Tracking Down the World Bank's Inspection Panel Report and Management Response Coal Mining Project Parej-East, India

Tracking down the World Bank’s Inspection Panel Report and Management Response Coal Mining Project Parej-East, India NO ACTION TO BE TAKEN TAKEN E TO B A N CTIO NO LANDS INDIGENOUS ON PROJECTS PROJECTS MINING COAL The People of Parej-East in Jharkhand, Coal India 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.

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