Internal Investigation Shows World Bank Water Project Destroys Livelihoods in Pakistan

A World Bank-funded water project in Pakistan has led to widespread environmental harm and suffering among local communities. The project has contributed to deadly floods, and violates six of the Bank’s binding policies. These are the main conclusions of an investigation by the Inspection Panel, the World Bank’s independent investigative body. The Bank’s Board of Directors will discuss the findings of the investigation on October 31.

In response to the Panel report, ActionAid Pakistan and International Rivers say that the World Bank continues to turn a blind eye to the impacts of its projects on the ground. The civil society groups request that the Bank pay reparations to address the grievances of the affected people, and that it stop financing large dam and canal projects in Pakistan.

The World Bank approved $285 million for Pakistan’s National Drainage Program Project (NDP) in 1997. The project was supposed to improve drainage in Pakistan’s irrigation system in order to address the problems of salinization and waterlogging. According to the Inspection Panel, the alignment of the drainage canals was "technically and environmentally risky", and "technical mistakes were made during the design" of the canals. As a consequence, "increased salinity has affected large tracts of agricultural lands", and the failure of the drainage infrastructure "has led to major harm to the ecosystem, wildlife and fisheries". Increased flooding, which was partially caused by the project, claimed more than 300 lives in 2003.

Affected people filed a complaint against the NDP with the World Bank’s Inspection Panel in September 2004. The Panel found that the project fully or partially violates the Bank’s binding policies on Environmental Assessment, Natural Habitats, Indigenous Peoples, Involuntary Resettlement, Project Supervision, and Disclosure of Information. The Bank management refutes these findings and asserts that the "Bank was diligent in the application of its policies and procedures during implementation of the NDP".

More than 1,000 affected people met in the project region on October 5 and put forward a list of 13 demands. According to Mustafa Talpur of ActionAid Pakistan, "there must be a comprehensive plan for protection, promotion and restoration of livelihood sources such as agriculture land, livestock, fisheries, grazing areas and forests". The affected people also demanded that alternative drainage options must be identified with the full participation of the affected communities, and that the loan amount be converted into a grant, and the proceeds spent for reparations to the affected communities.

According to its most recent Country Assistance Strategy, the World Bank plans to increase its lending for Pakistan’s water sector tenfold during the 2006-09 period. The Bank also plans to invest in new, contentious large dam projects. Civil society groups are opposed to this plan. Ann-Kathrin Schneider of International Rivers says: "The investigation by the Inspection Panel shows that the World Bank has not learned the lessons of its earlier fiascos in the water sector. The Bank should not finance new large canals and dams in Pakistan."

The Inspection Panel report (16 MB), the response by the World Bank’s management (11 MB) on these documents are available from International Rivers. For these documents and further questions, please refer to the "Contacts" list above.