May 8, 2001 Memo to Mr. Ian Johnson

 

To: Ian Johnson, Maninder Gill, Paatii Ofosu-Amaah, World Bank
Tom Griffiths, Forest Peoples Programme (FPP)
From: Dana Clark, Center for International Environmental Law (CIEL)
Subject: Talking Points for Conference Call
Date: May 8, 2001

Below please find the talking points for CIEL's and FPP's participation in the conference call on April 26, 2001. I have presented the first nine points largely in the order they were discussed, though the analysis in this written version is provided in more depth, with the hope that it will help to clarify our concerns and identify ways to remedy the problems.

(1) Direct/Indirect Impacts. The March 6 draft introduces new language under the heading "Impacts Covered", stating that hereafter the Bank will only be responsible for the "direct" economic and social impacts of projects. Despite requests from Board members, the policy fails to define either "direct" or "indirect." More significantly, though, this change is fundamentally inconsistent with the Bank's responsibility for ensuring that projects are designed that are economically sound. This change in language will allow the externalization of significant costs to local affected communities, thereby increasing their risk of impoverishment.

Consider, for example, the situation where a family living beside a river is displaced not by the construction of the dam or the filling of the reservoir, but rather because the species of fish upon which the family depended for its livelihood and protein supply no longer occur in the river. According to Bank staff, in the matrix of comments responding to Board members, this situation would be considered an indirect impact of the project and would not be compensated by the Bank. These and other "indirect" economic impacts, both the obvious and the unexpected, would be forced upon the local people.

By allowing project planners to externalize these costs, the change will result in flawed economic and social decision-making, which will in turn allow flawed projects to proceed. This will perpetuate the Bank's legacy of failed displacement, and will also result in increased social tension and local resistance. This change in language cannot be argued to be part of a "reformatting" or "conversion"; it represents a significant policy change with serious negative impacts on the poor. Solution: delete the word "direct" from para. 3 and para 6(a)(iii); delete footnote 4.

(2) Voluntary/Involuntary Resettlement. The draft attempts to "clarify" that it only covers "involuntary" (and not voluntary) resettlement. Voluntary resettlement is a growing category of projects financed by the World Bank, and yet it is completely lacks any procedural or substantive policy requirements. Despite requests from Board members and the public, Management has refused to define "voluntary" resettlement. By failing to provide even minimum policy guidance on voluntary resettlement, the draft introduces a perverse incentive for project planners to characterize projects as voluntary and thereby avoid ALL policy requirements.

The danger of this approach was illustrated in the China Western Poverty Reduction Project, where poverty alleviation through 'voluntary' resettlement was the stated objective of the project, but the Voluntary Settlement Implementation Plan was never released to the public. That project also involved very problematic social assessments with respect to those who were going to be displaced by the voluntary settlers, in part because project planners incorrectly assumed that those being involuntarily displaced were "beneficiaries" of the project.

Solution: To address this perverse incentive, the draft policy should provide minimum standards for Bank-financed projects that involve voluntary resettlement, including the following:

(a) define "voluntary" resettlement;
(b) define the standards that World Bank staff must apply to determine whether or not a resettlement program is truly voluntary;
(c) establish that voluntary resettlers are entitled to development benefits and that their standard of living should be improved;
(d) provide rights of participation and consultation for voluntary resettlers in the design and implementation of projects and plans that affect their lives;
(e) include provisions to evaluate the impact of voluntary resettlers on host populations and their environment;
(f) provide standards for Bank supervision and monitoring throughout project implementation;
(g) require the public release of documents relating to voluntary resettlement, including the resettlement instrument, to affected populations (in a language and manner that is understandable to them) and in the World Bank InfoShop prior to appraisal.

Added Benefit: Such a minimum framework of rights for voluntary resettlement would provide an important first step towards moving away from the conflict-ridden model of forcible eviction and towards a model of negotiated settlements with local communities.

(3) Introduction of several changes which significantly undermine the procedural and substantive rights of people who lack nationally recognized rights to resources, including both land and natural resources. First, the OP introduces a new framework for dealing with people who lose access to resources as a result of the designation of parks and protected areas. The changes in the policy serve to create lesser procedural and substantive rights for these parks-affected people. The policy again lacks clarity because it fails to define crucial terminology and does not provide guidance for project planners in terms of a process framework, which is the new resettlement instrument introduced for parks people.

