The need for much greater cooperation over water resource development in South-east Asia has been well documented. The economies of the region are growing rapidly and so increased demand for electricity is encouraging the development of a string of new hydroelectric schemes, on the River Mekong system and elsewhere. China’s decision to push ahead with its own dam projects on the upstream section of the river could reduce the impact of any attempts at water resource management in the lower basin, but the mekong-river-commission (MRC) is forging ahead with a range of initiatives to promote regional water resource cooperation.

Economic reforms in former communist states and recovery from the Asian economic crisis of 1998 have resulted in an annual increase in electricity demand of 6-10% in South-east Asia. While some thermal power plants are being developed, hydro is generally considered a more economically attractive option. The lack of hydrocarbons within the region, growing competition for liquefied natural gas (LNG) in the Pacific Basin and the high international oil price all make feedstock for thermal power plants an expensive option and it is difficult to predict future running costs.

There is little interest in nuclear power within the region, while wind and solar power are yet to really take off and only the isolated Philippines has substantial geothermal generating capacity. As a result, hydro is set to continue to dominate the regional generation mix, despite some concerns that the Mekong could be becoming overdeveloped. As on the Nile and other rivers that enabled the rise of hydraulic civilisations, an estimated 65 million people rely on the annual flooding during the Monsoon season for both water and silt. The river is therefore of great economic, social and also symbolic importance.

The Mekong river

The Mekong rises in Tibet and flows through China, Myanmar, Cambodia, the Lao People’s Democratic Republic (PDR), Thailand and Vietnam on its way to the South China Sea. It is the tenth longest river in the world at about 4880km and is also the tenth largest by volume, discharging 475km2 of water a year from its basin of 810,000km2. Over 200 rivers in the world cross international boundaries but few flow through as many countries as the Mekong. The lower Mekong riparian states are therefore particularly prone to developments by other governments upstream.

Water flows have become more irregular over the past 15 years, although it is not clear to what degree this is due to increasingly irregular rainfall – perhaps a result of climate change – and the lack of controls on dam construction. The Mekong’s flow normally drops during the dry season, which usually lasts from November until May. However, in the 1990s the rate of flow was recorded as falling from 50,000m3/sec during the Monsoon season to just 2000m3/sec towards the end of the dry season, despite the fact that the river is partly fed by Tibetan glaciers. This resulted in very low water levels at the main lower riparian dams and much reduced generating capacity. In addition, very low flows enabled salt water to affect agricultural land.

Other developments could also be to blame for water flow problems. Some shallow water sections have been dredged and rapids destroyed, as the Chinese government has sought to make the river navigable for ships. Some non-governmental organisations have appealed to the Chinese government to compensate people living downstream for the impact on their crops and on fishing. However, Beijing has responded that all its river development work has taken place on Chinese soil and that it therefore is not responsible for any impact downstream. Chinese policy is particularly important during the dry season, when the Lancang, as the Mekong is known in China, accounts for 50-70% of water flow at the mouth of the Mekong, a huge increase on the average 20% that it supplies.

This attitude highlights the lack of an international legal framework governing cross-border river development. The United Nations Convention on the Law of the Sea (UNCLOS) was introduced to lay down an accepted set of rules and behaviour on maritime development, so that disputes over maritime boundaries would not be exacerbated by conflict over the sovereignty of oil and gas resources, for example. Yet there is no similar international agreement on river developments that could help to avoid water resource disputes. It would be far better for the UN to work towards such a structure now than to wait until the Mekong and other river disputes escalate and vested interests become even more entrenched.

The lower riparian states complained about the impact of the construction of the Dachaoshan and Manwan dams in China, which were completed in 1995 and 2003 respectively, but a third dam, the Xiaowan project, is now under development and is scheduled for completion in 2010. The Xiaowan dam will be 292m high and investment of US$2.7B will provide generating capacity of 4.2GW, while another five major dams are planned, mainly for flood control and irrigation rather than power generation.

According to reports in Thailand, some vessels are currently taking weeks to complete a journey that should only take three days because dam construction in China has held back the entire river’s flow for up to five days at a time. This mirrors the shipping problems that attracted widespread coverage from the international media in 2004, when water levels of less than one metre left many vessels stranded. At that time, a regional drought was the main cause of the low water levels but the MRC insisted that Chinese dams had exacerbated the impact.

