Hoi Xuan Hydropower Project (MIGA-12869)

Countries
  • Vietnam
Where the impacts of the investment may be experienced.
Specific Location
Quan Hoa
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Financial Institutions
  • Multilateral Investment Guarantee Agency (MIGA)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Bank Risk Rating
A
Risk rating varies among banks and may refer only to the particular investment and not to the risk for the project as a whole. Projects marked 'U' have an 'Unknown' risk rating at the time of disclosure.
Voting Date
Sep 21, 2015
The estimate day the bank will vote on a proposed investment. The decision dates may change, so review updated project documents or contact the EWS team.
Borrower
Goldman Sachs (Asia) LLC
The holder of the loan, grant, or other investment.
Sectors
  • Energy
  • Hydropower
The service or industry focus of the investment. A project can have several sectors.
Potential Rights Impacts
  • Cultural Rights
  • Healthy Environment
  • Housing & Property
  • Labor & Livelihood
  • Marginalized Groups
  • Right to Food
  • Right to Health
Only for projects receiving a detailed analysis, a broad category of human and environmental rights and frequently at-risk populations.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, etc.
Investment Amount (USD)
$ 200.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please review updated project documents for more information.
Project Cost (USD)
$ 200.00 million
Value listed on project documents at time of disclosure. If necessary, converted to USD$. Please see updated project documentation for more information.
Primary Source

Original disclosure @ MIGA website

Updated in EWS Feb 8, 2018

Disclosed by Bank Nov 9, 2015


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Project Description

The primary purpose of the project, as identified by MIGA, is to contribute to the increasing electricity demand in Vietnam. The project involves construction of a “102 megawatt hydropower plant on the Ma River in the Quan Hoa district, Thanh Hoa province in northeastern Vietnam. The facility will consist of a 43-meter high dam and a reservoir with a capacity of approximately 63.7 million cubic meters at normal water levels with a standard water level of 80 meters.” Additionally, the project will involve construction of a spillway, intake gate, penstock, powerhouse, discharge canal, water routes and access roads. Impacts for the project, including land acquisition, are expected to displace a total of 2,002 households (or 7,934 people), this, however, does not take into account downstream impacts, which are considered unable to be “fully determined” until after the dam is in operation.

Location: The Hoi Xuan hydropower project is planned for construction within the two provinces of Thanh Hoa and Hoa Binh, on the Ma river. “The project is located nearby the National highway 15A, 95km far from Hoa Binh town in the West, 195km far from Thanh Hoa province in the North-west, and 15km far from Hoi Xuan town, Quan Hoa district. The project is located on Ma river hydropower cascade, in the downstream of Trung Son hydropower, with 38.5 km from Trung Son hydropower.”
Resources needed: Land to be acquired
Project Number: MIGA 12869

Early Warning System Project Analysis

Risk Assessment: Category A.

The Multilateral Investment Guaranteed Agency (MIGA) classifies proposed projects based on the type, location, sensitivity, and scale of the project and the nature and severity of its potential environmental and social impacts. A proposed investment is classified as Category A, “if it may have potentially significant adverse social or environmental impacts that are diverse, irreversible, or unprecedented”.

APPLICABLE SOCIAL & ENVIRONMENTAL STANDARDS
MIGA documentation identifies some potential impacts as “reservoir flooded areas, relocation, loss of agricultural land, especially land for bamboo plantation, need for livelihood restoration, threats to ethnic/cultural identities in resettlement sites [and] increased drug use and trade among construction workers.”

People Affected By This Project

OUR RISK ASSESSMENT
Based on the World Bank Group’s Multilateral Investment Guaranteed Agency project documents, this project poses potential risks to the following human rights:

Right to Culture-

This project is due to impact the existing cemetery of Thanh Xuan and Tan Son province. However, “[t]he religious ceremonies when moving ancestors’ graves will be financed by the project.” Additionally, “[a] wall has been requested by the local community [which] will be built to separate the village graveyard from the construction worker camp.” Further, bank documentation projects a “[l]oss of traditional crafts. Villagers who have preserved hand weaving and brocade or bamboo weaving skills might not be able to continue or transmit their craft after resettlement.” Further, there is a potential “erosion of downstream historical/cultural artifacts.”

