Charles E. Di Leva1
The International Bank for Reconstruction and Development (the World Bank) was established in 1945. Since its inception, the World Bank has been at the forefront of international institutions that address complex transboundary natural resource management issues. With nearly universal membership, and as the world's largest development aid agency, the Bank has long been helping member States design and implement projects on international land and aquatic boundaries in a manner that is sensitive to neighbouring States and the international community.
Today, the World Bank membership consists of 186 governments. Members join with the understanding that projects implemented by the Bank must comply with the Bank's Articles of Agreement.2 Among many other aspects, these articles support the ‘good neighbour’ aspects of transboundary management of natural resources. They also require that the Bank conduct its operations with ‘due regard’ to the effect on business investment in other members of the Bank (Article 1 (5)). Moreover, under Article 3 (1), the resources of the Bank are to be used for the benefits of its members with ‘equitable considerations to projects for development’. In addition, the Articles require that the Bank should ‘act prudently in the interests both of [the borrower and other members]’3 and that all loans ‘should be for productive purposes’.
Over time, with the assent of its members, the Bank developed operational policies that also support efforts to help ensure that Bank-financed projects are in line with key internationally accepted principles. These operational policies therefore help ensure that projects will be sensitive to the interests of Bank members, including those interests that arise because of transboundary concerns.
As early as the 1950s, the Bank was taking measures to ensure that hydroelectric projects on international waterways were carried out with transboundary co-operation. The Bank was well aware of potential transboundary conflicts, especially between large riparian states facing competitive demands or concerns about water flows and quality. Later, the Bank became the first development institution to put in place an environmental assessment (EA) policy that also required the Bank to consider applicable transboundary issues when projects are developed.
Today, a range of factors make these considerations even more important. These factors include the scientific and political awareness of the stress being placed on shared natural resources. Modern scientific research demonstrates the urgency of managing our shared natural resources better. A prominent example of this research took place following a request for a study by the United Nations Secretary General on the state of the world's ecosystems. As a result of this request, 1,360 experts collaborated on the development of the Millennium Ecosystem Assessment, co-sponsored by the World Bank and released in 2005.4 The extensive report depicted the stress throughout our planet on our water supplies, our forests, and our fishery resources. Overabstraction and overuse of all these resources threaten conflict among those who depend upon their access, highlighting the need to implement scientifically sound shared approaches to these resources.
Political awareness of the increasing pressure for access to resources is also driving the need for better transboundary management. To this extent, governments and the United Nations system, including its specialized agencies such as the World Bank, have also supported the efforts to attain the UN Millennium Development Goals.5 These goals, including Goal Seven – to achieve environmental sustainability – are driven by factors such as the following: 1) populations are increasing and in many areas of the world, critical natural resources are becoming more scarce; 2) access to resources is accelerating due not only to demand but also from sophisticated technology that can cross borders, such as slant drilling; 3) climate change will affect resources to an increasing degree, often damaging crops and water supplies; and 4) unless managed well, the factors above may lead states towards conflict. Reports have been documented of conflicts between or within some World Bank member States that are connected to resource scarcities; given current environmental trends, there is no current reason to assume that this type of conflict will diminish.6
Against this background, this chapter discusses how certain World Bank operational policies, specifically certain environmental and social safeguard policies,7 are relevant for addressing transboundary management of resources in Bank-financed projects, and how these policies and instruments are implemented to assist with compliance. The chapter then provides project examples where these policies have been effectively applied at different levels (local, national, regional, and international).
Next, it briefly discusses how the Bank is engaged with different partners to address transboundary resources and how it seeks to ensure that its projects, including those involving transboundary natural resources, are strategically aligned with the member countries’ development and poverty reduction goals. It also discusses the role that civil society organizations (CSOs) have played in the Bank's operations to carry out these projects. The chapter concludes with lessons learned from the Bank's experience in implementing its environmental assessment policy and in managing transboundary lake basins.8
Since the 1950s, the Bank has promulgated and implemented operational policies, inter alia, to promote effective and co-operative management of transboundary resources. These policies have generally required borrowing States to assess the potential transboundary effects of their projects and to make this information available to other affected members and the public prior to proceeding with the projects.
As understanding about the potential adverse impact of large-scale infrastructure has grown, the Bank developed a suite of environmental and social impact policies referred to as ‘safeguard policies’. These are designed so that Bank projects will ‘do good and avoid harm’. Several of the 10 safeguard policies are particularly useful in addressing transboundary issues: Operational Policy (OP) 7.50 International Waterways, OP 7.60 Projects in Disputed Areas, and OP 4.01 Environmental Assessment. This section provides details on these safeguard policies and other Bank policies that also promote the sharing of information with relevant stakeholders.
With an increase in Bank-financed projects on international waterways, and in view of the Bank's pertinent Articles, the Bank adopted a policy on international waterways in 1956.9 The policy required the Bank's management to be informed of any project that involved the use of international inland waters.
In 1964, the Bank revised this policy to expand the scope so that it would apply to all international waters bound by two or more States. The revised policy also extended the reporting requirement so that the Bank's Board of Executive Directors would be informed of such projects.10
The policy was again revised in 1985.11 Building upon existing Bank practice and the emerging rules of international law, the revised policy adopted the principle of notification for all projects on an international waterway that are within a set of pre-identified activities. Under this requirement, a State proposing a project on an international waterway is required to inform its neighbouring riparian States of its potential effects in advance of the Bank's final appraisal of the project.
The policy is referred to in current practice as OP 7.50 and was last revised in August 2004.12
OP 7.50 requires that the beneficiary State formally notify the other riparian States of a proposed project and its project details if the project is on an international waterway.13 If the beneficiary does not wish to give notification, the Bank does so. If the beneficiary objects to the Bank's doing so, the Bank discontinues processing the project and informs the relevant Executive Directors accordingly.
