Sarawak, Malaysia – The Murum Dam was not supposed to attract media attention until May of next year. Located in a remote rain forest on the island of Borneo, the project is hours away from the nearest logging town. Construction on the dam began in 2008 and is now only months from completion. With the help of Australian company Hydro Tasmania, the Sarawak state government advertised the Murum Dam as a model of “best practice” for what a socially responsible dam should look like. Chinese investors signed up to help build the dam and then 11 more in Sarawak. The Murum Dam was selected to become a success story in May 2013 when it is showcased at the hydropower industry’s next global conference.
And then the Murum Dam’s reputation collapsed on September 26th, when 200 villagers blockaded the access roads leading to the dam site. The villagers represented 1,500 indigenous people from the Penan and Kenyah communities who will lose their homes when the dam’s reservoir is flooded. The villagers knew they would soon be resettled, but did not know the details until the government’s plan was leaked to them in September. Many were angered to learn that poverty awaits them at their new homes. Over the past three weeks, the blockade has prevented vehicles from entering the site. Construction has come to a halt.
The blockade has prompted a closer look at the Murum Dam. Rather than being a “best practice,” it turns out that the project has been poorly managed for years. But in many ways, the Murum Dam experience presents an important opportunity for the Sarawak government. The blockade has highlighted a number of concerns that require urgent reforms in Sarawak. If addressed now, the Sarawak government might be able to prevent a much larger conflict from emerging.
Little information is available to the public about the 944 MW Murum Dam. It is the first of 12 dams that will provide electricity for a multi-billion dollar Sarawak government initiative called the “Sarawak Corridor of Renewable Energy” (SCORE). The government promises that SCORE will bring jobs and rapid economic development, while critics argue that alternatives exist to develop Sarawak more responsibly. Evidence already suggests that the extra electricity is not needed in Sarawak, and that corruption is the real driving force behind the decision to build the dams.
The Murum Dam is supposed to be proof that SCORE works. Yet the dam’s reputation is also important for several major players in the global hydropower industry. The International Hydropower Association, an industry lobby that promotes large dams, decided to hold its May 2013 global hydropower conference in Kuching, the capital of Sarawak. At this event, the IHA will showcase the Murum Dam as best practice. The IHA is also testing its new voluntary sustainability tool on the project. By choosing to champion the Murum Dam as an example of responsible hydropower, the IHA has an interest in seeing that the project performs well.
Two of China’s state-owned dam builders are constructing the project for the Sarawak government. These include China Three Gorges Corporation (which built the controversial Three Gorges Dam in China) and Sinohydro (the world’s largest dam builder). Because this is China Three Gorges Corporation’s first project outside of China, the reputation of the Murum Dam will reflect on the company’s emerging global brand. Nevertheless, both companies are relying entirely on the Sarawak government to manage the project’s reputation. This may prove to be an unexpected embarrassment for the Chinese government if the controversy continues. Sarawak, in turn, is relying on China’s support to build the next 11 dams.
With so much at stake, the Sarawak government is still searching for an appropriate response to the Murum Dam Blockade. So far, it has tried a variety of approaches—setting up police near the blockade, sending politicians to negotiate with the communities, declaring the blockade over, and accusing civil society organizations of instigating the blockade. The villagers have issued a set of demands, asking that their rights under the UN Declaration on the Rights of Indigenous Peoples are respected. The Sarawak government has not yet met these demands.
Throughout the government’s responses, however, one thing has become clear: the reputation of the Murum Dam matters. The government has repeatedly argued that the Murum Dam follows the highest “international standards.” Since 2011, government officials have publicly stated that the project follows a long and growing list of social and environmental standards—the UN Declaration on the Rights of Indigenous Peoples, the World Bank Group’s corporate responsibility standard, the “Equator Principles” standard for commercial banks, as well as the voluntary tool being piloted by the International Hydropower Association.
But what does it really mean when a project “follows international standards”? Generally, international standards set forth the process for designing a responsible development project. For example, companies are expected to conduct an environmental and social impact assessment and disclose this document to the public. This is done before construction begins, so that affected people can have a voice in designing the project in a way that prevents harm. Companies are also expected to consult with affected people throughout the life of the project. Because indigenous peoples are especially vulnerable, companies are expected to obtain their free, prior and informed consent before the project can go forward.
Evidence suggests that the Sarawak government has failed to meet all of these standards. The Murum Dam’s environmental and social impact assessment has still not been disclosed to the public, even though construction began years ago. As a result, affected communities did not have access to the impact assessments when the company approached them to negotiate a resettlement deal. The communities were forced to negotiate without full knowledge of how the dam would affect them. Communities had no opportunity to grant or withhold their free, prior and informed consent. When complaints arose, the communities had nowhere to turn. Given these circumstances, there is little surprise the communities resorted to a blockade to have their voices heard.
The problems raised by the villagers at the Murum Dam Blockade are just the tip of the iceberg. The deeper source of the conflict lies in Sarawak’s faulty laws and policies. Malaysian national law recognizes the rights of indigenous people, but the Sarawak state government has not implemented many of the most basic protections. In Sarawak, many indigenous groups make a living through a combination of activities— farming, hunting, fishing, and collecting food and forest products. They rely heavily on the forests and rivers. Rather than recognizing how much these communities depend on the forests, the Sarawak government only recognizes their rights to farmland. Indigenous groups in Sarawak can obtain title to land that looks like it is being cultivated. Forests and other land that appear unused to the casual observer are not recognized by Sarawak law.
As a result, many communities have found their traditional lands given to timber and oil palm companies. Likewise, the Murum Dam’s resettlement plan reveals that the government intends to remove the indigenous groups from the forests and expects them to survive by farming the small plots of land provided at the resettlement sites.
Indigenous groups are likely to view any promises made by the Sarawak government with skepticism. Many people in Sarawak still recall the 2400 MW Bakun Dam, which was completed in 2011 on the same river as the Murum Dam. The Bakun Dam displaced over 10,000 indigenous people, many who are living in poverty over a decade after their resettlement. Corruption is also rampant in the Sarawak government, further reducing the likelihood that promises made today will be kept a few years down the road.
The Murum Dam Blockade is a symptom of much larger concerns. In addition to resolving the immediate concerns of the Murum Dam affected communities, the time has come for meaningful reforms in the way that Sarawak does business. Stronger protections for indigenous rights and greater transparency around the SCORE initiative are just the start. A strategic environmental and social assessment that examines the overall impacts of the 12 dams would be another important step. Corruption in the distribution of SCORE contracts needs to be brought under control.
Until these reforms are in place, the Sarawak government can expect continued conflict. Communities near the sites of other planned dams—such as the Baram Dam—have already indicated that they will resist the projects. The foreign companies investing in Sarawak’s dams can expect high costs and delays, tarnished reputations, and the risk of being implicated in human rights violations. As of now, the Sarawak government is still a very risky business partner for environmentally and socially conscious companies. Investors, beware.
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