World Bank policy violations in the China Western Poverty Reduction Project

 

June 15, 1999

Based on a preliminary review of project documentation, which was only made available from the InfoShop on June 8, 1999, we would like to call attention to the most obvious procedural and substantive violations of World Bank policy in the design of the China Western Poverty Reduction Project. This summary of policy violations is deliberately brief; it does not attempt to capture the full range of objections to the project, but rather to offer an analysis to persons who are already engaged in tracking this project. A more detailed assessment of the documents, together with a more thorough articulation of the policy violations, will be forthcoming in the near future. We believe that based on these and other policy violations, this project does not meet World Bank standards and should not be approved by the Board of Executive Directors.

1. Violation of Information Disclosure Policy. Bank Procedure 17. 50 requires that Bank staff make the environmental analysis of a project available to the public before a project goes to appraisal. The policy requires that once it is released locally it should be sent to the World Bank InfoShop. The appraisal date for this project was early January, 1999. However, the environmental analysis was not filed until early June, 1999, nearly six months after appraisal and two weeks before it is scheduled to go to the Board for approval.

2. Violations of Environmental Assessment Policy.
a. Mis-Categorization. The World Bank policy on Environmental Assessment is supposed to ensure that projects are "environmentally sound and sustainable." It requires Bank staff to screen projects according to their impacts, with a more thorough analysis required for more risky projects. Bank staff have claimed that this project requires only a Category B analysis, rather than a full environmental assessment under Category A. The policy is quite clear that projects involving reclamation and new land development, dams, irrigation systems, resettlement, pesticides, river basin development, and forestry production - all of which are involved in this project - require Category A assessment. The mis-categorization of this project has resulted in a failure to adequately assess the significant risks and potentially devastating environmental and social impacts of the project.

b. Inadequate analysis of environmental impacts. The EA that was done fails to meet World Bank standards, and cannot be considered to be an adequate document to inform decision-making about this project. For example, there is no analysis of the downstream impacts of damming the primary river system in the region (they simply don't know what impact it will have on the salt-water marsh wetlands that provide habitat to wildlife and serve an important ecological function in an arid landscape). There is inadequate consideration of the impact of water diversion on the traditional use needs of nomads and their livestock, or on the rangeland upon which they depend. In addition, the soils in the project area are highly saline, making successful crop development doubtful, but there is insufficient analysis of mitigation measures needed to assure the proposed project is viable or sustainable. Despite the significant conversion of natural habitats to intensive agricultural production -- 19,200 hectares to be irrigated over an area that covers 250,000 hectares of land -- there is no attempt to create environmental offsets or compensation areas to account for these losses.

3. Violation of Indigenous Peoples Policy. There is no publicly available Indigenous Peoples plan. The World Bank and China both concede that there are impacts on Tibetan and Mongolian ethnic minorities. One of the primary concerns of Tibetan support groups is that this project will further the dilution of the cultural identity and integrity of these traditional ethnic groups by facilitating the transmigration of Chinese settlers. World Bank OD 4.20 requires the Bank to take "special action" to ensure that its projects benefit, rather than adversely affect, indigenous peoples and ethnic minorities. There is a requirement that there be an indigenous peoples development plan, which again is supposed to be submitted before project appraisal. As far as we can tell, there is no indigenous peoples development plan prepared for this project, and the project design fails to take into account the needs, concerns and interests of the ethnic minorities in the area. The basic approach offered to the nomads is assimilation into the project area, which in turn results in the extinction of their traditional way of life.

4. Violation of Resettlement Policy. The Bank has failed to produce an involuntary resettlement plan that meets the requirements of OD 4.30. The involuntary resettlement plan, dated May 1999, is only 5 pages long and completely lacks any detail for how the project meets the terms and objectives of World Bank policy on resettlement. Bank policy requires that a "time-bound resettlement plan that conforms to Bank policy is a condition of appraisal for projects involving resettlement." The document was not prepared prior to appraisal, it does not conform to Bank policy, and it does not offer a time frame. The Bank claims that it also has a Voluntary Settlement Implementation Plan, but this document has not been made available to the public.

