decision-making, planning and compliance - … planning and compliance the report of the world...

Decision-Making, Planning and Compliance

167The Report of the World Commission on Dams

Chapter 6:

Decision-Making, Planning andCompliance

The previous chapters suggest

that the main challenge for

water and energy resource developers

in the 21st century will be to

improve options assessment and the

performance of existing assets. This

will require open, accountable and

comprehensive planning and decision-

making procedures for assessing and

selecting from the available options. It

also calls for monitoring programmes,

evaluation procedures and incentive

mechanisms that ensure compliance

with project commitments, especially

in the area of environmental and social

performance. To do this we need a

Chapter 6

Parting the Waters: The Report of the World Commission on Dams168 Dams and Development: A New Framework for Decision-Making

better understanding of why large dams wereproposed and developed, and why failures inperformance and impacts on ecosystems andaffected people are still not properly

accounted for, monitored orresolved. This chapter draws onthe WCD Knowledge Base tocharacterise the critical problemsencountered in the past, analysetheir underlying causes andchronicle recent developmentsthat point the way forward, thisis explored in the remainder ofthe report.

As a development choice, largedams often became a focal pointfor the interests of politicians,dominant and centralised govern-ment agencies, international

financing agencies and the dam-buildingindustry. Involvement from civil society variedwith the degree of debate and open politicaldiscourse in a country. However, there hasbeen a generalised failure to recognise affectedpeople and empower them to participate inthe decision-making process.

Once a proposed dam project passed prelim-inary technical and economic feasibilitytests and attracted interest from governmentor external financing agencies and politicalinterests, the momentum behind the projectoften prevailed over further assessments. Inany event project planning and appraisal forlarge dams was confined primarily to techni-cal parameters and the narrow application ofeconomic cost/benefit analyses. Historically,social and environmental impacts were leftoutside the assessment framework and therole of impact assessments in project selec-tion remains marginal even in the 1990s.The influence of vested interests in thedecision-making process and the narrow,technical approach to planning and evalua-

tion have meant that many dams were notbuilt based on an objective assessment andevaluation of the economic, social andenvironmental criteria that apply in today’scontext.

Conflicts over dams have heightened in thelast two decades. This results from dissatis-faction with the social and environmentalimpacts of dams, and their failure to achievetargets for costs and benefits. It also stemsfrom the failure of dam proponents andfinancing agencies to fulfil commitmentsmade, observe statutory regulations andabide by internal guidelines. In some cases,the opportunity for corruption provided bydams as large-scale infrastructure projectsfurther distorted decision-making, planningand implementation. Whereas substantialimprovements in policies, legal require-ments and assessment guidelines haveoccurred, particularly in the 1990s, itappears that business is often conducted asusual when it comes to actual planning anddecision-making. Further, past conflictsremain largely unresolved due to a numberof reasons, including the poor experiencewith appeals, dispute resolution and recoursemechanisms.

The key to improved performance in thefuture lies in screening out undesirable damsprojects as part of a process that considersthe full range of options for water andenergy power services, and responds posi-tively to changing priorities. These effortsmust find ways to ensure that performancein living up to existing institutional arrange-ments governing the planning and projectcycle is improved.

The chapter groups these topics under threeheadings: decision-making, planning andcompliance.

Once a proposed damproject passed

preliminary technicaland economic feasibility

tests and attractedinterest from

government or externalfinancing agencies andpolitical interests, the

momentum behind theproject often prevailed

over furtherassessments.



Decision-making and thePolitical Economy of LargeDamsLarge dams arise from a series of decisionstaken from the beginning of the planningprocess through to the final approval of aproject and financial closure. At each stagedifferent actors are involved, includinggovernment agencies, public or privateutilities, interested parties from the region,financing agencies, consulting and construc-tion companies and equipment suppliers.Affected people and NGOs are increasinglyinvolved as well, often through people’smovements against dams. Each of these groupspromotes its own self-interest throughout theprocess, ranging from profits and politicalpower to property rights and livelihoods. Thissection looks at the interplay of these forces inthe context of rivers, dams and the develop-ment of water and energy resources.

Similar pictures emerge for the industrial-ised and the developing worlds. Planningprocesses are controlled by single-purposegovernment agencies or public utilities andthe decision to build is taken as the outcomeof a fairly limited set of political interactionsat political levels commensurate with thesize and importance of the dam. In the caseof developing countries, the selection ofalternatives for meeting water and electricpower needs was, and is, frequently con-strained by preferential access to interna-tional finance and the pre-existing interna-tional expertise in large dams rather thanalternatives. Recently, restructuring andreform of the energy and water sectors inmany countries – both industrialised anddeveloping – has changed the role of gov-ernment in decision-making and planning,with private investors and corporationstaking both financing and ownership rolesin these projects.

State-led decision-making

Governments were the proponents forpractically all large dams and many largedams were built by government agenciesthemselves.1 Centralised agencies or utilitieshave traditionally managed the water andenergy sector within government. Like mostmajor development projects, decision-makingprocesses around large dams have beencentralised and technocratic in virtually allparts of the world, particularly through the1970s. The exception may be certain largedams built as part of regional developmentprojects where local political interests haveplayed important roles in promoting projects –often in conjunction with their representa-tives in central government.

Indeed, the degree to which decision-making surrounding a dam was politicisedand the level at which the decision wasmade varied tremendously with the project.Large and spectacular dams have often beenseen as symbols of development and nationbuilding, a potent demonstration of man’sability to harness nature’s forces and atangible ‘deliverable’ for politicians, usuallyfunded from the public purse. The WCD CaseStudies demonstrate that for very large damsthe decision to build often was taken by headsof State, whereas smaller facilities weretypically guided through the process by therelevant agencies or utilities (see Box 6.1)

Dam-building in industrialisedcountries

In industrialised countries, alliances be-tween local political interests and powerful,single-interest agencies and utilities respon-sible for water and power developmentdrove planning and decision-making onlarge dams. In the United States, thepolitical desire to settle and develop theland and resources of the western states

Chapter 6


encouraged the construction of large dams.At the same time, however, laws governedthe planning and approval process. Theyrequired agencies and utilities to perform along series of surveys, hold public hearings,and conduct inter-agency reviews, includingcost-benefit analysis. The appropriation offunds ultimately required approval by the

Congress, which further scrutinised theproject plan.2

Outside the United States, the reconstruc-tion of Europe after World War II led to theconstruction of many large dams. TheMarshall Plan ushered in the era of foreignaid with the transfer of $17 billion to helprebuild Europe.3

During the cold war era, centralised, state-driven consolidation of resources throughinterventions such as the building of largedams was the hallmark of communistregimes. Most of the political and economicdecision-making processes for the large damsbuilt in eastern and central Europe weretop-down and technocratic. Besides thecentral government, other stakeholders andthe general public were not in a position toexpress their concerns or represent theirinterests in the decision-making process.4

Dam-building in developingcountries

The success of the Marshall plan in Europeled to great optimism that the key to nation-al development was investment in capitalstock. The International Bank for Recon-struction and Development (IBRD), createdto help finance the reconstruction of war-torn European countries, became a focalpoint for these efforts and, alongside bilater-al development banks, helped export themodel of centralised nation building foreconomic development. Dams fit well withthis model of foreign aid and were often thefirst visible sign of IBRD (later called theWorld Bank) presence in a country.5

Role of foreign assistance6

Both the multilateral and bilateral develop-ment banks played a significant facilitatingrole in getting Asia, Africa and Latin

From the WCD Case Studies, the predominant role of the State can be seenthroughout. In the Glomma and Laagen Basin the Norwegian government wasactive in licensing hydropower projects initially to promote development inisolated river valleys, then to feed power based smelting industries and otherheavy industries in the period after the Second World War. Hydropowerdevelopment was also promoted to support specific districts in periods ofdepression and high unemployment.

Similar government intervention is demonstrated at the Grand Coulee project inthe United States where a presidential decision was made to proceed with theGrand Coulee project in 1932. The project formed part of the federal govern-ment’s campaign to bring the country out of economic depression, provideconstruction jobs to eight thousand people, reclaim land for irrigation andreduce price manipulation by private power companies, thereby making publiclygenerated electricity more widely available at low cost.

The planning, implementation and initial operation of the Kariba project wasdone by the Inter-Territorial Power Commission of the then Central AfricanFederation (the former colonies of Northern and Southern Rhodesia now Zambiaand Zimbabwe) in the 1940s. The priority was to deliver power to the copperindustry owned by multi-national corporations.

On the Orange River in South Africa, the proposal to build a major dam andwater diversions scheme was called for by Prime Minister Hendrik Verwoerdfollowing the Sharpeville massacre in 1960 that undermined confidence in thegovernment and led to outflows of foreign capital. One primary motivation wasto demonstrate national capacity to build major projects and to restoreinternational confidence in the country’s development and investment potential.

Source: WCD Case Studies

Box 6.1 WCD Case Studies: political decisions to build large dams



America started in the dam business. TheWorld Bank began financing large dams in the1950s, committing on average over $1 billionper year to this purpose (Figure 6.1). For theperiod from 1970 to 1985 this amount hadrisen to $2 billion per year. Adding in financeby the Asian, Inter-American, and AfricanDevelopment Banks, as well as bilateralfunding for hydropower, suggests total financ-ing for large dams from these sources of morethan $4 billion annually at the peak of lendingduring 1975-84.

