Vu Gia Thu Bon Basin Development SEA, Vietnam Jeremy Carew-Reid ICEM - Interna=onal Centre for Environmental Management 1

SEA objec=ves In assessing the hydropower plan for the Vu Gia Thu Bon River Basin, the SEA will:

•  Analyse cumula=ve impacts of various development scenarios and trends •  Provide recommenda=ons on alterna=ves in design and siLng of proposed hydropower projects •  Suggest feasible mi=ga=on op=ons and safeguards and monitoring programs in the basin •  Demonstrate and build capacity in SEA process and methods 2

Quang Nam Province, Vietnam

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Possible benefits from HP development in Quang Nam and Danang Development planning assump=ons cite the following benefits to Quang Nam and Da Nang: 1.  2.  3.  4.  5.  6. 

Power genera=on Employment Sectoral development Provincial revenues Flood protec=on Regular water supply

The SEA set out to test whether or not these development assump=ons were valid?

C. C: SEA OF VU GIA – THU BON RIVER BASIN PLAN, VIETNAM 5

Mountains to reef

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Mountains

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Flood plain

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Delta

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SEA METHODOLOGY

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SEA context •  SEA of a plan: The hydropower sec=on of the Quang Nam Power Development Plan 2006 – 2010 with Vision to 2015 •  Plan “owner” is Quang Nam Department of Industry and Trade •  Status of plan – approved and in process of implementa=on •  Seeks involvement of all concerned provincial level agencies in Quang Nam and Da Nang in a basin wide assessment of the hydropower plan •  A pilot SEA ini=ated as a partnership between MONRE, MOI, EVN and the Quang Nam DONRE •  SEA took 12 months on a budget of USD500,000 12

Consulta=on steps in the SEA

First national workshop Methodogy and process

Scoping

Provincial Baseline Assessment Workshop 1 Definition of key issues for basin development

Baseline assessment

Provincial Baseline Assessment Workshop 2 Past trends and current situation in key issues

Future trends in key issues

Final Provincial Workshop Identification of opportunities and risks

Recommendations for enhancement and mitigation



Final National Workshop Presentation of impact assessment and mitigation measures

Discussion of recommendations

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Other SEA ac=vi=es •  •  •  •  • 

Three rounds of consulta=ons/mee=ngs with provincial government departments Provincial government departments review scoping and baseline assessment report with drac trend analyses Aqua=c biodiversity field survey Socio-economic field survey of vulnerable groups SEA and GIS training for provincial and district government experts 14

The SEA employed the following analy=cal steps 1.  2.  3. 

4. 

Issues: Iden=fica=on of 82 environmental, social and economic issues considered by the local stakeholders as important for development in the basin; Key issues: Consolida=on of issues list into 15 key environmental, social and economic issues/themes Outline of past and future trends in 15 key environmental, social and economic themes in the study area without the hydropower plan (linked to the expected development trends should no hydro-power plan be implemented); Outline of expected future trends in 15 key environmental, social and economic themes in the study area with the hydropower plan; 15

The SEA employed the following analy=cal steps 5.  The Big Concerns: Based on the trend analysis, iden=fica=on of four cri=cal strategic concerns associated hydropower development in the basin – (i) integrity of ecosystems, (ii) water supply, (iii) minori=es, and (iv) economic development in Quang Nam and Da Nang Provinces. 6.  Assessment of the synergisRc impacts of the hydropower plan on four cri=cal strategic concerns; and 7.  FormulaRon of a comprehensive set of recommended measures for preven=ng, reducing or off-seLng nega=ve impacts of the proposed hydropower plan and for enhancing any expected posi=ve impacts. 16

Step by step assessment and consultaRon 1st round of provincial consultaRons 82 environmental, social and economic issues 2nd round of provincial consultaRons § Trends in 15 themes without & with the HP plan § Iden=fica=on of the BIG CONCERNS 3rd round of provincial consultaRons Impacts of the HP plan on: ecosystem integrity, water supply, minori=es, and provincial economic development MiRgaRon measures 17

Trend analysis •  Iden=fies and interprets changes in the key environmental, social and economic issues over =me.