These procedures enable riparians to engage in information sharing and understand the potential impact of projects. Potentially affected riparian States can seek additional information or register concerns or objections.
Consistency with existing treaties and other instruments
OP 7.50 is drawn from generally recognized principles of international law,14 international arbitral awards, and the work of the Institute of International Law, International Law Association, and the UN International Law Commission.15
The Bank attaches great importance to the existing agreements or arrangements among riparian States. For example, if two watercourse States have an agreement that details water allocation and use but does not impose a notification requirement upon the State carrying out the project, the Bank would generally respect the terms of such an agreement and, consequently, OP 7.50 would not require notification.16 Similarly, if the agreement sets out the terms of notification, the Bank would expect the States to comply with the terms of the agreement to which they agreed to be bound.
OP 7.60 requires that the Bank notify governments if a proposed project may have an impact on territory that is the subject of dispute between the States.17 The policy recognizes that projects may raise sensitive issues between governments, and in some cases a project should not proceed unless the governments concerned agree that it can do so in a way that is not harmful to the interests of relevant interested States. Increasingly, with technological advances such as slant drilling enabling resource extraction under or across borders, issues pertaining to appropriate notification and impact assessment will be even more important.
OP 7.60 also requires Bank staff to provide details of possible territorial disputes that could be relevant to project operations. Further, Bank staff must ensure that interested governments have an opportunity to fully detail the issues of the dispute. Thus, prior to proceeding, Bank staff must investigate whether such a project could harm the interest of the States. The Bank may proceed with a project where it determines that it will not prejudice the claims of the country that is not borrowing for the project.18
Since the late 1980s, the Bank has been carrying out various forms of environmental assessment as its standard procedure for ensuring satisfactory environmental quality in its project portfolio.
In 1989, the Bank adopted Operational Directive 4.00 (amended as OD 4.01 in 1991) that obliged borrowing States to carry out environmental assessment if their projects were likely to have potential (adverse) environmental risks and impacts. In 1999, the OD was converted into OP/BP (Bank Procedure) 4.01. The latest revision was made in August 2004.
Environmental assessment requirement
OP/BP 4.01 requires that the borrower carry out environmental assessment, taking into account the natural environment (air, water, and land); human health and safety; social aspects (involuntary resettlement, indigenous peoples, and cultural property, socioeconomic considerations); and transboundary and global environmental aspects.19
According to OP 4.01, Bank investment projects are classified as category A,20 B,21 C,22 or FI23 according to the nature and magnitude of potential environmental impacts. For category A and B projects, the borrower prepares an environmental assessment report. For category C projects, beyond screening, no further EA is required. For category FI projects, sub-borrowers or beneficiaries are required to carry out appropriate EA for each subproject.
For category A projects, the borrower is required to retain independent experts not affiliated with the project to carry out the EA. If a project in category A is highly risky or contentious or involves serious and multidimensional environmental concerns, the borrower should normally also engage an advisory panel of independent, internationally recognized environmental specialists to advise on all aspects of the project relevant to the EA.24
To ensure good-quality EA and consistency with OP 4.01 requirements, the Bank reviews the findings and recommendations of the EA to determine whether they are adequate. If appropriate, the Bank requires additional EA work.25
Public consultation and disclosure requirements26
For category A and B projects, the borrower is required to consult project-affected groups and local nongovernmental organizations (NGOs) about the project's environmental aspects and to take their views into account. The borrower is to initiate such consultations as early as possible.
For category A projects, the borrower is required to consult these groups at least twice: (a) shortly after environmental screening and before the terms of reference for the EA are finalized and (b) once a draft EA report is prepared. In addition, the borrower consults with such groups throughout project implementation as necessary to address EA-related issues that affect them.
The borrower makes the draft EA (for category A projects) or any separate EA report (for category B projects) available in-country in a local language and at a public place accessible to project-affected groups and local NGOs prior to appraisal.
Consistency with existing treaties and other instruments
OP 4.01 and other safeguard policies provide the Bank with tools that support environmental and social principles that can be found in the 1992 Rio Declaration on Environment and Development,27 the 1991 Convention on Environmental Impact Assessment in the Transboundary Context (Espoo Convention),28 and the 1998 Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (Aarhus Convention),29 among other international environmental instruments.
Furthermore, many borrowing countries have internalized the EA requirement in their national law. A recent World Bank study, for example, found that 24 sub-Saharan countries have environmental impact assessment (EIA) legislation and that the majority of these have incorporated provisions that are consistent with the key requirements of the Bank policy on EA.30
Finally, to ensure that the Bank-financed projects take into account the borrower's policies and laws, OP 4.01 requires that the EA assess the country's national environmental action plans, the overall policy framework, national legislation, institutional capabilities related to the environment and social aspects, and the country's obligations under relevant international environmental treaties and agreements. The Bank does not finance project activities that would contravene national or international environmental treaty obligations identified during the EA process.31 Taken together, these principles set forth in the Bank's environmental assessment policy, as with those addressing international waterways and disputed areas, provide strong support for ensuring that transboundary resources are managed or developed in ways that comport with sound international practice.
Several other Bank policies promote natural resource protection and information sharing with relevant stakeholders.
Natural habitats (OP 4.04): Requires the borrower to seek to avoid damage to natural habitat and to take into account the views, roles, and rights of affected groups, including local NGOs, and involve them in planning, designing, implementing, monitoring, and evaluating such projects. The Bank encourages governments to provide affected people with appropriate information and incentives to protect natural habitats.32 This policy has also been applied in World Bank projects that support the establishment and maintenance of transboundary protected areas.
