A. Evolution of the Mekong Regime

Institutional co-ordination amongst the lower Mekong states has a long history. In 1957, a Statute established the “Committee for the Co-ordination of Investigations in the Lower Mekong Basin”.Footnote ²² The Statute set out the function of the Committee as being to promote, co-ordinate, supervise, and control the planning and investigation of water resource development projects in the Lower Mekong Basin.Footnote ²³ The Committee was supported by a Secretariat made up of around 100 experts from the Mekong countries, the United Nations (UN), and donor countries.Footnote ²⁴ By 1972, and based on this co-operative arrangement, almost US$70 million had been spent on planning and investigation work in the Mekong, and a further US$150 million on infrastructure projects.Footnote ²⁵

Given this significant activity, the Mekong Committee felt compelled to issue a Joint Declaration of Principles for Utilization of Waters of the Lower Mekong Basin (Joint Declaration) in 1975.Footnote ²⁶ The objectives of the Joint Declaration were, inter alia, “to ensure that conservation, development and control of the water resources of the Basin are directed towards their optimum utilization for the benefit of all the peoples of the Basin States” and “to promote the regional cooperation required for the proper management of the water resources of the Basin”.Footnote ²⁷ In terms of planned projects, Article XVII of the Joint Declaration stipulated that:

Pursuant to Article XVII of the Joint Declaration, developments on the mainstream of the Mekong were therefore subject to prior agreement by all the lower Mekong states. Additionally, in accordance with Articles XX and XXI of the Joint Declaration, inter-basin diversions and projects on “major tributaries” were subject to the same requirement of prior agreement.Footnote ²⁹ However, it could be questioned whether the Joint Declaration reflected a legal commitment amongst the lower Mekong states, given that it was not designed to be ratified by the Member States, but was rather signed by the four members of the Mekong Committee.

Irrespective of the Declaration's legal status, the geopolitical issues that took place in the region from mid 1975 to 1978 meant that its objectives could not be realized. However, with support from the UN Economic and Social Commission for Asia and the Pacific (ESCAP), a Declaration Concerning the Interim Mekong Committee for Coordination of Investigations of the Lower Mekong Basin was signed on 5 January 1978 between Laos, Thailand, and Vietnam.Footnote ³⁰ The 1978 Declaration was less detailed than the 1975 Joint Declaration, the former simply establishing the Interim Committee to promote the development of water resources of the Lower Mekong Basin. The interim nature of this agreement was due to a hope that Cambodia, which while under the rule of the Khmer Rouge was pursuing a “self reliance” policy, would join at a later date.

Further geopolitical turmoil throughout the 1980s meant that the 1978 Interim Committee did not fully get off the ground, and it was not until 1992 that significant co-operation—assisted by UN Development Programme (UNDP)—recommenced. It was agreed at this stage that the lower basin countries (Cambodia, Laos, Thailand, and Vietnam) would negotiate a framework agreement. The upper basin states (China and Myanmar) would then be invited to join at a later date. Thus, in 1995 Cambodia, Laos, Thailand, and Vietnam adopted the Mekong Agreement.Footnote ³¹

B. The Mekong Agreement—Key Provisions

The Mekong Agreement obliges the parties

The Agreement sets out some key substantive obligations, which include, inter alia, the requirements: to utilize the waters of the Mekong River System in a reasonable and equitable manner (Article 5); to protect the environment, natural resources, aquatic life and conditions, and ecological balance of the Mekong River Basin from pollution or other harmful effects resulting from any development plans and uses of water and related resources of the Basin (Article 3); and, to make every effort to avoid, minimize, and mitigate harmful effects that might occur to the environment from the development and use of the Mekong River Basin water resources or discharges of wastes and return flows (Article 7).

An institutional framework, the Mekong River Commission, is also provided for under the Agreement. The MRC is made up of three permanent bodies: the Council, the Joint Committee, and the Secretariat (Article 12). Considerable decision-making power rests with the Council, which is made up of one representative from each state at the Ministerial or Cabinet level. The Joint Committee, comprised of one member from each state at no less than the Head of Department level supports the implementation of Council decisions. In addition, the Secretariat provides technical and administrative assistance to the Council and Joint Committee.

Procedural rules are primarily addressed in Article 5 of the Mekong Agreement. These procedural requirements include notification, prior consultation, and unanimous agreement for planned measures. Pursuant to this Article, notification to the Joint Committee is required for intra-basin uses and inter-basin diversions on the tributaries of the Mekong, and for intra-basin use on the mainstream of the Mekong during the wet season.Footnote ³³ “Notification” is defined in the Agreement as the provision of information concerning the proposed use to the Joint Committee.Footnote ³⁴ Article 5 also obliges states to consult with a view to reaching agreement on inter-basin diversions on the mainstream of the Mekong during the wet season, and intra-basin use during the dry season. “Consultation” is described in the Agreement as not only providing data and information, but also discussing and evaluating the impact of such proposed uses within the Joint Committee. Finally, Article 5 provides that the Joint Committee must agree upon any inter-basin diversion during the wet season.

While the consultation procedure will be discussed in more detail below, three key elements of Article 5 are worthy of note here.

First, the Xayaburi Dam fits squarely within the prior consultation requirements given that it is an intra-basin use during the dry season; and wet season for that matter.

Second, Chapter II of the Mekong Agreement, stipulates that, “prior consultation is neither a right to veto a use nor unilateral right to use water by any riparian without taking into account other riparians’ rights”.Footnote ³⁵ Pursuant to this statement, and in contrast to the 1975 Joint Declaration, absence of a “right to veto” means that the lower Mekong states do not necessarily have to agree prior to the unilateral implementation of a proposed use. However, a planning state is still obliged to take into account the rights of other riparians, e.g. to an equitable and reasonable share in the uses of the Mekong. The prior consultation procedures must therefore seek to strike a delicate balance between the interests of states. The degree to which balance is ensured will be explored in detail below.

