The Process of Social Impact Assessment (SIA), Module 7 1

MODULE 7: INSTITUTIONAL STRENGTHENING AND

CAPACITY BUILDING

7.1 OVERVIEW AND APPROACHES...............................................................2

7.1.1 Key Issues regarding Institutional Strengthening......................................2

7.1.1.1 Importance of Institutional Strengthening..............................................2
7.1.1.2 Past Experiences .....................................................................................2
7.1.1.3 Roles and Responsibilities......................................................................3
7.1.1.4 International Guidelines and Policies .....................................................4

7.1.2 Approaches to Institutional Strengthening ................................................5

7.1.2.1 Identification of Needs and Capacities ...................................................5
7.1.2.2 Competence and Capacity Building .......................................................5
7.1.2.3 Hand-over of Responsibilities ................................................................6

7.2 TEMPORARY AND PERMANENT INSTITUTIONAL ARRANGEMENTS ..............8

7.2.1 Temporary Institutions during Planning and Construction.......................8

7.2.1.1 Establishing Temporary Institutions.......................................................8
7.2.1.2 Role of Government Agencies ...............................................................8
7.2.1.3 Training and Skills Development ...........................................................9

7.2.2 Permanent Institutions .............................................................................10

7.2.2.1 Legal and Policy Issues ........................................................................10
7.2.2.2 Compensation and Resettlement Monitoring Units..............................10
7.2.2.3 Catchment Management Organisations................................................11
7.2.2.4 Funding Arrangements for Institutions.................................................11

7.3 INSTITUTIONAL ORGANISATION FOR RESETTLEMENT ............................13

7.3.1 Levels of Involvement...............................................................................13

7.3.1.1 National Level of Involvement.............................................................13
7.3.1.2 District and Local Level Involvement ..................................................13
7.3.1.3 Co-ordination and Implementation Organisations ...............................14
7.3.1.4 Responsibility at Community Level .....................................................15

7.3.2 Special Aspects for Resettlement .............................................................15

7.3.2.1 Hybrid Institutional Arrangements.......................................................15
7.3.2.2 Grievance Mechanisms.........................................................................16
7.3.2.3 International Panel of Experts ..............................................................16

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The Process of Social Impact Assessment (SIA), Module 7 2

7.1 Overview and Approaches

7.1.1 Key Issues regarding Institutional Strengthening

7.1.1.1 Importance of Institutional Strengthening

• Lack of qualified and experienced personnel staffing the institutions charged with
carrying out involuntary resettlement and social mitigation and monitoring is a
constraint for good outcomes
• The setting up of new institutions often needs external inputs to tailor them to
their new assignment
• The participation of the affected population in planning and implementation is one
of the critical factors for good resettlement and social programmes
• Attitudes and cultural biases of staff may have a negative effect on the outcomes
programmes in terms of safeguarding the rights of the affected population

In developing countries government institutions and agencies charged with

conducting resettlement and social mitigation programs typically suffer under a lack
of qualified and motivated staff. This negatively affects their ability to handle and
effectively carry out complicated and demanding tasks in connection with
resettlement and development programmes associated with dam projects and other
large infrastructure investments. Both at planning and implementation level a better
quality insurance is needed in order to improve the outcomes of compensation issues
and economic rehabilitation of resettlers.

In many cases there may also be a need for addressing the deficiencies of the
structure of institutions. Often the responsible institutions and government agencies
have a narrow technical mandate and a set-up that is poorly suited to face
challenges presented by complex social issues. Additional and new organisational
structures, both temporal and permanent, may be required, and external assistance
in terms of training and capacity strengthening is often needed to adapt institutions to
their new assignments.

Government institutions and their staff, at both central and local level, are part of
larger bureaucracies that most often employ top-down procedures and approaches in
their operations. Successful resettlement and concomitant economic and social
development programs need to establish two-way communication with the affected
population to secure good participation during the planning, implementation and
monitoring phases.

Sometimes cultural biases and stereotypes among responsible key staff towards the
project affected people, including ethnic minority groups, is a negative factor which
may make programmes less successful than otherwise as it has a tendency to
reduce commitments and readiness to employ participatory approaches.