Pest management (OP 4.09): The borrower addresses pest management issues in the context of the project's environmental assessment, and therefore the same public consultation and disclosure requirements as those required under OP 4.01 apply. This policy is supportive of the objectives of international environmental treaties that address chemicals management.33
Indigenous peoples (OP 4.10): The Bank requires the borrower to engage in a process of free, prior, and informed consultation with affected indigenous peoples.34 Furthermore, OP 4.10 requires that the borrower make the social assessment report and draft Indigenous Peoples Plan or Indigenous Peoples Planning Framework available to the affected indigenous peoples' communities in an appropriate form, manner, and language.35 The policy also requires the review and analysis of the relation of indigenous peoples and the lands that they traditionally use, own, or occupy. In doing so, the policy takes special note of indigenous peoples' stewardship of natural resources.
Physical cultural resources (OP 4.11): The borrower consults relevant stakeholders as part of the overall consultation process for the EA, including project-affected groups, concerned government authorities, and relevant NGOs, in documenting the presence and significance of physical cultural resources, assessing potential impacts, and exploring avoidance and mitigation options.36 The findings of the cultural resources component of the EA are normally disclosed to the public, as per OP 4.01, except where the borrower, in consultation with the Bank, determines that such disclosure would jeopardize the safety or integrity of the physical cultural resources involved or of the source of information on the physical cultural resources.37 This policy has also been critical in supporting international treaties on cultural heritage.
Involuntary resettlement (OP 4.12): The Bank requires that displaced persons and their communities, and any host communities receiving them, are provided timely and relevant information, consulted on resettlement options, and offered opportunities to participate in the planning, implementation, and monitoring of resettlement. Also, appropriate and accessible grievance mechanisms should be established for these groups.38 The disclosure requirements are similar to those required under OP 4.01.39
Forests (OP 4.36): The Bank requires borrowers to identify and consult the groups interested in forest areas likely to be affected by Bank-financed projects in and beyond the forest sector.40 The disclosure requirements as set out in OP 4.01 apply to all projects that affect forests.41
Disclosure of information: The Bank has a presumption in favour of disclosure and is committed to making information available to the public. The documents now available to the public under this policy range from project and policy documents to strategy and evaluation documents.42
Human rights: The Bank does not have a policy per se on human rights. However, the Bank has recognized the importance of, and the need to, address human rights issues in diverse and multiple ways. The Bank supports human rights through a wide range of its activities. Explicit reference to the importance of human rights is set forth in OP4.10 (Indigenous Peoples).43 The Bank is currently working on a manual on human rights indicators, which was due to be finalized in 2007. The Bank has also recently established a trust fund that will be used for analytical work on human rights and to promote collaboration with other development partners.44
World Bank Operational Policies define the rules applicable to Bank operations in the design, preparation, implementation, and supervision of Bank-financed projects. Each OP, in turn, has a binding Bank Procedure that spells out how the Policy should be carried out.45 To ensure consistency and quality of safeguard application and implementation, the BPs set out details for required procedures and documentation.
The Bank has also established a central Quality Assurance and Compliance Unit, which provides support to the operational staff responsible for implementing safeguard policies and promotes harmonization of safeguard issues across regions.46
To ease the implementation of and remain consistent with the evolving safeguard issues, these policies regularly undergo revision. The revisions do not alter the objectives and principles of the policies, but rather are intended to clarify ambiguities in the existing policy statements, codify current practice based on evolving standards, and reflect recommendations of evaluations carried out by the Bank's independent Operations Evaluation Department.47
In 1993, following a number of concerns expressed by the impact of large infrastructure projects (including hydroelectric facilities on international waterways), the Bank established an independent inspection mechanism known as the Inspection Panel. The panel's primary purpose is to address the concerns of people who may be adversely affected by Bank projects and to ensure that the Bank adheres to its operational policies and procedures during the design, preparation, and implementation phases of projects.48 An investigation can be requested by any group of private individuals who believe they have been, or might be, harmed by a Bank-financed project and who believe that the harm stems from the Bank's failure to abide by its own policies and procedures.49
The Panel is the first body of its kind within an international financial institution to give voice to private citizens in an international development context.50 Since its inception in September 1993, the Panel had received 43 formal requests for inspection as of this writing, most of which have concerned the Bank's safeguard policies, with a number involving alleged noncompliance with polices on project supervision and disclosure of information. A number of these requests have concerned transboundary resource management, especially concerning large dams and pipelines.51 Many other international financial institutions have now established similar dispute settlement mechanisms
The safeguard policies are applied at the local, national, regional, and international levels. The following are a few examples in several Bank regions where these policies have been applied in a transboundary context.
GASBOL is South America's largest gas transport project to date. The primary purpose of the project is to transport natural gas produced from Bolivian gas reserves to major industrial centres in Brazil.52 To ensure that environmental and social impacts are properly considered, a number of environmental studies were conducted to analyze medium, long-term, and cumulative impacts of the project.53 In addition, the governments concerned set up an institutional framework for environmental management and supervision.54 With respect to public consultation and participation, the project established community-based organizations and committees to engage the public regarding the draft regulations and the project's environmental assessment. The Brazilian government also made extensive use of the media to publicize the results of the EIA, and the Bolivian government conducted outreach activities to channel appropriate information to local communities that were affected by the project. Meetings were also held with NGOs.55
This project was designed to produce least-cost baseload electric supply, to improve navigation along the Parana River located between Argentina and Paraguay, and to improve opportunities for fisheries. To manage this transboundary resource, the two governments established a bi-national entity, the Entidad Bi-Nacional de Yacyreta, to administer the facility, with the support of the World Bank. The project has succeeded in providing an increasing amount of electricity, though it has also been the subject of some controversy and was investigated by the World Bank Inspection Panel following the complaint of some citizens that, among other things, the resettlement of affected people on both sides of the river had not been carried out appropriately. Similar to the Nam Theun 2 hydroelectric project discussed below, under the design of the Yacyreta facility the operation would supply power principally to one riparian State (Argentina) with royalties directed towards the other State (Paraguay).