Bilateral and multilateral developmentfinancing agencies have helped financestudies needed for dam construction, andlent money for the construction of thedams themselves. They identified develop-ment goals through strategic sectoralplanning documents, provided resourcesand technological capacity to conductfeasibility studies, and created basin-wideinstitutional frameworks to plan andimplement dams. Although the proportionof investment in dams directly financed bybilaterals and multilaterals was perhaps lessthan 15%, these institutions played a keystrategic role globally in spreading thetechnology, lending legitimacy to emergingdam projects, training future engineers andgovernment agencies, and leading financingarrangements.7

The extent and nature of this influencevaried from country to country and fromregion to region. The India Case Studylocates the orientation of Indian plannersand engineers towards dams as the princi-pal response to water resource develop-ment in the 1950s and 1960s when largenumbers of dams were first built. Thispredated the World Bank’s major involve-ment in India. The Bank began lending inearnest to India in the 1970s at a time whenpolicy reforms removed restrictions on the

ability of individual states to directly accessforeign assistance and provided incentives fordoing so.

Since then World Bank loans to India havedoubled or tripled each decade. By oneestimate loans for irrigation, drainage andflood control are 14% of World Bank loansto India.8 The India Case Study reportsthat, in total, foreign assistance providesabout 13% of public sector outlays in theirrigation sector, with the World BankGroup accounting for almost 80% of thisassistance. Thus, in India the World Bankdid not provide the initial impetus behind

Figure 6.1 Development assistance for large dams, 1950-1999

Source: aSklar and McCully, 1994 eco029, WCD Submission and World Bank,2000; bOECD, 2000a; cIDB, 1999; dLagman, 2000; eAfDB, 1998; fEBRD,1996, 1999, 2000a, 2000b.Notes: Data for bilateral agencies also includes financing by the Commission ofthe European Community and includes only all hydropower investments from1975 to 1997.

25

20

15

10

5

0

US$

Bill

ions

, 199

8 p

rices

1950

-54

IDBc

EBRDf

Bilateralb

AfDBe

World Banka

ADBd

1955

-59

1960

-64

1965

-69

1970

-74

1975

-79

1980

-84

1985

-89

1990

-94

1995

-99

Chapter 6


the tendency to choose dams as the responseto water and energy needs, but ratherprovided continued and increasing externalbacking to the large number of dams whichwere built from the 1970s onwards.

As in the case of India, the WCD ChinaCase Study shows that dam building waswell advanced prior to the entry of foreigndonors. Brazil also follows this pattern.Comparison of statistics on large hydropow-er dams commissioned in Brazil between1950 and 1970 and the finance provided bythe World Bank and the Inter-AmericanDevelopment Bank (IDB) show that justover 10% of the 79 large dams listed in theInternational Commission On Large Dams(ICOLD) database received financialassistance from these donors. However, thefigure rises to over 30% of the 47 dams forthe 1970-1990 period. Foreign assistance,thus, did not drive the selection of dams asan option but did provide significant fi-nance during peak dam-building periods.

The picture differs for smaller countries. InColombia, multilaterals helped fund the firstlarge dam and 40% of the subsequent 50large dams appearing in the ICOLD data-base. Multilaterals have played a particularlystrong role in countries that have not builtmany dams and do not have local planningand construction expertise and capacity. InCosta Rica, which relies on hydropower forroughly 90% of its power generation, theWorld Bank and IDB had directly supportedover half of the installed hydropower capacityby the mid-1990s.9 In Tanzania, bilateralagencies and the World Bank have supportedessentially all the large hydropower dams.10 Inthese smaller countries the role of financingagencies and the firms they employ toundertake preparatory studies, designprojects and build dams can be significant.

Only in the late 1980s and early 1990s hasthis lending activity tailed off in the face ofincreasing public scrutiny and criticism bycivil society (see Figure 6.1). The declinefollowed unfavourable independent reviewsof two high profile projects that weresupported or considered by the World Bank– Sardar Sarovar in India and Arun III inNepal. A number of other factors contribut-ed to the shift away from large dam projects.They include:

■ continued criticism of the pervasive‘approval culture’ of the World Bank andits willingness to promote large infra-structure projects;

■ internal evaluations of the Bank thatdocumented ever-increasing ‘appraisaloptimism’ despite evidence of pooreconomic and financial performance byprojects in the water supply and irriga-tion sectors;

■ failure to meet the Bank’s povertyalleviation goals; and

■ growing recognition of the severity of thesocial and environmental impacts ofdams.11

More recently, a gradual shift towards anincreased role for private sector finance inhydropower and, to a lesser extent, watersupply, have also led the banks to move intoa facilitation role with the emphasis onpublic-private partnerships and risk guaran-tees. Part of the financing has now beentaken over by export credit guaranteeagencies in donor countries that finance andunderwrite risks taken by home-countryengineering firms and equipment suppliersparticipating in projects abroad.

Role of industry and bilateralfunding

Ultimately it is the country governmentthat is responsible for taking the decision to



build a dam. However, governments arenaturally influenced by internationalexpertise and financing opportunities (seeBox 6.2). Once a government is politicallycommitted and construction has begun, thenature of large construction projects makesit extremely hard to change course, even ifthere are cost overruns, unforeseen negativeimpacts, or benefits are less than predicted.The public purse generally carries the risk ofpoor economic performance, and there hashistorically been no consequence or liabilityfor building under-performing dam projects.

For industrialised countries with a history ofdam-building and expertise in relatedequipment, bilateral overseas aid has oftenbecome a vehicle for supporting localindustry by exporting this expertise throughaid programs tied to the purchase of servicesor equipment from the donor country.12

Conflicts of interest have inevitably resultedbetween the financing agency’s interest toprovide contracts for home-country compa-nies and the borrower or grant recipient’sinterest in providing appropriate andaffordable development. In the case ofbilateral agencies these conflicts of interestmay be exacerbated in smaller, poorercountries where the donor plays a morecentral role in financial matters (see Box6.3).

Professional associations such as ICOLD,the International Hydropower Association(IHA) and the International Commissionon Irrigation and Drainage (ICID) have alsoplayed an important role in setting standardswithin their technical disciplines andpromoting professional capacity related tothe building of large dams and their associ-ated infrastructure. These are internationalassociations made up of members fromgovernment and industry from industrialised

and developing countries alike. The associ-ations play an important role in buildingcapacity of member countries by collectingand disseminating technical and otherinformation and holding annual meetings topromote formal and informal professionalexchange.

Decision-making on sharedrivers

The flow of water through States or prov-inces sharing a basin links them inextricablyto a finite and common resource (see Box6.4). Yet water resources and energy plan-ning has frequently been undertaken at thelevel of administrative or political units thatdo not coincide with the watershed. As a

While the WCD Case Study dams built in the United States and Norway reliedexclusively on national capacity, the Case Study dams in developing countriesreveal the involvement of foreign firms in master plans, inventories, feasibilitystudies, design, construction and financing. In the case of Tarbela the WorldBank even co-ordinated the Indus Water Treaty signed between India andPakistan that gave Pakistan the opportunity to build Tarbela.

In Turkey, the comprehensive development of the water resources in CeyhanBasin was outlined first in a 1966 study by a foreign consulting firm financed bythe United States Agency for International Development (USAID). This docu-ment has guided investments in the basin for the last thirty-five years. The USBureau of Reclamation, through USAID, undertook the initial study of the waterresources of the Tocantins Basin in 1964, where Tucuruí was later built. For thePak Mun project in Thailand, French engineering firms conducted the initialfeasibility studies in the 1970’s and early 1980s.

In all, the World Bank provided financing for four of the Case Study dams(Kariba, Tarbela, Aslantas and Pak Mun). Kariba was partially financed by thecopper companies for which much of the power was destined. The decision ofmulti-national aluminium producers to invest in the Carajas region of Amazoniawas subject to the decision to proceed with the Tucurui hydropower complex.Financing for the project came from internal sources and French banks.

A recent NGO report provides details on the role of 12 European companies inthe design, construction and supply of equipment to 84 large dams, many ofthem major dams in developing countries. The report also lists the furtherinvolvement of these companies in technical studies of a larger sample of dams.Many of the projects listed are financed by home-country bilateral agencies,export credit agencies and commercial banks, as well as by the multilateraldevelopment banks. The report documents the billions of dollars that have goneto the European ‘dam building’ industry from projects in developing countries.

Source: WCD Case Studies and Lang et al, 2000

eco041, WCD Submission

Box 6.2 WCD Case Studies and submissions: foreign involvement indam projects

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means of water storage, dams play animportant role in the management of theresource and its allocation to different useswithin and between countries. In thecontext of shared rivers, dams are a technol-ogy that allows an upstream riparian topartially ‘privatise’ the river by storing andusing water and thereby effectively exclud-ing downstream riparians from access to thewater. In the downstream context, whenfaced with dwindling supplies from up-stream, dams provide downstream riparianswith a practical means of replacing lost dryseason flows by storing wet season flows.

Relative power relationships within basinsdetermine to a large extent how individualcountries interact and whether otherriparians are consulted concerning damprojects. A regional power that holds anupstream position is in a better situation toimplement projects without consultation,and this has been the case in Turkey, Indiaand China. In other cases powerful down-stream neighbours whose existing resource

A 1985 Canadian study provided Tanzania with a national energy developmentplan that led to the decision to redevelop the old Pangani dam, raising itsinstalled capacity from 17 MWs to 66 MWs. The Finnish International Develop-ment Agency (FINNIDA) funded the $2.5 million feasibility study in 1989-90,which was carried out by Finnish and Norwegian consultancy firms. Given theclose relationship between the Finnish firm and FINNIDA, the firm not onlywrote the terms of reference for the feasibility study but later was also givencontracts to procure supplies and supervise construction (jointly with itsNorwegian partner). In the event, the feasibility study confirmed that the damwas the best option to meet sector needs and the EIA concluded that noadverse effects existed that would prejudice the project.

