Abstract
Governments increasingly look to the private sector for the financing, design, construction, and operation of infrastructure projects, and as a result, public-private partnerships (
Introduction
Through the examples of the Nam Theun 2 (
Increasing use of
Part A provides an overarching explanation of
In Part C, the governance of
Part D situates
Part E addresses the relevant contractual forms and terms associated with a
Part G introduces critical reviews and compares
Part H, the conclusion, reviews some of the key lessons learned through the
A Public-Private Partnerships
This section provides a general explanation of
I What is a Public-Private Partnership?
The expression ‘public-private partnership’ refers to a relationship between some form of public entity and a private one wherein the latter engages in activities on behalf of the former. Beyond this, there is no standard definition. For our purposes, the World Bank provides a workable definition of a
A long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance.3
Even within this definition there are myriad uses and terms. For the purposes of this work we rely on the above definitions of a
II Types of Public-Private Partnerships
The functions that private parties under an infrastructure
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Design or engineering to bring a project from initial concept to construction-ready specifications
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Build or rehabilitate a new or existing asset
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Finance all or part of the necessary capital expenditure
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Maintain the asset to a specified standard over the life of the contract
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Operate the asset or service, which can vary widely depending on the nature of the underlying asset and associated service4
Figure 1 sets out some common terms used to describe different structures for allocating responsibilities and risks in
Text box of terms.
Citation: Brill Research Perspectives in International Water Law 2, 4 (2017) ; 10.1163/23529369-12340008
III Why do ppp s Matter?
The private sector and its powerful ability to mobilize capital in the search for profit provide an attractive engine to drive development on transboundary waters.6 The involvement of the private sector on large-scale development projects situated on transboundary waters hopefully allows for a better allocation of risk on these projects and for a more efficient delivery of public assets or services,7 as well as a more streamlined allocation of expertise and innovation.8
Sovereign guarantees are often used to induce private investment, and are given by host governments to assure project lenders that the government will take certain actions or refrain from taking certain actions affecting the project. Governments offer sovereign guarantees to reduce investor risk and to create stability for the purpose of promoting project investment.9
In a joint statement issued November 2014, the heads of several multilateral development banks (
In 2014, it was estimated that the developing world was spending
To fill [the investment] gap, we need to tap into the trillions of dollars held by institutional investors—most of which is sitting on the sidelines—and direct those assets into projects that will have great benefit for a range of developing countries … it will take the commitment of all of us to help low- and middle-income countries bridge the massive infrastructure divide.15
The World Bank views
Meeting these goals over the next 15 years will require trillions of dollars a year. It will require the world to unleash the power of market economies—which are most effective when they are fair, transparent, and inclusive. It’s imperative for the public and private sectors to play their respective roles in this effort.16
It is worth noting that the views expressed by the World Bank Group’s leadership in regard to the role of the public sector is not without criticism. The ‘Washington Consensus,’ at least in its neoliberal form, has become quite controversial.17 The role of the private sphere in providing public services has come under fire in the wake of recent failures such as Bechtel’s at Cochabamba, Bolivia.18 There continue to exist, amongst some, reservations regarding the wisdom of allowing private for-profit motivations to influence the provision to the public of vital resources like water.19
In brief, potential disadvantages of
B International Watercourses Law and ppp s
This section provides an outline of relevant international watercourses law at play in the context of
I ppp s on International Watercourses and the Law of International Watercourses
The law of international watercourses does not explicitly govern the actions of a private partner that would be involved in a
The public state actor would be responsible to other riparian states under international law, while the private partner would be subject to the domestic law of the host state.
(a) State Actors
Public international law, in its traditional form, concerns itself primarily with Westphalian state actors. The traditional instruments and principles of both the
The private entities involved in
II International Treaties
The use and management of transboundary waters are often governed by international agreements. These agreements take precedence, to the extent they are inconsistent with otherwise applicable international norms, when interpreting legal rights regarding the use of such watercourses under the principle of lex specialis derogate legi generali.29 Usually these agreements will be interpreted and function in conjunction with international customary law. The 1995 Mekong River Agreement is an example of such an agreement. This agreement, and its relationship to
(a) The un Convention on the Law of the Non-navigational Uses of International Watercourses
The
The Convention contains substantive and procedural obligations, with key provisions including, among others, dispute avoidance and settlement, notification of planned works, and data and information exchange. The Convention covers both the use of surface and related groundwater. Many countries would fall outside the specific force of the Convention, having not yet ratified it. However, the Convention, as a codification of the principles of international watercourses law, would be binding on states that have not yet ratified it as a principle of customary international law. Private entities are not considered under the purview of the Convention. Of particular importance are principles relating to equitable and reasonable utilization (Article 5),32 the obligation to prevent harm33 to other riparian states (Article 7), and planned measures on an international watercourse, set out in Part iii of the Convention, specifically Article 12, the duty to notify other riparian states of planned measures with possible adverse effects.34
The term ‘international watercourses’ was used throughout the
The ‘environmental’ provisions of the Convention are contained in Part iv, ‘Protection, Preservation and Management.’ Article 20, ‘Protection and Preservation of Ecosystems,’ creates a due diligence obligation to protect and preserve watercourse ecosystems.38 Pollution of international watercourses, marine pollution from land-based sources, and the introduction of new or alien species are dealt with in Articles 21–23 of the Convention.39
Articles 3 and 4 of the Convention address the Convention’s relationship to other international agreements governing international watercourses. The Convention possesses a ‘framework’ characteristic.40 States sharing watercourses are encouraged to adopt and adjust the Convention’s provisions into specific agreements between them. The Convention does not affect existing agreements; parties to the Convention are encouraged to harmonize pre-existing agreements with the principles of the Convention, and principles embodied in the Convention will be significant in interpreting specific agreements.
Where an agreement does not include all states on a shared watercourse, the state(s) not included in the agreement’s use(s) cannot be adversely affected by the agreement under Article 3 of the Convention. Where a riparian state feels the principles of the Convention should govern the use of a shared watercourse, the states must enter into consultations41 under Article 3 of the Convention.
Article 4 differentiates between international agreements that pertain to an entire international watercourse and those that apply to only a portion of a particular watercourse, or a specific project. Article 4 entitles riparian states on an international watercourse to participate in the negotiations and to become party to an agreement that applies to the entire watercourse, and to participate in consultations relating to the agreement or, where appropriate, the negotiation42 where the riparian states’ use of the watercourse may be affected by an agreement pertaining to part of the watercourse or a specific project.
Viet Nam is the only Mekong Basin state party to the Convention, having ratified it on May 19, 2014. In the process, it became the 35th party to the Convention, triggering its entry into force. All of the Lower Mekong River Basin states (including Viet Nam, Thailand, Lao
III Customary International Law
Although Viet Nam is the only Mekong Basin state that is a party to the Convention, all of the riparians would arguably still be bound by many of the tenets of the Convention in so far as they reflect customary international law. Customary international law binds international actors generally and is established through widespread and consistent practice amongst states, out of a sense of legal obligation, or opinio juris.
