[Senate Hearing 111-710]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-710
 
           CHALLENGES TO WATER AND SECURITY IN SOUTHEAST ASIA

=======================================================================

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON EAST ASIAN 
                          AND PACIFIC AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 23, 2010

                               __________

       Printed for the use of the Committee on Foreign Relations


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                COMMITTEE ON FOREIGN RELATIONS         

             JOHN F. KERRY, Massachusetts, Chairman        
CHRISTOPHER J. DODD, Connecticut     RICHARD G. LUGAR, Indiana
RUSSELL D. FEINGOLD, Wisconsin       BOB CORKER, Tennessee
BARBARA BOXER, California            JOHNNY ISAKSON, Georgia
ROBERT MENENDEZ, New Jersey          JAMES E. RISCH, Idaho
BENJAMIN L. CARDIN, Maryland         JIM DeMINT, South Carolina
ROBERT P. CASEY, Jr., Pennsylvania   JOHN BARRASSO, Wyoming
JIM WEBB, Virginia                   ROGER F. WICKER, Mississippi
JEANNE SHAHEEN, New Hampshire        JAMES M. INHOFE, Oklahoma
EDWARD E. KAUFMAN, Delaware
KIRSTEN E. GILLIBRAND, New York
                  David McKean, Staff Director        
        Kenneth A. Myers, Jr., Republican Staff Director        

                         ------------          

         SUBCOMMITTEE ON EAST ASIAN AND PACIFIC AFFAIRS        

                  JIM WEBB, Virginia Chairman        

CHRISTOPHER J. DODD, Connecticut     JAMES M. INHOFE, Oklahoma
RUSSELL D. FEINGOLD, Wisconsin       JOHNNY ISAKSON, Georgia
BARBARA BOXER, California            JOHN BARRASSO, Wyoming
ROBERT P. CASEY, Jr., Pennsylvania   ROGER F. WICKER, Mississippi
KIRSTEN E. GILLIBRAND, New York

                              (ii)        

  
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                            C O N T E N T S

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                                                                   Page

Chungyalpa, Dekila, director for the Greater Mekong Program, 
  World Wildlife Fund, Washington, DC............................    35
    Prepared statement...........................................    38
Cronin, Dr. Richard, senior associate, Stimson Center, 
  Washington, DC.................................................    16
    Prepared statement...........................................    19
Imhof, Aviva, campaigns director, International Rivers, Berkeley, 
  CA.............................................................    25
    Prepared statement...........................................    29
Webb, Hon. Jim, U.S. Senator from Virginia, opening statement....     1
Yun, Joseph, Deputy Assistant Secretary, Bureau of East Asian and 
  Pacific Affairs, Department of State, Washington, DC...........     4
    Prepared statement...........................................     7

                                 (iii)

  


           CHALLENGES TO WATER AND SECURITY IN SOUTHEAST ASIA

                              ----------                              


                      THURSDAY, SEPTEMBER 23, 2010

                               U.S. Senate,
    Subcommittee on East Asian and Pacific Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:28 p.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Jim Webb 
(chairman of the subcommittee) presiding.
    Present: Senator Webb.

              OPENING STATEMENT OF HON. JIM WEBB,
                   U.S. SENATOR FROM VIRGINIA

    Senator Webb. Good afternoon. The hearing will come to 
order.
    And let me begin by apologizing for the delay in the start 
of the hearing. We had a series of votes, the last one having 
just been called, about 2:20. So, we will move with some 
dispatch here to hear the witnesses and have the dialogue that 
the hearing is anticipated to bring.
    Today's hearing will explore the critical intersection of 
the environment, foreign policy, and security in Southeast 
Asia, a nexus that occurs along the Mekong River. Often called 
``the mother of all rivers,'' the Mekong originates on the 
Tibetan Plateau, flows nearly 3,000 miles down through Burma, 
Thailand, Laos, Cambodia, and Vietnam before emptying through 
the Mekong Delta into the South China Sea. It is the world's 
12th longest river and the center of a nearly 500,000-square-
mile watershed across the region.
    The Lower Mekong River, in mainland Southeast Asia, is a 
source of water, food, and economic opportunity for more than 
60 million people. In this area, freshwater fisheries provide 
at least $2 billion, and up to $9 billion, annually in income, 
and approximately 80 percent of the animal protein consumed by 
the population.
    Given the vital role of the river in this region, 
scientists, environmentalists, and policymakers have great 
concerns that current designs to construct hydropower dams 
along the Mekong may disrupt the region's balance. This hearing 
will examine the risks of this development, the environmental, 
economic, sovereignty, and security challenges these dams pose 
for the Mekong River, the challenge of managing transboundary 
water resources through multilateral cooperation, and the role 
that the United States can play in promoting this approach.
    Currently, China plans to construct more than 15 dams on 
the main stem of the Upper Mekong River, in Tibet and Yunnan 
provinces. In Yunnan, Chinese authorities are planning a 
cascade of eight large-to-mega-size dams, four of which have 
been completed. The largest of these four, the Xiaowan Dam, is 
the world's highest compound concrete arch dam, taller than the 
Hoover Dam. Its reservoir will hold 15 billion cubic meters of 
water. For comparison, the Three Gorges Dam in China holds 20 
billion cubic meters of water.
    Future dams in the Yunnan cascade will have even larger 
reservoirs, enabling China to regulate the waterflow to suit 
its needs. For their part, Laos, Thailand, Cambodia, and 
Vietnam are planning to construct or finance the construction 
of up to 13 dams on the lower half of the river's main stem. 
Compared to China's Xiaowan Dam, most of these dams will be a 
quarter of the size, in terms of height and hydroelectric 
capacity.
    Additional dams have been planned or constructed along the 
Mekong's tributaries. These dams are intended to generate 
electricity in support of growing regional energy demand. Some 
of the electricity will even be exported, particularly from 
Laos, which has voiced its goal to become the battery of 
Southeast Asia.
    These dams may also be used to store water, increase 
irrigation, and contribute to flood control. However, these 
dams will also affect the river's waterflow, its fish 
population, and wildlife. Low environmental standards, and weak 
enforcement of those standards, may allow these dams to bring 
catastrophic damage to the river's ecosystem. Moreover, the 
uncoordinated construction of these dams may threaten the 
entire region's stability if, as projected, food production 
decreases and countries begin to compete for access to water.
    The economic benefits derived from electricity production 
could be short-lived in this case if tensions over access to 
transboundary water resources flash into greater political 
instability.
    Over the past year, I've traveled to all of the countries 
in mainland Southeast Asia. And during these visits, as well as 
here at home, I've examined water-use practices and plans for 
the river's development. I've engaged numerous American and 
regional diplomats, policymakers, environmental engineers, and 
academics, all of whom convey the importance of the Mekong 
River to Southeast Asia's economic sustainability and to its 
human security.
    In particular, the Tonle Sap Lake in Cambodia, the largest 
body of freshwater in Southeast Asia, plays a critical role in 
the region's food production system. During the wet season, 
when the Mekong's water levels are highest, water flows from 
the river into the lake, filling it up. When water levels drop 
with the dry season, water flows reverse and the lake empties 
back into the river. Nowhere else in the world is the flow 
reversal or river pulse so large.
    The region's fish species and migration patterns depend 
upon this river pulse, with fish migrating upriver as far as 
Yunnan province in China. The volume of fish migration in the 
Mekong is estimated to be 100 times larger than the volume of 
fish migration in the Pacific Northwest.
    Annual floods also naturally restore soil nutrients and 
purge pollutants, facilitating agricultural productivity. 
Consequently, Thailand and Vietnam have become the world's 
leading exporters of rice.
    The Tonle Sap River pulse, the extent of fish migration, 
and the flow of sediments into the delta are all at risk from 
the unchecked construction of hydropower dams along the Mekong 
River mainstream.
    With mounting evidence, experts estimate that existing and 
planned hydropower dams may block the migration of 70 percent 
of the most commercially important fish. Decreasing water 
flows, particularly in the dry season, may contribute to 
saltwater intrusion into the Mekong Delta and threaten 
freshwater rice production.
    In June, I traveled to the delta, to Can Tho, in Vietnam, 
where environmental scientists reported that, over the past 20 
years, seawater has crept 20 kilometers further up into the 
Delta. They expect that this intrusion will worsen as upstream 
hydropower dams further restrict waterflow.
    Given the severity of these risks and their transboundary 
consequences, it's vital to consider ways to address water 
resources management and the development of hydropower dams 
through multilateral cooperation. The Mekong River Commission, 
established in 1995 by Thailand, Laos, Cambodia, and Vietnam, 
is one regional organization attempting this approach.
    In August 2009, I met with the Mekong River Commission in 
Laos and observed the valuable role that it plays in collecting 
data on the river, forecasting the impact of hydropower 
development, and catalyzing a regional approach to water 
management.
    I'm concerned, however, that the effectiveness of this 
organization is limited by two major factors. First is the lack 
of membership by two Upper Mekong countries, China and Burma. 
In fact, China is one of the few countries in the world that 
does not recognize riparian water rights of downstream nations. 
Yet, it is the gatekeeper for the Mekong River and all of the 
water that flows downstream from the Tibetan Plateau.
    Without China's meaningful participation in regional river 
management and consideration of downstream nations, the Lower 
Mekong countries are vulnerable to China's control over water 
flows. This concern should include China's potential ability to 
hold back the river at its source.
    Second, the commission lacks the power to prevent 
environmental and economic harms that may occur when parties 
fail to account for regional impacts in the development of 
hydropower. It also lacks the power to hold nations liable for 
environmental or economic damage resulting from these 
developments.
    Southeast Asia is in need of a methodology, either 
political or economic, or both, that can raise environmental 
standards, mitigate the negative impacts of water use and 
development, and ultimately hold countries responsible for 
their actions.
    With U.S. participation, the Asian Development Bank's 
financing of infrastructure projects presents one opportunity 
to influence regional environmental practices. The ADB is the 
only regional organization to which all Mekong countries 
belong. And it has played a significant role in funding the 
development of hydropower and electricity transmission systems 
throughout the region.
    Presently, this committee is developing legislation to 
authorize the U.S. capital contribution to the Asian 
Development Bank. This bill also provides an opportunity to 
revisit the role that the ADB plays in Southeast Asia, 
particularly in financing infrastructure projects and in 
improving environmental standards. To this end, I've been 
working, with input from several organizations, including the 
World Wildlife Fund, the Nature Conservancy, International 
Rivers, and the Stimson Center, to develop language that would 
raise the environmental standards for hydropower dam or 
electricity transmission projects financed by the ADB.
    This language, if adopted, would instruct the U.S. 
executive director at the Bank to vote against financing a 
project if the Treasury decides not to certify to Congress that 
the process adheres to internationally recognized environmental 
standards, and that it protects the rights of individuals 
affected by the project, and reflects a multilateral approach 
to development along the Mekong River.
    I've shared the language under consideration with our 
nongovernment witnesses, and I would be interested in hearing 
any thoughts that they might have on that, and any other policy 
suggestions, as the hearing goes forward today. And I will look 
forward to working with Chairman Kerry and the committee to 
include some form of this language in the ADB authorization.
    United States attention to the health and well-being of the 
Mekong River in Southeast Asia can be a vital factor in 
facilitating a positive multilateral solution to the risks 
facing the region. Additionally, we can encourage other 
countries to adopt long-term approaches toward developing the 
Mekong River that would balance each nation's economic 
development with the protection of the environment and the 
overall security of more than 60 million people.
    I'm pleased to welcome two panels today to help us examine 
the challenges facing Southeast Asia's environment, economy, 
and security, and how the United States can facilitate better 
multilateral management of the Mekong River and the region's 
environment.
    Our first panel, I would like to welcome Deputy Assistant 
Secretary of State Joseph Yun. This is the first occasion that 
Deputy Assistant Secretary Yun has had to appear formally 
before the subcommittee, but we've had several meetings, and I 
have enjoyed, very much, working with Secretary Yun to this 
point.
    And I'd like, again, to congratulate you on your recent 
promotion.
    Previously, Deputy Assistant Secretary Yun served as the 
Director of the Office of Maritime Southeast Asia in the State 
Department. He is a career member of the Senior Foreign Service 
class of minister counselor. His overseas assignments have been 
in South Korea, Thailand, France, Indonesia, and Hong Kong.
    So, welcome, Secretary Yun. And please proceed.

STATEMENT OF JOSEPH YUN, DEPUTY ASSISTANT SECRETARY, BUREAU OF 
     EAST ASIAN AND PACIFIC AFFAIRS, DEPARTMENT OF STATE, 
                         WASHINGTON, DC

    Mr. Yun. Thank you very much, Chairman. And thank you for 
inviting me here today to discuss the importance of the Mekong 
River to the sustainable development and security of the Mekong 
Basin and key aspects of our engagement strategy on these 
issues with the Southeast Asia region.
    With your permission, I would like to make brief remarks 
and submit a longer statement for the record.
    Senator Webb. Your longer statement will be entered into 
the record at this time. And please proceed with any other 
comments you'd like to make.
    Mr. Yun. In her remarks on World Water Day this year, 
Secretary Clinton stated that, ``Water represents one of the 
great diplomatic and development opportunities of our time.'' 
By 2025, nearly two-thirds of the world population will be 
living under water-stressed conditions. Water scarcity and poor 
water quality will increase disease risks, undermine economic 
growth, limit food production, and become an increasing threat 
to peace and security.
    The Lower Mekong region of Cambodia, Laos, Thailand, and 
Vietnam is one of Asia's most vulnerable areas to the impacts 
of climate change because of large numbers of people living in 
flood plains and low-lying coastal areas and because the people 
and economies of the region depend strongly on agriculture and 
ecosystem services. The region's extraordinary biodiversity is 
also at risk from human activities and both the direct and 
indirect impacts of climate change.
    The Mekong is one of the most complex river systems in the 
world. It is the longest river in Southeast Asia, stretching 
over 2,700 miles, through six countries, nearly twice the 
length of the Colorado. Its watershed supports millions of 
people, providing over $2 billion in revenue from wild 
fisheries alone.
    Within the lower basin are ecologically unique features 
that play crucial roles in regulating the flows of the Mekong. 
The Tonle Sap Lake, Cambodia's most important fishery, and, 
below that, the wide reach of the Vietnam Delta, which produces 
about 52 percent of Vietnam's rice and most of its aquaculture, 
fish, and shrimp exports.
    The people of the Mekong River Basin depend heavily on the 
river. Irrigated agriculture and fishing engage 85 percent of 
the workforce within the basin. And for most farmers, the river 
is critical to their survival.
    Poverty is still an enormous challenge in the region, and 
those who are dependent on the natural base of the Mekong are, 
of course, the first to suffer from any environmental damages 
and changes.
    It is also important to note that the region holds great 
capacity for growth and economic opportunity. For example, 
United States exports to Vietnam have tripled in the last 3 
years, with two-way trade reaching nearly $16 billion in 2009. 
And the region has proved to be very resilient during the 
recent economic downturn.
    Economic growth results in growing energy needs, and the 
countries of the Mekong are increasingly turning to hydropower 
as a solution. Construction of dams on the Mekong River, 
however, may pose immediate and long-term threats to the food 
security and livelihood of the millions of people in the Lower 
Mekong Basin.
    The impetus behind the Mekong dam projects is the creation 
of a regional electrical grid which will facilitate the 
development of the Mekong Basin. In the future, the Mekong and 
its tributaries could support an elaborate interlocking 
electric power generation, supplying Laos, northern Thailand, 
parts of Cambodia, and much of Yunnan province in China. The 
economic stakes for dam construction are high, and the states 
of the Mekong Basin are eager for developmental benefits they 
can obtain.
    On the upper stem of the Mekong, China's eight-dam cascade 
in Yunnan province, four of which are completed, will most 
certainly disrupt some of the river's natural function, as well 
as give China some degree of control over the timing and amount 
of water flows. During the dry season, the flows from China 
account for 40 percent of water supply in the Mekong system. 
During the wet months, the share is about 16 percent.
    In the Lower Mekong, hydropower development plans have been 
plagued by weak oversight of required environmental and social 
impact assessments. The greatest downstream ecological impact 
of regional infrastructure development will be felt at 
Cambodia's Tonle Sap Great Lake and Vietnam's Mekong River 
Delta.
    Upstream mainstem dams may degrade the Tonle Sap, affecting 
fish migration and population. The Mekong Delta of Vietnam may 
also suffer major consequences, including the loss of vital 
silt replenishment, resulting in increased saltwater intrusion 
and decreased rice production.
    The Mekong River system is already beginning to show signs 
of strain brought about by its multiple competing uses. 
Although much attention is focused on the impact of future 
dams, immediate environmental threats also exist through 
overuse and pollution from industry, wastewater, and 
agriculture. Effectively managing transboundary water is an 
enormous challenge, particularly for the regions--for the 
nations in the region with different levels of economic 
development and past animosities.
    Facing these difficulties, the Mekong River Commission has 
provided a framework for addressing transboundary water 
resources in the region. It has steered regional and watershed 
development since 1995, emphasizing avenues for cooperation, 
strategic planning, and continued dialogue. Although not a 
regulatory agency, the Mekong River Commission builds knowledge 
and technical capacity for member states of Cambodia, Laos, 
Thailand, and Vietnam through providing assistance and 
recommendations.
    These problems are not easy, but cooperative solutions are 
possible. While the United States has a long history of 
engagement with the countries of Southeast Asia on a bilateral 
basis, there is an increasing awareness of the growing number 
of issues that transcend national boundaries. The countries of 
the Lower Mekong region share a variety of common interests and 
concerns. With those concerns in mind, Secretary Clinton 
launched the Lower Mekong Initiative in 2009 to help facilitate 
regional cooperation on the issues of environment, education, 
health, and infrastructure. This initiative seeks to coordinate 
effective responses to challenges, that are inherently regional 
in nature, through working-level visits, training workshops, 
conferences, and scientific and technological exchanges.
    In concert with other technical agencies of the U.S. 
Government, USAID, and the State Department are making 
significant investments in order to further improve our 
regional programming. USAID programs incorporate U.S. expertise 
into a regional plan to address some of the key water and 
development challenges these countries face. They also foster 
cooperation among the countries in the region to work together 
for a common purpose. U.S. leadership and increased attention 
may have had an impact on other regional players. Recently, 
China agreed to share more of its operational data with the 
Mekong River Commission and has allowed the visit by the 
Commission officials to China's Yunnan province to look at two 
of its four dams. Japan has also increased its involvement in 
the region, pledging $5 billion in assistance at the Japan 
Mekong summit in October 2009.
    The administration recognizes the critical need to work 
closely with the countries in Southeast Asia to foster the 
rational use and sustainable development of the river resources 
before lasting environmental harm has been done and before the 
security of the region is jeopardized by improper planning on 
this important waterway. We hope to advance cooperation and 
expertise by continuing to expand the Lower Mekong Initiative 
by developing technical assistance programs mobilizing a whole-
of-government approach. We are encouraged by the progress that 
has been achieved in such a short time and, with our Mekong 
partners, are pursuing activities that can bring the greatest 
gain for the region.
    Thank you for giving me this opportunity to testify today. 
And I'm very happy to answer any questions you may have.
    [The prepared statement of Mr. Yun follows:]

Prepared Statement of Joseph Yun, Deputy Assistant Secretary, Bureau of 
  East Asian and Pacific Affairs, Department of State, Washington, DC

    Chairman Webb and members of the subcommittee, thank you for 
inviting me here today to discuss the importance of the Mekong River to 
the sustainable development and security of the Mekong Basin and key 
aspects of our engagement strategy on these issues with the Southeast 
Asia region.
               the global water and sanitation challenge
    In her March 22, 2010, World Water Day Speech, Secretary Clinton 
stated that ``water represents one of the great diplomatic and 
development opportunities of our time.'' She noted that, ``It's not 
every day you find an issue where effective diplomacy and development 
will allow you to save millions of lives, feed the hungry, empower 
women, advance our national security interests, protect the 
environment, and demonstrate to billions of people that the United 
States cares, cares about you and your welfare. Water is that issue.''
    By 2025, nearly two-thirds of the world's population will be living 
under water-stressed conditions, including roughly 1.8 billion people 
who will face absolute water scarcity (a level that threatens economic 
development as well as human health and well-being). Water scarcity and 
poor water quality will increase disease risks, undermine economic 
growth, limit food production, and become an increasing threat to peace 
and security.
    More than 260 watersheds worldwide are shared by two or more 
countries. As water becomes scarce, tensions over shared resources are 
likely to rise--both within countries and among countries. Promoting 
joint management and using water to build trust and cooperation in 
conflict-prone regions are important tools in reducing the risks of 
future conflicts.
    The effects of climate change will only exacerbate these 
challenges. Perhaps the most profound effects of climate change will be 
the shrinking of glaciers and rivers. Water availability will change as 
will the likelihood of extreme floods and droughts. These extreme 
events can affect more people than all other natural disasters 
combined.
    The Greater Mekong subregion is one of Asia's areas most vulnerable 
to the impacts of climate change because of the large numbers of people 
living in floodplains and low-lying coastal areas and because the 
people and economies of the region depend strongly on agriculture and 
ecosystem services. The region's extraordinary biodiversity is also at 
risk from both the direct and indirect impacts of climate change.
    As we know from our own experiences with the wetlands and marshes 
of large river systems such as the Mississippi, the management of these 
systems can have far-ranging societal and ecological impacts. 
Sustainable river management in the face of climate change is of great 
concern to us, as well as for those living in large watersheds around 
the world.
    To help strengthen U.S. engagement in Southeast Asia, Secretary 
Clinton announced the Lower Mekong Initiative (LMI) in July 2009 on the 
margins of the ASEAN Post-Ministerial Meeting. The LMI aims to engage 
Cambodia, Laos, Thailand, and Vietnam by helping build regional 
capacity in the areas of environment, health, education, and 
infrastructure in order to facilitate multilateral cooperation among 
the four countries on issues of mutual concern, such as the common 
challenge of effective water resource management
    Also in response to this challenge, Secretary Clinton has asked 
Under Secretary for Global Affairs Maria Otero and U.S. Agency for 
International Development Administrator, Rajiv Shah, to identify 
specific steps we can take to strengthen the United States capacity to 
respond to watershed management and climate change. We are also 
establishing a joint steering group under the leadership of Bureau of 
Oceans, Environment, and Science Assistant Secretary Kerri-Ann Jones.

