4 December 2003
The Bank's Response, It Just Gets Worse, and Progress or PR?
by Kay Treakle, Bank Information Center, September 1998
The Bank’s Response to the Report: "What Findings?"
Arzamendia returned to Encarnacion with the hope that his visit to Washington would result in positive action in Paraguay. Instead, on March 20 an advertisement paid for by EBY appeared in the Paraguayan newspaper Ultima Hora, which printed a February 27 letter signed by Isabel Guerrero, World Bank Acting Vice President for Latin America and the Caribbean. Her letter was addressed to Arzamendia, on behalf of President Wolfensohn, and said that,
"the Bank is satisfied with the conclusions of the report which affirm that its policies on resettlements, environment, community participation, and others were fully respected and applied in the case of Yacyreta." It also said, "We have complete confidence in the institutions and people that work with us to implement the Action Plan agreed to."
The letter, which appeared in several newspapers before being received by Arzamendia or Sobrevivencia (through whom the letter was sent), lied about the findings of the Inspection Panel Report with regard to violations of Bank policy. And it failed to mention that the Panel found the Action Plan to be inadequate to deal with the problems that remained at the 76 meter level. Both the Guerrero letter and EBY's advertisement gave the impression to the Paraguayan public that this was the Bank’s official response to the claim to the Inspection Panel; and that the Bank believed that everything was fine with the project and with EBY.
On April 8, 1998, Sobrevivencia wrote a letter to Mr. Wolfensohn in response to the Guerrero letter, and included quotes from the Inspection Panel report findings in order to set the record straight. The letter to president Wolfensohn said:
"It is incomprehensible to us.... that your name would be attached to affirmations so far from reality — deliberate affirmations by the Entidad Binacional Yacyreta to discredit sincere and honest claims regarding the deprivation of authority to community leaders and municipal authorities who request only the right to just compensation for their communities. Because of the desperation caused by the Yacyreta Dam, thousands of families have resorted to such extreme measures as public hunger strikes and demonstrations that have been violently repressed by EBY."
Sobrevivencia further asserted that Guerrero's letter undermined local democracy in Paraguay; and that Bank policies had continued to be violated, including policies related to participation (in the Action Plan); and access to information (lack of access to the final Panel report). They demanded that a new Action Plan be developed with the peoples' genuine participation and that a retraction in Paraguayan newspapers was needed to counteract the misinformation from the Guerrero letter.
Sobrevivencia received widespread international support in a letter to President Wolfensohn written by the International Rivers Network (IRN) and endorsed by 90 organizations worldwide. According to internal sources, both of these letters never reached President Wolfensohn’s desk, and were answered by his regional staff; the same staff who had drafted the Guerrero letter.
Outraged by the lack of response from the Bank, and especially by the fact that the Guerrero letter effectively gave EBY a license to continue to lie about the Inspection Panel findings, NGOs felt that the press was the only way to get Mr. Wolfensohn’s attention. On May 4, an article in the Financial Times, "Row brews over bank role in dam project", was the lead story featured in the Bank’s internal daily press file. The article contrasted the Guerrero letter with the Inspection Panel’s report, and referred to the Bank’s "apparent attempt to play down a critical report from its international inspection panel." Mr. Wolfensohn was apparently angered by the actions of his staff, and for being kept in the dark about the situation at Yacyreta.
Four days later, Sobrevivencia received the first of several letters from Shahid Javed Burki, Vice President for the LAC region (whom Ms. Guerrero had been acting on behalf of). Mr. Burki said, "Ms. Guerrero's letter... conveyed an incomplete description of the Bank Inspection Panel's Report" (emphasis added). NGOs were outraged that the Bank couldn’t seem to tell the truth. NGO phone calls to Bank external relations staff and Executive Directors resulted in a second letter from Burki, sent on May 12, making a correction. This time, the line read, "Ms. Guerrero's letter... conveyed an erroneous description of the findings of the Bank Inspection Panel's Report" (emphasis added). Mr. Burki also said that the Bank takes the Inspection Panel findings seriously, and in particular that, "the Panel was critical of the Bank’s role, and especially of management’s decision not to stop disbursements of its loans in the face of non-compliance with agreed Resettlement and Environmental Mitigation Plans." Mr. Burki also noted that the Panel had recommended that the Bank "redouble its efforts to strengthen participation, supervision and institutional capacity under two action plans." He promised to make the Panel report available in Spanish, as well as the EBY Action Plans, and said, "In the meantime, we are confident that meetings with the affected populations and organizations representing them, will continue to take place — as they have taken place over the last year in accordance with the EBY Action Plans."
