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The World Bank’s Development Model and Indigenous Peoples
On the 30th July the Executive Committee on Development Effectiveness (CODE), part of the World Bank’s board of directors, released a draft policy statement on its new social and environmental safeguards. As for now, the draft document is for consultation purposes only and has not been endorsed by the board of executive directors, at least not yet. The rhetoric of the report is broadly human rights friendly-it is inclusive, non-discriminatory and, at least on the face of it, progressive. Even the title is written in pleasant, non-threatening green type: Setting Standards for Sustainable Development. Who could disagree with sustainable development?
Sustainable development is one of those PR jargon phrases that nobody really can accurately define. Read some “development” reports and you’ll find it is used ubiquitously, monotonously even. But it is something of an oxymoron. The Oxford English dictionary defines development as a specified state of growth or advancement. The definition of sustained is to keep in existence, to maintain. Put them to together and you get “growth maintained”. No one at least to my knowledge has ever fully explained how development/growth, “growth” that is as an ideological euphemism for neo-liberal development, can truly be “sustained”.
The report is full of equally comforting and illusory phrases devoid of little real content-“ending extreme poverty”, “accountability and governance”, “promoting shared prosperity”, and, “committed to promoting and encouraging…” To be fair, the World Bank as an institution has in recent years been setting some reasonably progressive environmental and social standards, that is, at least that is in comparison with its structural adjustment programs in the 1980s. The structural programs imposed on developing countries came with the proviso that they must pursue rapid economic liberalization. Loans therefore became conditional on cuts to social programs in health, social care and education. As a result, whole economies were gutted in Africa, South America, and South East Asia. The effects of drastic cuts in social programs, similar to the austerity measures pursued today in developed economies, are still are felt to this day by the poorest people of those regions. The marginalized and most vulnerable, as always, were the most affected-women, pastoralists, rural people, and of course, indigenous peoples.
So, when reading a report, especially from a bank, it is always important to read the fine print. But, as always, with World Bank documents the devil is not only in the detail of such reports, but in the interpretation of that detail.
“The Bank is committed to supporting sustainable financial sector development and enhancing the role of domestic capital and financial markets.” [i]
The World Bank bestows in grants and loans for development projects over $50 billion a year to countries in the Global South. Primarily, the projects consist of dams, mining, power plants, and large infrastructural projects. Largely because of bad publicity over the environmental and social consequences of some its landmark projects, the controversial Narmada dam in Gujarat for instance, the bank tightened its lending criteria on loans and strengthened social and environmental guarantees in the late 1990s. Over twenty years later however, it seems the bank is returning with some haste to the bad old days of privatization and deregulation. Light touch regulation, and even more worryingly, privatization of its social and environmental protection policies, a new departure, is actively being considered. What this could mean in reality is deeply alarming. Bank on Human Rights, an umbrella group of NGOs that campaigns on development finance, which include Amnesty International and the Centre for International Environmental Law, have reacted critically: “The fact that the proposed framework itself moves from one based on compliance with set processes and standards, to one of vague and open-ended guidance, threatens to render… technical improvements meaningless.” [ii]
Not only is the World Bank proposing that it may lower its overall protection standards for indigenous peoples but also, in some cases, may now even delegate responsibility for the oversee of development projects- environmental and social assessments, management and monitoring, as well as overall portfolio management- to financial intermediaries, or FIs. [iii]
Investment Project Financing: “A World without Poverty” [iv]
The report goes onto to say that FIs are, “required to adopt and implement effective environmental and social procedures to ensure that they lend in a responsible manner.” Who, or even what those FIs are, is not stipulated in the report. Could it mean venture capital funds? Or even hedge funds? Or perhaps dodgy domestic banks? Unfortunately the bank has form in this area, Banco Ficohsa in Honduras being one of just many offenders. What this seems to mean, at face value, is that the bank is now in the business of sub-contracting out social and environmental responsibility for large-scale development projects affecting indigenous peoples, and others, to private financial entities.
