Accountability and the World Bank

Mustafa Talpur, MA 03, of ActionAid Pakistan, was a member of an independent inspection panel investigating accusations that the World Bank failed to manage environmental risks in the Left Bank Outfall Drain (LBOD) and the Pakistan National Drainage Program (NDP) projects.

In the mid 1980s, the World Bank and multi-lateral donors financed the LBOD project, a US$1.02 billion venture that aimed to address the problem of waterlogging and salinity in the Indus Basin in Southern Pakistan. To lower the water table and remove salinity, a huge network of surface drains was created between 1987 and 1997 to redirect surplus drainage from the Indus Basin irrigation system to the Arabian Sea. In 1997, the World Bank's International Development Association lent Pakistan an additional US$285 million to partially finance the NDP project, which was to continue the work of the LBOD project.

These projects were thought to be important because water is an extremely scarce resource in Pakistan and irrigation for agriculture and food production is critical to poverty reduction. Irrigated agriculture in the Indus River Basin accounts for a quarter of Pakistan's GDP, two-thirds of its employment, and about 80 percent of its exports. However, Sindh, near the tail end of this basin, is now more vulnerable to waterlogging and salinity problems due to the intensive irrigation system. This area actually benefited from flooding since it brought nutrient rich silt. Now, due to the damming of the Indus River, there are no more floods and the coastal ecology is badly damaged by sea intrusion.

Despite good intentions, the LBOD and NDP projects caused several environmental, social and economic problems after its operation in 1995. After devastating destruction caused by monsoon rain in the Indus Basin in July 2003, local communities and civil society organizations in the Badin District, formed the Save the Coast Action Committee in order to initiate an organized campaign for the protection of the historical rights of the coastal belt. This committee filed an inspection claim on the NDP with the Inspection Panel of World Bank. Executive directors of the World Bank approved the request in the first week of December 2004. The independent inspection panel that was formed visited the project area in May 2005 and found instances of non-compliance with provisions of several Bank policies, including environmental assessment, natural habitats preservation, involuntary resettlement, indigenous people's rights, management of cultural property, and disclosure of information. It also concluded that the design of the LBOD underestimated the risk of extreme meteorological events, and its subsequent breakdown caused deleterious impacts to fisheries and wetland habitat. In July 2006, the inspection panel finished its findings and submitted a final report to the executive directors of Bank.

In September 2006, without any response from the World Bank in the fourteen months following the initial inspection, representatives from poor communities affected by the LBOD convened a token hunger strike in front of the World Bank office in Islamabad, Pakistan. They demanded that the LBOD loan be converted into a grant to be spent on the restoration of the livelihoods of affected people as well as the environment. Finally, in the beginning of November 2006, the World Bank announced a new water management action plan, designed in collaboration with the national government and the local government of Sindh, to assist the livelihoods of poor people in flood prone and wetland areas, to measure the impact of ecological damage to wetlands, to repair and strengthen damaged infrastructure, to update flood response plans and build capacity around their implementation, and to develop risk management solutions for drainage infrastructure. The Bank promises a report on progress before the next monsoon season in June 2007.

Mustafa commented that those who requested the inspection are not happy with the World Bank's plan. They think it is just eyewash, and it has not even begun to address the problems identified by the inspection panel. Mustafa writes, "Cited plans are part of regular Bank financing to Pakistan. Bank management has not addressed any of our demands, and thus we completely reject this new plan. We demanded full reparation of affected communities, compensation for human and crop losses, and accountability for policy violations. However, it seems that this was forgotten after the Bank approved this new loan. Now our request seems counterproductive, and in the end, the inspection panel was used as an institutional mechanism to bail out the Bank from gross violations of human rights."

For more information on the advocacy and community organizing work of ActionAid Pakistan, visit their website http://www.actionaid.org/pakistan/. To hear more about Mustafa's experience as an independent inspection panel member, please write to him (Mustafa.Talpur@actionaid.org).