Questioning the “Model for Poverty Reductionand Sustainable Development”:
The Asian Development Bank and Japan’s
Involvement in Laos’ Nam Theun 2 Dam
April 2017
Mekong W atch

Questioning the “Model for Poverty Reduction and Sustainable Development”:
The Asian Development Bank and Japan’s Involvement in Laos’ Nam Theun 2 Dam

April 2017

Table of Contents1

Nam Theun 2 (NT2): ADB and Japan’s Support

1

1-1

Nam Theun 2 Hydroelectric Project

1

1-2

NT2 as a “Model for Poverty Reduction and Sustainable Development”? 

3

1-3

Has NT2 Benefitted Affected Communities?

5

1-4

Has NT2 Helped Reduce Poverty in Laos?

8

1-5

Has NT2 Contributed to Environmental Management in Laos?

11

1-6

NT2 Seen in the Context of the Limited Space for Civil Society in Laos   14

2

ADB Safeguard Policy Challenges: Railway Rehabilitation in Cambodia

3

ADB Safeguard Policy Challenges: Rise of the Asian Infrastructure Investment Bank                              

417

    20

Recommendations to the Japanese Government Regarding Impacts Caused by

NT2

23








1

1 Nam Theun 2 (NT2): ADB and Japan’s Support
1-1 Nam Theun 2 Hydroelectric Project1
The Nam Theun 2 Dam (NT2) is a 1,070 megawatt hydropower dam built on the Nam
Theun River, a tributary of the Mekong. The dam is located in Khammouane Province incentral Lao People's Democratic Republic (PDR). A 39 meter high wall forms a reservoir,and 260m3 of water per second is diverted from the reservoir through a power house to
the downstream Xe Bang Fai River, another tributary of the Mekong.

NT2 has submerged 450km2 of the biodiversity-rich Nakai Plateau, an area approximately
two thirds the size of Singapore. Diverted water has drastically changed the hydro-ecologyof the Nam Theun and Xe Bang Fai rivers, negatively impacting local communities’ riverbased livelihoods. About 6,300 indigenous people were relocated to make way for theNT2 reservoir. More than 120,000 villagers living downstream have also been affected.
For years, the NT2 project plan was criticized regionally and internationally by NGOs,
academics, and the public due to its anticipated negative environmental, social, and humanrights impacts. It became one of the most controversial dam projects in Southeast Asia.2
The World Bank and Asian Development Bank (ADB) approved financing for NT2 in 2005.
The dam started its operations in 2010.
The Nam Theun Power Company (NTPC) constructed and operates NT2.3 NTPC’s sharesare held by Electricité de France (40%), Lao Holding State Enterprise (25%), and
1 ADB. GMS NT2 Hydroelectric Project. https://www.adb.org/projects/37910-014/main; World Bank. NT2

Social and Environment Project. http://projects.worldbank.org/P049290/nam-theun-2-social-environmentproject?lang=en&tab=overview
2 International Rivers (IR). NT2 Dam. https://www.internationalrivers.org/campaigns/nam-theun-2-dam;
Mekong Watch. NT2 Hydropower Project. http://www.mekongwatch.org/english/country/laos/nt2.html; NT2
Dam (in Japanese). http://www.mekongwatch.org/report/laos/laos_nt2.html
3 NTPC. Homepage. http://www.namtheun2.com/

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Questioning the “Model for Poverty Reduction and Sustainable Development”

Thailand’s Electricity Generating Public Company (35%). The total project costs are
estimated to be $1.45 billion.4 More than 97% of generated electricity is exported toneighboring Thailand and the rest is consumed domestically. NT2 is a build-own-operatetransfer project with a concession period of 25 years, after which it will be transferred to
the Lao government.
NT2 and ADB
The World Bank took the lead to help the Lao government design and build NT2 for anumber of years. Its financial support included a partial risk guarantee of up to $50 million,
a $20 million grant, and a political risk guarantee up to $200 million. The Manila-based
ADB’s involvement is also significant. ADB provided NT2 with a $20 million concessionalloan alongside a private sector loan up to $50 million, and a political risk guarantee of up
to $50 million. ADB has also been promoting Greater Mekong Sub-region (GMS) powerinterconnection, for which NT2 is a key project. Moreover, ADB has invested much in Laos’hydropower sector through other dam and transmission line projects.5
ADB and Japan
Japan is ADB’s biggest shareholder and has 12.8% of voting power. While the US holds thesame amount in shares and voting power, Japan has contributed more ($16.1 billion since1966) than the US ($4.6 billion) to special funds.6 All ADB presidents have been Japanesenationals and 152 Japanese employees make up 13.8% of all international staff. This
includes twenty-nine senior staff, such as the directors general of the Budget, Personnel,
and Management Systems Department, East Asia Department, and Economic Research andRegional Cooperation Department. 7 Japan’s perceived and real influence at ADB isconsiderable.
Japan and NT2
At the ADB board meeting to consider financing NT2 held on April 4, 2005, the US
executive directors (EDs) abstained partly because of their concerns regarding risks
associated with environmental and social impacts and the macroeconomic environment in
Laos.8 The Japanese EDs, however, voted for NT2. Prior to that, the US had also abstainedon a vote on the NT2 at the March 31 World Bank board meeting, and Japan voted for it.
The US has the largest voting power at the World Bank, and Japan is second.9 It can thus besaid that Japan’s support at both the World Bank and ADB enabled the NT2 to move
forward.

4 $ means US dollars.
5 Lee, Tanya. Time to Re-assess GMS Energy Investments. September 2015.

https://www.internationalrivers.org/resources/9232
6 ADB. Member Fact Sheet: Japan. https://www.adb.org/sites/default/files/publication/27772/jpn-2015.pdf;

ADB. Member Fact Sheet: US. https://www.adb.org/sites/default/files/publication/27810/usa-2015.pdf
7 ADB. Organizational Chart. https://www.adb.org/sites/default/files/page/203876/adb-org-chart-

14mar2017.pdf
8 US Department of Treasury. Report on Multilateral Development Bank Projects that Support Extractive

Industries Conditionality. June 6, 2005. https://www.treasury.gov/press-center/pressreleases/Pages/js4356.aspx
9 World Bank. Voting Powers. http://www.worldbank.org/en/about/leadership/votingpowers

3

1-2 NT2 as a
Development”?