Right to Food-

This right is triggered due to the projected impact that “most project-affected households will be severely affected on their agricultural land. The capacity of these households to produce for their sustenance will be seriously impaired. Replacement agricultural land, the first priority stated in consultations, is an option that will be provided to both to relocated households and households affected by land loss only, in accordance with the resettlement policy framework.” While full use of the reservoir body is planned, “fishing resources are expected to decline after a few years of reservoir operation.”

Right to Freedom of Expression, Assembly and Association-

Bank documentation states that “[c]ollective assets and public works are [going to be] affected in 7 communes (Thanh Xuan, Phu Xuan, Phu Son, Phu Le, Phu Thanh, Trung Thanh, Van Mai) including one elementary school, one nursery school, one commune health station, one community house.” Additionally, “[s]chool dropout rates might increase among relocated households, particularly girls, due to income shock and the peak of labor during resettlement.”

Right to Health-

The right to health is expected to be impacted in a variety of ways. Firstly, a commune health station will be adversely affeted by the dam construction. Further, bank documentation states “[t]he presence of a large number of mostly male workers creates a risk of HIV/AIDS and other sexually transmitted diseases (STDs), especially for women, compounded by the risk of more prevalent drug use. Additionally, “During operation phase: The reservoir is likely to increase the presence of disease vectors. The health system will encourage use of mosquito nets. However, vulnerable households so far unaffected by mosquitoes might fail to use them. Households using rivers for their livelihoods and hygiene might use the reservoir water body for these purposes and be affected by waterborne vectors.”

Right to Housing and Property-

Bank documentation states that due to reservoir flooding, “[t]he majority of households are losing houses, residential land and agricultural land (often with bamboo plantations).” Those households to be relocated have the option to choose a new location independently, or move to one of the resettlement sites. While “resettlement [is] for land only, replacement land will be provided with a Land Use Rights Certificate (LURC) at no cost to the households and in the name of both husband and wife.” The Environmental and Social Impact Assessment states that “the cumulative number of households impacted by land acquisition under each project element is 2,002 (5,839 people).” “The planned resettlement sites are located in four of the communes affected by resettlement, so that most relocated households moving to a planned site will remain within their commune of current residence, and often within the boundaries of their village.” It is estimated that 517 households “(out of 1,994 households) will have to relocate. These households reside in 30 villages and hamlets at present.” Additionally within this region, three areas of paddy fields will be flooded.

Right to Livelihood-

This right is triggered because “25 existing villages, 4 hamlets, and one DSCL area in 11 communes have been identified as having livelihoods impacted by the reservoir and construction site.” The project is expected to both “physically displace […] and alter the livelihoods of several upstream and downstream communes.” Livelihoods will particularly be impacted for those working in agriculture and forestry, including on bamboo plantations.

Right to a Healthy Environment-

Biodiversity is central to a healthy environment. The Environmental and Social Impact Assessment states that “[t]he creation of a physical barrier due to the Hoi Xuan dam shall directly impact aquatic life and alter species of biodiversity.” Additionally, sedimentation will be an effect of dam and reservoir construction. Further, bank documentation states that “the worker camp, in combination with the disruption of livelihoods during resettlement, also creates risks that might involve local residents of […] higher illegal drug trade and illegal wildlife trade.”

