For Immediate Release
April 7, 2014
Three recent World Bank funded projects cases demonstrate the catastrophic consequences of World Bank failures to conduct adequate assessments prior to approving and implementing projects.
In 2012, the World Bank approved a $40 million loan to the Uzbek government for a project that directs funds to Uzbekistan’s agriculture sector. For decades, the government of Uzbekistan has forced millions of children, teachers, public servants and private sector employees to pick cotton under appalling conditions. Those who refuse are expelled from school, fired from their jobs, denied public benefits or worse. This widespread and systematic use of forced labor has been condemned by the United States government, the European Union, the United Nations, and multiple clothing manufacturers. Despite this, the World Bank ignored the issue of state-sponsored forced labor in the Social Assessment, carried out prior to the project, and stated in that Assessment that “children are not exploited for cotton production”.
“It is completely unacceptable for the World Bank to rubber stamp an assessment that fraudulently asserts that there is a lack of child labor in the country” said Nadejda Atayeva, Association for Human Rights in Central Asia.
A second problematic case is the loan by the International Finance Corporation (IFC), the World Bank’s private sector lending arm, to fund the 4.6 GW Tata Mundra coal power plant in Gujarat, India. In this case, the Compliance Advisor Ombudsman (CAO), the IFC’s independent accountability mechanism, found that the environmental and social reports from the client were erroneous, showing no potential harm to fisheries or local populations. Delegation of self-monitoring and reporting of policy compliance to the client contributed to a failure to mitigate impacts on the airshed and marine environment. The IFC still has no appropriate remedial action plan.
“This project is hitting us hard where it hurts the most – our livelihood and our health, especially that of the children and elderly.” said Dr. Bharat Patel, Machhimar Adhikar Sangharsh Sangathan, India.
In a third instance where the World Bank has abdicated its responsibility for carrying out quality assessments prior to project approval, the IFC granted a loan to Corporación Dinant—a palm oil and food corporation in Honduras. The CAO audited the project in 2013, after reports of violence, death and alleged forced evictions of farmers by Dinant. Among numerous shortcomings, the CAO audit found that the IFC had underestimated and inadequately assessed the risks to communities, while simultaneously overestimating Dinant’s capacity to manage these risks. The CAO also faulted IFC for flawed due diligence and supervision.
“These cases, along with many others, make it abundantly clear that the World Bank needs to adopt policy requirements to ensure that potential adverse human rights impacts are identified and addressed prior to approving any project” stated Jocelyn Medallo from the Center for International Environmental Law, a Steering Committee member of the global coalition, Bank on Human Rights.
Additionally, Josh Lichtenstein, Director of Campaigns at the Bank Information Center stated “it is critical for the World Bank to retain responsibility and accountability for the impacts of Bank funded projects. The World Bank must exercise rigorous oversight; clients cannot be left to monitor their own compliance with World Bank policies.”