Third, there is a clear distinction in Article 5 between tributaries and mainstream developments. This is accentuated by the definition of “proposed use” contained in the Mekong Agreement, which is “any proposal for a definite use of the waters of the Mekong River system by any riparian, excluding domestic and minor use of water not having a significant impact on mainstream flows”.Footnote ³⁶ In other words, proposed uses that have a transboundary impact within a tributary of the Mekong would not fall under the notification and prior consultation requirements of the Mekong Agreement unless “significant impact” on the mainstream of the Mekong could be proven. While the focus of this paper is on the Xayaburi, a mainstream development, this tributary vis-à-vis mainstream distinction raises broader questions over the ability of the Mekong Treaty Regime and its consultation procedures to govern the entire Lower Mekong Basin.Footnote ³⁷

In addition to provisions relating to substantive, procedural, and institutional requirements, the Mekong Agreement also sets out dispute settlement mechanisms. Article 34 stipulates that: “Whenever any difference or dispute may arise between two or more parties to this Agreement regarding any matters covered by this Agreement and/or actions taken by the implementing organization through its various bodies, particularly as to the interpretations of the Agreement and the legal rights of the parties, the Commission shall first make every effort to resolve the issue in [the Joint Committee and Council].”

Failing timely resolution within the Commission, the issue must be “referred to the Governments to take cognisance of the matter for resolution by negotiation through diplomatic channels”.Footnote ³⁸ Article 35 of the Agreement goes on to stipulate that:

The procedure outlined above provides considerable discretion and control on how the parties might resolve a dispute. For instance, third-party intervention would only be permissible where both states to the dispute agree to such intervention.

C. Procedures and Guidelines for Notification, Prior Consultation, and Agreement

In early 2003 the MRC Joint Committee took the decision to establish a technical drafting group to develop the Procedures for Notification, Prior Consultation, and Agreement (PNPCA).Footnote ⁴⁰ The four MRC Council members from each lower Mekong state subsequently approved and signed the PNPCA on 30 November 2003.Footnote ⁴¹ These procedures were designed to complement the procedural aspects of the Mekong Agreement. The PNPCA set out the role and responsibilities of the different actors, and prescribe a particular form and format for notification and prior consultation.

The MRC Joint Committee also developed the Guidelines on the Implementation of the Procedures for Notification, Prior Consultation, and Agreement (PNPCA Guidelines), which were signed by the four members of the MRC Joint Committee on 21 August 2005.Footnote ⁴² A central aim of these Guidelines is to provide an explanation of some of the key terms contained within the Mekong Agreement and the PNPCA.

A question hangs over the legal status of the PNPCA and the PNPCA Guidelines. One issue rests on whether they could be defined as a “Treaty”, and as such legally binding pursuant to international law.Footnote ⁴³ It is questionable whether the states intended these instruments to be “governed by international law”.Footnote ⁴⁴ While the government representatives within the Council and Joint Committee signed both the PNPCA and PNPCA Guidelines, these instruments were not ratified at the national level. As such they may well not meet the definition of a “Treaty” as set out in the Vienna Convention on the Law of Treaties.Footnote ⁴⁵ However, even if the PNPCA and PNPCA Guidelines do not strictly fall within the definition of a “Treaty”, it could be argued that they enjoy a certain degree of influence as an authoritative interpretation of the Mekong Agreement.Footnote ⁴⁶

II. THE XAYABURI HYDROPOWER PROJECT

In 1994 a report commissioned by the MRC identified a cascade of twelve potential run-of-river hydropower projects on the mainstream of the Mekong within the lower Mekong states, which included the Xayaburi Project.Footnote ⁴⁷ Such a cascade of dams would be in addition to the eight projects in the upper reaches of the Mekong River in China; four of which are now in operation.Footnote ⁴⁸ A number of factors, such as the need to reduce greenhouse gas emissions vis-à-vis fossil fuels, and to enhance energy security, have made hydropower increasingly attractive to countries in the Lower Mekong Basin.Footnote ⁴⁹

Within the abovementioned context, the Lao government signed a Memorandum of Understanding (MoU) with a Thai energy company (Ch. Karnchang Public Company Limited) on 4 May 2007 to conduct a survey and study the development of the Xayaburi Hydropower Project.Footnote ⁵⁰ Pursuant to the MoU, the Thai company would be contracted to construct and operate the Xayaburi Project over a period of thirty years under a Build-Operate-Transfer concession agreement.

The Xayaburi Project is primarily designed for hydropower generation, with eight turbine-generator units producing a collective total of 1,285 megawatts. It is envisaged that over ninety-five percent of this planned power generation will be exported to Thailand. The main components of the Project include: the dam itself (820 m long and 32.6 m high), the spillway for excess river flow, sluices for the bypassing of suspended sediment, navigation locks, and fish bypass facilities.Footnote ⁵¹ It is envisaged by the developers that the construction of the dam will take around eight years and three months, and cost around US$3.5 billion.Footnote ⁵²

An Environmental Impact Assessment (EIA) and Social Impact Assessment (SIA) for the Xayaburi Project were conducted by TEAM Consulting Engineering and Management Company Limited, a Thai consultancy firm, between September 2007 and April 2008.

Then, on 20 September 2010, the Lao National Mekong Committee submitted prior consultation documents on the Xayaburi Dam to the MRC Secretariat. After some checks and clarifications, the documents were forwarded to the MRC Joint Committee members on 22 October 2010.

A number of groups were established to support the prior consultation process. An MRC PNPCA Joint Committee Working Group, comprising up to four representatives from each country, was set up to oversee the entire process. In addition, the MRC Secretariat established a PNPCA Task Group, which was a co-operative mechanism amongst MRC divisions, programmes, and projects (Integrated Water Resources Management, Planning, Information Knowledge Management, Fisheries, Environment, Sustainable Hydropower, and Navigation).Footnote ⁵³ Two expert groups on fisheries and sediments, which were populated by international and regional experts, further supported the PNPCA Task Group.Footnote ⁵⁴

The first meeting of the PNPCA Working Group took place on 26 October 2010, and a key output was an agreed Road Map on Prior Consultation for the Proposed Xayaburi Project.Footnote ⁵⁵ In addition, the Working Group discussed the role of the MRC Secretariat and agreed to include stakeholder consultations in the process. Around the same time, the MRC Secretariat, through its Task Group and expert groups, commenced their technical review of the prior consultation documents for the Xayaburi Project.

A second meeting of the MRC Joint Committee Working Group took place on 29−30 November 2010. This second meeting provided an opportunity to review progress to date on the technical studies, agree the next steps, and conduct a site visit to the dam's location. In parallel, the technical studies undertaken by the MRC Secretariat continued, and public consultations on the Xayaburi Project were organized in Cambodia, Thailand, and Vietnam.Footnote ⁵⁶

A summary of the public consultations, and a draft review report by the MRC Secretariat, were then presented at a third meeting of the PNPCA Working Group on 14 February 2011.

