STATEMENT from the Korean Civil Society TF regarding the Initial Assessment of the Korean NCP on the Xe Pian-Xe Nam Noy Dam Collapse

- The Korean Civil Society TF Welcomes the Korean NCP’s decision to offer good offices to SK E&C and Korea Western Power.

- However, Korean Civil Society TF must express its deep regret at the Korean NCP’s decision to exclude the Export-Import Bank of Korea from the mediation process.
- SK E&C and Korea Western Power must faithfully participate in the mediation process.
(SEOUL, South Korea, October 16, 2019)

1. On September 25, the Korean National Contact Point of OECD Guidelines for Multinational Enterprises (referred to as the Korean NCP in this statement) presented its initial assessment of a complaint about the violation of the OECD Guidelines for Multinational Enterprises regarding the collapse of the Xe Pian -Xe Nam Noy Dam. The Korean NCP made the decision to offer good offices in the future with SK Engineering & Construction Co., Ltd., and Korea Western Power Co. Ltd., taking into account their interests and the significance of the matter. On the other hand, the Export-Import Bank of Korea was excluded in the future mediation process on the grounds that it is an executive agency of the Official Development Assistance (ODA), thus is not subject to the OECD Guidelines for Multinational Enterprises. Korean Civil Society Task Force Team for the Xe Pian Xe-Namnoy Dam Collapse (referred to as the Korean Civil Society TF in this statement) welcomes the Korean NCP’s decision regarding the mediation process with SK Engineering & Construction Co., Ltd., and Korea Western Power Co. Ltd., and urges the two entities to faithfully undertake the mediation process. However, it laments the Korean NCP’s decision to exclude the Export-Import Bank of Korea from the mediation process.

2. On June 17, the Korean Civil Society TF filed a complaint to the Korean NCP against SK Engineering & Construction Co., Ltd., Korea Western Power Co. Ltd. and the Export-Import Bank of Korea about the violation of the OECD Guidelines for Multinational Enterprises regarding the collapse of the Xe Pian Xe-Namnoy Dam. In specific, the complaint pointed out △ that there existed a flaw in the design and the construction of the dam, △that the damage increased due to the delay in emergency water discharge carried out by SK Engineering & Construction Co., Ltd.,and Korea Western Power Co. Ltd, △the failure to take proper initial measures upon the collapse
of the dam such as the absence of an evacuation order, △the failure to implement safety measures despite the mentioning of environmental risk response plan in the Environmental Impact Assessment Report, △the failure of the Export-Import Bank of Korea to conduct due diligence in the process of implementing its management and financial advisory contracts, △their refusal to communicate with civil society and to respond to information disclosure request.

3. Regarding the complaint filed by the Korean Civil Society TF, the Korean NCP has concluded that SK Engineering & Construction Co., Ltd., and Korea Western Power Co. Ltd have interests because 1. SK Engineering & Construction Co., Ltd. is in charge of the design and construction, 2. Korea Western Power Co. Ltd is in charge of operation of the dam after construction, and 3.both entities are shareholders of PNPC, the joint investment venture and principal agent of the XePian Xe-Namnoy hydroelectric project. Furthermore, the Korean NCP acknowledged the need to contribute to resolving the issue through dialogues initiated by the Korean NCP and to proceed with the mediation process as the Korean Civil Society TF, SK Engineering & Construction Co.,Ltd., and Korea Western Power Co. Ltd all acknowledge that the issue is critical.

4. However, it is very regrettable that the Export-Import Bank of Korea would be excluded from the conciliation process due to lack of precedent. In line with the complaint filed regarding the “Jalaur River Multi-purpose project” in the Philippines, the Korean NCP concluded that the Export-Import Bank of Korea is classified as an agency founded and operated according to the Special Act to achieve national policy objectives, thus the project is of no commercial purpose to the bank. Hence, the Korean NCP ruled that concessional funding and associated financial advisory activities are not subject to the OECD Guidelines for Multinational Enterprises. However,
the OECD Guidelines for Multinational Enterprises does not explain nor leaves room for interpretation that only projects with commercial purposes are subject to the guidelines.
Nevertheless, the Korean NCP is repeating its claim that there is no precedent in which the guidelines were applied to Official Development Assistance, referring to cases brought to the
national contact points of other nations. The Korean NCP must take preemptive measures such as applying the OECD Guidelines for Multinational Enterprises without exception, including all financial assistance.

5. A year has passed since the collapse of the Xe Pian-Xe Nam Noy Dam. The tragedy has had a detrimental effect on the Laotian residents. They are residing in temporary shelters, not knowing when they would be able to return to ordinary lives. The Korean Civil Society TF hopes that the mediation process initiated by the Korean NCP with SK Engineering & Construction Co., Ltd.,and Korea Western Power Co. Ltd would lead to meaningful relief for the victims and further
contribute to the provision of recurrence prevention measures. The Korean NCP must promptly initiate the mediation process and while SK Engineering & Construction Co., Ltd. and Korea
Western Power Co. Ltd must faithfully participate in the mediation process. The Export-Import Bank of Korea must also fulfill its role and take accountability for all its actions as an executive agency of Official Development Assistance.