MRC Summit

Regional benefit sharing for sustainable development of the Mekong basin Anoulak Kittikhoun (Regional) Coordinator, Basin Development Plan (BDP) Programme Mekong River Commission www.mrcmekong.org

Clear mandate in 1995 Agreement: cooperation, mutual benefits, joint development Article 1: to cooperate in all fields of sustainable development, utilisation, management & conservation of water and related resources of Mekong……. to optimise multiple-use & mutual benefits of all riparians… Article 2: …with emphasis & preference on joint &/or basin-wide development through formulation of basin development plan, that would be used to identify, categorise & prioritise the projects & programmes to seek assistance for and to implement at basin level

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First step done: Basin-wide cumulative assessment of national development plans 

In 2008-2010, MRC’s Basin Development Plan (BDP) Programme led a basin-wide cumulative impact assessment of the basin countries’ national plans (including hydropower and irrigation), with and without consideration of climate change impacts

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The assessment demonstrated the considerable transboundary nexus (synergies and tradeoffs) between water, energy, food, environmental and climate security (reported in 14 volumes) www.mrcmekong.org

The Basin Development Strategy •

The basin-wide assessments allowed the basin countries to negotiate and agree on a IWRM-based Basin Development Strategy

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One of the strategic priorities is to:

“seek options for sharing the potential benefits and risks of development” (e.g. navigation, irrigation, hydropower, water supply, etc)

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Further, the Strategy calls for the MRCS to “support and facilitate negotiated solutions for sharing benefits and risks that are sensitive to the region, in compliance with MRC Procedures, and respectful of the development strategies and aspirations for regional cooperation of the parties”.

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Currently scoping of regional benefit sharing in the Mekong region 

Drawing on eight case studies of benefit sharing in international river basins

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And drawing on past and planned MRC activities, an approach and methodology for regional benefit sharing for the Mekong region has been developed

The resulting scoping report is being discussed with a range of national and regional stakeholders

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International experience The case studies show that benefit sharing is implemented in different ways according to circumstances: 

Typically a central aim is to exploit opportunities to accelerate socioeconomic development and to increase national revenue in a manner that one country alone could not achieve

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Generally this involves the creation of major new infrastructure to develop and manage a shared water resource more effectively

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Joint ownership of infrastructure is often taken up with joint investment and predetermined sharing of costs based on expected benefits (in many sectors: flood control, water supply, energy, navigation, irrigation)

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Benefit sharing agreements can include all riparians in a basin, or can be a sub-set, often just two countries

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International experience Issues often encountered in benefit sharing agreements:  When social and environmental costs are not factored in at the beginning – leading to unforeseen costs to one or other country

 When national-to-local benefit sharing mechanisms are weak - leading to less satisfactory outcomes than intended

 When agreements are inflexible to deal with changing circumstances (such as energy market price fluctuations) – leading to tensions between riparians www.mrcmekong.org

Regional benefit sharing in the Mekong context • To some degree, regional benefit sharing may be seen as already occurring (generally between two countries) • In the Basin Action Plan to implement the Basin development Strategy, the Mekong countries have identified a range of ongoing and planned • ‘national activities and projects of basin-wide significance’ • potential ‘joint projects’

• The challenge now is to lock in the first joint project(s) to increase cooperation - and explore whether there are further opportunities to enhance the benefits • in line with the Countries commitment to optimal management, building on international experience

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Principle means for benefit sharing in the Mekong region (1) National projects of basin-wide significance Types of projects

(2) Joint projects

Projects of one country that serve to Projects by two or more countries expand the Development Opportunity Space (DOS) and create opportunities elsewhere in the basin

Nature of projects Infrastructure and/or enabling, sometimes non-structural projects that expand the DOS and reduce impacts and risks

Joint investments in one or more related infrastructure projects, possibly within a ‘deal structure’ that could include non-structural and enabling activities and agreements