As the Finnish, Swedish (SIDA) and Norwegian (NORAD) aid donors planned tofinance the project, SIDA hired a Swedish firm which reviewed and confirmedthe results of the feasibility study. The three Nordic donors subsequentlyapproved grants to Tanzania to cover the costs of the project. While the aid wasnot ‘tied’, no competitive bidding was undertaken for contracts, rather, checkswere made to ensure that prices offered by selected firms were competitive. ANorwegian firm supplied the turbines, a Swedish firm the generators and controlequipment and a number of Finnish firms were involved in the civil works andtransmission lines, including the parent company of the consultancy firm thatundertook the feasibility study.

While the final 1991 project document stated that the hydrological risks to theproject were small, there was sufficient concern over the availability of watersupply to the project to make the Nordic donors insist on a water basinmanagement board as a condition of the funding agreement. This decision hasengendered conflicts between local, national and donor interests. The waterboard was to institute water fees to limit irrigation withdrawals and ensure anadequate supply of water for power generation at Pangani. With work underwayin the early 1990s concern mounted as precipitation in the basin and flows at thesite fell well below the 1981-92 averages. This was compounded by a lack ofinformation on the extent of upstream withdrawals which fed traditionalsmallholder agriculture by the Chagga people on the slopes of Mount Kiliman-jaro, as well as a series of large-scale projects financed by other internationaldonors.

The political repercussions of charging smallholders in order to limit their wateruse so that electricity could be generated for consumption by industry andurban households soon manifested themselves. By 1994 resistance to the boardwas evident in local opposition to the tariffs. As it turns out smallholderirrigation by the Chagga is a well-studied example of a centuries-old traditionalsystem for the management of common property – replete with a local watermanagement ‘board.’ This Council of Furrow Elders is formed by elders of aspecialised clan – the Wakomfongo – that plan and direct the construction offurrows as well as co-ordinate water distribution and maintenance of the furrows.Along with elders of other clans the Council administers the furrow system andresolves any problems that arise.

The potential for negative effects on the food security of traditional farmers as aresult of the tariffs imposed by the official water board was acknowledged infurther studies in 1995 by the original authors of the feasibility study. Yet theplan to transfer political control over water from local to centralised authoritywent ahead, laying the foundation for future struggles between the local peopleand the Tanzanian utility that operates the dam. The water board, which mustmediate in this regard, is constituted by five government representatives andthree representatives from each of the regions traversed by the Pangani river.No provisions were made for representation of the Chagga or other traditionalwater users on this board. The result is that Nordic development assistance hadthe paradoxical effect of undermining local resource management.

Source: Mung’ong’o, 1997; Usher, 1997a, eco026, WCD Submission

Box 6.3 Nordic influence in the Pangani Falls Redevelopment Project,Tanzania

As shown in Chapter 1, a significant proportion of theworld’s rivers cross international boundaries. Inaddition to these international basins, there are manyothers that cross provincial or state boundaries withina country where these states have a mandate tomanage water resources. Examples include India,Australia and the United States.

Co-operation between riparian states is not new.Since AD 805 approximately 3 600 water relatedtreaties were signed between nations. Although themajority of these relate to navigation and nationalboundaries, approximately 300 are non-navigationaland cover issues related to water quantity, waterquality and hydropower. Of these, many are limited torelatively narrow aspects and do not extend principlesfor integrated resource management throughout thebasin. As pressure on resource use intensifies, anincrease in conflicts over water may be expected andgreater co-operation will be required.

Source: WCD Thematic Review V.3 River Basins

Box 6.4 Co-operation in shared river basins



base may be affected by water resourcedevelopment upstream may hold the devel-opment plans of upstream States in check.This has been the case historically, forexample, with Egypt and Ethiopia.13

In many cases, one of the key obstacles toreaching international agreements lay inlooking at water as a finite commodity andtrying to allocate it on a proportional basisto different uses in different countries. Incases of water scarcity, this approach oftendoes not give the flexibility needed to meetthe multiple claims along the river course.In these circumstances it has proved helpfulto extend sharing agreements to include thebenefits generated by the water. The divi-sion of benefits under the 1968 ColumbiaTreaty between Canada and the UnitedStates on the Columbia River reported bythe Grand Coulee Case Study is a case inpoint.

Arrangements for water sharing at provin-cial level are facilitated by the ability of thefederal government to impose overarchingregulatory frameworks, financial incentivesand sanctions to ensure that provincescollaborate. A similar supra-national body isoften lacking between nations and the mosttransparent decision-making on internation-al rivers therefore lies within the frameworksof the many international protocols andagreements that clearly lay out the planningstages at which information should beexchanged and consultation occur. Efforts toestablish accepted international principleshave been negotiated through the UN forover 25 years, leading eventually to the UNConvention on the Law of Non-NavigableUse of International Watercourses. Howeverit looks unlikely that the Convention willenter into force due to the reluctance ofStates to ratify it.

This situation leaves a number of keyinternational rivers lacking a basin-wideagreement that defines a process for estab-lishing equitable water use and thereforewith no framework for good faith negotia-tions with other riparian States. In theabsence of such agreements some Stateshave taken unilateral action, continuing tobuild dams without adequate informationexchange or consideration for impactselsewhere in the basin. While this mayconstitute disregard for emerging interna-tional practice and the standards governingpeaceful relations between riparians, it alsoreflects the political economy of the up-stream-downstream relationship. As long asthe political and economic costs of engagingin such behaviour are small relative to theeconomic benefits gained there is littleincentive to engage in collective discussion.Clearly, as the demand for water rises andbecomes ever more scarce, dams built onthese international rivers are likely toincreasingly affect regional relations.

Planning and EvaluationIn general project planning and evaluationfor large dams has been confined primarilyto technical parameters and the narrowapplication of economic cost-benefit analy-ses. Decisions of this nature were typicallytaken with little participation or transparen-cy. In particular, those to be negativelyaffected by a dam were (and are) rarelyinvolved in this process.

The primary concern with planning process-es is that once a proposed dam project hassurvived preliminary technical and econom-ic feasibility tests and attracted interest fromfinancing agencies and political interests,the momentum behind the project and theneed to meet the expectations raised often

Chapter 6


prevail over further assess-ments. Environmental andsocial concerns are oftenignored and the role of impactassessments in selecting op-tions remains marginal. Onceoperations have been initiatedthere is a generalised lack ofeffort to monitor, assess and

respond to operational concerns and chang-ing values surrounding dams. Again, thepolitical economy of large dams and thedominant power of a small number of actorsoften drive these planning and evaluationprocesses. In some cases, such as Norway,Quebec, Brazil or Nepal, a high level politicalchoice made in favour of hydropower hasdriven subsequent choice of technology (largedams) and project development.

Participation and transparency

The WCD Knowledge Base shows that themost unsatisfactory social outcomes of past

dam projects are linked to cases whereaffected people played no role in the plan-ning process, or even in selecting the placeor terms of their resettlement. In addition,governments have frequently committedthemselves unquestioningly to large infra-structure projects, whose merits have notbeen tested by public scrutiny, withouthearing alternative views on the choice ofdevelopment objectives for a village, regionor country. As pointed out in Chapter 4, theinvolvement of displaced people has theadvantage of enabling them to contribute tothe benefit stream of a project and thus toachieve different outcomes.

Participation and transparency in decision-making processes involving large dams –again like most development projects – wasneither open nor inclusive through the1980s. Of the 34 dams in the Cross-CheckSurvey that involved resettlement of dis-placed people, only 7 required participationas part of the decision-making process.While there has been a growing emphasison transparency and participation in deci-sion-making involving large dams, especiallyin the 1990s, actual change in practiceremains slow.

Additional results from the Cross-CheckSurvey illustrate that while participation hasincreasingly been required in the planningdocuments of large dams and for variousactivities, around 50% of projects still donot plan for the public participation ofaffected people. The trend for requirementsfor transparency through informationdisclosure for large dam projects is similar tothat for public participation (see Figure 6.2).

The Commission’s review identified thefollowing recurring concerns and criticismsabout how the public, and particularlyaffected people, have been involved:14

A number of keyinternational rivers lack a

basin-wide agreementthat defines a process for

establishing equitablewater use between

riparian States.

70

60

50

40

30

20

10

0

% of dams

Global sub-sample: 105 dams

Year from start of commercial operation

(by decade)

1950

1950

s

1960

s

1970

s

1980

s19

90

Information disclosure

Participation of affected people

Figure 6.2 Trends in provisions for participation and informationdisclosure

Source: WCD Cross-Check Survey.



■ insufficient time, resources and informa-tion have been made available for publicconsultations;

■ the spectrum of participants was usuallyvery narrow, ignoring rural communities,indigenous groups and women, andaffected people’s organisations whoseeffective participation may be constrainedboth culturally and linguistically;

■ where opportunities for participation ofaffected peoples and NGOs representingaffected groups have been provided, theyoften occur late in the process and arelimited in scope. Moreover wheresubstantial differences arise, thoseseeking to modify plans and decisionsoften must resort to legal or other actionoutside the normal planning process;

■ there was a generalised failure to involveaffected people in the design and imple-mentation of project monitoring andfollow-up; and

■ the government agency staff leading thediscussions had often been trained onlyin one sector (such as engineering) andthis reduced the scope for promoting amulti-disciplinary approach.

From the experiences recorded in the WCDKnowledge Base there are recent examplesthat show where participation has reducedconflict and made outcomes more publiclyacceptable (see Box 6.5 and Box 6.6). Thesecontrast starkly with those where projectshave been pushed through by central authori-ties without consultation resulting in drawn-out and acrimonious conflicts over compensa-tion, resettlement and benefit sharing.

