Damming the World Bank
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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 GÃ¶ran 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.
In creating the World Commission on Dams four years later, the Bank was again gambling on an independent review, but now the stakes involved not one large dam, but all of them. "Truce called in battle of the dams," said a 1997 Financial Times headline over a story about the commission's creation. Dam stakeholders were skeptical that such a diverse group could reach consensus, but as time the went on, the Commissioners developed rapport, and found a way to work towards aÂ common objective. Even the Bank was optimistic. As late as September 1999, 14 months before the Commission issued its final report, Briscoe lauded its "absolutely extraordinary process" and declared, "We have every confidence" that it will deliver "very good advice." Bank officials even spoke confidently of using the World Commission on Dams approach to launch yet another commission on oil, gas, and mining.
As it turned out, the advice was notably sharp-edged. After presiding over the most thorough review of dam performance ever conducted, the Commissioners produced a 400-page report that offered proponents little comfort. It said large dams showed a "marked tendency" toward schedule delays and cost overruns; that irrigation dams typically neither produced the expected volume of water nor recovered their costs; that environmental impacts were "more negative than positive," and in many cases "led to irreversible loss of species and ecosystems"; and that their construction had "led to the impoverishment and suffering of millions."
The Commission even challenged the conventional assumption that dams provide "clean" energy; on the contrary, it said, dam reservoirs, particularly shallow tropical ones, emit greenhouse gases released by vegetation rotting in reservoirs and carbon inflows from watersheds. In hopes of heading off future tragedies before they occurred, the Commission listed 26 recommendations to guide future dam construction. Some, such as examining cheaper and less destructive options before deciding on a dam, were commonsensical, while others, such as obtaining the consent of affected indigenous people, were matters of social justice.
Just as it tried to do in 1993, the Bank turned its back on its own creation. The Bank took 13 months to issue a response, which touted its own policies, not the Commission's. Briscoe now charged that anti-dam activists "hijacked" the Commission process, and the Bank announced a new "high reward/high-risk" policy of renewed support for large dams -- its first fruit was approval in March of a loan for Laos' Nam Theun 2 Dam. The Bank launched its oil, gas, and mining commission, but this time, presumably having learned its lesson, tried to exert tight control over commission proceedings. Even so, the new commission produced recommendations that the Bank rejected, and once more the Bank abandoned its progeny.
Despite all this, the WCD report has not suffered the fate of most commission reports, to fade quickly into oblivion. Now, five years since its unveiling, few institutions have embraced all the report's recommendations, but it has become a standard, a compilation of best practices, against which less rigorous approaches are measured. Unheeded but not forgotten, it hovers over dam projects as an admonition to dam builders in the name of human decency and environmental sanity.