“Modelfor

Poverty

Reduction

andSustainable

The project proponents, the World Bank in particular, have aggressively promoted NT2 asa “model for poverty reduction and sustainable development.” For instance, Doing a Dam
Better, which was published soon after NT2’s operations started, says:10
The NT2 project…has a development objective of generating revenues, through theenvironmentally and socially sustainable development of NT2’s hydropower potential, thatwill be used to finance priority poverty reduction and environmental management
programs.
The 2013 ADB-World Bank joint assessment also reports:11
Monitoring data continue to indicate that villagers are better off following resettlement.
The achievements of the Nakai Resettlement Program so far have been impressive. As thefirst step towards possible closure of the RIP [Resettlement Implementation Period], NTPC
carried out a 7th round of the Living Standards Measurement Survey (LSMS 7) in early 2013.
The data indicate that over 97 percent of sampled resettler households are above thehousehold income target of the rural poverty line…, measured using per capita
consumption.
More recently, the World Bank’s country director wrote an opinion piece for the VientianeTimes in which he states:12
The achievements of NT2 demonstrate the potential of hydropower development to reducepoverty and achieve shared prosperity. We support the NT2 project as part of Lao PDR’s
strategy to develop its natural resources for the benefit of all its people.
The International Environmental and Social Panel of Experts (POE), which derives its
mandate from NT2’s Concession Agreement and provides independent review, however, isof quite a different view.13 Its 23rd report in December 2014 says:
No objective observer would contend that holding the NT2 forestry pillar upright is asustainable exercise at this moment. The situation of a sector which was to have produced

10 Page 4 in Porter, Ian, and Jayasankar Shivakumar. 2011. “Overview”. In Porter & Shivakumar (eds.) Doing a

Dam Better: The Lao PDR and the Story of NT2. Washington, DC: World Bank, pp. 1-32.
http://documents.worldbank.org/curated/en/200041468044952974/pdf/584400PUB0ID161Better097808
21369852.pdf
11 Page 16 in World Bank and ADB. NT2 Annual Update: Project Progress during 2013.
http://documents.worldbank.org/curated/en/692581468045060662/pdf/904880WP0P07640L02014glossy
0version.pdf
12 Ulrich Zachau. “Can We Make Hydropower Work for All in Laos?” Vientiane Times. May 14, 2015.
http://www.worldbank.org/en/news/opinion/2015/05/14/can-we-make-hydropower-work-for-all-in-laos
13 Thayer Scudder, a then POE member and a renowned expert on socio-environmental impacts of dams wasquoted in the New York Times as saying, “Nam Theun 2 confirmed my longstanding suspicion that the task ofbuilding a large dam is just too complex and too damaging to priceless natural resources”. See Leslie, Jacques.
“Large Dams Just Aren’t Worth the Cost.” New York Times. August 22, 2014.
https://www.nytimes.com/2014/08/24/opinion/sunday/large-dams-just-arent-worth-the-cost.html?_r=0

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Questioning the “Model for Poverty Reduction and Sustainable Development”

up to a third of the villagers’ income is parlous. Unless rapid and effective steps are taken toright the situation it will deteriorate further.14 (underline added)
Along with the collaborative work on drawing up an evolving List of Measures needed
before the Resettlement Implementation Period (RIP) can be brought to a close – an
exercise which was updated during this mission – the new thinking has helped produce animportant shift in opinion across the stakeholding group. For the unlikelihood of being able
to illustrate the sustainability of NT2 livelihoods in the immediate future has become
apparent over the past year or two to nearly all stakeholders.15 (underline added)
The POE later recommended a two-year extension of RIP until December 2017 on the
grounds that “only one of the five livelihood pillars [of the resettlement programs] can besaid to have attained sustainability and maintained it for a reasonable period of time.”16
In the most recent POE report, which is also the first report since the RIP extension wasapproved, the POE acknowledges some progress, but still points out a number ofchallenges at the resettlement sites, including the unsustainability of cassava cultivation,
the Village Forestry Association’s failure to generate income, and widespread illegal
fishing by unlicensed villagers. The report also says:17
There are serious constraints to be overcome if RIP closure is to be recommended by the
POE at the end of 2017. The first is the time constraint: at time of writing there were only
eighteen months left to December 2017. The POE was surprised by the apparent lack of asense of urgency in some quarters over the time factor. An accelerated program of action isdemanded on all sides. (underline added)
Implementation ratings of NT2 publicized on the World Bank website are also revealing.
As of July 11, 2016, progress towards achieving Project Development Objectives was rated
as “moderately satisfactory,” overall implementation progress was “moderately
unsatisfactory,” and overall risk was “high.”18
The World Bank appears to be trying to justify hydropower projects elsewhere byclaiming that the NT2 model is replicable.19 But upon examination of the quotes listed
above, all of which are available on the ADB and World Bank websites, it is clear that tocategorically say that NT2 is a model for poverty reduction and sustainable development
is an overstatement, and whether or not the project has contributed to alleviating poverty
and managing environment at various levels in Laos is quite debatable.
14 Page 12 in 23rd Report of the International Environmental and Social Panel of Experts (POE). December 29,

2014. http://documents.worldbank.org/curated/en/152281467991954642/pdf/96161-WP-P049290P076445-PUBLIC-Box391439B-POE-23-Report-Final.pdf
15 Page 4 in 23rd Report of POE.
16 Page 46 in 24th Report of POE. October 23, 2015.
http://documents.worldbank.org/curated/en/185921468188934867/pdf/100591-WP-PUBLIC-Box393236POE-Report-24-Final-1730-23-10.pdf
17 Page 2 in 25th Report of POE. September 2016.
http://documents.worldbank.org/curated/en/958821474905658189/pdf/108522-WP-PUBLIC-P076445P049290-POE-Report-25-Final-for-Publication.pdf
18 World Bank. NT2 Social and Environment Project: Ratings. http://projects.worldbank.org/P049290/namtheun-2-social-environment-project?lang=en&tab=ratings
19 Pages 3-4 in IR. World Bank and Dams Part 2: Dispelling Myths of NT2. September 2015.
https://www.internationalrivers.org/sites/default/files/attached-files/nt2_factsheet_2015_web.pdf

5

1-3 Has NT2 Benefitted Affected Communities?
A Field Investigation by Three Independent Researchers20
In January 2014, three independent researchers visited communities downstream on the
Xe Bang Fai River, where two of the researchers had previously conducted a study ofriver-based livelihoods before NT2’s construction. They met many of the samecommunities they had interviewed 13 years earlier.
A number of villagers reported to the researchers that they had been left worse off by theNT2 project. They had suffered dramatic declines in wild fish catches, excessive flooding ofrice fields during the rainy season, loss of riverbank gardens, and other damages comingfrom hydrological changes on the Xe Bang Fai River.
Compensation programs have been inadequate or inappropriate. They have not made up
for the livelihood losses suffered by the communities. Women in indigenous andeconomically poor communities have been disproportionately affected because they lackresources to transition to other livelihoods. Villagers were afraid of openly criticizing NT2.
Almost none of the people that the three researchers interviewed were aware of effective
grievance mechanisms.
A Field Visit by Mekong Watch21
In January 2017, Mekong Watch visited six relocated villages on the Nakai Plateau and twovillages along the Xe Bang Fai River. Below are our findings regarding the livelihoods ofaffected communities in the areas we visited.
•