The failure to provide a transparent processthat includes effective participation hasprevented affected people from playing anactive role in debating the project and itsalternatives. As a result they are unable to

In the early 1980s, nine multi-purpose dams had already been built in theAustrian section of the Danube River. Two more dams, Freudenau in Vienna, andHainburg downstream, were planned on the main river and some low-headprojects envisaged on the Mur river.

The decision to build the Hainburg hydropower and navigation dam was madeexplicit in 1983. Public participation was restricted to holders of property andwater rights to be directly affected by the planned intervention, thus excludingenvironmental activist groups and other civil society organisations. With strongsupport from the general public, these civil society groups occupied the site ofthe project, and ultimately managed to stop the project. Subsequently the sitewas protected as a National Park.

Turning to the Freudenau hydropower dam, from 1986 to 1988, the provincialgovernment of Vienna and the power utility promoted ideas and proposals formitigating some of the potential impacts of the project (during construction andafter completion). The public responded with great interest and as a resultselected proposals and the detailed project plans were made fully accessible tothe public. Information meetings on these documents were attended by morethan 15 000 people. In 1991 a referendum was organised around the final projectproposal. About 44% of the entitled Vienna inhabitants participated, and 75%supported the project.

The Freudenau dam was completed in 1997, however the project is not cost-effective as a consequence of the design modifications required to gain publicsupport. The contrary was the case for the Fisching and Friesach projects on theMur river – where following occupation of the dam site by protesters, joint-planning sessions with stakeholders led to ‘significant improvements inenvironmental friendliness,’ with associated cost savings.

Source: Hainburg and Freudenau damsin Nachtnebel, 2000, p109-111;

Zinke, 1999, p6-9;Fisching and Friesach dams

in Brunold and Kratochwill, 1999, p176-17

Box 6.6 Public participation and project acceptance: three scenariosfrom Austria

The 1 240 MW Salto Caixas hydropower project in Brazil was completed in 1999and was the fifth to be built on the Iguacu River. It was the first hydropowerproject in Brazil planned under the environmental regulations stipulated in the1988 Constitution. The measures taken to comply with the new environmentallegislation at Salto Caixas amounted to about one-quarter of the total projectcost of approximately $1 billion. However, the EIA was only undertaken after theproject was approved and land had been acquired, putting political pressure onthe process. This resulted in an EIA study of ‘poor quality.’

On the social side, public pressure, based in part on unsatisfactory resettlementoutcomes for previous dams, led to the establishment of a ‘resettlementcommittee’. This committee created a forum to address conflicts and meetrequests of the affected people. A negotiation process involved the committeeof affected people in developing an acceptable relocation programme fordisplaced people. Views of local people were also incorporated into themonitoring stages of the project.

Source: dos Santos, 1999, p153–154;Verocai, 1999, Contributing Paper for WCD Thematic Review V.2

Environmental and Social Assessment, p7

Box 6.5 Even late participation leads to a consensus resettlementplan: Salto Caixas dam, Brazil

Chapter 6


assist project planners to provide a develop-ment response that meets their needs andallows them to add to the benefits to bederived from the project. Without doubt thishas magnified the negative impacts of suchprojects and alienated affected communitiesleading to active opposition to projects andconsiderable uncertainty for project propo-nents. As observed in previous chapters of thisreport, the outcome is often not only poorperformance of the social components ofprojects but also schedule delays, cost overrunsand poor financial and economic performance.

Options assessment

The range, scale and type of options consid-ered in development plans in the past werelimited by the boundaries of the planning

and decision-making approaches of the day.Many sectoral planning studies from whichprojects emerged were narrow technical andeconomic studies, aimed at least-cost supplysolutions for providing a single service suchas irrigation water or electric power. Whendams were contrasted with alternatives, theywere typically only compared to otherpotential dam projects or, in the case ofhydropower, with alternative large-scalethermal power generation options (see Table6.1). In developing countries the pressure ondevelopment aid agencies to move largeamounts of capital – a considerable portionof it as tied aid – argued for large-scalesolutions such as large dams. Administrativeefficiency is a related factor leading to apreference for financing large projects.

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Projections of demand

The needs for power, food and water aretypically identified through sectoral demandforecasts, which have frequently overstatedsectoral needs. The WCD Glomma andLaagen Case Study reports that in Norwaygross power consumption in 1990 was 75%of that forecast in 1970. In Slovakia, watersupply needs as assessed in 1985 wereexpected to rise to 408 and 465 litres percapita per day (lcd) in 1990 and 2000respectively. While demand initially roseabove projections (433 in 1990) it has sincereversed course and had fallen to 294 lcd by1997.15

Failure to adequately account for the rate ofdevelopment of new supply and the effect ofpolicy reform, when it is outside the limitsof the planning exercise, may also lead towhat effectively amounts to overstateddemand. In the Slovakia case cited above, adoubling in the price of water and thedevelopment of alternative sources of supplyby industry contributed to reducing actualdemand. Projections for demand (andhence prices) for crops and other agricultur-al products that are widely traded can besubject to market boom and bust cycles whena series of independent decisions in differentcountries or provinces lead to over-produc-tion relative to demand. As documented inChapter 2 the prices for agricultural com-modities have fallen over time, instead ofremaining constant or rising as assumed inmany projections for irrigation projects. Thesame market information, technical assist-ance packages or consultants frequentlyinfluence these planning exercises, thus,while difficult to foresee, such over-esti-mates are not inevitable.

Overstating future demand has led to aperceived need for a large incrementalresponse to meet rapidly growing needs. In

many circumstances this has militatedagainst a gradual approach of adoptingsmaller, non-structural options and haspushed decision-makers into adopting large-scale dam projects because they seem to bethe only adequate response to the large gapbetween existing supply and forecast de-mand. A further complication is the long-lead time of large dam projects, which maytake 10 years or more from initial develop-ment of a project idea to the commissioningof the structure. Changes in market condi-tions during construction have left propo-nents stranded with costs or projects thatare not financially or economically viable.Of principal concern is that it is frequentlythe agencies that are responsible for buildingsupply infrastructure that are also chargedwith undertaking demand forecasts, leadingto a potential conflict of interest.

Available options

As shown in Chapter 5 there is currently awide range of alternatives available forfulfilling water and energy needs, althoughthe actual number available will depend onlocal circumstances. The number of alterna-tives has, however, not always been so large.For instance, alternatives to hydropowerprior to the 1950s included conventionalfossil fuel and biomass generation options.Nuclear power arrived in the 1960s and inthe past decade the range and scale ofrenewable electricity supply options hasdramatically expanded. Alternatives formunicipal and industrial water supply havetended to be site specific and depend onwhether there are groundwater aquifers,natural lakes and rivers to draw from withsufficient quantity and quality of water. Onthe other hand, many of the irrigation watersupply and flood management options thatare being considered today have beenavailable for a long time. The principalchange here is a more receptive policy

Chapter 6


context and the increasing cost of develop-ing new water supplies.

Demand-side management options (DSM)are a more recent phenomenon. Efficiencyand conservation became concepts in policyand planning in the 1970s and 1980s, butserious attention to demand managementprogrammes has tended to depend on aperception of crisis. The oil price shocks inthe early 1970s focused attention on DSMin the electricity sector in many westerncountries. Water scarcity and the threat ofwater shortages is a driving force for moreefficient water use in many countries, butthe response has not been universallytranslated into concrete action in fosteringwater-efficient practices.

Obstacles to consideration ofoptions

Political economy or intellectual barriersoften pre-determined what options wereconsidered in a given context. Politicaleconomy barriers include efforts made bygroups, primarily those holding economiccontrol and political influence, to protecttheir own interests and to impede similarefforts by other stakeholders. In practice,these barriers were immensely varied andwide-ranging. They included soft and subtleactions such as withholding informationnecessary for making informed decisionsfrom other stakeholders and from thedecision-makers. At the other end of thespectrum there have been overt and evenviolent measures such as use of State andpolice power to protect favoured options.

With few exceptions, an inclusive institu-tional and policy structure capable ofdealing with a spectrum of options has beenslow to emerge in developing countries.Small-scale infrastructure alternatives oftenhave not received integrated planningsupport, impeding their ability to emerge as

competitive solutions. Interests promotingnon-structural alternatives have rarelyoffered an adequate political counterbalanceto interests promoting a dam option. Inmany cases the weight given to the infra-structure option by the key actors obstructedproper consideration of other viable alterna-tives. As a result, such options continue tobe viewed as secondary to large projects.China provides an example of a country thathas mixed both the small- and the large-scale.It has the world’s largest programme for thedevelopment of small-scale rural and appropri-ate technology, while at the same time it hasbuilt half the world’s large dams.

The hindsight provided by Chapters 2, 3and 4, however, does suggest that in caseswhere dams have failed to deliver or led tolarge negative social and environmentalimpacts, a more comprehensive assessmentof options may have been warranted.Whether failures to adequately assess alloptions implicitly lead to the selection of adam over other equally attractive or evensuperior options is difficult, if not impossible,to answer. Certainly, the options currentlyavailable (as described in Chapter 5) reflectnot only continued technological develop-ment over the last 50 years, but also are aproduct of more recent efforts to find locallyappropriate, small-scale solutions that havebenign social and environmental impacts.Thus, in many cases alternatives may not havebeen available previously and may haveappeared more expensive given the methodol-ogies employed at the time, or were excludeddue to the influence of vested interests.

