Ladies and Gentlemen,
Development Partners have agreed to deliver a Joint Statement on issues for the Mekong River Commission (MRC) and the countries of the lower Mekong basin.
We are pleased at this crucial stage of the Basin's development to continue our dialogue with MRC member countries and the MRC Secretariat. We also take this opportunity to welcome the new CEO to the position and look forward to working closely with him and his staff.
The coming years will be challenging for the MRC. Development Partners acknowledge recent efforts by the MRC to respond. The renewed, proactive spirit of engagement and openness from the MRCS is welcomed and encouraged by Development Partners. We also recognise efforts of member states to address key challenges to development in the basin and the ongoing reform process within the MRC.
Development Partners wish to focus on three key themes:
MRC role in hydropower and water diversions
Development Partners note that the 1995 Mekong Agreement clearly mandates the MRC to play a constructive role to assist decision making about hydropower development and water diversions. Both are key current issues.
Mekong Basin governments need to be able to make informed decisions about whether to proceed with water resources development projects. Development Partners are encouraged that the MRC is now beginning to play a more active role on water resource projects that will have a transboundary impact.
Recent estimates suggest there are 82 existing and 179 potential hydropower projects in the wider region, many on Mekong River tributaries. Construction and planning is now accelerating. Mainstream dams in Lower Mekong countries have re-emerged on the agendas of national governments, trans-national capital providers and developers. Major water diversion projects, including for irrigation and agriculture, are also being examined by member countries, some of which would have transboundary impacts.
Development Partners agree that well considered and implemented hydropower projects can bring benefits to the people of the Mekong Basin, and contribute positively to poverty reduction, by:
We acknowledge the benefits hydropower can bring and understand nations will pursue their sovereign right to develop natural resources in line with national development aspirations. We also underscore the critical need for a full examination of both positive as well as negative social, economic and environmental impacts of hydropower and diversion investments.
We welcome the intention of the MRC to convene a hydropower consultation in late September 2008, inclusive of civil society, private sector and Development Partners, to discuss its initiatives to deal with the challenges of hydropower in the Mekong Basin, and to discuss its new hydropower program. We are encouraged to see the commitment from member states, demonstrated through this planned forum, to openly discuss the costs and benefits of hydropower development.
Further, we encourage the MRC to convene other stakeholder forums on individual larger projects. Such forums could: add value to assessments of the specific projects, such as Don Sahong; facilitate IWRM based evaluations of major transboundary projects; and disseminate lessons learned.
We are pleased the MRC is also fast tracking several program activities in response to the accelerating water resource developments in the basin.
Development Partners also welcome the initiative of the Government of Lao PDR to inform other member countries, via the Secretariat, of details on eight planned mainstream hydropower developments. We see this initiative as an opportunity to increase regional discussion and cooperation, and encourage other member states to take similar steps
The changing development context in the Mekong provides new challenges and a window of opportunity for the MRC. It is crucial that the MRC and the Secretariat use its accumulated knowledge and expertise to assist member countries plan and develop their resources as articulated in the 1995 Agreement. Development Partners stand ready to support the MRC in these endeavours.
Continued MRC reform
Development Partners welcome the good work being done to implement many of the recommendations of the Organisational Review. The Task Force on the MRC Organisational Structure and the development of the road map for a comprehensive reform agenda are examples of the concrete actions to reform and improve the Commission. The Joint Contact Group remains an important forum for Development Partners and Member Countries to have a dialogue on these critical processes and where Member Countries may sound out development partner views prior to taking final decisions on the course of the different reform initiatives.
We are pleased to note, that the issue of finding a permanent location of the MRC Secretariat is high on the agenda and will be decided on before the end of the year. Development partners stress the need to ensure that the management of the Secretariat is firmly anchored in one location.
A strong monitoring and evaluation (M&E) system to provide accountability and to assess the impact of the work of the MRC, is an essential part of a modern organisation that has been lacking within the MRC. We are pleased to note the MRC will begin work on developing such an M&E system shortly. This will provide opportunities for additional Development Partners to give program budget support to the MRC.
We strongly support the process toward riparianisation. Riparian leadership, management and technical expertise in the MRC is critical to its long term success and sustainability. To develop as a world class river basin management organisation, the MRC employment procedures need to attract, appoint and retain the best and brightest from the Mekong member countries.
Therefore, Development Partners strongly urge the MRC to reconsider the role and selection process for MRC Directors, as well as the MRCS' staff selection and retention processes as recommended in the Organisational Review.
MRC ownership by riparian member countries and donor harmonisation
Development Partners call again upon Member States to accelerate the process of defining the core functions of MRC and increasing the members' contributions. This would be a concrete demonstration of Member States' strong ownership of this multilateral institution.
We appreciate the Member States' general commitment to make increased financial contributions to the operation of the MRC over time. However, Development Partners believe it is now time for member countries to make more tangible and specific commitments regarding increasing their financial contribution to the MRC.
We recognise the need for a Management and Administration Fee. However, Member States should take up responsibility for financing core functions as recommended by the Organisational Review. This will enable a progressive reduction of the Management and Administration Fee. We as Development Partners commit ourselves to apply a uniform standard MAF rate based on established cost principles for our future support to the MRC.
We on our part recognise that current unharmonised donor requirements on earmarking, special reporting etc. are still creating unnecessary burdens on the Secretariat and hindering needed flexibility in planning and implementation of programmes. We remain committed to further harmonise and align our support to the MRC with the longer-term vision of providing budget support. Many donors already provide programme budget funding and we are pleased to note that the donor support to the Basin Development Plan Phase 2 is piloting an aligned and harmonised programme budget support approach that may be replicated in other programmes also.
We look forward to a constructive discussion of these and other issues during the course of the day. This Statement was supported at the MRC Informal Donors meeting held on 20 June 2008 in Vientiane, Lao PDR by the following development partners:
AUSTRALIA, AUSTRIA, BELGIUM, DENMARK, FINLAND, FRANCE, JAPAN, NETHERLANDS SWEDEN, USA, FAO, ASIAN DEVELOPMENT BANK, EUROPEAN COMMISSION, THE WORLD BANK