbanisation implies an increasing concen-tration on water and energy demand inmega-cities, a switch to different lifestylesand consumption patterns, and a loss ofproductive agricultural land through urbanexpansion. It is a widely held view that lackof attention to development in rural areas isfuelling unsustainable forms of urbangrowth, shifting poverty from rural to urban

5



Development and technological change canalso save water per dollar of output. Between1950 and 1990 the world economy grew by afactor of five while world water withdrawalsonly grew by a factor of 2.7 The last fiftyyears have seen a worldwide reduction inthe amount of water per dollar of non-agricultural production as a result of im-proved technology, more recycling, enforce-ment of environmental standards, higherwater prices, and industries moving awayfrom natural resource intensive activities.8

However, the water management practicesand technologies that enable such advancesare not widely available or promoted and areoften absent where they are most needed.Despite the increasing number of optionsavailable, the total number of peoplewithout access to clean water is growing.

Income distribution and life-styles

Economic activity and development affectincome, income distribution and lifestyles.These in turn affect the demand for waterthrough changes in the level and composi-tion of household consumption in areas suchas diet, the use of household appliances andstandards of sanitation.

How much water is needed for one moreperson? Although climate and cultureinfluence what constitutes an appropriatelevel of domestic water consumption,several international agencies and expertshave proposed 50 litres per person per day(or just over 18.25 m3 a year) as an amountthat covers basic human water requirementsfor drinking, sanitation, bathing and foodpreparation. In 1990 over a billion peoplewere below that level.9

On the other hand, households in devel-oped countries and better-off households indeveloping cities use from 4 to 14 times thethreshold of 50 litres per person a day.

Drastically lower average figures for domes-tic consumption in developing countriesreflect not only different life styles andlower incomes, but also a huge backlog ofunsatisfied demand. The lower average alsomasks extremely high consumption amongbetter-off urban households and acutedeprivation among rural and urban poor.

Competing uses of water

Water analysts foresee increased competi-tion among water users in meeting thegrowing demand. They predict that competi-tion will increase among the three largestwater users in global terms. Agricultureaccounts for about 67% of withdrawals,industry uses 19% and munici-pal and domestic uses accountfor 9%.10 Analysts foresee thatthese uses will continue to drawfrom the water needed tosustain natural systems. In dryclimates, evaporation fromlarge reservoirs, estimated atclose to 5% of total water withdrawals, mayalso be a significant consumptive use ofwater.11

Regional trends vary widely as shown inFigures 1.1 and 1.2. Despite increasingurbanisation in Africa, Asia and LatinAmerica, agriculture is the dominant wateruser in these regions, accounting for approx-imately 85% of all water used. In all regionsof the world except Oceania, domestic orhousehold water consumption accounts forless than 20% of water use.12 In Africa,Central America and Asia, this is nearer to5%. In the more developed regions ofEurope and North America, industry is themajor water consumer. The water usebreakdown in a specific country influenceswhere water demand management opportu-nities exist.

In 1990 over a billionpeople had access to lessthan 50 litres of water aday.

Chapter 1


For many water-stressed countries that areindustrialising, and that have large urbanpopulations, the present water crisis oftenrevolves around industrial and domesticwater supply and sanitation. This is evidentin the significant trend over the past fewdecades towards diverting water fromagricultural to municipal and industrial uses.As this is happening in the context of anoverall increase in withdrawals, it will lead

to increased competition for water, unlessmore efficient water use in both sectorsaccompanies the transition from agriculturalto industrial based economies. 13

There are additional challenges. To meetfood requirements, water used in agriculturemay have to increase 15 to 20% by 2025even with improvements in irrigationefficiency and agronomic potential.14 Inaddition to increasing food production inthe face of water stress, distribution, equita-ble access, purchasing power and poverty arecentral issues in meeting food demand.

Beyond competing human demands, waterfor nature is an essential consideration. Thefresh water ecosystems that provide thelivelihoods of the world’s riverine communi-ties and many other goods and services toour societies depend on water. Arresting,and where possible reversing, the accelerat-ing trend to increasing degradation of manyof the world’s watersheds caused by humanactivity have emerged as an urgent priority.

Availability and quality ofwater

Rainfall and other sources of freshwater(rivers, lakes, groundwater) are unevenlydistributed around the world and are not

% for industry% for domestic use% for agriculture

Low incomecountries

Lower middleincome countries

Upper middleincome countries

High incomecountries

Source: World Bank 1999a.

Figure 1.1: Annualfresh water

withdrawals as apercentage of

total resourceswithdrawn (1996)

Fresh water withdrawals per capita (m3)

OECD

Industrialised countries

Eastern Europe & CIS

Latin America & Caribbean

South Asia

SE Asia & the Pacific

East Asia

Arab States

Sub-Saharan Africa

Least developed countries

All developing countries

World

0 200 400 600 800 1 000 1 200

Figure 1.2: Annual fresh water withdrawals per capita average(1987-95)

Source: UNDP, 1999.

7



always located where human water demandarises. Pollution threatens surface andground water sources and may make themunfit for many uses, or require expensivetreatment. Pollution is especially seriouswhere ground water resources are over-exploited and suffer from reduced naturalrates of recharge due to deforestation, landuse changes and urbanisation.

Fully one third of the countries in water-stressed regions of the world are expected toface severe water shortages this century, andwithin these regions there are great dispari-ties in access to fresh water. Not surprisingly,a significant number of less developedcountries, including regions of India andChina, are facing severe shortages.15 Withpopulation growth, the number of countriesin this category is increasing, and by 2025there will be approximately 6.5 times asmany people – a total of 3.5 billion – livingin water-stressed countries.16 Figures 1.3 and1.4 show the distribution of world freshwater resources and selected water stressedcountries. The uneven distribution of watersupply means that countries may have watersurplus and water deficit regions.

Not only surface water is under pressure.The growing rate of extraction of freshwater from rivers and lakes is matched byincreasing extraction of ground water, withmany aquifers now seriously depleted. Thevolume of ground water withdrawal, prima-rily for irrigation but also for municipal andindustrial use, exceeds long-term rechargerates. In many parts of India, Pakistan andChina, the water table is sinking at the rateof one to two meters a year.17

Climate change can also affect the seasonaldistribution of rains and water availability.Studies and modelling exercises reviewed bythe Commission, including those by the

Intergovernmental Panel on ClimateChange (IPCC), strongly suggest that globalwarming trends could significantly increasethe variability of weather patterns.18 Re-sults could include a decline in rainfall in

Brazil17%

Russia11%

Canada7%

China 7%

Indonesia 6%USA 6%Bangladesh6%

Other35%

India 5%

Saudi Arabia

Yemen

Egypt

Israel

Korea

Iraq

Madagascar

Spain

Iran

Morocco

Pakistan

Germany

Italy

South Africa

Poland

0 20 40 60 80 100 120 140 160 180%

Water stress: withdrawals over 25% of annualwater resources

Figure 1.3:Distribution of theworld’s water

Source: Gleick, 1998.

Figure 1.4 : Selected water stressed countries

Source: Raskin et al, 1995.

Chapter 1


arid and semi-arid regions, and an increasein seasonal variations in rainfall around theglobe over the next 50 to 100 years.

Development and LargeDamsRiver basins are renowned as the cradles ofcivilisation and cultural heritage. Ancientand modern communities alike have de-pended on rivers for livelihood, commerce,habitat and the sustaining ecological func-tions they provide. Throughout historyalterations to rivers – natural or humangenerated – have affected riverine commu-nities in one way or another.

The earliest evidence of river engineering isthe ruins of irrigation canals over eightthousand years old in Mesopotamia. Re-mains of water storage dams found inJordan, Egypt and other parts of the MiddleEast date back to at least 3000 BC.

Historical records suggest that the use ofdams for irrigation and water supply becamemore widespread about a thousand years

later. At that time, dams were built in theMediterranean region, China and MesoAmerica. Remains of earth embankmentdams built for diverting water to largecommunity reservoirs can still be found inSri Lanka and Israel.19 The Dujiang irriga-tion project, which supplied 800 000 hec-tares in China, is 2 200 years old.20 Damsand aqueducts built by the Romans tosupply drinking water and sewer systems fortowns still exist today.

The first use of dams for hydropower genera-tion was around 1890. By 1900, severalhundred large dams had been built indifferent parts of the world, mostly for watersupply and irrigation.

Dams in the 20th century

The last century saw a rapid increase in

large dam building. By 1949 about 5 000

large dams had been constructed worldwide,

three-quarters of them in industrialised

countries. By the end of the 20th century,

there were over 45 000 large dams in over

140 countries.21

Source: WCD estimates based on ICOLD,1998 and other sources (See Annex V).

Austral-Asia

South America

Eastern Europe

Africa

Western Europe

North andCentral America

China

Asia

Number of dams

0 5 000 10 000 15 000 20 000 25 000

Figure 1.5:Regional

distribution oflarge dams at the

end of the 20th

century

9



The period of economic growth followingthe Second World War saw a phenomenalrise in the global dam construction rate,lasting well into the 1970s and 1980s. At itspeak, nearly 5 000 large dams were builtworldwide in the period from 1970 to 1975.The decline in the pace of dam buildingover the past two decades has been equallydramatic, especially in North America andEurope where most technically attractivesites are already developed. The averagelarge dam today is about 35 years old.

The top five dam-building countries ac-count for nearly 80% of all large damsworldwide. China alone has built around22 000 large dams, or close to half theworld’s total number. Before 1949 it had only22 large dams. Other countries among the topfive dam building nations include the UnitedStates with over 6 390 large dams; India withover 4 000; and Spain and Japan with between1 000 and 1 200 large dams each.

Source: ICOLD, 1998. Note: Information excludes the time-trend of dams in China.

after 1

990

Time

Num

ber

of d

ams

8 000

7 000

6 000

5 000

4 000

3 000

2 000

1 000

0

Africa

North America

South America

Asia

Austral-Asia

Europe

1910

s

1920

s

1930

s

1940

s

1950

s

1960

s

1970

s

1980

s

before

1900

1900

s

Figure 1.7: Dams constructed over time by region (1900-2000)

6 000

5 000

4 000

3 000

2 000

1 000

0

after 1

990

before

1900

1920

s

Num

ber

of d

ams

1910

s

1900

s

1930

s

1940

s

1950

s

1960

s

1970

s

1980

s

Source: ICOLD, 1998. Note: Information excludes dams in China.

Figure 1.6: Construction of dams by decade (1900-2000)

Chapter 1


Figure 1.5 shows the proportional distribu-tion of large dams in different regions of theworld. Approximately two thirds of theworld’s existing large dams are in developingcountries. Figures 1.6 and 1.7 show thecumulative and time-line trends in theconstruction of large dams in the lastcentury. The time-trend figures exclude dataon most of the dams in China and thereforediffer slightly from the trends described inthe text.

Current regional focus for large damconstruction

Construction of large dams peaked in the1970s in Europe and North America. Todaymost activity in these regions is focused onthe management of existing dams, includingrehabilitation, renovation and optimisingthe operation of dams for multiple func-tions. An estimated 1 700 large dams havebeen under construction in other parts ofthe world in the last few years. Of this total,40% are reportedly being built in India (seeTable 1.1 and Annex V for details).

Since average construction periods generallyrange from 5 to 10 years, this indicates aworldwide annual average of some 160 to320 new large dams per year.

Decommissioning of largedams

The end of the 20th century saw the emer-gence of another trend relating to largedams – decommissioning dams that nolonger serve a useful purpose, are too expen-sive to maintain safely, or have unaccepta-ble levels of impacts in today’s view. Mo-mentum for river restoration is acceleratingin many countries, especially in the UnitedStates where nearly 500 dams, mainlyrelatively old, small dams have been decom-missioned. Since 1998, the decommission-ing rate for large dams has overtaken therate of construction in the United States.

Experience in North America and in Europeshows that decommissioning dams hasenabled the restoration of fisheries andriverine ecological processes. However, damremovals without proper studies and mitiga-tion actions cause public concerns andenvironmental problems. These includenegative impacts on downstream aquatic lifedue to a sudden flush of the sedimentsaccumulated in the reservoir. Where therehas been industrial or mining activityupstream, these sediments may be contami-nated with toxic substances. Anotheroption is to open the floodgates of damswhere this is possible, either as a form ofdecommissioning, or to allow natural riverflows and unrestricted fish passage at criticaltimes of the year. While decommissioningefforts in the United States and France havereceived public support thus far, there maybe local opposition where changes in theflow and water levels affect services previ-ously provided by the dam, or where devel-opment has taken place around the reservoirand downstream.

There is comparatively little experiencewith the removal of larger dams. The biggerthe dam, the more problems decommission-

noitcurtsnocrednuyltnerrucsmaD:1.1elbaT

yrtnuoC smadforebmuN esopruP

aidnI gnidneped069ot596morfseiraVnoitamrofnifoecruosehtno

esoprupitlum,noitagirrI

anihC 082 ,noitagirri,lortnocdoolFgnidulcnirewopordyh

,egarotsdepmup

yekruT 902 ,rewopordyh,noitagirrIylppusretaw

aeroKhtuoS 231 ,rewopordyh,noitagirrIretaw,tnemeganamdoolf

ylppus

napaJ 09 lortnocdoolfylniaM

narI )m06evoba(84 esoprupitlum,noitagirrI

esaCaidnIDCW;0002,smaDdnarewopordyHfolanruoJlanoitanretnI;7991,DLOCI:secruoSDCWnideticaidnIrofsmaDegraLforetsigeRlanoitaN,9991,canamlAmaDnapaJ;0002,ydutS

.ydutSesaCaidnI

11



ing or removal are likely to face, and themore expensive they are likely to be. Morestudies are needed to address the costs, benefitsand impacts of decommissioning as the stockof dams ages and choices must be madebetween refurbishing and decommissioning.

Large Dams as Instrumentsof DevelopmentDams have been promoted as an importantmeans of meeting perceived needs for waterand energy services and as long-term, strategicinvestments with the ability to delivermultiple benefits. Some of these additionalbenefits are typical of all large public infra-structure projects, while others are unique todams and specific to particular projects.

Regional development, job creation andfostering an industry base with exportcapability are most often cited as additionalconsiderations for building large dams.Other goals include creating income fromexport earnings, either through direct salesof electricity, or by selling cash crops orprocessed products from electricity intensiveindustry such as aluminium refining.

Water-rich countries such as Canada,Norway, Brazil and parts of Russia havedeveloped large dams for hydropowergeneration where suitable sites were availa-ble. Governments in semi-arid countriessuch as South Africa, Australia and Spainhave tended to build dams with large storagecapacity to match water demand with storedsupply, and for security against the risk ofdrought. For example, in Spain – one of thetop five dam-building countries – rainfall ishighly variable between seasons and fromyear to year.

In East and Southeast Asia, during themonsoon season, rivers swell to over 10

times the dry season flow. In these settingsdams have been constructed to capture andstore water during wet seasons forrelease during dry seasons.

Large dams require significantfinancial investments. Estimatessuggest a worldwide investmentof at least two trillion US dollarsin the construction of large damsover the last century. During the 1990s, anestimated $32-46 billion was spent annuallyon large dams, four-fifths of it in developingcountries.22 Of the $22-31 billion investedin dams each year in developing countries,about four-fifths was financed directly by thepublic sector.

Today the world’s large dams regulate, storeand divert water from rivers for agricultural

Dams are promoted as animportant way to meetwater and energy needsand support economicdevelopment.

There are various definitions of large dams. The International Commission on LargeDams (ICOLD), established in 1928, defines a large dam as a dam with a height of15m or more from the foundation. If dams are between 5-15m high and have areservoir volume of more than 3 million m3, they are also classified as large dams.Using this definition, there are over 45 000 large dams around the world.

The two main categories of large dams are reservoir type storage projects andrun-of-river dams that often have no storage reservoir and may have limiteddaily pondage. Within these general classifications there is considerablediversity in scale, design, operation and potential for adverse impacts.

Reservoir projects impound water behind the dam for seasonal, annual and, insome cases, multi-annual storage and regulation of the river.

Run-of-river dams (weirs and barrages, and run-of-river diversion dams) create ahydraulic head in the river to divert some portion of the river flows to a canal orpower station.

Box 1.2: Types of large dams

s0991ehtnismadnitnemtsevnilaunnadetamitsE:2.1elbaT)raeyrepnoillibSU$(

gnipoleveDseirtnuoc seirtnuoc seirtnuoc seirtnuoc seirtnuoc

depoleveDseirtnuoc seirtnuoc seirtnuoc seirtnuoc seirtnuoc

latoT

rewopordyhrofsmaD 81-21 01-7 82-91

noitagirrirofsmaD 11-8

5-3 81-31ylppusretawrofsmaD 5.1

lortnocdoolfrofsmaD 0.1-5.0

latoT 13-22 51-01 64-23

gnitarenegedulcniserugifesehttahtetoN.sdnerTgnicnaniF,2.IIIweiveRcitamehTDCW:ecruoSdnanoitagirriybdevressmetsysnoitubirtsiddepipdnaslanactontubsmadrewopordyhrofsnoitallatsni

.smadylppusretaw

Chapter 1


production, human and industrial use intowns and cities, electricity generation, andflood control. Dams have been constructedto a lesser extent to improve river transpor-tation and, once created for other purposes,the reservoirs of many large dams have beenused for recreation, tourism, and aquaculture.

Figure 1.8 shows that about one third oflarge dams serve two or more purposes.Recent trends have favoured multi-purposedams. As the figure shows, there is consider-able regional variation in the functionsserved by large dams and these functionshave also changed over time.

The majority of large dams in Africa andAsia are for irrigation, though large dams aremore often than not multi-purpose. There isgrowing interest in dams for flood protec-tion and in pumped storage dams for powergeneration to meet peak demand in Asia.Single-purpose hydropower dams are mostcommon in Europe and South America,whereas single-purpose water supply projectsdominate in Austral-Asia. North America

has a relatively even spread of large damfunctions. All other potential purposes,including recreation and navigation, werefound in less than 5% of projects. Overall,the proportional share of irrigation damsand multi purpose dams has been increasingover the last 20 years, while the share ofhydropower dams has been decreasing.

Irrigation water supplied fromlarge dams

Irrigation is the single largest consumptive useof fresh water in the world today. It is linked tofood production and food security. About onefifth of the world’s agricultural land is irrigated,and irrigated agriculture accounts for about40% of the world’s agricultural production.23

The total area irrigated expanded dramaticallyduring the first years of the green revolution inthe 1960s, increasing yields and bringing downfood prices. From 1970 to 1982, global growthin the irrigated area slowed to 2% a year. Inthe post green revolution period between1982 and 1994 it declined to an annualaverage of 1.3%.24

Source: Adapted from ICOLD, 1998 (See Annex V).

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Africa Asia Austral-Asia Europe

6%

11%

26%

7% 19%

31%

52%

11%15%

65%

19%25%

1% 13% 17%

19% 30% 25% 24% 14% 23%

2%

24%20%

10%

13%44%

16%

Flood Control Irrigation Water Supply Hydropower Other Single Purpose Multipurpose

NorthAmerica

SouthAmerica

2% 3%

1% 3%

2%4%

2%

2%

Figure 1.8:Distribution ofexisting large

dams by regionand purpose

13



Half the world’s large dams were built exclu-sively or primarily for irrigation, and anestimated 30 to 40% of the 268 millionhectares of irrigated lands worldwide rely ondams. Discounting conjunctive use of groundwater and surface water, dams are estimated tocontribute to at most 12-16% of world foodproduction. Ground water irrigation typicallyhas higher yields, for a given amount of water,than surface water irrigation because of bettercontrol of the resource at farm level.25

Four countries – China, India, United Statesand Pakistan account for more than 50% ofthe world’s total irrigated area. As Figure 1.9shows, the scale and significance of large damsfor irrigation varies significantly from countryto country in terms of the percentage ofagricultural land irrigated, and the proportionof the irrigation water supplied from largedams. Dams supply the water for almost 100%of irrigated production in Egypt – most comingfrom the Aswan High Dam – while in Nepaland Bangladesh dams provide only 1% ofirrigation water. In the two countries with thelargest irrigated areas – India and China –official statistics suggest large dams supplyapproximately 30 to 35% of irrigation water,

with the balance coming mainly from groundwater sources. There is some controversy incalculating the percentage of food productionattributable to dams, and particularly on themethods used to account for conjunctive useof surface and ground water.26

Unsustainable irrigation practices haveaffected more than a fifth of the world’sirrigated area in arid and semi-arid regions. Asa result, soil salinity and waterlogging eithermake agriculture impossible, or limit yieldsand the types of crop that can be grown. Inother regions, over-use of tubewells hasdepleted ground water aquifers, lowering watertables and making extraction increasinglyexpensive and especially difficult for small-holders. The absence of effective policies onconjunctive use of ground water and surfacewater resources is one of the most importantconcerns.

Water for industrial use andurban centres

Globally, urban water consumption accountsfor 7% of total freshwater withdrawals fromrivers, and 22% from lakes.27 Many reservoirs

% o

f ara

ble

land

irrig

ated

100

90

80

70

60

50

40

30

20

10

0

% of irrigated area with water sourced from dams

VietnamChina

JapanPakistan

India

Spain Mexico

Korea – Republic of

UzbekistanEgypt

ThailandTurkey Malaysia

AustraliaSouth AfricaRussiaFrance

Bangladesh

Nepal

0 10 20 30 40 50 60 70 80 90 100

Figure 1.9:Agricultural landirrigated fromdams

Source: WCD Thematic Review IV.2 Irrigation Options, Section 1.3.

Chapter 1


were built to provide a reliablesupply of water to meet rapidlygrowing urban and industrialneeds, especially in drought-prone regions where naturalground water sources and existinglakes or rivers were consideredinadequate to meet all needs.

Globally, about 12% of large dams aredesignated as water supply dams. About60% of these dams are in North Americaand Europe.

The extent to which cities rely on dams andreservoirs for urban and industrial watervaries greatly even within countries. In theSaxony region of Germany, reservoirsprovide 40% of the water supplied to twomillion people, while Los Angeles derives55% of its water supply from local groundwater resources and 37% from a system ofreservoirs and pipelines that bring waterfrom more distant locations. Ho Chi MinhCity in Vietnam gets 89% of its water fromsurface sources, whereas Hanoi gets 100%from ground water.28

Electricity generation for thenational grid

Electricity generation is an important reasonfor building large dams in many countries,either as the primary purpose, or as anadditional function where a dam is built for

other purposes. Over the last 22years, global electricity produc-tion has more than doubled,though access is highly skewedbetween and within countries.29

Hydropower currently provides19% of the world’s total electric-ity supply and is used in over

150 countries. It represents more than 90%of the total national electricity supply in 24

countries and over 50% in 63 countries.About a third of the countries in the worldcurrently rely on hydropower for more thanhalf of their electricity needs. Five countries– Canada, United States, Brazil, China andRussia – account for more than half theworld’s hydropower generation. Between1973 and 1996 hydropower generation innon-OECD countries grew from 29 to 50%percent of world production, with LatinAmerica increasing its share by the greatestamount in that period.30

Hydropower has been perceived and pro-moted as a comparatively clean, low-cost,renewable source of energy that relies onproven technology. Except for reservoirevaporation, it is a non-consumptive use ofwater. Once built, hydropower, like allrenewable sources, is considered to have lowoperating costs and a long life, particularlyfor run-of-river projects and reservoirprojects where sedimentation is no concern.In the past, hydropower was especiallyattractive to governments with limited fossilfuel resources, who would otherwise havehad to import fossil fuels to sustain powergeneration. At the global scale, currentlevels of hydropower generation offset 4.4million barrels of oil-equivalent (thermalelectric generation) a day, roughly 6% of theworld’s oil production.

Protecting against floods

While natural floods have many beneficialfunctions they also pose a threat to life,health, livelihoods, and property. Theyremain among the world’s most frequent anddamaging disasters. Floods affected the lives,on average, of 65 million people between1972 and 1996, more than any other type ofdisaster, including war, drought and fam-ine31 . During the same period, an estimated3.3 million people were left homeless every

Hydropower provides19% of world’s total

electricity supply with 24countries depending onit for more than 90% of

their supply.

15



year as a result of floods. In terms of its region-al significance, flood-related economic lossesin Asia exceeded those in North America andEurope between 1987 and 1996.32

About 13% of all large dams in the world –in more than 75 countries – have a floodmanagement function.33 Although damshave historically been extensively used as adefence against floods, recent approachessee flood protection as more than buildingdefences against rising waters. For instance,reporting on the 1998 flood, Chineseauthorities acknowledged that its severitywas partly due to long-term environmentaldegradation and heavy logging throughoutthe affected watersheds.34 There are alsocases where dams have created or worsenedfloods due to dam breaks, poor reservoiroperation and changed downstream sedi-mentation patterns that reduce river chan-nel capacity.

The last two decades have seen a thoroughre-evaluation of what constitutes theappropriate mix of prevention, defence andmitigation against flood disasters. As aresult, the focus on controlling floodwaters,dominant in the 1950s–1960s, has lostground to more environmentally based andintegrated approaches. The reasons includefrustration at floods occurring despitestructures being in place, the high cost ofengineering solutions, and a better under-standing of how natural systems work.

Problems Associated withLarge DamsWhile dams have contributed to economicgrowth in the 20th century, the services theyprovide have come at a cost. This sectiongives an overview of the problems associatedwith large dams.

Physical transformation ofrivers

Large dams have fragmented and trans-formed the world’s rivers. The WorldResources Institute (WRI) foundthat at least one large dammodifies 46% of the world’s 106primary watersheds.35 The extentto which river flows have beenchanged varies around the world.The United States and theEuropean Union regulate theflow of 60–65% of the rivers in their territo-ries, though the amount varies from basin tobasin. Spain’s 53 km3 of storage behind largedams regulates 40% of its river flow, varyingfrom 71% in the Ebro river basin, to 11% inthe basins on the Galicia coast.36 In Asia,just under half the rivers that are regulatedhave more than one large dam.37

The modification of river flows on trans-boundary rivers has particular implications.There are 261 watersheds that cross thepolitical boundaries of two or more coun-tries38 . These basins cover about 45% of theearth’s land surface, account for about 80% ofglobal river flow and affect about 40% of the

Large dams havefragmented andtransformed the world’srivers, modifying 46% ofprimary watersheds.

The volume of the reservoir relative to the annual river flow is important inrelation to the purpose of the dam and how it is operated. It is also a majorfactor in the scale of the ecological effects. The surface area of the reservoir, orthe area flooded, points to the potential resettlement impact. The majority oflarge dams have reservoir surface areas of 0-1 km2 (more than 60%). Thisincludes run-of-river dams with no reservoir. A small percentage of dams (2%)have reservoir areas greater than 100 km2.

During the first half of the 20th Century, the average height, reservoir volumeand reservoir area increased in all regions. The average height of new dams was30-34 meters from 1940 through 1990, but has increased to about 45 meters inthe 1990’s, largely due to trends in Asia. The average reservoir area dramaticallyincreased from 1945 into the 1960’s to 50 km2; declined through the 1980’s toand average of 17 km2; and has again increased in the 1990’s to around 23 km2.

Source: WCD analysis of ICOLD, 1998

Box 1.3: Changing physical attributes and impacts of large dams

Chapter 1


world’s population.39 Issues andconcerns facing riparian countriesin these basins range from waterquality to flow volumes.

The aggregate storage capacityof large dams, based on dam

design, is about 6 000 km3.40 Assuming thathalf the design storage is achieved in reality,the aggregate real storage capacity of largedams globally is similar to total freshwaterwithdrawals estimated at around 3 800 km3.41

An estimated 0.5–1% of the total freshwater storage capacity of existing dams islost each year to sedimentation in both largeand small reservoirs worldwide.42 Thismeans that 25% of the world’s existing freshwater storage capacity may be lost in thenext 25 to 50 years in the absence of meas-ures to control sedimentation. This loss wouldmostly be in developing countries and regions,which have higher sedimentation rates.

Riverine ecosystems impacts

Growing threats to the ecological integrityof the world’s watersheds comefrom rising populations, waterpollution, deforestation, with-drawals of water for irrigationand municipal water supply andthe regulation of water flowsresulting from the constructionof large dams. Among the manyfactors leading to the degrada-tion of watershed ecosystems,dams are the main physicalthreat, fragmenting and trans-forming aquatic and terrestrialecosystems with a range of effectsthat vary in duration, scale anddegree of reversibility.

The watersheds of the world arethe habitat of 40% of the world’s

fish species, and provide many ecosystemfunctions ranging from nutrient recyclingand water purification to soil replenishmentand flood control. At least 20% of theworld’s more than 9 000 fresh water fishspecies have become extinct, threatened orendangered in recent years.43

Fish are a critical source of animal protein formore that 1 billion people. In Africa, fishprotein is 21% of the total animal protein inthe diet, and in Asia it is 28%. While riverssupply about 6% of fish protein consumed byhumans globally, it is often 100% of the supplyfor many inland riverine communities.

Ecosystem transformations do not onlyoccur in the upper, lower and mid-reaches ofwatersheds, they also impact on riverestuaries, which are frequently complexecosystems. Closing the mouths of majorrivers, salt intrusion, destruction of man-groves and loss of wetlands are among themany issues at stake.

Social consequences of largedams

While many have benefited from theservices large dams provide, their construc-tion and operation have led to many signifi-cant, negative social and human impacts.The adversely affected populations includedirectly displaced families, host communi-ties where families are resettled, and riverinecommunities, especially those downstreamof dams, whose livelihood and access toresources are affected in varying degrees byaltered river flows and ecosystem fragmenta-tion. More broadly, whole societies have lostaccess to natural resources and culturalheritage that were submerged by reservoirsor rivers transformed by dams.

The construction of large dams has led tothe displacement of some 40 to 80 million

The construction of largedams has led to the

displacement of some 40to 80 million people

worldwide.

17



people worldwide, as shown in Chapter 4.44

Many of them have not been resettled orreceived adequate compensation, if any.45

Between 1986 and 1993, an estimated4 million people were displaced annually byan average of 300 large dams startingconstruction each year.46 These figures onlygive an idea of the size of the problem, sincethere are enormous variations from case tocase.

The scale and range of social issues encoun-tered in the river basins altered by large damconstruction vary from region to region.The number of people deriving their liveli-hood directly from the river and its ecosys-tem, and the overall population density inthe river basin, gives an indication of thepotential impacts. As table 1.3 illustrates,population density can vary significantly.

The world’s two most populous countries –China and India, have built around 57% ofthe world’s large dams – and account for thelargest number of people displaced. In thelate 1980s China officially recognised some10.2 million people as ‘reservoir resettlers’,though other sources suggest the figure maybe substantially higher. 47 Large dams andreservoirs already built in the Yangtze basinalone have led to the relocation of at least10 million people.48 In India, estimates of thetotal number of people displaced due to largedams vary from 16 to 38 million people.49

Resettlement caused by large dams has beena significant part of total resettlement for allpublic infrastructure development. InChina, large dams are estimated to havedisplaced an estimated 27% of all peopledisplaced by development projects (the totalincludes people displaced by urban expan-sion, roads and bridges).50 In India thefigure is 77% (this total excludes peopledisplaced by urban development).51 Among

World Bank funded projectsinvolving displacement, damsand reservoirs accounted for63% of people displaced.52

These figures are only estimatesand do not include peopledisplaced by other aspects of theprojects such as canals, power-houses, project infrastructureand associated compensatorymeasures such as bio-reserves.

These are not the only problem areas andChapters 2 to 6 examine other reasons fordissatisfaction.

Understanding the LargeDams DebateThe huge growth of dam building in the 20th

century took place against a backdrop oftremendous political, economic and techni-cal transformations – while the world’spopulation grew from 1.65 billion in 1900,to 6 billion by the end of the century. Thelast three decades especially have seendramatic and wide-reaching changes inperceptions of development and concepts ofinterdependence with other people and withnature. This dynamic of change is alsoredefining the roles that governments, civilsociety and the private sector play in water

snisabrevirdetcelesfoytisnednoitalupoP:3.1elbaT

yrtnuoC nisabreviRnoitalupoP

ytisned ytisned ytisned ytisned ytisned)2mk/nosrep( )2mk/nosrep( )2mk/nosrep( )2mk/nosrep( )2mk/nosrep(

anihC eztgnaY 422

lizarB nozamA/snitnacoT 6

aidnI segnaG 573

yawroN negaaLdnaammolG 62

acirfAhtuoS nisaBreviRegnarO 21

dnaliahT gnokeM/nuM 87

setatSdetinU ekanS/aibmuloC 9

aibmaZdnaewbabmiZ izebmaZ 53

.8991,lateagneveR:ecruoS

The last three decadesespecially have seendramatic and wide-reaching changes inperceptions ofdevelopment andconcepts ofinterdependence withother people and withnature.

Chapter 1


and energy resource develop-ment planning. And while thewider transformations havespurred the debate on largedams, that debate itself hasbecome a major catalyst ofchange.

We begin by looking at the genesis ofopposition to large dams from the perspec-tive of social and environmental move-ments, before considering the main issues inthe debate that the meeting in Gland Switzer-land handed down to the Commission.

Genesis of the opposition todams

In the previous section we saw that dambuilding has a long history. Conflicts toohave a long history, though it is only inrecent years that they have come to com-mand wider attention. Conflicts over waterand dams are probably as ancient as dambuilding itself. In medieval England, boatowners opposed millers blocking rivers tocreate millponds to turn their water wheels.

Records from the 17th century tell of Scot-tish fishermen trying to destroy a newlycompleted weir. In the 1910s, conservation-ist John Muir unsuccessfully lobbied publicopinion and the US Congress against thebuilding of O’Shaugnessy dam in YosemiteNational Park in California.

Populations affected or threatened by damshave fiercely resisted dam building through-out the last century. Because they were oftenisolated, without help from outside sympa-thisers, affected people’s resistance to damsoften went unnoticed internationally and,in some cases, the states concerned usedintimidation and violence to suppress it.Eight people died and over 30 were injuredwhen colonial government forces fired onTonga people resisting removal to make wayfor the Kariba dam reservoir. But interna-tional attention focused on the mission torescue wildlife stranded in the impound-ment area.53 At around the same time inMexico, the Papaloapan River Commissionset fire to the houses of indigenous Mazatecswho refused to move for the Miguel Alemandam. In 1978 police killed four people whenthey fired at an anti-resettlement rally atChandil dam in the state of Bihar in India.In Nigeria in April 1980, police fired atpeople blocking roads in protest against theBakolori dam.54 And in 1985, 376 MayaAchi Indians, most of them women andchildren, were murdered in the course ofclearing the area to be submerged by theChixoy dam in Guatemala55 .

As dam building accelerated after the1950’s, opposition to dams became morewidespread, vocal and organised. Conserva-tionists in northern countries, especially inthe United States, led the first notablesuccesses for campaigns against large dams.56

There, conservationists were able to stop

As dam buildingaccelerated after the1950’s, opposition to

dams became morewidespread, vocal and

organised.

19



the 175 metre-high Echo Park dam on atributary of the Colorado River in the 1950sand two dams planned for the main stem ofthe Colorado River in the Grand Canyon inthe following decade. A series of new laws(notably the 1969 National EnvironmentalProtection Act, and the 1974 EndangeredSpecies Act), together with growing publicconcern about environmental conservation,public subsidies and budget deficits servedincreasingly as grounds for halting expensivedams, canals and channelisation projectsthrough the 1970s and early 1980s.

Over the past thirty years, the alliance ofnorthern activist groups (environmental andhuman rights groups) with NGOs andaffected groups’ associations in the Southhas resulted in more vigorous and more co-ordinated opposition to dams worldwide. Inmany cases, the strength of these coalitionshas had a major impact on dam-relatedplanning and policy and at the level ofindividual dams. As a result of these con-certed pressures the planning process, whichuntil the 1970s was the restricted preserve ofgovernment agencies, engineers and econo-mists, began to include environmentalimpact assessments and some public reviews.By the late 1980s environmentalists andsociologists began to play a more importantrole in the planning process, and by themid-1990s the involvement of affectedpeoples and NGOs in the process becamemore significant.57

It is only fair to note that popular action hasalso supported dams. Farmers in Madridrecently marched to demand more waterand more dams for irrigation.

The last few decades have seen a number ofsignificant policy steps in response to civilsociety demands and changing values. TheWorld Bank offers a good illustration. It is a

priority target of dam critics, as itis often the first and single largestfinancier of large dams. In 1982,the Bank adopted an internaldirective on indigenous peoples.Revisions of policies on resettle-ment and environmental assess-ment are other important mile-stones. More recently, in 1993,the World Bank established anappeals mechanism, the Inspec-tion Panel. This allows citizensadversely affected by Bank fundedprojects to file claims regardingviolations of its policies, proceduresand loan agreements. At the sametime the Bank promoted moreflexible approaches to informationdisclosure.58

Often, these policy reforms have beenclosely related to the impacts of resistancefrom affected groups and internationalNGO campaigns around individual projects.In 1973-77, the resistance of indigenouspeoples to four dams along the Chico Riverin the Philippines led the WorldBank to withdraw from theproject and resulted in thegovernment postponing it indefi-nitely.59 Other important mile-stones include the World Bank’swithdrawal from the SardarSarovar project in India in 1993,and then from Arun III in Nepalin 1995 (although in the latter case publicpressure may not have been the decidingfactor)60 . Sardar Sarovar, still on the agendadespite the World Bank withdrawal, contin-ues to be the focus of local opposition andinternational support. More recent examplesof campaigns include the Three Gorgesdams in China, the Pak Mun in Thailand,Ilisu in Turkey, Ralco in Chile, Epupa inNamibia, the Lesotho Highlands Water

The last few decadeshave seen a number ofsignificant policy stepsin response to civilsociety demands andchanging values.

Chapter 1


Project involving Lesothoand South Africa, andNam Theun II in Laos.

As earlier sections of thischapter showed, the paceof dam construction hasslowed significantly inrecent years. This is partlybecause industrialisedcountries have used most oftheir attractive sites, and

because of other factors, such as shifts indam financing from public to privatesources, matched with the decline in donorfunding and increasing costs of large dams.However, it also reflects the effectiveness ofanti-dam strategies developed by environ-mental and human rights activist groupsworldwide.

One frequently asked question is why thedebate focuses so centrally on dams. Theissues being debated, such as environmentalsustainability, equitable development,transparent and participatory decision-making also apply to other large infrastruc-ture projects and can only be addressed inthe context of broad societal change.

The view that environmental and humanrights groups have singled out large dams astheir main target is misleading. One assess-ment found that, of the 36 World Banksupported projects that NGO activist groupshave targeted with some success, only 12 aredam projects, compared to 14 forest andnatural resource management projects, fivemines or industrial management projects,and two urban infrastructure projects.61 Infact, large dams, like many other industrial,commercial, and governmental facilities areincreasingly contentious and difficult to siteand build, as are hazardous waste decontam-ination facilities, solid waste landfills,

hospitals, conservation areas, shoppingcomplexes, highways, parking areas, andmany more.

If dams are not the only infrastructureprojects subject to rising criticism, why dothey seem to be often at the centre ofcontroversy, dispute, and even violentconfrontation? There are many reasonslargely related to the scale and scope of thedams and the impacts.

■ Large dams represent major investments,and in some cases may be the largestsingle investment in a country. Theseinvestments are essentially irreversibleand often highly politically charged.

■ Large dams are generally justified bynational or regional macro-economicbenefits while their physical impacts arelocally concentrated, mostly affectingthose within the confines of the rivervalleys, and along the river reaches. Themismatch of benefits and costs translateseasily into confrontational attitudes.

■ Resettlement for large dams tends to beon a larger scale than resettlement forother types of physical infrastructure.Roads and thermal power stations can besited on marginal land whereas damsgenerally flood rich and fertile agricul-ture land.

■ Those resettled from dam or reservoirsites very often lose not only their homesbut also their livelihoods. Relocation inrural settings where good land is alreadyoccupied can be problematic.

■ Large dams affect critical, life sustainingresources, such as land, fisheries and thequality and allocation of freshwater, anincreasingly scarce and coveted resource.

■ Lack of adequate and accepted solutions tothe social and environmental impacts oflarge facilities has resulted in increasedsocial mobilisation around these issues.

21



■ The lower than anticipated economicperformance of many projects.

These factors aside, the perceived injusticein the distribution of the benefits andimpacts, and the increased concern aboutthe environmental implications indicatethat the debates, controversies and conflictssurrounding large dams are not about damsalone. They are part of a wider debate aboutdevelopment, a debate where diverging viewson the use of natural resources and publicfinancial resources confront each other.

Disaggregating the debate

Clearly the dams debate has many layersand many interconnected issues. The debateis partly about what occurred in the past andcontinues to occur today, and partly aboutwhat may happen in the future if more damsare built – or are not built. The extent towhich the debate is driven by social orenvironmental concerns, or by broaderdevelopment considerations, varies fromcountry-to-country. The dams debate in theUnited States, where the rate of decommis-sioning dams is greater than the rate ofconstruction, is perhaps as intense as, butqualitatively different from, the debate inIndia which, along with China, is nowbuilding more dams than any other country.

The two principal poles in the dams debate,much in evidence at the Gland Workshopin 1997, help to define the range of viewson past experience with large dams. Thefirst focuses on the gap between the prom-ised benefits of a dam and what happens onthe ground. The review of global experiencewith dams set out in Chapters 2-6 confirmsthat these concerns are justified. Dams haveoften not met their targets.

The other pole looks at the challenges ofwater and energy development from a

perspective of ‘nation building’ and resourceallocation. To its proponents, the answer tothe question of past performance is self-evident. Dams have generally performedwell as an integral part of water and energyresource development strategies in over 140nations and, with a few exceptions, damshave provided an indispensable range ofwater and energy services.

Beyond this rough characterisation, it ispossible to disaggregate the debate along afew central themes. The way the debate isstructured largely determines how it isconducted at national and internationallevels.

Performance: costs and benefits

Performance is often measured in terms ofwhether the project delivered the benefitsthat were the basis for approval and fundingof the project. But thereis more to judging per-formance than this. Anassessment of overallperformance, or perform-ance over the full life-cycle of a dam, oftenyields many differentresults. So too with costs,much depends on howcompletely costs areinternalised, and whobears particular costs compared to how thebenefits are shared. There is no easy formulafor calculating the costs and benefits to yielda quick and easy judgement on the overallbalance.

Environmental impacts andsustainability

At one level, the debate revolves aroundhow to measure the scale of the impacts,whether these impacts can be avoided orsuccessfully mitigated, and whether they arereversible or irreversible. A more fundamen-

Performance: costs and benefitsEnvironmental impacts and sustainabilitySocial impacts and equityEconomics and financeGovernance and participationWider development impacts of damsAlternatives to damsCross-cutting issues

Box 1.4: Central issues in the damsdebate: past and present

Chapter 1


tal controversy centres on howenvironmental considerations arevalued against immediate humandevelopment needs. For commu-nities who depend directly onriver resources for their liveli-hoods, the environment is thebasis for meeting their needs. Anexample is the value placed onbiological diversity, or on theecosystem functions that may belost when the river flow isregulated. This debate becomesespecially heated where otheroptions are available. Othercontroversies concern widerregional or global environmentalimpacts, for example whetherdams emit greenhouse gases orreduce acid rain, under what

conditions, and to what extent relative tothe alternatives. This aspect of the debateextends to whether large dams should beincluded in climate change protocols, andwhether and how dams should be treated infuture carbon emission trading schemes.

Social impacts and equity

This includes both the scale of the impactsand the distribution of costs, benefits andimpacts, including those borne by relocatedfamilies, host communities where familiesare resettled, and riverine communitiesaffected by the change in river flows andaccess to resources. Social issues go beyondequity in the distribution of benefits andimpacts and relate to fundamental rights.They include:

■ the burden placed on indigenous peoplesand ethnic minorities and the degree ofrecognition of their distinctive status;

■ the impact on gender and basic humanrights; and

■ the loss of livelihood and health impactsin rural areas.

Dealing with the legacy left by forcedrelocation under both authoritarian anddemocratic regimes and the need to allocateresponsibility for redress are other issues inthe debate. An issue that has caused a greatdeal of tension in the past concerns thebasis on which trade-offs, such as thepotential benefits to many at the cost ofhardship for a few, are invoked and decided.

Economics and finance

Controversy also surrounds the limits andthe ability of methods for economic assess-ment to fully capture and reflect the varioussocial and environmental impacts andvalues. Governments and financial institu-tions continue to use traditional economicand financial analysis – rate of return,discount rates, sensitivity tests and theexclusion or inclusion of indirect costs – asprimary decision criteria. The debate is howadequately these are applied in practice andhow they are balanced against other devel-opment objectives or criteria. Related issuesinclude the cost recovery levels for all typesof dam projects, the implications for subsi-dised use of water and the equity dimensionsof these subsidies.

Governance and participation

The principal considerations related tothese issues centre on the transparency andopenness of options assessment, and howplanning and decision-making processes areconducted. Other issues relate to the meth-ods used to reconcile local or community-led planning and consensus-building proc-esses with more traditional and centralisedplanning approaches, access to information,and the dominance of single agencies inplanning with multiple responsibilities fordesigning, construction and operating largeinfrastructure projects. At the heart of thedebate on these issues is the degree ofinvolvement of affected people and wider

23



groups of stakeholders in needs assessmentand project-level decision-making. Imple-mentation creates its own set of governancechallenges, including whether agreedstandards are followed for social and envi-ronmental mitigation, compensation andenhancement.

Wider development impacts of dams

Many of the controversial issues go beyondthe impact of the project itself and touchupon wider regional or national develop-ment choices. Examples include the propor-tion of the development budget allocated tolarge dams as opposed to other uses of publicfunds, the impact of an investment in a damon the country’s debt burden, and competi-tiveness considerations linked to subsidies.There are also more positive considerations,including the potential of dams to contrib-ute to export earnings.

Alternatives to dams

The degree of even-handedness applied inconsidering alternatives to large dams is,perhaps, one of the most contested issues. Itraises the question of whether dams areselected over other options that may meetthe water development or energy objectivesat lower cost, or that may offer more sustain-able and equitable development benefits.This aspect of the debate extends to wheth-er, and on what basis, dams should beconsidered complementary to, or mutuallyexclusive of other options of different scalesand types. Whether to give primacy tooptions such as demand-side management orimproving the efficiency of existing supplyassets, and under what conditions, are alsodebated. The options debate connects withthe political economy of decision-making,and therefore to the distribution of powerand influence within societies. This includeshow choices are made between availableoptions, and the extent to which market orother institutional factors create barriers and

incentives for different optionsthat provide the same service.

Cross-cutting issues

A range of cross-cutting issuesturn on the role and influence ofvarious public and private sectorinterests in the planning anddecision making process. This includes theroles and influence of industry groupsranging from domestic and internationalconsultants, to developers, contractors andsuppliers, and extends to the financialservice providers. The financing role isespecially critical and includes the multilat-eral and bilateral development banks,insurers and export credit agencies, as wellas the commercial banks. Issues raised in thedebate range from harmonising standards forfinancing dam construction to steps toaddress corrupt practices that can distortdecision-making. There are numerous othercross-cutting issues such as the transboundaryimplications of dams on sharedrivers.

These examples illustrate theterrain, scope and complexity ofthe debate, and how it hasbecome intertwined with widerdevelopment concerns.

Economic development duringthe first half of the 20th centurywas dominated by an approachthat emphasised harnessing andappropriating water and other naturalresources for economic activities. Since theUnited Nations Charter (1945) and TheUniversal Declaration on Human Rights(1948), a globally accepted developmentframework setting out universal goals,norms, and standards has been graduallyemerging. These declarations have beenaugmented over time by the Convention

The degree of even-handedness applied inconsidering alternativesto large dams is,perhaps, one of the mostcontested issues.

Since the United NationsCharter (1945) and TheUniversal Declaration onHuman Rights (1948), aglobally accepteddevelopment frameworksetting out universalgoals, norms, andstandards has beengradually emerging.

Chapter 1


Concerning the Protection and Integrationof Indigenous and Other Tribal and Semi-Tribal Populations in Independent Coun-tries (1959), the International Covenant onEconomic, Social, and Cultural Rights,(1966), the UN Declaration on the Right toDevelopment (1986), and the Rio Declara-tion on Environment and Development(1992), among others. Together they formthe current framework for sustainablehuman development.

This framework has been widelyratified by the world’s nations,although differences emerge insetting priorities and emphases,and in fulfilling, implementing,and resolving conflicts betweencompeting rights. The realisationof these rights presumes recogni-tion of conflicts between com-peting rights and the setting upof mechanisms for negotiationand conflict resolution. Wediscuss the development frame-work as it relates to the WCD’sanalysis and methodologies laterin this chapter, and Chapter 7presents an approach for design-ing mechanisms to resolve andnegotiate competing rights.

Where international laws, norms andaspirations are reflected in national legaland policy frameworks, a number of obsta-cles often prevent their translation intoreality. These obstacles include lack ofpolitical will or incentive, especially wherethe democratisation process has not reacheda level where citizens and civil societyorganisations are strong enough to influencedecision-making. Another major obstacle,especially facing poor countries, relates tothe lack of capacity (financial and humanresources but also institutional capacity) to

ensure that basic human rights and aspira-tions are fulfilled for their citizens. Compli-ance with existing laws and policies isanother important issue.

Is there a way forward?

All parties involved in the debate have theirown views on what needs to be done toaddress the problems that they have identi-fied. Some of the main suggestions made bydam critics and proponents in variousdeclarations and statements are as follows.

Dam critics point to:

■ the need for more sustainable andappropriate alternatives to dams;

■ the imperative for improved transparen-cy, accountability and public participa-tion in the planning of water and energyprojects;

■ the importance of prior project approvalby potentially affected groups;

■ the need for protecting and promotingthe rights of potentially affected peoples,and for setting in place measures toreduce inequities; and

■ the necessity of reparation measures toaddress the legacy of unfulfilled commit-ments and unresolved problems.

Dam proponents underline:

■ the evolution and change in practicesover time;

■ the recognised need for social andenvironmental concerns to be elevatedto the same level as safety concerns.(They believe these environmental andsocial costs must be avoided, or mini-mised and properly mitigated when theyoccur.);

■ the importance of ensuring that affectedpeople are better off as a result of damdevelopment, and of considering them as

25



shareholders, partners, and thereforeproject beneficiaries;

■ the imperative of participatory decision-making;

■ the need to promote the principles ofequity, efficiency and economic viability;and

■ the importance of balancing the need fordevelopment with the requirement ofensuring environmental sustainability.

This broad taxonomy indicates that thereare many areas for potential convergence,especially regarding what needs to be donein the future. All agree on the need:

■ to take environmental and social costs ofdams more seriously;

■ for more systematic consultation withaffected people;

■ to ensure that affected people are better offas a result of the dam development; and

■ to ensure that the costs and benefits ofdams are shared more equitably.

However, unresolved issues still separatepositions on a number of financial, econom-ic, social, and environmental issues. Themost intractable include:

■ the extent to which alternatives to damsare viable for achieving various develop-ment goals, and whether alternatives arecomplementary or mutually exclusive;

■ the extent to which adverse environ-mental and social impacts are acceptable;

■ the degree to which adverse environ-mental and social impacts can be avoid-ed or mitigated; and

■ the degree to which local consent shouldgovern development decisions in thefuture.

One of the central problems – and certainlyone of the main causes of stalemate in the

debate – is the lack of mutual trust betweenthe key parties involved. For opponents,dams promoters too often agree to newpolicies and guidelines, but fail to complywith them.

Toward the establishment ofthe WCD and its mandate

The WCD can trace its roots back to theorigins of the dams debate. In addition tothe debate, two other related factors paintedthe backdrop to its conception. The first isthe accelerating shift in accepted notions ofthe appropriate relationship between theState and its citizens. The second is theincreased recognition of the negativeenvironmental and social out-comes experienced with largedams. The result has beengrowing controversy and conse-quent delays in developmentdecisions.

In Chapter 7, the section ondevelopment trends explores theshift in public support away fromcentralised decisions often taken on thebasis of abstract notions of the greatercommon good. Instead the public is focusingmore sharply on notions of equity in thedistribution of the costs and benefits ofdevelopment and participation in decision-making.

Growing disaffection by many groups insociety with the way decisions are taken,with the distribution of costs and benefits,and with compliance and recourse mecha-nisms has provoked growing resistance tolarge dams and escalating tension andconflicts around individual dam projects.While much of this conflict has centred onthe developing world, it nevertheless strikesat the dams industry as a whole. Becausemany of the most appropriate dams sites in

One of the centralproblems – and certainlyone of the main causesof stalemate in thedebate – is the lack ofmutual trust betweenthe key parties involved.

Chapter 1


the developed world have already beenexploited, the future of the industry liesprincipally in the developing countries,whether the industry itself is based there orin the developed countries. Linked to thisare considerations about the image ofinternational companies, their standing inthe community, their relationship withshareholders and their reputation for corpo-rate social responsibility.

New approaches are not always well re-ceived by developing country governments.They often see them as a case of developedcountries, having benefited from cuttingcorners themselves, turning to insist that

developing countries meethigher standards. However, toobtain international financing –public or private – developingcountries find themselveshaving to comply with newapproaches, norms, and policiesas a condition of financing orpartnership.

The net effect of opposition andthe controversy over outcomeshas been to increase the level ofrisk associated with projects –especially those that fail to

recognise the need for a change in the waythings are done. This has increased delayson dam projects in cases where controversialelements are contested in the courts. Boththese factors directly or indirectly increasethe costs of dams.

By the early 1990s, it was becoming clearthat the cost of controversy could seriouslyaffect future prospects for dams and stallefforts to finance other non-dam water andenergy development projects to serve ruralor urban communities. The stalemate didnot benefit governments, dam builders,

communities or the environment, as noactions or investments were consideredattractive given the ongoing conflict. A newway had to be found.

The need of both dams proponents andopponents to negotiate a new, agreed basisfor assessing options and for planning,deciding, implementing and operating them– created the conditions for setting up theWCD and giving it a mandate.

Beyond these general considerations, severalspecific milestones mark the road leading tothe establishment of the WCD. Theseinclude:

■ The 1992 Morse report.62 This was anindependent review of the Sardar Sarov-ar project, commissioned by the WorldBank as a result of growing controversyover Bank funded projects and criticismof these projects at grassroots level andinternationally. Instead of tempering thecontroversy, the Morse report fuelleddeep criticism of the World Bank’sinternal decision-making.

■ The Manibeli Declaration, signed inJune 1994 by 326 activist groups andNGO coalitions from 44 countries,calling among other things for a morato-rium on World Bank funded large damsuntil a comprehensive, independentreview of all Bank funded dam projectshad been conducted.63

■ The 1996 report of the World Bank’sOperations Evaluation Department(OED).64 An internal review of theperformance and impacts of a sample of50 Bank funded large dams. This deskstudy observed that 90% of dams re-viewed met the Bank’s standards forresettlement at the time they were built,but 75% failed to meet the Bank’s mostrecent standards. Another important

By the early 1990s, itwas becoming clear that

the cost of controversycould seriously affectfuture prospects for

dams and stall efforts tofinance other non-dam

water and energydevelopment projects to

serve rural or urbancommunities.

27



finding was that proper mitigation of theadverse environmental and socialimpacts of most of the dams reviewedwould have been feasible without com-promising the economic feasibility of theprojects. The report and the process bywhich it was prepared were highlycriticised by the NGO community.

■ The soul-searching was not confined tothe development finance community.Professional water and energy develop-ment associations also began assessingthe causes of the growing controversyand reaching conclusions on whatneeded to be done. The InternationalCommission On Large Dams (ICOLD)published its Position Paper on Dams andthe Environment in 1997.65 Similarly theInternational Commission on Irrigationand Drainage (ICID) initiated a processthat resulted in a major statement, TheRole of Dams for Irrigation, Drainage andFlood Control, in 2000.66

■ The NGO community was also active ingathering case material on experiencewith large dams and drawing conclusionsfrom it. Building on Goldsmith andHildyard’s 1984 report, Silenced Rivers byPatrick McCully of the InternationalRivers Network, published in 1996,depicts a particularly bleak record of thesocial and environmental impacts ofdams and their underlying politicaldimensions.

By 1997, suspicion and mistrust betweenproponents and critics of large dams threat-ened to dominate and undermine widerdiscussion needed to reach agreements onways to improve access to water and energyservices. In response to this the World Bankand the World Conservation Union(IUCN), a global union of more than 800governments, government agencies andNGOs – sponsored a meeting between the

champions and the critics of largedams in Gland, Switzerland inApril 1997. While the Glandworkshop was focused on bring-ing a range of opinion around thetable to discuss the implicationsof the World Bank/OED reviewof 50 Bank funded dams, it foundsufficient common ground to setin motion the process that led tothe formation of the WCD.

The Gland workshop broughttogether 39 participants representinggovernments, the private sector, interna-tional financial institutions, civil societyorganisations, and affected people in abalance later mirrored in both the WCDand the Stakeholders Forum. In addition toassessing the OED report, they addressedthree issues:

■ Critical advances needed in knowledgeand practice in relation to energy andwater resources management.

■ Methodologies and approaches requiredto achieve these advances.

■ Proposals for a follow-up process involv-ing all key players.

The workshop participants identified keyissues relating to the social, environmental,technical, and financial aspects of dams thathad to be addressed in reviewing the role ofdams and their alternatives in sustainabledevelopment. They also formed an InterimWorking Group composed of workshopparticipants and entrusted this group toestablish the WCD. This task proved to belong and complex, in part because of thedecision of the working group to consult allof the key stakeholder groups at each step,and also because of the time needed to buildconfidence in the good faith of all theparties.

The Gland workshopbrought together 39participants representinggovernments, the privatesector, internationalfinancial institutions, civilsociety organisations,and affected people in abalance later mirrored inboth the WCD and theStakeholders Forum.

Chapter 1


The WCD was finally announced in Febru-ary 1998, and began its work the followingMay, under the Chairmanship of ProfessorKader Asmal, then South Africa’s Ministerof Water Affairs and Forestry and laterMinister of Education. Its 12 members werechosen through a global search process toreflect regional diversity, expertise, andstakeholder perspectives. The Commissionwas independent, with each member servingin an individual capacity and none repre-senting an institution or a country.

As defined by the Gland workshop, theCommission’s two objectives were to:

■ Review the development effectiveness oflarge dams and assess alternatives forwater resources and energy development.

■ Develop internationally acceptablecriteria, guidelines and standards whereappropriate, for the planning, design,appraisal, construction, operation,monitoring and decommissioning ofdams.

The dual objectives are deliberate, reflectingto some extent the priorities of the differentparticipants in the dams debate. The cham-pions of large dams, while wishing to drawuseful lessons from the review of pastexperience, tend to lay the emphasis onpractical tools that will help overcome thecontroversy and set a foundation for morepredictable scenarios. The opponents oflarge dams, on the other hand, tend tounderscore the importance of the review,convinced that it will reveal the depth andpersistence of the negative impacts thatdams have caused. They want to see evi-dence that dams can be an acceptableoption before giving too much attention todeveloping guidelines for building betterdams in the future.

Fulfilling the WCDMandate: Process andMethodologyTo respond to both parts of the mandate itwas given in Gland, the Commission beganby developing an analytical framework andwork programme to assemble a consolidated,shared knowledge base on the worldwideexperience with large dams, that:

■ is grounded in the accepted internationalnorms of sustainable and equitablehuman development;

■ aims to explore the key themes at thecentre of the dams debate, especiallythose that are unresolved; and

■ compares the planned performance andexpectations of dams with the actualexperience after project completion.

The Commission used both quantitativeand qualitative methods to objectivelyevaluate and answer the key questionsposed.

It did not set out to judge decisions on damprojects from 50 or 100 years ago, but ratherto learn lessons about the outcomes of damsand how these lessons could work to changeor affect outcomes in the future.

In order to ensure a solid foundation ofmaterial on which to base its analysis andconclusions, the WCD commissioned,organised or accepted:

■ in-depth Case Studies of eight large damson four continents, together with twocountry review studies;

■ a Cross-Check Survey of large damslocated in 52 countries across the globe;

■ 17 Thematic Reviews grouped along fivedimensions of the debate;

■ four regional consultations; and

29



■ over 900 submissions from interestedindividuals, groups and institutions.

Recognising the value of the perspectivesprovided by representatives attending theGland meeting, in the first few months of itswork the Commission decided that thegroup should be retained as a consultativebody for the Commission process, to beknown as the WCD Forum. It was composedof a mix of former Reference Group mem-bers from the Gland meeting, and newstakeholders and interest groups. In select-ing the new members of the Forum theWCD was guided by criteria such as rele-vance, balance and representation of adiversity of perspectives and interest groups.

The Forum offers a consultation model thatworks at a somewhat different level thanother forms of consultation. It has around 70members and operates as a ‘sounding board’for the work of the Commission. It isprimarily a mechanism for maintaining adialogue between the Commission and theconstituencies of Forum members.

Since the Commission was facilitatingdebate on the complex issue of the develop-ment effectiveness of dams, input derivedthrough consultation with these constituen-cies was essential for the understanding andacceptance of the Commission’s finalproducts. The Forum was one means ofachieving these objectives.

Chapter 10 looks ahead to the dissemina-tion and the adoption of the Commission’srecommendations. It provides suggestionson the post-Commission role of stakeholdergroups such as the Forum.

Developing the knowledgebase

The Commission set out to develop aknowledge base that would give it access tothe full range of issues and perspectivesconcerning large dams. The goal was to gobeyond the realm of experts and intergovern-mental processes to include constituencieswith very different entry points into the damsdebate. The process was designed to offer theopportunity for dialogue among the differentinterest groups, while providing a solid founda-tion for the Commission’s findings.

The WCD Process

Global Dissemination ProcessGlobal dissemination of findings

and publications

Establishment of CommissionWork Programme developed and Secretariat established

Final Report

Knowledge Base

Synthesis of Work Programme Results• Review of Development Effectiveness of Large Dams• Framework for Options Assessment• Criteria and Guidelines

Activities

• Thematic Reviews

• Cross-Check Survey

• Case Studies

• Regional Consultations

Chapter 1


Main elements of the workprogramme

The Commission has based its report on asynthesis of information on past experienceacross all elements of the WCD workprogramme. A brief description of thesemain elements follows. Further details onthe methodology are shown in Annex III.

Case Studies and Country Studies

The Commission undertook two case studiesin OECD countries and six in developing

countries. It prepared countryreview studies for India andChina, and an issue paper for theRussian Federation and NewlyIndependent States. The casestudies provide a thoroughunderstanding of the challengesand dilemmas associated withspecific dams set in the contextof the development situation inspecific countries, and the riverbasins. They were implemented

in stages with stakeholder participation.

The Commission followed a standardframework for each case study, based on themodel developed by the Secretariat. At thecore were six questions:

■ What were the projected versus actualbenefits, costs and impacts?

■ What were the unexpected benefits,costs and impacts?

■ What was the distribution of costs andbenefits – who gained and who lost?

■ How were decisions made?

■ Did the project comply with the criteriaand guidelines of the day?

■ How would this project be viewed intoday’s context in terms of lessons learned?

These questions served a much widerpurpose than merely orienting the case

studies. They helped to shape the globalreview, the element of the work programmeused by the Commission to evaluate the keyissues in the overall debate. The Commis-sion also used the studies to focus morespecifically on the development effective-ness issue from the viewpoints of the stake-holder group for each case study.

Cross-Check Survey of dams

The Commission developed the Cross-Check Survey to extend the analysis provid-ed in the case studies to target a broader setof dams. Completed survey forms werereceived for 125 dams in 52 countries. The125 dams included the case study dams,additional dams from the case study basins,dams from existing databases and a randomselection of dams from the larger populationto contribute to the overall diversity of thesample. The analysis aimed to detect broad-er patterns and trends in performance anddecision-making relating to dams.

A variety of dams of different types (storage,run-of-river); ages (the 1930’s through the1990’s), functions (water supply, irrigation,power, flood management, recreation andother); ownership structures (public, corpo-rate and private); and regional locationswere included in the survey. Data wasverified by an internal review and by sub-mitting contested and randomly selecteddata sets for review by constituencies otherthan the dams owners and operators. AnnexIII sets out the methodology and summarystatistics. Figure 1.10 shows the location ofthe case study dams and cross-check surveydams.

Thematic Reviews

A total of 17 Thematic Reviews and some130 papers were commissioned to addressfive major areas of concern identified in theWCD strategy and objectives paper:

31



Figure 1.10: World m

ap showing the regional location of the C

ase Studies, Country Studies, C

ross-Check Survey dam

s,Regional C

onsultations, submissions, Forum

mem

bers, Com

missioners and Secretariat

Chapter 1


■ social and distributionalissues;

■ environmental issues;

■ economic and financialissues;

■ options assessment; and

■ governance and institutionalprocesses.

The Thematic Reviews providedthe baseline information, analy-sis and recommendations onissues that cut across the centralelements in the large damsdebate. They consider past andcurrent experience, as well as theforward-looking context, bysynthesising the state-of-the-artknowledge, practices and keyviewpoints on each topic.Within limits set by availableresources and the Commission’sschedule, the level of effortinvolved in preparing thesereview papers varies according tothe complexity of the issue andthe level of controversy sur-rounding it. Preparation of thereview papers included settingup panels and procedures forbroader peer review. This helpedto bring together a wide spec-trum of perspectives and ap-

proaches on the topic and to clarify theareas of potential agreement, and persistentdisagreement, on highly controversial issues.

Regional Consultations

Over the course of two years, the Commis-sion held four regional consultations, oneeach in South Asia, Africa and the MiddleEast, Latin America, and East and SouthEast Asia. For each of the regional consulta-tions, governments and non-governmentorganisations, project-affected communities,financial institutions, industry and privatesector representatives were invited to submitproposals on all aspects of their experiencewith dams and alternative options, and withwater and energy resource development.Over 30 presentations were made at eachconsultation and participants engaged indebates on the issues raised. They gave theCommission a unique and unprecedentedexposure to the many voices and perspec-tives in the dams debate in a number ofcountries and regions.

The Commission also had the benefit oflistening to NGO and affected communitypresentations at two hearings organised byNGOs from Europe and from SouthernAfrica, as well as obtaining a wider range ofinputs through attending and participatingin meetings, workshops and conferencesorganised by a wide range of organisationsand networks.

Africa-Middle-East Consultation,Cairo, December 1999

East and South-East AsiaConsultation, Hanoi, February2000

Latin America Consultation, SaoPaulo, August 1999

South Asia Consultation,Colombo, December 1998

33



Endnotes

1 World Commission on Water in the 21stCentury, 2000. Other examples of strategicinitiatives in water include the UnitedNations Comprehensive Assessment ofFreshwater Resources of the World, theUnited Nations Food and AgricultureOrganisation Aquastat programme, and theWorld Water Vision conferences.

2 Gleick, 1998, p43.

3 UN, 1999, p1; also Raskin et al, 1998.Medium projection in 2050 was 8.9 billion.

4 UN, 1998, p2–29. In 30 years the largestpopulation growth is projected to be in urbanconglomerations; the 10 largest populationcentres in descending order of size would beMumbai (Bombay), Shanghai, Chennai(Calcutta), Beijing, Delhi, Karachi, Tianjin,Metro Manila, Jakarta, and Dhaka.

5 IPCC, 1999. Purchasing power parity (PPP)uses accounting exchange rates to compareor add country economic data and avoiddistortions introduced by market exchangerates. In 1995 world Gross Product reached afigure of US$33.4 trillion at purchasingpower parity (PPP).

6 Raskin et al., 1998, p9. OECD Data; 78% atmarket prices and 55% at purchasing powerparity.

7 Shiklomanov, 1998 in Gleick 2000, p51–54;Raskin et al, 1995; based on United Nations,World Bank, and World Health Organisationdata.

8 Raskin et al, 1995.

9 Gleick, 1998, p44–45.

10 Seckler et al, 1998.

11 Shiklomanov, op cit.

12 WRI et al, 1998, p304–305.

13 Shiklomanov, op cit. Municipal and industri-al use increased from 17 to 28% of freshwater withdrawals globally between 1950 and1990.

14 Van Hofwegen and Svendsen, 2000.

15 Raskin et al, 1995, p9; Countries areconsidered to be water stressed when theannual renewable water supply drops below1700 m3 per capita, and water scarce when itdrops below 1000 m3.

16 Raskin et al, 1998.

17 Brown and Halweil, 1999.

18 WCD Thematic Review II.2 Global Change.

19 Schnitter, 1994; McCully, 1996.

20 Zhang, 2000, WCD Regional ConsultationPaper.

21 ICOLD, 1998; see also Annex V; Compila-tion of estimates of the number of dams inthe main dam building countries suggestthere may be as many as 48 000 large dams.

22 WCD Thematic Review III.2 FinancingTrends.

23 WCD Thematic Review IV.2 IrrigationOptions. Yields from irrigated areas are onaverage double that of rainfed agriculture,and are generally higher on land irrigated byground water than on land irrigated withsurface water.

24 Cosgrove and Rijsberman, 1999, p40.

25 Ibid.

26 The WCD India Country Study noted thatthe official figures of the Central WaterCommission indicate that 30% of irrigatedland is supplied with water by dams; howev-er, the study also suggested an alternativefigure of 10%.

27 Shiklomanov, op cit.

28 Roo, 2000, pp1–31; McIntosh and Yñignez,1997, p189.

29 IEA, 2000. The UN estimates that 2 billionpeople have no access to electricity. Electric-ity consumption per capita varies by morethan a factor of 10 among different regions ofthe world: from approximately 10 000 kWh/year in North America to less than 1 000kWh/year in Africa.

30 IEA, 1998.

31 IFRCRCS, 1998.

32 Berz, 2000.

33 ICOLD, 1998.

34 Lu, 2000.

35 Revenga et al, 1998. The WRI’s 1998 studyof the conditions of the major watersheds inthe world focused on 150 watersheds,representing 55% of the world’s land area.

36 Berger et al, 2000.

37 ICOLD, 1998; WCD Analysis.

Chapter 1


38 Wolf, 2000, Contributing Paper for WCDThematic Review V.3 River Basins.

39 Wolf et al, 1999.

40 Lecornu, 1998.

41 A considerable portion of the aggregate storageof large dams may be for non-consumptivehydropower releases. Analysis of all large damsin the ICOLD Register (1998), but excludingsingle purpose hydropower dams, shows 4 373km3 of designed storage capacity. This data setexcludes many of the large dams in China,estimated to provide 451 km3 of storage (IJHD,1999)

42 Keller et al, 2000, p6–7.

43 Revenga et al, 1998.

44 The World Bank based on the review of

resettlement experience estimated that

between 1986-1993, an estimated 4 million

people were displaced annually by the 300

large dams that entered on an average into

construction every year. In the late 1980s

some 10.2 million people were officially

recognised as "reservoir resettlers" in China.

This figure would be substantially higher if it

is officially updated to include new figures of

population resettlement. For example, dams

and reservoirs already built on the tributaries

and the main course of the Yangtze River

alone have caused relocation of at least 10

million people. In India the estimates of

people displaced due to large dams vary, from

21 million to 33 million people. Dams

account for 34% of all people displaced by

development projects in China (displace-

ment due to city construction included in

the total), 77% in India (urban displacement

not included to total displaced) and 65%

among the projects funded by the World

Bank involving displacement. All these

figures are at best only careful estimations

and certainly do not include the millions

who may have been displaced due to several

others aspects of the projects such as canals,

powerhouses, project infrastructure and

associated compensatory measures such as

bio-reserves etc. (See end notes 7 to 10 in

chapter 4 for references to this endnote.)

45 Fox and Brown, 1998b.

46 World Bank, 1996a, p77.

47 Jing, 1999, Contributing Paper for WCDThematic Review 1.3 Displacement, p2.

48 Wang, no date.

49 WCD Thematic Review I.3 Displacement.

50 ADB, 1999b, p1–2.

51 Fernandes and Paranjpye , 1997, p15–17.

52 World Bank, 1996a, p90–92.

53 WCD Kariba Case Study.

54 The protestors included both those to beresettled and farmers who were supposedlybeneficiaries of the Bakolori irrigationscheme. According to the Nigerian govern-ment, 23 protesters were shot dead; unofficialestimates put the death toll at more than 126.

55 Stewart et al, 1996; World Bank, 1996b;Chen, 1999, WCD Regional ConsultationPaper. At the WCD Regional Consultationat Sao Paulo one of the survivors narratedhow his wife and children were shot deadbefore his eyes when he merely enquired ofthe authorities ‘where do you want us tomove to?’ The answer came in the form offour rapid bullets.

56 McCully, 1996, p281-282.

57 Goodland, 2000.

58 Udall, 1998, p392.

59 Gray, 1998, p269-270.

60 Moore and Sklar, 1998, p286, WCD Submis-sion eco048.

61 Fox and Brown, 1998a, p489.

62 Morse and Berge, 1992.

63 Manibeli Declaration, 1994.

64 OED, 1996a and 1996b.

65 ICOLD, 1997.

66 ICID, 2000.

35



The World Commission on Dams was charged with

reviewing the development effectiveness of large dams

and assessing alternatives for water and energy resources

management. Part One of the report contains the results of

our Global Review of large dams. It consists of five chapters.

■ Chapter 2 provides the findings of the Commission’s independentreview of the technical, financial and economic performance oflarge dams.

■ Chapter 3 examines the environmental performance of large dams,including ecosystem and climate impacts.

■ Chapter 4 evaluates the social performance of large dams, lookingespecially at the displacement of people, and the distribution ofgains and losses from dams projects.

■ Chapter 5 assesses the scope of various alternatives to large damsfor meeting the needs of irrigation, drinking water, electricity, andflood management in terms of both the opportunities they provideand the obstacles they face.

■ Chapter 6 considers the planning, decision-making and institu-tional arrangements that guided the development of water andenergy resources and the selection, design, construction andoperation of dams.

Part One:The WCD Global Review ofLarge Dams

Technical, Financial and Economic Performance

37The Report of the World Commission on Dams

Chapter 2:

Technical, Financial andEconomic Performance

Any development project –

particularly a large

infrastructure one such as a large

dam – is conceived, planned, and

designed to achieve a set of objectives

that will enhance the welfare of

society. In assessing the performance

of large dams the Commission first

assessed the dams in the WCD

Knowledge Base against the targets set

by those planning and designing the

facilities. These projections of costs

and benefits provided the rationale and

basis for project approval and funding.

In most cases, project proponents set

firm physical, financial, economic

Chapter 2

38 Dams and Development: A New Framework for Decision-Making

and, increasingly, social and environmentalperformance targets. The Commission hasalso examined past experience with thebenefit of hindsight, that is, within thecontext of presently available information.Here the Knowledge Base is used to assessthe impacts of large dams that were notexplicitly targeted and planned for – such ascost recovery and adverse impacts onindigenous peoples – but that are importantfactors in assessing the contribution of largedams to development. This chapter beginsthe analysis with a focus on technical,financial and economic performance.

The evidence and findings presented belowindicate that there is considerable scope forimproving the selection of projects and theoperation of existing dams, even prior toconsideration of the social and environmen-tal impacts. The performance of large damsin terms of achieving technical, financial,and economic targets is marked by a highdegree of variability, with a considerableportion of dams failing to deliver on theiroverall objectives and many falling short of

specific targets. Still, a substan-tial number have met orexceeded their targets andcontinue generating benefitsafter 50 years or more. None-theless, the emerging messagefrom the WCD KnowledgeBase is that project selection,design, and operations could beimproved substantially relativeto past performance.

Structure andMethodologyThe analysis presented here draws on severalindependent samples of the experience withlarge dams, oriented along different axes andsupplemented by Commissioners’ personal

experiences. The information on dams inthe WCD Knowledge base is reported first.Results of the Cross-Check Survey are usedto indicate the direction, variability andextent of broad trends and patterns. Thesebroad findings are then supplemented byexperience captured in Case Studies,Thematic Review papers, contributions tothe Regional Consultations, and submis-sions. The Case Studies, in particular, areused to provide indicative illustrations ofthese broad findings and their immediatecauses. Existing literature and perspectivesare then cited to verify the original findings,and also to clarify new directions emergingfrom the Commission’s work.

The performance indicators for the imple-mentation phase of dam projects are thesame for dams with different purposes. Thusthis section begins by reporting on thedegree to which dams have met targets forcapital costs of projects and proceededaccording to schedule. It then proceedssector-by-sector to provide insight into therelative performance of dams built andoperated for different purposes. Large damsbuilt for irrigation, hydropower, water supplyand flood control have separate objectives,involve different components, respond todifferent markets and are operated indifferent ways. The inquiry is driven byconsideration of the delivery of benefitsmeasured in physical terms (such as water,power and crops) and then in terms offinancial and economic profitability. Whererelevant, sectoral performance on costs andtime schedules is brought into the analysis.

The extent of cost recovery is also discussed,as it provides a window not just on financ-ing issues but also on the effect of subsidieson the efficient allocation and use of re-sources. In addition, it informs the issues ofdistribution and equity treated in Chapter 4.

The emerging messagefrom the WCD

Knowledge Base is thatproject selection, design,and operations could be

improved substantiallyrelative to past

performance.



The secondary economic impacts generatedby large dams (such as multiplier effects) arealso treated in Chapter 4. Of course, manydams fulfil not just one but a number ofpurposes; these multi-purpose dams areexamined in an additional section and theirperformance is contrasted with that ofsingle-purpose dams. Finally, the sustainabil-ity of dam operations is considered byreviewing evidence on dam safety, sedimen-tation, waterlogging and salinity.

Construction Costs andSchedulesDuring the implementation period of a damproject – that is during construction – two keyperformance indicators are the extent towhich projects come in on time and onbudget. Large dams in the WCD KnowledgeBase have demonstrated a marked tendencytowards schedule delays and cost overruns.

Capital costs of large damprojects

Assessment of actual versus predictedperformance on capital costs is important fora number of reasons.1 First, dam projects aretypically approved on the basis of a financialbudget for the investment. If they end upcosting substantially more than expected,additional funds have to be found. As largedams and their associated infrastructure maycost billions of dollars – three of the CaseStudy dam complexes cost over $6 billioneach – financial overruns have importantconsequences for public and private budget-ing. Second, projects also often derive tariffcharges based on cost estimates, so under-estimates will undermine financial viabilityor efforts to recover costs.

Cost performance data in the WCD Knowl-edge Base suggest that large dam projects

often incur substantial capital cost overruns.The average cost overrun of the 81 largedam projects included in the WCD Cross-Check Survey was 56%. Variability washigh. Of the total sample, one-quarter of thedams achieved less than planned capital costtargets whilst almost three-quarters of thedams exhibit capital cost overruns (seeFigure 2.1).

Within the Cross-Check sample, multi-purpose dams demonstrated high variabilityin performance compared withsingle purpose dams, rangingfrom as low as 22% underruns to180% overruns of planned costtargets. Furthermore, the averagecost overrun was 63% for the 45multi-purpose projects – threetimes that of the single-purposehydropower dams in the sample.Comparatively, the cost overrunfor single-purpose projects was greatest forwater supply dams, with all but one projectshowing a 25 to 100% overrun and theaverage for this category being twice that of

Cost performance datain the WCD Knowledgebase suggest that largedam projects often incursubstantial capital costoverruns.

Cost performance datain the WCD Knowledgebase suggest that largedam projects often incursubstantial capital costoverruns.

Global sub-sample: 81 dams

Perc

enta

ge

of d

ams

2422201816141210

86420

Num

ber

of d

ams

25%

20%

15%

10%

5%

0%

% actual to planned capital costs (US$ Nominal)

50-7

980

-99

100-

119

120-

149

150-

199

>=200

0-49

underrun overrun

Figure 2.1 Cost overruns on large dam projects

Source: WCD Cross-Check Survey.

Chapter 2


single-purpose irrigation or hydropowerdams. Interestingly, performance was worstin the sub regions of Latin America, Europe,Central Asia, and South Asia, with costoverruns averaging 53%, 69%, 108%, and138% respectively.

The WCD Case Studies – viewed as a sub-sample separate from the Cross-CheckSurvey – suggest a more marked tendencytowards cost overruns. Of these, only Stage1 of the Kariba dam (built in the late 1950s)came in on target (a 3% underrun). Notealso that the experience is not limited tovery large billion-dollar projects, as the foursmaller, million-dollar projects in theGlomma and Laagen basin in the WCDCase Studies cost some 60 to 185% morethan projected. The Pak Mun dam inThailand, a medium-size hydropower damfinanced by the World Bank and commis-sioned in 1994, had a 68% overrun.2

The causes of cost variations fall into fourcategories:

■ poor development of technical and costestimates and supervision by sponsors;

■ technical problems that arose duringconstruction;

■ poor implementation by suppliers andcontractors; and

■ changes in external conditions (econom-ic and regulatory).3

Part of the difficulty in developing accurateprojections for construction costs of largedams is that the geotechnical conditions ata site (the quality of the rock for the founda-tions of the major structure and for tunnels),and the quality of the construction materialscannot be determined precisely until con-struction is under way. Discovery duringconstruction of less favourable site condi-tions than those assumed in the engineeringdesigns and construction plans can be asignificant contributor to cost overruns anddelays in time schedules. Despite being acommon factor in causing overruns, little tono provisions have been made to improvethe estimates in this regard.

0 50 100 150 200 250 300

AfDBe

WCD Case Studiesg

Average for all**

World Bank HEPa

World Bank MPb

IDBc

ADBd

IRN Listf

WCD Cross-Check*h

WCD Cross-Check: India onlyi

54%

235%

52%

89%

247%

2%

16%

45%

39%

27%

% capital cost overruns (US$ Nominal)

Sources: aBacon and Besant-Jones, 1998; b OED, 1996a; cIDB, 1999; dLagman, 2000; eAfDB, 1998; fMcCully,1999 eco061; gWCD Thematic Review III.1 Economics; h, i WCD Cross-Check SurveyNotes: *Excludes Case Study and India dams. **Weighted averages based on number of dams in each sample. HEP refers tohydropower projects and MP to multi-purpose projects.

Figure 2.2Average cost

overruns for largedams



Additional estimates of cost performancegathered or submitted as part of the WCDprocess include an Inter-American Develop-ment Bank review of its portfolio of largedam projects from 1960 to 1999. The resultssuggest an average cost overrun of 45% (seeFigure 2.2).4 In a similar exercise, the WCDreviewed the portfolio of large dam con-struction projects financed by the AsianDevelopment Bank (ADB) between 1968and 1999.5 Of the 23 completed ADB largedam projects with available data, there wasan average cost overrun of 16%. This masksconsiderable variability, as the majority oflarge dams in the ADB sample actually hadcost underruns. The International RiversNetwork (IRN) submitted a list of 14 largedams with cost performance data thatshowed a 242% overrun, with eight projectsin India dominating the results with anaverage overrun of 262%.6 The results fromthese latter dams, as well as the results forthe Indian dams in the Cross-Check (235%overrun) confirms the serious overrunsreported in the India Case Study.7

The data on cost performance reported byWCD confirm the results found in otherstudies. Perhaps the most cited study is thatof 70 World Bank financed hydropowerprojects commissioned between 1965 and1986, where costs at completion were onaverage 27% higher than estimated at apprais-al. This, compared to average cost overrunsof just 6% for a sample of 64 thermal powerprojects, and an 11% overrun for a sample ofover 2 000 development projects of alltypes.8 An analysis of the data on costindicators for 10 multi-purpose dams includ-ed in the World Bank Operations andEvaluation Department’s (OED) 1996 reporton large dams yields an average cost overrun of39%.9 Finally, a 1998 review of 10 projects bythe African Development Bank (AfDB)found an average cost overrun of only 2%.10

The evidence gathered by WCD stronglyconfirms the view that there is a systematicbias towards underestimation of the capitalcosts of large dams.11 Aggregating all theaforementioned samples yields an averagecost overrun for all 248 dam projects of justover 50% (or 40% without the dams fromthe IRN list and the Indian Cross-Check).The implication is that large dams haveperformed poorly relative to budgetary targets.

Poor prediction of inflation is often animportant component of these overruns. Asa consequence, when the figures are adjust-ed for inflation, the overrun in terms of thereal economic costs of the materials andresources used is likely to be lower than thatreported here.12 For the 81 largedams in the Cross-Check sub-sample the cost overrun asmeasured in constant 1998 dollarterms came to 21%, a significantdrop from the 56% cost overrunobtained in current dollarfinancial terms, but still largeenough to significantly affect theeconomics of these projects.

Project implementationschedules

A second important indicator of perform-ance during the implementation phase of alarge dam project is the extent to whichproject time schedules are met. Delays inthe date at which a project is commissionedlead to increases in interest accumulated onfunds borrowed for construction activitiesand to delays in revenues accruing to theowner from the completed project.13 Forconsumers, delays mean additional periods ofnot being served with electricity or water.Delays thus affect the delivery of benefits, aswell as the financial and economic perform-ance of a project.

Delays in commissioningprojects affect thedelivery of services,increase interestpayments and delayrevenue generation.

Chapter 2


The WCD Knowledge Base suggests amarked tendency towards schedule delaysfor large dam projects compared with theplanned time to implementation. Of the 99projects included in the analysis of projectschedule performance in the Cross-CheckSurvey, only half the projects came in onschedule (see Figure 2.3). Approximately30% of the other half were delayed for oneor two years, and about 15% were delayedbetween three and six years. Four projectswere delayed more than 10 years.

The WCD Case Study dams also display arange of results in achieving project sched-ules. Stage 1 of Kariba dam came in onschedule, whereas Tarbela took two extrayears to finish and Aslantas four. Followingthe initiation of construction in the late1970s, financing difficulties led to a nine-year delay in the case of Tucurui. This led tomuch higher than expected payments ofinterest during construction. Not countinginterest the cost overrun was 51% but thisrises to 77% once the comparison includesactual and predicted interest costs. Other

factors that can lead to schedule delays arelate delivery to the site of essential equip-ment, unrealistic construction schedules,contractor and construction managementinefficiencies, labour unrest and protests andlegal challenges by affected groups.

The existing literature on large dams andrelated projects confirms this finding: largedams tend to be subject to significantschedule slippages. A recent study of WorldBank financed hydropower projects reports a28% delay on average. While this is aconsiderable slip, it is no different than thatrecorded in the same study for thermalpower projects (30%).14

Irrigation DamsLarge dams and irrigation projects are anested set of sub-systems involving the damsas source of supply, the irrigation system(including canals and on-farm irrigationapplication technology), the agriculturalsystem (including crop production processes),and the wider rural socio-economic systemand agricultural markets.

Potential performance indicators for largedam irrigation projects include:

■ physical performance on water delivery,area irrigated and cropping intensity;

■ cropping patterns and yields, as well asthe value of production; and

■ net financial and economic benefits.15

Large irrigation dams in the WCDKnowledge Base have typically fallenshort of physical targets, failed to recovertheir costs, and been less profitable ineconomic terms than expected. Thesecondary benefits of irrigation projectswere rarely specified as targets (these arediscussed later, in Chapter 4).

48444036322824201612

840

Num

ber

of d

ams

50%

40%

30%

20%

10%

0%


Years behind or ahead (-) of project schedule

-1 0 1 2 3 4 5 6

Perc

enta

ge

of d

ams


Figure 2.3 Project schedule performance



Irrigated area and croppingintensity

Irrigation components of large dam projectsin the WCD Knowledge Base fell well shortof targets in terms of development of com-mand area (and infrastructure), area actuallyirrigated, and to a lesser extent the intensitywith which areas are actually irrigated. Withrespect to the achievement of commandarea targets, the Cross-Check Surveydemonstrates a general pattern of under-achievement, with almost half of the 52dams in the sub-sample falling short of theplanned target (see Figure 2.4).16 Poorperformance is most noticeable during theearlier periods of project life, as the averageachievement of irrigated area targets com-pared with what was planned for eachperiod increased over time from around 70%in year five to approximately 100% by year30 (see Figure 2.5). Nevertheless, a charac-teristic pattern observed in the sample isvariability of performance between projects.In particular, one-quarter of the projects

achieved less than 35% of their targetirrigation areas during the first five years.

The 52 projects in the survey sub-samplelikewise underachieve in terms of cropping

200

175

150

125

100

75

50

25

0

Irrigation sub-sample

Years from start of commercial operation

% A

ctua

l to

pla

nned

20(n=23)

1 case2 cases3 cases4 cases5 cases6 cases

Fit line

100% Target

10(n=34)

30(n=13)

40(n=6)

0(n=no. of dams)

bel

ow

tar

get

abo

ve t

arg

et

Figure 2.5 Actual irrigated area compared to planned targets over time


22

20

16

12

8

4

0

Num

ber

of d

ams

35%

30%

25%

20%

15%

10%

5%

0%

Irrigation sub-sample: 52 dams

% actual maximum command area achieved to planned target

Perc

enta

ge

of d

ams

below target above target

0-49

50-7

475

-89

90-9

9

100-

109

110-

124

125-

149

>150

Figure 2.4 Achievement of command area


Chapter 2


intensity targets. However, cropping intensi-ty performance comes closer to targets thanirrigation area development.17 Less thanhalf of the projects in the sub-sampleconsistently achieve or exceed plannedcropping intensities from year one of irriga-tion. Of the remainder, 20% achieve lessthan three-quarters of targets and the other40% fall between 75 and 100%.

With regard to cropping intensity there islittle difference in the average values forsingle and multi-purpose dams in the survey.Actual values of maximum irrigated areaachieved by single-purpose irrigationprojects are consistently better on averageby a margin of around 10%. Single-purposeirrigation schemes also show more of aspread in the values around the average,with one-quarter of the 21 single-purposeprojects achieving more than 115% ofplanned targets.

When compared with larger projects in thesurvey, dams with heights less than 30 metersand reservoir areas of less than 10 km2

tended to be closer to the predicted targetsand demonstrated less variability for com-

mand area development, actualirrigated area and actual cropintensity. All projects below90% of area and intensitytargets were larger than 10 km2

and higher than 30 meters.

The WCD Case Studies corrob-orate the results of the Cross-Check Survey and display asimilar breadth of results with

respect to irrigation area and croppingintensity targets. In the case of GrandCoulee, commissioned in 1941, only abouthalf of the predicted area in the ColumbiaBasin Project was eventually developed; the

same can be said of the Gariep dam on theOrange River in South Africa. As Tarbeladam is an integral part of the Indus BasinIrrigation System (IBIS), it is not possible tospecify the achievement of area targets.However, the amount of water released forirrigation from Tarbela has exceeded predic-tions by 20% over its 25-year life. This ismainly due to a lower-than-expected rate ofreservoir sedimentation. Shortfalls of 9 to60% in achieving cropping intensity targetsare observed in the provinces of Punjab andSindh. Meanwhile, the India Case Studyreports that the level of under-utilisation ofirrigated areas is between 13 and 25%.

In the case of the Aslantas dam in Turkey,96% of the irrigated area was developed bythe end of the implementation period, butthis has now fallen to 87% due to theconversion of agricultural land to urban andindustrial purposes. Additional irrigationarea foreseen under the original basin planhas subsequently been implemented throughother projects, although delayed fromoriginal projections. Cropping intensity hasincreased from 89% to 134% of the target,but such figures mask a return to growingwheat, a crop that requires little irrigationin Turkey.

The under-achievement of targets forirrigated area development from large damshas a number of causes. Institutional failureshave often been the primary causes, includ-ing inadequate distribution channels, over-centralised systems of canal administration,divided institutional responsibility for mainsystem and tertiary level systems, andinadequate allocation of financing fortertiary canal development. Technicalcauses include delays in construction,inadequate surveys and hydrological assump-tions, inadequate attention to drainage, and

When compared withlarger projects in the

survey, dams withheights less than 30

meters and reservoirareas of less than

10 km2 tended to becloser to the predicted

targets



over-optimistic projections of croppingpatterns, yields and irrigation efficiencies,including the late realisation that someareas were not economically viable. Also, amismatch between the static assumptions ofthe planning agency and the dynamicnature of the incentives that govern actualfarmer behaviour has meant that projectionsquickly became outdated.

Performance data on irrigation projects asreported elsewhere support the originalfindings of the Commission, although theseare not solely linked to large dams. An ADBevaluation of 35 irrigation projects foundactual cropped areas generally at 60–85% ofappraisal estimates, with only four exceedingtargets.18 A World Bank study of sevenirrigation projects found all but one withcrop intensities less than expected (in therange of 65–91%, with one at 107%).19 A1990 evaluation by the World Bank of 21irrigation projects 5–12 years after comple-tion showed that irrigated area had fallen in11 of the projects and that cropping intensi-ty was lower than at completion in 18 of theprojects (at 85%).20

Cropping patterns, yields,agricultural production, andgross value of production

Crop yields and the gross value of produc-tion from large irrigation dams in the WCDKnowledge Base have often varied signifi-cantly from those predicted at the outset ofthe projects. Lower yields are often observedfor crops specified in planning documents –which emphasise food grain production forgrowing populations – than for the cropsactually selected by farmers. This occurs asfarmers respond to the market incentivesoffered by higher-value crops – eitherseasonal or longer-term orchard-based crops– and allocate available resources to these

crops. This implieshigher-than-expectedgross value of produc-tion per unit of area,with the caution thatsuch increases havevaried with the long-term real price trendof the relevantagricultural commodi-ties. But when chang-es in cropping pat-terns are combined with shortfalls in areadeveloped and cropping intensity, the end-result is often a shortfall in agriculturalproduction from the scheme as a whole.Gross value of production is higher wherethe shift to higher-value crops offsets theshortfall in area or intensity targets.

The WCD Case Studies provide examples ofboth underestimation and overestimation ofthe quantity and value of agriculturalproduction. In the case of the ColumbiaBasin Project, yields have been 30–50%higher than predicted in planning reports in1932. Partly because of a shift to higher-value crops, the gross monetary value ofactual agricultural production per unit ofarea almost doubled from that anticipated atthe time. For example, the area planted tofruit and vegetables in 1992 was 60%compared to 20% thirty years earlier. Yieldsof fodder and cereal crops also increasedsignificantly due to improved varieties andmechanisation.

Similarly, in the case of the Aslantas dam inTurkey, the cropping pattern changeddramatically from that planned – partlyretaining the staple wheat crop and growingsecond high-value crops such as soybean,rather than cotton as predicted. Yields ofwheat and cotton reached 75% of predic-tions, while watermelon and maize exceeded

Chapter 2


targets by 50–100%. Overall, the grossmonetary value of agricultural productionreached 71% of that predicted. In the caseof Tarbela, yields of wheat, rice and cottonare between 9% and 50% lower thanpredicted in the feasibility report.

Lower than expected crop yields have beencaused by agronomic factors, includingcultivation practices, poor seed quality, pestattack and adverse weather conditions, andby lack of labour or financial resources.

Physical factors such aspoor drainage, uneven orunsuitable land, ineffi-cient and unreliableirrigation application,and salinity also hinderagricultural production(see below). The effi-ciency of water useaffects not only produc-tion but also demandand supply of irrigatedwater (see Box 2.1).

An important cause ofthe difficulties in achiev-ing targets for gross valueof production is the

decline in commodity prices. For example,in real terms, world prices for grains in the1990s were of the order of half those in the1950s. Although there were significantannual variations, the average price of ricefrom 1950 to 1981 was $850/ton (in 1997prices), compared with $350/ton from 1985to date.21 Wheat prices have shown asimilar decline, but less severe ($330/tonfrom 1950 to 1981 in 1998 prices, comparedwith $140 from 1985 to 1999).22 Theobserved fall in prices stems in part from theincrease in food production that was spurredby irrigated agriculture and the GreenRevolution, but also from production

subsidies and other incentives used by manycountries to support agriculture. This fall inprices has contributed to lowering the value ofproduction achieved as against predictions.

A general pattern of shortfalls and variabilityin agricultural production from irrigationprojects in developing countries is alsorevealed by other sources. In the 1990World Bank OED study on irrigation citedearlier, 15 of 21 projects had lower thanplanned agricultural production at comple-tion. Evaluations of 192 irrigation projectsapproved between 1961 and 1984 by theWorld Bank indicated that only 67% per-formed satisfactorily against their targets.23

Financial and economicprofitabilitySince the 1930s in the industrial countriesand from the 1970s in developing countries,financial and economic profitability havebecome an important, if not the dominant,decision criteria in water projects.24 Conse-quently, approval of many large damprojects was contingent upon estimates oftheir predicted profitability. The measurestypically used to assess profitability are thefinancial internal rate of return (FIRR) andeconomic internal rate of return (EIRR) asdetermined through cost-benefit analyses.The FIRR tells the project owner if theproject is profitable, while the EIRR isintended to tell society if the project im-proves the overall economic welfare (orwell-being) of the nation. Under-perform-ance relative to targets does not necessarilyimply that a project is unprofitable ineconomic terms, as the rate of return of aproject may fall short of its target but stillexceed the opportunity cost of capital to theeconomy.

Typically, an EIRR of over 10% is judgedacceptable in the context of a developing

Surface irrigation systems of the typesupported by large dam projects havetended to use water inefficiently. Surfacewater irrigation efficiency is in the range of25-40% in India, Mexico, Pakistan, thePhilippines and Thailand; 40-45% inMalaysia and Morocco; and 50-60% inIsrael, Japan and Taiwan. The AslantasCase Study suggests that the overallirrigation efficiency of the Aslantas projectis 40%. These examples suggest that theratio of water consumed by crops to thewater delivered from the source variesfrom 25-60%.

Sources: WCD Thematic Review IV.2Irrigation Options, Chapter 3; WCD

Aslantas Case Study

Box 2.1 Efficiency in the use ofirrigation water



economy.25 On this basis, irrigation damprojects in the WCD Knowledge Base haveall too often failed to deliver on promisedfinancial and economic profitability – evenwhen defined narrowly in terms of directproject costs and benefits.

Given the lack of evaluation studies onlarge dams for irrigation purposes, the WCDcompiled financial and economic perform-ance data from a series of project appraisal,completion, and audit reports on large damprojects funded by the World Bank andADB (see Figure 2.6).26 The average EIRRat appraisal for the 14 irrigation dams wasslightly above 15%, and at evaluation it was10.5%, a significant shortfall in economicperformance for the group. Whereas 12projects had expected returns of over 12% atappraisal, this number had fallen to five byevaluation. In four cases, the EIRR at evalua-tion fell below the cut-off rate of 10%.

The results extracted from the ADB andWorld Bank reports are of course based onlyon evaluation studies undertaken at comple-tion of the implementation phase or just afew years after commissioning. They incor-porate the effects of cost overruns and initialoperating results, but are not long-term orcomprehensive in nature. They typicallyonly consider the direct project costs andbenefits of the project and do not accountfor the social and environmental impactsassociated with the dam or agriculturalproduction. In the case of the ColumbiaBasin Project, even a cursory analysis of thelong-term performance data available fromthe WCD Case Study which shows that thelarge cost overruns and lower-than-expecteddelivery of benefits raise questions about theeconomics of the project (see Box 2.2).

In post-evaluation studies of irrigation andrural development projects by the World

The Columbia Basin Project (CBP) was never expected to cover its costs, andwas criticised by early opponents because it would not be economicallyprofitable. Yet the WCD Case Study reports that a $2 150/ha increase inassessed land values has occurred for irrigated land within the project area.When applied to the 268 000 hectares under cultivation, the capitalisedincrease in the value of the land would be $575 million in 1998 dollars. Even ifthe full value of this increase was due to the CBP alone, it is clear that it wouldnot come close to the real cost of the CBP of $3.6 billion, as reported in theCase Study.

A better approach to assessing the project is to compare the present value ofcosts of the project with the benefits. The Case Study calculated the presentvalue of CBP costs at $1.47 billion at a 10% discount rate.27 Two simpleassumptions may be used to generate a best-case estimate of benefits. First,the full value of the average net production value of $500/ha per year asreported by a recent study of the CBP is attributed to irrigation (that is as areturn to irrigated water and not other farming or capital inputs). Second, thesebenefits are considered to occur for all years since 1945 (project start-up) and toall of the 268 000 hectares. The resulting net present value of benefits from1945 to 2010 at 10% discount rate is $1.32 billion. Note that the assumptionsmade are generous, given that actual acreage and gross value of productionincreased only gradually over time, and thus the actual magnitude of earlyeconomic benefits would have been considerably less. In addition, theopportunity cost of water diverted to the CBP of $39 million per year is left outof the calculation.

As the benefits are less than the costs, the results suggest that the CBP did notachieve a 10% rate of return (when measured on an incremental basis, that isapart from the Grand Coulee dam (GCD)). While this simplistic analysisprovides just an indication of possible returns from the project, it illustrates thetype of information provided by ex-post evaluation of economic profitability.Further, it demonstrates the concerns raised about multi-purpose projects,where the irrigation component fails a cost-benefit test. Would the UnitedStates economy have been better off investing only in GCD – and using therevenues from GCD to invest in other profitable opportunities in the economy –rather than reinvesting the profits in the CBP?28

Source: calculations based onWCD Grand Coulee Case Study

Box 2.2 Economic and financial performance of the Columbia BasinProject

Num

ber

of p

roje

cts

Note: Total number of projects reviewed is fourteen

Economicinternal rate ofreturn

12%+

<12-10%

<10-5%

<5%

At appraisal At evaluation

14

12

10

8

6

4

2

0

Source: WCD Thematic Review III.1 Economic Analysis, Chapter 10.

