During the last fifty years, between 30 and 80 million people have lost their homes and livelihoods through dam construction. In the wake of fiscal crises and changing donor priorities governments are turning to the private sector to finance dam projects. New research warns that those displaced by dams could suffer even more as a result.

Dams are potent symbols of triumphant technology and ‘progress’. In the second half of the twentieth century the number of large dams rose from 5 000 to 45 000. Many have failed to deliver the promised benefits of increased electricity and agricultural productivity. Dams are controversial not only because they break up communities but also because they:

• flood valuable farmland and animal habitat
• capture sediment which backs up, restricts water flow and eventually reduces hydroelectric potential
• endanger freshwater habitats
• spread diseases by encouraging insects that thrive in stagnant reservoir water
• submerge archaeologically and culturally significant sites
• introduce the risk of catastrophic dam failures.

Research from the University of Oxford’s Refugee Studies Centre compares approaches to resettlement and compensation taken by the World Bank and private companies. The research examined three Mexican dam projects, two of which were co-financed by the Mexican government and the World Bank while the other was a joint venture between private companies and the government. Although all three caused people to lose their homes and fields, the resettlement conditions in the World Bank-assisted projects were far superior – a participatory process which was a welcome change to the coercive nature of previous Mexican dam projects.

By contrast, private sector financiers were unconcerned about resettlement standards, unresponsive to community pressures and driven by strict construction deadlines. The indigenous people who lost their homes and livelihoods now subsist by recycling cans and beer bottles left behind by tourists. Critics have accused the authorities of complicity in ‘ethnocide’.

The Mexican government is not alone in failing to regulate and monitor financiers to protect displacees. In Uganda the US-based AES corporation, the world’s largest independent power producer, has been given financial guarantees against risks involved in constructing a dam on the Nile despite fierce local opposition. In Brazil the company building the Cana Brava Dam is accused of intimidating displaced people into accepting inadequate compensation.

Policy-makers and researchers need to:

• realise that despite their poor track record international agencies (particularly the World Bank) have become more participatory and transparent in recent years and have experience to transfer to the private sector
• follow up the World Commission on Dam recommendations on developing international resettlement standards
• tighten international codes for ethical behaviour among multi-national corporations impervious to civil society pressure
• learn more about the behaviour of particular export credit agencies – why are some accountable to public opinion and parliamentary oversight while others operate secretively.

As governments turn to the private sector – rather than multi-lateral or bilateral development agencies for assistance – the victims of infrastructure projects are at risk. Without strong regulatory and monitoring capacity the needs and rights of the displaced will continue to be marginalised by private developers’ drive to meet construction deadlines and maximise profits.

Source(s):
‘Financing matters: where funding arrangements meet resettlement in three Mexican dam projects’ by Jason Stanley, Working Paper No 14, Refugee Studies Centre, University of Oxford, October 2003 Full document.

id21 Research Highlight: 26 January 2004

Further Information:
Jason Stanley
33 O'Reilly St.
St. John's, NL
A1E 3H2
Canada

Contact the contributor: jstanley@wso.williams.edu

Refugee Studies Centre
Queen Elizabeth House
University of Oxford
21 St. Giles
Oxford OX1 3LA
UK

Tel: 44 (0) 1865 270722
Fax: 44 (0) 1865 270721
Contact the contributor: rsc@geh.ox.ac.uk

Refugee Studies Centre, University of Oxford

Other related links:
'Constructing dams: not necessarily a good thing?'

'Victims of progress: resettling people displaced by development'

'Rights for the world's evicted. Are development projects harming people there meant to help?'

5 dam case studies from wideangle

'Dam Dam Dam' - Earth Report's

'Development or displacement?' - from The Hindu