Conflict dynamics in a dam construction project: A case study
Braj Kishor Mahato! and Stephen O. Ogunlana””
WEN Construction Group
Bangkok, Thailand
brajkishor m@ yahoo.com
**School of the Built Environment, Heriot-Watt University, Edinburgh EH14 4A S,
United Kingdom.
Tel: (44) 131 451 4647; Fax: (44) 131 451 3161
Email: $.0.0gunlana@ hw.ac.uk
Interface conflict is identified as a major problem in dam construction projects. Proper
management of conflict can determine success or failure of a project. Thus, it is crucial to
identify the causes of interface conflict in projects to avoid such problems. Qualitative data
gathered from case studies and interviews conducted in Nepal have been used to develop
and test a system dynamic model of interface conflict in a dam construction project. Three
viable policies to avoid and minimize interface conflict in the construction stage of a dam
project have been tested. Public participation, adequate compensation and resettlement and
information sharing with the affected people have the potential to reduce conflict during the
construction phase.
Keywords: Dam construction, interface conflict, system dynamics, sustainable construction
Introduction
Recent economic development and increasing concem on environmental change has put
developing countries like Nepal, India and China under severe pressure to meet the
increasing demand for clean energy and water resource management. One of the greatest
challenges of this century is how to provide energy and water to improve the livelihoods of
the people who currently have inadequate access to these services. Due to ongoing climate
debate, and shortage of the world’s finite fossil fuel resources, exploitation of water
resources for electricity generation has once again become the focus of interest. In this
context a dam construction project can fill the gap in an environmentally friendly way.
Construction of dam projects involves relatively large number of people of different
objectives, interest, disciplines and ideological backgrounds performing interdisciplinary
activities and having much effect on the environment and society. Time and physical
resources limitations have added another dimension to the complexity of a project. When
two social entities work together, it is not uncommon for them to have different interests,
values, beliefs and preferences. They often struggle over value, claim for status, power,
sharing of the scarce resources and try to gain the desired value which normally fosters the
development of conflict. Two categories of conflicts have been identified in large-scale
construction projects: internal conflict and interface conflict (Awakul and Ogunlana,
2002b). Internal conflicts are experienced among the project participants (Owner,
contractor, designer consultant etc), whereas interface conflicts are between the construction
project and groups outside the project (project affected people, NGOs, etc).
Construction conflicts are typically multidimensional, complex, and dynamic and
increasingly involve competing notions of sustainability. Conflicts are inevitable on
construction projects (Fenn et al., 1997; Cheung and Chuah, 1999; Pena-Mora and Tamaki,
2001; Jong and Seung, 2003) with the possibility of positive or negative consequences
depending on how effectively they are managed.
Generally the conflict at the initial stage of project is very low and increases with time
(figure 1). Later it changes into disputes if not settled on time; requiring additional money
and time to resolve.
Cumulative Effect of Conflict
Project Life Cycle
Figure 1: Conflict space in project life cycle, (Pefia-Mora et. al, 2002)
Conflict encountered in projects lead to prolonged delays in execution, interruptions and
sometimes suspension of work. For example, the Arun III Dam project in Nepal failed at
the planning stage due to conflict and the Middle Marsyangdi Hydroelectric Project
(MMHEP) in Nepal, under construction at the time of this research, faced many conflict
inducing problems. Work on the MMHEP was interrupted and suspended several times.
Consequently, the project was behind schedule and overrunning costs. When conflicts are
not managed in a timely manner, they may become very expensive in terms of finance,
personnel, time, and opportunity costs and also ruin the relationships among project
stakeholders. However, when it is managed appropriately it can be constructive and even
add substantial value to the organization (Deutch, 1994).
Considerable effort has gone into conflict research on projects. Awakul and Ogunlana,
(2002a) identified interface conflict factors in a dam project; Harmon (2003) studied
conflict between owner and contractors; and Ng et al. (2007) studied conflict in large-scale
design and construction projects. Rarely has any researcher studied the dynamics of conflict
in dam construction projects. Problems of conflict of high magnitude, ubiquitous in several
dam construction projects, have remained very serious. This can be attributed to an overall
deficiency in understanding and quantification of occurrence and escalation of conflicts.
There remains much room for study and improvement in conflict management of dam
construction projects. This research being reported aimed to develop a model for
comprehensive and integrated approach of conflict management to manage conflicts early in
a project's life using system dynamics modeling technique. The model will be helpful for
project managers to assess and take proactive measures to manage conflicts effectively and
efficiently early in a project's life.
