THIS STORY FIRST APPEARED IN SHORTER VERSION ON PAGE ONE OF THE WASHINGTON POST SUNDAY OUTLOOK SECTION, FEBRUARY 11, 1996.
The General and Me
A New Gold for the Golden Triangle
By Doug Fine
“Nothing is illegal if a hundred businessmen decide to do it.”
-Andrew Young
Vientiane, Laos
It’s tough to find someone who has a bad word to say about General Cheng Sanyavog, a Lao military honcho who doubles as CEO of a timber front business called the Mountainous Development Company. The schools he builds, the jobs he provides and even the Ferris wheels he erects made me feel like I was covering a story in Cali or Medellin, not a tiny, nearly undefiled country sandwiched between Vietnam, Thailand and Cambodia. At his private zoo in the boomtown Lak Xio, the General is housing the only captive specimen of a bovine animal called the saola, an individual so rare it was only cataogued by Western science in 1992. The animal, a pregnant female, was captured just this past January 8. The fact is, no one denies General Cheng is also cutting down large amounts of some of the most pristine and biologically diverse old growth evergreen forest left on Earth.
Laos, by virtue of its recent coming out ball into the world of what economists call “development,” has a chance to avoid the disastrous ecological fate of its neighbors Vietnam and Thailand, and indeed that of all countries which have succumbed to the siren-like call of too rapid development. The dilemma is not difficult to explain: a bureaucrat in a Department of Forestry in a country so cash poor that it can’t pay its soldiers has an understandably hard time explaining to superiors why he would be against a dam or a timber harvesting project worth more money than anyone has ever seen. But Laos has been saying no for twenty years (would be investors use terms which I’ll euphemize here as “darned frustrating.”) When one talks to a government official in this communist-by-name-only state, one tends to see an impressive awareness of the environmental pillage going on in the forests of say, Vietnam, and the difference between short term and long term profit.
But this isn’t any old forest Laos has sitting in it’s central eastern periphery adjacent to the mountainous Vietnam border and traversing the Ho Chi Minh trail. It is home to healthy populations of tiger, clouded leopard, Asiatic Bear, and rare species of barking deer and elk, like the new bovine, just identified by Western Science less than two years ago. I was dumbfounded reading the early research reports which imply a literal Shangri La. And as it is justifiably fashionable to talk about the human presence in sensitive areas when discussing environmental impact, there are more than 4000 ethnic Hmong who live in this Annamite region, many of whom have never heard of a hydroelectric dam or even of the Vietnam War.
Enter the World Bank, General Cheng and a onomatopoetic, phlegm-expelling name: the Nam Theun II Dam (don’t say it with someone standing closer than six inches away). Restraint-savvy or not, ask yourself if you would be able to turn down outright a construction project in your backyard worth, at $1.2 billion, more than the gross national product of your entire country.
Let’s be quite 1990s about this. Before addressing the almost unimaginable human and environmental impact of this proposed dam, let’s talk economics. Ask someone from the U.S. Bureau of Reclamation: big hydroelectric projects rarely are constructed on time or on budget, and even more rarely provide the electric output they promise. Why? Dam proposals, such as the one written up for the Nam Theun II, often assume wishful 80% output rates for river flows (Laos’ existing dams run between 40 and 60% according to sources in the country).
As for the budget: Laos would be a 25% owner of Nam Theun II as it stands now. Foreign companies would own the rest. The average dam goes over budget by 30%, according to World Bank records, and even by the admission of Lao official I interviewed, Dr. Sonephet Inthavong, of the Committee for Planning and Cooperation, which is overseeing Nam Theun II. If Nam Theun II is built, and goes over budget by a conservative 15%, that leaves Laos with a tab of $45 million. How will a destitute country which only invested $10 million in health care last year foot such a bill? The answer: it can’t. (The U.S. market spent $17 billion on pet food last year, I heard on NPR while typing this sentence).