Benefits potentially accruing in

The specific joint projects that bring benefits to both countries and leading to increased interdependency (as envisaged by the 1995 Mekong Agreement)

National projects in other countries made possible by an expanded DOS (i.e. irrigation expansion, increased trade, environmental protection)

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Approach The approach adopted for the development of regional benefit sharing options in the Mekong region comprise: •

1) In the near term, the capturing of existing opportunities towards agreement on a ‘deal structure’ to increase international cooperation and reduce tensions

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2) The exploration of further opportunities for optimizing and adapting existing national plans to increase national benefits and reduce transboundary impacts and risks

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Methodology – 1) increasing cooperation through working on a ‘deal structure’ • Existing information already allows options for cooperative ‘deal structures’ to be put on the table • which could extend well beyond dams and diversions and would involve infrastructure (national or joint), protection of highly valuable environmental areas, including creating transboundary parks, joint monitoring programmes, flow thresholds, and others

• The Basin Development Strategy calls on MRCS to support countries on developing options that are sensitive to the region, respectful of the countries’ development, while meeting their aspiration for regional cooperation

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Methodology – 2) exploration of further future options • The assessment of long-term exploratory scenarios (2060) that will simulate the longer-term opportunities for the full potential of the Mekong Basin to be realised • Based on the insights gained, the potential for adapting current national development plans will be investigated through the formulation and assessment of alternative scenarios for medium-term plans (2030) • For each scenario, the assessment considers the total national benefits and costs accruing to each country as well as the transboundary benefits and costs (a sub-set of total benefits and costs) • The results for alternative scenarios for medium-term plans (2030) may provide a powerful incentive to adapt national plans or seize opportunities for joint projects to increase national economic benefits and minimize adverse transboundary impacts www.mrcmekong.org

The scenarios will be assessed against a wide range of agreed indicators in 5 dimensions  Social dimension

Reflecting the intent to promote social development and the well-being of all riparian States

 Environment dimension

Reflecting the need to protect, preserve, enhance and manage the environmental and aquatic conditions and maintenance of the ecological balance exceptional to this river basin

 Economic dimension

Reflecting the intent to promote economic development and the well- being of all riparian States

 Climate change dimension Recognizing that this has great bearing on the long term sustainable development, utilization, conservation and management of the Mekong River Basin water and related resources for navigational and non-navigational purposes  Cooperation dimension

Reflecting the extent to which the Member Countries are effectively cooperating to mutual advantage

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Implementation arrangements The scoping report of regional benefit and cost sharing includes a detailed work plan. Some milestones: Work package

Milestone

Discussion and finalisation of the scoping report

September 2014

Developing, discussion and agreeing on early deal structures

December 2015

Scenario assessments to explore further benefit sharing options (starting late 2014)

June 2017

Discussion and negotiation of further benefit and cost sharing opportunities

Continuous after 2016

Possible adaptation of national plans and seizing opportunities for more joint projects (2017 onwards)

When national plans are updated

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Implementation arrangements Responsibilities have been distributed among:

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MRC and its Programmes

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National line agencies and RBOs

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Multi-disciplinary assessment team

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Regional Technical Working Group

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National consultations

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Regional forum of broader stakeholders

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High level briefings and guidance from JC and Council, including their working groups www.mrcmekong.org

In summary … The scoping on regional benefit and cost sharing in the Mekong region: 

Based on international experience, regional benefit sharing is about looking “beyond borders” to make “the pie bigger” to mutual benefit of countries

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Regional benefit sharing is not entirely new to the Mekong Basin

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Important mechanisms for regional benefit sharing are national projects of basin-wide significance and joint projects

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In the near term, regional cooperation could be strengthened by exploring and agreeing on ‘deal structures’ to meet all countries interests

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In the medium term, the report contains the methodology for the identification of new opportunities to accelerate and optimise development throughout the Basin through increased cooperation and benefit sharing, leading to interdependent sub-regional growth as envisioned in the 1995 Mekong Agreement www.mrcmekong.org

Thank you

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