Parameters for projectappraisal16

Cost-benefit analysis (CBA) emergedbetween the 1950s and 1970s as the domi-nant economic tool supporting decision-making on dam projects. Initially it was



limited to a number of parameters, most ofthem internal to the dam owner and rela-tively easy to assign values to. Efforts in thelast two decades to expand the scope of CBAto cover social and environmental issues haverarely led to comprehensive social and envi-ronmental valuation, and have usually beenlimited to incorporating the costs of resettle-ment and environmental mitigation.

Review of multilateral bank appraisals andthe performance of CBA more generallyleads to the following conclusions on theadequacy of CBA as applied to the appraisalof large dam projects:

■ projections of project costs are systemati-cally understated;

■ social and environmental impacts arenot valued explicitly or are only indirect-ly accounted for through mitigation orresettlement budgets;

■ difficulty in predicting inter-annualvolatility of hydrological flows, growth indemand and final design capacity (hydro-power, irrigation and other benefits);

■ difficulty in predicting market conditionsand farmer behaviour over time (irriga-tion benefits);

■ employing social discount rates that aretoo high;

■ sensitivity and risk analysis is inade-quate; and

■ the effect of uncertainty and irreversibili-ty of investment is ignored.

In other words, the historical and actualpractice of dam project appraisal oftenviolates the conditions under which itcould, in theory, provide a reliable measureof the change in economic welfare producedby a dam project. It is worth emphasisingthat it is not a foregone conclusion that thenet effect of fixing all of these problems

would be to lower the economic profitabilityof dams. A number of the weaknesses ofCBA may lead to understatements of thenet project benefits. At the same time, it isclear that quite a number of the weaknessescan have important impacts in terms oflowering net project benefits. Improvedapplication of CBA would assist in identifyingprojects that are not economically viable.

Over reliance on CBA and the implicitpursuit of economic welfare maximisationalso handicap decision-making where damshave other (or additional) objectives as:

■ CBA does not examine wider economicimpacts – such as economic multiplierimpacts; and

■ CBA does not explicitly identify whogains and who loses from a project.

Although CBA is typically a prerequisite tothe analysis of macroeconomic and regionalimpacts, as well as to distributional analysis,it is not designed to examine the potentialof a project to achieve objectives in theseareas. Given the continued ‘partial’ abilityof CBA to capture even the extent to whichefficiency objectives are achieved, and giventhat equity, macroeconomic and purely non-economic objectives are often integralobjectives of water resource developmentprojects, CBA alone is not a sufficient basisfor the evaluation of large dam projects.

Influences from the larger political economyalso filter through into the process ofundertaking CBA. In some cases, earlypolitical or institutional commitment to aproject became overriding factors, leadingsubsequent economic analyses to justify adecision that had in fact already been taken.

Decisions made to build dams solely on thebasis of such an analysis are questionable

Chapter 6


given the failure to undertakeoptions assessment and toinclude external impacts,particularly social and envi-ronmental costs. An alterna-tive approach to a decisionsupport system based on CBAis to use a method thatrecognises that projects oftenhave multiple objectives and

not simply economic welfare maximisation.Experience to date with these multi-criteriaapproaches suggest that while economiccriteria remain important, these decisionframeworks have the benefit of allowingdisaggregated information on social andenvironmental impacts to enter directly intothe decision analysis. Such decision supportsystems appear particularly appropriate anduseful in the case of large dams whenimplemented within a participatory, trans-parent multi-stakeholder approach.

Addressing social andenvironmental impacts17

Social and environmental issues havehistorically been among the least addressedconcerns in dam-related decision-making.The Commission has focussed on thesebecause they are two of the key issues thatdetermine whether a dam proves to be aneffective development project that enjoysgeneral acceptance by the public. Theenvironmental risks associated with largedam projects have not been generallyincorporated as key factors in the decision-making process. Enforcement of existingregulations is often weak, initial assessmenthas not been comprehensive and it hasfrequently been incorrectly assumed thatimpacts could be effectively mitigated (seeChapter 3). Generally, monitoring ofimpacts and assessments of the effectivenessof environmental mitigation measures havebeen absent.

Similarly, the adverse social implications oflarge dam projects have rarely been a factorin the initial assessment and therefore havenot generally influenced the decision-making process to reach a least social costalternative. The experiences of affectedpeople around the world as reviewed inChapter 4 confirm the extent to whichimpacts remain inadequately assessed andefforts at mitigation, development andresettlement unsatisfactory.

Following the United Nations Conferenceon the Human Environment held in Stock-holm in 1972, environmental agencies andministries were formed at a rapid rate withapproximately 60 being created by 1988 andat least another 40 by 1992. The WorldBank adopted its first dam-related policy in1977 (on dam safety). During the 1980s theBank developed policies and guidelines thatfocused on the social and environmentaldimensions of dams and water resources.

Environmental Impact Assessment (EIA)was adopted and formalised in many coun-tries during the 1980s, although manydeveloping countries only approved EIAlegislation in the 1990s. EIA has becomethe major tool for addressing social andenvironmental impacts and the Commissionhas reviewed an extensive literature on thissubject as well as hearing directly from thoseaffected through the regional consultations.The WCD Knowledge Base demonstratesthat EIA consists mostly of measures tocompensate or mitigate the planned impactsand render them acceptable when thedecision to proceed has already been taken.This is reflected in the tendency for EIAs inthe 1990s to focus increasingly on mitiga-tion plans. Added to this is the fragility ofnewly established environment ministriesthat may be unable to ensure compliancewith many of the plans or clearance condi-



tions.18 There are well-documented cases,even in the 1990s, of decisions to proceedwith financing or construction before aneffective EIA is completed (see Box 6.7).

Political pressures and tight schedules are asrelevant today as in earlier decades and EIAresults often have no significant influenceon the choice of a dam as the preferredoption. The EIA process is also not wellsuited to this purpose as it was meant solelyfor identifying impacts and associatedmitigation measures rather than as a tool forincluding environmental and social consid-erations in the final project choice anddesign. Many governments and financinginstitutions have adopted EIA in the lasttwo decades, however the quality of assess-ments and their ability to genuinely influ-ence outcomes is still under-developed.Most dam proponents see EIA as an admin-istrative hurdle to be cleared, or a require-ment to secure funding. This means that ahuge political, technical and financialinvestment in the project has often alreadybeen made before the EIA is launched. Ifimpacts are severe, it is often too late tochange design, and project cancellation mayinvolve loss of face and financial loss.Further, EIA operates under considerableconstraints due to the political and adminis-trative pressures imposed by project sched-ules as it is seen as ‘delaying’ the project.EIAs are also often done with inadequatebaseline data on demographic trends, socio-cultural systems and ecosystem functioning.This leads to unsatisfactory outcomes.

As an impact management tool, EIA hasevolved towards a tool for also setting up anongoing environmental management systemor programme when construction begins,involving appropriate experts, ministriesand field activities. The transition from a

planning mode, based on voluminousassessments and reports, to an implementa-tion mode during project constructioncreates severe institutional and humanresource challenges and in many cases themeasures are either not implemented orhave fallen short of the efficacy envisaged inthe planning documents. The reality is thatdams create huge management challengesfor the implementing ministries and agen-cies. Where institutional capacity in theenvironmental area is weak the accompany-ing measures needed for sustainable out-comes often prove difficult to manage,particularly when compared with thephysical act of designing and building thedam. This in turn may lead to public dissat-isfaction with dams when affected peopleperceive that promises have not been kept.

Operation, monitoring anddecommissioning

After large dams are commissioned there area number of management and operationalissues that require technical studies andinvolve either decisions at the managementlevel or decision processes that are public in

Even with improved environmental and social guidelines EIA still frequently failsto influence decision-making. The Theun Hinboun project in Laos was initiatedin the early 1990s. The initial EIA financed by NORAD concluded that the damwould have minimal adverse impacts and significant benefits. Most of those whoreviewed the document disputed these findings and NORAD undertooksupplementary studies. These were completed one year after constructionbegan, so they had no impact on the decision making process or the design ofthe dam.

In the WCD case studies, an EIA was conducted only for Pak Mun at theplanning stage as it was a World Bank requirement. However the EIA was doneten years before the final project was approved – and examined a differentproject design for a different location than the one finally approved. Further, theEIA was never revised or updated. EIA’s were only required in Thailand from1992, one year after Pak Mun was approved by the Thai Government.

Source: Theun Hinboun dam in Norpower, 1993, p1-7 as cited in Usher andRyder, 1997 eco026, p80-81, WCD Submission; WCD Pak Mun Case Study

Box 6.7 Environmental Impact Analysis (EIA): too little, too late

Chapter 6


nature. These are required for the followingreasons:

■ to support routine day-to-day operationssuch as reservoir operations and releases;

■ to change operations to conform to newregulations that are introduced such aseconomic, technical, environmental orsocial regulation on dam safety, opera-tion of reservoirs in flood events orchanges to environmental flow require-ments;

■ to change operations when a new dam isintroduced in the river basin that wouldimpact on the operating rules of theexisting dam;

■ to adapt the operation to changing needsin the services provided by a dam overtime, particularly when the project ismulti-purpose, for example a change inpower markets that increases the value ofpeaking power generation or a shift torecreation priorities in controllingreservoir water levels;

■ for renovation, upgrading or expansionof the existing facilities; and

■ for relicensing processes in some coun-tries, or for decommissioning.

One of the most disturbing findings ofChapter 2 was the lack of monitoring of theimpacts of dams and the complete failure toconduct proper ex-post evaluations ofperformance and impacts. That such largeinvestments have rarely been evaluatedonce they have been in operation for asignificant period suggests little obligationon the part of powerful centralised agenciesand donors to account for the costs andbenefits incurred. Perhaps more critically itsignals a failure to actively engage in learn-ing from experience in both the adaptivemanagement of existing facilities and in thedesign and appraisal of new dams. The

WCD Case Studies suggest that provisionsfor intensive monitoring of physical, socialand environmental effects of projects wereoften weak or entirely absent. Wheremonitoring was present, it was often restrict-ed to hydrology and engineering parametersrelated solely to the physical integrity of thedam structure.

