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20 Jun 2016

Natalie Bridgeman Fields & Siddharth Mohansingh Akali, Accountability Counsel

Rejecting the World Bank’s false choice between rights & development

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In April, World Bank President Jim Yong Kim gave a talk in New York where he addressed development-induced environmental and human rights abuses. While referring to such abuses, President Kim reasoned “[y]ou cannot do the kind of work we are trying to do and not have some of these incidents happen.” Although he framed rights violations as regrettable, President Kim’s implication -- that human rights violations and loss of life are sometimes an inevitable part of achieving development -- is false. Rights abuses are often a choice to contravene the Bank’s own environmental and social safeguard policies and accountability frameworks.  President Kim’s statements appear to condone this false choice between rights and development and undermine the Bank’s frameworks.

Civil society organizations (CSOs) around the world took note of President Kim’s recent remarks. Over 300 organizations from around the world sent a letter to President Kim rejecting his statements, particularly around the impacts of large dams, and calling for his apology. The World Bank responded to the civil society letter immediately. CSOs promptly replied in a public letter to President Kim’s office, and pointed out that the Bank’s response did not correct falsehoods about large dams in President Kim’s speech, nor did it acknowledge anything wrong with the rights versus development dichotomy that the remarks implied.

Civil society, including our organization, responded en masse to President Kim’s speech, because we are seeing the World Bank constantly making decisions that needlessly pit rights against development and creating a legacy of abusive and damaging projects for itself. The CSOs’ letters are part of a growing campaign calling the Bank’s legitimacy and credibility into question. Such a coordinated campaign, like civil society campaigns in past decades, could impact the Bank’s ability to operate if donor countries withhold public funding as a result.

The Problem? The Bank Ignores its Safeguards and Accountability Mechanisms

The main issue with President Kim’s comments are that it risks sending a message to Bank staff and borrowers that human rights violations can sometimes be an acceptable cost of development. As lawyers for people harmed by World Bank projects, we see the damage such thinking causes. The International Consortium of Investigative Journalists has documented that Bank-funded projects have “physically or economically displaced an estimated 3.4 million people” in the last decade, and “has regularly failed to live up to its own policies for protecting people harmed by projects it finances.” And there are many recent examples of the Bank ignoring findings of its own accountability mechanisms.

President Kim’s impugned words in New York suggest that he not only knows about these violations of Bank policies, but that he permits them as a cost of doing business. As a result, communities are trying to hold the Bank accountable for human rights and environmental abuses in other ways. For example, fishing communities and farmers in Gujrat, India are challenging the Bank’s purported legal immunity in U.S. courts with the help of lawyers from EarthRights International.

Rebalancing of Power Between Civil Society and the Bank is Imminent

In addition to legal advocacy, CSOs are engaging in policy advocacy with elected representatives in donor countries who can influence Bank funding. History shows that when the Bank acts with impunity a rebalancing toward accountability occurs. President Kim should become a quick study of that history. The last few times the Bank had a crisis of legitimacy in the 1980s and early 1990s, due to public outcry about projects like the Narmada dam in India and Polonoroeste Project in Brazil, activists around the world pushed the U.S. Government to threaten to withholding funding for the Bank until safeguard and accountability policies were adopted. However, today, as numerous examples from around the world demonstrate, the safeguard policies and accountability mechanisms, which were extracted from the Bank as conditions for public funding, are not in operation as promised. Instead of addressing systemic issues and improving adherence to existing safeguards, the Bank is instead trying to build more flexibility into its environmental and social rules during a review of its safeguards.

President Kim’s recent words, in the context of the Bank’s established history of environmental and human rights violations, are forcing CSOs to raise these issues just as the Bank is going to its donors for increases in its public funding. As history shows, engagement from donor countries to require strong implementation of environmental and social safeguards as a condition of future funding is entirely plausible. Certainly, some U.S. legislators are keen to protect these vital U.S. interests. For example, as a sign of things to come, in the Bank’s current safeguards review, members of the U.S. Senate Foreign Relations Committee have reminded the U.S. Treasury to ensure the Bank follows “strong mandatory and legally-binding safeguards.”

Next Steps for the Bank and President Kim

To avert a larger crisis, the Bank can start by listening to and adopting feedback regarding improvements needed to its existing safeguards. On the accountability front, the Bank should adopt three reforms: (1) address the concerns raised by its accountability mechanisms rather than ignoring them; (2) implement recommendations to strengthen those mechanisms, and (3) remove its alleged legal immunity for human rights and environmental abuses, so that the Bank is accountable to local and international law.

Finally, internal incentives that operationalise these proposed reforms are key - and are long overdue. The Bank must change staff incentives so that compliance with safeguard policies and accountability mechanisms are at the heart of the Bank’s operations. The Bank itself recognizes such changes in incentive structures are needed.

Making these institutional changes at the World Bank will require significant leadership and sustained effort. President Kim can and must rise to the occasion, not just for the Bank’s own credibility, but for the millions of people each year who should not have to be on the losing end of the false choice between rights and development.