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WI 1Y9=';CONTENTS

1. INTRODUCTION 4 3. RECOMMENDATIONS 13

1.1 Purpose 4 3.1 Monitoring and InternationaL AccountabiLity 13

1.2 Mission Composition 4 3.2 ReconciLing Boundaries 13

1.3 Methodology 4 3.3 Recommended Im mediate Actions 15

MAP # 1: PERSPECTIVE OVERVIEW 5

1.4 Summary of the Mission Activities 7 4. GOVERNMENT RESPONSE 17

MAP # 2: VEHICLE AND HELICOPTER SURVEYS 8

1.5 Acknowledgments - Appreciation 9 ANNEX 1: FIELD OBSERVATIONS NOTEBOOK 19

2. FINDINGS AND CONCLUSIONS 10 MAP # 3: OVERVIEW MAP OF BOUNDARIES AND SURVEYS 20

2.1. Logging Activity in the NBCA 10

2.2. Logging Activity in the NT2 Corridor Area 11 ANNEX 2: MISSION AIDE MEMOIRE 53

2.3. Logging Activity in the Resettlement Areas 11

2.4. Adequacy of Maps of the NT2 Area 12 ANNEX 3: LETTERS TO THE PRIME MINISTER'S OFFICE

2.4.1. Boundaries of the Protected Areas 12 FROM MR.TALBOT AND MR. MCDOWELL 65

2.4.2. Elevations 12

2.5 New Log Processing PLant 12 ANNEX 4: LETTERS FROM THE PRIME MINISTER'S OFFICE

2.6 The Northern Extension 12 TO MR.TALBOT AND MR. MCDOWELL

2.7 Report of Road Building 12 GOVERNMENT NOTICE NO.0885/CMPO 67

1. I N T R O D U CT I O N

1.1 Purpose: ProjectLeeTalbot,representingtheEnvironmentalandSocialPanelofExpertsforthe

The objective of the mission was to conduct a rigorous field investigation of NT2 Projectthe area ofthe Nam Theun II Hydroelectric Project (NT2) to verifyand documentwhether Lao participants included:logging has taken place in protected areas. Specifically,the areas involved are the NT2 Mr. Xem Samontry, Director General, Department of Forestry, Ministry of ForNBCA,especiallytheareasadjacenttotheareatobeinundatedontheNakaiPlateau, estry,GOLthe NT2 Corridor (between the NT2 watershed and the Khammouane NBCA),the border Mr. Khamphone Rasachack, Head, Provincial ForestryOffice,Khammouan Prov-by route 12, and the northeastern border near Route 8 and including the Ban Navang inceroad. Mr. Hoy Phomvisoouk,Manager of Resettlement Management Unit, NT2 Office

Mr. Soukhatha, Head of Nakai-Nam Theun NBCA, Nakai District, KhammouanThe 1-12 May mission was in part a continuation of ongoing efforts by the Province

World Bank, IAG and POE to monitor the status of the area, and in part a response to a Mr. Ekawai,Technical Staff of BPKP, Nakai District, Khammouan Provinceseries of unconfirmed reports received by the Bank and POE that logging was taking Mr. Khambeck Senebsa, Manager of Logging Operation in Nam Theun Reser-place in protected areas.Map # 1,"NT2 Project Area,shows the topography of the area in voir, Nakai District, Kammouan Provincerelation to the planned NT2 Reservoir. Mr. Loy Chamsarath,Advisor,NTEC

Mr. Phayboun B.,Technical Staff, Nakai District, Khammouan ProvinceAfterthe conclusion of the mission,the Governmenttook a number of construc- Mr.Xiengsy Sengthongdy, Governor of Nakai District, Khammouan Province

tive steps to address the findings of the logging servey.These are summarized in section Mr.Vanxay,Governor of Khamkent District, Bokikhamxay Province4(Government Response),and the Government's communications are in Annex 4. Mr. Phaylee Vongsouk,Technical Assistance, NTEC

Mr.Vixay Intharaphithak, Head ofThakek Branch, NTEC1.2 Mission Composition: Ms.Latsamay Sylavong,Technical Officer, IUCN

Christopher Chamberlin,World Bank (Team Leader) 1.3 Methodology:Christoph Feldkotter,ConsultantChristopher Flint,Consultant A rigorous, standardized methodology was followed in all the surveys by heli-

WORLD BARNKBnLOGGING RobertGoodland,World Bank copter and vehicle to ensure thatthe procedures and results were accurate,consistent,

SURVEY David McDowell, representing the International Advisory Group for the NT2 and as complete as possible.MISSION

TECHNICAL

REPORT

El

MAP#1: PERSPECTIVE OVERVIEW

Lao PDR - Nam Theun 2 Socialand Environmental Project

World Bank Logging SurveyMission, May 1-11, 2000

\ = Main Roads

___Main Rivers,

Maximum Inundation Level,~~~~~~~~~ ~~~~~~~~538 Meters (NTEC)

Forest,Degraded Forest

-i Aguioulture, Swidden, ~BNBush I Shrubland LOGGING

SURVEY

Bare Rock MISSIONSurfaces TECHNICAL

REPORT

A satellite image (SPOT,ground resolution 10 meters) ofthe Nakai Plateau and helicopterteams.This made it possible to effectively covera large area within relatively

some adjacent areas taken on January 17,2000,was purchased from SPOT Asia,Singa- shorttime.Without reconnaissance information derived from the satellite images,the

pore. Additional images (IRS,1997,ground resolution 5 meters, LandsatTM,1992,ground field and helicopter teams would have had to carry out their search randomly or take aresolution 30 meters),that had earlier been purchased by FOMACOP and others, were much longertime.also obtained.All images were available in digital (computer usable) format.The im-ages were geo-referenced to the same coordinate system as used on the 1:25,000 scale The team was equipped with handheld, non-differential GPS receivers (Garmin

topographic maps of the Nam Theun area and the NTEC maps.This allowed direct com- 12XL).The world-wide GPS system is operated by the US military.The signal was inten-

parison between all images as well as overlay of images and previously digitized map tionally scrambled until the end of April 2000.Since early May 2000,the scrambling has

data,such as the NBCA or corridor boundaries. Direct comparison of the images allowed been turned off. With the scrambling turned off, the horizontal precision of positions

identification of areas where there had been apparentforest clearance and otheractivi- measured with these receivers is 10 - 15 meters.ties. Overlay of images and previously digitized map data allowed for identification ofpotential logging activities outside the demarcated logging areas.AII images and maps During the surveytrips byvehicle,each field team had copies of all maps,a GPS

were kept in a Geographic Information System (GIS).The images were printed in several handset, and altimeters and camera. The route the field team would take was tenta-

copies to make them usable for field and helicopter teams. tively planned using the satellite images.To assure consistency of coverage the follow-ing procedure wasfollowed:Oneteam member kept GPS records and the log book,tak-

In addition a series of maps was prepared for use of the mission field teams. ing and recording site readings,altitudes,photo numbers,and physical descriptions ofThese included a book of 1:20,000 maps of the planned NT2 reservoirand surroundings, each observation.Another member served as photographer informing the recorder of

1:25,000 map sheets ofthe area from the Lao Geographic Department,and other maps the photo numbers and direction of photos as appropriate. A third member served as

at scales of 1:100,000 and 1:200,000. report writer maintaining a record of each site visited,focusing on qualitativejudgmen-tal issues (age of site and stumps,likely circumstances, species of trees, unresolved is-

The satellite images were used to identifypotential recent logging activities. sues,etc.) and consulting with other mission members on such issues.The reportwriter

In no case was logging activity identified solely from the satellite image.The identified prepared a summary of the relevant findings, issues and conclusions, using both the log

locations of potential recent logging activities were then used to guide the field and book and his field report.

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During the helicoptertrips a similar procedure was followed.The main differ- vehicle to the NTEC guest house at Nakai,with part of the team meeting with the Gov-ence was that the route was planned much more precisely:the satellite images were ernor and other Provincial officials in Thakek on the way to Nakai for briefing and dis-overlaid with the NTEC logging boundary.The identified locations of potential recent cussion.logging activities outside the demarcated logging area were then entered into the GPS Map #2 summarizes the routes traveled by the mission in the NT2 area. On 4handset as waypoints.ln addition,spotchecks in areas with no signs of logging activi- May the team divided into two groups of three vehicles each for field examinations.ties on the satellite images were included as waypoints.The helicopter pilot was then Both groups had extreme difficulty in the intermittent rain because of deep mud, highdirected to the pre-identified waypoints by the team member serving as navigator. If water,and road and bridge damage by logging trucks,and spent much time pushing orany recent logging activities were identified from the helicopterat,around or between winching vehicles out of the mud and water. One group traveled north and east cross-the waypoints, an additional, more precise GPS measurement was taken, photos were ing the Nam Theun River and proceeding southeast to a point roughly 15 km southeastmade, and the activities and circumstances were recorded by the team member keep- of the Nam Xot river bridge, returning to Nakai late at night.The other group proceededing the log book.As necessary landings were made to enable the team to verify age and northwesttoward the Nam Malou area,but by late afternoon they were finally stoppedstatus of logging from the ground. by an impassable river crossing and were unableto get closerthan some 15 - 20 km.

from the Nam Malou area.All measured GPS points,eitherfrom field or helicopterteams,werefinallytrans-

ferred back to the Geographic Information System (GIS).The trips taken by helicopter In view of the difficulty of ground travel a helicopter was requested. In theand vehicle are shown on Map #2,"Vehicle and Helicopter Surveys" interim,on 5 Maya combined team with five vehicles traveled southeast through reset-

tlement areas, near the escarpment above route 12, and thence eastward to the Nam1.4 Summary of the Mission Activities: On area of the NBCA.

Members of the team met in Vientiane on 1 May to discuss mission planning On 6 May one team proceeded by vehicle northeast across the NamTheun Riverand issues, and devoted 2 May to official appointments arranged by GOL. Meetings to the Thousand Island area, then north to Lak Sao. Later the same team traveled bywere also held with representatives of IUCN and NTEC. On 3 Maythe team proceeded by vehicle up route 8 to theVietnam border, returning in the evening to Lak Sao.

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MAP#2: VEHICLE AND HELICOPTER SURVEYS

480lto0 45°1°°0 ~~~sOtO 101~00 520.00 XowOt a0 DOO SOW= .00

Lao PDR - Nam Theun 2 Socialand Environmental Project

World Bank Logging. SurveyMission, May 1-11, 2000

IDENTIFIEDLOGGING ACTIVITIES

* Logging, Recent

Logging, Age Undetermnined

r . S _ - - _ s Logging, Old

- Demarceted LoggingAres (NTEC)

