Tracking down the World Bank’s Inspection Panel Report and Management Response Coal Mining Project Parej-East,

NO ACTION TO BE TAKEN COAL MINING PROJECTS ON INDIGENOUS LANDSO N N CTIO A E B TO N TAKE The People of Parej-East in , Ltd., and the World Bank

The Parej East open cast coal mining project, south of Hazaribagh town in Jharkhand, India was financed by the World Bank in order to support the reform and expansion of the coal sector in India. The World Bank financed the project through two loans. One loan under the “Coal Sector Rehabilitation Project” was approved in September 1997 and provided over US$ 530 million through the International Bank of Reconstruction and Development (IBRD) for the modernisation, maintenance and expansion of 24 open cast mines of Coal India Ltd (CIL), a public sector company. A second loan of US$ 63 million from the International Development Association was given for the Coal Sector Environmental and Social Mitigation Project to assist CIL’s efforts in this regard. Open cast mining is economically destructive. Displacement of A people is inevitable. When coal occurs in lands held traditionally by indigenous peoples, mining gives rise to questions of developmental justice. And the people’s view of the same is quite different from that of the planners: ‘We did not want to be displaced and even now we don’t want it. Displacement is like cancer. It completely twists and breaks the structure of society. Look at the people who have been displaced and you realize what a crime it is. They have nothing. They are totally dependent on whatever jobs they have been given …’ Devilal Hembrom, 26, from Duru Kasmar In June 2001, the Project Affected People (PAPs) of the villages of Parej East made a formal complaint to the World Bank through the Chotanagpur Adivasi Sewa Samiti (CASS), a local NGO. It claimed that the Bank violate its own policies and procedures related to involuntary resettlement, indigenous peoples, environmental assessment, project supervision, disclosure of information, and management of cultural property. And in particular, that the way resettlement and rehabilitation as handled by the Central Coalfields Ltd. (CCL), the local subsidiary of CIL, was not in compliance with the World Bank’s guidelines. The Management’s response to the Inspection Panel Report

The World Bank acknowledged the complaint and sent its Inspection Panel (IP), which released its report on November 25, 2002. The IP found many flaws in the planning and implementation in the Parej East projects. The report pointed out that despite being the most supervised project of the World Bank with 21 supervision missions between 1996 and 2001 the supervision team’s knowledge of the ground realities in the project area was limited. The IP Report lists over 30 violations of the Bank’s own policies. In May 2003, the Bank Management, as the project supervisor, submitted a response to the IP report to the Board of Directors of the World Bank. This response does little justice to the IP Report. Its sometimes selective and distorting interpretations influenced the suggestions for remedial action, highlighted then as “Action Items”, No. 1 to 8. “Action Item No. 9“ suggested to establish an “Independent Monitoring Panel” to deal with the unresolved issues like the land titles/long term leases to all project affected persons and land for land compensation. But this idea was rejected by the Indian Government. Subsequent Management Reports on the status of outstanding issues, the latest ones dating from April 2005 and December 2005, confine themselves to discussing only those Action Items. This discussion is centred on technicalities of programmes, numbers of eligible candidates, remaining (declining) numbers of people to come under the programmes. Thus the impression is created that within a short period of time all problems will be solved and all projected affected persons (PAPs) or families (PAFs) will be fully rehabilitated and leading a happy life… Ground reality and future perspectives

The reality for the people of Parej East, however, is different. They have lost their lands and livelihoods, without being informed and adequately rehabilitated. Until today, the World Bank and Central Coalfields Ltd. have not properly implemented the Inspection Panel’s recommendations for the compensation of the affected population with regard to many crucial points. And the mining goes on and on, affecting further people while the earlier victims are still wailing over their loss and find it difficult to adjust to the new situation. Parej East is just one of 24 CIL mines cofinanced by the Bank in India. But the entire region is full of coal. Two more mines in Jharkhand are under the same programme: one about 30 km southeast, in the Ramgarh Coalfield, and one about 70 km southwest, in the North Karanpura Valley. And there in Karanpura Valley, which was once considered the “Rice Bowl” of Eastern India and which is rich in indigenous cultural heritage, another gigantic coal mining scheme comes up. It would ultimately destroy 1100 sq km of agricultural land and forests and the livelihoods of around 200.000 people in 200 villages. Already a few mines are in operation, but more than 20 new mining blocks are marked for mining in the next few years. Dimensions of Economic, Social and Cultural Survival and Human Rights

