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dam-l WBank, dams and reparations/LS
FYI - here is an IRN briefing paper for the April 16 World Bank protest
events in Washington, DC. The author, Aviva Imhof, will represent IRN at
these protests.
When the Rivers Run Dry - The World Bank, Dams and the Quest for Reparations
The World Bank has been the largest single source of funds for large dam
construction worldwide. Under its stated aim of alleviating poverty, it has
promoted and funded dams that have displaced more than 10 million people
from their homes and land, caused severe environmental damage, and pushed
borrowers further into debt. Never hesitant to exact loan repayment in
perpetuity for projects it has funded (even failed projects), the World
Bank has never been forced to pay for the destruction it has caused to
millions of people's lives and the environment.
A growing movement of dam-affected communities from all over the world is
demanding reparations, or retroactive compensation, for the continuing
damage to their lives because of dams which have already been completed.
>From the Maya Achi indigenous people in Guatemala to the people affected by
Pak Mun dam in Thailand, people are demanding justice from the World Bank.
It's time for the Bank to repay its own debts.
The Dam-Builder's Bank
Large dams, whether built for hydropower, flood control, or irrigation,
epitomize the huge infrastructure development projects which have been the
staple of World Bank lending throughout its history. The Bank has provided
more than $60 billion (in 1993 dollars) for 538 large dams in 92 countries,
including many of the world's largest and most controversial projects.
The Bank's portfolio of large dams reads like a primer on the folly of
damming rivers. In case after case the benefits have been far smaller than
promised, and the costs - in terms of money spent, debts incurred,
communities uprooted, fisheries and forests destroyed, and opportunities
lost - have been far greater than imagined. While the Bank claims that its
operations have improved in recent years, projects such as the Lesotho
Highlands Water Project, the Ertan Dam in China and the proposed Nam Theun
2 dam in Laos reveal ongoing social, environmental and economic problems
with its large dam portfolio.
The Business of Poverty Creation
Bank-funded large dams have turned more than ten million men, women and
children into refugees in their own land, including 180,000 people
displaced by the Xiaolangdi dam in China, 70,000 Kuna Indians displaced by
Panama's Bayano Dam, 24,000 Indonesian villagers, some of whom clung to
their rooftops as the waters rose behind Kedung Ombo Dam, and the 80,000
farmers of the Volta River valley in Ghana, forced from their homes by the
Akosombo Dam. These legions of dam oustees have, in the great majority of
cases, been economically, culturally and emotionally devastated. In many
cases once self-sufficient farming families have been reduced to eking out
a living as migrant laborers or slum dwellers.
Despite a policy requiring that those displaced are enabled to at least
regain their former living standards, World Bank reviews cite few instances
where this has occurred to even a small proportion of oustees. A 1994
Bankwide Resettlement Review found only one dam - Khao Laem in Thailand -
out of the many hundreds the Bank has funded, where incomes for all
households rose after resettlement. Yet when interviewed, four-fifths of
the households considered themselves to be worse off than before resettlement.
For the vast majority of dams it has funded, the Bank simply has no data on
the incomes or living standards of displaced people, before or after
resettlement, due to inadequate or non-existent resettlement plans.
Official estimates of the number of oustees have been notoriously low. Even
when a realistic estimate is made of the people displaced by a reservoir,
those evicted to make way for dam-related irrigation canals, transmission
lines and other infrastructure, as well as people without land title, are
often excluded from the total. The 1985 appraisal of the Sardar Sarovar Dam
in India, for example, totally overlooked 140,000 farmers who are estimated
to lose at least some of their land to the project's massive network of
canals.
Indian author Arundhati Roy, writing about resettlement in India, states
"The millions of displaced people don't exist anymore. When history is
written they won't be in it. Not even as statistics. Some of them have
subsequently been displaced three and four times. Once they start rolling,
there's no resting place. The great majority is eventually absorbed into
slums on the periphery of our great cities, where it coalesces into an
immense pool of cheap construction labour."
In addition, people who live downstream of the dam are often forced to
abandon their homes because of loss of fisheries, changes to hydrology
which eliminate seasonal floodplain agriculture, or of other benefits
previously provided by the undammed river. For example, 11,000 people were
flooded out by the Manantali Dam in Mali, but half a million farmers
downstream are suffering the consequences of the changed flow regime of the
Senegal River.