•  Traces key trends or pakerns in the study area (ii) over the past 10 years and (ii) with an outlook of up to 20 years ahead.

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Trend analysis In this SEA, trends are described mainly through

•  Qualita=ve story-lines describing the main drivers, geographic dimensions and key rela=onships with hydropower development – the risks and opportuni=es •  Quan=ta=ve analysis when data available •  Maps showing spa=al dimensions of key environmental, social and economic issues; and •  Simple graphs that used available data to illustrate changes in key issues over =me.

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BASELINE ASSESSMENT 20

Water resources Regular serious storms and flooding

•  Every year, at least 4 or 5 floods – at least one major flood annually •  Loss of life •  Loss of property and infrastructure •  Land degrada=on •  Reduced agriculture produc=on •  Losses in all economic sectors •  Season shortages of water and saline intrusion 21

Hydropower •  The Vu Gia Thu river basin is the country’s fourth largest producer of hydropower •  Some 60 small and medium and 10 large hydropower plants exis=ng or planned

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Irriga=on •  820 irriga=on facili=es, including 76 reservoirs, 546 dams and 202 pumping sta=ons. •  Projected to increase by 140% by 2020 23

Agriculture, forestry and fisheries account for 76% of household incomes

Forestry •  Legal and extensive illegal logging and NTFP collec=on

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Wide spread mining

Illegal gold mining in rivers

Bong Mieu gold mine

More than 10,000 people are involved in illegal mining in the basin. Sand mining

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Roads: Investment to increase substan=ally over the next ten 26 years - water pollu=on and sedimenta=on, biodiversity losses.

Ethnic minori=es

More than 50% living below the poverty line. Concentrated in mountainous areas.

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One of the world’s most important areas of biodiversity. Six protected areas and corridors

Biodiversity

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Hoi An world heritage site on the coast

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Cham world heritage areas

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Tourism Quang Nam akracted 240 ,000 tourists in May 2013 up 16% on May 2012

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IMPACT ASSESSMENT

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Power genera=on is cri=cal for na=onal economic development •  Power demand growing at about 15% a year (elas=city to GDP growth of about 2). •  Appearing as a cri=cal constraint on economic development. •  The Vu-Gia Thu-Bon river basin is es=mated to have an annual genera=on poten=al of 4.29TWhrs – about 5.1 percent of na=onal HP genera=on poten=al.

Power genera=on: Is it significant for the local economy? •  Power is not the constraint on industrial growth in Quang Nam (important constraints are infrastructure and labour quality). •  Power produced in Quang Nam is used outside the basin where there is greatest demand. •  [Improved distribu=on network in the basin will improve quality of supply (e.g. new distribu=on centre constructed for Song Tranh 2), but with marginal effect on the provincial economy.]

Employment crea=on – is it significant to the local economy? •  •  • 

Limited local employment in construc=on of HP projects. Marginal employment benefits in other industrial sectors linked to HP development. Long term but small employment in the opera=on of HP projects.

Sectoral development: 1 Forestry •  Loss of about 4-5% of forest in Quang Nam province. •  Over 10,000ha lost to reservoir construc=on, addi=onal losses due to road and transmission line construc=on. •  Windfall from reservoir clearance Fisheries •  Freshwater fish stocks declined over last 25 years •  Fragmenta=on of habitats due to HP may mean collapse and no chance of recovery •  Possibility of aquaculture in some reservoirs

Sectoral development: 2 Agriculture •  If HP facili=es managed only for power genera=on then possibility of reduced dry season flows and increased flooding in the wet season. •  If HP facili=es managed for mul=ple uses improved dry season flows and reduced flooding. •  Reduc=on in sediment and nutrient supply to agriculture. •  Upstream loss from inunda=on of produc=on land in reservoir areas not economically significant (although important to upstream communi=es).

Is there an overall economic benefit for the province? •  Power genera=on is unlikely to have significant knock-on benefits to provincial economic growth. •  Industrial GDP will increase due to HP but economic benefits to the province are marginal. •  Local employment is not likely to be significant. •  The balance between costs and benefits to affected economic sectors is uncertain.