On 24 March 2011, the MRC Secretariat submitted its Prior Consultation Review Report that was designed to “inform the Member Countries and ultimately the Joint Committee discussion about the potential trans-boundary impacts, risks and consequences of the proposed Xayaburi dam project”.Footnote ⁵⁷ Additionally, formal replies to the prior consultation were submitted by Cambodia, Thailand, and Vietnam—all three governments raised concerns over the Project and called for further investigation.Footnote ⁵⁸

A special session of the Joint Committee was then convened on 19 April 2011 to review the report by the MRC Secretariat and discuss the next steps.Footnote ⁵⁹ At that meeting, the four members could not agree on whether the prior consultation process had been finalized.Footnote ⁶⁰ Cambodia, Thailand, and Vietnam raised concerns over: gaps in the technical knowledge and studies regarding the Project; the predicted impact on the environment and livelihoods of the basin's population; and, the need for wider consultations.Footnote ⁶¹ Laos was of the opinion that any concerns would be accommodated and there was no need to extend beyond the six-month period set out in the PNPCA.Footnote ⁶² It was therefore agreed that “a decision on the prior consultation process for the proposed Xayaburi hydropower project be tabled for consideration at the ministerial level”.Footnote ⁶³

However, an agreement was then signed between the Lao government and Pöyry Energy AG, an international engineering and consulting group, on 5 May 2011 to assess, inter alia, whether the Xayaburi Project had complied with: the MRC's relevant design guidelines; the comments submitted by the MRC countries during the PNPCA process; and the concerns contained in the MRC Secretariat's Prior Consultation Project Review report.Footnote ⁶⁴ The Pöyry Report was finalized on 9 August 2011 and concluded that:

The Report went on to stipulate that, subject to a number of investigations and alterations, in the opinion of the consulting company, Laos was in compliance with its commitments under the Mekong Agreement.Footnote ⁶⁶

Subsequently, the Vietnam National Mekong Committee forwarded the Pöyry Report to the MRC Secretariat on 26 October 2011 with a request that the Secretariat comment on the Report's conclusions and recommendations.Footnote ⁶⁷ Having reviewed the Pöyry Report, the MRC Secretariat was of the opinion that the proposed design adaptations and suggested further investigations contained therein would go a long way to improve the compliance of the Xayaburi Dam with the MRC preliminary design guidance, and address concerns of the Member States. However, the MRC Secretariat was also of the opinion that specific concerns remained.Footnote ⁶⁸ In particular, the MRC Secretariat expressed concern that the substantial investigations, monitoring, and modelling proposed by Pöyry would take place during the construction phrase of the dam rather than prior to the construction.Footnote ⁶⁹ The MRC Secretariat's report goes on to suggest that “conducting specific investigations before (rather than in parallel with) dam construction will reduce risks, including those of transboundary and cumulative impacts, and avoid ‘regret measures’—actions that may ultimately be inappropriate and lead to expensive and/or irreversible unintended negative impacts”.Footnote ⁷⁰

The MRC Council, which includes Laos, supported the findings of the MRC Secretariat's report, thus noting in December 2011 that there was a need to further study the sustainable development and management of the Mekong River, including impacts from mainstream hydropower development projects.Footnote ⁷¹

However, disagreements between Laos and the lower riparians resurfaced. In April 2012, following reports that construction at Xayaburi had continued, Sin Niny, permanent Vice-Chairman of Cambodia's National Mekong Committee, was reported as stating that “there must be a discussion before Laos can proceed with the construction. If Laos decided unilaterally, then according to law, we can file a complaint to an international court.”Footnote ⁷² Similarly, in an official statement, Cambodia's Minister of Water Resources, Lim Kean Hor, urged Laos to halt the dam construction while a further environmental impact study was carried out.Footnote ⁷³

Then on 16−17 July 2012, the Laos government invited relevant embassies, funding agencies, and development partners to the Xayaburi Dam site to hear how the project had been modified to address the concerns raised during the PNPCA process. Separate visits by the Cambodian and Vietnamese governments to the Xayaburi Dam site were conducted in October 2012, along with a presentation by Pöyry on the planned redesign.Footnote ⁷⁴

However, it would appear that issues surrounding the Xayaburi Project lingered. While the countries did not specifically address Xayaburi at its 19th MRC Council meeting in January 2013, a joint development partner statement raised concern “about the social impacts and environmental risks associated with the construction of the Xayaburi hydropower dam”.Footnote ⁷⁵ The statement goes on to comment that, “… given that alterations to the initial design have not yet been fully communicated through the auspices of the MRC. We strongly encourage the Lao Government to share the revised design plans for the Xayaburi project with the MRC Secretariat as soon as possible.”Footnote ⁷⁶

Given the abovementioned events, it appears that the states of the lower Mekong are faced with a situation in which, despite having invoked the formal prior consultation process under the 1995 Mekong Agreement, significant disagreements remain. It could be argued that where there are major unilateral development projects on international watercourses, disagreements amongst upstream and downstream states are inevitable, and often irreconcilable.Footnote ⁷⁷ However, there is also a need to ask, in the light of Xayaburi, whether the formal prior consultation process could be improved in order to, at the very least, reduce the level of disagreement and tension amongst the lower Mekong states and other interested stakeholders.

A. “Timely” Notification

One of the first issues raised by the Xayaburi PNPCA process concerns the question of the timing of notification. The Mekong Agreement provides that such notification should be “timely” in order to “allow the other member riparians to discuss and evaluate the impact of the proposed use upon their uses of water and any other affects [sic]”.Footnote ⁸⁰ The Guidelines to the PNPCA go further by suggesting that:

The PNPCA Guidelines also elaborate on the timing of notification by suggesting that:

An examination of the text of the Mekong Agreement, alongside the PNPCA and Guidelines, shows that there is considerable discretion afforded to the planning state in deciding when to notify. No specific date or event is used to trigger the notification process. Instead it is up to the states to decide what is “timely”, or what might be considered as “far in advance”. Given the discretionary nature of this obligation, it would not be surprising to see the planning state adopting a different view on the timing of notification to that of the potentially affected states.

