Dams as Aid (Routledge Studies in Development and Society)

Power by Bo Holmlund (1988) (Photo: Per Ola Utsi)

DAMS AS AID

Dams have serious environmental and social impacts. Public opposition to dams exists in virtually every country where there is the democratic space to express dissent. Western donors face an intractable dilemma when they give dams as aid. This book explores how aid agencies handle this dilemma. Dams as Aid is a critical exploration of dams which sheds light on the wider issues of the political economy of aid, the environment debate and North—South links. Focusing particularly on Nordic (Swedish and Norwegian) aid for hydro dams in the Developing World, it describes why dams are no longer built in the region, the mechanism through which Northern aid money subsidizes the dams industry to find new markets in the South, and the struggles and politics surrounding dam projects, concentrating on three Nordic-financed dam projects in Chile, Tanzania and Laos. This book looks at power dams from the point of view of their social and environmental impacts, and how these impacts are reviewed by Nordic donors. The Nordic focus highlights patterns in the aid-financing of hydro-power projects linking donors, consultants and dam-building firms that exist with other multilateral projects. While the pattern is usually obscured by a bewildering number of countries, companies and institutions, many of which are highly secretive, the Nordic focus in this book provides the opportunity to observe the process in a clearer, more transparent form. It traces the direct connections between the end of the dams era in the North and the export of the technology to the South, via aid. Through detailed analysis of dams/ aid case studies, the book situates case studies in a broad comparative and theoretical perspective. Contributors: Øystein Dalland, Lars Lövgren, Claude Mung’ong’o, Gráinne Ryder, Juan Pablo Orrego Silva, Maria Vedin. Ann Danaiya Usher has covered forest and water politics and North—South questions as a journalist since 1987. In Bangkok she worked as a staff writer on the Thai daily newspaper, The Nation. Moving to Stockholm in 1993 she has investigated the environmental impacts of Nordic aid projects while working for the Swedish environmental magazine Sveriges Natur, and then as a correspondent for the Oslo-based journal Development Today.

ROUTLEDGE STUDIES IN DEVELOPMENT AND SOCIETY

1 SEARCHING FOR SECURITY Women's responses to economic transformations Edited by Isa Baud and Ines Smyth 2 THE LIFE REGION Per Råberg 3 DAMS AS AID A political anatomy of Nordic development thinking Edited by Ann Danaiya Usher

DAMS AS AID A political anatomy of Nordic development thinking

Edited by Ann Danaiya Usher

London and New York

First published 1997 by Routledge 11 New Fetter Lane, London EC4P 4EE This edition published in the Taylor & Francis e-Library, 2005. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Editorial matter © 1997 Ann Danaiya Usher Individual contributions © 1997 respective contributor collection © 1997 Routledge All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalogue record for this book has been requested ISBN 0-203-97487-5 Master e-book ISBN

ISBN 0-415-15464-2 (Print Edition)

CONTENTS

List of maps

x

Foreword

xi

Acknowledgements

xiii

List of abbreviations

xiv

Part I Introduction 1

ABOUT THE BOOK, THE CONTRIBUTORS AND WHAT THIS BOOK IS NOT ABOUT Ann Danaiya Usher

3

Three premises

3

A Nordic case study

6

What this book is not about

9

2

REFLECTIONS ON POWER: THREE SCENES FROM THE END OF AN ERA Ann Danaiya Usher

11

I

Falls Day (1985)

11

Power (1987)

13

The Jokkmokk School (1987)

16

II III

Part II Nordic dams 3

MORATORIUM IN SWEDEN: AN ACCOUNT OF THE DAMS DEBATE Lars Lövgren

21

The impacts of Swedish dams

22

A brief history

25

Vindel: a new kind of politics

27

The river savers

28

vii

4

5

THE DAMS INSIDE Maria Vedin

31

The threat of collapse

31

Porjus: the prototype

33

The Samis

34

Descendants of the pioneers

35

Personal and collective losses

37

The post-industrial hangover

39

THE LAST BIG DAM IN NORWAY: WHOSE VICTORY? Øystein Dalland

41

The Samis of Norway

42

The first phase of resistance

43

Civil disobedience versus state power

44

The impacts of Alta

47

Lessons from the struggle

50

Echoes from the past: resistance to fascism and dams

53

Epilogue

54

Part III Nordic dam builders in the south 6

THE MECHANISM OF ‘PERVASIVE APPRAISAL OPTIMISM' Ann Danaiya Usher

59

'Pervasive appraisal optimism defined

60

The discourse

62

The players

64

Consultants: the grey zone

67

Environmental review in theory and practice

69

Sida’s existential crisis

72

Laos

viii

7

VATTENFALL ABROAD: DAMMING THE THEUN RIVER Ann Danaiya Usher and Gráinne Ryder

77

The Theun Hinboun Dam

79

Mekong river politics

82

Nordic connections with Theun Hinboun

85

Dam building in Laos: the BOOT era

87

Theun Hinboun’s environmental review

89

More water, more fish: Pak Mun revisited

94

Whose knowledge is power?

98

What comes after Theun Hinboun?

99

Tanzania 8

9

PANGANI DAM VERSUS THE PEOPLE Claude Mung’ong’o

105

Water conflicts in the Pangani valley

106

The Nordic solution

109

The furrow systems of the Pangani basin

110

The crisis in state water management

113

Towards a democratic water-basin management regime

115

The limits of environmental impact assessment

116

PANGANI POWER STRUGGLE: NORDIC DAM BUILDERS ON A TANZANIAN RIVER Ann Danaiya Usher

119

Nordic contracts for Pangani

120

Traditional irrigation in the basin: the consultants observations

124

Uncertainties about water availability

126

'Internal political matters

128

The donors' hard line

130

Chile 10

KVAERNER’S GAME Ann Danaiya Usher

133

ix

11

Switching sides

133

See no Ralco, speak no Ralco

136

Swedish environmental rubber stamp

138

Securing Norwegian interests

140

How to get around OECD regulations

144

Managing the fallout

146

Winners and losers

151

Editor’s note

151

IN DEFENCE OF THE BIOBÍO RIVER Juan Pablo Orrego Silva

153

Life blood of a region

156

Pangue, Ralco and the fate of the Pehuenche

159

On environmental aid

161

The recipient of Nordic aid

163

Chile’s 'development'

165

To the heart of the beast and beyond

167

Index

171

MAPS

1 2 3 4 5

Swedish dams The Alta Dam The Theun Hinboun Dam The Pangani Falls Dam The Biobío dams

20 40 75 106 154

FOREWORD

The Swedish Society for Nature Conservation is the largest environmental organization in Sweden, and was founded in 1909. The Society is run by its 180, 000 members. The 270 local branches all over Sweden concentrate on local environmental problems. The members elect a central board which runs the Society at national level. There is a national secretariat with some 70 employees servicing its members and working on national and international campaigns. The Society has been campaigning against large dams in Sweden since its early days and especially during the 1960s and 1970s, until there was a moratorium on dam building in Sweden in the 1980s. The Swedish dam-building industry moved to the South with the help of aid finance. Through our partnership programme with environmental organizations in the South, we became increasingly concerned about the negative social and ecological impact of large dams in the South in general and the Nordic countries’ involvement in these projects in particular. In 1994, with the help of Ann Danaiya Usher, the Society organized an international conference, Nordic Dam-building in the South. To follow up on the success of the conference, Ann Danaiya Usher was commissioned by the Society to edit a book on dams as aid to stimulate the debate further, primarily in the Nordic countries. With the publishing of this book by a British publishing house, we are certain that this will also stimulate the international debate on large dams. Gudrun Hubendick International Secretary Swedish Society for Nature Conservation

xii

ACKNOWLEDGEMENTS

In February 1988, having recently started working on The Nation newspaper in Bangkok, I visited a part of the vast Thung Yai Naresuan forest in western Thailand that was to be inundated by a hydro-electric dam, the Nam Choan. The environmental impact assessment for the project claimed that the forest was already largely degraded by local Karen farmers, and that the area had no special characteristics. It therefore predicted no negative impacts, but concluded that the project would generate income from logging in the flood zone. Nam Choan was stopped because of massive public opposition. The folly of the project was underlined when, three years later, that same area was declared a UNESCO World Heritage Site on account of its spectacular biological diversity. Innumerable people have made this book possible. I am grateful to the late Seub Nakhasathien, to Weerawat Dheeraprasart and to Witoon Permpongsacharoen, who first brought me into Thung Yai, and introduced me to the dams debate. Six years later, in Stockholm, Gudrun Hubendick of the North— South Programme of the Swedish Society for Nature Conservation (Naturskyddsföreningen) supported the idea of writing this book, and provided a grant that enabled us to put it together. My thanks go to colleagues at The Nation in Bangkok and at Development Today in Oslo, to Matthew Smith at Routledge for his patience and encouragement, to Lillian Belander, Johan Niss and Marie Byström for assistance with translation, to Karin Lindahl for taking me to see the Power statue, to Per Ola Utsi for the photograph, to Heffa Schücking and Nicolas Hildyard for their helpful comments on the typescript, and to Sven Hamrell for his guidance over the years. It was an honour to work with the other contributors to this volume; their input goes far beyond the chapters that bear their names. I would like to thank also the many people inside the Nordic aid agencies and companies who helped with advice and information, without which our task would have been much more difficult. Finally, thanks to my family for their constant support. A.D.U. Stockholm June 1996

ABBREVIATIONS

ABB ADB BITS BOOT CNE CODEPU CONADI CONAMA DN EDL EGAT EIA ENDESA EULA FINNIDA

FIVAS GABB ICOLD IFC IVO JICA MAJI NGO NINA NIVA

Asea Brown Boveri Asian Development Bank Swedish Board for Industrial and Technical Cooperation Build, Own, Operate and Transfer National Energy Commission, Chile Committee for the Defence of People’s Rights, Chile National Corporation of Indigenous Development, Chile National Environment Commission, Chile Directorate for Nature Management, Norway Electricité du Laos Electricity Generating Authority of Thailand environmental impact assessment National Electricity Enterprise Company Limited, Chile Euro-Latin Research in Environmental Sciences, Chile Department for International Development Cooperation, Ministry for Foreign Affairs of Finland; formerly Finnish International Development Agency Association for International Water and Forest Studies, Norway Action Group for the Biobío, Chile International Commission on Large Dams International Finance Corporation Imatran Voima, Finland Japanese International Cooperation Agency Ministry of Water, Tanzania non-governmental organization Norwegian Institute for Nature Research Norwegian Institute for Water Research

xv

NORAD NVE OECD PER Sida

TANESCO Terra

Norwegian Agency for Development Cooperation Norwegian Water Resources and Energy Administration Organization for Economic and Development Cooperation Project for Ecological Recovery, Thailand Swedish International Development Cooperation Agency; formerly, Swedish International Development Authority (SIDA) Tanzanian Electricity Supply Company Towards Ecological Recovery and Regional Alliance, Thailand

xvi

Part I INTRODUCTION

2

1 ABOUT THE BOOK, THE CONTRIBUTORS AND WHAT THIS BOOK IS NOT ABOUT Ann Danaiya Usher

THREE PREMISES This collection of essays starts from three premises: that large dams cause serious environmental and social impacts; that public opposition to dams exists in virtually every country where there is the democratic space to express dissent; and that because the negative effects of dams are borne disproportionately by the poor, Western donors face an intractable dilemma when they give dams as aid. This book is about how aid agencies handle that dilemma. A dam is a cement wall that blocks the natural flow of a river. With hydro dams, which are discussed in this volume, the water is directed through turbines to produce electricity. Hydro power is said to be renewable because rivers run for ever, and cheap because once the structure is in place, rain falls freely from the heavens. This assessment is valid only when the impacts and ‘hidden’ costs of dams are ignored. All dams age and reservoirs fill up with silt; a process that is much accelerated in the tropics, where river sediment loads tend to be higher than in temperate climates. Decommissioning can be even more expensive than construction. Yet the eventual problems of how to remove dams and restore riverbeds and what to do with vast, mud-filled reservoirs are almost never discussed by builders or aid financiers. Taking into account the finite life span of power dams, which can be as short as a few decades in the tropics, would increase their cost significantly. With a handful of exceptions among the thousands of dams world-wide, this inevitable cost has been left, vaguely, for the next generation to deal with. As a result of the overwhelming resistance to dams, however, both in the industrialized countries and in the South, the environmental and social impacts have started to be more widely recognized. Dams cause ecological disruption and reduction in biological diversity both up and downstream. Farming systems, pasture lands and forests are flooded, affecting communities that depend on these ecosystems. The obstruction in the movement of water and organisms affects water quality and habitats in the river, floodplain, estuary and coasts below the dam. Peasants and indigenous people who benefited from the freeflowing stream do not, as a rule, benefit from power dams. Electricity tends to go to urban and

4 ANN DANAIYA USHER

industrial centres, while the ‘oustees’, as they are called in India, lose land and homes, as well as the fishing, transportation, irrigation and other ‘services’ that the river once provided, and rarely receive fair compensation. As the river’s flow is transformed into electrical energy, it also concentrates the political power of already powerful groups, while further disempowering the marginalized and the poor. This book does not review the uncounted costs of dams. These have been extensively documented elsewhere. Notably, in 1984, Edward Goldsmith and Nicholas Hildyard published their monumental three-volume study, The Environmental and Social Impacts of Large Dams (The Ecologist, 1984), which includes a review of the main arguments against large dams, numerous case studies from around the world, and an annotated bibliography of the dams literature. Fred Pearce’s The Damned (Bodley Head, 1991) provides an overview of the dams debate in the context of the global water crisis. Mortgaging the Earth by Bruce Rich (Beacon Press, 1994) discusses the ecological and political implications of World Bank lending for several large dam projects. Most recently, Silenced Rivers (Zed Books, 1997) by Patrick McCully is an update of the Goldsmith book that describes the issues, and the growing international resistance against dams during the past decade. The dam-building era for most of the rich world peaked during the middle decades of this century. By the 1970s, public opposition to dams was such that the relevant industries in countries like the United States, Norway, Sweden, Canada, Australia, France and Austria found themselves forced to look for new markets. Their building spree in the Third World began at this time, aided in no small measure by the development aid institutions, in particular the World Bank, and the bilateral aid agencies. With their mandate to alleviate poverty, Western donors began to give dams as aid, in the name of bringing development and progress to the South. The bilateral agencies tended to channel this aid through their national dam-building companies, for which aid subsidies created competitive advantage in international bids. The electricity provided material advantages to some, but these dams also displaced millions of people, decimated indigenous communities, drowned choice farmland and rainforest, and devastated fisheries—arguably causing even greater havoc than dams in the North, for people who were less able to cope with the impacts. (By very conservative estimates, the World Bank has lent money for dams that displaced 10 million people, most of whom were already poor and did not receive compensation for their losses.) While the benefits of these projects boosted GNPs, the costs were mostly neglected and, until quite recently, the impacts remained invisible on national and international political agendas. It is not hard to understand why. Those most affected by aid-financed dams tend to be peasants, tribal communities, landless people—groups that are already politically marginalized. In struggles that have lasted for years, sometimes decades, opponents of dams have faced various forms of state repression: physical threats, arrests, imprisonment and even death. For these reasons, the resistance to dams in developing countries was initially local and isolated. But since the 1980s,

ABOUT THE BOOK 5

international opposition to large dams has gained strength and breadth. While the environmental movements that stopped dam building in the industrialized world were mainly concerned about saving wilderness areas, the critique of large dams technology in the South has been both ecological and political. In Brazil, in Thailand, in India, the opposition to dams and the demands of affected people for compensation are part of a wider movement for democracy and social justice. The debates have focused on how the loss of biological diversity threatens cultural diversity and how dams strip the poor of their right to livelihood. The World Bank, the leading public financier of dams in the Third World, does not deny that dams have the potential to cause serious negative impacts. Rather, it has long maintained that it carefully studies projects beforehand to ensure that these impacts are avoided or mitigated, and that affected people at least regain their former living standards. In 1972, at the UN Conference on the Human Environment in Stockholm, Bank President Robert McNamara told delegates that the World Bank’s environmental office evaluated each project and conducted ‘careful in-house studies’ so that ‘in every instance’ environmental safeguards were successfully implemented. He did not mention that at the time, the office consisted of just one person (Rich 1994:112). Seventeen years later, the environment office had expanded, but with little effect for the environmental review process for dams. A 1989 Bank review of the agency’s environmental performance in lending for large dams found that since the time of McNamara’s speech, ‘only slightly more than half of appraisal reports…explicitly referred to environmental considerations’. Of those that did, ‘most reports said that the studies or surveys concluded that no significant environmental impact would be occasioned by the project’. The review also noted that ‘most environmental consideration is limited to the immediate area and time of the project itself, not to basin-wide impacts’. Since these considerations are brought in at such a late stage in the project cycle, they become ‘an obstruction to the process rather than …a contribution’ (Dixon et al. 1989:35). In the last decade, the global critique of dams has been noticed by dam builders and donors. The head of the dams industry lobby group, the International Commission on Large Dams (ICOLD), referred to the opponents of dams as ‘a serious general counter-movement that has already succeeded in reducing the prestige of dam engineering in the public eye, and…is starting to make work difficult for our profession’ (Pircher 1992). The World Bank, target of relentless criticism as evidence accumulates world-wide about the impacts of its lending for dams, has greatly strengthened its environmental appraisal procedures. It is not clear, though, whether stricter rules or bad press have more influence on Bank decisions. Today the Bank appears to be shying away from large dams—at least in democratic countries where those affected cannot easily be silenced. It may be no coincidence, however, that while aid for dams to Brazil, Thailand and India have fallen off, China has in the 1990s become the largest recipient of World Bank lending for large dams (Sklar and McCully 1994:23). Ultimately, the critique of dams has underscored a fundamental contradiction in the development aid business. The aid agencies were set up to alleviate

6 ANN DANAIYA USHER

poverty. Yet when donors, be they multilateral or bilateral, give money to build dams, this often creates more, not less, hardship for the poor. A NORDIC CASE STUDY The international dams debate has focused mostly on the role of the Bretton Woods institutions. While the World Bank is clearly the most important single donor in the field, the bilateral aid agencies operate along much the same lines. They provide grants and loans for dams through co-financing arrangements with the World Bank or the regional development banks, as well as financing projects on a bilateral basis. They are subject to a similar pressure to lend, and suffer the same dilemma when giving aid for projects like dams that aid the rich to the detriment of the poor. One advantage of focusing on the bilaterals is that with smaller bureaucracies in single countries, it becomes easier to see how the political mechanisms work; to trace the direct connections between the end of the dams era in the North and the export of the technology to the South, via aid. At the same time, unlike the multilateral institutions, to which Northern tax-payers feel little allegiance, the bilateral aid agencies all have a Parliament, a national press, and a public with direct interest in their activities. Hence there is a greater possibility of improving accountability in the way this public money is used. Dams are given as aid to the Third World by most OECD countries whose industries can no longer build dams at home. In this book we examine this dams as aid phenomenon from a small corner of the industralized world. Norway and Sweden exemplify the processes described above especially well because of a peculiar combination of conditions: their small size, large (in per capita terms) bilateral aid budgets, major dam-building firms, active environmental movements that stopped domestic dam building and, finally, the most open freedom of information rules in Europe, which allow for public access to project documents. Access to information in particular distinguishes these Nordic aid agencies from other bilaterals and from the multilateral lending institutions, where a culture of secrecy rather than openness pervades the working style. This book is divided into three parts. Following the introduction, the second part of the book consists of three chapters that describe the end of the Nordic dam-building era from different vantage points. The first, ‘Moratorium in Sweden’, is by Lars Lövgren who was 7 years old when the Swedish utility Vattenfall announced its intentions to build a series of dams near his family’s home on the Vindel river. The struggle over the Vindel split communities up and down the valley, and throughout the country. The opposition eventually forced Vattenfall to back down, and the river was protected from hydro exploitation. But the utility moved on to other rivers where resistance was less organized, from the Vindel to the Kalix, and from the Kalix to the Ljusnan. In Lövgren’s account of the Swedish dams debate, he describes how an inter-basin network of river protection groups—the River Savers’ Association—emerged to combat Vattenfalls ‘divide and conquer’ strategy. And how dam building was stopped altogether in Sweden in 1987.

ABOUT THE BOOK 7

The next piece is written by Swedish poet and short-story writer Maria Vedin, who lives in the Artic town of Jokkmokk. I met her in the winter of 1994 at Ajtte, Jokkmokk’s Sami and Mountain Museum, on the occasion of a film and culture festival organized around the themes of shamanism, indigenous identity and hydro power. During an evening dedicated to stories about the Swedish hydro culture, Vedin read a short story from her collection Ett annat sätt övervinter (Skellefteå: Ord & VISOR, 1992). It told of a woman in a remote northern river valley who, threatened with inundation by a dam, refused to leave her land. In ‘The dams inside’, Vedin writes about an aspect of hydro power that receives little attention in the dams debate: what happens to a Northern nonindigenous culture that was dependent on nature when that nature is destroyed; when the rivers are dammed and the forests scarred by clearcuts. A daughter of Swedish pioneers, she describes what happens to the inner landscape when a culture passes from a subsistence lifestyle to post-industrialism in 70 years. Vedin’s other books include three collections of poetry: En grupp av ögonblick (Stockholm: Wahlström & Widstrand, 1993), Diktafon (Stockholm: Wahlström & Widstrand, 1995) and Den Lilla Insidan (Stockholm: Wahlström & Widstrand, 1997). The third chapter in the section on Nordic dams is about Alta, a 150-megawatt hydro-power project in the far north of Norway that was commissioned in 1987. As editor of the new local newspaper Altaposten, Øystein Dalland followed the controversy over Alta from its initial accidental ‘discovery’ by a Sami teacher in 1969. The project provoked a massive resistance movement, which drew support from all sectors of society and spanned more than a decade. In this peaceful and democratic nation, Dalland writes, the government stopped just short of bringing in the army to suppress opposition to a dam that was neither needed nor economically viable. The struggle against Alta drew a political line between civil society on one side and the hydro-power industry and the state on the other. The dam was built, but the political costs to the government were high. No one wants ‘another Alta’, and it was probably the last big dam in the region. More than any other, the Alta controversy embodies the reasons why the Nordic dams industry has had to move abroad. A college teacher of natural resources management in Telemark, Dalland has written two books about Alta—Demningen (Davvi Media, 1989) and Altakrønike (Davvi Girji, 1994). Part III is about the process by which the Nordic dams industry has shifted to the Third World. Chapter 6, ‘The mechanism of “pervasive appraisal optimism”’, introduces the players—the companies, the aid agencies and the consultants. It is an attempt to explain how the Nordic donors’ environmental impact review process for dams is rigged. Illustrating how the mechanism functions in practice, the subsequent chapters detail three Nordicfinanced hydro dams on three continents—the Theun Hinboun on the Theun river in Laos, the Pangani Falls on the Pangani river in Tanzania and the Pangue on Chile’s Biobío river. The political and ecological implications of the projects are presented from both ends, as it were: from the donor side and from the recipient side.

8 ANN DANAIYA USHER

Chapter 7, ‘Vattenfall abroad’, describes the first dam to be built outside Norway and Sweden by the two largest Nordic utilities, Vattenfall and Statkraft. Nordic aid agencies provided various grants to the project, and the Nordic investors will earn almost US $4 million a year for the next 30 years. When it is operational in 1998, electricity from Theun Hinboun will be exported to Thailand, while any ‘extra costs to the local people or the natural environment will be borne on the Lao side of the border. Gráinne Ryder, a British-Canadian, is a water resources engineer who lived for the better part of a decade in Thailand. Until 1995, she worked for Terra (Towards Ecological Recovery and Regional Alliance), first in Bangkok, then in Vientiane, monitoring development projects in the Mekong river basin. Ryder is a contributor to The Mekong Currency (Bangkok: PER/Terra, 1992), a photo-journalistic account by Liesbeth Sluiter of how people use the great river in its free-flowing, undammed state. She is also the editor of Damming the Three Gorges: What the Dam Builders Don’t Want You to Know (Toronto: Probe International, 1990), a study of the Canadian aid-financed environmental impact assessment (EIA) of the infamous Chinese dam. Built with aid finance from the Norwegian, Finnish and Swedish governments, Tanzania’s Pangani Dam started operating in October 1994. Donors claimed that in addition to providing badly needed electricity, the dam would help to solve a continuing water conflict in the basin. In fact, the opposite occurred. The turbines will probably never run at full capacity because of the lack of water, and the dam has increased pressure on a scarce resource. Under the new river management regime imposed by Nordic donors, subsistence farmers have been forced to use less water for irrigation. Chapter 8, the first chapter on Pangani, is written by Tanzanian geographer Claude Mung’ong’o, research fellow at the Institute of Resource Assessment, University of Dar es Salaam. Born in the Pangani valley, Mung’ong’o gained a special insight into the methods of EIA when he was hired by the Norwegian consultancy Norplan in 1990 to study the social effects of the project. Though the main social impacts were upstream, Mun’ong’o’s terms of reference limited his study to the dam site area. ‘Pangani Dam versus the people’ describes these upstream issues, and the changing political and social context in which Nordic dam builders are operating in Tanzania. The next chapter, ‘Pangani power struggle’, is based almost entirely on documentation found in the Sida archives in Stockholm. It traces the argumentation of the consultants between 1989 and 1995, as they planned, built and evaluated the dam. The Pangue Dam on the Biobío river in Chile is the largest of the three projects discussed in this volume. Planned during the military dictatorship, Pangue became the property of the national utility ENDESA, which was privatized just months before General Pinochet stepped down in 1989. Swedish and Norwegian donors provided aid to ENDESA—the most profitable Chilean company with clear ties to the former military regime—to pay for Nordic-made turbines, as part of a co-financing arrangement with the International Finance Corporation, the private lending arm of the World Bank. Pangue is the first

ABOUT THE BOOK 9

project of a six-dam cascade to be built on the Biobío, one of Chile’s most spectacular rivers and the traditional territory of the indigenous Pehuenche people. Chapter 10, ‘Kvaerner’s game’, traces the political manoeuvring among the donors and companies at the Nordic end, which ensured that aid money went to this most unlikely aid recipient. Chapter 11, ‘In defence of the Biobío river’ is written by Chilean ecologist Juan Pablo Orrego Silva, who has since 1991 coordinated the Action Group for the Biobío (GABB), the main opposition group to the hydro development of the river. Orrego received the Goldman Environmental Award in April 1997 for his efforts to stop dam building on the Biobío. Why were Theun Hinboun, Pangani and Pangue selected as case studies for this volume? They are certainly not the only hydro projects that Nordic aid agencies and companies have built in the Third World. At 210, 66 and 450 megawatts respectively, they are not among the largest dams in the world— though according to ICOLD’s definition of 15 metres, they are all large dams. Nor did they involve the highest cost over-runs, the most blatant human rights violations, or the largest areas of inundated forest and farmland. They are on a completely different scale from monster dams like Three Gorges, Narmada and Tucuruí. Rather, these projects were chosen precisely because of their comparatively small scale and allegedly negligible environmental and social impacts. All three involved limited resettlement—no people for Theun Hinboun, one for Pangani and 53 in the case of Pangue. They were all referred to by the builders as ‘run-ofriver’ projects. (Norwegian consultants argued that Theun Hinboun should not even be called a dam, though it is 25 metres high with a 24-kilometre-long reservoir.) Yet all three projects have profoundly disrupted riverine ecosystems up and downstream, and though the reservoirs do not actually flood many people s homes, there are complex social impacts that result from the overall degradation of these valleys. Economic viability was calculated without taking these costs into account. In all cases, the impacts were belittled or ignored by the donors and their experts, who were determined to see the projects to completion. Another common feature of these three projects is that their bilateral financing came from Nordic aid agencies. For this reason, Theun Hinboun, Pangani and Pangue highlight a pattern in the aid-financing of hydro-power projects linking donors, consultants and dam-building firms that exists with other bilateral and multilateral projects. But while the pattern is usually obscured by a bewildering number of countries, companies and institutions, many of which are highly secretive, the Nordic focus provides the opportunity to observe the process in a clearer, more transparent form. WHAT THIS BOOK IS NOT ABOUT This book looks at power dams exclusively from the point of view of their social and environmental impacts, and how these impacts are reviewed by Nordic donors. It is not about energy politics. This book does not compare hydro power

10 ANN DANAIYA USHER

with nuclear or fossil fuels. Nor does it suggest what forms of energy might be less harmful to people or to nature. How electricity can be supplied to the majority of the world’s population who are without and whether, indeed, this is desirable or possible; how much less electricity the industrialized world could or should use to be more ‘sustainable’ (an issue of particular concern to Sweden and Norway, which are the world’s highest per capita energy consumers); how bilateral donors like Sida and NORAD might use their millions if they ceased to finance large infrastructure projects like dams; and how these Nordic countries would have turned out with fewer dams are all important, related, but separate questions that are beyond the scope of this book. REFERENCES Dixon, John A., Talbot, Lee M. and Le Moigne, Guy (1989) Dams and the Environment: Considerations in World Bank Projects, World Bank Technical Paper No. 110, Washington, D.C. Pircher, W. (1992) ‘36,000 large dams and still more needed’, paper presented to the Seventh Biennial Conference of the British Dam Society, University of Stirling, 25 June. Rich, Bruce (1994) Mortgaging the Earth: The World Bank, Environmental Impoverishment and the Crisis of Development, Boston, Mass.: Beacon Press. Sklar, Leonard and McCully, Patrick (1994) Damming the Rivers: The World Bank’s Lending for Large Dams, International Rivers Network, Working Paper 5, San Francisco, November.

2 REFLECTIONS ON POWER Three scenes from the end of an era Ann Danaiya Usher

I FALLS DAY (1985) The air was filled with expectation and excitement one sunny July day in 1985, as throngs of people gathered around Stornorrfors Dam to witness the annual spectacle. Organized by the Swedish electricity company Vattenfall, the event had become wildly popular and tended to draw crowds in the tens of thousands. This year’s Falls Day was no exception. People came from the nearby city of Umeå and from the surrounding region to watch the release of water from the dam. The mechanics of Falls Day were straightforward enough. Amid balloons and hot dogs, speeches and general celebration, the sluice gates of the dam would open, suddenly releasing foaming torrents of water and creating for a moment the illusion of a mighty waterfall bursting from behind a concrete wall, to the delight of the watching crowds. But in 1985, things were not to go as planned. In what must be one of Sweden’s best-organized (and best-remembered) actions of civil disobedience, a small group of children and young people foiled the Falls Day event and, in so doing, marked the symbolic end of the Swedish dambuilding era. The activists belonged to the environmental youth organization Fältbiologerna (or Field Biologists). Thorvald Jacobsson, a leader of Fältbiologerna at the time and one of the masterminds of the plot, described the purpose of the action and its logistical difficulties. We wanted to point the finger at Vattenfall, so people would realize that they were the political tool of the dams industry. The ones acting behind the scenes, always trying to push the politicians to build more dams even though the public did not need them or want them. (Thorvald Jacobsson, Interview, 11 May, 1995) Being a youth group with members as young as 10 years old, they wanted to design an action in which everyone could participate. At the same time, the

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organizers had to be able to guarantee the physical safety of young, albeit environmentally engaged, children. The solution they came up with neatly suited these conditions: the idea was for a group of older Fältbiologerna members to stand in front of the dam—in the middle of the former riverbed, as it were—and so force a delay in the release of water. This would provide enough time for the younger ones to deliver their message, and act as an ‘interface’ with the audience. The logistics were, however, no simple matter because both river banks were heavily patrolled by Vattenfall employees and police, precisely to ensure that no one was anywhere near the path of the water. Thus, in addition to the task of somehow sneaking past these patrols, timing was of the utmost importance to make sure that the protesters were not swept away by the deluge. Too early, and the plot would be discovered. Too late, and they risked the lives of those stationed below the dam. Jacobsson, who was among this group, kept in radio contact with a second group of activists positioned downstream at the power station where the opening of the sluice gates was controlled, awaiting the signal to order a delay in the release of the water. A third group, mostly consisting of younger children, was located on the crest of the dam above. The first group manoeuvred into position, and sent the signal to the second. The moment arrived, but there was no explosion of white water. Instead, in front of thousands of onlookers and the national press, those at the foot of the dam unfurled their banners, exposing the ‘lie’ of Falls Day and entreating Swedes to ‘Save Our Rivers’. Meanwhile, the younger ones on top of the dam took advantage of the confusion in the audience, handing out leaflets and explaining their concern. Falls Day was a marketing strategy of the industry, designed to cope with the waning public support for dam building. By 1985, two-thirds of Swedish rivers had been dammed, and public opposition was so intense that it had become virtually impossible to exploit the remaining hydro-power potential. As a Vattenfall publication put it: The rather benign attitude towards hydro power gradually changed during the sixties and now there is strong environmental and political resistance against harnessing the remaining, untouched [rivers]…. This resistance has resulted in a decision by the Parliament to exclude the remaining major rivers in the northern part of the country from hydro power construction … for the time being. (Vattenfall 1988:59 and 8) It would be two more years before this legal prohibition on dam building in the last four free-flowing rivers was enshrined in the 1987 Natural Resources Act. ‘Falls Day was a big fake’, said Jacobsson, reflecting on the action ten years later. ‘It should have been a day for grieving, not for celebration. We wanted people to see that what was once a mighty river was now completely dead.’ The length of the Ume river was indeed extensively dammed, with a total capacity to generate 2,006 megawatts of electricity from 17 stations. But the

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development of this river pales before that of the Lule some 250 kilometres to the north, which flows south-east from its source in the mountains across the Arctic Circle into the Baltic Sea. The first dam on the Lule river was built in 1914 at Porjus, a village 50 kilometres upstream from Jokkmokk—names that are synonymous with Swedish hydro-power history. Through the decades, Lule would become the country’s most heavily exploited river, with a generating capacity of 4,240 megawatts from 15 power stations. Vattenfall describes the Lule river as a near perfect ‘staircase’ that harnesses the energy from almost every drop of falling water before it reaches the sea. (In fact some 85 per cent of the river’s potential energy is converted to electricity, the remaining 15 per cent contained in small upstream tributaries.) If there exists a model of Swedish hydro-power development, the series of dams along the Lule river is it. To Swedish environmentalists, the Lule is dead. All its natural flow from the mountains to the sea has been redirected into a vertical, up-and-down motion along the steps of the staircase; its yearly swellings and shrinkings have been replaced by mechanical regimentation. Sweden’s veteran ecologist Rolf Edberg writes of how the lives of local communities were once intertwined with the freeflowing river, and laments that dams have led to the impoverishment of the Lule valley ecosystem: A dam is a blood clot in an aorta. Once destroyed, a river can never be restored…. Above a dam, the river is transformed into a regulating reservoir where the water pulses back and forth over lifeless shores, below the dam [is] a drained furrow like an accusing cry in the wilderness. (Edberg 1995:63) For Vattenfall, though, the exploitation of Lule symbolizes the diligence, audacity and triumph of men over nature. Through sheer perseverence and hard work, the dam builders forged a civilization out of ice and stone, transformed an Arctic wilderness and ignited the engine of a nation’s development. In their view, they turned an impoverished and backward region into a source of power that would provide cheap electricity for industry, and set Sweden on its way to becoming one of the richest countries in the world. II POWER (1987) So it was that in 1987 upon the completion of this great task, the utility decided to hold a celebration to honour the tremendous effort of so many individuals over so many decades. Vattenfall’s Information Officer Karl Axel Enström was assigned the job of organizing an event that would recognize the importance of the river to Swedish society; that would acknowledge the labour and hardships of workers who had endured this harsh climate over the years. It was decided that a statue should be erected to mark these achievements—a statue to commemorate the hydro development of Sweden’s most intensively exploited river: Luleälv.

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Still smarting from the Falls Day fiasco, perhaps the dam builders wanted to have a last word, to remind Swedes of their origins, and ensure that their contribution to the country’s development would never be forgotten. Enström’s group organized a competition in which artists from around northern Sweden were invited to submit designs for the monument. The only condition was that the statue was to be hewed from a 400-tonne rock that lay beside the Lule river some 8 kilometres from Porjus village. This would be transported to Porjus, site of the country’s first dam, and the ideal location for such a monument. Six designs were submitted. The jury selected that of Bo Holmlund, a sculptor from the northern town of Robertfors. And on 24 August, 1988, tiny Porjus village was host to a grand party, to which 2,000 people were invited, including HM King Carl Gustaf of Sweden. There a book entitled The Powerful River was launched, and the Vattenfall statue was inaugurated. Holmlund’s work looks from a distance like a missing piece from Stone Henge. It is an obelisk-shaped stone, some 10 metres high, and tapering gradually towards the top. On its sides are large human hand prints, some full and some partial. It is split down the middle with a metal tube running through the centre, and out of the opening at the tip emerges its most striking feature, a 5metre long undulating aluminum rod pointing towards the sky. Reflecting on the meaning of statues in the human psyche, British essayist James Fenton remarked: ‘To erect a statue is to make a bid for immortality, or for the immortality of the subject…. The world of statues…is one in which the spectator is alive to forces of a complexity we can barely grasp’ (Fenton 1996: 38, 40). Freezing a moment like a three-dimensional photograph, a statue invites us to ponder on its message, and to wonder about events that preceded the scene and about what might occur next. The towering structure that stands today by the Lule river at Porjus, bearing the enigmatic (and perfect) title Power, certainly does justice to the complexity of the forces it portrays. It is not simply that Power conveys with unnerving effectiveness a sense of brute, physical force. This brutality is emphasized and magnified by its shape, which indisputably resembles a male member in climax with its shining silver substance spurting from the tip. Seen in this particular light, the statue provides (perhaps without intending to) a startling description of ideas at the heart of hydro power that are eerily accurate, if disconcerting. But first, what were the people in Vattenfall’s jury thinking when they chose Bo Holmlund’s design over the others? Surely not of phallic symbols. Enström’s interpretation is as follows: the stone represents the cold, harsh land of the North; the metal tube passing through its centre, the Lule river; the zig-zagged aluminium rod at the top, the small tributaries that flow into the mainstream, increasing its power; while the palm prints represent the bare hands of the men who worked to carve a civilization out of this forbidding landscape (Karl Axel Enström, Interview, 17 January, 1996). Enström attributes this interpretation to the artist. Curiously, though, almost a decade after its completion, Holmlund offered a notably different explanation of his work (Karl Axel Enström, Interview, 17 January, 1996).

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While for Enström the statue evoked a wholly positive message, the artist himself expressed mixed feelings about hydro power, and was certainly no propagandist for Vattenfall. To Holmlund, the handprints are the power of man smashing through the mountains ‘for good or for evil’, as he puts it, representing the experience of the first generation of dam builders, who suffered in abominable living and working conditions. The tube is the axis of the turbines that convert the river’s force into electricity. And, as Enström also noted, the uppermost part symbolizes the source of the power, the movement of water feeding into the turbines. The artist reflected: I have thought all along that the way we developed hydro power in Sweden has been devastating. Seeing all the rivers that have been dammed just shows the extent of this devastation. But in a way the worst is what you cannot see, the communities and ecological values that have disappeared for ever…. Of course society has benefited in some ways because Sweden was so poor before, but we destroyed so much in the process. We should have been more careful. Now we certainly should not build any more. (Bo Holmlund, Interview, 15 March, 1996) Depicting his ambivalence towards hydro power in stone, Bo Holmlund evidently did not set out to create a phallic symbol either. Yet his image, and the one that Vattenfall chose to erect at the historic centre of Sweden’s dam-building region as a testimony to its activities along this river, is phallic. In a way, though, the fact that neither the client nor the artist was conscious of this makes the statue even more interesting. Is the reason for the discrepancy in the interpretations simply that men and women see things differently? Whatever the answer, it does not change the shape of Power. In this ‘bid for immortality’, then, what is Power’s message? To begin with, the hands make clear that what is depicted in the statue is a solo act. If there was anyone else involved in this scene before, she is certainly nowhere to be seen now…and who is ‘she’? The river, of course. It is not as gratuitous as it might first appear to compare the river to a woman. The statue invites us—even entices us—to do just this. Indeed, the river as feminine entity, life giver, source of fertility is commonplace in many cultures. In the Thai language, for example, the word for river translates literally as ‘water mother’, mae nam. The Thais (Tais) are traditionally a river-valley people, where the river is the centre, provider of food, sustenance, life—everything. So one speaks of Mae Nam Mun, or Mae Nam Chao Phraya, or Mae Nam Lule… Water Mother Lule. To take another example, the Katío-Embará indigenous people who live along the Sinú river in Colombia perceive the river as a feminine entity. They call the river their mother because it/she embodies the economic and spiritual foundation of their culture. They have understandably been troubled by the building of a dam, the Urrá I, across the Sinú’s mainstream. As construction proceeded and the rivers flow was about to be cut off in late 1994, the Katío-Embará people

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organized a last voyage down the river in their canoes, in order, as they expressed it, to say farewell to their mother. Emberá leader Simon Domincó bemoaned the implications of the dam: ‘Nobody listens or understands that we will no longer be able to navigate the river, that the fish will not be able to pass to lay their eggs in the water of the Upper Sinú. No one understands that we are struggling not to disappear. And we cry: we are here, we exist!’ (El Espectador, 11 November, 1994). These efforts were, however, largely ignored by the Colombian government and foreign financiers—including Sweden. Construction of Urrá I continues. What, then, of the relationship between Power and the Water Mother Lule? What does the statue say about the connection between the builders and their creation? About the relationship between the culture and the river? What is going on in this scene, and what events precede and follow the instant that Holmlund has chosen to render? Recall the placement of the statue, which stands upright, while the river lies off to the side. ‘She’ is strapped, immobilized, all her power harnessed by heavy concrete and steel obstructions that force her flow through tiny gates. In this larger-than-life installation, the river is tied down, permitted no movement except for that which contributes to the pleasure of her possessor, who towers over her. This is no mother—child relationship. Nor is it one between equals. It is not a relationship based on respect, or on intimacy, or on love. It is rather infused with unspeakable loneliness and fear, enhanced by the icy landscape that surrounds it. If we adopt the sexual imagery, as the statue provokes us to do, we see that this is not an image of worship, or of a union between two lovers. It is an act of domination and violence: a rape. III THE JOKKMOKK SCHOOL (1987) ‘We didn’t stop the dam building’, said Jacobsson of the Falls Day action. By that time Vattenfall’s empire was already in its decline. In fact, our action was many years too late. It was more like a testimony, to tell them: you’ve taken all you can take. I think they got the message. So now they’re ‘taking’ in other countries. Public resistance to further exploitation of rivers presented a dilemma for the vast network of companies, agencies and experts, and for the bureaucracy that had grown up around hydro power over the course of the century. A similar situation confronted the industry in Norway, where massive public opposition had virtually stifled dam-building activities in the country. What were Nordic dam builders to do now that they had built all the dams they could in Sweden and Norway? The obvious answer was to move abroad in search of new markets. They found these in the Third World. For Vattenfall, the need to shift was already becoming clear by the 1970s.

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In the course of more than 30 years of intensive construction Swedish know-how has laid the foundation of a major export industry during the 1970s. Consulting engineers, contractors and manufacturers are now engaged in hydro power development in many countries throughout the world, advising and assisting in all phases from surveys and feasibility studies through design and construction to the operational stage. (Vattenfall 1988:8) The export was facilitated by development aid agencies, which joined the league of dam builders to bring Nordic river management to the South. How else could poor countries be expected to purchase expensive Scandinavian technology? Moreover, companies in other industrialized countries that experienced the same kind of public opposition to dam building were receiving subsidies from their aid agencies. A powerful alliance thus evolved between Nordic development aid agencies and Nordic firms, enabling aid funds to finance companies building dams in the South. This ‘dams as aid’ phenomenon provided the framework for the export of both equipment and hydro-power know-how. Swedish aid to hydro projects like the Kotmale in Sri Lanka, Aswan in Egypt and Xeset in Laos helped spawn the idea of systematizing the transfer of know-how. This would not be restricted to sending experts abroad to dispense advice, or even—as in the case of Laos—to rewrite water laws. Starting in 1987, dam builders from the South were brought to the north of Sweden for training, financed by Swedish aid. The site of this training was Vattenfall’s hydro-power training centre, the Jokkmokk School, located on the banks of the Lule river. Like the Falls Day Action at Stornorrfors and the Power statue at Porjus, the Jokkmokk School is a manifestation of the end of the Swedish dams era. The school’s Vice-Principal, Göran Ölund, explained that by the 1980s suddenly everything stopped [in Jokkmokk] and a committee was set up by the municipal government, including Vattenfall, to decide what to do after no more dams were being built. They came up with the idea of a school that would bring economic development to the region. Because we have all the facilities here, it is a very natural place to teach about hydro power. (Göran Ölund, Interview, 2 November, 1995) Vattenfall owns the equipment and provides the teaching staff—Ölund and the school’s Principal, Stig Wallbing, are Vattenfall employees—while companies like ABB donate used parts at friendship prices to the school. The school’s main activity remains the training of Swedish technicians, but administrators are hoping to expand the Third World component from its current 30 per cent, if aid financing is available. From 1997, the original 10-megawatt power station at Porjus will be used to train students from countries as far-flung as Zambia, Egypt and Laos.

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Jokkmokk is an ideal location, Vattenfall’s U.I. Wollström writes, because ‘within a radius of 50 km, there are more than ten power stations, two remotecontrol centres for training and field trips, and plants with differing technology and designs’. In addition, the school provides: technical equipment for simulating a power stations total supervision and control equipment and grid, with power line models…equipment to simulate: a small power station with less complex supervision equipment without automation; transmission equipment, including substations (400 kV, 130 kV, 40 kV); remote control; and a simpler hydro power station with supervision equipment. There is also hydraulic equipment for experimentation, and complete equipment for turbine governing. (Wollström 1995:66) For the Swedish dams industry, the school is a neat marketing opportunity, providing a setting to make personal contacts and to demonstrate the use of Swedish hydro-power technology to hundreds of potential buyers from the South. At a time when Vattenfall is looking to expand its export market, the school’s administrators have no incentive to raise the environmental issues with their Third World students. The fact that this is subsidized by aid is merely a bonus. The students clearly receive a first-rate technical training, with hands-on experience of operating a functioning power plant—but at the expense of the ecological and political dimensions of hydro-power technology. Conspicuously absent from the curriculum are issues central for decision-makers in the South: how to balance water use for electricity generation with irrigation; how to deal with erosion and siltation in the reservoir; how to ensure the passage not of two or three species of migrating fish, but of 20 or even 100 different species; how to manage resettlement; and how to balance up and downstream water rights. Arguably, though, the most crucial part of the Swedish hydro-power story missing from the curriculum is the decades-long debate that ended with the moratorium on dam building. REFERENCES Edberg, Rolf (1995) And the Sea Never Rests: A Story on the Life Cycle of Water, Stockholm: Journal. Fenton, James (1966) ‘On statues’, New York Review of Books 43 (2), 1 February. Vattenfall (1988) Hydro Power in Sweden, Stockholm: The Swedish Power Association and the Swedish State Power Board. Wollström, U.I. (1995) ‘Porjus Hydropower Centre’, International Journal on Hydropower and Dams, May.