By taking the lands and destroying the livelihoods of the people of Parej East for the open cast coal mining project – and by not adequately rehabilitating them –, the Indian government violates human rights. As this project received financial assistance and logistic support from the World Bank (“Coal Sector Rehabilitation Project”), there is a responsibility of the World Bank and of states on its governing board as well. In addition, private corporations of some states have also reaped benefits from this specific mining project as Coal India Ltd. spent much of the World Bank loan on buying US mining equipment (like from Halliburton, Joy Global, Terex, Bucyrus International, Ingersoll Rand; and from Japan’s Komatsu; Source: www.seen. org). How will the victims find justice and remedy? The foremost responsibility is on the Indian authorities. They destroyed – and continue to destroy - the land and resources necessary for a sustainable living of the people in Parej East. This is for economic profits and a type of development in which the local people have no share. The authorities failed - and continue to fail - to explain the meaningfulness of their mining projects and thus to obtain prior and informed consent by the affected people. And they failed - and continue to fail - to rehabilitate the victims. This is a matter for international human rights intervention. The report of the Inspection Panel, which had to a large degree confirmed their complaints, at first, came as a ray of hope for the people of Parej East. But ultimately, it left them betrayed and hurt. The little impact of the IP is not so much the fault of the IP itself, but of the political and institutional framework in which it is set: • the lacking human rights accountability of the World Bank itself, and • the failure of states in the governing bodies of the Bank to enforce their extra-territorial obligations under the International Covenant on Economic, Social and Cultural Rights. Several states have shown concern in this particular context, which raises hopes of reforms in the World Bank that are urgently needed to make justice prevail and to prevent similar violations in future: 1. The World Bank is an international authority of the governing states. Each governing state which cleared a specific project should be liable and open for legal action by the victims, just as victims of malfunctioning national states authorities enjoy legal protection under the rule of human rights law. 2. No loan is to be given without legal guarantees for full rehabilitation of the affected persons. The servicing of the loan should first of all be used to cover the cost of comprehensive rehabilitation. States failing to implement these guarantees should be excluded from further loans for a period to be determined by the Governing Board. 3. The decision making in the Governing Board needs reform: The Board must not be chaired by management staff (the Director of the Bank – as for now) but by representatives of the governing states. Management should be called only for technical questions. Political guidance is given by the governing states. 4. Personal liability and similar rule of law procedures have to be introduced for the management of the Bank comparable to the usual standards in states authorities on the national levels. The displaced persons in Parej East are desperate, unable to cope with their changed conditions, and many are dying from grief. The World Bank should provide the funds for community rehabilitation of the victims including the purchase of land for land. A fund to raise part of this money should be collected from the transnational corporations who benefited from this project. There is urgency in this matter! Or is this the ongoing motto of the operations: No action to be taken? How to read the spread sheet on the following pages

The following pages give a three year chronological record of the World Bank reactions to the findings of the Inspection Panel (IP) on the coal- mining project Parej-East, India. The third column lists the subject matters criticized by the IP in its report (the second column shows where you can find them in the IP report). As you follow a line you will find the World Bank’s interpretation of the respective subject matter and its action or non-action taken to remedy the problem. The later columns illustrate the decreasing number of issues in each report. In a nutshell, this process can be presented like this: 37 issues raised (including subtopics) by the IP; of these 25 issues are classified as “no action to be taken” by the World Bank Management in its 2003 response even in cases where non-compliance is acknowledged; 9 “Action Items” are identified by the World Bank Management in its 2003 response, but the “action” is not much beyond “contining supervision” or “reassessment”. And by 2005, for the majority of Action Items it is proposed to “discontinue Bank supervision”. 3 “Action Items” remain in the December 2005 status report with the proposal to “monitor for further six months” (Nos. 2,3,8) Ultimately, the table shows how little action was taken on the issues raised by the IP and the victims. EIA: Environmental Impact Assessment / IP: Inspection Panel / IPDP: Indigenous People Development Plan / IMP: Independent Monitoring Panel / PAPs: Project Affected People of Parej-East / RAP: Resettlement Action Plan (More information is available upon request at kuennemann@fian.org) About us FIAN is an international human rights organization with individual members in over 50 countries campaigning for the realization of the Right to Food. FIAN intervenes against violations of the Human Right to Food through letter campaings, case-work and advocacy. FIAN uses the UN human rights system as well as regional and national human rights regimes to strengthen economic, social and cultural rights. Document prepared in collaboration with CASS.

