Belo Horizonte, Brazil – As executives and finance ministers gather in Belo Horizonte next week for the Inter-American Development Bank’s (IDB) Annual Meeting of the Board of Governors, civil society groups from across the continent will be seeking to place human rights and environmental sustainability firmly at the top of the bank’s agenda.
Across Latin America, the IDB is under fire for financing “development” projects such the Cana Brava and Yacyretá Dams, and the Camisea gas project, devastated local communities’ livelihoods and environment, and privileged the interests of big business over the poor. If new IDB President Luis Alberto Moreno and the Governors are serious about fulfilling the bank’s mandate to alleviate poverty, they must listen to the demands of the assembled civil society organizations and affected communities.
Civil society organizations from Brazil, Argentina, Colombia, Paraguay, Peru, Mexico, the Netherlands and the U.S. will converge in Belo Horizonte from March 30 to April 5 to challenge the IDB to weed out environmentally and socially egregious projects. Groups will hold a variety of events of interest to the media, addressing concerns over individual projects as well as broader, structural issues at the IDB. Key concerns of civil society include the IDB’s current internal restructuring, the more than quintupling of the loan ceiling for the Bank’s troubled Private Sector Department, the Bank’s inability to improve its notorious accountability mechanism, its support for highly damaging projects like Camisea, and its promotion of the Integration of Regional Infrastructure in South America (IIRSA by its Spanish acronym) initiative. A summary of each of these topics is highlighted below. To contact an expert in one of these issue areas who will be attending the IDB meeting, please call one of the contacts listed above.
Participants will range from indigenous Amazonian leaders and other members of communities adversely affected by IDB projects to members of the Brazilian group Movement of Dam-Affected Peoples (MAB by its Portuguese acronym), which will arrive in Belo Horizonte on Saturday, April 1, after a six-day 200-kilometer march. On Friday, March 31, civil society groups will also meet with IDB Vice-President Ciro de Falco. Throughout the meeting, the groups will hold talks with the bank’s executive directors and officials from member-countries. A full calendar of NGO events will be released on Thursday, March 30.
IDB’s Restructuring:
The IDB’s new President, the Colombian diplomat Luis Alberto Moreno, is undertaking a major reorganization of the bank. It is believed that many of the proposed changes would weaken the bank’s environmental and social due diligence process, in an attempt to streamline the loan approval process. The bank is looking to offload its massive liquidity onto smaller Latin American nations as the traditional big three borrowers, Brazil, Argentina and Mexico, are borrowing less from multi-lateral banks. Never has the tension been greater between the IDB’s stated mission of poverty alleviation and its unstated function of facilitating politically-driven infrastructure projects and resource extraction. The IDB’s growing emphasis on private sector investment—recently granted a five-fold increase in maximum private sector loans from $75 million to $400 million—and mega-projects may please its clients and member governments, but it reveals an institution increasingly out of touch with its true constituents, as Latin Americans overwhelmingly reject the neo-liberal economic model at the ballot box.
Revamping of IDB’s Compliance Mechanism:
Unlike the World Bank’s Inspection Panel and the accountability mechanisms of other major development banks, which consist of genuinely independent members, the IDB’s mechanism currently offers little recourse to communities and individuals when their lives and lands have been negatively affected by IDB violations of its own policies. Proposals currently before the IDB’s Board to replace its existing, notoriously ineffective accountability system, the Internal Investigation Mechanism (IIM), have been weakened by the Bank’s Board and suffer from limited scope, lack of independence and an inability to bring complaints to a definitive conclusion.
Bank’s Role in Promoting IIRSA:
The IDB is playing a critical role in helping national governments move forward with the Integration of Regional Infrastructure in South America (IIRSA by its Spanish acronym) initiative, which envisions over $37 billion of dams, roads, industrial waterways, ports and other high-risk infrastructure mega-projects from the Isthmus of Panama to Tierra del Fuego. Many of IIRSA’s impacts will inevitably open new frontiers in the Amazon basin and indigenous territories to logging, soy farming and cattle ranching. This will speed up the deforestation and fragmentation that threatens to destroy the world’s most diverse biome within the next half century. Members of Articulación Frente a IIRSA, a region-wide civil society network concerned with transparency and accountability of International Financial Institutions in the face of IIRSA, will be in Belo Horizonte to challenge the IDB’s support for IIRSA.
Specific IDB projects of special concern include:
Camisea:
Financed by $135 million in direct and syndicated IDB loans, this gas project in the Peruvian Amazon has forced contact with some of the last native Amazonians living in isolation, led to epidemics among vulnerable indigenous communities, and despoiled one of the world’s most biodiverse regions with massive erosion and contamination. The project has reduced fish and game stocks on which thousands of indigneous people depend. The pipeline’s five spills in only the first 18 months of operation are not surprising; an independent technical report released earlier this month revealed that much of the pipeline was corroded before it was even laid and over 185 kilometers of the pipeline runs high potential for future ruptures. The IDB is currently considering an additional $400 million to the next phase of this project, opening millions of acres of rainforest to hydrocarbon extraction adjacent to the current Camisea concession even though it has failed to address multiple irregularities regarding the original Camisea planning process, construction and operation including: the consortia’s routine flouting of environmental and social loan conditions; a major conflict of interest by current Peruvian prime minister Pedro Pablo Kuczynski who worked for the IDB and the Camisea consortium when the IDB was considering the Camisea loan; and the allocation of 40 percent of Camisea central government royalties, supposedly intended for “development,” towards military spending. Peruvian delegates to the IDB meeting will include Grimaldo Caristo Aladino, a leader of one of the indigenous communities affected by Camisea.
Cana Brava:
Financed by $160 million in IDB loans, this 450 mega-watt hydroelectric power plant in the Brazilian Amazon is the first of a series of 27 large dams planned by the Brazilian government for the Araguaia-Tocantins river system. It has been estimated that new dams on this river system will directly affect more than 300,000 people and flood more than 12,000 square kilometers of rainforest. The Brazilian electricity sector has stated publicly that an assessment of the cumulative impacts of the entire dams network should be conducted, but, so far, the IDB’s Environmental and Social Impact Report for Cana Brava only examines the project as a single dam, thus ignoring the critical cumulative impacts the dam will have. Although the project received the IDB’s “Best Project Team” award for “outstanding work with civil society” in October 2001, affected communities filed a complaint in 2003 with the IDB’s Independent Inspection Mechanism (IIM), claiming that inadequate and delayed compensation and resettlement efforts have been offered to less than 300 of the more than 1,000 families. The IDB has refused to release the IIM’s full report, perhaps because it found that the Bank’s multiple violations of its own resettlement policies had resulted in significant harm to rural populations.
Yacyretá:
This vast hydroelectric development involves the construction of a network of dams on the Paraná River, along the Argentina-Paraguay border. Originally begun in 1983, Yacyretá has experienced countless delays, billions of dollars of cost overruns, corruption, disputes, severe environmental and social impacts, and will directly affect more than 80,000 people. Civil society groups argue that public consultation has been minimal to non-existent and that compensation and relocation packages for affected peoples have been inadequate. Problems continue today as thousands remain without compensation. In 1996, the local grassroots organization Sobrevivencia and other NGOs brought the case before the World Bank Inspection Panel and the IDB Independent Investigation Mechanism (IIM). Both inspection mechanisms confirmed that local participation, compensation and environmental mitigation programs were insufficient. Nonetheless, the project has continued apace.