Figure 2.6 Economic performance of multilateral-financed irrigationdams

Chapter 2


Bank and the ADB, half the projects werejudged as unprofitable in economic terms,that is having EIRRs of less than 10%. Morethan three-quarters of the projects returnedless than expected at appraisal. In fact, theaverage of the EIRRs for the World Bankirrigation projects was 17.7% at appraisal.At completion, this dropped to 14.8%, andat the time of impact evaluation – typicallysix to eight years after completion – theEIRRs had fallen to 9.3%. This rather strongdownward trend indicates that many irriga-tion projects – not just large dams projects –suffer from a tendency to overstate projectreturns at the outset, also referred to as‘appraisal optimism.’29

Cost recovery

Public agencies have not always attemptedto recover costs associated with publicinfrastructure projects. Where the services

provided by large dams are valued as con-sumption goods or productive inputs, theabsence of cost recovery by the sponsoringagency is often equivalent to a subsidy inthe sense that the large dam project pro-vides a benefit for which no fees are paid.Which participants in large dam projectsreceive these subsidies is examined furtherin Chapter 4. A lack of cost recovery is notjust a matter of subsidy, however. Provisionof free services and subsidised inputs oftenleads to misallocation of resources andinefficient production. Further, it may leadto perverse behaviour as people direct theirefforts to obtaining such subsidies (rent-seeking behaviour) rather than productiveactivities.

The analysis here assesses the extent towhich cost recovery is an explicit objectivein large dam irrigation projects, and theextent to which it has met expectations or,if cost recovery was not anticipated, theextent to which it has occurred in anyevent. Not surprisingly, recovery of capitalcosts for irrigation has rarely been a targetand is even more rarely achieved. Perform-ance in recovering operational and mainte-nance (O&M) costs is typically poor,although increasing recognition of theimportance of recovery to performance ledto institutional innovations that increasedcollection of O&M charges in the 1990s.

Recovery of operational andmaintenance costs

There was mixed performance on therecovery of O&M costs in the three WCDCase Study dams that involved irrigation. Inthe case of the Aslantas dam, recovery ofcosts was expected but only made progressafter 1995 with the adoption of a water userassociation (see Box 2.3). In the Indus BasinIrrigation System, where the Tarbela Dam

In negotiations leading up to the Aslantas dam project, the World Bank wasassured that arrangements would be made for recovering O&M costs for thedam and irrigation systems, capital costs for the dam and irrigation system(over 50 years), and on-farm development costs (over 15–20 years). An annualrecovery charge of TL 1 250 per hectare to cover the first two items wasproposed in the 1972 appraisal by the World Bank, and assurance was receivedthat this would be reviewed every five years, when the rates would be adjustedfor inflation. This comes to roughly $350 per hectare in 1998 dollars and wouldhave represented half of the expected farming profits per hectare as estimatedat appraisal. Even under such a repayment program, the Bank estimated thatfarmers would pay back only about one-quarter of the total capital and O&Mcosts.

Actual recovery of capital costs appears to have fared quite poorly. The capitalcost recovery charge rate was increased in 1981, 1982 and 1986. Due to rapidlocal inflation and subsequent devaluation of the Turkish lira, however, the TL7 500 charge set in 1986 came to just $0.03 per hectare in 1998. Collectionrates have been a continual problem. In 1984, the collection rates on assessedcharges for capital costs were only 63% at which time penalties were intro-duced. More recently, the WCD Case Study suggests that the transfer of O&Mresponsibilities to the local water user association in 1995 resulted in greatlyincreased recovery of annual O&M costs. Indirect cost recovery for the sectoras a whole in the form of a withholding tax of 5% on agricultural sales wasinstituted country-wide in 1981, yielding on average $93 of revenue per hectareof agricultural holding. Still, the project has a very low rate of capital costrecovery and has not come close to the 25% recovery agreed at appraisal.

Source: WCD Aslantas Case Study;World Bank, 1973; World Bank, 1985.

Box 2.3 Cost recovery for the Aslantas Dam



plays a pivotal role, revenues from irrigationfees basically covered operation and mainte-nance costs up until 1970. Subsequently,revenues have declined, and the gap be-tween O&M expenditure and recoveriesreached 44% by 1992 in Punjab and 30% inSindh. At the same time, an increasingproportion of the revenues was beingallocated to agency costs as opposed tomaintenance activities.

A similar situation occurs in India, wherethe gross receipts from irrigation charges areconsiderably less than the recurrent costs ofO&M. In the 1960s receipts coveredexpenditures, however, by the end of the1980s receipts were only of the order of 10%of expenditures.30 Annual operationallosses became a huge fiscal liability, withannual operational losses exceeding $1billion by the mid-1990s. The water chargescollected represent about 2% of the incre-mental benefits of irrigation.31 In theColumbia Basin Project, irrigators pay onlya very small portion of the costs of pumpingwater into the CBP system and nothing forthe water itself – which has a large opportu-nity cost in terms of foregone hydropowerproduction at Grand Coulee.

The information gathered by the WCD onO&M cost recovery is confirmed by theliterature in this field. A survey done since1992 of 18 irrigation systems worldwideshows considerable variation of recoveryrates, with public agency systems in therange of 30–50% and some locally managedsystems reaching full cost recovery.32 The1990 evaluation by the World Bank reportsthat in 11 of 21 cases, recovery rates weretoo low to cover irrigation O&M costs. InMexico, water user associations have provedeffective in improving cost recovery andmanagement.33

Recovery of Capital Costs

The tendency to poor finan-cial and economic perform-ance and the failure to recoverO&M costs suggest that evenwhere it is an explicit objec-tive, recovery of capital costswill be limited. The Aslantasdam provides a fairly starkexample of the failure not only to recoverthese costs but also to stick to agreementsmade in this regard (see Box 2.3). In theWorld Bank’s 1990 evaluation report onirrigation projects even the cases of ‘excellent’cost recovery resulted in only partial recoveryof capital costs.

In sum, the assessment of large dam irrigationschemes reveals that while there is considera-ble variability in performance, suchschemes have all too often fallenshort of physical targets and failedto recover their costs in cases wherethat was the intention indicated inthe project document. Further, inmany cases the economic justifica-tion for the approval of the projecthas not been borne out by actualexperience in implementation andoperation due to cost overruns and shortfallsin net benefits of agricultural production.

Hydropower DamsLarge hydropower dams in the WCDKnowledge Base can be divided into threegroups. The first two groups represent theextremes: a number of projects that havegreatly exceeded their targets and a fewnotable under-performers. The bulk ofprojects have delivered power within a closerange of pre-project targets but with anoverall tendency to fall short of targets.Hydropower projects – as with other largedams – have incurred cost overruns and

The bulk of projects havedelivered power within aclose range of pre-project targets but withan overall tendency tofall short of targets.

Chapter 2


schedule delays. Limited available evidencesuggests that hydropower projects oftendiverge substantially from their economictargets, in either a positive or negativedirection. Financial performance is moreconsistent and with less downside variability.Finally, a number of older projects continuegenerating benefits even after a half-centuryor more of operation.

Delivery of services andbenefits

Large dams in the WCD Knowledge Basethat were designed to deliver electric powerhave on average met expectations for thedelivery of power but with considerablevariability, much of it on the downside. Anumber of projects have far exceeded theirtechnical, financial and economic targets,whereas others have fallen well short.Delivery of services and benefits are exam-ined by assessing performance to targets forinstalled capacity and delivery of power.Hydropower also offers ancillary services tothe power grid.

In contrast to irrigation, the hydropowerperformance of 63 large dams in the WCDCross-Check Survey was on average closerto target (see Figure 2.7). But as withirrigation dams, the variance in performanceacross the projects was extremely large (seeFigure 2.8). On average, almost half of thesample exceeded the set targets for powergeneration – with about 15% exceedingtargets by a significant amount. It also showsthat around one-fifth of the projects in thesample achieve less than 75% of the plannedpower targets. Aside from these markedextremes, Figure 2.7 shows that over half ofthe projects in the sample fall short of theirpower production targets. Thus averageperformance in the sample is sustained by afew over-performers and should not maskthe variance in performance that is weight-ed towards shortfalls in power delivery.

The higher-than-expected output in hydro-power generation from almost half of thelarge dam projects in the Cross-CheckSurvey is due only in small part to theaddition of extra installed capacity prior tocommissioning, but more especially sincecommissioning. One-quarter of the largedams with higher-than-expected output hadinstalled more than 100% of the capacityplanned in the feasibility study.

The Tucurui dam diverged from feasibilitydesign when initial installed capacity wasraised from 2 700 to 4 000 MW beforecommissioning. Tarbela, Grand Coulee, andthe Glomma and Laagen dams have all seensubsequent installation of significantamounts of additional capacity that werenot foreseen at feasibility. Furthermore, bothKariba and Tucurui are multi-stage projectsthat involve doubling of capacity. Theprofiles of hydropower performance of theCase Study dams in Figure 2.9 illustrate howinstallation of more than initially expected

201816141210

86420

Num

ber

of d

ams

30%

25%

20%

15%

10%

5%

0%

Hydropower sub-sample: 63 dams

Averages of actual to planned percentages per project

Perc

enta

ge

of d

ams


0-49

50-7

475

-89

90-9

9

100-

109

110-

124

125-

149

>150


Figure 2.7 Project averages for actual versus planned hydropowergeneration



capacity leads to higher-than-expectedpower output (Grand Coulee and Tarbela).

However, energy output is often also lowerthan initially estimated. The Victoria damin Sri Lanka had a predicted energy genera-tion of 970 GWh/annum, but in reality onlyproduces an average of 670 GWh, a shortfallof over 30%.34 Higher-than-expectedupstream irrigation abstractions and lower-than-predicted natural stream flows werethe causes in this case. Case Study resultsfrom Pak Mun, which is a run-of-riverproject with peaking capacity, showed thatin the first four years of operation after 1994the installed capacity and total annualenergy generation were as expected. Howev-er, the ability of the project to deliverenergy for its primary purpose of a plannedfour-hour peak period was considerably less

than expected in the dry season, leading toquestions regarding its economic viability(as discussed below).

Further analysis of the Cross-Check datareveals that the average generation in thefirst year of commercial operation is 80% ofthe targeted value for large hydroelectricdams (see Figure 2.8). In years two to five,the average percentage realisation of targetsrose to near 100%, however this improve-ment in the average for any time periodmasks considerable variation in the sub-sample with half or more of projects stillfalling short of predicted power generation.Delays in the construction phase of projects(as documented earlier), in reservoir filling(if low rainfall prevails), and in installingand bringing turbines on-line explainshortfalls in performance in the early years

300

275

250

225

200

175

150

125

100

75

50

25

0

Hydropower sub-sample

% a

ctua

l to

pla

nned

100% Target


1(n=no. of dams)

Fit line

1 case2 cases3 cases4 cases5 cases

bel

ow

tar

get

abo

ve t

arg

et

5(n=55)

10(n=51)

15(n=41)

20(n=33)

25(n=24)

30(n=16)

Figure 2.8 Actual versus planned hydropower generation over time


Chapter 2


Figure 2.9 WCD case study hydropower performance: capacity and power generation

Year Year

Year Year

Year Year

TarbelaPredicted versus actual generation

TWh

1975 1980 1985 20001990 1995

Actual

Predicted

20

15

10

5

0

TarbelaPredicted versus actual installed capacity

GW

1975 1980 1985 20001990 1995

ActualPredicted

5

4

3

2

1

0

KaribaPredicted versus actual installed capacity

MW

1960 1970 1980 20001990

Actual

Predicted

1500

1250

1000

750

500

250

0

KaribaPredicted versus actual generation

TWh

1960 1970 1980 20001990

Actual

Predicted

10

8

6

4

2

0

Grand CouleePredicted versus actual generation

TWh

1940 1960 1980 2000

Actual

Predicted

30

25

20

15

10

5

0

Grand CouleePredicted versus actual installed capacity

GW

1940 1960 1980 2000

Actual

Predicted

8

7

6

5

4

3

2

1

0

Source: WCD Grand Coulee, Kariba and Tarbela Case Studies.

of commercial operation. Delays in install-ing capacity and subsequent delays inmeeting power targets are noted in two casestudies (Tarbela and Kariba). Tarbela met

and exceeded predicted levels in 1992,which coincided with the commissioning ofthe full complement of planned capacity(see Figure 2.9).



The WCD Case Studies show that unex-pected events and design changes during theproject development stage may lead todelays in achieving power generationtargets. For example, Tarbela experiencedmajor structural damage in commissioningtrials that led to a two-year loss of powergeneration, and in South Africa the deci-sion to increase power generation by in-creasing the height of the Van der Kloofdam delayed its commissioning. Wheredelay is not the result of slower than expect-ed growth in demand for power, such delaysin reaching targets may have importantconsequences for providing power to con-sumers and securing early economic benefitsfrom a project.

A further observation on timing of powerdelivery from the Cross-Check Survey is theconsistency in the distribution of the sampleover the period surveyed (see Figure 2.8).The WCD Case Studies provide a series ofexamples (Grand Coulee, Tarbela, andTucurui) in which power output from verylarge dams increases over long periods (inabsolute terms and relative to predictions).Power production at Grand Coulee, forexample, has trended upward for the last 60years – though marked by significant inter-annual variability (see Figure 2.9).

This variation in power production overtime within a single project is noted in theWCD Cross-Check Survey and additionalCase Studies. Normal variations in weatherand river flows dictate that virtually allhydroelectric projects will have year-to-yearfluctuations in output. The effect of droughtyears can be easily seen in the large swingsin annual power generation from GrandCoulee and Kariba, particularly over the lasttwo decades. Whether changes in regionaland global climate are exacerbating normalweather-related interannual variation remains

to be seen. Such variation mayalso reflect changes in otherdemand and supply factors.

Technical efficiencyand ancillary services

The Glomma and Laagen andGrand Coulee Case Studiesillustrate how unplannedimprovements in generation were achievedby a combination of factors such as addingnew powerhouses to the same reservoir,adding additional turbines, upgradingexisting turbine and generation equipment,or optimising reservoir operations to im-prove performance.

These experiences of improving the per-formance of hydropower generation over aproject’s life are not confined to industrialcountries. In Nepal, modifications to theintake, provision of an extra desander,dredging the forebay and refurbishing thegenerators/turbines and power house controlsystems at the Trushuli-Devighat hydropow-er station in 1995 improved average annualpower generation by 46% – from 194 to 284GWh a year.35 In other cases the optimisedoperation of reservoirs has led to increasedgeneration during a project’s life.36 Thetrend in the industry inEurope and North Ameri-ca is to optimise reservoiroperations and powerdispatch schedules toimprove performance byusing more sophisticated‘decision-support’ systems(see Box 2.4).

The ancillary servicesassociated with hydropow-er generation – for exam-ple, reactive power genera-tion and fast starting

Since 1987, two hydroelectric plants in thecoastal mountains of British Columbia haveused a computerised decision supportsystem (DSS) to guide weekly reservoirrelease decisions. Studies of 1970–74operations (before the support systembecame operational) showed that the rule-curve-based operation had produced 83%of the maximum attainable energy. Withthe DSS, the actual energy produced eachyear between 1989 and 1993 rose to 100,93, 98, 94, and 96% respectively of themaximum possible.

Source: WCD Thematic ReviewIV.5 Operations

Box 2.4 Optimising operations withthe aid of a computerised decision-support system

Delays in reachingtargets may haveimportant consequencesfor providing power toconsumers and securingearly economic benefitsfrom a project.

Chapter 2


reserve generation – reduce or even deferother investments in the electrical system.

Financial and economicprofitability

Schedule delays, cost overruns and variabili-ty in delivery of power suggest a broadvariation in economic performance forhydropower projects. Further, evidence fromNorth America suggests that the O&Mcosts of hydropower rise over time.37

Large hydropower dams in the WCDKnowledge Base confirm that there isconsiderable variability in meeting econom-ic targets and achieving economic profita-bility (when defined narrowly in terms ofproject costs and direct benefits). Unlikelarge dam irrigation projects the variabilityis not only to the down-side, with someprojects performing better than expected.Much less variation is observed in financialperformance relative to targets, although

there is a wide spread in terms of actualfinancial rates of return.

Evidence compiled by WCD from multilat-eral bank appraisals and evaluation studiesshows that although a number of hydropow-er projects fall short of their financial andeconomic targets and can be consideredeconomically unprofitable, others meet theirtargets or even exceed expected profitability(see Figure 2.10). Of 20 World Bank, AfDB,and ADB projects reviewed, 11 fell belowinitial targets and seven rose above thesetargets; overall, nine projects had returnsbelow 10% but only six of the projectsactually fell to this level (the other threealready had low rates of return at apprais-al). These evaluation studies do notreflect long-term performance data, butrather the effect of cost overruns andinitial lags in performance.

The nine evaluation studies that includeddata on financial performance (all from theWorld Bank and ADB) showed much lessdownward variability, with only one projectfalling short of target by a significantamount (namely from 11% down to 6%).Three projects improved their performanceby 5% over expected returns. The resultsmay reflect the administrative nature oftariff setting, which enables tariffs to beadjusted to suit the financial requirementsof a project.

Long-term data gathered by the Commis-sion through the Case Studies illustrates therange of profitability actually achieved byhydropower projects. Indeed, three of theCase Studies provide a succinct illustrationof projects that are superlative, respectable,or borderline in terms of profitability. Afourth demonstrates how a project may beapproved, but in the end fall short in termsof profitability.

Note: Total number of projects reviewed is twenty

16

14

12

10

8

6

4

2

0At appraisal At evaluation

Economicinternal rate ofreturn

12%+

<12-10%

<10-5%

<5%

Num

ber

of p

roje

cts

Figure 2.10 Multilateral bank evaluation results on the economicperformance for hydropower dams

Source: WCD Thematic Review III.1 Economic Analysis, Chapter 10.



The financial and economic performance ofGrand Coulee as a stand-alone hydropowerproject can only be described as superlative(see Box 2.5). Further, after 60 years ofoperation it shows no sign of slowing down.In the case of the Kariba dam, the CaseStudy reports on a cost-benefit calculationthat took the original economic assumptionsand developed both predicted and actualEIRRs. Based on 40 years of operating data,and including the cost overruns under thesecond stage of the project, the actual EIRRis a respectable 14.5%, down from the16.5% calculated for the project as planned.

In the case of Tucurui dam, the project wasplanned under a military dictatorship andthere was little concern during planning foreconomic profitability or cost recovery. TheWCD Case Study suggests that the projectis marginally profitable relative to theconsumer price of electricity, but this omitsthe costs of transmission and distribution(see Box 2.6). Perhaps the simplest observa-tion is that had the project met its originalcost target it would have produced, infinancial terms, low-cost power. However,the large cost overrun – $3.3 billion morethan expected – effectively erased thecompetitive advantage that the site mayhave had. Further, the relatively high unitcost of electricity from the facility and thesubsidies to industry established at commis-sioning imply a failure to recover costsdirectly, as the operating utility continues torequire state subsidies.

In the case of Pak Mun, installed hydropow-er capacity and generation have met actualtargets for the few years of operations to thispoint. However, the WCD Case Studysuggests that the failure to produce a firmsupply of peaking power during low flowmonths implies that the alternative thermal

power plant capacity used inthe appraisal of the project wastoo generous. The Case Studygoes on to value the benefits ofPak Mun based on the avoidedcosts of the alternative. Thelarge reduction in the alterna-tive power plant from 150 MWgas turbine to a 21MW gasturbine when combined withthe 68% cost overrun reduces the EIRRfrom 12.1% to 7.9%, which is below theopportunity cost of capital in Thailand. It isworth noting that this calculation simplydemonstrates that the energy supplied byPak Mun could have been supplied in amore inexpensive fashion, for example byusing the 21 MW gas turbine and secondarypower from other plants.

Few formal and comprehensive post-evalua-tions of the financial and economic profita-bility of large hydropower dams exist forcomparison with the WCD analysis. Despite

Financial profitability. Profitability of the Grand Coulee dam (GCD) was not anexplicit objective. Still, even at a real tariff of $0.02/kWh the GCD will havegenerated real revenues of around $15 billion over the last 50 years. These canbe compared with real project costs of $5.7 billion. While the inclusion ofoperating costs and discounting would reduce this gap, it seems that GCD isquite profitable in financial terms.

Economic profitability. No cost-benefit analysis was undertaken in the 1932Butler Report. Prior to installation of the third power plant, an analysis by the USBureau of Reclamation, yielded a benefit-cost ratio of over 3:1. When the costoverruns on the third plant are accounted for in the calculation, the benefit-costratio drops – but at 2:1 it still indicates that the plant would remain a veryprofitable undertaking.

Economic efficiency. The current operating costs of GCD compare favourably(more than 17 times less expensive) with next best current alternatives. This isbest stated in terms of today’s decision to continue producing power from GCD.Compared with natural gas at $25 MWh, current production levels of 20 000–25 000 GWhs are responsible for saving $475–600 million a year in real costs tothe economy.

Of course, these figures reflect only the effects of direct project costs andbenefits, not the external social and environmental impacts of the project.

Source: WCD Grand Coulee Case Study

Box 2.5 Financial and economic performance of hydropower atGrand Coulee dam

Few formal andcomprehensive post-evaluations of thefinancial and economicprofitability of largehydropower dams existfor comparison with theWCD analysis.

Chapter 2


being probably the single largest financier ofdam projects in the post-war period, theWorld Bank did not undertake a dam-specific review of its portfolio until the mid-1990s. Even then its 1996 OED study didnot draw on actual performance of the damsin its sample and provides little evidence oneconomic performance.38 The AfricanDevelopment Bank recently reviewed itsexperience with six hydroelectric dams andfound that only four passed the economicviability test using a 10% discount rate.39

Thus the WCD Knowledge Base shows thata considerable number of hydropowerprojects fall short of their initial economictargets, although only a smaller number canbe classified as economically unprofitable(falling short of the rate of return target forthe economy as a whole). Meanwhile thereare almost as many projects in the Knowl-edge Base that actually outperform theireconomic targets. Finally, it is worth empha-sising that cost recovery has not been asubstantial problem for hydropower projects;indeed, the focus is more on profitability inthe current context of trends towardsprivate-sector participation in electric powerproduction.40

Water Supply DamsWater supply dams in the WCD KnowledgeBase have generally fallen short of intendedtiming and targets for bulk water deliveryand have exhibited poor financial costrecovery and economic performance. Theseresults reflect the longer developmenthorizon of such dams, as well as over-estimates of demand, and are similar to thegeneral direction of results in the watersupply and sanitation sector.

Delivery of bulk water supply

The Cross-Check Survey found that one-quarter of the 29 dams with a water supplyfunction have delivered less than 50% oftarget. Furthermore, on average 70% of thesample did not reach their targets over timefor the delivery of bulk water supply (seeFigures 2.11 and 2.12). Much of the overallsample variability is due to the multi-purpose, single-purpose distinction inconjunction with reservoir size. The datasuggests that all delivery of bulk water inexcess of planned targets can be ascribed tomulti-purpose dams. This is contrary toperformance trends for other purposes wheresingle purpose dams generally come outbetter. Regarding reservoir size, it is clearfrom the survey that the smaller the reser-voir area, the closer to target results havebeen – with the exception of the 11 reser-voirs larger than 100 square kilometres.These very large reservoirs exhibit extremevariability, ranging from under-performanceto considerable over-performance anddelivering maximum achieved bulk watersupplies up to 2.5 times planned targets.

The principal message with regard to watersupply emerging from the Case Studies isthat even when it is not planned, demandfor water supply from dams built for otherpurposes emerges over time. In the case of

The Tucurui dam is a single-purpose hydropower facility developed andoperated by Eletronorte, the public utility for electricity in the north of Brazil.The WCD Case Study calculates generating costs at $40–58/MWh (for 8% and12% discount rates). Of the total power produced in 1998 by Tucurui dam, abouthalf (12 000 GWh) went to industry at a price of $24/MWh – from $16 to $34/MWh below cost. Using these below-cost sales figures as an indication of thesubsidy provided to industry yields a range from $190 million per year (for thecost at 8%) to over $400 million (at 12%). Eletronorte calculates its annual subsidyfrom the public purse in 1998 at $194 million, and Tucurui is the largest ofEletronorte’s projects. Failing more precise data it appears that Tucurui couldrecover its costs but that to date it may not have achieved this, in part due tocontinued subsidies to industrial producers. Indirect cost recovery throughtaxation of these industries was not documented in the study.

Source: WCD Tucurui Case Study

Box 2.6 Economic performance and cost recovery of hydropower atTucurui dam



Tarbela, water from the river system down-stream of the dam is diverted through irriga-tion canals to Karachi to supplement othersources of municipal water supply. In the caseof the Aslantas, the growth of local districtshas prompted an application to the authoritiesfor the supply of over 400 million litres per dayfrom the reservoir.

The Cross-Check sample showed a tenden-cy towards under utilisation of capacity thatis reflected more generally in a 1994 postevaluation synthesis study of 31 water supplyand sanitation projects by ADB. Theutilisation of capacity varied from 33–80%.Apart from the fact that evaluations werecarried out at early stages in the life of theprojects, a number of causes were suggestedfor low rates of utilisation, including lower

Water supply sub-sample: 29 dams

8

7

6

5

4

3

2

1

0

25%

20%

15%

10%

5%

0%

Num

ber

of d

ams

Perc

enta

ge

of d

ams

Averages of actual to planned percentages per project


0-49

50-7

475

-89

90-9

9

100-

109

110-

124

125-

149

>150

160

140

120

100

80

60

40

20

0

Water supply sub-sample: 29 dams

100% Target

Fit line

1 case2 cases3 cases4 cases5 cases6 cases7 cases


1(n=no. of dams)

5(n=21)

10(n=20)

15(n=16)

20(n=16)

25(n=12)

30(n=8)

% a

ctua

l to

pla

nned

bel

ow

tar

get

abo

ve t

arg

et

Figure 2.11 Project averages for actual versus planned bulk watersupply delivery



Figure 2.12 Actual versus planned bulk water supply delivery over time

Chapter 2


Growing concern over thecost and effectiveness of

large dams and relatedstructural measures as

long-term responses tofloods has led to support

for integrated floodmanagement as opposed

to flood control.

than expected growth in bothpopulation and in per capitaconsumption.41

Financial andeconomic profitability

Single-purpose water supplydams in the WCD Knowledge

Base had poor performance in financial andeconomic terms. Examination of appraisaland evaluation figures for four World Bankand ADB water supply dams show that threeof them dropped from EIRRs above 10% towell below that. As a whole, the EIRRs ofthe group fell by over 6%.

Poor financial and economic performancefor large dams roughly approximates that forthe sector as a whole. A sector synthesis ofpost-evaluation findings from 20 ADB watersupply and sanitation projects found that 18projects had actual FIRRs that failed tomeet projected FIRRs and 17 of these werebelow 10%.42 These types of sectoral resultsare confirmed by other sources. A similarWorld Bank analysis found that almost all of129 water supply and sewerage projectsreviewed had EIRRs below 10%.43

At current rates, water fees are rarelysufficient to recover bothcapital and recurrent costs forwater supply systems in manydeveloping countries. Averagetariffs in an ADB survey rangedfrom very low in Calcutta($0.01 per cubic metre) to$0.66 per cubic metre in Cebu,Philippines. Thirty five of the50 utilities in the survey cov-ered O&M costs through theirtariff collections. The ratio of

billings to O&M costs for 37 utilitiesincreased from 1.03 to 1.12 during 1991 to

1995, indicating an increase in financialviability for recurrent costs.44

Still, a number of studies by the World Bankhave demonstrated that people, even thosewho are less well off in developing coun-tries, are often willing to pay for improvedwater supply services.45 For example, a studyin Nigeria demonstrated that on an annualbasis households pay water vendors overtwice the O&M costs of a piped distributionsystem.46

Flood Control Dams

For centuries societies have built levees andembankments along riverbanks to containand control the effects of floods. Thepurpose has been to occupy floodplains foragricultural, urban, and industrial uses andto reduce any resulting threat to lives andproperty. The WCD Knowledge Basehighlights two very different perspectives onthe past performance of dams in this regard.The first is a narrow focus on the role ofdams in flood control and the second is abroader, more integrated approach to floodmanagement as an objective. Evidence inthe Knowledge Base confirms that whiledams have provided important flood controlbenefits, some dams have increased thevulnerability of riverine communities tofloods. Growing concern over the cost andeffectiveness of large dams and relatedstructural measures as long-term responsesto floods has led to support for integratedflood management as opposed to floodcontrol.

Flood control benefits

Large dams are used to control floods bystoring all or a portion of the flood waters inthe reservoir and then releasing the waterslowly over time. Typically, the principal use

At current rates, waterfees are rarely sufficientto recover both capitaland recurrent costs for

water supply systems inmany developing

countries.



of such dams is to store a portion of theflood in order to delay or manage when thepeak occurs. This minimises the chance ofcoincident peaks from floods in differenttributaries arriving at the same time in themain-stem of the river, reducing the proba-bility of breaching dykes and overwhelmingother flood defences. The main performanceparameter in assessing flood control benefitsis therefore the extent of reduction of theflood peak. Indicators of the benefits derivedfrom flood control include reductions in thearea flooded and prevention of any conse-quent loss of life, social disruption, healthimpacts and property and economic losses.

The Aswan High dam is an example of adam that stores the flood. It can store 1.5times the average annual flow of the NileRiver and has provided a high degree ofprotection to the lower Nile simply byretaining the whole flood. At the sametime the beneficial aspects of naturalflooding – for example restoring thefertility of the floodplain – have been lost,a point returned to below and again inChapter 3.47

Four of the WCD Case Studies provideother additional examples of flood control,although none of these dams were builtprimarily for this purpose. The Tarbela damregulates about 16% of the annual flow ofthe Indus River. Analysis in the Case Studysuggests that the early season flood peak inthe Indus was reduced by 20%, howeverthere was little reduction in the downstreamflow during the late season flood event of1992. Similarly, the reservoirs in the Glom-ma and Laagen basins in Norway regulateabout 16% of the flow in that basin, where20% mitigation in the peak flood level hasalso been achieved. A major flood event inthe Glomma and Laagen basin in 1995prompted a Royal Commission of enquiry.

Extensive studies undertakenat that time confirmed theoperation of the reservoirsreduced the flood peak by 2meters, leading to a correspond-ing reduction in flood emergen-cy relief and compensationpayments required by the state.

For Grand Coulee flood control was not aninitial objective and the inability of the damto control the damaging 1948 flood led tothe construction of more reservoirs inCanada to store snowmelt. Although aprecise breakdown of the individual contri-bution of the Grand Coulee is hard to isolatebecause a whole cascade of dams contribute toflood control in the Columbia basin, estimatesindicate its contribution may be in the orderof $20 million a year.

Other examples in the Knowledge Baseprovide similar indications of the perform-ance of dams in reducing peak flood levels.For example, during the monsoon period in1995, the Nam Ngum River experienced a50-year flood three times in the sameseason. The reservoir absorbed the first twobut was then full. When the third floodoccurred the spillway gates were opened and

Large dams in Japan havedramatically reduced thesudden arrival of floods inpopulated areas where therivers are exceptionallysteep and short, andsusceptible to flash floods.

Japan is one of the top five dam-building countries in the world, and floodcontrol is the major purpose for many dams in Japan. An estimated 50% ofJapan’s population lives in flood-prone areas, and floods have affected 80% ofmunicipalities in the last 10 years. The Chikugo River in the Kyushu District insouthern Japan has a main river channel of 143 km and a catchment area of2 860 km2. A flood in 1953 caused dyke breach in many places, causing greatdamage in the area (147 people dead, approximately 74 000 houses flooded,and one-fifth of the catchment inundated). Matsubara and Shimouke Damswere subsequently built for flood control and power generation. The dams haveperformed well; for example, during a flood in 1982 the Matsubara dam reducedthe peak river discharge 64% from a high of 2 900 to 1 040 m3s.

Source: Berga, 2000, Contributing paper toThematic IV.4 Flood Management Options;

Takeuchi and Harada, 1999: p4.

Box 2.7 Flood protection in Japan

Chapter 2


the water level rose above thefull supply level. Due to theretention effect of the reservoir,the peak of the third flood wasreduced by 20%.48 Large damsin Japan have dramaticallyreduced the sudden arrival offloods in populated areas wherethe rivers are exceptionallysteep and short, and susceptibleto flash floods (see Box 2.8).Delay in flooding provides time

for public warning and evacuation wherenecessary.

Limitations of flood controloperations

There are also clearly problems that emergefrom the operation of large dams for floodcontrol. Some dams have increased thevulnerability of riverine communities tofloods. For example:

■ While rare, dam breaks have and dooccur and usually during exceptionalstorms; when they do, communitiesdownstream are subject to extreme floodsamplified by the dam break.

■ Significant downstream damage tocommunities has resulted where reser-voirs have not been operated properly intimes of emergency or rapidly developingsituations or when floodgates havemechanical failures at critical times.Often communities have adapted to thelevel of protection normally providedand the contingency plans – or theirimplementation – have been inadequate.

There have also been cases where peakingoperation of hydropower stations has causedan unexpected surge of water in the river;lives have been lost when measures to warnpopulations downstream have not beeneffective or heeded. Local flooding can be

caused in a similar fashion when gates areopened to release water at peak rainfallperiods. One such serious incident wasreported in Nigeria where a delay in warninginhabitants led to a flood that overran approx-imately 200 communities, submerging 1 500houses and killing over 1 000 people.49

As shown in the WCD Knowledge Base,flood management may only be needed afew days or weeks in any particular year. Thuslarge dams used for flood control virtuallyalways have another function, such as powergeneration or irrigation. The India Case Studyportrays the potential for conflict betweenflood control objectives for operation of thereservoir (where storage space in the reser-voir is required) and hydropower andirrigation (where it is desirable to store asmuch water as possible). According to theCase Study most of the complaints aboutdams aggravating floods downstream stemfrom this situation. The Case Study goes onto document the lack of co-ordination orreal-time information exchange between theupstream Tenughat reservoir and the opera-tion agencies of the downstream DamodarValley Corporation, which put the down-stream river reach and reservoirs at risk.

Another aspect is that with climate varia-tions, the frequency, duration and intensityof storm events that lead to floods appear tobe changing. If so, there is a risk that achanging climate will modify the hydrologi-cal basis on which many flood control damswere designed. This raises concerns aboutthe physical adequacy of many dams toperform their flood management functions,as well as the adequacy of spillways tohandle higher flood volumes likely in achanged climate. United States dams arebeing reviewed for their flood design and insome cases the spillway capacity is beingincreased.50 The technical literature on

The India Case Studyshows the potential

conflict betweenkeeping space in the

reservoir for floodcontrol and storing as

much water as possiblefor hydropower and

irrigation.



dams is also increasingly focusing on therole of dams in flood management, lookingat both the safety considerations and themeans to improve the flood performance.51

From flood control tointegrated flood management

The Knowledge Base identifies a series ofconcerns over the effectiveness of dams andrelated structural measures as an element ina broader flood management strategyincluding the realisation:

■ that dams have encouraged settlement inareas that are still subject to floods thatexceed the maximum design flood;

■ that the costs of ensuring completeprotection against all floods are excep-tionally high;

■ that the effectiveness of structuralmeasures are reduced over time due tothe accumulation of sediment in riverbeds and reservoirs; and

■ that floods have many beneficial uses indifferent river basins and that theelimination or reduction of naturalflooding has led to the loss of importantdownstream ecosystem functions, as wellas loss of livelihood for flood-dependentcommunities (see next two chapters onenvironmental and social performance oflarge dams).

These concerns indicate the difficulty offully controlling floods and of managing therelationship between floods and people.This underpins the shift to an emphasis onintegrated flood management – that is theneed to set objectives in terms of predicting,managing and responding to floods – ratherthan simply in terms of flood control.

Large dams with a flood control componentmay provide an increased feeling of security,

leading to settlement of flood-prone areas. When the excep-tional flood finally arrives, thereare more people and higher-value property at risk than thereotherwise would have been.Damages may therefore be largerthan if floods had continued tobe normal events within therange of regular experience andawareness.

In the Nam Ngum case referred to earlier,the dam was blamed for a major inundationof downstream agricultural areas despite itsalleviation of two earlier peaks and reduc-tion of the third peak. Since the reservoirhad not spilled for many years people haddeveloped a false sense of security and drainswere not maintained. In the end the flood-waters only dispersed slowly and standingcrops did not survive. Another examplecomes from Poland where the 1997 floodscovered an area only half as large as that in1934 yet three times as many buildings were

Between 1960 and 1985, the United States Federal government spent $38 billionon flood control, mostly on structural responses such as large dams. Yet averageannual flood damage, adjusted for inflation, continued to increase – more thandoubling. Average flood damage in the United States, adjusted for inflation,was as follows:

1903–33: $1.7 billion1934–63: $2.8 billion1964–93: $4.6 billion1994–97: $5.1 billion

The United States Army Corps of Engineers points out that its dams and 8 500miles of levees have saved $387 billion in damages since 1928, but it has nofigures for damages in areas where the Corps’ projects encouraged develop-ment that was later inundated. After the 1993 Mississippi flood, congressionaltestimony pointed to dams and levees as exacerbating the problem. Subse-quently, the Corps has called for more consideration of non-structural floodmanagement methods, including restoration of wetlands and riparian habitat,limits on development in floodplains, and farm policy that discouragesconversion of wetlands to cropland. Likewise, communities from Rapid City,South Dakota, to Valmeyer, Illinois, to St. Charles, Missouri, to Napa, California,have opted to pursue non-structural approaches to alleviate recurring floods.

Source: Schildgen, 1999

Box 2.8 From flood control to flood management in the UnitedStates

Chapter 2


flooded, 38 times as many bridges and 134times more kilometres of road.52

The high cost of flood control and flooddamage in the United States, as well as theemerging shift from a reliance on floodcontrol to an approach based on floodmanagement is described in Box 2.8. Inmany countries reliance on structuralmeasures, including dykes, leads to a need tocontinually invest in additional measures assedimentation decreases their effectivenessover time. For centuries, dykes in Vietnamhave been progressively increased in heightas the river bed gradually rises due to accumu-lating sediments deposited by floods.53 Thesame situation prevails in China, where aftercenturies of raising dykes, the height of thedykes at places on the Yangtze River is over 16metres above the floodplain.54

Multi-Purpose DamsMany large dams fulfil a number of purposeswith a single facility. Multi-purpose projectsin the WCD Knowledge Base display manyof the same performance shortfalls experi-

enced by single-purpose projects and, in anumber of cases, achieved less relative totargets than their single-purpose counterparts.

The WCD Cross-Check Survey shows thatmulti-purpose dams have had a high degreeof variability in achieving physical targetsacross most benefit streams. As indicatedearlier, single-purpose projects in the Cross-Check sub-sample tend to cluster closer toplanned targets for project schedule, hydro-power, and water supply performance thanmulti-purpose dams. The exceptions wereirrigation projects which showed littledifference between single and multi-purposeprojects in variability of performance.

The Cross-Check Survey also suggests thatmulti-purpose projects have higher costoverruns and higher variability in theseoverruns than single-purpose projects. Asmall sample of 12 multi-purpose projectsfunded by the World Bank, AfDB, and ADBexamined by the Commission indicates thatestimates of the EIRR at evaluation wereabout 4% below those projected at appraisal.This figure masks large variability, with fourof the projects moving up and down byalmost 10%.55 In the AfDB’s review of fourprojects, only one was financially andeconomically viable.56

As noted in previous sections, hydropowerprojects tend to perform relatively well infinancial terms while irrigation projectstypically fail to recover O&M and capitalcosts. In practice this has often led to theuse of hydropower facilities in conjunctionwith a project designed for irrigation as away to cover the costs of the irrigationfacility. The WCD Case Study of GrandCoulee dam and the Columbia Basin Projectprovides an illustrative example of the cross-subsidies that often result from such arrange-ments (see Box 2.9).

In the case of the Grand Coulee dam and the accompanying Columbia BasinProject, the intention was for hydropower revenue to subsidise irrigation capitalcosts. The Bonneville Power Administration (BPA), which is responsible for GCD,is charged with paying the United States Treasury for the costs associated withhydropower development (the dam and three powerhouses) plus the share ofallocated irrigation costs not paid by irrigators. These amounts are calculated innominal dollars but include interest. As of 1998, the total capital costs for GCDand CBP came to $1.93 billion. Of this, the BPA has already repaid thehydropower costs of $1.1 billion.

The share of the remaining costs allocated to irrigation is $674 million. The lastportion is for non-reimbursable capital costs such as flood control, as covereddirectly by the United States Treasury. Of the irrigation share, BPA is responsiblefor 87% ($585 million) and the irrigators are to cover the remaining 13% ($89million). As of 1998, irrigators had paid in $51 million (in dollars uncorrected forinflation). BPA is scheduled to make payments on its share of the irrigation costsduring 2009–45. As hydropower revenues from the sale of GCD power comeclose to $500 million, it is clear that the project could easily cover costs undersuch terms.

Source: WCD Grand Coulee Case Study.

Box 2.9 Cost recovery in a multi-purpose scheme: Grand Coulee andthe Columbia Basin Project



In other cases, adding hydropower to anirrigation facility is simply a way of increas-ing the overall economic profitability of ascheme. The design for the Aslantas Damproceeded on this basis. Analysis of theirrigation component as a stand-aloneproject indicated a 13% rate of return. Astand-alone hydropower project was judgednot a least-cost source of power, but whenanalysed in terms of just the incremental costsand benefits of being built into an irrigationfacility, the hydropower component yielded a15.7% rate of return. Combined, the rate ofreturn for the multi-purpose project came to13.4%. Following a cost overrun in nominalterms of 37%, the project completion teamreported a recalculated EIRR for the project in1985, including flood control, of 13.6%,although the validity of the irrigation benefitcalculations was questioned by a subsequentpost-project audit report.57

In summary, these emerging trends andpatterns of higher variability and loweraverage performance of multi-purpose versussingle-purpose projects are not surprising.While single-purpose dams are designed foroptimal delivery of a particular targetedbenefit, multi-purpose projects are designed forsub-optimal outputs of all intended benefits.They aim to maximise economic efficiencyachieved through shared costs and infrastruc-ture of the proposed scheme. In doing so,multi-purpose schemes are inherently morecomplex, and many experience operationalconflicts that contribute to under-performanceon financial and economic targets.

What emerges from the WCD KnowledgeBase is that these sub-optimal targets set formulti-purpose projects were still notachieved to the level desired. This suggeststhat the extent to which conflict arisingfrom multi-benefit operation will affectperformance is probably under-estimated.

Physical SustainabilityIssuesMany factors affect the physical sustainabili-ty of the benefits and services provided bydams. The following section provides brieffindings from the Knowledge Base on threeof these issues: dam safety, sedimentationand waterlogging and salinity.

Dam safety

Dam failure is defined by the InternationalCommission on Large Dams (ICOLD) asthe ‘collapse or movement of part of a damor its foundation, so that the dam cannotretain water.’58 In general, a failure results inthe release of large quantitiesof water, posing serious risksfor the people or propertydownstream. The findings of arecent global compilation ofinformation about the failureof dams by ICOLD are asfollows:

■ The failure rate of largedams has been falling overthe last four decades. Ofdams built before 1950,2.2% failed, while the failure rate ofdams built since 1951 is less than 0.5%.

■ The proportion of dams failing varieslittle with the height of the dam and somost failures involve small dams.

■ Most failures involve newly built dams.Some 70% of failures occur in the firstten years of life of the dam and propor-tionately more during the first year aftercommissioning.

■ The highest failure rate is found in damsbuilt in the ten years 1910-1920.

■ Foundation problems are the mostcommon cause of failure in concretedams, with internal erosion and insuffi-

Multi-purpose schemesare inherently morecomplex, and manyexperience operationalconflicts that contribute tounder-performance onfinancial and economictargets.

Chapter 2


cient shear strength of the foundationeach accounting for 21% of failures.

■ The most common cause of failure ofearth and rockfill dams is overtopping(31% as primary cause and 18% assecondary cause). This is followed byinternal erosion in the body of the dam(15% as primary cause and 13% as second-ary cause) and in the foundation (12% asprimary cause and 5% as secondary cause).

■ With masonry dams, the most commoncause is overtopping (43%) followed byinternal erosion in the foundation(29%).

■ Where other works were the seat of thefailure, the most common cause wasinadequate spillway capacity (22% asprimary cause and 30% as secondarycause).

■ The post-failure action most frequentlyreported was scheme abandoned (36%),construction of a newly designed dam(19%) and overall reconstruction withthe same design (16%).59

When most large dam projects are built, theassumption is that river flows in the future(total runoff and severe floods) will be muchlike those in the past. In some cases thehistorical time series of hydrological data istoo short and may not reflect cyclicalphenomena. Climate change has introducedanother level of uncertainty about changingflows within the life span of most dams. Thesafety of large dams is affected by changes inthe magnitude or frequency of extremeprecipitation events. These changes arehighly uncertain, but climate change isexpected to lead (and perhaps already hasled) to larger and more frequent extremeprecipitation events. One of the first studiesin this area concluded that the discharge ofthe 50-year flood on the River Severn, inthe United Kingdom, may increase byaround 20% by 2050.60 There is concernwhether existing spillways can evacuatesuch floods in future.

The WCD Cross-Check Survey shows atrend towards increased attention to theassessment of dam safety, although around20% of dams in the sub-sample that werebuilt in the last three decades do not reportundertaking a safety assessment (see Figure2.13). A report card on the United Statesexperience with an ageing stock of damsprovides a sobering indication of the impor-tance of dam safety concerns (see Box 2.10).A key element in keeping dams safe is

The American Society of Civil Engineers (ASCE) gave dams in the United Statesa poor grade (a ‘D’) in their ‘1998 Report Card for America’s Infrastructure’ –citing age, downstream development, dam abandonment, and lack of fundingfor dam safety programmes as major unaddressed problems.

The Association of State Dam Safety Officials (ASDO) concluded that:

■ Current levels of dam safety expenditures are insufficient. There areinstances when dam safety items are given a lower priority than water orpower delivery.

■ Some $40 billion is needed to maintain and improve current dams.

■ Little if any information is provided to downstream populations at risk;less than 10% of jurisdictions surveyed had warning or evacuation plans.

■ In many cases irrigation districts – which are required by law to sharedam safety expenses – withheld funds to pay for necessary safety items.Continued deferment could result in unacceptable public risks.

■ Maintenance costs continue to escalate because of the ageingstructures. With constant or declining maintenance funds from federaland irrigation district sources, new sources of revenue are needed.

According to the United States Federal Emergency Management Agency:

■ Dam breaks are rare and there have been few deaths in recent years.There have been 1 449 dam failures over the past 150 years in theUnited States. The annual dam failure rate was 29 in 1996 and 1997.

■ In massive floods like Hurricane Floyd’s inundation of North Carolina in1999, 36 dams failed but most were small and claimed no lives.

■ Failure of the Buffalo Creek dam in West Virginia in 1972 killed 125people, while failure of the Teton dam in 1976 killed 11 and of the KellyBarnes dam in Georgia killed 39.

■ Of the 80 000 small and large dams in the United States, 9 326 are ratedas ‘high hazard’, meaning that if they should fail, loss of life and seriousproperty damage would result. Some 1 600 significant hazard dams arewithin one mile of a downstream city.

■ Less than 40% of high hazard dams have an emergency action plan forpeople to follow.

Sources: ASCE 1998;Knudsen and Vogel, 1997;

Schmid, 2000; ASDSO 2000.

Box 2.10 Dam safety in the United States



providing finance for proper and regularmaintenance work. A recent Ontario HydroStudy of several hundred North Americandams indicates that, on average, hydropoweroperating costs rise significantly after 25 to35 years of operation due to the increasingneed for repairs.61

Figure 2.13 Trends in dam safety assessments

Sedimentation

Many reservoirs are subject to some degreeof sediment inflow and deposition. It isestimated that some 0.5–1% of the worldreservoir volume is lost from sedimentationannually.62 Sedimentation of the activestorage affects physical and economicperformance, but only where design storageis more or less fully used.63 Sediment mayalso cause erosion of turbines if it reachespower intakes. Eventually, sedimentationwill affect project life by silting up the deadstorage, leading to intake blockage.

The WCD Knowledge Base indicates thatwhile sedimentation potentially underminesthe performance of a large dam project, theconditions – and therefore the frequency ofoccurrence of this phenomenon – areproject and site-specific. For example,

100

80

60

40

20

0


Linear fit line

50

40

30

20

10

0

% a

ctiv

e st

ora

ge

loss


Age of dams (years)

% a

ctiv

e st

ora

ge

loss

Upper reac

h

(26 d

ams)

Mid

dle reac

h

(12 d

ams)

Lower r

each

(9 dam

s)50 10 15 20 25 30 35 40 45

Figure 2.14 Loss of active storage due to sedimentation

Source: WCD Cross-Check Survey. Source: WCD Cross-Check Survey.

Figure 2.15 Loss of active storage dueto sedimentation by reach of river

Global sub-sample: 105 dams110

90

70

50

30

10

0

% o

f dam

s

Decade<19

5019

70s

1950

s

1960

s

1980

s

1990

s


Chapter 2


higher sedimentation rates areobserved for smaller dams and fordams located in the lower reachesof rivers.

Analysis of the Cross-CheckSurvey shows that more than50% of active storage was lostdue to sediment deposition for10% of projects in the sample, allof which were in operation for atleast 25 years (see Figure 2.14).But there is great variabilitywithin this average global figure(see Figure 2.15). In the sample,the average loss of active storagewas greatest for reservoirs in thelower reach of rivers.

Of the WCD Case Study dams, only Tarbelafaces a sedimentation problem. In this case,the reservoir has lost 18% of live storageafter 25 years. Although this is less thanpredicted, the loss of storage capacityreduces the dam’s capacity to store water forirrigation; in addition, the build-up ofsediment close to the dam is threateningoperation long before the end of its designlife. Conversely, sedimentation is not anissue in the temperate dams in the Glommaand Laagen basin and Grand Coulee, wheresediment concentrations are negligible.

A survey of 547 U.S. dams found that:

■ one-quarter of U.S. hydropower reservoirshave some form of sedimentation problem;

■ 15% of owners and operators considerthese problems serious; and

■ the frequency and perception of sedi-mentation as a problem is higher forsmaller-volume reservoirs.64

Other studies confirm a number of thesefindings. Data from 42 dams in Morocco

indicate storage is depleting at the rate of1.1% for reservoirs with storage volumes lessthan 500 m3 and 0.6% for larger dams.65

Waterlogging and salinity

Salinisation of agricultural land is caused bythe rise of groundwater brought about bysurface irrigation and is related to theproblem of waterlogging. When water tablesare close to the surface, capillary actiondraws salts naturally occurring in the soilprofile to the surface. Even where ground-water use is controlled, secondary salinisa-tion can occur due to poor-quality ground-water. Salinisation reduces yields of cropsthat do not tolerate high salinity levels tothe point of eventually rendering the landunproductive. In India, the yields of rice andwheat on salt-affected land were approxi-mately half those on unaffected land.66

The WCD Knowledge Base indicates thatproblems of waterlogging and salinity forirrigation systems have reached seriouslevels globally and have severe, long-termand often permanent impacts on land,agriculture and livelihoods. In the Cross-Check Survey approximately one-fifth ofthe large dam projects with an irrigationcomponent reported impacts from waterlog-ging. Data from 11 major irrigation coun-tries indicate that approximately 20% ofirrigated land is affected by salinity.67 Butthe variation across countries in the share ofirrigated land affected by salt is also large,ranging from 15% in China and 33% inEgypt to 80% in Turkmenistan (see Figure2.16).

The phenomena of waterlogging andsalinity are not new. In the case of GrandCoulee dam, the unexpected rise in ground-water levels was recognised in the early1950s, requiring considerable additional



expenditure on drainage to control in-creased water levels. To date, 7 300 ha havebeen taken out of production through agovernment-sponsored set-aside programme.In the Indus Basin, 38% of the irrigationsystem is classified as waterlogged andproduction is estimated to be 25% lowerthan potential as a result of salinity. Majorengineering works to remove saline effluenthave recently been implemented, but it istoo early to evaluate the effectiveness of thisapproach. In justifying a major drainageproject in Pakistan, the World Bank as-cribed a production decline of approximate-ly 25% to salinity and waterlogging, withspecific cases reaching 40–60%.68

Although the need for drainage has beenevident for some time, proponents haveoften omitted the necessary infrastructurefrom project plans.69 Drainage facilitieshave been difficult to justify at the outset ofa project under prevailing economic analysisas the main benefit of drainage is realisedonly after some time, namely when thegroundwater levels have risen close to the

surface. Regardless of thetiming of actual investment indrainage facilities, the exclu-sion of drainage facilities fromthe original project design –only to require remedial actionlater – may lead to the over-estimation of project netbenefits. Resolving waterloggingand salinity problems entailssignificant rehabilitation costs (underestima-tion of project costs) and loss of productivityover time (over-estimation of benefits).

A further difficulty is that predictions mayunderestimate the time required for suchproblems to appear. One cause of thisproblem is over-irrigation. For example, inthe Chashma project in Pakistan there was ashift to more water-demanding crops such asrice and sugarcane, and excessive irrigationduring the early stages of project develop-ment when water was abundant. As a result,water tables rose more quickly than expect-ed leading to the need to invest in drainageworks at an earlier date than anticipated.70

Data from 11 majorirrigation countriesindicate thatapproximately 20% ofirrigated land is affectedby salinity which makesland increasinglyunproductive.

China

India

United States

Pakistan

Iran

Egypt

Uzbekistan

Turkemenistan

Sub-Total

World Estimate

7.0

6.7

4.2

4.2

1.7

0.9

2.4

1.0

28.1

47.7

Values represent the total irrigatedland affected by salt in millions of

hectares.

% of total irrigated land affected by salt

100 20 30 40 50 60 70 80 90

Source: Postel, 1999.

Figure 2.16 Waterlogging and salinity

Chapter 2


Once drainage is in place,recurrent costs of operation andmaintenance are often notrecovered, leading to earlydegradation and a reduction inthe effectiveness of drainagesystems. A report by the Inter-national Water ManagementInstitute notes that despiteimproved understanding of theprocess involved, the areaadversely affected by waterlog-

ging and salinity is increasing at a rate fasterthan reclamation, pointing to conflictingsector interests and priorities.71

Findings and LessonsThe degree to which large dams in theWCD Knowledge Base have deliveredservices and net benefits as planned variessubstantially from one project to the nextwith a considerable portion falling short ofphysical and economic targets. In spite ofthis, the services produced by dams areconsiderable – in the order of 12-16% ofworld food production, 19% of worldelectricity supply amongst others, as present-ed in Chapter 1. In addition, the WCDKnowledge Base confirms the longevity oflarge dams, as many continue generatingbenefits – even if less than planned – after30 to 40 years of operation.

A sectoral review of technical, financial andeconomic performance suggests that of thedams in the Knowledge Base, those:

■ designed to deliver irrigation serviceshave typically fallen short of physicaltargets, did not recover their costs andhave been less profitable in economicterms than expected;

■ built to deliver hydropower tend toperform close to but still below targetsfor power generation, generally meet

their financial targets but demonstratevariable economic performance relativeto targets, and include a number ofnotable under- and over-performers;

■ built for municipal and industrial watersupply have generally fallen short ofintended targets for timing and deliveryof bulk water supply and have exhibitedpoor financial cost recovery and eco-nomic performance;

■ with a flood control component haveprovided important benefits in thisregard, but at the same time have led toan increased vulnerability to floodhazards due to increased settlement inareas still at risk from floods, and in somecases have worsened flood damages for anumber of reasons, including pooroperation of dams.

■ which serve a number of purposes alsounder-achieve relative to targets, in somecases exceeding the shortfalls registeredby single purpose projects, demonstratingthat the targets were often over-optimistic.

The review of performance suggests twofurther findings:

■ large dams in the Knowledge Base have amarked tendency towards scheduledelays and significant cost overruns; and

■ growing concern over the cost andeffectiveness of large dams and associatedstructural measures have led to theadoption of integrated flood manage-ment that emphasises a mix of policy andnon-structural measures to reduce thevulnerability of communities to flooding.

The review also examines threats to thephysical sustainability of large dams andtheir benefit flows. Based on the extent andnature of these threats the findings suggest:

■ Ensuring the safety of dams will requireincreasing attention and investment as



the stock of dams ages, maintenancecosts rise and climate change alters thehydrological regime used as a basis forthe design of dam spillways.

■ Sedimentation and the consequent long-term loss of storage is a serious concernglobally and the effects will be particular-ly felt by basins with high geological orhuman-induced erosion rates, dams inthe lower reaches of rivers and dams withsmaller storage volumes.

■ Waterlogging and salinity affect one-fifthof irrigation land globally – including landirrigated by large dams – and have severe,long-term and often permanent impacts onland, agriculture and livelihoods whererehabilitation is not undertaken.

Using the information on the performanceof large dams collected in the WCD Knowl-edge Base this chapter shows that there isconsiderable scope for improving theselection of projects and the operation ofexisting large dams and their associatedinfrastructure. Considering the vast amountsof capital invested in large dams, substantiveevaluations of project performance are fewin number, narrow in scope and poorlyintegrated across impact categories andscales. The resounding message is that weneed better and continued monitoring oftechnical, financial and economic perform-ance. The next chapters turn to the envi-ronmental and social dimensions of largedams.

Chapter 2


Endnotes

1 The emphasis here is on the direct capitalcosts of a project. Direct costs are those coststhat are incurred by public or private projectowners as part of investment and operations,and not those that remain outside theowner’s perspective (the latter being externalcosts).

2 WCD Thematic III.1 Economic Analysis,Chapter 2.

3 Bacon et al, 1996, p7-8.

4 WCD Thematic III.1 Economic Analysis,Chapter 2; IDB, 1999.

5 Lagman, 2000, in WCD Thematic III.1Economic Analysis, Chapter 2.

6 In nominal US dollar terms. Of the 35 damsin the IRN list, 11 were already accountedfor in the World Bank and IDB samples and10 had incomplete information to calculatethe nominal cost overruns in dollars. WCDThematic III.1 Economic Analysis; McCully,1999, eco061, WCD Submission.

7 The India Case Study reports on a series ofhistorical reports of overruns in India,including a 1983 study of 159 projectsshowing 232% overruns. These overruns arecalculated in local currency units not USdollars and, thus, follow a different methodthen the other studies reported in the text.

8 Bacon et al, 1996, p30; Bacon and Besant-Jones, 1998, p321.

9 WCD Thematic III.1 Economic Analysis,based on OED, 1996a, p57-67.

10 AfDB, 1998, in WCD Thematic III.1Economic Analysis, Chapter 2.

11 Young, 2000, eco066, WCD Submission, p3,suggests that US Bureau of Reclamationprojects cost on average three times as muchas is planned.

12 Financial costs of projects are determined byprojecting quantities of goods and services atcurrent year prices and then applying a priceescalation factor to account for expectedinflation. When actual inflation exceedsexpected inflation, this contributes tooverruns in terms of cash flows (as againstoriginal budgets) but it does not necessarilyalter the underlying real cost of the goodsand services as employed in economic cost-

benefit analysis. The real price of goods andservices used in construction - and not thegeneral price level - must increase at a higherthan expected rate for the real costs to‘overrun’.

13 Delays due to difficulty in reaching financialclosure do not add to interest during con-struction changes.

14 Bacon et al, 1996, p30.

15 Note that although regional development isoften an objective of irrigation projects, theCommission has not found cases where it ismade an explicit objective with firmperformance targets. Such benefits are alsoinherently distributional in nature and aretreated in the later section on this topic.

16 Actual command area figures are directlycomparable with ultimate command areatargets in the Survey sub-sample as allprojects had passed the planed time frame forachieving full command area development.

17 Cropping intensity describes the extent ofland utilisation in a year and reflects thedegree of multiple cropping. It is the ratio oftotal area cropped per year to the irrigationcommand area.

18 ADB, 1995, p5.

19 WCD Thematic IV.2 Irrigation Options,Table 3.13, Section 3.4.2.

20 OED, 1990, p4-2.

21 Barker and Dave, in print.

22 World Bank Commodities Prices Data.

23 OED, 1990, p v.

24 Eckstein, 1958, p2.

25 World Bank appraisals typically cite 10% asthe ‘hurdle rate’ which a project must exceedto be deemed worth undertaking. The ADBonly approves projects that have an EIRRover 12%, although in exceptional casesthose with an EIRR of less than 12% but stillmore than 10% are approved; ADB, 1997,p37, in WCD Thematic Review III.1Economic Analysis, Technical Annex I, p10-14.

26 The sample included all 13 ADB-fundedlarge dams where both completion andevaluation reports exist and a sampling of 27large dams funded by the World Bank, andeight projects funded by the African Devel-



opment Bank. For the full analysis see WCDThematic Review III.1 Economic Analysis,Chapter 10.

27 The present value is less than the full costdue to the long development period and theeffect of discounting.

28 This assumes that there was no general orsector-specific excess capacity in theeconomy. As the project began in 1945 it canonly be said that the likelihood of consistentexcess capacity in the US economy duringthe project period is low given the highgrowth rates observed during this period.

29 ADB, 1995, p7; OED, 1990, p4–2.

30 Thakkar, 1999, p17, Contributing paper toWCD Thematic IV.2 Irrigation Options.

31 WCD Thematic Review IV.2 IrrigationOptions, Section 4.2.2.

32 Molden et al, 1998, p15.

33 Johnson, 1997, p28.

34 ADB, 2000.

35 NEA, 1997.

36 WCD Norway Case Study; WCD GrandCoulee Case Study.

37 Wong, 1994, in WCD Thematic Review III.1Economic Analysis, Chapter 2.

38 McCully, 1997a, p5, in WCD ThematicReview III.1 Economic Analysis, Chapter 10.

39 AfDB, 1998, p6, in WCD Thematic ReviewIII.1 Economic Analysis, Chapter 2.

40 WCD Thematic Review III.2 FinancingTrends, Chapter 2.

41 ADB, 1994, p3.

42 ADB, 1994, p17.

43 OED, 1992, p1 Executive Summary.

44 McIntosh and Yñiguez, 1997, p16.

45 Whittington et al, 1991, p193; World BankWater Demand Research Team, 1993, p47-52.

46 Whittington et al., 1991, p193.

47 Shalaby, 1999.

48 Oud, pers. comm. 2000.

49 Atakpu, 1999, WCD Regional ConsultationPaper, p1.

50 Townshend, 2000, p81.

51 MacDonald and McInally, 1998, p183.

52 WCD Thematic Review IV.4 Flood Manage-ment Options, section 1.2.1.

53 World Bank et al, 1996, Annex 1, p51.

54 WCD China Country Study, Chapter 2.

55 WCD Thematic Review III.1 EconomicAnalysis, Chapter 10.

56 AfDB, 1998, p6.

57 WCD Aslantas Case Study; World Bank, 1987.

58 ICOLD, 1995.

59 ICOLD, 1995.

60 Tedd, 2000.

61 McCully 1997b, p2.

62 Mahmood, 1987.

63 Active storage is the reservoir volume abovethe outtake, whereas dead storage is thereservoir volume below the outtake.

64 Dixon, 2000.

65 Smith, 1999, p13.

66 Kijne et al, 1998, p26.

67 Heuperman, 1999, Contributing Paper toWCD Thematic Review IV.2 IrrigationOptions, Section 4.2.

68 World Bank, 1997, p3.

69 Young, 2000 eco066, WCD Submission, p3.

70 ADB, 1984.

71 Kijne et al, 1998, p26.

Ecosystems and Large Dams: Environmental Performance


Chapter 3:

Ecosystems and Large Dams:Environmental Performance

The nature of the impacts of

large dams on ecosystems is

generally well known and scientists,

NGOs and professional groups such

as the International Commission on

Large Dams (ICOLD), International

Hydropower Association (IHA) and

the International Energy Agency

(IEA) have written extensively on

them.1 A useful indicator of the scale

of human intervention in this regard is

a recent estimate that dams, inter-

basin transfers, and water withdrawals

for irrigation have fragmented 60% of

the world’s rivers.2

Chapter 3


Ecosystem impacts can be classified accord-ing to whether they are:

■ first-order impacts that involve thephysical, chemical, and geomorphologi-cal consequences of blocking a river andaltering the natural distribution andtiming of streamflow;

■ second-order impacts that involve changesin primary biological productivity ofecosystems including effects on riverineand riparian plant-life and on down-stream habitat such as wetlands; or

■ third-order impacts that involvealterations to fauna (such as fish)caused by a first-order effect (such asblocking migration) or a second-ordereffect (such as decrease in the availa-bility of plankton).

In addition, modifying the ecosystemchanges the biochemical cycle in the

natural riverine system. Reser-voirs interrupt the downstreamflow of organic carbon, leadingto emissions of greenhouse gasessuch as methane and carbondioxide that contribute toclimate change.

The current state of knowledgeindicates that large dams havemany mostly negative impacts onecosystems.3 These impacts are

complex, varied and often profound innature. In many cases dams have led to theirreversible loss of species populations andecosystems. Because the ecosystem impactsare many and complex it is hard to give aprecise and detailed prediction of thechanges likely to result from the construc-tion of a dam or series of dams. Based on thegeographical location of a dam and thenatural river regime it is possible to give abroad indication of the type and direction of

impacts with decreasing certainty, from first-to third-order impacts. To date efforts tocounter the ecosystem impacts of large damshave had only limited success. This is due tolimited efforts to understand the ecosystemand the scope and nature of impacts, theinadequate approach to assessing evenanticipated impacts and the only partialsuccess of minimisation, mitigation andcompensation measures.

This chapter describes the nature of theimpacts in general, supported by the CaseStudies, the Cross-Check Survey and theThematic Reviews on Ecosystems (II.1) andon Global Change (II.2). Given that theWCD Knowledge Base describes a largenumber of ecosystem impacts, the focus ison summarising these impacts by groupingthem as follows:

■ the impacts of reservoirs on terrestrialecosystems and biodiversity;

■ the emission of greenhouse gases associ-ated with large dam projects and theirreservoirs;

■ the impacts of altered downstream flowson aquatic ecosystems and biodiversity;

■ the impacts of altering the natural floodcycle on downstream floodplains;

■ the impacts of dams on fisheries in theupstream, reservoir and downstreamareas;

■ the enhancement of ecosystems throughreservoir creation and other means; and

■ the cumulative impacts of a series ofdams on a river system.

The extent to which efforts to reduce oreliminate these impacts were undertaken inthe past is described at the end of eachdiscussion. The final subsection contains afurther assessment of past experience withefforts to avoid, mitigate, minimise or



compensate these impacts. Current efforts torestore environmental function throughdecommissioning are also reviewed.

Terrestrial Ecosystems andBiodiversityThe construction of a storage dam andsubsequent inundation of the reservoir areaeffectively kills terrestrial plants and forestsand displaces animals. As many speciesprefer valley bottoms, large-scale impound-ment may eliminate unique wildlife habitatsand affect populations of endangeredspecies.4 Efforts to mitigate the impacts onfauna have met with little success (see Box3.1). Construction of irrigation infrastruc-ture may have similar impacts.

Flooding a reservoir may lead to the occupa-tion and clearing of upstream catchmentareas as replacement for land lost to thereservoir. Land use change provoked in thismanner not only has direct effects in termsof habitat loss, elimination of flora andfauna and, in many cases, land degradation,but also feedback effects on the reservoirthrough alterations in hydrologic function.The resulting loss of vegetative cover leadsto increases in sedimentation, stormflow,and annual water yield; decreases in waterquality; and variable changes in the seasonaltiming of water yield.5

Greenhouse Gas EmissionsThe emission of greenhouse gases (GHG)from reservoirs due to rotting vegetation andcarbon inflows from the catchment is arecently identified ecosystem impact (onclimate) of storage dams.6 A first estimatesuggests that the gross emissions fromreservoirs may account for between 1% and28% of the global warming potential ofGHG emissions.7 This challenges the

conventional wisdom that hydropowerproduces only positive atmospheric effects,such as a reduction in emissions of carbondioxide, nitrous oxides, sulphuric oxides andparticulates when compared with powergeneration sources that burn fossil fuels.8 Italso implies that all reservoirs – not onlyhydropower reservoirs – emit GHGs.Consequently, reservoir and catchmentcharacteristics must be investigated to findout the likely level of GHG emissions.

All large dams and natural lakes in theboreal and tropical regions that have beenmeasured emit greenhouse gases (carbondioxide, methane, or sometimes both) (seeFigure 3.1 and 3.2).9 Figure 3.1 shows therange of values recorded by field measure-ments and models of GHG emissions for 15reservoirs.10 Some values for gross GHGemissions are extremely low and may be 10times less than the thermal option. Yet insome circumstances the gross emissions canbe considerable, and possibly greater thanthe thermal alternatives.11 These emissionsmay change significantly over time as the

Some large dam projects have tried to mitigate terrestrial impacts onbiodiversity by physically rescuing animals from the area to be flooded or byanticipating that mobile species will simply move to neighbouring areas.Operation Noah and Operação Curupira are two examples undertaken at Karibaand Tucurui dams. The respective WCD Case Studies show that neitherprogramme yielded tangible benefits for the wildlife involved. This may be aresult of the implicit and probably incorrect assumption that the recipienthabitat was not already at carrying capacity for the species concerned.

An alternative to mitigation is a compensatory project approach, or environmen-tal ‘offsets’. For example, in India there is a legal requirement that forestsflooded by reservoirs must be replanted elsewhere. However, the India CaseStudy found that only half of the required forest has typically been planted – andeven this is poorly managed, yielding little in the way of comparable benefits orservices. Additional compensatory measures may include either trust fundsestablished through grants from developers (for example Harvey BasinRestoration Trust, Australia) or trust funds that manage parts of the revenuestream and use it for environmental purposes. This latter model is proposed forthe planned Nam Theun II dam in Laos, with the intention of creating andmanaging a National Park in the catchment. The plan has the potential tobenefit both forest ecosystems and the lifespan of the dam through reducedsedimentation.

Sources: WCD Kariba, Tucurui and India Case Studies; Bizer, 2000

Box 3.1 Mitigating and compensating for terrestrial impacts

Chapter 3


Establishing that a reservoir emits GHGs isnot enough to assess the impact of a dam onclimate change. Natural habitats (undis-turbed by dams) may also emit GHGs (seeFigure 3.2). Alternatively they may storecarbon or act as a net carbon sink. Forexample, a floodplain tropical forest inAmazonia may emit methane from soils and,at the same time, absorb carbon dioxide inleaves. The balance of all these potentiallycounteracting effects would determine theprofile of GHG emissions from the naturalhabitat without the dam. A further compli-cation is that the land use change inducedby displacement of people, resource extrac-tion and other economic activities may alsoform part of the net contribution to GHGemissions associated with the constructionof the dam. Calculations of the contributionof new reservoirs to climate change musttherefore include an assessment of thenatural pre-dam emission or sink in order todetermine the net impact of the dam.13

The WCD Case Studies only provide dataon carbon dioxide and methane emissionsfrom the Tucurui reservoir (see Box 3.2).

4 500

4 000

3 500

2 500

2 000

1 500

1 000

500

0Ave

rag

e G

HG

em

issi

ons

(g

CO

2 /m

2 /yr

)

Brazil Canada Finland

Forest ecosystems

Amazon floodplain

Tropical forests

Boreal forests

Others

Indonesian

wetland rice

Northern peatlands

Natural lakes

3 500

2 500

2 000

1 500

1 000

500

0

-500

-1 000Ave

rag

e G

HG

em

issi

ons

(g C

O2/m

2 /yr

)

biomass decays within the reservoir duringthe first few years of impoundment. In othercases the emissions may depend more oncarbon inflows from the catchment in thelonger term and have greater stability overtime, subject to catchment conditions.

Source: WCD Thematic Review II.2 Global Change.Note: Natural habitats may be sources (positive values) or sinks (negative values) for carbon. Emissions from dam reservoirs in Canada and Finland(Fig 3.1) are at similar levels to natural lakes.

Figure 3.1 Gross greenhouse gas emissions from reservoirs

Source:WCD Thematic Review II.2 Global ChangeNote: Average measured emissions of greenhouse gases from 15 reservoirs in borealand tropical regions show large variations within countries and between regions. Theseaverages mask strong seasonal and annual variations.12

Figure 3.2 Greenhouse gas emissions from natural habitats



Even in this case there is no data on emis-sions without the dam, making a conclusionon the net effect impossible. This appliesmore generally to other dams that haveeven less information available. Currentunderstanding of emissions suggests thatshallow, warm tropical dams are more likelyto be major GHG emitters than deep coldboreal dams.

In the case of hydropower dams, tropicaldams that have low installed capacity andlarge shallow reservoirs are more likely tohave gross emissions that approach those ofcomparable thermal alternatives than thosewith small, deep reservoirs and high in-stalled capacity.14

To date, no experience exists with minimising,mitigating, or compensating these impacts.Pre-inundation removal of vegetation is onealternative, but the net effects of such anactivity are not well understood. The outcomeof global negotiations on climate change maybear on future penalties and incentives for netGHG emissions from dams.

Downstream AquaticEcosystems andBiodiversityStorage dams are intended to alter thenatural distribution and timing of stream-flow. They compromise the dynamic aspectsof rivers that are fundamental to maintain-

Box 3.2 Greenhouse gas emissions at Tucurui, Brazil

2 500

2 000

1 500

1 000

500

0

Kt e

q.

CO

2/T

Wh/

yr

Range of annual gross GHG emissions at Tucurui Hydropower Project and four thermal alternatives

Tucuruia Tucuruib Gascombined

cycled

Dieseld Heavy oild Bituminouscoald

Tucuruic

Sources: aFearnside, 1995; bRosa et al, 1999; cFearnside, 2000; dIEA, 2000.

Recent monitoring in the 2 600 km2 reservoir of Tucurui show thatgreenhouse gas emissions are substantial and highly variable fromyear to year. Values in 1998 exceeded those measured in 1999 bymore than a factor of 10 for methane and by 65% for carbon dioxide(see table below).15

Total Gross Emissions (tons/km2/ year)

Year Methane Carbon dioxide

1998 76.36 3 8081999 5.33 2 378

Modelling taking into account emissions from water passing throughthe turbines or over the spillway leads to higher estimates of total

emissions.16 The figure below compares these gross emissions tothose of alternative technologies for large-scale power genera-tion.17 Background emissions from natural pre-impoundmenthabitats have not yet been measured for Tucurui, so true compari-sons of net emissions with alternatives remain elusive.

The alternative technology for large-scale electricity generationrequired for aluminium smelting (the main consumer of electricity)was thermal power employing diesel fuel when the project was builtin the 1970s. Today the alternative would be gas combined cycleplants.

Source: WCD Tucurui Case Study.

Chapter 3


ing the character ofaquatic ecosystems.Natural rivers andtheir habitats andspecies are a functionof the flow, the quanti-ty and character of thesediment in motionthrough the channel,and the character orcomposition of the

materials that make up the bed and banks ofthe channel. The defining river dischargeincludes both high- and low-flow elements.These dynamics, not the average conditionsof controlled dam operations, determine astream’s physical foundation, which in turnensures ecosystem integrity.18

The extent of impacts will also depend onwhether water is extracted or diverted forconsumption, or left instream. Introductionof non-native species, modified waterquality (temperature, oxygen, nutrients),loss of system dynamics, and loss of theability to maintain continuity of an ecosys-tem result in ecologically modified riversystems. The establishment of a new dynam-

ic has positive effects on some species andnegative effects on others (see Box 3.3).

Impacts of changes in flowregimes

Flow regimes are the key driving variable fordownstream aquatic ecosystems. Floodtiming, duration and frequency are allcritical for the survival of communities ofplants and animals living downstream.Small flood events may act as biologicaltriggers for fish and invertebrate migration:major events create and maintain habitatsby scouring or transporting sediments. Thenatural variability of most river systemssustains complex biological communitiesthat may be very different from thoseadapted to the stable flows and conditions ofa regulated river. Finally, water temperatureand chemistry are altered as a consequenceof water storage and the altered timing ofdownstream flows. Algal growth may occurin the reservoir and in the channel immedi-ately downstream from dams because of thenutrient loading of the reservoir releases.Self-purification processes diminish thiseffect downstream.

Storage dams, particularly hydropowerpeaking plants, can significantly disrupt thewhole flow regime, resulting in both highseasonal and day-to-day fluctuations thatdiffer greatly from natural flow levels. Asshown in Figure 3.3, the construction ofGlen Canyon dam on the Colorado River inthe United States reduced daily averageflows during the annual September peak fromabout 2 000 m3/sec to about 700 m3/sec. Inaddition, as shown in Figure 3.4, streamflowcan fluctuate daily more than 425 m3/secdue to dam releases for electricity generationduring the peak daytime demand periods.These changes in flow have dramaticallyaltered the riverine environment, creatingconsistently colder temperatures due to

Before it was dammed, the Waitaki River in New Zealand was highly unstable,flooded frequently, and had a constantly changing channel. After damming theriver flood runoff is now stored in the reservoir to produce electricity. Thisincreased the stability of the sandbars downstream, allowing colonisation byvegetation, which further stabilised the channel. The increased flow stability hasbenefited chinook salmon (Oncorhynchus tshawytscha) populations, an exoticspecies introduced in the early 1900s, because the more stable channels providemore shelter for fry at high flows as well as a larger area of spawning gravel.Currently the Waitaki has the largest population of salmon in New Zealand.However, the beneficial change for salmon has been detrimental to the blackstilt (Himantopus novaezealandiae) – a native species. This bird is so endangeredthat fewer than 100 individuals remain. They nest exclusively on the largeexposed sandbars isolated from the shore, a habitat that was maintained by theunstable nature of the river. The vegetation that has proliferated and stabilisedthe gravel bars has increased the cover for predators, which in turn have exacteda significant toll on adult stilts, eggs, and nestlings.

Source: Ligon et al, 1995, cited in WCDThematic Review II.1 Ecosystems

Box 3.3 How one dam has affected two different species in oppositeways



Source: Data from United States Bureau of Reclamation, 2000b.Notes: Peak flows are associated with the power generation between 14.00 and 19.00 daily, with minima at 04.00 am, andthe fluctuation in demand also varies from day to day.

Source: Data from United States Geological Survey, 2000.

Figure 3.4 Fluctuation of daily streamflow regime due to hydropower peaking operations, Colorado River at Lee’s Ferry,September

Figure 3.3 Modification of annual flow regimes due to a hydropower dam, Colorado River at Lee’sFerry, United States

25

20

15

10

5

0

Stre

am fl

ow

(1 0

00 c

ubic

ft/s

ec)

1-O

ct

22-S

ep

15-S

ep

16-S

ep

17-S

ep

18-S

ep

19-S

ep

20-S

ep

21-S

ep

24-S

ep

25-S

ep

23-S

ep

26-S

ep

27-S

ep

28-S

ep

29-S

ep

30-S

ep

80

60

40

20

0

Stre

am fl

ow

(1 0

00 c

ubic

ft/s

ec)

1-Ja

n1-

Feb1-

Mar

1-Apr

1-M

ay1-

Jun

1-Ju

l

1-Aug

1-Sep

1-Oct

1-Nov

1-Dec

1922-1931 before dam

1982-1991 after dam

release of water from the bottom of thereservoir. A general decline in native fishabundance in the Colorado River is attribut-ed specifically to the cold-water release fromlarge dams there.19 The population of the

fish Tandanus tandanus in Australia’s MurrayRiver disappeared due to short-term fluctua-tions in water level caused by reservoirreleases in response to downstream water-user requirements.20

Chapter 3


Particularly high hydropowerdams cause gas to becomesupersaturated when water flowsover the spillway. This causesfish deaths due to a conditionsimilar to the bends that canaffect divers who dive too deepfor too long. The Grand CouleeCase Study reports that this is aparticular problem on the

Columbia River in the United States, whereregulators have fixed a maximum totaldissolved gas concentration to reduceimpacts on migratory fish.

The modified habitats resulting from largedams often create environments that aremore conducive to non-native and exoticplant, fish, snail, insect, and animal spe-cies.21 These resulting non-native speciesoften out-compete the natives and end upmodifying ecosystems that may becomeunstable, nurture disease vectors, or are nolonger able to support the historical envi-ronmental and social components.

Compared with a natural river, the rootsystems of plants in rivers below dams

experience reduced effects ofscour, the plants themselvessuffer less stress from highdischarges and the rate of chan-nel migration is reduced, so thatan area of the channel-bedavailable for the development ofaquatic plants can be stabilised.In both Africa and Australia, theelimination of high discharges toflush systems has allowed theextensive development of the

aquatic weeds Water Hyacinth (Eichhorniacrassipes) and Water Fern (Salvinia moles-ta).22 The Orange River Pilot Study docu-ments the colonisation by reeds (Phragmites

australis) of 41 000 ha of riverbed hasoccurred as a result of stabilised flows on theOrange River.

Biological linkages also extend laterallyaway from and parallel to the river, pushingthe effect of river changes onto a band ofvarying width. As long as the river flow issufficient, other wildlife such as deer,antelope, and elephants will come to thewater, especially in the dry/hot season, todrink. Hippos in Africa will use water ofsufficient depth as a daytime refuge, emerg-ing to forage at night. Many species of birdsand bats fly in to drink. These lateralmovements can extend to several kilometresfrom the river. Thus many wildlife species ina fairly wide strip of land on either side ofthe river depend upon it, and they may allbe affected when the flow of the river isdisrupted by the construction of a large dam.Equally, long reservoirs that extend manykilometres up river valleys present a barrierfor terrestrial species inhabiting eachriverbank that were previously able to crossthe river.

When waters of one basin are diverted intoanother one, changes in volume and season-ality of flow result. New biota from thesource basin may invade the recipient basinand compete with the native species. If allthe water is diverted from the source basin,this will clearly have serious impacts on anyunique species or genetically different stocks.In South Africa, for example, the diversion ofthe Orange River into the Great Fish Riverresulted in a six-fold increase in flow, makingthe Great Fish River permanent rather thanintermittent. The Orange River Case Studyreports that one beneficiary is the larvae ofthe blackfly Simulium chutteri, which doesnot tolerate desiccation. In the absence ofcontrol measures, this biting fly causes live-

The modified habitatsresulting from large dams

often createenvironments that are

more conducive to non-native and exotic plant,

fish, snail, insect, andanimal species.



stock losses, reduces recreational use, andirritates local farmers.

Efforts to minimise the impacts of changesin flow regime have relied on measures torestore the streamflow regime through thesetting of environmental flow releases (EFR)(see Box 3.4)

Impacts of trapping sedimentsand nutrients behind a dam

The reduction in sediment and nutrienttransport in rivers downstream of dams hasimpacts on channel, floodplain and coastaldelta morphology and causes the loss ofaquatic habitat for fish and other species.Changes in river water turbidity may affectbiota directly. For example, planktonproduction is influenced by many variables,including turbidity. If this is reduced due toimpoundment, plankton development maybe enhanced and may occur in new sectionsof a river.

Reduction in sediment moving downstreamfrom the dam leads to degradation of theriver channel below the facility.23 This canlead to the elimination of beaches andbackwaters that provided native fish habitat,and the reduction or elimination of riparianvegetation that provides nutrients andhabitat for aquatic and waterfowl species,among others. Impounding rivers invariablyresults in increased degradation of coastaldeltas due to reduction in sediment input.For example, the slow accretion of the NileDelta was reversed with the construction ofthe Delta barrage in 1868. Today, otherdams on the Nile, including the AswanHigh Dam, have further reduced theamount of sediment reaching the delta. As aresult, much of the delta coastline is erodingby up to 5–8 metres per year, but in placesthis exceeds 240 metres per year.24

The consequence of reduced sediment alsoextends to long stretches of coastline wherethe erosive effect of waves is no longersustained by sediment inputs from rivers. Itis estimated that the coastlines of Togo andBenin are being eroded at a rate of 10-15metres a year because the Akosombo damon the Volta River in Ghana has halted thesediment supply to the sea.25 Anotherexample is the Rhone River in France,where a series of dams has reduced thequantity of sediment transported by theriver to the Mediterranean from 12 milliontons in the 19th century to only 4 to 5million tons today.26 This has led to erosionrates of up to 5 metres per year for thebeaches in the regions of the Camargue andthe Languedoc, requiring a coastal defencebudget running into millions of dollars.

Measures for mitigating the impacts of trap-ping sediments and nutrients are limited.Where feasible, flushing sediments can be partof a programme of managed flood releases.

At least twenty-nine countries seek to minimise ecosystem impacts from largedams by using an EFR to meet predetermined ecosystem maintenanceobjectives. The practice of EFRs began as a commitment to ensuring a‘minimum flow’ in the river (often arbitrarily fixed at 10% of mean annual runoff).It has since grown to include a definition of ecosystem requirements and aplanned flow release programme, which may vary annually or seasonally, tomeet downstream needs for both the environment and people. The level of EFRrequired is determined by the need to maintain particular ecosystem compo-nents downstream, often with reference to national legislation. The countriesthat use this method have recognised that a short-term reduction in financialreturns from a project often leads to improved long-term sustainability andattainment of broader societal objectives for a healthier environment. Still, thisrepresents a re-distribution of the benefits of a dam project and thus existingbeneficiaries such as irrigators and operators of hydropower facilities may resistEFRs.

Amongst the WCD Case Study large dams, only Grand Coulee has an environ-mental flow requirement, in this case consisting of a specially designed releasefor flow augmentation for salmon, while avoiding high total dissolved gasconcentrations. Implementation of a planned release to maintain downstreamecosystems is being considered for the Orange River in South Africa.

Sources: Brown et al, 1999, Contributing Paper for WCD Thematic Review II.1Ecosystems; Tharme, 2000

Box 3.4 Minimising impacts of changes in streamflow regimes:environmental flow requirements

Chapter 3


Blocking migration of aquaticorganisms

As a physical barrier the dam disrupts themovement of species leading to changes in

upstream and downstreamspecies composition and evenspecies loss. River-dwellingspecies have several migratorypatterns. These include anadro-mous fish such as salmon andcatadromous fish such as eels.Adults of the former migrate uprivers to spawn and the youngdescend, while the reverse occurswith the latter. But many otherfreshwater fish move up rivers or

their tributaries to spawn, while the glochid-ia larvae of freshwater mussels are carried by

host fish. To help counteract the driftdownstream of their larvae, aquatic insectadults such as mayflies and stoneflies moveupstream to lay their eggs.27 Dams blockthese migrations to varying degrees.

The WCD Cross-Check Survey found thatimpeding the passage of migratory fishspecies was the most significant ecosystemimpact, recorded at over 60% of the projectsfor which responses on environmental issueswere given. In 36% of these cases, theimpact of the large dam on migratory fishwas not anticipated during project planning.

Migratory fish require different environ-ments for the main phases of their life cycle:reproduction, production of juveniles,growth, and sexual maturation. Manyanadromous fish populations such as salmonand shad have died out as a result of damsblocking their migratory routes. The stur-geon populations in the Caspian Sea nowrely on stocking from hatcheries (mainly inIran), as dams built by the former SovietUnion on rivers entering the sea haltednatural spawning migrations.28

Detailed studies in North America indicatethat dam construction is one of the majorcauses for freshwater species extinction. Forexample, a study of the threatened fish ofOklahoma suggested that the loss of free-flowing river habitat due to reservoirs hadled to 55% of the human-induced speciesloss, while a further 19% was caused bydams acting as barriers to fish migration.29

The best-documented examples of disruptedfish migrations are from the Columbia Riverin the United States, where many stocks ofsalmon have been lost. The impact of thesedisruptions on the productivity of thefishery are described below.

Fish passes are often used as an engineered mitigation measure for reducingimpacts on fish. However, very few of the over 400 large dams in Australia havefish passes of any description, only 16 had been constructed on the 450 largedams in South Africa by 1994, and only 9.5% of 1 825 hydropower dams in theUnited States have an upstream fish pass facility. An example is Idaho PowerCompany which built fish passes into each of its dams in the Hells CanyonComplex. However, all were unsuccessful and salmon no longer migrate aboveHells Canyon Dam.

The Glomma and Laagen Case Study reports that there are 34 fish passes on the40 dams in this Norwegian basin. Of these only 26% work with ‘good efficiency,’41% work less well, and as many as 32% are not working at all. In general, theefficiency is considered low, and fish migrations are severely affected. At PakMun Dam in Thailand, the case study documents the ineffectiveness of the fishpass, especially for the large migratory species in the Mekong that may be up totwo metres long and cannot fit through the 15x20 cm slots. Grand Coulee,Tucurui, Tarbela and Aslantas have no fish passes despite having migratory fishspecies in the river.

Even when fish passes have been installed successfully, migrations can bedelayed by the absence of navigational cues, such as strong currents. Thiscauses stress on the energy reserves of the fish, as anadromous fish such assalmon do not feed during migration.

Recent research in Australia, the United States, and Japan has shown that fishpasses need to be modified to meet the needs of each species and theparticular situation at each dam. They cannot simply be considered an easilytransferable technology, as shown by the Pak Mun fish pass, which used adesign appropriate for leaping trout and salmon in mountain streams, but whichwas ineffective for species living in the slower-flowing Mekong.

Sources: Australia in Blackmore, pers. comm. 2000; South Africa in Benade,pers. comm. 1999; USA in Francfort et al, 1994, Executive Summary pviii;Collier

et al, 1996, p22; Larinier, 2000, Contributing Paper for WCD Thematic ReviewII.1 Ecosystems

Box 3.5 Mitigation measures: fish passes

As a physical barrier thedam disrupts the

movement of speciesleading to changes in

upstream anddownstream species

composition and evenspecies loss.



Fish passes are typically used where effortsare made to mitigate the effect of dams inblocking migrations of fish (see Box 3.5).

Floodplain EcosystemsReduction in downstream annual floodingaffects the natural productivity of riparianareas, floodplains and deltas. The character-istics of riparian plant communities arecontrolled by the dynamic interaction offlooding and sedimentation. Many riparianspecies depend on shallow floodplainaquifers that are recharged during regularflood events. Dams can have significant andcomplex impacts on downstream riparianplant communities. High discharges canretard the encroachment of true terrestrialspecies, but many riparian plants haveevolved with and become adapted to thenatural flood regime.

Typically, riparian forest tree species aredependent on river flows and a shallowaquifer, and the community and populationstructure of riparian forests is related to thespatial and temporal patterns of flooding ata site. For example, the Eucalyptus forests ofthe Murray floodplain, Australia, depend onperiodic flooding for seed germination, andheadwater impoundment has curtailedregeneration.30 Conversely, artificial pulsesgenerated by dam releases at the wrong time– in ecological terms – are recognised as acause of forest destruction. For example,Acacia xanthophloea is disappearing from thePongolo system below Pongolapoort dam,South Africa, as a result of the modifiedflood regime.31

The control of floodwaters by large dams,which usually reduces flow during naturalflood periods and increases flow during dryperiods, leads to a discontinuity in the river

system. This, together with the associatedloss of floodplain habitats, normally has amarked negative impact on fish diversityand productivity. The connection betweenthe river and floodplain or backwaterhabitats is essential in the life history ofmany riverine fish that have evolved to takeadvantage of the seasonal floods and use theinundated areas for spawning and feeding.Loss of this connection can lead to a rapiddecline in productivity of the local fisheryand to extinction of some species. Addition-ally, dewatering of stream chan-nels immediately downstreamfrom dams can be a seriousproblem.

The direct loss of annual silt andnutrient replenishment as aconsequence of upstream im-poundment is thought to havecontributed to the gradual loss offertility of formerly productivefloodplain soils as used in agri-culture and flood-recessionagriculture. Dramatic reductions in birdspecies are also known, especially in down-stream floodplain and delta areas, wherewetlands may not be replenished with waterand nutrients once a dam is installed.Finally, recharge of groundwater in flood-plain areas is severely diminished oncefloods are eliminated.32

In Africa, the changed hydrological regimeof rivers has adversely affected floodplainagriculture, fisheries, pasture and forests thatconstituted the organising element ofcommunity livelihood and culture. Econom-ically important wetlands in Africa includeriver floodplains, freshwater lakes andcoastal and estuarine environments. In theSahel, there are major wetlands in the DeltaIntérieur of the River Niger in Mali and

In Africa, the changedhydrological regime ofrivers has adverselyaffected floodplainagriculture, fisheries,pasture and forests thatconstituted theorganising element ofcommunity livelihoodand culture.

Chapter 3


Lake Chad (on the border between Niger,Chad, Cameroon and Nigeria). These havecounterparts elsewhere in semi-arid Africa,notably the Sudd in Sudan and the Okavan-go Delta in Botswana, and in humid areas,such as the swamps of eastern Zaire.

Some of these wetlands cover extensivetracts of land. The fringing floodplain of theSenegal River covers some 5 000 km2 inflood, and shrinks to 500 km2 in the dryseason. The fringing floodplain of the Nigercovers about 6 000 km2 in the flood season,shrinking to about half that at low water,while the Niger Inland Delta extends to20 000 to 30 000 km2 in the flood season,shrinking to 4 000 km2 at low water. In theLogone-Chari system, flooding covers some90 000 km2.33

Efforts to restore floodplain ecosystemfunctions rely on reversing the effects of thedam through a program of managed floodsdesigned to simulate the floods that oc-curred prior to the dam (Box 3.6).

FisheriesAs indicated earlier, the blockage of sedi-ment and nutrients, the re-regulation ofstreamflow, and elimination of the naturalflood regime can all have significant,negative effects on downstream fisheries.Marine or estuarine fisheries are also nega-tively affected when dams alter or divertfreshwater flows. Still, productive reservoirfisheries can follow from dam construction,although they are not always anticipated orpart of project design proposals.

Substantial losses in downstream fisheryproduction as a result of dam constructionare reported from around the world. Alongwith subsistence agriculture, fisheriesconstitute an important livelihood activityamong large rural populations in the devel-oping world. Many of these householdsdepend on fisheries either as a primary orsupplementary source of livelihood. Forexample, the partial closing of the riverchannel by Porto Primavera dam in Brazilblocked fish migration and diminishedupstream fish catch by 80%, affectinglivelihoods.34 In areas of rich fish speciesdiversity, such as the lower Mekong regionin East Asia, community livelihoods andculture are woven around fisheries. The PakMun Case Study reports a drastic decline inupstream fish catch once the dam hadeffectively blocked fish migration from theMekong River upstream into tributaries ofthe large Mun River watershed.

Data on the losses to downstream fisheryproduction as a result of dam constructionare reported from river basins in Africa aswell. For example, 11 250 tonnes of fish peryear from the Senegal River system were lostfollowing dam construction.35 Studies onthe Niger have shown that fish productivityincreases linearly with the volume of river

The WCD Knowledge Base includes a number of cases where artificial floodshave been released from large dams to regenerate the natural resource base ofdownstream floodplains for local livelihoods (for example Manantali dam in Maliand Senegal and the Pongolapoort dam in South Africa). Managed floodsgenerate economic benefits when downstream communities depend on natural,flood-maintained resources such as grazing, flood-recession agriculture andfishing (see Chapter 4). For example, on the Tana River, Kenya, a released floodfrom the planned Grand Falls scheme would have a net present value of at least$50 million for the downstream floodplain economy. Managed floods also entailan opportunity cost which may be greater or lesser depending on the value ofthe released floodwaters to the dam for irrigation, hydropower or other uses. Aset of preliminary studies show that in some cases there are clear net economicbenefits to these releases and in other cases the opportunity costs exceed thevalue of downstream benefits that were identified, quantified and valued ineconomic terms. The potential for managed floods is often constrained by thedesign of the sluice-gates, sedimentation in the reservoir and in downstreamchannels and the development of infrastructure on areas previously prone toflooding. Another constraint may be the political will to support traditionalmeans of livelihood at the expense of benefits from the dam.

Source: Acreman et al, 2000, Contributing Paper toWCD Thematic Review II.1 Ecosystem Impacts; Grand Falls in Emerton, 2000

Box 3.6 Restoring ecosystem function through managed floods



flow.36 Other basins in the WCD Knowl-edge Base reporting loss in fish productioninclude the yaeres in Cameroon, the Pongo-lo flood plain in South Africa, and theNiger in West Africa below Kainji dam.37

Adverse impacts have been felt in the deltaand estuary areas in the lower Volta region,in the Nile delta, and on the Zambezi inMozambique.38

Freshwater flows also help support marinefish production as many marine fish spawnin estuaries or deltas. A decrease in freshwa-ter flow and in nutrients due to dam con-struction affects the nursery areas in anumber of ways, including increasingsalinity, allowing predatory marine fish toinvade, and reducing the available foodsupply. These impacts are well illustrated bythe effect of the Aswan High Dam on thecoastal waters of the Mediterranean, wherereduction in nutrients transported to the seahas lowered production at all trophic levels,resulting in a decline in catches of sardinesand other fish.39 In the Zambezi delta, theimpact of modified seasonal flows on localshrimp fisheries has been estimated at $10million per year.40

Dams can enhance some riverine fisheries,particularly tailwater fisheries immediatelybelow dams that benefit from discharge ofnutrients from the upstream reservoir. Ifdischarge is from the lower layer of water inthe reservoir, lowered temperatures in thereceiving tailwater can curtail or eliminatewarmwater river fisheries and requirestocking with exotic coldwater species suchas salmonids (assuming that the water issufficiently oxygenated). Productive tailwa-ter fisheries targeting these coldwater fishcan result but generally require supplemen-tal hatchery programmes and the introduc-tion of coldwater invertebrates to serve asfood for these fish.41

Productive reservoir fisher-ies often follow from damconstruction, although theyare not always anticipatedor part of project designproposals. While practicallyall the WCD Case Studydams have reservoir fisher-ies, predictions of fishproduction were made inonly three cases. In the case of Aslantas,consultants estimated a production of 580tonnes, and actual figures are 86–125 tonnes(for 1987–95). At Pak Mun, actual produc-tion came to only one-tenth of prediction.In both cases targets were not met as thepredictions depended partly on a functionalstocking programme that was not fullyimplemented. At Kariba estimates weremade for the artisanal fishery but not for themore productive open-water commercialfishery.

On the other hand, an unanticipated butproductive fishery has developed in Tucurui.In addition to commercial production atTucurui, a local sport-fishing industry hasdeveloped around the sought-after PeacockBass, Cichla ocellaris (known in Tucurui astucunaré), Kariba has seen a similar develop-ment of a vibrant sport fishery. At GrandCoulee, the lack of a fish pass deprivedsalmon of over 1 000 kilometres of upstreamspawning grounds, and affected First Nationstribes in the United States and Canada,while a fish hatchery largely maintainedsalmon numbers (but not genetic diversity)in downstream runs in the United States.

Data from before and after the constructionof Tucurui illustrate the changing nature ofspecies composition and fish production inthe downstream, reservoir and upstreamareas. The experimental catch data docu-ment that the number of species found in

Chapter 3


each of the three areas has declined signifi-cantly (by 30–50 species) following im-poundment. The data suggest that in total11 species are no longer found in these areas(see Figure 3.5a). Within the reservoir andto a lesser degree upstream, species nowinclude more piscivorous species at theexpense of the detritivores that were morecommon prior to construction. In produc-tion terms, the harvest upstream of thereservoir remained stable for the first 10years or more, but now appears to be in-creasing (see Figure 3.5b). Meanwhile, thedownstream fishery has shown a continueddownward trend. However, the reservoirfishery has expanded tenfold in the last 20

years, with the result that the total fishery(upstream, downstream and in the reservoir)has tripled in size to 4 700 tonnes per yearsince the dam was created.

Mitigation or compensation measures havebeen used to reduce the impacts of changesin fisheries. Fish passages are the mostprevalent measure and have been of limitedapplicability and usefulness (see Box 3.5).Compensation measures consist of fishhatcheries and stocking programs designedto reproduce the productivity of the fishery.

Ecosystem EnhancementThe WCD Knowledge Base provides anumber of examples of the ecosystemenhancement effects of large dams. TheCase Studies show, for example, that pro-ductive wetlands have been created bypumping Grand Coulee water through apreviously dry area in the Columbia RiverBasin, and along the shores of Lake Kariba,with considerable wildlife and tourismvalues resulting.

