Asia Pacific Peoples Tribunal on ADB

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iAsia Pacifc Peoples Tribunal on ADB

ADB

A SIA PACIFICP EOPLES T RIBUNAL

on

Manila

Maria Theresa Lauron

Editor


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ii Asia Pacifc Peoples Tribunal on ADB

ISBN 978-971-0483-52-5

Copyright ASIA-PACIFIC RESEARCH NETWORK 2010All rights reserved.

Asia-Pacifc Research Network (APRN) holds therights to this publication. The publication may becited in parts as long as APRN is properlyacknowledged as the source and APRN is

urnishd copies o the nal work where the

quotation or citation appears.

Comments and inquiries may be orwarded to:

3/F IBON Center114 Timog AvenueQuezon City, Philippines 1103 Tel: +632.927.7060 - 62Fax: +632.927.6981Email: [email protected]: www.aprnet.org

Cover Photo: Koustav2007Cover Design: Corona DolotLayout: Reileen Joy DulayPublished by IBON Books

Published with the assistance o :

Primates World Relie and Development Fund (PWRDF)

Canadian Catholic Organisation or Development and Peace (CCODP)

Unitarian Universalist Service Committee (UUSC)

Secretariat


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iiiAsia Pacifc Peoples Tribunal on ADB

Pre ace v

Programme 1

Testimonies 7

Debt

The ADB, Debt and Development

in the Asia-Pacifc Region(Sonny A rica, IBON Foundation, Inc., Philippines)

8

Debt and ADB Hegemony: Impact on Indonesia(Dian Kartika, International NGO Forum on IndonesianDevelopment, Indonesia)

14

Water

Melamchi Water Supply Project(Anuj Sitoula, Water and Energy Users Federationo Nepal, Nepal)

20

On Dhaka Water Supply and Sewerage Authority

(DWASA) Project in Bangladesh(Ahmed Swapan, Voices or Interactive Choice andEmpowerment, Bangladesh)

26

Agriculture

Debt, Food Crisis, and Extreme Poverty in Rural

Communities (Erpan Faryadi, Aliansi Gerakan Re ormaAgraria, Indonesia)

31

Table of Contents


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iv Asia Pacifc Peoples Tribunal on ADB

ADB Loan or the Crops Brings Misery to the Farmers

(Hari Pratano, Tree Crop Smallholder Sector Project,Indonesia)

46

Women

Lembar Fakta: Impact o ADB to women migrantsin Indonesia (Retno Diwi, Association o IndonesianMigrant Workers in Jakarta, Indonesia)

51

Indigenous People

The Cordillera Highland Agricultural ResourceManagement Project (CHARM) and the IndigenousPeoples Policy o the Asian Development Bank (ADB)(Jeanette Cawiding, Cordillera Peoples Alliance,Philippines)

56

EnvironmentEnvironmental Impact o ADB Projects in the AsiaPacifc Region (Suranjan Kodithuwakku,Green Movement o Sri Lanka, Sri Lanka)

60

Scrap ADBs strategy 2020(Hemantha Withanage, Centre or EnvironmentalJustice/Friends o the Earth, Sri Lanka)

65

Verdict 71

Judgment 76

Annex:Photos

79

Table of Contents


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vAsia Pacifc Peoples Tribunal on ADB

Preface

Since the inception o the ADB in 1966, there had been a continuing

list o negative impacts it has brought to the lives o the people in theregion despite its stated mission o acilitating development and improv-ing lives o the people in the Asia Pacifc Region.

Over the years, civil society organisations and peoples organisationshad produced systematic and scientifc researches on the outcomes o theADB- unded projects across the region. Some o these studies have beenbrought to the attention o the ADB but there has never been properredress o the substantive issues raised. Furthermore, there had beena lack o an e ective plat orm and mechanisms rom within and romoutside the ADB to present the issues and concerns o the most a ectedsectors o society with regard to the negative e ects o anti-people poli-cies and projects which ADB has been implementing.

Taking into account the need to create a space to examine the roles

and impact o the ADB on the issue o development, the Asia PacifcResearch Network (APRN) and its members rom Indonesia, took the leadto organise the Asia Peoples Tribunal on ADB to gather studies,researches and testimonies rom a ected communities on the negativeimpacts o ADB projects and submit these as evidences be ore a tribunalo law experts, development practitioners and parliamentarians.

The APRN convened the Asia Pacifc Peoples Tribunal in Bali,Indonesia on May 2-3, 2009 as an alternative peoples event to the ADBs42nd Annual Governors Meeting. The objectives o the Peoples Tribunalwere the ollowing: 1) To raise the voice o the people whose lives havebeen impacted by ADB projects; 2) To question the legitimacy o the ADBas a development agency; and 3) To promote a genuine and pro-peopledevelopment ramework as the solution to the global and regionaleconomic and fnancial crisis.

The issues that were highlighted at the Peoples Tribunal cut acrossdebt, water, agriculture, women, indigenous people, and theenvironment.


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vi Asia Pacifc Peoples Tribunal on ADB

Peoples organisations stood as witnesses and imparted testimonies

that substantiate arguments to the three charges brought upon the ADB:1) the grants/loans given out by ADB contributed to the massive socio-economic displacement o the people in the Asia Pacifc region; 2) theADB supports dictatorial regimes thus it is equally liable in violatingpolitical and civil rights o the people; and 3) the ADB imposes policyconditionalities to the benefciary countries in the Asia Pacifc Regionwhich clearly violate the peoples sovereignty and their right tosel -determination.

The peoples verdict

A ter three days o hearing and deliberation, the ADB was pronouncedGUILTY or all the three charges along with the Governments o theUnited States o America, Japan, Republic o the Philippines, Indonesia,India, Bangladesh, Sri Lanka, and Pakistan or being jointly liable to the

vicious impacts brought by the ADB projects to the lives o the people.

First, the loans/grants given out by the ADB were not geared towardthe alleviation o poverty but were tied up with conditionalities thatpromote liberalisation, deregulation and privatisation. Liberalisation hadbeen proven to be detrimental to domestic agriculture and industry whileprivatisation and deregulation have rendered public utilities inaccessibleto the people and hindering public access to social and economic servic-es, education, health services and ood security.

The ADB projects were implemented without considering environmen-tal and ecological sa ety, culture, indigenous knowledge and traditions o the communities which were supposed to beneft rom the projects o ADB. The illegitimate debts incurred by the governments in the AsiaPacifc Region are passed on to the people through taxes and higher

prices.

Second, it was established that the ADB supported dictatorial andauthoritarian regimes responsible or widespread violation o civil andpolitical rights o the citizens. In areas where there are opposition to ADB

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viiAsia Pacifc Peoples Tribunal on ADB

unded projects, project proponents used threat, intimidation,

harassments and even killings to sti e the voices o the opposition.

Third, the people have accused the respondent o violating peoplessovereignty and the right to sel -determination. The evidencesubmitted to the Asia Pacifc Peoples Tribunal on ADB proved thatthrough the ADBs Development Policy Support Program (DPSP), debtorcountries were compelled to adopt the policies imposed by ADB asconditions or release o loans. It was also shown that ADB imposed itswill on the communities and indigenous peoples despite opposition andwithout due regard to their culture and traditions.

The ADB and the respondent governments are GUILTY o gross,widespread and systematic violation o the economic, social, and culturalrights o the people in the Asia Pacifc Region, which in ringe the right o the people under The Universal Declaration o the Rights o the Peoples

or the Algiers Declaration o July 1976; The Universal Declaration o Human Rights o December 10, 1948; and The International Covenant onEconomic, Social and Cultural Rights.

Breaking to a higher ground on the campaign o the people on the ADB

The Asia Pacifc Peoples Tribunal on ADB is an initiative which willevolve to a higher level o campaign and advocacy bringing in thebroadest number o people and institutions altogether to systematicallyhold the ADB and governments in all the catastrophic e ects they broughtto the Asia Pacifc Region.

The publication o the proceedings o the Asia Pacifc Peoples Tribunalon ADB is aimed to urther accelerate the peoples campaign against ADBand the respondent governments which have been given a guilty verdict

o the Peoples Tribunal.

The APRN would like to thank its members, the Institute or Nationaland Democratic Studies (INDIES) and the International NGO Forum orIndonesian Development (INFID), or their initiative in organizing the Asia

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viii Asia Pacifc Peoples Tribunal on ADB

Pacifc Peoples Tribunal. Many thanks also to the International

Association o Peoples Lawyers (IAPL) or co-organizing the event. Like-wise, APRN is also very grate ul to the local co-hosts, the organizationsthat prepared studies and testimonies, witnesses, jurors, the media, andto all those who attended the 3-day trial and the succeeding peoplesaction.

Thank you very much also to APRNs partners or their support or thisproject the Primates World Relie and Development Fund (PWRDF),Canadian Catholic Organisation or Development and Peace (CCODP),Unitarian Universalist Service Committee (UUSC).

This book is intended to be distributed to reach the widest audiencerom di erent civil society and peoples organisations not only in the Asia

Pacifc Region but in the di erent parts o the globe. Furthermore, thispublication will be circulated among the media, government o ces and

international institutions to strengthen our undertakings in obtaining justice and genuine development.

