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World Bank water strategy is reactionary, dishonest and cynical
Rich Pickings for the Dam Lobby, Harm for the Poor and Environment
International Rivers Network (IRN)
February 27, 2003

Patrick McCully, Campaigns Director of International Rivers Network says:

"The strategy is a reactionary, dishonest and cynical document. If put into effect it would provide rich pickings for the Bank staff's friends in the big dam lobby and private water companies but only worsen poverty, water shortages and the dire condition of the world's rivers."

As the world's largest development institution the World Bank helps set the agenda for other donors and governments. The WRSS could thus do great harm not only through setting priorities for World Bank lending, but also through influencing other institutions.

Reactionary: Over the past decade water managers and analysts have been slowly moving away from prioritizing water and hydropower megaprojects. They have increasingly realized that focusing on huge water projects for water supply, flood control and electricity is expensive, frequently ineffective and socially and environmentally damaging. The new approach to meeting water needs prioritizes small-scale, affordable technologies such as harvesting rainwater and recharging groundwater, flood management through measures such as better warning systems, wetland restoration and flood shelters, and reducing demand for water through better management and improved technologies.

The WRSS shows that the World Bank is seeking to turn back the clock on water management. The WRSS promotes the megadam-based strategies of the second half of the 20th century as the solution to the water problems of the 21st century - problems often caused by dams and related megaprojects.

The WRSS states that 80% of Bank water sector lending in the past decade went to infrastructure projects. Yet it implies that management of water supplies receives too much attention from the Bank in comparison with building infrastructure.

Dishonest: Shortly before the release of the report of the World Bank-sponsored World Commission on Dams in November 2000, Bank management told the Commissioners that the WRSS would be the main vehicle in which the Bank would address their findings and recommendations.

Yet the WRSS ignores the Commission's findings on the poor economic performance of dams and their strongly negative social and environmental impacts, and the availability in many cases of better alternatives.[1] In the few cases where the WRSS mentions the WCD's findings it seriously distorts them. It twists criticisms of the Bank's role in dam building into praise, and criticisms of the poor implementation of large dam projects (almost all of which have been built in the public sector) into support for private sector dams.

The WRSS states that the Bank concurs with the "core values" and "strategic priorities" of the WCD, but will not adopt the WCD's detailed "guidelines" into its policies. The explanation given for not accepting the guidelines is that they are much stricter than existing Bank policies. But this is precisely why they should be adopted. The Commission was largely established because the Bank's policies were inadequate at preventing it from lending for destructive and unnecessary dam projects. It is of little use for the Bank to say it agrees with the WCD's general principles without agreeing to adopt the guidelines which explain how to put these principles into practice.

The WRSS calls on the Bank to support hydropower "ensuring, of course, that this is the most appropriate option and that good environmental and social practices are followed." But the Bank repeatedly supports dams that are not the best options and do not follow good practices. Only if the Bank committed to following WCD recommendations could there be optimism for change from business-as-usual in the Bank's dam building practices.

The WRSS uses the conclusions of the 2002 Johannesburg World Summit on Sustainable Development as a justification for promoting more hydropower. The WRSS claims that:

"The official declaration of the Summit emphasizes the role which hydropower can play in poverty reduction in developing countries . . . and calls for increased support for developing countries' efforts to develop hydropower and other renewable sources of energy."

In fact "The Johannesburg Declaration on Sustainable Development" contains no mention of hydropower. The Summit's "Plan of Implementation" does contain one mention of hydropower but nowhere links it with poverty reduction. The mention of hydropower is in a sentence calling for "advanced, cleaner, more efficient, affordable and cost-effective energy technologies, including fossil fuel technologies and renewable energy technologies, hydro included . . ."

Patrick McCully of IRN says:

"The only internationally recognized criteria which could be used to assess which hydro schemes are 'advanced, cleaner, more efficient, affordable and cost-effective' are the recommendations of the WCD. In refusing to implement these recommendations the Bank is ensuring that it cannot support hydro projects as called for by the WSSD."

Cynical: In the WRSS the World Bank feigns concern for the more than a billion people who currently lack access to safe water. The Bank claims that the solution to this humanitarian tragedy lies in promoting guarantees and other subsidies to encourage private investors in water supply schemes.

Yet four-fifths of the world's people without decent access to safe drinking water live in rural areas. Water multinationals have little or no interest in rural drinking water systems. It is rarely possible for corporations to profit from supplying water to poor and dispersed rural populations who mainly depend on local water sources such as wells and streams.

Similarly, major water projects with large reservoirs, pipelines, aqueducts and pumping stations are of little relevance to meeting the water supply needs of rural areas - and in fact often result in depriving rural areas and the poor of their water resources for the benefit of cities and agribusiness.

The strategies of the WRSS are thus largely irrelevant to meeting the needs of the great majority without access to water.

The World Bank itself shows little interest in rural people in its lending operations - less than one per cent of Bank lending between

1993 and 2002 went for rural water supply and sanitation schemes.

Almost all water supply privatization has taken place in urban areas - and has largely been a failure for both consumers and investors. The WRSS makes no mention of lessons to be learned from the water privatization fiascoes in Bolivia, Argentina and the Philippines. The WRSS fails to address the many criticisms of water privatization, and especially concerns over the impact of water privatization on the poor.

The WRSS claims to have been based on "extensive consultations" with "stakeholder groups". Yes these consultations were largely a sham. Attendees were carefully picked by the Bank and any disagreements with the Bank's proposals were ignored. Only 11 NGO representatives were present at the "global consultation" for NGOs and their input - which was highly critical - was disregarded in the final version of the strategy.

While NGO voices were ignored, the interests of the dam and water industries are well served by the WRSS. This is not surprising given that Bank water staff and water industry lobby groups are closely intertwined. The Bank's Senior Water Advisor and main author of the WRSS, John Briscoe, is a board member of the World Water Council, the main international lobby group for water sector companies. Another senior Bank employee is the Secretary General of the Hydropower Equipment Association and is one of several Bank staff who are active members of the International Hydropower Association.

Worsening the World Water Crisis:

Patrick McCully of IRN says:

"There is a huge potential for improving the environment and the lives of the poor by implementing demand-side management and high-reward/low-risk, decentralized and community-led solutions for water and sanitation. In particular, rainwater harvesting and low- and no-water sanitation technologies offer real potential for both rural and urban areas. Implementing the model proposed in the WRSS will set back efforts to realize this potential and will further worsen the already serious failings of the water sector."

"There is an important role for the Bank in improving the performance and safety, and mitigating the negative impacts, of existing infrastructure. Outside of these activities it would be better for the World Bank to disengage from the water sector than to implement the measures proposed in the WRSS."

For further information: Patrick McCully, IRN: 510 848 1155 (office) 510 847 0562 (mobile)

[1] In July 2002 the former Commissioners of the WCD wrote to World Bank President James Wolfensohn to protest the Bank's failure to incorporate their findings and recommendations into an earlier draft of the WRSS. No changes have been made in the final version of the WRSS to address the Commissioners' concerns. The correspondence between the Commissioners and the Bank is available from IRN.

'Avoiding Solutions: Worsening Problems', IRN's critique of the March 25, 2002 draft of the World Bank's Water Resources Sector Strategy, is available at http://www.irn.org/index.asp?id=/new/020527.wbwatercritique.html

Linking human rights and the environment, International Rivers Network supports local communities working to protect their rivers and watersheds.

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