in Laos

How the World Bank explains REDD to Indigenous Peoples

The World Bank’s involvement in developing and financing REDD is one the more troubling aspects of REDD – at least for anyone aware of the World Bank’s record in dealing with people and forests.

True to past form, when the Bank announced its Forest Carbon Partnership Facility in Bali in December 2007, it did so without consulting Indigenous Peoples, let alone seeking their free, prior and informed consent. When the countries involved produced their “Readiness Plan Idea Notes” without consulting Indigenous People, the Bank simply decided that consultation wasn’t necessary.

Benoit Bosquet, a “senior natural resources management specialist” is responsible for leading the development of the FCPF at the World Bank. When Bosquet spoke to more than 400 Indigenous Peoples at the Indigenous Peoples Global Summit on Climate Change, in Alaska last month, we might have expected Bosquet at least to offer an apology. He did not. Coming from someone who has acknowledged that “we will make mistakes” on REDD, perhaps we should not be too surprised.

“The facility’s ultimate goal is to jump-start a forest carbon market that tips the economic balance in favor of conserving forests,” Bosquet said when the FCPF was announced in Bali. Yet in his presentation in Alaska, Bosquet talked about the FCPF’s Carbon Fund being “neutral to market or non-market”.

Bosquet explained that the World Bank has two investment channels relating to forests and climate change: Carbon Funds (US$2.3 billion) and Climate Investment Funds (~US$6 billion). The BioCarbon Fund (US$90 million) and the Forest Carbon Partnership Facility (US$385 million target) are part of the first category and the Forest Investment Program (US$500 million target) part of the second.

Bosquet described the various parts of the World Bank’s involvement in forests and climate:

The BioCarbon Fund: “Its mandate was to expand carbon finance into the landuse, landuse change and forestry area through projects and we have signed about 16 contracts around the world with governments, with local communities, with non-governmental organisation. Unfortunately we still don’t have one with an Indigenous Peoples’ organisation, even though in a few of these projects there is actually Indigenous Peoples participation in the projects.”

The Forest Carbon Partnership Facility: “That is the facility that was set up to basically demonstrate REDD, reducing emissions from deforestation and degradation with two funds. One that is currently operational, which is a capacity building fund, it’s called a readiness fund, operates in, will be operational in 37 countries and I’m going to tell you a little more about what that fund does. And then a future fund, it’s not yet operational, that is the carbon fund that would provide on a pilot basis payments for deforestation that have been verified to have been reduced. It’s not a market mechanism, it’s actually neutral to market or non-market, it’s simply trying to pilot this channelling of money for the output and this output is basically verified emission reductions from reduction of deforestation and forest degradation.”

The Forest Investment Program: “As its name indicates, it’s not a carbon fund. It’s part of the climate investment funds and that one is under design and in fact some of you here will be participating in a final design workshop early May in Washington.”

The Growing Forest Partnership: “A series of partnerships in various countries, managed in fact outside of the World Bank, that is operationally, and that is basically to empower local stakeholders to make decisions about the future of their forests.”

The Forests Dialogue: “In which the World Bank participates, that is a platform bringing together public sector and private sector on hot topics regarding forests and climate change and in fact the next meeting is this weekend in New York.”

Bosquet continued by describing how the World Bank sees REDD. Notice how little he refers to either Indigenous Peoples or forests. To Bosquet, REDD is all about carbon and finance:

Let’s focus on REDD a little bit. And let’s with one picture, try to capture what REDD is about and where the money for REDD may come from. REDD in our view has three phases. The first phase is this famous readiness. Getting ready for REDD. What does that mean? Well, simplifying things a little bit, it means that you put in place systems and this systems include a reference scenario, that is what you would emit, what you have emitted, how much you have emitted historically and how much you might emit in the future in the absence of new incentives. And this is done at the national level. Then a REDD strategy. For those countries that actually want to go ahead and reduce emissions, they have to decide how, where, with whom, at what cost. Questions like who owns this carbon? And who is going to be paid? Very, very important questions. And then of course the third element is a monitoring, reporting and verification system because it’s one thing to say “Oh, we estimate we should be paid this much,” but you have to show that you have reduced against your reference scenario and using a credible system.
 
