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THE BAKUN HYDROELECTRIC PROJECT - MALAYSIA

This briefing sheet is the first in a series on the Bakun HEP which have been compiled by the following organisations:

• Forests Monitor
  
• Friends of the Earth
  
• Global Witness
  
• International Rivers Network
  
• Sarawak Solidarity Campaign
  
• The European Committee for Human Rights
  
• in Malaysia and Singapore (KEHMA-S)

Many thanks to all those who have contributed to this series of briefings

WHAT AND WHERE IS IT?

The Bakun Hydroelectric Project (BHEP) comprises the construction of a 2,400MW hydroelectric dam, the transmission of its electricity, and the building of related infrastructure including access roads. The dam is being built on the Balui river, some 37 kilometres upstream of Belaga in Sarawak, Malaysia (Sarawak is part of the island of Borneo). Estimates of the amount of electricity Bakun will actually generate vary considerably, but the present official figure is that it would operate at an average output of 1,770 MW. At least 70% of this will be transmitted to Peninsular Malaysia, across some 1,500 kms of overland wires and three or four 650-km-long undersea cables.

PHYSICAL FEATURES

The Bakun dam is a 205-metre-high Concrete Face Rockfill Dam (CFRD), with a length of crest of 740 metres, a base width of 560 metres and a crest width of 12 metres. This makes it one of the highest rockfill dams in the world. It will flood 69,640 hectares of land, an area bigger than Singapore. This area is presently being clear-cut. Its catchment area is over 1.5 million hectares of mainly primary forest, though some 16% of Sarawak's total log production currently comes out of this area. 51% of the land of the reservoir area is Native Customary Land (meaning it is legally owned by the indigenous communities).

WHO IS AFFECTED?

The project will require the forced relocation of between 9,000 to 10,000 indigenous people, mainly of the Kayan, Kenyah, Kajang, Ukit and Penan ethnic groups. In addition, by changing water quality and river flow patterns, it will potentially affect the thousands of people living downstream of the dam, on the Rajang river, which is the longest river in Malaysia.

WHO IS BUILDING IT?

The Bakun project is one of the largest privatised projects in Malaysia. Its implementation has been given to a Malaysian company, Ekran Berhad, without tender and apparently without proper costing. Ekran's chairman, Ting Pek Khiing, is known to be close to Prime Minister Mahathir Mohamad and others in the political elite. Subcontracting of clearing and construction operations, partly to other companies controlled by Ting, has almost been finalised. The major construction contract has been given to a consortium led by the Swedish-Swiss company Asea Brown Boveri (ABB) and Brazil's CBPO and including South Korea's Hyundai.

It is claimed the dam will be ready by 2002. Engineering consultants from Germany (Lahmeyer) and the US (Harza) have helped with feasibility studies, dam design and overall project supervision. Although designated as a 'privatised' project, difficulties encountered by Ekran in raising the necessary monies on the international markets has meant that there is heavy Malaysian Government involvement in the financing of the project, contradicting earlier assurances by Ting that Ekran would not have to rely on government money. Malaysian state-controlled companies and agencies

like Tenaga Nasional, Malaysian Mining Corporation and the Employees Provident Fund as well as the Sarawak state government will have major shares in the project. It is unclear who will be responsible for subsidising future costs arising from the project if it does not prove viable.

WHY IS IT BEING BUILT?

The Bakun project was first proposed in the 1980s as part of a series of dams to exploit the hydroelectric potential of Sarawak's rivers. A concerted campaign against it by local indigenous communities, together with its high costs (financial, social and environmental) led to the project being cancelled in 1990. The Malaysian Government's official line, as announced by Mahathir, was that the Bakun project was cancelled as "proof we care about the environment". However, in September 1993, the project was revived. In the words of the same Prime Minister, "Bakun will not only provide the cheapest source of energy but will also serve as a catalyst to the country's industrialisation programme." As well as supplying electricity (mainly to Peninsular Malaysia), other benefits from the Bakun project claimed by the Government include:

• generating employment and valuable spin-off industries for Sarawak which will add 3% to that state's growth per year;
  
• bringing the indigenous peoples 'into the mainstream of development' through resettlement;
  
• providing much needed infrastructure to a remote part of Sarawak which will become a valuable tourist destination.

WHY SHOULDN'T IT BE BUILT?