Since conflicts in construction projects are dynamic, complex and nonlinear, they can be
described as spiraling between various parties (Ng et al., 2007). In this context, a system
dynamics modeling approach is well suited for conflict management in a dam construction
project. The early identification and addressing of conflict will increase the chance for
success and reduce cost. If, “Prevention is better than cure,” then prevention of conflict
should yield much benefit to project stakeholders.
Research Methodology
The structured, five-stage approach, suggested by Coyle (1996) is adopted as the principal
methodology for this research. The full context of conflict, both theoretical and practical,
have been explored and examined. The theoretical exploration has enabled the authors to
broadly understand the related theories and subjects of conflict development in dam
construction projects whereas practical exploration has provided good understanding and
helped to develop the simulation model of interface conflict complying to the real world.
Since conflict is a complex and dynamic problem that needs in-depth investigation, the case
study method is adopted. The MMHEP, the biggest and most important project under
construction in Nepal was selected for case study. Construction of the project commenced
on June 25, 2001. The project was planned for implementation in 4 years. However, only
80% of the work has been completed by end of 2007 and also the cost had overrun and was
estimated to be about double the original estimate at the time of investigation.
Face to face interviews were conducted with local people and experts, involved in
management and construction of the MMHEP as well as in other dam projects in Nepal
and in the international market. In addition, extensive literature review was done to acquire
the secondary data needed to articulate the real problem and identify the variables in the
Nepali context. During the interviews, the experts were guided to construct time series
graphs of income of project affected people, sustainable livelihood, interface conflict,
project delay and other variables identified earlier and by briefly explaining the possible
causes of dynamic behavior. The data collected were organized in reference mode and
causal loop diagrams to explain the behavior of the system. Causal loop diagram show how
the variables are related with each other. Causal link, according to Coyle (1977, cited in
Park et al., 2004) can be established through direct observation, reliance on accepted
theories, hypotheses, or assumptions, and statistical evidence. Second stage interview was
conducted to get expert views on relevance and practical difficulty of implementation of the
policies recommended.
The system dynamic modeling technique has been used to develop the model. One of the
most powerful features of system dynamics lies in its analytic capability (Kwak, 1995),
which can provide an analytic solution for a complex and nonlinear system like conflict in
dam construction. Use of system dynamics modeling in the management of conflict in
construction projects has been proven by researchers (Pena-Mora and Park, 2001; Ng et al.,
2007). The dynamic hypothesis was developed by identifying model boundary and
establishing causal structure of interface conflict development. The boundary of the model
was selected to address issues which are significant and relevant to the purpose of the
model. Variables which have an endogenous nature, exogenous nature and those to be
excluded from the model were identified. STELLA 9.0.3 ® has been used to develop the
model. In order to make the model less complicated, five sub models (Income of project
affected people, Sustainable livelihood, Information exchange, Interface conflict, and
Project delay) have been developed.
Dynamic Hypothesis
A dynamic hypothesis is a working theory of how the problem arose in terms of the
underlying feedback and structure of the system (Sterman, 2000). It provides the basic
explanation on the causes, which are responsible for the occurrence of the reference mode.
A dam construction project involves relatively large number of people and has more effect
on the environment and society than most other construction projects. It involves a wide
rage of activities such as the construction of access roads, electricity transmission lines,
water supply channels; the operation of quarries to supply rock fill; heavy transportation and
construction of ancillary buildings and facilities for settlement of displaced people. It has
both positive and negative aspects in relation to the environment as well as the society.
Dams provide broad economic and social benefits, including hydroelectric power, flood
control, recreation, navigation, and water supply. It spurs economic development and plays
an important role in development of the society and a nation as a whole. Additionally, it
provides much employment during the construction stage. However, a dam can displace a
lot of people and who may lose their land, social values, jobs, businesses and so on. In
addition, it disturbs the flow of rivers, watersheds, and creates negative impacts on aquatic
and terrestrial ecosystem. In some projects historical and archeological sites are submerged
in reservoirs. In most cases the benefits of dams largely go to the whole society while the
local communities have to bear most of the social and environmental costs.
