By Robert Goodland (THE GUARDIAN, 23/10/07):
I worked as environmental adviser for the World Bank Group, headquartered in Washington, for 23 years. I joined because I believed the bank wanted to improve the lot of the poor and conserve the environment. Before going to Washington I did an environmental study for the government of Tucurui, the first big dam in Amazonia. A vast part of the forest was flooded, so I saw at first hand the huge environmental and social cost of misguided development projects.
The bank knew how impassioned I was but hired me none the less. I thought I would work with colleagues to prevent blunders in the future. Indeed, we achieved a lot. Perhaps our greatest feat was having the bank adopt a suite of social and environmental policies to be applied to all projects.
The bank also adopted policies for reducing poverty directly, instead of relying on “trickle-down” economics. In 2000 I was thrilled when James Wolfensohn, then president of the bank, led it to pursue the UN’s Millennium Development Goals. Assessing risks and impacts, we failed to stop the bank funding ExxonMobil’s oil pipeline in Chad and Cameroon, but managed to prevent it supporting China’s Three Gorges dam.
Progress faltered in the late 90s. Most social and environmental policies were gutted, and those that remain are no longer being rigorously followed. During the Wolfowitz presidency, policy work on the two key challenges of population and climate change was crippled. While governments around the world are regulating carbon dioxide as a pollutant, the bank is not yet doing anything like this. The bank has encouraged India to resume investing in coal and nuclear energy. Social and environmental policies have been handed over to developing countries to implement – or not, as the case may be. The bank’s private sector affiliate, the International Finance Corporation (IFC), is backing oil palm plantations in Indonesia and cutting protective mangrove forests. Among the worst is financing for monoculture soya plantations in Amazonia, even though soya is suicide for Brazil’s rich agricultural lands.
The Bank Group is stimulating hundreds of millions of dollars’ worth of cattle ranching in Amazonia, an activity I campaigned against strongly. These ranching investments violate applicable standards for both deforestation and slavery. Bank Group policies mandate that the companies it finances are responsible for compliance, yet in this case, the IFC is abetting Brazil’s biggest beef exporting company’s noncompliance by bringing in donated funds to pay for some compliance in the future. Since such efforts historically have had no previous success, the bank’s independent evaluation group has stated that the IFC’s efforts pose “a grave risk to the environment and to the bank’s reputation”.
A quarter of the Amazon forest has already been destroyed, aided and encouraged by the bank. Amazonia suffered its most devastating drought yet in 2005. The 2007 drought and fire seasons look like being even more shattering. This loss of forest is intensifying climate change, and there are reports of impending reductions in rainfall and farm yields in the rest of Brazil. While Brazil is possibly crossing the threshold into free fall, plans are being drawn for massive dam, cattle ranching and highway projects.
Robert Zoellick, the new president of the bank and IFC, has not yet changed course for the better. On the contrary, at last weekend’s annual meetings of the world’s finance ministers, he urged the private sector arm of the Bank – IFC – to lead in setting priorities for the Bank Group. Ahead of the meetings, he pushed through an initiative to have net income from IFC transferred to fund the majority of Bank operations for the poorest tier of developing countries, meaning private interest in those operations will now supplant public interest.
Zoellick’s focus is on globalisation, helping multinationals extract oil, gas and other resources from developing countries. This hugely helps industrial nations, but does nothing for the world’s poorest, who should be the paramount focus of the bank. Fostering climate change through deforestation, cattle ranching and fossil fuels are all anti-poor priorities that the Bank must halt.
In recent years, many stakeholders have expressed doubt that it is possible for the World Bank and IFC to serve public interest as they should. I believe they can, but only if the world’s governments – the shareholders of the World Bank – demand accountability, transparency and consensual development. Citizens of every country should demand that their governments take responsibility for the Bank to end its procrastination on climate change, before it is too late.