May 7, 2000

Mr. Dej Poomkacha
NGO Coordinating Committee on Development
People’s Forum

Dear Khun Dej:

Thank you for your invitation to ADB to attend the People’s Forum 2000. I appreciate the final statement of the People’s Forum that you presented to me. I also wish to thank you for allowing me to present President Chino’s letter to the People’s Forum.

I have presented the People’s Forum statement to President Chino and briefed him on our discussions. President Chino is concerned with the issues raised in the People’s Forum. President Chino has instructed ADB senior staff to review the issues raised by the People’s Forum and prepare a detailed briefing for him. I hope you understand that President Chino cannot provide a complete response until we return to Manila as the information required for a complete analysis is not available here in Chiang Mai. Meantime, we have attached information sheets on selected ADB projects in Thailand and Lao PDR for your consideration.

On behalf of President Chino, I received a letter yesterday from the Network of 38 People’s Organizations regarding ADB’s operations in Thailand. I shared this letter to President Chino. President Chino has instructed that the issues raised in this letter be addressed by staff soonest. You may be aware that the Network of 38 People’s Organizations demanded that the issues raised in their letter be placed on the agenda of the 33rd Annual Meeting of the ADB Board of Governors. At this late stage, however, it is impossible to alter the agenda of the Annual Meeting. Please be assured the issues raised in the letter will be given our full attention upon our return to Manila and a response will be prepared accordingly.

Please note the letter from the Network of 38 People’s Organizations did not include an address and we are uncertain how to contact them. We would be grateful for your assistance in sharing this response with the Network, and in helping us find contact information for the Network.

I assure you that the names and contact information for key ADB staff responsible for directly addressing your concerns will be provided to you by 15 May 2000. These people will be instructed to provide written responses and detailed information by 30 May 2000 and will meet with representatives of affected people in June. We would appreciate your assistance in organizing these consultations.

Again, on behalf of the ADB and President Chino, I would like to thank you for your strong interest in ADB operations and to emphasize that ADB is committed to constructive dialogue with NGOs and civil society. ADB considers the interests of people to be at the core of its operations and wishes to use every opportunity possible to establish and maintain stakeholder participation.

Sincerely yours,
Myoung-Ho Shin

Vice President (West)

Attachment:

ADB question-and-answer sheet on NGO-related matters, May 7, 2000

Policy Questions

Question:

Why did the ADB President decline an invitation to address the parallel People’s Forum 2000 being held in conjunction with the ADB Annual Meeting?

Answer:

ADB recognizes the importance of the People’s Forum 2000 and the issues that the People’s Forum is addressing. ADB greatly appreciates the invitation for the President to participate in the People’s forum. Unfortunately, the invitation to participate was received only two weeks before the start of the ADB Annual Meeting, and a number of commitments had already been included in the President’s schedule.  To represent ADB in the People’s Forum, the President formed a delegation of one of ADB’s operations Vice Presidents and many of the senior ADB staff involved in the issues the People’s Forum is addressing. It is regretted that the President could not attend.

As a part of the Annual Meeting, the President does make time available to meet NGOS, and to engage in dialogue with NGOS. The Operational Vice Presidents of ADB also will attend this meeting, along with senior ADB staff. ADB considers this meeting, while short, an important opportunity to meet with NGOs and receive their views on ADB operations.

Question:

What is ADB’s development model? ADB’s development approaches are top-down and do not directly benefit the poor and vulnerable.

Answer:

ADB has adopted a development model that focuses on poverty reduction, with a special emphasis on absolute poverty. In ADB’s view poverty is an unacceptable human condition. Poverty is not only a measure of income, but also is a depravation of essential assets and opportunities to which every human is entitled. Economic growth and investment is necessary to reduce poverty, but in itself is not sufficient to reduce poverty. ADB has made a radical shift in its operations, to make poverty reduction its overarching goal. To ensure that all aspects of poverty are driven by poverty considerations, ADB is translating its poverty reduction efforts into a comprehensive strategy that will guide all ADB operations.

Question:

What is ADB’s policy on corruption? How does ADB address corruption in its operations?

Answer:

ADB’s anticorruption policy is intended to reduce the burden that widespread, systemic corruption exacts on the governments, economics, and people of Asia and the Pacific. ADB’s concern with combating corruption is grounded largely in economic considerations and considerations connected with sound development management. ADB’s anticorruption initiatives focus on three main objectives: (i) supporting sound markets, and efficient, effective, accountable, and transparent public administration; (ii) supporting promising anticorruption efforts and improving the quality of ADB’s dialogue with its DMCs in a range of governance issues, including corruption; and (iii) ensuring that ADB’s projects and staff adhere to the highest ethical standards.

Question:

What is the Greater Mekong Subregion Program? What does it accomplish? Does the GMS program focus on hydropower development?

Answer:

The purpose of the GMS program is to promote development in the six GMS countries – China PRC, Lao PDR, Myanmar, Thailand, and Viet Nam. The program helps strengthen economic linkages, with an ultimate objective of facilitating  sustainable economic growth and improving the standard of living in the subregion.  Since its inception, the GMS program has covered a broad spectrum of activities.  Priority sectors in the GMS program are transport, energy, telecommunications, environment, human development, tourism, trade facilitation, and investment. Environment is a particular concern of the GMS program, with a long-term framework that will address cross-border issues of environmental degradation and sustainable development.

Hydropower development is a part of the GMS program. ADB’s approach to hydropower development is to formulate an environmentally sound and socially acceptable least-cost hydropower development plan. Hydropower is one of the main energy resources of the Mekong region and its development is inevitable. In ADB’s strategy, hydropower development will be pursued to provide needed electricity, provide a commodity for export, and reduce dependence on fossil fuels for power generation.

Question:

Does ADB consult the people affected by its operations? Does ADB include public participation in its processes?

Answer:

Participatory development is a process through which stakeholders and beneficiaries can influence and share control over development initiatives and development decisions that affect them. If stakeholder interests are not identified and addressed before commitments to development are made, these interests often will emerge during project implementation, comprising the effectiveness and sustainability of the initiative being pursued. In its operations ADB affords great attention to stakeholder and beneficiary concerns, including identifying people affected by its projects, and their needs, constrains, and demands, and their capacity to participate in projects. All new projects are closely assessed so that priority requirements of people are met, and that projects will be sustainable. ADB also recognizes the importance of participation in its policy development activities. An important part of ADB’s current development processes is consultation with stakeholders in ADB’s operations, including NGOs and other civil society organizations.

Question:

What is ADB’s approach to making information about its operations available to the public? Does ADB translate its operational documents into the languages of the people its projects affects?

Answer:

ADB’s policy on information disclosure was prompted by the realization that ADB should provide the greatest possible degree of transparency and accountability in its activities. The policy emphasizes a presumption in favor of disclosure. ADB has taken a number of steps to improve its external information flows. This includes the creation of a Public Information Center in ADB Headquarters, and a active program to inform the interested public of information about ADB operations that is available, include continued expansion of ADB’s Internet web site. A feature of ADB’s information program is that documents are provided to NGOs free of charge, and that NGOs are periodically updated about new documents and information that become available. Information practices in ADB are reviewed annually to ensure that the program remains effective. At the end of the year 2000, NGOs will be invited to comment on ADB’s information activities as a part of the review.

ADB recognizes the importance of the translation of operational documents. A technical assistance project currently is in place in selected countries on a pilot basis to support translate important documents into local languages. Increasingly, document translation is being mainstreamed into project and technical assistance operations. Social assessments and other field-level activities in ADB operations are necessarily conducted in local languages, to ensure effective and complete communication with local communities.

Question:

What is ADB’s inspection function? Is it effective? How is it being made more effective?

Answer:

The inspection function is a modality through which people affected by ADB operations who believe that ADB has violated its internal policies and practices can demand a review of the particular activity that affects them, and demand that appropriate actions be taken. The operation of the inspection function recently was reviewed after two years of operations. The review concluded that the inspection function essentially is operating effectively, but that more information about the inspection function must be made available. Several initiatives being adopted include making a full-time staff member responsible for broadening public knowledge of the inspection function. Steps to be taken include conduct of periodic public information workshops in ADB’s member countries, targeted at, among others, NGOs and other civil society organizations.

Operational Questions: Thailand

Question:

Samut Prakarn Wastewater Management Project [a.k.a. Kiong Dan Project]: Local residents in the area of project facilities are strongly opposed to this project. What action is ADB taking?

Answer:

This project often has been referred to as the ‘Kiong Dan’ project – Kiong Dan is the community in which the Samut Prakarn project facilities will be located. The Government is very sensitive to the not-in-my-backyard concerns of local residents and recently asked ADB to approve an additional project package specifically aimed at informing the community about the project and to identify avenues to their better understanding and participation. A number of measures are being put into place to address technical aspects of the project, including measures to address odors that may be created and to redesign the effluent discharge point. Project review suggests that the effluent discharge from the wastewater treatment plant will not affect local fisheries, and a component of the project is to reforest degraded mangrove areas in the project area. Other aspects of the project have been redesigned to take community concerns into consideration, including the preservation of a canal used by local fisherfolk that under the original design was to be filled in.

Question:

Agriculture Sector Program: It is said this project will have serious impacts on small farmers, changing their ways of farming and threatening their livelihoods. It also is said that the program was designed without adequateconsultation with people it will affect. What is ADB doing?