The Board o ConvenorsAsia Pacifc Research Network February 2010

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1Asia Pacifc Peoples Tribunal on ADB

Asia Pacifc Peoples Tribunal on ADB2-3 May 2009

Udayana University Faculty o Medicine Auditorium,Denpasar-Bali, Indonesia

Organized by: Asia Pacifc Research Network International Association o Peoples Lawyers

Co-organized with: INFID and INDIES

DAY 1

8:00-9:00 Registration

9:00-9:15 Cultural Presentation9:15-9: 25 Welcome Remarks Don Marut

Executive Director,International Forum onIndonesian Deelopment(INFID)

9:25-9:45 Introduction o Presiding Judgeand College o Jurors

9:45-10:00 Calling o Case and Reading o Charges Ramon BultronClerk o Tribunal

10:00-10:10 Appearances or the Prosecutionand De ense

Presentation o evidence and markingo documents

10:10-10:25 Opening Statements or the Prosecution

10:25-10:40 Co ee break

DEBT

10:40-11:10 First witness - Testimony by Sonny A rica,IBON Foundation, Inc.

Direct examination byAtty. Jobert Pahilga and Atty. Rey Cortez

11:10- 11:40 Second witness -

Testimony by Dian Kartika,International Forum on IndonesianDevelopment (INFID)

Direct examination by Atty. Jobert Pahilga

Programme


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2 Asia Pacifc Peoples Tribunal on ADB

WATER

11:40- 12:20 Third witness- Testimony by Anuj Sitoula,

Water and Energy Users Federation(WAFED), on the Kaligandaki Hydropowerand Melamchi Project in Nepal

Cross Examination byAtty. Jobert Pahilga and Atty. Rey Cortez

12:20-1:30 Recess

1:30-1:40 Video Documentation:

Testimonies o victims o the Kaligandakiand Melamchi Projects in Nepal

1:40-2:10 Fourth witness- Testimony by AhmedSwapan Mahmud, Voices or InteractiveChoice and Empowerment (VOICE),on Khulna Jessore DrainageRehabilitation Project (KJDRP) and DhakaWater Supply and Sewerage Authority(DWASA) Project in Bangladesh

Cross Examination by Atty. Antarini Rinno

2:10-2:55 Video Documentation:Impact o the KJDRP, produced by theCoastal Development Partnership (CDP)

AGRICULTURE

2:25- 2:55 Fi th witness-

Testimony by Erpan Faryadi,Aliansi Gerakan Re orma Agraria (AGRA)Asian Peasant Coalition (APC)

Cross Examination byAtty. Iwan Kurniawan andAtty. Wisnu Broto

2:55-3: 25 Sixth witness- Testimony byMr. Ahmad Mamusa (village chief) of Central CelebesIndonesia on the CommunityEmpowerment Rural DevelopmentProject

Programme


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Cross Examination byAtty. Iwan Kurniawan and

Atty. Wisnu Broto3:25-3:55 Seventh witness- Testimony of Hari

Pratono (peasant) of Central Celebeson the Tree Crop Small-holder SectorProject (TCSSP)

Cross Examination byAtty Iwan Kurniawan andAtty Wisnu Broto

3:55-4:10 Snack Break

WOMEN

4:10-4:40 Eight witness-Testimony of Retno Diwiof Association of Migrant Workers inJakarta on the impact of ADB to womenmigrants in Indonesia

Cross Examination byAtty Antarini Arna

INDIGENOUS PEOPLES

4:40-5:10 Ninth witness- Testimony of JeannetteCawiding of Cordillera PeoplesAlliance (CPA) on the CHARM Projectin the Cordillera, Philippines

Cross Examination byAtty Jobert Pahilga andAtty Rey Cortez

5:10-5:40 Tenth witness- Testimony byAsar Torae o Central Celebes

Cross Examination byAtty. Jobert Pahilgaand Atty. Rey Cortez

5:40-6:00 Presidium o Judges Initial Deliberation

Programme


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DAY 2

8:00-9:00 Registration9:00-9:10 Opening Remarks/

Recap o Day 1

9:10-9:20 Re-entry o Presidium o judgesand prosecutors Call to Order

9:20-9:30 Appearance o the Panel o Prosecutors

Appearance or the De ensePresentation o evidence andmarking o documents

ENVIRONMENT

9:30-10:00 Eleventh witness- Testimony by SuranjanKodithuwakku o Green Movement o SriLanka (GMSL), on the impact o theUpper Watershed Management Projectand the Southern TransportDevelopment Project to the environmentin Sri Lanka

Cross Examination

10:00-10:30 Twel th Witness- Testimonyby Zuki Zuarma o FMN

Cross Examination by Atty. Antarini Arna10:30-11:45 Co ee Break

11:45- 12: 15 Thirteenth Witness- Expert testimony byHemantha Withanage,Centre or Environmental Justice,on Strategy 2020 and ADBs institutionalgovernance

Cross Examination byAtty. Jobert Pahilga and Atty. Rey Cortez

12:15- 1:30 Recess

1:30- 1:10 Re-Entry o judges, jurors, prosecutors;Call to Order

Programme


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1:10-1:40 Submission o Documentaryand Real Evidence by the Prosecution

Summation

1:40-3:00 BREAK

3:00-3:30 Acknowledgment o Endorsers, ForeignParticipants and Organizers

Speak out

3:30-3:45 Promulgation o Sentence/Reading o Verdict by Presiding Judge

3:45-4:00 Promulgation/Issuance Judgment/Call toAction Termination o Trial Proceedings;Processional

4:00-4:10 Closing Remarks

4:10 onwards Direct Action

Programme


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ProgrammeJudge

Ms. Wardah HafdzUrban Poor Consortium Coordinator,Recipient o the POSCO TJ Park Prize

and the Gwangju (Kwangju) Prize or Human Rights

JurorsMr. Antonio A. Tujan Jr.

IBON International Director

Ms. Zumrotin SusiloInternational Organization or Migration

Former Human Rights Commissioner in Indonesia

Mr. Abdon NababanDirectorAMAN

Congresswoman Liza MazaGabriela Womens Partylist

Ms. Azra SayeedRoots or Equity, Pakistan

ProsecutorsMs Antarini Arna

(Yayasan Pemantu Hak Anak)

Mr. Iwan Kurniawan(Serikat Pengacara Hukum Progresi )

Mr. Jobert Pahilga

(International Association o Peoples Lawyers)

Mr. Rey Cortez(National Union o Peoples Lawyers)

Mr. Wisnu Broto

(Serikat Pengacara Hukum Progresi )

Clerk o TribunalMr. Ramon Bultron


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Testimonies


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Testimonies DebtTHE ADB, DEBT

AND UNDERDEVELOPMENT

IN THE ASIA-PACIFIC REGIONPresented by Sonny Africa

IBON Foundation, Inc., May 2009

The Asian Development Bank (ADB) was set up in 1966 and is the regions maininternational development fnance institution and its third largest source o such undinga ter Japan and the World Bank (WB). It has 67 member countries, 44 o whom itcategorizes as developing countries, including 19 members rom outside the region in

North America and Europe.[1] The United States and Japan are by ar the ADBs mostpower ul members and equally divide between themselves 31.2 percent o total sub-scribed capital and 25.6 percent o total voting power. In turn, the 23 OECD membercountries in the ADB cumulatively account or 64.5 percent o total subscribed capitaland 58.5 percent o voting power. These dominant powers have ensured that the ADBpushes their desired social, economic and fnancial policies including supporting theinvestments and profts o their corporations.

The ADB declares its vision as an Asia and Pacifc region ree o poverty. Ostensibly

towards this end it has or the last our decades been providing loans, technical as-sistance, grants, guarantees and equity investments or a wide range o projects andprograms. The ADB on its own and in coordination with other international fnancialinstitutions and aid agencies has intervened signifcantly in the transport and commu-nications, energy, water, agricultural and natural resources, fnance and social servicessectors o underdeveloped countries across the region.

The reality however is that the ADB has greatly contributed to increasing and deep-ening poverty as well as worsening the quality o li e o hundreds o millions o people

in Asia and the Pacifc. There are 3.5 billion people living in the region. It is home to anestimated 550 million hungry and 1.7 billion poor people.[2] Yet these are likely evenserious underestimates as our individual country experiences will attest to. In any case,two-thirds o the worlds poor and hal its undernourished people are reportedly in Asiaand the Pacifc. The region also accounts or 40 percent o children who die be ore age5, 60 percent o those without sa e water and 70 percent o those without access toimproved sanitation.

This persistence o poverty is tragic but unsurprising. The last decades in particu-

lar have seen economic and social policies systematically biased against the regionspeasants, workers, indigenous peoples and other marginalized sectors and instead orthe beneft o oreign capital and domestic elites. The ADB has been among the mostconsistent promoters o such anti-people policies as well as a major pillar o the regionsdebt and underdevelopment problem.


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Asia has in recent years been heraldedas some kind o new and rising center o economic prosperity and even o politicalpower. The region has supposedly seenrapid growth and great structural trans or-mation in the last three to our decades.Asias share o global gross domesticproduct (GDP) has been increasing andhas even been orecast to reach over 40percent by 2015.