But the dam doesn’t even have to be built for the damage to be done. In fact, it already is. Possibly irreparably. The way things operate in this part of the world, all anyone needs from the government to get the ball rolling a deal is something called a Memorandum of Understanding (MOU). This allows the timber interests (in Laos, read General Cheng and the Mountainous Development Company) to start clearing huge areas of ancient first growth. It also provides the dam construction companies like Australia’s Transfield with a valuable chip on the table in any kind of negotiation. As it was explained to me by an American businessman in Vientiane (nearly everyone speaks on condition of anonymity, because Vientiane is such a small town, and Laos not exactly pluralistic), the companies which control Nam Theun II now, a consortium of Transfield, French and Thai interests, might have no intention of following through on the thirty-year lease from the Lao government. They might just sell off the rights when they need liquidity, or use them as a trump card to boost stock prices. Already, the company that received the MOU passed the rights on to the current consortium.
As for the General, well, I followed him all over the country, trying to ask him if he we could sign an MOU to set up a time to discuss if was aware of some of the ramifications of his personal timber industry. No one quite knows how many trees have been cleared in the 447 square kilometer “inundation zone” for the dam, which, remember, isn’t even approved. I also photographed illegal logging going on in other areas of the same forest now that the floodgate allowed by the Nam Theun II MOU has opened and it is clear how little oversight there is. In the Vientiane offices of the remarkably savvy Mountainous Development Company (which one Lao aid worker joked will no doubt soon add “sustainable” to its name), I was told the General wasn’t in, but a manager had nothing to hide: “Oh, sure, we’re pulling in a ton of money from the timber,” this Mrs. Sengmany Viyaketh said, shooting me an “Is the Pope Catholic?” look at my inquiry. “These are some of the straightest, tallest evergreens in the world.”
I tailed the General up to Lak Xio (staying at the MDC-owned hotel there), the timber boomtown just outside of the inundation area, where a market has sprung up selling plastic buckets and rare mammalian meat to the families of mostly Vietnamese timber workers (Western researchers regularly scour the market as potential new species discover sites). I visited the General’s manorial mansion leading away from the town’s hastily-constructed central square against the breathtaking backdrop of the Annamite range, and shouted inside his gate. No answer. It was the eve of the Hmong New Year, and villagers dressed in traditional clothing were filtering into town on bicycle and on foot, unaware that it might be among the last years their villages have a water source.
Famous as a nature lover who had a pond constructed behind his house so exotic ducks and swans would be visible from his bedroom window, the General’s zoo was known to be nearby, and I was intrigued. A helpful man with an AK-47 showed me behind the grounds to what was indeed the General’s private menagerie. There, tucked in an inconspicuous cage behind a neurotic Asian Bear and a jungle gym for the kids, was the world’s only known captive specimen of the Giant Barking Deer, or muntjac, another newly-catalogued mammal. So fresh to outsiders that it’s only been explored a few times, researchers enter the Annamite Plateau forest being cut now joking about the names they will give to the new species they identify (”The Cheng-killed antelope” was one suggestion I heard for a hypothetical species discovered and vanquished through lack of habitat in the same generation).
The deer, a rather ugly, timid prima donna whose skulking elusiveness is probably the reason no one identified it until so recently, made itself extremely difficult to photograph, and I had to chase it for a pretty good while to get a shot.
Since the General clearly wasn’t home (the word around Lak Xio was that we had criss-crossed on the road and he had headed back to Vientiane for some meetings), I hopped on a logging truck and tried to reach the proposed dam area myself. This was unsuccessful, for a number of reasons not the least of which was the driver was unimpressed with my gift of Thai-produced Marlboros (he thought I was giving him the “genuine American” article). So I decided to attack the region from the South by motorbike, setting out from yet another logging boom town, Thakhek, about 150 km south of Vientiane and a nine hour, livestock-filled bus ride from Lak Xio. When I pulled into town, logging trucks were lined ten deep at a Shell station. This time I had more luck, traversing the periphery of the Nakai Nam Theun National Park, which would be decimated by the dam on its border, according to nearly every foreign aid organization working in the area. After all, the major river (the Nam -meaning “River” - Theun, which is the name of both the dam and the park) feeding the park will be choked. “There could hardly be a place chosen which would have more impact,” a scientist familiar with the region who I consider very levelheaded told me.
