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The present study focuses on the growing problem of the impacts of human displacement resulting from hydropower dam construction, within the context of the integrated lake basin management of dam reservoirs. Dam‐forced displacement and resettlement can pose severe challenges to the environmental, economic and social sustainability of a reservoir basin. A case study in Quang Nam Province, central Vietnam, suggests that many resettled communities experience impoverishment due to the lack of adequate replacement land, declines in supplemental food sources and reduced access to natural resources. In response to such situations, resettled residents may (i) destroy lake catchment forests for the purpose of converting them to farmland or engage in illegal logging; (ii) increase agrichemical inputs on reduced land, thereby polluting run‐off and groundwater; and (iii) place increased pressure on fish stocks and wildlife. Examples are provided from central Vietnam to illustrate the need for applying management approaches that allows the affected people to become beneficiaries of dam projects and for including civil society organisations in resettlement planning. The hydropower authority can fund benefit‐sharing mechanisms, including village‐level electrification and payment for environmental services schemes, in which resettled populations are paid for forest maintenance and protection to prevent erosion and deforestation, and reservoir access can be provided for fishing, aquaculture and agriculture. Civil society organizations can advocate for residents’ interests and for reallocation of protected forest land for community forestry. These approaches can be supported by an inclusive reservoir management board working to achieve environmental sustainability, economic growth and social equity.