•

•

•

On the plateau, Chinese company-contracted cassava cultivation was expanding,but some farmers were in debt because the sales price had not enabled them toregain their investments.
Although irrigation facilities were being repaired, facility maintenance andadditional land allocation were not reaching all the villagers in need. One woman
said, “[t]he land we got as compensation is far from the water tank, and the water
doesn’t reach us because the pipe is broken.”
Many villagers were arrested in 2014 and 2015 for illegal swidden farming. The
fines have become a large financial burden for them. While it is necessary to
regulate land use to protect forests, it must be acknowledged that the livelihood
options given to resettled villagers are not functioning well, and this is what leads
them to resort to illegal land use.
Over the past two years, there has been no distribution of dividends fromanticipated Village Forestry Association profits.

•
20 Based on Shoemaker, Bruce, Ian Baird, and Kanokwan Manorom. “NT2: World Bank’s Narrative of Success

Falls Apart.” International Rivers Review. December 2014.
https://www.internationalrivers.org/resources/8479; Kanokwan Manorom, Ian Baird, and Bruce Shoemaker.
2017. “World Bank, Hydropower-based Poverty Alleviation and Indigenous Peoples: On-the-Ground Realities
in the Xe Bang Fai River Basin of Laos.” Forum for Development Studies pp. 1-26.
21 Based on Mekong Watch. Laos NT2 Hydropower Project Field Report (5-7 January 2017). February 2017.
http://www.mekongwatch.org/PDF/NT2FieldReportJan2017.pdf

Questioning the “Model for Poverty Reduction and Sustainable Development”

6Foreign species caught in the reservoir         Children fishing in the reservoir    

•

•

•

•
•

•

•

•

•

 

Fish caught by villagers in the NT2 reservoir were mostly stocked fish, such astilapia. Fish native to the Nam Theun River have declined. Although reservoir
fishing is an important source of income at the moment, it is not likely to besustainable in light of experiences with dam projects elsewhere.
Fishing by unlicensed outsiders was increasing. Monitoring all people fishing in alarge-scale reservoir for licenses is unrealistic, and strict regulation andmanagement is very difficult.
After fishing boats capsized in the past, lifejacket distribution and other measures
have been taken, but in 2012, three boats capsized and four people died, including
a minor. They were reportedly not wearing life vests at the time of the accident.
Not all villagers in need have had access to job training.
Land was being used without legal procedures, creating confusion among villagers.
For instance, some households used their own resources to develop rice paddies
along a road, but others claimed that the land was supposed to have been held inreserve for future population growth.
There appeared to be growing economic disparity among resettled villagers. One
household had many farm animals prior to relocation and thus received a large
amount in compensation. They used their compensation to buy a pickup truck andstarted working as retailers. In contrast, poor households were having difficulty
achieving sustainable livelihoods after losing access to land for rice paddies andswidden farming.
Prior to resettlement, women contributed labor and skills in agriculture, raising
livestock, collecting forest products, and other activities that supported the family
livelihood. Since relocation, many households now depend on fishing in thereservoir, logging, construction, and other daily wage work carried out mostly bymen. This negatively impacts the status of women at resettlement sites.
Along the Xe Bang Fai River,22 our observations confirmed the findings of the three
independent researchers in 2014. Downstream fishing had been given acatastrophic blow. A woman in her sixties testified, “I used to fish on the Xe Bang
Fai and earn cash income from selling the fish and padek [fermented fish paste], but
now I can only catch fish on the tributary streams for household consumption.”
Difficulties with the Village Restoration Fund had continued. During one of ourprevious visits in 2011, we encountered some villagers who had fallen into debt
using the Village Restoration Fund. They had borrowed money from the fund with

22 A compensation program for the 150 downstream communities was already terminated and handed over tothe Lao government in 2013.

7

insufficient information and poor lending planning. Their investments in smallscale businesses failed due to lack of experience. During this trip in 2017, we did
not meet any seriously indebted villagers, as selection criteria for who could utilize
the fund had become very strict. Some households had used the fund tosuccessfully increase their livestock. At the same time, about one third of the 56
households we spoke to said that they were in need but had no access to the fund.
Also, a few years ago, more than 30 villagers were detained at the district office forabout two weeks and made to undergo a “training” because they had not been able
to pay back their debt. To avoid punishment, many villagers sold their rice paddies
and livestock, or solicited money from other family members and relatives to pay
back the debt.23

Illegally logged rosewood, March 2011.

23 One issue we encountered during an earlier field visit that we were unable to cover in January 2017 wasriver bank erosion in Xaiburi District, Savanaket Province. At least five families had had no choice but torelocate at their own expense when the riverbank eroded by ten meters. The villagers attributed the problem
to changes in the flow of water due to NT2. See World Bank & ADB Response dated December 16, 2016 to
Mekong Watch’s Inquiries dated August 5 & 23, 2016.
http://www.mekongwatch.org/PDF/NT2response16Dec2016.pdf

8

Questioning the “Model for Poverty Reduction and Sustainable Development”

1-4 Has NT2 Helped Reduce Poverty in Laos?

NT2’s principal benefit for Laos is the $1.95 billion in revenue that the project is expected
to generate over the 25-year concession period from 2009 to 2034. Doing a Dam Better
quoted earlier states, “The NT2 project…has a development objective of generating
revenues…that will be used to finance priority poverty reduction and environmental
management programs.”24
Given persistent corruption and governance challenges in Laos,25 the World Bank and ADB
helped the Lao government create a Revenue and Expenditure Management Program to
track NT2 revenues and ensure expenditures on relevant development programs. As key
monitoring tools, annual revenue management reports, public expenditure tracking
surveys (every 2 years), public expenditure reviews (every 2 years), and audit peer
reviews (every 3 years) were to be submitted to the financing partners at annual
consultations after the commissioning of NT2.26
24 Page 4 in Porter and Shivakumar. 2011.
25 When Transparency International first included Lao PDR in its Corruption Perceptions Index in 2005, thecountry ranked in the top half of the 159 surveyed countries. It then fell to the 27th lowest ranking in 2015. See
International Federation for Human Rights (FIDH). International Indexes Show Lack of Progress on Democracy
and Human Rights. August 2016.
26 Page 12 in Fozzard, Adrian. Technical Brief: Revenue and Expenditure Management, NT2 Hydroelectric
Project. March 16, 2005.
http://documents.worldbank.org/curated/en/272761468299206275/pdf/665910WP0P07640f0revenue0m
anagement.pdf