Burki’s comment implies that such meetings with local people are a common and amicable occurrence, but once again, Bank management’s interpretation of EBY’s behavior is far from reality. Earlier in the year, hundreds of local citizens blocked the road to Encarnacion to protest the squalid conditions in the affected zone, recently exacerbated by abnormal flooding, and to demand a meeting with Joachim Rodriquez, the Paraguayan head of EBY. Riot police paid for by EBY, attacked protestors with lead pipes sending about 20 people to the hospital. A national newspaper, ABC Color, reported, "The fact that EBY has financed the transport from Asuncion, as well as the food for the members of the [police]....with the mission to repress those participating in the demonstration against EBY, is a clear symptom of the double standards with which EBY operates. While it states that it is open to dialogue, it masterfully applies dilatory tactics in answering and solving the claims." Six of the protestors camped outside EBY offices and held a hunger strike for four days before Rodriguez would agree to meet with them.
In mid May, World Bank managers directly responsible for overseeing the project met with affected people in Encarnacion. Bank Task Manager William Partridge is quoted in Paraguayan newspapers as having said at that meeting, "Your petitions and requests contain factual errors and a series of false information but apart from this, it is not our role to discuss or agree with solutions in the cities of the different countries." He also said that delays in EBY programs were because of the "lack of participation and support on the part of the population", and that EBY and both governments, "are acting in good faith and are trying to identify satisfactory solutions" in accordance with the World Bank. Newspapers reported that leaders of affected communities, offended by the meeting, announced that they would bring claims to the "ordinary justice" and international organizations "due to the indifference manifested by EBY and the World Bank to their complaints."
Two weeks after Mr. Burki’s letter to Sobrevivencia, there was still no translated Inspection Panel Report, no publicly available Action Plan, and no retraction to the Guerrero letter in Paraguayan newspapers. Thus despite bureaucratic pronouncements in Washington, nothing in the field was being done to counteract the original letter. Sobrevivencia’s Elias Diaz Peña decided to visit the Bank to try and understand whether anyone there had any intentions of making the truth known in Paraguay. On May 26, he met with Mr. Burki and Ms. Guerrero, who neither apologized for the letter nor acknowledged that it may have conveyed a mistaken impression about the Panel’s findings. Mr. Burki did promise that he would immediately print a retraction; make sure the Panel report was translated by the end of the week, and again promised to make the action plans available. He also agreed with Mr. Diaz Peña’s suggestion that Sobrevivencia should help to organize meetings with the affected people in Paraguay during the next mission of the Bank, the week of June 16, which Mr. Burki would head.
The next day, President Wolfensohn agreed to meet with Mr. Diaz Peña. Also present at the meeting were David Hunter (CIEL), Alvaro Umana (chair, Inspection Panel), and Mr. Burki. Mr. Wolfensohn was extremely forthcoming with his concerns about Yacyreta and the fiasco that his staff had been perpetrating. He apologized for the way the Bank had handled the Inspection Panel report and said that he was personally committed to fixing the problems at Yacyreta. He also promised a translation of the report and said that the Action Plans should be participatory. He indicated that he supports the Panel and its findings "100%", and told Mr. Diaz Peña to contact him directly if things did not go well.
It Just Gets Worse
Not surprisingly, things did not go well. Apparently, Mr. Diaz Peña’s visit to Washington was noticed by EBY. On June 3, newspapers, radio and television reports in Paraguay, using the head of EBY as a source, claimed that Sobrevivencia was "boycotting" an emergency World Bank loan to Paraguay for repairing damages from El Niño. Rodriguez called Sobrevivencia unpatriotic, politically motivated, and said they were causing harm to their own people. He also claimed that the upcoming visit of the World Bank Vice President was "due to the fact that positive information was provided by executives of the Bank, who deal with this part of Latin America, and who visited the work zone 20 days ago."
The emergency loan was apparently being negotiated to provide Paraguay with resources to manage extensive flood damage resulting from heavy rain linked to the El Niño phenomenon. Mr. Burki apparently had tried to use that negotiation as a way to force the Paraguayan government into compliance with their obligations at Yacyreta. The effect was that Sobrevivencia, accused of causing the delay in a humanitarian loan that they were not even aware of, had to respond in the national press without any immediate clarification from Mr. Burki.
The Bank’s continued misinformation escalated tensions in Paraguay. Worried about further political retaliation and possible human rights abuses in the field, Sobrevivencia, Center for International Environmental Law (CIEL) and Bank Information Center (BIC) sent another letter to Burki on June 4, asserting that the allegations by EBY appeared to have had the World Bank's support, since there had been no retraction printed in the newspaper as yet. The letter expressed the NGOs' concern that such allegations seem to follow a "pattern of members of the Bank or EBY publicly stating that progress under the project is satisfactory to the Bank, and that the problems are being caused by the affected people or their representatives." The letter also demanded that the Bank immediately publish retractions "in all major Paraguayan newspapers that (a) acknowledges that the letter written by Ms. Guerrero was erroneous and should not have been published; (b) acknowledges that the World Bank Inspection Panel has found serious problems with the project and the Bank respects the findings of the Panel and is committed to solving the numerous social and environmental problems; and (c) states that Sobrevivencia had nothing to do with the cancellation of funds to Paraguay, and that Mr. Rodriquez' published statements to the contrary are incorrect." A copy of the letter were sent to President Wolfensohn.