Part II NORDIC DAMS

20

Map 1 Swedish Dams

3 MORATORIUM IN SWEDEN An account of the dams debate Lars Lövgren

The decision [to build the Suorva Dam] is a deadly insult not only to Parliament’s 1909 decision [to create a] national park, but to everything about nature conservation and nature conservation legislation!…Large-scale industry represents a power that stands above the law and above the people, against which nobody dares to raise his voice. (Thor Högdahl, Swedish Society for Nature Conservation Yearbook (1920)) Homogeneity instead of variety characterizes the Swedish rivers today. (Eva Jakobsson ‘Industrialized rivers’, in Nordic Energy Systems (1995)) In 1919, the Suorva Dam on the upper reaches of the Lule river created Sweden’s first large storage reservoir. Its purpose was to regulate the flow into Porjus, the country’s first hydro dam, which had been built five years earlier. Suorva wiped out the magnificent Stora Sjöfallet (the Great Waterfall), the scenic outlet of lake Akkajaure and part of a national park. A biologically rich Arctic valley that had sustained both Sami and Swedish settler communities for generations was devastated by the reservoir. The scar on the landscape remains to this day. This short-sighted decision is still considered to be one of the great political scandals in the history of Swedish nature conservation. The agency responsible for the harnessing of the Lule river at Suorva and at hundreds of other sites around the country was the Royal Board of Hydro Power (Statens Vattenfallsverk), today known as Vattenfall. Statens Vattenfallsverk was founded in 1909 for the purpose of exploiting the hydro-power potential of the largely state-owned rivers. During its first decades of operation, a handful of power stations were built, such as Porjus in the Lule river, Trollhättan in the Göta, and Älvkarleby in the Dal. With time Vattenfall became the dominant actor on the Swedish electricity market with strong interests also in the nuclear

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power industry. Today, through its hydro and nuclear facilities, Vattenfall produces nearly 50 per cent of the total electricity in Sweden. The other hydropower plants in Sweden are owned principally by municipal energy companies and large pulp and paper manufacturers. Hydro contributes roughly half the electricity produced in Sweden today, while the other half is produced by nuclear power. An increasing share of electricity is generated by industries and in heating plants. In total, electricity represents one-third of the total energy supply Thus, the rivers provide approximately one-sixth of the total energy supply in Sweden. After a century of heavy exploitation, some 70 per cent of the energy production potential of Swedish rivers has been harnessed by 140 large dams (over 15 metres) and hundreds of smaller ones. Thor Högdahl’s fierce critique 75 years ago was one of the first examples of popular doubts about hydro-power exploitation. By the 1950s, as more dams were built and people began to experience the irreversible cultural and ecological effects, opposition became more vocal. In the ensuing years, a formidable public campaign against dams put down roots in river basins throughout the country The controversy over dams in Sweden reached its height in the 1970s, and in 1987, most of the remaining free-flowing rivers and streams were protected from hydro development by a parliamentary decree. Among these are four major river systems in the north of the country—Torne, Kalix, Pite and Vindel—that are protected to this day. As Swedish water laws favoured dam building through most of the century, the political arena proved much more expedient in the fight for the remaining rivers than trying to use legal mechanisms. This has also meant, however, that victories obtained after long and exhausting campaigns can suddenly be overturned if the current political consensus about the value of free-running rivers dissipates. Moreover, as the time nears to implement the decision to phase out Swedish nuclear power plants by 2010, industry pressure to reverse the moratorium on dam building will certainly increase. In the meantime, as the domestic market has shrunk, Swedish construction and equipment companies have shifted their focus to countries of the Third World. Most recently, Vattenfall, no longer able to build dams at home, has embarked on its first hydro project abroad in Laos, the Theun Hinboun. Though the project has received limited attention in Sweden, it can be seen as a direct result of the Swedish dams debate. It is therefore troubling to realize that Vattenfall is engaging in the same kinds of practices in Laos today that the Swedish public resisted for so many years. THE IMPACTS OF SWEDISH DAMS Sweden is a long, narrow country, traversed by the Arctic Circle, some 1,500 kilometres from north to south, and with an average breadth of about 300 kilometres. Along the western border, Sweden shares with Norway a range of mountains where most of the two countries’ rivers originate. While Norwegian

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rivers generally flow north and west into the Norwegian Sea, Swedish rivers flow east into the brackish waters of the Baltic. One of the main characteristics of free-running rivers in these extreme northern climes is the annual variations in temperature and water flow. During the dark months of winter, the flow is radically reduced, as precipitation comes in the form of snow and for the most part does not reach the rivers. As temperatures drop far below zero, riverbeds usually freeze over. Then in the spring and summer the snow and ice melt, causing sudden flooding in the valleys. These seasonal surges bring with them rich deposits of nutrients which, along with higher temperatures and the return of the light, trigger an explosion in the production of biomass both in the water and along the river banks. Floral and faunal life are highly adapted to this dramatically changing climate, and flourish in the valleys that have been likened to ‘elongated oases’. Exploitation of hydro power results in the mechanical regulation of the flow of river water. Because the seasonal variations in flow are a near-perfect mirror image of the fluctuations in demand for electricity, dam building in northern rivers implies reversing the natural flow regime. In the winter when we heat our houses and the river is at its lowest flow, water must be released from the dams to generate electricity. During summer as the river swells, we need less electricity. It is therefore necessary to store water from the summer season for the following winter in huge storage reservoirs, usually in the uppermost parts of the river basins. Suorva and Porjus dams were the country’s first examples of this model, which was repeated in river systems throughout Sweden. When a dam is built, it creates an obstacle across the mainstream, inundates an area upstream, and reverses or levels off the rate of water flow downstream. Beautiful places are desecrated by excavations, dumps of rock and debris from tunnels, and power lines. Streams and rapids, forests and pastures are flooded by reservoirs lined by lifeless shores. The aesthetic damage is perhaps the most obvious, and concern about the destruction of beautiful places dominated the first few decades of the Swedish dams debate. By the 1960s, though, public attention turned increasingly to the impacts on these unique biological systems and on the people living in the areas. What, then, have been the impacts—ecological and cultural—of hydro-power development in Sweden? One direct impact is that the dam wall hinders the migration of fish. Dams in Sweden have been the major cause of the near total elimination of wild populations of salmonids, like salmon and trout, by obstructing their migration routes to spawning grounds. These species are highly dependent on fast-flowing water and gravel beds for laying their eggs. Reservoirs tend to flood or dry out these natural habitats, or replace them with stagnant water. In undammed rivers, spawning occurs in different periods of the year: for example, in spring for grayling (Thymallus thymallus), and in autumn for salmon (Salmo salar) and sea trout (Salmo trutta). Depending on the season, each species chooses specific areas in which to lay its eggs according to natural annual variations in water level. Changed flow regimes can thus cause severe damage to reproduction, even in downstream rapids that are not directly affected

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by dams. As salmonids follow the same migratory routes each year, disturbing the habitat has usually meant wiping out a given population. To mitigate the effect of dams on fisheries, Swedish power companies have been obliged to build fish ladders to allow salmon and sea trout to pass the dams and reach their spawning grounds. These are usually constructed at dams nearest to the river mouth where unexploited tributaries upstream can provide habitat for breeding. An example is the fish ladder at Stornorrfors Dam on the Ume river, located just downstream of the point where the free-flowing Vindel joins the Ume. Salmon and trout swim from the Baltic past Stornorrfors and lay their eggs along the Vindel. Power companies must also breed and release fingerlings to compensate for the reduced natural populations in the damaged streams. These measures have limitations, however. Domestically bred fingerlings are genetically weaker than their wild cousins. And both ladders and breeding programmes are designed to maintain industrial fisheries in the Baltic Sea, not to compensate local fishers living along the dammed rivers. Moreover, ladders do not work for all species of fish. For smaller species such as whitefish, another salmonid with the instinct to migrate but which lacks the power to navigate the artificial passage, ladders are of no help. Occasionally, because of location or design, even salmon are unable to use fish ladders. And of course, in the majority of Swedish rivers that are heavily exploited by series of dams, migratory fish populations have simply not survived. Unregulated shorelines along northern rivers produce more than twice the amount of plant life as the surrounding boreal forest, making river corridors important sources of food for mammals and birds. Hydro-power production necessitates an alteration in the natural variation in flow to suit electricity demand. This usually means the reduction or elimination of the spring flood and the subsequent disappearance of the natural fertilization process. Unflooded shorelines downstream from dams produce only a fraction of the biomass, thereby also reducing the food supply for a whole range of creatures. With changed flow regimes, animals that depend on flowing water are disturbed; if wetlands are dammed over, bird life is harmed. (These findings are supported by the work of biologist Christer Nilsson at Umeå University.) Inundation is probably the most damaging aspect of dams for wildlife, however, as it causes habitat to disappear. Flooding of vast areas of land also brings about a considerable deterioration in water quality. Nutrients like phosphorus and nitrogen, minerals such as iron, and organic substances are leached from the soil, mostly during the first five to ten years. In the peatcovered areas prevalent in northern Scandinavia, there is leakage of heavy metals, especially mercury, which accumulates in fish and may also spread to fish-eating animals. Since the Chernobyl nuclear accident in 1986, when central Sweden received a significant dose of radioactive caesium, studies have shown that higher levels of caesium occur in regulated rivers. A likely explanation for this is that since both the water and most of the suspended solid material is retained in the reservoirs, the caesium could be taken up by the aquatic organisms instead

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of being flushed out to the Baltic Sea, where much of it is trapped in the sediments. Another aspect of water quality that is lost with dams is the aeration function performed by rapids. The rivers’ natural ‘water treatment plants’ lose the capacity to decompose organic pollutants where the rapids have been tamed. One of the main arguments in favour of dams in Sweden has been that they have created jobs in the area. It is true that the massive construction sites created a local employment boom for a limited number of years. Yet dams also destroyed livelihoods that had been based on the living rivers—such as agriculture, forestry and fishing. A finite sum of cash or land could be provided by the state as compensation to individual families for flooded homes or farms, but this did not replace the permanent loss of livelihood. The cultural impacts were the most dramatic in the case of the Sami, most of whom traditionally earned their living from reindeer herding and fishing. They are indigenous people of northern Norway, Sweden, Finland and north-eastern Russia whose lifestyle has depended on the intact boreal ecosystem. Industrial forestry, mining and hydro power have all contributed to the undermining of traditional culture. Dams have affected the herders in a number of ways, spoiling grazing pastures, calving land and migration routes. Regulated rivers tend not to freeze over completely, making it impossible to move the herds along the ice in winter. Most transport today must be by truck. The fisherfolk have suffered not only from the crash in fish populations, but also from the fact that debris accumulating at the bottom of reservoirs damages fishing nets. It may be impossible to compensate for the cultural losses inflicted on the Samis throughout the hydro-power era. In 1984, Vattenfall paid damages to Sami communities after the raising of the Suorva Dam. The impacts will last for ever, but the people had to accept a one-off payment. Incredible as it may seem, ten years later the tax rules changed and compensation payments came to be considered as business income. They were taxed at 50 per cent. A BRIEF HISTORY Historically, hydro power was closely connected, not to the production of electricity, but to the operation of flour mills, ironworks and saw mills. The construction of hydro-power plants on a large scale was coupled with rapid industrialization during the last decades of the nineteenth century. Initially, sites were selected relatively close to specific energy-consuming industries. Porjus, for example, completed in 1914, was built to supply the railway that transported iron ore from the Swedish mines to Narvik, Norway. The water legislation in place at the turn of the century served to protect riparian farmers against flooding by keeping the main watercourses unobstructed and maintaining their natural flow. This law, the 1880 Water Rights Decree, constituted an important obstacle to the emerging hydro-power industry. In 1906, a new water rights bill was proposed. It became the focus of a political battle between those in favour of dams (such as mill-owners and electricity power producers) and those against (farmers and fisherfolk) for more than a decade. It

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was finally passed in 1918, opening up the way for massive hydro development in Sweden. Thereafter it became possible to expropriate water rights from landowners in order to facilitate the rational utilization of the power of falling water. The new law established so-called Water Rights Courts which were given the legal power to approve or reject projects and to set the conditions for their construction and operation. The concept of nature conservation was not yet on the public agenda. This was also reflected in the law, which paid little attention to impacts other than those that could be measured directly in economic terms. The Swedish dam-building era began in earnest in the 1920s. It was after the end of the Second World War, however, that Swedish manufacturing industry experienced a boom, and hence a dramatic increase in demand for electricity. There followed during the 1950s and 1960s an intensive period of dam building —the glory days of the Swedish hydro-power industry. While the hydro-power companies had been able to work virtually undisturbed for several decades up to then, growing opposition was noticeable by the 1950s. The first to voice an objection were an elite group of scientists, top lawyers, and others with prominent positions in society. Their arguments were mainly aesthetic, focusing in particular on streams at the most beautiful sites in the mountains of the far North. The opposition against new dams started to be organized during this period. It was already clear at this early stage that there would be no legal basis for a successful fight against new dams, as existing legislation was essentially rigged—designed to facilitate rather than control hydro-power expansion. Therefore, the opponents’ only option was to challenge the hydro companies in the political arena. In 1954, a committee with representatives from the Swedish Society for Nature Conservation, the Swedish Tourist Association and the Society for Local History compiled a preliminary priority list of rivers that should be protected from dams. A revised version of this list was used as a starting point for negotiations between Vattenfall and this semi-official grouping of Swedish conservationists. Chairing the meetings was Dag Hammarskjöld’s brother Bo Hammarskjöld, a provincial governor who was seen to be a neutral figure, respected by both sides. There was no Sami representation on the conservationist side. After lengthy discussions an agreement was reached in 1961: the famous ‘Peace in Sarek’, so named because several of the disputed areas were in and around Sarek National Park. Though the Peace in Sarek did not cover all Swedish rivers, the basic idea of the agreement was that if Vattenfall would promise to stop exploiting some areas, the conservationists would refrain from opposing dam building in others. It was a political compromise between an elite group of conservationists and the power industry. The power of this pact can be judged by the fact that river exploitation during the subsequent decades followed the terms of the agreement, with one important exception: the Vindel river.

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VINDEL: A NEW KIND OF POLITICS One of the rivers that the conservationists ‘gave away’ for exploitation with the Peace in Sarek deal was the Vindel, along with its tributary, the Lais. Vindel is a tributary of the Ume river, which by the 1960s was already heavily exploited. Needless to say, the Peace in Sarek was agreed upon without consultation with local people living near the rivers that had been surrendered to Vattenfall. When, in 1962, a plan for the construction of 12 power stations and 5 storage reservoirs along the Vindel was presented at a public meeting in Sorsele, the folly of that agreement became clear. Within a few years an intense public debate emerged that was to wrest the fate of the rivers from the hands of a few prominent conservationists and turn it into an issue of local, valley-based politics. I was 7 years old when the plans became known, and grew up in the middle of this fight. The plans to dam the Vindel river divided people in the valley, as in the entire country, into two groups—those who opposed and those who supported Vattenfall’s plans. It was a war between the ‘good’ and the ‘evil’ on a very personal level. Families and villages were split between the two standpoints. Mine firmly opposed the plans. Very few remained neutral. The main arguments put forward by the local dam supporters were based, above all, on hopes for more jobs and money for the region (including compensation to individual landowners). Among the early ‘river savers’, other arguments were raised: that the dams would lead to the destruction of nature and fishing resources, and to flooded homes and land; that the destruction of nature would last for ever, or at least until the next Ice Age, while the benefits in terms of new jobs would last only for the short period during which the dams were being built; and that we had a responsibility to future generations not to destroy all our natural resources. In 1967, amid fierce public debate, a committee of Members of Parliament responsible for the Vindel case made an excursion to the area. They were met by demonstrators from both sides, but it was a group of villagers from Adolfström that made the deepest impression on the politicians. Adolfström, located on the banks of Vindel’s tributary, the Lais, is a small village that would have been inundated by one of the storage reservoirs. It would have been covered by 40 metres of water. The villagers refused point blank to leave their homes, and warned that the government would have to use violence to get them out. ‘We refuse to move and we will stay here until the King himself throws us out’, they declared. Parliament decided to leave the final decision about the fate of the Vindel to the government. This eventually came in April 1970. It was a negative outcome for Vattenfall. Yet as part of the same decision, Vattenfall was ordered to draw up plans for the development of hydro power in several other rivers instead; among these, the untouched Kalix river in the far North. The animated debate about the Vindel had been a source of inspiration for people throughout the country. And almost immediately, activist groups started to oppose Vattenfall along the Kalix river. In fact, the fight to protect the Vindel river was an important starting point for the environmental movement in

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Sweden. We could see how interest in the environment was growing among people in general, and that nature conservation was no longer the exclusive domain of a few educated specialists. During the first half of the 1970s many new projects met with opposition from local activists. If the 1960s were characterized by the lively debate over the Vindel, rivers like Ljusnan in central Sweden and Kalix in the northernmost part of the country were in focus during the following decade. In 1968 a group was established to prevent the damming at Hälla in Västerdal river. Local struggles lasting years led, in a few cases, to cancellation of projects. Ljusnan was already heavily dammed, but the disputed portion is still flowing free and Hälla Dam was never built, while the Kalix remains one of Sweden’s four undammed rivers. THE RIVER SAVERS Such victories were made possible by the establishment in 1974 of an inter-basin network—Älvräddarnas Samorganisation, the River Savers’ Association—to facilitate cooperation among the different activist groups towards a common goal: to stop further exploitation of all Swedish rivers. The creation of the association was necessary to counteract the ‘divide and conquer’ strategy that Vattenfall had adopted after it had lost the battle over Vindel. The agency, along with other dam proponents, tried to play one basin against the others; a strategy that could work only as long as groups throughout the country were not well organized. Thus, one of the main objectives of the River Savers was to create a platform for common information and activities: statements, petitions and lobbying, as well as publications. The journal Älvräddaren (The River Saver) continues to be a vital source of information for our members. The existence of the association has undoubtedly been a key factor in the long political debate and the eventual moratorium on dam building in Sweden. A turning point occurred in 1979, when local people in Storsjökapell village blocked a road to prevent bulldozers from reaching Sölvbackastrommarna, rapids in the upper Ljungan river. Their strong feelings made a deep impression on the Swedish public. One of the most prominent opponents, Tycho Loo, a middle-aged carpenter, travelled to Stockholm the following year to urge parliamentarians to drop the plan. He told the national press: ‘If they take Sölvbackastrommarna, then I shall finally lose my belief in Sweden’s democracy’ (Dagens Nyheter, 4 November, 1980). These rapids were also saved. Though only one of numerous battles during those years, the campaign to protect Sölvbackastrommarna convinced the public that the average river saver was not a ‘long-haired, screaming professional demonstrator’, as the dam proponents suggested, but an ordinary person merely defending his or her home. This was a crucial realization because—as in the Alta struggle, which was raging in Norway’s far North by this time—the hydro industry took every opportunity to claim that the opposition was coming from city-based instigators who were out of touch with the local realities.

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During the 1970s, the Swedish government undertook two large studies of the rivers in the northern and central parts of the country. Both environmental value and energy-production potential were assessed in their reports. The results of these surveys were used as background information for the so-called Physical Plan for Sweden, which was adopted by Parliament in 1977. According to the plan, a number of rivers and streams were given an informal protected status. Much of the work within the River Savers’ Association was aimed at adding further rivers and streams to this category, and for many years, the list of protected rivers grew. With public pressure mounting, a further step forward was taken in 1983 when the old 1918 water law was finally replaced. While the previous legislation had as its primary objective to promote hydro exploitation, the new law gave greater weight to environmental issues. The most important step came, however, when the Natural Resources Act was approved in 1987. This Act explicitly prohibits the construction of new dams for hydro power in those rivers that had been designated for protection in the Physical Plan for Sweden, including the last four large free-flowing rivers: the Torne, Kalix, Pite and Vindel rivers. In fact, not only is construction of dams in new sites prohibited, but so is enlargement of existing dams that can cause negative environmental effects. For most of the streams and rivers that are out of bounds for hydro exploitation, this protection extends to both the mainstream and all the tributaries. Who was engaged in the rivers debate? Which groups were for and which were against the building of new dams? These are not easy questions to answer. As indicated above, among ordinary people in the river valleys, as well as in the country as a whole, you could find representatives of both sides. I am not aware of any sociological study on this matter, but certainly you could (and still can) find the most active opponents among the large group of Swedes who are genuinely interested in nature. And certainly, the majority of Sami people have been opposed to hydro-power development because their culture has suffered so severely from the dams. The proponents of dams were people who gave economic progress top priority. This was true at the local level—the period of dam building was considered, at least seen from the outside, as a time of prosperity in the region - and from a national perspective. They stressed the need for inexpensive electricity to stimulate economic growth. Powerful actors on the stage included trade unions, such as the Constructors’ Union, supported by the Swedish Confederation of Trade Unions (LO), and the Swedish Central Organization of Salaried Employees (TCO). In all cases, they clearly defended the professional interests of their members. The main arguments in the debate have evolved over the years. Aesthetic considerations have, of course, been among the most appealing arguments since the beginning, though with decreasing weight over time. Recently, more attention has been placed on the fact that rivers are complex ecosystems that are severely damaged, or even destroyed, by damming and regulation. The hopes for new jobs were tempting at first, especially during the 1960s and 1970s. With

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time, though, it became clear that the increase in jobs due to construction of new dams was a highly temporary phenomenon. After a dam was built the number of jobs in the affected area dropped dramatically, and the promised ‘positive injection’ for the region did not materialize. The potential value of tourism to local economies was to a large extent neglected during the hydro boom years of the 1960s and 1970s. Yet today tourism has emerged as one of the most viable growth areas for many economically depressed regions in the North. The profound negative impacts of hydro development on the Sami culture has also been more widely recognized in recent years. Looking back, then, how can we explain the effective moratorium on dam building that exists today in Sweden? Certainly, it is a response to the tremendous strength of the Swedish river conservation movement during the last decades. Yet, it is important to remember that most (70 per cent) of Swedish rivers are already exploited for hydro power. And several of the unexploited rivers would, in any case, be expensive to dam. Thus, in a sense, one might well ask if the word ‘success’ is appropriate at all.

4 THE DAMS INSIDE Maria Vedin

THE THREAT OF COLLAPSE In the late summer of 1993 northern Sweden experienced unusually heavy rains. River valleys all over Norrland were flooded, and reports poured in about rising water levels that exceeded all predictions. The material damage to houses and summer cottages, boats, docks and roads dominated the news for several weeks. But as the deluge continued, a serious new problem was emerging. The reservoirs that regulated these rivers were all full, and though the power stations were being run at full capacity, water was flowing over the dams. Reports of damage from Porjus and Suorva came in, and the power company Vattenfall started round-the-clock surveillance on the status of these dams. The scenario of a broken dam at Suorva was described in detail by the mass media. The regional authorities’ emergency plan was publicized in the daily papers. On television, senior executives from Vattenfall assured the public that the dams would withstand the growing pressure. But this offered us little comfort. If a dam did break, the whole of the Lule river valley would be inundated. Villages would be swept away and, on the coast, the cities of Boden and Luleå would be under water. For people in Jokkmokk, where I now live, this was a question of survival. We are directly downstream from the Suorva Dam, and so the threat of calamity loomed literally over our heads. Our apprehension evoked memories of past hydro dams. When I was growing up in the small village of Ligga by the Lule, there were already several dams in the river. This was during the late 1950s and, in addition to Porjus and Harsprånget, there was a third dam in Ligga, a few kilometres away. In the family, we spoke about yet another dam that was supposed to be built in Messaure, and about the huge reservoir that would flood the valley behind it. Downstream from us was the little village of Niorravuolle, which was to be totally flooded. I kept a picture of this cluster of houses in my mind’s eye that remained long after the water was standing high above it. Only because our village happened to be located on higher ground did we avoid resettlement. But the threat to our daily existence was there already in my early childhood, and it took the concrete form of this deserted, inundated village.

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With each new day of rain, our uneasiness grew. Added to this image of a broken dam and all its potential effects on the region, however, we sensed a slower and more insidious danger. This is because what we see around us every day has an impact on the structure of our emotional lives, and on the way that we perceive the world. Those of us who make our homes and lives up here have an inner image reflecting the obstructions on the rivers. The controlling mechanisms are within us. In sharp contrast to the rugged, untouched scenes we remember from our childhoods, the mental landscape has been transformed by the outer, and so we are blocked by dams inside. With the high water level that summer, our tenuous relationship to hydro power became plainly visible. The dams not only regulated the flow of the rivers, but also controlled our personal safety. We realized how utterly dependent and helpless we were. Just as the power companies had provided the foundation and sustenance of our lives, so they might just as easily cause unthinkable disaster. It became evident that our lives and our identity were tied up with the utilization of hydro power; that no one who remains in this place can choose to stand outside the hydro culture. Over most of this century, we have watched and participated in the exploitation of our resources—our land, our homes—for the benefit of the South. Industrial tradition in northern Sweden has since the late nineteenth century meant a one-way distribution of natural resources like timber, ore and hydro power to the South, where the owners of capital have their headquarters. In many respects, Norrland has been treated like a provider of raw materials; in effect, a Swedish colony. Many of the workers, employees and managers who actually built the power stations did not remain in northern Sweden. They came here to work on these projects and, when their work was complete, they returned home. The reshaping of nature was planned and carried out mainly by visitors, not by native inhabitants. This pattern has been repeated frequently in Sweden in the utilization of natural resources for large projects. There is not enough specialized labour in the sparsely populated regions where natural resources are abundant, and so local people are hired only for unskilled jobs. The patriarchal character of Vattenfall has also shaped our regional identity. The structure of the company has strictly defined levels, each with a firm system of authority. From top to bottom, titles are of the utmost importance. In the earlier days of dam building in northern Sweden, the company was organized along military lines. Chiefs were called ‘officers’, and logbooks of working hours and records were kept on each worker, just as with recruits in the Swedish army. In villages like Porjus during the construction era, there was marked class distinction between manual local workers and white-collar ‘imported’ staff, as well as clear stratification within these groups. The major line, however, was drawn between labour and bosses. There were even two canteens in Vuollerim at the time that the dam at Porsi was being built, one for each category of employees. The way Vattenfall governed its workforce influenced our perceptions of the company, our relationship with it and our perceptions of ourselves. The company

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has had an aura of supreme, unquestionable authority; a god-like status in the consciousness of ordinary northern people. Protests either against job cuts or against new dams were never taken lightly. In this region, to go against Vattenfall was like challenging God. Our attitude to hydro power as such has been determined by our ambivalence towards the company and by the precarious situation in which we find ourselves today. Little of the very large profits from the forests, mines and rivers stayed up here. And so we are torn. On one hand, we in Jokkmokk would like to keep what we can of Vattenfall s goodwill, in the form of 281 jobs and a constant power supply. On the other, we have to cope with all the negative effects of the dams: not merely the degradation of nature and of our culture, but also a burning resentment that so few of the benefits stayed here in the North. Much of this anger and shame with which northerners must now contend derives from the fact that the real long-term costs of this development have only started to become clear to us. For these reasons, when the Suorva Dam threatens to overflow its banks, there is a corresponding fear of collapse of our internal power systems. It is as if we anticipate that an inner breakdown will follow the outer. If the dam up there in the mountains cracks, the faith in Vattenfall as a provider of security in the form of work and energy could trickle away along with our very identity. PORJUS: THE PROTOTYPE The country’s first large dam, built at the beginning of the century, set patterns that would define Swedish hydro culture. When the plant workers came to Porjus, there was only a newly established settlement there with a few inhabitants. The Sami had their reindeer-herding land in the area, but their camps were some 100 kilometres upstream along the Lule river. The place was therefore considered to be more or less uninhabited, especially when seen from the perspective of planners in Stockholm. The Municipality of Porjus was established solely because of hydro power, and manpower was recruited to undertake this gigantic project. Porjus was the first real hydro workers’ society in Sweden, with thousands of male labourers living on their own, as there were no facilities for families to stay with them. This arrangement would be repeated during the whole dam-building era. Barracks for Vattenfall workers became small towns that mushroomed around the dam sites along the Lule valley, only to be torn down a few years later when construction was complete—as in Harsprånget in the 1950s and Messaure at the end of the 1960s. Porjus village has remained only because the administration and management of energy production through the whole Lule river is located there. The construction of the dam at Porjus marked the transition to an era in which industrial demands for energy were given precedence over existing cultural traditions. A single price-tag was placed on the loss of reindeer-grazing lands, fisheries, farms and forests. But apart from immediately visible impacts like flooded lands and destroyed fishery resources, there lurked other less

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tangible effects of industrialization’s transformation of the region. A whole way of life died out with the generation that did not grow up with hydro power, and for decades very little thought was given to this enormous loss. Porjus had never been a target of debate about the natural and cultural values that the dam destroyed. But Suorva, whose construction began in 1919, would flood the newly established Stora Sjöfallet (Great Waterfall) National Park. Objections were raised, and this second dam became a focus of some national debate. On the whole, however, a united choir of politicians, industrialists and even nature conservationists considered that the impacts on Sami life, fishing and log-floating were outweighed by the possibilities for prosperity that this ‘white coal’ would bring. The dam was to provide the Porjus power plant with a more regular water flow and thereby increase its electricity production. Porjus and Suorva were paving the way for the total exploitation of the Lule, which resulted eventually in a ‘staircase’ of 15 dams. THE SAMIS At the time of the construction of Suorva, the Sami village of Sirkas was inhabited by 34 families. Of these, 17 families with 3,200 reindeer were directly affected by the dam. In another Sami village, Sörkaitum, there were approximately nine families with about 3,000 reindeer that were directly affected. From a national point of view, it was a question of a minority that had to stand back in Sweden’s national interest. Per Ola Utsi, reindeer herder, craftsman and photographer, now lives at Västra Strand, close to Porjus. The crest of the Suorva Dam was raised three times after its original construction to increase generating capacity. Some Sami families were forcibly resettled four times, as the water level rose; among them were Utsi’s relatives. The first two regulations took place before Per Ola Utsi was born. In 1969, when the shores of the lake were being cleared yet again, he felt a need to document the devastation, and started to take photographs. Utsi’s slides show an inundation Noah would have recognized, photographed from a boat passing over what used to be people’s homes. The material and spiritual losses are highlighted by his reflections on the fourth and final regulation of Akkajaure, the gigantic reservoir behind Suorva Dam. Two decades on, Utsi reflects: The kåta (Sami huts) down by the lakeshore had to be moved higher up on the slopes where the water couldn’t reach them. It was hard to find suitable places for huts there, and the villages became more spread out. Previously, we lived closer to one another, but the contact among us deteriorated. The best kåta sites had been down by the lake where there was grass and flat ground, before the flooding. Higher up, there were simply not as good sites. The old boat places also disappeared—sometimes you didn’t know where to dock—since the erosion from the changing water level had made the beaches high and steep. And because the lake had become so much

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bigger, it was also much more dangerous to be on it in a boat. A lot of debris from the clearing of the beaches would get caught in our fishing nets, and would also break them. My mother thought that we should fix them, and she did so. But for us younger ones, we thought—achh—we’ll just buy new nets. There were also small things that disappeared, those things that almost no one thinks about. My mother’s washing place down by the lake, for example, disappeared under the water. I know that she missed it terribly. And when we are up there in the summers and the children go to play in the sand by the beach, it is hard for them to understand that the beach line is at one place one day, and the next day shifts much higher or lower. Where they played the day before may be under water tomorrow. The money from Vattenfall could not compensate the kind of losses that Per Ola Utsi describes. An irreplaceable part of the Sami culture was lost for ever because of these dams on the Lule river. In the tributary, Lilla Lule, the Seitevare Dam inflicted similar material and spiritual damage on Sami culture in the valley during the 1960s. The various forms of resource exploitation—hydro dams, logging, mining, road building—have eroded traditional Sami life. Yet it is still possible to practise reindeer herding in the Jokkmokk area, and some 300 Samis continue to do this. The landscape has become so fragmented, though, and economic pressures are such that the old methods do not work any more, even if people would like to use them. Herding has had to become a capital-intensive, and in many cases, highly mechanized enterprise. Today the reindeer are moved between the mountains and the forested lowlands in large trucks. The herding of the animals before slaughter and marking is, to a large extent, done using helicopters. Snowmobiles have long been an established working tool. And in the summer, many reindeer herders use motorbikes and four-wheelers. The mechanization of reindeer herding makes it possible for an individual to gain an income from the business, but also has a down-side in the form of injuries at work, high demand for capital and an impact on nature that the old methods did not have. Nevertheless, reindeer herding lives on in the various forms that the altered environment permits. Among Samis today, there is a consciousness and a will to preserve the culture manifested in a growing interest among young people in handicraft and reindeer herding, and in a continuing debate and discussion within the ranks of the Samis. They have at least managed to keep a significant part of their culture. DESCENDANTS OF THE PIONEERS But what was the outcome for the rest of us up here who are not Samis? Did we have a cultural identity that was transformed or disappeared when hydro power arrived? Are we Swedes who remain up here totally integrated into the hydro

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culture? To answer these questions I must describe another place in Jokkmokk Municipality, Vuollerim, where the construction of the Porsi power plant changed the landscape in the 1950s. Unlike Porjus—and this is an important contrast—Vuollerim was surrounded by many small villages, inhabited by people engaged in forestry and agriculture, whose roots went back to the pioneer era of Lappland. Each family might have had a few cattle, maybe a horse, and they supplemented their incomes with logging or log-floating. Many of the principles of self-sufficiency were still alive in their pioneer traditions, which dated back several hundred years. When the construction of Porsi began, there was a sudden expansion in the Vuollerim area similar to the one that had occurred in Porjus at the beginning of the 1900s. From about 300 inhabitants, the population of Vuollerim grew to over 2,000 in the early 1960s. The demand for local manpower increased dramatically, and in the villages around Vuollerim people dropped what they were doing and took jobs with Vattenfall. Eivor Auna, born and raised in Koikul, some 30 kilometres from Vuollerim, has childhood memories of what happened when hydro power came to her area. You burned or threw away the old tools. They would not be needed any longer, now that you had a job. You stopped with the cows and the horses, and the meadows didn’t need to be used either if you didn’t have animals needing hay. Many people sawed up their barns into planks and built garages for the car they bought with their new salaries. At a stroke, the old life disappeared and you started to live in the money economy of the industrial society. Many moved into Vuollerim, but some stayed in the village and took the car back and forth to the job. What Eivor Auna recounts is as clear a break in the traditional way of life as the one which the Samis experienced when Porjus and Suorva were built, but without the dramatic cultural symbols. The cows and horses, the rakes, hay fences, log cabins, and the knowledge that was at the foundation of the self-sufficiency that had characterized village life began to disappear without anyone giving it much thought. It could be said that among the pioneers’ descendants there was a greater willingness to be sucked into the new industrial culture than there was among the Samis. Villagers like those described by Eivor Auna perhaps identified themselves more with the new Swedish salaried workers than with their predecessors, the settlers. The culture of the settlers did not have the same long tradition as the Samis, which was in some ways solid enough to withstand the pressures of these tremendous structural changes. People simply abandoned everything they had and were, and stepped into what they imagined to be a prosperous future. The construction of Porsi triggered a shift in cultural identity. For a time those who had jobs at Vattenfall could enjoy the benefits of industrialization. They could buy cars, build their own houses, have summer holidays. For some decades, the material security helped to suppress the issues of roots and traditions. It was not

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until construction on the Stora and Lilla Lule rivers was finished in the 1980s that people began to notice the problems. Since industrialization in the municipality had been narrowly focused on hydro power and logging there were no other businesses to fall back on. Neither Vattenfall nor the forestry companies had reinvested any of their profits in the region. All the profits yielded by the rivers and forests were diverted to the coast. In the Municipality of Jokkmokk today, as in much of the North, the official rate of unemployment is 14 per cent, while unofficial estimates—which do not include people involved in the myriad of state-funded make-work programmes— are many times higher. Even if young people study to get an education in high school or college, the chances of getting a job in Jokkmokk are small. Vattenfall’s workforce engaged in the maintenance of buildings is down to an absolute minimum, though even this constitutes a significant contribution to the municipality’s income. We are wrestling with the ‘poverty’ while the profits from hydro power pass us by. True, Jokkmokk contributed to the nation’s well-being with its white coal and green gold, but what did we get in return? A gnawing feeling of shame at having sold out our natural resources, abandoned the old settlers’ culture and been left empty-handed, often without a job or any hope of new, secure employment. That the pursuit of material progress has a downside is nothing new. But the possibility that the costs to our land and to ourselves might be greater than the gains was hardly considered during the hydro era. It is only now, in our post-industrial hangover, that this realization has started to dawn on us. PERSONAL AND COLLECTIVE LOSSES In 1961, my family moved away from Ligga to settle in Klubbudden 20 kilometres from Jokkmokk along the Lilla Lule river. At first we did not notice the effects of hydro exploitation. The log-floating continued on the lake system, and Seitevare Dam, which was situated several tens of kilometres away from us, did not influence our daily lives. There were still fish in the lakes, sufficient to fill our storerooms. We had got rid of the cattle, but growing potatoes provided a much-needed addition to the household economy. My father worked as a logger and my mother took care of the home and the children. Yet you wouldn’t call either of my parents representatives of industrial society. Admittedly, many of the traditions had already disappeared, but life at Klubbudden was still based on the pioneer culture. Without supplementing our diet with fish, berries and potatoes our family would not have been able to make ends meet. The external environment was important not only because of what it provided in the form of food, but also as a place to live in, to coexist with. During the summers we swam in the long, shallow beaches. The autumn ice, before the snow came, was like a huge skating rink, where you could practise the sport of hitting burbot fish on the head through the ice with a wooden club. Around us, nature was filled with playgrounds, places where we children felt safe. Then at the end of the 1960s, white marks appeared on the trees by the

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beaches: rings of paint around their trunks. The level of the lake was to be raised just over a metre by the Randi Dam, only two kilometres from the village. For us, Randi meant the disappearance of our play areas, and for the adults, their fishing grounds. My family’s household economy changed drastically because fisheries were wiped out. The old docking places were no longer usable, and new ones were hard to come by because of the erosion of the banks and the constantly fluctuating level of the lake—which was, of course, no longer a lake but a reservoir. In the wintertime, the old roads over the frozen water were unusable owing to thin ice. At times the east winds made waves which were too high for our boats in the open water, created by the torrents released from the dam. Our natural connection to the lake was gone, never to be regained. How do you measure such things? Hardly in kilowatts. What did industrial development in the municipality really mean for the individual in terms of values like your feelings for your home, your relationship to nature, your self-esteem? There are probably as many answers to this as there are inhabitants in Jokkmokk. Shared by all of us, though, are the overwhelming sense of loss and a rootlessness, more or less openly expressed. For me, the break occurred when the lake in front of my family’s house was regulated. This body of water had been an extension of myself, my personality, my identity. As I see it, there is not much in our present situation that can compensate for this kind of loss. Normally, we do not want to recall the places, the animals, the land, the trees, the sounds and smells that have simply vanished. On a day-to-day basis we prefer not to think very much about such things, unless the threat of a broken dam awakens the memories—the private and the collective ones. The electricity and fleeting job opportunities are a poor excuse for the destruction. Paradoxically, it is the natural environment from which the municipality now wants to earn money. Tourism has become an important business, and the local government’s marketing strategy emphasizes the wilderness concept and the region’s cultural heritage. At Ajtte, Jokkmokk’s Sami and mountain museum, tourists can look at the relics of the settlers’ tools, and visit exhibitions on the ancient self-sufficient ways of the Sami. We would very much like to create the impression of an interesting and tourist-friendly culture, failing to mention that this culture has all but disappeared. It has been dammed and drowned. The true picture of how people live here—with the threat of unemployment hanging over them and dependent on state welfare—would not appeal to tourists. You can’t sell it, and therefore you don’t say much about it. Together we have supported a deterministic approach to development, and it is hard for us to believe that the introduction of hydro power and its consequences were not inevitable. Having lived so close to the dams, we can barely imagine any alternatives to the route we have taken. This attitude has, over the decades, played into the hands of the hydro-power interests, and for years they had no difficulty in winning support for new plans. It was only the strong people’s movement of the last decades that was able to resist further intrusions.

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THE POST-INDUSTRIAL HANGOVER In a sense, in this huge though sparsely populated municipality—just 7,000 people living in an area of almost 20,000 square kilometres—we have seen the process of industrialization in a compressed form. From an agrarian and forestbased society to post-industrialism in barely 70 years. From the historical building of the Porjus hydro-power plant, to the hectic constructions of the 1950s and 1960s, to the decline of the 1970s and 1980s and to this final phase: minimal personnel operating the Swedish stations, and export of technological know-how to the Third World. Vattenfall is even training African and Asian dam builders at the company’s school in Jokkmokk. Overwhelmed and abandoned, we are now suffering from the hangover that followed the frenzy of the hydro-power era. To create a diverse and environmentally sound future in the municipality, we are forced to discuss how our identity has been shaped by industrial development, to be better able to find a new direction for our region. Our true inner needs, as cultural and biological beings, have to be defined and taken into consideration. Otherwise, we run a great risk of falling into yet another phase of natural resource exploitation… this time, perhaps, of diamonds or minerals.

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Map 2 The Alta Dam

5 THE LAST BIG DAM IN NORWAY Whose victory? Øystein Dalland

We need the terrain around the construction area for a migration route, for spring and autumn pastures and as a nursery for the young animals. During the autumn migration from the coast we need the area for the animals to graze while large herds are waiting their turn to pass through the narrow terrain further south. The new Reindeer Husbandry Act states that if anyone is going to make a major incursion into a reindeer pasture area, the district Chairman has to be warned three weeks in advance. In the case of Alta, when the development started in autumn 1981, no such warning was issued. We were certain that construction work would have to stop because it had not been initiated in a legal manner. We were wrong. (Johan J. Eira, Chairman of the Norwegian Association of Reindeerowning Samis, 1981) Today Norway enjoys the reputation of having some of the world’s strictest environmental regulations and the most far-reaching legislation protecting the rights of the country’s Sami indigenous people. Large infrastructure projects like hydro-power dams must pass through a rigorous process of review and public scrutiny before they can be approved for construction. Norway’s progressive image has been enhanced abroad by the work of the UN Commission on Environment and Development, which was headed by the former Norwegian Prime Minister Gro Harlem Brundtland from 1985. In the international debate, the commission came to represent a more environmentally friendly approach, and made Brundtland and Norway synonymous with the concept of sustainable development. Less well known outside the Nordic region is the terrible political struggle over a dam on the Alta river in the extreme north of the country that lies behind, and is in an odd way responsible for, this green façade. The Alta Dam, with a generating capacity of a mere 150 megawatts, was neither needed nor financially viable. The project was opposed not only by environmentalists and the Sami communities living in the area, but also by the municipal governments,

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fisher-folk, farmers, students, intellectuals, journalists—a whole spectrum of Norwegian civil society at local and national level. This widespread popular resistance to the scheme spanned more than a decade. The state responded to the opposition with the largest police operation in modern Norwegian history. For reasons that are still partly obscure, the government was determined to force this project through. As Minister for the Environment and then later as Prime Minister, Gro Harlem Brundtland firmly supported the dam and, at strategic moments, made decisions that thwarted efforts to stop it. Alta is not a simple story. The dam was completed in 1987 and the cultural and biological damage is done. But as a result of the struggle, environmental regulations were improved and the Sami people were granted more rights, including the first Sami Parliament. Nevertheless, in spite of the awakening of consciousness that the conflict provoked, there are still no guarantees against mining projects, or even further hydro development on the Alta and other rivers. Moreover, as the players in the Norwegian dams industry who were active in the debate shift their focus to the Third World, they bring with them a powerful combination of moves which they learned at Alta—a green image and the experience of how to defeat popular resistance to dams. THE SAMIS OF NORWAY Historical sources indicate that a Sami population has occupied the present settlement areas since the late Middle Ages, although archaeological evidence suggests that Samis were living in Finnmark, the northernmost county of Norway, from at least the first century AD. Almost the whole of Finland was used by Sami hunters in prehistoric times, but with the development of reindeer nomadism in the fifteenth and sixteenth centuries they spread into middle and southern Norway. An approximate estimate (Aarseth 1977) shows that today about 50,000 people regard themselves as Samis, of whom about 30,000 live in Norway, mostly in Finnmark and Troms counties. It is estimated that 15,000–20,000 are able to speak the Sami language. About 2,100 people, or less than one-tenth of the Norwegian Sami population, are wholly dependent on reindeer husbandry. But indirectly the economy and cultural attributes of nomadism give the whole Sami nation much of its identity in terms of language, common history and traditions. Sami reindeer husbandry is a nomadic economy, with the distance between the animals’ winter and summer pastures varying from 150 to 300 kilometres. The reindeer husbandry territory is a heritage of the habitats of previously wild reindeer herds. During spring and summer, the protein-rich dwarf salix, which provides fodder for calves that helps to sustain them through the winter, grows on the coast and in the coastal mountains. In winter, moderate snow cover in the inland plateaus usually allows the reindeer to forage for lichen by digging vigorously with their hooves. In the western part of Finnmark county, migration routes are located between the Arctic Ocean and the Finnish border.

THE LAST BIG DAM IN NORWAY: WHOSE VICTORY? 43

These routes pass through key habitats that can be used by the animals as stable pasture during icy conditions, sheltered areas for breeding, or for wading. Groups of Sami families using common pasture areas and other natural resources were called ‘Sii’da’, and these varied in size from just two or three families up to groups consisting of a few hundred individuals in 20–30 families. Although this cooperative living system has been modified by technological changes in recent years, Sii’da groups are still partially linked by the use of natural resources far from their present homes. Transactions and housing settlements also follow the migration routes all year round. Modern intrusions such as reservoirs, power plants and transmission lines, roads, military zones, tourist attractions and general settlement areas have, over the last 50 years, caused severe fragmentation and degradation of these ecological systems. If it had not been for the public resistance, the original design for the Alta Dam would have resulted in the flooding of Masi, a key village in the heartland of Sami territory. Masi was spared, but the dam wiped out timeworn reindeer migration routes. It also seriously affected a canyon with unique vegetation and spectacular salmon and bird life where historical artifacts from millennia of human settlements would probably have been found. The archaeologists did not have the opportunity to study the area. So we shall never know what was lost. THE FIRST PHASE OF RESISTANCE The struggle of the Norwegian people to stop the construction of the Alta Dam took place in two distinct phases, the first beginning in the late 1960s and the second in 1978, when Parliament gave the project the green light. The initial ‘discovery’ of the Alta project happened quite by accident. A Sami teacher from Masi village, Trygve Lund Guttormsen, was visiting a regional engineering office in Narvik in the mid-1960s to obtain maps for a small drinking-water supply scheme that he was starting in Masi. During this visit he discovered a dotted line drawn on a map at a level of about 300 metres, indicating the upper limit of a vast reservoir. This was the first clue of what was coming, but nothing more was heard until 1969. In that year, Guttormsen s suspicions were aroused again after he had received several reports from his neighbours who had applied for permission to build new houses. Their applications were turned down by the county agricultural office without reasonable explanation. It turned out that a new rule had been issued forbidding construction in the area because it was to be flooded by a dam. The planning process for the Alta Dam had evidently been underway for years without any public consultation, although formally the project was still just ‘under preliminary investigation’. The design of the dam had already been drawn in detail, indicating a reservoir about 40 kilometres in length up to Kautokeino. The compensation to be paid to the Samis had also been estimated.

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This was the situation when Guttormsen, an elected member of the municipal planning committee, raised the Alta river case with the local government and in the district newspaper. The issue immediately grabbed national attention because 1970 happened to be the first European Year for Conservation in Norway. This year also corresponded with the start of a new government Sami housing scheme in Finnmark county, which was supposed to address the fundamental needs of Sami householders—including those living below the 300-metre flood level. The crossed lines of communication were simply too blatant. The Alta conflict appeared on the national political agenda in the summer of 1970. On 26 August in Masi, Norway’s most important reindeer herding village, about 400 Samis greeted a visiting parliamentary committee with placards and a silent demonstration. As a result, the Norwegian Water Resources and Energy Administration (NVE) had to arrange a public meeting in Masi to explain the various options for the development of the Alta-Kautokeino river. The project presented by the NVE included a dam that would submerge both Masi and Mieron villages and a 40-kilometre stretch of the river valley, as well as a number of reservoirs on the mountain plateaus, lake Iesjavri being the most important, and divert water from the Tana river to the Alta. Lake Iesjavri forms the boundary among three municipalities, Alta, Karasjok and Kautokeino. Resistance to the proposed project thus united the populations in these coastal and inland areas. As the Tana river forms the national boundary between Norway and Finland, the latter’s county government also joined the protest, as did Finnish Sami organizations. The Iesjavri basin is central to the rhythm of reindeer herding in the area, with about 40,000 reindeer passing along the valley every year on their way to and from the winter pastures in the South. High parallel gravel ridges (drumlin swarms), oriented in a north-west—south-east direction, determine the reindeer migration routes (Dalland 1972). The Samis feared that even moderate regulation of the lake (2–20 metres) would seriously disturb the migration patterns by creating ice barriers and inundating pastures. Protests at this stage forced Parliament to drop the Masi reservoir project in 1973. And in 1976, national and international pressure forced the authorities to drop the Iesjavri reservoir as well. CIVIL DISOBEDIENCE VERSUS STATE POWER Between 1975 and 1978, the municipal governments of Alta and Kautokeino twice rejected the hydro project, and Oslo postponed its plans to dam the Alta for a number of years. But in 1978, the Parliament decided to build a scaled-down version of the hydro scheme—a 110-metre-high dam in the Alta canyon that would not flood Masi village or Joatka lakes. This historic decision (with 90 in favour and 36 against) was hotly disputed by local authorities, but was confirmed by a subsequent parliamentary assembly. The national environment and Sami organizations, the local fishery organizations and many others joined the protests, as did international environmental and aboriginal peoples’ fora such as the

THE LAST BIG DAM IN NORWAY: WHOSE VICTORY? 45

International Union for Conservation of Nature (IUCN) and the World Council of Indigenous Peoples (WCIP). But to no avail. As it became clear that the pro-dam lobby was determined to force the project through this time, a local public mass movement, the ‘Folke-aksjonen’, or People’s Action, was organized in Alta. The following summer (1979), a protest camp was established in these far northern mountains bordering the Arctic Ocean. Over a period of almost four months, 8,000 people came to support the resistance from all across Scandinavia and Europe, including delegates of indigenous groups and environmental organizations. The protesters lived in tents, made their own bread and were fed by local people with reindeer meat, fish from the rivers, and milk from nearby farms. Their main tactic was to create as much disruption to the construction work as possible—non-violently—by chaining themselves together on the road in front of the machines. The population of Detsika camp, as it was called, reached a peak of 5,000 in September 1979, though the People’s Action maintained a strong presence until October. This was no mean feat as winter comes early at this latitude, and by October the temperatures were dropping and the days were growing rapidly shorter. Building on the momentum of the Detsika action, eight young Sami men and women erected traditional tents (lavvos) on the lawn outside the Parliament building in Oslo on 5 October, 1979 and began a hunger strike. They were continually harassed by the police, and attracted further attention when a Sami lawyer, Leif Dunfjell, claimed that the reindeer herders had not been given the required statutory notice of the project. With public pressure mounting, Prime Minister Oddvar Nordli announced a six-week delay in the construction work at Alta starting on 15 October, pending a re-examination of the whole case by the government. Encouraged by this, the Samis abandoned their hunger strike and the protesters in the far North closed the camp before winter set in. Six weeks stretched to more than a year. Construction was halted during 1980 as the arena of conflict shifted to the courts, the press, expert testimonies, and political manoeuvring on both sides. The Samis were trying to use the Alta case to press for more rights, including land rights, while the goverment insisted on separating the general Sami issues from the project. Various specialists presented reports about the extent of cultural and ecological impacts that the dam would have. The government defended the legality of its decision to build the dam. In January 1981, the government, backed by Parliament, gave the project the green light yet again—and this time they were taking no chances. While Detsika had been handled by local police, many of whom were relatives of the protesters, operations were now to be protected by a massive contingent of police from around the country, with support from the army, to ensure that construction would not be obstructed by protesters. The result was Norway’s largest ever police action since the war; it was centred on Stilla village (70 degrees north in the mountains), where opposition efforts had been concentrated. It began with the arrival of a giant passenger vessel bringing 600 police 2,000 kilometres

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northwards to the Alta harbour. There this floating police hotel remained docked for more than a year. A second encampment of the People’s Action started with about 200 demonstrators on 3 January, 1981. To cope with the harsh winter conditions—two metres of snow, a couple of hours of daylight and night-time temperatures of less than 30 degrees centigrade below zero—they built snow walls and igloos to keep warm. As rumours of a major police crackdown spread, hundreds more joined the camp from Masi, Kautokeino, Tana and Karasjok, as well as from Oslo. On the evening of 13 January, 2,000 local people held a torchlight procession along the road to Stilla in support of the ‘chain gangs’. The next morning, the police attacked the camp. It took several days to remove more than 700 protesters, many of whom were bound together with heavy iron chains. Over 1,000 were arrested and the camp was officially disbanded again, though sporadic acts of civil disobedience continued throughout the winter, as did the arrests, slowing down construction work. The army stopped short of bringing in combat troops, but assisted the police manoeuvres with winter equipment and clothing, military camp lodging, helicopters, winterized personnel transporters and other military vehicles. Moreover, in the autumn of 1980, 40 vehicles were transported the 2,000 kilometres from southern Norway through Sweden and Finland (without permits from these countries). They were repainted—from army green to light grey—to conceal their military origin. Their purpose was to stand by in case of mass arrests, and to assist the police manoeuvres. Neither the police nor the Ministry of Defence defined this as a ‘use of military force’. But during the 1980s, the grey zone of the army’s role in Alta was disputed by Norwegian legal authorities. In 1985, the Chief Prosecutor of the Norwegian Supreme Court studied the legality of military involvement in this civilian conflict, and concluded that the army had overstepped the mark and should keep out of civilian disputes in future. Following the police crackdown in Stilla, Sami activist Ande Gaup began a second hunger strike on Saturday, 24 January, 1981 at the office of the Christian Students of Norway in Oslo. Four other young Sami men joined him over the next few days. In support of the strikers, a delegation of 14 Sami women, aged 25–78 years (some of them relatives), visited the newly instated Prime Minister Gro Harlem Brundtland, refusing to leave her offices without a satisfactory answer about stopping the Alta project. Their efforts were to no avail, though, and they were removed by the police after nearly two hours. Two of the women immediately went to Rome to see the Pope, and delivered a letter about the case. Later three of the hunger strikers, badly weakened but determined to continue their fast, crossed the border to Sweden to await the governments decision, so as to avoid being forced to eat. Another delegation headed by a Sami woman, Ellen Marit Dunfjell, went to New York to present the case at the United Nations and to indigenous people’s organizations. Weeks passed with arrests continuing in the North and the Samis still refusing to eat. Finally after a full month, the government relented and called another halt

THE LAST BIG DAM IN NORWAY: WHOSE VICTORY? 47

to the construction of the Alta—Stilla road. Because a new law protecting cultural monuments and value systems was cited, this delay would last until the autumn. Construction resumed in September 1981, only to be met by a third protest encampment, this one lasting through the dead of winter from October until January 1982. A second ship, the Viking, was brought in with 400 police reinforcements, and over 300 more people were arrested. The massive police contingent overwhelmed the protestors, and the People’s Action formally and finally surrendered that winter. The police left Alta harbour the following spring, and construction proceeded unhindered until the dam was completed in 1987. THE IMPACTS OF ALTA In this small, peaceful, democratic nation, the state brought the whole of its power to bear against civil society—stopping just short of bringing in the armed forces—to defend the construction of a relatively small dam. Why? A desperate need for the electricity was hardly the reason. In fact, perhaps the greatest tragedy of the Alta controversy was that the energy produced there was never needed, a fact that project proponents knew but covered up until construction was well underway. The national energy prognoses, showing power surpluses in the North 10 years ahead, were deliberately not published in time by the then Energy Minister Bjartmar Gjerde. This was crucial for the final government order to start the Alta construction work. Yet when the plant was opened in 1987, the authorities admitted that even in dry years northern Norway would have an energy surplus of 600 GWh, which was twice the estimate of Alta’s winter power production available for transmission to southern Norway (Koren 1981). Not only was there an electricity surplus, but Alta turned out to be an economic failure as well. In 1979, Statskraftverkene (later renamed Statkraft), the utility that owns a majority share of Alta, had presented the project to the Norwegian public as a highly profitable venture. But this too proved to be an exaggeration. On 20 March, 1992, national television came up with the suprising news that the Finnmark County Energy Corporation were not able to pay the Alta plant loans and wanted to sell their shares (40 per cent) to the Norwegian state. They preferred to purchase cheaper energy from other plants. Since then, the 1993 Norwegian energy legislation, based on the free energy-market principle, has made the decision to build Alta even more absurd in economic terms. Expensive and unneeded, the Alta Dam brought with it a myriad of social and ecological impacts that were consistently downplayed or outright ignored by the dam proponents. According to the development authorities, the Alta scheme would have minimal impact on reindeer husbandry. Focusing narrowly on the pastures that would be flooded in the Virdnejavri basin, they calculated that only 21 reindeer would be affected. In reality, five herding districts, involving some 30, 000 animals and 80 households, were adversely affected both directly by the

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scheme and by the way this development would compound the impact of previous dams throughout the Nuortabelle terrain and adjacent areas (Bjørklund and Brantenberg 1981, Dalland 1994). It must be remembered too that this is the last core area left for preserving the traditional Sami culture—not as a museum piece but as the basis of ethnic identity—which can serve to inform the future cultural, economic and political choices made by the Samis. Masi village, the most typical Sami cultural settlement left in the world, was ‘protected permanently’ in 1973 after plans to flood it were thwarted by popular resistance. Nevertheless, the Masi population feels uncertain about the future. Fisheries were also severely affected by the damming of the Alta river, as the wild Alta salmon is one of the world’s most valuable varieties. Biologically, the stock is important because the species is naturally fast growing, and inhabits one of the few rivers in Norway that is not yet genetically disturbed by salmon from the rapidly expanding industrial breeding programmes along the coast. But the upper spawning ponds of the Alta river are now empty, migration routes having been obstructed by the dam. The current mayor of Alta, Eva Nielsen, says she no longer recognizes the old river. Sudden and repetitive changes in water levels and higher winter temperatures, causing ice-free currents downstream, have been catastrophic for several important spawning grounds. Yet these consequences were forecasted by environmentalists from 1970 onwards. As recently as late 1995, Norway’s Chief State Consulate Rieber-Mohn considered the idea of getting rid of the whole power plant to let the river run free, thereby restoring the salmon runs. ‘The demonstrators were right. I give them credit’, he said (Dagbladet, December 1995). As with most large dams, the damage inflicted by Alta was not restricted to a single species, but affected the ecological integrity of the river basin; in this case, one with an unusual concentration of rare flora and fauna. In 1974, I was an assistant professor of natural resource management and had been commissioned by the Norwegian Society for Nature Conservation to design two summer botanical, geological and zoological studies in the area, which had been recommended by three universities. But the new Minister for the Environment, Gro Harlem Brundtland, refused to approve either of these. ‘The power from Alta was needed on the net as soon as possible’ was the underlying reason given by the Supreme High Court seven years later. Once construction had actually started in 1982, however, the state approved considerable grants for environmental studies, which, had they been conducted in advance, would undoubtedly have made building impossible. In subject after subject, the biologists showed that the Alta Canyon had unusually high levels of biodiversity. For instance, by functioning as a seed-trap over thousands of years, the canyon had acquired astonishing numbers of rare species of plants close to the reservoir zones. As one of the few impassable large canyons in the North, the area was also a refuge and major habitat for several severely threatened mammals such as polar foxes and wolves, as well as species of eagle and falcon.