There is ‘general agreement among experts in th[e] field that the provisions of the Convention reflect the basic principles of customary international water law,’45 a sentiment shared by the International Court of Justice in the Gabčíkovo-Nagymaros Project case.46 Thus many of the key provisions of the Convention largely embody the codification of existing international customary law.47
Besides the admittedly limited international arbitral and judicial decisions pertaining to the law of international watercourses and the Convention, much of the development of the law of international watercourses is owed to the work of two international non-governmental organizations: the Institute of International Law (
The third basic rule reflected in the Convention is that of prior notification of planned activities that may cause adverse effects in other riparian states. The Convention qualifies this as an obligation to prevent ‘significant harm.’50 These notification requirements help to prevent harm and disputes from developing down the road. These can also be viewed as a part of the equitable utilization process.51
IV Application to the Nam Theun 2 Project
Although the framework of international law that applies to the non-navigational uses of international watercourses will be relevant for
While this discussion has not been an exhaustive account of the sources and structure of the law of international watercourses, it provides the reader with an understanding of the basic principles, sources, and structure of this area of law, which forms a vital component of the context in which major
C The Governance of ppp s through ‘Policies’ of Multilateral Development Banks
This section further examines the governance of
I Streams of International Governance of ppp s through the World Bank Group
In the late 1940s and early 1950s, the World Bank began devoting attention to and financing infrastructure projects on international watercourses. Due to the dearth of existing international legal norms and rules regarding international watercourses, the Bank was driven to create its own policies to follow in its decisions of whether or not to finance infrastructure projects on international watercourses. These policies, as they have evolved, have both drawn from52 and contributed to developing the field of the international law of watercourses.53 These policies arose partly as a function of the implicit complications and opportunities for conflict regarding projects on international watercourses, as well as due to specific objections and protests to some of the Bank’s projects.54
(a) The World Bank’s ‘Safeguard’ Polices
It has been argued that the World Bank’s ‘safeguard policies’ stand out as a document relating to international watercourses for being both “a fairly comprehensive one and one with a global reach and practical application. Although it is based on the existing principles of customary international water law, the policy has made major contributions to the evolution and progressive development of such principles, and will continue to do so.”55
In its determination of whether to finance projects on international watercourses, the Bank emphasizes its desire that riparian States reach agreement in regard to the potential project. The Bank seeks to act as a facilitator in this regard. The Bank’s role on the Nile River Basin and in brokering negotiations between India and Pakistan in regard to the Indus River Basin serve as prominent examples.56 In the event that an agreement cannot be reached, the Bank requires that the prospective borrower notify the other riparians of the project, while specifying detailed procedures that such notification must follow.57
As noted in Part B above, the
The use of the term waterways shows a departure from the wider stream of international legal nomenclature. This illustrates the unique role that the Bank plays as both an international cooperative financial institution and a pioneer that can influence the practical evolution of international norms.61 Although, as it stands now, the failure to include linked groundwater in ‘waterways’ may be unduly limiting, compared to the more widely used ‘watercourses.’
The Bank drew upon its operational policies and in 1997 created ten policies termed the ‘safeguard policies’. These ‘policies’, which have subsequently been updated, deal with62 environmental assessment (
The presence of
On August 4, 2016, the World Bank’s Board of Executive Directors approved a new Environmental and Social Framework (the ‘Framework’) for Bank-financed investment projects.64 The Framework replaced several of the previous Bank ‘safeguard policies,’65 but did not replace
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Assessment and management of environmental and social risks and impacts
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Labor and working conditions
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Resource efficiency and pollution prevention and management
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Community health and safety
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Land acquisition, restrictions on land use and involuntary resettlement
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Biodiversity conservation and sustainable management of living natural resources
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Indigenous peoples/Sub-Saharan African historically underserved traditional local communities
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Cultural heritage
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Financial intermediaries
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Stakeholder engagement and information disclosure68
(b) Other Safeguard Policies
As listed above there are now several ‘safeguard policies’ in existence, outside those outlined in
(c) Substantive Obligations
(i) Notification
One of the central elements of the World Bank’s ‘safeguard policies’ with respect to international waters is the requirement to notify riparian States of the proposed project on a shared waterway. The policies set out clear procedures that must be followed. This requirement is triggered if a project meets the specific requirements of scope and is planned on a specific type of shared waterway, or will affect a shared waterway, subject to three limited exceptions.70 Once the notification requirement is triggered there is no de minimus standard in regard to the project’s expected impacts, and notification must be given.71 The obligation to notify falls to the proponent of a specific project; if the proponent is unable or unwilling to provide notice, the Bank will act in its capacity as a liaison and provide notice to riparian states. If the proponent is unwilling to allow this form of notice, the project is either redesigned, so it no longer requires notification, or Bank financing is withdrawn.72
The requirement to notify other riparians of proposed measures is a concept that has been incorporated into the law of international watercourses both through customary international law73 and instruments like the Convention. The arbitral tribunal in the Lake Lanoux decision found: ‘A state wishing to do that which will affect an international watercourse cannot decide whether another state’s interest will be affected; the other state is the sole judge of that and has the right to information on the proposals.’74 Through its notice requirements, the Bank allows potentially affected riparians to inform the Bank of their own assessment of harm in regard to a proposed project.
The Bank’s requirements for notification are expressly extended to non-members of the World Bank.
It is necessary because of the general obligation under international law to avoid harm to all other riparians. This is a basic obligation that the Bank could not possibly overlook. By making an explicit reference to non-members, the Bank is simply emphasizing and underscoring this obligation.75
Also of particular importance, for our purposes, is the Bank’s lack of distinction between upstream or downstream riparians in regard to the notice requirements. The ‘safeguard policies’ require notice to all riparians. This recognizes the concept that impacts and harm can flow both upstream and downstream.76 In particular, upstream impacts can be the foreclosure of future uses of water by the upstream state if the downstream state applies all the flow requirements of watercourse to their own uses. Arguably these downstream uses would then be significantly harmed by any upstream uses that would take away from the water required by the downstream state for its uses. This idea is also embodied in the Convention and, arguably, is also integrated into customary international law, which requires notice of proposed measures on international watercourses regardless of whether riparian states are upstream or downstream. The Bank’s notice requirements in practical application can be seen to form a confluence between the concepts of the obligation to not cause appreciable harm and the principle of equitable and reasonable utilization.77
It is true that the
ila Helsinki Rules and theun Watercourses Convention both require notification to other watercourse states, without limiting the requirement to downstream riparians. However, the Bank policy has clarified this matter through the practical application of the requirement of notification of all the riparians and through providing such riparians with the opportunity to determine the effects of the project on their interests on the shared waterway. This is, no doubt, a significant and major contribution of the policy to the evolution and progressive development of international water law.78
(ii) No Harm
As mentioned above, the Bank’s policy is based on the obligation not to cause ‘appreciable harm’ to other riparians.79 Though there is a difference in the language used, ‘significant harm’ is used in the Convention, both phrases can be seen to embody the same normative principle. In discussions of the
II Other Multilateral Development Banks
There are several other
Several other
III The International Finance Corporation’s Performance Standards
The
The current
The World Bank stands out for its detailed policies and procedures for projects on international waterways. Although the
The ‘equator principles’ are a private finance industry standard based upon the
The eight
IV China and Chinese Development
The World Bank is now facing greater competition internationally, especially from the growing power and presence of China as a financier of infrastructure globally. The Bank has seen its pre-eminence in international dam project finance slip in recent years; it is reported that although the Bank has increased its financing to about ‘[
In contrast to private equity in the western world, China’s state backing can be seen to represent a blending of lines between the private and public spheres. China represents the second largest private equity market in the world after the United States, with approximately
(a) The Asian Infrastructure Investment Bank
Another element in China’s global infrastructure activities has been the relatively recent creation of the Asian Infrastructure Investment Bank. The
On April 13, 2016, the World Bank and the
In February 2016, the
D The Mekong River Basin, the 1995 Mekong Agreement and the Nam Theun 2 Hydropower Project
This section situates
I nt 2 is Located in Lao pdr in the Mekong River Basin
The Mekong River Basin spans an area 795,000 km2 over six countries—China, Myanmar, Lao
The Mekong River Basin has been the subject of considerable international efforts to spur regional cooperation dating back to the original Mekong Committee that was established in the 1950s. It was then described as the “largest single development project that the fledgling United Nations organization had ever undertaken.”114 However, in the following 37 years, in spite of various institutional arrangements, intensive investigation, and planning, no structures have been built on the mainstream of the Lower Mekong River. This phenomenon can be partly explained by the geopolitical barriers and, at times, outright conflict between the riparian states.
II 1995 Agreement on the Cooperation for the Sustainable Development of the Mekong River Basin
The 1995 Mekong Agreement is a treaty among the states of Cambodia, Lao
As one of the few legally-binding treaties in Southeast Asia, the 1995 Mekong Agreement was the outcome of concerted regional and supra-regional efforts over 37 years to develop a system to cooperatively manage the Mekong River.116 The 1995 Mekong Agreement established the Mekong River Commission (
China and Myanmar, the upstream riparians in the Mekong, are currently ‘Dialogue Partners,’ rather than full parties, to the 1995 Mekong Agreement. Should China and Myanmar wish to become full parties to the 1995 Agreement—which many believe is necessary for the 1995 Mekong Agreement to fully realize its purpose and set goals118 —they have the potential to do so.119
China completed its first dam on the river in the year the 1995 Mekong Agreement was signed. Since that time, China has completed another six of 37 dams it has planned for the Lancang/Upper Mekong.120 The rapid hydroelectric development in China has had a significant effect on the Mekong River water and sedimentation levels, and therefore presents both a great opportunity and environmental risk to the Basin. For this reason, increasing engagement from China has been seen as a critical factor in the success of the 1995 Mekong Agreement.
(a) Structure of the mrc
The 1995 Mekong Agreement creates the
Three main bodies make up the
One person from a rank that is no less than the level of head of department is appointed by each country to serve on the
Mekong River Commission governance structure.
