VZCZCXYZ0002
RR RUEHWEB

DE RUEHBK #3117/01 3451002
ZNR UUUUU ZZH
R 111002Z DEC 09
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC 9241
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHKT/AMEMBASSY KATHMANDU 7541
RUEHSV/AMEMBASSY SUVA 0519
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHC/DEPT OF INTERIOR WASHINGTON DC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RHHMUNA/CDR USPACOM HONOLULU HI
RHMFIUU/HQ EPA WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS BANGKOK 003117 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR OES, EAP 
USAID FOR LJOHNSTON, 
INTERIOR FOR USGS/NAT WETLANDS CENTER/JPOWELL 
 
E.O. 12958: N/A 
TAGS: PREL ECON ENRG EAGR TBIO EAID PGOV TH
SUBJECT: LOWER MEKONG NATIONS ENGAGE CHINA, TACKLE HYDROPOWER 
 
REF: A) Beijing 2941 (B) Bangkok 2682 (D) Vientiane 0540 
 
¶1.  (U) Summary: The Mekong River Commission (MRC) continues to 
mature as engagement with China expands. Member states Thailand, 
Cambodia, Laos and Vietnam met at the MRC's 16th Council that 
included a meeting with the MRC Donor Consultative Group in Thailand 
November 26-28.  Donors announced $66 million in funding while the 
MRC made a long-awaited decision to split permanently the MRC 
secretariat between Vientiane and Phnom Penh.  After years of 
avoiding the contentious transboundary effects of hydropower 
development, the MRC's new regional hydropower assessment is now 
progressing with China's participation. Still uncertain is whether 
the MRC should recommend against building a particular dam, and if 
member states would heed such a recommendation. MRC members continue 
to show great interest in the Secretary's Lower Mekong Initiative 
and the prospect of U.S. scientific collaboration. Recommendation: A 
MRC summit planned for April 2010 in Thailand could be an 
opportunity for the EAP or OES Assistant Secretary to engage with 
Lower Mekong leaders as they tout transboundary water coordination. 
 END SUMMARY and RECOMMENDATION. 
 
¶2. (U) In 1995 Cambodia, Laos, Thailand and Vietnam signed the 
Mekong Agreement, establishing the Mekong River Commission (MRC) and 
agreeing to joint management of their shared water resources for 
sustainable development. 
The MRC held its 16th meeting of the MRC Council, which included a 
session with the MRC Donor Consultative Group, on November 26-28 in 
Hua Hin, Thailand.  Member states were represented at the 
ministerial level.  Of the two MRC "dialogue partners," Burma sent 
an observer but China did not.  Donor or consultant participants 
included Australia, Belgium, Denmark, Finland, France, Germany, 
Japan, Netherland, Sweden and the U.S., as well as ASEAN, Asian 
Development Bank, ESCAP, European Commission, International Union 
for the Conservation of Nature, World Bank, and Worldwide Fund for 
Nature. 
 
INCREASED ACTIVITY WITH DIALOG PARTNERS CHINA AND BURMA 
------------------ 
¶3. (U) As a "dialog partner," China has about half the Mekong River 
in length but contributes around 16% of the flow downstream (with 
rain contributing the rest). China had played a minimal role in the 
transboundary water issues that the MRC was created to address, but 
the new MRC Secretariat leadership has helped to change this.  MRC 
representatives visited the Yangtze River Resources Commission flood 
control offices and the Ecosystem Study Commission for International 
Rivers (ESCIR); China pledged an ESCIR focal point to support the 
MRC's hydropower assessment.  China sent representatives to the MRC 
Flood Forum in May and the October stakeholder forum (Ref B).  China 
now provides real-time hydrological data to the MRC during the rainy 
(flood) season, has recently agreed to provide historical data, and 
is now discussing an agreement to provide real-time data during the 
dry season as well.   China is cooperating, with scientific data, 
for the MRC's strategic environmental assessment of Mekong 
hydropower dams, which will include the impact of Chinese dams.  The 
MRC and China agreed to jointly organize seminars on navigation, 
following a first seminar in Jinghong in October 2008.  Although 
China did not attend this MRC meeting, it indicated that it would 
attend the MRC's July meeting.  Burma did participate and is 
reportedly close to allowing the MRC to upgrade and operate a 
Burmese hydrological station to aid in regional flood forecasting. 
Burma also participated in the MRC flood forum in May. 
 