(a) Paragraph 7. The reference to consultation of people affected by parks and protected areas during implementation is flawed. They must be allowed to participate in the design and appraisal stage. In addition, given that the communities affected by parks and protected areas are in many cases indigenous/tribal populations, special care must be taken in the policy to define the participation and consultation process to ensure that project planners respond to the concerns of affected communities, understand their vulnerabilities, take their views into account in the design of the project, provide information in a culturally appropriate language/medium, and include a system of prior informed consent. The process framework should describe the stages of participation and consultation and the requirement that project design be modified in accordance with the preferences and concerns of the affected communities. Solution: Modify para. 7 to describe the procedural and substantive protections for people affected by the designation of parks and protected areas. Substitute "effective participation" for the word "consultation"; change "during project implementation" to "during project appraisal, preparation, and implementation"; replace "acceptable to the Bank" with "acceptable to the affected communities." This paragraph would also be strengthened by adding a paragraph or footnote that says that the framework must also "ensure that the project is consistent with OD 4.20, Indigenous Peoples, and other international standards relating to indigenous peoples and protected areas." See next point also.

(b) Process Framework Missing from Annex. The draft resettlement policy introduces four new "resettlement instruments," but guidance is given in the Annex only for three of them. The exclusion of guidance for a process framework continues the trend of discriminating against people affected by parks and protected areas. Solution: include a comprehensive and clear description of the process framework in the Annex so that the participation and consultation rights are more clearly defined, and the risks are adequately identified, avoided, and mitigated.
(c) Footnote 14. Footnote 14, combined with paragraph 7, creates a new procedural checklist approach, not found in the OD, that will allow the borrower to exclude from compensation "persons engaged in the illegal use of natural resources." This pejorative term is not defined. This change is one of many that reverses the OD's recognition of the vulnerability of those who don't have nationally recognized claim to their lands or resources. Many forest-dwelling, rural-based, tribal and indigenous communities lack formal recognition not only of their traditional land rights but also of their customary use of natural resources such as forests and fisheries. This is new language; it is a substantive policy change; and it carries a significant risk of under-payment of compensation and the externalization of project costs to vulnerable populations. Solution: Just delete the footnote. If the footnote is retained, the terms must be defined and there must be greater recognition/protection of traditional and customary rights. (The language in the footnote which purports to recognize those rights is inadequate and vague.)

(4) The policy also introduces new changes that re-define categories of eligibility based on whether people have a nationally-recognized claim to their land, and then provides weaker rights for those who are not covered under national land compensation legislation. Paragraphs 14 and 15 together serve to undermine the protections of people who lack a nationally recognized claim to title to their lands. For instance, Paragraph 15 says that the rights of paragraph 6, relating to resettlement planning, only apply to those with a claim to title. Resettlement assistance, a newly introduced term which applies to the compensation payable to those who lack nationally recognized title, is not defined. Solution: Ensure that all of the participation and consultation and substantive rights enshrined in paragraph 6 are also applied to those who lack title under 14(c); clearly define resettlement assistance, and provide examples of what that can include (land, etc.).

(5) Improvement v. Restoration. The Bank has missed an important opportunity to truly clarify the objectives of the policy. Commenters from all across the spectrum - implementing agencies, OED, anthropologists, NGOs - argued in the 1999 comment period that the Bank should abandon the language/objective of restoration and instead clearly embrace "improvement" of displaced persons livelihoods and standards of living. Ample experience has shown that a target of restoration results in stagnation and impoverishment. In discussions, Bank management has indicated that the objective of the policy is, in fact, improvement in the quality of life of affected communities. If that is so, then the language must be strengthened to make this unequivocally clear. Instead, the draft OP goes the opposite direction by deleting important clarifying language that had been found in the OD.

Solution: The language about "improvement" of standards of living now found in the last sentence of paragraph 2(c) of the draft OP must be clarified. It should, for instance, be moved to the very first paragraph of the policy objectives, and edited as suggested below. The suggested text reincorporates some language from the existing OD that was dropped from the draft OP (in bold); and also draws from a 1999 World Bank publication on involuntary resettlement entitled Risks and Reconstruction.

Suggestion: "The objective of the Bank's resettlement policy is to ensure that the population displaced by a project receives benefits from it. The primary objective of any involuntary resettlement process is to improve the standards of living and livelihoods of resettlers. Involuntary resettlement must be carefully designed to prevent impoverishment."

