Addressing Inequities and Injustices in Hydropower Development in Nepal: Lessons from Abroad

Shyam K Upadhyaya

Equitable Hydro Working Paper 8

January 2006

Addressing Inequities and Injustices in Hydropower Development in Nepal: Lessons from Abroad

Shyam K Upadhyaya

Equitable Hydro Working Paper 8 January 2006

Shyam K. Upadhyaya is Research Fellow, Winrock International, Nepal Views expressed herein are the personal opinions of the author and do not necessarily reect the views of Winrock International or of the donor agency supporting the Program, viz the Ford Foundation. No part of the material protected by this copyright notice may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system without written permission from the copyright owner

Price: NRs. 150 Published by Winrock International

P. O. Box 1312 Kathmandu, Nepal Telephone: 4467087 Fax: 977-1-4476109 Email: winrocknepal@winrock.org.np Website: www.winrock.org.np

Copyright 2005 by Winrock International All rights reserved. Published in 2005 Printed in Nepal ISBN # 999 46-861-0-0

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Acknowledgments

This study gratefully acknowledges support of the Ford Foundation under the Equitable Hydro Program. Thanks are also due to Joe Newman, Claudio Moises Ribeiro, Aurelio Souza, and Alejandro Bango for facilitating trip to Brazil. Thanks also to Shripad Dharmadhikary, Alok Agrawal, and Chittraoopa Palit for facilitating trip to Narmada valley and Mona Sharma for editing this paper. Any remaining errors are mine. Shyam K. Upadhyaya Research Fellow

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CONTENTS
1. INTRODUCTION 1.1 Background 1.2 Study Methodology 1.3 Organization of The Report 2. BENEFIT SHARING WITH UPSTREAM WATERSHED COMMUNITIES: EXAMPLES FROM COSTA RICA AND COLUMBIA 2.1 Costa Rica 2.2 Columbia 3. HYDROPOWER BENEFIT SHARING PRACTICES IN BRAZIL 3.1 Sharing Hydropower Royalty 3.2 Resettlement Experience of Uhe Luiz Eduardo Magalhaes Hep 3.3 Itapu Binacional Hydropower Station 4. MAKING UP FOR PAST INJUSTICES: GRAND COULEE DAM OF THE UNITED STATES 5. ORGANIZING FOR JUSTICE: NARMADA BACHAO ANDOLAN (NBA) OF INDIA 5.1 The Plight of Narmada Valley 5.2 The Birth of Narmada Bachao Andolan 6. INVOLUNTARY RESETTLEMENT INITIATIVES OF THE PEOPLES REPUBLIC OF CHINA 7. RECOMMENDATIONS FROM THE WORLD COMMISSION ON DAMS (WCD) 8. SUMMING UP REFERENCES ANNEX 1: ROLL ON COLUMBIA BY WOODY GUTHRIE TABLE Table 1: PES Contracts with the Hydropower Developers of Costa Rica BOX Box 1: Box 2: Brazilian Movement of Dam-Affected People (MAB) Operating micro-hydro in a socially responsible way 8 9 5 1 1 2 2

3 3 6 7 9 10 11 13 15 15 17 21 23 25 28 30

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Acronyms and Abbreviations

ANA ANEEL BPA CBP CCT FONAFIFO FUNDECOR Agencia Nacional de Aguas, or National Water Agency Agencia Nacional de Energia Electrica, or Brazilian Electricity Regulatory Agency Bonneville Power Administration Columbia Basin Project Colville Confederated Tribes National Fund for Forest Financing Foundation for the Development of the Central Volcanic Cordillera, or Fundacion parael Desarrollo de la Cordillera Volcanica Centra GCD HEP IBAMA MAB NBA NCA NGO NWDT PES RUPES WCD Grand Coulee Dam Hydroelectricity Project Brazilian Environment Institute Brazilian Movement of Dam - Affected People Narmada Bachao Andolan Narmada Control Authority Non-Governmental Organization Narmada Water Dispute Tribunal Payments for Environmental Services Rewarding Upland Poor for the Environmental Services World Commission on Dams

Addressing Inequities and Injustices in Hydropower Development in Nepal: Lessons from Abroad
1. Introduction
1.1 Background Previous research under Winrock Internationals Equitable Hydro and other programs have found that hydropower development in Nepal has led to inequities and injustices. There have been inequities in the distribution of costs and benets of hydropower development. While some regions and groups of population have suffered from hydropower development, the benets have gone to entirely different areas and groups. Consequently, although Nepal has recognized hydropower as a major resource for national development, hydropower has failed to make much impact on economic development and poverty alleviation. Several issues have been identied. Firstly, hydropower projects lead to the displacement of many communities. Such displacement disrupts age-old ways of life and livelihoods of these people. Resettlement and rehabilitation of displaced households poses a signicant problem. There is lack of adequate land to resettle these households. People are often paid cash compensation. They are not compensated for common property resources which formed an important part of their livelihood in previous locations. People are unable to replace their lost property with the compensation money. Since many of the displaced households were not used to handling cash before, they did not know how to make good use of money. Resettlement also causes the destruction of social capital of displaced people. Consequently, many displaced households have become socially and economically marginalized.1 Secondly, hydropower projects (HEP) have also made adverse impacts in areas downstream of the HEPs. For example, the construction of dams causes scarcity of irrigation and drinking water in downstream areas. The drying of rivers has changed microclimates, adversely affected religious and cultural sites, and diminished the aesthetic beauty of downstream areas. Livelihoods of people have been destroyed. Unfortunately, hydropower developers do not even recognize such communities as affected people. Similarly, people affected by the construction of transmission towers, transmission and distribution lines, roads, and canals have been ignored.2

1See Upadhyaya and Sharma (2004). 2See Upadhyaya (2004).

Thirdly, people living upstream of hydropower projects have suffered from the degradation of forests and other natural resources. The acquisition of land and other resources in the construction sites have put additional pressures on the remaining natural resources in upland areas. Conversely, people living in upland watersheds are providing valuable environmental services that benet hydropower plants without receiving any compensation for their services.3 Fourthly, there are concerns that the development of hydropower has benetted areas already developed. Remote and inaccessible areas with high incidence of poverty have not received any benets from hydropower development. These challenges are hindering the full hearted development of Nepals most promising means of further progress: hydropower. Yet it is not only Nepal that has had to wrestle with this two-edged sword. Other hydropower developing nations have encountered, and learnt to manage, similar problems at various stages of development. Earlier studies in this series examined past experiences of hydropower projects in Nepal and identied conditions promoting equitable distribution of costs and benets of hydropower projects among various stakeholders in society. This study reviews experiences of other countries in dealing with problems of equity and justice in hydropower development, and derives some lessons for Nepal from them. 1.2 Study Methodology The methodology of the study consisted of review and analysis of available secondary literature. Brief eld visits were made to hydropower sites in Brazil, India, and the United States. Review of experiences were guided by the authors exposure to problems related to equity and justice in hydropower development in Nepal and is not meant to be comprehensive. The depth of review was also limited by the availability of resources. 1.3 Organization of the Report The remaining part of the paper is organized as follows. Section Two discusses Costa Rica and Columbias experience in sharing hydropower benets with upland communities. Section Three examines Brazils experience. Section Four reviews the Grand Coulee dam experience in the United States. Section Five reviews the Narmada valley experience of India. Section Six discusses resettlement initiatives of the Peoples Republic of China. Section Seven summarizes the main recommendations of the World Commission on Dams (WCD). The nal section sums up lessons for Nepal.

3See Upadhyaya (2005).

