How the World Bank broke its promise to protect the poor
Beneath a gloomy white sky, more than 100 armed police poured into the slum of Badia East in the teeming megacity of Lagos, Nigeria. As they advanced, they cracked their batons on the unpaved streets and against the ramshackle walls of the shanties. “If you love your life, move out!” the officers shouted. Thousands of people grabbed what belongings they could carry and fled. Then a line of hulking excavators moved in, using their hydraulic claws to smash homes into pieces. Within hours, the neighborhood was a ruin.
The Lagos state government flattened Badia East in February 2013 to clear land in an urban renewal zone financed by the World Bank, the global lender committed to fighting poverty. The neighborhood’s poor residents were cast out without warning or compensation and left to fend for themselves in a crowded, dangerous city. Evictions like the one in Badia East aren’t supposed to happen in the middle of projects backed by the World Bank.
For more than three decades, the lender has maintained a set of “safeguard”
policies that it claims have brought about a more humane and democratic system of economic development. Governments that borrow money from the bank can’t force people from their homes without warning. Families evicted to make way for dams, power plants or other big projects must be resettled and their livelihoods restored. The bank’s commitment, it says, is to “do no harm” to people or the environment.
But the World Bank has broken its promise. Over the past decade, the bank has regularly failed to enforce its rules, with devastating consequences for some of the poorest and most vulnerable people on the planet, an investigation by the International Consortium of Investigative Journalists, The Huffington Post and other media partners has found.
The World Bank often neglects to properly review projects ahead of time to make sure communities are protected, and frequently has no idea what happens to people after they are removed. In many cases, it has continued to do business with governments that have abused their citizens, sending a signal that borrowers have little to fear if they violate the bank’s rules, according to current and former bank employees.
“There was often no intent on the part of the governments to comply — and there was often no intent on the part of the bank’s management to enforce,”
said Navin Rai, a former World Bank official who oversaw the bank’s protections for indigenous peoples from 2000 to 2012. “That was how the game was played.”
In March, after ICIJ and HuffPost informed World Bank officials that the news outlets had found “systemic gaps” in the institution’s protections for displaced families, the bank acknowledged that its oversight has been poor, and promised reforms. “We took a hard look at ourselves on resettlement and what we found caused me deep concern,” Jim Yong Kim, the World Bank’s president, said in a statement.
The scope of “involuntary resettlement,” as the bank calls it, is vast. From
2004 to 2013, the bank’s projects physically or economically displaced an estimated 3.4 million people, forcing them from their homes, taking their land or damaging their livelihoods, ICIJ’s analysis of World Bank records reveals. The true figure is likely higher, because the bank often fails to count or undercounts the number of people affected by its projects.
A team of more than 50 journalists from 21 countries spent nearly a year documenting the bank’s failure to protect people moved aside in the name of progress. The reporting partners analysed thousands of World Bank records, interviewed hundreds of people and reported on the ground in Albania, Brazil, Ethiopia, Honduras, Ghana, Guatemala, India, Kenya, Kosovo, Nigeria, Peru, Serbia, South Sudan and Uganda.
In these countries and others, the investigation found, the bank’s lapses have hurt urban slum dwellers, hardscrabble farmers, impoverished fisherfolk, forest dwellers and indigenous groups — leaving them to fight for their homes, their land and their ways of life, sometimes in the face of intimidation and violence.
Asia and Africa Resettled
Nearly all of the estimated 3.4 million people who have been physically or economically displaced by World Bank-backed projects between 2004 and 2013 live in Africa or one of three Asian countries: Vietnam, China and India.
Between 2004 and 2013, the World Bank and its private-sector lending arm, the International Finance Corp., committed to lend $455 billion to bankroll nearly 7,200 projects in developing countries. Over the same span, people affected by World Bank and IFC investments lodged dozens of complaints with the lenders’ internal review panels, alleging the lenders and their borrowers failed to live up to World Bank and IFC safeguard rules.
In Lagos, the World Bank’s ombudsman, the Inspection Panel, said bank management “fell short of protecting the poor and vulnerable communities against forceful evictions.” Bank officials should have paid better attention to what was going on in Badia East, the panel said, given Lagos authorities’ long history of bulldozing slums and forcing people from their homes. One year after the evictions, the bank loaned Lagos authorities $200 million to support the state government’s budget.
The World Bank said it was “not a party to the demolition” and that it advised the Lagos government to negotiate with displaced people, leading to compensation for most of those who said they’d been harmed.
