VZCZCXRO9129
RR RUEHCHI RUEHCN RUEHDT RUEHGH RUEHHM RUEHLN RUEHMA RUEHNH RUEHPB
RUEHPOD RUEHVC
DE RUEHPF #1189/01 2601012
ZNR UUUUU ZZH
R 171012Z SEP 07
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC 8952
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE

UNCLAS SECTION 01 OF 05 PHNOM PENH 001189 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS, EEB/CIP/BA, EEB/ESC/IEC, AND INR 
STATE FOR OES/PCI/ACOVINGTON AND OES/ENV/ASALZBERG 
STATE PLEASE PASS TO USAID/EGAT/TMILLER AND ANE/JWILSON 
BANGKOK FOR REO--WALLER 
BANGKOK FOR USAID/RDMA/WBOWMAN AND USAID/OFDA/TDOLAN 
BANGKOK FOR FAS--MEYER 
VIENTIANE FOR JARCHIBALD AND HSOMERS 
HANOI FOR AHERRUP 
RANGOON FOR ENVIRONMENT OFFICER 
 
E.O. 12958: N/A 
TAGS: EAGR ENRG EIND SENV VM LA CH CB
 
SUBJECT:  DAMMING THE MEKONG:  HYDROPOWER'S HIGH PRICE 
 
¶1.  (SBU) Summary.  Existing and planned hydropower projects along 
the world's eighth largest river reflect the development dilemma of 
cheaper, low-polluting power vs. healthy fisheries and the interests 
of downstream communities.  Villagers along eastern Mekong 
tributaries in Cambodia complained to Regional Environmental Officer 
and Econoff of unpredictable and destructive floods, fish catch 
declines, and health problems following the construction of dams 
upstream in Vietnam.  Cambodian government officials--who are 
planning their own hydropower projects--were largely uninformed and 
unconcerned about these consequences.  However, given the tremendous 
economic, environmental, social, and food security implications of 
hydropower on the world's most productive freshwater fishery, this 
issue deserves greater attention from Mekong region governments and 
donors alike.  End Summary. 
 
¶2.  (U) The recent construction of dams in Vietnam and Laos on three 
Mekong tributaries--the Sekong, Srepok, and Sesan, known 
collectively as the "3S" rivers--as well as on the Mekong River 
itself has negatively affected villages in Cambodia's sparsely 
populated and poverty-stricken northeast.  Concrete, reliable 
information about how many dams are in operation, how many are under 
construction, how many are in the planning stage, and the locations 
of all of these is hard to obtain.  Various sources report a total 
of five completed dams along the Vietnamese portion of the Sesan 
River, "several" dams under construction along the Vietnamese 
portion of the Srepok river, and five dams planned or being studied 
along the Laotian portion of the Sekong River.  Regional 
Environmental Officer and Econoff recently traveled to Stung Treng 
and Ratanakiri provinces in northeastern Cambodia to investigate the 
impact of the dams on downstream Cambodian communities.  Septel will 
report on forestry and land challenges in the area. 
 
Communities Flooded, But Officials Dismiss Claims 
--------------------------------------------- ---- 
 
¶3.  (U) In recent years, changes in river flow have had a variety of 
economic, health, and social impacts on affected communities, 
according to residents interviewed during on-site meetings with 
three different villages in Stung Treng and Ratanakiri provinces and 
in discussions with village representatives attending a "3S River 
Celebration" in Ratanakiri.  Communities reported that fish catch 
has decreased over recent years, the result of both illegal fishing 
practices (e.g. the use of electric shock, explosives, or illegal 
nets) and the environmental impact of upstream dams.  Several 
communities reported more floods than normal and sudden floods at 
unusual times--such as during the dry season.  Coming without 
warning, these floods have a disastrous affect on already poor 
communities--ruining crops, drowning farm animals, and leading to 
the loss of boats and other equipment.  Villagers also reported 
greater erosion along river banks, and, when rainy season floods 
don't materialize as expected, the loss of fertile sediment normally 
deposited on fields.  Some villagers reported a decline in water 
quality, which they blamed for outbreaks of diarrhea and skin 
diseases. 
 
