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Indian Civil Society Groups Announce “World Without World Bank” Action Week

Highlight the Impacts on Key Sectors in India During IMF-WB 2020 Annual Meetings

Date: 12 October, 2020

New Delhi: People’s Movements, Civil Society Groups, and concerned citizens are coming together to protest the World Bank’s policies, interventions and impacts which negatively impacted the Indian economy as a whole, and in particular in some key sectors, in a week-long protest, “World Without World Bank – Action Week India” from October 12-16. The purpose behind the protest week is to expose the Bank’s hidden agendas to push neo-liberalization and a lack of focus on either inclusive or sustainable support for the countries and people battling marginalisation.

The IMF-Bank is having its 2020 Annual General Meetings (virtual) from October 12-18, 2020.  

The World Bank Group continues to be the lead Multilateral Development Bank (MDB) defining development and reshaping policies and economies to fit the neoliberal agenda. COVID-19 has provided the Bank a window to reinvent its relevance through support to countries in fighting the pandemic. This support is coming through development policy loans which are silently pushing for policy reforms. The Bank’s Ease of Doing Business report, now tainted and halted for fudging of data, has played a devastating role in watering down environmental and labour laws in India and elsewhere. The Bank’s World Development Report for 2021, which sets forth the interest and direction of its investments, points towards commodification of data. 

India’s engagement with the World Bank dates back to several decades back with the first lending in ‘50s for the railway project. Later in 1968 a huge protest against the then World Bank President Robert McNamara for his role in the Vietnam war as the Defence Secretary of US, when he visited Kolkata led to his return from the airport itself, without being allowed to step out of it due to protests.

The late ‘80s and early ‘90s witnessed protests against World Bank lending to Narmada dam and later Singrauli power projects, directly resulting in World Bank’s withdrawal from Narmada dam and constitution of Inspection Panel, the first ever accountability mechanism in any MDB.

In late ‘90s, government tried to nominate WB staff to the Planning Commission of India, which the Left parties vehemently opposed and thwarted.

A number of protests happened during the decades of 90s and 2000s. Some of the significant ones are against Vishnugad Pipalkoti and Allain Duhangan hydro projects, Mumbai Urban Transport Project, struggles against the privatisation of health, water and power sectors.

The decade following that saw a valiant struggle against the power project in Kutch Gujarat – the Tata Mundra project. Filing a case in United States against the private sector arm of the World Bank – the International Finance Corporation – resulted in the Supreme Court of US ruling that World Bank does not enjoy absolute immunity from law suits, taking the efforts to hold MDBs accountable to a different level and giving an opportunity to communities around the globe to hold World Bank legally liable for the damages causing to them because of irresponsible lending.

The Bank continues to grow its influence in India through state partnerships impacting local governance structures. They pursue new and what seem to be more lucrative territories promoting privatisation and commodification of data, coastal regions, large renewables, large infrastructure, agriculture, health, etc. with little regard to impacts on communities, their rights over resources and to human rights. With the approach of maximising finance for development, there is a deeper connection of Development Finance Institutions with private financial entities making funding more complex and difficult to trace. These institutions despite claims of responsible funding and poverty alleviation continue to operate with lack of accountability and transparency.  

During the week-long protest Indian groups plan to organise a media campaign, online seminars and meetings to highlight the impacts of  the World Bank funding  in various sectors in India including health, agriculture, infrastructure, energy, labour, environment and on the Bank’s agenda of neoliberal policy reforms.

For more details: www.wgonifis.net

Issued by Working Group on International Financial Institutions.

Contact:

Anuradha Munshi – anuradha@cenfa.org / 9792411555

Nishank – nishank@cenfa.org / 9910137929

Working Group on International Finance Institutions (WGonIFIs) is a collective of organisations and individuals in India to critically look at and evaluate the policies, programmes and investments of various International Finance Institutions (IFIs), and joining the celebration of the people and communities across the world in resisting them.

World Without World Bank

Action Week -India; 12th  to 16th October, 2020

Context

The World Bank Group (WBG) continues to be the lead Multilateral Development Bank defining development and reshaping policies and economies to fit the neo liberal agenda. COVID-19 has provided the Bank a window to reinvent its relevance through support to countries in fighting the pandemic. This support is coming through development policy loans which are silently pushing for policy reforms. The Bank’s now tainted and halted for fudging of data,  Ease of Doing Business report has played a devastating role in watering down environmental and labour laws in India. The Bank’s World development Report for 2021, which sets forth the interest and direction of its investments, points towards commodification of data. 

The World Bank continues to grow its influence in India through state partnerships impacting local governance structures. They continue to venture into new and what seem to be more lucrative territories promoting privatisation and commodification of data, coastal regions, large renewables, large infrastructure, agriculture, health with little regard to impacts on communities, their rights over resources and to human rights. With the approach of maximising finance for development, there is a deeper connection of DFIs with private financial entities making finance more complex and difficult to trace. 

It is important as civil society, we respond and expose the Bank’s hidden agendas and lack of interest in inclusive and  sustainable development for marginalised communities. The Bank organising its Annual general Meetings(virtual) from the 12th to 18th of October, 2020.  

As a sign of protest to the Bank’s policies and interventions and impacts on economies Working Group on IFIs is organising a week of protest “World Without World Bank- Action Week- India” from 12th October to 16th October. 

Program (12th -16th October, 2020)

12th October, 2020-

  • World Bank Reform agenda (social media campaign)
  •  Agricultural Reforms (Social media campaign)

13th October, 2020- 

  • Health Sector, (Social media campaign)
  • COVID-19 Response (Social media campaign)
  • Webinar on “Covid-19 and IMF-World Bank: Did the Reform Agenda Get A Booster? –  Experiences Globally”  

14th October, 2020- 

  • Public Sector Banking Reforms – (Social media campaign)

15th October, 2020 – 

  •  Ease of Doing Business, (Social media campaign)
  • labour sector Reforms (Social media campaign)
  • Webinar on “World Bank’s role in creating Smart Cities  and it’s Socio political Impacts in Developing Countries- Voices from the South”

16th October, 2020- 

  • Energy Sector Reforms (Social media campaign)

More details will follow.

Updates from IMF: Forecast for Post-COVID Economy and Debt Levels

The International Monetary Fund (IMF) released two updates in the month of June – first was the World Economic Outlook, titled A Crisis Like No Other, An Uncertain Recovery and another was the Financial Stability Report.

These reports and updates are some of the most watched reports by economists, policymakers and businesses. The earlier Economic Outlook in April, 2020 had predicted a growth in India by 1.9% and a sharp rise back to 7.4% in 2021. It seems that IMF again missed their economic forecast and this time by leaps as it revises their predictions yet again.

One is reminded of the Economic crisis of 2018 when IMF financial surveillance could not predict any significant risks to the global economy in their Economic Outlook reports. IMFs own working paper based on GDP forecasts of over 63 countries for the year 1992 to 2014 finds that the ability to predict turning points are limited and they miss the magnitude of recession by a wide margin until the year is almost over.

Likewise, a Bloomberg analysis of more than 3200 same-year country forecasts, published each spring since 1999 found its forecasts underestimated GDP growth by 56% of cases and overestimated it in 44%. Noted Indian economist and former member of the Economic Advisory Council to the Prime Minister (EAC-PM), Mr Rathin Roy had earlier commented on IMF projections as usually 80% wrong.

What is important to note is that IMF not only forecasts but also provides billions in bailout loans in exchange for implementation of strict austerity measures and other neo-liberal policies imposed in the country that are opposed by workers, civil society and citizens.

WORLD ECONOMIC OUTLOOK

IMF in the World Economic Outlook forecast has reversed their earlier observations and is now projecting a deeper recession in 2020 and a slow recovery in 2021, different from predicted few months back. Global output is projected to decline by 4.9 % in 2020. It also has estimated that the total output loss to the economy in 2020 and 2021 will be over $12 trillion.

India’s forecast has been cut by a sharp 6.4% to -4.5% for 2020. In the last forecast, IMF had predicted Indian economy will grow by 1.9% but it was revised to -4.5% in the update. This according to Gita Gopinath, chief economist IMF, is due to longer duration of the lockdown than it was assumed and rise in Covid cases in India.

Synchronized deep downturn

The update projects a synchronized deep downturn in 2020 for both advanced economies (-8%) and emerging markets and developing economies (-3% to -5%, if excluding China), and over 95% of countries are projected to have negative per capita income growth in 2020. The report mentions among other things the severe hit to labour market. It quotes ILO on the global decline in work hours which in the first quarter of 2020 was equivalent to 130 million full time jobs and predicts loss of 300 million full time jobs in the next quarter.

It estimates India’s liquidity support announced in different packages as of 4.5% of GDP in the form of loans and guarantees for businesses and farmers, and equity injections into financial institutions and the electricity sector.

Mounting Debts and deficits

Public debt is projected to reach the highest level in recorded history this year, in relation to GDP, in both advanced and emerging markets as well as developing economies. This is predicted due to steep contraction in output, fall in revenues and high fiscal support costs. The global public debt is expected to reach an all-time high, exceeding 101%of GDP in 2020–21—a surge of 19 percentage points from a year ago. India’s Gross Debt is projected to increase to 84 % in 2020 compared to 72.2% in 2019.

Read World Economic Outlook Update, June 2020

GLOBAL FINANCIAL STABILITY REPORT UPDATE

IMF also came up with an update for its Global Stability Report. The report captures an overall easing of financial conditions as there is a surge in risk appetite in financial markets and equity markets rallying back. This according to the report is due to the swift and bold actions by central banks and have boosted market sentiments. However this has created a disconnect between the real economy and financial markets. The Economic Outlook has predicted a further reduction in global output, loss of working days, reduction in revenue etc.

The pandemic has exposed the financial vulnerabilities including corporate and household debt which could become unmanageable given the continued economic lockdown during the pandemic.

Historically, globally debt has reached $55 trillion in 2018, described as the largest, broadest and fastest of all the debt so far. Aggregate corporate debt and household debt has increased in many economies and some of which will face an extremely sharp decline. This has led to broader impact on the solvency of companies and household.

The report has warned that rising debt levels and potential credit losses resulting from insolvencies could test resilience of the banking sector. Banks have to provision more for expected loses as they assess the ability of the borrowers to repay their loans. The Non-Banking Financial Companies (NBFCs) which now have a greater role in the financial system are vulnerable to pro cyclical corrections and the behavior of NBFC during a deep downturn is untested.

Read Global Financial Stability Report Update

In India, the increase in the stress of the banks is a pre-existing condition according to the Financial Stability Report of RBI published in December 2019. The Gross Non Performing Assent ratio of banks was estimated to increase from 9.3% in Sept 2019 to 9.9% in September 2020. The report also said state-run banks’ GNPA ratios may increase to 13.2% by September 2020 from 12.7% in September 2019. However as per the RBI Governor, the economic impact of the corona virus pandemic may lead to higher non-performing assets and capital erosion of banks.

Rating agency CRISIL in its report on Covid-19 impact has said that gross non-performing assets (NPAs) of lending institutions are set to rise 150-200 basis-points (bps) this fiscal due to higher slippage and lower recovery. This according to Fitch Ratings can be anywhere between 200 and 600 basis points (bps). Considering the Covid-19 impact, CRISIL has projected GNPAs in the range of 11-11.5% for the financial year 2021.

According to RBI itself, there is a need for re-capitalisation plan of public sector banks as the minimum capital requirements of banks will not be enough to absorb the loses.

Indian groups reject World Bank’s concept note for World Development Report 2021: “Data for better Lives”

The annual World Development Report (WDR) is a flagship publication of the World Bank. The 2021 WDR report is in the process of being drafted and is titled “Data for Better Lives”. The Bank has shared the concept note for the Report for comments. As per the concept note, the World Development Report 2021 will look into role of data for development, current data landscape and the opportunities of integrating public and private data and new institutional frameworks to manage a range of regulatory, policy and governance challenges in this context. 49 Indian civil Society organizations wrote to the Bank rejecting the concept note and the intent behind the concept note in which data is identified and presented as a commodity. The concept note is deeply problematic at many levels: it disregards the rights of people over their data and is based on flawed assumptions that have no basis in reality. 

The Concept Note, Data for Better Lives outlines a framework that enables corporations and the state to profit and advance their particular interests under the guise of public interest, poverty reduction and bettering the lives of people. Data that is built from information about the everyday lives of people will become one of the new engines for economic growth.  The document is neither rooted in experiences of communities nor based on any evidence.It’s unfortunate that the approach of this concept note is limited to business for private companies for which certain power needs to be given to the state and paternalism to the poor. The more significant issues of state coercion, protection of people’s rights over their data and information is in the peripheral in this document. 

Disaster Funding and COVID-19 response of MDB’s in India

Over the years increasingly institutions like World Bank and other MDBs have started using post-disaster situations and climate change as an opportunity to bring in policy reforms. Post disaster rehabilitation and recovery programmes provide institutions an easy entry with little resistance to the massive policy reforms that come along. Also, the language of resilience and sustainability is built into the narrative, which find very little resistance. Institutions like the WB are taking multiple roles of assessment, planning, financing project through development policy loans and monitoring specially in cases of disasters. It is a classic case centralization of powers. World Banks language of resilience, sustainability and post disaster recovery needs to be decoded. With increase in natural disasters in this decade and with climate change realities, disaster capitalism has also become a reality.

In an article on “The Rise of Disaster Capitalism” in the Nation Naomi Klein points out, “governments will usually do whatever it takes to get aid dollars–even if it means racking up huge debts and agreeing to sweeping policy reforms. But shattered countries are attractive to the World Bank for another reason: They take orders well. After a cataclysmic event, governments will usually do whatever it takes to get aid dollars–even if it means racking up huge debts and agreeing to sweeping policy reforms. And with the local population struggling to find shelter and food, political organizing against privatization can seem like an unimaginable luxury.1

In the recent years India has witnessed an increase in climate disasters and the World Bank has used every opportunity to bring in the post recovery and rehabilitation projects, which come along with policy reforms. Post 2013 till now, India has witnessed some major disasters. The responsiveness of the Bank to these disasters has been of an opportunity for implementing economic and governance reforms under the garb of disaster preparedness, rebuilding and building resilient infrastructure. The Uttarakhand floods, Cyclone Phailin, Cyclone Hudhud, flooding in Srinagar and the larger valley region, the Kerala floods and being some of the disasters for which, the World Bank has supported the GoI in conducting rapid post-disaster damage and needs assessments in the first four listed disasters. The assessments provided clear guidance on the post-disaster recovery path that needed to be taken. Subsequently, emergency projects were prepared and are currently under implementation. These projects focus on recovery and reconstruction as well as strengthening long-term resilience and emergency response capacity at the State level in the affected States2.

In 2018 and 2019 Kerala saw floods and landslides paralyze almost the entire state. The disasters had a huge negative impact on the biodiversity of Kerala and the already fragile environment. In 2018, a prolonged southwest monsoon over the state of Kerala resulted in one of the worst floods in 100 years, causing estimated losses of US$ 4.25 billion.  This post disaster situation has been used as lucrative opportunity by institutions like the World Bank into financing programmes focused on disaster management with rehabilitation, post disaster recovery, building resilience as hook words. The Bank has found an easy entry point for development policy loans and other financing, which are coupled with policy reforms as well.

TheWorld Bank in October 2018 extended a support of up to $500 million to the Government of Kerala’s comprehensive flood recovery efforts and to build greater resilience to future shocks3. In June 2019 the World Bank board approved The First Resilient Kerala Program Development Policy Operation as a Development Policy Financing of 150 million USD4.The proposed operation supports Government of Kerala (GoK’s) resilient recovery from August 2018 floods. The proposed programmatic operation, the first in a series of two Development Policy Loans (DPLs), will support policy and institutional reforms recovery, mainstreaming long-term resilience to disaster risks and climate change into sectors of key importance.

The most problematic aspect of the reforms is that they are expected to mainstream disaster risk reduction and climate resilience into critical infrastructure development and service delivery. The priority sectors include water supply, sanitation, solid waste management, transport, and agriculture. The World Bank’s long-standing agenda of privatization is actualized through these reforms.

This case is very similar to what happened in Indonesia post the 2004 Tsunami disaster, where post disaster funding pushed privatization. With project loans worth $ 1.1 billion and the policy reform support loan, the Bank pushed for privatization and other new regulations that would support economic liberalisation. From this loan, came Indonesia’s new law on oil, gas and electricity that allows for the privatization of respective state-enterprises5.

In the post covid time the MDB’s have already invested close to 5.5 billion USD in India as support for dealing with the crisis. The world bank’s 1 billion USD supported COVID-19 (Coronavirus) Emergency Response and Health Systems Preparedness Project does not only look into immediate support for the public health systems, there is also considerable focus on integrating systems with push for private entities like health insurance companies to integrate with government schemes. We have already in India seen the fallouts of such systems.

India’s also negotiated a Development Policy loan for ‘Accelerating India’s COVID-19 Social Protection Response Program’ with World Bank . Development Policy loans have strings attached in terms of a neo-liberal agenda. These are loans given by the World Bank on the condition of policy changes, which are promised by a country and in line with the Country Partnership Framework for the country. Many of the reforms, which were announced in the financial package, are directly from the reform book of International Finance Institutions who have been demanding a rollback of labor regulations, environmental regulations, power sector reforms and relaxation of the land acquisition laws.

Asian Development Bank has funded USD 1.5billion COVID-19 Active Response and Expenditure Support Program(CARES) project which will support the government mitigate the severe health, social, and economic impact caused by the coronavirus disease 2019 (COVID-19) pandemic. ADB with its operation in health sector has altered and influenced health sector policies in India for sometime now. This emergency operation is built upon previous and ongoing health sector operations and policy dialogues. Since, the first health sector operation in India in 2013 through the support to the National Urban Health Mission (NUHM), ADB’s health sector engagement has been increasing. Following the launch of Ayushman Bharat in 2018 and implementation of NUHM under the National Health Mission, ADB is now developing a program to support delivery of comprehensive primary health care in urban areas (2020 pipeline). 

Asia Infrastructure Investment Bank has invested 1.25 billion in COVID response. They have funded two projects both co- financed one with ADB and other with the World Bank. As usual AIIB is riding the back of lead financiers, exhibiting its commitment to COVID without accountability on their end. 
New development Bank has provided a loan of USD 1billion for Emergency Assistance Program in Combating COVID-19 for support in public health and social safety sector.

The total lending of USD5.5 billion is not huge for a 3 trillion economy and whose annual budget is over Rs. 25 lakh crore. But the influence to change the economy and the mosaic of this country, through these investments, is huge and disproportionate to their lending. 


The World Bank and other MDBs are increasingly taking up all the roles of assessment, planning, financing projects and financing through development policy loans . The World Banks language of resilience, sustainability and post disaster recovery needs to be demystified. With increase in natural disasters in this decade and with climate change realities, disaster capitalism has also become a reality. With economies globally in shambles and in need for additional support, this vulnerable situation should not allow MDBs like the World Bank to push their agenda of disaster capitalism with ease.

1 https://www.thenation.com/article/archive/rise-disaster-capitalism/

2 file:///Users/anuradhamunshi/Downloads/world-bank-india-disaster-risk-management-program-2016.pdf

3 https://www.worldbank.org/en/news/press-release/2018/10/16/world-bank-commits-support-to-rebuild-a-more-resilient-kerala

4http://documents.worldbank.org/curated/en/428421551979689773/pdf/Concept-Program-Information-Document-PID-Resilient-Kerala-Program-P169907.pdf

5 https://www.brettonwoodsproject.org/2005/01/art-108058/

A Big Win- IFC World Bank to Freeze Investment in For-Profit Schools

Recently, a piece of good news has appeared that World Bank Group’s International Finance Corporation (IFC) upholding the right to education in an official commitment and decided to freeze investments in private for-profit pre-primary, primary and secondary (k-12) schools. Currently, the whole world is facing the devastating impact of the COVID-19 pandemic and passing through very trying times, with a third of the global population under lockdown. School closures are impacting more than 1.5 billion children. In such a scenario, this is a big win for civil society and an encouraging decision in favour of billions of children, especially those who are at the margins and dependent on the public system.