Cases involving evictions have drawn the most attention, but the most common hardships suffered by people living in the path of World Bank projects involve lost or diminished income.
On India’s northwest coast, members of a historically oppressed Muslim community claim that heated water spewing from a coal-fueled power plant has depleted fish and lobster stocks in the once-fertile gulf where they make their living. The IFC loaned Tata Power, one of India’s largest companies, $450 million to help build the plant.
The U.S. and other global powers launched the World Bank at the end of World War II to promote development in countries torn by war and poverty. Member countries finance the bank and vote on whether to approve roughly $65 billion in annual loans, grants and other investments. In 2014, the bank financed initiatives as varied as training for chicken farmers in Senegal and sewage system upgrades in the West Bank and Gaza Strip.
World Bank President Kim said in March that the demand in struggling regions for infrastructure spending — to provide clean water, electricity, medical care and other vital needs — will mean the bank will finance an increasing number of big projects likely to remove people from their land or disrupt their livelihoods. The World Bank also put out a 5½-page “action plan” that it said would improve its oversight of resettlement. “We must and will do better,” said David Theis, a World Bank spokesman, in response to the reporting team’s questions.
Yet even as it promised reforms to its procedures, the bank has proposed sweeping changes to the policies that underlie them. The bank is now in the middle of a rewrite of its safeguards policy that will set its course for decades to come. Some current and former World Bank officials warn that the proposed revisions will further undermine the bank’s commitment to protecting the people it was created to serve. The latest draft of the new policy, released in July 2014, would give governments more room to sidestep the bank’s standards and make decisions about whether local populations need protecting, they say.
“I am saddened to see now that pioneering policy achievements of the bank are being dismantled and downgraded,” said Michael Cernea, a former high-ranking bank official who oversaw the bank resettlement protections for nearly two decades. “The poorest and most powerless will pay the price.”
The bank says it has listened to the feedback and will release a revised draft with “the strongest, most state-of-the-art environmental and social safeguards.”
In an internal survey conducted last year by bank auditors, 77 per cent of employees responsible for enforcing the institution’s safeguards said they think that management “does not value” their work.
No Consolation
In 2007, residents of Jale, a tiny Albanian beach hamlet on the Ionian Sea, found themselves in the path of a coastal cleanup effort backed by a $17.5 million loan from the World Bank. More than a dozen poor families lived in Jale, many in homes with add-ons and extra floors they rented to vacationers.
Albanian authorities had other plans for the seaside. They saw Jale as an ideal spot for a high-end resort to lure tourists to the country. They decided to use the coastal restoration project — which was managed by the son-in-law of Sali Berisha, Albania’s prime minister at the time — as a vehicle for turning the plan into a reality.
File photo shows residents in Polonnaruwa struggle to draw water during a drought.
Before dawn one April morning, dozens of police officers streamed into the beach community, heading for structures previously identified in photos taken during aerial surveys paid for by the World Bank. The police rousted residents from their beds and forced them from their homes. Demolition crews leveled entire houses or tore down additions that the government said had been put up without proper permits.
Bank officials initially denied the evictions were connected to the bank-financed coastal initiative. But a year later, the bank’s Inspection Panel found “direct links” between the project and the demolitions. The panel slammed the bank for embarking on a “systematic effort” to obstruct its investigation, providing answers “at times in total conflict with factual information which had been long known to management.”
After the panel’s report was released in 2008, then-World Bank Group President Robert Zoellick called the bank’s actions “appalling.” Zoellick vowed that the institution would swiftly “strengthen oversight, improve procedures and help the families who had their buildings demolished.”
Seven years later, little has changed. In Jale, most residents still haven’t received payment from the government for what they lost, even though the World Bank has covered their legal costs. At the bank, oversight remains weak.
A 2014 internal World Bank review found that in 60 per cent of sampled cases, bank staffers failed to document what happened to people after they were forced from their land or homes. Seventy per cent of the cases sampled in the 2014 report lacked required information about whether anyone had complained and whether complaints were resolved, indicating the bank’s mechanisms for dealing with grievances were “box-checking” exercises that “existed on paper but not in practice,” the in-house reviewers wrote. These “sizeable gaps in information” indicate “significant potential failures in the bank’s system for dealing with resettlement,” the report said. “The inability to confirm that resettlement has been satisfactorily completed poses a reputational risk for the World Bank.”
