Bretton Woods Project - Critical voices on the World Bank and IMF

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This topic area covers: the impact of Bank and Fund policies and activities on the environment, including the impacts of individual projects; programmatic and sectoral lending; and Bank and Fund policy research.

Subjects covered include: oil, gas and mining; forests, large hydroelectric projects; energy issues; agriculture; the Global Environment Facility (GEF); the World Bank's involvement in carbon trading; safeguard policies; environmental compliance with World Bank policies and international mechanisms ; and related infrastructure issues.

Oil, gas and mining

In 2004 World Bank management rejected or weakened many of the recommendations of its own Extractive Industries Review, including on: phase out of fossil fuel funding; indigenous peoples; sustainable development; and poverty reduction. Since 2006, the World Bank has been championing its 'investment framework for clean energy and development', whilst continuing to channel billions of dollars into oil, gas and mining projects. Such projects often exacerbate the poverty they claim to alleviate, exacerbate local conflict and corruption, displace local communities and disrupt livelihoods, and contribute to the emission of green house gases and other polluting substances.

Renowned WB-supported oil pipelines include: Chad-Cameroon; and Baku-Tbilisi-Ceyhan (BTC). Gold mines include: Glamis in Guatemala; Ahafo in Ghana; Bulyanhulu in Tanzania; Rosa Montana in Romania, and Anvil in the Democratic Republic of Congo. Other WB supported mining projects include: the West Africa Gas pipeline; Karachaganak oil and coal India; and the Bolivia-Brazil gas pipeline.

Case study: BTC

The IFC-funded BTC pipeline, running through Azerbaijan, Georgia and Turkey was built to transport oil from the Caspian to the Mediterranean. It has been surrounded by controversy from the outset. Local NGOs have complained of numerous problems including: failure to adequately address environmental risks; unpaid compensation; drinking water pollution; and construction malpractices. Oil began flowing in July 2006, a year behind schedule, and 32 per cent over budget. Despite the many environmental and social problems, the IFC has labelled BTC a 'development project.'


The World Bank has had a long history of funding large hydro electric projects. Built in the interests of "development", these projects - such as the Narmada dam in India, Chixoy in Guatemala, and the Lesotho Highlands Water Scheme - have led to impoverishment, environmental destruction and human rights violations. After a decline in the 90s, and six years on from the widely acclaimed World Commission on Dams in 2000, World Bank lending for large hydroelectricity is back on the up. Current projects include the Nam Theun 2 dam in Lao PDR, Allain Duhangan in India and the National Drainage Program in Pakistan.

Large hydropower is also central to the World Bank's figures on "renewable energy and energy efficiency", allowing for 60 per cent in 2005. Support is now pending for the Bujagali dam in Uganda, and the Inga dam in the DRC, the largest potential hydro site in the world.

Case study: Nam Theun 2 Dam

World Bank funding for the controversial Nam Theun 2 (NT2) hydroelectric project, in Lao PDR, was approved in 2005. It has been predicted that the environmental damage of NT2 could impact up 125 000 people, largely as a result of damage to the aquatic food chain along the tributary rivers of two tropical river ecosystems, providing livelihoods for thousands of fisher-folk. In June 2006 the NGO International Rivers Network (IRN), found damage to fish stocks, pollution of local villages and threats to nearby national biodiversity conservation areas and inadequate implementation of environmental commitments and the management plan.


In 2002 the World Bank changed its forestry policy to one of greater project involvement with the aim of increasing the level of sustainable logging, creating markets in environmental services and encouraging private sector investment in the sector. Among other reasons the policy was criticised as it did not cover the private sector lending arms of the group, the IFC and MIGA, or structural adjustment lending and it offered no protection for forests or forest-dependent people affected by non-forestry lending.

Bank involvement in the sector includes: the Forest Concession Management and Control Pilot project in Cambodia; numerous projects in Brazil including an ecosystem restoration project in Sao Paulo; and a controversial 'Emergency Economic and Social Reunification and Support Project' in the Democratic Republic of Congo which was criticised by the Inspection Panel for not adhering to internal safeguard policies and for negative impacts on the local indigenous population.

Case Study: Cambodia

In early 2000 the World Bank issued a structural adjustment credit for forestry concessions in Cambodia, on the condition that an independent monitor, the UK NGO Global Witness, be present. In 2003, on the advice of Global Witness, the Bank decided that the government was not in compliance with the terms of the credit and downgraded the smaller forestry loan to 'unsatisfactory', meaning that the loan could not be extended. Global Witness called for the Bank to withhold the next instalment of the loan a long with another forestry reform loan which was in the pipeline.

Despite in early 2004, the Bank released the funding to the Cambodian government even though a number of environmental standards were lacking, and SGS, a company convicted of corruption charges in Pakistan in 1999, had replaced Global Witness as the independent monitor. In early 2005 a network of Cambodian NGOs lodged a complaint with the Bank's Inspection Panel, outlining numerous violations of World Bank operational policies in relation to the implementation of its 'Forest Concession Management and Control Pilot Project'. The complaint also questioned the Bank's classification of the project as a 'category B' for environmental risk when policy dictates a 'category A' classification for projects which threaten indigenous people and critical natural habitats.

In June 2006 the Inspection Panel report heavily criticised the Bank for breaking its own rules by ignoring evidence showing the concession logging system had failed; failing to disqualify companies with a track-record of illegal logging; allowing companies to conduct consultations despite conflicts of interest; and failing to recognise that some of the areas put forward for industrial logging were also areas of "high ecological value". The report found that the project had failed "to take on the key objective of using the potential of forests to reduce poverty". In response the Bank has made vague commitments to ensure future projects will aim to increase local participation and better address environmental concerns. Critics point out that the Bank's plan gives no guarantees.

See the main index page for briefings and articles on the environment.

Published: Friday 26th May 2006, last edited: Tuesday 19th May 2009

Articles: 3465

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