The Power Elite:

The Politics and Ecology of Malaysia's Bakun Dam

Stephen Bocking
Assistant Professor, Environmental History
Trent University

Associate Editor, Alternatives
Note: This article previously appeared in Alternatives Journal 23:2 (Spring 1997) pp.14-19 

Summary:

There was much relief in June 1990 when Prime Minister Datuk Seri Mahathir Mohamad of Malaysia announced cancellation of the Bakun Dam project, proposed for the interior of the state of Sarawak. No wonder: it would have flooded more than 69,000 hectares of tropical forest, and displaced more than 5000 people, to generate at great cost electricity for which there was no immediate market.
Nearly seven years later, workers and machinery are busy constructing access roads, camps, and diversion tunnels at the dam site, and clearing forest from the reservoir area. The Bakun Dam is underway. Government and business elites, led by the prime minister, have staked their prestige on the project, even as protests mount, and doubts grow about its economic, environmental, and technical viability.
Why was the Bakun Dam revived? The scale alone of the project makes the question important. Large dams usually have large social and environmental impacts, and this--the largest in South East Asia--will, if completed, be no exception. But the story of the Bakun Dam can tell us about more than just dams. Even as cost and environmental concerns force an end to the era of large dams in Canada, this technology is still being promoted elsewhere, particularly in Asia and South America. An examination of the recent history of the controversy concerning the Bakun Dam can help demonstrate how decisions about development, in Malaysia, as in much of the developing world, are made by a few, for the benefit of a few.

Origins and First Demise of the Project

The hydro potential of Sarawak--a predominantly forested, relatively lightly populated Malaysian state on the island of Borneo--was first examined more than 30 years ago by Australian surveyors. Subsequent studies identified numerous potential hydroelectric sites, including Bakun, while another study found that while thermal power plants would be slightly cheaper to build, a dam at the Bakun site would have lower operating costs. By 1986, accordingly, the Malaysian government had decided to proceed.(1) The Bakun Dam, 204 meters in height, would be the largest dam in South East Asia.
The dam's potential consequences immediately raised concern. Besides flooded forests and displaced inhabitants, worries included the possibility of dam collapse, earth tremors, new waterborne diseases, and sediment accumulation behind the dam that would render it useless within fifty years. There were also questions about cost: the necessary loans would likely substantially increase Malaysia's foreign debt. It was even unclear whether the nation, then in recession, needed so much electricity.(2)

 
These problems were far from unprecedented. By this time, as Edward Goldsmith and Nicholas Hildyard had argued in their 1984 review, The Environmental and Social Impacts of Large Dams, such problems had become commonplace with this technology. The "benign superdam": a clean source of energy, generating benefits at reasonable cost, was, they concluded, a myth.(3)
Protests by indigenous peoples affected by the project, and by other concerned Malaysians, as well as doubts about economic viability, led Mahathir to shelve the Bakun Project. He announced the decision at the June 1990 international conference on conservation of tropical biodiversity. Mahathir claimed that it demonstrated Malaysia's commitment to conservation.(4)

Reviving the Project

Three years later, on September 9, 1993, the Malaysian cabinet reversed this decision, again approving construction of the Bakun Dam, to generate 2400 MW, at a cost of approximately $7 billion Canadian.(5)
Now, it was argued, Malaysia's need for power justified the project. By 1993 the Malaysian economy was growing by more than 8 percent per year, with electricity demand expanding even faster. Blackouts in 1992 and 1993, and a predicted doubling of demand by 2000, were harbingers of a power crisis, justifying extraordinary efforts to expand supply.(6) Project proponents also believed the Bakun Dam could help reduce dependence on fossil fuels, especially oil. Most evident, however was that this project was consistent with an energy policy relying almost entirely on supply. As environmentalist Gurmit Singh noted in December 1995, "The concept of energy conservation and certainly its implementation is virtually absent in Malaysia."(7)
But in a way, the scale of the project was its own justification. The Malaysian government has defined a national "vision" of full industrialization by 2020, and sees megaprojects as central to its achievement. A new international airport, highways, the world's tallest office towers in Kuala Lumpur, a new capital city--all reflect a preference for grandiose projects. The Bakun Dam--the tallest, most powerful, most expensive dam in South East Asia--indeed fits well within this view of development.
In the following months, however, it became apparent that more was at stake than just electricity. On January 30, 1994 Mahathir announced that the contract for constructing and operating the dam had been awarded, without tender, to Ting Pek Khiing, a Sarawak timber tycoon and developer, and his company, Ekran Berhad. This surprised many, because Ting had no previous experience building dams. What he did have, however, was the prime minister's confidence. Mahathir's announcement was only the public culmination of intense private lobbying, through which Ting had convinced him that his company could deliver the project quickly. Ting had also won the support of the Sarawak Chief Minister, because his proposal would further the minister's goal of the privatization of utilities, while directing business to Sarawak companies. Thus, Ting's success reflected as much his responsiveness to the political priorities of senior officials, as his ability to address Malaysia's energy needs.
In the three years since Ting won the contract, complex networks of influence have been woven around the project, linking politicians, business leaders, and members of their families. Much of the details of these networks remain secret: as one account concludes, "It is a story of which the full details may never be known, involving as it does maneuverings, meetings, lobbying, rapid changes of minds and deployments -- a real intrigue, mostly behind closed doors and to which the public has had little access."(8)
The project's revival immediately drew attention from dam builders around the world, including Canadians. In February 1994 representatives of BC Hydro, Hydro Quebec, Ontario Hydro, and several Canadian engineering firms together visited Malaysia, to promote their participation in the project. During the January 1996 trade mission to Malaysia, Prime Minister Jean Chretien met with Mahathir, and reiterated Canada's interest in the project, while Ontario Hydro International opened an office in Sarawak, reinforcing a relationship it had been developing for several years with Malaysian power suppliers, partly through the support of the Canadian International Development Agency.(9)