¶4.  (U) Provincial government officials were generally dismissive of 
villagers' claims and ill-informed about dams in neighboring 
countries or plans for dams in Cambodia.  The Ratanakiri Chief of 
Cabinet dismissed villagers' claims that they had experienced 
flooding in May, explaining that floods simply weren't possible in 
the dry season.  He cautioned, "Don't believe everything they [the 
villagers] tell you; they are illiterate and don't understand 
science." (Comment:  Evaluating the villagers' claims is genuinely 
difficult.  Without data about dam releases, rainfall, and river 
water levels at various locations, it is hard to verify villagers' 
statements and to determine if these reported problems are due to 
poor dam management, well-planned releases or natural flood events. 
Nonetheless, we found the officials' ready dismissal of the 
villagers' claims to be worrisome.  Cultural differences also seemed 
to be at play, as affected communities were often members of 
indigenous, non-Khmer-speaking ethnic groups, while provincial 
officials are almost exclusively ethnic Khmer and often from other 
parts of the country.  End Comment.) 
 
Attempts at Flood Warning Fall Short 
------------------------------------ 
 
¶5.  (SBU) When the Yali Hydropower Plant in Vietnam's Central 
Highlands first came into operation in the late 1990's, Vietnam 
 
PHNOM PENH 00001189  002 OF 005 
 
 
failed to give advanced warning of water releases from the dam, 
resulting in loss of life and property along Cambodia's Sesan River. 
 Cambodian officials told us that the Vietnamese government now 
provides adequate notice, but an extremely inefficient communication 
system within Cambodia meant that such warnings often reached 
affected communities too late.  Yun Chetana, the Director of the 
Ratanakiri Provincial Water Resources Department, explained that 
notifications of an impending release are sent from Vietnam to Phnom 
Penh by fax, the faxes are retransmitted to the provincial post 
office, but he is often not told that they have arrived until 
several days later.  Upon receiving the information, he sends 
letters via motorcycle taxi to district offices, which are 
responsible for passing the information to commune councilors, who 
must inform the villages they represent. 
 
¶6.  (SBU) Although communication could break down at any point in 
the chain, Chetana said the main problem was getting the incoming 
notifications to his office.  He said that authorities in Vietnam 
could send him a fax or an e-mail directly, but that his office 
lacked both a fax machine and Internet access. He also noted that an 
inexpensive cell phone or radio network would speed up his outgoing 
notifications. His own Department had no budget for this equipment, 
he explained, and he asked whether the USG could assist with "a few 
hundred dollars" for the purchase of a fax machine. 
 
¶7.  (SBU) Villagers reported that they often received no warning at 
all of coming floods, or that the warnings arrived too late.  In one 
tragicomic case, villagers experienced a destructive and unexpected 
flood in the dry season, only to receive word about a week later of 
another major water release scheduled for the 6th of the month.  The 
villagers put considerable effort into moving all their remaining 
animals, boats, etc. to higher land in anticipation of the flood, 
which never came.  Only then did they realize that the warning 
pertained to the first flood--but had arrived nine days after the 
flood occurred. 
 
Attempts to Coordinate with Other Countries Falter... 
--------------------------------------------- -------- 
 
¶8.  (SBU) Few of the Cambodian government officials we met seemed 
particularly concerned about the dams, and none saw themselves as 
being in a position to have any influence on the operation of 
existing dams or the construction of new ones.  River guards just 
south of the remote Khone Falls at the Lao-Cambodia border told us 
they had informed the Director of the Stung Treng Fisheries 
Administration about the construction of a new dam on a channel of 
the Mekong in southern Laos and that they had been hearing 
explosions coming from the river just north of their station. 
(Note:  The location would suggest that this is the Don Sahong dam, 
though Lao officials report that no action has yet been taken on 
this dam.  End Note.)  When we asked the Director, however, he 
stated that he had not investigated their reports and said that 
discussions with other countries were not part of his job. 
Similarly, the Governor of Stung Treng province said he had not 
heard anything at all about the proposed construction of a dam at 
Don Sahong.  He reported that he had no input into discussions about 
the construction of dams in Laos or Vietnam nor was he aware of any 
investigation into their downstream effects on Cambodia. 
 
¶9.  (SBU) Staff from the Cambodia National Mekong Committee (CNMC) 
in Phnom Penh and the Director of the Water Resources Department in 
Ratanakiri province were more engaged and well informed than other 
officials we met, although one CNMC staffer reported that he 
obtained his information from the newspaper rather than from his 
government colleagues.  Even these interested officers reported 
difficulties in coordinating with Vietnam.  Officials from both 
agencies told us that although the two governments schedule regular 
meetings to discuss issues related to the dams, a lack of funding 
for them to travel to Vietnam frequently caused those meetings to be 
cancelled.  As a result, consultations take place most often in 
Cambodia, and far less frequently than they should. 
 