This landmark decision by IFC has responded to the concerned voices about the effects on segregation and exclusion, inadequate education quality, avoidance of standards and regulations, poor labour conditions, and profit-seeking behaviour of commercial schools. Hundreds of civil society organisations including Right to Education Forum (RTE Forum) and individuals from different part of world urged earlier to the World Bank through an open letter to take a clear and principled position in support of free, publicly provided education and against the use of development aid to fund for-profit or commercial education. They raised the issue of increasing phenomenon of commercialization of education in lower-income countries because donors are actively using public aid money to drive privatization in these countries, including the World Bank group. They mentioned that while most of its funding goes to support public education provision, the World Bank is also funding some market-oriented public-private partnerships (PPPs) through its International Development Association (IDA). It is also actively advising countries to pursue PPPs and adopt reforms that reduce regulations and incentivizes the growth of private education markets. It has also increased its direct support to commercial private education providers through the International Finance Corporation (IFC)-including fee-charging, for-profit school chains, which clearly undermine state obligations as defined in international human rights law. 

European Parliament and Global Partnership for Education (GPE),the biggest multilateral fund for education, had already taken strong positions against to support commercial or for-profit education provision. The UN Human Rights Council, the African Commission on Human and People’s Rights and various UN Treaty Bodies have also recognized the obligation to progressively secure free, public, not commercialized, education as a right. 

In the year of 2015, The UN Special Rapporteur on the right to education Mr. Kishore Singh has submitted his report to United Nation General Assembly wherein he had raised his concerns on the rapid expansion of privatization of education through deregulation and liberalization of education sectors. In this report, he has majorly highlighted the challenges of public-privatete partnership in education in safeguarding education as a public good. On similar lines, Education International, world’s largest teachers’ union held its 7th World Congress in Ottawa on July 2015, where it passed a resolution against privatization of education services.In its resolution, it said, “EI is concerned that privatization and commercialization policies have the effect of undermining the right to free quality public education and may create, exacerbate and entrench inequalities in access and participation as well as erode teaching and learning conditions in schools.”

These positions uphold the principle that education is a right, not a market commodity. Investing in free and inclusive education of good quality is the best way to ensure the fulfilment of SDG 4.

In India, there has been an incremental rise of privatization of education both in terms of increase in the number of private schools as well as in the numbers of students enrolled in them. The DISE data has provided trends of elementary education in India according to which there has almost 24.28 per cent increase in the number of private schools in between 2010-11 to 2014-15. In contrast, the growth of government schools is only 1.51 per cent. When it comes to the enrolment of students, during the same period, there is a steep rise of 24.42 per cent in private schools as against an 8.55 per cent decline in enrolment in Government schools. We need to keep in mind that it was in the year 2010 that the Right to Education Act 2009 came into force and in spite of this, there is a visible declining trend in public education both in terms of the number of schools as well as in enrolment of students in public schools. On the other hand, during the period private schools have not only been opened in large numbers and attracted students leaving the public school system. Inadequate spending on education by Govt of India proved one of the significant barriers for slow implementation of RTE Act within the stipulated timeline. It shows the apathy of state towards the strengthening of the public education system.

Private schools across rural and urban areas have been on the rise and a significant segment of education today, almost 30% of elementary education, 60% secondary education, and 75% higher education are privatized. There are different types of private unaided schools with varying fee structures: from low fee to elite, high fee demanding schools. Andhra Pradesh Government has signed an MOU with the private school chain, Bridge International Academy (BIA) for making the state their knowledge hub in the year of 2015. The Government of Andhra Pradesh has also invited the BIA to set up its India headquarter in Vijaywada, Andhra Pradesh. The entry of a big player like BIA with its deep pocket and highly influential investors like Facebook, Bill and Melinda Gates Foundation, World Bank etc, may lead to an even greater push for privatization of education in the country. Civil society in general and RTE Forum, in particular, have vehemently opposed the stance governments. Private schools are also trying to redefine the quality of education by their minimal standard of learning outcomes like reading, writing and numeracy. Five States of India –Manipur (73.3%), Kerala (62.2%), Haryana (54.2%), Uttar Pradesh (51.7%), and Meghalaya (51.7%) – have more than 50 per cent children in private schools (in the elementary school age group).

This trend of increase in private schools indicates the fact that education as ‘social public good’ is losing its base and privatization, commercialization and corporatization of public education are gaining momentum. There is an internationally known trend that reinforces the positive correlation between income and private schooling. In India, as household income increases, there is a greater tendency to send children to private schools, whereas children from the poorest households continue to access government schools. The data also clearly highlights gender bias in terms of more number of boys being sent to private schools as compared to girls. At a time when there is a fast growth of private schools in the country, thousands of government school are getting closed across India in the name rationalization/merger of schools.

According to a longitudinal study carried out by Azim Premji Foundation in Andhra Pradesh on school choice programme, “contrary to general perception, fee-charging private schools are not able to ensure better learning for children from disadvantaged rural sections as compared to government schools.” It also makes it clear that private schools do not add any value as compared to government schools when socio-economic factors are adjusted. It also says that several factors, both inside and outside of school, have a bearing upon the learning outcome of a child. This is a trend that is also highlighted in international literature: the DFID comprehensive review on the functioning of private schools (Day Ashley et al, 2014) also concludes that there is ambiguity about the size of the true private school effect.

The recently adopted Abidjan Principles on the right to education lays out the existing human rights obligations in this regard and guide how IFC can ensure its investments support the right to public education.

Civil society organizations welcome the IFC’s leadership in recognizing that its education investments must not undermine the right to education, including public education, and that there have been concerns with past investments in this regard. 

Corona Uncovering the Cracks in Capitalism

The COVID-19 corona epidemic that has taken over 16,99,019 lives all around the world has undoubtedly been a disaster with no parallels in modern history. Political and social analysts describe this pandemic as the reason for the most sustained period of worldwide public suffering since World War II and it indeed remains a fact that the global outreach of the virus has brought forth societal and economic shutdowns. The virus has not just wrecked the physical well-being of people globally but has also set in motion a precarious chain reaction that is all set to upset the veneer of stability in one country after another. If anything, this pandemic has laid bare the contradictions of the capitalist system like never before; for this time, unlike the 2008 global financial crisis, it would be difficult for the capitalist and neo-liberal models to rescue themselves without conceding ground to the biological implausibility of capitalist globalization.

While the national bourgeoisie is busy shifting the blame for the economic crisis on to the virus and many countries are significantly looking forward to accelerate protectionist tendencies, what the virus has in reality exposed is the deep-seated contradictions within the neo-liberal framework accumulated through decades. Hence, the crisis that we see today is a crisis of capitalism as a whole, as much as it is one triggered by corona. While it must be acknowledged that capitalism always delayed impending crises through different means such as massive credit expansions and racking up debt, thereby stonewalling growth, the bogey of capitalist advancement had to confront its current pandemic-sponsored rupture without any prior warnings. Thus, the virus seems to be only an unforeseen episode that turned spotlight on the deep fault-lines in non-democratization of economic power and freedom. While forfeiting the opportunities for building a truly international public healthcare infrastructure at the altar of the large pharmaceutical companies, little did the developed world envisage a time when thousands would be left dead with no antidote in sight for the worst ever viral attack.

It is in this context that many left wing intellectuals like the American historian and sociologist, Mike Davis, sees these times as a possible opportunity for “a second New Deal; the moment to reclaim social ownership and democratization of economy” (Zitelman, Forbes, 30March, 2020). However, the exhilaration over the assumed retreat of hyper-globalization, while presenting a chance to reset both global and personal landscapes, could also be a scenario where states get to reinforce nationalism. This is precisely because of how state is essentially a coercive institution which nurtures itself through class divisions in society. Consequently, as citizens world over would turn to their respective governments to protect them from the pandemic, the emergency powers at the disposal of these states currently, to combat the viral outbreak, in all likelihood would become the new status-quo. The “democratic aura” of the West has clearly been damaged by the lack of swiftness in their responses to tackling the crisis in comparison to say China, South Korea or Singapore. Hence, COVID-19 would by default become the most potent soft-power tool to turn the world into a less open, less free and more surveillance space.

It is indeed true that this crisis presents the best opportunity for fascist forces to engineer a parallel pandemic of despotism that would embolden deep-rooted resentments and frustrations in societies along religious, national and social prejudices. A societal set-up where the mob becomes the moral prosecutors and pro-bono law enforcers would definitely help in satisfying the morbidity of masses who finds the pandemic an excuse for a dangerous catharsis. The attack against Muslims in India, the linking of the pandemic to migrant population in Hungary, the furtherance of acrimony towards the Latinos and Hispanics and strengthening of border controls in USA are all testimonies to how every despot loves a good pandemic. Nevertheless, approaching the corona crisis as a crisis of industrial capitalism is also inspiring several anti-globalization activists and economists to understand the corona crisis as an avenue for radical wealth redistribution and as a way forward for catalyzing a transformative leap.

The casualities of natural events like Ebola, Zika, MERS, SARS, Influenza or now Corona are not just external shocks which are “given factors external to the economic system” (Nayeri, Our Place in the World, 27 March,2020). They are rather archetypes of how capitalist accumulation serves as the root cause of eco-social crises and how all such existential threats amplifies the overall crisis by undermining the most vulnerable groups and regions first off. The financial and economic crises kindled by corona are unearthing the structural weaknesses inherent in all the major world economic models including the USA. And this, being a far worse situation than 2008, also necessitates a coming together of various brands of political ideologies to devise fiscal policies that would help “slow, if not stop, the unfolding recession” (Goodman, The New York Times, 13 March, 2020). Societies are bound to change and look different post every major crisis and therefore, while all economic and political life was relentlessly committed to an upward redistribution of wealth for the past many decades, the anti-capitalist advocates believe that the solution to a pandemic of this scale lies in seizing the opportunity for a redistribution of financial resources as per social needs. They believe that the virus has in fact demonstrated the need for states to reorganize themselves beyond the framework of private accumulation of wealth (Damon and North, ICFI, 10 March, 2020).

The need to shift away from a market-oriented economic model  towards a  state-controlled supervision of the pandemic is best reflected in the words of the French Economist Thomas Piketty, when he talks of how “drastic state-led interventions in the economy during the corona crisis could show governments how much they can regulate the economy” (Zitelman, Forbes, 30 March, 2020). Many governments world over are being forced to take measures, unthinkable till a month back, in order to help people sail through the crisis. Paris Marx in his essay on Think (24 March, 2020) gives several such examples ranging from the nationalization of all private hospitals and health care providers in Spain to writing off mortgages in Italy to suspension of taxes, rents and utility bills for several companies in France including possible nationalization of bankrupt companies to halting evictions in USA, with states like California planning to provide shelters to at least 108,000 of its homeless. Many political analysts and economists are thus hopeful that the blind spots of capitalism and bad governance would necessitate a radical shift in political and economic practices. Consequently, they see the possibilities for a universal health care system, free medical coverage for low and middle income groups so that they do not have to dive into medical bankruptcies due to the prevailing private insurance mechanisms and an economic stimulus package that would encourage the state institutions to pump more money into the stock markets and ease off the burden of interest rates and loan debts on students and other vulnerable communities.

The renewed hope for a fundamental reorganization of society in these times comes from the understanding that this crisis has hit the capitalist model differently from the 1970’s or 2000’s as, while the virus followed the route map of global capitalism and transmitted itself world over through business, tourism and trade, its cardinal cause is also external to the economy. No scientist or economist can deny the fact that it is the fundamentals of the global capitalist model that helped the pandemic widen its target group- be it the heavy reliance of most on labour market or the grandeur of international connectivity. And these are not features specific or exclusive to any one economic policy paradigm; rather they are the essential characteristics of capitalism as such, making the corona crisis a global watershed moment. It is for this very reason that many left-wing intellectuals like William Davies vehemently talks about “how a crisis of this magnitude can never be truly resolved until many of the fundamentals of our social and economic life have been remade” (Zitelman, Forbes, 30 March, 2020).

While the neo-liberals are yet again managing to oversimplify the crisis by putting the responsibility of institutional failures to tackle the crisis on the state which they say had inadvertenly overindebted itself, the anti-capitalists too should exercise caution while clamouring for an all-powerful state in the pretext of mitigating the crisis of capitalism. Solidarity cannot be a synonym for ruthless state intervention. Nevertheless, the inoperability of many of the contemporary capitalist consumerist models under the present conditions necessitates a cultural, scientific and dogmatic alteration in the ways in which social formations are typically conceived by populations across space and time. The masses of the most advanced capitalist countries are entering this new phase of crisis not really after a period of growth and prosperity but rather after more than a decade of economic austerity and slowdown and this makes class struggle inevitable.

It is beyond doubt that the society at present is going through a phase that best represents the deficiency of a system of rule and social order based on capitalist advancement. The inadequacies of the market model have turned most of the market forces into temporary “socialists” who are waiting for the states to bail them out by passing on the unpaid bills to the working classes. The request from multi-billionaire Richard Branson for a state-supported bail-out of his Virgin Atlantic airlines with a net worth of 4 billion pounds while simultaneously asking his employees to go on unpaid leave bears testimony to how the bourgeoisie are relying on public money to rescue themselves from the chaos. However, it is the responsibility of the state systems to form the front line of defense when it comes to public health and safety and this can only be possible by discarding the austerity measures solely intended to design tax cuts and subsidies to redeem the corporates and the rich. As the endless accumulation of capital is clearly falling apart from within, all over the world, and the recklessness of consumerism is intensifying environmental degradation, a social democratic vision that couples public health measures with employment/ livelihood protection of the weakest seems to be the best way out.  

Elite Capture of resources, the continuing saga of exploitation: A case of World Bank

World Bank Aid or that matter any aid and its impact on countries has been a controversial discussion in development finance circles.  While it is true that aid provides an important source of income for poorer countries and has an effect on reducing poverty, there are debates on how the powerful and economic elites capture these resources.  It is also seen that the level of corruption is very high in aid-dependent countries and some of these resources serve their interests. 

The study Elite Capture of Foreign Aid Evidence from Offshore Bank Accountsby Jørgen Juel Andersen, Niels Johannesen, Bob Rijkers looks into this question of elite capture of foreign aid and finds that aid disbursements to highly aid-dependent countries coincide with sharp increases in bank deposits in offshore financial centers known for bank secrecy and private wealth management, but not in other financial centers. 

The paper is very controversial after the ‘Economist’ magazine carried an article on the correlation of delay in publishing of this research and untimely resignation of the World Bank chief economist,  under whose supervision the paper was produced.  The paper was subsequently published by the World Bank.  The paper  study the aid diversion by looking at World Bank aid disbursement and data on foreign deposits from the Bank for International Settlements (BIS).

The study consisted of 22 most aid-dependent countries of the World Bank.  It was seen that there were significant increases in the value of bank deposits in tax havens in the same quarter of World Bank aid disbursement.  The spike in the deposits to tax havens in the same quarter of disbursements and no subsequent hikes in quarters before and after reveals a massive siphoning of World Bank aid meant for poorer countries who also happen to be high in the corruption index. 

The study revealed that when a country receives aid equivalent to 1% of GDP, its deposits in havens increase by 3.4% relative to a country receiving no aid. The report states that at a mean about 5% of all the aid ended up in tax havens.  This ratio increases with aid dependency.  The more the aid, the more will be the leakage as is seen in the sample of countries which received 3% of GDP where the leakage rate is around 15%.

Much of the aid could be traced back to bank accounts in Switzerland and Luxembourg operated by the powerful elites from the aid-dependent countries.  This, however, is just a tip of the iceberg as it calculates only the money which has flowed into tax havens and does not include investments in real estate, gold and other luxury goods including automobiles etc. 

World Bank funding generally goes as either Development Policy Financing (DPF) or for Investment Project Financing (IPF), the latter being the one which is meant for projects which are supposed to reduce poverty.  Project financing is said to be more robust and difficult to divert given the various policies including procurement and is tied to specific expenditure. However, the study reveals that an aid disbursement of 1% of GDP is associated with an increase in haven deposits of around 2.8% when the aid takes the form of DPF and 5.3% when it takes the form of IPF, bursting the myths of higher accountability and transparency in its funding. 

While the above-mentioned study is regarding World Bank aid-dependent nations, the learning is relevant to countries like India which have also seen the capture of public resources meant for the poor and transfer of common resources to the countries elite.  The level of corruption that existed when state-dominated economy earlier continues in new ways in the post-liberalisation era.  Former Prime Minister Rajiv Gandhi in one of his famous statements acknowledged the leakages due to corruption.  He stated that only 15% of the government intended to the poor reaches them.  The situation did not change after liberalisation too.  The former deputy chairperson Montek Sigh Alhluwalia has stated based on the planning commission study on PDS that only 16 percent was reaching the targeted poor in 2009. 

In fact, the corruption scandals which involved public money being diverted to corporates have intensified after liberalisation when state-owned companies changed hands to private parties at throwaway prices or massive financial scams which seized public resources for private profit.  India has seen a phenomenal rise in billionaires who have given from natural resources and its extraction be it coal, forests and state gifting of public resources like land.    The increase in inequality post-reform period has reached such insanity that the combined total wealth of 63 Indian billionaires is higher than the total Union Budget of India for the fiscal year 2018-19 as documented by Oxfam India. 

The recent financial scams including the high non-performing assets (NPA) where corporates took loans from public sector banks but diverted its uses and fattened themselves and later got huge subsidies, tax rebates and cuts and write-offs for the money they owed to the public banks.  The study by Jørgen Juel Andersen, Niels Johannesen, Bob Rijkers though limited to World Bank aid also brings forward the issues of the capture of public resources which gets diverted for private profit.  The mechanisms and policy prescriptions by the World Bank on Public Private Partnership and newer models of the same which pushes more and more risks to public exchequer need to be evaluated in this light. 

The study calls for more transparency of public funds, strong accountability mechanisms and creation of quality democratic institutions and democratisation of existing ones to truly represent people to eliminate the elite capture of resources. 

AIIB’s review of their Environmental and Social Framework

Indian groups submit recommendations for AIIB’s review of their Environmental and Social Framework

The Asian Infrastructure Investment Bank (AIIB), after four years of its operations, is undertaking a review of its environmental and social framework. 30 Indian Civil Society Organizations submitted their recommendations and concerns regarding the process of review and it’s content and scope.

As one of the biggest recipients of AIIB’s funding, this process has significant meaning for India especially, given the context and trajectory of development followed. India, in recent times, has focused on developing massive infrastructure, which require enormous investments. This resulted in India opening itself to mega projects financed by international, national and private financial institutions. In these circumstances, it is essential for Multilateral Development Banks like AIIB to develop robust, comprehensive and strong environmental and social policies which are implemented and monitored well. To merely rely on the country systems is not enough; rather the ESF should go beyond the country system to strengthen them further. At a time when other MDBs are also undergoing review of their policies, AIIB should take a progressive leap as the first MDB from the global south to show its commitment towards building infrastructure through robust policies and with entire commitment towards protecting people and the environment.