The project is opposed by many in the indigenous communities, together with opposition political parties, a coalition of over 40 Malaysian NGOs, other NGOs and individuals. They attack the project on just about every ground. Its necessity and viability are called into question and the cost of its social and environmental impact is deemed unacceptable.

• First and foremost, it is argued that there is no need for Bakun's electricity. There is a current surplus in Malaysia which will continue well into the next century. Critics argue that Malaysia has an excellent opportunity to frame future power-generating projects in a properly construed, efficient and environmentally-conscious National Energy Policy. It is argued that the construction of Bakun is detrimental to such a policy.
• Critics also point out that Bakun's electricity will be neither the cheapest nor the cleanest. In fact, the cost of Bakun's electricity will be the most expensive in Malaysia's history, and will almost certainly necessitate electricity price rises, meaning the Malaysian consumers and investors will bear the cost.
• The siting of a dam designed to supply Peninsular Malaysia with electricity in a remote part of Sarawak is highly controversial. Amongst other things, it means the project will rely on the transmission of electricity via long overland and undersea cables whose security and viability may be vulnerable and whose environmental impact is incalculable.

Indeed, the viability of the project is challenged on a number of issues:

• There is the perception that the official projections of Bakun's electricity output are wildly optimistic. The project is based on a number of assumptions regarding, for example, efficiency of the dam, rainfall, streamflow, sedimentation rates, likelihood of earthquakes, maintenance costs, speed of construction, and downstream effects; the miscalculation of any one of which would throw the viability of the project into doubt.
• Similarly, projections of the costs and time anticipated to complete the project are, in the light of experience of other large dams around the world, likely to be overrun, to degrees which could destroy the economic justification of the project.
• The planning of the dam has been conducted with no public accessibility to vital feasibility studies, no process of public feedback on a highly controversial and subverted Environmental Impact Assessment process which was described by the mainstream press as 'an abuse' and 'a farce', and extremely limited consultation procedures with the indigenous peoples who have had little idea of what will happen to them. A recent High Court decision found that the Malaysian Government, together with Ekran and the Sarawak state government, had subverted the basic rights of the indigenous peoples to comment on the EIA before approval, a ruling that was dismissed by the authorities as 'technical' (and which may be turned over on appeal).

Add to this the environmental and social impacts (heavily downplayed by the authorities) as well as the risk to the safety and livelihoods of the people living downstream due to possible sudden releases from the reservoir and the potential of a dam failure, and there are many people in Malaysia who say the project should once again be scrapped, this time for good. Otherwise, it will be a case of the Malaysian people, through higher electricity prices, heavy government subsidies, and loss of homes and lifestyles, who will pay the price for the Bakun dam.

TAKE ACTION

Campaign Demands

Within Malaysia, a coalition of 40 Malaysian Non- Governmental Organisations (NGOs) comprising indigenous, environmental, human rights, women's, workers', and consumer groups, as well as other NGOs and indigenous groups within the Bakun area have highlighted a number of concerns over the Bakun project [1], [3]. These include:

Viability

Serious questions have been raised concerning the viability of the Bakun Hydroelectric Project (BHEP), from economic, ecological, technical, social and cultural perspectives. In particular, the current dam design has not adequately addressed the dangers of overtopping, sedimentation and reservoir-induced seismicity, nor has the Government demonstrated the economic viability of the project.

Access to Information

Feasibility studies and reports commissioned by the Government on the Bakun project have been classified under the Official Secrets Act, meaning that it is a criminal offence for anyone to even have, let alone use, the information contained therein. Not all of the appendices, interim and final reports of the relevant Environmental Impact Assessments (EIAs) are accessible to the general public. Project proponents have refused to meet critics in any open discussion.

Public Accountability

It is normal practice for EIAs to be prepared and considered as one document. The EIA for the BHEP has been split into four parts (reservoir preparation, dam and ancillary facilities, power transmission, Bintulu-Tubau-Bakun access road) in order to speed up the approval and implementation of the project. None of the separate EIAs are subject to a process of public consultation before approval. Work has proceeded on reservoir clearance and construction of the river diversion tunnels prior to the approval of the project as a whole.

