IRN Press Release, Thursday, 27 February 2003

WORLD BANK WATER STRATEGY IS REACTIONARY, DISHONEST AND CYNICAL
Rich Pickings for the Dam Lobby, Harm for the Poor and Environment

The World Bank's executive board yesterday approved a new Water
Resources Sector Strategy (WRSS). The Strategy says the Bank needs to
shrug off its critics and boost spending on big dams, inter-basin
transfers and other water megaprojects.

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 [2].

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