However, it should also be appreciated that adopting a more precise legal condition is not a straightforward task. In this regard, the Permanent Court of Arbitration (PCA)—when faced with a case between India and Pakistan concerning a run-of-the-river Hydropower Project on the Indus—were wary of:

The difficulty in finding precise terminology can also be witnessed in the work of the ILC leading to the adoption of the Watercourses Convention. When developing the ILC's Draft Articles on the topic, various proposals on the timing of notification were put forward. Special Rapporteur Evensen suggested that notification should occur “at the earliest possible date”, which was later changed by Special Rapporteur McCaffrey to “timely”.Footnote ⁸⁴ McCaffrey went on to define “timely” as “sufficiently early in the preliminary planning stages to permit meaningful consultation and negotiation, if these are necessary”.Footnote ⁸⁵ Ultimately, and consistent with the Mekong Agreement, the word “timely” was kept in the final text of the Watercourses Convention, which stipulates that, “before a watercourse State implements or permits the implementation of planned measures … it shall provide … timely notification thereof”.Footnote ⁸⁶

While the approach adopted by the Mekong Agreement would therefore appear to be in line with other international legal instruments, a question that remains is whether greater precision could be accommodated. During the negotiation of the Watercourses Convention, concerns over the ambiguity of the term “timely” were raised by some country delegations.Footnote ⁸⁷ As an alternative, Finland suggested that the notifying state should notify “as early as possible, and no later than when informing their own public”.Footnote ⁸⁸ In making this proposal, the Finnish delegation sought to align the Watercourses Convention with the UN Economic Commission for Europe Convention on Environmental Impact Assessment in a Transboundary Context (Espoo Convention).Footnote ⁸⁹ The Guidelines to the Espoo Convention stipulate that:

Within the lower Mekong context, all four countries have developed national EIA legislation that requires public participation in the EIA process.Footnote ⁹¹ Such developments at the national level, since the adoption of the Mekong Agreement, offer important opportunities to harmonize national commitments at the regional (lower Mekong) level. Along similar lines as the Espoo Convention, a requirement could therefore be introduced at the regional level to notify potentially affected states of a planned measure with potential transboundary impacts at the same time as stakeholders within the country where the project is planned.

Support for such an approach can be found in the Pulp Mills case between Argentina and Uruguay, which was decided by the International Court of Justice (ICJ) in 2010.Footnote ⁹² In deciding the case, the ICJ made a distinction between two requirements contained in a bilateral treaty between Argentina and Uruguay: namely the initial requirement to inform the bilateral Commission established by the treaty of a planned measure so that the Commission could “on a preliminary basis” decide whether a planned use might cause significant damage to the other party;Footnote ⁹³ and the second requirement for the party planning the measure to notify the other party of the plan, if the Commission decides that the plan might cause significant damage to the other party.Footnote ⁹⁴ The ICJ held that the initial requirement to inform should be satisfied, “at the stage when the relevant authority has had the project referred to it with the aim of obtaining initial environmental authorization and before the granting of that authorization”.Footnote ⁹⁵ In addition, the ICJ observed that “the information provided will not necessarily consist of a full assessment of the environmental impact of the project, which will often require further time and resources”.Footnote ⁹⁶ With regard to the obligation to notify, the ICJ went on to stipulate that notification is intended to enable the notified party to participate in the assessment process. Notification, according to the Court, must therefore “take place before the State concerned decides on the environmental viability of the plan, taking due account of the environmental impact assessment submitted to it”.Footnote ⁹⁷

This recent decision of the ICJ therefore places emphasis on the EIA process when assessing the appropriate timing for notification, and, in that regard, supports trends in the development of national EIA legislation. Both the national laws of the lower Mekong states and the ICJ's decision recognize the importance of engaging with potentially affected stakeholders (even if they are in different countries) prior to finalizing an EIA or authorizing a particular project. Based on these developments, it could therefore be argued that a better approach within the case of the Xayaburi Project would have been to require Laos to notify downstream states at the same time as the feasibility study, EIA, and SIA were being conducted; and certainly prior to their completion in April 2008. While Laos could rely on the ambiguity within the text of the Mekong Agreement to maintain that its notification was still “timely”, early notification would have potentially allowed the states more time to consult over the potential impacts of the project. Such an approach might have benefited Laos, because starting the prior consultation process at an early stage could lead to an earlier conclusion to the process. The potentially affected states might have also benefited from being more fully engaged in the planning process, rather than intervening when plans were quite well established. Early engagement might in turn increase opportunities for identifying options for developing the project in a way that minimized the impacts downstream, while still meeting the needs of the upstream state.

B. “Available” and “Relevant” Data and Information

A key issue over which there was a significant difference of opinion between the lower Mekong states in the case of Xayaburi related to the collection and exchange of data and information.

During the Xayaburi prior consultation process a considerable amount of data and information was made available. The states had access to the original feasibility report for the Xayaburi Project, as well as the EIA and SIA, and a completed PNPCA “Form for Prior Consultation”Footnote ⁹⁸. Through the MRC, states also had available to them: the Basin Development Strategy (including the basin development scenario assessments and sector assessments), which was approved by the MRC Council on 26 January 2011;Footnote ⁹⁹ the Strategic Environmental Assessment of Hydropower on the Mekong Mainstream of 15 October 2010;Footnote ¹⁰⁰ the Preliminary Design Guidance for Proposed Mainstream Dams in the Lower Mekong Basin of 2009;Footnote ¹⁰¹ and various other guidance documents produced by the MRC.Footnote ¹⁰² The lower Mekong states also benefited from MRC Secretariat's Prior Consultation Project Review Report for the Xayaburi Project.Footnote ¹⁰³ The Review Report presented the findings of the various expert groups established by the MRC Secretariat to evaluate the Xayaburi Project.Footnote ¹⁰⁴

Another important area where shared information was generated was through the stakeholder consultations organized in Cambodia, Laos, and Vietnam.Footnote ¹⁰⁵ Two types of meeting were conducted: first, community-based meetings focused at the local level and involving community groups likely to be affected by the Xayaburi Project; and second, national consultation meetings with a wider range of stakeholders.