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Serial NumberInspectionInvestigationDoc. Panel Section/24000 Report, of Paragraph12 Nov 2002; Resettlement Action Plan (RAP) 1. 3.2, 50-57 Compensation for Land 2. 3.3,58-78 Compensation for Houses 3. 3.4, 79-88 Choice of Resettlement Sites 4.1. 3.5.1 90-96 Casual Labor Opportunities: 4.2. 3.5.2 97-102 Size of plots 4.3. 3.5.3, 103.110 Water, Health and Services 4.4. 3.5.4, 111-127

Cultural property 5. 3.6, 128-129 Title to house plot: Living in a resettlement colony without legal possession of any land, 6. 3.7, 130-146 whereas before they were landowners; protection from a third displacement is necessary.

Grievance mechanism 7. 3.8 , 147-152

8. 4. 153-183 Traditional Land Rights: Compensation for land used under customary land rights, i.e. without land titles, is a difficult (but well-known) issue: federal Indian law and Jharkand state law require legal documentation as a condition for compensation. As this is difficult to obtain for Adivasis due to bureaucratic and social obstacles they are not adequately compensated for the loss of land.

Access to Forest Products 9. 5.1, 184-196 Compensation for Loss of Access to Forest Products 10. 5.2, 197-204 Income Restoration 11. 6, 205-212 Entitlements in Parej East-Jobs in the Mine 12. 6.1.1, 213-227 Land for Land Compensation 13. 6.1.2, 228-235 Non-Farm Based Self-Employment 14.1. 6.1.3, 236-238; 6.1.3.1, 239-243 Income Restoration through Self-Employment 14.2. 6.1.3.2, 244-258 Wage labour 15. 6.1.4, 259-261 Timing of Income Restoration; Changing into Entrepreneurs 16. 6.2.1, 262-267 Rehabilitation before Displacement 17. 6.2.2, 268-271 Transition Period and Subsistence Allowance 18. 6.2.3, 272-284

Adoption of Alternative Income Generating Schemes - Land Based Income Generation 19. 6.3.2, 288-291 Separate IPDP for Tribals 20. 7.1, 294-299 Original Parej East IPDP 21. 7.2, 300-316 Annual Implementation Plan 22. 7.3, 317-326 Local Participation 23. 7.4, 327-341

Dominance of Infrastructure Activities 24. 7.5, 342-349 Observations of the Environmental and Social Review Panel 25. 8.2, 367-377 Disclosure of EIA, RAPs and IPDPs 26. 9.1, 389-394 Parej East Public Information Center 27. 9.2, 395-409 Environmental Assessment and Environmental Action Plan 28. 10.1. 414-425 Preparation of Resettlement Action Plan 29. 10.2, 426-434 Implementation of Resettlement Action Plan 30. 10.3, 435-440 Consultation with Parej East NGOs 31. 10.4, 441-448 The Supervision Consultant 32. 11.1 454-457 Bank Supervision Missions 33. 11.2, 458-473 IP FindingManagement Doc.as rendered 25865 Response, of in 25 July 2003 not in compliance not in compliance serious questions not in compliance no professional analysis. PAPs lost in standard of living not in compliance partly not in compliance irresolvable issues, in compliance not in compliance. title transfer should have been identified and dealt with when the Parej East RAP was prepared, formally in compliance not in compliance "[D]uring preparation, Management did not raise any questions about the possible lack of legal recognition or the process required to ensure compensation for tribals cultivating traditional land without title or documentation." information provided not in compliance not in compliance not in compliance not in compliance not in compliance not in compliance positive development major flaw strategy should have been in place failed to demonstrate compliance essential efforts recognized, but will not help PAPs in conformity with O.D. 4.20 not in compliance not in compliance not in compliance: already in 1997 acknowledged that there had been virtually no participation.., one design for three mines no long-term projects on literacy, m&c health, self help groups no formal violation of OD 4.01 not in compliance not in compliance not in compliance partly in compliance/partly not improvements in the process not in compliance not in compliance efforts to overcome problems ManagementDoc. 2586525 JulyResponse,Comment of 2003,

M."notes finding of non-compliance" M."notes finding of non-compliance" M."notes finding" M."notes finding" technical and numerical clarifications/improvements M."notes finding" M."notes finding"

M."notes finding of compliance" M."notes finding". 1997 issue with Gov.of India; 1999 to be considered on case-by-case basis in Law Ministry; 2002 land titles still not received by time of project closure

M."notes finding of compliance"

M."notes finding of non-compliance" "Management [...] acknowledges it should have developed a better understanding of the impediments PAPs might face [...] when trying to regularize their rights to lands cultivated under customary tenure." 16 families claimed compensation, out of which 4 received compensation.

