India: World Bank Officials Refuse to be Held Accountable

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World Bank Officials Refuse to be Held Accountable

'TRIBUNAL CHARGES BANK WITH SERIOUS VIOLATIONS OF DEMOCRACY, HUMAN RIGHTS AND

SOVEREIGNTY'. 25 September 2007, New Delhi

New Delhi: The four day Independent Peoples Tribunal (IPT) on the World Bank in

India concluded here today hearing numerous depositions indicting the Bank's

policy and project interventions in India. Over six hundred people from

communities, social movements, research institutes, NGOs and universities

attended the proceedings. The Tribunal, supported by the Jawaharlal University's

Teachers Association and Students' Union was held in the university premises.

The IPT invited the World Bank two weeks ago and while they did agree to make a

presentation responding to some of the evidence, they failed to show up despite

provision of adequate space and time by the organisers. They stated on their

website that they had taken this decision because they are not accountable to

the Tribunal process. We must record our shock at their blatant disregard of any

need to be accountable to civil society and to a Jury comprising retired

justices of the Supreme and High Courts as well as leading writers, academics,

religious leaders and activists.

In its preliminary findings, the IPT observed the Bank had an undue and

disturbingly negative influence in shaping India's national policies

disproportionate to its contribution, financial or otherwise.

While India is the world's largest single cumulative recipient of World Bank

assistance, with lending totaling about $60 billion (Rs. 2,40,000 crores) since

1944, current annual borrowing amounts to less than 1% of the country's GDP. The

loans, however, have been used as leverage to bring about important policy

changes and impose conditionalities in areas such as governance reform, health,

education, electricity, water and environment- many of these with obvious

political and social consequences. The loans also legitimize substantial

additional funding from a diversity of bilateral and multilateral donors such as

the Asian Development Bank and Department for International Development

(DFID-UK). The Bank's loans have caused extensive social and environmental harm

from mass displacement in the Narmada valley to loss of livelihoods of

traditional fishworkers in places such as Barwani.

It was noted that such overbearing influence on India's policy making was in

violation of the World Bank's own Rules of Association, which mandate it to be

an apolitical institution that should not interfere in political processes of

any member country. Further, the IPT depositions stated that the presence of

former Bank officials in senior government positions was unacceptable and

involved conflicts of interest.

UNDERMINING DEMOCRACY:

Vice Chairman of the Kerala State Planning Board Professor Prabhat Patnaik in

his deposition cited the example of the Jawaharlal Nehru National Urban Renewal

Mission (NURM), which is a World Bank designed project. In the Kerala NURM

project, the state government, he said, was being forced to accept a

conditionality to reduce stamp duties to 5% from the earlier 15-17%. To avail a

loan of about 1000 crores, Kerala would lose up to Rs.7000 crores of government

revenue.

Vinay Baindur of the Bangalore based Collaborative for the Advancement of

Studies in Urbanism (CASUMM) showed evidence of how the Karnataka Economic

Restructuring Loan (KERL) resulted in the conversion of a state government and

its economy into a corporatised entity meant to generate funds for " private

sector and enterprise development " . 'The $250 million loan resulted in far

reaching changes; the closure/privatisation of the public sector, nearly two

lakh permanent employees were forced to take Voluntary Retirement Scheme (VRS)

payments.

Further, the restructuring process led to a steep rise in farmer suicides; many

of those who committed suicide did so because they were unable to pay the

arrears in power costs that were suddenly slapped on them on account of power

tariff hikes. " The withdrawal of subsidies for agriculture led to a sharp rise

in the costs of cultivation " , argued Baindur in his deposition.

Jury member and scientist Meher Engineer said that he found the depositions on

how the Bank forced inappropriate technology on India such as incinerators

especially damning. 'Given the well researched evidence that I have heard it is

hard to imagine any role for the World Bank in the environment sector, he said.

'The Bank is pro-rich, pro-urban and anti-environment', he concluded.