While there was therefore a significant amount of data and information that the states could rely upon when evaluating the potential impacts of the Xayaburi Project, some gaps and concerns remained. For instance, Cambodia called for additional information relating to the transboundary environmental impacts and cumulative impacts of the project, and asked for the identification of strategic actions to mitigate or minimize any negative impacts.Footnote ¹⁰⁶ Thailand questioned whether the original EIA and SIA were sufficient, and suggested that baseline data on existing uses should be provided, as well as an analysis of the likely impacts of Xayaburi on the tributaries of the Mekong. Vietnam noted their belief that during the consultation process Laos had provided “the best level of information they have”.Footnote ¹⁰⁷ However, Vietnam was concerned that the EIA for the Xayaburi Project was inadequate, particularly with regard to the “comprehensive assessments of the trans-boundary and cumulative impacts”.Footnote ¹⁰⁸ Vietnam also remained unconvinced—based on the information available—that the mitigation measures proposed (fish ladders, sand flushing outlets, and navigation locks) would be effective.Footnote ¹⁰⁹

The MRC Secretariat's Prior Consultation Project Review Report additionally identified a number of “areas of uncertainty on which further information is needed”.Footnote ¹¹⁰ Such areas included the impacts from changing flow patterns, particularly on fish migration during the construction and operation of Xayaburi; an estimate of potential loss of fisheries due to the project, and further detail on the proposed measures to mitigate such losses; and an examination of possible measures to compensate existing users for any potential losses. In addition, the Sediment Expert Group reached the conclusion that the project design was not consistent with the MRC's Preliminary Design Guidance on Proposed Mainstream Dams or international best practice for sediment management. The original design would result in sediments settling along the length of the 100 km-long reservoir, which in turn would reduce the capacity of the reservoir by approximately sixty percent in thirty years. Therefore, according to the Sediment Expert Group, there was a need to implement additional sediment mitigation measures. In terms of water quality and aquatic ecosystem health, the MRC Secretariat's review found that the Xayaburi Project plans did not reflect the MRCs Preliminary Design Guidance on Proposed Mainstream Dams or international best practice. Consequently, the review stressed the need for an integrated monitoring regime, including the establishment of a baseline, by which to monitor water quality and aquatic ecosystem health.

The stakeholders participating in the various workshops identified additional concerns linked to the impacts of the dams, and requested more information on a number of issues, including the need for detailed studies on the impact of agricultural productivity and other social impacts, and cumulative impact assessment, and the participation of other stakeholders in the feasibility and planning phase, as well he construction and operation of the dams; and more information on technical design features such as fish ladders, sand flushing outlets, and navigation locks, as well as their proven feasibility.Footnote ¹¹¹

The concerns expressed by the Cambodian, Thai, and Vietnamese governments, the stakeholders, and the MRC Secretariat, as well as the requests for further information and assessments, suggest that there was significant divergence in expectations over what data and information should be furnished by the planning state. The Mekong Agreement itself obliges states to share “data and information … that would allow the other member riparians to discuss and evaluate the impact of the proposed use upon their uses of water and any other affects [sic]”.Footnote ¹¹² However, this provision begs the question as to what data and information would be necessary to satisfy this requirement. As illustrated in the Xayaburi case, the considerable margin for discretion contained in this provision would allow for varying interpretations over what data and information should actually be shared.

Additional guidance is provided for in the PNPCA, which requires certain data and information in a prescribed form, as well as available data and information, such as a feasibility study summary and initial environmental evaluation.Footnote ¹¹³ While also not clearly addressing the requisite content of any data and information to be shared, the PNPCA Guidelines do comment that:

Demands for additional data and information are also covered by the PNPCA, which stipulates that:

The PNPCA also provides that, “during the evaluation process period, the notifying State(s) shall provide, if requested, available data and information and facilitate an appropriate evaluation”.Footnote ¹¹⁶

Based on a reading of the Agreement and associated instruments, the precise content of the data and information required is therefore open to a wide range of interpretation. Moreover, it is difficult to determine precisely how additional requests for data and information will be handled. While the PNPCA suggest that such requests should be accommodated “if necessary”, the notifying and notified states may have very different ideas of necessity.

Unfortunately, little guidance can be sought from the Watercourses Convention. The Convention simply requires a notifying state to provide “available technical data and information, including the results of any environmental impact assessment, in order to enable the notified State to evaluate the possible effects of the planned measures”.Footnote ¹¹⁷ When commenting on the requirement to share data and information, Schwebel stressed the need for states to be “in communication with one another, particularly at the technical level of project and programme data and information”.Footnote ¹¹⁸ Further commentary was provided on the meaning of “available”, which McCaffrey suggested to mean that “the notifying State is generally not required to do additional research at the request of the potentially affected State, but must provide only such relevant data and information as have been developed in relation to the proposed use and are readily accessible”.Footnote ¹¹⁹ McCaffrey suggests that where data or information is not readily available, but is accessible only to the notifying state, “it would generally be appropriate for the former to offer to indemnify the latter for expenses incurred in producing the requested material”.Footnote ¹²⁰ The Watercourses Convention accordingly obliges the notifying state to co-operate with the notified states to provide them, on request, “with any additional data and information that is available and necessary for an accurate evaluation”.Footnote ¹²¹

Another integral aspect of the Watercourses Convention is the reference to EIA, which should be shared “where available”. Presented in this way, it could be maintained that the Watercourses Convention does not oblige a state to conduct an EIA, but simply requires the notifying state to share an EIA report if one exists. However, this obligation should be considered alongside more general due diligence requirements contained within the Watercourses Convention. For instance, Article 7 of the Watercourses Convention requires states to “take all appropriate measures to prevent causing of significant harm to other watercourses States”.Footnote ¹²² Based on recent developments in both international and national environmental law, it could be maintained that conducting an EIA is an “appropriate” measure to take when planning large infrastructure projects.Footnote ¹²³ Such an interpretation was recently endorsed by the ICJ in the Pulp Mills case, where the Court claimed that general international law imposed a requirement upon states to conduct a transboundary EIA where a planned activity may have a significant adverse impact, especially in relation to shared resources.Footnote ¹²⁴ However, in the Pulp Mills case, the ICJ was reluctant to enunciate what components an EIA might require.Footnote ¹²⁵

An alternative, and potentially preferable, approach can be seen in the UNECE Espoo Convention, which not only requires the notifying state to notify potentially affected states, but also prescribes the content of a transboundary EIA.Footnote ¹²⁶ According to the process set out in the Espoo Convention, the EIA must include: (a) a description of the proposed activity and its purpose; (b) a description, where appropriate, of reasonable alternatives (for example, locational or technological) to the proposed activity and also the no-action alternative; (c) a description of the environment likely to be significantly affected by the proposed activity and its alternatives; (d) a description of the potential environmental impact of the proposed activity and its alternatives, and an estimation of its significance; (e) a description of mitigation measures to keep adverse environmental impact to a minimum; (f) an explicit indication of predictive methods and underlying assumptions as well as the relevant environmental data used; (g) an identification of gaps in knowledge and uncertainties encountered in compiling the required information; (h) where appropriate, an outline for monitoring and management programmes, and any plans for post-project analysis; and (i) a non-technical summary including a visual presentation as appropriate (maps, graphs, etc.).Footnote ¹²⁷

In the light of the difficulties faced by states in the case of the Xayaburi prior consultation process, there would be considerable merit in prescribing more specific guidance on the content of EIAs pertaining to large-scale hydropower projects in the Mekong. The EIA process could therefore play a stronger role not only in relation to issues around the timing of notification, but also in relation to the data and information that should be shared between states. As noted in the previous section, any developments at the regional (lower Mekong level) could also take advantage of, and harmonize, developments in national legislation.Footnote ¹²⁸

C. The Prior Consultation Period

An issue closely associated with the appropriate data and information that should be shared between the states was the question of how long the consultation process should take. At the Third Meeting of the Joint Working Group, Laos took the position that they “see no reason for any extension of time”, beyond the six-month period prescribed.Footnote ¹²⁹ Conversely, the other lower Mekong states called for an extension. Cambodia maintained that “the six month period for PC is not enough to cover many efforts such as [sic] comprehensive study on relevant project documents, comprehensive consultation both for national and regional levels, [sic] technically study on project relevant documents and technical preparation by MRCS PNPCA Task Group, preparation of the three meetings of Joint Committee Working Group (JCSG) on PNPCA and of the national public consultation meetings, and consolidation of the findings for MRC JC conclusion”.Footnote ¹³⁰ Similarly, Vietnam argued that “the limited timeframe … was not adequate to facilitate the achievement of the process's objective”.Footnote ¹³¹ Thailand also proposed an extension to the six-month period for prior consultation.Footnote ¹³²

Unfortunately, the Mekong Agreement is silent on the time period required for prior consultation. However, the PNPCA provided some guidance by setting out two main requirements. First, the PNPCA stipulates that “the timeframe for Prior Consultation shall be six months from the date of receiving documents on Prior Consultation”; and second that “if necessary, an extended period shall be permitted by the decision of the MRC Joint Committee”.Footnote ¹³³ As noted previously, the PNPCA Guidelines further comment that the PNPCA allows “at least 6 months prior to the commencement of project implementation, preferably greater, acknowledging that the MRC Secretariat requests up to one month in advance of intended implementation”.Footnote ¹³⁴ In addition, it is suggested in the Guidelines that, “in effect, a prior consultation submission should be at a minimum be [sic] at least 6 months before intended commencement of project implementation”, and that “in actual practice, it is likely that projects for proposed water uses falling within the ‘prior consultation’ category would be submitted far in advance of the intended start-up date because they are long-term large scale projects requiring considerable technical, economic, social, and impact analyses”.Footnote ¹³⁵

The treatment of the time period for prior consultation in the Mekong Agreement, PNPCA, and Guidelines therefore shows another area where the flexibility contained within the agreement has allowed states with differing interests to interpret the provisions in a way that best suits their position. The experience of the Xayaburi Project raises two key questions in this regard: first, what should be the appropriate time period for consultation?; and second, how should states go about agreeing precise timings?

In regard to the latter issue, the PNPCA simply states that “if necessary” an extended period shall be permitted by a decision of the MRC Joint Committee. This begs the question of what constitutes a “necessary” condition for extension, and who ultimately makes the decision. As this provision currently stands, and based on the institutional arrangements set out in the Mekong Agreement, it is up to the members of the Joint Committee to decide, based on unanimity.Footnote ¹³⁶ Unfortunately, as the case of the Xayaburi Project demonstrates, reaching unanimity may not always be possible. Should an alternative mechanism therefore be in place to decide on the need for extension? Perhaps the MRC Secretariat or an independent third party could play a stronger role? Without such a mechanism, it is difficult to envisage a scenario where the state proposing the particular planned measure will be willing to go beyond the default six-month period set out in the PNPCA. Moreover, it could be argued that—as demonstrated in the case of Xayaburi—the six-month period is a woefully inadequate timeframe for evaluating the type of large-scale infrastructure projects that have been proposed on the mainstream and tributaries of the Mekong.

Some guidance on appropriate timings can be derived from the ILC. The appropriate timeframe for consultations was something that raised considerable debate during the work of the ILC on the law of the non-navigational uses of international watercourses. Schwebel first proposed a period of “not less than six months” unless the states were able to agree otherwise.Footnote ¹³⁷ In justifying a six-month period, Schwebel maintained that “a certain period is called for and justified in this procedural rule in order to avoid disputes over what is a ‘reasonable’ time”.Footnote ¹³⁸ McCaffrey sought to add further clarity by requiring states to “negotiate in good faith with a view to agreeing upon such a period, taking into consideration all relevant factors, including the urgency of the need for the new use and the difficulty of evaluating its potential effects”.Footnote ¹³⁹ This good faith standard did not satisfy some states which were concerned about its lack of clarity, which they feared would, in turn, result in projects being delayed or even blocked.Footnote ¹⁴⁰ An attempt to provide greater clarity was therefore introduced through the condition that a notified state be given “six months within which to study and evaluate the possible effects of planned measures and to communicate the findings of it”.Footnote ¹⁴¹ However, provision was also made for an additional six months, where the notified state could “cite the ‘special difficulty’ which requires extension”.Footnote ¹⁴² There was also a parallel condition that a notified state should communicate its findings to the notifying state “as early as possible” within the six-month period or extension thereof.Footnote ¹⁴³ The Watercourses Convention therefore appears to be less restrictive than the PNPCA by almost automatically allowing for an extension to the initial six-month period, for a further six months. To some extent, abuse of this extension is safeguarded by the need to justify the extension and to report findings back “as early as possible”. Given the “special difficulty” faced by the lower Mekong states in assessing the transboundary impacts (singular and cumulative) of hydropower projects, and identifying optimal solutions, serious consideration should be given to revisiting the restrictive six-month condition currently contained in the PNPCA.

