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Will the World Bank go
green?
By Alan Boyd
SYDNEY -
Countries that rape the environment for high-growth
development policies are starting to lose their appeal
with global lending agencies after a decade of sustained
pressure from the green lobby.
This month the
World Bank announced a review of its forestry assistance
packages in Cambodia after Phnom Penh expelled a
conservation group that was tracking illegal logging
activities. The International Monetary Fund and Asian
Development Bank are also expected to reconsider their
commitments to a regime that has consistently snubbed
world opinion.
While none of the international
agencies has yet withdrawn aid, the rebuff may block new
financing involving tens of millions of dollars that has
already been frozen for months by unease over the
Cambodian policies.
"The [World] Bank is
considering its work in the forest sector in light of
numerous factors, including this and other recent
developments," World Bank country director Ian Porter
said in a statement issued after the expulsion of
environmental watchdog Global Witness.
While he
did not elaborate, the other developments are believed
to center on Cambodia's failure to establish a viable
framework for the sustainable management of its depleted
forests.
London-based Global Witness was
originally contracted by Phnom Penh in 1999 to monitor
forestry policies as part of a deal with a group of
donor agencies led by the World Bank. Donor agencies
linked a US$30 million structural adjustment aid package
to reform of the forestry management system, which was
being widely abused by vested interests within the
government.
Logging concession companies were
required to compile environmental-impact plans for their
activities by late 2001, but were allowed a 12-month
extension after successful government lobbying on their
behalf. When the plans were finally released last
November, the government, in effect, prevented a public
dialogue by allowing only a 19-day public consultation
period instead of the six months recommended by the
World Bank.
"Early indications are that forest
cover has been grossly overestimated, information has
been invented and figures fixed," Global Witness
researcher Jon Buckrell charged in a series of scathing
reports on the apparent breakdown in the monitoring
process. "The danger is that substandard plans will
legitimize bad practice and that Cambodia's forests will
in effect have been stolen from the Cambodian people by
a handful of individuals who treat the forest resource
as their private property. The fact that the World Bank
appears to be sanctioning this is incomprehensible," he
said.
Even opposition leader Sam Rainsy, usually
a fierce opponent of government policies, has attributed
the debacle partly to the complicity of the World Bank.
In a letter to World Bank president James Wolfensohn,
Rainsy said the agency had refused to issue copies of
the impact statements to villagers affected by logging
on the grounds of insufficient funds.
Global
Witness, widely respected for its dogged pursuit of
flaws in the state logging concessions since the
mid-1990s, set upon a collision course with the
government by calling for the cancellation of all 14
logging concessions. This contradicted the World Bank's
own policy, loosely supported by Phnom Penh, of striving
to reform the existing licensing system rather than
risking protracted legal actions by logging firms.
"The Bank should reconsider its decision to
resume funding logging in the light of its experiences
in Cambodia. It is madness to throw cash at logging
companies in countries where governance is so weak and
corruption is rife," said Buckrell.
Tensions
with the government boiled over in early December, when
police crushed a peaceful gathering by 100 rural
community leaders who were demanding a workshop on
forestry management. After dutifully reporting the clash
through its website, Global Witness was accused of
"exaggerating" the ferocity of the police actions and
ordered to close its Phnom Penh office. Cambodian leader
Hun Sen said shortly afterward that he would sue Global
Witness for defamation, despite a joint statement from
18 non-government organizations (NGOs) testifying to the
accuracy of the reports.
Evidently worried by
the World Bank's response, Hun Sen issued an assurance
that his government would continue the forestry reforms
and hire another firm to replace Global Witness as
forestry policy monitor in Cambodia. The World Bank had
already confirmed after the release of the impact
statements that the $15 million of the loan still to be
disbursed would now be released. But now it may have to
reconsider. All structural adjustment packages are
contingent upon macroeconomic reforms being achieved by
the borrowing country, and there is little evidence that
this has occurred in Cambodia.
Repercussions
will still be felt in foreign investment circles even if
the money is freed up, as Cambodia has already earned
bad marks for its poor standards of transparency and for
manipulative policies.
Noting the World Bank's
checkered track record with the environment, cynics have
dismissed its actions as an act of self-preservation
rather than a measured commitment to conservation
policies. Some observers view the watchdog role accorded
to Global Witness and other NGOs as a camouflage for
ineffectual monitoring systems and a defense mechanism
against the green movement.
"Instead of devoting
its resources to counter environmentalists, it chose to
co-opt them," American scholar James M Sheehan noted in
a 2001 study of the Bank's lending practices. "Although
the Bank has been unable to show that the quality of its
environmental lending has fundamentally improved,
environmental groups, by and large, are more cautious in
their criticisms of the Bank ..."
This
partnership with NGOs emerged from the reformist drive
of Wall Street investment banker James Wolfensohn when
he was persuaded by the US to take the helm of a
discredited World Bank in 1985. Already a board member
of the World Business Council for Sustainable
Development, Wolfensohn quickly made his mark by
canceling the controversial Arun Dam in Nepal on the
advice of a newly installed NGO panel.
Internal
procedures were overhauled with the release in 2001 of
an Environment Strategy that directly ties development
aid to "environment management capacity" in recipient
countries. A review committee had found that
environmental issues were "yet to be fully mainstreamed
into the Bank's operations", and were "only partially
successful in supporting environmental sustainability in
client countries".
One shortcoming frequently
associated with the Bank is a tendency to implement
projects in isolation, without due consideration for
potential consequences on neighboring communities.
Environmental pressure group Probe International
charged in October that the Bank was threatening
Cambodia's environment by financing a hydro-electric dam
in Vietnam, which shares some of the same river systems.
Similar accusations have been made about World Bank
support for dams on tributaries of the Mekong River in
Laos and China that will adversely affect water levels
in Thailand, Cambodia and Laos.
Academic M James
Sheehan claimed in his 2001 study that the reformist
push since the mid-1980s had been motivated by
appeasement and did not reflect any structural changes
in the way that the Bank functions.
"Although it
has won the acceptance of environmental groups, the
World Bank has neither fundamentally reformed its
lending practices nor radically changed the kinds of
projects that receive its funding.
"Bank
projects around the world remain environmentally
damaging, and most will continue to be funded despite
the Bank's rhetorical embrace of the NGOs'
sustainable-development creed," he said.
(©2003
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