WASHINGTON - Yesterday, the Austrian Ministry of Economic Affairs published an assessment report on the follow-up process of the OECD complaint against Andritz Hydro. EarthRights International (ERI) and its allies call jointly on Austrian turbine manufacturer Andritz Hydro to fully implement its environmental and human rights obligations in the Mekong region.

The Austrian company is the holder of a $300 million contract to supply turbines to power the Xayaburi Dam in Laos. Andritz Hydro plays a critical role in the project as a supplier of key technology, without which the gigantic power plant, the first in the mainstream of the lower Mekong, could not be operated.

In April 2014, ERI, Finance & Trade Watch (FT Watch), Thai communities along the Mekong River and an international coalition of civil society groups from Thailand, Cambodia, and Vietnam brought a complaint against Andritz Hydro, under the OECD Guidelines for Multinational Enterprises. The complaint alleged that the Xayaburi dam risks driving many already-impoverished families into poverty and malnutrition. There was also evidence of severe problems concerning the resettlement of local villages in Laos due to the dam construction. This complaint initiated a mediation process, facilitated by the OECD National Contact Point (NCP) for Austria, in which communities at the resettlement area and along the Mekong (Cambodia, Laos, Thailand, and Vietnam) represented by ERI and FT Watch in the mediation meetings, voiced their concerns.

Last year, ERI, FT Watch, and its allies ended three years of mediated talks with the Austrian manufacturer of the dam’s turbines. Andritz Hydro promised to continue dialogue around alleged negative impacts in the dam’s resettlement site and to develop human rights due diligence policies.

Statements

“ERI still considers the Xayaburi Dam to be a very destructive hydropower project. By damming the mainstream of the Mekong, Xayaburi poses enormous threats to the region’s ecology. Also, the Xayaburi project takes place in a country where the situation of human rights is often challenged. While we considered the mediation hosted by the Austrian NCP as useful, it would have also been even more helpful to establish – with the help of the Austrian NCP - an independent human rights experts committee to look into the situation of resettled communities in the area of the project site. It would have made it easier for affected communities to directly voice their concerns if the Austrian NCP had been willing to also organize mediation." - Wora Suk, Mekong Campaign Coordinator, EarthRights International

"We rate the ongoing exchange with Andritz Hydro as positive, but we still do not know the end result. It is of the utmost importance that the Andritz Hydro’s new Code of Conduct makes clear references to specific environmental and human rights directives. Andritz has promised to respect human and environmental rights, as required by OECD guidelines, and to develop human rights policies over a year ago. FT Watch will continue to push the company to fulfill this promise outside of the OECD process.” - Thomas Wenidoppler, Finance & Trade Watch

Background

The Xayaburi dam is a hydropower project under construction on the Mekong River in northwest Laos, just across the border from Nan Province, Thailand. Construction began in 2012 and is scheduled to finish in 2019 but the project has been marred by allegations of human rights abuses and concerns over severe environmental and social consequences. The World Bank and the Asian Development Bank have refused to back the project because of these risks but Thai banks later moved in to fund the project. The Electricity Generating Authority of Thailand (EGAT) has agreed to purchase 95 percent of the power produced by the 1,285-megawatt dam. ERI has worked with communities who are already seeing the effects of Xayaburi to amplify their voices and support their organizing efforts.

Project Impact

In our original submission, ERI and the co-complainants voiced grave concerns based on a variety of scientific research and expert reviews that the project will lead to increased malnutrition due to impacts on fisheries and to increased income inequality due to impacts on livelihoods and repeated resettlement of communities. These findings asserted that the dam will likely block nutrient-rich sediment, negatively impact agriculture and may lead to the extinction of 41 fish species. The complainants also alleged that the project will likely threaten the livelihoods of 200,000 people and the food security of millions of people. Despite the independent expert scientific data, throughout the mediation process, Andritz consistently denied any negative impacts, especially in relation to the impacts on fisheries along on the Mekong River, one of the largest inland fisheries in the world.

According to the project’s Social Impact Assessment (SIA) in 2010, the dam will directly affect 4,000 households but independent studies have estimated that it will directly affect as many as 200,000 people as a result of agriculture and fishery impacts.