9

At a consultation on NT2 between NGOs and the Japanese Ministry of Finance held inTokyo in 2005 soon after the ADB and World Bank’s approval to finance the project, thethen Counselor of the Finance Ministry’s International Bureau also said:27
In order to make this project successful, such elements as…ensuring transparency inmanaging the public financing and establishing managing capabilities are indispensable,
and when we inquired [with World Bank management] if they could be sure to install suchelements, their response to our inquiry was that they could ensure it.”
Almost ten years later, an ADB-World Bank joint mission in 2013 reported that NT2 “isgenerating the expected revenues for the GoL [Government of Laos], and there is apossibility to further enhance the return on investment through an expansion of generating
capacity.”28 The same joint mission report, however, also says:29
Although the World Bank has received reports on the allocation and expenditure of NT2
revenues by sector and by some projects including for activities such as teacher training,provision of school text books, rural health services, and electrification of rural villages, theIFIs [international financial institutions] have yet to receive a formal report on the use ofrevenues and an audit thereof. These reporting delays are not compliant with the relevant
provisions of the Financing Agreements between the GoL and the IFIs. (underline added)
The World Bank’s Country Partnership Strategy Progress Report in 2014 also mentions theNT2 revenue management, pointing out:30
For the revenue management, tax and dividend components (in addition to royalty) of therevenues still need to be allocated to the priority programs and the timeliness of reporting
and audits needs to be improved.
Recent exchanges between Mekong Watch and the Japanese Ministry of Finance also
indicate that the reporting delay has yet to be resolved. We received a response to ourinquiry from the World Bank through the Ministry of Finance on August 26, 2016. The
response states:31
NT2 revenue received at the [Lao PDR] Ministry of Finance are also audited and tracked;
audits for FY2009/10-FY2012/13 have been received by the World Bank and audits for
FY2013/14 and 2014/15 are pending. (underline added)
A Japanese Finance Ministry official later added explanation to the pending FY2013/142014/15 auditing, saying:32

27 Minutes of NGO-MOF Consultation on NT2. April 12, 2005
28 Page 38 in World Bank and ADB. NT2 Annual Update: Project Progress during 2013.
29 Page 34 in World Bank and ADB. NT2 Annual Update: Project Progress during 2013.
30 World Bank. Country Partnership Strategy Progress Report for Lao PDR for the Period FY12-FY16. September

16, 2014.
http://documents.worldbank.org/curated/en/644931468088478994/pdf/902810CASP0P14060Box385331
B00OUO090.pdf
31 World Bank response. August 26, 2016.
32 NGO-MOF Consultation. February 24, 2017.

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Questioning the “Model for Poverty Reduction and Sustainable Development”

Although the audit report for FY2013/14-2014/15 was received during the latter half of2016, we understand even prior to that World Bank had carried out the monitoring by
obtaining the information through exchanges with the Lao government and based on thefinancial management system.”More importantly, however, the public still has no way to know if and to what extent NT2’srevenues have been used to reduce poverty and improve the education, health, andenvironment sectors in Laos. The ADB and World Bank’s response dated December 16,
201633 to our August 2016 inquiry34 says, “obligations for public disclosure of NT2-related
revenue management, expenditure and audit reports have not yet been met.”
The same Finance Ministry official admitted this, saying, 35 “[c]urrently, there is no
information [to review the NT2 revenue management] for the general public to access,which is a problem in terms of transparency. The World Bank is aware of the issue.
The NT2 model for poverty reduction and environmental management may face anotherchallenge as private sector investment increases in the Lao hydropower sector. A case inpoint is the Don Sahong Hydropower Dam currently being built on the Mekong River’s
mainstream. The project implementer, Malaysia’s Mega First Corporation Berhad, hasestablished Don Sahong Power Company in Laos through a holding company registered in
the British Virgin Islands, a tax haven. This may make it difficult for the Lao government togenerate as much revenue as they could from the project.

33 World Bank and ADB Response to Mekong Watch dated December 16, 2016.

http://www.mekongwatch.org/PDF/NT2response16Dec2016.pdf
34 Mekong Watch Letter to the World Bank and ADB dated August 23, 2016.

http://www.mekongwatch.org/PDF/NT2letter23Aug2016.pdf

35 NGO-Ministry of Finance Consultation. February 24, 2017.

11

1-5 Has NT2 Contributed to Environmental Management in Laos?

NT2 is supposed to benefit people in Laos beyond the project site in the areas ofenvironmental protection and natural resource management. Doing a Dam Better states:36
1) It [the NT2 project] provides an opportunity to develop policies and tools that will
strengthen the government’s capacity to manage the country’s natural resources in asustainable manner, promote biodiversity, and protect ethnic minorities;
2) With its large geographic footprint and multiple impacts, it constitutes a test case forproject-specific environmental and social protection policies that have the potential to bebroadly replicated throughout the country; and3) If successfully implemented in concert with the international community, it will
demonstrate the government’s commitment to sustainable development and its
willingness to engage with the local population in designing and implementing a
program of shared benefits at the national, regional, and local levels.
It is true that both the World Bank and ADB have used NT2 as an opportunity to help theLao government improve policies and procedures to better protect the country’s
environment and people. For instance, through ADB’s loan Environment and Social
Program,37 the Lao government was able to issue National Public Involvement Guidelines38
36 Pages 7-8 in Porter and Shivakumar. 2011.
37 ADB. Report and Recommendation of the President on the Environment and Social Program. November 2001.

