World Bank Board of Executive Directors Votes on Singrauli and Itaparica Claims

World Bank Board of Executive Directors Authorize Panel Inspection for Singrauli, Deny Inspection for Itaparica
September 1997

The World Bank Board of Executive Directors recently considered the Inspection Panel’s recommendation for full investigations into Bank-financed projects in Itaparica, Brazil and Singrauli, India. In both cases, the independent Inspection Panel had conducted initial reviews and felt that full investigations into the allegations of Bank violations and adverse harms were warranted.

In a close vote on September 9th, the Executive Directors of the Board denied the Panel an investigation of the Bank’s role in the Itaparica Resettlement Project. In an incredibly close split of 48% for and 52% against, the Board bowed to strong Brazilian resistance to an investigation. They cited the Government of Brazil’s apparent eagerness to implement the project correctly as a sign that an investigation would be unnecessary. This conclusion was largely based on Brazil’s proposed Action Plan, which promised a completion and extension of the benefits of the Itaparica Resettlement Project, including a disbursement of an additional $290 million in government funds towards the Project. The Board, however, took Brazil’s promises in faith and never saw or evaluated the Action Plan. Instead, Brazil and the Board agreed to Bank supervision of the Action Plan, as well as to an Inspection Panel-assisted review of the project in 12 months time. The end result is that there will be no analysis of the Bank’s role in the project’s failure.

The Board decided to authorize a limited Panel investigation into the National Thermal Power Corporation (NTPC) Power Generation Project in Singrauli, India. In considering the conclusions and recommendations of the Panel’s initial review, along with the Management-proposed Action Program, the Board decided that the Panel’s investigation should only be conducted at the Bank’s headquarters in Washington “to further determine the extent to which the Bank adhered to its own policies and procedures under the project.” Management had also developed an Action Program for Singrauli, which includes several corrective measures – such as the appointment of an independent development institute to advise on solutions, the establishment of a separate monitoring panel to review and advise on implementation of the resettlement components of the project, and the training of NTPC staff. However, barring the Inspection Panel from visiting the project site severely hinders the investigation process and the spirit of accountability and transparency. It is also not clear whether Management’s Action Program is responsive to the concerns raised in the claim. The Program is highly deferential to NTPC and was not developed in a participatory manner. The claimants have expressed concern about the lack of transparency in the process and the fact that the Panel is barred from visiting the project site.

The Board votes on these last two Inspection Panel claims can be seen as a serious blow to the independence of the Inspection Panel and as an unwillingness to accept accountability at the Bank. The Board has decided to evaluate its experience with the Inspection Panel in November.