Yet the rapid economic growth record-ed merely re ects greatly increased com-merce and other economic activity whosebenefts have accrued to a ew. Indeedthe last decades have also seen wideningdisparities within and between countriesin the region. These are not accidental andare the necessary result o the distortedeconomic model pushed by the ADB,among others, through its loans.

Over our decades o ADB lending hasresulted in vast amounts o debt used orprojects hurt ul to people andcommunities as well as harm ul to theenvironment. Loans have been used toleverage policy conditionalities which havemade public utilities prohibitivelyexpensive, undermined social services

o health and education, and destroyedlocal agriculture and industry. There haseven been debt which was e ectively justborrowing to repay past debt. The ADB hasalso provided loans to supportrepressive governments, aside romuncounted amounts which have been lostto corruption.

The ADBs lending has in short notgone towards development. The people

o the underdeveloped countries o Asiaand Pacifc region remain deeply indebted,endure intensi ying poverty, and su ereconomic backwardness. As it is, theunderdeveloped ADB member countrieshad a combined oreign debt o US$344.2billion in 1988 (39 countries) whichincreased fve- old to US$1,635.2 billion in2006 (44 countries). ADB loans constitutea signifcant part o this debt and billionso dollars go to debt payments or these.

ADB Lending

From 1966 to 2008, the ADB hasloaned US$143.5 billion or 2,147 projects comprising US$138.4 billion worth o sovereign loans or 2,018 projects andUS$5.1 billion worth o non-sovereignloans or 130 projects.

Testimonies Debt

http://www.fick r.com/photos/qilin/2962053952/(Licensed under CC BY 2.


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TestimoniesBy sector these loans went to

transport and communications(24.5 percent), energy (19.9 percent),agriculture and natural resources (11.9percent), fnance (11.6 percent), law,economic management and public policy(5.4 percent), water supply, sanitation andwaste management (5.1 percent), industryand trade (4.0 percent), education (4.2percent), health nutrition and socialprotection (2.3 percent) andmultisector (11.2 percent). Grants in turntotalled US$4.1 billion or 263 projects.

As o end-2007, the ADBs biggestcumulative borrower was Indonesia withapproved loans totalling US$21.1B

ollowed by China (US$20.2 billion), India(US$18.5 billion), Pakistan (US$11.1billion), Philippines (US$8.9 billion) and Thailand (US$5.6 billion).[3]

In 2008, the ADB approved 86 moreprojects worth US$10.5 billion US$8.7billion o which were sovereign loans andUS$1.8 billion non-sovereign.[4] The larg-est borrower in 2008 was India (US$2.9billion) ollowed by China (US$1.8 billion),Pakistan (US$1.2 billion),Indonesia (US$1.1 billion) and thePhilippine (US$940 million). There wasalso US$528 million worth o technicalassistance or preparing and implementingprojects and supporting various advisoryand regional activities. There were also49 grant-fnanced projects worth US$811million.

As o the end o 2008, the ADB hadloans totalling US$56.5 billion comprisedo US$52.8 billion in sovereign loans total-ling and US$3.7 billion innon-sovereign loans.[5] Sovereign debt isheavily concentrated in just fve countries

with 95 percent going to Indonesia (29percent), China (24 percent), India (18percent), Pakistan (13 percent) and thePhilippines (11 percent). The much smalleramount o non-sovereign loans, or thosenot backed by national guarantees, arelikewise concentrated albeit to a lesserdegree with 57 percent going to India (20

percent), China (14 percent), Kazakhstan(8 percent), Pakistan (7 percent) and thePhilippines (7 percent).

There was a total o US$12.6 billionin principal repayments to the ADB in the2004-2008 period, or an average o US$2.5billion over the last fve years.[6] Overthe same period, revenues rom loansand commitment charges in turn totalledUS$6.1 billion or an average o US$1.2 bil-lion per year. These are aside rom US$1.7billion in debt service to the concessionalAsian Development Fund (ADF) orparticularly poor countries.

ADB Debt and UnderdevelopmentThe ADB and its loans have greatly

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DanChurchAid


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Testimoniescontributed to the debt andunderdevelopment problems o thepeople in Asia and the Pacifc. Overall, theADB has used its lending as leverage tocompel retrogressive neoliberal economicpolicies on the underdeveloped countries. These policies sustain and deependomestic conditions o underdevelop-ment: trade and investment liberalizationhas undermined domestic agriculture andindustry; privatization has turned socialand public services into opportunities orproft; and deregulation has unleashedunbridled proft-seeking.

The debt owed to the ADB and otherproft-seeking creditors is however also adirect and severe drain on the scarcecapital and fnance o economies in Asiaand the Pacifc. The most evident loss ishow national governments spend largechunks o their budgets on debt servicingat the expense o vital social services o education, health and housing, byprivatizing public utilities and otherservices, and by heavily taxing the people.Neoliberal policies and the debt takentogether have caused deep hunger,poverty, misery and deprivation or tens o millions o peoples in the region.

ADB loans have been used to push theprivatization o power, water and health.Policy changes have been imposed andspecifc projects fnanced. The main ben-efciaries have been oreigncapitalist monopolies in the power andwater industry and their domestic bigbusiness partners. Reducing public healthspending in turn has e ectively reed upresources or use in debt servicing.

In the power sector, the ADBs frstEnergy Policy Paper in 1981 justifed

private oreign capital as the key tomeeting large energy investment needs.By the second 1995 Energy Policy itspolicy o privatization was ully articulatedincluding dismantling state entities in thesector, removing subsidies and chargingmarket prices, improving e ciency, andsupporting build-operate-trans er (BOT)and joint ventures as key vehicles orprivate investment.

The ADB has since its establishmentbeen giving loans to the water sectorand in the mid-1990s began a process o sharpening its water policy culminatingin its Water Policy o 2001. This policydeclared that governments should ceaseto be water service providers, that theprivate sector is key to improve per or-mance and e ciency, and that treatingwater as an economic good allocatedthrough market-based ees and chargeswould ensure its conservation andsustainable use. The ADB has sinceprovided substantial fnancial andtechnical assistance in support o waterprivatization.

The ADB has been involved in thehealth sector since the late 1970s althoughthis has always been a small proportion o total lending. Nonetheless the lending hasstill been in uential in those countries thathave been receiving this especially whencoordinated with other bilateral andmultilateral donors. In 1999 the ADBcame out with a Health Policy Paper thatexplicitly prioritized market orces anddisparaged government intervention. ThePaper also sought to promote innovativefnancing schemes as well as costrecovery through user charges.

ADB loans have unded projects

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Testimoniesbenefting donor interests at the expenseo underdeveloped countries and localcommunities. The case o in rastructurelending shows this clearly.

Historically, more than hal o ADBsassistance has gone towards fnancinglarge-scale in rastructure projectsincluding power plants and grids,hydropower dams, water and sanitation

acilities, highways, major bridges andairports. These have o ten been packagedas laying the oundations or growth and

or providing vital services to the people.Less highlighted is how lucrative contractsand consultancies have gone to nationalso creditor countries, or how thein rastructure has mainly served the needso big transnational frms operating inthe creditor country, or how the servicesprovided have been una ordable or evensubstandard. Project have also causedsickness and death or outright displacedentire communities.

ADB loans have also gone to support-ing grossly undemocratic governments. Ithas wil ully given loans to Asias worst dic-tators such as in the Philippines (Marcos,1965-1986; Arroyo, 2001-present) and Indonesia (Suharto, 1967-1998), as well as to various military re-gimes such as in Thailand (1950-1983) andPakistan (1977-1988; 1990-present). Thesedictators and regimes areresponsible or the killing, disappearance,torture and abuse o human rights o hundreds o thousands o people. ADBs Benefciaries

In the course o all this the ADB hasmeanwhile profted and continued togrow. It has achieved consistent proft-ability and has earned profts every year

since its inception. It moreover categori-cally declares: ADB has never su eredany losses o principal on sovereign loansand maintains a position o not taking partin debt rescheduling agreements.[7] TheADBs net income has or instance beenrapidly increasing despite the global crisis

rom US$570 million in 2006, to US$765million in 2007 (34 percent increase),and US$1,126 million in 2008 (47 percentincrease).[8] Its capital stock o US$54.9billion in 2008 is even larger than therespective GDP o itspoorest 33underdeveloped member countries.

ConclusionThe ADB adopted a new long-term

strategic ramework in 2008 called Strat-egy 2020 with three declared agendas:inclusive growth, environmentally

sustainable growth and regionalintegration. It has been compelled toacknowledge how the rapid growth inthe region over the last decades has beenneither inclusive nor environmentallysustainable. The real intent however isnot so much to correct these but to givethe illusion o correcting these to be ableto continue pushing the ADBs imperialist,

corporate and private sector proft-drivenagenda. Regional integration is likewisenot a genuinely development thrust orthe people but rather a repackaging o theproven destructive trade and investmentliberalization agenda.

