Forest Peoples Programme: Indigenous Peoples Organisations' letter to the World Bank: the World Bank Management's Response to the Extractive Industries Review

Indigenous peoples took a strong interest in the Extractive Industries Review (EIR) and made a number of submissions and inputs throughout the process. This interest is based on the well documented fact that, without full recognition of and respect for our rights, extractive industries exacerbate poverty among indigenous peoples, undermine our socio-cultural integrity and well being and, in some cases, threaten our survival as distinct peoples.

We were therefore greatly encouraged that Dr. Salim acknowledged our experiences in his Final Report on the EIR and made a series of recommendations aimed at ensuring that our internationally guaranteed rights be recognized and respected by the World Bank Group as prior conditions to its continued involvement with extractive industries. We strongly endorse Dr. Salim’s conclusions and recommendations and urge the WBG to fully implement them in practice. We also strongly endorse Dr. Salim’s statement in his letter to President Wolfensohn submitted with the Final Report in January 2004 that “the revision of the safeguard policy on indigenous peoples is a fundamental test of the World Bank’s commitment to poverty alleviation through sustainable development.”

As shown in our attached detailed submission, the Management Response (MR) to the EIR and the current draft of the safeguard policy on indigenous peoples (draft Operational Policy 4.10 on Indigenous Peoples, 17 May 2004 version) demonstrate that the WBG is failing this fundamental test. We therefore insist that the WBG refrain from funding extractive industry projects until such time as it can demonstrate that our rights, including the right to free, prior and informed consent, are recognized in WBG policies and practice.

We urge you, as the Board of Directors of the World Bank Group to shift the balance towards poverty alleviation and sustainable development by fully respecting the rights of indigenous peoples.

The MR’s misappropriation and misinterpretation of FPIC as free, prior and informed consultation is unacceptable. In principle, the same is also the case for applying a ‘broad community acceptance/support’ standard to indigenous peoples as this undermines indigenous peoples’ internationally guaranteed right to consent to activities that affect us and equates indigenous peoples and our rights to those of any local community. In effect, this negates indigenous peoples’ self-determining status and rights by casting indigenous peoples as nothing more than a sub-set of local communities.

The WBG can and should exceed the minimum level of obligation imposed on it by international law and take a proactive approach towards human rights, including disavowing its presently held position that it cannot address civil and political rights because of its Articles of Agreement. The Board should request a legal opinion from the Office of the General Counsel that sets forth the WBG’s obligations concerning human rights in light of contemporary international law. Additionally, the WBG needs to assess – as a matter of legal obligation – the obligations of its borrowers pursuant to ratified international human rights treaties – as required for environmental treaties under two Bank policies – and general international law, and ensure that its programmes and projects do not undermine those obligations.

Recommendation: The World Bank Group should, in the first place, formally meet with indigenous peoples’ freely chosen representatives to discuss what changes are required to OP 4.10 and what measures are needed in relation to IFC safeguards, to ensure that FPIC is appropriately operationalized in a manner consistent with indigenous peoples’ rights. In this context and contrary to the statement included in the Management Response, we emphasize that the legal roundtable recommended by the EIR and committed to by Bank management has not been held. Indigenous peoples informed Bank management before, during and after the May 2004 meeting with Bank lawyers that this meeting was not the legal roundtable and that such a (jointly organized) meeting was still expected.

We call upon the WBG to take the opportunity provided by the Extractive Industries Review to make a concrete contribution to the UN Decade on Indigenous Peoples by working with us to bring a positive conclusion to the ongoing revision of O.P. 4.10 on Indigenous Peoples.

Apu’ Manglang Glupa’ Pusaka , Philippines
Asian Indigenous Peoples Pact (AIPP)
Asian Indigenous Women’s Network (AIWN)
Association of the Kamchadal , Koryak Autonomous Okrug,

Russia

Association Tapaynut
Buffalo River Dene Nation
Centre for Environmental Research and Development, Papua New Guinea
Centre for Organisation Research & Education (CORE), Northeast India
Cordillera Peoples Alliance, Philippines
Comunidad Aymara, Bolivia
Comunidad Kolla Tinkunaku
Comunidad Indigena del Pueblo Iupiguoroni
Comicao del Professores Indigena de Pernambuco (COPIPE)
Confederacion Indigena Tayrona, Colombia
Consejo de la Nacion Otomi
Consejo de Pueblos Nahuas del Alto Balsas, Guerrero, Mexico
Ethno-Ecological Information Centre “Lach” Information Center (RAIPON, Russia)
Federacion de Mujeres Campesinas “Bartolina Sisa”, Bolivia
Foundation for Aboriginal and Islander Research Action (FAIRA), Australia
Fundacion Alitasia, Venezuela
Gukom Sog Pito Kobogolalan, Philippines
Gonat Sog Pito Kodolongan, Philippines
Hill Students Council (PCP), CHT, Bangladesh
Ilkisongo Pastoralists Initiative (IPASTORIN), Tanzania
Indian Law Resource Centre
Indigenous Environmental Network (IEN)
Indigenous Peoples and Nations Coalition, Alaska
Indigenous Peoples Coordinating Committee for Africa (IPACC)
Itelmen Council of Kamchatka “Tkhsanom”, Koyrak Autonomous Okrug,

