The Arun III Dam: a Test Case in World Bank Accountability
The Arun III Dam: A Test Case in World Bank Accountability by Lori Udall, February 1994 Despite growing evidence of the unsoundness of the Arun III Dam, the World Bank seems determined to approve this massive hydroelectric' project in a remote pristine valley in western Nepal. The costly Arun III could undermine Nepal's economy, dissipate local indigenous populations, and cause ir reversible destruction to one of the last remaining intact forests in the Himalayas. Although local Nepalese hydro experts have promoted a series of viable alternatives, and donor governments have raised serious questions about the project, the Bank worries that if itt backs down on Arun III it will lose credibility as a financing partner for large-scale infrastructure projects.
It is a five-day walk from the nearest road to get to the proposed site of the Arun III dam in the Arun River valley. A planned 74.4-mile-long access road to be constructed through the valley and the influx of up to 10,000 construction workers and their families will jeopardize the lives and cultures of 450,000 indigenous people and threaten over one hundred species of endangered and rare flora and fauna. The Arun III project is the first in a series of three dams to be built in the valley, and yet there has been no cumulative environmental impact assessment for the entire scheme. The World Bank is slated to lend U.S. $175 million for the project; other major donors include the Asian Development Bank (U.S. $127.6 million), Japanese Overseas Economic Cooperation Fund (U.S. $163.3 million), and Germany's Kreditanstalt für Wiederaufban (KFW, Bank for Reconstruction) (U.S. $124.4 million).
On 24 October 1994 the Arun Concerned Group (ACG), a coalition of Nepalese nongovernmental organizations (NGOs), filed the first claim against the World Bank with a newly created inspection panel, an independent appeals mechanism set up to investigate claims from people directly affected by Bank projects. The ACG claim charges that the World Bank violated its policies and procedures during the preparation of the Arun III hydroelectric project. The ACG believes that there are alternatives to the project that are less expensive and less environmentally and socially damaging; and that would have the advantage of building domestic industrial capacity and developing hydropower more evenly throughout Nepal. While Arun III will be largely dependent on internationa contractors, a range of small to medium dams could be plainned, built, and run by domestic companies, the NGOs said in the claim. The coalition questions the prudence of undertaking a U.S. $1 billion project that is almost one-and-a-halftimes the annual national budget of Nepal. The claim against the Bank submits that during the preparation of Arun III the World Bank violated its policy on economic evaluation of projects and other policies on energy, information disclosure, the environment resettlement, and indigenous people. "It's no exaggeration to say that Nepal's economic future is at stake," warned Gopal Siwakoti a lawyer with the Arun Concerned Group. "Nepal is a poor country and this megaproject is completely inappropriate for it. But the World Bank is ignoring viable alternatives that will meet our energy needs at a lower cost."
"The [Arun III] project is not in confornity with the Bank's poverty alleviation strategy for Nepal," maintained Karcher; "it's an unbalanced use of Bank funds with an overemphasis on energy which will crowd out investments in the social sector and other high priorities such as rural infrastructure and agriculture."
The inspection panel-made a preliminary study of the claim, and in December 1994 recominended to the World Bank Board of Expcutive Directors that there be a full-scale investigation of the policy violations. The panel noted several policy violations and cited the "absence of a close examination of alternatives [to Arun]," concluding that "there is reason to believe that if a less restrictive assessment, including a wider ranger of hydro resources, could be undertaken it would result in expanding the number of economically and environmentally acceptable options."
Local hydro experts, including staff of the Alliance for Energy have been promoting alternatives to. Arun III for two years. The Alliance for Energy has put forward to the Bank and the Nepali government a concrete set of alternative proposals that include small- and medium-scale dam projects of up to 100 megawatts that could be developed in a number of river basins spread evenly throughout Nepal and could easily meet the grow ing demand for electricity. These projects could be developed and built in less time than Arun III and would have the advantage of providing electricity to rural communities. According to the Alliance for Energy, the-alternatives would be less damaging environmentally because the proposed sites are already near existing roads.
Source: Questia: Journal Article
It is a five-day walk from the nearest road to get to the proposed site of the Arun III dam in the Arun River valley. A planned 74.4-mile-long access road to be constructed through the valley and the influx of up to 10,000 construction workers and their families will jeopardize the lives and cultures of 450,000 indigenous people and threaten over one hundred species of endangered and rare flora and fauna. The Arun III project is the first in a series of three dams to be built in the valley, and yet there has been no cumulative environmental impact assessment for the entire scheme. The World Bank is slated to lend U.S. $175 million for the project; other major donors include the Asian Development Bank (U.S. $127.6 million), Japanese Overseas Economic Cooperation Fund (U.S. $163.3 million), and Germany's Kreditanstalt für Wiederaufban (KFW, Bank for Reconstruction) (U.S. $124.4 million).
On 24 October 1994 the Arun Concerned Group (ACG), a coalition of Nepalese nongovernmental organizations (NGOs), filed the first claim against the World Bank with a newly created inspection panel, an independent appeals mechanism set up to investigate claims from people directly affected by Bank projects. The ACG claim charges that the World Bank violated its policies and procedures during the preparation of the Arun III hydroelectric project. The ACG believes that there are alternatives to the project that are less expensive and less environmentally and socially damaging; and that would have the advantage of building domestic industrial capacity and developing hydropower more evenly throughout Nepal. While Arun III will be largely dependent on internationa contractors, a range of small to medium dams could be plainned, built, and run by domestic companies, the NGOs said in the claim. The coalition questions the prudence of undertaking a U.S. $1 billion project that is almost one-and-a-halftimes the annual national budget of Nepal. The claim against the Bank submits that during the preparation of Arun III the World Bank violated its policy on economic evaluation of projects and other policies on energy, information disclosure, the environment resettlement, and indigenous people. "It's no exaggeration to say that Nepal's economic future is at stake," warned Gopal Siwakoti a lawyer with the Arun Concerned Group. "Nepal is a poor country and this megaproject is completely inappropriate for it. But the World Bank is ignoring viable alternatives that will meet our energy needs at a lower cost."
"The [Arun III] project is not in confornity with the Bank's poverty alleviation strategy for Nepal," maintained Karcher; "it's an unbalanced use of Bank funds with an overemphasis on energy which will crowd out investments in the social sector and other high priorities such as rural infrastructure and agriculture."
The inspection panel-made a preliminary study of the claim, and in December 1994 recominended to the World Bank Board of Expcutive Directors that there be a full-scale investigation of the policy violations. The panel noted several policy violations and cited the "absence of a close examination of alternatives [to Arun]," concluding that "there is reason to believe that if a less restrictive assessment, including a wider ranger of hydro resources, could be undertaken it would result in expanding the number of economically and environmentally acceptable options."
Local hydro experts, including staff of the Alliance for Energy have been promoting alternatives to. Arun III for two years. The Alliance for Energy has put forward to the Bank and the Nepali government a concrete set of alternative proposals that include small- and medium-scale dam projects of up to 100 megawatts that could be developed in a number of river basins spread evenly throughout Nepal and could easily meet the grow ing demand for electricity. These projects could be developed and built in less time than Arun III and would have the advantage of providing electricity to rural communities. According to the Alliance for Energy, the-alternatives would be less damaging environmentally because the proposed sites are already near existing roads.
Source: Questia: Journal Article