Some reservoirs support globally threatenedreptiles (for example Hillsborough dam,Trinidad), and others have been declaredRamsar sites of international importance forbirds. Indeed, one measure of the environ-mental value of water bodies is to considerthe list of sites designated as internationallyimportant for waterfowl under the RamsarConvention on Wetlands. Of 957 sitesdesignated by December 1998, only 10%included artificial wetland types, while 25%included natural lake types.42 Many of thedesignated artificial wetlands are dammedsites: of the almost 100 artificial wetlandsdesignated as internationally important, 78include water storage areas.43

A study by Wetlands International forWCD showed that the wintering waterfowl

200

150

100

50

0

Num

ber

of s

pec

ies

Downstream Reservoir Upstream Total

Pre-impoundmentPost-impoundment

3 500

3 000

2 500

2 000

1 500

1 000

500

0

Ann

ual f

ish

harv

est

(to

ns)

1981 1988 1989 1998

Downstream

Reservoir

Upstream

Figure 3.5 Decline in species numbers but increase in fisheriesproductivity, Tucurui (a&b)

Source: WCD Tucurui Case Study.

(b)

(a)



assembled on natural and dammed lakes inSwitzerland are broadly similar, and thesame species occur most abundantly on bothtypes of lake. The study also showed thatthe situation in South Africa is very differ-ent, as it lacks natural permanent waterbodies and almost all permanent waterbodies are reservoirs. At least 12 reservoirssupport major and important concentrationsof waterbirds. Large dams in South Africahave provided generally beneficial condi-tions for pelicans, darters and cormorants.They provide suitable moulting sites forwaterfowl: for example, at least 70% of theglobal population of the South AfricanShelduck, Tadorna cana, moults at only 23localities in South Africa, 21 of which arelarge reservoirs. Dam reservoirs provide dry-season or drought refuges for many water-fowl species in the semi-arid parts of thecountry.44

But productive wetlands are most likely tobe created around reservoirs where these areshallow or have shallow margins and limitedreservoir drawdowns. Where sedimentinflows from the catchment are heavy, smalldeltaic wetlands may evolve at the inflow.

In general, deeper reservoirs thathave steep sides or high seasonalwater-level fluctuations are unlikelyto support major wetland habitats.

Dammed lakes support a morerestricted range of species, andseveral common and uncommonspecies from natural lakes were notrecorded on dammed lakes byWetlands International. The dam-ming of rivers has increased thenumber of open water sites availableto wintering waterfowl in Switzer-land and provided a more suitablehabitat for these birds than thegenerally fast-flowing stretches ofriver in-between. However, thesesites support only relatively smallnumbers of birds, of mostly commonand widespread species and do not appear toprovide as diverse a waterfowl habitat as thenatural lakes in the area. Eleven of the2 596 British reservoirs support substantialand important wintering waterfowl popula-tions, while 60 natural inland waters and 52estuaries support populations of internation-al importance.45

Figure 3.6 Fragmentation in 225 large river basins

Source: Revenga et al, 2000.

Strongly affected

42% 19% 39%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Northern Basins

Southern Basins

All Basins

Moderately affected Unaffected

31% 28% 41%

37% 23% 40%

Chapter 3


Cumulative ImpactsMany of the major catchments in the worldnow contain multiple dams. Within a basin,the greater the number of dams, the greaterthe fragmentation of river ecosystems. Anestimated 60% of the world’s large riverbasins are highly or moderately fragmentedby dams (see Figure 3.6). The magnitude of

river fragmentation can be veryhigh. In Sweden, for example,only three major rivers longerthan 150 km and six minorrivers have not been affectedby dams.46

Although seldom analysed,cumulative impacts occurwhen several dams are built ona single river. They affect boththe physical (first-order)variables, such as flow regimeand water quality, and theproductivity and species

composition of different rivers. The prob-lems may be magnified as more large damsare added to a river system, resulting in anincreased and cumulative loss of naturalresources, habitat quality, environmentalsustainability and ecosystem integrity. Thecumulative impacts of interbasin watertransfers can be of special concern, as thisoften involves the transfer of species intonew watersheds.

The WCD Knowledge Base documents anumber of cumulative impacts that includewater quantity, water quality and speciesimpacts. Flood regimes are clearly affected asincreasing the total storage volume byadding additional dams reduces the floodflows downstream.

In Pakistan, the Tarbela Case Study revealsthat only 21% of the historical dry seasonflow of the Indus reaches the delta; the restis diverted for irrigation and water supply by22 dams and barrages,. Since the Kotribarrage was commissioned in the early1960s, the average number of days with noriver flow downstream in the dry seasonincreased from zero to 85 (the average from1962 to 1997). Similar impacts have oc-curred around the Aral Sea (see Box 3.7)and in Australia where 80 years of riverregulation, construction of additionalstorages, and diversion of water from theMurray Darling River have reduced themedian flow reaching the sea to 21% of thepre-regulated flow.47

Water quality parameters recover onlyslowly when water is released from a dam.Oxygen levels may recover within a kilome-tre or two, while temperature changes maystill exist 100 km downstream. Where thedistance between dams does not allowrecovery to natural levels, the biology ofmany hundreds of kilometres of river may beaffected by a handful of dams. Examplesfrom the WCD Case Studies include theOrange-Vaal river in South Africa, wherethe impacts of 24 dams may have led to2 300 km (63%) of the river having amodified temperature regime. On theColumbia River, Grand Coulee dam re-ceives water that is already high in totaldissolved gasses as a result of upstreamCanadian dams. Before the levels canrecover to natural values, spill at Grand

The Aral Sea, fed by the Amu Darya and Syr Darya, was once the fourth largestinland body of water in the world, ranking just behind Lake Superior. Itsupported 24 species of fish and a fishing population of 10 000 people. A seriesof dams was built on the rivers to feed an immense irrigation system and growcotton on 2.5 to 3 million hectares of new farmland. The withdrawal of water hasreduced the Aral Sea to about 25% of its 1960 volume, quadrupled the salinityof the lake and wiped out the fishery. Pollutants that had formerly fed into thelake became airborne as dust, causing significant local health problems. Theenvironmental damage caused has been estimated at $1.25 to $2.5 billionannually.

Source: Anderson, 1997, Section 1 pii, Section 6 pii.

Box 3.7 Cumulative impact of dams: the Aral Sea

Problems may bemagnified as more large

dams are added to ariver system, resulting in

an increased andcumulative loss ofnatural resources,

habitat quality,environmental

sustainability andecosystem integrity.



Coulee increases them again, passing theproblem further downstream.48 Construc-tion of a series of dams may therefore haveincreasing impacts on downstream ecosys-tems and biodiversity.

Also on the Columbia River, the cumulativeimpact of an additional dam on salmonmigrations is significant. It is estimated that5–14% of the adult salmon are killed at eachof the eight large dams they pass whileswimming up the river.49

What is not well researched is the change inthe magnitude of the incremental responseof ecosystem function and biodiversity as ariver is increasingly fragmented. Thus it isnot known if there is some threshold level atwhich the marginal impacts of the additionof one or more dams to a particular cascadeof dams will begin to decline. It is thereforea case by case call whether the ecosystemimpacts of further modifying a particularriver may at some point be of less conse-quence than, for example, putting the firstdam on a free-flowing river.

Anticipating andResponding to EcosystemImpactsExamination of efforts to counter theecosystem impacts of large dams in theWCD Knowledge Base indicates that theyhave met with limited success owing to:

■ the lack of attention paid to anticipatingand avoiding impacts;

■ the poor quality and uncertainty ofpredictions;

■ the difficulty of coping with all impacts;and

■ partial implementation and success ofmitigation measures.

Anticipating andpredicting ecosystemimpacts

In order for ecosystem impacts tobe addressed properly, they haveto be understood and predicted.The Cross-Check Survey foundthat for the 87 projects thatprovided data on ecosystemimpacts, almost 60% of theimpacts identified were unantici-pated prior to project construc-tion, largely due to inadequatestudies. While the sample size issmall for some time periods, theCross-Check also suggests thatover time the trend is increasing-ly to anticipate impacts (seeFigure 3.7). This confirms theexpectation that the trendtowards the use of environmentalimpact assessments (EIA) wouldresult in improved identificationof potential impacts (see Chapter6 for discussion of EIAs).

Anticipating an impact is,however, not synonymous withaccurately predicting the direc-tion and magnitude of its effecton ecosystems and biodiversity.Nor does it guarantee understand-ing of the further impact of suchchanges on the livelihoods andeconomic welfare of affectedpeople. While the generalisedimpacts of reservoir creation onterrestrial ecosystems and biodi-versity are well-known, specifics,

Global sub-sample:87 dams

Before 1950 (3 dams)

83.3%

16.7%

1950s (8 dams)

79.1%

20.9%

1960s (17 dams)

66.7%

33.3%

1970s (30 dams)

61.4%

38.6%

1980s (17 dams)

40.6%

59.4%

1990s (12 dams)

35.7%

64.3%

Unanticipated

AnticipatedFigure 3.7 Anticipated andunanticipated ecosystem impacts


Chapter 3


such as the net emissions ofgreenhouse gases from aparticular dam site, cannot bepredicted with any certainty atpresent. Further research intothe factors determining netemissions may reduce thisuncertainty over time.

Downstream impacts onaquatic ecosystems and biodi-versity and on floodplainecosystems represent the sumof many complex interactionsand thus are inherently diffi-

cult to predict where baseline data areabsent or unreliable. However, the overalldirection of the impacts is generally nega-tive. As shown for the case of floodplaineffects, the impact of large dams on theseecosystems will vary. With regard to fisher-ies, while it appears that the effect onspecies composition is generally negative atall levels (upstream, reservoir and down-

stream), downstream losses inproductivity may be accompa-nied by increases in reservoirfishery production. Finally, thenature of cumulative impacts asadditional dams are added to ariver system may be significant,but a lack of research on thetopic makes predictive assess-ment difficult.

In sum, past anticipation andprediction of ecosystem impacts was limited,in part due to a lack of reliable baselinedata, scientific uncertainty regarding thenature of the interactions, inadequateattention paid to these issues and a corre-spondingly limited ability to model thesecomplex systems. While improvements inmeasurement, scientific understanding andmodelling capability have occurred over

time, most ecosystem impacts remain site-specific. Their exact nature cannot bepredicted in the absence of appropriate fieldstudies of individual river systems.

Avoidance, minimisation,mitigation, compensation andecosystem restoration

The WCD Knowledge Base reveals thatefforts to avoid or minimise impacts throughchoice of alternative projects or alternativedesigns were more successful than efforts tomanage the impacts once they were builtinto the design of the dam. Avoidance andminimisation of impacts, by their verynature, reduce ecosystem impacts on the siteconcerned. But where alternative sites ordesigns have been chosen, the net conse-quences for ecosystems have rarely beenrecorded.

Project planners and proponents haveemployed five principal measures to respondto ecosystem impacts:

■ measures that avoid the anticipatedadverse effects of a large dam throughthe selection of alternative projects;

■ measures to minimise impacts by alteringproject design features once a dam isdecided upon;

■ mitigation measures that are incorporat-ed into a new or existing dam design oroperating regime in order to reduceecosystem impacts to acceptable levels;

■ measures that compensate for unavoida-ble residual effects by enhancing ecosys-tem attributes in watersheds above damsor at other sites; and

■ measures to restore aspects of riverineecosystems.

The primary option for avoiding ecosystemimpacts from large dams has been not to

Downstream impacts onaquatic ecosystems and

biodiversity areinherently difficult to

predict where baselinedata are absent or

unreliable.



build the dams in the first place. This isgiven a legal basis in Austria, Finland,France, Norway, Sweden, Switzerland, theUnited States and Zimbabwe, where legal‘set-aside’ provisions to protect particularriver segments or basins from regulation ordevelopment have been established.50

Good site selection, such as not buildinglarge dams on the main-stem of a riversystem, and better dam design also playedsignificant roles in avoiding or minimisingimpacts in a number of cases in the WCDKnowledge Base.51 The InternationalEnergy Agency also supported such policiesin its recent policy paper Hydropower andEnvironment.52 As reported earlier, anincreasing number of countries are usingenvironmental flow requirements to mini-mise downstream impacts (see Box 3.4)sometimes in the form of managed floods(see Box 3.6).

Mitigation was the most widely practisedresponse to ecosystem impacts for the largedams in the WCD Knowledge Base. Asnoted earlier, mitigation has failed orworked only sporadically in the case ofwildlife rescue operations and fish passes(Box 3.1 and Box 3.5). In the Cross-Checksub-sample of 87 projects for which ecosys-tem impacts were recorded, mitigation wasundertaken for less than one-quarter of theanticipated ecosystem impacts (10% of allecosystem impacts that occurred). Of theseprojects, 47 also recorded the effectivenessof mitigation measures implemented.Respondents stated that about 20% workedeffectively, 40% did not mitigate the impact,and 40% were moderately effective. Theconclusion can be drawn that only a smallpercentage of ecosystem impacts thatoccurred were actually mitigated effectively,while the relative significance of theseimpacts remains unknown.

While there are cases of goodmitigation, the success is never-theless contingent upon stringentconditions including:

■ a good information base andcompetent professional staffavailable to formulate com-plex choices for decision-makers;

■ an adequate legal frameworkand compliance mechanisms;

■ a co-operative process with the designteam and stakeholders;

■ monitoring of feedback and evaluation ofmitigation effectiveness; and

■ adequate financial and institutionalresources.53

If any one of these conditions is absent,mitigation is unlikely to succeed. Mitiga-tion, though often possible in principle,presents many uncertainties in field situa-tions and is therefore at present not acredible option in all cases and all circum-stances. In addition, the weaknesses of theEIA process for many projects reduces thepossibility of positive outcomes.54 Thissupports the use of alternative strategiesrather than simply one of mitigation.

Compensation for lost resources may be ‘in-kind’ (for example construction of a fishhatchery for lost fish spawning areas) or‘out-of kind’ (for example watershed protec-tion in the upper catchment for loss ofriverine or wetland habitat). Compensationmay also be paid ‘in-basin’ (for examplerestoration of forest area within the riverbasin for forest lost to inundation) or ‘out-of-basin’ (for example assistance in expand-ing management capability at similarlocations in another river basin). These areapplied to offset ecosystem and biodiversityloss, as well as to replace lost productive use

Good site selection, suchas not building largedams on the main-stemof a river system, andbetter dam design alsoplayed significant roles inavoiding or minimisingimpacts.

Chapter 3


of natural resources (as with fishhatcheries). Concerns with theeffectiveness of compensationinclude questions about thepossibility of ‘replacing’ ecosys-tem functions and species (forexample, are fish raised in ahatchery equivalent to nativefish stocks?) and the conse-quences of such efforts, forexample whether fish hatcheriesactually damage native fishstocks through disease andcompetition.

Restoring ecosystemthroughdecommissioning

Ecosystem restoration has beenundertaken in a range of coun-tries where evolving nationallegislation has required higher

standards of environmental performance(see Box 3.8). In the United States andFrance, dams have been decommissioned torestore key environmental values, oftenrelated to migratory fish (salmon), and oftenas a condition of project relicensing.55

Ecosystem impacts of decommissioning arealso complex and site-specific. One majorissue in dam decommissioning is what to dowith possibly polluted sediment accumulat-ed behind the dam. The fate of this sedi-ment when the dam is removed is frequentlya major obstacle to restoration.

Current large dam designs are often notsufficiently flexible to allow for changedoperating regimes to meet environmental(or other) goals. Global experience showsthat these long-lived structures may becalled on to operate differently in the futurethan in the past as society’s needs and valuesevolve and as other dams are added in thecatchment area.

In some cases, the dam design is completedbefore the environmental flow needs aredetermined, and cannot accommodate waterreleases of the required quantity and quality.Five dams on the Colorado River have nowbeen retroactively fitted with variable levelofftakes to draw off surface water, increasethe temperature of the downstream river,and satisfy the needs of native fish.56

Findings and LessonsLarge dams generally have extensive im-pacts on rivers, watersheds and aquaticecosystems. From the WCD KnowledgeBase it is clear that large dams have led to:

■ the loss of forests and wildlife habitat,the loss of species populations and thedegradation of upstream catchment areasdue to inundation of the reservoir area;

■ emissions of greenhouse gases fromreservoirs due to the rotting of vegeta-tion and carbon inflows from the basin;

■ the loss of aquatic biodiversity, upstreamand downstream fisheries and the servic-es of downstream floodplains, wetlands

A total of 467 dams have been removed to date in the United States, 28 of theseare large dams higher than 15 metres. Reasons for removal have included safetyconcerns, the restoration of riverine fisheries, financial considerations, orremoval of unauthorised structures.

One example of a removal is the Grangeville dam on Clearwater Creek, Idaho.Built in 1903, it housed a 10-MW power plant. The removal was motivated byexcessive sedimentation in the reservoir and blockage of migratory fishfollowing the collapse of the fish pass in 1949. The dam was removed in 1963,and the river washed out the accumulated sediment within six months, with norecorded downstream effects. Removal restored access for salmon andsteelhead runs to 67 km of main stem river and over 160 km of tributary habitatin the upper reaches of the Clearwater River. It also allowed members of the NezPerce tribe to regain a traditional fishery long denied them despite theprovisions of the 1855 treaty with the United States.

Source: Bowman et al, 1999, pxix, 27–31.

Box 3.8 Ecosystem restoration through decommissioning in theUnited States



and riverine estuarine and adjacentmarine ecosystems;

■ the creation of productive fringingwetland ecosystems with fish and water-fowl habitat opportunities in somereservoirs; and

■ cumulative impacts on water quality,natural flooding, and species composi-tion where a number of dams are sited onthe same river.

The ecosystem impacts are more negativethan positive and they have led, in manycases, to irreversible loss of species andecosystems. In the Cross-Check Survey 67%of the ecosystem impacts recorded werenegative. The social consequences ofenvironmental impacts are examined inChapter 4.

Efforts to date to mitigate the ecosystemimpacts of large dams in the WCD Knowl-edge base have met with limited successowing to the lack of attention given toanticipating and avoiding impacts, the poorquality and uncertainty of predictions, thedifficulty of coping with all impacts and theonly partial implementation and success ofmitigation measures. More specifically:

■ it is not possible to mitigate many of theimpacts of reservoir creation on terrestri-

al ecosystems and biodiversity, andefforts to ‘rescue’ wildlife have met withlittle sustainable success;

■ the use of fish passes to mitigate theblockage of migratory fish has had littlesuccess, as the technology has often notbeen tailored to specific sites and species;

■ good mitigation results from a goodinformation base, early co-operationbetween ecologists, the dam design teamand affected people, and regular monitor-ing and feedback on the effectiveness ofmitigation measures;

■ environmental flow requirements (whichinclude managed flood releases) areincreasingly used to reduce the impactsof changed streamflow regimes onaquatic, floodplain and coastal ecosys-tems downstream; and

■ avoidance or minimisation of ecosystemimpacts can be achieved through legisla-tive or policy measures that set-asideparticular river segments or basins, orthrough good site selection (such asavoiding main stem dams).

Finally, a number of countries, particularlythe United States, are making efforts torestore ecosystem function and native fishpopulations by decommissioning large andsmall dams.

Chapter 3


Endnotes

1 ICOLD, 1981 and 1988 cited in WCDThematic Review II.1 Ecosystems; IEA,2000, cited in WCD Thematic Review II.1Ecosystems; see also other papers in WCDcited Thematic Review II.1 Ecosystems.


3 Respondents to the Cross-Check Surveyfound that 67% of the recorded ecosystemimpacts were negative.

4 WCD Thematic Review II.1 Ecosystems,section 3.

5 Where there is a loss of vegetation coverthere will be an increase in annual yield, butthe direction of change in dry season flowswill depend on the balance between eva-potranspiration and infiltration effects(Bruijnzeel, 1990). In most cases it isexpected that the evapotranspiration effectwill dominate leading to lower dry seasonbaseflow (Lamb and Gilmour, 2000).

6 The WCD Thematic Review II.2 GlobalChange and a WCD Workshop on the topicprovide reviews of the literature and theperspectives of scientists working in thisfield.

7 The authors stress that the large rangeunderscores the need for further quantifica-tion in order to better understand thecontribution of reservoirs to global GHGs. StLouis et al, in press.

8 Bosi, 2000, p12.

9 WCD Thematic Review II.2 Global Change,Executive Summary, pv.

10 WCD Thematic Review II.2 Global Change;IEA, op cit.

11 To make the comparison with the thermalalternatives requires the measured reservoiremissions to be converted to emissions perkWh generated (see Box 3.2).

12 Values for methane are converted to a carbondioxide equivalent using a Global WarmingPotential of 21 and expressed as grams ofCO2 equivalent (IPCC, 1996, cited in WCDThematic Review II.2 Global Change).


14 Ibid.

15 Field measurements from Rosa et al, 1999.

16 Fearnside, 2000, develops a mathematicalmodel.

17 Emissions per km2 are converted to emis-sions/TWh using the mean annual genera-tion 1995-1999.

18 Dietrich, 1999 env082, WCD Submission.

19 Holden and Stalnaker, 1975, p217, 229.

20 Walker, 1979, p156-57.

21 Thomas, 1998, p2.

22 WCD Thematic Review II.1 Ecosystems,section 3.6.2.2.

23 Collier et al, 1996, p56-58.

24 Abdel Megeed and Aly Makky, 1993, p298;Stanley and Warne, 1993, p628, 630.

25 Bourke, 1988, p117.

26 Balland, 1991.

27 Hynes, 1970, p422-423.

28 Jackson and Marmulla, 2000, ContributingPaper for WCD Thematic Review II.1Ecosystems, p12–13; Larinier, 2000, Contrib-uting Paper for Thematic Review II.1Ecosystems, pii.

29 Hubbs and Pigg, 1976, p115.

30 Walker, op cit, p152.

31 Furness, 1978.

32 For example: Hadejia Nguru in Hollis et al,1993.

33 WCD Thematic Review I.1 Social Impacts,Annex I.

34 Kudlavicz, 1999 env129, p3 and 2000env063, p1, WCD Submissions.

35 Jackson and Marmulla, op cit, p8.

36 Welcomme, 1976, p361.

37 Benech, 1992, p161; Jubb, 1972; Lowe-McConnell, 1985, p120.

38 Lower Volta in Adams, 1992, p145-146;Kassas, 1973; Gammelsrød, 1996, p120.

39 Aleem, 1972, p205; Drinkwater and Frank,1994, p141.

40 Gammelsrød, op cit, p123.

41 Jackson and Marmulla, op cit, ExecutiveSummary piv.

42 Frazier, 1999, p17-18.

43 Ramsar Convention Database, 1999.



44 Davidson and Delany, 2000, Contributingpaper for WCD Thematic Review II.1Ecosystems, p4, 13.

45 Ramsar Convention Database, op cit; Bridleand Sims, 1999, p3.

46 Lovgren, 1999 env136, WCD Submission,p2, 8.

47 Crabb, 1997, p42.

48 This problem is lessened when the water allpasses through the turbines, and there is nospill.

49 Eley and Watkins, 1991, p21.

50 WCD Thematic Review II.1 Ecosystems,section 4.2.1.

51 WCD Thematic Review II.1 Ecosystems,section 6.2.

52 IEA, op cit, p27-29.

53 WCD Thematic Review II.1 Ecosystems,Executive Summary, p xii.

54 WCD Thematic Review V.2 Environmentaland Social Assessment, section 2.5.

55 Bowman et al, 1999, Executive Summary p xii;Epple, 2000 opt136, WCD Submission, p3.

56 US Bureau of Reclamation, 2000a.

People and Large Dams – Social Performance


Chapter 4

People and Large Dams –Social Performance

The social impacts of large

dams – their impact on

people’s livelihoods, health, social

systems, and cultures – are an integral

part of their performance record.

Dams are one of a series of public

infrastructure projects aimed at the

economic development of a region,

nation, or river basin. The direct

benefits they provide to people are

typically reduced to monetary figures

for economic analysis and are not

often recorded in human terms. In

addition, simply accounting for these

direct benefits often fails to capture the

full social benefits associated with

Chapter 4


providing water, electricity, andflood control, and including anyindirect economic benefits ormultiplier effects.

At the same time, however,dams have negatively affectedmany people and societies. Thisis clear throughout the WCDKnowledge Base, most poignant-ly through many of the presenta-tions made by dam-affectedpeoples in the WCD RegionalConsultations and the non-governmental organisation(NGO) hearings in Europe andSouth Africa. Globally, theoverall magnitude, extent and

complexity of these adverse social impactsfor the displaced and for those dependent onthe riverine ecosystem – both upstream anddownstream from a dam – are of suchsignificance as to merit detailed considera-tion in any assessment of the rationale fordam construction. Further, it is apparentthat these impacts are – even today – oftennot acknowledged or considered in theplanning process and may remain unrecog-nised during project operations. Wheremeasures are put in place to mitigate im-pacts on affected people they typically fail toaddress adequately the problems caused bythe decision to build a large dam.

Just as with the economic impacts of largedams, the social and environmental impactsof dams can be classified as gains or lossesaccruing to different social groups – nowand in the future. Analysis of the WCDKnowledge Base, and in particular theWCD Case Studies, indicates that the poor,vulnerable groups and future generations arelikely to bear a disproportionate share of thesocial and environmental costs of large damprojects without gaining a commensurate

share of the economic benefits. Where thebroader costs and benefits – economic,environmental and social – fall unequallywithin society, decision-making on projectappraisal and selection based simply onsumming up the positives and negatives isinadequate on equity grounds. At the sametime it is clear from the emerging experiencewith good practice on benefit sharing mecha-nisms and reparations detailed in the Knowl-edge Base that a continuation of the legacy ofinequity associated with many large dams isnot only unacceptable, but unnecessary.

This chapter uses the WCD KnowledgeBase to present a number of issues of strate-gic importance surrounding the socialimpacts of large dam projects, particularlythose that underpin the growing worldwideopposition to dams by affected communities.To acknowledge the costs in this regard isnot to deny the benefits. However, in orderto provide a foundation for the way forward,it is essential to understand the extent,diversity, and range of social impacts –particularly the adverse impacts. Thisunderstanding must extend to all manifesta-tions and implications for various popula-tion groups; the extent to which suchimpacts were addressed; and the outcome ofmitigation, resettlement and developmentmeasures.

The chapter begins with a brief overview ofsocial impacts during the planning andproject cycle, with an emphasis on the socialcosts and benefits, as well as the indirecteconomic benefits, that accompany damprojects and the services they provide. Theimpacts on people displaced from theirhomes and livelihoods, indigenous peoples,downstream communities, gender, humanhealth and cultural heritage are thenexplored at length. Analysis of the costs andbenefits of large dam projects and their



distribution across different groups in societyleads to conclusions on equity and theadequacy of the ‘balance sheet’ approach ofevaluating large dams. Initiatives addressingequity concerns are then described, followedby conclusions for the chapter.

Socio-economic Impactsthrough the Planning andProject Cycle

Given the different types, sizes and locationsof large dams in the WCD Knowledge Base,generalisations on the socio-economicimpacts of dams are limited and, in manycases the nature or significance of theimpacts are contested. This section brieflyillustrates and characterises the social costsand benefits, and the indirect economiccosts that are associated with the planningand project cycle, with particular attentionto those that accompany the provision ofdam-related services.

Planning and design

At the planning and design stage an impor-tant social impact is the delay between thedecision to build a dam and the onset ofconstruction. Dams are often discussed yearsbefore project development is seriouslyconsidered and once a site is identified aform of ‘planning blight’ can take place,making governments, businesses, farmersand others reluctant to undertake furtherproductive investments in areas that subse-quently might be flooded. Communities canlive for decades starved of development andwelfare investments. A related problem isthe fear felt by many people living in apossible reservoir area. Such psychologicalstress cannot be effectively quantified ineconomic terms, but it is a real issue. At thisstage, project beneficiaries include those

sustained by the business generated by theplanning process, including contractors,consultants and workers employed on theproject. In the case of developing countries,particularly smaller countries with a limited‘dam industry’, foreign consulting firms haveoften undertaken the preparatory studies.1

Construction

During the constructionperiod, dam projects requirea large number of unskilledworkers and smaller butsignificant amounts of skilledlabour. New jobs are thereforecreated both for skilled andunskilled workers during theconstruction phase. TheWCD Case Studies report thatKariba and Grand Couleeemployed between 10 000 and15 000 workers each. Duringthe peak construction period, a labour forceof about 15 000 people was employed atTarbela, helping to build local capacity forsubsequent national development projects.While skilled labour is typically drawn fromthe national labour market, internationalcontractors are often involved at this stageas well. The construction of dams and theirassociated infrastructure bring significantbenefits to the employees and shareholdersof companies engaged in construction andthe supply of equipment and materials.

The beneficial effect on local communitiesis often transient due to the short-lived,pulse impact of the construction economyon dam construction sites. Careful planningmay, however, enhance the ‘boom’ phaseand lead to long-lasting benefits. Roads,power lines, social services and otherinfrastructure installed through the buildingof a dam provide access to previously

At the planning and designstage, an important socialimpact is the delaybetween the decision tobuild a dam and the onsetof construction. This canresult in communities livingfor decades starved ofdevelopment and welfareinvestments.

Chapter 4


inaccessible areas, allowingsettlement and connecting localeconomies to national markets.This has both positive andnegative social impacts. Exposedto the national economy, indige-nous and vulnerable groups findtheir lands and livelihoodsthreatened by forces beyondtheir experience or control.Similarly, existing settlements atconstruction sites have foundthemselves subject to increasedhealth problems (includingmalaria, sexually transmitteddiseases, and HIV-AIDS) and aloss of social cohesion with thelarge influx of outsiders.

Irrigation

As with livelihood enhancement, thebroader impacts of irrigation projects onrural and regional development were oftennot quantified. Dams, along with othereconomic investments, generate indirecteconomic benefits as expenditure on theproject and income derived from it lead toadded expenditure and income in the localor regional economy. The WCD CaseStudies give examples of these ‘multiplier’benefits resulting from irrigation projects. Inthe case of Grand Coulee, agribusiness andlocal communities prospered due to irrigatedproduction yielding multiplier effects of1.5-1.7. Similarly, the Aslantas dam spun offprojects that led to a tripling in agriculturalprocessing and machinery manufacturing forthe area. Beyond these economic impacts,irrigation schemes also produce a series ofindirect social benefits derived from the –typically unanticipated – multiple use ofirrigation water. Estimates of project bene-fits usually rely simply on the expected crop

output and ignore the use of water forhorticulture, livestock and fish production,as well as domestic water supply.2

How much of a stimulus irrigation projectshave provided to wider regional develop-ment is a complex issue that needs moreexplicit recognition during project formula-tion to ensure that the enabling frameworkis in place to encourage growth. In thisregard, regional multiplier effects are usefulindicators of the distribution of projectbenefits to a project region. However, theyrepresent a gain in the economic welfare ofthe nation only when excess capacity(unemployed resources) exists. Where itdoes not exist they simply represent atransfer (or re-distribution) of resourcesfrom one region of the economy to another.

The role of dams in improving nutrition andfood security is contested. Increases in foodproduction from irrigated agriculture maylead to both income and price effects asfarming households in irrigated areas in-crease their purchasing power and the priceof staple foodstuffs falls for urban (and othernon-farming) households. For these house-holds irrigated agriculture and, implicitly,large irrigation dams are likely to havecontributed to greater food security andimproved nutrition at the household level.

At the national level, nutritional levelsincreased over the 25 years from 1970 by14% in India and 30% in China.3 Thesetwo countries are two of the largest buildersof irrigation dams. However, the actualextent of the contribution of large dams tothese improvements is difficult to deter-mine. The India Case Study calculates thatthe share of the total increase in foodproduction from 1950-1993 attributable toadditional land brought under irrigation is



experience in the informal settlements(favelas) in São Paulo, Brazil illustrates thesocial and environmental benefits electricityservices can bring to people (see Box 4.1).As in Sao Paulo, policy measures are in-creasingly used to bring electricity to poorersections of the population. The slum areas inMumbai in India, Manila in the Philippines,and other cities and towns in the developingworld are further examples of such efforts.

Employment

In terms of generating employment, theprincipal impact of large dam projects –aside from construction jobs – arises fromthe new productive enterprises allowed bythe provision of water or electricity. TheCase Studies provide a number of examplesof anticipated and unanticipated employ-ment generation (also see Table 4.1, p121).

10%. The study does not assess the extent ofproductivity gains derived from access toirrigation water. India’s Central WaterCommission puts the share at 30%. In thepast 50 years India achieved a marginalsurplus in terms of per capita food availabili-ty. In percentage terms India also saw adecrease in the share of the rural populationbelow the poverty line. However during thisperiod the absolute number of people belowthe poverty line – that is without capacity tobuy food – increased from 180 million to300 million.4 Again, the precise impact ofdams on these numbers is not known.

National statistics mask significant localvariation. Of concern is that people in food-deficit areas are disadvantaged in terms ofaccess to basic food grains and pay higherprices than those in food-surplus areas.Contributing to these concerns is thetendency of large irrigation schemes to leadto the production of more cash crops thanenvisaged at planning and less food crops (asindicated in Chapter 2). Producing highervalue cash crops is a rational decision forcommercial farmers who may choose topurchase foodstuffs. Once poorer farmersachieve household food self-sufficiency, theywill probably choose to market surplusproduce and, therefore, shift to higher valuecrops. The concern is that those people whodo not participate in the irrigation projector are otherwise marginalised due to damconstruction may face higher food pricesand decreased food security as a result.

Hydropower

New energy services provided by dams havebenefited urban populations and othersconnected to power distribution systems.Typically, in countries with low levels ofenergy services, even small energy inputsbring significant welfare improvements. The

Between 1973 and 1993, São Paulo’s favelas swelled from about 700 000inhabitants to over 2 million. Initially, the squatters’ shacks had only sporadicand illegal electrical connections, partly because the electric utility had noprocedure for electrification of such structures and partly because municipalauthorities thought that improvement of the favelas would condone illegaloccupation of the land.

By 1979, the city and the electric utility, Electropaulo, came to an agreement andconnected some favelas to the grid using simplified installation kits and nometers. Consumers were billed a flat rate, which was subsidised, for a minimalmonthly consumption of 50 kWh – enough to run a couple of lamps and a radioor other domestic appliance. The cost of metering was considered too high forsuch low usage levels.

By 1983, some 100 000 shacks were connected, and the quality of life improved.Better lighting simplified the tasks of cleaning and maintaining the shack andcaring for children and sick people. Without smoke from candles and kerosenelamps health improved. People started to use TV sets, irons and refrigerators.Where water services were provided, electric showers also became morecommon. For the squatters, an important benefit was receiving bills with theirname and address, which gave them a certain social recognition as well asaccess to credit.

A decade later, electricity consumption per shack had increased to 175 kWh.Many of the dwellings had been greatly improved, and services were morereliable. Some demographers attribute the strong decline in Brazil’s populationgrowth rate – from 3.8% per year in 1970 to 1.4% today – to the adoption of newcultural values that spread partly through television, which electricity madeavailable.

Source: Boa Nova and Goldemberg, 1999.

Box 4.1 Bringing electricity to the favelas in São Paulo, Brazil

Chapter 4


In the case of the Aslantas dam, an increasein employment in farming was projected. Itdid not materialise due to a shift to lesslabour-intensive crops, mechanisation and ageneral migration to urban areas. In theOrange River Development Project, al-though farm jobs decreased throughoutSouth Africa from 1960 through the 1980s(the latest period for which data are availa-ble), they dropped less in the command areaof the project. When compared to nationaltrends the loss of at least 4 000 regular jobs

was avoided and effectively some16 000 seasonal jobs werecreated in downstream areas bythe dams and associated irriga-tion development.5 The employ-ment impacts accrued largely toBlack Africans and the ‘Col-oured’ racial groups whorepresented 97% of paid farmworkers.

Employment gains are alsoengendered by hydropowerproduction and other services

provided by reservoirs. In the case of Tucu-rui and Grand Coulee, a sizeable percentageof the power produced goes to industries inthe respective regions. Similarly, the crea-tion of commercial and sport-fishing indus-tries, as well as reservoir-based recreationand tourism, has led to job creation atGrand Coulee, Tucurui and Kariba. Inlandnavigation can also provide substantialemployment. The Panama Canal, based ontwo large dams, directly employs 8 000people on Canal operations and creates jobsin the local shipping services industry andduty-free zone.6 As with any indirecteconomic impact, it is important to considernot just the gross number of jobs created bya project but also whether alternative uses ofproject resources would generate similargains.

Displacement of Peopleand LivelihoodsMany development interventions to trans-form natural resources, particularly large-scale infrastructure projects - involve someform of displacement of people from theirlivelihoods and homes. Large dams areperhaps unique amongst such projects inthat they can have widespread and far-ranging ecosystem impacts due simply to theblocking of a river. The result is a series ofterrestrial, aquatic and riparian impacts thatnot only affect ecosystems and biodiversitybut also have serious consequences forpeople who live both near and far from thedam site. A large, multi-functional resourcebase like a river and its surroundings ischaracterised by a complex web of diverse,interconnected, implicit and explicitfunctional roles, dependencies and interac-tions. Consequently the social and culturalimplications of putting a dam into such alandscape are spatially significant, locallydisruptive, lasting and often irreversible.

Large dams have significantly altered manyof the world’s river basins, with disruptive,lasting and usually involuntary impacts onthe livelihoods and socio-cultural founda-tions of tens of millions of people living inthese regions. The impacts of dam-buildingon people and livelihoods – both above andbelow dams – have been particularly devas-tating in Asia, Africa and Latin America,where existing river systems supported localeconomies and the cultural way of life of alarge population containing diverse commu-nities.

Displacement is defined here as referring toboth ‘physical displacement’ and ‘livelihood’displacement (or deprivation). In thenarrow sense displacement results in thephysical displacement of people living in the

As with any indirecteconomic impact, it isimportant to consider

not just the grossnumber of jobs created

by a project but alsowhether alternative

uses of projectresources would

generate similar gains.



reservoir or other project area. This occursnot only from the inundation of reservoirsbut from the installation of project facilitiesand associated infrastructure. The WCDKnowledge Base records that all too oftenthis physical displacement is involuntaryand involves coercion and force – in a fewcases even killing.

However, the inundation of land andalteration of riverine ecosystems – whetherupstream or downstream – also affects theresources available for land- and riverine-based productive activities. In the case ofcommunities dependent on land and thenatural resources base, this often results inthe loss of access to traditional means oflivelihood, including agricultural produc-tion, fishing, livestock grazing, fuelwoodgathering and collection of forest products,to name a few. Not only does this disruptlocal economies, it effectively displacespeople – in a wider sense – from access to aseries of natural resource and environmentalinputs into their livelihoods. This form oflivelihood displacement deprives people oftheir means of production and dislocatesthem from their existing socio-culturalmilieu. (See Box 4.2) The term ‘affected’thus applies to people facing either type ofdisplacement.

The timing of these social impacts varies,depending on the proximate cause. In thecase of loss of home and livelihood due tothe filling of a reservoir, the social impactsare quite immediate. The implications fordownstream livelihoods, however, come tothe fore only after completion of the dam.At this point they may set in quickly, aswith changes in flow and their impact onrecession agriculture or slowly, as withphysical and chemical changes that aretranslated into degradation of ecosystemfunction and loss of biodiversity.

Scale of physical displacement

The WCD Knowledge Base confirms thatthere are many dams that have causedphysical displacement – and indeed thatlarge dam construction has physicallydisplaced tens of millions of people world-wide in the last half century. The scale andextent of impacts will vary depending onlocation, size and other dam characteristicssuch as inundated area, and populationdensity in the river basin. In the eight WCDCase Studies, the only one without anyphysical displacement was the chain of damsin the Glomma and Laagen Basin. In theCross-Check Survey, physical displacementis reported in 68 of the 123 dams (56%). Ofthe dams in this sample, 52 out of 68 damsare in Latin America, Asia, and sub-SaharanAfrica. Large dams on the main-stem of a

Resettlement programmes have predominantly focused on the process ofphysical relocation rather than the economic and social development of thedisplaced and other negatively affected people. The result has been theimpoverishment of a majority of resettlers from most dam projects throughoutthe world.

According to Cernea’s Impoverishment Risks and Reconstruction model,displacement epitomises social exclusion of certain groups of people. Itculminates in physical exclusion from a geographic territory and economic andsocial exclusion from a set of functioning social networks. Thus, affected peopleface a broad range of impoverishment risks that include landlessness, jobless-ness, homelessness, marginalisation, food insecurity, increased morbidity, loss ofcommon resources, and community disarticulation that result in a loss of socio-cultural resilience.

The key economic risks to affected people are from the loss of livelihood andincome sources such as arable land, common property resources (forests,grazing land, ground and surface water, fisheries, and so on), and changedaccess and control of productive resources. The loss of economic power withthe breakdown of complex livelihood systems results in a temporary orpermanent, often irreversible decline in living standards, leading tomarginalisation. Higher risks and uncertainties are introduced when diversifiedlivelihood sources are lost. Loss of livelihood and disruption of agriculturalactivity can adversely affect household food security, leading to under-nourishment. Higher incidence of diseases associated with deteriorating waterquality can result in increased morbidity and mortality. High mortality ratesimmediately following involuntary resettlement from the reservoir areas of theKariba and Aswan High dams are cases in point. Forced displacement tearsapart the existing social fabric, leading to socio-cultural disarticulation.

Source: Cernea, 1999; Cernea, 2000; Cernea andGuggenheim, 1993; McDowell, undated; Scudder, 1997a,b.

Box 4.2 Economic, socio-cultural, and health impacts of livelihooddisplacement

Chapter 4


river and in densely populatedregions of the world willinevitably displace people. Inthe Cross-Check sample, 26%of dams with a surface arealess than 1 km2 report physi-cal displacement comparedwith 82% of dams over 100km2 in area. Yet the Cross-Check figure may understatethe occurrence of physical

displacement given the larger tendencytowards systematic under-enumerationdiscussed below.

The overall global level of physical displace-ment could range from 40 to 80 million.According to official statistics, dams havedisplaced 10.2 million people in Chinabetween 1950 and 1990 (34% of all devel-opment-related displacement including thatdue to urban construction).7 Independentsources estimate that the actual number of

dam-displaced people in China is muchhigher than the official figure, with 10million displaced in the Yangtze Valleyalone.8 Large dams in India displaced anestimated 16-38 million people.9 Thus, inIndia and China together, large dams couldhave displaced between 26-58 millionpeople between 1950 and 1990. The level ofdisplacement has increased substantiallyafter 1990 with the construction of projectssuch as Three Gorges in China. Among theprojects involving displacement funded bythe World Bank, large dams account for63% of displacement.10

These figures are at best only estimates andcertainly do not include the millions dis-placed due to other aspects of the projectssuch as canals, powerhouses, project infra-structure, and associated compensatorymeasures, such as biological reserves and soon. They also refer to physical displacementonly and thus do not include communitiesupstream and downstream of dams that havesuffered livelihood displacement.

Under-counting of thedisplaced

At the planning stage, the numbers of bothdirectly and indirectly affected people havefrequently been under-estimated (see Box4.3), and there has been inadequate under-standing of the nature and extent of thenegative impacts. In all the WCD CaseStudies, the initial assessments of theprojects failed to account for all the affectedpeople. The level of under-enumerationranges from 2 000 to 40 000 people. Exam-ples from large dam projects in Africainclude the tri-national Ruzizi hydroelectricproject involving Zaire, Rwanda, andBurundi, the Funtua dam in Nigeria, and theKiambere reservoir on the Tana River inKenya, with discrepancies ranging from 1 000

For the Sardar Sarovar project, the 1979 Narmada Water Disputes Tribunal gavethe number of displaced as 6 147 families, or about 39 700 people. The WorldBank’s 1987 mission placed the total at 12 000 families (60 000 people). In 1991,the project authorities provided an estimate of 27 000 families. According tothree state governments, the current estimate of displaced families stands at41 000 (205 000 people). This number will probably increase, since 13 years afterfull-scale dam construction began, resettlement surveys have still not beencompleted. The current estimate does not include at least 157 000 peopledisplaced by canals. Nor does it include those moved to make space for thecreation of a wildlife sanctuary and for the resettlement of people displaced bythe dam, or the 900 families displaced in the early 1960s to make room forconstruction site infrastructure. The nature and extent of the dam’s impact ondownstream livelihoods were not assessed. Serious efforts to survey the affectedvillages and people began several years after the start of dam construction workin response to intense struggles by the affected since 1985.

In 1991, when construction started on the Pak Mun dam, 241 families werecounted as displaced. By the time construction was completed it was clear thatanother 1 459 households had to be relocated. The true extent of the socialimpact only became evident when the impact of the dam on fisheries livelihoodswas admitted in response to prolonged agitation by the affected people. ByMarch 2000, the Thai government had paid interim compensation – pending afinal solution to the permanent loss of fisheries livelihoods – to 6 204 house-holds for livelihood loss during construction.

Source: Sardar Sarovar in Brody, 1999, Contributing Paper for WCD ThematicReview I.1 Social Impacts, Section 5.2; Supreme Court of India, 1999; Morse

and Berger, 1992, p51, 89; WCD Pak Mun Case Study.

Box 4.3 Missing numbers of affected people: Sardar Sarovar project,India, and Pak Mun dam, Thailand



to 15 000 people.11 Similar observationsemerge from other regions.12 Among projectsfunded by the World Bank, the actual numberof people to be resettled was 47% higher thanthe estimate made at the time of appraisal.13

The WCD Cross-Check Survey reveals asimilar trend towards under-estimationinsofar as 35% more people were resettledthan initially planned. This figure mustrepresent a lower bound on the error in theCross-Check dams, given the poor reliabilityof the estimates. Data provided by NGOs aspart of the external review of the Cross-Check Survey confirm this view, as many ofthe actual figures for the physically dis-placed were disputed.

Affected groups that are notcounted or compensated

Surveys of the categories of people to beaffected by dams have generally beeninadequate. The scope of definition of theaffected has been limited, and the totality ofaffected groups has not always been deter-mined. The principal categories excludedfrom assessments include the landless,downstream communities and indigenouspeople. The WCD Case Studies show thatcommunities situated downstream from thedam, those without land or legal title,indigenous people and those affected byproject infrastructure (and not just thereservoir) were not considered as affectedpeople at the time of design.

Among those assessed, compensation hasusually gone only to those in possession oflegal titles, leaving out a large number ofpeople – often the poorest – who depend oncommon resources such as forests andgrazing grounds for subsistence. In the WCDCase Studies on Grand Coulee, Tarbela,Aslantas and Tucurui, only those affectedpeople with legal title were compensated for

the loss of their lands and liveli-hoods. With such criteria foreligibility, indigenous peoples andethnic minorities suffer dispropor-tionately as they may lack citizen-ship, tenancy, or land tenurepapers. One-fifth of those physical-ly displaced by the Kao Laem damin Thailand were from the Karenethnic group. Because they lackedlegal residence permits, they wereconsidered ineligible for resettlement.14

Often, people physically displaced by canals,powerhouses, and associated compensationmeasures such as nature reserves are notenumerated and considered for resettlement.Examples of this type emerge from all partsof the world, including Sulawesi, Indonesia;the Mahaweli Development Programme, SriLanka; and the Sardar Sarovar project,India.15 Further, compensation is often notpaid to those affected by such additionalcomponents of a project.16

While not all large dams have involvedphysical displacement it would be muchrarer to find a river whose natural functionis not used or appreciated by people in somefashion. And in many cases in denselypopulated tropics large dams will lead toboth physical and livelihood displacement.For example, the Urrá 1 dam on the UpperSinú River in Colombia displaced 12 000people but also affected severely more than60 000 fishermen in the lower Sinú, wherethe fish population diminished drastically asa result of the dam.17

Physically displacedpopulations enumerated butnot resettled

Among physically displaced people officiallyrecognised as ‘project affected,’ not all aregiven assistance to resettle in new locations.

Often, people physicallydisplaced by canals,powerhouses, andassociated compensationmeasures such as naturereserves are notenumerated andconsidered forresettlement.

Chapter 4


In India, those actually resettled range fromless than 10% of the physically displaced inthe case of the Bargi dam to around 90% forthe Dhom dam.18 The Yacyreta project inArgentina and Paraguay is a classic illustra-tion of delayed and incomplete resettle-ment. It took the project developers 20 yearsto resettle just over 30% of the displacedpeople, leaving the remainder to be resettledin the less than two years before the reservoirwould be filled. If the experience of other

projects involving large displace-ment in a region is taken intoconsideration, a large proportionof the Yacyreta displaced areunlikely to be resettled.19

The WCD Case Study onTarbela reports that of the96 000 physically displacedpeople enumerated for theTarbela dam in Pakistan, two-

thirds qualified for replacement agriculturalland in Punjab and Sindh provinces. Ofthese, some 2 000 families or approximately20 000 people did not receive land when theamount of land provided by Sindh fell shortof that promised. In the case of Aslantas,only 75 of an estimated 1 000 displacedfamilies asked for resettlement, with theremainder choosing cash compensation. Ofthese, 49 were considered eligible forresettlement and subsequently received newhousing. In the case of Tucurui, of theindigenous groups physically displaced onlythe Parakaná people were resettled; the otherindigenous group that lost land to the dam wasnot considered for resettlement benefits.

In the Grand Coulee project, the Colvilleand Spokane reservation lands, in additionto three towns, were inundated. By thesummer of 1940, the rising water coveredthe first tracts of land and the governmentwas clearing allotments and burning houses.

But none of the owners had been paid com-pensation. The Colville agent reported thatthe Indians were growing resentful, theyneeded money to build new homes andimprove their remaining property and theyknew that white owners across the river hadalready been paid.20 The Colville andSpokane tribes only received cash compensa-tion for reservation land in 1941. Two tribaltowns, Keller and Inchelium, were rebuilt andstill exist today, but other smaller settlementswere lost with the inundation.21

Experience of affected peoplewith resettlement, mitigation,and compensation

Little or no meaningful participation ofaffected people in the planning and imple-mentation of dam projects – includingresettlement and rehabilitation – has takenplace. Involuntary, traumatic and delayedrelocation, as well as the denial of develop-ment opportunities for years and oftendecades, has characterised the resettlementprocess.22 For millions of people on allcontinents, displacement has essentiallyoccurred through official coercion.23 Thestarkest example from the WCD CaseStudies comes from one of the earlier damprojects, Kariba, where the resistance of theTonga people ended with the fatal shootingof eight people.24 The displacement ofpeople at the Sri Sailam project in India in1981 was also achieved through force.25

Eviction of people at the Chixoy dam site inGuatemala led to the killing of about 376Maya Achi people from the submergencearea.26 In implementing the Miguel Alemandam in Mexico, employees from the Papal-oapan River Commission set fire to homesof 21 000 Mazatec Indians who were refus-ing to move.27 In other cases – such as thesubmergence of 162 villages when the Bargidam in India was filled without warning –

Little or no meaningfulparticipation of affected

people in the planningand implementation of

dam projects – includingresettlement and

rehabilitation – has takenplace.



authorities have resorted to evictionthrough the filling of reservoirs prior to thedeparture of the displaced.28

Cash compensation is a principal vehicle fordelivering resettlement benefits, but it hasoften been delayed and, even when paid ontime, has usually failed to replace lostlivelihoods. Compensation is understood torefer to specific measures intended to makegood the losses suffered by people affectedby the dam. It usually takes the form of aone-off payment either in cash or kind forland, housing and other assets.29 The WCDCase Studies show that downstream com-munities affected by loss of floodplainvegetation and fisheries in Tucurui dam inBrazil and Tarbela dam in Pakistan were notcompensated. The Gavaio da Montanhaindigenous people, whose lands were affect-ed by the transmission lines in the Tucuruiproject, were initially not consideredeligible for compensation but were latergiven cash compensation. In the cases ofAslantas (Turkey), Tarbela (Pakistan) andKiambere (Kenya) dams, affected people didnot receive adequate compensation to buyalternate land.30

Further, there have been many cases illus-trating inadequate compensation, unsuitablemitigation, and lack of recourse, includingthe Sri Sailam project in India and the KaoLaem in Thailand.31 Delays in compensa-tion provisions, titles to landholdings andhouses, and provision of basic services haveoccurred. Cases illustrating inordinatedelays – from 5 to 15 years – include theAswan High dam in Egypt, the Nangbeto inTogo, the Akosombo in Ghana, the Itá inBrazil, and the Bhumibol in Thailand.32

Resettlement sites are often selected with-out reference to the availability of liveli-hood opportunities or the preferences of

displaced persons themselves. They haveoften been forced to resettle in resource-depleted and environmentally degradedareas around the reservoir. Such landsrapidly lost their capacity to support theresettled population. Among the earliestinstances is the Liu-Yan-Ba project on theYellow River in China, which displaced40 000 people from fertile valleys andrelocated them to windswept uplands.Erosion and loss of fertility ultimately led tothe abandonment of painstakingly reclaimedfarmland, and the drastic reduction offarmland led to extreme poverty.33 Similarexperiences have been recorded from HoaBinh in Vietnam, Sirindhorn in Thailand,Batang Ai in Sarawak Malaysia, and otherrice-growing East Asian countries with largerural populations.34

The loss of cultivable land and inability togain good-quality replacement land hassignificantly affected indigenous peoples andpeasant farmers. Examples are the Chinan-tec and Mazatec Indians displaced by theMiguel Aleman and Cerro de Orro dams inMexico; the Kuna and Embera people inPanama; the Parakana, Asurini, and Gavioda Montanha people in Brazil; and theTonga in Zambia and Zimbabwe.35

The replacement of agricultural land, basicservices and infrastructure at resettlementsites has often failed to materialise, wasinadequate, or was delayed for many years.Absence of livelihood opportunities forcesaffected people to abandon resettlementsites and migrate. Examples include Tarbela,where allotted agricultural land was of poorquality and basic services such as electricity,health facilities and schools were notprovided. Electricity was only provided after25 years. Similar experiences are recordedfrom resettlement sites at Tucurui, Sirind-horn dam in Thailand, and Akosombo in

Chapter 4


Ghana.36 In northeastThailand, 15 000 farmingfamilies were left withoutlands as a result of failedresettlement schemesbetween 1960 and 1970.37

Government reports inChina characterised reser-voir resettlement problemsas ‘seven difficulties’ (qui

nan) and ‘four inadequacies’ (si cha). Theseven difficulties include shortages ofelectricity, drinking water, schools, food,medical services and means of communicationand transportation. The four inadequaciesrefer to the insufficient amount and poorquality of irrigation, housing, flood controland reservoir maintenance facilities.38

Resettlement programmes have predomi-nantly focused on the process of physicalrelocation rather than on the economic andsocial development of the displaced andother negatively affected people.39 Lack ofaccountability on the part of the state forpromised entitlements has led to poor (andincomplete) implementation of resettlementmeasures. Finally, long delays in the onset ofresettlement programmes are common and

lead to great uncertainty andpsychological and social anxietyfor those awaiting resettlement.These and other problems haveseverely eroded the effectivenessof resettlement and rehabilita-tion programmes in creatingdevelopment opportunities forthe resettled and have height-

ened the risk of impoverishment for thosebeing resettled.

That the livelihoods of those resettled havenot been restored therefore comes as littlesurprise. At least 46% of the 10 millionChinese resettled as a consequence ofreservoirs are still in ‘extreme poverty’.40 In

the case of India, 75% of the people dis-placed by dams have not been rehabilitatedand are impoverished.41 A monitoring studyin 1993 found that 72% of the 32 000displaced people from the Kedung Ombodam in Indonesia were worse off afterresettlement.42 Conditions among the 800ethnic minority Nya Heun families dis-placed by the recently constructed HouayHo dam in Laos are reported to be appalling,with people suffering from severe lack offood, shortage of arable land and insufficientclean water.43

Often the sheer scale and level of displace-ment makes adequate rehabilitation andlivelihood restoration difficult. An inverserelationship between the scale of displace-ment and the possibility of properly carryingout resettlement is evident. For example,the inundation zone of the Danjiangkouproject in the Hubei province of China,implemented in 1958, covered four ruralcounties and 345 villages. Although theChinese Government tried hard in the1980s and 1990s to improve the livingstandards of the physically displaced in theDanjiangkou area, many unsolved problemspersist. In 1996, an estimated 35 000 ofthose resettled around the city of Shiyanhad incomes below the official povertyline.44 And in India, the sheer extent ofdisplacement is making resettlement adaunting task for the Sardar Sarovar project(see Box 4.3). Since the start of the resettle-ment process in 1984, less than 20% of therecognised displaced people have beenresettled.45

Elements for positivemitigation, development andresettlement outcomes

Impoverishment of affected people isincreasingly seen as unacceptable but it isalso unnecessary since there are a wide

An inverse relationshipbetween the scale of

displacement and thepossibility of properly

carrying outresettlement is evident.



range of opportunities available for makingnot only resettlers, but all affected peopleproject beneficiaries. This is in the interestsof all stakeholders since, as beneficiaries,affected people add to the stream of projectbenefits, while reducing costs. The problemof making them beneficiaries lies not withaffected people, who time and again haveshown the capacity to respond to opportuni-ties that are available, but with the inade-quate laws, policies, plans, financing capaci-ty and political will of governments andproject authorities.

For resettlement to lead to the developmentof those resettled, the process has to addressthe complexities of resettlement itself and toeffectively engage the full range of politicaland institutional actors. A positive outcomerequires several enabling conditions such aslow level of displacement, resettlement asdevelopment policy with supporting legisla-tion, a combination of land and non-landbased sustainable livelihood provisions,strong community participation and ac-countability and commitment from govern-ment and project developers.

Providing a legal framework that governsthe process of displacement is important forprotecting rights of affected people. Forinstance, China’s Reservoir ResettlementAct specifies the rights of affected peopleand defines the obligations of the State andthe procedures for settling conflicts and theredress of complaints.46 Recent changes inChinese policy serve as an interesting modelfor other countries. Minimising displace-ment is another enabling condition toeffectively address resettlement needs.

In some cases, project proponents havemade an effort to resettle people as commu-nities in order to minimise socio-culturaldisruptions. In the Kainji project, Nigeria

measures were taken to maintain communi-ty cohesion and identity.47 Social scienceinput had a strong influence in determiningthe outcome there. Baseline demographicand socio-cultural studies played an impor-tant role in informing planners aboutdistinct social and cultural features of peopleliving in the proposed impact areas.

In cases where compensation packages werenegotiated with project affected people andother stakeholders, the process has resultedin fewer instances of injustice andbetter outcomes for the resettle-ment process. Even where every-one may not see negotiatedcompensation as the most appro-priate or effective option, affectedpeople tend to feel more satisfiedfor having engaged in the negoti-ation process, as attested by theZimapan resettlement program inMexico.48 In case of the MubukuIII hydropower project in Uganda,public consultation meetings withUgandan local council system and commu-nity leaders were held for identification andvaluation of land.49 This minimised dis-placement by enabling adjustments to therouting of canals.

The plan developed by the Chinese govern-ment for people affected by the Xiaolangdidam provides an example of an integratedstrategy that combines land and non-landbased activities to ensure livelihoods.50

Resettlement plans focus on building theskills of the adversely affected throughsubstantial investments in imparting new,relevant skills that are in demand in theregional and local economy, enhancementof existing skills, and special measures tofacilitate capacity building amongst women.This approach calls for resettlement plans todevelop linkages between negatively affect-

For resettlement to leadto the development ofthose resettled, theprocess has to addressthe complexities ofresettlement itself and toeffectively engage thefull range of political andinstitutional actors.

Chapter 4


ed people and other sectors of the economy,underlining the importance of incorporatingthe overall development of the affectedeconomy into the resettlement programme.

An inclusive process involving all groups –including host communities – enablesinitiatives to promote resettlement asdevelopment to be managed jointly by thepeople and project and government institu-tions as a long-term process that can con-tribute to the stream of project benefits. In

the case of Itá dam in Brazil, asustained struggle by the localcommunity for proper resettle-ment resulted in joint negotia-tion for benefit-sharing, resettle-ment as a community, andconsultative implementation ofthe programme.51 The accordbetween affected people and theutility Electrosul resulted in acommunity managed resettle-ment programme.

Evolving policy frameworks incountries such as Ghana andChina reflect two of the morepositive attempts to learn from

past resettlement experience. In the Ghana-ian case, with the benefit of the administra-tive continuity of the Volta ResettlementAuthority, planners at Kpong dam were ableto avoid some of the mistakes made earlierat Akosombo.52 While the legal frameworkrelated to land and resettlement is compre-hensive and improvement was noted atKpong, not all good intentions were success-fully pursued.53 China’s resettlement experi-ence before 1980 was in many ways inade-quate, and the new policy sought to improvematters. How effectively such policy im-provements are translated into successfulresettlement and development outcomesremains to be seen.

Past and current experiences of affectedpeople and the rapidly changing contextreinforces the argument that displacementneeds to be located in the broader perspec-tive of the tensions between the local versusthe national and international interests. Justas displacement is not an inevitable conse-quence of infrastructure development,resettlement need not necessarily result inimpoverishment. Empowering people,particularly the economically and sociallymarginalised, by respecting their rights andensuring that resettlement with develop-ment becomes a process governed by negoti-ated agreements is critical to positiveresettlement and rehabilitation.

Indigenous PeoplesLarge dams have had serious impacts on thelives, livelihoods, cultures and spiritualexistence of indigenous and tribal peoples.Due to neglect and lack of capacity to securejustice because of structural inequities,cultural dissonance, discrimination andeconomic and political marginalisation,indigenous and tribal peoples have suffereddisproportionately from the negative im-pacts of large dams, while often beingexcluded from sharing in the benefits.54 Inthe Philippines, almost all the larger damschemes that have been built or proposedwere on the land of the country’s 6–7million indigenous people.55 Similarly inIndia, 40–50% of those displaced by devel-opment projects were tribal people, whoaccount for just 8% of the nation’s 1 billionpeople.56 These costs are not balanced byany receipt of services from dams or byaccess to the benefits of ancillary services orindirect economic multipliers in the formaleconomy.57

In general, development planning andimplementation have inadequately ad-

Empowering people,particularly the

economically and sociallymarginalised, by

respecting their rightsand ensuring thatresettlement with

development becomes aprocess governed by

negotiated agreementsis critical to positive

resettlement andrehabilitation.



dressed the special needs and vulnerabilitiesof indigenous and tribal peoples. In manycases, large dams have only perpetuated thisdisregard and exacerbated the problem –even causing multiple displacements ofthese peoples. The Waimiri-Atroari ofnorthern Brazil numbered 6 000 in 1905.Eighty years later, massacres and disease leftonly 374 Waimiri-Atroari alive. In 1987,the Balbina dam flooded two of theirvillages, displacing 107 people.58 Similarly,in the unique Biobio region in Chile, thePehuenches were pushed higher and higherup in the valley throughout the last century.The Pangue and Ralco projects wouldinundate much of the remaining ancestralland of the Pehuenches.59 For the Ibaloyindigenous people currently living in thefertile Agno river basin in the Philippines,the San Roque dams would be the third toimpact their lands.60 Similar experiences arerecorded in Indonesia, Malaysia, Thailand,Brazil, Argentina, Mexico, Panama, Colom-bia, Guatemala, United States, Canada, andSiberia.61

For indigenous peoples and ethnic minori-ties, dam-induced displacement can trigger aspiral of events that spreads beyond thesubmergence area. A case in point is thesituation of the 100 000 Chakma peopledisplaced by the Kaptai hydropower dam inthe Chittagong Hill Tracts, Bangladesh. Theproject submerged two-fifths of their culti-vable land; as a consequence, 40 000 Chak-ma left for India and another 20 000 weresupposed to have moved into Arakan inBurma. The Chakma have never gainedcitizenship for themselves or their childrenin India. The conflict triggered by landshortage between the Buddhist Chakmapeople and Muslim Bengali settlers has cost10 000 lives since the project was completedin 1962.62

The rights of indigenous peoplesand ethnic minorities are oftenpoorly defined or enshrined in thenational legal frameworks, andconsequently their entitlementshave lacked effective protection.The Bayano dam in Panama thatforced the indigenous Kuna andEmbera peoples from their tradi-tional territories resettled themon land that was less fertile and subject toencroachment by loggers. The Panamaniangovernment systematically failed to fulfilagreements made with the affected indige-nous people at the time of construction, aswell as commitments negotiated later.Among the violations was the government’sfailure to compensate adequately for the lossof traditional territories and provide legaltitles to the new lands.63 What happened inPanama in the 1970s is similar to what hashappened in Malaysia in the 1990s.64 In thecase of the Bakun project, rights to indige-nous common land in the Ulu Belaga sitewere not recognised or properly assessed.65

Industrial countries’ experience with indige-nous peoples in the era of building largedams was not very different from that ofdeveloping countries. Dams built during the1950s and 1960s cost the indigenous nationsof the Missouri River basin in the UnitedStates an estimated 142 000 hectares of theirbest land, including a number of burial andother sacred sites, leading to further impover-ishment and severe cultural and emotionaltrauma. A guarantee used to rationalise theplan – that some 87 000 hectares of Indianland would be irrigated – was scrapped as theproject neared completion.66

Despite changes over the years, new projectsin industrial countries raise similar issues. Acase in point is the second stage of theChurchill Rivers project in Labrador,

Chapter 4


Canada, consisting of two damsand two river diversions that willflood a large area of huntingterritory of the Innu people wholive on both sides of the provin-cial boundary. The Innu haveyet to be clearly recognised asthe owners of their lands, andthe whole area is the subject ofan unresolved Innu land claim

currently being negotiated with the Canadi-an government.67

In the last two decades, international andnational laws progressively aimed at empow-ering indigenous peoples to play a decisiverole in development planning and imple-mentation. Constitutions in some countriesrecognise the vulnerability of indigenouspeople in mainstream development process-es arising from their distinct culture andhistory and have designed safeguards toprotect their rights.68 The scope of interna-tional law has widened and currently includesa body of conventional and customary normsconcerning indigenous peoples, grounded onself-determination. In a context of increasingrecognition of the self-determination ofindigenous peoples, the principle of free,prior, and informed consent to developmentprojects and plans affecting these groups hasemerged as the standard to be applied inprotecting and promoting their rights in thedevelopment process.

Downstream LivelihoodsDownstream impacts can extend for manyhundreds of kilometres and well beyond theconfines of the river channel. The seriousimplications come to the fore only aftercompletion of the dam and a number of theimpacts only develop over time. In general,the downstream riverine communities havelacked social, economic and political power to

seek mitigation, let alone developmentbenefits.

Downstream communities throughout thetropics and subtropics face some of the mostdrastic impacts of large dams, particularlywhere the changed hydrological regime ofrivers has adversely affected floodplains thatsupported local livelihoods through flood-recession agriculture, fishing, herding andgathering floodplain forest products. Thedisruption of downstream economies thatresults from the insertion of a dam and thesubsequent reduction in natural floods cancreate uncertainty in livelihoods and renderexisting skills unproductive – leading tomigration, dependence on informal wagelabour in urban areas and impoverishment.

In northwestern Nigeria, the Bakolori damon the Sokoto River reduced average floodlevels by 50%, leading to a fall in croppedarea of 53% and to a quarter of the house-holds dropping dry-season cultivation as acomponent of their livelihood strategy.69

Similarly, significant impacts on floodplainagriculture are seen in Niger, Chad, Nigeria,Sudan, Senegal and Mali.70 In the case ofManantali dam on the Senegal River,between 500 000 and 800 000 peoplesuffered from loss of access to productivefloodplains that provided most or part oftheir means of survival.71 The creation ofthe Sobradinho reservoir in Brazil affectedthe livelihood of 11 000 farm familiesdownstream from the reservoir who depend-ed on traditional floodplain agriculture.72

The WCD Case Studies reveal that thecumulative impact of Tarbela dam and Kotribarrage has affected the grazing activities ofpastoral communities in Pakistan.

Substantial losses to downstream fisheryproduction as a result of dam constructionare reported from around the world. Alongwith subsistence agriculture, fisheries



constitute an important livelihood activityamong large rural populations as well as animportant low cost source of protein. Manyof these households depend on fisherieseither as their primary or a supplementarysource of livelihood. The impact of dams onfisheries is no less in temperate regions,where salmon runs over large stretches ofriver in North America and Canada havebeen destroyed, affecting the livelihood,food security and cultural organisation ofNative American communities. The GrandCoulee Case Study reports that the loss ofsalmon also had severe cultural and spiritualconsequences integral to the First Nations’way of life. One problem faced by indige-nous peoples who live downstream fromdams in boreal zones is the discharge ofpower generating water on top of frozenrivers during winter, as in case of the Koly-ma River in northern Yakutia.73

Adverse impacts on downstream fisherieshave been severe, even in projects imple-mented in the 1990s. These impacts werenot adequately assessed in, among others,the Urrá I project in Colombia; the Singkar-ak project in West Sumatra, Indonesia; theLingjintan project in China; Theun Hin-boun in Laos; and Pak Mun in Thailand.74

Downstream communities and livelihoodsare typically left out of any explicit reckon-ing of project impacts and subsequent effortsto manage these impacts – apart, perhaps,from installation of fish passages. Oneexplanation for this is that the downstreamcommunities are not only dispersed but alsohave typically lacked social, economic, andpolitical power to press their case for mitiga-tion and development. While the peopleaffected by the flooding of the reservoircould assert their right to mitigation byrefusing to move, those affected downstreamhave no such leverage.

Downstream impacts are notonly among the most signifi-cant unassessed and unad-dressed aspects of large dams,they are also indicative of themagnitude and spread ofimpacts associated with analtered river regime. Theextent to which mitigationand development can bedesigned and implemented toaddress these complex and diverse concernseffectively is open to question. As demon-strated in a case from northern Nigeria, anexamination of the economic value ofdownstream uses of water may also provide aconvincing argument for setting aside damprojects (Box 4.4).

In the case of Manantalidam on the Senegal River,between 500 000 and800 000 people sufferedfrom loss of access toproductive floodplains thatprovided most or part oftheir means of survival.

In northern Nigeria, extensive floodplains exists where the Hadejia and Jama’areRivers converge. The floodplains provide essential income and nutrition benefitsin the form of agriculture, grazing resources, non-timber forest products,fuelwood and fishing for local populations, and help to recharge the regionalaquifer which is an essential groundwater source. However, in recent decadesthe floodplains have come under increasing pressure from the construction ofthe Tiga and Challawa Gorge dams upstream. The maximum extent of floodinghas declined from 300 000 hectares in the 1960s to around 70 000–100 000hectares more recently with plans for a new dam at Kafin Zaki. Economic analysisof the Kano River Project, a major irrigation scheme benefiting from theupstream dams, shows returns to water of $1.73 per 1 000 m3 and when theoperational costs are included, the net benefits of the project are reduced to$0.04 per 1 000 m3.

A combined economic and hydrological analysis was conducted to simulate theimpacts of these upstream projects on the flood extent that determines thedownstream floodplain area. The economic gains of the upstream water projectswere then compared to the resulting economic losses to downstream agricul-tural, fuelwood and fishing benefits (valued at $32 per 1 000 m3 of water in 1989prices). Given the high productivity of the floodplains, the losses in economicbenefits due to changes in flood extent for all scenarios are large, ranging from$3 million to $24 million. As expected, there is a direct trade-off betweenincreasing irrigation upstream and impacts on the floodplains downstream. Fullimplementation of all the upstream dams and large-scale irrigation schemeswould produce the greatest overall net losses, around $20 million.

These results suggest that the expansion of the existing irrigation schemeswithin the river basin is effectively ‘uneconomic’. The introduction of a regulatedflooding regime would reduce the scale of this negative balance substantially, toaround $16 million. The overall combined value of production from irrigationand the floodplains would however still fall well below the levels experienced ifthe additional upstream schemes were not constructed.

Source: Acreman et al, 2000, Contributing Paper forWCD Thematic Review II.1 Ecosystems

Box 4.4 Economic value of downstream floodplains, Hadejia-Nguru,Nigeria

Chapter 4


GenderGender relationships and power structuresare all too often detrimental to women.Extensive research has documented genderinequalities in access to, and control of,economic and natural resources. In Asia andAfrica for example, women may have userights over land and forests, but are rarelyallowed to own and/or inherit the land theyuse.75 Communities near the Tarbela dam inPakistan practised the purdah system(seclusion of women) for centuries. Thissection employs the WCD Knowledge Baseto examine whether dams aggravate, orameliorate gender disparities.

Given the gender-blindness of the planningprocess large dam projects typically build onthe imbalance in existing gender relations.For affected communities dams have wid-ened gender disparities either by imposing adisproportionate share of social costs onwomen or through an inequitable allocationof the benefits generated. However, the WCDKnowledge Base also provides evidence ofcases where dams have served as opportunities

for reducing gender disparities,primarily among women inhouseholds or communities thatreceive access to project services.

Widened genderdisparities

In spite of the fact that manycountries and funding agencieshave adopted specific genderpolicies in recent years aimed atmainstreaming gender issues in

their development interventions, actualproject planning and implementationcontinue to overlook gender aspects. Anassessment by the World Bank’s OED of anumber of World Bank projects noted thatthe experiences studied ‘…were largely

oblivious of the gender aspect of resettle-ment.’76 After the Asian Development Bankapproved a gender policy in 1998, a reviewof its dam projects observed that the impactson gender at the project preparation andimplementation stages were often notconsidered.77 Where planning is insensitiveto gender, project impacts can at best beneutral, and at worst aggravate existinggender disparities to the extent of radicallyaffecting the pre-project gender balance.

Dam projects often impose the gender biasof the developer (typically the state), withnegative effects for local arrangements thatprovide livelihood opportunities for women.When the Mahaweli dam in Sri Lanka wasbuilt the prevalent inheritance rule, whichallowed women the independent right to co-own and control land, was undermined by anew arrangement that allowed the house-hold to nominate one heir, usually a son.78

In tribal communities in India women donot have land rights and therefore they havenot been compensated for the land theyhave lost as users. 79 Instead women’sinterests are seen as linked to the householdand only men and major sons are given landaccording to the local government’s resettle-ment policy for the Sardar Sarovar project.Women traditionally held land rightsamongst the egalitarian Gwembe Tongacommunity in Northern Rhodesia (nowZambia). However, the British colonialauthorities that built the Kariba dam onlyrecognised men as land owners and womenlost their land without compensation duringdisplacement and resettlement.80

Forests, fisheries and other common proper-ty resources, which support subsistencelivelihoods, are often not replaced duringresettlement with women often bearing adisproportionate share of the resulting costs.The Tarbela Case Study notes that women



have suffered more than men have from thedisruption of their social life resulting frominvoluntary displacement from their ances-tral land, which severed their relationshipwith water, forests and other natural re-sources. At the Pak Mun dam the loss oflocal edible plants due to submergenceresulted in loss of income and sources ofsubsistence. Again this affected womendisproportionately, as they are responsiblefor collecting and processing these plants.

The general impoverishment of communi-ties and the social disruption, trauma andhealth impacts resulting from displacementhave typically had more severe impacts onwomen. In Ghana, the general impoverish-ment resulting from involuntary displace-ment associated with the Akosombo damled to increased male migration to urbanareas and an increase in households headedby women.81 In South Africa, farm-workers’households headed by women sufferedunduly during the displacement processcaused by the Gariep and Vanderkloof dams:30% of men-headed households followedfarmers to new farms compared to 15% ofwomen-headed households. As a result, 75%of women-headed households ended upliving for more than one year in the no-man’s land along the highways called thecorridor, where some even gave birth. Asthe Kariba case illustrates, the influx ofimmigrants during construction and theresulting urbanisation can increase levels ofsexually transmitted diseases and, morerecently, HIV-AIDS prevalence rates whichhave negatively affected local women.

Displacement can make women’s positioninside and outside the family more precari-ous. For example, at resettlement sites forthe Sardar Sarovar dam in India, Kariba inZambia-Zimbabwe and Nangbeto dam inTogo-Benin, increased alcoholism markedly

increased domestic violence.82 As men facepowerlessness, women (and children)become scapegoats.83 Reduced fishingopportunities in coastal and mangrove areasdownstream of Tarbela dam destroyed thestructures of families traditionally organisedaround this activity and accelerated maleout-migration. Women faced increasedresponsibilities as de facto heads of house-holds, while household income was severelyaffected.

While women in affected communities beara disproportionate share of the costs, theyhave often had less access to the benefitsgenerated by dams. The employmentcreated during the construc-tion of large dams generallybenefits men, as illustrated inthe Grand Coulee Case Studywhere it was only at the laterstages of the constructionphase that the governmentagreed to hire women, andonly for the administrativeclerical work. The allocationof the irrigated land made available by damsis also often done in a manner that exacer-bates gender inequalities. In the Mahaweliirrigation scheme in Sri Lanka, fully 86% ofthe land allocations were made to men, andonly two local women-headed householdswere granted land. In addition, the preva-lent inheritance rule, which allowed womenthe independent right to co-own andcontrol land, was undermined by a newarrangement that allowed the household tonominate one heir, usually a son.84

Dams as opportunities foraddressing existing inequalities

There are also examples in the KnowledgeBase where dams have provided benefits towomen. As gender is a relational concept,

While women in affectedcommunities bear adisproportionate share ofthe costs, they haveoften had less access tothe benefits generatedby dams.

Chapter 4


access by women to the benefits generatedby a dam is a necessary but not sufficientcondition for positive gender impacts.85 As

these impacts are seldomdocumented, little is knownregarding the ways in whichbenefits generated by damsaffected existing genderdisparities and relationships.Where dams have improvedthe general supply of services,(see Table 4.1) the increasedavailability of water for

household uses, electricity and food(through irrigation) are likely to havebenefited women by reducing time spent onchores and improving nutrition. Wheresocial services are provided as part of reset-tlement programmes, these may represent animprovement compared to the pre-displace-ment situation. For example, 80 000 peopleresettled from the Akosombo dam benefitedfrom services including the following: 82school blocks, 46 markets, 146 publiclatrines, 52 boreholes, 6 wells and 162 waterstand pipes.86

Where dams achieve an improvement inliving standards in impact areas, this canhave a positive spill over effect on genderequity. For example, improved familyincome resulting from irrigated agricultureat Aslantas dam enabled farmers to giveboth boys and girls higher education. This,along with the eradication of illiteracy, hascontributed to ending polygamy in thebasin.

Because gender disparities and even severemarginalisation of women exist in manycountries, large infrastructure projects likedams or their associated irrigation schemescan present unique opportunities for re-forms, in areas like land tenure, that cancontribute to reversing the situation. Cases

in Egypt, Tunisia, and Sri Lanka demon-strate how land tenure reforms have benefit-ed poor people (including women) recruitedas new landholders in irrigation schemes.87

A survey of 32 villages conducted in 1991-92 showed that women owned 6% percentof the almost 2 500 irrigated plots in theMiddle Valley of the Senegal River. Whilethis reflects a continued gender imbalance,in the context of the Senegal valley itrepresents a positive gender impact. Intraditional systems of rainfed and recessionagriculture women and marginal communi-ties had only use and not property rights. Inthis case government agencies used theopportunity of centralised control over theallocation of irrigated land to providewomen-headed households with ownershiprights.88

Cultural HeritageAlthough improvements have been noted inrecent years, potential cultural heritageimpacts are still largely ignored in theplanning process, especially in industrialisedcountries.89 Large dams have had significantadverse effects on this heritage through theloss of local cultural resources (temples,shrines, and sacred elements of the land-scape, artefacts and buildings) and thesubmergence and degradation of archaeolog-ical resources (plant and animal remains,burial sites and architectural elements). Thelatter may be part of the cultural life of localcommunities, or they may predate thearrival of people currently inhabiting thedam site. Shoreline erosion processes canexpose subsurface archaeological remains,encouraging looting and illicit digging forartefacts and valuable remains. Dams canalso cause loss or damage of cultural heritagethrough land reclamation and irrigationprojects and the construction of power lines,roads, railways and workers towns.

Large infrastructureprojects like dams or

their associated irrigationschemes can present

unique opportunities forreforms.



In most cases no measures have been takento minimise or mitigate the loss of culturaland archaeological resources. Affectedcommunities repeatedly raised the treatmentof burial sites at the WCD Regional Consul-tations and other public hearings. Duringthe construction of the Inanda dam inSouth Africa, remains of human bodiesburied under the reservoir site were ex-humed and all buried in one hole, profound-ly disturbing local communities.90 TheGrand Coulee Case Study records thesubmergence of Native American burialsites by the dam waters. The tribes usedfunds provided by the authorities, and theirown means, to relocate burial sites exposedby receding reservoir waters. The risk ofsubmerging ancestral graves is one of themain reasons the Himba people in Namibiaoppose the planned Epupa dam.91

The assessment of lost or buried culturalheritage resources not directly linked tolocal people has been at least equallysignificant, but often more difficult toestimate. The difficulty lies in the fact thatno investigation of cultural and archaeologi-cal resources has taken place as part of theplanning process of most dams. Given thatriver valleys often hosted the most ancientcivilisations, the importance of losses fromexisting dams can be assessed by default, onthe basis of the quality and quantity of findsin areas affected by dams where somecultural heritage assessment did take place.When the Madden dam in Panama droppedto its lowest historical limit in 1998, itexposed thousands of artefacts, culturalfeatures and human burial sites.92 In 1988 inIndia, reconnaissance surveys in 93 of the254 villages to be submerged in the Narma-da Sagar dam impoundment area yieldedhundreds of archaeological sites rangingfrom Lower Palaeolithic to historic templesand iron smelting sites.93

In the WCD Case Studies, twodams – Pak Mun and Aslantas– were redesigned to avoidimpacts on cultural andarchaeological resources. TheAswan High dam, (see Box4.5) admittedly an exceptionalcase, illustrates not only howimportant potential losses ofcultural heritage can be, butalso how efforts to conserve cultural resourc-es can improve understanding of culturalheritage. A study in the United Statesdemonstrated that although submergencemay be a way of preserving archaeologicalresources, it is more cost-effective to exca-vate and manage these resources prior toreservoir inundation than to leave them forpossible future underwater archaeologicalexpeditions.94

Despite the established potential for signifi-cant and often irreversible losses of culturalresources due to dam construction, culturalheritage management is still not adequatelyconsidered in the planning process. InTurkey, for example, only 25 of 298 existingdam projects have been surveyed for culturalheritage, and of these only five have hadsystematic rescue work conducted.95 InArgentina, despite the fact that many

The potential adverse effects of the Aswan High dam on the monuments ofancient Nubia were recognised in 1954, one year after selection of the dam site.Thanks to an international effort driven by UNESCO, the ancient monuments ofEgypt and Sudan were saved from inundation. Equally important, the interna-tional rescue operation led to decades of intensified archaeological research inthe vicinity of the dam, greatly enhancing understanding of the civilisation ofNubia. This radically altered the knowledge of Egyptian archaeology, resulting inthe rewriting of the prehistory of the Nile Valley. What the Director General ofUNESCO called ‘a task without parallel in history’ subsequently led to thelaunch of numerous other operations supported by UNESCO to save worldcultural heritage.

Source: Hassan, 2000, in Brandt and Hassan, 2000,WCD Working Paper on Cultural Heritage Management

Box 4.5 The Aswan High dam: a milestone in the history ofarchaeology

Chapter 4


provinces have updated their legislation oncultural heritage, cultural resources manage-ment activities related to large dams wereeither poorly done or not at all.96

The India Case Study reveals that althoughprojects like Narmada Sagar, Tungabhadra,Bhadra, and Nagarjunsagar have paid someattention to major temples and places ofworship, almost all the dams built so farsuffer from lack of cultural heritage studies(let alone mitigation measures). In China,the Three Gorges Project illustrates thepotential to do damage through neglect ofcultural heritage. The combined problems oftime constraints, under-budgeting, and ashortage of qualified personnel are seriouslyhampering the salvation and preservation ofthe impressive archaeological and culturalsites in the areas to be affected.97

Human HealthEnvironmental change and social disruptionresulting from large dams and associatedinfrastructure developments such as irriga-tion schemes can have significant adversehealth outcomes for local populations anddownstream communities. The issue ofequity – in terms of pre-existing nutritionaland health conditions of the population andthe capacity to resist new health problems –is at the root of the adverse health impactsof dams.98 Among the resettled, access todrinking water, health services and ability tocope with new social and physical environ-ment determines health conditions.

Numerous vector-borne diseases are associ-ated with reservoir development in tropicalareas. Schistosomiasis (or Bilharzia) spreadthrough snails breeding in still or slow-moving waters was a significant publichealth problem that emerged from manyearly projects, such as Kariba, Aswan and

Akosombo.99 Rift Valley Fever has alsospread due to the Aswan and Kariba damsand irrigation systems along the Blue Nile inSudan.100 Most reservoir and irrigationprojects undertaken in malaria-endemicareas increase malaria transmission anddisease.101 The increase was more pro-nounced for dams below 1 900 meters ofaltitude and less pronounced above thataltitude.102 Similarly in India, the SardarSarovar and Upper Krishna projects demon-strated a high potential for malaria transmis-sion in the short term and thereafter leadingto transmission of Japanese encephalitis.103

In new dams in tropical, sub-tropical, andarid regions there is rapid eutrophicationresulting in problems of excessive aquaticweed growth or ‘blooms’ of toxic cyanobac-teria. This is reinforced by enhanced nutri-ent pollution through growth of towns,agriculture and mining operations in thecatchment. In China, a high incidence ofprimary liver cancer has been linked to thepresence of cyanobacterial toxins in drink-ing water.104

Another problem is the accumulation ofhigh levels of mercury in reservoir fish.Mercury, naturally present in a harmlessform in many soils, is transformed by bacte-ria feeding on the rotting biomass in reser-voirs into methylmercury, a central nervoussystem toxin. Alternatively, effluent fromhuman activities such as mining may lead tothe accumulation of mercury in reservoirs.As methylmercury passes up the food chainit becomes increasingly concentrated in thetissue of the animals eating contaminatedprey, potentially threatening human health(see Box 4.6).

Socio-cultural disruptions can be traumaticfor communities. The Kariba Case Studyreports on the strong emotional response of



National Research Institute for Amazoniastudy for Eletronorte underlining theassociation between macrophytes and theproliferation of insect vectors. After Tucuruiwas filled in 1984, an unusual proliferationof Mansonia mosquitoes in rural areas closeto the reservoir forced farm families to leavetheir homes. Test subjects received over500 bites per hour at the height of theinfestation.

Despite several decades of precedence,documented experiences from differentregions, and the availability of sophisticatedassessment techniques and instruments suchas Health Impact Assessment, healthconcerns were not integrated in the designof the dams and infrastructure to the extentpossible. Mitigation suffered from lack ofpreparedness and commitment and healthconcerns were not addressed effectively. For

the Gwembe Valley Tonga to their involun-tary resettlement. When 50 people died amysterious and sudden death in 1959 in theLusitu area, those relocated attributed thesedeaths, together with deaths from dysenteryand measles that occurred earlier in the year,to ‘bad spirits’. The ‘good spirits’ of theTonga had been drowned by the lake andcould no longer protect them from suchailments.

Destruction of community productive basesin agriculture and fisheries can give rise tofood shortages, leading to hunger andmalnutrition. The Kariba Case Study recallsthat the serious food shortages of 1958-60can be largely traced to resettlement-associated factors. Food shortages due toresettlement are also reported in Vietnam,China, Malaysia, Thailand and India.106

In recent years, the high incidence of HIV/AIDS in construction and settlement areasis a growing concern. In the Lesotho High-lands Project Area, infection rates are farhigher than in surrounding areas.107 Com-munities are concerned about transmissionfrom migrant workers arriving to work inthe Maguga project in Swaziland.108

Initial assessment and other availableinformation is often not considered until theimpacts manifest themselves in alarmingproportions and mitigation measures areunprepared and inadequate. When theDiama and Manantali dams were filled inthe mid-1970s, an epidemic of Rift ValleyFever occurred, schistosomiasis prevalencerates reached record levels and riversideinhabitants experienced diarrhoeal disease,malnutrition and malaria.109 All this oc-curred despite the experiences with thetransmission of these diseases from earlierAfrican dams. Among the impact forecastsfor the Tucurui region were the results of a

Mercury can have lasting negative impacts on human health. Levels at 50 to 125mg/kg in human hair indicate a low risk of neurological damage. Foetal damagecan occur at half the lower limit. Clearly defined neurological effects appear atconcentrations of over 125 mg/kg.

In the early 1990s scientists from the University of Helsinki in Finland carried outa series of studies at Tucurui to assess the origins and effects of mercury intropical reservoirs, with co-operation of Brazilian institutions (includingElectronorte – the utility operating Tucurui). The studies provide the followingfindings:

■ Tucunaré fish caught at five locations had an average of 1.1 mg/kg netweight of mercury, more than double the maximum safety level of 0.5mg/kg.

■ the average concentrations of mercury found in hair taken from adults inthe fishing community was 47 mg/kg (with a standard deviation of10.2mg/kg);

■ one individual was found with a concentration of 240 mg/kg ;

■ this concentration was seven times that of non-fish eating people, adultsin this group had fish at meals 14 times a week; and

■ the main source of mercury is gold mining operations upstream.

The WCD Case Study revealed considerable lack of agreement with the resultsof the study on the part of Electronorte. Given the irreversible, accumulating,and serious nature of the health impacts of mercury poisoning further researchto resolve this issue is of great importance.105

Sources: WCD Tucurui Case Study; Jobin, 1999, p175.

Box 4.6 Mercury and human health at Tucurui

Chapter 4


those affected, this translatesinto an increase in pain andsuffering and a decline ineducational achievementand productivity. It can alsoput severe pressure on thecapacities of public healthsystems in developingcountries.

Equity and the Distributionof Costs and BenefitsTo this point, the Global Review hasidentified – and in some cases quantified inphysical, economic, environmental, orsocial terms – a series of costs and benefitsthat arise from the decision to build a largedam. As indicated, shortfalls in technical,financial, and economic performance led asignificant number of the large dams in theWCD Knowledge Base to fail a limited postconstruction cost-benefit evaluation usingthe metric on which they were approved.The Global Review has also established thatbuilding and operating dams has serious –and largely negative impacts – on ecosys-tems, biodiversity and human livelihoods.This chapter has documented a wide rangeof adverse social impacts due to large dams,including displacement, health and culturalheritage impacts. Large dams have alsoprovided substantial socio-economic bene-fits through the delivery of water, electricityand flood control, as well as various ancil-lary services. In many cases these benefitsextend beyond the time frame proposed inthe original project documents

This section shows that large dams in theWCD Knowledge Base tend to producebenefits that accrue to groups other thanthose who bear the social and environmen-tal costs. Those who bear the costs are quiteoften poor, vulnerable (such as indigenous

peoples), or unrepresented (such as futuregenerations). Considering present societalcommitments to human rights and sustaina-ble development it is clear that dams in theKnowledge Base have led to inequitableoutcomes. In the light of the range ofopportunities that exist for making affectedpeople beneficiaries and enabling them tocontribute to the stream of project benefits,such outcomes are unacceptable on equitygrounds.

In the past, if the expected benefits of a damexceeded the predicted costs the projectwent ahead. The narrow nature of thetechnical and economic analyses undertak-en does not necessarily mean that publicauthorities that chose dams as a develop-ment option were unaware of the social andenvironmental costs. Rather, within thecontext of knowledge available and thevalue system of those making decisions atany given time, the sacrifices were judged tobe worth the benefits of pushing ahead withthe project. This approach to decision-making continues largely intact today.

The emergence of equity as a critical ingre-dient of development underlines that this‘balance sheet’ approach is unacceptable asit ignores the typical mismatch between thedistribution of the gains and losses of aproject across different societal groups. Largedams can be seen as an extreme example ofthis dilemma, as public resources – bothmonies and rivers – are devoted to projectsthat all too often result in inequitabledistribution of costs and benefits.

This section uses the benefits and costs ofthe large dams in the WCD Case Studies toillustrate and examine these issues. First, itpresents the typical approach to balancingcosts and benefits along with an overview ofthe benefits generated by the dams in the

After Tucurui was filledin 1984, an unusual

proliferation ofMansonia mosquitoes in

rural areas close to thereservoir forced farmfamilies to leave their

homes.



case studies. Then it discusses the distribu-tion of project gains and losses to differentgroups with the assistance of a review of thegroups adversely affected by the case studydams. Using this information it draws theimplications for equity and the balance-sheetapproach. The chapter closes with a presenta-tion of recent initiatives that have addressedthe past legacy of inequity and providedguidance on mechanisms for benefit sharing.

Benefits, costs and the balancesheet approach to net benefits

Each WCD Case Study dam generated anumber of services and benefits for people

(see Table 4.1). The Kariba dam, for in-stance, provided inexpensive electricity tothe mining sector and urban areas of Zambiaand Zimbabwe and also contributed to theeconomy through tourism, irrigation andcommercial fishing, creating thousands ofjobs, directly or indirectly, in these sectors.Tucurui dam supplies electricity to industryand to two Brazilian states (Para and Mara-nhao) that depend almost entirely on it fortheir supply (97% and 100%, respectively).

The 84 000 ha of land irrigated by theAslantas dam has led to substantial im-provements in the living standards of

seidutSesaCDCWehtnismadegralybdetarenegstifenebdnasecivresehtfonoitartsullI1.4elbaT

stifenebdnasecivreS seiraicifenebotecnacifingiscimonoce-oicoS

nisaBnegaaL&ammolG)8991(ry/hWG54101:yticirtcelE

noitcetorpdoolF

■

■

morfseunevercilbuP;seirtsudnidna,srenwodnal,stnedisernisabnoillim3.1detifenebyticirtcelEL&Gottnew%08hcihwfo8991ninoillim06$dnuorafoaeraL&Gnisnoitallatsnirewop

rotcesrewopaeraL&Gehtnideyolpmeyltnenamreperaelpoep053,2;.noiger%02ybdecuderskaepdoolF

eeluoCdnarG:yticirtcelE 05042 )8991-5991(ry/hWG

detagirriah007672:noitagirrIry/srotisivnoillim3:msiruoT

■■

■

.saeranabrudnaerutlucirga,rotceslairtsudniotylppuS)8991(noillim736$SU:noitcudorpfoeulav;smraf0041tuobA

nisaeranoitaercerdnaskrapdnaseitilicaftsiruotrojam44ecivresotdetaercsbojfosdnasuohT.aeratcejorpeht

abiraK)6991(ry/hWG0683:yticirtcelE

ry/srotisiv000584:msiruoTmorfraey/atnepakfosnot05232:gnihsiF

ekaLabiraKdetagirriah0072:noitagirrI

■■■

■

sremraflaicremmocdnasnoitalupopnabru,rotcesgninimehtylniamgniylppuS.riovreserehtnodehsilbatse)sdeb000,1tuoba(sletoh02

seinapmocgnihsifatnepaklaicremmocylniamstifenebyrehsifehT

semehcsnoitagirrinisbojlausac000,3dnatnenamrep054alebraT

seilppusretawlaunnalatotfo%9:noitagirrInoillim81ehtrof)nosaesyrdni%22(

metsyssudnIehtfoseratceh)8991(ry/hWG00151:yticirtcelE

tnemyolpmealebraT

■

■

■

srekrowdetaicossadnadnaldetagirrifosredlohfosnoillimgnitifeneB

dirglanoitandetcennoc-retniehtmorfnoitarenegrewoplaunnas’natsikaPfo%82sedivorPmetsys

noitagirridnayrtsudni-organitnemyolpmeyradnoces;tcejorpehtnisbojtnenamrep0004foolKrednaVdnapeiraG

seratceh000461-000831:aeradetagirrI 011

)8991ot1791gva(ry/hWG066:yticirtcelEraey/3mM151:ylppuSretaW

ry/srotisiv000002:msiruoT

■■■■

)denibmocruoballanosaesdnaraluger(devasrodetaercstinuboj00004dirglanoitanotylppuS

srefsnartnisab-retnihguorhtseiticdnarotceslairtsudniotylppuS)sdeb0001tsaeltahtiw(deifitnediseitilicaflanoitaercer81nideyolpmeelpoep002

satnalsAseratceh00048:aeradetagirrI 111

)99-5991gva(ry/hWG056:yticirtcelE

■

■

eulavssorG;)ecrofruobalmraflatotniesaercedtub(elpoep00008roseilimafmraf00011revOstinulairtsudni-orga001tuobastroppuS,noillim061$noitcudorpfo

nisabehtniseirtsudnidnaseitilapicinuMiurucuT

-5991(ry/hWG00032ot00002:yticirtcelE)8991

ry/snot0023:seirehsiFriovreseR

■

■

htiwdeilppuselpoepnoillim8.yticirtceleehtfoflahrevosemusnocyrtsudnimunimulAlizarBnrehtronniyticirtcele

seirehsifecnetsisbusdnalaicremmoCnuMkaP

)99-5991gva(ry/hWG092:yticirtcelE)tcejorp-erpdetsixe(msiruoT

■■

dnaliahTfonoigertsaehtroNotylppuS)tcejorp-erpnahtssel(9991nieuhpaSgneKnisrotisiv000,041

seidutSesaCDCW:ecruoS .

Chapter 4


thousands of farmers, whilethe electricity supplied by thedam has benefited municipali-ties and industries in the basin.Grand Coulee dam in theUnited States irrigates morethan 276 700 ha, generates24 050 GWh per year, andtogether with Lake Rooseveltand the Columbia Basinirrigation project is the basis

for a flourishing tourism sector with 3 millionvisitors annually. Tarbela dam generates28% of Pakistan’s electricity. In addition,the dam provides over one-fifth of the waterin the dry season for the massive Indus Basinirrigation system. Gariep and Vanderkloofdams in South Africa irrigate more than160 000 ha in the most arid provinces of thecountry and, despite the fact that they werebuilt during the Apartheid era, they created(or saved) jobs that mostly went to then-marginalised groups. Through inter-basintransfers, the Orange River DevelopmentProject dams have also supplied fresh waterto distant cities and industrial areas.

In many cases the exact number of benefici-aries is not known, particularly where thewater or power is connected to a commontransmission or distribution system. Still, it ispossible to roughly approximate these num-bers, for example, the hydropower dams in theGlomma and Laagen system supply electricityto 1.3 million people living in the basin.

These benefits need to be viewed in thecontext of the costs implied, especially theeconomic, social and environmental costsdocumented earlier in this chapter. Forexample, in the case of Tucurui the economiccosts and benefits of power production must bebalanced against a series of social and environ-mental impacts, including those alreadyreferred to in this chapter and Chapter 3:

■ loss of 285 000 hectares of tropical forestand associated populations and species ofwildlife;

■ the suffering of communities subject toforced displacement and the plague ofMansonia mosquitoes;

■ the risk of mercury poisoning;

■ the loss of downstream fisheries andagricultural productivity; and

■ the physical and livelihood displacementof the Parakana, Gavio da Montanha,and Asurini peoples.

Furthermore, there is no agreement onwhether the net greenhouse gas emissionsfrom the reservoir, spillway, and turbines areoffset by the saving in emissions from fossilfuel sources made possible by the largeamount of power produced by Tucurui.

Clearly, in the case of large dams thatproduce a multitude of benefits and costs,the application of a balance-sheet approachis not easy to do in a comprehensive fash-ion. In many cases the benefits and costs(especially social and environmental costs)are not of the same currency and cannot beexplicitly weighed against each other.

The Commission asked participants in thefinal WCD Case Study stakeholder meet-ings for their views on the overall develop-ment impacts of the WCD Case Studydams. Some stakeholders were able – intheir own minds – to sum up the positiveand negative aspects of a project. Othersrejected the questions as too simplistic anapproach to a very complex, multi-dimen-sional problem. The Global Review itselfdemonstrates that poor accounting ineconomic terms for the social and environ-mental costs and benefits of large damsimplies that the true economic efficiencyand profitability of these schemes remains



largely unknown. In addition, as covered inmore detail in Chapter 6, even efforts toextend traditional cost-benefit analysis tocover this task have failed to accommodatethe myriad impacts and concerns that arise.

Who gained and who lost?

One of the drawbacks of the approach takenabove is that it reduces the benefits andcosts of large dams to abstract flows (ornumbers), and hides the impacts that havehad very real consequences for people andecosystems. An analysis of the distributionof costs and benefits – that is who gainedand who lost – provides another method ofassessing costs and benefits of large damprojects.

Re-distribution of access toresources

The construction of a dam requires aninvestment of human-made capital and, as aresult, generates a series of new entitlementsthat are then distributed – either throughpolitical-administrative means or throughmarkets – to members of society. At thesame time, the construction of a large damwill have profound effects on the naturaland social landscape of the setting in whichthe dam is located. These changes will affectthe legal, customary, or de facto entitle-ments to natural resources, environmentalquality and socio-cultural integrity experi-enced by local communities and othersholding rights to the resources in the area.

Dams are unique among large infrastructureprojects in the scope and manner in whichthey affect the pattern of access to resources,and their distribution across space, time, andsocietal groups:

dams take a set of resources – a riverand the lands along its banks, generatingfood and livelihood for local people; and

transform them into another set ofresources – a reservoir, hydro power andirrigation, providing benefits to peopleliving elsewhere. There is a sense,therefore, in which large dams exportrivers and lands, removing them fromthe productive domain of one communityto make them available to another.112

Grand Coulee provides a vivid example.Native Americans were physically dis-placed by a project that provided power toindustry and households in a citysome 250 km away. Furthermore,the water and land that hadpreviously supported theirlivelihoods (particularly thesalmon fishery) was dammedand diverted to provide whitesettlers with irrigated farmland.