3.4.3 Nam Theun 2 Project (NT2)
The hydroelectric project on the Nam Theun River in Lao PDR provides for the export of 996 megawatts of electricity-generating capacity and electrical energy to Thailand.56 To ensure that the project complies with the Bank's safeguard policies, including OP 4.01, several environmental and social impact assessments, studies, and evaluations were conducted by the sponsors, the government of Lao PDR, domestic and international NGOs, independent consultants, and multilateral development institutions, including the Bank.57 The Bank also decided to finance the NT2 Social and Environment Project to mitigate some of the environmental and social impacts of the proposed hydroelectric project.58
Moreover, the government and the sponsors placed a high priority on public consultations and disclosure to ensure that all affected people were fully informed of the project and that the views of the affected population were taken into consideration.59 For example, the project design was amended to reflect the stakeholders' concerns related to the choice of location for the resettlement area.60 The project also engaged local villagers in its preparatory work as well as the implementation process of mitigation measures in their area. In addition, more than 200 local, national, and international consultations and workshops about the project and project-related issues have been conducted since 1997.61 To ensure that the project was developed and operated in accordance with all applicable standards, three internationally recognized and fully independent panels were also established to closely monitor the project.62
Launched in 2000, with a closing date scheduled for 2008, this transboundary management project seeks to assist the Mekong River Commission and its Secretariat to address water quality and management issues along the Mekong River for the four riparian countries that are members of the Commission – Cambodia, Lao PDR, Thailand, and Vietnam. Discussions are also taking place with China and Myanmar to seek the collaboration of all riparian States.
The transboundary issues to address within the Mekong Basin include fisheries, forestry and watershed management, wetlands, salinity, acid-sulfate soils, soil erosion and sedimentation, and floodplain management. The project activities will place increasing emphasis on the collection of data and conduct of related research on linkages between such issues and the flow and hydrologic regime. According to the project design, ‘[a]ssessing each problem area with all available data, determining which problems are of regional and global significance, and identifying specific needs for additional data are the key steps in launching this process’.63
The project also seeks to implement the Mekong River Agreement of 1995 by helping address the Rules of the Agreement that sought to have the countries agree on equitable utilization of the Mekong's waters. This was very challenging and therefore is a key element of the project. Article 26 of the Mekong Agreement mandates the Joint Committee to prepare Rules for Water Utilization and Inter-Basin Diversions pursuant to Articles 5 and 6 of the Mekong Agreement. Article 5 contains the general principle of ‘reasonable and equitable utilization’ of the waters of the Mekong system and outlines the conditions for notification, consultation, and agreement on proposed water uses. Article 6 calls for the maintenance of flows on the mainstream with respect to i) natural dry season flows; ii) wet season flows sufficient to enable the acceptable natural reverse flow of the Tonle Sap; and iii) peak flood flows. In order to implement Articles 5 and 6 of the Mekong Agreement and adhere to the principles of Article 3: Protection of the Environment and Ecological Balance and Article 7: Prevention and Cessation of Harmful Effects, additional rules on water use monitoring, information and data exchange protocols, and water quality are needed. In summary, rules for water utilization anticipated to be formulated under the Project are: i) Procedural Rules – protocols for information exchange, for monitoring water use and diversions in the Mekong Basin, and for the notification and consultation on proposed water use, and ii) Physical Rules – maintenance of flows on the mainstream and water quality rules.
The Nile Basin Initiative provides a unique forum for the riparian countries of the Nile to co-operatively manage the resources of the basin.64 These resources are critical for energy, drinking water, and irrigation supply. The Initiative has eight co-operative projects in the basin that are intended to provide a strategic environmental framework to manage the transboundary waters and environmental challenges there.65 The Nile Transboundary Environmental Action Project, for example, aims to improve the co-operation among the riparian States through: i) enhanced communication and knowledge exchange; ii) support of community-level land, forest, and water conservation approaches; and iii) increased public awareness and understanding of communities within the basin about, inter alia, basin-wide environmental issues. The Bank, at the request of the Nile Council of Ministers, has supported and facilitated the development of the NBI and is co-ordinating international support for NBI projects.66
The World Bank has been involved in transboundary water management issues in the Middle East for decades. One example of a recent effort is World Bank support for a study on the feasibility of transferring water from the Red Sea to the Dead Sea as a solution to stop the rapidly declining level of the Dead Sea.67 This study was announced on May 22, 2005, at the annual World Economic Forum by the Hashemite Kingdom of Jordan, the State of Israel, and the Palestinian Authority. The declining water level of the Dead Sea has far-reaching environmental, social, and economic consequences for the Dead Sea region and beyond. The water level of the Dead Sea has fallen more than 20 metres in less than 50 years. The current rate of decline is approximately one metre per year. The consequent impacts on the region of the shrinking sea are varied and numerous, and they may soon become irreversible. The World Bank was asked to co-ordinate donor support and to manage the study. The Bank will manage the study in accordance with the policies discussed in this chapter as well as other relevant policies.
While the collaboration marks an important opportunity to bring together political entities that have not always been able to work together, the studies are being conducted against a backdrop of concerns voiced by environmental groups. They have expressed concern about the feasibility of the mixing of waters of different densities, as well as the feasibility of conveying the water upgrade. For these reasons, the accepted international practice of the World Bank assessment and analytical tools may be crucial to finding the right way to address this complicated issue.68
The World Bank has been engaged with the World Conservation Union–IUCN and other agencies in supporting a range of protected area initiatives spanning a number of borders.69 These include the Mesoamerica Biological Diversity Corridor; the Mesoamerican Barrier Reef Project; the project to enhance the trilateral co-operation between Kazakhstan, the Kyrgyz Republic, and Uzbekistan in the West Tine Shan Mountain Range; and the Eastern Carpathian Mountains.
These efforts have included working on the legal arrangements between the bordering States to help launch collaborative arrangements for managing the shared resources and for sharing knowledge.