THE LAST BIG DAM IN NORWAY: WHOSE VICTORY? 49

Ecologists, environmental planners, journalists and judicial researchers pointed to the contradictory efforts of the Norwegian state, as Alta was one of the first complex cases managed by the new Environmental Ministry, established in 1972. Gro Harlem Brundtland let Alta pass before the completion of environmental and socio-ethnic impact assessments. Later on, we suspect that she may have used the case as an example and motivation for a general improvement of the environmental legislation relating to impact assessments. She told Swedish television in 1982: I think Alta will stand out as a special case, sharpening our conciousness of the value of nature, and how this ought to be recognized before any steps are taken that may change the conditions for ever…. I regard this as a historical process during these years of struggle for legitimization of environmental concerns. So, those persons who previously have treated hydro-power schemes without the necessary consideration they deserve ought to have learned once and for all from the Alta case and all its aspects. (Gro Harlem Brundtland, Swedish TV2, 9 September, 1982) One cannot help wondering if she included herself. Nevertheless, five years after completion of the Alta Dam, NVE was continuing its efforts to glorify the image of the whole development. In its 1993 book, Alta Power Plant and the Landscape, the agency highlighted the landscaping work around the plant (NVE 1993). The book is full of ethnocentric formulations and illustrations of engineering and landscape design, with descriptions like: ‘The area looks like a golden field of grain’, referring to a photograph of Dørmenen, the Finnish Sami name for a birch-forest gravel terrace close to the upper salmon ponds. Apart from the fact that grain cannot be grown in this area, NVE fails to mention that in this exact spot many unique Sami cultural memories and prehistoric finds had been swept away. The agency’s depiction can be compared to the photographs in the Norwegian daily Aftenposten, which years before had shown despairing archaeologists in front of the bulldozers. Reflecting on the environmental protests during 1979–81, the first president of the Sami Parliament, Ole Henrik Magga, says that these actions produced better results for the Sami people than any of the letters and resolutions from Sami organizations over the last decades. Magga was not alone in this assessment: it was shared by Professor Carsten Smith, who was in charge of the government Sami Rights Committee and later headed the Norwegian Supreme Court. Smith admitted that his committee, created by Prime Minister Oddvar Nordli in October 1979, was a direct response to the first Sami hunger strike that was happening at the time (Dalland 1994). Three of the hunger-striking Samis, Mikkel Eira, Jorunn Eikjok and Nils Somby, had demanded that the state should stop the exploitation of the Alta river until Sami judicial rights had been settled by the courts. Their first demand was obviously not met. But in the spring of 1987, the Norwegian Parliament passed a law allowing for the creation of a

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Sami Parliament. And on 9 October, 1989, ten years to the day after the first Sami hunger strike against the Alta Dam, the Sami Parliament was established. LESSONS FROM THE STRUGGLE Given the level of environmental and local opposition to the Alta Dam, which was historically unprecedented in Norway, why did the Norwegian government force the project through? This question remains a subject of debate among those who were active in the resistance movement. The leader of the Peoples Action in Alta, Alfred Nilsen, noted in 1985: ‘The fact that the authorities were willing to make such tremendous efforts to force the development through may imply that they suspected the People’s Action of being a sort of “fifth column” (Dalland 1994:309). Nilsen’s second-in-command, Per Terje Haaland, asked similar questions: Our experience has led us to believe that…some other underlying reasons may exist that explain why they were determined to develop the river at any price. Those reasons might be: • to make an example for the environmental movement and for public opinion in general; • to prepare the first stages for a dam in the Alta river in order to expand later on, in this or adjacent rivers; • to achieve the strongest possible position towards and against the Samis …being aware of other future industrial resources in these districts, mineral deposits, off-shore resources etc.; • the Alta plant was to be a combined power and military plant. Which of these motivations were the real ones will perhaps be revealed in the future. (Dalland 1994:299) Some elements of these theories fit with evaluations made by military and civil authorities. Five years after the vast police action in Alta, the head of the Norwegian Army’s Northern Brigade at that time, General Tønne Huitfeldt, expressed the opinion that the Alta Peoples Action had the character of a general leftist revolt, with intentions far beyond the protection of a river. He stated rather proudly that he rejected the idea of using military camps to lodge the police during the actions, but agreed to bring in military helicopters to the so-called zero point, the spot in the Tverelvdal valley where the construction road started and where the protesters had chained themselves. These helicopters were located at the main military coastal guard in the city of Bodø some 900 kilometres away. Their use was, however, stopped by the then Minister of Defence Thorvald Stoltenberg, who was an active mediator between the parties in the Alta conflict during the critical days of 1981.

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In some respects these authorities were of course correct in their suspicions. Every environmental opposition to vast infrastructure projects is a plea for a more sustainable kind of development. At Alta, perhaps the authorities were forecasting an eventual ‘domino effect’, where the rejection of one large project could lead to a full-scale repudiation of this kind of technology. The intense media focus on the issue, combined with the fact that the majority of Norwegian intellectuals supported the Samis and environmentalists, represented a threat to national political stability. Alta reflected cracks in the structure of Scandinavian social democracy. While the Sami and environmental movements have tried to evaluate the significance of the Alta struggle, the builder of the power plant, the state-owned Statkraft, has also been affected by the experience. Between 1970 and 1986, Statkraft was a directorate within NVE, the Norwegian governmental water resource and energy authority. This government body, like Vattenfall in Sweden, planned, operated and often also owned (about 30 per cent of production is stateowned) the hydro-power plants. Yet at the same time, Statkraft was the authority that proposed projects for the government’s recommendation and parliamentary approval. During the 1970s, this blatant conflict of interest was increasingly questioned, and the Alta Dam was the last controversial case of its kind. From 1986, Statkraft was separated from NVE. Alta marked the first time that democratic decisions at the local government level had rejected a hydro-power project. The municipal boards of both communities, Alta and Kautokeino, voted against the Alta project and all its associated schemes. With Alta, the hydro industry was confronted by environmental and ethnic expertise, which scrutinized every step from start to finish of the planning process. The national hydro-power authorities thus learned two sets of seemingly contradictory lessons: first, the need for the genuine improvement of the environmental impact assessment procedures; and second, an accelerated and integrated form of technical development that could be applied in the Third World. Which of these tendencies will win out in the long run will perhaps depend on the extent of democratic control over the process in each case. But it will also be determined by the dam builders’ own pride and their insistence upon the highest professional standards, which by the year 2000 will undoubtedly have incorporated, even iconized, ecological perspectives. Let us therefore first consider the genuine improvements in the handling of environmental questions. Perhaps the most promising of these is the dam builders’ recent commitment to cooperate with the Norwegian environmental movement. Since Alta, NVE has worked to cultivate a more neutral image, as a water authority separated from the vested interests previously associated with the entrepreneur role of its department, Statkraft. NVE now cooperates locally with the environmental movement on small-scale hydro-power schemes to increase the efficiency of existing installations. In Telemark, for example, these efforts have led to a gain of up to 300 GWh a year—about half the production of Alta —without any new dams or additional disturbance to the rivers. This

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strategy has helped to prevent the development of the seven undammed river systems that are more than 130 kilometres in length. River conservation plans undertaken by the modernized NVE since 1990 have enabled the further protection of some 70 rivers of more than 80 kilometres in length. But of Norway’s large rivers—over 320 kilometres from source to mouth —there remains only one that is undammed today: the Tana. The other side of the lesson that the Norwegian hydro-power industry has learned from Alta concerns how to market potentially damaging technology abroad in the face of local opposition, whether on environmental or ethnic grounds. In Alta, they learned how to force a project through. Like the industry, the political authorities in Oslo also learned their lessons from Alta. On one hand, in order to avoid ‘another Alta’, they conceded to the demands for reform of the environmental decision-making process. They separated the business and control sections of the hydro-power agencies, undertook four nation-wide nature conservation plans for river systems, and introduced new rules on environmental impact analysis. Moreover, they granted Sami rights. On the other hand, the government of this small industrial nation gained experience from the Alta conflict that it would apply on the international scene in the mediation of other environmental and human rights affairs. Alta contributed, justly or otherwise, to establishing the credentials of Gro Harlem Brundtland as an expert on politically sensitive environmental matters. This surely helped to secure her leadership of the UN Commission of Environment and Development in 1985, the so-called Brundtland Commission, thereby coupling Norway’s image with the concept of ‘sustainable development’. After Alta, participants in the debate from within the Norwegian central administration entered the area of international conflict mediation. Claiming a special ability to understand and find solutions to difficult multicultural questions, Norwegians have been involved in Israel and Palestine and in the postYugoslavia situation. I shall not compare the issues too closely, but the roles played by the Defence Minister, Thorvald Stoltenberg, and legal experts Ingvald Sørheim and Jan Helgesen as background mediators between the parties at the culmination of the Alta conflict established a model for what is known as the ‘Oslo method’, which has been adopted in the Middle East conflict. Another aspect of what the Norwegian government learned from Alta has to do with the export of Norwegian dam-related technology. While politicians actively cultivate an image of expertise in the resolution of environmental or cultural conflicts, their motives may also include the promotion of Norwegian companies, such as the giant turbine manufacturer Kvaerner, in the Middle East and elsewhere. It may be, however, that the most important political lessons gained by the Norwegian government from the Alta conflict have yet to be evaluated by the ministries. The Prime Minister during the latter part of the conflict, Kaare Willoch, agreed on the need for a major study to evaluate what had gone wrong in Alta. But that work has not even been started yet, leaving the environmental

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movement and independent ecologists to make their own assessments of Alta’s implications. By refusing to undertake such an evaluation, the government is buying time in order to hide the facts that the electricity from the dam was never needed, and that the critics had been right all along about the devastating impacts on culture and biodiversity. In the meantime, Norway’s international reputation for being a homogeneous welfare state free of internal conflicts is preserved. The government learned that civil disobedience in modern Norway could occur and could be repressed. But the lesson also carried a price: best to avoid another Alta… at least in Norway. ECHOES FROM THE PAST: RESISTANCE TO FASCISM AND DAMS As for the protestors, the basic environmental outlook and inspiration of those in the movement against the Alta Dam can be partially traced backed to incidents that occurred during the Second World War. In the great fire of Alta caused by the Germans in 1944, nearly all the buildings in the village— except two churches—were burned to the ground. Some of the most resolute Norwegian partisans, together with a group of Russian refugees, hid themselves and their families in a secluded mountain valley, Goidnus, just above the future site of the Alta Dam. Thirty-four women, men and children camped there through the winter from September 1944 until February 1945, receiving supplies from Samis in Masi and also making hazardous trips for provisions through the front to Alta village. When they began to run short of food, they sent a patrol of four men to ski across the vast eastern plateau to Karasjok, where the Norwegian liberation forces had just arrived following the retreat of the Germans. Through a misunderstanding, the Alta partisans were caught up in a shooting episode, suddenly coming upon the Norwegian forces on the ice of Tana river. The refugees made a rapid retreat into the forests on the Finnish shore, and were able to lose the patrol that was following them. The Norwegian military patrol happened to be led that day by the 21-year-old ensign Tønne Huitfeldt, who, 40 years later at the height of the Alta conflict in 1981, had advanced to the rank of general in command of the Norwegian Northern Army. He now found himself at the head of military troops, considering whether to meet the Alta civilian environmentalists with military force, equipment and vehicles. Among those he faced were several of the partisans who had camped out near the future dam site in 1944, and were now, in 1981, in the inner circle of the People’s Action in Alta. Ulrik Wisløff, for example, had been a young resister in 1944, while Ingolf Lundberg was just a small boy in the 1944 mountain encampment. Haakon Henriksen, a coastal Sami from the Tana fjord, was the formal leader of the Alta environmental negotiation committee during the first police confrontation in 1979. During the battle of Finnmark in 1944, Henriksen s family hid another group of refugees in the mountains in the nearby Tana region. Five years old at the time, I was among these refugees. My parents had been school teachers in the towns of Berlevåg and Vadsø and had resisted the German

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occupation. They defied a German order to return to southern Norway where they would have faced certain emprisonment, and for two months we lived in hiding in caves and small cattle huts at the inner fjord of Tana at Lawonjarg, a Sami place, meaning the ‘tent peninsula. People like Haakon Henriksen derived much of their inspiration in the struggle to defend the river from their experiences during the war. The river had sustained the resisters of fascism through the brutal Arctic winter of 1944. Henriksen’s commitment proved how wrong were the allegations of the police, who claimed during the height of the Alta conflict that the opposition was being instigated by Oslo-based activists and academics who had no understanding of the realities of life in Lappland. Henriksen died suddenly while giving a speech on Alta river protection during an Alta Municipality Board meeting in May 1980. Alta and Tana rivers, with their abundance of salmon stocks, also provided fish for the local inhabitants of Finnmark in 1945 after the war ended when food and other resources were scarce. These rivers will stand for ever as a natural peace monument, reminding us of our fundamental dependence on nature, Samis and Norwegians alike. The huge ships conveying hundreds of police officers and the enormous caravan of military vehicles sent to Alta from southern Norway through Sweden and Finland ahead of the police actions certainly strengthened the determination of the environmental movement locally, nationally and in other European countries. These historical parallels, which were more than mere coincidence, shed some light on the motives of the environmental action at Alta. The same popular resistance was needed once again. In the words of Kristian Wisløff—a Norwegian soldier who had taken refuge near the dam site during the Second World War and later was among the first to rally the resistance to the damming of Alta: ‘the Germans didn’t manage to take the river, but now others are trying to do so’. Wisløff died several years before the police action of 1979, but his prophetic message would mobilize the movement that confronted the new threat of technocracy. EPILOGUE Part of the river system was lost, while most of the vast adjacent river systems draining the Finnmark plateau (Tana, Iesjavri, Stabburselv and several others, as well as the upstream part of the Alta-Kautokeino river with the unique Sami village Masi) were left unregulated. The environmental struggle that had begun in the 1960s had brought mixed results: we lost part of the water, but won back a part of ourselves. The Alta conflict was an overture to a Sami cultural boom which continues to this day. Sami poetry, painting, theatre and film are flourishing, and individual artists such as the multi-talented Nils Aslak Valkepaa, the singers of Sami traditional joiks and modern songs, Marie Boine and Mattis Hætta, and the Oscar-nominated filmmaker Nils Gaup have achieved international acclaim. All of them were politically active during the struggle to save the Alta river. But as

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the former leader of the Alta Sami association, Solveig Hætta, puts it, now and then she would prefer a leave of absence from the ‘Sami role’. We were more or less forced, she says, into the role of the oracle, a defensive role. How would Norwegians like to be asked again and again to explain how it feels to be Norwegian? Or to respond to regular inquiries like ‘We are a group of teachers and pupils at this or that school, doing a project on the Samis. Would you please give us some information?’ REFERENCES Aarseth, B. (1977) ‘Samene’, in J. Gjessing (ed.) Oslo: Universitetsforlaget. Alta dommen (1982) Oslo: Universitetsforlaget/Norges Naturvernforbund. Backer, I.L. (1986) Naturvern og inngrep, Oslo: Universitetsforlaget. Bjørklund, I. and Brantenberg, T. (1981) Samisk reindrift og norske inngrep, Oslo/ Bergen/Tromsø. Dalland, Ø. (1972) Finnmarksvidda -for hvem?, Oslo: The Norwegian Society for the Conservation of Nature (Norges Naturvernforbund). —— (1978) ‘Preservation of nature and local economic activity—conflict or mutual interests?’, Geoforum 9:49–81. —— (1989/1994) Alta-saga (comprises Demningen and Alta Chronicle), Karasjok: Davvi Girji. Hagtvedt, B. (ed.) (1981) Den vanskelig ulydigheten, Pax. Koren, C. (ed.) (1981) Altahøringen, Oslo. Lindal, Åsmund and Sunde, Helge (eds) (1981) Alta bilder: 12 års kamp for AltaKautokeinovassdraget (Alta Pictures: Twelve Years’ Struggle for the AltaKautokeino Watercourse), Oslo: Pax Forlag. Mikkelsen, M. (1971) Masi, Norge, Oslo. Miljøverndepartementet (Ministry of Environment) (1978) NOU 1978:18 A/B. Bruken av Finnmarksvidda, Oslo. Nordeng, H. et al. (1980) Altaelva og Altalaksen før og etter en regulering, Oslo: Zoologisk inst. University i Oslo. NVE (1968) Vassdragsdirektoratet: Alta-Kautokeinovassdraget. Foreløpig utbyggingsplan. NVE–VU–1968, Oslo. (1993) Alta kraftverk og landskapet, Oslo. Rettsbok, Alta Herredsrett, 5 December 1980. Alta Herredsrett, Alta (Report from the Alta Municipal Court). Sanders, D. (1979) Proceedings of the conference The Land Rights of Indigenous Peoples — The Sami Rights, arranged by Oslo Samiid Sæsr’vi, IWGIA and Inst. for Social Anthropology, University of Oslo, 5 November, 1979. Sandvik, G. (1980) Ei forelda here. Statens umatrikulerte grun. Lov og rett 2/80. Oslo. Sandvik, H. (1975) Frigjoringen av Finnmark 1944–45. Forsvaret/Gyldendal, Oslo. Stortingsproposisjon nr. 107 (1977–8) Om statsregulering av Altavassdraget. Finnmark fylke. Stortingsproposisjon nr. 61 (1979–80) Om Regjeringens arbeid med gjennomføringen av Stortingets vedtak om utbygging av Altavassdraget (the government’s report to the Storting about the Alta conflict).

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Stortingsproposisjon nr. 77 (1979–80) Verneplan II for vassdrag, Oslo. Thuen T. (ed.) (1980) Samene-, urbefoldning og minoritet. Tromsø. Tønnesen, S. (1979) Retten til jorden i Finnmark, Oslo: Universitetsforlaget.

Part III NORDIC DAM BUILDERS IN THE SOUTH

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6 THE MECHANISM OF ‘PERVASIVE APPRAISAL OPTIMISM’ Ann Danaiya Usher

There are benefits, of course, which may be countable, but which Have a tendency to fall into the pockets of the rich, While the costs are apt to fall upon the shoulders of the poor. So cost-benefit analysis is nearly always sure, To justify the building of a solid concrete fact, While the Ecological Truth is left behind in the Abstract. (Kenneth E. Boulding, The Careless Technology (1973)) The Nordic aid agencies’ process for reviewing the environmental impacts of the dams they finance in the Third World is rigged. There is a pressure to lend, a bureaucratic momentum, a bias in favour of projects which ensures that Swedish and Norwegian aid funds subsidize contracts on dams for Swedish and Norwegian companies. The environmental impacts are studied, in accordance with procedures that have been in place for almost a decade. But usually these studies ignore the negative effects of projects on nature and the poor. And when concerns are raised, they tend to be swept aside. Part III of this book describes in detail how this process unfolded in three Nordic-funded power dams, the Theun Hinboun in Laos, the Pangani in Tanzania and the Pangue in Chile. In the first case, the consultants’ report concluded that fisheries would improve because of the higher water level behind the dam wall, in spite of the fact that a 40-kilometre stretch of the river downstream will be dried out four months each year, in a region where fish provides the main source of protein for local communities. Supplementary studies gave a more realistic picture of the impacts, but were ignored. The Pangani Dam was built in a river where drought has for the last few years compounded a conflict over water between large-scale irrigation projects and subsistence farmers. For Pangani to work, upstream farmers must use less water, which, according to Nordic consultants who studied the basin for six years, could ‘decrease’ the food security of some people. Those farmers were not offered compensation, however. Rather, they were forced by the donors to pay for water that they had traditionally used for free. As for Pangue, all the expert opinions solicited by the donors agreed that the environmental impacts of the dam had not been studied properly by the Chilean authorities. The donors funded it anyway.

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The tendency is clear enough. But how does the process work? Are the dambuilding companies so powerful that they dictate aid policy? Are well-meaning aid bureaucrats who want to fulfil their mandate to help the poor being duped by incompetent or biased consultants? Do the donors believe that giving hydro dams as aid has a necessary but acceptable ecological and social cost? Or are they simply acting as brokers for their national industries? In fact, the process by which such projects are approved is so obscure that even the decision-makers are not always sure where the lines are finally drawn. As one Swedish official said: ‘This is a long process linking so many different commercial and political actors. It’s very hard to trace, even for us…. It’s very difficult to describe how this game is played.’ This chapter is an attempt to describe how this game is played. ‘PERVASIVE APPRAISAL OPTIMISM’ DEFINED The heyday of the megadams is past, and one is hard pressed today to find anyone engaged in the development debate who would deny that large hydroelectric dams have at least the potential to cause massive social and ecological disruption. There may be varying opinions about how the biodiversity crisis and the survival of indigenous and peasant communities compare in importance with acid rain, global warming, and nuclear waste disposal. Nevertheless, the days are gone when dams were viewed as unchallenged symbols of modernity, progress and prosperity. Resistance movements the world over have drawn attention to irreversible negative impacts, ranging from the loss of precious forests and farmland to the decimation of indigenous cultures, erosion and salinization, the destruction of fisheries and the forcible resettlement of millions of people. At a time when sustainable development has become a universally accepted term, however it might be defined, such issues can no longer be ignored. ‘In the past, we thought that everything with large dams was good, but the large dam syndrome is fading away at the World Bank and in Sweden’, declared Sweden’s Aid Minister Pierre Schori in 1996. ‘That means no more megaprojects like Narmada [in India]…. From now on we must examine very carefully each project on its own merits’ (Pierre Schori, Interview, 20 March, 1996). Just as the Alta Dam in Norway became the yardstick of political unacceptability in the Nordic region, so Narmada was the kind of public relations nightmare that development aid agencies want to avoid at all costs. Yet to listen to Pierre Schori, one might imagine that the problem with large dams like the Sardar Sarovar on the Narmada river was that they were never appraised; and by extension, that environmental impact assessments are a new and innovative idea that, once put into practice, will help to weed out disastrous projects. In the case of Narmada, it was not the absence of study, but rather the poor quality and prodam bias of the appraisals that explain the vast discrepancy between the promises of the good life and the reality of hideous human rights violations

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inflicted by the Indian dam. As the historic independent review of Narmada, the so-called Morse Report, concluded: We believe that the Bank shares responsibility with the borrower for the situation that has developed…. Engineering and economic imperatives have driven the [project] to the exclusion of human and environmental concerns…. As a result, benefits tend to be overstated, while social and environmental costs are frequently understated. Assertions have been substituted for analysis. (Morse 1992:23) According to World Bank principal energy economist John Besant-Jones, the pro-dam bias of Narmada’s appraisals was more of a rule than an exception. Besant-Jones has spent the last few years reviewing the financial viability of some 70 large and small hydro dam projects funded by the Bank since the 1960s, and has found that most studies were prejudiced in favour of projects. The dams cost more than they were supposed to and took longer to build. They also tended to be too big, as the projected energy ‘demand’ was systematically over-estimated. Besant-Jones invented a term to describe this tendency: ‘pervasive appraisal optimism’ (Besant-Jones 1994:42). A classic example of Bank jargon, it is worth deciphering for the stunning admission of failure it reveals from the worlds leading public financier of dams in the Third World. ‘Pervasive’ means everywhere; ‘appraisal’ refers to studies; and ‘optimism’ means positive. Altogether, ‘pervasive appraisal optimism’ is a cryptic way of saying that project assessments have tended to rubber stamp dam projects, over-estimating the benefits and ignoring the costs. These studies were commissioned by the Bank or other donors, while debt repayment and unforeseen costs remained the responsibilities of the recipient government. Though Besant-Jones was looking exclusively at the financial viability of Bank-funded dams, ‘pervasive appraisal optimism’ could equally describe the assessments of ecological and social impacts of dams. Up to 1995, after 50 years in business and after lending US $58 billion for 604 dams in 93 countries, the Bank had not yet done a comprehensive review of the environmental impacts of these projects (Sklar and McCully 1994:5). But international pressure has forced the Bank to be much more cautious about funding dams. The environmental movement put the World Bank through ‘the fires of hell’, as Besant-Jones puts it, over its support for projects like Narmada (John Besant-Jones, Interview, 22 September, 1994). For the first time, the Bank was forced to withdraw from the project, though construction continued. The Morse Report, which reviewed studies from the 1980s, was completed in 1992. Yet three years on, similar irregularities in the appraisal process were once again exposed during the international controversy surrounding the Arun 3 hydro project in Nepal. The World Bank assured Nepali critics that it was an excellent project. The main bilateral donor, the German Development Bank (KfW), described Arun 3 as the ‘best-studied development project ever undertaken by

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the German government’ (Uwe Ohls, Interview, 22 September, 1994), It was, they said, going to bring development to Nepal with a dam that was designed to export electricity to India. While Germany was preparing one of its largest-ever grants to a bilateral project (most of which would pay for German equipment), the Swedish Board for Industrial and Technical Cooperation (BITS) also pledged US $20 million for Swedish equipment suppliers for Arun 3, as part of a jointfinancing arrangement with the World Bank and the other donors (Lars Liljesson, Interview, 27 October, 1994). BITS hired the Swedish consultancy company Sweco to review the appraisal of the Nepali dam, and the consultant found no reason to withhold its support. A subsidiary of the Swedish utility Vattenfall might have supplied equipment for the project (Development Today 14 (1994)). Sweden never financed Arun 3 in the end, however. Critics in Nepal claimed that the project would bankrupt the government and that the main beneficiaries would be Western consultants and equipment suppliers. A hot public debate erupted in Germany. Though KfW documents are considered secret, the outcry caused the German Federal Audit Office to look into the case. Its investigation revealed that the benefits to Nepal had, as German parliamentarians, environmentalists and the press suspected, been wildly exaggerated. The KfW was forced out of the project. And with its main bilateral funder gone, in August 1995, the World Bank’s newly installed President James Wolfensohn pulled the Bank out of Arun 3 as well. THE DISCOURSE In the official development discourse, a hydro project responds to the energy needs of the recipient country, and decisions are made by the government in consultation with the donor. While politics at the receiving end certainly influences the process, donors are also operating in a loaded political arena. Donors must take into account the ‘needs’ of their local companies, who want more tied aid to boost their advantage in the international market place. They must respond to powerful industry lobbies and politicians who are more concerned about domestic jobs than tropical fish and far-away farmers. At the same time, the ultimate raison d’être of the development agencies is to help the poorest of the poor in the South. When it comes to power dams, which by their nature tend to cause problems for the poor, the impact assessment process becomes crucial. Through careful review, the decision-maker is supposed to determine whether the benefits are worth the costs—to the recipient country and to the national industry. In such a set-up, it is not difficult to see how the various needs become confused. In theory, environmental impact assessments (EIAs) are carried out before the project is approved, indeed, before the technical design is completed, to assist decision-makers in weighing the pros and cons. In theory, they are written by independent and dispassionate experts with specialized knowledge—be it in the field of hydrology or ichthyology or anthropology—who provide a scientific appraisal of a project. For aid-financed hydro projects, environmental impact

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assessments are financed by aid agencies which often require EIAs as part of the grant or loan package. With such a rigorous procedure in place, what goes wrong? How could a Narmada ever have been built? How could Arun 3 have been called the best-studied project ever? In a 1993 article about the inter- national controversy over large dams, The Economist offered this explanation: If there is one thing easier than bribing people with federal money, it is bribing them with overseas aid. Such aid clearly benefits greedy politicians and officials, not to mention western engineering firms and aid bureaucracies which would rather do something big than something clever. Everybody else, and especially the majority of taxpayers who eventually foot the bill, should look on dam building with suspicion. (The Economist, 28 March, 1993) Outright corruption is undoubtedly part of the story, but it is usually very difficult to trace, and does not give the whole picture. Another explanation is the pressure from Northern dam-building firms to find new markets as industrialized countries have stopped building dams one by one. The United States, which pioneered big dam technology, has undergone the most drastic turn-around because of the long-term ecological damage caused by its dams, the effects on native communities and the public’s unwillingness to continue the massive subsidies. Dan Beard, the former head of the US Bureau of Reclamation, which built many of the American dams, announced in 1994: ‘the dam-building era in the United States is now over’ (Beard 1994). Most countries, including the United States, have responded by encouraging the export of dam technology to help their industries stay alive. Beard says that the Bureau will no longer engage in this practice, but in an interview with Thai journalist Nantiya Tangwisuttijit offered a candid assessment of why it continues: There is a substantial infrastructure that surrounds dam building. There are people in the business to make money. They are spreading around the globe trying to encourage dam construction. They are less interested in the problems because promoting dams is their business. (The Nation, 23 November, 1994) The mechanism of pervasive appraisal optimism is not easy to track for dams financed by multi-lateral development agencies like the World Bank or the Asian Development Bank. In addition to the main donor, these projects often involve dozens of actors—aid agencies, equipment suppliers and consultants from several different countries—over a period of many years. Moreover, like Germany’s KfW, the bilateral aid institutions in, for example, France and the UK tend to be highly restrictive with their information. Citing commercial sensitivity or a recipient government’s request, they keep much of the documentation unavailable to the public—even to parliamentarians—and the decision-making process is shrouded in secrecy.

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In this respect, the Nordic region is very different. Sweden and Norway have liberal access to information laws and a culture of openness that allows the public access to a much wider spectrum of documentation related to development aid projects than their European counterparts. At the same time, they are major players on the international dam-building scene, being home to powerful multinational companies like ABB and Kvaerner, and use bilateral aid money to finance dam building in the Third World. The same mechanism of pervasive appraisal optimism’ applies, but on a smaller scale and in a clearer, more transparent form. So how does the mechanism work? THE PLAYERS The first step in understanding this mechanism is recognizing its composite parts. There are a number of actors operating on the political stage on the donor side, each one with its own distinct role, set of interests and relationships with the other actors. The principal actors are: • the companies that build and supply equipment for dams; • the aid agencies that channel grant money or credits to their recipients for the purchase of that equipment; • the consultants who write the impact assessments, on which the donors allegedly base their decision whether or not to finance. There are three Nordic-based multinational companies competing on the international hydro market that receive substantial financing from the Nordic bilateral aid agencies: ABB, Kvaerner and Skanska. ABB Generation, a Swedish subsidiary of the giant Swedish—Swiss concern, manufactured electrical equipment for hydro-electric projects worth almost US $1 billion between 1992 and 1995. Between US $300 million and US $500 million of this was accounted for by Third World sales, most of it financed by Nordic bilateral aid institutions like Sida, BITS, NORAD and FINNIDA. Recent contracts include Urri in Kashmir (Sida and BITS), Xeset in Laos (Sida and NORAD), Pangani in Tanzania (Sida and NORAD) and the Lesotho Highlands project (BITS). According to the company’s president Billy Johansson, ABB Generation has never been paid for contracts through non-Nordic bilateral financing. It has no serious competitor in the Nordic region. Internationally, its main competitors are Siemens (Germany), Elin (Austria) and General Electric (Canada) (Billy Johansson, Interview, 22 April, 1995). Meanwhile, ABB Norway is active in all Norway’s main aid recipient countries, and in the past decade has received over US $100 million through NORAD and other business provisions of Norwegian development aid. Kvaerner Energy is one of the world’s leading turbine manufacturers, part of the Oslo-based Kvaerner concern, which includes oil and gas installations, ship building, shipping and pulp technology with a total 1994 turnover of US $4 billion. The same year, Kvaerner Energy had revenues of US $400 million, half

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of which was from turbines. Unlike ABB, which has subsidiaries that manufacture world-wide, Kvaerner’s manufacturing base is concentrated in the Nordic region with 40 per cent of its employees in Norway, and the other 60 per cent in Sweden, Finland, Germany and the UK. Kvaerner Energy’s President Per Berg notes that the British branch is not used for manufacturing, but only for project management. It was opened in order to gain access to British aid finance. In this way, British ODA financed Kvaerner turbines for Urri in Kashmir and Pergau in Malaysia (Per Berg, Interview, 11 October, 1994). Altogether, Kvaerner Energy’s total turbine output has amounted to 85,000 megawatts of electricity-generating potential, some 12–13 per cent of the world’s installed capacity. The company dominated the global market in 1993, when it supplied turbines with a combined generating capacity of 12,000 megawatts, more than half in the world. But that was an exceptional year. Normally Kvaerner Energy has 12–13 per cent of the global market share. Skanska is a Swedish construction and engineering firm with subsidiaries around northern Europe. Half the company’s revenues come from Sweden, where some 10,000 projects are underway at any given time. Often in consortia with ABB and/or Kvaerner, Skanska has since the 1970s worked on hydroelectric projects in Brazil, Colombia, Guatemala, Indonesia, Kenya, Madagascar, Malaysia, Mauritius, Morocco, Pakistan, Panama, Peru, Sri Lanka, Tanzania and Thailand, the majority financed through aid (Skanska 1995). In order to increase their competitive advantage, these companies—like their competitors—seek arrangements with the bilateral aid agencies, who offer money towards contracts. Their chance of winning a bid for a contract is greatly enhanced by the size of the subsidy that they are able to guarantee their client. In Power Conflicts, a study of Norwegian hydro-power developers in the Third World by the Association for International Water and Forest Studies (FIVAS), one industry representative comments that ‘we can’t keep on giving away money without getting anything in return. All aid should be tied! Why should we donate money to a country that only uses it to buy goods from another country?’ Another suggests that it is ‘impossible’ for the hydro-power companies to compete in these countries without development aid (FIVAS 1996:84). In general, Austrian companies are subsidized by Austrian aid, and British companies, by British aid. If the Canadians and the French and the Australians are sweetening their bids for a contract in, say, Lesotho, with huge amounts of aid finance, Nordic companies can rightly argue that they are out of the race if their aid agencies don’t do the same. The use of aid money as subsidies to companies has been somewhat tempered by a set of rules introduced by the OECD, which came into effect in 1992, known as the Helsinki Package. These rules stipulate that aid cannot be used to finance commercially viable projects that could, by definition, obtain finance on market terms. Though they have been accepted in principle by all OECD member states, it has been possible to circumvent the Helsinki rules on occasion (see p. 144).

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The development aid agencies discussed in this book are: the Norwegian Agency for Development Cooperation (NORAD), the Swedish International Development Cooperation Agency (Sida), the Swedish Board for Industrial and Technical Cooperation (BITS), which existed until July 1995, when it merged with Sida, and the Finnish International Development Agency (FINNIDA). Like the World Bank and other bilateral donors, the Nordic aid agencies have a mandate to help the poor. Historically, they have distinguished themselves among Western donors with a ‘solidarity-oriented’ aid policy inspired by the late Swedish Prime Minister Olaf Palme. During the 1970s, social democratic governments in the Nordic countries supported African liberation struggles and opposed US policies in Chile and Vietnam, and aid projects often followed foreign policy. There was an emphasis on the so-called LDCs (least-developed countries): those poor nations, particularly in Africa, to which few other countries would give money. Norwegian, Swedish and Danish aid continues to constitute the highest percentage of GNP of all the Western donors. Hydro-electric dam projects have been a focus of Swedish and Norwegian infrastructure and energy-related aid. According to NORAD: As a result of development aid, several Norwegian companies gain good international contacts and better knowledge of international terms. The development aid opens doors, both for the Norwegian industrial sector as such and for individual companies. (FIVAS 1996:85) The provision of dams as aid has been organized in a number of ways. One Nordic bilateral agency sometimes funds a whole hydro project, as Sida did for the Kotmale Dam in Sri Lanka. Sometimes Nordic bilaterals team up, as in the case of Pangani in Tanzania, where Sweden, Norway and Finland split the cost. Nordic co-financing with the World Bank, a regional development bank or other bilaterals is another possible combination, as Arun 3 would have been. The money can be in the form of a grant to the recipient government, which it then uses to pay for the equipment or services. Or it can be a soft loan to a company (as with Pangue in Chile), or more often to a government, which is tied— formally or otherwise—to Nordic contracts. In others still, companies can apply directly to export credit agencies, which offer loans with state guarantees. Though they are an important component in the process, these export credits are not covered in this book. With the introduction of environmental issues into development came the need for environmental impact assessments as conditions for projects like dams. Rather than using in-house expertise, or hiring new staff with relevant knowledge, the agencies hired commercial consultancy firms—the independent experts—to review projects and give their opinions. Agency staff would then base their final decision on these reviews. As with the equipment supply companies, there are few Nordic consultancy firms active in the Third World hydro market—four to be precise. Just as ABB,

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Kvaerner and Skanska have been given the lion’s share of Nordic aid-financed hydro contracts, having no competitors in the region, SwedPower and Sweco in Sweden and Norconsult and Norplan in Norway dominate the consultancy field. The four companies are engineering firms that review environmental impact assessments or perform EIAs as part of a package of studies done for a given project. Often a company will win a contract, and then sub-contract sections on anthropology, fisheries or wildlife to other firms. CONSULTANTS: THE GREY ZONE The single most important feature of these consultancy firms is that all their damrelated contracts in the South, with very few exceptions, are financed by development agencies; multilateral institutions like the World Bank and Nordic donors, in varying proportions. SwedPower estimates that 75 per cent of its contracts are Nordic aid-financed, and Norconsult, 40 per cent. It is probably safe to say that they would not exist at all—or at least their work on Third World hydro projects would not exist—without aid money. Commenting on their close association with the agencies, SwedPower’s Lennart Lundberg said, you can ask whether or not this is sound, but that’s the way it works in Japan, Germany, England. We’re not special in Sweden. It’s just an international phenomenon’ (Lennart Lundberg, Interview, 20 March, 1994). This association creates a dependency on aid money that fundamentally influences the consultants’ political role. On the one hand, they are the recipients of development aid funds, receiving millions of dollars’ worth of contracts each year. On the other hand, they are hired as experts by the aid agencies to review projects, and thus act as extensions of these public institutions. Though in a sense involved in the decision-making process, they are not accountable to the public, and so they occupy a fascinating grey zone between the public and the private domains. The EIAs written for the Nordic aid agencies tend overwhelmingly to favour the hydro projects that they are asked to review. It is rare for an EIA to contain a recommendation against a project. Given the intimate connections between the companies and the Nordic dams industry, this bias is not surprising. SwedPower is owned by the two main Swedish utilities, Vattenfall and Sydkraft, which produce more than half the country’s electricity in their hydroand nuclear-power plants. Sweco is owned by VBB-Viak, the large engineering firm that built many of the Swedish dams. Norconsult is a consortium of 13 competing local engineering firms that operate together under one name while working abroad. Until recently, it was partly owned by Statkraft, the Norwegian state utility. Of its US $30 million annual turnover, about half is hydro-powerrelated. Norplan is Norconsult’s smaller competitor. The companies are linked in complicated ways, sometimes competing for the same projects, sometimes reviewing each other’s work, and often working together on contracts. While Sweco is part of Skanska’s consortium with ABB and Kvaerner for the Swedish-financed Urri Dam in Kashmir, Norconsult is part of the Kvaerner consortium building Pangue in Chile. Sweco was hired by Sida

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and BITS to review the environmental impacts of dam projects like Kotmale in Sri Lanka, Xeset in Laos and Pangue in Chile, three projects where Norconsult also had contracts. On a joint Swedish—Norwegian-financed project like Epupa Falls in Namibia, SwedPower is carrying out the feasibility study (including environment impact assessment and technical design) along with Norconsult. But SwedPower stayed out of Theun Hinboun in Laos because Vattenfall, its owner, was an investor. NORAD financed Norconsult’s studies there instead. The reports were of such low quality, though, that NORAD had to rehire Norplan to do ‘supplementary studies’. In a case like Pangani in Tanzania, it was SwedPower’s job to appraise the reports written by Norplan and a Finnish consultant, IVO International. Norplan has worked on Kihansi, also in Tanzania, as a result of contacts made through Pangani. Consultants can also play an active role in putting projects together. In the case of Theun Hinboun, SwedPower’s Karl-Erik Norlander, working as an adviser to the Lao government, his salary covered by Sida, identified this as the best of dozens of possible dam projects in the country. Norconsult’s Gjermund Saetersmoen then brought the Lao government, the Asian Development Bank and NORAD together. His efforts resulted in US $7 million worth of NORAD contracts on Theun Hinboun for the company. A consultant working for one of these four firms, who asked not to be named, commented on the inevitable conflict of interests resulting from the close associations with dam-building companies: Consulting firms have a conflict of interest as long as they themselves may benefit from one outcome over another…. For example, if they find that a certain project is feasible, they are often in a good position to undertake the subsequent studies, design work and construction supervision associated with further project phases (which is often more profitable than the initial feasibility study)…. This conflict could be avoided if the evaluation were carried out by an impartial party which was aware that it would not subsequently receive any further project-related work, regardless of evaluation outcome. (Anonymous 1994) Having greater distance from the industry might not in itself lead to less biased results. Their assessments are at the heart of the issue, yet the consultants are rendered invisible by the decision-making process. The word ‘expert’ seems to create a protective screen through which ordinary people—in the donor countries and particularly at the recipient end—have little hope of penetrating. In Sweden, there is a professional association of consulting engineers. But if a party is harmed by the actions of one of its members, there is no formal procedure for filing a grievance, according to Mårten Lindström of the Swedish Federation of Architects and Consulting Engineers (Mårten Lindström, Interview, 7 November, 1994). Similarly, in the field of anthropology, there is no Nordic body that oversees the maintenance of professional standards. If an

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anthropologist is, as occurred in the case of Theun Hinboun, hired to comment on issues outside his field of expertise and comes up with unreasonable conclusions, there is no formal way to challenge him on professional grounds. ENVIRONMENTAL REVIEW IN THEORY AND PRACTICE Until the late 1980s, dams were financed by the Nordic donors without environmental impact assessments. Since the incorporation of environmental protection into Nordic development aid over the past decade, the agencies have had little trouble financing so-called environmental projects like national parks and soil erosion management, but dealing with the negative environmental impacts of dams remains problematic. After all, what does it really mean to ‘incorporate environmental concerns’ into dam building? In most cases, mitigation measures—such as a guaranteed minimum flow—can significantly reduce negative impacts. Often, though, it would mean cancelling a project, or at least withholding funding. The Nordic donors have proved very reluctant to do this. There is a momentum in the aid bureaucracy to push development projects through the ‘pipeline’, and environmental and social issues are obstructions in this process. As the following chapters of this book describe in detail, critical comments tend to be sidelined, EIAs of questionable merit accepted, and hydro projects receive their financing. As it happens, in all three cases the experts did recommend that a minimum flow be a condition of Nordic support to Theun Hinboun, Pangani and Pangue. But the donors financed all three projects without this guarantee in place. The consultants may have favoured the projects they were asked to review. But given their overwhelming dependence on the donors for future contracts, they were arguably only telling the clients what they wanted to hear. Environmental concern has long been associated with the Nordic region. Sweden hosted the 1972 Stockholm Environment Conference, which was the precursor, 20 years later, of the 1992 Earth Summit in Rio de Janeiro. The concept of sustainable development was deified by the United Nations Commission on Environment and Development, or Brundtland Commission, which took its name from the woman who chaired it, Norway’s former Prime Minister Gro Harlem Brundtland. It was following the publication of the commission’s report in 1987 that the Nordic aid agencies added the environment to their mandates. In Sweden, for example, environmental protection was added as a ‘fifth goal’ of development assistance in 1988, following the first four: economic growth, economic and social equality, economic and political independence and democratic development. Around that time, the agencies also created the new position of ‘environmental adviser’, each one hiring individuals to oversee the formulation of new environmental policies and the greening of development work. Nordic donors agree that for the environmental review process to be meaningful, EIAs must be impartial. ‘When we use public funds to support

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hydro power development, we are bound to certain principles…. EIAs should be systematically used in development aid,’ said Norway’s Environment Minister Thorbjørn Bernsten in 1994. ‘It is crucial that the EIA is done at the right time, not only before the decision is made, but before the project design is done. …It is not an empty exercise’ (Bernsten 1994). In reference to the Epupa Falls hydro project in Namibia, Sida’s Astrid Dufborg made a similar plea: ‘[Certain questions] need answers before the design is made. We have to maintain a position of being able to say yes or no to a project. [To do this] we have to have basic information first’ (Astrid Dufborg, Interview, 19 April, 1995). Sida’s environmental adviser since 1987, Mats Segnestam has also emphasized the importance of ‘hiring highly professional, independent reviewers to give their frank comments’ (Mats Segnestam, Interview, 21 March, 1994). The former Director General of NORAD, Per Grimstad, meanwhile, described Norway’s environmental review process for hydro dams as follows: It is legitimate to be a supporter or opponent of the various projects presented for consideration. Advantages and disadvantages must be weighed against each another. By means of an open debate free of prejudice, contradictory opinions can be brought out into the open. The role of the Norwegian authorities and of NORAD is to listen to both sides and to seek compromises which can be lived with by all the parties concerned. (Grimstad 1994) The Swedish and Norwegian aid agencies in the two countries handle the review process differently. Yet the pressure to finance dams is so overwhelming that the end result seems to be the same. In Norway, EIAs are performed by the consultancy firms, and are then sent out for comments by NORAD to various government agencies outside the development bureaucracy. The first is the Norwegian Water Resources and Energy Administration (NVE). The NVE then forwards the studies to the Directorate for Nature Management (DN), which is Norway’s environmental protection agency, and on occasion, to the State Pollution Control Authority or the Ministry for the Environment. Their comments are returned to NVE, which compiles them, and sends its own recommendations back to NORAD. The practice of soliciting professional opinions from external government institutions was started in Norway in 1990, in an attempt to apply similar procedures with foreign projects to those used domestically. After three decades of experience in the Norwegian dams debate, the head of DN s environmental impact assessment department, Ola Skauge, feels that Norwegians have acquired an understanding of the environmental impacts of hydro power from which their counterparts in developing countries could benefit. But breaking out of the narrow technical view of river management, he insists, is a process which will take years:

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I get more patient as the years pass. I am talking about losing the battles but winning the war. One case can be lost, but that has an effect on the next case that isn’t always obvious at the time. It may be that such a project is never raised again…. We must see this in a long-term perspective. Just having an external agency reviewing the EIAs as part of the regular procedure is already a big improvement. (Ola Skauge, Interview, 10 April, 1996) For Svein Båtvik, the tropical ecologist hired in 1990 by Skauge’s department to review the EIAs for dams that NO RAD is considering, it has been an uphill struggle. Of 17 dam projects sent to him between 1991 and 1996, Båtvik recommended against financing most of them on the grounds that the ecological and social impacts had not been studied properly. NORAD ignored DN’s criticisms and financed all the projects except one: the Lesotho Highlands project. In that case, the Aid Minister, Kari Nordheim-Larsen, refused to approve soft financing because the contract in question was the first in a series of dams whose cumulative environmental impacts had not been studied. It is widely believed, however, that her real concern was the political implications of subsidizing a project that benefited South Africa at a time when apartheid was still in operation. (In contrast, Sweden’s BITS approved soft credits to ABB for the Lesotho project.) Another part of the external review process at NORAD was the hiring of two outspoken environmental advisers. They were both trained biologists: Thor Larsen had done research on polar bears in northern Norway and Ian Bryceson, a Tanzanian, had worked primarily on coastal and marine issues at the University of Dar es Salaam. Their mandate was to give their professional opinions on the environmental component of NORAD’s work. This included commenting on prospective dam projects. Like Svein Båtvik, Larsen and Bryceson were highly critical of most of the projects that they saw over the years—from Narmada, Pak Mun and Pangani to Muela, Theun Hinboun, Pangue, Epupa and Kihansi. Being employees of NORAD, they found themselves in a permanent battle with NORAD’s ‘pro-dam’ bureaucrats, and with the Director General, Per Grimstad, whose sympathies with the Norwegian industry lobby were well known (he had worked at Norconsult before coming to NORAD). Though it was the advisers’ job to review the consultants’ reports, these were sometimes withheld from them and then sent for comments at the last minute. They were often ordered not to release certain documents to the public (in violation of the freedom of information law) and were even censored by the Director General at public meetings. Notwithstanding Grimstad’s call for an ‘open debate’, his own opinion was that it is unfair to impose on developing countries environmental standards that Norway did not adhere to during its own industrialization phase. Taking the logic one step further, he suggested that insisting on rigorous EIAs violated the principle of recipient government responsibility and was ‘both wrong and arrogant’.

