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DAM-L PRESS ADVISORY MARCH 29, 2001 (fwd)



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Date: Tue, 27 Mar 2001 20:48:20 -0800 (PST)
Message-ID: <200103280448.f2S4mKm02788@DaVinci.NetVista.net>
Subject: PRESS ADVISORY  MARCH 29, 2001
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PRESS ADVISORY
International Rivers Network

March 29, 2001

Doris Shen
(510) 848-1155 ext 317

ARRESTS, INTIMIDATION CONFIRM HUMAN RIGHTS ABUSES AT THREE GORGES DAM
U.S. FIRM MORGAN STANLEY URGED TO CEASE FINANCING OF YANGTZE MEGAPROJECT

A recent report by Chinese journalist Wang Yusheng details how five 
representatives from a town slated to be submerged by Three Gorges Dam have 
been arrested for organizing petitions protesting corruption in the 
resettlement program. IRN has written to Wall Street firm Morgan Stanley 
insisting that their funding of the dam makes them complicit in these human 
rights abuses and urging the firm to cease their support of the dam. (see 
attached letter)

In early March, eight farmers elected from Yunyang County planned to travel 
to Beijing to present party officials with petitions detailing resettlement 
grievances in their township. Over the past four years, villagers across 
the areas slated to be submerged have been organizing themselves into 
unauthorized associations to protect their interests.  The associations 
have already sent numerous petitions to Beijing protesting corruption by 
local resettlement officials.

If completed, Three Gorges Dam would displace close to 2 million people, 
the largest forced resettlement for a single project in the world.

Before the eight representatives could leave their township, county police 
arrived to arrest them. Two were caught. Three representatives, including 
He Kechang who is seen as the local organizer of the petitions, escaped to 
the city of Yichang, from where they intended to travel to Beijing.  At 
Yichang, He was attacked and robbed by two men he believes to have been 
sent by Yunyang county officials. He and his two fellow representatives 
escaped from the thugs but were then arrested at their hotel by Yunyang 
county police. The three are expected to face jail sentences of three to 
seven years for "disturbing Three Gorges resettlement."

To speed up the process of evictions, the secretary general of Yunyang 
County in January issued a mandate of "government sanctioned 
resettlement."  This allows resettlement officials to use police force to 
relocate villagers. Anyone opposing resettlement can now be charged as a 
criminal.

In light of the recent arrests, IRN wrote to Wall Street bank Morgan 
Stanley on March 26, 2001, calling on the firm to immediately cease all 
direct and indirect financing of Three Gorges Dam.

Since 1995, China International Capital Corporation (CICC), which is 35% 
owned by Morgan Stanley, has served as an advisor on overseas fund raising 
for the Three Gorges Project Development Corporation. In January 1999, CICC 
purchased $250 million in bonds for the Three Gorges Project Development 
Corporation. Board members of CICC include Morgan Stanley executive management.

China Development Bank, a state owned bank established to finance large 
scale infrastructure projects, lists the Three Gorges Dam as its top loan 
commitment. In 1997 and 1999, US investment firms, including Morgan 
Stanley, helped underwrite $830 million in CDB bonds. Most recently, in 
February 2001, CDB announced plans to auction $22 billion in bonds.

IRN has asked Morgan Stanley to clarify whether either CICC or Morgan 
Stanley is involved in purchasing these latest CDB bonds.

Project authorities state that they need to raise almost a quarter of the 
dam's official price tag of $24.5 billion from overseas.

"The arrests of the Yunyang county representatives are a clear example of 
the violation of rights to freedom of expression and association. Morgan 
Stanley is complicit in these and other human rights violations if they 
continue to back Three Gorges Dam," said Doris Shen, IRN's Three Gorges 
Campaigner.


                         -30-

Wang Yusheng's original report is available at www.hk-sanxia.org

An English translation of the report can be found at 
http://www.probeinternational.org/pi/index.cfm?DSP=content&ContentID=1894

For more information on US financing of Three Gorges 
Dam  www.floodwallstreet.org

Letter to Morgan Stanley:


March 26, 2001

Philip J. Purcell
Chief Executive Officer
Morgan Stanley & Co. Inc.
1585 Broadway, 40th Floor
New York, NY 10036

Dear Mr. Purcell,

In light of recent evidence of human rights abuses at Three Gorges Dam, we 
are writing once more to urge Morgan Stanley to commit to no future bond 
underwriting or financial support for China Development Bank, a major 
financier of Three Gorges Dam. According to recent reports (see enclosed 
articles) five people have been detained by police for organizing petitions 
on Three Gorges resettlement problems. Articles 19 and 21 of the United 
Nations Human Rights Declaration list the freedoms of expression and 
peaceful association as inherent and inalienable human rights. The reports 
clearly demonstrate how project authorities suppress freedom of expression 
and association of those involved in the resettlement process.

The China Development Bank (CDB) lists the Three Gorges Project Development 
Corporation as its top loan commitment. China International Capital 
Corporation (CICC) has, since 1995, been the financial advisor to the Three 
Gorges Project Development Corporation on overseas capital raising. Since 
Morgan Stanley is a 35% holder in CICC, and since Morgan Stanley was a 
participating underwriter of $830 million in CDB bonds in 1997 and 1999, we 
call on Morgan Stanley to refrain from being involved in purchasing and 
underwriting CDB bonds while funding from those bonds are leading to 
construction of Three Gorges Dam. We also recommend that Morgan Stanley 
communicate to Chinese authorities and to CDB representatives that it will 
not assist in fundraising for Three Gorges Dam.

In February 2001, Bloomberg News reported CDB's plans to auction 185 
billion yuan (22 billion USD) denominated bonds. Most recently, on March 
12, 2001, CDB announced the auction of 12 billion yuan in bonds. Given the 
concern of CICC's financial advising on capital raising for Three Gorges 
Dam, has either CICC or Morgan Stanley been involved in purchasing CDB 
bonds?  While US investment banks cannot buy RMB denominated bonds, please 
clarify whether Morgan Stanley, through its joint venture China 
International Capital Corporation, have been able to buy such bonds.

We ask you to commit to no future direct or indirect financing for Three 
Gorges and China Development Bank, immediately. Thank you for your 
attention to this matter, and we look forward to your reply.

Sincerely,

Doris Shen
Three Gorges Campaign
International Rivers Network


Enclosures:      March 22, 2001 South China Morning Post, Jasper Becker
                    "Three Gorges Petitioners 'held by police'"
                         March 23, 2001 Three Gorges Probe, Wang Yusheng
                    "Three Gorges Dam Petitioners Abducted"

Cc:     Peter Clarke, Chief Executive Officer, China International Capital 
Corporation
         Donald Kempf, Chief Legal Officer and Secretary, Morgan Stanley
         William J. O'Shaughnessy, Jr., Principal, Morgan Stanley
         John Beneke, Principal, Morgan Stanley


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