The Wishes of the Indigenous Communities

The Government's Resettlement Plans have not been made public. It is understood that there is a plan to resettle the affected communities in the less fertile Belaga area in which they cannot make a decent living - this is not acceptable to large numbers in these communities who have expressed opposition to this resettlement plan.

Energy Policy and Alternatives

Malaysian groups have consistently argued that the Malaysian Government needs to develop a coherent energy policy based on energy conservation, and in which alternative renewable sources of energy (including solar energy and generation from biomass) are given due attention. The high cost of Bakun makes little sense should these sources become increasingly competitive, as predicted. Nor does it make much sense when the cost of the energy produced is compared to current alternatives, including gas. Malaysia presently has a 50% over-supply, meaning that there is no need to rush to build Bakun and that there is time to carefully consider the whole energy sector.

European citizens concerned about Bakun (and in particular the involvement of European companies and investors in the project) are urged to support the demands of the Malaysian groups and indigenous communities [1], [2], [3], namely that the Government of Malaysia should:

• seriously consider and explore viable alternatives to the existing BHEP proposal, taking into account views and suggestions offered by the public and concerned NGOs;
• make freely and publicly available all feasibility studies and any report relevant to the BHEP;
• respect the due process of EIAs by making all final EIA reports and appendices publicly available prior to their approval;
• conduct integrated studies into the BHEP as one single project, and consider its social consequences, economic costs, and ecological impact;
• respect the wishes of the indigenous communities regarding resettlement plans by instituting a process of full and comprehensive consultation, during which time all views of the indigenous population have a chance to be heard, and the final plan to be drawn up with the participation of elected indigenous representatives;
• base its development projects on a serious consideration of the needs and aspirations of the indigenous communities. It is essential that all affected people are fully engaged in the decision-making process, and are informed of all the implications and alternatives related to this project;
• guarantee the indigenous peoples' right to freely express their views without threat of intimidation, harassment or detention;
• provide unrestricted access to Sarawak and the Bakun site to all concerned individuals and NGOs;
• clarify its position in committing public funds to the construction of the BHEP;
• clarify the parties financially responsible for the completion, operation and maintenance of the project;
• give a public assurance that electricity tariffs will not be increased and taxpayers' money will not be used to subsidise this project;
• CEASE ALL WORK ON THE PROJECT SITE UNTIL ALL THE ABOVE MATTERS ARE IMPLEMENTED.

What You Can Do

Letters do make a difference. Please keep them factual and always polite.

ABB

Please write to the Chief Executive Officer of ABB Asea Brown Boveri, the company which is leading the consortium that has been awarded the construction contract to build the dam, urging them to live up to their stated commitment to sustainable development and withdraw immediately from the project. A letter to this effect was sent to ABB on 2nd July 1996, signed by 129 NGOs from 20 countries and 28 Members of the European Parliament. This letter can be found in the "Specimen Letters" section of these briefings. Please feel free to use it in its entirety, or relevant portions of it in your own letter.

Mr Percy Barnevik
CEO, ABB Asea Brown Boveri AG
P.O. Box 8131
8050 Zurich
Switzerland

Consultants

Please write to the following consultants involved in Bakun:

1. expressing the concerns mentioned raised in this briefing,
   
2. highlighting the many uncertainties about dam economics and safety,
   
3. raising the issue of the failure of previous dam resettlement schemes (eg the Batang Ai hydroelectric project also in Sarawak),
   
4. mentioning that they would share responsibility for any human rights violations associated with Bakun, and
   
5. stressing the BHEP would not be permitted in their home countries.

John A Scoville
Chairman
Harza Engineering Company
Sears Tower
233 South Wacker Drive
Chicago
Illinois 60606-6392
USA

Dr J Zimmerman
Director, Hydropower Department
Lahmeyer International GmbH
Postfach 710651
D-60486 Frankfurt am Main
Germany

Please write to the Prime Minister of Malaysia explaining why you have recently written to ABB Asea Brown Boveri urging them to withdraw from the BHEP. Suggested wording for this can be found in the "Specimen Letters" section of these briefings. Please could you also send a copy of your letter to the Malaysian High Commissioner in London, the Deputy Prime Minister of Malaysia, and the Chief Minister of Sarawak.