The ADB has done great damage tothe peoples wel are over the last our

decades and its so-called Strategy 2020a rms that it is set to do urther damagein the coming decade and beyond. It also

ocuses operations on fve core areas o specialization: regional cooperation andintegration, in rastructure, fnance sector

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Testimoniesdevelopment, the environment includingclimate change, and education. This is alending policy ramework thatunabashedly promotes big oreigncapitalist interests and private sectorprofts rather than real poverty alleviationand development.

The ADB is culpable in making thelives o so many workers, peasants,national minorities, lowly-paidpro essionals, women and children in theAsia and Pacifc so unbearable. Meanwhilethe increased global economic turmoil hasmade the demand or development anddealing with such barriers in the region asthe ADB and its debt even moreimperative.

Holding the ADB accountable or itspast debt misdeeds is a frst step towards justice and putting a stop to theirdestructive and anti-people operations.

DebtThis would pave the way or the

repudiation o all illegitimate ADB debtand their absolute and unconditionalcancellation. There must also be a returno payments on these debts as partialrectifcation o the long-standing injusticeo their unremitting servicing.

All these would also be the necessarybeginnings or a more democratic regionaldevelopment fnancing mechanism thatwould genuinely help the people o theAsia and Pacifc region in their aspiration

or real progress. There must be true socialtrans ormation and economic develop-ment that rejects any dependence on or-eign debt and that promotes the rights o working people, genuine industrialization,agricultural development, social progress,economic sovereignty and sel -su ciency.


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Introduction

Indonesia became a member o the Asian Development Bank (ADB) in 1966. The

countrys ADB membership was ratifed by Law No. 8/1966 issued on 8 November 1966.

Since 1967, Indonesia has received aid in the orm o fnancial and technicalassistance. During President Soehartos administration, Indonesia and ADB have enteredinto 319 loan agreements and 27 grant agreements. From 1967 to March 2009, bothparties have agreed to a total o 847 loan agreements and technical assistancecontracts. Less than 10% o these agreements are in the orm o grants (see ADBswebsite at www.adb.org).

Instead o assisting in the fnancing o development in Indonesia, ADBs involvementhas brought about an assortment o problems or the government and the people o Indonesia through public deception, political intervention, human rights violations andinstigating the povertization process in a systematic and extensive manner. ADB undsthere ore should more aptly be known as Financing or Human Rights Violations.

ADB and the Truth1. Established in 1966, the Asian Development Bank (ADB) promotes itsel as aninternational development fnancial institution whose mission is to help developing

member countries reduce poverty and improve the quality o li e o their people.(ADB, profle).

2. In reality, ADBs bylaw under the Agreement Establishing the Asian Development Bank (EA-ADB) stipulates that the purpose and unction o setting up ADB is to ostereconomic development and boost investment as well as intensi y oreign trade (articles1 and 2). Not a single sentence in the bylaw explicitly mentions ADBs goals in alleviatingpoverty and improving the quality o the li e o the people. ADB indeed is misleading thepublic.

3. The report on a Special Evaluation Study on the Impact on PovertyReduction o Selected Projects: Perceptions o the Benefciaries,document code : SST: STU 2002-10, is an assessment o 92 agricultural and socialin rastructure projects in six countries namely Bangladesh, Indonesia, Nepal, Papua New

Debt and ADB Hegemony:Impact on Indonesia

Presented by Dian Kartika International NGO Forum on Indonesian Development (INFID) March 2009

n

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Guinea, the Philippines and Samoa. Forthese ADB-fnanced projectsimplemented rom 1980 to 1990,Indonesia was the largest recipient o loans. Study results revealed a sharprise in economic growth among debtorcountries but poverty rates were also onan upward spiral. From random interviewso 2,433 benefciaries in Indonesia it was

ound that 27% have cited experiencingeconomic progress, 78% did not eel poorand 22% were impoverished.

4. As an international fnancial institution,criteria or ADB membership is thatcountries must also be a UN member,either part o the Economic Commission

or Asia and the Far East or other regionalcountries and non regional developedcountries which are members o UnitedNations or o any its specialized agencies.

5. This membership requirement shouldbe understood as ADBs recognition o UNs presence and products. Recognizingthat each UN member country bearscertain responsibilities and obligationsto participate in ensuring world order,

respect the Universal Declaration o Human Rights and other internationallegal instruments. In reality, ADBs aidto governments and the private sectorthrough loans, technical assistance, grants,guarantees and investment has promptedhuman rights violations. ADB at the veryleast has allowed recipient governmentsand the private sector to commit breachesto human rights. ADB reports have alsoprovided clear indications onin ringements o human rights as well aswomens and childrens rights.

6. Agreement Establishing the ADBprohibits the institution to undertake any

orm o political activity includinginterventions toward the political a airs o member countries (article 36). In truth, allADB activities are indeed politicalactivities. Matters related to economicdevelopment are political issues witheither direct or indirect implications to theconstitutional accountability andobligations o the government and thestate toward realizing the basic rights o its citizens. This is even more apparent inrelation to ADBs unction as embodied inpoint (iii) which seeks to assist countriesin the coordination o development plansand policies aimed at achieving betterresource utilization, ensuring e ectiveeconomic development and promotingthe expansion o oreign trade (article 2point iii). Intervention in developmentplanning and policy-making is a politicalactivity which will have a direct or indirectbearing on the achievement o a countrysdevelopment goals.

7. ADBs political intervention imposedduring the 1997-1999 economic crisisinvolved withholding the disbursement o loans or the social protection o the poor

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and vulnerable groups in order to exertpressure on the Indonesian governmentto acquiesce and implement the StructuralAdjustment Program as well as to altertari structures and increaseelectricity rates in the midst o thecountrys economic and political turmoil(see ADB document: Special EvaluationStudy o the Asian Development BanksCrisis Management Interventions inIndonesia, SST: INO 2001 -09).

8. ADBs political intervention in Indonesiawas blatant and widely publicized in themass media. ADBs demands or thedissolution o the Development AuditAgency and or a more e ective FinancialAudit Agency (TEMPOInterakti ,18 December 2004) also constitute as apolitical activity.

9. ADB has brought about the massiveimpoverishment o the people o Indonesia and other Asian countries. TheSpecial Evaluation Study on Policy Impacto Involuntary Resettlement, documentNo. SSOTH 2000-8 mentions that rom1994 to December 1999, ADB has caused713,230 people to become victims o

orced evictions in numerous countries in-ter alia Bangladesh (88,663 people), Cam-bodia (17,474 people), China (425,433people), India (800 people), Indonesia(50,793 people), Laos ( 1,819 people),Malaysia (3,840 people), Nepal (3,717people), Pakistan (1,850 people), Philip-pines (8,268 people), Sri Lanka (11,600people), and Viet Nam (98,483 people).All 713,230 people are victims o variousprojects in the transportation and energysectors; water supply and irrigation, urbandevelopment, rural development in ra-structure and the environment. Victims o

orced evictions are mainly the result o

projects conducted in the transportationsector (566,512 people) or 17 projects;the energy sector (64,850 people) or 9projects; water supply and irrigation(63,837 people) or 4 projects; urbandevelopment (10,526 people) or 7projects; rural developmentin rastructure (6,372 people) or 2projects; and the environmental sector(2000 people) or 3 projects.

10. Forced evictions (ADB calls itinvoluntary resettlement) that occur inADB projects are merely one o the manyhuman rights violations particularly onthe right to lead a decent li e, the right toequal treatment be ore the law, the rightto be ree rom discrimination, the right tosecure employment and a properlivelihood, the right to personal wealthand be ree rom arbitrary expropriationand the right to personal security.

11. Forced evictions were carried outwithout consultation with the victimscommunity and in ormed consent, butthrough manipulation and intimidation.Land appropriation was arbitrary withoutcompensation or properties priced belowmarket rates. Victims were relocated toresettlements without basic amenitiessuch as road access, water,electricity, sanitation, schools, andhealthcare. People lost their livelihoods or

orced to change pro essions without anysupport rom the government and ADB.

12. Data and in ormation are unavailableon the number o women and childrenvictims and their special needs; rom theplanning o the evictions to theevaluation process. This lack o in ormation and situational descriptiononly illustrate the extent to which the

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needs and rights o women and childrenare categorically ignored. This is a violationo womens rights as governed in CEDAW(Convention on Elimination All Forms o Discrimination Against Women).

The rights o children are also brushedaside and their special needs are not takeninto account in cases o evictions. It is alsounquestionable that ADB projects havein ringed upon the rights o a child to growand develop as well as the right to be ree

rom discrimination and violence. Womenand children have become invisible groupssusceptible to all orms o human rightsviolations. When in act, ADB has declaredto the international community that itembraces gender responsive policiespackaged in various publication medias asOur Framework Policies and Strategies onGender Development.

13. Loan agreements and technicalassistance between the Indonesiangovernment and ADB overlook theprinciple o jus cogens which states thatany international agreement is renderednull and void when in contradiction withgeneral laws recognized and accepted bythe international community as aninternational norm that is non-derogable.Non-derogable rights include: (a) rightto li e; (b) right to be ree rom torture,inhumane or degrading treatment orpunishment (c) right to be ree romslavery or servitude; (d) right to be ree

rom imprisonment due to the inability toulfll a contractual obligation; (e) right to

be ree rom ex post acto laws; ( ) right o equal recognition be ore the law; (g) rightto the reedom o thought, conscience andreligion.

