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Laos: Groups demand accountability from companies as well as insurers for collapse of Xe Pian-Xe Namnoy dam

On 23 July 2018, a dam in the Xe Pian-Xe Namnoy hydropower project collapsed and released massive amount of water that resulted to disastrous flooding in districts of southern Laos.

Business & Human Rights Resource Centre invited the companies involved in the construction and finance of the project to respond to allegations of faulty construction. The companies invited to respond were: 1) Export-Import Bank of Korea; 2) Krung Thai Bank; 3) Bank of Ayudhaya; 4) Lao Holding State Enterprise; 5) Korea Western Power Company; 6) Mitsubishi UFJ Bank 7) Ratchaburi Electricity Generating Holding Public Company; 8) SK E&C; and 9) Xe-Pian Xe-Namnoy Power Company. None of these companies responded.

Ratchaburi Electricity Generating Holding Public Company published a statement on their relief efforts in the affected communities. SK E&C also has a similar statement.

A report by Inclusive Development International and International Rivers entitled Reckless Endangerment: Demanding Accountability for the Xe Pian-Xe Namnoy Dam Collapse mentions several insurers of the project – not just in the form of construction insurance coverage but also for other liabilities such as those resulting from the loss and damages incurred by the communities.

The Resource Centre invited American International Group (AIG), Aon, Asia Capital Reinsurance (ACR), Korean Reinsurance, and Samsung Fire & Marine Insurance to respond to the allegation in the report. The companies did not respond.

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Company non-response
26 August 2018

Korea Western Power Company did not respond

Business & Human Rights Resource Centre invited Korea Western Power Company to respond to a report alleging faulty construction of the collapsed dam that forms part of the Xe-Pian Xe-Namnoy hydropower project in Champassak, Laos.  The company did not respond.

Company non-response
26 August 2018

Krungthai Bank did not respond

Business & Human Rights Resource Centre invited Krung Thai Bank to respond to a report mentioning the bank as a co-financier of the companies involved in the construction of the collapsed dam that forms part of the Xe-Pian Xe-Namnoy hydropower project in Champassak, Laos.  The company did not respond.

Company non-response
26 August 2018

Lao Holding State Enterprise did not respond

Business & Human Rights Resource Centre invited Export-Import Bank to respond to a report alleging faulty construction of the collapsed dam that forms part of the Xe-Pian Xe-Namnoy hydropower project in Champassak, Laos.  The company did not respond.

Article
26 August 2018

Mekong Watch statement urges companies who built and finance collapse dam to compensate communities

Author: Mekong Watch

"Grave damage caused by dam collapse in southern Laos: Funds from Japan involved in the project development," 31 August 2018

On July 23rd, a devastating incident occurred in the Sanamxay District of Attapeu Province in southern Laos. The top of a saddle dam (*1) installed at one of the reservoirs of the Xe Pian-Xe Namnoy hydropower project (*2) collapsed, releasing a massive amount of water...

According to early reports, dozens of deaths have been confirmed and at least 6,000 people in 1,370 households have lost their homes to date...

The...project is implemented by a joint venture between a Thai company, two South Korean companies, and a Lao state-owned enterprise. Japan is also involved in its financing. Among the Thai banks that co-finance the joint venture, the Bank of Ayudhya Public Company is currently under the umbrella of Japan’s Mitsubishi UFJ Financial Group (MUFG). The bank’s 76.88% share is held by the MUFG’s Mitsubishi UFJ Bank (MUFG Bank) (*6). Although the Bank of Ayudhya’s decision to finance the joint venture was made before the integration of the bank with MUFG Bank, currently a number of Japanese nationals hold the bank’s management positions, including CEO (*7). Also, Japan’s Government Pension Investment Fund (GPIF) owns shares worth 1,402,665,244 yen (approximately 13,954,300 USD) of the Krungthai Bank, another Thai co-financer of the joint venture, and credits worth 6,268,142,275 yen (approximately 58,993,900 USD) of the Export-Import Bank of Korea, which finances Lao Holding State Enterprise (LHSE) that formed the joint venture (both figures as of end of fiscal year 2017).

The companies directly involved in the dam project must take the primary responsibility for the consequences of this incident, both in terms of the immediate suffering of thousands of directly affected people, but also long-lasting implications... [F]inancial institutions that made it possible for the companies to build the dam, the development policies of the Lao government (which depend heavily on large-scale dam building), and the donor countries and agencies that have supported such development policies all need to be examined.

Company non-response
26 August 2018

Ratchaburi Electricity Generating Holding Public Company did not respond

Business & Human Rights Resource Centre invited Ratchaburi Electricity Generating Holding Public Company to respond to a report alleging faulty construction of the collapsed dam that forms part of the Xe-Pian Xe-Namnoy hydropower project in Champassak, Laos.  The company did not respond.

Company non-response
26 August 2018

SK E&C did not respond

Business & Human Rights Resource Centre invited SK E&C to respond to a report alleging faulty construction of the collapsed dam that forms part of the Xe-Pian Xe-Namnoy hydropower project in Champassak, Laos.  The company did not respond.

Company non-response
26 August 2018

Xe-Pian Xe-Namnoy Power Company did not respond

Business & Human Rights Resource Centre invited Xe-Pian Xe-Namnoy Power Company to respond to a report alleging faulty construction of the collapsed dam that forms part of the Xe-Pian Xe-Namnoy hydropower project in Champassak, Laos.  The company did not respond.

Article
29 July 2018

Laos: Official says project developer must be held accountable for dam collapse

Author: Radio Free Asia

"Lao Dam Collapse Caused by Heavy Rains, Faulty Construction: Minister", 26 July 2018

A high-ranking Lao official suggested...that a dam collapse earlier this week in Champassak province was the result of faulty construction and said the project’s developer should be held accountable, as the death toll from flooding has reached 30, with more than 20 hospitalized for injuries.

...Minister of Energy and Mines Khammany Inthirath...[said] that the burst was caused by “heavy rainfall” and “construction technique.”

Earlier...Khammany told reporters that the construction company should take full responsibility for the incident.

“I confirm that compensation will be given according to the concession agreement,” he said.

“Everything that happened is related to the dam construction, so the developer [Xe Pian Xe Namnoy Power Co. Ltd] must be held 100 percent accountable,” he added, without providing further details.

...[D]eath toll from the collapse had risen to 30...with more than 20 people hospitalized with related injuries...

Read the full post here