7.1.1.2 Past Experiences

• Past experience with resettlement and social mitigation is mixed and leaves room
for substantial improvements
• The lack of clear policies has proven to be a factor that have had adverse effects
on PAPs in a number of countries
• The deficient legal basis negatively affects the long-term sustainability of
resettlement and mitigation activities.

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The Process of Social Impact Assessment (SIA), Module 7 3

Past experiences on resettlement in connection with hydropower developments are

indeed mixed. The fact that resettlement so often has been mishandled points
towards deficiencies on the policy level and as well as the institutional level. The
main way governments express their political commitment to good resettlement is by
creating adequate institutional capacity. A number of countries have with
encouragement and dialogue with international and national lending institutions
enacted and improved their sectoral legislation that specifies the institutional
requirements for resettlement.

There is however, still much to be done. Some national agencies prefer to maintain a
policy vacuum rather than issuing binding regulation and institutional procedures that
could improve resettlement performances. Avoiding formal policy commitments may
allow more flexibility in the short term but often prevails at the expense of the affected
population who risks not having their rights and entitlements properly recognised.

In studies of past resettlement projects the absence of formal policy commitments

and good resettlement institutions indicates that the long term sustainability of
resettlement programs has been negatively affected. This can partly be ascribed to a
lack of effective executing institutions with a clear mandate for continued commitment
and post construction follow-up.

Online Case Study: Draft Resettlement Policy for Lao PDR

7.1.1.3 Roles and Responsibilities

• Clarity concerning roles and responsibilities is a prerequisite for good

resettlement
• Local organisations have an important task in long term monitoring and follow up
of long term mitigation measures
• Central organisations are responsible for auditing and policy issues

At the implementation level local organisations and government agencies normally

share the responsibility although the overall responsibility may lie with one
organisation like the political and administrative part of a local government apparatus.
The local level plays a crucial role in terms of delivery of inputs and services and long
term monitoring and follow-up.

Normally local government agencies are understaffed and ill equipped to take on the
responsibilities presented by a larger resettlement operation. Good co-ordination
between different agencies and local organisations is the key to good resettlement
performance, both compensation payment and relocation procedures. This is,
however, in many cases a bottleneck as government bureaucracies both at central
and local level normally consist of technically based vertical pillars with few inter-
links. Setting up the institutional mechanisms to overcome this obstacle thus
becomes a priority for the local level.

Ideally, local organisations, from the village or town to the provincial level, should be
responsible for implementation and monitoring on the ground as well as ongoing
consultations with PAPs while central organisations, such as national environmental
and social divisions of line agencies, are responsible for policy and supervision or
auditing of projects.

One example of this is the case of the Kedung Ombo Hydro Development Project in
Indonesia. Here implementation proceeded without knowledge of the large number of

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The Process of Social Impact Assessment (SIA), Module 7 4

affected villagers who refused to move because local governments were not
responsible for reporting on their migration. (World Bank 2001). The original survey
had found that 75percent of the 24,000 resettlers indicated that they would join
Indonesia’s massive transmigration program and resettle to the outer islands.
However, during project implementation only 25 percent of the resettlers joined the
program. Because of this and the fact it went unreported for such a long time, the
reservoir impoundment had to be delayed until a proper resettlement program
including better compensation rates had been devised and implemented.

Online Case Study: Roles and Responsibilities of the Nam Theun 2 Project

7.1.1.4 International Guidelines and Policies

• Many reports and reviews of social impacts and resettlement mention the
importance of the role of organisations and institutions on the part of the
government as vital to successful project and long-term sustainability

• “Effective organisations are keys to translating resettlement plans into practical

organisations on the ground” (Cernea, 1997,)

• “ Capacity must be built if good outcomes are to be achieved, strengthening civil

society and particularly empowering women to make their voices heard” ( WCD,
2000)

The World Bank has over the last decade focused on the social and economical
impact of involuntary resettlement. In his paper, “Hydropower Dams and Social
Impacts: A Sociological Perspective” Michael M. Cernea points both to the lack of
legally binding and clear resettlement policies and to the deficiencies of institutions
charged with planning and implementing resettlement programs. He states that:
Certain problems are intrinsic to most resettlement organisations. These include
inadequate mandate, insufficient staffing, poor co-ordination, budgetary problems,
poor management, and lack of accountability (Cernea, 1997, p. 18)

The World Bank has also carried out a study of involuntary resettlement in
connection with large dam projects in 6 countries. One of the conclusions is that:
Public agencies are typically limited in their capacity to handle resettlement. In most
of the study’s cases public sector agencies mishandled or ignored resettlement
(World Bank, 2001). The study has been part of the basis on which the World Bank
made a revision of its operational policy on involuntary resettlement.