2. Benet Sharing with Upstream Watershed Communities: Examples from Costa Rica and Columbia
As stated earlier, communities residing in the watershed upstream of a hydropower plant can provide valuable environmental services that inuence longevity and efciency of these plants. For example, forest preservation and other conservation measures undertaken by these communities may reduce sedimentation and regulate water-ow to hydropower plants located downstream. Hydropower developers in countries such as Costa Rica and Columbia have begun to recognize such services and provide compensation to upland communities. 2.1 Costa Rica Costa Ricas Forestry Law 7575 enacted in 1996 recognizes that a forest ecosystem provides the following four environmental services: carbon sequestration, hydrological services, biodiversity conservation, and landscape beauty.4 Following the enactment of the above law, Costa Rica has tried to create markets for environmental services where beneciaries of environmental services would compensate suppliers of such services. In the early 1990s, Costa Rica had established a National Fund for Forest Financing, or Fondo Nacional de Financiamiento Forestal (FONAFIFO) to deal with rapid deforestation problems in the country.5 FONAFIFO encouraged farmers to conserve forests by providing incentives in the form of subsidies. In 1996, FONAFIFO was formalized and given the responsibility to implement environmental service programs. Under the environmental service program, FONAFIFO collects funds from the beneciaries of environmental services such as hydropower developers and contracts landowners for conservation. FONAFIFO pays $42.0 per hectare per year to landowners for forest conservation. Such payments are known as Payments for Environmental Services (PES). Landowners participating in the PES program prepare a management plan for their forest lands. The plan describes the biophysical condition of the land, a monitoring schedule, action for the prevention of forest res, illegal harvesting, and illegal hunting and needs to be certied by a licensed forester. The contract is usually made for a period of ve years and is renewable for up to 20 years. The contract is entered in the deeds of landowners property. In case landowners sell property, the property buyers are obliged to continue the process by honoring the contract.6 A number of hydropower developers have participated in this program so far. Table 1 lists three PES contracts between hydropower developers and FONAFIFO, and one PES contract between a hydropower developer and a non-governmental
4 See Upadhyaya (2005) for the denition of these services.. 5 FONAFIFO is placed under the Ministry of Environment and Energy (MINAE). 6 See Pagiola (2002).

organization (NGO). Two hydropower developers that have made PES contracts with FONAFIFO are privately owned and one is state owned. All of these PES contracts are largely based on the prevailing conviction in Costa Rica and in other Latin American countries that forest conservation regulates water ow and reduces sedimentation in downstream water bodies. One of the participants of this program is Energia Global, a private hydropower developer that owns two run-of-river HEPs Don Pedro (14 MW) and Rio Volcan (17 MW). These HEPs have small reservoirs that can hold just enough water to operate power plants for about ve hours. When the reservoir becomes full, water spills over. For this reason, hydropower developers value regularity of water ow more than the total volume of water. Although no scientic investigations were conducted, the hydropower developer believes that forests in the watershed help absorb rain water beneath the ground and release it in dry season, ensuring regular ow of water to the reservoir downstream. The hydropower developer also believes that forest conservation reduces sedimentation in the reservoir.7 Energia Global pays US$10.00 per hectare per year as well as administration costs to FOFAFIFO through Foundation for the Development of the Central Volcanic Cordillera, or Fundacion para el Desarrollo de la Cordillera Volcanica Central (FUNDECOR), a non-governmental organization. FUNDECOR handles applications from prospective land-owners, sign contracts, and monitors implementations. Similarly, another private hydropower company, Platanar SA, pays US$10 per hectare per year to landowners with land titles and US$30 per hectare per year to landowners without land titles. State owned hydropower developer, Compania Nacional de Fuerza Y Luz (CNFL), pays US$42 per hectare per year for watershed conservation.

7 See Chomitz, Brenes, and Constantino (1998).

In all of the three cases above, landowners with land titles who participate in the conservation program receive a standard payment of US$42 per hectare per year. This level of payment to landowners is determined not on the actual value of hydrological services received by hydropower developers, but on what the landowners would have earned if they were to convert forests to pastureland or other alternate uses. Prior to the establishment of the PES scheme, FONAFIFO used to pay US$40 per hectare per year as subsidy to farmers participating in the conservation program. After the introduction of the PES concept, FONAFIFO assumed that the value of four environmental services generated by forest conservation would be about US$40 per hectare, and since hydropower developers beneted from only one of those environmental services (hydrological services) they were charged only $10 per hectare (one-fourth of the total). FONAFIFO paid the remaining US$32 per hectare to farmers from funds collected from other sources such as gasoline taxes. In another case, a hydropower developer, La Manguera SA, has made a direct contract with a NGO, Monteverde Conservation League, which owns the watershed forest. As per the contract, the hydropower developer pays US$10 per hectare per year to the NGO to maintain forests in the watershed. There is no involvement of FONAFIFO in this case.

Table 1: PES Contracts with the Hydropower Developers of Costa Rica

Hydropower Developer PSA Program Energia Global Rio Volcan Rio San Fernando Rio Platanar Rio Aranjuez Rio Balsa Lago Cote La Esperanza 3,466 2,404 3,129 9,515 18,926 1,259 10 10 10/30 42 42 42 10 Watershed Area (ha) Payment Rate (US$/ha/year)

Platanar S A CNFL

Others La Manguera SA
Source: Pagiola, 2000.

2.2 Columbia Columbias National Law 99 (promulgated in 1993) and decree 1933 (promulgated in 1994) require that hydroelectricity projects exceeding 10 MW capacity pay 6 percent of their gross sales revenue to watershed management agencies and municipalities in the project area. 50 percent of such revenue transfer (3 percent of project revenue) are to be given to watershed management agencies in the project area. In Columbia, regional autonomous corporations are responsible for watershed management. Watershed management agencies must use such funds for protection of the environment in watersheds upstream of hydropower dams and other areas affected by hydropower construction. Municipalities bordering the reservoir receive another 25 percent of revenue transfer (1.5 percent of project revenue). The remaining 25 percent of revenue transfer (1.5 percent of project revenue) must go municipalities located in watersheds upstream of hydropower dams. Municipalities must use such revenue to fund infrastructure projects identied in municipal development plans.8 Columbia also has a law that requires water-based investors to allocate 1 percent of investments in water related projects for the protection of relevant catchments.9

8 See Milewski, Egre, and Roquet (1999); and Egre, Roquet, and Durocher (2002). 9 Landell-Mills, N. and I. Porras (2002).

3. Hydropower Benet Sharing Practices in Brazil

Hydropower constitutes more than 90 percent of the installed electricity generation in Brazil. Development of hydropower resources was introduced in and accelerated in the 1889.10 Private sector participation has increased since the 1980s. At present, the private sector accounts for 90 percent of distribution, 10 percent of transmission, and 30 percent of generation. Major national level agencies responsible for the development of hydropower are Agencia Nacional de Aguas (National Water Agency (ANA)), Agencia Nacional de Energia Electrica (Brazilian Electricity Regulatory Agency (ANEEL)), and Brazilian Environment Institute (IBAMA). Academic organizations such as the Department of Energy Optimization and the Institute of Urban and Regional Research and Planning at the Federal University in Rio de Janerio also play an important role by conducting research and analysis in different aspects of hydropower development. Most of such research is funded by the government. Discussion with various stakeholders indicated the following:11 In recent years, regulations related to environmental impacts of hydropower projects have become more stringent in Brazil. Hydropower developers are required to do environment impacts assessment and present impact mitigation plans. Environmental management plans need to be approved by the Ministry of Environment before license to construct HEPs are issued. Hydropower developers themselves pay for environmental impact assessments, but the consultants selected for such analysis need to be registered with IBAMA. Socio-economic and cultural aspects of the environment are given less emphasis than bio-physical aspects, although such issues are receiving increasing attention recently. While there is no law that requires a particular percent of investment to be spent on socio-economic issues, developers need to satisfy local stakeholders, and IBAMA monitors compliance once the developer agrees to a plan. In spite of progressive environmental regulations, implementation of environmental laws and regulations is inadequate largely as environmental agencies are usually understaffed; monitoring and evaluation of environmental commitments are also weak. Basin level committees which are represented by users, governments (state and local), and non-governmental agencies ensure that interests of all relevant stakeholders are represented in the development of water resources. ANA determines the minimum level of downstream ow of water in hydropower projects. Local benets provided by hydropower developers depend on negotiations between local stakeholders and developers. In some cases, about 70 percent of the total employment in HEPs go to local people.
10 11 See Scarpinella, Claudio Antonio,1999 These discussions were held during 9th to 16th August 2004.

