Children Suffer as World Bank’s Borrowers Upend Their Lives

9 February by Michael Hudson , Jocelyn C. Zuckerman

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In the disappearing rainforests of Indonesia, a 9-year-old boy copes with the trauma of eviction.

KEY FINDINGS

- Over the last decade, projects funded by the World Bank World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 180 members in 1997), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

http://worldbank.org
have physically or economically displaced an estimated 3.4 million people, forcing them from their homes, taking their land or damaging their livelihoods.
- The World Bank has regularly failed to live up to its own policies for protecting people harmed by projects it finances.
- The World Bank and its private-sector lending arm, the International Finance Corporation, have financed governments and companies accused of human rights violations such as rape, murder and torture. In some cases the lenders have continued to bankroll these borrowers after evidence of abuses emerged.
- Ethiopian authorities diverted millions of dollars from a World Bank-supported project to fund a violent campaign of mass evictions, according to former officials who carried out the forced resettlement program.
- From 2009 to 2013, World Bank Group lenders pumped $50 billion into projects graded the highest risk for “irreversible or unprecedented” social or environmental impacts — more than twice as much as the previous five-year span.

Revan Pragustiawan loved his home by the river. The little boy’s ancestors built the place in a rainforest on the Indonesian island of Sumatra, using local bark and leaves in the traditional style of the Batin Sembilan tribe. Over the years, his dad had improved the house with wood and a metal roof.

Revan felt safe there, sleeping on a plastic mat huddled up with his family, and spending his days playing with his sister and helping with chores. By the summer of 2011, he was 5 years old, big enough to help his mother fetch drinking water from the river and look forward to helping with a new garden his dad and some neighbors were planning to sow along the riverbank.

Everything changed for Revan on the morning of August 10, 2011.

He was at home when he heard the crack of gunfire. Soon after, as many as two dozen police officers and 20 employees of the palm oil company PT Asiatic Persada pulled up in heavy vehicles.

Tensions had been running high between the company and the residents, who lived on land that Asiatic Persada had leased from the government so it could develop an industrial-scale palm oil plantation. Now the company intended to take action. The men fired shots in the air, called the people in Revan’s hamlet “pigs” and “animals” and ordered them to “run,” residents later claimed.

Revan fled with his family through the woods and down to the river, turning back to catch glimpses of bulldozers moving in. As the machines reduced his home to a pile of sheet metal and wood, Revan cried uncontrollably, tears streaming down his face. He was so terrorized by seeing his home destroyed, his dad recalls, he began speaking gibberish.

By day’s end, the men had destroyed all of the hamlet’s 35 homes. Revan’s community was gone, swept aside amid Asiatic Persada’s drive to satisfy its parent company’s growing appetite for palm oil. It was a demand fueled in part by more than $145 million in loans and guarantees Guarantees Acts that provide a creditor with security in complement to the debtor’s commitment. A distinction is made between real guarantees (lien, pledge, mortgage, prior charge) and personal guarantees (surety, aval, letter of intent, independent guarantee). from the World Bank Group that helped the corporate parent expand its planting and processing operations.

Revan’s story is a worst-case example of the trauma that children can suffer when they live in the path of initiatives sustained by money from the World Bank Group, the multinational financial giant that styles itself as an anti-poverty champion.

Evictions, loss of family income and other hardships associated with dams, roads and other projects can be especially harmful to young people. Studies show that children whose families have been forced to relocate are at greater risk of disease, hunger and loss of education.

The bank’s social and environmental safeguards forbid sudden, strong-arm evictions. Families targeted for “involuntary resettlement” must be installed in new homes or compensated so their living conditions are as good or better than they were before.

But as the International Consortium of Investigative Journalists, The Huffington Post and other media partners revealed in April, the bank is failing to enforce those rules, with devastating consequences for adults and children who live on or near land targeted for development.

Along India’s Gulf of Kutch, a study by human rights activists found, pollution from a coal-burning power plant backed by the World Bank Group damaged farms and fishing grounds, forcing many families to pull children from school so they could work to make up for lost income. This left adolescent girls who had to go to work as domestic servants vulnerable to sexual exploitation, the study said.

In Cambodia, children watched as their homes were demolished by a wave of evictions in an area of Phnom Penh that was supposed to be protected by a World Bank–financed land management program. As part of a presentation organized by children’s rights advocates, one child whose home was destroyed wrote to World Bank Group President Jim Yong Kim, asking him not to “sit quietly while there are human rights violations with World Bank funds.” Another young evictee, a preteen girl, wrote: “They beat me even though I am a child! I lost all chance of education.”

The World Bank Group declined repeated requests for comment for this story.