5 Helicopter Surveys

-Iir Vehicle Surveys(off Main Roads)

+ ~~~~~~~~~~~~~~~~~~~~--J- Maln Roads

* Proposed ResettlementSites (NTEC)

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TECHNICAL N _NTnC-REPORT 4JAIOD XIbODDO f>b40.0 010,4100 510,000 0301100 54O,OOo BcgudSXlU#O

Also on 6 May the other team made three survey trips by helicopter. The first After the field visit,the two independent mission members, Mr.David McDowell

went southeast to coverthe areas along the south and eastern borders of the reservoir, and Mr. Lee Talbot, wrote to the Government with their recommendations. On May 19,

then followed the escarpment and route 12 eastand north to the Vietnam border,then the Government repliedfavorablyto Mr.McDowell and Mr.Talbot,and also issued a de-

westward to Nakai. The second helicoptersortiewas eastward to surveythe protected tailed noticecomplying with the mission's recommended immediateactions.

areas east of the reservoir in the general vicinity of Nam Noy and Nam Mon to fill inbetween theareas surveyed earlierthatdayand bythe ground team on4 May. Thethird 1.5 Acknowledgments -Appreciation

trip visited part ofthe Nam Malou area and then proceeded across the NT2 CorridortoLakSao. The Logging Mission worked closelywith the Government of Lao PDR,the NT2

project Developers (NTEC), and provincial and district officials in Khammouane Prov-

On 7 May two helicopter surveys were made from Lak Sao. The first covered ince. The mission received full cooperation and logistical support from the GOL, which

the entire border of the NT2 Corridor from the point where the Nakai-Lak Sao road en- arranged the field visitflawlessly. Under demanding field conditions during early rains,

ters the NBCA all the way to where the south end of the Corridor meets the reservoir the missionwas nonetheless abletovisit everysite itselected. Forthose efforts and the

edge, then proceeded through the Nam Malou area and back to Lak Sao. The second hard work putting together a very successful and productive workshop,the mission ex-

flightfollowed the old Ban Navang road past Ban Navang,then followed the northwest- presses its appreciation to Mr.Sitaheng Rasphone, (Vice Minister,MOAF),Mr.Soulivong

ern borderof the NBCA from the Nakai-Lak Sao road nearlyto theVietnam border. Daravong (Minister,Ministerof Industryand Handicraft),Madame Khempeng Pholsena(Vice Ministerfor International Cooperation),Mr.Kamleuang Sayarath (Directorof NT2

Late on 7 May the mission team proceeded by vehicle and helicopter to Office),Mr. Bounsalong Southidara (Director of the NTSEP Office),Dr. Phouang Parisak

Vientiane. 8 May was spent working up survey data and report writing. Pravongviengkham (Deputy Permanent Secretary, MOAF), Mr.Yem Samontry DirectorGeneral of Department of Forestry, Mr. Ken Philavong (Governor of Khammouance Prov-

While the mission recognizes that in the limited time available it could not ince),Mr.Thaygnaphone Singthong (Deputy Governor of Khammouance Province),and

observe all logging activity in the protected areas,the survey routes summarized above many other provincial, district and national staff who made this mission a successful

provided the mission an overview of the entire extent of the borders of the NT2 NBCA one. In addition we would express ourthanks to Mr.Jean-Christophe Delvallet,Mr. Peter

within Lao PDR,the entire border of the NT2 Corridor,the borders of the area planned to Goldston,and Mr. Loy Chansavat of NTECfor their contribution to the mission's work as

be inundated by the NT2 reservoir, and a significant part of the NBCA,Corridor and Re- well as to Mr. Stuart Chape (IUCN Resident Representative) and to Ms. Latsamay of his

settlement zones outside of the planned reservoir.The NBCA border with Vietnam was staff,who provided valued inputto the mission in the field. Linda Schneiderand Enrique

not surveyed by the mission dueto Government's security considerations. Crousillat to World Bank participated helpfully in mission discussions, and the World LOGGING

Bank Liasioni Office provided efficient and cheerful support. MISSION

TECHNICALREPORT

PUt: '; 2.FINDINGS AND CONCLUSIONS

2.1 Logging Activity in The NBCA There is somesystematic,large scale (hundreds of stumps),recentlogging overa kilometerinsidetheNBCAbetweentheNam Mon and NamTheun.

2.1.1 Findings:The mission was unable to inspect the areas of the NBCA bordering Vietnam

The mission did notobserveany commercial logging alongthe northwestedge due to security considerations raised by the Government.of the NBCA (roughly parallel to route 8) from the Nakai-Lak Sao road to the Vietnamborder. 2.1.2 Conclusions:

The only observed potential access for logging activities on the northwest edge While the core area of the NBCA appears to remain effectively protected fromofthe NBCA is the Ban Navang road,which appears to have had very little ifany vehicular commercial logging to date, there are major infractions in the general vicinity of thetrafficthis season.No evidence of logging nor of use bythe road of logging trucks was planned reservoirwhich are a clear challenge to the GOL decrees and understandingsobserved. with the World Bank.

The mission did not see any logging nor logging road access on the southeast There are also abundant lesser infractions,some of which may be explained byborder of the NBCA roughly parallel to route 12, at least from the area below the inadequate maps or location equipment, insufficient instructions and supervision, orescarpment roughly south of Nam Yang, eastward around to theVietnam border. misunderstandings. However others are large and systemic enough that they appear

clearly intentional.There has been systematic and extensive recent logging in theThousand Island

area which NTEC has defined as off limitsto logging. In the case of logging in the Thousand Island area, the mission was told thatthe logging was organized over NTEC's objections.

There is widespread,scattered,individually relatively small scale butapparentlyselective recent logging (i.e., a relatively few trees at each site) within the protected The GOL mechanisms and systems to process, control, supervise and monitorarea above most of the northeast edge of the planned reservoirand outside the allowed this logging are not adequate or have conflicting objectives.logging area.Some sites were over a kilometer from the allowed logging area.

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2.2 Logging Activity in the NT2 Corridor intended to provide habitatand accessfor elephants and otherlargewildlife which willotherwise be deprived of suitable habitat and migration routes by the NT2 reservoir

2.2.1 Findings: between the NNT NBCAandthe Khammouane Limestone NBCA.The logging inthe NamMalou area isintentional and approved bygovernment,and is clearly in contravention

ThereisnoapparentloggingaroundtheborderoftheNT2Corridorfromthe oftheunderstandinyswith LlheWorldBaik.

Nakai-LakSaoroadtotheplannededgeofthereservoir,exceptfortheareaadjacenttothe Nam Malou basin as noted in the following paragraphs. 2.3 Logging Activity in the Resettlement Areas

There is systematic, large scale, current logging throughout the Nam Malou 2.3.1 Finding:area between the edge of the planned reservoir and the crest of the western escarp-mentwhich is the western boundary of the Corridor. The Mission was informed that this There is current, systematic, large scale logging in the areas (including #21,

logging has been requested by the District Administration government and approved, #22, and others) planned for resettlement of the villagers whose present homes will be

because the NT2 Corridor did not yet have legal status as a protected area. inundated by the reservoir.

There are two roads overthe western escarpment providing access for loggers 2.3.2 Conclusion:intothe Nam Malou area and routesfortransportof logs outofthe protected area.

Since forestry is a major source of the planned livelihood model for those who

2.2.2 Conclusions: will be resettled bythe project,thisclear,intentional action will reducefinancereturnsto resettles under the community forestry livelihood component of the Resettlement

Since 1996 the NT2 Corridor has been an integral part of the NT2 Project. It is Action plan.

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mF

2.4 Adequacy of Maps of the NT2 Area time. Further, as far as the mission knows the only relatively close sources of Fokieniaare the Northern Extension area and the NBCA. Neither is an acceptable source in the

2.4.1 Boundaries of the Protected Areas mission's view because by definition the NBCA should be protected and the POE and lAGhave strongly and repeatedly recommended that the Northern Extension be protected

While much ofthe area to be inundated by the NT2 reservoir and/or the bounda- for its unique biodiversity. Further,the mission fears that this new plant represents ad-ries ofthe areas where logging is permitted have been identified and marked by NTEC, ditional over-capitalization of wood processing capacity in this region. In an earlier re-a substantial question remains about the outer boundaries of the protected areas. No port the POE noted that according to available information the then-existing woodtwo sources or maps consulted by the mission showed the same outer boundaries for processing capacity would exceed the available standing trees after the NT2 reservoirthe NT2 NBCA and the NT2 Corridor. Clearly there is a need to establish, formalize and was filled,and as a consequencethere would be increasing economic and political pres-markthe boundaries. sureto log in the protected areas.This new plantsimply adds to the problem.

2.4.2 Elevations 2.6 The Northern Extension

During the mission's field work substantial discrepancieswerefound between Returning down route 8 from a surveytrip members of the mission noted thatthe elevations on the available maps and those observed with the mission's instrumen- there were recent improvements on the logging road which climbs into the Northerntation. For example, the elevations determined by the mission using three or four dif- Extension and thatthere was a log dump up the road after it diverges from route 8. In anferent types of altimeter differed from those on the NT2 maps by 12 to around 50 me- earlier visit members of the POE had walked up the road and photographed piles ofters, even when the same original datum point was used (e.g., the elevation marker at Fokienia logs.The mission emphasizes that the Northern Extension is of global impor-Nakai).The mission feels that there should be a careful review to determine whether tance because of its biodiversity,and if it is not protected as part of the NT2 project (inthe source of the differences is the mission's instrumentation or errors in the maps. deference to GOL's expressed views) it clearly should be protected in some other way.

2.5 New Log Processing Plant 2.7 Report of Road Building

The mission wastold thatthe majornew lumber processing plantitsawin Lak The mission was told but could not confirm that local authorities had begunSao was owned by a Taiwanese investor and was built for processing Fokienia (cypress construction of dirt road in the southern corner of the reservoir area heading north to-

WORLD BANKLOGGING family).The plant is very large and Fokienia is a relatively rare tree,so it is highly unlikely ward the NBCA border.This report should be followed up in subsequent monitoring of

SURVEY that the Fokienia growing in Laos could supply a plant of this size for more than a short the project area.MISSION TECHNICAL

REPORT

IE

AL2%

3. RECOM MENDATION S

3.1. Monitoring and International Accountability fund the activities of the Watershed Management and Conservation Authority (WMCA),one ofwhose fundamental tasks is to oversee themaintenance ofthe NBCA's biodiversity

The findings and experiences of this mission in the NT2 Project area illustrate values and to counteranythreats to these values. Thatwill require resources and trainedhowdifficult it is in a small developing country such as Lao PDR,with limited resources, manpower and,on the evidence of this mission's findings on illegal logging activities,technology and trained manpower, to supervise and monitor - in short, to exercise collaborative international monitoring of the continued flow of adequate funds to theeffective control over - a nation-wide economic activity like forest logging. Especially WCMA and of threats to the watershed and its biota.in circumstances where the GOL Departments are having to negotiate with,superviseand tryto monitorthe operations of large, resource-rich and powerful private sectoror 3.2. Reconciling Boundariesstate-owned military companies extracting a valuable natural resource,the effectivenessof civilian government control of the industry is limited. It needs bolstering. And the The mission addressed the question of achieving a greater coincidence of theinternational community needs reassurances about accountability. The mission's various boundaries in and around the NT2 project area. The objective was to enhancerecommendations below therefore cover ways of strengthening the government administrative effectiveness,to facilitate an ecosystem approach to NBCA management,apparatus and helping underpin itwith collaborative GOL/international monitoring. It to help give effect to GOL intentions regarding extensions to the NBCA (excluding thesuggests furtherthatthe government looks at whetherthe enforcementauthorityof proposed Northern Extension) and to enhance administrative and managementthe civilian departments is adequate. effectiveness in handling the reservoir area.

What these conclusions also suggest is that there are other aspects ofthe NT2 As can be seen from the topographical representation ofthe project area (Mapproject which merit effective monitoring and accountability mechanisms along the #3), there is a clear delineation of the Nam Theun watershed above the future reservoir.above lines. The mission is concerned, for example, that the biodiversity of the NNT Current government maps show that there is only limited coincidence of threeNBCA - the jewel in the crown of Lao PDR - be maintained. GOL has accepted that a boundaries:the Nam Theun watershed as a whole,the present legal boundaries of theproportion of revenues from the sale of electricity exports be transferred each year to NBCA and the proposed extensions.

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As themissionunderstands the situation,one anomaly -the presentexclusion There are other boundary issues. Some of the proposed extensions of theofthe reservoirarea south ofthe NamTheun riverfrom the NBCA -is related tothefact original NBCA boundary (e.g.,the watersheds ofthe Nam Kata and the Nam Phao) arethat it is in this area that the largest programs for resettling people dislodged by the already incorporated. GOL has declined to includethe proposed Northern Extension oncreation of the reservoirlie. The mission sees the administrative convenience of excluding the grounds that this is part ofthe NamTheun Hinboun watershed. Itis recalled thatthewhat will be a large socio-economic operation from the responsibility of the wider compensationforbiodiversitylossfrominundationoftheplateauwastheconservationmanagement regime for the project area (the Watershed Authority,WMCA) but would of the richer and less disturbed Northern Extension,the only place in the world wheresuggestthat in all logicthe reservoir and surrounding area should eventually come under the Saola had been discovered. The mission offers its good offices tofoster cooperationthepurviewoftheAuthority.Thepointisthatthereservoir(thoughanartificialcreation) for GOL between the Nordic donors and ADB on the conservation of the Hinbounwill in effect become a part of the watershed and the wider ecosystem and so it should watershed. Time is of the essence as the mission observed a large logging yard on thebe approached as such as soon as feasible. Northern extension logging road near Route 8. GOLUs POE observed intense Fokienia

logging in the Northern Extension in earlier reports.It may be that the answer lies in a shortterm compromise whereby it is made

clear that within a specified time (preferably related to resettlement schedules) the entire There are also several other areas either 'agreed in principle' for inclusion inreservoirarea will come underthe managementoftheWMCA butthearea south ofthe the NBCA which have yetto be legislated to that effect. In the viewofthe mission thereservoirin the interim forms a separate unitforadministrative purposes,presumably NNT NBCA should, for the reasons set forth in the first paragraph of this section,reporting to the Governor of Khammouane's Resettlement Committee. During the incorporate the following areas: : (a) the NNT watershed, (b) the upper Nam Katainterim period,theWatershed Authoritywould haveoversightacrossthewhole reservoir watershed, (c) the eastern upper Nam Phou watershed, (d) the corridor to theof such watershed related activities as water transport, fishing and biological Khammouane Limestone NBCA, (e) the north-facing escarpment of the Nam Malouconservation programs. inside the watershed area, (f) the Nam Theun vailey downstream ofthe dam site to the

watershed boundary line, and (g) the corridor to the Hin Nam Noi NBCA ("SouthernCorridor").

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3.3. Mission Recommended Actions: Legislative action be taken to clarify that the islands inside the reservoir area(i.e., rising above the 538 meter level) are not to be logged -for both biodiversity and

Imrnmediate Actions: conservation reasons and to preserve the area forfuture tourism and recreation.

Logginginandaroundtheresettlementareas southoftheNamTheunbehalted Interim action be taken accordingly to halt immediately the logging in theimmediately by GOL and the sites regularly monitored thereafter through satellite thousand islands area ofthe reservoir, and the northeast-facing escarpment ofthe Namimagery interpretation,and helicopterand ground inspection. Malou.

Logging in the NBCA area to the east and north of the Nam Theun be halted Agreement be given by the Lao authorities to regular and continuedimmediately by GOL and sites regularly monitored thereafter by the same means. international/GOL collaborative monitoring of logging activities, and other impacts in

the NT2 projectarea,using the methodology developed bythismission. Satellite readingsLegislativeactionbyGOLbetakentoreconcileandclarifythepresentboundaries and interpretation, backed up by helicopter and/or ground reviews, would provide

of the NBCA,its watersheds and its extensions,agreed to in principle (Aide Memoire of valuable information forthe GOL in its forest management role.25/11/96), but not yet legally incorporated in the NBCA. The NBCA watershedconservation area would thus legally include: (a) the NNT watershed, (b) the upper Nam The mission's viewis thatfurther work by the WorldBank Group leading to theappraisalofKata watershed, (c) the eastern upper Nam Phao watershed, (d) the corridor to the the NI1 project shoufd be conditional on the above recommendations being accepted,Khammouane Limestone NBCA, (e) the northeast-facing escarpment ofthe Nam Malou implemented in full, and verified.inside thewatershed area, (f) the Nam Theun valley downstream ofthedam siteto thewatershed boundary line, and (g) the corridor to the Hin Nam Noi NBCA ("SouthernCorridor").

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Short Term Actions (within 3 months of the May, 2000, Aide Memoire): 2. Similarly, the GOL review the obvious large over-capacity of the country's timberharvesting and processing facilities, with regard to its forestsustainability objectives.

1. NTEC and GOL jointly review the basis and viability of the presenttopographicaI,reservoir and "Iega I logging" maps and undertake revisions based on the use of accu rate 3.GOL consider whether its forestry field staff have adequate enforcementGPS-fixing and altitude measuring technologies. The revised documents be given wide authority when they encounter logging infractions by powerful companies in areas likedistribution to those engaged in logging activities, including logging unit managers the NNT N BCAand crews in the field.

Themission proposes thattheoutcome and results of theserecommendations beregularly2. GOL expand, upgrade, equip and fund adequately its Forest Management Units andcollaborativelyreviewedby the GOL and the WB with international expert participation.

(FMUs) notably at the District level, in order to strengthen their field supervision and The mission Aide Memoire (Annex 2) provided further details on the monitoringmonitoring capacities. recommendation.

Medium Term Actions (within 6 months): During the mission, the representatives of the NT2 Panel of Experts and of the NT2International Advisory group sent an independent letter to the Prime Minister recom-

1I.As part of its wider Forest Policy Review now underway,the GOL review,simplify mending that the Government undertakeseveral immediate actions. Theletterisand make transparent its overall logging quota and allocation systems so as to remove attached asAnnex3.overlapping jurisdictions,andtoreducethenumberofexceptionstogeneralpolicy.

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3E

4.GOVERNMENT RESPONSE

The Government replied on May 19,2000 to Mr.Talbot and Mr.McDowell that allimmediate recommendations would be implemented. Subsequently the Governmentissued a formal notice from the cabinet of the Prime Minister's Office mandating thecessation offoresttimberexploitation in the areas reported by the mission,the deline-ation of protected areas as recommended by the mission, establishment of an Ad HocCommittee to monitor and control forest exploitation, and approving annual jointmonitoring of the NT2 project area with international participation. The texts of theGovernment's replyto Mr.McDowell and Mr.Talbot as well as thetext of its formal noticeare attached as Annex 4.

WORLD BANKLOGGINGSURVEYMISSIONTECHNICAI

REPORT

EE

ANNEX IF Y E L 0 0 C SO E 9 A- I ED C j. N -n& TE D- 0 '.

CONTE NTS

MAP # 3: OVERVIEW MAP OF BOUNDARIES AND SURVEYS 20

Table Headings 21

VehicLe Trip 1 22-23Vehicle Trip 2 24-25Vehicle Trip 3 26-29VehicLe Trip 4 30-33

HeLicopter Trip 1 34-37Helicopter Trip 2 38-43HeLicopter Trip 4 44-49

WORLD BANK(Helicopter Trip 5 50-51 LOGGING

SURVEYMISSION:TECHNICAL

REPORT

MAP#3: OVERVIEW MAP OF BOUNDARIES AND SURVEYS

Lao PDR - Nam Theun 2 Social- ~~~~~~~~~~~~~~~~~~~~~~~~and Environmental Project

fi P 1World Bank Logging Sre~~~~~~~- ~ ~ ~ ~~~~~~~+ ++ + + + Mission, May 1-1 1, 2000

OVERVIEW

+ ~~ ~~ ~~~~ ~~~~+ + + + + Helicopter surveys-- Vehicle Surveys

(off Main Roads)

-]-Main Roads

Villages, Hamlets

ProPosed Resettlement4 '-ii ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Sites (NTEC)

At ~ ~ t' j~; ~ mNBCA, Extension,NnTheun ~~~~~~~~~~~~~~~~Corrdor (IUCN)

