In developing the benchmarking matrix for this project, International Rivers drew on a range of existing standards and guidelines. We reviewed Chinese domestic standards on hydropower development, Chinese government guidelines on overseas investment, and international guidelines, including:
- The World Commission on Dams
- The International Hydropower Association’s Hydropower Sustainability Assessment Protocol
- General policy standards created by the Equator Principles
- The International Finance Corporation’s safeguard policies
- Non-binding policy guidance such as the OECD Guidelines for Multinational Enterprises
- The Global Reporting Initiative
- Guiding Principles on Business and Human Rights.
The intention of the benchmarking matrix is not to set another global standard for policy or project performance. Rather, we define a set of indicator categories that will enable the measurement of individual company performance between company headquarters and the project site. The benchmarking matrix provides a tool to compare companies’ performance.
Three Indicator Categories
Based on these, three main indicator categories were defined:
Community and Labor Relations
In total there are 23 key performance indicators (KPIs), which fall across the three indicator categories (Environmental Management, Community and Labor Relations, and Risk Management). Some KPIs are qualitative and others are quantitative.
Because International Rivers has always placed equal importance on policy commitments and project performance, stage one of this study benchmarks Chinese companies across two dimensions:
The two dimensions allowed us to reveal areas within the Chinese overseas hydropower industry where project performance exceeded policy commitments, and implementation deficits where company policy commitments had little impact on the project.
Each KPI in the Environmental Management, and Community and Labor Relations indicator categories is scored out of four points, while each KPI in the area of Risk Management is scored out of two points. The benchmarking matrix therefore gives a stronger emphasis on the Environmental Management and Community and Labor Relations practices of companies.
Within the indicator categories, some of the KPIs in the project performance assessment are separated into sub-indicators, with scores assigned accordingly. However, the overall score per KPI will always be four (Environmental Management and Community and Labor Relations) or two (Risk Management). To determine a company’s result for each indicator category the scores are averaged. To determine the overall score, the average scores are added together to form a total score out of ten. Each company received a score for policy commitment and a separate score for project performance. Only the color ratings (good, fair and poor) are contained in this report. The final scores will be released after additional consultation is conducted.
As noted, this study considers both EPC and BOT companies. The applicable KPIs have been adjusted to reflect the differentiated responsibilities. For the EPC companies, Sinohydro International and Gezhouba, only 17 of the 23 KPIs are applied. Therefore EPC companies and projects (including Three Gorges EPC Murum Dam Project) were not assessed with respect to:
- EN4 (EIAs)
- EN5 (Compliance with Strategic Planning Instruments)
- EN10 (Environmental Flow Regimes)
- CL1 (Resettlement)
- CL2 (Social Impact Assessments), and
- RM3 (Transboundary Impacts).