“[Children] frequently develop post-traumatic syndromes, including nightmares, anxiety, apathy and withdrawal.” – U.N. report on forced evictions

In public statements, it says its work in Cambodia, India, Indonesia and other countries has helped children by improving education, boosting health care for newborns and reducing child mortality. From 2003 to 2013, the bank’s fund for the poorest countries ensured immunizations for nearly 600 million children.

Yet the bank is also increasing its financial support for dams and other big-ticket initiatives that are the most likely to displace large numbers of people—even as it has acknowledged that it often fails to track the repercussions for people on the ground.

The World Bank’s 468-page guidebook on handling resettlements includes a page and a half outlining “good practices”—such as monitoring school enrollment—that borrowers can embrace to help reduce harm to children.

Human rights groups say guidelines aren’t enough—they want clear rules about what steps the bank and its borrowers should take to protect children. A 2012 letter from more than 75 advocacy groups around the world urged the bank to strengthen its safeguard rules by requiring that project planners do detailed assessments of likely impacts on children, “including the potential for violence and exploitation.”

Advocates were disappointed in July when bank officials released a new draft of a planned overhaul of safeguard policies covering loans to government-sponsored projects. The draft says the safeguard standards aspire to “remove barriers against those who are often excluded from the development process, such as women, children, youth and minorities.” But it includes no specifics about how children are to be protected if their families are relocated.

“Just considering children isn’t enough to solve any problems,” says Elana Berger, manager of the Child Rights Program at the Bank Information Center, a human rights group that monitors the World Bank’s practices. “You have to have a plan to address their needs.”


‘Still afraid’

It is a sweltering afternoon in May. Revan and his father sit in the cramped shack where the family now lives. Revan’s dad, a goateed 35-year-old named Irsan Saiful, built the structure from planks salvaged from the wreckage of their old home. After a flurry of bad publicity about the 2011 evictions, the company allowed the family and other community members to rebuild in an area about a mile away from their previous homes inside the 68,000-acre palm oil concession.

Revan is now 9 years old. But he seems far younger. His shorts, safety-pinned at the waist and falling to his knees, threaten to swallow his spindly body, and the lid of his baseball cap obscures his round, watchful face. Revan’s dad raises his hand to his heart as he talks about the evictions’ emotional toll.

For three days, the family had nothing to eat. Along with Revan’s home, the wrecking crew destroyed clothing, food, cooking utensils, marriage records, even the little boy’s birth certificate.

In the weeks after they were evicted, Revan and his family lived under a tarp provided by the government. Humanitarian groups contributed clothing and food. Some of the families were compensated for the damage—Revan’s family received roughly $1,000—in exchange for agreeing to rebuild farther from the river. Police remained in the area for weeks, firing guns into the air daily and harassing the evictees, the Batin Sembilan say.

As his dad talks, Revan is sitting so close he’s nearly in his father’s lap. It’s been four years, and he is still a worried, fearful child, unable to get over the shock of watching his home get demolished. He misses the hours he would spend playing alongside the river with his friends, and he still mutters words like “evil” and “evictors” whenever he sees a security guard or policeman.

“My son is abnormal,” Irsan says sadly. “If someone snaps a little, he is still afraid.”

The evictions have taken a toll on all the children of the Batin Sembilan community. Asked about the events of August 2011, a 12-year-old named Aldi says he can’t remember a thing.

“Trauma,” his aunt offers by way of explanation.

The United Nations’ Office of the High Commissioner on Human Rights says forced evictions can have long-lasting psychological impacts on children: “They frequently develop post-traumatic syndromes, including nightmares, anxiety, apathy and withdrawal.”

Along with psychological damage, relocations and big industrial projects can affect children’s physical health and educational progress, research shows.

In the Akosombo region of Ghana, for example, the infection rate among schoolchildren for “snail fever”—a water-borne disease that can cause anemia, learning disabilities and colon damage—was 5 percent before construction of a World Bank–backed dam but grew to 90 percent after the dam was finished in the 1960s, according to environmental scientists who studied the project.

Michael Cernea, a former World Bank official who developed the bank’s first resettlement safeguards, has noted that relocation “often interrupts schooling and for some of these children it means that they never return to school.”

One survey found that nearly half of displaced families in the Indian state of West Bengal had pulled their children out of school because they needed them to work to make up for the economic blows from the loss of their land.

Berger, the children’s rights advocate, says even temporary disruptions in schooling, family income and living conditions can have devastating effects on a child’s development.

“Every year a child loses, you can’t get it back,” she says.


Before and after

On Sumatra, Revan’s parents and other adults who grew up before the proliferation of industrial plantations recall childhoods that were different from those that Revan and other young Batin Sembilan are now experiencing.