(6) Indigenous Peoples. Footnote 15. New language has been introduced in the draft policy that has serious negative effects on indigenous peoples and which brings the Bank into conflict with emerging international standards regarding indigenous peoples. Although the drafters may have intended to provide recognition of the dilemma of displacing indigenous peoples, the footnote requires nothing more than what the policy already requires (avoidance and striving for land-based alternatives) and is permissive of the opposite (i.e. eviction even when cultural survival is threatened and even if a land-based alternative is not offered). The policy should acknowledge that displacement of indigenous peoples without their prior informed consent may contravene international conventions and national law. Solution: (a) delete the footnote, and (b) introduce language that more effectively calls on project planners to respect the rights of indigenous communities, to recognize the significance of their links to the land and the dangers associated with involuntary resettlement, and to be cognizant of emerging principles of both national and international law which may argue against their involuntary displacement. Suggestion: The World Bank should consider incorporating the following language, utilized in the Inter-American Development Bank's 1998 resettlement policy, OP 710:

Indigenous Communities. Those indigenous and other low income ethnic minority communities whose identity is based on the territory they have traditionally occupied are particularly vulnerable to the disruptive and impoverishing effects of resettlement. They often lack formal property rights to the areas on which they depend for their subsistence, and find themselves at a disadvantage in pressing their claims for compensation and rehabilitation. The Bank will, therefore, only support operations that involve the displacement of indigenous communities or other low income ethnic minority communities, if the Bank can ascertain that: (i) the resettlement component will result in direct benefits to the affected community relative to their prior situation; (ii) customary rights will be fully recognized and fairly compensated; (iii) compensation options will include land-based resettlement; and (iv) the people affected have given their informed consent to the resettlement and compensation measures.

(7) Deletion of recognition of vulnerability of people who lack nationally recognized title to their land. Compare OD para. 16 with OP para. 8. There is no justification for removing the fundamental recognition of vulnerability of those who lack nationally recognized title to their land. Solution: restore the language from OD para. 16 recognizing the vulnerability of people who lack nationally recognized title to their land; modify OP para. 8 accordingly.

(8) The OED comments in June 1998 noted that the draft policy was "biased in favor of planning instead of results." This flaw continues today, as the policy has virtually no linkage between project planning and evaluation of results on the ground. Most plans are not perfect, and will need adjustment to respond to changing circumstances or new data. Even a well-drafted resettlement plan can lead to imperfect implementation, a fact which must be acknowledged by requiring Bank staff to evaluate the effectiveness of compliance with the objectives of the policy, as measured by development outcomes. This policy is crucial to the Bank's mandate of poverty alleviation, and the past history of compliance failure indicates a real need for greater gathering of data and information, and for heightened attention to the results on the ground. OP paragraph 23 and BP paragraph 16 are both extremely problematic because they link supervision only to the borrower's assessment of the objectives of the resettlement instrument (rather than the resettlement policy). The instrument is just a tool; the policy provides the objectives, and it is compliance with the policy that must be determined by the Bank.

Solution: In addition to the existing language about the borrower's responsibility, language should be included in OP para. 23 and BP para. 16 that requires the Bank to assess whether the development objectives of the resettlement policy have been accomplished, in consultation with affected people. The language in BP para. 16 that appeared in the July draft but was deleted in the March draft should be restored, requiring the Bank "to evaluate (a) the extent of the displacement; (b) the impact of the project on the livelihoods and on the standards of living of those displaced and of any host communities; and (c) the achievement of the development objectives of the relevant resettlement instrument."

Other adjustments should also be made throughout the policy to make a stronger link to implementation and results, not just plans. For instance, paragraph 6(c) should be modified as follows:

"Where necessary to achieve the objectives of the policy, the resettlement plan or resettlement policy framework also include measures to ensure that displaced persons are (i.) offered support after displacement, for a transition period, based on a reasonable estimate of the time needed to restore their livelihood and standard of living. The accuracy of this estimate of time needed for transition assistance should be reviewed during project supervision so that the time period can be adjusted if necessary. [NOTE: this language may fit more appropriately in the BP, but the point is that there must be some evaluation of the accuracy of this particular estimate] Such transition support could take the form of short-term jobs, subsistence support, salary maintenance or similar arrangements; the appropriate mix should be determined in consultation with project affected people; and" . . .

Another example of the need for a closer link to implementation is in footnote 11, which notes that "For losses that cannot easily be valued or compensated in monetary terms. . .attempts are made to establish access to equivalent and culturally acceptable resources and earning opportunities." (emphasis added) And what if those attempts are unsuccessful? The policy should clarify, first of all, that such losses must be fully and accurately assessed in the planning stage, and that the difficulty of providing appropriate compensation should be factored into the initial decision about whether to proceed with the project at all. (See IDB OP-710). In addition, there must be provision that requires Bank staff to (a) evaluate the success of these "attempts" and (b) ensure that if these attempts are not successful, then some other method of compensation must be developed to compensate these people for their losses in a culturally appropriate manner.