~~~~~~ ± ~~~~~~~~~~~~~~NBCA (CPAWM)VA'~~~~~~~~~~~ ____ ~~~~~~~~~~~~+Main Rivers

- -~~~~~~~~~~~~~~~~~~~~~~~ *~~~~~~~~~a mminundation Level,

- - ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~3 SMeters (NTEC)

El Degraded Forest

j~~~~ ~ ~ ~ ~ ±~~e Bush / Shrubland

'S; ~~~~~~~~~~~Bare Rock

WORLD BANK I L- ,5~?f. ~ Scale: 1:375,000LOGRING Ai

5 0 15 20 25 kmTEHISSAL Ccortdinate Systerm: UTM Zone 48

REPORT J- Horizontal Datmn: Indian 1975

TABLE HEADINGS

Nav Point Navigation Point (pre-determined from satellite image) - on heli- No Distance to LB values (entry:---) has been extended forthose sites,where nocoptertrips only relevant logging activity was recorded by the mission.GPS Point = GPS Points (measured en route) - on both vehicle and helicoptertrips Type - Type of ObservationDistance to LB = Distance to the Logging Boundary marked by NTEC

L Logging,Age UndeterminedThe distancevalues shown inthetablesare not precise measurements,butindi- LN = Logging,Newcations.They report the distances of observations to the logging boundary as LO Logging,Oldshown on the NTEC map. 0 OtherObservation

When interpreting the distance values, it should be kept in mind that the GPS Observation = Narrative of Observationreceivers NTEC used during the boundary demarcations produced positional er-rors of up to 100 meters (before the US military turned otfthe intentional degra-dation of GPS in early May 2000). Photo(s) = Number(s) of Photos taken at Observation Point

The GPS receivers the team used during the logging survey produced positionalerrors of up to 15 meters (after the intentional degradation of GPS was turned GEOGRAPHIC COORDINATESoff).

All coordinates listed below (Nav Points and GPS points) are in the followingAll values have been rounded to the next lower multiple of 100.This has been coordinate system:done to compensate forthe GPS measurement error

- UTM, Zone 48A Distance to LB entry of 0 (zero) therefore indicates that an observation was WORLD BANSK

made within a distance of O - 100 meters from the nearest demarcated bound- - Horizontal Datum: lndian Thailand LOGGINGSURVEY

ary. (shift parameters to WGS84 :DX + 214, DY + 836, DZ + 303,Spheroid Everest) MISSsION,

REPORT

502oo 504,00 E 0 510,000 512000 14.000 516, 51 o Vehicle Trp I4 May 2000

Vehicle Trip 46 May 2000

§ Vehcle Trp 1 Black Numbers

VeNcle Trip 4: Red Numbers

§ ! R,!! _ gOBSERVATIONS9 Lcgging, Recenit

-Lgging, Age Undetermined

Logging, Old

Other or No Observation

OTHER FEATURES

Demarcated LoggingArea (NTEC)

Route

Background: SPOT Panchromatic52oQoo 504.O00 506000 506.000 5100000 512.000 514,000 516.000 518,000 Satellite Image, 17 Jan 2000

cfseft between slilt Inme and o btWORLD BANK

we mralInlfdL to the Inw uroyw of the opog9*PLOGGING MOp$ the slift Imae w4 referenoed to.SURVEY

TEMHNICAL Scah3 1:100,000R'EPORT Co.dinat .Sysem: UTM Zone 48

%3 Hoiwznti Daxmt Irndan 1975

VEHICLE TRIP 1, 4 MAY 2000: Nakai to NE End of Reservoir beyond Nam XotMcDowell, Goodland, Fetdkotter Ekawai, Khamteuk, Hoy, Manivong, Latsamay

GPS Point Distance to LB Type Observation2 1600 LN West of Nam Xot bridge (1000 islands area): skid track, less than 1 year old, cut off top log of Dipterocarpus Sp., less than 1 year old

3 1300 0 Dalbergia processing site, chipped of soft wood, less than 0.5 years old

4 --- 0 Nam Xot bridge: Pine loaded Vietnamese logging truck moving west wards. Driver said these logs are from "inside NTEC's marked

area..."4 --- 0 Dump of rattan at bridge,20 large bundles

5 0 0 5 km East of Nam Xot:Vietnamese logging truck"80K-0438" chainsawing pine (3, DBH about40 -50 cm) to repair road (photo

Robert).

6 inside LO logging,pine,20 trees,about 2 years old,left on site

7 0 0 NTEClogging boundary demarcation

8 2000 L westof Nam Xot bridge (1000 islands area):80 logs (number estimated),Dipterocarpus and some Pinus, numerous skid tracks in

the surroundingarea

CoordinatesGPS Point Easting Northing2 506771 1977920

3 507399 1978105-

4 509659 1971290--

5 514125 1975366

6 514124 1975245 70

7 514142 1975337

8 506247 1977782 GPSPoint 4 GPSPoint 4

WORLD BANK

GPSPoin 6~.' -P i-o 8SURVEYmISSION7~~~4 ~~TECHNICALREPORT

&GsPoPnint -6 dPS oint 7 GPSPoint 8

500000o 501t000 02000 50300 000 oo000 s065 OO 060 ooo s07000 608.000 609oooOBSERVATIONS

Logging, Recent

Logging, Age Undetermined

Logging, Old

Other or No Observation

OTHER FEATURES

Dernarcated LoggingArea (NTEC)

Rout

Background: SPOT PanchrormaticSatellite Image, 17nJan 2000Ofleeft between satelIte teage arkd other leetres

or- ~~~~~~~~~~~~~~are mainly due to the Inaccuracy of the top'graphlemapsthe ateli bmage wa referenced to

Scale: 1:50,000Coordinale System: UTM Zonie 48Horizonta Datum: IndIan 1975

WORLD BANK

SURVEYMSSIONJ

4TECHNICAL

,

REPORT

500,00 501.00 502,00 03,000 604,00 05,000 60600 507,000 506,00 60,000

VEHICLE TRIP 2, 4 MAY 2000: Nakai towards Nam MalouTalbot, Chamberlin, Flint, Khampheung, Xem

GPS Point Distance to LB Type Observation2 Inside 0 Good mixed forest.Stopped,as the area is a type of island - above high water level.Noted relatively recent elephantfaeces.3 300 0 3 way intersection.Side road (logging track?) going off to the southeast.Altitude 550 meters.4 Inside 0 3 way intersection. Road (new) leading toTalang.A lot of logging trucks and logs (Hopea, Shorea),all freshly cut.Altitude 1750 feet.5 Inside 0 Altitude: 1755 feet (Talbot). Map says 522 meters.7 Inside 0 Could not cross the bridge.Altitude 544 meters (Talbot).