                  THE COMPLEXITY OF THE MEKONG SYSTEM

    Hydrologically, the Mekong River is one of the most complex river 
systems in the world. It is the longest river in Southeast Asia, 
stretching 2,703 miles through six countries, nearly twice the length 
of the Colorado River. Its watershed supports between 65 and 80 million 
people, providing over $2 billion in revenue from wild fisheries alone.
    The large flows of the Mekong--nearly as large as those of the 
Mississippi--vary widely according to available precipitation. The 
basin has a wet season and a dry season. During the wet season, only 
about 16 percent of the flows come from China. During the dry season 
months, this share rises to 40 percent. Due to the complexity and 
extent of the Mekong system, drought and flood events rarely affect the 
entire reach equally.
    Within the Lower Basin are ecologically unique features that play 
crucial roles in regulating the flows of the Mekong: the Tonle Sap 
Lake, Cambodia's most important fishery, and, below that, the wide 
reach of the Delta, which produces about 52 percent of Vietnam's rice 
and most of its aquaculture fish and shrimp exports.
    Located in the Cambodian floodplain, the Tonle Sap Lake is filled 
by the monsoon rains. When it overflows, it can temporarily reverse the 
flow of the Mekong. The surge in water storage in the lake is enormous, 
increasing from 1-2 million acrefeet in the dry season, to 40-60 
million acre-feet in the wet season, enough to cover the State of New 
Jersey in 10 feet of water.
    The injection of nutrient-rich sediments also creates one of the 
world's most productive ecosystems and the world's largest freshwater 
fishery. Through this natural action of seasonal storage, the Tonle Sap 
Lake regulates the flows of the Mekong, moderates flood events, 
provides crucial flows during dry months, and prevents the incursion of 
seawater within the Delta.
    The Mekong Delta supports about half of Vietnam's total production 
of rice and provides food security for its population. Vietnam is one 
of the world's richest agricultural regions, the second-largest 
exporter of rice worldwide, and the world's seventh-largest consumer of 
rice. The Mekong River and its tributaries are crucial to rice 
production in Vietnam. A total of 12 provinces constitute the Mekong 
Delta, containing 17 million people, 80 percent of whom are engaged in 
rice cultivation. According to the United Nations Development Program 
in Vietnam and Vietnam's Ministry of Agriculture and Rural Development, 
the rice industry is under serious threat due to the 2010 heat wave, 
climate change, and upstream Mekong River development.

                STRONG RIPARIAN DEPENDENCE ON THE MEKONG

    The inhabitants of the Mekong River Basin depend heavily on the 
river. Irrigated agriculture and fishing engage 85 percent of the 
workforce within the Basin, and for most farmers the river is critical 
to their survival. Many farmers rely on fishing to supplement their 
incomes and provide nourishment. In every Mekong country fish are the 
most important source of animal protein; for many, the principal source 
of protein in their diet. Poverty still challenges the region, and 
those who are heavily dependent on the natural resource of the Mekong 
are the first to suffer from any environmental changes.
    It is important to note that, while the region is still home to 
over 20 million people living in poverty, it also holds great capacity 
for growth and economic opportunity. For example, U.S. exports to 
Vietnam have tripled in the last 3 years, with two-way trade reaching 
nearly $16 billion in 2009. Regional economic growth in 2009 was 6 
percent; proving the region's economy to be very resilient during the 
recent economic downturn.

                            HYDROPOWER PLANS

    One result of increased development is that the countries of the 
Mekong Basin are increasingly turning to hydropower as a solution to 
their growing energy needs. Construction of dams on the Mekong River 
may pose immediate and long-term threats to the food security and 
livelihoods of tens of millions of people in the Lower Mekong Basin. 
However, awareness of these threats is rising rapidly due to the 
confluence of an extended drought this year and a concerted push by 
interested parties, including the United States through the Lower 
Mekong Initiative, to highlight the possible adverse affects of dam 
construction.
    The impetus behind the Mekong dam projects is the creation of a 
regional electrical grid that will facilitate the development of the 
Mekong Basin. In the future, the Mekong and its tributaries could 
support an elaborate, interlocking electric power generation grid 
supplying Laos, northern Thailand, parts of Cambodia, and much of 
Yunnan province in China. The economic stakes for dam construction are 
high, and the states of the Mekong Basin are eager for the 
developmental benefits they can obtain.
    All dams have an impact on the flow and natural ecology of rivers 
and streams, but in certain cases the developmental and environmental 
tradeoffs in terms of electric power and navigation can be justified. 
In the case of the 11 mainstream dams planned by Cambodia, Laos, and 
Thailand on the lower half of the river, disruption of the food 
security of 60 million people who depend on the river could be among 
the serious consequences resulting from damming the Mekong River. A 
single misplaced dam on the lower Mekong could block the path of 
migratory fish species that supply up to 80 percent of animal protein 
in the local diet. A reduction in freshwater flows caused by poorly 
designed dams could also increase the salinity of the river water, thus 
adversely affecting the rice crop.
    The ambitious plans for investment in infrastructure should be 
grounded in a comprehensive analysis of where these investments would 
provide the highest return and what their hydrological impact would be. 
In the Lower Mekong region there is generally little analysis of soil 
and water quality, or other constraints to food production, when river 
modification is being considered. Often hydropower development plans 
have been plagued by weak oversight of required environmental and 
social impact assessments.
    On the upper stem of the Mekong, China's eight-dam cascade in 
Yunnan province, four of which are completed, will certainly disrupt 
some of the river's natural functions as well as give China some degree 
of control over the timing and amount of river flows. But the greatest 
downstream ecological impact may be caused by downstream infrastructure 
development and would be felt in Cambodia's Tonle Sap Great Lake and 
Vietnam's Mekong River Delta. Mainstem dams, including two planned by 
Cambodia itself, may degrade the Tonle Sap, and the Delta may also 
suffer major consequences due to the loss of vital silt replenishment.
    Hydropower remains a valuable energy resource, so long as the cost-
benefit tradeoffs are fully understood and responsibly addressed. Many 
development projects must weigh the tradeoffs between the opportunities 
presented by new economic infrastructure--such as roads, bridges, and 
dams--and the full impacts to ecology and local livelihoods. The sale 
of electricity generated by dams provides a source of foreign revenue 
for countries with few existing alternative options for economic 
growth, but this may be unsustainable and comes with potentially 
significant environmental and social costs.

                          SYSTEM UNDER STRESS

    The Mekong River system is already beginning to show signs of 
strain brought about by multiple competing uses. Although much 
attention has focused on the impact of future dams, more immediate 
environmental threats exist through overuse and pollution from 
industry, wastewater, and agriculture.
    Maintaining water quality in the Mekong is key to sustaining the 
health and productivity of the populations dependent on it. High 
salinity levels are prevalent in the Delta, mostly during the dry 
months as diminished flows of the Mekong are unable to push back 
against seawater incursions. Moreover, agricultural runoff, municipal 
wastewater, industrial effluent, and sulphate-rich soils have resulted 
in elevated levels of acidity and eutrophication of the Lower Mekong 
watershed.
    The Lower Mekong countries have recently started to address the 
issue of water pollution, but the region is plagued by lagging 
enforcement and monitoring. Upstream sources of water pollution, as 
well as domestic wastewater continue to degrade the health of the 
river. Certain municipalities, for example, discharge the majority of 
their untreated sewage directly into the river.
    While the state of the Mekong environmental system is threatened by 
existing pollution and future development, the few completed monitoring 
studies have found that the effect of pollution on Mekong fisheries has 
been limited thus far. While the current impact of development along 
the Mekong is also limited, future threats to fisheries, water quality, 
and human health are most likely to come from human interference in the 
form of dams, increased transportation, additional habitat destruction 
from land-use changes, and continued water pollution.
    The State Department has provided some small grants to a network of 
universities in the region to study the levels of pollution in the 
river. This effort has enhanced collaboration among research 
institutions within the four nations in the Mekong Basin. More studies 
are needed to fully understand development's effects on the Mekong's 
fragile biodiversity and to strengthen nascent research partnerships.
    Beyond the impact of human activities in the watershed affecting 
the Mekong River Basin, climate change will undoubtedly add to the list 
of challenges. Changing rainfall patterns, glacial melting, and greater 
hydrological variability may increase the likelihood of floods and 
droughts. Given an average elevation of around five feet, sea-level 
rise poses a grave threat to the Vietnam Delta.

                   LOCAL POLITICS AND WATER POLITICS

    Shared water issues among the Mekong countries are managed through 
a series of overlapping legal and institutional arrangements, such as 
navigation agreements. Effectively managing transboundary water is a 
significant challenge, particularly for riparian nations with different 
levels of economic development and past animosities. Facing these 
difficulties, the Mekong River Commission has steered regional 
watershed development since 1995, emphasizing avenues for cooperation, 
strategic planning, and continued dialogue.
    Under the 1995 Mekong Agreement signed by the Governments of 
Cambodia, Laos, Thailand, and Vietnam, the Mekong River Commission 
(MRC) has provided a framework for addressing transboundary water 
resources in the region. Its structure has allowed for needed 
flexibility and resiliency as hydrologic and economic realities shift. 
Major foreign donors to the MRC include Germany, Australia, Sweden, and 
Denmark.
    Since 1995, the MRC has widened its scope. While remaining a forum 
for cooperative discussions, it has moved from large-scale basin 
planning to include small-scale resource development and the 
establishment of a knowledge base in lower basin hydrology. Although 
not a regulatory agency, the Mekong River Commission builds knowledge 
and technical capacity for member states through providing assistance 
and recommendations.
    In the future, the MRC will be forced to address difficult issues 
of water allocation and basin management. Hydropower development and 
analysis of water flows during the dry season must be discussed to 
craft adequate cooperative solutions. Responses to floods or droughts 
require strengthened communication between riparian countries. These 
problems are not easy, but cooperative solutions are possible.
    In response to these challenges, Secretary Clinton launched the 
Lower Mekong Initiative (LMI) in 2009 to help address regional issues, 
with a particular focus on the environment, health, education, and 
infrastructure. The LMI seeks to facilitate effective, coordinated 
responses to challenges that are inherently regional in nature through 
working level visits, training workshops, conferences, and scientific 
and technological exchanges.
    U.S. leadership and increased attention on the LMI has had an 
impact on how other regional players view these issues. Recently, China 
agreed to share more of its operational data with the Mekong River 
Commission and has allowed a visit by Mekong River Commission officials 
to China's Yunnan province to look at two of the four dams. Japan has 
also increased its involvement in the region, pledging $5 billion in 
assistance at the Japan-Mekong summit last October.

       U.S. POLICY REGARDING TRANSBOUNDARY WATER SECURITY ISSUES

    The unfortunate reality is that there will always be disputes over 
water. Our involvement includes emphasis on building solutions that 
consider the environment and climate change, health, education, 
infrastructure, and economic growth. Through our support of 
multinational solutions, we hope to foster an environment that will 
preempt instability and minimize the potential for violent conflict. In 
analyzing the potential for conflict, we look at factors that are 
driving tensions, as well as factors that can defuse tensions.
    In the Mekong region we see only a few factors with the potential 
to contribute to conflict. Those factors are unilateral development of 
upstream infrastructure, bilateral development of downstream 
infrastructure, changing environmental conditions, and historical 
tensions in relations between Mekong countries. These instigating 
factors are to a large extent countered by some important mitigating 
factors. First, the Mekong countries recognize that they need to act in 
concert in the stewardship of the Basin. The Asian Development Bank 
(ADB) and other donors are helping to foster this collaboration. In 
addition, the MRC is a regional institution which has recently made 
significant strides and includes representation and support from each 
of the Basin countries. While much needs to be done to ensure the 
institution can effectively advance sound water resources management 
across the Basin, it provides a solid foundation for regional 
assessment, planning, and discussion. In our view, the MRC's existence 
greatly minimizes the likelihood of violent conflict among the Mekong 
states.
    While the United States has a long history of engagement with the 
countries of Southeast Asia on a bilateral basis, there is an 
increasing awareness of the growing number of issues that transcend 
national boundaries. The countries of the Lower Mekong region share a 
variety of common concerns, including transboundary water management, 
infectious diseases, and vulnerability to climate change. Our Lower 
Mekong Initiative seeks to support a common regional understanding of 
these issues and to facilitate an effective, coordinated response.
    In order to build regional capacity and cooperation, the State 
Department is working with other U.S. Government partners to develop 
innovative programs under the auspices of the LMI. ``Forecast Mekong,'' 
a computerized decisionmaking tool the U.S. Geological Survey is 
developing with State Department support, will provide policymakers in 
the Mekong countries with the information they need to make good 
decisions on managing the Mekong waterways, including predicted effects 
of hydropower dams on water flow. This information will be made 
available on the Internet so that scientists and researchers, based in 
the region and around the world, can also access the data and the 
analysis capability. Also created under the auspices of the LMI is a 
``sister-river partnership'' between the Mekong River Commission and 
the Mississippi River Commission that will help to build the capacity 
of the Mekong River Commission and to support its efforts to 
incorporate water-related concerns into regional decisionmaking.
    USAID is also working to strengthen the capacity of the Lower 
Mekong countries to assess the environmental impacts of hydropower 
development at both the project and basin levels. Through the Asia 
Development Bank (ADB) and Greater Mekong Sub-Region Initiative, USAID 
will support partnerships between the countries to conduct Strategic 
Environmental Assessments for hydropower projects. In addition, USAID, 
in partnership with ADB, MRC, and the Worldwide Fund for Nature, has 
developed a sustainable hydropower development assessment tool, which 
will soon be piloted in various sub-basins within the watershed.
    The United States has an important role to play here. We can inform 
regional policy and decisionmaking, build local capacity, and promote 
sustainable development by sharing advanced science and technology 
capabilities. Our goal in this area is not to determine the outcome of 
these discussions, but to give policymakers the tools they need to make 
informed decisions about development of the river.
    Finally, in concert with other technical agencies of the U.S. 
Government, USAID, and the State Department are making significant 
investments in the health, environment, and education sectors. In 
addition to existing bilateral activities, we are further developing 
our regional programming as well. I would like to highlight the 
Secretary's announcement of $3 million from USAID for the study of 
climate change impacts on the Mekong Basin. Let me share a rough sketch 
of what we hope to accomplish with this money.
    USAID will support the development of a regional adaptation 
strategy across the Lower Mekong. It will engage local institutions and 
conduct studies to assess vulnerabilities of the ecosystem as well as 
hold dialogues with a variety of stakeholders to gain support for a 
regional approach. Further into the program, we look to implement pilot 
projects and build platforms for sharing of information. Through an 
integrated and regional approach we will be able to build local and 
national government capacity for long-term planning founded on sound 
science and advanced technology.
    These programs incorporate U.S. expertise into a regional plan to 
address some of the key water and development challenges these 
countries face. They also foster cooperation among the countries in the 
region to work together for a common purpose.

    Conclusion

    The administration recognizes the critical need to work closely 
with the countries in Southeast Asia to foster the rational use and 
sustainable development of Mekong River resources before irreparable 
environmental harm has been done and before the security of the region 
is jeopardized by improper planning and exploitation of this important 
waterway. Mekong countries, including to some extent China, have 
realized the importance of united action by establishing the Mekong 
River Commission. We hope to advance cooperation and expertise by 
creating the Lower Mekong Initiative and developing technical 
assistance programs.
    Building upon existing programs, we have mobilized a whole-of-
government approach to our engagement in the Lower Mekong Initiative. 
We are sensitive to the needs and priorities of our Mekong partners and 
are pursuing activities that can bring the greatest gains for the 
region. We are encouraged by the progress that has been achieved in 
such a short time and look forward to planning the Third Lower Mekong 
Ministerial Meeting to continue the discussion to protect the Mekong 
River.
    Thank you for extending this opportunity to me to testify today on 
this pressing and vitally important issue. I am happy to respond to any 
questions you may have.

