Explores options for enhancing regional environmental governance by examining political, economic, and environmental response to transboundary environmental challenges through four prominent regional institutions: ASEAN, ADB, ESCAP, and the MRC.

Executive Summary

On March 4, 2000, the water level in the Se San River rose suddenly, causing loss of life and livelihood to fishermen and farmers in Cambodia’s Ratanakiri Province. The unexpected surge was caused by a release of water from the Yali Falls Dam, the largest dam on the lower Mekong River system, located upstream in Vietnam. Cambodian non-governmental organizations (NGOs) and local communities brought forward details of the damage and encouraged the national and international public to consider the implications of this transboundary incident. During the incident, the flow of information between Cambodian and Vietnamese officials was minimal, and there was virtually no communication between the provincial governments on either side of the border. The government of Vietnam issued an apology and assured the Cambodian government that such an unannounced release of water would not happen again (Chapman, 2000).

In the meantime, the Cambodian government appealed to the Mekong River Commission (MRC) to investigate the incident. The ensuing examination drew attention to mistakes committed years before, during the initial project planning process. In particular, planning for the dam had not included sufficient attention to potential environmental and social impacts in Ratanakiri. Knowing that plans for other dams on the Se San River were being considered by the Asian Development Bank (ADB), local and international NGOs in Cambodia put pressure on the Bank to reassess its involvement . Subsequently, the ADB suspended plans for the project until adequate studies on potential environmental and social impacts could be conducted.

These transboundary challenges highlight the need for decision-making processes that go beyond the borders of individual nation-states. They illustrate the necessity of creating administrative structures designed to nurture ecologically sustainable and socially acceptable development that function on many levels. On the one hand, national governments occupy a central position within almost all decision-making processes in Mainland Southeast Asia; their participation is needed for any viable long-term solution to the area’s environmental problems. On the other hand, the role of regional institutions is increasing as they begin to provide more effective channels for cooperation and collaboration among a number of stakeholders.

The Yali Falls incident demonstrates that regional governance structures and practices in Mainland Southeast Asia are still not sufficiently robust to address transboundary environmental challenges effectively. For example, the lack of channels for direct communication among the full range of stakeholders— in this case, between and among local communities, sub-national governments, and regional institutions—is part of a larger problem of access to information and transparency in decision-making. The failure to include social and environmental studies across the border in Cambodia in the dam’s planning points to the transboundary implications of the lack of concern for sustainability. The history of the Yali Falls Dam is complex, and the institutional setting has changed since the plans were formulated. The purpose of this report is not to examine the details of this particular incident but to consider the transboundary environmental issues it highlights and investigate the implications for environmental governance in the Mainland Southeast Asia (MSEA) region. Indeed, these types of governance failure at the regional level may have significant implications for effective natural resources management, national development needs, and the equity of environmental outcomes.

This analysis will draw upon recent developments in the MSEA region -- which comprises Cambodia, Laos, Myanmar, Thailand, Vietnam, and Yunnan Province of China -- and relevant global experience to examine how improved governance practice could be applied to the region’s transboundary environmental challenges. The analysis focuses on the roles of three regional institutions -- the Asian Development Bank, the Mekong River Commission, and the Association of Southeast Asian Nations -- to address the following questions:

  • What are the most pressing transboundary environmental challenges in the MSEA region?
  • What are the regional forces at play, and how are regional institutions responding?
  • What are the gaps in the current institutional structures and governance practices?
  • What are the most promising approaches and options that could enhance environmental governance at the regional level?

There are multiple definitions of the Mainland Southeast Asia region, including: an ecologically bound region defined by the Mekong River Basin; a development-driven unit of investment and trade that includes the nations of Mainland Southeast Asia plus the Chinese province of Yunnan; and a political grouping in which Mainland Southeast Asian nations are part of a larger regional institutional framework. This study adopts a concept of "region" that captures a broad range of policy fora relevant to the environment and natural resources, and it explicitly examines the interplay among the different definitions. The analysis emphasizes those environmental dynamics that are directly transboundary in nature rather than the full range of shared environmental challenges in the region.

In order to more successfully meet transboundary environmental challenges, institutions of the region will need to refine the structures and processes through which cooperation is pursued. This report argues that improved institutional structures that can better deal with multiple interests and complex human-environment interactions, along with refined governance practices to enhance the breadth and depth of stakeholder involvement, will contribute to more sustainable and equitable environmental outcomes.