Russia

International Indian Treaty Council (IITC)
Inuit Circumpolar Conference
Ligue Nationaale des Associations Autochtones Pygmees du Congo, (LINAPYCO)
Mataatua Declaration Association, Whakatane, Aotearoa, New Zealand
Movimiento Indio Tupq Katari
Ogiek Cultural Initiatives Programme (OCIP)
Organizacion Achuar ti Iruntramu
PANAGTAGBO (Mindanao Indigenous Peoples Consultative Council, Inc.), Philippines
PRODECAP-SADAD du Niger
Puna Matariki, Aotearoa/New Zealand
Russian Association of Indigenous Peoples of the North, Kamchatka Region
Russian Association of Indigenous Peoples of the North, the Bystrinsky District, Kamchatka
Russian Association of Indigenous Peoples of the North, the Milkovsky District, Kamchatka
Russian Association of Indigenous Peoples of the North, the Sobolevsky District, Kamchatka
Russian Association of Indigenous Peoples of the North, the Ust-Kamchatksy District, Kamchatka
Russian Association of Indigenous Peoples of the North, the Elizovsky District, Kamchatka
Russian Association of Indigenous Peoples of the North, the Karaginsky District, Koryak Autonomous Okrug
Russian Association of Indigenous Peoples of the North, the Olyutorsky District, Koryak Autonomous Okrug
Russian Association of Indigenous Peoples of the North, of the Petropavlovsk-Kamchatsky
Russian Association of Indigenous Peoples of the North of Vlyuchinsk, Kamchatka
Russian Association of Indigenous Peoples of the North of Klyuch, Kamchatka
Russian Association of Indigenous Peoples of the North, of Palana, Koyrak Autonomous Okrug
Saami Council
Servicio de Apopyo Intercultural (SAIAL)
Siocon Subanon Association Incorporated, Philippines
Shimin Gaiku Centre, Japan
Taungya Foundation, Bangladesh
Tebtebba Foundation
Te Rapana Trust, Aotearoa/NZ
Universidad Indigena Internacional

Comments on the World Bank Management Response to the Final Report of the Extractive Industries Review (04 June 2004)

Indigenous peoples took a strong interest in the Extractive Industries Review (EIR) and made a number of submissions and inputs throughout the process. This interest is based on the well documented fact that, without full recognition of and respect for our rights, extractive industries exacerbate poverty among indigenous peoples, destroy the bases for our cultures and, in some cases, threaten our survival as distinct peoples.

Numerous reports confirm that this experience with EI is not confined to the past and is “one of the major human rights problems faced by [indigenous peoples] in recent decades.” [1] Moreover, should our rights continue to be disregarded, we expect that our negative experience with extractive industries will continue and increase. As the author of UNDP’s 2004 Human Development Report observes “Much of future investments in extractive industries are expected to be in indigenous people’s territories. Investments that take away the economic basis of their livelihoods threaten their very existence.” [2]

We were therefore greatly encouraged that Dr. Salim acknowledged our experience in his Final Report on the EIR and made a series of recommendations aimed at ensuring that our internationally guaranteed rights be recognized and respected by the World Bank Group as prior conditions to its continued involvement with extractive industries. We strongly endorse Dr. Salim’s conclusions and recommendations and urge the WBG to fully implement them in practice. We also strongly endorse Dr. Salim’s statement in his letter to President Wolfensohn submitted with the Final Report in January 2004 that “the revision of the safeguard policy on indigenous peoples is a fundamental test of the World Bank’s commitment to poverty alleviation through sustainable development.” [3]

As discussed below, the Management Response to the EIR and the current draft of the safeguard policy on indigenous peoples (draft Operational Policy 4.10 on Indigenous Peoples, 17 May 2004 version) demonstrate that the WBG has failed this “fundamental test.” We therefore insist that the WBG refrain from funding extractive industry projects until such time as it can demonstrate that our rights, including the right to free, prior and informed consent, are recognized in WBG policies and practice.