14. ADB is authoritarian. As a legal subject,

ADB is an organization with immense pow-er and enjoys a multitude o privileges,legal immunities and exemptions on taxregulations as stipulated in the AgreementEstablishing the ADB (Chapter VIII on Sta-tus, Immunities, Exemptions and Privileg-es, articles 48-57). ADB declares itsel asa legal subject with immunity towards all

orms o judicial proceedings (article 50),and the immunity o all ADB assets rominspection, requisition, confscation andany other orm o similar acts by executiveor legislature (article 51). All ADB archivesand documents in any location areinviolable (article 52). All ADB propertiesand assets shall be ree rom any ormo restrictions, regulations, controls andmoratoria (article 53). The privilege oncommunications (article 54). Furthermore,ADB provides immunities and privileges toADB sta and employees (article 55) andexemption rom national taxation (article56). Any waiver o immunities, exemptionsand privileges shall only be appropriate orthe best interests o ADB (article 58).

15. ADB ignores the UN. Despite ADBsundamental provision which states that

its members must also be UN members,the Bank and also the Indonesiangovernment as an ADB and UNmember have ignored and ailed to rati ythe Vienna Convention on the Law o Treaties between State and InternationalOrganization or between InternationalOrganizations, signed on 21 March 1986,hence orth known as the ViennaConvention o 1986. This convention in

act is an international instrument thatgoverns on the ormulation o international agreements betweeninternational organizations and countriesor among international organizations.

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Access to Justice or VictimsHundreds o thousands, and

probably even millions o people havebecome victims o ADB- unded projects upto the end o 2008.

There is however an absence o na-tional or international procedure toaddress the plight o these victims. Thus

ar, victims have been urged to seek redress rom their respective governments

or the losses incurred rom ADB projects.Based on the legal and human rights con-text, the brain/mastermindbehind all destructive plans, the instigatoro violations and acts o crime and the f-nancier o such o ences should be the oneto be held accountable or the su eringso people who have become victims andthe resulting material andnon-material losses..

For cases o human rightsviolations caused by debt-fnancedprojects more appropriately termedFinancing or Human Rights Violationsinstead o Financing or Development victims have arrived at a dead end as toways in attaining justice.

Inaccessibility to justice is caused by theollowing aspects:

1. Internal regulations o internationalfnancial institutions excessively govern ontheir immunities, privileges andexemptions applicable to the organization,leadership structure, personnel and sta o the respective institution.

As stipulated in the AgreementEstablishing the ADB immunities includeimperviousness rom judicial proceedings(article 50); assets immune rom all ormso inspection, requisition, confscation

and any other similar acts by executive orlegislature (article 51); and immunity o allADB archives and documents stored in anylocation (article 52). Article 53 on theimmunity o assets rom restrictions onthe other hand, states that all ADBproperties and assets shall be ree rom all

orms o restrictions, regulations, controlsand moratoria. The privilege oncommunications is regulated in article 54;immunities and more privileges or ADBemployees in article 55 and taxexemptions are stipulated in article 56. These provisions are binding or all ADBmember countries; despite any errorscommitted by ADB.

2. The presence o an international lawthat regulates on international agreementsbetween states and internationalorganizations including internationalfnancial institutions or the purpose o preventing and protecting the people romhuman rights violations; known as theVienna Convention on the Law o Treatiesbetween State and InternationalOrganization or between InternationalOrganization, signed on 21 March 1986,hereina ter re erred as the ViennaConvention o 1986, is non-binding as theminimum threshold o ratifcation has notbeen met. The Convention will only bebinding a ter 35 countries have ratifed thedocument. At present only 26 countrieshave ratifed the Convention. In addition,it shall only apply to parties o theConvention both state and organization.Indonesia along with ADB, World Bank andIMF have not ratifed the Vienna Conven-tion o 1986.

3. The International Court o Justice (ICJ)can unction as an institution whereseekers o justice may lodge complaints

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on various orms o breaches to nationallaws. ICJ however only recognizes states asparties in contentious cases.

4. International legal developments at theUN level are discussed in theInternational Law Commission (ILC) anddecisions are made at the UN GeneralAssembly. Several crucial developmentsrelated to the implementation o theinternational convention on agreementlaws, i.e. the Vienna Convention o 1969and 1986, have drawn increased attentionin ILC sessions such as: Unilateral Act O States, Responsibility o InternationalOrganizations, International Liability inCase o Loss From Transboundary HarmArising Out o Hazardous Activities,Responsibility o States or InternationallyWrong ul Act. Discussions beginning theyear 2000 to 2007 on the responsibility o international organizations, haveencompassed responsibility toward illegalagreements or regulations orin ringements as determined byinternational law. Discussions have ar-rived at an agreement that internationalorganizations (including the World Bank,IMF, ADB and others) should not be at

liberty to decide as they wish with totaldisregard o international laws. Translatingthis into concrete actions and en orcementhowever requires hard work and a lengthyprocess..Justice or victims o debt-fnancedprojects should be easily accessible.Several strategic measures to achieve thisamong others:1. Demand or the termination or

restriction o immunities, privileges andexemptions governed in the charter orstatute o international fnancialinstitutions. This includes pushing oramendments to the AgreementEstablishing the ADB, i ADB is stillregarded as an international fnancialinstitution that is relevant to this day.

2. Urge the Indonesian government andparliament to rati y the ViennaConvention on the Law o Treatiesbetween State and InternationalOrganization or between InternationalOrganizations o 1986, and demand thatthe Indonesian government restrictsinternational cooperation only withinternational organizations that have

ratifed the Convention.

3. Push or re orms in the InternationalCourt o Justice (ICJ) in order to open upaccess to justice or victims o projectsundertaken by international organizationsincluding international fnancialinstitutions.

4. Promote the ormulation o variousregulations at the international level tosupport greater transparency andaccountability rom internationalorganizations including internationalfnancial organizations.

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Testimonies WaterMelamchi Water Supply Project

Presented by Anuj Sitoula

Water and Energy Users FederationWAFED, May 2009

The Melamchi Water Supply Project (MWSP) is an inter-basin water trans er projectaiming to divert 170,000 cubic meters/day o water (62 million cubic meters/year) romthe Melamchi river to Kathmandu valley through a 26.5 km tunnel, to quench the thirsto the 1.6 million population o Kathmandu valley. This volume o water diversion will

be tripled by the end o 3rd phase rom the Yangri and Larke rivers. The Melamchi river,which is a part o the larger Indrawati river basin, that originates rom the highHimalayas, is located about 42 km to the northeast o Kathmandu.

Cost o the project

The initial cost was estimated to be USD 464 million and revised upwards in 2005 toUSD 531 million. On January 2008 it was revised downwards to USD 317.3million with a 32 percent (146.7 million) reduction rom the original cost o USD 464million.

O ense Violation o ADBs own sa eguards policies: involuntary resettlement policy,environmental policy and accountability mechanism, including national law and policy. Violation o peoples human rights. Violation o Indigenous peoples right

Ratan Bhandari/WAFED


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Testimonies WaterConditionalities o ADB Privatisation o Nepal Water Supply

Corporation (NWSC) Management o the public watermanagement structure should be replacedby a private operator. Full cost-recovery principle. Increasing water tari s three- old.

How peoples rights are violated

Average river ow during the dry months(March and April) is 3 cubic meters persecond. The proposed diversion rate o 1.97 cubic meters per second is slightlyless than the average dry season ow. Theprescribed release o 0.4 cubic meters persecond o water in the river a terdiversion is insu cient to sustainpresent and uture water demand o

ertile Melamchi valley. The MWSP hasalso ailed to satis y local people in termso how much water will be required in theMelamchi valley or their livelihoods andecosystems, and how much water willreally be available or diversion. Loss o resources or agriculturalproduction. Loss o employment and loss o utureopportunity or development o otherrural enterprises based on water-use. Unequal distribution o beneftsbetween rural poor people at thesource and the a uent people o theKathmandu. Loss o productive assets due topermanent acquisition o 80 hectare o

agricultural land by the project. Agricultural production on about 110hectares o spring paddy andnearly 15 traditional water mills (Ghatta)along the Melamchi river are likely to

be adversely a ected between Februaryto May due to the reduced ow in theMelamchi river a ter water diversion. There will be loss o agricultural oodproduction, reduced ood security, andloss o employment and rural livelihood. The compensation package will notprovide any beneft to those who rent inland or cultivation. There has been complete lack o transparency and democratic processin development and implementation o Social Upli tment Programme (SUP) dueto which local people have totally rejectedSUP. Local people claim that 10 percent o theincome rom the project should beallocated or the development o theMelamchi valley, which should be

controlled and spent by the locals but thisdemand is not yet addressed. Free, prior and in ormed consent o thelocal a ected people be ore makingdecisions is the undamental essence o public participation. The project has notmade sincere e orts to obtain publicconsent by ensuring their e ective andmeaning ul participation in the decision-

making process. The project invited onlyselected persons in a ew publicconsultations. Local NGOs and individualscriticizing the project were neither invitednor consulted. Disclosure o in ormation is inadequate.People have been fghting or basic projectdocuments or years but without anysignifcant achievement. Only littlein ormation is available in local language.Even these documents were made publica ter making all decision on the project. In ormation in local language is notavailable and there is lack o proper and


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authentic in ormation. The project is not environmentallysound. The construction o the 26.5kilometer long tunnel through themountain will cause irreparable loss tothe surrounding environment. The wholemountain range lies within the seismicallysensitive region. Natural disasters likeearthquakes and landslides may become

requent and intense once theconstruction work begins, since romexperience it is known that soil structurein the region is highly unstable. Indigenous people are totally neglectedduring project decision. They were neitherconsulted nor their consent taken on landacquisition, compensation andresettlement. There is also no adequate study orincome generation programme or, over 50Majhi amilies a fsh-dependent ethnicgroup who will be displaced.

