Mekong Forum on Water, Food and Energy. 2012. Presentation from Session 13: Framing Entitlements and Benefit-Sharing for Dam-Affected Communities

1. Profile of Current Practices for Benefit Sharing and
Compensation Allocation in Hydropower
Development Projects in Mekong Countries
Mekong Project 4 on Water Governance
14 November 2012
Hanoi, Vietnam

2. Research Focus
Hydropower Dam
Development
Inclusiveness of
stakeholders’
participation
Outcomes Processes
(Distributive (Procedural
Inclusiveness of
Equity) Equity)
stakeholders’ interests
in the agenda setting
Results of allocation b
Benefits Costs
Monetary Non- Envi- Social
monetary ronment
a

3. Case Study Projects
 Theun-
Hinboun
Expansion,
Lao PDR
 Yaly,
Vietnam
 Lower
Se San 2,
Cambodia
Yaly THXP LS2
operating Under construction/ Under planning/
since 2002 finish 2012 start 2012

4. Sharing of Benefits to Local Communities
Outcomes Case study projects/ Countries
Yali, Vietnam THXP, Lao PDR LS2, Cambodia
1. Sharing of project services
Electricity national power grid national power grid national power grid
Water supply  Free supply resettles supply resettles 
2. Sharing of non-monetary benefits
Resources entitlements   
Priority in hiring  during dam construction dam construction
3. Sharing of monetary benefits
Development funds  provided & managed by provided by Project/
Project managed by Gov.
Taxes  to provincial Gov.  to national Gov.  to national Gov.
Revenue sharing   
Sharing of ownership   
• Non-monetary benefits relating to livelihood options could be explored more.
• Development funds/taxes to local authorities need mechanisms to ensure the
revenue used for local development.
• More direct sharing schemes have not been widely used.

5. Compensation of Costs to Local Communities
Outcomes Case study projects/ Countries
Yali, Vietnam THXP, Lao PDR LS2, Cambodia
1. Compensation to resettles
Houses  new houses built  new houses built Details are not
Agricultural land  land sizes of each HH  average land size is available. But it is
surveyed and allocated allocated across all HHs. expected that
Crops monetary calculation monetary calculation compensation
Public utilities  road/electricity/ water  road/electricity/ water package in terms
Health/ education  health centers/ schools  health centers/ schools of cash and lost
Other supports  agricultural extension  Food supplied till income assets will be
target reached provided.
2. Compensation to made to Cambodians  
other affected areas after the incidences.
3. Compensation to loss Forestry tax provided to Budget provided/ Budget provided
of ecosystem provincial Gov. managed by the Project to restore impacts
• Impacts areas recognized are ONLY areas flooded -- resettles provided with
compensation packages BUT other affected areas are not eligible. Noted that within the
eligible group, there are often subsequent issues after compensation.
• Impacts on ecosystem is another area needed attention. Need clear plan on what
impacts, how to implement and how to monitor the restoration works under the funds.

6. Selected Key Issues on Outcomes
 Local communities is not the target beneficiaries of hydropower projects
Benefits of services
- Electricity targets urban sectors and some is exported.
- Electricity supplied to national power grid. need facilities for local to benefit.
- Improvement of physical infrastructure provided. Other benefits to enhance
livelihood options could be explored more.
Monetary Benefits
- In forms of development funds/ taxes to local authorities. need to ensure the use
of revenue (more difficult to secure when it is sent to the state’s budget).
- A more direct sharing schemes ?
Electricity users Kon Tum
% (NRT)/ 50% (VAT)
Natural resource tax
EVN power grid Annual provincial budget
Gia Lia
Yaly Hydropower Value added tax % (NRT)/ 50% (VAT)
Company
Forestry tax Provincial fund for
forest protection

7.  Impact areas of dam development recognize only the areas flooded and
tend to exclude other anticipated and possible impacted areas.
Compensation
Eligible - As a result of such scoping, eligible
package
persons for compensation are only
those losing their physical assets
during dam construction.
Area flooded = impact zone
- Others that would affect during post-
construction and operational periods
are not considered.
- These affected groups are also not
included in information sharing.
Other impacts (more floods,
less fish, water shortage,
- Need a thorough study of impacts
poor water quality) NOT and a continue monitoring on arisen
Eligible impacts.
?

8.  Negative impact on ecosystem has not been adequately addressed in
allocation of compensation.
- Scoping of environmental costs too is still debatable +
often has no representing agent.
- Details ecosystem impacts are usually limited.
- In the case studies – Yaly has ‘forestry tax’ and LS2 has
budget for ‘restoration of environmental impacts’ --
Need clear plan on implementation and monitoring of
the restoration works under the funds.
 Agricultural land included in compensation package often has subsequent
issues after allocation.
- Main principle is to provide equivalent size. Types and
quality are often unknown.
- Let to disputes on unfair allocation/ changes in livelihoods
due to unsuitable land.

9.  Compensation package provided by the projects may not be responsive to
the actual needs of the affected communities.
- Compensation package often provided uniformly across all groups whereas
there are actually diversity in locations, ethnics, and genders.
- A careful analysis of different groups and their direct participation in the
planning process would help enhancing efficiency in allocation of compensation.
Gender
Upstream-
Downstream
ethnics

10. Selected Key Issues on Procedures
 Primary discourse to legitimize hydropower projects is to stimulate national
macro-economic development, benefiting the local project area and people
are not the principal concern.
generate electricity
supplying growth Local project area
contributing to and people ???
national economy
 Key agencies responsible for hydropower development are from energy
sector and may overlook social and environmental aspects.
Water for domestic/irrigation Water for hydropower
Min. of Agricultural &
Rural Development
? Min. of Industry & Trade
primary mandate to provide
mandate on livelihoods energy supply to industry

11.  Limited representation and meaningful participation of local communities
in project development in general and in decision-makings on allocation of
compensation in particular.
- Questionable public participation / acceptability of EIA
- Resettled residents directly involved in certain procedures
but not on decision (e.g. survey for lost assets but not on
identification of prices, inform of prescribed relocation
sites but not consulted on their preferred locations).
 No follow-up mechanism to address concerns of resettled communities
after compensation allocation process is done .
- The official reports of all cases stated that the resettled residents have accepted all
compensation packages allocated.
- The study however found many concerns arisen after relocations BUT there is no
mechanism for people to make claims.

12. More Issues ?
We need your opinions!

13. GROUP DISCUSSION
 Two small group discussions
Immediate and
Long-term impacts of
ongoing impacts of dam development and
dam development and management
management
 Each group will:
a) Validate and firm up the list of agenda issues (a matrix of initial list is provided),
b) Select three key issues and brainstorm on appropriate approaches to address them, and
c) Brainstorm on appropriate mechanisms to operationalize the approaches (i.e. lead
responsible agencies and budgeting resources )
 Each team thereafter report back to the plenary to exchange opinions.

14. Matrix A: validation of key findings and agenda issues (a)
No Agenda issues Validity
 /  
Distributive equity issues
1 Unfulfilled compensation terms based on people’s
understandings of promised compensation package
2 Terms delivered but turned out to be defective or undesirable
(e.g. farm land with poor soil quality)
(please add more items)
Procedural equity issues
1 Lack of full disclosure of information relevant to planning during
construction and operation of dam projects
2 Gender difference is not critically considered particularly in the
accounting and decision-making for compensation of affected
groups
(please add more items)
Matrix B: appropriate approaches to address and operationalize key issues (b)/(c)
No Selected key agenda issues Approaches/ mechanisms to Operationalized
(a) address the issues (b) mechanisms (c)
1
2
3