What are the impoverishment risks involved in involuntary resettlement? How best can governments and the international community deal with the consequences? This study from the University of Arizona and the Universidad de Concepcion in Chile looks at the World Bank’s policy on forced resettlement and makes suggestions as to how these could be changed.

In 1990, the World Bank set out a landmark involuntary resettlement policy. Since 1998, the Bank has asked NGOs, government agencies and other interested parties to provide feedback on a series of draft revisions. Despite objections that the final revision weakened the existing Operational Directive, the new policy, OP/BP 4.12, was adopted by the Bank Board in October 2001.

The Bank has played a leading role in recognising the intrinsic risks in forced displacements. Its in-house Impoverishment Risks and Reconstruction model has been tested extensively and elaborated upon. OP/BP 4.12 acknowledges impoverishment risks in its first paragraph but fails to propose measures to address them. Instead, it falls back on the same flawed economic analysis and methodologies that have been responsible for decades of unacceptable performance.

By narrowly focusing the Bank’s client’s responsibility – on compensation for loss of land – the revision neatly sidesteps the need for the rehabilitation of the victims of displacement. OP/BP 4.12 confuses restoration with development. It arbitrarily limits the cost of resettlement to ‘direct economic and social impacts’ resulting from the project’s (1) acquisition of land, (2) relocation of shelter and (3) loss of assets and income sources. The revised policy permits the borrower to define their liability by drawing an arbitrary ‘direct/indirect’ distinction. This leads to an understatement of total project costs.

The study finds that policy OP/BP 4.12:

• ignores Bank and academic research, which shows costs such as reintegration, repositioning of communities, loss of food security and ill health are real and calculable
• requires neither an assessment of impoverishment risks nor a socio-economic analysis of potential impacts
• merely directs Bank staff to review the risk that the borrower’s resettlement plans will not be adequately implemented
• excludes the critical costs of reintegrating and restarting disrupted economies, social institutions and educational systems
• prioritises compensation over mechanisms to jump-start damaged socio-economic systems
• institutionalises a negotiating system that potentially violates human rights. Lack of information and legal representation has consistently undermined the capacity of people to understand and negotiate their economic reconstruction.

In preparation for the Bank’s promised future review of its revised policy, the study suggests that it avoids actions that might cause harm. The Bank should:

• finance risk assessments
• opportunely inform people of the risks and possible mitigations
• provide independent and competent legal representation
• arrange for independent and transparent monitoring of all development-induced displacement projects
• protect those at risk by introducing ‘induced-displacement insurance’ as a safety net in case the policies don’t work.

Source(s):
‘Creating poverty: Flaws in the economic logic of The World Bank’s revised involuntary resettlement policy’, Forced Migration Review, Vol 12, Feb 2002 by Theodore E. Downing, 2001 Full document.

id21 Research Highlight: 14 November 2002

Further Information:
Theodore Downing
Research Professor of Social Development
University of Arizona
1237 N Mountain
Tucson, Arizona 85721-0471
USA

Tel: 1 520 621 2025
Fax: 1 520 326 3338
Contact the contributor: tedowning@earthlink.net

University of Arizona, USA

Ted Downing's personal website

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'Resettling refugees: improving the record of failure'

'Safer haven: Brazil’s emerging refugee programme'

'Rights for the world's evicted. Are development projects harming people they're meant to help?'

'Lessons from conflict: a participatory review of a Ugandan refugee project'

'Replacement migration: is it a solution to declining and ageing populations?' from the UN

'Displaced Communities and the Reconstruction of Livelihoods in Eritrea' from WIDER

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