CoordinatesGPS Point Easting NortIng ________________________2 506235 1970353 .

3 505692 1969710 ;4 504070 1970090 -

5 503899 1970049

7 502361 1971361

G PS Point 2 GPS Point 2

WORLD BANKLOGGING

- ~~~~~~~~~~~~~~SURVEYMISSION:TECHNICAL

REPORT

GPSPoint 4 GPS Point 7 E3

828 28000 826 000 8300 532 000 83 000 838000 838 000 540,000 842 000 644 000 848 0 4 0 8 0

8262000 628,000 83,0200 832,000 834,000 538.000 UO2.000 840,000 82,000 88.000 8,000 848,000 880,00

OBSERVATIONS OTHER FEATURES Background: SPOT Panchromatic Scale: 1:100,000Satellite Image, 17 Jan 2000 Coordinate System: UTM Zone 48

Z Logging, Recent DemrctdLoging Ofstbtinstlie =eadohrfsw Horizo~ntsI Datum: rIndian 1675WORLD BANK Area (NTEC) ame mWnIy due to the Irnaocurroy of the topographic

,.~~~~~~~~ ~ ~~ ~~ ~ ~~~~~~~~~~~ the eeM IIhe Imeew eeee o

LOGGING Logging, Age Undeteffmined Route mp h aelt "wsrfrne oSURVEY

MISSION TECHNICAL Logging, Old

REPORT

Ea Other or No Observation

VEHICLE TRIP 3, 5 MAY 2000: Nakai to Resettlement Sites 21-25McDowell, Talbot, Goodland, Flint, Xem, Loy, Soukhatha, Phayboun, Khamphone, Vixay

GPS Point Distance to LB Type Observation10 0 L Logging.BPKPUnit4.Resettlementarea21.LoysaysthatMTECdiscoveredandstoppedthem.12 0 L NMany fresh stumps, large area of current cutting (within past few days to 1-2 months).This is edge of resettlement area 22

and cuttirg is throughout it apparently.15 0 LN Some new logs and cutting.

CoordinatesGPS Point Easting Northing10 528384 1951908 12 530180 1951492

~~~~~~~~- ,

GPSPoint 15 GPSPoint 15

GPS Point DistancetoLB Type Observation Coordinates

16 0 0 Edgeofsavannah,startofopen pinesavannah. GPSPoint Easting Northing

17 0 LN Savannah pines.Much logging,many logs. 16 536759 1947224

17 538819 1946547

S ~~~~~ R_

WORLD BANK

LO6GIN6PSURVEY

MISSION TFCHlNICAL

REPORT

W3 GPS Point 16 GPS Point 17 GPS Point 17

GPS Point Distance to LB Type Observation Coordinates18 0 LN Loggingherethisseason.Thisisinreservoirinundationarea. GPS Point Easting Northing20 900 0 Rolling country with large pines,some broad leaf trees. Logs to 45 inches diameter. 18 538772 1947565

Logyard,pines. 20 542797 1946540

21 500 L Savannah,smallerpinesscattered.Sizeofpinesduetoshallowsoil?Somelogging. 21 547300 1949141

4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

WORLD BANKLOGGING

< 4' 't i = X - - E 0 6 G I N 6~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ORY

MISSION:TECHNICAL

REPORT

GPS Ploint i8 GPS Point 18 GPS Point 20OE

50 5 0 506,000 50B, 000 s 512.000 514000 516,000 518.0 Vehicle Trip 14 May 2000

Vehicle Trip 46 May 2000

Vehide Tnp 1: Black Numbers

Vehide Trip 4: Red Nunbers

OBSERVATIONS* Logging, Recent

Logging, Age Undetermined

Logging, Old

Other or No Observation

OTHER FEATURESDemarcated LoggingArea (NTEC)Route

Background: SPOT Panchromatic502.00 504.000 506.000 508.0Q0 5101000 512,000 514.000 516.000 518,000 Satellite Image, 17 Jan 2000

Offsets betAwen astalie I[mape ard other feetwesWORLDBANK ore mainly deie to fth Irwouaoracy of fth topegrphb;

LOGGING maps the satfilrei imageswe mreferetoed MRSJRVEY

MISSION:TECHNICAL Scale: 1:100,000

REPORT Coordinate System: UTM Zone 48Koi Horizontal Datum: Inchan 1975

w~vz

VEHICLE TRIP 4, 6 MAY 2000: Nakai to Thousand IslandsChamberlin, Goodtand, Flint, Xem, Loy

GPS Point Distance to LB (m) Type Observation Coordinates

6 1300 LN two fresh pine stumps; 96 pine logs, skid trails GPS Point Easting Northing

7 1400 L fourskid trails, eitherside of road 6 505967 1974293

9 2000 LN freshstumpandskidtrails 7 505882 1974356

10 2000 LN fresh pine stump 9 505248 1975087

11 2100 LN threefreshpinestumps 10 505253 1975151

12 1600 L Dalbergia stump I 1 505307 1975185

12 506820 1977971

WORLD BANKLOGGING

'~~~~'N ~~~~~~~I.4 ~~~~~MISSION

GAS Point- 11 ips Point 12 I

GPS Point Distance to LB (m) Type Observation Coordinates13 2000 0 Dipterocarpuslatusyard,821ogs GPS Point Easting Northing

13 506239 1977786

TECHNICAL

REPORT

3 GPSPoint 13 GPSPoint 13

GPS Point Distance to LB (m) Type Observation Coordinates14 1300 0 Shorea/Hopeayard GPS Point Easting Northing15 600 0 extensive Dalbergia yard (some pine) 14 505932 198214616 --- 0 rockyroad,noskidtrailsseen 15 505037 198391117 --- 0 Shifting cultivation west of road on far side of valley. 16 504945 1983767

Then intensive Hmong (?) population densities both sides of road. 17 505163 1989053

r

7-

A- ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ -

.. , ._ -e D ,- / . MISSION

GPS Point 15GPSPo 5TECHNICAL

REPORlT

GPS Pomnt 15 GP5PPoint 15 9

-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~o -

5OOD ttt ooo MOOD 6200o 5340 83r O0 5S80O0 e4U000 541000 544b0 M e4io u e 20Ow 554,040

OBSERVATIONS POINT TYPES OTHER FEATURES Backgrounid: SPOT PanchironmatiSatellite Image, 17 Jan 2000

Logging, Recent GPS Points Demiarcated Logging offeeb beweensebihte Imeg ard oKtlr fealres

WORLD BANK 1 2 3 4 (£iasured enroute) Area (NTEC) are nmaWy dua to te Ine=rwyo ffth IopgrspMc

LOGGING Lnoging Agea Undtemined maps the seteitte bniae vas referenoed to.

ml SURVEY N P1t Flight PathMISSION -- Navi Pis

TECHNICAL Logging,ROld p r ] ePSrPdntned fmmRFPORT satellite image)

ua ~~~~~Other or No Observation

HELICOPTER TRIP 1, 6 MAY 2000: Southeastern Part of Nakai Plateau(Nam On), Route 12 to Vietnam Border

Talbot, McDowell, Fe[dkotter, Khamphone, Soukhata

Nav Point GPS Point Distance to LB (m) Type Observation2 --- --- 0 Logs,windfalls, pine logs, logging roads

--- 1 1000 LN Recentstump.4 --- --- 0 No logs or recent stumps.

5 --- --- 0 No logs or recent stumps.

6 --- --- 0 No logs or recent stumps.

7 300 L Logging.8 2,3 100-300 LN 30 fresh stumps,big conifer logs and stumps.9 4 400 LN Fresh conifer stumps with saw chips.--- 5 200 LN lots of stumps

coordinates-Nav Point Easting Northing2 536263 1952592

4 537901 19537765 539892 19532476 540922 19538057 543450 19523788 544824 1951859

9 544139 1950600 NAVPoint 11 NAVPoint 9 NAVPoint 8

G PS Point Easting Northing _

1 536664 19531832 544953 1951860

3 544779 1951894 Cs

4 544196 1950677 WORLD BANK

5 546057 1950719 SREMISSION

-- =---- ~~~~~ - -~REPORTNAV Point 9 NAVPoint 9 GPS Point S E

I -- c ? V-½-

Nav Point GPS Point Distance to LB (m) Type Observation6 300 LN 8fresh logs,big stump

--- --- inside L Between Nav Points 12 and 13:many logs and stumps.13 --- 0 No evidence of logging.14 --- --- 0 No evidence of logging.15 --- --- 0 No evidence of logging.16 --- 0 No evidence of logging--- --- --- O Left predefined route between Nav Points 16 and 17.Two small villages on NBBCA side of escarpment. No

incursionsobservedintonortheastfaceofescarpmentfrom Route12.Newroadtonorthwestandfurtheruphill from Vietnam border. No logging.

17 --- --- 0 No evidence of logging.18 --- 0 No evidence of logging.19 --- --- 0 Noevidenceoflogging.20 --- 0 Noevidenceoflogging.21 --- --- 0 No evidence of logging.22 --- --- 0 Noevidenceoflogging.23 --- --- 0 Noevidenceoflogging.

Coo rd inate sNav Point Easting Northing1 3 548603 1951529

14 551 391 1 951 29515 552549 1 951 504

18 551 465 195347219 548390 1955538

__ ~~~~~~20 545535 195534021 544119 1957443

GPS Paint 6 NAY Point 13 NAYVPoint 17 22 542138 1955608

-~~~--.~~~~~ ~~~ ~~~ ..~~~~~ -~~~23 540595 1957151

GPS Point Easting Northing6 546205 1951310

7 537869 19581978 536201 1958046

WORLD BANKLOGGING

SURVEY

TECHNICAL

KE NAV Point 21 NAVPoint 22 GPS Point 23

Nav Point GPS Point Distance to LB (in) Type Observation24 --- 0 Logs visible but no stumps.25 7 --- 0 Logging road,extensive shifting cultivation nearby.26,27 8 200 LN Upto200freshstumps.--- 9 1500 LN 50 logs and stumps--- 10 1200 LN 80 logs and fresh stumps.

11 900 LN fresh stumps all around,large logging road30 --- --- 0 No evidenceof logging.--- 12 0 Log bridge (five log lengths) across Nam Theun.

CoordinatesNav Point Easting Northing24 538312 195738525 537080 1957941

26 535778 195876827 536590 19573673 0 530363 1958142

GPS Point Easting Northing NAVPoint 24 NAVPoint 25 NAVPoint 26,279 533615 1956653

11 533013 1956478 -

12 527666 1958208

LOGGING12INCIPHiNF- ~~~~~~~SUIRVEY

TECHNICAL

REPORT

GIPS Point 9 GPS Point I11 NAYPoint 30 K

INAN"k~~~~~~~~=: d'- tREAS -z

514000 516000 518 520 OD0 524000 526, 5280 5200 5322

OBSERVATIONS

Logging, Recent

... ~~~~~~~~~Logging, Age Undetermined

Logging, Old

Other or No Observation

POINT TYPES

... GP$ Points1 2 3 4 (measuredeanroute)

Navigation Points(pro-determined fromsatellite image)

OTHER FEATURES

Demarcated LoggingArea (NTEC)Flight Path

A ~~~~~~~~~~~~~~~~~~~~~~~~~~Scale: 1:110,000CoordInate System: UTM Zone 48Horidzontal Datum: Indan 1975

Background: SPOT Panchromatic________ ~~~~~~~~~~~~~~~~~~~~Satellite Image, 17 Jan 2000

OfWbbemnslRtIlaidhRln e ad* ewetJs

s MP E, - IeN lr maewas refeemnd to.

