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Economy

Greens take on China's infrastructure projects in Southeast Asia

Tougher environmental compliance facing Chinese companies at home and abroad

China's plan to blast deep channels in the Mekong river for cargo vessels has been put on hold. (Getty Images)

BANGKOK -- Rural communities in Thailand have been challenging Chinese companies with street protests, court petitions, and occasionally sorcery, to block environmentally-damaging projects in their back yards -- and their call to action is being taken up across mainland Southeast Asia.

Grassroots activists in the northern province of Chiang Rai have successfully lobbied the Electricity Generating Authority of Thailand (EGAT), a state power utility, to suspend its decision to purchase electricity from a controversial hydropower dam proposed by China's Datong Corporation on the Lao side of the Mekong river, Southeast Asia's longest body of water. 

Villagers have rallied against the feared impact of the Pak Beng dam on both sides of the huge river. "Local communities sent a letter to EGAT questioning its power-purchasing agreement," said Piaporn Detees, the Thailand campaign director for International Rivers, a global environmental group. "They said the Pak Beng dam will affect their lives, and they also have a case against the dam in the Supreme Court."

Two other Chinese ventures face similar uncertainties. China Communications Construction Company Second Harbor Consultants has been forced to put its plans to blast stretches of the Mekong on hold. It had won a contract to clear islands and reefs to create channels for 500-ton cargo ships connecting China and Laos.

Beijing has a five-year action plan to open up the Mekong, which has its headwaters in China, as a waterway. Discussions between Thai diplomats and their Chinese counterparts led to the suspension of the project for now. Bangkok reportedly took note of the hostile groundswell.   

China's state-owned China Ming Ta Potash Corporation is meanwhile pressing ahead with plans to exploit rich potash deposits in Sakhon Nakhon, a northeastern province, despite opposition from local communities. "If this project goes ahead, it would completely change our way of life, turning us from farmers to jobless people," said Satanon Chuenta, a local resident who heads the Wanon Niwat Environmental Conservation Group. "How can we grow plants and make money from farming if this mine is right behind our houses?"

Thailand's military government has weighed in, dispatching soldiers to suppress the potash mine's opponents. Last week, troops showed up on a bare patch of ground to stop a group of middle-aged women from staging a ceremony to lay a curse on the company. Undeterred, locals plan to petition the military government. 

Local communities have already had some success battling major investments. In February, the government gave in to angry protesters in Krabi, a southern province famed for its beaches and resorts, where a coal-fired power station was planned. Siri Jiraphanpong, the energy minister, agreed to review likely environmental and health impacts. 

A consortium led by China's Power Construction Corporation and Italian-Thai Development had won the contract to build the 800 megawatt facility. It is a serious setback given that this was the first major infrastructure project awarded to a Chinese construction company in Thailand --but not the first such glitch in Southeast Asia. In 2011, President Thein Sein of Myanmar suspended the $3.6 billion Myitsone dam project. It was the largest of a cascade of dams in the upper waters of the Irrawaddy, Myanmar's largest river.

Thein Sein's freezing of one of China's biggest investments in his country was partly prompted by local environmental concerns and came just as the military-ruled country was opening up to political reform. Six years on, it remains a diplomatic sore between the two countries.

Similar pressures on two other Chinese investments in Myanmar, a dam on the Salween river and a controversial copper mine, have also caused friction. Myanmar's civilian government led by State Counselor Aung San Suu Kyi, faces pressure from ethnic minorities to halt the Mong Ton dam planned for Shan State in order to protect a pristine wilderness area.

Chinese money has poured into numerous enterprises in the five lower Mekong countries, ranging from hydropower and energy to logistics, manufacturing, and mining. This effort to promote mutual economic development is being pushed back by local groups who fear environmental degradation, but they are not out of step with legislation being introduced in China. A more reformist tone was set by President Xi Jingping whose speech at last year's 19th party congress raised some green issues. 

Leading Thai business consultants expect Chinese investors to take note. "I have witnessed environmental protection go from a nuisance to one of the top priorities in China over just a few years," Joe Horn-Phathanothai, chief executive of Strategy361, a Bangkok-based investment consultancy for Thai and Chinese companies, told the Nikkei Asian Review.

The Chinese investors in the Pak Beng dam took heed of the changing winds, and hosted two public consultations in Chiang Rai -- but these failed to allay the concerns of locals.

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