Environmental Destruction
World Bank-funded dams are responsible for the submergence of tens of
thousands of square kilometers of forests, the decimation of countless
fisheries, the opening of remote areas for resource extraction, and the
loss of floodplain, wetland and estuarine habitat. Tucurui and Balbina Dams
together drowned 6,400 square kilometers of rainforest in the Brazilian
Amazon. Akosombo flooded more land than any other dam in the world, 8,500
square kilometers, around four percent of the area of Ghana. Bank-funded
dams and irrigation schemes have also led to explosions in the incidence of
waterborne diseases, especially schistosomiasis and malaria.
Because of its location at the mouth of the Mun River, the 136 MW Pak Mun
Dam, funded by the World Bank in 1991, blocks fish migration for the entire
Mun-Chi river system, the most important in Thailand’s northeast. The
project also led to the submergence of rapids important for fish breeding.
As a result, 169 fish species are no longer found upstream of the dam, and
fish catches have decreased by 60 to 80% from pre-dam levels, affecting
many thousands of people who depended on fisheries for their livelihood.
World Bank support for a project may cause environmental destruction even
before the project is funded or built. In the case of the proposed Nam
Theun 2 Dam in Laos, for which the World Bank is considering a political
risk guarantee and other assistance, more than one million cubic meters of
timber on the biologically significant Nakai Plateau has been logged to
clear the reservoir area even though the dam may never be built. The World
Bank now justifies its support for the project on the basis of purported
social and environmental benefits, claiming that the Nakai Plateau is so
degraded that it is not worth saving, and that the dam should be built to
provide revenue to protect the watershed area.
Economic Nightmares
World Bank dam projects have also performed poorly in economic and
technical terms. A 1996 World Bank investigation found that construction
cost overruns averaged 30 percent on 70 hydropower dams funded by the Bank
since the 1960s. Another World Bank study reveals that, of 80 hydro
projects completed in the 1970s and 1980s, three-quarters had costs in
excess of budget. On almost one-third of the projects studied, costs
exceeded estimates by 50 per cent or more.
The collapse of poorly designed tunnels during the construction of
Guatemala's Chixoy Dam contributed to a nine-year delay and cost overruns
of 250 percent. In 1990 the country suffered a series of blackouts because
of a lack of water at the dam. Two years later, another power shortage
because of low rainfall resulted in electricity rationing for more than a
month, costing the country $2 million a day in lost industrial production.
The final cost of Chixoy - $1.2 billion, more than five times the original
estimate - represented nearly 40 per cent of Guatemala's total external
debt in 1988.
World Bank power demand estimates are invariably exaggerated, resulting in
excess generating capacity when the project comes on line. The $3.4 billion
Ertan Dam in China garnered the World Bank's largest-ever project financing
package of $1.2 billion. Recent reports have revealed that project has been
losing more than $2.4 million a day since it first started producing power
in August 1998 due to lack of demand. Due to the project's high costs and
changes in China's power industry, Ertan's electricity is significantly
more expensive than that produced by smaller power stations which have
sprung up since ground was first broken for Ertan in 1991, making its power
unattractive for consumers.
Corruption has been a stalwart of World Bank-funded dams. Between $350 and
$500 million dollars were lost to corruption during the implementation of
the Chixoy project. The Yacyreta Dam on the Paraná River, between Argentina
and Paraguay, became known as a 'monument to corruption' as the cost of the
project ballooned from an original estimate of $1.6 billion to more than $8
billion. The recent corruption scandal involving the Chief Executive of the
Lesotho Highlands Water Project and 12 of the biggest dam-building
companies in the world is not unusual in a World Bank-funded dam project.
What is unusual is that they were caught. (See box for further details).
We Shall Not Be Moved
World Bank lending for dams peaked in the late 1970s and early 1980s at a
level of more than $2 billion a year (1993 dollars). Since the mid-1990s
the World Bank's lending for large dams has declined significantly. From
1995-1999, the World Bank and its private sector International Finance
Corporation made 14 dam-related loans amounting to $2.3 billion. In the
pipeline are five more: two projects involving large dams in China, an
energy sector loan promoting hydropower development in Nepal, and political
risk guarantees and IFC loans for Bujugali Falls Dam in Uganda and Nam
Theun 2 Dam in Laos. (See box for further details). It is no accident that
three of these projects are in China and Laos, countries where opposition
movements are not tolerated by the government.