https://www.adb.org/sites/default/files/project-document/71375/rrp-34543.pdf

38 Science, Technology, and Environment Agency and ADB. National Public Involvement Guidelines: Summary.

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Questioning the “Model for Poverty Reduction and Sustainable Development”

in 2003 and Prime Minister’s Decree 192 on Resettlement and Compensation for
Development Project in 2005. These rules could be used to improve Laos’ environmental
and social protection standards. Far from being implemented, however, some of them
have since been overridden or nullified.
National Public Involvement Guidelines
The National Public Involvement Guidelines define principles and procedures on
information disclosure and public participation, directing government officials in
facilitating Lao people’s participation in decision-making processes on development,
including large-scale projects in agriculture, mining, and hydropower, as well as rural
infrastructure and biodiversity conservation. The guidelines, however, are very poorly
implemented. For instance, Section 5.9.2 states that draft environmental impact
assessment (EIA) and social impact assessment (SIA) reports are to be disclosed in PublicInformation Centers at national, provincial, and district levels and that project-related
consultations are open to the general public and NGOs. Very few projects, however, have
set up information centers. Draft EIAs and SIAs are rarely disclosed, especially prior todecision-making. In some cases, final EIA and SIA reports are not disclosed at all.
In August 2007, Mekong Watch asked Laos’ Water Resources and Environment Agency
and the project implementer to disclose the EIA/SIA report for the Xekatam Hydropower
project in southern Laos. Our request was initially turned down. Later in July 2008, asummary EIA/SIA was sent to us. Some information in the disclosed document was
blackened out, however, including names of affected villages and the number of relocatedhouseholds. In May 2014, a public consultation on the ADB-funded Nam Ngiep 1
Hydropower project was held in Vientiane. It was announced that the meeting was limited
to “agencies with registered offices in Lao PDR.” The consultation was not open to as widea range of stakeholders as the guidelines suggest.

NT2 power house

2003.

13

Prime Minister’s Decree 192
Prime Minister’s Decree 192 on Resettlement and Compensation for Development
Projects was issued in July 2005 and was followed by Rules 2432 on Implementation ofPrime Minister’s Decree 192 in November the same year. As stressed by ADB,39 the tworules were positive outcomes of ADB’s Environment and Social Program. Prime Minister’s
Decree 192, for instance, stated that families who are negatively affected by adevelopment project should be compensated in such a way that their living standards aremaintained or improved compared to the pre-project stage, and that the project
implementer should respect local culture, religion, and beliefs when designing, building,and operating the project. Most importantly, Clause 6, Paragraph 6 of the decree stipulated
that “affected people [with customary land use rights] living in rural and remote areas canbe compensated even in cases they do not have a legal land use title.”
In April 2016, however, the Lao government issued the new Prime Minister’s Decree 84 on
Resettlement and Compensation for Development Projects, which nullified Decree 192.
Decree 84 does refer to customary land rights in Clause 8, Paragraph 3. It states, however,that affected people with customary land use rights should be compensated “when [suchrights are] proven by provincial authorities and other related offices.” The new decree thus
has made it very difficult, if not impossible, for people with customary land use rights to becompensated when affected by development projects.40

39 Page 32 in ADB. Completion Report: Lao PDR Environment and Social Program. June 2007.

https://www.adb.org/projects/documents/environment-and-social-program

40 Mekong Watch. Comparison between PM Decree No. 192 and Decree No.84. 2016.

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Questioning the “Model for Poverty Reduction and Sustainable Development”

1-6 NT2 Seen in the Context of the Limited Space for Civil Society in Laos
A World Bank independent consultant wrote a report synthesizing the results of the 2004
local consultations conducted with NT2-affected villagers. The consultant reports:41
Thus in general, although some residual issues remain, the 2004 consultation processscores high on all three principles of transparency, balance and meaningfulness and in theview of the independent monitor can be considered as having met these goals.
While it is true that the affected villagers were probably able to express concerns related
to resettlement and compensation, they had no say in deciding if NT2 was needed or not.
More recently, when asked by ADB to find out if broad community support was obtained
for another hydropower project in Laos, a social specialist of the project’s independent
advisory panel reported back, saying:42
Yes, for two reasons…Lao people support GoL’s policies. This is a national
principle/philosophy. The people of the Lao PDR are socialized to sacrifice, accept andlisten to their government. This can be seen during discussions with them regarding the
NNP1 [Nam Ngiep 1 hydropower] project. PAP always say that the project is a good one
and they agree with the GoL…
In order to assess how genuine public consultation and people’s participation might be, itis necessary to face the realities of Lao civil society rather than simply talk about“philosophy” or “socialization.” In short, the lack of independent media and strict limits on
civil society in Laos have allowed NT2 to proceed without public scrutiny or open debatesin the country. This has worked in the ADB and World Bank’s favor and made it difficult
for critics to challenge the narrative that NT2 offers a model for poverty reduction andsustainable development in Laos.43
To begin with, rural communities in Laos have lived for a very long time with selfsustaining and locally-governed economic and social systems and regulations. They have
not yet acquired a strong understanding of and meaningful access to more centralized
laws and mechanisms, which are aggressively imposed by the Lao government.44
Non-Profit Associations (NPAs) are the only type of civil society organizations which areallowed to operate in Laos. NPAs are seen by the Lao government as instruments to put its
own agenda into practice. NPA registration and operations are controlled by the Ministryof Home Affairs and other line ministries. Many groups choose to operate as social
enterprises to avoid the registration and operational restrictions. The government
discourages collaboration between international NGOs and NPAs. They forbidinternational NGOs to fund NPAs. All funding coming to NPAs must pass through the
Ministry of Home Affairs. International NGOs themselves face controls from the

41 Page 15 in Chamberlain, James. Proposed Nam Theun 2 Hydroelectric Project: Assessing the Quality of Local

Consultations.
42 Page 39 in Zola, Anthony. 4th Independent Advisory Panel Report on Nam Ngiep 1 Hydropower Project. January

19, 2015. https://www.adb.org/sites/default/files/project-document/156438/41924-014-esmr-05.pdf
43 Shoemaker, Baird, and Kanokwan Manorom. 2014.

44 This and the following paragraphs are based on Sombath Initiative. Civil Society in the Lao PDR. August 2016.

15

government through complicated approval processes for MoUs, projects, and international
staff.
It is very difficult for civil society organizations to receive official permission from the Laogovernment to do any activities involving critical analysis of or reporting on development
project site conditions. Very few organizations, therefore, try to engage in critical advocacy.
With very limited space for advocacy, donors also tend to focus on supporting capacitybuilding activities. Human rights groups are generally unable to operate in Laos, making itvery difficult to find out about and monitor cases of human rights violations, especiallyfrom the outside.
Freedom of the press and independent judiciary are non-existent or strictly controlled.
Although many laws may state that fundamental human rights are protected, such as theright to freedom of expression, it is extremely difficult to exercise them. People in Laos
rarely express critical opinions, especially related to issues of the government’s agenda,
and if they do, authorities immediately crack down. Since 1997, Freedom House has rated
Laos as “Not Free” with respect to civil liberties and political rights, as well as press
freedom. In 2016, Freedom House gave Laos its lowest ranking of seven out of seven forpolitical rights, and six out of seven for civil liberties. In its Press Freedom Index,
Reporters Without Borders has consistently ranked Laos among the bottom fifteen
countries surveyed since the creation of the index in 2002. In Laos’ second-cycle Universal
Periodic Review at the United Nations Human Rights Council (UNHRC) in 2015, elevencountries made specific remarks regarding civil society and freedom of expression andassembly. The Lao government denied many of the remarks, claiming that these rights are
already guaranteed in the Lao constitution.45
Enforced Disappearance of Sombath Somphone46
Sombath Somphone, a prominent leader
in Lao civil society and Magsaysay Awardwinner, disappeared shortly after hehelped the Lao government and
NPAs/NGOs organize the Asia-Europe
People’s Forum in Vientiane in October
2012. As co-chair of the nationalorganizing committee, Sombath played a
key role in coordinating the meeting.
CCTV footage taken by cameras near apolice checkpoint in Vientiane on
December 15, 2012 appears to show
Sombath (right) with Archbishop Desmond Mpilo Tutu,
Sombath’s abduction. He has not been
1984 Nobel Prize Laureate
seen since, and Lao authorities have notprovided information on his fate or whereabouts. Authorities have supposedly taken
measures to investigate the case, but released very little information on the progress of
the investigation. Recently in June 2015, during UNHRC’s Universal Periodic Review on