Many people are directly or indirectly affected by a dam project. Oftentimes the interests of
different groups of stakeholders are different in a dam project. Their requirements,
expectations, goals and key performance indicators (KPI) also differ. The process of dam
construction is complex and lengthy making conflicts ubiquitous. According to the World
Council on Dams, conflicts around dam construction originate from a number of sources;
especially from the real and perceived distribution of costs and benefits, disparities in social
and economic power, the roles of different institutions, and specifics of project location and
design (WCD, 2000).
The dynamics of conflict can be significantly affected by the reactions participants have to
their degree of access to resources and information based on their gender, culture, values,
and history (WCD, 2000). When conflict is not resolved on time or people are not given any
opportunity to sustain their livelihood, “A livelihood is sustainable when it can cope with
and recover from stresses and shocks and maintain or enhance its capabilities and assets
both now and in the future, while not undermining the natural resource base”, they start to
protest against the project, file cases in court and interrupt the project work. To make the
hypothesis less complicated, and to improve clarity, five interrelated causal loop diagrams
(figure 2, figure 3, figure 4, figure 5, and figure 6) are used to represent the dynamic
hypothesis of interface conflict.
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Feedback loop concerning income of project affected people (PAP)
A dam construction project displaces many people and they may lose their land, social
value, job, business and livelihood opportunity. The main source of income of the
community in the project area is farming: livestock husbandry, forest products, fishery, and
to some extent trading and services. The effect of dam construction on the people differs
according to their occupation and location. Some are permanently affected and others are
temporarily. Figure 4 illustrates the causal loops of this sector. Some of the important loops
are explained below.
Design improvement (loop IPAP2): By using proper design, environmental and social
impact can be minimized. Community participation during planning and design stage will
be helpful in finding the best project location and in producing economical and acceptable
design. Location is a key factor for a development project and it should be determined by
social, economic, technical criteria and environmental considerations (Awakul and
Ogunlana, 2002a). By giving proper consideration during the planning and design stages,
the impacts on river ecology and society as a whole can be greatly reduced.
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Figure 6: Feedback loop concerning Project delay
Discrepancy in compensation payment (loop IPAP4): A dam construction project requires,
not only expropriation of land and buildings, but also involuntary resettlement of people
from areas where they live and work to other locations. When the affected groups are
involuntary moved, the main foundation on which their production systems, commercial
activities, life sustaining informal networks, trade linkage etc, rest are dismantled which has
significant impact on their income (Cemea, 1999). Displaced people suffer from the
allotment of poor agricultural land with the usual shortage of water and inadequate facilities
and substandard house and infrastructure. The concept of compensation is adversarial
because the project owner usually offers less, while the affected pleads for more (A wakul
and Ogunlana, 2002a). Indigenous people are often victims of no-lands no-titles no-
compensation resettlement practices. Social values and non market assets (cultural, social
cohesion, some environmental services, and compensation to the host community) are rarely
accounted. Usually the scope of project impact boundary is underestimated. Theoretically it
is said that compensation payment should be mutually agreed between the parties; but, in
reality, it is rarely followed in practice (ADB, 2007). This significantly reduces the income
of the affected families and has negative impact on their livelihood. Appropriate training
and education to upgrade the skills of vulnerable groups can empower them and enhance
their livelihood.
Early information, adequate input from the affected people and/or organizations trusted by
them on compensation strategies/assessment procedures will reduce discrepancy in
compensation payment. Timing of compensation payment is equally important.
Participatory, interdisciplinary, integrated, transparent, adoptive and systematic EIA will
minimize the interface conflict during implementation of resettlement plan.
Construction method (loop IPAP3): Some of the worst impacts occur during the
construction phase. Construction activities change water quality and quantity in rivers;
create noise, dust and many other hazards which may have ecological health impact
including the extinction of many fish and other aquatic species, huge losses of forest,
wetlands and farmland. By using suitable construction method, impacts such as boomtown
effect, water quality in rivers, pollution and many more can be reduced.
Feedback loop concerning information exchange
Information exchange is the cornerstone of a dam construction project. If the agencies fail to
inform the public and to gain their understanding at the planning and design stage of the
project, it will lead to conflict at later stages. People affected need clarification about the
end benefit of the project and wish to be informed and consulted when decisions are likely
to impact their lives. Disclosure of accurate and timely information for public knowledge
will reduce the anxiety of local people about the project and establish transparency beyond
suspicion. Figure 3 illustrates the causal loops of this sector and the important loops are
explained below.
