The Responsibility of Development Banks: Assist Communities Affected by Bank Projects First

By Alexandre Andrade Sampaio

”A house in the Jardim São José II favela, to where people were forcibly removed by an IDB Group’s project in São José dos Campos. More than a dozen people currently reside in the house." Credit Cosme Vitor

Covid-19 is a crisis for everyone, but its devastation is experienced more acutely by some more than others.

Communities adversely affected by projects recently funded by development finance institutions (DFIs) have been put in such a vulnerable state that they now struggle to gather the most basic items for survival. In our work to support their demands and priorities, the International Accountability Project (IAP) talked to community members and, with them, collected information on what is missing from their daily lives: food and water sufficient for their nutrition, hygiene items from soap to toothpaste, basic clothing for children and the elderly to live with some dignity and health, means of communication to maintain an informed and cohesive community…

The list goes on.

Recognizing the link between the projects financed by DFIs and the dire situation of these communities during the current health crisis is crucial.

Isabel Zuleta, whose community has been impacted by the mega hydropower project Hidroituango in Colombia, financed by the Inter-American Development Bank (IDB) Group, makes the connection crystal clear:

“The dam and the landslide it caused destroyed our homes, so it’s impossible for us to stay safe. Our communities are starving, as the dam destroyed our livelihoods. The landslides caused by the Hidroituango destroyed our hospital and what’s left in terms of health facilities in the municipalities is not enough for all of us, especially now that the dam constructors waited until the contamination of hundreds of workers in order to stop the construction.”

Artwork with Isabel standing with the river Cauca and the environment it sustains. Credit Rios Vivos Antioquia

While Isabel’s community is in the middle of a complaint process before the MICI, IDB Group’s independent accountability mechanism, the remedy resulting from such a process remains far from sight, and her people need to eat and live today!

To date, the Early Warning System, an access to information initiative that monitors all projects proposed by 15 DFIs, has tracked three COVID-19 response projects for Colombia — the one proposed by the IDB Group is directed at assisting small and medium-sized enterprises. This project purports to use the US$100 million loan to support the government’s “Colombia for Everyone” program, however, based on the project description, not a cent will find its way from the Bank to the communities its investments have impacted. It is important to note that the other two projects, both from the World Bank Group, also come to the much needed assistance of business enterprises. They amount to more than US$1 billion, and only one of them includes nutrition of the population as one of the priorities. Isabel and her colleagues can only hope that at least a fraction of these enormous sums find their communities on the dammed shores of their river.

Cosme Vitor of the Favelas’ Association of São José dos Campos does not tire of demonstrating, now and again, the connection between the communities they assist which face an impoverished situation and the IDB Group’s São José dos Campos Urban Structuring Program and Neighborhood Improved Inhabit Brazil. The first has already resulted in three separate complaints before the MICI and the second in yet another.

“First the bank forcibly removed people from their lands saying it was an area of risk. This resulted in the gentrification of the area and installation of companies in some of the lands where once families thrived according to the best of their abilities. Some of these families continued to fight in the courts for their old lands and while the IDB knew about that, it financed a road project to cement over their dreams of going back.

The Bank is complicit with what is happening to us! It was already hard before this crisis, but with COVID-19, the difficulty has increased substantially. The little we had left, is already gone.”

Angela Silva, also a member of the Favelas’ Association of São José dos Campos, is equally adamant:

“The communities affected by the IDB are in need of assistance due to the precarious situation they find themselves in because of the Bank’s project. People are either starving because they do not want to be contaminated, or dying because they have to work for food and are contaminated. The privatization of our health system also means little access to us, the poor. It makes no sense! The economy can only exist if we live!”

Unfortunately, the communities Angela and Cosme assist may have to continue to choose between starvation and contamination for a while longer. The Early Warning System has only tracked two projects as COVID-19 responses for Brazil so far, and both of them come from the IDB-Group to private companies’ assistance.

Caleta Los Patos, Chile, where some people affected by a prospected IDB Group project live. Credit Sustentarse

The communities we work with in Chile are not faring much better. The members of the Asopesca Tocopilla Association are traditional fisherfolk communities who are facing the prospect of the Radomiro Tomic desalination plant — which was recently pre-approved by the IDB Group and is now on hold- right on the shores they use as the primary source for their livelihood. This prospective plant threatens their cultural way of life, and has been causing severe emotional distress from the moment project plans were announced. The irony of this matter deserves attention: the US$1 billion desalination plant will direct clean water to a mining project miles away, while the fisherfolk community faces, amongst other issues, a shortage of clean water to drink, cook, and survive. Although a complaint has also been filed by Asopesca Tocopilla to the MICI, it was dismissed on procedural grounds since the project has not yet been approved by the IDB Group. Truly, a missed opportunity for the IDB Group to initiate an intermediation process that could prevent conflict, guarantee communities’ participation and, most importantly, prevent the suffering of numerous traditional fisherfolk families.

Herminia, a member of the Asopesca Tocopilla Association, thanks God that the virus has not yet contaminated her colleagues, but calls attention, “our situation is chaotic.” She clarifies, “it’s not that we want to ask for assistance, it’s that we need it. More than anything, our children and our elderly need it! Prices are rising and we cannot afford to survive. Please tell people to help us and we will help them back! We are very thankful for those that help us, that send us even a little sand grain.”

For now, the communities from Asopesca Tocopilla will have to be content with the sand found on the ocean shores they fish, as the Early Warning System has only tracked one COVID-19 specific investment coming to Chile: none other than the IDB Group sending US$100 million to a private energy distributor company.

While the COVID-19 crisis is global and impacts everyone, DFIs that cause communities to face extreme circumstances should be the first to assist these communities, and assist them first!

While communities’ rights are not for sale and their recovery, if ever possible, is not a simple matter of financial support, the least that can be done is prioritize and support their survival through this crisis. This logic also applies to private companies requesting DFI investment, urging them to think twice before taking public money away from vulnerable communities, and for States to prioritize their wellbeing — especially when receiving financing from DFIs whose investments facilitated the extreme situation faced by these communities today.

The communities mentioned above have compiled lists of their immediate needs, in order to assist in their survival.

We urge the IDB Group, and other DFIs in their respective situations, to provide immediate relief and reach out to these communities, to better attend to their medium and long-term needs and priorities.

The Early Warning System ensures local communities, and the organizations that support them, have verified information about projects being proposed at major development finance institutions and clear strategies for advocacy — ideally before funding is decided. For more information see: https://ews.rightsindevelopment.org/

Alexandre Andrade Sampaio is Policy and Program Coordinator for the International Accountability Project for Latin America and the Caribbean.

IAP is a human and environmental rights organization that works with communities, civil society and social movements to change how today’s development is done.