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The Secretariat is the main operational arm of the
The
Mekong River Commission secretariat operational structure.
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In addition to Member States, the ‘Dialogue Partners’ and some international organizations123 have the right to attend and participate in the one-day annual fall meeting of the
(b) Financing
The
(c) Data and Information Exchange
In the 40 years prior to the inception of the
(d) Flexibility
The
A poignant example is the dynamic operational decision-making processes related to ‘reasonable and equitable utilization’ of the Mekong as provided by Article 5. Based on the season or the intended use of the Mekong and its tributaries, different procedural steps are prescribed in discussions that occur at the
All three procedural steps (notification, prior consultation, and prior agreement) enable the parties to assess the transboundary impacts of the proposed action on the riparian countries and to mitigate or minimize the harmful effects. In the case of notification, member countries are required to provide additional data and information to allow members to evaluate the impact of the proposed use. Prior consultation is aimed at arriving at an agreement, but it neither provides a veto nor a right of unilateral action. In the most sensitive cases, obtaining specific prior agreement of the
Through these scoping and procedural mechanisms, constraint on state behaviour and sovereignty is seen to be minimally impaired in the effort to ensure hydrological integrity by preserving at least a certain flow level on the mainstream in varying conditions (Article 6). The objectives of protecting the environment and ecological balance are buttressed by the obligation to prevent (known) harmful effects of uses and reinforcing state responsibility for any damages.130
The 1995 Mekong Agreement thus provides a practical opportunity to maximize options for trade-offs, exchanges, or releases from other sources (i.e., lower tributaries from the same riparian country) to protect the flow levels, while optimizing the sharing and use of waters during the dry and wet seasonal variations. In theory, it provides certainty, security, and flexibility to all riparians under what may be termed a ‘super-fairness’ doctrine.
Article 37 provides that the 1995 Mekong Agreement may be ‘amended, modified, superseded or terminated’ by the mutual agreement of all parties, thereby contemplating and allowing for flexibility to address future needs.
(e) Dispute Resolution
In the event that there is a dispute between the parties, the 1995 Mekong Agreement provides four steps in seeking a resolution:
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The
mrc has responsibility at first instance for addressing any disagreement, where applicable via the Council (pursuant to Article 18(c)) or via thejc (pursuant to Article 24(f)). -
If the
mrc cannot resolve the dispute at this stage, the issue is to be referred to the respective governments, to be resolved diplomatically (Article 35). -
If this also proves unsatisfactory, countries may refer the issue to a third party for mediation, such as an international organization, an international professional group, or an individual (Article 35).
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Finally, countries may refer to international law principles (Article 35).
(f) Key Initiatives Launched Since the 1995 Mekong Agreement
While the 1995 Mekong Agreement provided a valuable framework to guide the cooperation of the riparian states, much of the provisions were general in nature and would require further action by the
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Agriculture and Irrigation Programme
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Basin Development Plan Programme
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Climate Change and Adaptation Initiative
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Drought Management Programme
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Environment Programme
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Fisheries Programme
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Flood Management & Mitigation Programme
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Information & Knowledge Management Programme
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Initiative on Sustainable Hydropower
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Integrated Capacity Building Programme
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Mekong Integrated Water Resources Management Project
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Navigation Programme131
Of chief importance is the Basin Development Plan (
While the first
Since 2006, the
In 2010, in collaboration with the private sector, civil society, and other stakeholders, the
In addition to these various initiatives, five procedures for the implementation of the
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Procedures for Notification, Prior Consultation and Agreement (
pnpca ) (approved in 2003) -
Procedures for Data and Information Exchange and Sharing (approved in 2001)
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Procedures for Water Use Monitoring (approved in 2003)
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Procedures for Maintenance Flows on the Mainstream (approved in 2006)
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Procedures for Water Quality (approved in 2011)
Of chief importance is the
Prior consultation also requires the notifying party to provide additional technical data and information, including a summary of the impact assessment documents, to allow the riparians to perform their own proper due diligence with respect to the proposed use. Upon receipt of information, a six-month time period (with option to extend) for consultation begins. Notified States can request further information to aid in their study of the proposed use in this time frame. During this process, the
Specific agreements need to be approved by all members of the
III The Nam Theun 2 Project
The
nt 2 was particularly complicated … because it was prepared during the challenging times that included the dam debate of the 1990s, which culminated in the World Commission on Dams, the Asian financial crisis of 1997, the strengthening of environmental and social safeguard policies and practices at the World Bank and other financial institutions, and the greater scrutiny of governance arrangements for the transparent use of natural resource rents by countries.139
(a) Context
Lao
Of the 236,000 km2 area of the country, 97% is in the watershed or catchment area of the Mekong River Basin, with the same percentage of the population residing within the Basin.145 The country has low urbanization, with about 40% of the population belonging to minority groups settled in the uplands.146 While the country remains a one-party socialist state, the economy has been rapidly liberalized since the ‘New Economic Mechanism’ was introduced by the government in 1986.147
Increasingly, the export of power to its electricity hungry neighbours has been a major contributor to the rapid growth rate of the country. With an untapped potential of 18,000
Plans for large-scale hydropower development throughout the Mekong River Basin have been circulating since the 1950s.151 The ability to serve its growing domestic power needs while simultaneously carving out an international energy market is seen as a great opportunity for Lao
(b) nt 2 Specifications
(c) History
The
As part of the new Water Resources Sector Strategy, the World Bank increasingly focused its efforts on poverty reduction, improving governance and sound environmental and social safety in its criteria for new projects.159 The World Bank did not commit to funding the project until (1) the Lao
The aforementioned issues delayed the project until financial closing was finally completed in 2005. That same year construction activities began, and the Nam Theun River was diverted in March of 2006. By 2010 construction activities were completed, and commercial operations began in April of that year.
(d) Financing and Equity
The project was financed through
The project follows a ‘Build Own Operate Transfer’
(e) Impacts
Under the terms of the 1995 Mekong Agreement, considering that
The Lao
Several international
The project sought to generate a diverse suite of environmental and social benefits through directed funding for beneficial programmes. These programmes included new conservation measures to reduce threats to forest resources; the establishment of long-term watershed protection and management systems for the Nakai Nam Theun National Protected Area and associated corridors; compensatory forest protection to offset the loss of primary forest in the reservoir; the establishment of resettlement villages and farms and compensation for livelihood losses, and the creation of livelihood development initiatives for people who would be forced to resettle as a result from the river diversion; and creating reservoir fisheries management by local people, with extensive independent monitoring, including penalties for non-compliance.165 Further, the project provided funding to strengthen revenue and expenditure management in Lao
(f) Significance
The
The project is responsible for a variety of important legal reforms, including changes in public administration, investment, property, natural resources, and environmental protection.168 By November, 2015, five years into operations, major tangible benefits had been realized, including over
However, the extensive programmes, environmental monitoring and safeguards present in the
E Contractual Structure
A large-scale transnational infrastructure project such as
This section will outline some of the relevant contractual forms and terms associated with an infrastructure
I ppp Contractual Structure
The concession agreement173 is the contract by which the public party grants the right to use a government resource or asset to the private party, or allows the provision of a public service for a specified period.174 With respect to infrastructure, the concession typically grants responsibility for operations, maintenance, and some investment.
The power purchase agreement (
It is obviously of vital importance that the various components of a contract relate to each other. In large infrastructure projects such as
Some countries have sought to standardize
[T]here is no universally-accepted language for such agreements on an international basis. Given the variety of
ppp transactions globally, the different legal systems which exist in various countries, and the need to have ‘tailor-made’ provisions to deal with the individual characteristics of specific projects, it follows that the development of comprehensiveppp agreements on an international basis is likely an unrealistic goal. However, there may be merit in focusing on certain contractual provisions dealing with particular legal issues encountered in virtually everyppp contract, such as the issues of force majeure, termination rights, dispute resolution, etc.179
It is important to assess the law of the host nation to establish if the contractual terms and objectives of the
II Key Elements
Successful concession contracts clearly delineate the respective rights and obligations of the contracting parties along with clear performance and development targets, while building in appropriate provisions to provide flexibility for unforeseen circumstances and possible termination. Sufficient means of ensuring ongoing monitoring and management of performance targets and standards should be incorporated into the concession contract. The World Bank Group’s reference guide on
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Performance requirements—defining the required quality and quantity of assets and services, along with monitoring and enforcement mechanisms, including penalties.