¶10.  (SBU) Environmental Impact Assessments (EIAs), which include 
assessments of impacts on local and downstream communities, are 
supposed to be completed before dam construction begins, but 
experience suggests this rarely occurs.  NGOs claim that without 
their pressure, some EIAs would not have been performed at all. 
Moreover, EIAs are paid for by the developers building the 
dams--raising serious questions about the independence and integrity 
 
PHNOM PENH 00001189  003 OF 005 
 
 
of the assessments.   CNMC members told us that they had just 
received a lengthy Vietnamese-language EIA to be discussed at a 
meeting to be held in less than a month.  They complained that it 
was unrealistic to expect them to have the document translated from 
Vietnamese to Khmer and find time to read it in that time.  They 
planned to translate and read only the Executive Summary. 
 
¶11.  (U) The Mekong River Commission (MRC--an international 
organization composed of representatives from Thailand, Laos, 
Cambodia, and Vietnam) has a Flood Management and Mitigation Program 
(FMMP), which includes a component for mediation of trans-boundary 
flood issues.  The MRC receives donor funding to implement various 
technical and scientific studies, as well as some practical and 
community-based projects.  A 2005-2009 USAID/RDMA project aims to 
strengthen the MRC's capacity and skills to prevent, address and 
mitigate conflicts in the Mekong River Basin.  Initial activities 
involve raising awareness on conflict issues, developing common 
terminology and identifying conflict hotspots.  The 3S rivers, the 
Mekong delta, and fisheries management in general have all been 
identified as hotspots. 
 
¶12.  (U) The MRC Secretariat holds semi-regular (about twice per 
year) Steering Committee meetings for the FMMP, which bring together 
MRC staff, representatives from the national Mekong committees, 
donors, and some observing NGOs.  Additionally, the MRC Secretariat 
hosts an annual Flood Forum, which brings together national Mekong 
committees, donors, NGOs, Red Cross societies, line ministry 
officials, and others for discussion on a number of flood-related 
topics.  The MRC is also co-sponsoring an October 17-19 conference 
in Bangkok on Flood Risk Reduction in the Mekong Basin. 
 
¶13.  (SBU) And yet, as evidenced by what we saw in northeastern 
Cambodia, all these MRC activities appear to have little effect on 
the ground.  One of the MRC's weaknesses is that it has no mandate 
to help countries and step into conflicts unless specifically called 
upon to do so by member countries.  It may be that the relevant 
Cambodian officials are not doing enough to raise these issues at 
the MRC, or that the MRC is simply not the right forum for such 
issues. 
 
Cambodia Has Hydropower Dreams of Its Own 
----------------------------------------- 
 
¶14.  (SBU) In addition to being affected by dams near its borders, 
Cambodia is developing its own plans for hydropower.  Tun Lean, 
Director General of the Department of Energy at the Ministry of 
Industry, Mines, and Energy (MIME), explained that because 
Cambodia's electricity prices are among the world's highest (30 to 
50 cents per kWh in rural areas), hydropower is an attractive, 
eco-friendly investment.  The Ministry estimates that the country 
could produce a total of 10,000 MW of electricity through 
hydropower.  One-third of this total would come from just one dam 
spanning the Mekong at Sambor.  This proposed dam across the main 
river channel would be the only such dam from the Chinese-Lao border 
to the Mekong delta. 
 
¶15.  (SBU) Environmentalists are alarmed by plans for hydropower in 
Cambodia.  While Tun Lean was quick to say that no projects had been 
approved yet, NGO contacts say they would be surprised if any 
proposed projects were not implemented eventually.  Brian Lund of 
Oxfam USA notes that the potential revenue from hydropower is 
enormous--perhaps even bigger than from oil--but that this aspect of 
the issue has received little public attention. 
 
¶16.  (U) Environmentalists are particularly worried by the prospect 
of a dam at Sambor, saying it would virtually guarantee the 
extinction of the endangered Mekong Irrawaddy dolphin, threaten 
scores of other species, reduce fish catches, and potentially affect 
the crucial reversal of the Tonle Sap River.  The heavy volume of 
water in the Mekong River from July to September causes the 
intersecting Tonle Sap River to reverse its flow for several months 
each year.  Cambodia depends on this unique phenomenon to replenish 
the fisheries of the Tonle Sap Lake, which supplies 90 percent of 
the protein in the diet of the Cambodian population.  If the water 
volume of the Mekong should one day become insufficient to cause the 
flow of the Tonle Sap to reverse direction, the result could have a 
catastrophic impact on Cambodia's food resources. 
 
