Big lender - Q & A with the World Bank17 August 2004
When it comes to investment in the water sector, quality of World Bank lending is just as important as quantity, Alessandro Palmieri tells IWP&DC
FOR the past seven years, Alessandro Palmieri has played a key role in the World Bank as lead dams specialist in the Quality Assurance and Compliance Unit (QACU). This position gives him responsibility for Safety of Dams, one of ten safeguard policies which are key to the Bank’s main aim of cutting world poverty in a sustainable manner.
The QACU has a broad scope and also works to ensure that Bank-funded projects meet criteria in the areas of Environmental Assessment, Natural habitats, Forests, Pest management, Cultural property, Involuntary resettlement, Indigenous peoples, Disputed areas and International Waterways.
In the case of new dams, Operational Policy (OP) 4.37: Safety of Dams demands that design and construction are carried out by experienced professionals and that the borrower adopts and implements dam safety measures through the life of the project. The policy also applies to existing dams, where dam safety should be assessed and appropriate measures implemented if required.
The Bank’s OP 4.37 recommends discussion with the borrowers about any measures that could help strengthen the institutional, legislative and regulatory frameworks for dam safety programmes in those countries.
Recently, Palmieri has also taken on the responsibility of representing the World Bank on the Steering Committee of the United Nations Environment Programme Dams and Development Project (UNEP-DDP).
This month, he takes some time out from his busy schedule to tell IWP&DC about his views on the most important of the world’s dam projects, future World Bank spending in the water sector, the problems with the World Commission on Dams guidelines and why he thinks the second phase of the UNEP-DDP needs more participation from the governments of developing countries.
Q. Some 16% of World Bank lending over the past decade went to water related services. Is this figure likely to increase?
A. This is what the February 2003 Water Sector Strategy demands. There are many competing demands, and the ultimate World Bank objectives are poverty reduction and meeting the millennium development goals. My expectation is that lending in the water sector will increase, with a parallel increase in quality of lending.
Q. How does a borrower apply for World Bank assistance?
A. The Country Assistance Strategy (CAS) is the central framework for designing assistance programmes for borrowers from the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD).A CAS is developed for each country the Bank works with. It identifies the key areas where the Bank's assistance can have the biggest impact on poverty reduction. A CAS will take into account the priorities of the country's government and key stakeholders, the performance of its portfolio in the country and its creditworthiness. Issues such as what causes poverty, the characteristics of the poor, the state of institutional development, implementation capacity and governance are also factored into the CAS.From this assessment, the level and composition of financial and technical assistance that the Bank seeks to provide to the country is determined. The assistance strategies are designed to promote collaboration and coordination with the Bank's partners. Country assistance strategies can be consulted on the World Bank website (www.worldbank.org).
Q. Why were the World Bank’s environmental and social safeguard policies established?
A. The [Bank’s] safeguard policies are a cornerstone of its support to sustainable poverty reduction. The objective of these policies is to prevent and mitigate undue harm to people and their environment [during] the development process.
Q. What are your main responsibilities?
A. Colleagues who manage operations – projects, programmes, etc. – that present dam safety aspects are responsible for the application of the Safety of Dams policy OP 4.37. My role is that of advising on critical projects, training – both internally and externally – and monitoring compliance.There are about 130 active projects with a smaller or larger dam component. That component can entail the construction of a new dam, rehabilitation of existing dams, or simply a safety assessment of an existing dam, as required by OP 4.37.
Q. Which have been the most important or challenging dam projects?
A. The World Bank has co-financed the construction of over 400 large dams around the world. All large dams are challenging projects. Since many stakeholders are involved in them, the challenge depends very much on [the] individual stakeholder perspective.Among completed projects, I think Yacireta' (Argentina-Paraguay) represented a challenging project from many stakeholder perspectives.[As] projects of particular professional interest, I would mention Tarbela (Pakistan); Xiaolangdi, Shuikou and Ertan (China); the Lesotho Highlands Water Transfer scheme (Lesotho-South Africa). I would add to the list Gilgel Gibe (Ethiopia), Gazi Barotha (Pakistan) and Naptha Jakri (India).Tarbela, together with Mangla represent, the backbone of the Indus Treaty between India and Pakistan. Xiaolangdi is one of the few examples that I know of a large reservoir with highly positive environmental impacts, in addition to having been completed one year ahead of schedule, and with savings of US$700M. Shuikou is another project which offers an example of successful resettlement. The Lesotho Project is an outstanding illustration of regional cooperation on multi-national waters and of benefit sharing.A ‘special’ project that I would like to mention is the Loess plateau in China. It is a watershed management project, not a dam scheme, although it included [the] construction of many sediment control dams. The effects of the Loess Plateau Project are of key importance to control the Yellow river sedimentation process.To my knowledge the Loess plateau project is unique in terms of the scale of impact. Extending over an area the size of Belgium, the project demonstrated commercial viability of catchment management associated with increasing agricultural productivity and income, while reducing sediment inflow to the Yellow river system by 29Mt annually.