The World Commission on Dams also addressed the question of institutional

capacity in connection with development of dams. It points to the institutional
implications if the recommendations of the Commission are to be adopted, and
recommends a number of initiatives and follow-up measures for all stakeholders
including government institutions and civil society organisations. The commissions
also states that: Investing in the capacity and process for options assessment and
decision making should be seen as an investment in a long term strategy of lowering
the costs of future projects (WCD, 2000).

Furthermore, WCD advises that national governments review legal, policy and
institutional frameworks, and that line ministries issue criteria and guidelines for
promoting third party reviews and dispute resolution around large dam projects. Civil
society groups like national and international NGOs are recommended to monitor
compliance with agreements, promote transparency concerning dam development
and to contribute to establishment of stakeholder forums.

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The Process of Social Impact Assessment (SIA), Module 7 5

Exercise for reflection: How relevant is the criticism of a lack of strong

organisations and institutions regarding hydropower project relevant for your
country? Use examples to illustrate your conclusion.

7.1.2 Approaches to Institutional Strengthening

7.1.2.1 Identification of Needs and Capacities

• The functioning of institutions and organisations depends largely on its resources

and the qualifications of its staff
• Capacities and competence of staff is normally identified through interviews,
observations and interaction during planning and evaluations
• The incorporation of institutional strengthening as a mitigation measure should
be a key priority

Institutional strengthening normally involves addressing two dimensions of an

organisation: the available resources in terms of staffing and funds and the
qualifications and competence of the personnel. Different techniques and analytical
tools may be employed to assess function and efficiency of an institution, but
normally interviews with key informants and observations of the workings of the
organisation provide a sufficient basis for diagnosing deficiencies and devising
interventions to amend these.

Generally speaking, three broad categories of interventions may be devised to

strengthen the functioning of institutions and organisations: training to improve
competence of staff, reorganisation to make the structure more adapted to the
assigned tasks and, finally, addressing resource shortages.

In connection with resettlement, strengthening of institutions has focused on both

staff competencies and resource availability. The inadequacies that most often is
encountered concerning resettlement staff pertains to attitude and motivation as well
as to necessary technical skills. Technical skills may be the easiest to improve
through technical courses and on the job training while the motivational factor may
prove more elusive. Committing more funds for institutional building must be
addressed during the planning, and recent experiences with resettlement projects
indicates that this need is becoming more acknowledged.

Online Case Study: Capacity Building for LKHP

7.1.2.2 Competence and Capacity Building

• Two main approaches are used in increasing capacity and strengthening

institutions: capacity building and competence building

• Capacity building normally relies on courses, workshops and seminars to transfer

knowledge and technical know-how, aiming at achieving long term sustainability
of project results and effects

• Competence building involves a further step, relying more on the job training and
seeking to assure that knowledge and skills are put into use

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The Process of Social Impact Assessment (SIA), Module 7 6

Capacity building refers to the transferral of the necessary skills and knowledge to
personnel of local institutions in order to ensure the long-term success of the
programme as a whole. The most common method used in capacity building is to
conduct courses, workshops and seminars that address particular needs and
shortcomings. For example, experience has shown that survey and interview
techniques require are skills that local government staff tend to master inadequately
so specifically adapted courses for this will improve the quality and reliability of
baseline and monitoring data that needs to be collected. As an extension of these
skills it is often usefull to do a training on prosessing and analysing collected data
since those who collect the data are likely to be involved with implementing
measures based on the survey results.

Competence building is different from capacity building in that it actually ensures that
the knowledge, skills and understanding is put into action on the ground. Whereas
capacity building is primarily concerned with ensuring the transfer of skills,
competence building deals with application of those skills. An efficient way of
acquiring competence is to do on-the-job training and applying ideas and methods in
the field. To use the example of training on survey techniques the classroom lessons
for the capacity building should be coupled with practical exercises in the field where
the resource persons demonstrate the working approaches and supervise the
trainees. The survey exercises should be as authentic as possible, for instance
forming part of the data and information basis of a project resettlement plan.