 Support organizations such as church groups, the Brazilian Movement of Dam-Affected People (MAB), and other non-governmental organizations play pivotal roles in empowering local communities by providing timely information (See Box 1). The Brazilian government targets universal access to electricity by all Brazilians by 2008. There are 450 small HEPs (1 to 30 MW) generating about 3,015 MW of electricity in Brazil. Federal University of Itajuba in Minas Gerais is designated as the focal center for small HEPs. This University conducts research and training in various aspects of small hydropower development. Micro-hydro plants have also played important role by supplying power to isolated regions and private estates (See Box 2).

Box 1: Brazilian Movement of Dam-Affected People (MAB) The Brazilian Movement of Dam-Affected People (MAB) is an organization of people affected by dam construction in Brazil. This is the only national level movement of dam-affected people in the world and began in the 1980s. MAB was formally established in 1991, and helps displaced people secure the compensation they deserve. MAB also occasionally protests construction of hydropower projects with high adverse impact potential. MAB works to broaden the concept of affected people to include downstream population, people overlooked during relocations, those who have moved elsewhere after the construction, and other victims who are not included in the current denitions of affected people. MAB also ghts to secure reparations for those victimized by dams in the past, under the principle that no new dams should be built without compensating people already affected by existing dams rst.
Source: Based on conversation with Favia Braga at the Federal University of Rio de Janeiro on 9th August 2004.

Box 2: Operating micro-hydro in a socially responsible way Luis Carlos owns 219 hectares of forest land near the town of Itajuba in Brazils Minas Gerias state.12 This private property is home to seven water falls. Mr Carlos has installed a 25 kw microhydro using water from one of the falls. He utilizes this electricity to operate a saw-mill to make furniture from trees on his own estate. Mr. Carlos wishes to close the saw-mill down and focus on eco-tourism, using hydropower to generate electricity for lodges and restaurants. He has also constructed a series of sh ponds using water coming from the tailrace of the hydropower plant. Mr. Carlos said that he is using only one-third of the total water in his property for the power plant. He has allowed another one-third to ow on downward through his neighbors lands; the remaining third ows on further downstream. Mr. Carlos does not wish to rear cattle in his ranch as his neighbor is already doing so. He feels it would be better to work in synergy with his neighbor by buying beef for his restaurants. Source: Field visit to Carlos estate on 10th August 2004

3.1 Sharing Hydropower Royalty As per Brazilian law, hydropower projects with an installed capacity of over 10 MW are required to pay 6 percent of revenue as royalty to the government. The government distributes royalty as follows: state housing the hydropower plant 45 percent; municipalities affected by the construction of hydropower plants 45 percent; federal regulatory agencies associated with electricity sector 8 percent; and the Ministry of Science and Technology 2 percent.13 In cases where a hydropower project affects more than one municipality, municipalities share of royalty is distributed on the basis of proportion of area ooded by hydropower reservoir. It is quite remarkable that the central government of Brazil retains only 10 percent of hydropower royalty. This is in stark contrast with Nepal where the central government, till recently, retained 90 percent of hydropower royalty.14 However, eld visits in Brazil revealed concerns that hydropower royalty is not reaching communities actually affected by hydropower. Brazilian law does not dictate how municipalities should spend royalty money, except to state that the money may not be used for salary and debt payments. Consequently, affected
12 13 14 The following account is based on eld visit on 10th August 2004. There are 26 states and 1 federal district in Brazil. The second amendment of Local Self-Governance Regulations published in Januaary 2005 increased the share of hydropower royalty going to districts from 10 to 50 percent. See Upadhyaya (2006).

communities protest that municipalities are not spending money specically for their development. The wisdom of allocating royalty to municipalities on the basis of proportion of area ooded by reservior is also sparking debates recently, as this rule excludes many downstream municipalities affected adversely by construction of hydropower, but without direct links to the reservoir.15 3.2 Resettlement Experience of Uhe Luiz Eduardo Magalhaes HEP Uhe Luis Eduardo Magalhes HEP, located in Tocantins state near Palamas, boasts its handling of socio-economic and environmental problems. This HEP has an installed capacity of 902 MW. Before displacement, people living near the Tocantis River were poor.16 Land quality was poor. Their children did not have adequate access to schools. Upon construction of the HEP, displaced people were given two choices: they could take land for land or take cash compensation. 95 percent of households opted for cash compensation. In general, families who took cash compensation are worse off compared to families who took land for land. Displaced households also had the choice to resettle in urban or rural areas. 365 families were resettled in rural areas, and 460 families in urban areas Initially, the project considered allocating 4 hectares to each displaced family. However, when the quality of land was considered it was felt that 4 hectares would not be adequate to sustain a family. Subsequently, 10.5 hectare of land was allocated to each family. This decision was made through negotiations between the developer, affected peoples, and representatives of the Brazilian Movement of Dam Affected People (MAB). The negotiation team of the developer included sociologists, social workers, and agricultural engineers. According to the HEP Manager, MABs role in this negotiation was pivotal and, with the exception of a few households, for the majority of displaced households lives have changed for the better after resettlement. The relocation resulted in varied social impact on different groups of people. While older generations were very unhappy about having to relocate, younger adults were open to the idea. Younger children were happy as the resettlement sites were nearer the cities. The HEP Manager states that the success of a resettlement program depends on two factors. First, affected people should be registered accurately before the initiation of the project. Second, the rights of the affected people and the developers should be properly dened. The developer has tried to minimize losses due to the relocation by replicating all structures in the original site as far as possible. It even rebuilt an articial
15 16 See also La Rovere and Mendes (2000). The following account is based on eld visits in the hydropower affected areas and discussion with several

stakeholders including affected people, hydropower developer, and Ecologica Institute during 13th and 14th August ,2004.

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island town when the original island town was submerged by the reservoir. Basic facilities such as drinking water, church, community center, health center, roads, playground, etc. have been provided in resettlement sites. The construction of the dam has created recreation opportunities along the sides of the reservoir. The HEP has built two beaches, while the municipality has built another one along the sides of the reservoir. The developer also reforested about 300 hectare of land, and say they have already spent about 20 percent of the total project cost to deal with social and environmental problems; there are also plans to continue some environmental programs in the future. Furthermore, the developer says it pays a substantial sum of money as royalty to the government. The problem is that the government does not spend royalty money for the affected people. When the HEP built schools in resettlement sites, people did not have money to pay for teachers and approached the developer for additional money. It was only when the developer informed the local community about the royalty paid to the government that locals began demanding royalty from the government. About 4,000 people got employment during the construction period. There are currently about 200 locals employed in the operation and maintenance phase. General feedback from locals is positive. One resettled farmer who used to work for the landlord before displacement said he is now himself the owner of 6 hectares. He said when his family rst moved to the resettlement area, they were very uncomfortable as the culture was different and they did not have any friends nearby. Overtime, his family gradually adjusted to the new place, and now prefer the relocation site over their previous home. They are also better off economically. A local NGO known as Ecologica Institute has played a signicant role in the rehabilitation of resettled communities. Before displacement, many farmers cultivated river ood plains. The soil in such places is high in nutrient content, so farmers did not need to use chemical fertilizers. The soil in the new location was not as productive, and farmers needed to use chemical fertilizers. Moreover, facilities such as energy services, roads, irrigation canals were introduced in the relocation site soon after, and people had to be taught how to use them. Ecological Institute provided this important post-construction support to the community by launching various awareness building and educational programs. 3.3 Itapu Binacional Hydropower Station With an installed capacity of 12,600 MW, and 18 generating units of 700 MW capacities each, Itapu Binacional is the largest hydroelectric power station in the world. Project construction started in 1975, and the rst unit started generating electricity in 1984. In 1997, it was decided to add two additional units of 700 MW each, increasing total generation capacity of the hydropower station to 14,000 MW.
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This project is a joint venture between Brazil and Paraguay, and utilizes water of a border river - the Parana. Electricity generated by this station is to be shared between Brazil and Paraguay. Paraguay consumes only about 10 percent of its share of electricity and exports 90 percent to Brazil. The electricity generated by this station alone meets 91 percent of Paraguays, and 25 percent of Brazils electricity needs . Itapu project has beneted local communities in several ways. Firstly, it pays a substantial amount of royalty to the governments of Brazil and Paraguay. The Brazilian government shares royalty with 16 municipalities in the vicinity of Itapu power station. In Brazil, the royalty is distributed on the basis of proportion of area ooded by the project. Project ofcials said they have no control on how the municipalities spend money. Recently, communities are putting pressure on municipalities to spend money in affected areas. Itapu project is also trying to extend royalty distribution to more municipalities in the basin. If it succeeds, a total of 29 municipalities in the basin will receive royalty in future. Secondly, Itapu has also spent a substantial amount of money on environment enhancement programs. The budget for 2004 was US$8 million. Level of investment uctuates somewhat depending on the HEPs nancial condition of Itapu. Together with other partner organizations, the developers were spending about $14 million in environmental programs. About 154 staff have been employed in environmental enhancement programs in the Brazilian side alone.17 Partner organizations employ another 150 staff. Examples of projects supported include: promotion of medicinal plants, organic farming, sh farming, and environmental education programs to raise peoples awareness of conservation education. The project also has a program that employs school children for activities such as gardening, where children learn about conservation while earning some income to support their schooling. Thirdly, Itapu attracts a large number of tourists in the area every year. This has increased business opportunities for local entrepreneurs and generated employment for local people.