While the Bank’s external relations department tried to assuage the NGOs that delays were bureaucratic and not intentional, on June 6 the Bank finally took out paid advertisements in several Paraguayan newspapers that included a press statement and the Spanish version of Mr. Burki's May 12 letter to Sobrevivencia. The press statement only partially vindicated Sobrevivencia from having anything to do with the El Niño loan — notably by saying that the loan indeed is going forward and that, "This disputes the information that was published a few days ago in various newspapers, in which the non-governmental organization Sobrevivencia is accused of boycotting this operation. The World Bank is in communication with this organization, in reference to another project, Yacyreta." The press statement explained why Mr. Burki’s letter was being reprinted: "to clear up the position of the Bank in respect to certain past difficulties related to the project, and to express the commitment of this institution to implement the environmental and resettlement programs of this project. "
Progress or PR?
In response to President Wolfensohn’s instructions to fix the problems at Yacyreta, Mr. Burki led a high-level mission to Paraguay and Argentina between June 18 -19. With him were Maritta Koch-Weser, director of the Regional Environment Sector Management Unit, Country Directors Myrna Alexander and Isabel Guerrero, and Bill Partridge, the Bank’s Yacyreta Task Manager. The mission was in the field three days, and went to Asuncion, Encarnacion and Posadas (Argentina). Prior to the mission EBY had lowered the level of the dam, placing many flooded houses well above the water level; local people observed that the water level had been obviously lowered rapidly, and was now lower than at any time since the reservoir was created in 1994. In addition to being a cynical effort to mask the human suffering, lowering the reservoir raised the question of whether the level has been at 76 meters since 1994, which EBY claims, or whether it was in fact higher, which is what the citizens had suspected. Responding to a direct question made in the presence of the World Bank mission, an EBY official said that the level of the reservoir corresponded precisely to 76 masl, and that it has been at that level since the reservoir was filled in 1994. Soon after the Bank mission left, the reservoir was raised back to it’s regular level.
In preparation for the Bank’s visit, EBY had also asked a local mayor to stage an event for the Bank mission whereby the EBY authorities would give out land titles to a newly resettled group. The mayor refused. EBY made other efforts to manipulate the mission, including trying to set up the schedule so that, as in all other Bank missions since 1992, the Bank staff would see only what EBY wanted them to see. These efforts were thwarted, however, by Sobrevivencia’s new relationship with President Wolfensohn, to whom they wrote asking that the Bank fulfill their promises to meet with affected people in communities identified by Sobrevivencia.
For the first time, Sobrevivencia and local leaders were given the opportunity to explain to Bank management the reality of their situation. The mission were taken to several neighborhoods where Mr. Burki talked to the affected people. A public meeting in Encarnacion attracted over 1,000 people, many of whom testified about the way their lives have been altered by Yacyreta. At the end of the meeting, Mr. Burki summed up by saying, "I come from one of the poorest countries on earth (Pakistan), and I have never seen such misery as I have seen here today."
Vice President Burki’s report back to the Board of Directors described shock at the misery, poverty, hunger, and complete lack of social services in the dam's area of influence in Paraguay. The mission observed that the situation was probably worse than when the Panel went to the field in 1997, and acknowledged that the reservoir was not being maintained at 76 masl. Indeed, they admitted that thousands of people have been displaced by the reservoir above 76 masl:
"Some of the most serious social problems stem from the fact that hundreds, if not thousands of people have been displaced by the seasonal rise of the reservoir waters beyond level 76m, while they may not be considered as eligible project beneficiaries, having not been covered in the census taken in 1990."
This statement confirmed, at least for the Board, that management’s response to the claim regarding the existence of impacts above 76 masl was erroneous. The response had asserted that,
"the impacts of increasing the operating level of the reservoir above 76 masl have not yet occurred and are covered by sufficient legal covenants in full compliance with Bank policies."
More importantly, staff acknowledged that families not covered by the resettlement census were nevertheless living in extreme poverty and therefore needed to be included in some type of development plan. They remarked, "To sum up our impression from the Paraguay field visit: we were shocked to see the situation on the ground. More people than the original census of 1990 would suggest, have been touched by the project, and many live in utmost poverty right next to one of the World’s grand engineering achievements. So far, because of a legalistic rather than a social welfare approach, their plight is addressed neither by EBY nor by the local Paraguayan Government in a satisfactory way."