Direct costs to provincial government budget of hydro power •  Degrada=on and subsequent maintenance of transporta=on infrastructure •  Long term support costs for resekled communi=es •  Health costs linked to HP development (on and off site) •  Cost of extra policing of construc=on sites/workers and operator performance •  Bank protec=on to safeguard high value infrastructure with increased erosion due to reduced sediment load

Is it a net gain or loss to provincial government budget? •  Most revenues from HP do not return to Quang Nam (Quang Nam is a budget deficit province). •  The annual budget delivered to the province will not be affected by revenues from HP in the short to medium term (while Quang Nam remains in deficit). •  The direct costs of HP to Quang Nam may leave the province worse off than before.

Overall hydropower trade offs in Quang Nam and Danang •  •  •  •  •  •  •  •  •  • 

Loss of sediment deposi=on Losses in agricultural land and produc=on Reduc=on in accre=on of delta and along coast Loss in fisheries produc=on Impacts on ethnic minori=es and reseklement Increase extremes of flooding Extensive losses in forests Biodiversity losses Saline intrusion Loss of life and property Song Bong 4 scheme

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Dak Mi 4 - Tested development assump=ons Conflict over impact of proposed development on Danang’s water supply The SEA considers that the diversion involved in the current design of the Dak Mi 4 project will create unnecessary and far reaching negative environmental, social and economic impacts in the Basin. The favoured mitigation is to redesign the project without the diversion. This will reduce the power capacity but eliminate the most serious negative risks. 42

Dak Mi 4 scheme •  2013 - Released the excess water without any prior announcements, flooding residents and farms downstream •  Diver=ng water from Danang •  Da Nang forced to build another pumping sta=on along the Cu De River due to shortages and saline intrusion •  Da Nang raised water price by 10 percent since February 2014 to offset the higher expenses on water supply •  Ini=ated a lawsuit against the Quang Nam Department of Industry •  Danang repeatedly asks for water releases from three hydroelectricity plants – Song Bung 4, A Vuong, and Dak Mi 4 43

Song Tranh 2 Hydropower Plant •  Several earth quakes create cracks and leaks in Dam wall •  Thousands of households downstream fear dam failure (2012)

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AVOIDANCE, MITIGATION AND ENHANCEMENT 45

Seven strategic principles iden=fied by stakeholders guiding mi=ga=on and enhancement ImplementaRon of the HP Plan should adhere to seven principles: 1.  Net provincial economic gain: Quang Nam and Da Nang Provincial economies should not be lec worse off by the plan 2.  User pays: HP operators should contribute to mee=ng all direct and indirect environmental and socio-economic costs of the plan implementa=on 3.  MulRple use: HP projects with reservoirs should be designed and managed for mul=ple use of water resources 46

Principles guiding mi=ga=on and enhancement 4.  Safe operaRons: Implement opera=onal regimes and ins=tu=onal arrangements to reduce droughts and floods and prepare for disasters 5.  Net biodiversity gain: Avoid and minimize harm to biodiversity and introduce conserva=on offsets 6.  Net gain in minority well being: Reduce poverty and increase food security in affected minori=es 7.  The precauRonary principle: Take care to avoid permanent loss of provincial assets

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1. Net provincial economic gain principle (i) Increasing provincial employment –  Stronger local labour requirements for HP developers.

(ii) PromoRon of local servicing industry –  economic incen=ves and technical supports

(iii) Structural adjustment programs for nega=vely affected sectors –  eg, retraining, credit schemes, subsidies

(iv) HP tax revenues remain in the province –  Natural resources tax revenues

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2. User pays principle Operators must pay for the maintenance of natural resources they use and natural and socio-economic systems they affect •  Up-front lump sum payments from HP developers •  River basin fund under a strong river basin management authority with funds allocated against site and basin wide plans

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3. MulRple use principle •  Mixed messages and expecta=ons – designed as sole purpose or mul=ple use projects? •  HP operators must comply with government policies: PM’s Direc=ve on opera=on rules for reservoirs (2006), the Water Law and the Environmental Protec=on Law all promote mul=ple-use of water resources •  MulRple use water management plans must be prepared with user involvement and implemented for each project with a reservoir •  A river basin management authority is needed to oversee plan implementa=on building on exis=ng experience and structures.