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The poorest countries seldom have the resources necessary for the construction of large scale power projects by themselves, and these often turn to Norway. Our country has the necessary expertise, technology and money. This places us in a position of power. But it is a power which cannot be wielded without a certain bitter taste…. (Grimstad 1994) Under Grimstad’s leadership, NORAD’s development assistance was directed steadily away from the least-developed countries, and came increasingly to benefit Norwegian companies, The environmental advisers found their efforts to raise environmental concerns thwarted at every turn—to the point that they wondered why they had been hired in the first place. By hiring people who were radical in the eyes of critics, NORAD used Bryceson and Larsen as an ‘alibi’, while the advisers themselves felt like ‘environmental hostages’. We were not raising luxury problems. These are the negative social and ecological and economic impacts that technical interventions can have on the poorer parts of these societies. Typically, the conflict is between the central government and foreign investors, and the poor farmers and fishers. It’s not in the economic interest of the poor to have their lives destroyed…. Even if you have good procedures in place, if they are not followed properly, what is the point? (Ian Bryceson, Interview, 25 March, 1996) After years of failing to bring ecological and social concerns into the decisionmaking process, particularly for the financing of hydro projects, both Bryceson and Larsen quit out of frustration in 1996. SIDA’S EXISTENTIAL CRISIS In Sweden, the approach to the environmental assessment of aid-financed hydro projects differs mainly in that Sida does not send studies outside the aid bureaucracy for external review. In the opinion of environmental adviser Mats Segnestam: ‘Sending analyses out to Swedish government bodies wouldn’t be wise because very few have direct experience of the vulnerability of tropical ecosystems. There would be a risk of missing important aspects’ (Mats Segnestan, Interview, 21 March, 1994). Moreover, in stark contrast with the adversarial role played by Ian Bryceson and Thor Larsen inside NORAD, Segnestam did not, as a rule, comment on EIAs for power projects. Many of the older officials have a faith in national firms, combined with a perception of Swedes as being genuinely concerned with the plight of the world’s poor, that makes external review seem unnecessary. A Deputy Director General of Sida, Sten Rylander, who lobbied hard to secure aid finance for the controversial Epupa Falls project in Namibia, said:

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I feel we can do this better than France, Germany, Canada or the Americans. They are just there to rip off Namibia. Their EIAs were not serious. ... I feel that in Sweden and Norway, we have a track record in Africa about the building of hydro-power plants. In Tanzania, Kenya, Zambia. That’s why they like us. Our people give confidence. (Sten Rylander, Interview, 22 January, 1996) For the first two decades, Sweden led the Nordic block with a style of aid that was unashamedly ideological and in conflict with that of the United States, and that had an explicit goal of targeting the poorest groups. By the 1980s, with the Cold War coming to a close, these altruistic intentions began to make way for more pragmatic commercial self-interest. A working group on development aid set up by the Swedish conservative parties referred to the old approach as ‘overly optimistic—to the point of being naive’ (SASDA 1994:9). They pushed for a greater proportion of aid to be tied to Swedish industry. The differences between these two perceptions of aid were reflected in the division of the aid bureaucracy into two separate agencies. BITS, the Swedish Board for Industrial and Technical Cooperation, was essentially the tied aid arm of Swedish development assistance, offering aid finance for Swedish companies operating in the Third World, while SIDA (with capital letters) handled the whole range of development projects. BITS had no environmental policy, no environmental expertise on staff, and Segnestam’s mandate to ‘green’ Swedish aid did not extend to BITS. The two agencies were merged to form a new organization called Sida (with small letters) after a restructuring of Swedish aid in July 1995. The attempts to harmonize policies on issues such as energy and the environment have made the tension between the two views of aid even more visible. Nowhere more so than with dams. Projects like Pangue, Epupa and Arun 3 that were approved by BITS before the merge would not have been acceptable to the old SIDA. On the one hand, senior bureaucrats still see Sweden as the kind and progressive member of the OECD. When Pierre Schori visited the Mekong region in 1995, he told Thai journalist Malee Traisawadichai: ‘When we go into energy projects, we make it a point that everything done is in harmony with the people living in the area as well as the environment. We are very sensitive on this issue, given our own environmental profile and policy’ (The Nation, 16 June, 1995). On the other hand, there is a realization that industry depends on aid subsidies. Without them, Sweden could be left behind. Rylander’s comments reflect Sida’s existential crisis: Norway is cleverer than Sweden from a commercial point of view. We are among the world leaders in hydro power, but Norwegians identify a package which is attractive from the point of view of procurement, well suited to Norwegian companies…and Swedes get left with the bits and pieces.

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If we stay in hydro power, maybe we should play the same game. It’s not the prime motive to promote our commercial interest, but we could be smarter…. The aid business is not a naive thing any more. If you don’t understand what’s going on you will be taken over by others. It’s a bit ugly in that way. Clearly, Sida has to choose. Sweden is already playing the game’, but to play harder, as Norway is doing, would mean letting go of the old image of Sweden as the vanguard of progressive development thinking. What would it take for environmental considerations to be incorporated into dam building in a meaningful way? If EIAs were impartial, would the decisionmakers in the Nordic aid agencies be prepared to stand up to the industry lobbies and cancel—or substantially modify—projects, even after millions had been spent on preparatory studies? Or if EIAs continued to favour projects, might donors rely more heavily on independent external reviewers who have no commercial interest in seeing projects realized? The one thing that seems to have influence on the current mechanism of ‘pervasive appraisal optimism’ is pressure from civil society. It was, after all, the combination of a peasant movement in India, enlightened engineers in Nepal, fisherfolk in Thailand and lobbyists in Washington, among very many others, that forced the rethinking on dams at the World Bank. In spite of the rhetoric, the Nordic donors seem to have remained relatively immune to criticism of projects from recipient countries. This is partly because the political situations in many of the programme countries make open debate difficult. Yet of all the countries in the OECD, civil society in Sweden and Norway has perhaps the greatest potential to influence their development aid agencies. With their strong environmental movements, free press, open access to information laws, and extensive experience with dam-building politics, Nordic citizens are uniquely positioned to make aid more accountable to tax-payers in the North. And, at the very least, to ensure that aid is not hazardous to the ostensible beneficiaries, the poor in the South. REFERENCES Beard, Dan (1994) Keynote address to the International Commission on Large Dams (ICOLD), Durban, South Africa, 9 November. Bernsten, Thorbjørn (1994) Speech at NORAD Hydro Power and Environment Conference, Oslo, 12 September. Besant-Jones, John (1994) ‘A view of multilateral financing from a funding agency’, in Financing Hydro Power Projects 94, Conference Proceedings, London: International Waterpower and Dam Construction. FIVAS (Association for International Water and Forest Studies) (1996) Power Conflicts: Norwegian Hydro-power Developers in the Third World, Oslo: FIVAS. Grimstad, Per (1994) ‘Listen to countries in the South’, in Innsyn, Norwegian Agency for Development Cooperation, Oslo.

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Morse, Bradford and Berger, T. (1992) Sardar Sarovar: The Report of the Independent Commission, Ottawa: Resource Futures International. SASDA (Secretariat for Analysis of Swedish Development Assistance) (1994) Is Swedish aid rational? A critical study of Swedish aid policy in the period 1968–1993, Ds 1994: 75 Report 2, Ministry of Foreign Affairs, Stockholm. Skanska AB (1995) The World of Skanska, Sundbyberg: Riksby Tryck. Sklar, Leonard and McCully, Patrick (1994) Damming the Rivers: The World Bank’s Lending for Large Dams, International Rivers Network, Working Paper 5, November 1994, San Francisco.

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Map 3 The Theun Hinboun Dam

7 VATTENFALL ABROAD Damming the Theun river Ann Danaiya Usher and Gráinne Ryder

The Lao People’s Democratic Republic opened its borders in the mid-1980s, thus ending more than a decade of isolation from the capitalist world. For the mountainous, land-locked nation that suffered untold damage during the war, hydro power has emerged as an eminently saleable commodity on the international market. Indeed, so attractive appear the prospects of exploiting this ‘white gold’ that dozens of projects are being planned. A combination of political, geographical and economic conditions in Laos has spurred a race for hydro power on a scale and at a speed that is unprecedented in south-east Asia. While this race has attracted the dam builders of the world, all in frantic competition to close deals, it is a Nordic project that managed to outpace all the others. Theun Hinboun, a 210-megawatt hydro dam currently under construction on the Theun river, will be among the first to begin operating in 1998. For the two Nordic utilities that are part-owners of the project—Sweden’s Vattenfall and Norway’s Statkraft—Theun Hinboun also marks a first, as neither has ever invested in a power dam abroad. How, then, did the Nordics win this race in one of the world’s potentially hottest dam-building countries? And why did utility companies that had only ever built dams in the Nordic region pick Laos as the site of their first international venture? The answers to these questions lie in the close links between business and development assistance; a product of the ‘dams as aid’ phenomenon. Sweden earned its reputation in Laos through an independent and outspoken foreign policy during the war years of the 1960s and 1970s. Sweden vociferously opposed US military involvement in Vietnam, and criticized the American government for extending the war into the two neighbouring Indo-Chinese countries. When US troops invaded Cambodia in May 1970, the Prime Minister, Olaf Palme, condemned this ‘penetration of the American war machine’ and warned that Laos’ fragile neutrality could also be undermined (Palme 1970:111, 113). The following February, when South Vietamese troops entered Laos, the Foreign Minister, Torsten Nilsson, declared that ‘once again alien combat forces have intruded without permission on the territory of another country…This contempt for the integrity of a small nation should be branded as it deserves’ (Nilsson 1971:177). With these concerns, Sweden gave humanitarian assistance to Laos starting in 1974, and in 1977 the Swedish International Development Authority (SIDA)

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established a full country programme, one of the first Western countries to do so. The emphasis of the Swedish position from the start was on the right to selfdetermination and independence of a small state. As Palme said: ‘For us what was at stake [in the Indo-China War] was the defence of the right of the small nations to shape their own future’ (Palme 1970:111). Yet SIDA did not support Theun Hinboun directly. It was Norway, which has neither an embassy in Vientiane nor a history of supporting projects in Laos, that provided grants for the environmental and technical studies for the dam. Nevertheless, Sweden’s goodwill and the Lao people’s trust of Swedes in general remained, in the estimation of the Nordic builders of Theun Hinboun, at the heart of the dam project’s success. Theun Hinboun bears many similarities with other projects in progress in Laos; the electricity will be sent across the Mekong and sold to the region’s largest energy-consumer: Thailand. But it is portrayed by its Nordic proponents as ‘kinder and gentler’ than other dams in the pipeline because of its smaller size, because of the fact that the Lao government maintains a majority ownership, and, not least, because of the involvement of Nordic interests. Nordic agencies and companies tend to view themselves as being less predatory than their competitors—like Sweden in the Palme days, when ‘good guys’ and ‘bad guys’ were easier to identify—as having the good of Laos and other poor countries at heart. The builders claim that they are helping their Southern brothers by transferring a model of development that made the Nordic countries the rich, industrial powers they are today. Theun Hinboun is one of the smaller hydro projects in the Lao pipeline, but its social and ecological impacts were not seriously studied, and only US $1 million has been allocated by the builders for overall compensation. Each year for the next 30 years, Vattenfall and Statkraft will earn almost US $4 million from their investment, while Lao society will be saddled with whatever other costs come up. The thousands of farmers affected by the dam were never informed about the project, much less consulted. With a 40-kilometre stretch of river dried out and inundation upstream, they risk losing seasonal agricultural land, and rich and diverse fisheries, on which they depend totally for their food and their livelihood. Moreover, a dozen key species, including tiger, elephant, macaque and gaur, could be seriously affected by the reduced dry-season flow. If this project is in fact kinder and gentler than the others, the future for the Lao environment and for people dependent on intact riverine and forest ecosystems looks bleak indeed. As Korean, Australian, Italian, Japanese and French companies stake their claims on one river after another in preparation for building even bigger dams than Theun Hinboun, questions must be raised about this ‘rent-a-river’ approach. Because of the lack of laws and institutions, and even an absence of Lao personnel who read enough English to wade through voluminous project documents, the country risks losing control over one of its most valuable resources if even a fraction of these projects are realized. The mad dash for hydro could represent as serious a threat to Lao sovereignty in the long term as the colonial ambitions of foreign powers did in the past.

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THE THEUN HINBOUN DAM In Laos, where most water eventually flows to the Mekong, the Theun river is its second largest tributary. The Theun watershed encompasses nearly 15,000 square kilometres of forested mountains and river valleys dotted with ricegrowing communities, mainly of the Lao/Tai cultures. Villages tend to be small, with 100 or 200 inhabitants, and self-sufficient, meaning that families either grow or harvest from the forest and streams many of their basic needs. The site of the Nam Theun Hinboun Dam is between Bolikhamsay and Khammuan provinces on the Theun river, some 100 kilometres upstream of the river mouth. As with most dams being planned in Laos today, the electricity to be generated by Theun Hinboun will be sold across the border to the Electricity Generating Authority of Thailand (EGAT). Ownership in the US $280 million project is divided among three entities. The Lao state utility Electricité du Laos owns 60 per cent of the project, partially covered through a US $60 million loan from the Asian Development Bank (ADB). Nordic Hydro Power, the second owner, is a consortium of the two largest Nordic hydro utilities, Sweden’s Vattenfall and Norway’s Statkraft. This company owns 20 per cent of Theun Hinboun, with revenues to be split equally between the two. MDX Public Company, a Thai real estate firm, owns the remaining 20 per cent. This arrangement will hold for 30 years, after which, it is assumed, ownership will revert to the Lao government. In addition to the ADB loan, the Norwegian Agency for Development Cooperation (NORAD) has subsidized this project through three grants to the Lao government: in 1993, US $1.5 million for a project survey, including an environmental impact assessment; in 1994, US $5.5 million for technical design; and in 1995, US $1 million for supplementary environmental studies and a water management plan. Norconsult (formerly named Norpower), Norway’s largest consultancy firm working on hydro projects in the Third World, was given contracts for the first two. The third was awarded to a smaller competing firm, Norplan, which sub-contracted parts of the study as follows: vegetation and wildlife to the Wildlife Conservation Society; water quality, minimum flow release and aquatic ecology to the Norwegian Institute for Water Research (NIVA) and the Norwegian Institute for Nature Research (NINA); hydrology, erosion and sediment transport to the Swedish firm Hydroconsult AB; and land use and rural development to the Vientiane-based Swedish firm Burapha and the Bangkok-based MIDAS. Theun Hinboun is a trans-basin diversion project, which will divert some 100 m3/s (cubic metres per second)—almost a quarter of the Theun s annual average and double the dry-season flow—into the Hai, a tributary of the Hinboun river, which in turn flows into the Mekong; hence the name, Theun Hinboun. According to Norconsult, project designers have made use of the 240-metre difference in elevation between the Theun and Hinboun basins for power generation. Water will be diverted by the 25-metre-high dam to the power station and then through a 4-kilometre tailrace canal into the Hinboun river, and back to the Mekong about 30 kilometres upstream from Thakkek. Electricity will be sent

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to Thailand via a 230-kV transmission line, 100 kilometres on the Lao side to Thakkek and, from the border, another 90 kilometres to the connection point at Sakon Nakhon. The Theun rivers mean annual flow is 460 m3/s, with dry-season flows of about 45 m3/s. Diversion implies a complete drying out of a 40-kilometre stretch downstream of the riverbed until the first inflowing tributary, Nam Mouan. The consultants report assumed that water would be released from the dam only during electricity generation, and stated that the river would therefore be ‘reduced to a series of pools’ from February to April during years of normal rainfall. The project was approved with no clear agreement on maintaining a minimum flow in the river basin, and as of early 1996, 18 months into construction, agreement had still not been reached. Upstream, the reservoir will extend 24 kilometres along the Theun and 14 kilometres along the principal tributary, Nam Gnouang, with smaller intrusions into two other rivers, the Nam Ao and the Nam Pheu. There are plans for several more dams on the Theun river, which has not previously been exploited for hydro power. The designers of Theun Hinboun have assumed that a much larger dam will be constructed upstream by the year 2000—the 600-megawatt Nam Theun 2. Up to early 1996, however, approval of this project was still delayed on account of concerns about its far-reaching environmental impacts. (A Vattenfall official has said that the company will not invest in Nam Theun 2 for environmental reasons.) If built, Nam Theun 2 will cut the flow into the Theun Hinboun by half, thus exacerbating downstream effects and somewhat decreasing the electricity-generating potential. The site of another planned dam, Nam Theun 1, is downstream of Theun Hinboun, near the confluence with the Mekong river. It is tricky to estimate the profits that will accrue to the Lao government from the operation of this hydro dam, as it depends on several variables: on upstream development; on the amount of water that is released in the dry season to maintain a minimum flow in the riverbed; and, most crucially, on whether the Lao state will end up paying for further compensation and mitigation measures. None of these issues is yet resolved. The report on Theun Hinboun presented to the board of the Asian Development Bank in 1994 stated that the government of Laos would earn US $25 million annually (Asian Development Bank 1994:24). Norconsult based its 1993 financial analysis of the project on an economic life of 25 years for electrical and mechanical equipment, and a peak price ranging from 5.8 to 8.69 cents per kilowatt-hour (Norpower 1993). But the actual price negotiated with the Electricity Generating Authority of Thailand (EGAT) was well below this range: 4.3 cents per kilowatt-hour. If the plant generates about 1, 250 GWh per year (assuming that Nam Theun 2 is built and that there is no minimum flow and no further compensation), Theun Hinboun will earn about US $54 million from electricity sales. According to Gunnar Wallin of Vattenfall, this works out at an average annual profit for the Swedish company of US $1.8–1.9 million over the 30-year contract. This is comparable to the 16 per cent profit margin that the company earns on Swedish projects. Statkraft, whose share in

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Theun Hinboun is also 10 per cent, would be in the same situation (Gunnar Wallin, Interview, 16 April, 1996). As the Lao government s share in Theun Hinboun is 60 per cent, its profit would be about US $ 11 million per year. The Theun Hinboun project will affect an estimated 25 villages, and more than 5,000 people, including 13 villages upstream along the Nam Theun and Nam Gnouang rivers and 12 villages downstream along the Nam Hai (MIDAS and Burapha 1995:9). It will also have a profound effect on the rich flora and fauna. A 1992 study estimates that there are more than 100 species of fish in the rivers, streams and swamps of the project area (Department of Livestock 1992:51). The Theun river basin contains one of south-east Asia’s most important forest areas with a wide range of habitat types and an astonishing diversity of wildlife, including populations of elephant, peafowl, clouded leopard and various primates. Near the dam, there are three protected areas—the Nakai Nam Theun National Biodiversity Conservation Area upstream, the Nam Kading National Biodiversity Conservation Area downstream, and the Khammoune Limestone Protected Area. The portion of the river being dried out has been described as one of Laos’ ‘least disturbed’ rivers from a wildlife conservation point of view (Wildlife Conservation Society 1995:1). Nonetheless, the NORAD-financed Norconsult environmental impact study concluded that the project will have ‘significant beneficial environmental impacts’, while the only identified adverse impact of the project is the reduction of flow below the dam site (Norpower 1993:1–7). Furthermore, it gave assurances that the project would require no resettlement of local people, and have no negative impacts on fish. These conclusions were, as we shall see, disputed by most parties who reviewed the documents—various Norwegian government agencies, the press and non-governmental organizations in Norway and Thailand, and even the environmental adviser of Vattenfall—with the result that NORAD was forced to concede the poor quality of the report, and to pay for supplementary studies. These were extremely critical of Norconsult’s findings. However, since they were only completed at the end of 1995, a year after construction began, they had no impact on the decision-making process or design of the dam. Before the supplementary studies had even been commissioned, NORAD again hired Norconsult to do the technical design for Theun Hinboun. Norconsult called Theun Hinboun a ‘relatively small project’—a somewhat misleading description. The International Commission on Large Dams (ICOLD) —the professional association of dam builders—defines a large dam as one which is 15 metres high. Theun Hinboun is 25 metres high. By Nordic standards, in terms of its generating capacity, it might be categorized as an average-sized dam, as the most powerful dam in Norway has a capacity of 1,240 megawatts and the most powerful in Sweden, 945 megawatts. Certainly, though, in comparison to some of the other dams being planned in Laos and on the mainstream of the Mekong river, Theun Hinboun is at the smaller end of the scale. Yet surely neither the Nordic situation nor the decades-old megaplans for the region are appropriate points of reference for assessing what Theun Hinboun will mean for Laos. Rather, the project should be seen in the local context. There

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are currently two dams generating electricity in Laos, the Nam Ngum Dam (150 megawatts) and the Xeset Dam (45 megawatts), built during the 1970s and 1980s, respectively When it is completed in 1998, barring the completion of other projects ahead of schedule, Theun Hinboun will be the largest infrastructure project in Laos, doubling the country’s installed electricity-generating capacity. MEKONG RIVER POLITICS While Theun Hinboun will be the first project in this era of privately—or quasiprivately—financed hydro, plans for dams in the Mekong basin are hardly new. In fact, the plans date back to the 1950s, when a retired general of the United States Army Corps of Engineers, Raymond Wheeler, headed a mission to study the hydro potential of the Mekong river. Wheeler’s recommendations resulted in the creation in 1957 by the United Nations of the Bangkok-based Mekong Committee, a body whose mandate was to promote and coordinate development of the lower mainstream. Decisions were to be made by the governments of the four so-called lower riparian countries—Thailand, Laos, Vietnam and Cambodia —with extensive financial and technical assistance from Western donor agencies such as the United Nations Development Programme (UNDP). Wheeler and his team envisioned a great cascade of seven dams along the Mekong’s mainstream from northern Laos down to Cambodia’s Great Lake that would produce more than 20,000 megawatts of electricity (Lohmann 1990:62). Wheeler’s men proposed that massive structures be built along the mainstream and dozens more on the tributaries, in the tradition of American megadams like Hoover and Grand Coulee. The first of these was to be ten times higher than Theun Hinboun, and much larger than any dam that has ever been built in the Nordic region. The 250-metre High Pa Mong alone would have generated 4,800 megawatts of electricity, necessitating the removal of a quarter of a million people on the Thai and Lao sides of the river. But decades of war made the construction of such large infrastructure projects impossible. And for 38 years, the Committee sat virtually idle, unable to fulfil the mandate that General Wheeler had inspired. The leap from High Pa Mong as it was envisioned in the 1960s to the comparatively tiny Theun Hinboun of the 1990s reflects the emergence of public concern about the ecological and human rights impacts of dams over the past 30 years. For dams proponents, the attraction of a project with no negative environmental impacts and no necessary resettlement—as the Norwegian consultants studying Theun Hinboun claimed—is not hard to understand. Today Western donors who must answer to their environmentally conscious constituencies in times of shrinking aid budgets are becoming wary of very large dam projects. One clear example of this wariness is Sweden’s stated position against dams on the Mekong’s mainstream. The position itself, coupled with the aid agency’s failure to defend it, illustrates the tensions within the aid establishment about how

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to balance professed environmental concern with the desire to subsidize the international activities of national dam-building companies. The Swedish International Development Authority (SIDA) had during the 1980s been one of the major bilateral donors (along with Australia and the Netherlands) of the Mekong Committee, providing finance mostly for environment-related work in the basin. In 1990, Erik Skoglund, a Swede working at the Committee in Bangkok hired through SIDA, came into conflict with then Executive Agent of the Mekong Committee, Chuck Lankester, over Pa Mong. By this time, the project had been radically scaled down (and renamed Low Pa Mong), largely to reduce the size of the reservoir and the number of people to be resettled. Lankester now wanted to push it through, as this would be the first dam on the lower mainstream and a clear sign of vitality for an agency whose very existence many were coming to question. But Skoglund had reservations about the resettlement—Low Pa Mong would cause 60,000 people, mostly poor farmers, to be forced out of their homes—as well as the impact on fisheries. ‘Fish production will go down and it will cause a lot of damage. This is not just an environmental issue. It’s a livelihood issue, especially for poor people. To destroy that resource is just not acceptable’, he said (Development Today, December 1994). He expressed these concerns at the time in an interview with the regional magazine, The Far Eastern Economic Review (Far Eastern Economic Review, February 1991). Skoglund recounts that Lankester was furious at being crossed publicly and, in a fit of rage, told the Swede to ‘reconsider his service to the Mekong Committee’. On second thoughts, the Executive Agent changed his mind. But Skoglund resigned anyway at the end of his first term, disillusioned with the stifling atmosphere at the Committee under Lankester’s leadership. Before he left, though, a SIDA mission visiting Bangkok made its support for Skoglund’s position clear: Without taking a stand on whether [Mekong] mainstream projects like the Low Pa Mong are economically and technically feasible and environmentally acceptable, the members of the SIDA delegation expressed [the opinion] that…it would be difficult for the [Commitee] to find soft financing for such projects. Resettlement schemes involving 60, 000 people constitute a major obstacle to financiers such as SIDA… and other financiers including the development banks. (Agreed Minutes 1991) If the row had not occurred, would SIDA have made such a clear statement on mainstream dams? To my knowledge, no other bilateral or multilateral aid agency has come close to point-blank opposition to large dams on any river. One can only speculate. Following the Skoglund fiasco, SIDA decreased its support for the Mekong Committee over the 1992–4 period because of its lack of a clear mandate. This was reportedly due also to concerns about the overall environmental impact of dams

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on both the mainstream and tributaries, as well as Thailand’s water-diversion projects, which will decrease the flow into the Mekong from the Thai side. ‘The whole river basin is a very fragile system. Any project can have consequences downstream. If you build a dam, environmentally you must be very careful, especially with the Mekong Delta, SIDA’s Mikael Bahrke said (Development Today, May 1995). Renewed finance from SIDA was conditional on a new agreement in the basin that addressed these issues. In April 1995, that agreement was signed by the four regional governments at a ceremony in Chiang Rai, and a newly named Mekong River Commission was established in place of the four-decades-old committee. By all accounts, the new agreement is a weakening of the 1957 founding statute of the original committee that had given riparian states the right to veto any project affecting the mainstream. The new document is replete with rhetoric about the importance of sustainable development and environmental protection. But the 1995 accord does not empower downstream states to take action against upstreamers. (China, not yet a member of the commission, has already built the first dam on the Mekong’s mainstream without discussion with downstream neighbours.) Nor does the agreement deter states from diverting water from the Mekong (as Thailand is doing) or damming its major tributaries (as Thailand has done and as Laos is planning to do on a major scale). There can be no question about the new commission’s raison d’être being to promote dam building (Bangkok Post, 31 March and 11 April, 1995). In December 1994, the Mekong Secretariat published a study financed by the UN Development Programme, entitled ‘Mekong Mainstream Run-of-River Hydropower’. It identified 11 dams on the mainstream whose ‘scale of development [was] deliberately constrained to avoid or to minimize impacts’ (UNDP 1994: 1). Still, most of these are massive projects with generating capacities of over 1, 000 megawatts. Such developments are worrying to environmentalists in the region. Some 30 Thai non-governmental organizations and local water-basin groups met in Chiang Rai at the time of the founding meeting of the Mekong Commission. They expressed opposition to the influence of the dam-building industry in the new agency, and concern about Thai plans to divert Mekong water into the Chao Phraya basin to solve Bangkok’s water problems. In their statement, they pointed to the ecological complexities of the Mekong river basin, particularly the spectacular diversity of fish species. They described the basin as a ‘centre of great cultural diversity, representing a heritage that is both unique and of great value for the world’ (Thai NGO Statement on Cooperation for the Sustainable Development of the Mekong River Basin, 4 April, 1995). The statement was significant because it marked a broadening of concern of the Thai environmental movement, whose opposition to dams had effectively brought the power-dam era in Thailand to a halt. Western donors (including SIDA) ignored these efforts, however, and unanimously hailed the new commission as an example of improved regional cooperation. In spite of SIDA’s explicit opposition to damming the mainstream,

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the agency renewed and increased its three-year support for the commission’s environmental work after April 1995. SIDA argued that it would not be directly involved in Mekong dam building, but would strengthen the environmental work of the new commission. While SIDA threw its support behind the Mekong Commission, it did not end up funding Theun Hinboun. In the same year that the agency made its position on Mekong mainstream dams clear, SIDA decided to pull out of the energy sector in Laos. Jan Bjerninger, who was in charge of the Infrastructure Division at the time, explained the reason for this: most of Sweden’s support to Laos at the time was going to three areas—road building, forestry and hydro power. SIDA had financed Laos’ second dam, the Xeset, which had been built ‘purely for export’ to Thailand. The agency reasoned that further development aid funds should not be used to underwrite Thailand’s electricity production. ‘We felt that it would not be reasonable to subsidize these kinds of activities with grant money…once was enough’, Bjerninger said (interview, 4 March 1995). Though Sida’s historical and political contribution to Theun Hinboun is indisputable, the grant money for the project came instead from the Norwegian aid budget. The deal was quietly negotiated quite independently of all the Mekong Commission politics and posturing since 1992. It was finalized without the direct involvement of SIDA, out of the view of Thai environmentalists and the general public, and certainly, without the knowledge of people living in the Theun and Hai river valleys. (MIDAS/Burapha 1995:17, FIVAS 1996b: 5). While Theun Hinboun is a product of regional water politics, it has come about through a separate process that may have more to do with the international ambitions of the Nordic hydro industry. NORDIC CONNECTIONS WITH THEUN HINBOUN The Nordic company that owns 20 per cent of Theun Hinboun was formed to implement this project in 1993 by Vattenfall, the Swedish state electricity utility, which has built many of Sweden’s dams, and Statkraft, its Norwegian counterpart. Vattenfall’s Anders Hedenstedt, originally in charge of Theun Hinboun, described this consortium as ‘the biggest hydro company in the world with a combined 17,000 megawatts of installed power [in the two countries]’ (The Nation, 13 August, 1993). Theun Hinboun marks a unique shift for these utilities because it is the first dam project that either one has undertaken outside the Nordic region. Partly, this shift is a necessary reponse to the widespread public resistance to dams in Sweden and Norway that has stopped construction of all but the smallest projects at home (Lövgren 1994:56). Since 1987, Sweden’s Natural Resources Act has formally forbidden the exploitation of the country’s last four freeflowing rivers—the Torne, the Kalix, the Pite and the Vindel—for hydro power. The bitter struggle over the Alta project also brought dam building to a virtual stand-still in Norway. Remarking on the political costs to the government of pushing Alta through, Norwegian anthropologist Terje Brantenberg commented

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that Alta became like a ‘unit of measurement, so that today when Norwegian politicians are considering a controversial project, they ask if it is worth another Alta’ (Terje Brantenberg, Interview, May 1995). For Vattenfall’s senior manager Karl-Erik Norlander, Theun Hinboun represents a natural evolution for Swedish dam builders. ‘We have completed the implementation stage in the Nordic countries. There are very few new projects in Sweden and Norway. But we still need professionals in the field, so we go abroad to find opportunities to use our skills’ (Usher 1994). As the home market shrinks, the dams industry in the Nordic and other regions has found alternative sites in the Third World. But ownership is something new. We might well ask: why start with Laos? Part of the answer apparently has to do with the traditional reliance of the dams industry on development aid budgets, and with SIDA’s presence for years in Laos. Sweden’s anti-war policy during the 1970s caused many Laotians to view the Nordics in a favourable light, an historical relationship from which Nordic dam builders are now benefiting. ‘SIDA has been working in Laos for more than ten years, and the Lao people tend to trust the Swedes’, explained Norlander, who spent two years in Vientiane. Personal contacts played a key role in putting together the deal for Theun Hinboun, he said, describing the ‘close links’ between business opportunities and development assistance (Usher 1994). Thus, although Sweden provided no direct aid money for Theun Hinboun, one such link was clearly the Xeset Dam in southern Laos, whose construction began in 1981. Finance was provided by Sida, NORAD and the ADB, while Norconsult and the turbine manufacturer Kvaerner won contracts on the project. Gjermund Saetersmoen of Norconsult, who worked on Xeset from the beginning, lobbied actively for Theun Hinboun with Lao officials (Gjermund Saetersmoen, Interview, June 1994). This consultant’s importance as a middle man—connecting the Lao government, NORAD, the Asian Development Bank and his own firm—was evidenced by a leaked letter from the then Lao Minister for External Economic Relations, Phao Boonaphol, to Norway’s Ministry of Foreign Affairs. In the letter, which arrived at the ministry in Oslo in January 1992, Phao requested a grant to pay for a feasibility study of Theun Hinboun to be carried out by Norconsult. ‘In order not to lose a whole year of time it is very important that [Norconsult] can continue and conclude the field investigations for the feasibility study during the present dry season and subsequently be able to present their draft feasibility report by October 1992…. Mr. Gjermund Saetersmoen will give you more detailed information on his return to Norway’ (Boonaphol 1992). The request evidently bore fruit, resulting in NORAD granting Norconsult two studies worth US $7 million. Another link, according to Norlander, was Zia Noorzay, a former employee of the Asian Development Bank who now works for Vattenfall. Noorzay worked on behalf of the Bank during the 1970s on Laos’ first dam, the Nam Ngum, and thus brought to the Swedish firm knowledge of the hydro scene in Laos. Then in 1992 and 1993, Karl-Erik Norlander himself (working on behalf of Vattenfall’s consultancy firm, SwedPower) was hired by SIDA to work as an

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energy adviser to the Lao government. This contract was SIDA’s final contribution to the Lao energy sector. While in Laos, Norlander gave advice about how Laos might begin to harness some 15,000 megawatts of unexploited hydro power, and to prioritize a dizzying number of projects. At the end of two years, the Swedish consultant advised Laos to begin slowly with small projects where the government maintains a majority share in the ownership. At the top of his wish list was Theun Hinboun (Karl-Erik Norlander, Interview, 15 February, 1994). DAM BUILDING IN LAOS: THE BOOT ERA If Laos is to increase foreign exchange earnings quickly, then on the face of it, hydro power is an obvious option; one that the Lao government has embraced with fervour. A number of economic and political conditions have shaped the current craze for dam projects in particular ways. Lao PDR clearly cannot afford the minimum quarter-billion-dollar investment that a dam like Theun Hinboun would require. Laos is one of the poorest countries in Asia, with a gross domestic product of just US $1 billion and exports of US $209 million in 1994 (The Nation, 5 June, 1995). And this is only the first of several dams in the pipeline. Nam Theun 2 upstream, for example, is estimated to have a price tag three times that of Theun Hinboun (The Nation, 23 June, 1995). Dam building in Laos is thus unimaginable without foreign investors —whether public or private—playing a crucial role. The country consumes only a third of the 215 megawatts of electricity that its two main hydro dams can currently produce, selling the rest to Thailand. With no domestic market to speak of, hydro dams are being built purely for the export of electricity. This is relevant in discussions about sustainable development in general, and about dams in particular, which are normally couched in terms of the costs versus the benefits of development within a given country. With large infrastructure projects like dams, as the argument goes, a few have to suffer for the benefit of the majority. (And even then, those few are to be compensated for their losses.) In the case of the dams being built and planned in Laos today, however, the ‘costs’ will be borne in Laos by the environment and rural peoples, while the ‘benefits’ will be exported to Thailand. Apart from the cash, Laos will not gain ‘development’ in any conventional sense. Moreover, Laos shares a (NVE 1994a:11) border with the region’s most rapacious energy consumer: Thailand. Though Vietnam and Laos held talks in 1995 about energy cooperation, technical assistance with dam construction, and the possible sale of electricity from Laos to Vietnam, Thailand will probably remain the main purchaser of Laotian electricity for many years to come. By the end of 1993, peak power demand in Thailand was about 12,000 megawatts, representing an increase of over 70 per cent since 1987 (Sherman 1995:7). By far the major power user is the industrial sector, which in 1993 consumed 46.7 per cent, followed by the commercial sector, 26.5 per cent, and the residential sector, 20.7 per cent (Bangkok Post, 3 March, 1994). Planners claim that electricity

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demand in Thailand is rising by 10–15 per cent per year and could, according to one estimate, increase seven times by the year 2020 (The Nation, 5 June, 1995). Laos is banking on a guaranteed market, but Lao bargaining power is limited. The Thai energy monopoly is breaking up, and this may lead to more competitive prices and a rethinking of import contracts. The Electricity Generating Authority of Thailand (EGAT) has agreed to buy 1,500 megawatts from Laos by 2000, but Thailand is far from dependent on Laos for its energy (The Nation, 10 January, 1995). Officials of Electricité du Laos (EDL) complain, understandably, that price negotiations with their Thai counterparts have been ‘difficult’ (The Nation, 5 June, 1995). Another factor that is shaping the politics of dams in Laos is the role of the private sector under so-called ‘BOOT’—or build, own, operate and transfer— schemes. Under this arrangement, groups of investors (which in theory may or may not include the national government) finance, build and operate a dam for periods of 20–30 years, after which they renegotiate the deal, or transfer it to the government. Private investors would provide the capital that once came from development aid budgets. Such schemes differ substantially from the traditional approach to dam building in the Third World, where public money, either from the national government or from aid institutions like the World Bank and bilateral agencies, played the key role. In the name of increased efficiency and faced with privatized energy markets and a growing suspicion of subsidies for energy production, the World Bank has endorsed the BOOT concept since 1989 (Lohmann 1991:62). Nordic investors have stressed that with a majority share (60 per cent) in Theun Hinboun, the Lao government can maintain control over how the resource is used. In comparison, the government would own only 25 per cent of Nam Theun 2. BOOT schemes would, in theory, lessen the debt burden for the Lao government, transferring them to the private financiers. Laos must still repay a US $60 million loan to the ADB for Theun Hinboun, though under the old system, this loan would probably have been substantially higher. Proponents call the arrangement a ‘win—win’ situation that provides electricity for the buyer and profits for the producer. A Thai commentator describes a glowing future for Laos: ‘With its small population, dramatic topographical mix of high and low lands and strong-handed government, Laos is seen as near perfect dam land’ (Bangkok Post, 4 June, 1994). Laos could, in the most optimistic scenario, become the ‘Kuwait of Asia (The Nation, 4 March, 1994). While it might alleviate some debt worries, the BOOT system raises other tricky questions. It may become even more difficult to monitor environmental and social impacts under the BOOT system, as foreign private investors have neither a mandate to alleviate poverty nor a Parliament and citizenry to which they are legally accountable. Moreover, the BOOT scheme raises the question of sovereignty. By renting out its rivers on the basis of BOOT, a country could lose effective control over its land and natural resources. At the very worst, the Lao government could find itself in a relationship with foreign contractors that left it as much say over

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national energy policy as a vassal state in the colonial era. A SIDA-financed review warned: We…fear that the massive inflow of foreign capital that would be required to finance the planned hydropower development may jeopardise the Lao PDR’s chances of maintaining a minimum of national control over basic natural resources and, indeed, over the general economic development of the country. (DeVylder 1994:38) As a government’s share in a project shrinks, who will coordinate negotiations for electricity sales between EGAT and myriad foreign contractors? In this ‘renta-river approach’, who will guarantee that full commission on profits—the rent —is paid to the Lao government? And what condition will plants be in when they are finally handed over after 30 years? If turbines need replacing and reservoirs are filled with silt, will national governments be able to bear the costs incurred? And what if after several decades of use, as is happening in Thailand, the dams no longer work? ‘After all...there must not be just a heap of junk to be turned over [to the government after 20–30 years]’, noted the Swedish report (DeVylder 1994:38). Finally, Laos is attractive to dam builders because they are unlikely to encounter the sort of public opposition and debate that have given large dams such a bad name both in their own countries and in Thailand. Years of resistance caused the Thai government to announce in 1995 that no more power dams will be built in the country (Bangkok Post, 24 February, 1995). To Northern firms that have seen their markets shrink because of environmental concerns in the industrialized world, and have watched anti-dam sentiments in Thailand rise, Laos offers welcome relief. Vattenfall’s Hedenstedt remarked in 1993: The funny thing about [Theun Hinboun] is that there are almost no environmental problems. It’s a run-of-river dam that will not use any surface that is not already flooded during the rainy season. This is the only project in the region that seems to have no opposition. (The Nation, 13 April, 1993) Without a free press or indigenous non-governmental organizations, there is no safe forum in which to challenge such claims, and open debate within the country remains difficult. Laotian critics of dam projects, whether government officials or private individuals, tend to word their comments extremely carefully, and more often, speak only off the record. THEUN HINBOUN’S ENVIRONMENTAL REVIEW Already in 1993, Anders Hedenstedt at Vattenfall had complete confidence that the environmental study for Theun Hinboun would come up with no negative

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impacts. Offering a glimpse into the workings of ‘pervasive appraisal optimism’, he said: ‘No one anticipates a negative result. The purpose [of the study] is not to point out any dangers, but just to have an independent review. We foresee no problems with that’ (The Nation, 13 August, 1993). Delivering as if on cue, Norconsult concluded its study a few months later: The project is highly viable and well justified. Immediate implementation, which commences with preparation of final design and preparation of tender documents for procurement of plant and civil works, is therefore recommended. (Norpower 1993:1–8) Recall that the study’s main conclusions were that no resettlement would be needed, and therefore no compensation, and that the project would cause no negative environmental impacts except for the drying out of the Theun river. Fisheries, the consultants declared, would improve because of the raised water level behind the dam. Three years later, Vattenfall’s Gunnar Wallin admitted that the environmental matters had turned out to be far more complicated than first anticipated. But he noted that 60 per cent of the revenue from the project goes to the Lao government. Therefore, ‘they have more than enough if there are other secondary issues that come up, or if they want to invest in other areas. The profit can be used to buy fertilizer and replace slash and burn agriculture, which is the worst environmental problem in Laos’ (Gunnar Wallin, Interview, 16 April, 1996). In 1993, the Norconsult study was received without critical comment by NORAD industry department officials in charge of the project, who were anxious to push the project forward. It was not until the external reviewers had voiced their concerns that the public debate began. According to NORAD’s review procedure, environmental impact assessments are to be looked over by various government agencies and by environmental advisers within the aid agency. In the case of Theun Hinboun, the consultant’s report was greeted with unanimous disapproval. Following its review of the Lao project, the Norwegian State Pollution Control Authority recommended to NORAD: ‘the environmental assessment report is far from satisfactory ... we cannot recommend implementing this project on the basis of the existing data. The Norwegian Water Resources and Energy Administration (NVE) warned that ‘there is potential for far-reaching environmental and social disturbances if these matters are not taken seriously (Development Today, 15 October, 1993). In August 1993, the Lao Minister of Industry and Handicrafts, Soulivong Daragong, visited Oslo to discuss Theun Hinboun. Up to then, NORAD had not made the project documents public on the grounds that the recipient government had requested that they be kept confidential. The agency’s newly appointed environmental adviser, Ian Bryceson, who attended a meeting with the minister and other NORAD officials, raised the matter and was told that the studies could be released. According to Bryceson, that was the last such meeting to which he

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was invited. Eager to close the deal while Soulivong was still in Oslo, NORAD tried to pressure the third government reviewer, the Directorate for Nature Management (DN), to speed up delivery of its comments. DN refused, however, and Soulivong left Norway without a final decision. The Directorate’s subsequent comments on the Norconsult study were devastating in their criticism. Of the nine claimed positive effects of the project, they reported, three were ‘highly questionable’, and five were ‘rather insignificant, indifferent or liable to different interpretation’. DN also delineated numerous omissions, the most serious of which was the potential additional impacts of Nam Theun 2 (Directorate for Nature Management 1993). The Norwegian advocacy group the Association for International Water and Forest Studies (FIVAS) followed the project from 1993, and criticized NORAD for taking a sub-standard report at face value (FIVAS 1996a: 60). In 1996, following a field trip to Laos, in which they spoke to villagers in the Theun and Hai river valleys, Ellen Hofsvang and Gyrd Braendeland of FIVAS published their report, More Water, More Fish?, which confirmed that local people had not been consulted by the developers (FIVAS 1996a: 5). The Bangkok-based Towards Ecological Recovery and Regional Alliance (Terra), which monitors resource politics in Burma and Indo-China, commented as early as 1993: [The consultant] is aware that fish are a major source of protein for local people and also that fish provide people with food security in times of poor rice harvests. Inexcusably, this...is not matched by a commitment to conduct a careful and rigorous assessment of potential losses and corresponding impacts on local people. (Terra 1993) At the Nordic Dam-building in the South conference in Stockholm in 1994, Napha Sayakhoumane, Vice-President of the Lao Women’s Union (Khammuan Province Branch), raised questions about the project. She noted that the only information available to Khammuan provincial officials at the time was a twopage brief, which she described as ‘Vague and propaganda-like’. In her speech she also pointed to the impact on fisheries: The information I have is neither sufficient nor clear. [It] states that upstream of the dam, fish productivity will increase. But has there been any analysis about the impact of the deep waters of the reservoir on fish that naturally live in shallow water? What is the ecological impact of the change in water levels? This is not mentioned in the brief. The local people, here as in much of Laos, depend on fish and rice as their main sources of food. People are accustomed to using simple, traditional equipment for catching fish. If such a big change in the river takes place, what will be the impacts on the people? Who will take the responsibility for making fish productivity increase? Does the project have any specific plans for fisheries? This is not mentioned either. Who would benefit from

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such a scheme that would probably require more modern fishing equipment? On the other hand, in the stretch downstream of the dam where the river will be dried out several months of the year, what will become of the people there who also rely on fisheries? There [should] be further study of this project, to analyze deeply both the possible positive and the negative impacts. And to give a chance to local government and local people to know about these plans, so that all concerned are able to express their opinions. Or at the very least, so that local people have an idea of the changes that are coming and have time to prepare. (Sayakhoumane 1994:28) Even Per Sjöström, senior ecologist for Vattenfall, pointed to three crucial areas that were not covered in sufficient depth in the Norconsult report: water quality; fish production and fish migration; and material transport and sedimentation. He also noted the absence of concrete plans for fisheries management in the reservoir, rural electrification, irrigation, and mitigation of downstream impacts (Per Sjöström, Interview, 27 January, 1994). He insisted, however, that his company had already decided to proceed with the project, and that these concerns could be addressed along the way (Per Sjöström, Interview, March 1994). In 1995, at a public meeting with Swedish environmentalists, Sjöström defended Norconsult’s study and assured the gathering that more water in the reservoir would mean more fish. Given the widespread criticism, it is perhaps not surprising that NORAD eventually conceded that Norconsult had not performed adequately. NORAD’s deputy chief Sven Holmsen told the Norwegian press: ‘Everyone now agrees that it was a mistake from the outset…. We agree that we don’t have enough information. Relevant questions have been asked on environmental aspects of the project’ (Development Today, 15 October, 1993). The agency even admitted that Norconsult should have been disqualified from the beginning because it was, in fact, part-owned by Statkraft. Holmsen described the selection of Norconsult as something akin to ‘asking the fox to watch the geese’, and as a result of the Theun Hinboun debate, NORAD stated formally that never again would a consultant with a vested interest in the outcome of a dam project be selected to undertake its environmental impact assessment. In 1994, the agency called for an additional environmental study of Theun Hinboun to be done, and hired Norconsult’s competitor Norplan for the job. But these gestures had no impact on the dam that is being built in Laos today. True, Norplan’s supplementary studies were relentless in their criticism of the first Norconsult report, contradicting all its major conclusions. On local people’s participation in the project: ‘[Villagers] have no idea of the potential changes…. They also seem to have no choice but to accept any environmental consequences from the project’ (MIDAS and Burapha 1995:40). On the importance of fish, which Norplan agrees are likely to be degraded, possibly to the point of extinction of some species, by the dam: ‘Fish is the staple source of protein in the

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diet and is eaten at almost every mealtime. It is also a main source of income of farmers in the area (MIDAS and Burapha 1995:18). On the impact on wildlife: ‘None of the numerous threatened species located during the current survey was found [by Norconsult]…. [The report] lists various reasons as to why there were no indications of endangered species in the project area. In fact, all these suggestions are irrelevant and misleading: the conclusion concerning threatened wildlife is inaccurate and was presumably reached because fieldwork was exceptionally brief (Wildlife Conservation Society 1995:26). On the importance of riverside vegetable gardens, the supplementary study stated that these constituted an ‘important contribution to household nutrition’ (MIDAS/ Burapha 1995:18). The Norplan study was commissioned too late in the process, evidently more to placate an exasperated public than to improve the project, which was a year into construction by the time the report was finished. NORAD and the Norwegian Aid Minister, Kari Nordheim-Larsen, appeared to ignore its findings. Having signed commercial agreements years ago, with US $1 million already allocated for compensation measures, the Nordic and Thai investors have no obligations. What, then, of the men who wrote the Norconsult study? Encounters with these consultants confirm their strong bias in favour of hydro power, as well as the ideologically charged nature of the subject matter. But arranging a meeting with the author of Theun Hinboun’s environmental study was no simple matter. In the first place, as Norconsult’s Gjermund Saetersmoen explained in 1993, the company had no one with the appropriate expertise in the ecology of Lao rivers, and therefore sub-contracted the work to an Australian consultant based in the region. (Not to overstate the case, this in itself raised questions about why the firm was selected to do the environmental review in the first place.) It was not until the following year during a visit to Norway that it was possible to organize an interview, in which Charles Adamson, who had written the environmental portion of the Norconsult study, responded to the various criticisms. The consultant lamented the lack of sensitivity of outsiders to the region: ‘It is difficult for people living outside to understand the poverty in Laos. It is to me unethical and disappointing that people are wanting to hold back development in countries where the population is suffering’ (Charles Adamson, Interview, 4 June, 1994). His concern did not appear to extend to those who will be negatively affected by Theun Hinboun. Adamson reiterated that he foresaw no need for compensation payments because no homes or paddy land will be flooded. The forests being cleared to make way for 100 kilometres of transmission lines are merely ‘secondary regenerating forests in fields that have been left fallow’, he said. As the forest farmers working these fields have no legal ownership of the land, they are, in Adamson’s opinion, entitled to no compensation when it is appropriated. ‘There may be a claim of ownership, but…if you want to talk about compensation, then you are referring to permanent agriculture. It would be unusual to compensate people for bits of regenerating ground that have transmission lines going through

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them’, he said. Similarly, farmers who practise seasonal agriculture in the ‘drawdown’ zone of the river banks in the area of the reservoir during the dry season should get nothing to compensate for the loss of this land either. ‘It is a very small area …[and] they can draw water from the headpond’, he said. Though Adamson admitted that he is not a fish expert, he maintained that the Theun Hinboun will improve the situation for local people by increasing the level of water behind the dam, thus creating an ideal environment for raising fish. In the report, the claim was accompanied by no details about how such a scheme will be organized, who will pay for it, and how the original fisherfolk of the area—accustomed to fishing indigenous species—will benefit. The fact that 40 kilometres of the Theun river will be dried up three to four months of the year, thus potentially destroying the habitat below the dam for numerous species of fish in the basin, was not elaborated in the consultants’ discussion either. Adamson agreed that after Nam Theun 2 is completed, the river’s dry period will extend to six months each year. His line of argument was that there is not enough yet known about the patterns of fish movement to be sure that the overall affects will be negative. Rather than opting for a precautionary approach, he insisted that since there is at least a possibility that fish in the Theun river are not as dependent on fixed migratory routes as Arctic salmon, they may crowd into other tributaries to avoid the Theun while it is dry. ‘Our attitudes have always been based [erroneously] on salmonid species…that have routes into specific areas. We are assuming that tropical fish also have definite migratory routes. The question is, would those fish that normally populate the Theun river downstream of the dam be likely to take an alternative route?’—for example, up an inflowing tributary like the Nam Mouan. The question remained unanswered in the Norconsult report. MORE WATER, MORE FISH: PAK MUN REVISITED Adamson’s summary of the fish situation in the Norconsult report was indeed stunning in its optimism: Upstream of the dam the headpond will create an enhanced deep water habitat which did not exist before and this will improve productivity and provide an additional dry season habitat for fish…. The creation of the headpond can have beneficial consequences on public health conditions. The increase of fresh water fish can provide an improved nutritional source for villagers. (Norpower 1993:24) The basis for such claims is impossible to guess as extremely little scientific study has been done on the ecology of fishlife in the rivers of Laos, and the consultants did not draw on the rich knowledge of local people either. The claims look stranger still given the findings of a February 1992 study of aquatic

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life in the project area, sub-contracted by Norconsult, which were explicit about the abundance of fish life: Around 147 species of fish are found in the survey areas covering [the] headpond area [of] Nam Theun, Nam Kading below [the] damsite down to [the] mouth of Nam Kading (Mekong river)...in all water sources; rivers, rivulets, swamps, lakes, lowland paddy fields (found in rainy season only)...51 are found all year round, 21 are found at the beginning of the rainy season, 20 at the end of the rainy season and 52 in the dry season.... In the headpond area [of] Nam Theun 98 species were found. (Department of Livestock 1992:5.1.5.1) It is probably safe to say that rivers and streams are second only to the forest as the most important asset for rural communities, which make up the vast majority of the country’s population. Local people are believed to catch at least 18 species of fish in the Theun river for eating or for sale, fresh, dried or fermented (Department of Livestock 1992: Table 11). In Ban Kangvit, upstream of the dam site, villagers catch several tonnes of fish each year and then sell to traders who come from the market at Laksao, 35 kilometres away. When there is not enough rice or when the crop fails, people usually harvest more fish and sell or barter it for rice. Along the lower Nam Hai, before it meets Nam Hinboun river, people lose their rice crop to prolonged flooding every few years, at which time they rely more heavily on fishing. Evidence of the vast diversity of fish species in these river systems can be seen in the variety of equipment used by local people. Local fishing tackle has become highly adapted over centuries of practice to catching the fish, some of which migrate up from the Mekong. There are reportedly at least 20 different types of fishing tackle commonly used along the Theun and Hinboun rivers, varying with the season, river conditions and fish species. In 1994, the Lao government presented a final report to the Asian Development Bank, which clearly drew on Norconsult’s assesment: A larger body of water will be created with potential for increased fish production. A fishery management plan will be introduced to the headpond area that will restock the area with indigenous species and establish the necessary fishing infrastructure and markets. The resource will be controlled by involving the provincial and district administration in the program. The project has been costed at US $195,000 and will be established by the Ministry of Agriculture, Division of Livestock and Veterinary Services. The program will be based on experience that the Department has in setting up a similar project on the Nam Ngum reservoir near Vientiane. (Asian Development Bank 1994:15)