In other cases, the resources astransformed simply continued tobenefit those who previously hadaccess to them. The Tarbela damillustrates this: in addition tosecuring existing water supply, the expan-sion of the cropped area by 39% and theincrease in the cropping intensity haveprimarily benefited those owning land priorto the construction of the dam.

In the cases listed the distribution of projectbenefits was explicit. In other cases, however,particularly where ancillary benefits areconcerned, the redistribution of resourcesand benefits happens in a haphazard fash-ion. The illustration provided earlier of theincrease in fisheries in the Tucurui reservoiris an example. In this case, those living nearthe reservoir have benefited while thoseliving downstream from the dam have seentheir fisheries decrease substantially. Simi-larly, the India Case Study noted that inmany irrigation dams, people lose access to

Poor accounting ineconomic terms for thesocial and environmentalcosts and benefits oflarge dams implies thatthe true economicefficiency andprofitability of theseschemes remains largelyunknown.

Chapter 4


their forest and highly preservednatural resources along the river togive way for a dam that irrigatesland for downstream people whohave often overexploited theirlocal natural resources. Theseexamples show that even if nointentional redistribution is made,a dam can effectively take aresource from one group andallocate it to another.

Finally, the impacts of large damson ecosystems and biodiversity have conse-quences for future generations. Dams arelong-lived assets and thus are designed toprovide benefits beyond the medium term.The decision to dam a river and the ensuing

effects on the environment will likewisehave many lasting and even irreversibleenvironmental impacts.

Profile of adversely affected groups

The WCD Case Studies show that thedirect adverse impacts of dams have fallendisproportionately on rural dwellers, subsist-ence farmers, indigenous peoples, ethnicminorities, and women (see Table 4.2).These groups, who are also often the poorestsegments of society, tend to be over-repre-sented in the numbers of people who aredisplaced from reservoirs sites or lose accessto their traditional livelihoods. Within thedisplaced, compensation programmes tendto ignore livelihood impacts on landlessgroups and women. In downstream areas,

The WCD Case Studiesshow that the direct

adverse impacts ofdams have fallen

disproportionately onrural dwellers,

subsistence farmers,indigenous peoples,

ethnic minorities, andwomen.

seidutSesaCDCWmorfsnoitartsulli:smadegralybdetceffaylesrevdaspuorgfoeliforP2.4elbaT

tcejorpmaD elpoepdecalpsiD elpoepdecalpsidfoeliforP detceffaylesrevdasrehtO

negaaLdnaammolG07-5491

.decalpsidenoN .ydutsesacnidetnemucodenoN

eeluoCdnarG57-4391

0056ot0005.elpoep

sebirtenakopSdnaellivloCmorf0002ot0031.sreltteseratser;s0991litnudetasnepmocton

spuorgnoitaNtsriFfosrebmemdnasuohtlareveSnaidanaCdnaecrePzeN,enakopS,ellivloC(

,nisabmaertspuehttuohguorhtdetacol)sebirtfoegakcolbdnasllafgnihsiffognidoolfoteud

.nomlas

abiraK95-5591

.elpoep00075 niytironimcinhte;sremrafecnetsisbusagnoT-ecruosernidelttesererewtsom;ewbabmiZ

.saeradetelped

nialpdoolftsolelpoepmaertsnwodfosdnasuohTdecneirepxestnatibahniedisekaldnasdoohilevil

.sisaimosotsihcsfoecnelaverpdesaercni

alebraT67-8691

.elpoep00069 -imesrosnasitra%5;sremraf%39fodesopmoC.nemtaob%2dna;srekrowdelliks

fospuorgtsacwol,elpoepsseldnal,stsilarotsaPsrevaewdna,srekamteksab,nemtaob,klofrehsif

dna,stserof,sdnaltewfossolmorfdereffus.gnizarg

dnapeiraGfoolkrednaV

s0791etalot3691

:elpoep0831etihw04foseilimaf

081dnasremrafsrekrowmrafkcalb

ylriaferewyehttlefsremrafetihwtsoMtonerewsrekrow-mrafkcalB.detasnepmoc

devomyllautnevednanoitasnepmocrofelbigile.saeranabrudnasmrafrehtoot

noillim1erehw,revirehtgnolagnivilsremraFgnitibfonoitarefilorpmorfdereffuspeehs

.sessolkcotsevilotgnidaelylfkcalb

satnalsA58-5791

.seilimaf0001 naeporuEnretsaEmorfstnargimmiremrofyltsoMezis-muidemdnallamsfodesopmoc;seirtnuoc

.seilimafsseldnaldnasrenwodnal

sitihguohtla,ydutsesacnidetnemucodenoNerewtahtstseroffosresuyramotsuctahtdemialc.detceffaylesrevdatsomehterewdesingocerton

iurucuT58-5791

elpoep00053-52sulp

.selpoepsuonegidni

dna,stsilarotsap,klofrehsif,sremrafecnetsisbuSerasetupsid7422fo621(srotavitlucknabrevir

).delttesteyton

,stsilarotsap,sremrafecnetsisbus(elpoep000001tnedneped-secruoser-larutanrehtodna,klofrehsif

,ytilauqretawdecuderybdetceffa)seitinummocdesaerceddna,noitavitlucdebrevirfossol

.snoitalupophsifmaertsnwod

nuMkaP49-1991

.seilimaf0071 dnagnimrafecirnotnednepedseilimaflaruRotdeliafnoitasnepmochsac;emocniseirehsif

.noitarenegerdoohileviledivorp

sremrafecnetsisbusfoseilimaf0006nahteroMmorfdoohilevilfossoldereffusklofrehsifdna

.noitcuderseirehsif




communities suffering from altered riverflows are mainly subsistence farmers whoselivelihoods are largely based on the exploi-tation of resources offered by the naturalflow of the river (fisheries, floodplainfarmlands and pastures).

Finally, to the extent that burgeoning popula-tions are at once evermore reliant on adegraded natural resource base and demandmore environmental quality (as incomes rise),future generations are also likely to beamong the adversely affected. Where theperformance of large dams in economic termsfalls short, future generations may also bear adisproportionate share of the costs without acommensurate share of the benefits.

Profile of beneficiaries

As noted earlier, dams have benefited thegeneral public through their contribution tofood production and increased access toelectricity, along with providing other directbenefits and multiplier effects. The preced-ing sections of this chapter have also includ-ed some specific examples of how the directand indirect benefits of large dams havebeen shared with the poor, such as throughthe provision of water supply, electricity,employment on construction sites and jobsin dam-based irrigation, industrial andtourism industries.

Examination of the Case Study damsconfirms that those who receive the bene-fits, usually urban dwellers, commercialfarmers and industries, are typically not thesame groups that bear the social costs.Immigrants generally provide most of thelabour force in construction works (qualifiedand non-qualified jobs). They develop andoperate tourism facilities and managecommercial fishing companies (Kariba).While many small to medium farmersparticipate in irrigation schemes (Tarbela,

Aslantas, Grand Coulee) suchschemes also benefit largelandowners and those fromprivileged groups (OrangeRiver). Electricity generation hasmostly benefited the industrialand mining sector (Kariba,Tucurui) and urban areas (GrandCoulee, Pak Mun). Flood controlis provided to urban areas(Grand Coulee as part of theColumbia River system) as wellas rural areas (Glomma and Laagen). Freshwater supplied by dams is mainly directed tothe industrial sector and urban areas.

Equity

The Case Study dams demonstrate a lack ofconnection between groups benefiting fromdam projects and those adversely affected,confirming the general finding from theKnowledge Base. Assessment of thesedistributional impacts of a dam does not inand of itself provide a value system toprescribe what should be done in judgingprojects and confronting the distributionalissues raised. Judging the social and moralacceptability or fairness of the patterns ofdistribution of positive and negative impactsis an equity issue. The debate on the socialimpacts of dams is thus about the equitydimension – whether the distribution ofcosts and benefits is judged to be fair or just.A strong equity constraint dictates thatthere be no losers, that those who bear thecosts from large dams should receive aproportionate amount of benefits. However,equity often speaks more to the costs ofdams than to their benefits, directingattention to those who are most at risk. Thisspeaks to the vulnerabilities of isolated, lesspowerful populations for whom ‘develop-ment’ can all too easily mean loss. Putsimply, a large dam that renders the poorand the vulnerable worse off is inequitable.

Chapter 4


Implications for the balance-sheetapproach

That large dams in the Knowledge Basehave led to inequitable outcomes challengesthe assumptions that underpin the ‘balancesheet’ approach and hence the idea thatsimply ‘adding’ up the costs, benefits, andimpacts of large dams will lead – all thingsconsidered – to the best choice for society.Indeed, there are significant moral andethical concerns that such a balance-sheetexercise does not address. It is implicitly

based on the assumptionthat if the overall balance ofimpacts is positive, thenthose who gain would sharethe benefits with those wholose out. Thus, all would bebetter off in the end. How-ever, examination of thedistribution of gains andlosses in the case studiesdemonstrates that suchbenefit sharing has seldomoccurred. Those who bear

the social and environmental costs and risksof large dams are frequently not the samepeople who receive the social and economicbenefits of the water, electricity, and ancil-lary services that dams produce.

The importance of the distribution analysisof impacts and the concept of equity todecision-making can be understood asfollows. If the loss of access to previoussources of livelihood is offset by access tonew benefits made available by the dam,former resource owners and users can havedifferent but better living conditions thanbefore. If loss of ecosystem function resultsfrom large dam projects the resulting costsmay be included on the balance sheet. Inother words, adverse social and environmen-tal impacts of large dams do not, by them-

selves, invalidate the balance-sheet ap-proach. Rather, the crucial distinction is thefailure to balance the loss of entitlementsthat some groups experience with a corre-sponding gain in new entitlements.

The lack of validity of the balance-sheetapproach in such a situation is confirmed byeconomic theory. Where costs and benefitsaccrue to different groups, the standardprocedures for adding up and discounting theexpected costs and benefits do not provide anappropriate measure of changes in societalwelfare.113 In order to apply the balance sheetapproach equitably, the costs to affectedgroups need to be minimised and an equita-ble share of benefits ensured. With regard tothe environment and intergenerational equitythis implies the need to ensure that ecosystemneeds are met in the present so that futuregenerations can have access to a non-declin-ing income stream, to which natural capitalmakes an important contribution.114

Initiatives for the equitabledistribution of costs andbenefits

The major equity issues arising from thediscussion of the distributional impacts oflarge dams is the impoverishment of thosewho previously inhabited the reservoir siteand those who derived their livelihood fromthe resource base that is transformed by damconstruction and operation. There is injus-tice when the rights of physically displacedpeople are violated, including when theylose their land and access to the river andwhen downstream people experiencereduced access to floodplains and fisheries,but are excluded from access to projectbenefits. Societies are increasingly rejectingthese outcomes and searching for moreequitable solutions.

Where costs and benefitsaccrue to different

groups, the standardprocedures for adding up

and discounting theexpected costs and

benefits do not providean appropriate measure

of changes in societalwelfare.



Chapter 3 has already covered the measuresthat are available to avoid, minimise orreduce the ecosystem impacts of large dams.These are likely to be an important compo-nent of efforts to resolve intergenerationalissues or social inequities that are linked toecosystem impacts. This final section of thechapter describes some recent initiatives toexplicitly confront past social inequitiesthrough reparations or to ensure that newprojects deal with equity issues in a proac-tive manner through benefit sharing.

Progressive national legislation andpolicies

Adopting a benefit-sharing approachrequires that the project design and plan-ning process consider such mechanisms fromthe outset.115 Progressive national legisla-tion and policies provide the legal frame-work and standardise benefit sharing, thushaving a far broader impact than projectlevel approaches. This approach has beenwidely implemented in the energy sectorwhere project proponents allocate a per-centage of the electricity sales revenue toresettlers and local administrative units.116

Examples include, the Lubuge, Yantan,Shuikou and Ertan Hydroelectric projects inChina, the Rio Grande HydroelectricProject in Colombia, as well as severalprojects in Brazil (see Box 4.7). Othermechanisms for benefit sharing include thesupply of energy at preferential rates (asrequired in Norway) and payment of proper-ty or local government taxes (as required inFrance and Norway) which are assigned toaffected areas.117

Japan’s Act on Special Measures for Reser-voir Area Development provides variousmeasures for people who are affected by adam project and for the development ofareas around the dam/reservoir.118 The Actprovides for a combination of measures,

including compensation for property and otherlosses, improvement of the living conditionsand industrial base of the affected area, andmeasures for resettling people through theFund for Reservoir Area Development. Thebeneficiary municipalities, affected munici-palities and central government contributeto this Fund, which finances developmentin the reservoir area. The Fund also pro-motes solidarity between the downstreambeneficiaries and the displaced people.119

In the Senegal River valley, state-leddistribution of irrigated land gave lowercaste groups access to land ownership,previously denied to them under traditionaltenure systems.120 The India Case Studyprovides examples of agriculture and home-stead land being provided even to those whowere landless as part of resettlement process-es. In some cases, previously marginalisedfarmers were given more land than they hadoriginally.

A comparison of access to electricity inZimbabwe and South Africa documents the

In Brazil, Law No. 7990, dated 28 December 1989, requires that royalties be paidto the federal government for using water for power generation purposes. Theroyalties paid by each power plant generating more than 10 MW represent 6%of the value of the power produced. The royalties are distributed as follows: 10%to the federal government, 45% to the state(s) where the venture is located and45% to the municipal districts affected by the venture. The total amount paidout by the Tucurui dam in 1996 reached $19 million, with the total royalties for1991 through 1996 topping $103 million. The Itaipu dam, in the south of Brazil,pays annually about $13 million in royalties. The royalties are among the leadingsources of income for some of the municipal districts.

However, royalties by themselves will not address social injustice, as the waythey are used to benefit local government units depends on broader politicaland social factors. In some cases the allocation of these resources is done in anon-transparent way. In others, results are visible. A municipality like Itaipulandiahas paved all the roads in the city and provides agricultural supplies to thepopulation. In addition, local young residents are funded to study at Brazilianuniversities on the condition that they return to the community for five years.

Source: WCD Tucurui Case Study; Itaipu dam in Ferradas,

1999, WCD Contributing Paper for Thematic Review I.1 Social Impacts

Box 4.7 Royalties to communities: a Brazilian law for hydropowerbenefit-sharing

Chapter 4


importance of proactive govern-ment policy and investment inconfronting existing inequitiesin the electricity sector as awhole.121 Almost 40 years aftercommissioning the Kariba dam,only about one-fifth of Zimba-

bwean households (mainly located in urbanareas) have access to electricity. Prohibitivepower pricing policies adopted by thegovernment continue to exclude poorpeople from this service. In contrast, as aresult of deliberate policy on the part of thepost-Apartheid government in SouthAfrica, the percentage of households therehaving access to electricity increased from20 to 50% in the 1990s.

Project level benefit-sharingmechanisms

Some project proponents also initiatebenefit-sharing agreements with concernedcommunities where national or local regula-tory frameworks do not exist. A wide varietyof mechanisms are developed, ranging frommaking affected communities primarybeneficiaries of the project services – forexample irrigation, electricity, water supply,fishing rights – to formal business agree-ments concerning equity and revenuesharing in the project itself. Several damprojects in the WCD Knowledge Baseshared direct project benefits with resettlersby moving displaced people into the newlyirrigated areas, for example Andhra PradeshII and III, Brazil Ceara Water Resources,China’s Daguangba Multipurpose project.122

In the case of Hydro-Québec in Canada, theProvincial power utility proposed partner-ship agreements to local communities for allnew hydropower projects.123

Reparations

There are an increasing number of examplesof reparations being made for past inequi-

ties.124 In North America, the process ofpaying reparation to Native Americans fordam-induced impacts has started. TheGrand Coulee Case Study relates that in1994 the United States Congress upheld theclaims for damages and reparation made in1951 by Colville Confederated Tribes whohad lost homes, lands and salmon runs tothe Grand Coulee Dam in the Colombiabasin in the 1940s. A total of $54 millionwas paid in reparations in addition to anannual payment of $15 million as long asthe dam continues to produce electricity. A$200-million Missouri River Trust fundproposed through legislation in early 2 000aims to move American Indian Tribes closerto compensation for land lost to federaldams.125

A few precedents are emerging on repara-tions in developing countries as well.Approval of a World Bank loan for theGhazi Barotha hydro project in Pakistan inDecember 1995 was made conditional on aprocess for the resolution of disputes overcompensation for people displaced 20 yearsbefore by the Tarbela dam. An initiative hasbegun in Zambia to raise the living stand-ards of communities suffering the conse-quences of displacement by the Kariba dammore than four decades ago through theGwembe Tonga Rehabilitation and Devel-opment Programme. In a negotiated settle-ment resulting from prolonged agitation,more than 10 000 families affected by Bargiproject on the Narmada River in Indiagained rights to cultivate drawdown lands,fish in the reservoir and manage forests inthe catchment area jointly.126

China attempted to systematically addressthe problems faced by the reservoir-resettledpeople beginning with new policy andinstitutional initiatives in the early 1980s.In 1986, the Ministry of Water Resources

The inequitabledistribution noted in thepast in sharing risks andallocating benefits is not

inevitable.



and Electric Power launched a large rehabil-itation programme aimed at improvingliving conditions of some 5 million reser-voir-resettled people across 46 resettlementareas in the country. 127 Although suchmeasures have had a significant impact, a1994 World Bank report cited the Chinesegovernment as saying that some 46% of thecountry’s reservoir resettlers ‘were at greatrisk.’128

An appropriate legal and policy environ-ment, accompanied by clear political will toact, can therefore ensure that poor andvulnerable groups marginalised in the pastby large dam projects can begin to share inthe benefits generated by such projects. Thismeans that the inequitable distributionnoted in the past in sharing risks andallocating benefits is not inevitable. Indeed,as discussed in Chapter 6, there are anumber of explanations for past failures inperformance – explanations that lead to aseries of recommendations for making thetransition to more equitable outcomes.

Findings and LessonsPast decision-making and planning effortshave often neither adequately assessed noraccounted for the adverse social impacts oflarge dams. As a result, the construction andoperation of large dams has had serious andlasting effects on the lives, livelihoods andhealth of affected communities, and led tothe loss of cultural resources and heritage.At the same time a simple accounting forthe direct benefits provided by large dams –the provision of irrigation water, electricity,municipal and industrial water supply, andflood control – often fails to capture the fullset of social benefits associated with theseservices. It also misses a set of ancillarybenefits and indirect economic (or multipli-er) benefits of dam projects.

The WCD Knowledge Base pro-vides the following findings on theadverse impacts of the displacementof people from their homes andlivelihood by large dams:

■ 40-80 million people werephysically displaced by damsworldwide;

■ millions of people living down-stream from dams – particularlythose reliant on natural flood-plain function and fisheries –have also suffered serious harmto their livelihoods and had thefuture productivity of theirresources put at risk;

■ many of the displaced were notrecognised (or enumerated) as such,and therefore were not resettled orcompensated;

■ where compensation was provided itoften proved inadequate and where thephysically displaced were enumeratedmany were not included in resettlementprogrammes;

■ those who were resettled have rarely hadtheir livelihoods restored, as resettlementprogrammes have focused on physicalrelocation rather than on the economicand social development of the displaced;

■ even in the 1990s, impacts on down-stream livelihoods were not adequatelyassessed or accounted for in the planningand design of large dams; and

■ there is a clear relationship between themagnitude of displacement and theability to rehabilitate and restore liveli-hoods adequately - the larger the numberof displaced people, the less likely it isthat livelihoods can be restored.

In sum, the WCD Knowledge Base demon-strates a generalised lack of commitment or

Chapter 4


lack of capacity to cope with displacement.Large dams in the WCD Knowledge Basehave also had significant adverse effects oncultural heritage through the loss of culturalresources of local communities and thesubmergence and degradation of plant andanimal remains, burial sites and archaeologicalmonuments.

The WCD Knowledge Base indicates thatthe poor, other vulnerable groups and futuregenerations are likely to bear a dispropor-tionate share of the social and environmen-tal costs of large dam projects withoutgaining a commensurate share of the eco-nomic benefits. Specific cases include:

■ Indigenous and tribal peoples andvulnerable ethnic minorities havesuffered disproportionate levels of displace-ment and negative impacts on livelihood,culture and spiritual existence;

■ affected populations living near reser-voirs, displaced people and downstreamcommunities have often faced adversehealth and livelihood outcomes fromenvironmental change and social disrup-tion; and

■ among affected communities gender gapshave widened and women have frequent-ly borne a disproportionate share of the

social costs and were often discriminatedagainst in the sharing of benefits.

These inequitable outcomes documented inthe WCD Knowledge Base invalidate theprevailing ‘balance-sheet’ approach todecision-making. The balancing of gainsand losses as a way of judging the merits of alarge dam project – or selecting the bestoption – is not acceptable where the mismatchbetween who gain from the benefits and thosewho pay the costs is of such a serious, perva-sive, and sometimes irreversible nature.

The review also shows that the true eco-nomic profitability of large dam projectsremains elusive as the environmental andsocial costs of large dams were poorlyaccounted for in economic terms. More tothe point, failures to account adequately forthese impacts and to fulfil commitmentsthat were made have led to the impoverish-ment and suffering of millions, giving rise togrowing opposition to dams by affectedcommunities worldwide. Innovative exam-ples of processes for making reparations andsharing project benefits are emerging thatprovide the basis for optimism that pastinjustices can be remedied and future onesavoided.



Endnotes

1 Lang et al, 2000 eco041, WCD Submission.

2 Meinzen-Dick, 1997, p50.

3 UNDP, 1999, p213, 214.

4 Saxena, pers comm, 2000; UNDP, 1998,p175, 177.

5 These figures relate only to areas along theOrange River downstream of the Gariep andVanderkloof dams, and do not includeirrigated areas along the Fish and Sundaysrivers, which received water, diverted fromthe Orange River by ORDP as well.

6 Panama Canal Office of Public Affairs,undated.

7 ADB, 1999b, p1.

8 Jing, 1999, WCD Contributing Paper toThematic Review I.3 Displacement.

9 Fernandes and Paranjpye, 1997, p17.

10 World Bank, 1996a, p90-92.

11 Cook, 1994, p25.

12 OED, 1993, p11.

13 World Bank, 1996a, p88.

14 WCD Thematic Review I.2 IndigenousPeople, section 2.1.7.


16 Morse and Berger, 1992; Parasuraman, 1999,p83.

17 Correa, 1999, WCD Regional ConsultationPaper.

18 Dhom dam in Parasuraman, 1999, p154;Bargi dam in Mander et al, 1999, Contribut-ing Paper for WCD Thematic Review I.3Displacement, p64.

19 Bartolome and Danklmaier, 1999, Contribut-ing Paper for WCD Thematic Review I.3Displacement.

20 Balsalm, 1940a, and 1940b.

21 WCD Grand Coulee Case Study.

22 WCD Thematic Review I.3 Displacement,section 3.1.

23 WCD Thematic Review I.3 Displacement,section 5.

24 Colson, 1971, cited in De Wet, 1999, WCDContributing Paper for Thematic Review I.3Displacement, p9.

25 Fact Finding Committee on the Sri SailamProject, 1986, cited in Mander et al, op cit,p10.

26 Stewart et al, 1996; World Bank, 1996b;Chen, 1999, WCD Regional ConsultationPaper; Colajacomo, 1999, ContributingPaper for WCD Thematic Review I.2Indigenous People.


28 Mander et al, op cit, p6.

29 WCD Thematic Review I.3 Displacement,section 3.2; Bartolome and Danklmaier, op cit.

30 Kiambere dam in Mburugu, 1994, p53. Notethat in Turkey farmers are asked to registerthe value of their land for tax purposes.Farmers that record a lower value than thereal asset value in order to avoid tax willhave difficulty in purchasing equivalent landelsewhere as the government uses thesedeclarations as the basis for calculating landcompensation amounts.

31 Fact Finding Commission on Sri SailamProject, 1986, cited in Mander et al, op cit;Kao Laem dam in WCD Thematic ReviewI.2 Indigenous People.

32 Aswan High dam in Fahim, 1981, andFernea, 1998, cited in De Wet, op cit, p11;Nangbeto and Akosombo in De Wet, op cit,p11; Itá in Bermann, 1999, WCD RegionalConsultation Paper; Bhumibol in Sluiter,1992, p62.

33 Jing, op cit, p11.

34 Hoa Binh dam in Srettachau et al, 2000,WCD Regional Consultation Paper; Sirind-horn dam in Sluiter, op cit, pvii; Batang Aidam in ADB, 1999a, p5.

35 Miguel Aleman and Cerro de Orro dams inNahmad, 1999, WCD Regional ConsultationPaper; Panama in Huertas and Pacheco,1999, WCD Regional Consultation Paper;Brazil in WCD Tucurui Case Study; Zambiaand Zimbabwe in WCD Kariba Case Study.

36 Sluiter, op cit, p62.

37 Sluiter, op cit, p63.


39 Cernea, 2000; WCD Thematic Review I.3Displacement, section 1.3.

Chapter 4


40 World Bank, 1994, p2-3; Jing, op cit, p5.

41 Cernea, 2000, p2.

42 OED, 1996b, p86.



45 Supreme Court of India, 1999.

46 ADB, 1999b, p20-21.

47 De Wet, op cit, p18.

48 Robinson, 1999, Contributing Paper for WCDThematic Review I.3 Displacement, p4.

49 Driver, 2000, Submission to WCD ThematicReview 1.3 Web Conference.

50 Jing, op cit, p18-19.

51 Bermann, op cit.

52 De Wet, 1999, op cit, p21.

53 World Bank, 1993, p18.

54 WCD Thematic Review I.2 IndigenousPeople; WCD Grand Coulee Case Study,Annex 9; WCD Tucurui Case Study.



57 WCD Thematic Review I.2 IndigenousPeople.


59 Silva Orrego, 1997, p159; Opaso, 1999,WCD Regional Consultation Paper.

60 Gapuz and Shalupirip, 2000, WCD RegionalConsultation Paper.



63 Huertas and Pacheco, op cit.


65 Soong, 2000, WCD Regional ConsultationPaper.



68 In Canada it is the Constitutional Law of1982; in the Philippines it is the Constitu-

tion of 1987; in India it is the fifth and sixthschedules under the Indian constitution; inBrazil it is the Article 231& 232 of the 1988constitution. National laws reflect contem-porary indigenous rights norms, in Chile,Ecuador, Bolivia, Colombia, and Argentina.

69 Adams, 1985, cited in WCD ThematicReview I.1 Social Impacts.

70 WCD Thematic Review I.1 Social Impacts.

71 Horowitz et al, 1994.

72 Ferradas, 1999, Contributing Paper for WCDThematic Review I.1 Social Impacts.


74 Urrá I dam in Correa, 1999, WCD RegionalConsultation Paper; Pak Mun dam in WCDPak Mun Case Study; Other dams in ADB,1999a, p23-24.

75 Mehta and Srinivasan, 1999, ContributingPaper for WCD Thematic Review I.1 SocialImpacts.

76 OED, 1998.

77 Projects included in the studies are: BatangAi in Malaysia, Sing Karak in Indonesia,Lingjintan in China and Theun-Hinbon inLao PDR. ADB, 1999a.

78 Agarwal, 1996, cited in Mehta and Srinivas-an, op cit.

79 While most adivasi communities in theNarmada Valley are classified as ‘encroach-ers’, they had usufructory rights and controlover land. Mehta and Srinivasan, op cit

80 Colson, 1999, cited in Mehta and Srinivas-an, op. cit.

81 Anane, 1999 soc210, WCD Submission.

82 Mehta and Srinivasan, op cit.

83 Colson, 1999, cited in Mehta and Srinivas-an, op cit, p.12.

84 Mehta and Srinivasan, op cit, p22.

85 Gender compares men and women. Whereboth benefit, but men benefit more thanwomen, the gender impact can be negativebecause the benefit/s in question can resultin wider gender gaps.

86 Tamakloe, 1994.

87 van Koppen, 1999.

88 Niasse, 1997.



89 Brandt and Hassan, 2000, WCD WorkingPaper on Cultural Heritage Management.

90 Gwala, 2000.

91 Kinahan, 2000, in Brandt and Hassan, op cit,p18.

92 Norr et al, 2000, in Brandt and Hassan, opcit, p35-36.

93 Ota, 2000, in Brandt and Hassan, op cit, p52.

94 Faught, 2000, in Brandt and Hassan, op cit,p11.

95 Brandt and Hassan, op cit, p59.

96 Politis and Endere, 2000 in Brandt andHassan, op cit.

97 Childs-Johnson, 2000, in Brandt and Hassan,op cit.

98 WHO, 1999, WCD Working Paper onHuman Health, p6.

99 Kariba dam in Hira, 1969, and Mungombaet al, 1993; Akosombo and Aswan dams inJobin, 1999, p278, 298-300.

100 Jobin, op cit, p300-303, 327-330, 425-427.

101 World Bank, 1999b, p2.

102 WHO, op cit, p21.

103 Government of India, 2000, in WCD IndiaCountry Study.


105 For a treatment of the value of informationin the presence of uncertainty and irreversi-bility see WCD Thematic III.1 EconomicAnalysis, Chapter 7.

106 China in Jing, op cit, p10; Vietnam inSluiter, op cit. pVII; Malaysia in ADB,1999a, p5, 2000; Thailand in Sretthachau etal, 2000, WCD Regional Consultation Paper;India in Laxman, 1999, p208.

107 Macoun et al, 2000.

108 Mncina and Ginidza, 1999.


110 Area irrigated before dam is included.

111 Area irrigated before dam is included.

112 Brody, Contributing Paper for WCD ThematicReview I.1 Social Impacts, section 5.5.

113 Arrow and Lind, 1970; World Bank, 1980;Belli et al, 1998, cited in WCD ThematicReview III.1, Economic Analysis, Chapter 5and 6.

114 The extent to which other types of capitalcan substitute for natural capital is debated.The degree of substitutability, as well as thedegree of irreversibility of ecosystem impactswill be important determinants of theoptimum balance between leaving a river inits ‘natural’ state or going ahead with a dam(or determining environmental flow require-ments). WCD Thematic Review III.1,Economic Analysis, Chapter 7.

115 Van Wicklin, 1999 soc184, WCD Submis-sion, p8.

116 Van Wicklin, op cit.

117 Milewski et al, 1999, soc 196,WCD Submis-sion and Adeler and Flatby, pers comm,2000.

118 Kuriki, pers comm, 2000.

119 Kuriki, op cit.

120 Niasse, 1991, p101.

121 Bond, 2000 eco033, WCD Submission, p6-7.

122 Van Wicklin, op cit.

123 Milewski et al, op cit.

124 Reparation is defined as action or processesthat repair, make amends, or compensate fordamages. In a legal sense, there are threegenerally recognised forms of reparation:restitution, indemnity (or compensation),and satisfaction Johnston, 2000, Contribut-ing Paper for WCD Thematic Review I.3Displacement, p14.

125 Johnston, op cit, p42.

126 Sinha, 1998, soc009, WCD Submission.


128 World Bank, 1994, p2-3 cited in Jing, op cit.

Options for Water and Energy Resources Development


Chapter 5

Options for Water andEnergy Resources Development

Part of the Commission’s

mandate was to look at the

alternatives for energy and water

services that were considered in the

past when building large dams and to

consider the current options. This

chapter examines the current state of

knowledge on existing and emerging

options for meeting water and

electricity needs. As part of the

larger discussion of planning and

decision-making processes, Chapter

6 critiques the past assessment of

alternatives to large dams.

Chapter 5


Options normally emerge in responseto demand or supply. The choicesavailable to a society at any giventime also depend on factors such asnatural resource endowments, tech-nological capability, institutionalcapacity, finance, market conditions,cultural preferences, awareness andeducation. These can act either asbarriers or as enabling conditions,depending on whether they impedeor promote the consideration andadoption of a particular option.Creating conditions for certainoptions to emerge as competitiveresponses to demand and supplyrequires support. Policies, institutionsand regulatory measures can eitherhelp or hinder innovation, moderni-sation, maintenance, continuation

and sustainability of different options.

The chapter focuses on identifying the rangeor mix of options available today to meetwater and electricity needs in differentsocieties and in urban and rural settings. Itdocuments the large range of genericoptions currently available. However, givenconcerns about a number of barriers thathave led to limited assessment of options inthe past, it is not enough simply to identifythe technologies and policies that can satisfywater and energy needs. It is also necessaryto identify the obstacles that prevent themore widespread adoption and use of variousoptions. Obstacles may be generic to anoption – such as the high cost of a technolo-gy – or they may be specific to a particularcontext – such as limited wind potential.Only a thorough and integrated examina-tion of the options and obstacles can yield aprecise list of alternatives for considerationin a given regional, country or local context.The chapter therefore indicates options thatrepresent significant opportunities across all

contexts and provides snapshots of opportu-nities in specific countries, regions orcontexts.

The investigation of options is organisedaround the four ‘needs’ areas that are thefocus of this report: agriculture, energy,water supply and flood management. Broad-ly, options consist of technological, policyand institutional responses. They may becategorised further based on whether theycontribute to demand-side management(DSM), supply-side efficiency or representnew supply options. For example, policiesand institutional options to improve man-agement of existing systems may respond tosupply-side efficiency, while a new damrepresents a technological option for newsupply. Previous chapters have presentedand analysed the contribution of large damsto these services and the performance oflarge dams over time. Chapter 5 focuses onthe alternatives, locating large dams in thelarger mix of options.

This report confirms that selecting the mostappropriate combination of options dependson giving all the options equal and appropri-ate consideration in any assessment process.Assessment should be based on the respec-tive merits of available options in the givencontext and should include not just a set oftechnical, financial, and economic criteria,but also full integration of social and envi-ronmental criteria. The options listed beloware not exhaustive and the Commissiondoes not endorse particular options. Rather,the intention is to highlight the options andissues that should be considered and exploredas part of the options assessment process.Much more detailed information on these andother choices can be found in the WCDThematic Reviews on irrigation, electricity,water supply and flood management optionsand the related contributing papers.1



Agriculture and Irrigation

Efforts to promote sustainable water man-agement practices have necessarily focusedon the agricultural sector as the largestconsumer of freshwater. Governments haveseveral objectives in deciding the nature andextent of inputs in agriculture. Theseinclude achieving food security, generatingemployment, alleviating poverty andproducing export crops to earn foreignexchange. Irrigation represents one of theinputs to enhance livelihoods and achieveeconomic objectives in the agriculturalsector with subsequent effects for ruraldevelopment.

Just as strategies and approaches to ruraldevelopment are context-specific, there arenumerous and diverse alternatives to agri-cultural development and irrigation thatneed to be examined. The diversity relatesto scale, level of technology, performance,and appropriateness to the local cultural andsocio-economic setting. Governmentpolicies and institutions play an importantrole in the promotion of particular waterappropriation technologies and methods.Each method has different implications forfood production, food security at local andnational levels, and the distribution of costsand benefits.

The growth of modern ‘conventional’irrigation since 1900 has been characterisedby large water projects that harnessed riversthrough the construction of diversionstructures and canal systems. Since 1950,the spread of such technology acceleratedthrough state-sponsored large-scale irriga-tion and an emphasis on large dams forwater storage. Irrigated areas increased from40 million hectares in 1900 to 100 millionhectares by 1950 and to 271 million by1998.2 Dams support 30-40% of this area,

with the remainder suppliedfrom direct river abstraction,groundwater and traditionalwater harvesting systems.3 Sincethe 1970s, the predominantfocus has been on providingirrigation to support the greenrevolution package of hybridseeds, chemical fertilisers andpesticides. Conditions for highergrowth were created in such areas throughsubsidised infrastructure, agricultural inputsand electricity for pumping.

Irrigated agriculture has contributed togrowth in agricultural production world-wide, although inefficient use of water,inadequate maintenance of physical systemsand institutional and other problems haveoften led to poor performance. Emphasis onlarge-scale irrigation facilitated consolida-tion of land and brought prosperity forfarmers with access to irrigation and mar-kets. Chapter 4 documents themajor multiplier effects producedby successful large irrigationschemes. However, the scale ofsupport to rain-fed areas waslimited, even though suchsystems supported more than80% of farmers in the developingcountries of Asia and Africa. Asa consequence, there has been awidening income gap betweenirrigated and rain-fed areas. Even withinlarge-scale irrigation systems, inequities ofthis nature are observed, leading to themarginalisation of smallholders.

The regional economic and developmentcontext for agriculture differs markedly forindustrial and developing countries. In theformer, agriculture tends to be capital-intensive with large, highly mechanisedholdings requiring minimal labour. In

Agriculture in Asia andAfrica supportshundreds of millions ofsmallholder cultivatorswho depend on land forsubsistence, livelihoodand food security.

Chapter 5


contrast, agriculture in Asia and Africasupports hundreds of millions of smallholdercultivators who depend on land for subsist-ence, livelihood and food security. Thesefarmers generally do not have access tosupport mechanisms or capital resources torisk growing high-value crops in volatilemarket conditions. The low productivity of

the land and labour of manysubsistence cultivators is alsosymptomatic of absence ofsupport and widespread neglectof their agriculture and irrigationsystems.

This section presents a briefoverview of some of the optionsavailable for agricultural devel-opment, with an emphasis onthose most likely to be consid-ered as alternatives to irrigation,particularly irrigation supplied by

large dams. The presentation is groupedaccording to three levels of options:

■ improving performance and productivityof existing irrigation systems throughimproved basin and system-level man-agement, on-farm technological optionsto enhance the productivity of land andwater, and policy and institutionalreforms to improve incentives for waterefficiency and demand management;

■ improving the productivity and liveli-hood opportunities offered by alternativesupply-side measures through enhancingrain-fed agriculture, supporting local andtraditional water appropriation tech-niques and adopting new technologicaloptions such as water recycling; and

■ investing in conventional supply-sidemeasures to develop new irrigation areasbased on direct abstraction from riversand groundwater.

A final option is to import food from othercountries rather than trying to achieveeither a higher degree of food self-sufficien-cy or security through domestic production.This may be possible in countries with asmall farming population, for individualcrops with a high water demand, or forcountries with significant foreign exchangeearnings. However, it would be extremelycounterproductive in countries with a largeand poor rural population if it interferedwith the income-earning potential of smallfarmers and their incentives to produce.

Improving performance andproductivity of existingirrigation systems

As noted in Chapter 2, there is considerableunder-performance of large dam irrigationschemes and scope for improving theperformance of existing systems. Increasingcompetition for water has highlighted theinefficiencies in irrigated agriculture andthus increased demands for a more effectiveand integrated approach to managingexisting irrigation systems, particularlysurface water irrigation. There is alsoconsiderable scope for enhancing theviability, adoption and performance of othersources of irrigation water such as groundwa-ter, direct river abstraction and traditionalwater harvesting systems. In the past,emphasis on performance enhancementprogrammes has had mixed results, however,with rapid decline in gains achieved leading tothe need for periodic restoration, often heavilysubsidised by the state. Policy interventionsand institutional reforms to support technicalinterventions have been inadequate.

Improved basin and system levelmanagement

As reviewed in Chapter 2, the risk andconsequence of sedimentation of reservoirs

There is considerablescope for enhancing the

viability, adoption andperformance of other

sources of irrigationwater such as

groundwater, directriver abstraction and

traditional waterharvesting systems.



is site-specific, but of considerable impor-tance in a portion of the larger dam popula-tion. Measures to improve the sustainabilityof existing water resources systems throughsediment flushing and catchment manage-ment can increase the contribution andlongevity of irrigation systems. Enhancinginfiltration and reducing surface erosionthrough catchment-protection initiativesmay improve sustainability of reservoirs andirrigation systems, but must account for thetrade-off with subsequent losses in annualwater yield and the potential for lower dryseason flows. A review of 94 catchmentexperiments from around the world suggestsa loss in water yield of 10, 25 and 40 mm fora 10% increase in catchment cover respec-tively for scrub, deciduous hardwood andpine and eucalyptus.4

Further, as explained earlier in Chapter 2,increases in vegetation lead to greaterevaporation without necessarily leading togreater absorption and a reduction in surfacerun-off. Thus, the balance between evapora-tion and gains from increasing absorptionwill determine whether catchment measureslead to increases or decreases in dry seasonflow.5 The utility of these options willtherefore be site-specific and depend on thetechniques applied and must be developedand evaluated in the larger context ofnatural resources management in thecatchment. In particular the contrastbetween the effects on soil and waterconservation of vegetative cover andstructural measures such as embankments,ditches and small dams needs to be consid-ered.

Salinity affects approximately 20% ofirrigated land worldwide.6 Controllingsalinity and reclaiming saline land is anurgent priority in order to increase produc-

tivity of existing land, makebetter use of irrigation, anddemonstrate that new irrigationareas can be managed in asustainable manner. Applicationof drainage technology andmaintenance of existing drain-age is one way of containingsalinity. But reliance on physicaldrainage of saline effluent aloneis insufficient to tackle theproblem, and an integratedapproach combining manage-ment of surface water, groundwa-ter and agricultural practices is essential.Salt-tolerant crops and vegetation can formpart of such strategies to remove excesssurface water and lower water tables. Theirrigation of crops or pastures in ‘series’arranged in order of increasing salt toleranceis a further example of saline management.If practised early enough, the integrated (orconjunctive) management of surface water,groundwater and salinity can prevent thebuild-up of salts (see Box 5.1). Trials on thisare currently under way in Australia andCalifornia.

Water quality is another important factoraffecting basin productivity. For example,efforts to improve salinity problems up-stream may have adverse effects down-

Salinity affectsapproximately 20% ofirrigated land worldwide.Controlling salinity andreclaiming saline land is anurgent priority in order toincrease productivity ofexisting land, make betteruse of irrigation, anddemonstrate that newirrigation areas can bemanaged in a sustainablemanner.

Conjunctive management, that is groundwater pumping with reuse of the salineeffluent for irrigation, is an economic and sustainable means of salinity control.In the Shepparton Irrigation Region in Australia, one project covering 600 hawith 15 groundwater pumps has been in operation since the early 1980s. Thesalinity of the diluted groundwater is kept below threshold level for the cropsand the management system prevents salinisation of the root zone. Long-termsustainability depends on the ability to obtain a salt balance in the areaprotected by the drainage pumps.

Source: Heuperman, 1999, Contributing Paper forWCD Thematic Review IV.2 Irrigation Options

Box 5.1 Conjunctive management of salinity

Chapter 5


stream. An innovativeapproach to the problem ofmanaging the disposal ofsaline effluent comes fromthe Murray Darling Basin ofAustralia where disposal isregulated through regionalload quotas or ‘salt credits.’These credits are used to

ensure highly saline water is released onlyduring periods of high flow, when disposalhas the least impact on river water quality.

The review of irrigation system performancein Chapter 2 revealed a considerable lagtime between commissioning of irrigationdams and full development of irrigationinfrastructure. Accelerating the full devel-opment of associated infrastructure, such ascanal networks, and providing an integratedpackage of agricultural support measures fornew irrigators may be a cost-effective optionfor enhancing performance.

In most irrigation systems, particularly thosewith long conveyance lengths, a dispropor-tionate amount of water is lost as seepage incanals and never reaches the farmlands. Forexample, 40% of the water diverted fromthe Indus basin in Pakistan is lost in con-veyance. In the late 1980s it was estimatedthat improvements in supply efficiencycould save some 14.8 billion m3/yr of water.7

Canal lining is one such improvement.Experience with buried plastic linings inChina demonstrates good performance over18 years.8 The United States introduced alow-cost lining programme and since 1946some 4 600 km of various types of liningshave been installed.9

But in the absence of good quality controland effective maintenance the canal liningsoften have not achieved the predicted

improvements in water savings and reliabili-ty of supply. Studies from Pakistan in theearly 1990s demonstrated that a focus ontargeted maintenance is more cost-effectivethan deferring problems to rehabilitationprogrammes or lining canals.10

Inadequate maintenance is a feature of anumber of irrigation systems in developingcountries. An impact evaluation of 21irrigation projects by the World Bankconcluded that a common source of poorperformance was premature deterioration ofwater control structures.11 Often poormaintenance reduces irrigation potentialand affects the performance of systems.

The scope for improvements through bettermaintenance is significant. The Food andAgriculture Organisation (FAO) of theUnited Nations estimates that the total areathat can be used with improved mainte-nance is 150 million hectares.12 In India,such steps could add approximately 9 mil-lion hectares to the irrigated area.13 Incountries like Nigeria, only 52% of irriga-tion from large-scale schemes was actuallyused in 1993.14 In the combined Gezira-Managil schemes in Sudan, 126 000 ha hadto be taken out of production due to sedi-mentation and weed growth in canals.15

Performance-based maintenance contractscan be used as a cost-effective managementmeasure to maintain system integrity. Suchan arrangement can be extended to coveroperation of the main canal system intandem with decentralised farmer manage-ment at the secondary and tertiary level.

Proposals to improve system efficiencyshould be viewed in a river basin contextexamining the interactive effects of surfacewater, drainage re-use and groundwaterrecharge.16



On-farm technologies for enhancingthe productivity of land and water

Raising the efficiency of surface irrigationprovides considerable scope for improve-ments within existing irrigation systems,whether the water comes from dams, rivers,or groundwater. There are large variations inefficiency. As cited in Chapter 2 the averagewater use efficiency that was reported forthe Aslantas project by the WCD CaseStudy was 40%. However, the range of field-level efficiency for the project varied from25% to 55%. Efficient surface irrigation,however, has produced figures of 60%.17

In a number of regions, irrigation haspromoted cultivation of water-intensivecrops such as sugarcane and rice. For exam-ple, intensive cultivation of sugarcane inIndia and Pakistan has led to unsustainableuse of water. A number of technologies existfor improving water use efficiency and,hence, the productivity of water in irriga-tion systems.

Micro-irrigation methods, such as sprinklerand drip systems, provide an opportunity toobtain higher efficiency gains than thoseavailable in surface irrigation. Field applica-tion efficiencies are typically in the range of70-90%.18 The output produced with agiven amount of water is increased byallowing for more frequent and smallerirrigation inputs, improved uniformity ofwatering and reduced water losses. Thesemethods have found wide usage in water-scarce regions. Nearly all of Israel’s irrigatedarea, 68% of Jordan’s and 40% of Brazil’sirrigated area uses micro-irrigation methods,as do small areas in China, India and partsof Africa.

The capital-intensive nature of micro-irrigation technology and low cost of waterhas prevented more widespread adoption

among smallholders in developing countries,but local manufacture has brought down thecost and improved viability for high-valuecrops. Further development in this area maymake such pressurised irrigationtechnology attractive to farmersin developing countries. Lowtechnology versions, such asmaking portable drip line andbucket kits for small householdirrigation, have recently gainedsupport.19 Another method forincreasing water use efficiency isto change crop cultivationpractices (see Box 5.2).

As with other water manage-ment initiatives, the potentialfor efficiency gains in water use needs to beexamined within a river basin context, as inmany cases losses upstream are recoupeddownstream.

Policy and institutional reform

Policy and management initiatives arefundamental to raising productivity per unitof land and water and increasing returns tolabour. They are often interlinked andrequire political commitment and institu-tional co-ordination.

Agricultural support programmes tend to bedeveloped and implemented in relativeisolation from irrigation systems. Typicallythere is weak co-ordination between agen-cies responsible for agricultural activities

The Muda Irrigation Scheme in Malaysia reported a reduction in irrigationduration from 140 to 105 days and a reduction in overall water use of 28% as aresult of the shift from transplanted rice to wet seeded rice. Although theimpetus for this change was shortage of farm labour, it had a considerable waterconservation benefit.

Source: Fuji and Cho, 1996, cited in Guerra et al, 1998

Box 5.2 Cultivation techniques can reduce irrigation water use

Micro-irrigation methods,such as sprinkler and dripsystems, provide anopportunity to obtainhigher efficiency gainsthan those available insurface irrigation. Fieldapplication efficienciesare typically in the rangeof 70–90%.

Chapter 5


(such as extension services, landconsolidation, credit and mar-keting) and those responsible forirrigation development. Priceincentives are also inadequate toraise productivity and theoutcome is a significant gapbetween potential and actualyields. In the absence of betteropportunities from agriculture,

many farmers seek off-farm employment.Incentives to enhance production arenecessary and can result from a more inte-grated set of agricultural support measuresand the involvement of joint ventures thatprovide capital resources and market accessto smallholder farmers. Appropriate arrange-ments need to be introduced for such jointventures to ensure an equitable share ofbenefits.

As demonstrated in Chapter 2 the extent ofrecovery of the costs of operations andmaintenance in large irrigation dams in theWCD Knowledge Base and irrigationsystems in general is often limited. In arecent study of 16 projects, annual irrigationfees varied from zero in Thailand to as highas $130/ha in Colombia.20 Collection ratesvaried from 50 to 100%. One rationale forhigher fees is that they will encourage moreefficient irrigation practice and a shift tomore water-efficient and higher-value crops.

For example, in the case of Pakistan andIndia reported above, farmers are attractedto the intensive cultivation of sugarcane byits profitability. This is because watercharges are low, capital costs are not recov-ered, and the mitigation costs of attendingto waterlogging or salinity problems are notborne by the farmer. Removing the subsidiesinherent with supplying irrigation anddrainage services may encourage adoption oftechnologies for increasing water use effi-

ciency and promote a shift to less water-demanding crops, especially in arid andwater-scarce regions. Ideally, pricing struc-tures for irrigation should reflect the cost ofsupplying water and associated externalities,and should be designed with stepped rates toprovide security for basic livelihood needs.

In many systems farmers are charged on aper hectare basis independent of the volumeof water used. This removes any incentive tosave water. One obstacle to volumetriccharges is the practical difficulty of measur-ing water delivered through an open canalsystem to a large number of smallholders. Asolution may lie in water user organisationsacting as intermediary bodies. They canenter into contracts with irrigation agenciesand recover the charges directly from theirrigators.

One of the major contributors to poorperformance of large irrigation systems is thecentralised and bureaucratic nature ofsystem management, characterised by lowlevels of accountability and lack of activeuser participation. Agency reform andmanagement transfer have been initiated inmore than 25 countries where governmentsare gradually reducing their roles in irriga-tion management and transferring responsi-bility for various levels of the systems tofarmers’ organisations and water user associ-ations. The major impetus for the transferlies in the desire to cut back public expendi-ture on operation and maintenance costs.21

The structure of farmer involvement variesfrom transfer of assets to a range of joint-management models. As yet, there is nogeneral evidence to suggest that irrigationperformance has improved as a result oftransfer alone, although there are promisingexamples indicating that decentralisationmay be a required, but not sufficient meas-



ure to improve performance.22 Experiencehas shown that in order to be effective, astrong policy framework is required, provid-ing clear powers and responsibilities for thefarmers’ organisations.23

Water rights and trading are highly conten-tious issues. Win-win situations occur forfarmers when they trade a part of their waterto replace lost income while at the sametime being able to finance water use effi-ciency gains from their remaining waterallocation. In the United States, Coloradohas one of the most advanced institutionalsupport networks for water markets. Inrecent years some 30% of a district’s annualwater entitlements has moved through therental market. The price at which farmerssell water is often significantly higher thantheir cost of supply.

Enabling conditions for water markets areclear and secure entitlements along witheffective administrative systems and infra-structure to regulate the trade and to moni-tor compliance. There should be clearenvironmental limits on the extent of thetrade. These prerequisites are not present inmany developing countries. Chile is oftencited as an example where the developmentof water markets has helped to avoid expen-sive new water infrastructure, such as dams,by allowing transfers of water rights fromagricultural to urban sectors.24 Concernsover water trading stem from the equity andlivelihood implications of permanent tradesof water (as opposed to yearly rentals) fromsmall to large farmers or from rural to urbanareas.

Improving alternative supply-side measures

Prior to the advent of large-scale irrigation,a number of traditional water appropriation

techniques and irrigation methods were usedin different contexts. Several supply optionsexisted, complementing each other andcontributing to agriculture, food productionand livelihoods. In today’s context, localsolutions and large-scale irrigation need notbe mutually exclusive. They can co-existand complement each other, raising foodproduction and enhancing livelihoods.

For these systems to function optimally, anumber of enabling conditions are required.Water appropriation systems need repair andmaintenance, desilting and weed clearing.Innovations and enhancement of traditionalmethods are needed to improve crop pro-ductivity. To optimise the productivity ofthe restored water management systems,appropriate land use, including croppingpatterns, mix and rotation need to bepromoted. Sustaining these location-specificsystems and practices will depend on protec-tion of sensitive catchments, floodplainsand deltas. Lastly, improving communitystakes will be an important factor for greaterapplication and long-term functioning.

Enhancing rain-fed agriculture andsupporting local techniques

Some 80% of agricultural land worldwide isunder rain-fed cultivation, contributing to60% of food production.25 Given thenumber of low-income households that relyon rain-fed agriculture throughout thedeveloping world, the enhancement ofopportunities in this sector can have a majoreffect on productivity and livelihoods.

Over a period of time these farming practic-es and irrigation methods have been margin-alised by irrigation policies, the lack ofinstitutional support and low levels ofinvestment and research. In recent years,increasing attention has been paid to thesuccesses of such methods and their impor-

Chapter 5


tance is now being recognised by policy-makers.26 The productivity of these rain-fedsystems can be enhanced through improvedagricultural support, local commitment todevelop reliable water supply sources andsmall-scale, low-cost technologies. Aprogressive development path, wheresupport provided is tailored to increasinglocal capacity, is emerging as an importantconceptual approach to the development ofsuch systems. For example, simple technolo-gies such as treadle pump and low-cost dripsystems can be introduced as a first stageinnovation. In a few years – once farmershave recovered their investment costs – thereturns can be re-invested in more advancedtechnologies such as small motorisedgroundwater pumps, thus gradually building

the technological and capital base of thefarmer.27

Agriculture in rainfed areas is supported by anumber of water appropriation methods.Many of these have been used for centuriesand have been adapted to satisfy localneeds.28 Rainwater harvesting uses smalldams and embankments to trap run-off,usually with the aim of recharging ground-water. Surface sources such as springs andstreams are also diverted into naturaldepressions using bunds and check dams. Infloodplains, cultivation uses natural mois-ture brought in by annual floods. A varietyof water management techniques are used totap the soil water in wetlands and valleybottoms. Many of these localised practisesserve multiple purposes, such as checkingsaline ingress in coastal areas and recharginggroundwater in floodplains. Effectiveness,sustainability and productivity are location-specific and depend on the extent to whichthey are spatially integrated. One successfulexample comes from the Rajasthan area ofIndia (see Box 5.3).

In many regions rainwater is harvestedwhere it falls. In Argentina, Brazil, andParaguay, natural or artificial depressions areused to store rainwater for crop and live-stock production. In the semi-arid areas ofArgentina, Brazil and Venezuela rainwaterrun off captured from roads is collected indrainage ditches or street gutters andtransported to cultivation areas.29 Rainwaterharvesting initiatives in Gansu province inChina have provided both domestic andirrigation water to areas previously indrought (see Box 5.4).

There are hundreds of thousands of smallreservoirs or water tanks around the world,ranging from farm dams in Africa used toprovide intermediate storage, to recession

Water-harvesting structures to store rainwater runoff were constructed in theBhagani Tildeh river catchment in Rajasthan in response to water scarcity. Tractsof land inundated by the construction of embankments and dug retentionponds are referred to as johads. The production of crops and milk haveincreased many-fold in the Alwar district of Rajasthan due to the greateravailability of water through the construction of 2 500 johads in 500 villages. Thetotal expenditure incurred was in the order of $3.6 million (in 1998 prices), with73% contributed by local people. The johads have recharged the groundwatertable resulting in an average rise from 200 feet below ground level to 20 feet.

Sources: Thakkar, 1999, Contributing Paper forWCD Thematic Review IV.2 Irrigation Options

Box 5.3 A local approach to integrated water management,Rajasthan, India

Gansu Province lies on the loess plateau in central China and is one of the driestand poorest areas of the country, with annual per capita incomes of around $70–80 in rural areas. In dry years, traditional rainwater collection could not alwaysprovide sufficient water, and people were forced to trek long distances to riversor to depend on government water trucks. In response to the 1995 drought, the1-2-1 project was launched: it provided 1 clay tiled roof catchment area, 2upgraded cement water cellars, and plastic sheeting for concentrating rainwaterrunoff on 1 field. The project ensured that some 1 million people not only hadsufficient water but also could grow their own food and earn limited incomethrough cash crops. The total implementation cost for the project came to $12per capita.

Source: Gould, 1999, Contributing Paper forWCD Thematic Review IV.3 Water Supply

Box 5.4 Rainwater harvesting for domestic and agricultural use inChina



reservoirs in Cambodia that are used toenhance soil moisture for cultivation. InIndia and Sri Lanka, more than 500 000tanks store rain water, sometimes supple-mented by water from streams or smallrivers.30 Tank systems have provided irriga-tion and supported agriculture and liveli-hood for centuries in South Asia, althoughreliability problems, siltation, poor mainte-nance and degradation have reduced thearea served by small tanks in India from 4.6million hectares in 1960 to 3.3 millionhectares by 1987-88.31 In addition tohelping irrigation, tanks can play severalimportant roles, such as flood control, soilerosion control, conservation of runoffduring heavy rainfall and recharge ofgroundwater.

The implications of the widespread replica-tion of these small-scale storage methods onreducing demand for irrigation water andenhancing the sustainability of groundwatersupplies, as well as their impact on existingsurface water sources, could be far reaching.As described in Box 5.5 and Chapters 3 and4, the floodplains and deltas of a number ofthe world’s major rivers support wetlandecosystems of exceptional productivity thatin turn support large rural communities.Floods provide natural irrigation thatfertilises floodplain soils.32 As the floodwa-ters recede, arable crops are grown. Somesoil moisture persists in the dry season andprovides grazing for migrant herds. Flood-plain cultivation is among the most produc-tive and widely practised of agriculturalsystems in central and Sub-Saharan Africa.Similarly, wetland and delta cultivation iswidely practised in Southeast Asia. A form offlood agriculture specific to arid environmentsis spate irrigation, which diverts seasonal floodflows from dry riverbeds. Large areas underspate irrigation are found, for example inMorocco, Yemen and Pakistan.33

As noted earlier, there is a needto adequately account for theeffects of structural alternativessuch as dams and levees onthese natural irrigation ‘options’.It is also necessary to considerthe option of managed floodreleases from existing facilitiesas a means of re-establishing andsupporting these productivesystems.

Adopting water recycling

Reuse of irrigation drainage water can be amajor supply source in areas where intensivesurface irrigation is currently practised.Without formal arrangement, farmers in theEastern Nile Delta in Egypt use approxi-mately 3 billion cubic meters of salinedrainage water every year for irrigation aftersuitable dilution or treatment. Similarexamples exist in the North China plains,Arkansas valley in Colorado, the Pecosvalley in New Mexico and Australia.34

Drainage water reuse requires increasedlevels of management skills to deal withincreased levels of salinity, toxic concentra-tions and associated health concerns.

Cultivated wetlands and valley bottoms, with some form of traditional watermanagement constitute 12 200 km2 in Central Africa, East Africa and the Gulf ofGuinea. Flood recession agriculture is practised over an estimated 10 400 km2 inthe Gulf of Guinea and the Sudano-Sahelian region. In Senegal, the floodplainruns 600 km downstream of Bakel and covers an area of 10 000 km2. In goodyears half of it will be inundated, supporting close to a million people whodepend on cultivating the floodplain. In southern African countries seasonallywaterlogged lands called dambos, augmented by small human powereddevices like shallow treadle pumps, support crop production and smallholderfood security. In countries like Zambia, dambos cover 38 000 km2. Similarly,wetland and delta cultivation is widely practised in East Asia. In Vietnam, theMekong delta constitutes the principal rice producing area of the country. Riceis also grown extensively in the wetlands of Cambodia and in smaller quantitiesin Laos and Thailand.

Sources: Gulf of Guinea and Sudano-Sahel in FAO, 1995, p10;Senegal in FAO, 1997, p136; Zambia in Postel 1998, p213;

Southeast Asia in Friedrich, 2000,WCD Regional Consultation Paper

Box 5.5 Wetland and floodplain agriculture

Chapter 5


Reuse of urban wastewater is a significantsource for irrigation in a number of coun-tries. In Israel, 275 million m3 of wastewaterare used for irrigation after treatment. Thisis approximately 22% of the total agricultur-al use of water.35 Strict controls are neededon the level of treatment required forvarious classes of water, with more stringentrequirements for irrigating food grains thanfodder crops. Examples from Ghana andKenya also show the potential for peri-urbanirrigation based on water reuse.36 Whereregulation of water quality is weak, thispractice raises significant health concerns.

Investing in conventionalsupply-side measures

The potential to expand irrigation into newareas has sharply declined due to increasing-ly constrained resources and significantincreases in the unit development cost.Conventional sources of water for irrigationbesides reservoir storage behind large damsinclude diversion from rivers and lakes andgroundwater abstraction.

Diversion canals or lift irrigation pumpingschemes supply irrigation systems by ab-stracting water from rivers. For example,river diversions and pumped irrigation serve80% of the irrigated area in Kenya and 68%in Nigeria.37 The lack of over-season storageimplies that the capacity of the system toprovide multiple crops depends on thereliability of river flow. The size of run-of-river schemes can vary from a few hectaresto hundreds of thousands. Run-of-riverdiversions can be used to supplementstorage-based systems. In Sri Lanka, forexample, diversion weirs were built tocapture drainage water from upstream dam-based irrigation projects for reuse.

Groundwater abstraction has played animportant role in the global expansion of

irrigated agriculture. The availability ofelectricity, centrifugal pumps and well-drilling technology gave a major boost torapid growth, particularly by individualfarmers. Countries such as China, theUnited States, India, Pakistan, Bangladesh,Saudi Arabia and the North Africa regionhave high rates of groundwater use. Cur-rently in China, 8.8 million hectares of landare irrigated through groundwater wells,constituting 18% of the total irrigatedarea.38 The Ogallala aquifer in the UnitedStates waters a fifth of that nation’s irrigatedland.39 By the late 1990s, groundwater irrigat-ed over half of all irrigated land in India,contributing to 78% of additional irrigatedarea created between 1984 and 1994.40

Groundwater – employed on its own or inconjunction with surface irrigation – isoften more productive than surface irriga-tion per unit applied. The determiningfactor appears to be the higher degree ofcontrol available to farmers who are oftenprepared to pay considerably more forreliable sources of supply such as groundwa-ter.41 Improved management of surfaceirrigation systems, leading to greater reliabil-ity of supply, may similarly increase produc-tion and returns to water.

Continued withdrawal of groundwater atcurrent levels is, however, becoming unsus-tainable in many places. The Ogallalaaquifer, for instance, is being depleted at therate of 12 billion m3 annually. Falling watertables, increased pumping costs and histori-cally low prices have led to a reduction inthe area irrigated by the Ogallala of 20%over a 10-year period.42 Groundwaterdepletion has been a growing concern in theNorth China plains for over three decades,with water levels falling by 30 metres sincethe 1960s.43 Efficiency improvement meas-ures are as important to groundwater systems



as to surface water irrigation. Effectiveregulation is also necessary to curb over-pumping, which leads to lowering watertables and can limit access of poorer farmers.

Sustainable use of groundwater can beachieved through controlled abstraction andassociated recharge measures. Recharge canbe achieved by spreading surface water overlarge areas, using recharge wells, and waterharvesting techniques as described above.Floodplains perform a significant naturalrecharge function. As floodwaters soaksthrough, underground reservoirs are re-charged, and these supply water to wellsbeyond the floodplain. Recharge can also bea suitable approach for controlling salineintrusion and land subsidence and forreducing pumping costs. Most of the artifi-cial recharge systems used to date havefocused on small-scale systems or municipalwater supply uses.

Currently, almost half of the large dams inthe world provide irrigation services. Thespread and contribution of dams to irriga-tion and food production and the environ-mental and social implications of their usewere described in previous chapters. Asdiscussed in Chapter 4, irrigation projectscan have significant multiplier effects onthe local economy in terms of contributingto the development of agricultural process-ing and related industries. The WCDKnowledge Base does not elaborate on thecomparative effects of the different optionsin terms of engendering such multipliereffects, although this will be an importantconsideration for options assessment.

Obstacles and enablingconditions

A number of policy, institutional, andregulatory factors hinder the emergence andwidespread use of an appropriate mix of

options that would respond todifferent development needs,sustain a viable agriculturalsector, provide irrigation andoffer livelihood opportunitiesto large populations. First,policy and institutionalsupport for innovation,modernisation, adaptation,maintenance and extension oftraditional irrigation andagricultural systems waslacking in the past. Increasingrecognition of this has led anumber of actors to place priority on im-proving rain-fed agriculture and developingsmall-scale irrigation capacity. An extensionof this priority is the need to protect (orrestore) the natural functioning of deltas,floodplains and catchments in order tosustain and enhance the productivity oftraditional systems in these areas.

Second, the institutional framework needsto be redefined by transferring managementto decentralised bodies, local governmentsand community groups (water users associa-tions or other appropriate bodies) forrecovering tariffs and maintenance. Strong-er commitment is required to transformirrigation bureaucracies into more efficient,service-oriented organisations capable ofmanaging water and land in an integrated andsustainable manner. Irrigation water needs tobe appropriately priced so that charges arebased on volume used, taking into account theneed to support basic needs and serve bothequity and conservation. Third, emphasis mustbe given to developing a package of agricultur-al support measures that are mutually reinforc-ing and develop intersectoral linkages in thelocal economy so as to spur rural development.These efforts also need to counteract thetendency of current policies and extensionservices to impose high transaction costs and

Sustainable use ofgroundwater can beachieved throughcontrolled abstractionand associated rechargemeasures. Recharge canbe achieved byspreading surface waterover large areas, usingrecharge wells, andwater harvestingtechniques.

Chapter 5


risks on smallholder farmers indeveloping countries. Measures toenhance security of tenure arealso required.

Farmers also need access tointernational markets throughreduction in barriers and sup-portive domestic policies. Inresponse to structural adjust-ment programmes and interna-tional agreements on worldtrade in agriculture, many

developing countries have liberalised theiragricultural policies, including cutting tariffsand subsidies. However, tariff and non-tariffbarriers to OECD markets – such as thelarge production and export subsidies forfarmers in the US and European Union –limit the ability of developing countries’ todiversify their agricultural sectors and gainthe benefits of increased international trade, aswell as increasing rural poverty where localfarmers cannot compete with cheap imports.44

To sum up, future assessment of alternativeswill need to clearly consider the following:

■ improvements to the efficiency andproductivity of existing irrigation systemsbefore planning and implementing newones;

■ adaptation and expansion of local andtraditional water management solutions;

■ more co-ordinated management ofsurface and groundwater resources; and

■ improvement of the productivity of rain-fed agriculture.

To make progress in this area will requireconcerted efforts in policy formulation andinstitutional reform.

As an aid to this assessment it will be usefulto more fully understand the contribution ofalternative irrigation and agricultural

options to food production and livelihoodsecurity. For this purpose, analysis thatextends beyond the immediate costs andbenefits of these options to the secondaryeconomic impacts on specific social groupsis necessary.

Energy and ElectricityThe range and scale of energy resources andtechnologies for electricity demand-sidemanagement and supply have expandeddramatically in the last quarter-century dueto advances in individual technologies andgreater success in adapting existing and newtechnologies to local settings. While coun-tries have different energy resource endow-ments, there is no supply global crisis on thehorizon as is anticipated for fresh water. Theworld’s renewable sources and fossil fuels aresufficient to meet foreseeable global de-mands for electricity generation over thenext 50-100 years using existing or near-term technologies.45 Moreover, the range ofenergy systems and technologies that may becalled upon to convert primary energy sourcesinto electricity has dramatically expanded inthe last few decades. The priority for a sustain-able and equitable global energy sector is forall societies to increase the efficiency ofenergy use and the use of renewable sources.High-consumption societies must alsoreduce their use of fossil fuels.

Key factors in the expansion of optionsinclude the improved capacity of developingcountries in design and manufacturing,growing experience in adapting new tech-nologies to rural and decentralised settings,and enhanced cost-competitiveness of thenew technologies due to volume production– ranging from wind-turbines to compactfluorescent bulbs. These have given devel-oping countries the opportunity to ‘leapfrog’over older options when extending services

The priority for asustainable and

equitable global energysector is for all societies

to increase the efficiencyof energy use and the

use of renewablesources. High-

consumption societiesmust also reduce their

use of fossil fuels.



to rural and urban areas. Innovation andchange were spurred by the oil price shocksin the 1970s and 1980s, which promptedmajor academic, government and industryprogrammes to develop alternatives. As oilprices in the late 1980s and 1990s fell backin line with historic real prices and theperceived shortages and security threatreceded, alternatives were set aside. Recog-nition of the causes and scale of the threatof global climate change in the 1990s haverefocused work on alternatives, and galva-nised the thinking on sustainable develop-ment, including the role of the power sector.A tripling of oil prices in early 2000 pro-vides a further reminder of the need forcontinued long-term research and develop-ment of alternatives to fossil fuel technolo-gies.

Some observers suggest that the world hasentered a period where the revolution inelectricity technology – coupled with therevolution in digital technology – will pavethe way for a profound transformation in thedelivery of and access to electricity servicesearly in the 21st century.46 It is certainlybroadly accepted that the long-term trend istowards a global energy system that is lesscarbon-intensive and less reliant on finiteenergy resources. Nonetheless, there isconsiderable debate on the means andtiming of the transition, its shape in differ-ent regions of the world, and its contribu-tion to addressing the larger global equityissues of disproportionate resource use.There is also considerable inertia andresistance to change in the existing system,but the direction implied is clear: a shifttowards ‘cleaner fossil fuels;’ a significant,accelerated shift towards the use of renewa-ble energy sources for electricity generationand a focus on improving efficiency in thedelivery and use of electricity services.

The world’s demand for electric-ity has doubled over the past 22years.47 People are using moreelectrical services in the tech-nology-driven digital economy,and are using electricity morewidely in post-industrial,transitional and developingeconomies. Yet the supply anduse of electricity is highlyskewed between industrial and developingcountries and between the rich and the poorin developing nations. There are enormousopportunities for demand-side managementin industrial economies. Government effortsto reduce greenhouse gas emissions and makea contribution to climate stabilisation targetsare indications of moves in that direction.

There is also considerable scope for efficien-cy improvements in developingeconomies, where they wouldmoderate the required investmentin new supply. In addition, almost2 billion people, both urban andrural poor, have no access toelectricity at all.48 Rural popula-tions are often low-income andlive in settings where centralisedenergy services are expensive,both in national or consumerterms. Decentralised, off-gridsystems are an important optionin these areas.

Figure 5.1 provides a simple schematicrepresentation of the electricity sector today,showing generation, transmission, distribu-tion and end-use components. As shown,there are three general ways to improve thedelivery of electricity services:

■ demand-side management options,concerned with efficiency on the userside of the electricity meter;

Rural populations areoften low-income andlive in settings wherecentralised energyservices are expensive,both in national orconsumer terms.Decentralised, off-gridsystems are animportant option inthese areas.

Chapter 5


■ supply-side efficiency measures, con-cerned with how efficiently electricity isgenerated by the centralised or localsupplier and transmitted and distributedto users; and

■ new supply options, which replaceexisting generation options or supplyincremental growth in demand beyondwhat can be achieved by options in thefirst two categories.

New supply options may be further dividedinto grid and off-grid options. The latterincludes small isolated ‘mini’ grids andstand-alone supply to individual customersand homes. These options are outlinedbelow beginning with demand-side manage-ment and then passing on to supply-sideoptions (efficiency and new supply) and finallycovering options for rural electrification.

Demand-side management

In the context of this report, demand-sidemanagement (DSM) represents an opportu-

nity to reduce the need for electrical genera-tion and consequently the need for dams.The discussion also has broader dimensions.Demand-side management is about consum-ers using less electricity and using it moreefficiently in the residential, industrial,commercial or government sectors. Themajor entry point for these improvements isthe replacement of energy inefficientappliances. Enabling conditions that affectDSM uptake of improved appliances includethe replacement cycle (whether it is a few ormany years), standards, comparative costand availability, consumer awareness andaffordability. Generally investments in DSMthat promote consumers’ use of efficientappliances will be more than offset by theavoidance of investments in new supply andenvironmental and social costs of generation.

Recent investigations as part of the UNDP’sWorld Energy Assessment, to be finalised in2001, indicate significant potential forelectricity efficiency improvements in allcountries.49 The technical potential in

Figure 5.1 Schematic of Electricity Options

Electricity

Supply

Tariff structureLoad managementInterruptable loadsEnd-use efficiency

Demand

Loss reductionand improvementSystem reliability• transmission• distribution

Main grid

Power plants• thermal (coal,

oil, gas)• nuclear• hydro

(storage,run-of-river, pumped storage)

• wind• solar• biomass• co-generation

Isolated network

Power plants inmini-grid• diesel• small hydro• biomass• wind• cogeneration

Home systems

• solar home systems

• micro turbines• fuel cells

Transmission andDistribution



countries with a high per capita consump-tion, such as the United States, may be upto 50%, including modification of consump-tion and improved conservation behaviour.Others see less potential. Recent successfulprogrammes in Asia and elsewhere alsoillustrate that there is great potential forDSM, particularly in the modern sectors ofdeveloping countries.50 Most efficiencymeasures and technologies are cost-effective attoday’s electricity prices, and the use of fullenvironmental and social costing of electricitysupply options makes them even more so.

Despite the promise, actual global invest-ments in energy efficiency and the savingsfrom them continue to be small comparedwith the potential. And while utility-govern-ment partnerships in DSM grew strongly inthe 1980s in North America and Europe, themove to open markets has led to lowerelectricity prices and a perverse disincentivefor DSM in terms of tariffs. At the sametime, many power utilities have dramaticallycut their DSM programme budgets.

Several market and institutional barrierscontinue to obstruct the accelerated adop-tion of efficient end-use appliances andrealisation of the potential of DSM:

■ Utilities closest to the consumer often viewefficiency in terms of loss of market share,and in trying to meet a growing demandtend to think at first of new supply options.

■ Subsidies are still given for energy supplyand consumption (especially for energy-intensive consumers), and there is a lackof credible commitment to energyefficiency from governments and inter-national agencies.

■ Governments find it easier and morepolitically attractive to approve newsupply options than to get consumers touse energy more wisely.

■ The structure of the international energyindustry remains biased against DSM.

The latter bias stems in part from thediversity of producers in the industry whichinhibits the development of a lobby struc-ture similar to that of the energy supplyindustry which is dominated by some 50global players.51

The fundamental enabling condition toimprove the prospects for DSM is thatgovernments lead the way andclearly define the support rolesfor utilities. Effective policiesthat can reduce transaction costsinclude continuation and expan-sion of information and productpromotion, training programmeson energy efficiency service forsuppliers and consumers, mini-mum efficiency standards,labelling and endorsement ofhigh-efficiency equipment andselective government procure-ment. Other steps will requireinnovative financing and con-tracting mechanisms, removal of subsidiesfor conventional supply options and crea-tion of power-sector regulatory frameworksand market incentives that encourage DSM.Ultimately, building capacity to design anddeliver efficiency policies and programmesin government agencies and utilities isrequired.

Supply-side options

Before electricity reaches the consumer,there are two broad ways to improve electri-cal services: investment in supply-sideefficiency and new generation. The latteroption involves two further issues – substi-tuting current generation with new sources(for example replacing fossil fuels with wind

Most efficiencymeasures andtechnologies are cost-effective at today’selectricity prices andthe use of fullenvironmental andsocial costing ofelectricity supplyoptions makes themeven more so.

Chapter 5


power), and meeting increments of demandgrowth in economies that are expanding.

Supply-side efficiency

From the point where the electricity isgenerated to its end-use destination, numer-ous technical and non-technical losses mayoccur. The technical losses include con-sumption at the power station, step-uptransformer losses, and transmission anddistribution losses. There is considerablescope to reduce conveyance losses in manycountries and these require urgent attention,especially where programmes have not beenintroduced.

Losses between what is sent out from thepower station and what is recorded as powerconsumed on the customer’s meter can be ashigh as 35-40% in some countries – andmore in exceptional cases. Making existing

transmission and distributionsystems work better can lead toconsiderable savings, and oftendefer the need for new supply. InIndia, for example, 35% ofelectricity generated is lost inthe transmission and distributionsystem before reaching theconsumer. Yet it is consideredtechnically feasible to reducethese losses to around 15%.52

Moreover, the improvements areeasier to implement than DSM.Investment in improving thetechnical efficiency of transmis-sion and distribution efficiency

systems may be undertaken in a few yearsand typically involve action by a singleagency.

Advances in transmission technology alsoshow particular promise for improvingtransmission and distribution efficiency.Major advances in electronic control

systems and direct current transmissiontechnology, including back-to-back AC/DCconverters, are paving the way for operationand grid connection of a diverse array ofoptions on electrical systems, particularlyrenewables. These technologies enableconnection of small generators with inter-mittent power (for example wind) to thegrid and allow interconnection of grids atdifferent voltage levels.

A recent and significant trend in the powersector is the regional interconnection ofelectricity grids. This ranges from bilateralarrangements for electricity sales betweentwo neighboring countries, to cooperativepower pool arrangements, to full spot-market and open pools involving severalcountries. Power pools and arrangements arein place in Europe and in North America.They are now emerging in Central America,parts of South America, Asia and Africa.China is in the process of transforming intofive regional energy pools under the Elec-tricity Law (1997) and early stages of powerpool formation are underway in other partsof Asia.

In parallel with the trend towards linkinggrids, is the rapid expansion of regionalpipeline networks – mainly for gas but alsofor oil. By linking and therefore expandingpower markets these two trends are likely toincrease the ability of already installedcapacity to meet demand, increase systemoperating reliability, and reduce vulnerabili-ty to drought in grids with a mix of hydro-and thermal power. These changes willaffect the future competitiveness of differentelectric power generation technologies.

New generation options

Excluding hydro, which represents 19% ofthe world’s electrical supply, all renewablesources including biomass, wind, solar,

Major advances inelectronic control

systems and directcurrent transmission

technology, includingback-to-back AC/DC

converters, are pavingthe way for operation

and grid connection of adiverse array of options

on electrical systems,particularly renewables.



geothermal, ocean energy sources and co-generation currently constitute around1.4-1.6% of generation globally.

Every electricity-generating technology –including coal, oil, natural gas, nuclear,biomass, wind, solar, geothermal and oceanenergy – has technology-specific characteris-tics that make it suitable or unsuitable fordifferent roles in the system. There are alsotechnical limits to the amount of power thatany intermittent source (such as hydropow-er, wind or solar) can supply to the gridbefore reliability of supply is affected.Numerous technical criteria influence theutility preference for a particular generationsource, especially in terms of the role of theoption in the system (namely, peak, base,reserve or intermittent power supply). Otherconsiderations include comparative cost,reliability, flexibility, efficiency, availability,experience and familiarity with the technolo-gy and its operation. Public policy and regula-tion are also important factors in decidingtechnology choices in the power sector.

While conventional generation technolo-gies are mature, each is undergoing techno-logical advances, with manufacturers andsuppliers working to improve efficiency,reduce costs and construction times, andminimise emissions and environmentalimpacts. In the face of competition andrapid market change, power utilities andproducers favour proven low-risk optionswith short construction times, and prefera-bly off-the-shelf technologies. Gas-firedcombined cycle systems, which combinehigh efficiency and flexibility with a com-paratively low initial investment cost, havebecome the preferred choice where gas isavailable. When it is not available, thechoice depends on the energy resource base.Typically the choice would be coal-firedplant for baseload (40% of generation

globally) and oil-fired gasturbines for peaking andstandby. Nuclear power, whichwas the fastest growing sourceglobally between 1976 and1996, is faced with high invest-ment costs, limited publicacceptance, and unresolvedconcerns on high-level wastedisposal and decommission-ing.53 The outlook for nuclearpower remains highly contro-versial, and countries such asSweden and Germany haveplans to eventually eliminatenuclear generation. The use ofco-generation and combinedheat and power (CHP) facilitiesis growing. CHP plants provide space andwater heating along with electricity in coldclimate settings, with very high efficiencies.

With current trends in power sector reformand financing, private developers areshowing limited interest in large hydropow-er projects except for uniquely competitivelow-cost sites and medium and small high-head hydropower in hilly and mountainousareas with few other energy resources.

Wind power is the fastest growing of therenewable energy options and is competitivewith other conventional options when aback-up generation source is available andwhen government support (for examplecarbon credits for offsetting GHG emis-sions) is provided as an incentive. Globalannual growth in installed capacity of windturbines averaged 40% between 1994 and1998.54 In 2000, installed capacity stood atmore than 13 000 MW in 50 countries(though this is currently small in terms oftotal electrical generation, equivalent to0.4% of installed global capacity). Europehas 70% of the grid-connected wind capaci-

Chapter 5


ty, North America about 19% and Asiaabout 10%. About 45% of the Europeanwind capacity is installed in Germany.

In the last two decades, the cost of windpower under good wind conditions droppedby 75%, bringing it within reach of avoided

fuel costs of modern fossil-fuelled power plants.55 TheEuropean Wind Energy Associ-ation estimates that, fuelled byfurther cost reduction resultingfrom volume production, theinstallation of new windcapacity could rise rapidly at20-30% annually so that by2020 a total of 1.2 million MWof wind capacity could be

installed world-wide, providing 10% of theworld’s electricity.56 Much of the futuredevelopment is expected to occur offshore.

The cost of solar photovoltaics (PV) hasdropped 80% in the past two decades andwill need to fall by a further 50-75% inorder to be fully competitive with coal-firedelectricity. Photovoltaic technologies havereached a global production level of 120MW. Although PV production is expectedto keep rising, this technology will notsignificantly contribute to grid powerrequirements in the short term due to highcost. The long-term potential is considera-ble, however. Another renewable technolo-gy, solar thermal systems, can already almostcompete with conventional thermal insettings with high solar insolation levels.

In addition to wind and solar, biomass andocean energy systems (wave, tidal energy,and ocean thermal) have application forgrid power. Biomass options are commercialwhere biomass fuel is readily available. Butfor large-scale applications, the extent towhich this potential can be used will depend

on numerous factors such as competition forwater and land with other users, concernsover the loss of biodiversity to plantations,and technologies for biomass conversion toconvenient energy services. Consequently,the greatest potential for biomass is seen indecentralised local systems.

Among advanced technologies in researchand development, microturbines and fuelcells show the greatest near- and mid-termpromise. Fuel cells are electrochemicaldevices that convert hydrogen and oxygendirectly into electricity and heat. A numberof companies are currently investing signifi-cant amounts in fuel cell research anddevelopment (R&D) and expect the com-mercialisation of the technology for use invehicles and in grid and off-grid electricitysupply by 2005. While natural gas is expect-ed to be the main source of hydrogeninitially, in the future hydrogen could beproduced at remote hydropower sites, windfarms, solar stations and ocean power plants.

Electrification in rural areasIn rural areas, electricity can be suppliedfrom existing grids under traditional ruralelectrification or from decentralised localgrids. Perhaps the greatest expectation forchange is the deployment of new andrenewable technologies for rural electrifica-tion in decentralised mini grids and smallsimple devices for households. There is anopportunity to leapfrog the distributionstage and reach some of the 2 billion peoplewho currently have no access to centralisedelectricity grids.

At the moment, policy-makers generallyprefer centralised electrification optionsbecause the technologies are already proven,they retain the flexibility to cater for bothurban and rural demand, investment credit(domestic and foreign) and established

Among advancedtechnologies in

research anddevelopment,

microturbines and fuelcells show the greatest

near- and mid-termpromise.



credit mechanisms backed by governmentguarantees are available, and the technolo-gies are accepted by key institutions, such asplanning bodies, utilities, local governmentagencies and others. There are other subjec-tive reasons in favour of centralised electrifi-cation including the vested interests ofvarious groups. Although grid extension willremain important, it is unlikely that central-ised approaches will continue to consumethe bulk of the financial resources availablefor rural electrification.

Rural electrification based on decentralisedapproaches has been taken up by utilityplanners for social objectives, but there is astrong preference in many areas for commu-nity-based decisions on the options. Decen-tralised electrification options are attractivefor a number of reasons:

■ They are simple and flexible ways toextend energy services to remote areasthat have a low gestation period, maycost less, and involve low adverse envi-ronmental impacts. They include simplehousehold lighting systems and mini-grids powered by diesel generating sets,small steam or gas turbines, micro-hydro units, windmills coupled togenerators, modified engines usingbiofuels coupled with generators andphotovoltaic systems.

■ Community-based solar programmes aregaining momentum and can be used forrural industry, to meet needs like cropprocessing or water pumping and forhousehold lighting, with a range offinancing mechanisms to recover capitaland operating expenses.

■ Rapid improvements in technology andorganisational learning have madesystems based on renewable energyincreasingly attractive and available.

Some of the key elements of arural electrification policyinclude:

■ financial support for commu-nity institutions for owner-ship and implementation oftechnologies based on localresources or strategies;

■ subsidisation of most aspectsof rural electrification formeeting cost of delivery orthe inability of low-incomeconsumers to pay for theservices at cost recovery levels; and

■ consideration of sustainability of anyrural electrification programme to ensureits success, taking into considerationeconomic, environmental and socialaspects.

Obstacles and enablingconditions

Numerous barriers prevent the rapid spreadof the new renewable technologies andDSM innovations including: the direct andhidden subsidies that have been built upover time for conventional energy technolo-gies, a lack of commitment from govern-ments, and the lobbying power of theconventional energy industry.

Over the life cycle of an energy system, taxand fiscal policies have an impact on thecompetitiveness of each electricity genera-tion option. Since many developing coun-tries had access to concessional financing forcapital but not operating costs, hydropoweroften had a clear advantage over the longer-term financing for other options. For emerg-ing renewable technologies, the cost ofprototypes is high, but dramatic cost reduc-tions would ensue due to mass production ifthe technology were widely accepted.

Rural electrificationbased on decentralisedapproaches has beenimposed on utilityplanners for socialobjectives, but there isa strong preference inmany areas forcommunity-baseddecisions on theoptions.

Chapter 5


Regulatory change has had a major impacton utility practices, and power sector reformcan create enabling conditions for theadoption of decentralised and renewablegeneration technologies for grid supply. Thereforms will also affect rural electrification.In many countries, especially in the South,power sector reforms are extremely contro-versial. Concerns are raised about the lackof transparent and accountable regulatorymechanisms that contribute to corruption aswell as about arrangements that favourprivate power producers, impacts on tariffs,and the consequent hardships for the low-income population.

Governments can take several steps toreduce the barriers to reform of the electrici-ty sector and the adoption of DSM, supply-side efficiency measures and non-fossil fuelbased generating technologies

■ In strategic options assessment, it isimportant to identify and make transpar-ent the level and nature of subsidiesthrough the life-cycle cost of each optionfrom extraction onwards.

■ Fiscal incentives or subsidies can stimu-late implementation of emerging tech-nologies until prices drop enough forthem to be commercially competitive.

■ Tariff policies influence the ability ofutilities to upgrade and improve existingassets and invest in new supply optionsand are currently being used to allowconsumer preference to enter the equa-tion at the bottom line (for exampleEuropean and other initiatives towards‘green’ power pricing).

■ In developing countries, where availabil-ity and cost of electrical services are ofgreater concern, tariff blocks that in-crease as consumption increases and life-line tariffs for low-income consumers,

cross subsidised by higher income con-sumers, can expand access.

■ Governments can also ensure that powersector reform is founded on a transparentregulatory framework in which consum-ers participate.

Water SupplyDomestic, municipal, and industrial con-sumption accounts for less than one-fifth ofwater use worldwide, and only about 5% inAfrica, Central America and Asia. Majorshortages occur in developing countrieswhere more than 1 billion people have noaccess to clean water, and supplies areunreliable for many more. Distribution ofwater supplies is also inequitable, with theurban poor using unreliable and poor-qualitysources and paying excessive amounts towater vendors. Urban demands are oftengiven priority over rural demands.

The issues and options differ betweenindustrial and developing countries:

■ In industrial countries, coverage rates aregenerally high, demand pressures aremoderate, and the focus is shifting toreducing consumption and increasingconservation in order to reduce or deferdevelopment of new supply sources.

■ In developing countries, the low levels ofservice coverage coupled with highdemand pressures have focused attentionon new supply sources. Poor performanceof existing water supply systems andweak management capacity are wide-spread and a large proportion of urbanpoor and disadvantaged communities’lack access to water supply.

Still, the exhaustion of supply sources nearurban centres and deterioration of waterquality are issues of concern across bothdeveloped and developing countries.



A number of opportunities exist to meetvarious kinds of water supply needs. Indeveloping countries, extending services tounserved populations in rural and urbanareas and revitalising sources that currentlysupply water to urban areas are priorities.Local resources and strategies may be moreappropriate, effective and affordable inproviding discrete supplies to communities.In situations where water needs cannot bemet through local sources, other solutionsare available. Demand-side measures, suchas influencing consumption patterns, arerelevant in industrial countries and amonghigh-consumption urban water users indeveloping countries. New sources of supplyare limited, however.

Demand-side management

DSM is gaining widespread acceptance inmany industrial countries. Its potential toreduce consumption is proportional to theprevailing level of use. DSM has a highpotential in the United States, whereaverage per capita consumption is about 400litres per capita per day. Developing coun-tries generally have low average per capitaconsumption rates, yet there is considerablevariation and potential for savings amonghigh volume users. In New Delhi, forexample, daily family use for those sup-plied with piped water ranges from 700litres for low-income families to 2 200litres for affluent families.57 Tariffs areheavily subsidised, with little incentive forconservation.

Washing and sanitation are heavy users ofwater in domestic and commercial settings.Institutional standards, regulations andsanctions are necessary to promote water-efficient technologies, including regulatorystandards for appliance and equipmentmanufacturers and subsidies to consumers to

retrofit water-saving devices. InDenmark, per capita consump-tion dropped 24% over 10 yearsdue to widespread adoption ofwater-efficient technologies,including toilets, showers, andwashing machines.58

In many locations, includingthe United States, South Africaand Europe, block tariff structures with lowlifeline tariffs and progressively rising ratesfor high levels of consumption have beensuccessful in controlling or reducing waterdemand. For these to be effective an effi-cient yet cheap system of water metering isessential.

A significant proportion of high-qualitydomestic water is used in conventionalsewerage systems to transport waste andtreat it although coverage varies. However,in Japan conventional sewer-age covers only 39% of thepopulation, compared with80% in Europe.59 A number oflow-cost and alternativesanitation systems that havelow water requirements areavailable, such as offset pitlatrines and septic tanks usedin parts of South America. InIndia, 10 million people use atwo-pit pour flush toilet, whichhas the potential of replicationon a large scale.60

Community management ofwater supply systems has a positive impacton both coverage and efficiency. Thissystem works best when using discrete watersources in rural and urban areas, and it canreduce demand for external water resources.For example, in Bwera, Uganda, a commu-nity manages a large-scale system where a

In many locations,including the UnitedStates, South Africa andEurope, block tariffstructures with lowlifeline tariffs andprogressively risingrates for high levels ofconsumption have beensuccessful in controlingor reducing waterdemand.

Chapter 5


gravity-flow water supply serves over 60 000people.61

Education and information are key elementsin a long-term commitment to more effi-cient use of water. Priority areas includeraising awareness about efficient technolo-gies and practices, financial incentives andsavings, metering, and the rationale under-lying any new tariff structures.

Supply-side alternativesThe loss of water from leakage, illegalconnections, and measurement problems ishigh. In Asian cities, this can amount to35-40%, with individual cities reaching ashigh as 60%.62 Stabilising and reducinglosses from piped systems can help extendservices. For example, figures in the UnitedKingdom suggest a 29 litre per capita per daydecrease in system loss as a result of manda-tory leakage targeting set by the regulatoryauthority. Proposals for a new dam inYorkshire were deferred by introducing aleakage reduction programme and otherconservation measures.63 To succeed,leakage reduction programmes requirestrong institutional capacity and regulationto enforce standards. Reducing system-operating pressure may offer a relativelysimple initial step to reduce leakage.

Rainwater harvesting through rooftops,tanks, and other methods are an alternativesource of domestic water supply. Major ruralsupply initiatives in Gansu, China and in

northeast Thailand are typical of theincreasing number of traditional rainwaterharvesting technologies that have beenupgraded to provide affordable and sustaina-ble supplies.64 With the rising cost ofconventional water supply, rooftop catch-ment systems are spreading in Argentina,Barbados, Brazil, Costa Rica, DominicanRepublic, Chile, Mexico and Peru.65 Rain-water harvesting is not restricted to ruralareas (see Box 5.6); it is also used by mil-lions of residents on the peripheries of newcities, like those in Tegucigalpa, Honduras.A related measure for increasing watersupply in rural areas is the placement ofartificial arrays in areas of high fog densityto capture cloud moisture.

In places with short, intensive rainy seasons,much of the rainwater runs off alreadysaturated surfaces. Even minor earthworkssuch as contour bunds and desilting existingvillage ponds can increase short-term above-surface storage enabling infiltration to occurover a longer period of time. Where sub-surface storage is available these methodscan raise the water table and make ground-water available longer into the dry season.In Chennai, India, the metropolitan watersupply utility tackled the problems ofgroundwater depletion and seawater intru-sion through a conservation-based strategy.A series of check dams increased groundwa-ter levels by 5-10 meters.66 These weresupplemented by controls on private waterextraction and compulsory rainwaterharvesting for new buildings.

As previously discussed in this chapter,maintenance of natural vegetation can haveimportant effects in terms of improvingwater quality, but with variable effects onwater supply. In South Africa, the Workingfor Water programme in the Western Caperegion supports the eradication of alien

In Germany subsidies are available to encourage households to constructrainwater tanks and seepage wells. Due to savings in monthly water charges andother concessions, investments are paid back in 12 years. In Japan, 70% of thefacilities in Tokyo’s Ryogoku Kokugkan sumo wrestling arena are supplied bystored rainwater.

Sources: Gould, 1999, Contributing Paper for WCD Thematic Review IV.3Water Supply; Down to Earth, 1998, p23

Box 5.6 Rainwater harvesting is spreading to urban areas



vegetation, thereby enabling the restorationof the indigenous fynbos vegetation. Fynbosprovides less cover and vegetative mass andthus the programme aims to provide bothemployment and water yield gains.67 Effortsby New York and New Jersey to purchaseand protect the Sterling Forest from devel-opment brought renewed attention to thewater quality benefits of forest managementaround single-purpose facilities near urbanareas. Sterling Forest protects a catchmentthat provides a series of reservoirs thatsupply water to more than 2 million peo-ple.68 In the latter case, catchment manage-ment serves to avoid the need to invest inwater treatment facilities or, in the extremecase, new supply sources. Such options arehighly location specific.

The recycling of wastewater can be anothersignificant source of supply. By 1999,enough water was recycled in the Bay Areaof California to meet the needs of 2 millionpeople. The target there is to increasecapacity to serve 6 million people by 2020.69

Agriculture used 32% of the recycled water,27% went to groundwater recharge, 17%supported landscape irrigation, 7% went toindustry, and the remainder for environmen-tal and other uses.

Desalination contributes to water supply in120 countries, with 60% of the 11 000desalination plants being located in thewater-scarce Middle East. Though costs ofdesalination have been reduced dramatical-ly, they are still high and the technique isvery energy intensive.70 Meaningful poten-tial exists, but a major technology break-through is required to increase desalination’sglobal contribution significantly.

Inter-basin transfer of water is often offeredas a solution to local water scarcity. Theimpacts of such transfers require careful

scrutiny, particularly as there will be noreturn flows within the basin as would occurwith other abstractions. As noted above,water can be transferred from agriculturaluse through alternative and more proactiveprogrammes, such as water trading, thateffectively cross-finance water efficiencygains in irrigated agriculture.

Enabling conditions

As with the other sectors, acommitment to policy, institu-tional and management reform isessential to implement demand-side management of watersupplies and alternative supplyapproaches. Initiatives includethe following:

■ In the United Kingdom,United States and Australia,regulations mandate explora-tion of all economicallyjustifiable demand-manage-ment initiatives before alicence for new abstraction isgranted.

■ Management efficiency isfundamental to conservation and im-proved planning. No single public orprivate management approach is appro-priate for all contexts. Stronger institu-tional capacity and accountability arerequired to improve the performance ofpublic agencies.

■ Effective regulatory mechanisms need tobe in place to safeguard access andaffordable cost of water for the urban andrural poor.

Meeting the needs of those currently notserved in both urban and rural areas is apriority and requires concerted efforts. Itrequires an appropriate mix of demand-side

Meeting the needs ofthose currently notserved in both urbanand rural areas is apriority and requiresconcerted efforts. Itrequires an appropriatemix of demand-sidemanagement measuresto enhance water useefficiency and reducewasteful consumption,increases in supplyefficiency and thedevelopment of newsupply sources.

Chapter 5


management measures to enhance water useefficiency and reduce wasteful consumption,increases in supply efficiency and thedevelopment of new supply sources. In thelatter case, due consideration is required tonon-conventional alternatives such asreducing conveyance losses, rainwaterharvesting, catchment management andwater recycling.

Integrated FloodManagementFloods differ widely in their nature, in thecharacteristics of the affected floodplains,and in their implications. As documented inearlier chapters, in some contexts millionsof people are dependent on annual floods fortheir livelihood, while in others similarfloods threaten life and property. A numberof options have emerged to predict, manageand respond to floods and at the same timeobtain the most socially beneficial andeconomically sustainable outcomes. Institu-tional and policy support is needed toachieve integrated flood management,which consists of flood alleviation andutililisation, mitigation and risk manage-ment rather than a strict reliance on struc-tural flood control based on dykes, leveesand dams.

Floods are a complex phenomenon, and thesuccess of flood intervention strategiesdepends on a number of factors. Chapter 2considered the performance of dams as astructural response to flood control andhighlighted the basis for concerns and theshift towards flood management as anapproach in place of flood control. Vulnera-bility to flood events determined by charac-teristics of the population and land-usesystems at risk and their capacity to copeand recover, are key issues in flood manage-ment strategies. Absolute flood control may

be neither achievable nor desirable. Themore appropriate objective is to predict,manage, and respond to the flood situationin order to prevent widespread losses andobtain the best outcome in each situation.

Following major destructive flood events inthe last few decades, significant changes inflood policy have occurred around theworld, redefining interventions to someextent. For example,

■ coastal flooding of 1953 led to the Deltaworks in the Netherlands;

■ the 1988-89 floods in Bangladesh led tothe Flood Action Plan and the NationalWater Management Plan; and

■ the Upper Mississippi floods of 1993, theRhone floods in 1993, the 1997 floods inthe Rhine and the 1998 flood in Chinadrew attention to the role of non-structural catchment measures.

Intervention strategies in flood managementhave gradually shifted from a focus onstructural responses to flood control tointroducing or expanding the role of non-structural responses as part of integratedstrategies for floodplain management.71

This section looks at the strategies andoptions available for integrated floodmanagement and control. These strategiesconsist of three broadly complementaryapproaches, namely;

■ reducing the scale of flood through anumber of structural and non-structuralmeans;

■ isolating threats through structural,technological and policy alternatives; and

■ increasing people’s capacity to copeeffectively with floods.

As with the role of large dams, associatedstructural measures and the relationship



between floods and natural floodplains havebeen discussed in earlier chapters, andtherefore the focus here is on alternativemeasures for flood management.

Reducing the scale of floods

Reducing the scale of floods implies manag-ing the quantity and quality of surface waterrunoff. Catchment management measuresinclude:

■ infiltration measures, such as infiltrationtrenches, detention basins, infiltrationponds, retention ponds and wetlandareas to reduce runoff; and

■ forest protection, reduced impact loggingpractices, avoidance of clear fellingtechniques and less intensive agriculturalpractices to reduce soil erosion andlandslides that lead to channel siltation,raising flood levels proportionately.

Small-scale storage of runoff and improve-ments in drainage are other approaches toflood mitigation, particularly at the local level.Check and warping dams (built for erosioncontrol) can lead to groundwater recharge andstore initial quantities of run-off during stormevents. Wire mesh dams are also used for thispurpose in the highlands of Trinidad wherethe mesh traps water-borne debris during flashfloods, blocking much of the flow.72

If afforestation is considered as part of apacket of measures, its effects on the fullrange of hydrological function and down-

stream uses should be consid-ered. In assessing the likelyeffectiveness of source controls,pre-flood conditions (such asfrozen or saturated ground) mustbe considered.