M."notes finding of compliance" M."notes finding of non-compliance" M."notes finding of non-compliance" M."notes finding of non-compliance" M."notes finding of non-compliance" M."notes finding of non-compliance" M."notes finding of non-compliance" M."acknowledges recognition" M."notes finding" M."notes finding" M."notes finding of non-compliance"

M."notes acknowledgement of recognition and efforts" M."notes finding of compliance" M."notes finding of non-compliance" M."notes finding of non-compliance" M."notes finding of non-compliance" different types of activities at discretion of villagers M."notes finding of compliance" M."notes finding of non-compliance" M."notes finding of non-compliance" M."notes finding of non-compliance" M."notes finding of compliance/non-compliance M."notes finding of compliance" M."notes finding of partial compliance M."notes finding of non-compliance" M."notes finding of compliance" ManagementDoc. 2586525 JulyResponse,Action of 2003,

"no action to be taken" Continuing supervision "Action Item No. 5" "no action to be taken" "no action to be taken" Continuing supervision and information sought "Action Item No. 1" "no action to be taken" Continuing supervision, follow-up water access and quality, proposed IMP, "Action Item No. 6"

"no action to be taken" Continuing supervision, proposed IMP, "Action Item No. 3"

"no action to be taken"

Action proposed: 1."continue to monitor this issue until all claims have been settled", 2. IMP should "monitor progress on this and other issues"; "Action Item No. 2"

"no action to be taken" Continuing supervison and follow-up Continuing supervision, "Action Item No. 1" "no action to be taken" Continuing supervision, "Action Item No. 7" "no action to be taken" Post-project supervison, "Action Item No. 1" "no action to be taken" "no action to be taken" "no action to be taken" Disbursal of total US$ 300.000 to PAFs recommended, continuing supervision, proposed IMP; "Action Item No. 4"

"no action to be taken" "no action to be taken" "no action to be taken" "no action to be taken" Continuing supervision and focus on consultation in project design, "Action Item No. 8"

"no action to be taken" "no action to be taken" "no action to be taken" Contiunuing supervision, "Action Item No. 8" (cf. above) "no action to be taken" "no action to be taken" "no action to be taken" "no action to be taken" "no action to be taken" "no action to be taken" ManagementReportof onOutstanding Issues,StatusDoc. 5 31605 April, of 2005

"continue to monitor through Sept 2005"

"review survey results ... will be reassessed by Sept 30, 2005"

"Bank concluded supervisory responsibility, but will review ... Monitoring reports"

According to Gov.of India granting of long term lease will create difficult legal issues. Legal amendments proposed. "Bank's involvement will be reassessed by Sept 30, 2005"

reassessment Sept. 05 "Of the initial 41 claims filed with Jharkhand state authorities, 22 claims have been authenticated in favor of the PAPs and compensation has been paid, is in process, or awaiting clarification from the District Revenue and Forest Departments. Of the 19 claims that were rejected, 8 families have filed an appeal with the State Tribunal [...]"

not among "Action Items" "review survey results ... will be reassessed by Sept 30, 2005"

"Bank's involvement will be reassessed by Sept 30, 2005"

"review survey results ... will be reassessed by Sept 30, 2005"

"review consultation results; draft action plan; assessing support; implementation schedule; Bank's involvement to be reassessed by Sept 30,2005

Development of communication strategy and ongoing dialogue. "Bank's involvement will be reassessed by Sept 30, 2005".

"Bank's involvement will be reassessed by Sept 30, 2005" (cf. above). ManagementReportof onOutstanding Issues,StatusIP Inv.Rep.andfollowing Management'sResponse, Dec. 21,2005 dated

M."proposes to discontinue Bank supervision"

M."proposes to discontinue Bank supervision"

Legal amendments yet to be put before parliament. M. "proposes to monitor for further six months"

"Monitor this issue for a further six months" 19 claims authenticated: 12 disbursals, 6 pending disbursals due to disagreements between the District Revenue and Forest Departments. 1 disbursal pending due to the claimant's death. 19 claims rejected (still 8 non-settled appeals); 3 not applicable because land was not required. Within 8 months no progress achieved on the pending compensations.

M."proposes to discontinue Bank supervision" M."proposes to discontinue Bank supervision" A M."proposes to discontinue Bank supervision"

"Issue has been substantially solved" M."proposes to discontinue Bank supervision"

Apparently good rapport with PAPs. Remedial measures to grievances. M. "proposes to monitor for further six months".

M. "proposes to monitor for further six months" (cf. above).