A major reason for decline in Bank funding has been the struggle by
anti-dam movements across the world. A milestone was reached when the World
Bank was forced to pull out of the Narmada Dam project in India in 1993.
The Sardar Sarovar project became the catalyst for a huge movement of
affected villagers, Indian grassroots activists and international groups
questioning the World Bank's involvement in large dam projects. Another
watershed came in 1995, when the World Bank was forced by citizen action to
withdraw from the Arun III Dam in Nepal. Since this time, the Bank has
funded less dams than ever before.
The Bank's decline in lending for large dams is a partial victory for the
anti-dam movement. But the communities who have been affected by
Bank-funded dams have nothing to celebrate. Neither do those whose lives
will be destroyed by future Bank projects. In 1994, 2154 organizations in
44 countries signed the Manibeli Declaration, calling for a moratorium on
Bank lending for large dams and for the Bank to pay reparations to
dam-affected peoples. This call was renewed at the first international
meeting of dam-affected people in Curitiba, Brazil, in 1997.
BOX:
A Debt to the Dammed
The World Bank owes a debt to the many millions of people whose lives it
has destroyed through the financing and construction of large dams. The
1994 Manibeli Declaration calls on the World Bank to establish a fund to
provide reparations to the people forcibly evicted from their homes and
lands by Bank-funded large dams. The fund would be administered by a
transparent and accountable institution completely independent of the Bank
and should include assistance for communities to prepare reparations claims.
The need for reparations for those who have suffered past harm is a
well-founded legal principle accepted by the international community.
Precedents include reparations for damages from wars, for victims of
torture, and for Japanese-American internments during WWII. These
reparations imply that those responsible for damages or suffering have an
ongoing responsibility to right the wrongs they committed, and that the
victims of these actions have a permanent right to achieve redress.
Calls for dam reparations include monetary as well as non-monetary
measures, such as dam decommissioning, official recognition of injustices
committed and restoration of ecosystems. Communities affected by Chixoy Dam
in Guatemala and Pak Mun Dam in Thailand are engaged in active campaigns to
demand reparations from the World Bank.
Chixoy Dam, Guatemala
In the late 1970s, the World Bank teamed up with a brutal dictatorship in
Guatemala known to be waging a war of annihilation against Maya
communities. The village of Rio Negro stood in the way of the Bank's plans
to construct the Chixoy Dam. After villages refused to relocate from their
ancestral lands in 1982, the Bank averted its eyes when the army and
paramilitary massacred some 400 Maya, mostly women and children.
Despite sending numerous missions to oversee the project during
construction, the Bank kept silent about the massacre until 1996, when
human rights groups revealed this horror story to the world. The Bank's own
internal investigation subsequently absolved it of responsibility. Further,
Bank officials in Guatemala now consider the issue to have been dealt with
because 'almost all relocated communities have reached the level they had
in 1976 [when relocation began] or are about to reach it.' In other words,
although the massacre survivors have suffered 20 years of extreme
deprivation, terror and murder of their loved ones, the entities which
caused their plight believe that their responsibility is over because they
believe they have 'helped' the survivors claw themselves back to the
standard of living they had 20 years ago. The demands of the survivors of
the massacres include replacement land of the same quality and quantity
that they had before, the construction of a monument to commemorate the 400
people massacred, and bringing to justice those responsible.
Pak Mun Dam, Thailand
Communities affected by Pak Mun Dam in Thailand have been engaged in a
struggle for reparations since the World Bank-funded dam was completed in
1994. As a direct result of the dam, more than 25,000 people have been
affected by drastic reductions in fish populations upstream of the dam
site, and other changes to their livelihoods. Six thousand families have
received some compensation for loss of fisheries during the three-year
construction period, but it is not enough.