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Nam Ngum, the first dam in Laos, is the national symbol of modernization and independence. Therefore it is a success story, officially at least. But Nam Ngum was built during the war, and there are no official records of pre-impoundment fisheries, which makes it difficult to validate claims that the Nam Ngum fishery is an improvement on nature. Anecdotes and scattered documentation, however, seem to suggest that although fisheries boomed initially because of the huge area of inundation, catches of native and introduced species have since fallen off. Notwithstanding the Lao government’s hopes of reproducing the experience of Nam Ngum, it may be entirely inappropriate to compare this dam with Theun Hinboun because of significant differences between the two reservoirs. The Theun Hinboun ‘headpond’, as Norconsult called it, will be a two-pronged reservoir, 24 and 14 kilometres in length, kept within the natural river banks. It will inundate less than 10 per cent of the surface area of the Nam Ngum reservoir, thus providing that much less organic material in the initial stages after the flooding. It is therefore unlikely that a similiar boom in the fish population will occur as a result of this new dam. A better comparison may be found by looking across the border at the World Bank-financed Pak Mun Dam in north-east Thailand. A 136-megawatt runofriver dam with a narrow 60-kilometre-long reservoir, built also on a large Mekong tributary whose high fish diversity maintained farming and fishing communities, Pak Mun is similar to Theun Hinboun in ways ranging from size, type and function (peak power generation) to its ecological and social impacts. As with Theun Hinboun, Pak Mun project proponents claimed all along that there would be no significant impact on fisheries or people. After failing to convince the government that further study was needed, Thai students, villagers and NGOs did their own survey and found that fish catches upstream of the dam were already declining significantly during construction of the dam on account of the twice-daily blasting of rapids and other disturbances that were causing permanent damage to spawning grounds and migration routes (PER 1993). Opposition against Pak Mun began in 1989, when the Thai Cabinet first announced its approval of the project. It was only in 1994, though, that a government committee, set up in response to the years of public protest, announced that 2,140 families upstream of the dam qualified for compensation ranging from 8 baht to 100,000 baht. This compensation scheme, so long in coming, was criticized for being unfair and arbitrary, and itself prompted the largest and longest Pak Mun protest rally by local people to date, as well as criticism from the government’s own committee on human rights and justice (The Nation, 4 November, 1994). In March 1995, EGAT announced a revised package of 30,000 baht in cash to over one thousand families affected and 60,000 baht for each family to be put into a job development fund. By late 1995, an additional 3,000 people in 45 villages upstream were demanding compensation for lost fisheries upstream of the dam (Bangkok Post, 8 November, 1995). In addition to compensation, the Thai Fisheries Department has responded to the destruction of natural fisheries by stocking the river with exotic species of

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fingerlings from its fish-breeding stations. But fisheries officials make no claim that this will replace or improve the decimated natural fisheries. As a last-minute extra, a fish ladder was built into the Pak Mun Dam in an attempt to diffuse some of the criticism about the damage to fish habitats. It will be at least three years before the department will be able to evaluate how effectively it has functioned. In January 1995, however, the Director General of the Thai Fisheries Department told The Nation: We admit that we are working on the fish ladder technology with very poor knowledge about its efficiency. We know nothing about the pattern and behaviour of fish migration. We don’t know what species and how many fish daily migrate from the Mekong to the Moon. How far they can go, where they spawn their eggs and how high they can jump. (The Nation, 27 January, 1995) Local fisherfolk have already made their own assessment of the situation. Since the closure of the dam’s flood gates in June 1994, they report that they have seen only two species of fish near the dam site. Pla hua taek (fish with crushed heads) have been sighted in the Pak Mun fish ladder—their heads are smashed as they swim into the concrete ladder—while pla mai mee hua (fish without heads) can be observed in the outflow channel below Pak Mun’s four turbines. To his credit, Charles Adamson of Norconsult remarked in 1994 that Theun Hinboun would have no fish ladder added to its design because, as he put it: ‘They don’t work’ (Charles Adamson, Interview, 4 June, 1994). Norplan’s supplementary study for Theun Hinboun did raise the possibility of adding a fish ladder to the dam. But as with the question of minimum flow, no decision had been taken by early 1996. Vattenfall’s Bengt Toolanen, responsible for technical aspects of the project, estimated that the passage could still be added as late as 1997; though none of the developers seem to believe that it would do much good. In the absence of proper study beforehand, the struggle for compensation and recognition of the destruction caused at Pak Mun has been a case of the villager s word against the Thai authorities, World Bank staff, and their select circle of consultants. In a country with a free press and open debate, it took years of public pressure and protest for the Thai authorities to concede finally in 1994 that the Pak Mun Dam did in fact destroy livelihoods and that people were entitled to compensation. And, as in the case of Theun Hinboun, none of these costs were assessed prior to the decision to build. The difference in Laos, of course, is that villagers in the Theun and Hinboun river basins have limited power to dispute with or oppose the government in its decision to expropriate the river for the production of hydro power. Should Theun Hinboun cause similar impacts to those of Pak Mun in Thailand, affected people will have little recourse in the absence of a free press, strong environmental and development organizations and independent academics who can safely engage in critical debate. Villagers along the Mun river, sharing a

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similar language and culture with their neighbours across the Mekong, have often expressed a willingness to share their bitter story. But the prospect of organizing village-to-village exchange illicits only fear of reprisal and jail sentences on both sides of the Mekong. The more likely scenario is that EGAT will proceed to buy power from the Theun Hinboun Dam, and the foreign investors will reap their profits without the nuisance of protests and demands for compensation. WHOSE KNOWLEDGE IS POWER? How can such gigantic errors occur time and again? How can the experts make such claims? And how can the aid agencies accept these claims with so little discretion? The social impacts portion of the first report, which Norconsult subcontracted to Uppsala University anthropologist Jan Ovesen, provides yet another example of the kind of power wielded by the experts. This one determined that Theun Hinboun would have no negative social impacts because the area has no particular cultural significance. As Ovesen describes in the introduction to his report, he came to this conclusion during a 16-day visit of 22 villages in the Theun and Hai basins—an area he referred to as ‘hitherto ethnographically unknown’—in which he found no evidence of an ‘ancient culture’ or valuable artifacts. Though he noted that communities are largely selfsufficient from paddy and swidden farming and a brisk trade in forest products and fisheries, he concluded that ‘from an anthropological point of view, [the project] can only have positive…effects on the society and culture’ (Ovesen 1993:55). Stating that swidden (or rotational forest) farming is doomed in any case—‘there are no sacred cultural values inherent in swidden cultivation’ (Ovesen 1993:13)—he recommended that communities in the reservoir area be encouraged to move south to the Hai river basin, where there is more paddy land available. ‘I have been unable to detect any ways in which the project could adversely affect any of the population groups in the area’, he concluded (Ovesen 1993:54). Given the shortcomings of the environmental review up to that time, it is hard to understand how an anthropologist could make such a statement. The Theun Hinboun Dam is likely to degrade the resource base of subsistence communities, principally by destroying fisheries up and downstream, on which people are dependent for protein and income, and by flooding their seasonal agricultural land, which provides important nutritional supplements to daily fish and rice. Even if no houses or paddy land are inundated (there is virtually no paddy cultivation in the Theun and Gnouang basins), all indications are that the dam will threaten the food security of people who are already very poor. The failure to identify such crucial issues raises questions both about the experts and about the aid agencies that take these claims at face value. What, then, will be the social and ecological impacts of the Theun Hinboun Dam? What costs will be borne by local people and by Lao society that should be weighed against foreign-income earnings? What of Laos’ need, as identified

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by Indo-China specialist Philip Hirsch, to earn cash in such a way that the impacts on the rural majority are not too devastating? Clearly, the Norwegian environmental impact study offers little help in answering these questions because most of the negative impacts were neither measured nor described. The supplementary studies were critical, but came too late and will probably have no impact on the project design. And if Theun Hinboun is a less environmentally destructive dam than the many others currently being planned, as the Nordic builders claim, there is good cause for concern about the overall impacts of the hydro spree in Laos. Around the world in countries North and South, the emergence of civil society in the form of peasant movements, environmental groups, a free press, independent scientists, and so on has forced a recognition of the ecological and social costs of dam projects. Ironically, it is this very environmental debate in Thailand and the industrialized world (and the lack of it in Laos) that makes the country attractive to dam builders. They are engaged in a race for power in Laos —for economic, political and hydro power—taking full advantage of the country’s vulnerability. As has occurred in Thailand, Sweden and Norway, though, awareness and public debate will presumably, eventually, be possible in Laos as well. Only with the development of such democratic and environmentally informed criticism is there hope of the impacts of projects like Theun Hinboun gaining their proper place on the national political agenda. WHAT COMES AFTER THEUN HINBOUN? Gráinne Ryder In 1991, the Lao government announced its plans to build at least 23 dam projects by the year 2020, which would cost about US $7 billion. Vientiane, the capital of the former French colony, is now bustling with dam builders and their consultants. ‘You find us the money; we’ll give you a river’, said an official of the state-owned Electricité du Laos to a visiting hydro-power consultant in 1995. Some of the major projects which are already financed and under construction or are seeking financing are as follows: Nam Theun 1 (400 megawatts), downstream of Theun Hinboun, would flood about 500 square kilometres of river valley and lowland forest and displace more than 5,000 people. SUSCO, a natural gas distributor and owner of petrol stations in Thailand and Laos, signed a Memorandum of Understanding in 1991 with the Lao government. In 1995, Electrowatt Engineering Services of England, a British subsidiary of the giant Swiss utility Electrowatt, conducted a feasibility study including a preliminary resettlement and environmental survey. Nam Theun 2 (681 megawatts) is a project of Nam Theun 2 Project Development Group, a consortium which includes Ital-Thai, one of south-east Asia’s largest construction companies, Transfield of Australia, the state-owned Electricité de France, the telecommunications company Jasmine International, and the Thai investment house Phatra Tanakit. To date, the Thai Export-Import

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Bank has provided 5 per cent of the costs to the consortium to get the project off the ground. The Lao government has requested US $90 million from the International Finance Corporation and a World Bank guarantee to protect commercial investors. The bulk of the US $1.2 billion cost is expected to come from commercial banks and export credit agencies. Three leading commercial banks—Barclays (UK), Société Générale (France) and Deutsche Bank (Germany)—have all expressed interest but will lend to the consortium only if the World Bank guarantees their investments. The World Bank has been advising the Lao government on Nam Theun 2 and its hydropower development strategy intermittently since 1990. In 1995, the Bank requested further social and environmental studies from the Nam Theun 2 developers before it made a decision, effectively delaying the project until 1997. EGAT announced in May 1996 that it would cancel its plans to buy electricity from the dam unless the developers satisfied the World Bank’s requirements within the next six months. Nam Theun 3 (190 megawatts) will start being built immediately, stated the Laotian official news bulletin Khao Pathet Lao in February 1996. The dam would be upstream of Theun Hinboun and Nam Theun 2. The Lao government holds a 20 per cent share in the project, which is being developed by a US company, the Heard Corporation. Nam Leuk, co-financed by Japan and the Asian Development Bank, aims to divert water to the reservoir of the Nam Ngum Dam to increase its power output. The Japanese government is expected to provide about 40 per cent of the costs, US $85 million, ending a 20-year suspension of yen loans to Laos. The inability of the Lao government to repay its 5.2 billion yen (US $51 million) loan for the Nam Ngum Dam has been an obstacle to new Japanese loans. According to a Foreign Ministry official in Vientiane, the Japanese will be watching Nam Leuk closely before deciding on the next project to assist. Nam Ngum 2 (320 megawatts) has been proposed by a consortium, headed by US businessman Milton Shlapak and comprising Siemens and Bilfinger of Germany, Bechtel of the US, and MDX of Thailand, a part-owner of Theun Hinboun. According to the official news bulletin Khao Pathet Lao, Shlapak submitted a feasibility study to the Lao government in August 1995, describing the project as highly feasible for an investment of US $650 million and a concession of 25 years. Construction is expected to start at the end of 1996. According to the news bulletin, the consortium will be responsible for compensating and relocating people from the construction site. Nam Ngum 3 (600–700 megawatts) is to be developed as a joint venture led by MDX of Thailand, part-owner of Theun Hinboun, which has reportedly offered EGAT an acceptable price for the electricity. Nam Tha 1 (200 megawatts) was highly recommended in a 1994 Norconsult/ ADB energy study for further study and private-sector investment. SP International Group of Thailand began a project feasibility study in October 1995. The Lao government holds a 25 per cent share in the project, which is located in northern Laos.

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Houay Ho (150 megawatts) in southern Laos was already 30 per cent built in 1996 and is expected to be operational in 1998. Developers include Daewoo of Korea, with a 60 per cent share, and Loxley of Thailand, with a 20 per cent share. Loxley is a private company, owned by a founding director of the Thai energy utility EGAT, which built its fortune on transmission equipment. The Hydroelectric Commission of Tasmania had hoped to win the concession for Houay Ho, but ‘the Koreans got there first and put a big bag of money on the table’, said a Commission employee. The developers agreed in January 1996 to sell Houay Ho’s power at US 4.22 cents per kilowatt hour after EGAT threatened to drop negotiations and speed up talks with Nam Ngum 3’s developers instead. Xe Nam Noy (200 megawatts) would be located in the dense forests of southern Laos and would displace six minority communities. Sources in Vientiane report that the government has already allocated land for resettlement and told people that they will have to move. Swiss Electrowatt was subcontracted by Korean developers Dong-Ah to conduct a pre-feasibility study in 1995. Xe Kaman 1 (255 megawatts) in southern Laos, at 185 metres, would be the tallest dam in Asia. The Hydroelectric Commission of Tasmania signed a contract with the Lao government last year to build it. John Holland of Australia, the company that built the Australian-financed Friendship Bridge across the Mekong between Laos and Thailand which opened in 1994, would be responsible for construction. A Tasmanian company has been granted rights to manage logging and forestry operations in the Xe Kaman watershed instead of the Lao military’s company, DAFI, which has controlled all forestry operations until now. Finance is expected to come from a consortium of Singaporean, Malaysian and Thai banks. Logging of the reservoir area, resettlement of villages and plywood production are already underway. REFERENCES AB Hydroconsult (1995) Hydrology, hydraulics, erosion and sediment transport. Final report impact studies for the Theun Hinboun Power Project, Lao PDR. Submitted to Norplan, October. Agreed minutes on discussions between the Secretariat of the Mekong Committee and the Swedish International Development Authority (SIDA) on development cooperation, April 1991, Bangkok. Agreement on the cooperation for the sustainable development of the Mekong river basin (1995) Chiang Rai. Asian Development Bank (1994) Summary Environmental Impact Assessment (SEIA) for the Proposed Theun Hinboun Power Project (Lao People’s Democratic Republic). Manila: ADB. Baird, Ian (1994) ‘Another Franklin Dam in Laos?’, Vientiane: unpublished. Beard, Dan (1994) Keynote address to the International Commission on Large Dams (ICOLD), Durban, South Africa, November 9. Berkmüller, K. (1995) ‘Hydropower development and protected areas’, Vientiane: unpublished.

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Boonaphol, Phao (1992) Letter from the Lao Minister for External Economic Relations to the Norwegian Ministry of Foreign Affairs, circa January 1992. Department of Livestock and Veterinary Services in Association with Burapha Development Consultants (1992) Nam Theun 1–2 Study on Aquatic Life. Final Report, February. DeVylder, Stefan and Sonnerup, B. (1994) Lao PDR, Energy Sector Review, Stockholm/ Malmö: SIDA, January. Directorate for Nature Management (1993) Nam Theun 1/2 Hydropower Project, Laos: Assessment of Environmental Impacts, Trondheim: Directorate for Nature Management. FIVAS (Association for International Water and Forest Studies) (1996a) More Water, More Fish?, Oslo: FIVAS. (1996b) Power and Conflicts: Norwegian Hydropower Developers in the Third World, Oslo: FIVAS. Grimstad, Per (1994) ‘Listen to countries in the South’, in Innsyn, Oslo: Norwegian Agency for Development Cooperation. Innsyn Special Edition (1994) Oslo: Norwegian Agency for Development Cooperation. Inside Kvaerner Energy (1995) Oslo: Kvaerner, 28 February 1995. International Rivers Network (1995) Technical Review of the Mekong Secretariat Report: ‘Mekong Mainstream Run-of-River Hydropower’, December 1994, San Francisco: International Rivers Network. Lao PDR Ministry of Industry (undated) ‘Hydro and thermal electric power projects under development plan up to the 2000s, Vientiane. Lintner, Bertil (1994) ‘Add water: Laos’ hydroelectric plans seem overambitious’, Far Eastern Economic Review. Lohmann, Larry (1990) ‘Remaking the Mekong’, The Ecologist 20 (2): 62, March— April. Lövgren, Lars. (1994) ‘The Dams Debate in Sweden’, in Nordic Dam-building in the South. Proceedings of an International Conference 3–4 August, 1994, Ann Danaiya Usher (ed.), Stockholm: Swedish Society for Nature Conservation. Mekong Secretariat (undated) Response to the Review Made by the International Rivers Network on the Run-of-River Study, Bangkok: Mekong Secretariat. MIDAS Agronomics and Burapha Development Consultant (1995) Rural Development and Land Use. Final Report. Theun Hinboun Environmental Studies in the Lao PDR. Submitted to Norplan, October. Morse, Bradford and Berger, T. (1992) Sardar Sarovar: The Report of the Independent Commission, Ottawa: Resource Futures International. Nilsson, Torsten (1971) Documents on Swedish Foreign Policy, Swedish Ministry of Foreign Affairs, Stockholm. Statement by Foreign Minister, 9 February (p. 177). Norplan Consulting Engineers and Planners (1995) Impact Studies for the Theun-Hinboun Hydropower Project, Laos. Draft Final Report, 10 November, Ministry of Industry and Handicrafts Hydropower Office. Norpower (1993) Nam Theun 1/2 Hydropower Project. Feasibility Study, Volume 3, Environmental Impact Assessment Report, May. Norwegian Institute for Nature Research (NINA) and Norwegian Institute for Water Research (NIVA) (1995) Final Report Water Quality and Aquatic Life Study. Final Report Theun Hinboun Impact Studies, Lao PDR, Submitted to Norplan, October.

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Ovesen, Jan (1993) Social Anthropological Survey, Nam Theun 1/2 Hydro-power Feasibility Study, Department of Cultural Anthropology, Uppsala University, Sweden, for Norpower, EdL, Hydro-power Project Office, Ministry of Industry and Handicrafts, Vientiane, Lao PDR, 7 April. Palme, Olof (1970) Documents on Swedish Foreign Policy 1970, Swedish Ministry of Foreign Affairs, Stockholm, 1 May (p. 111) and 6 May, 1970 (p. 113) speeches. Project for Ecological Recovery (PER) and NGO Coordinating Committee for Rural Development (1993) Fish, Forests and Food: Means of Livelihood in Mun River Village Communities, Bangkok: PER. Ryder, Gráinne (1995) ‘Case study: Pak Mun Dam in Thailand’, Both Sides of the Dam Symposium, Delft. Sayakhoumane, Napha (1994) ‘Damming the Theun river—a local perspective’, in Nordic Dam-building in the South. Proceedings of an International Conference 3–4 August, 1994, Ann Danaiya Usher (ed.), Stockholm: Swedish Society for Nature Conservation, pp. 26–8. Sherman, Carol (1995) Thailand’s Energy Tentacles: Power Plants, Dams and Disaster Fuelling ‘Development’ in Indochina, Woollahra: Aid/Watch. Sjöström, Per (1994) Environmental Considerations Regarding the Theun Hinboun Hydropower Project, Stockholm: Vattenfall. Skanska Annual Report 1993, Stockholm. Sklar, Leonard and McCully, Patrick (1994) Damming the Rivers: The World Bank’s Lending for Large Dams, San Francisco: International Rivers Network. Sluiter, Liesbeth (1993) The Mekong Currency, Bangkok: PER/Terra. Statement on cooperation for the sustainable development of the Mekong river basin. (1995) Chiang Rai: Thai NGOs. Towards Ecological Recovery and Regional Alliance (Terra) (1993) Letter to FIVAS, 4 August. (1995) First Nordic—Asian Development Bank BOT Venture in Lao PDR: Nam Theun Hinboun Project, Bangkok: Terra. United Nations Development Programme (UNDP) (1994) ‘Mekong mainstream run-ofriver hydropower’. December. Usher, Ann Danaiya (1994) ‘Dam-building in the South: the Nordic connection’, Sveriges Natur, May. Wildlife Conservation Society (1995) A Wildlife and Habitat Survey of the Area to be Affected by Theun Hinboun Hydro-power Project, Lao PDR. A report to the Hydropower Office of the Lao PDR Ministry of Industry and Handicrafts and to Norplan, Vientiane, August. World Bank (1991) The Pak Mun hydropower project environmental fact sheet. Washington, DC: World Bank.

Periodicals Bangkok Post (Bangkok) Development Today (Oslo) The Ecologist (Sturminster Newton) Far Eastern Economic Review (Hong Kong) International Water Power and Dam Construction (London)

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Klassekampen (Oslo) The Nation (Bangkok) Sveriges Natur (Stockholm) World Rivers Review (San Francisco)

8 PANGANI DAM VERSUS THE PEOPLE Claude Mung’ong’o

One of the major requirements for any hydro-dam project proposed for funding to the Nordic aid agencies is the carrying out of thorough environmental impact assessments (EIAs) prior to the commencement of the project. In the Swedish International Development Cooperation Authority (SIDA), for example, all such projects are screened through an EIA sensitive procedure that scrutinizes the project preparation process, the comprehensiveness of the feasibility studies, the project implementation projections, and so on. For hydro-power projects, emphasis is placed on impacts such as changes in the watercourse and sedimentation problems in the rivers, effects in areas with natural vegetation or unique species, obstruction of fish migration to spawning areas, and water use or ownership conflicts (Persson 1994:17). So it is with the Norwegian Agency for Development Cooperation (NORAD), where EIA studies conducted by independent consultants and made available for public scrutiny are said to be required before a hydro-power project is considered for funding (Bryceson 1994: 23–2). Similar procedures also apply for the Finnish International Development Agency (FINNIDA). In principle, these are the requirements that a proposed project must fulfil if it wishes to stand a chance of receiving finance from these three Nordic aid agencies. But what is happening in reality? EIAs have been applied with two basic assumptions in mind. The first is the positivist notion that the methodology offers objective, value-free information to inform the political process. The science of EIAs is conceptualized as something separate from the politics of decision-making. The second assumption is that society runs its affairs in a pluralist manner, such that the more information available and the more debate, the better the policy decisions (Bayliss-Smith and Owens 1994: 113–45). Neither of these assumptions holds true in all cases. More often than not, it is the politics rather than positivist science that holds sway in policy formulation and implementation. I should like to illustrate some of the difficulties that are associated with EIAs and their implementation in the Pangani Falls hydro-dam project in Tanzania. Material is drawn from recent field trips to the area, documentary sources, and my own experience as a member of a multi-disciplinary team that carried out part of the Nordic-funded EIA for the dam in 1990 (Mung’ong’o 1994:33–4).

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Map 4 The Pangani Falls Dam

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WATER CONFLICTS IN THE PANGANI VALLEY The Pangani catchment area, from which the dam draws its waters, is vast and varied. It is estimated to cover 42,000 square kilometres with nine tributaries that drain the slopes of Mount Kilimanjaro and Mount Meru upstream and Mount Pare and Mount Usambara further downstream. It accommodates disparate ethnic groups who are engaged in a variety of economic activities in four different administrative districts. Traditional irrigated smallholder agriculture is the most important of these activities, and the one that is most threatened by the Pangani Dam. When construction began in 1990, there were already four dams in the Pangani basin. The 1-megawatt Kikuletwa and the 8-megawatt Nyumba ya Munga irrigation dam and reservoir built in 1967 are upstream at the foot of Kilimanjaro. Further downstream, some 50 kilometres from the Indian Ocean, are the 22-megawatt Hale Dam and, just 8 kilometres below this, the original 17megawatt Pangani Dam, which was first built with two 2.5 megawatt units in 1934, and upgraded 10 years later. By the late 1980s, however, only one of the Pangani units was in operation. The new Pangani Falls Dam, which started operating in late 1994, is situated in Muheza District of north-eastern Tanzania. Financed entirely by grants from three Nordic aid agencies, the project is a redevelopment of the old Pangani dam site, with the installation of two 33-megawatt turbines, giving the new Pangani Dam an electricity-generating capacity of 66 megawatts. The decision to build the dam was a response to a nation-wide energy development plan laid out in a 1985 Canadian study. The project was never designed to respond to the needs of the local economy in an area where the majority of people are farmers. Rather, it was built to serve urban domestic and industrial energy demands. But the problem of water availability plagued the project from the start. Modern agricultural projects are expanding in the valley, and with these, large-scale irrigation schemes that are placing increasing pressure on the waters of the Pangani. Continued droughts in southern Africa have exacerbated the competition for water use. Throughout construction of the dam from 1990 to 1994, the valley suffered record low levels of precipitation. The builders of Pangani responded to the water shortage by devising schemes to decrease the amount of water used in irrigation. Surveys were conducted the length of the basin to assess the total amount of water that is abstracted—both ‘legally and ‘illegally. A rapid appraisal done in 1993 by the Tanzanian Ministry of Water (MAJI) registered about 1,000 water removals, but very few of these were small-scale removals (Ainola 1994:4). This reflects how the majority of traditional water users remain invisible in the official records and hence also in the planning process for the sustainable use of water in the Pangani basin. Rather, attention has focused on the interests of international capital as manifested in the hydro-power plant at Pangani Falls, and in modern irrigation projects funded by the World Bank and Japan’s JICA, as well as those belonging to large-scale farming enterprises such as the sugar-producing Tanzania Planting Company. This contradiction became very clear to me in October 1994 when I visited the village of Msaranga Chini on the banks of the river Rau, a tributary of the Pangani, taking its waters from Mount Kilimanjaro. Located upstream of the dam,

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Msaranga Chini is one of the numerous villages practising traditional irrigation techniques. Accustomed to managing the use of water for agriculture through years of plenty and of drought, local people were distraught about suddenly being forced to use less water for their subsistence farming—especially in these dry years—on account of the hydro dam downstream. Many of the traditional irrigators I spoke with did not want any government intervention in the regulation of water use. They said that they had their own management systems, which worked well. There was no point in outsiders interfering. The atmosphere was hostile and crisis-ridden. (Indeed, officials at the water authority were apparently aware of this situation as they refused to take me to the village and tried their best to discourage me from visiting it on my own.) The smallholders in the village were very bitter about the government’s handling of the water rights issue. According to them the government was acting in the interest of large-scale farming and the hydro-power dam downstream rather than that of villagers. When I suggested that the government might be acting in the national interest in the face of the persistent drought situation in the country, one elderly farmer retorted: We have had droughts in this part of the world ever since our grandparents were children. Why did the government not realize this before it built the dam?…. This water is food for our children. When the government says we should not use this water because of the big farms and the dams, it is asking us to give the pigs food meant for our children. Can anyone do that? Could you do that to your own children, Bwana Mtaalam (Mr Expert)? (Interview, 13 October, 1994) I replied: ‘Obviously, I could not.’ In spite of these revelations the problems were not investigated either by the technical planners during the feasibility studies, or by the environmental impact assessment team that studied the project prior to its inception. The first EIA exercise by the Norwegian and Finnish consultant firms, Norplan and Imatran Voima (IVO) International, was carried out in 1990 with the help of a team of local specialists. It is in that exercise that I participated as a sociologist. Although my participation was an afterthought at the end of the planning of the EIA, it was the terms of reference that determined how the study would be conducted and hence the final result of the exercise. Our terms of reference demanded that we operate within the confines of the dam site. We had no mandate to go beyond that, even if we had wanted to explore the upstream issues. Moreover, although the team was composed of a range of scientists studying archaeological sites, animal and plant biodiversity, land-use systems, and so on, we were each working in a compartmentalized fashion, each dealing with one particular issue. There was no cooperation or coordination among the various members of the team. The reports were then submitted separately to Norplan and IVO International, which incorporated them into one final report— apparently, a report on the situation at the dam site and not in the catchment area.

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The result was a document that assured the government and the public that the project would have none of the major impacts associated with mega projects. It was determined, in this regard, that there would be little seismic risk, no loss of cultural heritage, and no forced resettlement of people (except for the inhabitants of one homestead). It was also discovered that there would be a dewatering of only a short stretch of riverbed, and ‘absolutely no effect on such ancillary activities as irrigation and other water uses’ (IVO International and Norplan 1990:13). The Pangani river was seen to be exceptionally well suited to a run-of-river hydropower scheme on account of the melting snows of Mount Kilimanjaro, which ostensibly maintained the flow during the dry season. Although it was realized that the dam would be adversely affected by lower than expected water flows, the chances of this occurring were imagined to be almost non-existent (IVO International and Norplan 1990:19). It is obvious, therefore, that some of the assumptions of the feasibility studies and the EIA were not based on adequate data. Neither variations in water level due to other water uses in the catchment area upstream nor drought were seriously taken into consideration. In a catchment area that depends largely on the variable inter-monsoonal rains of masika (March to May) and vuli (October to December) and with annual rainfall varying between 400 mm in the plains and 2,000 mm on the mountain slopes, the reasons underlying this negligence are hard to comprehend. The situation prompts some questions. Why were these issues not considered, given their important implications for the future of the hydro-power dam at Pangani Falls? Had someone already decided that the dam would be built in spite of the potential problems it would face? What role were the feasibility studies and the EIA supposed to play? Was the real aim behind the assessments a genuine desire to understand the problems at stake? Or were they merely a cosmetic effort to convince someone high up on the decision-making ladder, especially in the funding agencies, that project planning was following all the set requirements? Otherwise how was the Finnish consulting firm IVO International, the company that prepared the preliminary study of the Pangani project and the task specification for the feasibility study, also allowed to carry out the feasibility studies themselves? Why, moreover, did Norplan, the firm that acted as supervising consultant in the EIA, also oversee construction of the dam (Ainola 1994)? THE NORDIC SOLUTION These questions are particularly pertinent when one considers that the terms of reference for the initial feasibility study had already drawn attention to potential problems of water availability as early as 1989. Ensuing studies by the various Nordic consultant companies grappled with the water problem. Their solution was to use legal and political means to ensure sufficient supply to the plant: namely, by guaranteeing the water rights at the dam; and by creating a water basin management board with user fees for naturally running river water. Not

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only are such fees unheard of in the history of rural Tanzania, but the fact that their recommendation came from foreign consultants and was accepted by the Tanzanian state without public discussion speaks volumes about who really runs the show in natural resource use decision-making in the Tanzania of the 1990s. And coming during the structural adjustment programme’s so-called ‘cost sharing’ craze, this not only sounds ludicrous, but also illustrates the double standards espoused by our friends in the North when judging our democratic performance. (Peasants now have to pay for almost every public service from their own pockets. At the same time peasant crops are bought too cheaply by state agencies or simply not bought at all.) Not only do initiatives like the sudden imposition of water user fees distance the Tanzanian state from rural people, engendering a loss of its legitimacy, but it seems evident that no Nordic government could implement such a draconian decision with no public consultation without incurring the wrath of its own electorate. The composition of the water basin management board further demonstrates the corporatist nature of the processes that are taking place in natural resource use decision-making in Tanzania today The board consists of the following representatives: one member from the Ministry of Agriculture and Livestock Development; two members from the Ministry of Water, Energy and Mineral Resources; one member from the utility company Tanzanian Electricity Supply Company (TANESCO); one member from each of the three administrative regions traversed by the Pangani river catchment; and one member from the Prime Minister’s Office. Noticeably absent from the board are local people, who constitute the majority of river-water users. Neither is there an elected representative of the villagers. The board is, therefore, not only a sad reminder of the self-righteousness of planners and bureaucrats who think that they know best about what should be done, but a clear illustration of the nature of corporatist hegemony of international finance at the local level. THE FURROW SYSTEMS OF THE PANGANI BASIN A vital factor in understanding the shortcomings of the approach of Pangani Dam’s planners is their failure to acknowledge functioning systems of resource management—indeed, to recognize the very existence of communities— upstream of the dam. Tanzanian statistics fail to reflect the vast number of smallholders who draw water from Pangani’s tributaries to irrigate their fields. By limiting the scope of the EIA to the dam-site area, and refusing to examine potential impacts upstream, the Nordic consultants also rendered this majority of water users invisible. The imposition of a water board as a condition of aid, a board on which small farmers are not represented, only served to emphasize their invisibility. Historically, the transfer of decision-making from local communities to statecontrolled institutions in Tanzania began during German colonial times (1885– 1918) and continued into the British era (1919–60). The resulting structures were inherited by the post-independence state in 1961. The transfer was, however,

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never complete in many respects. Indeed, securing local control over land and water in the valley—as the fundamental requirements of subsistence—were central issues for the peasant movements against colonialism. Officially, the traditional institutions that had governed local resource use were superseded by state-controlled institutions. The state also appropriated the legal ownership of natural resources. In reality, however, the management and use of land and water have in many places continued being largely mediated by traditional tenure regimes and other local resource-use arrangements. Among the Chagga people of Kilimanjaro, for example, the mfongo irrigation furrows and the concomitant nduwa water holes are still controlled and maintained through traditional institutional arrangements. Fidelis Masao has given a fascinating account of how, in many parts of Kilimanjaro, a specialist clan, locally known as Wakomfongo, had the responsibility not only of planning and directing the construction of particular furrows, but also of coordinating water distribution and organizing the repair of furrows (Masao 1974). For these duties to be performed effectively inter- and intra-clan cooperation and understanding were necessary. When people of different clans needed a furrow they would convene a meeting, at which a person from a Wakomfongo clan was elected to direct the project. This leader would then approach the chief of the area, the Mangi, to obtain permission to proceed with the project. The Mangi, once convinced that the furrow was needed and that the people were capable of finalizing the project, would as chief give it his blessing. The Wakomfongo was required to keep a vigil of prayer to the clans’ ancestors until a sign appeared, indicating that the prayers had been answered. In case the sign failed to come, the undertaking was postponed until a local medicine man was consulted and an offering to the ancestors was made. Contributions to the cost of the sacrificial cow or sheep were made by all those who would benefit from the furrow. Such offerings were also made to ensure a successful and uninterrupted water flow over the seasons. It was through such sacrifices (which sometimes included human offerings) and participation in furrow construction and repairs that water rights were acquired by an individual family. The management of the furrows was generally left to what we might call a local ‘water board’. Unlike the current Pangani basin water management board, however, on which small-scale users are not represented, this committee was composed of all Wakomfongo clan members and members of the other local clans using the furrow. Elders from the Wakomfongo and other clans together formed the Council of Furrow Elders, who were in charge of administering and solving problems associated with the use of the furrow. Non-members could use water from the furrow only if they paid some nominal price (some barrels of mbege beer, for example) each year to the Council of Furrow Elders or to a member who did not use his full share of the water. The furrows have been crucial in the patterning of Chagga life on the slopes of Mount Kilimanjaro. Not only have they influenced the settlement patterns in the area, but they have also been decisive in the Chaggas’ adoption of bananas as a staple food, the early adoption of stall-feeding, the use of finger millet as an

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important ingredient of the ritual beer, mbege, and the planting of out-of-season crops such as maize and pulses. But more important to the Chagga economy, it is the furrows which have made possible the booming coffee industry in Kilimanjaro. It is for these reasons that the Chagga have vehemently resisted attempts to interrupt the flow of water in the furrows. The first recorded conflict was in the 1890s, when a Kibosho missionary attempt to divert water from a furrow to supply water to the mission property was physically contested. Generally, however, the need to keep the furrows in good condition has strengthened the cooperative spirit among the Chagga and lent success to such cooperative movements as the Kilimanjaro Native Cooperative Union. As one Chagga elder remarked, ‘a man cannot irrigate alone. All men who share a furrow must agree when it is to be opened and closed and must unite to look after it’ (Interview, 12 October, 1994). For these reasons, the Pangani hydro dam is viewed by practitioners of mfongo irrigation as a direct threat to their water supply and way of life. A similar system of irrigation has been used by Shambaa-speaking people living further downstream around the Usambara mountains, possibly as early as the 1600s, and persists in the Pangani river area to this day. In Peasant Intellectuals, Steven Feierman writes that irrigation in the area was traditionally controlled by farmers, as opposed to local chiefs, and organized for the purpose of guaranteeing food security in a highly variable topography and climate. Their ancestors had created a complex farming system, which they continued to adapt, using three rainy seasons, variations in temperature and rainfall over three altitude zones, and irrigation…. Irrigation works, which required coordinated labor and so could possibly have been subject to chiefly control, remained in the hands of the peasants and their own ritual leaders…. The network of irrigation furrows which ran veinlike down the hills and through the gardens…increased the level of food security. The men served by a furrow maintained it and decided together on the distribution of water for irrigation, in a system of rotating irrigation days. Each farmer could count on receiving water on his assigned day. Each major furrow was under the ritual control of an elder, drawn from an ancient peasant lineage of that particular spot. Water did not flow before he performed his rite of sacrifice. (Feierman 1990:64–5) The resistance to centralized management of water for the Pangani Dam is not a new phenomenon in this part of the river valley either. During the 1950s, local control over land and water, especially for subsistence farming, was a central issue for peasant movements in the Usambara mountain area. Peasant opposition to a British erosion-control scheme that threatened the traditionally recognized right of the very poor to use land freely for subsistence farming contributed to

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the resistance movement against colonialism that led to independence in 1961 (Feierman 1990:181–5). The efforts to secure water for electricity generation downstream are loaded with historical connotations for upstream farmers in the valley. The imposition of the water basin management board by Nordic donors results in further complication because of ambiguities in existing tenure systems and legislation over the use of land and water throughout the mid-Pangani basin. THE CRISIS IN STATE WATER MANAGEMENT Tanzania has been facing a major drought spell since the beginning of the decade. Inland lakes have dried up and river levels have decreased. Nevertheless, many of the problems of water management in the country are institutional rather than environmental and are related to shifts in water and other resource-related decision-making from the local to national and international levels. There is a ‘problem of assurance’ (Runge 1984:154–81) in much of the midPangani river catchment area. This confusion over tenure is exacerbated by the fact that much of the smallholder agriculture along the river valley (particularly in Korogwe District) has been operated by former manamba migrant workers who were uprooted from their homes and retain little of their traditional tenure regimes. These peasants tend to lack confidence in the capacity of either state or local institutions to regulate resource use. This has led to serious ambiguities over who has legal access to natural resources in the area. Furthermore, existing legislation has failed to clarify the status of customary rights to land and water resources, leaving room for manipulation and growing resource-user conflicts. This dearth of commonly accepted management strategies for communal land and water resources means that areas are being exploited by those with economic power (uwezo) from within the villages themselves and from outside. The so-called Village Councils, which were established in 1975 to manage resources at the local level, have become powerless institutions that are manipulated for individual gain both by outsiders and the local elite (United Republic of Tanzania 1994:94–6). In the ecologically harsher environment of Lower Moshi, Lower Pare, and the Uzigua section of the Pangani basin, in particular, the centrifugal forces of the development process have also brought about a clear delineation of accumulators and dispossessed within the catchment area. A small group have enriched themselves by seizing various agricultural opportunities (especially irrigation agriculture) in the rural sections of the Pangani catchment area. They are also known to exploit economic opportunities in nearby towns such as Same, Mwanga, Korogwe and Hale. Meanwhile, a proportionately larger group of increasingly impoverished smallholders have been flung onto marginal lands (Sender and Smith 1990). The limited capacity of these lands to support more people has led to increased environmental stress and possibly also to increased siltation of the rivers. This process of wealth polarization is more marked in the low-lying plains of Pangani

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valley, where settlers emigrating from the more densely populated highlands of Kilimanjaro, Pare and Usambara or migrant workers from closed-down sisal plantations can obtain land of marginal value for agricultural production on the periphery of plantations, locally known as mwisho wa shamba. By concentrating the control and use of water in the hands of the powerful few to the detriment of the poor majority, the dam will intensify this process of polarization. While confusion reigns at the local level, there is a similar crisis in institutional arrangements manifested at the national level. According to the 1968 law that established TANESCO, the utility holds a monopoly to produce electricity in Tanzania. In its lifetime, however, the company has changed ministerial accountability several times as land, water and associated resource uses have, in various periods, been under the control of three or four different government ministries. This lack of clarity is compounded by a lack of coordination among the various ministries, agencies and institutions. Their relationship has been one of conflict rather than harmony. For example, while the water authority advocates water conservation, the Irrigation Division of the Ministry of Agriculture and Livestock Development has always believed in maximum exploitation of water resources for increased food and export-crop production. In many respects, such differences in outlook and the resulting lack of coordination have been maintained by an atmosphere of mistrust and contradictory institutional and personal interests between the national and local politicians. This chaotic situation is made even worse by the problem of inadequate and unreliable data on land and water resources. Documentation of land ownership, terms of tenure and rights to water is often inadequate or non-existent (Interview with Moshi Regional Hydrologist, 12 October, 1994). This situation has led to the practice of aggregating national energy production costs, which would seem to reflect all the costs involved. In reality, many of the social and other costs that are not directly related to electricity production are not considered. As a result, externalities are not costed and tarrifs are unrealistically low. These have in turn helped the fledgeling industrial sector and the urban middle- and upperincome groups, who pay far less than the actual cost of production for their electricity (Foley 1991:22–3). This problem has also led to unprecedented growth rates in urban demand for electricity of between 8 and 13 per cent, as reported by TANESCO (Katyega 1994:20). TANESCO has so far been functioning as a parastatal organization, its activities deemed to be of primary interest to national development. However, the indications are that it, like all other profitable parastatal companies in Tanzania, will eventually be privatized with a combination of local and international capital under the structural adjustment ‘menus’. As such it will cease to be a national project and become just one more private water-resource user that should have no more right to national water resources than other equally important economic activities—including smallholder agriculture.

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TOWARDS A DEMOCRATIC WATER-BASIN MANAGEMENT REGIME So when the donors urge the Tanzanian government to intervene forcefully and regulate water use in the upper reaches of the Pangani river, one wonders whether they are aware of the difficulties involved in the changing constellation of incentives and power relations in the country. Indeed, in the fast-changing sociopolitical scene in Tanzania today, who has the right to decide on how certain water resources in a village in the Pangani valley are managed? Does the national government still possess the mandate to regulate such local resource use? Does the government (much less Nordic donors) have the right to impose water fees on subsistence farmers who have a tradition of managing naturally running water in the tributaries of the river? It is true that until very recently it was the state, through its control of water rights, that was supposed to dictate the terms of water use in rivers like the Pangani. This was deemed acceptable in the name of national development during the era of the ujamaa socialist experiment. The state was then seen to be engaging in an economic activity that would not only improve the power supply to the industrial sector of the national economy—the profits from the enterprise would go into the state coffers to be used for the improvement of other sectors of the country’s economy. By accepting resource-use regulation the local population was thus, at least in theory, directly contributing to the planned national development project. However, since 1992 the Tanzanian socio-political scene has been changing rapidly. The state has been slowly ‘rolling back’ the centrally planned economy and fostering a liberalized economy, in which private capital is expected to play a greater role in the production of national wealth. In its new role, the state is supposed to act as an arbitrator or mediator among several private operators in the exploitation of natural resources, rather than as a partisan. Under the pre-1992 system, a regulatory institution like the water basin management board for the Pangani river might legitimately be seen as an actor in national development. In the current changing socio-economic scene, however, the board is not merely a cog in the wheel of development but actually becomes an instrument of economic oppression of local populations, who are now being coerced to economize on resources to facilitate international profit maximization. While the previous resource-use laws and regulations were intended to safeguard the national interest in the exploitation of various resources, under the current situation these same mechanisms will now safeguard international capital against local people. We are already witnessing other similar crises looming up in relation to the management of natural resources. One example is in the game reserves and the Maasai pastoralist rangelands under the structural adjustment programmes of the 1990s (Tenga 1992:5). There is therefore a need to redefine resource-use rights—including the rights to water of all types of users—in order to avert dangerous confrontations in the near future between large-scale investment programmes and local resource users.

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If the ultimate goal is to create a sustainable institutional water-use structure in catchment areas with multiple (and often conflicting) water-use interests, such as the Pangani river, a fundamental prerequisite is, to my mind, the strengthening and empowerment of locally based water user associations and river basin committees. This would mean democratizing the institutional structures, and enabling them to argue for representation and fair compensatory arrangements with powerful interests—like the supporters and beneficiaries of the Pangani Dam —that are represented by a national lobby and backed by international finance. This is in the long term. In the short term, however, it would seem that TANESCO and interested parties at the international level will have to make do with the water that is seasonally available at the Pangani Falls after all normal uses upstream have been accounted for. Given the peripheral importance of the Pangani Dam to the local economy, and the fact that the ‘national interest’ argument is no longer tenable in these days of privatization of resources, the preferential rights of the state are largely irrelevant. Hence the Tanzanian government will have no moral basis for, and will certainly find it very difficult indeed to justify, the exclusion of other water-using economic activities in the catchment area. THE LIMITS OF ENVIRONMENTAL IMPACT ASSESSMENT At the beginning of this chapter, I pointed out that the usefulness of environmental impact assessments (EIAs) has been based on the assumption that EIAs are objective and value-free: that they inform the political process of resource-use decision-making from a purely scientific perspective. The above discussion, however, suggests that EIAs are not as apolitical as their proponents would like us to believe. In the case of Pangani Dam, the EIAs failed to recognize the environmental realities of the river basin, and especially the potential water-use conflicts. They failed not because the methodologies were scientifically inappropriate, but because interested parties did not want that particular information to be available to the decision-makers. The obstruction in the flow of information to the decision-makers was very much a result of a political decision, and it influenced the political outcome of the project. This did not make the resource conflicts disappear, though. They are a reality in the Pangani river basin. The fact remains that if water use in the upper catchment area is not decreased, there is not enough water to run the dam’s turbines at their optimum capacity. Thus, in order to save the project, the Nordic response was to impose a highly political solution. The Nordic aid agencies forced the Tanzanian state to establish a water basin management board and introduced the highly controversial user fees on free-running river-water use. Can the Nordic aid agencies still claim that their activities are not political in this respect? Although the Pangani Dam project was conceived when TANESCO was still functioning as a parastatal organization whose activities were deemed of primary

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importance to the development of Tanzanian industry, that role ceases to be ‘national’ (in the planned economy sense) in the drive towards economic liberalization and privatization of resources during the 1990s. Under these circumstances TANESCO has become just another water-using economic activity whose rights to the national resource are hardly more important than those of other equally useful economic activities. These include smallholder agriculture, which is the livelihood of more than a million people in the Pangani basin, a majority of whom are poor peasants who are currently not using electricity— a situation that will, presumably, not change as a result of the Pangani Dam. By fostering the interests of the urban elites and international finance in the Pangani basin, the Nordic aid agencies are, in fact, undermining the very subsistence of the poor whom they have always claimed to help. ACKNOWLEDGEMENTS I am most grateful to Professor I.S. Kikula, Director of the Institute of Resource Assessment, University of Dar es Salaam, for allowing me to travel to the Kilimanjaro and Arusha administrative regions, which form a greater part of the upper reaches of the Pangani basin, to undertake further study of some of the issues discussed in this chapter. I am also grateful to Professor Ian Bryceson of NORAD and to Norplan in Oslo for facilitating access to relevant material. The ideas expressed here are, however, mine alone. REFERENCES Ainola, O. (1994) ‘A monument to development aid’, Suomen Kuvalenti, 18 March. Barrow, C. (1987) Water Resources and Agricultural Development in the Tropics. Harlow. Bayliss-Smith, T. and Owens, S. (1994) ‘The environmental challenge’, in Derek Gregory, Ron Martin and Graham Smith (eds) Human Geography: Society, Space and Social Science, London: Macmillan. Bryceson, I. (1994) ‘NORAD’s environmental policy on support to hydropower projects in developing countries’, in Nordic Dam-building in the South, Proceedings of an International Conference 3–4 August, 1994, Ann Danaiya Usher (ed.), Stockholm: Naturskyddsföreningen. Feierman, Steven (1990) Peasant Intellectuals: Anthropology and History in Tanzania, Madison: University of Wisconsin Press. FIVAS (1996) ‘Power and conflicts: Norwegian hydro-power developers in the Third World’, January, Oslo. Mimeo. Foley, G. (1991) Energy Assistance Revisited: A Discussion Paper, Energy, Environment and Development Series No. 11, Stockholm: Stockholm Environment Institute, in collaboration with SIDA. IVO International and Norplan (1990) The Pangani Falls Hydropower Redevelopment Project. Environmental Impact Assessment, Stuart Stevenson (ed.), 4 vols, Oslo: Norplan.

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Katyega, M.J. J. (1994) ‘Nordic involvement in the Pangani River hydropower project’, in Nordic Dam-building in the South, Proceedings of an International Conference 3–4 August, 1994, Ann Danaiya Usher (ed.), Stockholm: Naturskyddsföreningen. Masao, F.T. (1974) ‘The irrigation system in Uchagga: an ethno-historical approach’, Tanzania Notes and Records 75:1–8. Mung’ong’o, C. (1994) ‘Realities of environmental impact assessment for the Pangani Dam in Tanzania’, in Nordic Dam-building in the South, Proceedings of an International Conference 3–4 August, 1994, Ann Danaiya Usher (ed.), Stockholm: Naturskyddsföreningen. Persson, P. (1994) ‘SIDA’s policy on support for large dams with special reference to environmental and social impacts of Pangani Dam in Tanzania’, in Nordic Dambuilding in the South, Proceedings of an International Conference 3–4 August, 1994, Ann Danaiya Usher (ed.), Stockholm: Naturskyddsföreningen. Runge, C.F. (1984) Institutions and the free-rider: the assurance problem in collective action’, Journal of Politics 46. Sender, J. and Smith, S. (1990) Poverty, Class and Gender in Rural Africa: A Tanzanian Case Study, London: Routledge. Swedpower (1993) Pangani Falls Redevelopment Independent Review, Stockholm, June. Tenga, R.W. (1992) ‘Land allocation and land grabbing in Arusha Morogoro’, University of Dar es Salaam, Department of Law. Mimeo. United Republic of Tanzania (1994) Report of the Presidential Commission of Inquiry in Land Matters, Volume 1, Land Policy and Land Tenure Structure, Dar es Salaam: Ministry of Lands, Housing and Urban Development, in cooperation with the Scandinavian Institute of African Studies, Uppsala.