Two recent partnerships launched by the Bank in collaboration with other development partners may also support regional and country-based approaches for the management of fishery and forest resources. The World Bank has established a new Global Program on Fisheries (PROFISH) in association with key donors and stakeholders to meet the challenge of this growing crisis.70 PROFISH is supported with a multidonor trust fund and includes among its objectives ways to improve the unregulated and unsustainable harvesting of fish beyond territorial waters.
PROFOR is another multidonor trust fund administered by the World Bank that sits within the Environmentally and Socially Sustainable Development's Forests Team.71 PROFOR is funded by the Department for International Development of the United Kingdom, the Finnish Department for International Development Cooperation, the Japanese International Forestry Cooperation Office, and the Swiss Development Cooperation. The German government is an in-kind contributor. PROFOR was initially established at the United Nations Development Programme and was relocated to the World Bank in 2002. PROFOR's objectives are consistent with those of the World Bank's Forest Strategy and Policy approved in October 2002. PROFOR collaborates closely with the Bank in implementing the Bank's strategy, which is built on three pillars: harnessing the potential of forests to reduce poverty, integrating forests in sustainable economic development, and protecting global forest values.
A country assistance strategy (CAS) ensures that Bank projects are strategically aligned with a country's development priorities. The CAS's primary purpose is to analyze the country's development situation and to identify the key areas in which the Bank can best assist the country to achieve its development and poverty reduction goals.72 Although a CAS is normally prepared for a single member country, a regional strategy may also be prepared for a group of countries to analyze issues relevant for the entire region (e.g., the Eastern Caribbean subregion, the Pacific Islands, West Africa).73 Furthermore, many CASs explicitly discuss the management of transboundary resources.74
CSOs have been playing a critical role in the Bank's operation, including project identification, design, implementation, and monitoring and evaluation.75 Examples of CSOs' contributions include:76
Increased stakeholder participation particularly by poor and marginalized populations – CSOs can also help ensure that these views are properly considered in policy and programme decisions;
Improved and enhanced public sector transparency and accountability, enabling an environment for good governance;
Increased public consensus and local ownership of reforms, national poverty reduction and development strategies, and promotion of public-private co-operation;
Innovative ideas and solutions and participatory approaches to solve local problems;
Assistance with strengthening development programmes through the incorporation of local knowledge, targeted assistance, and the generation of social capital at the community level; and
Provision of professional expertise and capacity building assistance for effective service delivery.
The Bank has also consulted CSOs on the revision, application, and monitoring of major Bank policies, including the safeguards on forest management, information disclosure, indigenous peoples, and resettlement.77 For example, when applying the safeguards on natural habitats, the Bank often refers to the categories to determine the type of natural habitats at issue as established by IUCN. The Bank also consults numerous international associations and NGOs, including the International Association for Impact Assessment and IUCN, for reliable scientific information to be applied on projects with transboundary considerations.
The Bank's environmental assessment policy has been applicable in all the Bank's projects that affect transboundary natural resources. Its implementation is critical to the success of development finance of such projects. Given the critical importance of this policy, the Bank has on three occasions reviewed application of the EA policy since its adoption of OD 4.01 in 1989: the first review was in 1992 (covering the period 1989–1992), the second in 1996 (1993–1995) and the third in 2002 (1996–2000).
The latest review found that the Bank has made tangible progress in many areas of EA performance (see Annex 3.1). The following are some key findings from the review:
The recent supervision assessment (QSA4), which was carried out in FY2000 and covered 103 Bank projects (14 Category A, 56 Category B, and 33 Category C), found that there were no projects rated ‘unsatisfactory’ for environmental aspects and that there were no Category A projects rated lower than ‘satisfactory’ for overall supervision quality.78
With respect to the public consultation (PC) requirement, the review found that the Bank has made important progress in planning (notably recruiting experienced participation experts, conducting good social assessments, and disseminating information), participation (through greater inclusion of vulnerable populations such as women and the poor), and improving local capacity.79
Approximately 87 per cent of the projects held PC during the scoping phase of the EA, and again about 87 per cent held PC on the draft EA. Some of these PCs influenced project design and improved project quality. For example, in the case of Lithuania Klaipeda Port Project, the PC process allowed the Bank to learn about the history of dredging spoils by the client, which was in conflict with the client's international obligations to protect the Baltic Sea. As a result, the scope of the mitigation plan was enlarged to accommodate the construction of an inland containment facility.80
About 90 per cent of projects reviewed were considered to have excellent information-dissemination strategies and had been successful in sharing information in appropriate languages and through appropriate venues.81
The report recommended more analysis of alternatives and potential long-term negative impacts beyond the project-specific areas, as well as increased attention to the monitoring and supervision of projects to help improve compliance and application of the Bank's EA policies. As the scope of EA increases, its reach to address transboundary considerations will also increase. These factors should build on and take into account the lessons learned in the context of shared lake basins.
In 2002, the Global Environmental Facility (GEF) approved a study that was published as ‘Towards a Lake Basin Management Initiative: Sharing Lessons and Experiences from GEF and Non-GEF Lake Basin Management Projects’. The study analyzed the experiences gained and lessons learned from the management of 28 lake basins, of which 16 were transboundary lakes.82 Although the study focused on the management of lake basins, many of the findings shed some light on the management of other transboundary natural resources.
