Memorandum submitted by the Rainforest
Foundation UK
INTRODUCTION
1. This evidence presents a specific example,
concerning World Bank interventions in the Democratic Republic
of Congo (DRC) which is directly relevant to the Select Committee's
interest in the World Bank's relationship with DFID, other donors
and stakeholders. The evidence demonstrates the way in which the
Bank, as it functions at present, is not delivering on the Millennium
Development Goals and is not contributing to the furtherance of
other DFID priorities such as good governance or tackling climate
change.
2. The evidence is of particular significance
at present as it concerns DRC, currently the 10th biggest recipient
of British bilateral aid and, more widely, the Congo Basin, a
region in which the UK government has expressed a particular interest
and to which, earlier this year, it committed £50 million
of its £800 million Environmental Transformation Fund.
BACKGROUND TO
THE RAINFOREST
FOUNDATION
3. The mission of the Rainforest Foundation
(RF) is to support indigenous peoples and traditional populations
of the world's rainforests in their efforts to protect their environment
and fulfil their rights. In practice, this often involves assisting
forest-dependent communities to secure, through non-violent and
legal means, rights to tenure over forest land and resources.
We presently support initiatives in Cameroon, the Democratic Republic
of Congo, the Republic of Congo, Gabon, Colombia, and Peru. We
have been working with local partners in the Democratic Republic
of Congo since 2000.
THE WORLD
BANK IN
THE DEMOCRATIC
REPUBLIC OF
CONGO
4. For a detailed explanation of the World
Bank's role in the DRC between 2002 and 2005, please refer to
the Rainforest Foundation's written evidence submitted to this
committee on 18 October 2005.
5. Since the submission of the 2005 evidence,
the World Bank Inspection Panel has prepared a report on the Bank's
interventions in the forest sector in DRC (Report attached as
Annex I and II). The report was prepared in response to a Request
for Inspection submitted by 12 Congolese organisations working
for and with Pygmy people, concerned about the impact of Bank-promoted
development of Congo's forest sector on the lives and livelihoods
of forest peoples.[113]
6. The Panel's report highlights a number
of serious failings in the Bank's interventions in DRC, including:
(a) Failure to comply with internal Bank
policies on: Indigenous Peoples (OD 4.20); Cultural Property,
(OP 11.03); Environmental Assessment (OP 4.01); Natural Habitats
(OP 4.04) and serious inadequacies in complying with its overarching
objective; that of Poverty Reduction (OD 4.15).
(b) Effectively misleading the Congolese
government at the start of Bank engagement in the forest sector
by overestimating the export revenue from logging concessions,
thus encouraging the government to look to industrial timber exploitation
as a source of significant revenue.
(c) Basic errors in the development of the
projects, such as that fact that the project documents did not
identify the existence of Pygmy peoples in the areas affected
by the project and made no provision to identify or include them
in project planning.
(d) No development of an Indigenous Peoples'
Development Plan as required under OP 4.20.
(e) "Downgrading" of projects to
lower levels of potential environmental risk, thus reducing the
level of environmental assessment required, and then failing to
carry out environmental and social impact assessments before the
projects started.
(f) Weak management, for example when it
apparently failed to "make timely follow up efforts at a
sufficiently high level to ensure necessary action in response
to its findings".
7. The Bank Board will be considering the
Panel report and the Bank Management Response in early November.
DFID AND THE
DRC
8. One of the five key components in DFID's
programme in the DRC is "To improve the management of the
country's rich natural resources to benefit all its people".
As part of that programme, we welcome DFID's initiative on the
Round Table on alternatives to industrial logging and their support
for a number of natural resources-focussed initiatives with UK
NGOs, including the Rainforest Foundation UK.
9. One of the very few positive developments
identified by the Bank Inspection Panel concerning DRC's forests
is the mapping of indigenous rainforest lands, which is implemented
by the Rainforest Foundation and local Civil Society Organisations
(see p 61of the Inspection Panel report). The report notes that
"the Panel considers that these mapping exercises are of
great value as a step toward recognition of the rights and interests
of Pygmy people in the forests". This work is funded by DFID's
Civil Society Challenge Fund.
IMPLICATIONS OF
THE DRC CASE
FOR THE
RELATIONSHIP BETWEEN
DFID AND THE
WORLD BANK
10. In relation to the specific areas of
interest outlined by the Committee, the Rainforest Foundation
believes that this case demonstrates the following.
11. Whilst the Bank's overall approach in
this case has been seriously flawed, DFID has, through its bilateral
programme, supported valuable interventions, consistent with its
Development Policy.