17

Total post-construction employment in Itapu Power Plant is 3,000.

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4. Making up for Past Injustices: Grand Coulee Dam of the United States
Grand Coulee Dam (GCD) is one of several dams constructed on the Columbia River in northwestern United States. This is a multipurpose project built with the objectives of controlling oods, regulating water ow, irrigation, navigation, recreation, and hydropower. Grand Coulee Dam is 170 m high and 1.609 km long. This has created a reservoir (Lake Roosevelt) that is 243 km long, covers an area of 33,300 ha and has a storage capacity of 11,600 cubic meters. With an installed capacity of 6,809 MW, Grand Coulee is the largest producer of hydroelectricity in North America, and is the third largest producer in the world. The power generation structure consists of a Left Power Plant (1,155 MW), a Right Power Plant (1,125 MW), a Third Power Plant (4,215 MW), and a Pump Generator Plant (314 MW). Construction of the Grand Coulee dam started in 1933. Electricity generation began in 1941; by 1951, the rst phase of construction was completed with the construction of left and right power plants and irrigation infrastructures. In 1967, the construction of the Third Power plant was started and completed in 1975. GCD was built during the Great Depression (1929-41) when unemployment was very high in the United States. Employment generation was therefore a major motivation for building this project. At the peak of construction, about 8,000 people were employed. Another 3,000 were employed to clear land to be ooded in the reservoir site. From 1933 to 1941, about 44 million man-hours were spent on GCD construction; about $43 million was paid as wages. The availability of electricity from the GCD encouraged the growth of aluminum, aircraft and other new industries in the Washington and other adjoining states in the northwest region of the United States. However, there were inequities and injustices in the distribution of dam benets and costs. GCD displaced about 3,000 to 4,000 non-indigenous people, as well as 2,000 members of the Colville tribe, and between 100 and 200 of the Spokane tribe.18 The reservation of Colville Confederated Tribes (CCT) which consists of 12 different bands of native Indians (Wenatchi, Entiat, Chelan, Methow, Okanogan, Nespelem, San Poil, Lakes, Moses, Palus, Nez Perce, and Sweelpoo) borders parts of Lake Roosevelt in Columbia River. Similarly, the Spokane tribe reservation borders parts of Lake Roosevelt in Columbia and Spokane rivers. The dam also hurt a major source of livelihood, shing, of people living upstream by obstructing the passage of sh. Anadromous sh like salmon and steelhead hatch in fresh water, spend most of their life in salt water, and then return to the original fresh water for spawning. GCD blocked the passage of shes from the sea to upstream of the dam. As compensation for the land, Colville tribe
18 Colville and Spokane reservations were created in 1872 and 1877 respectively by the executive orders of the President

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received $63,000 and Spokane tribe received $4,700. Although the compensation received by Native Indians was similar to that given to non-indigenous people, Native Indians received compensation much later. Affected people were never consulted. Resettled communities had to wait 30 years for telephone connections. Although communities were promised free electricity, they never received it.19

Tribal people were clearly not happy with compensation arrangements and continued to express their discontent. In 1946, an Indians Claims Commission was created to adjudicate Indian claims. Indian Claims Commission awarded $3.3 million to Colville tribes in 1978 as compensation for lost sheries. The Commission awarded $6.7 million to Spokane tribe in 1967 as additional compensation for ceded land and general accounting claims. Coleville tribe had also led a case claiming compensation for lost water power. Through the Confederated tribes of Colville Reservation Grand Coulee Dam settlement Act (P. L. 103-436, November 2, 1994), the Colville tribe received a lump sum payment of $53 million for lost hydropower revenues and beginning in 1996, annual payments that have ranged between $14 million and $21 million for their water value claim.20 Annual payments are to continue as long as the HEP remains functional. The Spokane tribe is also trying to secure such payments. The close interaction between the GCD and the surrounding local communities is enviable. The GCD area has emerged as a major attraction for tourists. From the beginning, the dam developer has made intense efforts to woo local communities and power consumers. The GCD Visitor Centre includes educational exhibits, documentary movies about the Columbia River, oods, and the building of GCD highlighting benets provided by GCD. The Centre also pays respect to workers killed during construction by listing their names on the walls of the center. The 35-minute laser light shows beamed onto the face of the mile-wide dam telling the story of the Columbia River and GCD construction enthralls visitors. Created in 1937, Bonneville Power Administration (BPA), the agency, responsible for selling power generated by GCD, hired a folk singer from Oklahoma, Woody Guthier, to write songs on Columbia River and GCD. One of the songs written by Guthier became so popular that it has been adopted as the state song of Washington State (Annex 1). This is in stark contrast with the hydropower developers in Nepal who are detached with the local communities. Currently, the local socio-economy is closely intertwined with GCD. Many local people including members of the Colville and Spokane tribes earn their living by running recreational enterprises at the banks of Lake Roosevelt. Six pumps directly connected to Left Power Plant lift water from Lake Roosevelt and irrigate a vast tract of semi-arid lands in the Columbia Basin. The availability of water has not only increased agricultural production in the Columbia Basin, but has also created opportunities for recreational enterprises by creating several lakes and reservoirs.
19 See Ortolano et al (2000). 20 See http://www.gao.gov/htext/d04125t.html.

