World Bank Guidelines Aim To Protect People Displaced By Development Projects

Released from Washington, D.C.

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Ismail Serageldin, World Bank Vice President for Environmentally Sustainable Development, will be available for interviews on Friday, April 8, by calling 703-820-2244. Mr. Serageldin will hold a press conference at the Bank – 701 18th St., NW, Washington, DC, Rm. J1050 – at 11 a.m. on Friday, April 8.

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Every year, construction projects like dams, power stations and irrigation and transportation systems in developing nations lead to the involuntary resettlement of more than 10 million people, many of whom lose their land and income, the World Bank says in a new report, which reviews the Bank’s experience with resettlement.

The World Bank is very concerned about the global resettlement problem, although projects financed by World Bank loans account for less than 3 percent of involuntary resettlements in developing countries.

Involuntary resettlement has been the unpleasant consequence of modernization in the developed and developing world. The World Bank argues that more needs to be done to help everyone who is involuntarily resettled.

“Resettlement is a highly complex business,” says Lewis T. Preston, President of the World Bank. “I am convinced that with proper planning, much of the hardship and pain associated with involuntary resettlement can be minimized and the incomes of those displaced maintained. This is our goal.”

Building large-scale projects have always created resettlement problems, from the Tennessee Valley dams of the United States to the Aswan Dam of Egypt, but the benefits can be spectacular. For example, the multipurpose Xiaolandgdi Dam under construction in China will create about $500 million annually in economic benefits in irrigation, flood and sediment control, and power. Those benefits will increase up to $900 million a year in the dam’s 30th year. The Xiaolandgdi Dam will protect 103 million people living in the flood plain of the Yellow River Basin. This project is resettling 181,000 people at a cost of $570 million, about a fourth of the cost of building the dam, but just slightly more than the economic benefits in only its first year of operation.

These large-scale infrastructure projects are absolutely necessary, World Bank economists argue. More than two billion people worldwide still lack access to electricity and are forced to use sticks and dung for their energy needs; 1.7 billion lack sewerage systems and 1 billion lack access to clean, piped water, resulting in the deaths of 2-3 million infants and children each year.

On a per capita basis, the rich countries are consuming on average 30 times more energy than the low income developing countries. But the developing countries’ economies are growing fast, especially in East Asia, and population pressures are dramatic in most parts of the developing world, especially the cities. It is inconceivable that these citizens will not be getting more electricity, transport and services, all of which will require investments in infrastructure.

“One can only go so far with small scale, non-disruptive technologies,” says Ismail Serageldin, the World Bank’s Vice President for Environmentally Sustainable Development. “The moment you cross thresholds like urban densities of 400 persons per hectare, you need proper sewerage and sanitation systems connected to treatment plants.”

According to the World Bank report, the key is to minimize resettlement hardship through better designs and to assist the resettled population in restarting their lives.

“We must be compassionate with those resettled, because people are uprooted from their traditional lands and their lifestyles are disrupted,” says Mr. Preston. “Resettlement, which can be devastating, has to be handled with humane concern for those affected.”

Most large-scale resettlement associated with Bank operations occurs in countries in South and East Asia. Africa comes third. Latin American nations have the fewest number of people being involuntarily resettled in the developing world.

Involuntary resettlement continues to be a complicated aspect of development, which must be constantly addressed. Recent estimates indicate that the worldwide displacement toll from about 300 large dams that enter construction every year is between 4.5 to 5.1 million people. Urban development and transportation programs begun each year in the developing world are estimated to displace an additional 7 million people. About 100 Bank-financed projects affecting nearly 700,000 people have been proposed by borrowers and tentatively identified in the 1994 to 1997 pipeline of projects.

In 1993, there were 146 active projects in the Bank’s portfolio that will resettle two million people over about seven years. These projects account for 8 percent of the 1,900 active Bank projects.

In 1980, the World Bank instituted policies to protect people displaced by Bank-funded projects, the first international agency to do so. When the Bank policies have been properly applied by borrowers, there has been a recovery of the livelihoods and lifestyles of the resettled people.

“The Bank has sharply increased its efforts to ensure close compliance to its policies — to avoid resettlement completely, or to reduce its size,” says Mr. Preston. “We and our borrowers haven’t been perfect, but we are committed to safeguarding the rights and livelihoods of those being displaced and the track record shows continuous improvement. We cannot and will not be complacent where people’s fundamental well-being is concerned.”

To ensure that the policies are followed and to develop comprehensive data, the Bank recently sent some 100 teams, with a vast majority including anthropologists and sociologists, to inspect on site development projects which the Bank finances. The teams discovered that 35 percent more people are being displaced on these projects than estimates made earlier by the governments.