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Payment mechanisms—defining how the private party will be paid, through user charges, government payments based on usage or availability, or a combination, and how bonuses and penalties can be built in.
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Adjustment mechanisms—building in to the contract mechanisms for handling changes, such as extraordinary reviews of tariffs, or changing service requirements.
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Dispute resolution procedures—defining institutional mechanisms for how contractual disputes will be resolved, such as the role of the regulator and courts, or the use of expert panels or international arbitration.
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Termination provisions—defining the contract term, handover provisions, and circumstances and implications of early termination.183
III The Nam Theun 2 Hydropower Project
The construction and operation of
The electricity produced by the facility will be sold under two separate ‘take-or-pay’
World Bank experts provided guidance regarding contract design, including support to the government on the development of the
The
F Project Cost and Financing/Risk Mitigation
In the early to mid-1990s, the impetus for developing
The
Apart from low-level bridging activities undertaken by the Bank, the Asian financial crisis effectively caused the project to stall until 2001.195 By that point, the regional financial situation had largely stabilized and the project took on a new life with some changes in the developer group and a more complicated decision-making framework.196 A new focus on mitigating environmental and social impacts, and ensuring proceeds were directed to poverty reduction (outlined above), attracted other multilateral donors and financiers, including the
I Project Cost
Having only recently transitioned to a market-based economy, Lao
Nam Theun 2, summary of project base cost estimates.
Citation: Brill Research Perspectives in International Water Law 2, 4 (2017) ; 10.1163/23529369-12340008
II Project Capital Structure
In order the meet the high cost of the project, a split of 28% equity (
The prospect of raising sufficient commercial debt to finance a large, complex infrastructure project in a small poor country with limited creditworthiness was a daunting challenge.200 Seeking private capital was also a new and politically contentious notion for Lao
III Mitigating Risks
The due diligence work of the World Bank and other international financial institutions was critical in bringing along other partners, particularly those which assuaged social, environmental, and revenue management concerns. For example, it was not until 2003 that
Coordinating support from the various international institutions and commercial lenders proved to be a tricky process, requiring a harmonization of policies, procedures, and safeguards. To accomplish this, a single common set of principles was applied. This meant that a default by
IV Political Risk Guarantees
Political risk mitigation instruments206 were used as part of the financing package. These mechanisms were a relatively novel instrument at the time, but were seen by the World Bank and international commercial banks as the only practical option and critical precursor to mobilize sufficient private capital to fund such a project.207
After a significant amount of due diligence on the merits and risks of the project were concluded,
The
With the risk guarantees provided by the
These risk mitigation efforts were sufficient to encourage the private sector to get involved in the financing of the project. Nine international commercial banks (
Nam Theun 2 final project financing plan.
Citation: Brill Research Perspectives in International Water Law 2, 4 (2017) ; 10.1163/23529369-12340008
The equity in
Nam Theun 2 debt and equity financing plan.
Citation: Brill Research Perspectives in International Water Law 2, 4 (2017) ; 10.1163/23529369-12340008
On March 31, 2005, the World Bank’s Board approved the financing plan for
The successful financing of the
Until the conclusion of the
The process of financing
While complex, an
G Xayaburi Project
The Xayaburi hydroelectric power project provides interesting comparisons and contrasts to
In comparison with the
The World Bank and
Xayaburi is located on the mainstream of the Mekong River, in the northern Lao
The special purpose corporate vehicle created for the Xayaburi project is Xayaburi Power Company Limited (
limited liability company created under Lao
pdr law and is fifty percent owned by Ch. Karnchang Public Company Limited (ckpcl , a general construction and infrastructure development company publicly listed on the Thai Stock Exchange); twenty-five percent owned by Natee Synergy (an investment holding company that is a wholly-owned subsidiary of Global Power Synergy Company Limited, itself a wholly owned subsidiary ofptt Public Company Limited, an outcome of the privatization of the Petroleum Authority of Thailand, the latter now listed on the Thai Stock Exchange, but in which the Thai Government retains the largest shareholding); thirteen percent owned byegco (a publicly listed company on the Thai Stock Exchange incorporated byegat and in whichegat retains a shareholding of approximately twenty-five percent); seven percent owned by Bangkok Expressway (a company listed on the Thai Stock Exchange); and five percent owned by P.T. Construction and Irrigation Company Limited (a Lao-based company).232
Xayaburi is projected to cost
Considering that Xayaburi is located on the Mekong River mainstream, it is subject to an additional process of ‘prior inter-governmental consultation’ pursuant to Article 5 of the 1995 Mekong Agreement.234 This stands in contrast to
Timely notification plus additional data and information to the Joint Committee as provided in the Rules for Water Utilization and Inter-Basin Diversion under Article 26, that would allow the other member riparians to discuss and evaluate the impact of the proposed use upon their uses of water and any other affects, which is the basis for arriving at an agreement. Prior consultation is neither a right to veto the use nor unilateral right to use water by any riparian without taking into account other riparians’ rights.235
As discussed in Part D above, the
Arguably the
The formal process for the Xayaburi
pnpca has involved submission of documents, working group meetings, national consultations, deliberations by themrc Joint Committee and finally a decision by themrc Council … The total process has been more complicated and has also included bilateral discussions, the launching and subsequent debate catalyzed by the mainstream dams Strategic Environmental Assessment, extensive lobbying by developers and concerned scientists, the Save the Mekong Campaign, film-making and media reporting.238
The consultation process conducted, as part of both the
After reviewing the
Construction of Xayaburi continues and is expected to be completed in 2019 in accordance with the initial prediction. According to the Director-General of the Energy Business Department of the Lao government, as of January 2012, Xayaburi was one of ten hydropower projects under construction in Lao
H Concluding Remarks
Analysis and concluding thoughts on the lessons learned from the
While some critics of
Key learning points from their experience in addressing these concerns in the
The experience of the successful implementation of
One potential area for future research is the assessment of the differences in socio-environmental impacts between the
The countries sharing the Lancang-Mekong River are entering a new era of hydropolitics with a growing number of hydropower dams throughout the basin. Three ‘powersheds,’ conceptualized as physical, institutional, and political constructs that connect dams to major power markets in China, Thailand and Vietnam, are transforming the nature–society relations of the watershed.252 In the process, new conditions are produced within which the region’s hydropolitics unfold.253 This is epitomized by the ‘Lancang-Mekong Cooperation’ framework, a new initiative led by China that proposes programmes on both economic and water resource development, and anticipates hydrodiplomacy via China’s dam-engineered control of the headwaters.254 These are interesting times for the Mekong River Basin.
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Watt, Nicholas, Paul Lewis, & Tania Branigan, ‘US Anger at Britain Joining Chinese Led Investment Bank AIIB,’ The Guardian (March 13, 2015), http://www.theguardian.com/us-news/2015/mar/13/white-house-pointedly-asks-uk-to-use-its-voice-as-part-of-chinese-led-bank.
Wolf, Aaron, & Joshua Newton, ‘Case Study Trans-boundary Dispute Resolution: the Mekong Committee,’ Program in Water Conflict Management and Transformation (2007), http://www.transboundarywaters.orst.edu/research/case_studies/Documents/mekong.pdf.
‘World Bank and AIIB sign First Co-Financing Framework Agreement,’ World Bank Group (April 13, 2016), http://www.worldbank.org/en/news/press-release/2016/04/13/world-bank-and-aiib-sign-first-co-financing-framework-agreement.
‘World Bank Board Approves New Environmental and Social Framework,’ World Bank Group (August 4, 2016), http://www.worldbank.org/en/news/press-release/2016/08/04/world-bank-board-approves-new-environmental-and-social-framework.
‘World Bank Performance Standards for Private Sector Activities, Guidance Note,’ World Bank Group, http://siteresources.worldbank.org/EXTSAFEPOL/Resources/OPBP4.03GNApr22Webclean.pdf?resourceurlname=OPBP4.03GNApr22Webclean.pdf.
‘World Bank Environmental and Social Framework: Setting Environmental and Social Standards for Investment Project Financing,’ World Bank Group (August 4, 2016), https://consultations.worldbank.org/Data/hub/files/consultation-template/review-and-update-world-bank-safeguard-policies/en/materials/the_esf_clean_final_for_public_disclosure_post_board_august_4.pdf.
Wright, Christopher, & Alexis, Rwabizambuga, ‘Institutional pressures, corporate reputation, and voluntary codes of conduct: An examination of the equator principles,’ Business and Society Review, Vol. 111(1) (2006), pp. 89–117.