7.1.2.3 Hand-over of Responsibilities

• Transfer of responsibilities for project related activities from the project

organisation to local organisation and institutions should be phased and gradual
• Preparations and provisions for transfer of responsibilities should be planned
from the inception of the project, well in advance
• These plans should be included in the overall plan for social mitigation and
rehabilitation and adequately budgeted for

Experiences concerning hand-over of responsibilities and tasks from the project

organisation to local organisations and institutions shows that in most cases it has
been poorly prepared. As a consequence mitigation measures intended to continue
to address the residual and long term negative effects of a project tend to fade away
making the results of previous efforts less sustainable.

Already at the planning stage of the hydropower project the hand over of
responsibilities should be carefully planned and prepared. Ideally the final transferral
of responsibilities should be the culmination of a process of gradual shift from expert-
run project activities to local government or NGO staff taking over responsibilities.
Unfortunately experiences in the past shows that this has not been the case for the
large majority of projects. The project format with its limited time horizon has not
fostered much in the way of sustainability thinking, leaving the responsible
permanent institutions unprepared to cope with lingering negative effects.

Social mitigation and rehabilitation plans need to be long term and looking beyond
the project life, implying that there should be adequate budget provisions for the
preparation of hand-over of responsibilities. This would not only mean capacity and
competence building but also activities to secure post project funding for mitigation of
residual negative effects. It could for example mean lobbying for funding through a
concession or user fee as well as facilitation of a process of seeking funding with
national and international agencies.

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The Process of Social Impact Assessment (SIA), Module 7 7

Online Case Study: Handover plans for the LKHP long-term mitigation

Exercise for reflection: Outline the challenges and difficulties in changing the
institutional structures of government to service the temporary or long-term
interests of a hydropower project.

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The Process of Social Impact Assessment (SIA), Module 7 8

7.2 Temporary and Permanent Institutional Arrangements

7.2.1 Temporary Institutions during Planning and Construction

7.2.1.1 Establishing Temporary Institutions

• At the village level or township level it may be necessary to create temporary

institutions to meet the challenges of hydropower development and resettlement
• Few local institutions will have the experience to deal with complex resettlement
issues and will need considerable support
• Establishing a temporary committee or organisation will improve local capacity in
the long-term through the development of skills

Depending on the context local communities may sometimes lack a suitable social
structure that may serve as a contact between the developers and the government
agencies on the one side and the affected population on the other. In these cases it
may be necessary to create an organisation that can handle issues related to the
hydropower development and facilitate communication. There may already be a
traditional and cultural basis that can be built on in the formation and constitution of
the temporary institution.

Few local institutions will have the experience to deal with complex resettlement
issues and will need considerable support in the formation of such a new body.
Assistance in defining tasks and responsibilities is essential for the smooth running of
programmes and the facilitating of interaction between project staff, researchers and
the local population. Establishing a temporary committee or organisation will improve
local capacity in the long-term through the development of skills. The handling of a
complex dam project will no doubt enhance governance skills of local institutions and
should lead to more efficiency and a better standard of local government in the long-
term.

Online Case Study: The Local Councils and Elders’ Committee (LEC), Karuma Falls

7.2.1.2 Role of Government Agencies

• Government agencies are crucial for the establishment of temporary resettlement

institutions as they normally are staffed with seconded government personnel
• Government personnel of higher ranks also play a role as members and
representatives sitting on boards and committees
• The Resettlement organisation established for Nam Theun 2 Hydropower Project
in Laos illustrates how government staffs play important roles resettlement
processes.

Organising resettlement normally requires creation of committees and bodies on

different administrative levels. The highest level is charged with formulating policies,
approving plans and overseeing and managing the whole resettlement process. The
level below, or mid level, normally function as the executive part of the resettlement
management structure while the lower levels are responsible for the detailed
planning and implementation of the resettlement activities.

The executive level is often staffed by seconded higher government personnel from
various technical departments and line agencies. Local (district) government staff

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The Process of Social Impact Assessment (SIA), Module 7 9

from the administration and technical departments constitute the core of the
implementation level.