9 PANGANI POWER STRUGGLE Nordic dam builders on a Tanzanian river Ann Danaiya Usher

Pangani Falls is a Nordic dam project par excellence. The project was funded bilaterally through grants from the Norwegian, Finnish and Swedish aid agencies —NORAD (42 per cent), FINNIDA (33 per cent) and Sida (25 per cent)—at a cost of about US $100 million. It was studied by consultants from the three countries, and built by construction, electrical equipment and turbine companies from the same three. Pangani was commissioned in October 1994. Its owner TANESCO (the Tanzanian state utility) is supplying electricity to urban and industrial users, mostly in Tanga downstream. But the dam does not have enough water to run at full capacity, nor is it likely to do so in the future. The inadequate supply of water is not an unforeseen result of faulty design or of a sudden change in the weather. On the contrary, as early as 1989 Nordic consultants had documented intensive irrigation that diverted water upstream of the dam, and reported that ‘such irrigation [could] reduce the energy potential for the [project], and if [it increases] could effect economic viability’ (IVO/Norplan 1989a: 3–7). All indications suggest, however, that not building or even down-sizing the Pangani project according to the carrying capacity of the basin was never remotely considered by the consultants or the aid agencies. Rather, given the limited amount of water, it was the consultants’ opinion from 1989 that agriculture should make way for hydro power—a significant rearrangement of water use in the valley as irrigation required more than double the water of hydro generation (IVO/Norplan 1995:25). ‘From Tanzania’s overall point of view, it would…be more economic to reserve most of the river water for power production, while satisfying a limited need for irrigation’ (IVO/Norplan 1989a: 3–7) (my italic). To achieve this goal, they recommended that the Tanzanian state ‘coordinate and control all human activities’ related to water use in the valley and ‘bring them into line with an overall development plan’ (IVO/Norplan 1989a: 3–8). This approach governed the consultants’ work in Tanzania for the next six years. Determined to push the project through, they devoted significant energy and resources to working out ways to get upstream farmers to use less water, in order to increase the flow into the dam. Their solution was a water board that could impose water-user fees. Peasant communities were resentful about suddenly being forced to pay for water that they had been accustomed to man-

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aging themselves in accordance with centuries-old irrigation systems. Bolstered by political changes in Tanzania under the new multi-party government that came into power in 1992, many refused to cooperate. But Nordic aid agencies backed the consultants’ proposal, and made the establishment of a water basin management board for the Pangani basin a condition of the financial package. The board would impose the fees, and act as a mechanism for transferring political control over water from local communities to a central authority. In effect, the Nordic project laid the groundwork for a power struggle between the Tanzanian utility on one side and the poorest farmers of Pangani valley on the other; one that will probably intensify as competition for water grows in the years to come. The same Nordic companies, meanwhile, have gone on to build another aid-financed dam in Tanzania. NORDIC CONTRACTS FOR PANGANI Even more than Indo-China, Tanzania has been one of Sweden’s main aid recipients since the founding of SIDA in 1965, just four years after Tanganyika gained independence from British colonial rule. This has meant that the African nation has also become an important market for Nordic companies. The Pangani Falls Redevelopment Project is another example of how development aid money has been used to subsidize national firms building dams abroad, with questionable benefits to the recipients. It is not, however, a new phenomenon for Nordic donors in Tanzania. In 1970, the Swedish International Development Authority (SIDA) joined the World Bank with about US $ 10 million of support for the Kidatu power dam on the Great Ruahu river in central Tanzania. Swedish finance paid for Swedish companies to build transmission lines, and for Sweco, the Swedish consultancy firm, to advise TANESCO. (Swedish aid in fact funded most of Sweco’s work on hydro dams in Africa during the 1970s and 1980s (Development Today 18 (1994)).) ‘Tanzania lacks necessary trained personnel to operate Kidatu power station, therefore qualified Swedish people are needed to run the station and train Tanzanian personnel’, a Foreign Ministry press release from 1970 stated. Ecological effects were studied by Professor Olov Hedberg of Uppsala University, who found ‘[no] ecological obstacles that stand in the way of the project’ (Royal Swedish Ministry of Foreign Affairs 1971). Twenty-five years later, Even Sund of NORAD had this to say about Kidatu: In the M’tera reservoir, which supplies the country’s two most important power stations, M’tera and Kidatu, the water level was so low before Christmas [1994] that there were only 15 centimetres before the station had to be closed. The stations were run at only one-quarter of capacity. (Sund 1995) Pangani, it seemed, would be plagued by the same water availability problemsas its predecessors in Tanzania. Sund wrote early in 1995:

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Without electricity from the Pangani power station, the electricity in the country would have collapsed totally. When rainfall came at Christmas time, the authorities closed M’tera power station to try to fill up the almost empty reservoirs. In order to secure the availability of electricity, the production from Pangani was increased so that Pangani power station is now running at two-thirds capacity. One hopes for rain in Tanzania in the month of March, but the strict rationing must be maintained in case the rain doesn’t come. (Sund 1995) Swedish aid to Tanzania began with a focus on social sectors like health and education, moved towards small industry support during the 1980s—90 per cent of this came back to Sweden (SASDA 1994b: 113)—and fell into line with the structural adjustment programmes of the International Monetary Fund by the 1980s. Over the years, the total Swedish aid disbursement to Tanzania amounted to about US $2.5 billion at 1993 prices. But by the early 1990s, few positive results from this massive injection of cash could be identified, and the Swedish aid-givers were now increasingly worried about the growing corruption in the Tanzanian bureaucracy. In 1994, after three decades of support, Sweden and other donors temporarily froze aid to Tanzania. Notably, this drastic measure influenced neither Pangani, the construction of which continued unheeded, nor further plans to develop hydro power in the country. For Norwegian companies, the links between aid and trade in Tanzania also proved profitable. As in Sweden, Tanzania was a major programme country for the Norwegian Agency for Development Cooperation (NORAD), and during the 1980s, Norwegian firms exported goods worth US $128 million to Tanzania, and millions more in consultancies. In his book on the Norwegian aid business Bistand eller Børs?, Bjørn H. Amland writes: This has been a safe and protected market for many major companies such as Norsk Hydro, Dyno, Kvaerner and Asea Brown Boveri (ABB)…. Almost all Norwegian development aid is in the form of grants. This type of export is therefore free of problems connected to credit ratings and loans, even though many of the recipient countries are bankrupt. (Amland 1993:77) Though it is not a major player in Third World hydro projects, the fact that the Finnish International Development Agency (FINNIDA) decided to finance Pangani along with the other two Nordic aid agencies ensured that a share of contracts went to Finnish companies. Pangani was in fact Finland’s largest-ever aid project to Tanzania (Porvali et al. 1995:293) and the first to require an environmental impact assessment (Kari Silfverberg, Interview, 22 March, 1995). It is safe to assume that without subsidized finance from the Finnish aid budget, Finnish firms would not have been involved.

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It was thus FINNIDA that financed the US $2.5 million feasibility study, which was carried out in 1989–90 by a joint venture between two Nordic consultancy firms—the Finnish Imatran Voima (IVO) International and Norway’s Norplan. While Norplan had worked in the 1970s and 1980s on Tanzania’s controversial Stiegler’s Gorge dam project (which was eventually scrapped because of environmental concerns), IVO International had no previous experience in Tanzania. IVO/Norplan’s study concluded that the new Pangani Dam was the best investment option to meet Tanzania’s growing need for electricity. The environmental impact assessment reported in December 1989 that ‘no massively adverse effect prejudicial to the whole project has been or is now likely to be identified’ (IVO/Norplan 1989b: 12). The environmental adviser to FINNIDA at the time, Kari Silfverberg, who took up his new position just months before the feasibility study got underway, was critical of how the agency handled the project. He drew attention to the fact that the same IVO consultants who had written the terms of reference for the feasibility study were rehired to carry out the study. Silfverberg commented that ‘FINNIDA should have had a stronger role in writing the terms of reference. But there was too much money available, and they had to get it out fast. It often happens that consultants end up writing the terms of reference for themselves and FINNIDA just rubber stamps it’ (Kari Silfverberg, Interview, 22 March, 1995). In the case of Pangani, IVO and Norplan were also given contracts to procure supplies and supervise construction. Thus the two firms were involved in all stages from project identification to implementation. Construction and equipment contracts were allocated to Norwegian, Swedish and Finnish firms roughly according to the financial contribution shares of the donors. There is no serious competition in the region for mechanical and electrical works, with the main suppliers being Kvaerner and ABB, respectively (SwedPower 1990:1:31 (32)). Thus it followed that NORAD paid for Kvaerner turbines, and SIDA paid for ABB generators and control equipment. Imatran Voima, the Finnish utility and owner of IVO International, was among the Finnish companies granted contracts for construction of the main power line, a share of civil works, and some specific items in electrical works. After the debates over the Theun Hinboun project in Laos during 1993, NORAD established a rule that consultants with vested interests in the outcome of projects may not be hired to do feasibility studies. But this was 1990, and FINNIDA had no explicit rules against these practices. Silfverberg felt that such conflicts of interest were ‘not in line with existing procedural rules’, but his opinion was overruled by Finnish aid bureaucrats who favoured the project. For SIDA, tied aid (that is, development projects that are ‘tied’ to procurement contracts for companies from the donor country) is generally frowned upon. The agency’s records showed that in 1990 it had one of Europe’s lowest levels of tied aid: only 21 per cent, as compared to 39 per cent in Norway, 72 per cent in Finland and 66 per cent in Germany (SASDA 1994a: 9). Nevertheless, the return flow to Sweden (that is, the actual share of aid disbursements that are used to pay for goods and services in the donor country) was 50 per cent in the same year.

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(SASDA 1994a: 9). The huge discrepancy may be partially explained by projects like Pangani, which was not formally tied to Swedish contractors. ‘Semi-tied’ is how Per Persson, in charge of energy projects at SIDA, described Pangani. Although there was no competitive bidding for contracts, he explained, the consultants were asked to solicit offers from other countries’ suppliers to ensure that prices were competitive. He said, in the case of Pangani, negotiations led to a reduction in the price ABB had set after comparison with international prices…. The basis of this kind of aid is the interest of Swedish politicians in getting Nordic companies involved in the process. (Per Persson, Interview, 12 April, 1995) Persson estimated that this procedure results in prices for equipment that are within 5 per cent’ of the market rate. Cosy relationships established in one project often lead to further deals. In this case, contracts on Pangani were directly related to the larger Kihansi project, a World Bank hydro dam on the Rufiji river with Nordic co-financing. Persson explained: ‘TANESCO has opted for a negotiated contract [for Kihansi] with ABB Generation and Kvaerner because their experience in the case of Pangani was good. They prefer to work with these companies again.’ According to FINNIDA’s environmental adviser Silfverberg, Pangani also served as a stepping stone to this bigger prize for the consultancy firms. IVO and Norplan had been competing for the World Bank dam, Kihansi. IVO couldn’t have competed on Kihansi without Pangani. They had no previous experience in Tanzania, but there are no more projects in Finland, so they have to find experience elsewhere in order to stay in business. Also, it’s very important to get to know the decision-makers in Tanzania. (Kari Silfverberg, Interview, 22 March, 1995) As it turned out, NORAD’s involvement ensured that Norplan won a contract for Kihansi, while budget cuts at FINNIDA meant that IVO International was out of the race. Finally, SwedPower was hired by Sida to appraise the IVO/Norplan feasibility study. In 1990, the Swedish consultants confirmed the basic assumptions of the Norwegian—Finnish report. As a result, an agreement was reached in 1991 between Tanzania and the three Nordic donors on a modern, underwater power plant with maximum output of 66 megawatts. Construction of Pangani would be financed by a grant from the Nordic aid agencies to the Tanzanian government, and a loan agreement between the government and TANESCO.

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TRADITIONAL IRRIGATION IN THE BASIN: THE CONSULTANTS’ OBSERVATIONS The preceding chapter, by Claude Mung’ong’o, refers to the impressive cultural, technical and spiritual systems of knowledge embodied in traditional irrigation in the Pangani valley. These complex systems, adapted to the particular characteristics of local environments, were designed to increase flexibility of food supply so that if rainfall was irregular, one season’s crops could carry families over to the next. The persistence of traditional irrigation in spite of colonialism and post-independence socialism may be partially attributed to the fact that small-scale water management, being controlled by local users, provided a safety net, especially for subsistence farmers. By the 1980s, however, traditional irrigators were being forced to compete for water in the valley with large-scale irrigation projects that supported agricultural export schemes, mostly funded by Western donors like the World Bank. The Nordic dam would exacerbate the pressure on this precious resource. Often hydro-electric projects have destroyed time-tested systems of water management without even acknowledging their existence. In this case, traditional irrigation simply could not be ignored because it is so widespread along the river and its tributaries, and because of the long history of peasant struggle to maintain control over water and land in the valley. In fact, the Nordic consultants devoted significant resources to studying small-scale irrigation in the valley. But the purpose of their investigations was not to deepen understanding of local culture, or to determine farmers’ needs and opinions about how river management could be improved. Rather, from 1989 to 1995, reams of studies were carried out with the goal of ascertaining how much water was being used, and how this amount could be reduced so as to increase the flow into the two turbines downstream. In their reports, the consultants made several observations. To begin with, the 1990 IVO/Norplan watershed management study documented the prevalence of traditional irrigation in the valley and its uniqueness to the region, and emphasized the distinction with newer projects: ‘Irrigation has been a traditional activity in the Arusha and Kilimanjaro regions for generations, more so than in the rest of Tanzania (IVO/Norplan 1990a: 2). In the upper catchment area almost 20 per cent of the cultivated area is irrigated, compared with a 5 per cent average for the rest of the country. ‘Irrigation is therefore an important activity in the Kilimanjaro region…. The traditional form of irrigation has been to lead water onto the fields by unlined furrows.’ Farmers have ‘customary water rights which are normally controlled by the villagers’ (IVO/ Norplan 1990a: 3). But it is the large-scale irrigation projects implemented during the 1970s and 1980s, and others being planned, that have ‘negative effects on all water-related downstream activity, particularly in the dry season when water availability is low’ (IVO/Norplan 1990a: 2). In its appraisal, SwedPower also recognized the pervasiveness of these water management systems throughout the Pangani basin: ‘Irrigation is traditional in the Pangani catchment. The best conditions for agriculture in terms of soils, drainage and water availability are the slopes of the mountains, ie the Mt. Meru,

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Kilimanjaro, Pare and Usambara. In many of these areas traditional unlined furrows are used for water abstractions’ (SwedPower 1990:6:6 (13)). The consultants observed that serious water conflicts are a fairly recent phenomenon, caused not by traditional users but by new, large-scale projects. According to the terms of reference for IVO/Norplan’s watershed study: Up to the late 1980s there were few conflicts in the use of water due to its relative abundance except in extremely dry years. Little mention is made of conflicting water uses in the Kilimanjaro and Tanga Water Master Plans of 1977. The potential conflicts are not apparent from the initial feasibility study for the Pangani Redevelopment Project in 1985. This situation is changing rapidly with the introduction of major irrigation schemes in the Moshi and along the Mkomazi tributary. (FINNIDA 1990:1) Among these are World Bank projects to promote export-oriented agriculture, two large JICA projects—the Lower Moshi (1987) and the Ngungu (1990) on the Mkomazi river—and at least three other forthcoming large-scale projects. Moreover, the consultants noted that while traditional systems have been adapted to the individual characteristics of climate and topography, modern systems function according to the size of the canals. This, they noted, results in a different scale of ecological impact in the two systems: Traditional furrows in mountain slopes and higher plains normally irrigate from January to March, while furrows in lower slopes and flat alluvial plains normally irrigate from March onwards. These traditional seasons may have arisen from matching of growing seasons to the availability of water in the rivers. (IVO/Norplan 1990a: 5) Larger centrally organized irrigation projects, on the other hand, require water through the whole year, with crop-rotation patterns organized to maximize water use and canal capacity. In addition to consuming large amounts of water, these schemes are the cause of raised ground-water level and salinization of the soil, and could increase the prevalence of water-borne diseases like malaria and bilharzia. If the new dam is built, IVO/Norplan stated, further large-scale irrigation should be ‘discouraged or even forbidden’ (IVO/Norplan 1990a: 14). Thus, in the opinion of the consultants, traditional irrigation systems were unique to this part of Tanzania, widespread in the Pangani valley, and functioning relatively smoothly with minimal ecological impact. The problem was that these systems were a direct threat to electricity generation downstream.

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UNCERTAINTIES ABOUT WATER AVAILABILITY The documentation for the Pangani hydro-power project can be found in 19 brown cardboard boxes in the SIDA archives in Stockholm. Much of it is devoted to the question of water availability in the Pangani basin. The reports, mostly written by the three consultancy firms Norplan, IVO International and SwedPower between 1989 and 1995, exhibit a palpable tension between a real concern about the water shortage that could endanger power production and the need to reassure donors and the public of the project’s success. The official line was that there was enough water in the river to generate electricity at the Pangani Dam, as long as it was managed properly. The IVO/ Norplan feasibility study stated confidently in 1990 that the Pangani station already has ‘a minimum water right of 19.8 m3/s…[and] is therefore not dependent on new water rights…. It is therefore possible to continue development of irrigated agriculture upstream…without endangering the economic viability of the Pangani Redevelopment Project’ (Porvali et al. 1995: 294). The final 1991 project document, on which the donors’ agreement was based, swept all concerns aside: ‘There are no big risks related [to] the project… the hydrological risks are small. The Nyumba ya Mungu reservoir [upstream] will ensure sufficient flow for power production, also allowing further irrigation developments’ (IVO/Norplan 1991:20). This optimism was not supported by the consultants’ other findings, however. From the initial study phase until well after the dam was commissioned, uncertainty persisted about several key factors: • how much water was available in the basin overall for irrigation, hydro and other uses; • how much water was actually needed to run the turbines; • how much less water farmers would have to use; • how this reduction would affect farmers. Nordic donors made the water basin management board a condition of the agreement, in response to these uncertainties. The beauty of the water board concept was that it provided a tool that Tanzanian authorities could, in theory, use to reallocate water in the basin from farmers to the dam. At the same time, if there was insufficient water to run Pangani’s turbines, the blame would fall not on the Nordic builders, but on an inept and under-funded local bureaucracy. Throughout the construction period, there were reports on the water situation at regular intervals. In November 1993, Jon Einar Værnes of Norplan reported: ‘the situation is not good. It has been, and is, a drought period…. Unfortunately, not all water right holders and other users seem to agree about the common responsibility to be economical with the use of water’ (IVO/Norplan 1993:10). He stated that precipitation at the dam site area was 39 per cent and stream flow was 31 per cent of the 1981–1992 average. The following year produced equally gloomy findings about the water situation at the dam site. Precipitation in the valley was ‘below normal’ during

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the first half of 1994, with the volume of the Nyumba ya Munga reservoir upstream at only 58 per cent of full capacity. Stream flow at Pangani was 25 per cent of the 1981–1992 average (Luhumbika 1994:2)—just 6 m3/s during the month of February (Porvali et al. 1995:295). According to one estimate, this would be enough to operate at most one turbine for only one shift. If this state of affairs continued for several years, the whole feasibility of this large Nordic/ Tanzanian investment would be open to question (Porvali et al. 1995:295). A 1995 review by Norplan and IVO revealed that even after construction of the dam was complete, the overall availability of water in the basin was still not known. To [ensure] that the total water abstractions do not exceed the water availability in the Basin, [the water board] should be given authority to issue only a certain amount of water…. This amount should be stated by the board when knowledge of the water balance in the basin is further clarified [my italic]. (IVO/Norplan 1995:3) The consultants worried that there was not enough water to meet the long-term electricity-generation goals. Commenting on the prospect of reduced electricity output, they wrote: ‘These results may seem dramatic’, but they warned that their calculations were still Very simplified and uncertain. In any case, the situation is unclear, and this gives a good illustration of how important it is to obtain an efficient water management’ (IVO/Norplan 1995:26) (my italic). Another area of uncertainty was the amount of water needed at the turbines. Kari Silfverberg had raised specific questions about whether TANESCO had the legal right to use as much water as was needed to run the turbines. The Tanzanian utility’s water right at the dam site of 19.8 m3/s, according to Norplan and IVO, corresponded to a yearly energy production of 254 GWh. But SwedPower’s November 1990 appraisal raised doubts about whether this flow was enough to guarantee full power production, and wrote that ‘short- and medium-term firm energy generation established by [Norplan/IVO] for the project is…not protected fully by existing water rights’. They suggested an additional water right of up to 24 m3/s. The Swedes warned that otherwise, to judge from existing trends in irrigation expansion, the firm energy potential of the new Pangani Dam could be reduced by 5 per cent in 2000 and 17 per cent in 2020. Now, the size of turbines is fixed, as is presumably the amount of water required to turn them. One can therefore speculate that the proposed additional right would serve to increase TANESCO’s legal power to expropriate water from other users, in a context where there is simply not enough water to go around. The Swedes tried to estimate the decrease in water flow at the dam site as a result of expanding irrigation, and came up with an estimate of 6.4 m3/s in the long term. ‘The total potential for irrigation in the area is so high that all Pangani river water could ultimately be used for irrigation (SwedPower 1990: 6:6 (13)). Though the loan agreement was based on 19.8 m3/s water rights, IVO/Norplan’s

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1995 review again used the figure of 24 m3/s in its calculations of the total water requirements of the dam (IVO/Norplan 1995:25). If the amount of water needed at the turbines was unknown, so was the level of reduction needed upstream. Nevertheless, the builders of Pangani saw irrigation—large- and small-scale—as a general threat to their project. They claimed that the introduction of water fees would increase the efficiency of water use, thereby freeing up a greater volume downstream. As NORAD put it: ‘In order to secure enough water for both the power station and others with needs, it was necessary to achieve a better use of water resources in the Pangani basin. Wastage of water had to be stopped’ (Sund 1995). The Swedish consultant SwedPower ‘strongly supported’ the notion, and added that ‘the establishment of a Water Board for the Pangani has to be put as a condition for the donors’ financing of the project’, with procedures and a schedule for the board’s establishment included in the loan agreement (SwedPower 1990:1:7 (32)). Was water used for irrigation really being ‘wasted’? Did as little as 15 per cent of the water, as some claimed, used for irrigation return to the river, and would a reduction of water used in agriculture upstream really mean more for the dam? We are not in a position to answer this question. Certainly, the Nordic reports provide ample documentation of leaking pipes and unmonitored sluice gates. One cannot help wondering, though, where the extra water ended up eventually, if not downstream. Was it not, after all, plausible that a large part of the excess returned either to the river’s mainstream or into the ground water? Pangani’s builders evidently also wondered this. One of Norplan and IVO’s final reports, submitted in May 1995, opened just this can of worms: One condition for [our] conclusions is that the excess irrigation water is really lost, and that reduced abstractions for irrigation give a corresponding increase in water flow downstream. Since this fact is both important and questionable further hydrologic investigations are being made to answer this question [italic in the original]. (IVO/Norplan 1995:29) Further doubt was raised in a discussion of efficiency of traditional irrigation, estimated to be a mere 25 per cent. The excess, it was suggested, ‘either infiltrated down to the ground water or [left] the irrigated land as surface runoff (IVO/Norplan 1995:24). By 1995, however, the dam was built, the water board was in place, and no such doubts entered the political battle over the creation of the board. ‘INTERNAL POLITICAL MATTERS’ Ideally, the board would maintain a register of all water users in the basin, ensure that they were paying appropriate fees, and have powers to limit the amount of water used. The fees would serve a dual purpose: to encourage farmers to use water more sparingly; and to improve irrigation structures like canals and gates.

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The consultants’ main argument in favour of establishing the water board was economic. They warned that Tanzania could not afford not to control the use of water. ‘There are large economic costs to Tanzania associated with all future abstractions of water which reduce the flow in the river at Hale and Pangani power stations, especially after the Pangani Redevelopment Project is commissioned’ (FINNIDA 1990:1) This assumed that the value of river water for agriculture per cubic metre used is far less than for power production. The industrial sector was reported to be a more than twice as profitable way of using water than modern irrigation agriculture, and almost ten times more lucrative than traditionally irrigated fields. In contrast, residential electricity consumption scored a negative value in this comparison (IVO/Norplan 1995:21). From these results, Norplan and IVO drew the following conclusions: Some of the traditional irrigating farmers may lose income if water [flow is reduced], and the food security might be decreased. It is a political decision whether this would be an acceptable loss compared to gaining higher total income for the society, or how these farmers could be compensated [my italic]. (Norplan/IVO 1995:22) It was, however, unthinkable according to the consultants to restrict the use of electricity by city dwellers. ‘We cannot draw the conclusion that electrical power should not be developed for residential consumption. Electricity in the homes is a general welfare commodity, giving opportunities for electric lighting and other benefits’ (Norplan/IVO 1995:22). Then comparing modern and traditional irrigation, Norplan and IVO consultants determined that in terms of water-use efficiency, the latter scored much lower than modern concrete-lined systems. ‘Traditional irrigation practices result in inefficient use of water and represent the biggest potential for reduction in present abstraction rates’ (IVO/Norplan 1990a: 14) (my italic). ‘Most of the big irrigation projects are operated satisfactorily and according to the water rights granted’, whereas with traditional irrigation Very often there are no regulating facilities and much more water than needed is abstracted from the rivers’ (IVO/Norplan 1990a: 7). In principle, the consultants felt that all farmers with an irrigation scheme should pay a fee, though how rates were set constituted an ‘internal political matter’ (IVO/Norplan 1995:5–6). The Tanzanian authorities faced a tough decision either way. ‘If it will be politically decided that the farmers, who in general are ‘poor’, shall not pay a [water user fee], others must pay more or the activities of the Pangani Basin Water Authority must be reduced’ (IVO/Norplan 1995:3). But if water efficiency was not improved, consultants foresaw ‘harder water conflicts in the future, not least between the farmers’ (IVO/Norplan 1995: 4).

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THE DONORS’ HARD LINE In accordance with the consultants’ proposal, the water board was made a condition of the 1991 agreement between the Nordic donors and the Tanzanian government. As the donors saw it, this was absolutely essential if the plant was to operate effectively. They insisted that there was already a water conflict in the valley—with or without the dam—on account of ‘illegal’ use of water by farmers. Nordic aid would help to solve this by rationalizing the management of water in the river. Comparing Pangani with the situation in northern Sweden when water resources were expropriated from indigenous Sami people so that dams could be built, SIDA’s Astrid Dufborg remarked: ‘Yes, traditionally they had ownership, but at some point, you have to intervene. You can’t just say it’s a historical right, therefore you cannot touch it…but you have to compensate them’ (Astrid Dufborg, Interview, 18 January, 1996). No official in any of the Nordic aid agencies would argue against the principle of compensation for people who must be resettled when a dam is built. Yet providing compensation to Pangani valley farmers who might suffer as a result of the new water management system was never given serious consideration. In fact, small farmers—the largest group of users in the valley—were not even represented on the water board. Studies had shown that water-user fees might cause loss of income or even hunger in some communities. But while the consultants’ reports had gone to great lengths to show that using water for electricity generation could yield a higher income than agriculture, there was no attempt to calculate the potential cost of the scheme to farmers, or how many might be affected. From the Tanzanian perspective, telling subsistence farmers to use less water so that city people could have electricity proved more difficult. As Claude Mung’ong’o describes in the preceding chapter, a combination of local resistance and sweeping political changes made such centralization of control over resources much harder to impose than in the days of the one-party state. Among local politicians and within the government bureaucracy, opinions differed about how to deal with the water question. By 1993, the water board was in place. But reports from the Tanzanian authorities came from the valley indicating that farmers were refusing to cooperate: ‘We have started work on registration and information. But in some places we have encountered villagers carrying spears who have not been at all receptive to arguments about water tariffs’ (Utvikling 1993). By the middle of 1994, with the dam almost complete, the water-user fee system was still not functioning and the donors lost patience. In June, NORAD, which felt that the recipient country had failed to live up to its end of the deal, devised a way of punishing Tanzania. The aid agency advised the Ministry of Foreign Affairs to withdraw its promised support from the Kihansi hydro project (Development Today 14 (1994)). ‘The authorities in Tanzania have committed themselves to securing improved management of the water in the river. As this has not been done, it is natural that it will have consequences for future projects’, NORAD’s Africa Division chief told the Norwegian news agency

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(Development Today 14 (1994)). NORAD had committed some US $60 million to Kihansi. A large share of this was to go to Norwegian companies, while the project was worth millions more in additional contracts. Cutting this aid would almost certainly have jeopardized the chances of these companies winning contracts on the second dam. With the possible negative consequences for the country’s dams industry undoubtedly in mind, Norwegian Aid Minister Kari Nordheim-Larsen overruled NORAD’s proposal, and reiterated her promise to co-finance Kihansi. The final irony was that the minister’s decision to support Kihansi was made several months before the environmental impact assessment for that project was even started. Though NORAD’s act of reprisal against Tanzania was never carried through, the threat evidently bore results. Four months later, in a letter addressed to Norplan’s economist Alexander Kristiansen, the Tanzanian Ministry of Agriculture announced that it had ‘recognized the need to introduce water fees’ (United Republic of Tanzania 1994). REFERENCES Amland, Bjørn (1993) Bistand eller Børs?, Oslo: Cappelens Forlag. Bryceson, Ian (1996) ‘Norwegian hydropower in Tanzania’, in Power and Conflicts: Norwegian Hydropower Developers in the Third World, Oslo: FIVAS, January, pp. 99–106. Chale, F.M. M. (1990) ‘Fisheries studies by F.M. M. Chale, Department of Zoology and Marine Biology, University of Dar es Salaam, Tanzania. A report to Norplan, Dar es Salaam, May 1990’, in Pangani Falls Redevelopment Main Report: Final, October 1990 (Section E6, Part 2). Feierman, Steven (1990) Peasant Intellectuals: Anthropology and History in Tanzania, Madison: University of Wisconsin Press. FINNIDA (1990) Watershed management studies of Pangani river basin, Tanzania, terms of reference for consultancy services (831–24BG.TOR/gh90). FIVAS (1996) ‘Power and conflicts: Norwegian hydro-power developers in the Third World’, Oslo, January 1996. IVO International/Norplan (1989a) Pangani Falls Redevelopment Interim Report, December. —— (1989b) Pangani Falls Redevelopment Interim Report: Annex A, Report on Preliminary Environmental Impact Assessment, December. —— (1990a) Pangani Falls Redevelopment Watershed Management Studies: Phase I Report, September. —— (1990b) Pangani Falls Redevelopment Main Report: Final, October 1990 (Section E6, Part 1: ‘Fisheries and fresh water biology’). —— (1991) Pangani Falls Redevelopment Project, Project Document. —— (1993) Pangani Basin Water Management Report about the Activities in the Period July—September 1993, 4 November. Luhumbika, B.A. S. (1994) Water Officer progress report for the period January—June 1994, Pangani Basin Water Office.

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Porvali, Harri, Ruotsi, Jorma, Laaksonen, Kalle and Vuorela, Ulla (1995) Evaluation of Development Cooperation Between the United Republic of Tanzania and Finland. Report 1995:1, Helsinki: Finnish Cooperation Development Centre. Royal Swedish Ministry of Foreign Affairs (1971) Documents on Swedish foreign policy new series I: C: 20, 14 December, 1970, press release: Stockholm 1971. SASDA (Secretariat for Analysis for Swedish Development Assistance) (1994a) Links Between Development Assistance and Donor Country Exports—The Case of Sweden. Report 1, Stockholm: Ministry of Foreign Affairs. (1994b) Evaluation of Swedish Development Cooperation with Tanzania. Report 5, Stockholm: Ministry of Foreign Affairs. Sund, Even (1995) ‘Pangani power project saves Tanzania from power crisis—plant is ready half-year before schedule’, in Innsyn (NORAD newsletter) 3, 3 March, Oslo: NORAD. SwedPower (1990) SIDA Pangani Falls Redevelopment Appraisal Final Report, November. (1993) Pangani Falls Redevelopment Independent Review, June. United Republic of Tanzania, Ministry of Agriculture (1994) Letter to Alexander Kristiansen, Norplan, 18 October, 1994. Annexed in Norplan and IVO International, Pangani Falls Redevelopment: An Analysis of Optimal Water Management in Pangani River Basin, Tanzania, Summary Report, 15 May, 1995. Utvikling (1993) No. 3, Oslo: Norwegian Agency for Development Cooperation (NORAD).

10 KVAERNER’S GAME Ann Danaiya Usher

The Pangue Dam on Chile’s Biobío river may provide the clearest indication yet of how aid for dams aids the rich, of the political nature of this kind of development assistance, and of how far Nordic aid has shifted away from its mandate of helping the poorest of the poor’. From the outset, the 450-megawatt Pangue was to be the first project in a six-dam cascade along the Upper Biobío. It is set to be commissioned in 1997, while the second dam in the series, Ralco— whose existence Nordic donors consistently denied—was underway by 1995. Pangue was an unusual candidate for Nordic aid for several reasons. Chile does not consider itself to be a developing country, and certainly not a ‘least developed country’, as are traditional recipients of Nordic aid. The aid money was, in this case, given neither to a local community nor to a government agency, but rather to ENDESA, a large private Chilean firm with clear ties to the former military government. The agreement between the company and the Nordic donors did not even have a government guarantee. Moreover, Pangue was deemed to be a commercially viable project that could, by definition, have been financed on strictly commercial terms. Creative circumvention of OECD regulations that forbid such arrangements was therefore necessary in order to ensure that Nordic aid went to Nordic contracts for this project. The Nordic financing of Pangue looks more anomalous still when juxtaposed with Nordic policy towards Chile during the preceding decades. Under its Prime Minister Olaf Palme, Sweden had supported President Salvador Allende’s government, and then the resistance against Pinochet. In the post-dictatorship era, opposition to the Biobío dams became the first environmental issue in Chile to rally civil society, partly because of new freedoms afforded by the return to democracy, and partly because the project and its owner were so strongly associated with the Pinochet regime. By funding Pangue, Nordic donors were effectively pitting themselves against a movement that they had for so many years supported, and in no small measure. SWITCHING SIDES The day after the September 1973 coup d’état that resulted in the death of President Salvador Allende and the end of the world’s first democraticallyelected socialist regime, the Swedish Prime Minister, Olaf Palme, expressed his

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indignation in Parliament at the actions of the Chilean military. ‘Salvador Allende’s peaceful metamorphosis of the community has been disrupted by military means. Allende was a president chosen by popular vote. He came to power after democratic election. For that very reason, he constituted a danger to his opponents’ (Palme 1976:176). As with Vietnam and Laos, the small states right to be independent was a cornerstone of this social democratic foreign policy. And as with the war in Indo-China, Sweden’s outspoken position on Chile put the small Nordic nation in direct confrontation with the United States, whose aid to the coup-makers was given much attention. As the Foreign Minister, Andersson, reflected in 1976: ‘The Nixon Administration obviously took great pains to thwart Allende…. International capital was also on the side of rightist forces. They felt their positions threatened…. The absolute power of capital was to be broken [by Allende]. Capital responded by helping to break Allende’ (Andersson 1978:186). In the immediate aftermath of the coup, Sweden was among the embassies that went out of its way to provide shelter from the madness. The Swedish Ambassador, Harald Edelstam, has been called a ‘latter-day Raoul Wallenberg’ (the Swedish diplomat who saved Jews during the Second World War) for taking personal risks to protect not only Swedes, but also Chileans and other foreigners being sought by the military and police. Edelstam was declared persona non grata and forced to leave the country a few months later. The embassy remained open throughout the dictatorship, but Edelstam was not replaced until 1990. During those 17 years, Sweden cut off official aid to Chile, as an indication of its opposition to the coup and the military government, and directed its attention instead to assisting pro-democracy groups in and outside Chile. Similarly, the Norwegian Ambassador, Frode Nilsson, received Chileans fleeing the dictatorship on the premises of the embassy in Santiago, and worked to get people out of prison and grant them asylum in Norway. For almost two decades, Nordic aid to Chile took the form of international lobbying to isolate the Pinochet regime, support and asylum for political refugees, and assistance to human rights and pro-democracy groups. When General Pinochet finally stepped down in 1989 and elections had taken place the following year, Sweden and Norway resumed normal relations with the government of the new President, Patricio Aylwin. Between 1991 and 1993, the Norwegian government granted US $14 million in humanitarian assistance for Chileans returning home from Norway and for vulnerable groups in Chile, such as victims of torture and their families. Apart from aid to Norwegian nongovernmental organizations working in Chile, this assistance stopped after 1993. In Sweden, ‘transitional humanitarian assistance’ was also extended by the Swedish government on the grounds that support was needed for the rehabilitation of victims of the military regime’s human rights violations. But this was gradually phased out, and Sweden’s real turn-around occurred in 1993. ‘Time to expand our cooperation with Chile’ was the title of a statement by Swedish Aid Minister Alf Svensson in May 1993, following a meeting with Patricio Aylwin during the Chilean President’s tour of Norway and Sweden

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(Svensson 1994:332). Svensson declared that the Swedish Board for Industrial and Technical Cooperation (BITS) was to be entrusted with the task of renewing the official links between Sweden and Chile, while Sweden’s focus in this endeavour would be on ‘developing cooperation in the area of the environment and research’ (my italic). This meant, in fact, financing the turbines for Pangue Dam on the Biobío river. ‘Sweden’s main concern here is to minimize the adverse effects [of the dam] on the Indian population and the environment’, he said. The total cost of the 450-megawatt hydro-power project was US $470 million. In December 1992, the International Finance Corporation (IFC), the privatesector lending arm of the World Bank, approved a US $70 million loan for Pangue (IFC 1992). The foreign-policy rationale behind this shift was to support Chile’s emerging democracy in the post-dictatorship transition phase. But from this point of view, Pangue was a curious choice because the dam had no Chilean government involvement, being a strictly commercial venture with a very profitable firm. True, the former national utility ENDESA had only recently been privatized; in fact, just months before the 1989 plebiscite that ended Pinochet’s presidency. In view of that, though, it was difficult to argue that providing finance to ENDESA (or more correctly, to its daughter company Empresa Eléctrica Pangue SA) constituted support for the new government. If Pangue SA was to be associated with any government, it was the former regime. This, presumably, presented no dilemma to the Swedish conservative parties in power in 1993, including the Moderaterna (conservatives), which had disapproved of the Social Democratic support to Allende under Olaf Palme. In the words of Pierre Schori, a Social Democrat and old friend of Palme, who had replaced Svensson as Aid Minister by 1996, the conservatives had ‘sent huge amounts of money to Chile to block Allende’s election victory’. Moreover, they ‘never supported a liberation movement or opposed colonialism…[they] sent goodwill visits to South Africa, defended the Vietnam war, declared their understanding of the “civilising mission” of Portuguese colonialism in Africa, [and] wished to intervene on the white side in Rhodesia’ (Schori 1994:22). If the Moderaterna were on the wrong side of all the good causes, their support for Pangue was at least politically consistent. But where did this leave the Social Democrats vis-à-vis the post-Cold War Biobío project? Swedish financial support for Pangue was—or should have been—problematic for the Social Democrats. In an interview in 1996, the Aid Minister, Pierre Schori, in fact distanced himself from the decision, insisting that his party could not be held responsible because it had been in opposition at the time. But the Social Democrats raised no objections in Parliament to Svensson’s 1993 declarations, and even if they had been in power, it seems unlikely that the decision would have been different. Pressed on the point, Schori gave an assurance that he knew several individuals personally in the new Chilean regime—‘these are people who fought against the dictatorship’—and trusted their judgement on the project

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(Pierre Schori, Interview, 20 March, 1996). But again, there was no Chilean government involvement in the Pangue deal. Reflecting on the decision from the receiving end, Pangue SA’s managing director, Gastón Aignerenen, speculated that the willingness to support the project without a government guarantee demonstrated the Nordic governments’ ‘confidence in the company’s credit-worthiness’ (Development Today 19 (1994)). Noting that Chile should not be considered a developing country because of its impressive economic growth, he also suggested that this might be the first time that Nordic aid went directly to a private company. In fact, it was not the first time. But according to Lars Liljesson, who handled the project at BITS, the practice in Sweden has been extremely rare. The normal procedure for government-to-government grants or loans for projects is to have a guarantee from the recipient—usually from the Ministry of Finance or the Central Bank—that an amount of currency will be set aside to ensure repayment of the loan. Another anomaly of the decision to finance Pangue was that Swedish aid funded both sides of the Biobío debate in Chile (Development Today 7 (1993), Dagens Politik, 15 December, 1995). Since 1992, the Swedish Society for Nature Conservation (SNF) provided core support to the non-governmental Action Group for the Biobío (GABB), which had been established in 1991 and has coordinated the public campaign against hydro development of the river. The US $50,000 annual grant comes out of a US $1.5 million fund from the Swedish International Development Cooperation Agency (Sida), managed by SNF’s North —South Programme. Thus in the name of supporting grassroots initiatives and non-governmental environment work, Sida (through SNF) backed the campaign to stop the damming of the Biobío. And in the name of supporting Swedish technology and know-how abroad, BITS subsidized the cost of turbines for the dam. This amounted to grants of about US $140,000 over three years to the former, and about US $11 million to the latter. SEE NO RALCO, SPEAK NO RALCO At the crux of the environmental debate about Nordic support to Pangue was ENDESA’s plan to build Ralco and four other dams on the Biobío river. In order to secure contracts for Nordic companies, Nordic donors had to maintain the absurd position of insisting that Ralco did not exist. As late as June 1995, officials at the Swedish Embassy in Santiago still kept to this line during interviews with Swedish researcher Malin Husard. But Ralco was an undeniable part of the overall hydro development plan from the beginning. In 1990, ENDESA engineer Rodolfo von Bennewitz Bastián had published a paper entitled Hydroelectric Resources of the Biobío Watershed. It stated in no uncertain terms that Ralco would be ‘the key piece in the hydroelectric development of the Upper Biobío’, which consisted of six dams in all (von Bennewitz Bastián 1990:112). Notwithstanding the continued denials of Nordic donors, Ralco was officially underway by 1995. For anyone who had

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seriously studied ENDESA’s overall plans for the Biobío, this was no surprise. Because of Pangue’s relatively low live storage capacity, Ralco—with its 3,400hectare reservoir, seven times that of the first dam—would be used to regulate the flow into Pangue. The creation of an artificial lake to supply water to a downstream dam would recreate the natural conditions of the Laja lake and dams in the nearby Laja river system. This principle was well known to Nordic dam builders, as a Vattenfall publication about Swedish hydro-power development makes clear: The natural lakes can often be used as reservoirs for seasonal as well as weekly regulation of the flow…. Some rivers have few lakes and reservoirs must be created by dams…. Most regulation dams are combined with power stations either in the original design or as a later addition. (Vattenfall 1988:20) From an electricity production point of view, a sufficiently voluminous reservoir upstream of Pangue was necessary to provide a constant supply of water during periods of low flow. From an environmental point of view, such a regulatory reservoir would have even greater impacts on the ecosystems and on surrounding communities. But it would also lessen the downstream impact caused by Pangue, which would otherwise have to close its sluice gates completely for long periods in the dry season to accumulate water. A constant, regulated flow from Ralco would eliminate the need to dry out the riverbed. Did the Nordic funders know that Ralco would be built? The question was central because all three donors—IFC, NORAD and BITS—seemed to accept the principle that cumulative environmental impact studies were a precondition in cases where other dams were planned for the same river system. Failure to do this would be a bit like paying for the tyres without looking at the overall impact of the car; or indeed, without admitting knowledge of the car’s existence. Complicating matters for the Nordic pro-dam lobby, Norwegian Aid Minister Kari Nordheim-Larsen had set a precedent in this regard in 1992, in connection with the Lesotho Highlands Water Project (which includes Katse, the highest dam in Africa). She decided against NORAD involvement on the grounds that the project was part of a larger scheme whose cumulative impacts were too serious (Development Today 9 (1993) and Horta 1995:227). This may explain why NORAD and BITS went to such great lengths to maintain their ‘ignorance’ of Ralco. The area of inundation of this second dam would be much larger than Pangue s, and would necessitate the resettlement of several hundred indigenous Pehuenche. The impacts of Ralco were deemed unacceptable, and acknowledging the further development of the Biobío would have jeopardized Kvaerner’s chances of obtaining financial help for the turbine contract. However, Kvaerner, the turbine supplier, was certainly aware of the kind of contract it was bidding for. According to Per Berg, the Vice-President for Hydro power at Kvaerner Energy:

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As a supplier, you don’t have an influence on the choice of design. You have to bid for what the customer has asked for…. We knew about six dams; that was commonly known. Whatever information we had, we gave to [NORAD and BITS]…everybody knew that Ralco would make Pangue more efficient, that it would increase the number of operating hours of the dam…. I don’t know how anyone could have missed that. (Per Berg, Interview, 11 October, 1994) In retrospect, NORAD and BITS are caught either way. The fact is that they paid for Kvaerner turbines that were indisputably—from a technical point of view— designed with Ralco in mind. In simple terms, either they did not know about the nature of the equipment they were financing, which raises questions about competence; or they were lying. SWEDISH ENVIRONMENTAL RUBBER STAMP On 1 April, 1993, BITS announced that it would support Pangue ‘on the condition that certain environmental matters are clarified and attended to’ (BITS 1993). But it was already clear at this point that these ‘matters’ referred only to the impacts of Pangue, and not to those of other dams planned on the river. BITS was vehement in its insistence that Pangue be viewed as a single project, and even suggested that Ralco was a figment of Chilean evironmentalists’ imagination. The press release continued: In Chile a relatively newly awakened environmental movement has turned against the regulation of the Biobío river. The criticism is mainly directed against the presumed or expected further extension downstream of the Pangue. The power station as such has…limited environmental impact, but it is feared by the environmental movement that the project shall lead to further exploitation of the river. No such concrete plan for such an imaginary total expansion has come to the knowledge of BITS and accordingly no environmental impact assessment for a regulation of the river…has been done [my italic]. (BITS 1993) Having made the scope of its concern clear, the agency commissioned the consultancy firm Sweco to give a second opinion of the environmental study financed by ENDESA that had been required as a condition of the IFC loan. The result was a ten-page document by Dick Johansson and Carl Arne Schmidt that formed the basis of BITS’ final decision. In the opinion of Jörgen Bengtsson, in charge of Latin America for BITS at the time, Dick Johansson is the leading expert on environmental impact assessments for hydro projects in Sweden. Stina Mossberg, then First Secretary at the Swedish Embassy in Santiago, explained Sweco’s role:

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[BITS’] March decision was conditional. We needed to look into the environmental impacts, and we didn’t yet know the outcome of the bid. But financially the project looked very sound. Immediately after March, we started a more intense interchange with the authorities…. It is the normal procedure at BITS to do a second opinion. (Development Today 7 (1993)) The Sweco report appeared at first to be extremely critical of the study, citing many of the shortcomings that Chilean critics had already identified. Johansson and Schmidt acknowledged an overall Vagueness’ and pointed to ‘the absence of detailed data…no field studies…lack of facts’. They stated: Being a study of environmental impact assessment, very little is said about the environment as such…. If you don’t know the details of specific components in the ecosystem, it is not to be expected that a clear and straight answer can be given…. Concerning impact on the living environment the absence of field data of various habitats and ecosystems inevitably influences the description, which becomes short (1.5 pages), somewhat vague…. Concerning the impact on man and her [sic] livelihood it is difficult to comprehend the importance or magnitude since there is no quotation of number of people directly or indirectly concerned…. At present, there is not any established program for mitigation. (Johansson and Schmidt 1993:1, 5, 6, 7) The study comprised a long list of inadequacies. Yet the authors’ conclusions contradicted the body of the report, suggesting no reasons for BITS to refrain from supporting the project. Noting that Chile had signed the Convention on Biological Diversity and that construction had already begun in any case, they wrote: Given the facts above, the environmental information so far available, the conclusions reached by the environmental studies and our field inspections during September it can be concluded that the impact issues all point in a manageable direction. The prerequisite is that the flow release is adapted to environmental needs established during the next phase of the studies. Thus from a purely environmental point of view, the environmental impact can be regarded as manageable. (Johansson and Schmidt 1993:8) Mossberg conceded that the report had been Very short’, but insisted that private conversations with the consultant contributed to BITS’ confidence in the project. She met Sweco’s Schmidt during his visit to Chile, and noted that he provided much more advice verbally than he included in the final document. ‘He told me that it was one of the best dam sites he had ever seen in his whole life . . . and

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that he trusts that the company will be able to handle the environmental impacts. I thought it was a pity that the report was so compressed’, she said, adding: ‘He told me that if he hadn’t been to the site to see how the project was working in practice, he might have thought there was not enough information’ (Development Today 7 (1993)). The study was dated September 1993, and the final decision to support Pangue was taken by the board of BITS on 3 December. By then, unknown to the project’s critics, the commercial agreement for the contracts had already been finalized. According to Per Berg of Kvaerner, a contract between the Norwegian turbine manufacturer and ENDESA was signed in October 1993, on the basis of BITS’ conditional decision in April—and ‘positive signals’ from NORAD —to provide SEK 225 million of Swedish funding. Kvaerner was probably not gambling much by expecting the go-ahead from BITS. But the firm was apparently willing to risk committing itself to the project independently of Norwegian aid finance, which was, at least from what was publicly known, still an open question. SECURING NORWEGIAN INTERESTS It is noteworthy that Kvaerner had first approached NORAD informally about the possibility of funding the main part of the turbines (Development Today 21 (1993)). The agency hesitated, though, presumably because the ecological consequences of building the dam and its impact on the Pehuenche people were very much in the news in Norway at the time. The decision to apply for credits through the company’s Swedish subsidiary, Kvaerner Turbin, turned out to be a wise move, as BITS covered the bulk of the funding, leaving only a small part to NORAD. The mixed credit from NORAD would have to cover the remaining 14 per cent of the cost of the turbines. As the ‘grant element’ (or subsidy portion) of such loans usually amounts to about one-third of the total, this meant that Kvaerner was gambling on about 5 per cent of the total contract. Now the most common argument in Norway favouring such aid subsidies is that they help to secure domestic jobs and production. This was not the case with Pangue, though. Because the contract had already been signed, the jobs were secure. Per Berg of Kvaerner Energy explained that without NORAD’s involvement ‘it would have been a problem for Norconsult and for us. We would not have had the subsidized funding, and it would have reduced the profitability of the project, of course’ (Per Berg, Interview, 11 October, 1994). ‘The only thing still at stake’, as a Development Today editorial pointed out, ‘was the size of profit. Kvaerner gambled on their Minister, [and] she came through’ (Development Today & (1995)). This was truly ‘Kvaerner’s game’. Thanks to the eventual positive decision of the minister, Norheim-Larsen, NORAD effectively topped up the company’s profits by 5 per cent. It would take one year for this to happen, though. Looking back, one cannot help seeing the public debate during that time as little more than a charade.