MISSIN4f

REPORT

8 14.000 516,000 518000D 520,000 522,00 524-000 6m 000 528,000 530,000 53200

HELICOPTER TRIP 2, 6 MAY 2000: Central Part of Nakai Plateau, North-east of Nam Theun River

McDowelL, Tatbot, FeLdkotter, Kamphone, Hoy

Nav Point GPS Point Distance to LB (m) Type Observation

1 0 Closed, mostly deciduous forest. No logging.

2 --- --- 0 Closed, mostly deciduous forest.No logging.

--- --- --- 0 Between Nav Points 2 and 3.Tall forest,mixed pine and deciduous.Followed fairly large, old looking logging road.

3 --- --- 0 More open mixed forest. No logging.

1 inside LN Logging, in legal area.4 --- 1100 LO Stumpsandlogs,butold.

CoordinatesNav Point Easting Northing

1 528035 19597142 529192 1960842 - ..

3 526119 19636514 527285 1964441

GPS Point Easting Northing

1 525268 1963668 NAVPoit 1 NAVPoint 2

$ S WORLO BANKLOGGINE3SURVEYM ISSION

NAVPot 3GPSPoint1NAVPoi4TECHNICAL-REPORT

NAV P.m-? . - Gs Point 1 NAVPoint 4

Nav Point GPS Point Distance to LB (m) Type Observation5 0- Largely pine forest,more open,tall.Old unused logging road.

6 --- 600 LN Fresh stump and log.--- 2 600 LN Two fresh stumps and logs.

3 --- 0 Four logs,fresh. No stumps.

4 600 LN Logs & stumps. Mostly old, one fresh.

5 500 LN Fresh logs and stumps,one log still beside stump.

6 --- 0 22 fresh logs.

7 700 L More open forest,tall,mostly pine. Logs,scattered stumps.(Old?)--- 8,9 500 LN Landed. Stumps, est.3 months old,with pieces of logs and slash.Stumps 40 and 44 inches diame

Stumps are hard to see in tall grass,3-4feet tall.Over 12 other stumps nearby,cut within past 6 months.

Area burned (intentionally to hide logging?).Mostly pine forest,trees about 100 feet tall.

B ~~~~ ~ ~ ~ ~ Coordinates

Nay Point Easting Northing6 530186 1964677

GPS Point Easting Northing2 530181 1964613

3 530407 1964547NAV Point 5 GPS Point 2 GPS Point 6 4 530021 1964927

* 5 530061 19649866 529308 1965265

-~~~ ~~ 7 528853 1965519

8 528815 1965300

9 528789 1965330

LOGGING

MISSION

TECHNICAL

~jJ Gpspoint 7 GPS Point B GPS Point 9

m~~~~~~~~~~-~- .F- '

Nav Point GPS Point Distance to LB (m) Type Observation8 0-- Pine forest. Logging roads "everywhere". No cutting seen.--- 110 1500 L Several stumps, 2 fresh logs and a number of older ones.

11 1300 LO Old stumps (5) and scattered logs.12 800 LN Fresh stumps and logs. Fresh logging track.

--- --- 700 - 1300 L Followed logging track eastforfive minutes,passing stumps over 1 km inside protected area.Then returned.9 13 --- 0 Over 30 fresh logs and many older ones.10 --- --- 0 Logging roads but no stumps.

300 - 400 LO Between Nav Points 10 and 11: many old logs and stumps.11 --- 300 LO Old logs and stumps.--- 14 --- 0 New logs but no stumps.12 --- --- 0 12freshlogs--- 115 900 LN Fresh logs and new stumps. Old stumps.14 --- --- 0 Old logs (windblown?).15 --- --- 0 No evident logging.16 --- --- 0 No evident logging.--- 16 400 L Manystumpsandlogs.Firemadeitimpossibletodetermineagefrom chopper.

CoordinatesNav Point Easting Northing

'~~ '~~~~i'ii~~~ --.... ~~~8 527726 1966041=iw w 9 . 9 525493 1965266

-*- =-;-)- p:^*--. 10 525841 1965894

. 11 526468 19662821 2 526723 1966923

14 528340 1967712

NAVPoint 8 GPSPoint 12 NAVPoint 9 15 527512 1968247

1 6 526175 1968848

1 1 7 525198 1968327

18 524175 1967459

19 524433 1968752

GPS Point Easting Northing WORLD BANK

12 526150 1965643 ~~~~~LOGGING1 2 526150 1965643 ~~~~SURVEY13 525494 1965411 MISSION:

TECHNICAL14 526337 1966080 REPORT

NAVPoint 12 GPSPoint 15 NAV Point 14 15 527304 1966619

Nav Point GPS Point Distance to LB (m) Type Observation17 -- 0 No evident logging.18 --- --- 0 No evident logging.--- 1 7 300 LN One recent stump.1 9 --- --- 0 Logging area.20 --- --- 0 Mostly broadleaf trees. No logging.21 --- --- 0 Mostly broadleaf trees. No logging.--- 118 400 LN Logging road, over 15 fresh stumps plus some logs.22 --- --- 0 Fresh log yard. Logging road.Good,current maintenance.--- 119 400 LN Veryfresh stumpsand logs,somestill notstripped.23 --- 300 L High forest dominated by pine. Numerous stumps.24 --- 900 L High forest dominated by pine. Numerous stumps.--- 20 400 LN High, mixed forest dominated by pine.Stumps,much logging. Fresh. Fresh logging roads.--- 21 500 LN High, mixed forest dominated by pine. Stumps, much logging. Fresh. Fresh logging roads. Heavy logging,

lots of logs in yards.25 --- 900 LN High, mixed forest dominated by pine.Stumps,much logging. Fresh. Fresh logging roads.--- 22 700 LN Fresh cutting. Hard to see extent because of thick canopy.

CoordinatesNav Point Easting Northing20 525832 1970259

21 521516 1972687

22 518418 197150923 519317 1968408

24 517612 1969441

25 515770 1971547

NAV Point 21 GPSPoint 18 26 514293 1973121

27 516115 1973447

v-~ GPS Point Easting Northing16 526003 1968923

17 524189 1967317

18 519218 1971861LOGGING 19 519218 1968486SURVEY

MISSION : 20 516141 1970995

RECHNICAL 21 515923 1971020EE NAVPoint 22 GPSPoint 19 GPSPoint20 22 515209 1971731

Nav Point GPS Point Distance to LB (m) Type Observation--- 23,24 800 - 1100 LN Very recent cutting, hundreds offresh stumps, intensive logging covering an estimated 40 ha.26 --- --- 0 No evidence of logging.

27 --- --- 0 No evidence of logging.

28 --- --- 0 No evident logging.

29 1100 L Burned stumps in several areas (age?).30 --- --- 0 Sparser more open pine woods. No evident logging.31 --- 0 Sparser more open pine woods. No evident logging.32 --- --- 0 Sparser more open pine woods. No evident logging.33 --- --- 0 Sparser more open pine woods. No evident logging.34 0 Sparser more open pine woods. No evident logging.

