After a sustained campaign targeting the responsible parties, survivors ultimately received new land, permanent housing and compensation, including through the insurance payout. It remains uncertain, however, whether these remedial actions will be sufficient to restore the victims to their pre-disaster living standards.
CASE FILE | |
| Location: | Laos, Champasak Province (and also impacting the Attapeu Province) |
| Project: | Xe Pian-Xe Namnoy dam collapse |
| Companies: | Xe Pian-Xe Namnoy Power Company Ltd, which is a joint venture of SK Engineering & Construction, RATCH Group (formerly Ratchaburi Electricity Generating Holding), Korea Western Electric Power Co. and Lao Holding State Enterprise |
| Key concerns:
| · Homelessness & displacement · Destruction of property, crops, livestock and farms · Loss of livelihoods · Poor humanitarian conditions at temporary resettlement camps · Ongoing dam safety concerns · Lack of transparency and accountability |
| Key investors, financiers and insurers: | Equity investors included SK Engineering & Construction, RATCH Group, Korea Western Electric Power Co. and Lao Holding State Enterprise. Debt financiers included Krung Thai Bank, Ayudhya Bank (a controlled subsidiary of Mitsubishi UFJ Financial Group), Thanachart Bank, and the Export-Import Bank of Thailand. Other prominent backers of the project included Electricity Generating Authority of Thailand (EGAT), the Export-Import Bank of Korea and the Korean Economic Development Cooperation Fund. The project was insured by AIG, Korean Re and Samsung Fire & Marine, which was arranged by AON Thailand. The International Finance Corporation was also linked to the project through a 2021 loan to RATCH Group. |
| Our partners: | International Rivers, Mekong Watch, GongGam Human Rights Law Foundation, PeaceMomo, Korean Civil Society Task Force on Xe Pian, Project Sevana |
| Outcomes: | Survivors of the Xe Pian-Xe Namnoy dam collapse received $55 million in direct compensation for loss of life and property, and $35 million worth of emergency relief, including 700 new houses, infrastructure and farmland for those who were physically displaced by the disaster. |
On July 23, 2018, saddle dam D of the Xe Pian-Xe Namnoy hydropower project in southern Laos collapsed, unleashing millions of tons of water that inundated villages, killing at least 71 people, leaving thousands homeless and destroying crops and property as far as 80 kilometers away in northern Cambodia.
The dam company and local authorities had information that cracks were forming in the dam days before it collapsed, but failed to act in time. And despite evidence suggesting that the dam’s lead developer and builder, the Korean firm SK Engineering & Construction, caused the collapse by cutting corners to maximize profits, no one was held accountable. Survivors were left for years without proper compensation.
At the request of local organizations working with the affected communities, Inclusive Development International followed the money behind the Xe Pian-Xe Namnoy project to determine who should be held accountable and how survivors could pursue justice and redress. In a 2019 report, we identified a range of high-profile stakeholders that had invested in or were profiting from the project. Our investigation also revealed that the dam’s developers had taken out $50 million in liability insurance that should have been paid promptly to the victims.
We used this information to launch a sustained campaign against the project developers and financiers, mobilizing individuals from around the world to engage in digital actions targeting the responsible entities, and focusing media attention on the disaster, including our exposé of the project’s $50 million liability insurance policy.
In 2022, we learned from correspondence between the Korean government and UN Special Procedures that survivors of the dam collapse had received $55 million in direct compensation (including the $50 million insurance payout) for loss of life and property and $35 million worth of emergency relief, including 700 new houses, infrastructure and farmland for those who were physically displaced by the disaster. This compensation was based on agreements reached in the spring and summer of 2020, approximately one year after we published findings from our investigation.
“From the moment the flood hit, I thought we would all die. I don’t know who will take responsibility for this loss of life, and I don’t know what’s next for my family and the others. If we settle down again in the same village, we will live with the fear of not knowing when this might happen again.”
Our findings were published in July 2019, on the one year anniversary of the dam collapse, in a joint report with International Rivers, Reckless Endangerment: Assessing Responsibility for the Xe Pian-Xe Namnoy Dam Collapse. The report identified three firms—Korea Western Power, Ratchaburi Electricity Generating Holding of Thailand (now RATCH), and the Lao government-owned Lao State Holding Enterprise—that had joined SK Engineering & Construction in a private-sector consortium that was financially backing the project, and four Thai banks that had also provided funding. We detailed how the Asian Development Bank had played a critical behind-the-scenes role moving the project forward and how the Korean and Thai governments had backed the project through entities they controlled. As mentioned above, our research also revealed that the dam’s developers had taken out $50 million in liability insurance to cover losses suffered by third parties.
We used these findings to launch a public advocacy campaign and website calling on the responsible parties to meet their human rights responsibilities to the victims, including by establishing a dedicated fund and an accessible claims process through which affected people could receive compensation payments.
Our ongoing research on the project also revealed that in 2021 the International Finance Corporation made a $150 million loan to RATCH, the project’s construction supervisor, to develop hydropower projects in Southeast Asia. We used this information to pressure the IFC to use its leverage and considerable influence as a global standard-setter to urge RATCH to fulfill its human rights responsibilities to victims.
Based on information from Inclusive Development International and others, UN Special Procedures have on multiple occasions written to the companies and governments linked the dam collapse requesting information. In 2022, responses from several of these entities, including RATCH Group, Xe-Pian Xe-Namnoy Power Company and the Korean government, included more detailed information on compensation paid to survivors, including specifics of the compensation agreements reached in 2020 and confirmation that the majority of compensation has now been received by survivors.
Inclusive Development International and our partners have not been able to independently confirm whether all this compensation was in fact received by the survivors or whether it was partially diverted to government agencies and officials. It is also unclear whether the new homes, infrastructure and land allotments will be adequate to enable the Lao and ethnic minority communities affected by the disaster to live dignified and self-reliant lives. Communities and development agencies have raised questions about whether the available water sources and land will be sufficient to meet people’s needs. Meanwhile, the track record of the project operator, Xe Pian-Xe Namnoy Power Company (PNPC), and its shareholders, remains tarnished by the record of the project’s initial resettlement site on the Bolaven Plateau, where people have consistently faced dire hunger, water insecurity, lack of sufficient housing and electricity, and land impoverishment.
Finally, while the project developers have denied the findings from the Lao government-commissioned independent expert report that pointed to construction problems as prompting the collapse, they have been unable to offer any other evidence-based explanation, raising concerns about the safety of the structure and the threat of another failure.Despite these ongoing safety concerns, the project remains operational.
Insurers called upon to help victims of Laos dam collapse — Insurance Business Asia — July 30, 2019
One year from Laos dam collapse, insurers urged to help — Nikkei Asian Review — July 28, 2019
Stop work on Lao Dam and Help Victims: Groups — Asia Times — July 24, 2019
Dam disaster that ‘no one’ caused, one year on — The Nation Thailand — July 23, 2019