 

Generating New Concerns

As it had in the 1980s, the project has elicited a variety of concerns, and has led to formation of a popular movement, the "Coalition of Concerned NGOs Against the Bakun Dam". Since late 1993 their concerns have coalesced around resettlement, environmental impact issues, and economic and technical problems.

Resettlement:

The project would compel relocation of more than 9,000 people, who would lose their land, homes, and every other aspect of 18 communities. Most are now subsistence farmers, with some supplementing their income through cash crops or jobs in timber companies. They value their autonomy: as one stated: "We are poor only insofar as we have little money. In fact, we are rich, because we have all we need to feed ourselves and house ourselves. Rice is free, fish and meat are free, vegetables are free, water is free, lumber is free".(10) After relocation they would likely no longer have their own land, but might have to seek work instead on large plantations.
A few hundred kilometers from the Bakun site sits the smaller Batang Ai dam, completed in 1985. For that project, 3000 people were relocated to an area lacking adequate farmland or jobs, even before their new homes were ready. Many have not yet received fair compensation, and almost half have returned to near their original homeland. Relocation plans at the Bakun site appear not to have benefited from this experience: the time frame for completing the resettlement (by 1998) is unrealistically short, and plans make little provision for the preferences of those to be relocated. While many would prefer to move to higher ground within the catchment area, plans call instead for a move to an area with poorer land and fewer prospects.(11)
This reflects a general failure to consult with those affected. As Nyaban Kulleh, a resident of one of the communities to be flooded told a journalist in 1994: "no one has come forward to tell us what is happening. We don't want to go against the Government. But if the Government wants the Bakun project, why don't they think of us? They say this is development but we don't think that flooding our homes is development."(12)
These problems of resettlement also reflect Sarawak's place within the national economy, and the relations between Sarawak citizens and their own government. Historically, Sarawak has served as a resource hinterland, exporting timber, oil, and gas, while other sectors of its economy have remained relatively underdeveloped. The Sarawak government has helped perpetuate this status, encouraging rapid exploitation of resources, while obstructing efforts by indigenous peoples to assert control over, or benefit from, this exploitation.(13)

Environmental Impacts:

When the project was announced in September 1993, the government stated that it "will give special consideration to the project to ensure it does not harm the natural environment and ecology."(14) Construction would not begin until after public review of an environmental impact assessment (EIA) report, as required by Malaysia's Environmental Quality Act (1974).
Soon, however, the EIA process started to unravel. In early 1994 Ekran assigned preparation of the EIA report to the Kuching campus of the University of Malaysia. Progress in the study was slow; by September 1994 field work had not yet even begun. In February 1995 the EIA process was broken into four parts, so that each component of the project could be approved separately. The objective was speed: if the reservoir EIA was approved first, forest clearing could begin before approval of the dam, transmission lines, or undersea cable. This maneuver, described by opponents as "nonsensical", aroused concern even among supporters, with a pro-government newspaper describing it as equivalent to approving a house one floor at a time.(15)
Reinforcing the perception that the EIA process had become only a formality, Ting stated on submitting the EIAs in February 1995 that clearing of the reservoir area would soon begin, because "we are confident that all the EIAs will be approved. There is no reason for rejection because we have a team of experts and consultants to ensure measures taken in the project are in compliance with the DOE's [Department of Environment's] requirements." (16) Government officials echoed his confidence. And six weeks later, on March 27, 1995, the first EIA was approved, without ever being released to the public.
But it was not even immediately clear who had approved it. Only on April 6 was it clarified that, retroactive to September 1994, jurisdiction over the EIA had been transferred from the federal to the Sarawak government.(17) Unlike the federal government, the Sarawak government did not require public review of the EIA report prior to approval. Soon after, parts two and three of the EIA were also approved, again without public review.
Finally, in May 1995 the public was permitted to view the EIA report, including its optimistic conclusion, that the "proposed Bakun Hydroelectric Project will supply the nation with cheap, clean, and reliable electricity". The dam would also provide a range of other benefits, including improved conditions for those affected, flood control, and better river navigation. Environmental problems, it concluded, could be minimized. For example, sedimentation could be reduced to an "acceptable level" that would not affect the project. Other impacts were less than feared, because of damage that had already occurred. For example, since the reservoir area had already been disturbed by shifting cultivation, impacts would be less severe than if the area were virgin forest. Remarkably, the EIA even claimed that the dam would reduce loss of forests, even though site preparation for the reservoir involved clearing the entire area.(18)

 
Shortly after its release, the EIA report was evaluated by the International Rivers Network (IRN). The Network identified numerous shortcomings. While the EIA had identified a range of impacts, including deterioration of reservoir and downstream water quality, impacts on downstream water levels and salt water intrusion, risk of waterborne diseases, loss of fish habitat, and inundation of terrestrial habitat, most of these impacts were not reflected in the EIA's optimistic conclusions.
The evaluation also concluded that the EIA's "usefulness is severely limited by basic methodological flaws". It had failed to explain why the dam was needed, or to consider adequately the no-project alternative, or other sources of energy. Nor did it evaluate long-term impacts, or interactions between different impacts, such as the effect of water quality on fisheries. It did not even estimate adequately the life-span of the project. Numerous key issues were not addressed at all, and the report relied too much on inadequate data or uncertain predictions. In sum, the IRN said, the EIA "would not meet internationally accepted standards for environmental assessments", and gave no evidence of having benefited from past experience with large reservoirs in tropical areas.(19)

Economic and Technical Problems:

Since 1993 Malaysia's generating capacity has expanded greatly, with new plants being constructed by the national utility and by independent producers. The margin of supply over demand has increased to about 50 percent, with several additional plants expected to be completed within the next few years.(20) As a result, the need for power from Bakun has become much less evident.
Even if its power will be required when the dam is ready in 2002, it will be more expensive than that available from other sources. Ekran has signed a contract to sell electricity to the national utility at a rate higher than that offered to independent power producers, and about double the cost of power from the utility's own stations. Even at this rate, much doubt has been expressed that the project will be economically viable. (21) Ultimately, according to many critics, the cost of the project will be borne by the national electric utility, and by the Malaysian public, through higher electricity rates, direct subsidies, or both.
There are also many uncertainties concerning technical details. One of the most significant relates to the cables that will deliver power to the Malaysian mainland. They are, in effect, an unprecedented experiment. At 650 km, they are far longer than the longest existing undersea power cables, between Denmark and Sweden. No reliable estimates of how much these cables will cost, how long they will last, or how much power will be lost as it travels through the cable, are yet available.

