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Date:  Mon, 15 Jul 2002 18:02:14 +0900
From:  Mekong Watch Japan <info@mekongwatch.org>
Subject:  Mekong Watch CATFISH TALES Issue #4 (15 July 2002)
To:  catfish@mekongwatch.org
Message-Id:  <200207150902.g6F92DNL019175@smtp14.dti.ne.jp>
X-Mail-Count: 00004

Mekong Watch CATFISH TALES

15 July 2002  Issue #4

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CONTENTS


1.  PROJECT UPDATE:  STUDY FOR THAI-LAOS WATER DIVERSION PROJECT STOPPED
	A study for extensive regional development (Thailand & Laos) which 
included a controversial cross-border water diversion plan was 
stopped.  Sanyu Consultants Inc approached JBIC to fund a this 
study.  Thanks to swift intervention by peoples' organizations at this 
early stage, JBIC decided not to support it.

2.  PROJECT UPDATE:  STUDY FOR TA TRACH RESERVOIR PROJECT (VIETNAM)
	The Vietnamese government made an official request to JBIC to fund the Ta 
Trach Reservoir project in 1999.  JBIC found the feasibility studies 
insufficient, and is providing funding for consultants to do supplementary 
studies.  The supplementary study is to look at environmental and social 
factors as well as alternatives to the dam plan.  It is also to determine 
if the project will satisfy JBIC's new environmental guidelines.

3.  PROJECT UPDATE:  MAP TA PHUT POWER PLANT (THAILAND) -- MITSUBISHI TO 
ASK FOR LOAN FROM JBIC
	Mitsubishi Heavy Industries and Mitsubishi Corporation have signed a 100 
billion yen contract with BLDP (Thailand) for a coal-fired power plant in 
Rayong, Thailand.  The companies plant to ask JBIC for a loan for this 
project.  This news comes not long after Thailand cancelled similar 
coal-fired power plant projects in Bor Nok and Hin Krut.
	
4.  JAPANESE ODA POLICY NEWS:  JBIC CONSULTATION ON COMPLIANCE MECHANISM
	Second public consultation on compliance mechanism for JBIC's 
environmental guidelines.  Corporate sector attends in full force, 
insisting such a mechanism is unnecessary.

5.  JAPANESE ODA POLICY NEWS:  JICA & JBIC TO MEET REGULARLY WITH NGOs AS 
PART OF ODA REFORM
	As part of a 15-point ODA reform plan announced by the Ministry of Foreign 
Affairs, regular meetings are to begin soon between NGOs and Japanese 
embassies and local offices of JBIC and JICA in developing countries.


6.  NEW MEKONG WATCH E-MAIL/WEBSITE

7.  TO SUBSCRIBE AND UNSUBSCRIBE

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1.  Project Update:  STUDY FOR THAI-LAOS WATER DIVERSION PROJECT STOPPED

Good news!

A study for an extensive regional development scheme which included a 
destructive cross-border water diversion plan was stopped.  Thai 
communities effectively communicated their concerns about the study to JBIC 
after they received information from Mekong Watch that the study was being 
considered. We are happy to announce that people-to-people cooperation has 
led to this positive outcome!

BACKGROUND AND DESCRIPTION OF STUDY

Sanyu Consultants approached JBIC (Japan Bank for International 
Cooperation) for funds to carry out this study.  Part of the study involved 
a feasibility study for building 2 dams on the Xe Bang Hiang River, and the 
two resulting reservoirs would supply the water to be diverted.  The water 
would be sent through a tunnel drilled under the Mekong River to irrigate 
Tung Kula Rong Hai (northeast Thailand).  While the proposed study for the 
regional development plan was recently designed, the water diversion plan 
that appears within the study was actually designed in 1998 and has been 
the target of constant concern by local communities.

JBIC has begun a new program which allows companies, NGOs, municipal 
governments and other organizations to apply for grants to conduct what 
JBIC calls "Pilot Studies" for development projects.  Until recently, 
funding for development projects was given only at the request of recipient 
governments.  In September of last year, JBIC announced that it would 
accept proposals from private firms, NGOs, prefectural and municipal 
governments, and other institutions for pilot studies for development 
projects.

In response to this announcement, Sanyu Consultants submitted its proposal 
which included the water diversion plan.

EFFORTS BY PEOPLE'S ORGANIZATIONS

After learning about this proposal, 17 grassroots and environmental 
organizations in Thailand sent a petition to JBIC demanding that this study 
be stopped. JBIC made a trip to Thailand at the end of May and held 
meetings with local communities facilitated by the Southeast Asia Rivers 
Network (SEARIN-Thailand).  At these meetings, local people impressed upon 
JBIC their reasons for opposing the water diversion plan.  In June, JBIC 
contacted Sanyu Consultants and the irrigation departments of both Thailand 
and Laos that it would not support the study.

