A leaked World Bank
Inspection Panel [1] report heavily criticises the Bank’s own forest
management project in Cambodia for breaking internal safeguards,
ignoring local communities and failing to reduce poverty, says Global
Witness, a non-partisan international
non-governmental organisation --co-nominated
for the 2003 Nobel Peace Prize for its work in uncovering how diamonds
have funded civil wars across Africa-- focused on the links between
the exploitation of natural resources and the funding of conflict
and corruption.
Cambodia’s forests
covered 73 % of the country in 1971, but were decimated in the wake
of the civil war by illegal and unsustainable logging. In the early
1990s the Cambodian government secretly awarded 32 logging concessions
areas to private companies, many of them foreign-owned. Most of
these firms went on to engage in illegal and unsustainable logging
in pursuit of short-term profits. The rationale for the concession
system was a steady source of revenue that could be used for Cambodia’s
development; yet between 1994 and 2000
the government collected only $92 million in timber royalties. Over
the same period companies, politicians and the military made enormous
profits through illegal logging.
An Asian Development
Bank review in 2000 described this concession regime as ‘a total
system failure’. That same year however the World Bank launched
a $5 million Forest Concession Management and Control Pilot Project
(FCMCPP) aimed at demonstrating that the concession system could
work. The project focused on helping the concessionaires meet government
requirements for new sustainable forest management plans (SFMPs)
and environmental and social impact assessments (ESIAs) as a prerequisite
for further logging. For the project to realise its objectives,
the Bank needed the concession system and at least some of the companies
to remain in place. It was in this context that the FCMCPP
recommended the Cambodian government accept the SFMPs and ESIAs
of six concessionaires in 2004. All
six firms had broken the law or the terms of their contracts. Some
were a front for the interests of relatives of senior officials.
Local communities lodged
a complaint with the Bank’s Inspection Panel in 2005, after it became
clear the Bank’s project was exacerbating, not improving the situation.
These communities saw the project as promoting the interests
of companies that had already damaged their livelihoods. In
the event, the Panel’s findings do not condemn the focus on the
concession system per se, but do conclude that the project “did
not seem to take on the key objective of using the potential of
forests to reduce poverty”.
The complaint to the
Panel also claimed the project had several other serious flaws in
its planning and implementation. According to Simon Taylor, Global
Witness Director: “The findings of the Inspection Panel reveal the
extent to which the Bank was prepared to break its own regulations
in pursuit of project success.’’
In a damning report,
the Panel finds the Bank overrode several of its own safeguard policies
in several areas – its comments are quoted below.
-
Consultation
in development of management plans. The project
allowed concession companies to take charge of consultations
with communities over the future of forest use. “The idea
that the concession holders would manage community consultations
or resource assessments is a very serious flaw, especially
given that the forest concessions were exploiting a resource
which rural poor people…relied upon for an important part
of their livelihoods.”
-
Environmental
Assessments. The Bank misclassified areas of forest
– allowing areas of high ecological value to be used for commercial
logging. “There is no doubt that the Prey Long forest merits
consideration as a forest of high ecological value, and this
should have been obvious to Bank Staff during both the design
and implementation stages of the Project.”
-
Indigenous
People. Cambodia’s indigenous people mainly live in the North
and Northeastern parts of the country – the same areas which
constitute the heart of Cambodia’s logging concession system.
Bank guidelines state for an investment project affecting
Indigenous People, Indigenous Peoples Development Plans should
be prepared to ensure they benefit from development investment.
This never happened. “Had they been developed, many of the
problems that have afflicted the Project would have been recognised
and might have been corrected.”
-
Cultural
and Spiritual Property. Bank guidelines clearly seek
to conserve, not eliminate areas of cultural importance. Yet
the project left the dubious concession companies to identify
areas of cultural and spiritual importance within their cutting
areas. In Cambodia, these included Spirit Forests and areas
of archaeological importance. The Panel found this was “not
consistent” with Bank safeguards.
-
Social
Impacts. The Panel found that the lack of social assessment
specific to this project seriously denigrated the ability
of the bank to comply with its own operational policies. For
example, there was no acknowledgement from the Bank that resin
tree harvesting by concession companies severely harmed the
livelihoods of local populations. Resin
tapped from various species of dipterocarp tree is
an economically valuable commodity both within Cambodia and
abroad. Recent studies estimate that at least 100,000 rural
Cambodians derive part of their income from resin-tapping.
The Panel noted Bank Management
were frequently made aware of the issue from many sources,
concluding: “it is amply clear not only that the Bank should
have been aware of the importance of resin tapping to forest
dependent communities, and the harm that illegal cutting of
resins was doing to those communities, but also that the Bank
was aware of these issues.”
-
Endorsement
of sub-standard management plans for six concession companies.
“The Panel considers that SFMPs and ESIAs were deficient
in almost all regards from process to content.”
While Global Witness
welcomes Panel findings showing the deeply flawed nature of the
project, the question they are now asking is what is the Bank going
to do about it?
Paul Wolfowitz has
stated how important the Panel is for monitoring Bank performance
and this latest report could be seen as a test-case. According to
Director Simon Taylor: ‘If the Bank is serious it needs to ensure
that those responsible for this debacle are held accountable and
that other forestry projects in countries such as Democratic Republic
of Congo are not recycling the same flawed approach. More broadly
the Bank has to rethink the way it operates in highly corrupt environments
such as Cambodia so that its efforts benefit the poor rather than
local elites and dubious private companies.’
Since the launch of
the Inspection Panel investigation the Bank has withdrawn its support
of the logging concession system and its operators, advocating a
range of alternative approaches to forest management with greater
emphasis on the role of local communities.
“This belated u-turn
on forest sector policy in Cambodia deserves to be welcomed, but
we have yet to see these words turned into reality on the ground.
We now need to see the Bank to put its political influence and in-house
capacity behind a concerted drive to make sure that this more appropriate
package of measures is fully implemented’’, said Taylor.
[1] The World Bank’s
Inspection Panel was created in 1993 to
increase the accountability of World Bank lending and to provide
local people with a forum of last resort to enforce their rights
under Bank policies and loan conditions.
By Eleanor
Nichol, Global Witness, e-mail:
