D+C Development and Cooperation (No. 4, July/August 2001, p. 17 - 19)

To date, 40 - 80 million people have been resettled involuntarily due to large dam construction alone. D+C No.2/2001 covered various aspects of dam projects and described specific problems of displacement. This article goes into more detail on the latter issue and asks questions about the appropriateness of the World Bank's proposals for revision of its strategy on involuntary resettlement. It also takes into account both the views of the people affected and the interests of the "host" communities which receive displaced persons.

Many development organisations now recognise involuntary resettlement as a serious intervention in the living conditions of the people affected. For this reason, the World Bank, the OECD/DAC and other multilateral and bilateral donors have presented criteria, guidelines and best practices for resettlement, including advice on compensating displaced persons. However, despite some additions, the World Bank's latest draft of criteria on involuntary resettlement does not go far enough in considering the interests of the people involved. In particular, the displacement criteria for involuntary resettlement should be tightened and specified and, if alternatives are not feasible, relocation should be aimed at improving the economic situation of the people affected.

The dimension of involuntary resettlement and thus the problem facing the criteria for implementing it is huge. Till 1995, the building of about 45,000 large dams (with a height of more than 15m from their foundations) worldwide had resulted in the flooding of about 400,000 km² of land and - depending on the source of information - had displaced or led to the involuntary resettlement of 40 - 80 million people. To that must be added tens of thousands of projects, such as the development of mining areas, building of roads and waterways, redevelopment of urban districts, laying out of irrigation boundaries, land consolidation and so on, which also displaced or subjected people to resettlement against their will.

In reaction to the dismaying and sometimes inhumane resettlement practice in both economic and social terms, going back to the 1960s and 1970s, the World Bank in 1980 presented its first catalogue of criteria which laid down minimum standards for involuntary resettlement. This was replaced in 1990 by a binding directive. The OECD's Development Assistance Committee (DAC) followed up with its own guidelines in 1992. Ongoing criticism, especially from the international NGO scene, led from 1998 to the World Bank revising its directive. The new draft is now before the Bank's countries for comment.

Compensation for "all losses"
is planned

Both the World Bank directive of 1990 and its new draft recognise that involuntary resettlement "may cause severe long-term hardship, impoverishment, and environmental damage unless appropriate measures are carefully planned and carried out". The aim should be to improve the displaced persons' standard of living compared to their situation prior to resettlement, and at least compensate them in full for all losses directly attributable to the project. Compensation for buildings, land or infrastructure is to be paid at the full cost (in real terms) of replacing them. This point is very important because in many projects displaced persons are paid for their destroyed houses solely on the basis of assessment of the current value of their traditional homes. The price they receive is hardly enough for them to buy building material for new homes in their resettlement areas, and at times they cannot even afford to buy land to build on.

The aim is to provide full compensation in such a way that the livelihoods and standards of living of displaced persons is maintained or restored. That means, for example, that land can be replaced only by other land, not by money, although that depends on the availability of land for compensation. Social ties are to be taken into account in resettlement. This provision, which unfortunately is not binding in every case, is aimed at preventing communities and extended families being spread over various villages, thus breaking up social structures and ties, which has happened all too often in the past.

Transitional support for
displaced persons

The World Bank draft also contains a new call for transitional assistance for displaced persons. Over and above cash compensation payments, they should be helped by short-term jobs and direct subsistence support. Too frequently in the past, displaced persons have received land and built new homes but had to emigrate because they had no resources on which to survive until they gathered and sold their first harvest.

The draft says relocation should be covered by a comprehensive resettlement and development plan to be drawn up at the responsibility of the country involved. Only if fewer than 200 persons are to be resettled can an 'abbreviated' plan be prepared. This limit appears extremely arbitrary, particularly since in many projects the originally estimated number of people to be resettled rises considerably during implementation.

The resettlement plan is to be based on a detailed baseline survey or census which must list all people affected as well as the assets eligible for compensation. Both these points have to date proved to be critical in determining compensation. "Who exactly are the people affected?" and "What assets are to be compensated for?" are crucial questions. The former are those who have formal legal rights to land or property, including customary and traditional rights recognised under the laws of the country, and others who do not have formal legal rights to land at the time the census begins but can prove to be living in the area which is to be evacuated.

Assets for which compensation is to be paid are land, buildings and structures. What this means in detail is explained by footnotes and appendices to the World Bank draft, which are dominated by terms and concepts out of the economics sectors of the industrialised nations. Sources of income which are of minor importance in advanced economies, such as 'forest utilisation' (building and processing timber, firewood, fruit, bark, mushrooms, herbs, etc.), use of commons, or fishing are hardly taken into account. The question arises of why the unjustifiable increases in the cost of services for the affected people after their resettlement (such as higher costs for transporting agricultural products to market), or of the facilities for which they must pay for the very first time (such as for water from a standpipe instead of a well, or transport to their shop or work) should not be considered in assessing compensation.

Other important World Bank criteria cover the resettlement of "vulnerable groups" such as indigenous peoples and ethnic and social minorities, whose needs must be given particular attention. In general, the aim should be to ensure that the measures package is compatible with the cultural preferences of the people affected.

Compared with the old World Bank directive, the new criteria catalogue proposes marked improvements with respect to the steering and monitoring of resettlement measures. While earlier the Bank merely called for its right to monitor, its new policies make thorough checking of implementation of involuntary resettlement obligatory. The monitoring findings must be taken into account in subsequent implementation. This rule is aimed at preventing generous planning being dropped by the organisations involved and displaced persons landing up in the wilderness instead of in well-equipped new villages, which has happened often in the past.