The EIR report clearly states that there is a role for the World Bank Group in the oil, gas and mining sectors “only if its interventions allow extractive industries to contribute to poverty alleviation through sustainable development. And that can only happen when the right conditions are in place.” The EIR report then specifies a range of inter-related conditions and recommendations that need to be met or adopted before WBG involvement in extractive industries can be expected to contribute to poverty alleviation. One of these (pre)conditions is the need to assess and strengthen governance. In addition to issues such as revenue sharing and corruption, specified governance criteria include (at the macro level): the quality of the rule of law; the government’s respect for labour standards and human rights, as indicated by its ratification of and adherence to international human rights treaties; and recognition of and willingness to protect the internationally guaranteed rights of indigenous peoples.

While some improvements in Bank practice are proposed in the Management Response to the EIR (MR), in many and important respects, the Management Response (MR) clearly fails to ensure that the right conditions will be in place. The MR:

(i) rejects essential conditions entirely and fails to address institutional deficiencies in the Bank itself;

(ii) defers taking decisions or making commitments on a wide range of conditions (such as human rights);

(iii) ignores key conditions, such as a borrower’s recognition of and willingness to protect indigenous peoples’ rights, and,

(iv) accepts some conditions in principle without committing to measures that would ensure that the conditions will be realized in a participatory and accountable way and without providing assurances that they will be enforceable.

The result is that the right conditions for supporting extractive industry projects will not be in place and it is highly unlikely that poverty alleviation through sustainable development – the WBG’s mandate – will be achieved. To the contrary, poverty exacerbation, increased corruption, greater environmental degradation and violations of rights will be the result. For these reasons alone the MR is seriously flawed.

EIR Recommendation and Management Response: The EIR clearly recommends that the Bank should not fund projects unless indigenous peoples’ free, prior and informed consent (FPIC) has been obtained. This is consistent with a large body of jurisprudence and international practice that holds that FPIC is the accepted and most effective standard that applies to activities affecting indigenous peoples and their territories, particularly in the context of extractive industries. It is also consistent with the recommendations of the UN Permanent Forum on Indigenous Issues – a high level UN body comprised of both indigenous people and governments – that the WBG “Continue to address issues currently outstanding, including Bank implementation of international customary laws and standards, in particular human rights instruments, full recognition of customary land and resource rights of indigenous peoples, recognition of the right of free, prior informed consent of indigenous peoples regarding development projects that affect them, and prohibition of the involuntary resettlement of indigenous peoples.” [4]

Rather than employ the internationally accepted standard, the MR provides for “free, prior and informed consultation” resulting in informed participation that leads to “broad community acceptance” of the project. The MR adds that the “Bank Group will only support extractive industry projects that have the broad support of affected communities (including Indigenous Peoples communities).” [5] This point is repeated in the Annex, which says that “Discussions with communities should provide meaningful consultation and result in informed participation; [and] The Bank Group will support only those extractive industry projects that have the broad support of affected communities. … Our Indigenous Peoples policy is being revised to reflect this principle….” [6]

What the draft OP says: The only language in the draft OP that could be construed to be consistent with the above statements in the MR is in paragraph 15 (‘Disclosure and Bank Review’), which reads: “Throughout this review, the Bank pays particular attention to the record and outcomes of consultations with the affected Indigenous Peoples and the social assessment as a basis for determining whether the Bank proceeds with project processing. In making this determination, the Bank also pays particular attention to the degree to which Indigenous Peoples support the project.”

With regard to commercial exploitation of natural resources in indigenous peoples’ territories, paragraph 18 of the OP merely requires that “the borrower ensures that as part of the consultation process these indigenous peoples are informed of (a) their rights to such resources under statutory and customary law; (b) the scope and nature of such proposed commercial development and the parties involved or interested in such development; and (c) the potential effects of such development on their livelihoods, environments, and use of natural resources.” Indigenous peoples should also share equitably in the benefits in a culturally appropriate manner and the “benefits, compensation and rights to due process are at least equivalent to what any landowner would be entitled to in the case of commercial development on their land.”

Comments: In contemporary international law, indigenous peoples have the right to participate in decision-making and to give and withhold their consent to activities affecting their traditional lands, territories and resources. Consent must be freely given (pursuant to indigenous peoples’ customary decision-making processes,) obtained prior to authorization of and implementation of activities and be founded upon an understanding of the full range of issues implicated by the activity or decision in question: hence the formulation free, prior and informed consent. These customary decision-making processes are not about individual person’s consent or veto over development, rather they constitute culturally appropriate and collective decision-making which enhances indigenous peoples’ self-development.

The WBG must reflect this in OP 4.10 on Indigenous Peoples. Whether the language in the Management Response - “broad acceptance” or “broad support” – could amount to the norm of FPIC as applicable to indigenous peoples is dependent on how it is interpreted and operationalized, whether this accounts for indigenous peoples’ customary decision making processes AND an express statement that our decisions will determine whether to proceed with the project.