¶17.  (SBU) NGO contacts also are worried that the Chinese are taking 
 
PHNOM PENH 00001189  004 OF 005 
 
 
control of hydropower development in Cambodia.  They note that as 
Chinese mining and hydropower interests have grown in Cambodia, the 
Chinese have gained extraordinary influence over MIME decisions. 
And they are not impressed with China's record on alleviating the 
environmental and social impacts of dam construction.  Just who the 
developers are and where the financing comes from is far from 
transparent.  MIME provided us a list of 13 proposed dams.  Out of 
the ten dams where the names and nationalities of the developers 
were included, six were Chinese, including the proposed dam at 
Sambor. 
 
Energy or Food Security:  A Development Dilemma 
--------------------------------------------- -------- 
 
¶18.  (U) Hydropower and its downstream effects pit two great Mekong 
basin development challenges against each other:  providing cheaper, 
low-polluting electricity; and protecting the environment, both for 
its own sake and because downstream populations rely on clean river 
water and healthy fisheries for their survival. 
 
¶19.  (U) The need for electricity is particularly stark in Cambodia, 
which has an incredibly low electrification rate:   15 percent, less 
than half the rate in neighboring Laos.  On a per capita basis, 
Cambodians consume half as much electricity as Laotians consume and 
only one-tenth of what the Vietnamese consume.  Cambodia's power 
generation is almost entirely based on the burning of polluting 
diesel and fuel oil, and rising oil prices mean that Cambodia's 
electric rates--already among the world's highest--continue to rise. 
 Would-be foreign investors are frequently put off by the country's 
electrical limitations.  Meanwhile, existing dams in Thailand, Laos 
and Vietnam provide electricity to industries and homes in those 
countries, while already-marginalized Cambodians deal with the dams' 
effects but fail to reap the electrification benefits. 
 
¶20.  (U) At the same time, the Mekong River is a critical resource 
for human and animal populations across the region.  The river 
contains 1,200 species of fish, making it the world's third most 
biologically diverse river, behind the Amazon and Congo.  The wild 
fish catch in the Lower Mekong Basin is the most productive in the 
world, reaching an estimated 2.6 million tons a year with a value of 
USD 2 billion per year.  However, because most of this fish is 
consumed by subsistence fishermen or sold in local village markets, 
Cambodian government officials pay little attention--they are more 
concQed with tourism, garments, and other visible parts of the 
formal economy. 
 
¶21.  (U) Comment:  Informed decisions by Cambodian government 
officials about hydropower development should take into account 
energy needs, environmental and social concerns, and food security. 
However, lack of knowledge, apathy, unclear responsibilities across 
ministries and levels of government, and the profitability 
hydropower projects promise--not only to the Cambodian treasury, but 
to individual pockets as well--all work against considered and 
informed decisions.  The construction of dams and the development of 
hydropower are necessary to meet Cambodia's electricity needs, but 
planning is not being done in a transparent manner and public and 
private stakeholders are not being consulted.  Furthermore, we are 
concerned that environmental aspects are not being considered, that 
impacts on fisheries resources are being ignored, and that release 
of water from poorly managed facilities without effective flood 
warning systems will cause more flooding, rather than alleviate it. 
 
 
¶22.  (U) Comment continued:  The USG should engage Cambodia and 
other governments in the region constructively on hydropower 
development to ensure that the dams that will inevitably be 
constructed will be constructed and managed properly.  Embassy Phnom 
Penh and State's Regional Environmental Office in Bangkok suggest 
that, as a first step, the OES Bureau take the lead in organizing 
inter-agency discussions in Washington on regional hydropower 
development in Southeast Asia to develop USG policy and determine 
how best to engage individual governments on the issue.  The 
discussions could include USAID and State's EEB and EAP Bureaus, as 
well as scientific experts from NOAA's Fisheries Service, Department 
of Interior's Bureau of Reclamation and U.S. Geological Survey, the 
Department of Energy's Hydropower Program, EPA, and the U.S. Army 
Corps of Engineers.  At the same time State's Regional Environmental 
Office in Bangkok will coordinate with Embassies Bangkok, Rangoon, 
Vientiane, and Hanoi to develop more information and reporting on 
 
PHNOM PENH 00001189  005 OF 005 
 
 
hydropower development in the region. 
 
MUSSOMELI