Current status
No resolution
Sector
NCP

Allegations

On 17 June 2019 a specific instance was filed by South Korean Civil Society Task Force Team in response to the Laos Xe-Pien Xe-Namnoy Dam collapse against the Export-Import Bank of Korea (KEXIM), SK Enginerring & Constructurion Co. Ltd. (SK E&C), and Korea Western Power Co. Ltd. at the Korean NCP. The complaint concerns the activities of KEXIM, SK E&C and Korea Western Power in Laos related to the collapse of the Xe-Pian Xe-Namnoy Dam. The dam collapsed on 23 July 2018, claiming hundreds of lives and thousands of people were displaced. The complainants allege that KEXIM, SK E&C, and Korea Western Power are responsible for the collapse. Specifically, the complainants alleged that the respondents violated human rights, environment, disclouse and general policy provisions of the Guidelines because there existed a flaw in the design and the constuction of the dam; the damage increased due to the delay in emergency water discharge carried out by SK E&C and Korea Western Power; the failure to take proper initial measures upon the collapse of the dam such as the absence of an evacuation order; the failure to implement safety measures despite the mentioning of an environmental risk response plan in the Environmental Impact Assessment Report; the failure of KEXIM to conduct due diligence in the process of implementing its management and financial advisory contracts; and their refusal to communicate with civil society or to respond to the information disclosure request. Complainants sought mediation from the NCP so that the victims of this tragic collapse can receive adequate remedies.

Relevant OECD Guidelines

Outcome

On 25 September 2019 the Korean NCP completed an initial assessment accepting complaints against SK E&C and Korea Western Power, but rejecting the complaint against KEXIM.

The Korean NCP excluded KEXIM from the planned mediation process by concluding that the Guidelines are not applicable to KEXIM as the export credit agency is participating in the project as an Official Development Assistance (ODA) agency. The NCP referred to its own decision in the Jalaur Dam case in 2018 and explained that there is no precedent where an NCP found the Guidelines applicable to an ODA project.

The NCP decided to offer good offices to SK E&C and Korea Western Power because SK E&C was in charge of the design and construction of the dam; Korea Western Power was in charge of operation of the dam after construction; and both are shareholders of PNPC, the joint investment venture and principal agent of the Xe-Pian Xe-Namnoy hydroelectric project. Therefore, the NCP decided to proceed with the mediation process for the two companies.

SK E&C and KOWEPO declined the NCP’s offer of good offices, however, and instead of proceeding with an investigation, the Korean NCP published a final statement on 30 July 2020, concluding the specific instance. It made the following recommendations to SK E&C and KOWEPO:

(1) Establish a communication channel to discuss issues raised by the complainant;

(2) Give an explanation with integrity to the complainant regarding the details of recovery and relief activities, compensation for the residents, and measures to prevent further accidents, among others;

(3) Adopt an internal system to create settings and cooperate on responsible business conduct (RBC) of MNEs, including the OECD Guidelines for MNEs and the OECD Due Diligence Guidance for RBC;

(4) Send a report on the progress regarding the matter within six months of receiving the final assessment.

The complainants were disappointed both that the Korean NCP was not able to encourage the company to engage in the good offices process, and that it closed the complaint following the company’s refusal to participate instead of engaging in an independent evaluation of the facts presented.

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