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5. Organizing for Justice: Narmada Bachao Andolan (NBA) of India

Hydropower constitutes about 25 percent of electricity generation in India. By March 1998, India had total electricity generation capacity of 89,000 MW, of which 21,891 MW was hydropower (about 25 percent of the total) generated. About two-thirds of hydropower are based on storage schemes, and one-third are run-of-river.21 The Narmada River originated from the Maikal ranges at Amarkantak, 1057 m above sea-level, now in Shadhol district of Madhya Pradesh in mid-western India. It ows through Madhya Pradesh, Maharashtra, and Gujrat before joining the Arabian Sea. The distance from its origin to its conuence at the Arabian sea is about 1,312 km. Narmada Valley Development Plan (NVDP) has proposed construction of 30 big dams, 135 medium dams, and 3,000 small dams along the Narmada and its tributaries. 5.1 The Plight Of Narmada Valley The construction of dams has converted a free owing river into a series of reservoirs. The rst big dam constructed in the Narmada River is Bargi dam near Jabalpur of Madhya Pradesh. Construction of this dam started in 1974, and was completed in 1990. With a height of 69 m and length of 5.4 km, this dam has created a reservoir 75 km long and 4.5 km wide submerging land in Jabalpur, Mandla, and Seoni districts of Madhya Pradesh. This is a multipurpose project with hydropower and irrigation components. The installed capacity of the hydropower plant is 105 MW. This dam has affected 162 villages, out of which 82 were completely submerged. About 7,000 families were displaced, 43 percent of whom were tribal. Many people displaced by the dam were consequently forced to work in the slum areas of Jabalpur city. Sardar Sarovar, with a proposed height of 138 m, is another big dam being constructed in Narmada River. This project is expected to irrigate about 48,00,000 hectares of land, provide drinking water to 40 million people in 5,725 villages and towns, and generate 1,450 MW of electricity. The reservoir will submerge about 600,000 hectares of land, out of which 200,000 is agricultural land. About 100,000 people living in 245 villages (193 in MP, 33 in Maharastra, and 19 in Gujrat) will be affected by the reservoir alone. The project will hurt several thousands of shermen in the downstream areas. About 140,00 farmers will be affected by construction of the canals.
Indira Sagar dam is another mega dam in the Narmada River. With height of 267 m and reservoir size of 913 square kilometer, it is the largest reservoir in India;
21 See Rangachari et al (2000).

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it has submerged 252 villages. The installed capacity of this hydropower plant is 1,000 MW. Indira Sagar Dam is built by Narmada Hydroelectric Development Corporation (NHDC), which is a joint venture between National Hydroelectric Power Corporation and the Government of Madhya Pradesh. To get some idea of how people displaced by the Indira Sagar dam are doing, interactions were held with one resettled community.22 New Harshud (Chanera) is one resettlement site where people displaced from Harshud village were resettled. Discussions with displaced people in New Harshud indicated that the hydropower developers, NHDC, have not fullled their promises. For example, people were promised they would be paid Rs. 50,000 if they demolished their houses in old Harshud and built new houses in New Harshud by a certain date (before Dipawali); they never received the money. People said this false promise from the developer resulted in unnecessary investment in house construction, leaving little money for livelihood restoration. They were also promised free electricity for the rst 6 months of their resettlement in New Harshud, but did not receive that either. Many people said they are denitely worse off now than before relocation. There arent many jobs in their new location, and communities couldnt pursue their previous occupation farming - in their new settlement. As this resettlement site is quite far from the project construction sites, these people have beneted very little from employment opportunities created by the dam project. Man dam, with a height of 301 m, is another large dam built in the Narmada valley. This dam was built specically to provide water for irrigation. Although ofcial records state that 827 families in 17 villages were affected by this dam, local people say that the number of affected villages and families is higher. The government mislead many villages into thinking that the dam would be small and their land would not be submerged. They were, however, told later that they would have to leave. Most people preferred land-for-land compensation, but the government was unable to provide it. Moreover, the compensation rate was below the market rate.23 Upper Veda irrigation dam is another big dam being constructed in the valley. This dam is expected to submerge 14 villages. Dam construction has started, but is slow due to protests from the affected people. Once again, the government is not heeding to demands for land for land compensation from local people.24 Even when the government is ready to give land for land, the land offered is of inferior quality and located in remote locations. Affected people demand that the government purchase land in the irrigation command area and distribute it to displaced families.
22 23 24 The following account is based on discussions with resettled people on 11th March 2005. Based on discussion with local people on 15th March 2005. Based on discussion with local people on 12th March 2005.

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Omkareswor hydropower project, with an installed capacity of 520 MW, is another large dam in the valley. The construction of this project is more than half complete. People at Pathrad village downstream of this dam said about 200 poor families who earn their living by mining sand from Narmada River during the dry season, and shing in the same river during the wet season are at a risk of losing their livelihood after completion of the dam.25 Maheshwar hydropower project, with an installed capacity of 400 MW, is the rst private-sector hydropower project in India. In 1993, S. Kumar, a textile magnate in India, was given license to build this project. This project is expected to displace about 40,000 people.26 5.2 The Birth Of Narmada Bachao Andolan There were disputes concerning the sharing of benets and costs in the Sardar Sarovar project right from the very beginning. The dam itself is in Gujrat state territory. Most of the villages displaced by the reservoir lie in Madhya Pradesh. Gujrat gets most of the irrigation and other benets from the dam. Madhya Pradesh wanted a lower dam height as that would have lead to displacement of fewer villages. Gujarat wanted higher dam height because that would give it more electricity and water. In 1969 Prime Minister Indira Gandhi formed a tribunal, the Narmada Water Dispute Tribunal (NWDT), to settle these disputes. The tribunal gave its award in 1979, laying down rules for sharing water among four states (Madhya Pradesh, Gujrat, Rajasthan, and Maharastra). It specied compensation arrangements for people displaced by the project. It also established the Narmada Control Authority (NCA) to monitor project implementation. Poor handling of resettlement issues by Sardar Sarovar project drew attention of local social activists. These activists had also witnessed the horror caused by Bargi dam built earlier. Although NWDT required rehabilitation of the displaced people to be completed before the reservoir was lled with water, the developer did not comply with it. In the early 1980s, Medha Patekar, a social activist from Mumbai, arrived at the area affected by construction of Sardar Sarovar dam. She initiated activities to resettle those displaced by dams, and inspired people to organize and ght for justice. The movement started growing. In 1987, this movement became known as the Narmada Bachao Andolan (NBA) or Save the Narmada Movement. NBA is a national coalition of environment and human rights activists, scientists, academics, and project-affected people working to stop dam-building in Narmada valley. NBA launched an effective campaign against the building of Sardar Sarovar dam. NBA argued that benets of Sardar Sarovar project were overestimated, costs were underestimated, and resettlement plans were poorly executed.
25 26 Based on eld visit on 14th March 2005. See Bissel, Singh, and Warth (2000).

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The World Bank had pledged $450 million for the construction of Sardar Sarovar project. Responding to an intense pressure from NBA, the World Bank formed an independent review commission, the Morse Commission, to review the project. This was the rst such commission ever formed by the Bank to review its own operations. The report of the Morse commission endorsed many of the concerns raised by the NBA. The report and the continued protest by the NBA forced the World Bank to withdraw support to the project. NBA then led a petition in the Supreme Court of India asking for a comprehensive review of the project. Responding to the petition, in 1995 the court halted construction of the project at a height of 80.3 m. In February 1999, the Supreme Court again gave permission to raise dam height to 88 m. Again in October 18, 2000, the Supreme Court of India gave permission to increase dam height to 90 m. and also authorized construction up to the originally proposed dam height of 138 m. under the condition that the dam height would be increased by 5 m incrementally and prior permission had to be taken from Relief and Rehabilitation Sub-group of the Narmada Control Authority (NCA). In a case led by the people of Jalsindhi and Pichhodi of Madhya Pradesh, the Supreme Court in its March 15, 2005 verdict ruled that all three states Maharastra, Madhya Pradesh, and Gujrat were required to allot 2 hectares of cultivable land to all major sons (unmarried male offspring over the age of 18), and allow submergence only one year after complete rehabilitation. Overtime, NBA has extended this movement to other dam areas in the Narmada valley. Currently, it is active in the Indira Sagar, Upper Veda, Omkareshwor, Maheswor, and Sardar Sarovar dam areas. How does NBA carry out its activities? NBA activists rst visit the affected village, meet village leaders, develop awareness of the negative impacts of hydropower dams among affected people, and then organize meetings and protest programs. During interaction with this researcher, the people of Narmada valley recounted the following experiences: Affected people of Upper Veda dam recalled one incident when they got together and stopped dam construction. The government used police force and jailed protestors for 11 days. The government released detainees only when it started receiving bad publicity from the public and the press. Dam construction was halted for three months, but has been resumed again, albeit slowly. People continue their struggle. NBA is helping to mobilize the affected peoples to demand their rights despite government ploys to break the movement. The government has resorted to coercing people to settle for cash compensation, preventing people from attending meetings by prohibiting access to meeting venue etc. Two landless households that had been living in the area for the past 20 years were arrested on charges of land encroachment. Interaction with people in Patharad and Ghar Gaon villages of Mandeleswor district revealed local efforts at derailing Maheswor dam.27 The movement