‘Xayaburi Dam Building Pact Signed,’ Eco-Business (April 17, 2012), http://www.eco-business.com/news/xayaburi-dam-building-pact-signed/.
Xayaburi Hydroelectric Power Project, Ch. Karnchang Public Company Limited, http://www.ch-karnchang.co.th/en/#/project/detail/112/energy-xayaburi-hydroelectric-power-project.
Xayaburi Power Company Limited: Private Company Information, Bloomberg, http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=113025177.
‘Private Participation in Infrastructure Database (
As can be discerned from this overview, the World Bank plays a prominent role in this monograph’s discussion of public-private partnerships (
‘Public-Private Partnerships Reference Guide,’ v. 2.0, World Bank Group (2014), p. 14, http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/09/08/000442464_20140908133431/Rendered/PDF/903840PPP0Refe0Box385311B000PUBLIC0.pdf, accessed June 22, 2016.
For example, the private party could be responsible for operating the asset and providing the service directly to the user or a government off-taker, or, the private party could be responsible for providing support services to a government agency that provides the service to the ultimate users. See ibid., pp. 18–19. ‘The options available for delivery of public services range from direct provision by a ministry or government department to outright privatization, where the government transfers all responsibilities, risks and rewards for service delivery to the private sector.’ ‘Guidebook on Promoting Good Governance in Public-Private Partnerships,’ United Nations Economic Commission for Europe (2008), p. 3, http://www.unece.org/fileadmin/DAM/ceci/publications/ppp.pdf, accessed June 22, 2016.
‘Guidebook on Promoting Good Governance in Public-Private Partnerships,’ ibid., pp. 2–3.
Many multilateral development banks have identified
Public-Private Partnerships, Overview, World Bank Group, http://www.worldbank.org/en/topic/publicprivatepartnerships/overview, accessed June 22, 2016.
Samuel Colverson & Oshani Perera, ‘Sustainable Development: Is There a Role for Public-Private Partnerships?,’ International Institute for Sustainable Development (2011), p. 4, http://www.iisd.org/pdf/2011/sust_markets_PB_PPP.pdf, accessed June 24, 2016.
Tomas Magnusson, ‘Sovereign Financial Guarantees,’ Paper Prepared for
‘Statement by the Heads of the Multilateral Development Banks and the IMF on Infrastructure,’ World Bank Group (November 13, 2014), http://www.worldbank.org/en/news/press-release/2014/11/13/statement-heads-multilateral-development-banks-imf-infrastructure, accessed June 22, 2016.
Nancy Alexander, The Age of Megaprojects, Project Syndicate (July 10, 2015), http://www.project-syndicate.org/commentary/g20-infrastructure-investment-by-nancy-alexander-2015–07, accessed June 22, 2016.
Statement by the Heads of the Multilateral Development Banks and the
Jim Yong Kim, ‘Tackling the Most Difficult Problems: Infrastructure, Ebola and Climate Change,’ World Bank Group (October 10, 2014), http://www.worldbank.org/en/news/speech/2014/10/10/speech-world-bank-group-president-jim-yong-kim-tackling-difficult-problems-infrastructure-ebola-climate-change, accessed June 22, 2016.
Ibid.
Ibid.
Jin-Yong Cai, ‘A Letter from IFC executive vice president and chief executive officer Jin-Yong Cai,’ International Finance Corporation, World Bank Group (2015), http://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/annual+report+2015/2015+online+report/leadership+perspectives/ar15_jyc+letter, accessed June 22, 2016.
See Joseph Stiglitz, ‘The Post Washington Consensus,’ The Initiative for Policy Dialogue (2004), http://intldept.uoregon.edu/wp-content/uploads/2015/03/Yarris-Joya-5.1.15-Brown-Bag-Article.pdf, accessed June 24, 2016.
Andrew Nickson & Claudia Vargas, ‘The Limitations of Water Regulation: The Failure of the Cochabamba Concession in Bolivia,’ Bulletin of Latin American Research, Vol. 21(1), pp. 99–120 (2002).
Rodrigo Cortes Rondon, ‘The Law of Transnational Water Resources Projects: Transnationalism in the Brazilian Water Sector?,’ (
For a more in depth discussion on the potential benefits and disadvantages of
Colverson & Perera, supra note 8, p. 4.
Article 32 of the Convention extends recourse to national courts to the private sphere, regardless of nationality, to address transboundary harm on an international watercourse, where harm is experienced by private individuals, either natural or juridical, in another riparian State.
Some international organizations, such as the World Bank, have international personality in so far as it is bestowed by their constituent instruments.
In Anglo-Iranian Oil Co the United Kingdom argued that a concessionary contract between the Government of Iran and the Anglo-Persian Oil Company was both a contract and a treaty. The Court found that it was simply a contract between a government and a foreign corporation. A contract between a government and a multinational corporation, even as in the above case a corporation owned partially by a foreign government, cannot be considered a treaty. Anglo-Iranian Oil Co. (United Kingdom v. Iran), Judgment of 22 July 1952 (Preliminary Objection) [1952]
Trail Smelter Arbitration (United States v. Canada), 3 R.I.A.A. 1911, 1965 (1941).
Corfu Channel (United Kingdom v. Albania), [1949]
Case concerning the Gabčíkovo-Nagymaros Project (Hungary v. Slovakia), Judgment of 25 September 1997, 1997
Stephen McCaffrey, The Law of International Watercourses, Second Edition (Oxford University Press, 2007), p. 214.
The principle that the more specific norm governs over the more general, where the two concern the same subject matter, is often cited as an example of a general principle of international law. The Court found that the 1977 treaty governed the relationship between the parties, under lex specialis, in the Case concerning the Gabčíkovo-Nagymaros Project, supra note 27, para. 133, p. 76.
United Nations, ‘Depositary Notification,’ C.N.271.2014.TREATIES-XXVII.12, https://treaties.un.org/doc/Publication/CN/2014/CN.271.2014-Eng.pdf, accessed June 15, 2016.
To be considered equitable and reasonable under Article 5, a use must be consistent with adequate protection of the watercourse from pollution and other forms of degradation. Stephen McCaffrey, ‘The Contribution of the UN Convention on the Law of the Non-Navigational Uses of International Watercourses,’ International Journal of Global Environmental Issues, Vol. 1(3), pp. 250–263 (2001), p. 253.
This has been qualified as an obligation to prevent ‘significant harm’ by the Convention.
“Essentially it provides that a state contemplating a new use or a change in an existing use of an international watercourse that may have a significant adverse effect on other riparian states must provide prior notification to the potentially affected states. A final important point concerning Part iii is that it seems clear that, by necessity, it is premised on the assumption that the planning state will conduct an environmental impact assessment to identify possible adverse effects on co-riparian states”. McCaffrey, supra note 32, p. 256.
Salman Salman, ‘The World Bank Policy for Projects on International Waterways: An Historical and Legal Analysis,’ Law, Justice, and Development Series No. 48741,’ World Bank Group (2009), http://documents.worldbank.org/curated/en/276451468325130824/pdf/487410PUB0inte101Official0Use0Only1.pdf, accessed June 15, 2016.
McCaffrey, supra note 32, p. 256.
Ibid., p. 257.
The Convention is intended to be supplemented by more detailed agreements concerning specific watercourses. Ibid., p. 257. See also,
‘[W]ith a view to negotiating in good faith for the purpose of concluding a watercourse agreement.’
‘[A]nd, where appropriate, in the negotiation thereof in good faith with a view to becoming a party thereto, to the extent that its use is thereby affected.’ Ibid., art. 4.
United Nations General Assembly, 51st Session, 99th Plenary Meeting,
McCaffrey, supra note 28, p. 286; see also pp. 286–287.
Salman, supra note 35, p. 57.
McCaffrey, supra note 32, pp. 259–260. See also Case concerning the Gabčíkovo-Nagymaros Project, supra note 27, para. 133, p. 76, and para. 85, p. 56.
McCaffrey, supra note 28, p. 376.
Salman, supra note 35, p. 54.
Ibid., p. 51.
McCaffrey, supra note 28, pp. 403–405.
Salman, supra note 35, p. 58.
Ibid., p. 21.
‘[T]he first Operational Memorandum for projects on Inland International Waterways (
Ibid., p. 236.
Indus Waters Kishenganga Arbitration (Pakistan v. India) (Partial Award) (Permanent Court of Arbitration, February 18, 2013), pp. 44–45, https://pcacases.com/web/sendAttach/1681, accessed June 15, 2016.
