Poyry gives go ahead to dam on Mekong saying the Laotian government has complied with its obligations. At the same time, it signs an eight-year agreement to monitor dam construction. Environmentalists and NGOs are outraged over the "conflict of interests". Finnish authorities now vetting possible breach of ethics guidelines.

Vientiane (AsiaNews/Agencies) - The controversy surrounding a report issued by a Finnish firm, Poyry, continues unabated. The study concluded that Laos can go ahead with the construction of the Xayaburi dam on the Laotian section of the Mekong River, despite opposition from other Mekong River Commission (MRC) member-nations since the project was in compliance with Laos' obligations to them. However, the report is before Finnish authorities in Helsinki after an ethics complaint was made against the company over possible conflict of interest.

Otto Bruun, campaign manager of Friends of the Earth Finland, noted that the "company is fuelling a water conflict. This is bound to lead to serious negative human rights and environmental impact in the region."

Lam Thi Thu Suu, co-ordinator of the Vietnam Rivers Network, said that "Poyry's misleading information about the impact of the Xayaburi Dam has prevented co-operation in sharing water resources from advancing."

The firm's November 2011 report, commissioned by Laos, said that other commission members and stakeholders had been adequately consulted and the Xayaburi dam could proceed without the commission's further approval.

This favourable assessment earned Poyry Energy an eight-year contract to monitor dam construction.

Friends of the Earth and 14 other NGOs filed an ethics complaint against Poyry Plc and the Poyry Group because in their view the contract is an obvious "conflict of interest".

A spokesperson for the Finnish firm rejected the accusations saying the study was conducted in a transparent manner.

The Xayaburi dam project involves the construction of a US$ 3.5 billion hydroelectric plant with a capacity of 1,260 megawatts in a remote area of northern Laos.

It entails the forced removal of 2,100 residents from local villages with an impact on tens of thousands more.

A Thai company is in charge of the construction and Thailand would be the project's main beneficiary.

Once up and running, the plant would make Laos the "battery" of Southeast Asia. However, the MRC has called for a ten-year moratorium on construction.

Another study released in February of this year indicated that dams on the river could reduce the fish cash by 300,000 tonnes a year with major negative consequences for more than a million people, especially in Cambodia.

Originating in the Tibetan plateau, the Mekong flows through the Chinese province of Yunnan before reaching Myanmar, Thailand, Laos, Cambodia and Vietnam.

About 65 million people live along the waterway, earning a living from fishing (estimated to be around US$ 3 billion in value) and fish farming.

However, hydroelectric dams, including the one in Xayaburi, would threaten the 4,880-long waterway, the second most bio-diverse river in the world.

Earlier this month, the Laotian government issued permits for the official start of construction.

• laos
• mekong
• river
• commission
• mrc
• finland
• poyry
• xayaburi
• dam