The new strategy
leaves much unclear

At first sight, the World Bank's new draft aims at considerable improvements for displaced persons. But the problems become clear when a closer look is taken at the respective context of resettlement. True, the living conditions of displaced persons are to be improved, but if that is not feasible - and clearly that is allegedly the case only too often - they are merely to be given full compensation for their losses. Veteran observers of international resettlement policy, such as American anthropologist Thayer Scudder, comment rightly that pure cash compensation for displaced persons has often, and particularly in the medium term, disastrous consequences for them.

While the projects which trigger resettlement are almost always aimed at improving the general living conditions of a country, the people who suffer from their negative impacts are not allowed to benefit from their advantages. Instead, they are to remain at the economic level they were often years before project implementation. For example, it makes no sense either in human or developmental terms to enable town dwellers to benefit from electricity generated by a dam, develop tax revenue sources for the government, create jobs elsewhere and facilitate artificial irrigation, while leaving the people who have suffered from the dam's construction merely in the condition they were in before the development measure started.

If in such a case the principle of "land for land" is abandoned for financial reasons, the impoverishment and marginalisation of the displaced persons is programmed. In this case, the call to pay particular attention to the needs of indigenous peoples is meaningless, and the (attempted) conversion of farming-based economies to trade, crafts and services and so on truly risks committing cultural genocide. On the land issue in particular, the World Bank must take more seriously its own market economy principles which otherwise it promotes so energetically. If land at "sensible prices", most probably meaning "as cheap as possible", cannot be found it must simply be acquired at going market rates. That would be compensation in real terms.

It is a matter of course in resettlement cases that the people who already live in the designated relocation areas are acknowledged and offered opportunities to participate in the implementation of resettlement. Therefore the World Bank's draft also provides for improving the situation of "host" communities. They are to be consulted, although it is not envisaged that they have a say in planning their resettlement. The draft also makes no explicit mention of mediation, which, for example, could be about the creation of common socio-political structures. The cultural differences (social, religious, gender-related, etc.) between displaced persons and their "host" communities have not so far been seen as a problem. A great deal of abuse has been committed in this respect, such as by the deliberate "nationalising" of areas with ethnic minorities (for example, the Adivasi in India, the Veddas in Sri Lanka and the Dyaks in Indonesia).

Do not differentiate
between entitled persons

At first sight, the World Bank paper's definition of persons entitled to compensation appears to be really generous, including as it does people who have no formal title or claim to land. But it notes explicitly that persons who use land illegally under national law shall be compensated solely for any immediate losses of harvests or structures, not for loss of future use.

This formulation is problematical in three respects. First, it makes no sense as part of resettlement to ruin people who have built up a livelihood, whether legally or illegally. Second, in many countries, contradictions between "modern law" and "traditional law" have not been clarified. This means that the legality of claims can diverge considerably, according to points of view, and cannot be subjected to prevailing interpretations. Third, objections to the World Bank draft, such as that of the Chinese government which on principle rejects compensation for illegal land use, shows that excluding single groups from full compensation will give a free rein to national arbitrariness.

The draft's planned delegation principle, too, will probably turn out to be problematical in practice. In programmes with various subprojects, the principle allows subproject resettlement plans to be approved by a project implementing agency without prior World Bank review "if that agency has demonstrated adequate institutional capacity to review resettlement plans and ensure their consistency with this policy". The Mahaweli programme in Sri Lanka, however, has shown that interpretation of criteria agreed between lenders and national agencies can differ greatly. Due to the arbitrary fixing of compensation payment deadlines, combined with galloping inflation, the displaced persons there have lost most of the original value of their reimbursements. Therefore whether the World Bank's planned monitoring can be timely and detailed enough to make up for its non-participation in planning subproject resettlement is questionable.

Exemption criteria
must be put in place

The strategy paper does not make clear under what conditions resettlement may not be implemented. The call for the compatibility of resettlement measures with cultural customs is cast into considerable doubt by the qualification that, if it is not feasible, no land must be provided and social ties do not have to be preserved. Against this background, the obligation to examine and consider alternatives is at best an instrument with little conviction. A resettlement concept for the next decade or decades which contains no concrete exemption criteria will in any case fail to meet its claims to effectiveness and social comatibility.

Even a minimalist criteria catalogue should cover cases when an economic system or the religious fioundations of a society are definitely (not only partially) destroyed and cannot be restored. The latter would be the case if the only or most important religious centre, the site of manifestation of divinity or the fountainhead of a religion were lost. In view of the danger to indigenous societies of even relatively minor interventions, giving them a right of veto against resettlement should be considered.

The unfeasibility of being able to apply the land-for-land principle, which certainly applies to heavily-populated areas where land purchases make no business sense even if there are willing sellers, could be another criterion against resettlement. To what extent the rejection of newcomers by a long-established community in a planned resettlement area can be accepted as a reason to reject relocation should be examined on a case-to-case basis. Often the reason for the negative attitude among the resident community is the fact that they may have heard about other cases where newcomers have been given preferential treatment. If both groups were given equal treatment this might perhaps not happen. On the other hand, no-one should be forced to share their land and village with people whom they fear could endanger their own culture. Also here, a broad participation of all involved, which the World Bank paper unfortunately does not plan, would favour an acceptable solution.

A final point, of which the strategy paper does not take sufficient account, is the selection of resettlement areas. In the past and for various reasons, resettlement near lost areas was often not considered. In the case of dams, it was argued that communities settled near the water would clear the existing vegetation and thus cause increased erosion and siltation of the reservoirs. This argument only if it is imputed that resettlement takes place without a concept and there is no development plan as required by the World Bank. In case of doubt, the resident community must be given additional resources to implement anti-erosion measures. That is also part of the costs of socially and ecologically sound resettlement, which, given optimal planning and implementation, should nevertheless almost everywhere remain marginal compared to overall project costs.