    Senator Webb. Thank you very much, Secretary Yun.
    I would like to ask you a few questions here. First of all, 
speaking of the Lower Mekong Initiative, you mentioned that the 
United States is contributing $3 million to a program examining 
the impact of climate change on water resources and food 
security. In fact, I was reminded of this contribution several 
times when I was in Vietnam in July. I am, at the same time, 
kind of curious about how much is being invested in areas where 
we can get a more immediate improvement.
    In page 5 of your testimony, you mention a number of items 
that are similar to the areas that I have been attempting to 
get some attention to: the notion of the difficulty of upriver 
dams, which is a main purpose of this hearing, which affect 
riverflow downstream, much among other issues; the impact of 
growing population on pollution in the rivers; the lack of 
pollution standards--in fact, during my Vietnam trip, I was 
told that only 30 percent of the wastewater being put back into 
the river has been treated; and also, the increasing 
industrialization along the river, and the emissions that come 
from those facilities. What are we doing, in terms of the Lower 
Mekong Initiative, to assist in resolving those problems?
    Mr. Yun. Thank you. We have, this year, in FY 2010--we will 
spend--this is our assistance to four Lower Mekong region--$219 
million in assistance. I mean, that includes every assistance 
we have. A large part of that is--the biggest share of that 
goes to Vietnam. And I think that comes--to Vietnam--comes to 
about $90 million. And then next we have Cambodia, at about $72 
million. And then, of course, smaller sums for Laos and 
Thailand.
    Within that amount, the biggest amount is spent on public 
health programs. And I would emphasize two types of public 
health programs. One, we've done a lot in terms of PEPFAR, the 
HIV/AIDS program. And second one is the emerging and infectious 
diseases. And I think that's the area we'll be looking, in the 
future, to expand on. That's the area--we've recently had a 
conference among Lower Mekong countries, and that's the area 
we'll be looking to expand.
    Let me just say a word about Lower Mekong Initiative. 
This----
    Senator Webb. Mr. Secretary, if I may.
    Mr. Yun. Yes.
    Senator Webb. How much of that money is being spent on the 
Mekong River?
    Mr. Yun. It is very small. It is a program that has just 
gotten underway last year. And as you know, our budget cycle 
typically takes 2 years. And we are now making the budget for 
FY12. In the meantime, we want to get whatever resources we 
can. And right now, as you mentioned, $2 to $3 million is 
devoted. And mostly, that will be for technical exchanges--
doing conferences, bring experts over, and so on.
    Senator Webb. But, that money--let's get our facts straight 
here--that money, according to testimony, is principally being 
spent to examine the impact of climate change. Is that correct?
    Mr. Yun. It's not only for climate change. We have also 
some money which will do--I don't know whether we've briefed 
you on Forecast Mekong, for example. That's a program, with the 
U.S. Geological Survey, in which we are trying to do a 
simulation model of water levels in Mekong. And so, some of 
that money was spent on that. And so, at the moment, I would 
say the budget for LMI is pretty much ad hoc. And we need 
devoted money. And this is what we are trying to work at.
    We've had two LMI ministerials over the past 12 months, and 
we're going to have another one at the end of October. And 
before committing money to it, we would like to have some 
structure. And let me just describe to you the kind of 
structure we want to have.
    We want to have full working groups within LMI: education, 
public health, environment and climate change, and, last, on 
infrastructure. Within this working group, we would have 
projects. And so, the simple answer to your question is, money 
issues, we believe, should come after there has been some 
serious work done--what kind of project is necessary. So, 
that's where we are.
    Senator Webb. So, if we're defining the objectives that 
could best be met with the relatively small amount of money 
that we have, in addressing the issues of the Mekong River 
itself, and you had $3 million, would you put it in climate 
change, or would you put it in wastewater treatment, or--what 
would you do?
    Mr. Yun. It's kind of too small to put it any ways, but we 
want to use that money to get the working groups going, to have 
good degree of consultations and studies done so that we know, 
when the bigger money that we will be asking for--we'll know 
what to do with that.
    Senator Webb. Let me just----
    Mr. Yun. We think of this as a long-term commitment, and we 
want to come back to--you know, to Congress, over and over 
again, and seek devoted funding. That's what we aim to do.
    Senator Webb. But, at the same time, my observation is 
that, having visited Can Tho and discussed these issues with 
people down there, when they're getting a certain amount of 
money for climate change, which is rather hard to get your arms 
around, and they have issues of pollution standards, effluence 
into the river, those sorts of things, let me encourage you to 
include those in your objectives.
    Mr. Yun. Thank you. We will.
    Senator Webb. And, if I may, I have just another question 
on the Lower Mekong Initiative. Are you planning discussions to 
engage countries, bilaterally and multilaterally, on the risks 
that are associated with these hydropower projects?
    Mr. Yun. Most of our engagement on Mekong sites, so far, 
has happened with the Mekong River Commission. We, again, do 
give a little bit of assistance to Mekong River Commission. And 
we also work with a couple of large donor countries--Australia 
and Denmark, principally. And most of our engagement has been 
on that front.
    We also have talked with Chinese, on occasions, on water 
usage in general, and also on Southeast Asia. So, we do engage 
China as well as Mekong River Commission.
    Senator Webb. As you know, China, which has about 20 
percent of the Mekong River's water resources, is not a member 
of the Mekong River Commission. It also, as I mentioned in my 
opening statement, does not recognize downstream riparian water 
rights. And I was really gratified to see, recently, just over 
the past month or so, after we, in our country, began 
discussing this issue a little more openly, that China has been 
willing to share some data on the construction in Yunnan. And 
the dam projects in Tibet still remain a mystery. But, what do 
you think they need to do in order to demonstrate that they're 
acting responsibly, in terms of their obligations in the 
region?
    Mr. Yun. I think they need to have a serious dialogue with 
downstream countries regarding, especially, the effects of the 
dams they're building, on waterflow. And so far, that has not 
taken place. We welcome, of course, China recently sharing some 
data, but it's not the whole set. And, you know, essentially, 
we want them to share not only part of the current--I think 
they're only sharing data--daily waterflow during wet season. 
We want them to share, during dry season, what happens. We also 
want them to share historical data. And it's really only 
looking through historical data you're going to get the trend. 
It's not--it's no good--I wouldn't say it's no good; it's some 
help. But, having the current data only is just a slice of the 
picture.
    But, more than that, we would want them to be part of any 
kind of organization that takes place in that region, in terms 
of discussing overall effects, in terms of fisheries, in terms 
of the environment, and what this true cost and benefits are, 
so that people in the region can make the decision, based on 
true cost-benefit analysis.
    Senator Webb. China is very reluctant, particularly in this 
region, to engage in multilateral dialogue. Do you see any 
movement on that front with respect to these issues?
    Mr. Yun. I think we have to encourage them. Mr. Chairman, 
you and I have recently discussed the issues of South China 
Sea, for example. And I think this is another example in which 
United States interests may not be directly involved, or we 
have no real presence there, in terms of sharing borders, but, 
at the same time, regional stability requires we look a little 
bit beyond and engage China and the neighboring states into a 
sustainable dialogue. It can be in a multilateral forum. I 
mean, there are lots of existing mechanisms.
    We have, for example, there is the ASEAN mechanism, there 
is the Mekong River Commission mechanism. As you mentioned, 
there is also the Asian Development Bank mechanism. But, beyond 
that, I think we need to, you know, be more engaged in the 
region with China and the neighboring states.
    Senator Webb. I would agree with that comment, and I 
appreciate your saying it. As I've said many times, the United 
States is a vital ingredient in maintaining regional balance. 
And, even as you point out, we do not have geographical 
boundaries in this area. We certainly can provide, sort of, 
facilitation in order to encourage multilateral cooperation. 
And, quite frankly, if American dollars are going into these 
projects, we can decline to invest in projects that are clearly 
harmful to environmental concerns.
    Thank you very much, Secretary Yun. I know we'll be seeing 
you many times more in this subcommittee, and we appreciate 
your testimony.
    Mr. Yun. Thank you very much.
    Senator Webb. The second panel today, I'd like to welcome 
three experts who've made notable efforts to document the risks 
facing the Mekong River and consider solutions to these 
challenges.
    Dr. Richard Cronin is a senior associate at the Stimson 
Center, where he has directed the Southeast Asia Program since 
2006. Dr. Cronin joined the Stimson Center after a long career 
with the Congressional Research Service. He received his Ph.D. 
from Syracuse University, his master's and bachelor's degree 
from the University of Houston. He is a veteran of the Vietnam 
war. Earlier this year, Dr. Cronin published a report entitled 
``Mekong Tipping Point: Hydropower Dams, Human Security, and 
Regional Stability,'' in which he analyzed the development of 
hydropower dams along the Mekong River, and the regional 
impacts of this activity.
    Welcome again to this subcommittee, Dr. Cronin.
    Ms. Aviva Imhof directs the Southeast Asia and Latin 
American programs at International Rivers. In her position, Ms. 
Imhof works with regional international partners to investigate 
hydropower projects, disseminate information, and provide 
technical, legal, and campaign assistance. Prior to this, Ms. 
Imhof directed the International River's Mekong program for 7 
years. She was the lead organizer of Rivers for Life, the 
second international meeting of Dam-Affected People and their 
Allies, a conference in 2003 that brought together 300 people 
from 62 countries in Thailand. She has also written extensively 
on the efforts to halt destructive river development projects 
in Southeast Asia.
    And welcome, Ms. Imhof.
    Our third witness is Ms. Dekila Chungyalpa, from the World 
Wildlife Federation. She is the U.S. director for the Greater 
Mekong Program and has led WWF's efforts on the Mekong region 
since 2005.
    In July, WWF released a study, entitled ``River of Giants: 
Giant Fish of the Mekong,'' which profiles four giant fish 
species living in the Mekong that rank among the world's 
largest freshwater fish. Ms. Chungyalpa also leads WWF's 
activities on the river basin climate change adaptation and 
sustainable solutions for hydropower. Previously, she worked 
for 5 years with the WWF in the eastern Himalayas and has 
extensive experience working with local communities. Ms. 
Chungyalpa speaks five languages: Sikkimese, Tibetan, Hindi, 
Nepali, and English.
    I thank all of you for being here today. And we will begin 
with Dr. Cronin.
    Welcome.

       STATEMENT OF DR. RICHARD CRONIN, SENIOR ASSOCIATE,
               THE STIMSON CENTER, WASHINGTON, DC

    Dr. Cronin. Thank you, Mr. Chairman.
    I appreciate this opportunity to offer my perspectives on 
these urgent issues regarding water insecurity in Southeast 
Asia.
    I've organized my written statement so as to respond 
specifically to the five questions that you posed. But, in this 
few minutes' time I have, I would like to----
    Senator Webb. Let me say, by the way, because I should have 
said it before, that your full statements will be entered into 
the record----
    Dr. Cronin. I thank you.
    Senator Webb [continuing]. At the beginning of each of your 
testimony. And you're welcome to take whatever time you like to 
make your points orally.
    Dr. Cronin. Thanks very much. I appreciate that.
    My colleagues, in their statements, have already provided 
really eloquent and well-informed coverage of the human 
environmental tragedy that is unfolding. I will use my few 
minutes here to address two things. First--two points--one is 
the risks of both Chinese and proposed Lower Mekong projects 
the region's hard-won peace, stability, and the longer term 
prospects for sustainable development. Second, I will also 
address the Lower Mekong Initiative, which you've already been 
discussing with Mr. Yun.
    The character and the impact of the 8 or more large-to-mega 
dams that China is building on the upper half of the river, and 
the dams--now 11 dams and one other water project--proposed for 
the lower river--lower half of the river in Southeast Asia by--
primarily by Cambodia and Laos, are different but of equally 
negative impact. And again, in the written statement--and I'm 
sure you'll hear from my colleagues--China's dam cascade in 
Yunnan will have different impacts, as opposed to those of the 
Lower Mekong dams. China, basically, is going to change the 
hydrology of the river in a very serious way, and hold back 
silt in its dams, that is necessary to replenish fields and 
rebuild the Mekong Delta every year after the dry season. And 
the Lower Mekong dams, to put it briefly, will block the 
migration of wild fisheries--and we're talking fish--we're 
talking about fish worth about $9 billion as they work to--
their way through the economy, and which constitute anywhere 
from 40 to 80 percent of the protein in diets of some 60 
million people as you've already mentioned in your remarks.
    From a regional peace and security perspective, the worst 
aspect of China's Yunnan cascades is capability of the two 
biggest reservoirs, one of which is already filling--the 
Xiaowan dam--to regulate flow of water from Yunnan to the Lower 
Mekong. China plans to use this storage to put as much as 40 
percent or more water into the river during the dry season in 
order to keep its smaller, but still large, dams running year-
round--that is, its three dams below Xiaowan--and to support 
navigation of large cargo boats between southern Yunnan and 
Luang Prabang, Laos.
    Augmenting the dry-season flow can be--in years of 
drought--can be a positive benefit, but the amount of water 
that China plans to release in the dry season will reduce the 
normal extremes of wet and dry in the river that give it its 
great productivity, and particularly of aquatic life and 
agriculture. So, some water in the dry season, if it's 
unusually dry, will help, but that's not what China has in 
mind. China wants to put more water in the river every dry 
season. And during the dry season, China is the most important 
source of water in the river.
    Even more troubling are the political and geopolitical 
ramifications. If Laos and Cambodia go ahead with their plans 
for damming the middle and lower reaches of the river, they 
will make themselves dependent on China to release water, from 
the Xiaowan Dam and this other even larger dam it's building, 
in the right quantity and at the right time to keep the dams 
operating downstream for several months of the year during the 
dry season. So, they're--Laos and Cambodia--setting themselves 
up, if they build these dams, to be totally dependent on China 
during the dry season, for most of those dams to keep 
operating.
    Equally or more troubling, China has, thus far, refused to 
countenance making cooperative water management part of the 
agenda of the Asian Development Bank-led Greater Mekong 
subregion, known as GMS. The GMS originally started with 11 
``flagship programs,'' they called them, but most of the money 
is going to build roads and bridges in the regional power grid 
that you referenced earlier. And China will not allow the river 
to be part of that discussion. So, we already have the MRC with 
the four Lower Mekong countries, and China is not a part of 
that. And then we have the GMS, where China is a part, as well 
as Burma--or Myanmar, as you wish--but won't let the water 
issue be discussed.
    So, you made some comments in your statement about what we 
should be doing at the ADB. And I think that's one of the areas 
that the--where the United States should be using its 
influence.
    Mr. Chairman, the Obama administration has made the Mekong 
Basin the focal point of its professed engagement with 
Southeast Asia and ASEAN, and not a moment too soon.
    All of the Lower Mekong countries understand the 
geopolitical nature of the U.S. initiative; and, to varying 
degrees, they all welcome it. Because of the wider context of 
enhanced United States engagement with ASEAN, the LMI has been 
welcomed by most other Southeast Asian countries, due to 
concern about China's hegemonic potential, both in mainland 
Southeast Asia and the South China Sea.
    One serious weakness of the LMI, at present, and one that 
you've already addressed in your questions to Deputy Secretary 
Yun, is that the initiative originated in the Bureau of Asian 
Pacific Affairs. It's a foreign policy initiative not backed by 
much in the way of coordination or funding. Its programmatic 
pillars of health, education, climate change, and 
infrastructure were developed--were really developed on an ad 
hoc basis. And one of the problems right now--and you raised 
this issue is that the infrastructure pillar is empty. And the 
reason it's empty, I think, is that there are no programs to be 
rebranded under the LMI. So, the infrastructure side is where, 
if we're going to put more money into this initiative, it ought 
to be--on the river itself, on the hydrological issues, and 
the, you know, the future of fisheries and food security and 
human security and the Mekong Delta.
    This, however--infrastructure actually is an area where the 
United States should be providing, and could be providing, 
technology and capacity-building, especially in modeling, river 
monitoring, and full-scope cost-benefit analysis of proposed 
dams and other infrastructure programs. I think, again, Deputy 
Secretary Yun alluded to us moving in this direction. But, I 
don't think--I don't sense that that's going to come fast 
enough to have an impact on a river which really is at a 
tipping point.
    Thus, the most urgent need is planning and coordination, 
especially for getting adequate funding in place for fiscal 
year 2012. I agree entirely with your legislative initiative on 
the ADB authorization. The United States should be leveraging 
its influence and voting power on the boards of directors of 
not only the ADB, but also to the World Bank, to get them to 
partner with the United States in supporting specific LMI 
programs or program objectives. In other words, it doesn't have 
to be the LMI, exactly, but if we can get--leverage our 
influence to get them involved in this issue, that would be a 
great benefit.
    Neither the ADB nor the World Bank can get directly 
involved in construction--constructing mainstream dams on the 
Mekong, because their extreme environmental and socioeconomic 
impacts are too severe to pass muster with the Bank's own 
criteria. The risk, though, is that, as in the case of Laos' 
recently completed and controversial Nam Theun 2 Dam on a major 
tributary, the Bank should not participate in funding the 
project. Let me clarify what I'm saying here. There's a risk 
that the banks will jump in, to be relevant, and put money into 
environmental mitigation--if it's possible--relocation and 
alternate livelihoods for dams that it cannot otherwise support 
under its own principles. This is a slippery slope. They 
started on this slope at Nam Theun 2. And I think a big mistake 
for the banks to--in the interest of, perhaps, being relevant 
to the countries in the region--to get involved in these 
secondary aspects to mitigate or environmental damage or 
relocate people and give them--help them get new livelihoods.
    Finally, Mr. Chairman, the United States should not, 
cannot, and does not, seek to compete with China for 
infrastructure assistance or obstruct the growing economic 
integration of ASEAN countries into China's production chain. 
We haven't been involved in that business for a long time; that 
is, infrastructure--heavy infrastructure. That said, however, 
provided that infrastructure projects, excluding these 
mainstream dams, and activities are not exploitative or 
environmentally destructive, the expansion of trade investment 
ties between China, its Mekong and ASEAN neighbors can be a 
win-win situation for all. Unfortunately, at present, this is 
far from the case. What we can do, and have already 
accomplished to a surprising extent, is to use our expanded 
engagement in the region, as I would put it, to ``keep China 
honest.'' You alluded already to the--and as did Deputy 
Secretary Yun--to the fact that China has become a bit more 
responsive to its neighbors' concerns; for instance, about 
what's going on in Yunnan, how much water was being released--
whether it was filling or spilling--the Xiaowan Dam, during the 
last drought. But, there's no transparency there. And that 
needs to change.
    And more broadly, American reengagement with Southeast 
Asia, and our firmer stance regarding China's growing 
assertiveness in the South China Sea, have predictably been 
criticized by Beijing, sometimes in angry language. But, the 
main observable effect, to date, has not been an increase in 
regional tensions, but, rather, to cause Beijing to pay 
noticeably more attention to the concerns, fears, and interests 
of its neighbors. U.S. friends and allies in Southeast Asia 
welcome this trend, and they want more of it. This is a major 
achievement, and one that needs a strong and constructive 
followup by the administration and by the Congress.
    In conclusion, rather than creating regional nervousness, 
the initial impact of American reengagement in the Mekong, and 
the wider Southeast Asia region, has been working to the 
benefit of peace and stability, as intended. Now is not the 
time to rest on these still tentative laurels.
    Thank you, sir.
    [The prepared statement of Dr. Cronin follows:]

 Prepared Statement of Dr. Richard P. Cronin, Director, Southeast Asia 
                Program, Stimson Center, Washington, DC

    Mr. Chairman, thank you for the opportunity to offer my 
perspectives on the urgent issues regarding Water and Security in 
Southeast Asia. I have organized my statement so as to respond 
specifically to the five broad questions you posed as well as offering 
some additional observations that I think are relevant to your 
objectives in organizing this hearing.
    Comparatively speaking, 30 percent of the world's fresh water is in 
Asia but it is very unevenly distributed. The South of China is well-
watered but the north and west are extremely dry, as is Central Asia. 
Southeast Asia generally has ample water resources but with two 
important caveats: First, most of the region's rainfall occurs during 
the monsoon or wet season, which can be unreliable. Second, in the 
Mekong Basin a large portion of water available during the dry season 
comes from the spring and summer melting of the winter snowcap in 
Tibet. Nonetheless, the adaptation of flora and fauna to the extremes 
of wet and dry are the main reasons for the river's rich bounty and 
they are gravely threatened by hydropower dams, especially on the main 
stream and major tributaries. The conditions have made the Greater 
Mekong Region Subregion (GMS) a major wet rice growing region, with 
Thailand and Vietnam the world's first and second rice exporters.

Government policies and standards in Southeast Asia that address 
population growth, pollution, and industrial activity, and the impact 
on the region's water use and management.

    To answer the first question you posed, most but not all Southeast 
Asian governments have generally done a better job of reducing 
population growth rates than protecting their forests from rampant 
destruction and rivers, estuaries, and other water resources from 
pollution and the unsustainable use of ground water. Most large coastal 
cities in Southeast Asia are sinking from the depletion of their 
aquifers, even as the threat of rising sea levels and exceptionally 
severe storms caused by climate change are beginning to be felt. 
Jakarta, Bangkok, Manila, Hanoi and Ho Chi Minh City are frequently 
flooded even by storms of common and predictable strength.
    Unsustainable population growth remains an underlying cause of 
environmental degradation as well as political instability in some 
parts of the Mekong Basin, especially in upland areas which already are 
suffering from excessive exploitation. The comparatively youthfulness 
of most of the Mekong country populations ensures considerable growth 
momentum for some time after fertility rates decline to replacement 
level.
    In Mekong Southeast Asia the population of Laos was growing at an 
estimated 2.73 percent per year as of 2007, with a very young age 
structure--41.2 percent of the population aged 14 years and under. 
Cambodia is growing more slowly at 1.73 percent per year, but 
Cambodians 14 and under still account for 34 percent of the population. 
The relevant figures for Vietnam are 1.04 percent growth and 26.3 
percent of the population at 14 or under. The Thai population is 
growing at well under 1 percent per year and only 21 percent of the 
population is 14 years or younger. Myanmar's growth rate has fallen 
from 2.5 percent in the mid-1970s to below 1.0 percent in 2008, no 
doubt due in part to the dim economic prospects for a population with a 
comparatively high level of literacy but forced to live under the 
misrule of the military junta.
    Because of the still largely young populations of the Lower Mekong 
countries--besides Thailand--demographers estimate that the population 
of the Mekong Basin will increase from 73 million at present to about 
120 million by 2025, an increase of 65 percent. Moreover, some areas 
are growing far more rapidly and unsustainably. For instance, the 
population around Cambodia's Tonle Sap Great Lake is growing three 
times faster than the rest of the Cambodian population. Incomes of 
people living around and even on the Tonle Sap not surprisingly are 
one-third of those of Phnom Penh and poverty is four times as high. 
Certainly rapid population growth is a major factor in poverty but so 
are development policies that unsustainable exploit the resources of 
the poorest citizens for the benefit of more politically important 
urbanites.
    As often pointed by Southeast Asians, the United States, Europe, 
and other parts of the more developed world equally abused their 
resources until they were almost gone. The problem is that this 
historically factual argument glosses over some important differences 
between the industrial states of the northern hemisphere with 
developing Asia and Africa that are critically important. Europe long 
ago dammed all of its major rivers but the process took place over a 
couple of hundred years and occurred simultaneously with 
industrialization. The United States took a century to exploit the 
resources of a rich but comparatively lightly populated continent. The 
Native Americans paid a terrible price, of course, but until the 
closing of the frontier in the late 19th century Americans could always 
move on to somewhere else after local resources were exhausted. Today 
New England is more forested than in the early 19th century, but mainly 
because the whole basis of the economy has changed.
    In contrast, the Greater Mekong River Basin (GMS), which some call 
``Asia's Last Frontier,'' offers no new rich western lands and some 
important natural resources such as timber that once seemed 
inexhaustible have been rapidly depleted, mainly by illegal cutting. 
Nor do many of the poorest Southeast Asian countries have the realistic 
potential for the kind of rapid industrialization that took place in 
Europe, North America and Northeast Asia to absorb people who lose 
their lands, fisheries, and livelihoods. In other words, the relentless 
expropriation of shared community water resources is not likely to have 
the same kind of positive outcome for the 60 million or so Lao, 
Cambodians, and Vietnamese (in the Mekong Delta) who will loose their 
livelihoods and food sources. These days, forests are destroyed as much 
to make way for rubber and palm oil plantations as for the timber. For 
maximum efficiency, these operations seek to minimize employment, and 
in the case of Chinese investments, labor is imported directly from 
China and the workers live in self-contained camps.
    Hydropower development is even more detached from future employment 
opportunities and higher living standards. For a variety of reasons, 
starting with geography and inappropriate economic policies, 
industrialization and services industries are not likely to spring up 
to create new livelihoods for most of those displaced by the dams. The 
record thus far of relocating, compensating, and providing new lands 
and occupations of those displaced by hydropower dam projects gives no 
cause for optimism. Especially because of the particularly devastating 
impact of mainstream dams on fisheries and existing agriculture, the 
most likely consequence will be the spontaneous migration to cities, in 
some cases across borders, with the attendant social ills of increased 
squalor, crime and trafficking in drugs and human beings.

The political, environmental, sovereignty and regional security impact 
of China's water use and hydropower development along the upper Mekong 
River, and China's in regional water resources management.

    The most important aspect of the Mekong in terms of water and 
security--both national and human--is that the river is a transboundary 
resource shared by six countries: China which controls the source and 
upper half of the river, and five downstream Southeast Asian 
countries--Burma/Myanmar, Laos, Thailand Cambodia, and Vietnam.
    China's ongoing construction of a massive cascade of eight or more 
dams on the Upper Mekong in Yunnan and plans by Laos and Cambodia for 
11 dams on the lower half of the River's mainstream epitomize the 
skewed nature of what passes for ``development'' in Chinese minds as 
well as in some quarters of the Asian Development Bank (ADB), the World 
Bank and the African Development Bank. Of course large to mega-sized 
dams generate much-needed electricity for cities and industries and 
which tends to boost overall GDP growth, but at a huge cost to those 
who lose their forests, fisheries, and farms.
    Dams on the main stem of any river are highly destructive of its 
core hydrology and the existing ``environmental services'' such as 
aquatic life and clean water for agriculture and drinking. The case of 
the Mekong River Basin is at the extreme end of the 
developmentenvironment dilemma. The Mekong is one of the most 
productive river basins in the world in terms of fish and agriculture, 
second only to the Amazon, which is 12 times its size.
    Both upstream and downstream dam proposals have different impacts 
on the River's hydrology, ecology, morphology, and human security. I 
will begin by discussing China's hydropower development program in 
Yunnan Province, in the far southwest of the country.

