What are the project social benefits?

At the national level, the Project will allow the implementation by the GOL of its National Poverty Eradication Program (NPEP), thanks to cash revenues over the long run. Already, a Poverty Reduction Fund has been created by the GOL in co-ordination with the World Bank. The mechanism of the fund will actually be tested in Savannakhet, Houaphan and Champassak provinces, and later it will include other provinces. The villages concerned will be the executors of this funding, which will be spent on the basis of well-prepared projects. The Poverty Reduction Fund is initially sourced from International Development Agency (IDA) funds, and then from the GOL taxes, royalties and dividends from the time Project revenues become available in 2008.

The Project will create job and training opportunities in the various fields of civil engineering and construction, electrical engineering, environmental and social management, agriculture and fisheries, etc., as well as promote GOL governance and capacity in the field of civil service.

At the provincial level, the construction or improvement of more than 150 km of roads will greatly facilitate access to the region.

At the local level, both the population on the Nakai Plateau and those living along the Xe Bang Fai River will benefit from major trade offs. Thanks to a well-conceived Social Development Plan, the people of the Nakai Plateau are expected to see a considerable improvement of their living standards, with the construction of health and education infrastructures, and access to water and electricity in resettled villages. Population living in the downstream areas of the Project, including those along the Xe Bang Fai River will benefit from better-regulated flows in the river, allowing irrigation activities during the dry season.

Who will implement the Social Development Plan (SDP) and associated Resettlement Action Plan (RAP)? How will the implementation of the RAP and its impact be monitored? Will the results be made public?

Recommendations made in the SDP as far as the resettlement activities on the Nakai Plateau (RAP) are concerned have been sealed contractually in the Concession Agreement (CA) between the Government of the Lao PDR (GOL) and the Nam Theun 2 Power Company Limited (NTPC). NTPC is responsible for funding the RAP and for the timely provision of infrastructure, and the GOL will be responsible for the actual relocation of the families to be resettled and their social and economic welfare, in accordance with the RAP.

Accordingly, the GOL has established a comprehensive resettlement administrative structure comprising the Resettlement Committee, Resettlement Management Unit (RMU), five District Resettlement Working Groups and Village Resettlement Committees. These organisations have the responsibility for implementing the RAP. They will work closely with the villagers involved, and with NTPC.

Like any plan, the RAP is only as good as its implementation. NTPC has a vested interest in making it work, as it will be there for the next 25 years after the beginning of operation. NTPC will contribute to the success of the RAP through careful planning and design, thorough community consultation and thorough monitoring.

Regulation 4 of the Draft Resettlement Policy for Major Projects in Lao PDR states that:
- The Project should regularly follow up on the implementation of the resettlement plan and of the compensation paid.
- The Project should set up a monitoring unit to monitor the implementation and effectiveness of the resettlement works.
- This monitoring unit should be set up before implementation starts and should continue until one year after resettlement is completed.
- The monitoring unit should set the performance standards for each activity; measure the progress of each activity; measure the improvements in the lives of the affected population; and report periodically to the Resettlement Committee, the Project and its financing agencies.

The regulation concerns internal monitoring. It is proposed that the RMU will be responsible for the internal monitoring of the physical progress at least up to the time of physical movement of people has been completed. The RMU will monitor progress of the preparation of the villagers for the physical move, the move itself and post move settling phase. Reporting will be conducted monthly, and any necessary remedial action will be taken based on the findings. The RMU will be required to report regularly to the GOL, the World Bank, NTPC and its lenders, and affected villages.

In addition, NTPC has proposed that there should be independent external monitoring. The main focus of the external monitoring and evaluation will be on the changes in social and economic conditions of individual households, and assessing the success of the RAP in achieving its economic and social objectives. A set of indicators will be developed for affected households and villages, based on existing socio-economic characteristics of the resettlement villages and the type of rehabilitation and relocation schemes to be implemented. These will include income level, sources of income, food sufficiency, basic health and education conditions, women’s status, etc. An independent organisation will conduct this assessment, and the monitoring and evaluation program will last for a minimum of 6 years from the start of relocation.

External monitoring reports will be prepared each year following the field survey, and will be submitted to the Resettlement Committee and the World Bank. At the same time the results will be made available to the public.

Were there any studies made concerning health impact? How will public health be improved?

Health status monitoring will take place twice a year in resettled areas and resident communities on the Plateau, including in construction and camp follower areas. Monitoring public health conditions is a necessary first step in the community health and disease control program, facilitating early warning and detection of outbreaks of endemic diseases. In addition to this, health status monitoring will be undertaken twice annually for those living within 1 km of the downstream channel, until conditions have stabilized.

Clean water will be supplied to all resettlement villages and mosquito-breeding sites will be avoided. This will be achieved through the construction of concrete or cement covered aprons around the water pump sites. The introduction, and expected use by the relocated communities, of solid waste disposal practices is also expected to better control other water borne diseases such as diarrhea, enteritis and cholera.