Some of the lessons learned are the following:
Internationally funded projects should use existing, agreed regional and national plans, programmes, and institutions rather than starting afresh. This approach helps to minimize disruption to and repetition of existing mechanisms (e.g., Lake Malawi/Nyasa).83
Generating a common understanding of the issues affecting a transboundary lake basin and potential management actions through joint diagnosis helps advance co-operation between countries (e.g., Lake Victoria, Lake Ohrid).84 The Transboundary Diagnostic Analysis process devised by the GEF has helped riparian countries exchange information and work together to develop common lake basin goals.85
Success of transboundary lake basin management depends principally on member States' long-term political will, commitment, and fulfilment of obligations rather than just the particular form of institution or its legal status.86
Lake basin management requires the trust of sectoral institutions and the public to succeed. It should build on effective communications, a common set of data and methodology for analysis, and transparent decision making (e.g., Lake Peipsi/Chudskoe).87
Public participation and stakeholder involvement are essential for lake basin management, and these can be improved by increasing access to reliable scientific information and providing necessary assistance to all relevant stakeholders (e.g., Lakes Victoria and Tanganika).88 NGOs and CSOs often play critical catalytic roles in engaging stakeholders who are often marginalized, but their assistance needs to be better co-ordinated (e.g., Tonle Sap).89
Key provisions in the rules governing the management of transboundary resources should be harmonized. Such provisions may include rules of access and rules governing exploitation and use of the resource. In the case of Lake Ohrid, for example, Albania and the Former Yugoslav Republic of Macedonia had different fishing regulations due to the differences in fishing pressures in the two countries.90 The inconsistencies in the rules led to the vastly different level of catchments in the two countries, especially in the 1980s and early 1990s (see Figure 3.1).
Figure 3.1. Fish Catches in Lake Ohrid Showing the Effects of Different Rules in Two Riparian Countries
Source: The World Bank (2005).
Despite the lessons learned during 60 years of World Bank transboundary resource engagement, the sensitive issues addressed in this chapter are likely to increase in complexity and frequency. Climate change impacts alone will likely increase tensions among shared resource users due to shifting water access and arable land. In addition, the demand for hydroelectric power and for reservoirs of shared groundwater and energy sources will place stress on transboundary relations. In the pursuit of access and development, international institutions will need to provide the scientific, economic, legal, and financial support necessary for sound management and development. In light of these factors, it is essential that we use unflagging efforts to apply the valid international rules with due process and integrity for all stakeholders.
Annex 3.1. Comparison of Safeguard Studies and Assessments
Source: Kenneth M. Green and Alison Raphael, Third Environmental Assessment Review (FY 96-00), (Washington, DC: World Bank, 2002).
1 Chief Counsel, Environmentally and Socially Sustainable Development and International Law, World Bank Legal Department. The views expressed in the paper are the author's in his individual capacity and should not be attributed to the World Bank. The author would like to express his gratitude to Sachiko Morita, Esq., for her excellent contribution to this chapter.
2 International Bank for Reconstruction and Development, Articles of Agreement (1945).
3 Ibid., Article III, Section 4(v).
4 Millennium Ecosystem Assessment, March 2005, at www.maweb.org/en/index.aspx
5 UN Millennium Development Goals, at www.un.org/millenniumgoals
6 Most recently, reports of conflict arising from water scarcities in Darfur have been frequently pointed to as examples of disputes brought about over water and with connections to climate change. See, e.g., Ban Ki-Moon, A Climate Culprit in Darfur, Washington Post, 16 June 2007; United Nations Environment Programme, Sudan Post-Conflict Environmental Assessment, available at www.unep.org/Sudan. Historically, there have been conflicts between Turkey and Syria over the Euphrates, between Egypt and the lower riparian States over the Nile, and between China and its riparian States of the Mekong River. See Eyal Benvenisti, Sharing Transboundary Resources: International Law and Optimal Resource Use (Cambridge, UK: Cambridge University Press, 2002).
7 Beginning in 1999, Bank management applied the term ‘safeguard’ to a set of 10 environmental, social, and international law policies whose primary objective is to ensure that Bank-funded operations are designed to protect those who might be adversely affected by such projects and that the projects do not cause unacceptable harm to the environment.
8 This section looks at the Bank's experience with applying its policies on environmental assessment.
9 World Bank, Operational Memorandum for Projects on International Inland Waterways, Operational Memorandum No. 8 (1956).
10 Raj Krishna, The Evolution and Context of the Bank Policy for Projects on International Waterways, in Salman M.A. Salman and Laurence Boisson de Chazournes (eds.), International Watercourses: Enhancing Cooperation and Managing Conflict – Proceedings of a World Bank Seminar, World Bank Technical Paper No 414 (Washington, DC: World Bank, 1998).
11 Operational Manual Statement 2.32 (1985).
12 OP/BP 7.50 (August 2004).
13 Para.7 of OP 7.50 defines three categories of exceptions: 1) for any ongoing schemes, projects involving additions or alterations that will not adversely change the quality or quantity of water flows to other riparians; 2) water source surveys and feasibility studies; and 3) projects relating to a tributary of an international waterway where the tributary runs exclusively in one state and the state is the lowest downstream riparian.
14 These principles include the principle of equitable utilization and the obligation not to cause appreciable harm.
15 Krishna, supra note 10.
17 OP 7.60 (June 2001).
18 Ibid., para. 2.
19 OP 4.01, para. 3 (August 2004).
20 A proposed project is classified as Category A if it is likely to have significant adverse environmental impacts that are sensitive, diverse, or unprecedented. These impacts may affect an area broader than the sites or facilities subject to physical works. EA for a Category A project examines the project's potential negative and positive environmental impacts, compares them with those of feasible alternatives (including the ‘without project’ situation), and recommends any measures needed to prevent, minimize, mitigate, or compensate for adverse impacts and to improve environmental performance. Para. 8 (a).
21 A proposed project is classified as Category B if its potential adverse environmental impacts on human populations or environmentally important areas – including wetlands, forests, grasslands, and other natural habitats – are less adverse than those of Category A projects. These impacts are site-specific, few if any of them are irreversible, and in most cases mitigating measures can be designed more readily than for Category A projects. Like Category A, the EA examines the project's potential negative and positive environmental impacts and recommends any measures needed to prevent, minimize, mitigate, or compensate for adverse impacts and improve environmental performance. Para. 8 (b).
