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22 Feb 2021

Cambodia: Communities impacted by Lower Sesan 2 Hydropower Project seek IFC dispute resolution process; Companies' responses

Community Concerns

The Lower Sesan 2 Hydropower Project is located on the Sesan River, Stung Treng Province, Cambodia, below the confluence of the major Sesan and Srepok tributaries and about 25km from the Mekong River. The communities impacted by the project largely depend on the land and natural resources along the river. According to the affected communities, the dam project has caused major adverse impacts to their ancestral land, their livelihoods and traditional practices, whereas these impacts have not been properly addressed or compensated.

The majority of the communities are indigenous and ethnic minority people. Many people in the project-affected communities opposed construction of the project due to concerns over its impacts on their lives. However, the communities pointed out that they were not appropriately consulted during the project’s planning and development process, including during the environmental impact assessment and the development of the compensation and resettlement plan. Some communities, including those located upstream and downstream of the project, were not consulted at all. This has been documented in studies of the environmental impact assessment and resettlement process. According to the communities, the Project has failed to comply with obligations under Cambodian law and international standards.

IFC’s Independent Dispute Resolution Process

The communities are now seeking an independent mediation process to address their concerns through the (Compliance Advisor/Ombudsman) CAO,​ ​which is the independent accountability mechanism for one of the project’s financiers (the IFC). The communities have filed complaints to the CAO regarding the IFC’s financial ties to the Project. In July 2018, the CAO found their complaints admissible, referred their case to independent dispute resolution, and reached out to government and corporate stakeholders.

The CAO received a response from the Cambodian Ministry of Interior that the provincial authorities had declined to participate in the dispute resolution process. The authorities have acknowledged that issues remain with the Project’s impacts on local people, however, the communities are under pressure from the authorities to accept a resolution that does not meet their needs or address their concerns.

Company Responses

In 2014, the Business & Human Rights Resource Centre sought a round of company responses in relation to communities' concerns over the Lower Sesan 2 Hydropower Project.

In November 2020, the Sesan communities reached out to the following companies to urge them to exercise their power and influence to ensure that affected communities can have a meaningful dispute resolution process facilitated by the CAO, with the good faith participation of all relevant stakeholders, including provincial authorities. The letters are attached below (in English and Chinese).

In February 2021, the Resource Centre reached out to the following companies. Responses are as follows.

Company Responses

China Huaneng Group View Response
Credit Suisse View Response
Standard Chartered View Response
China Development Bank

No Response

Bank of Communications

No Response

Agricultural Bank of China

No Response

China Construction Bank

No Response

China Everbright Bank

No Response

Industrial & Commercial Bank of China

No Response

An Binh Commercial Joint Stock Bank

No Response

Crédit Agricole

No Response

Vietnam Electricity

No Response

EVN International

No Response

VietinBank

No Response

China Merchants Bank

No Response

Bank of Ningbo

No Response

Shenwan Hongyuan

No Response

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