REASON JBIC DECIDED NOT TO SUPPORT STUDY

A JBIC official explained to Mekong Watch that although the proposal was 
for a broader study and not specifically for this water diversion project, 
JBIC realized that already existing concerns regarding the water diversion 
plan was enough to create "confusion" among local communities if the study 
were implemented.  This is the reason given for JBIC's decision not to 
support the study.

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2.  Project Update:  STUDY FOR TA TRACH RESERVOIR PROJECT (VIETNAM)

JBIC is providing funding for a study for the Ta Trach Reservoir Project in 
Vietnam.  In 1999, the Vietnamese Government made a formal request to the 
Government of Japan for a loan to implement the Ta Trach Reservoir 
Project.  The loan has not yet been approved partly because the 
environmental impact assessment was insufficient.  JBIC agreed, however, to 
providing a grant for consultants to conduct an additional study to 
supplement information from the previous studies.

DESCRIPTION OF THE TA TRACH RESERVOIR PROJECT

The Ta Trach Reservoir Project includes a dam of 50-56 meters 
high.  Purposes listed for the dam are flood control, irrigation, power 
generation, and domestic and industrial water supply.  It is located in the 
Huong River Basin, Thua Thein Hue Province, Vietnam.  The Implementing 
organization is Vietnam's Ministry of Agriculture and Regional Development 
(MARD). The region's frequent floods are the main reason given to explain 
the need for this project.

According to a study by the Vietnamese government in 2000, approximately 
4,000 people will need to be resettled.  The project site is located on a 
fault line, so there is concern of an earthquake hazard.  Other concerns 
include submergence of cultivated land, disruption of fish migration, 
discontinuance of waterway transport, increase in water-born diseases, 
impacts on endangered plant and animal species, and impacts on the Bach Ma 
National Park.

JBIC's INVOLVEMENT IN THE PROJECT -- SAPROF STUDY

In order to supplement the environmental impact assessment done by the 
Vietnamese government for the Ta Trach Reservoir Project, JBIC is providing 
a grant to a team under its SAPROF program (Special Assistance for Project 
Formation) to conduct a study.  The SAPROF team will look into more details 
regarding the geology of the dam site, impacts on natural and social 
environments, and alternatives to the dam project.

While funding for the study does not guarantee that the dam will be built, 
such studies are usually done assuming that the project will eventually be 
implemented.  It is necessary to monitor the study to ensure that it is not 
simply to provide information validating the implementation of the Ta Trach 
reservoir project, but that it includes public participation in determining 
the region's needs and multiple options to meet those needs.

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3.  Project Update:  MAP TA PHUT POWER PLANT (THAILAND) -- MITSUBISHI TO 
ASK FOR LOAN FROM JBIC

According to an article in Nikkei Shinbun (27 June 2002), Mitsubishi Heavy 
Industries and Mitsubishi Corporation signed a joint contract with BLCP 
Power Ltd worth 100 billion yen (approx 820 million US dollars) for the Map 
Ta Phut coal-fire power plant in Thailand.  The article also reported that 
the two companies determined the project to be low risk, and will request a 
loan from the Japan Bank for International Cooperation (JBIC).

According to information from Mitsubishi Heavy Industry's website, the 
contract is expected to come into effect in July 2003 after necessary 
financial arrangements have been made.

DESCRIPTION OF PROJECT

The Map Ta Phut project is located in Rayong, Thailand.  It will be a 1,400 
MW "non-polluting coal-fired power plant" using low sulfur bituminous coal 
from Australia.  It will have two generators.  The first 700 MW generator 
is expected to begin operation in 2006, and the second in 2007.  The total 
project is to require 1.3 billion dollars.

It is being implemented by BLCP Ltd, a joint venture among Thai-based Banpu 
and Hong Kong-based China Light Power.  The originally contract between 
BLCP and Mitsubishi Heavy Industries was agreed upon in 1998, and operation 
had been scheduled to begin in 2002.  But due to the economic crisis and 
decline in the demand for electricity, the project had been stopped.

CONCERNS

The Map Ta Phut industrial estate is reportedly already suffering from 
severe air pollution, and residents are concerned about the effects of an 
additional polluting power plant.  According to an article in the Bangkok 
Post (7 April 2002), while resistance to the project among residents has 
not been strong, it is increasing.  The article reports that a school was 
to be relocated because students were falling ill from the pollution in the 
industrial estate.  The Director-General of the Pollution Control 
Department was also quoted as saying that while pollution levels had not 
exceeded acceptable standards, other problems such as chemical accidents 
and industrial waste needed to be considered before deciding if the area 
can handle another industrial facility like a coal-fired power plant.

