What to do when the World Bank finances land grabs: An interview with Accountability Counsel

Nathalie Bridgeman Fields

Righting Food | 21 and 25 June 2012

What to do when the World Bank finances land grabs: An interview with Accountability Counsel

Part I

This year, the World Bank’s annual Conference on Land and Poverty was clouded by media reports that the World Bank facilitates land grabs in Africa. These claims were based in part on a report by Friends of the Earth International (FOEI) on land grabs undertaken for palm oil plantations in Uganda.

The World Bank denied the claims. (Their defense, that their private sector investment arm, the International Finance Corporation (IFC), has not “made any recent investments in palm oil in Uganda” does not necessarily contradict the FOEI report, which stated that the Bank, through the IFC, provided US$10 million but “has since withdrawn as cooperating institution.”) In rebutting these accusations, the Bank also pointed to the IFC’s new Environmental and Social Performance Standards, as well as the Bank’s “strong track record” of protecting farmers’ land rights, as illustrative of its commitment to responsible agricultural investment.

But what can affected communities do when the World Bank Group has facilitated land grabs? Regardless of the status of this particular situation in Uganda, it is not the first time that the World Bank has been accused of harmful activity. And although the latest IFC Standards reference human rights, they are no guarantee that abuses will never occur. So what accountability mechanisms exist for people whose land rights and human rights are affected by land acquisitions that are supported by the World Bank (or other large institutions)? For a better understanding of the practical steps that people can take, I interviewed Natalie Bridgeman Fields, the founder and Executive Director of Accountability Counsel. There’s a lot of information here, so I’ve split the four-question interview into two posts; stay tuned for the rest of the interview early next week!

There is currently concern about the rise of large-scale land acquisitions in developing countries, and accusations that the World Bank has financed or otherwise supported these acquisitions. What opportunities do people and communities have to seek recourse if they lose access to land due to a project funded in part by the World Bank?
For many decades, the World Bank has supported projects with developing country governments that have involved land-grabbing and involuntary displacement of people from their land. Land grabbing is heating up all over the developing world. The World Bank has policies in place that are meant to protect people and the environment from harm, but often these policies are violated. Until 1994, people harmed by these projects had no options for recourse from the World Bank because the Bank argue[d that] they are immune from being sued.

However, in 1994, the World Bank Inspection Panel was created. Today, if people are harmed or expect they might be harmed by a project supported by the World Bank, they have the option of filing a complaint to the three-person Inspection Panel. The Inspection Panel’s job is to evaluate complaints and issue reports regarding whether the World Bank followed its own policies during its support for a project. In the case of land-grabbing, the Inspection Panel may be asked in the complaint from affected people to assess whether the Bank violated its policies on poverty reduction, environmental assessment, involuntary resettlement, or other policies designed to protect people and the environment from harmful Bank practices. The Inspection Panel process usually involves a visit to investigate the issues and directly speak with the people who filed the complaint. World Bank staff involved in the project are given an opportunity to respond to the Panel’s findings, and the Panel’s findings and the Bank’s response are submitted to the Bank’s Board of Directors. The Board then decides – based on its own discretion – what to do.

In the case of land grabbing, the Board may require, for example, actions to be taken to address failure to consult with local people about a project involving use of their land and failure to incorporate their needs into project design. This may lead to communities being compensated, given land for land, or other remedies. On the other hand, even when faced with proof in an Inspection Panel report of serious violations, the Board may take little to no serious action. The Inspection Panel process is unfortunately not perfect and is no guarantee that affected communities will receive redress for harm they experience.

If the World Bank Group finances harmful land grabbing through their private sector arm, the International Finance Corporation (IFC), or if a company receives insurance from the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA), communities have access to a separate accountability mechanism, called the Compliance Advisor/Ombudsman (CAO). In that case, the affected people can complain to the CAO about violations of IFC or MIGA policy and request a compliance audit … and they can also request help with resolving a dispute through a CAO mediator (the Ombudsman process). More about how to use these accountability mechanisms and what to expect from the process is available on Accountability Counsel’s website.

Other types of recourse may also be possible through use of lawsuits against the private sector investors in an IFC/MIGA-supported project, use of direct negotiations in some cases, media, or even civil disobedience. Any strategy chosen should include evaluation of all options, will be very specific, and will depend on a number of factors.

Do these accountability mechanisms still apply if a development project initially received financial support from the World Bank, but the Bank has since withdrawn from the project?
Each accountability mechanism has its own requirements for when a complaint must be filed. In the case of the Inspection Panel, if the World Bank has withdrawn from the project, a complaint will not be accepted. The Inspection Panel’s rule states that they cannot accept complaints “filed after the Closing Date of the loan/credit financing the addressed project or when 95% or more of the loan/credit proceeds have been disbursed.” If the Bank has withdrawn support, then the loan or credit will be “closed,” making a complaint ineligible.

In the case of the CAO, there is no requirement that the IFC or MIGA still be involved in a project in order to file a complaint. However, the CAO may determine that there is no likelihood for resolution of a dispute through the Ombudsman process if the IFC or MIGA are no longer involved and therefore have little or no leverage over the private sector parties that caused or are causing harm. They may also determine that a compliance audit will not be valuable if the IFC or MIGA are no longer involved. If there is harm from a project where the IFC or MIGA were involved but have since withdrawn, it is wise to contact the CAO to discuss with them whether or not to file a complaint.

Part II

Last week, I posted the first part of an interview with Natalie Bridgeman Fields, the Executive Director of Accountability Counsel, regarding what people can do when the World Bank or other large institutions have supported land grabs. She described two important avenues for recourse within the World Bank Group system:  the World Bank Inspection Panel and the Compliance Advisor/Ombudsman (CAO). You can find the first part of the interview here.

Below, Natalie talks about other accountability mechanisms outside of the World Bank Group, and suggests resources for people interested in learning more about the World Bank, land grabs, and accountability mechanisms.

If a large-scale land acquisition — or a different development project that has forced people from their land — has occurred without financial support from the World Bank but with financial support from other sources, such as regional development banks, what accountability mechanisms exist?
Without support from the World Bank Group, but with financing from a regional development bank, other accountability mechanism options to consider are the:

If there is financing from a development finance institution, export credit, or export promotion [agency] of the US, Canada, or Japan, consider the accountability mechanisms of the:

If a corporation headquartered in an OECD country causes harm that violates the OECD Guidelines for Multinational Enterprises, consider a complaint to the OECD National Contact Points (NCPs), located in OECD countries and some OECD adhering countries.

The accountability mechanisms listed above [including the World Bank Group's mechanisms discussed in the first part of the interview] are not all equal. Some are well-functioning, professional mechanisms, and some have operated with a history of bias or unprofessionalism. When considering use of one of these mechanisms, we welcome you to contact Accountability Counsel to discuss the various options.

Are there any resources that you would recommend to people concerned about the World Bank’s role in supporting large-scale land acquisitions?
In August 2010, Accountability Counsel and the Center for International Environmental Law (CIEL) released a report titled A Call for Reform of World Bank Group Agribusiness Polices and Practice: A Proposal to End Violations of Indigenous and Traditional Peoples’ Rights that addresses the issue of land grabbing supported by the World Bank Group. Accountability Counsel also regularly updates an Accountability Resource Guide with information on each accountability mechanism and how to file complaints. All of this information and more may be found at www.accountabilitycounsel.org.

Other organizations doing work in this area are Friends of the Earth International (FOEI) and the Oakland Institute.

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