IFI governance


New criticisms of the Bank’s resettlement record

15 December 1998

A new official report has criticised the Bank’s record in overseeing the resettlement of people displaced by projects it supports. The June 1998 study by the semi-autonomous Operations Evaluation Department found “no evidence that attention to resettlement during implementation and supervision has been mainstreamed”, that “NGO involvement was far from optimal”, and “the projects were largely oblivious to the gender aspect of resettlement”. Even more shocking, the OED found “no evidence” that the Bank assisted borrowers “in avoiding unnecessary resettlement operations or reducing the scale of unavoidable displacements”, mandated in the Bank’s policy for many years.

The OED report makes two main recommendations. “The first principle”, it states, “must be to reduce the number of people affected to the greatest extent possible, until financial and economic returns argue otherwise”. Secondly, OED advocates a move away from land-for-land compensation, which on paper has so far been the central tenet of the Bank’s resettlement policy, to a menu of options including cash compensation. Peter Bosshard of the Berne Declaration, Switzerland, commented that “the first recommendation is incomplete, the second is outright dangerous”.

“The culture and social coherence of a local community, a burial ground or a forest all have low prices in the Bank’s economistic thinking, but must be respected when planning projects”.

Alternatives to land-for-land compensation such as cash payouts or income-generating schemes have been tried for years if not decades. Several Inspection Panel investigations and countless other reports demonstrate that at least in rural areas, such options have universally failed. The new OED report itself confirms that the Bank’s “special incomes strategies”, which it studied in two countries, “have been uniformly ineffective”.

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