Flood flows can be stored in thelowlands, as detention basins are

normally dry except when required for floodstorage. In some cases, lakes on rivers can beused, such as the Dongting lake in Hunanprovince in China. Traditional tank systemsin flood-prone villages of Madhubani district,in Bihar, India, are used for floodwater diver-sion and storage.73 Natural wetlands are alsoimportant assets for flood storage and agricul-tural fields can be used for micro-storage.74

Isolating the threat of floods

Along with dams, earthen embankments,levees, dykes and bunds have been thedominant flood-control option in most ofthe world. One key characteristic of thisoption is that it interferes with naturaldrainage patterns in the area protected. Thisarea may still be flooded from local precipi-tation, with minor tributaries causing localflooding, inland flooding or drainage con-gestion. In the absence of adequate drain-age, the protected area will suffer crop lossdue to waterlogging.75 Significant morpho-logical changes can occur following theconstruction of embankments, as sedimenta-tion of channels and bank erosion lead toraised river beds and the need for evenhigher levels of protection (as noted inChapter 2).

Structures such as dwellings may be modifiedin a variety of ways to reduce the risk offloodwater penetration: waterproofing walls;fitting openings with permanent or temporarydoors, gates, or other closure devices; fittingone-way valves on sewer lines; or building

doolfotsehcaorppayratnemelpmoC:1.5elbaTtnemeganam

elacsehtgnicudeRsdoolffo

taerhtehtgnitalosIsdoolffo

s’elpoepgnisaercnIyticapacgnipoc

■ tnemhctacretteBtnemeganam

■■

stnemknabmedoolFgnifoorpdoolF

■■

gninnalpycnegremEgnitsaceroF

■■

ffonurgnillortnoCsnisabnoitneteD

■ nialpdoolfgnitimiLtnempoleved

■■

sgninraWnoitaucavE

■ smaD ■ noitasnepmoC■ sdnaltewgnitcetorP ■ ecnarusnI

Chapter 5


boundary walls around the house structure.Other possible measures include sump-pumpsthat begin operating in basements when waterlevels rise, and contingency plans and facilitiesdesigned to be operated when a flood isanticipated. Contingent flood proofingdepends upon a reliable flood warning sys-tem.76 This approach also includes raisingdwelling places. For example, in the floodplainkampungs (traditional villages) of Malaysia,houses are built on stilts to raise them aboveanticipated flood levels. Similar adaptations tofloods are found throughout Southeast Asiaalong rivers, estuaries and coastlines.

Increasing people’s copingcapacities

New integrated approaches for flood allevia-tion, mitigation and flood risk managementemphasise:

■ integrated catchment and coastal zonemanagement, and wise planning and useof floodplains and coastal zones;

■ empowering local communities to makechoices about land development andflood alleviation;

■ reducing the impacts of humans on theenvironment by promoting flood disasterresilience (see Box 5.7);

■ valuing and preserving the best ofindigenous adaptations and improvinglocal capacities to respond; and

■ addressing problems of equity (forexample alleviating poverty and lack of

access to resources as a means of address-ing flood vulnerability). 77

Emergency planning and management hasthree phases: preparedness, response andrecovery. The capacity of individuals, house-holds, groups, and communities to cope withflooding depends upon their knowledge,resources, organisation and power:

■ their knowledge about how to identify thata flood threatens, how to mitigate effects offloods, what to do before, during and aftera flood, the causes of flooding and appro-priate mitigation measures;

■ the resources at their command, includ-ing their skills and physical assets, andthe support of others that they can callupon; and

■ the extent of their organisation, includ-ing within households, within neigh-bourhood groups, and within wholecommunities, as a way of pooling knowl-edge, skills, resources, and planning andco-ordinating activities to achieveoptimum use and power in relation toother groups in society.

A flood management strategy will need tocover flood warnings, flood mitigation, anynecessary evacuation and post-flood recov-ery. A clear commitment by national orfederal governments to the emergencyplanning and management process willenhance its effectiveness.

Enabling conditions

Enabling conditions that will promote anintegrated approach to flood managementinclude:

■ Promoting public involvement anddevolution of decision-making to thelowest possible level enables integratedcatchment management. This is essentialas integrated flood management strate-

‘Resilience’ may be taken as the opposite of vulnerability and may be enhancedby promoting access to knowledge and resources achieved through develop-ment processes and poverty reduction programmes. Alternatively, traditionalsocial and cultural systems may enable resilience. The vulnerability of poor, ruralMalaysians to floods in eastern Peninsular Malaysia is reduced by close kinshipsystems that exist in the floodplain villages.

Source: WCD Thematic Review IV.4Flood Control, Section 4.2; Malaysia in Chan, 1995

Box 5.7 Flood resilience



gies at catchment level are most appro-priate to local conditions.

■ Funding should have a multi-functionalapproach. Integrated management of thecatchment will increasingly result inmulti-functional options being adopted.

■ Institutional design is critical to thesuccess of a flood hazard managementpolicy, and co-ordination across variousinstitutions has been a crucial factor.

■ Flood hazard management and emergen-cy response agencies have a key role inenhancing local communities’ copingcapacities by involving them in decision-making on all matters relating to floods.

The overriding message is that local owner-ship of flood alleviation strategies andoptions is necessary for long-term success.

Findings and LessonsThis chapter has examined the options forfulfilling energy, water and food needs intoday’s circumstances and the barriers andenabling conditions that determine choiceor adoption of particular options. Manyoptions currently exist – including demand-side management, supply efficiency and newsupply options. These can all improve orexpand water and energy services and meetevolving development needs across allsegments of society. An overview of optionsfor all the sectors covered suggests thefollowing general findings and lessons:

■ Demand-side management optionsinclude reduced consumption, recyclingand technological and policy optionsthat promote water and power efficiencyat the point of end-use. DSM has signifi-cant untapped and universal potentialand provides a major opportunity toreduce water stress as well as achieveother benefits such as the reduction ofgreenhouse gas emissions.

■ Improving system management can deferthe need for new sources of supply byenhancing supply and conveyanceefficiency. Needless loss of power andwater can be avoided through reductionsin water leakages, improving systemmaintenance and upgrading control,transmission and distribution technologyin the power sector.

■ Basin and catchment managementthrough vegetative and structural meas-ures offers an opportunity across allsectors to reduce sedimentation ofreservoirs and canals and manage thetiming and quantity of peak, seasonaland annual flows, as well as groundwaterrecharge. The multi-functional nature ofthe hydrological system; the types andimportance of downstream uses of water;and the on-site costs and benefits of themeasures themselves will determine theattractiveness of different interventions.

■ A number of supply options haveemerged that are locally and environ-mentally appropriate, economicallyviable and acceptable to the public,including water recycling, rainwaterharvesting and wind and solar (off-grid)power.

The ability of various options to meetexisting and future needs or to replaceconventional supplies depends on thespecific context, but in general they offersignificant potential individually andcollectively. More specifically the differentsectoral alternatives are as follows:

■ In the irrigation and agriculture sector,preference is for improving the perform-ance and productivity of existing irriga-tion systems and alternative supply-sidemeasures that involve rain fed, as well aslocal, small-scale and traditional watermanagement and harvesting systems,including groundwater recharge methods.

Chapter 5


■ The priority for achieving a sustainableand equitable global energy sector is for allsocieties to increase the efficiency ofenergy use and the use of renewablesources. High-consumption societies mustalso reduce their use of fossil fuels. Decen-tralised, small-scale options based on localrenewable sources offer the greatest near-term and possibly long-term potential inrural areas.

■ In the water supply sector, meeting theneeds of those currently not served in bothurban and rural areas through a range ofefficient supply options is the priority.Further efforts to revitalise existing sources,introduce appropriate pricing strategies,encourage fair and sustainable watermarketing and transfers, recycling andreuse, and local strategies such as rainwaterharvesting also have great potential.

■ In the case of floods, as absolute floodcontrol may be neither achievable nordesirable, it is necessary to manage floodsto minimise flood damage and maximiseecological benefits. An integrated ap-proach to flood management will involvereducing a community’s vulnerability to

floods through structural, non-structural,technological and policy alternatives, andincreasing people’s capacity to cope withfloods.

Numerous market, policy, institutional,intellectual and regulatory barriers hinder theemergence and widespread application of anappropriate mix of options in response toneeds in the power and water sectors. Thebarriers to be overcome include capacity andresource constraints, the dominance ofconventional approaches and interests indevelopment planning, a lack of awarenessand experience with non-conventionalalternatives, inadequate access to capital and alack of openness in the planning system.These are further analysed in the next chapter.While they are context-specific, hiddensubsidies and other incentives to conventionaloptions may limit the use and rate of adoptionof even superior alternatives. To better enablethe selection and use of the broader range ofoptions will require that options are compre-hensively and fairly evaluated by all stakehold-ers throughout the planning, decision-making,and financing process.

Endnotes

1 Sources are cited in the sections below onlywhen they do not appear in these ThematicReviews or where it is otherwise necessary forclarity.

2 Postel, 1999, p41; FAOSTAT, 1998.

3 WCD Thematic Review IV.2 IrrigationOptions, Section 1.3.

4 Bosch and Hewlett, 1982.

5 Bruijnzeel, 1990.

6 Postel, 1999, p93.


8 Huasham et al, 1995 in WCD ThematicReview IV.2 Irrigation Options, Annex 8.

9 Mitchell, 1995, in WCD Thematic ReviewIV.2 Irrigation Options, p118.

10 Murray-Rust and Vander Velde, 1994.

11 OED, 1990, p4.

12 FAO, 1995, p280.

13 WCD India Country Study, Section 3.3.1.

14 FAO op cit, p233.

15 FAO, op cit.

16 Seckler, 1996.

17 Cornish, 1998, p20.



18 Cornish, op cit.

19 Frausto, 1999, Contributing Paper for WCDThematic Review IV.2 Irrigation Options, p18.

20 FAO et al, 1999.

21 Vermillion, 1997.

22 WCD India Country Study, Section 3.3.6;Vermillion, op cit.

23 Bandaragoda, 1999; Vander Velde and Tirmizi,1999.

24 Brehm and Quiroz, 1995; Hearne and Easter,1995 cited in Hearne and Trava, 1997.


26 Agrawal and Narain, 1997; Thakkar, 1999,Contributing Paper for WCD ThematicReview IV.2 Irrigation Options.

27 Frausto, op cit.

28 WCD India Country Study; Agrawal andNarain, op cit; Barrow, 1999.

29 Ringler et al, 1999, p10.

30 Agrawal and Narain, op cit.

31 WCD Thematic Review IV.2 IrrigationOptions, Annex 1.

32 Acreman et al, 1999, Contributing Paper forWCD Thematic Review II.1 Ecosystems.



35 Shevah, 1999 in WCD Thematic Review IV.2Irrigation Options, Section 4.3.2.

36 DFID, 2000.

37 FAO, op cit, p234.

38 Ministry of Water Resources and ElectricPower, PRC, 1987, cited in Postel, 1999, p56.

39 National Research Council, 1996, cited inPostel, 1999, p77.

40 Thakker, op cit.

41 Dhawan, 1998, cited in WCD ThematicReview IV.2 Irrigation Options; Molden et al,1998.


43 ADB, 1999c.

44 Smith, 2000, Contributing Paper for WCDThematic Review IV.2, p17, 30.

45 UNDP et al, 2000.

46 Flavin, 1999, Contributing Paper for WCDThematic Review IV.1 Electricity Options,Annex H; Economist, 5 August 2000.

47 IEA, 2000.



50 Rumsey and Flanigan, 1995; Worrell, 1999working draft.

51 UNDP 2000, Chapter 6 p1.

52 Sant et al, 1999 eco013, WCD Submission.

53 IEA, 1998 and balances of non-OECDcountries.

54 Kowalski and Schuster, 2000, p165.

55 WCD Thematic Review IV.1 ElectricityOptions, Section 3.4.

56 EWEA, 1999, Contributing Paper for WCDThematic Review IV.1 Electricity Options,Annex H.

57 WCD Thematic Review IV.3 Water SupplyOptions, Section 6.5

58 White et al, 1999, eco018, WCD Submission,p9.

59 Lane, 1999, Contributing Paper for WCDThematic Review IV.3 Water Supply Options.

60 WCD Thematic Review IV.1 ElectricityOptions, Section 2.4.2.

61 WCD Thematic Review IV.1 ElectricityOptions, Section 3.12.

62 McIntosh and Yñiguez, 1997, cited in WCDThematic Review IV.3 Water Supply Options,Annex 1.

63 Yorkshire Water, 1997, eco082 WCD Submis-sion A7.1.

64 Gould, 1999, op cit.

65 Ringler et al, 1999, p10.

66 SANDRP, 1999 opt080, WCD Submission, p20.

67 Preston, 1999. Contributing Paper for WCDThematic Review IV.3 Water Supply Options.

68 Stapleton, 1996, p2-5.

69 Dickinson, 1999, Contributing Paper for WCDThematic Review IV.3 Water Supply Options.

70 Costs range from $1.50-5.00 per cubic metre.

71 WCD Thematic Review IV.4 Flood Manage-ment Options, Section 1.2.3.


73 WCD India Country Study, Annex 5.

74 Delaney, 1995 in WCD Thematic Review IV.4Flood Management Options, Section 4.4.2.


76 WCD Thematic Review IV.4 Flood Manage-ment Options, Section 4.4.


Decision-Making, Planning and Compliance


Chapter 6:

Decision-Making, Planning andCompliance

The previous chapters suggest

that the main challenge for

water and energy resource developers

in the 21st century will be to

improve options assessment and the

performance of existing assets. This

will require open, accountable and

comprehensive planning and decision-

making procedures for assessing and

selecting from the available options. It

also calls for monitoring programmes,

evaluation procedures and incentive

mechanisms that ensure compliance

with project commitments, especially

in the area of environmental and social

performance. To do this we need a

Chapter 6

Parting the Waters: The Report of the World Commission on Dams168 Dams and Development: A New Framework for Decision-Making

better understanding of why large dams wereproposed and developed, and why failures inperformance and impacts on ecosystems andaffected people are still not properly

accounted for, monitored orresolved. This chapter draws onthe WCD Knowledge Base tocharacterise the critical problemsencountered in the past, analysetheir underlying causes andchronicle recent developmentsthat point the way forward, thisis explored in the remainder ofthe report.

As a development choice, largedams often became a focal pointfor the interests of politicians,dominant and centralised govern-ment agencies, international

financing agencies and the dam-buildingindustry. Involvement from civil society variedwith the degree of debate and open politicaldiscourse in a country. However, there hasbeen a generalised failure to recognise affectedpeople and empower them to participate inthe decision-making process.

Once a proposed dam project passed prelim-inary technical and economic feasibilitytests and attracted interest from governmentor external financing agencies and politicalinterests, the momentum behind the projectoften prevailed over further assessments. Inany event project planning and appraisal forlarge dams was confined primarily to techni-cal parameters and the narrow application ofeconomic cost/benefit analyses. Historically,social and environmental impacts were leftoutside the assessment framework and therole of impact assessments in project selec-tion remains marginal even in the 1990s.The influence of vested interests in thedecision-making process and the narrow,technical approach to planning and evalua-

tion have meant that many dams were notbuilt based on an objective assessment andevaluation of the economic, social andenvironmental criteria that apply in today’scontext.

Conflicts over dams have heightened in thelast two decades. This results from dissatis-faction with the social and environmentalimpacts of dams, and their failure to achievetargets for costs and benefits. It also stemsfrom the failure of dam proponents andfinancing agencies to fulfil commitmentsmade, observe statutory regulations andabide by internal guidelines. In some cases,the opportunity for corruption provided bydams as large-scale infrastructure projectsfurther distorted decision-making, planningand implementation. Whereas substantialimprovements in policies, legal require-ments and assessment guidelines haveoccurred, particularly in the 1990s, itappears that business is often conducted asusual when it comes to actual planning anddecision-making. Further, past conflictsremain largely unresolved due to a numberof reasons, including the poor experiencewith appeals, dispute resolution and recoursemechanisms.

The key to improved performance in thefuture lies in screening out undesirable damsprojects as part of a process that considersthe full range of options for water andenergy power services, and responds posi-tively to changing priorities. These effortsmust find ways to ensure that performancein living up to existing institutional arrange-ments governing the planning and projectcycle is improved.

The chapter groups these topics under threeheadings: decision-making, planning andcompliance.

Once a proposed damproject passed

preliminary technicaland economic feasibility

tests and attractedinterest from

government or externalfinancing agencies andpolitical interests, the

momentum behind theproject often prevailed

over furtherassessments.



Decision-making and thePolitical Economy of LargeDamsLarge dams arise from a series of decisionstaken from the beginning of the planningprocess through to the final approval of aproject and financial closure. At each stagedifferent actors are involved, includinggovernment agencies, public or privateutilities, interested parties from the region,financing agencies, consulting and construc-tion companies and equipment suppliers.Affected people and NGOs are increasinglyinvolved as well, often through people’smovements against dams. Each of these groupspromotes its own self-interest throughout theprocess, ranging from profits and politicalpower to property rights and livelihoods. Thissection looks at the interplay of these forces inthe context of rivers, dams and the develop-ment of water and energy resources.

Similar pictures emerge for the industrial-ised and the developing worlds. Planningprocesses are controlled by single-purposegovernment agencies or public utilities andthe decision to build is taken as the outcomeof a fairly limited set of political interactionsat political levels commensurate with thesize and importance of the dam. In the caseof developing countries, the selection ofalternatives for meeting water and electricpower needs was, and is, frequently con-strained by preferential access to interna-tional finance and the pre-existing interna-tional expertise in large dams rather thanalternatives. Recently, restructuring andreform of the energy and water sectors inmany countries – both industrialised anddeveloping – has changed the role of gov-ernment in decision-making and planning,with private investors and corporationstaking both financing and ownership rolesin these projects.

State-led decision-making

Governments were the proponents forpractically all large dams and many largedams were built by government agenciesthemselves.1 Centralised agencies or utilitieshave traditionally managed the water andenergy sector within government. Like mostmajor development projects, decision-makingprocesses around large dams have beencentralised and technocratic in virtually allparts of the world, particularly through the1970s. The exception may be certain largedams built as part of regional developmentprojects where local political interests haveplayed important roles in promoting projects –often in conjunction with their representa-tives in central government.

Indeed, the degree to which decision-making surrounding a dam was politicisedand the level at which the decision wasmade varied tremendously with the project.Large and spectacular dams have often beenseen as symbols of development and nationbuilding, a potent demonstration of man’sability to harness nature’s forces and atangible ‘deliverable’ for politicians, usuallyfunded from the public purse. The WCD CaseStudies demonstrate that for very large damsthe decision to build often was taken by headsof State, whereas smaller facilities weretypically guided through the process by therelevant agencies or utilities (see Box 6.1)

Dam-building in industrialisedcountries

In industrialised countries, alliances be-tween local political interests and powerful,single-interest agencies and utilities respon-sible for water and power developmentdrove planning and decision-making onlarge dams. In the United States, thepolitical desire to settle and develop theland and resources of the western states

Chapter 6


encouraged the construction of large dams.At the same time, however, laws governedthe planning and approval process. Theyrequired agencies and utilities to perform along series of surveys, hold public hearings,and conduct inter-agency reviews, includingcost-benefit analysis. The appropriation offunds ultimately required approval by the

Congress, which further scrutinised theproject plan.2

Outside the United States, the reconstruc-tion of Europe after World War II led to theconstruction of many large dams. TheMarshall Plan ushered in the era of foreignaid with the transfer of $17 billion to helprebuild Europe.3

During the cold war era, centralised, state-driven consolidation of resources throughinterventions such as the building of largedams was the hallmark of communistregimes. Most of the political and economicdecision-making processes for the large damsbuilt in eastern and central Europe weretop-down and technocratic. Besides thecentral government, other stakeholders andthe general public were not in a position toexpress their concerns or represent theirinterests in the decision-making process.4

Dam-building in developingcountries

The success of the Marshall plan in Europeled to great optimism that the key to nation-al development was investment in capitalstock. The International Bank for Recon-struction and Development (IBRD), createdto help finance the reconstruction of war-torn European countries, became a focalpoint for these efforts and, alongside bilater-al development banks, helped export themodel of centralised nation building foreconomic development. Dams fit well withthis model of foreign aid and were often thefirst visible sign of IBRD (later called theWorld Bank) presence in a country.5

Role of foreign assistance6

Both the multilateral and bilateral develop-ment banks played a significant facilitatingrole in getting Asia, Africa and Latin

From the WCD Case Studies, the predominant role of the State can be seenthroughout. In the Glomma and Laagen Basin the Norwegian government wasactive in licensing hydropower projects initially to promote development inisolated river valleys, then to feed power based smelting industries and otherheavy industries in the period after the Second World War. Hydropowerdevelopment was also promoted to support specific districts in periods ofdepression and high unemployment.

Similar government intervention is demonstrated at the Grand Coulee project inthe United States where a presidential decision was made to proceed with theGrand Coulee project in 1932. The project formed part of the federal govern-ment’s campaign to bring the country out of economic depression, provideconstruction jobs to eight thousand people, reclaim land for irrigation andreduce price manipulation by private power companies, thereby making publiclygenerated electricity more widely available at low cost.

The planning, implementation and initial operation of the Kariba project wasdone by the Inter-Territorial Power Commission of the then Central AfricanFederation (the former colonies of Northern and Southern Rhodesia now Zambiaand Zimbabwe) in the 1940s. The priority was to deliver power to the copperindustry owned by multi-national corporations.

On the Orange River in South Africa, the proposal to build a major dam andwater diversions scheme was called for by Prime Minister Hendrik Verwoerdfollowing the Sharpeville massacre in 1960 that undermined confidence in thegovernment and led to outflows of foreign capital. One primary motivation wasto demonstrate national capacity to build major projects and to restoreinternational confidence in the country’s development and investment potential.

Source: WCD Case Studies

Box 6.1 WCD Case Studies: political decisions to build large dams



America started in the dam business. TheWorld Bank began financing large dams in the1950s, committing on average over $1 billionper year to this purpose (Figure 6.1). For theperiod from 1970 to 1985 this amount hadrisen to $2 billion per year. Adding in financeby the Asian, Inter-American, and AfricanDevelopment Banks, as well as bilateralfunding for hydropower, suggests total financ-ing for large dams from these sources of morethan $4 billion annually at the peak of lendingduring 1975-84.

Bilateral and multilateral developmentfinancing agencies have helped financestudies needed for dam construction, andlent money for the construction of thedams themselves. They identified develop-ment goals through strategic sectoralplanning documents, provided resourcesand technological capacity to conductfeasibility studies, and created basin-wideinstitutional frameworks to plan andimplement dams. Although the proportionof investment in dams directly financed bybilaterals and multilaterals was perhaps lessthan 15%, these institutions played a keystrategic role globally in spreading thetechnology, lending legitimacy to emergingdam projects, training future engineers andgovernment agencies, and leading financingarrangements.7

The extent and nature of this influencevaried from country to country and fromregion to region. The India Case Studylocates the orientation of Indian plannersand engineers towards dams as the princi-pal response to water resource develop-ment in the 1950s and 1960s when largenumbers of dams were first built. Thispredated the World Bank’s major involve-ment in India. The Bank began lending inearnest to India in the 1970s at a time whenpolicy reforms removed restrictions on the

ability of individual states to directly accessforeign assistance and provided incentives fordoing so.

Since then World Bank loans to India havedoubled or tripled each decade. By oneestimate loans for irrigation, drainage andflood control are 14% of World Bank loansto India.8 The India Case Study reportsthat, in total, foreign assistance providesabout 13% of public sector outlays in theirrigation sector, with the World BankGroup accounting for almost 80% of thisassistance. Thus, in India the World Bankdid not provide the initial impetus behind

Figure 6.1 Development assistance for large dams, 1950-1999

Source: aSklar and McCully, 1994 eco029, WCD Submission and World Bank,2000; bOECD, 2000a; cIDB, 1999; dLagman, 2000; eAfDB, 1998; fEBRD,1996, 1999, 2000a, 2000b.Notes: Data for bilateral agencies also includes financing by the Commission ofthe European Community and includes only all hydropower investments from1975 to 1997.

25

20

15

10

5

0

US$

Bill

ions

, 199

8 p

rices

1950

-54

IDBc

EBRDf

Bilateralb

AfDBe

World Banka

ADBd

1955

-59

1960

-64

1965

-69

1970

-74

1975

-79

1980

-84

1985

-89

1990

-94

1995

-99

Chapter 6


the tendency to choose dams as the responseto water and energy needs, but ratherprovided continued and increasing externalbacking to the large number of dams whichwere built from the 1970s onwards.

As in the case of India, the WCD ChinaCase Study shows that dam building waswell advanced prior to the entry of foreigndonors. Brazil also follows this pattern.Comparison of statistics on large hydropow-er dams commissioned in Brazil between1950 and 1970 and the finance provided bythe World Bank and the Inter-AmericanDevelopment Bank (IDB) show that justover 10% of the 79 large dams listed in theInternational Commission On Large Dams(ICOLD) database received financialassistance from these donors. However, thefigure rises to over 30% of the 47 dams forthe 1970-1990 period. Foreign assistance,thus, did not drive the selection of dams asan option but did provide significant fi-nance during peak dam-building periods.

The picture differs for smaller countries. InColombia, multilaterals helped fund the firstlarge dam and 40% of the subsequent 50large dams appearing in the ICOLD data-base. Multilaterals have played a particularlystrong role in countries that have not builtmany dams and do not have local planningand construction expertise and capacity. InCosta Rica, which relies on hydropower forroughly 90% of its power generation, theWorld Bank and IDB had directly supportedover half of the installed hydropower capacityby the mid-1990s.9 In Tanzania, bilateralagencies and the World Bank have supportedessentially all the large hydropower dams.10 Inthese smaller countries the role of financingagencies and the firms they employ toundertake preparatory studies, designprojects and build dams can be significant.

Only in the late 1980s and early 1990s hasthis lending activity tailed off in the face ofincreasing public scrutiny and criticism bycivil society (see Figure 6.1). The declinefollowed unfavourable independent reviewsof two high profile projects that weresupported or considered by the World Bank– Sardar Sarovar in India and Arun III inNepal. A number of other factors contribut-ed to the shift away from large dam projects.They include:

■ continued criticism of the pervasive‘approval culture’ of the World Bank andits willingness to promote large infra-structure projects;

■ internal evaluations of the Bank thatdocumented ever-increasing ‘appraisaloptimism’ despite evidence of pooreconomic and financial performance byprojects in the water supply and irriga-tion sectors;

■ failure to meet the Bank’s povertyalleviation goals; and

■ growing recognition of the severity of thesocial and environmental impacts ofdams.11

More recently, a gradual shift towards anincreased role for private sector finance inhydropower and, to a lesser extent, watersupply, have also led the banks to move intoa facilitation role with the emphasis onpublic-private partnerships and risk guaran-tees. Part of the financing has now beentaken over by export credit guaranteeagencies in donor countries that finance andunderwrite risks taken by home-countryengineering firms and equipment suppliersparticipating in projects abroad.

Role of industry and bilateralfunding

Ultimately it is the country governmentthat is responsible for taking the decision to



build a dam. However, governments arenaturally influenced by internationalexpertise and financing opportunities (seeBox 6.2). Once a government is politicallycommitted and construction has begun, thenature of large construction projects makesit extremely hard to change course, even ifthere are cost overruns, unforeseen negativeimpacts, or benefits are less than predicted.The public purse generally carries the risk ofpoor economic performance, and there hashistorically been no consequence or liabilityfor building under-performing dam projects.

For industrialised countries with a history ofdam-building and expertise in relatedequipment, bilateral overseas aid has oftenbecome a vehicle for supporting localindustry by exporting this expertise throughaid programs tied to the purchase of servicesor equipment from the donor country.12

Conflicts of interest have inevitably resultedbetween the financing agency’s interest toprovide contracts for home-country compa-nies and the borrower or grant recipient’sinterest in providing appropriate andaffordable development. In the case ofbilateral agencies these conflicts of interestmay be exacerbated in smaller, poorercountries where the donor plays a morecentral role in financial matters (see Box6.3).

Professional associations such as ICOLD,the International Hydropower Association(IHA) and the International Commissionon Irrigation and Drainage (ICID) have alsoplayed an important role in setting standardswithin their technical disciplines andpromoting professional capacity related tothe building of large dams and their associ-ated infrastructure. These are internationalassociations made up of members fromgovernment and industry from industrialised

and developing countries alike. The associ-ations play an important role in buildingcapacity of member countries by collectingand disseminating technical and otherinformation and holding annual meetings topromote formal and informal professionalexchange.

Decision-making on sharedrivers

The flow of water through States or prov-inces sharing a basin links them inextricablyto a finite and common resource (see Box6.4). Yet water resources and energy plan-ning has frequently been undertaken at thelevel of administrative or political units thatdo not coincide with the watershed. As a

While the WCD Case Study dams built in the United States and Norway reliedexclusively on national capacity, the Case Study dams in developing countriesreveal the involvement of foreign firms in master plans, inventories, feasibilitystudies, design, construction and financing. In the case of Tarbela the WorldBank even co-ordinated the Indus Water Treaty signed between India andPakistan that gave Pakistan the opportunity to build Tarbela.

In Turkey, the comprehensive development of the water resources in CeyhanBasin was outlined first in a 1966 study by a foreign consulting firm financed bythe United States Agency for International Development (USAID). This docu-ment has guided investments in the basin for the last thirty-five years. The USBureau of Reclamation, through USAID, undertook the initial study of the waterresources of the Tocantins Basin in 1964, where Tucuruí was later built. For thePak Mun project in Thailand, French engineering firms conducted the initialfeasibility studies in the 1970’s and early 1980s.

In all, the World Bank provided financing for four of the Case Study dams(Kariba, Tarbela, Aslantas and Pak Mun). Kariba was partially financed by thecopper companies for which much of the power was destined. The decision ofmulti-national aluminium producers to invest in the Carajas region of Amazoniawas subject to the decision to proceed with the Tucurui hydropower complex.Financing for the project came from internal sources and French banks.

A recent NGO report provides details on the role of 12 European companies inthe design, construction and supply of equipment to 84 large dams, many ofthem major dams in developing countries. The report also lists the furtherinvolvement of these companies in technical studies of a larger sample of dams.Many of the projects listed are financed by home-country bilateral agencies,export credit agencies and commercial banks, as well as by the multilateraldevelopment banks. The report documents the billions of dollars that have goneto the European ‘dam building’ industry from projects in developing countries.

Source: WCD Case Studies and Lang et al, 2000

eco041, WCD Submission

Box 6.2 WCD Case Studies and submissions: foreign involvement indam projects

Chapter 6


means of water storage, dams play animportant role in the management of theresource and its allocation to different useswithin and between countries. In thecontext of shared rivers, dams are a technol-ogy that allows an upstream riparian topartially ‘privatise’ the river by storing andusing water and thereby effectively exclud-ing downstream riparians from access to thewater. In the downstream context, whenfaced with dwindling supplies from up-stream, dams provide downstream riparianswith a practical means of replacing lost dryseason flows by storing wet season flows.

Relative power relationships within basinsdetermine to a large extent how individualcountries interact and whether otherriparians are consulted concerning damprojects. A regional power that holds anupstream position is in a better situation toimplement projects without consultation,and this has been the case in Turkey, Indiaand China. In other cases powerful down-stream neighbours whose existing resource

A 1985 Canadian study provided Tanzania with a national energy developmentplan that led to the decision to redevelop the old Pangani dam, raising itsinstalled capacity from 17 MWs to 66 MWs. The Finnish International Develop-ment Agency (FINNIDA) funded the $2.5 million feasibility study in 1989-90,which was carried out by Finnish and Norwegian consultancy firms. Given theclose relationship between the Finnish firm and FINNIDA, the firm not onlywrote the terms of reference for the feasibility study but later was also givencontracts to procure supplies and supervise construction (jointly with itsNorwegian partner). In the event, the feasibility study confirmed that the damwas the best option to meet sector needs and the EIA concluded that noadverse effects existed that would prejudice the project.

As the Finnish, Swedish (SIDA) and Norwegian (NORAD) aid donors planned tofinance the project, SIDA hired a Swedish firm which reviewed and confirmedthe results of the feasibility study. The three Nordic donors subsequentlyapproved grants to Tanzania to cover the costs of the project. While the aid wasnot ‘tied’, no competitive bidding was undertaken for contracts, rather, checkswere made to ensure that prices offered by selected firms were competitive. ANorwegian firm supplied the turbines, a Swedish firm the generators and controlequipment and a number of Finnish firms were involved in the civil works andtransmission lines, including the parent company of the consultancy firm thatundertook the feasibility study.

While the final 1991 project document stated that the hydrological risks to theproject were small, there was sufficient concern over the availability of watersupply to the project to make the Nordic donors insist on a water basinmanagement board as a condition of the funding agreement. This decision hasengendered conflicts between local, national and donor interests. The waterboard was to institute water fees to limit irrigation withdrawals and ensure anadequate supply of water for power generation at Pangani. With work underwayin the early 1990s concern mounted as precipitation in the basin and flows at thesite fell well below the 1981-92 averages. This was compounded by a lack ofinformation on the extent of upstream withdrawals which fed traditionalsmallholder agriculture by the Chagga people on the slopes of Mount Kiliman-jaro, as well as a series of large-scale projects financed by other internationaldonors.

The political repercussions of charging smallholders in order to limit their wateruse so that electricity could be generated for consumption by industry andurban households soon manifested themselves. By 1994 resistance to the boardwas evident in local opposition to the tariffs. As it turns out smallholderirrigation by the Chagga is a well-studied example of a centuries-old traditionalsystem for the management of common property – replete with a local watermanagement ‘board.’ This Council of Furrow Elders is formed by elders of aspecialised clan – the Wakomfongo – that plan and direct the construction offurrows as well as co-ordinate water distribution and maintenance of the furrows.Along with elders of other clans the Council administers the furrow system andresolves any problems that arise.

The potential for negative effects on the food security of traditional farmers as aresult of the tariffs imposed by the official water board was acknowledged infurther studies in 1995 by the original authors of the feasibility study. Yet theplan to transfer political control over water from local to centralised authoritywent ahead, laying the foundation for future struggles between the local peopleand the Tanzanian utility that operates the dam. The water board, which mustmediate in this regard, is constituted by five government representatives andthree representatives from each of the regions traversed by the Pangani river.No provisions were made for representation of the Chagga or other traditionalwater users on this board. The result is that Nordic development assistance hadthe paradoxical effect of undermining local resource management.

Source: Mung’ong’o, 1997; Usher, 1997a, eco026, WCD Submission

Box 6.3 Nordic influence in the Pangani Falls Redevelopment Project,Tanzania

As shown in Chapter 1, a significant proportion of theworld’s rivers cross international boundaries. Inaddition to these international basins, there are manyothers that cross provincial or state boundaries withina country where these states have a mandate tomanage water resources. Examples include India,Australia and the United States.

Co-operation between riparian states is not new.Since AD 805 approximately 3 600 water relatedtreaties were signed between nations. Although themajority of these relate to navigation and nationalboundaries, approximately 300 are non-navigationaland cover issues related to water quantity, waterquality and hydropower. Of these, many are limited torelatively narrow aspects and do not extend principlesfor integrated resource management throughout thebasin. As pressure on resource use intensifies, anincrease in conflicts over water may be expected andgreater co-operation will be required.

Source: WCD Thematic Review V.3 River Basins

Box 6.4 Co-operation in shared river basins



base may be affected by water resourcedevelopment upstream may hold the devel-opment plans of upstream States in check.This has been the case historically, forexample, with Egypt and Ethiopia.13

In many cases, one of the key obstacles toreaching international agreements lay inlooking at water as a finite commodity andtrying to allocate it on a proportional basisto different uses in different countries. Incases of water scarcity, this approach oftendoes not give the flexibility needed to meetthe multiple claims along the river course.In these circumstances it has proved helpfulto extend sharing agreements to include thebenefits generated by the water. The divi-sion of benefits under the 1968 ColumbiaTreaty between Canada and the UnitedStates on the Columbia River reported bythe Grand Coulee Case Study is a case inpoint.

Arrangements for water sharing at provin-cial level are facilitated by the ability of thefederal government to impose overarchingregulatory frameworks, financial incentivesand sanctions to ensure that provincescollaborate. A similar supra-national body isoften lacking between nations and the mosttransparent decision-making on internation-al rivers therefore lies within the frameworksof the many international protocols andagreements that clearly lay out the planningstages at which information should beexchanged and consultation occur. Efforts toestablish accepted international principleshave been negotiated through the UN forover 25 years, leading eventually to the UNConvention on the Law of Non-NavigableUse of International Watercourses. Howeverit looks unlikely that the Convention willenter into force due to the reluctance ofStates to ratify it.

This situation leaves a number of keyinternational rivers lacking a basin-wideagreement that defines a process for estab-lishing equitable water use and thereforewith no framework for good faith negotia-tions with other riparian States. In theabsence of such agreements some Stateshave taken unilateral action, continuing tobuild dams without adequate informationexchange or consideration for impactselsewhere in the basin. While this mayconstitute disregard for emerging interna-tional practice and the standards governingpeaceful relations between riparians, it alsoreflects the political economy of the up-stream-downstream relationship. As long asthe political and economic costs of engagingin such behaviour are small relative to theeconomic benefits gained there is littleincentive to engage in collective discussion.Clearly, as the demand for water rises andbecomes ever more scarce, dams built onthese international rivers are likely toincreasingly affect regional relations.

Planning and EvaluationIn general project planning and evaluationfor large dams has been confined primarilyto technical parameters and the narrowapplication of economic cost-benefit analy-ses. Decisions of this nature were typicallytaken with little participation or transparen-cy. In particular, those to be negativelyaffected by a dam were (and are) rarelyinvolved in this process.

The primary concern with planning process-es is that once a proposed dam project hassurvived preliminary technical and econom-ic feasibility tests and attracted interest fromfinancing agencies and political interests,the momentum behind the project and theneed to meet the expectations raised often

Chapter 6


prevail over further assess-ments. Environmental andsocial concerns are oftenignored and the role of impactassessments in selecting op-tions remains marginal. Onceoperations have been initiatedthere is a generalised lack ofeffort to monitor, assess and

respond to operational concerns and chang-ing values surrounding dams. Again, thepolitical economy of large dams and thedominant power of a small number of actorsoften drive these planning and evaluationprocesses. In some cases, such as Norway,Quebec, Brazil or Nepal, a high level politicalchoice made in favour of hydropower hasdriven subsequent choice of technology (largedams) and project development.

Participation and transparency

The WCD Knowledge Base shows that themost unsatisfactory social outcomes of past

dam projects are linked to cases whereaffected people played no role in the plan-ning process, or even in selecting the placeor terms of their resettlement. In addition,governments have frequently committedthemselves unquestioningly to large infra-structure projects, whose merits have notbeen tested by public scrutiny, withouthearing alternative views on the choice ofdevelopment objectives for a village, regionor country. As pointed out in Chapter 4, theinvolvement of displaced people has theadvantage of enabling them to contribute tothe benefit stream of a project and thus toachieve different outcomes.

Participation and transparency in decision-making processes involving large dams –again like most development projects – wasneither open nor inclusive through the1980s. Of the 34 dams in the Cross-CheckSurvey that involved resettlement of dis-placed people, only 7 required participationas part of the decision-making process.While there has been a growing emphasison transparency and participation in deci-sion-making involving large dams, especiallyin the 1990s, actual change in practiceremains slow.

Additional results from the Cross-CheckSurvey illustrate that while participation hasincreasingly been required in the planningdocuments of large dams and for variousactivities, around 50% of projects still donot plan for the public participation ofaffected people. The trend for requirementsfor transparency through informationdisclosure for large dam projects is similar tothat for public participation (see Figure 6.2).

The Commission’s review identified thefollowing recurring concerns and criticismsabout how the public, and particularlyaffected people, have been involved:14

A number of keyinternational rivers lack a

basin-wide agreementthat defines a process for

establishing equitablewater use between

riparian States.

70

60

50

40

30

20

10

0

% of dams


Year from start of commercial operation

(by decade)

1950

1950

s

1960

s

1970

s

1980

s19

90

Information disclosure

Participation of affected people

Figure 6.2 Trends in provisions for participation and informationdisclosure




■ insufficient time, resources and informa-tion have been made available for publicconsultations;

■ the spectrum of participants was usuallyvery narrow, ignoring rural communities,indigenous groups and women, andaffected people’s organisations whoseeffective participation may be constrainedboth culturally and linguistically;

■ where opportunities for participation ofaffected peoples and NGOs representingaffected groups have been provided, theyoften occur late in the process and arelimited in scope. Moreover wheresubstantial differences arise, thoseseeking to modify plans and decisionsoften must resort to legal or other actionoutside the normal planning process;

■ there was a generalised failure to involveaffected people in the design and imple-mentation of project monitoring andfollow-up; and

■ the government agency staff leading thediscussions had often been trained onlyin one sector (such as engineering) andthis reduced the scope for promoting amulti-disciplinary approach.

From the experiences recorded in the WCDKnowledge Base there are recent examplesthat show where participation has reducedconflict and made outcomes more publiclyacceptable (see Box 6.5 and Box 6.6). Thesecontrast starkly with those where projectshave been pushed through by central authori-ties without consultation resulting in drawn-out and acrimonious conflicts over compensa-tion, resettlement and benefit sharing.

The failure to provide a transparent processthat includes effective participation hasprevented affected people from playing anactive role in debating the project and itsalternatives. As a result they are unable to

In the early 1980s, nine multi-purpose dams had already been built in theAustrian section of the Danube River. Two more dams, Freudenau in Vienna, andHainburg downstream, were planned on the main river and some low-headprojects envisaged on the Mur river.

The decision to build the Hainburg hydropower and navigation dam was madeexplicit in 1983. Public participation was restricted to holders of property andwater rights to be directly affected by the planned intervention, thus excludingenvironmental activist groups and other civil society organisations. With strongsupport from the general public, these civil society groups occupied the site ofthe project, and ultimately managed to stop the project. Subsequently the sitewas protected as a National Park.

Turning to the Freudenau hydropower dam, from 1986 to 1988, the provincialgovernment of Vienna and the power utility promoted ideas and proposals formitigating some of the potential impacts of the project (during construction andafter completion). The public responded with great interest and as a resultselected proposals and the detailed project plans were made fully accessible tothe public. Information meetings on these documents were attended by morethan 15 000 people. In 1991 a referendum was organised around the final projectproposal. About 44% of the entitled Vienna inhabitants participated, and 75%supported the project.

The Freudenau dam was completed in 1997, however the project is not cost-effective as a consequence of the design modifications required to gain publicsupport. The contrary was the case for the Fisching and Friesach projects on theMur river – where following occupation of the dam site by protesters, joint-planning sessions with stakeholders led to ‘significant improvements inenvironmental friendliness,’ with associated cost savings.

Source: Hainburg and Freudenau damsin Nachtnebel, 2000, p109-111;

Zinke, 1999, p6-9;Fisching and Friesach dams

in Brunold and Kratochwill, 1999, p176-17

Box 6.6 Public participation and project acceptance: three scenariosfrom Austria

The 1 240 MW Salto Caixas hydropower project in Brazil was completed in 1999and was the fifth to be built on the Iguacu River. It was the first hydropowerproject in Brazil planned under the environmental regulations stipulated in the1988 Constitution. The measures taken to comply with the new environmentallegislation at Salto Caixas amounted to about one-quarter of the total projectcost of approximately $1 billion. However, the EIA was only undertaken after theproject was approved and land had been acquired, putting political pressure onthe process. This resulted in an EIA study of ‘poor quality.’

On the social side, public pressure, based in part on unsatisfactory resettlementoutcomes for previous dams, led to the establishment of a ‘resettlementcommittee’. This committee created a forum to address conflicts and meetrequests of the affected people. A negotiation process involved the committeeof affected people in developing an acceptable relocation programme fordisplaced people. Views of local people were also incorporated into themonitoring stages of the project.

Source: dos Santos, 1999, p153–154;Verocai, 1999, Contributing Paper for WCD Thematic Review V.2

Environmental and Social Assessment, p7

Box 6.5 Even late participation leads to a consensus resettlementplan: Salto Caixas dam, Brazil

Chapter 6


assist project planners to provide a develop-ment response that meets their needs andallows them to add to the benefits to bederived from the project. Without doubt thishas magnified the negative impacts of suchprojects and alienated affected communitiesleading to active opposition to projects andconsiderable uncertainty for project propo-nents. As observed in previous chapters of thisreport, the outcome is often not only poorperformance of the social components ofprojects but also schedule delays, cost overrunsand poor financial and economic performance.

Options assessment

The range, scale and type of options consid-ered in development plans in the past werelimited by the boundaries of the planning

and decision-making approaches of the day.Many sectoral planning studies from whichprojects emerged were narrow technical andeconomic studies, aimed at least-cost supplysolutions for providing a single service suchas irrigation water or electric power. Whendams were contrasted with alternatives, theywere typically only compared to otherpotential dam projects or, in the case ofhydropower, with alternative large-scalethermal power generation options (see Table6.1). In developing countries the pressure ondevelopment aid agencies to move largeamounts of capital – a considerable portionof it as tied aid – argued for large-scalesolutions such as large dams. Administrativeefficiency is a related factor leading to apreference for financing large projects.

tnemssessasnoitpo:seidutSesaCDCW1.6elbaT

tcejorP gninnalpyranimilerpnideredisnocsevitanretlA htiwnosirapmoClasiarppatasevitanretla

noitcelesrofdesusretemarapdnaairetirC

satnalsA deredisnocsawnoitagirrirofecruosrevirfonurgnitsixE.tnempolevederutlucirgarediwtroppusottneiciffusni

.deredisnocnisabehtnisnoitacolmadevitanretlA

rewopordyhehTderapmocsawtnenopmoc

lamrehtahtiw.evitanretla

.ylppusrewoprofsisylanatsoc-tsaeL

eeluoCdnarG .erutlucirgadetagirrihguorhttnempolevedlanoigersawevitcejbodeergaehTsmetsysdepmupdnaytivargotdetalerdoirepraey-51arevoderedisnocsevitanretlA

noitpodepmupehtdednemmocertropeRreltuB2391ehT.retawfoyreviledehtrof.madehtmorfseuneverrewopordyhybyltnanimoderpdecnanif

sisylanacimonocE

dnaammolGnisaBnegaaL

ylraenidehsilbatserewopordyhrofyciloptnemnrevoGtub,s0891ylraeniderevocsidsagdnaliO.s0091

.yltnecerlitnuecalpnideniameryciloprewopordyh

rewopordyhevitanretlA.deredisnocsetis

laicosdnalatnemnorivnednatsoctsaeLdnanoitcetorps0891ehtnisetisfogniknar

.snalptnempoleved

abiraK nasaderedisnocaisedohRhtroNniegroGeufaKhtiwetabeddetcartorpretfadetcejertubevitanretla

.aisedohRnrehtuoS

rewoplamrehtfotesAsevitanretla

ecneulfnidnarewoprofsisylanatsoc-tsaeL.tseretnilacitilops’aisedohRhtuoSfo

reviRegnarO rofylppusretawelbailereromeveihcaotyawylnoehtsaneessawegarotsriovreseRlamrehteroferehttifenebyradnocesasawrewopordyH.noitagirridnuorraey

foolKrednaVehtgnisiarotdelseidutstneuqesbuS.deredisnoctonerewsevitanretla.tuptuoesaercniotmad

lacitiloP

nuMkaP A.deredisnocerehwesledetacolsevitanretlalamrehTdnatnemeltteseroteuddetcejersawnoitpomadrehgih

devorppatcejorpdesiverehT.snrecnoclatnemnorivne.stifenebnoitagirridedulcnitenibaCehtyb

lamrehtevitanretlA.)enibrutsag(rewop

metsysrewopdnasisylanatsoctsaeL.seiduts

alebraT rofnoitpoylnoehtderedisnocsawegarotslanoitiddA.aidnIotdetacollasrevirnretsaeehtforetawgnicalper

evitanretlaforebmunAgnidulcnisetissmad

alairaGdnahgabalaK

denibmocsetisehtfonosirapmoccimonocEregralrofecnereferptnemnrevoGhtiwalebraTfolaitnetoprewopdnaegarots

iurucuT ehtnisaeranabruotrewopylppusotdnarotceslacigrullatem-gninimehtfotnempolevedrofsevitcejbootdednopseriurucuTtnemssessasnoitpoticilpxeonsawerehT.noigeRnozamA




Projections of demand

The needs for power, food and water aretypically identified through sectoral demandforecasts, which have frequently overstatedsectoral needs. The WCD Glomma andLaagen Case Study reports that in Norwaygross power consumption in 1990 was 75%of that forecast in 1970. In Slovakia, watersupply needs as assessed in 1985 wereexpected to rise to 408 and 465 litres percapita per day (lcd) in 1990 and 2000respectively. While demand initially roseabove projections (433 in 1990) it has sincereversed course and had fallen to 294 lcd by1997.15

Failure to adequately account for the rate ofdevelopment of new supply and the effect ofpolicy reform, when it is outside the limitsof the planning exercise, may also lead towhat effectively amounts to overstateddemand. In the Slovakia case cited above, adoubling in the price of water and thedevelopment of alternative sources of supplyby industry contributed to reducing actualdemand. Projections for demand (andhence prices) for crops and other agricultur-al products that are widely traded can besubject to market boom and bust cycles whena series of independent decisions in differentcountries or provinces lead to over-produc-tion relative to demand. As documented inChapter 2 the prices for agricultural com-modities have fallen over time, instead ofremaining constant or rising as assumed inmany projections for irrigation projects. Thesame market information, technical assist-ance packages or consultants frequentlyinfluence these planning exercises, thus,while difficult to foresee, such over-esti-mates are not inevitable.

Overstating future demand has led to aperceived need for a large incrementalresponse to meet rapidly growing needs. In

many circumstances this has militatedagainst a gradual approach of adoptingsmaller, non-structural options and haspushed decision-makers into adopting large-scale dam projects because they seem to bethe only adequate response to the large gapbetween existing supply and forecast de-mand. A further complication is the long-lead time of large dam projects, which maytake 10 years or more from initial develop-ment of a project idea to the commissioningof the structure. Changes in market condi-tions during construction have left propo-nents stranded with costs or projects thatare not financially or economically viable.Of principal concern is that it is frequentlythe agencies that are responsible for buildingsupply infrastructure that are also chargedwith undertaking demand forecasts, leadingto a potential conflict of interest.

Available options

As shown in Chapter 5 there is currently awide range of alternatives available forfulfilling water and energy needs, althoughthe actual number available will depend onlocal circumstances. The number of alterna-tives has, however, not always been so large.For instance, alternatives to hydropowerprior to the 1950s included conventionalfossil fuel and biomass generation options.Nuclear power arrived in the 1960s and inthe past decade the range and scale ofrenewable electricity supply options hasdramatically expanded. Alternatives formunicipal and industrial water supply havetended to be site specific and depend onwhether there are groundwater aquifers,natural lakes and rivers to draw from withsufficient quantity and quality of water. Onthe other hand, many of the irrigation watersupply and flood management options thatare being considered today have beenavailable for a long time. The principalchange here is a more receptive policy

Chapter 6


context and the increasing cost of develop-ing new water supplies.

Demand-side management options (DSM)are a more recent phenomenon. Efficiencyand conservation became concepts in policyand planning in the 1970s and 1980s, butserious attention to demand managementprogrammes has tended to depend on aperception of crisis. The oil price shocks inthe early 1970s focused attention on DSMin the electricity sector in many westerncountries. Water scarcity and the threat ofwater shortages is a driving force for moreefficient water use in many countries, butthe response has not been universallytranslated into concrete action in fosteringwater-efficient practices.

Obstacles to consideration ofoptions

Political economy or intellectual barriersoften pre-determined what options wereconsidered in a given context. Politicaleconomy barriers include efforts made bygroups, primarily those holding economiccontrol and political influence, to protecttheir own interests and to impede similarefforts by other stakeholders. In practice,these barriers were immensely varied andwide-ranging. They included soft and subtleactions such as withholding informationnecessary for making informed decisionsfrom other stakeholders and from thedecision-makers. At the other end of thespectrum there have been overt and evenviolent measures such as use of State andpolice power to protect favoured options.

With few exceptions, an inclusive institu-tional and policy structure capable ofdealing with a spectrum of options has beenslow to emerge in developing countries.Small-scale infrastructure alternatives oftenhave not received integrated planningsupport, impeding their ability to emerge as

competitive solutions. Interests promotingnon-structural alternatives have rarelyoffered an adequate political counterbalanceto interests promoting a dam option. Inmany cases the weight given to the infra-structure option by the key actors obstructedproper consideration of other viable alterna-tives. As a result, such options continue tobe viewed as secondary to large projects.China provides an example of a country thathas mixed both the small- and the large-scale.It has the world’s largest programme for thedevelopment of small-scale rural and appropri-ate technology, while at the same time it hasbuilt half the world’s large dams.

The hindsight provided by Chapters 2, 3and 4, however, does suggest that in caseswhere dams have failed to deliver or led tolarge negative social and environmentalimpacts, a more comprehensive assessmentof options may have been warranted.Whether failures to adequately assess alloptions implicitly lead to the selection of adam over other equally attractive or evensuperior options is difficult, if not impossible,to answer. Certainly, the options currentlyavailable (as described in Chapter 5) reflectnot only continued technological develop-ment over the last 50 years, but also are aproduct of more recent efforts to find locallyappropriate, small-scale solutions that havebenign social and environmental impacts.Thus, in many cases alternatives may not havebeen available previously and may haveappeared more expensive given the methodol-ogies employed at the time, or were excludeddue to the influence of vested interests.

Parameters for projectappraisal16

Cost-benefit analysis (CBA) emergedbetween the 1950s and 1970s as the domi-nant economic tool supporting decision-making on dam projects. Initially it was



limited to a number of parameters, most ofthem internal to the dam owner and rela-tively easy to assign values to. Efforts in thelast two decades to expand the scope of CBAto cover social and environmental issues haverarely led to comprehensive social and envi-ronmental valuation, and have usually beenlimited to incorporating the costs of resettle-ment and environmental mitigation.

Review of multilateral bank appraisals andthe performance of CBA more generallyleads to the following conclusions on theadequacy of CBA as applied to the appraisalof large dam projects:

■ projections of project costs are systemati-cally understated;

■ social and environmental impacts arenot valued explicitly or are only indirect-ly accounted for through mitigation orresettlement budgets;

■ difficulty in predicting inter-annualvolatility of hydrological flows, growth indemand and final design capacity (hydro-power, irrigation and other benefits);

■ difficulty in predicting market conditionsand farmer behaviour over time (irriga-tion benefits);

■ employing social discount rates that aretoo high;

■ sensitivity and risk analysis is inade-quate; and

■ the effect of uncertainty and irreversibili-ty of investment is ignored.

In other words, the historical and actualpractice of dam project appraisal oftenviolates the conditions under which itcould, in theory, provide a reliable measureof the change in economic welfare producedby a dam project. It is worth emphasisingthat it is not a foregone conclusion that thenet effect of fixing all of these problems

would be to lower the economic profitabilityof dams. A number of the weaknesses ofCBA may lead to understatements of thenet project benefits. At the same time, it isclear that quite a number of the weaknessescan have important impacts in terms oflowering net project benefits. Improvedapplication of CBA would assist in identifyingprojects that are not economically viable.

Over reliance on CBA and the implicitpursuit of economic welfare maximisationalso handicap decision-making where damshave other (or additional) objectives as:

■ CBA does not examine wider economicimpacts – such as economic multiplierimpacts; and

■ CBA does not explicitly identify whogains and who loses from a project.

Although CBA is typically a prerequisite tothe analysis of macroeconomic and regionalimpacts, as well as to distributional analysis,it is not designed to examine the potentialof a project to achieve objectives in theseareas. Given the continued ‘partial’ abilityof CBA to capture even the extent to whichefficiency objectives are achieved, and giventhat equity, macroeconomic and purely non-economic objectives are often integralobjectives of water resource developmentprojects, CBA alone is not a sufficient basisfor the evaluation of large dam projects.

Influences from the larger political economyalso filter through into the process ofundertaking CBA. In some cases, earlypolitical or institutional commitment to aproject became overriding factors, leadingsubsequent economic analyses to justify adecision that had in fact already been taken.

Decisions made to build dams solely on thebasis of such an analysis are questionable

Chapter 6


given the failure to undertakeoptions assessment and toinclude external impacts,particularly social and envi-ronmental costs. An alterna-tive approach to a decisionsupport system based on CBAis to use a method thatrecognises that projects oftenhave multiple objectives and

not simply economic welfare maximisation.Experience to date with these multi-criteriaapproaches suggest that while economiccriteria remain important, these decisionframeworks have the benefit of allowingdisaggregated information on social andenvironmental impacts to enter directly intothe decision analysis. Such decision supportsystems appear particularly appropriate anduseful in the case of large dams whenimplemented within a participatory, trans-parent multi-stakeholder approach.

Addressing social andenvironmental impacts17

Social and environmental issues havehistorically been among the least addressedconcerns in dam-related decision-making.The Commission has focussed on thesebecause they are two of the key issues thatdetermine whether a dam proves to be aneffective development project that enjoysgeneral acceptance by the public. Theenvironmental risks associated with largedam projects have not been generallyincorporated as key factors in the decision-making process. Enforcement of existingregulations is often weak, initial assessmenthas not been comprehensive and it hasfrequently been incorrectly assumed thatimpacts could be effectively mitigated (seeChapter 3). Generally, monitoring ofimpacts and assessments of the effectivenessof environmental mitigation measures havebeen absent.

Similarly, the adverse social implications oflarge dam projects have rarely been a factorin the initial assessment and therefore havenot generally influenced the decision-making process to reach a least social costalternative. The experiences of affectedpeople around the world as reviewed inChapter 4 confirm the extent to whichimpacts remain inadequately assessed andefforts at mitigation, development andresettlement unsatisfactory.

Following the United Nations Conferenceon the Human Environment held in Stock-holm in 1972, environmental agencies andministries were formed at a rapid rate withapproximately 60 being created by 1988 andat least another 40 by 1992. The WorldBank adopted its first dam-related policy in1977 (on dam safety). During the 1980s theBank developed policies and guidelines thatfocused on the social and environmentaldimensions of dams and water resources.

Environmental Impact Assessment (EIA)was adopted and formalised in many coun-tries during the 1980s, although manydeveloping countries only approved EIAlegislation in the 1990s. EIA has becomethe major tool for addressing social andenvironmental impacts and the Commissionhas reviewed an extensive literature on thissubject as well as hearing directly from thoseaffected through the regional consultations.The WCD Knowledge Base demonstratesthat EIA consists mostly of measures tocompensate or mitigate the planned impactsand render them acceptable when thedecision to proceed has already been taken.This is reflected in the tendency for EIAs inthe 1990s to focus increasingly on mitiga-tion plans. Added to this is the fragility ofnewly established environment ministriesthat may be unable to ensure compliancewith many of the plans or clearance condi-



tions.18 There are well-documented cases,even in the 1990s, of decisions to proceedwith financing or construction before aneffective EIA is completed (see Box 6.7).

Political pressures and tight schedules are asrelevant today as in earlier decades and EIAresults often have no significant influenceon the choice of a dam as the preferredoption. The EIA process is also not wellsuited to this purpose as it was meant solelyfor identifying impacts and associatedmitigation measures rather than as a tool forincluding environmental and social consid-erations in the final project choice anddesign. Many governments and financinginstitutions have adopted EIA in the lasttwo decades, however the quality of assess-ments and their ability to genuinely influ-ence outcomes is still under-developed.Most dam proponents see EIA as an admin-istrative hurdle to be cleared, or a require-ment to secure funding. This means that ahuge political, technical and financialinvestment in the project has often alreadybeen made before the EIA is launched. Ifimpacts are severe, it is often too late tochange design, and project cancellation mayinvolve loss of face and financial loss.Further, EIA operates under considerableconstraints due to the political and adminis-trative pressures imposed by project sched-ules as it is seen as ‘delaying’ the project.EIAs are also often done with inadequatebaseline data on demographic trends, socio-cultural systems and ecosystem functioning.This leads to unsatisfactory outcomes.

As an impact management tool, EIA hasevolved towards a tool for also setting up anongoing environmental management systemor programme when construction begins,involving appropriate experts, ministriesand field activities. The transition from a

planning mode, based on voluminousassessments and reports, to an implementa-tion mode during project constructioncreates severe institutional and humanresource challenges and in many cases themeasures are either not implemented orhave fallen short of the efficacy envisaged inthe planning documents. The reality is thatdams create huge management challengesfor the implementing ministries and agen-cies. Where institutional capacity in theenvironmental area is weak the accompany-ing measures needed for sustainable out-comes often prove difficult to manage,particularly when compared with thephysical act of designing and building thedam. This in turn may lead to public dissat-isfaction with dams when affected peopleperceive that promises have not been kept.

Operation, monitoring anddecommissioning

After large dams are commissioned there area number of management and operationalissues that require technical studies andinvolve either decisions at the managementlevel or decision processes that are public in

Even with improved environmental and social guidelines EIA still frequently failsto influence decision-making. The Theun Hinboun project in Laos was initiatedin the early 1990s. The initial EIA financed by NORAD concluded that the damwould have minimal adverse impacts and significant benefits. Most of those whoreviewed the document disputed these findings and NORAD undertooksupplementary studies. These were completed one year after constructionbegan, so they had no impact on the decision making process or the design ofthe dam.

In the WCD case studies, an EIA was conducted only for Pak Mun at theplanning stage as it was a World Bank requirement. However the EIA was doneten years before the final project was approved – and examined a differentproject design for a different location than the one finally approved. Further, theEIA was never revised or updated. EIA’s were only required in Thailand from1992, one year after Pak Mun was approved by the Thai Government.

Source: Theun Hinboun dam in Norpower, 1993, p1-7 as cited in Usher andRyder, 1997 eco026, p80-81, WCD Submission; WCD Pak Mun Case Study

Box 6.7 Environmental Impact Analysis (EIA): too little, too late

Chapter 6


nature. These are required for the followingreasons:

■ to support routine day-to-day operationssuch as reservoir operations and releases;

■ to change operations to conform to newregulations that are introduced such aseconomic, technical, environmental orsocial regulation on dam safety, opera-tion of reservoirs in flood events orchanges to environmental flow require-ments;

■ to change operations when a new dam isintroduced in the river basin that wouldimpact on the operating rules of theexisting dam;

■ to adapt the operation to changing needsin the services provided by a dam overtime, particularly when the project ismulti-purpose, for example a change inpower markets that increases the value ofpeaking power generation or a shift torecreation priorities in controllingreservoir water levels;

■ for renovation, upgrading or expansionof the existing facilities; and

■ for relicensing processes in some coun-tries, or for decommissioning.

One of the most disturbing findings ofChapter 2 was the lack of monitoring of theimpacts of dams and the complete failure toconduct proper ex-post evaluations ofperformance and impacts. That such largeinvestments have rarely been evaluatedonce they have been in operation for asignificant period suggests little obligationon the part of powerful centralised agenciesand donors to account for the costs andbenefits incurred. Perhaps more critically itsignals a failure to actively engage in learn-ing from experience in both the adaptivemanagement of existing facilities and in thedesign and appraisal of new dams. The

WCD Case Studies suggest that provisionsfor intensive monitoring of physical, socialand environmental effects of projects wereoften weak or entirely absent. Wheremonitoring was present, it was often restrict-ed to hydrology and engineering parametersrelated solely to the physical integrity of thedam structure.

The operation of large dams is subject tomany unforeseen and unforeseeable influ-ences over time that transform and redistrib-ute benefits and impacts. Patterns for therelease of water from reservoirs will normallychange over time in response to demograph-ic and land use changes in the river basin,shifts in water use priorities, as well aschanges in the agricultural economy and themarkets for electricity. Physical changes inriver morphology or reservoir sedimentationas well as changes in the value that societyplaces on ecological and social impacts ofdams will influence how the dam is operatedat different periods of time over its life.

As shown in Chapter 2, there are goodpractice examples of adaptive managementto meet this changing context, drawing onsophisticated decision-support and forecast-ing software and in some cases accommodat-ing stakeholder participation. Many devel-oping countries that continue to focus onbuilding rather than optimising operationshave not yet adopted tools and policies foradaptive management and optimisation.

What happens to dams at the end of theirlives? Dam decommissioning may be neces-sary due to safety concerns, dam owners’concerns about lower profits, or concernsabout social and environmental impacts.Decommissioning can mean actions rangingfrom stopping electricity production to damremoval and river restoration. Severalhundred dams have been deliberately



removed, mostly in the United States, andmost of them small. Provision is not alwaysmade in advance for who should pay for theremoval or for safety or other improvementmeasures. As reviewed in Chapter 2, risingoperations and maintenance costs may alsoraise questions regarding the maintenanceand safety of large dams. At present, decom-missioning costs are difficult to predict dueto the uncertainty surrounding the variousparameters affecting the costs and thelimited amount of practical experience withdecomissioning. One proposal is to ensurethat decommissioning funds are set aside atthe time of dam commissioning or duringthe project’s license period. Such decommis-sioning funds are accepted practice fornuclear power plants in countries such asthe United States. Decision-makers in thedeveloped world are increasingly looking athow best to handle the end of the dam lifecycle. In contrast many other countries donot yet have firm licensing periods for theirdams (see Box 6.8).

Compliance19

Dam projects are expected to comply withthe legal framework and guidelines of thecountry and the organisations involved infinancing and constructing the dam. Whereenvironmental and social problems haveoccurred in the WCD Knowledge Base, theprinciple cause is the lack of legal require-ments for particular standards at the outsetor a lack of appropriate recourse mecha-nisms to adequately reflect people’s rights inthe face of a powerful national decision.This section shows that regulatory frame-works are often weak, and the necessaryprovisions are not made in planning docu-ments. Even when they are present, govern-ments and donors alike ignore them all toofrequently.

Reasons for this include:

■ incompleteness, incoherence and ambi-guity of national legal and regulatoryframeworks;

■ difficulties of accurately defining thespecification of social and environmentalrequirements and integration of thesecomponents into the implementationagreements and schedules of projects;

■ lack of transparency and accountability,frequently with opportunities for corrup-tion at key points in the decision-makingprocess;

■ lack of meaningful participation at keypoints in the decision-making process

■ low levels of internal and externalmonitoring that reduce feedback intodecision-making;

■ weak or non-existent legal recourse andappeals mechanisms to an independentjudiciary, particularly for negativelyaffected and vulnerable groups; and

There is considerable variation in the licensing procedures for dams. In somecountries dam sponsors must obtain only one licence. In other countries thedam sponsors must obtain a licence for each phase in the planning and projectcycle. For example in Hungary a dam project sponsor must first seek approval ofthe EIA, then obtain a permit to complete the activities required to prepare theproject for construction. Two further licenses are required for construction andoperation. Some countries exempt government operators and only requirelicences for private operators. Licensing procedures are often restricted tohydropower dams, with irrigation dams largely exempt from formal licensing.

There is considerable variation in the term of dam operating licences. In Spainlicences are granted for 70 years, in Norway 60 years and in the USA for 30–50years. In other cases dam licences are granted for short renewable periods oftime. For example in Hungary and Vietnam licences can be granted forunspecified periods of time but they are subject to regular inspection andreview. Where dams are built and operated by the private sector the duration ofthe licence period will need to reflect a reasonable payback period, typically setat 30 years in build, operate and transfer (BOT) agreements. Reviews conductedwithin the licence period have the advantage of facilitating the monitoring ofoperations and providing opportunities for adapting operations against thebackground of changing societal values and expectations. Contemporaryconcepts of adaptive management, transparency and accountability suggestthat there should be some scope for regular review, such as every five to tenyears.

Source: WCD Thematic Review V.4 Regulation

Box 6.8 Licensing processes and duration

Chapter 6


■ lack of human, financial and organisa-tional capacity.

National legal frameworks andpolicy provisions

There were few policy, legal and regulatoryframeworks governing large dam buildingbefore the 1970s, particularly for social andenvironmental issues. However manycountries updated their policy and regulato-ry frameworks in the 1980s and 1990s togive a stronger emphasis to environmentaland social concerns, public participation,efficiency and cost-recovery. There is now abroad body of regulation potentially orexplicitly applicable to large dams at theinternational and national levels, referringto both the public and private sectors.

Existing regulations in most countries tendto focus on project appraisal and implemen-tation with insufficient focus on optionsassessment planning in the early stages ofthe decision-making process where funda-mental choices are made. Few requireregular assessments and evaluation of

performance that could feed back to betterinform decision-making based on pastexperience. Nor do they often providerecourse for those who may have beenharmed by a particular project.

In many cases it has only been strongconcerted civil society movements thathave generated sufficient momentum toensure that constructive negotiations occur,and dam projects are not imposed ondisplaced communities without consulta-tion.

The Cross-Check Survey demonstrates that,since the 1950s, a growing number ofprojects have required dam safety, economiccost-benefit analyses and financial plans(see Figure 6.3). But economic appraisaltechniques such as risk and distributionalanalysis were still mandated for only 20% oflarge dam projects even in the 1990s. Sensitiv-ity analysis is more common and has becomestandard for donor-financed projects. Damsafety is a key issue for the world’s ageing damsand many national bodies have taken up thechallenge, assisted by the engineering net-

works of ICOLD.

Even requirements for large damprojects in the environmentalfield are far from universalalthough they are increasinglyrequired. EIA is recorded for lessthan 40% of dams commissionedin the 1990s (see Figure 6.4).Strategic environmental assess-ments and baseline surveys occurat similar levels.

Corruption

Corruption is a world-widephenomenon that affects bothpoor and rich countries. It may

100

80

60

40

20

0

% o

f dam

s


Year from start of commercial operation (by decade)

Cost benefit analysis

Financial analysis

Distribution analysis

Risk analysis

Sensitivity analysis

before

1950

1950

s

after 1

990

1960

s19

70s

1980

s

Figure 6.3 Trends in the implementation of economic and financial analyses




In early 2000 the Chinese government released information that corrupt officialshad embezzled $60 million (500 million yuan) from resettlement funds for theThree Gorges dam project. An official was sentenced to death for embezzlingalmost $1.5 million from the project.

In Lesotho a trial started in June 2000 against major international corporationsinvolved in construction on the Lesotho Highlands Water Project (LHWP).Companies from France, Sweden, Germany, the United Kingdom and Canadahave been accused of paying bribes. If the accused companies are convicted,they face debarment from future projects with the European Union.

In the United States, economists from the United States Corps of Engineersaccused senior management of deliberately manipulating economic analyses topromote billion dollar investments to be managed by the Corps.

Source: China in Agence France Presse, 21 January 2000, 10 March 2000;LHWP in Sunday Independent, 11 June 2000;United States in Grunwald, 29 February 2000

Box 6.9 Allegations of corruptiontake many forms, from inducements tofavour certain contractors during bidding,through to manipulation of water alloca-tions, offsetting farmer repayments, ormanipulating domestic electricity connec-tions locally.20 At whatever level, vestedinterests can distort the decision-makingprocess, undermining development. Deci-sion-makers may be inclined to favour largeinfrastructure as they provide opportunitiesfor personal enrichment not afforded bysmaller or more diffuse alternatives. Theconsequences frequently directly affect thepoor or the environment. Allegations ofcorruption have tainted many large damprojects in the past but have seldom resultedin prosecution in court (see Box 6.9).

The OECD countries, and the major inter-national financing agencies, have recog-nised the pervasive extent of corrupt prac-tice and its negative consequences. Throughthe 1990s they have moved to assist coun-tries in tackling corruption by makingbribery payments illegal in their country oforigin, debarring contractors convicted ofbribery from future contracts and tighteningup due diligence on bribery opportunities.21

As of August 2000, twenty-three countrieshad ratified the 1997 OECD Convention onCombating Bribery of Foreign PublicOfficials in International Business Transac-tions. Its principal objective is to eliminatebribes to foreign officials, with each countrytaking responsibility for the activities of itscompanies and what happens in its ownterritories.22

Transparency International, an internationalNGO, has also been active in promotingworkable and transparent, ‘integrity pacts’ forlarge infrastructure tenders. These have metwith growing acceptance and success in LatinAmerica. A range of legal measures and

60

50

40

30

20

10

0


% o

f dam

s

Year from start of commercial operation (by decade)befo

re 19

5019

50s

after 1

990

1960

s

1970

s

1980

s

Environmental impact assessments

Social impact assessments

Figure 6.4 Trends in the implementation of environmental and socialassessments

Source : WCD Cross-Check Survey.

transparency processes are therefore increas-ingly available for ensuring that dams are builtfor societal good, not for personal gain.

Multilateral and bilateralfinancing agencies

Overseas development financing agencies,particularly the multilateral and bilateral

Chapter 6


agencies have played an impor-tant role in funding and secur-ing large dam projects. Theyhave adopted a broad set ofpolicies, criteria and guidelinessince the 1980s as a result oflessons learned from experienceand public criticism. For exam-ple, the World Bank has adopt-ed ten safeguard policies relatingto such environmental issues asforestry, pest control and envi-

ronmental assessments; and such socialissues as indigenous people, cultural propertyand resettlement. The result of these devel-opments is that on paper the World Bankhas a comprehensive set of policies dealingwith large dam projects. More recently theInternational Finance Corporation (IFC) andthe Inter-American, Asian and AfricanDevelopment Banks have adopted similarguidelines.

Despite these changes, the banks’ policies,like the national regulatory systems are moreconcerned with project planning, design andfinancial management than with optionsassessment or with the operational phase ofa large dam project. In addition, they havepaid more attention to monitoring theplanning and construction phases than theoperation of the project, which is often leftto national governments. Post-implementa-tion monitoring is generally discontinued atmost five years after project commissioning.Even then, the main focus has been oncomparing the project proposals with theproject outcome. Weak treatment of socialand environmental impacts at appraisalleads to weak assessments of outcomes atevaluation.

This approach assumes that the planningphase can anticipate and cover all future

eventualities. Yet the WCD KnowledgeBase shows that achieving satisfactory socialand environmental outcomes requiresconstant adaptive management. The shortterm and inflexible nature of the agreementbetween the borrower and the bank is anobstacle to achieving this result. Further,the mitigation measures often receive lessprominence in comparison with financeissues.

Numerous developed countries have bilater-al aid agencies and export credit agencieswhich have also funded or supported thefinancing of dams and dam-relatedprojects.23 Bilateral aid agencies vary in thestringency of the requirements they have forsupporting large dam projects. Yet whilethey are relatively small participants in thelarge dam sector, their funding for specificaspects of the master planning or projectfeasibility studies can be critical in bringingother financiers to the table.

Export credit agencies (ECAs) are increas-ingly financing specific portions of large-scale infrastructure projects in developingcountries. ECAs provide loans, guaranteesand insurance to domestic corporations andbusinesses for their activities overseas tosupport and promote export trade from theirrespective countries. They finance the highvalue, electrical and mechanical equipmentcomponents and are an increasingly impor-tant source of financing for private sectorinvolvement in large dams.

Unlike the major development financingagencies, ECAs generally lack policies onenvironmental and social issues and do notnecessarily adhere to internationally accept-ed standards and guidelines. Experiencesfrom the Three Gorges dam in China, Ilisudam in Turkey, Maheshwar dam in Indiaand San Roque dam in the Philippines

The policies of thedevelopment banks are

more concerned withproject planning, design

and financialmanagement than withoptions assessment or

with the operationalphase of a large dam

project.



underline the need for ECAs to examineclosely the social and environmental im-pacts of the projects they support. Theabsence of common standards among ECAsleads to ad hoc competitive decision-making(see Box 6.10).

The policies of multilateral banks havechallenged the capacity of their borrowercountries to actually implement theirrequirements. Bank staff have had to eitherexercise their own discretion to adapt thepolicies to the realities of each country orignore cases of non-compliance by theirborrowers. In either case the bank’s toler-ance of the staff ’s and the borrower’s non-compliance with the policies can breedcynicism about the willingness to comply.There are no sanctions for staff members, orcountries, for non-compliance. Performancecriteria for staff have tended to be related toapprovals and disbursement targets.

The WCD Knowledge Base offers manyexamples of the failure of project propo-nents, contractors and operators to fulfilcommitments, whether explicit (projectspecific agreements and contracts) orimplicit (applicable policies, laws, regula-tions and guidelines). The WCD CaseStudies provide an indication of the types ofbreaches observed (see Box 6.11). The threebasic reasons for lack of compliance havebeen:

■ The tendency for large projects toproceed under a restricted decision-making process negotiated betweengovernments, lenders and contractorswith little public oversight, little partici-pation by affected parties and limiteddisclosure and public access to informa-tion. In many cases lack of clear moni-toring procedures also limited publicscrutiny.

■ The lack of sanctions for non-compli-ance, either at national or internationallevel. In many cases local affectedcommunities were unable to defend theirinterests when faced with a strongcentralised government especially incountries with weak legal safeguards andrecourse mechanisms.24

■ The dependence, in many cases, on thegood faith of sovereign States and publicpressure to resolve disputes, adjudicateclaims and ensure compensation forthose who have suffered wrongs. Theabsence of legal sanction or, where thisexists, difficulty in accessing it made iteasier for developers (especially govern-ments) to escape the consequences ofnon-compliance. The costs involved inseeking legal remedies were often prohib-itive for those who may have beennegatively affected.

The multilateral banks – and in particularthe World Bank – have the most sophisti-cated set of policies, operational proceduresand guidelines amongst the internationaldonor community and are under regularscrutiny by civil society. In examining actualpractice and compliance with standards andthe realisation of the outcomes that these

After the US Export-Import Bank declined support for the Three Gorges projectin China, citing lack of information on environmental and social mitigation, otherECAs, with lower thresholds of social and environmental acceptability, steppedforward to issue loan guarantees to corporations. This phenomenon is especiallyrelevant to the financing of large dam projects where ECAs are supportingprojects declined by other funding agencies on environmental grounds. In June1999, the G-8 ministerial meeting issued a statement recognising the impor-tance of common standards among the ECAs. Later in the year the OECDWorking party on Export Credits and Credit Guarantees agreed to a voluntaryenvironmental information exchange on larger projects but fell short of agreeingon new criteria for ECA support.

Source: Udall, 2000, WCD Contributing Paper toThematic Review V.4 Regulation, p1-3.

Box 6.10 Export Credit Agencies: competing for business versuscommon standards

Chapter 6


imply, the WCD Knowledge Base hasemphasised the experience of these banks.Given that the banks have often fallen shortof realising such high standards for planningand decision-making, it is legitimate toexpect that the other donors and in-country

In most of the WCD Case Studies there are examples of agreements made notbeing respected and commitments only partially implemented:

■ For Grand Coulee dam $54 million for past losses and $15 million peryear in compensation was awarded by the courts to the Colville tribe in1994, 50 years after the dam was built. The settlement cited high levelgovernment correspondence indicating an initial intention to compen-sate the tribes for loss of salmon in accordance with existing treaties, thiswas abandoned by the late 1930s.

■ Construction of Kariba dam complied with the laws of the day – howeverit was planned and built prior to most regulations being in place. Inaddition, the laws under colonial rule in Southern Rhodesia (nowZimbabwe) did not include provision for just legal redress for displacedAfricans, a clear contravention of prevailing international standards.

■ At Tarbela dam nearly 2 000 families had not been adequately resettledtwenty years after displacement in terms of the 1967 criteria forcompensating landowners.

■ At Tucurui, the initiation of the second phase of the project in 1999proceeded without an environmental impact assessment (EIA).Eletronorte, the utility that owns the project, maintains that Phase II doesnot require an EIA as it is the continuation of a project approved prior tothe setting of EIA regulations in Brazil. Local communities, concernedabout the possibility of a repeat of the social and environmental impactsof Phase I of the project, disagree with this position and have asked for afull EIA. The Case Study also points out that Eletronorte did not respectthe Waters Code which stipulated that hydropower plants should notadversely affect the food and needs of river bank communities, publichealth, shipping, conservation and free circulation of fish, amongst others.

■ In Aslantas the government agreed with the World Bank to recover aportion of the costs of the irrigation component of the scheme fromfarmers over 50 years. Current recovery rates are inadequate to meet thistarget (see Box 2.4).

■ At Pak Mun, an EIA was a World Bank requirement and should have beenperformed on the revised project prior to construction.

■ In India, a national assessment of dam projects cleared in the 1980s and1990s shows that in 90% of cases the project authorities have not fulfilledthe environmental conditions under which environmental clearance wasgiven by the central government under the Environment Protection Actof 1986.

■ In Norway, provisions for environmental flow releases from hydropowerdams have allegedly dropped below the minimum established in thelicensing agreements. Yet the central authorities lack legal means tomonitor and sanction confirmed offenders.

■ In China a review of Lingjintan dam showed that compliance withenvironmental clauses in construction contracts was not satisfactory due,amongst other factors, to lack of incentives, lack of accountability andpoor oversight.

Source: WCD Case Studies

Box 6.11 WCD Case Studies: a compliance report card

agencies will have encountered similardifficulties and also fallen short of theoutcomes implied by the standards set bythe banks.

Findings and LessonsConflicts over dams have heightened in thelast two decades, as awareness of theirimpacts and performance has grown and thedebate over costs and benefits has spread.While conflict has sparked innovation insome contexts and by some stakeholders inthe debate, in others it has deepened andentrenched conflict. The Global Review oflarge dams and their alternatives has exam-ined the performance of large dams using anumber of different lenses – technical,financial, economic, environmental andsocial – and explored the options that arecurrently available to fulfil water and energyneeds.

As part of its Global Review of past experi-ence, the Commission examined the deci-sion-making, planning and complianceprocesses around large dams in the WCDKnowledge Base to better understand whatfactors influence these processes and theperformance and results of the projects.Based on this review the findings on deci-sion-making include:

■ centralised and bureaucratic Stateagencies and utilities have often promot-ed and implemented dams as one of asmall number of conventional responsesto water and energy needs, a choice that,once taken, often has not been revisitedeven in the face of an expanding list ofalternatives;

■ foreign assistance has stimulated largeinvestments in dams in developingcountries, by providing financing – morethan $4 billion per year during the peak



of lending in 1975-1984 – and leadingfinancing arrangements;

■ large developing countries with manylarge dams (including China, India andBrazil) have established internal capacityto build large dams, although in recentdecades they have often used externalfinance and equipment to build largerprojects;

■ countries building fewer dams have beendisproportionately influenced by foreignassistance for large dams, making themmore vulnerable to conflicts between theinterests of governments, donors andindustry involved in foreign assistanceprogrammes and improved developmentoutcomes for rural people, particularlythe poor.

■ the multilateral banks and bilateral aidagencies, alongside the dam-buildingindustry and international industryassociations, have played a key strategicrole in spreading the technology todeveloping countries, lending legitimacyto emerging dam projects, and fosteringthe technological and human resourcesrequired to build and maintain dams;

■ there has been a generalised failure toinclude and recognise affected peopleand empower them to participate indecision making.

■ the lack of agreements on water usewithin shared river basins is an increas-ing concern and cause for conflict,particularly as demands grow and unilat-eral decisions to build large dams by onecountry alter supply within a basin withsignificant consequences for otherriparian States.

The end result of the influence exerted byvested interests, and the conflicts of inter-ests that have arisen, has been that many

dams were not built based on an objectiveassessment and evaluation of the technical,financial and economic criteria applicable atthe time, much less the social and environ-mental criteria that apply in today’s context.That many of such projects have failed todeliver by standards applicable in eithercontext is therefore not surprising, butnonetheless cause for concern.

Focussing on the planning cycle for largedams reveals a series of limitations, risks andoutright failures in the manner in whichthese facilities have been planned:

■ participation and transparency in plan-ning processes for large dams was neitherinclusive nor open and while actualchange in practice remains slow even inthe 1990s there is increasing recognitionof the importance of inclusive processes;

■ while the number of options haveincreased over time, options assessmentwas typically limited in scope due topolitical and economic interests drivingdam projects, lack of familiarity withother options, the perceived need toquickly proceed with large-scale projectsto meet large projections in demand andthe relative ease of developing newsupply relative to undertaking policy orinstitutional reform;

■ project planning and evaluation for largedams was confined primarily to technicalparameters and the narrow application ofeconomic cost/benefit analyses withmany sectoral studies aimed at findingleast-cost supply solutions for providing asingle service such as irrigation water orelectric power;

■ where opportunities for the participationof affected people, and the undertakingof environmental and social impactassessment have been provided theyoften occur late in the process, are

Chapter 6


limited in scope, and even inthe 1990s their influence inproject selection remainsmarginal;

■ the paucity of monitoring andevaluation activity once alarge dam is built has reducedthe basis for learning fromexperience; and

■ while countries that were thefirst to build dams are now

evaluating decommissioning, removing, orre-operationalising ageing facilities that aredue for re-licensing, many other countriesdo not yet have established licensing periodsthat clarify the responsibilities of the ownertowards the end of the dam’s effective life.

The net effect of these difficulties is thatonce a proposed dam project has passedpreliminary technical and economic feasibil-ity tests and attracted interest from govern-ment, external financing agencies or politi-cal interests, the momentum behind theproject often prevails over further assess-ments. Moreover where substantial differ-ences arise between proponents and thosepotentially affected, efforts to modify plansand decisions often must resort to legal orother action outside the normal planningprocess.

But poor outcomes and mistrust are notsimply a matter of narrow and technicallyfocussed planning and decision-making.They also stem from the failure of damproponents and financing agencies to fulfilcommitments made, observe statutoryregulations and abide by internal guidelines.Among the findings on compliance are:

■ in some cases, the opportunity forcorruption provided by dams as large-scale infrastructure projects furtherdistorted planning and decision-making;

■ weak regulatory frameworks and lack ofsanctions at the national level, particu-larly for options assessment and socialand environmental requirements, andlittle enforcement of existing regulationshave contributed to the poor economic,social and environmental performance ofmany large dams;

■ large projects tend to lack public over-sight of negotiations between govern-ment, lenders and contractors, includinglimited disclosure and public access toinformation;

■ in many cases lack of clear monitoringprocedures limits public scrutiny andaccountability;

■ there is a lack of sanctions at the inter-national level for non-compliance withinternational norms regarding water usein shared river basins;

■ within public international financialinstitutions, there are few, if any, sanc-tions for staff members, or countries, fornon-compliance;

■ in some countries, there is a lack of legalopportunities for affected groups to seekrecourse, therefore lessening the ac-countability of the project developers;and

■ most of the bilateral Export CreditAgencies are only beginning to developsocial and environmental policies andguidelines and the lack of consistencyamong the agencies’ guidelines hasresulted in projects rejected by some onenvironmental and social groundsreceiving funding from other sourceswith lower standards.

To sum up, whereas substantial improve-ments in policies, legal requirements andassessment guidelines have occurred, partic-ularly in the 1990s, it appears that business



is still often conducted as usual when itcomes to planning and decision-making.Further, past conflicts remain largely unre-solved and past impacts largely unmitigated.The WCD Global Review found that theinfluence of vested interests, legal andregulatory gaps, disincentives for compli-ance and lack of monitoring, participationand transparency amongst other things,have combined to create significant barriersto reforms that could otherwise make theplanning and decision-making processesmore open, responsive and accountable.Recent examples cited in this and earlierchapters are the basis of the Commission’soptimism that these barriers are surmounta-ble and these difficulties are not inevitable.The WCD Global Review indicates thatthere are opportunities for reducing negativeimpacts and conflicts, and indeed a respon-sibility, to:

■ increase the efficiency and performanceof existing assets and systems;

■ better assess development needs and thefull range of development options;

■ avoid and minimise ecosystem impacts;

■ ensure that displaced and project-affected peoples’ livelihoods are im-proved;

■ shift away from a balancesheet approach to decision-making in favour of broader,inclusive and more timely,multi-criteria approaches toplanning and decision-making;

■ resolve past inequities andinjustices, and transformproject-affected people intobeneficiaries, enablingthem to contribute to project benefits;

■ conduct regular monitoring and periodicreviews; and

■ develop, implement and enforce incen-tives, sanctions, and recourse mecha-nisms, especially in the area of environ-mental and social performance.

The remainder of the report builds on thefindings and lessons of the WCD GlobalReview. It delivers a way forward that canimprove planning, decision-making andcompliance, capitalising on the optionsavailable – whether of a technological,policy or institutional nature – and provid-ing economically efficient, socially equitableand environmentally sustainable solutionsto meet future water and energy needs.

Chapter 6


Endnotes

1 Many government agencies involved in waterresources development in countries that buildlarge numbers of dams maintain a constructionworkforce to build infrastructure: in theUnited States the Bureau of Reclamation andthe Army Corps of Engineers and in China theWater Resources Ministry.

2 Eckstein, 1958.

3 Gillis et al, 1987, p366.

4 WCD Thematic Review V.5 Negotiation,section 3.3.

5 Sklar and McCully, 1994, eco029, WCDSubmission, p12-14; Gillis et al, 1987.

6 WCD Thematic Review III.2 FinancingTrends, ch. 3.

7 The total investment in dams by the multilat-erals and bilaterals portrayed in Figure 6.1 isapproximately $125 billion.

8 Guhan, 1995, cited in India Country Study,Section 6.1.8.

9 ICE, 1994, p15-16; ICE, 1996, table 1.

10 Usher, 1997b, p120-123.

11 Morse and Berger, 1992; Umaña, 1998, p7;Wappenhans Task Force, 1992.

12 Usher, 1997a, eco026, WCD Submission,p120-123.

13 Egypt and Ethiopia are now working towardsgreater collaboration through the Nile BasinInitiative.

14 WCD Thematic Review on Negotiation,section 3.4.

15 Hanusin, 1999, opt052, WCD Submission, 4-5.

16 WCD Thematic Review III.1 EconomicAnalysis

17 WCD Thematic Review V.2 Environmentaland Social Assessment, Section 1.

18 For example see the WCD India CountryStudy, section 7.4.

19 WCD Thematic Review V.4 Regulation,section 3.1.

20 Lovei and McKechnie, 2000, p34-37.

21 For example the 1996 Development Assist-ance Committee’s Rcommendation on Anti-corruption Proposals for Aid-funded Procure-ment.

22 OECD, 2000b; OECD, 2000c, website http://www.oecd.org/daf/nocorruption/index.htm,viewed 4 September 2000.

23 For example the United Kingdom has theDepartment for International Developmentand the Export Credits GuaranteeDepartment.

24 For example see WCD India Country Study.



The mandate required the World Commission on

Dams to propose a framework for options assessment

and decision-making processes for water and energy

resources development, along with a set of criteria and

guidelines for the planning, design, construction,

operation and decommissioning of large dams. Part Two

of the report presents a new approach to decision-making,

based on the findings in the Global Review (Part One).

■ Chapter 7 presents a normative framework for equitable andsustainable development and develops an approach to negotiatingoutcomes for water and energy development projects based onrecognising rights and assessing risks.

■ Chapter 8 sets out seven broad strategic priorities that should guidedecision-making. Each one includes a set of principles that, ifapplied, will lead to more equitable and sustainable outcomes infuture.

■ Chapter 9 develops supporting criteria and guidelines that willhelp decision-makers and all interested parties implement thestrategic priorities set out in Chapter 8.

■ Part Two closes with Chapter 10 which stresses the need forconcerted and simultaneous action and proposes entry points forthe different constituencies involved in the dams debate to followup in response to the recommendations of the Commission.

Part Two:The Way Forward

197

Enhancing Human Development

Parting the Waters: The Report of the World Commission on DamsThe Report of the World Commission on Dams

Chapter 7:

Enhancing Human Development:Rights, Risks and Negotiated Outcomes

To improve development

outcomes in the future we

need to look at proposed water and

energy development projects in a much

wider setting – a setting that reflects

full knowledge and understanding of

the benefits and impacts of large dam

projects and alternative options for

all parties. It means that we have to

bring new voices, perspectives and

criteria into decision-making, and

we need to develop a new approach

that will build consensus around the

decisions reached. This will result in

fundamental changes in the way

decisions are made.

Chapter 7


This chapter proposes a new basisfor assessing options and reachingdecisions on water and energyresources development. It links ourreview of past experience con-tained in the Global Reviewchapters with the WCD’s frame-work for future practice elaboratedin chapters 8 and 9. In developingthis framework the Commission

found that applying the lessons learnt doesnot merely imply a change in process andprocedure. The fault lines of the damsdebate run far deeper and touch upon manyof the fundamental norms and values thataffect our lives as citizens and communities.

In moving forward the Commission recog-nises that the dams debate is rooted in thewider, ongoing debate on development. Theemerging global vision of equitable andsustainable development provides thefoundation for the Commission’s findingsand recommendations. This foundationrelates to:

■ the framework of internationally accept-ed norms on human rights, the right todevelopment, and sustainability

■ global trends and the emerging develop-ment paradigm; and

■ a rights based approach where recogni-tion of rights and assessment of risksprovides the basis for negotiated deci-sions on dams and their alternatives.

From Global Review toFuture PracticeAlong with all development choices,decisions on dams must respond to a widerange of needs, expectations, objectives andconstraints. As matters of public choice andpolicy they will always reflect competing

interests and require negotiation. Reconcil-ing competing needs and entitlements is thesingle most important factor in addressingthe conflicts associated with developmentprojects and programmes – particularlylarge-scale interventions such as dams.

Access to water provides a graphic illustra-tion of such competing needs and develop-ment objectives and the reason why equityand justice considerations emerge as keyissues. Riparian communities with long-standing use rights and economies thatdepend on local resources have an immedi-ate interest in maintaining current usepatterns and assuring fulfilment of theirfuture needs. However, in the context ofnational policies, meeting developmentneeds may require sharing water resources.To balance these needs societies will have tonegotiate a framework for equitably sharingthe resource. History shows that this can bedone successfully provided a transparent andlegitimate process is followed.

Dams have often been seen as an effectiveway of meeting water and energy needs.However, the Global Review has empha-sised the wide range of problems associatedwith them. The Commission acknowledgesthat today’s perspective on developmentreflects the benefit of knowledge that maynot have been available to past decision-makers. Nonetheless, it is clear that thepositive contribution of large dams todevelopment has, in many cases, beenmarred by significant social and environ-mental impacts which are unacceptablewhen viewed from today’s values.

The debate about dams is a debate about thevery meaning, purpose and pathway ofdevelopment as well as the role that theState plays in both protecting the rights of

The debate aboutdams is a debate

about the verymeaning, purpose and

pathway ofdevelopment as well

as the role that thestate plays.

199



its citizens and responding to their needsthrough development policies and projects.The WCD Global Review showed clearlythat large-scale infrastructure projects suchas dams can have devastating impacts onthe lives and livelihoods of affected commu-nities and ecosystems, particularly in theabsence of adequate assessments and provi-sions being agreed to address these impacts.During its regional consultations andthrough the WCD Case Studies the Com-mission was confronted with accounts bycommunities and individuals on the natureand extent of these impacts. These accountsgive rise to fundamental concerns about theway governments and their agencies haveexercised their role and responsibilities inthe development process.1

Improving the development process and itsoutcomes must start with a clear under-standing of the shared values, objectives andgoals of development and their implicationsfor institutional change. The Commissiongrouped the core values informing itsunderstanding on these issues under fivemain headings:

■ Equity

■ Efficiency

■ Participatory decision-making

■ Sustainability

■ Accountability

These five values run through the entirereport and are the focus of concerns raisedby the evidence presented in the GlobalReview. Applying these values to theevidence it has collected, the Commissionbelieves that negotiated outcomes using arights-and-risks approach will deliver themost favourable development results.Reference to these values enables all stake-holders to test decisions relating to waterand energy development. If the report

advances these values significantly, we willemerge at our destination – improveddecision-making processes that deliverimproved outcomes for all stakeholders.

In the following sections the Commissionpresents a new policy framework fordecision-making on water and energydevelopment options that can be applied innational and local contexts. To improvedevelopment outcomes, ensure publicacceptance and reduce future controversy,this new basis for judgement needs to winthe support of the full range of key stake-holders. It suggests that decision-making onwater and energy management will alignitself with the emerging global trends onequitable and sustainable development.

Sustainable HumanDevelopment – A GlobalFrameworkWhat are these trends, and how firm is theirdirection and force? What do they imply fordecision-making? What do they say aboutthe rights that societies, communities andindividuals within societies, are entitled toand the responsibilities that accompanythese rights?

There is a globally accepted framework forsetting universal goals, norms and standards.The foundations of the framework are theUnited Nations Charter (1945) and the

“The economic sphere cannot be separated from the more complex fabric ofsocial and political life and sent shooting off on its own trajectory. To survive andthrive, a global economy must have a more solid foundation in shared valuesand institutional practices– it must advance broader and more inclusive, socialpurposes.”

Source: Annan, 2000

Box 7.1 Shared values and institutional practices – the UN MillenniumReport

Chapter 7


Universal Declaration of Human Rights(1947) (see Annex VI for full texts).2

In the last two decades of the 20th centurythe United Nations General Assemblyreinforced this framework with the UN

Declaration on the Right toDevelopment (1986) and theRio Declaration on Environ-ment and Development (1992)(see Annex VI for full texts).Taken with the earlier cove-nants and conventions on humanrights, they cover a broad spec-trum ranging from human rights,

through social development and environment,to economic co-operation.

Human rights

Reference to the framework of human rightsadopted by the international community in1948 advances the process of planning anddecision-making in important ways. Itarticulates such rights as self determinationand the right to consultation in matters thataffect people’s lives, the right to democraticrepresentation of people’s views on suchmatters, the right to remedy and the right toan adequate standard of living, freedom fromarbitrary deprivation of property, freedom fromviolence, freedom of thought, conscience andreligion and freedom of opinion and expres-sion. More generally it includes the right to asocial and international order in which theserights can be fully realised.

All people are accorded human rightswithout discrimination by virtue of theirhumanity. Reference to the human rightsframework means those policies that denythe rights of some to fulfil those of otherscannot be adopted. Thus any policy or lawadopted must contain the intention torespect the rights and entitlements of all.

The application of a rights based approachrecognises the indivisibility of civil, politi-cal, economic, cultural and social rights. Itbroadens the range of basic human rightsbeyond the socio-economic sphere of needsto include rights to life, health care, educa-tion, shelter, food, water, remedy, security,subsistence and livelihood.

Unlike needs, which are expressed asaspirations for benefits, rights and entitle-ments are expressed in law, allowing fortheir attainment or redress through thejustice system. A country may use its legisla-tive process to ensure that appropriaterights-based policies are given legal expres-sion and to establish institutional mecha-nisms to uphold rights. The legal system alsoprovides a means for resolving potentialconflicts in cases where rights give rise tocompeting entitlements. A rights basedapproach thus provides a principled basis formediating development choices amongcompeting interests.

The right to development

In 1986 the UN General Assembly adoptedthe Declaration on the Right to Develop-ment (DRD). 3 It marked a significant stepby the international community in develop-ing a normative framework that specifiesresponsibilities in applying a human rightsapproach to development. It moved beyondthe sphere of individual human rights toaddress relationships between differentinterest groups in society and their interac-tion with the state.

The Declaration on the Right to Develop-ment sets out a number of relevantconcepts:

■ Development is a comprehensive processaiming at the constant improvement ofthe well-being of the entire population;

A rights based approachprovides a principled

basis for mediatingdevelopment choices

among competinginterests.

201



it affects economic, civic, social, culturaland political rights.

■ The promotion of, respect for andenjoyment of certain human rights andfundamental freedoms cannot justify thedenial of other human rights and funda-mental freedoms.

■ The creation of conditions favourable tothe development of peoples and individ-uals is the primary responsibility of theirStates.

■ National development policies aiming atthe constant improvement of the well-being of the entire population and of allindividuals should be formulated on thebasis of their active, free and meaningfulparticipation and fair distribution ofbenefits resulting therefrom.

■ The right of peoples to exercise full andcomplete sovereignty over all theirnatural wealth and resources.

■ The right to self determination.

■ Equal opportunity for access to food andhousing.

The DRD sought to clarify the role of theState in exercising its rights, responsibilities,duties and obligations in planning andimplementing national development poli-cies and programmes. It reflects the recog-nition that every society acts as an organisedpolity in which the State is accorded powersand responsibilities. At the same time Statesare subject to conditions that can be sum-marised under the heading of good govern-ance criteria, such as those in the Declara-tion on Human Rights including the rule oflaw, accountable bureaucracies and freedomof information. The legitimacy of the Statein exercising its role is premised on theassumption that it acts in accordance withthese criteria. Without good governance,the legitimacy of the State and ultimately itsability to take decisions are compromised.

State authority may also belimited through adherence tothe framework of internationalconventions that, in certaincircumstances, supersedesstrict sovereignty.

