Resettlement, the IFIs, and Equator Principles: Research and Action

Workshop at World Bank annual meetings (8 October 2008)

14 October 2008 | Minutes

Sponsored by Bank Information Center (BIC), International Network on Displacement and Resettlement (INDR), International Accountability Project (IAP)

Presenters: Jen Kalafut and Joanna Levitt, International Accountability Project

Displacement tends to be the most contentious within controversial development projects.

There has been a resurgence of big dam projects and continues to be large amounts of displacement around oil and gas extraction. Furthermore, statistics show that infrastructure projects (primarily in urban areas) cause the most significant displacement as do urban renewal projects such as shopping malls.

Displacement can either be physical as when people are forced from their homes or economic, when people lose their livelihoods and are forced from their homes as a result. Overall development-induced displacement is the largest cause of forced migration with 15 million people forcibly uprooted each year.

Christian Aid has recently reported that from now until 2050, 1 billion people will be forced from their homes because of climate change and other forms of displacement. They also assert that forced displacement will be the leading issue for marginalized people. The issues of largest concerns in displacement are:

  • Involuntary impoverishment
  • Human rights abuses (this includes serious civil and political abuses such as detentions, arrests, torture, related to resistance of displacement)
  • Environmental degradation
  • Civil unrest and instability
  • Exacerbation of inequality

The World Bank had the first policy on rights and standards related to displacement. The Bank acknowledges human rights risks of displacement more than others. It highlights the need to:

  • Avoid and minimize displacement
  • Restore and improve livelihoods
  • Address physical and economic displacement
  • Focus on vulnerable groups

These policies also state that compensation for losses is not sufficient, however in practice, little else is done. One of the benefits of these policies is that they require legal agreement from a country to operate under these standards within the scope of a specific WB project. This is significant in that UN guidelines on displacement have been proposed, but have yet to be passed or institutionalized.

The Special Rapporteur on the Right to Housing found that the impact of resettlement was so significant for women, that he established a whole set of guidelines on women. There are also policies addressing resettlements.

A large portion of financing for projects comes from the private sector. In many instances the right of eminent domain, which is a public function, is being transferred to corporations to decide what is in best public interest.

Professor Michael Cernea

The deeper economic implications and considerations needed for fully addressing the impacts of resettlement have been outlined in a new book, Can Compensation Prevent Impoverishment? Reforming Resettlement, Investments & Benefit Sharing, which was briefly presented by one of it’s editors, Professor Michael M. Cernea who has worked for years in the world Bank and was instrumental in the establishment of the Bank’s Resettlement guidelines

There is a move within the IFIs to move safeguard policies and resettlement programs to allow countries to set their standards for tools and means to use in resettlement.

Compensation is always touted as a way to make sure people who are displaced are left better off, however, it doesn’t work. Compensation is restitution for what people lose. However, they lose more than material assets. There also isn’t enough follow-up to see what impact restitution for livelihoods has had. There is a whole set of economic issues in resettlement which are not being addressed. At the heart of these issues is the fact that restitution is not enough. Investment in communities to get them off their feet and create methods for reducing poverty in the future are needed.

For example, if a family is displaced and given a lump sum of money to compensate them for the old house that was taken from them, this money may not be enough to buy both new land and build a new house. As Mr. Cernea put it, you can’t rebuild an old house. So families have to spend the money for a new house, at current costs, and perhaps then don’t have money for land and farming to make up for the housing and land lost. This example shows how restitution does not often properly compensate livelihoods, etc.

These and other issues addressed in the World Bank’s impoverishment Risk and Reconstruction Model (IRR).

This model aims to provide four functions:

  • Predictive (warning and planning) function
  • Diagnostic (explanatory and assessment) function
  • Problem resolution function in guiding and measuring re-establishment
  • Research function in formulating hypotheses.

This framework and the way in which it places resettlement for addressing significant risks, can be found in this new book.