Coordination (loop IE1): The affected people need to possess information in a timely and
accurate manner because they are the primary recipients of project impacts (Dahal, 2006).
Effective information sharing is essential at different phases of project life cycle for better
coordination among the project stakeholders which reduces the confusion &
misunderstanding and reduces conflict. Effective public participation and mutual
consultation at the early stage of a project will provide an opportunity to the project
development team to know public feeling, their issues and to acquire detail data on
magnitude, extent, and duration of direct and indirect impact of the proposed project on
environment and society. The monitoring and reporting component of environmental and
social impact of dam construction projects are very poor in Nepal. This has long impact to
create negative perception in the local people. High level of coordination is required
between the project team and local people to foster information sharing and mutual trust.
The information feedback cycle should be maintained to hold the public’s interest and
prevent alienation.
Mutual Trust (loop IE2): Trust appears to be an important factor in information and
knowledge sharing. Lau (1999) stated that it is not easy to tell whether trust leads to
communication or communication leads to trust. Communication is necessary in
establishing an atmosphere of trust. Mutual trust and cooperation foster good relationship
among project stakeholders whereas cost overrun and high interface conflict disappoint
project developers and ultimately affect interrelationship.
Confusion (loop IE3): When the community where the project is located is not clear about
the project plan and its objectives, confusion will be created. Confused and worried local
community will add to project risk and, later on, can create a conflicting situation.
Feedback loop concerning agreement
Every person has his/her own priorities and requirements. People have different thoughts,
ideas, beliefs and interact differently. It is a human tendency for individuals to seek and
choose the most pleasant outcome for themselves. During the negotiation process, a
cooperative attitude results in efficient solution to problems. Efficient negotiations further
motivate the local people to be more committed to project and consequently increase the
agreement on conflicting issues. Efficient negotiation helps to reduce conflict between the
parties; otherwise it will reach a level capable of degenerating into a dispute by eroding
trust. Figure 4 illustrates the causal loops of agreement on compensation payment and
support program. The important loops are explained below.
Agreement on Compensation payment (loop IC1): The public participation component of
EIA is the main vehicle through which public feelings and their feedback on project,
magnitude/extent/duration of direct and indirect impact can be known. Effective public
hearing may result in high level of conflict in the early stage of a project but reduces
conflict during construction. Klein (2001) claimed that public participation provides a
number of benefits that include improving the quality of decisions by anticipating public
concems and attitudes and thereby offering governments the opportunity to use consensus-
building to avoid confrontations. Although the agreement on compensation payment is
multidimensional, it mainly depends on the amount of compensation and the timing. In
addition, participatory and detail estimate of project impact will help to prepare better
packages of compensation which will increase the possibility of agreements. Coordination
with good attitude will contribute to achieving public acceptance.
Negotiation for support program (loop IC2): Effective implementation of support program
as required by the community will contribute to prevent or to minimize conflict during the
construction phase of the project. Identification of the real needs of project affected group
with their effective participation will minimize lengthy negotiations. Zikmann (1992) noted
that mutual consultation leads to mutual understanding and mutual understanding depends
on that successful negotiation Good relationship and information exchange between PAP
and project team will increase efficiency.
Feedback loop concerning sustainable livelihood indicators
Sustainable livelihood comprises of five capitals namely, human capital, social capital,
natural capital, physical capital and financial capital (DFID, 1999). Sustainability of dam
construction project and livelihood security of local people is closely related. A dam
construction project displaces people from their homes and land to other areas which
destroys their production systems and causes them to lose the opportunity to sustain their
livelihood. If water-related development projects and programs are not able to contribute to
the livelihood security of people, such projects will not get public support and they will fail
simply on the grounds of public resistance, mistrust or lack of ownership (Upreti, 2007).
Figure 5 illustrate the causal loops of sustainable livelihood indicator. Some of the
important loops are explained below.
10
Cultural and heritage (loop SLI1): Culture and heritage is a part of social capital of
sustainable livelihood. People resist the way that change affects their social relationships,
upsets their status, and threatens their security rather than resisting the technical
requirements of the change itself (Davis, 1972). Cemea (1997) states that sudden inflow of a
large army of construction workers and related groups within small, often traditional local
communities cause social/health/economic and cultural problems particularly at the local
community level.
