Executive Summary:

About 800 million people currently inhabit, or depend directly on, forests. They are among the world’s poorest and least protected social groups. Detailed studies by the specialist NGO, Forest Peoples Programme, reveal a systematic failure of the effectiveness of World Bank projects and policies to protect the rights and improve the livelihoods of forest peoples. Field studies, the testimony of affected communities and World Bank documentation all show clearly that recent and ongoing World Bank projects have:

Notwithstanding these serious problems, World Bank ‘safeguard policies’ – the main instruments that the World Bank relies on to prevent these kinds of problems – are in the process of being systematically weakened. This is explicitly being done to speed up, and reduce the costs of, World Bank lending. It also has the effect of reducing the number of complaints that can be filed against the Bank through the Inspection Panel. The gap between international human rights law and development best practices, on the one hand, and the World Bank’s policies and projects, on the other, is thus growing ever wider and serious social and environmental impacts are almost inevitable.

Regrettably, despite a professed commitment to a rights-based approach to development, the British Government has not intervened effectively to halt this erosion of standards. Indeed, the Secretary of State for International Development personally pushed through the Chad-Cameroon Pipeline Project even though it was demonstrably not in compliance with World Bank safeguard policies and was predicted to have serious social repercussions. The forest peoples in the project zone are now suffering exactly the problems that were predicted.

The British Government should take decisive action to revise and strengthen World Bank ‘safeguard policies’ in compliance with the World Bank’s obligation to uphold international human rights law. World Bank operations should provide project-affected groups means to redress and resolve unforeseen problems, through the introduction of new accountability mechanisms established at the outset of the projects and programmes. Strong interventions are also required to deal with ongoing problem projects. The ‘pressure to lend’ must not be allowed to override the need for effective mechanisms to ensure sustainable development and respect for human rights.  

Introduction:

The Forest Peoples Programme is a specialist NGO set up to support the rights of forest-dwellers in forestry, conservation and development activities. The programme runs a number of field projects, carried out jointly with forest peoples’ organisations, in Latin America, Central Africa, Southeast Asia and Siberia. It also helps forest peoples to participate in the evolution of national and international policies and standards regarding human rights, environment and development and to monitor the implementation of these policies at the local and national levels.

Over the past twelve years, the Programme has been carefully contributing to and monitoring the evolution of World Bank policies - especially those of most direct relevance to forests and forest peoples. This has included: participation in the main World Bank-NGO dialogues on the revision of World Bank policies on Forests, Indigenous Peoples and Involuntary Resettlement; acting as a member of the World Bank’s Technical Advisory Group on the Forestry Policy; carrying out detailed participatory field studies of World Bank projects; assisting forest peoples to document their own experiences as ‘project affected persons’; publication of case studies and analyses; dialogue and extensive correspondence with the UK Government including the Secretary of State for International Development and the Department for International Development (DFID).      

This submission summarises the conclusions and recommendations that result from this detailed work on these policies and their implementation. Some key documents are annexed. Others are referred to in the endnotes and can be obtained from our web site or from our offices on request.

The World Bank’s ‘safeguard policies’:

The World Bank has ten ‘safeguard policies’, conceived by the Bank as a set of ‘minimum standards that all Bank-supported operations must meet’ [1] . Safeguard policies are binding on World Bank staff, constituting a set of standards and procedures that staff must observe during project design and implementation. This submission is principally concerned with three of these policies, namely those on Involuntary Resettlement, Forests and Indigenous Peoples. While initially conceived as a safety net to ensure that vulnerable social groups and environments do not get overlooked and thus harmed in Bank projects, such policies have become of crucial importance to people affected by World-Bank assisted projects because they fulfil a number of critical functions:

Evidence of poor compliance:

Successive implementation reviews find that compliance with safeguards remains a major problem. A recent review by the World Bank’s Operations Evaluation Department (OED) of the World Bank’s environmental performance notes inter alia that Environmental Assessments are too often made late in the project cycle, that ‘quality assurance is in doubt’, that Task Managers do not adhere to safeguard policies and that there remains a lack of clear accountability and responsibility. A key conclusion of the review is that ‘fundamental reform of implementation and accountability processes is critical’. [2]   Evidence of lack of due diligence and compliance failures can be found in the following policy reviews:

Involuntary Resettlement review:

According to the 1998 OED review of the World Bank’s performance in resettlement, many projects still suffer from an underdeveloped resettlement plan (RP).  The Bank often completes a project before staff can determine the probability that the RP will in fact fulfil its objectives, and there is a definite lack of monitoring and follow-through with regards to RPs.  Restoration of affected people's incomes remains weak, and there is no evidence of resettled people being better off than before the project was implemented. Often, baseline data used is inadequate for the construction of a satisfactory RP, and few projects actually had outcome data. [3]

Forestry Policy review:

A key finding of the 1999 OED Forest Policy review was that the Bank did not fulfil its main goal of curbing deforestation.  The policy was largely ignored in Country Assistance Strategies, Economic and Sector Work, and structural or sectoral adjustment lending programmes, and when the latter took account of the policy, there were no long-term provisions to ensure governance reform and institution building.  There was an overwhelming failure to promote poverty alleviation and citizen participation and questions concerning gender issues, governance issues and land tenure regimes remained routinely unaddressed.  There was a lack of follow-through with the policies in the course of the projects and a lack of monitoring, reporting and evaluation of the project development. [4]

Indigenous Peoples Policy review:

For many years FPP has been calling for an OED implementation review of the Indigenous Peoples Policy, and this was not undertaken until prompted by external research carried out by FPP in 1999 and 2000, wherein indigenous people also submitted case studies to a meeting held in Washington DC in May 2000, attended by the World Bank staff and the indigenous peoples representatives.  The study found that compliance was weak both within the Bank and the borrower countries, and this had a severe negative impact on indigenous people. [5]

The baseline studies were weak, participation of indigenous people was very limited, and was generally a one-way flow of information, rather than a true exchange of concerns, whilst information concerning the project was rarely accessible to the communities. Land and resources issues were often overlooked, and yet form a substantial part of OD 4.20.  Often no Indigenous Peoples development Plan (IPDP) was included, or contained inadequate provisions.  Projects were appraised without the Bank’s staff being in compliance with the policy. [6]   This FPP report paved the way for the OED to initiate an implementation review of OD 4.20, which was set in motion in April 2001, and which is now nearing completion.

A recent public presentation of a draft pre-publication report of the OED review confirms the poor pattern of compliance reported by FPP studies. Its survey of 89 closed projects that had affected indigenous peoples during the period 1992-2001 found, for example, that only 58% had applied the OD and that just twelve projects (14%) had self-standing Indigenous Peoples Development Plans as required under OD4.20. [7] The same review finds that the participation of indigenous peoples in decision-making in Bank projects affecting them was “low” and that just 20% of projects had included clear benchmarks for monitoring to measure impacts on indigenous communities.

Recommendations for enhancing compliance:

The study undertaken by FPP outlined some recommendations to improve compliance within the World Bank and to ensure indigenous people are not worse off after project completion:

The Wapenhans report, which was commissioned by the World Bank in the wake of the highly damaging Morse report on the case of the Narmada Dam, concluded that the underlying cause of poor compliance with safeguards was the lack of appropriate incentives for staff, who were not rewarded for adherence to safeguards but instead for quick disbursement of loans. The study notes that the Bank suffered from a “pervasive preoccupation with new lending”, which biased institutional priorities and management structures to such an extent that the “credibility [of loan agreements] as binding documents has suffered” and “evidence of gross non-compliance [with Bank covenants] is overwhelming”. [8]   Since this report was published, in 1992, some effort has been made within the Bank to ensure that project assessment is based on performance, and the Bank has decentralised to encourage closer engagement with client governments. This has not however resulted in greater participation and consultation of affected peoples and civil society organisations within the borrower countries.

Despite these problems with projects and continuing poor compliance with safeguards, strong pressure is being exerted by some quarters to weaken instead of strengthen the safeguard policies. This pressure to weaken safeguards stems from:

Annex 1
Annex 2a
Annex 2b
Annex 3