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began on 25th April, 1997 with a small rally of about 1,000 people. A bigger rally was held in Mandleswor on 3rd October 1997, with 15,000 people present. There has been continuous protest since then. Protestors have adopted multiple approaches to make the movement successful. They studied the contract between the developer, S. Kumar, and the MP government and tried to nd inherent pitfalls. For example, they argued that the purchase price of electricity at around Rs. 6 per unit was too high, and likely to lead to losses for the state government. They contacted national nancial institutions providing loans to the developer, educated them about the adverse impacts of Maheswor dam and requested them to back off. They demonstrated in front of foreign embassies in New Delhi demanding that foreign governments not guarantee loans to companies investing in Maheswor project. Protest groups also established links with foreign non-governmental organizations, establishing additional pressure on funding governments and companies to not provide support to the project. The ght was not easy. Police attempted to prevent people gathering for demonstrations. Locals began walking to demonstration sites at night to avoid getting caught. When their leaders were arrested, people resorted to goading police to making mass arrests to ll jails and corner the government into releasing everyone. In the Mandleswor rally, protestors mobilized a large number of village women and surprised the police by placing them on the front line. The police did not have many women police ofcers, and were at a loss as to how to deal with women protestors. Overtime, though, the police followed suit and increased the number of women police. One woman from Pathrad village said she was jailed 18 times. These women displayed a high level of enthusiasm for the movement. Affected people in the Man dam area protested variously through Satyagrah, hunger strikes, etc. In 1995, when the water in the reservoir began to submerge villages, people were still unwilling to move out of villages, saying they would rather die than move out unless the government compensated them properly. Ultimately, the government had no choice other than to break the dam gates down and allow water to pass. The movement gained momentum when NBA volunteers came to the area and mobilized the affected people. In May 2001, a few NBA volunteers and affected people went on a 34 day hunger strike. Finally in 2002, the government agreed to a substantial increase in the compensation rate. However, many affected people are still unsatised. They either want land for land, or competitive compensation per irrigated land prices. The court case is ongoing.

27

The following account is based on eld visit on 13th March 2005.

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What were the achievements of these struggles? Although the NBA has not been able to halt the construction of hydropower dams completely, it has slowed dam construction considerably. This has given potential victims of hydro projects time to think about future options. Even 10 years after the developer obtained a license to construct it, the Maheshwor project has not been able to take off at all and, as most investors have already backed down, appears unlikely to go ahead. As stated earlier, the Supreme Court of India has issued orders to Sardar Sarovar developer to increase dam height only after complete resettlement of all affected people. Because of this struggle, the Gujarati government has resettled 10,000 families on new land.28 Those displaced by the Man dam said the compensation rate for their land has increased more than three fold because of the struggle. It has been reported that shing rights in the Bargi dam reservoir was initially awarded to a contractor who prevented local tribal people from shing. The displaced people have regained shing rights after they organized themselves and chased the contractor away. Displaced people are also allowed to cultivate draw-down land when the water of the reservoir recedes in December. NBA can be credited with having brought the problems of Narmada valley and its people into international limelight. NBA is considered among the worlds successful social movements. It is no small task for any movement to launch sustained protests for over 20 years. A number of factors contribute to NBAs success. Firstly, NBA social activists include those who have gone through the trauma of displacement and resettlement by hydropower dams themselves, as well as groups who are likely to lose a great deal if dam construction continues. These activists are highly motivated and dedicated to the causes of the movement. Their level of enthusiasm is contagious. Secondly, NBA has been able to attract highly-educated volunteers from large Indian cities who are well versed in contemporary debates in development, and who are ready to sacrice urban comforts and years of their professional life to further NBAs cause. These volunteers are well versed at packaging grassroots wisdom of local activists and use it to inuence national as well as international policymakers, hydropower developers, nancers, and others. Thirdly, affected people place a high level of condence in NBA activists, respect them and are ever ready to follow them. Fourthly, well-known public personalities like Arundhati Roy have pledged moral support to the NBA cause, increasing public interest in these issues. Fifthly, NBA has established a procient network with similar organizations and individuals at national and international level. Finally, NBA supports its advocacy works with up to date research and documentation.

28

Personal communication with Dipti Bhatnagar of NBA, Badwani

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6. Involuntary Resettlement Initiatives of the Peoples Republic of China

Construction of hydropower and other dams accelerated in the Peoples Republic of China in the decades following the establishment of communist rule in 1949. Dam-building peaked during the Cultural Revolution. By the end of the 20th century, hydropower constituted about 19 percent of electricity generation in China. The construction of dams created a huge population of displaced people. Ofcial statistics indicate that about 10.2 million people were displaced by reservoirs created by dams by the end of the twentieth century. However, the actual number of people displaced by reservoirs is expected to be much higher. Till 1978, the Chinese government simply ignored the concerns of displaced people. Resettlement sites became homes of the poor and destitute. About 48 percent of people in resettlement sites are estimated to be living in extreme poverty.29 After 1978, China began to pay attention to resettled people. It launched development programs in resettlement sites. While it is not clear what trigged this policy shift, the timing appears to coincide with the period when China, under the inuence of leaders like Deng Hsiao Peng, began to realize that its past development policies were not working and adopted more liberal economic policies to promote development. Beginning in the early 1980s, China has viewed displacement and resettlement as a good development opportunity for displaced people. Policies have emphasized that compensation should be provided at replacement cost, and in the early stage of resettlement. Displaced people are resettled as close to their earlier location as possible. Resettled communities are given access to electricity with preferential electricity tariffs for irrigation and drainage. Resettled communities are also given priority in the use of surface water from the reservoir and draw-down lands. Furthermore, these communities also receive priority in the governments budgetary support in agriculture, education, health, etc. Above all, the policy stresses that the livelihoods of displaced people should be restored at least to their pre-displacement levels, if not better.30 However, the most noteworthy feature of Chinas recent policy initiatives is the recognition that resettlement and rehabilitation should not end with the completion of the construction of hydropower projects as is the practice in many countries. It makes provisions for the all-important post-construction support of resettled people. China has adopted two important regulatory initiatives related to resettlement: the establishment of Reservoir Maintenance Funds for Hydropower Projects in 1981, and the establishment of a Post Resettlement and Rehabilitation Fund for Hydropower Projects in 1991. Hydropower plants are required to allocate a portion
29 Fuggle et al (2000)and WCD (2000). 30 See Fuggle et al (2000).

