Coal India: Bank Board demands minimal action

8 September 2003

On 22 July the World Bank Board discussed the critical Inspection Panel report on the Coal India project. It decided that the Bank should continue supervising the project as long as necessary to ensure that the outstanding issues relating to resettlement and environment are “substantially resolved”, and should report within 12 months on issues identified by the Panel. The Board, however, accepted Management’s contention that nearly 90 per cent of project affected people have improved or restored their incomes. This despite concerns about the way these statistics were produced. For example local peoples’ use of forest products was overlooked in the baseline surveys.

without action on mined land reclamation, economic rehabilitation cannot be sustainable

Bank management did concede that it violated Bank policies on consultation, disclosure and resettlement. Faults were admitted in relation to land compensation, the recognition of traditional land rights, on loss of access to forest products, income restoration schemes and subsistence allowances. Richard Harkinson of Minewatch, a UK-based activist group, has demanded the release of more complete minutes of the Board meeting “to show the details of what remedial action was demanded”. He complains that the Bank’s Board appears to have accepted the arguments of Bank management too easily and not taken adequate action given the seriousness of the findings by its own Inspection Panel. Minewatch concludes: “without action on mined land reclamation, economic rehabilitation cannot be sustainable and the displaced indigenous people will subsidise the mainstream Indian economy and Bank loan and credit repayments through their involuntary sacrifices”.