World Bank Management Rejects Criticisms of Industrial Logging

The debate about the World Bank’s lending on forests is heating up after the Independent Evaluation Group’s review was leaked last week. The IEG report is very critical of the World Bank’s record in the forestry sector, particularly the fact that the Bank’s involvement in forests has failed to address poverty and has not benefited local communities.

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REDD-Monitor posted a copy of the IEG report and predicted that Bank management would attempt to water down the criticism. And the response from the World Bank’s management, “Draft Management Response” attempts to do precisely that. The response from Bank management questions the approach taken by the IEG and rejects some of its findings and recommendations.

Bank management rejects the IEG’s finding that “evidence is lacking that the World Bank‘s support for industrial timber concession reform has led to sustainable and inclusive economic development”. Management argues that the Bank’s attempts to reform concessions were never intended only as “targeted poverty interventions”:

Forest concession reforms were never supported by the Bank with this narrow stand-alone objective in mind. Concession reforms were introduced as one part of a suite of reforms, and it is the impact of these overall economy-wide measures which would be expected to demonstrate ‘sustainable and inclusive economic development.’

Bank management describes forest concessions as “a widely accepted approach to forest management”. But as Greenpeace, Bank Information Center and Global Witness point out in a letter to the World Bank’s Board of Executive Directors, the impact of the concession approach has often been disastrous:

Over the past several decades, the World Bank has been instrumental in promoting legal and policy reforms that support the establishment of large logging concessions in tropical forests in countries such as Cambodia, Cameroon, Democratic Republic of Congo (DRC), Gabon, Indonesia, Laos, Liberia, and Republic of Congo. In many cases, the Bank was critically involved in the establishment of policies that earmarked much of its client countries’ intact forests as logging concessions…. The consequence is that tens of millions of hectares of tropical rainforest that millions of local people depend on for their livelihoods have been and continue to be allocated as industrial timber concessions under Bank-supported forest sector programs.

The letter can be downloaded here (pdf file, 512.9 kB). 

The IEG recommends that the Bank should carry out a comprehensive review of the economic, environmental and social impacts of World Bank support for industrial timber concession reforms. Whether and how the Bank can support sustainable forest management should be based on the evidence in this review.

Management’s response is revealing. “There is a fairly extensive body of literature,” they write. “Management is of the view that an additional review would create little added-value and would do little to inform the development of new operations.” Management argues, in other words, that the evidence supports their argument in favour of continued Bank support of industrial timber concession reform. And therefore there’s no point carrying out a review of the evidence.

In November 1999, the Bank’s Operations Evaluation Department published a review of how the Bank had implemented its 1991 Forest Policy. Korinna Horta wrote about the review’s findings in Multinational Monitor in 2000. The similarities with the IEG report are interesting:

After reviewing hundreds of project documents, the OED study concludes that the Forest Policy has largely been ignored at all levels and that forest-related World Bank lending had done little to alleviate poverty.

Then, as now, there were no incentives for Bank staff to implement its own policies. As Larry Lohmann noted in 1994, “it is often left to local uprisings or NGO publicity to force the Bank to implement its own policies”. Plus ça change…

The World Bank’s Committee on Development Effectiveness was scheduled to meet yesterday to discuss the IEG report. Of course, this being the World Bank, no details of the meeting are available. REDD-Monitor believes looks forward to posting a leaked copy of the meeting notes. Transparency is, after all, a crucial part of addressing corruption.

A few days ago, the World Bank’s President, Jim Yong Kim, gave a speech on “Anti-corruption Efforts in a Global Environment”. He explained that the World Bank needs “to be fighting poverty in areas where the legal framework for combating corrupt and illicit behavior is imperfect and institutions of public accountability may not function well, or even exist at all”. He talked about how the Bank attempts to stop corruption. In other countries, that is. He did not talk about the institutional, structural corruption within the World Bank.