‘They Abandoned Us’
Most World Bank investments do not require evictions or damage people’s ability to earn a living or feed their families. But the percentage of those that do has increased sharply in recent years. A 2012 internal audit found that projects in the bank’s pipeline triggered the bank’s resettlement policy 40 per cent of the time — twice as often as projects the bank had already completed.
The World Bank and IFC have also been boosting support for mega-projects, such as oil pipelines and dams, that the lenders acknowledge are most likely to cause “irreversible” social or environmental harm, an analysis by HuffPost and ICIJ found.
A big project can upend the lives of tens of thousands of people. Since 2004, World Bank estimates indicate that at least a dozen bank-supported projects physically or economically displaced more than 50,000 people each.
Studies show that forced relocations can rip apart kinship networks and increase risks of illness and disease. Resettled populations are more likely to suffer unemployment and hunger, and mortality rates are higher.
The World Bank acknowledges that resettlement is difficult, but says it’s often impossible to build roads, power plants and other much-needed projects without moving people from their homes. “We stand by the need to continue financing infrastructure projects, including those that entail land acquisition and involuntary resettlement,” said Theis, the World Bank spokesman.
The bank says it strives to make sure its borrowers provide real help to people pushed aside by big projects. In Laos, the bank says, authorities built more than 1,300 new homes with electricity and toilets, 32 schools and two health centers for thousands of people forced to move to make way for a World Bank-financed dam. “Through careful project design and proper implementation, land acquisition and involuntary resettlement have resulted in people’s lives improving significantly,” Theis said in a statement.
In a drought-haunted region of Brazil, farm families pushed aside by another World Bank-backed dam say that their lives haven’t been improved.
Thirty-five families live in a tiny, government-built relocation village called Gameleira, named after the dam and reservoir that forced them to leave their homes along the Mundaú River.
In their old homes, they could take water from wells and the river itself, but the relocation village has no fresh water source. A World Bank report acknowledged a delay in getting water access for the new village, but said the village’s water issues had been solved by late 2012. The villagers say that’s not true. They are still waiting, four years after they were forced to relocate, for local authorities to keep their promise to build a small pipeline to draw water from the new reservoir to the relocation village.
Meanwhile, water from the reservoir is being piped to urban areas.
A well in the village produces salty water and, even with desalination equipment, each family is limited to 36 liters of water a day. Families supplement their supply by buying from commercial vendors, sometimes spending as much as a third of their modes incomes. These purchases provide them enough water to irrigate small gardens of yuca, beans and corn. If they want to plant cash crops — such as cashews — they have to wait for rain, which hardly ever comes.
In a written statement, the World Bank said it is satisfied the village was provided an adequate supply of water “both in terms of quantity and quality.” The bank said it is helping Brazilian authorities deal with northeast Brazil’s prolonged drought by helping “to increase the resilience of small rural communities,” giving them advice on drilling emergency groundwater wells and creating “drought preparedness plans.”
In Ethiopia, the World Bank’s Inspection Panel found the bank had violated its own rules by failing to acknowledge an “operational link” between a bank-funded health and education initiative and a mass relocation campaign carried out by the Ethiopian government. In 2011, soldiers carrying out the evictions targeted some villagers for beatings and rapes, killing at least seven, according to a report by Human Rights Watch and ICIJ’s interviews with people who were evicted.
In India, the IFC’s internal ombudsman found that the lender had breached its policies by not doing enough to protect the large fishing community living in the shadow of the coal power plant it financed on the Gulf of Kutch.
In both Ethiopia and India, the World Bank Group declined to direct its clients to fully compensate the affected communities.
In response to complaints about the Badia East evictions in Nigeria, the World Bank embraced a shortcut that fell short of its promise that people affected by projects will be fully compensated for their losses.
Typically, a community that claims it has been harmed by a bank project can file a complaint that will trigger an investigation by the bank’s Inspection Panel. But when three Badia East residents submitted a complaint, panel staffers held off launching an investigation. Instead, they guided the residents into a new pilot program for handling disputes. The program put the community into direct negotiations with the Lagos state government.
Megan Chapman, then a lawyer for the Social and Economic Rights Action Center and now a co-founder of Justice & Empowerment Initiatives, represented the evicted residents. The Inspection Panel promised Chapman that the Badia East community could demand an investigation at any time if it wasn’t satisfied with the outcome, according to emails reviewed by ICIJ.