Secrecy and Determination

These concerns led to the inevitable question: why build a dam that will have serious environmental and social impacts, and that requires an untested undersea cable, to supply industrial centres now enjoying an overabundance of less expensive electricity? This question has been the focus of much debate within Malaysia. This debate, however, has been muffled by persistent secrecy.
In the absence of genuinely open access to information, media coverage of the controversy tends to focus on the government view, with mention of opponents' views limited to indirect references. Various rhetorical devices also discourage dissent. For example, those affected have been urged to be willing to make sacrifices for the good of Malaysia. The implicit message is that to protest is to be selfish and unpatriotic.
Opponents are also described as being influenced by foreigners. In February 1995, for example, one government minister said of Friends of the Earth Malaysia (SAM) that "If they follow the dictates of the western environmental NGOs, then we have to stop living and not develop anything at all." Retorted the president of SAM, "after 38 years of independence, our politicians should have the political maturity to engage in a healthy debate when confronted with controversial issues." (22)
Restrictions on information have also permitted proponents to present their own interpretation of events. For example, before release of the EIA reports Ting was able to present them as concluding that the project would have "no adverse impact to the surroundings". The government even asserted, without effective challenge in the mainstream media, that the dam would have environmental benefits, including less air pollution, flood control, reduced soil erosion, parks and wildlife sanctuaries. (23) Similarly, it has been difficult even to discuss who will benefit from the project. While there is evidence that beneficiaries will be limited to Ting and other members of the Malaysian business community, as well as foreign companies selling technology or expertise, their interests have tended in public debate to be conflated with the national interest, through repeated assertions by government and business that the project will serve national economic needs.
The government has repeatedly demonstrated its determination to continue the project, particularly during the summer of 1996. On June 19th, high court judge James Foong, ruling in favour of three Sarawak individuals affected by the project (who had argued that they had not been adequately consulted, as required by the Environmental Quality Act), declared that the transfer of authority over the EIA from the federal to the state government was invalid. The project therefore could not continue until it met federal requirements, including public review of the EIA. Public review, Foong stated, was essential, since "the interaction between people and their environment is fundamental to the concept of impact." Further, he argued, "It makes a mockery of the whole issue to say that the EIA can be approved first and if the public has any constructive ideas, they can submit later. This certainly is illogical, deprivation of good sense and sound reasoning."(24)

 
Foong's decision was hailed by environmental groups, but was viewed by the government as, at most, an inconvenience. The federal and state governments filed four appeals, and on July 12, Ekran obtained a Court of Appeal order allowing work to proceed. Since then, momentum for the project has continued to build. During the September 1996 Sarawak elections, the major parties successfully resisted pressure to make the dam a campaign issue. Manipulation of public perceptions also continues. In Kuching, Sarawak's capital, the most visible signs of the project are billboards extolling its contribution to the state's economic progress.
But doubts also continue to mount. In July 1996 Delphi International, a British consulting firm, warned its clients that the Bakun Dam promised far greater risks than is typical of power projects, and lower returns. (25) This has presented an additional obstacle to Ekran's efforts to attract foreign investment. Postponement in September 1996 of the signing of a major contract between Ekran and the engineering firm Asea Brown Boveri (ABB) has also hinted at the impact of the international campaign against the project. Thus, more than three years after announcement of the project's revival, the final outcome remains uncertain.

Debating Development

Obviously, the merits of a project as important as the Bakun Dam should be publicly debated, so that those affected, whether directly, or indirectly, can contribute to an informed decision. In Malaysia, this debate has been hindered by restricted access to information, and limitations on media coverage of opposing points of view. While Canada and other nations have, increasingly, rejected large dams (as reflected in recent experience in British Columbia and Quebec), this technology is still being promoted in countries like Malaysia, in part because the political environment hinders the open debate that has led to its rejection elsewhere. In the absence of open accountability, proponents within both government and the private sector are able to seek large profits from the project, while discounting those costs--economic, environmental, and social--that will be borne by Malaysian society.
The Bakun project especially demands debate because there is more at stake than simply one dam. Such projects present a stark conflict between two conceptions of development: that implied by a technology imported from the industrialized world, intended to supply distant centres through a national energy system; and that implied by the communities it threatens to displace, whose economies remain based on local resources, regional trading relationships, and indigenous cultures. Such conflicts and debates concerning development are often not immediately apparent to many Canadians, who tend to see only export opportunities in the rapidly growing economies of the Asian Pacific rim.
Malaysia, like many other nations, has developed a body of environmental law that requires open examination of large projects. Events of the last few years, however, indicate that such requirements are not sufficient. Clear delineation of federal and state responsibilities is also necessary, as are specific requirements concerning the environmental impact process, including the timing of studies, public review, and decisions concerning approval.(26) The Bakun experience demonstrates once again that EIAs done in haste, and toward the end of the planning process, are most likely to be formalities, and will fail to integrate environmental concerns in the development process.
But effective EIA requirements also depend on political will, enforced by open debate about projects, and about the development process itself. Recent discussions of the social role and character of debate and dissent has focused on the concept of the "civil society" -- a political context within which individuals, groups, civic organizations of all types are able to express themselves, debate their concerns, and, generally, mediate the relationship between the state and the citizen.(27)
The recent history of the Bakun project demonstrates how obstacles to a civil society can be formed by restricting access to information, and by discouraging the questioning of official priorities. But it also demonstrates, paradoxically, how such a project can contribute to a civil society. In Malaysia, as elsewhere, developments eliciting immense environmental, social, and economic concerns have often led to stronger organizations of concerned citizens, because such developments demonstrate so effectively the need for civic oversight of the exercise of state and private authority.