The World Bank

How its policies destroy the environment

By DANA GAAFAR / January 2020

TheWorld Bank currentand previous projects have created serious environmental problems and disasters. Many reports call for an enhancement in national pollution inspecting systems and urge the bank to identify pollution as a serious crisis that has an adverse effect on all aspects of human life. Yet, it still insists that the institution provides expertise, technical assistance and financing to help low-and middle-income countries manage land, sea and freshwater natural resources in a sustainable way to help create jobs and improve livelihoods.

The World Bank Group is ideally placed to assist countries and help them integrate pollution into their agenda. Nevertheless, few countries consider pollution a major concern or address pollution as a priority. At national and international level, very few countries are actively inspecting pollution levels.

Past mistakes

The World Bank Group finances economic development projects in poor, often unstable countries in order to end global poverty. But multiple reviews of the banking group’s investments found that instead of avoiding the high-risk projects where harm is a predictable outcome, the World Bank favors large and devastative projects to both the environment and the locals, like Yanacocha.

Yanacocha is a massive operation, spreading across hundreds of square miles at elevations as high as 13,000 feet.The International Finance Corp. (part of the World Bank Group) owns a small stake in it since they provided loans to help expand the mine.

Since 1993, Yanacocha has produced more than 30 million ounces of gold which makes it the largest gold mine in South America and the fourth most productive mine in the world.

The mine has proved a boon to Peru’s central government and has contributed $2.75 billion in tax revenue and royalties since operations began. It has generated vital cash flows to the government, who are then able to reinvest the money in basic and social services and it has indirectly created additional jobs and local businesses.

While foreign companies and banks, and the government in Lima, are profiting from the mine, the locals are left to deal with the environmental and social wreckage. Poverty remains an unsolved problem on the farms and in the villages nearest the mine. Opposition and hostility toward Yanacocha is increasingowing to lethal substances such as mercury that have made many residents of three nearby towns extremely sick in a place where there is no access to clean water and animals are dying as a result of contaminated water. Local farmers are also worried about their own health, and that of their families.

Although mines are known for creating lots of damages to the environment, projectssponsored by the World Bank Group institutionare supposedto follow a higher standard. Andyet, millions of people lost their homes, had their livelihoods damaged by projects backed by the banking group according to many investigations and reports done by NGOs.The World Bank failed in its’ mission to protect these refugees of development.

Other past mistakes

The World Bank insists that it has learned from its past mistakes, whether in the environmental, social or anti-corruption areas. And yet, at the same time, the World Bank Group lent billions of dollars for coal plants and associated infrastructure projects between 2008 and 2010 in several countries around the world.

Here are some of the past environmental problems created in part by the Bank:

· India : The Bank provided almost half a billion dollars for the Narmada Valley Development Project, a massive disaster thatdisplaced over two million people, and wipedout more than 30,000 hectares of India’s forest. According to the Indian Council of Science and Technology, theproject would increase malaria, cholera, and other diseases.

· Brazil : The Bank lent $450 million for hydroelectric projects even though then-Bank President admitted that the project had had severe negative effects on the ecology and on the Amerindian population and that it would finance a series of environmental disasters.

· Indonesia : The International Finance Corporation (IFC), an international financial institution and component of the World Bank Group, has demonstrated high involvement in Indonesia’s economic development.

The World Bank for Reconstruction and Development granted the Indonesian government hundred millions of dollars to removeseveral million people from the overcrowded Java and move them on comparatively barren islands. Simply, theproject was pointless and fruitless. It made little sense, and it contributed to the destruction of the environment. The surface land was not suited for farming.

· Botswana : The two livestock projects sponsored by the World Bank to promote cattle raising in this nation caused deaths of hundreds of thousands animals. The African-based International Institute for Livestock Development said the project “has absolutely no chance of working out …. Eighty percent of the rangeland which is under cattle in Botswana has already been severely degraded.”

So,why does the Bank get involved in these ventures?

For many employees and managers in the organization,the standard to calculate their success is achieving the annual lending quota.

Hiring environmentalists might make the Bank more aware and conscious of the damage it does, however it is extremely unlikely that the Bank will make reforms and alter their approach to the issue. After all the damages that it has created over decades and the financial and environmental legacy of these funded ventures, the World Bank institution has not yet put an end to funding environmentally destructive projects.

The deception and the lies of the World Bank

Even though recently, the World Bank has not directly financed hostile environmental ventures and has publicly declared its dedication to financing climate friendly alternatives.A study revealed that the Bankapproved several billion dollarsfor fossil fuel projects compared to a little over $5 billion for renewable energy.

The reality is that the World Bank group and its client countries don’t prioritize environmental issues such as climate change. Besides, the support from the bank and its development partners is not keeping pace with the ever increasing levels of pollution.

In his report to the UN Environment Assembly, as the UN Environment Executive Director Erik Solheim said in his report to the UN Environment Assembly: “We need political leadership and partnerships, ensure sustained engagement at the highest level possible and make prevention a priority for all, and encourage policymakers and key partners to integrate the prevention into national planning, development process, and business and finance strategies.”

The Bank’s insistence to continue financing hopeless projects or corrupted governments usually results in more poverty and more corruption despite the claims of promoting good governance. One of the worst examples is Burundi, where the bank continued to support the government despite itssuppression on itscitizens causing even more poverty and killing thousands of people and forcing over half a million to flee.In so many cases, lending money to corrupted governments makes things worse, not better.

The World Bank shouldn’t deny funding disastrous projects

Institutions like the World Bank are supposed to be different from private banks, they are meant to fight poverty, not maximize profit and create chaos and destruction. In a section of the World Bank’s website, it says, “We are not a bank in the ordinary sense but a unique partnership to reduce poverty and support development”. For this particular reason, countries that accept a loan from the World Bank must follow comprehensive, precise and meticulous rules for protecting people and the environment. And as an institution, the World Bank should want to hold itself accountable, because that’s consistent with their mission. It shouldn’t hide and lie when a project ends up hurting a community.

If a multilateral development bank wants to earn public trust in a country, it shouldn’t maintain strategy as a legal master plan. Its investments should be accountable to the people it was set up to help.To achieve this, the first act would be making the social and environmental standards of the company who earned the public trust enforceable. If a firm gets a loan and then violates those standards, the local citizens of the affected community can seek enforcement from local administrative institutions or even from local courts. Second, multilateral banks should devote a small fraction of the loan to finance the affected communities and strengthen them.In addition to that, communities should acquire assets and legal resources of their own to have a chance against huge corporations and major development banks and exercise their rights.

Moreover, to avoid a situation in which the responsible institution is in a position to gain benefit from actions or decisions made in its official capacity, the money should be administered by independent bodies (a national human rights commission for example ).

In brief, to live up to the goal of “do good and no harm,” the World Bank and other development institutions mustunderstand that immunity is harmful not only to the communities where these projects exist but also incompatible to the missions and the goals of the institutions themselves. They alsoneed to invest big in cleaner productions friendly to the environment and consumption to help counter pollution. Finally, they should increase funding for research, pollution monitoring, infrastructure, management and control.