Online Case Study: Resettlement organisations of the Nam Theun 2 Project

7.2.1.3 Training and Skills Development

• Building of well functioning institutions requires identification of needs and well

targeted training in various fields
• Specific training in communication, management and various technical fields is
often required for staff of resettlement institutions
• Motivation is an often overlooked aspect of training and skills development which
should be emphasised more
• Language skills may often be a bottleneck for the functioning of institutions that
are supposed to conform to certain international standards

In developing countries the manpower and institutional base on which to build

resettlement institutions may often be weak and deficient. Well identified and adapted
training where skills and capacities are built, is therefore most often a prerequisite for
a successful resettlement and social mitigation process. As soon as the necessary
institutions have been established and its staff nominated, a thorough assessment of
the training needs should be carried out. On the basis of this a training and capacity
building plan can be laid. Given the various, and often little relevant backgrounds the
staff of resettlement institutions are likely to come from, the training plan may end up
being quite broad in its scope, comprising a number of technical fields as well as
management and administration.

One of the most important prerequisites for successful resettlement is the

participation of the affected population in planning and implementation. To establish
good communication and bring forth preferences there is often a need to first
establish an understanding among the staff about the need for participation and
subsequently to train staff, preferably all levels, on participatory working approaches
and techniques.

In seeking not only skills and capacities enhancement but also aiming for increased
competence, meaning the actual employment of skills (see 14.1.2.2), motivation is a
key factor. There may be a tendency among staffs who receive training not to utilise
their new acquired knowledge in their work. There are several reasons for that
relating to bureaucratic culture and rigidity but motivation may also be one main
cause. Therefore the motivational factor should feature prominently in any training
that are conducted to qualify and prepare staff for their assignments in resettlement
institutions.

Finally, language skills among staff are often a constraint for the functioning of
institutions that co-operate closely with international organisations and consultants.
Insufficient language skills may hamper the understanding of requirements and
guidelines and restrict the communication between national and international staff.
Progress reporting on the resettlement process, can also suffer under a general lack
of language skills. Therefore it is often well invested money to train resettlement staff
in, most often, English, as a means of amending and preventing communication
failures that so often complicates resettlement processes.

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The Process of Social Impact Assessment (SIA), Module 7 10

7.2.2 Permanent Institutions

7.2.2.1 Legal and Policy Issues

• Policies and rules that should regulate resettlement and assure the entitlements
of the affected population are often insufficient or missing in developing countries
• Resettlement institutions depend on the enactment of state policy and protective
legislation to take appropriate and effective action
• Specific legislation mandating effective public response is necessary to make
hydropower development socially sustainable

National policies and regulations concerning resettlement are often inadequate for
the establishment of and appropriate action by resettlement institutions in developing
countries. Without a firm legal basis, resettlement institutions remain disempowered
and weak, leaving room open for manipulations and development of corruptive
practices, which deprives the affected population of their rights and entitlements.

Development of national legislation and regulations should be a first priority in the

building of institutions for resettlement. The absence of a legal framework for
resettlement is often seen as beneficial for the responsible government agencies as it
provides necessary flexibility. However, recent experiences show that governments,
in a number of countries, increasingly are putting more efforts into creating a firm
legal basis for resettlement. Often the inspiration and push to get this in place comes
from the increasing attention resettlement receives around the developing world as
well as from bi-lateral and multilateral financing organisations which requires a better
framework for resettlement.

Studies of large development projects by the World Bank over the last decade clearly
indicates the linkage between specific legislation and the sustainability of
resettlement activities as the institutions charged with carrying out resettlement is
compelled by the legal requirements to pay due attention to getting resettlement
right. A binding legal basis at national level most often also entails monitoring and
outside inspection of the performance of the responsible institutions.

Online Case Study: Watershed Management and Protection Authority of the Nam
Theun 2 Catchment

7.2.2.2 Compensation and Resettlement Monitoring Units

• Monitoring and evaluation are essential factors to ensure that high standards are
maintained throughout resettlement processes
• Internal monitoring of the process of implementing a resettlement plan is normally
taken care of by the responsible agencies themselves as this concerns reporting
on construction activities, facilitation of relocation of households, etc.
• External monitoring is carried out by nominated independent institutions and
experts focusing more on the outcomes and results of a resettlement process

Monitoring and evaluation are normally incorporated in most kinds of projects as a

means of ensuring quality and gauging whether certain project objectives are met or
not. Monitoring of resettlement activities as part of larger development projects is no
exception to this and needs to be explicitly provided for and focused on during
planning and implementation. Depending on who is carrying out the monitoring one

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The Process of Social Impact Assessment (SIA), Module 7 11

may speak of “internal and external monitoring; while focusing more on activities and
results it is common to distinguished between process and outcome / impact
monitoring.