CoordinatesNav Point Easting Northing28 516307 1972716

29 517151 197248830 517439 1973178

31 518322 19-72948

32 518571 1913773

33 519204 197264134 517994 1972123 GPSPoint 23 GPSPoint 24 NAVPoint 28

GPS Point Easting Northing1

23 514784 1972067

24 515001 1972249

WORLD BANKLOGGINGSURVEYMISSIONTECHNICALREPoRT

NAV Point 32 NAV Point 33 NAV Point 34

488000 000 000 494 0DO 000 800000 02000 504 000 5

-'' } i OBSERVATIONS

_ ,,-1s 2 + tZ,4Si S * :E 8 ! !uti'=! j5.Logging, Recent

§ Logging, Age Undetermined

Logging, Old

Other or No Observation

POINT TYPES

GPS Points1 2 3 4 (measuired en mute)

- ~~~Navigation Pdnts71 E 9 E (pre-deterrnired from

satellite inmage)

OTHER FEATURES

Area (NTEC)

Flight Path

.~~~~~~~ ~ ~ ~ ~~~A N~~~~~~~rey'ecL.r:n9 tlis birvJ Arn 'CcaiL o1tisnrh of -sfloanaa Caystc:here.

Scale: 1:126,000

Coordinate System: UTM Zone 48Horizontal Datum: IndIan 1975

Background: SPIOT PancrOormatc0 Satellite Image, 17 Jan 2000

Coffst betseen satasille image aw oRse testre

WORLD RANK wre mainly due to the nrsracy of the toRogrephle

LOGGING maps Rhe Seibllarlee Iage WS referenoed to.SURVEY

m ~~~~~480.000 490,00 492.000 494.000 498.00 498.000 50D.000 502.000 504.000 50O.00 508,000 510.000 4~

wr;t>j0S='- - -~ __ -~

HELICOPTER TRIP 4, 7 MAY 2000: Lak Sao along Border of NorthernCorridor to Nam Malou Embayment

Talbot, Goodiand, Chamberlain, Feldkotter, KhamLeuk

Nav Point GPS Point Distance to LB (m) Type Observation1 --- 0 2-3 ha steep slope fresh shifting cultivation, burning.2 --- a 12 ha steep oldershifting cultivation;small fresh outliers.3 --- 0 Continuousagriculture;extensive patches of grassland on top of scarp. No logging seen.4 --- 0 Shifting cultivation, 1 00s of ha;few dwellings.5 --- 0 Ban Nava terraces, paddies.

6 --- 0 Shifting cultivation between scarp and crest.7 1500 LN Nam Malou,newactive logging road; rich mixed forest.8 200 LN Widespread log piles and fresh stumps;fresh skid network.9 300 LN Fresh stumps; new skids; logging in progress.

CoordinatesGPS Point Easting Northing ]1 504755 1989412

2 502816 19902913 490937 2003857 04 483549 20092975 488567 19947566 482943 1997511 7 488188 1976846 GPS Point 4 GPS Point 5 GPS Point 68 490335 1975400 -=

9 510138 196454510 508755 1965152

h - - -. e X ei,v . 0 - __ WORLD BANKLOGGINGSURVEYMISSION:

_ =. g -_ - TECHNICAL

REPORT

GPS Point 8 GPS Point 8 GPS Point 9 @5

_ . ;f - ;: ;--.0 XrX-; -=:-=-- = ,= +---* - 9--

Nav Point GPS Point Distanceto LB (m) Type Observation2 10 500 LN Newstumpsandoldlogging.3 --- 400 LN Shifting cultivation;fresh stumps,logging trails.--- 11 400 LN Olderlogging;fewfreshstumps.--- 12 1500 LN Ridge:selective commercial Pine logging in mixed forest.5 --- 900 LN OpenPinesavanna;freshstumps;oldyard.6 --- 300 LO Abandoned old logging & stumps.

7 13 100 LN New and old stumps surrounded by dense intact forest.

CoordinatesNav Point Easting Northing2 508776 1965167

3 506653 19667145 501038 1967905

6 499688 19683027 498296 1968672

8 497117 1969609

9 496591 197064610 496037 1971428

NAVPoint 2 NAV Point 3 11 495298 1971243

GPS Point Easting Northing11 504243 1968936

12 503122 196841213 497271 1969401

14 492779 1973010

WORL) RABNKLOGGINGSURVEY

MISSION TECHNICAL

REPORTQE GPS Point 11 NAV Point 6

Nav Point GPS Point Distance to LB (m) Type Observation8 --- 0 Grassland patches in mixed Pine forest.

9 --- 200 LO Old Pine logging.10 --- 200 LO Old logging.

11 400 LO Old Pine logging.12,13 --- 200-500 0 Dalbergiayard; people;truck.

14 14 1000 L Big Dalbergia yard and stumps.--- 15 1500 LN FreshPinestumps;extensivelogging.

CoordinatesNav Point Easting Northing12 494162 197297614 492912 1972991

GPS Point Easting Northing15 491749 1973161

16 491505 1973541 _ .

NAV Point 12 NAV Point 13

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NAV Point 14 GPSPoint 1 5

Nav Point GPS Point DistancetoLB(m) Type Observation--- 16 1300 LN Log trails & yards.

--- 17 600 LN Big yard & skid trails; Dipterocarp logs.--- 17 600 LN Big yard & skid trails; Dipterocarp logs.--- 18 200 LN Fresh Pine stumps,yard,skid trails.

CoordinatesGPS Point Easting Northing17 491362 1974401

17 491362 197440118 490845 1974810

GPSPoint 15 GPSPoint 17

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E GPSPo0mt 17 GPSPoint 18

Nav Point GPS Point Distance to LB (m) Type Observation--- 19 200 LN Skidtrailsuptoridge.--- 20 700 LN Pine & Dipterocarp yard;scattered fresh stumps.

--- 21 700 0 Biggestlogyard--- 21 700 0 Camp,8 tents, people,tanker, Pine, Dipterocarp, few Dalbergia.

Coordinates ~~___GPS Point Easting Northing19 490568 197484620 489812 197579221 489490 1976506

GPS Point 19 GPSPoint 20

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GPSP6J'21 =~ - - - = GPSPdrnt 21

S-- . t- '--Y f Y-d'. __'-:

Nav Point GPS Point Distance to LB (m) Type Observation Coordinates21 700 0 Camp,8tents,people,tanker,Pine,Dipterocarp,fewDalbergia. GPSPoint Easting Northing22 1000 0 Logging (transport) road crossing crest. 21 489490 197650623 800 LN Fresh stumps. 22 489253 1976257

--- 24 400 LN New Pine stumps;old log pile. 23 490292 197729225 1100 LN Skid network underrelatively intact canopy. 24 490657 1977802

--- 26 1100 LN Skidtrails;stumps. 25 490120 197924327 800 LN Big Pineyard,road,fresh stumps,sawdust,tops,loppings. 26 492046 1978883

--- 28 inside LN Stumps. 27 495396 1977793--- 29 400 LN Skid trails 28 492411 1984908

29 492447 1987047

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3E GPS Point 21 GPS Point 24 GPSPoint 25

HELICOPTER TRIP 5, 7 MAY 2000: Lak Sao along Northwest Border of NBCAHeLicopter return flight to Vientiane

Talbot, McDowell, Goodland, Feldkotter, Chamberlin

Nav Point GPS Point Distance to LB (m) Type Observation--- --- 0 Nam Xot:foot trail, possible for motorbike; unlikely to be passable by4-wheel-

drive vehicles

--- --- --- 0 Ban Navang: Big village;followed a North East and an East foot trail. Both small, not 4-wheel-drive vehicleable;no

logging, no logging tracks,no observations on ogging.

--- --- --- 0 Reached boundary of NBCA,turned Northwards, parallel with Route 8. Had to turn back c. 5-10km before interna

tional frontier at about the level of the mini-hydro on the Nam Phou. No new roads seen, no commercial logging seen

inNBCA.(Note:A militarywoodenarch/gatewasseengoingeastwardsfromRte8inthedusktheeveningbeforeby

4-wheel-drive vehicle.)--- 1 --- 0 Large logging yard c. 1 km off Route 8 on a new looking road into Northern Extension.

photo Old Log processing facility Laksao

photos New Log processing facility Laksao

Coordinates .

GPS Point Easting Northing1 505482 2021234

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AN N EX 2MIVISSION AIDE MEMOIRE

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AIDE MEMOIRE

I. Introduction 2. After initial meetings in Vientiane,the mission visited the Nam Theun 2HydropowerProject (NT2) area from May 3 to May 7,and then returned toVientianeforfurther

1. As part of the preparation of the Nam Theun Social and Environmental meetings with the Government of Lao PDR (GOL), NTEC (the NT2 project develop-Project(NTSEP), a World Bank Logging and Watershed Management Mission vis- ers),and to participate in the workshop on the Watershed Management and Con-ited Lao PDR from May 1 to May 11,2000. The objectives of the mission were to servation Authority (WMCA) operational plan.Throughoutthis crowded schedule,investigate in the field various reports of illegal logging in protected areas the mission received full cooperation and logistical support from the GOL, whichneighboring the Nakai Plateau (site ofthe proposed Nam Theun 2 Reservoir area in arranged the field visit flawlessly. Under demanding field conditions during earlyKhammouane Province),and to participate in a workshop convened by the Minis- rains,the mission was nonetheless able to visit every site it selected. For those ef-try of Agriculture and Forestry (MOAF) on the draft"Operational Plan"forthe future forts and the hard work putting together a very successful and productive work-Watershed Management and Conservation Authority (WMCA) in the Nakai Nam shop,the mission expresses its appreciationto Mr.Sitaheng Rasphone,(Vice Minis-Theun watershed area.The mission was composed of Christopher Chamberlin (mis- ter, MOAF), Mr.Soulivong Daravong (Minister, Minister of Industry and Handicraft),sion leader),Christoph Feldkotter (cartographyand forestry),Christopher Flint (wa- Madame Khempeng Pholsena (Vice Minister for International Cooperation), Mr.tershed management), Robert Goodland (ecology), David McDowell (member of. Kamleuang Sayarath (Director ofNT2 Office), Mr. Bounsalong Southidara (Directorthe International Advisory Group to theWorld Bank on NT2),and LeeTalbot (mem- of the NTSEP Office), Dr. Phouang Parisak Pravongviengkham (Deputy Permanentber of the Environmental and Social Panel of Experts for NT2).The mission grate- Secretary,MOAF),Mr.Xeme Samountry (Director General ofthe Department of For-fullyacknowledgestheadviceandexpertiseofr.McDowellandMr.Talbot,whoac- estry, MOAF), Mr. Ken Philavong (Governor of Khammouane Province), Mr.companied the mission as independent observers in their respective capacities. Thaygnaphone Singthong (Deputy

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Governor of Khammouane Province), and many other provincial, district and na- the entire mission.AfullTechnical Report and Field Observation Notes on the fieldtional staff who madethis mission a successful one. In addition we would express visit, including maps, satellite imagery, and photos, is under preparation by theour thanks to Mr Jean-Christophe Delvallet, Mr. Peter Goldston, and Mr. Loy WorldBank,andwillbesubmittedtotheGovernmentbeforetheendofthemonth,Chansavat ofNTECfortheircontribution to the mission's work as well as to Mr.Stuart subjecttoWorld Bank management review.This Aide Memoire records some provi-Chape (IUCN Resident Representative) and to Ms. Latsamay ofhis staff, who pro- sional findings of the field visit, and proposes for Government and World Bank man-vided valued inputto the mission in the field.Linda Schneiderand Enrique Crousillat agement consideration a set of recommended actions to respond to the situationparticipated helpfully in mission discussions,and theWorld Bank Liasion Office pro- encountered in thefield.vided efficient and cheerful support.

5. Methodology.The mission and country counterparts (17 people) agreed to a spe-cific set of procedures and criteria to collect data on logging activities. Recent satel-

II. Status of Logging in the Nam Theun 2 Project Area. lite imagery (January 17,2000) was used to identify potential logging activity in

3. The mission objectives were shaped by three considerations: the long standing the project area.A map indicating the permitted logging boundaries in and aroundunderstandings between the GOLand the World Bankthat natural resources in the the Nakai plateau, based on expected reservoir levels,was used to locate those po-protected areas of the NT2 project would be sheltered from logging, road building tential sites in areas protected or otherwise off limits to logging. That map waspndrotetledeareas ofsthelTpoewudbed frconciselyinNTSEPaidememloggirang, rad buldn superimposed on the satellite imagery to assist in the identification of off limitsproject documents, the need to continue with periodic visits of World Bank teams sites. The provincial forestry staff have marked the off limits boundaries in the fieldto the project area to monitor current conditions; and unconfirmed verbal reports according to the map and its coordinates, so that loggers can limit their activityconcerning illegal logging in protected and offlimits areas accordingly.Themissionsawevidenceofthose markingsduringvisits in thefield

4. Mr.Talbot and McDowell wrote after the field visit to the Government concerni'ng 6. The map analysis was followed up by visits to the potential sites and others alongtheirindependentassessmentofthe logging situation in theprojectarea and their thetrip route using Global Positioning System receivers,altimeters and various to-recommendations (their letter is attached as Annex 1 ).Their views are shared by pographical and operational maps.The field personnel was formed into two

teams of 8 people

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each, with a leader,a field note taker,a photographer,and a navigator.Those with (which represents most of the watershed area forthe NT2 reservoir) remain invio-detailed local knowledge of forestry conditions were assigned to both teams, as late. No evidence could be found of logging in and around Ban Navang and nearbywas at least one forester.Teams visited sites by 4 WD vehicles, or by helicopter if villages in the heart of the NBCA, for example. Nor did the mission identify anysiteswere inaccessible by road.Helicopterteamswere limited to 5 people.Atotal of active logging roads entering the NBCA along those parts of Routes 8A and B and8 field trips were carried out, covering the reservoir boundaries, the boundary of Route 12 that skirt either side of the NBCA up to the Vietnam border.This positivethe proposed Khammouane Limestone corridor,most ofthe east and west bounda- finding extends to much of the main corridor area to be included in the NBCA,theries of the core NBCA, and some of the core area itself well north of the proposed Khammouane Limestone corridor around the northwestern end of the reservoir.reservoir.A total of 152 sites with GPS coordinates were visited by air and land dur- Further,the mission was allowed completely unfettered access to all sites selecteding the eighttrips. forfield visits.

7. The teams searched sites for evidence of recent logging (within the last two dry 9. Nearer the proposed reservoirwhere commercial logging has been active for manyseasons of 1999 and 2000); recently cut stumps were the primary evidence, with years,the mission discovered over 40 sites that exhibited logging activity in offlim-otherfindings on logging activity also noted.GPS readings,accurateto within 5-15 its areas.These are being further categorized fortheTechnical Report by distancemeters,were noted forall sites. It should be noted that this methodology permitted from the nearest off limits boundary, by sub area, age of logs/stumps, and by typea reconnaissancesurvey, nota comprehensiveinventory, oflogging activityin offlim- of logging activity.its areas. The off limits areas neighboring the Nakai plateau are vast, and thus themission could only examine a proportion ofthe total protected and off limits area, 10. Based on the reviews of Field Notes and GPS coordinates at this stage, four clearwhich amounts to well over 3700 km2. However,the use of helicopter overflights areas of serious logging infractions (each including several GPS recorded sites) canand satellite imagery helped the team to examine closely the most of the long bor- be identified.They are shown in the map in Annex 2 as areas A, B,C,and D. A full listders of the core NBCA for any major logging incursions. of the GPS coordinates forthese areas will be provided in theTechnical Report,along