This proposed “opt-out clause” if implemented would almost certainly serve to undermine the human rights of indigenous peoples. Moreover, it would also undermine progressive human rights law regarding indigenous peoples, see here, here, and here. The much lauded “do no harm principles” it seems are being ignored, instead, possibly in light of potential geo-political competition the bank faces these days,. So called free-market capitalism is back with a vengeance. The protective protocols are lowering, instead, “Reform” and “growth”, the two great euphemistic shibboleths of neo-liberalism are back, but perhaps they never really went away. Given the banks’ history, and its history in the context of neo-colonialism, none of this should come as any surprise. And moreover, the implications of the initiative if implemented may well be as deadly as anything that has gone before.
When much of the rhetoric and conceit is stripped away, we are left with what is important to understand about the objectives of neo-liberal globalization: uninhibited access to key markets, access to energy supplies, and access to strategic resources.
Contact, Conquest, Consolidation
Millions of indigenous people’s lives are adversely affected by a model of development which privileges the interests and concerns of global investors over the collective rights of indigenous peoples to their lands, pastures, rivers, mountains and ancestral territories. The present situation however is not new. The roots of the current phase of economic globalization lie in the imperial European conquests from the sixteenth century onwards. Unfortunately, as a process of economic dispossession and spiritual and cultural loss for indigenous peoples, it has been accelerating in the new age of “accumulative globalization”.
What the Spanish Conquistadors, King Leopold of Belgium, and the British East India company, just to mention a few, could not do to indigenous peoples, the global extractive industry with the help of the Word Bank is trying to finish. As always, it is in the name of profit: by mining on the territories of the world’s indigenous peoples, in the process, displacing, and thus, destroying whole cultures. Unfortunately, according to the above analysis it looks like the World Bank is happy to pave the way. It is a familiar pattern, and one which is easily discernible with someone with even a cursory knowledge of the history of European contact and conquest, and the ensuing relationship between the colonizers and the colonized. That is, between settler-colonial societies, and the “less than civilized natives”.
Historically this conquest was rationalized as a “civilising mission”, but now the ideology has changed: economic progress, and its correlate, material progress, is now employed in the name of development, it is no longer some misplaced notion of Judaeo-Christian moral supremacy. Rather it has now mutated into neo-liberal globalization, and, as an ideology of moral supremacy it is just as deadly as its imperial antecedent. It is a development process we are lead to believe that is politically neutral, value-free, and technologically proficient. In other words, the market, if left alone to its own devices-freeing up private enterprise, opening up trade and investment, and “liberating” global capital-will solve all global problems. Welcome to the new religion, same as the old one. A variation of this paradigmatic model of development has been practiced and implemented by the world’s largest development organizations- the IMF, the Asian Development Bank, and the World Bank – for decades. If it were possible to take a moral calculus which could determine the consequences and effects of the actions of the above organizations on global indigenous peoples, the results would not be attractive. Indeed it would be fair to say that they have been catastrophic. Largely as a result of this catastrophe, the indigenous peoples of the world are now the most marginalized, poorest, and most oppressed of all minorities.
As Edward Said observed in his study of the relationship between culture, the nation-state and imperialism in European and later western society-the main battle in imperialism is always over land; who owns that land, and by extension, who has the right to extract the mineral wealth below it, and ultimately, who plans its future. [v]
The process of encouraging investment in the exploitation of natural resources on the lands of indigenous peoples in oil, gas, minerals, and gold, as a development policy, is now standard practice. Moreover, protecting and expanding foreign investor privileges in bilateral and multilateral trade deals is paramount. Recent developments in South America and elsewhere bear this reality out. Currently such a scenario is even being played out in Ecuador a country which actually has the rights of nature, or Pachamama, enshrined in its Constitution. The well publicized Yasuni-ITT initiative, in which Ecuador suggested a scheme whereby, for leaving its supplies of oil in the ground in the bio-diverse Yasuni national park as a goodwill environmental gesture, richer countries could in return provide development aid as compensation for the losses incurred. Money which could then, in turn, be used to develop the country’s social and economic infrastructure. Perhaps inevitably, a paltry amount was offered by rich countries, but not before it came to light that the country’s president Rafael Correa had secretly pursued a deal with a Chinese bank to drill for oil.