In the four years of operation, AIIB’s membership has grown to 102 approved members worldwide and has funded 64 projects across Asia to the tune of USD12.24 billion. India alone has received investments close to USD 3 billion for the 14 approved projects. These projects include investments in energy, transport and water sectors. Of the 14 approved projects 4 are financial intermediary projects and 4 are co-financed projects. Of the current approved portfolio for India, 33.33% projects are co-financed and the other 33% are financial intermediary projects while only 33% constitutes stand alone projects. Co-financed and FI projects with current policies only bring limited liability and accountability for AIIB. The AIIB’s current ESF is not adequate to prevent risk and harm arising from this form of lending. The policy is inadequate and needs to be relooked. In its brief lending history, AIIB has funded several projects of mega scale which are been marred by massive environmental and social concerns like the Mumbai Urban Transport Project – Phase III (MUTP), Bangalore Metro Rail Project – Line R6 both projects of massive scale.  The now scrapped Amravati Sustainable Capital City Project, which was being considered by AIIB for financial support as a co-financer along with World Bank as the lead financier, also speaks volume for the need to have multiple checks and balances.

Currently, 5 projects worth USD1.7 billion are proposed for financing in India. These include energy, water and transport sector Projects. Chennai Metro Rail Phase 2 Project – Corridor 4 is one of them, which is a co-financed project. The other to proposed project to watch out for is Karnataka Rural Water Supply Project (KRWSP) worth UDS 400 million which will basically promote Public-Private Partnership (PPP) models in water supply and sanitation.

Read the full statement

Procedures for World Bank’s new accountability mechanism lacks transparency and inclusivity

In a press release issued early last week, the World Bank has announced that the review of its independent accountability mechanism, the Inspection Panel, has been completed and that a few major reforms were added to the Inspection Panel. Accordingly, a new accountability mechanism – an “expanded” one as the Bank says, called World Bank Accountability Mechanism’ will be in place from September 2020 and will constitute two separate roles – the Inspection Panel (IPN) will focus on the review of compliances of projects with Bank’s operational policies and a separate Dispute Resolution Mechanism (DRS) will resolve the grievances of affected communities, in a time bound manner, instead of compliance review. While housed under one umbrella, the DRS will organisationally be separate from the IPN to ensure its effectiveness and to avoid conflict of interests.

New Roles, Governance Structure

Independent Accountability Mechanisms (IAMs) of Multilateral Development Banks have different governance structures and varied roles with assigned functions. It is necessary to see the new reforms of WB’s IPN in comparison to the previously established roles of both Compliance Advisor Ombudsman (CAO) of the International Finance Corporation (IFC) and Accountability Mechanism (AM) of Asian Development Bank (ADB), since most of the complaints from Indian communities have been registered with these IAMs.

There were only four IAMs that offered both compliance review and dispute resolution services – namely CAO of IFC, the Complaints Mechanism (CM) of European Investment Bank (EIB), AM of ADB, and Independent Review Mechanism (IRM) of African Development Bank (AfDB). Now WB’s new IAM will also offer both compliance review and dispute resolution.

The CAO reports to the President of the World Bank Group, while the dispute resolution component or ‘problem solving function’– the Office of the Special Project Facilitator in ADB’s AM report to the Bank President, and the compliance review component – Compliance Review Panel in AM report to the Board of Directors.  The new IAM of WB will be governed by an ‘Accountability Mechanism Secretary’ (AM Secretary) who will be appointed by and report directly to the Bank’s Executive Directors. While administratively integrated in this new mechanism, the IPN members will remain fully independent and continue to report directly to the Board on all compliance investigation matters. Which effectively means, the DRS staff will report to the AM Secretary who then will report to the Board, whereas the IPN will directly report to the Board (Whereas, the CAO staff along with its three functions – dispute resolution, compliance and advisory- report to the CAO Vice President).

Organisationally in the new IAM, the IPN will have no role in DRS.  The IPN will continue to be constituted and operate as established in the IPN Resolution.

Operationally, the new IAM will apply the existing eligibility criteria of IPN for compliance for its dispute resolution function. There will be no change to the current practice of recommending eligibility, when a complaint is registered, based on the IPN’s current eligibility criteria. During the eligibility phase, the IPN recommends eligibility for compliance. After the Board has approved the eligibility for compliance, the AM Secretary will offer an opportunity for dispute resolution to the parties. If Borrower and Requesters voluntarily agree to go for a dispute resolution, the case will be referred by the AM Secretary to the DRS. The AM Secretary will inform the Board, the IPN and Management of the parties’ decision. In case the parties agree to use the DR process, the compliance process of the IPN will remain in abeyance. If the parties do not agree, the AM Secretary will inform the Board, the IPN and Management and the case will be taken up by the IPN for a compliance investigation. The Parties to the DR process would be the Requesters and the Borrower’s relevant project implementing agency.

While ADB’s AM has a slightly different approach – one can approach its problem solving function office – the Office of the Special Project Facilitator and file a complaint regardless of whether ADB operational policies and procedures have been violated ( this mandate is required only if one is approaching the Office of the Compliance Review Panel).

Meanwhile, the CAO’s Ombudsman function responds to dispute resolution complaints and if they are not solved, they are transferred to the compliance review function.

Extended Eligibility time limit for Requesters to file Complaints

Except the IPN, almost all other IAMs had established their own mechanisms much earlier. They all have longer eligibility time periods for complaints registrations than the IPN. Yet, In the case of the CAO, the eligibility ends when the institution’s engagement with the client or the project ends. Whereas for AM, the latest date by which a complaint can be filed is 2 years after the loan or grant closing date. This date is known in advance, disclosed to the public, and can be found on the ADB website. Their brochure also shows the timeline in which a complaint is processed and responded to.

For IPN, this time requirement will be changed so that any request filed up to fifteen months after the closing date of the loan financing the project can be accepted by the IPN. This requirement will be applicable only to new projects approved by the Board after these changes take effect.

Formal recognition of the Inspection Panel’s advisory role

Advisory services focus primarily on the lessons that the IAMs learn about the functioning of MDB operational policies. The advice can be given as recommendations in specific compliance reports, lessons learned sections in annual reports and in other publications. The CAO has a robust advisory policy, where the CAO provides independent advice to the President of the World Bank Group and management of IFC and MIGA.  CAO advice focuses on broader social and environmental concerns, policies, procedures, strategic issues, and trends. CAO’s focus is on preventing future harm and improving IFC/MIGA’s performance systemically as their policy states,

The IPN did not have explicit advisory authority. The IPN does provide informal advice through statements in its compliance reports and its publications, including its annual report and Emerging Lessons series. The press release states that this advisory role has been formalised from 2018.

Formalization of the Inspection Panel’s practice of coordinating with co-financiers’ accountability mechanisms on joint complaints

The World Bank engages in co-financing arrangements with other MDBs. In these cases, requesters could file requests for investigations regarding the same set of issues with the IAMs at two institutions. This always led to two challenges. The first challenge arises when one IAM receives a request regarding a project whose agreements stipulate that the policies of another institution govern the project, like the case is with Asian Infrastructure Investment Bank (AIIB). The second arises from differences in the procedures of the two IAMs, such as different time limits for eligibility and different rules on sharing draft reports with the requesters. None of the IAMs have developed any explicit policies or practices on how to deal with these situations. Instead, they have dealt with these situations by signing a case-specific MOU detailing how they will cooperate in investigating the same project. The World Bank is yet to clearly state whether these challenges have been addressed or they remain the same, irrespective of formalising arrangements with co-financiers’ IAMs.

Sharing IPN report with requesters before consideration of the Board

This procedure came into effect from 2018, but is officially declared now under the enhancements for IPN. Earlier, IPN’s investigation report was not shared with the requesters until after the Board had approved it. The requesters maintain that this had created two problems. First, the practice was unfair because requesters were being treated differently from Management. Second, requesters lack the knowledge to engage effectively with Management about the action plan.

Independent and proportionate risk-based verification of Management Action Plans

All the IAMs, except the IPN, are expressly authorized to monitor the implementation of the management action plans (MAPs) developed to address the IAMs findings of non-compliance and the outcomes of dispute resolution procedures. All IAMs that engage in dispute resolution have authority to monitor the implementation of the outcomes of the dispute resolution if the parties so request. In addition, the IAMs including CAO and those at the AfDB, ADB, EIB, EBRD and IDB have authority to monitor the implementation of management action plans developed in response to findings of noncompliance. The authority of the IAMs does vary. In some cases, the IAMs are authorized to monitor all cases in which they have made findings of non-compliance. This is the case with CAO and ADB’s CRP.  In the case of the AfDB’s IRM and the IDB’s MICI this authority requires prior Board authorization. It is usually given at the time the board approves the IAM findings on compliance and is based on a recommendation from the relevant IAM.

From September 2020, the IPN can now verify MAPs in those cases where proportion and risk criteria will include (i) urgency of redress, (ii) risk of repetitive harms, (iii) number and vulnerability. The IPN recommendation, generally, will be made after substantial implementation of the MAP or, if the monitoring report indicates lack of implementation, at any stage of implementation. In exceptional cases, upon IPN recommendation, with input from Group Internal Audit, the Board can discuss and assign verification at the stage of approval of the MAP or shortly after. This process will avoid an automatic “one-size-fits-all” approach. The benefit of this option is that the Board would be assured of receiving independent reports on the adequacy of the management action plans, but restricted to few cases only.

How the procedures fell short

The World Bank’s Inspection Panel was the first accountability mechanism (1993) of its kind for the development finance institutions, which was established as a result of people’s struggles against the Sardar Sarovar Dam Project on river Narmada in India. The tenacious campaign around this project led to the formation of the Morse Commission, which strongly criticized the World Bank’s performance in the areas of environment and resettlement of people displaced by the construction of energy projects. Over the years, the Panel has played a major role in trying to adhere to accountability at the Bank and attempting to secure redress of grievances in some cases. Though established as an independent mechanism from the Bank management, the Panel majorly reported the eligibility of the complaint to the Board of Directors of the Bank and did not possess strong recommendatory powers.

When the review of IPN was first announced officially in 2017, Indian peoples movements, civil society and affected communities had called out to the Bank to keenly call forth to strengthen the IPN mandate. While appreciating the World Bank on this effort for a review on the occasion of Inspection Panel’s 25th Anniversary, the CSOs criticised the Bank for giving less than a fortnight to seek comments on this issue. They demanded to extend the deadline by at least two months in the interest of the sanctity of the process. They further stressed that wider publicity should be given to ensure better participation in the process. “The current consultation is designed and carried out to exclude affected communities, for whom the Inspection Panel is established,” the signatories said with much disappointment.

During the deliberations in a symposium organised in India at the 25th year of IPN, in which both the Inspection Panel and Compliance Ombudsman Advisor (CAO) participated remotely, the inadequacy of IAMs in functioning independently and efficiently; lack of capacity and powers to promote and ensure accountability; failure in intervening timely to ensure that the voices of the affected people are adequately heard, addressed and issues resolved; and lack of powers to stay the progress of project construction in cases of extreme violations, were highlighted.

A brief look into the newly released report of the Bank,  ‘Report And Recommendations On The Inspection Panel’s Toolkit Review’ (March 05, 2020) shows that the external review “did not  make recommendations but provided options in seven areas: (i) advisory services, (ii) Bank Executed Trust Funds (BETFs), (iii) co-financing, (iv) sharing findings with Requesters, (v) problem solving/dispute resolution, (vi) time limit on eligibility for requests and (vii) monitoring of Management Action Plans (MAPs)”. And that subsequently, a Working Group of the Committee on Development Effectiveness (CODE) that included members from all Executive Directors’ offices, was established to consider the areas identified by the Review.

When the Bank announced in 2018 that CODE was inviting submissions from relevant stake holders, the Indian civil society had strongly asked for transparent and wider consultative processes with extended time period for affected communities. Opening up the process; adhering to the principle of free, informed and prior consent; adequate time; holding consultations widely and not in national capitals/metros alone; unmasking the ritual format of such processes; IPN having suo moto powers; IPN having suo moto powers for timely intervention – even during the early stages of project appraisal; IPN having a pro-active role even to delay the progress of any project until the violations of the project have been comprehensively corrected and compensated; IPN having monitoring function; IPN having punitive powers and measures for demanding for a fresh Environmental and Social Impact Assessment (ESIA) wherever erroneous ESIA have been found, were the recommendations from the Indian groups.

During both times, the Bank did not acknowledge the receipt of the submissions from India. Despite the recorded exhaustive measures which were being adopted by the Bank to see through this review, this process has been quite the opposite in nature– opaque, extremely limited opportunities for concerned civil society stakeholders and especially for the affected communities to share relevant inputs. The information available in the public domain was restricting in its scope and the final draft proposal was not shared, despite requests being sent by concerned groups from outside India to the Bank. This was a striking drawback, especially in the wake of IFC having faced defeat at the United States Supreme Court on the Immunity Verdict last year, on the case filed by Indian farmers and fishworkers on serious violations caused by IFC-funded Tata Mundra Ultra Mega Power Project in Gujarat India.

With the assistance of the IPN and Management, CODE identified eleven projects whose stakeholders had experience in the IPN process within the last seven years to provide feedback. The selected projects took into consideration regional representation and included projects that had gone through all the different steps of the IPN process. The procedures for arriving at this decision and who all were the stakeholders from these eleven projects is not in the public domain. This tunnel vision and consequent decision making is flawed.

The entire process lacked transparency and inclusivity.

It is further stated in the recommendations that the new Mechanism will be headed by an “Accountability Mechanism Secretary” (AM Secretary) who will be appointed by and report directly to the Bank’s Executive Directors. The AM Secretary will be responsible for planning and overseeing the processes of the Accountability Mechanism in line with agreed procedures and will be responsible for keeping the records of the AM proceedings. She/He will also oversee the Dispute Resolution Service. All staff of the Accountability Mechanism will report to the Accountability Mechanism Secretary with the exception of the Inspection Panel members, who will continue reporting to the Board of Directors. The DR process would have a one-year time limit in order to provide assurance that the process is not prolonged and incentivize the parties to reach an agreement. This administrative challenge is going to present problems with the affected communities who would find it challenging – in the first place to finish the eligibility process of their complaint in English language, the wait during delayed timeline of these complex processes and now having to identify whether they need a compliance review or a dispute resolution.

While it is appreciated that requesters of complaint can submit their grievances beyond project closure (for new projects with effect to the new change in IPN), a distinct DRS will be operational in six months, and an independent and proportionate risk-based verification of Management Action Plans would be established as an additional assurance, they still do not address the fundamental questions ever posed at the Bank by the communities. Will these changes impact the affected people in any positive way? The tight schedules and methodologies lacked a genuine effort for meaningful consultation. Currently, the onus of identifying Bank’s lending to a particular project, understanding the Bank Operational/Safeguard Policies, knowing about the existence of IPN and developing a complaint in a manner acceptable to IPN is on affected communities. This structure disempowers the communities for they are never consulted in advance with full disclosure of impacts, lenders and of compensation/rehabilitation for their losses in most of the projects. Hence in projects, IPN has knowledge about serious impacts, it should have powers to take suo moto investigation as well as actions. Particularly in cases of high risk or ‘Category A’ projects, knowing the potential irreparable consequences, the IPN should proactively look out for the involvement of the potentially affected communities and facilitate their observations/complaints. Sadly, none of these reflect in the “enhancements” mentioned in the review report for the mechanism which boasts of 27 years’ wealth of documented information and engagement with affected communities and civil societies all around the world.

A Case which made World Bank Legally Accountable

On February 27, a year has passed since the Supreme Court of the United States ruled in a 7-1 judgment that World Bank does not enjoy absolute immunity. The judgment shook the foundations of the financial world, which hitherto enjoyed absolute immunity for whatever consequences their lending led to. It’s not business as usual for them anymore.

It empowered the communities around the world, who have always been at the receiving end of lending to big projects – be it big dams, mining, plantations, energy or infrastructure projects. Already two cases – one from Honduras against the private sector arm of the World Bank, the International Finance Corporation (IFC) and another from China against the World Bank – are currently being considered by different courts in the US.

First, a recap of the case, which led to this landmark judgment.

IFC lend $450 million to Tata Mundra (Coastal Gujarat Power Ltd) – a coal-based thermal power project in Kutch, Gujarat in 2007. The fishworkers, who are severely affected by the project construction as well as the effluence from the project, were not even considered as project-affected, let alone any compensation for their loss. Not just the fishworkers, thousands of farmers, salt pan workers and cattle herders were neither considered, nor compensated.

The affected communities, under the aegis of Machimar Adhikar Sangharsh Sangathan, approached the accountability mechanism of IFC, the Compliance Advisor Ombudsman (CAO) in 2011. After two years of investigation into the violations of IFC’s policies, CAO confirmed nearly all concerns raised by the people in their complaint, holding IFC responsible for the violations and oversight.

Instead of taking it as an opportunity for course correction, IFC chose to ignore the findings first, when pressure was mounted on them from far and wide, they engaged different agencies to conduct a series of studies, which should have done before the project was approved. The findings of those studies were never made public.

The Government of India allowed CAO to visit the project site only once post the report. Their requests for permission to visit the project to monitor the progress of compliance of the policies where declined time and again. Sab ka saath, Sab ka vikas slogan is preserved for the privileged. Riding on the immunity claim of IFC and a government that loathes any independent assessments of projects or situations like in Kashmir, the company continues to ignore people’s concerns.

Having given the project in a platter by the government in 2006 under the newly planned Ultra Mega Power Projects, this project every sop, until Indonesia, from where the coal was procured, revised their coal tariffs. It took the financial viability of the project for a tailspin. In January this year, the company wrote to the Power Ministry that they could not run the project beyond the end of February because of losses. Earlier this week, they wrote to the states who have a Power Purchasing Agreement with them – Gujarat, Haryana, Rajasthan, Punjab, and Maharashtra – that they won’t supply power to them unless the tariffs are revised.

While the company is keen to mitigate the loss by all means, the loss of the people and of many generations, caused because of their project, continued to be meted with indifference and arrogance.

In 2015, the fishworkers and farmers approached the US court – the DC Circuit Court, to hold IFC liable for the livelihood loss their lending caused. IFC claimed immunity from court cases. The Circuit Court and thereafter, the Appeals Court upheld IFC’s claim. Finally, the Supreme Court took it up for an oral hearing and ruled that IFC and its parent body, the World Bank, do not enjoy absolute immunity.

The judgment was meted with disbelief by both sides – obviously for different reasons! Having engaged the best legal batteries to lose the case was beyond IFC’s comprehension. That the Davids can take on the Goliaths even today was a revelation to the communities in Mundra, and around the world.

Having settled the immunity issue, the case in US returned to the DC Circuit Court for hearing on the original petition of IFC’s liability. Again, trying to dodge responsibility for the damages they caused, IFC raised issues of jurisdiction and other legal technicalities. A week before the first anniversary of the immunity case, the Circuit Court ruled in favour of IFC, opening up the road for a long legal battle.

Meanwhile, the condition of the people on the ground went from bad to worse. Because of the effluence, the fish catch went down drastically. Fly ash and coal dust falling on the crops and grazing land made agriculture difficult and animals sick. The intake channel and the continuous dredging of it, expanded the land affected by sea ingress, turning large tracts of agricultural land barren.

A part of what IFC has been paying to its lawyers for defending and covering up their violations would have helped restore people’s livelihood. World Bank Group, a leader amongst the multilateral development banks across the globe, has failed in this case to ensure that people are not left to perish while pushing “prosperity for all”.

Joe Athialy is a social activist based in New Delhi

US Federal Court Rules in Favour of IFC in Tata Mundra Case: Fishworkers and Farmers to Challenge Decision.

IFC hides it shame & guilt behind technicalities of jurisdiction

Kutch, Gujarat / New Delhi: The fishworkers and farmers of Mundra affected by the Tata Mundra Power project will challenge the ruling from a federal judge in the District of Columbia, United States, that the International Finance Corporation (IFC) – part of the World Bank Group – is immune from being sued for damages inflicted as the commercial activity was not carried on in the United States. IFC has been granted immunity for lack of subject matter jurisdiction.