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Shortly after BITS’ April 1993 decision to fund Pangue, Socialist Party MP Paul Chaffey raised the matter in the Norwegian Parliament. Chaffey asked Nordheim-Larsen whether Norway intended to demand that Chile limit the project, in order to avoid casting Norway as ‘supporting the first step in a destructive project’. The minister replied: ‘In my opinion it is not natural to view the first phase [Pangue] as isolated from the rest…. I can assure the MP that we will base the decision on the same considerations as we did in the Lesotho project.’ This was not to be, however. What followed was a diplomatic intervention in the form of a visit to the Nordic region by Chilean President Patricio Aylwin in May—June 1993. This apparently tipped the scales. In Sweden, the Aid Minister, Alf Svensson, expressed to Aylwin his intention to support Pangue (though technically the ‘environmental matters’ had not yet been resolved). The meeting with the Norwegian Prime Minister, Gro Harlem Brundtland, may have been even more decisive, because while Swedish support was never really in doubt, an official guarantee was needed in Norway to assuage critics’ fears of Pangue leading to another dam. Aylwin accommodated his hosts. He admitted that there were plans afoot for other dams on the Biobío, but promised Brundtland that he would personally oppose further damming of the waterway (NTB (Norwegian News Agency), 2 June, 1993). In 1994, the Norwegian Ambassador to Chile, Reiulf Steen, said of the Brundtland—Aylwin meeting: ‘the [Chilean] President assured our Prime Minister that only Pangue would be built…. Some critics say it will go ahead, but it’s impossible for us to tell a democratically elected president that he is lying’ (Reiulf Steen, Interview, September 12, 1994). Contradicting all available technical information, Nordic funders chose to interpret this as a political guarantee, even though the recipient of the aid was a private firm and the Chilean government was not formally involved in the agreement. The Swedish government still maintained two years later, in an apparent reference to Aylwin’s 1993 visit, that ‘before taking their decision to provide funding for Pangue, the development cooperation authorities in Sweden (BITS) and Norway (NORAD) obtained confirmation from the Chilean government that further harnessing of the river was out of the question’ (Sida 1995c). In the meantime, in accordance with Norwegian procedures, a number of outside opinions were solicited on ENDESA’s environmental study. While BITS had hired Sweco to do the review, NORAD asked for comments from two government agencies, the Norwegian Water Resources and Energy Administration (NVE) and the Directorate for Nature Management (DN), as well as an anthropologist. Like Johansson and Schmidt, NVE had numerous criticisms of the quality of the study, and of the project itself. In its first report, which came out in May 1994, the agency acknowledged that Ralco was the best known of the other planned dams on the river. NVE pointed out that if Pangue was to operate on its own, the two 250-megawatt Francis turbines were too big. The authority proposed instead two or three different-sized turbines that could take advantage

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of the variation in flow between winter and summer. Nevertheless, water should be released during dry months ‘to prevent serious negative environmental impacts downstream’. Normally more reserved in its criticism of NORADfunded dams, NVE concluded: the plans and documents available to us have been scant and of poor or varying quality. The maps in particular have been nonexistent or substandard. This creates ambiguity which adds to the lack of data and recommendations on [mitigatory] measures. (NVE 1994a:11) However, NVE’s conclusion differed from that of Sweco. Where the Swedish consultants had given the green light, the Norwegians were more cautious: We cannot, therefore, recommend support to the project on the basis of the present level of documentation, with regard both to its impact and operation. In addition, we have doubts about the considerations given to the needs of the local population. (NVE 1994a:11) NVE’s opposition to the project was undoubtedly due in part to even harsher criticism from the Directorate for Nature Management. The Directorate expressed concerns about apparent violations of World Bank procedures by the IFC, an issue that neither NVE nor Sweco had mentioned. The agency noted that the Norwegian Ministry of Environment, NORAD and NVE had recommended in 1992 that the Nordic Executive Director (ED) at the IFC be instructed to require a cumulative impact study before approval, since construction of a series of dams seemed likely. But the Norwegian Ministry of Foreign Affairs overruled the recommendation, and the Nordic ED in Washington had voted in favour of Pangue in December 1992. In its report, the Directorate provided a long list of the project’s shortcomings: environmental regulations violated by the IFC; lack of clarity on the status of Ralco and the other dams; a lack of baseline data; no assurances on a minimum flow of water from the dam to avoid drying out the riverbed; and continuous strong opposition from local people. The Directorate concluded that the political justification for the project was questionable. Furthermore, it noted, Chile is a country that is not a traditional cooperation partner for NORAD, that very marginally meets any of NORAD’s main goals for developmental aid, that can in no way be considered as a member of the ‘least developed countries’ …[the project] very marginally can be argued to have a development effect on the poorest groups. (Directorate for Nature Management 1994:12)

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Given such heavy criticism, it was hard to imagine on what grounds NORAD could possibly give approval for Pangue. The agency’s Deputy Director General, Sven Holmsen, admitted at the time that ‘we usually follow the recommendations of the competent authorities. For me personally, this now appears to be a dubious project. The final decision will be taken shortly’ (Development Today 12 (1994)). This would not happen for several months, however. And the resourcefulness of the pro-dam lobby was not to be underestimated. The political pressure in favour of a positive decision was evidently so great that NORAD told NVE to do its work again and this time, in effect, to come up with the ‘right’ answer. NVE did not visit the project site, however, or even Santiago. Rather, on 3 June, 23 days after the completion of its first review, NVE was off to the IFC headquarters in Washington, D.C. to collect further information. Its second set of conclusions, issued on 21 June, were noticeably less critical. On [the] basis of the information received it is clear that the project has been greatly improved from a socio-economic and environmental standpoint due to the involvement of the IFC…. NVE’s statement in the previous report that the IFC/World Bank rules had not been followed was due to the fact that certain key documents had not been made available to us. An apology is therefore due to the IFC. (NVE 1994b:6) Notwithstanding the grovelling tone of this second report, the Norwegian authority did note that in the present situation, with lack of concrete information on downstream impacts, NVE has recommended a set of rules to safeguard downstream environment…. Since the rules [on the rate of flow downstream of the dam] have not yet been determined we recommend that they are settled …before a commitment from NORAD to support the project is made. (NVE 1994b:6) The rules on release of water from the dam never were determined. By this time, though, Pangue had become such a hot potato that it could no longer be handled at the administrative level. Media focus and NGO pressure from Chile and Norway had turned it into a political question that demanded the attention of the minister. Needless to say, all the environmental concerns were put aside. In any case, as Dick Johansson of Sweco had pointed out in his report for BITS a year earlier, the dam was already under construction. The minister, Nordheim-Larsen, approved Norwegian support to Pangue on 30 August, 1994.

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HOW TO GET AROUND OECD REGULATIONS In order to ensure that Nordic aid money subsidized a Nordic contractor, numerous environmental concerns had to be overlooked, as had the knowledge of further plans to build Ralco, and this second dam’s associated impacts. But funding of the Pangue project was blocked by another obstacle—OECD rules— that only the most creative bureaucratic manipulation could get around. In 1991, the OECD countries had agreed on new regulations governing aid finance for export contracts. As a general rule, aid finance of commercially viable projects would no longer be allowed, according to the new regulations that came into effect as of February 1992. These rules are referred to in the aid industry as the ‘Helsinki Package’. The problem was that Pangue had been categorized as commercially viable, that is, a project that did not require subsidies from aid agencies in order to be financed. Commercial banks and other private financiers could be expected to lend money for construction of the dam, and Pangue SA, the borrower, could be expected to pay them back. With backing from the Nordic aid agencies, Kvaerner stood a chance of winning the contract with a lower bid than its unsubsidized competitors. Without it, the company had no guarantee. The question then was: how to get around the OECD rules? The answer: slip in before the deadline. BITS, determined to subsidize the Kvaerner bid, evaded the new regulations by making a ‘notification’ of the Pangue project to the OECD one month before the February 1992 cut-off date. This notification indicated an ‘intention to consider’ the project for aid finance according to pre-Helsinki Package rules. Another OECD member, Spain, had registered a notification for Pangue as early as 1990, thus similarly exempting itself from the Helsinki rules. Swedish private-sector interest in Pangue goes back as early as 1989. Three companies, ABB Generation, Kvaerner Turbin and Skanska, each vying for contracts in the project, began to approach BITS for possible concessional loans to secure a favourable financial package. The firms ultimately shortlisted by Pangue SA for equipment-supply contracts for the dam included: Cegelec/ Alsthom of France, Babcock Wilcox of Spain, Ansaldo of Italy, a Swiss— Swedish group consisting of Sulzer, Escher Wyss and ABB, and a Norwegian— Swedish— Canadian—German group consisting of Kvaerner, GE Canada and AEG. By late 1992, though, the prospect of aid funds being used to subsidize bids for contracts on Pangue was causing some consternation. On December 23, Canada’s Export Development Corporation sent an angry message to the OECD stating in no uncertain terms that aid money should not be involved in the financing of the Chilean dam, and urged Spain to withdraw. The telex noted that the hydro-electric project was a private-sector initiative with no public-sector ownership or financial guarantees, and that it was clearly considered to be a commercially viable project.

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In the light of the above…we consider the use of concessional credits for this project to be inappropriate. As the Spanish concessional funds are to be a’governmental’ credit, we also question how concessional financing would be implemented as the project tender documents clearly state that government guarantees will not be available. We request that Spain reconsider its position to provide concessional credits for this project. (Export Development Corporation, Telex, 23 December, 1992) Curiously, in its message the Canadian agency did not target Sweden, though Canadian firms were at the time bidding on the equipment-supply contract for Pangue with Kvaerner. Three months later, the Swedish Foreign Ministry appears to have had second thoughts about giving aid money to Pangue. One can speculate about whether this change of heart was prompted by the Canadian message, or perhaps by a pang of conscience. In a 2 March telex to OECD member states, signed by Eva Walder-Brundin of the Ministry’s Trade Department, Sweden proposed that Pangue be accepted as a ‘no aid common line’ project. In the language of the OECD, ‘no aid common line’ refers to a project accepted by all members as being ineligible for aid. This acceptance would not be legally binding, but would —as with all OECD consensus positions—have had a moral force among the members. In a flurry of messages forwarded electronically to the OECD, several countries, including Ireland, Portugal, Japan, the Netherlands, France, Finland and Italy, immediately accepted Sweden’s proposal. This indicated that they were willing to regard Pangue as a commercially viable project to be financed on market terms. Spain was the only one to refuse, offering the following reason: ‘Our authorities inform us that there is no point proposing a no aid common line for this project [since it has already been notified].' In other words, Spain was unwilling to reverse its position. As a result of Spain’s rejection, the Swedish proposal was dropped and Pangue became eligible for aid finance once again. Had Sweden kept to the no aid position, Kvaerner would presumably not have been able to compete against the subsidized Spanish bid. As it turned out, the Spanish firm Babcock Wilcox lost out to Kvaerner, GE Canada and AEG in the final bid, and there was no Spanish government funding of Pangue. The bill for Spanish stubbornness ended up on the Swedish and Norwegian aid budgets. Mats Ringborg, in charge of export promotion and export finance to developing and East European countries at the Swedish Ministry of Foreign Affairs, explained Sweden’s doubts about Pangue’s eligibility for aid funds: [The Ministry] had some doubts about whether it was advisable to go ahead with the project. We thought that the company could perhaps finance it on commercial terms…. And we doubted if this was a suitable way to use our limited resources for concessional financing. (Development Today 19 (1994))

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But he also said that Sweden’s notification of interest in Pangue to the OECDin January 1992 had amounted to something of a ‘moral commitment’. ‘Thesimple fact that the project had been notified [before the Helsinki Package cameinto force] showed that the matter had gone quite far’ (Development Today 19(1994)). Indeed, within three weeks of Spain’s 10 March refusal to accept Pangue as a no aid project, BITS announced its conditional approval of the project. ‘We wanted to see if the OECD would take a common line position’, but following Spain’s rejection, ‘we felt perfectly free to go ahead with concessional loans’, Ringborg said. Had OECD members accepted the Swedish proposal, Sweden would have had to ‘go back on this moral commitment. But we proposed the no aid common line, so we would have had to follow it, and BITS would not have granted the financing’, he added. The BITS decision on Pangue was made public on 1 April, 1993. BITS financing of the Swedish Kvaerner Turbin contract totalled US $32 million in loans, of which 36.02 per cent, or about US $ 11 million, comprised the grant element—the gift from Swedish tax-payers to Kvaerner and ENDESA. As for NORAD’s funding of Pangue—an additional US $5.3 million for the turbines and US $3 million to the Norwegian consultancy firm Norconsult for a design contract—Norway was not directly involved in the OECD bargaining over financial deals. Rather, Norway ‘piggy-backed’ on Sweden’s notification to circumvent OECD rules, treating its contribution as part of the Swedish financial package, on the grounds that Kvaerner is a Nordic multinational. According to Cato Haugland of NORAD’s Industrial Development Department, the Kvaerner contract was covered by the Swedish arrangements with the OECD. Therefore, it was not necessary for NORAD to make a separate notification. There was one remaining hurdle, however. Norconsult’s portion could not be attached to the turbines contract, and NORAD had to notify the OECD of its intention to finance this. Strictly speaking, the Helsinki rules forbade the use of aid funds for any part of a commercially viable project. But since it was notified as a ‘single contract’, Norconsult benefited from a loophole in the Helsinki Package rules. Contracts worth less than ‘2 million OECD Special Drawing Rights’ or about NOK 19 million are exempted from the agreement, even in the case of a commercially viable project. The value of the Norconsult contract in Norwegian crowns was NOK 18.5 million (Development Today 19 (1994)). MANAGING THE FALLOUT The Swedish and Norwegian aid authorities handled the criticism of their support for Pangue in noticeably different ways. Initially, the Norwegian government seemed more open to dissenting views, and during 1994 appeared to be on the point of rejecting the project altogether. But once the decision had been finalized, NORAD consolidated its hard line on dams in the Third World in general, and on Chile’s hydro development in particular. In Sweden, on the other hand, the lack of general public debate about the project made BITS approval a fait accompli by April 1993. Yet because of a restructuring of the Swedish aid

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bureaucracy, the new agency was, three years on, still unsure about whether to be tough or conciliatory in the aftermath of Pangue. In August 1995, NGOs and concerned individuals in Chile, Norway and Sweden wrote a letter to the Nordic governments demanding that they take ‘retroactive responsibility’ for Pangue, in the light of ENDESA’s confirmation about plans to go ahead with the second dam, Ralco. In the letter, the groups called on the aid agencies to arrange a public hearing to which all interested parties would be invited. They stated: NORAD and BITS used the assurance that Pangue was a ‘stand-alone’ project to circumvent existing principles that require cumulative environmental impact studies for all planned hydro projects in a river basin. The failure to require such a study is highly irresponsible as Ralco’s reservoir is seven times larger than Pangue’s, with massive social and ecological impacts. (Letter to Nordic donors, August 1995) They called for a halt in the delivery of the two Francis turbines (which were being assembled in the Kvaerner workshop in Oslo at the time), pending a guarantee from ENDESA that Ralco would not be built, or the completion of a cumulative environmental impact assessment for all the planned dams along the river. The letter was signed by the Action Group for the Biobío (GABB) in Santiago, the Swedish Society for Nature Conservation (SNF) in Stockholm and the Association for International Water and Forest Studies (FIVAS) in Oslo, with some 40 co-signatures from the three countries. In addition to the indigenous, human rights, environment, political youth and solidarity groups that supported the demand, a most notable supporter was Fabiola Letelier, human rights lawyer and sister of the assassinated Chilean exile leader Orlando Letelier. Her support for the Biobío campaign over the years, and especially for this call for Nordic ‘retroactive responsibility’, underlined the political character of the dam project, and the radical shift in the Nordic governments’ attitude towards Chile. Letelier, already a symbol of Chile’s democratic struggle, had become something of a national heroine after 30 May, 1995. This date marked the first convictions of Pinochet officials, hitherto unthinkable because of a 1978 amnesty that had granted pardon for atrocities committed by the security forces after the coup. For years Fabiola, herself head of the human rights organization Committee for the Defence of People’s Rights (CODEPU), had worked relentlessly on her brother’s case in an effort to bring those responsible to justice. The Supreme Court’s milestone ruling announced prison sentences for two military leaders—General Manuel Contreras, former head of the Chilean security apparatus, the DINA, and his deputy Colonel Pedro Espinoza—for the murder that had taken place two decades before. Orlando Letelier, who had served as Defence Minister under Allende, was assassinated by a car-bomb in front of the Chilean Embassy in Washington on 21

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September, 1976. Letelier had been lobbying the multilateral lending agencies in Washington to suspend loans to Chile, and had already campaigned successfully in the Netherlands for the cancellation of a US $62.5 million mining investment in Chile by a Dutch firm. Because of the alleged CIA involvement in the killing, and unabated human rights abuses within Chile, the Letelier case received a high international profile over the years. Sweden was among the countries that lobbied actively for the guilty parties to be brought to trial. But in August 1995, Sida was clearly at a loss as to how to respond to this protest letter concerning the Chilean dam. Only a month before it was sent, the agency had undergone a complete restructuring, the policy implications of which were far from resolved. Four different parts of the Swedish aid administration— including SIDA and BITS—had been amalgamated into one organization under the ‘new’ name Sida (with small letters). Trapped between a rock and a hard place, the new leadership was initially caught off guard. Recall that in 1993 the Aid Minister, Alf Svensson, had seen Pangue as a first example of the renewed relationship between the two countries, calling it ‘development cooperation in the area of environment and research’. Yet here Sida was being criticized precisely on environmental grounds, and being asked by the critics of Pangue to take responsibility for a project that had been handled by BITS. On the one hand, the agency did not want to begin its term by pointing the finger at its own colleagues. On the other, many of the critics’ concerns were shared by the old SIDA staff who had been uncomfortable about BITS’ approach to development, and were now nervous about how the new organization might change for the worse. Sida’s confusion was reflected in its various responses to the protest letter. At first, the agency issued a press release acknowledging the environmentalists’ concern about more dams on the river and offering to study the impacts of Ralco: ‘Sida is offering to provide Nordic environmental expertise for an environmental impact assessment of a proposed hydro project in Chile…[which] concerns the further harnessing of the Biobío’ (Sida 1995c). The statement made no mention of a public hearing on the Biobío, and insisted again that BITS had known nothing about Ralco at the time of the Pangue decision. Lars Ekengren had just taken up his new position as head of Infrastructure and Economic Cooperation (the department that had absorbed many of BITS’ functions), and confirmed that this offer was a response to the NGOs’ concerns (Lars Ekengren, Interview, 12 December, 1995). More than a month later, Sida wrote directly to SNE But by now the ‘offer’ to study the impacts of Ralco had disappeared, and been transmogrified into a ‘response’ to a ‘request’ from CONAMA, the Chilean environmental authority, for the ‘transfer of know-how’ on environmental questions (Sida 1995a). In October 1995 Sida, along with the Swedish Environmental Protection Agency (SEPA), even sent a mission to Chile to meet CONAMA and discuss possible cooperation. But as far as Ebbe Kvist, who represented SEPA, knew, the trip had nothing to do with the Biobío, Pangue or Ralco. According to him, their mission was a standard response to a recipient country’s request for assistance. Sida’s letter to SNF again did not mention the demand for a public hearing on

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Biobío, but noted that it was in the process of studying the environmental consequences of various energy projects, and would hold public hearings on this issue in early 1996. As the correspondence between Sida and SNF continued, the agency’s position solidified. By December, Sida was ‘maintaining a dialogue’ with CONAMA about possible support in the field of environmental impact assessments. As regards the Biobío any future hydro-power development in the Biobío are in the hands of the Chilean authorities and outside the control of Sida. For this reason we consider that a public hearing…should better be organized in Chile by the competent Chilean authorities. (Sida 1995b) As for the NGOs’ demands for a ‘guarantee’ from ENDESA not to build Ralco, the agency wrote cryptically: ‘Guarantees of the kind you refer to can, however, not be expected, especially given the fact that studies on the impact of further developments are not yet concluded’ (my italic). In a final bizarre twist, in mid-1996, Sida’s energy officer Per Persson responded to a personal request by SNF’s Gudrun Hubendick by providing almost US $30,000 to GABB to hire commercial consultants of their choice to review ENDESA’s environmental impact assessment for Ralco. NORAD, meanwhile, handled the Biobío matter quite differently. Initially, as noted earlier, the agency had hesitated to provide Kvaerner with finance for the Pangue turbines because of the unresolved environmental questions, prompting the company to go to BITS (Development Today 21 (1993)). In 1992 and 1993, the Norwegian advocacy group the Association for International Water and Forest Studies (FIVAS), worked actively on the Biobío case in Norway, GABB was in the process of suing ENDESA for illegal use of the river water, and the Norwegian press was following the issue closely. Norway and Sweden had, of course, already supported the project in December 1992 when the Nordic Executive Director to the International Finance Corporation had approved the multilateral funding. But for more than a year, the Norwegian aid administration agonized over the decision to co-finance Pangue with bilateral support. In January 1994 NORAD indicated that a decision would be taken in a few weeks. Then in May the Oslo daily Aftenposten reported that the decision was to come ‘shortly. Then NORAD’s own in-house magazine Innsyn predicted a resolution of the suspense by early July. While the tug-of-war over Pangue between the Norwegian pro-dam lobby and environmentalists raged, NORAD, under the leadership of Director General Per Grimstad, threw its weight behind dam building with a major international conference planned for September 1994 on ‘Hydro Power and Environment’. This was the first conference of its kind for the agency, and served to underscore the importance that it accorded the issue. It was accompanied by an unprecedented 16-page newspaper supplement in Norwegian and English; the

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first article, by Grimstad, articulated the agency’s main concern: ‘What right do we have to apply our criteria for the construction of hydroelectric installations to other countries?…Can we demand that countries [in the South] should measure up to Norwegian environmental requirements in the year 1994?' (Grimstad 1994: 2). The thinly veiled message was that standards could, or should, be lowered for dams being built in poor countries with Nordic aid finance. This was further stressed by the Ambassador to Chile, Reiulf Steen, who, in comments to the press and in his keynote speech to the conference, called Norwegian environmentalists criticizing dams in the Third World ‘ecoimperialists’ (Innsyn: 15 and Reiulf Steen, Interview, 12 September, 1994). NORAD seemed to characterize the controversy over hydro projects as emanating from Norway’s unrealistic expectations of Southern governments, especially on environmental matters. What was needed was more dialogue between the two. In order to facilitate this ‘listening to the South’, as Grimstad’s article was entitled, decision-makers from several countries where NORAD has funded hydro projects were invited to the conference. These included government representatives from Laos, Tanzania, China—the chief engineer of the Three Gorges dam project among them—Nepal and Chile. Missing from the list of those invited to the conference, and from NORAD’s conceptualization of the issue, were representatives from civil society in those same Southern countries. While Steen accused Norwegian critics like FIVAS of imposing the standards of the rich world on people who could not afford the luxury of a healthy environment, the fierce debates over dams within Chile and other Southern countries were overlooked completely. The only Third World NGO working on dams that was invited by NORAD was the Bangkok-based Terra (Towards Ecological Recovery and Regional Alliance), which monitors resource questions in the Mekong river region. But Terra refused the invitation on the grounds that as the token Southern critic, its presence would merely be used to legitimize the conference. It is likely that the conference played some part in pushing the Aid Minister, Kari Nordheim-Larsen, to make a final decision on Pangue. Avoiding a loss of face for the organizers, she ended a year of suspense and announced her support for the project in August, just days before the conference opened. The conference was seen to be so successful by the Chilean delegates that they were inspired to organize a similar event in Santiago a few months later. The only foreign participants in the second gathering, which took place in December in Santiago, were familiar names from the Nordic region: NORAD, the Norwegian Water Resources and Energy Administration (NVE), Norconsult, the Directorate for Nature Management (DN), Vattenfall and Swedpower, with support from BITS. GABB was invited to give a brief presentation, but also boycotted it on similar grounds to Terra’s. NORAD and the Norwegian Aid Ministry ignored the August 1995 Biobío protest letter completely. Free of the existential crisis that had gripped the newly reorganized Swedish aid administration, the Norwegian position on ‘hydro and environment’ had been made clear.

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WINNERS AND LOSERS On the Nordic side, there were winners and losers in the Biobío debate. The big winner was clearly the Norwegian multinational Kvaerner Energy, which has held the largest single market share for turbine deliveries to hydro-power dams in the world over the past decade. Among the definite losers are Nordic tax-payers, who have subsidized a powerful private firm to build the first in a series of dams that are unlikely to aid the poor and are certain to damage the environment. In Chile, of course, the stakes on both sides are much higher. EDITOR’S NOTE The Biobío story took an unexpected turn in early 1997 when IFC and Norway withdrew from the Pangue project. GABB had filed a grievance against the IFC before the World Bank Inspection Panel in 1995, charging the IFC with violation of its own environmental and social regulations in the Pangue project. The grievance was rejected on the grounds that the Panel’s mandate did not cover IFC. However, the new World Bank President James Wolfensohn wrote to GABB promising to look into the matter. Wolfensohn, who is also president of IFC, commissioned two studies of the Pangue project, one on anthropological aspects and the other on technical aspects. On 6 February 1997, Wolfensohn wrote to the Chilean government threatening to declare ENDESA in default of the IFC loan. ENDESA ‘appears to have taken a less than constructive approach to its environmental and social obligations in particular with regard to the preparation of a satisfactory cumulative impact assessment’, he wrote. This letter produced a domino effect. The following month, ENDESA prepaid the US $150 million loan to IFC, thus ridding itself of the aid conditionality, and re-financed the project with the commercial German Dresdner Bank on cheaper terms. IFC’s withdrawal from the project revealed subtle differences in the Norwegian and Swedish agreements with Pangue SA. Because of intense public debate in Norway, the Norwegian agreement had included a ‘reservation’ clause, stating that IFC’s presence was a pre-condition. When news of ENDESA’s prepayment to IFC reached Oslo, there ensued a struggle between Aid Minister Nordheim-Larsen and the Trade Minister, Crete Knudsen, who, coincidentally, was about to board a plane for Chile for the first stop on a trade tour of Latin America. Kvaerner Energy’s Per Berg, who confirmed his company’s intention to bid for the Ralco turbines, was among that delegation and Chilean hydro development was to be discussed in Santiago. Knudsen reportedly did what she could to prevent cancellation of the Pangue loan, but she only succeeded in postponing the decision. In May, the Norwegian government announced its withdrawal from the project. Sweden, meanwhile, had no such reservation about IFC in its agreement, therefore there were no obvious legal grounds for cancelling its loan agreement. But ENDESA evidently caused considerable annoyance in Sweden by failing to inform Sida of its prepayment to IFC. In March, Sida drafted an angry letter to

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Pangue SA/ENDESA, demanding an independent appraisal of the situation and consultations with the firms, and reserving the right to withdraw from the project if ENDESA’s actions had jeopardized the loan or security agreements. As of May, there was no reply from Chile. REFERENCES Andersson (1978) Ministry of Foreign Affairs new series. Documents on Swedish foreign policy 1976. I:C:26. Stockholm. BITS (1993) Press release, 1 April, Stockholm. Directorate for Nature Management (1994) ‘Chile: Biobío river, Pangue Hydro-power plant’, 12 April. Export Development Corporation (1992) Telex to the OECD, 23 December. Grimstad, Per (1994) ‘Listen to countries in the South’ Innsyn Special Edition. Hydropower and Environment: Differences in Policies and Priorities Conference, Oslo: Norwegian Agency for Development Cooperation, September. Horta, Korinna (1995) ‘The mountain kingdom’s white oil: the Lesotho Highlands Water Project’, The Ecologist (6): 227–31, November—December. International Finance Corporation (IFC) (1992) Press release, ‘IFC board approves Pangue Dam’, 17 December, Washington, D.C. Johansson, Dick and Schmidt, Carl Arne (1993) Independent Review of the ‘Downstream Impacts Associated with the Pangue Power Station’. Prepared for BITS, Stockholm: Sweco, September. Letter signed by Juan Pablo Orrego Silva of GABB (Action Group for the Biobío), Ulrika Rasmuson of SNF (Swedish Society for Nature Conservation) and Erik Høines of FIVAS (Association for International Water and Forest Studies) to the Swedish Aid Minister, the Director General of Sida, the Norwegian Aid Minister and the Director General of NORAD, Santiago, August 1995. NVE (Norwegian Water Resources and Energy Administration) (1994a) Memorandum: Appraisal of the Pangue project in Biobío river, Chile, Oslo, 11 May. (1994b) Memorandum: Appraisal of the Pangue project, Chile. Report No. 2, Oslo, 21 June. Palme, Olaf (1976) Ministry of Foreign Affairs new series. Documents on Swedish foreign policy 1973. I:C:23. Stockholm. Schori, Pierre (1994) The Impossible Neutrality—Southern Africa: Sweden’s Role under Olaf Palme, Cape Town: David Philip. Sida (1995a) Letter to Swedish Society for Nature Conservation, Stockholm, 22 September. (1995b) Letter to Swedish Society for Nature Conservation, Stockholm, 21 December. (1995c) Press release, ‘SIDA funding eco-study of dispute power project’, Stockholm, 18 August. Svensson, Alf (1994) Ministry of Foreign Affairs, new series. Documents on Swedish foreign policy 1993. Stockholm. Vattenfall (1988) Hydro Power in Sweden, Stockholm: The Swedish Power Association and the Swedish State Power Board, von Bennewitz Bastián, Rodolfo (1990) Recursos hidroeléctricos de la cuenca del Biobío, Santiago: ENDESA.

11 IN DEFENCE OF THE BIOBÍO RIVER Juan Pablo Orrego Silva

So talk to me, Biobío, yours are the words that roll off my tongue, you gave me language, the nocturnal song fused with rain and foliage. You, when no one would heed a child, told me about the dawning of the earth, the powerful peace of your kingdom, the hatchet buried with a quiver of lifeless arrows, all that the leaves of the cinnamon laurel have told you for a thousand years— and then I saw you embrace the sea, dividing into mouths and breasts, wide and flowering, murmuring a tale the color of blood. (Pablo Neruda, from A Lamp on Earth in Canto General) Surrounded by snow-capped volcanoes and mountains crowned with the marvellous Araucaria (or monkey-puzzle tree), and fed by thousands of tributaries large and small, the mainstream of the Biobío is a dazzling turquoise ribbon that courses 380 kilometres from the Cordillera to the Pacific Ocean. Anyone who has visited the Upper Biobío river will concede that the beauty of this valley defies ordinary description. It is this watershed, which constitutes one of Chile’s most important bioregions, that is today being torn to pieces for the production of hydro-electric power. Through our efforts to prevent the destruction of this national and global treasure, we have had both to articulate the values that are being lost and to understand the logic behind this kind of destruction: the corporate dogma and vision of development which presuppose that ecological devastation and unending cultural fragmentation are inevitable costs of progress.

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Map 5 The Biobío dams

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The campaign for the defence of the Biobío began in 1991 with a small group of professionals in Santiago—a lawyer, an anthropologist, an ethno-botanist, an ecologist, a journalist—who were stunned by the vast implications of plans to dam the river. We created the Action Group for the Biobío (GABB) to look into the project. Our attention was drawn not only by the effects on the area’s Pehuenche indigenous people, who had not even been informed that their valley was about to be disfigured; or merely by the ecological impacts on this magnificent watershed that shelters unusually high rates of biodiversity and acts as the lifeblood of a whole region. Even more alarming to us, in a country that had only just emerged from 17 years of brutal military dictatorship, was the fact that the dams on the Biobío were being built by ENDESA, the most powerful company in Chile, and the brainchild of the Pinochet regime. The Biobío became an issue of substantial public debate in Chile, the first environmental question to engage large sectors of society after the return to democracy. Chilean citizens took ENDESA to court, and thousands marched in the streets to protest against the plans. Perhaps Chileans took the issue so strongly to heart because the fate of the Biobío transcends the river. Through it, we are confronted with crucial issues about humanity’s development. About energy and environmental policies. About the transparency of government and private companies. About democracy, culture and the rights of indigenous people and other local and regional populations to resources, to wholesome forests and rivers. In spite of our efforts over the years, Pangue, the first dam on the Biobío river, is, as of mid-1996, almost complete. The second dam, Ralco, was underway by 1995, though we still harbour hopes that common sense will prevail and we shall be able to stop it. Given the financial and political power of ENDESA, it is perhaps not surprising that the plans—which include six dams in all—have gone as far as they have. More unexpected has been the acquiescence of Western donors who have put their full weight behind Pangue, thereby endorsing the predatory model of development that the project represents. This was particularly striking in the case of the Nordic governments, which provided bilateral finance for Pangue that paid for the turbines. We had come to view Sweden and Norway as friendly democracies that gave refuge to Chileans during the worst years of Pinochet’s repression. We saw them as countries with high human-rights and environmental standards which had actively supported the resistance to the dictatorship. It therefore remains hard to understand why these same governments were willing to subsidize ENDESA. The Biobío is ultimately an issue for Chile and Chileans. Because of the overseas aid, however, GABB and other Chilean environmentalists have worked internationally to try to block foreign support for the project. Since 1993 we have had numerous meetings with representatives of the Swedish and Norwegian governments to present our critique in an attempt to convince them to withdraw. Time after time, our criticisms were disqualified or ignored. An example of this was an almost surreal encounter with the Norwegian Ambassador to Chile, Reiulf Steen, in July 1994, which deserves the indulgence of a brief anecdote.

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At the embasssy in Santiago, after making us wait a surprisingly long time beyond the appointed hour, Mr Steen received us enthusiastically, smoking a large pipe, and told us that he did not speak Spanish. Consequently, the whole meeting had to be conducted in English. He offered full solidarity with our views, spoke of the Allende years with nostalgia, and even quoted some verses by Pablo Neruda. He then launched into a surprisingly strong critique of neoliberal economics in Chile and of the selfishness of the Chilean aristocracy. He commented caustically that members of the Chilean government were everywhere ‘begging’ for aid money and credits abroad, but that the lack of redistribution of income in Chile was shameful. We were amazed by this confluence of views, and left feeling sure that we had found an unexpected and powerful ally. It was quite a shock for us subsequently to learn that Reiulf Steen had been a staunch defender of the Pangue project for years, and that he speaks fluent Spanish (his wife is Chilean). Two months later he announced to participants at an international conference in Oslo that Pangue would ‘not threaten [the Pehuenche] culture in any way’, that Chilean environmentalists’ fears that other dams would be built on the river were unfounded, and that Norwegian opponents to the scheme risked being seen as ‘eco-imperialists’ (Innsyn 1994:15). LIFEBLOOD OF A REGION Construction of dams on the Biobío river will choke the artery that sustains life — diverse ecosystems, an embattled indigenous culture and concentrated urban and industrial activity downstream—in a key Chilean bioregion. Ecologically, the Upper Biobío valley is recognized as one of Chile’s richest natural areas because of its high rates of biodiversity and species endemism. With its source in the Andes and mouth at the Pacific Ocean, the river acts as an ecological corridor, connecting the Argentinian pampas to the Chilean coast. The upper part of the valley forms a habitat for 192 species of plants that have been registered to date, a number of them classified as vulnerable (Araucaria, Cordillera Cypres) and rare (Guindo Santo, Radal Enano, Lleuque, Tepa); 224 species of birds; 39 species of mammals; 14 reptiles; and 16 amphibians. Of these vertebrates, 25 have been classified as vulnerable, rare or in danger of extinction. In the upper reaches of the river there are 13 native species of fish, all endemic to Chile. Because of the rapid rate of ecosystem degradation in the southern part of the country, these are becoming extremely rare, and some, such as Diplomystes, survive almost exclusively in the Upper Biobío. Sadly, though, this ecological richness has been seen in exclusively monetary terms, and the region remains one of Chile’s most vulnerable, with only 2 per cent of its surface conserved under the national protected areas system. The newly elected government of Patricio Aylwin approved the Pangue Dam project in May 1990. Had ENDESA financed Pangue on its own, perhaps no environmental study would have been done at all. But the company turned for funding to the International Finance Corporation (IFC) of the World Bank, which

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made this a condition of the loan. The environmental impact report financed by ENDESA was presented to the public in February 1992, almost two years after project approval. It concluded, not surprisingly, that the overall impacts would be minimal and that construction of Pangue should proceed (Pangue SA et al. 1992). But GABB’s analysis showed that the study had failed to deal adequately with numerous issues, serving only to justify the project (Orrego and Bragg 1992, Aylwin and Valenzuela 1992). The ENDESA environmental study was full of contradictions. The fish portion of the study, for example, admitted that ‘the great majority of the fish species of the Biobío system are endemic to Chile, of low economic interest and high scientific value because of their phylogeny. Today, most of the Chilean continental ichthycological fauna present conservation problems; there are 18 species considered in danger of extinction, that is to say 50% of the native species that exist’ (Pangue SA et al. 1992:75). The study recognized that there is virtually no information about endemic species that inhabit the Biobío, their life cycles, migration patterns, and so on. It also stated that these species will not survive in the dam (Pangue SA et al. 1992:77–9). Yet the final conclusion of the environmental impact study was that the project was considered ‘excellent’, in spite of the possible extinction of endemic fish species. Commenting on ENDESA’s fish study, one independent researcher noted The main basins from North and Central Chile, e.g., from Elqui to Maule rivers, are a clear demonstration of the abuse of different industries. These rivers are almost ‘dead’; aquatic life has disappeared from most of the rivers; not only from the main course, but also from the tributaries. It is sad to see this kind of report because it shows how little the ‘experts’ know about the natural resources of their own country. It is not just that Chile has about 32 freshwater fish species: the ‘experts’ who wrote the report forgot that 95 per cent of the [ichthyic] fauna is endemic to Chile; that Chile has certain fish families (e.g., Nematogenydae and Perciliidae) that are only found in Chile. In addition they forgot that most of these species are endangered (see ‘Red Book of Chile’s Vertebrates’) and that many of them have completely disappeared from many basins. (Arratia 1992) One of the most devastating official critiques of ENDESA’s environmental review for Pangue was delivered by researchers of the Euro-Latin American Research in Environmental Sciences (EULA) Centre at the University of Concepción to the Chilean Parliament in August 1992, six months after the ENDESA environmental study was made public. EULA concluded that the report was inadequate in all respects. Moreover, ENDESA had not heeded the conclusions of two pre-feasibility studies that there was insufficient environmental information about the Biobío river and watershed to proceed with any hydro project in the near future (Universidad de Concepción 1987, 1989). EULA stressed the need for a holistic view of the ‘river continuum’, and

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recommended serious consideration of alternative developments that would take into account the whole Biobío basin. EULA researchers also warned that without careful provisions for minimum flow from the dam, the downstream impacts of Pangue could reach the Arauco Gulf, more than 100 kilometres from the plant. ENDESA kept the full report secret for almost two years. It was only through pressure from environmental groups in Chile, Norway and the United States that the study was made public, by which time the dam was under construction. In addition to the inadequate handling of the many impacts in and around the reservoir, the study that we finally saw failed to include an assessment of downstream impacts or a management plan for the release of water from the dam that would insure a minimum flow downstream. In the absence of such a plan, a still undetermined number of kilometres downstream from Ralco and Pangue could be dried out for three to four months during each dry season. To make matters much worse, the zero or minimum flow will be followed by huge daily water surges of 500 m3/s, equivalent to a high winter flow of the Biobío. By mid-1996, Pangue was 80 per cent complete. Yet it remained unclear how the plant would operate and what the ‘flow release management plan’ would be. While the upper 250-kilometre stretch of the river sustains an ecosystem that is still largely intact, the lower 100 kilometres supports the country’s most intensive concentration of production facilities. Thus in a description of the Biobío, the distinction between the upper and lower portions of the river is important. In fact, the Biobío region is considered to be Chile’s most important industrial pole, the only exception being the mining area in the North. The regions industries, clustered in the downstream part of the river, include iron and steel works, chemical and petrochemical factories, oil refining, pulp and paper mills, textiles and clothing, earthenware, cement, food products and shoes, wood processing and fish meal–30 per cent of the world’s production is Chilean. Not only does the river provide water for numerous industrial activities, but about one million people living in the downstream portion also depend on the Biobío for irrigation and drinking water. Meanwhile, the Arauco Gulf and San Vicente Bay, which are influenced both directly and indirectly by the outflowing of the Biobío into the Pacific, are an extremely productive area. At this latitude, the continental shelf is the largest in the whole Chilean coastline. The area’s high productivity has led to a profitable fishing industry, both local artisanal and industrial, based on a diversity of fish species, molluscs and algae. It is thus no exaggeration to say that the Biobío is the artery of the region. At the same time, however, the Lower Biobío acts as a receptor of horrendous amounts of urban and industrial liquid wastes and effluents, most of which are spilled into the river without any previous treatment: about 1 m3/s of sewage from 17 towns and 11.5 m3/s of industrial waste from 15 factories, 7 m3/s of which is not treated (Italian-Chilean Interuniversity Cooperation Project 1992). While the dams in the Upper Biobío are destroying a precious ecological heritage, the possible drying out of the river downstream from Pangue also threatens the well-being of numerous communities and diverse activities in the Lower Biobío. For these reasons, it is incomprehensible that the builders of

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Pangue failed to carry out a study of the downstream impacts of the dam, and that the foreign donors knowingly ignored this gross oversight. PANGUE, RALCO AND THE FATE OF THE PEHUENCHE The Upper Biobío is marked not only by its unique ecological values, but also by its importance for indigenous culture. In pre-Columbian times, the basin was part of the territory seasonally inhabited by the Pehuenche people when they were nomadic hunter-gatherers and had access to a considerably larger territory than today. The Pehuenche are a sub-group of the Mapuche, Chile’s southern indigenous people. They take their name from the Araucaria tree, whose fruit, which they call pehuen, they harvest to this day. After the arrival of the Spaniards, all the Mapuche, including the Pehuenche, were pushed south of the Biobío. The river became a frontier that was more or less respected by both the indigenous people and the Europeans. It was the army of the young Chilean republic in the 1880s and 1890s that conquered and ‘reduced’ the Mapuche— reservations in Chile were called ‘reductions’. After the military occupation of the southern territory, a series of assimilationist laws resulted in further loss of land and rights for Chile’s indigenous people. This process culminated during Pinochet’s authoritarian regime in two decrees whose purpose was the disintegration of the last indigenous communities still surviving in the south of Chile. Throughout the last century the Pehuenche were gradually pushed higher and higher up in the Biobío valley. Today, some 10,000 Pehuenche of seven communities live scattered over this rugged territory in a context of impoverished and deforested lands, practising a subsistence economy, still based on the harvest of the piñón nut of the Araucaria tree and marginal agriculture including small-scale poultry and cattle raising. They speak their own language, Mapudungun, hold traditional communal ceremonies, and, to a certain extent, still maintain a traditional social structure. Until early 1992 the Pehuenche had no organization that could represent the communities as a whole before government authorities. Neither did they have experience in dealing and negotiating on equal terms with the dominant Chilean society and with companies which, over the last decades, have been extracting natural resources from the Biobío watershed at an alarming rate. In October 1993, towards the end of President Aylwin’s term, the first indigenous law in Chile’s history was promulgated. However, to date this legislation has not been fully implemented and has never been tested in court against other laws, for example, the electricity concession laws promulgated in 1982 during Pinochet’s regime that have so far ruled supreme over all other property rights and laws. Pangue forced the resettlement of 53 peasant farmers who had no legal title to the land where they were living. Ralco would flood the lands of approximately 600 Pehuenche from two communities, Quepuca-Ralco and Ralco-Lepoy, all of whom have legal title. The indigenous law forbids the sale and expropriation of

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indigenous lands, permitting only that such land be traded. Strictly speaking, if only one Pehuenche family refused to be relocated onto other land that ENDESA is offering, no one could force them to leave and Ralco could not be built. This has been recognized even by ENDESA’s José Yuraszeck. As a result, the Pehuenche are under relentless pressure, not only from ENDESA but even from the government agency CONADI (National Corporation of Indigenous Development) to ‘negotiate’ with the developers. What will the implications of Pangue and Ralco (if it is built) be for the Pehuenche communities in the Upper Biobío? It is perhaps inappropriate for a non-Pehuenche to articulate what these projects will mean for the culture and the land. But I will try, as we have lived so close to this painful process for the past five years while trying to stop the building of Pangue. We have sat through countless internal and public meetings in the valley, and in the Chilean Parliament, pleading the case beside Pehuenche leaders before MPs and senators. We were together at La Moneda, the presidential house, when the President at the time, Patricio Aylwin, promised to monitor closely the Pangue project and its consequences, and assured us that no more dams would be built in the Upper Biobío in the near future. We have been together in Washington lobbying World Bank and IFC officials. And we have travelled by bus from Chile to Brazil to attend the Earth Summit in Rio de Janeiro. What, then, are the impacts of dams on the indigenous people of the Biobío valley? They are the last phase of the conquest; literally, the definitive invasion of Pehuenche ancestral territory—and I have heard the Pehuenche chiefs speak of it in that way. Giant trucks, bulldozers, thousands of workers labouring around the clock, night turned to day with powerful flood lights, the noise, the fumes, the dust. The dam that grows and grows, steadily blocking the river… the systematic razing of vegetation in preparation for the flood leaves a scene of desolation, like the ghost of the reservoir. As construction of Pangue enters its final phase, local people begin to realize what a large dam really is. And they have not seen the waters rising yet. Like remote indigenous communities the world over who have had their lands inundated by hydro dams, the Pehuenche of course had no way of knowing before. Five years ago when, maps and drawings in hand, we started trying to explain to them what was looming ahead, we were mostly met with blank, incredulous stares. It sounded absurd—almost mythical, like a feat of gods—the creation of a lake where once there was a free-flowing river. For the Pehuenche, the Upper Biobío is today a territory occupied by a strange and powerful enemy that has the support of the government and its allies in many other countries. Strange foreign names flash by from the sides of spanking new four-wheel-drive pick-up trucks: ABB, Kvaerner, Dragados, Copan. As ENDESA accelerates its activities for the construction of Ralco, new markings are everywhere, coloured flags, the frantic movement of vehicles and people. Cement posts to support a power line have suddenly appeared, pointing in the direction of the Ralco dam site.

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And everything described here is physical. Perhaps worse is the cultural and psychological invasion. The rumours, the veiled threats, the offers and counteroffers. The continual visits from experts in the natural and social sciences, as well paid as they are predisposed to the dam-building business, giving speeches to the Pehuenche about progress and development while dutifully preparing the environmental study for Ralco. An anthropologist working for the IFC, supposedly evaluating ENDESA’s ‘social polices’ towards the Pehuenche, offering little disposable Kodak cameras in exchange for information. The temptations. ENDESA going from household to household offering the modern equivalent of glass beads: mattresses, barbed wire, zinc roofing, wood stoves, rubber boots. Offering new and ‘better’ lands somewhere else, as if land were interchangeable, neutral landscape with no cultural identity. The inducements dividing the community, slowly corroding its cohesion. And when the future looks so grim it is difficult not to be enticed by immediate ‘goods’. Government officials from the National Environment Commission, the National Commission of Indigenous Development, Members of Parliament, people working in different NCOS—each of us appearing and disappearing, leaving behind confusing, often contradictory information, offers and projects. The last Indian massacre in Chilean history took place in the Upper Biobío in 1932, following a desperate Pehuenche uprising in the Ranquil area of the valley. Some of the older lonkos (community leaders) still remember it. With the building of ENDESA’s hydro-electric plants, the Upper Biobío confronts a threat that rivals Ranquil, and it is questionable this time whether the Pehuenche will survive as a culture. They are a people highly skilled at resisting, hiding, adapting and negotiating through history’s cruel and unpredictable events. But this time they face helicopters, bulldozers and a wall of cement that blocks their mighty river. ON ENVIRONMENTAL AID When the Swedish Aid Minister Alf Svensson approved support for the Pangue Dam, he described the project as being an example of ‘cooperation in the area of environment’. He said that Sweden’s main concern here was ‘to minimize the adverse effects on the indigenous population and the environment’. The statement is baffling. The dam has irreversibly degraded Chile’s most magnificent river and richest ecosystem, and paved the way for further dams. Pangue was a decades-old project, planned without any environmental considerations whatsoever, which ENDESA refused to reconsider or redesign in view of increased knowledge about the severe impacts of large dams. The IFC’s involvement did force the company to go through the motions of carrying out an environmental study. But, as the previous discussion indicates, this dealt inadequately with several key issues. As for the Nordic bilateral financiers, their input appears to have contributed nothing to the strengthening of environmental aspects of the project. On the contrary, Svensson’s characterization of Pangue evokes a distorted picture of the environmental situation in the country today.

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Chile put its first environmental legislation in place after the end of the dictatorship, and created a corresponding institution, the National Environment Commission, or CONAMA. Though the norms and rules needed to implement the legislation have not been formalized, for the first time in our history, companies will have to carry out environmental impact assessments (EIAs) for industrial projects of a certain size. The weakness of the system is illustrated, however, by a strange situation that emerged as the new environmental law was about to be promulgated. While large companies like ENDESA pressured the government to speed up the process, environmental groups lobbied to delay the passing of the law. The final drafts made it as clear to NGOs as it was to the private sector who would benefit from the law, given Chile’s current economic and institutional context. The EIA system itself has been designed as a spiral process, based on the theory of social compensation and ecological mitigation, which ends inevitably with the approval of the project. The assumption is that impacts of large industrial projects like dams can always be compensated. Consequently, the law offers no opportunity to stop a potentially damaging project. Projects are decided politically, by forces which share a vision of development that seeks accelerated economic growth at any cost. In this vision there is no option not to build for ecological or social reasons. According to this logic, large industrial projects are the engines of progress, and environmental impacts become unavoidable and insignificant in comparison with the benefits to be enjoyed by the nation as a whole. The government projects the image of a stern and wise father who knows with utter certainty where the common good lies. The interests of local, peasant, indigenous, and even regional populations, much less environmentalists, have to be painfully but necessarily sacrificed. Another problem with Chile’s current EIA system is that these environmental studies have in fact become one of the companies’ best legitimizing and marketing tools. The way Pangue was ‘sold’ by Mr Svensson to Swedish taxpayers provides one clear example of this. Furthermore, we have observed the same incestuous relationship among consultancy firms and industry that exists in the Nordic region, which helps to ensure positive results from EIAs. Even the US Embassy in Chile has commented on the dangers of what it calls this ‘crosspollination’. A leaked memo notes: It gives one group of industrialists, and particularly consultants, inordinate influence over environmental policy. Other industrial groups have expressed concern that Chile’s environmental regime is being turned into a ‘consultants’ playground’…it has damaged the credibility of the government on environmental matters. Not without reason, the environmental NGOs see CONAMA as hollow and insignificant and the government environmental effort as ‘bought and paid for’ by industry. Even some industrialists express concern that the current tight relationship between the government and industry will lead to an eventual backlash. (US Embassy 1995)

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In Chile today, key people wear a worrying number of different hats. In the area of government environmental decision-making, for example, one consulting firm —Gestión Ambiental (Environmental Management), owned by Ricardo Katz— has particularly strong influence. Katz is not only a key adviser to the government and a consultant to the Industrial Development Association (SOFOFA), but also works in his daytime job as head of the environmental unit of the right-wing think tank, SEPTEL. Also working for Gestión Ambiental, Jaime Undurraga is the Public Affairs Manager for CODELCO (the huge stateowned copper company), a consultant for SOFOFA, a consultant to the government on environmental policy and a government NAFTA negotiator. The shortcomings of existing environmental review procedures have a direct bearing on the fate of the Biobío river. Formerly, the many large hydro plants built in Chile were never assessed for their environmental impacts, but only for technical and economic viability. In spite of the new law, Pangue has followed this basic pattern. From the builders’ point of view—EIA or no EIA—there was never any option not to build Pangue and the second dam, Ralco. ENDESA’s failure either to study downstream impacts or to make public its plans for water release from the dam reflects the fundamental connection between the two. Pangue was designed from the beginning as a peak station. It has virtually no capacity to regulate the flow of the river since only 2.5 per cent of its total 175 million m3 is useful volume. This is why ENDESA needs to build the second dam upstream to regulate a constant flow into Pangue during the dry summer months. With Pangue under construction, one of the main environmental issues has thus been how the plant will be operated. All the donors have raised concern about the need to guarantee a minimum flow downstream. Norwegian authorities noted in 1994 that The operation has not yet been decided, and it seems clear that there is a conflict between environmental values and economic priorities regarding the future operation of the power station…peak power operation should therefore be avoided or limited. (NVE 1994:8) In violation of its own guidelines, the IFC accepted an environmental review that failed to clarify these issues. Both the Swedish and Norwegian donors paid lip service to the ‘downstream question’, but eventually released funds for equipment in the absence of any resolution. Without clear national environmental legislation or strong institutions to monitor plant operations in Chile, it will be very difficult to prevent the drying out of the Biobío river. THE RECIPIENT OF NORDIC AID The recipient of development aid from the IFC, NORAD and BITS was, in this case, ENDESA, the state utility that was privatized in 1989, the last year of Pinochet’s dictatorship. The history of the National Electricity Enterprise

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Company Limited, or ENDESA, is crucial for anyone who is serious about understanding the full implications of Nordic aid to Pangue. This firm is not only a key player in Chile, but is today among the most powerful in Latin America. Why ENDESA was deemed a suitable beneficiary of development assistance remains a question for the Nordic public to debate. The privatization of ENDESA is estimated to have cost the country one billion dollars, since it was undersold by the military government so that high-ranking figures of the old regime maintained control of the company. The company’s debts were transferred to the state, and today Chileans are still paying these off through their taxes. ENDESA and its subsidiaries and associated firms control close to 80 per cent of Chile’s energy resources, including generation, transmission and distribution. The company is the sole owner of the 1,900kilometre-long Central Interconnected Grid that transverses the length of the country, as well as 9,000 kilometres of regional grids. Other generation companies, including state-owned ones, that wish to transmit electricity have to pay high transportation fees to ENDESA. Furthermore—and this has been crucial in the Biobío debate—the company was privatized with the water rights that it had registered as a state-owned company. ENDESA therefore holds close to 60 per cent of the most important water rights of the country’s major rivers, particularly for all large southern rivers (Bragg 1992, Valenzuela 1994a, Osorio and Cabezas 1995). This quasi-monopoly thus not only controls, almost single-handedly, the ‘engine’ of Chile’s development; ENDESA has also recently purchased the main generation and distribution utilities in Buenos Aires, Argentina and Lima, Peru. José Yuraszeck, President of ENERSIS, 20 per cent owner of ENDESA, which controls close to 52 per cent of electricity generation in Chile, declared recently that he aspires to dominate the Latin American market during the next few years. (It is not for nothing that Yuraszeck is known as Chile’s ‘Tzar of Electricity’.) ENDESA is trying to buy Light, the largest distribution company in Rio de Janeiro, Brazil, more electricity companies in Cordoba and Mendoza and also in Argentina, as well as companies that will soon be privatized in Mexico. CHILECTRA, ENDESA’s distribution sister, is fast becoming Latin America’s largest distribution company. ENDESA is also 10 per cent owner of GasAndes, a consortium building a natural gas pipeline from Argentina to Chile (La Epoca, El Mercurio). Another important aspect of ENDESA is the company’s political affiliations. The same group of technocrats within the Pinochet government—including Yuraszeck and men like José Piñera, Hernán Büchi, Miguel Kast and Sergio de Castro—who masterfully promoted the 1980 Constitution, and who designed and promoted the promulgation of neo-liberal electricity, water, mining and labour laws, were also responsible for the privatization of ENDESA. In this way ENDESA and related companies, all controlled by a handful of executives, notorious during the dictatorship, captured Chile’s energy market. Within a few years the company has shown the highest profitability of all Chilean firms and become a powerful multinational, unique in Latin America.