However, Chinese firms employed on the various hydro schemes do not believe that their dam projects will have a detrimental effect on lower riparian states. The chief engineer of the Yunnan Lancang River Hydropower Development Company, Ma Hongqi, said that a study on the impact of the Xiaowan dam concluded that the ‘Xiaowan project will have limited impacts on the lower reaches of the river. Instead, the dam project will help with irrigation and navigation in the lower reaches.’

A reservoir of 190km2 will be created by the Xiaowan, which Chinese officials believe will increase water flow to the lower reaches of the Mekong by up to 40%. A spokesperson for the Yunnan Lancang River Hydropower Development Company also indicated that a 20 year afforestation programme was launched in 1999 that should raise the proportion of forest cover around the Mekong in China from 38% to 50% by 2019. The company also insists that the water quality of the river meets international standards for drinking water.

The Mekong River Commission (MRC)

The MRC was set up to coordinate dam construction in the lower Mekong Basin, as it became clear that demand for water for power generation and irrigation could threaten the viability of the river. However, China and Myanmar have not joined the organisation, choosing instead to retain observer status, so there is an obvious restriction on the amount of leverage they have on dam construction further upstream. The organisation, which is headquartered in Phnom Penh, has appealed to the Chinese government for information on the operation of the Chinese dams, most notably during the 2004 drought, but Beijing is reluctant to release detailed information.

A breakthrough was made by the MRC in 2005, when Beijing agreed to hold technical discussions on the use of the river with the Commission. The main topics under discussion have been flood management and mitigation, plus navigation. Sitaheng Rasphone, the chairman of the MRC joint commission commented: ‘Those potential areas for collaboration seem to me particularly promising and remarkable. This dialogue is essential for our mutual understanding and to move further on our cooperation. The benefits of such collaboration will be at a basin wide scale.’

At last year’s MRC annual meeting with the Chinese and Myanmar authorities, Sin Nivy, the vice-chairman of the Cambodia National Mekong Committee, said: ‘The MRC has sought a continuous communication and consultation with China and Myanmar with a view to increase and enhance its cooperation and I am pleased to note that there is significant potential for further cooperation in a range of technical areas.’ Although both countries are still reluctant to join the organisation, some data is now shared between all countries in the Mekong Basin. In particular, the MRC secretariat began supplying China with monthly flow data from hydrological stations in Chiang Saen, Thailand and Stung Treng, Cambodia.

In May, the chief executive of the MRC, Olivier Cogels, argued that better information collection and sharing was key to mitigating the impact of flooding on the Mekong, whether or not it is caused by the Chinese dams. He said that inefficient early warning and flood forecasting systems resulted in deaths every year. Cogels added: ‘Our member countries have established or are establishing a range of actions to enable them to cope with these changes but they need the tools, data and information to help them make the right decisions.’ Securing detailed information on rainfall and water flow from China is particularly important and could enable the MRC to warn people in vulnerable areas of a flood risk days before the river begins to flood.

In December 2006, the MRC revealed that it would now attempt to put more effort into the thorny issue of settling cross-border disputes. In the short term, the organisation is to set up permanent structures for negotiation but any progress is likely to be slow, given that governments are obviously reluctant to hand over any measure of sovereignty or control over their natural resources. However, the four member countries – Cambodia, the Lao PDR, Thailand and Vietnam – have set up the Water Utilisation Programme (WUP), with the support of the World Bank’s Global Environment Facility (GEF).

Under the WUP, the four countries are to agree acceptable minimum monthly flows in the dry season; acceptable natural reverse flow of the Tonle Sap during the wet season; and prevention of peak flows greater than occur naturally. Once agreed, a string of hydrological stations will be constructed along the river to monitor these flows and levels, with MRC member states required to alter the use of their dams if the agreed measures are not met. Cogels commented: ‘We now have a very good consensus to support our work over the next five years. Now we have to get to work on implementing our integrated programme in order to bring benefits the people of the Mekong Basin.’

While MRC’s progress to date may seem slow, the Commission has secured a great deal of financial support from foreign donors over the past couple of years. Most recently, in April this year, the United States Agency for International Development (USAID) agreed to back MRC efforts to tackle cross-border disputes in the Mekong Basin. Although the value of the support was not announced, the MRC revealed that it will enhance effective regional cooperation through the ‘development of dispute resolution and compromise mechanisms such as co-management, public participation, stakeholder involvement and institution building.’