The language in the OP does not presently allow for such an interpretation insofar as it requires only that, in addition to the outcome of consultation processes and social assessment, the Bank “also pays particular attention to the degree to which Indigenous Peoples support the project.” This grants a large amount of discretion to Bank staff processing projects and past experience with Bank policies on indigenous peoples has shown that the phrase ‘pays particular attention’ does not amount to much in practice. It also demonstrates that the degree to which indigenous peoples support the proposed project is just one of a number of factors to be assessed in determining whether to proceed. Therefore, indigenous peoples are not provided a decisive voice and any real influence in the process. This is clearly inadequate in terms of addressing the EIR recommendations – and the recommendations of many others – and does not provide adequate safeguards and an assurance of development effectiveness. The MR itself acknowledges that “Projects that are accepted by communities are going to be more effective both for communities and for developers.”

The consultations conducted in Bank projects are for the most part conducted by the borrower or client, the entities that often have the most interest in project approval. Further, that so much discretion is granted to Bank staff is cause for great concern given that the WBG’s own performance evaluations have found that indigenous peoples’ participation in WBG projects is typically “low;” [7] and that only 38 percent of a sample of WBG projects which applied the safeguard policy on indigenous peoples satisfactorily mitigated adverse impacts and ensured benefits. [8] The same review also found that “Project results for [indigenous peoples’] were not as satisfactory in the energy and mining, transportation, and environment sectors…. The majority of these projects neither mitigated adverse effects on [indigenous peoples] nor ensured that they received an equitable share of benefits.” [9] Additionally, the WBG’s internal review of performance in EI projects found that only “Three out of seven projects for which the indigenous peoples policy applied met the requirement for preparation of an Indigenous Peoples Development Plan (IPDP).” [10]

The MR’s misappropriation and manipulation of FPIC as free, prior and informed consultation is unacceptable and lacks any basis in international law. In principle, the same is also the case for applying a ‘broad community acceptance/support’ standard to indigenous peoples, as opposed to FPIC, because this undermines indigenous peoples’ internationally guaranteed right to consent to activities that affect them and equates indigenous peoples and their rights to those of any local community. In effect, this negates indigenous peoples’ self-determining status and rights by casting indigenous peoples as nothing more than a sub-set of local communities.

That FPIC is both appropriate and necessary is clear from the WBG’s own internal evaluation of OD 4.20, which observes that mining and energy projects “risk and endanger the lives, assets, and livelihoods of [indigenous peoples]. Moreover, modern technology allows interventions in hitherto remote areas, causing significant displacement and irreparable damage to IP land and assets. In this context, IP living on these remote and resource rich lands are particularly vulnerable, because of their weaker bargaining capacity, and because their customary rights are not recognized in several countries.” [11] WBG internal evaluations and indigenous peoples’ testimony to the EIR and elsewhere also demonstrate that the so-called safeguard policies provide little or no protection for indigenous peoples’ rights and interests. The result is increased poverty, destruction of our territories, economies and cultures, and deterioration of indigenous peoples’ health and well being. We are also often persecuted for opposing these activities.

Finally, the MR ignores entirely the EIR recommendation stating that it is “necessary to include covenants in project agreements that provide for multiparty negotiated and enforceable agreements that govern various project activities, should indigenous peoples and local communities consent to the project.” [12]

EIR Recommendation: IFC and MIGA should engage in consent processes leading to free prior and informed consent before resettlement takes place and “[r]esettlement should only be allowed if the indigenous community has given free and prior informed consent, there are guarantees of a right to return once the reason for resettlement ceases to exist, and subsequent to agreement on resettlement benefits.”

Management Response: Apart from acknowledging that community acceptance is fundamental to development effectiveness, the MR is substantially inadequate. For indigenous peoples, FPIC has been determined to be the only acceptable standard in relation to resettlement by numerous international human rights bodies and development agencies. The MR, however, states that: “Discussions with communities should provide free, prior and informed consultation. From these actions, the WBG should be able to determine whether the communities support the project. The WBG will commit to taking the community’s views on the project into account in determining whether to proceed with project processing.” [13] As with FPIC in general, because the WBG will only commit to taking indigenous peoples’ view “into account,” the MR does not provide indigenous peoples a decisive voice in relation to involuntary resettlement.