                         CHINA'S YUNNAN CASCADE

    The character and impact of the eight or more large to mega dams 
that China is building on the upper half of the river, which China 
calls the Lancang Jiang (``Turbulent River'') and the dams proposed for 
the lower half of the river in Southeast Asia are different in 
important respects.
    The main environmental impact of China's dams will be to capture 
much of the silt that flows down from the Tibetan Plateau with the 
spring snowmelt and late summer monsoon rains, thereby depriving 
downstream farmers of the annual nutrient renewal of their fields and 
denying the Mekong Delta that replenishment of silt necessary to keep 
the South China Sea at bay. China's Yunnan Cascade will also shift the 
timing of the seasonal monsoon ``flood pulse'' that triggers the 
spawning migration of many fish species.
    Worst of all, the reservoirs of China's two biggest dams in the 
Yunnan cascade, the Xiaowan Dam that began filling last fall or winter 
and the Naozhadu Dam, now under construction, can hold 15 and 22 
billion cubic meters of water respectively. This is more than one 
season's annual flow of the upper half of the river and it will give 
China the ability to regulate the river from Yunnan to the South China 
Sea. China plans to use this storage to put as much as 40 percent or 
more water into the river during the dry season in order to keep the 
smaller (but still quite large) dams running year-round and support 
navigation for large cargo boats between southern Yunnan and Luang 
Prabang, Laos, and for yet unrevealed plans for irrigation and possibly 
other water diversion schemes.
    These plans to regulate the river to support navigation and 
changing power demands are extremely destructive environmentally and 
ecologically. Ever since construction was begun on the first dam at 
Manwan, which came on line in 2003, very erratic river flows have 
scoured river banks and destroyed dry season vegetable gardens, and 
even drowned villagers on river banks in northern Laos who were caught 
unawares by fast rising water from dam operations. Manwan, it should be 
pointed out, has only \1/15\th the storage capacity of the Xiaowan Dam 
upstream. To be clear no more water can come down the river than can 
pass through the Manwan Dam's flood gates at a given time, but the 
whole point of building Xiaowan as a giant cistern is to keep Manwan 
and two other smaller dams operating year round.
    Even more troubling, are the potential political and geopolitical 
ramifications of China's Yunnan cascade. Many citizens and even 
officials in the downstream countries blamed China for the last dry 
season extreme drought, the worst in 50 years. The drought was only 
broken when the monsoon rains returned this summer. China protested 
that it was also suffering from the same drought, but because it 
provided no data about the operation of its dam it was never certain 
whether the Chinese dams were spilling, filling, or passing along as 
much water as entered the reservoirs upstream.

                          TROUBLING DEPENDENCY

    Even in ``normal'' years the dry-season flow of the Lower Mekong is 
too meager to generate hydropower. In many places you could walk most 
of the way from Vientiane, Laos to the Thai side of the river. If Laos 
and Cambodia in particular go ahead with their plans for damming the 
middle and lower reaches of the river they will make themselves 
dependent on China to release water from the Xiaowan Dam in the right 
quantity and at the right time to keep the turbines running for several 
months of the year.
    Some officials from those countries have expressed confidence that 
China would never withhold water for any prolonged period for the 
practical reason that it needs to keep enough water flowing to keep its 
own southernmost dams generating power during the dry season. There are 
at least a couple of flaws with this theory. First, at times of 
prolonged drought China may not have enough water in the reservoir to 
keep its own dams operating. This appears to have been what happened in 
the recent dry season, though in this case China had only begun to fill 
the Xiaowan Dam during the preceding rainy season.
    In addition, in view of predictions that climate change will 
continue to cause the retreat of glaciers and the shrinking of the 
winter snowcap in Tibet, China may give higher priority in the future 
to storing water than producing power. Moreover, China is already 
considering the diversion of some Mekong water to the Yangtze River to 
make up for water it plans to redistribute from that river to the 
Yellow River in the bone dry North. The risk that China will engage in 
``water nationalism'' is a real one, and a strong reason for not 
building Lower Mekong dams.

The challenges of proposed dam construction along the Lower Mekong 
River, and the impact on the region's environment, food security, 
sovereignty, and economic development.

    The Lower Mekong is very different than most other important rivers 
of the world in that some 60 million people depend directly on, or 
indirectly, on its almost unparalleled bounty of fish and annual load 
of silt that replenishes otherwise nutrient-deficient soil. This food 
resource is not only of vital importance to local livelihoods, but the 
rice produced with the Mekong's waters in Thailand, Cambodia, and 
Vietnam's Mekong Delta is important to the global rice market. The 
people who depend on the river badly need to improve their standards of 
living and nutrition, but destroying the natural functions of the river 
is not the way to do this. Rather, the river and its bounty of fish and 
agricultural production have to remain the base of the Mekong counties' 
economic pyramid. Already hundreds of dams are operating, under 
construction, or planned for tributaries in the mountains of Laos, 
Vietnam's Central Highlands, and the higher elevations of Thailand and 
Cambodia.
    The true cost-benefit ratio of many of these projects have been 
questionable, but they are of a different order altogether than dams on 
the mainstream that, if carried out as planned, would turn 90 percent 
of the lower half of the river into a series of nine or more slow 
moving lakes, connected by stretches of fast moving but highly variable 
channels and cascades that cannot support life.

The effectiveness of existing regional mechanisms for managing water 
resources in Southeast Asia and options for improving regional water 
resources management.

    The current incarnation of the Mekong River Commission (MRC) was 
created in 1995 when four of the lower Mekong countries signed The 
Agreement on the Cooperation for the Sustainable Development of the 
Mekong River Basin. This agreement established norms for water use, 
flow maintenance, environmental protection, and areas of cooperation, 
to name a few. It eventually led to the establishment of four 
institutional goals for the MRC: To promote and support coordinated, 
sustainable, and propoor development; to enhance effective regional 
cooperation; to strengthen basinwide environmental monitoring and 
impact assessment; to strengthen the Integrated Water Resources 
Management capacity and knowledge base of the MRC bodies, National 
Mekong Committees, Line Agencies, and other stakeholders.
    The Mekong River Commission provides a valuable scientific research 
resource and an institutional structure for cooperative water 
management for the four Lower Mekong countries. Unfortunately, the MRC 
mechanism has made little real progress toward the goal of fostering 
cooperation. There still are no enforceable rules and MRC countries 
seem unlikely to adopt them under current circumstances. Moreover, the 
MRC is ultimately an advisory body, with no independent legal authority 
to coordinate, plan, or oversee projects--under the current situation, 
these remain sovereign prerogatives.
    Because of a long term lack of trust among the Lower Mekong 
countries, concerns about sovereignty and the high priority given to 
the exploitation of ``national'' resources for development, one 
country's interests often are almost inevitably in conflict with those 
of its neighbors or the region as a whole. Moreover, the goal of truly 
cooperative, equitable, and sustainable use of the Mekong is largely 
moot as long as China, along with Burma/Myanmar, has declined to join 
the MRC. Beijing refuses to share either significant information about 
its dams or the data that it used in or derived from its own 
environmental and hydrological studies. Even more troubling, China thus 
has refused to countenance making cooperative water management of the 
ADB-led Greater Mekong Subregion (GMS) cooperative development program. 
Instead the GMS has focused on crisscrossing the Mekong Basin with 
roads, bridges, and even a regional electric power grid, without 
including the river that gives the region its name.

The United States policy toward water resources management in Southeast 
Asia, particularly along the Mekong River, existing U.S. Government 
efforts to promote improved water resources management; and options for 
the United States to play a more constructive role in addressing these 
challenges.

    Mr. Chairman, the Obama administration has made the Mekong Basin 
the focal point of its professed reengagement with Southeast Asia and 
ASEAN, and not a moment too soon. Of course the United States never 
really left the region, especially in regard to our military 
capabilities and engagement in East Asia and the Pacific, but it has 
been widely accepted that especially after 9/11 the United States was 
distracted, and tended to make antiterrorism cooperation the focal 
point of its regional engagement. An effort to rebalance U.S. 
engagement was begun late in the second George W. Bush administration, 
but the Obama administration has greatly expanded the policy 
qualitatively, and has begun to mobilize additional budget resources to 
expand our involvement more substantively. We have a long way to go and 
need to mobilize the resources, expertise, and capabilities of a wide 
variety of departments and agencies as well as leverage our important 
positions on the boards of the ADB and World Bank.

                     LOWER MEKONG INITIATIVE (LMI)

    With the approval of the four MRC countries Secretary of State 
signaled U.S. reengagement with the region by signing a Letter of 
Intent (LOI) for cooperation with the CEO of the Mekong River 
Commission, Jeremy Bird, at the annual ASEAN Foreign Ministers meeting 
which was hosted by Thailand at Phuket in July 2009. Initially the 
concept involved a sister river partnership between the MRC and the 
U.S. Mississippi River Commission. What the State Department now calls 
the Lower Mekong Initiative (LMI) has great potential but some 
important ongoing limitations.
    All of the Lower Mekong countries understand the geopolitical 
nature of the U.S. initiative, most especially China, and to varying 
degrees and the exception of China, they all welcome it in varying 
degrees. Because of the wider context of enhanced U.S. engagement with 
ASEAN, the LMI has also been welcomed by most Southeast Asian 
countries, all of whom worry about China's hegemonic potential both in 
mainland Southeast Asia and the South China Sea.
    For the same reasons the administration's decision to approve the 
ASEAN Treaty of Amity and Cooperation (TAC) and apply for membership in 
the East Asian Summit (EAS) have also been widely applauded, as has 
Secretary of State Clinton's declaration at this years ASEAN Foreign 
Ministers' meeting in Hanoi that we have important interests in the 
South China Sea and that our position on the maritime territorial 
disputes is that boundaries of 200 mile Exclusive Economic Zones 
(EEZ's) should be anchored on the shore. Effectively, the Obama 
administration has aligned itself with the principles of the UN 
Convention on the Law of the Sea, and against China's claim to most of 
the South China Sea on the basis of a historical presence.
    One important limitation of the LMI at present is that the 
initiative originated in the Bureau of East Asian and Pacific Affairs. 
This was a foreign policy initiative not backed by much in the way of 
programs or funding. Though it was intended to cover the areas of 
health, education, climate change, and infrastructure, the main agency 
involved besides the State Department was the U.S. Geological Survey, 
which had already initiated the Mississippi-Mekong Partnership with 
Vietnam's Can Tho University.
    The substance of the LMI shows the strengths and weaknesses of the 
American governmental structure. On the one hand, many departments and 
agencies have already been involved in activities that support the LMI 
objectives, especially much-needed human capacity-building and 
education. On the other hand, these activities still are not 
coordinated in any meaningful way. Moreover, in the absence of strong 
coordination, too much depends on the individual enthusiasm and 
leadership of government officials to generate ad hoc cooperation. 
Officials come and go, and senior bureaucrats have strong influence 
over department and agency priorities and often legislative mandates 
for much of their budgets.
    Mainly by rebranding existing USG efforts the State Department 
identified by the latest count about $200 million for FY 2010, mainly 
in the form of environment-climate change, health, and education and 
training. Some other activities already underway show the wide array of 
support the administration and Congress could generate through a 
concerted approach. For instance, the Corps of Engineers, presumably 
under its own international agenda, has brought senior officials from 
the Lower Mekong countries and possibly China to visit Columbia River 
dams, where they had the opportunity to learn first hand about the high 
cost and limited success of fish ladders and other means to move salmon 
around dams that block their spawning runs. Corps representatives have 
even participated in MRC ``stakeholder consultation'' meetings to 
explain that fish ladders and ``fish ways'' are not practical on the 
Mekong River.
    USAID has ongoing programs on climate change adaptation. The 
Education Department and the Center for Disease Control have long had 
programs in the LMI countries.
    Recently a colleague and I have even participated in programs on 
mainstream hydropower issues for Mekong country officials and NGOs 
under the State Department's International Visitor Program.
    Infrastructure remains a blank space in the four LMI pillars, 
probably because there were no existing programs that could be 
rebranded. This is an area where the United States could be providing 
technology and capacity-building, especially in the modeling, river 
monitoring, and full scope cost-benefit analysis of proposed dam and 
other infrastructure programs. Nonetheless, Secretary of State Clinton 
has repeatedly emphasized her concern about Mekong fisheries, food and 
human security and the future of the Mekong Delta.
    On the technology side, the Commercial Service of the U.S. Commerce 
Department and the EX-IM Bank can help promote relevant U.S. 
technology, including sensing technology for river flows, changes in 
silt loads, and pollutants, as well as alternative energy like 
efficient gas-fired thermal power plants.
    Both Thailand and Vietnam are already exploring the possibility of 
acquiring U.S.-designed third generation nuclear power plants, namely 
Westinghouse's Passive Core Cooling Systems (PCCS) which are not 
dependent on large amounts of river water. The technology is licensed 
to a South Korean company but Westinghouse still supplies important 
reactor and control components. Obviously there are a host of issues 
about nuclear power, starting with proliferation risks and safe spent 
fuel disposal, but increasingly even environmentalists are coming 
around to the view that modern nuclear power could be preferable to 
coal and other thermal power. Solar and wind power also have 
considerable potential in Southeast Asia but China is likely to emerge 
more competitive than the United States in these areas of applied 
technology.

               URGENT NEED FOR PLANNING AND COORDINATION

    The most urgent need is planning and coordination, especially for 
getting adequate funding in place for FY 2012. I'm not sure where these 
functions should be located, whether in the State Department or 
elsewhere. At present the EAP Bureau has neither the staff nor the 
funding to accomplish this task. USAID would be a possibility, but only 
with a designated program and adequate staff and funding. Putting the 
coordination responsibility might--and I emphasize might--also make 
sense because USAID operates under the general policy direction of the 
State Department.
    Many departments and agencies could give more substance to the LMI, 
and in fact many of them are already involved in some way with the 
Mekong River Commission and individual governments. An inclusive list 
could include, in alphabetical order: The U.S. Agency for International 
Development (USAID), Army Corps of Engineers, Centers for Disease 
Control and Prevention (CDC), the USDA and its National Institute of 
Food and Agriculture and Foreign Agricultural Service (FAS), 
Departments of Commerce, Education, and Energy, Export-Import Bank (EX-
IM), U.S. Geological Survey, Health and Human Services (HHS), and the 
National Oceanic and Atmospheric Administration (NOAA).
    The United States should also be leveraging its influence and 
voting power on the boards of directors of the ADB and World Bank to 
jointly support specific LMI programs or program objectives. Both banks 
have been putting the mantle of poverty reduction over projects that 
may ultimately impoverish more people than they help. In my view and 
that of many other observers, it's past time for the United States to 
push harder for projects that aim to raise the incomes and improve the 
lives and health of the poorest and the most natural resource-dependent 
populations where they live.
    At the same time, the United States Executive Directors to the 
Banks should be instructed to oppose egregious hydropower projects, 
especially mainstream dams which do not meet World Bank and World 
Commission on Dams criteria. Neither the ADB nor the World Bank can get 
directly involved in constructing mainstream dams on the Mekong because 
their extremely environmental and socioeconomic impacts are too severe 
to pass muster with the Banks' own criteria.

                         ``KEEP CHINA HONEST''

    Finally, Mr. Chairman, the United States should not, cannot and 
does not seek to compete with China for infrastructure assistance or 
obstruct the growing economic integration of the ASEAN countries into 
China's production chain. We haven't been involved in infrastructure 
development assistance for decades and are not likely to become so in 
the future. For better or worse--mainly for the worse--most of these 
dam projects are being carried out by commercial developers and 
commercial or state-owned banks. That said, however, provided that 
infrastructure projects and activities are not exploitative or 
environmentally destructive, the expansion of trade and investment ties 
between China and its Mekong and ASEAN neighbors can be a ``win-win'' 
situation for all. Unfortunately, at present this is far from the case.
    What we can do--and have already accomplished to a surprising 
extent--is to use our expanded engagement with the region to ``keep 
China honest.'' U.S. naval and other military power combined with our 
still potent ``soft power''--political, economic, and cultural--still 
counts for enough to influence our friends and worry China.
    Interestingly, while a few observers from Southeast Asia have 
worried that the region could be caught in the middle of a growing 
United States-China rivalry, most regional leaders and observers 
welcome the asymmetrical balancing role that the U.S. provides. While 
American reengagement with Southeast Asia and our firmer stance 
regarding China's growing assertiveness in the South China Sea have 
predictably been criticized by Beijing, some times in angry language, 
the main observable effect to date has not been an increase in regional 
tension. Rather, the most important effect has been to cause Beijing to 
pay noticeably more attention to the concerns, fears and interests of 
its neighbors. This is a major achievement and one that needs a strong 
and constructive followup by the administration and Congress.
    In conclusion, rather than creating regional nervousness, the 
initial impact of American reengagement in the Mekong and the wider 
Southeast Asia region has been working to the benefit of peace and 
stability, as intended. Now is not the time to rest on these still 
tentative laurels.
    Thank you, Mr. Chairman for giving me this opportunity to share my 
views with the committee. I will be glad to answer as best I can any 
questions you may have, either orally now or in writing later.

    Senator Webb. Thank you, Dr. Cronin. I fully agree with the 
final statement that you made. I was very gratified to see 
China beginning to move forward with some cooperation here, 
although it has, as I mentioned earlier, been extremely 
hesitant to deal with sovereignty issues; and this is a 
sovereignty issue----
    Dr. Cronin. Yes.
    Senator Webb [continuing]. It's a water sovereignty issue 
on--other than on a bilateral basis. So, there is some room for 
hope there.
    And, Ms. Imhof, welcome.

