Introduction

Background, Objective and Method

The development of mining industry in the world is in the fast growing pace as mineral commodity continue to gain good price and high demand continue to come from the fast growing new economic centers like China and India. The two factors contributed to expansion of mining industries into areas not yet entitled to any concession. This has also brought resurgence of existing concessions that are not yet developed due to uneconomic price and financial institutions’ reluctance to finance projects that would yield only small revenues.

Laos has been regarded as one of the most attractive investment destinations for extractive industry in South East Asia, particularly in the Mekong Subregion. The country with total land area of 230,800 square kilometers indeed has great potential for the development of extractive industry such as mining, energy, and industrial plantation. It is seen not only by Lao government itself but also the neighboring countries in the region such as Vietnam, China, and Thailand who already become centers of industrial growth in Indochina region. This is indicated by the intensive investment and trade deal involving Lao and those countries in the extractive sector.

 

While development of extractive industries is often deemed as a shortcut to generate quick revenue required for financing the country’s development, it is also seen as type of industry that brings social and environmental consequences. The revenue gained from mineral excavation has been made at the cost of the environment and population affected by mining projects. On behalf of development the environmental and social impacts of mining are often overlooked while there’s a growing number of facts show mining companies’ continued reluctance to restore its impacts to environment and people. The degradation of environment, loss of natural resources and biodiversity, and falling down of local economy later become burden of local government and local population.

 

However, this sector continues to receive support from international organization such as the World Bank. This most powerful development financing institution continued to bolster industrial development throughout the region via establishment of Mekong Subregion Economic cooperation. The initiative later adopted by each country in region to be multilateral agreement brings consequences to their national economic policy such as opening of natural resources sector for private investment. There will be significant increase in the number of investment in extractive sector with the potential spread of social and environmental problems throughout the country. A very deep and wise analysis re development policy and risk mitigation is called for prior to development of mining projects. Otherwise, Laos will just to replay the old cassette of poverty and environmental devastation left by extractive industries in Asia and South America.

 

The policy research entitled “ Environmental and social security framework of mining sector in Lao PDR “ will be conducted with objective to study the policy that drives the development of mining sector in Lao PDR and the social and environmental security provided by the country’s legal framework. The study will be conducted by doing analysis on a number of policy and legal documents related to development of country’s mining sector. The object of this study is therefore as follows;

1. Policy of Lao PDR government,

2. Multilateral agreements,

3. International organizations policy on Lao PDR,

4. The country’s laws and decree related to mining sector e.g. Mining Law and Environmental Protection Law

 

This study will also be accompanied with case study on the status of population and environment around selected mining site. Field observation will be conducted to collect information with particular source local population. The output of this study will be analysis on the adequacy of the social and environmental security provided by the country’s legal framework with some recommendations for improvement.

 

 

Vientiane, August 2007

 

Author

(This study report is currently under review by the Science Technology and Environment Agency of Lao PDR and is therefore unable to made public yet)