Forest Peoples Programme: Update on the revision of the World Bank’s Indigenous Peoples Policy

The World Bank Group is soon to release its revised draft IP policy (Operational Policy 4.10) which will affect how the Bank and Borrower governments deal with indigenous peoples in development projects and programmes. It is likely that the Bank will invite comments on its new draft IP policy in the next few months when it will launch a second series of external consultation meetings involving indigenous peoples. At the same time, the Bank’s own quality control arm, the Operations Evaluation Department (OED) is belatedly starting its own review of the quality of implementation of the Bank’s IP policy in Latin America, Asia and Africa - something NGOs have been demanding for years.

In previous consultations in 1998, indigenous peoples sent the Bank a clear message that any new IP policy must contain stronger requirements on land rights and accept the principle of prior and informed consent. The latest draft policy (February 2001) indicates that while the policy has addressed important issues like participation, it is weaker than the existing policy (OD4.20) because it now makes no requirements on borrowers to take action to secure indigenous land and resource rights. The Bank is also refusing to amend its operational policies to take account of the recommendations made by the World Commission on Dams. This failure to adopt emerging standards inevitably means that Bank policies are becoming stagnated and falling behind international standards.

Without a strong and clear mandatory IP policy, indigenous peoples will not be able to hold the World Bank and its clients accountable when their operations adversely affect indigenous communities and their territories. Binding (mandatory) provisions that respect indigenous rights are especially important because they provide indigenous peoples with firm grounds for redress through the Bank’s only formal and independent complaints mechanism (Inspection Panel).

Despite assurances from the Bank that its safeguard policies are not being diluted, NGOs are finding disturbing evidence of policy weakening. The comments of indigenous peoples will be important when the draft policy is finally released for consultation to ensure that the revised Indigenous Peoples policy (OP4.10):

· is based on the actual experience of indigenous peoples themselves as expressed in the findings of the current implementation review of OD4.20;

· incorporates the recommendations made by indigenous peoples in World Bank external consultations on the policy;

· respects the right to self-determination and strengthens the existing requirements on the land and customary resource rights;

· is introduced in tandem with major institutional reforms to improve the practical application of the policy (incentives for staff to comply with the policy, penalties for lack of compliance, adequate budgets to cover the effective participation of indigenous peoples, new accountability mechanisms).

The World Bank’s existing policy on Indigenous Peoples (Operational Directive 4.20)

The World Bank’s current policy on indigenous peoples, known as OD4.20, was adopted in 1991 and is still in force. It is one of ten so-called “safeguard” polices that are supposed to protect the environment and vulnerable social groups from the adverse impacts of Bank-financed operations. The central objective of the 1991 policy towards indigenous peoples is to:

“ensure that the development process fosters full respect for their dignity, human rights and cultural uniqueness” (para. 6)

· Rejection of projects where negative impacts cannot be adequately ameliorated

Indigenous organisations complained that the policy had been developed and finalised without indigenous participation. Despite these criticisms, indigenous groups acknowledge that, if the 1991 policy is complied with properly, it can form a useful framework for promoting indigenous rights as a part of World Bank operations. Unfortunately, the application of the policy in the 1990s has been patchy and sometimes poor. Common patterns of poor compliance with OD4.20 include:

Obstacles to effective implementation are typically formed by Borrower policies and national laws that discriminate against indigenous peoples and disregard their customary rights. The lack of any concrete incentives for Bank staff and implementing agencies to adhere to the policy is another major obstacle to achieving acceptable development quality.

Poor compliance means that indigenous peoples continue to find themselves “worse off” after Bank-financed projects. There are still cases where participation is superficial and cases where indigenous communities are only consulted late in the project cycle - often after difficult struggles to obtain participation. Indigenous peoples also complain that the IP policy is not properly applied across the Bank’s whole portfolio. They observe that any good achieved by the Bank’s social development projects targeting indigenous peoples is too often undermined by other Bank-financed operations including structural adjustment loans, export projects, mineral extraction, trade liberalisation and privatisation packages.