In a long legal battle to hold IFC liable for the social and environmental damages caused by the Coastal Gujarat Power Ltd (Tata Mundra) co-financed by IFC, which started in 2015, the community won a decision from the U.S. Supreme Court last year that the IFC does not have “absolute” immunity to all lawsuits. On Friday evening, United States District Judge John D. Bates again granted the IFC’s motion to dismiss, finding that the IFC is immune under the facts of this case.

The court took a narrow view stating that, “the mere fact that someone in the United States approved a letter that defended IFC’s approach to environmental and social risk management for the Tata Mundra project and announced that IFC will consider certain suggestions raised by the CAO is not sufficient to establish that plaintiffs’ complaint is based upon conduct carried on in the United States”.

It is not only unfortunate but also unethical and legally liable, that in spite of causing irreversible damage to the fragile ecosystem of Mundra coast, destroying the livelihood of thousand of fishworkers, farmers, saltpan workers and cattle grazers IFC gets to hide behind the technicalities of law. When there is growing documentation on IFC’s failure in upholding their own safeguard policies, which was confirmed by its own accountability mechanism – the Compliance Advisor Ombudsman (CAO), the courts have provided immunity on technical grounds.

Budha Ismail Jam, a plaintiff in the case said,  “We are disappointed by the decision, but are determined to take this fight ahead. To save our livelihoods and protect our environment for future generations, we do not see any other way. We know we are up against a wealthy and powerful institution, but we are determined to make our voices heard. We will continue to seek justice.”

“The IFC refuses to be held accountable for the damages this plant is inflicting upon farmers and fishers in Gujarat, but no institution is above the law,” added Richard Herz, Senior Litigation Attorney at EarthRights, who pleaded the case. “Even the IFC’s own accountability mechanism criticized the IFC’s role in the project, finding myriad failures. The IFC has not denied causing harm, and it is unconscionable that it would claim immunity when it harms local people.”

Tata Mundra Power project has been a complete failure. Recently, Tata power had announced to the Union Ministry of Power that Tata Power might be forced to stop operating its imported coal-based Mundra ultra-mega power project. From the violation of national laws to the failure to apply the environmental and social safeguards, from environmental and social destruction to financial disaster, to failed policies of energy security, this project is a case study of what should not be done. IFC has been an active participant in this story of financial failure and environmental and social damage by rejecting the findings of its own compliance mechanism. Instead of hiding behind the safety of technical aspects of law, IFC’s focus should be on using its resources to restore the environment and livelihoods of those negatively affected by this power plant.

Download judgment: https://www.cenfa.org/wp-content/uploads/2017/06/Jam-Opinion-granting-2019-MTD.pdf

For background & more information: https://www.cenfa.org/projects-in-focus/tata-mundra-ultra-mega-project/

Contacts:

Dr Bharat Patel
Machimar Adhikar Sangharsh Sangathan
+ 91 94264 69803
bharatp1977@gmail.com

Joe Athialy
Centre for Financial Accountability
+91 98711 53775
joe@cenfa.org

Tata Mundra Ultra Mega Power Project: A decade of disemPOWERing communities

Almost a decade after the construction for the Tata Mundra Ultra Mega Power Project and eight years since the operations of the project started, a revisit to Mundra tells the story of the destruction of livelihoods, environment and disempowered communities. The project was envisaged as India’s first ultra mega power project that would add two percent to total generation capacity in India and provides power to 16 million people in five states. It would also supply cost-competitive power to manufacturing industries and services. What was not assessed was how the project would impact the most marginalized communities in Mundra whose life and livelihood were based on Mundra’s unique biodiversity and ecology.

The Project:

The Project is a 4000 megawatt (MW) power station, comprising five 800MW units, in Gujarat, India. The plant was commissioned in 2012-2013 as part of the Government of India’s ambition to develop large capacity projects at the national level of 4,000 MW capacity each under tariff-based competitive bidding route using super critical technology on build, own and operate basis. A consortium of Banks including multilateral agencies and Exim Banks invested in this project, which costs US $4.14billion. Both the International Finance Corporation(IFC) and the Asian Development Bank(ADB) have put US$ 450 million each. The project since its inception has been marred with environmental and social concerns.

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In 2011 the fishworkers affected by the project filed a complaint with the accountability mechanism of IFC regarding the violation of IFC’s operational guidelines. A similar complaint was filed with the accountability mechanism of ADB in 2013. Despite reports by accountability mechanisms confirming the concerns of the community of largescale social and environmental damages due to the project, largely the management rejected the reports and a flawed remedial action plan was drafted; which till now has not been implemented properly. In April 2015 the fishhworkers, represented by Earth Rights International, filed a suit against IFC in federal court in Washington D.C., where the IFC is headquartered. In July 2015, the IFC filed a motion to dismiss the complaint arguing that it is entitled to “absolute immunity” from suit in US courts under the International Organization Immunities Act(IOIA). In February 2019, in a historic 7-1 decision, the U.S. Supreme Court decided that international organizations like the World Bank Group do not enjoy absolute immunity, giving hope to the community to go ahead in their fight to hold IFC responsible for the damage caused to them.

 The Decade:

Ten years since the project’s construction was started, and after eight years of its operations, the fishworkers of Tragadi bandar (harbor), Kothadi bander, and Navinal, (who were impacted by the in-take and outtake channels of the project) are left on the verge of poverty. With the consistent decline in fish catch due to hot water discharge from the outlet channel, destruction of mangroves and creeks, the fishworkers are now finding it very difficult to maintain their basic living standard. During a conversation with fishworkers on Tragadi gaon, most fisworkers complained of the debt cycles they were caught in. One of the fishworkers, Jam Buddhabhai said, “We used to take loans earlier as well from the merchants who come to buy our fish but we were able to pay the loans in one fishing cycle (9 months) but for the past 3 years the cycle has been unending.” Most fishworkers have also started looking for daily wage work on days they are not fishing which is difficult for them to find as their skill and knowledge both are is of the world of the sea. mundra6-2

Another important change has been the death of pagadia (on foot) fishing. With creeks blocked and mangroves destroyed the fish closer to the sea have almost become negligible. Most of pagadia fishworkers have started working either as wage labour worker for people who own boats. Prawns and lobsters, which were found close in the creeks and mangroves, have declined drastically. Even for fishworkers who had been fishing on boats now don’t find much fish catch near the coast. They recall that in 2010 they would catch fish to capacity in a boat twice and did not have to go beyond 2 to 3 kilometers in the sea. Today, they have to venture at least 8 to10 kilometers in the sea to find fish. This has increased the input costs and the risk they have to endure for fishing. From increase in diesel cost, to having to stay put on the boat for days and not come back to save costs of fuel, risk of fishing gear damage by ships, with endless wait to find the fish catch, past ten years have left the fishworkers struggling to make their ends meet.

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Women, the Most Affected:

This decline in fish catch has left the women from fishing families in a worse condition. Women were mostly engaged in sorting, grading and drying fish once men bring the fish catch. They would also sell the certain small fish in the local market, which would contribute to their personal income. This has totally stopped. With the decline in fish catch, there is just enough for household consumption and selling to the merchants who sell for export. In Tragadi village, the fishworkers families traditionally went to Kotadi bander to stay during the fishing season. Once the in-take channel of the project was built the access route to the bander became longer. They no longer accompany menfolk to the bander now. With an increase in travel costs, the decline in fish catch and men having to be in the sea for days together to catch fish, it became difficult for women to stay at bunder. In a conversation with fishworker women in Tragadi village they feel helpless that they can’t contribute to the work or income and keep sitting at home the entire day. The quality of life, personal expenditure, movement and economic independence have all been affected. One of the girls form the community who is now 18 years old, Asifa told us, “we remember a time our mother gave us money when they would come back from markets. We all had piggy banks and our small savings, it’s been long since I have seen that in any home now.”

Farmers & herders:

The situation of the farmers and cattle rearing community is not any better. The years of operation of the plant, with in-take channel bringing seawater deeper into the land has resulted in the drastic increase in the salinity of water. This has severely affected the agriculture in the area. In our conversation with farmers from Navinal, Mota Kandagara and Siracha, with the groundwater turning saline, the farmers have to rely on rains as bore well water is no longer fit for irrigation and where people are still using bore well water for irrigation, the quality of crop has turned bad. This has not only made farming unpredictable because of uncertainty of rains but has also changed the traditional agricultural. Crops like peanuts and chiku can longer be grown. Even for crops, which are grown traditionally like cotton, dates, bajra the production has reduced and the quality deteriorated. Many farmers have just left farming, as it is no longer bringing any income. Many have just left their fields unattended and now seek daily wage labour work. Apart from that the coal dust and fly ash that settles on the crop deteriorates its quality specially cotton which becomes black in colour and dates (coal dust and fly ash allow water to settle on it which ruins the fruit). This has resulted in a steep decline in the market value of these crops. The farmers in Navinal said that, “Once our cotton crop used to fetch the same value in the market as Bhuj cotton but today, the story is different. We are paid less than half of what Bhuj farmers will get for cotton but its understandable ours is black in colour.”mundra4-4

The situation of the cattle rearing community is no different. With grazing grounds having been acquired for the project, they are left with no other option but to buy fodder for their cattle. Tata and Adani (both having acquired land for the power projects) both are providing some fodder daily for cattle but that is much less than what is required. Most of the fodder has to be purchased. Also, whatever little grazing land is available has become barren due to increase in salinity of ground water. Also, fodder which is bought from local farmers and a few grazing lands are covered with coal dust which when eaten is resulting in increased cases of cattle falling sick. Premature births, increase in mortality rate and skin infections in cattle have become common. Now in desperate situations, cattle rearers have started migrating with their cattle to other talukas (blocks) in Kutch for grazing.

Air Pollution & Effluents:

The operations of the project and the conveyor belt have resulted in increase in air pollution in the region. Respiratory disorders have become common. The air pollutant display machine outside the plant is always switched off in spite of it being mandatory for them to display pollution levels at all times. Fishworkes also have to face severe skin infections. Chemical water discharge from outlet channel has caused severe skin infections in fishworkers due to long exposure chemical hot water discharge. Salinity increase has also impacted the drinking water, which has also become saline. Even though Tata provides tankers at Tragadi bander and an RO plant in Navinal village, this is not sufficient. Most people have to buy water from tankers or if they cannot afford it they mix ground water with little drinking water that is provided to meet the water requirement. Cases of kidney stones and joint pains have become common among the population consuming water with such high salinity levels. mundra2-5

Given this situation of the communities impacted by the project, it is only ironic that on its official page, IFC states that, “CGPL’s community outreach initiatives focus on improving education and healthcare, increasing access to safe drinking water and energy, natural resource management, and infrastructure improvement. The initiatives also focus on improving income generation and livelihood opportunities, empowering women, enabling access to government development schemes, and strengthening community based institutions.”

After pushing people to poverty, depleting and destroying their livelihood, damaging the marine environment, being responsible for increased pollution levels and taking away the economic independence of women these claims seem nothing but disingenuous. This project is a classic example of a failed due diligence and economic assessment with the project also running into losses. With enough measures for the rescue to the company, it is the project-affected community that has been at the receiving end of the forced development.

AIIB’s newly wrapped ESG investments

AIIB’s newly wrapped ESG investments: Asia ESG Enhanced Credit Managed Portfolio Project

After fifty investments being approved and many more in pipeline, along with much criticism against India’s Infrastructure Fund [IIF], National Infrastructure Investment Fund [NIIF], IFC Emerging Asia Fund and Asia Investment Fund, two months ago a new partnership has been announced by Asian Infrastructure Investment Bank [AIIB] with UK’s Aberdeen Standard Investments [ASI] for AIIB’s Asia ESG Enhanced Credit Managed Portfolio Project.

As part of their initiative ‘Sustainable Capital Market’, under which this portfolio is categorised, AIIB intends to promote investments in corporate, green and quasi-sovereign bonds in infrastructure related sectors in Asia. Announced to boost ESG investment and with the target of returns at a rate of 5-7%, these bonds would be screened, assessed and managed on ESG principles laid down by the AIIB’s Environmental and Social Framework and managed by ASI who is globally the leading asset manager in ESG investments. ESG score, according to AIIB and ASI, would be created using information provided by corporates and third party rating providers.

According to AIIB, it will evaluate among other factors, a firm’s trajectory and its willingness to improve its ESG standards, once they benefit from this fund. Their framework is also designed for AIIB to engage when triggers such as firm’s reputational risks or strategy shifts happen and put the securities of these firms under watchlist. Meanwhile, ASI believes that conditions are “ripe” globally for investments in Asia over the next five to ten years, since “influential asset owners” have already started making the transition to ESG investments. AIIB also intends to invite other financial actors like insurance firms, pension funds and sovereign wealth funds to invest in this portfolio once it is established.

What are ESG Funds?

Funds which claim to have environment social and governance aspects reinforcing all their investment activities are broadly called ESG investments or funds. Originally launched by the mutual funds industry, ESG funds have sustainability as the generally underlying theme. Under SEBI’s guidelines, these funds come under thematic funds and focuses on non-financial actors like environment, climate, impact investing, best practices, resource efficiency, employment, supply chain issues, governance etc. to try to manage a firm’s strengths and weaknesses. In short, these funds invest in stocks of companies that has no reported violations of environment damage and social risks. An elaborate list would be – water, waste, plastics, circular economy, biodiversity, deforestation, toxic emissions, pollution, clean energy, carbon footprinting, decarbonisation, transition economy, energy efficiency, working conditions, health & safety, equal opportunities, staff retention, training & development, labour relations, talent retention, collective bargaining, modern slavery, child labour, supply chain issues, inequality, lack of access to resources, land rights, food & nutrition, data privacy, community relations, anti-bribery & corruption, audit issues, board balance, board diversity, remuneration, business ethics, director independence, shareholder rights, accountability, cyber security and tax.

There are also ESG assessment reports published annually by Principles for Responsible Investment [PRI], which is a voluntary self-regulation platform formed in 2006 by corporate and financial actors. PRI is endorsed by UNEP Finance Initiative and UN Global Impact. According to their website, “the six principles for responsible investment are a voluntary and aspirational set of investment principles that offer a menu of possible actions for incorporating ESG issues into investment practice.” Reporting is done through the assessment reports based on self-defined criteria and indices as part of ongoing learning and development. The report also documents ESG indicators covering asset classes like farmland, forestry, infrastructure, equity funds, hedge funds etc. The irony is these principles were created by the investors themselves and more than 2000 companies have signed, including the top ten leading global investment companies. There has been attempts to integrate ESG investments in real estate industry as well, since ever increasing rampant infrastructure projects directly involve capital, labour and especially land intensive activities. In India, Kotak Mahindra Asset Management Co. Ltd was the first asset management company to sign PRI in April 2018.

India’s first ESG fund was launched early this year by Avendus Capital Public Market Alternate Strategies. Avendus Capital, which already manages India’s largest hedge fund, seeks to raise USD 1 billion through international and national market for their Avendus India ESG fund to invest in listed equity companies. Among the members of their advisory panel is former Deputy Governor of RBI, Dr. Rakesh Mohan.

SBI Mutual Fund renamed its SBI Magnum Equity Fund to SBI Magnum Equity ESG fund which became first ESG Mutual fund of India. Three months ago, Quantum Mutual Fund launched India’s first ESG Equity fund, Quantum India ESG Equity Fund. National Stock Exchange has also introduced NIFTY 100 ESG and NIFTY 100 Enhanced ESG indices, and Bombay Stock Exchange has S&P BSE ESG index, as thematic indices.

Yet another evasive investment of AIIB

With its founding principle of being a clean, green and lean multilateral development bank, AIIB has always been under the scathing review of civil society and peoples’ groups for non-compliance to its own policies and for the aggressive pace of investments which they package in different ornamentations such as their founding principles and as a friendly bank from the global south.

While it is seemingly appreciable that firms are made to adhere to such standards in this particular ESG credit portfolio, the larger picture is strikingly clear – funds and investments are now packaged under the semblance of ESG to make it more attractive and investible for private players. We have been stunned earlier by observing multilateral development banks recklessly aiding the wealth extraction of private players through many such funds, policy influences and reputational privileges in the name of development projects globally. We have seen them sans any accountability also with huge funds channelled through financial intermediaries which does not require disclosures yet.

AIIB’s recent investments in India were approved last month which focus on financing renewable energy, power transmission & distribution and water infrastructure construction projects in India – the Tata Cleantech Sustainable Infrastructure On-Lending Facility with financing plan of USD 75 million and the L&T Green Infrastructure On-Lending Facility with USD 100 million. Both claim to increase the supply of renewable energy through mobilizing private capital investments in order to align Government of India’s plan to reduce carbon intensity under the Paris agreement. Objections have been raised and it is known that AIIB’s ESF policy itself is under review. It is nonsensical that they continue expanding, not just with 100 member countries but with investments already loaned out to the tune of USD 9.64 billion in a span of four years, while in the process of getting their policies and directives in place! And talk about not having a robust ESF system in place, while the larger and older MDBs like World Bank and IFC continue conducting periodic reviews of their robust policies!

And here we are, repeatedly manipulated with the branding and wrapping these funds are allowed to come in to our country, now robed with ‘ESG’. This is just another contriving moment for AIIB with the initial USD 500 million tied to the bandwagon, beginning to exploit this new ‘investible’ ‘green’ opportunity.

AIIB’s Opaque Policies Under the Garb of Green Investments

AIIB has come under severe criticism over its opaque policies with regards to Financial intermediary (FI) investments as well as its over-reliance on and delegation of power to the FI client. AIIB currently has 3 active FI projects out of 10 approved projects and one in the pipeline. Of the three, Indian Infrastructure Fund was approved in 2017, National Investment and Infrastructure Fund was approved in 2018, and L&T Green Infrastructure On–Lending Facility was approved in 2019. Another project in the pipeline is Tata Cleantech Sustainable Infrastructure On-Lending Facility, which is in waiting for board approval.

The common thread in all these projects is their objective to mobilise private capital for investments in subprojects that will support an increased supply of renewable energy generation. This would also include support for large renewable energy projects. Another common thread is an absolute lack of information on any of the sub-projects of these FI investments, even for the ones that were approved two years back.

Currently, in the Indian context the central government has claimed there would be 40,000 MW capacity in solar parks by March 2022, twice as high as the earlier target. This target means solar parks alone would contribute to 40% of India’s installed solar capacity in the next three years. The government has so far approved 42 solar parks with a capacity of 23,449 MW. Some of the parks have a proposed capacity of less than 500 MW[5]. There have already been concerns regarding solar sector being pushed for land-intensive utility-scale projects rather than focus on decentralized, rooftop or building-integrated small-scale solar. There has been slow progress in the governments over-ambitious and unsustainable plans of setting up solar parks owing to land acquisition issues. Solar parks in Bhadla (Rajasthan), Anantapur (Andhra Pradesh) and Pavagada (Karnataka) are hosts to over 2 gigawatts (GW) solar parks have already seen protests on issues of land acquisition. In an article, Priya Sreenivasan for Down to earth points out that, “Most parks, developed by nodal

Government agencies identify low-yield land and lease it from the farmers on 25-to 28-year-agreements, a win-win situation for everyone involved as the farmer has a steady flow of income. But in practice, the land acquired by developers isn’t always “barren”. With no clear penalties and regulations that draw the line on land quality, fertile cultivable land is often procured to build solar power plants.[6] ”

In this context, it would not be incorrect to assume that there is a high probability of AIIB finance being invested in some of the big Solar Projects through its FI investment which seems to focus around large renewable also. With its current non-transparent policies, lack of information on projects, are we heading for the same disastrous that we have seen in India with FI projects funded by IFC in the past. It almost seems that these institutions have not learned lessons from their predecessor institutions like IFC whose support through FI investment to a coal-fired power plant GMR Kamalanga Energy Ltd, a company set up to develop and operate a large coal-fired power plant near Kamalanga village in Odisha, led to the first FI complaint ever with their accountability mechanism. This complaint had far-reaching implications with regards to policy changes. Today, IFC discloses information depending on the type of FI client.

