Probe Alerts

Probe Alert March 1998

Probe Alert
March 1, 1998

Inspection Panel Confirms Accusations: World Bank violated its own environmental and resettlement guidelines.

photo showing a pipeline dumping into lake


A leaked report by the World Bank Inspection Panel has revealed that the Bank committed “serious violations of its policies and procedures” in approving its most recent loan to India’s National Thermal Power Corporation (NTPC) for the massive and controversial thermal power and coal mining projects in the Singrauli area of India. Likened by Indian journalists to “the lower circles of Dante’s Inferno,” the Singrauli project is notorious for causing serious environmental degradation and human suffering. The World Bank has supported energy developments in Singrauli with five loans and credits since 1977.

Singrauli, considered the energy capital of India, is the site of five coal-fired thermal power plants, numerous ash dumps, 12 open pit coal mines and scores of open pit quarries, and other polluting industries. A $400-million World Bank loan to NTPC in 1993 to expand the Rihand and Vindhyachal coal-fired thermal power plants set in motion a chain of events that led Indian citizens to submit a formal complaint to the Bank’s Inspection Panel. The Inspection Panel found compelling evidence of policy violations and recommended a thorough investigation. However, the World Bank’s Board of Executive Directors refused to allow the Panel to go to the project area and confined the Inspection Panel to a desk review. Undeterred, the Panel found ample incriminating evidence from the Bank’s own records in Washington.

According to the Panel’s leaked report, the World Bank didn’t enforce its own environmental standards for this project. Fly ash, a byproduct of the power generation process, is dumped in ash dykes (slurry pits), creating a major contamination problem for neighbouring farms, crops, and drinking water. In the dry season, the ash, whipped around by the wind, fouls the air and causes many local people to suffer from respiratory problems. It settles onto nearby land and cakes into a cement-like crust, lowering soil productivity. The ash, dispersed in water or air, can also contain hazardous substances, including trace metals. The report found that “contrary to bank policy, serious alternatives for fly ash disposal were not considered during the design phase.” The ash could be backfilled into existing mines, for example.

Compounding the environmental hardships caused by the Singrauli mining-energy complex is deprivation caused by inhumane resettlement. Valuable farmland has been expropriated for the ash dyke dump sites, and thousands of people have been forced into crowded resettlement colonies. Since the beginning of the Singrauli energy complex, almost 200,000 people have been forced to abandon their homes and livelihoods. Though, according to the leaked report, the Bank’s resettlement plans made promises of land-for-land compensation, victims have not received equivalent replacement land. Instead, families once dependent on an agricultural livelihood are now living on small plots in cramped resettlement colonies, forcing many to work short-term contracts or leaving them without any income at all. Basic infrastructure was provided but has not been maintained, resulting in a lack of water, mud-clogged drains, broken water pumps, and no medical supplies or services. The resettlement colony for those displaced by one of the power plants is among the worst, located beside an active coal mine with dilapidated and deteriorating houses. Moreover, the Inspection Panel report concluded, “Most of the displaced population does not appear to be receiving benefits from the project (for example, electricity) despite this being the express objective of the bank’s resettlement policy.”

Current Situation

Despite reassurances from the Bank, including a hastily assembled Action Plan that failed to consult those so dreadfully harmed by the Bank’s operations, the situation worsens. Project authorities are applying intense pressure to force people to move, using repressive tactics such as beatings, arrests, surveillance, imprisonment, and destruction of property amid a heavy police presence. Meanwhile, the contractors of NTPC are forcibly bulldozing the land of families who have not agreed to move. Appeals have been made to India’s National Human Rights Commission.

Guyana Fragile Frontier: Loggers, Miners and Forest Peoples

by Marcus Colchester, 1997

The interior of Guyana is now under threat as never before, and those most affected by these developments are the country’s 60,000 Amerindians. This book exposes the role of mines, the World Bank, and the International Monetary Fund in the destruction of Guyana’s rainforest and the dispossession of its indigenous peoples. It is essential reading for anyone concerned with Guyana, its people, and natural resources.

Copies available from World Rainforest Movement (U.K. Office), 1c Fosseway Business Centre, Stratford Road, Moreton-in-Marsh, GL56 9NQ, England. Fax: 44 160 865 2878 e-mail:

News Briefs

Victory for Protesters on the Narmada River — In a dramatic midnight announcement on January 30, the Indian government ordered work stopped on the Maheshwar dam, the latest dam proposed for India’s Narmada River, just upstream of the controversial Sardar Sarovar project. The Maheshwar dam is part of the Narmada Valley Development Project, which includes plans for more than 30 major dams, 135 medium dams, and 3000 small dams. The site had been occupied since January 11, when over 10,000 people marched to protest the devastation this enormous hydropower project would bring. The government ordered the work stopped on the power house, the dam, and the work of land acquisition, and a decision on construction will come later when a newly created task force reviews the project. Construction on the Sardar Sarovar dam, meanwhile, is stalled while India’s supreme court considers its fate.

Quilombos Achieve Recognition of Land Rights — Thanks in part to the efforts of dozens of groups around the world, including Probe International, the Brazilian government recognized the rights of seven Quilombos communities to 80,877 hectares of land this past November. The Quilombos, descendants of escaped black slaves, will collectively occupy the Trombetas River Quilombo area and will be able to continue their traditional activities in sustainable extraction of forest products, principally Brazil nuts, and their defence of the forests and rivers of the northern Amazon.

Twenty Years Ago: A tragic reminder of how dreadfully wrong the World Bank can go — Catherine Caufield’s exposé of World Bank mismanagement and debacles, Masters of Illusion: The World Bank and the Poverty of Nations (Henry Holt and Company, 1996), for the first time published gory details of a forensic investigation that uncovered human rights abuses committed in order to build the Chixoy dam in Guatemala. Here are excerpts.

“Possibly the worst human rights outrage ever associated with one of the Bank’s projects occurred in Guatemala. In 1978 the Bank lent that country $72 million to build a dam on the Chixoy River. Facing displacement, the local people, mostly indigenous Achi Indians, began to organize, refusing to move without receiving fair compensation. On March 4, 1980, a group of people gathered in the church in the village of Rio Negro to rally against the coming evictions. Three soldiers assigned to guard the project site fired into the crowd, killing seven people.

“Though frightened by this event, the people of Rio Negro continued to condemn the government’s resettlement plan as inadequate. On February 13, 1982, the villagers were ordered by the army to attend a civil defense meeting in a neighboring town. Seventy-four villagers went, and seventy-three of them were assassinated. The surviving men of the village took to sleeping in the hills, while the women and children, presuming they were safe from military attack, stayed in their homes. Early in the morning of March 13, however, a group of armed men came to the village, rounded up all the women and children and marched them to an isolated area. They raped many of the women and young girls before killing them and the children, then pushed the dead bodies into a ravine.”

“In July 1982, four months after the massacre, the empty village of Rio Negro disappeared under the rising waters of the Chixoy reservoir. But when the dam was completed, it was discovered that, in the words of one Bank staffer, “the damned thing wouldn’t work.” Not only had it been built on heavily fissured rocks in an area known for its active seismic faults, there were so many engineering errors that it stopped producing electricity after only five months of operation. The Bank lent another $47 million to help pay for the repairs. Poor planning, corruption, and mismanagement ultimately raised the cost of the dam from the original estimate of $340 million to $1 billion.”

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