Second phase is the policies, reforms and investments that are actually going to reduce those emissions. The readiness doesn’t reduce anything, it’s just systems, strategies, plans. And here you might think of items obviously in the area of forest governance, of information systems, of forest management and also, and in fact this is very important, investments outside the forest sector, because most of the time forests don’t get cut because of issues inside the forest, but oftentimes it’s outside, it’s agriculture, it’s energy, it’s infrastructure.
 
And then the third phase conceptually, is one where a country basically maintains its reforms and investments. And for that it would acquire payments that would be presumably mostly performance based, that is not made up front but that is received on the verification that these missions have been reduced.
 
On the financing side, then, you can, we can list a number of sources. For readiness there’s the FCPF Readiness Fund, there’s the UN-REDD programme, we have colleagues from UNDP here, the Congo Basin Forest Fund can participate, the Global Environment Facility, and of course a whole series of sources from Official Development Assistance. For the second phase you would have sources like the Forest Investment Program, the UN-REDD programme, the Congo Basin Forest Fund, the Global Environment Facility and ODA. And then third, in terms of the maintenance, and this is still very early days, it might, it should rise to much larger levels than where it’s at now, the Carbon Fund of the Forest Carbon Partnership Facility, Norway which has announced large sums of money for this purpose, a proposal by the European Union called the Global Forest Carbon Mechanism and potentially the carbon market. You see, I put this with a question mark, it is not a question that the World Bank, or the UNDP, or in fact any other international agency decides upon, this is something that the climate negotiatiators will be deciding upon and obviously Indigenous Peoples have a role to play there.

Faced with an audience that is hostile to carbon trading, Bosquet is keen to play down the role of carbon markets. A little later he talked about the risks associated with REDD. Unfortunately he did not mention the risk that World Bank staff speak with a forked tongue:

There are clearly risks to REDD and specifically risks to Indigenous Peoples and we are well aware of these risks. But from our point of view there are also opportunities. Otherwise obviously we wouldn’t be doing this. I mean we’re not that mean. Right.
 
So, what are some of these risks? And this is our own, or my own reading, perhaps it’s not the reading that you share, but at least this captures some of the things that I’ve heard.
 
Will investments and payments weaken the customary rights that are in place in countries?
 
Can Indigenous Peoples and other forest dwellers participate in the development of these programmes? Not to speak of participating in the revenue sharing obviously.
 
Who owns the carbon?
 
Will investments affect livelihoods and cultures?
 
And what is the economic future of small and medium sized enterprises and the local markets? Is everything going to be destroyed by REDD?
 
Looking at the positive side, things could go well, can go well. There’s the potential that they will go well subject to certain conditions. What are some of the opportunities? Obviously new sources of revenues. Indigenous Peoples have been protecting forests for, since time immemorial. Isn’t it the time that they too were, you know, participating in mechanisms that recognise the value that forests have, standing versus cut? You know there is a potential to use REDD actually to clarify rights. You know as part of the systems, as part of the readiness, to use REDD as an opportunity to put these big questions on the table. There is a big opportunity that Indigenous People to basically bring to the table all of their traditional knowledge and practices. And their presence on the ground. I mean governments are often not at all represented in the forest. They are not there. They are absent. The presence that is in the forest is Indigenous Peoples, other forest dwellers and the private sector. And the governments that are clever will in fact seek the help of Indigenous Peoples to control and to enforce forest protection.
 
And then this bigger goal that is if Indigenous Peoples want they could use this particular area to actually come to the table and participate in political processes at the national and the regional and global level.
 
Again, these are personal thoughts these are not the thoughts of the World Bank, but you know, it’s a discussion. I’d like to hear from you.

When the presentation was finished, Egberto Tabo, General Secretary of the Coordinating Body of Indigenous Organizations in the Amazon Basin (COICA) noted that the World Bank is funding some of the most destructive projects in the Amazon forest. He spoke of “The genocidal legacy of World Bank investments in the past.”

The World Bank’s Navin Rai responded to the criticism by explaining that the Bank has improved in recent years:

Even the megaprojects we do, I think we do very differently. We can show you some of the megaprojects we do. We built a big dam in Laos. We relocated 5,000 Indigenous Peoples but with their full agreement. So just please understand that institutions evolve and we are doing our best and we want your help and advice and tell us where we are not doing well and we will do our best. Thank you.