AIIB currently does not include information about sub-projects funded through any client FIs on its website. No information at all is publicly available on the sub-projects supported by the three FIs in India. This leaves potentially affected communities in the dark about their rights to know both who is behind the project affecting them, and that the AIIB’s E&S standards should be applied. AIIB also delegates decision-making around risk classification and E&S management entirely to the FIs in which it invests. One of the defences of the AIIB management has been using to questions raised by civil society on lack of information with regards to FI has been the support for green investments. Is renewable now being used as a language for justifying lack of transparency and information? There are two important concerns at hand here:

  1. Transparency and accountability is not a choice. It is the basic set of principle for any financial institution needs to comply with when making investments, especially for development projects.
  2. The assumption of renewable projects not having any environmental and social implications is problematic. Large projects have impacts on land, ecosystems and environment even if they are renewable. In countries like India, where land remains the main source of livelihood, lack of stringent, transparent policies will end up in the same trap as for fossil fuel-based energy projects. Land acquisition and loss of commons remain issues of concern for community, and lack of information on projects will raise questions regarding the projects’ development effectiveness even if it is a renewable energy project.

It is time that institutions like AIIB stop using excuses to be non-transparent and unaccountable. Accountability and transparency are non-negotiable values for institutions and especially for institutions form the Global South where communities have faced repercussions and have put up a fight against the opaque policies of Multilateral Development Banks like the World Bank Group.

Inspection Panel’s Report on Amaravati Project only Validates the Issues Raised by CSOs

For immediate release

Inspection Panel’s Report on Amaravati Project only Validates the Issues Raised by CSOs

July 26, 2019: Confirming the concerns raised by the communities and civil society organisations, Government of India withdrew its request from the World Bank for financing Amaravati Capital City Project to save itself from an investigation by Bank’s accountability mechanism – the Inspection Panel. It was confirmed by the report– dated March 23, 2019 – released by the Panel on July 23, 2019. An investigation into the project would have brought to the fore the monumental violations of Bank’s policies vis-à-vis social and environmental, as was in the case of Sardar Sarovar (Narmada) dam and Tata Mundra projects in the past. This confirms that Government of India is aware of and want to hide the violations due to the irresponsible execution of the project.

In its final report, which was published on July 23, 2019, Inspection Panel, while noticing multiple violations and lapses in the World Bank-funded project, had stressed for the need to have detailed investigation.

WGonIFIS, a collective of over 90 people’s movements and civil society organisations from across India, demand that the Government of India and the Government of Andhra Pradesh immediately conduct an independent review of the Amaravati Capital City project to look into the socio-economic damage, land transactions and psychological trauma witnessed by agricultural, coastal, and pastoral labourers, tenants, landless families, and the most vulnerable communities due to the land acquisition and displacement process.

An independent enquiry and prompt action on the findings will deliver justice to people who otherwise, with the Bank management, central and state governments and the investigating agency Inspection Panel have conveniently washed off their hands, the affected communities are yet to receive justice and strong response to their call for accountability.

Summary of the Panel’s report:

The Inspection Panel, which visited the Amaravati Capital City site to “carry out an investigation into the alleged issues of harm and related potential noncompliance with livelihood restoration requirements of the Bank’s Involuntary Resettlement Policy,” had submitted its ‘Third Report and  Recommendation  on India:  Amaravati Sustainable  Infrastructure  and Institutional  Development Project’  to the Board of Executive Directors of the World Bank on March 29, 2019.

The Panel in its report pointed economic displacement; uncertainties regarding livelihood restoration of both landless labourers and landowners; lack of specificity of Project documents; strong assertions of the complainants and Bank Management; timeliness of implementation of Master plan; immediate assistance to the most vulnerable families; and lack of cohesive data and methodology of independent assessment and third party monitoring report.

The Panel observed, “It is important that people not only have access to temporary jobs but obtain more long-term income-generating opportunities to ensure livelihood restoration, which is the ultimate objective of the Bank’s involuntary resettlement policy”. The Panel also expressed concerns about the delay in addressing the needs of 21,374 landless labourer households, who lost their source of income about four years ago.

Recognising that the Land Pooling Scheme at this scale has never been implemented anywhere in the world and that this may be established as a model for similar initiatives in future, the Panel emphasised the need to investigate the harms. Though the Management asserted that LPS farmers have received adequate compensation, the Panel questioned whether it is possible to establish with certainty that the compensation meets replacement value and noted that the affected landowners will bear the ultimate financial risk.

The documents of Bank’s Management on the exact implementation of the livelihood restoration lacked specificity. The Panel also noted that the Project documents do not refer to a labour market analysis assessing future jobs that will be created in the new city and the skills necessary to match these jobs. The Panel observed “about 45 per cent of Project Affected Persons within the footprint of the Bank-financed roads are illiterate, and many have farmed their whole lives. Therefore, they may lack financial literacy, as well as business and investment know-how, to successfully avail themselves of this alternative.” Moreover, the Panel stressed that the larger concern of drastic ‘imposed’ social change during the lifestyle transition from rural, farm-based livelihoods to urban non-farming livelihood inherently involves a high risk of impoverishment.

While the Panel acknowledged that the implementation of the Bank Project has not yet started, the Panel remarked that the design of the Project is based on government activities and the welfare schemes that are already under implementation and have encountered certain challenges. And, these challenges may continue under Bank Project implementation.

Though the complainants, activists, peoples’ groups and CSOs had always raised other larger issues of this flawed project – namely lack of consultation and participation of affected people, multi-crop fertile lands getting converted to urban concrete jungles, food security issues, and most importantly coercion and intimidation by the previous government and the police, and at many instances by landlords too – all of these are shelved aside in the Panel’s report explaining the rectifying actions and project design by the Bank Management.

As the World Bank is no longer financing the project, the Panel updated its report and withdrew its recommendation to investigate the project. However, it is noteworthy that the Panel’s reports majorly relies on three reports: World Bank’s Independent Assessment on Land Pooling; Crisil’s note on Land Pooling Scheme for Development of Amaravati; and the Third-Party monitoring report of Vasavya Mahila Mandal, an NGO which deals with the grievance redressal mechanism of Andhra Pradesh Capital Region Development Authority (APCRDA). Despite multiple requests for accessing the reports, these reports have not been made public.

About the Project: 

After bifurcation of the erstwhile Indian state of Andhra Pradesh in June 2014, both the new states of Telangana and Andhra Pradesh decided to share Hyderabad as capital for ten years. In September 2014, N Chandrababu Naidu, the former Chief Minister of Andhra Pradesh announced Amaravati as the proposed capital city, to be developed over many years. The World Bank and AIIB were under consideration to finance the USD 715 million project.

Even in its risk assessment, World Bank had assigned this Project category A, signifying the social and environmental impacts. The project was criticised for building the city on the floodplains of river Krishna, diverting fertile farmlands and forests, displacing around 20,000 families, forcefully acquiring lands, and favouring contractors for the construction of the city. A complaint with the Inspection panel (Independent accountability mechanism) of the World Bank has been filed by the affected community in 2017 to investigate the project for violation of the World Bank’s safeguard policies. This complaint was under process, and the Board of the Bank was waiting for the recommendation on the eligibility of investigation from the Inspection Panel.

For more info: Encroachment of Nature, People and Livelihoods: A Case of the Abusive, Greedy and Failing Amaravati Capital City (2014-2019)

More information about the project also available here.

Contact details:

  1. Tani Alex
    Centre for Financial Accountability
    +91 96500 15701
    tani@cenfa.org
  2. Ankit Agrawal
    Working Group on IFIs
    +91 95603 61801
    wgonifis@gmail.com

विश्व बैंक के बाद, एशियन इन्फ्रास्ट्रक्चर इन्वेस्टमेंट बैंक ने अपना निवेश अमरावती कैपिटल सिटी परियोजना से वापस लिया

प्रेस रिलीज | २३ जुलाई २०१९

विश्व बैंक के बाद, एशियन इन्फ्रास्ट्रक्चर इन्वेस्टमेंट बैंक ने अपना निवेश अमरावती कैपिटल सिटी परियोजना से वापस लिया 

चीन के नेतृत्व वाले एशियन इन्फ्रास्ट्रक्चर इन्वेस्टमेंट बैंक (AIIB) ने आंध्र प्रदेश के अमरावती कैपिटल सिटी परियोजना से हाथ खींच लिए है। विश्व बैंक द्वारा पिछले सप्ताह अमरावती परियोजना से अपना निवेश वापस लेने के बाद इसके प्रवक्ता लॉरेल ओस्टफील्ड द्वारा यह निर्णय एक समाचार एजेंसी को संप्रेषित किया गया।

एआईआईबी कुल $715 मिलियन की परियोजना में से $200 मिलियन के वित्तपोषण पर विचार कर रहा था, जबकि विश्व बैंक $ 300 मिलियन पर विचार कर रहा था।

चार साल पुराने एआईआईबी ने इससे पहले कभी भी किसी परियोजना से अपना निवेश वापस नहीं लिया है।

समाचार एजेंसी रॉयटर्स ने लॉरेल ओस्टफील्ड के द्वारा कहा, “एआईआईबी अब फंडिंग के लिए अमरावती सस्टेनेबल इन्फ्रास्ट्रक्चर एंड इंस्टीट्यूशनल डेवलपमेंट प्रोजेक्ट पर विचार नहीं कर रहा है।” एआईआईबी इस परियोजना को केवल एक सह-वित्तदाता के रूप में देख रहा था और इसमें विश्व बैंक की सुरक्षा नीतियों का पालन करना था। विश्वबैंक केपरियोजना से बाहर निकलने के फैसले के बाद, एआईआईबी के इस फैसले पर गहरी निगाह रखी जा रही थी।

इस परियोजना के कारण हुए भूमि अधिग्रहण और विस्थापन के गंभीर दबाव और भय के कारण हुए सामाजिक-आर्थिक नुकसान से हज़ारोंमजदूरों, किरायेदारों, भूमिहीन परिवारों, एवं दलितों समुदाय के लोगों को नुक़सान पहुँचा है। इन मुद्दों के साथ ही परियोजना की वित्तीय गैर-व्यवहार्यता और स्वैच्छिक भूमि-पूलिंग के नाम पर उपजाऊ भूमि के बड़े पैमाने पर हुए कब्जे को जनांदलोंऔर नागरिक समाज संगठनों ने सरकार, एआईआईबी व विश्व बैंक के समक्ष कई बार  उठाया गया।

वर्किंग ग्रुप ऑन इंटरनेशनल फाइनेंशियल इंस्टीट्यूशंस (WGonIFI) और अमरावती कैपिटल सिटी प्रोजेक्ट के प्रभावित समुदाय एआईआईबी केइस फैसले का स्वागत करते हैं और इसे उन लोगों की जीत के रूप में मानते हैंजो प्रशासन के भय और दबाव एवं वित्तीय संस्थानों की उपेक्षा के बावजूद अपने हक के लिए खड़े रहे।

“जैसा कि हमने नर्मदा बांध परियोजना के मामले में देखा है, किसी भी परियोजना मे विश्व बैंक का वित्तपोषण अन्य द्विपक्षीय और बहुपक्षिय एजेंसियों को भी साथ ले आता है जिनमे से प्रत्येक स्वतंत्र रूप से बिना उचित वैधानिक प्रक्रिया के काम करते है। वित्तीय संस्थानों और तंत्रों के बीच यह गठजोड़ मजबूत हो रहा है और जैसा कि हमने अमरावती परियोजना के मामले में देखा है, लोगो की एकजुटता एवं वैज्ञानिक तथ्य ही उन्हें झुका सकते हैं,” नर्मदा बचाओ आंदोलन एवं नेशनल एलियान्स आफ पीपलस मूवमेंट की वरिष्ठ कार्यकर्ता मेधा पाटकर ने कहा।

विश्व बैंक ने दूसरे दिन एक बयान जारी कर कहा था कि यह भारत सरकार ही थी जिसने उधार देने के अनुरोध को वापस ले लिया, जो की याद दिलाता है कि 1992 में सरदार सरोवर (नर्मदा) बांध के मामले में भी सरकार ने 27 साल पहले यही किया था। मोर्स कमेटी द्वारा सरदार सरोवर परियोजना पर एक गंभीर रिपोर्ट के बाद विश्व बैंक ने जोर देकर कहा था कि भारत सरकार को पुनर्वास एवं और पर्यावरण सुरक्षा उपायों की सख्त शर्तों को पूरा करना होगा। बैंक ने यह जांचने के लिए एक टीम को भारत भेजा ताकि शेष $170 मिलियन ऋण का भुगतान करने से पहले यह देख सके कि इन शर्तों को पूरा किया गया है या नहीं। समय सीमा से ठीक एक दिन पहले – 31 मार्च, 1992 – को बैंक ने घोषणा की कि भारत ने अपने दम सरदार सरोवर परियोजना का निर्माण कार्य पूरा करने का फैसला किया है।

अमरावती के मामले में, विश्व बैंक की स्वतंत्र जवाबदेही तंत्र के निरीक्षण पैनल को अमरावती परियोजना की जांच पर अपना निर्णय देने के एक हफ़्ते पहले भारत सरकार ने अपना अनुरोध वापस ले लिया था।

“विश्व बैंक के बाद अब एआईआईबी ने इस परियोजना से हाथ खींच लिया,यह लोगो की एक बड़ी कामयाबी है। भारत सरकार द्वारा बैंक से अनुरोध वापस लेने की तकनीकी केवल एक झांसा है। चंद्रबाबू नायडू की सरकार मे विश्व बैंकके निरीक्षण पैनल द्वारा एक संभावित जांच से कई उल्लंघन एवं किसानों पर हुए ज़ुल्म और अन्याय का खुलासा हुआ होगा,”आर्थिक और सामाजिक अध्ययन केंद्र, हैदराबाद के प्रोफेसर रामचंद्रैयाने कहा।

बड़ी संख्या में लोगों के आंदोलनों, विशेषज्ञों और नागरिक समाज संगठनों की एकजुटता और समर्थन के बिना यह जीत संभव नहीं थी। “दो बड़े वित्तीय दिग्गजों का इस पर्यावरण और सामाजिक रूप से विनाशकारी परियोजना से बाहर निकलना – लोगों, नागरिक, समाज, संगठनों एवं  कार्यकर्ताओं के लिए एक बड़ी जीत है जो पिछले चार वर्षों से विभिन्न मंचों पर इस परियोजना को लगातार चुनौती दे रहे हैं। इन वित्तीय संस्थानों को यह महसूस करने का समय आ गया है कि अगर ये संस्थान विनाशकारी परियोजनाओं को अलोकतांत्रिक और अन्यायपूर्ण तरीके से वित्त देने के पालन जारी रखेंगे तो लोग उनके खिलाफ सामूहिक आवाज उठाएंगे, और जीतेंगे,” अनुराधा मुंशी, सेंटर फॉर फाइनेंसियल अकाउंटेबिलिटी।

WGonIFIs राज्य सरकार से मांग करता है कि,

  1. केंद्रीय भूमि अधिग्रहण और पुनर्वास कानून, 2013के विसंगत CRDA भूमि अधिग्रहण अधिनियम, CRDA प्राधिकरण और संबंधित अधिसूचना को खारिज किया जाए और अमरावती राजधानी क्षेत्रके सभी प्रभावितों के मामले में केंद्रीय कानून को पूर्ण रूप से लागू किया जाए। इसके साथ सरकार द्वारा बिना सहमति ली गई सभी जमीन को वापस लोगों को दिया जाए।
  2. किसानों, तटीय समुदायों, खेतिहर मजदूरों, बटायेदारों, भूमिहीन परिवारों, जिनको जमीन अधिग्रहण और विस्थापन के दौरान अत्यंत पीड़ा और भय-व्याप्त समय से गुजरना पड़ा, उनको हुए सामाजिक-आर्थिक नुकसान, जमीन के मामले और मानसिक प्रताड़ना की न्यायिक जांच की जाए।
  3. पिछले पांच वर्षों में सामाजिक जीवन को पहुंचे नुकसान को देखते हुए दलित और दूसरे निर्दिष्ट भू-मालिकों के लिए विशेष मुआवजे की घोषणा की जाए।
  4. राजधानी क्षेत्र की घोषणा के बाद सक्रिय हुए दलालों, जो दलितों और निर्दिष्ट भू-मालिकों की जमीन खरीदने की प्रक्रिया में शामिल थे, के ऊपर सख्त कार्यवाही की जाए।
  5. दलित किसानों को दस्तावेजों में धांधली कर उन्हें बेदखल करने की कोशिशों को रोका जाए और सभी दलित किसानों को, जिनका जमीन पर वास्तविक कब्ज़ा है, उन्हें 2013 के कानून अनुसार मुआवजा, पुनर्स्थापन और पुनर्वास के लिए वास्तविक भू-मालिक माना जाए।

परियोजना के बारे में:
जून, 2014 में पूर्व के आंध्र प्रदेश राज्य के बँटवारे के बाद, दोनों राज्य, तेलंगाना और आंध्र प्रदेश ने हैदराबाद को राजधानी के रूप में अगले 10 वर्षों तक रखने का फैसला किया। उसी वर्ष सितम्बर में चंद्रबाबू नायडू, आंध्र प्रदेश के पूर्व मुख्यमंत्री, ने अमरावती को नए राजधानी शहर के रूप में बनाने की घोषणा की। विश्व बैंक और AIIB, इस परियोजना के लिए $715 मिलियन वित्त प्रदान करने पर विचार कर रही थी।

इसके प्रभाव आंकलन में भी इसके सामाजिक और पर्यावरणीय प्रभावों को देखते हुए विश्व बैंक ने इस परियोजना को A केटेगरी प्रदान की थी । कृष्णा नदी घाटी के ऊपर बनाए जाने के लिए, उपजाऊ खेती की भूमि और जंगलों के विनाश, 20000 से अधिक परिवारों को विस्थापित करने, जबरन भूमि अधिग्रहण, और शहर निर्माण में मनचाहे ठेकेदारों को ठेका देने के कारण यह परियोजना बेहद विवादित रही है। 2017 में विश्व बैंक के जवाबदेही तंत्र के ‘इंस्पेक्शन पैनल’ में प्रभावितों ने शिकायत की और विश्व बैंक के नियमों के उल्लंघनों की जांच के लिए कहा। यह शिकायत अभी प्रक्रिया में थी और बैंक की बोर्ड, इंस्पेक्शन पैनल द्वारा इसकी जांच करने के लिए प्रस्ताव का इंतज़ार कर रही थी।

अधिक जानकारी के लिए इस लिंक पर जायें: Encroachment of Nature, People and Livelihoods: A Case of the Abusive, Greedy and Failing Amaravati Capital City (2014-2019)

परियोजना के बारे में जानकारी यहाँ भी उपलब्ध है। 

संपर्क विवरण:

  1. जी रोहित
    मानवाधिकार मंच, आंध्र प्रदेश
    gutta.rohithbunny@gmail.com
    +91 99852 50777
  2. मीरा संघमित्रा
    नेशनल एलाएंसे ऑफ पीपलस मूवमेंट
    +91 73374 78993
    reachmeeranow@gmail.com
  3. टैनी एलेक्स
    शोधकर्ता, सेंटर फॉर फाइनेंसियल अकाउंटेबिलिटी
    +91 96500 15701
    tani@cenfa.org

After World Bank, AIIB Pulls Out of Amaravati Capital City Project

Press Release | July 23, 2019

After the World Bank, Asian Infrastructure Investment Bank Pulls Out of Amaravati Capital City Project

New Delhi: The China-led Asian Infrastructure Investment Bank (AIIB) pulled out of Amaravati Capital City Project in Andhra Pradesh. This decision, communicated by its spokesperson Laurel Ostfield to a news agency, follows the decision of the World Bank – a co-financier of the project – last week to pull out from the project.

