International Business Law

PRETORIA GOOD GOVERNANCE PROGRAMME 2006

DEVELOPMENT AND HUMAN RIGHTS COURSE

Human Rights Obligations of the World Bank and the IMF

(The World Bank Inspection Panel)

Wednesday, 5 December 2006

DR C. LUMINA

CASE STUDY 2: ITAPARICA RESETTLEMENT AND IRRIGATION PROJECT (BRAZIL)

INTRODUCTION

This case study is designed to assess your understanding and/or awareness of the various human rights issues that arise out of the activities/policies of the World Bank. You are required to read through the given scenario and to attempt the questions given below.

FACTS

In March 1997, 121 community leaders and a Brazilian organization called Polo Sindical do Submedio Sao Francisco filed a Request with the World Bank Inspection Panel for an investigation into the Itaparica Resettlement and Irrigation Project in Brazil on behalf of local communities who had been adversely affected by the design and implementation of the project. The Itaparica claim was the first against a World Bank mitigation project.

The Request claimed that the standards of living, health and economic-well being of people living in the project area had been directly and adversely affected as a result of construction of the Itaparica Hydro-electric dam located on the São Francisco River, at the border of the Bahía and Pernambuco states, the faulty execution of the said project, and the Bank's omissions and failures in the preparation and implementation of the project. The Project, which sought to provide compensation for the irreversible cultural, environmental, economic, and social losses caused by involuntary resettlement due to the construction of the Itaparica dam, had instead worsened the living conditions of the resettled communities. Specifically the Requesters claimed, inter alia, that after ten years of involuntary resettlement of the project area population (a) only 35% of the project's six irrigation systems had been completed, 34% were under construction and 31% were still in the design phase; (b) the Tuxá indigenous community had been resettled elsewhere but were unable to grow crops, since the irrigation system promised was still under design; (c) several of the irrigation systems already constructed had serious operational and maintenance problems; (d) the delays in the installation and commissioning of the irrigation projects had contributed to an increase of violence in the resettled communities, to alcoholism and family breakdown; (e) there was an evident deterioration because of the poor quality of the materials utilized in construction of some of the project's 110 agricultural settlements (Agrovilas) which included health and education infrastructure; and (f) in general, a significant proportion of the about 40,000 beneficiaries (six thousand families) were in worse social and economic conditions than before the construction of the Itaparica Dam. They alleged a failure to observe the policies and procedures of the Bank.
On June 24, 1997, the Inspection Panel recommended a full investigation of the Itaparica claim to the Board of Executive Directors. After a heated and highly politicized discussion and a rare vote by the Board, the Board narrowly rejected the Panel’s recommendation for an investigation. Instead, they accepted the Government of Brazil’s word that it would implement a $290 million Action Plan. The Panel was not allowed to evaluate the effectiveness of the Action Plan, nor were affected people allowed to participate in its development.

QUESTIONS FOR DISCUSSION

Citing provisions of the relevant international and/or regional human rights instruments where appropriate, answer the following questions:

1. What were the key human rights issues at stake in the claim?

1. What, if any, are the obligations of the Government of Brazil and of the World Bank to respect these human rights? Is the World Bank bound to uphold human rights recognised under international law?

1. Are the World Bank’s operational procedures and directives consistent with related international human rights standards?

1. What is the mandate of, and how effective is, the Inspection Panel in ensuring that Bank policies do not infringe upon human rights?

1. Can you suggest ways in which development cooperation can contribute to the promotion of human rights in developing countries?

1. How best can human rights issues be included in the work of the World Bank?

REQUIRED READING

Articles of Agreement of the IBRD, Article 1.

Lumina, C. 2006. ‘An Assessment of the Human Rights Obligations of the World Bank and the International Monetary Fund, with Particular Reference to the World Bank Inspection Panel. Journal for Juridical Science 31(2): 108-129.

Resolution No. IBRD 93-10 /Resolution No. IDA 93-6 (World Bank Inspection Panel).

Page 1 of 2

Dr C. Lumina / PGGP 2007 Case Study 2: Human Rights Obligations of the World Bank & IMF