A Similar development was also playing out in Peru at around the same time, where the President from 2006 to 2011, Alan Garcia, publicly speculated that the country’s huge untapped oil and mineral deposits should be opened up to large scale foreign investment to let development take place, a move that is currently signaling the breakup of indigenous land and territory. As he pointed out, in language obviously designed to appeal to a specific international audience of bankers, investors and speculators: “there are millions of hectares for timber extraction that lie idle, millions more that communities and associations have not, and will never, cultivate, in addition to hundreds of mineral deposits that cannot be worked.” [vi]
The evident and prescriptive solution therefore according to Garcia was to enact new property rights, attract foreign investment and large scale investment and technology, and to sell land to the highest bidder. [vii] The land he was offering to sell was, of course, mineral rich indigenous territory. And much of this he has done.
Tragically however, during a demonstration against the presidents’ actions, there was a violent cost for the indigenous peoples of Peru, in June 2009, in what has come to be known as the Bagua massacre. The facts are not completely clear, but what is certain is that at least 30 people were killed. [viii] Security forces opened fire when indigenous groups protested against two legislative decrees, 1090 and 1064, which were proposed by the president. The aim of the decrees was to open up indigenous territories to oil, gas, mining and hydropower development. Much of the development proposed has come to pass, with the inevitable results. The massacre is perhaps unsurprisingly little known in the West. The indigenous groups where protesting because they knew what the outcome of Garcia’s development policies would ultimately be: dispossession of the land, and displacement of the people.
In light of these examples and the World Bank’s recent proposals, serious critical questions arise. Firstly, however bad the above examples are, if the World Bank is now proposing to start “out sourcing” environmental and social responsibilities to financial intermediaries from the private sector, could this now mean that the consequences of mining and other forms of development for indigenous peoples is about to get even worse? Will equity or hedge funds even pay lip service to human rights and environmental protections and protocols?
The 19th century military historian, Carl von Clausewitz, famously observed that war is simply the continuation of politics by violent means. War therefore viewed in this light is just as rational a policy as any other; it just becomes a different strategy to achieve your aims.
Understood in these terms, are the World Bank’s proposals to lower its protection protocols by outsourcing them to unaccountable private sector actors really just another continuation of neoliberal development policies by other means?
The consequences for the indigenous peoples of the world of this new mythology of neoliberal resource nationalism could indeed be yet another catastrophe in the making, all powered by the new slouching behemoth of our day: the multinational corporation.
Finally, as Noam Chomsky has been pointing out recently, there is something of an extraordinary paradox emerging in the fact that it is the indigenous societies of the world, who are amongst the most oppressed, despised, “primitive” and disadvantaged of all peoples, who are in the lead when it comes to ecological concern for the future of the planet. Juxtapose their concern for the planet with western governments, corporations, development institutions, and societies headlong rush into possible ecological disaster (and increasingly China, India, Mexico other parts of the world too) and something quite incredible comes to light. It is the poorest inhabitants and their holistic value systems which hold out the best prospect of a decent survival for future generations into the future, and not the highly ideological rational actors cited above. Then again, perhaps it should not surprise us at all.
Mark Kernan is finishing off a masters in international human rights in University College Cork, Ireland.
[i] See, “WORLD BANK: Environmental and Social Framework Setting Standards for Sustainable Development, Environmental and Social Standard 9. Financial Intermediaries. First draft for consultation”, P. 88. Available at: worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/07/30/000456286_20140730173436/Rendered/PDF/
[ii] “World Bank Rolling Back Safeguards”. Available at: http://bankonhumanrights.org/2014/07/world-bank-rolling-back-safeguards/#more-1091′
[iii] Supra note i, page 89.
[iv] Taken from the World Bank’s core mission statement
[v] Edward Said, “Culture and Imperialism” 1994
[vi] Anthony Bebbington, “The New Extraction: Rewriting the Political Ecology of the Andes?” NACLA Report on the Americas, SEPTEMBER/OCTOBER 2009. At P.12. Available at: www.sed.manchester.ac.uk/research/andes/…/bebbington_naclareport.pd.