“I played in the forest,” says the area’s tribal chief, a 38-year-old named Damsi (Indonesians often go by a single name). “I used to find wood and do farming. I collected sap that we used for paint. We used to collect rattan for building.”

The rainforest was lush with coconut palms, papaya trees, jackfruit, wild mango. The Batin Sembilan hunted deer, cultivated vegetables and caught catfish and crabs in the river. As a teenager, Revan’s dad grew cocoa, coffee and chilies.

Things began changing dramatically for the Batin Sembilan in the early 1980s. The semi-nomadic tribe lost tens of thousands of acres to a World Bank–funded “transmigration” scheme that resettled millions of Indonesians from the archipelago’s crowded islands to less-populated ones like Sumatra. New farms were created and given to the settlers, encroaching on lands where tribal people had lived, hunted and planted for generations. “Transmigration had a major negative and probably irreversible impact on indigenous people,” a World Bank internal review later concluded.

In the early 1990s the bank advised and financed Indonesia’s forest policy, which over the past quarter century has resulted in the loss of roughly one third of the country’s forest cover to timber, palm oil and other industries. Two-thirds of the forested area of Jambi—the province where the Batin Sembilan are primarily located—was signed over to forestry and agribusiness interests.

In recent years, Wilmar International Limited, Asia’s largest agribusiness, has become a big player in Sumatra’s palm oil fields. The company controls roughly 40 percent of the world’s trade in palm oil, which is used in cookies, toothpaste, lipstick, ice cream and countless other goods—at least half of all products on U.S. grocery shelves.

Between 2003 and 2008, the World Bank Group’s business-lending unit, the International Finance Corporation, supported Wilmar’s palm oil business with four investments—two loans totaling $62.5 million and two financial guarantees totaling $83.33 million. In 2006, amid that infusion of support from the IFC, Wilmar bought Asiatic Persada.

After the purchase, Wilmar backed out of a promise by Asiatic Persada that it would set aside more than 1,500 acres within its concession for use by the Batin Sembilan. Wilmar instead proposed to establish a cooperative on what would remain company-managed land 18 miles away from Revan’s village, to be shared with other indigenous groups. The Batin Sembilan rejected the offer, in part because of fears that they’d face conflicts trying to share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. limited territory with other groups.

Tensions between Wilmar and residents escalated, with the company eventually forbidding the Batin Sembilan from collecting fallen oil-palm fruits—the sale of which had been among the few sources of income left to them. In July 2011, the company called in government police. A month later, after a tussle with a resident accused of stealing fruit, the bulldozers rolled in. Work crews flattened Revan’s village and two other settlements, evicting 83 families in all, including dozens of children.

Wilmar declined to answer questions about the evictions or other issues relating to its operations, explaining “it is no longer our place to comment on this case” since it sold Asiatic Persada two years ago. In a statement released two weeks after the 2011 evictions, the company referred to the residents of the hamlets as “illegal occupants” and asserted that “no one has been forcibly removed from their land.”

“These incidents are unfortunate,” the statement added, “but we firmly believe that just as the local communities are entitled to human rights, law enforcement personnel must enforce law and order to underpin those rights, as well as protect themselves. Similarly, Wilmar has a duty to protect our employees from risk and harm.”


No sanctuary

The landscape that Revan and many other Batin Sembilan kids now call home amounts to an endless sea of oil palm.

The native flora is all but gone. Everything here, including the dump trucks that ply the rutted roads around the clock, is dwarfed by the massive fronds that hang over the place like the wings of some giant, prehistoric bird. The rumble of the trucks and other equipment used for transport and maintenance often scares the children, a reminder of the bulldozers that destroyed their homes.

Amid the nutmeg-hued soil and the muted green of the trees, the only contrast in color comes from the shiny orange oil-palm fruits themselves, which glow from within the spiky palm bunches piled at intervals along the side of the road.

The area’s once-temperate weather is a thing of the past. The oil-palm tree, which consumes roughly 80 gallons of water a day, soaks up moisture from the ground like a giant sponge. The practice of clearing plantation land leads to warmer local water temperatures, according to a 2014 study by researchers from Stanford University and the University of Minnesota. The lack of forest canopy means that air temperatures do the same, locals say.

During the evictions four years ago, the few fruit trees that remained in Revan’s village, which had been planted by the community’s ancestors, were dug up and tossed in the dirt.

Now Revan and other children eat mostly cassava leaves and government-issued rice. The single shop that operates near the communities inside the concession rarely has fruits or vegetables. Instead, brightly colored packages of candy and fried snacks share the shelves with multiple brands of clove cigarettes.