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of electricity sales to the Reservoir Maintenance Fund. This fund is to be used for the maintenance of reservoir facilities, as well as to provide infrastructure and economic support to resettled people.31 The Post Resettlement and Rehabilitation Fund is also nanced from power sale and has been established for a period of 10 years. All hydropower projects constructed between 1986 and 1995, and after 1996 are required to create such a fund.32 For example, the 1,400 MW Shuikou HEP, located in Chinas Fujian province, established a 10-year Shuikou Reservoir Maintenance and Construction Fund in 1995. Shuikou HEP allocates 0.005 Yuan per kWh power sales to this fund. The Shuikou Reservoir Resettlement Ofce (SRRO) receives the money and is also responsible for spending it. For the rst few years, SRRO plans to spend about half the money in infrastructure development and the other half to improve production services. After some time, most of the money is to be spent in improving production services.33 The Three Gorges Dam project also has plans to allocate a portion of electricity revenue for post-resettlement support.34

31 See Egre, Roquet, and Durocher (2002). 32 Ibid. 33 Ibid. 34 See Zhu, ter Woort, and Trambath (2000).

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7. Recommendations from the World Commission on Dams (WCD)

Responding to growing discontent among victims of hydropower and other large dams, the World Bank and the World Conservation Union (IUCN) sponsored an international conference in April 1997 at Gland, Switzerland that led to the establishment of the World Commission on Dams (WCD). The task of the commission was to conduct a rigorous, independent review of the development effectiveness of large dams, to assess alternatives and to propose practical guidelines for future decision-making.35 WCD commenced an over two year study in May 1998. Study methodology included: 8 detailed case studies of large dams; country reviews for India and China; a brieng paper for Russia and the Newly Independent States; a cross-check survey of 125 existing dams; 17 thematic review papers; regional consultations; and review of more than 900 submissions. The result of this study is presented in its recently published report Dams and Development: A New Framework for Decision-Making. The ndings of the study indicate that the performance of most large dams was below the standard even when performance was judged on economic and nancial criteria alone. Construction delays and cost overruns have been pervasive. Moreover, social and environmental impacts were neglected in the planning and construction of such dams. As a result, such dams led to loss of biodiversity, water logging, increased social inequity, disproportionate adverse impacts on indigenous and marginal groups of population, etc. The report argues that there are viable alternatives to large dams such as managing demand, improving supply efciency, and exploring alternative sources of supply (wind and solar power, microhydro, water harvesting, etc). The preoccupation of decision-makers with large dams has, according to the report, prevented the exploration of such promising alternatives. The report also argues that those who benet from hydropower development, and those who suffer from it may be entirely different groups of people. Hence, the usual cost-benet approach to hydropower development that recommends that a hydropower project should be built if the aggregate benets exceed aggregate costs leads to inequities and injustices, even if the costs and benets are accurately accounted for. The report recommends that future decisions regarding water and energy resource development be guided by rights-and-risks approach rather than by the conventional balance sheet criterion. Various international conventions such as the United Nations Charter (1945), the Universal Declaration of Human Rights (1947), UN Declaration on the Right to Development (1986), and the Rio
35 See WCD (2000).

23

Declaration on Environment and Development (1992) entitle all people basic human right, right to a healthy environment, and the right to development. Assorted stakeholders such as project developers, local communities, electricity consumers, and governments have competing interests involved in the development of water and energy resources. As stated earlier, the constitution and laws (including customary laws) of a country and international conventions guarantee certain rights to all these stakeholders. For example, local communities have the right over the use of natural resources of their area, consumers have rights to affordable electricity, and governments and hydropower developers have rights to use natural resources for national development. At the same time, construction of a hydropower project imposes varying degrees of risk to stakeholder rights. For example, when a hydropower developer invests money for hydropower construction, there is always a risk that the projects may not succeed for various reasons, and the developer may loose the investment. Similarly, the construction of hydropower project may cause displacement, loss of livelihood, increased ood susceptibility and other problems to local communities. While hydropower developers have some control over how much risk they wish to bear, local communities are subjected to involuntary risks. The WCD report argues that it is important to identify all stakeholders likely to be affected by a hydropower project, recognize their rights, and assess the level and severity of risks imposed on those rights by the project construction. These stakeholders should be involved in all stages of decision-making in matters that pose risks to them. Equitable and just development of hydropower requires that stakeholders who bear more risks should have a greater say in decisions regarding hydropower development. This implies that local communities adversely affected by hydropower development should be given more voice in decision-making than has been the practice so far. The report asserts that decisions should be guided by the following core values: equity, efciency, participatory decision-making, sustainability, and accountability. Guided by such core values and drawing on the lessons derived from the review, the report outlines the following seven strategic priorities for the development of water and energy resources in future: gaining public acceptance, comprehensive options assessment, addressing existing dams, sustaining rivers and livelihood, recognizing entitlements and sharing benets, ensuring compliance, and sharing rivers for peace, development, and security. The report goes on to develop detailed guidelines for achieving the strategic priorities outlined above. Principles like participatory decision-making, respect for the rights of local communities and other stakeholders, benet sharing, and protection of livelihoods as espoused by the report are likely to lead to equity and justice in hydropower development.

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8. Summing up
Despite certain country-specic variations, equity and justice problems associated with hydropower development are similar in nature across countries. This study reviewed experiences of Brazil, Columbia, Costa Rica, India, Peoples Republic of China, and the United States of America in dealing with certain aspects of equity and justice related to hydropower development with an aim of deriving lessons for Nepals hydropower sector. This study was based on the premise that counties can learn from each others experiences in addressing such problems. Examples from Costa Rica and Columbia illustrate how communities in the immediate upstream watershed of hydropower projects could be made project beneciaries and protectors. These benet sharing agreements between hydropower developers and upstream communities have not developed automatically. Legislative initiatives by the government have created conditions favorable to the development of such mechanisms. The experience of UHE Luis Eduardo Megalhaes HEP of Brazil suggests that conicts associated with displacement and resettlement can be minimized by careful documentation of affected people prior to the initiation of the project, and paying adequate attention to peoples needs in order to restore their livelihoods. The experience of this project also demonstrates the need and effectiveness of post-resettlement support for people displaced by HEPs. In this case, such support has come in the form of a donor-funded development project implemented by a non-governmental organization. Itapu HEP of Brazil and Paraguay is a good example of how a hydropower project becomes a major attraction for eco-tourism, as well as a generator of much needed resources for local development. However, this project also suggests that availability of resources by itself may not benet people victimized by hydropower development. As in Nepal, there is an acute need in Brazil for fair distribution and use of hydropower royalty. This case also suggests that hydropower royalty of mega-hydropower projects should be distributed more widely. Grand Coulee dam of the United States is a good example of how a hydropower project can cultivate harmonious relations with local communities. It also demonstrates that, given an independent judiciary system, it is possible to provide reparations to people victimized by hydropower projects in the past. This should also be a lesson to hydropower developers that they would be held accountable for past wrongs inicted by the project on local communities. Narmada Bachao Andolan (Save the Narmada Movement) of India is an excellent example of how people affected by hydropower projects could be organized, and what could be achieved by collective voice of affected peoples. The people of Narmada valley have launched non-violent protests against
25

injustices committed by dam-building and sustained the movement for over 20 years. Although this movement has not been able to stop construction of dams completely, it has slowed dam building considerably. NBA has been able to negotiate greater share of benets for the affected people. It has also brought attention of international communities to the problems of people victimized by dams. The lesson from NBA experience for governments and developers is that unless the issues of equity and justice are properly dealt with in a timely manner, the construction of hydropower projects is likely to slow down leading to cost overruns and other losses. China presents an example of exemplary resettlement policies for people displaced by hydropower projects. It suggests that displacement should be avoided or minimized as far as possible. When unavoidable, resettlement should be viewed positively as a development opportunity for displaced people. Resettled people should be able to improve upon, or at least restore their pre-displacement level of standard of living. Chinas resettlement policy also stresses the need to resettle displaced people as close to their earlier location as possible. Care should be taken to preserve socio-cultural harmony among resettled people by moving groups of people together. Care should be taken that host populations do not suffer by the inow of displaced people. Above all, the most noteworthy feature of Chinas resettlement policy is that it recognizes the need to provide post-resettlement support to rehabilitate resettled communities and illustrates how sustainable funds could be provided for such support activities by allocating a portion of hydropower revenue. Like Nepal, countries such as Brazil and India are beginning to realize that people downstream of hydropower plants, and those adversely affected by hydropower related constructions other than dam and reservoirs (transmission lines, access roads, canals, etc.) have not received adequate attention in the current denition of affected people. A more appropriate denition and practice is yet to evolve. One important lesson that emerges from this review is that the empowerment of affected people is important in order to promote equity and justice. Governments and developers everywhere tend to downplay adverse consequences and overestimate benets from hydropower development. Empowered communities are better able to negotiate benets with the government and hydropower developers. Such communities are also able to take advantage of development opportunities offered by hydropower projects. Elements of empowerment include: ability of affected people to comprehend environmental impact assessment of hydropower projects, awareness of their rights and responsibilities, familiarity with national and international laws, ability to organize, entrepreneurial ability to recognize and take advantage of opportunities offered by hydropower projects, etc.
26

The experience of these countries also highlights the importance of social science research in promoting equity and justice. Governments and developers pay attention to problems of affected people only when social science research exposes the adverse consequences of hydropower projects.

