June 24, 1999
International Bank for Reconstruction and Development
International Development Association
International Finance Corporation
Multilateral Investment Guarantee Agency
The focus of my intervention is on the Bank’s adherence to its own
internal policies and procedures– a seemingly technical issue that has
important ramifications for the Bank’s reputation– Why?
Because the issue of compliance with our guidlelines is not just
relevant for the sake of abiding by a set code of conduct. It is
substantively important because our policies and procedures reflect a
set of values and approaches to development that we have estalished in
going forward with our development mandate. They represent who and what
we are and speak to a phillosophy we believe should be respected.
The reality is that the Bank will be judged by its high profile
projects. It is reasonable for outside observers to assume that our
actions on controversial or profile projects reflect broader practices
within the Bank. Therefore, in situations of a sensitive nature for
whatever reason (whether fairly within the Bank’s Articles or not), it
is incumbent on the Bank to clearly live up to the letter and the
spirit of our policies and guidelines.
In this case the Bank did not respect its own guidelines vis-a-vis
information disclosure. Given that this project has been under public
scrutiny for some time, it is oven more essential that the Bank provide
interested parties with sufficient time to asses and review. Missing
disclosure deadlines only brings enhanced scrutiny and raises questions
as to the willingness of the Bank to listen, accept and act on outside
Further, we question the Environmental categorization of the project.
There is no doubt in our minds that this is a caegory A project based
both on a review of the Bank’s ovvn guidelines and by any reasonable
test of the standards we have to meet in the public arena. It is
difficult to understand how a project involving the resettlement of
almost 60,000 people could not have significant environmental impact.
The magnitude of resettlement envisioned within this project also
raises substantive issues with respect to both socio-economic impacts
and the protection of indigenous populations. It is incumbent on the
Bank to complete and publicly release through assessments that fully
take into account all aspects of the proposed resettlement. At the end
of the day we strongly believe that the Bank should err on the safe
side: if projects are on the borderline between classifications, the
more stringent classification should be applied. Again, the Bank’s
track record on large projects of this nature sends a signal not only
to the outside world, but also to operational staff within the Bank.
Compliance with our guidelines and policies is always in the best
interest of our clients. I do not believe that the needs of our clients
are best served if we selectively or narrowly apply them.
Credibility comes from consistent application of accepted rules.
Arbitrary application of our guidelines will render them irrelevant.
It is clear now that judgments have been made, opinions have been
rendered and the dye is cast on the polarized views around this
project. We cannot change that context. Therefore we attach signficant
importance to the steps going forward. The commitment by China and the
Bank to fully abide by the Inspection Panel process and to not draw
down on Bank/IDA financing for part C of the project until any Panel
investigation is completed is imperative. The process ahead
necessitates nothing less than full acceptance of and compliance with
We recognize the fact that the developmmt paradigm is particularly
complex and often involves controversial and contentious issues. All
the more need for transparency, consistency and compliance.
Accordingly this chair would like to be registered as abstaining on this project.