Answer:

The program includes increased cost recovery from irrigation services and on-farm development work, resulting in an increase in such factors as irrigation service charges and a reduction of subsidies on inputs such as fertilizer. While these measures may have some adverse impact on farm incomes in the short run, they are considered essential for the optimum utilization of limited resources, and it is expected that small farmers will benefit in the long run. As mitigation measures, the program includes a wide range of components to support small-scale and poor farmers, such as strengthening community-based organizations, implementing a national farmer education plan, and improving access to agriculture credit and services in agricultural research and extension.

The program was designed through the participation of stakeholders. To seek input from affected communities, two stakeholder participation workshops were held during program development. Participatory field assessments were carried out in seven provinces. A large part of the program design was based on input from these consultation exercises.

Question:

Educational Sector Program Loan/Education Management and Financing Study/Higher Education Development Project: Some NGO complain that the Thai educational system is being forced in an inappropriate direction because of the ADB Educational Sector Program Loan. Is this true?

Answer:

The 1997 Thai constitution stipulates that the State shall provided education and training for its citizens and that the private sector shall be encouraged to participate in the provision of education and training. The Constitution stipulates that a law addressing national education be developed. Work on this law began before ADB became involved in the Thai education sector. While development of the law may have had some input from studies conducted under ADB assistance, ADB has had only a limited role in the drafting of this law. ADB assistance for the development of higher education was extended only after adopted strategies for higher education – ADB was not involved in the development of these strategies.

Operational Questions: Others

Question:

Cambodia – Sustainable Forest Management Project: There are allegations that there is illegal logging in forest concessions. What is ADB’s intervention doing about these allegations?

Answer:

ADB’s project is supporting the inspection of all active forest concessions, including inspections at the field-level. Additional information about illegal logging is being gathered. All information gathered will be considered in the project’s final report and appropriate recommendations will be made to the Government regarding limiting or canceling forest concession agreements. Besides cancellation of forest concession agreements, other means to control illegal logging, such as revocation of permits to transport logs –such means have proven effective in the past.

Question:

Lao PDR – Theun Hinboun Hydropower: A number of negative impacts emerged with the operationalization of the project. What actions are being taken? It has been said that the project is a bad investment for the country. Is this true?

Answer:

Some negative impacts were expected. However, it was recognized in project design that the specific degree of these negative impacts could not be known until the project began operation. Some unexpected negative impacts emerged. Specific mitigation measures now are being put into place to address negative impacts.  If negative impacts cannot be mitigated, compensation arrangements have been developed. ADB is reviewing several cases where mitigation or compensation may not be considered adequate. Resettlement under the project has been minor. In cases of unavoidable resettlement, adequate compensation has been arranged.

The Government invested some $60 million in the project. The Government already is realizing significant return. ADB considers the project to be a good investment for the country.

Question:

Lao PDR – Nam Leuk Hydropower: It has been charged that here has been illegal logging and other aspects of environmental degradation in the project area. Is this true, and what is being done? It is charged that there are negative environmental and social effects from the project. Is this true, and what is being done?

Answer:

Charges of illegal logging may appear to be true. The Office of the Prime Minister has issued an order that all logging actives in the project area cease.

Some expected and unexpected social and environmental impacts are being realized.  Mitigation measures are being put into place to deal with these effects. Where necessary, compensation is being arranged. Actions are being taken to address the causes of these negative impacts, and relevant studies are under way.

Question:

Greater Mekong Subregion – Poverty Reduction and Environmental Protection in Remote Watersheds: It has been charged that this project will affect indigenous peoples and tribal groups in the project area, through limitation of their use of natural resources and traditional livelihood practices. Is this true?

Answer:

The project is being undertaken in two phases. The first phase was a review of sectoral issues related poverty reduction and environmental protection, and study of selected remote watersheds to set a foundation for further study. The second phase will examine three selected watershed, in China PRC, Lao PDR, and Viet Nam and the development of prefeasibility studies for possible projects addressing environmental protection and poverty reduction. No specific projects will be undertaken under this project. All work under the project has been undertaken in close consultation ith affected communities.

Question:

Viet Nam – Se San III Hydropower (proposed): What will be the impact of this project? How does it relate to water releases under the Ya Li project that recently resulted in the deaths of a number of local people?

Answer:

As in any hydropower project, there will be social and environmental concerns to be addressed in project design and implementation. Preparatory work currently is under way, including a cumulative environmental impact assessment, a project-specific environmental impact study, a rapid biodiversity assessment, a river basin management concept paper, and a minority peoples development plan.

Recently, unexpected heavy discharges from the Ya Li hydropower project upstream (not an ADB project) resulted in the death of a number of people, and significant property damage. Among other things, the proposed Se San III project would have the benefit of regulating discharges from the Ya Li project.
from the Ya Li project.