Indigenous peoples and support NGOs stress that in order to increase the quality of World Bank operations it is necessary to strengthen policy requirements and undertake institutional reforms to increase the quality of implementation of the policy on the ground. They add that there is also a need to integrate the Indigenous Peoples policy into the whole range of World Bank operations in borrower countries, including structural adjustment lending.

The World Bank began revising its Indigenous Peoples Policy in 1997. During a round of public consultation held in 1998-1999, Indigenous Peoples Organisations made it clear to the Bank that any revised policy should be stronger than the 1991 directive, particularly as regards indigenous land rights and the right to self determination. Another central message was that any revision of OD4.20 should be based on a participatory review of its implementation based on indigenous peoples’ own experiences of Bank operations.

(b) use self-identification as the principle criterion for deciding where the policy applies;

(d) prohibit involuntary resettlement and underline the need for indigenous land security;

(g) enable tracking of World Bank projects and portfolios by indigenous peoples organisations;

(i) involve indigenous representatives in negotiations between the World Bank and its clients (national governments);

(k) involve indigenous peoples in project implementation, monitoring and evaluation.

After two years of internal consultations, in February 2001 the Bank finally produced a draft policy (OP4.10) and draft Bank Procedures (BP4.10) that were approved for circulation among indigenous peoples and other stakeholders. These two policies are interrelated and form part of the Bank’s new policy framework that also includes a third document called the Sourcebook that looks at topics in depth, and sets out non-mandatory best practice guidelines. The sourcebook is will not be finished until 2002.

Although the draft policy is incomplete, Bank staff planned to post the draft on the Bank web site in April 2001 with an invitation for comments. However, to date the draft policy is not on the web. Despite the delay in electronic consultations, the February 2001 draft policy was handed out by Bank staff in a public workshop in March 2001.[1] The Forest Peoples Programme has examined this draft policy and is able to share its preliminary evaluation.

Draft OP4.10 (February 2001) retains the global objective to foster “full respect for the dignity, human rights and cultures of indigenous peoples”. The basic triple goal of mitigation, participation and benefit sharing under OD4.20 is also broadly retained in OP4.10. There are potentially progressive aspects of the proposed OP4.10 that could be positive if local people are involved properly. These include the production of a Social Assessment for some types of project. However, other aspects of the revised policy are disappointing and reveal that OP4.10 may actually be weaker than OD4.20. The Draft OP4.10:

· lacks mandatory requirements on securing indigenous land and customary resource rights. Under the proposed policy the Borrower is only supposed to pay “particular attention” to indigenous rights to land and resources, and the Bank only offers assistance for regularising land tenure “upon request from the Borrower” (Draft OP4.10 paras. 12,13,20e). This provision does not meet international human rights standards. [3] It also removes provisions under the existing policy that require the Borrower to take “special action” to safeguard indigenous rights to land etc (OD4.20: paras 2,9,15c,17);

· does not prohibit the involuntary resettlement of indigenous peoples, and has very few cross-references to the World Bank’s Involuntary Resettlement policy (OP4.12);

· only requires social assessment and participatory baseline studies where an operation is pre-judged by Bank staff to be potentially harmful (Draft BP4.10 para. 5). This is a serious loophole as staff responsible for project planning may fail to foresee potential problems;

· only requires an Indigenous Peoples Plan (IPP) where the social assessment anticipates adverse impacts (BP4.10:para 6,7). This new provision changes existing policy provisions under which an Indigenous Peoples Development Plan (IPDP) and full baseline studies are required for all projects affecting IPs (OD4.20: para.13);

· is ambiguous about the operational procedure for deciding where the policy applies (compare draft OP4.10 para 5. with draft OP4.10 para 8).

· is logically incoherent as it recognises the right to prior informed consent for intellectual cultural property (Draft OP4.10: para 16) but NOT for physical cultural property (land and livelihood resources).