“Some governments simply did not know or underestimated the numbers of people scheduled for involuntary resettlement,” says Mr. Serageldin. “In a few cases, we have had loans in which borrowers projected 200-300 people would be resettled, while the final figure turned out to be 12,000 to 15,000.”

Many nations — such as Brazil, Philippines and Turkey — have now adopted Bank policies and guidelines even in projects not supported by the World Bank, thereby helping millions more people.

Major multilateral and bilateral donors have also recently adopted resettlement guidelines similar to the Bank’s — such as the Inter-American Development Bank in 1990 and the Asian Development Bank in 1992. At the request of the Organization for Economic Cooperation and Development (OECD), the Bank provided support in preparing resettlement guidelines. In 1991, development ministers in all OECD countries endorsed similar guidelines for their own aid agencies for projects in the developing world.

“Experience shows that if a government adopts its own (national) policy to reintegrate displaced people into the national economy, resettlement is successful, and not just for Bank-financed projects,” says Mr. Serageldin. “Piecemeal, half-hearted attempts to deal with resettlement by uncommitted governments don’t work..”

/strong>China’s Shuikou Hydropower Dam

The first Bank-assisted project in China involving resettlement to which the Bank’s resettlement policies and guidelines were fully applied was the Shuikou Hydropower Dam project, located on the Min River. It set a model for many subsequent projects with resettlement with which the Bank is assisting in China.

The Shuikou project involved relocating 88 villages belonging to 15 townships in three counties, and large parts of Nanping City, displacing 20,000 households, with about 68,000 rural and urban people.

The Chinese Government invested years of staff time working on the resettlement with the Bank assisting. Planning put the main emphasis on restoring the productive capacity of those being resettled, on bringing new land into cultivation for them, creating jobs or new commercial opportunities, providing new housing with more floor space per capita and new social amenities.

Detailed provisions were included in the project appraisal report and a legal agreement with specific provisions about resettlement was concluded between the Bank and the Chinese Government. The project started in 1987 and the first 1,400 resettlers from the dam’s site moved to new houses by the end of 1988.

By the beginning of 1993, six years into project implementation, about 67,200 people had been moved to similar or better housing, or 98.8 percent of the total. With the housing compensation and materials received — timber, cement and iron — villagers have been able to hire their own contractors and build for themselves new and better housing.

Bread winners from families numbering 28,000 people have gotten new jobs as well.

Moving people only short distances, along with new and better-built schools, have preserved many, even if not all, social ties and family linkages, which have helped to cushion difficulties.

For example, China has adopted an approach based on its national emphasis on employment. Whenever people must be involuntarily resettled, the government commits itself to find work for them first of all, with responsibility delegated to local officials who know the situation best of all. This process has worked very well. (See box on Shuikou Hydropower Dam.)

Before the 1980 policy was adopted, involuntary resettlement in many projects in developing countries in the 1960s and 1970s had been dealt with in an ad hoc manner as a low priority side-effect of major infrastructure works.

This lack of explicit norms, procedures and adequate resources for handling resettlement resulted in adverse effects on the people displaced, on the host populations at relocation sites and on the environment.

Forced resettlement went on without any checks, virtually an unwritten yet accepted general rule, tolerated by governments and overlooked by sponsors of major projects.

The Bank’s involvement in resettlement has:

• Required that governments in countries concerned address resettlement issues;
• Generally led to a significant improvement in the manner in which the resettled are treated as compared to other resettled people in the same country in non-Bank financed projects;
• And in some cases, has resulted in improved legislation on resettlement.

Poor people are often much more adversely affected when the projects do not involve Bank financing.

For example, in one country in 1990, 2,800 people in 500 “squatter” families were scheduled for involuntary resettlement. They were living by a river channel scheduled for widening. Compensation would have been about $35 per household. Because of Bank objections, the government withdrew the project from World Bank financing, leaving the families with only inadequate compensation.

In contrast, a similar project in Indonesia (Semarang Drainage Improvement Program) was part of a Bank-assisted program. It entailed the displacement of 13,000 people in 2,230 families, of whom only 113 had clear legal title to their land. About 1,900 families were eventually relocated. The Bank’s appraisal mission had successfully negotiated the application of Bank policy to this effort. The resettled received, in addition to cash compensation, plots of land, similar in size and in services and infrastructure. Most important, regardless of their former status, all were given title to the new land.