The operation of large dams is subject tomany unforeseen and unforeseeable influ-ences over time that transform and redistrib-ute benefits and impacts. Patterns for therelease of water from reservoirs will normallychange over time in response to demograph-ic and land use changes in the river basin,shifts in water use priorities, as well aschanges in the agricultural economy and themarkets for electricity. Physical changes inriver morphology or reservoir sedimentationas well as changes in the value that societyplaces on ecological and social impacts ofdams will influence how the dam is operatedat different periods of time over its life.

As shown in Chapter 2, there are goodpractice examples of adaptive managementto meet this changing context, drawing onsophisticated decision-support and forecast-ing software and in some cases accommodat-ing stakeholder participation. Many devel-oping countries that continue to focus onbuilding rather than optimising operationshave not yet adopted tools and policies foradaptive management and optimisation.

What happens to dams at the end of theirlives? Dam decommissioning may be neces-sary due to safety concerns, dam owners’concerns about lower profits, or concernsabout social and environmental impacts.Decommissioning can mean actions rangingfrom stopping electricity production to damremoval and river restoration. Severalhundred dams have been deliberately



removed, mostly in the United States, andmost of them small. Provision is not alwaysmade in advance for who should pay for theremoval or for safety or other improvementmeasures. As reviewed in Chapter 2, risingoperations and maintenance costs may alsoraise questions regarding the maintenanceand safety of large dams. At present, decom-missioning costs are difficult to predict dueto the uncertainty surrounding the variousparameters affecting the costs and thelimited amount of practical experience withdecomissioning. One proposal is to ensurethat decommissioning funds are set aside atthe time of dam commissioning or duringthe project’s license period. Such decommis-sioning funds are accepted practice fornuclear power plants in countries such asthe United States. Decision-makers in thedeveloped world are increasingly looking athow best to handle the end of the dam lifecycle. In contrast many other countries donot yet have firm licensing periods for theirdams (see Box 6.8).

Compliance19

Dam projects are expected to comply withthe legal framework and guidelines of thecountry and the organisations involved infinancing and constructing the dam. Whereenvironmental and social problems haveoccurred in the WCD Knowledge Base, theprinciple cause is the lack of legal require-ments for particular standards at the outsetor a lack of appropriate recourse mecha-nisms to adequately reflect people’s rights inthe face of a powerful national decision.This section shows that regulatory frame-works are often weak, and the necessaryprovisions are not made in planning docu-ments. Even when they are present, govern-ments and donors alike ignore them all toofrequently.

Reasons for this include:

■ incompleteness, incoherence and ambi-guity of national legal and regulatoryframeworks;

■ difficulties of accurately defining thespecification of social and environmentalrequirements and integration of thesecomponents into the implementationagreements and schedules of projects;

■ lack of transparency and accountability,frequently with opportunities for corrup-tion at key points in the decision-makingprocess;

■ lack of meaningful participation at keypoints in the decision-making process

■ low levels of internal and externalmonitoring that reduce feedback intodecision-making;

■ weak or non-existent legal recourse andappeals mechanisms to an independentjudiciary, particularly for negativelyaffected and vulnerable groups; and

There is considerable variation in the licensing procedures for dams. In somecountries dam sponsors must obtain only one licence. In other countries thedam sponsors must obtain a licence for each phase in the planning and projectcycle. For example in Hungary a dam project sponsor must first seek approval ofthe EIA, then obtain a permit to complete the activities required to prepare theproject for construction. Two further licenses are required for construction andoperation. Some countries exempt government operators and only requirelicences for private operators. Licensing procedures are often restricted tohydropower dams, with irrigation dams largely exempt from formal licensing.

There is considerable variation in the term of dam operating licences. In Spainlicences are granted for 70 years, in Norway 60 years and in the USA for 30–50years. In other cases dam licences are granted for short renewable periods oftime. For example in Hungary and Vietnam licences can be granted forunspecified periods of time but they are subject to regular inspection andreview. Where dams are built and operated by the private sector the duration ofthe licence period will need to reflect a reasonable payback period, typically setat 30 years in build, operate and transfer (BOT) agreements. Reviews conductedwithin the licence period have the advantage of facilitating the monitoring ofoperations and providing opportunities for adapting operations against thebackground of changing societal values and expectations. Contemporaryconcepts of adaptive management, transparency and accountability suggestthat there should be some scope for regular review, such as every five to tenyears.

Source: WCD Thematic Review V.4 Regulation

Box 6.8 Licensing processes and duration

Chapter 6


■ lack of human, financial and organisa-tional capacity.

National legal frameworks andpolicy provisions

There were few policy, legal and regulatoryframeworks governing large dam buildingbefore the 1970s, particularly for social andenvironmental issues. However manycountries updated their policy and regulato-ry frameworks in the 1980s and 1990s togive a stronger emphasis to environmentaland social concerns, public participation,efficiency and cost-recovery. There is now abroad body of regulation potentially orexplicitly applicable to large dams at theinternational and national levels, referringto both the public and private sectors.

Existing regulations in most countries tendto focus on project appraisal and implemen-tation with insufficient focus on optionsassessment planning in the early stages ofthe decision-making process where funda-mental choices are made. Few requireregular assessments and evaluation of

performance that could feed back to betterinform decision-making based on pastexperience. Nor do they often providerecourse for those who may have beenharmed by a particular project.

In many cases it has only been strongconcerted civil society movements thathave generated sufficient momentum toensure that constructive negotiations occur,and dam projects are not imposed ondisplaced communities without consulta-tion.

The Cross-Check Survey demonstrates that,since the 1950s, a growing number ofprojects have required dam safety, economiccost-benefit analyses and financial plans(see Figure 6.3). But economic appraisaltechniques such as risk and distributionalanalysis were still mandated for only 20% oflarge dam projects even in the 1990s. Sensitiv-ity analysis is more common and has becomestandard for donor-financed projects. Damsafety is a key issue for the world’s ageing damsand many national bodies have taken up thechallenge, assisted by the engineering net-

works of ICOLD.

Even requirements for large damprojects in the environmentalfield are far from universalalthough they are increasinglyrequired. EIA is recorded for lessthan 40% of dams commissionedin the 1990s (see Figure 6.4).Strategic environmental assess-ments and baseline surveys occurat similar levels.

Corruption

Corruption is a world-widephenomenon that affects bothpoor and rich countries. It may

100

80

60

40

20

0

% o

f dam

s


Year from start of commercial operation (by decade)

Cost benefit analysis

Financial analysis

Distribution analysis

Risk analysis

Sensitivity analysis

before

1950

1950

s

after 1

990

1960

s19

70s

1980

s

Figure 6.3 Trends in the implementation of economic and financial analyses

Source: WCD Cross-Check Survey.



In early 2000 the Chinese government released information that corrupt officialshad embezzled $60 million (500 million yuan) from resettlement funds for theThree Gorges dam project. An official was sentenced to death for embezzlingalmost $1.5 million from the project.

In Lesotho a trial started in June 2000 against major international corporationsinvolved in construction on the Lesotho Highlands Water Project (LHWP).Companies from France, Sweden, Germany, the United Kingdom and Canadahave been accused of paying bribes. If the accused companies are convicted,they face debarment from future projects with the European Union.

In the United States, economists from the United States Corps of Engineersaccused senior management of deliberately manipulating economic analyses topromote billion dollar investments to be managed by the Corps.

Source: China in Agence France Presse, 21 January 2000, 10 March 2000;LHWP in Sunday Independent, 11 June 2000;United States in Grunwald, 29 February 2000

Box 6.9 Allegations of corruptiontake many forms, from inducements tofavour certain contractors during bidding,through to manipulation of water alloca-tions, offsetting farmer repayments, ormanipulating domestic electricity connec-tions locally.20 At whatever level, vestedinterests can distort the decision-makingprocess, undermining development. Deci-sion-makers may be inclined to favour largeinfrastructure as they provide opportunitiesfor personal enrichment not afforded bysmaller or more diffuse alternatives. Theconsequences frequently directly affect thepoor or the environment. Allegations ofcorruption have tainted many large damprojects in the past but have seldom resultedin prosecution in court (see Box 6.9).

The OECD countries, and the major inter-national financing agencies, have recog-nised the pervasive extent of corrupt prac-tice and its negative consequences. Throughthe 1990s they have moved to assist coun-tries in tackling corruption by makingbribery payments illegal in their country oforigin, debarring contractors convicted ofbribery from future contracts and tighteningup due diligence on bribery opportunities.21

As of August 2000, twenty-three countrieshad ratified the 1997 OECD Convention onCombating Bribery of Foreign PublicOfficials in International Business Transac-tions. Its principal objective is to eliminatebribes to foreign officials, with each countrytaking responsibility for the activities of itscompanies and what happens in its ownterritories.22

Transparency International, an internationalNGO, has also been active in promotingworkable and transparent, ‘integrity pacts’ forlarge infrastructure tenders. These have metwith growing acceptance and success in LatinAmerica. A range of legal measures and

60

50

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30

20

10

0


% o

f dam

s

Year from start of commercial operation (by decade)befo

re 19

5019

50s

after 1

990

1960

s

1970

s

1980

s

Environmental impact assessments

Social impact assessments

Figure 6.4 Trends in the implementation of environmental and socialassessments

Source : WCD Cross-Check Survey.

transparency processes are therefore increas-ingly available for ensuring that dams are builtfor societal good, not for personal gain.