Revan’s mom occasionally gets fish from the river. Locals say that one hardy species manages to survive in the tea-colored water, thick with runoff from the plantation and contaminated, they claim, with fertilizer and pesticides. Once a month or so the family cobbles together enough cash to buy meat or eggs.

Revan’s family continues to use the river for bathing, and to wash their clothes. Getting there means spending money on fuel for their motorbike—it’s too far to walk—and driving past the site where their house once stood, now overgrown with tall grass. A sign nearby warns that “damage to this land” will result in five years’ imprisonment and a fine of up to 5 billion rupiah, or more than $350,000.


Downplaying risks

Indigenous peoples who have been forced from their homes because of the expansion of Wilmar’s plantations turned to the World Bank Group for help, filing a series of complaints with its Compliance Advisor Ombudsman, which deals with issues involving loans to corporate clients.

The complaints charged that the World Bank Group’s private sector arm, the IFC, had ignored its own social safeguard rules, allowing the company to take indigenous peoples’ traditional lands without due process or consultation. This has created social conflicts that triggered “repressive actions” by corporate and government security forces, a 2007 complaint said.

The ombudsman unit later found that IFC officials had downplayed the risks of their investments in Wilmar. The IFC was aware for more than 20 years that Indonesia’s palm oil sector was damaging the environment and disrupting the lives of local populations, but it gave in to “commercial pressures” to ignore problems on plantations within Wilmar’s supply chain, according to a 2009 report.

By early 2012, the ombudsman unit had helped negotiate a series of agreements that reduced police presence on the Sumatran concession and arranged for compensation to be paid to Revan’s family and others who had lost their homes. In April 2013, however, Wilmar sold off its stake in Asiatic Persada to a pair of companies, one of them owned by the younger brother of Wilmar’s co-founder. The new owners withdrew from the negotiations, effectively voiding all agreements.

The ombudsman later issued a report asserting that the sale “had direct and indirect adverse consequences for the affected communities.” The case, which opened the IFC to criticism that its safeguards could be evaded by a change of ownership in any offending parties, remains under investigation.

Asiatic Persada has resumed its aggressive tactics within the concession. In December 2013, it evicted 150 families and destroyed their homes, in a scene reminiscent of the 2011 evictions, according to reports by local and international news organizations. In March 2014, one resident was beaten to death and five injured during another clash with security personnel on the Jambi concession.

Repeated attempts to get a reply for this story from Asiatic Persada or its new owners were unsuccessful.


‘We belong here’

Some families have moved off the Jambi concession, tired of the fights and the locked-down atmosphere on the inside. “We have more peace of mind outside the gates,” said a woman named Rogaya, who relocated with her husband and three children to a relative’s home in a nearby village.

Revan’s family has stayed close to its old home place with the hope of maintaining the tribe’s—and children’s—traditional connections to the land.

For centuries, the Batin Sembilan have raised their sons and daughters to revere the soil, water and plants and to pay respect to the spirits of ancestors believed to inhabit the tribe’s territory.

Revan’s dad, Irsan, worries his son and daughters are losing their identities as indigenous children. Moving away would only make that worse. He says that even if the company offered what for him would be a fortune—200 million rupiah (roughly $15,000)—it wouldn’t be enough to drive him from the lands where the Batin Sembilan have given birth and died for as long as anyone can remember.

“I don’t care about how much the house costs. I care about the fact that our ancestors left this for us,” the father says. “We belong here.”

They are no longer alone. The company’s security guards are a constant presence on the maze-like roads that snake through the rows of oil-palm trees. Residents are jittery about engaging with visitors. As the sun begins to set, they nervously shoo people off company property. They suggest that a reporter and photographer leave immediately, fearing that all might be in physical danger if the guards were to catch them talking.

“There is a lot of intimidation,” Revan’s dad says. “I feel frightened and confused.”

His son hopes one day that he and his parents and sisters can regain their land and reestablish their lives by the river. As soon as it’s safe, Revan intends to help his dad dismantle the worn, mismatched planks of their new home in the relocation settlement so they can nail them back together on the place where his mother was born.

Yes, Revan says softly, he’s still angry with the palm oil company. But he knows his options for the future are limited. So he hopes one day to get a job working at the plantation.

Maybe as a guard.

“If I am security,” he says, “I will feel less scared. I might be able to carry a gun.”

This report was produced in collaboration with The Food & Environment Reporting Network, an independent, non-profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. , investigative news organization.


Source : ICIJ

Author

Michael Hudson

Distinguished Research Professor University of Missouri-Kansas City and Professor, Peking University


Other articles in English by Michael Hudson (4)

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