Message-ID: <Pine.SOL.3.91.970219174941.482B-100000@fox.ksu.ksu.edu> Date: Wed, 19 Feb 1997 17:50:27 -0600 From: kerry miller <mailto:astingsh@KSU.EDU> Subject: Politics Threatens World Bank & IDB Probe Of Yacyreta Dam (fwd) To: mailto:DEVEL-L@AMERICAN.EDU
** Written 9:17 PM Feb 17, 1997 by econet in cdp:headlines ** /* Written 3:56 PM Feb 12, 1997 by mailto:irn@ax.UUCP in env.dams */ /* ---------- "ENVIRONMENT-LATIN AMERICA: Politics" ---------- */From: Glenn Switkes <irn>
Copyright 1997 InterPress Service, all rights reserved. Worldwide distribution via the APC networks.
*** 07-Feb-97 ***
Title: ENVIRONMENT-LATIN AMERICA: Politics Threatens World Bank, IDB Dam Probe
by Abid Aslam
WASHINGTON, Feb 7 (IPS) - Thousands of Paraguayans who live in the shadow of the Yacyreta dam and whose homes have been lost to the rising waters of the Parana river, now face the threat that their hopes of redress will drown in a maelstrom of political intrigue.
Dam construction has forced some 5,000 Paraguayans to leave the river's edge, many for sub-standard housing and a jobless future. As many as 50,000 face forced resettlement when the dam is completed some time in the next three years.
The residents of Encarnacion, Paraguay's third-largest city, last September asked Yacyreta's financiers -- the World Bank and Inter-American Development Bank (IDB) -- to investigate the dam, provide fair compensation and basic services in relocation areas, and guarantee that the river will not be raised any further until all their demands have been met.
But well-placed officials and analysts here say the executive boards of the two agencies appear to be paralysed by politics over the dam, which is to be shared equally by Paraguay and Argentina and located on their common border.
Representatives of Argentina, which alone has borrowed from the banks for the dam's construction, are said to be dead set against full-scale investigations.
Argentina, whose relationship with its smaller neighbour has been marked by border disputes, says it is uneasy with the fact that the people behind the complaint remain anonymous. Buenos Aires points out that the grievances were submitted by a Paraguayan non-governmental organisation (NGO) on behalf of anonymous claimants. (Citing ''the potential for retaliation'', the claimants had asked that their identities be revealed only to the World Bank's independent inspectors.)
The World Bank's executive directors Thursday failed to agree on a full-scale probe. In coming weeks, Bank president James Wolfensohn reportedly will seek a compromise between the Argentines and directors who favour a probe, raising the possibility of a limited investigation.
A similar impasse may have been reached at the IDB, whose directors met Jan. 15. But they also are said to be burdened by inexperience, this being their first inspection request.
Between them, the banks have lent some 1.6 billion dollars since 1979 for Yacyreta. Each agency last October began separate preliminary reviews to determine the merit of the allegations, contained in a written complaint submitted by Sobrevivencia, the Paraguayan affiliate of Friends of the Earth.
Independent inspectors examined agency managers' responses to the complaint and visited the dam itself. Based on their findings, the World Bank's independent inspection panel and IDB president Enrique Iglesias recommended that their respective agencies' directors authorise full investigations.
The complaint alleges the agencies failed to take a number of steps: assess the environmental and social damage Yacyreta would cause; mitigate the harm done; consult local residents in drawing up resettlement plans for communities flooded by the dam; supervise and hold its borrowers to contractual obligations; and withhold money when it became clear the terms of their loans were being violated.
The World Bank's managers ''do not agree that the problems which have occurred and their possible consequences for the local population are the result of any alleged management violation of the Bank's policies and procedures,'' says a copy of their 27-page response to the complaint obtained by IPS.
The managers defend their continued financial disbursements in the face of contractual violations on the grounds that the decision was, after all, theirs to make.
They invoke ''the essential principle of Bank operations that the exercise of available legal remedies is not a requirement but a discretionary tool, to be applied only after other reasonable means of persuasion have failed.'' A Bank audit report, however, shows that many problems have persisted since the early 1980s.
IDB officials, too, acknowledge the problems but deny responsibility, pointing out that their latest loan, which remains undisbursed, was intended to mitigate some of the environmental and resettlement problems.
Both banks lay the blame squarely at the feet of the Entidad Binacional Yacyreta (EBY), the binational commission that operates the dam.
EBY is an easy target. Under its stewardship, Yacyreta became what Argentine president Carlos Menem, who took office in 1989, called ''a monument to corruption.''
Eleven years late and billions of dollars over budget, Yacyreta has become such a problem for both countries, that politicians have sought to extricate themselves from the mess by selling the dam to private investors or granting a concession to private operators to take it over and sell the electricity it generates.
Producing that electricity likely will cost three times the going rate, however, a World Bank audit report says.
Yacyreta also has been plagued by technical problems. And any prospective owner or operator likely will inherit the political heat symbolised by the complaint. Nevertheless, private owners might not be legally obliged to make amends for their predecessors' sins, World Bank officials concede.
Were the dam sold, however, the banks would not have to answer the charges against them. Whatever happens, they are guaranteed repayment.
Perhaps for this reason, World Bank managers consider privatisation plans ''fundamentally sound, provided (EBY) takes the required measures to implement the environmental and resettlement activities associated with raising the reservoir level'' further, according to their response to the complaint.
The Parana river has risen by some three metres since construction began. The water level will be raised by another seven metres when Yacyreta is completed, some time between 1998 and 2000, World Bank documents show.
As a consequence, some 1,650 sq. kms of land -- including two towns, the homelands of indigenous people, and wildlands that are home to unique species -- will be inundated, the complaint states. (END/IPS/AA/YJC/97)
Origin: Washington/ENVIRONMENT-LATIN AMERICA/ ----
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