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Report: Development bank’s Cambodia rail project left thousands in poverty

By Marta Kasztelan Feb 07, 2014 Today in Manila, Philippines, the internal atchdo! of the "sian Development #ank $"D#% & the Complaints Revie Panel $CRP% & released its investi!ation report of the Cambodian Rail ay Rehabilitation Project' (n hat some e)perts claim to be the *most damnin!* probe into the "D#’s practices to date, the panel noted the bank must under!o a *mind shift* in the ay it treats people impacted by its projects' The accountability body found that the re!ional bank failed to comply ith its policies and procedures re!ardin! the resettlement of over +,,,, families displaced by a -.+/ million project it funded to renovate Cambodia’s dilapidated rail ays' The CRP0s report came on the back of a .12month investi!ation, follo in! a complaint filed on behalf of affected families by (nclusive Development (nternational $(D(% and 34uitable Cambodia' "D#’s #oard of Directors approved the recommendations and

findin!s of the panel on 5anuary /.' The panel found that families affected by the rail ay rehabilitation project *suffered loss of property, livelihoods, and incomes, and as a result have borne a disproportionate cost and burden of development efforts funded by "D#'6 (t ent on to state that the policy breaches left a very lar!e number of affected households orse off and impoverished' (m 7am 3uen0s is one of the thousands of families displaced by the investment' The 892year2old mother of four as forced to move to the Trapain! "nchanh relocation site t o years a!o' :er .,2person household received -9,, dollars compensation and as shifted ;9 kilometres a ay from Phnom Penh’s Russey <ao district, here she had lived since .===' “There as not much ( could do ith this money' Most of it as spent on the movin! e)penses and on transport for my children, on hom ( rely for income, so they could !et to ork,* she said' (t asn’t lon! before her children moved closer to their orkplace' >ith them disappeared the financial net and stability for the remainin! family members, includin! !randchildren' 7tru!!lin! to make ends meet and ith no employment opportunities in si!ht, 3uen 4uickly fell prey to a local loan shark' ?ne year after borro in! -.,8,, from a private moneylender, she had to pay back -/,,,,' #ecause she didn’t have the money, 3uen had to ask the same man to take out a -+,,,, loan for her from a microfinance company, so she could pay him off' The result@ The oman ill soon become a renter in her o n home' 7he no hopes the "D# ill help her out' "nd help it should, accordin! to the CRP and to "D#’s statement published in response to the findin!s of the investi!ation' The panel made a number of recommendations for remedies, includin! establishin! a -/2+ million *compensation deficit payment scheme* and a debt orkout scheme for hi!hly indebted households, amon! others' (n an unprecedented move, the "D# released a statement last eek admittin! to its malfeasance' The bank reco!nised that displaced households ere insufficiently compensated, and that it failed to fully comply ith its o n policies relatin! to consultation and communication ith affected families' The funder also conceded to not havin! an appropriate !rievance process, to delays in helpin! the evictees ith income2restoration activities, and to deficiencies ith some relocation sites'

(t a!reed that the compensation deficit, to!ether ith other deficiencies, should be rectified as soon as possible' The bank also emphasised its commitment to *immediately en!a!in! ith the Aovernment of Cambodia and other stakeholders to prepare an achievable, time2bound action plan6 that ill be put to!ether ithin B, days' "sked about details and possible costs of the implementation of the ne action plan, a Communication 7pecialist at "D#, <aren Palmer, told "sian Correspondent the bank ould be able to provide more information once it *had conducted consultations ith the !overnment and other parties*' 3ven thou!h human ri!hts atchdo!s have been raisin! concerns over adverse impacts of the project since ;,.,, the "D# never before assumed responsibility for the displaced people' (nstead, it pointed the fin!er at the authorities, hich are officially in char!e of the resettlement process' Chean Dean!, the Endersecretary of 7tate at the Ministry of Finance, ho is also a member of the (nter2ministerial Resettlement Committee, could not be reached for comment' (n ;,.;, !ivin! into pressure from ri!hts !roups, the "D# appointed an independent resettlement e)pert Professor Michael Cernea to conduct an e)amination of the situation' :is report heavily criticised the resettlement process and concluded that the relocated people had been left orse off' Cautious of the aves these findin!s ould create, the "D# never released Cernea’s study in its entirety' ?nly the report’s recommendations ere made public, after thebank’s president decided *the harm that ould result from the disclosure of the entire Report ould be substantial, immediate, and likely irreparable, and out ei!hs the benefits of disclosure'6 The sudden shift in "D#0s stance as elcomed by ri!hts atchdo!s monitorin! the rail ay0s rehabilitation' Catalie #u!alski, De!al Director at (D(, said she as relieved to see the bank’s #oard insist that the project be brou!ht into compliance' #ut as she pointed out *the devil is in the detail* and the "D# must ensure that *displaced families are fully compensated for all their losses and rehabilitated to their previous livin! conditions or better'6 Posted by Thavam