Cogels welcomed the support and said: ‘The people of the Mekong Basin need to make better use of their water resources if they are to meet their goals of poverty alleviation, but they are aware of the necessity of careful planning and consultation prior to this development. With this new programme we will be better equipped to help our members dispel any potential transboundary issues before they arise.”

In April, the Swedish government agreed to provide US$6.4M over the period 2007-09 to support the Environment Programme, the Basin Development Plan, the Fisheries Programme and general institutional support. This came just two months after Finland signed an agreement to supply $8.6M to fund the MRC’s new Information and Knowledge Management Programme and Denmark has also agreed to provide US$9M for similar purposes.

Support for power sector integration

In addition, the World Bank and the Asian Development Bank (ADB) are now playing a role in supporting the MRC. Their involvement partly stems from their support for specific hydroelectric schemes in the region. For example, the ADB has provided a loan of $20M to support the 1070MW Nam Theun II scheme in the Lao PDR on a tributary of the Mekong. Most electricity from the venture will be exported to Thailand but a significant proportion will be retained for domestic use.

In a recent report on the project, the ADB and World Bank welcomed efforts to strengthen the financing of the scheme and to mitigate its social and environment impact. However, they criticised the levels of erosion and provision of compensation to affected communities. The operating company, Nam Theun II Power Company, has a 31 year power supply contract that should ensure the financial success of the venture.

The World Bank has also given the government of Cambodia a US$18.5M grant to encourage cross-border trade in electricity in the Mekong Basin. The grant will fund a feasibility study for an undisclosed hydroelectric scheme and the construction of a transmission line from Cambodia to southern Lao PDR that will enable Cambodia to import electricity. Additional funding is also being provided via a US$22M loan from the Japan Bank for International Cooperation (JBIC).

A second interconnector could also be developed from Cambodia to Vietnam to allow surplus electricity to be exported. By developing a comprehensive regional power grid it is hoped that relatively power poor countries like Cambodia can encourage investment in new hydro schemes, as potential investors will be able to export electricity to neighbouring markets if required. Similar multilateral support in Vietnam has already encouraged some private sector investment in the country’s hydro sector.

Cogels welcomed all the support and commented: ‘Finland understands the importance of MRC having a comprehensive and reliable knowledge base in order to provide the right kind of information for our Member States to undertake sustainable development of their water and related resources, in order to alleviate poverty. The MRC has already established a solid foundation with its current databases, but we now need to build on this if we are to achieve long term basin planning which will be of benefit to the people of the basin, while ensuring the ecological balance is maintained.’

Greater cooperation on dam development and sharing water supply information among the member states of the MRC is certainly to be welcomed. International rivers are always more prone to resource disputes and creating a permanent mechanism for negotiation, cooperation and data sharing is a positive step forward that has obviously been backed financially by the international community. However, the ultimate goal of both the MRC and the international community must be to bring Myanmar and particularly China into the organisation.

That Beijing has accepted observer status is a step in the right direction and some progress has been made on sharing information with China. Yet the Chinese government continues to press ahead with dam construction in the face of strong regional opposition. By joining the MRC and addressing the concerns of the lower Mekong Basin states, Beijing would at least show that the concerns of the lower riparian states are of interest. Whether it can reduce the number of dams planned or help to minimise their impact remains to be seen, but no river basin management organisation can be truly effective when the upper basin states remain outside the management process.

The Mekong River Commission in brief

Formed on 5 April 1995 by a treaty between the governments of Cambodia, the Lao PDR, Thailand and Vietnam, which agreed on joint management of their shared water resources and development of the economic potential of the river. China and Myanmar became dialogue partners of the MRC in 1996 and the countries now work together within a cooperation framework. The MRC is an international, country driven river basin organisation that provides the institutional framework to promote regional cooperation in order to implement the 1995 agreement.

The organisation has four aims for 2006-10
* To promote and support coordinated, sustainable, and pro-poor development;
* To enhance effective regional cooperation;
* To strengthen basin wide environmental monitoring and impact assessment;
* To strengthen the integrated water resources management capacity and knowledge base of the MRC bodies, national Mekong committees, line agencies, and other stakeholders.
Source: MRC