Internal monitoring is carried out by one of the units within the system of established
resettlement institutions and normally focuses on the implementation of activities in
relation to plan. This may involve following up and reporting on construction activities,
relocation of people, payment of compensation etc, in other words, internal
monitoring will in many cases be synonymous with process monitoring.

External monitoring is undertaken by an independent institution or one or more

externally recruited specialists. As the focus is more on economic and social
conditions rather than on the details of field implementation, it broadly corresponds to
outcome / impact monitoring. In addition, external monitoring may look at the overall
performance of the institutions in charge and is becoming increasingly more common
in connection with large-scale and potentially controversial development projects.

7.2.2.3 Catchment Management Organisations

• In connection with hydropower development it is often necessary to establish

institutions on the basis of the geographical entity constituted by a defined
catchment area
• Catchment management organisations may have both a technical and a social
mandate
• In the case of the “Lower Kihansi Hydropower Development Project” the
catchment area comprised 3 districts and 2 regions necessitating establishment
of institutions across administrative boundaries

Managing water resources with the geographical unit of the catchment as a basis,
has over the last decades become a standard approach. However, catchment areas
normally cut across administrative boundaries, thus creating a need for common
institutions, or organisational bodies that addresses the need for joint action and co-
ordination. Establishing, and making these types of institutions work, is often a
challenging task as there may be widely diverging interest within the administrative
units contained in the catchment. One part of the catchment may for instance insist
on implementing a particular type of activity that would bring more resources into
their area at the expense of the others. It is therefore often beneficial to have a wider
participation in these institutions, for instance in the form of representation from a
higher political or administrative level that can mediate and build consensus among
the members.

Catchment management institutions may be charged with various and combined

tasks. One task that normally is given to such institutions is to work towards
maintaining the capacity of the catchment’s ability to yield water for various uses like
irrigation and generation of electricity through implementation of conservation
activities and measures. Another task could be to administrate and allocate funds
deriving from the development of the catchment.

Online Case Study: LKHP catchment management institutional arrangements

7.2.2.4 Funding Arrangements for Institutions

• For their function the institutions are dependant on reliable funding sources which
enables long term planning and systematic work

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The Process of Social Impact Assessment (SIA), Module 7 12

• Concession and user fees from the project owner is the most common source of
funding for permanent institutions
• Funding for the temporary institutions established in connection with resettlement
and immediate mitigation of negative impacts should normally come from the
project budget
• There also exist possibilities for external funding the form of time limited support
from various donors for temporary institutions

Institutions need a reliable funding source to function well and perform according to
their mandates. Unfortunately there are numerous examples that erratic and
insufficient funding has prevented institutions from fulfilling their tasks and mission in
a satisfactory manner at the loss and expense of the project affected population. A
problematic funding situation will also erode motivation and lower work performance
of staff charged with carrying out resettlement and mitigation. A key factor in avoiding
getting into the predicaments of uncertain funding is to formulate clear requirements
that ample provisions for resettlement and mitigation institutions are included in the
project budget already from an early planning stage. A developer should not be
allowed to externalise resettlement costs.

The long-term funding of permanent institutions normally depends on the possibilities

of attaching a fee to the awarding of the water-user right to the developer and project
owner. Normally the size of the fee would be a certain low percentage of the revenue
the operation of the hydropower plant generates for its owner. The fee would go
towards the costs of running the institution as well as paying for the continuation of
mitigation measures.

Temporary institutions would in most cases rely on the project budget for their
operation. In the cases where international funding agencies like the World Bank is
involved there are clear requirements to the developer to include operational costs of
institutions on the project budget. However, provisions for resettlement institutions
are not always included where for instance national governments or national lending
institutions supply the funds. In many cases the authorities make some unspecified
and non-quantified promises towards covering resettlement costs including
operational costs for institutions, which means that sufficient funds may or may not
be forthcoming when needed and requested.