27

References
Bissel, Richard E., Shekhar Singh, and Hermann Warth. Maheshwar Hydroelectric Project: Resettlement and Rehabilitation. An Independent Review conducted for the Ministry of Economic Cooperation and Development, Government of Germany, Narmada Bachao Andolan, Mandleshwar, Madhya Pradesh, India, June 2000. Chomitz, Kenneth M., Esteban Brenes, and Luis Constantino. Financing Environmental Services: The Costa Rican Experience and its Implications,Environment ally and Socially Sustainable Development, Latin America and Caribbean Region, World Bank, 25 September 25, 1998. Egre, Dominique, Vincent Roquet, and Carine Durocher. Benet Sharing from Dam Projects. Phase I: Desk Study. Draft Final Report Prepared for the World Bank Group. September 9, 2002. Fuggle, R.; Smith, WT; Hydrosult Canada Inc.; and Agrodev Inc. 2000. Large Dams in Water and Energy Resource Development in the Peoples Republic of China (PRC), country review paper prepared as an input to the World Commission on Dams, Cape Town, www.dams.org. Landell-Mills, N. and I. Porras. Silver Bullet or Fools Gold? A Global Review of Markets for Environmental Services and their Impact on the Poor. London: IIED, 2002. Milewski, Joseph, Dominique Egre, and V. Roquet. Dams and Benet Sharing, Contributing Paper Prepared for Thematic Review 1.1, World Commission on Dams, 1999. Ortolano, L., Cushing, K., and Contributing Authors. 2000. Grand Coulee Dam and the Columbia Basin Project, USA, case study report prepared as an input to the World Commission on Dams, Cape Town, www.dams.org. Pagiola, Stefano. Paying for Water Services in Central America: Learning from Costa Rica, in S. Pagiola, N. Landell-Mills, and J. Bishop, eds. Selling Forest Environmental Services: Market-based Mechanisms for Conservation and Development. London: Earthscan, 2002. Rangachari, R., Sengupta, N., Iyer, R. R., Banerji, P., and Singh, S. 2000. Large Dams: Indias Experience, a WCD case study prepared as an input to the World Commission on Dams, Cape Town, www.dams.org. Scarpinella, Claudio Antonio, O Paradigma de Anlise e os processos de deiso e implantaco. Doctor thesis. Sau Paulo University, 1999

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Upadhyaya, Shyam K. Reorienting the Distribution and Use of Hydropower Royalty to Promote Equity and Justice. Equitable Hydro Working Paper 7, Winrock International, Nepal, 2006. Upadhyaya, Shyam K. Payments for Environmental Services: Sharing Hydropower Benets with Upland Communities, RUPES Kulekhani Working Paper No 1, Winrock International, Nepal, August 2005. Upadhyaya, Shyam K. Victims of Hydropower: Injustices in Hydropower Development, Equitable Hydro Working Paper, Winrock International, Nepal, December 2004. Upadhyaya, Shyam K. How can Hydropower Royalty lead to Social Equity and Environmental Justice? Equitable Hydro Working Paper 2, Winrock International, Nepal, 2003. Upadhyaya, Shyam K. Hydropower Development in Nepal: Issues on Equity and Justice, Equitable Hydro Working Paper 1, Winrock International, Nepal, December 2001. Upadhyaya, Shyam K. and Karuna Sharma. Displacement, Resettlement, and Rehabilitation Issues in Hydropower Projects, Equitable Hydro Working Paper 4, Winrock International, Nepal, August 2004. WCD. Dams and development: a new framework for decision-making. The Report of the World Commission on Dams. UK and US: Earth scan Publications Ltd., November 2000. Zhu, Youxuan, Martin ter Woort, and Barry Trembath. Successful Reservoir Resettlement in China: Shuikou Hydroelectric Project. East Asia Environment and Social Development Discussion Paper Series 21248, The World Bank, April 2000.

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Annex 1: Roll on Columbia by Woody Guthrie

Roll On Columbia by Woody Guthrie Roll on, Columbia, roll on, roll on, Columbia, roll on Your power is turning our darkness to dawn Roll on, Columbia, roll on Green Douglas r where the water cuts through Down her wild canyons and mountains she ew Canadian Northwest to the ocean so blue Its roll on, Columbia, roll on Other great rivers add power to you Yakima, Snake, and the Klickitat, too Sandy, Williamette, and Hood River, too Its roll on, Columbia, roll on At Bonneville now there are ships in the locks The water has risen and cleared all the rocks Soon shiploads of plenty will sail through your docks So roll on, Columbia, roll on On up the river is Grand Coulee Dam The mightiest thing ever built by a man To run the great factories and water our land Its roll on, Columbia, roll on These mighty men labored by day and night Matching their strength gainst the rivers wild ight Through rapids and falls they won the hard ght Roll on, Columbia, roll on

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WINROCK INTERNATIONAL LIST OF RECENT WORKING PAPERS

Equitable Hydro Working Paper Series Upadhyaya, Shyam K., Hydropower Development in Nepal: Issues of Equity and Environmental Justice. Equitable Hydro Working Paper 1, Winrock International, Nepal, November, 2002. Upadhyaya, Shyam K., How Can Hydropower Royalty Lead to Social Equity and Environmental Justice? Equitable Hydro Working Paper 2, Winrock International, Nepal, January, 2003. Upadhyaya, Shyam K., Maoists Strikes on Hydropower Plants: Any Policy Lessons? Equitable Hydro Working Paper 3, Winrock International, Nepal, November, 2003. Upadhyaya, Shyam K., and Karuna Sharma. Displacement, Resettlement, and Rehabilitation Issues in Hydropower Projects. Equitable Hydro Working Paper 4, Winrock International, Nepal, August, 2004. Upadhyaya, Shyam K., Victims of Hydropower: Injustices in Hydropower Development. Equitable Hydro Working Paper 5, Winrock International, Nepal, November, 2004. Upadhyaya, Shyam K., Benet Sharing from Hydropower Projects in Nepal. Equitable Hydro Working Paper 6, Winrock International, Nepal, February 2005. Upadhyaya, Shyam K., Reorienting the Distribution and Use of Hydropower Royalty to Promote Equity and Justice. Equitable Hydro Working Paper 7, Winrock International, Nepal, January 2006. RUPES Kulekhani Working Paper Series Upadhyaya, Shyam K. Payments for Environmental Services: Sharing Hydropower Benets with Upland Communities. RUPES Kulekhani Working Paper 1, Winrock International, Nepal, August 2005.

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Winrock International is a non-profit organization working with people around the world to increase economic opportunity, sustain natural resources, and protect the environment. The Working Paper Series under the Equitable Hydro Program aims to address various questions of equity and environmental justice associated with hydropower development in Nepal, thereby helping to lay academic groundwork for better-informed public discourse and advocacy in Nepal around the issues of economic and environmental equity in the development of the countrys substantial hydropower resources. Previous research under equitable hydro and other programs have found that hydropower development in Nepal has led to inequities and injustices. There have been inequities in the distribution of costs and benefits of hydropower development. While some regions and groups of population have suffered from hydropower development, the benefits have gone to entirely different areas and groups. Earlier studies in this series examined past experiences of hydropower projects in Nepal and identified conditions more likely to lead to equitable distribution of costs and benefits of hydropower projects among various stakeholders in society. This study, Addressing Inequities and Injustices in Hydropower Development in Nepal: Lessons from Abroad reviews experiences of other countries in dealing with problems of equity and justice in hydropower development, and derives some lessons for Nepal from them.

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