The IPT was organized by an inclusive platform consisting of over 60 national

and local groups (see list below). Activists, academicians, policy analysts and

project affected communities presented evidence against the World Bank in over

26 sectors from 21-24 September. Jury members included historian Romila Thapar,

writer Arundhati Roy, activist Aruna Roy, former Supreme Court Justice P B

Sawant, former Finance Secretary S P Shukla, former Water Secretary Ramaswamy

Iyer, scientist Meher Engineer, economist Amit Bhaduri, Thai spiritual leader

Sulak Sivaraksa and Mexican economist Nadal amongst others.

WORLD BANK AND GOVERNMENT OF INDIA MISSING IN ACTION:

But in response to the depositions the Bank posted a Q & A document on its India

home page. In the document, the Bank makes the outrageous claim that, " The World

Bank definitely has not recommended the privatization of water supply services

in India " . It is particularly worrisome that the Bank has to repeat a series of

untruths and not own responsibility for the extensive harms they have caused.

In a sign of convergence with the Bank, the Government of India also failed to

send even a single representative to the event, despite personal invitations,

emails and faxes being sent 2 weeks in advance to several Government officials

at all ministries that borrow money from the World Bank.

PUSHING FOR ELECTRICITY PRIVATISATION:

In the 1990s, 20-30% of World Bank loans in India went to the energy sector.

Orissa had the dubious distinction of being the first state to receive World

Bank loans for restructuring the sector. Sreekumar N, from the Pune based Prayas

Energy Group argued that based on World Bank advice, Orissa spent upto Rs.306

crores for foreign consultants, ignoring local expertise. The consultants

recommended the privatisation of distribution and the American firm AES that

took over distribution in the central zone behaved in a high handed manner and

ultimately exited the state in 2001.

BANKS TOXIC COLONIALISM:

Nityanand Jayaraman of the Chennai based Corporate Accountability Desk in his

desposition before the jury said, 'The Bank is perpetrating toxic colonialism by

funding discredited and polluting technology interventions'. As evidence he

presented cases where the Bank has promoted the setting up of more than 88

Common Effluent Treatment Plants, more than 90 percent of which were shown to

have failed to meet environmental norms by the Central Pollution Control Board.

JUST THE BEGINNING:

Wilfred D' Costa, General Secretary of the Indian Social Action Forum(INSAF) one

of the convening groups of the IPT said, 'The tribunal has been useful since it

has seen a convergence of social movements, unions, academicians, researchers

and struggle groups from across the country. Our next steps would be to use this

platform to create a broad based political struggle against neo-liberalism and

work towards an India without institutions such as the World Bank and the Asian

Development Bank'.

_________________________

Preliminary Findings by the Jury of the Independent People’s Tribunal on the

World Bank Group in India. 24th Sept.2007

We, the twelve jury members, have listened to four days of testimony and

depositions from affected people, experts and academics from some 60 grass

roots, civil society groups and communities from all over India. The

presentations covered 26 different sectors of economic and social development,

ranging in scope from the macro-economic impact of wide ranging economic

policies to testimony from representatives of communities said to have been

harmed and impoverished by specific World Bank financed projects. Our members

include former justices of the Indian Supreme Court and High Courts, lawyers,

writers, scientists, economists, religious leaders, and former Indian government

officials. We note that the World Bank Delhi office received an invitation to

attend the Tribunal two weeks in advance, but did not wish to participate in the

proceedings.

First and foremost, the evidence and depositions we have witnessed presents a

disturbing and shocking picture of increased and needless human suffering since

1991 among hundreds of millions of India’s poorest and most disadvantaged in

rural areas and in the cities.

It is clear to us that a significant number of Indian government policies and

projects financed and influenced by the World Bank have contributed directly

and/or indirectly to this increased impoverishment and suffering. All this has

taken place while a minority of India’s population that constitutes the middle

class and rich has enjoyed the fruits of an economic boom.