Public health loop (loop SLI2): The exposure of the poorest people to illness is increased
by forced relocation, because it tends to be associated with increased stress, psychological
traumas, and the outbreak of parasitic and vector-borm diseases (Cemea, 2004). According
to Awakul and Ogunlana (2002a) the impoundment of huge mass of water could promote
the growth of mosquitoes, snails, etc., and lead to the spread of water-borne diseases like
malaria, liver fluke infection and schistosomiasis.
Feedback loop concerning Project delay
Project delay is a multidimensional variable. It depends on the availability of resources,
inflation, supporting infrastructure, conflict, political stability of the country and so on.
Project delay affects project cost and reduces client satisfaction and poisons relationships. If
corrective actions are not taken on time further delays to the project can occur and, finally,
the overall outcome of the project is affected. Figure 6 illustrates the causal loops of project
delay. The important loops are explained below.
Cost overrun (loop PD1): Project delay leads to many problems like cost overrun, need for
extra resources, relationship breakdown and others. Clients want to complete projects
within specified time, budget and to specified quality. However, cost overrun has become a
common problem in projects which dissatisfy clients and trigger other problems. For
instance, delay in payment may result in intemal conflict which may create further project
delay.
Internal conflict (loop PD2): To recover the schedule, project managers usually hire
additional manpower. If the people employed in the project do not have the same attitude
and interests, this can foster internal conflict. Additionally, risk sharing system also differs
across project delivery systems. Project delivery system defines the roles, responsibilities,
and relationships of participants. The distribution of potential conflicts varies among parties
depending on delivery systems used in the project (Pena-Mora and Tamasaki, 2001).
Productivity (loop PD3): Increasing the workforce on a project does not proportionally
increase productivity. Newly hired workers are more vulnerable to accidents and rework
which ultimately reduces project performance. However, more commitment and resource
availability increase the productivity level and reduces project delay. Delivery systems have
a strong influence on the interest of participants. It also leads to different organizational
structures and relationships among project participants. Adopting an appropriate delivery
11
system increases job satisfaction and motivation of the workforce resulting in high
productivity.
Aftermath of preceding conflict (loop PD4): When project delay occurs project participant
blame each other and they file claim. If the claim is not resolved on time, it may potentially
escalate into dispute and lawsuit where involvement of third parties or lawyers may be
needed to settle the dispute. Since claims involve additional money and time, the tendency
is to postpone them until the end of the project. This may affect project cash flow.
Ultimately it may lead to delays, added cost to participants and adversarial relationship.
Adversarial relationship often creates distrust among parties and leads to further conflict in
project.
Local people interruption (loop PD4): People emotionally resist changes if they are
adversely affected economically, personally, and socially (Awakul and Ogunlana, 2002) and
put pressure on project developers to take corrective actions or meet their demands.
The simulation model
The model has been formulated from the dynamic hypothesis discussed above. Integration
of several positive and negative variables leads to a complex system. In order to make it less
complicated, five sub models have been developed: (1) income of project affected people;
(2) sustainable livelihood; (3) information exchange; (4) interface conflict; and (5) project
delay. Each sector of the model consists of an array of building blocks such as stocks, flow,
converter, and connectors. The causal loop diagrams were transformed into a formal
simulation model using STELLA 9.0.3®. The main advantages of the simulation software
is the ability to model non-linear relationships in a user friendly way. Graphical functions
and equations have been used to describe the interrelationship of variables. Each variable is
assigned an equation to establish its position and relationship with other variables in the
model. Due to the complexity of detail model and limited space in this paper, only the
interface conflict sector of the final model is presented here in figure 7. A complete listing
of all the models, graphs and equations used in model is available from the authors.
12
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Interface Conflict
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Figure 7: Model of interface conflict sector
Model validation and sensitivity analysis
Model validation is carried out to verify whether a model replicates historical behavior,
whether every equation corresponds to a meaningful concept in the real world, whether
every equation is dimensionally consistent and whether the model is sensitive enough to
analyze policy recommendations (Sterman, 2000). However, Forrester and Senge (1980)
states that there is no single test which serves to validate a system dynamics model.
Therefore, structural validation tests, extreme condition, behavior validation, sensitivity
analysis have been done to validate the model. Some of important tests are explained below.