with more detailed field notes.The findings in these areas are summarized briefly8. ProvisionalFindings.The mission was gratified to discoverthatthose parts inspected below:

of the core area of the Nakai Nam Theun National Biodiversity Conservation Area

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AreaA. NBCA Area to the north ofthe reservoir between the Nam Xot and the Nam Area D.ResettlementSites south of Nakaitown along the western boundary oftheTheun (rivers): many sites in three groups were the areas of systematic logging, proposed reservoir: logging is systematic and large scale in areas adjacent to these

with hundreds of stumps in some locations and logging roads extending over 1 km future resettlement sites for oustees from the inundated area. Community basedinto the NBCA from the off limits marked boundary .Other scattered sites of log- harvesting of commercial grade trees figures prominently in the livelihood modelging activity were also found between the two rivers. Lao law prohibits logging at for resettled villages,a plan now compromisedto an unknown extent by logging ofthese sites becausethey are in a Government decreed protected forest. high value trees in the area.The site is production forest intended as a reserve for

the future resettlers, but is not yet formally designated as such.AreaB.'Thousand Islands Area"on the eastern side of route 8from BanThalang toBan Namyan: logging is widespread and systematic,but highly selective in this area,focusing on high value trees, with fresh stumps, logs, and skid trails in evidence. 11. The legal status of the four areas described above varies, and thus the nature oftheThis area is within the Khammouane Limestone Corridor and is a region of small infractions also vary. In Area A, the mission regards the infractions as evidence ofhills which will be partly inundated by the . proposed reservoir.The reservoir is- the weak monitoring and enforcement capacities ofthe provincial and district forlands in this area will be valuable assets c for biodiversity conservation, eco-tour- try stak in a nd prorced apa.ities ot C n and districtifor

ism,and ecratio. NTC hs reuestd tat te ara nt beloggd de tothe estry staff In a clearly defined protected area. Areas B, C, and D have ambiguousism, and recreation. NTEC has requested that the area not be logged due to the legal status in terms ofthe legality of logging.ln the view of the mission,such log-difficulty of marking the very small reservoir and non-reservoir patches in the area. ging activities, if not strictly illegal, nonetheless are contrary to the spirit of the

Area C. Narn Malou Area on the northwestern side of the reservoir in the understandingsbetweentheWorld Bankand GOL.Moreover,loggingwasaprovedKhammouane Limestone Corridor: logging is widespread and systematic between by local authorities or went ahead over objections from NTEC in those areas.Thisthe reservoir boundaries and the crest of the escarpment, with many sites identi- demonstrates to the mission the difficulty of limiting a highly remunerative indus-fied .5 km or more from the off limits marked boundaries.The area has notyet been try in a poor country when the protected status of the areas in quetion is ambigu-formally included in the NBCA as a protected area. ous,when powerful local companies are contracted to carry out the logging, en-

forcementis weak,and boundaries themselves are in doubt.

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12. Conclusions and Recommendations.The mission regards the infractions as serious. * GOL officials welcomed the mission's example of international participation in theAt the same time, it is also true that the core area of the NBCA visited bythe mission monitoring of the NT2 project, and expressed their interest in establishing an en-remains protected. In this context, the World Bank mission and the independent during mechanism based on the mission's example;andmission observers remain fundamentally supportive of continuing with project * NTEC representatives shared the view that uncontrolled logging would be inimicalpreparation.This conclusion derives from several additional considerations: to the NT2 project and that the current infractions must cease.

* MOAF officials and GOL generallywelcomed the work ofthe mission,facilitated it 13. Those considerations,while encouraging,also pointto clear risks ofcontinuing NT2without restriction,discussed openly and franklythe problems in managing com- and NTSEP preparation without additional confidence enhancing measures. Log-mercial logging in the current circumstances faced by the country, and offered co- ging in Lao PDR is the third highest source of the country's foreign currency earn-gent suggestions on how to handle,and if possible, remedy the problems found by ings;the system of allocating logging quotas and contracts encourages irresponsi-the mission,thus demonstrating a commitment to natural resource protection un- ble logging practices on the part of contractors and sub contractors; and interna-der challenging circumstances; tional demand for and investment in the exploitation of Lao forests is growing, as

* The infractions occurred during a deep downturn in the regional economy and an evidenced by a new, very large timber processing plant in Laksao bordering theacuteslowdown in NT2 projectactivity ( onlyvery recently reversed),convincing NBCA.Theindustry,therefore,will notsubmittoregulation andcontrolseasily.many actors that logging,not hydropower,would be.. Lao PDR's lifeline;

* the infractions involve legal grey areas in three of the four cases; decisive GOL ac- 14. Logging infractions in the NT2 project area thus remain a risk to the World Bank'stions, both legislative and administrative, can help ensure that such infractions do reputation,to compliance with World Bank policies,to the NT2 Project's social andnot recur; environmental objectives,to the long term viability of the NT2 reservoir,and to Lao

PDR's natural resource endowment.The mission and indeed Lao counterparts agreed

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that only decisive and consistent action from GOL could reduce this risk overtime, long agreed by GOL to be included in the Nakai Nam Theun NBCA, particularly theand would demonstrate the Government's commitment to carry out NT2 project corridor to the Khammouane Limestone NBCA which would incorporate the Namunderstandings and agreements.The GOL also urged the mission to considerthat Malou watershed on the edge of the proposed reservoir,and also the other exten-only hydropower development could serve as a viable development alternative to sions already incorporated in the NBCA (the upper Nam Kata watershed,the east-large scale logging forthe foreseeable future. ern upper Nam Phao watershed),and the southern corridor linking the Nakai Nam

15. Recognizing that the infractions are serious,the mission,with encouragement from Theun NBCA with the Hin Nam Noi NBCA;the two independentobserver on the mission*and baNTEC proceed to prepare a site plan for the resettlement areas delineating village

the two independent observers on the missiontan bas enpandprls ofn and communityforest parcels,so thatGOL can take the necessary administrative orfered by Lao counterparts themselves, presents to the Government and World Bank lglsest ls uhaest omrillgigmanagement the following proposed steps to control illegal and off limits logging

in the NT2 project area: 16. Forthe longerterm,the mission proposes that Government and the Bank collabo-rate on a program of confidence building innovations in the NT2 Project, as sug-

* Government enforce with immediate effect the prohibition of illegal logging in the rete by L dring th misinth would impove the omPlianc an trn-present NBCA; ~~~~~~~~~~~~~~gested by GOL during the mission,that would Improve the compliance and trans-

p Goveresent issueNB n immediate orderto haltallcommerciallogginginandad.. parency of logging operations and provide timely information on the status of natu-* Government issue an immediate order to halt all commercial logging in and adja- rlrsucsadtecmuiydvlpetpormiteepne BAa

cent to all resettlement areas of the project, now and until resettled villages as- folows:sume control over the forest resources;

* The Government proceed with administrative or legal action to halt all logging in * Joint GOL-World Bank monitoring of natural resource protection and communitytheThousand Islands area ofthe reservoirand in the areas bordering the proposed development in the expanded NBCA by means of annual monitoring missions ofreservoir near the Nam Malou and Its watershed. reservoir nearthe Nam MalouandiWorld Bank and at least two eminent international experts, acceptable to the World

* Government proceed with legal steps to establish with precision the boundaries of Bank, overthe course of the NTSEP project preparation and implementation,withthe current NBCA, and take additional formal, legal steps to add areas (extensions) sharing of mission costs between theWorld Bank and the GOL;

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* continuation of such arrangements forjoint international/WB/GOL monitoring at serve as official counterpartto the annual Joint Monitoring missions.The missionWMCA expense after the close of NTSEP, but with participation by the World Bank welcomed this proposal.subject to available funding and mutual agreement with GOL;

* Submissionofsuchannual monitoring reportstothe BoardofDirectorsoftheWa- 18. GOL indicated thatit would communicate to theWorld Bank by the end of Maytershed Management and Conservation Authority and immediate publication or 2000 their formal decisions on the proposed steps. It was agreed that such GOLpublic access to such reports; decisions would be incorporated in the forthcoming Technical Report of the mis-

* Development of a capable monitoring unit in the proposed Watershed Manage- sion if received before end May.ment and Conservation Authority, as a priority near term activity in the develop-ment of the WMCA, to provide data, reports, and logistical support to such mis- III. Watershed Management Operational Plan Workshopsions;

* Including the carrying out of such annual monitoring missions and preparation and 19. Background. During the last World Bank NTSEP mission in January 2000, GOL pro-submission ofsuch reports as part ofthe overall legal framework ofthe NT2 project. posed to engage a consultant with its NTSEP PHRD grant funds to prepare an op-

erational plan that would build on the conceptual and organizational work of the17. GOL indicated that the above proposals were in principle acceptable and proposed Environmental and Social Management Plan forthe Nakai Nam Theun Catchment

an additional step to strengthen GOL participation in the monitoring of logging and CorridorAreas (ESMP) of May 1998 (prepared by IUCN under contract with GOL).activity. GOL proposed that a high level multi party monitoring team assume re- The terms of reference forthe consultant's work specified the MOAF as counterpartsponsibilityfor conducting and overseeing monitoring of logging operations in the and asked forthree budget scenarios based on different levels of operational activ-NT2 Project area.The High Level Monitoring Team would be led by the Governor of ity.The budgets and corresponding operational plans would form the basis for de-Khammouane Province and include the Deputy Governorof Bolikamxay Province, cision making on the appropriate level of practical, achievableactivity in the re-the DirectorGeneral ofthe Departmentof Forestry,otherrepresentativesfrom MOAF, mote and inaccessible reaches ofthe NBCA.That important decision is necessarythe police and security services, and NTEC.The High Level Monitoring Team would for appraisal of the watershed component of NTSEP.

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20. The workshop held on May 10 reviewed the first draft of the consultant's work. Mr. taken up separately at a later date.The workshop agreed, however, that the currentChris Flint, the lead consultant, and his MOAF counterparts presented the Opera- decreed boundaries of the NBCA should apply to theWMCA operational area,plustional Plan for a preparatory period of 1.5 years and for the formal NT2 investment the Khammouane Limestone Corridor that will be so essential for wildlife migra-period of 5 years commencing atfinancial close.The workshop was chaired by Mr. tion between high and low elevations and the Southern Corridor. In regard to juris-Sitaheng,Vice Minister of MOAF and Mr. Phouvieng Laddavong,Permanent Secre- diction overthe reservoir area,the Workshop participants reached d consensus thattary of MOAF and was attended by the MOAF staff, representatives from theWMCA jurisdictionoverthe reservoirwouldbelimitedtothoseareascurrentlyKhammouane and Bolikamxay provinces,the mission,NTEC staff,and IUCN. in the NBCA or its extensions.The western shore on eitherside of Nakal town and

the future resettlement sites would be outside the WMCA operational area,as well21. Discussion and Conclusions.The workshop participants uniformly praised the Op as the inundated areas west of the line of the current Nam Theun River. This could

erational Plans as timely,detailed and well thought out,raising the key operational be revised after the 8 year period of NTEC's operational I support to the resettledissues, and budgeting activities in a systematicway.The following issues were dis- villages.cussed in depth and conclusions reached by the Chairman.The mission prepared itsdetailed comments onl the Plan for reference (attached as Annex 3): * Institutional Arrangements and Consultants:the Workshop agreed thattthe WMCA

should be established as proposed,headquartered in Nakai,with modifications over* Operational Area of ihe Plan:The mission and IUCN strongly expressed their views its life time, as may be decided by its Board of Directors and consistent with its legal

that the 6lOL decision not to include the Northern Extension from the NBCA (com- commitments to the NT2 project and IDA. The 1.5 year preparatory phase, it wasmunicated by GOL to the last NISEP mission) represented a potential setback for agreed,needed to be revised to include budgeted Lao national consultants as theconservation,as the area is the only known homne to the Saola.GOL reiterated its managers of the early "pre-institutiorialization" of the WMCA with the budgeteddecision notto include the Northern Extension in theWMCA operational area,as it international technical assistance to provide guidance on financial, procurement,belonged to the NamTheun Hinboun watershed and that its protection would be and operational activities.