AIIB was considering financing $200 mn out of the total $715 mn project while World Bank was considering $300 mn.

Never before did the four-year-old AIIB have to drop a project which they were considering for financing.

The news agency Reuters quoted Laurel Ostfield, “AIIB is no longer considering the Amaravati Sustainable Infrastructure and Institutional Development Project for funding.” AIIB was considering this project only as a co-financier and was to adhere to the World Bank’s safeguard policies in this project. After the Bank’s decision to exit from the project, AIIB’s decision on this was being keenly watched.

The monumental violations resulting out of the socio-economic damages, land transactions affecting thousands of agricultural, coastal, and pastoral labourers, tenants, landless families, dalits who have undergone severe pressure and fear due to the land acquisition and displacement process, financial non-viability, massive land-grabbing of the fertile land in the name of voluntary land-pooling were raised time and again with the government and both AIIB and World Bank by affected communities, people’s movements and civil society organisations.

Working Group on International Financial Institutions (WGonIFIs) and the affected communities of the Amaravati Capital City Project welcome the decision and consider this as a victory of the people who despite intimidation and coercion from the administration, and indifference from financial institutions, stood their ground.

“World Bank funding to any project brings in other bi-lateral and muti-lateral financing agencies without each one of them independently doing due-diligence, as we have seen in the case of the Narmada dam project. This nexus between financial institutions and mechanisms are strengthening, and only people united and scientific facts can make them bow down, as we have seen in the case of Amaravati project,” Medha Patkar, senior activist of Narmada Bachao Andolan and National Alliance of People’s Movements said.

World Bank had issued a statement the other day saying that it was the Government of India which withdrew the request for lending, reminding one of what the government did in the case of Sardar Sarovar (Narmada) dam in 1992, 27 years back. After a scathing report on SSP by Morse Committee, the Bank insisted that the Indian government must meet tough conditions – mostly on R&R and environmental safeguards. The Bank planned to send a team to India to check that the government had fulfilled these conditions before paying the remaining $170 million of the loan. On the day before the deadline – March 31, 1992 – the Bank announced that India had ‘decided to complete construction work on its own’.

In this case, a week before the independent accountability mechanism of World Bank, the Inspection Panel is to deliver its decision on the investigation into the Amaravati project, Government of India withdrew its request.

“AIIB pulling out of the project after World Bank is a great victory for the people. The technicality of Govt of India withdrawing the request from the Bank is only hogwash. A probable investigation by the Inspection Panel would have revealed several violations and methods of coercion and unjust use/deployment of force on the farmers by Chandrababu Naidu’s government,” said Prof. Ramachandraiah, Centre for Economic and Social Studies, Hyderabad.

This victory would not have been possible without the solidarity and support of a large number of people’s movements, experts and civil society organisations. “This exit of two big financial giants from this environmentally and socially disastrous project is a victory of people, civil society organisations, activists who have been relentlessly challenging this project at various fora for the past four years. It is time for these financial institutions to realise that people will raise a collective voice against them, and will win if these institutions continue to follow undemocratic and unjust ways to finance disastrous projects,” said Anuradha Munshi, Centre for Financial Accountability.

WGonIFIs reiterates its demand to the State government that it should:

  1. Scrap the CRDA Land Pooling Act, CRDA authorities and notifications passed subsequently, which are inconsistent with the 2013 Central Act and fully implement the Land Acquisition and Rehabilitation Act, 2013 in the case of all the affected people of Amaravati Capital Region. Also, the government should return the plots that were taken involuntarily from the people.
  2. Initiate a Judicial enquiry into the socio-economic damage, land transactions and psychological trauma of agricultural, coastal, and pastoral labourers, tenants, landless families, Dalits who have undergone severe pressure and fear, due to the land acquisition and displacement process.
  3. Announce a Special Compensation Package for Dalits and other assigned landholders as their social life has been damaged to a great extent in the past five years.
  4. Prosecute brokers, real estate agents and other persons who purchased or facilitated the purchase of assigned lands after the announcement of Capital Region.
  5. Stop attempts to de-list dalit farmers from records through dubious documentary manipulation and consider all dalit cultivators in possession of the land as the original owners of the land for purposes of compensation and R&R under the 2013 Act.

About the Project: 

After bifurcation of the erstwhile Indian state of Andhra Pradesh in June 2014, both the new states of Telangana and Andhra Pradesh decided to share Hyderabad as capital for ten years. In September 2014, N Chandrababu Naidu, the former Chief Minister of Andhra Pradesh announced Amaravati as the proposed capital city, to be developed over many years. The World Bank and AIIB were under consideration to finance the USD 715 million project.

Even in its risk assessment, World Bank had assigned this Project category A, signifying the social and environmental impacts. The project was criticised for building the city on the floodplains of river Krishna, diverting fertile farmlands and forests, displacing around 20,000 families, forcefully acquiring lands, and favouring contractors for the construction of the city. A complaint with the Inspection panel (Independent accountability mechanism) of the World Bank has been filed by the affected community in 2017 to investigate the project for violation of the World Bank’s safeguard policies. This complaint was under process, and the Board of the Bank was waiting for the recommendation on the eligibility of investigation from the Inspection Panel.

For more info: Encroachment of Nature, People and Livelihoods: A Case of the Abusive, Greedy and Failing Amaravati Capital City (2014-2019)

More information about the project also available here.

Contact details:

  1. G. Rohith
    Human Rights Forum, Andhra Pradesh
    gutta.rohithbunny@gmail.com
    +91 99852 50777
  2. Meera Sanghamitra
    National Convenor, National Alliance of People’s Movements
    +91 73374 78993
    reachmeeranow@gmail.com
  3. Tani Alex
    Researcher, Centre for Financial Accountability
    +91 96500 15701
    tani@cenfa.org

World Bank Pulls Out of Amaravati Capital City Project: A Major Victory to People, Activists Say

For Immediate Release

World Bank Pulls Out of Amaravati Capital City Project: A Major Victory to People, Activists Say

July 18, 2019: In a significant move, which will have repercussions at multiple levels, yesterday the World Bank has decided to pull out of the $300 million lending to the Amaravati Capital City project in Andhra Pradesh.

Working Group on International Financial Institutions (WGonIFIs) and the affected communities of the Amaravati Capital City Project welcome the decision. The Bank arrived at this decision after a series of representations it received from many people’s movements and civil society organisations over the past years, and a complaint to its accountability mechanism, Inspection Panel, by the affected communities.

We are happy that World Bank took cognisance of the gross violations involved in the Amaravati Capital City project, threatening the livelihood of people and fragile environment. After Narmada and Tata Mundra, this is the third major victory against the World Bank Group. We are happy that the Inspection Panel which was created due to the struggle of Narmada Bachao Andolan played its critical role here. While we celebrate this victory of people, who stood up to the intimidation and terror of the state, we warn the government and financial institutions not to push their agenda without the consent of the people” said Medha Patkar, senior activist of Narmada Bachao Andolan and National Alliance of People’s Movements.

Ever since the Amaravati Capital City Project was conceptualised in 2014, environmental experts, civil society organisations and grassroots movements have expressed their anguish over the grave  violations of the social and environmental laws, financial unviability, massive land-grabbing of the fertile land in the garb of voluntary land-pooling, open threats to the complainants by none other than the then Chief Minister, along with  concerns of losing fertile farmlands and livelihoods.

Mallela Sheshagiri Rao from the Capital Region Farmers Federation said, “With uncertainty hovering above us in respect to our land and livelihood, we had suffered sleepless nights with fear and pain. The struggle has made a mark in our lives that we can never forget. We hope the larger message of World Bank’s pulling out of this project will be heard by the state and other financiers and will address the concerns of people with honesty and commitment.”

Another co-financier of the project Asian Infrastructure Investment Bank (AIIB), projected themselves as the Post-Paris Bank, signalling the commitment to tackle climate emergency, is in focus now. While the project is still listed under consideration in their official documents, having entered in this project only as a co-financier and AIIB used World Bank’s policies to adhere to in this project, as a co-financier, the status of the AIIB now is unclear, with World Bank pulling out.

“For a change, good sense has prevailed upon the Bank to withdraw from the disastrous programme.  This also vindicates our stance that despite its rhetoric of a Post-Paris Bank, Asian Infrastructure Investment Bank (AIIB), which is a co-financer in the project, can no longer hide behind the World Bank which it has been doing as a co-financier,” said Sreedhar R, Chair, International Committee, NGO Forum on ADB and Director, Environics Trust.

Tani Alex of Centre for Financial Accountability said, “This is another instance of people’s power forcing institutions like World Bank responsive to their concerns. While the people affected by the project stood a firm ground, support and solidarity from a number of other organisations amplified their concerns at appropriate forums. This is a victory of people and their unnerving demands for accountability and justice.”

WGonIFIs demand the State government should:

  1. Scrap the CRDA Land Pooling Act, CRDA authorities and notifications passed subsequently, which are inconsistent with the 2013 Central Act and fully implement the Land Acquisition and Rehabilitation Act, 2013 in the case of all the affected people of Amaravati Capital Region. Also, the government should return the plots that were taken involuntarily from the people.
  2. Initiate a Judicial enquiry into the socio-economic damage, land transactions and psychological trauma of agricultural, coastal, and pastoral labourers, tenants, landless families, Dalits who have undergone severe pressure and fear, due to the land acquisition and displacement process.
  3. Announce a Special Compensation Package for Dalits and other assigned landholders as their social life has been damaged to a great extent in the past five years.
  4. Prosecute brokers, real estate agents and other persons who purchased or facilitated the purchase of assigned lands after the announcement of Capital Region.
  5. Stop attempts to de-list dalit farmers from records through dubious documentary manipulation and consider all dalit cultivators in possession of the land as the original owners of the land for purposes of compensation and R&R under the 2013 Act.

About the Project:

After bifurcation of the erstwhile Indian state of Andhra Pradesh in June 2014, both the new states of Telangana and Andhra Pradesh decided to share Hyderabad as capital for 10 years. In September 2014, N Chandrababu Naidu, the former Chief Minister of Andhra Pradesh announced Amaravati as the proposed capital city, to be developed over many years. The World Bank and AIIB were under consideration to finance the USD 715 million project.

Even in its risk assessment, World Bank had assigned this Project category A, signifying the social and environmental impacts. The project was criticised for building the city on the floodplains of river Krishna, diverting fertile farmlands and forests, displacing around 20,000 families, forcefully acquiring lands, and favouring contractors for the construction of the city. A complaint with the Inspection panel (Independent accountability mechanism) of the World Bank has been filed by the affected community in 2017 to investigate the project for violation of the World Bank’s safeguard policies. This complaint was under process and the Board of the Bank was waiting for the recommendation on the eligibility of investigation from the Inspection Panel.

For more information:  Encroachment of Nature, People and Livelihoods: A Case of the Abusive, Greedy and Failing Amaravati Capital City (2014-2019)

Contact details:

  1. Gutta Rohit
    Human Rights Forum, Andhra Pradesh
    gutta.rohithbunny@gmail.com
    +91 99852 50777
  2. Meera Sanghamitra
    National Convenor, National Alliance of People’s Movements
    +91 73374 78993
    reachmeeranow@gmail.com
  3. Tani Alex
    Researcher, Centre for Financial Accountability
    +91 96500 15701
    tani@cenfa.org

 

Encroachment of Nature, People and Livelihoods: A Case of Amaravati Capital City (2014-2019)

This brief report aims to throw light on the critical lapses and breaches which have been committed during the design, pre-appraisal and Strategic Environmental and Social Assessment – Environment and Social Management Framework (SESA-ESMF) procedures for Project PI59808: India- Proposed Amaravati Sustainable Capital City Development Project, by both World Bank [for 300 mn USD] and Asian Infrastructure Investment Bank Project PD000019-PSI-IND [for 200 mn USD]. The report also shares the recent updates from the communities of the project area ear-marked for building the capital city.

This project has now been renamed in 2019 as Amaravati Sustainable Infrastructure and Institutional Development Project (ASIIDP), in both the World Bank and AIIB project pages.

Villagers Celebrate The Historic US Supreme Court’s Verdict Which Ended The Immunity of the IFIs

For Immediate Release

Villagers Celebrate The Historic US Supreme Court’s Verdict Which Ended The Immunity of the IFIs

March 31, 2019, Mundra: The air in Mundra filled with the slogans like Kaun Banata Hai Hindustan, Machuawara, Majdoor, Kisan! (Who makes India? Fishermen, Labourer and Farmers); Ladenge Jeetenge! (We shall fight, we shall win); Aadiwaasi Machhuawara Kisaan Ekta Zindabad! (Long live the unity of tribals, fishermen and farmers), and Poonjipatiyon Ki Dalaai Band karo! Hundreds of people from Navinal and Tagri villages of Kutch and representatives from various social movements and civil society members have gathered to celebrate the historic verdict of the US Supreme Court that ended the absolute immunity enjoyed for long by the International Financial Institutions.
“Is Development only for Tata, Ambani, and Adani? What about the fishermen from Mundra, who live in the open with huts made up of bamboo and gunny bags but feed thousands of people in and outside Gujarat,” asked Medha Patkar, senior activist, Narmada Bachao Andolan and National Alliance for the Peoples’ Movements. “Every citizen has the constitutional right to question anti-people policies,” she asserted. She further said, “We do not have any problem in discharging Sardar Sarovar (Narmada) Dam waters for the benefit of the farmers of Kutch. However, we will fight if it is given to the industries,” referring to the allocation of water for a large number of industries.
She was speaking at the public meeting, organised by the Machimar Adhikar Sangharsh Sangathan (MAAS), Mundra, which witnessed the participation of the hundreds of the villagers affected by the World Bank Group’s International Finance Corporation-funded Tata Mundra Ultra Mega Power Plant. The meeting was organised to celebrate the historic verdict of the US Supreme Court that ended the absolute immunity enjoyed for long by the International Financial Institutions.
During the occasion, representatives from various social movements and civil society members like  Medha Patkar, senior activist of the Narmada Bachao Andolan; Soumya Dutta, Convenor of the Beyond Copenhagen Collective; Nitaben Mahadev, Gujarat Lok Samiti, Sanjeev Danda, Dalit Adivasi Shakti Adhikaar Manch; and Maju Varghese and Anuradha Munshi from the Working Group on International Financial Institutions (WGonIFIs) were also present to extend their solidarity and felicitate the fishermen and villagers who have been at the forefront of this historic struggle.
The petitioners of the case were garlanded and facilitated at the public meeting. Speakers after speakers alluded their courage, encountering hostilities and the broader impact of this victory to the people around the globe, making institutions like World Bank more accountable.
Speaking at the occasion, Soumya Dutta, emphasised that the recent US Supreme Court’s decision to end immunity of the International Financial Institutions is a significant victory of the people fighting to save their dignity, land and livelihood across the world. He stressed that a broader alliance of different sections of the people affected by the project be formed to fight getting justice.
Sanjeev Danda said the US Supreme Court’s verdict is a firm reminder that fishers and poor are not insects that can’t be eliminated easily. He thanked the villagers for their firm resistance against the might of the IFC and Tata.
Nitaben Mahadev expressed solidarity on behalf of organisations in Gujarat and wished the people the best to take the fight to higher heights.
Buddha Ismail Jam, the main petitioner of the case against the ongoing IFC, emphasised the need to stay together. He said, “If we continue to stay strong for the remaining struggle, nobody can snatch justice away from us.”
Gajendra Sinh Jadeja, a co-petitioner of the case and Sarpanch of the Navinal Panchayat in Mundra, listed the problems currently being faced by the fishermen, farmers and pastoralists. He said, “The production of cotton, dates, chikoo has considerably reduced due to the coal-ash, which has also adversely impacted the health of the people. Similarly, the inlet and outlet channel have increased the salinity, thus impacting agriculture. Additionally, the channel has also driven away from the fishes away from the coast, due to which, the fishermen have to travel about 25 kilometres into the sea.”
Bharat Patel, thanked the villagers, civil society and social movements across the country for their solidarity, and the Earth Rights International, for their unflinching support. He asserted that the policies of the IFIs need to be amended and said that they can’t function at the cost of the lives of people. Talking about the further course of action, he said, “We will fight till the ecology is restored; the people who lost their livelihoods are adequately compensated; and the officials of IFC and Tata Power, who conspired to destroy our lives for their greed are criminally charged.”
Background
On February 27, 2019, the Supreme Court of United States, in a historic 7-1 decision, the U.S. Supreme Court decided in Jam v. IFC that international organisations like the International Finance Corporation of the World Bank Group do not enjoy absolute immunity.
The Court’s decision marks a defining moment for the IFC – the arm of the World Bank Group that lends to the private sector. For years, the IFC has operated as if it were “above the law,” at times pursuing reckless lending projects that inflicted serious human rights abuses on local communities, and then leaving the communities to fend for themselves.
In the case of the Tata Mundra, since the beginning, the IFC recognised that the Tata Mundra coal-fired power plant is a high-risk project that could have significant adverse impacts on local communities and their environment. Despite knowing the risks, the IFC provided a critical Rs 1,800 crore (USD 450 million) loan in 2008, thus enabling the project’s construction. Despite this, the IFC failed to take reasonable steps to prevent the harms it predicted and failed to ensure that the project abided by the environmental and social safeguards.
As predicted, the plant caused significant harm to the communities living in its shadow. Construction of the plant destroyed vital sources of water used for drinking and irrigation. Coal ash has contaminated crops and fish laid out to dry, air pollutants are at levels dangerous to human health, and there has already been a rise in respiratory problems. The enormous quantity of thermal pollution – hot water released from the plant – has destroyed the local marine environment and the fish populations that fishermen rely on to support their families. Although a 2015 law required all plants to install cooling towers to minimise thermal pollution by the end of 2017, the Tata plant has failed to do so.
A nine-mile-long coal conveyor belt, which transports coal from the port to the Plant, runs next to local villages and near fishing grounds. Coal dust from the conveyor and fly ash from the plant frequently contaminate drying fish, reducing their value, damage agricultural production, and cover homes and property.
The IFC’s own internal compliance mechanism, the Compliance Advisor Ombudsman (CAO), issued a scathing report in 2013 confirming that the IFC had failed to ensure the Tata Mundra project complied with the environmental and social conditions of the IFC’s loan at virtually every stage of the project. The report recommended the IFC to take remedial action. However, the IFC’s management responded to the CAO by rejecting most of its findings and ignoring others. In a follow-up report in early 2017, the CAO observed that the IFC remained out of compliance and had failed to take any meaningful steps to remedy the situation.
The harms suffered by the people are all the more regrettable because the project made no economic sense from the beginning. In 2017, in fact, Tata Power began trying to unload a majority of its shares in the project for one rupee because of the losses it has suffered and will suffer in future. At the moment, the plant is operating much-below capacity in part because India has an oversupply of electricity.
Please visit here for more background and accessing documents related to the case.
About us:
Machimar Adhikar Sangharsh Sangathan (MAAS) is a trade union of the fish workers in Mundra and a co-petitioner in the historic Budha Jam vs IFC case.
 
Contact:
Dr Bharat Patel (Mundra, Gujarat, India)
General Secretary, Machimar Adhikar Sangharsh Sangathan
+ 91 94264 69803
bharatp1977@gmail.com

Solidarity Statement from India At People’s Dialogue, Cape Town on 31 March 2019

Solidarity Statement from India

At People’s Dialogue, Cape Town on 31 March 2019

In response to BRICS-led New Development Bank’s 4th Annual General Meeting in South Africa

The BRICS led NDB (New Development Bank) is being promoted as an institution that serves as developing economies’ healthy and essential alternative to undemocratic International Financial Institutions (IFIs) such as the World Bank, Asian Development Bank and International Finance Corporation that are controlled by western powers. We reject such rhetoric and assert that the $100 billion NDB is designed and structured to function equally undemocratically. NDB invests in projects that do not conform with necessary environmental and social safeguards. Consequently, billions of dollars invested by NDB in critical sectors such as energy, road building and urbanization is causing extensive environmental and social impacts. We know, as a result, South Africa, a huge recipient of NDB loans, has become a site for corporate land grabs which is resulting in massive loss of livelihoods and displacement of rural and urban communities, along with rampant corruption. The prime examples of these as we understand are Eskom, Transnet and the Development Bank of Southern Africa who are among the most notorious of South Africa’s corrupt, climate-change-causing and non-consultative firms.