SustainableDevelopment – theRio Principles

The Declaration of the UnitedNations Conference on the Human Envi-ronment (Stockholm, 1972) for the firsttime accepted that the environment wasfundamental to human well-being, and thatits management and care in the interest ofadvancing wider human goals was a centraltask of States and the international commu-nity. Articulation and codification ofenvironmental rights took somewhat longer.The United Nations Conference on Envi-ronment and Development adopted the RioDeclaration on Environment and Develop-ment in June 1992. The Declaration con-tains 27 principles, usually known as the RioPrinciples4 . Several of these are of immedi-ate relevance to water and energy resourcesmanagement.

■ Principle 1 states that ‘Human beings areat the centre of concerns for sustainabledevelopment. They are entitled to ahealthy and productive life in harmonywith nature’.

■ Principle 3 recognises the right todevelopment, but insists that it be met inan equitable way that considers futuregenerations as well as present partici-pants in development.

■ Principle 4 insists that sustainabledevelopment requires environment to beintegrated with the development processand form a central feature of the aims ofthat process. Environment, on its own,is an insufficient goal.

Chapter 7


■ Principle 10 underlines that all con-cerned citizens must be involved inhandling environmental issues, and mustparticipate in the decision-makingprocess. This participation must beaccompanied by effective access torelevant information and by opportuni-ties to seek redress and remedy in caseagreements are not respected.

■ Principle 13 states that States shallensure compensation for victims ofenvironmental damage and give priorityto the further development of lawregarding liability in such cases.

■ Principle 15 states that the precautionaryapproach shall be widely applied by

States according to their capabilities.Where there are threats of serious orirreversible damage, lack of full scientificcertainty shall not be used as a reason forpostponing cost-effective measures toprevent environmental degradation.

■ Finally, Principle 22 recognises the vitalrole of indigenous people and other localcommunities in environmental manage-ment and development, and entrustsstates with ensuring their effectiveparticipation in the achievement ofsustainable development.

The Rio principles in conjunction withAgenda 21 thus highlighted not only thelinkages between environment and develop-ment but also the importance of localcommunities having a significant role inshaping national development strategies.

The Global Review provided extensiveevidence to illustrate that governments, inconstructing dams, have often found them-selves in conflict with basic principles ofgood governance that have been articulatedin the three international instrumentsreferred to above. This situation still pre-vails today. The level of conflict surround-ing large dams, yesterday and today, issufficient to illustrate that dams frequentlytrigger disagreements about the respectiverights of governments and their citizens.

The UN Declaration of Human Rights, theRight to Development and the Rio Princi-ples together make up an internationallyaccepted framework of norms empowering aconcept of development that is economical-ly viable, socially equitable, and environ-mentally sustainable. It is a powerfulframework with a central bearing on thedams debate. Figure 7.1 illustrates how theCommission draws on these internationallyaccepted norms in the remainder of this

Normative Development Framework

Universal United Nations Rio DeclarationDeclaration of Declaration on on EnvironmentHuman Rights the Right to and

Development Development

WCD Core Values and Shared Understanding

Core ValuesEquity

EfficiencyParticipatory Decision-Making

SustainabilityAccountability

Rights and Risks Approach

A Tool for Negotiated Decision-Making

Agenda for Implementation

Strategic Priorities and Policy PrinciplesWCD Criteria and Guidelines

Figure 7.1 The WCD policy framework

203



report to develop a new policy frameworkand corresponding guidance for water andenergy resources development.

Trends and Challenges inApplying the NewDevelopment FrameworkWhen invoking this emerging universalnormative framework, one must not over-state its completeness, its complete accept-ance, or the ease of applying its provisionsin practice. Nevertheless, recent trends inglobal public policy suggest that increasingattention is being paid to the gap betweenaspiration and realisation. It is significantthat the focus of the United Nations Devel-opment Programme’s (UNDP) HumanDevelopment Report 2000 is on human rightsand human development (see Box 7.2). Theframework also strengthens the notion, nowgaining currency in a variety of arenas, thatthere is a body of common concerns based ona range of international conventions andaccords that transcend national sovereignty.

The adoption of a rights based approachdoes not on its own resolve the practicalchallenge of meeting human needs. Duringits regional consultations the Commissionlistened to a wide range of views and reason-ing on this matter. Meeting rapidly growingneeds for water and energy – particularly inthe developing economies of the South –imposes difficult choices on governments.Failure to respond to these needs carriessignificant economic and political risks.Food security, blackouts, empty water tapsand floods are among the most immediateand sensitive public service issues for whichsociety holds government accountable. Inthe past, large-scale dam projects seemed tooffer both apparently straightforward andhighly visible options for responding tothese pressures.

The UNDP Human Development Report 2000 focuses on human rights as thefundamental framework within which human development must be pursued. Itcontends that societies are on the threshold of a significant advance in therecognition of, and respect for, human rights. But this will require six fundamen-tal shifts from the thinking that dominated the 20th century:

■ From state-centred approaches to pluralist, multi-actor approaches –with accountability not only for the State but also for media, corpora-tions, schools, families, communities and individuals.

■ From national to international and global accountabilities – and from theinternational obligations of States to the responsibilities of global actors.

■ From the focus on civil and political rights to a broader concern with allrights – giving as much attention to economic, social and cultural rights.

■ From a punitive to a positive ethos in international pressure andassistance – from reliance on naming and shaming to positive support.

■ From a focus on multiparty elections to the participation of all throughinclusive models of democracy.

■ From poverty eradication as a development goal to poverty eradicationas social justice, fulfilling the rights and accountabilities of all actors.

Source: UNDP, 2000

Box 7.2 Human rights and human development

At the same time, the decision criteria usedby governments do not always match thoseof organised groups of citizens. Govern-ments are too often inclined to invokeurgent development needs as a reason forrestricting rights, while civil society groupsbelieve that full respect for rights and thesearch for alternatives represents the surestway of promoting equity and justice indevelopment.

For many parts of the developing world,access to capital, technology and develop-ment opportunities determines the extent towhich local and national economies are ableto develop. Similarly the political economyof power, vested interests and access toresources that characterise each society havea large influence on its commitment toequitable and sustainable development.

This is not to suggest that the problemsreside in the poorer countries. Pressure forwater and energy development – in both

Chapter 7


North and South – is not only caused by theimperative of meeting basic human needs,but is also driven by wasteful consumptionin the richer countries or among the well-offin the poorer countries5 .

Whatever judgement is made, it is a realitythat governments face very real dilemmas intrying simultaneously to satisfy urgent needsand advance the realisation of fundamentalrights, even if the goal of fulfilling allpeople’s needs and entitlements is notquestioned. Notwithstanding this, the

Commission believes thatfulfilling development needsrequires respect for fundamentalrights, and not a trade offbetween them. We believe thatan equitable and sustainableapproach to developmentrequires that a decision to builda dam or any other options mustnot, at the outset, sacrifice therights of any citizen or group ofaffected people.

In developing its framework and recommen-dations the Commission has sought to drawon the broader trends and developmentsthat reflect the changing context andinternational development discourse. Notall countries will recognise themselves inthese statements and the trends are far moreadvanced in some areas than in others.Nevertheless, the Commission believes thatthe trends described below are not limitedto any one region or group of countries, buthave broad relevance. From the perspectiveof this shared experience we draw attentionto the following elements of the evolvingdevelopment paradigm:

■ The world appears set to move beyondthe growth paradigm, which judgedprogress largely in narrow economicterms, putting a strong premium on

activities that offered a clear economicreturn. This does not mean that econom-ic viability is no longer seen as impor-tant. If anything it has greater weightalong with a greater sanction on pooreconomic performance at company orcountry level. But we are giving greatervalue to non-monetary or non-monetisedaspects of development such as the needto conserve biological diversity, protectcultural values, or consider the needs offuture generations.

■ We are moving from assessing publicinterest in general terms to a focus onimproving equity in the spread of costsand benefits from development. Thegrowing disparity between rich and poorwithin and across many nations hasfuelled doubts about traditional develop-ment paths.6 The emerging consensus onthe need for greater transparency andparticipation in development decision-making is likely to speed up this transi-tion considerably. The focus on equityextends to recognising intergenerationalequity as an important factor in dealingwith resource access and use.

■ An increasingly robust foundation ofinternational covenants, charters,declarations and conventions supportsthe sharpening focus on equity andconfirms the growing importance ofequity considerations in development. Inparticular, a body of internationalinstruments relating to human rights isemerging, together with institutions tooversee their further development andapplication. This will strengthen argu-ments in favour of greater transparency,participation in decision-making andaccountability for compliance. Pressurefrom the human rights community hashad an impact on governments and morerecently on corporations.

Governments face veryreal dilemmas in trying

simultaneously to satisfyurgent needs and

advance the realisationof fundamental rights,

even if the goal offulfilling all people’s

needs and entitlementsis not questioned.

205



■ The definition of public interest isshifting from one that placed a premiumon overriding interests of economicgrowth to one that places more weighton the rights and interests of people andcommunities affected by a development.The level of sacrifice that affected peopleare expected to endure for an often ill-defined notion of the greater public goodhas been increasingly challenged. Simi-larly, the recognition that affectedcommunities, through their sacrifices, arein fact contributors to developmentprojects implies a shift in focus fromcompensatory approaches to establishingequitable benefit sharing mechanisms.

■ We have also witnessed a shift fromtechnology-driven development choicestowards a more integrated approach tomanaging scarce resources with technol-ogy being but one factor among others inmanaging demand and supply of servicesmore effectively. Furthermore, therecognition that traditional practises andtechnologies can achieve great levels ofefficiency in meeting local needs coupledwith the advent of new technologyoptions has increasingly challenged thenotion that large and centralised systemsare always the most effective and effi-cient way of meeting demands for waterand energy.

■ The emerging paradigm provides a newbasis for governance and democraticdecision-making. This stems from asubstantial redistribution of roles andresponsibilities in the public and privatesectors and civil society. Many parts ofthe world have seen a considerablemigration of national governmentauthority, in three directions: upward toregional superstructures or internationalbodies, downward to provincial and localgovernment; and outward to the private

sector and civil society.This is not to say that therole of governments hasbecome less important;but it has changed andcontinues to change, withimplications for the waydecisions are taken andimplemented.

■ The private sector has, bycontrast, considerablyexpanded its role, undertaking functionsthat were until recently the exclusiveremit of government. Apprehensionsabout this trend are sharp in some partsof the world and reflect growing concernabout the diminishing power of citizensto control corporate activity throughlocal and national institutions. Pressureis therefore growing on corporations tobecome more accountable to widelysupported standards of social and envi-ronmental behaviour. Such pressure islikely to mean that corporations will facesteadily rising costs and risks if they failto comply with existing rules, regulationsand standards.

■ The role of civil society organisationshas also expanded and their legitimacy inrepresenting and defending interests, inparticipating as full actors in decision-making on development and in monitor-ing compliance is increasingly accepted.Civil society organisations are playing anincreasingly important role in influenc-ing public opinion and mobilising itagainst infringement or non-compliancewith new and emerging standards ofbehaviour, especially on the social andenvironmental front.

This changing context implies a broadeningrange of concerns that have a legitimateright to be considered and, therefore, of

Chapter 7


actors involved in reaching keydevelopment decisions. It willbe increasingly difficult to takedecisions on the narrow basis ofthe needs of infrastructuredevelopment. Instead, suchprojects need to be consideredas part of the broader process ofeconomic, social and environ-mental transformation.

Rights and Risks –an Improved Toolfor Decision-Making

Both the findings of the WCD GlobalReview and the implications of the norma-tive framework summarised in this chapterdemonstrate that the traditional ‘balancesheet’ approach of assessing costs andbenefits of a project is an inadequate tool foreffective development planning and deci-sion-making. The case of dams clearlyillustrates that development choices madeon the basis of such trade-offs neithercapture the complexity of considerationsinvolved, nor can they adequately reflectthe values societies attach to differentoptions in the broader context of sustainabledevelopment.

Given the significance of rights-relatedissues as well as the nature and magnitude ofpotential risks for all parties concerned, theCommission proposes that an approachbased on ‘recognition of rights’ and ‘assess-ment of risks’ (particularly rights at risk) bedeveloped as a tool for guiding futureplanning and decision making (see Figure7.2). This will also provide a more effectiveframework for integrating the economic,social and environmental dimensions foroptions assessment and the planning andproject cycles.

Rights …

The Global Review highlighted the need fora more practical and specific approach toaddressing the five values of equity, efficien-cy, participatory decision-making, sustaina-bility and accountability. These values formthe foundation of a rights-based approach toequitable decision-making about water andenergy resources management.

Various types of rights may be relevant inthe context of large dam projects. Theseinclude constitutional rights, customaryrights, rights codified through legislation,property rights or the rights of developersand investors. They can be classified on thebasis of their legal status, their spatial andtemporal reach, or their purpose. In thespatial and temporal dimensions, one candistinguish the rights of local, basin, region-al and national entities, the rights of ripari-an countries, or the rights of present andfuture generations. Regarding the purpose orsubject of rights, one can distinguish rightsto material resources such as land and water,and rights to spiritual, moral or culturalgoods such as religion and dignity.

This approach highlights the range andcomplexity of relevant rights and responsi-bilities and the reality that rights intersectand overlap. Mechanisms for conflictresolution, adjudication and independentarbitration must begin with the assessmentof these rights, entitlements and claims.This approach assumes that at the assess-ment stage, all claims are subject to a fair,open and transparent review. It is based onan understanding that no party’s rights willextinguish another’s. In fact, where rightscompete or conflict, negotiations conductedin good faith, offer the only process throughwhich various interests can be legitimatelyreconciled. This suggests an approach to

207



water and energy policy that provides fornegotiated processes within a legal andprocedural framework, including arbitration,recourse and appeal mechanisms to ensureequitable adjudication in cases wherenegotiated settlements are not achievable orare contested.

Clarifying the rights context for a proposedproject is an essential step in identifyingthose legitimate claims and entitlementsthat might be affected by the proposedproject – or indeed its alternatives. It is alsothe basis for effective identification ofstakeholder groups that are entitled to aformal role in the consultative process, andeventually in negotiating project-specificagreements relating, for example, to benefitsharing, resettlement or compensation.

…and Risks

The notion of risk adds an importantdimension to understanding how, and towhat extent, a project may impact on suchrights. Traditional practice is to restrict thedefinition of risk to the risk of the developeror corporate investor in terms of capitalinvested and expected returns. Thesevoluntary risk takers have the capacity todefine the level and type of risk they wish totake and explicitly to define its boundariesand acceptability. By contrast, as the GlobalReview has shown, a far larger group oftenhave risks imposed on them involuntarilyand managed by others. Typically, they haveno say in overall water and energy policy,the choice of specific projects or in theirdesign and implementation. The risks theyface directly affect individual well-being,livelihoods, quality of life, even theirspiritual world view and very survival.

This has often led to conflict because itignores the principle that those with a

legitimate stake in a decision are best placedto assess the risks they are prepared to taketo achieve a benefit. Such conflicts areexacerbated by the absence of an agreed

Public and private developers of large dam projects have long understood thatthe sector involves managing risks of a technical, financial and even politicalnature. Decision-makers have not always acknowledged the differencesbetween ‘taking risk’ and ‘imposing risk’ and between voluntary risk takers andinvoluntary risk bearers. The private sector regards dams as high-risk projects.As ‘voluntary risk takers’, private companies manage their increased exposure torisk by requiring higher financial rates of return. Their risk managementprocedures are relatively highly developed, using contractual agreements andsophisticated third party recourse and arbitration mechanisms.

Governments and regulators plan and manage the provision of services to thenation, and therefore also take risks. They must weigh the risks inherent inundertaking dam projects against the risks of not undertaking them. There arerisks attached to other options, and to the ‘do nothing’ option, given growingdemand for power or food, and societies are constantly balancing thesedifferent risks and opportunities.

There are those, however, on whom risk is imposed. The ‘involuntary riskbearers’ who are forced to bear risks include people to be displaced by theproject. These people may face years of uncertainty and direct risks to livelihoodeven before the project is approved and before resettlement or land purchase.They may be unable to obtain finance for investments in farm infrastructure orequipment, and local government may not maintain or develop services forcommunities on the verge of displacement. The risks to displaced communitiesare compounded in cases where they have no say in the decisions but areobliged to bear the consequences. In these circumstances they often dependentirely on the capacity of government or the developer to manage theresettlement or compensation process on their behalf .

Indigenous peoples face specific cultural, social and livelihood risks. Evidencecollected by the Commission illustrates that they often bear disproportionaterisks associated with projects, as they were not included in decision-makingprocesses concerning resettlement, let alone the earlier processes of assessingneeds and selecting options. Downstream communities that depend on existingriver flows to maintain their resource base are also often not given any say indeciding the nature of projects. Yet they face the risk of losing access toresources, or having their capacity to maintain a sustainable livelihood under-mined. Often these communities do not have access to information on thenature of the risks that they face until the project is approved or completed.7

The case of future generations and the ecosystem is somewhat different. These‘risk bearers’ cannot speak for themselves, even if the risks they face areacknowledged. Future risks can be linked to present risks. The loss of naturalresources can undermine livelihood opportunities for both current and futuregenerations. Similarly, the loss of biodiversity in the present means that it iseither not available or diminished for future generations. The lower prioritygenerally accorded to these types of risks is compounded by the absence oftangible safeguards, or the failure to implement and enforce those that do exist.In such cases, as with other involuntary risk bearers, adopting a precautionaryapproach is particularly relevant in order to avoid impacts. It is also essential toidentify appropriate inputs by interested parties to the options assessmentprocess and to the planning and project cycles.

The precautionary approach articulated in the Rio principles forms part of astructured approach to the analysis of risk, and is also relevant to risk manage-ment. Decision-makers faced with scientific uncertainty and public concernshave a duty to provide answers where risks and irreversibility are consideredunacceptable by society.

Box 7.3 Voluntary risk takers and involuntary risk bearers

Chapter 7


approach and process for assessing andnegotiating acceptable project outcomes –outcomes that include rejecting a dam infavour of a more acceptable alternative.Where unequal power relationships prevailand no process for good-faith adjudicationamong competing interests exists, the resultis often protracted conflict, escalation and,eventually, ‘win-lose’ outcomes in which lessprivileged groups are further disadvantaged.This all-too-common reality points to aserious failure of the options assessment andplanning process to protect and further basichuman and development rights.

Dealing with risks cannot be reduced toconsulting actuarial tables or applying amathematical formula. In the end, as in thecase of rights and entitlements, they must beidentified, articulated and addressed explic-itly. This will require the acknowledgementof risk to be extended to a wider group thangovernments or developers in order toinclude both those affected by a project andthe environment as a public good (see Box

Independentreview andmediation

Successfulmediation and/orarbitration

Recognition of Rights and Assessment ofRisks lead to identification of stakeholders

RIGHTS RISKS

Forum established for needs and optionsassessment and project planning

No agreement leads toselection of an alternativeproject option, arbitration orjudicial review

Specific agreements arenegotiated and become part ofproject compliance framework

No consensus

Fig 7.2 From rights and risks to negotiated agreements: aframework for options assessment and project planning

7.3). Most important, involuntary riskbearers must have the legal right to engagewith risk takers in a transparent process toensure that risks and benefits are negotiatedon a more equitable basis. To that end, aframework is required that permits a trans-parent, balanced and participatory process ofdecision-making relating to key stages in theplanning process. In chapters 8 and 9 wedevelop the practical application of thisapproach in greater detail to illustrate how thiscan be achieved at the different stages ofassessment, planning and implementation.

It must, however, be stressed that not allcountries possess the full range of legal andinstitutional structures, nor sometimes thehuman and financial resources, to imple-ment such a participatory approach todecision-making effectively. It becomes,therefore, a high priority to assist thosecountries and communities to put thenecessary structures in place and to developthe necessary capacity.

Negotiating Agreementson the Basis of Rights andRisksIn its Global Review the Commissionencountered considerable experience andgood practice in implementing a rights-basedapproach, with examples from many coun-tries. It is also clear, however, that theapproach requires a legal and proceduralframework that provides for a free andinformed negotiation process. This frame-work must provide for arbitration, recourseand appeal mechanisms to ensure equitableadjudication in cases where negotiatedsettlements are not achievable.

While it is easy to point to negotiatedsolutions as the answer to sound decision-making or to avoiding dam related conflict,

209



a range of difficult challenges remains to befaced. Structuring a negotiation process thatwill lead to an optimal and widely supporteddecision on an option for water and energydevelopment involves answering threequestions:

■ Who should participate in the decision-making process?

■ What decision-making processes shouldbe followed?

■ What criteria can be applied to assess theprocess and its outcomes?

Who should participate?

The rights-and-risks approach is both anentry point to the options assessmentprocess and a basis for the subsequentdevelopment of specific project options. Therecognition of rights and the assessment ofrisk identify the interested and affectedparties who possess rights or entitlements aswell as risk takers and bearers. This opensthe way for a negotiated approach thatenables the decision-making process toassess options and reach project agreements.Those whose rights are most affected, orwhose entitlements are most threatened,have the greatest stake in the decisions thatare taken. The same applies to risk: thosegroups facing the greatest risk from thedevelopment have the greatest stake in thedecisions and, therefore, must have acorresponding place at the negotiating table.

What type of process?

This chapter has suggested that globaltrends are increasingly leading us to deci-sion-making based on transparent processes,full access for affected parties to relevantinformation, identification and empower-ment of key stakeholders, and their ade-quate participation in the decision-makingprocess. At the same time, the Commission

recognises there is no universal formula.The most appropriate decision-makingprocess will depend to an extent on the typeof development under review, the politicaland cultural setting of the development, andother constraints relating to the urgency ofthe need and the likelihood of negativeimpacts.

On the other hand a process that is toocomplex can needlessly delay decisions anddeprive potential beneficiaries of the fruitsof any of the development alternativesunder consideration. The goal must be aprocess that gives all key stakeholders avoice and a full opportunity to participate indecision-making, seeks the broadest reason-able consensus, and is transparent in thecriteria used for reaching a decision. Such aprocess is likely to ensure the demonstrablepublic acceptance that projects require ifthey are to achieve development. However,no process will work unless all of the partiesenter the negotiation in good faith. Withoutthis there is the danger that any attempt tomake the process more inclusive will end upbeing a recipe for stalemate, putting theachievement of needed benefits at risk.

Negotiated outcomes do not replace govern-ment decision-making: on the contrary, theyrest on the State actively fulfilling its role asplanner and enabler of development choic-es, as well as its responsiblity to provideservices and safeguard entitlements. When

“Good governance comprises the rule of law, effective state institutions,transparency and accountability in the management of public affairs, respect forhuman rights, and the participation of all citizens in the decisions that affecttheir lives. While there may be debates about the most appropriate forms theyshould take, there can be no disputing the importance of these principles.”

Source: Annan, 2000

Box 7.4 Good governance and the UN Millennium Report

Chapter 7


a negotiation process results in afull agreement among theparties, the government (as oneof the parties) need only en-dorse it. There will always becases, however, where a con-certed effort of all parties actingin good faith has broughtagreement closer but left itunattainable. Where independ-

ent review and mediation fail to foster anagreement, alternative options should beconsidered or the project should go toarbitration. All decisions must be takenwithin the framework set by constitutionsand national legislation as well as interna-tional conventions, and remain subject to acitizen’s right to challenge them in thecourts (see Figure 7.2).

Assessing the Process and itsOutcomes

The purpose of engaging in a participatoryprocess for decision-making is to deliverbetter decisions than would otherwiseemerge. The proof of a decision-makingprocess resides both in the process used, andin the outcomes delivered. A process may bedeemed successful if it has been, and hasbeen seen as:

■ Fair: all key stakeholders perceive theprocess and outcomes to be fair andlegitimate.

■ Wise: the process is fully-informed,making best use of available knowledge,and continuing to make best use ofknowledge over time.

■ Efficient: the process and the solution areboth cost- and time-effective, makingbest use of available resources.

■ Stable: the agreement is likely to endureand can be adapted – a sign that itmaintains its legitimacy.8

In Chapter 9, the Commission developscriteria and guidelines to illustrate how thiscan be achieved at the different stages ofassessment, planning and implementation.

ConclusionLarge dams have increasingly been charac-terised by bitter conflict and deep feelings ofresentment and injustice. Beginning tocorrect this situation will require not onlynew processes for taking decisions, butbuilding confidence in these processes andtheir ability to deliver genuinely betteroutcomes for water and energy resourcedevelopment. In seeking to build thisconfidence we do not, in many cases, beginwith a clean slate, but with a difficult legacythat needs to be recognised. This legacy canonly be overcome if there is a rapid invest-ment of confidence in the legitimacy of theprocesses that are put in place.

This Chapter has defined the interactionbetween the Commission’s findings and theglobal development debate. It has pointedout that the debate on large dams is nottaking place in isolation from the broaderdebate on the purposes and pathways ofdevelopment. It can clearly be situatedwithin a framework relating to humanrights, the right to development, and theimperative of sustainability.

Further, the Commission has sought todemonstrate that an approach based on therecognition of rights and assessment of riskscan lay the basis for greatly improved andsignificantly more legitimate decision-making on water and energy development.This is an effective way to determine whohas a legitimate place at the negotiationtable and what issues need to be included onthe agenda.

211



Finally, it has concluded that only decision-making processes based on the pursuit ofnegotiated outcomes, conducted in an openand transparent manner and inclusive of alllegitimate actors involved in the issue, arelikely to resolve the many and complex

issues surrounding dams. While presentinggreater demands at early stages of optionsassessment and project design, such process-es lead to greater clarity, certainty andlegitimacy for subsequent steps in decision-making and implementation.

Endnotes

1 The WCD received submissions from a widerange of interested parties, which have beenlisted on the WCD web site. A number ofthese were presented at the four regionalconsultations, which the Commission held inColombo, Sao Paulo, Cairo and Hanoi.

2 UN, 1947.

3 UN, 1986.

4 UNCED, 1992.

5 Recent reports summarising the implicationsof high levels of consumption on the naturalresource base include the Report of The

World Commission on Water (World Com-mission on Water in the 21st Century, 2000),the World Energy Assessment (UNDP et al,2000) and The World’s Water (Gleick, 2000).

6 An overview of this discourse can be found inSen, 1999. Current data and evolving policyframeworks for addressing poverty and equityissues have also been reviewed in the latestWorld Development Report (World Bank, 2000)which focuses on poverty and development.

7 Cernea, 2000, has developed a detailedassessment of these risks. The ‘Impoverish-ment Risk Analysis’ approach is referred to ingreater detail in Chapter 9.

8 Susskind and Cruikshank , 1989.

Strategic Priorities – A New Policy Framework


Chapter 8

Strategic Priorities –A New Policy Framework for the Developmentof Water and Energy Resources

Based on the findings of the

WCD’s Global Review this

chapter develops the Commission’s

rationale and recommendations in

the form of seven strategic priorities

and related policy principles for

future decision-making. It builds on

previous chapters, starting with

Chapter 1 which locates the dams

debate in a broader context. This

context includes the history of water

resources management and large

dams, the big increase in dam

construction during the latter half of

the 20th century, the subsequent

emergence of conflict and the issues

Chapter 8


and interests that gave rise to the establish-ment of the Commission.

Chapter 8 draws extensively on the Know-ledge Base summarised in Chapters 2 to 6which review the performance and impactsof dams, the decision-making process andthe available options for providing waterand energy services. Much of this workinvolved reviewing existing information,but the Commission also collected impor-tant new information on all aspects of damsoperation and management, especially theirsocial and environmental impacts. The widerange of consultations with affected partiesis an important contribution to knowledgeabout dams in development and develop-ment practice in general.

In Chapter 7 the Commission moved fromthe review of past experience to look atdirections for the future. The chapteraddresses the dams debate in the context ofthe wider debate on equitable and sustainabledevelopment and the corresponding frame-work of internationally accepted norms andstandards. It introduces the rights-and-risks

approach for achieving negotiated outcomes.Chapter 8 takes this forward, moving from atraditional top-down, technology focusedapproach to advocate significant innovationsin assessing options, managing existing dams,gaining public acceptance and negotiating andsharing benefits.

The Commission sets out this constructiveand innovative way forward for decision-making in the form of the seven strategicpriorities listed here and elaborated in subse-quent sections of the chapter (see Figure 8.1).

The priorities are:

■ Gaining Public Acceptance

■ Comprehensive Options Assessment

■ Addressing Existing Dams

■ Sustaining Rivers and Livelihoods

■ Recognising Entitlements and SharingBenefits

■ Ensuring Compliance

■ Sharing Rivers for Peace, Developmentand Security

A key message and a set of policy principlessupport each of the seven strategic priorities.They are expressed in the form of achievedoutcomes. A section on the rationale explainsthe Commission’s thinking on each strategicpriority and an elaboration looks at broaderissues involved in achieving the strategicpriority. These strategic priorities provideguidelines for all affected parties on a new wayforward – one that is founded on achievingequitable and sustainable developmentthrough a process that successfully integratessocial, economic and environmental consider-ations into decision-making on large dams andtheir alternatives.

Chapter 9 provides an operational approachfor applying these priorities to the planningand project cycles.

Gainingpublic

acceptance

Comprehensiveoptions

assessment

Addressingexistingdams

Sustainingrivers andlivelihoods

Recognisingentitlementsand sharing

benefits

Ensuringcompliance

Sharingrivers forpeace,

developmentand security

Equitable andsustainable

development ofwater and

energyresources

Figure 8.1 The WCD’s seven strategic priorities



Strategic Priority 1

Gaining Public Acceptance

Public acceptance of key decisions is essential for equitable and sustainable water andenergy resources development. Acceptance emerges from recognising rights, addressingrisks, and safeguarding the entitlements of all groups of affected people, particularly indig-enous and tribal peoples, women and other vulnerable groups. Decision-making processesand mechanisms are used that enable informed participation by all groups of people, andresult in the demonstrable acceptance of key decisions. Where projects affect indigenousand tribal peoples, such processes are guided by their free, prior and informed consent.

Rationale

Because of their scale and complexity, damsaffect the existing rights of different groupsand create a wide range of significant risksfor a diverse range of interest groups.Among those affected are indigenous andtribal peoples, women and other vulnerablegroups who have been shown to sufferdisproportionately. This has been com-pounded by negligible participation of thesegroups in decision-making processes, withthe result that planning processes for largedams have frequently overlooked gender andequity aspects. The vulnerability of thesegroups stems from the failure to recognise, orrespect their rights, and from the significantinvoluntary risks imposed on them.

Failure to recognise the rights of all affectedgroups, whether legally sanctioned or not,

coupled with the significant involuntary riskimposed on the most vulnerable, is centralto the dams debate and associated conflicts.

To be socially legitimate and producepositive and lasting outcomes, developmentprojects should provide forgreater involvement of allinterested parties. A fair, in-formed and transparent decision-making process, based on theacknowledgement and protectionof existing rights and entitle-ments, will give all stakeholdersthe opportunity to fully andactively participate in thedecision-making process. Insteadof exacerbating existing inequali-ties, water and energy resourcesdevelopment should be opportu-nities for achieving a high level

A fair, informed andtransparent decision-making process, basedon theacknowledgement andprotection of existingrights and entitlements,will give allstakeholders theopportunity to fully andactively participate inthe decision-makingprocess.

Key Message

Effective implementation of this strategic priority depends on applying these policy principles:

1.1 Recognition of rights and assessment of risksare the basis for the identification andinclusion of stakeholders in decision-makingon energy and water resources development.

1.2 Access to information, legal and other supportis available to all stakeholders, particularlyindigenous and tribal peoples, women andother vulnerable groups, to enable theirinformed participation in decision-makingprocesses.

1.3 Demonstrable public acceptance of all keydecisions is achieved through agreementsnegotiated in an open and transparentprocess conducted in good faith and with theinformed participation of all stakeholders.

1.4 Decisions on projects affecting indigenous andtribal peoples are guided by their free, priorand informed consent achieved throughformal and informal representative bodies.

Chapter 8


of equity. The planning process should besensitive to, and take account of, social andeconomic disparities, and devise and imple-ment mechanisms for addressing them.

Recognising indigenous and tribalpeople’s rights

International and national policy makingincreasingly recognise that historical andcontinuing wrongs committed againstindigenous and tribal peoples call fordistinct measures to protect their rights.These measures include the free, prior andinformed consent of indigenous and tribalpeoples to developments that may affectthem. To achieve this, the participation ofindigenous and tribal peoples must becomean integral part of the decision-makingprocess. This is increasingly being recog-nised in international and national law.

International legal instruments, such asConventions 107 and 169 of the Interna-tional Labour Organisation and the evolv-ing United Nations Draft Declaration on theRights of Indigenous Peoples, recognise andsupport the concept of free, prior and

informed consent. Otherorganisations reflect thistrend including the Inter-American DevelopmentBank through its operationalpolicy, which requiresinformed consent of indige-nous and tribal peoples toresettlement and compensa-

tion measures. Similar reforms are found atnational level in a number of countries.1

Through acknowledging the rights ofvulnerable groups, and providing for theirfull and active participation in the decision-making process, all the risks associated witha decision can be addressed. Requiring thefree, prior and informed consent of indige-

nous and tribal peoples empowers them atthe negotiating table.

Negotiations conducted in good faith thatlead to an agreed outcome would securewider acceptance of development policiesand projects.

Elaboration of Policy Principles

1.1 Recognition of rights and assessmentof risks are the basis for the identifica-tion and inclusion of stakeholders indecision-making on energy and waterresources development.

Water and energy resource developmentprojects can affect the existing rights ofcommunity groups in many different waysand can lead to a variety of risks. Legal andcustomary rights take many forms, includinglivelihood, resources, habitat, social net-works and cultural heritage. Recognisingthis variety makes it possible to identify therisks facing communities.

Identifying rights and risks and recognisinghow they affect different parties givesplanners an objective basis for identifyingstakeholders. These stakeholders mustparticipate fully and actively in the deci-sion-making process and be party to allnegotiated agreements throughout theprocess, from options assessment to finalimplementation, operation and monitoring.The involvement of women and othervulnerable groups in decision-making shouldbe ensured at all stages of the planning andimplementation process. There should beclear consideration for the vulnerabilitiesthat expose women to project impacts(displacement, changes in the resource baseand resulting disruptions of social and eco-nomic resources and networks) and for thespecific obstacles that reduce their opportuni-ties to share benefits generated by the project.

Identifying rights and risksand recognising how they

affect different parties givesplanners an objective basis

for identifying stakeholders.



At the needs and options assessment stage,strategic impact assessment enables identifi-cation of stakeholders. Impoverishment riskassessment conducted at the pre-feasibilitystage will enable identification of stakehold-ers bearing risk voluntarily and involuntarilyfor participation in the decision-makingprocess.

1.2 Access to information, legal andother support is available to allstakeholders, particularly indigenousand tribal peoples, women and othervulnerable groups, to enable theirinformed participation in decision-making processes.

Various stakeholders have significantlydifferent capacities to participate fully andactively in the development planningprocess. Rural communities, indigenous andtribal peoples, women and other vulnerablegroups are at a disadvantage in accessing legaland financial resources and in their capacity toparticipate in negotiating decisions.

In order for these groups to participate fullyand actively in negotiations, they needaccess to adequate resources, including legaland other professional support. Communi-ties also need sufficient time to examinevarious proposals and to consult amongstthemselves.

Resources committed to achieving theseends must target a continuing process ofcapacity building.

1.3 Demonstrable public acceptance ofall key decisions is achieved throughagreements negotiated in an openand transparent process conductedin good faith and with the informedparticipation of all stakeholders.

Participatory processes need to secure publicacceptance of plans and projects for water

and energy resources development. Toachieve mutually agreed outcomes, stake-holders should negotiate through recognisedstakeholder bodies. Public acceptance of thedecision reached by stakeholders throughthis process should guide progress at keystages in the assessment, selection, planningand implementation of the project.

The following key principles define thenature of open and transparent decision-making processes. The process:

■ is democratic, accountable and enjoyspublic confidence;

■ safeguards the rights and entitlements ofvulnerable groups by addressing imbal-ances in political power;

■ promotes women’s participation andgender equity;

■ is guided by the free, prior and informedconsent of indigenous and tribal peoples;and

■ is based on the willing participation ofall parties negotiating in good faiththroughout all key stages, from optionsassessment to final implementation,operation and monitoring.

Negotiations should result in demonstrablepublic acceptance of binding formal agree-ments among the interested parties withclear, implementable institutional arrange-ments for monitoring compliance andredressing grievances.

A stakeholder forum can facilitate thisprocess. This forum could be an existingplanning institution located at the local,sub-national and national levels. Countriesthat already have such planning institutionsmust ensure representation of rural commu-nities, indigenous and tribal peoples andother stakeholders in them. Countries

Chapter 8


without such planning institutions shouldconsider creating a stakeholder forum forthe purpose (see Chapter 9 for guidelines).

Negotiating agreementsReaching a negotiated agreement may needassistance from an agreed independent thirdparty from time to time. This assistance isbest provided through an independentdispute resolution body that:

■ is constituted with the participation andagreement of stakeholders; and

■ has the necessary skills, legal and admin-istrative capacity for this purpose.

This body should agree on a negotiatingprocess with all stakeholders at the outset.

Stakeholders should referdisagreements on any aspects ofthe negotiations to this body toexamine them and provideassistance to the parties. Thisincludes determining whetherstakeholders are negotiating ingood faith and suggesting waysof reaching a settlement.

Demonstrating public acceptance, andupholding negotiated decisions, is bestachieved through binding and formal agree-ments. They must include mechanisms forhearing and settling subsequent grievances.

The Commission recognises that coercionand violence have been used against com-munities affected by dams. All projectproponents – public and private – need tocommit to the strict prohibition of such actsof intimidation against any stakeholders.

1.4 Decisions on projects affectingindigenous and tribal peoples areguided by their free, prior andinformed consent achieved throughformal and informal representativebodies.

International law includes a body of con-ventions and customary norms that increas-ingly recognise the rights of indigenous andtribal peoples. Aspects of the national lawsof many countries now reflect contemporaryviews of indigenous rights.2

Some of these changes are a direct responseto indigenous peoples’ campaigns demand-ing social justice and development opportu-nity – including campaigns concerningdams. However, these provisions have notbeen very successful in protecting the rightsof indigenous and tribal peoples.

To the extent that historical and presentinjustices continue to deny indigenous andtribal peoples the right to self-determina-tion, countries increasingly recognise thatthey are entitled to distinct measures toprotect their rights. This recognition hasincluded prescriptions of non-discrimina-tion, cultural integrity, control over landand resources, social welfare and develop-ment and self-government.

Identification of indigenous and tribalpeoplesSeveral countries have clear laws andprocedures identifying and recognisingindigenous and tribal peoples. However, thesituation is unclear in some other countries.

At its broadest, the adjective ‘indigenous’ isapplied to any person, community or beingthat has inhabited a particular region orplace prior to colonisation. However, theterm ‘indigenous peoples’ has gained curren-cy internationally to refer more specificallyto long-resident peoples, with strong cus-tomary ties to their lands, who are dominat-ed by other elements of the national society.

The general trend in the United Nationsand other international organisations has

Demonstrating publicacceptance, and

upholding negotiateddecisions, is bestachieved through

binding and formalagreements.



been to accept that many of the so-called‘tribal peoples’ of Africa, Asia and thePacific are indistinguishable from indige-nous peoples as far as international law andstandards are concerned.3 The InternationalLabour Organisation’s (ILO) Convention169 applies to both indigenous and tribalpeoples and thus includes many suchpeoples from Asia and Africa. It ascribes thesame rights to both categories withoutdiscrimination. Article 1(2) of ILO Con-vention 169 notes: ‘Self-identification asindigenous or tribal shall be regarded as afundamental criterion for determining thegroups to which the provisions of thisConvention apply.’

In countries that do not explicitly defineindigenous and tribal peoples, the Commis-sion proposes an alternative approach foridentifying them. Several internationalorganisations and agencies have adopted orproposed this approach which uses thecriteria listed below to recognise indigenousand tribal peoples.4 In terms of this ap-proach, the requirements for free, prior andinformed consent should apply to groupsthat satisfy the following criteria:

■ Historical continuity with pre-colonialsocieties, which is determined on thebasis of the following criteria, regardlessof whether they are formally recognisedas indigenous or tribal peoples or not:

■ Subsistence oriented and naturalresource based production systems

■ Presence of customary social andpolitical institutions

■ An indigenous language, oftendifferent from the national language

■ An experience of subjugation, exclusionor discrimination, whether or not theseconditions persist.

■ Vulnerability to being disadvantaged inthe development process.

■ Close attachment to ancestral territoriesand to natural resources in such areas.

■ Self-identification as distinct from thedominant group or groups in societies,and identification by others as membersof a distinct group.

Securing free, prior and informed consentThe requirement for free, prior and in-formed consent gives indigenous and tribalcommunities the power to consent toprojects and to negotiate the conditionsunder which they can proceed. The effec-tive implementation of this practice marks asignificant step forward in recognising therights of indigenous and tribal peoples,ensuring their genuine participation indecision-making processes and securingtheir long-term benefits.

The concept of free, prior and informedconsent achieved through formal andinformal representative bodies should guidedecision-making on dams and their alterna-tives. Moreover, the Commission believesthat all countries should be guided by theconcept of free, prior and informed consent,regardless of whether it has already beenenacted into law.

Failing that, decisions should only be madefollowing a process of good faith negotia-tions that allows for the effective represen-tation of the peoples’ concerned, includinggenuine attempts to reconcile differencesthrough the mutually agreed dispute resolu-tion process, with disagreements beingreferred to a designated judicial body.

The customary laws and practices of theindigenous and tribal peoples, national lawsand international instruments will guide the

Chapter 8


manner of expressing consent. At the begin-ning of the process, the indigenous and tribalpeoples will indicate to the stake-holder forumhow they will express their consent to deci-sions. A final agreement on how to expressconsent will be reached before the start of theplanning process.



Rationale

Dams have delivered benefits to society, buthave also caused serious social and environ-mental harm. Many of the controversiesover dam projects have focused attention onwhether a dam was the most appropriateresponse to a development need or objec-tive, and whether these were correctlyidentified in the first place. In some casesproject objectives were not clearly stated,particularly in relation to broader nationaland local development goals. In others, thedecision to proceed with a dam was takenbefore considering all options or followingstrong backing from specific constituenciesthat undermined options assessment. Thisfailure to assess strategic options rigorouslyat an early stage has led to a number ofdisputes.

Often dams take a long time to come onstream, delaying the delivery of benefits.Because they are high cost investments theydivert resources and can exclude other optionsthat may be able to deliver benefits morequickly. These options includedemand side management,alternative supply side technolo-gies and improving and expandingthe performance of existingsystems. There are also some newoptions reaching the stage wherethey can compete in the market,for example renewable technolo-gies for electricity generation suchas wind and solar power.

Options assessment involves determining therelevance of individual options or a mix of


Comprehensive Options Assessment

Options assessmentinvolves determining therelevance of individualoptions or a mix ofoptions to respond todevelopment needs in aspecific location.

Alternatives to dams do often exist. To explore these alternatives, needs for water, foodand energy are assessed and objectives clearly defined. The appropriate developmentresponse is identified from a range of possible options. The selection is based on a compre-hensive and participatory assessment of the full range of policy, institutional, and technicaloptions. In the assessment process social and environmental aspects have the same signifi-cance as economic and financial factors. The options assessment process continues throughall stages of planning, project development and operations.

Key Message


2.1 Development needs and objectives areclearly formulated through an open andparticipatory process before the identifica-tion and assessment of options for waterand energy resource development.

2.2 Planning approaches that take intoaccount the full range of developmentobjectives are used to assess all policy,institutional, management, and technicaloptions before the decision is made toproceed with any programme or project.

2.3 Social and environmental aspects are giventhe same significance as technical,

economic and financial factors in assess-ing options.

2.4 Increasing the effectiveness andsustainability of existing water, irrigation,and energy systems are given priority inthe options assessment process.

2.5 If a dam is selected through such acomprehensive options assessmentprocess, social and environmentalprinciples are applied in the review andselection of options throughout thedetailed planning, design, construction,and operation phases.

Chapter 8


options to respond to develop-ment needs in a specific location.The challenge is to assess a widerrange of alternatives earlier in theprocess. Experience has shownthat this needs to be done in atransparent and participatorymanner ensuring that human,social, environmental, technical

and financial considerations get equal weightin the final decision. The increased availabili-ty of information about the expanding rangeof alternatives provides a sound base fromwhich to draw.

An early focus on options assessment willexclude most questionable projects. Thosethat emerge will enjoy wider public supportand legitimacy. It can reduce delays andadditional costs and conflicts, benefiting allthose affected by a project. In addition tosocial and environmental advantages,increased investment in options assessmentcan result in long term economic andfinancial benefits.

The outcome may not be as simple as ‘builda dam’ or ‘do not build a dam’, but could bea set of parallel and complementary inter-ventions that together meet the definedgoals. Where a large dam is selected, thereare a number of options within the projectthat can avoid, minimise and mitigateadverse social and environmental impacts.These options relate to altering the size andlocation of the project and designingappropriate operating rules.

Elaboration of the PolicyPrinciples

2.1 Development needs and objectives areclearly formulated through an openand participatory process before theidentification and assessment ofoptions for water and energy resourcedevelopment.

Strategic Priority 1 presents a new perspec-tive on identifying development needs basedon recognising rights and assessing risks. Itintegrates the planning function of govern-ments in the water and energy sectors withlocal processes to determine needs. This isconsistent with a move towards a morestrategic planning process that identifiesoptions to meet expressed needs.

National policy statements on water re-sources, agriculture, energy and the environ-ment should embody guiding principles thatfacilitate a more open process of needsassessment. Policy formulation should be aparticipatory process that lays the founda-tion for the involvement of affected groupsthroughout later stages of needs and optionsassessment.

Effective participation depends on locallyappropriate processes that define the form ofparticipation and the method for consolidat-ing needs identified at local, sub-nationaland national level. Institutions or bodiesrepresenting communities should be clearlydefined. Strategic Priority 5 discusses otherkey attributes of participation. The needsassessment will provide a framework forassessing options and linking expressedneeds to development objectives for specificbeneficiary groups.

2.2 Planning approaches that take intoaccount the full range of developmentobjectives are used to assess all policy,institutional, management, and techni-cal options before the decision is madeto proceed with any programme orproject.

Once the planning process has clearlydefined needs, development objectives andintended beneficiaries, it will need mecha-nisms to assess the appropriateness ofoptions and for the participation of stake-holder groups. Assessing options should start

An early focus onoptions assessment can

reduce delays andadditional costs and

conflicts, benefiting allthose affected by a

project.



early in the planning process and can beincorporated into master plans and sectorplans using strategic impact assessments andother planning tools. Comprehensiveoptions assessment must precede selection ofany specific development plan, whether itincludes a dam or an alternative.

The range of options being examined at theoutset will be broad and go beyond techni-cal alternatives to consider relevant policy,programme and project alternatives. Itshould also consider:

■ institutional changes and managementreforms that could influence consump-tion patterns, reduce demand, and affectthe viability of other supply options;

■ the river basin context, cumulativeimpacts and interactive effects, includingthe interaction between surface andgroundwater resources;

■ multipurpose functions of alternatives;

■ secondary local and regional develop-ment effects of alternatives;

■ subsidies that can distort comparison ofalternatives;

■ life cycle analysis to compare electricitygeneration alternatives; and

■ the gestation period required beforebenefits are delivered.

A major consideration in selecting optionsis assessing institutional capacity for imple-mentation. If capacity is weak for a particu-lar option, and strengthening measures orexternal support are not viable, then theoption should be rejected.

Multi-criteria analysis is a mechanism foroptions assessment. Selection criteria usedin the analysis must explicitly reflect howeach option affects the distribution of costs,benefits and impacts for each stakeholdergroup and how it responds to development

objectives. The reasons for rejecting optionsshould be clear to stakeholders.

2.3 Social and environmental aspects aregiven the same significance as techni-cal, economic and financial factors inassessing options.

Future decision-making must increase thesignificance of social and environmentalconsiderations, bringing them to the fore-front of the screening process as is alreadythe practice in some countries.The focus must shift from mitiga-tion and compensation to makeavoidance and minimisation ofsocial and environmental impactsfundamental criteria guidingoptions assessment. This ap-proach will give society a betterchance to set thresholds for whatis acceptable and what is not, toconsider long term priorities, and to rejectoptions that are unlikely to meet avoidanceand minimisation principles. Stakeholdersmust agree on guiding principles to mitigateand compensate for the social and environ-mental consequences of options that remainon the table before taking further decisions.

Environmental issues needing considerationinclude impacts on natural ecosystems andwater quality and the implications of thedifferent options for local, regional andtransboundary effects. For example recentresearch shows that some reservoirs emitgreenhouse gases. With climate changeemerging as a key factor in decisions onenergy options, reducing greenhouse gasemissions and maintaining climate stabilityrequires a concerted global response.

Each case is location specific and informeddecisions need an enhanced local knowl-edge base on social and environmentalfactors. Requirements include:

Avoidance andminimisation of socialand environmental impactsmust become fundamentalcriteria guiding optionsassessment.

Chapter 8


■ social and ecosystem baseline studies atan early stage to describe existing condi-tions and resource endowment;

■ determination of the relative weighting ofenvironmental and social aspects inrelation to technical, economic andfinancial aspects through an open process;

■ a strategic impact assessment to deter-mine environmental, social, health andcultural heritage impacts of alternativesand reject inappropriate alternatives atan early stage; and

■ explicit assessment of future net green-house gas emissions of a project.

2.4 Increasing the effectiveness andsustainability of existing water, irriga-tion and energy systems are givenpriority in the options assessmentprocess.

Planning must give priority to makingexisting water, irrigation, and energy systemsmore effective and sustainable before takinga decision on a new project. The potential ishighly location specific, therefore assess-ment will require detailed in-countryreviews that cut across sectoral boundariesand go beyond technical responses toinclude consideration of policy options. Themanagement of existing water and energysystems will require a more pro-active andintegrated response in order to achieve thesegains. Strategic Priority 3 covers servicesprovided by existing dam projects which area subset of existing water and energy sys-tems.

The energy sector can apply a range ofmeasures to encourage more efficientproduction, lower distribution losses andreduce consumption. Similar opportunitiesexist to use alternative supply sources andconservation measures to provide watersupplies for disadvantaged communities.

In the irrigation sector, enhancing existingsystems by fulfilling undeveloped potentialand increasing the productivity of wateroffers the best alternative to new construc-tion. However, improving existing systemsdoes not necessarily help to address theneeds of the poorest sections of society. Theoptions assessment process needs to consideralternative means to increase livelihoodopportunities and local food security. Thisshould include an objective assessment ofthe potential for local community basedprojects and other alternative or comple-mentary measures.

2.5 If a dam is selected through such acomprehensive options assessmentprocess, social and environmentalprinciples are applied in the review andselection of options throughout thedetailed planning, design, construc-tion, and operation phases.

Following a decision to proceed with a damproject, decisions must be taken to deter-mine its precise location, alignment andheight, the availability and sources ofconstruction materials, the impact of theconstruction process, the operationalcharacteristics of the proposed dam, and thedetails of water and power distributionsystems. Each of these decisions has furthersets of alternatives. The process adopted forselecting alternatives requires the samemulti-criteria approach proposed for theearlier stages of options assessment. It mustgive due prominence to social and environ-mental considerations and to participatoryprocesses for decision-making. Principlesagreed during the initial screening ofoptions remain relevant when deciding onoptions relating to the project developmentand operations phases. Strategic Priorities 1,4 and 5 provide further guidance on thesematters.



Rationale

Most large dams that will operate in the 21st

century already exist. A number of countrieshave not realised the full benefits of existinglarge dams because of:

■ incomplete investments in deliverysystems;

■ lack of integration with associatedsystems such as local and national gridsand agricultural extension services;

■ lack of equity consideration in allocationof project benefits;

■ poor maintenance; and

■ ineffective and outdated management.

In other cases, dam owners have not maderegular investments in monitoring, ongoing

maintenance, modernisation and renovationdue to institutional or financial limitations.In many settings owners have not donesystematic assessments of opportunities foroptimising or expanding facilities to im-prove the services existing dams provide.

Opportunities to improve the efficiency,environmental and social performance ofexisting dams and optimise their benefitsmust be taken. One of the most strikingfeatures is the persistence of social andenvironmental problems arising from pastprojects. Often promises of compensationand other benefits like local power supplyand social amenities for resettled and hostcommunities have not been kept. In manycases such promises were informal, making


Addressing Existing Dams

Opportunities exist to optimise benefits from many existing dams, address outstanding socialissues and strengthen environmental mitigation and restoration measures. Dams and the contextin which they operate are not seen as static over time. Benefits and impacts may be transformedby changes in water use priorities, physical and land use changes in the river basin, technologicaldevelopments, and changes in public policy expressed in environment, safety, economic andtechnical regulations. Management and operation practices must adapt continuously to changingcircumstances over the project’s life and must address outstanding social issues.

Key Message


3.1 A comprehensive post-project monitoring andevaluation process, and a system of longer-term periodic reviews of the performance,benefits, and impacts for all existing largedams are introduced.

3.2 Programmes to restore, improve and optimisebenefits from existing large dams are identi-fied and implemented. Options to considerinclude rehabilitate, modernise and upgradeequipment and facilities, optimise reservoiroperations and introduce non-structuralmeasures to improve the efficiency of deliveryand use of services.

3.3 Outstanding social issues associated withexisting large dams are identified andassessed; processes and mechanisms are

developed with affected communities toremedy them.

3.4 The effectiveness of existing environmentalmitigation measures is assessed andunanticipated impacts identified; opportuni-ties for mitigation, restoration and enhance-ment are recognised, identified and actedon.

3.5 All large dams have formalised operatingagreements with time-bound licenceperiods; where re-planning or relicensingprocesses indicate that major physicalchanges to facilities or decommissioning,may be advantageous, a full feasibility studyand environmental and social impactassessment is undertaken.

Chapter 8


compliance more difficult toachieve. Governments, industryand dam owners also recognise,often informally, that pastmistakes should not be repeated;yet they remain as an unresolvedlegacy.

The WCD Knowledge Baseprovides many examples wherethe services provided by olderdams have been restored orextended in time. In many other

cases retrofitting existing dams with moreefficient, modern equipment and controlsystems has achieved significant improve-ments in benefits, extending facilities andoptimising operations.

The recent trend to optimise reservoiroperations for new and older dams usingdecision support systems backed by moreaccurate and timely data on river flows isparticularly relevant. While opportunitiesmust be assessed on a case-by-case basis,good practice is to consider such measures as

a ‘new supply option’ where theypresent significant, cost effectiveopportunities.

Experience shows that, condi-tions permitting, this approachcan increase hydroelectricbenefits by 5 to 10% over rule-based operating criteria withoutadversely affecting other wateruses. This is a trend in Canada,

the United States and Europe where opera-tors are seeking full benefits from existingassets in response to power sector deregula-tion and competition. In some cases, opti-mising operations of a system of dams canpostpone the need for new projects. Theseexperiences are not confined to developedcountries.5

Finally, it is evident that many existingdams do not have formal operating agree-ments, licences or concessions, particularlyin the case of publicly owned irrigation andwater supply dams. Wider participation inimportant management and operationaldecisions requires clear procedures andsupporting legal mechanisms, especiallywhen such decisions transform or transferbenefits and impacts. The absence oflicences or formalised agreements removesthe opportunity for public input and ac-countability. Where they do exist, licencesand other agreements often lack clearperformance targets, limiting public partici-pation at re-licensing reviews.

3.1 A comprehensive post-project monitor-ing and evaluation process, and asystem of longer-term periodic reviewsof the performance, benefits, andimpacts for all existing large dams areintroduced.

The WCD Knowledge Base shows thathistorically, few comprehensive post-projectevaluations have taken place after thecommissioning of large dams. This applies tovirtually all regions and countries. With fewexceptions, there has been little or nomonitoring of the physical, social andenvironmental effects of dams, a necessaryinput for such evaluations. Where post-project assessments have been undertaken,they have occurred many decades afterconstruction usually with a narrow technicalfocus and little input from stakeholders.

The WCD Knowledge Base reveals thatmany unforeseen technical, social andenvironmental issues emerge during thecommissioning phase and the first few yearsof operation. More intensive monitoring,extending from the construction phasethrough the first few years of operation,followed by a comprehensive post-project

Retrofitting existingdams with more

efficient, modernequipment and control

systems has achievedsignificant

improvements inbenefits, extending

facilities andoptimising operations.



evaluation after 3 to 5 years involvingaffected stakeholders, will help to identifyand resolve many early problems. Theevaluation will encourage compliance withall commitments and provide a milestone toverify public acceptance. The first post-project evaluation should help confirm andstrategically focus the longer-term monitor-ing programmes and provide ‘lessons learnt’for future decisions about planning, designand operations of the dam.

Because the economic life of a dam mayspan many generations, it is necessary toreview the project operation periodically inlight of the needs it is intended to meet, andthe services it can provide. These periodicevaluations at intervals of 5 to 10 yearsshould be comprehensive, integrated,cumulative and adaptive. Where dams arepart of a larger river basin and regionaldevelopment scheme, the evaluationsshould take into account basin-level evalua-tions of all project and programme compo-nents linked to the dam that affect theenvironment and society (see StrategicPriority 4).

Enabling conditions for evaluations arecontext specific and measures should buildon existing capacities. For many existingdams this will be the first evaluation of thisnature and institutional resistance totransparency may need to be overcome.Licensed private sector operators may regardsome aspects of the operation as proprietarycommercial information. An essential firststep is for governments, or their regulatoryagencies, to clearly specify the requirementsfor monitoring and evaluation in theappropriate regulations, project licences andoperating agreements.

Government guidelines need to clearlydefine roles of dam owners and operators

and stakeholders who will participate in theevaluations and set out the resources andmeans for stakeholder input and interaction.Upgrading monitoring capacity will posechallenges in many countries dueto the costs and operation ofinstruments and data systems,and because agencies other thanthe dam owners and operatorsmay be involved. Clear responsi-bilities that build on existingcapacities need to be defined andfinancial resources provided.Dam operators and the agenciesinvolved should publish monitoring resultsannually, and make results freely accessibleto all stakeholders.

3.2 Programmes to restore, improve andoptimise benefits from existing largedams are identified and imple-mented. Options to consider includerehabilitate, modernise and upgradeequipment and facilities, optimisereservoir operations and include non-structural measures to improve theefficiency of delivery and use ofservices.

Many industrialised countries are focusingon rehabilitation and modernisation torestore or extend the economic life ofexisting dams. In the last decade, many damowners have implemented techniques foroptimising reservoir operations, especiallyfor dams generating electricity. They areconsidering other measures to improveperformance and safety such as increasingspillway capacity to handle higher floods,extending reservoir storage and improvingsediment flushing techniques. While newsupply options may be needed in manycountries, restoring or extending the life ofexisting dams and, where feasible, expand-ing and improving services from existingdams provide major opportunities to addressdevelopment needs.

The first post-projectevaluation shouldprovide ‘lessons learnt’for future decisionsabout planning, designand operations of thedam.

Chapter 8


The WCD Knowledge Base identified threegeneral categories of improvement:

■ modernising and upgrading equipment andcontrols, and rehabilitating or expandingfacilities associated with the dam;

■ optimising operation of existing reser-voirs including daily and seasonal waterlevels and release patterns for single ormulti-purpose uses such as flood manage-ment and hydro generation. This can bedone for a single dam, or in co-ordina-tion with other reservoirs, lakes or watercourse diversions regulating river flow ina basin; and

■ optimising the role of the dam withinthe larger system it services. For exampleoptimising the use of surface and groundwater inputs in agriculture where water isa limiting factor, or using load manage-ment practices to optimise the co-ordination of hydro generation withother energy sources.

The potential for increasing benefits from aparticular dam, or group of dams, in a basin

depends on the specific circum-stances. Opportunities in allthree areas noted above shouldbe considered. Depending onthe situation the potential maybe considerable.

Other measures have shownpotential to improve the per-formance of existing dams andthe services they provide. Forexample, experience is growingwith flushing and sluicingpractices during monsoon floods

to reduce sedimentation and restore livestorage in certain types of reservoirs. Accel-erating the pace of investment in secondaryand tertiary canal systems and drainage cansignificantly improve the productivity of

surface irrigation systems attached to largedams. Other non-structural tariff, institu-tional and management practices canimprove the efficiency of the irrigation andwater supply services provided by existingdams but will require sectoral initiativesthat may be beyond the mandate of a damoperator.

Improving performance begins with assess-ing each dam for potential gains frommodernisation, renovation, expansion oroptimisation of operations. Other gains cancome from investment in necessary hydro-logical monitoring equipment, computersoftware, and the preparation of basin andsystem-level optimisation plans.

This must be explicitly linked with theoptions assessment phases of planning,clearly showing the scope for improvementsto existing dams. The public should havethe opportunity to comment on a surveyassessing improvement opportunities for alldams. This should be followed by moredetailed assessments of the specific damswhich have potential for significantimprovements.

3.3 Outstanding social issues associatedwith existing large dams are identifiedand assessed; processes and mecha-nisms are developed with affectedcommunities to remedy them.

In all its public consultations, dam-affectedcommunities told the Commission aboutthe ongoing problems, broken promises, andhuman rights abuses associated with theinvoluntary resettlement and environmentalimpacts from dams. The WCD KnowledgeBase includes significant evidence of un-compensated losses, non-fulfilment ofpromised rehabilitation entitlements, andnon-compliance with contractual obliga-tions and national and international laws

Restoring or extendingthe life of existingdams and, where

feasible, expandingand improving services

from existing damsprovide major

opportunities toaddress development

needs.



(see Strategic Priority 6 and Chapter 9).While the Commission is not in a positionto adjudicate on these issues, it has suggest-ed ways to redress past and ongoing prob-lems associated with existing dams.

Existing international laws have articulateda legal premise for a right to remedy, orreparations which is also reflected in thenational legislative frameworks of manycountries.6 Reparation is defined as actionsor processes that remedy, repair, makeamends or compensate for past failures anddamages. Given the nature of damagesresulting from loss of land and a way of life,redress could include remedies that:

■ recognise the breach of the originalobligation and its consequences;

■ acknowledge claims;

■ assess damages;

■ assign responsibility; and

■ devise and implement remedial activitiesto repair the long-term and cumulativeimpact of these failures.

Assessing claims and making reparationsThe responsibility for initiating the processof reparation rests with government. Theaffected people may also file claims with thegovernment. In order to address reparationissues, the government should appoint anindependent committee with the participa-tion of legal experts, the dam owner, affect-ed people and other stakeholders. Thecommittee should:

■ develop criteria for assessing meritoriousclaims;

■ assess the situation and identify individu-als, families and communities fulfillingthe criteria for meritorious claims and

■ enable joint negotiations involvingadversely affected people for developingmutually agreed and legally enforceablereparation provisions.

States are at different stages indeveloping regulatory systemsand institutional capacityincluding dispute resolution andwill take different approaches toresolving this issue. However,where there are reasons to takeaction and alleviate hardshipsexperienced by the peopleaffected by dams constructed inthe past, there are two practicalways of addressing pressingproblems.

■ Opportunities to restore, improve andoptimise benefits from existing largedams and other river basin developmentsshould be used as an entry point to addressunmitigated social problems associatedwith the dams in that river basin.

■ In situations where no current develop-ments are envisaged but outstandingsocial problems related to dams exist,meritorious claims for redress should beprioritised and assessed on the followingbasis:

■ affected people file genuine claimsrelated to economic, social and culturalloses and unfulfilled promises;

■ the evidence accompanying claimsfiled shows that they continue tosuffer harm due to unmitigatedimpacts, and that the impact iscausally connected to the dam;

■ available mechanisms to resolve thecomplaint have been exhausted; and

■ the nature and extent of the harm.

Enabling conditionsTo exercise their right to seek a remedy,affected people need access to political andlegal systems and the means and ability toparticipate in prescribed ways. Affectedpeople should receive legal, professional andfinancial support to participate in the

In order to addressreparation issues, thegovernment shouldappoint anindependentcommittee with theparticipation of legalexperts, the damowner, affected peopleand otherstakeholders.

Chapter 8


assessment, negotiation and implementationstages of the reparation process.

Affected peoples must be defined accordingto actual experience of impacts as describedin Strategic Priority 5.2, and not by the

limited definition in originalproject documents and con-tracts. Further, damage fromdams may require assessment ona catchment basis extendingupstream and downstream.Damage assessments shouldinclude non-monetary losses.Reparations should be based oncommunity identification andprioritisation of needs, and

community participation in developingcompensatory and remedial strategies.

The nature of remediesRemedies can include restitution, indemnity(or compensation), and satisfaction. Restitu-tion can include stopping the damagingconduct or carrying out the original obliga-tion. Indemnity involves the payment ofmoney for losses incurred, such as paymentsto compensate for loss of assets, property,and livelihoods and a variety of remedialactions, including resettlement plans anddevelopment programmes. Satisfactionincludes other forms of reparation to addressany non-material damage, including publicacknowledgement of damage and an apology.

Responsibility for reparationsReparations may involve multiple actorsincluding states, financing institutions,international organisations, and privatecorporations. It is the State’s responsibilityto protect its citizens, including their rightto just compensation. However, internation-al organisations party to foreign investmentagreements also have obligations andresponsibilities to the rights and dutiesspecified in the UN’s declarations and

instruments. The World Bank group’sinspection panel and the InternationalFinance Corporation (IFC) / MultilateralInvestment Guarantee Agency (MIGA)office of the Compliance Advisor / Ombuds-man acknowledge the responsibilities of thefinancier to comply with specific regulatoryand operational policies governing itsoperations.

In a number of instances, efforts to assigncorporate responsibility for non-complianceor transgressions related to social andenvironmental elements of a project haveled to complaints filed in a corporation’shome country.

The roles and responsibilities of all partiesinvolved in planning, financing, buildingand operating the dam must be clearlyestablished in the process of hearing andassessing a claim by an independent com-mittee constituted by the government inconsultation with the affected people andother stakeholders.

Financing reparations and compensationWhile financing reparations may posesignificant challenges this should not nullifylegitimate claims. Priority must be given tofinancing a negotiated reparation planbefore funding new dam projects in aspecific location or river basin in a country.

Reparations can be financed with fundsfrom national, provincial, and / or localgovernment budgets, a percentage of loansand grants or a percentage on currentincome from energy and water managementprojects. Such funds could be allocated to atrust fund to benefit the community overthe long term (see Strategic Priority 6 formore information on trust funds). Throughchanges in dam operations or other means,reparations can take the form of allocations

To exercise their rightto seek a remedy,

affected people needaccess to political andlegal systems and the

means and ability toparticipate in

prescribed ways.



of non-monetary resources, including land,water, fish and access to sacred sites.

An independent committee should beempowered to collect, manage, and awardreparations. To ensure that decisions con-form to the laws of the country and tointernational laws, such committees shouldinclude legal representatives selected bygovernment and affected communities.Parties contributing to the fund should berepresented to ensure transparent use oftheir funds. Accountability of the partiesresponsible for reparation should be ensuredthrough contracts and legal recourse.

3.4 The effectiveness of existing environ-mental mitigation measures is assessedand unanticipated impacts identified;opportunities for mitigation, restora-tion and enhancement are recognised,identified and acted on.

The impact of large dams upon naturalecosystems and biodiversity is a majorconcern. In the past few decades, somecountries have made considerable invest-ments to alleviate these impacts. Wide-spread concern remains that dams elsewherecontinue to result in significant, and evenunnecessary, negative impacts on a widerange of natural ecosystems and on thepeople that depend on them. These ecosys-tems perform functions such as flood allevia-tion and yield products such as wildlife,fisheries and forest resources. They are alsoof aesthetic and cultural importance formany millions of people.7

A range of measures is available to enhanceand restore ecosystems from their man-modified state, and many are already in useworldwide. In many cases these efforts aremotivated by emergent environmentalconstraints and changing communitypriorities, as in the case of efforts to combat

increasing salinity in theMurray Darling Basin inAustralia, or the new SouthAfrica Water Act whichreallocates water rights. Atleast five countries (UnitedStates, Japan, Australia, Brazil,and France) are assessing theefficiency of existing fishpasses and recommendingimprovements to design andoperation. The design of the Mohale dam inLesotho has been modified to allow largerflows, in anticipation of the results of theenvironmental flow studies currently beingcompleted.

Many dams in the United States have alsobeen modified to allow for larger flows.Countries such as South Africa, Senegal andCameroon have introduced artificial floodreleases to maintain downstream floodplainsof value to local people. This technique isused on the Columbia River system in theUnited States to reduce problems with totaldissolved gases that can kill valuable fish.

There are a number of barriers and con-straints to overcome. Continuous monitor-ing is a prerequisite to identify and assesswhat the actual impacts are and the possibleeffect of mitigation and restoration meas-ures. Resources for implementing monitor-ing must be integrated in the project cost.Clear guidelines on environmental monitor-ing and a response to deal with impacts areneeded. Other constraints will have to beaddressed, particularly for privately devel-oped hydropower projects that involve long-term supply contracts negotiated on previ-ous release patterns. Contracts for a speci-fied time period may not anticipate orallocate responsibility for periodic changeswithin the contract period, and wouldrequire renegotiation.

Countries such asSouth Africa, Senegaland Cameroon haveintroduced artificialflood releases tomaintain downstreamfloodplains of value tolocal people.

Chapter 8


3.5 All large dams have formalised operat-ing agreements with time-boundlicence periods; where re-planning orre-licensing processes indicate thatmajor physical changes to facilities ordecommissioning may be advanta-geous, a full feasibility study andenvironmental and social impactassessment is undertaken.

Many dams, particularly irrigation and watersupply dams, do not have operating agree-ments or licences. Where they do exist theyare time-bound agreements. They generallyset out the obligations of the public agencyor private entity operating the dam, andprovide a legal basis for stakeholders toparticipate, in an open and transparentmanner, in important decisions regardingphysical changes in facilities or reservoiroperations.

Licences or operating agree-ments provide requirements forphysical, environmental andsocial impact monitoring,contingency plans, operatingstrategies, the specific require-ments for publication of moni-toring and operating results, andrequirements for the periodic

needs and performance review of existingdams noted earlier. Given the ageingpopulation of dams, safety issues requiremore attention in the form of inspections,routine monitoring, evaluations, surveil-lance systems, and regularly updated emer-gency action plans. Where practical andfeasible, it is also important to update damsto contemporary standards, especiallyregarding spillway capacity and resistance toearthquakes.

There is a trend towards formal licensing ofnew and existing dams operated by publicand private agencies. This applies particular-ly to single purpose hydropower dams and

multi-purpose dams with power compo-nents. Licences for private owners are time-bound and are reviewed at periods of 20 to40 years, or more frequently, depending onthe country’s policy and regulations. Thereare recent examples where public agenciesand private owners alike have had to applyfor licences for existing dams when newregulations were introduced. Such licencesidentify activities which the existing own-ers, including the government, need tocomply with. They range from introducingand reporting on monitoring programmes todam safety inspections. Harmonising thelicence expiry dates for all dams in a partic-ular river basin may have benefits in somecases, for example a cascade sequence ofdams where interactive effects and cumula-tive impacts are a consideration.

Where re-licensing processes are in place,decommissioning may be an option. Thisoption usually arises where a dam hasexceeded its useful life, where safety reasonsmake it less expensive to remove the damthan to rehabilitate it, or where the costs(including environmental costs) of furtheroperation outweigh the benefits. Experiencewith decommissioning is growing in NorthAmerica and Europe.8

The effects of decommissioning, particularlyon the natural environment where ecosys-tem restoration is a young science, have yetto be determined. In some cases environ-mental restoration has been well served bydecommissioning, in others negative effectshave been observed. Decommissioning oflarger dams, particularly those with a highbuild-up of sediments in the reservoir maybe problematic, especially if the dam is to beremoved and the sediments released down-stream. Removal of the dams may havemany consequences on land use in upstreamand downstream areas and on other socio-

There is a trendtowards formal

licensing of new andexisting dams operated

by public and privateagencies.



economic values and should be subjected toenvironmental, social, technical and eco-nomic assessment in the same way that newdams are.

Based on the range of issues that may surfacewith decommissioning, a feasibility studyshould be carried out to select the overallbest solution, considering economic, envi-ronmental, social and political factors.

The challenge in licensing is that manycountries have insufficient legal frameworksand there may be no consensus on theappropriate level of regulation and licens-ing. New institutional arrangements may benecessary to formalise licensing operatingagreements in many countries. At presentthe institutional responsibility for differentaspects of the operating agreement may belocated in different institutions. Anotherbarrier to overcome is that some existing

dams may not have physical provisions toaccommodate all the changes in regulationand meet all current standards.

Chapter 8


Rationale

Since the 1970s a growing understanding ofnature as the basis for long term human wellbeing has replaced the view that it is an arrayof replaceable inputs to the developmentprocess. The 1992 Earth Summit in Rio de

Janeiro, Brazil established thecritical link for all countriesbetween a healthy environmentand economic development,refuting the idea that this is only aluxury for rich countries. Subse-quently 177 countries in the worldhave accepted, approved, oracceded to the BiodiversityConvention and 122 to theRamsar Convention on Wetlands.

Rivers and catchmentsRivers and catchments are particularly impor-tant because even relatively small changes inland-use, pollution or flows can have far-reaching effects. These often extend thousandsof kilometres downstream to the deltas ofmajor rivers and even to the coastal andmarine environments. Mounting globalpressure on water resources, and the fragmen-tation by dams of 60% of the world’s rivers,makes these ecosystems an urgent globalconcern.9

Dams disrupt the existing pattern of wateruse and reallocate water to new uses. Wherewater is abundant, or where few peopledepend on fish, floodplains or deltas for


Sustaining Rivers and Livelihoods

The 1992 Earth Summitin Brazil established the

critical link for allcountries between a

healthy environment andeconomic development,

refuting the idea that thisis only a luxury for rich

countries.

4.1 A basin-wide understanding of theecosystem’s functions, values and require-ments, and how community livelihoodsdepend on and influence them, is requiredbefore decisions on development optionsare made.

4.2 Decisions value ecosystems, social andhealth issues as an integral part of projectand river basin development and prioritiseavoidance of impacts in accordance with aprecautionary approach.

4.3 A national policy is developed for maintain-ing selected rivers with high ecosystemfunctions and values in their natural state.

Rivers, watersheds and aquatic ecosystems are the biological engines of the planet. They arethe basis for life and the livelihoods of local communities. Dams transform landscapes andcreate risks of irreversible impacts. Understanding, protecting and restoring ecosystems atriver basin level is essential to foster equitable human development and the welfare of allspecies. Options assessment and decision-making around river development prioritises theavoidance of impacts, followed by the minimisation and mitigation of harm to the health andintegrity of the river system. Avoiding impacts through good site selection and projectdesign is a priority. Releasing tailor-made environmental flows can help maintain downstreamecosystems and the communities that depend on them.

Key Message

When reviewing alternative locations fordams on undeveloped rivers, priority is givento locations on tributaries.

4.4 Project options are selected that avoidsignificant impacts on threatened andendangered species. When impacts cannotbe avoided viable compensation measuresare put in place that will result in a net gainfor the species within the region.

4.5 Large dams provide for releasing environ-mental flows to help maintain downstreamecosystem integrity and communitylivelihoods and are designed, modified andoperated accordingly.




their livelihoods, this process can oftenproceed smoothly. Where water is scarce,heavily used or supports economically orsocially important ecosystems, this redistri-bution can lead to irreversible impacts,losses, inequities and conflicts. Changes toriver flow, leaching of toxic elements fromthe reservoir bottom, and the creation ofnew habitats for disease vectors in slowflowing irrigation and drainage canals canall impact negatively on human and ecologi-cal health.

Equitable water useRiver water is a common resource thatshould serve the good of all riverine inhabit-ants and the environment in an equitableand sustainable manner. Water reallocationthrough dams should explicitly take accountof existing uses, and of the species andecosystems the water supports. Many of thebroader values that rivers provide are toooften ignored in project planning andappraisal. The natural resources associatedwith rivers directly support natural habitatsand the livelihoods and cultural values ofmillions of people worldwide. Rivers mayalso hold deep spiritual meaning for commu-nities and societies.

The State must use effective mechanisms forsharing the available water between users,bearing in mind the balance betweendifferent uses – irrigation, water supply,power generation, and ecosystem – and thelivelihood and quality of life needs ofriverine communities.

The construction and operation of manylarge dams have had significant, and oftenirreversible, effects on many rivers, riverineecosystems and communities. These activi-ties threaten the sustainability of theunderlying ecological processes that main-tain habitat and biodiversity. Countries that

have ratified the Convention on Biodiversi-ty and the Ramsar Convention on Wetlandscan use the provisions and guidance of theseconventions to assist in meeting sustainabil-ity objectives.

Weighing negative and positive impactsDams can reduce the risks of flooding.However, especially in many developingcountries, reduced flooding may also in-crease risks for local people by adverselyaffecting downstream fisheries, grazing andcrop production. In all cases, negativeeconomic and social impacts must beweighed equally against positive impacts.

In the past, dam construction has causedenvironmental damage due to poor assess-ments, vested interests, lack of knowledge,lack of enforcement of mitigation measures,lack of sufficient resources, lack of ongoingmonitoring or ignorance of ecosystemfunctions. Research will contin-ue to improve knowledge andunderstanding of ecosystemcomplexity. However it isdifficult to mitigate all ecosys-tem impacts and ecosystemresponses are rarely fully pre-dictable. A multi-layeredapproach is needed that priori-tises avoidance, especially insensitive areas, and has in-builtchecks that adapt and respond to observedecosystem changes.

The policy principles presented here providea framework for the range of measuresneeded to ensure protection and health ofecosystems in planning, construction andoperation of dams and their alternatives. Nosingle principle can be fully effective inisolation from the others nor can a singleministry or agency be responsible for them all.Ecosystem issues are best addressed through a

The natural resourcesassociated with riversdirectly support naturalhabitats and thelivelihoods and culturalvalues of millions ofpeople worldwide.

Chapter 8


holistic view of the river, with all actorsincorporating an ecosystem approach intotheir planning, operations and monitoring.


4.1 A basin-wide understanding of theecosystem’s functions, values andrequirements, and how communitylivelihoods depend on and influencethem, is required before decisions ondevelopment options are made.

The river basin is the natural geographicalunit to assess impacts on ecosystems andlivelihoods.

Effective avoidance,minimisation and mitiga-tion of negative environ-mental impacts from largedams and their alternativesrequire good baselineinformation and scientificknowledge of the riverineecosystem, gathered overseveral years. The flow ofwater links riverine ecosys-tems, establishing a contin-

uum from the top of the catchment to theocean. Upstream water resource develop-ments cannot be separated from theirdownstream implications.

Considering the ecosystemTherefore, project proponents must assessthe ecosystem consequences of the cumula-tive impact of dams, dam induced develop-ments and other options along the fulllength of the river reaching as far as thedelta, even where this extends into neigh-bouring provinces or countries. Where theresources of riparian communities could benegatively affected they should be consultedon the proposal before decisions are made(see Strategic Priorities 5 and 7).

4.2 Decisions value ecosystems, socialand health issues as an integral partof project and river basin develop-ment and prioritise avoidance ofimpacts in accordance with a precau-tionary approach.

Large dam projects have frequently incorpo-rated environmental and social considera-tions too late in project planning to allowtheir full integration into project choice anddesign. Environmental Impact Assessments(EIA) are often seen simply as an obstacle tobe overcome in getting clearance andapproval for the project. Consultants andagencies involved in planning should focuson ecosystem, social and health issues at thesame time that economic and technicalstudies for options assessment begin. Planningteams should explicitly incorporate ecosystem,health and social findings in the final choiceof project through multi-criteria analysis.

Strategic impact assessment during theoptions assessment stage should includeindependent and comprehensive assessmentof ecosystem, social and health impacts andevaluation of any cumulative or inter-basinimpacts. An independent panel could beused to support impact assessment.

Alternatives to large dams are frequentlyavailable, and negative impacts of large damprojects vary hugely due to site selectionand the design of elements such as itsheight, intakes, outlets and gates. By delib-erately setting out to avoid projects with themost serious and damaging negative im-pacts, project outcomes will prove moresustainable and acceptable in future.

The precautionary approachThe precautionary approach requires Statesand water development proponents toexercise caution when information isuncertain, unreliable, or inadequate and

The flow of water linksriverine ecosystems,

establishing a continuumfrom the top of the

catchment to the ocean.Upstream water resourcedevelopments cannot be

separated from theirdownstream implications.



when the negative impacts of actions on theenvironment, human livelihoods, or healthare potentially irreversible. It thereforeforms part of a structured approach to theanalysis of risks arising from water and otherdevelopment proposals. The precautionaryapproach is also relevant to risk manage-ment. Determining what is an acceptablelevel of risk should be undertaken through acollective political process. The processshould avoid unwarranted recourse to theprecautionary approach when this canoverly delay decision-making. However,decision-makers faced with scientific uncer-tainty and public concerns have a duty to findanswers as long as the risks and irreversibilityare considered unacceptable to society.

A precautionary approach therefore entailsimproving the information base, performingrisk analysis, establishing precautionarythresholds of unacceptable impacts and risk,and not taking actions with severe orirreversible impacts until adequate informa-tion is available, or until the risk or irrevers-ibility can be reduced, making outcomesmore predictable. Normally the burden ofproof will be on the developer.

4.3 A national policy is developed formaintaining selected rivers with highecosystem functions and values intheir natural state. When reviewingalternative locations for dams onundeveloped rivers, priority is givento locations on tributaries.

States should have a policy that excludesmajor intervention on selected rivers topreserve a proportion of their aquatic andriverine ecosystems in a natural state. Thepolicy should be an integral part of theoverall national water policy.

A growing number of countries have re-sponded to increasing development pressure

on rivers by setting aside certain reaches, orentire rivers, from development. For exam-ple, by 1998 the United States had designat-ed 154 rivers under the ‘Wild and ScenicRivers Act’, covering 17 200 km of a total5.6 million kilometres of rivers in thecountry. Sweden has set aside four entirerivers from hydropower development, andNorway has ‘protected’ 35 % of its hydro-power potential from development. Zimba-bwe has passed similar legislation for riverspecific protection orders. President KimDae Jung of Korea cancelled adam on the Tong River in June2000 and declared the areaprotected for its natural andcultural values.

This approach helps to recon-cile development of thenatural resource base with the need tomaintain genetic diversity as a potentialresource for human development in fieldslike medicine. It also respects the intrinsicvalue of rivers. To put this policy intopractice, the State, appropriate researchinstitutions, communities and NGOs mustgather the essential baseline information toinform the policy from a holistic nationalperspective. Gathering this informationallows the country to select the least envi-ronmentally damaging options wheneverdams emerge as the best option in theplanning process. It enables the country tocombine river development with riverprotection, achieving a balanced outcomethat satisfies the objective of sustainabledevelopment at national and local levels.

Floodplain ecosystems and migratory fish arefrequently associated with the lower stretch-es of the main-stems of rivers and theirdeltas. They are often particularly importantresources for local people, especially in

Determining what is anacceptable level of riskshould be undertakenthrough a collectivepolitical process.

Chapter 8


developing countries. In many cases main-stem dams have negatively affected thealready fragile livelihoods of downstreamriverine communities. Priority under thepolicy should therefore be given to alterna-tive sites on the tributaries where impactsare likely to be less than on the main-stem.

4.4 Project options are selected thatavoid significant impacts on threat-ened and endangered species. Whenimpacts cannot be avoided viablecompensation measures are put inplace that will result in a net gain forthe species within the region.

Too often, planned measures to mitigateimpacts on threatened or endangeredspecies have been inadequate. Failure istypically due either to insufficient knowl-edge and understanding of the ecosystems

concerned, inadequate plans,or lack of institutional andregulatory capacity toenforce environmentalmitigating measures.

Dam proponents have oftenover-confidently assumedthat mitigation measures willwork, rather than making

them work. Responsibility for their imple-mentation may be spread across manyactors. This situation has contributed to asignificant increase in the rate of extinctionof species sharing our planet.

Respecting international guidelines toreduce impactsGovernments have often agreed interna-tional guidelines on environmental issues,yet the record of implementation is poor.The existing international conventionscontain agreed legal provisions for biodiver-sity protection and sustainable developmentissues, including measures for conserving thebiodiversity of inland waters, assessing the

international importance of wetlands ordeveloping national wetland policies. MostStates have ratified the UN Convention onBiological Diversity and the Ramsar Con-vention on Wetlands and they shouldurgently apply their guidelines. This willhelp to avoid negative impacts on rare andthreatened species. States that have not yetratified the Conventions are encouraged todo so, and in the meantime to respect theirprovisions.

Compensation plansWhere significant impacts on threatened orendangered species are considered unavoida-ble, after exhausting other water and energyoptions and other dam project options,project authorities should put in place acredible and monitored compensation plan.This should ensure that the populationstatus of the species within the region showsa net gain that adequately compensates forloss of habitat to the project. Such compen-sation can include protecting other habitats,restoring the species in other locations andcaptive breeding programmes. The projectauthorities will finance compensation as anintegral part of project costs for the life spanof the project. If monitoring indicatescompensation is not effective, then addi-tional measures will be required.

4.5 Large dams provide for releasingenvironmental flows to help maintaindownstream ecosystem integrity andcommunity livelihoods and aredesigned, modified and operatedaccordingly.

Dam owners have often viewed releasingwater from a dam for purposes other thanpower generation or water supply as a wasteof a valuable resource. Some agencies havedeclared it their aim to prevent a single dropof water from reaching the sea. Yet twenty-nine countries use environmental flowreleases (EFR) from dams to maintain a

The project authoritieswill finance

compensation as anintegral part of project

costs for the life span ofthe project.



sustainable balance between the purpose ofthe dam and the needs of downstreamecosystems and resource users. Elevencountries are considering implementingEFRs.10 This reflects the growing realisationthat water and rivers support many complexprocesses that must be maintained toachieve sustainable development. Damsshould now be specifically designed torelease the necessary flow of good qualitywater. Targeting particular ecosystemoutcomes increasingly results in flow releas-es that go beyond the historical notion of a‘minimum release’, often arbitrarily fixed at10% of mean annual flow. A minimumrelease may serve to keep the river wet but itmay not be an ecologically effective meas-ure.

Where downstream livelihoods depend onfloodplains the release may take the form ofa managed flood. Senegal, South Africa andCameroon all operate dams to flood valua-ble downstream floodplains that benefitrural communities. These managed floodsmaintain hundreds of thousands of hectaresof grazing land and important fisheries.

Legal measures are often required to enableimplementation of environmental flows.One example is the new South AfricanWater Act. This Act recognises that theultimate aim of water resource managementis to achieve sustainability for the benefit ofall users and that the protection of thequality and quantity of water resources is

necessary to ensure sustaina-bility of the nation’s waterresources. Therefore the Actdesignates a ‘reserve’ thatmust be identified before anyauthorisation of waterabstraction for other purpos-es. This basic reserve con-tains the minimum quantityand quality of water requiredto satisfy basic human needs,protect aquatic ecosystemsand secure the sustainable development anduse of the water resource in question. TheAct opens the way to establishing theenvironmental flows required to maintainecosystems.

Locally driven processes toestablish the objectives of envi-ronmental flows will lead toimproved and sustainable out-comes for rivers, ecosystems andthe riverine communities thatdepend on them. Ecosystemresponses to dam operatingregimes are variable, so damowners should undertake regularmonitoring and a five yearlyevaluation of environmentalperformance. This evaluationshould inform modification ofenvironmental flows where necessary (seeChapter 9).

Locally drivenprocesses to establishthe objectives ofenvironmental flowswill lead to improvedand sustainableoutcomes for rivers,ecosystems and theriverine communitiesthat depend on them.

Chapter 8



Recognising Entitlements and Sharing Benefits

Rationale

In the past, dams have displaced peoplefrom their habitats and livelihoods withoutgiving them any control over alternatives.Besides those whose land and homes wereinundated, the adversely affected peopleincluded natural resource dependent river-ine communities living upstream and

downstream of the dam and inother affected areas. Becausesome groups were not recognisedas affected, the number ofadversely affected people hasbeen underestimated. Non-recognition, or partial recogni-tion, of the entitlements ofthose identified as affected hasresulted in inadequate restitu-

tion for losses. As a result dam projects haveoften impoverished adversely affectedpeople.

A negotiated process to identify thoseaffected and develop legally enforceablemitigation and development measuresdepends on a number of enabling condi-tions. Adversely affected people need toshow acceptance of the dam project byconsenting to the process and to the mitiga-tion and development measures. Thesemeasures should include a share in projectbenefits and redress and recourse mecha-nisms.

The policy principles in this strategicpriority relate closely to those in StrategicPriority 1 and Strategic Priority 4 and should

5.1 Recognition of rights and assessment ofrisks is the basis for identification andinclusion of adversely affectedstakeholders in joint negotiations onmitigation, resettlement and developmentrelated decision-making.

5.2 Impact assessment includes all people inthe reservoir, upstream, downstream and incatchment areas whose properties,livelihoods and non-material resources areaffected. It also includes those affected bydam related infrastructure such as canals,

Joint negotiations with adversely affected people result in mutually agreed and legallyenforceable mitigation and development provisions. These provisions recognise entitlementsthat improve livelihoods and quality of life, and affected people are beneficiaries of theproject. Successful mitigation, resettlement and development are fundamental commitmentsand responsibilities of the State and the developer. They bear the onus to satisfy all affectedpeople that moving from their current context and resources will improve their livelihoods.Accountability of responsible parties to agreed mitigation, resettlement and developmentprovisions is ensured through legal means, such as contracts, and through accessible legalrecourse at national and international level.

Key Message

transmission lines and resettlementdevelopments.

5.3 All recognised adversely affected peoplenegotiate mutually agreed, formal andlegally enforceable mitigation, resettle-ment and development entitlements.

5.4 Adversely affected people are recognisedas first among the beneficiaries of theproject. Mutually agreed and legallyprotected benefit sharing mechanisms arenegotiated to ensure implementation.


Recognition of rights isan important element

in establishing theexisting entitlements of

adversely affectedpeople at various

locations.



be read in conjunction with those strategicpriorities.


5.1 Recognition of rights and assessmentof risks is the basis for identificationand inclusion of adversely affectedstakeholders in joint negotiations onmitigation, resettlement and develop-ment related decision-making.

Recognition of rights is an important elementin establishing the existing entitlements ofadversely affected people at various locations.Existing entitlements are the basis for negoti-ating new entitlements. The project processrecognises a range of entitlements includingthe entitlement of affected parties to:

■ participate in negotiating the outcomesof the options assessment process;

■ participate in negotiating the implemen-tation of the preferred option and

■ negotiate the nature and components ofmitigation and development entitlements.

Comprehensive assessment of the natureand extent of risks implied by a projectallows for accurate assessment of the socio-economic conditions and the cultural contextof the potentially affected people. The socio-economic, cultural, political and healthimpacts must be identified through a numberof assessment methods such as Social ImpactAssessment (SIA), Health Impact Assessment(HIA), impoverishment risk analysis andcultural heritage impact assessment withactive participation of the affected people.

5.2 Impact Assessment includes all peoplein the reservoir, upstream, downstreamand in catchment areas whose proper-ties, livelihoods and non-materialresources are affected. It also includesthose affected by dam related infra-structure such as canals, transmissionlines and resettlement developments.

The impact assessment studies must identifyand delineate various categories of adverselyaffected people in terms of the nature andextent of their rights, losses and risks. Socio-economic, demographic and health bench-mark surveys of all adversely affectedpopulations must be completed and publiclyreviewed prior to drafting mitigation,resettlement and development plans.

This process will facilitate assessment of theactual magnitude, spread and complexity ofimpacts and implications for people depend-ent on riverine ecosystems. This signals adeparture from the way that social impactswere assessed in the past and will empowerthe planners and stakeholders to incorporatethe full extent of social impacts and losses inthe decision-making process. It will achievea holistic approach to social impacts arisingfrom dams and their infrastructure in riverbasin contexts. Such an approach is applica-ble to all options, dams and their alterna-tives, and will create a level playing field inthe options assessment process.

5.3 All recognised adversely affectedpeople negotiate mutually agreed,formal and legally enforceable mitiga-tion, resettlement and developmententitlements.

In order to enable all categories of affectedpeople identified in 5.2 to regain andimprove their livelihoods and welfare,mitigation and resettlement measures shouldbe considered as a development opportunityfocusing on a number of fundamental inputs:

■ compensation for lost assets throughreplacement, substitution, cash andallowances;

■ livelihood restoration and enhancementin the form of land-for-land options;

■ sustainable non-agricultural employmentand other measures;

Chapter 8


■ a share in project benefits and otherdevelopment measures; and

■ access to primary services such as school-ing and health care.

For compensation to create effective newentitlements, customary and legal rights,and the future value of land and commonproperty resources must all be acknowl-edged. To reach agreement and preventfuture disputes, a transparent and legallyenforceable mechanism must exist to

calculate the replacementvalue of all affected assets. Tocheck against under-valuationof assets, the date for calculat-ing the value of assets mustmatch the date of payment.

In the past, cash compensationhas proved ineffective in re-creating lost assets and oppor-tunities in less monetised

economies and should be avoided. Wherepeople prefer cash compensation, it must bepaid with adequate safeguards that enhancelong term livelihood sustainability. Regain-ing lost livelihood requires adequate leadtime and preparation and therefore peoplemust be fully compensated before relocationfrom their land, house or livelihood base. Ifcompensation payment is delayed, intereston the compensation amount must be paidto account for inflation

Agreeing on mitigation, resettlement anddevelopmentMutually agreed mitigation, resettlementand development provisions should beprepared jointly with the participation of allaffected people, government and the devel-oper. Sustainable mitigation, resettlementand development provisions and opportuni-ties include:

■ resettlement with land-for-land, sustain-able non-agricultural employment and /or other development provisions;

■ resettlement as a community or viablesocial unit;

■ resettlement close to the original habitatfor effective community recovery;

■ protection against land alienation tosecure negotiated entitlements; and

■ other livelihood support measuresincluding: agricultural support; access toforests, grazing lands and other commonresources; access to livelihood resourcesfor all adult members including women;and livelihood resources with the poten-tial to sustain future generations.

Implementing a mitigation, resettlementand development planStakeholders must set up a high level multi-stakeholder committee representing govern-ment, the developer and affected communi-ties. The committee will be responsible fordirecting implementation of the mitigation,resettlement and development programmeand will serve as an appeals forum to hearcomplaints and resolve disputes. A Mitiga-tion, Resettlement and DevelopmentAction Plan (MRDAP) accepted by theaffected people should be formalisedthrough two legally binding contractualagreements.

■ a master contract that outlines theobligations of government and thedeveloper to carry out the actions set outin the MRDAP in time and to the fullextent. The master contract will alsospecify penalties, incentives and reme-dies to facilitate compliance by govern-ment and the developer. The financialand other resources to fully comply withthe MRDAP have to be secured prior tosigning the master contract.

Regaining lost livelihoodrequires adequate lead

time and preparation andtherefore people mustbe fully compensated

before relocation fromtheir land, house or

livelihood base.



■ performance contracts jointly signed bygovernment and the developer withindividual families and the communityspecifying entitlements (compensation,resettlement where necessary and directbenefits from the project), deliveryschedule, and recourse procedures.

In order to guarantee implementation, aperformance bond should be considered aspart of the master contract in the case ofprivate sector developers. See Policy Princi-ple 6.2 under Strategic Priority 6 for adiscussion of performance bonds.

While the high level multi-stakeholdercommittee will carry out preliminary disputeresolution and grievance redress functions,the master and performance contracts aremeant to empower communities and fami-lies to seek redress from courts within thecountry as a final resort.

The contracts signed before constructionstarts remain in effect through the operationphase. Signing of master and performancecontracts, and demonstration by govern-ment and the developer of their capacity tofulfil their respective commitments signifiesconsent by the affected people to move theproject from the design stage to the con-struction stage.

5.4 Adversely affected people arerecognised as first among the benefi-ciaries of the project. Mutuallyagreed and legally protected benefitsharing mechanisms are negotiatedto ensure implementation.

People adversely affected by a dam projectshould be the first to benefit from theproject. Appropriate mechanisms should beintroduced to ensure equitable distributionof development opportunities generated bythe dam.

The benefits could be related toproject finance, reservoir construction,operation, downstream release andrevenue sharing. The benefits undereach category are elaborated in theGuideline 20 in Chapter 9. Examples ofopportunities include preferential fishingrights on reservoirs, land in the irrigationcommand area, rights to draw downlands, equity shares, rural electrificationfrom power generated, ownership oftourist facilities, custodian-ship overwildlife and other natural resources.11

The adversely affected people shouldparticipate in the identification, selec-tion, distribution and delivery of bene-fits. The adversely affected people,government and the developer / finan-cier should assess and agree on the levelof benefits. As a general principle, thelevel of benefits should be sufficient toinduce demonstrable improvements in thestandard of living of the affected people.

All categories of affected people - displacedand those located upstream, surrounding thearea of the reservoir, downstream of the damand host communities for resettlement shouldbe considered eligible in principle. They couldbenefit in varying degrees, or they couldbenefit equally, depending on the extent ofrisk the dam poses to their livelihoods.

Benefits could be the in the form of communi-ty assets or services; and could be individualand household focused. Once the stakeholdershave agreed on the type and level of benefits,they need to decide on delivery mechanismsand timing. Commitments on benefits fromthe project should form part of the perform-ance contracts with affected families and thecommunity.

Chapter 8


Rationale

Governments and other stakeholders needto be satisfied that once informed decisionsare made, all parties will ensure that they

monitor and comply withobligations throughout the lifeof a project. While there aregood examples of the develop-ment of innovative complianceguidelines, the WCD Knowl-edge Base demonstrates failureon the part of developers andothers to fulfil all voluntary andmandatory obligations for theassessment and implementationof approved projects. As noted

in the Global Review, the failure to complywith obligations has led to impoverishment

of affected peoples, under-performance andenvironmental degradation resulting inlegitimate criticism and a serious breakdownin stakeholder trust and confidence in theprocess, implementation, and outcomes ofdecision-making.

Many States and international financinginstitutions have comprehensive policies,criteria and guidelines for implementing adam project once the decision to build istaken. In the case of technical requirements,the contracting process clearly lays out theresponsibilities, tasks, monitoring tools,indicators, rewards and penalties associatedwith contract implementation. Contractstypically provide for a penalty or bonus forlate or timely completion and the posting of

Strategic Priority 6Ensuring Compliance

Governments and otherstakeholders need to be

satisfied that onceinformed decisions are

made, all parties willensure that they monitor

and comply withobligations throughout

the life of a project.

Ensuring public trust and confidence requires that governments, developers, regulators andoperators meet all commitments made for the planning, implementation and operation ofdams. Compliance with applicable regulations, criteria and guidelines, and project-specificnegotiated agreements is secured at all critical stages in project planning and implementa-tion. A set of mutually reinforcing incentives and mechanisms is required for social, environ-mental and technical measures. These should involve an appropriate mix of regulatory andnon-regulatory measures, incorporating incentives and sanctions. Regulatory and compli-ance frameworks use incentives and sanctions to ensure effectiveness where flexibility isneeded to accommodate changing circumstances.

Key Message


6.1 A clear, consistent and common set ofcriteria and guidelines to ensure compli-ance is adopted by sponsoring, contract-ing and financing institutions andcompliance is subject to independent andtransparent review.

6.2 A Compliance Plan is prepared for eachproject prior to commencement, spellingout how compliance will be achieved withrelevant criteria and guidelines andspecifying binding arrangements forproject-specific technical, social andenvironmental commitments.

6.3 Costs for establishing compliancemechanisms and related institutionalcapacity, and their effective application,are built into the project budget.

6.4 Corrupt practices are avoided throughenforcement of legislation, voluntaryintegrity pacts, debarment and otherinstruments.

6.5 Incentives that reward project proponentsfor abiding by criteria and guidelines aredeveloped by public and private financialinstitutions.



a performance bond by the general contrac-tor for the site.

Resettlement, environmental mitigationand compensation are rarely, if ever, subjectto such rigorous design processes andcontractual terms. Often, these activities arecarried out by government ministries oragencies and are not covered by contractualobligations. Where they exist, contracts forsocial and environmental programmes areoriented towards task completion, withoutany rewards or penalties related to compli-ance with relevant criteria and guidelines.Where resettlement numbers are underesti-mated, there may be no clarity on whichagency or firm – aside from government – isresponsible. When funds are not available forprogramme completion, or there is a lack ofaccountability, failure to resolve outstandingsettlement cases has led to long-standingproblems with displaced groups.

Trust and confidence in the capacity andcommitment to meet obligations must berestored if new projects are to create morepositive development outcomes and avoid thelevel of conflict that has occurred in the past.This requires the formation of new relation-ships and new and more effective means ofensuring compliance.


6.1. A clear, consistent and common set ofcriteria and guidelines to ensurecompliance is adopted by sponsoring,contracting and financing institutionsand compliance is subject to independ-ent and transparent review.

