World Bank Resettlement: The Legacy of Failure, Prague 2000 Issue Briefings

 

August 2001

Projects financed by the World Bank, such as dams, power plants, and other infrastructure projects, have forcibly displaced millions of people. Involuntary resettlement often leads to increased marginalization of local communities. In addition to losing their homelands and cultural resources, local communities suffer from lost economic opportunities as businesses lose their customer base, productive farmland is destroyed, and other forms of livelihood are dismantled. The social fabric of these communities is torn apart. The impoverishment of those who suffer development-induced displacement is in direct contradiction with the World Bank's mandate of poverty alleviation and sustainable development.

World Bank projects currently under implementation are displacing 3.2 million people, and tens of millions more have had their lives and livelihoods devastated by past projects. These people have, for the most part, been forced to abandon their homes and their livelihoods without adequate compensation or rehabilitation. The existing World Bank policy on Resettlement, OD 4.30, in principle offers broad protections for affected people. In practice, however, the Bank's history of compliance with this policy is marked by failure. Internal reviews, external critiques, and the findings of the independent Inspection Panel have concluded that the Bank has consistently failed to ensure that displaced populations receive benefits from Bank-financed projects and have their standard of living improved, or at least restored, as is required by Bank policy.

A recent example illustrates the ongoing lack of respect for local communities at the World Bank. The notorious China Western Poverty Reduction project would have involved both voluntary and involuntary resettlement - approximately 58,000 Chinese farmers would have been "voluntarily" shifted into Tibetan and Mongolian territories, displacing approximately 10,000 people.(1) Although the Bank claimed that the project was simply about poverty reduction for the voluntary settlers, it refused to publicly release the Voluntary Settlement Implementation Plan. The Involuntary Resettlement Plan, which was prepared and released only after the public controversy erupted, was a five-page document, completely lacking in substance. The Inspection Panel confirmed that the Bank had violated all of the Bank's most important social and environmental policies in the design of this project, including the resettlement policy. Despite these devastating findings, Bank Management struck a deal with China and insisted on proceeding. On July 7, 2000, the Board of Executive Directors, in a highly unusual move, rejected Management's recommendation, and China then pulled the project.

The World Bank is now engaged in a process of re-writing its resettlement policy. This process has been ongoing for quite some time, and there has been some opportunity for public comment. However, there is widespread concern that the Bank's revision process has failed to improve protections for local people and has missed opportunities for addressing the compliance failures. Instead, there is a significant danger that the Bank will backslide on the policy by introducing changes that will further undermine the rights of project-affected people.

NGOs are Calling on the World Bank to take the following steps:

• Introduce a moratorium on new projects involving resettlement unless and until the Bank can demonstrate it is capable of meeting the terms of its policy.
  
• Take leadership on the issue of development-induced displacement, and develop a world-class policy that respects the rights and interests of locally affected people. Improve, rather than weaken, the World Bank resettlement policy, through a consultative, participatory process.
  
• Incorporate lessons from past failures into the current policy revision process.
  
• Provide equal policy protection for voluntary and involuntary resettlement.
  
• Avoid backsliding and falling behind global standards. In particular, the policy revision should incorporate the following emerging principles:

  1. Improvement of livelihoods. The policy must call for the improvement in the quality of life of project-affected people in order to shift resettlement practice away from impoverishment and towards development.
     
  2. Prior informed consent. The World Bank should avoid all projects that involve forcible displacement, and move instead to a model of negotiated settlements and prior informed consent of local communities. The right of prior informed consent necessarily includes the right to reject projects unless they meet community interests. Greater involvement of affected communities will result in better-designed projects, which will have a greater chance of success.
     
     

• Provide reparations for past harm for victims of World Bank-funded projects, particularly for those whose lives have been destroyed through involuntary resettlement.

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For more information about the impacts of resettlement, please visit the following links:
www.ciel.org, www.narmada.org, www.bicusa.org, www.irn.org, www.savetibet.org.

For more information about the World Bank revision process, contact Maninder Gill, coordinator of the World Bank's Resettlement Thematic Group; his email is mgill@worldbank.org and his phone number is 202.458.1296.

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(1) The figure of 10,000 people involuntarily displaced by the China-Tibet project comes from the World Bank's October 1999 Inventory of Projects with Involuntary Resettlement; the project documentation claimed that 4,000 would be involuntarily resettled.