APPENDIX 9
Memorandum from International Rivers Network
1. International Rivers Network is a 12-year-old
organization that works to protect rivers and watersheds from
ill-conceived river development schemes. We work closely with
project-affected people in more than 80 countries in the world.
Together with a number of other groups internationally, we have
been researching the environmental and developmental impacts of
the projects and programmes backed by OECD export credit and investment
insurance guarantee agencies (ECAs). We greatly welcome your Committee's
invitation to NGOs and others in the development community to
submit memoranda on the future role and status of the ECGD in
order to feed into the review of the ECGD announced by the Secretary
of State for Trade and Industry in late July.
2. The ECGD's lack of mandatory environmental
and development standards is of great concern to us. While agencies
such as the ECGD continue to operate without such standards, there
is strong pressure on other national ECAs to resist taking action
to improve their own standards. The result is a race to the bottom
that penalises "best practice" and erodes public confidence
in the stated commitment of governments to sustainable development.
We believe that the problem will remain unaddressed so long as
the OECD fails to require its ECAs to adopt shared, common standards
and procedures aimed at ensuring rigorous, comprehensive and transparent
environmental and development screening and assessment of those
projects and products for which ECA support is sought.
3. The case for such reform is outlined
in the documentation below and attached[6],
which we would like to submit to the Committee for its consideration.
We very much hope that the Committee will support the call for
common international standards and press for the ECGD to take
a lead in adopting such standards.
BACKGROUND INFORMATION
4. One example of a large-scale water project
that is exacerbating the problems it is intended to solve is the
Lesotho Highlands Water Project (LHWP) in Southern Africa. This
project had export-credit agency support from Hermes, COFACE,
SACCE and ECGD (their total contribution according to the World
Bank's Staff Appraisal Report was US$411 million), plus World
Bank support.
5. The project eventually will include five
large dams, and the World Bank has provided critical funding for
two of them thus far—the 182-metre-high Katse Dam, the highest
ever built in Africa, and the 145-metre Mohale Dam, which will
flood some of the most fertile land in Lesotho, where agricultural
land is extremely scarce and food security a serious issue.
6. In September 1998, this massive water-transfer
scheme, which pipes water from Lesotho to South Africa's central
urban heartland around Johannesburg, helped set off what one South
African ecologist calls "the first water war" in the
arid region. In September, South African troops invaded the tiny
mountain kingdom of Lesotho. Although the military intervention
was ostensibly about restoring order in the face of public protests,
a major factor behind the conflict was protecting the Lesotho
Highlands Water Project—South Africa's largest investment
in the region. When the shooting was over, 17 people had been
killed near the project's Katse Dam and many more people died
in the capital, which was left in ruins by the fighting. A recent
news story in the South African newspaper "The Star"
states that "protection of the dam and its pipeline supplying
[the region] with water was a top priority of the occupation force."
7. The project has been fraught with social
problems from the beginning. Local people have lost their fields,
access to water and often their homes. Their problems are likely
to be exacerbated by the project's environmental impacts, as well
as Lesotho's own growing water scarcity. Ironically, in the not-too-distant
future, water experts expect Lesotho itself to suffer severe water
shortages. Having the project's huge reservoirs in its midst will
be a cruel taunt, as these waters will no longer belong to Lesotho.
8. As with most large-scale projects involving
forced resettlement, the people affected by the project are not
getting the help they need in re-establishing their livelihoods.
Widespread corruption on the project is thought to be one reason
that a social fund intended to help affected communities undertake
development projects has accomplished virtually nothing. An ongoing
corruption scandal involving the project has revealed that a "who's
who" of the dam-building industry slipped some $2 million
in bribes to the project's CEO for 10 years, ending in 1998. In
Lesotho, as elsewhere, corruption, environmental degradation and
increasing poverty go hand-in-hand.
9. Lesotho NGOs representing dam-affected
people believe the corruption on the project extends beyond this
one top official. In a September 15 1999 letter to the Washington
Post, they wrote about problems plaguing the project's development
fund, intended to help those who lost lands and livelihoods to
the project. "The fund has been and continues to be a tool
of opportunistic politicians," wrote Motseoa Senyane of Transformation
Resource Centre and Thabang Kholumo of the Highlands Church Solidarity
and Action Centre. "Although the committee designated to
select projects to be supported by the social fund has not met
even once yet, money from the fund has been used to support ill-conceived
projects built by workers hired according to political party affiliation.
In Lesotho, we see the same stretch of road repaired; torn up
the next week; repaired again the following week; and then torn
up once more at the end of the month."
10. The fragile mountain environment of
Lesotho has also suffered from the project, which was initiated
without critical environmental studies on erosion and downstream
impacts, despite the project's massive-scale water diversions.
Fragile ecosystems, unique species and the livelihoods of downstream
farmers are now at risk.
11. Will the project at least meet the needs
of South Africa's poor black population, which continues to suffer
from a highly inequitable water distribution system dating from
the days of apartheid? The biggest obstacle to providing South
Africa's poor with water is not so much a question of supply,
but of water equity. Low-income black people in the townships
near Johannesburg are subjected to often-indiscriminate water
cutoffs, inadequate taps (usually just one for every 50 people
in a yard), inadequate pressure, and leaky apartheid-era pipes.
Large, expensive water projects nearly always have a "trickle-up"
rather than trickle-down effect: only the rich can afford the
water, but the water bill rate hikes affect the poor disproportionately.
While all Johannesburg residents saw water bills rise 35 per cent
from 1995-98, lowest-tier consumption costs rose 55 per cent.
International Rivers Network
September 1999
6 Not printed. Back
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