45 Based on FIDH. Freedom of Expression Severely Repressed. August 2016.
46 The Sombath Initiative. Homepage. http://www.sombath.org/en/

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Questioning the “Model for Poverty Reduction and Sustainable Development”

Laos, government representatives responded to the recommendations made by several
states on Sombath’s case, saying:47
The Lao Government confirms that the concerned authorities of the Lao PDR are stillthoroughly conducting the investigation and will continue to do so in order to find out thetruth and bring perpetrators to justice in accordance with the law of the Lao PDR.
An impact of Sombath’s disappearance has been that members of NPAs and internationalNGOs working in Laos have become even more afraid to express their views lest theyshould meet retaliation.48
Restrictions on On-line Communications
In recent years, the Lao government has extended its restrictions to on-line
communications. Under Decree 327on Information Management on the Internet,49 enactedin October 2014, web users face criminal action for “disseminating or circulating untrue
information for negative purposes against the Lao People’s Revolutionary Party and the Laogovernment, undermining peace, independence, sovereignty, unity and prosperity of thecountry, as well as content that is deemed to divide the solidarity among ethnic groups.”50
In March 2016, authorities arrested three Lao migrant workers who had returned fromThailand to renew their passports. They had posted messages on Facebook that criticized
the Lao government on issues related to corruption, deforestation, and human rights.
Authorities held them incommunicado for several days. They are currently being detainedin a prison in Vientiane.51

47 Page 8 in UNHRC 29th Session Agenda Item 6 UPR Report of the Working Group on the Universal Periodic

Review: Lao PDR Addendum. 23 June 2015.
https://www.ecoi.net/file_upload/1930_1452171666_g1513175.pdf
48 Based on International Commission of Jurists (ICJ). Enforced Disappearance in Lao PDR. August 2016.
49 Lao PDR. Decree: Information Management on the Internet. September 16, 2014.
50 Based on FIDH. Freedom of Expression Severely Repressed.
51 Radio Free Asia (RFA). Lao Police Publicly Confirm Arrest of Trio of Workers for Criticizing State. May 27,
2016 http://www.rfa.org/english/news/laos/lao-police-publicly-confirm-arrest-of-trio-of-workers-forcriticizing-state-05272016154319.html; RFA. Three Lao Workers Held in Vientiane Are Denied Family Visits.
July 21, 2016 http://www.rfa.org/english/news/laos/denied-07212016153733.html

172 ADB Safeguard Policy Challenges: Railway Rehabilitationin Cambodia
Like all IFIs, ADB enjoys legal immunity.52 Some project-affected people and NGOs haveattempted to challenge the privilege, while others have made use of ADB’s own policies
and procedures as much as possible to prevent and mitigate environmental, social, andhuman rights impacts of ADB-funded projects. Such policies include the Safeguard Policy
Statement, Public Communication Policy, and Accountability Mechanism. ADB policies
have some useful language and ADB has tried to strengthen them, especially in face of
criticism from affected communities and NGOs. Implementation, however, has always
been one of the ADB’s weaknesses, as seen in the NT2 case and as acknowledged by ADB’s
own analysis.53
Greater Mekong Sub-region Rehabilitation of the Railway of Cambodia Project
Cambodia’s Railway Rehabilitation Project is another case in which affected communities
and NGOs have long demanded policy compliance from ADB, specifically in regard to
ADB’s Involuntary Resettlement Policy. The case was taken to ADB’s Compliance Review
Panel, which acknowledged ADB’s policy violation and proposed remedial actions.

A community living along the railway before resettlement, November 2010

The project began in 2006 aiming to restore Cambodia’s railway system, which had fallen
into disrepair since the Khmer Rouge era. The ADB Board approved an $84 million
concessional loan to finance the project. More than 4,000 families lived and ran small-scalebusinesses along the railway lines from Phnom Penh to northern and southern provinces.
Many of them had to be relocated.54

52 ADB. Agreement Establishing ADB. 1965. https://www.adb.org/sites/default/files/institutional-

document/32120/charter.pdf
53 ADB. Real-Time Evaluation of ADB’s Safeguard Implementation Experience Based on Selected Case Studies.

November 2016. https://www.adb.org/sites/default/files/evaluation-document/177678/files/safeguardsevaluation.pdf
54 ADB. GMS Rehabilitation of the Railway in Cambodia. https://www.adb.org/projects/37269013/main#project-overview

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Questioning the “Model for Poverty Reduction and Sustainable Development”

Compensation provided to the affected families was inadequate. Some resettlement sites
were too far from their original residences, making it impossible for the families tomaintain their jobs. Infrastructure at the resettlement sites was insufficient. The income
restoration program set up to help relocated households was delayed and activities wereso poorly designed that the program was unable to create new sources of income. As aresult, many families fell into debt just to meet their basic needs.55
After failed negotiations with the ADB management, two NGOs filed a complaint using
ADB’s Accountability Mechanism in 2012 on behalf of representatives of the affected
people.56 After a year and a half investigation, the Compliance Review Panel released areport in 2014, 57 stating that the relocated families had suffered losses of property,
livelihood, and income and “as a result have borne a disproportionate cost and burden of
the development efforts funded by ADB." The report stressed that "these problems were theresult of failure to implement ADB operational policies and procedures" and attributed mostactions and in-actions to ADB. In 2014, ADB's board of directors approved the Compliance
Review Panel’s findings and adopted the following recommendations:
Establish a compensation deficit payment scheme;
Improve facilities at resettlement sites;
Improve the functioning of the grievance redress mechanism;
Develop an appropriate program to build capacity for resettlement among relevant
Cambodian government officials;
5) Establish a debt workout scheme to help highly indebted families repay theiraccumulated debts through a dedicated credit line and a debt workout facility; and
6) Implement the expanded income restoration program in a sustained and sustainable
manner.
1)
2)
3)
4)

