Home Complaints database South Korean Civil Society Task Force Team vs. KEXIM
Complaint

South Korean Civil Society Task Force Team vs. KEXIM

Laos Xe-Pien Xe-Namnoy Dam collapse involving three companies

Date filed
17 June 2019
Keywords
Countries of harm
Current status
Rejected
Sectors
NCP

Allegations

On 17 June 2019 the South Korean Civil Society Task Force Team filed a specific instance at the Korean NCP against SK Engineering & Construction Co. Ltd. (SK E&C), Korea Western Power Co. Ltd., and the Export-Import Bank of Korea (KEXIM). The complaint concerns the activities of SK E&C, Korea Western Power, and KEXIM in Laos in relation to the collapse of the Xe-Pian Xe-Namnoy dam. SK E&C was in charge of the design and construction of the dam, Korea Western Power was in charge of operation of the dam after construction, and both are shareholders of PNPC, the joint investment venture and principal agent of the Xe-Pian Xe-Namnoy hydroelectric project.

The Xe-Pian Xe-Namnoy dam collapsed on 23 July 2018, claiming hundreds of lives and displacing thousands. The complainants allege that the conduct of SK E&C and Korea Western Power in relation to the dam and its collapse violated several provisions of the Guidelines. Of note, the complaint argues the companies failed to address a flaw in the design and construction of the dam and failed to implement necessary safety measures despite the call for an environmental risk response plan in the dam’s Environmental Impact Assessment Report. The complaint also argues the companies increased the collapse’s harmful impacts both by delaying undertaking emergency water discharge operations and failing to issue essential cautionary measures such as an evacuation order.

Regarding KEXIM, the complaint argues that KEXIM, a financial advisor to the project, is responsible for breaches of the Guidelines through failing to conduct due diligence of the project and its risks, and refusing to communicate with civil society or respond to information disclosure requests.

The complainants seek mediation from the NCP to support dialogue towards ensuring remedy for the impacted communities.

Relevant OECD Guidelines

Outcome

On 25 September 2019 the Korean NCP completed an initial assessment accepting complaints against SK E&C and Korea Western Power, but rejecting complainst against KEXIM. The NCP decided to offer good offices with SK E&C and Korea Western Power, recongising their interest and the signficance of the matter. The NCP said the two companies have interests because, (1) SK E&C was in charge of the design and construction of the dam; (2) Korea Western Power was in charge of operation of the dam after construction; and (3) both are shareholders of PNPC, the joint investment venture and principal agent of the Xe-Pian Xe-Namnoy hydroelectric project. Therefore, the NCP decided to proceed with the mediation process for the two companies. The mediation process has not started yet.

The Korean NCP excluded KEXIM from the planned mediation process by concluding that the Guidelines are not applicable to KEXIM as the Bank is participating in the project as an Official Development Assistance (ODA) agency. The NCP referred to its own decision in the Jalaur Dam case in 2018 and explained that there is no precedent where any NCP found the Guidelines applicable to an ODA project.

More details

Defendant
Company in violation
Other companies involved
Complainants
Affected people
Date rejected / concluded
25 September 2019

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