World Bank schemes cost 2.6m their homes By Stephen Fidler in Prague
More than 2.6m people around the world were being resettled against their will by World Bank projects under way last year, according to bank documents.
The emergence of the documents, which have not been made public, will fuel controversy over bank resettlement policies that were ignited by a contentious debate earlier this year over whether to grant China a loan for an anti-poverty project in the western part of the country. That loan was expected to lead to the resettlement - supposedly voluntary - of 57,000 people.
Figures compiled by the bank for a report dated last October suggest 223 of its projects under way last October would result in the involuntary resettlement of 681,000 households and more than 2.6m people. A majority of the projects are in the bank's East Asian and Pacific (EAP) region, and most of them in China.
An earlier draft of the same report dated in May last year said 40 per cent of all projects involving resettlement were "likely to have a significant adverse environmental impacts" - and half of those made in the bank's EAP region.
Almost all the other such projects around the world were judged to be in a lower category, as having a "potential adverse environmental impact". However, these breakdowns were excised from the final version of the report, which bank officials said was prepared for the US executive director's office.
The bank was criticised by an independent panel for not following its own safeguard policies in western China, and the documents, passed to the FT by a campaigning group, show bank loans are having a bigger impact on local populations than previously acknowledged.
The bank has acknowledged failings in its resettlement policies and a new broader "operational directive" to guide the bank is under discussion. The bank has also established a 60-strong compliance operation in Washington. This is part of an attempt to counter criticism that the decentralisation of the bank and its greater efforts at satisfying its government clients has meant the bank's own safeguard policies are being ignored.
Steen Jorgensen, recently appointed director of the bank's social development department, acknowledged the institution had made mistakes in following its guidelines. "It's very clear that [critics] are right in the sense that western China is not alone," he said.
"We can only help move the debate somewhere else if we are credible in doing what we are supposed to be doing now. The problem is we are not," he said. He said however that a standard that insisted no individual was resettled involuntarily would probably impede development.
Environmental groups are dubious about the effectiveness of the new compliance operation. Some are also critical of the outlines of the new resettlement policy, which in its latest draft would no longer insist that people who lost land on being resettled would get land in its place.
Heffa Schuking, director of Urgewald, a German environmental group, said the issue was of growing importance as the numbers forced out of their homes by World Bank projects grew. She cited figures showing the numbers affected rising from 450,000 in 1983, to 2.6m now.
Bank officials said this reflected increased numbers of bank projects in cities, where sanitation and other projects required the removal of large numbers of people.
However, Ms Schuking said she was concerned that the bank's definition of voluntary resettlement might well be too generous, given that countries were increasingly monitoring their own compliance with bank safeguards.
She was also critical of James Wolfensohn, World Bank president, whose response to the bank board over the western China controversy, was to warn against "a literal and mechanistic application" of the bank's operational directives that was never intended when they were written.
In the end China withdrew its application for the controversial anti-poverty loan, arguing that it was being asked to comply with excessive demands.