The Compliance Review Panel’s second and most recent monitoring report dated June
2016, however, found that only recommendation #4 had been fully implemented. The
others were complied with only partially. With regard to recommendations #5 and #6,
which were most crucial to restoring the livelihoods of displaced families, the Compliance
Review Panel found that “the remedial actions fall far short of the Board-approved
recommendations”. The Panel also writes:58
Urgent and concerted action is required on the part of ADB to ramp up efforts to close thesegaps and ensure that remedial actions meet Board requirements and expectations. If that is
not done in a timely fashion, the Project is unlikely to be brought into full compliance with
ADB’s operational policies and procedures as envisaged in the Board’s decision.
55 Equitable Cambodia. The Railway Case. http://equitablecambodia.org/website/article/2-1992.html; MW.

GMS Cambodia Railway Rehabilitation Project (in Japanese).
http://www.mekongwatch.org/report/cambodia/GMSRailway.html
56 Inclusive Development International. Request for Compliance Review on GMS Rehabilitation of the Railway of
Cambodia Project. August 2012.
http://equitablecambodia.org/website/data/dw/attachment/CAM%20Railways%20Complaint%20to%20CR
P%2028%20Aug%202012.pdf
57 Compliance Review Panel (CRP). Final Report on Compliance Review Panel Request No. 2012/2. January 2014.
http://compliance.adb.org/dir0035p.nsf/attachments/Cambodia-FinalReport13Jan2014_OSEC%20Submission.pdf/$FILE/Cambodia-FinalReport-13Jan2014_OSEC%20Submission.pdf
58 CRP. 2nd Annual Monitoring Report. June 20, 2016.
https://lnadbg4.adb.org/dir0035p.nsf/attachments/CAM-2ndMonitoringReportFor%20Web.pdf/$FILE/CAM-2ndMonitoringReport-For%20Web.pdf

19

Today, seven years since the affected families first contacted ADB about the resettlement
and compensation issues in 2010, the project still has a long way to go before it will be incompliance with ADB’s operational policies and procedures.

Representatives of affected communities negotiating with ADB management
at the ADB Cambodia Office, June 2011

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Questioning the “Model for Poverty Reduction and Sustainable Development”

3 ADB Safeguard Policy Challenges: Rise of the AsianInfrastructure Investment Bank
According to the Asian Infrastructure Investment Bank’s (AIIB) website,59 “AIIB is a new
multilateral financial institution founded to bring countries together to address the daunting
infrastructure needs across Asia.”
Critics point out that economically, China needs AIIB-funded projects to utilize thecountry’s excessive production capacities.60 Politically speaking, AIIB came into existenceamid China’s attempts to expand its role in the financial architecture in Asia and globally,
and also reflects its dissatisfaction with the Bretton Woods hegemony, of which ADB is a
part.
NGOs monitoring impacts of large-scale infrastructure development are very concerned
about an additional massive influx of funds from AIIB rushing into countries whereenvironmental, social, and human rights protection standards and development
governance are weak. As seen in Laos’ NT2 dam and Cambodia’s railway rehabilitation
cases, safeguard policies and grievance mechanisms adopted by the Bretton Woods
institutions such as the World Bank and ADB are not without limitations. Although its
basic structure is similar to that of the World Bank and ADB with an Environmental andSocial Framework in place,61 AIIB has started its operations without finalizing other key
policies, including information disclosure and grievance procedures. The Environmental
and Social Framework is overall still weaker than the ADB’s Safeguard Policy Statement.
Examination of its Energy Strategy currently in consultation indicates that AIIB seems
very interested to finance coal-fired power plants.62
Some Basics about AIIB
AIIB started its operations in December 2015 with fifty-seven signatory members. As of
March 2017, the Bank has seventy members, of which thirteen are prospective.63 The AIIB
headquarters is in Beijing. The President is Liqun Jin, a Chinese national. AIIB’s motto is“lean, clean, and green.” AIIB has $100 billion in subscribed capital and hires relatively few
employees (about 100 as of October 2016) compared to other IFIs. Unlike ADB, AIIB does
not have a resident board of directors.
China holds 26% of voting shares at AIIB, where there is a three-quarters majority voteneeded to make key decisions such as approving major projects. The US did not join AIIB
59 AIIB. Who We Are. https://www.aiib.org/en/about-aiib/index.html
60 Pages 14-16 in Rio-Ligthart, Luz Julieta. Desk Review on the Proposed Business Model of the AsianInfrastructure Investment Bank (AIIB).
https://issuu.com/ngoforumonadb/docs/desk_review_on_the_proposed_busines
61 AIIB. Environmental and Social Framework (ESF). https://www.aiib.org/en/policies-strategies/operationalpolicies/environmental-social-framework.html; NGO Forum on ADB. A Comprehensive Critique on the Draft
Environmental and Social Framework (ESF) of the AIIB.
http://nebula.wsimg.com/56f68b006fea6c7483137f08a9c11c08?AccessKeyId=BBECBE2DB5DCCE90DECA&
disposition=0&alloworigin=1
62 Pages 7-8 in Hassan, Rayyan. NGO Forum on ADB Critique of AIIB’s “Energy Strategy Sustainable Energy for
Asia Issue Note for Discussion”. https://issuu.com/forumonadb/docs/aiib_energy_strategy_critique
63 AIIB. AIIB Welcomes New Prospective Members. March 23, 2017.
https://www.aiib2017.org:46225/ims/bbs/board.php?bo_table=news&wr_id=2

