The China Western Poverty Reduction Project involved the resettlement of 58,000 Han Chinese farmers into Qinghai Province, an area that was traditionally considered to be a part of Tibet, with the financial support of the World Bank. In addition to the resettlement component, the project proposed large-scale land clearance and leveling, as well as the conversion of fragile lands currently used for grazing by indigenous nomads into intensive agricultural production. It also included the construction of a 40-meter dam, the development of extensive irrigation networks and rural roads, and increased use of pesticides and fertilizers. Letters smuggled out of the project region by affected Tibetans showed that locally, people feared that the project would amount to nothing less than a “death sentence” for them.
In June 1999, the International Campaign for Tibet (ICT) filed a claim with the World Bank Inspection Panel, alleging that the project was designed in violation of numerous World Bank policies, including Indigenous Peoples, Resettlement, Environmental Assessment, and Information Disclosure Policies, and that it represented a serious threat to the lives and livelihoods of affected peoples. Together, ITC, CIEL and the Bank Information Center, launched a year-long campaign to pressure the World Bank to reconsider its involvement in the project.
In July 2000, the World Bank Board of Executive Directors, in a highly unusual move, rejected Bank Management’s support of the China Western Poverty Reduction Project. The Board decision to reject Management’s recommendation, which had been promoted by then-Bank President Wolfensohn and the East Asia and Pacific Region of the Bank, forced the Chinese government to withdraw the project from consideration. The Chinese Government proclaimed that it would continue with the ill-fated project using its own funds. However, the decision meant that the project would not enjoy the international seal of approval that China had been seeking from the international development institution.