Exhaustion o remedies: Open letter to Melamchi Water SupplyDevelopment Board (MWSDB), theGovernment o Nepal and AsianDevelopment Bank(ADB) by WAFED on

June 27, 2003. ADBs response to WAFEDs letter o 27June 2003 on July 9, 2003. Joint letter to ADB by WAFED andMelamchi Local Concern Group(MLCG) onMarch 29, 2004 (In Nepali language). Response by ADB and Donors onWAFEDs Letter o April 19, 2004 on April

27, 2004. Letter to Special Project Facilitator (SPF)or the investigation o policy non-

compliance in the MWSP on May 1, 2004. Initial response by the SPF in the letter o

May 1, 2004 on May 11, 2004. Additional in ormation to the SPF on

policy non-compliance in the MWSP onJune15, 2004. Additional request to the SPF on policynon-compliance in the MWSP on June 21,2004. The fnal SPFs report on June 25, 2004. Letter to the SPF on decision to engagein consultation process on July 7, 2004.

Comments on the SPFs Report by theclaimants on July 21, 2004. Letter to the MWSDB requesting or aconstructive dialogue on September 17,2004. Response rom the MWSDB on theletter o September 17, 2004 on October1, 2004.

Letter to the SPF on disengagement o the consultation with the SPF onOctober 8, 2004. Letter to the Compliance Review Panelo the ADB or the investigation o policienon-compliance in the MWSP onNovember 12, 2004. Report on Eligibility on the request orcompliance review on the MWSP by theCRP on December 17, 2004.

ADB and the project responded tomost o the requests and demands butwith no clear opinion. SPF to some extentaccepted that there are some seriousissues which need to be considered andhave recommended or regular andconstructive dialogue with all theconcerned, but suggestions and recom-mendations were never implemented.Since the outcome o this e ort wasunsatis actory, a complaint was fled withthe Compliance Review Panel (CRP) or the

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examination o in ormation disclosure, re-settlement, water, environment, orestry,indigenous peoples, and poverty reductionstrategy.

The complaints helped improve thebelated release o some previously hiddenproject documents and ensure better landcompensation deal. However, most o thefndings o the Accountability Mechanismswere ound ADB-biased with both policyand procedural aws in providing e ectiveremedies to victims.

Demands Release all project documents andin ormation in local language. Review and redo the EIA withmeaning ul public participation to gainprior in ormed consent. To apply exising ADB policy oncompensation and resettlement, waterand environment, including Nepali lawsand international human rights andenvironmental obligations. Implement SUP only a ter direct andmeaning ul involvement o local people. Respect and apply WCD criteria and

guidelines.

Kali Gandaki A Hydroelectric Project The Kali Gandaki A (KGA) is Nepals

largest hydroelectric project, 144 MW,built in the western region o Nepal withconditional loans rom the AsianDevelopment Bank (ADB) and theJapanese Overseas Economic Co-operation

Fund (OECF), now Japan Bank orInternational Cooperation (JBIC). Began in1997 and completed in 2002, this projectis considered costly, compared to theoriginal orecast. The reasons are the

delays, the cost-over-run and corruption. The cost escalated rom US $250 to US

$360 million by the time o completion. The civil construction cost was increasedby 67%. The ADB, instead o supporting costreduction measures, was mainlyconcerned to ensure compliance with itsconditionalities and increases in theelectricity tari .

O ense Violation o ADBs own sa eguardspolicies, involuntary resettlement policy,environmental policy and accountabilitymechanism. Violation o peoples human rights. Violation o indigenous peoples rights

Access to in ormation Only a ew documents like the loanagreement were available. Many o theseare o no use to local people, as they wereall in English, except or some smallin ormation booklets. None o the documents were availableduring the time o decisions.

The non-availability o basic projectdocuments and in ormation like the

easibility studies, cost-beneft analysisand Environmental Impact Assessment(EIA) reports, as well as copies o contractseven a ter the completion o the project. A lot o alse promises were given tothe local people. They were completelydenied o critical project documents andin ormation. Even requests or in ormationby local elected bodies were repeatedlydismissed.

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Public consultation/participationSome public meetings were held at theKGA project sites and in afve-star hotel in Kathmandu. The local participants at these meetingswere all selected under the in uence o project o cials. Activists were prevented rom attendinglocal meetings and presenting their views. Those who made attempts to distributeprinted in ormation had to ace bothverbal and physical abuse and harassment. The project violated Nepali law(Environment Protection Act and Rules)and ADB sa eguard policy while preparingEIA report by not having properconsultation.

The issue o local benefts

The project o cials were even engagedin creating pseudo local groups andarranging ake letters o support to theADB. The local people were suppressed whenthey began to demand the promised jobsand e ective implementation o social andenvironmental mitigation plans. One unemployed youth who had joinedthe protesting crowd was killed by policein the Impregilo o ce compound. About 32 local people demanding jobswere charged under the Public O ense Actby the local authority. They were set reeupon the deposit o their personalproperty or bail. The charges weredropped only a ter the completion o the

project. The ormation o independent unionswas virtually banned and genuine unionleaders were fred or their activities,violating Nepal Labour Act/Rules and

Trade Union Act. The local traditional village women wereexposed to vulgar western culture andli estyle and were o ered only low-leveland low-paid household work at theresidence o Impregilo masters.

No letters o appointments or contractswere given to workers and labourers inaccordance with the Nepal Labour Act. Hiring and fring were the terms andconditions or them, in violation o alldomestic and international labour lawsand standards. Minimum basic pay and benefts were

denied. The Head o Impregilo once said that ithad no obligations to respect anydomestic, international or the ADB rulesand regulations on labour and sa eguardpolicies. The displaced people had no choicebut to accept whatever money was madeavailable or compensation. There was,and still is, no provision or the truerepresentation o a ected people in theland acquisition and compensationprocesses. Small number o Bote indigenous

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peoples were provided neither properresettlement, compensation norguaranteed jobs. Instead, they lost theirtraditional livelihoods permanently. Theplanned income-generation programmeswere also not adequately implemented. Some o the ew houses built or someBote amilies do not have basic acilitieslike electricity supply, toilet and water.Even the houses are built so badly thatthey could collapse at anytime.

The project ailed to release the agreedamount o water downstream. The activists and media people were alsoprevented rom meeting local people andvisiting the project sites. In some cases,armed police were used to arrest andexpel them rom the area.

Remedies Several public meetings and protestswere organised by local people againstthe NEA, the Impregilo and the ADB andthe government during the constructionperiod. The people even complained that ADBo cials were hiding rom them to avoidcomplaints, and that they were largely

relying on inaccurate internal reports to judge project per ormance. The complaints made by the localVillage Development Committee o cialsand other groups were either ignored orpoorly addressed. A Public Interest Litigation was fled atthe supreme court o Nepal by the local

people demanding beneft sharing or theVillage Development Committee. An application lodged at theCommission on Investigation o Abuse o Authority (CIAA) on August 2003 by

Testimonies WaterWAFED to investigate the corruption o Kaligandaki A. CIAA has not yet providedany in ormation regarding its investigation. A case was fled at the Supreme Court o Nepal regarding corruption on the project. A detailed complaint by the Water andEnergy Users Federation-Nepal (WAFED)to the ADB in June 2003, and then a high-level mission was sent to study theproblems. The Mission responded toWAFED in November, con essing that there

have been serious violations o ADBpolicies, and mitigation plans, andpromised compliance as soon as possible. The Mission also has agreed in a January2004 meeting to continuously monitorpost-project impacts and developmitigation plans, as and when required.But the progress is still unknown.

Demands Review the whole project per ormanceduring the implementation o the project. Undertake post-project Environmentaland Social Impact Assessment including o those directly and indirectly a ected areasthat were not covered previously. Develop and implement variousmeasures to ensure that people areadequately compensated or their lossesand to implement economic, social andenvironmental programmes.