Negotiations didn’t go well for the evicted residents. The Lagos government insisted they had been illegal squatters, even though some of them had lived there for decades. It gave the group an ultimatum: Accept a small payment and sign away any legal rights, or get nothing.
Chapman believed that the government’s offer violated the bank’s resettlement policy because it didn’t provide new homes for the displaced or compensation equal to what they’d lost. The payments that Lagos authorities offered for larger demolished structures, for example, were 31 per cent lower than what the World Bank’s own consultants said they were worth.
“It was like David and Goliath. There were these little people fighting against this giant,” Chapman said. The bank “really left vulnerable people on their own.”
The government’s ultimatum divided the community. The leader of Chapman’s organisation said it was the best offer the evicted people were going to get. He said he was satisfied with the deal. Many residents and their advocates — including Chapman — objected. But they had nowhere to turn for help.
Internal emails obtained by ICIJ indicate that by early 2014, the Inspection Panel’s chair, Eimi Watanabe, was already pushing to make sure that the panel would not investigate the World Bank’s role in the case. After hearing that the leader of Chapman’s group was satisfied with the outcome of the negotiations, Watanabe urged her staff to issue a formal notice shutting down the possibility of any investigation before the fragile agreement fell apart, according to internal emails obtained by ICIJ.
“Pl[ease] issue notice soonest before it unravels,” Watanabe wrote on Feb.
6, 2014.
Watanabe’s directive didn’t immediately kill the investigation, but over the following months the panel made it clear that it didn’t want to dig deeper into the World Bank’s actions.
In July 2014, two of the three residents who had filed the complaint told the panel they were unhappy with the deal and that they wanted to go forward with an investigation. The panel rejected their request and shut the case down with an official notice hat said, as an aside, that the bank had fallen short of its own resettlement standards. Chapman and other advocates say the bank misled them about how the pilot program would work and abandoned the people of Badia East. Watanabe did not respond to ICIJ’s questions about the Lagos case.
Gonzalo Castro de la Mata, the Inspection Panel’s current chair, said the panel “deliberated carefully at every stage of the case” and did not seek to arbitrarily shut down the investigation before it could start. He said that although the Lagos government had agreed to follow World Bank rules for resettlement in Badia East and other neighborhoods, the evictions weren’t done under the official umbrella of the bank’s urban renewal initiative.
Because of this and other factors, he said, the panel determined that “a lengthy process of investigation would not at the end of day necessarily yield better outcomes” for residents who lost their homes.
An Uncertain Future
As it enters its eighth decade, the World Bank faces an identity crisis. It is no longer the only lender willing to venture into struggling nations and finance huge projects. It is being challenged by new competition from other development banks that don’t have the same social standards — and are rapidly drawing support from the World Bank’s traditional backers.
China has launched a new development bank and persuaded Britain, Germany and other American allies to join, despite open U.S. opposition. These geopolitical shifts have fueled doubts about whether the World Bank still has the clout — or the desire — to impose strong protections for people living in the way of development.
The bank’s proposed changes to its safeguard rules would grant many borrowers greater authority to police themselves. In the current draft, governments would be allowed to hold off on preparing resettlement plans until after the bank greenlights projects. They would also be permitted to use their own environmental and social policies instead of the bank’s safeguards, as long as the bank determines these policies are consistent with its own.
Some current and former bank officials say these changes would spell disaster for the people living in the growing footprint of the bank’s projects — allowing governments to abide by weaker national standards and decide whether vulnerable populations need protecting after they have already received financing. In December, the World Bank’s biggest patron, the U.S. Congress, approved a measure directing the American representative on the World Bank board to vote against any future project that would be subject to weaker safeguards than the ones currently in place. The bank says that the new rules would strengthen the protections for populations affected by its projects.
Theis, the bank spokesman, said that under the proposed rules, “a rigorous upfront scoping of the project is always required” and borrowers still must prepare plans to address resettlement and other adverse impacts of projects “well in advance of any construction activities.” World Bank officials are now writing a new version of the safeguards that they say will take into account the criticisms of their previous draft. They expect to release the new draft in the late spring or summer.
(The above report is available on
http://projects.huffingtonpost.com/worldbank-evicted-abandoned/?utm_campaign
=world_bank_release&utm_source=email&utm_medium=button_top&goal=0_ffd1d0160d
-9e77717148-100352937&mc_cid=9e77717148&mc_eid=d1c7b40bc7
ICIJ and The Huffington Post estimate that 3.4 million people have been physically or economically displaced by World Bank-backed projects since 2004).