Malaria and dengue fever control will be part of the ongoing disease control program proposed by the Government. Anti malaria measures that follow currently accepted practices will be implemented at campsites and facilities will be established for early diagnosis and treatment of patients. Village communities will be informed about the benefits of insecticide-treated mosquito nets as a preventative measure, and attempts to find a culturally acceptable means of allowing the adoption and use of nets sought. Mosquito nets treated with parathyroid insecticide will be made available to villagers as part of the resettlement program. Several hundreds of such nets, family size, have already been distributed by the Project during previous surveys. The Resettlement Management Unit will assist communities in implementing existing, approved health care programs in the project area to reduce the burden of disease in the population and to increase the overall health status in the area. Information communication and education will be disseminated to the workforce on the prevention of diseases such as malaria, opisthorchiasis, diarrhoea and STD/HIV/AIDS.

HIV is the most important potential health problem that both immigrant workers and the existing communities face and which the project must be well prepared for. Other sexually transmitted diseases (STD’s) are present in the population but are more easily identified and treated. People with other STD’s have practiced unsafe sex and become more susceptible to infection with HIV. It is essential that they are treated and counseled. Transmission of HIV is either by unprotected sexual contact, contaminated blood or body fluids or through the use of shared hypodermic needles among infected drug addicts. Every effort will be made to publicize these facts to both the workforce and to the resident communities. The provision of condoms to employees will be considered as a Company policy along with appropriate health education and information. A health check will be given to all construction workers as part of pre-employment procedures. This will include HIV-AIDS testing.

The RAP Activities Report proposes that $451,000 be allocated towards health-related activities for the Resettled population and $1,094,000 for similar activities in other parts of the Project area.

How will the potential effect of creating a favored group of people (resettlers) be controlled to avoid any issue or conflict?

In Laos, there has traditionally been a constant movement of people along the rivers as they look to maintain or improve their livelihoods. Large infrastructure projects involving road construction provide new commercial opportunities and improved regional economic conditions, and consequently attract large numbers of people to the area in search of better lives.

If not managed effectively, such migration could adversely affect income development initiatives contained within the Social Development Plan (SDP). The Environmental Action Management Plan (EAMP) does incorporate a number of measures relating to the management of the impacts of “camp followers” and other migrants, especially in the provision of suitable infrastructure and public health services.

It is recognised that there is a need to control inward migration at the Provincial, District and Village level. Administrative mechanisms are currently in existence at all three levels in the Lao PDR that will allow the regulation of spontaneous people movement. People moving between Provinces are required to inform the respective Provincial Governments. New migrants to an area must first get permission from the Village Chief. If permission is granted, the District must be notified and a copy of the letter forwarded to them, and recorded in their ‘Family Record Book’. Cases involving the inward migration of family relatives are the exception, and these conditions may not apply.

The establishment of the Resettlement Management Unit (RMU), as the implementing agency for resettlement, will effectively strengthen these existing structures and at the same time make sure that villagers are aware of the implications of inward migration. The Village Chiefs are best positioned to regulate inward migration, but will need assistance and support at the District and Provincial level. Both the Project Company and the RMU will observe the situation as part of the on-going programme for monitoring socio-economic conditions within the villages.

What monitoring will be done to ensure that plans are executed? What guarantees are there that the Developer will perform adequately with respect to social issues?

The Nam Theun 2 Power Company (NTPC) has signed a Concession Agreement with the Government of the Lao PDR, which include environmental and social commitments. The implementation of the SDP and commitments vis-à-vis local populations are sealed in the Concession Agreement and will be guaranteed by the issuance of performance bonds. The Concession Agreement has been negotiated during more than two years between the GOL and NTPC. This document of more than 1,000 pages has allowed creating, in close cooperation with the World Bank, a highly engineered legal framework defining the responsibilities of the parties as far as the environmental and social management is concerned.

Because of the non-compliance penalties to be included as far as the social commitments are concerned, NTPC’s lenders will independently monitor that these commitments are met. Such social commitments and penalties are also being included in contracts with the constructor and other parties. NTPC requires all its contractors to institute International Standard Quality Assurance procedures to assist in ensuring that the Project areas are well managed.

In addition, NTPC will support GOL monitoring agencies by the provisions of sufficient funds for them to carry out proper inspections. These funds will also help in part to support inspections by a visiting independent Panel of Experts who will also monitor NTPC’s performance (EAMP; PMM 61 - 67).

NTPC is composed of a group of international companies, which cannot have their reputations impugned due to non-compliance with a set of social and environmental guidelines they have formally agreed to meet. The developer’s actions to date have been very sensitive in this area and give only the strongest evidence of an ongoing commitment in this area.

The ultimate penalty for serious non-compliance would be the ability by GOL to take over the works to date free of charge. It would not make commercial sense for NTPC to allow this situation to develop at any time.

What are the specific entitlements of the population to be resettled?

Together with extensive infrastructure support (provision of equipment and material to build new houses, health and education facilities, access to electricity and water), education and training for resettlers are seen as an essential component of resettlement and livelihood restoration, focusing on two main areas:

1. Programs which form part of the Resettlement Action Plan (RAP), directly and coordinated by the Resettlement Management Unit (RMU) such as training for irrigation and fishing, forestry and livestock management, and household budgeting integral to the success of resettlement; and
2. Extension programs that are facilitated by improved infrastructure such as health care programs, education and strengthening village organisations, coordinated by the RMU and delivered by organisations with special skills.