22 A proposed project is classified as Category C if it is likely to have minimal or no adverse environmental impacts. Para. 8 (c).
23 A proposed project is classified as Category FI if it involves investment of Bank funds through a financial intermediary, in subprojects that may result in adverse environmental impacts. Para. 8 (d).
24 Para. 4.
25 Para. 5.
26 Paras. 14–18. While the EA policy contains disclosure, consultation, and public participation provisions, it is also important to be aware of the Bank Policy on Disclosure of Information. This is the Bank's umbrella policy for disclosure of information and contains provisions on disclosure related to the environment that are consistent with those set out in OP 4.01.
27 Rio Declaration on Environment and Development, www.unep.org/documents. Among these, Rio Principle 2 is probably the most often cited when it comes to transboundary use issues: ‘States have, in accordance with the Charter of the United Nations and the principles of international law, the sovereign right to exploit their own resources pursuant to their own environmental and developmental policies, and the responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction.’ Nevertheless, a number of other principles reflect internationally accepted principles for addressing transboundary issues. Rio Principle 10 encourages States to involve stakeholders in environmental decision making. The precautionary principle set forth in Rio Principle 15 is reflected in the precautionary approach set forth in OP 4.01 (as well as OP 4.04 on Natural Habitats). In both cases the Bank requires an EA before an environmental project can proceed, and in OP 4.04 such an approach is required in determining whether a project can affect natural habitats. OP 4.01 is also in direct line with Principle 17, which declares that a State shall undertake an EIA for projects that are likely to have a significant adverse impact on the environment and are subject to a decision of a competent national authority. OP 4.01 and OP 7.50 contain many elements supportive of Rio Principle 19 that obliges States to provide prior and timely notification and relevant information to potentially affected States on activities that may have a significant adverse transboundary environmental effect and that they shall consult with those States at an early stage and in good faith.
28 See www.unece.org/env/eia. The convention requires States to carry out an EIA for all activities listed in Appendix I that are likely to have a ‘significant adverse transboundary impact.’ Art 2 (2).
29 At www.unece.org/env/pp/documents/cep43e.pdf, Article 5, para. 6 provides that ‘Each Party shall encourage operators whose activities have a significant impact on the environment to inform the public regularly of the environmental impact of their activities and products, where appropriate within the framework of voluntary eco-labeling or eco-auditing schemes or by other means.’
30 These provisions include the consultation and disclosure requirements. Mohammed A. Bekechi and Jean-Roger Mercier, The Legal and Regulatory Framework for Environmental Impact Assessments: A Study of Selected Countries in Sub-Saharan Africa (Washington, DC: World Bank, 2002).
31 Para. 3.
32 OP 4.04, para. 10 (August 2004).
33 OP 4.09, para. 1 (August 2004); World Bank, Safeguard Policies, Draft Matrices, Tools for Learning, World Bank (updated on 1 June 2006).
34 OP 4.10, paras. 1 and 10 (July 2005).
35 Para. 15.
36 OP 4.11, para. 11.
37 Para. 12.
38 OP 4.12, para. 13(a) (April 2004).
39 Draft Matrices, supra note 33.
40 OP 4.36, paras. 11 and 12 (August 2004).
41 Draft Matrices, supra note 33.
42 World Bank Policy on Disclosure of Information, Information Disclosure Web site, at http://www1.worldbank.org/operations/disclosure
43 Para. 1 provides that OP 4.10 ‘contributes to the Bank's mission of poverty reduction and sustainable development by ensuring that the development process fully respects the dignity, human rights, economies, and cultures of Indigenous Peoples.’ (emphasis added)
44 Examples of activities funded through this trust fund include: Studies and pilot projects to provide empirical documentation on the links between human rights, development, and poverty reduction; analytical work on the impacts of human rights on economic growth, sustainable human development, and good governance; development of justice/rule of law/human rights analysis that might be useful in the preparation of Poverty Reduction Strategy Papers or other national development strategies; coordination in the field between the Bank-supported justice reform programmes and human rights programmes supported by other development partners; and development of methodologies and mechanisms to monitor and measure justice and human rights, including design of indicators and assisting with their implementation in countries, building on existing research in this field. JHRTF Concept Note, World Bank (draft 12 July 2006).
45 Definitions, Operational Manual, at http://intranet.worldbank.org/WBSITE/INTRANET/OPSMANUAL/0,,contentMDK:20122392˜menuPK:60000 691˜pagePK:60001219˜piPK:60000961˜theSitePK:210385,00.html
46 Each of the Regional Vice Presidencies has a Regional Safeguard Director and a Coordinator. See Issues Brief: The World Bank's Environmental and Social Safeguard Policies, World Bank Safeguard Policies, at http://intranet.worldbank.org/WBSITE/INTRANET/UNITS/ESSDNETWORK/INTSAFEPOL/0,,contentMDK:2 0446525˜hlPK:971249˜menuPK:613214˜pagePK:64168332˜piPK:64168299˜theSitePK:584402,00.html; Kenneth M. Green and Alison Raphael, Third Environmental Assessment Review (FY 96-00) (Washington, DC: World Bank, 2002); David Freestone, The Environmental and Social Safeguard Policies of the World Bank and the Evolving Role of the Inspection Panel, in A. Kiss, D. Shelton, and K. Ishibashi (eds.), Economic Globalization and Compliance with International Environmental Agreements (London: Kluwer Law International, 2003).
47 Issue Brief, supra note 46.
48 World Bank, Accountability at the World Bank, The Inspection Panel 10 Years On (Washington, DC: 2003). See also, Charles Di Leva, in Carl E. Bruch (ed.), Public Participation in the Governance of International Freshwater Resources (Tokyo: United Nations University, 2005).
