Due to significant program growth in Latin America, Asia and Africa, and an increase in new hydropower projects, International Rivers has had opportunities to engage new players in the global hydropower industry, and advocate for leading international policies and standards to be adopted and implemented in hydropower development. The motivation for this project stems from our commitment to policy reform in the hydropower industry.
The decision to begin our global benchmarking project with the Chinese overseas hydropower industry is a reflection of its global strength and maturity, and the high level of interest within the sector in talking with international environmental NGOs. Since 2009, International Rivers has been engaging with Chinese hydropower companies – most of which are State Owned Enterprises (SOEs) – and monitoring their global environmental footprint. With Chinese government support since 2001 under the “Going Out” strategy, Chinese dam builders have emerged as one of the biggest players in the global hydropower industry. Chinese companies and banks are now associated with over 300 dams in 74 countries. Key markets for Chinese dam-builders are Southeast Asia, Africa and more recently, Latin America.
Many of the hydropower projects are located in areas with high environmental and social risks because the countries have low environmental protection requirements, weak human rights protections, and at times suffer from corruption. In these contexts, it is challenging for any company to construct projects that meet international standards. However, Chinese hydropower companies are committed to forging a positive international reputation despite working in these high-risk areas. This study is a timely reminder of the maturity and progress achieved by Chinese companies thus far.
- Understand Chinese hydropower companies’ policies and practices for managing environmental and social risks;
- Compare the environmental and social policies of Chinese hydropower companies and benchmark on the grounds of performance, noting areas of high performance in line with international standards and best practice;
- Rank the competitiveness of major Chinese hydropower companies on issues of management based environmental and social risk; and
- Provide constructive information to Chinese hydropower companies and the industry as a whole by identifying areas of high performance, as well as areas where performance can be improved.
Companies and Case Studies
The companies included for assessment are the seven main Chinese overseas hydropower companies. We conducted seven project case studies in total, for which fieldwork ranged from 5 to 14 days. The projects selected for each individual case study were chosen based on their ability to showcase all three indicator categories (Environmental Management, Community and Labor Relations and Risk Management). However, some companies had only completed a single project, and therefore the project choice was determined for us.
|Company Name||Case Project|
|Stung Atai Hydropower Project (120MW) in Cambodia (BOT)|
|Paute-Sopladora Hydropower Project (487MW) in Ecuador (EPC)|
|Stung Russei Chrum Hydropower Project (338MW) in Cambodia (BOT)|
|Lower Sesan 2 Hydropower Project (400MW) in Cambodia (BOT)|
|Nam Ou 2 Hydropower Project (120MW) in Lao PDR (BOT)|
|Coca Codo Sinclair Hydropower Project (1500MW) in Ecuador (EPC)|
|Murum Hydropower Project (944MW) in Malaysia (EPC)|
In order to better understand the company policies and implementation of Chinese hydropower companies, data was collected via desktop research, interviews and fieldwork. Due to the willingness of the individual Chinese hydropower companies to engage with international environmental NGOs, stage one of this benchmarking project has had over 80% company participation. To ensure that our analysis was transparent, we have continually updated the companies involved on our progress by sharing information collected, disclosing preliminary results, and inviting feedback.
Five of the seven case studies also involved project management team interviews. Sinohydro International, Gezhouba and Huadian all officially invited us to visit their project sites and conduct interviews. We also had the opportunity to interview managers at PowerChina Resources’ Nam Ou project in Luang Prabang, and the project manager of Three Gorges’ Murum Hydropower Project in Malaysia. In the cases where the project management team were unresponsive, we drew on a wide range of stakeholder interviews including national and local government representatives, NGOs, researchers, and local communities. In addition to on-ground interviews, we interviewed management staff in the Beijing company headquarters of Datang, Gezhouba, Sinohydro International, and PowerChina Resources.
Our full analysis (policy and project assessments) was finalized in February 2015 and shared with all companies for consultation, comment and correction. All companies were provided with one full month to respond and if desired, meet with International Rivers. Comments provided by the companies were evaluated and incorporated into the analysis where appropriate. We welcome updates and comments from all Chinese hydropower companies and project stakeholders at any time. Updates will be reflected on this website.