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Erich Stather

State Secretary for Economic Co-operation and Development

The WCD Report – Conclusions of the German Government

Ladies and gentlemen,
On behalf of the German government, and particularly on behalf of Federal Minister Wieczorek-Zeul, I would like to join in welcoming all those taking part at today's symposium and all the delegates at the ICOLD annual meeting. I am sure that you will understand that, due to the horrific terrorist attacks in the United States, which have also changed political life, the Minister cannot be here to welcome you in person. These incredible events quite simply make it impossible to go on with business as usual.
Dresden is a good choice as the location for your conference. In a few days' time, it will be the 11th anniversary of German unity. Unification brought radical changes for the whole of Germany but for the eastern part in particular. Here in Dresden, you can see that German unity has unlocked a positive force, which has now also left an unmistakable mark on the city.
I would like to thank the organisers of this symposium, the German Committee on Large Dams and its President, Dr Lütkestratkötter, for giving me the chance to speak here today. You had the courage to enter the lion’s den with this controversial topic and I hope that courage will be rewarded by a positive outcome.
Before I go on to comment on the WCD's recommendations let me start by saying two things:
Firstly: The German government supported the work of Kader Asmal and the World Commission even before its findings had been made known. Indeed, the process of dialogue between those involved in itself represented considerable progress. Setting up this dialogue was in itself a laborious process. The very fact that it took place at all can be regarded as a success. It was the World Bank and the IUCN that were mainly responsible for setting this process in motion and I would like to take this opportunity to expressly pay tribute to them for this achievement. The way in which the Commission itself proceeded was equally constructive and innovative; through consultations, case studies, country studies and an intensive assessment process, it succeeded in arriving at an outcome that had the support of all involved.
For this, praise goes first and foremost to Kader Asmal, who, with the support of the Secretary-General Achim Steiner, made his mark on the process of dialogue by contributing his experience and also his political intuition.
The Commission received all the more support from us once it had presented its findings, because we believe that these findings, taken as a whole, represent progress on the path towards sustainable development, poverty reduction, greater participation and the equal distribution of the benefits of economic and social progress. I will explain the reasons for this in greater detail later on. But I just wanted to state this unequivocally at the outset so as to give a clear statement of our position. I know that some of you – or perhaps even the majority of you – do not share that opinion. I respect the criticisms voiced of the Commission's findings - at least, when those criticisms have been based on respect for the common values espoused by the international community. It is good that today we will be able to have a dialogue on this matter from our various different standpoints.
Secondly: We in Germany are seldom confronted with new dam-building projects in our own country. Many dams were built last century and have been in use now for many years. The public has grown used to them; indeed they have come to value the nature and the leisure activities associated with these stretches of water. Yet there is little call for new reservoirs. As far as I am aware, the only new reservoir being planned is one in the region of Thuringia. So outside observers may well feel that it is easier for Germany to accept the WCD recommendations, since we are not the ones who will have to bear the consequences.
I do not agree with that. First of all, large infrastructure projects are also planned and built in Germany and these often throw up the same questions and tricky decisions as occur with dam projects. You shouldn't imagine that it is easy, in a densely populated country like Germany, to build or extend an airport or to route a high-speed rail link through regions in which every square metre of land is already being used.
In these case, as with dams, risk assessment plays a key role. After a long political process fraught with conflict, Germany has decided to pursue a course in its energy policy based on the use of sustainable energy systems and, in particular, on renewable energies. Changing course in this way is a lot of hard work, but we are confident that we can make it.
Secondly, the planning and building of dams in developing countries often also has an impact on us here in Germany.
  • These projects have an impact on us, firstly because we are an exporting nation and are largely dependent on our companies selling construction work, equipment or services abroad. German companies are, as you know, major suppliers to a number of dam projects.

  • And, secondly, they have an impact on us because we have financed dam projects through our development co-operation, and continue to do so today. I am talking here not only about our own financial co-operation but also about our involvement in the work of the World Bank and the multilateral development banks. So we, the German government, are also stakeholders in the debate about dams and this implies a responsibility that is taken very seriously.

  • Furthermore, we have a responsibility to bear for conflicts in developing countries over access to water.We are aware that competition over access to land and water is one of the most common and most significant structural causes of conflict. In most areas of the world, water is a key policy issue.