Structure validation: Causal loop diagram, along with stock and flow diagrams, which are
derived from various information sources have been inspected carefully and validated by
comparing them with the existing literature and through consultation with field experts on
dam construction. Subsystem diagrams, flow diagrams, and partial model tests were used to
assess the structure of the model. Model equations have been inspected, and expert opinions
have been gathered to confirm model consistency with real system. The model has been
checked to determine whether or not any potentially important feedbacks loops have been
omitted.
Extreme condition test: The model should behave realistically no matter how extreme the
inputs or policies imposed on it. The robustness of the model was tested by applying
extreme conditions and the model behavior was observed. Several extreme conditions and
13
combinations of these conditions were tested. The model was found to be robust because the
behavior during the tests was explainable (figure 8 and figure 9).
@ sustainable twetiiood indicator: 1-2 -
1 Fe
1- Compensation payment = 0.
2- Compensation payment =
———
a |
a o
0.00 2.00 4.00 6.00 2.00
Page 1 Years
Sustainable Livelihood Indicator Vs Time
?
Figure 8: Model behaviors at extreme values of compensation payment
Behavioral validation: Test of model behavior evaluated adequacy of model structure
through analysis of behavior generated by the structure (Forrester and Senge, 1980). In this
research, qualitative comparisons have been carried out because the reference mode of the
study was developed based purely on qualitative data. The model passed behavior test to
check whether the hypothesis of feedback structure generates the same behavior as in the
real world. Behavioral validation is attained by comparing the graphs generated from a base
mun of the model with time series graph (reference mode) plotted with expert’s opinion. The
model was found to be behaviorally valid.
Sensitivity analysis: Behavior sensitivity is a test to check model behavior by changing
parameter values. By performing behavior mode sensitivity analysis the authors have gained
more confidence in the model. Highly sensitive variables are considered for policy
analysis. Public hearing, public participation, information accuracy & its disclosure,
compensation payment and settlement program and monitoring and reporting were
identified as sensitive variables. The sensitivity analysis of public hearing for different
parameter values 0.5, 0.625, 0.75, 0.875 and 1 is represented by graphs 1, 2, 3, 4 and 5
respectively in figure 10. Different scenario of conflict at various levels of public hearing
support the statement by Bureekul, (2000) and Mantalumpa et al., (2000, cited in
Manowong, 2006), instead of resolving disputes public hearings sometimes create more
conflicts.
14
2
Figure 9: Model behaviors at extreme values of Public participation
@ certace conict:1-2-3-4-5
: 1
a el
0.00 2.00 4.00 6.00 2.00
Page 1 Years
2? Interface Conflict Vs Time
Figure 10: Sensitivity analysis of public hearing
Policy analysis and Design
Formulation of an effective and implement-able set of policies to avoid or minimize
interface conflicts at the construction stage of dam construction project through model
simulation is a main objective of this study. Extensive model experimentation, validation
and sensitivity analysis has been done to identify the important variables to attain suitable
leverage point. A set of policies are addressed to achieve the objectives. While choosing the
policy, practicality and usefulness have been checked with the experts working in dam
construction projects.
Public participation to create sense of belongingness and project acceptance (Policy 1)
From simulation it has been learnt that EIA is an effective tool to identify, to predict, to
evaluate and to communicate impacts in order to make more environmentally acceptable
decisions. During the interview, experts pointed out that EIA process was not participatory,
integrated and transparent enough. It was done to fulfill a bureaucratic requirement for
project approval and was isolated from the project planning and implementation cycle.
15
During EIA, the project developer focused more on the economic aspects rather than the
social and cultural aspects.
Warner (1999) pointed out that in economic infrastructure projects public involvement is
principally about involving the local population and/or their representatives and working
with them to find ways to mitigate the adverse environmental and social effects of the
project. All stakeholders especially potentially affected people should have the right to
participate in the area of design, through decision-making, construction operation and
decommissioning (Awakul and Ogunlana, 2004). Through public consultation and
incorporation of local knowledge in project development, it is possible to gain the trust of
local communities and, hence, facilitate smooth implementation of projects. However in
case of the Nepali project, the developers neglected some of the stakeholders at the
identification stage especially the marginal and ethnic groups.
