Cambodia and the limits of World Bank accountability

5 April 2011

The World Bank Inspection Panel released an investigation report in March, which found that the Bank breached its operational policies by failing to properly design and supervise the Cambodia Land Management and Administration Project (LMAP), contributing to “grave harm” to affected families. The Bank’s Inspection Panel found that the Bank’s failures contributed to the forced eviction of some 20,000 people living around Phnom Penh’s Boeung Kak Lake. Residents were wrongly denied the right to register their land ownership under the $28.8 million Bank-financed land titling project shortly before the government leased the area to a private developer and began a campaign of intimidation to force more than 4,000 affected families to sell their property for a fraction of its market value.

The project was established with the stated aim of developing the land market and improving security of tenure for the poor by systematically registering land and issuing titles across the country. However, the Panel found that many poor and vulnerable households have been arbitrarily excluded from the titling process, denying them an opportunity to claim and formalise their land rights. The Panel attributed this failing to non-compliance with the Bank’s operational policies and procedures on project appraisal and supervision.

Despite strong evidence to prove their legal rights to the land, Boeung Kak residents were excluded from the titling system when land registration was carried out in their neighbourhood in 2006. Shortly after, the Cambodian government granted an unlawful 99-year lease over the area to Shukaku Inc., a company chaired by a senator from the ruling Cambodian People’s Party and close associate of the prime minister.  Residents of the area covered by the lease – many of whom have lived lawfully in the area since soon after the fall of the Khmer Rouge regime in 1979 – were suddenly accused by the government of being illegal squatters on state-owned land.

The Inspection Panel also found that the Bank breached its operational policies by failing to supervise the government’s implementation of a resettlement policy framework, which was included in the LMAP loan agreement. The framework established a process of adequate resettlement and compensation, in accordance with the Bank’s policy on involuntary resettlement, for people found to be residing on state land. The framework was not applied by the government in the case of Boeung Kak or in other areas where households have been excluded from titling and subsequently forcibly evicted.

Following advocacy by civil society groups, the Bank acknowledged that the involuntary resettlement safeguards had been breached in Boeung Kak, and approached the Cambodian government to discuss measures to bring the project into compliance. The government disagreed that the safeguards had been violated and responded to the Bank’s entreaties by abruptly ending its agreement on LMAP, citing the Bank’s “complicated conditions”. Since that time, the Cambodian government has rebuffed all attempts by the Bank to remedy the situation and forced evictions of Boeung Kak families have continued unabated.

The predicament in which the Bank finds itself highlights the limits of its ability to be accountable to those harmed by its projects – even if it wants to be. The institutional architecture of the Bank requires it to rely on the cooperation of borrowing governments in any effort to remedy harms resulting from safeguard policy violations.  This structure becomes highly problematic when the government in question is notoriously unaccountable to its own people and is the perpetrator of the violations at hand.

More than 15 years since the establishment of the Inspection Panel, there continues to be no guarantee that claimants whose rights are vindicated by the Panel will receive any remedy whatsoever. If the Bank continues to lend to governments that consistently violate safeguard policy obligations and refuse to remedy harm, then it must be prepared to provide reparations unilaterally. In the absence of such a redress mechanism, the Bank will continue to suffer from an accountability deficit and demands for stripping the Bank’s legal immunity will grow ever louder.