· introduces a new “process framework” for indigenous peoples affected by parks and protected areas which is not defined in the policy (Draft OP4.10: para 15);

· is incomplete: it lacks the accompanying detailed sourcebook (GP4.10) that will not be available until 2002.

· confuses the terms “participation” and “consultation” between OP4.10 and BP4.10;.

· ignores many key recommendations made by indigenous peoples in 1998 e.g., the main criterion for application of the policy be self-identification;

· only enables Bank technical assistance for positive legal and institutional reforms on indigenous issues on “request from its borrowers” (Draft OP4.10: para.20e).

· does not seem to apply to full structural adjustment loans (Draft OP4.10 para 1, fn 1).

The above analysis demonstrates that despite some positive modifications, the proposed changes would produce a stagnated, less effective and weakened policy that arguably fails to meet fundamental human rights guarantees for indigenous peoples.

In April 2001, the Bank’s quality control arm - the Operations Evaluation Department (OED) - belatedly began a review of the implementation of the existing policy. This was something that NGOs had been demanding for several years prior to any changes in the policy itself. The review will start in Peru and may involve other countries in Latin America, Africa, India and other parts of Asia. Given several years investing time and resources in the revision of OD4.20 - with two rounds of external consultations (1998 and 2001) - vital added value will be lost if the policy revision is rushed in its final stages. However, the Bank plans to push ahead with its consultations on the revision of its policy without waiting for the results of this study. The OED team and Bank staff managing the production of OP4.10 must reschedule their plans to allow enough time for proper incorporation of the review findings into the policy revision - even if this means that the final schedule for the adoption of OP4.10 has to be delayed.

Since OP4.10 is significantly weaker than OD4.20, it is important to recall that OD4.20 remains binding on all Bank staff until it is replaced by a new policy. In the short term, indigenous peoples will have to decide if they are going to reject the draft OP4.10 completely. Or they may demand that the revisions are delayed while OED review of OD4.20 is completed before OP4.10 is finalised. IPs might also decide to call for major revisions to OP4.10 to ensure that new IP policy is consistent with international human rights standards. At the same time, continued pressure will be required to convince the Bank to initiate institutional reforms to improve compliance with its own social and environmental policies. This should include appropriate incentive structures to encourage Bank staff, Borrowers, implementing agencies and private sector partners to adhere to safeguard policies. It should also include new mechanisms to facilitate indigenous participation in the monitoring and evaluation of projects and programmes.

In the longer term, indigenous peoples and civil society organisations will have to re-engage the World Bank in a serious dialogue about the whole question of policies and operational standards relating to the Bank, all IFIs, development agencies and the private sector. There will be a need to explore possibilities for new mechanisms for accountability and independent standard-setting bodies to regulate global institutions like the World Bank.

A more detailed analysis of draft OP4.10 against international human rights standards is currently being prepared by FPP. For more information, please contact:

The Forest Peoples Programme, together with FERN, acts as the Northern Office of the World Rainforest Movement.http://www.wrm.org.uy

[1] Roundtable on Indigenous Peoples, Biodiversity Governance and Donor Best Practice held in Hundested, Denmark, 8-9 March 2001

[2] World Bank Operational Manual, Draft OP 4.10, February 6, 2001 y Draft Bank Procedures 4.10, 25 January 2001

[3] See, for example, Convention on the Elimination of All Forms of Racial Discrimination that states-parties are obligated to, inter alia, prohibit discrimination with regard to the right “to own property alone as well as in association with others.” In a 1997 General Recommendation, the Committee on the Elimination of Racial Discrimination elaborated on this and called upon states-parties to “recognize and protect the rights of indigenous peoples to own, develop, control and use their communal lands, territories and resources and, where they have been deprived of their lands and territories traditionally owned or otherwise inhabited or used without their free and informed consent, to take steps to return these lands and territories.” CERD Rec.XXIII on Indigenous Peoples, 1997