Multilateral and bilateralfinancing agencies

Overseas development financing agencies,particularly the multilateral and bilateral

Chapter 6


agencies have played an impor-tant role in funding and secur-ing large dam projects. Theyhave adopted a broad set ofpolicies, criteria and guidelinessince the 1980s as a result oflessons learned from experienceand public criticism. For exam-ple, the World Bank has adopt-ed ten safeguard policies relatingto such environmental issues asforestry, pest control and envi-

ronmental assessments; and such socialissues as indigenous people, cultural propertyand resettlement. The result of these devel-opments is that on paper the World Bankhas a comprehensive set of policies dealingwith large dam projects. More recently theInternational Finance Corporation (IFC) andthe Inter-American, Asian and AfricanDevelopment Banks have adopted similarguidelines.

Despite these changes, the banks’ policies,like the national regulatory systems are moreconcerned with project planning, design andfinancial management than with optionsassessment or with the operational phase ofa large dam project. In addition, they havepaid more attention to monitoring theplanning and construction phases than theoperation of the project, which is often leftto national governments. Post-implementa-tion monitoring is generally discontinued atmost five years after project commissioning.Even then, the main focus has been oncomparing the project proposals with theproject outcome. Weak treatment of socialand environmental impacts at appraisalleads to weak assessments of outcomes atevaluation.

This approach assumes that the planningphase can anticipate and cover all future

eventualities. Yet the WCD KnowledgeBase shows that achieving satisfactory socialand environmental outcomes requiresconstant adaptive management. The shortterm and inflexible nature of the agreementbetween the borrower and the bank is anobstacle to achieving this result. Further,the mitigation measures often receive lessprominence in comparison with financeissues.

Numerous developed countries have bilater-al aid agencies and export credit agencieswhich have also funded or supported thefinancing of dams and dam-relatedprojects.23 Bilateral aid agencies vary in thestringency of the requirements they have forsupporting large dam projects. Yet whilethey are relatively small participants in thelarge dam sector, their funding for specificaspects of the master planning or projectfeasibility studies can be critical in bringingother financiers to the table.

Export credit agencies (ECAs) are increas-ingly financing specific portions of large-scale infrastructure projects in developingcountries. ECAs provide loans, guaranteesand insurance to domestic corporations andbusinesses for their activities overseas tosupport and promote export trade from theirrespective countries. They finance the highvalue, electrical and mechanical equipmentcomponents and are an increasingly impor-tant source of financing for private sectorinvolvement in large dams.

Unlike the major development financingagencies, ECAs generally lack policies onenvironmental and social issues and do notnecessarily adhere to internationally accept-ed standards and guidelines. Experiencesfrom the Three Gorges dam in China, Ilisudam in Turkey, Maheshwar dam in Indiaand San Roque dam in the Philippines

The policies of thedevelopment banks are

more concerned withproject planning, design

and financialmanagement than withoptions assessment or

with the operationalphase of a large dam

project.



underline the need for ECAs to examineclosely the social and environmental im-pacts of the projects they support. Theabsence of common standards among ECAsleads to ad hoc competitive decision-making(see Box 6.10).

The policies of multilateral banks havechallenged the capacity of their borrowercountries to actually implement theirrequirements. Bank staff have had to eitherexercise their own discretion to adapt thepolicies to the realities of each country orignore cases of non-compliance by theirborrowers. In either case the bank’s toler-ance of the staff ’s and the borrower’s non-compliance with the policies can breedcynicism about the willingness to comply.There are no sanctions for staff members, orcountries, for non-compliance. Performancecriteria for staff have tended to be related toapprovals and disbursement targets.

The WCD Knowledge Base offers manyexamples of the failure of project propo-nents, contractors and operators to fulfilcommitments, whether explicit (projectspecific agreements and contracts) orimplicit (applicable policies, laws, regula-tions and guidelines). The WCD CaseStudies provide an indication of the types ofbreaches observed (see Box 6.11). The threebasic reasons for lack of compliance havebeen:

■ The tendency for large projects toproceed under a restricted decision-making process negotiated betweengovernments, lenders and contractorswith little public oversight, little partici-pation by affected parties and limiteddisclosure and public access to informa-tion. In many cases lack of clear moni-toring procedures also limited publicscrutiny.

■ The lack of sanctions for non-compli-ance, either at national or internationallevel. In many cases local affectedcommunities were unable to defend theirinterests when faced with a strongcentralised government especially incountries with weak legal safeguards andrecourse mechanisms.24

■ The dependence, in many cases, on thegood faith of sovereign States and publicpressure to resolve disputes, adjudicateclaims and ensure compensation forthose who have suffered wrongs. Theabsence of legal sanction or, where thisexists, difficulty in accessing it made iteasier for developers (especially govern-ments) to escape the consequences ofnon-compliance. The costs involved inseeking legal remedies were often prohib-itive for those who may have beennegatively affected.

The multilateral banks – and in particularthe World Bank – have the most sophisti-cated set of policies, operational proceduresand guidelines amongst the internationaldonor community and are under regularscrutiny by civil society. In examining actualpractice and compliance with standards andthe realisation of the outcomes that these

After the US Export-Import Bank declined support for the Three Gorges projectin China, citing lack of information on environmental and social mitigation, otherECAs, with lower thresholds of social and environmental acceptability, steppedforward to issue loan guarantees to corporations. This phenomenon is especiallyrelevant to the financing of large dam projects where ECAs are supportingprojects declined by other funding agencies on environmental grounds. In June1999, the G-8 ministerial meeting issued a statement recognising the impor-tance of common standards among the ECAs. Later in the year the OECDWorking party on Export Credits and Credit Guarantees agreed to a voluntaryenvironmental information exchange on larger projects but fell short of agreeingon new criteria for ECA support.

Source: Udall, 2000, WCD Contributing Paper toThematic Review V.4 Regulation, p1-3.

Box 6.10 Export Credit Agencies: competing for business versuscommon standards

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imply, the WCD Knowledge Base hasemphasised the experience of these banks.Given that the banks have often fallen shortof realising such high standards for planningand decision-making, it is legitimate toexpect that the other donors and in-country

In most of the WCD Case Studies there are examples of agreements made notbeing respected and commitments only partially implemented:

■ For Grand Coulee dam $54 million for past losses and $15 million peryear in compensation was awarded by the courts to the Colville tribe in1994, 50 years after the dam was built. The settlement cited high levelgovernment correspondence indicating an initial intention to compen-sate the tribes for loss of salmon in accordance with existing treaties, thiswas abandoned by the late 1930s.

■ Construction of Kariba dam complied with the laws of the day – howeverit was planned and built prior to most regulations being in place. Inaddition, the laws under colonial rule in Southern Rhodesia (nowZimbabwe) did not include provision for just legal redress for displacedAfricans, a clear contravention of prevailing international standards.

■ At Tarbela dam nearly 2 000 families had not been adequately resettledtwenty years after displacement in terms of the 1967 criteria forcompensating landowners.

■ At Tucurui, the initiation of the second phase of the project in 1999proceeded without an environmental impact assessment (EIA).Eletronorte, the utility that owns the project, maintains that Phase II doesnot require an EIA as it is the continuation of a project approved prior tothe setting of EIA regulations in Brazil. Local communities, concernedabout the possibility of a repeat of the social and environmental impactsof Phase I of the project, disagree with this position and have asked for afull EIA. The Case Study also points out that Eletronorte did not respectthe Waters Code which stipulated that hydropower plants should notadversely affect the food and needs of river bank communities, publichealth, shipping, conservation and free circulation of fish, amongst others.

■ In Aslantas the government agreed with the World Bank to recover aportion of the costs of the irrigation component of the scheme fromfarmers over 50 years. Current recovery rates are inadequate to meet thistarget (see Box 2.4).

■ At Pak Mun, an EIA was a World Bank requirement and should have beenperformed on the revised project prior to construction.

■ In India, a national assessment of dam projects cleared in the 1980s and1990s shows that in 90% of cases the project authorities have not fulfilledthe environmental conditions under which environmental clearance wasgiven by the central government under the Environment Protection Actof 1986.

■ In Norway, provisions for environmental flow releases from hydropowerdams have allegedly dropped below the minimum established in thelicensing agreements. Yet the central authorities lack legal means tomonitor and sanction confirmed offenders.

■ In China a review of Lingjintan dam showed that compliance withenvironmental clauses in construction contracts was not satisfactory due,amongst other factors, to lack of incentives, lack of accountability andpoor oversight.

Source: WCD Case Studies

Box 6.11 WCD Case Studies: a compliance report card

agencies will have encountered similardifficulties and also fallen short of theoutcomes implied by the standards set bythe banks.

Findings and LessonsConflicts over dams have heightened in thelast two decades, as awareness of theirimpacts and performance has grown and thedebate over costs and benefits has spread.While conflict has sparked innovation insome contexts and by some stakeholders inthe debate, in others it has deepened andentrenched conflict. The Global Review oflarge dams and their alternatives has exam-ined the performance of large dams using anumber of different lenses – technical,financial, economic, environmental andsocial – and explored the options that arecurrently available to fulfil water and energyneeds.