21

on the grounds that its environment and labor protection standards would be lower thanthose of the ADB and World Bank. Japan chose not to join AIIB for similar reasons.
In its first year of operation in 2016, AIIB approved loans of over $1.7 billion for nineprojects in seven countries, including Myanmar and Indonesia. AIIB has identified“sustainable infrastructure,” “cross-border connectivity,” and “private capital
mobilization” as its three strategic areas of focus.64 AIIB’s annual meeting this year will beheld in Jeju Island, Republic of Korea on June 16-18, 2017.
Advocacy NGOs are also concerned about “a race to the bottom,” in which the World Bank,
ADB and other IFIs may weaken their safeguard standards to become “more competitive”
with AIIB. One test case might be monitoring if ADB can insist on strict compliance with its
safeguards in administering the projects they co-finance with AIIB. As of April 2017, thefollowing three projects are co-financed by the two banks:65
1) National Motorway M-4, Pakistan (ADB: $100 million, AIIB: $100 million);66
2) Myingyan 225MW Combined Cycle Gas Turbine Power Plant, Myanmar (ADB: $42.2
million, AIIB: $20 million, World Bank/International Financial Corporation (IFC): $58
million);67 and
3) Natural Gas Infrastructure and Efficiency Improvement, Bangladesh (ADB: $167
million, AIIB: $60 million).68
Of the three projects, ADB’s Safeguard Policy Statement is applicable to the projects inPakistan and Bangladesh, and IFC’s Performance Standards are applicable to the project inMyanmar. AIIB’s project descriptions read as though the co-financers agree upon the leadco-financer, and it is the lead co-financer’s standards that are used.69 To ensure respect for
the environment, affected communities and human rights, however, the safeguard policiesof the co-financer with the highest standards should be used.
In ADB President Takehiko Nakao’s closing statement at the ADB’s 48th annual meeting in
Baku, Azerbaijan in 2015, Nakao said:70
We will maximize co-financing opportunities not only with our traditional partners but
also with new partners. We will collaborate and co-finance with the Asian Infrastructure
64 AIIB. About AIIB. https://www.aiib2017.org:46225/eng/sub/aiib/about.php
65 Two more ADB-AIIB co-financed projects are in the pipeline: Batumi Bypass Road, Georgia; andTransmission System Strengthening, India. See AIIB. Approved Projects.
https://www.aiib.org/en/projects/approved/index.html
66 AIIB. National Motorway M-4. June 6, 2016.
https://www.aiib.org/en/projects/approved/2016/_download/pakistan-nationalmotorway/document/approved_project_document_pakistan_national_motorway.pdf
67 AIIB. Myingyan 225 MW Combined Cycle Gas Turbine Power Plant. 2016.
https://www.aiib.org/en/projects/approved/2016/_download/myingyan/approved_project_summary_myin
gyan_gas_turbine.pdf
68 AIIB. Natural Gas Infrastructure and Efficiency Improvement. March 27, 2017.
https://www.aiib.org/en/projects/approved/2017/_download/bangladesh/document/bangladesh-naturalgas-infrastructure_document.pdf
69 Page 5 in AIIB. National Motorway M-4; Pages 7-8 in AIIB. Natural Gas Infrastructure and Efficiency
Improvement.
70 Nakao, Takehiko. Closing Statement at the 48th ADB Annual Meeting of the Board of Governors. May 5, 2015.
https://www.adb.org/news/speeches/closing-statement-adb-president-takehiko-nakao-48th-adb-annualmeeting-board-governors

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Questioning the “Model for Poverty Reduction and Sustainable Development”

Investment Bank, based on our shared understanding of the importance of safeguard
standards. (underline added)
ADB must not compromise its safeguard policies and procedures under any circumstances,including projects it co-finances with AIIB.71

71 Page 2 in NGO Forum on ADB. A Comprehensive Critique on the Draft ESF of the AIIB.

23

4 Recommendations to the Japanese Government Regarding
Impacts Caused by NT2
We would like to make the following recommendations to the Japanese
government/Ministry of Finance regarding the environmental, social, and human rights
impacts brought about by the NT2 project.
With regard to the specific impacts caused by NT2 both upstream and downstream, werecommend to the Japanese government that they urge ADB and the World Bank to ensurethat NTPC fully implements the following mitigation measures:
1) On the Nakai Plateau:a) Continue the Resettlement Implementation Period (RIP) until there is a clear path
to restoring relocated villagers’ sustainable livelihood;b) Immediately disclose an action plan leading to RIP closure, and make a clear plan
leading to livelihood restoration that fulfills the IFIs’ resettlement policies and theConcession Agreement;c) Implement continuous monitoring of cassava cultivation as a cash crop, andthoroughly inform resettled families of the risks involved in cassava cultivation;d) Disclose relevant data in order to objectively evaluate the effectiveness of thelivelihood restoration programs. Such data includes concrete information on how
much compensation land has been successfully irrigated, how much land aroundthe reservoir has been distributed to resettled families, and what percentage of theland is being used for farming;e) Continuously monitor fish species and catch in the reservoir and disclose results ofmonitoring. Based on this information, measures to increase sustainability ofreservoir fishing should be developed and implemented;f) Investigate the current state of accidents during reservoir fishing, and provide
villagers engaged in fishing with thorough instructions on safety measures; andg) Monitor impoverished households at resettlement villages in order to implement
necessary measures to restore their lives and livelihoods.
2) Along the Xe Bang Fai River:a) Evaluate the effectiveness of the terminated compensation programs and disclosethe evaluation results. Based on these results, take immediate and appropriate
measures to restore the lives and livelihoods of the affected villagers; andb) Continue monitoring NT2’s downstream environmental and social impacts.
3) Both in Nakai Plateau and along the Xe Bang Fai River:a) Conduct gender sensitive impact assessments of changes in livelihood after
resettlement.
In regard to poverty reduction, environmental management, and development governancesupported through the NT2 project, we recommend that the Japanese government urge
ADB and the World Bank to:24

Questioning the “Model for Poverty Reduction and Sustainable Development”

1) Review outcomes of their support to improve environmental and social protection
standards in Laos and ensure that the government comply with the highest standards
that are available; and
2) Explain clearly and show the general public how they have monitored and evaluatedto what extent NT2-generated revenues have been used for poverty reduction andenvironmental management in Laos. If it is truly beyond their authority to publicize
audit reports, they should at least disclose the information upon which they based
their evaluation of NT2’s contribution to Laos’ poverty reduction and environmental
management.

Questioning the “Model for Poverty Reduction and Sustainable Development”:
The Asian Development Bank and Japan’s Involvement in Laos’ Nam Theun 2 Dam
Publication Date: April 28, 2017
Written by Toshiyuki Doi
Edited by Madoka Onizuka
Published by Mekong Watch
Aoki Bldg 3F, 1-12-11 Tito, Taito-ku, Tokyo 110-0016 JAPAN
Phone: +81-3-3832-5034 Fax: +81-3-3832-5039
Email: info@mekongwatch.org
Website: http://www.mekongwatch.org/english/* English translation of Japanese original. In the case of any discrepancy between thetwo, the Japanese original is prioritized.
* Production of this information kit was supported by the Ohdake Foundation. Our
project monitoring activities were supported by Oxfam Australia and the McKnight
Foundation. The views expressed in this document are those of Mekong Watch and do
not represent the opinions of the funders.