All project participants, including govern-ment agencies, multilateral, bilateral andcommercial financing institutions, privatesector developers and NGOs should adopt aclear set of criteria and guidelines for

developing water and energyresources. This will provide aframework for assessing compli-ance internally and externallyand demonstrating compliancein a transparent manner tostakeholders.

There are already many excellentsets of criteria and guidelines forplanning, project assessment,project construction and opera-tions. The WCD Criteria andGuidelines elaborated in Chap-ter 9 are not intended to be exhaustive.Rather they provide a set of conditions thatmust be fulfilled to restore the level of trustand confidence in the project process.

The first step is to ensure that each particu-lar project participant makes a bindingcommitment to the criteria and guidelinesthat apply to them. This should includegovernment agencies, bilateral and multilat-eral financing institutions, private sectordevelopers and NGOs. In the case ofgovernment agencies, this may involveincorporating particular criteria into theregulatory frameworks, operational proceduresand staff guidelines. For private sector devel-opers this may involve obtaining certification,adopting internal practices and procedures,establishing codes of conduct or entering intointegrity pacts, to ensure compliance with bestsocial and environmental practice.

Ideally, participants should not only acceptthe WCD recommendations, but alsoharmonise their criteria and guidelines withthose of other bodies. Not every detail needsto be the same, but all project participantsshould use common parameters. For exam-ple, different international financing agen-cies or national and provincial authoritiescan harmonise their criteria and guidelines.

All project participants,including governmentagencies, multilateral,bilateral and commercialfinancing institutions,private sectordevelopers and NGOsshould adopt a clear setof criteria and guidelinesfor developing water andenergy resources.

Chapter 8


By harmonising the criteria they employ forsocial and environmental management,multi-lateral and bilateral financiers, includ-ing Export Credit Agencies, will preventdevelopers from turning to financiers withweak guidelines to fund unacceptableprojects. Project participants will reduceneedless duplication of effort by employing astandard set of guidelines and tools such asstrategic impact assessment and environmen-tal impact assessment to bring projects todecision points in a more timely and less costlymanner.

Ensuring compliance with criteria andguidelinesProject participants, in particular govern-ment and developers will have to show thatthey have lived up to their commitments inorder to restore trust and confidence in theprocess. An external review process involv-ing an Independent Review Panel could bethe best way to achieve this (see Guideline22 in Chapter 9). Advancing the use of suchpanels will require:

■ establishing an accredited list of expertsthrough a multi-stakeholder advisorygroup;

■ giving such panels the power to invokethe ‘stop lights’ that the CompliancePlan will establish; and

■ ensuring information from the independ-ent panel is available to the public.

Another mechanism that can be used eitherwith, or separate from, an IndependentReview Panel is independent certification.To obtain certification, participants mustshow they conform with internationalstandards for practices and proceduresthrough regular monitoring and review byan accredited external body.

This has a number of potential practicalmanifestations in the case of dams. These

include the development of a stewardshipcouncil on dams or the development of anInternational Organisation for Standardiza-tion (ISO) standard for dam management .

In recent years the Forestry StewardshipCouncil (FSC) has made rapid progress oncertification in the forest products industry.The FSC has the capacity to influencebehaviour through the certification of aninternationally traded product.

Advancing the systematic management ofdams-related impacts through existingrecognised international standards, such asthe ISO, has the distinct advantage oftapping into an existing and long-standinginternational structure and network. TheCommission encourages industry, andparticularly dam operators, to adopt ISO14001 within a broader compliance frame-work that includes performance bonds,integrity pacts, and other tools.12 ISO-basedstandards such as the ISO 9000 and 14000series could be supplemented by a sectorspecific technical specification document fordams, incorporating the Commission’s finalrecommendations and guidelines.

This would require agreement and effort onthe part of industry, multilateral banks,NGOs and affected peoples groups, togetherwith willingness on the part of the ISO todevelop the specification (see recommenda-tion in Chapter 10). The development of aninternational certification system based onthe Commission’s report cannot replace theintegration of its guidelines into nationalregulatory frameworks by governments. Itshould be seen as a complementary ap-proach, not as an alternative. It wouldencourage the private sector to promote andadapt standard voluntary codes of conductincreasingly required in today’s competitivemarkets.



6.2. A Compliance Plan is prepared foreach project prior to commencement,spelling out how compliance will beachieved with relevant criteria andguidelines and specifying bindingarrangements for project-specifictechnical, social and environmentalcommitments.

Different States are at different stages indeveloping regulatory systems and institu-tional capacity and their systems will evolveto reflect their particular circumstances. Thenature of existing systems will influence therange of compliance measures available.How these measures interrelate to achieve asatisfactory compliance package will need tobe determined on a case by case basis.

An overarching Compliance Plan is the bestway to ensure that compliance activities andmeasures are effectively pursued and imple-mented, and should be developed for eachproject. This plan will set out how thedeveloper will ensure compliance withproject related obligations. It may refer toregulatory and non-regulatory processes andobligations. Where the plan relies upon theState’s institutional capacity to ensurecompliance, the developer may have toenhance this institutional capacity beforethe project proceeds. The measures takenneed to create trust and confidence that theCompliance Plan can and will be met.

In considering the range of tools and mech-anisms available to ensure compliance,greater use should be made of existingconditions directly linked to achievingongoing compliance. These conditions needto be built in at key stages of the projectcycle to provide maximum incentive tocomply. In States with well-developedregulatory systems and institutional arrange-

ments (including judicial processes), greaterreliance can be placed upon direct regula-tion. Where regulatory systems and support-ing institutions are still evolving, the role offinanciers, insurers and contractors, and theavailability of a broad range of non-regulato-ry measures will be of particular importancein assisting States to proceed with accepta-ble developments.

Binding arrangements must be in place forsocial and environmental measures. Theagreed terms of resettlement and environ-mental management conditions need to beincorporated into legally binding andpublicly available documents, and into anyrelevant statutory approvals issued by theState.

Two mechanisms, used withsignificant success in other fields,can be applied to dam relatedprojects to ensure fulfilment ofcommitments. They are:

Performance bonds, backed byfinancial assurances, to providefinancial security that obligationswill be met (such as guaranteeingthe fulfilment of performancecontracts to fulfil social and environmentalcommitments), and

Trust funds to hold and manage funds setaside for a particular purpose (such asresettlement or environmental measures).

Both of these measures can provide Statesand stakeholders with a means of achievinga new level of trust and confidence incompliance, particularly in relation to:

■ the need to ensure that the full costs ofresettlement and environmental per-

An overarchingCompliance Plan is thebest way to ensure thatcompliance activitiesand measures areeffectively pursued andimplemented, andshould be developedfor each project.

Chapter 8


formance, including monitoring andauditing, are met;

■ the need to secure sufficient financialsecurity up front to protect the State andthe community from the risk of default;and

■ the importance of providing a financialincentive to the contractor to completeenvironmental and rehabilitation works.

Social and environmental performancebonds, supported by adequate financialassurances to cover identified resettlementcosts and environmental measures should beposted before project work starts. Suchperformance bonds are already used for the

technical components of damprojects. Other types of projectscarrying high environmentalrisk have also used themsuccessfully.

In cases where performancebonds are not appropriate, suchas those where the State is thedeveloper, trust funds should beused to achieve the sameobjective. Trust funds arewidely employed to ensure thatfunds are used for a designated

purpose. They can be employed to holdfunds for dam related resettlement andenvironmental measures and for monitoringand auditing costs through the life of theproject. The trust fund deed needs to bepublicly available and the trustees need tobe independent from the project sponsors.

Trust funds can be effectively used eitheralone or in conjunction with performancebonds to secure financing for ongoingmonitoring and auditing obligationsthroughout the life of the project. Thesemechanisms also provide an effective means

for holding and distributing royalties to fundongoing initiatives.

As with the granting of operating licences,all contingencies cannot be anticipated. Abalance must be struck on a case by casebasis between providing the necessary levelof certainty to stakeholders that commit-ments will be met, and sufficient flexibilityto accommodate open and transparentadaptive management.

6.3. Costs for establishing compliancemechanisms and related institutionalcapacity, and their effective applica-tion, are built into the project budget.

Arrangements need to be put into place toensure that the costs of implementing theCompliance Plan are built into the projectbudget. Where projects are developed by theprivate sector the State and affected peopleshould be satisfied that these costs are fullyfinanced and that appropriate arrangementsare in place to link compliance to key stagesin the project cycle.

When additional institutional capacity isrequired, the costs should be explicitlyincluded under funding for complianceactivities. Compliance activities represent atransaction cost associated with the projectand should be treated as such. Competingoptions may impose differing complianceburdens on society. This should be reflectedin analysing the acceptability of theseoptions. Past experience shows that there isan inherent risk of failure in both thesatisfactory completion of the task and theeffort to ensure and enforce compliance.

Because of the high cost of compliance andthe risk of failure, a project’s ability todeliver on the Compliance Plan must beexplicitly addressed in the multi-criteriaanalysis to assess options.

Social andenvironmental

performance bonds,supported by adequate

financial assurances tocover identified

resettlement costs andenvironmental

measures should beposted before project

work starts.



6.4 Corrupt practices are avoidedthrough enforcement of legislation,voluntary integrity pacts, debarmentand other instruments.

All States need to adopt and implementcommon and consistent anti-corruptionlegislation. Chapter 6 outlines progressmade on this front, particularly through theratification of the OECD Convention onCombating Bribery of Foreign PublicOfficials in International Business Transac-tions.

Implementation, monitoring and enforce-ment of such agreements will depend on theresources dedicated to such efforts andexisting business practice. Integrity Pactscan be employed as a project-specificmechanism to complement national legisla-tion. These pacts have the advantage of notrequiring explicit legislation and can beused without waiting for lengthy legislativeprocesses where laws do not exist.

An Integrity Pact is a voluntary undertakingthat sets the contractual rights and obliga-tions of all the parties to a procurementcontract. This eliminates uncertaintiesabout the quality, applicability and enforce-ment of laws in a specific country. IntegrityPacts can create greater trust and confidencein the decision-making process, a morehospitable investment climate and publicsupport for government procurement andlicensing programs.

The Integrity Pact has two principal goals,namely to enable:

■ companies to abstain from bribery byproviding assurances that competitorswill also abstain from bribery and thatgovernment procurement agencies willfollow transparent procedures and

prevent corruption, including extortionby their officials; and

■ the State to reduce the high costs anddistortion of public procurement proce-dures caused by corruption.

6.5 Incentives that reward project propo-nents for abiding by criteria andguidelines are developed by publicand private financial institutions.

Compliance with norms, regulations andpractices often becomes widespread when thecost of compliance falls below thecost of non-compliance. Enforcingregulations and agreements is oneway to support this process.

The level of risk and the transac-tion costs of constructing damshave risen steadily due to theconflict over dams. This givesproject developers a financial incentive tocomply with the Commission’s recommen-dations in order to reduce conflict, leadingto an improvement in market access,financing terms and profitability.

A project following the WCD Criteria andGuidelines is likely to be:

■ an economically, socially and environ-mentally sound project; and

■ a project that has achieved publicacceptance through an inclusive partici-patory process of needs and optionsassessment.

This will clearly entail additional up-frontcosts but this investment will bear fruit laterin terms of reduced risk and increasedbenefits.

The importance of public recognitionshould not be underestimated. Compliance

Compliance activitiesrepresent a transactioncost associated with theproject and should betreated as such.

Chapter 8


Compliance incentivescould include awards,

prizes, and other formsof public recognition in

the dams community,introducing healthy

competition to do better.

incentives could include awards,prizes, and other forms of publicrecognition in the dams commu-nity, introducing healthy compe-tition to do better. Sanctionsshould include public exposureand debarment, either temporaryor permanent, from participationin tenders and contracts.

Private sector financial serviceproviders and internationalfinancial institutions (IFIs) mustwork together to ensure thatprojects and companies thatcomply with the WCD Criteriaand Guidelines have access to

one or more of the following incentives:

■ enhanced access to private equitycapital;

■ better terms on debt finance (loans) andinsurance products;

■ lower rates on bond financing;

■ improved accounting for environmentalassets and liabilities;

■ preferential and expanded access to debtfinancing from IFIs and their privatesector windows;

■ risk guarantees from IFIs; and

■ interim credit mechanisms to assistpipeline projects to implement WCDrecommendations.

In the case of IFIs many ofthe policies, procedures andinstruments are already beingdeveloped. In the case ofprivate sector instrumentsthere is a continued need forinnovation in order toconvert adherence to criteriaand guidelines into tangible

benefits for the socially and environmental-ly responsible investor. A few examples ofpromising mechanisms to encourage inves-tors to comply with criteria and guidelinesare listed below:

■ Socially Responsible InvestingThe current growth in socially responsibleinvesting (SRI) in both United States andEuropean Markets far outstrips the growth of‘traditional’ investment funds and provides awindow of opportunity for financingprojects that emerge from proper optionsassessment.

■ Lower Cap on Insurance LiabilityPremiums in the insurance industry arepartly based on the extent of a project’sliability. A lower cap on liability for damprojects certified as complying with theWCD Criteria and Guidelines could bearranged particularly where legally bindingarrangements that reduce the risk of non-compliance are in place.

■ Bond Rating SystemsBonds are increasingly used at the sovereignand corporate level for infrastructureprojects. A rating system similar to theStandard & Poor credit-worthiness ratingthat reflects compliance could favour WCDcompliant bonds.

■ Accounting for Environmental Costsand Liabilities

Projects that adopt the WCD Criteria andGuidelines will present a more transparentpicture of the environmental costs andliabilities of projects and companies. Thiswill lower their market risk and reducevolatility brought about by stakeholderactivism in this area.



Rationale

Conflict over transboundary rivers usuallyresults from a power imbalance amongstriparians where one State or province issufficiently influential to exert its authorityover others. Generally upstream States areconsidered to be in a more influentialposition as they can control the watersource, but regional power imbalances mayalso make it possible for downstream ripari-ans to exert influence over upstream States.Similar conflicts may also occur withinStates where rivers cross internal politicalborders.

Storage and diversion of water on transboundary rivers13 has been a source of considerabletension between countries and within countries. As specific interventions for diverting water,dams require constructive co-operation. Consequently, the use and management of re-sources increasingly becomes the subject of agreement between States to promote mutualself-interest for regional co-operation and peaceful collaboration. This leads to a shift in focusfrom the narrow approach of allocating a finite resource to the sharing of rivers and theirassociated benefits in which States are innovative in defining the scope of issues for discus-sion. External financing agencies support the principles of good faith negotiations betweenriparian States.

Key Message


7.1 National water policies make specificprovision for basin agreements in shared riverbasins. Agreements are negotiated on thebasis of good faith among riparian States14 .They are based on principles of equitable andreasonable utilisation, no significant harm,prior information and the Commission’sstrategic priorities.

7.2 Riparian States go beyond looking at water asa finite commodity to be divided andembrace an approach that equitably allocatesnot the water, but the benefits that can bederived from it. Where appropriate, negotia-tions include benefits outside the river basinand other sectors of mutual interest.

7.3 Dams on shared rivers are not built in caseswhere riparian States raise an objection that isupheld by an independent panel. Intractabledisputes between countries are resolved

through various means of disputeresolution including, in the last instance,the International Court of Justice.

7.4 For the development of projects on riversshared between political units withincountries, the necessary legislativeprovision is made at national and sub-national levels to embody the Commis-sion’s strategic priorities of ‘gaining publicacceptance’, ‘recognising entitlements’and ‘sustaining rivers and livelihoods’.

7.5 Where a government agency plans orfacilitates the construction of a dam on ashared river in contravention of theprinciple of good faith negotiationsbetween riparians, external financingbodies withdraw their support for projectsand programmes promoted by thatagency.


Sharing Rivers for Peace, Development and Security

Such conflicts are often caused by proposals tostore or divert water by constructing dams.Experience suggests that disputes over watercan be resolved and co-operation developed,even where disagreements in other spheres ofinternational relations remain unresolved.

There are 261 international river basinsworldwide. Most do not have agreementscovering water allocation principles. Nego-tiation of such agreements between riparianStates has proceeded on a case-by-case basiswithout any overarching globally bindinglegal instrument.

Chapter 8


The 1966 Helsinki Rules on theUses of Waters of InternationalRivers adopted the principle thateach State had ‘a reasonable andequitable share in the beneficialuses of waters in an internationalbasin’, but these rules have nostatus in international law.While the principles set forth inthe Helsinki Rules representwhat many experts contend are

long accepted principles, these Rules havenot achieved the level of a binding interna-tional treaty. Until it enters into force, thisis also true of the UN Convention on theLaw of the Non-Navigational Uses ofInternational Watercourses. Through aresolution of the United Nations GeneralAssembly in 1997, this Convention attract-ed support from 103 countries, but threecountries voted against it and 27 abstained.The Convention took 27 years to developand has yet to be ratified by enough coun-tries to bring it into force. Among theopposing and abstaining countries are thosewith major dam building programmes them-selves or with an interest in restricting devel-opment projects within other riparian States.

International efforts to develop a universalframework for negotiations appear to havehad limited effect and some countries refuseto respect what can generally be consideredas a growing body of international opinion.The Commission views the principles of theUN Convention as an emerging body ofcustomary law and considers that States willreduce the possibility of conflict if they areprepared to endorse and adhere to them.This contrasts with a situation where somecountries have followed a unilateral ap-proach to the use of water resources andreject the need for an integrated basin-wideframework for water resources management.

In the absence of effective internationalagreements, other measures need to beinvoked. The ability of States to implementdam projects on shared rivers is often relatedto financial and technical support fromexternal agencies and the effectiveness ofpublic opinion in influencing public policy.

In this regard, countries fall into three broadcategories:

■ those with the financial and technicalresources to be totally independent;

■ those that require financial or technicalsupport for a significant proportion ofthe project itself; and

■ those that may be capable of undertakingthe project independently, but rely onexternal support for other projects andprogrammes in the same sector.

In addition to the application of legalprinciples, external financing agencies haveinfluenced and can continue to influencecountries in the second and third categories.In the first category, active networking acrossborders can inform public opinion and encour-age moves towards a policy of co-operation.


7.1 National water policies make specificprovision for basin agreements inshared river basins. Agreements arenegotiated on the basis of good faithamong riparian States. They are basedon principles of equitable and reason-able utilisation, no significant harm,prior information and the Commis-sion’s strategic priorities.

The approach adopted by a national or sub-national authority towards shared rivers mayhave a direct and significant influence onother water resource management strategies.The principles embodied in the 1997 UNConvention on the Law of the Non-

Experience suggeststhat disputes over

water can be resolvedand co-operationdeveloped, even

where disagreementsin other spheres of

international relationsremain unresolved.



Navigational Uses of International Water-courses warrant support. States should makeevery effort to ratify the Convention andbring it into force. Where there are obsta-cles to endorsing the Convention, thefollowing key principles it embodies can stillprovide a framework for further dialoguebetween riparian States:

■ ‘equitable and reasonable utilisation’ thatpromotes the optimal sustainable use ofthe river, taking into account the inter-ests of other riparians;

■ ‘no significant harm’ to other riparians andcompensation or mitigation for any harmcaused; and

■ ‘prior information’ referring to the need toinform other riparian States on plannedmeasures that may have a significanteffect on them.

The meaning of these terms is still evolving.Particularly, the application of the principleof ‘no significant harm’ will often conflict ata basic level with many applications of theprinciple of ‘equitable and reasonableutilisation’. These interactions have notfully been resolved legally or customarily,suggesting that in their application, theseprinciples should be read alongside theCommission’s strategic priorities whenplanning future water resources and hydro-power developments.

The Commission’s message is grounded onthe need to obtain the consent and co-operation of riparian States in the manage-ment of shared water resources includingboth consumptive and non-consumptiveuses. In addition to having ratified interna-tional agreements, individual States shouldspecifically address shared river basins intheir water policy or legislation, providingclarity on their intention to co-operate inwater resources management. For example,

this intention is reflected in the SouthAfrican National Water Act. Such provi-sions would provide a common basis forriparian States to move towardsmore integrated managementagreements for shared watercours-es. On the basis of these agree-ments, the affected States canadopt a progressive approach toinstitutional development,starting with exchange of infor-mation, joint scientific teams toanalyse data, and joint arrange-ments for monitoring the imple-mentation of agreements.

Success with a progressive approach like thiswill provide the confidence to embark onco-operation in other areas. Internationallythere is significant interest in transboundaryissues and external financing agencies haveexpressed interest in supporting riparianStates that agree on a common approach.Such financing should be provided within abroad framework of co-operation, ratherthan as a specific project-related compo-nent.

7.2 Riparian States go beyond looking atwater as a finite commodity to bedivided and embrace an approach thatequitably allocates not the water, butthe benefits that can be derived fromit. Where appropriate, negotiationsinclude benefits outside the river basinand other aspects of mutual interest.

Innovative solutions are needed to solveapparently intractable problems. Often,negotiations over shared rivers have devel-oped into disputes over allocating what mayappear as an insufficient resource. A moreequitable and sustainable resolution may bepossible by shifting from a primary focus onthe allocation of the water resource, to afocus on the benefits that derive from the

The Commission’smessage is groundedon the need to obtainthe consent and co-operation of riparianStates in themanagement of sharedwater resources.

Chapter 8


use of the water, encompassing considera-tion of wider development objectives andthe options available to meet them. Thisshift provides an opportunity to look moreconstructively at alternative programmes formeeting development objectives.

It is possible to expand the horizon ofnegotiations further to include other issuesthat optimise the comparative advantages oftwo or more States. Such synergies mayresult from differences in location, climateor resource endowment. To some extent, the

Helsinki Rules began this shift.In the wider negotiation arena,the principles of sharingbenefits can include an array ofother resources, including co-operation in other sectors, orfinancial payments.

An approach centred on widerdevelopment objectives createsa link between discussions attransboundary level andstrategic planning processes

within countries that can be used to defineneeds more clearly and map out a widerrange of alternatives. Early engagement canavoid disputes becoming polarised around aspecific project proposal and entrenchingnegotiating positions.

7.3 Dams on shared rivers are not built incases where riparian States raise anobjection that is upheld by an inde-pendent panel. Intractable disputesbetween countries are resolved throughvarious means of dispute resolutionincluding, in the last instance, theInternational Court of Justice.

Openness and information sharing is a keyfirst step in any transboundary water sharingsituation. From this can follow an independ-ent and objective assessment of the conse-quences and impacts of any proposed

intervention. Conducted in a mannerconsistent with openness and informationsharing, a competent, independent entityacceptable to all riparian States shouldconduct strategic and project-related impactassessment studies following the practiceoutlined in Chapter 9.

The level and intensity of impact assess-ments will depend on the planning stage,but in all cases should include environmen-tal, social, health and cultural heritageassessments. Safeguards are needed to ensureindependence in directing and financing theassessment team. Mechanisms such asestablishing a joint trust fund for imple-menting the assessments should be consid-ered. The impact assessments should be seenas part of the joint institutional strengthen-ing activities of riparian States to provide acommon, interactive approach and a soundbasis for political dialogue.

Where disputes cannot be resolved, anindependent panel should be establishedthat goes beyond the remit of the impactassessment. The creation and operation ofsuch a panel is defined in the 1997 UNConvention on the Law of the Non-Naviga-tional Uses of International Watercourses.Good faith negotiations may of themselveslead to mutually agreeable outcomes. In theevent that disputes remain, and if parties donot have recourse to dispute resolutionthrough international, regional or bilateralagreements, the affected parties could referthe matter to the International Court ofJustice (ICJ), either by mutual agreement, ordirectly if both parties have previouslysubmitted to the compulsory jurisdiction ofthe ICJ by declaration under Article 36 ofthe Statute of the Court.

These policy principles apply to all water-courses including tributaries. Their applica-

A more equitable andsustainable resolution

may be possible byshifting from a primary

focus on the allocation ofthe water resource, to a

focus on the benefits thatderive from the use of

the water.



tion to tributary rivers is a location specificissue dependent on the significance andrelationship of the tributary to the mainriver and the interests of riparian States. Incases where countries have already reachedbasin level agreements for the main stemriver, such agreements should be extendedto significant tributary rivers taking intoconsideration the Commission’s strategicpriorities. Where no agreements exist,riparian States should adopt an integratedapproach looking at the management of themain-stem and its tributaries within thecontext of the entire river basin.

7.4 For the development of projects onrivers shared between political unitswithin countries, the necessary legisla-tive provision is made at national andsub-national levels to embody theCommission’s strategic priorities of‘gaining public acceptance’, ‘recognis-ing entitlements’ and ‘sustaining riversand livelihoods’.

The Commission’s seven strategic prioritiesare as relevant to rivers shared across sub-national boundaries as they are to thosewholly within one province or those sharedbetween States. Where their legal systemprovides for national-level control of waterissues, States should embody the principlesof shared waters in national water legislationand develop a locally appropriate policyframework for addressing such issues. Inother cases, States at a federal level shouldexplore mechanisms to encourage goodpractice and provide incentives for compli-ance with the strategic priorities.

Although many sub-national governmentshave a mandate to manage water, a nationalor federal government may exercise sanc-tions through legislative and regulatorymechanisms and provide financial incen-tives. In many cases dam development andoperation depend on project licences issued

by national and sub-national authorities, ora mix of the two. Dam projects may also besubject to clearance from national and sub-national environmentalagencies. Both licences andenvironmental clearance canbe used to ensure that accept-ed environmental and socialprovisions are met. Wherefederal funds are sought forproject assistance, they shouldbe made conditional oncompliance with the Commis-sion’s strategic priorities. As part of theiroverall responsibility, States should be morepro-active earlier in the planning process tofacilitate resolution of disputes betweenriparian provinces.

7.5 Where a government agency plans orfacilitates the construction of a dam ona shared river in contravention of theprinciple of good faith negotiationsbetween riparians, external financingbodies withdraw their support forprojects and programmes promotedby that agency.

The international community needs to takea strong and concerted stand in the case ofshared rivers. While the decision to build adam is often considered a sovereign deci-sion, the decision of external agencies tosupport a dam depends on whether theproposed project complies with that agency’spolicies and guidelines. It is therefore ofconcern that bilateral, multilateral andexport credit agencies have not yet harmo-nised their policies towards shared water-courses. These often-inconsistent policiesmake it more difficult to improve the waytransboundary issues are handled. Thecomplexity of the situation is increased bythe disparate and fluid nature of financialsupport. This inconsistency often results insituations where, although an externalagency may not be directly financing a dam

States should embodythe principles of sharedwaters in national waterlegislation and develop alocally appropriate policyframework foraddressing such issues.

Chapter 8


on a shared watercourse, itssupport for other projects inthe same sector allowsnational resources to beallocated for this purpose.

It is essential that externalagencies harmonise theirpolicies towards sharedwaters and deal with thesector as a whole rather than

with specific projects. Such policies shouldincorporate aspects of notification toriparian States, the desirability of ‘consent’or ‘no objection’ from riparian States, and

independent expert assessment of social andenvironmental impacts.

In the absence of agreement among riparianStates, external agencies should make theirinvolvement conditional on the findings of anindependent commission as envisaged underthe 1997 UN Convention on the Law of theNon-Navigational Uses of InternationalWatercourses or other appropriate mecha-nisms agreeable to all parties. In cases whereStates proceed with projects in the absence ofsuch a commission, or reject its findings, theexternal financing agency should withdraw itssupport from the sector concerned.

Endnotes

1 For example in many Latin Americancountries (Argentina, Bolivia, Brazil, Chile,Colombia and Ecuador) and in Australia,Canada, India, New Zealand, and thePhilippines national laws recognise indige-nous people’s rights. Specific legislation onindigenous people’s rights includes thePhilippines Indigenous Peoples Rights Act(1997), Australian Aboriginal Land Rights(Northern Territory) Act 1976 and Chile’sIndigenous Law 1993. Recent Canadianpractice promotes the need for free, priorinformed consent of indigenous and tribalpeoples to projects in certain contexts.Goldzimer, 2000, soc013, WCD submission;Hart, pers. comm. 2000; IDS, 2000.

2 See endnote 1

3 Colchester, 1993, 1995; Tenant, 1994; Gray,1995; Kingsbury, 1995; Fisher, 1993; May-bury-Lewis, 1996; Daes, 1996a, p72; Pritch-ard, 1998a, p44; Pritchard, 1998b, p61. SomeAsian and African countries already acceptthat the term ‘indigenous peoples’ applies tothe ‘tribal peoples’ and ‘cultural minorities’within their borders, including Cambodia,Botswana, Nepal and Philippines. In a

landmark case for the Ainu of Japan, on 28March 1997 a local court in Sapporo,Hokkaido, recognised the Ainu as anindigenous and minority people. The AsianDevelopment Bank has also adopted a policyon ‘indigenous peoples’ to guide its opera-tions. For a more nuanced discussion of theapplicability of the concept of indigenouspeoples to Asia, see Kingsbury, 1998.

4 Daes1996b; World Bank, 1991.

5 Nepal: Modifiying the intake, installing anextra desander, dredging the forebay andrefurbishing the generators/turbines andpower house control systems at the Trushuli-Devighat hydropower station in 1995(originally built in the 1970’s) improvedaverage annual power generation by 46%.NEA 1997.

Lao PDR: Nam Ngum is a 150 MW hydro-power plant near Vientiane, the capital ofLao PDR. Surplus power is exported toThailand and the power sales agreementbetween the two countries is revised every 4years. Based on updated hydrology and othervariables, studies were undertaken tooptimise the monthly and day-to-dayoperation of reservoirs and turbines. Assum-



ing the same average tariff, revenue from powersales to Thailand increased by about 10%.Lahmeyer International, 1990.

6 Johnston, 2000.

7 Acreman et al, 2000; WCD Thematic II.1Ecosystems.

8 465 cases in the United States, 3 in France,1 in Norway, a few in Canada.


10 Many countries are in the early stages ofdeveloping EFRs, for example adopting andimplementing relevant legislation, makingenquiries into available environmental flowmethodologies and developing policy, but arenot necessarily at the stage of formallyundertaking EFRs or determining EFRs forfreshwater systems. At least 29 countrieshave used EFRs including: Australia, Austria,Canada, Denmark, Finland, France, Germa-ny, Hungary, Indonesia, Ireland, Italy, Japan,Korea, Lesotho, Moldavia, Namibia, NewZealand, Norway, Portugal, Puerto Rico,South Africa, Spain, Swaziland, Sweden,Switzerland, Taiwan, The Czech Republic,The Netherlands, The Ukraine, The UnitedKingdom, The United States. The followingcountries are exploring the use of EFRs:Angola, Botswana, Brazil, Chile, Israel,Mexico, Mozambique, Nepal, Thailand,Vietnam, Zimbabwe. Tharme, 2000.

11 Benefit sharing through Equity Shares-Minashtuk Project in Canada. The Minash-tuk project in Canada illustrates benefitsharing through a limited partnershipcompany. Here the Band Council of theMontagnais of Lac Saint-Jean is the majority

shareholder with a 50.1% share and HydroQuebec owns the remaining 49.9% of theshares. Minashtuk is the first project devel-oped by Hydro-Innu. Besides guaranteeing ashare in profits, it allows the Montagnais todesign a project according to their prioritiesand in the long-term reinvest the profits in amanner that supports the economic develop-ment of their community. Milewski et al1999, soc196, WCD Submission.

12 ISO 14001 is an internationally recognisedstandard that identifies the basic processes ofan environmental management system(EMS). It allows an organisation to effective-ly identify, monitor and control its environ-mental impacts. It does not specify perform-ance requirements, beyond a commitment tocomply with applicable regulations and othercommitments. The standard enables third-party certification for organisations thatconform to its specifications. While there aremany models for EMS design, the ISO 14001standard is emerging as the dominantstandard, with over 17,000 certificatesgranted as of June 2000. Concerns do,however, exist whether ISO standards canassure changed performance effectively.Corbett and Kirsch, 200.

13 ‘Rivers’ is used here as a general term. Thestrategic priority and policy principles relateequally to all types of waters which are ormight be impacted by dams.

14 The term ‘riparian State’ is used to mean anyState through which a transboundary riverflows or forms part of its boundary, or whichincludes part of the catchment area of atransboundary river.

Criteria and Guidelines – Applying the Strategic Priorities


Chapter 9:

Criteria and Guidelines –Applying the Strategic Priorities

Many technical guidelines for

the construction of dams

and their associated infrastructure

have been developed by professional

technical networks to ensure high

engineering and quality standards.

What is lacking is a comprehensive

and integrated framework for decision-

making on the provision of water and

energy services. The Commission’s

contribution is to provide a framework

that emphasises a structured process

incorporating the full range of social,

environmental, technical, economic

and financial criteria and standards.

Chapter 9


The framework is built upon the sevenstrategic priorities described in Chapter 8and derives its strength from recognising therights and assessing the risks of all stake-holders in the process.

Social, environmental, governance andcompliance aspects have been undervaluedin the past. It is here that applying theCommission’s proposals will make a differ-ence. The framework identifies key decisionpoints and incorporates associated criteriathat translate the Commission’s policyprinciples into a programme for implemen-tation. Within this framework the Commis-sion proposes a set of guidelines firmlyanchored in examples of good practice fromthe Knowledge Base to describe how itspolicy principles can be realised. Theseguidelines add to existing decision-support

instruments and should be incorporated bygovernments, professional organisations,financing agencies, civil society and othersas they continue to improve their ownrelevant guidelines and policies over time(see Figure 9.1).

This chapter shows how implementing adecision-making process based on theCommission approach will safeguard rights,reduce the risk of conflicts emerging, andlower overall costs. The framework providesthe opportunity for agencies and communi-ties to screen out unfavourable alternativesat an early stage. It is intended to openchannels of dialogue between stakeholders,increase mutual understanding and helpdecision-makers, practitioners and affectedpeople assess whether needs have beenadequately addressed. Proposals for dam

projects that emerge from thescreening process will have greaterpublic acceptance.

Turning the strategic prioritiesand their underlying policyprinciples into reality requires anew focus for planning andmanagement in the water andenergy sectors. This chapterconcentrates on what needs tochange in the way water andenergy management plans aredeveloped and projects are de-signed and implemented. Bringingabout this change will require:

■ planners to identify stakehold-ers through a process thatrecognises rights and assessesrisks;

■ States to invest more at anearlier stage to screen outinappropriate projects andfacilitate integration across

Government

• Water and energy

policies

• Social and environment

policies

• Regulations and

standards

Civil society• Codes of practice

• Public information

• Social audit

International ag

reements

•International conventions

•International law

•B

asin agreem

ents

Priv

ate

sect

or

•Cod

es o

f pra

ctice

•Due

dilig

ence

pol

icies

•Cer

tifica

tion

Professionalorganisations• Standards• Sector guidelines

Multilateral and bilateral

organisations

•O

perational policies

•Im

pact assessments

•Process guidelines

Inte

rnat

iona

l sta

ndar

ds

•Te

chni

cal s

tand

ard

s

•W

ater

, hea

lth a

nd s

afet

y

stan

dar

ds

•IS

O s

tand

ard

s

WCDCriteria

andGuidelines

Figure 9.1 WCD Criteria and Guidelines strengthen other decision supportinstruments



sectors within the context of the riverbasin;

■ consultants and agencies to ensureoutcomes from feasibility studies aresocially and environmentally acceptable;

■ the promotion of open and meaningfulparticipation at all stages of planningand implementation, leading to negotiat-ed outcomes;

■ developers to accept accountabilitythrough contractual commitments foreffectively mitigating social and environ-mental impacts;

■ improving compliance through inde-pendent review; and

■ dam owners to apply lessons learned frompast experiences through regular moni-toring and adapting to changing needsand contexts.

The changes will involve reform of existingplanning processes and an emphasis on thekey stages where decision-makers andstakeholder groups can verify compliance.Among the multitude of decisions to betaken, five critical decision points havebeen identified as having a particularlystrong influence on the final outcome. Thefirst two relate to water and energy plan-ning, leading to decisions on a preferreddevelopment plan.

1. Needs assessment: validating the needsfor water and energy services.

2. Selecting alternatives: identifying thepreferred development plan from amongthe full range of options.

Where a dam emerges from this process as apreferred development alternative, threefurther critical decision points occur.

3. Project preparation: verifying thatagreements are in place before tender ofthe construction contract.

4. Project implementation: confirmingcompliance before commissioning.

5. Project operation: adapting to changingcontexts.

The contractual steps of signing agreementsand issuing licences are located within thisoverall framework. Although in these latterstages the Commission has focused on issuesrelated to dam projects, the principles andgeneral guidance presented here are alsorelevant to non-dam options for water andenergy services.

The five decision points are supported by aset of key criteria that describe the processesrequired for compliance. The criteria arepresented in the form of checklists for eachdecision point that provide a clear and openmechanism for determining whether theCommission’s recommendations have beenfollowed and the process can proceed to thenext stage of planning or implementation.

The criteria cover the full planning andproject cycles and include aspects related toexisting dams. There are alsomany dams currently in theplanning, design, or constructionstage. These ‘dams in the pipe-line’ should also be assessed toidentify improvements that canbe made. Practical steps areproposed to determine the extentto which such current projectscomply with the Commission’srecommendations, and to identifyhow any needed adjustments canbe made.

Recognising that guidelines areavailable from other sources, the Commis-sion focused principally on what needs to bedone differently. Introduction of a newdecision-making framework through appli-

Five critical decisionpoints have beenidentified as having aparticularly stronginfluence on the finaloutcome. They aresupported by a set ofkey criteria that describethe processes requiredfor compliance.

Chapter 9


cation of the criteria and guidelines will addsignificant value to existing processes andform a basis for good practice in water andenergy resource development. Taken togeth-er, the criteria and guidelines will improvedevelopment outcomes and minimiseproblems encountered in the past.

Five Key Decision Points:The WCD CriteriaAs noted, the Commission has identifiedfive key stages and associated decisionpoints for the energy and water sector. Themost fundamental of these is selection of thepreferred development plan. This deter-mines what options will be pursued to meetneeds and whether or not a dam is to bebuilt. This decision is only taken after needsand the available options to meet thoseneeds have been fully assessed. Each of thefive stages requires a commitment to agreedprocedures culminating in a decision pointthat governs the course of future action andallocation of resources (see Figure 9.2). Ateach decision point it is essential to testcompliance with preceding processes beforegiving authority to proceed to the nextstage. These points are not exhaustive, andwithin each stage many other decisions aretaken and agreements reached. The five keystages and associated decision points aregeneric and need to be interpreted withinthe overall planning contexts of individualcountries.

1. Needs assessment: validating the needs forwater and energy services. Confirmation isrequired that plans for water and energydevelopment reflect local and nationalneeds adequately. An appropriate decentral-ised consultation process is used to validatethe needs assessment and modify it wherenecessary.

2. Selecting alternatives: identifying thepreferred development plan from among the fullrange of options. The preferred developmentplan is selected through a participatorymulti-criteria assessment that gives the samesignificance to social and environmentalaspects as to technical, economic andfinancial aspects and covers the full range ofpolicy, programme, and project options.Within this process, investigations andstudies are commissioned on individualoptions to inform decision-making asrequired; for example, demand-sidemanagement studies or feasibility studies.

Where a dam emerges as a preferred option, thefollowing key decision points occur forproject preparation, implementation andoperation.

3. Project preparation: verifying agreements arein place before tender of the constructioncontract. The preparation stage coversdetailed planning and design. Licencesissued for development of a project incorpo-rate any conditions that emerge from theoptions assessment process. Tendering theconstruction contract is conditional uponreaching negotiated agreements for benefit-sharing mechanisms and for mitigation,compensation, development and compli-ance measures, in addition to technicalrequirements.

4. Project implementation: confirmingcompliance before commissioning. Theimplementation stage covers procurementand construction. Issuing the licence tooperate is contingent on implementation ofspecific benefit sharing and mitigationmeasures at various stages through theimplementation period. Compliance withall relevant time-bound commitments isrequired before commissioning the project.



5. Project operation: adapting to changingcontexts. Any decisions to modify facilities,operating rules, and licence conditions tomeet changing contexts are based on aparticipatory review of project performanceand impacts.

The five key stages and decision pointsprovide a framework within which decision-makers and stakeholder groups can beassured of compliance with agreed proce-dures and commitments. The benefits of thisapproach include lowering risks to liveli-hoods and cost escalation, reducing thenumber of disputes, and encouraging localownership. In the short term, additionalfinancial resources for needs and optionsassessment will be required to achievecompliance with the Commission’s policyprinciples, and efforts will be required tostrengthen institutional capacity. In thelonger term, the potential exists for majorcost savings and increased benefits.

The remainder of this chapter describes eachof the five key decision points and provides arelated list of criteria for checking compliance.Stakeholder involvement is central to theseprocesses. The composition of a forum ofstakeholder groups associated with each stageis different and evolves throughout the process(see Guideline 1: Stakeholder Analysis).

Figure 9.2 Five key decision points in planning and projectdevelopment

Identify the preferreddevelopment plan amongthe full range of options

Selecting Alternatives

Criteria 2

Investigative studies

Criteria 2A

Validate the needsfor water and

energy services

Needs Assessment

Criteria 1

Adapt tochanging context

Project Operation

Criteria 5

Confirm compliancebefore commissioning

Project Implementation

Criteria 4

Verify agreements arein place before tender ofthe construction contract

Project Preparation

Criteria 3

Policy, programme,projects

Assignresponsiblity forimplementation

DAM OPTIONNON-DAM OPTIONS

Chapter 9


Stage 1: Needs assessment: validating the needs forwater and energy services

A clear statement of water and energy servicesneeds at local, regional, and national levelsthat reflects decentralised assessments andbroader national development goals. Anassessment based on participatory methodsappropriate to the local context resulting in aclear set of development objectives that guidethe subsequent assessment of options.

Intended outcome

Determining needs and setting prioritiesbetween and within sectors are continuousprocesses specific to individual countries.The Commission’s policy principles describecharacteristics that should be reflected insuch processes and define a shift in emphasisto more open and inclusive procedures.Country-level responses are required toensure that priority setting embodies a fairrepresentation of basic water and energyneeds and provides the appropriate balancebetween local and national demands.

A country’s policy framework for water,energy, social issues and the environmentguides the whole planning process. Theopen and participatory approach to needsand options assessment envisaged by theCommission requires a review of thesepolicies to identify and address elementsthat may hinder its implementation.

The primary influence defining a country’sportfolio of development activities, is a setof development objectives that may beembodied in a five-year plan or in a regula-tory planning framework. Ensuring that theoutcome of the needs assessment for waterand energy services reflects stakeholderpriorities requires an entry point early in theplanning process. The Commission proposesa validation process to confirm the setting of

priorities and the formulation of develop-ment objectives.

An open and decentralised planning processprovides opportunities for public scrutiny. Insituations where this has not been imple-mented, a programme of national and sub-national public hearings, targeted communi-ty consultations, and field surveys can assessthe validity of the needs assessment. Thesubject of the consultations may relate to anoverall development strategy, master plan,sector plan, or basin plan, and the breadthof consultation can be determined accord-ingly. The WCD Knowledge Base demon-strates the need for such a review, sinceplans are often narrowly focused, reflectsocial and environmental impacts inade-quately, are weak in identifying affectedgroups, and fail to deal adequately with thedistribution of costs and benefits.

In countries where a large proportion of thepopulation does not have access to basicservices, a key parameter in the validationprocess should be the extent to which basichuman needs will be met. To ensure thatthese needs are given prominence, the processof validation should empower those who areleast able to influence planning systems.

Responsibility for this validation process restswith the State. Independent facilitation forconsultations and surveys and the presence ofcivil society groups will enhance confidencethat the needs of disadvantaged groups arebeing considered. Briefing materials, records ofmeetings, and results of the overall processshould be available in appropriate languages. Ifthe development objectives are not confirmedby the validation exercise, they should bereviewed and updated using processes consist-ent with the Commission’s policy principles.



Stage 1 Criteria Checklist

NEEDS ASSESSMENT Selecting alternatives Project Preparation Project Implementation Project Operation


■ A consultation plan was developed using astakeholder analysis to define the groups in-volved. The plan defines mechanisms for verify-ing needs at the local, sub-national and nationallevel (Guideline 1).

■ Verification of the needs for water and energyservices was achieved through a process of publicconsultation and the results of public consulta-tion were disseminated to stakeholders.

■ Development objectives reflect a river-basin-wide understanding of relevant social, economic,and environmental values, requirements, func-tions, and impacts that identifies synergies andpotential areas of conflict.

■ An appropriate process was established to addressany disparities between the needs expressedthrough the public consultations and the stateddevelopment objectives.


■ Legal, policy and institutional frameworks werereviewed and any bias against resource conserva-tion, efficiency and decentralised options, andany provisions that hindered an open andparticipatory assessment of needs and optionswere addressed.


■ Outstanding social and environmental impactsfrom past projects were evaluated and incorporat-ed into the needs assessment (see Chapter 8,policy principle 3.3).


■ Ecosystem baseline studies and maintenanceneeds were assessed at a strategic level (Guide-lines 14, 15)

Needs assessments may have been conducted through a range of processes including national, regional, sector-specific, orbasin-wide plans. The verification process to be applied will need to be tailored to suit the particular circumstances.

Chapter 9


Stage 2: Selecting alternatives: identifying the preferreddevelopment plan

A major concern about past projects is thattoo limited a range of options was consid-ered before deciding to construct a dam. Toaddress this, the inventory of options mustrespond to the agreed development objec-tives (Stage 1) and explicitly identify thebeneficiary groups. The inventory of optionsneeds to be sufficiently diverse in terms ofpolicy, programme, and project alternatives,project scale, and geographic coverage.

Strategic impact assessments provide aninitial level of screening to remove alterna-tives that have unacceptable social andenvironmental consequences. They need toreflect the importance of avoiding adverseimpacts and the precautionary approach.The assignment of relative weights todesignate the importance of various parame-ters should be a participatory process andform the basis of a multi-criteria analysis toscreen and rank alternatives. For example,the gestation period in delivering benefits,the scale of adverse impacts and costs are allkey considerations.

The information available on each optionwill not be at the same level of detail.Decisions need to be taken during thescreening process on whether to commissionfurther investigations and studies on indi-vidual alternatives, while at the same timenot jeopardising or delaying alternatives

that can deliver benefits within the short-term.

Studies are required to assess the extent towhich policy and programme options canmeet the development objectives. Thepolicy principles cover a number of suchareas, including:

■ optimising existing investments byincreasing operational efficiency andimproving productivity;

■ demand-side management assessment;

■ decentralised supply options and commu-nity-level initiatives; and

■ policy and institutional reforms.

Some options will need reconnaissance, pre-feasibility, and feasibility studies appropriateto the stage in the process and incorporatingsocial and environmental surveys andimpact assessments. The decision to allocatefinancial resources to such studies should betaken within the overall context of theoptions assessment process. For example, itmay have been agreed that detailed investi-gations of supply-side approaches shouldawait the outcome of demand-side studiesthat could influence the scale of any projectintervention.

Criteria relevant to project-related studiesare described as a subset of the process ofselecting alternatives (see Stage 2A). Thefindings of the studies are fed back into thescreening process for consideration with allother remaining options. This approachdeviates from existing practice in manycountries by cutting the direct link betweenthe feasibility study and project approval. Itencourages a broader consideration of allfeasible options in setting priorities.

A mix of alternatives that reflects the needsand meets the development objectives hasbeen selected through a multi-criteria assess-ment of the full range of policy, programme,and project alternatives and included in apreferred development plan.

Intended outcome




Gaining Public Acceptance■ Stakeholders participated in creating the invento-

ry of options, assessing options, and in negotiatingthose outcomes that may affect them (Guide-lines 1, 2).

■ An agreed dispute resolution mechanism fornegotiated processes was established with theparticipation and agreement of stakeholders(Guideline 2).

■ Indigenous and tribal peoples gave their free, priorand informed consent to the inclusion in thedevelopment plan of any planned option thatwould potentially affect them (Guideline 3).

Comprehensive Options Assessment■ Strategic impact assessments and life cycle analy-

sis were integrated and undertaken as an initialstep in the process (Guidelines 4, 7, 8, 14, 17).

■ A multi-criteria assessment was used to screen andselect preferred options from the full range ofidentified alternatives (Guideline 6).

■ The screening of options:■ covered all policy, programme, and project

alternatives;■ gave social and environmental aspects the

same significance as technical, economic andfinancial factors;

■ gave demand-side options the same signifi-cance as supply options;

■ prioritised consideration of improving perform-ance of existing systems;

■ considered river-basin-wide aspects andcumulative impacts;

■ took account of potential changes in climate; and■ reflected the precautionary approach.

■ Distributional and risk analyses were conducted atan appropriate level (Guidelines 9, 11) andenvironmental and social impacts were valuedwhere appropriate (Guideline 10).

■ Approval to proceed with any project-levelinvestigations was informed by a comprehensiveassessment of options (see Criteria Checklist 2A).

■ Rejection of any options was explained in anopen and timely manner.

Addressing Existing Dams■ Provisions were made for resolving outstanding

social and environmental impacts (see Chapter 8,policy principle 3.3)

Sustaining Rivers and Livelihoods■ An established policy exists to maintain selected

rivers with high ecosystem functions and valuesin their natural state.

■ Consideration of options took into account:avoiding dams on the main-stem of rivers wherev-er possible; avoiding or minimising negativeimpacts on endangered species, ecosystems,livelihoods, human health and cultural resources;and respecting the provisions and guidance ofrelevant international treaties.

Recognising Entitlements and SharingBenefits■ For any project option, stakeholders negotiated

the guiding principles and criteria for: benefit-sharing, mitigation, resettlement, developmentand compensation measures (Guidelines 2, 18,20).

Ensuring Compliance■ Sufficient institutional capacity exists, or will be

enhanced, to monitor and enforce commitmentsfor social and environmental components.

Sharing Rivers for Peace, Development andSecurity■ Any objections from riparian states were resolved

through good faith negotiations or independentdispute resolution procedures (Guideline 26).

Needs Assessment SELECTING ALTERNATIVES Project Preparation Project Implementation Project Operation

Chapter 9


Stage 2A: Investigative studies

The authority to proceed with a preparatorystudy for a dam project should not be a signalthat the project will be implemented. Rather,such a decision should be integrated into theoverall options assessment process. This willprovide a break in the traditional planningcycle to encourage more open decision-making. Viewing project options within theoverall framework of options assessment alsofacilitates the rejection of projects that fail tomeet social and environmental objectives infavour of better alternatives. The WCDKnowledge Base has demonstrated that morerigorous estimates of project costs are alsorequired as a part of such studies, and the riskof cost overruns must be fully considered inthe assessment process.

Meaningful participation in preparatorystudies is central to the success of theinvestigation and the ultimate outcome.Careful analysis to recognise the rights andassess the risks of stakeholder groups isessential. A forum of stakeholder groupsneeds to be identified based on projectboundaries. Agreement on the participatoryelements of the studies should be formalisedin a consultation plan.

The strategic impact assessment undertakenearly in the options assessment will haveoutlined the key unknowns and the areas to beinvestigated across all sectors. The issues willbe defined in more detail in the scoping stageof project-related impact assessments. On thisbasis, terms of reference and work plans for thediverse range of sector specialists can beintegrated. Project-related impact assessmentshave to go beyond environmental and socialimpact assessments to include health andcultural impacts. To be effective, they requirean improved level of baseline studies.

Preliminary negotiations with project-affected people, their community represent-atives, and other stakeholders are central tothe preparatory studies in consideringmitigation measures for any unavoidableadverse impacts and investigating benefit-sharing plans. By the time a study reachesfeasibility stage, the scope of such measuresshould be clearly defined in order to reducethe likelihood of protracted negotiationsand a breakdown of discussions later in theprocess. For the proposed project to be partof a preferred development plan, the accept-ance of the project affected people and theprior informed consent of indigenouspeoples should be obtained.

Ultimately the results of the study, includingany outstanding issues, will be fed back intothe screening and ranking exercise (seeCriteria Checklist 2) for comparison withremaining alternatives prior to any decisionto proceed further with detailed projectdevelopment. The following plans, withindicative budgets, need to be developed asa minimum requirement to act as a founda-tion for any further project planning:

■ an outline environmental managementprogramme, including provision for anenvironmental flow to maintain down-stream ecosystems;

■ an outline social mitigation, resettle-ment, and development plan; and

■ an outline monitoring plan, includingoutcome-based indicators.

A compliance plan will be required tocover these aspects and other regulatoryrequirements throughout subsequentstages of project planning, development,and operation.



Needs Assessment SELECTING ALTERNATIVES Project Preparation Project Implementation Project Operation

Stage 2A Criteria Checklist


■ Stakeholders participated in baseline, impact andinvestigative studies and the negotiation ofoutcomes that potentially affect them (Guide-lines 1, 2, 14, 17).

■ The studies and impact assessments were openand independent, and were preceded by a partici-patory scoping phase (Guideline 5).


■ The investigations were analysed on a river-basin-wide understanding of social, economic,and environmental values, requirements, func-tions, and impacts including cumulative impacts,and the precautionary approach was applied. (seeGuideline 5).

■ The recommendations of studies undertaken onresource conservation measures, demand-sidemanagement, local supply-side options andimprovement of existing systems were reflectedin the demand forecast for the sector.

■ Within-project alternatives were assessed using amulti-criteria approach (Guideline 6).


■ Studies examined possible synergies from interac-tive operation of related water resource infra-structure in the basin.


■ An environmental flow requirement to maintaindownstream species, ecosystems and livelihoodswas defined (Guideline 15).

■ Impacts on fish have been assessed and measuresto avoid or minimise impacts were considered,including an effective fish pass where feasible(Guideline 16).

Recognising Entitlements and SharingBenefits

■ Stakeholders negotiated agreements for com-pensation, mitigation, resettlement, develop-ment and monitoring measures affecting them,including draft contracts where necessary(Guideline 19).

■ Effective benefit-sharing strategies were identi-fied and agreed with people adversely affectedby the project (Guideline 20).

Ensuring Compliance

■ Institutional capacity to monitor and enforcecommitments for social and environmentalcomponents of the project was analysed andmeasures to strengthen capacity identified.

■ An independent panel reviewed the assessmentof impacts and the planning of social andenvironmental mitigation plans (Guideline 22).

Sharing Rivers for Peace Development andSecurity

■ Riparian states were notified of options affectingthem and agreed procedures for impact assess-ments. Objections were addressed through goodfaith negotiations and agreed dispute resolutionprocedures (Guideline 26).

Project-related pre-feasibility and feasibility studies need to meet the following criteria. Policy and programme relatedstudies may also be required, and are covered in Criteria Checklist 2.

Chapter 9


The responsibilities of the developer inrelation to mitigation, development ofaffected communities, and benefit-sharingwill be clearly reflected in the licence andthe compliance plan. The operation phaseshould be contingent on compliance withspecific commitments identified in thelicence. Conditions for impoundment andcommissioning should be explicitly stated.

If the tender cost estimate is substantiallyhigher than the feasibility study estimate,the choice of project should be reviewed tosee if it still meets the selection criteria. Asimilar check is required if needs havechanged substantially since the outset, or ifthe project scope has changed materially. Ifthe actual price of the lowest responsivetender exceeds agreed cost limits, procure-ment should be interrupted and optionsreviewed.

Social and environmental mitigationmeasures should be defined in the tender insimilar detail to construction elements,namely the ‘bill of quantities’. The tendershould clearly identify responsibilities of thecontractor, the developer, and the govern-ment in relation to:

■ the environmental management plan;

■ measures to mitigate adverse socialimpacts, including development opportu-nities for affected communities;

■ access to and management of newresources in the reservoir;

■ the construction method and schedule,and the construction camp;

■ impact monitoring and reporting duringthe operations stage; and

■ compliance instruments.

Stage 3: Project preparation: verifying commitments arein place before tender of the construction contract

The Commission considers that all large damsshould have time-bound licences. Where alarge dam emerges as a preferred option, alicence for project development should beissued to the developer by the appropriateregulatory agency. Project preparation contin-ues with detailed planning and design stages,including drafting of tender documents andplans for benefit-sharing and mitigation.Adaptation of the criteria described here maybe necessary where the design and construc-tion are part of a single package.

Negotiations with all project-affectedpeople, their community representatives,and other stakeholders will continue ingood faith based on the outline agreementsreached during the feasibility stage. Theywould cover all environmental and socialplans; development programmes, includingbenefit-sharing plans; and construction-related issues. A clear agreement with theaffected people on the sequence and stagesof resettlement will be required beforeconstruction on any project preparatoryworks begins, such as access roads or riverdiversion works. In cases where thesenegotiations stall, an independent disputeresolution process is required. The negotiat-ed agreements will result in signed contractsbetween the developer and affected commu-nities and individuals, with clear targets forassessing compliance.

Clearance to tender the construction contractis given by the relevant authority and includesconditions for the award of the contract andoperations. Mitigation and monitoringmeasures are formalised into contractsbetween responsible parties, and compliancearrangements are in place.

Intended outcome




■ Stakeholders participated in the project designand the negotiation of outcomes that affect them(Guidelines 1, 2).

■ Indigenous and tribal peoples gave their free,prior, and informed consent to the project asdesigned (Guideline 3).


■ The stakeholder forum participated in assessingalternatives for the detailed layout of the dam,associated infrastructure, and its operation.


■ Cumulative and interactive impacts of existinginfrastructure were addressed in the design of thedam and agreements reached with stakeholdersand operators to modify operating rules of exist-ing dams where needed.


■ Acceptable rules were developed for reservoirfilling, commissioning and operation.

■ The final design includes provisions foremergency drawdown and decommissioning andis sufficiently flexible to accommodate changingfuture needs and values, including ecosystemneeds and ecosystem restoration (Guideline 12).

■ An environmental management plan incorporat-ing environmental flows and other mitigationand enhancement measures was agreed withstakeholders and defines monitoring and evalua-tion programmes.

■ The developer provided sufficient evidence todemonstrate that proposed mitigation anddevelopment measures will be effective in meet-ing their objectives.


■ Mitigation, resettlement, monitoring, and devel-opment plans were agreed with affected groups,and relevant contracts signed (Guideline 19).

■ Detailed benefit sharing mechanisms, and themeans to deliver them, have been agreed and setin place with affected groups (Guideline 20).

Ensuring Compliance

■ Independent panels reviewed and endorsedmitigation plans (Guideline 22).

■ Provisional sums for mitigation are included in thetender, and their financing has been confirmed.

■ A Compliance Plan was prepared, presented tothe stakeholder forum and formalised. Individualcompliance measures include mechanisms fordispute resolution (Guideline 21).

■ The developer has allocated funds for an effectivemonitoring and evaluation system coveringproject performance, safety and impacts. Institu-tional capacity exists to monitor and enforceagreements effectively.

■ A transparent process for short-listing contractorsand selecting tenders is in place and contractorswith a record of under-performance or corruptionon past projects were identified and debarredwhere appropriate.

■ Relevant performance bonds have been secured,trust funds established and integrity pacts signed(Guidelines 23, 24, 25).

■ The licence for project development defines theresponsibility and mechanisms for financingdecommissioning costs.

Sharing Rivers for Peace, Development andSecurity

■ Resolution was achieved where affected riparianstates had outstanding objections (Guideline 26).


Needs Assessment Selecting Alternatives PROJECT PREPARATION Project Implementation Project Operation

Chapter 9


Stage 4: Project implementation: confirming compliancebefore commissioning

Issuing the licence to operate will be contin-gent on compliance with mitigation measuresin addition to technical requirements. Thelicence will contain a number of conditionsfor the operation stage, including compliancewith operating rules, public notifications, damsafety, monitoring and periodic review. Allcontingencies cannot be anticipated, and abalance should be struck on a case-by-casebasis between the necessary level of certaintyand sufficient flexibility to accommodateopen, transparent, adaptive management.

Phasing of resettlement is required wherethe reservoir is being impounded as the damis constructed. Special attention is necessaryto ensure that compensation and develop-ment measures are in place well in advance.

Reservoir filling, commissioning of produc-tive capacity and the initial years of opera-tion are critical phases that require specialattention, intensive monitoring and contin-ued dialogue with stakeholder groups.Agreements on operating conditions arerequired for three stages of commissioning:

■ reservoir filling;

■ test operation; and

■ initial operation.

Full compliance with technical, environ-mental and social measures must be

Clearance to commission the project is givenby the relevant authority after all commitmentsare met. Relevant elements of performancebond sureties are released. The operatinglicence is confirmed, including specificrequirements for monitoring, periodic reviewand adaptive management.

Intended outcome achieved before the project is commissionedand enters full operation. This includes thebroad commitments of the project developeras laid down in the project licence, compli-ance plan, and related agreements, as well asthe commitments of the contractor acting asagent of the developer. Once the developerhas met specified staged commitments, theassociated financial sureties of any perform-ance bond or outstanding contractualpayments may be released.

Arrangements for public safety must be inplace in order to warn the downstreampopulation that sudden releases of watermay occur and may be dangerous. Compen-sation should be paid for any loss of liveli-hood, such as the loss of fishing opportuni-ties. If test operations cause downstreaminconvenience, compensation should alsobe paid – for example, if a test takes placeduring the dry season and damages recessionagriculture plots.

A range of agreements on initial and long-term operation should be incorporated inthe operating licence and provisions forimplementation verified. Licence periodsshould not normally exceed 30 years. Theyshould include:

■ agreement on environmental flow releasesto the downstream river;

■ releases to the downstream river for otherfunctions (navigation, water supply,downstream irrigation);

■ operating rules during normal and excep-tional floods;

■ procedures for opening spillway gates;

■ monitoring and publication of relevantoperation data; and

■ periodic review of operating rules.




■ Stakeholders participated in monitoring mitiga-tion measures and in negotiating outcomes thataffect them (Guidelines 1, 2).

■ Consultation mechanisms were agreed inadvance with stakeholders for any technical,social, environmental, or other problems thatmay be encountered during reservoir fillingand commissioning.

■ Contingency plans for emergency drawdown ofthe reservoir were agreed with stakeholdersbefore commissioning and were widelydisseminated.


■ Affected stakeholders have reviewed any changesproposed to the tender design that substantiallyaffect impacts, mitigation measures, benefitsharing, operational practices, or the monitoringprogramme.


■ Institutional co-ordination mechanisms thatrecognise interactive effects and cumulativeimpacts are in place to adjust operation ofexisting dams.


■ Required environmental mitigation measureswere implemented.


■ The mitigation, resettlement and developmentaction plan has been implemented and disputesresolved (Guideline 19).

Ensuring Compliance

■ An independent panel reviewed and endorsedimplementation of social, environmental, healthand cultural heritage mitigation measures (Guide-line 22).

■ Preparations have been made to implementlicence conditions for operations, implementcontinuing mitigation measures, undertakemonitoring and regular evaluation, and dissemi-nate information.

■ Monitoring of social, environmental and techni-cal aspects includes an intensive phase to coverthe rapid changes that occur in the impoundmentand commissioning period.

■ The developer has complied with pre-commis-sioning commitments as defined in the Compli-ance Plan (Guideline 21).

Sharing Rivers for Peace, Development andSecurity

■ Mechanisms were initiated for sharing monitor-ing information with riparian provinces or States(Guideline 26).


Needs Assessment Selecting Alternatives Project Preparation PROJECT IMPLEMENTATION Project Operation

Chapter 9


Stage 5: Project operation: adapting to changingcontexts

The objectives of dam management need tobe transformed from purely technical todevelopment-oriented goals that include socialand environmental considerations. This hasmajor repercussions for operation, monitoring,and evaluation of both existing dams anddams implemented in the future. Adaptivemanagement is needed to continuously assessand adjust operational decisions within thechanging context of environmental, social,physical and market conditions. This requiresa close relationship between the local commu-nity, other stakeholders and dam owners andoperators in order to minimise problems andquickly resolve any that do arise.

Monitoring programmes should:

■ include a full range of technical, environ-mental, social, and economic parametersdecided openly with the stakeholders;

■ have an intensive phase in the first fiveyears, or after a major change in operation;

■ feed back into project operations; and

■ be available to all stakeholders, perhaps inthe form of an annual report.

A comprehensive project evaluation isrequired three to five years after commission-ing and at regular intervals thereafter (everyfive to ten years is suggested). The evaluationis undertaken by the dam operator but is astakeholder-driven process and may draw onthe Commission’s case study methodology.

Conditions for operating under the licence arefulfilled and the licence conditions modified asnecessary to adapt to changing contexts.Monitoring programmes feed back into projectoperation. A process is initiated to decide onreparations, if necessary.

Intended outcome The evaluations would be:

■ comprehensive across all environmental,social, economic, and institutionalimpacts;

■ integrated to cover the interactionsbetween impacts;

■ long-term to consider impacts overseveral decades; and

■ cumulative to reflect impacts of otherstructural and non-structural measures inthe basin.

In addition to periodic evaluations, partiesother than the dam operator, or exogenousfactors may prompt re-planning studies. Forexample, a strategic or sectoral impactassessment may indicate the need for a re-planning exercise for a group of projects.Licence conditions should make provisionfor such studies and for any required changesto operating conditions through good faithnegotiations that recognise the rights of allparties. Any re-planning studies should bedone on the basin level.

Licences should specify transparent processesfor stakeholder participation in operations andprocedural requirements for monitoring andevaluation, safety inspection, contingencyplanning and information disclosure. Theregulatory authority or responsible govern-ment line agency must ensure compliancewith provisions of the licence. Non-commer-cial aspects of the licence should be madepublic. Re-licensing procedures should exam-ine present-day alternatives and be informedby an integrated review of project performanceand impacts. Impact assessments should beundertaken for all major changes includingdecommissioning where dams are no longerrequired or are too expensive to maintain.




■ Stakeholders are identified for consideration ofoperational issues and any proposed changes thatimpact on them or the environment (Guideline 1).


■ Periodic evaluations of all aspects of project opera-tion and performance are undertaken with theinvolvement of the stakeholder forum every 5 to 10years and agreements renegotiated as necessary.

■ Modernisation programmes and alternativeoperational regimes are considered as part ofperiodic reviews, replanning, or relicensingexercises through a participatory multi-criteriaapproach (Guideline 13).

■ Monitoring and evaluation programmes shouldexplicitly consider the influence of climatechange (namely increasing and decreasing rainfalland flows) on benefits and dam safety.

■ A full feasibility study, including analysis ofalternatives and impact assessment, is undertakenfor any proposal for any major physical change,including decommissioning.


■ Operations take account of environmental flowrequirements (quantity and quality) and ecosystemand social impacts are monitored (Guideline 15).

Recognising Entitlements and sharingbenefits

■ Detailed benefit-sharing mechanisms are modi-fied as necessary with the agreement of affectedgroups (Guideline 20).

Ensuring Compliance

■ Adverse social and environmental impacts andreparations issues are referred to the appropriaterecourse body (Guideline 19).

■ Annual reports of project monitoring pro-grammes, including social and environmentalaspects, are issued promptly and correctivemeasures are initiated to address issues raised inthe reports.

■ The requirements of remaining performancebonds or trust funds outlined in the CompliancePlan are periodically reviewed, and financialguarantees are released on satisfactory compli-ance with agreed milestones (Guideline 23).

■ Dam safety and inspection programmes areimplemented.

Sharing Rivers for Peace, Developmentand Security

■ Mechanisms exist to share monitoring informa-tion and resolve issues as they arise.


Needs Assessment Selecting Alternatives Project Preparation Project Implementation PROJECT OPERATION

These criteria are relevant to both existing dams (Chapter 8, Strategic Priority No.3) and the operational stages of future dams.

Chapter 9


A Special Case: Dams inthe PipelineThe strategic priorities and policy principlesoutlined in Chapter 8 are as relevant toprojects already at an advanced stage ofplanning and development as they are tothe selection of a project in the earlier

options assessment stage.Currently a large number of damprojects are at various stages ofplanning and development.While acknowledging thatdelays in implementation cancause unacceptable delays indelivering intended benefits, theWCD Knowledge Base has

demonstrated that it is never too late toimprove outcomes. On this basis, theCommission proposes an open and partici-patory review of ongoing and plannedprojects to ascertain the extent to whichproject formulation can be adapted toaccommodate the principles outlined in thisreport.

The essence of the process is that stakehold-er groups should have an opportunity todefine the scope of the review and topropose changes in keeping with the Com-mission’s recommendations. The extent ofany additional study or changes in projectconfiguration would depend on the stage ofplanning, design, or construction and bedetermined from a synthesis of the stake-holder consultations and, where appropriate,an inter-ministerial review. General actionsto guide the review for all projects wouldinclude:

■ undertake a stakeholder analysis basedon recognising rights and assessing risksto identify a stakeholder forum that isconsulted on all issues affecting stake-holders;

■ provide support to vulnerable anddisadvantaged stakeholder groups toparticipate in an informed manner;

■ undertake a distribution analysis to assesswho shares the costs and benefits of theproject;

■ develop agreed mitigation and resettle-ment measures to promote developmentopportunities and benefit-sharing fordisplaced and affected people;

■ avoid, through modified design, any severeand irreversible ecosystem impacts;

■ provide for an environmental flowrequirement and mitigate or compensateany unavoidable ecosystem impacts; and

■ design and implement recourse andcompliance mechanisms.

Governments may also use the review of‘dams in the pipeline’ as an opportunity tocompare the existing policy framework forplanning and implementation of water andenergy options with the criteria and guide-lines proposed by the Commission. This canserve to launch a process of internal reviewand modification of existing policies andlegislation, and reinforcement of appropriatecapacity that will facilitate implementationof the Commission’s recommendations infuture.

At specific stages of planning and projectdevelopment, regulators, developers and,where appropriate, financing agenciesshould ensure that the following project-related points are addressed:

Projects at feasibility stage

■ The stakeholder forum confirmed thatthe set of options considered was appro-priate, or identified other alternatives toconsider as part of the project impactassessment.

The Commission’sKnowledge Base has

demonstrated that it isnever too late to

improve outcomes.



■ Any bias in selection of alternatives isremoved or justified in a transparentfashion (for example subsidies to particu-lar sub-sectors or groups).

■ Demonstrated public acceptance existsfor the recommended options.

■ The assumptions underlying the econom-ic, financial, and risk analysis are justifiedand subject to sensitivity analysis.

■ Mechanisms for benefit-sharing areidentified.

■ An environmental flow requirement isdetermined.

Projects at detailed design stage

■ The stakeholder forum is consulted ondecisions related to project layout,operation and mitigation and develop-ment measures and relevant agreementsare negotiated with affected groups.

■ Environmental flow requirements aredetermined and incorporated into thedesign and operation rules.

■ A Compliance Plan is prepared, andrecourse mechanisms are identified.

■ Compliance mechanisms are providedfor in tender documents.

■ Benefit-sharing contracts are negotiatedfor displaced and project affected people.

■ A process for stakeholder involvementduring operation is established.

Projects under construction

■ The record of compliance is reviewedand a compliance plan is developed forremaining mitigation measures.

■ Existing commitments for resettlementand benefit-sharing are converted intoformal contracts.

■ An adequate social, environmental andtechnical monitoring plan is financed bythe developer.

■ The operating rules andcommissioning plan areagreed with a stakeholderforum.

■ A comprehensive post-project review is agreed fortwo to three years aftercommissioning, and everyfive to ten years thereafter.

This process of review impliesadded investigations or commit-ments, the re-negotiation ofcontracts and the incorporationof a Compliance Plan. As in the case ofinitial planning, the additional financialcosts incurred will be recouped in loweroverall costs to the operator, to government,and to society in general as a consequence ofavoiding negative outcomes and conflicts.

Governments may alsouse the review of ‘damsin the pipeline’ as anopportunity to comparethe existing policyframework for planningand implementation ofwater and energyoptions with the criteriaand guidelinesproposed by theCommission.

Chapter 9


A Set of Guidelines forGood PracticeThe guidelines outlined here describe ingeneral terms how to assess options and planand implement dam projects to meet theCommission’s criteria. The 26 guidelinesadd to the wider range of technical, finan-cial, economic, social and environmentalguidelines. They are advisory tools tosupport decision-making and need to beconsidered within the framework of existing

international guidance and current goodpractice. Further information is available onmany of these aspects in the WCD Knowl-edge Base.

The guidelines are presented under the samesub headings as the Commission’s sevenstrategic priorities. There are clear linkagesbetween individual guidelines and crossreferences to them are given in the criteriachecklists for the key decision points of theplanning and project cycles.

Strategic Priority 1: Gaining PublicAcceptance

1 Stakeholder Analysis

2 Negotiated Decision-Making Processes

3 Free, Prior and Informed Consent

Strategic Priority 2: ComprehensiveOptions Assessment

4 Strategic Impact Assessment for Envi-ronmental, Social, Health and CulturalHeritage Issues

5 Project-Level Impact Assessment forEnvironmental, Social, Health andCultural Heritage Issues

6 Multi-Criteria Analysis

7 Life Cycle Assessment

8 Greenhouse Gas Emissions

9 Distributional Analysis of Projects

10 Valuation of Social and EnvironmentalImpacts

11 Improving Economic Risk Assessment

Strategic Priority 3: AddressingExisting Dams

12 Ensuring Operating Rules Reflect Socialand Environmental Concerns

13 Improving Reservoir Operations

Strategic Priority 4: SustainingRivers and Livelihoods

14 Baseline Ecosystem Surveys

15 Environmental Flow Assessment

16 Maintaining Productive Fisheries

Strategic Priority 5: RecognisingEntitlements and Sharing Benefits

17 Baseline Social Conditions

18 Impoverishment Risk Analysis

19 Implementation of the Mitigation,Resettlement and Development ActionPlan

20 Project Benefit-Sharing Mechanisms

Strategic Priority 6: EnsuringCompliance

21 Compliance Plans

22 Independent Review Panels for Socialand Environmental Matters

23 Performance Bonds

24 Trust Funds

25 Integrity Pacts

Strategic Priority 7: Sharing Riversfor Peace, Development, andSecurity

26 Procedures for Shared Rivers

Chapter 9


Guidelines for Good Practice



1. Stakeholder AnalysisThe absolute value and the relative signifi-cance of ‘stakes’ vary, especially in whatthey represent for the interested party.Stakeholders have unequal power and thiscan affect their ability to participate in andinfluence decisions. A stakeholder analysisbased on recognising rights and assessingrisks should be used to identify key stake-holders for planned activities. The analysiswill also seek to understand and addresspotential factors that may hinder theirinvolvement. The analytic approach caninvolve stakeholder workshops, community-level surveys, key informant surveys, andliterature review.

The stakeholder analysis leads to theconstitution of a temporary stakeholderforum as a basis for participation and, whererelevant, negotiation processes throughoutthe planning and project cycles. A stake-holder forum is a dynamic construct and willneed to be applied to meet changing needsthrough the planning and project cyclesbeginning with needs assessment/verifica-tion and options assessment. The composi-tion of a stakeholder forum, the level ofrepresentation of various interests, and themeans of facilitating the process changesfrom stage to stage.

The stakeholder analysis will:

■ Recognise existing rights and those who holdthem. Those groups whose livelihoods,human rights and property and resourcerights may be affected by an interventionare major rights holders and thus corestakeholders in a stakeholder forumwithin which negotiated outcomesshould be achieved.

■ Identify those at risk through vulnerabilityor risk analysis and consider them as corestakeholders, including those who facerisk to their livelihoods, human rights,and property and resource rights. Specialattention should be given to indigenousand tribal peoples, women and othervulnerable groups as they may facegreater risks from development interven-tions (Guideline 3). In the case of a dam,the analysis should include those up-stream, downstream and in the proposedreservoir area. Relevant civil societygroups or scientists are included in astakeholder forum to ensure that environ-mental risks, for which there may be nochampion, are adequately reflected anddiscussed.

■ Identify constraints to establishing a levelplaying field for stakeholder involvement.The use of capacity building, institution-al strengthening, quota systems (forexample, to ensure proper representationof vulnerable groups such as women), orsupport mechanisms, such as NGOs orindependent facilitators to correct anyimbalance of influence should be ex-plored. Financial support may be neces-sary to ensure adequate participation.

The government planning body sponsoringthe planned interventions is responsible forinitiating the stakeholder analysis leading toconstitution of a forum and will participatein it. The final structure and composition ofa stakeholder forum should be decided in aconsultative process. The assistance ofindependent facilitators may be helpful inachieving this outcome.

A stakeholder forum is therefore formed ofindividuals representing various groups and

Chapter 9


interests. Such structures may exist alreadyand their capacity can be strengthened ormodified. Where such structures do not exist,a stakeholder forum is established as therepresentative body of the stakeholders. Theextent to which a stakeholder forum should beformalised to enable representation for thegroups identified through a rights-and-risksapproach will depend on country contexts.The status of a forum, and the selection of itsrepresentatives, should however ensureeffective participation for all interested andaffected parties and accommodate changesover time.

Effective participation in a stakeholderforum must be facilitated through timelyaccess to information and legal and othernecessary support. This is particularly thecase with indigenous and tribal peoples,women, and other vulnerable groups.

Sufficient time must also be allowed for thewider body of stakeholders to examineinformation and to consult amongst them-selves before decisions are made. Wheredispute resolution mechanisms are requiredfor negotiated processes, see Guideline 2.

2. Negotiated Decision-Making Processes

A negotiation process is one in which stake-holders – identified through the StakeholderAnalysis (see Guideline 1) – have an equalopportunity to influence decisions. Negotia-tions should result in demonstrable publicacceptance of binding and implementableagreements and in the necessary institution-al arrangements for monitoring complianceand redressing grievances. All stakeholderforum members should share a genuinedesire to find an equitable solution andagree to be bound by the consensus reached.

Attributes of a fair negotiationprocess

■ The Representation of Stakeholders in thestakeholder forum is assured through afree process of selection, ensuring theeffective and legitimate representation ofall interests.

■ The Integrity of Community Processesshould be guaranteed through assurancesthat they will not be divided or coerced,recognising that differences and internalconflicts may arise. The process and the

stakeholders should be as free as possiblefrom external manipulation. Communi-ties may legitimately decide to discontin-ue their involvement in the process iftheir human rights are not respected orin the event of intimidation.

■ Adequate time is allowed for stakeholdersto assess, consult and participate.

■ Special Provisions for Prior InformedConsent. In negotiations involvingindigenous and tribal peoples, mecha-nisms to resolve disputes should followprocedures recommended by the Com-mission (Chapter 8, Strategic Priority 1.4and Guideline 3).

■ Addressing Power Imbalances. Authoritiesshould make available adequate financialresources to enable stakeholder groupswho are politically or financially weak,or who lack technical expertise ororganised representation to participateeffectively in the process. These resourc-es may include financial support torepresentatives for logistics, for incomeforegone, for capacity building and forrequesting specific technical advice.



■ Transparency is ensured by jointly defin-ing criteria for public access to informa-tion, translation of key documents andby holding discussions in a languagelocal people can understand.

■ Negotiations are assisted by a facilitator ormediator, where stakeholders request it,selected with the agreement of thestakeholders.

For this to be a legitimate process, the stake-holders should:

■ agree on the appropriate structures andprocesses for decision-making, the requiredmechanisms for dispute resolution (includingany third party involvement), and the cir-cumstances in which they will be initiated;

■ agree that the interests at stake andlegitimate community needs are clearlyidentified, in particular on the basis ofrelevant rights and risks;

■ ensure that the available alternatives,their relevant consequences and uncer-tainties are given full consideration;

■ guarantee access to all relevant informa-tion to the stakeholder forum in anappropriate language; and

■ at the outset, agree on the timeframe forthe key milestones within the decision-making process.

Compliance with the process outlined abovewill be a fundamental consideration indetermining whether the negotiationsprocess was conducted in good faith.

When a negotiated consensus cannot beachieved through good faith negotiationswithin the agreed-upon timeframe, theestablished independent dispute resolutionmechanisms are initiated. These mayinclude amicable dispute resolution, media-tion, conciliation and/or arbitration. It isimportant that these are agreed upon by thestakeholder forum at the outset. Where asettlement does not emerge, the State willact as the final arbitrator, subject to judicialreview.

3. Free, Prior andInformed Consent

Free, prior and informed consent (PIC) ofindigenous and tribal peoples is conceived asmore than a one-time contractual event – itinvolves a continuous, iterative process ofcommunication and negotiation spanningthe entire planning and project cycles (seeChapter 8, policy principle 1.4). Progress toeach stage in the cycle – options assessmentincluding priority setting and selection ofpreferred options, and preparation, imple-mentation and operation of the selectedoption – should be guided by the agreementof the potentially affected indigenous andtribal peoples.1

Indigenous and tribal peoples are nothomogeneous entities. PIC should bebroadly representative and inclusive. Themanner of expressing consent will be guidedby customary laws and practices of theindigenous and tribal peoples and by nation-al laws. Effective participation requires anappropriate choice of community represent-atives and a process of discussion andnegotiation within the community that runsparallel to the discussion and negotiationbetween the community and external actors.At the beginning of the process, the indige-nous and tribal peoples will tell the stake-holder forum how they will express theirconsent to decisions including endorsementof key decisions (Guideline 1).

Chapter 9


An independent dispute resolution mecha-nism to arrive at a mutually acceptableagreement should be established with theparticipation and agreement of the stake-holder forum, including the indigenous andtribal peoples, at the beginning of anyprocess. It is inappropriate to set rigid

guidelines or frameworks, as these must benegotiated as the process proceeds. Theoutline presented in Guideline 2: NegotiatedDecision Making Processes is intended to offersome basic direction to those involved withsuch processes and independent disputeresolution bodies.

4. Strategic ImpactAssessment forEnvironmental, Social,Health and CulturalHeritage Issues

Strategic impact assessment (SA) is arelatively recent tool that can be used toprovide a new direction to planning process-es. It provides an entry point that defineswho is involved and maps out the broadissues to be considered. The Commissionproposes that the SA process starts by recog-nising the rights to be accommodated, assess-ing the nature and magnitude of risks to theenvironment and affected stakeholdergroups, and determining the opportunitiesoffered to these groups by different develop-ment options (Guideline 1). It should alsoidentify where conflicts between variousrights exist and require mediation.

SA takes the concept of project level impactassessment and moves it up into the initialphases of planning and options assessment.It is a broad assessment covering entiresectors, policies and programmes, andensures that environmental, social, healthand cultural implications of all options areconsidered at an early stage in planning. It isa generic term that includes a range ofplanning tools for example, sectoral envi-

ronmental assessments (EA), basin-wideEAs, regional EAs, and cumulative EAs.2

SA should be concerned with the uses andimpacts of existing water and energyprojects, as well as alternatives for meetingfuture needs. In practice, SA may havedifferent levels of detail, depending onwhere it is applied. At one level, the SAwould scan and identify priority issues to beaddressed subsequently in more detailedplanning exercises. For example, the SAwould identify whether evaluations ofexisting projects have been undertaken, orwhether outstanding social issues on specificprojects had been addressed. At this level,the SA would also assess whether a suffi-cient range and type of options are beingconsidered in the different planning process-es to meet future needs. In cases where theSA is more elaborate and detailed, theexercise may be extended to host a genericoptions assessment process using stakeholdergroups and multi-criteria formulations toscreen and rank options (Guideline 6).

The general goals of SA include:

■ recognising the rights of stakeholdersand assessing the risks;

■ incorporating environmental and socialcriteria in the selection of demand andsupply options and projects before major




funds to investigate individual projectsare committed;

■ screening out inappropriate or unaccept-able projects at an early stage;

■ reducing up-front planning and prepara-tion costs for private investors andminimising the risk that projects en-counter serious opposition due to envi-ronmental and social considerations; and

■ providing an opportunity to look at theoption of improving the performance of

existing dams and other assets fromeconomic, technical, social and environ-mental perspectives.

SA must be revisited at appropriate intervalswith periodic ‘state-of-the-sector’ reporting.Important variables determining the frequencyand intensity of this on-going process includedevelopments in the economy, in technology,in demography and in public opinion. Reviewof SA reports at the highest political level (forexample Parliament) is desirable.

5. Project-Level ImpactAssessment forEnvironmental, Social,Health and CulturalHeritage Issues

Project-level impact assessment (IA) isalready standard practice in many countries,and the term is used here to include envi-ronmental, social, health and culturalimpacts. Deficiencies in past implementa-tion have been identified and improvedprocesses are needed.3

The following changes are proposed to theway project level IAs are implemented:

■ Projects should be subject to a two-stageIA: the first is a scoping phase, includingfull public participation, that identifieskey issues of concern and defines theterms of reference for the second, assess-ment, phase (Guideline 1).

■ The timing of the IA should allow theresults to feed into the final design of theproject. There should be a total integra-tion of technical, environmental andsocial studies during the design stage.Although executed by different studygroups, these studies should run concur-

rently and interactively with regularexchange of information between allstudy groups.

■ IAs should be carried out independentlyof the interests of the project developerand financing mechanisms should reflectthis independence.

■ IA should include an EnvironmentalImpact Assessment, a Social ImpactAssessment, a Health Impact Assessment(see Box 9.1), and Cultural HeritageImpact Assessment (see Box 9.2) asexplicit components and comply withinternational professional standards. Theassessments should be sufficiently de-tailed to provide a pre-project baselineagainst which post-project monitoringresults can be compared.

■ An independent panel of experts (re-porting formally to the highest environ-mental protection authority) should beappointed to assist the government andthe developer in reaching sustainablesocial and environmental outcomes(Guideline 22). The developer mustrespond to all issues raised by the paneland explain how they will be addressed.The panel’s findings and the developer’sresponse are to be made public within a

Chapter 9


reasonable period (for example, sixweeks).

■ Developers should open a local liaisonoffice to ensure adequate access toinformation for local affected communi-ties in appropriate languages.

■ The IA process should culminate in aseries of written agreements with thosedepartments or organisations that arerequired to implement mitigation,development and compensation plans, orrespond to the impacts. The scope ofthese agreements must be fully definedprior to tendering for construction.

■ The IA process continues through andbeyond project construction and ade-quate institutional and financial arrange-ments for social and environmental auditand monitoring should be included inthe planned measures. Contracts withmonitoring agencies (for example researchinstitutes or NGOs) should be agreed priorto tendering for construction.

■ A redress procedure should be put inplace that provides mechanisms foraddressing grievances during the resettle-ment plan and following construction.

■ IAs should be public documents, postedon relevant websites, and disseminatedin appropriate languages.

■ IA should be guided by the precautionaryapproach.

The precautionary approach requires Statesand water development proponents toexercise caution when information isuncertain, unreliable, or inadequate andwhen the negative impacts of actions on theenvironment, human livelihoods, or healthare potentially irreversible. A precautionaryapproach entails improving the informationbase, performing risk analysis, establishingprecautionary thresholds of unacceptableimpacts and risk, and not taking actionswith severe or irreversible impacts untiladequate information is available or untilthe risk or irreversibility can be reduced,making outcomes more predictable. Nor-mally the burden of proof will be on thedeveloper.

Decision-makers are faced with the dilemmaof how to reconcile competing or conflictingrights and needs. The precautionary ap-proach forms part of a structured approachto the analysis of risk, as well as beingrelevant to risk management. Determiningwhat is an acceptable level of risk should beundertaken through a collective political

A health impact is a change in health risk reasonably attributable toa project, programme or policy. A health risk is the likelihood of ahealth hazard or opportunity affecting a particular community at aparticular time. Health Impact Assessment (HIA) is part of theoverall risk assessment process (economic, social and environmentalrisks) to assess the viability of a project.

The Health Impact Assessment has the following components.

■ Assessing the health condition of people in reservoir, infra-structure, downstream, resettlement, irrigation, and otherimpact areas. The assessment process should engage localpeople and resources. The parameters derived from theinformation collected constitute the baseline health situationof the population.

■ Predicting changes in health determinants that can bereasonably attributed to the project and that could affectpeople during each stage of the project. The changes, takentogether, produce health outcomes or changes in healthstates. These are expressed in a minimum of three ranks: nochange, increased health risk, and health enhancement.Factors determining health outcomes in past projects involv-ing comparable social, economic and environmental condi-tions can be used to enhance predictability.

■ Assessing the cost of preventing and mitigating the potentialhealth impacts in the overall cost assessment of the project.

■ Developing measures to prevent, minimise and mitigatehealth impacts with the participation of the potentiallyaffected people and incorporating these into contractualimplementation arrangements with adequate financialprovision.

Source: WHO, 1999, WCD Working Paper

Box 9.1: Health impact assessment



process. The process should avoid unwar-ranted recourse to the precautionary ap-proach when this can overly delay decision-making. However, decision-makers facedwith scientific uncertainty and publicconcerns have a duty to find answers as longas the risks and irreversibility are consideredunacceptable by society.

6. Multi-Criteria AnalysisMulti-criteria analysis (MCA) processes use amix of qualitative and quantitative criteria toassess and compare options that may bepolicies, programmes, or projects. Stakeholder-driven MCA processes are flexible and open,based on the concept of a stakeholder forum(see Guideline 1). Their primary purpose is toprovide a structured process to screen and rankalternatives and help understand and resolvedifferences between groups of stakeholdersinvolved in development decisions.4

The multi-disciplinary planning team with atime-bounded mandate supports all phasesof the MCA process. The results at eachstage should be made available to thestakeholder forum and for widerpublic review. A public hearingshould be held on the outcome ateach stage if the significance ofthe process warrants it. If theMCA process cannot resolve allconflicts, the use of MCA maystill assist in identifying policyscenarios and the way differentgroups and interests perceive them.There are many ways of presentingthe results of the MCA. One ofthem is the preference matrix,which demonstrates the equalemphasis given to social, environ-mental, technical and economicparameters (see Figure 9.3).

Figure 9.3 Preference matrix for ranking options

Envi

ronm

enta

l and

Soc

ial P

refe

renc

e(C

ompo

site

Env

ironm

enta

l/Soc

ial S

core

)

Low High

High

0 50 100

Technical Preference(Composite Technical/Economic Score)

Cultural heritage resources are the cultural heritage of a people, a nationor humanity as a whole, and can be on the surface, underwater orunderground. They comprise:

■ Cultural practices and resources of current populations - religions,languages, ideas, social, political and economic organisations, andtheir material expressions in the forms of sacred elements of naturalsites, or artefacts and buildings;

■ Landscapes resulting from cultural practices over historical andprehistoric times; and

■ Archaeological resources, including artefacts, plant and animalremains associated with human activities, burial sites and architecturalelements.

Cultural Heritage Impact Assessment (CHIA) requires adequate time forsuccessful completion and should be looked at in two stages. Firstly,where regions and river valleys are known to be rich in cultural resources,landscapes, or archaeological resources, consideration of these elementsshould be included in Strategic Impact Assessments (Guideline 4) andused as a criterion in selecting options and avoiding impacts. Secondly, aproject level mitigation plan is developed where a dam option proceedsto full feasibility phase.

The following procedural aspects need to be considered:

■ financial resources should be specifically allocated to CHIA;

■ the assessment team should include archaeologists and, if necessaryarchitects and anthropologists;

■ where cultural assets have significant spiritual or religious significance allactivities should be planned with the consent of relevant communities;

■ assessments should culminate in a mitigation plan to address thecultural heritage issues identified through minimising impacts, orthrough curation, preservation, relocation, collection or recording; and

■ a separate report should be produced as a component of the overall IAprocess.

Source: Brandt and Fekri, 2000, WCD Working Paper

Box 9.2: Cultural heritage impact assessment

50

100Attractive Projects

to Proceed toFurther Study or

Development

Projects Droppedfrom Further

Consideration

Chapter 9


Attributes and steps of MCA processes toselect the best mix of options are:

Step 1:

The sponsoring agency prepares terms ofreference for the overall process and a stake-holder analysis, and establishes an informationcentre. Representative stakeholder groups arecontacted, and the general public is informedthrough print and electronic media.

Step 2:

A stakeholder forum is formed and repre-sentatives of stakeholder groups identifiedsubject to public review and comment. Amulti-disciplinary planning team is formedto support the process and assembles aninitial inventory of options.

Step 3:

Public comment is invited on the optionsinventory including proposals for additionaloptions to be considered. The stakeholderforum confirms the comprehensiveness andadequacy of the options inventory. Wherenecessary, additional steps are taken toexpand the inventory.

Step 4:

The stakeholder forum decides on the criteriafor screening the options and criteria forcoarse and fine ranking of options are estab-lished with input from the planning team.

Step 5:

Options are screened by the planning teamaccording to the agreed criteria, results arepresented to representatives of the stakeholdergroup for approval and subsequently an-nounced for wider public review or comment.

Step 6:

Sequential steps of coarse and fine rankingof options (where the number of options islarge) are prepared by the planning teamand submitted to the representatives of thestakeholder forum at each stage. The list ofoptions at each stage is made public and anadequate period for comment is providedbetween each stage. Public hearings may beheld at each stage if appropriate.

Step 7:

The final selection of options that wouldform the basis for detailed planning ispresented to agencies, communities, orgroups responsible for the detailed planning.

These steps lead to preparation of a limitedset of diverse development plans comprisinga range of options emerging from thescreening process. The multi-criteria exer-cise may be repeated to evaluate thesealternative plans and select a preferreddevelopment plan.

7. Life-Cycle AssessmentLife-cycle assessment (LCA) is an optionsassessment procedure used in the energysector to compare ‘cradle-to-grave’ perform-ance, environmental impacts, and marketbarriers and incentives for different demandand supply options. LCA is located at thefront end of the planning cycle. Its resultsmay be fed into multi-criteria screening andranking processes, which are a basis for

deciding which options to include insubsequent stages of planning. Alternatively,the information generated by LCA is usedto develop regulatory policies, for examplepolicies addressing barriers limiting themarket penetration of options otherwiseconsidered to be in the interest of society.5

LCA assessments can be simple and genericor exhaustively detailed, data-rich, andelaborate. LCA procedures that quantify the



potential impacts of different options onland, air and water resources, includinggreenhouse gas (GHG) emissions, can betransferred and adapted to differentcountries. The analytical framework used toassess the direct, indirect, and hiddenincentives and market barriers for differentoptions through the full chain ofdevelopment is also transferable.

LCA would typically include:

■ categorisation of the different stages inthe life cycle of each option where theimpacts and effects are relevant (forexample from resource extractionthrough transport, manufacturing,building, operation and refurbishment todecommissioning);

■ identification of the material flows andresource impacts at each stage andcomparison of each option using a set of

indicators (for example net efficiencies,the consumption of resources, or theimpact per unit of output of the option –such as land use, water use, GHG emis-sions, and other gaseous, liquid or solidpollution streams); and

■ identification of the range and magni-tude of the direct, indirect, and hiddensubsidies, external factors and incentivesacross each stage of the life cycle of eachoption.

The most advanced use of LCA is in thepower sector, where it is particularly usedto consider the GHG emissions of variousoptions. These factors are becoming theprime driving force behind energy andpower sector policies in many countriesincluding Europe, Australia and Canada,and reflect the Kyoto Protocol (Guideline8).

8. Greenhouse GasEmissions

Recent research indicates that reservoirs canemit greenhouse gases. Precise assessmentsare especially important to assist in selectingclimate-friendly options and if hydropowerprojects seek to benefit from any form ofcarbon credit. The emissions from thenatural pre-impoundment state should beincluded in the comparison with otheroptions. Good field studies with modellingpredictions of emissions should be anexplicit component of relevant feasibilitystudies.6

Procedures to calculate emissions for con-ventional and renewable options are wellestablished and available but are continuallyevolving. An expert workshop convened bythe Commission and held in Montreal in

February 2000 decided that net emissionsfrom reservoirs above baseline emissions arethe appropriate estimates. To calculate netemissions, the planner must:

■ assess the carbon (CO2, CH4) andnitrogen cycles (N2O) in the pre-im-poundment watershed context – thisinvolves establishing a carbon budget,including description of flow rates,concentrations, residence time and otherrelevant measures;

■ assess future changes to carbon inputs inthe watershed from various activities,including deforestation;

■ assess the characteristics of proposedreservoir(s) and inundated area(s) thatwill change the carbon cycle, includingsize, temperature, bathymetry, primaryproductivity and other relevant measuresafter dam completion; and

Chapter 9


■ assess the cumulative emissions frommultiple dams on a watershed basis incases where a dam and its operations arelinked to other dams.

More baseline measurements are required onreservoirs on existing projects to extend

understanding of the scale of GHG emis-sions to temperate and semi-arid regions ofthe world and to catchments with largeurban populations. Such data will provehelpful in taking informed decisions onenergy options and climate change.

9. Distributional Analysisof Projects

Distributional analysis provides stakeholdersand decision-makers with information onwho will gain and lose from a project and isan essential tool in promoting more equita-ble distribution of benefits and costs.7 Thesegains and losses may be expressed in eco-nomic or financial terms, or they may bemore simply expressed as changes in physicalquantities. In some cases only the direction ofa specific impact may be discernible.

Integrated distributional analysis requiresassessment of the full range of projectimpacts including financial, social, environ-mental and economic aspects assessed eitherin a qualitative fashion, quantified in non-monetary terms, or valued in financial oreconomic terms. A number of methodsfocusing on specific aspects of distributioncan be used within the overall approach atdifferent stages of the planning cycle.

■ Equity (or poverty) assessment comprisesan assessment of the impacts (in economicor non-economic terms) and risks of aproject on specific sub-populations orgroups of concern.

■ Macroeconomic or regional analysisincludes an analysis of the wider economicimpacts using either a simple economic orfiscal impact analysis or a formal regionalor macroeconomic model.

■ Economic distributional analysis includesan explicit analysis of distribution of the

direct costs and benefits of the project,including those external social and envi-ronmental impacts that are to be valued(Guideline 10). This builds on the finan-cial and economic cost-benefit analyses.

Selecting options: Integrated distributionalanalysis at a preliminary level should beinitiated during the early stages of screeningand selecting options as part of the strategicimpact assessment. It can be carried forwardat an increasing level of detail for projectsthat emerge for further consideration fromthis process. At the preliminary level ofanalysis, a matrix is prepared to identify thegroups that will either receive benefits orbear the costs of the project and indicate theapproximate scale of such costs or benefits.A qualitative equity assessment should alsobe undertaken and inform the screeningprocess about the comparative impacts ofalternatives on vulnerable groups in society.

Feasibility stage: A more detailed and inte-grated distributional analysis should beundertaken during the feasibility study andinclude both an economic distributionanalysis and equity assessment. The use of amacroeconomic or regional analysis isrecommended for projects with a significantirrigation component or inter-basin transferwhere there are broader objectives in termsof redistributing income between regions ormaking a sustained contribution to themacroeconomy. The distributional analysisshould be undertaken in full consultationwith project stakeholders.



10. Valuation of Social andEnvironmental Impacts

The methodologies and applications tovalue environmental and social impacts ofdams can be used to ensure that impacts areinternalised in the economic analysis whereappropriate and possible (see Table 9.1).Where it is undesirable or not possible toexpress such impacts in economic terms,they should be considered separately asparameters in the multi-criteria analysis (seeGuideline 6).

Expertise and experience with these meth-ods in industrialised countries are wide-spread, and many examples exist of theirapplication to the impacts of dams.8 Typi-cally, valuation of the impacts of new damsor the decommissioning of old dams in suchcountries deals with recreation, tourism,fisheries and, increasingly, people’s prefer-ence for healthy ecosystems.

A range of methods is available, includingthose based on observed market behaviour,the stated preferences of individuals, ormodelling of choices made by respondentsin market surveys. Their purpose is to valuepreviously hidden costs and benefits andmake them explicit in decision-making.Whatever the context, the derivation ofmonetary values for the unmitigated envi-ronmental and social impacts of projects isnecessary when it assists the transparent,participatory, and explicit examination ofproject and policy alternatives. Whetherthese include the valuation of cultural,biodiversity or other intangible values inmonetary terms will depend on the localcontext and on stakeholders’ views. Asnoted, such aspects are often better ad-dressed as an individually weighted compo-nent in a multi-criteria analysis.

Many of these valuation methods areequally applicable in the developing worldand capacity to apply them increased rapidlyin the 1990s. They have been adapted tothe rural, developing context, particularly incombining participatory approaches withvaluation methods and integrating econom-ic valuation into multi-criteria analysis.Many of the external impacts of large damsaffect household livelihoods and thus shouldbe assessed using relatively straightforwardmarket or revealed-preference methods. Inparticular, a series of relatively straightfor-ward methods such as productivity andsubstitute-goods methods may be applied toestimate how changes in water quantity,quality, and flow regime affect householdproductivity and consumption. Thesemethods also apply to the impact of changesin water flows on downstream communitiesand their natural resources, as well as impactson major ecosystem functions and serviceswhere these provide an economic good. Forexample, sediment flows and deposition alongthe coast, which if interrupted, may lead to aneed for erosion control measures.