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On Dhaka Water Supply and SewerageAuthority (DWASA) Project in Bangladesh

Presented by Ahmed SwapanVoices for Interactive Choice and Empowerment (VOICE), May 2009

Dhaka Water Supply and Sewerage Authority (DWASA) Project

The ADBs Dhaka Water Supply and Sewerage Authority (DWASA) Projectenvisages eventual privatisation o the water distribution system. It makesrecommendations that bear the typical signs o gradually moving towards thatdirection. But water privatisation has hardly benefted the customers o the privatewater companies in developing countries, where operators are virtually stronger thanthe host government. The ollowing discussion ocuses on di erent aspects waterprivatisation and the Dhaka WASA project to be specifc. It also draws upon experiences

rom other countries.

Dhaka Water Supply Sector Development Project was aimed at rehabilitating theage-old water supply pipelines. The Tk1,500 core project was unded by the AsianDevelopment Bank, and is scheduled or completion in 2013.

Many city dwellers are acing water crisis as they used to get dirty and stinky water.Most o water supply/pipelines are age-old and leaked that cause the supply water to bepolluted and become stinky.

Cracks o ten develop on the age-old pipelines and water leaks out o these pipesresulting in loss o a huge amount o water, an o cial said, adding that 20 per cent outo 40 per cent system loss o WASA water occurs due to leakages and cracks inage-old pipelines.

Against the backdrop, DWASA in collaboration with ADB had undertaken the projectto rehabilitate the age-old water supply pipelines, stop water pollution through leakagesand ensure smooth water supply to city dwellers.

Currently, the length o the WASA pipeline network in the city is more than 3,000kilometres with supplying water through around three legal and illegalconnections, according to WASA sources.

O the total network, 15 to 20 per cent o the supply system is operated throughpipelines made o cast iron and mild steel while 2 to 3 per cent is made o asbestos cement.

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AC and MS pipes, used in the supplylines, are mostly around 40 years old whileCI pipes were installed during the Britishperiod, sources said. Most o the age-oldAC pipes have lost its durability and theMS pipelines have become rusty and weak

requently causing leakages and cracks inthe pipelines.

WASAs maximum daily watersupply capacity is between 160 crore and170 crore litres against the demand ormore than 200 crore litres. O the totalsupply water, 85 per cent come romunderground source and 15 per cent romsur ace water source. Apart rom about500 deep tube wells, WASA has our sur-

ace water treatment plants at Sayedabad,Chadnighat and Narayanganj.(http://www.newagebd.com/2009/

eb/11/met.html#2)

Dhaka Water Supply andSewerage Authority was turned into apublic limited company under theCompanies Act 1994 that would allowDWASA greater exibility and autonomy

or private sector investment in expandingits operations and maintenance.

As an intermediate approach itsuggests the water agency should becomean autonomous and commercialorganisation, which should not becompelled to seek government approvalregarding its operations including servicedelivery, tari s or accepting privateinvestment.

The report recommends thatprivate sector involvement on a BuildOwn Operate and Trans er basis wherebythe private party will operate theestablished plant or an agreed number o

years with the surety o the sale o a givenquantity o water annually. However, inthis case the report suggests that the givenquantity o water sales be guaranteed bythe government.

There are also recommendationsthat water tari s, or both residentialand commercial consumers, be increasedby 200 per cent rom the current levelsby 2019 since tari s would also have torecover loans o the lending agency. Thisis especially important since, althoughthe government would be borrowing the

unds at nominal service charge, belowone per cent, and would be liable to payback in a ew decades, the water agencywould have to service the loans at 7.5

per cent and repayment would beginwithin a ew years a ter the project iscompleted.

The report recommends that watertari s are high enough to service its debts.Bangladesh is going through the classicsigns o ull- edged water privatisation,which will presumably begin with Dhaka,the most lucrative market or any privateoperator. There has hardly been any

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attempt o the government to reclaimwater as a basic human rights, which then

alls upon the state to ensureConditionalities.

By way o conclusion, here is thecomplete list o assurances that a dra tfnal report, completed in 2006, putting

orward recommendations or the DhakaWASA project o the Asian DevelopmentBank.

In addition to standardassurances, the Government has giventhe ollowing Project specifc assurances,which will be incorporated in the legaldocuments:(i) The Government will providecounterpart unds or the Projectimplementation on time. The Project

Monitoring Unit (PMU) DWASA will maketimely submission o annual budgetaryappropriation request and ensure promptdisbursement o appropriated undsduring each year o Projectimplementation;(ii) Be ore the loan E ective Date, theexisting training center at DWASA will berevived by flling in all the vacant positions

with qualifed training people rom outsideDWASA;(iii) The Government and DWASA willensure that it will not approve anysub-project that involves signifcantinvoluntary resettlement according toADBs Policy on Involuntary Resettlement(1995). The Government will urtherensure that all land and right-o -wayrequired or the Project will be madeavailable in a timely manner and adequatecompensations have to be paid to a ectedpeople prior to any civil works contractsaward. Any involuntary resettlement will

be carried out in accordance with theResettlement Framework (RF) agreed uponbetween the Government and ADB, andADBs Policy on Involuntary Resettlement(1995). A Resettlement Plan (RP) will beprepared or each contract involving landacquisition or resettlement and will besubmitted to ADB or review and approvalprior to any related civil works contractsaward. Dra t RPs and updated dra t RPswill be disclosed to a ected people priorto submission to ADB or review andapproval;(iv) To ensure that women beneft equally

rom the Project and interventions avoidgender bias, the Government and DWASAwill ensure that the Project will be carriedout in accordance with ADBs Policy onGender and Development (1998) and thegender strategy contained in the Gender

Action plan that has been prepared andagreed between the Government andADB;(v) The Government will ensure thatdesign, construction, operation andimplementation o the project acilitieswill be carried out in accordance with theenvironmental assessment and reviewprocedures and IEE or the project as

agreed between the Government andADB, and complies with the Governmentsenvironmental laws and regulations andADBs Environment Policy (2002) andEnvironmental Assessment Guidelines(2003). Any adverse environmental im-pacts arising rom the construction, opera-tion and implementation o the project

acilities will be minimized by implement-

ing the environmental mitigation andmanagement measures, and otherrecommendations specifed in environ-mental assessment report. TheGovernment will ensure the satis actory

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preparation and implementation o theasbestos management plan and othersa ety plans, and that qualifed andcompetent personnel will be recruited tocarry out the work. The Government willensure environmental requirements willbe incorporated in bidding documents andcivil works contracts.;(vi) Although the Project does notenvisage any adverse impact onindigenous peoples, the Government andDWASA will ensure the subprojects will beprepared and implemented in accordancewith ADBs Policy on Indigenous Peoples(1998), in order to increase the qualityand access o water supply and sanitationreceived by indigenous peoples;(vii) The Government will cause each o the zones to carry out a ProjectPer ormance Monitoring and Evaluation(PPME) program. The PIU in each zone willbe responsible or ensuring that acomprehensive program or PPMEacceptable to ADB is carried out to(i) examine the Projects technical

per ormance; (ii) evaluate the deliveryo the planned acilities; (iii) assess theachievement o the Projects objectives;and (iv) measure the Projects social andeconomic benefts;(viii) Not later than six months as o loan

Testimonies Water

International Rice Research Institute

E ective Date, the PMU will conduct initialbaseline physical and socioeconomic sur-veys and submit a detailedimplementation plan or monitoringper ormance and or preparing benchmark in ormation to ADB, or review andconcurrence. Throughout Projectimplementation period, annual PPMEreports will be prepared by each PIU,consolidated by the PMU and submittedto ADB.

The Asian Development Banks mas-sive $838 million Dhaka Water SupplyProject is already underway, which it noteswould require substantial privateinvestment. The World Bank has alsoconfrmed it commitment to support thewater sector in Bangladesh along with theAsian Development Bank and noted thatthe sector requires about $8 billiondollars worth o investment over the next20 years. An obvious means, andpresumably the one pre erred by both theagencies, to fnance the water projectswould be private investment graduallypushing the water sector towardsprivatisation.

The approach as planned by theAsian Development Bank would be a wellconcerted one as it approaches to addressall the areas o concern and duly removebarriers. This includes the policy levelintervention where the agency will makesure that the policy regime is madesu ciently exible and that it accommo-dates private investment in the utilities, inthis case, water, i not allow privateoperators to own water plants anddistribution systems.

Water is synonymous to li e. But it isalso an integral part o cultures around the

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world. The universal right to water isinherent in the value system o societies. Although its economic value ishigh, universal access to clean water mustcontinue to be an agenda o governmentsand states, an obligation that must not belinked with commerce. The Bangladeshgovernment, however, appears to havealready orgone that obligation. I previous instances o water privatisationare an indication, it will bode ill.