More than obvious even to the casual visitor (and I am to date the only casual visitor), the logging industry in Eastern Laos is no temporary phenomenon which plans to shut down after some kind of inundation zone is cleared for a possibly apocryphal dam. Less than an hour outside of Lak Xio, literally in the middle of the forest and adjacent to traditional bamboo thatched villages, I saw Western, suburban-style housing being erected for timber workers, complete with TV antennas and general stores. It is simply too profitable to stop. At $2400 per first growth tree, wholesale, more valuable than heroin, which is said to be the reason for Lak Xio’s existence prior to the General’s setting up shop. For a logging outfit to leave this forest alone would be like Patton halting an advance because the Germans made a law banning an invasion.
Around each turn as I sped out of Thakhek up the red clay road to the Plateau just after sunrise, I was greeted by a new layout of stark, bulbous peak, lake, flowering meadow, and here and there a rice field with grazing water buffalo. As I climbed, vast vistas of undisturbed forest as far as the eye could see unfolded into view, as dense as I’ve seen in Amazonia or Africa. “Tiger country,” my translator Boi said, and he was scared. “They attacked livestock here a few weeks ago.” At times the subtle inundations of rock caused by the interaction of wind, rain and Time allowed the limestone foundations of the mountains to come to the surface in Post Modern patterns between tangles of broadleaf evergreen trees. One was a giant pair of lips, for example.
But as I got deeper into the forest the roar of diesel engines belied increased human presence, and the blinding dust clouds from the approaching logging trucks started. The full Russian vehicles, heading back to Thakhek’s plywood mills and the MDC shipping docks along the Mekong across the street from my hotel, made full use of roads being widened by crews of $50 a month laborers. The General has every step of the process down. The trees (mostly cedar) are so huge that they reminded me of smooth Douglas Fir and each truck could only handle three or four of the often thousand-year-old specimens. The further one gets along the road toward the dam site, the more under construction the road is: brand new power lines teetering precariously beside cranes and Caterpillars reminded me, “if you build it, they will come,” and a killing field of orderly raw logs, each labeled with an ID number, lined the road in places like death camp victims. Everywhere was evidence of deforestation and erosion as I approached the village of Hua Phu, and the surviving trees were covered in the same dust which got so deep at times, we had to walk the motorbikes. When I got as far as I could go by motorbike along the Annamite Plateau, perhaps within the recently-changed National Park boundaries, I had Boi ask a local man heading home after hunting if he felt threatened or encouraged by the development hubbub. He didn’t know about any dam. He did say he noticed it’s been getting more difficult to find game the last year or two.
Perhaps the most educational part about my Annamite adventure was learning how nice-sounding terms like “environmental impact reports” and “resettlement of affected villages” are coopted by legions of professional consulting agencies, which line Vientiane streets like 7-11s in an American city. “We file our reports as earnestly as we can,” one consultant told me. “If they choose to delete the parts that indicate problems for a project, that’s not our problem.” Internal Lao Forest Department papers labeled “for government use only” leaked to me showed that for another Lao dam, the proposed Nam Leuk, EISes, “apparently did not recognize as existing” two of the three villages in the affected area. In another case, the sub-sub-contractor who finally did an EIS was the wife of the chairman of ElectricitŽ de Lao, which would be the equivalent of having Pat Nixon investigate Watergate.
The Wild Card in this whole mess is indeed the World Bank, the potential low interest loan guarantor for Nam Theun II. Reeling a bit from an obviously-ridiculous and since-canceled project in Nepal, these poor folks are caught in an ugly catch-22. It’s a wonderful idea to try to support development in poor countries. Indeed, much of the oft-touted “international community”, whatever that means, wouldn’t see the logic in allowing a country to remain “backward” (i.e. agrarian-based, without supermarkets and American pop music) when there exist opportunities for profit. Furthermore, my sources in the World Bank are big enough to admit that they’re just learning how to bring true environmental and social awareness to the table in project proposals. But the cacophony of protest around Nam Theun II is too loud to be ignored. It’s not just coming from conservationists, either. Lao Forest Department officials admitted to me that they are worried about the effects of the dam and the motives of other government departments like the Department of Geology and Mines. Those local villagers who are informed about the proposal generally told me dubiously, “Well, if it means more money for us it’s good.”
