By Amanda Radcliffe
Last October, the Bakun Dam project contracts were signed in Malaysia between the Swedish-Swiss Asia Brown Boveri (ABB) consortium and Ekran Berhad. The US$5.5 billion Bakun Dam, masterminded by the timber tycoon and executive chairman of Ekran, Ting Pek Khiing, threatens to flood 700 square kilometres and would stand at a height of 204 metres, nearly twice the height of Egypt's Aswan dam.
Steeped in controversy since it was first conceived in 1980, the dam has been the focus of escalating opposition. The project has been described by Jerome Rousseau, a French-Canadian anthropologist who has been working with the affected people for over 20 years, as a "monument of greed, arrogance and selfishness".
Criticism of the project and calls for its abandonment have come from 250 NGOs from 30 countries, including 40 within Malaysia, 35 members of the European Union parliament and a prominent Malaysian parliamentary opposition member.
The project was conceived in the expectation that there would be significant economic growth up to the year 2010. Malaysia, Indonesia, Burma and Laos all have hydro-power reserves with massive potential for development.
Initial plans to use international financing were dropped in 1993 in favour of a corporate backer. The contract was won by Ting Pek Khiing, a local Sarawakian and close business colleague of Malaysian Prime Minister Mahathir Mohammad.
Investment capital is to come from a consortium of companies in which Ting's Ekran and the state government will provide 51%. The use of state employees' pension funds as a source of finance has also come under fire. By avoiding development bank support, the Bakun consortium also bypasses the need to meet environmental and resettlement requirements.
Ting has been busy positioning Ekran to reap maximum gains from the project; four of Ekran's associated companies have won the lion's share of subcontracts worth RM$4.5 billion, 35%-40% of the total energy procurement and the construction contract for the dam.
Thus Ting stands to gain through three avenues: as contractor, shareholder and through timber proceeds from the 80,000 hectares to be flooded (2% of Sarawak's remaining tropical forest) which Ting estimates to be worth at least RM$1.2 billion.
Ekran has already spent over $40 million on preliminary work which is subcontracted to South Korea's Dong-Ah Construction and Industrial Co, the same company that built the Songsu bridge over the Han River in central Seoul which collapsed killing 32 people in 1994.
ABB's involvement in the project makes a mockery of its leading role in the World Business Council for Sustainable Development.
ABB has ignored the Malaysian High Court's decision that the consortium comply with environmental guidelines and not abuse the rights of the affected indigenous people. It has also been accused of using outdated technology banned in Sweden because of detrimental environmental and social impacts.
Furthermore, ABB has a controversial history of involvement in the Malaysian power industry, with the sale in 1990 of seven gas turbines valued at $500 million for $1 billion each.
The main construction company for Bakun is from the Oderbrecht group, which built the Itaipu and Xingu dams in Brazil. Both went over budget, by 488% and 100% respectively.
The first legal attack on the project came when three local tribesmen from the affected region brought a civil action against Ekran. In its July 19 ruling, the High Court found that the national government had violated the National Environmental Quality Act by transferring responsibility for approving the environmental impact assessment (EIA) to the state authorities in Sarawak (a shareholder in the project).
The court ruled that Ekran had to comply with the national act before it could build the dam. But when the civil action was subsequently dropped, Ekran was allowed to continue work, pending an appeal, but not until after Ting threatened to sue the three plaintiffs for estimated losses of almost $4 million for each day the project was stalled.
The appeal has been set for February 17."It's no big deal", said a source in Ekran. "The EIAs ... will be approved if the government wants the project to go ahead." Logging of 80,000 hectares of tropical rainforest to be submerged is well under way.
The World Bank (whose record on such projects is fairly insensitive) estimates that an average of 9% of appraised costs would need to be spent on resettlement.
However, the highest figure quoted for the cost of resettlement so far is RM$300 million — a mere 2.2% of the total cost of the project. In addition to this sum, the more than 9000 indigenous people affected are to receive "20,000 hectares to be converted into estates where the affected families would be relocated and given employment", said the chief minister.
These "estates" continue to be the target of much criticism, as they have often meant increased poverty and a significant loss of economic self-sufficiency for those who enter them as labourers.
A Bakun Trust Fund is supposed to provide the approximately 30,000 affected residents of the Belaga district, regardless of where they currently reside, with education and training. The fund, which currently contains RM$15 million, averages out to RM$500 or approximately A$260 per person — hardly a generous sum.
Huge anomalies also remain in the compensation agreements for the Bakun project. The Sarawak Museum continues to negotiate the future of graveyards which will be flooded. Another issue yet to be resolved is the effect of the 665 km overland cable that will link the dam to the coast, which will pass through protected native lands, pepper and rubber estates and five forest areas, and near to 15 long-house communities.
A few stand to gain a great deal through the dam project. Mahathir's personal interest in the project is clear from the six visits he has already made to the site. With murmurings that his 15-year career as the country's leader is approaching its end, the project at least provides Mahathir with a monument of adequate proportions to remind the nation and the west of his role in Malaysia's development.
But for thousands of people whose lives are being affected and a huge tract of tropical rainforest with extensive biodiversity and marine life, the future may not be so rosy. Indeed, to the 40-strong coalition of Malaysian NGOs the Bakun project is "socially destructive, environmentally disastrous and economically misconceived".
[Amanda Radcliffe is from the Department of Sociology and Anthropology, University of Newcastle.]