ADB loan in water sector:1. Bangladesh Southwest Area IntegratedWater Resources Planning andManagement total investment is28.10M US dollars2. Jamuna- Meghna River ErosionMitigation Project, investment is42.20M USD

3. Small Scale Water ResourcesDevelopment Sector II, investment is34.00M USD4. Secondary Towns Integrated FloodProtection (Phase 2), investment is80M USD5. Emergency Flood Damage RehabilitationProject, investment is 180 ml USD6. Flood Damage Rehabilitation Project,investment is 104 ml USD

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Testimonies AgricultureDebt, Food Crisis, and Extreme Poverty

in Rural Communities

Presented by Erpan Faryadi Aliansi Gerakan Reforma Agraria (AGRA), May 2009

QUICK FACTS ON AGRICULTURE AND LANDLESSNESS

Indonesias total land area: 1,904,345 square kilometers (1973). Forest area inIndonesia: 144.5 million hectares (1984, according to the Forest Land Use ConsensusPlan or Tata Guna Hutan Kesepakatan/TGHK). In 1993, 10.8 million arming households owned less than a hectare o land. By 2003,this number had increased to 13.7 million, or an increase o 2.6% a year. In 1993, over hal (52.7%) o the countrys arming households were considered aspoor; by 2003, the proportion was 56.5%. The number o amilies that make their living rom agricultural activities increased

rom 20.8 million in 1993 to 25.4 million in 2003, or an increase o 2.2% a year.

O the 25.4 million arming amilies recorded in 2003, 54.4% lived in Java, and therest (45.6%) in outer Java. Poverty among Javanese arming amilies rose rom 69.8% to74.9% during the period 1993-2003. In outer Java, the number o poor arming amiliesincreased rom 30.6% to 33.9% during the same period, representing an increase o 3.3% a year. In 2000, there were 1,887 plantation concession holders that held such concessionscovering 3,358,072 hectares, or an average o 1,780 hectares o plantation lands each. By 1970, 64 companies had received orest concessions covering some 8 millionhectares. From 1967 to 1980, 519 companies were given orest concessions covering 53million hectares. As o June 1998, 651 companies had been granted orest concessionscovering 69.4 million hectares. The largest source o revenue to the Indonesian government or payment o development needs, particularly up to the 1980s but continuing into the early 21stCentury, is rom mining. Foreign companies such as Mobil Oil,Schlumberger, Exxon, Caltex, Stanvac and others are large oreign interests that havebeen sucking out Indonesian oil or dozens o years. The mining concessionaries Free-port McMoran (US) and Rio Tinto (UK and Australia) are now planning or expansion o

their mining activity, including into the area o Lorentz National Park, a mangrove orest,and other lowland orest areas. Freeport holds a license to mine an area o 2.6 millionhectares in West Papua. The target or national revenue rom the mining sector in 2007was Rp 5.74 trillion, an increase rom 2006 when this fgure hit Rp 5.58 trillion. This rev-enue still depends on large-scale mining operations such as PT Freeport Indonesia(a subsidiary o Freeport McMoran, US), Inco (Canada), Newmont Nusa Tenggara (US),


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Testimonies Agricultureand Arutmin, which generated Rp 663 bil-lion, Rp 154 billion, Rp 169billion, and USD 25 million respectively.

Overview o Agricultural Developmentin Indonesia

Indonesias agricultural develop-ment has progressed in six phases. Thefrst phase was the revolutionary phase(1945-1965), during which then PresidentSukarno sought to develop agriculture by

nationalizing plantations and companiesormerly owned by the Dutch and Japa-nese colonial governments. Until the late1950s, ood production had not increasedby enough to improve the conditions o households dependent on arming. Riceproduction and agricultural productivitybegan to improve only a ter intensive pro-duction was adopted broadly in the early

1960s as part o the Mass Guidance pro-gram. The new intensifcation movementgained momentum ollowing the establish-ment o demonstration plots, organized byresearchers and students at the BogorInstitute o Agriculture with theparticipation o armers on the northshore o Java.

The second phase was consolidation(1967-1978). In this period, theagricultural sector grew 3.4%. Growthwas primarily driven by the oodcrop andplantation sub-sectors; rice productionincreased by more than two million tonsduring the 1970s, and productivity morethan doubled since 1963, to more than 2.5million tons per hectare.

Three key policies intensifcation,extension and diversifcation wereadopted during the second phase andwere supported by the ability to increaseproduction and productivity in agriculture.

During this phase, a strong oundation orhigh growth in the sector was established.Great attention was given by the govern-ment toward construction o in rastruc-ture vital to agriculture, such as irrigration,roads, and supporting industries, e.g.,cement and ertilizer.

The third phase was that o highgrowth (1978-1986). This period was asignifcant one in Indonesias agriculturaleconomy. The agricultural sector grew bymore than 5.7%, because o an economicdevelopment strategy that was based onagriculture. Production o ood, planta-tion crops, fsh, and livestock all increased,with growth o 6.8%; research andtechnological development played a key

role in this. The Green Revolutionprogram and technological advancementsled to an increase in productivity o 5.6%and by 1984, the country had attainedsel -su ciency in ood. Rice productionwas correlated with improved livingconditions among rural communities.

Inspite o this, the Green Revolutionadvanced largely via monoculture systems which were orced upon all regions, de-spite their geographic diversity and di er-ent bases o subsistence, e.g., corn, sweetpotato and other crops making ood se-curity more susceptible to climate changesand resulting in ecological degradation. The Green Revolution also highlighted thedependency o small-scale armers and

arm workers on their landlords andon expensive agricultural inputs, o tenimported, such as seedlings, ertilizer, andpesticide.

The ourth phase was deconstruction(1986-1997). As a result o policies whichhad been adopted previously, the agricul-


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Testimoniestural sector experiencedcontraction during this period, withgrowth as low as 3.4% per year.Policymakers and economists neglectedagriculture until the sector was in seriousneed o repair. The dark days o agriculturegrew worse with the introduction o tech-nocratic economic policies which aimed ata large-scale, though ootloose,industrialization strategy in the early1990s.

Since the mid-1980s, several compo-nents protecting industrial sectors hadbeen in place, contributing todouble-digit growth in the industrial andmanu acturing sectors. At that time, thenotion that Indonesia was already capableo trans oming itsel rom an agrariannation to an industrial nation gainedcurrency. Policies which the governmentadopted at the point were geared towardchanneling all the resources rom theagricultural sector to industry, becausethe government believed that agriculturalprojects could not produce results as astas industry or urban investments. A policyo subsidizing industry by stabilizing theprices o basic goods was adopted topander to urban workers. This policy led tothe destruction o armers livelihoods andthe deterioration o agriculturaldevelopment in Indonesia.

The f th phase was the crisis

period (1997-2001). In this phase, thealready struggling agricultural sector hadto ace the impact o the crisis, namelyabsorbing surplus labor rom thein ormal and urban sectors, and saving theIndonesian economy. The dependence o

armers on expensive productive inputsrom abroada consequence o past

policiesboomeranged on the armerswhen harvests ailed because o droughts.During the crisis, ertilizer subsidies werewithdrawn and imported riceeither inthe orm o ood aid or smuggled rice

ooded the domestic market.

The sixth phase is transition anddecentralization (2001-present). Thisperiod is very uncertain or both economicplayers and the Indonesian agriculturalsector. Despite decentralization, agricul-tural development has not moved orwardbecause o the lack o regional autonomyand authority, which are essential to

ormulating strategies based on compara-tive and competitive advantages. Le t toregional governments, the agricultural sec-tor is increasingly being neglected. A sum-mary o the development path taken byIndonesian agriculture can be seen in Table 1.

During this phase o uncertainty,President Susilo Bambang Yudhoyono haspropounded a model or agricultural

Table 1. Growth in Agricultural Sector (% per year)

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Testimonies

development that does not address issuesconcerning land. Critics are saying thatseeking to revitalize agriculture without

land re orm program is like going throughthe Green Revolution or the second time.

Land Ownership and DistributionAccording to the 1983 Indonesian

Agricultural Census, on average eacharming amily in Indonesia controls an

area o land o 0.98 hectarein Java 0.58ha and outside Java, 1.58 ha. The situation

had worsened by 1993 with an averageland ownership or the whole o Indonesiao 0.83 hain Java 0.47 ha and outsideJava, 1.27 ha. This is the reality o landownership and control. The number o gurem armers (owning land o 0.2 ha orless) continues to rise, rom 9,532,000 in1983 to 10,937,000 in 1993. Thepercentage increase in the number o

gurem armers was greater outsideJava, with a 33.4% increase or a total o 2,840,000 outside Java, and a 9.37%increase or a total o 8,097,000 in Java. In

act the problem outlined above iscompounded by the ever increasingnumber o landless armers or armlabourers. As shown in the 1993Indonesian Agricultural Census, 43% o a

total o 11,084,605 arming householdslive in poverty, and o those who ownland, on average they control no morethan 0.10 hectare. Although it is di cultto determine rom this census data the

vast number o landless arm labourers,without doubt this 43% is dominatedby armers with small holdings and the

amilies o landless arm labourers, whosechildren move to urban areas, living in thedirty outskirts o cities and working as

actory workers.

By the same token only 16%, or a total o 4,421,746 arming amilies own on aver-age more than 1 hectare o armland,while this same group control 69% o total

arm land. I this data is classifed into twogroups those controlling land o lessthan 1 hectare and those controlling lando more than 1 hectare, this shows that84% o rural inhabitants control 31% o total arm land, and the remaining 69% is

Agriculture

http://www. lickr.com/photos/roodee/3325923980/in/photostream/ Licensed under CC by 2.0

Notes: Growth statistics or the revolutionary period (1945-1965) are taken rom

Documents

Asia Pacific Peoples Tribunal on ADB