The OP is also substantially incompatible with indigenous peoples’ internationally guaranteed rights. Paragraph 20 provides that

In exceptional circumstances, when it is not feasible to avoid such relocation, the borrower prepares, in consultation with the affected Indigenous Peoples, a resettlement plan compatible with the Indigenous Peoples cultural preferences, including a land-based resettlement strategy. Prior to project appraisal, the Bank satisfies itself, in direct consultation with the affected Indigenous Peoples, that the borrower (a) has explored all viable alternative project designs to avoid physical relocation of these groups; and (b) has developed a resettlement plan in consultation with them and compatible with Indigenous Peoples cultural preferences, in accordance with the requirements of OP 4.12, Involuntary Resettlement.

OP 4.12, paragraph 9, goes further stating that indigenous peoples may be forcibly relocated even though experience has shown that this “may have significant adverse impacts on their identity and cultural survival.” Again, this contravenes a range of internationally guaranteed rights.

Recommendation: Both IBRD and IFC should, in the first place, formally meet with indigenous peoples’ freely chosen representatives to discuss what changes are required to OP 4.10 and what measures are needed in relation to IFC safeguards, to ensure that FPIC is appropriately operationalized in a manner consistent with indigenous peoples’ rights and especially with regard “to development projects that affect them, and prohibition of the involuntary resettlement….” [14]

In this context and contrary to the statement included in the Management Response, we emphasize that the legal roundtable recommended by the EIR and committed to by Bank management has not been held. Indigenous peoples informed Bank management before, during and after the May 2004 meeting with Bank lawyers that this meeting was not the legal roundtable and that such a (jointly organized) meeting was still expected. Finally, the Board of WBG should commit to institutionalization and operationalization of FPIC in WBG policies and practice and instruct WBG management to ensure that this right is incorporated in OP 4.10 with the full participation of indigenous peoples and their freely chosen representatives.

The Management Response (MR) claims that indigenous peoples have been extensively consulted, including through “a meeting in May, 2004 of representatives of the international indigenous community and the WBG’s legal staff, as called for in the EIR report.”

These statements however ignore the fact that the policy is inconsistent with international human rights standards pertaining to indigenous peoples – this is the most appropriate measure of ‘best practice’ and ‘leadership in protecting indigenous peoples’ rights’ – indigenous peoples have rejected the proposed policy, stated that consultation and participation in formulating the policy have been substantially deficient and rejected the contention that the May 2004 meeting was the ‘legal roundtable’ recommended by the EIR, committed to by senior WBG management and previously proposed by indigenous peoples. Indeed, at the May 2004 meeting, fifty percent of the meeting was consumed by an argument about whether the meeting was the ‘legal roundtable’. Indigenous peoples insisted that it was not and Bank staff agreed to record our views on this point. This meeting in general was deemed insufficient by indigenous peoples because:

· Invitations were sent just a few weeks before the proposed meeting, with no possibility for indigenous participation in planning the event.

· No documents were distributed ahead of time. An advance copy of the indigenous peoples policy was given to participants the day before the event and then only in English.

· The invitation was given too late to arrange for travel for many participants.

· Participation was limited to persons at the United Nations Permanent Forum on Indigenous issues, who were in New York for other purposes, and not properly prepared for this level of legal exchange.

· Participants were told at the meeting (Wednesday, May 19th) that they could submit comments on the policy by that Thursday, the 20^th, at 12:00 pm - an impossible request to meet that led to only cursory comments being submitted.

Concerning the substance of draft OP 4.10, there is general consensus among indigenous peoples that it remains at odds with our internationally guaranteed rights and does not provide adequate and effective safeguards to ensure ‘no harm’ nor to ensure that indigenous peoples benefit in a culturally appropriate manner from Bank-funded projects. The MR however states that “The revised policy will also have a number of important provisions that are particularly relevant for EI, regarding recognition of land rights and ensuring that Indigenous Peoples benefit from EI projects that are carried out on their traditional lands.” [15] At least in its present form, it is extremely difficult to conclude that such measures are included in the draft OP (see, among others, OP 4.10, paras. 16-18, 20).

The MR further states that “The revised Indigenous Peoples policy is expected to incorporate provision for grievance procedures for projects involving Indigenous Peoples,” yet there is no mention of this in the present draft OP. [16]

The EIR recommended that “the WBG should not support extractive industry projects that affect indigenous peoples without prior recognition of and effective guarantees for indigenous peoples’ rights to own, control, and manage their lands, territories, and resources” and, “the WBG should promote only those ‘sector reforms’ that concomitantly recognize and guarantee indigenous peoples’ rights to lands, territories, and resources traditionally owned or otherwise occupied and used by them.” [17] In the respect, the WBG’s own internal review of its safeguard policy on indigenous peoples states that:

It is important to consider the customary rights of IP to land when determining adverse effects, especially where such land is not yet legally titled. This is important even in technical assistance projects that involve institutional and regulatory changes to facilitate increased investment in exploitation of natural resources. In such cases there may be need for [Indigenous Peoples Development Plans] that ensure adequate measures or regulatory frameworks are in place to protect legitimate IP interests, should such commercial exploitation materialize. [18]