Construction near the regulating dam, November-2007. PHOTO: International Rivers

Rai’s choice of a “big dam in Laos” as an example of how the World Bank has improved would come as a surprise to anyone familiar the project: the Nam Theun 2 dam. It’s the most controversial hydropower project in a country plagued by controversial dams, with a poor record for its treatment of indigenous peoples and which is among the most corrupt countries in the world.

For more than a decade, the 6,200 Indigenous Peoples who lived in the area of the Nam Theun 2 reservoir saw their forests logged by a Lao military-run logging company, were prevented from practising rotational swidden agriculture and suffered from a form of planning blight as the Lao Government cut off all forms of state assistance, on the assumption that the dam would one day be built. In 2001, the World Bank appointed International Advisory Group noted that logging had “resulted in the diminution of areas for food and other NTFP [non timber forest product] gathering including house building materials.” In a letter to the World Bank’s vice-president, the IAG wrote, “In villages we visited, the people have if possible sunk to a lower level of poverty than they were experiencing five or more years ago.” No wonder they agreed to move.

The World Bank hired a consultant, Barbara Franklin, to monitor the “consultation” process. After the presentations by the dam developers Franklin asked randomly selected villagers what changes the dam would bring to their villages. She noted that “many of the villagers painted rosy pictures, saying things like, ‘Everything will be better, because these people will come to help us’.”

The Nam Theun 2 dam is now almost built. International Rivers describes it as a “two-speed infrastructure project in which social and environmental programs fall behind while construction proceeds on schedule”. International Rivers’ Shannon Lawrence has visited the project area regularly since construction began in 2005. “Livelihood restoration programs for more than 6,200 resettled ethnic minority villagers on the Nakai Plateau, as well as for downstream villagers, are behind schedule,” she writes in a 2008 report, Power Surge. “The incomes of villagers in all areas affected by Nam Theun 2 are likely to decrease, at least initially, once the reservoir is flooded.”

The 39-metre high dam dam blocked the Theun River, creating a 450 square kilometre reservoir. Habitat for the endangered Asian elephant and other wildlife was flooded. Water will be diverted via a power station and channel into the Xe Bang Fai River, damaging fisheries, increasing flooding and erosion and destroying riverbank gardens for more than 120,000 people. The trickle that will be released downstream of the dam will not be enough to sustain the fisheries that feed and provide income for about 40 villages. The Nam Theun 2 Power Company failed to clear enough vegetation from the reservoir area before it was flooded, which will mean greater greenhouse gas emissions from the reservoir.

The resettlement has left Indigenous People worse off in terms of access to the river, forest and their fields. “In the old village it was easy to find food. We were close to the river and there was lots of rattan and other forest products. But now we have to take a motorbike to find food. We have to find food. We have to travel three to five kilometres to the forest. Our field is one-and-a-half kilometres away,” one of the people resettled to make way for the reservoir told International Rivers.

The World Bank session at the Indigenous Peoples Global Summit on Climate Change ended with an emotional appeal from a Western Shoshone woman. “Please understand we do not trust you. You are bad. You create systems that destroy us inside and out.” She may or may not know the details of the Bank’s involvement in the Nam Theun 2 dam, but she is right not to trust the World Bank.
 

Leave a Reply

  1. Thanks Chris. Having been in Anchorage to represent Forest Peoples Programme, I can also add that he Bank started their presentation, before Bosquet’s , by refering to the recommendations of the Extractive Industries Review and the World Commission on Dams stating that since then the Banmk has learned to do things well.. (sic! and how about FPIC, compensation for damage to resettled communities, reduction of GHG emissions conneced to its portfolio?). Additionally Bosquet explained how the Bank is dealing with UNDRIP. he said the Bank in fact acknowledges that a majority of the countries of the UNGA adopted UNDRIP and that the Bank Management is undergoing a reveiw of the implementation of OP 4.10 on Indigenous Peoples (1993-2009) and will bring the matter of UNDRIP and alignment of WB guidelines to the Board next fall….However, given the dynamics of the Board and the fact the majority votes are in the hands of governments of states that have not adopted UNDRIP (i.e. the US) this might turn out to be an academic excercise. The Bank also came to Anchorage to publicise its small grants for adaptation, that this time have a subsection for Indigenous Peoples http://www.developmentmarketplace.org

    Francesco Martone