Information accuracy, openness, education, funding, time and effective communication of
all project related data, policies, and decisions are regarded as important factors for public
hearing process. However, discussions with the project stakeholders revealed that
information about the project was not easily accessible in terms of language and style. The
public should be given all the critical information accurately in advance to bring all the
stakeholders to the same level in order to enable them to participate meaningfully in the
decision making process. Siwakoti (2005) pointed out that most of the negative effects are
by-passed in such a way as if they do not exist or they are treated as “little things” to be
easily mitigated. The public is not fully informed in advance about the pros and cons of
proposed projects. From the discussions it was noted that superficial EIA, information
concealment, lack of public participation at the early stage of the project and ineffective
public hearing prior to making final decision significantly reduced the quality of decisions
and impeded the project team from having the opportunity of early consensus-building to
avoid confrontations at later stages of the project.
Therefore, a project team needs to improve the EIA process and include the local people in
the planning and design stage of a dam construction project. Parameter value of public
participation; public hearing prior to final decision; training & education program;
information accuracy; and time and resource spent in EIA has been increased whereas
value of information concealment is decreased in the model keeping all other parameters
unchanged from the base scenario. Model behavior after implementation of the policy is
presented in Figure 11. It can be noted that by implementing policy I, more conflict surfaced
early in the project. However, at the later stage (construction) conflict reduced significantly.
The sooner the conflict can be identified and addressed, the higher the chance for resolution
success and the lower the cost (Harmon, 2003).
16
@ iosertace contict: 1-2
aa 1- Base Run
a 2 Policy
cs |
A
}
: ob
too ct rey aa
Page
Inverface Conflct Vs Tine
?
Figure 11: Evolution of interface conflict over time according to base scenario (1) and
policy I scenario (2)
Compensation and Resettlement program to sustain livelihood (policy II)
This touches the weakest section of the community and brings in a vast change to the
affected population (Dalua, 1993). Management of compensation payment and resettlement
of project displaced people can determine the success or failure of a project. However, the
issue of compensation payments in the developing world is adversarial; the payer usually
offers less than adequate while the displaced people (payees) plead for more than they
should be entitled to (Awakul and Ogunlana, 2002a). Payments are often delayed with
people who have voice often receiving payment easily and earlier than the others. Cernea
and Kanbur (2002) stated that resettlement activities should be conceived and executed as
sustainable development programs, providing sufficient investment resources to give the
persons displaced by the project the opportunity to share in project benefits. The
effectiveness of any resettlement plan is largely dependent upon the participation and
feedback from various stakeholders at all stages of the project cycle. It was noted from the
interview of experts that resettlement programs have mainly focused on the process of
physical relocation rather than restoring the livelihoods of displaced people. It is a
paramount need to prepare a realistic action plan in a manner that would give the
opportunity to PAP to physically establish and economically self-sustain in the shortest
possible time. A part of project eamings should be earmarked for development of
communities where the displaced have settled or for those who are affected but did not
receive compensation due to various reasons. Attention has to be given to the institutional
aspects of implementation of action plans.
It has been pointed out that although the Land Acquisition Act (LAA) 1977 is a major legal
document for handling acquisition and compensation, it has no provision for granting
compensation to PAPs who are not land owners. It has difficulties in addressing delay in
compensation, ensuring the vulnerable groups, ethnic minorities of making proper use of
compensation money to resettle to a living standard not less than that existing prior to the
project and is also inadequate to effectively deal with the problem of involuntary
resettlement. Dahal (2006) stated that there are other related acts but they do not address
issues of resettlement of people affected by development projects. Resettlement policies
differ across projects depending upon donor agencies that formulate and implement their
17
own project specific resettlement policies which have led to inconsistencies in
compensation and resettlement standards. This can give rise to disappointment and conflict
among various interest groups. However, effect of rules and regulations of the country was
not directly incorporated into the model.
This policy has been implemented to improve livelihood of the people by keeping human
beings as the primary stakeholders and the local people who are adversely affected by the
proposed project as the first beneficiary of the project. The parameter value of compensation
payment; support programs; employment in project; and training and education programs
were increased in the model while keeping the values of other variables constant. The
behavior of the model after implementation of Policy II (see figure 12) shows significant
reduction in interface conflict during the construction stage.
@ ierace contct:1-2-
i 1
1;Base Run
- NN -Policy II
An
00 2.00 00 6.00 2.00
Paget Years
? Interface Conflict Vs Time
Figure 12: Evolution of Interface conflict over time according to base scenario (1) and
policy II scenario (2)
Monitoring and reporting program to develop positive perception of dam project and
mutual trust (Policy III)
Sharing knowledge, experience and information relevant to proposed project enhances the
cost effectiveness of projects while the disclosure of timely information will allow
community level participation in decision making, which is necessary for consensus
building (Dahal, 2006). However, in the Nepalese context the situation is different;
generally the project developer tries to hide project information. An example is the Arun III
project where the case was filed for access to project documents and information both at the
level of the Supreme Court and the World Bank's Inspection Panel (Siwakoti, 2004).
