State of Dam Building

1. State of Dam Building • 45,000 large dams worldwide • One being built every week Which raises the (as yet unanswered) question . . . Why should dams be singled out for preferential treatment under the Arrangement?

2. Reasons for Industry Decline • Private sector has no appetite for taking on high risks of dam construction - Cost Overruns - Construction Overruns - Growing and vocal public opposition, North and South • Explicit about need for public support

3. Public Purpose? • If new subsidies are to be made available, WTO rules require clear public purpose • OECD acknowledges this and makes clear reference in proposal to: • Commitments made at “2002 Johannesburg World Summit on Sustainable Development” • The Millennium Development Goals – poverty alleviation and environmental sustainability

4. The Public Purpose Challenge • Senior figures in industry accept need for change • Main priorities agreed upon: - Respect for human rights; - Demonstrable Public acceptance + FPIC - Multi-stakeholder decision-making - Addressing legacy of Existing Dams - Environmental Assessment - Securing Entitlements and Ensuring Compliance

5. International Good Practice • World Bank standards have failed to date to secure public purpose goals and will not meet MDG criteria • Non compliance reflects in large part failure to address “process issues” • Industry guidelines now further advanced than those of Multilateral Development Banks

6. Poverty Alleviation MDG – “Eradicate Extreme Poverty” World Bank – “restore livelihoods” International Energy Agency • “Proponents must ensure that hydropower projects result in improved standards of living for affected people” International Hydropower Association • “Affected communities [to be provided] with improved living conditions” ICOLD • “Resettlement must result in a clear improvement of their living standards” WCD • “Adversely affected people [must be] recognised as first among the beneficiaries”

7. Gaining Public Acceptance International Energy Agency Hydropower Agreement: • Local communities must be “willing partners” • “Local communities must be given sufficient lead time . . . To define a consensual basis in which they would be prepared to proceed with the proposed development” ICOLD • “All projects have to be planned, implemented and operated with the clear consent of the public concerned.” WCD • “Ensure that dams enjoy demonstrable public acceptance and in the case of indigenous communities free prior informed consent

8. Support for Stronger Standards ECGD – “implementing the recommendations of the WCD” COFACE – WCD, ICOLD IEA as reference criteria ERG – Requirement to demonstrate extent of compliance with WCD EXIM – projects “encouraged to address, to the extent possible, the principles contained in final report of WCD European Union – Respect for WCD guidelines required for projects supported under Linking Directive HSBC (currently financing dams in China) – endorsed WCD in its new water policy

9. Which Standards? • World Bank standards fall short of good practice • Other standards are better suited to meeting MDG and WSSD goals, of which most coherent is WCD • Criteria for assessing compliance with good practice readily available and easily incorporated into ECA practice

10. The Trial Phase Two Year Trial Period How has initiative contributed to MDG? Qualitive and Quantitive Assessment?