  STATEMENT OF AVIVA IMHOF, CAMPAIGNS DIRECTOR, INTERNATIONAL 
                      RIVERS, BERKELEY, CA

    Ms. Imhof. Thank you, and good afternoon.
    Mr. Chairman, thank you for the opportunity to testify 
before you today on the risks to the Mekong River Basin.
    My organization, International Rivers, and I, personally, 
have been involved in monitoring hydropower developments along 
the Mekong River for the past 15 years. We've documented the 
impacts of existing dams and advocated for the rights of the 60 
million people who depend on the Lower Mekong River for their 
livelihoods. And in a region, as you can imagine, that is 
riddled with nondemocratic governments, it's not an easy task.
    As we've already heard, the Mekong River is one of the 
world's great river basins. And we've heard about the 
importance of fisheries to people's livelihoods, and the 
importance of fish migrations, and the fact that dams block the 
migration fish, and the enormous impacts that that will have on 
the ecosystem and livelihoods.
    We've also heard about China's plans to build a cascade--
or, they're currently building the cascade of eight dams on the 
Upper Mekong. So, I won't talk about that.
    What I will talk about is that--you know, I want to go 
through a little bit about the dam plans for the region, first, 
and then the impacts that that will have.
    Laos, which contributes about a third of the Mekong's flow, 
is undergoing a dam-building boom. The government's signed 
deals with foreign investors to build more than 50 dams on 
Mekong tributaries, mostly for sale of power to Thailand and 
Vietnam. Laos is also considering 10 projects on the Mekong 
mainstream. Right now, it sells power from eight projects to 
Thailand. And we've spent a long time documenting the impact of 
these projects--they're all on Mekong tributaries--the impacts 
to people's livelihoods. And over 100,000 people right now are 
suffering the impacts from existing dams on Mekong tributaries 
in Laos and have not been adequately compensated for their 
losses. Sometimes, it's been 10 years that people have been 
suffering impacts and haven't been compensated. And a number of 
these projects have been funded by the Asian Development Bank. 
So, it's very timely that you're introducing legislation to 
deal with the issue of Asian Development Bank-funded dams.
    And one of the big concerns, of course, is that, with all 
these tributary projects that are already having an impact on 
people's livelihoods--these are smaller projects than the 
mainstream dams--if Laos can't even ensure that these projects 
have adequate mitigation and compensation mechanisms for 
affected communities, then how on earth are we going to deal 
with this--these massive mainstream dam projects that will have 
even greater impacts?
    Vietnam also has plans to build up to 48 new dams by 2025, 
many of which are already under construction. And, here again, 
we find that dam cascades are being built on two major Mekong 
tributaries, the Se San and the Srepok, the impacts of which 
are being experienced by more than 55,000 villages living 
downstream in Cambodia who, today, have not received 
compensation for their losses.
    Cambodia has also committed to an extensive domestic 
hydropower development program, mostly financed with the 
support of the Chinese Government, and they're considering two 
dams, also on the Mekong mainstream in Cambodia.
    And meanwhile, in Thailand, where there is more political 
space, Thailand has faced such huge opposition to dam 
construction in the past that it's basically looking to import 
electricity from neighboring countries, rather than to build 
more dams in its own territory, because it knows it would face 
too much opposition.
    So, I want to now discuss the regional planning and policy 
context and how this affects water resources development in the 
Mekong Basin. As this committee would be aware, and as you are 
aware, the Mekong region's political context is challenging, 
with a number unaccountable and undemocratic regimes. While, on 
paper, some of the national laws regarding water resources 
development in the region are progressive, there is a great gap 
between policy and practice. And I believe you also noted this 
in your opening statement.
    In Laos, Cambodia, and Vietnam, hydroconcessions, including 
those on the Mekong mainstream, seem to be given out to any 
interested developer on a first-come-first-served basis without 
any attention paid to basin development planning processes or 
the reputation of the company involved. Even where laws are 
strong--even where strong laws are in place on paper, they're 
often not followed in practice. Like environmental impact 
assessments are often not released before a dam is given an 
approval for construction in violation of domestic laws. And 
weaknesses in government capacity in Laos and Cambodia 
particularly exacerbate the problems with regulation and 
enforcement.
    And this week, institutional and regulatory framework has 
been compounded by changes to the regional investment 
environment for hydropower development. Today, energy 
construction companies from China, Vietnam, Thailand, and 
Malaysia are developing, funding, and building large dams. Thai 
and Chinese companies and financial institutions, such as Thai 
EXIM and China Eximbank, are becoming particularly prominent in 
developing and funding hydropower projects in the region, as 
are Thai and Chinese private banks. And these new actors are 
yet to adopt any international social and environmental 
standards in their operations, which leads to poor planning 
processes and even poorer project outcomes.
    I want to focus now specifically on plans for the Lower 
Mekong mainstream. As we've heard, there are plans for a 
cascade of 12 large dams on the Mekong River's mainstream, and 
most of the power would be sent to Thailand and Vietnam. In 
total, the dams would transform two-thirds of the length of the 
Lower Mekong River into a series of reservoirs that would 
require the resettlement of at least 88,000 people. And in 
order to assess the implications that this cascade would have 
on the Mekong River's ecology and economy, the Mekong River 
Commission commissioned a Strategic Environmental Assessment of 
the proposed mainstream dams. Conducted over a period of 15 
months, the SEA team has just delivered its final report to the 
Mekong Secretariat. And this really is the first-ever 
comprehensive, cumulative impact assessment of dam construction 
on the Mekong mainstream, so it's a very significant report. 
And what the SEA does is, it highlights the significant 
environmental, social, and economic impacts that the dams are 
expected to have, while also warning of the skewed cost-benefit 
distribution likely to occur.
    The SEA warns that the decision to move forward with just 
one dam alone would result in permanent and irreversible 
changes to the Mekong River ecosystem. The projects, as a 
whole, would impact more than 40 million people, an incredible 
number of people, who rely on the Mekong River for their 
livelihoods and food security.
    Just a few of the impacts mentioned in the SEA's impact 
assessment report: Through blocking fish migration routes and 
changing the water quality and quantity of water, the dams 
would cause fishery losses of between 700,000 and 1.4 million 
tons each year, which is estimated to be worth between around 
$500 million and $1 billion. In turn, the livelihoods and food 
security of millions of people would be impacted, and there's a 
consensus amongst fisheries scientists in the region that these 
impacts cannot be mitigated. There's no technology available to 
mitigate these impacts to fisheries.
    The dams would also impact the immense biodiversity of the 
Mekong River. Important critically endangered species, such as 
the Irrawaddy dolphin and the giant Mekong catfish, would 
likely be driven to extinction. The dams would flood key 
biodiversity zones, national protected areas, and Ramsar 
wetlands sites, impacting terrestrial and aquatic habitat for 
fauna and flora. And more than half of the Mekong's riverbank 
gardens would be inundated by
the dams and damaged by daily water fluctuations. This would 
result in lost income generation of between $18 and $57 
million, while also affecting food security by reducing 
household vegetable consumption.
    And finally, as we've heard a little bit, today the 
reduction of sediment flow in the Mekong River would have 
serious consequences for Cambodia's flood plains and great 
lakes system, along with the Mekong Delta in Vietnam. And, of 
course, these impacts would be compounded by climate change, as 
well.
    The SEA team also finds that the economic benefits of the 
projects would accrue mostly to the private developers and 
contractors building the projects, and that the projects would 
actually have relatively little impact on power supply for 
Thailand and Vietnam, the two major consumers of electricity. 
So, basically, as we can see, the projects would have a massive 
impact and then wouldn't actually even add much, in terms of 
meeting regional energy needs.
    These findings have led the SEA team to recommend that all 
decisions on Mekong mainstream dams be deferred for a period of 
10 years, and that this period of time be used to examine 
alternative nondam options for generating electricity from the 
Mekong mainstream, as well as to improve the understanding of 
the river basin's ecology and potential impacts of the 
projects.
    So, the question now facing the region's governments and 
the Mekong River Commission is whether they will adopt the 
recommendations of the SEA. And unfortunately, Mr. Chairman, 
the writing on the wall is not good. We've heard, from some 
sources, that the MRC, because it doesn't like the conclusions 
of the SEA, is attempting to distance itself from the SEA 
recommendations and to move forward with some of the dams.
    And, very significantly, just yesterday it was announced 
that the Government of Laos has submitted official notification 
to the MRC for the Xayaburi Dam on the Mekong mainstream, which 
would be the first dam that's being proposed to be built on the 
Mekong mainstream. And this will trigger the MRC's consultation 
process with regional governments. And they're expecting a 
decision to be made within 6 months. The MRC is likely to allow 
this consultation process to go forward, despite the fact that 
the SEA report hasn't yet been released publicly, hasn't been 
translated into regional languages or considered by regional 
governments, nor has its finding been incorporated into the 
Xayaburi EIA.
    So, to allow the Xayaburi consultation to go forward 
without considering the findings of the SEA would be like 
getting a diagnosis of cancer and then ignoring it. Mr. 
Chairman, this must not be allowed to happen.
    Which brings me to the final part of my presentation, which 
is, What can the United States do to avert disaster on the 
Mekong? As a first step, the U.S. State Department, in its role 
as a donor to the Mekong River Commission and to regional 
governments, should push for the SEA report to be publicly 
released and endorsed by the MRC and member countries before 
any consultation process on an individual dam, like Xayaburi, 
be initiated. The United States should help push for the SEA's 
recommendations to be followed, which means deferring decisions 
on mainstream dams for at least 10 years. The United States 
could offer the assistance of the U.S. Geological Survey in 
generating more comprehensive data sets on the river's 
hydrology, ecology, sediment flows and water quality, and 
ensuring that this information is released in the public 
domain. The U.S. State Department should continue to voice its 
concerns over the security risks these dams pose, and continue 
its work in highlighting the importance of regional food 
security and the role that fisheries plays in the region.
    Finally, we believe that, through providing support and 
training for better energy planning processes, such as 
integrated resources planning, which is a technique used by a 
lot of U.S. utilities, coupled with technical assistance and 
startup funds for investment and energy efficiency and clean, 
renewable energy sources, the United States could play an 
instrumental role in pushing for a clean energy future for the 
Mekong region, allowing the Mekong River Basin to be preserved 
for future generations.
    Chairman Webb, thank you again for the opportunity to 
contribute to this important debate.
    [The prepared statement of Ms. Imhof follows:]

  Prepared Statement of Aviva Imhof Campaigns Director, International 
                          Rivers, Berkeley, CA

    Mr. Chairman, Senator Inhofe and members of the committee. Thank 
you for the opportunity to testify before you today on the risks to the 
Mekong River Basin and its inhabitants from the construction of large 
dams.
    My organization, International Rivers, and I personally, have been 
involved in monitoring hydropower developments along the Mekong River 
for the past 15 years, documenting the impacts of existing dams built 
in the Basin and advocating for the rights of the 60 million people who 
depend on the lower Mekong River Basin for their livelihoods. In a 
region that is riddled with nondemocratic governments, this is no easy 
task.
    The Mekong River is one of the world's great river basins. The 
river still flows freely for most of its length; until recently the 
region's years of war and instability had protected the river from 
massive dam construction.
    Seventy different ethnic groups live in the Mekong Basin and their 
livelihoods and cultures are intimately connected with the river's 
natural cycles. The river boasts one of the world's most diverse and 
productive inland fisheries, in some areas supplying the people of the 
region with up to 80 percent of their protein needs. Whether it's the 
Tonle Sap or Great Lake of Cambodia--the country's fish basket--or the 
tropical wetlands of the Mekong Delta--the rice bowl of Vietnam--the 
river sustains the people and ecosystems of the region.
    The Mekong River is second in biodiversity only to the Amazon, home 
to up to an estimated 1,500 different species of fish. By comparison, 
the Mississippi River in the United States--also recognized for its 
high biodiversity--has only 241 fish species. Included amongst the 
Mekong's aquatic biodiversity are such emblematic and threatened 
species as the Mekong Giant Catfish--a species that grows up to 9 feet 
in length and weighs up to 600 lbs--the endangered Irrawaddy freshwater 
dolphin, and the world's largest freshwater fish, the giant freshwater 
stingray. The Mekong's fisheries are highly migratory--at least a third 
of Mekong fish species migrate between the mainstream and its 
tributaries, including 70 percent of the commercial fish catch. 
Migrations are timed to coincide with the Mekong's annual monsoon 
pulse.
    The Mekong supports the world's largest inland fishery, with 
approximately 2.6 million tonnes harvested annually from the Lower 
Mekong Basin. By some estimates, this amounts to close to 20 percent of 
the world's freshwater fish yield. At first catch, the Mekong's wild-
capture fisheries have an estimated value of US$2-3 billion. By the 
time fish-based products have been transported, processed, and marketed 
to the final consumer, the fish are estimated to be worth between 
US$5.6 and $9.4 billion. In comparison, although the Mississippi River 
is nearly as long as the Mekong, its commercial fishing generates only 
0.1 percent of the Mekong's first-catch fish value. The revenues 
generated from wild-capture fisheries and fish trade make a significant 
contribution to the Gross Domestic Product (GDP) of each Mekong 
country. Eight percent of Lao's GDP and 16 percent of Cambodia's GDP 
can be traced to fisheries.

                             FOOD SECURITY

    Fish are extremely important to food security in the Mekong Basin. 
Fish consumption in mainland Southeast Asia far exceeds most other 
places in the world. Per year, the average person in the Lower Mekong 
Basin eats 56.6 kilograms of freshwater fish products. This is over two 
times the average total fish consumption in Europe and America. In 
every Mekong country fish are the most important source of animal 
protein. Although the amount of animal protein from fish varies--from 
an average of 60 percent in Vietnam to as high as 79 percent in some 
Cambodian villages and 78 percent in the Khong district of Lao--it is 
well-established that fish protein is important to food security 
throughout the region. Fish are also an essential source of vitamins 
and minerals, helping to ward off the nutritional deficiencies that are 
sadly still too common.
    Fisheries are not the only important food source provided for by 
the Mekong. The Mekong River also supports a productive agricultural 
sector. The deposition of rich alluvial silt on the floodplains during 
the wet season allows for highly productive floodplain agriculture. The 
Mekong Delta in Vietnam--one of the most densely populated areas on 
Earth, and one of the most productive, is known as the rice bowl of 
Vietnam. The Delta produces upward of 16 million metric tonnes of rice 
annually, enough to feed about 77 million Vietnamese for a year. The 
Delta also supports highly productive shrimp farms, orchards and market 
gardens. Floodplains throughout the Mekong Basin allow for highly 
productive wet season rice farming with a minimum of artificial 
fertilizer or pesticides. In addition, many Mekong residents grow 
vegetables on the riverbanks in the dry season, which are an important 
source of income and food.

                          MEKONG UNDER THREAT

    Yet this beautiful, dynamic and thriving river system is under 
threat. China is building a cascade of eight dams on the Upper Mekong 
in Yunnan province. Four of these projects have already been completed, 
and at least two more are under construction. The projects are being 
developed without any consultation with downstream countries and 
without any publicly available studies on their potential downstream 
impacts. Limited environmental impact assessments have only recently 
been made available within China for some of these projects, although 
only after the dams have now been built, and there has been no 
comprehensive assessment of the cumulative impacts of these projects on 
the ecology and hydrology of the Mekong River in downstream countries.
    Academics have linked changes to the Mekong River's daily hydrology 
and sediment load since the early 1990s to the operation of the Upper 
Mekong dam cascade. Since the mid-1990s, communities downstream in 
Northern Thailand, Burma, and Laos have suffered from a loss of fish 
and aquatic plant resources, which have impacted local economies and 
livelihoods; and since the second project, Dachaoshan, was completed in 
2003, local people have been reporting a 50-percent decline in fish 
catch. They also report serious erosion downstream and significant 
fluctuations in river levels caused by dam operation. These impacts 
will be magnified greatly as the larger projects in the cascade are 
completed and their reservoirs filled. The upper Mekong dams will store 
water in the wet season for release in the dry season, causing 
significant changes to the lower Mekong's flow regime, and impounding 
crucial sediment that will no longer flow downstream to fertilize the 
floodplains.
    But China is not the only country with massive dam plans. Laos, 
which contributes about a third of the Mekong's flow, is undergoing a 
dam-building boom. In its bid to become ``the battery of Southeast 
Asia,'' the government has signed deals with foreign investors to build 
more than 50 dams on Mekong tributaries, and is considering 10 projects 
on the Mekong mainstream. Power from these projects would be sold to 
neighboring Thailand, Cambodia, and Vietnam. Laos already sells power 
to Thailand from eight hydropower projects. While not all of the 
proposed projects for Laos will move forward, those that do will have 
serious impacts on the health of the river ecosystem and the 
livelihoods of hundreds of thousands of Laotians who depend on rivers 
for fish, agriculture, water supply, transportation and other aspects 
of their lives.
    Vietnam also has plans to build up to 48 new dams by 2025, many of 
which are already under construction. Dam cascades are being built on 
two major Mekong tributaries, the Se San and Srepok Rivers, the impacts 
of which are being experienced by ethnic minorities living in Vietnam 
and by Cambodian villagers living downstream. Vietnam has paid no 
compensation to the tens of thousands of Cambodians living downstream 
who have been affected by the Yali Falls Dam and four other projects on 
the Se San River. Approximately 55,000 people have suffered from daily 
erratic water fluctuations, widespread flooding, illness due to poor 
water quality, loss of riverbank gardens, and diminished fish stocks. 
Dam-induced flooding has killed at least 39 people. While the 
downstream impacts were acknowledged by the Vietnamese Government in 
2000, there has been little progress in addressing these impacts.
    Cambodia has also committed to an extensive domestic hydropower 
development program, financed with the support of the Chinese 
Government and facilitated through the technical expertise of Chinese 
construction companies. To date, deals have been reached on five major 
hydroelectric projects outside of the Mekong basin, and at least 9 dams 
in the Mekong Basin are being studied. In justifying its hydropower 
program, the Cambodian Government claims it is trying to balance the 
need for environmental and social protections against the need for 
electricity to support its economic development. Civil society groups 
in Cambodia, however, have expressed concern over the loss of 
Cambodia's natural heritage and questioned the approval process, which 
has been conducted behind closed doors without the participation of 
local communities and other concerned stakeholders.
    Thailand, meanwhile, has faced such huge opposition to dam 
construction within its borders that it is looking to import 
electricity from neighboring countries rather than face the inevitable 
battles that would occur were it to propose additional dams in Thai 
territory.

                THE REGIONAL PLANNING AND POLICY CONTEXT

    I want to now discuss the regional planning and policy context and 
how this affects water resources development in the Mekong Basin. As 
this committee would be aware, the Mekong region's political context is 
rather challenging. Laos and Vietnam are still ruled by one-party 
Communist regimes. Thailand's democracy has been under repeated attack 
the past few years, and Cambodia, while theoretically a democracy, has 
been ruled by Hun Sen for the past 25 years. Burma, meanwhile, 
continues to suffer under the rule of a military dictatorship.
    The Mekong River Commission (MRC) is a river basin management 
organization directed by the governments of Cambodia, Laos, Thailand, 
and Vietnam. Significantly, China is not a member of the MRC. Today the 
agency survives on international donor aid from the World Bank, 
Australia, Denmark, Finland, France, Japan, Sweden, and the United 
States, amongst others. The MRC has struggled over the years to define 
its role in managing the Mekong Basin since it has no real 
decisionmaking authority over government development plans, and since 
the 1995 Mekong Agreement, which acts as the organization's 
Constitution, does not allow any government or entity to veto another 
government's plans for development on its portion of the river. 
Therefore, the MRC's role has been relegated to one of coordination 
amongst member countries, as well as conducting important research and 
data management activities. In recent years, the member governments 
have been pushing for the MRC to take on more of a role as a river 
basin development organization, rather than a river basin management 
organization, with serious consequences for how the organization is 
responding to plans for regional developments. I will come back to the 
MRC below.
    While on paper some of the national laws regarding water resources 
development in the region are somewhat progressive, influenced by donor 
agencies such as the World Bank and Asian Development Bank, there is a 
great gap between policy and practice.
    In Laos, where the lion's share of dams are being planned, laws and 
policies surrounding hydropower development have improved over the past 
few years, but the country still lacks an overall planning process for 
hydropower development. Hydro concessions, including those on the 
Mekong mainstream, seem to be given out to any interested developer on 
a first-come, first-served basis, with little apparent concern for 
basin planning processes or the reputation of the company involved.
    Many Lao laws, regulations and policies contain important 
provisions to ensure participation, consultation, information 
disclosure, compensation and resettlement with livelihood restoration 
for affected communities. However, in practice, these provisions are 
often not followed, or are implemented on an ad hoc, case-by-case basis 
depending on the will, expertise and resources of the environmental and 
social consultants and the dam developer. The government's 
environmental regulator, the Water Resources and Environment Agency, 
lacks the authority, staff and resources to comprehensively review the 
significant number of proposed hydro projects and monitor them during 
construction and operation to ensure compliance with Lao laws and 
regulations. Decisions about whether or not to proceed with a project 
appear to be made exclusively the Ministry of Energy and Mines and the 
Ministry of Planning and Investment.
    The situation is similar for Cambodia. While Cambodia on paper has 
a number of strong laws that should safeguard the environment and 
ensure adequate protection for affected communities, in practice their 
effectiveness is limited due to inadequate resources and, on occasion, 
institutional disincentive. Enforcement of Cambodia's laws is very 
weak. For example, even though Cambodian law requires an EIA to be 
completed for a dam project before approval, in reality a few dams have 
recently been approved apparently without an EIA. Cambodia still lacks 
any law governing resettlement of populations. And the endorsement by 
senior Cambodian politicians of extensive hydropower development plans 
has signaled to the government's bureaucracy that these projects should 
be pushed through.
    A similar situation exists in Vietnam, where the Ministry of 
Industry and Trade makes decisions on projects before the Ministry of 
Natural Resources and Environment (MONRE) has appraised their 
environmental and social impacts and mitigation plans. The Vice 
Minister of MONRE, Nguyen Thai Lai, was recently quoted in the Saigon 
Times as stating that ``In reality, our current appraisal procedures 
face many obstacles, because investors only send their project 
documents to MONRE for appraisal after they were already approved by 
the Ministry of Industry and Trade. . . . Mitigation plans may either 
be neglected or poorly presented.'' For example, in the case of the 
massive Son La Hydropower Project being built in the North of the 
country, which is displacing more than 91,000 people, the final 
approval of the project's EIA occurred in 2007 while formal 
construction started in 2005.
    Civil society groups and energy analysts have also questioned 
Thailand and Vietnam's power development plans, which heavily promote 
the development of new large-scale electricity generation plants, such 
as fossil-fuel fired power stations and hydropower dams, and that are 
increasingly locking the region into a centralized electricity supply 
model. They claim that future electricity demands are overestimated, 
and that the potential that investment in energy efficiency measures, 
renewable energy, and decentralized energy options could play are 
downplayed, especially in the more industrialized cities of Thailand 
and Vietnam. They argue that existing plans mostly serve the interests 
of the state-owned electricity utilities, energy companies, and the 
construction industry, rather than the needs of the regions' 
electricity consumers.
    The weak institutional and regulatory framework in the region has 
been compounded by changes to the regional financial investment 
environment for hydropower development. Traditional actors in 
supporting energy development in the region such as the World Bank and 
Asian Development Bank are becoming increasingly marginalized and 
instead, energy and construction companies from Vietnam, China, 
Thailand, and Malaysia are developing, funding, and building large 
dams. Armed with the support of private banks from their own countries 
and the promise of government guarantees through their export-import 
banks, these dambuilders are fast displacing the western corporations 
and multilateral banks that previously dominated the region's hydro 
scene.
    Thai and Chinese companies and financial institutions are becoming 
particularly prominent in developing hydropower projects in the region. 
While the Thai Exim Bank is an increasingly keen supporter of 
hydropower projects in the region, it does not have an environmental 
policy and its activities are generally unaccountable to civil society. 
Thai Exim Bank has not yet adopted the Common Approaches on Environment 
and Officially Supported Export Credits, agreed upon by OECD countries, 
which outlines environmental and social standards for export credit 
agencies. Thai commercial banks are also willing financiers of major 
energy projects, but none have yet signed up to the Equator Principles, 
a set of voluntary environmental and social standards that have been 
adopted by more than 60 private banks around the world.
    The China Export-Import Bank, China's official export credit 
agency, is also becoming an important player in the Mekong region, as 
are a number of China's major State Owned Enterprises, often with the 
Bank's financial backing. China Exim is closely aligned with the 
strategic overseas interests of China's Government, on whose behalf it 
may offer concessional loans and export credits, especially in 
implementing China's ``Going Out'' policy. For example, Chinese 
companies are involved in developing four of the proposed Mekong 
Mainstream Dams: three in Laos and one in Cambodia, and Chinese 
companies are developing a series of hydropower projects on tributaries 
in Cambodia and Laos.
    Most of these new actors are yet to adopt international social and 
environmental standards in their operations, leading to poor planning 
processes and project outcomes.