First of all, I would like to draw attention to the Commission's comment that dams are not, per se, "good" or "bad" but that the development gains for people have to be weighed up in each individual case against the costs and risks for people and the environment.
It was Nelson Mandela who, at the presentation of the report in London a little less than a year ago, put his finger on the key criterion: How will it benefit the people, particularly the poor? To quote him, "The problem is not the dams; it is the hunger, it is the thirst, it is the darkness in our townships".
Our shared aim is development - sustainable development that will benefit above all the poor of this world. Where there is development, there is also a rise in demand for energy. A year ago, the Millennium Assembly of the United Nations adopted the goal of halving the proportion of the world's population living in poverty by 2015. If we want to attain that goal, it will also mean more electricity being generated. And there is no denying that hydropower is a renewable form of energy that produces few emissions and harnesses the natural water cycle, which ultimately draws its energy from the sun. Nor is there any denying that in some poor regions of the world, the revenue from selling electricity generated using reservoirs is one of the few development options open.
There are some other important development aspects worth mentioning: irrigation for agriculture, a dependable supply of drinking water, flood control.
The Commission has recognised and accepted the significance of dams for development - for sustainable development. The reason I emphasise this is that many partner countries are concerned that the recommendations will deprive them of their right to development. I do not share their concern. The recommendations are not meant to put a brake on but rather to support sustainable development – which, if necessary, also includes the use of water reserves.
I would like to be equally clear in stating that I support the criteria and principles identified by the Commission for assessing dam projects. The Commission was right to put the seemingly technical questions, such as cost-benefit analysis, risk assessment and resettlement, within the context of the key political questions:
  • What sort of development should we be aiming for?
  • How can we ensure that this development involves the equitable distribution of benefits and burdens, opportunities and risks?
  • How can we ensure that human rights are observed?
  • How can we ensure that account is taken of the ecosystems' limited ability to cope?

These questions are asked much too rarely – and much too late - of large-scale technological and infrastructure projects. The result is bad investments, in the best case, or even disputes and violent conflict. I would therefore like to draw attention to the Commission's recommendation that the decision-making process begin with an options assessment to determine the options for achieving the development goals being pursued, be they in the field of irrigation, electricity generation or flood control.
This presents a challenge not only to stakeholders and policy-makers but also to scientific experts and consultants. Because it is not only the supply-side options that must be analysed and assessed but those on the demand side as well.
Let me cite two examples:
  • Firstly: we know that water for agricultural irrigation could be used much more efficiently than is presently the case. Experts estimate that only around half as much water would be needed if the available techniques for targeted irrigation were used. This clearly influences the amount of dam capacity needed.

  • Secondly: another example, namely energy consumption. Here, too, there might be no need for power plant capacity to be expanded if full use were to be made of the options for improving efficiency and for demand management. New technology for electricity generation also offers great opportunities: the combination of hydropower stations and solar energy is emerging as an interesting source of synergies, because dams can compensate for the most serious drawback of solar energy, namely the as yet unsolved problem of storage.

Let me summarise this assessment:
If we accept that sustainable development will continue in future to involve, in certain cases, the construction of new reservoirs and the further use of existing ones, then it is all the more important that we organise decision-making processes and distribute the burdens, risks and benefits in such a way as to fulfil the criteria of economic efficiency and viability, social equity and ecological compatibility.
Two main objections to the recommendations have been expressed, and I am sure they will be discussed in detail today. These are
  1. that participation and compliance controls make the process too complicated
  2. that dam projects will be made so expensive that they will no longer be economically viable.