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* Budgets:The workshop considered the three budget alternatives,and agreed that amounts for community investments below the power station and could also in-the second budgetforthe 5 year period plus the 1.5 year preparatory plan budget clude communities living on the eastern flank of the NBCA.would apply,approximately US $9.1 million in total.NTEC expressed its inabilityto * Roads:the mission welcomed the decision to remove from the budget plans for atreat as project equity this entire amount,and offered to raise its earlier commit- substantial widening of the Ban Navang Road, and to reorient the transportationment of US $5 million to $6.5 million.The Chairman indicated thatthe gap would network of the future WMCA to north south river and track development linkingbe handled in several potentialways:some reductions in the plan budgets,particu- the NBCAto Nakai town.larly the 1.5 year budget which was seen as ambitious for a start up preparatoryperiod. In addition reservoir management expenditures could be reduced as reser- 22. The mission expressed its views on two other operational issues that will need avoirinundation will notcommence until thefinal yearofthe Operational Plan,and more focussed approach in the Operational Plans.The first is the need for moreNTEC has already budgeted for most ofthese activities. NTEC indicated that it would focussed activity of the WMCA staff and partner agencies along the internationalreviewthe revised budgetforthe Operational Plans.And othersources offinance border to deal with hunters coming from the north, and second, a more explicitmight be mobilized, outside ofNT2 project equity. The Workshop and the mission treatment of social development and cultural issues within the sustainable devel-welcomed the more realistic discussions of ESMP budgets and their financing.With opment activities in the Plan,as protection of vulnerable ethnic sub-groups in thesomefurtheradjustments tothe Operational Plans,the ESMP would beappraisable. NBCA is a high priority ofthe ESMP .See Annex 3 forfurtherdiscussion.

* Buffer Zone Activities:theWorkshop agreed that the buffer zone activities in the 5year plan would need to be scaled back somewhat for two reasons: the focus of IV. NextStepsoperational activity should be within the NBCA and on sustainable developmentand conservation for its inhabitants,with bufferzone investments as a secondary 23. The mission and GOL agreed tothe following nextsteps:priority; and second, the social budget of the NT2 project includes substantial

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* The Government would communicate its decisions on the recommended steps toaddress illegal and off limits logging,on the delineation of boundaries,on the for-mal incorporation of the NBCA extensions, and on the future monitoring frame-work and mechanisms,totheWorld Bank beforethe end of May,in orderto includethosedecisions intheforthcoming missionTechnical Report; Mr.Sitaheng Rasphone Christopher Chamberlin

* The two Operational Plans would be revised and sent to the World Bank before the Vice Minister Principal Operations Officerend of May; Ministry ofAgriculture and Forestry TheWorld Bank

* TheWorld Bankwould send a draftversion oftheTechnical ReporttotheGOLforitsurgent commentsand proceed to publish theTechnical Report by May 31,with theconcurrence ofWorld Bank management. ; , S

* The World Bank would respond promptly to a request to extend the Government - t' 4executed NTSEP PHRD grant. in the presence of

Jean-Christophe Delvallet24. The mission and the GOI agreed to communicate the contents ofthis Aide Memoire NTEC

to their respective higher authorities for their consideration and approval withinthe contextoffurtherpreparation ofthe NamTheun 2 and NTSEP projects. GOLand Annex 1: Letter ofMcDowel Iand TalbotWorld Bank higherauthoritieswill communicate to each othertheir respective views Annex 2: Mapon Aide Memoire as soon as possible. Annex 3: Comments on Workshop WMCA Operational Plan.

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ANNEX 3LETTER TO THE PDIME MINISTER'SOFFICE FROM MR. TAL4OT ANDMR. MCDOWELL

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Tai-Pan Hotel * Logging in and around the areas planned for resettlement south and west of2-12 FrancoisN ginn Street the reservoir area,and in the NBCA area to the east and north of the reservoir area beVientiane, LAO P.D.R. halted immediately.The Mission will supply your officials with precise locations where9 May,2000 logging which is illegal in terms of your decree is talking place.

His Excellency Sisavath Keopouphan * Legislative action be taken at an early date to reconcile and clarifythe present

Prime Minister~s Office boundaries of the NNT NBCA,the Nam Thuen and associated watersheds,and the ex-Patimeay Minister'sOffictensions to the NBCA agreed to in principle in the Aide Memoire between representa-Vientiane LAO P. D.R. tives of your Government and the World Bank dated 25 November, 1996, with the ex-

Vientiane, LAO P. D.R. ception of the proposed Northern Extension.

Excellency, * Early legislative action also be taken to clarify that, for both biodiversity and

For the past week we have had the privilege of being observers on a World conservation reasons, and to help prepare the area for future tourism and recreation,Bank Mission authorized byyourGovernmentto monitor logging activities in and around the islands inside the proposed reservoir area are not to be logged.

the Nam Theun 2 Project area.We represent respectively two bodies set up to provide * Interim action be taken accordingly to halt immediatly the logging in the res-advice and guidance to the project stakeholders especially on the social and environ- ervoir islands area and the area between the reservoir and the north-facing escarp-mental impacts ofthe project. ment of the Nam M alou.

Using effective methodology, based on integration of satellite imagery with We trust that, by dispelling some of the more damaging rumors about wide-helicopter and ground surveys,we have concluded that while most ofthe present NBCA spread illegal logging in and around the project area,this Mission has clarified the de-area remains unlogged-which is heartening-there are subtaintial logging activities in bate about the future of the Project. At the same time, the Mission's experiences andat least four areas outside the sanctioned logging areas,plus a niumber of less substan- conclusion lead us to propose that there be regular such international/GOL collabora-tial but still significant infractions ofthe agreements and understandings reached be- tive monitoring of logging activities and any other adverse impacts in the NT2 Projecttween your Government and the World Bank representatives during the project plan- area,drawing on the methodology developed bythis Mission.ninig period. This is a serious situation.

The Mission is preparing a full technical report with further proposals for action.InWhile not wishing to anticiplate the final text of the technical report now be- the interim,we suggest that early and full acceptance and implementation ofthe above

ing drafted by the World Bank Mission--and while fully understanding the pressures recommendations will help facilitate the progress of the project approval process andyour country has been under during the financial and economic downturn of the past urge you,with respect,to give urgent consideration to the points we have made.two to three years, to say nothing of the resource and manpower difficulties alwaysfaced by a small developing country like Laos in supervising and monitoring the na- Your si, cerely,tion-wide harvesting of such a valuable natural resource as your remaining forests -we , X e

VWORLD BANK feel that we should convey to you directly our recommendations for urgent interim ac- +c 2g' XC/ 'SURVEY tion by your Government.We trust thatthis will help facilitate the World Baink appraisal ee M.Ta Ibot David McDowell

TECHNISSN process for the Nam Theun 2 Project. Representative ofthe International Representative of the InternationalREPORT Social and Environmental Panelof Advisory Group forthe NT2 Project

m Ourrecommendationsare that: experts forthe NT2 Project

ANNEX 4LETTER FROM THE PRIME .=INISTE R'S

OFFICE TO MR. TALBOT AND MR.M C D 0 W E L L

GOVERMENT NOTICE NO. 0885/CPNO

WORLD BANKLOGGINGSURVEYMISSIONTECHNICAL

REPORT

ryl W;XarmA

Lao People's Democratic Republic Lao People's Democratic RepublicPeace Independence Democracy Unity Prosperity Peace Independeice Democracy Unity Prosperity

Prime Minister-'s Office Pr ime Minister's Office

Dr Lee Talbot 19 May 2000 Mr David McDowell 19 May 2000Professor Eavironiental Services 86 Waerenga RoadAssociates Intensatioiial Otaki6656 ChilIon Cotirt New ZealandMcLean, VA, 22101 Dear Mr McDowvell,USADear Mr. TalbotI refer to year letter of 9 May 2000 to His EExcellency Sisaath Kcobounphan concerning loggingDear Mr. Tathet. activities aatLnd the Nat T'lteun 2 Project area. The Prime Minister hns asked iase to advise yoLi as follons on

I refer to your letter of 9 May 2000 to His Excellency Sisavath Keobousiphan conceming logging the issues mised in your letter.activities around the Nam Theun 2 Project area. Thie Prine Minister has asked ate to advise you as follows on The Gosersment of Lao PDR is grateful for your efforts to assist tis in these ntatter wahicil ore ofthe issues raised in your letter. great iUlpOrtaiec botlt to our national policies ofcoriservatioc and salstainable development and because of

The Govemment of Lao PDR is grateful for your efforts to assist us in these natter which are of their association with thy priority ranked Nam Theuan 2 Project.gr eat illportance both to our national policies of conservation and sastainable developinent and because of The Govemment also appreciates your own understaiidiig of the practicalities of staffing andthei- association with the priority ranked Naoe Theun 2 Project. The Govermnsent also appreciates your osvn resoearciag we face in these times of econeoniric restraint.The Government lias carefully considered the recom-ainderstanding oftthe practicalities of staffing anid resouicing we face in these tiaises of ecoirosiiic restraint. mendations in your Ictter, as well as those of a partly siaiilar nattire in the World Batik Aide Menisoire of 11

The Govemrinent has carefilly coaisidered tile recomnsendationis in yoer letter, as well as those of a May 2000. aeid I cail advise you that we accept all of those reconirrendatiors.partly sitiiilar nataire in the World Bank Aide Metnoire of 12 May 2000, and I can advise you that we accept all Adininistrative arrangements have been started to issue fortsal bouaidary definitions of the areasof those i ecomninetidations. coiitiguous witb the NaneaT Thean 2 Reservoi discussed in your letter. In addition itistructions have beea issied

Aditinistrative arranigeisenits have been started to isSaLe forisial bounidary definitions of the areas to cease loggiag in the areas of concern yOea have raised. Alsn an internal iionitoriag group has been estab-contiguous with the Nam Thetin 2 Reservoirdiscussed in yotir letter Il addition instnrctions tove been issucd lished with representation fromi the Natiotial and Provincial Aaithority to enstire that the future sitnuatiorn coi-to cease logging in the areas of conicerit you have raised. Also an inter-iial tisonitoring group has beeni estab- plies wvish agreed Aide Meoseoire betweeni ilsy Government and the World Banik. Further details of theseliisied with representation from the Natiotial and Provincial Attlisorty to cistire that the futtire sitnitiioe cOIen- alTanlgeinertts will be advised to the World Bank by the end ofthis noeth.plies wvith agreed Aide Meni,,ire betwecen ty Governitsent and the W'orld Baiok. Fuathier details of these as-raigscilenits will be advised to the World Baoik by the end of tlis ntonth. Tlik yoti for your assistaice oni this miatter.

Thank you for your assistanice oni this iniatter You-s sriccrely%

Yours sincerely,

MHNStCl t o the Prile Mhiister's OfficeMinister to thie Prtitse Milister's ffice

L.ORLO yANK L m P M H

SIREY tsnphos PHOMVIHANE Saysorophon PHOMVIHANEMISSIONt

TECHNICAL cc U'orld Bank Office. Vientiine cc: WoenId Baeik Office. VientianeREPORT

3

UNOFFICIAL TRANSLATION

Lao People's Democratic Republic 3) Approval is given for the establishment of an Ad Hoc Commitee and authorize suchPeace Independence Democracy Unity Prosperity commitee to perform the task to monitor and control on a regular basis wood exploita-

tion conditions intheareaofthe NamTheun 11 reservoir.The Commiteewill include:Cabinetof the Prime Minister's Office No.0885/CPMO

Vientiane, 19 May 2000 3.1 The Governor of Khammuan province as president3.2The GovernorofBolikhamsay Province as vice president

NOTICE 3.3The Director General,Forestry Department asvice presidentTo: -TheMinisterofAgicultureand Forestry and Standing Member

-The Governor of Khammuan Province 3.4The Governor, Nakay District as member-The Governor of Bolikhamsay Province 3.5The Director, Agriculural & Forestry Department,

Khammuan Province as memberSubject: Report on the inspection of wood exploitation in the area ofthe Nam 3.6The Governor, Khamkeut District as memberTheun 11 Project 3.7 Representative of Nam Theun District as member

3.8 Representative of the Nam Thuen lProject Developement Group as member- Referring to the letter 329/FIRDIMC, dated 15 May 2000, of the Foriegn Invest-

ment,Cooperation and DomesticInvestment ManagementCommitee, 4) Approval intheprinciplein givento conduct annual jointmonitoring and control ofwood exploitation activities in forestreserve area between theGovernment of Lao PDR,

The Cabinet otthe Prime Minister's Office has submitted the mattertothe Prime Minis- NTEC and the World Bank, with the participlation of 2 international experts frpm theter on 17 May 2000 and recieved the following instructions: Government's Social and Environment Expert Group and the World Bank's International

Advisory Group.1) Cease wood exploitation in the following area:

Tgerefore,the above is notified to all parties concerned for their information and strict1.1 Nakay-Nam Theun forest reserve area:at Ka Oy, Nam Sangong Villages implementation in line with the content and spirit of the notice.1.2 In area where forests will grow in plots after the construction of the NamTheun

11 dam. Minister,1.3 In the area of Nam Malu which is a cooidor between the Nakay-Nam Theun Chief ofCabinet, Prime Minister's Office,

forest reserve and Phou Hin Poun forest reserve. SAYSOMPHOMNNE PHOMVIHANEHA1.4 Sites to newly settled by the population who will be moved there to and yhe

forest areas to be allocated and placed underthe population's management and use in CC:both areas along the foot of Phou Ak mountain. - Office, Party Commitee 1 copy X

Foreign Investment,Cooperation and Domestic2) The Minister of Agriculture and Forestry shall coordinate with the relevant authorities Investment Management Comrnitee 1 copyatthe the central and local levels to furtherclearlydelineatethe current borders of the - Files 1copy WORLDO ANK

Nakay Nam Thuen forest reserve, Nam Theun and related water sources and extension - Ministry of Finance 1 copy LOGGING

oftheforest reserve according to the agreement in principle underthe aide-memoirof - Ministryof Foreign Affair 1 copy MISSIONTECHNICAL25 November 1996 between the Government's representative and the World Bank - Ministryof Industry 1 copy REPORT

(exceptforextension to the north)and thereaftersubmit to the Governmentforapproval. - Nam Thern Il Project 1 copy m

U,

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