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World Bank set to decide fate of controversial loan

The World Bank repeatedly broke its own rules in deciding to back the Chinese government’s plan to resettle almost 60,000 Chinese farmers on to Tibetan land, according to a Bank document recently leaked to the Financial Times’ Washington bureau.

The report, written by the Bank’s inspection panel, casts doubt on China’s anti-poverty scheme as well as the Bank’s commitment to its own human rights and environmental policies – confirming Bank staff violated six operational directives in a bid to push through a $160-million loan for China’s “Western Poverty Reduction Project.”

In an unusual move, the Bank approved the loan last June but withheld the $40-million resettlement component until its inspection panel had investigated objections from citizens’ groups that the scheme threatens Tibetan culture and violates Bank policies.

The Bank failed to conduct a full-scale environmental assessment for the project, which includes a 40-metre high dam and reservoir, irrigation canals, new roads, several new towns, the moving out of 4,000 Tibetan and Mongol herders, and the moving in of 60,000 Chinese farmers with growing families.

It completely overlooked several hundred nomadic families who pass through the project area twice yearly – in the Bank’s definition of “project area,” it left out several Tibetan villages – an omission the inspection panel found “difficult to understand” given that the project will, “for better or worse . . . completely change the economy and demography of [the area].”

Tibetan groups, including the Canada-Tibet Committee, are urging the World Bank to cancel the project because they believe moving Han Chinese 450 kilometres west from Qinghai province into Tibetan territory, is part of the Chinese government’s efforts to step up assimilation.

The panel’s report also confirms that “a climate of fear” surrounds the project and notes that “full and informed consultation [as required by Bank policy] is impossible if those consulted even perceive that they could be adversely affected for expressing their opposition to, or honest opinions about, a Bank-financed project.”

“The Bank’s directors now have all the information they need, says Gráinne Ryder, policy director of Probe International. “If the Bank had any respect for citizens’ rights in Tibet or China this project would never have been approved in the first place – the loan should be withdrawn immediately.”

The Bank’s board of directors is expected to make a final decision this week based on the inspection panel’s findings.

CONTACT: GRÁINNE RYDER, Policy Director, Probe International, (416) 964 9223 ext. 228 or e-mail GrainneRyder@nextcity.com