                         MEKONG MAINSTREAM DAMS

    I now want to focus specifically on the plans for dams on the Lower 
Mekong Mainstream. Until now, the lower Mekong mainstream has remained 
free-flowing, one of the last great river basins of the world to be 
relatively unaffected by massive dams and diversions. Yet since mid-
2006, Thai, Malaysian, Vietnamese, Russian, and Chinese companies have 
been preparing detailed studies for a cascade of 12 large hydropower 
dams on the Mekong River's mainstream. Eight of the dam sites are in 
Laos, two are in Cambodia, and two are on the Thai-Lao border. Most of 
the power generated would be sent to energy-hungry cities in Thailand 
and Vietnam.
    In total, the dams would turn about half of the river between 
Northern Laos and Central Cambodia into reservoirs that, according to 
official estimates, would require the resettlement of at least 88,000 
people.
    In order to assess the implications that this cascade of dams would 
have on the Mekong River's ecology and economy, the Mekong River 
Commission (MRC) commissioned a Strategic Environmental Assessment 
(SEA) of the proposed mainstream dams. Conducted over a period of 15 
months, the SEA team has just delivered its final report to the MRC 
Secretariat. The Assessment was carried out by an Australian consulting 
company, the International Centre for Environmental Management, and 
comprised a series of studies, intensive program of consultations, and 
detailed expert analysis of the issues associated with developing 
hydropower on the Mekong mainstream. As such, the Strategic 
Environmental Assessment represents the first ever comprehensive 
cumulative impact assessment of dam construction on the Mekong 
mainstream, helping to provide a broader understanding of the costs and 
benefits involved with building mainstream dams.
    The SEA highlights the significant environmental, economic and 
social impacts the dams are expected to have, while also warning of 
skewed cost benefit distribution likely to occur. The SEA warns that 
the decision to move forward with just one dam alone would result in 
permanent and irreversible changes to the sustainability of the river 
system's productivity, which in turn would impact millions of people 
who rely on a healthy river for their livelihood and food security.
    The following are some of the key impacts mentioned in the SEA's 
Impact Assessment:
    Altering the Flow and Nature of the River: The dams would transform 
66 percent percent of the length of the Lower Mekong into a series of 
stagnant reservoirs and sections of rapidly fluctuating water flows 
downstream of the dams. These changes would irreversibly change the 
natural flow of the river.
    Impacts to Fisheries and Food Security: The dams would block vital 
fish migration routes, disrupt flood pulses, reduce wetlands, and 
change habitat necessary for the Mekong fisheries. These changes would 
result in significant fishery losses of between 700,000 to 1.4 million 
tonnes, which is estimated to be worth between US$476 million and 
US$956 million. In turn, the livelihoods and food security of millions 
of people would be impacted, with Cambodia expected to suffer the most. 
No mitigation technology currently exists which could effectively 
mitigate the impacts to the Mekong fisheries. Reservoir fisheries would 
also not be able to compensate for the loss of capture fisheries and 
would produce at best one-tenth of the lost capture fisheries 
production.
    Threats to Aquatic Biodiversity: Through changes to the river's 
morphology, flow and aquatic habitat, the immense biodiversity of the 
Mekong River would be at risk. More than half of the recorded fish 
species in some zones would be lost. In addition, important iconic and 
critically endangered species, such as the Irrawaddy dolphin and the 
giant Mekong catfish, would likely be driven to extinction.
    Terrestrial System Changes: The Mekong dams would have a major 
impact on terrestrial ecosystems and agriculture due to areas of 
inundation. Nearly half of the Lower Mekong River's land and forested 
areas is located in recognized Key Biodiversity Zones, as well as in 
National Protected Area and Ramsar sites. The dams will inundate 
important wetlands and river channel areas and impact terrestrial 
habitat for fauna and flora. Transmission lines and access roads would 
further alter the landscape.
    Lost Riverbank Gardening: More than half of the Mekong's riverbank 
gardens would be inundated by the Mekong dams and damaged by daily 
water fluctuations. This would result in lost income generation of 
between US$18 million to US$57 million, while also reducing household 
vegetable consumption. The households that would be hardest hit are 
those located in Northern Laos.
    Mekong Delta Instability: The reduction of sediment flow in the 
Mekong River would have serious consequences on the transport of 
important nutrients which help to fertilize Cambodia's floodplains and 
Tonle Sap or Great Lake system, along with the Mekong Delta in Vietnam. 
These impacts in turn would affect the stability of the Mekong Delta 
through impacts to inland and coastal fisheries, increased saline 
intrusion, reduced agricultural productivity, and destabilizing the 
river channels and coastline of the Mekong Delta.
    Livelihood, Culture and People: The livelihoods and food security 
of more than 40 million people who depend on the Mekong River's rich 
fisheries would be undermined through the construction of the Mekong 
Mainstream Dams. Furthermore, impacts to agricultural land, compounded 
with climate change impacts, could further reduce food security in the 
region. By changing traditional ways of living, the dams could lead to 
increased poverty and difficulty in meeting the Millennium Development 
Goals.
    What is of even greater surprise is the findings of the SEA team 
that the economic benefits of the projects would accrue mostly to the 
private developers and contractors building the projects, and that the 
projects would have relatively little impact on power supply for 
Thailand and Vietnam, the two major consumers of the electricity from 
these projects. They would have only a minor impact on electricity 
prices for Thailand and Vietnam and would generate the equivalent 1 
year's demand growth for the lower Mekong Basin. Taken in this context, 
the tradeoffs are enormous in the proposition to dam the mainstream, 
since the impacts would be massive, and yet the projects themselves 
would not contribute significantly to the region's energy security.
    The SEA concludes that the mainstream dams have the potential to 
create international tensions within the lower Mekong Basin due to the 
extensive impacts from the scheme, that many of the risks from the dams 
cannot be mitigated at this time, that there still remain critical gaps 
in understanding about the river ecosystem, that there are many 
substantial gaps in governance in the region, and that the governments 
lack capacities in personnel and skills to manage the projects. These 
findings lead the SEA team to recommend that decisions on mainstream 
dams be deferred for 10 years, and that this period of time be used to 
examine alternative nondam options for generating electricity from the 
Mekong Mainstream, as well as to improve the understanding of the river 
basin's ecology and potential impacts of the projects in order to make 
a decision about whether the tradeoffs are manageable or not.
    The question now facing the region's governments and the Mekong 
River Commission Secretariat is whether they will adopt the 
recommendations of the SEA. Unfortunately, the writing on the wall is 
not good. While the SEA final report was delivered to the Commission in 
August, it has yet to be released to the public. We have heard from 
some sources that the MRC--because it does not like its conclusions--is 
attempting to distance itself from the SEA recommendations and to move 
forward with some of the dams.
    Indicative of the lukewarm response of the MRC to the report is 
that the latest draft of the Basin Development Plan, the main planning 
instrument developed by the MRC to coordinate river basin developments. 
The plan's latest draft makes little mention of the Strategic 
Environmental Assessment, and instead recommends that the six dams 
planned for the cascade north of Vientiane go forward. This strategy 
(along with the other options) is now being discussed among the four 
Mekong governments and an agreement should be made by the end of the 
year. The MRC is also pushing for the regional approval process to 
begin on the planned Xayaburi dam on the Mekong mainstream in northern 
Laos, which is the project at the most advanced stage of planning. The 
Xayaburi dam would displace thousands of people in Laos, disrupt an 
important fish migration route and cause the extinction of the 
critically endangered Mekong giant catfish by destroying one of their 
last natural spawning habitats. The MRC is pushing for the 
decisionmaking process on this first dam to start soon, despite the 
fact that the SEA report hasn't yet been released, considered by 
regional governments, nor incorporated into the Xayaburi EIA.
    Mr. Chairman, and Senators, this must not be allowed to happen.

                     THE ROLE OF THE UNITED STATES

    This brings me to the final part of my presentation: what can the 
United States do to avert disaster on the Mekong?
    As a first step, the U.S. State Department, in its role as a donor 
to the Mekong River Commission and to the regional governments, should 
push for the SEA report to be publicly released and endorsed by the MRC 
and member countries. The U.S. should help push for wide dissemination 
and public consultations to take place within the region around the 
SEA, ensuring that the needs and views of riparian communities are 
considered. The U.S. should also push for the SEA's recommendations to 
be followed, which means deferring decisions on mainstream dams for at 
least 10 years until the findings and recommendations provided by the 
SEA are adequately considered and implemented and informed 
decisionmaking can be guaranteed.
    The United States could contribute to this informed decisionmaking 
through offering the assistance of the U.S. Geological Survey in 
generating more comprehensive datasets on the river's hydrology, 
ecology, sediment flows and water quality, and ensuring that this 
information is released in the public domain.
    The U.S. State Department should also continue to voice its 
concerns over the security risks these dams pose, and continue its work 
in highlighting the importance of regional food security and the 
important role fisheries plays in the region.
    We understand that through the Lower Mekong Initiative, the U.S. 
plans to spend around $22 million in 2010 on environment programs in 
Cambodia, Laos, Thailand, and Vietnam. Some of this money will be 
allocated for the new ``sister-river'' partnership which was 
established between the Mekong River Commission and the Mississippi 
River Commission on May 12, 2010. This partnership aims to improve the 
management of transboundary water resources, learning from experiences 
in the Mississippi River Basin. Money will also be allocated for the 
initiative's work on climate change, which is looking at developing 
regional strategies to address the impact of climate change on water 
resources, food security, and livelihood. Yet beyond this, very little 
is known about what the State Department is planning to do with its 
Lower Mekong Initiative and Mississippi-Mekong River Partnerhsip. We 
would appreciate the Foreign Relations Committee's help in pushing the 
State Department to be more transparent about their engagement with the 
Lower Mekong countries and consult with NGOs in the U.S. and the 
region.
    Finally, we believe that the U.S. Government could play an 
instrumental role in providing technical assistance and support for the 
development of sustainable energy options for the region. Through 
providing support and training for better energy planning processes 
such as integrated resources planning and strengthening electricity 
regulators, coupled with technical assistance and startup funds for 
investment in energy efficiency and clean renewable energy sources, the 
United States could play an important role in pushing for a clean 
energy future for the Mekong region, allowing the Mekong River Basin to 
be preserved to allow for the security and continuity of future 
generations.
    Chairmen Webb, thank you again for the opportunity to contribute to 
this important debate.

    Senator Webb. Thank you very much, for your testimony, Ms. 
Imhof.
    And welcome, Ms. Chungyalpa.

STATEMENT OF DEKILA CHUNGYALPA, DIRECTOR FOR THE GREATER MEKONG 
          PROGRAM, WORLD WILDLIFE FUND, WASHINGTON, DC

    Ms. Chungyalpa. Thank you, Chairman Webb, Ranking Member 
Inhofe, and members of the subcommittee, for having me testify 
today.
    My name is Dekila Chungyalpa, and I'm the director of the 
Greater Mekong Program for the World Wildlife Fund.
    For almost 50 years, WWF has been working to protect nature 
all over the world. Today, we are the largest international 
conservation organization, with presence in over 100 countries.
    WWF has been working in the Mekong for almost three 
decades. The region is a treasure trove of biodiversity. Over 
1,000 new species were discovered between 1997 and 2007--one 
decade alone. The Mekong River is the second most biodiverse 
river in the world, with over 1,300 species of fish. It is home 
to four of the top giant freshwater species; among them, the 
giant Mekong catfish, known to be as long as 9 feet.
    The Mekong is the world's largest inland fisheries, 
accounting for up to 25 percent of global freshwater catch, 
worth up to $7 billion annually. It provides livelihoods for at 
least 60 million people, and is the main source of protein for 
the majority of people living in this basin. This river is not 
simply a waterway. Its unique combination of waterflow, 
sediment, nutrients, fish species, and connectivity are what 
make it so spectacular. It is a living ecosystem, and it is 
still healthy and intact, compared to most of the large rivers 
in the world.
    However, this may not be the case for long. A combination 
of large-scale hydropower in the Mekong mainstem, climate 
change impacts, especially in the delta, and watershed 
degradation, are all making the region much more vulnerable to 
environmental, economic, and, ultimately, political insecurity. 
The most urgent threat, as you've heard, that the Mekong River 
faces is that of large-scale hydropower in its lower mainstem.
    As you noted, yourself, Senator, in the Upper Mekong, China 
has completed building the Xiaowan Dam, which has 10 times the 
reservoir capacity than its three existing dams--that is, 10 
cubic kilometers, one--if you can just imagine it, 10 cubic 
kilometers--and is in the process of building an even larger 
reservoir. This, of course, gives China significant leverage 
over the Lower Mekong countries.
    In the Lower Mekong, there are currently 11 dams in 
different planning stages of development on the mainstem, with 
one in Sayabouly, as my colleague just mentioned, in northern 
Laos, which, just yesterday, was notified to the Mekong River 
Commission by the Lao Government. This is the first time the 
process
of notification will actually be enacted by the Mekong River 
Commission.
    Almost 50 percent of the fish species in the Mekong are 
migratory and travel long distances to spawn. Dams on the 
mainstem would prevent them from doing so. One dam alone on the 
mainstem, such as Sayabouly, would cause the extinction of many 
wild populations, including the Mekong giant catfish.
    The Vietnam portion of the Mekong Delta is home to 17 
million people and contributes more than 50 percent of 
Vietnam's staple food crops. Reduction of sediment trapped by 
dams upstream would mean the delta's nutrients are no longer 
able to be replenished, threatening the very source of the 
country's wealth and security.
    WWF is not antidam. We recognize the aspiration of greater 
Mekong subregion governments to follow the growth strategies 
that were also followed by the United States and other 
developed nations. We advocate for energy from sustainable 
hydropower plants placed on suitable tributaries of the Mekong 
River. In collaboration with the Asian Development Bank and the 
Mekong River Commission, and with support from USAID's own ECO-
Asia program, we are currently developing a basinwide 
sustainability assessment tool that identifies tributaries that 
are most important, in terms of fish migration routes in the 
Mekong.
    WWF has also identified 70 financial institutions that have 
invested in Mekong hydropower projects. These include five 
major U.S. institutions: JPMorgan, Morgan Stanley, State 
Street, Dimensional Fund Advisors, and Fidelity Group. 
Coincidentally, tomorrow in Bangkok, WWF, along with--Oxfam, 
Proparco, and the World Bank, are hosting a Hydropower 
Financing summit. It will explore the risks of hydropower 
financing on the Mekong mainstem. We have 30 confirmed 
participants from the banking sector, including Morgan Stanley. 
WWF hopes the summit will initiate a basinwide dialogue on 
sustainable hydropower planning and placement on the Mekong 
mainstem.
    I'd like to talk about two other related challenges. The 
Mekong Delta is one of the world's three most vulnerable deltas 
to climate change. Current projections state that the most 
likely outcome is a 1-meter rise in sea level by the end of 
this century. That would submerge one-third of the Mekong 
Delta. Adding dams to this equation limits the Delta from 
replenishing itself, just as sea-level rise begins to eat away 
at the coast and saline intrusion destroys productive lands.
    Already we are witnessing erratic changes in flood 
patterns. Without significant steps to alter the course we are 
on, cross-border migration, breakdowns of roads and 
infrastructure, and the resulting humanitarian challenges, 
could create major security issues in the region.
    The governments are fully aware of the potential for 
conflict caused by climate change. It is not uncommon for them 
to send military representatives to regional workshops on 
climate change.
    I was in New York City yesterday to meet with the Thai 
Minister of the Environment, His Excellency Suwit Khunkitti. He 
asked us to meet with him to discuss new solutions for 
environmental problems in the region. He said ``If we lose the 
forests, our water source is broken. If we lose our water, our 
lifecycle is broken. If our life cycle is broken, our economies 
and our communities are broken. If we lose our forests, we lose 
everything.''
    The foundation of the Mekong River is its watersheds. It is 
the forests that regulate the supply of waters to rivers, that 
absorb carbon, that buffer the region from climate change, and 
that harbor important biodiversity. Deforestation continues 
unabated in many parts of the region. Without a regional 
mandate and shared vision of sustainable development for the 
Mekong region, these combined challenges will undermine the 
well-being of the people and the development aspirations of the 
Mekong countries.
    His Excellency has raised a new idea. He would like the 
region to consider a Mekong Forest Commission, an agreement 
among the Lower Mekong countries to protect, conserve, and use 
commonly identified forests and critical watersheds in a 
sustainable manner, and is willing to champion this idea among 
his peers.
    Recent U.S. engagement has had a very positive impact on 
the Mekong region, not least of which is a renewed will to work 
on freshwater issues on a regional scale. A significant 
inspiration for this has been the two visits made by Secretary 
Clinton. Furthermore, the United States has demonstrated its 
long-term commitment to the region's stability through the 
State Department's Lower Mekong Initiative. The U.S. Government 
can continue to create long-term security in the Mekong region 
and call for a moratorium on the approval of mainstem dams to 
carry out a full assessment of the risks from such development, 
including the Sayabouly Dam in Laos.
    The U.S. Government should advocate the Mekong River 
Commission procedure that includes notification, prior 
consultation, and agreement, and, most importantly, monitor the 
procedure to ensure that a rigorous and transparent assessment 
is made, using all available scientific and expert analysis of 
the impacts of this particular dam.
    The U.S. Government can support the full recognition and 
endorsement of the 1995 agreement of the Mekong River 
Commission and bolster its authority to better manage and 
preserve the Mekong's water resources. We ask that the U.S. 
Government encourage a fair and meaningful dialogue with China.
    The Prime Ministers of the Lower Mekong countries have 
recently formally invited China and Myanmar to join the MRC. We 
are given to understand that Myanmar will actually accept the 
invitation. However, China has yet to respond. However, if the 
freshwater biodiversity fisheries and future of the Mekong 
River are to be sustained, a whole-of-basin approach must be 
attempted. As one of the largest global donors to multilateral 
development banks, the U.S. Government can demand that they 
take a whole-of-basin approach on hydropower, especially given 
their own mandate for poverty reduction and the importance of a 
free-flowing Mekong to millions of people.
    The U.S. Government can also promote green science-based 
solutions. The Lower Mekong Initiative has developed a modeling 
system for climate change, called ``Forecast Mekong.'' It helps 
the Vietnamese Government analyze adaptation to sea-level rise, 
and emphasizes sustainable solutions rather than stopgap 
measures, such as building more dikes and walls. The U.S. 
Government should continue to do so, but, more importantly, 
invest in and provide incentives for environmentally sound 
infrastructure development.
    And finally, we ask that the U.S. Government call for a 
regional agreement on sustainable use and development of 
natural resources in the Mekong region. Harnessing the 
political will demonstrated by His Excellency Khun Suwit 
through a Mekong Forestry Commission may be just the right 
place to begin.
    Chairman Webb, thank you once again for having me testify 
today.
    For more details on any of these points, please refer to my 
written testimony.
    WWF strongly urges the U.S. Government to continue to play 
an empowering role in the region and to support ecosystem-based 
approaches for a climate-resilient and free-flowing Mekong 
River.
    Thank you.
    [The prepared statement of Ms. Chungyalpa follows:]

   Prepared Statement of Dekila Chungyalpa, Director, Greater Mekong 
              Program, World Wildlife Fund, Washington, DC

                              INTRODUCTION

    Chairman Webb, Ranking Member Inhofe, and members of the 
subcommittee, thank you for having me testify today on the challenges 
to water resources and security in Southeast Asia. My name is Dekila 
Chungyalpa, and I am Director of the Greater Mekong Program of the 
World Wildlife Fund.
    For nearly 50 years, WWF has been protecting the future of nature. 
Today we are the largest international conservation organization in the 
world. Our unique way of working combines a global reach with a 
foundation in science, involves action at every level from local to 
global, and ensures the delivery of innovative solutions that meet the 
needs of both people and nature. We currently sponsor conservation 
programs in more than 100 countries, thanks to the support of 1.2 
million members in the Unites States and more than 5 million members 
worldwide.
    Using the best available scientific knowledge and advancing that 
knowledge where we can, WWF works to preserve the diversity and 
abundance of life on Earth and the health of ecological systems. We do 
this by protecting natural areas and wild populations of plants and 
animals, promoting sustainable approaches to the use of renewable 
natural resources, and promoting more efficient use of resources and 
energy while maximizing the reduction of pollution. WWF is committed to 
reversing the degradation of our planet's natural environment and to 
building a future in which human needs are met in harmony with nature.
    The six countries flanking the Mekong River are often grouped 
together and are collectively known as the Greater Mekong Subregion \1\ 
(GMS). WWF has been present in the GMS countries (with the exception of 
Myanmar) for 30 years, working closely with all levels of government, 
as well as communities, development agencies and the private sector. 
This work has included not only traditional conservation issues, but 
has broadened the organisation's scope of work to include sustainable 
development. Given the significance of hydropower development to the 
region's ecosystems and natural resources, WWF is also an active member 
of the International Hydropower Association and the Hydropower 
Sustainability Assessment Forum. The Forum is developing a 
Sustainability Assessment Protocol, a tool to measure and guide 
performance in the hydropower sector. Its membership includes, among 
others, bilateral and multilateral development agencies and the Equator 
Principles \2\ Financial Institutions Group.
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    \1\ The GMS comprises Cambodia, Laos, Myanmar, Thailand, Vietnam, 
and Yunnan province in China.
    \2\ The Equator Principles refer to a financial industry benchmark 
for determining, assessing and managing social and environmental risk 
in project financing.
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                      THE MEKONG AND ITS RESOURCES

