International Development Committee

Houses of Parliament

London

UK

MEMORANDUM TO THE INTERNATIONAL DEVELOPMENT COMMITTEE

By the Forest Peoples Programme

The Forest Peoples Programme is a specialist NGO set up to support the rights of forest-dwellers in forestry, conservation and development activities.

As part of its work on securing the rights of indigenous peoples in multilateral and bilateral development projects, in April 2003, the FPP co-organised an international workshop on Indigenous Peoples, Extractive Industries and the World Bank in Oxford as part of the focussed research commissioned by the World Bank’s Extractive Industries Review, which is coming to a close at the end of this year. The workshop drew on seven case studies prepared by indigenous communities affected by World Bank policies and projects in Colombia, Cameroon , India , Papua New Guinea , the Philippines , Russian Federation and Indonesia . Thirteen community representatives presented their own studies and experiences directly to the EIR Eminent Person in the workshop, which aimed to evaluate the impact of the World Bank’s involvement in the extractive industries on indigenous communities, and to assess whether the World Bank Group should continue its involvement in this sector. The results of the case studies and workshop have been compiled in the attached document ‘Extracting Promises: Indigenous Peoples, the Extractive Industries and the World Bank’.

The findings of this independent study show that World Bank Group loan operations for the extractives sector that affect indigenous lands have consistently failed to implement the Bank’s own weak safeguard policy framework – let alone international human rights standards. It further shows that the Bank routinely violates voluntary best practice standards – such as the OECD Guidelines for Multinational Enterprises. The systematic failure of the Bank to deal with social and environmental issues effectively means that indigenous peoples’ human rights are often violated and project-affected communities typically find themselves worse off as a result of Bank-assisted investments in the extractive sector.

The studies also show that much of the World Bank’s upstream policy work on extractive industries through Technical Assistance Loans and policy-based lending has lacked transparency and resulted in national policies that increase extractive pressure on indigenous lands against their wishes and to their detriment. [1] Indigenous peoples’ and other social organisations complain that these upstream technical interventions are largely unaccountable to rights holders and citizens within borrower countries as they are mainly undertaken by Bank staff and consultants with little or no public participation.

The workshop also highlighted that although the Bank’s loans for extractive investments risk causing serious adverse impacts on the rights and welfare of affected communities, this intergovernmental body still refuses to condition Bank funding on borrower countries’ adherence to those international human rights treaties they have already ratified. It has likewise refused to adopt standards to ensure that indigenous peoples should not be involuntarily removed from their lands to make way for development.

Given the weakness of its safeguards, its institutionalised opposition to invoking binding human rights standards, the way it routinely flouts its own procedures and the unaccountable nature of its upstream operations, the indigenous authors of the case studies concluded that the World Bank should not be involved in the Extractive Industries Sector. Many rights holders and social movements in developing countries support this conclusion. They oppose further engagement of the World Bank Group in the extractive sector unless or until it addresses in good faith outstanding public concerns on both fundamental global policy and standards issues, and on specific grievances linked to past and present Bank-assisted projects and programmes. [2]

Even though grassroots case studies, declarations of indigenous peoples’ organisations, statements by social movements and academic studies all challenge the arguments for further Bank support for extractive industries, the UK government in its recent submission to the Bank’s Extractive Industries Review: “‘encourage[s] the World Bank to … continue to engage with the extractives sector …’ [3] The UK government submission focuses on the potential benefits of Bank engagement with the extractive sector, while only brief mention is made regarding the serious negative impacts of extractive industry operations on “culture, health, livelihood and environment” (paras. 17 and 32).

Other than a restricted comment on rights in relation to small scale miners (paras 44 and 45), impacts on human rights are not discussed anywhere in the nine-page government submission. This shortcoming is surprising given that the UK government has publicly adopted a rights-based approach to development. [4]

In its submission to the EIR, DFID proposes that social and environmental issues in Bank-financed extractive operations should be dealt with through upstreaming of safeguard issues in Bank policies and programmes. It explicitly endorses what it describes as the World Bank’s “new framework” for safeguard policies, which proposes this “upstreaming” approach. However, at this time, such proposals for a new framework only form part of a pilot approach for dealing with safeguard issues. [5] This pilot approach, which remains the subject of public consultations, is currently causing serious concern among civil society organisations and NGOs that track Bank policies and projects.

These organisations argue that the proposed new framework risks undermining the accountability of the World Bank as social and environmental concerns are “upstreamed to nowhere”, while project-related standards are diluted, made optional or eliminated altogether. [6] In other words, there is no consensus on this controversial pilot approach to safeguard issues and there are serious doubts about its capacity to improve social and environmental performance and make the Bank more accountable. DFID has been informed on numerous occasions of civil society concerns about safeguard issues and on the need to maintain binding operational standards in Bank social and environmental policies. It is therefore disturbing to note that these concerns are not clearly acknowledged by the UK government.

The UK government’s assertion in its submission to the EIR that: “the World Bank Group is well-positioned to as a broker between the private sector, NGOs, civil society, governments and other development agencies” (para 22) is also seriously problematic. Most grassroots organisations and social movements in the South do not trust the Bank as an honest broker. This general lack of trust in the World Bank is precisely why external rights holders and campaigners had called for an independent review of the extractives sector in the first place.

These serious shortcomings in the position taken and recommendations made by the UK government to the EIR raise several questions.

Questions to Secretary of State:

·       Did DFID consult with rights holders and poor people about their priorities and recommendations regarding future World Bank engagement with the extractives sector? How are the views and priorities of these rights holders and citizens taken into account in DFID’s advice to the EIR?

·       Does the new Secretary of State for International Development find that the position adopted by DFID is based on clear evidence that the Bank’s previous support for extractive industries has actually helped reduce poverty? Can the Department point to specific examples where this is demonstrably the case?

·       In accordance with its rights-based approach for development and in view of the tragic record of human rights violations in extractive industry investments, will the UK government recommend that the World Bank Group must require Borrower’s and clients’ adherence to international human rights standards?

·       In relation to indigenous peoples, will the UK government support the draft recommendation of the EIR report that the Bank should not fund extractive investments until its Operational Policy on Indigenous Peoples is revised in a manner acceptable to indigenous peoples themselves? [7]