REGIONAL COOPERATION: ASEAN, ADB AND DONOR FUNDING 
--------------------- 
¶4. (SBU) The MRC Secretariat announced that the ASEAN secretariat 
had approved a memorandum of understanding (MOU) to be signed in the 
coming weeks.  The MRC participated as an organization in the August 
ASEAN summit, and it plans to align its strategic planning with 
ASEAN's integration agenda.   The Asian Development Bank has 
finalized a joint statement of cooperation that will be issued soon. 
 MRC announcements of regional achievements included the signing of 
a letter of intent for cooperation with the Mississippi River 
Commission, but MRC secretariat officials told regional hub officer 
that progress towards a MOU with the Mississippi River Commission 
has been slow. The MRC announced donor multi-year funding to total 
$66 million.  While Australia and Denmark have expressed confidence 
in the MRC's new monitoring, reporting and evaluation procedures 
(many learned from working with USAID) by announcing direct funding 
of MRC programs, most donors such as Japan noted that assistance 
would continue to be managed by donor programming at the project 
level. (Note: In a meeting with Huboff prior to the MRC meeting, the 
Japanese embassy action officer for lower Mekong engagement noted 
that Japan's long list of assistance programs recently delivered at 
its Mekong summit (Ref D) was largely notional and that the MRC 
meeting was a venue for Japan to see which of the many types of 
assistance resonated with the lower Mekong countries.  In the MRC 
meeting, the same Japanese representative announced only $300,000 in 
firm funding to support the MRC.  END NOTE.) 
 
HYDROPOWER STRATEGIC ENVIRONMENTAL ASSESSMENT 
-------------------- 
¶5. (U) After virtually ignoring hydropower since the Mekong 
Agreement was signed in 1995, the MRC is now facing regional 
hydropower development head on with a Strategic Environmental 
Assessment (SEA) for the hydropower sector that will include the 
impact of China's eight existing or planned mainstream dams.  With 
60 million people dependent on the Mekong for food security and 
livelihood, MRC CEO Jeremy Bird noted that hydropower effects on the 
river posed the greatest strategic challenge to the Mekong Agreement 
since it was signed.  (NOTE: There is around 3235MW currently 
generated on Mekong tributaries; dams totaling about 3209MW are in 
construction.  On the Mekong mainstream, 11 dams are proposed by 
Cambodia, Laos and Thailand. END NOTE.)  The SEA will include 
climate change, fisheries, energy and social systems.  The twin 
goals are to integrate energy into the MRC's river basin development 
plan and to assess the impact of hydropower on the MRC members' 
sustainable development objectives.  Completion is scheduled for 
July.   MRC secretariat officials noted that USGS scientific support 
through its DRAGON program would hopefully contribute in a 
significant way to the data foundation of the assessment.  In 2010, 
USAID RDMA will cooperate with MRC, WWF and ADB to supplement the 
ongoing SEA work by preparing a basin-wide sustainability assessment 
protocol specifically for use by the MRC (and possibly other river 
basins in Asia) to assess hydropower projects in a holistic, 
basin-wide context that takes into account cumulative impacts. 
USAID will also launch a new cooperative initiative with the ADB 
Greater Mekong Subregion (GMS) program to develop new SEAs targeting 
hydropower and other sectors by sharing practical experience between 
Mekong countries through "twinning" partnerships.  Despite the new 
analysis the MRC should have at its disposal come July, it is not 
clear whether the MRC will seek to stop any dam construction, or 
whether any countries would heed MRC instructions in that regard. 
 
