China’s state-owned Chinese Power Investment (CPI) has offered to discuss issues “face to face” with the Kachin Development Networking Group (KDNG) after the NGO slammed the Chinese firm’s recent Corporate Social Responsibility (CSR) report related to the suspended seven-dam project on the Irrawaddy River.

The Chinese-backed project – the focal point of which is a 3,600MW mega-dam located at Myitsone, the source of the Irrawaddy River – was suspended in September 2011 by Burmese President Thein Sein after environmental groups and activists had protested across the country saying the dam would irrevocably damage the river and its surrounding landscape and would provide benefits only for China, not for the local population.

But the suspension of the project is only contingent with Thein Sein’s tenure as president which is scheduled to end in 2015. CPI has never let go of the notion that the project will ultimately be restarted.

Responding to a DVB request for comment on KDNG’s 8 January statement slamming the Chinese firm’s business ethics, CPI took the opportunity to thank the Kachin NGO for their interest and “wonderful work”, and said it hopes to engage in a “face to face communication” with KDNG, just as it has met with other groups.

KDNG is yet to confirm whether it would accept the invitation, which would appear as a David and Goliath confrontation between CPI, a state-run developer of power plants supplying 10 percent of China’s electrical consumption, and the modest Kachin environmental group which promotes sustainable development in Kachin State while conducting grassroots surveys on local dams, mines and agriculture projects.

Indeed both sides present polarized versions of each and every issue raised in the CSR – from the social and environmental impacts to distribution of electricity to the logistics of preventing floods and droughts.

CPI maintains that resumption of the hydropower project would provide Burma with an estimated $US54 billion in tax, accounting for some 60 percent of total revenue from export of electricity, while investors would take home 40 percent. The company further says that the seven projects, including the Myitsone mega-dam, would generate some 110 billion kw.h of electricity, “which is 11 times that of total national power generation in Myanmar”.

But although hydropower accounts for some 70 percent of domestic electricity, according to 2010 data, only about 16 percent of Burma’s population is currently connected to the national grid.

KDNG has criticised the company’s lack of transparency, saying the project “has been shrouded in secrecy from the beginning” when it was born out of negotiations with Burma’s then ruling military junta.

Furthermore, the NGO said that local Kachin groups were never consulted about the project and that many villagers were forcibly relocated to make way for its construction.

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CPI denies both these accounts. It said its subsidiary company, the Upstream Ayeyawady Confluence Basin Hydropower Co (ACHC), has “attached great importance to the stakeholders’ rights to know and to participate.” It added that before the investment, CPI “consulted the elders from six Kachin tribes, learning that these elders all were in favor the Ayeyawady [Irrawaddy] River project.”

CPI said that, in addition, “investigations have been carried out in the stages of preparation of EIA [environmental impact assessment], SIA [social impact assessment] and resettlement, which indicated that 80 percent of the surveyed people backed this project.”

With regard to the alleged relocation of hundreds of Kachin villagers, CPI remarked: “The Company has never closed any school or relocated any inhabitant by force.”

Polarised perspectives also emerged when talking about the cultural significance of the site of the Myitsone dam – the confluence of the Mali and N’mai rivers which carry water from the Himalayan glaciers and form the source of the Irrawaddy, Burma’s greatest river which offers fishing, transportation and other livelihoods to millions of Burmese.

But while the NGO says the confluence is a historical Kachin landmark which will be submerged and destroyed, CPI counters that the construction of the project will “form a more attractive new landscape” which will help promote local tourism.

Perhaps the most prominent gap between the dam-builders and their opponents is the potential affects the hydropower plant will have on downstream communities and the regional environment.

CPI maintains that the Myitsone Project will adjust the runoff effectively during dry and rainy seasons, as well as stabilize river channels and slow down sedimentation.

However, KDNG is emphatic that, as a hydropower dam, water will be released according to the energy needs of the operator and the main customer – China.

“Judging from experience of downstream effects of Chinese hydro-dams on the Shweli as well as the Mekong River, Burma can expect even less water during the dry season, potentially worse flooding during the rainy season, and unexpected water surges at any time,” the Kachin group said.

But in its reply to DVB, the Chinese firm counter-claimed: “No data ever suggests that the Chinese dams have reduced the water volume in the downstream of Mekong River and Shweli River during dry seasons. The perspective that construction of hydropower projects decreases downstream water volume in dry seasons and increase the floods in rainy seasons defies scientific and natural logic.”

The seven-dam project is not the only Chinese investment in Burma to face problems – the Latpadaung copper mine project in Sagaing Division was halted for an inquiry due to protests which were put down violently in November 2012 by Burmese security forces.

And a controversial 2,500-km trans-Burma pipeline has recently opened to carry natural gas from Burma’s Bay of Bengal to Yunnan Province in China and beyond. A sister pipeline is due to pump oil along the same route and is due to become operational later this year.

All projects have drawn the scorn of local farmers who say their land has been seized to make way for the developments and claim that adequate compensation has not been forthcoming.

The ongoing conflict in Kachin State and northern Shan State – where the pipelines and the Myitsone dam are located – is another factor to be considered. It has not gone without notice that Beijing has taken on a larger role as mediator at peace talks between the Burmese government and the main Kachin rebel group, the Kachin Independence Organisation (KIO), in the interim period while the meg-dam project is suspended.

If a genuine ceasefire is not negotiated, security would have to be of the utmost concern in any resumption of the dam projects. KDNG say that in fact, attempts to restart the dam “will further fuel the conflict, as the issue of natural resources is a key driver of the war.”