The RMU’s training and extension programs will be aimed at:

- involving villagers in the defining, planning and implementation of education and training components of the resettlement program which will be directed towards improving the standard of living;

- helping adapt and upgrade the skills of the villagers to facilitate the adoption of the practices proposed under the livelihood model including agriculture, fisheries, forestry and livestock management;

- providing supporting health, nutrition and vocational education for the successful adoption of new livelihood systems across and between communities;

- utilizing the agricultural demonstration farm established at Theun Douane, and the forest nursery, pasture and livestock draw-down grazing sites currently being at Nakai Neua, Nam Malou and Ban Thalang respectively;

- employing appropriate non-formal education training methods to ensure that villagers who cannot read and write will not be precluded from education and training opportunities, thus equipping them to better participate in the labor market;

- skills training for targeted non-agricultural expertise (for example equipment maintenance and operation).

What is the current livelihood status of the people who will be resettled? How will it change? How will the resettlers earn their living?

The population on the Nakai Plateau has traditionally depended on shifting cultivation, livestock, fishing, hunting and gathering of non-timber forest products for their livelihood. The CARE survey of 1996 found that only 119 of the 734 households surveyed produced sufficient rice for year round consumption. Agricultural production in these villages is constrained by inadequate water supply, seasonal flooding, poor soil fertility and low levels of agricultural technology. In general, these households currently live far below the national poverty line.

The estimated cultivation area on the plateau in 1996 totaled 471 ha (less than 0.10 ha per inhabitant). Cultivated rice paddy is not a large contributor to the total production. Only 4 out of 16 villages surveyed by CARE cultivated paddy on a total of only 78 ha. Average yields in the area are generally in the range of 0.8 tonne per hectare for upland and 1.5 to 2.0 tonnes per hectare for paddy rice. Although all villages attempt to grow rice, only 17% of families are able to produce sufficient rice for a full year. At least one-half of all families have a rice deficiency for more than six months of the year.

About 200 ha of land have been identified as suitable for conventional paddy rice production on the Plateau above the relocation line of 539 masl. Of this it is proposed to develop four areas as part of the resettlement program, totalling 150 ha. These sites are in close proximity to prospective villages and potential deep-water pumping sites. It should be possible with improved cultivation techniques to obtain an average yield of 3.0 t/ha to 5.0 t/ha under double cropping. Assuming a yield of 4.0 t/ha, this would give approximately 600 tonnes of rice from 150 hectares under cultivation. On average, households will be able to meet about 40% of their annual rice requirements, which is a significant improvement over their present situation. NTEC’s Theun Douane Experimental farm achieved a one-crop yield of 3.0 t/ha with its first trial of irrigated rice in the 1998/99 growing season.

A key objective in planning livelihood options for the resettlers has been to ensure that no drastic changes are made in the sources from which these people derive their incomes. They will continue to grow rice and other crops on land allocated to them. They will raise buffaloes and pigs, harvest fish from the reservoir and also derive income from forestry. Wildlife and non-timber forest products are expected to contribute much less to household income. It is anticipated that under the Social Development Plan (SDP), average annual household incomes will rise from its present level of US$ 461 to about US$ 700 in the first year of resettlement to over US$ 1,000 in year seven. Adequate safeguards have been provided to ensure that income from forestry and fisheries accrues to the affected people. In the early years of resettlement, any shortfalls in income will be provided by the Project.

Good water quality, reasonable nutrient levels, a variety of underwater habitats and a 10m rise and fall in water levels which coincides with the natural flood cycle, all suggest a productive reservoir for fishery. Water quality in the reservoir has been evaluated in great detail and is predicted to be good from the commencement of reservoir impoundment. Sustainable yields as high as 1,500 tonnes per year have been predicted; however, based on yields per ha for low productive reservoirs in Thailand and Laos a sustainable yield of about 765 tonnes per year is considered feasible (EAMP). Income projections for resettled households are even more conservatively estimated on the basis of an annual yield of 280 tonnes.

An area of 22,000 ha of forestry is potentially available to the resettlers. Detailed discussions have been initiated with government authorities at the central and provincial levels to put in place a community forest management system that would guarantee a certain level of income from this resource.

Goods currently produced or harvested on the Nakai Plateau, such as livestock, fish and non-timber forest products (NTFPs) are already sold in markets in Nakai, Lak Sao and Gnommalath. The main constraint on production for commercial purposes on the Plateau is not the lack of market opportunities, but rather the inability to get products to market. Villages are remote, access roads are poor and there is a complete lack of access to reliable and affordable transportation.

Market opportunities will improve with better road and water transport facilities provided by the Project. Currently the markets in Nakai are supplied from Thakhek. It is expected that a large proportion of those goods previously supplied from Thakhek will be substituted by those produced on the Plateau, especially vegetables, fruit, fish and meat products. Almost certainly the reservoir will quickly become a focus for transport and trade at the village level. Larger commercial trading, requiring the transportation of large loads will be catered for by the all-weather roads which are proposed as part of the Project.