Datuk Seri Dr Mahathir Mohamad
Prime Minister of Malaysia
Prime Minister's Department
Jalan Dato' Onn
50502 Kuala Lumpur
Malaysia

His Excellency Dato A Kamarudin
Malaysian High Commission
45 Belgrave Square
London
SW1X 8QT

Datuk Seri Anwar Ibrahim
Deputy Prime Minister of Malaysia
Prime Minister's Department
Jalan Dato' Onn
50502 Kuala Lumpur
Malaysia

Datuk Patinggi Tan Sri Abdul Taib Mahmud
Tingkat 22, Wisma Paba Malaysia
Petra Jaya
53502 Kuching
Sarawak
Malaysia

We would be very grateful if you could send copies of your letters and any replies that you may receive to: Sarah Tyack, at Friends of the Earth. Your letters to ABB Asea Brown Boveri will be copied to the World Business Council for Sustainable Development, and those to Lahmeyer, Harza and ABB will be copied to the Deputy Prime Minister of Malaysia, Datuk Seri Anwar Ibrahim who is also Chair of the Cabinet Committee on Bakun.

SPECIMEN LETTERS

To the Chief Executive Officer of ABB Asea Brown Boveri

(This letter was sent to ABB on July 2nd 1996)

Dear Mr Barnevik,

We are writing to express our grave disquiet and concern over ABB Asea Brown Boveri's involvement in the Bakun Hydroelectric Project. The project requires the forced resettlement of some 9,000 people, mainly of the Kayan, Kenyah, Kajang, Ukit and Penan peoples, and the flooding of 69,640 hectares of land, an area larger than Singapore, including large tracts of forest. Agriculture and fisheries downstream of the proposed dam will be adversely affected and the risk of a major catastrophe through dam failure cannot be ignored.

Over the years ABB has issued numerous statements supporting the need for sustainable development. The company's 1994 report, ABB Environmental Management Programme, Initial Review, states:

"ABB is committed to sustainable development. Protection of the environment is among our top corporate priorities. We address environmental issues in all our operations and public policy."

ABB is acknowledged for playing a leading role in the Business Council for Sustainable Development, now the World Business Council for Sustainable Development. We are therefore deeply disappointed to learn of the company's involvement in the Bakun Hydroelectric Project, an involvement which we believe directly contradicts the company's principled stand on sustainable development.

Our concerns are as follows:

(i) Dumping Outdated Technology: As a Swiss/Swedish company, ABB will be well aware that both Sweden and Switzerland have long abandoned large-scale hydroelectric projects as environmentally or socially acceptable forms of electricity generation. Widespread public opposition to dams in Sweden, Switzerland and Norway has stopped construction of all but the smallest projects. Sweden's 1987 Natural Resources Act prohibits any hydropower exploitation of the country's last four free-flowing rivers -
the Torne, Kalix, Pite and Vindel.

Other countries too now view large dams as outdated technologies. In Norway, the Alta dam was only built on condition that it would be the last of its kind. In France, the Government has scrapped plans to build a series of dams on the Loire. In Australia, plans to build the Franklin Dam have long been abandoned. Meanwhile, in the USA, the Commissioner for the US Bureau of Reclamation, stated in a recent speech:

"We have to be realistic about the future (...) We have recognised our traditional approach for solving problems - the construction of dams and associated facilities - is no longer publicly acceptable. We are going to have to get out of the dam-building business. (...) We now realise the significant construction and operating costs of large-scale water development projects cannot be repaid. (...) Within the last two decades, we have come to realise there are many alternatives to solving water resource problems in the US that do not involve dam construction."

Officials at the World Bank and other international aid agencies have made similar observations and the Bank now appears to be moving out of the large dam-building business. Indeed, there is a growing consensus within the development community that large dams represent an outdated, inefficient, uneconomic and environmentally and socially destructive technology.

We respect the sovereign right of Malaysia's peoples to decide their own development path, whilst honouring the international agreements to which Malaysia is a party. However, we find it deeply hypocritical that a company as progressive as ABB should be involved in actively transferring technologies which are no longer considered acceptable in its home countries. We also find it at odds with ABB's stated commitment to promoting "the transfer of eco-efficient technologies in the world".

(ii) Lack of Consultation: UNCED, the Commission on Sustainable Development, and other international and national bodies have repeatedly stressed the importance of public participation to sustainable development. ABB itself has recognised this in its commitment to "communicating openly with interested parties, in the communities and countries where ABB operates as well as internally about its environmental performance".