See Operational Manual BP 7.50—Projects on International Waterways, World Bank Group (March 2012), https://policies.worldbank.org/sites/ppf3/PPFDocuments/Forms/DispPage.aspx?docid=1843, accessed June 22, 2017.
Salman, supra note 35, p. 46.
Ibid., pp. 79, 88.
McCaffrey, supra note 28, p. 38.
Salman, supra note 35, p. 88.
Ibid., p. 60.
Ibid., p. 60, note 194.
Review and Update of World Bank Safeguard Policies, World Bank Group, https://consultations.worldbank.org/consultation/review-and-update-world-bank-safeguard-policies, accessed September 23, 2016; ‘World Bank Board Approves New Environmental and Social Framework,’ World Bank Group (August 4, 2016), http://www.worldbank.org/en/news/press-release/2016/08/04/world-bank-board-approves-new-environmental-and-social-framework, accessed September 24, 2016.
‘This Framework replaces the following Operational Policy (
‘World Bank Board Approves New Environmental and Social Framework,’ supra note 64.
World Bank, supra note 65, para. 2, p. 1.
Ibid., p. 1.
Ian C. Porter & Jayasankar Shivakumar (eds), Doing a Dam Better: The Lao People’s Democratic Republic and the Story of Nam Theun 2 (World Bank, 2011), p. 18, http://documents.worldbank.org/curated/en/200041468044952974/pdf/584400PUB0ID161Better09780821369852.pdf, accessed June 22, 2016.
These exceptions include rehabilitations of existing schemes, water resources surveys and feasibility studies, and projects in a tributary exclusively in the lowest downstream riparian. See Salman, supra note 35, pp. 162–180.
Ibid., p. 109.
Ibid., p. 235.
‘[T]he Bank seems to follow closely the ratio decidendi of the Lake Lanoux arbitral award, which stated that it is the other riparian, and not the state planning an activity, that should decide whether its interests are affected, and should thus be provided with information on the proposed project to enable it to make that decision.’ Ibid., p. 233.
Lake Lanoux Arbitration (France v. Spain), 24
Salman, supra note 35, p. 33.
Ibid., p. 229.
Ibid., pp. 104, 229.
Ibid., p. 230.
Ibid., p. 104.
Salman Salman, & Laurence Boisson de Chazournes, ‘International Water Courses, Enhancing Cooperation and Managing Conflict, Proceedings of a World Bank Seminar,’ World Bank Technical Paper No. 414, World Bank Group (1998), http://documents.worldbank.org/curated/en/496071468223476867/pdf/WTP14multi0page.pdf.
Salman, supra note 35, p. 64.
Porter & Shivakumar, supra note 69, p. 83.
See Operations Manual, Asian Development Bank (
See below for discussion on the
The European Investment Bank (
The Nordic Investment Bank (
Our Funding: We raise capital through bond issuances, International Finance Corporation, World Bank Group, http://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/about+ifc_new/ifc+governance/funding/ourfunding, accessed June 22, 2016.
See Environmental and Social Performance Standards and Guidance Notes, International Finance Corporation, World Bank Group, http://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/ifc+sustainability/our+approach/risk+management/performance+standards/environmental+and+social+performance+standards+and+guidance+notes, accessed June 22, 2016.
Salman, supra note 35, p. 62.
Ibid.
Ibid.
“The term “client” is used throughout the Performance Standards broadly to refer to the party responsible for implementing and operating the project that is being financed, or the recipient of the financing, depending on the project structure and type of financing.” ‘Performance Standards on Environmental and Social Sustainability,’ International Finance Corporation, World Bank Group, (2012), p. i, footnote 1, http://www.ifc.org/wps/wcm/connect/115482804a0255db96fbffd1a5d13d27/PS_English_2012_Full-Document.pdf?MOD=AJPERES, accessed July 21, 2017.
Ibid., p. 3, para 7, http://www.ifc.org/wps/wcm/connect/115482804a0255db96fbffd1a5d13d27/PS_English_2012_Full-Document.pdf?MOD=AJPERES, accessed July 21, 2017.
Salman, supra note 35, p. 64.
As of December 16, 2016, 87 institutions have adopted the ‘equator principles.’ See Christopher Wright & Alexis Rwabizambuga, ‘Institutional pressures, corporate reputation, and voluntary codes of conduct: An examination of the equator principles,’ Business and Society Review, Vol. 111(1), pp. 89–117, (2006).
Salman, supra note 35, p. 63.
Operational Manual OP 4.03, Performance Standards for Private Sector Activities, World Bank Group (2013), https://policies.worldbank.org/sites/ppf3/PPFDocuments/090224b0822f7442.pdf, accessed June 15, 2016.
Ibid., p. 1.
See ‘World Bank Performance Standards for Private Sector Activities, Guidance Note,’ World Bank Group, http://siteresources.worldbank.org/EXTSAFEPOL/Resources/OPBP4.03GNApr22Webclean.pdf?resourceurlname=OPBP4.03GNApr22Webclean.pdf, accessed September 24, 2016.
Erica Gies, ‘A Dam Revival, Despite Risks,’ The New York Times (November 19, 2014), http://www.nytimes.com/2014/11/20/business/energy-environment/private-funding-brings-a-boom-in-hydropower-with-high-costs.html?_r=1, accessed September 24, 2016.
Henry Sanderson & Michael Forsythe, China’s Superbank. Debt, Oil and Influence—How China Development Bank is Rewriting the Rules of Finance (Wiley-Bloomberg Press, 2013), p. 163.
Frauke Urban et al., ‘South-South Technology Transfer of Low-Carbon Innovation: Large Chinese Hydropower Dams in Cambodia,’ Sustainable Development, Vol. 23(4), pp. 232–244, (2015), p. 234, http://onlinelibrary.wiley.com/doi/10.1002/sd.1590/full, accessed June 15, 2016.
International Rivers, ‘The New Great Walls: a Guide to China’s Oversea Dam Industry,’ Second Edition, International Rivers (2012), pp. 1–2, https://www.internationalrivers.org/sites/default/files/attached-files/intlrivers_newgreatwalls_2012_2.pdf, accessed June 15, 2016.
Sanderson & Forsythe, supra note 102, p. 163.
‘The Asian Infrastructure Investment Bank: The Infrastructure Gap,’ The Economist (March 21, 2015), http://www.economist.com/news/asia/21646740-development-finance-helps-china-win-friends-and-influence-american-allies-infrastructure-gap, accessed June 15, 2016.
Kenneth Rogoff, ‘Will China’s Infrastructure Bank Work?,’ The Guardian (April 7, 2015), http://www.theguardian.com/business/2015/apr/07/will-chinas-infrastructure-bank-work, accessed June 15, 2016.
Nicholas Watt, Paul Lewis, & Tania Branigan, ‘US Anger at Britain Joining Chinese Led Investment Bank AIIB,’ The Guardian (March 13, 2015), http://www.theguardian.com/us-news/2015/mar/13/white-house-pointedly-asks-uk-to-use-its-voice-as-part-of-chinese-led-bank, accessed June 15, 2016.
‘The Asian Infrastructure Investment Bank: The Infrastructure Gap,’ supra note 104. See also Rogoff, supra note 107.
‘World Bank and AIIB sign First Co-Financing Framework Agreement,’ World Bank Group (April 13, 2016), http://www.worldbank.org/en/news/press-release/2016/04/13/world-bank-and-aiib-sign-first-co-financing-framework-agreement, accessed September 24, 2016.
‘Asian Infrastructure Investment Bank Environmental and Social Framework,’ Asian Infrastructure Investment Bank (2016), http://www.aiib.org/uploadfile/2016/0226/20160226043633542.pdf, accessed September 24, 2016.
Ibid., p. 1.
Natural Resources, Mekong River Commission, http://www.mrcmekong.org/mekong-basin/natural-resources/, accessed July 28, 2016.
Hydrology, Mekong River Commission, http://www.mrcmekong.org/mekong-basin/hydrology/, accessed July 28, 2016.
History, Mekong River Commission, http://www.mrcmekong.org/about-mrc/history/, accessed July 28, 2016.