Details of Mitsubishi Heavy Industry's request to JBIC in regard to this 
project is not yet clear.  JBIC should exercise due caution regarding the 
request, especially considering the concerns being raised by residents of 
Map Ta Phut and the recent Thai government decision on the Bor Nok and Hin 
Krut power plants. Residents of Bor Nok and Hin Krut were able to organize 
and oppose the construction of the power plants, making their concerns 
known to the Thai government, the companies involved, as well as to 
JBIC.  After consideration of people's concerns, the Thai government 
decided to postpone, if not cancel, the projects. JBIC should learn from 
the Bor Nok/Hin Krut experience and fully incorporate the concerns of local 
people in their decision on a loan for the Map Ta Phut project.

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4.  Japanese ODA Policy News:  JBIC CONSULTATION ON COMPLIANCE MECHANISM

JBIC held its second public consultation for a compliance mechanism for its 
new environmental guidelines on 28 June 2002 (for information on the first 
consultation, see Catfish Tales Issue #2).  JBIC decided that the first 3 
meetings would be "study sessions," after which consultation on the actual 
content and structure of the compliance mechanism would be discussed.

The first such study session was about compliance mechanisms of 
international financial institutions such as the World Bank and Asian 
Development Bank.  NGOs have expressed dissatisfaction with the study 
sessions, since the time for the study sessions is being taken out of the 
time available for negotiation about the compliance mechanism itself.

As at the first consultation, the corporate sector's participation was very 
negative.  Representatives of corporate organizations such as the Japan 
Consulting Institute and the Japan Business Federation remarked that 
bilateral financial institutions in other countries do not have compliance 
mechanisms and therefore questioned the need for JBIC to have one.  Some 
called for a discussion on whether or not a compliance mechanism is 
actually necessary and demanded concrete examples of cases where JBIC's 
current handling of problems was insufficient.

The remarks from the corporate sector show that they are unwilling to 
recognize the many concrete examples such as the Samut Prakarn Wastewater 
Management Plant(Thailand), San Roque Dam (Philippines), and Sondu-Miriu 
(Kenya) projects.  They also do not seem to realize that by being so 
resistant to a compliance mechanism, they are only emphasizing the need for 
such a mechanism.  If they were confident that their current business 
practices were not in violation of the guidelines, they would not have to 
resist so strongly.

The next public consultation (and the second study session) will be held on 
July 23rd, this time to discuss the compliance mechanisms and complaints 
procedures of ECAs.  Someone from the corporate sector will also give a 
presentation on how companies have dealt with conflicts arising during 
project operation.

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5.  Japanese ODA Policy News:  JAPANESE EMBASSIES, JICA & JBIC TO MEET 
REGULARLY WITH NGOs AS PART OF ODA REFORM

On 9 July 2002, Foreign Minister Kawaguchi announced a 15 point reform plan 
for Japanese ODA.  These points for reform were a result of two reports, 
the final report of the Second Consultative Committee on ODA Reform and the 
Interim report for an external committee to recommend reform to the Foreign 
Ministry.

Relevant to NGOs working in developing countries is point 9.  This point 
says, "In the developing countries where many Japanese NGOs are carrying 
out activities, regular meetings will soon be established among Japanese 
embassies, local offices of JICA and JBIC, and NGOs."

As the wording is somewhat ambiguous, it is not clear if these meetings are 
to be with only Japanese NGOs or with a broader range of groups.  It could, 
however, be a potential forum for local NGOs to raise concerns about ODA 
projects to the Japanese government and project implementing agencies.

Overall, the 15-Point Reform addresses issues of inspection and evaluation 
of ODA operations, cooperation with NGOs, capacity building, and 
disclosure/dissemination of information.  While reform is welcome, it is 
unfortunate that the reform does not call for a fundamental re-evaluation 
of the use of ODA as a tool for diplomacy, or the process of project 
implementation which has largely thus far excluded local communities from 
decision-making processes.  We hope that the upcoming inspections and 
evaluations of ODA operations will enlighten the Ministry on these points.

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6.  NEW MEKONG WATCH E-MAIL/WEBSITE

Mekong Watch has acquired its own domain name.  Now, staff in Tokyo can be 
reached at <info@mekongwatch.org>.

Our new website address is http://www.mekongwatch.org/

The English website is still being developed.  While there are a few basic 
pages available, the site will be completely renewed in the next few months 
in order to provide more detailed information in English.  Please check 
again in September!

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7.  To Subscribe and Unsubscribe

We have finally automated our mailing list for Catfish Tales!

To subscribe to or to unsubscribe from CATFISH TALES, please visit the 
following site:

www.mekongwatch.org/english/catfish

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Mekong Watch Japan
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Tel: +81 3 3832 5034
Fax:  +81 3 3832 5039
E-mail:  info@mekongwatch.org
Website:  http://www.mekongwatch.org