It means no money for them. Not one cent. The World Bank is biting it nails and most Bank people, itching to but afraid to talk on the record, call this project “extremely sensitive” because of the Nepal mistake. I asked Rachel McColgan-Mohamed, a World Bank external affairs official in Washington DC, to ask if the project will be supported by her organization, and was told “We are not committed either way.” And Lao CPC officials are not-so-privately very nervous that the Bank will indeed abandon Nam Theun II. If that happens, many argue, the project will lose the bulk of its private investors who, once they’re fully footing the bill, will recognize what a shaky and historically money-losing endeavor they would be getting into. It should be mentioned that another “lesser of two evils” school of thought, mostly propagated by economists who have spent very little time inside Laos, argues that even without the Good Housekeeping Seal of Approval from the World Bank and the environmental and socio-economic requirements such backing would require, the project will go forward anyway. This time, though, it would be financed by amoral Thai businessman who couldn’t care less if they flood out every rice field, tiger and villager in the country. Meanwhile, a tense Bank is financing a new EIS to be conducted this time by the Wildlife Conservation Society. A decision could take more than six months, according to my Bank Sources.
Why does a tiny, Great Britain-sized country like Laos occupy our crowded minds, in the face of the horrors of Bosnia, and massive China? “Many analysts are looking at Nam Theun II as a key indicator of what the investment climate will be for other major projects in the (Mekong) Basin,” says Owen Lammers, Executive Director of the International River Network. There are smaller, more sensible hydropower proposals on the table, according to Lammers and others familiar with Laos’ dam situation. More importantly, this decision can serve as a test case for wizened, independent states to determine their own destiny, in a more sustainable, civilized manner than the much wealthier nations whose well-intentioned methods have hardly ever worked elsewhere. As it develops, Laos would be much better served working within the parameters of its traditional bottom-up, village-based society than by centralized administration, according to nearly every Lao with whom I spoke. The culture is blessed with a traditionally democratically-chosen village headman system, as opposed to Cambodia and Vietnam, which appoint the village “mayor”. Imagine the efficacy of an EIS overseen by the village to be affected by the dam. And, indeed, the Lao legislature is considering laws giving local authorities much more enforcement power in a wide range of areas.
Will Nam Theun II be built? One long time, well-connected French expatriate in Laos told me he thinks, “It has to, because to not build it at this point would entail a tremendous loss of face. But I think it will be the last big one.” It will also make 1998 (or so) the last Hmong New Year celebration for several thousand people whose families have lived in the area for several thousand years, the last chance to find more barking deer or saola, and the last sightings of potentially dozens more rare species of mammals and birds. The irony of it all is that not one kilowatt of theoretical power from Nam Theun II would be harnessed by Laos for Laos. Laos has no additional power needs. A single dam north of Vientiane takes care of the whole country of 4 million.
100% of Nam Theun II power would be exported to Thailand, making Laos an electricity serf to its much larger neighbor which is considered by some to think of it as a territory to the east. Thailand is already milking Laos on lower than market prices for existing dams. I asked Dr. Inthavong what would make the normally suspicious Lao people, who after a day in Laos one becomes quite aware fought and won a war with Thailand over timber poaching in 1987, trust a foreign businessman who comes in and says a dam will be good for the Lao people and economy? This despite a long history of proof of the opposite and the fact that most developed countries, including the United States and Thailand, refuse to build any more large dams on their own territory. Longtime program coordinator in Laos Canadian Ian Baird said, “For years no article about Laos ever failed to categorize it as poor and landlocked. After a while you start to believe it ad will shoot yourself in the foot to change that perception.” Inthavong thought about the question for a moment, and then gave me the universal bureaucratic answer which I have heard many times in covering many stories in many countries: “That’s really not my department.”
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Postscript: Just as I was about to hop on a bus from Thakhek back to Vientiane, Boi cried out and pointed to a Mitsubishi which sped past us on the road. “That’s Kham Pong!” he yelled, referring to the General’s twenty-something son, who had been a school chum of his. I got to realize a lifelong dream of yelling “Follow that car!” to a Tuk Tuk driver, but we couldn’t catch him. During the chase, Boi told me that the General had recently given $750,000 to Kham Pong to start a tree farm in a visible road-side former rice-paddy corridor not too far north of Vientiane. “See, he plants trees, too, not just cuts them down,” Boi, another General Cheng fan, told me.
“Yeah, I’m familiar with that phenomenon,” I told him. “I’ve covered the timber industry of the Pacific Northwest.”