Malaysia

Sarawak is a Malaysian state on the island of Borneo that is home to 40 indigenous groups. Once covered in lush forests, Sarawak now suffers from one of the world’s highest rates of deforestation due to the rapid spread of logging and palm oil plantations. Only 5 percent of the state’s primary forests remain. Over the past few decades, the indigenous people who live in Sarawak’s forests have found their traditional lands taken and sold, often without their knowledge.

Indigenous people protest against the Sarawak dams (May 2013)

In 2011, local indigenous leaders formed a grassroots movement called the SAVE Rivers Network to raise awareness of how the dams will harm forest-dependent communities. Although the Bakun Dam resettlement is widely acknowledged as a failure, the Sarawak government is already repeating the same mistakes. Lacking a voice in the government, indigenous people in Sarawak have started to protest. Tensions are rising, as is the risk of conflict.Now the crisis has extended to Sarawak’s rivers. In 2011, the Malaysian and Sarawak governments finished building the controversial Bakun Dam. The Sarawak government plans to complete 10-12 more dams by 2020 with the help of its state-owned company, Sarawak Energy Berhad. The Bakun Dam displaced 10,000 indigenous people from their traditional lands, and additional dams will cause irreversible damage to the people and biodiversity of Sarawak’s forests. Together, the dams will flood 2,300 square kilometers of forest.

Why are the dams being built?

Strong evidence suggests that corruption is driving the rapid development of the dams. The head of the Sarawak government, Chief Minister Abdul Taib Mahmud, has been in power since 1981 and personally controls most of the local economy. In addition to being the main proponent of the hydro projects, Taib and his family have a controlling ownership stake in many of the local companies involved in the dams, such as Sarawak’s largest construction company Cahya Mata Sarawak Berhad. An investigation in March 2013 by Global Witness recorded several members of Taib’s family openly discussing corruption in the timber and land industry. An investigation against Taib and the CEO of Sarawak Energy Berhad is underway at the Malaysia Anti-Corruption Commission for corruption around the dams.

Indeed, the economic justification for the Sarawak dams does not add up. Together, the 13 dams would produce a total of 7,000 MW of electricity in Sarawak, although local energy demand is only projected to reach 1,500 MW by 2020. The Bakun Dam is not running at full capacity, and not all of its electricity has been sold. The dams are part of what the Sarawak government calls the SCORE initiative. According to Chief Minister Taib, SCORE would attract industrial investments that would “transform Sarawak into a developed state” by 2020. The details of this plan have not been made available to the public.

Indigenous groups meet in Sarawak to discuss the proposed dams (May 2013).

 Legal protections for indigenous people living in Sarawak are weak. The Sarawak government does not fully recognize indigenous people’s claims to traditional lands. Many Malaysian court rulings in favor of indigenous rights are not upheld in Sarawak. Many indigenous people do not have identity cards giving them access to basic health care, education, and public services. By controlling the local media, the Sarawak government restricts what information reaches remote communities about the dams and other development projects.

How will the dams impact Sarawak’s indigenous people?

The first hydropower project—the 2,400 MW Bakun Dam—was completed in 2011 after nearly five decades of delays and labeled a “Monument of Corruption” by Transparency International. This dam forcefully resettled 10,000 indigenous people in 1998. Ten years later, many of these people are living in extreme poverty. 

Construction on the 944 MW Murum Dam is nearing completion and will displace around 1,500 people. The project has resulted in numerous violations of indigenous people’s rights under international law, yet it is being showcased by the International Hydropower Association as an example of best practice. Sarawak Energy Berhad did not begin the project’s environmental and social impact assessment until after construction was underway, and has still not made the assessment available to the public. In 2012, indigenous peoples blockaded the construction site for one month after obtaining a leaked copy of the project’s resettlement plan, which showed unacceptable levels of compensation. The affected communities have been forced to negotiate the terms of their resettlement without having access to information about the dam’s impacts and without having independent legal and technical support.

The next project will be the 1,200 MW Baram Dam, which will displace up to 20,000 indigenous people and flood an area of 388 square kilometers. The Sarawak government has not yet formally approved the project, nor is the environmental and social impact assessment completed, but work on access roads to the dam site has already begun. Local communities have actively opposed the project. 

Feasibility studies have been completed for at least seven other dams, several which may begin construction in the next few years.

What is China’s role?

The dams are being built by two Chinese state-owned companies. Sinohydro constructed the Bakun Dam. China Three Gorges Corporation and Sinohydro are constructing the Murum Dam, and are expected to remain involved in subsequent projects. The Murum Dam is China Three Gorges’ first major overseas project. Neither company has taken an active role in the environmental or social management of the projects, nor has either company conducted any due diligence on the corruption risks posed by the dams. 

Why is the international hydropower industry showcasing the Sarawak dams?

In May 2013, the International Hydropower Association (IHA) will hold its biannual world congress in Kuching, Sarawak. The government’s dam developer Sarawak Energy Berhad is relying almost exclusively on the IHA’s new toolkit to manage the environmental and social risks of the Murum Dam. An IHA member, HydroTasmania, is actively advising Sarawak Energy Berhad on the dams. The IHA plans to showcase the Bakun and Murum Dams as examples of good practice for the hydropower industry to follow.