    WWF-US has identified the Greater Mekong Subregion as one of 19 
global priority places where we have chosen to focus our conservation 
efforts. This vast region contains irreplaceable treasures ranging from 
communities with rich cultural heritages to unique wildlife in 
spectacular natural landscapes. The region is home to almost 100 
distinct ethnic groups that are heavily dependent on the river and its 
natural resources for protein as well as livelihoods. It is also 
habitat to extraordinary biodiversity, including large mammals such as 
the Indochinese tiger, the Asian elephant, and the last remaining 
populations of the Irrawaddy dolphin.
    The region is defined by the Mekong River--the longest river in 
Southeast Asia. It unites 320 million people as it flows over 4,000 
kilometres starting in the Tibetan-Qinghai plateau, through China, 
Myanmar, Thailand, Laos, Cambodia, and Vietnam into the South China 
Sea. It also nurtures and sustains an extraordinary level of freshwater 
biodiversity and endemism. The Mekong River basin provides habitat for 
at least 1,300 species of fish, including four of the top 10 giant 
freshwater species of the world: Mekong giant catfish (Pangasianodon 
gigas), giant pangasius (dog-eating catfish) (Pangasius sanitwongsei), 
giant barb (Catlocarpio siamensis), and the giant freshwater stingray 
(Himantura chaophraya). By length, the Mekong is the world's richest 
waterway for freshwater biodiversity, fostering far more species per 
unit area than even the Amazon.
    The geomorphology of the Mekong is varied; from reservoirs of 
frozen water in its source area, to low depths and stretches marked 
with rocks and boulders, to enormous rapids and deep pools toward the 
end. At least 170 deepwater pools can be found in Cambodia and Laos 
alone, with the deepest measuring 80m in depth. In the dry season, when 
the Mekong often recedes and fish habitats on the floodplain disappear, 
deep pools play a crucial role, providing refuges for many of the 
Greater Mekong's fish species to feed and grow in. Moreover, the 
river's annual floods and flow patterns carry much needed sediments to 
sustain the agricultural productivity downstream.
    At least 150 of the river's fish species are migratory, and 50 of 
these are commercially important in the Mekong, particularly in the 
Tonle Sap, which provides up to 75 percent of Cambodia's inland 
fisheries. The Lower Mekong basin provides food security and 
livelihoods to over 60 million people, and fish is the main source of 
protein for these inhabitants, ranging from 42-51 kg per person per 
year \3\. It is estimated that approximately 2.8 million tons of fish 
and other aquatic animals are consumed each year, and an estimated 1.1 
million tonnes of aquaculture products are exported, making the Mekong 
the largest inland fishery in the world. Mekong fisheries yield 3.9 
million tonnes per year, accounting for 19-25 percent of inland catches 
worldwide and worth between $3.9 billion and $7.0 billion.\4\ The 
fisheries are heavily dependent on wild capture: aquaculture accounts 
for only 10-12 percent of production and it, too, depends on wild fish 
for feed. Preserving natural variations in river hydrology is important 
for sustaining high fish diversity; natural flood pulses are often what 
trigger fish to migrate to spawning habitats, migrating between distant 
habitats.
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    \3\ Mekong River Commission. 2010 ``State of the Basin Report: 
2010.'' Mekong River Commission, Vientiane, Lao PDR.
    \4\ Mekong River Commission. 2010 ``State of the Basin Report: 
2010.'' Mekong River Commission, Vientiane, Lao PDR.
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                          A REGION ON THE MOVE

    Of the six countries that comprise the GMS, three of these--China, 
Vietnam, and Thailand--are rapidly growing economies, while Cambodia, 
Laos, and Myanmar lag far behind in relative economic terms. The GMS is 
one of the fastest growing regions in the world, and the demand for 
energy, particularly in China, Thailand, and Vietnam is expanding. 
Rapid industrialization is pushing the development of hydropower in the 
Mekong Basin, including the proposed main-stem dams. In addition to 
fueling the fastest growing countries, hydropower development is seen 
as an avenue for poverty alleviation for Cambodia, Laos and Myanmar. 
The challenge facing the GMS governments is clear: they must sustain 
economic growth while simultaneously ensuring that the Mekong and its 
ecosystems remain healthy.
    The GMS initially was designed as a trade agreement facilitated by 
the Asian Development Bank, in order to strengthen connectivity and 
cross-border trade, and to integrate national markets. As such, it is 
really a grid of transport networks, often referred to as ``economic 
corridors.''
    The GMS Strategic Plan as it was originally conceived consists of 
305 planned projects worth $31 billion, broken down as follows:

   Roads and bridges--$7.6 billion
   Railways--$13.2 billion
   Ports and navigation--$2.6 billion
   Airports--$84 million
   Electricity grid--$338 million
   Gas pipelines--$1.3 billion
   Power stations--$4.8 billion
   Telecommunications--$29 million
   Tourism--$446 million
   Livelihood projects--$44 million
   Industrial estates--$1.0 billion

    While not directly mentioning hydropower, GMS clearly prioritizes 
development of a regional electricity grid and infrastructure that will 
move this forward. Given that the GMS is one of the fastest growing 
regions in the world, there is a correlating increase in the demand for 
energy. This demand for energy should be met with clean energy that 
does not aggravate climate change nor threaten the unique ecosystems 
and livelihoods of the GMS. Potential alternatives to mainstream dams 
should be explored, including carefully considered tributary dams, or 
other forms of renewable energy such as wind power or solar power.
    Currently, in the Upper Mekong, China has just completed building 
the Xiawan dam, which has a larger reservoir capacity (10 km\3\) 10 
times more than its three existing dams--Manwan, Dashwan, and Jinghong, 
(which add up to less than 1 km\3\) and is in the process of building 
an even larger reservoir (12 km\3\). This gives China significant 
leverage over the Lower Mekong countries. For example, China will be 
able to increase the mean monthly flow to Laos by 20 percent in March, 
the driest month of the year. However, these reservoirs are being built 
to produce cheap and reliable electricity for the Chinese market, and 
not to help agriculture, navigation or floods in the lower Mekong.

                     GROWING THREATS TO THE MEKONG

Hydropower
    While hydropower development has potential economic and greenhouse 
gas reduction benefits, it also brings about enormous costs. Hydropower 
dams fundamentally alter the river ecosystem, often with negative 
impacts to livelihoods and biodiversity. Each subsequent hydropower dam 
further diminishes the river's ability to naturally adapt to ecosystem 
impacts. The clock is ticking; there are currently 11 dams in different 
planning stages of development on the Lower Mekong main stem, with one 
in Sayabouly, northern Laos, on the verge of being notified to the MRC 
Joint Committee by the Government of Laos. Hydropower threatens to 
impact the Mekong and its ecosystems in three main ways:
    (i) Delta stability: The Vietnam portion of the Mekong delta is 
home to 17 million people, contributes more than 50 percent of 
Vietnam's staple food crops and is the source for 60 percent of fish 
production in Vietnam. This region provides food for 40 million people 
and contributes 27 percent of Vietnam's GDP. Given that more than 22 
percent of Vietnam's population is located in the Mekong Delta, the 
spillover effects of hydropower development will be even larger. 
Reduction of sediment trapped by dams would mean that the delta's 
nutrients are no longer being replenished, threatening the very source 
of the country's wealth and security. Furthermore, this would increase 
the vulnerability of the delta, limiting its ability to replenish 
itself and making it more susceptible to sea-level rise and saline 
intrusion.
    (ii) Fish diversity: In September 2008, a team of fish migration 
experts organized by the Mekong River Commission concluded that there 
is no evidence that fish passage facilities currently used on dams in 
other large tropical rivers can cope with the massive fish migrations 
and high species biodiversity found in the Mekong. The technologies 
used on high dams in North America and Europe were developed for a very 
limited number of species (5 to 8). In contrast, there are 150 migrant 
fish species in the Mekong, and biomasses are 100 times greater.
    (iii) Livelihoods: There are at least 50 commercially important 
migratory fish species in the Mekong River, representing 70 percent of 
the total catch. Over 75 percent of rural households in the Lower 
Mekong Basin are involved in fisheries, both for their own consumption 
and for sale. Any impact on the ecological balance of the river also 
threatens the sustainability of these aquatic resources that millions 
of people depend on. Dams in the main stem would impede migration of 
fish and other aquatic animals, potentially reducing productivity of 
the fishery by as much as 60 percent and compromising the livelihoods 
of millions of people.

Climate Change
    The Intergovernmental Panel on Climate Change has identified the 
Mekong Delta as one of the three most vulnerable deltas on the planet 
to climate change impacts. These impacts include sea-level rise, saline 
intrusion and more severe storms, which erode the coastline and 
undermine coastal ecosystems. Main-stem dams will block the sediment 
that builds the delta and with it the nutrients that feed the delta's 
immense. As sediment is trapped by dams, the reduction in the amount 
reaching the river mouth will decrease the capacity of the delta to 
replenish itself, making it even more vulnerable to sea-level rise, 
saline intrusion and erosion. With nearly a quarter of Vietnam's 
population located in the Mekong Delta, the combined impacts of the 
proposed main-stem dams and climate change will pose significant social 
and economic challenges to that country in coming years.
    The Mekong River is first and foremost an ecosystem. Anything done 
to impede its natural flow will also prevent it and the surrounding 
basin from adapting naturally to expected climate change impacts, 
including changes to average temperatures, water availability from 
precipitation and runoff, and sea level. Changes in temperature can 
affect rates of growth and reproduction for individual species and can 
also change species distribution and ecosystem processes such as 
nutrient cycling. WWF holds that climate change impacts will accelerate 
the extinction of some species given the high rate of endemism and 
habitat fragmentation found in the Mekong basin.
    Changes in the seasonal flow pattern in the Mekong River basin will 
strongly influence future species composition and ecosystem 
productivity. Changes in temperature and precipitation in the basin may 
also affect the very nature of the region's wetlands--vital aquatic 
systems that are used for rice cultivation and freshwater fisheries and 
help to mitigate floods and erosion. Sea-level rise will have 
significant negative impacts in the Mekong Delta region because of the 
delta's high population density, which is supported by productive 
wetlands and estuaries that are in turn maintained by naturally 
fluctuating water levels and input of fresh water from the river. These 
upstream inputs of freshwater deliver much-needed nutrients and 
sediments, which are critical for wetland soils to accumulate and 
prevent plants from being inundated.\5\ Sea-level rise and saltwater 
intrusion threaten to upset this natural balance and undermine the 
Delta ecosystem.
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    \5\ Mekong River Commission. 2010 ``State of the Basin Report: 
2010.'' Mekong River Commission, Vientiane, Lao PDR.
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    The anticipated human consequences of unmitigated climate change on 
the Mekong are hard to imagine. Projections across the Mekong basin 
show an array of climate change effects, including a potential sea-
level rise of a meter by the end of the century. If unaddressed, a 1-
meter rise in sea level could submerge more than a third of the Mekong 
delta, home for 17 million people and source of nearly half of Viet 
Nam's rice.\6\ Already, we are witnessing erratic changes in flood 
patterns in the Mekong Delta. Combined with sea-level rise, we can 
anticipate further breakdowns of roads and other infrastructure, 
leading to the increasing likelihood of economic and social 
instability. Even the more modest predictions of how the region and its 
communities, ecosystems and economies may be altered suggest that, 
without significant steps to reverse course, the humanitarian impacts 
of accelerating climate change in the Mekong are likely to present new 
security challenges for both GMS countries and the international 
community in the 21st century.
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    \6\ Institute of Strategy and Policy on Natural Resources and 
Environment (Viet Nam) 2009 ``Vietnam Assessment Report on Climate 
Change (VARCC).''
---------------------------------------------------------------------------
                         GEOPOLITICS IN THE GMS

    The Mekong countries are often seen as a cohesive bloc, largely due 
to the Greater Mekong Subregion (GMS). In realpolitik terms however, 
the GMS consists of nations that are very diverse culturally and that 
navigate strong bilateral tensions, as in the case of Thailand and 
Cambodia. The droughts experienced in 2010, and the subsequent 
assertions by Thailand that these may have been caused by dams on the 
Upper Mekong, have made it clear that lower Mekong countries are waking 
up to the decisions made by their Chinese neighbours to the north and 
are increasingly willing to take them to task. At the same time, 
Thailand and Vietnam have not acknowledged their own power development 
plans, which substantially rely on centralized hydropower development. 
In the context of this kind of political gridlock, it is not surprising 
that while the GMS has a designated Working Group on the Environment, 
it has so far not been successful in mainstreaming regional-level 
environmental planning and design into GMS's core business of economic 
growth and trade.
    Other regional forums exist, such as the Mekong River Commission, 
but it is handicapped by the fact that despite being an 
intergovernmental body created to promote sustainable management of the 
Mekong River, it is effectively limited to decisions made by the four 
lower Mekong governments through the Joint Committee and Council. China 
is so far only a dialogue partner and Myanmar is not included, thus 
leaving no constructive platform for dialogue on regionwide water use 
and management issues.
    In the past year, Vietnam and Cambodia have grown increasingly 
aware of the disproportionate burden that they will face as downstream 
nations if any of the Lower Mekong dams go forward. Not coincidentally, 
both countries share a history marked with famine, mass migration, and 
food insecurity. Add in the potential for political conflicts due to 
climate change impact scenarios in the regions, and it becomes clear 
why lower military departments from the lower Mekong governments have 
been known to attend WWF meetings and consult with us on water resource 
management and climate change.

       RECOMMENDATIONS: A SUSTAINABLE COURSE FOR THE MEKONG BASIN

    The decision to construct a dam on the main stem of the Mekong 
River will have permanent consequences and should be very carefully 
considered. In 1995, the four Lower Mekong countries signed an 
agreement that committed them to the sustainable development of the 
Mekong River. The proposed mainstream dams challenge this commitment. 
Prior to hydropower development, a comprehensive assessment of the full 
economic, social, and environmental costs and benefits in the Mekong 
Basin should be conducted. Approval of any of the main stem dams should 
be delayed until completion of this study. In addition, WWF offers the 
following specific recommendations for a way forward:
    (1) A 10-year delay in the approval of the mainstream dams would 
allow for a comprehensive cost-benefit analysis of their construction 
and operation.
    (2) The 1995 agreement of the Mekong River Commission should be 
fully recognized and endorsed, in particular the procedures for 
notification, prior consultation and agreement.
    (3) In collaboration with the Asian Development Bank (ADB) and the 
Mekong River Commission (MRC), WWF is testing Environmental 
Considerations for Sustainable Hydropower Development (ECSHD) in Sesan, 
Sekong, and Srepok tributary rivers in Cambodia. The project objective 
is to build a set of interventions into existing planning processes 
that will help move the Mekong countries towards adopting an agreed 
framework for sustainable hydropower development. The most recent 
advancement includes a river-basin-wide sustainability tool (R-SAT) 
developed in collaboration between ADB, MRC, WWF and support from USAID 
via EcoAsia. Merely developing the tool however does not mean it will 
be implemented. Therefore, promoting and financing similar approaches 
and the application of such tools is crucial.
    (4) One alternative to mainstream dams is tributary dams. These 
need to be considered as more feasible alternatives based on careful 
selection criteria and methodology. To ensure the overall ecological 
integrity of the Mekong Basin, some tributaries will need to remain 
free flowing to preserve the values of connectivity of the river from 
headwaters to the sea and to allow for migrant fish to continue to 
breed and support the livelihoods of local communities. WWF's Greater 
Mekong Program is using GIS-based tools to select free-flowing 
tributary candidates, and we promote the concept of free-flowing rivers 
to decision makers in these specific sub-basins.

                 ALTERNATIVE SOLUTIONS PROMOTED BY WWF

    WWF offers the following general recommendations for sustainable 
development in the GMS:
Take an ecosystem-based approach
    Confronting climate change is one of the greatest challenges of our 
time. How do we address such an overwhelming issue and where do we 
start? There has been much analysis and discussion, but few practical 
solutions are being proposed at the local level to help communities, 
the private sector, policymakers and planners to provide ecosystems the 
opportunity to adapt to a changing climate.
    A resilient ecosystem has the ability to withstand threats and 
systemic shocks and can renew and restore itself even if degraded. The 
best example is that of mangrove forests and coastal wetlands in India, 
which were able to absorb the floodwaters during the 2004 Asian 
tsunami. Unfortunately, restoration and preservation of coastal 
wetlands is one of the few established and well-known adaptation 
strategies. In the case of freshwater ecosystems, there is an urgent 
need to understand how to build both ecosystem and social resiliency 
and to identify adaptation strategies at a site level.
    WWF is learning in our various project sites that ecosystems will 
not react in a gradual manner to climate change impacts but will 
instead react rapidly and at multiple scales. To complicate this 
further, the speed at which these impacts are taking place is 
outstripping most public sector thinking, which consists of reflexive 
and short-sighted reactions, such as the call for sea walls and other 
inappropriate structural investments that are already appearing in the 
Mekong Delta. The challenge therefore lies in convincing existing 
national and regional institutions to adopt environmental and social 
resilience-building strategies across all economic sectors and 
political boundaries.

Engage the Finance Sector
    In 2009, WWF Greater Mekong Programme commissioned a report to 
investigate sources of funding that would allow the proposed dams to be 
constructed on the main stem. This study identified 12 project 
companies set to construct dams on the lower Mekong main stem and 70 
financial institutions that invested in the different stages of the 
feasibility study of these projects. For practical purposes, this list 
of financial institutions was then narrowed down to 28 banks:

----------------------------------------------------------------------------------------------------------------
                                                                               Equator    Signatory    Specific
        Financial institution             Country of origin      CSR policy  principles   to UNEPFI   policy on
                                                                               adopted   and/or PRI      dams
----------------------------------------------------------------------------------------------------------------
Agricultural Bank of China...........  China..................          No          No          No           No
Bank of Ayudhya......................  Thailand...............          No          No          No           No
Bank of China........................  China..................         Yes          No          No           No
Bank of Communications...............  China..................         Yes          No          No           No
Barclays.............................  United Kingdom.........         Yes         Yes         Yes           No
China Galaxy Securities..............  China..................          No          No          No           No
CIMB Bank............................  Malaysia...............          No          No          No           No
Guotai Junan Securities..............  China..................          No          No          No           No
HSBC.................................  United Kingdom.........         Yes         Yes         Yes          Yes
Industrial & Commercial Bank of China  China..................         Yes          No          No           No
JPMorgan.............................  United States..........         Yes         Yes         Yes           No
Morgan Stanley.......................  United States..........         Yes         Yes          No           No
State Street.........................  United States..........         Yes          No         Yes           No
Dimensional Fund Advisors............  United States..........          No          No          No           No
Bank of Tokyo-Mitsubishi UFJ.........  Japan..................         Yes         Yes         Yes           No
Sumitomo Mitsui Banking..............  Japan..................         Yes         Yes         Yes           No
Calyon (part of Credit Agricole).....  France.................         Yes         Yes          No           No
KBC Bank.............................  Belgium................         Yes         Yes          No           No
OCBC Bank............................  Singapore..............         Yes          No          No           No
UBS..................................  Switzerland............         Yes         Yes         Yes           No
Standard Chartered...................  United Kingdom.........         Yes         Yes         Yes          Yes
ANZ..................................  Australia-New Zealand..         Yes         Yes         Yes           No
ADB..................................  .......................  ...........  ..........  ..........  ...........
EXIM.................................  China..................         Yes          No          No           No
CRBC.................................  China..................   Not Known          No          No    Not Known
AmBank...............................  Malaysia...............   Not Known          No          No           No
Fidelity Group.......................  United States..........         Yes          No          No           No
RHB Bank.............................  Malaysia...............   Not Known          No          No           No
----------------------------------------------------------------------------------------------------------------


    WWF is currently hosting a Sustainable Hydropower Financing 
Conference, taking place on the 23rd and 24th of September 2010 in 
Bangkok, in order to facilitate open discussion of sustainable 
investment practices on the Mekong main stem. We have 30 confirmed 
participants from the banking sector involved in funding, insuring, or 
supporting the Mekong main stem dams, including Morgan Stanley.
    The conference has three objectives:
    1. To convince banks to finance sustainable hydropower projects in 
the Mekong. The summit incorporates a long-term approach by providing a 
solution--Sustainability Assessment Protocol, and the Environmental 
Considerations in Sustainable Hydropower Development--that financial 
institutions can use only to finance sustainable projects that are 
beneficial to the economy and people with minimal impacts on the 
environment.
    2. To build partnerships with key institutions in the financing 
sector, an essential and integral part of any investment project. WWF 
offers the summit as a solution-oriented event instead of what has 
usually been a charged dialogue between banks and NGOs. WWF hopes that 
financing institutions will continue to work with WWF in other 
infrastructure or investment project. There is an opportunity to create 
synergies between WWF and the financial institutions with respect to 
expertise, strength, and experience with sustainable development.
    3. To identify a bank to lead the charge in sustainable investing 
in the region. Often tokened as a ``lead arranger,'' such an 
institution could help WWF to reach its peers, and provide a good 
example of the benefits of sustainable investments. While some banks 
invited to the summit have had long histories of commitment to 
environmentally responsible financing, there are others who have not 
traditionally stood up for these types of issues. The summit is an 
opportunity to promote this practice and help those institutions 
interested in leading investment in sustainable hydropower development 
to become the champions.

