World Bank Admits It Ignored Its Own Rules Designed To Protect The Poor

03/05/2015 04:33 pm ET | Updated Mar 05, 2015
JIM WATSON via Getty Images

This story was reported and written with Sasha Chavkin and Mike Hudson from the International Consortium of Investigative Journalists.

The World Bank, created to fight poverty, has admitted that it’s failed to follow its own rules for protecting the poor people swept aside by dams, roads and other big projects it bankrolls.

This conclusion, announced by the bank on Wednesday, amounts to a reversal of its previous efforts to downplay concerns raised by human rights activists and others working on behalf of the dispossessed -- people evicted from their land, sometimes in violent ways, to make way for World Bank-financed initiatives.

It comes days after the International Consortium of Investigative Journalists and The Huffington Post informed bank officials that the news outlets had found “systemic gaps” in the bank's protections for people who lose homes or jobs because of development projects.

The World Bank, which is controlled by the United States and other member countries, had failed to respond to the news organizations’ repeated requests over the past several weeks for an interview with Jim Yong Kim, the president of the World Bank Group, the parent institution. The news outlets have been pressing the bank for months for answers to questions about how well it enforces its own “social and environmental safeguards.”

The bank said in a news release that its conclusions followed internal audits conducted over the past two years.

“We took a hard look at ourselves on resettlement and what we found caused me deep concern,” Kim said in a statement.

Under its current rules for safeguards, the World Bank and its borrowers are supposed to make sure that people physically or economically displaced by a project are identified, consulted and provided new homes, jobs or other help that restores them to living conditions that are equal to or better than before.

The World Bank said that it did not know how many people its projects had uprooted, and that it did not do enough to keep track of projects that push communities off their land or cost people their livelihoods. ICIJ, HuffPost and other media partners that have examined the issue found that projects backed by the World Bank have displaced millions of people over the last decade.

The World Bank also said it is taking steps to fix the problems with its oversight of projects that cause “involuntary resettlement.” The bank will increase the number of staffers who oversee social and environmental protections, and will build a new database to track people displaced by bank projects, the lender said in a press release.

The bank’s announcement comes in the midst of a multiyear revision of its safeguard policies, including its policy on resettlement. The bank’s guidelines set a global standard for social and environmental protections in development aid that is often followed by regional development banks and private lenders worldwide.

An initial draft of the revision, released in July 2014, was widely panned by human rights experts and civil society groups as a dramatic rollback of the bank’s standards. Critics said the proposed rules would reduce borrowers’ obligations to plan in advance for displacement and other harms to local people and the environment, and instead allow borrowers to ignore problems until the harm is already done.

Ted Downing, the president of the International Network on Displacement and Resettlement, said the bank’s statement was meant to divert attention from the larger issues at stake.

“The purpose is to distract people,” Downing said Thursday. “The big question is which policy all this staff that are being rearranged are enforcing.”

Stephanie Fried, executive director of the Ulu Foundation, an environmental group that advocates for forest communities, said the bank’s promise to do a better job of enforcing its safeguards won’t do much good if its safeguards are going to be “radically diluted.”

A second draft of the safeguards revision is expected to be released later this year.

A bank spokesman denied that the bank’s release of its action plan on Wednesday had anything to do with the questions being asked by media organizations. The bank said that its action plan on resettlement was meant to address the urgent issues identified in its reviews without the additional delay of waiting for a new policy.

“We’re not going to wait until that process is through to implement this action plan,” the spokesman said. “This work needs to happen now.”

In the months prior to the release of the action plan, the bank had been working to distance itself from abuses carried out by the governments it backs.

In Ethiopia, ICIJ revealed in January, the bank’s internal Inspection Panel found that the World Bank had repeatedly violated its own rules in failing to acknowledge the link between a bank-funded health and education initiative and violent evictions targeting indigenous peoples.

Last week, the bank denied blame for the evictions. Many of the people forced out of their villages now live in refugee camps in South Sudan.

The Inspection Panel also found that the World Bank violated its safeguards policies in Kenya by failing to protect indigenous people who said that a bank-funded conservation effort had been used to force them from their ancestral forests.

In both Kenya and Ethiopia, the World Bank declined to insist that its client governments compensate the people who lost their homes.

Human rights activists who have criticized the bank for its failure to live up to its own standards for years said they were taken by surprise by the sudden release of the audits, and the bank’s avowals of reform.

Natalie Fields, the executive director of the Accountability Counsel, a legal group that represents indigenous peoples in disputes with the World Bank and IFC, said the plan to address the problems seemed “slapped together.”

The reforms announced Wednesday don’t include measures to hold bank staff accountable for not doing a better job of identifying and helping displaced people, she said.

“It’s a positive that the bank is acknowledging problems, but in many respects this is the same old story,” Fields said. “They have come up with their own plan for how to address the issues, without consulting people who have spent years of their lives on resettlement, and without consulting with the communities themselves.”

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