As part of its Global Review of past experi-ence, the Commission examined the deci-sion-making, planning and complianceprocesses around large dams in the WCDKnowledge Base to better understand whatfactors influence these processes and theperformance and results of the projects.Based on this review the findings on deci-sion-making include:

■ centralised and bureaucratic Stateagencies and utilities have often promot-ed and implemented dams as one of asmall number of conventional responsesto water and energy needs, a choice that,once taken, often has not been revisitedeven in the face of an expanding list ofalternatives;

■ foreign assistance has stimulated largeinvestments in dams in developingcountries, by providing financing – morethan $4 billion per year during the peak



of lending in 1975-1984 – and leadingfinancing arrangements;

■ large developing countries with manylarge dams (including China, India andBrazil) have established internal capacityto build large dams, although in recentdecades they have often used externalfinance and equipment to build largerprojects;

■ countries building fewer dams have beendisproportionately influenced by foreignassistance for large dams, making themmore vulnerable to conflicts between theinterests of governments, donors andindustry involved in foreign assistanceprogrammes and improved developmentoutcomes for rural people, particularlythe poor.

■ the multilateral banks and bilateral aidagencies, alongside the dam-buildingindustry and international industryassociations, have played a key strategicrole in spreading the technology todeveloping countries, lending legitimacyto emerging dam projects, and fosteringthe technological and human resourcesrequired to build and maintain dams;

■ there has been a generalised failure toinclude and recognise affected peopleand empower them to participate indecision making.

■ the lack of agreements on water usewithin shared river basins is an increas-ing concern and cause for conflict,particularly as demands grow and unilat-eral decisions to build large dams by onecountry alter supply within a basin withsignificant consequences for otherriparian States.

The end result of the influence exerted byvested interests, and the conflicts of inter-ests that have arisen, has been that many

dams were not built based on an objectiveassessment and evaluation of the technical,financial and economic criteria applicable atthe time, much less the social and environ-mental criteria that apply in today’s context.That many of such projects have failed todeliver by standards applicable in eithercontext is therefore not surprising, butnonetheless cause for concern.

Focussing on the planning cycle for largedams reveals a series of limitations, risks andoutright failures in the manner in whichthese facilities have been planned:

■ participation and transparency in plan-ning processes for large dams was neitherinclusive nor open and while actualchange in practice remains slow even inthe 1990s there is increasing recognitionof the importance of inclusive processes;

■ while the number of options haveincreased over time, options assessmentwas typically limited in scope due topolitical and economic interests drivingdam projects, lack of familiarity withother options, the perceived need toquickly proceed with large-scale projectsto meet large projections in demand andthe relative ease of developing newsupply relative to undertaking policy orinstitutional reform;

■ project planning and evaluation for largedams was confined primarily to technicalparameters and the narrow application ofeconomic cost/benefit analyses withmany sectoral studies aimed at findingleast-cost supply solutions for providing asingle service such as irrigation water orelectric power;

■ where opportunities for the participationof affected people, and the undertakingof environmental and social impactassessment have been provided theyoften occur late in the process, are

Chapter 6


limited in scope, and even inthe 1990s their influence inproject selection remainsmarginal;

■ the paucity of monitoring andevaluation activity once alarge dam is built has reducedthe basis for learning fromexperience; and

■ while countries that were thefirst to build dams are now

evaluating decommissioning, removing, orre-operationalising ageing facilities that aredue for re-licensing, many other countriesdo not yet have established licensing periodsthat clarify the responsibilities of the ownertowards the end of the dam’s effective life.

The net effect of these difficulties is thatonce a proposed dam project has passedpreliminary technical and economic feasibil-ity tests and attracted interest from govern-ment, external financing agencies or politi-cal interests, the momentum behind theproject often prevails over further assess-ments. Moreover where substantial differ-ences arise between proponents and thosepotentially affected, efforts to modify plansand decisions often must resort to legal orother action outside the normal planningprocess.

But poor outcomes and mistrust are notsimply a matter of narrow and technicallyfocussed planning and decision-making.They also stem from the failure of damproponents and financing agencies to fulfilcommitments made, observe statutoryregulations and abide by internal guidelines.Among the findings on compliance are:

■ in some cases, the opportunity forcorruption provided by dams as large-scale infrastructure projects furtherdistorted planning and decision-making;

■ weak regulatory frameworks and lack ofsanctions at the national level, particu-larly for options assessment and socialand environmental requirements, andlittle enforcement of existing regulationshave contributed to the poor economic,social and environmental performance ofmany large dams;

■ large projects tend to lack public over-sight of negotiations between govern-ment, lenders and contractors, includinglimited disclosure and public access toinformation;

■ in many cases lack of clear monitoringprocedures limits public scrutiny andaccountability;

■ there is a lack of sanctions at the inter-national level for non-compliance withinternational norms regarding water usein shared river basins;

■ within public international financialinstitutions, there are few, if any, sanc-tions for staff members, or countries, fornon-compliance;

■ in some countries, there is a lack of legalopportunities for affected groups to seekrecourse, therefore lessening the ac-countability of the project developers;and

■ most of the bilateral Export CreditAgencies are only beginning to developsocial and environmental policies andguidelines and the lack of consistencyamong the agencies’ guidelines hasresulted in projects rejected by some onenvironmental and social groundsreceiving funding from other sourceswith lower standards.

To sum up, whereas substantial improve-ments in policies, legal requirements andassessment guidelines have occurred, partic-ularly in the 1990s, it appears that business



is still often conducted as usual when itcomes to planning and decision-making.Further, past conflicts remain largely unre-solved and past impacts largely unmitigated.The WCD Global Review found that theinfluence of vested interests, legal andregulatory gaps, disincentives for compli-ance and lack of monitoring, participationand transparency amongst other things,have combined to create significant barriersto reforms that could otherwise make theplanning and decision-making processesmore open, responsive and accountable.Recent examples cited in this and earlierchapters are the basis of the Commission’soptimism that these barriers are surmounta-ble and these difficulties are not inevitable.The WCD Global Review indicates thatthere are opportunities for reducing negativeimpacts and conflicts, and indeed a respon-sibility, to:

■ increase the efficiency and performanceof existing assets and systems;

■ better assess development needs and thefull range of development options;

■ avoid and minimise ecosystem impacts;

■ ensure that displaced and project-affected peoples’ livelihoods are im-proved;

■ shift away from a balancesheet approach to decision-making in favour of broader,inclusive and more timely,multi-criteria approaches toplanning and decision-making;

■ resolve past inequities andinjustices, and transformproject-affected people intobeneficiaries, enablingthem to contribute to project benefits;

■ conduct regular monitoring and periodicreviews; and

■ develop, implement and enforce incen-tives, sanctions, and recourse mecha-nisms, especially in the area of environ-mental and social performance.

The remainder of the report builds on thefindings and lessons of the WCD GlobalReview. It delivers a way forward that canimprove planning, decision-making andcompliance, capitalising on the optionsavailable – whether of a technological,policy or institutional nature – and provid-ing economically efficient, socially equitableand environmentally sustainable solutionsto meet future water and energy needs.

Chapter 6


Endnotes

1 Many government agencies involved in waterresources development in countries that buildlarge numbers of dams maintain a constructionworkforce to build infrastructure: in theUnited States the Bureau of Reclamation andthe Army Corps of Engineers and in China theWater Resources Ministry.

2 Eckstein, 1958.

3 Gillis et al, 1987, p366.

4 WCD Thematic Review V.5 Negotiation,section 3.3.

5 Sklar and McCully, 1994, eco029, WCDSubmission, p12-14; Gillis et al, 1987.

6 WCD Thematic Review III.2 FinancingTrends, ch. 3.

7 The total investment in dams by the multilat-erals and bilaterals portrayed in Figure 6.1 isapproximately $125 billion.

8 Guhan, 1995, cited in India Country Study,Section 6.1.8.

9 ICE, 1994, p15-16; ICE, 1996, table 1.

10 Usher, 1997b, p120-123.

11 Morse and Berger, 1992; Umaña, 1998, p7;Wappenhans Task Force, 1992.

12 Usher, 1997a, eco026, WCD Submission,p120-123.

13 Egypt and Ethiopia are now working towardsgreater collaboration through the Nile BasinInitiative.

14 WCD Thematic Review on Negotiation,section 3.4.

15 Hanusin, 1999, opt052, WCD Submission, 4-5.

16 WCD Thematic Review III.1 EconomicAnalysis

17 WCD Thematic Review V.2 Environmentaland Social Assessment, Section 1.

18 For example see the WCD India CountryStudy, section 7.4.

19 WCD Thematic Review V.4 Regulation,section 3.1.

20 Lovei and McKechnie, 2000, p34-37.

21 For example the 1996 Development Assist-ance Committee’s Rcommendation on Anti-corruption Proposals for Aid-funded Procure-ment.

22 OECD, 2000b; OECD, 2000c, website http://www.oecd.org/daf/nocorruption/index.htm,viewed 4 September 2000.

23 For example the United Kingdom has theDepartment for International Developmentand the Export Credits GuaranteeDepartment.

24 For example see WCD India Country Study.



The mandate required the World Commission on

Dams to propose a framework for options assessment

and decision-making processes for water and energy

resources development, along with a set of criteria and

guidelines for the planning, design, construction,

operation and decommissioning of large dams. Part Two

of the report presents a new approach to decision-making,

based on the findings in the Global Review (Part One).

■ Chapter 7 presents a normative framework for equitable andsustainable development and develops an approach to negotiatingoutcomes for water and energy development projects based onrecognising rights and assessing risks.

■ Chapter 8 sets out seven broad strategic priorities that should guidedecision-making. Each one includes a set of principles that, ifapplied, will lead to more equitable and sustainable outcomes infuture.

■ Chapter 9 develops supporting criteria and guidelines that willhelp decision-makers and all interested parties implement thestrategic priorities set out in Chapter 8.

■ Part Two closes with Chapter 10 which stresses the need forconcerted and simultaneous action and proposes entry points forthe different constituencies involved in the dams debate to followup in response to the recommendations of the Commission.

Part Two:The Way Forward

decision-making, planning and compliance - … planning and compliance the report of the world...

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