Q. What kind of working relationship do you have with borrowers?
A. [We provide] training and capacity building, and [advice] on selected operations. [Building] relationships with borrowers always takes place through the [Bank’s] country units.
Q. What do you demand from the borrower to ensure they comply with the Bank’s safeguard policy on Safety of Dams?
A. For new large dams, or the rehabilitation of existing high hazard dams, the Bank requires:
• Reviews by an independent panel of experts throughout [the] preparation, design [and] construction [stages] and the start of operation;
• Preparation and implementation of detailed plans including an emergency preparedness plan;
•Pre-qualification of bidders;
• Periodic safety inspections after the dam is completed.For existing dams, the Bank requires the borrower to arrange for one or more independent dam specialists to:
• Inspect and evaluate the safety status of the existing dam, or dam under construction;
• Review and evaluate the owner’s operation and maintenance procedures;
• Provide a written report of findings and recommendations for any remedial work or safety-related measures.
Q. What are the problems with the 26 World Commission on Dams (WCD) guidelines?
A. The World Bank conducted a detailed comparison of the 26 WCD guidelines vis-à-vis the Bank’s safeguard policies. Although there was much in common, there are several important differences.
First, while there is agreement on the importance of the rights of affected and indigenous people, in the judgment of the World Bank, adoption of the WCD principle of ‘prior-informed consent’ amounts to a veto right that would undermine the fundamental right of the state to make decisions which it regards as being in the best interest of the community as a whole.
Second, while there is agreement on stimulating good-faith negotiations on international rivers, World Bank experience (and its policies) are based on proactive engagement rather than disengagement from countries who are not already engaged in good faith negotiation with their neighbours on international waters (as advocated by the WCD).
And, third, while there is agreement on the importance of consultation and public acceptance, experience suggests that the multi-stage, negotiated approach to project preparation recommended by the guidelines is not practical and would virtually preclude the construction of any dam.
The World Bank is committed to support its borrowers in developing and managing priority hydraulic infrastructure in an environmentally and socially sustainable manner. In doing this the Bank believes that the WCD ‘core values’ and ‘strategic priorities’ are appropriate principles, which are consistent with current Bank practice and policies.
Finally, it is pertinent to note that a UNEP-led WCD follow-up process (in which the World Bank is participating) is proceeding on a basis quite similar to that articulated by the World Bank: – acceptance by all stakeholders of the core values and strategic priorities but recognising that there is not a consensus among stakeholders on the 26 guidelines.
Q. The World Bank is part of the Steering Committee of the UNEP-DDP. How has the Bank been involved in the progress of this project?
A. The DDP was launched in November 2001 by the UNEP as a follow-up to the World Commission on Dams. It had a two-year mandate with [around] US$3.4M [in] funding from bilaterals; Germany, The Netherlands, UK, Sweden and Switzerland. [The] mandate ended [in] July 2004. A second, two-year phase is likely to be supported by the same donors.
Involvement gives us the opportunity to follow the dialogue, and of being involved in multi-stakeholder processes. I represent the Bank in the 13-member Steering Committee that spans from industry representatives all the way to [the] International Rivers Network.
The weakest aspect of the DDP has been the lack of representation of governments of developing countries with significant dam building programmes. We have reiterated this need relentlessly, and UNEP has made some efforts to engage countries like Brazil, China, India, Iran and Turkey.
However UNEP finds itself in a situation in which it has to listen to very diverse stakeholders, and some of these clearly want to keep governments out of the process. Without government involvement, the DDP can no longer be called a multi-stakeholder process. We believe that the second phase should start only when a meaningful number of relevant agencies from developing countries with significant dam building programmes are willing to send representatives to attend the Steering Committee and the Forum meetings.
The World Bank is prepared to remain engaged in a possible second phase once the process becomes a truly multi-stakeholder one, which includes the government category that has been largely absent to date.