The most disturbing leading indicator for this suffering is the alarming

increase in farmer suicides since the 1990s. From 2001 to 2007 alone, according

to the Indian Minister of Agriculture, 137,000 poor farmers have killed

themselves. These deaths are not random events; the evidence we heard points to

increasing financial pressures on farmers all over India as a result of some or

all of the following policies, such as: reduced subsidies from the Center and

states, higher prices for poor farmers for irrigation water, electric power, and

seeds; reduced subsidies for agricultural inputs, reduced access to low interest

loans for the poor, and opening up of the Indian economy to an uneven playing

field in international trade in agricultural commodities. India’s farmers must

now compete with imports from the heavily subsidized farms of the European Union

and North America, at the same time when even the most meager state assistance

for the poorest farmers is reduced. India was once self-sufficient in food

production; its food security is now dependent on imports. It is clear to us

that major World Bank Economic Restructuring, Structural Adjustment, and Sector

Loans have directly promoted and helped to finance these economic policy changes

which are a disaster for much of India’s more than 700 million rural

inhabitants, and most disastrous of all for poor farmers.

Other World Bank loans have promoted the institution of user fees in the health

and education sectors, as well as partial privatization in these sectors.

Whatever the justification for these policies, we heard how in practice, they

have further disadvantaged the poor. The Bank is promoting legal and regulatory

changes the main focus of which appears to lessen the social and environmental

compliance burdens for industry and investors, rather than protect the

vulnerable livelihoods and environments of India’s poor majority. The net effect

of many Bank prescribed policy “reforms” appears to be the reorientation of the

Indian State priorities from striving to secure a safety net for the poor and

vulnerable to providing a safety net for large domestic and international

corporations and investors.

We heard witnesses from the poorest Dalit and Adivasi communities describe the

deterioration for their communities from poverty to destitution because of

forced displacement caused by World Bank financed projects. A number of these

projects are notorious and communities have sought redress for years: the Bank’s

massive loans for thermal power development in Singrauli in the 1980s displaced

many tens of thousands of poor, who have sought economic rehabilitation and

improvement of toxic environmental conditions, with no redress from the Bank or

its Indian government borrower, NTPC. We heard of the plight of hundreds of

families impoverished by displacement in the Bank financed Coal Sector

Rehabilitation Project, despite the claims of a separate Bank Coal Sector

Environmental and Social Mitigation Project. Although the Bank’s own Independent

Inspection Panel found in 2002 that Bank management violated its own

environmental and resettlement policies on 37 counts, Bank management has taken

no effective measures to ameliorate the condition of these families. These

examples are only a small sample of a massive pattern of forcible displacement

of India’s poorest and most vulnerable populations for large scale natural

resources extraction, infrastructure and urban projects, a number of which have

been directly financed by the Bank. The Bank has announced its intention to

increase its financing of large scale projects while at the same time there is

disturbing evidence of its widespread failure to implement its environmental and

social safeguards, as well as indications of intentions to even dilute the

effective rigor of these safeguards.

One of the disturbing impressions we gathered from the presentations is that the

bank seems to have developed the art of making policies whose safeguards are

only on paper. It has devopled a language game in which words like empowerment

actually mean disempowerment, sustainable means unsustainable, public-private

partnesrship means using the public to promote the interests of the private.

It is impossible to do justice in our short preliminary statement to the volume,

scope and intensity of the scores of depositions, expert presentations, and eye

witness accounts we have heard over the past four days. The Tribunal will be

publishing more detailed accounts, and we will submit a more detailed set of

findings and recommendations in future weeks. What emerges is a picture of an

institution whose influence on the economic and social policies of the Indian

government is much greater than the amount of its lending might indicate. The

Indian Government, of course, shares at the very least equal responsibility for

all of the abuses we have witnessed, indeed a significant number of officials in

key ministries such as finance and planning have either worked at the Bank or

IMF, or share their assumptions and biases. Together all bear considerable

responsibility for wide reaching policies and specific investments which in the

name of growth and development have had the cruelest impact on the most

vulnerable groups in our society.

We hold the Indian government accountable and call for changes in these

policies. India and the international community must join to hold the World Bank

accountable for policies and projects that in practice directly contradict its

mandate of alleviating poverty for the poorest.

For more information contact the IPT secretariat at

secretariat@... and +09820039557

www.worldbanktribunal.org