Implementation of Policy III will improve the positive perception of the local community
and increase mutual trust. Parameter values of variables monitoring and reporting program
and information accuracy were increased in the model keeping all other parameters
unchanged from the base scenario. Model behavior after implementing Policy III is
presented in Figure 13 showing slight decrease in interface conflict in the project. An
18
effective implementation of policy on monitoring and reporting should identify success
stories to be replicated and failure to be avoided which will ultimately decrease negative
perception of the community and enhance mutual trust. This will reduce interface conflicts
in future dam construction projects.
@ retace confit: 1-2
1 1
1;Base Run
- 7 2\-Policy III
Se
ca
i
ce 0 L
too ety abo ey ao
age Year
? Interface Contlt Vs Time
Figure 13: Evolution of interface conflict over time according to base scenario (1) and
policy III scenario (2)
Implementation of Policy I, II & III together
The local public has the greatest potential to influence the plan. Changing the plan at an
early stage in the project cycle has lower implementation cost and higher chance for
success. Policy I will provide the chance for the project team to interact with the community
to gain broader public acceptance, assessing magnitude, extent and duration of direct and
indirect impact of proposed project which will help to formulate and implement policy II.
Meanwhile, policy III will help to gradually develop positive perception about dam
construction project. To get the best result all the three policies should be implemented
together. Implementation of all three policies resulted in interface conflict surfacing early in
the project but reduced the conflict during the construction stage significantly (Figure14).
The extra time and resources spent on implementing all the three policies together can be
justified with the benefit derived from it.
@ retace confit: 1-2
i 7 1-Base Run
pa Il & III together
2
L ° —
I
2
cE 0 va
too ety abo ey ao
Pagel Year
Interface Conflict Vs Time
?
Figure 14: Evolution of Interface conflict over time according to base scenario (1) and
policy I, II & III together scenario (2)
19
Conclusion
Interface conflict is a major problem in dam construction projects leading to many projects
being stopped at the planning stage whereas others are subjected to high levels of conflict
during the construction stage. Identification of root causes of interface conflict is necessary
to avoid and minimize the problem in present and future projects and to add substantial
value to projects. The causal loop diagram developed from qualitative data gathered from
case study and expert opinion was converted into mathematical model using STELLA 9.03
modeling software. The model was validated through structural and behavioral validation
tests. Extensive model experimentation, validation and sensitivity analysis results indicate
that the model is robust and capable to replicate the general behavior of interface conflict in
adam construction project.
This study reveals that interface conflicts at the construction stage of a dam project could be
caused by lack of effective EIA, public participation and mutual consultation with timely
and accurate information at the early stages of projects. This has impeded the project
development team from working in harmony with the affected people to know public
feelings, their issues and to adequately gauge the impact of the project on the environment
and society. Failure to work in harmony with the affected people has significantly increased
discrepancy in compensation payment, resettlement and support programs and finally
reduced the quality of decisions and the opportunity for consensus building to avoid
confrontations at the later stage of the project. Lack of monitoring and reporting of ex-post
situation of the project affected people, including environmental impact, has created long
term negative perception in the local people about the dam project.
Three promising polices have been explored to avoid and minimize interface conflict in dam
construction projects; viz: (i) public participation to create sense of belongingness and
project acceptance; (ii) compensation and resettlement program to sustain livelihood; and
(iii) monitoring and reporting program to develop positive perception of dam project and
mutual trust. Policies (i) and (ii) have the potential to reduce the level of conflict
significantly. To derive the most benefits for the project and the affected people, all three
policies should be implemented together - since the policies are mutually reinforcing. The
cost of implementing them can be greatly offset by the benefits of conflict reduction and the
positive image the project gains in the community.
Emerging from this study is the utility of system dynamics as a modeling tool for
understanding the dynamics of conflicts on dam construction projects. A model developed
through qualitative data can be simulated to create a computer based learning laboratory for
the project. This is a useful tool for policy makers on large projects, especially those likely
to be subject to social and environmental conflict.
20
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