Home Complaints database Finance & Trade Watch Austria et al vs Andritz AG
Complaint

Finance & Trade Watch Austria et al vs Andritz AG

Andritz’ contribution to severe impacts of dam in Laos

Date filed
9 April 2014
Keywords
Countries of harm
Current status
Agreement
Sectors
NCP

Allegations

Austrian engineering giant Andritz supplies key operating technology to the Government of Laos for the Xayaburi dam.

The dam could have serious environmental and human rights impacts for hundreds of thousands of people in Laos, Thailand, Cambodia, and Vietnam. It is the first of 11 planned hydropower projects on the still undammed Lower Mekong River.

The Xayaburi dam is expected to impede fish migration, adversely affect Thai and Cambodian riverine fishing communities, and cause the extinction of species found only in the Mekong River such as the Mekong giant catfish.
The dam will also likely block the flow of nutrient-rich sediment to Vietnams ecologically fragile Mekong Delta, which supports a thriving rice farming industry.

Fishery and environmental experts have concluded that the Xayaburi dam and other mainstream Mekong dams risk driving many already-impoverished families along the river into poverty and malnutrition.

As the holder of a $300 million contract to supply custom-built parts that will power the dam, Andritz is considered to be contributing to the adverse impacts resulting from the project. The company also has significant leverage to improve the design of the project.

The complaint asks Andritz to conduct impact assessments and to work with the project developer and the Government of Laos to prevent and mitigate impacts, adopt policies to prevent harm in future projects, and help provide an effective remedy for populations affected by the Xayaburi dam.

Relevant OECD Guidelines

Outcome

Upon accepting the complaint on 22 May 2014, the Austrian NCP required all parties to send statements agreeing to confidentiality and campaigning restrictions throughout the process. During this stage, one of the complainants, International Rivers refused to proceed on these grounds stating that it went beyond normal procedural requirements and viewed it as an attempt to silence the complainants and left the mediation process in May 2015.

Mediation then continued amongst the other parties and involved several rounds of written consultations and then seven mediation meetings chaired by the Austrian NCP in Vienna between 2014 to 2017. The mediation focused on the technical design aspects of the Xayaburi dam, along with the potential transboundary social and environmental impacts and the situation for project’s resettled communities. In February 2016, the parties expressed their willingness to continue with the mediation process and to reach a Joint Statement, as such the parties signed an Interim Statement, in which Andritz agreed to review the complainants’ additional request for information and clarification related to the design of the dam and scientific studies. The Joint Statement also had the parties state that they would continue to comply with the confidentiality conditions and would refrain from public campaigns against the company.

As mediation continued, Andritz agreed to use its contacts with the developer of the project, Thai company Ch. Karnchang, to provide additional information on the progress of the project, its environmental issues and updates regarding the resettlement site. However, as all parties could not find common ground on key issues related to the transboundary impacts of the dam, all parties found that it was no longer productive to continue discussing these issues within the context of mediation. As a result, the Mekong complainants (consisting of six of the complainants representing project affected people in three countries) did not sign the Joint Statement that was being developed and left the complaint in March and April 2017. Two complainants, Earthrights International and Finance & Trade Watch Austria (formerly ECA Watch Austria), remained in the process.

As an outcome of the process, a June 2017 Joint Statement was agreed upon in which Andritz agreed to develop policies and procedures in relation to the implementation of human rights and environmental standards, and as such will adapt and further develop its pre-existing CSR documents, including the company’s publically accessible “Code of Conduct.” During this process, Andritz agreed to hold informal exchanges with the remaining complainants over the next year over the policy development and regarding the situation of the communities that were/are to be resettled by the dam. The Austrian NCP recommended that Andritz continue to use its leverage to mitigate or prevent any negative impacts related to the dam, for both parties to continue the positive dialogue and discuss the company’s policies together, for Andritz to discuss and further develop its due diligence procedures, in relation to international standard and for the parties to further apply the OECD Guidelines. Both parties agree to issue a follow-up statement to the Austrian NCP one year after the agreement was made. The Austrian NCP then published both the Joint Statement and Final Statement on its website in June 2017.

Follow-up:
On 3 September 2018, Finance & Trade Watch and Earth Rights International published their follow-up statement. Four meetings have taken place between Andritz Hydro and Finance and TradeWatch, with WWF Austria participating as an additional Austrian NGO. The first two meetings focused on reviewing the outcomes of the mediation process, while the last two meetings focused on due diligence policy development within Andritz Hydro. Meetings were conducted in a constructive manner and appeared to be of value for both sides, and the NGOs are confident that Andrityz Hydro takes its commitments seriously. Nevertheless, the NGOs conclude that there still is a high risk of exposure of locals that are critical of the project and its impacts. These risks could potentially be mitigated by an independent human rights expert delegation that could conduct neutral investigations during the mediation process. Unfortunately, this was not possible without the willingness of the NCP to support it. Furthermore, the NGOs are under the impression that the drafting of the due diligence policy is stalling. They recommend that the Austrian NCP be more actively included to promote due diligence alignment with the OECD Guidelines for MNEs.

More details

Defendant
Company in violation
Complainants
Affected people
Date rejected / concluded
27 June 2017

Documents