Allow me to comment on these two objections:
It is true: participation does have its demands; a broad process of consultation takes time and money. But please don't overlook the benefits: often, participation results in improved options and it is vital if the solution finally chosen is to be accepted and public peace maintained. In Germany, we had precisely the same debate many years ago when public participation in urban land-use plans was introduced. The construction industry and estate agents were very sceptical. Now, they can see that participation has paid off and that it results in decisions that have democratic legitimation and provide a sound basis for future planning.
It is also true that dam projects are becoming more expensive. But, ultimately, all that means is that, in the past, the social and ecological costs were not factored in. And without taking account of the true costs, it is impossible either to compare options or to make optimal use of the scare resources available. This is simple economic good sense and a central principle of sustainable development.
By presenting its findings and recommendations, the Commission has completed its mandate. By adopting the report, it has returned responsibility for applying the recommendations into the hands of the stakeholders.
How did we in Germany react to the report?
In January of this year, Minister Wieczorek-Zeul invited the German stakeholders to sit down together and assess the report and draw their conclusions from it. What was impressive was the remarkable way in which the main stakeholders on the German side, including industry and the non-governmental organisations, agreed that the WCD recommendations have pointed the way forward. Of course, there were some concerns that the recommendations might be interpreted as standards that must be rigidly applied. On the whole, however, the dialogue was marked by a will to use the recommendations to improve implementation in practice.
This encouraged us to adopt the WCD recommendations as binding standards for German development co-operation. The KfW and GTZ will be submitting reports at the end of the year on their experience of applying the recommendations.
It has to be said, however, that in Germany, as elsewhere, official development funding for dam projects is becoming less significant, since these projects are increasingly being supported and financed by the private sector, particularly where hydropower is concerned. From the development policy point of view, I welcome this trend. It intensifies the involvement of private companies in development, and the development of infrastructure in particular. The result of this is that decisions taken by German companies involved in dam projects are increasingly coming under public scrutiny.
And in these cases the German government also has to take on responsibility if the companies wish to insure their exports by means of official export credit guarantees. A few months ago, we added new stipulations to the instrument of export credit guarantees. Now it is not only economic and financial questions that have to be taken into account when the decisions are being made but also ecological, social and development aspects. Our guidelines make express reference to the WCD recommendations. This does not make our decisions on applications any easier but, in development terms, it does make them better.
We have arranged with the German stakeholders to continue the dialogue, focusing on experience of applying the recommendations so far. In particular, we wish to analyse positive examples and learn from them.
I was interested to note that other donors have now also drawn similar conclusions from the WCD recommendations. It has been with concern, however, that I have been observing how scepticism towards the WCD initiative is still prevailing in some countries in which hydropower plays an important role. I would like, therefore, to appeal to our partners in these countries to recognise and to seize the opportunities offered by the compromise arrived at by the Commission.
I do not want to belittle or trivialise these reservations and concerns. After all, they are the same ones we encounter in the development banks when adopting guidelines or deciding on funding for projects. It seems, that many of these concerns are based not on what the Commission has said but on summarised reports or misinterpretations by third parties.
I was pleased by the reaction on the part of industry, which was presented at the 3rd WCD forum in February. Although criticism was expressed of individual points, the general tenor was approval for the approach and the principles. The suggestions made by the industry group on the further application of the recommendations are most certainly helpful, since they are aimed at making the recommendations useable and applicable in operative decisions. I also believe it is worth considering the proposal that an environmental and quality management system, similar to the system of ISO standards, be developed for dam projects.
I quite understand that industry has a particular interest in developing standards and recommendations that can be used in practice, because it suffers if contracts are jeopardised by the fact that the demands of the client, the political authorities and the public diverge as widely as is currently the case.
Now that the Commission has completed its mandate, the ball is in the stakeholders' court. And that ball is being tossed around vigorously, as we can see at today's conference. But what is important is that the dialogue about the consequences also be continued at global level. I therefore welcome the fact that the 3rd WCD forum decided to bring the stakeholder groups together once more to discuss their experiences of dealing with the recommendations and also to gather, analyse and disseminate positive examples of their application.
I am also grateful to the United Nations Environment Programme for providing a home to the forum and to the secretariat supporting it. This sends out an important signal by bringing the process closer to the governments, which ultimately have to take the necessary decisions.
The German government will, together with other donors, provide financial support for this project so as to secure funding for it for the intended period of 2 years.
A great responsibility lies at the door of ICOLD, as the international association of dam professionals. All decisions, even those that are regarded as merely "technical" in nature, have an impact on people and their fates. In all areas, scientists and engineers must accept the responsibility they bear within society. The WCD has offered us a framework within which conflicts over dam projects can be solved. Let us use this forum and, together, flesh that framework out!