In the case of Bakun, however, there has been little public consultation on the project. On the contrary, local residents and non-governmental organisations have repeatedly complained of the lack of openness surrounding the project and its planning. The public has been denied access to vital feasibility studies; consultation with the local indigenous peoples has been extremely limited; and there has been no process for allowing public comment on the Environmental Impact Assessment (EIA), parts of which have still to be published.

As you will know, the Kuala Lumpur High Court has now ruled that the EIA was conducted illegally and that the Government violated Malaysian environmental law in approving the dam. According to the court, the views of local residents from the area where the dam is due to be built should have been included in the EIA. Moreover, the Government acted improperly in delegating the job of approving the EIA to the Sarawak state government, a major shareholder in the project.

Given this ruling, and the well-documented failure of the Malaysian authorities to consult openly during the planning of this project, we believe that the continued participation of ABB will seriously undermine the company's reputation and, indeed, the reputation of other companies within the World Business Council for Sustainable Development.

We would therefore urge you to withdraw from the contract immediately. If you do decide to go ahead, please be assured

that your involvement will continue to be closely scrutinised.

Yours sincerely,

 

To the Prime Minister of Malaysia

Dear Prime Minister,

I realise that you are extremely busy but I hope you will not mind my writing to you to explain why I have recently written to ABB Asea Brown Boveri urging them to withdraw from the Bakun Hydroelectric Project. The letter was written in response to a European-wide campaign launched by leading European non-governmental organisations.

For many years now, these and other progressive NGOs in the North have joined Southern governments such as yours in seeking equitable North-South relations. Integral to these efforts have been attempts to prevent Northern-based companies from behaving abroad in ways that violate standards at home. The dumping of technologies on the South that are no longer considered acceptable in the North - including toxic wastes, banned drugs or pesticides, or nuclear power stations - is an example of such double standards.

As a Swiss-Swedish company, ABB is well aware that large hydroelectric plants are increasingly viewed with scepticism within Europe. They have proven to be outdated, inefficient and uneconomic means of generating electricity, even less economic when their sometimes colossal external environmental and social costs are considered. For that reason, the Swiss Forest and Environmental Protection Acts and the Swedish Natural Resources Act would prohibit the Bakun HEP from being built in Switzerland or Sweden, the home countries of ABB.

Other countries too now view large dams as outdated. Norway is no longer building high dams. In France, the Government has scrapped plans to build a series of dams on the Loire. In Australia, plans to build the Franklin Dam have been abandoned. Meanwhile the largest dam-building agency in the US, The US Bureau of Reclamation, has announced that it is "to get out of the dam-building business" and Congress has recently voted against the only two major projects currently being proposed by the US dam industry.

So long as large dams are considered unacceptable in my own country, I shall seek to ensure that neither ABB nor any other European-based company or investment fund is involved in the Bakun HEP or any other similar project anywhere in the world. Indeed, ABB itself professes to be guided by social and environmental concerns, and thus its involvement in such a project is deeply hypocritical.

I am sure you share the disgust at such double standards practised by corporations and investors of the North. I am confident of your understanding of the concern here in Europe. And I am sure you understand such concern does not seek to target specific countries like Malaysia but rather the actions and abuses practised by European-based companies the world over.

Yours sincerely,

FURTHER INFORMATION

If you are interested in finding out more about the project, we have prepared a series of detailed briefing sheets on a variety of aspects connected to Bakun. These are:

1. The Bakun HEP: Impacts on the Indigenous People of Sarawak
2. The Bakun HEP: Environmental Impacts
3. The Bakun HEP: Forests and Forest Management
4. The Bakun HEP: The Viability of the Submarine Cables
5. The Viability of the Bakun HEP

Please contact the Biodiversity team at Friends of the Earth for any of these briefings or for any other specific information:

REFERENCES

[1]    Bakun Dam: Feasibility, Impact and Alternatives. Seminar Resolution, 2-3 December 1995, Kuala Lumpur, Malaysia.
[2]    Bakun Region Peoples' Committee Declaration, 8-9 April 1995, Uma Daro, Sarawak, Malaysia.
[3]    Memorandum by the Concerned NGOs on Bakun, 12 March 1996.

August 1996
Published by Friends of the Earth Ltd
© Friends of the Earth Ltd

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