The MR contains two references to this issue: 1) rights to lands and territories will be addressed in the OP [19] and; 2) “The revised Indigenous Peoples policy is expected to incorporate a provision to ensure that affected Indigenous Peoples communities received benefits compensation and rights to due process at least equivalent to what any land owner would be entitled to in the case of commercial development on their land.” [20]

On the first point, we are aware that O.P. 4.10 is currently under revision. We do stress, however, that the OP 4.10 in its present form, does not adequately address this issue and falls below international legal standards on indigenous peoples’ rights to land. Paragraph 17 of the draft OP provides

If the project involves (a) activities that are contingent on establishing legally recognized rights to land traditionally occupied or customarily used by Indigenous Peoples such as land titling projects, or (b) the acquisition of such lands, the [Indigenous Peoples Plan] sets forth an action plan for the legal recognition of such occupation and usage. Normally the action plan is undertaken prior to project implementation; however, in some cases, the action plan may need to be carried out concurrently with the project itself. Such legal recognition may take the form of:

(a) full legal recognition of existing customary land tenure systems of Indigenous Peoples; or

(b) conversion of customary usage rights to communal and/or individual ownership rights.

If neither option is possible under domestic law, the IPP includes measures for legal recognition of perpetual or long term, renewable custodial or use rights.

Whether this language requires prior recognition of indigenous peoples’ rights to lands, territories and resources in connection with extractive projects turns on whether the extractive project can be classified as (a) or (b) in the first paragraph and whether there is a procedure under domestic law that allows for such recognition. There is therefore not a clear statement in the OP that prior resolution of and guarantees for indigenous peoples’ rights to lands, territories and resources are required. Moreover, conversion of customary rights to individual ownership rights without the express free, prior and informed consent of the affected indigenous peoples is contrary to human rights law and indigenous peoples’ cultures and customs. Concerning the second point, it is very clear in international law that indigenous peoples’ rights to lands and resources are unique and protected for additional reasons than is accorded to non-indigenous property rights. Therefore, the phrase “at least equivalent to what any land owner would be entitled” seriously undermines indigenous peoples’ internationally guaranteed property rights.

Recommendation: The OP needs to clearly state that the WBG group will not finance extractive industry projects or promote sectoral reforms without prior resolution and recognition of, and demonstrably secure guarantees for, indigenous peoples’ rights to lands, territories and resources traditionally/customarily owned or otherwise occupied and used.

· develops a system-wide policy that integrates and mainstreams human rights into all areas of WBG policy and practice and ensures that its polices and operations are, at a minimum, consistent with its obligations, as a subject of international law, in relation to international human rights law;

· ensures that it does not undermine the ability of its member countries to faithfully fulfil their international obligations or facilitate or assist violation of those obligations. … At a minimum, the WBG should assess state obligations and ensure that its operations, including macro-level intervention such as structural adjustment, do not violate those obligations;

· systematically incorporates experienced, independent, and reputable third parties to verify the status of human rights in all relevant projects;

· establishes a central human rights unit, with regional counterparts, with a clear policy and a mandate for monitoring, verification, and transparent annual audits;

· particularly the International Finance Corporation and the Multilateral Investment Guarantee Agency, should assess the human rights records of companies, including their policies on human rights and indigenous peoples, and should ensure that funded projects are designed and implemented in a manner consistent with applicable international human rights standards. [21] Adoption of and demonstrated compliance with human rights principles should be a prerequisite for companies seeking IFC and MIGA support for extractive industries; and,

· ideally, should adopt a rights-based approach to development and ensure that its support for projects is directed toward fulfilling internationally guaranteed human rights, and, in particular, it should address power imbalances that affect the full exercise and enjoyment of all human rights by the poor and most vulnerable. [22]

Management Response: The MR does not deviate from the standard WBG position that it is contributing to human rights through funding, among others, education and health projects, its safeguard policies and that it is engaged in a dialogue about human rights. It also lacks commitments to undertake any verifiable action with regard to human rights. Instead, ongoing discussions within the institution are highlighted, including a Board level discussion about “the whole issue of a ‘rights-based’ approach to development.” [23] However, adopting a rights-based approach to development is only one of the EIR’s recommendations on human rights and the least concrete of all of them. The MR thus distorts the overall thrust of the EIR recommendations as well as fails to respond to specific recommendations where there are measurable indicators of Bank (non-) compliance with the EIR.