12. Millennium Development Goals:
In this case, Bank actions have potentially seriously hindered
progress towards achievement of the MDGs, particularly Goals 1,
the eradication of extreme poverty and hunger, and 7, ensuring
environmental sustainability.[114].
13. Effectiveness of the World Bank
as a mechanism for achieving DFID goals on climate change:
the Bank's interventions in the forest sector in DRC have effectively
laid the groundwork for further deforestation in the Congo Basin
region, thus directly contradicting DFID and the UK government's
stated aims in relation to climate change.[115]
14. Levers of change and influence open
to donor states: In 2005, the Rainforest Foundation made a
detailed submission to this committee on the Bank's involvement
in the DRC forest sector and also briefed the UK Executive Director.
Despite having been informed of the concerns which have now been
reiterated by the Inspection Panel, the Bank's Board took no substantive
action and approved financing for the project that has now been
so heavily criticised. This raises the question as to how accountability
mechanisms between the UK ED and DFID are working: the Bank's
actions in this case are directly contradicting DFID's own policy
commitments and the Bank's internal safeguards and yet the UK's
Executive Director did not appear to take this into account.
15. DFID's capacity to effect political
change in corrupt or weak administrations through World Bank funding:
In this case, Bank advice has led directly to poor decision making
and has created, with the emphasis on industrial logging and a
flawed "concession conversion" process, a climate in
which corruption and poor governance is positively encouraged[116]
CONCLUSIONS
16. In this specific case, there are clear
failures of Bank management which have directly potentially harmed
some of the poorest people in the DRC, one of the world's most
troubled and poorest countries.
17. Of particular significance, we believe,
is the Inspection Panel's comment that "the financing of
policy and institutional reforms in a sensitive sector like the
forests of DRC, and related advice and technical assistance, can
lead to highly significant environmental and social impacts, even
if it does not involve direct financing of the mechanical and
organizational tools for industrial logging".
18. In such circumstances, we feel that
unless the Bank itself makes significant changes in its approach
and unless the UK government plays a stronger role in calling
Bank management and staff to account, DFID and the UK government
will not be able to achieve their goals through the mechanism
of the World Bank, and may even undermine pursuit of those goals
through the DFID bilateral programme.
KEY QUESTIONS
THAT THE
COMMITTEE MAY
WISH TO
POSE
What steps does the UK Executive Director to the
World Bank take to ensure that Bank staff have correctly "triggered"
the relevant safeguard policies in proposed projects and programmes,
and to then ensure that triggered safeguards are properly implemented?
As there appears in this case to have been a clear
failure of advice to the UK Executive Director, and even though
warnings were provided independently by NGOs to the Executive
Director of the likely adverse consequences of project approval
before it was approved, can the Secretary of State account for
how there was such a failure of DFID advice and the projects were
approved, with the support of the UK Executive Director?
What role do DFID's advisors play in scrutinising
proposed Bank projects and programmes and in briefing the UK Executive
Director on possible concerns over these projects?
What criteria does the UK Executive Director to
the World Bank use to assess the likely contribution of proposed
Bank projects and programmes to the achievement of the Millennium
Development Goals?
What steps is DFID taking to ensure that its expertise
in natural resources issues is brought to bear in post-conflict
countries that are subject to major World Bank interventions?
What steps will DFID take to ensure that the findings
and recommendations of the Inspection Panel report on the Democratic
Republic of Congo will be taken into account in future Bank interventions
in the DRC and in the natural resources sector more generally
October 2007
113 For the Request for Inspection, see http://siteresources.worldbank.org/EXTINSPECTIONPANEL/Resources/RequestforInspectionEnglish.pdf. Back
114
"The Panel finds that there is a possibility that the Project
in its present form, may not contribute significantly to alleviating
poverty of the forest people, ... , and may instead contribute
to adverse impacts on poverty" Inspection Panel report, executive
summary, page xix and "The Panel notes that there is a real
danger that the highest quality forests will be depleted and valuable
fauna exhausted with little benefit to local populations, or even
to the general population in the country" Inspection Panel
report, p 130. Back
115
"In its investigation, the Panel noted that when the Bank
initially became engaged in the DRC and decided to support work
in the forest sector, it provided estimates of export revenue
from loggin concession that turned out to be much too high. This
had a significant effect, for it encouraged a focus on reform
of the forest concession system at the expense of pursuing sustainable
use of forests, the potential for community forests, and conservation"
Inspection Panel report, p 130. Back
116
For example, concerning the Concession Review Process, the Inspection
Panel report expresses concern that the identification of Commission
members "may legitimize a process under which the more powerful
members of the commission would take decisions that could run
contrary to the interests of locally-affected people". Inspection
Panel Report Executive Summary, p xxxi. Back
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