Within the specific context of the Xayaburi prior consultation process, it could be asked whether an extension to that process might have been more advantageous to all the lower Mekong states. In this regard, it is important to note that the unilateral termination of the prior consultation process by Laos did not constitute the end of communications between the lower Mekong states. Shortly after the end of the formal consultation process, Laos commissioned the Pyöry Report to assess whether their plans were in compliance with the MRC Agreement and associated guidelines, as well as addressing the concerns expressed by Cambodia, Thailand, and Vietnam in their formal reply to prior consultation. The Pyöry Report, upon the request of the Vietnamese National Mekong Committee, was forwarded to the MRC Secretariat for review.Footnote ¹⁴⁴ Various informal exchanges arose between the states during 2012, and while Xayaburi was not specifically discussed during the 19th MRC Council meeting in January 2013, Cambodia, Thailand, and Vietnam, as well as the development partners, raised concerns regarding the project in their official statements.Footnote ¹⁴⁵ During these various exchanges, Laos claimed that they had taken into account the concerns of the other states and had redesigned the Xayaburi Project. However, without a formal consultation process it was difficult for Cambodia, Thailand, and Vietnam to fully assess whether their concerns had been adequately addressed. In addition, a group of non-governmental organizations from across the Mekong Region, as well as Finland and Switzerland, launched a case against Pyöry based on its advice to Laos concerning the Xayaburi Project.Footnote ¹⁴⁶ The resulting compliant was submitted to the Finnish National Contact Point for the OECD Guidelines for Multinational Enterprises and a decision is currently pending.Footnote ¹⁴⁷

Given these activities, it could be asked whether termination of the prior consultation process was counterproductive for all states concerned, including Laos. If the MRC Joint Committee had unanimously agreed to extend the process, a more constructive and transparent dialogue could have been progressed. All lower Mekong states could have discussed the proposals for the redesign of the Xayaburi Project openly and collectively, with technical assistance being provided by the MRC Secretariat. Such an approach may have resulted in less tension between the states, much of which could be attributed to uncertainty. Additionally, by continuing the process inside the MRC governance framework, less expectation would have been placed on the Pyöry Report, as the MRC Secretariat could have performed a similar function. This would mean that the political and financial resources employed by various interests groups that challenged the Pyöry Report and Laos's actions might have been spent identifying mutually agreeable solutions; and the OECD complaint could have been avoided.

D. Suspension of the Project During the Consultation Process

On 17 April 2011, just over one month after Laos initiated the prior consultation process, the Bangkok Post reported that construction work on the Xayaburi Dam had already commenced.Footnote ¹⁴⁸ Investigators from the newspaper claimed that workers from Ch. Karnchang were clearing and upgrading roads.Footnote ¹⁴⁹ In response to these claims, Laos's Vice Minister of Energy and Mines claimed that “while there of course is a risk that the project will not proceed, the road upgrading was a significant benefit to the residents of the area and that is in line with the local authorities’ policy to improve the livelihood of their people”.Footnote ¹⁵⁰ Earlier, in February 2011, at the 3rd Joint Committee Working Group on PNPCA, the Laos delegation claimed that “no construction of the project which may impact the Mekong River will be carried out unless and until the PNPCA process has been completed”.Footnote ¹⁵¹

Following the consultation process, a “ground-breaking” ceremony was conducted on the 6 November 2012, which was attended by ambassadors from the Lower Mekong Basin States.Footnote ¹⁵² Laos's Deputy Minister of Mines claimed that “the ceremony will mark the beginning of work in the river bed, with construction on access roads and facilities already under way”.Footnote ¹⁵³ By March 2013 it was claimed that construction of the dam was around ten percent complete, and the coffer dam, used to divert the river while the permanent dam is built is, will be completed by May 2014.Footnote ¹⁵⁴

Two key matters are raised by the events set out above. First, there is the question of whether Laos is entitled to proceed with the preparatory activities, e.g. upgrading roads and ground clearing, during the consultation process. Second, it could be asked whether Laos can proceed with construction following the prior consultation process, despite there being a lack of agreement with the other lower Mekong states. The latter question will be dealt with in the next section, while the former question will be addressed here.

The Mekong Agreement itself provides no guidance on whether Laos is entitled to carry out preparatory works, except what can be inferred from the use of the terms “prior consultation”, and “proposed uses”. It could be interpreted from the ordinary meaning of these terms that such consultations should take place before a project is implemented. More explicit provision is provided for in the PNPCA, where it is stated that the planning state, “shall not implement the proposed use without providing the opportunity of [sic] the other member States to discuss and evaluate the proposed use”.Footnote ¹⁵⁵ This position is supported by the PNPCA Guidelines, which suggest that projects for “proposed uses” should be submitted for “prior consultation … far in advance of the intended start-up date”.Footnote ¹⁵⁶ The use of the term “start-up” would tend to imply the commencement of the project as a whole, including any preparatory works, but this is not made clear in the Mekong Agreement and related texts.

This requirement not to initiate the proposed use during any consultation period would appear to be consistent with the approach adopted by the ILC and the Watercourses Convention. In earlier work leading to the adoption of the Convention, Schwebel proposed that during the period for replying to notification, the project “may not be initiated without the consent of the other system State”.Footnote ¹⁵⁷ In justifying such a condition, the ILC suggested that it would be impossible for a notifying state to determine whether its planned measure was equitable without allowing a notified state the opportunity to evaluate the possible effects of that planned measure.Footnote ¹⁵⁸ The “duty not to proceed” was therefore justified on the basis of the need to “maintain a state of affairs characterized by the expression ‘equitable utilization’”.Footnote ¹⁵⁹ Ultimately, this “duty not to proceed” condition was retained in the final text which stipulated that, during the period of reply to notification, the notifying state “shall not implement or permit the implementation of the planned measures without the consent of the notified States”.Footnote ¹⁶⁰

However, while both the Watercourses Convention and the Mekong Agreement would provide for an obligation not to proceed with the project until the prior consultation period has been completed, a question still remains over what might be considered to fall within the scope of a particular project.