For more than a year, 5,000 villagers have been occupying the Pak Mun Dam
site and intend to stay until their demands are met. Villagers are
demanding that the World Bank and the Thai government remove the dam and
restore the river, thereby allowing the fisheries to recover. There is
evidence to suggest that removing the dam would be cheaper than adequately
compensating the villagers for their losses.
Odious Debts
There is also a case to be made for cancellation of World Bank debts owed
for large dam projects in which the economic, environmental and social
costs are found to outweigh the realized benefits. Two examplse where the
case for debt cancellation is especially strong are Chixoy Dam and
Yacyreta, where the Bank lent to notoriously corrupt and despotic military
regimes, all the while making it clear that it was prepared to extend
further loans to cover the huge cost overruns.
SIDEBARS:
Business as Usual: Corruption in Lesotho
In November 1999, ten companies and two consortia were summoned to appear
in a Lesotho court on charges of bribing Masupha Sole, the former director
of the Lesotho Highlands Development Authority. Sole is accused of
accepting around $2 million in bribes from major dam-building firms such as
ABB (Swedish/Swiss), Acres International (Canadian), Impregilo (Italian),
Lahmeyer (German) and Sogreah (French).
The accused companies worked on the Katse Dam, the first of five huge dams
planned for the Lesotho Highlands Water Project. Katse is now completed and
work has started on a second dam, Mohale. Widespread corruption on the
project is thought to be one reason that the social fund intended to help
affected communities has accomplished virtually nothing.
The World Bank has provided both fiscal management and loans for the
Lesotho project. World Bank guidelines require it to debar companies from
future contracts if the firm is found to have been corrupt in 'competing
for, or in executing, a bank-financed contract.' However, the Bank has
announced that it is planning to take sanctions only against companies that
had direct contracts with it. Companies which paid bribes on other
project-related contracts would thus be exempt.
NGOs and labor groups have called for all the dam-building companies
charged with corruption to be suspended from receiving World Bank contracts
if they are found guilty. They argue that the Bank's responsibilities
should not be restricted to individual contracts because of the Bank's role
in getting the project off the ground, and as its fiscal manager. The World
Bank appears to be interpreting its procurement guidelines narrowly to
avoid applying them to some of the biggest dam-building companies in the
world, companies with which they do substantial business.
Uganda: World Bank Proposes Corporate Welfare for World's Largest Power
Producer
The U.S.-based AES corporation, the largest independent power producer in
the world with assets of $11 billion, is currently in line to receive a
partial-risk guarantee from the International Development Association (IDA)
and loans from the International Finance Corporation (IFC) to construct a
US$520-million dam near Bujagali Falls on the Nile. The dam would drown the
spectacular Bujagali Falls and damage the riverine ecosystem. Worse, the
project's power would not meet the needs of the vast majority of the
population.
The IFC is currently appraising the project, and is expected to make a
decision by the end of 2000. The project is being used as a "carrot" in the
World Bank's efforts to privatize Uganda's energy sector.
In addition to affecting the livelihoods of about 6,800 people, the
reservoir is expected to increase water-borne diseases like malaria and
schistosomiasis. Fisheries will be permanently affected. The reservoir will
submerge highly productive agricultural land on the river's banks as well
as islands of extreme biodiversity. Displaced peoples will increase the
stress on land near the reservoir, resulting in further watershed
degradation, deforestation and a loss in soil productivity. The project
will also drown Bujagali Falls, a spectacular series of cascading rapids
which Ugandans consider a national treasure. Tourism around Bujagali Falls
offers great economic potential for Uganda.
Local environmentalists point out that this project will do nothing to help
Uganda's poor majority. 95% of the population is not connected to the
national grid, and most could not afford hydropower even if they were. NGOs
are pressing for a sustainable fuelwood program as well as a solar
photovoltaic program, which could be modeled on Kenya's highly successful
experiences. Efficiency measures could reduce wastage in the existing
system, which is estimated to have power losses of up to 40%.
Activists believe a commitment to big hydropower now may preclude Uganda
from pursuing such a path, and are convinced it will come at the expense of
the rural poor, as have all of Africa's large dams.
For further information, contact:
Aviva Imhof
International Rivers Network
1847 Berkeley Way
Berkeley CA 94703
Tel: 510.848.1155
Fax: 510.666.0622
aviva@irn.org
www.irn.org
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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