49 World Bank, supra note 48.
51 A complete listing and description of the Requests for Inspection, along with Panel Reports and related documentation, are available at the Inspection Panel Web site, at www.inspectionpanel.org
52 Green and Raphael, supra note 45; World Bank, Integrating Environmental Safeguards into Oil and Gas Pipeline Projects: A Best Practices Case Study of the Bolivia-Brazil Pipeline Project (Washington, DC: 2005).
53 Green and Raphael, supra note 46.
56 Integrated Safeguards Data Sheet, Report No. AC 293 (8 March 2004).
57 The project was also developed to ensure consistency with the International Finance Corporation's environmental and social policies. The suite of safeguard documents for the project includes the Environmental Assessment and Management Plan, the Social Development Plan, the Social and Environmental Management Framework and Operational Plan, and the Social and Environmental Impact Assessment. See Nam Theun 2 Hydroelectric Project Web site, at www.namtheun2.com; NT2 Safeguard Documents, Environmental Assessment and Management Plan, at http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/LAOPRDEXTN/0,,contentMDK:20330022˜pagePK:141137˜piPK:141127˜theSitePK:293684,00.html
59 Prior to this project, the Laotian government had little experience with open, inclusive public consultation. However, as the project progressed the government adopted a consultation strategy with four levels: international, national, provincial, and local, with the greatest emphasis placed at the local level. Green and Raphael, supra note 46.
60 Nam Theun 2 Hydroelectric Project Web site, supra note 57.
62 The Panels are the Panel of Environmental and Social Experts, commissioned by the Government of the Lao PDR in conjunction with the World Bank; the International Advisory Group, responsible for advising the World Bank in its handling of the social and environmental issues on the project; and the Dam Safety Panel of Experts, appointed by the Government of the Lao PDR in conjunction with the World Bank. Nam Theun 2 Hydroelectric Project Web site, supra note 57.
63 Project Appraisal Document on a Proposed Grant from the Global Environmental Facility in the Amount of 8 million SDR ($11 million) to the Mekong River Commission for a Water Utilization Project (Washington, DC: World Bank, 10 January 2000).
64 Ten countries share the Nile – Burundi, Democratic Republic of Congo, Egypt, Eritrea, Ethiopia, Kenya, Rwanda, Sudan, Tanzania, and Uganda. The Nile River Basin serves as home to an estimated 160 million people within the boundaries of the Basin, and about 300 million live within the 10 countries that share the waters. Nile Basin Initiative, at www.worldbank.org/afr/nilebasin/overview.htm
65 A review of information and projects under Nile Basin Initiative Shared Vision Program is available at http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/EXTREGINI/EXTAFRNILEBASINI/0,,contentMDK:21175378˜menuPK:3427090˜pagePK:64168445˜piPK:64168309˜theSitePK:2959951,00.html; see Nile Basin Initiative Home Page, at www.nilebasin.org
66 Nile Basin Initiative Home Page, supra note 65.
67 http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/MENAEXT/0,,contentMDK:20664264˜page PK:146736˜piPK:146830˜theSitePK:256299,00.html
68 The Economist, 16 March 2007.
69 The Global Transboundary Protected Area Network (IUCN, and IUCN World Commission on ProtectedAreas), at www.tbpa.net/case_07.htm
70 http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTARD/0,,contentMDK:20663260˜page PK:210058˜piPK:210062˜theSitePK:336682,00.html
71 See www.profor.info/about.html
72 A CAS is prepared in consultation with the government, civil society organizations, development partners, and other stakeholders.
73 Additional information on CAS, including BP 2.11 (June 2005), available at http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/0,,contentMDK:20120746˜menuPK:51551˜pagePK:41367˜piPK:51533˜theSitePK:40941,00.html
74 For example, Kenyan and Ugandan CASs discuss the management of Lake Victoria and the Nile Basin, and Albanian CAS discusses the management of Lake Ohrid. Kenya CAS (2004); Uganda CAS (2000); Albania CAS (2006).
75 A document review of loans approved in fiscal year 2004 found that 194 projects, or 74 per cent of the 262 projects approved by the Bank's Board, had some form of civil society participation. World Bank, World Bank – Civil Society Engagement: Review of Fiscal Years 2002–2004 (Washington, DC: 2005).
76 Approach to the World Bank's Engagement with Civil Society, available at http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/CSO/0,,contentMDK:20093200˜menuPK:220424˜pagePK:220503˜piPK:220 476˜theSitePK:228717,00.html
77 At least 15 Bank operational policies or directives for staff, recent IDA Replenishment reports, and the 2000 World Development Report on Attacking Poverty also discuss the need to engage civil society. Civil Society Background, at http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/CSO/0,,contentMDK:20093161˜ menuPK:220423˜pagePK:220503˜piPK:220476˜theSitePK:228717,00.html
78 Green and Raphael, supra note 46, p. 48.
79 Ibid., p. 65.
80 Ibid., pp. 65–67.
81 Ibid., p. 65.
82 International Lake Environment Committee Foundation (ILEC), Managing Lakes and Their Basins for Sustainable Use: A Report for Lake Basin Managers and Stakeholders (Shiga, Japan: 2005).
83 Ibid., p. 34.
84 World Bank, Lessons for Managing Lake Basins for Sustainable Use (Washington, DC: 2005), p. 85.
85 ILEC, supra note 82, p. 74.
86 Ibid., p. 34.
87 Ibid., p. 35.
88 Ibid., p. 48.
89 World Bank, Elements of Good Lake Basin Governance, Presentation (Washington, DC: 2005); Rafik Hirji, Lake Basin Management Initiative Lessons from Asian Lake Basins, Presentation (Washington, DC: World Bank, 2005).
90 For example, while there are limits on the catch in FYR Macedonia through concessions and licenses, there are no such restrictions in Albania nor are there any restrictions on the number of boats allowed on the lake or the number of nets a fisherman can employ. World Bank, supra note 84, p. 61.
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