Damming the World Bank

As the fifth anniversary of the unveiling of the World Commission on Dams' final report passes this month, it's worthwhile to consider how the Commission's progenitor, the World Bank, has abused it.

Dams and their reservoirs are the largest structures built by humans, and they are at the heart of the Bank's gigantean approach to development. The Bank exists to make large loans; small loans are demonstrably more effective, but the Bank has too much money and too little staff to make those. Instead, it whets the pot for private investment with a loan of, say, a few hundred million dollars, on the way to construction of a multi-billion-dollar dam. The dam's electricity is fed to mines and factories, and its stored water supplies cities and affluent farmers.

Never mind that the dam overwhelms its surroundings, causing massive social and environmental degradation. In the modern era, the Bank acknowledges the problems, writes voluminous reports about them, even grapples with them to a degree, but doesn't let them get in the way of building dams.

That dams' liabilities have nevertheless become obstacles is in part attributable to their severity: the world's 45,000-plus large dams -- structures at least five stories -- have displaced 40 to 80 million people, and they have wrought environmental damage from reservoirs' upstream lip all the way downstream to sediment-depleted estuaries, beaches, and oceans. Dams became the Bank's most problem-ridden projects; as Bank senior water adviser John Briscoe has explained, a major dam project "will often account for a small proportion of a country director's portfolio but a major proportion of his headaches."

The World Commission on Dams arose out of the Bank's dam-building frustrations. Dam opponents learned to tie up projects in long delays, until investors gave up. By the mid-1990s, so many of the Bank's projects were mired in controversy that the Bank funded only four dams a year, down from 26 dams a year a decade earlier. In desperation, the Bank reluctantly embraced a proposal by dam opponents to create an independent commission that would assess Bank dams' performance and set down rules for future construction. The Bank hoped that if anti-dam groups were represented on the Commission, they would have no grounds for protest after agreeing to reasonable rules for building dams.

The Bank made one proviso -- that the commission assess not just the Bank's dams, but all large dams -- in an apparent attempt to divert attention from the Bank's many problem-ridden dams. The Bank then joined forced with the World Conservation Union (IUCN), a Geneva-based quasi-official nonprofit, to create the Commission. Its twelve commissioners were drawn equally from three categories -- "pro-dam," "mixed," and "anti-dam." Among them were Göran Lindahl, president of ABB Ltd., then the world's largest supplier of hydropower generators, and Medha Patkar, an anti-dam firebrand whose protests against a huge dam project on India's Narmada River repeatedly involved courting her own death.

It was not auspicious that the Bank once before had turned to independent experts to resolve a dam crisis, then tried to ignore the experts' advice. That was in 1992, when protests led by Patkar -- including, most dramatically, a 22-day hunger strike -- forced the Bank to suspend support for its centerpiece Narmada dam and commission an independent project review.

The reviewers, led by former Republican Congressman Bradford Morse, turned out to be more independent than the Bank counted on, for after an exhaustive nine-month study, they recommended abandoning the project altogether. The Bank took a futile stab at publicly misrepresenting the report, then begrudgingly acceded -- for the first time in its nearly five decades of existence, the Bank left a project unfinished. In the end, it skipped the last $170 million dollars of its $450 million dollar dam loan, but soon afterwards announced $2.3 billion in new loans for other Indian projects.