Agreement on the Cooperation for the Sustainable Development of the Mekong River Basin, 5 April 1995, Kingdom of Cambodia, Lao People’s Democratic Republic, Kingdom of Thailand, and the Socialist Republic of Viet Nam, art. 1, http://www.mrcmekong.org/assets/Publications/policies/agreement-Apr95.pdf, accessed July 28, 2016 [1995 Mekong Agreement]. For additional background and analysis of the 1995 Mekong Agreement see, Richard Kyle Paisley, Patrick Weiler, & Taylor Henshaw, Transboundary International Waters Governance Through the Prism of the Mekong River Basin,’ in, Janice Gray, Cameron Holley, & Rosemary Rayfuse (eds), Trans-jurisdictional Water Law and Governance, pp. 43–61 (Earthscan Studies in Water Resource Management Routledge, Taylor & Francis Group, 2016).
Joakim Öjendal & Kurt Jensen, ‘Politics and Development of the Mekong River Basin: Trans-boundary Dilemmas and Participatory Ambitions,’ in, Joakim Öjendal, Stina Hansson, & Sofie Hellberg (eds), Politics and Development in a Trans-boundary Watershed: The Case of the Lower Mekong Basin, pp. 37–59 (Springer, 2012).
Greg Browder, ‘Negotiating an International Regime for Water Allocation in the Mekong River Basin,’ (Unpublished PhD dissertation, Stanford University, 1998).
See Aaron Wolf & Joshua Newton, ‘Case Study Transboundary Dispute Resolution: the Mekong Committee,’ Program in Water Conflict Management and Transformation (2007), http://www.transboundarywaters.orst.edu/research/case_studies/Documents/mekong.pdf, accessed July 28, 2016; Ellen Backer, ‘The Mekong River Commission: Does it work, and how does the Mekong Basin’s geography influence its effectiveness?,’ Südostasien Aktuell, Vol. 26(4), pp. 31–55, (2007).
1995 Mekong Agreement, supra note 116, art. 39: ‘[a]ny other riparian State, accepting the rights and obligations under this Agreement, may become a party with the consent of the parties.’
‘The ISH 0306 Study: Development of Guidelines for Hydropower Environmental Impact Mitigation and Risk Management in the Lower Mekong Mainstream and Tributaries,’ Mekong River Commission (2015), p. 16, http://www.mrcmekong.org/assets/Publications/policies/1st-Interim-Report-ISH0306-Volume-1-The-Guidelines-Final.pdf, accessed July 28, 2016.
1995 Mekong Agreement, supra note 116, art. 11.
Ibid., c. iv, arts. 11–33;Organisational Structure, Mekong River Commission, http://www.mrcmekong.org/about-mrc/organisational-structure/, accessed July 28, 2016.
These organizations include the Asian Development Bank, Association of Southeast Asian Nations (
Australia, Belgium, Denmark, European Union, Finland, France, Germany, Japan, Luxembourg, New Zealand, Sweden, Switzerland, the Netherlands, the United States, and the World Bank.
For example, in the period 2013–2014, donors contributed
Federico Rodriguez, ‘Annual Report 2014: Mekong River Commission,’ Mekong River Commission, (2015), p. 49, http://www.mrcmekong.org/assets/Publications/governance/MRC-Annual-Report-2014.pdf, accessed July 25, 2016. In recognition of this essential donor involvement, Article 41 of the 1995 Mekong Agreement specifically acknowledges the contributions of the United Nations and the international community, and expresses the desire to continue these relationships.
1995 Mekong Agreement, supra note 116, see Article 24, which provides that the
Susanne Schmeier, ‘Resilience to Climate Change-Induced Challenges in the Mekong River Basin: The Role of the MRC,’ World Bank Group (2011), http://documents.worldbank.org/curated/en/630751468330303325/Resilience-to-climate-change-induced-challenges-in-the-Mekong-river-basin-the-role-of-the-MRC, accessed July 24, 2016.
See 1995 Mekong Agreement, supra note 116, c. ii “Definition of Terms.”
Ibid., arts. 7–8.
About
‘To formulate a basin development plan, which would be periodically reviewed and revised as necessary; to submit to the Council for approval the basin development plan and joint development projects/programs to be implemented in connection with it; and to confer with donors, directly or through their consultative group, to obtain the financial and technical support necessary for project/program implementation.’
For more information on the
Mekong Integrated Water Resources Management Project, Mekong River Commission, http://www.mrcmekong.org/about-mrc/programmes/mekong-integrated-water-resources-management-project/, accessed July 28, 2016.
International Centre for Environmental Management (
Ibid., p. 22.
Procedures for Notification, Prior Consultation and Agreement, November 13, 2003, Kingdom of Cambodia, Lao People’s Democratic Republic, Kingdom of Thailand, and the Socialist Republic of Viet Nam, http://www.mrcmekong.org/assets/Publications/policies/Procedures-Notification-Prior-Consultation-Agreement.pdf, accessed July 28, 2016.
Guidelines on Implementation of the Procedures for Notification, Prior Consultation and Agreement, August 31, 2005, Kingdom of Cambodia, Lao People’s Democratic Republic, Kingdom of Thailand, and the Socialist Republic of Viet Nam, http://www.mrcmekong.org/assets/Publications/policies/Guidelines-on-implementation-of-the-PNPCA.pdf, accessed July 28, 2016.
Porter & Shivakumar, supra note 69, p. 1.
Population growth (annual %), World Bank Group (2015), http://data.worldbank.org/indicator/SP.POP.GROW/countries/LA?display=graph, accessed July 28, 2016.
Lao
Lao
Sidharth Sinha, ‘Nam Theun 2 (
Foreign Direct Investment, Net Inflows (
Aquastat: Mekong Basin, Food and Agriculture Organization of the United Nations (2011), http://www.fao.org/nr/water/aquastat/basins/mekong/index.stm, accessed 28 July, 2016.
Sinha, supra note 144, p. 2.
Porter & Shivakumar, supra note 69, pp. 5–6.
Lao
F. Tan, ‘Laos’ Hydropower Generation Capacity to Jump Almost Four-fold by 2020,’ Daily Mail (October 28, 2014), http://www.dailymail.co.uk/wires/reuters/article-2810681/Laos-hydropower-generation-capacity-jump-four-fold-2020.html, accessed July 28, 2016.
Lao
Porter & Shivakumar, supra note 69, pp. 2, 9–14.
Lao
Porter & Shivakumar, supra note 69, pp. 1, 7.
Technical Information, Nam Theun 2 Power Company, http://www.namtheun2.com/index.php/about-us/techinfo, accessed July 28, 2016.
Fleur Johns, On Failing Forward: Neoliberal Legality in the Mekong River Basin,’ Cornell International Law Journal, Vol. 48(2), pp. 347–383, (2015), p. 355, http://www.lawschool.cornell.edu/research/ILJ/upload/Johns-fnal.pdf, accessed July 28, 2016.
Porter & Shivakumar, supra note 69, p. 2.
Ibid.
Johns, supra note 156, p. 356.
Porter & Shivakumar, supra note 69, p. 11.
Ibid., p. 12.
Shareholders & Financing, Nam Theun 2 Power Company, http://www.namtheun2.com/index.php/about-us/shareholders, accessed July 28, 2016.
Porter & Shivakumar, supra note 69, p. 4.
Update: Nam Theun 2 Hydropower Project, Laos, European Investment Bank, http://www.eib.org/infocentre/press/news/topical_briefs/2005-november-01/nam-theun-2-hydropower-project-laos.htm, accessed July 28, 2016.
Ibid.
Ibid.
Johns, supra note 156, p. 357.
Project in Brief, Nam Theun 2 Power Company, http://www.namtheun2.com/index.php/about-us/project-in-brief, accessed July 28, 2016.
Johns, supra note 156, pp. 357–358.
‘Statement on the Release of the NT2 Panel of Experts 24th Report,’ World Bank Group (November 9, 2015), http://www.worldbank.org/en/news/press-release/2015/11/05/statement-on-the-release-of-the-nt2-panel-of-experts-24th-report, accessed July 28, 2016.
Rondon, supra note 19, pp. 74–79.
‘Report on Recommended PPP Contractual Provisions,’ 2015 Edition, World Bank Group (2015), p. 6, http://ppp.worldbank.org/public-private-partnership/sites/ppp.worldbank.org/files/ppp_testdumb/documents/150808_wbg_report_on_recommended_ppp_contractual_provisions.pdf, accessed August 5, 2016.
‘Yet exceptions are allowed in some countries for some form of private ownership.’ Salman Salman & Daniel Bradlow, ‘Regulatory Frameworks for Water Resources Management: A Comparative Study,’ Law, Justice, and Development Series No. 36216, World Bank Group, (2006), p. 164, http://web.worldbank.org/archive/website01021/WEB/IMAGES/362160RE.PDF, accessed August 1, 2016.
