Profile of Current Practices for Benefit Sharing and Compensation Allocation in Hydropower Development Projects in Mekong Countries
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Profile of Current Practices for Benefit Sharing and Compensation Allocation in Hydropower Development Projects in Mekong Countries

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Mekong Forum on Water, Food and Energy. 2012. Presentation from Session 13: Framing Entitlements and Benefit-Sharing for Dam-Affected Communities

Mekong Forum on Water, Food and Energy. 2012. Presentation from Session 13: Framing Entitlements and Benefit-Sharing for Dam-Affected Communities

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  • 1. Profile of Current Practices for Benefit Sharing and Compensation Allocation in Hydropower Development Projects in Mekong Countries Mekong Project 4 on Water Governance 14 November 2012 Hanoi, Vietnam
  • 2. Research Focus Hydropower Dam Development Inclusiveness of stakeholders’ participation Outcomes Processes (Distributive (Procedural Inclusiveness of Equity) Equity) stakeholders’ interests in the agenda setting Results of allocation b Benefits CostsMonetary Non- Envi- Social monetary ronment a
  • 3. Case Study Projects  Theun- Hinboun Expansion, Lao PDR  Yaly, Vietnam  Lower Se San 2, Cambodia Yaly THXP LS2 operating Under construction/ Under planning/since 2002 finish 2012 start 2012
  • 4. Sharing of Benefits to Local Communities Outcomes Case study projects/ Countries Yali, Vietnam THXP, Lao PDR LS2, Cambodia1. Sharing of project services Electricity national power grid national power grid national power grid Water supply  Free supply resettles supply resettles 2. Sharing of non-monetary benefits Resources entitlements    Priority in hiring  during dam construction dam construction3. Sharing of monetary benefits Development funds  provided & managed by provided by Project/ Project managed by Gov. Taxes  to provincial Gov.  to national Gov.  to national Gov. Revenue sharing    Sharing of ownership    • Non-monetary benefits relating to livelihood options could be explored more. • Development funds/taxes to local authorities need mechanisms to ensure the revenue used for local development. • More direct sharing schemes have not been widely used.
  • 5. Compensation of Costs to Local Communities Outcomes Case study projects/ Countries Yali, Vietnam THXP, Lao PDR LS2, Cambodia1. Compensation to resettles Houses  new houses built  new houses built Details are not Agricultural land  land sizes of each HH  average land size is available. But it is surveyed and allocated allocated across all HHs. expected that Crops monetary calculation monetary calculation compensation Public utilities  road/electricity/ water  road/electricity/ water package in terms Health/ education  health centers/ schools  health centers/ schools of cash and lost Other supports  agricultural extension  Food supplied till income assets will be target reached provided.2. Compensation to made to Cambodians   other affected areas after the incidences.3. Compensation to loss Forestry tax provided to Budget provided/ Budget provided of ecosystem provincial Gov. managed by the Project to restore impacts • Impacts areas recognized are ONLY areas flooded -- resettles provided with compensation packages BUT other affected areas are not eligible. Noted that within the eligible group, there are often subsequent issues after compensation. • Impacts on ecosystem is another area needed attention. Need clear plan on what impacts, how to implement and how to monitor the restoration works under the funds.
  • 6. Selected Key Issues on Outcomes Local communities is not the target beneficiaries of hydropower projects Benefits of services - Electricity targets urban sectors and some is exported. - Electricity supplied to national power grid. need facilities for local to benefit. - Improvement of physical infrastructure provided. Other benefits to enhance livelihood options could be explored more. Monetary Benefits - In forms of development funds/ taxes to local authorities. need to ensure the use of revenue (more difficult to secure when it is sent to the state’s budget). - A more direct sharing schemes ? Electricity users Kon Tum % (NRT)/ 50% (VAT) Natural resource tax EVN power grid Annual provincial budget Gia Lia Yaly Hydropower Value added tax % (NRT)/ 50% (VAT) Company Forestry tax Provincial fund for forest protection
  • 7.  Impact areas of dam development recognize only the areas flooded and tend to exclude other anticipated and possible impacted areas. Compensation Eligible - As a result of such scoping, eligible package persons for compensation are only those losing their physical assets during dam construction. Area flooded = impact zone - Others that would affect during post- construction and operational periods are not considered. - These affected groups are also not included in information sharing. Other impacts (more floods, less fish, water shortage, - Need a thorough study of impacts poor water quality) NOT and a continue monitoring on arisen Eligible impacts. ?
  • 8.  Negative impact on ecosystem has not been adequately addressed in allocation of compensation. - Scoping of environmental costs too is still debatable + often has no representing agent. - Details ecosystem impacts are usually limited. - In the case studies – Yaly has ‘forestry tax’ and LS2 has budget for ‘restoration of environmental impacts’ -- Need clear plan on implementation and monitoring of the restoration works under the funds. Agricultural land included in compensation package often has subsequent issues after allocation. - Main principle is to provide equivalent size. Types and quality are often unknown. - Let to disputes on unfair allocation/ changes in livelihoods due to unsuitable land.
  • 9.  Compensation package provided by the projects may not be responsive to the actual needs of the affected communities. - Compensation package often provided uniformly across all groups whereas there are actually diversity in locations, ethnics, and genders. - A careful analysis of different groups and their direct participation in the planning process would help enhancing efficiency in allocation of compensation. Gender Upstream- Downstream ethnics
  • 10. Selected Key Issues on Procedures Primary discourse to legitimize hydropower projects is to stimulate national macro-economic development, benefiting the local project area and people are not the principal concern. generate electricity supplying growth Local project area contributing to and people ??? national economy Key agencies responsible for hydropower development are from energy sector and may overlook social and environmental aspects. Water for domestic/irrigation Water for hydropower Min. of Agricultural & Rural Development ? Min. of Industry & Trade primary mandate to provide mandate on livelihoods energy supply to industry
  • 11.  Limited representation and meaningful participation of local communities in project development in general and in decision-makings on allocation of compensation in particular. - Questionable public participation / acceptability of EIA - Resettled residents directly involved in certain procedures but not on decision (e.g. survey for lost assets but not on identification of prices, inform of prescribed relocation sites but not consulted on their preferred locations). No follow-up mechanism to address concerns of resettled communities after compensation allocation process is done . - The official reports of all cases stated that the resettled residents have accepted all compensation packages allocated. - The study however found many concerns arisen after relocations BUT there is no mechanism for people to make claims.
  • 12. More Issues ?We need your opinions!
  • 13. GROUP DISCUSSION Two small group discussions Immediate and Long-term impacts of ongoing impacts of dam development and dam development and management management Each group will:a) Validate and firm up the list of agenda issues (a matrix of initial list is provided),b) Select three key issues and brainstorm on appropriate approaches to address them, andc) Brainstorm on appropriate mechanisms to operationalize the approaches (i.e. lead responsible agencies and budgeting resources ) Each team thereafter report back to the plenary to exchange opinions.
  • 14. Matrix A: validation of key findings and agenda issues (a) No Agenda issues Validity  /   Distributive equity issues 1 Unfulfilled compensation terms based on people’s understandings of promised compensation package 2 Terms delivered but turned out to be defective or undesirable (e.g. farm land with poor soil quality) (please add more items) Procedural equity issues 1 Lack of full disclosure of information relevant to planning during construction and operation of dam projects 2 Gender difference is not critically considered particularly in the accounting and decision-making for compensation of affected groups (please add more items)Matrix B: appropriate approaches to address and operationalize key issues (b)/(c) No Selected key agenda issues Approaches/ mechanisms to Operationalized (a) address the issues (b) mechanisms (c) 1 2 3