IFI governance


Inspection Panel condemns Bank forestry project in Cambodia

19 June 2006

versión español

A leaked Inspection Panel investigation heavily criticises a forestry management project in Cambodia. The investigation, requested by local communities, the Cambodian NGO Forum and UK-based NGO Global Witness (see Update 46), finds the project helped private companies to produce forest management plans which were “deficient in almost all regards”, failed to reduce poverty in Cambodia and, in the process, broke safeguard policies designed to protect human rights and the environment. Global Witness is now calling for a full-scale review of Bank policies on forestry and corruption.

The Panel found that the Bank broke its own rules by:

the project helped produce plans which were "deficient in almost all regards"
  • ignoring evidence showing the concession logging system had failed;
  • failing to disqualify companies with a track-record of illegal logging;
  • allowing companies to conduct consultations despite conflicts of interest; and
  • failing to recognise that some of the areas put forward for insudtrial logging were also forests of “high ecological value”.

Timber has been recognised by the Bank as developmentally important to Cambodia, where 80 per cent of the population depend on forests for subsistence livelihoods, yet the country’s forests have been systematically and illegally pillaged over the last decade by government-approved private companies. The Bank-supported $5 million Forest Concession Management and Control Pilot Project was designed to improve forest management , but merely gave support to the same crony companies previously responsible for ransacking Cambodia’s forests over the past decade.

Global Witness said: “If the Bank is really serious about improving accountability, it will take tangible steps to ensure other forest projects and interventions in highly corrupt environments benefit the poor rather than local elites and dubious private companies.”

In a surprise move, a letter from the Bank to Cambodia’s government last November revoked its support of the concession system. “It has taken years for the Bank to recognise its thinking was misinformed. Now we need this stance to be made public and for the Bank to use its influence in pushing forward these sensible reforms”, commented Global Witness. Another complaint about a forest management project in the Democratic Republic of Congo was recently lodged, citing similar concerns.