IFIs have systematically disrupted evolution of democratic governance forcing Governments to implement regressive policies, legislation and schemes, commodify and financialise land, essential services and food production systems, which attack environment, food security and labour. They are gaining significant access to sovereign decision-making processes. They operated with legal immunity until recently when the US Supreme Court issued a judgement in the suit filed by Indian fishing communities against IFC that IFC is not above law. This immunity had always encouraged them to finance projects without a proper appraisal of their environmental and social impacts, and due diligence of their financial and economic consequences. IFIs typically invest in massive projects in critical sectors. A slew of such highly destructive and economically disastrous mega projects in India include Industrial corridors – Bharatmala (roads and highways expansion project), Sagarmala (creating sea-routes linked to tens of new ports), bullet train, and smart cities. The massive scales of such projects have little to do with need and necessity. Very often, a network of transnational corporations are the beneficiaries of the massive contracts that ensue. We understand it’s a way of making money out of money. The result of such development is systemic human rights violations, social disruption, and environmental destruction. And, these mega projects typically end up in massive financial losses and lead to devastating economic instability in regional and national economies. Communities in farms, coastal areas and cities are uprooted in the process, accentuating impoverishment and unemployment at massive scales. People end up burdened with crippling debts merely to survive.

Further, outsourcing the formulation of critical policies of a country relating to labour, food security, defence, water, land, farming, etc., to a variety of think-tanks and foreign consultancies work to maximise corporate control over peoples’ lives and natural resources. Institutions of democracy and decision-making of a country, such as the Parliament, are kept in the dark and global financial powers are making deep forays into sovereign decision making. Moreover, the aggressive privatisation of essential services such as electricity, water, health, food supply, public transport and education, is causing a rapid escalation of the living cost of the majority population.

Communities on the frontlines of resistance to mega undemocratic and destructive projects are facing extreme forms of violence and terror and becoming victims of systemic abuse of executive power of the State. Instead of responding to popular and people’s genuine demands, when farmers, Adivasis, Dalits and workers organise to demand just action by the State, they have often been met with state repression. The present social upheaval in India and a range of arrests of dissenters, writers, cultural and social activists across India based on fabricated cases are indicative of increasing repression.

Social movements and peoples organisations representing Adivasis, Dalits, indigenous peoples, women, farmers, fisherfolk, forest workers, hawkers, artisans, unorganised workers and civil society from across India, together with solidarity groups from India resolve that undemocratic International Financial Institutions (IFIs) have no role in a democratic polity, and therefore need to be shut down. These institutions, including NDB, trample on peoples’ rights, disregard national sovereignty, tear into the very fabric of constitutionally guaranteed governance and thus undermine India’s economic and political security.

We pledge in solidarity with the peoples’ movements, communities and civil society groups of South Africa, at this occasion of People’s Dialogue at Cape Town, to resolve to tirelessly work against subordination of governments to corporate power, against exploitation of human and natural resources, against discrimination, against social, economic and environmental injustices, against corruption, loot and violence.

We will continue resisting the prevailing financial hegemony of undemocratic and unaccountable financial institutions such as the BRICS-led NDB. We resolve to push for people-centred alternatives in all sectors of the economy and to advance an inclusive model of development in which finance and infrastructure support the vulnerable and the poor communities.

We continue remaining dedicated to building a society based on democratic and secular principles that ensure freedom, equality, equity, dignity, fraternity, love and respect for all

We continue remaining dedicated to building a society based on democratic and secular principles that ensure freedom, equality, equity, dignity, fraternity, love and respect for all, deeply respecting Mother Earth’s rights.

Signed by,

  1. Medha Patkar, Social Activist, Narmada Bachao Andolan and National Alliance of People’s Movements
  2. Ashok Choudhary, All India Union of Forest Working People
  3. Saktiman Ghosh, National Hawkers Federation
  4. Ulka Mahajan, Social Activist, Sarvahara Jan Andolan
  5. Xavier Dias, Former Editor, Khan Kaneej Aur ADHIKAR (Mines minerals & RIGHTS)
  6. Peter, National Fishworkers Forum
  7. Working Group on IFIs, India
  8. FAN-India – Financial Accountability Network India
  9. Rajendra Ravi, Director, Institute for Democracy and Sustainability
  10. Sreedhar Ramamurthy., Environics Trust
  11. PT George, Intercultural Resources, Delhi
  12. Gautam Bandyopadhyay, Nadi Ghati Morcha and Peoples Alliance in Central East India
  13. Vimal Bhai, Convenor, Matu Jan Sangathan and National Convenor, National Alliance of People’s Movements
  14. Soumya Dutta, Bharat Jan Vigyan Jatha
  15. Vijayan MJ, Pakistan India People’s Forum for Peace and Democracy
  16. Leo Saldanha, Environment Support Group
  17. Anil Tharayath Varghese, Delhi Forum
  18. Usman Mangi, Machimar Adhikar Sangarsh Samiti
  19. Kalyani Menon-Sen, Independent Researcher and Feminist Activist
  20. Madhuresh Kumar, National Alliance of People’s Movements
  21. Bilal Khan, Ghar Bachao Ghar Banao Andolan
  22. Sanjeev Kumar, Dalit-Adivasi Shakti Adhikar Manch – DASAM
  23. Tani Alex, Centre for Financial Accountability
  24. Ajay Kumar Jha, Pairvi- Public Advocacy Initiatives for Rights and Values in India
  25. Priya Pillai, Social Environmental Activist
  26. Vidya Dinker, Social Activist, Karavali Karnataka Janabhivriddhi Vedike
  27. Ovais Sultan Khan, Human Rights Activist
  28. Rajkumar Sinha, Chutka Parmanu Virodhi Sagarsh Samiti
  29. Willy D’Costa, INSAF – Indian Social Action Forum
  30. Linda Chhakchhuak, Grassroots Options – Independent Journalist
  31. Krishnakant, Activist, Pariyavaran Suraksha Samiti Gujarat
  32. C. Ramachandraiah, Centre for Economic and Social Studies, Hyderabad
  33. Meera Sangamitra, National Alliance of People’s Movements
  34. Vijay Kumar, Social and Political Activist, CPI-ML Red Star Bhopal, Madhya Pradesh
  35. Himanshu Damle, Public Finance Public Accountability Collective
  36. Chennaiah Poguri, General Secretary of AP VV Union India and National Agricultural Workers Forum
  37. Maglin P., Activist, Theeradesha Mahila Vedi Kerala
  38. Bharat Patel, Machimar Adhikar Sangarsh Sangathan Gujarat
  39. Awadesh Kumar, Srijan Lokhit Samiti Madhya Pradesh
  40. Ram Wangkheirakpam, Indigenous Perspectives, Manipur
  41. Rajesh Serupally, Freelance Researcher and Journalist

 

 

 

Peoples Movements and Civil Society Organisations Welcome the US Supreme Court’s Decision on the Absolute Immunity of the IFIs

For Immediate Release

Peoples Movements and Civil Society Organisations Welcome the US Supreme Court’s Decision on the Absolute Immunity of the IFIs

March 1, 2019, New Delhi: Peoples movements and civil society organisations from across India welcomes the US Supreme Court’s landmark judgement that ends the absolute immunity of the international organisations like the World Bank Group.


The US Supreme Court, in its 7-1 verdict in the Budha Ismail Jam v. International Finance Corporation (IFC), had yesterday ruled that international organisations like the World Bank Group can be sued in U.S. courts.

Medha Patkar, a senior leader of the Narmada Bachao Andolan, reacting to the judgement, said “For long, the absolute immunity had encouraged International Financial Institutions to mindlessly finance massive projects in critical sectors without proper assessment of the environmental and social impacts, and due diligence of their financial and economic consequences. This judgement will force them to take their policies and laws of the land more seriously.”

Dr Bharat Patel General Secretary, Machimar Adhikar Sangharsh Sangathan and one of the petitioners in the case, said, “This is a victory of our relentless struggle to bring to justice the crimes committed by the Tata against the fishing community. The IFC aided the process by turning a blind eye to it.”

The construction of the IFC-funded Tata Mundra UMPP had destroyed marine fisheries resources and traditional fishing practices like the pagadia fishing, which has adversely affected the livelihood of the locals. The people had objected to the destruction of their coasts and sea in the name of development projects, and opening up of the coasts to polluting industries, particularly the thermal plants. Much of India’s polluting industries are concentrated around the coast and the new plan to industrialise the coast through port-led development will only intensify the resource grab and destruction of the livelihood of fishers and farmers.

Soumya Dutta, convenor of the Beyond Copenhagen Collective, said, “This judgement underlines that the IFIs can no longer get away with their reckless investment. Earlier, to earn profits, they would pay lip service to their social and environmental safeguard policies and invest in high-risk projects, despite themselves mentioning it in the project documents. With US Supreme Court’s decision to end absolute immunity of the IFIs, the banks will be more much careful now.”

Speaking on the judgement, Joe Athialy, Executive Director of the Centre for Financial Accountability, New Delhi, said: “This judgment will strengthen communities’ efforts to hold the Bank accountable and is a step in the direction of bringing accountability in financial institutions.”

Please visit here for more background on the case.

About Us:
WGonIFIs, a network of movements, organisations and individuals to critically look at and evaluate the policies, programmes and investments of various International Finance Institutions (IFIs), and joining the celebration of the people and communities across the world in resisting them. A list of the network is available here.


For media inquiries, please contact:
Ankit Agrawal
+91 95603 61801
wgonifis@gmail.com

MASS Welcomes The US Supreme Court’s Decision To End The Immunity Of The World Bank Group

This is the first time the US Supreme Court has addressed the scope of international organisations’ immunity

February 28, 2019, Mundra, Gujarat: Machimar Adhikar Sangharsh Sangathan (MASS) and the affected communities by the Tata Mundra Ultra Mega Project welcomes the historic decision of the US supreme court which ruled that international organizations like the International Finance Corporation of the World Bank Group do not enjoy absolute immunity, and can be sued.

The construction of the Tata Mundra UMPP has destroyed marine fisheries resources and traditional fishing practices like the pagadia fishing, which has adversely affected our livelihood. The fishers had objected to their coasts and sea getting destroyed in the name of development projects and opening up of coasts to polluting industries, particularly the thermal plants. Much of India’s polluting industries are concentrated around the coast and the new plan to industrialise the coast through port-led development will only intensify the resource grab and destruction of the livelihood of fishers and farmers.

The US Supreme Court’s verdict is a call for accountability from the national and international financial institutions, which cannot escape accountability under the veil of immunity any more. The global financial institutions have to recognise the law of the land and accept that they are answerable to the courts and people. The case, Budha Jam v. IFC, brought by fishermen and farmers affected by IFC-funded Tata’s Mundra Ultra Mega Project challenged the absolute immunity enjoyed so far by international organisations like IFC.

Welcoming the Judgment, Dr Bharat Patel, General Secretary, MASS, and one of the petitioners in the case, said: “International Finance Institutions have to  be mindful of the fact that development which is being promoted need to take into account of the traditional rights and livelihood of the people who get affected by the project and cannot wash off their hands after financing destructive projects.”

The Court’s decision marks a defining moment for the IFC – the arm of the World Bank Group that lends to the private sector. For years, the IFC has operated as if it were “above the law,” at times pursuing reckless lending projects that inflicted serious human rights abuses on local communities, and then leaving the communities to fend for themselves.

International organisations like the IFC have long claimed they are entitled to “absolute” immunity, even as they engage in commercial activities, like the coal-fired power plant at the heart of this case. Because the relevant statute only gives the IFC the same immunity as foreign governments, and foreign governments do not have absolute immunity in U.S. courts when they engage in commercial activities, the Supreme Court rejected this position: “The International Finance Corporation is therefore not absolutely immune from suit.”

Budha Jam, the main petitioner, said: “After eight years of long struggle against IFC at different forums, we are so happy to see that the US Supreme Court has vindicated our stand. We will continue to fight the IFC until we get justice. The verdict was keenly awaited by not only by us but by the communities from across the world, which are relentlessly fighting the crimes of the international financial institutions, who destroy environment and livelihood in the name of development.”

MASS salutes the fishers of Mundra who lead the struggle over the past decade and challenged the World Bank at various levels.  We thank those who have contributed in our struggle particularly the Earth Rights International and Stanford Law School Supreme Court Litigation Clinic, which represented our case pro bono.  We also thank all the national and international groups who helped us in the fight, gave solidarity and stood with us shoulder to shoulder. We stand together in struggle.

Contact:
Dr Bharat Patel
General Secretary, Machimar Adhikar Sangharsh Sangathan, Mundra, Gujarat
+ 91 94264 69803
bharatp1977@gmail.com

Gajendra Sinh 
Sarpanch, Navinal Gram Panchayat
+91 98255 28544

Historic Supreme Court Win: World Bank Group Is Not Above The Law

For Immediate Release

February 27, 2019

Delhi: New Delhi: In a historic 7-1 decision, the U.S. Supreme Court decided in Jam v. IFC that international organizations like the International Finance Corporation of the World Bank Group do not enjoy absolute immunity.

The Court’s decision marks a defining moment for the IFC – the arm of the World Bank Group that lends to the private sector. For years, the IFC has operated as if it were “above the law,” at times pursuing reckless lending projects that inflicted serious human rights abuses on local communities, and then leaving the communities to fend for themselves.

International organizations like the IFC have long claimed they are entitled to “absolute” immunity, even as they engage in commercial activities, like the coal-fired power plant at the heart of this case. Because the relevant statute only gives the IFC the same immunity as foreign governments, and foreign governments do not have absolute immunity in U.S. courts when they engage in commercial activities, the Supreme Court rejected this position: “The International Finance Corporation is therefore not absolutely immune from suit.”

The case involves an IFC-financed power plant in Mundra, Gujarat. The plaintiffs are members of local fishing and farming communities whose livelihoods, air quality, and drinking water have been devastated by the project. They alleged that the IFC and the project developers knew about these risks in advance but nevertheless chose to recklessly push forward with the project without proper protections in place.

The complainants originally tried to raise their concerns through the Compliance Advisor Ombudsman (CAO), the IFC’s internal grievance mechanism, but when the IFC’s leadership ignored the grievance body’s conclusions, they reluctantly filed suit in the United States as a last resort. The EarthRights International represented the villagers, along with the Stanford Law School Supreme Court Litigation Clinic.

The IFC is headquartered in Washington, DC, along with the rest of the World Bank Group, because the U.S. government is by far the largest shareholder in these organizations. The U.S. government has long supported the villagers’ interpretation of the law: that international organizations can be sued for their commercial activities or for causing injuries in the United States. The U.S. Departments of Justice and State submitted an amicus curiae brief in support of the plaintiffs’ position, as did members of Congress from both parties.

The IFC argued that allowing it to be sued would be disastrous, but the Supreme Court, in an opinion by Chief Justice John Roberts, found these concerns to be “inflated.” The Court noted that, unlike many international organizations, the IFC’s founding members did not grant the organization absolute immunity in its charter.

The case is Docket No. 17-1011. Justice Brett Kavanaugh recused himself, because he was on the U.S. Court of Appeals for the D.C. Circuit when the case was heard there. Justice Stephen Breyer was the sole dissenter, arguing that a “broad exposure to liability” for international organizations runs counter to Congress’ original purpose in providing immunity.

Now that the Supreme Court has established that the World Bank Group can be sued, the case will return to the lower courts for further litigation.

Another case against the IFC is also expected to proceed in the U.S. District Court for the State of Delaware. The case, Juana Doe et al v. IFC, involves IFC projects that have been linked to murders, torture, and other violence by paramilitary groups and death squads in Honduras. EarthRights International represents the plaintiffs, whose identities are kept anonymous to protect them from retaliation.

Statements

“We are extremely happy with the decision of the Supreme Court of US. This is a huge victory for the people of Mundra in particular and other places in general, where World Bank’s faulty investments are wrecking communities and the environment. This is a major step towards holding World Bank accountable for the negative impacts their investments are causing.”

– Dr. Bharat Patel, General Secretary, Machimar Adhikar Sangharsh Sangathan, one of the plaintiffs in the case

“We are delighted with this judgment. This is a victory of all who have fought for a more accountable World Bank since the past many decades world over and has fought valiant struggles against Bank-funded projects on the ground, exposing the monumental human and environmental costs of their lending. This judgment will strengthen communities’ efforts to hold the Bank accountable and is a step in the direction of bringing accountability in financial institutions.”

– Joe Athialy, Executive Director, Centre for Financial Accountability, New Delhi

“Immunity from all legal accountability does not further the development goals of international organizations. It simply leads them to be careless, which is what happened here. Just like every other institution, from governments to corporations, the possibility of accountability will encourage these organizations to protect people and the environment.”

– Marco Simons, General Counsel, EarthRights International

“The commercial activities of international organizations such as the IFC can have a significant impact the on lives of Americans and others around the world. We welcome today’s decision.”

– Prof. Jeffrey Fisher, Co-Director, Stanford Law School Supreme Court Litigation Clinic

Background

From the start, the IFC recognized that the Tata Mundra coal-fired power plant was a high-risk project that could have significant adverse impacts on local communities and their environment. Despite knowing the risks, the IFC provided a critical $450 million loan in 2008, enabling the project’s construction and giving the IFC immense influence over project design and operation. Yet the IFC failed to take reasonable steps to prevent the harms it predicted and failed to ensure that the project abided by the environmental and social conditions of IFC involvement.

As predicted, the plant has caused significant harm to the communities living in its shadow. Construction of the plant destroyed vital sources of water used for drinking and irrigation. Coal ash has contaminated crops and fish laid out to dry, air pollutants are at levels dangerous to human health, and there has already been a rise in respiratory problems. The enormous quantity of thermal pollution – hot water released from the plant – has destroyed the local marine environment and the fish populations that fishermen like Budha Ismail Jam rely on to support their families. Although a 2015 law required all plants to install cooling towers to minimize thermal pollution by the end of 2017, the Tata plant has failed to do so.

A nine-mile-long coal conveyor belt, which transports coal from the port to the Plant, runs next to local villages and near fishing grounds. Coal dust from the conveyor and fly ash from the plant frequently contaminate drying fish, reducing their value, damage agricultural production, and cover homes and property. Some air pollutants, including particulate matter, are already present at levels dangerous to human health, in violation of Indian air quality standards and the conditions of IFC funding, and respiratory problems, especially among children and the elderly, are on the rise.

The IFC’s own internal compliance mechanism, the Compliance Advisor Ombudsman (CAO), issued a scathing report in 2013 confirming that the IFC had failed to ensure the Tata Mundra project complied with the environmental and social conditions of the IFC’s loan at virtually every stage of the project and calling for the IFC to take remedial action. IFC’s management responded to the CAO by rejecting most of its findings and ignoring others. In a follow-up report in early 2017, the CAO observed that the IFC remained out of compliance and had failed to take any meaningful steps to remedy the situation.

The harms suffered by the plaintiffs are all the more regrettable because the project made no economic sense from the beginning. In 2017, in fact, Tata Power began trying to unload a majority of its shares in the project for one rupee (a few cents) because of the losses it has suffered and will suffer going forward. At the moment, the plant is operating at only one-fifth capacity in part because India has an oversupply of electricity.