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In 1978, five years after Pinochet’s takeover, the National Energy Commission (CNE) was created. Until then, the state-owned ENDESA had the sole responsibility for planning Chile’s energy development. Pinochet’s team saw very early on the phenomenal business opportunity that privatization —‘appropriation’ would be more correct—of ENDESA offered. They saw the need to create a separate government body that would apparently have ENDESA’s previous responsibilities of defining and monitoring national energy policy and setting energy prices. Investment in the energy sector would then be left to the private sector. But, cunningly, the CNE was given a legal mandate that only allows it to recommend the next projects to be implemented, choosing from what the private sector has to offer. From 1978 until the return to our chaperoned democracy in 1990, ENDESA’s top officials took turns directing the CNE, and then returning to ENDESA’s board. Today the CNE has no power (or interest) to veto any project or to insure that a truly public, efficient and sustainable energy policy is implemented. It is difficult not to perceive the CNE as ENDESA’s government legitimization office. During meetings with the CNE in the early years of our campaign, officials pretended to be unhappy with ENDESA’s wicked doings and excess of unduly acquired monopolistic power. Later, these same officials were defending the company’s ideas and policies as if they were their own, and hotly supporting the Pangue project without modification. Jaime Tohá, socialist Minister of Energy during Aylwin’s government, told us during a tense encounter that if Pangue was stopped because of our campaign, he would personally beg ENDESA to build it. CHILE’S ‘DEVELOPMENT’ A crucial part of our critique of Pangue has been to examine the project, not as an isolated activity, but rather in its proper local, regional and national contexts, taking into account the implications for the environment, culture and politics, as well as the economic aspects. This is precisely what ENDESA and foreign donors have avoided. They have consistently sought to keep the discussion as narrow as possible, dismissing and disqualifying fundamental issues and arguments, and reducing the debate to a few technical details. This refusal to look at the issue in a wider context was exemplified when, in April 1993, members of GABB along with representatives of key Chilean environmental groups visited the Swedish Embassy and held discussions with the Ambassador, Madeleine Ströjke-Wilkens, and First Secretary, Stina Mossberg, in an attempt to persuade them to recommend against BITS supporting Pangue. We provided extensive documentation indicating not only the irregularities that plagued the decision-making process for the evaluation and approval of Pangue, but also the inappropriateness of the design and operation regime. Our arguments were disqualified as being ‘too political’, though the meeting was enlightening in that it revealed the donors’ narrow vision of development. In September of that year, we met again with Mossberg and with Jörgen Bengtsson of BITS, who had

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accompanied the Sweco consultancy team to Chile to review the environmental impacts of the project. On that occasion, the Swedish officials insisted on restricting the discussion to a single issue: if a minimum water flow were maintained downstream of the Pangue Dam, would the project be acceptable to us? We responded that this was the wrong question because what is at stake in the Biobío river is a far more complex set of issues. Needless to say, BITS ended up financing the turbines for Pangue without a guaranteed minimum flow downstream. What, then, are the wider implications of Pangue? What sort of ‘development’ does this project represent? And what kind of development is Nordic aid therefore supporting? ENDESA has argued that Pangue and the other dams to be constructed in the Biobío will mean development for the region, and foreign donors have adopted this rhetoric to justify their involvement in the project. The reality is quite the opposite. In fact there exists a colonial ‘North—South’ relationship between industrial elites in Santiago and abroad and the regions, which are treated as storehouses there to be exploited. Pangue fits clearly into this unsustainable and undemocratic pattern. Because of its natural richness, the Biobío region has contributed disproportionately to the economic growth of the country. Twenty-two per cent of the electricity generated in Chile comes from three dams built and owned by ENDESA in the Biobío s main tributary, the Laja river. According to Octavio Jara, Chilean Member of Parliament for the Partido por la Democracia (PPD), the company sells anually US $83 million worth of electricity generated in these plants and pays only US $3,000 in fees to the local authority. Curiously, Antuco, the county where these three plants are located, has become one of the poorest of the country and has lost most of its population in the last two decades. Moreover, half of Chile’s pine and eucalyptus plantations are found in the region. Fifty per cent of the region’s exports are accounted for by only two products with very little added value: fish meal and wood chips or cellulose. While the region has sacrificed so much for the growth of the Chilean GNP, almost half of its population lives in poverty, and unemployment is double or triple the national average of 5 per cent (La Natión, 3 November, 1995 and El Mercurio, 9 March, 1995 and 24 August, 1995). How can we explain this apparent paradox? Simply, most of these activities are exclusively extractive, conceived and imposed from Santiago. Their benefits escape from the region to the capital and to foreign multinational corporations, for example, in the paper industry in Japan. ENDESA is now compounding the environmental stress on the Biobío river with dams that will further degrade the region’s main artery, without consulting the local and regional populations. Our efforts to make ENDESA accountable for its actions have been thwarted time and again by a fortress of legislative and political protection built by the military regime. Pinochet’s technocrats accomplished two main things to retain power in spite of the return of democracy in 1990: (1) They ‘thinned out’ the Chilean state and privatized as much as possible, and (2) they put in place a very

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particular Constitution. In practice, this means that the government cannot remove the commanders-in-chief of the armed forces, including, of course, General Pinochet. It also means that nine Senators in Congress are designated by Pinochet, a constitutional mechanism that has insured until now that the governing parties never have the necessary majority to change the Constitution or to make any major legislative reform. Therefore we still have the same courts of justice that ruled during the dictatorship that no violations of human rights took place. And we have in place the same water code that had been drastically reformed by Pinochet’s team in 1981. Carl Bauer of the United Nations Economic Commission for Latin America has called the code ‘neo-liberal because of its marked emphasis on the private property of water rights, the market logic and the secondary role of the state…. [It is] a faithful reflection of the general economic-political philosophy of the military government’. (Bauer 1993:17). Others have described the water code simply as ‘aberrant’ since it allows companies to register freely perpetual water rights to Chile’s main rivers and all other sources simply by claiming them before anyone else does. This was one of the main legal reasons that we were unable to stop the Pangue project. When we started the campaign in 1991, ENDESA had already obtained ‘non-consumptive’ user rights to the waters of the Biobío from 1983. At that time, no Pehuenche or other local people noticed the announcement in the Santiago newspaper where such requested rights are published in case somebody wants to dispute them. In 1983, not even landowners in the area realized the gravity of ENDESA’s move. In September 1992, GABB along with 3,000 landowners and five of the seven leaders of the affected Pehuenche communities entered into a lawsuit against Pangue SA (ENDESA’s daughter company, which owns the dam) in the court of the regional capital, Concepción. We argued that since the company would dry out the river, their use of the water was ‘consumptive’. In June 1993, the court ruled in our favour. Clearly defending the region’s lifesupport system, it ruled that the Pangue project was illegal because nonconsumptive rights do not allow a company to alter the flow of a river, to dry it up, to create large water surges or even to fill up the reservoir. Our victory was short lived, however. Not surprisingly, though very sadly for us, the Supreme Court in Santiago revoked the local court’s decision two months later. Significantly, ENDESA’s lawyer was Pablo Rodríguez Grez, the infamous former leader of Patria y Libertad, an ultra-right terrorist group that contributed to the violent chaos during Allende’s government that ended with the military coup. Rodríguez, today a very wealthy lawyer, tends to represent military and related consortia, particularly those of the private electricity sector. He has the reputation of never having lost a case. TO THE HEART OF THE BEAST AND BEYOND ‘Development’ proceeds in Chile today at a frantic pace. Large industrial projects receive political sanctions regardless of their social, cultural and long-

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term economic and ecological impacts. Pangue was such a project. Ralco is another. The overwhelming scale of ecological destruction and environmental problems that accompany projects like the Biobío dams is the direct consequence of current patterns of economic growth, of particular modes of development and concomitant technologies. Large dams are a manifestation of a pattern that developing countries must apparently swallow whole, or perish. Degradation of watersheds and local cultures is part of the nature of large power dams. Far from being neutral technologies, they orient social processes towards more centralization and concentration of power over natural resources and capital, leading to more authoritarian and inequitable political systems. We have called the Biobío an artery, the lifeblood of a bioregion. We have witnessed how the builders of Pangue and Ralco, and their international financiers, like a beast defending its prey, have joined forces to secure control over this vital energy. They claim that they are acting in the interests of the nation. In fact, it is their own survival and expansion that depend on the Biobío’s destruction. We never thought that we would face such levels of greed. We never imagined that with our feet firmly planted on the Biobío’s banks, so sure of the rightness of what we were defending, we would find ourselves looking up to the Chilean social pyramid. Or beyond to much larger and more powerful global forces. To the multi-lateral lending institutions; to the Nordic countries with their export of development concepts and technological knowhow. Lately, when cornered by environmentalists, Chilean developers argue that our country must inevitably—as if it were a societal rite of passage—go through this stage of depradation in order to develop a basic infrastructure. According to this logic, only then—and European countries are given as the example—can a phasing into other less damaging modes of production and preservation of what is left of nature begin. Of course, such argumentation contradicts ecological truths. To restore fully a heavily dammed river or a razed forest takes patience on a geological scale, and wisdom the likes of which only Gaia has shown evidence of possessing. Our involvement in the campaign for the defence of the Biobío river during the past five years has been a kind of spiritual journey since it has helped us to widen our perception of the world, both natural and political. It is a curious fact that the act of defending a river seems to deepen one’s rootedness. One starts to apprehend the river, the forest, a plant, an animal as a fundamental part of one’s physical, emotional and spiritual self. Is it that we have so completely lost our sense that we do not perceive that all degradation of the biosphere degrades us? That through light, heat, air, water, food and information we are connected in a continuum with nature. That we are not in the biosphere as if we were standing on a stage. That we are the biosphere. If we could be more sensitive or informed, the destruction of the Biobío would hurt like a wound; a personal, local, national and global loss. Deep ecologists have said that this identification with the nonhuman is the only way to restore the conscious unity of humanity and nature. That as long as we continue to conserve so-called natural resources as things ‘out

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there’, useful but external to us, we shall inevitably end up trapped in another lethal blind alley. Incorporating the Biobío into ourselves has been the blessing in this journey. Yet after years of full-time work by so many people, and in spite of the lawsuit, the travels, the national and international controversy, the protests, the letters, the lobbying, the thousands of interviews, forums and seminars, what have we achieved? What we wanted was to stop the construction of the dams as a first result, and raise environmental consciousness and empower communities as a second. Not the other way around. What will be the point of environmental awareness and strong community organizations if all that will be left for them to do is to contemplate sadly how the once magnificent wild river was transformed into a pathetic, mechanically regulated lavatory, and to dream of how the watershed was once beautiful and full of life? If destiny and human will on earth dance face-to-face within a sphere of unlimited possibilities, it is not easy to accept that this had to happen. Through this campaign to defend the river, we innocently walked straight into the heart of the beast—touching the very pulse of the current development paradigm. And today, we do not even seem to have scratched its hide. So where does it leave us? What do we do now? How do we continue? We are dealing with concepts of life and humanity’s development, with paradigms and cosmology. How can we begin to heal this twisted and deadly epistemology of the powerful of today? We have been forced to be patient, selfless, humble. But working without expecting immediate results is difficult when one is attempting to halt the irreversible degradation of a beloved river—an everlasting source of infinite life. Still, to defend the Biobío has been an honour. To be human voices for the river. To become part of a wide network of people working around the world for similar causes. At the end of the day, one stops trying to find the reasons for continuing. After all, it is obvious—it is for survival, it is for the children, it is for love. One wishes, one dreams, though, that soon more battles will be won and the lost causes will only be karma to learn from, making us appreciate the beauty of the present even more. REFERENCES Arratia (1992) Letter to Glenn Prickett, Natural Resources Defence Council, 12 June. Aylwin, J. and Valenzuela, R. (1992) ‘Análisis de la “Evaluación de impactos sociales relevantes del proyecto Pangue; informe final” encargado por Pangue S.A. a Ecology & Environment Inc. y Agrotec Ltda.’, Santiago, September (unpublished). Bauer Carl, (1993) ‘Water rights and the market: effects and consequences of the 1981 Chilean water code’, Revista de Derecho de Aguas 4, Santiago. —— (1994) ‘Against the current? Privatization, markets and the state in water rights: Chile, 1979–1993’, Santiago. Bragg, Katherine (1992) ‘Behind the dam: the political economics of the Pangue project, Chile’, Santiago (unpublished).

170 IN DEFENCE OF THE BIOBÍO RIVER

El Mercurio 14 July, 1994, 24 August, 1995, 15 November, 1995, 7 September, 1995. General Comptroller’s Office (1991) Internal confidential report, Privatization of ENDESA, (unpublished). Innsyn (1994) ‘Opposition to power imperialistic?’, Special Edition, September 1994, Norwegian Agency for Development Cooperation (NORAD), Oslo, p. 15. Italian—Chilean Interuniversity Cooperation Project (August 1992) ‘The Biobío: lifeblood of a region’, in Application of the EULA Model in Chile on the Biobío River Basin—Gulf of Arauco—San Vicente Bay System, November 1989-April 1993. La Epoca 27 September, 1995, 26 October, 1995, 10 March, 1996, 12 March, 1996. Neruda, Pablo (1991) Canto general, trans. Jack Schmitt, Berkeley and Los Angeles: University of California Press. Orrego, J. (1992a) ‘El proyecto hidroeléctrico para el Alto Biobío—memorandum’, Santiago, March (unpublished). —— (1992b) ‘Análisis crítico del “Informe económico social y ambiental del proyecto Pangue” realizado por el Ministerio de Planificación Nacional (MIDEPLAN) en Octubre 1992’, Santiago, December (unpublished). —— (1993) ‘La no-participación ciudadana en torno a la implementation del proyecto hidroeléctrico Pangue en el Alto Biobío. Cronología de un etno y ecocidio anunciados’, Santiago, November (draft, unpublished). Orrego, J. and Bragg, K. (1992) ‘Análisis de la “Evaluación de impactos ambientales relevantes del proyecto Pangue; informe final” encargado por Pangue S.A. a Ecology & Environment Inc. y Agrotec Ltda.’, Santiago, September (unpublished). Osorio, Victor and Cabezas, Iván (1995) Los hijos de Pinochet, Santiago: Grupo Editorial Planeta. Pangue SA, Ecology and Environment Inc. and Agrotec Ltd (1992) ‘Evaluación de impactos ambientales relevantes del proyecto Pangue, informe final’. Universidad de Conception (1987) ‘Estudio preliminar para la evaluación del impacto ambiental del sistema de centrales hidroeléctricas del Alto Biobío’. —— (1989) ‘Análisis de posibles impactos de la Central Pangue en el Alto Biobío’. US Embassy (1995) Memo, October. Valenzuela, Rodrigo (1994a) ‘Brief story of ENDESA’, Santiago (unpublished). —— (1994b) ‘Las hidroeléctricas del no Biobío y el future del pueblo Pehuenche de Chile’, June, Santiago: (unpublished).

INDEX

Aarseth, B. 41 ABB Generation 16, 63–5, 66–8, 70, 121, 143, 159 Adamson, Charles 93–5, 96 Adolfström village 26 Africa 38, 65 Aftenposten 48, 148 agriculture 25, 35, 64 aid-financed hydro projects, EIAs and 62 Aignerenen, Gastón 135 Ainola, O. 106, 108 Ajtte (Jokkmokk’s Sami and mountain museum) 37 Akkajaure (reservoir behind Suorva Dam) 33 Allende, President Salvador 132–5, 147, 155, 167 Alta canyon, biodiversity in 47–9; hydro scheme (1978) 43 Alta Dam 6, 39, 40, 51, 59; civil disobedience and 43–7, 52; Detsika camp 44; first phase of resistance to 42–4; impacts of 46–49; inspiration from Second World War 52; opposition to 40–2, 43–5, 50; police action 44–6, 49; reindeer migration routes and 42; struggle 26–8; struggle, lessons from 49–3, 85; struggle and Sami culture boom after 54 Alta environmental negotiation committee 53

Alta People’s Action (‘Folke-aksjonen’) 44–7, 49, 52 Alta Power plant and landscape (1993) 48 Alta river 40, 43 Alta-Kautokeino river 43, 53 Alta-Stilla road 46 Altakrønike 6 Altaposten (newsaper) 6 Älvkarleby power station 21 Älvrädddaren (The River Saver) 27 Amland, Bjørn H. 120 Andersson (Foreign Minister Sweden) 133 anthropology expert 62, 66, 68 aquatic organisms, caesium and 24 Araucaria (monkey-puzzle tree) 152, 158 Arauco Gulf 157 Arctic circle 13, 22, 44 Arun 3 hydro project (Nepal) 60–3, 65, 72 Asian dam builders 38 Asian Development Bank 62, 67, 78–79, 85–7, 88, 95 Association for International Water and Forest Studies see FIVAS Aswan dam (Egypt) 16 Auna, Eivor 35 Australia 3, 64, 77, 82 Austria 3, 64 Aylwin, Patricio 133–5, 140, 155, 158–60 Bahrke, Mikael 83 Baltic Sea 13, 22, 24 Ban Kangvit (Laos) 94 Bangkok 7 Bangkok Post 83, 87–9, 96 Båtvik, Svein 70

171

172 INDEX

Bauer, Carl 166 Bayliss-Smith, T. 104 Beard, Dan 62 Bengtsson, Jörgen 138, 165 Berg, Per 64, 137, 139 Berlevåg 53 Bernsten, Thorbjørn 69 Besant-Jones, John 60 bilateral agencies, 8, 63–5 Biobío dams 153 Biobío river (Chile) 7, 8, 132, 135, 137, 147, 149–1; course of 152; defence of (1991) 154; effect of dam construction 155–60; shortcomings of EIAs and 162 BITS 61, 63, 65, 67, 70, 72, 149; Chile and 134–41, 143, 145–9, 165 Bjerninger, Jan 84 Bjørklund, I. 47 Boden 30 Bodø (Norway) 49 Boine, Marie 54 Boonaphol, Phao 86 BOOT schemes, dam building in Laos 86– 89 Boulding, Kenneth E. 59 Braendeland, Gyrd 90 Bragg, Katherine 163 Brantenberg, T. 47 Brazil 4, 5, 64 Bretton Woods institutions 5 British ODA, Kvaerner turbines 64 Brundtland Commission 68 Brundtland, Gro Harlem 40–2, 45, 47–9, 51, 68, 140 Bryceson, Ian 70–2, 90, 104, 127 Büchi, Hernán 163 Burapha (Swedish firm) 78, 80, 92 Burma 90 Cabezas, Iván 163 Cambodia 75, 81 Canada 3, 64, 106 The Careless Technology 59 Castro, Sergio de 163 Chaffey, Paul 140

Chagga people of Kilimanjaro, irrigation furrows and water holes 110–12 Chernobyl nuclear accident (1986) 24 Chiang Rai 83 Chile 65, 132–4, 138, 146, 149, 157, 160; ‘development’ 164–8; down- stream question for Biobío 157– 9, 162 Chilean environmental authority (CONAMA) 147–9, 160–3 Chilean Industrial Development Association (SOSOFA) 162 Chilean National Energy Commission (CNE) 164 China 5, 83, 149 CIA 147 CODELCO (Chile) 162 Cold War 72 Colombia 64 Committee for the Defence of People’s Rights (CODEPU) 146 compensation 3, 24, 42, 59, 79 Constructors’ Union (Sweden) 28 consultants 66–9; EIAs and 63, 65, 92, 161; fisheries and 59, 89 Contreras, General Manuel 146 Convention on Biological Diversity 138 Copan 160 corruption, EIAs and 62 Council of Furrow Elders 111 cultural traditions, versus industrial demands 32–4 Dagbladet (1995) 47 Dal 21 Dalland, Øystein 6, 47–49, 54 dam building, bilateral agencies, companies and 3–5, 8, 62, 68; jobs in 26, 29; Laos, the BOOT Era 86–89 Damming the Three Gorges: What the Dam Builders Don’t Want You to Know 7 dams, aesthetic objections to 26, 28; controversy over in Sweden (1970s) 22; debate about global water crisis 3;

INDEX 173

effects on forests 3–3, 23, 33; effects on the poor 3–4, 59; environmental effect of enlargement of 28; environmental and social impacts 3, 9; erosion and 59; expense of decommissioning 3; farming and 3–3, 23, 25, 33, 59; favoured by electricity producers 25; fishing and 3, 23, 33, 43, 59, 157; grazing pastures for herders and 25, 33; international opposition to large 4; jobs in Sweden and 25; Lule valley ecosystem and 13; North, end of 5; proponents of 28; public opposition to 3–3; shorelines and plant life and 23–4; the South, Western donors and 3, 61; Swedish rivers protected from 26; trade unions and 28; viability of Bank-funded 60; water quality and wildlife 24 ‘dams as aid’, hydro-power know-how and 16, 38, 75 The Damned 3 Daragong, Soulivong 90 debt repayment, recipient government and 60 Demningen 6 Den Lilla Insidan 6 Denmark 65 Department of Livestock 80, 94 development, long-term costs 32 Development Today (1993) 90, 136, 138– 139, 148; (1994) 61, 82, 119, 130, 135, 144–6; (1995) 83 DeVylder, Stefan 88 Diktafon 6 Directorate for Nature Management (DN) 69–1, 90, 140–3, 149 Dixon, John A. 4 Domincó, Simon 15 ‘domino effect’ 50 Dørmenen, photograph of 48 Dragados 159 Dufborg, Astrid 69, 129

Dunfjell, Ellen Marit 45 Dunfjell, Leif 44 ecological systems, modern intrusions and 42 economic growth, cheap electricity and 28 economic viability, costs of 8 Economist, The (1993) 62 Edberg, Rolf 13 Edelstam, Harald 133 Egypt 16 EIAs 59, 65, 104, 120; Chile and 156–8, 160–3; Chinese dam and 7; engineering firms and 66; impartiality of 69, 73; limits of 115–17; need for improvement 50; Nordic donors and 68–69; Tanzania, limited to dam-site area 107– 9, 110, 115; theory of 61–3 Eikjok, Jorunn 48 Eira, Johan J. 40 Eira, Mikkel 48 Electricité du Laos 78, 87, 99 electricity 3, 22–3, 37 Electricity Generating Authority of Thailand (EGAT) 77, 80, 87–9, 96–8 Elin (Austria) 63 ENDESA (Chilean firm) 8, 132, 134–6, 137, 139–1, 145–7, 148; Biobío defence and 154–6; inadequate EIA and 156–8, 160–3; Pangue and regional development, argument 165; Pehuenche people and 159–1, 166; privatization and politics 163–5, 166 Enström, Karl Axel 13–14 environmental movements 4, 27, 50–2 environmental regulations, Norway 40 environmental review, theory and practice 68–71 environmental and social impacts, BOOT scheme and 88 Environmental and Social Impacts of Large Dams 3

174 INDEX

environmentalist, forecasts about Alta dam 47 Epupa Falls hydro project (Namibia) 67, 69–1, 72 El Espectator 15 Espinoza, Colonel Pedro 146 Ett annat sätt övervinter 6 Euro-Latin American Research in Environmental Sciences (EULA) 156–8 Europe 44 European Year for Conservation (Norway 1970) 42 ‘expert’ 67 export credit agencies, loans with state guarantees 65 Export Development Corporation (Canada), OECD and 143–5 external environment, importance of 36–8 Falls Day (1985) 10–13 Fältbiologerna (Field Biologists) 10–12 Far Eastern Economic Review 82 Feierman, Steven 111–13 ‘fifth column’ 49 fingerlings 24, 96 Finland 7, 25, 43, 64, 144 FINNIDA 63, 65, 104, 118–22, 128 Finnish International Development Agency see FINNIDA Finnmark, battle of (1944) 53 Finnmark County Energy Corporation, Alta plant loans 46 fishing 24–5, 47, 59, 66, 89–3, 95–7 FIVAS 64–6, 90, 146, 148–50 fleeting job opportunities, destruction and 37 Foley, G. 114 forestry 25, 35, 59 France 3, 62–5, 72, 77, 144 free-flowing stream 3, 22–3 freedom of information rules 5 GABB 135, 146, 148–50, 154, 156, 164, 166 game reserves, management in Tanzania 115 Gaup, Ande 45

General Electric (Canada) 63 German Development Bank (KfW) 61–3 German Federal Audit Office 61 Germany 64, 66, 72 Gestión Ambiental 162 Gjerde, Bjartmar 46 Gnouang river 79–1, 98 Goidnus 52 Goldsmith, Edward 3 Gota 21 grayling (Thymallus thymallus), spring spawning 23 green gold 36 En grupp av ögonblick 6 Grimstad, Per 69–2, 148–50 Guatemala 64 Guttormsen, Trygve Lund 42–4 Haaland, Per Terje 49 Haetta, Solveig 54 Hai river 79–1, 94, 97 Hale Dam 106, 128 Hälla in Västerdal river, local group to prevent damming 27 Hammarskjöld, Bo 26 Harsprånget 30, 32 Haugland, Cato 145 Hedberg, Professor Olov 119 Hedenstedt, Anders 85, 89 Helgesen, Jan 51 helicopters 34, 49 Helsinki Package 64–6, 143, 145 Henriksen, Haakon 53 High Pa Mong Dam 81–3 Hildyard, Nicholas 3 Hinboun river 79, 94 Hirsch, Philip 98 HM King Carl Gustaf of Sweden 14 Hofsvang, Ellen 90 Högdahl, Thor 21, 22 Holmlund, Bo 14–15 Holmsen, Sven 91–3 Horta, Korinna 136 Houay Ho Dam 100 Hubendick, Gudrun 148 Huitfeldt, General Tønne 49, 52 Husard, Malin 135

INDEX 175

hydro companies, challenge in the political arena 26 hydro exploitation, Vindel river 6 hydro power, agriculture should make way for (Tanzania) 118; electricity demand and 24; exploitation 6, 22–3, 36; history of 25–6; projects 8, 50, 104; public resistance to and companies 15; renewable resource 3; Swedish law (1983) 28; Swedish rains (1993) and 31; Water Rights Decree (1880) 25 Hydroconsult AB 78 hydrology expert 62

Italy 77, 144 IVO international 67, 107–9, 118, 121, 124, 126

ichthyology expert 62 Iesjavri reservoir (1976) 43 Iesjavri river 53 Imatran Voima International see IVO India 3–5, 61, 73 indigenous people’s organizations 45 Indo-China 119 Indo-China War, Norway and 47, 133 Indo-Chinese countries 75, 90 Indonesia 64 industralized countries, resistance to dams 3, 4 industrial fisheries, Baltic Sea 24 industrialization 25, 38 Innsyn 148–50, 155 International Commission on Large Dams (ICOLD) 4, 8, 81 international controversy, Arun 3 hydro project (Nepal) 60 International Finance Corporation (IFC) 8, 134, 136, 141–3, 148, 156, 160, 163 international hydro market, Nordic-based multinational companies 63 International Monetary Fund 120 International Union for Conservation of Nature (IUCN) 44 Ireland 144 ironworks 24–5 irrigation 3, 7, 17, 59, 106–8, 109–13 Israel 51

Kading river 94 Kalix river 6, 22, 26–9, 85 Karasjok 45, 52 Kast, Miguel 163 Katío-Embará people, Sinú river (Colombia) and 14–15 Katz, Ricardo 162 Kautokeino 45, 50 Kautokeino river 42, 45 Kenya 64, 72 Khammoune Limestone Protected Area (Laos) 80 Kibosho missionary attempt to divert water (1890) 111 Kidatu Dam (Tanzania), SIDA and 119 Kihansi (Tanzania) 67, 70, 122, 129–1 Kikuletwa Dam 106 Kilimanjaro 110–12, 113, 123–5 Kilimanjaro Native Cooperative Union 111 Klubbudden 36 Korea 77 Koren, C. 46 Korogwe (Tanzania) 113 Kotmale dam (Sri Lanka) 16, 65, 67 Kristiansen, Alexander 130 Kvaerner Energy 51, 63–5, 66–8, 85, 121, 137, 143–5, 150 Kvaerner Turbin 143, 145 ‘Kvaerner’s game’ 8, 139, 159

Jacobsson, Thorvald 10–12, 15 Jakobsson, Eva 21 Japan 66, 77, 107, 124, 144, 166 Jara, Octavio 165 Joatka Lakes 43 Johansson, Billy 63 Johansson, Dick 137–9, 140, 142 joiks 54 Jokkmokk (Arctic town) 6, 13, 30, 32, 34, 36 Jokkmokk Municipality 35–8 Jokkmokk School (1987) 15–17, 38

176 INDEX

Kvist, Ebbe 147 Lais river 26 Lais village, inundation by storage reservoir 26 Laja river system (Chile) 136, 165 Lake Akkajaure 21 Lake Iesjavri 43 Laksao (Laos) 94 Lankester, Chuck 82 Lao People’s Democratic Republic 75, 86 Lao Women’s Union 91 Laos 16, 22, 59, 67, 83, 133, 149; BOOT schemes 86–89; costs and benefits of dams in 79–2, 87, 98; dam building to export electricity 86; development aid budgets and 85; grants from Norway 77–9; hydro power and 75–9; importance of fishing in 94; profits from Theun Hinboun Dam 79–1; study of rivers of 94; talks with Vietnam about energy 87; trust of the Swedes 85 Lappland 35, 53 large pulp mills, hydro-power plants in Sweden 21 Larsen, Thor 70–2 Lawonjarg 53 LDCs (least-developed countries) 65, 71, 132, 140–2 Lesotho 64 Lesotho Highlands project 63, 70, 136, 140 Letelier, Fabiola 146 Letelier, Orlando 146–8 Leuk 99 Ligga by the Lule 30, 36 Liljesson, Lars 61, 135 Lilla Lule (tributary of Lule) 34, 36 Ljusnan river 6, 27 Lohmann, Larry 81, 87 ‘long-haired screaming professional demonstrator’ 27 Loo, Tycho 27 Lövgren, Lars 5–6, 85

Low Pa Mong 82 Luhumbika, B.A.S. 126 Lule river (Sweden) 12–14, 16, 21, 30, 32, 34 Lundberg, Ingolf 52 Lundberg, Lennart 66 Maasai pastoral rangelands, management and 115 McCully, Patrick 3, 5, 60 McNamara, Robert 4 Magga, Ole Henrik 48 Masao, Fidelis 110 Masi reservoir project (1973) 43 Masi village 42–4, 45, 47, 53 MDX Public Company 78 megadams, social and ecological distruption 59 Mekong Committee (Bangkok-based) 81–4 ‘Mekong Mainstream Run-of-River Hydropower’ 83 Mekong region 72, 77 Mekong river 7, 79, 81–6, 94, 96 Mekong River Commission (1995) 83–5 The Mekong Currency 7 Mercurio, El 165 mercury, fish and 24 Messaure 30, 32 MIDAS (Bangkok-based) 78, 80, 92 Middle East 51 Mieron village 43 mining projects, Alta river and 41 Ministry for the Environment (Norway) 69 Mkomazi river 124 Moderaterna (Swedish conservatives) 134 Moon river 96 ‘Moratorium in Sweden’ 5, 21–2, 29 More Water, More Fish? 90 Morse Report, Narmada dam and 60 Mortgaging the Earth 3 Mossberg, Stina 138, 164–6 motorbikes, herding and 34 Mouan river 79, 93 Mount Kilimanjaro 106, 124 Mount Meru 106, 124 Mount Pare 106, 113, 124 Mount Usambara 106, 111, 113, 124

INDEX 177

Msaranga Chini, traditional irrigation techniques 107 Muela dam 70 Munga irrigation dam 106 Mung’ong’o, C. 7, 106, 123, 129 Mwanga (Tanzania) 113 Natión, La 165 Nakai Nam Theun National Biodiversity Conservation Area, protected area 80 Namibia 72 Nam Tha 1 Dam 100 Nam Theun 1 Dam 99 Nam Theun 2 Dam 79, 86–8, 90, 93, 99 Nam Theun 3 Dam 99 Narmada dam (India) 8, 59–1, 62, 70 Narvik 25, 42 Nation, The 62, 72, 85, 86–8, 89, 96 National Corporation of Indigenous Development (CONADI) 159 National Environment Commission 160–2 national parks 68 ‘needs’, donors and 61 Nepali critics, Arun 3 Dam and 60–2, 73 Nepali dam, appraisal by Sweco 61 Neruda, Pablo 152, 155 Netherlands 82, 144, 147 new kind of politics, Vindel and 26–8 New York 45 Ngum 2 Dam 100 Ngum 3 Dam 100 Ngum Dam (Laos) 86; comparison with Theun Hinboun 95 Nielsen, Eva 47 Nilsen, Alfred 49 Nilsson, Christer 24 Nilsson, Frode 133 Nilsson, Torsten 75–8 Niorravuolle 30 Nixon Administration 133 no aid common line, OEDC and 144–6 non-governmental Action for the Biobío see GABB Noorzay, Zia 86 NORAD 9, 63, 65, 67, 69–2, 78–80, 89; Biobío matter and 148–50;

finance for Chilean dams 136–8, 139–3, 145–7; finance for Pangani Falls Dam 118, 121–3; finance for Xeset Dam 85–7; independent consultants and EIAs 104; Norconsult EIA and 90–3; on water fees 127, 129–1 Norconsult 66–8, 70, 78–81, 85–7, 89–2, 95, 97; Adamson and 93; Pangue Dam and 139, 145, 149 Nordheim-Larsen, Kari 70, 92, 130, 136, 140, 142, 149 Nordic aid agencies 5, 7, 59; compensation and 129; EIAs and 66, 104; ENDESA and 163–5; ‘environmental adviser’ and 69; mandate and 132; Nordic companies and 16, 63, 66; Pangue Dam and 154; Pinochet regime and 133; view of themselves 77 Nordic case study 5–9 Nordic countries, African liberation struggles and 65 Nordic Dam-building in the South conference (Stockholm 1994) 91 Nordic Executive Director (ED) 141 Nordic region, environmental concern in 68 Nordli, Oddvar 44, 48 Norlander, Karl-Erik 67, 85–7 Norplan 7, 66–8, 78, 92, 108, 118, 121–3, 126 Norpower 80, 89, 94 Norrland, flooding 30 north-eastern Russia 25 Northern dam-building firms, new markets and 62 Northern Scandinavia 24 northern Sweden, distribution of resources 31 Norway 3, 5–7, 9, 15, 22, 25, 64, 70; access to information laws in 63, 73; aid agencies 59, 65, 69; Alta project and 84;

178 INDEX

commercial view 72; consultancy firms and EIAs 69; companies and aid 59; environmental regulations 40, 157; European Year for Conservation (1970) 42; as homogeneous welfare state 52; People’s Action and 45; police, Detsika camp and 44, 49, 52; post-Yugoslavia situation and 51; Samis of 41–3; State Pollution Control Authority 69 Norwegian Agency for Development Cooperation see NORAD Norwegian Association of Reindeerowning Samis 40 Norwegian Institute for Water Research (NIVA) 78 Norwegian NGOs, Chile and 133, 146 Norwegian Sea 22 Norwegian Society for Nature Conservation 47 Norwegian State Pollution Control Authority 90 Norwegian Supreme Court 45, 48 Norwegian Water Resources and Energy Administration (NVE) 43, 48, 50, 69, 90 Nuortabelle terrain, reindeer and 47 NVE, river conservation plans 51, 140–3, 149, 162 OECD, aid money and 64–6, 132; countries and dams 5, 73, 144; regulations, how to get around 143–6; Sweden and 72 ‘officers’ 31 Ohls, Uwe 61 Ölund, Göran 16 ‘open debate’ 70 opponents of dams, state repression and 4; Biobío (Chile) and 132; cultural and ecological reasons 22; democracy and social justice 4; Pak Mun (Thailand 1989) 96; scientists and lawyers 26; Swedes interested in nature 28 Orrego, Juan Pablo 8

Oslo 43–6, 51, 86, 90 ‘Oslo method’, Middle East conflict and 51 Osorio, Victor 163 Ovesen, Jan 97 Owens, S. 104 Pak Mun Dam 70, 95–8 Palme, Olaf 65, 75, 132–5 Pangani basin 109–13, 113, 123–5, 126–8 Pangani Basin Water Authority 128 ‘Pangani Dam versus the people’ 7, 104 Pangani Falls Dam 7–8, 63, 67, 70, 105–7, 106, 118; difficulties with EIAs and 104, 106–8, 115–17; drought and 59; local economy and 115; minimum flow recommendation 68; Nordic contracts for 65, 119–3; water availability and 125–8 Pangani Redevelopment Project (1985) 124–6, 128 Pangani river 7; agriculture by manamba migrants 112; democratic water-basin management regime 114–16; irrigation schemes 106; run-of-river hydro-power 108 Pangani valley 106–9, 113 Pangue Dam 7–8, 59, 67, 132, 141, 155, 162; BITS and 72, 134, 137, 165; environmental impacts of 59, 167; firms shortlisted to build 143; managing criticism of aid authorities 145 –51; minimum flow recommendation 68; NGO pressure from Chile and Norway 142; ‘no aid common line’ project 144; resettlement of farmers and 159; soft loan 65; Western donors and 154 Peace in Sarek 26 Pearce, Fred 3 Peasant Intellectuals 111

INDEX 179

Pehuenche (indigenous Chileans) 8, 137, 139, 154–6, 158–61 Pergau (Malaysia) 64 Persson, Per 122, 148 ‘pervasive appraisal optimism’ 6–7, 59–2, 62, 73, 89 Pinera, José 163 Pinochet regime (Chile) 132–5, 146, 154, 164, 166 Pircher, W. 4 Pite river 22, 28, 85 politicians, local jobs and 61 Porjus dam (1914) 13, 21, 23, 25, 30, 32– 4, 35 Porjus power station 16, 21, 38 Porjus village 14, 31–4 Porsi dam 31, 35–7 Portugal 144 Porvali, Harri 120, 125–7 Power, Water Mother Lule 15 Power (1987) 13–15 Power Conflicts 64 The Powerful River 14 Ralco Dam 132, 135–8, 141, 143, 146–9, 162; ENDESA and 160; environmentalists and 154, 167–9; Pehuenche community and 159 Randi Dam, effects of 37, 137 rapids, aeration function of 24–5 regulated rivers 24–5 reindeer herding 25, 32, 34, 41, 43–5, 46 Reindeer Husbandry Act 40 ‘rent-a-river’ approach 77, 88 reservoirs 24–5 Rich, Bruce 3, 4 Rieber-Mohn (Chief State Consulate) 47 Ringborg, Mats 144–6 Rio de Janeiro Earth Summit (1992) 68, 159 river corridors, mammals and birds 24 ‘river savers’, arguments of destruction 26 River Savers’ Association (Älvräddarnas Samorganisation) 6, 27–9 rivers, 25, 29, 35 The River Savers 27–29

Robertfors 14 Rodriguez Grez, Pablo 166–8 Rome 45 ‘run-of-river’ projects 8, 89 Runge, C.F. 112 Ryder, Gráinne 7 Rylander, Sten 72 Saetersmoen, Gjermund 67, 85–7, 92 Sakon Nakhon 79 salmon (Salmo salar), spawning season 23– 4, 47 salmonids, wild populations and dams 23, 42, 47 Same (Tanzania) 113 Sami 6, 21, 32, 33–5, 35; action against 49; Alta struggle and 50; compared with Tanzanian people 129; cultural impacts on 25, 29, 33–5; cultural loss and compensation 25; Finnmark county and 41–4; herders 25; hunger strikes 44–6, 48–49; hydro-power development and 28, 43; in Masi village, partisans and 52; in Norway 41–3; rights of 40–2, 51; self-sufficiency of 37; Troms county and 41; use of Alta case 44 Sami Parliament (1989) 49 Sami Rights Committee 48 San Vicente Bay 157 Santiago 133, 138, 142, 146, 149, 155, 165 Sardar Sarovar (Narmada river), appraisal and 59 SASDA 72 ‘Save Our Rivers’ 12 saw mills 25 Sayakhoumane, Napha 91 Scandinavia 16, 44, 50 Schmidt, Carl Arne 137–41 Schori, Pierre 59, 72, 134–6 sea trout (Salmo trutta) autumn spawning 23–4 Second World War 26, 52–4

180 INDEX

Segnestam, Mats 69, 71–3 Seitevare Dam, Sami culture and 34 self-sufficiency 35, 37 SEPTEL (right wing think tank) 162 Shambaa-speaking people, irrigation and 111 Sherman, Carol 87 Sida 9, 63, 65, 67, 69, 72, 147; archives (Stockholm) 7; choice and 73; existential crisis and 71–4; finance for Pangani Falls Dam 118; finance for Pangue Dam 135, 147; finance for Xeset Dam 84–6; letter to SNF 146–50 SIDA 72, 77, 82–6, 86, 88, 119, 121–3, 125, 147 Siemens (Germany) 63 ‘Sii’da’ groups 42 Silenced Rivers 3 SilfVerberg, Kari 120–3, 126 silt, reservoirs and 3 Sindström, Måen 68 single price-tag, reindeer-grazing lands and 33 Sinú river (Colombia), Katío-Embará people and 14 Sirkas (Sami village) 33 Sjöström, Per 91 Skanska (company) 63–5, 66, 143 Skauge, Ola 69–1 Sklar, Leonard 5, 60 Skoglund, Erik 82–4 Sluiter, Liesbeth 7 Smith, Professor Carsten 48 SNF 135, 146–8 snowmobiles, herding and 34 soft financing 70, 83 soft loan, Pangue (Chile) 65 soil, nutrients and 24 soil erosion management 68 ‘solidarity-oriented’ 65 Sölvbackastrommarna rapids 27 Somby, Nils 48 Sørheim, Ingvald 51 Sorkaitums (Sami village) 33 Sorsele, public meeting 26

South, central issues for 4–5, 16–17, 31, 66 South Africa 70, 134 Spain 143–6 Sri Lanka 16 Stabburselv river 53 state power, civil disobedience and 43–7 state-funded make-work programmes 36 Statkraft 7, 46, 50, 75–8, 80, 85, 92 Steen, Reiulf 140, 149, 155 Stiegler’s Gorge dam project, Norplan and 121 Stilla village, police action 44–6 Stockholm 27 Stockholm Environment Conference (1972) 68 Stoltenberg, Thorvald 50–2 Stora Lule river 36 Stora Sjöfallet (the Great Waterfall) 21, 33 Stornorrfors Dam 10, 24 Storsjökapell village 27 Ströjke-Wilkens, Madeleine 164 Sund, Even 119–1 Suorva Dam 21, 23, 25, 30, 32, 33, 35 ‘supplementary studies’ 67, 80, 92, 98 supporters of Vindel dam, arguments put forward 26 sustainable development 40, 50, 59, 68, 83, 86 ‘sustainable’ electricity 9 Svensson, Alf 134, 135, 140, 147, 160–2 Sweco 61, 66–8, 119, 138, 140–2, 165 Sweden 3, 5–7, 9, 15, 25, 64, 66; access to information laws 63; against dams on Mekong mainstream 82; aid agencies 16, 59, 65, 69, 135; aid to Chile cut off 133; BITS and Pangue Dam 146; commercial view of 72–4; condition of rivers 12–13, 22, 29; criticism of American government 75; dam building prohibited on new sites (Sweden) 28; decree (1987) for protection of rivers 22; environmental movement 27, 146; geography of 22;

INDEX 181

heavy rains (1993) 30; hydro culture 35; manufacturing industry 21, 26; moratorium in 21–2; Natural Resources Act (1987) 12, 28, 84; new water rights bill (1906) 25; nuclear power 21–2; ‘Peace in Sarek’ (1961) 26–7; personnel in power stations 38; Physical Plan for (1977) 28; pioneers in 35–7; plight of the world’s poor and 71–3; post-industrial hangover 36, 38; professional association of consulting engineers 67–9; radioactive caesium 24; river savers 27–29; Social Democrats and Biobío project 134–6; style of aid 72; training for dam builders 16 Swedish Board for Industrial and Technical Cooperation see BITS Swedish Central Organization of Salaried Employees (TCO) 28 Swedish Confederation of Trade Unions (LO) 28 Swedish dam-building era (1920s) 26 Swedish dams 19, 22–5 Swedish Environmental Protection Agency (SEPA) 147 Swedish government, studies of rivers (1970s) 28 Swedish hydro culture, Porjus dam and 32 Swedish hydro-power history 13 Swedish hydro-power industry, glory days (1950s and 60s) 26 Swedish hydro-power story, moratorium on dam building 17 Swedish hydro-power technology, South and 17 Swedish International Development Authority (SIDA) 77 Swedish International Development Cooperation Agency see Sida Swedish Royal Board of Hydro Power (Statens Vattenfallsverk) see Vattenfall

Swedish settler communities 21 Swedish Society for Local History 26 Swedish Society for Nature Conservation see SNF Swedish technicians, Jokkmokk School and 16 Swedist Tourist Association 26 SwedPower 66–8, 86, 121–4, 126–8, 149 swidden (or rotational forest) farming 97 Sydkraft 66 Tana fjord 53 Tana river 43, 45, 51, 52–4 Tanga Water Master Plans (1977) 124 Tanganyika 119 Tangwisuttijit, Nantiya 62 Tanzania 7, 64, 72, 149; crisis in state water management 112– 15; Nordic solution to water problem 109; Norwegian aid and trade 120; structural adjustment programme 109, 114–16, 120; Swedish aid for health and education 120; traditional irrigation and water rights 107; Village Councils (1975) 112; water fees 114, 116, 119, 127, 129–1; water management board 109–11, 114– 16, 118–20, 127 Tanzania Planting Company 107 Tanzanian Electricity Supply Company (TANESCO) 109, 113–16, 118–20, 122, 126 Tanzanian Ministry of Water (MAJI) 106 Telemark 6, 51 Terra 7, 90, 149 Thai Fisheries Department 96 Thailand 4, 5, 64, 73, 81, 87–9; anti-dam sentiments 89; benefits from dams in Laos 87; electricity from Theun Hinboun Dam 77, 79; impact of Pak Mun Dam 96–8; NGOs and 83–5, 98; water-diversion projects 83

182 INDEX

Thais, The, river-valley people 14 Thakkek 79 Theun Hinboun dam 7–8, 22, 59, 67, 70, 75, 75–8; anthropologist and 68, 97; debate about (1993) 121; environmental review 89–4; export of electricity to Thailand 97; impact of 77, 80, 92, 98; minimum flow and 68: Nordic connections with 84–8; Norwegian aid budget and 84; size of 81; trans-basin diversion project 78–79; what comes after 98–101 Theun Hinboun Dam, ownership of 78 Theun river 80, 94 Theun river (Laos) 7, 79, 89, 94, 98 Third World 3, 4, 6, 8, 15, 38, 59; environmental issues and 17, 50; NORAD line on dams 145; Nordic consultancy firms 66, 78; Nordic dam builders and 85; Norwegian hydro-power and 41, 64; sales of electrical equipment and 63; Swedish companies and dam building 22, 72; Terra NGO 149 Three Gorges dam 8 tied aid 61, 121 Tohá, Jaime 164 Toolanen, Bengt 96 Torne river 22, 28, 85 tourism 29, 37 Towards Ecological Recovery and Regional Alliance see Terra Traisawadichai, Malee 72 transportation 3 tribal communities 3 Trollhättan power station 21 Tucuruí dam 8 Tverelvdal valley 49 UK 62–5, 66 Ume river (Sweden) 12, 24, 26 Umeå 10 Umeå University 24

UN Commission on Environment and Development 40 UN Conference on the Human Environment (Stockholm 1972) 4 Undurraga, Jaime 162 unemployment, Jokkmokk Municipality and 36–8 United Nations 45 United Nations Commission on Environment and Development 68, 83 United Nations Economic Commission for Latin America 166 United States 3, 62, 72, 133 University of Conception 156–8 University of Dar es Salaam 7, 70 Upper Ljungan river 27 Uppsala University 97, 119 Urrá I dam (Colombia) 14–15 Urri Dam (Kashmir) 63–5, 67 Usher, Ann Danaiya 85 Utsi, Per Ola 33, 34 Vadsø 53 Vaernes, Jon Einer 125 Valenzuela, Rodrigo 163 Valkepaa, Nils Aslak 54 Västra Strand 33 Vattenfall 5–7, 10–13, 14–16, 21, 50, 61, 75–8, 136, 149; benefits of industrialization 36; divide and conquer strategy 27; earnings from Theun Hinboun 77; government of workforce 31–3; hydro-power training centre 16–17; jobs around Vuollerim 35; Kalix river and 27; negotiations with Swedish conservationists 26; one-off payment to Samis 25; Peace in Sarek and 26; round-the-clock surveillance 30; SwedPower and 66; Theun Hinboun Dam and 67, 80, 84–6; training dam builders 38; workers’ barracks 32 VBB-Viak, Sweco and 66 Vedin, Maria 6

INDEX 183

Vientiane 7, 77, 85, 98 Vietnam 65, 75, 81, 87, 133–5 Viking, police reinforcements and 46 Vindel river 5–6, 22, 24, 26, 26, 28, 85 Virdnejavri basin, reindeer and 47 von Bennewitz Bastián, Rodolfo 136 Vuollerim 31, 35 Wakomfongo clan (Kilimanjaro) 110–12 Walder-Brundin, Eva 144 Wallbing, Stig 16 Wallin, Gunnar 80, 89 Washington 73, 142, 159 ‘water mother’ (mae nam) 14–15 Water Right, Decree (1880), hydro-power industry and 25 water rights, expropriation of from landowners 26 Water Rights Bill (1918), hydro development in Sweden 25–6 Water Rights Courts 26 ‘water treatment plants’, organic pollutants and 25 wetlands, birdlife and 24 Wheeler, Raymond 81–3 ‘white coal’ 33, 36, 75 Wildlife Conservation Society 78, 80, 92 Willoch, Kaare 52 Wisløff, Kristian 53 Wisløff, Ulrik 52 Wolfensohn, President James 61 Wollström, U.I. 17 World Bank 60; BOOT schemes in Laos and 86–89; China and dams 5; consultancy firms and 66; dam projects and 3–5, 8, 59, 62, 73; irrigation projects in Tanzania 107; mandate of 65; Nepali critics and 60; Pak Mun Dam (Thailand) 95 World Council of Indigenous Peoples (WCIP) 44 Xe Nam Noy Dam 100 Xeset Dam (Laos) 63, 67, 85

Yuraszeck, José 159, 163 Zambia 16, 72