World Bank Creates Poverty

Xavier Dias

Parej June 1st: With the aim of supporting India’s reform and expansion of the coal sector,
the World Bank (the Bank or WB henceforth), in 1997, provided finance for expansion at
25 mines of CIL. This was done under the Coal Sector Rehabilitation Project (CSRP),
approved in September 1997, with an International Bank of Reconstruction and
Development (IBRD) loan of over US $ 530million. Parallel with this, another loan was
given for the Coal Sector Environmental Social Mitigation Project (CSESMP). This was
to assist CIL’s efforts to mitigate the environmental and social impacts of this mining
expansion in the 25 mines. It was approved in May 1996, with a loan of US$ 63 million
from the International Development Association (IDA)i. It was envisaged that after being
tested and revised as necessary during the five-year time period financed by the Bank,
CIL would apply its new environmental and social mitigation policies in its 495 minesii.

Chotanagpur Adivasi Seva Samiti CASS an NGO working among the PAP’s of Parej
Coal India Project (Hazaribagh Jharkhand India) is one of the only if not few Indigenous
Organisations in the World to take on the WB when it announced a ombudsman type
agency called the Inspection Panel to look into complaints of Indigenous People’s
affected by its funding. Playing by the rules set by the World Bank, CASS patiently went
through the cumbersome process of getting the Inspection to come to Parej do an
inspection and present their Report to the World Bank. The Bank with great reluctance
made their own interpretation of this report and gave its recommendations. The
recommendations were much criticized world over. Coal India was supposed to
implement these recommendations. Among one of the recommendations was that the
Bank would have to monitor the project and make a six monthly report.

In November 03 when the Bank Monitoring team came and visited the PAP’s of Parej
they concluded that all 70+ families they managed to interview complained that their
suffered a decrease in incomes after being displaced

This November Report has not been made public but however in a letter dated May 12 th
04 to CASS, the World Bank Country Director (India) calls for a meeting between Coal
India Ltd., the World Bank representatives and CASS to discuss the recommendations of
the November report which mentions this fact i.e. that PAP’s of Parej have suffered a
‘decrease in income’. The World Bank would like to rectify this for which it is installing
an External Monitoring Panel.

Probably for the first time in its history, the World Bank has admitted that the Project
Affected People PAP’s of its 500 million dollar supported project of Coal India Ltd. has
done precisely this.
Western Agencies firmly believe that they are the Missionaries of Development that
elevates the poor. Their Societies pride themselves on good morals, This is a big
embarrassment for the Bank. NGO’s working all over the world with PAP’s from
Narmada Bachao Andolan to African, Latin American and South Asian Countries had for
years crying hoarse that the World Bank creates Poverty. What is common knowledge to
the Rickshapullers and coolies of Ranchi or Hazaribagh or Bagio city, need a number of
mechanisms and processes to be realised by the Bank. They need Inspection Panels, then
External Monitoring Panels, then again Investigative panels, then dozens of meetings in
Guest Houses of the Mining Companies and country Capitals, fly down their experts
from Washington for these meetings, just to educate themselves on facts that the coolie
proletariat in our cities cry about each day. These facts are written on the faces and ribs
of PAP’s.
After this drama is over, the 174 PAP’s families of Parej will get some incentives to
increase their incomes. This is being done not as a measure of Justice, but as a face-saver
for the Bank. The other lakhs of PAP’s of the dozen’s of Coal India Projects and the Big
Dam Projects, and the projects yet to come, will have to remain content by the fact that
all the International Financial Institutions and Corporations that have taken their lands
and displaced them are having a sound sleep, morally sure that they are the new
Missionaries of Development and Poverty reduction. Unless of course, if history changes
course and the PAP’s find ways of waking them from their slumber.

Adhikar
June 04
i
At the early planning stage, the CSESMP was initially conceived as a component of the CSRP, but in November 1995, the
project was split into an environmental and social component, the CSESMP, and an investment component, the CSRP.
Progress on mitigation activities was linked to the CSRP through a series of covenants in Schedule 9 of the CSRP loan
agreement. This meant that disbursements under the CSRP for any particular mine would be contingent on timely and
effective implementation of the mine specific RAPs, EAPs, and IPDPs.

ii
Due to unsatisfactory performance under the CSRP regarding coal sector reform and financial covenants, as well as
unsatisfactory performance in the area of economic rehabilitation under the CSESMP, Management informed the Ministry
of Coal and CIL on January 20 2000, that it was moving towards suspension. On July 25 2000 Management cancelled the
undisbursed balance of the CSRP Loan. . Coal India Ltd. however, decided to continue with mitigation programs started
under the CSESMP. On April 20, 2001, it extended the CSESMP closing date for one year June 30, 2002. At the time the
extension was granted, about US$24 million was undisbursed. The CSESMP project eventually closed in June 30 2002,
with approximately 79% fund utilization.