The case is Budha Ismail Jam v. International Finance Corp., No. 17-1011.

Contact:

  1. Valentina Stackl (USA)
    Communications Manager, Earth Rights International
    +1 (202) 466 5188 x100
    valentina@earthrights.org
  2. Dr Bharat Patel (Mundra, Gujarat, India)
    General Secretary, Machimar Adhikar Sangharsh Sangathan
    + 91 94264 69803
    bharatp1977@gmail.com
  3. Joe Athialy (New Delhi, India)
    Executive Director, Centre for Financial Accountability, India
    +91 98711 53775
    joe@cenfa.org

Documents: Jam-v-IFC-SCOTUS-opinion

Case Study on India’s Experience with Independent Accountability Mechanisms

25 years of Inspection Panel has a special significance for India, having played a key role in its formation. As in the case of all safeguard and other policies, the independent accountability mechanisms (IAMs) of multilateral development banks are also a result of the valiant struggle fought by the communities affected of various projected financed by these institutions. Particularly the struggle led by Narmada Bachao Andolan since the late ‘80s demanding a review of Sardar Sarovar (Narmada) dam for its social, environmental and economic costs leading to the formation of Independent Review (first time in World Bank’s history) was a watershed moment in the history of struggles against international financial institutions.

This is a compilation of six prominent cases from India to different IAMs. Each one of them had different experiences and results. These are reminders to us that while these are tools for communities to highlight the violations of their rights, one needs to go beyond IAMs for holding international financial institutions accountable.

Symposium on India’s Engagements and Experiences with Accountability Mechanisms of Multilateral Development Banks

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The Inspection Panel is completing 25 years in its role, as an accountability mechanism of the World Bank. As you are aware, the Bank’s failure to comply with its operating policies was seen by the entire world in the Bank’s financing with the Sardar Sarovar Dam project on River Narmada. The tenacity of massive grass-roots uprisings from our communities in the 80’s and the sustained hard work of our social movements along with our resoluteness to link it with international coalitions to question the hegemony of the Bank, subsequently led the Bank, for the first time, to commission an independent review of its project. The Independent Review Committee (Morse Committee) constituted by the Bank in 1991 to review the social and environmental costs and benefits of the dam, after years of consistent struggle by Narmada Bachao Andolan (Save Narmada Movement) and its allies led to a demand from the civil society around the globe for the creation of a grievance redressal system for project-affected communities, which ultimately pressurized the Bank to constitute the Inspection Panel in 1993. We expected this might be a crucial backstop and an opportunity for us to raise our issues of livelihoods, economic loss, displacement from our lands, alienation from natural resources, destruction of environment and threat to our biodiversity and cultural hotspots, where Bank invested in large, supposedly ‘development’ projects like mega dams, energy and other infrastructure projects. Yet, the outcome we expected rarely delivered sufficient remedy for the harm and losses people have experienced over the years.

A number of accountability mechanisms over the next couple of decades in several development finance institutions were formed following the model of World Bank, commonly known as ‘Independent Accountability Mechanisms’[IAMs]. Each year the number of complaints rise which is an indication of the increasing number of grievous projects happening around the world. While IAMs of most MDBs are advertised to provide strong and just processes, many of our experiences imply that the banks are accommodating practices which suit their own needs and their clients, which are borrowing countries and agencies, and not the people for whom the IAMs were built to serve.

Many a time, we have been disappointed by these mechanisms, since these are designed by the banks who are lending for disastrous projects in our lands. And as a result, the already existing narrow mandate of IAMs is further restricted.

In our efforts to hold the lending bank accountable, the communities are always presented with the arduous process of learning the complex formalities and detailed procedures to initially approach the IAMs and get our grievances registered. Our many years’ time and energy then is channelised into seeing through the various cycles of these complaint handling mechanisms, that our entire efforts go into this process, and often our complaint gets dropped off in midst of the procedural rules of the IAMs. People are made to wait many months to clear procedural levels and our cases with the IAMs get highly unpredictable. Further, we face intimidation and reprisals from the state and project agencies for having contacted the IAMs who themselves do not possess any authority to address the violations hurled out to us when we seek dignity, fair treatment and justice from them. There are many of us who feel a loss of morale after long years of struggling with lenders when we fail to see concrete benefits or changes in our circumstances, by which time considerable irreplaceable harm is already done to our lives, environment and livelihoods.

In this manner, our immediate and larger goal of holding banks for their failure to consult with and obtain consent from communities before devising action plans for our lands, water and forests is deflected in the pretext of problem-solving and grievance hearing offered to us in the name of IAMs.

With over 50 registered complaints sent to different IAMS from India in the past 25 years, many more left unregistered due to technical reasons and only a few got investigated, assessed and monitored at different levels, we have a baggage of mixed experiences with the IAMs. A few of the prominent cases from India apart from Narmada project are Vishnugad Pipalkoti Hydro Electric Project [WB’s IP], Tata Mega Ultra-01/Mundra and Anjar [IFC’s CAO & ADB’s CRP], India Infrastructure Fund-01/Dhenkanal District [IFC’s CAO], Allain Duhangan Hydro Power Limited-01/Himachal Pradesh [IFC’s CAO] and Mumbai Urban Transport Project (2009) [WB’s IP].

As we now know, what is being witnessed recently is an influx of approved and proposed investments majorly in energy, transport, steel, roads, urban projects, bullet trains, industrial zones/corridors, smart cities, water privatization and other mega projects in India. This has been financed from different multilateral and bilateral sources, foreign corporations, private banks as well as Export-Import Banks (ExIm Banks). It has become a brutal challenge for communities, social movements and CSOs, with lenders and governments constantly shutting their eyes and ears to us who demand accountability for their actions. A compelling and timely need has arisen among diverse groups amongst us to gather together and critically analyze the various trajectories of our engagements with accountability mechanisms of MDBs in order to bring together past 25 years’ learning, insights and reflections of various actors of this accountability process. This urging demand is also an attempt to define the collective experiences in India among our social movements, projected-affected communities and CSOs with IAMs and lending banks, especially appropriating the global political opportunity of Inspection Panel celebrating its 25 years this year.

The schedule and list of speakers will be shared soon.

An Indian Perspective on New Development Bank & Asian Infrastructure Investment Bank

The Asian region has experienced the emergence of new MDBs over last few years. For many years, the Asian Development Bank was the only development bank in the region and has been dominated by the Japanese owing to the number of votes it has as compared to other members. However, the newly constituted NDB in 2014 has two key Asian members, India and China. The Asian Infrastructure Investment Bank (AIIB) led and initiated by China in 2015, and with a mandate to have at minimum 70% of shares allocated to Asian countries is sure to become another major player to support infrastructure development activities of the region as well as global south. The AIIB and NDB are two separate entities in their operations and constitution even though there are overlaps in memberships of the two banks.

Mumbai Resolution of the People’s Convention on Infrastructure Financing

In the political resolution adopted at the end of the People Convention on Infrastructure Financing delegates resolved to challenge the undemocratic and economically unsound functioning of IFIs including AIIB, World Bank, IFC and others. The Convention also resolved to push for people-centered alternatives in all sectors of the economy, and to advance an inclusive model of development in which finance and infrastructure support the vulnerable and the poor communities, instead of supporting primitive accumulation of natural resources and maximising the profits of the multinational corporations and global elite further contributing to the increased inequality in the society.

Risky venture The AIIB’s hands-off​ approach to funding infrastructure in India

AIIB’s proposed deal with India’s $2.1 billion National Investment and Infrastructure Fund (NIIF) would also threaten to revive a host of stalled projects in the country potentially including coal, power, petroleum, railways and roads – many of which are currently shelved because of high social and environmental risks and opposition by local communities.

इंफ़्रास्ट्रक्चर निवेश: विकास या विनाश

एशियन इंफ़्रास्ट्रक्चर इन्वेस्टमेंट बैंक और भारत का नेशनल इन्वेस्टमेंट एंड इंफ़्रास्ट्रक्चर फ़ंड के निवेश संकट की और एक इशारा

भारत में जलविद्युत विकास को बड़े पैमाने पर बढ़ावा

इस सेक्टर में निजी क्षत्रे को आकर्षित करने के लिए सरकार ने 2016 में इस पर चर्चा शुरू की कि नवीकरणीय ऊर्जा के क्षत्रे को और विस्तृत किया जाए ताकि 25 मेगावाट क्षमता से अधिक के जलविद्युत स्टेशन भी उसमें शामिल किए जा सके। इससे सरकार को 2022 तक 175 मेगावाट नवीकरणीय ऊर्जा उत्पादित करने के लक्ष्य को हासिल करने में मदद मिलेगी।

Schedule of the Workshops at the Peoples’ Convention on Infrastructure Financing

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At the Peoples Convention on Infrastructure Financing, almost 90 regional, national, and international grassroots and research organisations have come together to organise 20 workshops related to Infrastructure Financing; Development Financial Institutions; Policies and Safeguards; Urban Development; Transport; Port and Coastal Infrastructure; Energy and Energy Finance; Trade and International Financing; Water and Water Sector Reforms; Privatisation and PPPs, Gender; Social Marginalisation among other areas.
 So far over 200 people have registered for these workshops. The individual registrations for the workshops are still open. You can find a detailed schedule of the workshop here.

Bullet Train: Propelling Public Debt in India

Krishnakant of the Paryavaran Suraksha Samiti, Gujarat on the rationale of the proposed bullet train between Mumbai and Ahmedabad.

PPPs, Infrastructure, and Economic Development

Shalmali Guttal, Focus on the Global South, discusses the IFIs, PPPs, Infrastructure, and Economic Development.

Coastal Infrastructure and Fishers Struggle in India

Jesu Rathnam, Convenor, Coastal Action Network, on the coastal infrastructure and fishers struggle in India

IFIs, Infrastructure, and Commons

Soumya Dutta, Beyond Copenhagen Collective and PAIRVI, linking IFIs, their push for Infrastructure, and impact on commons.

Infrastructure projects in Tamil Nadu and their Impacts

Nityanand Jayaraman on the Infrastructure projects in Tamil Nadu and their Impacts

IFIs and their Impact on People

Shaktiman Ghosh, National General Secretary of the National Hawkers Federation, on the IFIs and their Impact on People

Why Should People be Vigilant About Asian Infrastructure Investment Bank?

Peoples’ Convention on Infrastructure Financing

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Invitation of the Peoples’ Convention on Infrastructure Financing

Concept Note of the Peoples Convention on Infrastructure Financing

Brochure

conferenceAt the Convention, there will be multiple workshops organised by the WGonIFIs in Mumbai during June 21-23, 2018. You can click here to participate as an individual or an organisation. You can also organise workshops.

Peoples’ Convention on Infrastructure Financing

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Tentacles of the International Finance in India

This document is an effort to compile data of investments coming into India from MDBs, ExIm banks and other bilateral investments, to help understand the landscape of financing from these institutions and helping to understand the overlaps of international financial institutions in certain key sectors.


 

New Report Warns AIIB to do Due Diligence before Investing in NIIF

 

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A latest report has asked Asian Infrastructure Investment Bank (AIIB) to “tread carefully” on National Infrastructure and Investment Fund (NIIF), a fund of fund that seeks to create long-term value for domestic and international investors seeking investment in energy, transportation, housing, water, waste management and other infrastructure-related sectors in India.

The report, released by the Bank Information Centre-Europe and Centre for Financial Accountability, titled ‘Financing the future? The Asian Infrastructure Investment Bank and India’s National Investment and Infrastructure Fund’ warns that the AIIB do due diligence at all levels before approving a new $200m deal with India in April for fear of turning the key on some highly-controversial projects now being stalled by local community opposition.

The Prime Minister Narendra Modi has also vowed to revive long-stalled infrastructure projects, especially in the coal, power, petroleum, railways and road sectors. Quoting a recent data from the Centre for Monitoring Indian Economy Pvt. Ltd (CMIE), the report mentions that the value of stalled infrastructure projects in the quarter ended September increased to Rs13.22 trillion. The CMIE’s analysis shows that 39.04% of the total stalled projects were in the electricity sector by value.

The report observes that the first proposed Indian investment on the AIIB’s books in 2018 reflects both the Indian government’s prioritisation of infrastructure financing, and the interest of AIIB in both India and financial intermediary (FI) lending, a financial model involving investing indirectly through third parties such as an infrastructure or private equity funds — which makes it difficult to track the money — thus posing a substantial risk of being spent on the coal or other harmful projects by the back door.

The report observed that FI lending is becoming the dominant model of financing at development banks. The AIIB started FI lending in 2017, when it approved approving three FI investments: in Indonesia’s Regional Infrastructure Development Fund, the India Infrastructure Fund, and the Emerging Asia Fund. Next up is a potential $200 million commitment to India’s National Investment and Infrastructure Fund.

“Around the world, we have seen how extremely risky this model of ‘hands-off’ lending through financial intermediaries can be. Without stronger safeguards and transparency, the AIIB will simply lose sight of its original investment and the damage it could cause,” said BIC Europe Campaigns Director and co-author Kate Geary in a media release.

“The AIIB must tread very carefully here because it is still accountable for any project that harms local communities in India or damages the environment – regardless of how much distance the AIIB might claim to have from it,” Geary said.

Exhorting AIIB to learn from the IFC’s problematic experience with its FI portfolio and to avoid the associated social, environmental and reputational damage, the report recommends putting in place mandatory robust policies and systems around financial intermediary investments to ensure transparency, accountability and efficient channels of communication with all stakeholders.

The recommendations include: Scrutinising the existing project portfolio and pipeline of proposed FI clients; Reviewing the track record of the FI client in applying the environmental and social framework and making this assessment public; Ensuring that FI clients require sub-projects to be compliant with all AIIB policies especially the Environmental and Social Framework (ESF), Complaints Handling Mechanism (CHM), Public Information Policy, and all relevant sectoral strategies and guidelines; Monitoring the proposed client’s social and environmental due diligence and supervision of its investment; and Ensuring FI sub-project affected communities have access to redress, including through the AIIB’s accountability mechanism.

World Without World Bank Possible: Activists

Action Week on World Bank Brings Together Social & Political Activists, Probing their Past  and Demanding Accountability

Press Release |  October 16, 2020

New Delhi: A key message reverberating in the week long protest action was that a World Without World Bank is possible. Participated by people’s movements, civil society groups, senior political and social activists and concerned citizens, the week witnessed multiple actions, within the limitations imposed upon by the pandemic.

The Action Week from October 12-16, under aegis of Working Group on International Financial Institutions (WGonIFIs) was observed by online meetings, webinars and using social media to look into the past performance of the World Bank in critical sectors, which impacted the economy as a whole, and in particular, people, their livelihoods and environment. The purpose behind the protest week was to expose the Bank’s hidden agendas to push neo-liberalization and a lack of focus on either inclusive or sustainable support for the countries and people battling marginalisation. 

The week-long protest saw senior political and social activists and concerned citizens voice their concerns regarding the manner in which the World Bank has been pushing for a policy reform agenda changing the Indian economy and polity against the interests, rights and basic needs of the common citizens. In a video message eminent activist Medha Patkar stated World Bank is undemocratically influencing our policies, impacting our sovereignty and violating our constitution.” She further stated that “We can live without the World bank. The World without the World Bank can certainly be taking the alternative path, which we all are compelled to think about after COVID-19 and all calamities based on climate change.”

Many other activists, academicians and trade unionists voiced their concern over the manner in which the Bretton Woods Institutions have been pushing for privatisation in public services, dilution of environmental and labour laws, exploitation of natural resources in the name of Development , which have been detrimental to the interests of the marginalised. The other voices included Goldman Environmental Prize winner Prafulla Samantara, noted environmentalist Vandana Shiva, Afsar Jafri of GRAIN, CPI(M) Central Committee Member Vijoo Krishnan, Amulya Nidhi of Jan Swasthya Abhiyaan (JSA), Leo Saldanha of Environmental Support Group (ESG), Right Livelihood Award winner Sandeep Pandey, Former General Secretary of All India Bank Officers’ Confederation (AIBOC) Com. Thomas Franco; Madhuresh Kumar of National Alliance of People’s Movement (NAPM),  General Secretary of  Bank Employees Federation of India (Tamil Nadu) C.P. Krishnan, Joint Secretary of All India Bank Employees Association (AIBEA) Com. Devidas Tuljapurkar, Maju Varghese of Centre for Financial Accountability (CFA), General Secretary of the All India Trade Union Congress (AITUC) Com. Amarjeet Kaur, environmentalist Ashish Kothari,  President of Nagpur Municipal Corporation Employees Union Jammu Anand, Sreedhar Ramamurthi of Environics Trust, Vimal Bhai of Matu Jan Sangathan, Patron of All India Power Engineers Federation (AIPEF) K. Ashok Rao, Rajkumar Sinha of Chutka Parmanu Virodhi Sagarsh Samiti, Ashok Shrimali of Mines Mineral & People (MMP), energy expert Soumya Dutta and others who spoke about the impact of World Bank investments and reform agenda on agriculture, energy, environment, banking, health care sectors and on labour rights.

As part of the week long action, two international webinars were organized “IMF-World Bank: Did the Reform Agenda Get A Booster? –  Experiences Globally” and “World Bank’s role in creating Smart Cities  and it’s Socio political Impacts in Developing Countries- Voices from the South and Covid- 19” on the 13th and 15th of October, 2020. These webinars brought together speakers from the Netherlands, Philippines, Indonesia, Hong Kong, Bangladesh and India. Researchers, civil society members from across the world participated in the webinars, which especially brought together the voices from the global south,  coming together to discuss the commonalities of experiences vis-a-vis World Bank investments and policy push. 

In the webinar on COVID-19 speakers Nezir Saini from Recourse based in Netherlands, Hasan Mehedi from Coastal Livelihood and Environmental Action Network (CLEAN), Bangladesh  and Anuradha Munshi from Centre for Financial Accountability (CFA) agreed on the concerns regarding the increasing external debt situation as the support from these institutions are in form of loans. IMF and World Bank funding for COVID-19 in developing countries is attached to policy reforms which will affect the social and health sectors and  encourage private players. This would be disastrous when the need for good public health infrastructure and care is more than ever before. 

In the webinar on Smart Cities speakers Jelson Garcia, an Independent researcher from Philippines, Elisa Sutanudjaja from Rujak Center for Urban Studies, Indonesia, Prof. Kris Hartley from The Education University of Hong Kong, and Gaurav Dwivedi, Centre for Financial Accountability agreed that the World Bank’s push for large and smart infrastructure has disempowered the already marginalised communities and pushed them to peripheries, destroyed traditional livelihoods, undermined the local governance bodies like municipal corporations and is creating parallel governance structures and pushing for privatisation of public services through PPP model, etc.

The movements and CSOs vowed to intensify monitoring World Bank and other international financial institutions and their agenda, negatively impacting India and its economy.

Resources

Recording of Webinar :

  1. World Bank’s Role In Creating Smart Cities  And It’s Socio Political Impacts In Developing Countries – Voices from the South: https://www.facebook.com/wgonifis/videos/912890472453195/
  2. “Covid-19 and IMF-World Bank: Did the Reform Agenda Get A Booster? –  Experiences Globally”: https://www.facebook.com/watch/?v=255382015914969

The Video messages of Medha Patkar, Prafulla Samantara, Vandana Shiva and others can be accessed here:  https://wgonifis.net/videoswwwb/

Issued by Working Group on International Financial Institutions (WGonIFIs).

Contact:

Anuradha Munshi – anuradha@cenfa.org / 9792411555

Nishank – nishank@cenfa.org / 9910137929

Working Group on International Finance Institutions (WGonIFIs) is a collective of organisations and individuals in India to critically look at and evaluate the policies, programmes and investments of various International Finance Institutions (IFIs), and joining the celebration of the people and communities across the world in resisting them.