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4. Safe operaRons principle •  Drought and flood control plan - get it right! To guard against extreme condi=ons –  eg define rule curves to set the limits

•  InsRtuRonal arrangements to manage the plan

–  establish a VG-TB Flood and Drought Control Board – with expert secretariat and budget and mandate for daily interven=ons

•  Emergency preparedness - preven=on and planning for preparedness in case of catastrophic failure situa=ons –  eg dam breaks, spillway failures

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5. Net biodiversity gain principle •  Avoid and minimize harm to biodiversity in each HP project •  ConservaRon offsets – in cases of unavoidable harm to biodiversity, each project should take conserva=on ac=ons to compensate (eg compensatory forestry) •  Environmental flows policy (on a basin wide basis) •  Intact rivers policy – to concentrate HP on the same rivers and preserve others in their natural state. –  Lowlands – Son Tien/Thu Bon from source to sea. –  Highlands – Some tributaries above the Song Tranh 2 impoundment.

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Adop=on of intact rivers policy by QN Provincial Government

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6. Net gain in minority well being principle The plan should not lead to increased poverty and food insecurity in minority communi=es

•  Long term adjustment program •  Integrated government service delivery •  Investors pay over life of HP projects

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7. PrecauRonary principle An over arching principle - •  A more cauRous approach to HP development in the basin given the many uncertain=es which remain concerning the risks to natural, social and economic systems (pace and scale). •  The precau=onary principle should be applied when there is good reason to believe that harmful effects may occur, and when the risk cannot be assessed with sufficient confidence to adequately inform decision-making.

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Mi=ga=on responsibili=es for different administra=ve levels Recommen dation

Project specific

Provincial

River basin

National

1 2 3 4

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Proposed measures related to specific projects •  Not proceed with Song Giang 1- 4, Dac Se, and possibly Dac Chong and Dak Mi 2 and some elements of Dak Mi 1 in Kontum – they contradict government policy under the Forest Protec=on Law and Decree 186 which prohibits such development inside protected areas •  Dak Mi 1: Main elements are located adjacent to and directly impac=ng on SUF of known biodiversity importance - the project should be reviewed and redesigned or cancelled. 57

Proposed measures related to specific projects Dak Mi 4 •  Move diversion tunnel and power house to the main river (Son Cai) so flow would stay in Son Cai (no diversion) – the favoured op=on •  If diversion proceeds – significantly reduce diversion/turbine capacity •  Riverside protec=on and river crossing bridges for Ngon Thu Bon required 58

Proposed measures related to specific projects Song Bung 5 •  Stabilise flows from this most downstream power project by opera=ng turbines at steady load

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Proposed measures to be considered at provincial level •  Improved coordina=on of hydropower development with forest management •  Moratorium on HP projects within SUFs or directly impac=ng on SUF of interna=onal biodiversity importance •  Improved control of mining •  Proper waste management during HP construc=on •  Review and revision of Quang Nam Provincial Conserva=on Strategy

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Proposed measures for the river basin management level Pilot a VG-TB river basin management authority with: •  An adequately staffed technical secretariat •  Adequate opera=onal budget •  Clear mandate to facilitate cross sectoral basin wide planning and management and •  Which func=ons on the basis of an integrated river basin plan respected by all central and local government agencies Pilot an intact rivers policy 61

Proposed measures for the naRonal level •  MONRE to consider the SEA recommenda=ons and integrate them into a Decree on integrated river basin planning and management •  Authorise and support the pilo=ng of the VG-TB river basin management authority •  Establish regula=ons for compensa=on and adjustment support for communi=es directly affected by environmental degrada=on due to HP (building on relevant provisions of the LEP) •  Review the adequacy of EIAs of HP projects as the basis for proper HP project planning and mi=ga=on

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Recommended follow up Immediate steps to act on the SEA Report 1.  The Quang Nam DOI assessment of environmental effects of the hydropower plan should review and elaborate the SEA outcomes 2.  The SEA project steering commikee should sekle arrangements for formal appraisal and ac=on on the SEA report 63

Thank you

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