Studies of this nature should involve at leastthree steps:

■ a scoping exercise to identify and selectimpacts to be valued;

■ valuation studies; and

sdohtemnoitaulaV:1.9elbaT

ruoivaheBdevresbO ruoivaheBlacitehtopyH

tceriD secirPtekraM secnereferPdetatS

secirptekramevitetepmoCgnicirpwodahS

noitaulavtnegnitnoC,eciohc)suomotohcid(

semaggniddib,yap-ot-ssengnilliw

tceridnI secnereferPdelaeveR gnilledoMeciohC

sdohtemytivitcudorPerutidnepxe)evisnefed(evitrevA

tsoclevarTgnicirpcinodeHsdoogetutitsbuS

mudnerefertnegnitnoCgniknartnegnitnoC

ruoivahebtnegnitnoCgnitartnegnitnoC

snosirapmocesiwriaP

.0002.mmoc.srep,reibraB;0002.mmoc.srep,ecraeP;3991,nameerF:ecruoS

Chapter 9


■ public meetings to report back to thestakeholder forum on the results of thestudies.

The scoping exercise may be incorporated intothe initial stage of project impact assessment

11. Improving EconomicRisk Assessment

All infrastructure projects and commercialundertakings involve risk, uncertainty andirreversibility. Project risk assessmentsgenerally take into account technical,economic and financial aspects.9 TheCommission recognises the nature of socialand environmental risks and that these canbe addressed through other mechanisms(Guidelines 4, 5, 18).

The following are recommended as a generalapproach for technical, financial andeconomic risk assessment:

■ the assessment of risks should be includ-ed in all steps of the planning cycle;

■ identification and selection of risks forassessment should be undertaken as partof the larger stakeholder and multi-criteria processes;

■ past performance of large dams should beused to identify likely ranges for thevariables and values to be included inrisk and sensitivity analysis; and

■ sensitivity analysis should be complement-ed by a full probabilistic risk analysis.

Good practice involves the use of probabil-istic risk analysis, a quantitative techniquethat employs the probability distributions ofindividual variables to produce a consolidat-ed single probability distribution for thecriteria of interest.

(see Guideline 5). Finally, the informationgenerated through valuation studies shouldhave an explicit role in informing not onlyapplicable cost-benefit and distributionalanalyses, but also the negotiations betweenstakeholders and decision-makers.

For example, in determining economic risk,the probabilities of different values forinflows and power generation can be com-bined with probabilities of cost overruns in acost-benefit analysis to result in a probabili-ty distribution of net returns. This providesa robust assessment of the risk of differentoutcomes (see Box 9.3). It introduces amore effective approach than the simplesensitivity analysis used to assess the effectof potential changes in important variableswhere the cost-benefit analysis may havebeen re-run for a number of individualscenarios. For example, the sensitivityanalysis is used to see whether the project isstill profitable when the planned projectcosts increase by 20%.

In implementing these general recommen-dations on economic risk analysis across theplanning cycle, a number of specific sugges-tions should be considered.

At all stages:

■ improved prediction of project costs byusing a frequency distribution of the costoverruns for similar projects.

At options assessment stage:

■ a simple sensitivity analysis using agreedvalue ranges for key variables; and

■ a qualitative comparison of optionsunder consideration in terms of theuncertainty associated with the cost andbenefit streams of each project.



At the feasibility stage

■ a full probabilistic risk analysis of eco-nomic profitability;

■ modelling of changes and variability inhydrological estimates that may resultfrom climate change and their effect ondelivery of services and benefit flows;and

■ investigation of the likely benefits of riskreduction measures and the costs thisentails.


12. Ensuring OperatingRules Reflect Social andEnvironmentalConcerns

Agreements on operating conditions shouldreflect commitments to social and environ-mental objectives in addition to the com-mercial interests. At all times the safety andwell being of the people affected must beguaranteed throughout the project cycle. Alloperating agreements should be available tostakeholder groups.

River diversion during construction

Emergency warning and evacuation plansare needed in the event of overtopping oftemporary diversion works. Licence condi-tions should assign responsibility for com-pensation to the downstream population forany damages that occur during such events.

The World Bank appraisal of the Ghazi-Barotha hydroelectric project inPakistan used a probabilistic risk assessment of the economic rate ofreturn (EIRR) of the power expansion programme, with the riskssummarised under four scenarios: demand uncertainties, cost profiles,schedule delay, and amount of additional capacity provided by privateprojects. Each scenario has three alternative states. Probabilities wereassigned to each scenario so that a weighted average EIRR could beobtained. This yielded 54 total possible outcomes. For each one theexpected value of the EIRR, calculated as probability times its ownEIRR, is then summed over all outcomes to give the expected EIRR. Aprobability distribution of EIRR was then calculated for the overallpower sector programme and for the project alone.

The results indicate that the risk-weighted EIRR on the overall invest-ment programme is 18.5%. This is lower than the Base Case estimate,but considerably higher than the opportunity cost of capital at 12%.The probability of the EIRR falling below the opportunity cost of capitalis estimated at 8%. The risk-weighted EIRR proved quite robust tochanges in the basic probabilities.

Source: World Bank, 1995.

Box 9.3: Ghazi-Barotha, Pakistan

The compensation would be limited tothose impacts caused by the breach, overand above the natural flood event.

Releases to the downstream river to satisfydrinking water and environmental require-ments should be maintained during riverdiversion. If, for technical reasons, flow isinterrupted, the operator must guaranteethat alternative supplies of drinking waterwill be made available to the downstreampopulation.

Reservoir filling

During the reservoir filling period, thereshould be releases of good quality water tothe downstream river to satisfy drinkingwater, irrigation, and environmental re-quirements. If the water quality is expectedto be poor, then – as with the agreement onriver diversion – alternative supplies of

Chapter 9


drinking water must be made available forthe downstream population.

Test operation

Test operation of the spillway (if gated), ofother outlet works, and of the turbines canlead to major sudden releases to the down-stream river, endangering human andanimal life. The operator will be responsiblefor warning the downstream population thatsudden releases may occur and may bedangerous. Local fishers will be compensatedfor days when fishing is impossible. If testoperation takes place during the dry season,people experiencing damage to recessionagriculture must be compensated.

Operation

A range of agreements on the operatingphase should be covered in the licence:

■ environmental flow releases to thedownstream river;

■ minimum technical releases to thedownstream river (for navigation, watersupply, downstream irrigation and so on);

■ maximum ramp rates for downstreamreleases (to avoid problems with naviga-tion and damage to the river banks);

■ water allocations during normal operation;

■ operation during normal and exceptionalfloods;

■ warning of people potentially affectedand rules for evacuation of people andanimals;

■ opening of spillway gates;

■ periodic safety inspection by independ-ent parties;

■ drawdown procedure if dam safety is indoubt;

■ monitoring of relevant operation data anddissemination of data to stakeholders; and

■ periodic review of operating rules.

13. Improving ReservoirOperations

A range of project specific non-structuraland structural methods to adapt, modify,improve, or expand operations of dams andassociated facilities may be considered atdifferent periods in time. Structural meas-ures may include modernising equipmentand control systems and improving civilstructures such as spillways, intakes andcanals. Non-structural measures generallyinvolve a change in reservoir operationpractices to optimise benefits, cater tochanging water use priorities, enhanceconjunctive operation, or improve sedimentmanagement. Dam safety improvement andupdating contingency plans for operation ofreservoirs in extreme flood events are otheraspects of adaptive management.10

Detailed technical guidelines are available onways to change reservoir operations either byadapting existing rule curves or introducingmore modern computerised decision supportsystems, including real-time data inputs,simulations and forecasting. In adaptingreservoir operations owners/operators should:

■ work with stakeholders to collect viewson current reservoir operations and viewson the need, concerns, and limitations ofpotential future changes in water releasepatterns, including downstream impacts;

■ confirm any change in the priority ofwater uses (such as environmental flows)and evaluate the scope to use flowforecasting to optimise reservoir opera-tion (Guideline 15);

■ use simulation models where feasible, toassess the scope for optimising the supplyof water and energy (for example timing,



quantity) into the system (for exampleirrigation canal system and conjunctive useof groundwater, power grid or waterdistribution system) to improve the overallvalue of the services in the system;

■ assess the ability to operate the reservoirto optimise delivery of services usingcomputerised models;

■ assess the scope to further optimiseinteractive operation of the reservoirwith other reservoirs, diversions orfacilities using basin-level decisionsupport systems;

■ provide clear responsibilities and proce-dures for emergency warning and improvedpreparedness of downstream countries,operator training and downstream evacua-tion in extreme flood events; and

■ ensure monitoring systems are in place andfeed into operational decision making.

Sediment management is one area whereincreased attention is needed. A sedimentmanagement plan would consist of:

■ monitoring sediment in the reservoir,including quantitative and qualitativeanalysis of sediment to verify propertiesand pollution levels;

■ minimising sediment deposition inreservoirs where possible by sluicing ordensity current venting;

■ removing accumulated deposits wherepossible by drawdown flushing (drawingthe water level down during high-flowseasons), and excavation of sediments;and

■ catchment management programmes toreduce sediment inflow to the reservoirwhere possible as part of a basin-wideplan.


14. Baseline EcosystemSurveys

The effectiveness of mitigation, enhance-ment, compensation and monitoring meas-ures require better baseline knowledge andunderstanding of ecosystems. Baselineassessments inform both the national policyon maintaining rivers and requirements forenvironmental flows and other compensa-tion and mitigation measures. They are notrestricted simply to an ‘impact statement’,but instead gather the necessary baselineinformation prior to alternatives beingassessed.11

The baseline surveys aim to establish thelink between the hydrological regime of the

river and its associated ecosystems. Baselinesurveys should gather relevant informationon:

■ the life cycle of important fish species(especially migratory species);

■ the distribution of habitat for threatenedor endangered species;

■ important areas for biodiversity; and

■ key natural resources for riverine com-munities.

The studies should explicitly identify wheremodifications to flow or water quality willhave significant impacts on biodiversity,habitats, or riverine communities andprovide the scientific basis for testing flowand quality scenarios against ecosystem

Chapter 9


responses (Guideline 15). Such studieswould normally be undertaken over severalseasonal cycles.

Appropriate research agencies staffed withspecialised scientists should undertake

baseline surveys, assisted where necessary byinternational networks. Enhanced local andregional capacity will help identify, under-stand and manage environmental impacts,hence improving environmental outcomesfor current and future dams.

15. Environmental FlowAssessments

Dams should provide for an environmentalflow release to meet specific downstreamecosystem and livelihood objectives identi-fied through scientific and participatoryprocesses. In some cases managed floods maybe necessary to maintain downstreamfloodplains and deltas. Several approachesare available for assessing environmentalflow requirements (EFR), ranging from‘instream flows’, which refer to within-bankflows, to ‘managed flood releases’ designedto overtop and supply floodplains and deltas.‘Environmental flow’ includes all of these andstresses the need to meet clear downstreamsocial and ecosystem objectives rather thansimply releasing a quantity of water.12

Environmental flow assessments (EFA) canbe done at several levels of detail, from asimple statement of water depth to providewetted habitat for a particular fish species toa comprehensive description of a flowregime with intra-annual and inter-annualvariability of low flows and floods in orderto maintain complex river ecosystems.Confidence in the suitability of an EFA tomeet its objective is linked to the level ofinvestment in appropriate specialist inputs.

Holistic methodologies contribute to adetailed understanding of the merits anddrawbacks of a series of competing waterresource options in terms of required river

flow, water available for off-channel use, andthe social and economic implications.Sophisticated habitat-modelling techniquesprovide additional detailed information onthe flows required for specific valued riverspecies or features, where the targeted riversare of high conservation importance or havea high likelihood of conflicts over water.

EFRs are an integral part of the impactassessment process (see Box 9.4.). Continualinteraction with the design team is essentialto ensure that the least damaging and mostflexible options are retained and that thedam design reflects the structural andoperational needs of the flow release.

The Knowledge Base provides guidance onthe following steps to informed decision-making leading from baseline surveys toenvironmental flows13 :

Step 1: Situation assessment

Identify the extent of the targeted riversystem likely to be affected by a dam –upstream, downstream, and in the reservoirbasin – and alert decision-makers to thelikely ecological and social issues that willneed to be addressed. This draws on data inthe baseline surveys, where these exist.

Step 2: Specialist surveys andidentification of ecosystemcomponents

A range of specialists (ecologist, geomor-phologist, sociologist, and resource econo-mist) undertakes field surveys to provide acomprehensive description of the affected



river. The studies link flow-related informa-tion with ecological and social values.

Step 3: Developing predictivecapacity on biophysical responses todam-related flow changes

The team develops data sets, models andvarious analytical tools that can be used inscenario creation to assist decision-making(Step 5). These may include, for instance,specifying conditions needed for a certainfish species to spawn, or how water qualitydiffers between the rising and falling arms ofa flood hydrograph, or how downstreamfisheries and pastures will be affected.

Step 4: Predicting social impacts ofthe biophysical responses

The present river use, exploitation of river-related natural resources, and health profilesof the affected people and their livestock arequantified, and possible flow-related healthrisks are identified.

Step 5: Creating scenarios

Scenarios are created that include social,biophysical, and economic parameters andpresent a series of future options for deci-sion-makers. Scenarios may be defined by:

■ the volume of water required as yield fromthe dam – the rest is allocated to the river;

■ protection of a valued species,community, or river feature, in whichcase a flow regime to achieve this wouldbe described;

■ a definition of the priorities of thecompeting users, and a description of theresulting flow regime and its effect onriver condition; and

■ river rehabilitation downstream of anexisting dam, in which case the best thatcan be achieved within the designlimitations of the dam is described.

In addition, the ‘no development’ scenarioshould always be included.

Step 6: Selection andimplementation of one scenario

This requires:

■ reflection of the chosen scenario in thedam design and the EnvironmentalManagement Plan; and

■ monitoring of implementation to ensurethat objectives are met

The EIA results for the Pollan Dam showed that migratory salmon werepresent upstream of the dam site, and that the dam would act as abarrier to salmon movements, affecting the fishery. The environmentalwater releases were designed to meet the seasonal needs of themigratory fish. Design modifications had major implications forstructures such as the concrete dam, spillway, and downstreamchannel. The capital cost of all environmental protection measures isestimated to have increased the total cost of the project by 30% (from$6 million to $8 million). The flows have been effective in maintainingthe salmon population and the recreational fishery.

Source: Smith, 1996; Bridle, pers. comm. 2000

Box 9.4: Design and cost of environmental flows - Pollan Dam,Ireland

16. Maintaining ProductiveFisheries

The impact of dams on fish and fisheries isof major concern in many parts of the world.Several issues need attention in order tomaintain productive fisheries (see alsoGuideline 15).14

Fish passes should be tested and shown to beefficient mitigation tools. Fish pass designhas focused on the needs of leaping salmo-nids that usually dominate fish communitiesin fast-flowing rivers in the industrialisednorthern countries. Yet many fish species inslow-flowing tropical rivers are unable to usethis kind of fish pass as they do not leap.

Chapter 9


Where fish passes exist, their effectivenessshould be measured and their design im-proved where efficiency is low. For newdams, proposed fish pass designs should betested hydraulically and their appropriate-ness for the target species explicitly assessed.(See Box 9.5.)

Where the reservoir fishery will be assessedas a project benefit, the proposal shouldexplicitly include regional experience ofsimilar reservoir fisheries, rigorous assess-ments of potential reservoir productivity,and proposals for the institutional mecha-nisms to manage the new fishery. Relevantcontracts should be established between the

project proponent, the agencies responsiblefor developing or managing the reservoirfishery, and the fishers, with priority givento affected people. Fisheries managementobjectives for dams include:

■ preventing the loss of endangered and/orcommercially important fish biodiversity;

■ maintaining fish stock abundance;

■ ensuring the long-term sustainability ofthe catch, employment and income; and

■ producing fish for local consumption andexportable fish products.

Reservoir fisheries management concernsfocus on protecting spawning grounds inaffluent inflow areas, stocking to increaseproduction (for example, of a small pelagicfishery) and advice on management of thewater level to reduce impacts that harm fishstocks. Downstream river fisheries manage-ment focuses on aeration of anoxic dis-charge water from the dam, provision ofeffective fish passes, reduction of turbulencein the stilling pool, and mitigation of fishlosses on the downstream floodplainthrough flow releases.

In 1976 a pool-and-weir type fish pass was incorporated into a tidalbarrage on the Burnett River in SE Queensland, Australia. Assessmentof the fish pass in 1984 and 1994 showed it to be ineffective, with only2 000 fish of 18 species ascending over a 32 month period. The fishpass was modified to a vertical-slot design with low water velocity andturbulence. Over 17 months 52 000 fish of 34 species used the rede-signed fish pass. Non-leaping fish are now able to use the fish pass,benefiting the entire fishing community on the river.

Source: Flanders, 1999; env219, WCD Submission

Box 9.5: Benefits of improving fish passes

Recognising Entitlements and Sharing Benefits

17. Baseline SocialConditions

Constructing a social baseline is central tothe planning and implementation process. Itprovides key milestones against whichproject performance and positive andnegative impacts on people can be assessedthrough periodic monitoring and evalua-tion. It is also a key input to strategic socialimpact assessment (Guideline 4).15

Social baseline assessments should be doneat two stages in the planning process:

■ a low-intensity appraisal during optionsassessment, linked to Strategic ImpactAssessment; and

■ a more comprehensive baseline duringProject-level Impact Assessment once anintervention emerges from the optionsassessment process.

In light of the significance of the impactsthat can occur between the time a decisionis made to develop a project and its actualimplementation, the second baseline studymay need to be updated at the tender stage



of a project. Subsequent monitoring activi-ties can follow standard practice.

Baseline studies should be undertaken for allimpact areas, and in particular the areas andcommunities likely to be positively andnegatively affected by the project. Groups tobe considered include communities to bedisplaced, prospective host communities,downstream and upstream communities, andcommand area inhabitants (irrigationschemes, transmission line corridors, andother infrastructure areas). The socialbaseline study should be participatory andinvolve discussion and feedback throughstakeholders (Guideline 1). It should also beaccessible to the general public.

Some of the common techniques used toassess baseline social conditions combinegender-sensitive household surveys, commu-nity-level participatory appraisals, and other

methods such as key informants, oraltestimonies and preference assessment,direct observations and literature review. Forthe assessment of social processes, some ofthe participatory appraisal methods (such asthe Venn diagram of institutional processes)can be useful. Aerial photos, satelliteimagery, and geographic information systemscan be combined with participatory commu-nity resource mapping exercises.

The State is responsible for ensuring thatsocial baseline information is collected. Thetask should be carried out by independentinstitutions selected in consultation withthe stakeholder forum. Large projects shouldbe considered as an opportunity for buildinglocal capacity (in relevant governmentagencies, academic and research institu-tions, and civil society organisations) toundertake social assessment and monitoring.

18. Impoverishment RiskAnalysis

The impoverishment risks and reconstruc-tion analysis model for resettling affectedand displaced populations adds substantiallyto the tools used for explaining, diagnosing,predicting, and planning for development.This guideline should be read in conjunc-tion with Guideline 4: Strategic ImpactAssessment, Guideline 5: Project-relatedImpact Assessment and Guideline 17: Base-line Social Conditions. At the core of themodel are three fundamental concepts: risks,impoverishment and reconstruction. Impov-erishment risks are analysed by separatingout the components of the displacementprocess. They are landlessness; joblessness;homelessness; social, economic, and politi-cal marginalisation; food insecurity; in-creased morbidity and mortality; loss of

access to common property resources; and lossof socio-cultural resilience through a commu-nity’s inability to secure its interests.16

The internal logic of the model suggeststhat:

■ preventing or overcoming the pattern ofimpoverishment requires risk reversal;

■ explicit identification of risks in advanceis crucial for planning counter-riskmeasures; and

■ the transparent recognition of risks inadvance will allow planners and affectedpeople to search for alternatives to avoiddisplacement or to respond with mitiga-tion and development measures orstrategies and coping approaches.

The strategy to implement the impoverish-ment risk model includes the following:

Chapter 9


■ the baseline study covering such aspectsas numbers of affected people, availabili-ty and access to resources, sources oflivelihood and social, cultural, demo-graphic, economic and political condi-tions and processes (Guideline 17) –these studies must incorporate variablesto construct key elements of the riskmodel, in addition to collecting data onother aspects;

■ the baseline study providing informationto understand how social, economic andcultural networks, physical environmentand resources support the well-being ofindividuals, households and communi-ties; and

■ mitigation, development and benefit-sharing measures to improve the liveli-hoods and well-being of affected people,and to provide the social and physicalenvironment that would enable individ-uals, households and communities to

successfully overcome impoverishmentrisks.

A four stage, two-generation model thatwould enable affected communities to reachfull development includes17 :

■ developing benefit sharing, mitigation,and development plans with the partici-pation of the affected people;

■ enabling resettled people to cope andadapt following displacement, withcontinued support from the governmentand civil society groups;

■ supporting economic development andcommunity building within resettlementareas; and

■ hand over of resettlement sites andincorporation within broader social andpolitical institutions at a stage whenresettlement and development plans arefully realised and capable of sustainingthe gains for future generations.

19. Implementation of theMitigation,Resettlement andDevelopment ActionPlan

A mitigation, resettlement, and develop-ment action plan (MRDAP) is negotiatedbetween all affected peoples, the govern-ment and the developer. It generally has twoelements – a master contract and a perform-ance contract.18 The affected people wereidentified through an Impoverishment RiskAnalysis (Guideline 18). One component ofthe MRDAP may be a Project Benefit-Sharing Mechanism (Guideline 20). Theoverall obligations and responsibilities ofthe government and the developer will beincluded in the Compliance Plan (Guide-line 21).

A master contract ensures that the MRDAPprovisions and responsibilities are clearlyunderstood and assigned, while a perform-ance contract formalises provisions andcommitments with affected families andcommunities. These two legally bindingcontracts are found at the government anddeveloper level and the affected persons andcommunity level. Where governmentministries or departments act as the devel-oper, there may not be a need for a mastercontract, but their obligations in this regardshould be clearly stated in the MRDAP. Insuch cases, they will enter into agreementsdirectly with affected people throughperformance contracts.

At the government and developerlevel

The MRDAP should have legal status.Countries with resettlement and rehabilita-



tion acts or policies should make suitableamendments to ensure that contracts applyto all affected communities includingdownstream communities.

■ The master contract is concluded be-tween the developer (public corpora-tions, private, or joint) and the govern-ment. In the contract, the developeragrees to carry out all the actions set outin the MRDAP in a timely manner. Itspecifies government responsibilities forproviding support to acquire land, staff,schools and so on.

■ A private sector developer should sign aperformance bond supported by financialsecurity (Guideline 23).

■ Where the government undertakes toprovide other services (including landacquisition, road building and healthcare), the responsible line ministryenters into agreements with otherappropriate ministries to provide them.

The master contract:

■ specifies penalties, incentives, remedies,and other measures to facilitate compli-ance by the government and the devel-oper;

■ provides for the establishment of amitigation and development office forimplementation purposes. This is usuallystaffed by government officials drawnfrom various ministries supported by stafffrom the developer;

■ confirms the role of a multi-stakeholdercommittee as a subgroup designated by thestakeholder forum (including seniorgovernment officials, the developer, NGOsand affected peoples groups) to deal withgrievances and supervise the work of themitigation and development office;

■ empowers the mitigation and develop-ment office to monitor the implementa-tion of the MRDAP;

■ provides for continuous monitoring ofimplementation by an independent fieldmonitoring team, selected with theconsent of the affected people andreporting to the multi-stakeholdercommittee;

■ confirms the composition and role of apanel of experts for the implementationphase (Guideline 22), appointed by andreporting to the multi-stakeholdercommittee to assess whether the MR-DAP is being implemented correctly,rehabilitation objectives are beingachieved and project benefits are beingprovided to affected people; and

■ establishes a mechanism for disputeresolution – the multi-stakeholdercommittee is responsible for hearingdisputes and grievances related toexecution of the performance contractwhere the mitigation and developmentoffice has been unable to resolve issues.If the committee cannot resolve thedispute or grievance, the matter will bereferred to the appropriate judicial body.

At the community and affectedpersons level

Based on the provisions of the master con-tract, performance contracts are agreed withthe community and affected persons detailing:

■ compensation, resettlement, and devel-opment entitlements;

■ schedule and method of delivery;

■ institutional arrangements to deliver thecommitments;

■ obligations and responsibilities of theparties in the contract, namely affectedpeoples, community, government anddeveloper; and

■ recourse procedures.

The master and performance contracts haveto be agreed at the project feasibility stage

Chapter 9


and signed prior to tendering the construc-tion contract. The signing of the perform-ance contracts by the affected persons andcommunities signals their consent for

project implementation. The multi-stake-holder committee addresses all disputesrelated to performance contracts.

20. Project Benefit-SharingMechanisms

Adversely affected people are entitled toshare in project benefits. Beneficiaries andbenefits need to be identified and will formpart of the Mitigation, Resettlement andDevelopment Action Plan (see Guideline19). The nature of agreed benefits can takemany different forms.

Type of project benefits

Project Revenues-Related: A percentage shareof project revenues/royalties, the construc-tion budget and other profits. A jointenterprise with affected people having ashare of equity.

Project Benefit-Related: Provision of irrigatedland or an opportunity to purchase irrigatedland, access to irrigation water, provision ofelectricity supply, domestic water supplyfrom the project as appropriate. Right toreservoir fisheries, cultivation in the draw-down area of the reservoir, and contract tomanage recreational/water transport facilities.

Project Construction and Operation-Related:Employment in construction, plant opera-tion, and service sector of the project.Financial and training support for self-employment contract to provide goods andservices.

Resource-Related: Preferential access to, orcustodianship of, catchment resources fordefined exploitation and managementpurposes, catchment development such asplanting fruit trees or reforestation, access to

pumped irrigation from the reservoir, andbenefits from managed flows and floods.

Community Services-Related: Provision ofbetter and higher levels of service includinghealth, education, roads and public trans-port, and drainage; income support forvulnerable or needy households; agriculturalsupport services including preferentialplanting materials and other inputs; commu-nity forests and grazing areas; market andmeeting spaces.

Household-Related: Skills training andinterim family support; interest-free loansfor economic activities, housing improve-ments, provision of start-up livestock, accessto public works or work for wages, free orsubsidised labour-saving devices or productivemachinery, access to preferential electricityrates, tax rates, water and service charges.

Identification, assessment, anddelivery of benefits

Definition of Beneficiaries: Beneficiariesinclude all people in the reservoir, upstream,downstream, and in catchment areas whoseproperties, livelihoods, and non-materialresources are affected; and also those affect-ed by dam-related infrastructure such ascanals, transmission lines, resettlement, andother factors.

Identification of Beneficiaries: Baseline surveysmust establish the nature and extent of lossto livelihoods and enumerate all categoriesof adversely affected and displaced individuals,families, and communities. This will be donewith the participation of the affected people



Ensuring Compliance

and reflect a rights-and-risks approach (Guide-line 17).

Eligibility and Level of Benefits: All adverselyaffected people are entitled to benefits. Thelevel of benefits must be assessed, agreed uponby the parties involved (affected people,government, and developer/financier) andincluded in the performance contract.

Benefit Delivery and Redress Mechanisms: Themitigation and development office is responsi-ble for the delivery of benefits to the affectedpeople (Guideline 19). The multi-stakeholdercommittee will hear all representationsrelating to identification of beneficiaries,apportionment of benefits, performancecontracts, and delivery of benefits.

21. Compliance PlansThe preparation of an overarching Compli-ance Plan by the developer will addresstechnical, financial, social and environmen-tal obligations and commitments andprovide the means for the developer todescribe clearly how compliance will beensured for a particular project. The stake-holder forum will be able to monitor com-pliance against the plan, which will be apublicly available document.19

States are at different stages in the develop-ment of regulatory systems and institutionalcapacity. The range of tools selected toensure compliance for any particular projectwould vary from case to case. While varia-tions in systems and capacity will result inproject-specific Compliance Plans, the levelof compliance should be consistent.

In using Compliance Plans in connectionwith the construction of dams, a number ofissues will need to be addressed on a case-by-case basis, including the following:

■ The laws applicable to the construction ofdams. These will vary from country tocountry, and the Compliance Plan willneed to be consistent with local laws.

■ The use of voluntary measures. These willinclude tools such as comprehensivecompliance criteria and guidelines, ISOcertification, integrity pacts (see Guide-line 25) and the independent review ofinternal processes and commitments.

■ The level of in-country institutional capaci-ty. Where it is insufficient to meet therequirements of the plan, provision mustbe made for training and other technicalassistance, as required, to ensure suffi-cient capacity is put in place.

■ The use of performance bonds, supported byfinancial guarantees and trust funds. Theuse of one or both of these measures willbe needed to ensure sufficient funds havebeen set aside to secure performance.They will need to be developed andapplied in a manner that best suits theparticular circumstances (see Guideline23: Performance Bonds and Guideline 24:Trust Funds).

■ The cost of compliance. The cost ofcompliance will need to be built into theplan, the project budget and the evalua-tion process.

■ Performance indicators and benchmarksneed to be established against whichcompliance can be assessed.

Chapter 9


22. Independent ReviewPanels for Social andEnvironmental Matters

Independent review panels (IRP) should beestablished for all dam projects. They differfrom tribunals, commissions, judicial reviewsor other recourse mechanisms as theirprincipal task is reviewing assessment ofimpacts and the planning, design andimplementation of social and environmentalmitigation plans. In some countries theirrecommendations can be binding on allparties. In others they are only advisory. Thescope of the IRP powers is laid out in itsterms of reference. They report to theregulator, developer, consultants, affectedpeoples and financing agency to help ensurethe best possible social and environmentaloutcomes. The IRP is not a dispute resolu-tion mechanism, but may assist in bringingissues to the attention of the relevant bodyfor resolution.

IRPs offer independent assessments of theissues that should be dealt with in projectlevel impact assessments and project imple-mentation, while also providing a mecha-nism to transfer best practice from oneproject to another, both nationally andinternationally. IRPs further provide aquality control function to assure thedeveloper, regulator, financing agency andaffected groups that the necessary standardsare being met and that laws or guidelines arecomplied with, as laid out in the Compli-ance Plan. They usually perform functionsin the social and environmental domainsimilar to independent engineering inspec-tors for technical issues.

The composition and tasks of IRPs can beadapted to different stages of the projectcycle, although it will be useful to maintaincore members (normally one ecologist and

one social scientist) to ensure continuitythrough the different project phases. Plan-ning and appraisal may call for differentskills and composition to those needed formonitoring implementation of an environ-mental management plan or the resettle-ment and development programme.

In establishing an independent panel, Statesand financing agencies should consider thefollowing:

■ Project level IRPs should be establishedby the State (as developer or regulator orthe Ministry of Environment), in agree-ment with the stakeholder forum, assoon as the options assessment hasdecided on a dam as a possible option,and prior to project-level impact assess-ment beginning.

■ IRPs are funded by the State, the devel-oper or a financing agency according tolocal circumstances. The IRP forms anintegral part of project costs.

■ The primary reporting responsibility ofIRPs should be to the national govern-ment involved and more specifically theresponsible project agency and regulator.The IRP should include members able toeffectively address the major issues that areaddressed by state-of-the-art ecosystem,demographic, social and health assess-ments. They have the prerogative to addadditional members to deal with issues forwhich the IRP has insufficient expertise.

Panels should include at least one hostcountry national and at least one membersupported by any affected people. The IRP isindependent of all parties and its terms ofreference should allow the panel to lookinto any issues deemed important withoutthe need to justify such examination.

■ The developer ensures systematic infor-mation distribution to the IRP, which



has access to all project-related docu-mentation.

■ All reports following panel missions mustbecome public documents once thedeveloper or appropriate agency has hada reasonable time to comment (usuallyone month). Should the developer orother agencies request assistance on aconfidential basis then that is an issue forthem and the IRP to negotiate.

■ The developer has the obligation toshow how they are responding, or intendto respond, to the issues raised by theIRP.

■ Frequency of IRP visits to the projectarea should be flexible. In some phasesone per year may be sufficient, thoughonce construction starts, six monthlyintervals would be more appropriate.

23. Performance BondsPerformance bonds supported by financialguarantees provide a secure way of ensuringcompliance with commitments and obliga-tions (see Box 9.6). They are used by miningand environment protection agencies and inthe construction industry in many differentcountries. The bond is called upon, either inwhole or in part, to meet unfulfilled obliga-tions and commitments or is released whencommitments are met, either in whole or inpart, depending upon the circumstances.

Performance bonds have been used widelyin the construction industry to ensure thatwork is completed within the specified timeperiod and to specified standards (includingduring the construction of dams). They arealso used in relation to activities that carry ahigh risk to the environment; for exampleensuring that mine sites will be rehabilitated.

In applying the use of performance bonds tothe social and environmental mitigationmeasures related to the construction ofdams, a number of issues will need to beaddressed on a case-by-case basis, includingthe following:

■ The activities the bond will apply to. Thebond could apply to a wide range ofactivities, such as physical resettlementand provision of benefits, environmental

mitigation works, monitoring, auditingand decommissioning, or to aspects ofeach of these activities. Bonds should becarefully targeted to activities identifiedin an approved management plan and,preferably, should apply to the developerwho is ultimately responsible for theentire project. The developer may inturn enter into performance bonds withcontractors.

■ The form of security, including insurancecover, to be provided. A package ofmeasures can be used that collectivelyresults in providing sufficient financialassurance. The use of bank guarantees isa cost-efficient method of providingfinancial assurance, but there are manyothers, including insurance cover.

■ Who will hold the bond and hence determinewhether to release or use the security. Therelevant government agency (the envi-ronmental protection agency or minesdepartment) has been used in mostcountries where performance bonds havebeen used to date. However, a well-structured trust fund can also be used,particularly where the government is alsothe developer (Guideline 24).

■ The appropriate level of financial assurance.Considerations include the higher costto government to do the works, a contin-gency sum for high-risk activities,

Chapter 9


making provision for staged assurance,and providing a discount for qualitymanagement, good past practice, and/ora lower risk activity.

■ The stages of the development when thesecurity will be released. Partial releaseprovides a form of financial incentive tothe developer to discharge its responsi-bilities.

■ Regular review of the level of security toreflect the actual costs. A fall-back provi-sion is needed that allows the State toextract the difference from the developerwhere the level of security proves to beinsufficient.

The use of performance bonds supported by financial assurances hasnow been successfully applied in a number of different areas. Forexample, following a chemical waste management company becomingbankrupt and leaving the government with a potential liability todispose of abandoned waste, the Victorian Environment ProtectionAgency (EPA) required financial assurances from 38 companiesinvolved in the waste industry. The level of the financial assurance wasarrived at based upon the extent of the environmental risk – which hassince been reduced where improved environmental managementsystems have been put into place. While the EPA has not called on anyfinancial assurances to date, the programme has been successful inraising the performance of the industry overall and has protected thegovernment from financial risk. The programme is being extended tocover landfills and major petroleum product storage sites.

Source: Robinson, pers. comm. 2000

Box 9.6 Financial assurances and the Environment ProtectionAgency, Victoria, Australia

the project. This could include providing aneffective means for the collection anddistribution of royalties from dam-relatedactivities to fund ongoing initiatives.

The use of trust funds would be most appro-priate where the proponent is the State. Insuch cases, the concern is no longer one ofensuring that the risk is not passed from thedeveloper to the government, rather it isensuring that the risk is not passed from theState to the affected communities and tothe environment.

In using trust funds in connection with theconstruction of dams, a number of issues willneed to be addressed on a case-by-case basis,including the following:

■ The laws applicable to the establishment oftrust funds. These will vary from countryto country, and the trust deed will needto be consistent with local laws.

■ The content of the trust deed. This willneed to include an open and transparentprocess for appointing trustees andadministering the fund and for setting

24. Trust FundsTrust funds have been used over a longperiod of time, and in a wide variety ofsituations, to ensure that funds set aside fora particular purpose are used for that pur-pose (see Box 9.7). In recent years they havebeen applied to the establishment andongoing management of government-protected areas, through initiatives fundedby the Global Environment Facilityamongst others. There is scope to extendthese funds to other areas where there is aneed to set aside monies to be applied for aparticular purpose, such as benefit sharingand mitigation measures associated with theconstruction of dams. They could also beused for decentralising responsibility toaffected communities for planning andimplementing their own mitigation, devel-opment and resettlement programmes.

Trust funds could be effectively used, eitheralone or in conjunction with bonds, tosecure the financing of ongoing obligationsin relation to monitoring and auditing –activities that must continue for the life of



out the activities the funds will beapplied to, such as resettlement, environ-mental mitigation, monitoring andauditing. The deed must be publiclyavailable.

■ The trustees of the fund. The trustees willneed to be sufficiently independent fromthe developer and have the confidenceof stakeholders.

■ The role of affected people. Their role inmanaging trust funds in relation tomitigation, resettlement and develop-ment needs to be defined.

25. Integrity PactsIntegrity pacts relate to the procurementprocess, namely the supply of goods andservices. (See Box 9.8 and Chapter 8Strategic Priority 6: Ensuring Compliance)They are voluntary undertakings aimed atreducing corruption and founded on con-tractual rights and obligations. They can beused as one component of a CompliancePlan. Integrity pacts are of particular use insituations where regulatory systems andinstitutional capacity are weak, but theyhave universal application.20

Integrity pacts in various forms have nowbeen tried and tested in many countries.

In applying the use of integrity pacts to theconstruction of dams, a number of issues willneed to be addressed on a case-by-case basis,including the following:

■ The form and content of the pact. Theform and content of the pact mustcomply with accepted internationalmodels and past applications.

■ The level of in-country institutional capaci-ty. Where this is insufficient to meet therequirements of the integrity pact,provision must be made for training andother technical assistance, as required, toensure sufficient capacity is put intoplace. This should be covered in theCompliance Plan (Guideline 21).

In 1998, the Government of Suriname announced the creation of theCentral Suriname Nature Reserve, a protected area that covers 10% ofthe country. The ongoing maintenance of this protected area issecured through the Suriname Conservation Foundation Trust Fundannounced in April 2000, which will ultimately administer a $15-millionendowment. This sum will be invested in the fund through contribu-tions from numerous donors. The fund will be used for long-termmanagement support, ecological surveys, conservation awareness andeducation, and ecotourism as a conservation enterprise. The fund’strustees are drawn from government, sponsoring institutions, theprivate sector, and indigenous peoples.

Source: Famalore, pers. comm. 2000

Box 9.7 Suriname Central Nature Reserve

The Provincial Governor of Mendoza Province, Argentina decided in1997 to amend procurement rules to include an Integrity Agreementbetween the Government of the Province and companies interested inbidding for government contracts. Government commitments underthis agreement include providing full transparency in relationships withsuppliers, ensuring that employees will not accept or demand anybribes, informing the State Prosecutor of any violations, requiring a bidbond, excluding violators from future contracts, and having the StateProsecutor oversee implementation of the policy.

Source: Wiehen, 1999

Box 9.8 Mendoza Province, Argentina

Chapter 9


Sharing Rivers for Peace, Development, and Security

26. Procedures for SharedRivers

A basin-wide perspective is promoted foropen discussion of the issues, negotiation onsharing the benefits, and the mitigation ofany adverse impacts. The procedures forequitable and reasonable utilisation, nosignificant harm, prior notification, impactassessment, and dispute resolution will buildon provisions of the UN Convention on theLaw of the Non-Navigational Uses ofInternational Watercourses and otherinternational agreements. Such provisionsare also relevant to rivers within a countryshared between a number of sub-nationalentities.

Prior notification

States considering options that may have asignificant impact on other riparian Statesshould notify those States at various stagesand establish an effective channel of com-munication between all potentially affectedparties. Notification should occur:

■ at an early stage of planning, as part ofthe strategic impact assessment, andshould allow potentially affected riparianStates at least three months to identifyrelevant issues for inclusion in subse-quent preparatory studies and impactassessments;

■ during the scoping stage of impact assess-ments, to allow agreement on mechanismsfor sharing technical data and information,and for participation in project-relatedimpact assessments – potentially affectedriparian States should respond within threemonths of the notification;

■ prior to selecting an option on a sharedriver as part of a preferred developmentplan – potentially affected riparian states

should receive adequate technical informa-tion about the proposed project and theresults of any impact assessments, andshould respond in writing within sixmonths of the notification with theirfindings and response to the proposedproject; and

■ as required to cover any additional dataand information that is available andnecessary for an accurate evaluation byany potentially affected riparian States.

In the event that properly notified riparianStates do not respond in a reasonable andtimely manner, the notifying State wouldproceed with planning and development,subject to its observance of the relevantinternational law principles and the Commis-sion’s strategic priorities and policy principles.

In the event that a State fails to notifyanother riparian State which could poten-tially suffer significant harm by the proposedaction, the potentially affected State shouldbe able to request and receive information,make their views known, including propos-ing modifications, and be part of a negotiat-ed settlement before any action to constructthe dam is taken. If this opportunity isdenied, remedies should be available throughthe International Court of Justice (ICJ), orother appropriate mechanisms. Any externalfinancing for the dam should be conditionalupon resolution of the issue as described inChapter 8 (see policy principle 7.5).

Basin-wide impact assessment

The Commission’s Guidelines on StrategicImpact Assessment and Project-Level ImpactAssessment, taken together with prevailingregulatory requirements, provide the frame-work for a basin-wide assessment of impacts.



Impact assessments designed to suit context-specific situations need to:

■ include a participatory basin-widescoping phase;

■ take into consideration the submissionsof riparian states and affected communi-ties; and

■ be subjected to review by an independ-ent panel agreed upon by all potentiallyaffected riparian states.

All states should give the independent panelaccess to all necessary information.

Dispute resolution

In the event a dispute cannot be resolvedwithin six months, either through good faithnegotiations or independent dispute resolu-tion, it should be referred to a fact-findingcommission as detailed in Article 33 of theUN Convention on the Law of the Non-Navigational Uses of International Water-courses. Failing resolution through thisbody, the dispute should be heard by the ICJeither through case specific agreement orthrough compulsory jurisdiction in Article36 of its statute.

Endnotes

1 WCD Thematic Review I.2 Indigenous People.

2 WCD Thematic Review V.2 Environmentaland Social Assessment; WHO, 1999, WCDWorking Paper on Human Health; Brandtand Hassan, 2000, WCD Working Paper onCultural Heritage Management.

3 WCD Thematic Review V.2 Environmentaland Social Assessment; WHO, op cit; Brandtand Hassan, op cit.

4 WCD Thematic Review V.1 Planning.

5 Ibid.




9 WCD Thematic Review III.1 EconomicAnalysis, Chapters 2, 6, 7, 8.

10 WCD Thematic Review IV.5 Operations.

11 Brown and King, 1999; Brown et al, 1999,Contributing paper for WCD ThematicReview II.1 Ecosystems.

12 WCD Thematic Review II.1 Ecosystems.

13 Brown and King, op cit; Brown et al, 1999,Contributing paper for WCD ThematicReview II.1 Ecosystems.

14 Bernacsek, 2000, Contributing paper forWCD Thematic Review II.1 Ecosystems.

15 WCD Thematic Review V.2 Environmentaland Social Assessment.

16 WCD Thematic Review I.3 Displacement;Cernea, 2000.

17 Scudder, 1997c.


19 WCD Thematic Review V.4 Regulation.

20 Ibid; Wiehen, 1999.

Beyond the Commission – An Agenda for Change


Our report has distilled more

than two years of intense

study, dialogue, and reflection by the

World Commission on Dams

(WCD), the WCD Secretariat, the

WCD Forum, and hundreds of

individual experts on every facet of

the dams debate. It contains all the

significant findings that result from

this work and expresses everything

that we, the Commission, feel is

important to communicate to gov-

ernments, the private sector, civil

society actors, and affected peoples –

in short, to the entire spectrum of

participants in the dams debate.

Chapter 10

Beyond the Commission –An Agenda for Change

Chapter 10


The Commission alone isultimately responsible for theconclusions and recommenda-tions presented here.

Dams and Development: A NewFramework for Decision-Makingprovides a solid basis forassessing options for energyand water development, andfor planning and implement-ing projects that can achievethe desired benefits withoutexacting an unacceptable costfor anyone affected, or for ourenvironment. If all parties

now adopt, adapt, and implement ourrecommendations in good faith, much of theenergy currently focused on the controversysurrounding large dams can be channelledinto improving development outcomes on aco-operative and sustainable basis. But thiswill not happen unless the wider damsconstituencies – those who entrusted uswith the mandate two years ago and whocreated the Commission as a platform fordialogue – become the heirs of our work, goforth with it, and multiply its impact.

The evidence we present is compelling. Wefeel confident that the WCD KnowledgeBase provides overwhelming support for themain messages in the report. We believethere can no longer be any justifiable doubtabout the following:

■ Dams have made an important andsignificant contribution to humandevelopment, and the benefits derivedfrom them have been considerable.

■ In too many cases an unacceptable, andoften unnecessary and high price hasbeen paid to secure those benefits,especially in social and environmentalterms, by people displaced, by communi-

ties downstream, by taxpayers and by thenatural environment.

■ Lack of equity in the distribution ofbenefits has called into question thevalue of many dams in meeting waterand energy development needs whencompared with the alternatives.

■ By bringing to the table all those whoserights are involved, and who bear therisks associated with different options forwater and energy resources development,the conditions for a positive resolution ofconflicts and competing interests arecreated.

■ Negotiating outcomes will greatlyimprove the development effectivenessof water and energy projects by eliminat-ing unfavourable projects at an earlystage, and by offering as a choice onlythose options that key stakeholders agreerepresent the best ones to meet the needsin question.

The directions are clear. It is one thing,however, to see this. It is another to activelybreak through traditional boundaries ofthinking, step into a different frame of mindand look at familiar issues from anotherperspective. This is what the Commissionhas had to do, and we have shown over twoyears that it works. We have seen similarconstructive processes at work among manyof the constituencies that have participatedso actively in our work as they have come tounderstand what motivates other interestgroups.

It is time now to bring the debate home.The controversy over dams has appropriate-ly been raised to the international stage. Adissipation of that controversy, however,should allow decisions about fundamentalwater and energy development choices to bemade at the most appropriate level. This

The debate about damsbegan well before the

Commission, and it willcontinue well beyond it.We hope that one of the

lasting results of theWCD process will have

been to change the tenorof that debate from one

of lack of trust anddestructive confrontation

to co-operation, sharedgoals and more equitable

development outcomes.



level is one where the voices of powerfulinternational players and interests do notdrown the many voices of those with adirect stake in the decisions to be taken. Forthis to work, all the actors have to makethat commitment to step out of theirfamiliar frame of reference. We recommendthat all parties begin by using the report asthe starting point for discussions, debates,internal reviews, and reassessments ofexisting procedures, and for an assessment ofhow they can address a changed reality.

Strategic Entry Points forFollow-upNobody can, of course, simply pick up thereport and implement it in full. It is not ablueprint. This section proposes a number ofentry points to help organisations identifyimmediate actions they might take inresponse to the Commission’s report.Engaging through these entry points wouldinitiate permanent changes to advance theprinciples, criteria, and guidelines in thereport.

These entry points don’t aim to be compre-hensive. Instead, they illustrate the sorts ofactions different constituencies can takethat would, collectively, bring about apermanent shift in the debate over ourwater and energy future.

The Commission calls on all interestedparties to recognise that its recommenda-tions are in the enlightened self-interest ofall concerned, and form a solid base for goodfaith negotiations around water and energysector planning based on accepted normsand on the evidence in our Knowledge Base.We are aware that many organisationsinvolved with dams, water and energy willhave to review existing criteria and guide-lines and adapt them in light of our report.

We urge all groups to study this report anddiscuss how to adopt or adapt its recommen-dations, bearing in mind that it results fromconsultations that, in terms of inclusivenessand breadth of scope, are beyond the reachof any individual interest group. In this waythe report will serve as a common platformfor all parties to develop forms of implementa-tion appropriate to their context and status.

This section provides an illustrative list ofshort- and medium-term actions specific toindividual stakeholder groups. The list isaddressed to all stakeholders, includinggovernments, the privatesector, bilateral and multilater-al funding agencies, profes-sional associations, and civilsociety. By applying it they canimmediately begin incorporat-ing the content and spirit ofthe report in their own profes-sional practices and helpmaintain the momentum forchange generated by the workof the Commission. All groupsshould consider the following:

■ Active dissemination ofthe report

Water and energy develop-ment interacts with many sectors anddisciplines and involves a variety of actors.Assist, where you can, in translating thereport into different languages, teachingmaterials, checklists, and other tools thatwill help shift gears from prescription toimplementation. Help ensure that the reportreaches as many of those concerned aboutthe dams debate as possible. NGO andprofessional networks especially can helpensure that people affected by dams or thoseplanning and managing dams worldwidehave access to the Commission’s report andrecommendations in appropriate languages.

We urge all groups tostudy this report anddiscuss how to adopt oradapt itsrecommendations,bearing in mind that itresults from consultationsthat, in terms ofinclusiveness and breadthof scope, are beyond thereach of any individualinterest group.

Chapter 10


We call on local media and publications ofprofessional bodies to write and comment onthe report and on its proposals for the future.

■ Review the reportThe Commission recommends that all inter-ested groups put in place an appropriateconsultative process to review the report andpropose a fitting response that will lead toeffective implementation and incorporation ofits recommendations in their respectivepolicies. This may take place at the national

level by governmentinitiative, at the regionallevel, or at the level ofindividual organisations. Insome cases, such as theharmonisation of the socialand environmental provi-sions of the Export CreditGuarantee Agencies or

professional associations, extensive interna-tional consultation will be essential.

Here are some questions that need answers.

■ What are the reactions to the Commis-sion’s key proposals?

■ How will these affect ongoing activities,immediately and in the long term?

■ Which recommendations can be adopted?Why not all of the recommendations?

■ What practices can be changed inresponse to the report?

■ What national or international networksor organisations might help implementthe recommendations?

The Commission welcomes a response fromall parties concerning the proposals arisingfrom the review processes. These will beposted on the WCD website (send [email protected]) and on any websites thatfollow uptake and implementation of theCommission’s report.

■ Public pledgesFollowing such reviews, organisations andgovernments are urged to issue a publicstatement of support for the direction thatthe report takes. Beyond that generalendorsement, make such pledges as specificas possible – for example, by endorsing theseven strategic priorities set out inChapter 8. Governments and other organi-sations are further invited to report on whatactions they have taken as a result of suchreviews, and how their policies and actionshave changed. These reports can also be sentto the WCD website ([email protected]) tofacilitate sharing of lessons and information.

■ Evaluation, monitoring, learningThe Commission has noted with dismay theabsence of formal processes for evaluatingthe long-term performance and outcomes oflarge dams projects worldwide, despite thebillions of dollars spent on them. Thisremains a huge gap in the process of learn-ing from past good and bad practices, andhas severely constrained the capacity of thesector to learn rapidly from experience, bothnationally and internationally, and topromote adaptive management.

The Commission therefore urges all parties– national governments, aid agencies,financiers, professional associations, andprivate-sector consultants – to invest moreresources in evaluating past performancethrough open, participatory processes thatbuild on the Commission’s case studymethodology and adapt it to nationalcircumstances. Evaluation should normallybe undertaken every five to ten years assome impacts only emerge over time.

■ Review dams currently underdevelopment

The Commission recommends that publicand private developers, financiers, andconsultants involved in dams projects in all

Following such reviews,organisations and

governments are urged toissue a public statement of

support for the direction thatthe report takes.



Capacity must be built ifgood outcomes are to beachieved, includingstrengthening civil societyand particularlyempowering women tomake their voices heard.

stages of the planning and developmentprocess give high priority to reviewing theseproposals against the framework laid out inChapter 9, and to adjusting procedures andadapting projects where necessary.

■ Promote capacity buildingAdopting the recommendations of theCommission has implications for institu-tional capacity and financing to manage thetransition in water and energy managementthat the Commission is recommending.Lack of capacity should not be an argumentfor not adopting the Commission’s report.Capacity must be built if good outcomes areto be achieved, including strengtheningcivil society and particularly empoweringwomen to make their voices heard. Bilateraland multilateral donors, national andinternational NGOs, are urged to supportthis transition in developing countries andwherever possible to offer support to inter-national networks assisting in this process.Investing in the capacity and process foroptions assessment and decision-makingshould be seen as an investment in a long-term strategy of lowering the costs of futureprojects.

Taking the Initiative –Institutional ResponsesThis section contains recommendationsaddressed at specific stakeholders in thedams debate. They are not intended toprovide a comprehensive list of what weexpect, but instead to illustrate some of thesalient actions that we believe each groupshould consider as it moves from debateover the report’s thrust into actions toimplement its provisions. They are entrypoints for follow-up. These recommenda-tions result not only from the Commission’sreview of experience with past dams, butalso from two years of analysis and dialogue

with many partners. They complement whatlies in the body of the report.

National governments

■ Establish an independent, multi-stake-holder committee to address the unre-solved legacy of past dams.

■ Require a review of existing proceduresand regulations concerning large damprojects.

■ Develop a specific policy statementgoverning stakeholder participation inoptions assessment and planning, settingout the range of considerations that willbe incorporated.

■ Review legal, policy andinstitutional frameworks toassess and remove any biasagainst resource conserva-tion, efficiency and decen-tralised options, and anyhindrance to open partici-patory processes.

■ Introduce and support aUN General Assemblyresolution that welcomes the publicationof the Commission’s report, invitesgovernments to accept and implementits recommendations and transmits thereport to the Rio+10 process as a positiveexample of multi-stakeholder co-opera-tion that can result in a substantialadvance towards sustainable develop-ment.

Line ministries

■ Issue criteria and guidelines for promot-ing third party review and disputeresolution around large dam projects.

■ Adopt the practice of time-boundlicences for all dams, whether public orprivately owned.

Chapter 10


Civil society groups

National NGOs andinternational NGOnetworks

■ Participate in cross-cuttingpartnerships with otheractors on key issues.

■ Gather, analyse and dissemi-nate information widely topromote transparency andopenness.

■ Monitor compliance withagreements and assist anyaggrieved party to seekresolution of outstandingdisagreements or to seekrecourse.

■ Actively assist in identifyingthe relevant stakeholders for water andenergy projects using the rights-and-risksapproach.

■ Contribute to the establishment ofappropriate forums for stakeholders toenable them to identify, articulate andrepresent their legitimate rights.

Affected peoples’ organisations

■ Develop proposals for follow-up dialogueon the Commission’s report with govern-ment authorities and project developers.

■ Identify unresolved social and environ-mental impacts and convince the rele-vant authorities to take effective steps toaddress them.

■ Develop support networks and partner-ships to strengthen technical and legalcapacity for needs and options assess-ment processes.

Professional associations andagencies

(International Commission on Large Dams,International Commission on Irrigation and

Drainage, International Hydropower Associ-ation, International Energy Agency, Inter-national Association for Impact Assess-ment.)

■ Promote a culture of evaluation and self-reflection to ensure continuous learningfrom all aspects of large dam projectsthrough adopting appropriate procedures.

■ Extend national committees to include aconsultative group of NGOs, environ-mental scientists and affected peoples’groups.

■ Set up joint work programmes with thesegroups at the national and regional levelsto learn from past experience.

■ Develop processes for certifying compli-ance with WCD guidelines.

■ Extend national and internationaldatabases, such as the ICOLD WorldRegister of Dams, to include social andenvironmental parameters.

International Organisation forStandardisation (ISO)

■ Explore the codification of the Commis-sion’s guidelines in a sector-specificguidance document or standard thatincorporates social impact managementas well as public reporting and negotiateddecision-making. A high degree ofdeveloping country and civil societyparticipation in the standards-settingprocess is needed to ensure legitimacy.

The private sector

Suppliers, contractors, developers,and consultants

■ Publicise the acceptance of the Commis-sion’s principles, criteria and guidelinesin corporate policy and company litera-ture.

■ Abide by the provisions of the anti-bribery convention of the Organisation

The WCD is a model thatcan be, if not replicated,

then at least adapted to

other similar controversial

issues that are also at the

interface of environment

and development. Theseare polarised issues such

as the future of

biotechnology in

development, or the role

of large mines and

extractive industry indevelopment.

Frances Seymour, WorldResources Institute



for Economic Co-operation and Devel-opment.

■ Adopt integrity pacts for all contractsand procurement, as developed byTransparency International.

■ Develop and adopt voluntary codes ofconduct, management systems andcertification procedures for best ensuringand demonstrating compliance with theCommission’s guidelines, including, forexample, through the ISO 14001 man-agement system standard.

■ For consulting companies, refine the useof the tools proposed by the Commissionso they become standard industry prac-tice. These include distributional analy-sis, multi-criteria analysis, risk andsensitivity analysis, rights-and-risksapproach, and environmental flowassessments.

■ Put in place mechanisms to ensure thatdesigners of dams either participate in orat least receive evaluations of predictedsocial, environmental, financial, andeconomic performance five years afterconstruction in order to learn from theirexperience. Make these evaluationsavailable to the public.

Private financiers

■ Develop criteria for innovative bond-rating systems for use in financing alloptions, including large dams, in thewater resources and electric powersectors.

■ Recognise the risk reduction opportuni-ties inherent in proper options assess-ment and develop legally binding ar-rangements on environmental and socialmatters in assessing insurance, equity,and bond premiums.

■ Incorporate the principles, criteria, andguidelines of the Commission in corpo-

rate social responsibilitypolicies and statements.

■ Use the Commission’sguidelines as social andenvironmental screens forevaluating support for, andinvestment in, individualprojects.

Bilateral aid agenciesand multilateraldevelopment banks

■ Develop programmes tohelp countries, especially those with asignificant existing or potential dampopulation, formulate a response to theCommission’s report and find ways toimplement its recommendations.

■ Ensure that any dam options for whichfinancing is approved emerge from anagreed process of ranking alternativesand respect the Commission’s guidelines.

■ Accelerate the shift from project- tosector-based finance, especially throughincreasing financial and technicalsupport for effective, transparent, andparticipatory needs and options assess-ment, and the financing of non-structuralalternatives.

■ Review the portfolio of past projects toidentify those that may have under-performed or present unresolved issuesand share in addressing the financialburden of such projects for borrowercountries. This may include, for example,cancelling the outstanding debt relatedto them, converting debt repayment intodevelopment assistance targeting affect-ed areas, or providing new support tohelp borrower countries address unresolvedeconomic, social, and environmentalproblems.

The example of the WCDshows that establishing a

basic measure of trust

among actors in a conflict-

ridden environment is time-

consuming and costly, but

launching a sustainablemechanism for consensus

building and standards

setting requires no less.

Wolfgang Reinicke andFrancis Deng, Critical Choices

Chapter 10


■ Review internal processesand operational policies inrelation to the Commission’srecommendations to deter-mine changes needed in theselection of projects forlending portfolios; theappraisal process; and imple-mentation, monitoring, andevaluation.

Export credit agencies

■ Introduce and adopt com-mon environmental, socialand transboundary criteriafor financial guarantees and

strengthen institutional capacity toappraise projects against such criteria.

■ Improve co-ordination among agenciesat the international level to ensure thatdam projects refused by one agency arenot accepted by others.

■ Require private-sector applicants for damprojects to meet due diligence criteria orvoluntary codes of conduct that conformto the Commission’s recommendations.

■ Promote consultation and informationdisclosure as normal procedure.

Intergovernmentalorganisations

The United Nations

■ Facilitate the adoption of a GeneralAssembly resolution on the Commis-sion’s findings and encourage the inclu-sion of the report in the Rio+10 process.

UN technical agencies

(World Health Organisation, Food andAgriculture Organisation, United NationsDevelopment Programme, United NationsEducational, Scientific and Cultural Organi-sation, etc.)

■ Review technical guidelines, norms, andpractices regarding water and energyresources development to integrate theprinciples, guidelines, and criteria fromthe Commission’s report.

■ Provide support to improve nationalcapacity for options assessment indeveloping countries.

United Nations EnvironmentProgramme

■ Actively promote the results of theCommission in its co-ordinating andcatalysing environmental work withinthe UN family of organisations.

■ Examine how the Multilateral Environ-mental Agreements that it administersmight serve to strengthen the spirit andadvance the proposals of the Commission.

Academic and research bodies

■ Assist in the evaluation of further dam casestudies following WCD methodology.

■ Undertake research on alternatives todams such as demand side managementand ensure these are available to deci-sion-makers through the options assess-ment process.

■ Assist in improving the WCDKnowledge Base as outlined in Box 10.1.

Continuing the DialogueThe previous section identified a smallselection of specific recommendations aimedat the major groups of participants in thedams debate. It focused on actions thatcould be taken immediately and that, inmany cases, are specific to the target groupthey are directed at.

We choose not to go beyond this for twoprincipal reasons. First, the Commission has

At the beginning many

doubted the Commision's

independence but if you've

followed it closely, you will

realise the Commission hasdone excellent work and its

independence has been

respected.There was a spirit

of openness, of

understanding, a dialogue

between partners.

Aboubacry Mbodji,CODESEN, a coalition ofNGOs concerned withdevelopment



found that most problems associated withdams result from faults in the process ofoptions assessment and decision-making onenergy and water development choices. Itfollows that the solution lies in makingimprovements to the process – improve-ments that will make it more even-handed,equitable, transparent, and inclusive. Howthe process is designed and conducted willdepend, to a large extent, on country orsetting. There is no universally applicablemodel – only basic principles.

The second reason is more significant.Unlike other Commissions, whose reportswere essentially aimed at governments orthe international community, our report hasa broad and diverse target. It is aimedequally at governments, internationalorganisations, multinational companies,financiers, consultants, NGO networks,indigenous communities, and locally organ-ised groups of people affected by dams.There is no natural heir to our work otherthan the complex and multi-faceted com-munity of those concerned with dams issues.

It is appropriate that we seek to build nolasting international edifice but insteadprefer to send our report for implementationwhere it belongs – to the regional, country,basin, community, and dam-specific level.We hope and expect that the report willlead to regional and national processes ofdialogue, to discussions concerning specificprojects or issues, to new research andtraining programmes, to new networks – inshort, to a multiplicity of results and develop-ments that are decentralised, dispersed, andhighly diverse in character. We hope that theywill include many new partnerships acrosssectors where earlier divides existed, connect-ing to understand differing interests and toidentify shared objectives. This would be inkeeping with the spirit of the Commission.

In fact, this is already happening. Whetheror not connected to the WCD process, thedebate around dams continues. For example,policies and institutional responses are evolv-ing, due to improved awareness, in Brazil,Sri Lanka, United Kingdom, Thailand andNepal. Actors continue to respond withtailor-made solutions to local issues such as:

■ proposals for a national commission ondams, modelled on the WCD;

Box 10.1 Priorities for strengthening the knowledge base

A major constraint the Commission faced was a lack of comparative data on thedevelopment effectiveness of large dams and the actual direct and indirectconsequences of such dams on local, regional, and national development, andmore specifically on affected people and environments. Much information iseither not available or not shared by those who hold it. Detailed studies areneeded that are comparative, comprehensive, integrated, long-term, cumula-tive, and adaptive. There are numerous areas about which the Commissionfound insufficient information on which to base strategic recommendations.The priorities for more information and understanding through specificresearch, data collection, monitoring, and evaluation include:

■ Studies to compare the direct and indirect benefits and costs of multipur-pose dams with alternative options.

■ Research to inform strategic thinking on the cumulative impacts of a cascadeof dams or interbasin transfers on river basin environments and populationsand on local, regional and national development.

■ Information on the potential for multiplier effects relating to food produc-tion, water use efficiency, poverty alleviation, and non-farm linkages of dam-supplied major irrigation projects with other irrigation and agricultureoptions.

■ The impacts of main-stem and tributary dams on downstream ecosystems,including deltas and the livelihoods of people using those ecosystems.

■ A better understanding of the extent to which managed floods can offset theimpacts of dams on downstream ecosystems and livelihoods.

■ Improved understanding of how dams impact on women and genderrelationships.

■ Improved understanding of how to influence rural-urban migration and therequirements of meeting needs through decentralised rural developmentcompared to the challenge of servicing mega-cities for water and energy.

■ Baseline studies of greenhouse gas emissions from pre-project rivers forcomparison with emissions from post-project reservoirs on those rivers, tofacilitate study of how the change from a natural to a human-modifiedsystem influences greenhouse gas emissions.

■ In anticipation of global warming, research and strategic thinking on theimpact of past periods of drought on the ability of large dams to deliverexpected services in arid, semi-arid, and drought-prone areas.

■ Identification of techniques for recharging aquifers on a larger scale as astorage technique for avoiding water loss through evaporation, and forimproving conjunctive and sustainable use of surface and ground water.

■ Development of improved policies and practices to ensure that culturalheritage is dealt with in the planning and implementation of dam projects,given the importance of river basins for the origins of human civilisation.

Chapter 10


■ multi-stakeholder workshops convenedto receive a debriefing following the lastmeeting of the WCD Forum and todevelop a national dialogue;

■ independent mechanisms to review andresolve escalating conflicts on damprojects;

■ reviews of export credit policies follow-ing controversy on particular dams; and

■ reviews of dam safety and compensationpolicy for dam-affected people.

We expect that such examples will multiply asour report is disseminated and becomes part ofthe ongoing discourse about dams and devel-opment.

The debate about dams beganwell before the Commission, andit will continue well beyond it.We hope that one of the lastingresults of the WCD process willhave been to change the tenor ofthat debate from one of lack oftrust and destructive confronta-tion to co-operation, shared goalsand more equitable developmentoutcomes. We must not, however,give the impression that theCommission has laid the damsdebate to rest. Several importantelements of that debate mustcontinue in order to carry thediscussion on dams forward in thecontext of meeting developmentgoals.

For one thing, the KnowledgeBase is not complete. Extensive

as the information gathered, structured, andanalysed by the Commission may be, thereare still gaps in our knowledge, experience,and understanding. Many issues cannotfinally be settled because the information

needed to resolve them is still not available.The process of information gathering,analysis, learning, consultation and reviewmust go on (see Box 10.1).

Moreover the Commission, in the course ofits work, generated a wealth of ideas for thefuture. These ranged from policy, regulatoryand institutional tools to best practiceexperience at the community level. Many ofthese ideas inspired the principles andguidelines set out in our report. But thereare also many that proved too detailed, toocontext-specific, or too untested to includehere. They should not be lost. For example,the WCD Knowledge Base can be used todevelop a series of practical tools in as manylanguage versions as possible. Publishing aregular State of World Dams Report isanother possible project. Ideas for nationalor international recourse mechanisms andco-ordinated monitoring of complianceinclude creating national dams inspectionpanels, developing a register of accreditedindependent experts for review panels, andestablishing a system for assuring thatindividual dams or stages in dam projectsconform with the Commission’s guidance,through an independent and iterativeverification process along the lines of the ISO14001 third-party certification mechanism.

None of these follow-up ideas, nor much ofwhat lies in the body of the report, willadvance very far without a concerted andlarge-scale effort to build the necessaryexpertise and institutional capacity forimplementing them. This point cannot bestressed enough. It is one thing to propose amodel or set of actions that will sweep awaythe problems encountered in pursuingenergy and water development, especiallywhen dams are involved. It is quite anotherto put the solutions patiently in place.Calling upon developing countries to slot

Unlike otherCommissions, whose

reports were essentiallyaimed at governments

or the internationalcommunity, our report

has a broad and diversetarget. It is aimed

equally atgovernments,international

organisations,multinational

companies, financiers,consultants, NGO

networks, indigenouscommunities, andlocally organisedgroups of peopleaffected by dams.



without compromising individual values orlosing a sense of purpose. But it also demon-strates that all concerned parties must staytogether if we are to resolve the issuessurrounding water and energy resourcesdevelopment. It is a process with multipleheirs and no clear arbiter. We must moveforward together or we will fail.

We do not assume, of course, that there willbe no further disagreement. Dynamic debateleads frequently to better outcomes, ascontroversy can often beempowering. We do, however,believe that we will not turnthe corner and put the princi-pal conflicts around water andenergy development behind usunless the participants in thedebate decide to work togetherlocally, nationally, and global-ly, in the spirit of the Commis-sion.

The world never stands still.The context in which deci-sions on energy options andwater development must bemade is in constant evolution. Technologyis advancing, democracy and governancereform is spreading, the market is changingand the demand for greater equity is growingmore resolute and persistent. As noted inChapter 1, this century will see increasingstress on water resources worldwide. Theassessment of water and energy options andof the role dams play, increasingly takesplace against a background of competingsectors and interests. Growing needs and adwindling resource base, in both quantityand quality, will require many countries tofundamentally reassess their water manage-ment policies. We are convinced thatbusiness as usual will not prove to be aviable strategy.

proposals into a framework that does notexist, or that is incapable of accommodatingthem, is a recipe for frustration. The Com-mission is convinced that helping to buildthe capacity to consider fully all options forwater and energy development is as impor-tant as implementing any choices that aremade. Often the latter cannot take placewithout the former.

We hope that the momentum generatedduring the past three years – from the Glandmeeting, through all the papers and reviewswritten for the Commission, to the actionstaken to launch and disseminate the report– will be sufficient to carry the processforward. The establishment of the Commis-sion opened an important space for debateand dialogue, and that space has been fullyused. Further spaces must now be createdand filled.

A Call to ActionThe work of the World Commission onDams is over. But the concerns that led toits establishment are still with us. Damshave too often left a legacy of social injus-tice and environmental damage, and thatlegacy does not disappear because we haveidentified a better way of doing things infuture. Early and resolute action to addresssome of the issues arising from the past willgo a long way to building the trust requiredto enable the different actors to worktogether. So, too, would an assurance tocountries still at an early stage of economicdevelopment that the dams option will notbe foreclosed before they have had a chanceto examine their water and energy develop-ment choices within the context of theirown development process.

The experience of the Commission demon-strates that common ground can be found

Sri Lanka and other

countries have already

benefited from the WCD

process... For example, Sri

Lanka has appointed a

committee to examine thegrievances of dam-affected

people and to compensate

victims, as well as to take

action on dam safety issues

not undertaken earlier.

Tilak Ranaviraja, Ministry ofMahaweli Development

Chapter 10


The Commission has notsought to divert these globaltrends or to predict their futurescale and direction. We have,instead, tried to bring themtogether, in some form ofharmony, on a score card thatthe range of actors in thedebate can use. We believe thisreport is a milestone in theevolution of dams as a develop-ment option. We have con-ducted the first comprehensiveand global review of the

performance of dams and their contribution todevelopment. We have done this through aninclusive process that has brought all signifi-cant players into the debate. And we believewe have shifted the centre of gravity in thedams debate to one focused on optionsassessment and participatory decision-making.The rights-and-risks approach we propose willraise the importance of social and environ-mental dimensions of dams to a level oncereserved for the economic dimension.

We have told our story. What happens nextis up to you.

The work of the WorldCommission on Dams isover. But the concerns

that led to itsestablishment are still

with us. Early andresolute action to addresssome of the issues arising

from the past will go along way to building thetrust required to enable

the different actors towork together.

321

Comment


A Comment –Medha Patkar

1. The process of the World Commissionon Dams was unprecedented in bringingtogether so many of those involved indebates and conflicts over large dams.Many peoples’ movements and NGOs –the constituency that first proposed acomprehensive and independent review– actively participated. Our final Reporthas synthesised enormous amounts ofinformation and diverse opinions anddelivered many important findings andrecommendations. I hope it will be areference for all those concerned aboutlarge dams. While signing the Reportbecause of its many positive aspects, Istill feel I must put forth this opinion onsome fundamental issues that are missingor not given the central place theydeserve.

2. The problems of dams are a symptom ofthe larger failure of the unjust anddestructive dominant developmentmodel. It is beyond the scope of ourreport or the brief of the Commission toresolve all the underlying problems ofglobal development. But addressing theseissues is essential in any attempt to reachan adequate analysis of the basic systemicchanges needed to achieve equitable andsustainable development and to give apointer towards challenging the forcesthat lead to the marginalisation of amajority through the imposition ofunjust technologies like large dams.

3. The frequent failure of large dams toprovide their claimed benefits and thispoor performance needs to be recognisedand accepted. There is no reason foroptimism on the feasibility of improvingthe poor performance of dams andmitigating their impacts. A majorquestion is the feasibility of just rehabili-tation with land for land lost by agricul-turists and alternative, appropriatesources of livelihood for other displacedpeople. In large scale displacement, theexperience shows a clear failure. Withinthe value framework the Commissionpropagates – equity, sustainability,transparency, accountability, participa-tory decision-making, and efficiency –large dams have not helped attain, butrather hindered, “human development”.

4. An inclusive, transparent process ofdecision-making with equal status to allthe stakeholders, equal place for localand national needs and plans, equalsignificance to social, environmental,technical and financial aspects of plan-ning, would be a great advance, but doesnot go far enough. Even with rightsrecognised, risks assessed and stakehold-ers identified, existing iniquitous powerrelations would too easily allow develop-ers to dominate and distort such process-es. These developers include multilateralinstitutions like the World Bank thathave pushed many large dams despite

Comment


7. No undue legitimacy should be grantedto corporations and international financ-ing agencies. The sovereignty of bothpeople and the nation-state must not becompromised for anything but the basicvalues and goals of humankind. It isnecessary to give a serious critique of theprivatisation of the water and powersectors and the resulting marginalisation oflocal people and corporate dominationover natural resource-based communities.

8. The issues above are those raised by thepeoples’ movements whose role andperspectives should be given their dueplace. Not just with stories of eviction,repression and confrontation, but withtheir ideologies, strategies, and vision.

9. Over and above all this, I recognise andshare the Commission’s achievement oflocal to global consultation and, more so,a humane, well-intentioned, open andfrank dialogue under an able leadership,which needs to be kept alive beyond theshort life of this forum. To endorse theprocess and many of our findings andrecommendations, I have signed theReport. To reject the underlying assump-tions of a development model which haspalpably failed and to caution against themassive gulf between a statement of goodintent and a change in practice byentrenched vested interests I have askedfor this note to be attached.

Whatever is missing or could not be ad-dressed in the Report should form an agendafor further dialogue and research; but alsofor struggles for justice with people at theforefront, people more empowered by thisreport and otherwise to say NO to theperverted development vision, process andprojects.

Medha Patkar

non-compliance with their own policies.The State, controlled by powerful vestedinterests, may do the same. Understand-ing this takes us beyond a faith innegotiations to emphasize certainpriorities and primacies.

Communities, especially those who liveon and seek livelihood from their naturalresource base, such as forest producegatherers, farmers or fisherpeople, shouldhave the first right to planning, develop-ment and management of those resourc-es. Inequities within communities alsoneed to be recognised and addressed.Social and environmental parametersmust have a higher weightage than thetechnical and financial aspects in deci-sions concerning human development. Itis necessary to stress the ‘principle ofsubsidiarity’, according to which devel-opment planning would be based onmicro-catchments, working from ridge toriver, and from origin to sea.

5. A full assessment of the options formeeting water and energy needs as thefirst part of project planning needs to besupported. But only creating a levelplaying field for options cannot suffice.We should instead give priority to moreequitable, sustainable and effective optionsto satisfy basic human needs and liveli-hoods for all before supporting the addi-tional luxuries of the few, unjustified in theface of the many who remain deprived.

6. The wider context of national and globalpolitical and economic trends obviouslyaffect decisions in the water and powersector. These trends include the dimin-ishing role of the State, the growingmarginalisation of national laws andinstitutions, and the trampling of humanrights due to the expanding role ofprivate capital and free trade. Whilethere may be a few welcome instances ofprogress towards enhanced human rightsand equity, to say there is a global trendtowards these goals would indeed beerroneous.

399

Index


Index

The index does not cover the Executive Summary (pages xxvi-xxxvii) or the glossary (Annex II). Page numbers given initalics indicate illustrations, figures or tables.

Aactivist groups 18-20ADB 41, 45, 47, 48, 54, 57, 62, 114, 171,

188African Development Bank (AfDB) 41,

54, 56, 62, 171, 188Agno River basin 111agriculture 6, 12, 42-6, 100-101, 137-48Akosombo dam 81, 107, 108, 110, 115,

116, 118alternatives to dams 23, 135-64, 178-80,

178, 221-24, 262, 263, 266-70Amu Darya River 88Andra Pradesh II & III 128aquatic ecosystems 77-83, 90, 234-39Aral Sea 88Argentina 106, 117, 144, 305Arun III dam 19, 172Asian Development Bank see ADBAslantas dam 31, 42, 44, 49, 56-7, 63, 82,

85, 116alternatives considered 178cost recovery 48, 48costs and benefits 100, 121, 121,124, 125cropping pattern and yields 45-6cultural heritage 117displaced communities 105, 106,107financial assistance 173irrigation 44, 46, 116, 141, 190

Asmal, Kader viii, 28, 394Asurini people 107, 122Aswan High dam 13, 59, 107

cultural heritage 117, 117displacement 103flood management 59health 118

loss in fish production 85sediment management 81

Australia 11, 75, 79, 82, 83, 88, 139, 145,159, 231, 296, 304

Austria 91, 177

BBakolori dam 18, 35, 112Bakun project 111Balbina dam 111Bangladesh 13, 111, 146, 160banks 188-90, 315-16Bargi dam 106, 128baseline assessments

ecosystems 293-94social conditions 296-97

Batang Ai dam 107Bayano dam 111benefit-sharing mechanisms 243, 253-54,

300-301benefits see costs and benefitsBenin 81, 115Bhagani Tildeh river catchment 144Bhumibol dam 107bilateral financing agencies 187-90, 315bilharzia 118biodiversity

in aquatic ecosystems 77-83in terrestrial ecosystems 75-7Convention 234, 235, 238

biomass systems 154birds 78, 83, 87black stilts 78blackfly 80Blackmore, Donald ix, 395Botswana 84Brazil 11, 14, 84, 101, 101, 107, 108, 110,

111, 112, 127, 141, 144, 231

see also Tucurui damEarth Summit (1992) 234financial assistance 172participation in decision-making 177

Brazil Ceara Water Resources 128British Columbia 53Buffalo Creek dam 64bulk water supply 56-7Burnett River 296Burundi 104

CCambodia 145, 145Cameroon 84, 85, 231, 239Canada 4, 11, 14, 31, 59, 112, 128, 226

see also Grand Coulee damcanal lining 140capital costs 39-41, 48, 49, 70Cariño, Joji ix, 395Case Studies ix, 30, 31, 38, 40-42, 44-45

53-54, 350-53see also names of specific dams

Cerro de Orro dam 107Ceyhan Basin 31, 173Chad 112Chagga people 174Chakma people 111Challawa Gorge dam 113Chandil dam 18Chashma project 67Chico River 19Chikugo River 59Chile 19, 111, 143China 4, 7-9, 10, 13, 14, 17, 21, 62, 66,

100, 107, 113, 180see also Three Gorges dambenefit-sharing 127, 128corruption 187

Index


cultural heritage 118displacement of communities 104,107, 108, 109, 110electricity 152environmental conditions 190financial assistance 189flood management 160, 161health issues 118irrigation 140, 141, 144, 144, 146reparations 128water supply 158

Chinantec Indians 107Chixoy dam 18, 106Churchill Rivers project 111civil society organisations 205, 314-16climate change 7-8, 22, 53, 60, 64, 69, 74,

75-7, 149, 223Colombia 105, 127, 142, 172Colorado River ii, 78-9, 92, 125, 143, 145Columbia Basin project 44, 45, 47, 47,

49, 59, 62, 122, 128Columbia River 80, 82, 88-9, 175, 231Columbia Treaty (1968) 175Colville tribe 106, 128, 190command area 43, 43, 70compensation 105, 106, 107, 114, 124,

230, 238, 241, 242see also reparations

compliance 185-90, 190, 204, 244-50compliance plans 244, 301construction costs 39-40construction phase 99-100contracts 242-43, 298-300Convention Concerning the Protection &

Integration of Indigenous & OtherTribal & Semi-Tribal Populations inIndependent Countries (1959) 23-4

corruption 186-87, 249cost

overruns 39-42, 54, 68recovery 38, 48-9, 56, 62

cost-benefit analysis (CBA) 46, 180-82, 186Costa Rica 172costs and benefits 37, 21, 120-29

see also cost-benefit analysiscountry studies 30, 350, 351cropping intensity 43, 45, 70cropping patterns 45Cross-Check Survey ix, 28, 30, 31, 42,

43, 44, 50, 53, 62, 64, 353-56cultivation techniques 141cultural heritage 116-18, 285

DDaguangba Multipurpose project 128dam safety 63-5, 186, 272dam-building countries 9, 11Damodar Valley Corporation 60dams

debate 2-3, 17-21

existing 225-33, 291-93in the pipeline 276-77multi-purpose 39, 44, 62-3, 68opposition to 18-21

Danjiangkou project 108Danube River 177decision-making 169-75, 199, 202, 205,

206, 208-11, 263, 263, 280-81participation in 176-77, 177, 204,215, 217, 219, 222

decommissioning 10-11, 92, 184-85, 232-33demand-side management 148, 149, 150-

51, 157-60, 180Denmark 157Dhom dam 106Diama dam 119diseases 115, 118-19displacement of communities 16-17, 102-

112, 207, 240see also resettlement

dispute resolution 307distributional analysis 288Dongting Lake 161drainage 139, 161

EEarth Summit (1992) 234Echo Park dam 19economic growth 4-5economic internal rate of return see EIRReconomic profitability

hydropower dams 54-6irrigation dams 47-8water supply dams 58

ecosystem enhancement 86-7, 231ecosystems

baseline surveys 293-94impacts 10, 15-16, 16, 21-2, 73-93,234-39

Egypt 13, 59, 66, 107, 116-18, 145EIRR

Ghazi-Barotha project 291irrigation dams 46, 47, 48Kariba dam 55multi-purpose projects 62water supply dams 58

electricity 14, 101, 101, 116, 121, 128,148-56, 150see also hydropower

Embera people 107, 111employment 101-102, 115Endangered Species Act (1974) 19energy resources 148-56, 153-54entitlements 240-43environmental flow assessments (EFA)

294-95environmental flow releases (EFR) 238-39environmental impact assessments (EIA)

19, 89, 177, 182-83, 183, 187, 236,241, 282-85

environmental impacts 21-2, 25, 223-24,289, 289, 291-92see also ecosystems impacts

Epupa dam 19, 117equity 125-29, 204, 205Ertan project 127European Union 15European Wind Energy Association 154evaluation studies 47, 54, 184, 226-27,

274, 312existing dams see damsexport credit agencies (ECA) 188, 246,

312, 316

Ffinancial agencies 188-90, 315-16financial internal rate of return see FIRRfinancial profitability

hydropower dams 54-6irrigation dams 46-8water supply dams 58

findings see WCD findingsFinland 91Finnish International Development

Agency (FINNIDA) 174FIRR

irrigation dams 46water supply dams 58

Fisching Project 177fish 16, 78, 79, 80, 81, 82-3, 84-6, 119,

231, 237, 295-96, 296fisheries 84-6, 90, 113, 295-96flood control

benefits 58-59limitations 60, 83dams 58-62

flood management 14-15, 60-62, 68, 84,160-63, 161, 162, 239

floodplain ecosystems 83-4, 90, 145, 145,147, 237-38

Food and Agriculture Organisation(FAO) 140, 316

foreign assistance 170-73, 173, 174Forestry Stewardship Council (FSC) 246forests 75, 76, 83, 161France 4, 10, 81, 91, 92, 231free, prior & informed consent 218-219,

280-82Freudenau dam 177Friesach project 177Funtua dam 104

GGansu province 144, 144Gariep dam 44, 115, 121, 122, 124Gavaio da Montanha people 107, 122gender disparities 114, 116, 216Germany 4, 14, 154, 158Gezira-Managil irrigation schemes 140Ghana 81, 107, 108, 110, 115, 146

401

Index


Ghazi-Barotha project 128, 291Gland Workshop iii, vii, 18, 21, 27, 28Glen Canyon dam 78-9, 79global warming see climate changeGlomma and Laagen Basin 31, 40, 50, 53,

59, 66, 103, 179alternatives considered 178costs and benefits 121, 121, 124,125fish passes 82political decision 170services 121, 122

Goldemberg, José ix, 395governance 22-3, 205, 209Grand Coulee dam 31, 44, 49, 50, 51, 53,

66, 100alternatives considered 178cost recovery 62costs and benefits 47, 121, 122, 123-24, 124, 125, 190cultural heritage 117displacement of communities 105,106, 113, 115ecosystems 80, 81, 82, 85, 86, 88-9employment 99, 102flood control 59performance 55, 55political decision 170reparations 128

Great Fish River 80greenhouse gases (GHG) 74, 75-7, 76, 77,

90, 92, 122, 149, 223, 287-88gross value of production 45-6groundwater abstraction 146groundwater pumping 139, 139Guatemala 18, 106Gwembe Tonga people 18, 106, 107, 114,

119Gwembe Tonga Rehabilitation and

Development Programme 128

HHadejia River 113Hainburg dam 177Hanoi 14Harvey Basin Restoration Trust 75health issues 100, 115, 118-20, 236, 241,

284Hells Canyon dam 82Helsinki Rules (1996) 252, 254Henderson, Judy viii, 395Hendrik Verwoerd dam 170Hillsborough dam 86Himba people 117HIV/AIDS 100, 115, 119Ho Chi Minh City 14

Hoa Binh 107Houay Ho dam 108human rights see rightsHungary 185Hydro-Québec 128hydropower 12, 14, 101, 102hydropower dams 49-56, 62, 68Hydropower and Environment 91

IIbaloy people 111ICOLD World Register of Dams 314Iguacu River 177Ilisu dam 19, 188impact assessments 241, 282-85, 306-307

see also environmental impactassessmentsenvironmental flow assessments294-95

impoverishment risk analysis 241, 297-98Inanda dam 117India 4, 7, 9, 10, 10, 17, 19, 21, 41, 58,

66, 104, 172see also Sardar Sarovar projectcosts and benefits 123-24, 127cultural heritage 117, 118displacement of communities 18,106, 107, 108, 110, 115ecosystems 75electricity 152environmental conditions 190financial assistance 171-72, 188flood control 60health issues 118irrigation 13, 44, 100, 140, 141, 144,145, 146reparations 128water supply 157, 158

indigenous peoples 19, 38, 105, 106,110-12, 207, 216, 218-20, 256

Indonesia 4, 105, 108, 113Indus Basin Irrigation System (IBIS) 44,

48-9, 67, 122, 122, 140Indus River 59, 90industrial usage of water 13-14Innu people 112Inspection Panel 19Integrity Pacts 249, 305Inter-American Development Bank 41,

171, 172, 188, 216Intergovernmental Panel on Climate

Change (IPCC) 7International Association for Impact

Assessment 314International Bank for Reconstruction &

Development (IBRD) 170see also World Bank

International Commission on Irrigation& Drainage (ICID) 27, 173, 314

International Commission on Large Dams(ICOLD) 11, 27, 65, 73, 172, 173,314, 370

International Court of Justice 254International Covenant on Economic,

Social & Cultural Rights (1966) 24International Energy Agency 91, 314International Energy Association (IEA) 73International Finance Corporation (IFC)

188, 230International Hydropower Association

(IHA) 73, 173, 314International Labour Organisation

(Convention 169) 216, 219International Organisation for Standardi-

sation (ISO) 246, 314, 315, 318International Rivers Network (IRN) 27, 41International Water Management

Institute 68investment 11, 13, 249-50Iran 10Ireland 295irrigated area 43, 43, 44-5irrigation 12-13, 13, 100-101, 137-48

dams 42-9, 62, 68systems 138-43

ISO 14001 management system standard257, 315, 318

Israel 141Itá dam 107, 110Itaipu dam 127IUCN see World Conservation Union

JJain, Lakshmi Chand viii, 395Jama’are River 113Japan 9, 10, 59, 60, 127, 157, 158, 231Japanese encephalitis 118Jordan 141

KKainji dam 85, 109Kano River project 113Kao Laem dam 105, 107Kaptai dam 111Kariba dam 18, 31, 40, 42, 50, 52, 53, 55

access to electricity 128alternatives considered 178costs and benefits 121, 121, 124, 125displacement of communities 103,106, 115, 190ecosystems 75, 85, 86employment 99, 102financial assistance 173health 118, 118-19political decision 170reparations 128

Kedung Ombo dam 108Kelly Barnes dam 64Kenya 84, 104, 107, 146

Index


Kiambere Reservoir 104, 107Kolyma River 113Korea 237Kotri barrage 88, 112Kpong dam 110Kuna people 107, 111Kyoto Protocol 287

LLake Chad 84Lake Roosevelt 122Laos 20, 75, 108, 113, 145, 183large dams

functions 12, 12regional distribution 8types 11

legislation 127-28, 185, 186-87, 189, 200,216, 226, 242-43, 249, 255, 298-301

Lesotho 231Lesotho Highlands Water Project 19-20,

119, 187licensing procedures 185, 226, 232-33,

272, 274life-cycle assessment 286-87Lindahl, Göran ix, 395Lingjintan project 113, 190Liu-Yan-Ba project 107Logone-Chari system 84Lubuge project 127

MMadden dam 117Maguga project 119Mahaweli Development Programme 105,

114, 115, 319Maheshwar dam 188malaria 118, 119Malaysia 107, 111, 141, 162, 162Mali 83, 84, 112Manantali dam 84, 112, 119Manibeli Declaration 26maps 31Marshall Plan 170Matsubara dam 59Maya Achi people 18, 106Mazatec people 18, 106Mekong River 84, 145mercury levels 118, 119Mexico 18, 49, 106, 109, 111, 145micro-irrigation systems 141migration 82-3Miguel Aleman dam 18, 106Mississippi River 160Missouri River 111mitigation measures 82, 90, 91, 93, 241-43

see also compensation; resettlementmitigation, resettlement and development

action plan (MRDAP) 298-300Mohale dam 231Moore, Deborah x, 395

Morocco 66, 145Morse Report (1992) 26Mozambique 86Mubuku project 109Muda Irrigation Scheme 141multi-criteria analysis 223, 224, 236, 285-

86multi-purpose dams see damsmultilateral financing agencies 187-90, 315Multilateral Investment Guarantee

Agency (MIGA) 230Mun River 84Mur River 177Murray Darling Basin 88, 231Murray River ii, 79, 83, 140

NNam Ngum River 59-60, 61, 256Nam Theun II 20, 75Namibia 19, 117Nangbeto dam 107, 115Narmada River 128Narmada Sagar dam 117Narmada Water Disputes Tribunal 104National Environmental Protection Act

(1969) 19natural vegetation 139, 158-59needs assessment 222, 262, 263, 264-65negotiated outcomes 208-211, 208negotiations 218, 219, 280-81Nepal 13, 19, 53, 172, 256, 317Netherlands 160New Zealand 78Niger 112Niger River 83, 84, 85Nigeria 18, 58, 84, 104, 109, 112, 113, 140Nile Delta 81, 85, 145Nile River ii, 59non-dam options see alternatives to damsNORAD 174, 183Norway 11, 31, 91, 178, 185, 190, 237

see also Glomma and Laagen Basinnuclear power 153Nya Heun people 108

OO&M costs see operational & mainte-

nance costsOECD Convention on Combating

Bribery of Foreign Public Officials inInternational Business Transactions(1997) 187, 249

OECD countries 4, 30Ogallala aquifer 146Okavango Delta 84Ontario Hydro Study 65operation issues 183-84operational & maintenance (O&M) costs

48-9, 48, 54, 62opposition to dams see dams

options for energy & water needs seealternatives to dams

Orange River 44, 80, 81, 88, 125, 170, 178Development Project 102, 122Pilot Study 80

O’Shaugnessy dam 18

PPak Mun dam 19, 31, 40, 51, 55, 113, 115

alternatives considered 178costs and benefits 55, 121, 124, 125cultural heritage 117displacement of communities 104ecosystems 82, 84, 85environmental impact assessment183, 190financial assistance 173

Pakistan 7, 13, 31, 67, 113, 122, 128, 140,291see also Indus Basin; Tarbela damfinancial assistance 173irrigation 141, 145, 146

Panama 107, 111, 117Panama Canal 102Pangani Falls Redevelopment Project 174Pangue project 111Papaloapan River Commission 18, 106Paraguay 106, 144Parakaná people 106, 107, 122,participation in decision-making see

decision-makingPatkar, Medha viii, 396Pecos valley 145Pehuenches people 111performance 21, 38, 45

Columbia Basin project 47evaluations 184findings 68-9flood control dams 58-62hydropower dams 49-56improvement 138-40, 227-28multi-purpose dams 62-3water supply dams 56-8

performance bonds 247-48, 301, 303-304,304

Philippines 19, 58, 101, 110-11, 188plankton 81Poland 61-2political decision-making 169-70, 170Pollan dam 295pollution 7Pongolapoort dam 83, 84, 85population 3, 17, 17Porto Primavera dam 84Position Paper on dams and the Environment

(1997) 27private sector 205, 207, 314-15project

benefits see benefit-sharing mecha-nisms

403

Index


implementation 262, 272-73operation 263, 274-75preparation 262, 270-71

project-level impact assessments 283-85public acceptance 177, 215-20

Rrain-fed agriculture 143-45, 144rainwater harvesting 158, 158Rajasthan 144Ralco dam 19, 111Ramsar Convention on Wetlands 86, 234,

235, 238recycling of water 145-46, 159Regional Consultations ix, 28, 32, 98,

117, 357regulations see legislationreparations 128-29, 133, 229, 230-31resettlement 17, 20, 22, 103, 105, 106,

107-110, 128, 241-43, 298-300review panels (IRP) 302-303Rhine River 160Rhone River 81, 160Rift Valley fever 118, 119rights 19, 20, 22, 24, 200-202, 203, 203,

204, 206, 256rights and risks approach 202, 206-210,

215, 216, 240, 241Rio+10 process 313, 316Rio de Janeiro 234Rio Declaration on Environment and

Development (1992) 24, 200, 201,391-393

Rio Grande project 127Rio principles 201-203, 207risk

analysis 241, 297-98assessments 290-91, 291

risks 26, 186, 207-208, 207, 237river fragmentation 87, 88-9River Severn 64rivers see also aquatic ecosystems

flow regimes 78-81, 81restoration 10, 234-36shared 173-75, 174, 251-56, 306-307transformation by dams 15-16, 15

Role of Dams for Irrigation, Drainage andFlood Control (2000) 27

rural electrification 154-55Russia 11, 14Ruzizi project 104Rwanda 104

Ssafety see dam safetySahel 83salinity 66-8, 69, 139-40, 139, 159salmon 78, 81, 82, 85, 89, 113, 295Salto Caixas project 177San Roque dam 111, 188

São Paulo 34, 101, 101Sardar Sarovar project 19, 26, 104, 105,

108, 114, 115, 118, 172Saudi Arabia 146schistosomiasis 118, 119Scudder, Thayer viii, 396sediment management 81-2, 293sedimentation 10, 16, 44, 62, 65-6, 65, 69,

75, 81, 138-39, 228Senegal 84, 112, 145, 231, 239Senegal River 84, 112, 116, 127shared rivers 173-75, 174, 251-56, 306-

307shared values 199, 199, 202, 206Shepparton Irrigation Region 139Shimouke dam 59Shuikou project 127Silenced Rivers (1996) 27Singkarak project 113Sirindhorn dam 107Slovakia 179Sobradinho reservoir 112social conditions, baseline assessments

296-97social impacts 16-17, 22, 25, 97-130, 289-

90, 289, 291-92socio-economic impacts 99-102, 112-14,

182, 223-24, 228-31, 241Sokoto River 112solar photovoltaics (PV) 154solar thermal systems 154South Africa 11, 20, 53, 88, 115

see also Gariep dam; Orange RiverDevelopment Projectaccess to electricity 128cultural heritage 117ecosystems 82, 83, 84, 85, 87water supply 158-59

South African National Water Act 231,239, 253

South Korea 10Spain 9, 11, 15, 185Spokane tribe 106Sri Lanka 51, 105, 114, 115, 145, 317Sri Sailam project 106, 107stakeholder analysis 279-80stakeholders forum 217-18, 279-80, 286statistics 368-82Steiner, Achim x, 396Sterling Forest 159strategic impact assessment 282-83submissions 29, 32, 211, 357-58Sudan 84, 112, 118, 118, 140Sudd 84Sulawesi 105supply-side options

energy 151-54water and irrigation 143-48water supply 158-59

surface irrigation 46, 141, 228

Suriname 305Sweden 91, 237Swedish International Development

Agency (SIDA) 174Switzerland 91Syr Darya River 88

TTana River 84, 104tank systems 144-45Tanzania 172, 174Tarbela dam 31, 42, 44, 46, 50, 51, 52, 53,

56-7, 99alternatives considered 178costs and benefits 121, 122, 123,124, 125displacement of communities 105,106, 107, 112, 128, 190ecosystems 82, 88financial assistance 173flood management 59gender disparities 114-15, 115sedimentation 66

tenders 270Tenughat reservoir 60terrestrial ecosystems 75, 75Teton dam 64Thailand 19, 31, 105, 107, 108, 142, 145,

158, 183, 317see also Pak Mun dam

Thematic Reviews 28, 30, 32, 33, 356-57Theun Hinboun project 113, 183Three Gorges dams 19, 104, 118, 187,

188, 189Tiga dam 113Tocantins Basin 173Togo 81, 107, 115Tong River 237Tonga people see Gwembe Tonga peopleTransparency International 187, 315Trinidad 86Trushuli-Devighat hydropower station 53,

256trust funds 247-48, 304-305Tucurui dam 31, 42, 50, 53, 102

alternatives considered 178costs and benefits 121, 121, 122,123, 124, 125displaced communities 105, 106, 107ecosystems 75, 77, 82, 85-6, 86financial assistance 173financial performance 55, 56health issues 119, 119, 122and legislation 127, 190

Turkey 10, 19, 31, 44, 45-6, 48, 117, 131,173, 188see also Aslantas dam

Turkmenistan 66

Index


UUganda 109, 157-58UN Convention on Biological Diversity

234, 235, 238UN Convention on Law of Non-Naviga-

ble Use of International Watercours-es 175, 252, 254, 256, 306, 307

UN Declaration of Human Rights (1947)200, 202, 387-90

UN Declaration on the Right to Develop-ment (1986) 24, 200-201, 202, 383-86

UN Draft Declaration on the Rights ofIndigenous People 216

UN Millennium Report 199, 209UNDP Human Development Report

(2000) 203, 203UNDP World Energy Assessment 150-51United Kingdom 158, 159, 317United Nations 140, 316United Nations Charter (1945) 23, 199United Nations Conference on the

Human Environment (1972) 182,201

United Nations Development Programme316

United Nations Educational, Scientific &Cultural Organisation 316

United Nations Environment Programme316

United States 4, 9, 10, 13, 14, 15, 21, 31,61, 111, 169, 170, 185, 226see also Grand Coulee damcorruption 187ecosystems 91, 93, 231flood management 160irrigation 140, 143, 146water policy 237water supply 159

United States Agency for InternationalDevelopment (USAID) 173

United States Bureau of Reclamation 173

Universal Declaration on Human Rights(1948) 23, 387-90

Upper Krishna project 118Upper Sinú River 105urbanisation 4Urrá 1 dam 105, 113

VVaal River 88values see shared valuesVan der Kloof dam 53, 115, 121, 122, 124vegetation 75, 76, 77, 80, 83, 94, 139,

158-59Veltrop, Jan x, 396Venezuela 144Victoria dam 51Vietnam 14, 62, 107, 145, 185Volta River 81, 85, 110

WWaimiri-Atroari people 111Waitaki River 78water

appropriation methods 143-45quality 7, 88, 139-40, 158rights 143supply 156-60supply dams 56-8tariffs 58, 142, 147, 157water-stressed countries 6, 7, 7waterlogging 66-8

WCDestablishment 25-8mandate 28, 195members viii, ix, x, 394-6policy framework 202, 203-206process 29Secretariat 397-8

WCD Forum 27, 29, 31WCD Global Review xxviii-xxxWCD Knowledge Base 29, 38, 56, 58, 68-

9, 359-67

priorities for strengthening 317WCD findings

compliance 190-91decision-making 188-89ecosystems impacts 92-3needs 163-64planning 191-92socio-economic impacts 129-30

wetlands 83-4, 86-7, 145, 145Wetlands International 86-7wind power 153-54Working for Water programme 158-59World Bank 19, 20, 27, 40, 41, 42, 45, 47,

48, 49, 54, 58, 62, 67, 171-72, 182,230Operations Evaluation DivisionReport (OED)(1996) 26, 27, 41, 46,56, 114policies 188

World Commission on Dams see WCD

XXiaolangdi dam 109-110

YYacyreta project 106Yakutia 113Yangtze River 62, 104Yantan project 127Yellow River ii, 107Yemen 145yields 12, 45-6

ZZaire 84, 104Zambezi River 85Zambia 31, 107, 114, 121, 128, 145

see also Kariba damZimapan resettlement 109Zimbabwe 31, 91, 107, 115, 121, 237

see also Kariba damaccess to electricity 127-28

Date post:	02-Dec-2014
Category:	Documents
Upload:	vishwanath-maraiah
View:	454 times
Download:	5 times

World Commission on Dams Final Report

Documents