5. Inadequate Consultation with Affected Communities. The environmental assessment policy, the indigenous peoples policy, and the resettlement policy all require consultation with affected peoples. These consultations are supposed to be informed and meaningful (in other words, the people should have prior access to Bank documents and environmental analyses of the project), and the project design is supposed to be influenced by the concerns and preferences stated during these consultations. It is our belief that there are serious problems with the adequacy of the consultation. First, Bank staff have acknowledged that all consultations took place in the presence of a Chinese government official, which would seriously inhibit the ability of local people to speak against the project. In addition, forms were filled out by the researchers on behalf of the largely illiterate population. The Bank documents acknowledge that social assessments in China "often compromise respondent confidentiality." (Project Appraisal Document, p. 102). Despite these constraints, the documents acknowledge that 100% of those surveyed in the move-in area expressed concerns that the "new settlers would cut vegetation and destroy the ecological environment." (Environmental Information Package, pp. 3 and 65). Furthermore, 21% of the population expressed concern that the influx of immigrants and the increase in population would cause more social unrest. (EIP, p. 66). Despite these and other expressions of concern, there is no mention of how the project design was modified to take these significant concerns into account, nor is there adequate mitigation built into the project.

6. Degradation of Natural Habitats. OP 4.04 on Natural Habitats has the following relevant requirements: (a) that the Bank will not finance projects that require the conversion of natural habitats unless there are no alternatives and the benefits outweigh the risks; (b) if the EA determines that conversion will significantly alter habitats, mitigation measures must be applied; (c) such measures include minimizing habitat loss, establishing protected areas, and other forms of mitigation that are technically justifiable. The mis-categorization of this project has apparently pre-empted any serious evaluation of the potential impacts, and necessary mitigation of, intensive agricultural development on fragile lands. Thus, the project documents mention the risk of desertification as a consequence of land conversion, but do not propose adequate mitigation measures. Nor is there a serious attempt to identify, or mitigate, the impacts of the water diversion scheme on associated wetlands. No serious mitigation measures or compensatory protected areas have been proposed to deal with the impacts of the project on the natural habitat of the region.

7. Violation of Pest Management Policy. OP 4.09 aims to support "a strategy that promotes the use of biological or environmental control methods and reduces reliance on synthetic chemical pesticides." It is Bank policy to apply an integrated pest management (IPM) approach, and pesticide purchases are justifiable only within the context of IPM. The Project EA for Qinghai makes no mention of IPM, and instead simply lists the pesticides that will be used by farmers in the project. The project documents claim that Bank financing will not be used to purchase pesticides. However, the pest management policy "applies to all Bank lending whether or not the loan finances pesticides" recognizing that even without direct Bank financing, agricultural development projects may increase the use of pesticides with "subsequent environmental problems." As mentioned above, OD 4.01 Annex E requires that projects that will include the use of pesticides be classified as Category A.

8. Questionable Poverty Reduction Impacts. In addition to the above policy violations, we question the wisdom of utilizing resettlement as an instrument of poverty alleviation, given the Bank's historically dismal record on compliance with its resettlement policy and the high risk of failure in this project. The proposed benefits from this project accrue primarily to the 57,775 migrants who are moving from a degraded and overcrowded area. The theory is that the transfer of these people will alleviate the pressure on the move-out area. However, the population density of the move-out area will decline only marginally as a result of their departure, from 114.3 persons per square kilometer to 113.6. In contrast, the settlers will more than double the population of the host county, with significant and irreversible social and environmental effects. The project will disrupt the lives and livelihoods of ethnic minority peoples. The project is also likely to lead to increased ethnic tension and conflict over access to scarce natural resources, especially water and pasture lands.

June 15, 1999

 

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• Proceed to the full text of the Request for Inspection: China Western Poverty Reduction Project
  
• Proceed to the World Bank China Western Poverty Reduction Project Fact Sheet

 

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For more information contact:  info@ciel.org.

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