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Dilemmas of hydropower development in Vietnam: between dam-induced displacement and sustainable development

On 13 January, Ty Pham Huu successfully defended his PhD thesis entitled ‘Dilemma’s of hydropower development in Vietnam: between dam-induced displacement and sustainable development’ in Utrecht, the Netherlands. Ty’s work has been closely dovetailed with LANDac research and dissemination activities. In his thesis, he gives considerable attention to land-related impacts and challenges linked to hydropower development. In particular, his work sheds light on the issue of resettlement and compensation policies in Vietnam.

Ty is currently drafting a policy brief based on his PhD research; a summary of his thesis is provided below. The policy brief will be send to our LANDac mailing list when finalized. In case you want to sign up for our mailing list, please send an e-mail to:


Dilemmas of sustainable hydropower development in Vietnam: from dam-induced displacement to sustainable development?

Hydropower is one of the biggest controversies in Vietnam in recent decades because of its adverse environmental and social consequences that constrain the objectives of the Vietnamese government on equitable and sustainable development, especial negative impacts on displaced people who make way for hydropower dam construction. The goal of this book is to explain the controversies related to hydropower development in Vietnam in order to make policy recommendations for equitable and sustainable development. This book focuses on the analysis of emerging issues, such as land acquisition, compensation for losses, displacement and resettlement, support for livelihood development, and benefit sharing from hydropower development. The analysis emphasizes the role of different stakeholders in the decision-making process for hydropower development in Vietnam as a means to find a better governance model. This study was conducted from 2010 to 2014; however, the data and results of previous studies are also used to explain more completely the trends of this controversial issue. Qualitative and quantitative research methods were applied for data collection and analysis of research problems. Opinion of various stakeholders at different levels were collected and analyzed to understand better the roles and influences of the parties involved in the process of making decisions in relation to hydropower dam construction in Vietnam.

Since independence in 1945, Vietnam has considered hydropower as one of the most important strategies to promote industrialization and modernization of the country. Hydropower potential in Vietnam is 20,560MW. Currently, Vietnam has installed 13,694MW, accounting for 70% of hydropower potential. According to the Electricity Development Plan, Vietnam will have completed the hydropower development plan by 2030. In 2013, hydropower accounted for 40% of total electricity production and provided sufficient electricity to Vietnam. Electricity stability has contributed to the growth of Vietnam’s economy. The World Bank and the Asian Development Bank appreciate Vietnam efforts, as the electrification program is very successful. Currently, more than 90% of rural areas are connected to the national electricity network. This has contributed to promoting socio-economic development and improvements of services and infrastructure of rural areas. The success hydropower and electricity sector is a source of pride for Vietnamese people (see chapter 2).

However, the benefits of hydropower cannot be compared with the negative impacts that hydropower caused to the environment and society. The construction of hundreds of large-scale hydropower dams has caused a huge loss of natural forests and bio-diversity. Hundred thousand hectares of fertile land areas for agricultural production are submerged under hydropower reservoirs. Also, hydroelectric dams have caused many conflicts over water resources for various economic sectors; for instance, the conflict between the use of water to produce electricity and water needs of people downstream for agriculture, transportation, and drinking water. Many dams have failed, causing damage to property downstream. In particular, earthquakes have occurred near hydropower dams threatening locals and resettled people’s lives. To date, approximately 200,000 People have been displaced and relocated for the construction of hydroelectric dams, of which over 90% are ethnic minorities. The majority of resettled people have no stable life after resettlement, and their living standards are increasingly more difficult than before resettlement. In practice, very few cases of resettlement due to hydropower dam construction are considered as successful examples in Vietnam (see chapter 2, 3, 4 and 5).

Consequences caused by hydropower development are defined by the following underlying causes. First of all, land acquisition policies, compensation for damages, displacement and resettlement in Vietnam have made significant improvement, but this situation is still not perfect. In addition, there is a big gap between policy and practice. The implementation of these policies at the local level is poor, the responsibility of local governments is not high, and local staffs’ capacity for policy implementation is weak. Very often, policy implementation is imposed by government and local authorities. There is a lack of involvement of key stakeholders except for hydropower investors and local governments. Those people whose land is appropriated do not have sufficient rights and opportunities to participate in making decisions related to land acquisition, compensation, displacement and resettlement. Most decisions are given and implemented by local authorities and hydroelectric investors, and, therefore, the voice of displaced people is not considered as important in these decision-making processes. For example, the price of land compensation and other assets is made by the Provincial People’s Committee each year; it is strictly fixed, and, therefore, land losers cannot negotiate with investors to compensate at market prices. Furthermore, displaced people do not have any opportunity to select an appropriate site for resettlement, as hydropower investors and local governments select most resettlement areas. Consequently, most of resettlement areas are located in difficult areas, with narrow land and poor soil quality.

More importantly, investors are responsible for the compensation and support for resettlement of displaced people for only 1-2 years; afterward, they do not have any responsibility to share the benefits of building hydropower dams. For example, resettled people are subsidized with electricity within 1 year, but then they have to pay for electricity. This is a paradox because displaced people have sacrificed their properties and health for hydropower dam construction, but they are then not provided free electricity. In addition, investors and local governments do not have along-standing policy to support resettled people to recover and develop their livelihoods. Most resettled people do not have adequate land for production and employment and most face a more difficult life after resettlement. Consequently, they return to using outmoded and illegal slash-and-burn agriculture and destroy forests or return to the areas they once lived near the dams for forest exploitation and agriculture production, causing many conflicts between resettled people and hydropower investors, local authorities, and local people (See chapters 3, 4, and 5).

The negative impacts of hydropower on the environment and society led to a movement against hydroelectric dam construction by a network of non-governmental organizations in Vietnam and among resettled communities. This network has become more and more organized and powerful. As a result, their voice has strong influence on hydropower development policy of the Vietnamese government. In addition, NGOs have found an important position in Vietnamese society and the Vietnamese government has become more tolerant to NGOs activities. Today, NGOs are protected by formal laws. So far, NGOs have expanded their activities in different geographical areas and fields since they succeeded in anti-dam movement. Besides VNGOs, international NGOs also have participated in improving the benefit sharing policies from hydropower investment by promoting the Vietnamese government and local authorities to implement the payment for forest environment service (FPES) model for the protection of forests for hydropower reservoirs. To date, many resettled communities have benefited from this model. The success of this benefit sharing pilot has prompted the government to expand the model on a national scale; as a result, Vietnam developed the first policy of its kind for payment for forest environmental services in Southeast Asia (See chapter 6).

Thus, the study results reflect that the construction of hundreds of hydropower dams has caused many negative consequences for the environment and society, especially for displaced and resettled people. Globally, the Vietnam example shows that these problems occur in most hydroelectric dam construction, in most regions, with dams of different sizes from large-scale to small-scale hydropower dams. These problems continue to occur and last for many years, as there is no solution to solve these problems efficiently. In other words, issues related to hydropower development, such as land acquisition, compensation for damages, displacement and resettlement, livelihood rehabilitation and development for resettled people is extremely difficult and cannot be successfully resolved. Therefore, we can see that the government of Vietnam, investors, and society do not have sufficient capacity and effective solutions to solve existing problems caused by hydropower dam construction. If the government of Vietnam continues investing in hydropower development, the burden to environment and society will become more severe than it might be possible to cure. Hydropower development can be equitable and sustainable only when it produces benefits that are shared equitably to displaced people and effectively allocated to rectify the consequences that it causes to the environment and society.