MRC SECRETARIAT SPLIT BETWEEN VIENTIANE AND PHNOM PENH 
--------------------- 
¶6.  (SBU) The MRC Secretariat was relocated from Phnom Penh to 
Vientiane in June 2004, though the Regional Flood Management and 
Mitigation Centre remained in Phnom Penn.   Following several years 
of debate, the MRC Council agreed to split the Secretariat between 
Phnom Penh and Vientiane, where the chief executive and half of the 
program offices will remain. Concerns that Thailand would block the 
move to Phnom Penh, due to its current tension with Cambodia, did 
not materialize.  The four countries also debated whether to 
alternate the Secretariat between the two cities; the donor 
community was fairly unanimous in the view that the Secretariat 
should stay in Vientane, as any move would be costly, considering 
donor funding makes up a large percentage of the MRC's budget. 
Still, almost all donor representatives expressed to Emboffs 
satisfaction, on balance, that the permanent location had finally 
been decided; recruitment for Secretariat positions had been 
difficult since potential employees did not know how long the office 
would remain in Vientiane.  Moving half the Secretariat to Cambodia 
was also seen as having a capacity-building effect for Cambodia. 
Note: In the closed-door development partner meeting representatives 
generally agreed that they were not entirely satisfied with the 
outcome of the decision to split the MRC Secretariat.  Development 
partners (DPs) would have preferred a single location.  After much 
discussion it was decided that donor partners would make a 
supportive comment in the MRC plenary session.  The group understood 
that the Council's decision was s a difficult matter that required 
compromise.  DPs expressed that they stand ready to work with the 
MRC to make co-hosting effective to ensure a focus on the 
substantive issues within the MRC's mandate.  End Note. 
MRC FUTURE: Budget, Summit and Hydropower consultations 
------------------- 
¶7. (SBU) Member and donor representatives alike spoke of the need 
for members to fund more of the MRC Secretariat budget. Member 
contributions, which vary by member, were about $1.5 million in 2008 
and have been slowly, if steadily increasing since 2000. Donor 
contributions put the technical assistance budget at around $30 
million.  The Secretariat floated other avenues for member funding, 
such as the carbon development mechanism or some sort of levies on 
development projects such as hydropower dams.  The Council agreed to 
a heads of state summit for April 5, 2010, as part of the 15th 
anniversary of the Mekong Agreement. The MRC reported that China had 
signaled that it would likely send a high level delegate to the 
summit. Thai Environment Minister Suwit, as 2009-10 chair of the MRC 
Council, told ESTHoff that since the summit would be in Thailand, he 
was sure that Prime Minister Abhisit would participate and that 
donor/collaborating countries such as the U.S. would be invited. 
 
COMMENT 
------- 
¶8. (SBU) This meeting showed that the members take the MRC 
seriously; the Mekong River Commission is maturing but still faces a 
test of relevancy. Under the 1995 Mekong Agreement, members 
committed to prior notification, followed by a consultation process 
for any member's actions that affected other members' use of the 
river, such as for hydropower projects.  So far there have been no 
formal notifications despite MOUs signed in member countries for 
mainstream Mekong Dams.  One test of the Mekong Agreement and MRC 
will be if the notification procedures are followed, but the true 
test would be if Laos altered plans for any planned mainstream dam 
on the basis of MRC consultation.  In the past, when there were 
transboundary issues of any consequence, the (usually) two countries 
involved would negotiate bilaterally rather than use the legal 
mechanisms of the Joint Committee or Council the Secretariat would 
not get involved beyond providing information so as to maintain its 
independence. One of the main criticisms by donors is MRC timidity 
to address the difficult transboundary issues such as hydropower, 
and the lack of member attention paid to the Secretariat on the 
issues that were addressed. 
 
¶9. Large-scale donors like Australia and Denmark are showing 
confidence in MRC by funding programs directly, and with keen 
interest in U.S. expertise and experience, perhaps the USG should 
look for more ways to support the MRC. Japan and China have pledged 
billions in assistance to the lower Mekong countries but not to the 
MRC specifically. Donors were unanimous that the MRC has made 
progress in monitoring and evaluation tools (derived in part from 
observing USAID practices). Much donor criticism in the past has 
stemmed from inadequate program controls. An independent review of 
MRC practices in 2007 made 33 recommendations; donors at this 
meeting noted with satisfaction that 27 of those recommendations had 
been implemented. The low member contributions compared to the MRC 
overall budget remains a cause for concern; true ownership by the 
members will require higher contributions. 
 
¶10.  Seconding USG scientists to assist the MRC in its hydropower 
assessment or other initiatives, or organizing study tours to the 
U.S. would be welcome. France and Germany have each sent a technical 
advisor to work at the MRC Secretariat.  As the MRC CEO Jeremy Bird 
said, hydropower represents the MRC's most important strategic 
challenge since the Mekong Agreement was signed in 1995. (NOTE: 
although not an activity with the MRC, USGS will hold a DRAGON 
Forecast Mekong workshop in Can Tho, Vietnam from December 9 to 11, 
which will involve MRC member representatives.  END NOTE) Some USG 
facilitation of the Mississippi and Mekong Commissions partnership 
appears to be needed. 
 
¶11. (U) This is a joint cable from Embassies Bangkok and Vientiane. 
 
JOHN