Recent case-law of the ICJ and PCA suggests that there is no clear position on this issue. In the Pulp Mills case, the ICJ held that any activities by the notifying state during the period of consultation must be prohibited. The ICJ justified its position on that basis that “it would be contrary to the object and purpose of the 1975 Statute to embark on disputed activities before having applied the procedures laid down by the ‘joint machinery necessary for the optimum and rational utilization of the [r]iver’”.Footnote ¹⁶¹ The Court then went on to suggest that “the preliminary work on the pulp mills on sites approved by Uruguay alone does not constitute an exception. This work does in fact form an integral part of the construction of the planned mills”.Footnote ¹⁶² Following the ICJ's line of argument it could therefore be claimed that any activities in support of the project, including localized preparatory works, may undermine efforts by the states to negotiate a mutually acceptable solution in good faith.

The approach of the Court did not, however, meet with unanimous approval. In his separate opinion, for instance, Judge Greenwood adopted a different stance. He stated that:

In its previous case-law, the ICJ has supported this “own risk” approach. For example, in the Gabcˆíkovo-Nagymaros case, Hungary unilaterally suspended a joint project with Czechoslovakia in 1989. Czechoslovakia then informed Hungary of its intention to adopt unilateral measures.Footnote ¹⁶⁴ While Hungary made repeated requests to suspend the unilateral measures, known as “Variant C”, Czechoslovakia refused.Footnote ¹⁶⁵ Consultations between the parties continued while Variant C was put into operation from October 1992. When considering this unilateral action, the ICJ observed that between November 1991 and October 1992, Czechoslovakia “confined itself to the execution, on its own territory, of the works which were necessary for the implementation of Variant C, but which could have been abandoned if an agreement had been reached between the parties”.Footnote ¹⁶⁶ The Court went on to state that:

This “own risk” approach with regard to activities that would not in themselves affect the rights of other states was also recently supported by the PCA in the Kishengenga case between India and Pakistan.Footnote ¹⁶⁸ In this case, the PCA took the position that the suspension of many of the key components of construction activity on the Kishenganga Hydropower Project (KHEP), such as the boring of tunnels and the construction of the power house, “does not appear to be ‘necessary’ to safeguard its ability to render an effect Award”.Footnote ¹⁶⁹ The Court therefore stated that:

However, the Court took a different stance on the building of the actual dam on the Kishenganga/Neelum River, thus noting that:

The PCA therefore took the decision that India could continue to implement the majority of the KHEP except for the dam itself, given that it was the implementation of the latter that would potentially impinge upon the rights of Pakistan.

While the events that the PCA decided upon in the Kishenganga case took place following the consultation process, it is still possible to extrapolate some important insights from the decision. Ultimately, the PCA sought to strike a balance between international law and national sovereignty, and the Court was reluctant to judge on activities that, in their opinion, remained exclusively within the national domain. While there is much merit in this position, such an approach must be reconciled with the need to ensure a process whereby states consult in good faith to find an optimal solution, especially during a period of consultation, as opposed to third-party adjudication or arbitration. If such consultations take place at the same time as the notifying state is forging ahead with a particular plan, such a process may be undermined by a lack of trust. Suspension of the entire project, including preparatory works, might therefore strengthen the likelihood of identifying and agreeing on a solution that all states would be willing to adhere to.Footnote ¹⁷² At the very least, what is needed in the Mekong is clear guidance on what activities would be incorporated within the notion of a “proposed use”. Such clarity would go a long way to protecting against political tensions that may arise due to national activities associated with a planned project—such as those witnessed during the Xayaburi consultation process.

E. Post-consultation Procedures

As noted previously, during the special session of the MRC Joint Committee on 19 April 2011, the lower Mekong states could not agree on whether the prior consultation had been completed. Given that there is no explicit provision in the Mekong Agreement, PNPCA, or the Guidelines on what happens if the parties disagree over whether or not the prior consultation process has been concluded, the only recourse that the states have is to the more general provision on joint decision-making and dispute settlement contained in the Mekong Agreement, which ultimately requires unanimity.

The approach adopted by the parties to the Mekong Agreement might be contrasted with the approach adopted by the Watercourses Convention. The ILC's commentary to the 1994 Draft Articles on the Law of Non-navigational Uses of International Watercourses suggests that if the parties are unable to reach agreement through consultation, “the notifying State may proceed with implementation of its plans, subject always to its obligations under articles 5 and 7”.Footnote ¹⁷³ While the notifying state may therefore have a right to proceed with the planned measure after the consultation period, if there is still no agreement between the parties it is likely that the dispute settlement mechanisms under Article 33 of the Watercourses Convention will be triggered. Article 33(2) of the Watercourses Convention provides that:

Article 33(3) then goes on to provide that “if after six months from the time of the request for negotiations” the states have not been able to settle their dispute, the dispute shall be submitted to impartial fact-finding by request of any party to the dispute.Footnote ¹⁷⁵ Although not explicitly stated, it could be maintained that impartial fact-finding may be triggered immediately after the six-month period for consultation under Article 17(3) of the Convention. Once established, the fact-finding commission will investigate the dispute, set forth its findings and reasons therefore, and make any recommendations that it deems appropriate.Footnote ¹⁷⁶ It is then left to the states to consider, in “good faith”, whether to accept the recommendations of the commission. Alternatively, or in addition, states party to the Watercourses Convention may decide to submit their dispute to the ICJ or arbitration.Footnote ¹⁷⁷ Various options are available in this regard. Upon ratifying, accepting, approving, or acceding to the Convention, a party may declare that it recognizes as compulsory ipso facto and without special agreement submission of a dispute to the ICJ or arbitration.Footnote ¹⁷⁸ Moreover, if one or both parties did not accept the compulsory ipso facto jurisdiction of the ICJ or arbitration, the parties may agree to submit the particular dispute to the ICJ or arbitration. Once submitted to the ICJ or arbitration, provisional measures may be awarded to prevent the implementation of planned measures prior to any decision.

A question for the Mekong Agreement might be whether there should be more detailed procedures to determine what happens if the states disagree over a particular planned measure, and whether third-party fact-finding might be an appropriate means by which to reconcile any differences in an equitable manner. It should, however, be added that, ideally, with an effective process by which to share sufficient data and information on a particular planned measure, and potentially adjust a particular project in a way that reconciles competing interests, the use of such dispute settlement measures will be avoided, or at least seen as a last resort.