The Bank report lists other countries and agencies that have adopted resettlement policies that parallel those of the Bank, which include:

  • Brazil — The state-run energy company, Electrobras, in 1990, approved resettlement guidelines similar to the Bank’s for the nation’s power sector. These guidelines are intended to be used for all 36 new hydroelectric plants in the 1990-99 government plan, not just the two or three dams co-financed by the Bank. The Brazilian Government agency in charge of approving new development plans has already terminated plans for four projects because they would have required the involuntary resettlement of between 154,000 and 188,000 people.
  • The Philippines — The Philippines Urban Development and Housing Act of 1992 put restrictions on displacement and mandates participation and consultation policies to help those who have to be forcibly resettled. It is one of the few such laws in effect in any country.
  • Turkey — The government passed a clear law regulating resettlement, and Turkey has been open to policy dialogues with the Bank and receptive to improving its existing legal provisions. Because of this formal legal framework and the recent improvements in its application, the government is able to allocate substantial financial resources to resettlement.
  • India — Following negotiations with the Bank, India’s National Thermal Power Corporation (NTPC) adopted a Resettlement and Rehabilitation Policy in 1993 for all its operations, which set an important precedent for that sector. The policy emphasizes the principle of income restoration and guarantees specific entitlements to resettlers, which previously were not provided in displacements caused by NTPC projects.
  • Gujarat State, India — Extensive negotiations between the Bank and the Government of Gujarat over serious problems affecting the implementation of the Narmada Sardar Sarovar project have resulted in significant improvements in Gujarat’s legal regulations for resettlement, formally granting displaced people certain important entitlements. These improved regulations, however, apply only to the specific project and not to similar, on-going projects in Gujarat State.

In terms of the Bank portfolio of projects, there has been an improvement in adherence to the resettlement policies during 1987-1992, compared to pre-1986 projects. And in l993, almost 100 percent of the Bank-financed projects processed complied with Bank policy — to avoid involuntary resettlement whenever feasible or reduce its magnitude. Some significant examples include:

  • Indonesia — The Bank policy produced a workable compromise between the government’s desire for optimum power capacity for the Saguling Dam project and the need to reduce involuntary resettlement among people living near the project. The redesign of the initial engineering proposal lowered dam height from 650 meters to 645 meters, reducing displacement from 90,000 to 55,000 people, with only a small loss of power.
  • Thailand — Re-siting of the Pak Mun Dam from a location that would have displaced more than 20,000 people to an alternative site has reduced displacement to about 4,000 people.
  • Ecuador — The redesign of canal layouts in the Guayas Flood Control Project has lowered displacement from more than 3,000 people to none at all.
  • China — The Shanghai Sewerage Project, by using tunnels rather than surface channels to lay pipes and by re-siting the main pipeline, reduced the anticipated resettlement of 2,700 households to 1,400 households.
  • Cote d’Ivoire (Ivory Coast) — The government’s initial proposal for the Forestry Sector Project, if accepted, would have displaced 100,000 to 200,000 people. Bank-proposed approaches lowered this number to 40,000 people, and set substantively improved standards for their relocation.

World Bank policy now calls for a separate project unit in the country to take charge of assisting people slated for large-scale resettlement in Bank-financed projects.

“For those in charge of the overall project, their main goal is to get the project built,” says Mr. Serageldin. “Because resettlement requires detailed attention to complex social issues, construction project managers often see it as a nuisance. That is why for large numbers of people being resettled there should normally be two separate projects, with separate directors, one with its own budget to help the resettlement.”

Beyond minimizing the number of affected people through better project design, the World Bank wants to ensure more effective attention to resettlement aspects in both project preparation and implementation. The World Bank will therefore increase its own funding of resettlement components, and where these are substantial, will be ready to treat them as separate projects.

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The Bank’s Resettlement Policy

  • Involuntary displacement should be avoided or minimized whenever feasible, because of its disruptive and impoverishing effects.
  • Where displacement is unavoidable, the objective of Bank policy is to assist displaced persons in their efforts to improve former living standards and earning capacity, or at least to restore them. The means to achieve the Bank’s objective consist of preparing and executing resettlement plans as development programs. These resettlement programs are integral parts of project designs.
  • Displaced persons should be: (a) compensated for their losses at replacement cost, (b) given opportunities to share in project benefits, and (c) assisted with the transfer and during the transition period at the relocation site.
  • Moving people in familiar groups can cushion disruptions. Minimizing the distance between departure and relocation sites can facilitate the resettlers’ adaptation to the new socio-cultural and natural environments. The tradeoffs between distance and economic opportunities must be balanced carefully.
  • Resettlers’ participation in planning resettlement should be promoted. The existing social and cultural institutions of resettlers and their hosts should be relied upon in conducting the transfer and re-establishment process.
  • New communities of resettlers should be designed as viable settlement systems equipped with infrastructure and services, able to integrate in the regional economic context.
  • Host communities that receive resettlers should be assisted to overcome possible adverse social and environmental effects from increased population density.
  • Indigenous people, ethnic minorities, pastoralists, and other groups that may have informal customary rights to the land or other resources taken for the project, must be provided with adequate land, infrastructure, and other compensation. The absence of formal legal title to land by such groups should not be grounds for denying them compensation and rehabilitation.

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