The MR also ignores the Bank’s Compliance Advisor Ombudsman report on IFC and MIGA involvement with EI done for the EIR. [24] Observing that neither IFC nor MIGA systematically consider human rights and labour rights in relation to EI projects, the report stated that:

This is not to suggest that wider human rights concerns in individual countries should serve as a barrier to entry of IFC or MIGA (unless this is the stated policy of the World Bank group). Instead, IFC and MIGA should more systematically consider potential risks to human rights at the project level, take appropriate steps to mitigate them, and provide clear guidance to clients on both of these aspects. Where relevant, these aspects should be reported on at the project level. [25]

Another internal evaluation also recommended increased attention to human rights in the context of WBG safeguard and other policies, particularly where these policies lag behind industry best practice. [26]

Recommendation: EIR and many others have stated that the WBG needs to acknowledge that it has international legal obligations with respect to human rights and that these obligations need to be reflected in WBG policies and practice. The WBG can and should exceed the minimum level of obligation imposed on it by international law and take a proactive approach towards human rights, including disavowing its presently held position that it cannot address civil and political rights because of its Articles of Agreement. The Board should request a legal opinion from the Office of the General Counsel that sets forth the WBG’s obligations concerning human rights in light of contemporary international law. Additionally, the WBG needs to assess – as a matter of legal obligation – the obligations of its borrowers pursuant to ratified international human rights treaties – as required for environmental treaties under two Bank policies – and general international law, and ensure that its programmes and projects do not undermine those obligations. This will require at a minimum, some form of assessment of borrower obligations, possible impacts and the measures required to avoid negative impacts.

Compensatory offsets are required under the World Bank’s safeguard policy on Natural Habitats, OP 4.04, for projects that cause a significant conversion of natural habitat. Should this occur, borrowers are required to establish ‘off-sets’, such as national parks and other protected areas to compensate for habitat loss. Indigenous peoples and independent studies have shown that in some cases they are negatively affected by an extractive project and that their rights are further infringed on by the establishment of an off-set. The EIR therefore recommended that “Special attention must always be paid to ensuring that the rights of indigenous peoples to their lands, territories, and resources traditionally owned or otherwise occupied and used are respected when choosing and designing an offset.” [27]

The MR however fails to directly address this recommendation at all. [28] The only guidance on this issue is the general reference throughout the MR that the Bank is addressing indigenous peoples’ issues in OP 4.10. Paragraph 21 of the OP provides for “involuntary restrictions on the access of Indigenous Peoples to legally designated parks and protected areas” and, that “preference is given to collaborative arrangements” that allow indigenous peoples to continue to use resources in protected areas. Unless other provisions of the OP (see, para. 17, quoted above) are read broadly to require prior legal recognition of indigenous peoples’ rights to lands, territories and resources, pursuant to para. 21, indigenous peoples’ rights will not be protected in relation to offsets and indigenous peoples may be forcefully excluded from such areas (see, also, para. 7, OP 4.12, Involuntary Resettlement).

This section of the OP is incompatible with Decision VII/28 of the Conference of Parties to the Convention on Biological Diversity, a Decision that is legally binding for all states parties to the Convention. Pursuant to OP 4.01 on Environmental Assessment, the Bank is required to ensure that it projects do not violate the obligations of borrowers under ratified environmental treaties such as the CBD. Decision VII/28 “notes that the establishment, management and monitoring of protected areas should take place with the full and effective participation, and the full respect for the rights of, indigenous and local communities consistent with domestic law and applicable international obligations.” These international obligations, in most cases, include the rights of indigenous peoples to own and control their lands, territories and resources traditionally owned or otherwise occupied and used.

The Management Response fails to address the EIR recommendation and asserts that existing policy standards, which have proved to be inadequate, are sufficient.

EIR Recommendations: The EIR Report notes that submarine and riverine disposal of mining wastes has had a, sometimes severe, negative impact on indigenous peoples. Consequently, it “recommends that submarine and riverine tailings disposal not be used in areas such as coral reefs that have important ecological functions or cultural significance or in coastal waters used by indigenous peoples and local communities for subsistence purposes.”

Management Response: With regard to riverine tailings disposal, the MR states that “In practice, under its existing guidelines, the WBG has not for some time supported projects with riverine tailings disposal. The new Precious Metals Mining Guideline … will include a clear statement on this issue.” No indication about the nature of this ‘clear statement’ is given unless it may be inferred that the Bank will not support riverine disposal based on its stated prior practice.

