Peter Bosshard: China’s Overseas Dam Builders: from Rogue Players to Responsible Actors?

In Japan Focus, Peter Bosshard, Policy Director of International Rivers, writes about a new willingness among those in China who build and finance dam projects overseas to abide by international environmental standards:

Chinese dam projects have triggered strong protests among affected communities, environmental organizations and trade unions in countries such as Sudan, Botswana, Zambia and Burma. With a certain time lag, the government’s growing concern for the environment has also left its mark on China’s overseas investment policy. In 2006, the State Council called on Chinese investors to “protect the legitimate rights and interests of local employees, pay attention to environmental resource protection, care and support of the local community and people’s livelihood cause”, and to “preserve our good image and a good corporate reputation”. The Ministries of Environmental Protection and Commerce are currently preparing a guideline which will urge Chinese investors to apply China’s domestic environmental laws in overseas projects if host country standards are too weak.

International Rivers has witnessed the growing concern for the environment in our own work with Chinese dam builders and financiers. After we first warned about the role of China Exim Bank in funding rogue dam projects in 2004, a bank manager wrote back saying: “To my knowledge, [the Bank] actually cares about the environmental issues of its projects. Maybe its standard cannot reach yours or international common practice. Since it is one of export credit agencies in the world it really needs to meet the international practice.”

Two years later I had the chance to meet the President of China Exim Bank. He insisted that countries needed to reach a certain level of prosperity to care about the environment, but agreed that his institution shared an environmental responsibility for the projects it funds. The Bank adopted an environmental policy in 2004, and made it public after a request from NGOs in 2007. More detailed guidelines followed in 2008.

…Policy changes at the leading Chinese dam builder and financier are important first steps. Yet as we know from other institutions, including the World Bank and Western banks, there is often a big gap between an environmental policy and actual practice on the ground. The proof of the pudding is in the eating. What is happening there?

For more on this topic, listen to a podcast interview with Peter Bosshard on CDT.

Also related, Global Post has an article about local opposition to the domestic Nu River dam, which is planned but has been put on hold:

While environmentalists remain staunchly opposed to damming the Nu, the controversy is not black and white. China is hungry for energy and 80 percent of the country’s electrical supply is currently provided by dirty coal-fired plants. Hydropower, which accounts for just 15 percent of China’s electricity, is seen as a cleaner — albeit controversial — alternative.

The dams could also bring much needed jobs to the impoverished Nu region. The local government has estimated that 20 percent of residents in the region lack electricity, something the dams could remedy.

…Further upstream, near the town of Bingzhongluo, one villager, a Tibetan trekking guide, is less certain about the benefits of damming the Nu. The villager, who requested anonymity out of fear of reprisals, is in the fifth year of what he hopes will be a 20-year video documentary project chronicling the impact of the dams.

“People are more and more aware of the changes that would come from the dam, and they know they’re not good,” he said. “I worry about how we’re going to keep these villages alive.”

Indeed, local culture will be jeopardized should the project go ahead, says Wang Yongchen, a journalist and co-founder of the Beijing-based NGO Green Earth Volunteers, a group that was actively involved in the initial fight to save the Nu. Many villagers will have to be relocated from their traditional homes to cities up- and downstream. In one area near Liuku, a traditional Lisu bathing site will be washed away.

Read more about dams and the Nu River via CDT.