(9) Additional points discussed included the need for greater emphasis on access to information, access to the policy by affected communities, and the need for translation into local languages. We also discussed the need to improve borrower capacity and ownership and for the Bank to provide additional technical assistance and financial support to borrowers. It would be very helpful if progress on these issues, and especially the question of borrower capacity and ownership, can be more fully reflected in the next draft.

(10) A Message About Diminishing the Rights of those Lacking Title: In February 2001, in Singrauli, India, a man from a village I had visited in 1996 explained what had happened since my last visit. For years, several communities in Rihand and Vindhyachal had been resisting unjust resettlement; in 1999 those people were finally evicted to make way for ever-expanding pollution dumps, in the form of ash dikes, massive grey fields of toxic slurry. Ram Lakhan Yadav reported that his old village, Churchuria, "is not on the map anymore. There are gates now, and we're not allowed to go there." The people from Churchuria have scattered across the landscape in search of land and jobs. He complained that people who moved out are not being taken into job opportunities on the ash dike. They are told by the project authorities, "For you people, there is no work." I asked if his standard of living had been restored. He said "No, our standard of living is not restored. It will take about 20 years to reach the level we were at before."

We discussed the World Bank's resettlement policy, which requires that displaced persons have their standard of living improved, or at least restored. I also explained to him briefly about the current developments at the World Bank, and that it was in the process of revising the resettlement policy. At the end of our conversation, I asked him what he would say to the World Bank, if he had a chance. This was his response:

"We would like to raise the issue of the treatment meted out to landless people. We were not truly landless people. The land records were not accurate. We should have been counted as having land. We had a house, lived in the village and had a livelihood from the land. Those people from the revenue department, the tradition was that they would stay in the houses of the well-to-do. It was up to the head of the village whom to include and whom not. Common practice was that the poor were left out. There is a record of our houses being there even since 1960. To change the resettlement policy to exclude people without land records is a wrong step because it is very common for people to be excluded."

(11) Next Steps. Ian Johnson indicated that many of the points that we raised had merit, and that the policy would be revised to take some of these concerns into account. Once the policy is revised, it will be sent back to CODE for further discussion. It would be very helpful if a notification to this effect could be posted on the WB resettlement website. It would also be extremely constructive if the next draft were posted on the resettlement website for review and comment by a broad range of concerned people.

(12) Broadening the Discussion. We feel that it is important to address the very obvious pressure to move this policy through for approval, and the frustration that we all feel with the process. While we are fully aware of the amount of time and resources that have gone into this policy revision process over the years, we are also concerned that there be a commitment to getting it done right instead of just getting it finished. Millions of peoples' lives will be affected by the decisions that are made. Millions of other people have already suffered lost livelihoods and lost homelands, their cultures impoverished. The stakes are high, for those people and for the credibility of the Bank's commitment to poverty alleviation.

The March draft contains several changes that would worsen past implementation problems, or which seek to codify failed practice. Maninder and Mr. Ofosu-Amaah both stated that some of these changes reflected the Bank's practice over the years, for example with direct/indirect resettlement. In situations where the Bank is disallowing compensation for indirect impacts, that will in fact translate into the externalization of costs to local communities, social tension, unjust compensation and impoverishment. This "practice" argument should actually argue against the change that is being proposed. It certainly should not justify the codification and endorsement of a bad practice.

One other aspect of this debate which is frustrating is that ultimately it constitutes a very narrow and shortsighted exercise. The Bank claims to be "reformatting" the policy, so that what comes out on the other end will basically be equivalent to the 1990 standards. The related problems are that what is coming out (a) is weaker than existing policy, and (b) fails to reflect lessons learned over the past eleven years, or emerging international standards. The resettlement policy has been the subject of a very severe implementation crisis. If the Bank fails to address this legacy, and puts blinders on emerging standards, then the end result will be a policy that is mired in the past, stagnating rather than responding to challenges and opportunities. We would welcome an opportunity to shift the dialogue to a more constructive mode, towards improving implementation and development effectiveness, learning from and dealing with the challenges of the past.

The OED in a report dated March 23, 2001 recommended that "the policy framework should be modernized and adapted to the changing practices and instruments being used by the Bank and take account of recent experience." It also recommended that Bank should strengthen accountability for compliance. The report was referring to environmental safeguard policies, but those recommendations are equally applicable to the Involuntary Resettlement and Indigenous Peoples policies.

Thank you for your time and attention.
Dana Clark

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Dana Clark, Consultant for the Center for International Environmental Law

Internet: http://www.ciel.org