Concerning submarine tailings disposal, the MR states that “The WBG would only support the use of STD after careful evaluation; however, it would not rule out STD where it is clearly the best option and is environmentally and socially acceptable.” How the Bank will determine if STD is socially acceptable and what happens if the affected people or community are opposed is not specified. Moreover, with regard to protection of coral reefs and coastal waters used for subsistence purposes, the MR simply falls back on existing safeguard policies and explains that these policies ensure that areas of cultural, ecological and subsistence significance SHOULD not be negatively affected: “Existing safeguard policies (in particular environmental assessment, natural habitats, and cultural property) ensure that ecological functions, cultural significance, and subsistence uses should not be jeopardized when STD is selected as the preferred disposal option.” This is clearly inadequate and unacceptable.

The EIR recommends that the Bank provide greater support for small-scale mining, giving preference to community-based mining over itinerant miners and always ensuring that indigenous peoples’ rights are respected. The MR states that: “Some of these issues have already been addressed in a guidance document on Mining and Indigenous Peoples; the guidance document will be used by task team leaders in designing projects. Explicit attention has been paid to issues of indigenous rights and small-scale mining.” [29] While some indigenous peoples are engaged in small-scale and artisanal mining, many others are negatively affected by small-scale mining. Therefore, addressing these issues in a ‘guidance document’ is inadequate and attention is required to developing mandatory standards, standards that must be developed with meaningful participation by indigenous peoples.

Management Response: As part of addressing governance issues, the MR states that “all future Country Assistance Strategies (CASs) for resource-rich countries will systematically address relevant EI issues.” [30] In this respect, the Bank must commit to indigenous peoples’ meaningful participation in CAS formulation and commit to immediate public disclosure of all CASs.

^{^[1]} Report of the Special Rapporteur on the situation of human rights and fundamental freedoms of indigenous people, Mr. Rodolfo Stavenhagen, submitted pursuant to Commission resolution 2001/57. UN Doc. E/CN.4/2002/97, at para. 56.

[2] Sakiko Fukuda-Parr, Prior consent of indigenous communities vital if developing nation projects are to succeed, The Financial Times, 7 May 2004.

[3] Letter of Dr. Emil Salim to J. Wolfensohn, President of the World Bank, 12 January 2004.

[4] Report of the Permanent Forum on Indigenous Issues on its Second Session. UN Doc. E/2003/43; E/C.19/2003/22, at para. 33.

[5] Para. 34. See, also, para. 24

[6] Annex, Part I, para. 13.

[7] Implementation of Operational Directive 4.20 on Indigenous Peoples: An independent desk review January 10, 2003, Country Evaluation and Regional Relations (OEDCR), OED Report No. 25332, World Bank: Washington, D.C. 2003.

[8] Implementation of Operational Directive 4.20 on Indigenous Peoples: An Evaluation of Results. OED Report No. 25754, 10 April 2003, World Bank: Washington DC, at 2.

[9] Id.

[10] Extractive Industries and Sustainable Development. An Evaluation of World Bank Group Experience. OED/OEG/OEU, World Bank: Washington DC, 2003, 15., at 43.

[11] Id. at 26.

[12] EIR Final Report, at 50.

[13] Annex, Part II, para. 8.

[14] Report of the Permanent Forum on Indigenous Issues on its Second Session. UN Doc. E/2003/43; E/C.19/2003/22, at para. 33.

[15] Striking a Better Balance – The World Bank Group and Extractive Industries: The Final Report of the Extractive Industries Review. Draft World Bank Group Management Response, 4 June 2004, at para. 40.

[16] Annex, Part I, para. 13. This paragraph also states that: “While it is better for grievances to be addressed locally and directly between investor and communities, IFC and MIGA have the CAO (Compliance and Ombudsman’s Office) as an independent ombudsman’s office to receive and try to resolve complaints; similarly, IBRD/IDA have the Inspection Panel.”

[17] Man. Resp. at 60.

[18] Implementation of Operational Directive 4.20 on Indigenous Peoples: An Evaluation of Results. OED Report No. 25754, 10 April 2003, World Bank: Washington DC, at 2.

[19] Among others, Annex Part III, para. 7.

[20] Annex, Part I, para. 13.

[21] A rights-based approach to development is one that explicitly ties development policies, objectives, projects and outputs to international human rights standards requiring, among others, that development be directed towards fulfilling human rights. Conversely, it is a proactive strategy for converting rights into development goals and standards. See, among others, A. Sen, Development As Freedom. (Knopf 1998) and; The Right to Development. Report of the Independent Expert on the Right to Development, Dr. Arjun Sengupta, pursuant to General Assembly resolution 54/175 and Commission on Human Rights resolution E/CN.4/RES/2000/5. UN Doc. E/CN.4/2000/WG.18/CRP.1, 11 September, para. 19.

[22] Id. at 59-60.

[23] Para. 36.

[24] Technically, the Bank responded to this review in a separate document, see, note 1 herein for the location of these other responses.

[25] Extracting Sustai