Bank falls foul of Inspection Panel

13 February 2009

Inspection Panel reports relating to Albania and Uganda expose World Bank non-compliance in a number of areas. These findings are compounded by allegations of corruption and the obstruction of the Inspection Panel investigation.

Bulldozers in the Balkans

A leaked Inspection Panel report dated November 2008, alleges that the World Bank failed to comply with its policies on involuntary resettlement through aiding the demolition of informal settlements in the village of Jale, Albania, demolitions which were caught on film.

The $17.5 million International Development Association project intends to “establish an integrated approach to coastal zone management” through policy reforms, institutional development and sustainable development.

Official correspondence on Bank letter head and aerial photographs of the site were sent by the project coordination unit to the construction police, requesting that they “kindly make sure to take the necessary measures and as fast as possible.” Although the Inspection Panel report notes that the demolitions were not directly financed by the Bank, the evidence contradicts the Bank’s claims that the demolitions are “not linked directly or indirectly” to them.

In a memo to the Bank, the Panel notes allegations that the Bank hampered the investigation by wilfully misrepresenting facts, withholding information and coaching staff members before interviews. The panel does not directly address the allegations of corruption in the report or the claims that the demolition was part of a plan to develop the coastal region as a holiday resort. However, they do acknowledge that the demolition supports the intention to clear the area.

In January the World Bank temporarily suspended the disbursement of the IDA loan for the project citing “outstanding policy and operational issues related to project implementation, particularly, the relationship between government efforts to control illegal construction…and the land use planning activities supported by the project.” The Bank’s executive board is due to discuss the Panel’s report in mid-February

Bujagali blues

November 2008 saw the release of the latest Inspection Panel report into the ongoing saga of the Bujagali dam in Uganda (see Update 62) which suggests few gains have been made.

The report states that “the high allocation of risk [to the Government of Uganda] increases the possibility that the project may not achieve the broad objective of sustainable development and poverty reduction embodied in Bank operational policies and procedures”. Additionally, the project “is in non-compliance with the mandate of Bank policy on involuntary resettlement to improve, or at least restore, the livelihoods and standards of the people displaced by the project.”

Further criticisms highlight the insufficient attention given to climate concerns and the potentially harmful cumulative effects of multiple dams on the Nile.

The Bank management’s response has been weak, restating the ostensible benefits of the dam but doing little to address the panel’s findings of non-compliance. The Bank board endorsed management’s weak action plan, which includes the establishment of a project monitoring committee, the creation of a plan for managing or preserving cultural resources and the disclosure of a report by an independent panel of social and environmental experts. Management is set to report to the Board on the progress of the action plan in six months.

Werner Kiene, chairperson of the Inspectional Panel responded by stating that “several key Panel findings are incompletely addressed in the response and action plan, including on resettlement, protection of cultural values, and in the analysis of economics and risks.”

NGOs have also voiced criticism of the Bank’s response. In a letter to World Bank executive directors, the Ugandan NGO National Association of Professional Environmentalists (NAPE) insisted that “the recent response by management makes it clear that they have no intention of addressing the many problems and failures to meet Bank policy as documented by the Panel.” NAPE reiterate that the risks are likely to be borne by Ugandans, not project developers or the Bank and offers several recommendations for appropriate responses; calling on the Bank to “move away from its ideological support of private-sector infrastructure projects when public-sector alternatives are advantageous.”