Engage the Private Sector
    WWF is working across the Mekong region with key industry water 
users, led by the Coca Cola Company, to help develop a task force to 
explore water stewardship issues and the role of the private sector in 
wise water use, particular given the impacts of climate change in the 
delta where many of these industries are based. This will consist of a 
multi-sector network that can jointly share the latest science and 
information, apply appropriate adaptation strategies within their 
markets, and invest in sustainable resilience building for local 
communities, businesses and ecosystems In addition this group will also 
explore innovative financial mechanisms for adaptation and water 
conservation to safeguard future water supply for biodiversity and 
livelihoods.

Engage the Public Sector
    There is an urgent need for an integrated regional approach to 
natural resource management at policy and operational levels. The 
ongoing GEF 5 reforms offer an opportunity and could provide the 
resources required to make this happen. The countries of the region are 
willing take the bold step to commit a percentage of their GEF national 
allocations to a regional ecosystem based adaptation approach. We hope 
that such a strong regional signal demonstrates the lower Mekong 
governments' commitment to maintain the region's resilience for the 
benefit of its people, economies and biodiversity. Program components 
would include:

   Regionally integrated spatial planning that incorporates 
        biodiversity conservation and climate change, applied for the 
        sustainable management of priority landscapes in the GMS;
   Maintenance and restoration of critical ecosystems and the 
        services they provide in selected test sites in priority 
        landscapes by;
   Incentives to effectively manage biodiversity and carbon 
        values to strengthen adaptation capacity in priority landscapes 
        developed and tested;
   National and regional capacities improved for cooperation 
        and coordination for ecosystems management and sustainable 
        development;
   A discussion at the administrative level of the lower Mekong 
        governments on sustainable hydropower and the need for a free 
        flowing Mekong main stem.

                 AN IDEAL ROLE FOR THE U.S. GOVERNMENT

    The last 2 years have shown tremendous changes in the GMS, not 
least of which is a renewed will to work on a regional scale. A 
significant inspiration for this has been the two visits made by 
Secretary Clinton to the region. Furthermore, the U.S. Administration 
has substantiated its long-term commitment to the region's stability 
through The Lower Mekong Initiative; a partnership between the U.S. 
State Department and the governments of Cambodia, Laos, Thailand, and 
Vietnam to enhance cooperation on environment, health, education, and 
infrastructure development. In particular, two science-based approaches 
that are beneficial are:

--The sister river partnership between the Mekong River Commission and 
    the Mississippi River Commission allows the sharing of expertise 
    and best practices in areas such as climate change adaptation; 
    flood and drought management; hydropower and impact assessment, 
    water demand and food security; and water resource management.
--The establishment of the Delta Research and Global Observation 
    Network (DRAGON), and a new interactive, modeling system called 
    Forecast Mekong.

    This initiative creates the possibility of a strengthened lower 
Mekong bloc that is invested in regional win-win strategies rather than 
short term national interests that are unsustainable in the long run. 
Advancing similar relationships, as the United States has done with 
Vietnam, in the other lower Mekong countries will help make this a 
reality.
    Other ways that the U.S. Government could continue to strengthen 
these governments and to create long-term security in the Mekong region 
include:

   Call for regional cooperation on data gathering, analysis, 
        and sharing: Hydropower is a regional issue. Regional measures 
        must be put in place to ensure that the ecological products and 
        services upon which the development of this region depends are 
        not degraded or irreversibly lost, which requires a regional 
        approach to cost-benefit analyses. There are still large gaps 
        in knowledge in the region. For example, what is the value of 
        environmental flows and ecosystem services provided by the 
        Mekong River in monetary terms? Encouraging this kind of data 
        analysis and sharing among all the six countries is crucial. 
        This would also invite a stronger influence from academic 
        institutions and civil society on policy and decision making 
        processes.
   Promote green science-based solutions: The U.S. State 
        Department led Lower Mekong Initiative has developed a new 
        interactive modeling system for climate change impacts called 
        Forecast Mekong. It will help the Vietnamese Government better 
        understand and adapt to sea-level rise, emphasizing sustainable 
        solutions rather than stop-gap measures such as building more 
        dykes and walls. By promoting these types of science-based 
        approaches, the US Government can further the development of 
        green technological solutions in the Mekong region.
   Support strengthened governance and accountability with the 
        Mekong River Commission: The U.S. Government can support the 
        full recognition and endorsement of the 1995 agreement of the 
        Mekong River Commission; in particular the procedures for 
        notification, prior consultation and agreement for hydropower 
        dam development. More specifically, a moratorium on the 
        approval of mainstream dams should be established to allow the 
        full assessment of the risks from this development.
   Encourage a meaningful dialogue with China: Recently, the 
        four Prime Ministers of the Lower Mekong countries took part in 
        the Mekong River Commission Summit to celebrate its 15th 
        anniversary, giving the MRC a much higher profile than in the 
        past. China was formally asked to join the MRC by the Cambodia 
        government. It remains to be seen if they will. However, if the 
        freshwater biodiversity, fisheries, and future of the Mekong 
        River are to be sustained, a whole-of-basin and even-handed 
        approach on hydropower must be attempted.
   Call on multilateral development banks to take a whole-of-
        basin approach on hydropower: While the multilateral banks 
        wield less influence than they did in the past, they are still 
        very important to less powerful governments in the region. It 
        behooves them to take cumulative impacts of hydropower 
        development into consideration, particularly for the Mekong 
        River basin, where poverty reduction strategies must begin with 
        the well-being of the river. A critical place to start is with 
        the mainstreaming of sustainable development planning in all 
        subdivisions and in particular, the promotion of alternative 
        green energy over that of main-stem hydropower development.
      As one of the largest global donors to multilateral development 
        banks, the U.S. Government can call on them to mainstream what 
        their ``environmental arms'' develop and recommend. Often 
        times, conflicting mandates within different subdivisions of 
        the same institution are the bottlenecks to implementing 
        innovative environmental solutions and integrating a whole-of-
        basin approach to development.
   Call for a regional agreement on climate change resiliency: 
        Climate change will profoundly affect the Mekong River's 
        biodiversity, water resources, and economy, all of which in 
        turn will impact its people. National governments can only 
        respond to climate change at a local level. Given that the 
        impacts of climate change will be transboundary and has 
        significant implications for security, a regionally coordinated 
        response to climate change will be most effective. Guiding a 
        regional climate adaptation agreement that builds resiliency 
        for ecosystems, natural resources, biodiversity and most 
        importantly, local communities, would bring a more peaceful and 
        sustainable future for the Mekong region. One possible 
        opportunity is the current Global Environment Facility (known 
        as GEF V), which allows for a transboundary approach on 
        protecting the Mekong region's most unique ability to provide 
        for its people; the environmental services provided by the 
        Mekong River and its watersheds.

                               CONCLUSION

    Chairman Webb, thank you once more for the opportunity to offer my 
comments on the importance of recognizing the Mekong River as one 
ecosystem. Taking this whole-of-basin approach emphasizes the critical 
need to protect the Mekong River's ecological functions, of which the 
free-flowing nature of its main stem is most important, for a peaceful 
sustainable future of the Mekong region. WWF strongly urges the U.S. 
Government to continue to play an empowering role in the region and to 
support ecosystem based approaches for improving climate change 
resilience for the entire Mekong River basin.



    Senator Webb. Well, thank you.
    And thank all of you for your testimony today, both written 
and oral, and that will be considered by our staff in great 
detail after this hearing is over. We appreciate the time that 
you've taken to come here and be with us today.
    The first thing I would just say, after listening to you, 
is that it is profoundly disturbing in its implications that--
on a lot of different levels--environmentally, politically, 
culturally, strategically--in terms of this region, that we are 
not paying enough attention to this issue.
    And actually, Ms. Chungyalpa, when I was listening to you, 
one of the thoughts that went through my mind when you were 
talking about the enthusiasm on the climate change issue is, 
it's easy to get people to talk about climate change in the 
region, because there's no sovereignty dispute. You don't have 
to think about encroachment by another country, or the sorts of 
issues that are involved when we have to address the hydropower 
situation. The immediate reality of what could be happening 
with these--the construction of these dams, however, is 
extremely dangerous to the continuity of the region as it's 
existed for thousands of years. And it takes a little bit more 
of a push to get people in the region to discuss this issue.
    I know when I was in Vietnam in July, I found a real 
hesitation among even government officials to discuss this part 
of the problem, because it does go into the need for 
governments and the business sector to truly engage in coming 
up with some sort of a potential structure in which to address 
the problem.
    And it's one of our real challenges. One of the reasons I 
wanted to hold this hearing was to look at how do we help 
create an awareness of the immediacy, in terms of the 
seriousness of this problem? Quite frankly, the responsibility 
of the players, government, and business alike, who are more 
shortsighted and need to be addressing this is a way they 
perhaps don't want to.
    Let me start with this. And I'd like to hear all three of 
your thoughts. We have been working on this amendment, which we 
shared with you, that would go to ADB funding and, at the same 
time, as all of you have mentioned, in one form or another, 
there are other formulas that are taking place right now in 
order to finance these projects. There were several mentions of 
that. And China, particularly, is starting to finance its own 
construction. We saw, just a couple of days ago, China offered 
a $4.2-billion interest-free loan to Burma for mass hydropower 
projects: road construction, infrastructure, et cetera. So, how 
much good can we do with this amendment? How much can we affect 
the process? And what are your thoughts for, perhaps, other 
ways that we could go about it?
    And, Dr. Cronin, if you would?
    Dr. Cronin. Thank you, Senator.
    Well, I think the first thing is to raise the issue. And 
frankly, it won't be well--your amendment won't be that well 
received in Manila, at least by a lot of people in the Bank. 
But, it's essential to get a dialogue started on this. And 
there is an immediacy that needs to be addressed.
    One of the issues that concerns me is that if we--if the 
countries go ahead with these dams, you're talking about a 10- 
or 15-, even 20-year period when the river will be disturbed as 
the dams are built. And there is no one, you know, organizing 
or coordinating, or even strategizing, that I can see, about 
how to deal with the gap between when livelihoods are destroyed 
and food supplies are destroyed and when the benefits of 
electricity start to kick in. And so, that's an issue.
    And I mentioned--with regard to the ADB, I mentioned that 
there is a slippery slope of them getting involved in sort of 
being the little guy behind the elephants in the parade with a 
scooper--pooper-scooper--to clean up, if you will, after the 
damage is being done. And so, I would like to see us 
particularly weigh in on that issue and make sure--you know, 
that the dam--the Bank not go down that path.
    But, how to change the minds of the countries, and how to 
actually influence the Bank, is difficult. And in addition, as 
you just mentioned, the Banks are no longer central to this. I 
mean, this is all so-called ``public/private'' financing. 
Essentially, they're all commercial opportunities. And there's 
plenty of money around, apparently, to carry these projects 
out.
    But--so, the urgent issue remains, I think, to find ways to 
help the governments understand the consequences of what 
they're starting--what they're trying to--planning to do. And I 
think the ADB has a role--has an important role in that.
    Senator Webb. Thank you.
    Dr. Cronin. Thank you.
    Senator Webb. Ms. Imhof.
    Ms. Imhof. Thank you. Very good questions, of course, that 
you're raising.
    You know, China is now actually the world's largest dam-
builder and funder. We have been collecting data on how many 
projects it's funding and building globally. And I've actually 
lost count, but it's probably--at the last count, I believe it 
was over 140 dam projects, around the world, that China was 
involved in. So, it is a very significant challenge.
    I think--with the amendment that you've proposed, I think 
it's a very good amendment, in very strong language, and I 
think it's very important, because the ADB has been kind of the 
main supporter of hydropower development in the region until 
recently. And one thing that we are concerned about is, with a 
lot of the focus on the Mekong mainstream dams, that there will 
be a greater push for dam projects on tributaries of the 
Mekong. And we even, here at WWF, you know, advocating for some 
tributary development. And our experience with tributary 
projects, as I mentioned before, that they are also extremely 
damaging and should definitely be assessed on a case-by-case 
basis.
    So, I think that the amendment is an important signal. I 
would recommend that it apply to the World Bank and the Asian 
Development Bank.
    And the other thing that's important about it is, it refers 
to transmission infrastructure. And actually, the ADB is 
proposing to finance a transmission line in southern Laos that 
would enable a whole slew of tributary projects in southern 
Laos to go forward that currently aren't going forward because 
they don't have transmission infrastructure. So, I think it's 
an important signal that the U.S. Government is concerned about 
the transmission infrastructure that allows these projects to 
go forward.
    I think it would be really important for yourself and the 
committee to also push Treasury to actually implement the--
sorry--to actually pressure the ADB and World Bank to implement 
and adopt the kind of policy reforms that you refer to in the 
amendment--so, things like implementation of the World 
Commission on Dam Standards--because what we do know from 
experience--I mean, as you know, Treasury hates these sorts of 
mandated votes, because they say that it reduces their 
authority. I think that where it can be important is if 
Congress is really pushing Treasury to push for meaningful 
reform--policy reform at the institution, along the lines of 
what is in the U.S. legislation. So, I would really encourage 
you to press for that.
    In terms of what can be done about China, I think there has 
to be ongoing dialogue about Chinese financing overseas and 
China Export-Import Bank. I don't know if the U.S. Ex-Im Bank 
could play some kind of role in encouraging the China Eximbank 
to sign up to the common approaches adopted by the OECD on 
environmental and social impact assessment, lending in their 
operations. That might be one other role that the United States 
could play in encouraging China Exim to adopt international 
standards in its operations, and the same for Thai EXIM Bank, 
as well. And Thai EXIM, until now, has been very much neglected 
and kind of out of the loop, in terms of, you know, the 
international export credit agency community and looking at its 
standards of the projects it's financing.
    Senator Webb. Great insights. Thank you.
    Ms. Chungyalpa.
    Ms. Chungyalpa. Chairman, first, I'd like to respond by 
talking about climate change in the context of hydropower. 
Hydropower is often used as an example what green energy means. 
And we're really concerned, especially because it is posited in 
the Mekong as a solution rather than a big threat, in the 
context of climate change. So, climate change cannot be kept 
out of that dialogue, precisely for that reason.
    The other thing that we're very aware of is that climate 
change, in some sense, gives us an opportunity to talk about 
issues that most governments are unwilling to talk about 
publicly, and that includes hydropower. It actually allows us 
to indirectly bring up hydropower in--at very high levels, to 
make the point that if you actually dam the river, you are 
going to be basically creating maladaptation on the river, in 
the long term.
    Finally, as the U.S. Government has invested in the long 
term in sustainable development for this region, and if we are 
to save the river from hydropower, but then lose it to climate 
change, it is going to be a wasted investment. And I think that 
might be the broader context for climate change, and WWF's 
position on it.
    In terms of the ADB in particular, we applaud the language 
on the Asian Development Bank that was shared with us. The 
reality of the situation is, it's always about the economy. And 
in the case of the ADB, it's the economic arms that always win 
the battle over the environmental arms. What we have learned, 
sometimes in difficult situations, is that the Asian 
Development Bank might have arms that are willing to work on 
environmental sustainable solutions, might actually develop 
very innovative technological solutions, but, at the end of the 
day, they are going to be ignored by the other subdivisions of 
the Asian Development Bank. And maybe the most important role 
that the U.S. Government can play is to actually ask for 
mainstreaming of environmental sustainability, not just so it's 
side language in the Asian Development Bank's mandate, but 
actually mainstreamed within the mandate, especially when you 
consider that the mandate is about poverty reduction, not just 
in terms of large economic wins, but also at a household level.
    Senator Webb. Thank you.
    Ms. Imhof, you stated, in your testimony, that studies have 
shown that the planned dams would not contribute greatly to the 
region's energy security; they would have little impact on 
regional energy prices, and only generate the equivalent of 1 
year's demand for growth. What other energy alternatives would 
you suggest?
    Ms. Imhof. Thank you. I mean, the first thing is to look at 
the potential for expanding investment in energy efficiency, 
because there's huge potential. I mean, Thailand already has an 
energy efficiency program, but there is still huge potential 
for energy savings. And California is a great model of an 
entity. The State of California has managed to keep its power 
demand growth stagnant over the past 30 years, because of 
investments in energy efficiency. And the same goes for 
Vietnam, which doesn't have a strong energy efficiency program 
right now. And this is an area where I think there could be 
very good technology transfer between the United States and the 
regional countries.
    One of the other issues is that Thailand--energy analysts 
have shown that Thailand--the Electricity Generating Authority 
of Thailand, the main electric utility, has consistently 
overestimated power demand, so there is consistently a surplus 
of power in the Thai system. And this has been documented over, 
I believe, 10 or 15 years. So, there's an issue of where EGAT 
consistently says, ``We need more power. We need more power.'' 
And we sign--EGAT signs these agreements and then ends up--you 
know, the demand growth doesn't meet it. There's also been 
studies showing that there's significant potential for 
repowering of existing plants, so generating more electricity 
from existing plants. There's biomass potential from rice 
husks. And then there's, you know, renewable technologies. 
There's not a lot of wind potential in Thailand, but there's 
certainly solar potential, as well. So, there is definitely 
potential there.
    The biggest issue is really the kind of political and 
economic interests that are driving these sorts of projects. 
And there's very strong--for example, the developer of the 
Xayaburi Dam project, a Thai company called CH. Karnchang, has 
very strong political interconnections with the Thai Government 
and is a very large Thai construction company. So, there's more 
political interests that are driving--and economic interests--
that are driving the development of these projects, rather than 
actually the demand for power. I mean, there's still no study 
out there that actually says that this power is necessary to 
meet the region's energy needs.
    Senator Webb. Thank you.
    Dr. Cronin, in your written statement, you mentioned that 
China is already considering the diversion of some Mekong water 
to the Yangtze River to replenish water sent north----
    Dr. Cronin. Yes, sir.
    Senator Webb [continuing]. As part of the south-to-north 
diversion project. Where are they on this? And do we see that 
this is a serious plan? Because it certainly does go into what 
you would call water sovereignty----
    Dr. Cronin. Right.
    Senator Webb [continuing]. If they're taking water that 
historically would be going downstream, and diverting it to 
another place inside their own country.
    Dr. Cronin. Yes. Well, thank you. As in all things 
regarding Chinese decisionmaking on these kinds of sensitive 
political--geopolitical issues, they don't show their hand. 
These are rumors--and there's substance to them--that they are 
considering these projects. How far along they are is a big 
question. But, I think, in the longer term, the stark reality 
is that China does not have enough water. And, of course, 
China's going to try to transport--they're building canals to 
transport water over 1,700 kilometers, from the Yangtze River 
to the Yellow River, which is now running dry at the mouth 
during unusually dry seasons. And there's no way that China can 
keep growing the way it's growing and using water the way it's 
using it without resorting, ultimately, to some kind of water 
sovereignty--``water nationalism'' I would call it.
    So, the Indians are also very worried about projects--the 
plans that China has at least discussed or as--there is 
information about plans that China wants to dam the upper 
reaches of the Brahmaputra River in--I think it's in Tibet, 
actually. And the same kind of story, that if they bleed water 
away from the Brahmaputra River for their own use, then you've 
got the whole Bay of Bengal issue, for both India and 
Bangladesh.
    Senator Webb. The question occurred to me--Is there an 
international forum in which downstream riparian water rights 
could be considered with sort of decisional authority?
    Dr. Cronin. Unfortunately, no. And one of the problems with 
water rights is that, traditionally, countries that agree to 
negotiate over water rights and to--and countries that respect 
upstream/downstream rights, are talking about dividing shares 
of water: How much do you get, how much do we get? A good 
example is the Indus River Agreement between India and 
Pakistan. Essentially, they took five rivers and said to 
Pakistan, ``You get two, and India, you get three.'' And that's 
been a rather lasting agreement.
    But, the key issue with the Mekong is what we call the 
``flood pulse.'' That is the flood pulse is necessary for the 
aquatic life of the Mekong, as we know it now, and these 
extremes of wet and dry. And so, if the monsoon flood pulse is 
broken or, for instance, if the river is contained and the 
pulse effect is lessened, then you don't have the same amount 
of water going into the Tonle Sap Great Lake. When the--you 
know, the water comes roaring down the Mekong, and when it gets 
to about Phnom Penh, the river divides, and there's 
obstructions--the river can't take all the water, and so it 
backs up into the Tonle Sap Great Lake. And so, that's almost 
like a lung, you know, the expansion and contraction of that 
great lake is the--as they say, the nursery of Mekong fish. And 
so, you can't--if you interrupt the flood pulse that's a huge 
problem.
    But, there's no international law, that I know of, no 
regime that would, in fact, address an issue like the flood 
pulse. In other words, you have six countries sharing the same 
river, and any one country disrupts the river, there's an 
impact on everybody. And it's like the--almost like the 
prisoner's dilemma, you know--problem, where one person--if 
they all cooperate, they all benefit. If they don't cooperate, 
everyone loses.
    Senator Webb. Well, I thank all of you for your 
information, and analysis and advice. As I said, the 
implications of this are profound and have an immediacy to 
them. I think this hearing will help bring greater awareness, 
here and in other places, of the immediate seriousness of this 
problem. Hopefully we can move forward to some sort of a 
structure in which we can start having an impact on these 
issues. And I have to say, Ms. Chungyalpa, when I tell my 
brother that there's a 9-foot catfish in the Mekong River, 
he'll be on the next plane with his rod and reel. [Laughter.]
    Ms. Chungyalpa. It is on the verge of extinction. He must 
hurry.
    Senator Webb. Do this before the next couple of years, 
right?
    But, thanks again for taking the time to come and help 
educate us. We will continue to see if we can't help raise the 
awareness of this issue.
    Thank you.
    This hearing's closed.
    [Whereupon, at 4:03 p.m., the hearing was adjourned.]