‘Some terms such as Concessions and Affermage have a definite technical meaning and structure to them in certain civil law jurisdictions that may not be understood or applied in a common law country. Care should be taken, therefore, in applying these terms loosely.’ Key Features of Common Law or Civil Law Systems, World Bank Group, Public-Private-Partnership in Infrastructure Resource Center, http://ppp.worldbank.org/public-private-partnership/legislation-regulation/framework-assessment/legal-systems/common-vs-civil-law, accessed August 2, 2016.
Concessions, Build-Operate-Transfer (
Mohammed Badissy et al., ‘Understanding Power Purchase Agreements,’ Vol. 1.3, United States Department of Commerce, Commercial Law Development Program (2014), p. 24, http://cldp.doc.gov/sites/default/files/Understanding_Power_Purchase_Agreements.pdf, accessed July 29, 2016.
‘For example, Chile has established
Standardized Agreements, Bidding Documents and Guidance Manuals, World Bank Group, Public-Private-Partnership in Infrastructure Resource Center (2016), http://ppp.worldbank.org/public-private-partnership/standardized-agreements-bidding-documents-and-guidance-manuals#Standardized%20PPP%20Contracts, accessed August 3, 2016.
Report on Recommended
Ibid., p. 6.
See Legal and Regulatory Issues Concerning Public-Private Partnerships, World Bank Group, Public-Private-Partnership in Infrastructure Resource Center, http://ppp.worldbank.org/public-private-partnership/legislation-regulation, accessed July 29, 2016;
A civil system is generally more prescriptive and will have more implied provisions requiring generally shorter contracts and reducing the need to fully define all of the contractual terms. See Key Features of Common Law or Civil Law Systems, supra note 173.
For further reading on
Public-Private Partnerships Reference Guide, supra note 3, p. 157.
See Nam Theun 2 Power Company Limited, ‘Nam Theun 2 Hydroelectric Project, Summary of the Concession Agreement between The Government of the Lao PDR and Nam Theun 2 Power Company, as of November, 2005,’ http://siteresources.worldbank.org/INTLAOPRD/Resources/293582–1092106399982/492430–1092106479653/SummaryofCA.pdf, accessed August 4, 2016.
For example, some of these contracts include the head construction contract, the sponsors’ agreement, and the shareholders’ agreement.
Nam Theun 2 Power Company Limited, supra note 185, p. 2.
‘Hydropower in Asia: The Nam Theun 2 Project,’ World Bank Group, Multilateral Investment Guarantee Agency (2006), p. 3, https://www.miga.org/documents/NT206.pdf, accessed July 28, 2016.
Porter & Shivakumar, supra note 69, p. 4.
Hydropower in Asia, supra note 188, p. 2.
Porter & Shivakumar, supra note 69, p. 149.
Ibid., p. 95.
Ibid., p. 67.
Ibid., p. 10.
Ibid.
Ibid., p. 11.
Ibid., p. 99.
Ibid., pp. 11–12.
W. Um et al., ‘Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Lao People’s Democratic Republic for the Greater Mekong Subregion: Nam Theun 2 Hydroelectric Project,’ Asian Development Bank (2005), p. 3.
Ibid., p. 14.
Porter & Shivakumar, supra note 69, p. 81.
Ibid., p. 137.
Ibid., p. 83.
Sinha, supra note 144, p. 10.
Porter & Shivakumar, supra note 69, p. 83.
Ibid., pp. 83–84.
‘Risk mitigation instruments are financial instruments that transfer certain defined risks from project financiers (lenders and equity investors) to creditworthy third parties (guarantors and insurers) that have a better capacity to accept such risks.’ See Tomoko Matsukawa & Odo Habeck, ‘Review of Risk Mitigation Instruments for Infrastructure Financing and Recent Trends and Developments,’ Public Private Infrastructure Advisory Facility of the World Bank (2007), p. xi, https://openknowledge.worldbank.org/bitstream/handle/10986/6778/405300Risk0mit101OFFICIAL0USE0ONLY1.pdf?sequence=1&isAllowed=y, accessed July 28, 2016.
Hydropower in Asia, supra note 188, p. 3.
Porter & Shivakumar, supra note 69, p. 82.
Sinha, supra note 144, pp. 10–11. See also Porter & Shivakumar, supra note 69, p. 84.
Sinha, supra note 144, p. 11.
Ibid., p. 10.
Porter & Shivakumar, supra note 69, p. 84.
The
Porter & Shivakumar, supra note 69, p. 82.
Ibid., p. 14.
Um et al., supra note 199, p. 15.
Porter & Shivakumar, supra note 69, p. 14.
Sinha, supra note 144, p. 9.
Porter & Shivakumar, supra note 69, p. 164.
Ibid., p. 14.
Ibid., p. 138.
Ibid., p. 82.
Ibid., p. 138.
‘Background Material on Pöyry’s Assignment,’ Pöyry (2012), p. 8, http://www.poyry.com/sites/default/files/imce/eng_xayaburi_hpp_09112012_final.pdf, accessed July 19, 2016.
See, for example, Johns, supra note 156; Jian Ke & Qi Gao, ‘Only One Mekong: Developing Transboundary
Johns, supra note 156, p. 360.
Location, Xayaburi Power Company Limited, http://www.xayaburi.com/Location_eng.aspx, accessed July 19, 2016.
Background Material on Pöyry’s Assignment, supra note 225, p. 8.
See Ashwini Chitnis, ‘The Xayaburi Power Purchase Agreement: An Independent Review,’ International Rivers (2013), p. 8, https://www.internationalrivers.org/sites/default/files/attached-files/xayaburi_dam_ppa_analysis_final_report_2013.pdf, accessed July 19, 2016.
Background Material on Pöyry’s Assignment, supra note 225, p. 8.
‘Feasibility Study: Xayaburi Hydroelectric Power Project,’ Ch. Karnchang Public Company Limited (2010).
Johns, supra note 156, p. 361.
Ibid.
1995 Mekong Agreement, supra note 116.
Ibid.
Mekong River Commission Secretariat, ‘Proposed Xayaburi Dam Project—Mekong River: Prior Consultation Project Review Report,’ Mekong River Commission (2011), p. i, http://www.mrcmekong.org/assets/Publications/Reports/PC-Proj-Review-Report-Xaiyaburi-24-3-11.pdf, accessed July 19, 2016.
See Alistair Rieu-Clarke,‘Notification and Consultation Procedures Under the Mekong Agreement: Insights from the Xayaburi Controversy,’ Asian Journal of International Law, Vol. 5(1), pp. 143–175 (2015).
Julia Niblett, ‘Letter from Julia Niblett, Australian Government Department of Foreign Affairs and Trade to Pianporn Deetes, Thailand Campaign Coordinator, International Rivers,’ International Rivers (2014), http://www.internationalrivers.org/files/attached-files/responseausaid.pdf, accessed July 19, 2016.
Johns, supra note 156, p. 363.
Rieu-Clarke, supra note 238, p. 153.
Ibid.
Johns, supra note 156, p. 364.
Don Sahong Hydropower Project, Mekong River Commission, http://www.mrcmekong.org/topics/pnpca-prior-consultation/don-sahong-hydropower-project/, accessed January 13, 2017.
‘Official Prior Consultation of the Pak Beng Hydropower Project Kicked Off,’ Mekong River Commission, (January 13, 2017), http://www.mrcmekong.org/news-and-events/news/official-prior-consultation-process-of-the-pak-beng-hydropower-project-kicked-off/, accessed January 13, 2017.
International Waters, Global Environmental Facility, https://www.thegef.org/topics/international-waters, accessed January 13, 2017.
Nam Theun 2 Social and Environmental Project, World Bank Group, http://projects.worldbank.org/P049290/nam-theun-2-social-environment-project?lang=en&tab=overview, accessed December 11, 2016; see in particular Porter & Shivakumar, supra note 69.
Porter & Shivakumar, supra note 69, p. 129.
Ibid., p. 130.
Ibid., p. 134.
Ibid., pp. 139–140.
‘Laos Proceeds with Third Contentious Mekong Dam,’ The Irrawaddy (November 8, 2016), http://www.irrawaddy.com/news/asia/laos-proceeds-with-third-contentious-mekong-dam.html, accessed December 11, 2016.
Carl Middleton & Jeremy Allouche, ‘Watershed or Powershed? Critical Hydropolitics, China and the “Lancang-Mekong Cooperation Framework”,’ The International Spectator, Vol. 51(3), pp. 100–117 (2016),
Ibid.
Ibid.
