The inherently flawed investigation of Nepal's Arun III dam project has undermined the credibility of the World Bank's new Inspection Panel
THE setting up ofthe Inspection Panel in September 1993 as a
permanent body which will monitor World Bank-funded
projects is a significant, far-reaching development.
Unfortunately, the World Bank (WB) governing board of executive directors' mode of selection of sensitive areas was highly
disappointing. There have been serious objections to the
board's arbitrary one-sided decision that has left out the investigation of some fundamental controversies like environmental assessment, indigenous people's X
rights and resettlement strategy,
regarding the Arun in project.
Economic analyses of the Arun III
project, timely disclosure of basic
project documents and information
by the WB, as well as public participation is of utmost importance. There
is a lack of sufficient explanation as
to why these issues of controversy
were unilaterally removed from the
investigation, even though they were
specifically highlighted by the panel.
On the one hand, it seems that
the WB management - the defendant - has used all available means
and tactics to directly influence the
board's decisionmaking, since it has
the accessibility to do so. On the
other hand, the claimants have neither the privilege of such accessibility
nor were they ever consulted by the
board before it took such decision against calls for investigating alternatives to the Arun in project. Most people strongly feel that this is a serious denial of
justice to the claimants and the undermining of a fair adjudication process.
The board's deliberate misinterpretation of the panel's
recommendations and the disclosure of information has seriously undermined the credibility of the panel as a new watchdog mechanism to focus on policy violations by the WB. Now
there are deep-rooted doubts about the panel's independence
&M credibility as an agent to monitor the WB'S compliance
with International Development Association (IDA) policies
aDd procedures, and its accountability.
Ile board must be aware of the gravity of the debate over
the Arun w project, and rising protests against the WB'S indiftect pressure and intervention in Nepal's sovereignty and deciuournaking authority. There is no reason for the board to
demand that the panel should "commence field work only
after the bank receives a decision from the Government of
Nepal, requesting the bank's financing of the project". This
conditional decision of the board is pushing Nepal into a "No-option trap". The question here is who will be responsible if
the panel's investigations of policy violations are found to be
serious enough to jeopardise Arun m's financing. Thus, it is
strongly urged that the board reconsider its decision and
firmly establish that the WB shall only request the government
of Nepal to affirm or negate the project after the completion of a through investigation of all aspects of the claims
and a guarantee by the WB that it would fully comply with the IDA's policies and procedure.
The water resource minister,
Han Priasad Pandey, has been iterating that is the Arun in project is not a
least-cost" or even a "cheap" project. Acording to him, it is an
expensive project and the electricity
it will Onerate can never be sold at a
competitive price. The government
also has serious reservations over the
lending' conditionalities that are
against the long-term interests of
Nepal.
It is very important to showcase
the credibility ofthe panel by consid
ering its conclusions and recommen
dations in line with the complete
investigation of the project. The
board's failure to do so will undou
btedly discourage the victims of such
projects worldwide, and disempower
them from using the inspection process.
The panel backtracked on the central issues of alternatives
when it finally recommended to the board that it carry out an
investigation on 3 of the 5 alleged policy violations. By not
including the issue of alternatives in the authorisation of
investigation, the executive directors have hung a question
mark on the credibility of the investigation's outcome.
If alternative models cannot be considered in the inspection process in the light of new information and aspirations
of the people id the country today, the investigations will
run the risk of being an incomplete exercise of limited
academic interest.
---Bikas Pandey is a member of the Alliance for Energy; Gopal Siwakoti is a member of the Arun Concerned Group, Nepal.
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