Rights of Marginalized and Discriminated Against Groups-

Bank documentation states that the overall poverty incidence in villages affected by resettlement is 79 percent. Additionally, in 36 percent of affected households all members are above the age of 60 years, and “68 households have a disabled or seriously ill member.” While Vietnam does not recognize indigenous groups, the hydropower project does take place in districts with a population mainly comprised of three ethnic minority groups: the Thai from the Tay-Thai ethno linguistic family, the Muong from the Viet-Muong ethno linguistic family, and the Kinh majority; the majority of displaced households belong to Thai and Muong groups. Further, the Environmental and Social Impact Assessment claims that women will be particularly vulnerable during the construction phase of the project. “It is likely that Thanh Xuan commune would become a food and entertainment area for drivers and construction workers. The presence of such a large number of mostly male workers with few followers creates a risk of (a) HIV/AIDS and other STDs, especially for women, compounded by the risk of drug abuse, and (b) unwanted pregnancies. The pressure of followers on the local health system might result in insufficient health services available to the local population. The worker camp, in combination with the disruption of livelihoods during resettlement, also creates risks that might involve local residents of (a) prostitution.”

Investment Description
  • Multilateral Investment Guarantee Agency (MIGA)

Bank financing: This project is funded by the Goldman Sachs Group (Asia) LLC, for VNECO Hoi Xuan Investment and Electricity Construction Joint Stock Company. The loan would be guaranteed by the Ministry of Finance acting for and on behalf of the Government of Vietnam. “The arranger [Godman Sachs (Asia)] has applied for a MIGA guarantee of up to $200 million for a period of up to 15 years against the risk of non-honoring of sovereign financial obligations.”
Borrower: Socialist Republic of Vietnam
Amount of bank loan or investment: 200 million USD
Total project cost: 200 million USD

Private Actors
Contact Information

Initial consultations have taken place in August of 2014, and the resulting concerns include compensation for land and livelihood, clearly defined living areas for workers as well as safety concerns regarding workers’ presence in the communities and the impact of both relocation and the presence of construction workers on the cultural life of indigenous peoples. Environmental concerns include the cutting of trees and the importance of adhering to environmental laws. Mitigating health issues during construction phase, such as the increase of dust, is questioned, along with the feasibility of mitigation measures.

Bank documentation notes that the “[d]isclosure of information about the project is necessary during project implementation. ESIA will be announced in Vietnamese at the affected CPCs by a minimum of 60 days prior to construction.” Further, according to the RLEMDP document, compensation to project affected families “will take place at least 5 months before land acquisition in most cases.”

While no specific dates for future consultations are available, the project implementation schedule is as follows.
The original board date was scheduled for September 21, 2015 – however this date has been indefinitely postponed.
April to June 2014: Arrival of construction workers
April to June of 2014 through June of 2018: Relocation of persons in the reservoir-affected area
January to March 2018: “Reservoir filling […] and start of downstream impact of the dam on fish resources”

To dispute grievances with the Land law, one can follow these steps of the national procedure:
“First step: If any aspect of the resettlement and rehabilitation program aggrieves any person, he/she can lodge an oral or written grievance with commune authorities. The CPC will resolve the issue within fifteen days from the date it receives the complaint.
Second step: if any aggrieved person is not satisfied with the decision in the first step, he/she can bring the complaint to the DPC within fifteen days from the date of the receipt of the first step decision. The DPC will reach a decision on the complaint within fifteen days.
Third step: if the aggrieved person is still not satisfied with the decision at district level, he/she can appeal to the Provincial People’s Committee within 45 days of receiving the decision of the DPC. The Provincial People’s Committee will reach a decision on the complaint within the timing regulated by Vietnamese law.
Fourth step: If the DP is not satisfied with the decision of the Provincial level, the case may be submitted for consideration by the District Court within 45 days of receiving the decision of the PPC. The District Court will reach a decision on the complaint within the timing regulated by the Vietnam’s law.”

The World Bank Inspection Panel is an independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by a World Bank-financed project. It is not necessary to exhaust the grievance mechanism procedures before accessing the Inspection Panel. If you submit a complaint to the Inspection Panel, they may investigate to assess whether the World Bank is following its own policies and procedures for preventing harm to people or the environment. You can learn more about the Inspection Panel and how to file a complaint at: http://ewebapps.worldbank.org/apps/ip/Pages/Home.aspx

ACCOUNTABILITY MECHANISM OF MIGA

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/