Another possibility for covering institutional costs is to obtain some sort of support
and funding from external donors. This is an option only for a limited period of time as
international donor agencies normally funds activities within a project framework,
requiring hand over to other institutions or phasing in of alternative funding sources.
However, external funding from international agencies may provide a necessary
breathing space where institutions are allowed to consolidate and work towards
obtaining long-term funding in the form of for instance a concession fee.

Online Case Study: Funding arrangements for Micro-hydro development

Exercise for reflection: Outline the key steps in establishing new

organisational bodies in relation to sustainable hydropower development in
your country. What are the greatest challenges regarding organisation?

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The Process of Social Impact Assessment (SIA), Module 7 13

7.3 Institutional Organisation for Resettlement

7.3.1 Levels of Involvement

7.3.1.1 National Level of Involvement

• The national level has the responsibility for putting in place the frame conditions
and basic rules for resettlement through the formulation and enactment of state
policy and protective legislation
• The central authorities also has a role to play in the monitoring and evaluation of
the overall outcomes of resettlement and of the performance of the institutions
charged with carrying it out
• Through its policy formulation and budget allocations to resettlement institutions
the national level largely sets the economic frames for resettlement

Over the last years central authorities in many countries have put more efforts into
formulating and enacting resettlement policies and legislation aimed at regulating and
safeguarding the rights and entitlements of the population affected by resettlement.
However, much remains to be done as a general disinterest to handle resettlement
properly still prevails amongst many developers and central governments. Under the
inspiration of policies adopted by multilateral and bilateral funding agencies national
level governments need to continue their work to formulate national policies on
resettlement.

Monitoring and evaluation is a key to securing that certain standards and objectives
are met in connection with resettlement. Ultimately, it is the national government level
that has the overall responsibility for performance of the resettlement institutions. The
national level is therefore obliged, together with other stakeholders, to take part in
project reviews and evaluation of the progress and outcome of resettlement activities.

Finally, the national level has a role to play in the financing of resettlement operations
through the allocation and channelling of funds deriving from their own sources or
from external donors. It will for instance often be the case that a line ministry and its
province and district departments are charged with specified tasks in connection with
resettlement for which it needs additional and supplementary funding. One example
here can be the preparation of the sites for resettlement that is often handled by
forest and agricultural departments at province and district level.

7.3.1.2 District and Local Level Involvement

• The actual implementation of resettlement normally takes place at the district and
community level
• Organisations involved at this level comprise local government departments, for
resettlements may be made
• Private sector involvement in resettlement which over the last years has been
encouraged by funding agencies, also mainly manifests itself at the district and
local level
• Specially formed working groups charged with planning and implementation at
the local level are necessary in most cases

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The Process of Social Impact Assessment (SIA), Module 7 14

Resettlement activities take place in the context of districts and local communities
where a variety of organisations and stakeholders interact to produce the detailed
plans and subsequently the physical and institutional structures needed for the
relocation of people. Participation of the affected population, being one of the most
critical and important factors for successful resettlement, is also taken care of at he
local level.

Many organisations and institutions are involved in the planning and implementation
of resettlement activities at district and local level. Most often, local government
departments are heavily involved through direct implementation of resettlement
activities or the secondment of staff to temporary resettlement institutions. NGOs and
CBOs are normally there to represent and add weight to the interests and concerns
of the affected population as well as voicing environmental concerns.

The private sector participation in resettlement activities also mainly concerns the
local level. This may for instance manifest itself by private businesses and
companies being employed to construct housing and supply compensatory
equipment to the resettled households. Local NGOs may also be involved in carrying
out social investigations to provide baseline and monitoring data as well as tackling
practical tasks in connection with resettlement.

Online Case Study: Local Level Organisation for the Nam Theun 2 HPP, Lao PDR

7.3.1.3 Co-ordination and Implementation Organisations

• In large infrastructure projects involving many stakeholders and actors co-

ordination is a critical issue for producing the best possible outcomes
• The implementing organisations are often identical to or derived from local
government departments which often have a structure and culture that does not
invite co-operation and co-ordination across their vertical structures
• Management and co-ordination may need to rest with a special purpose
Management Unit designed for the project

The World Bank identified in its study of involuntary resettlement (World Bank, 1988)
4 major common factors that explain why resettlement worked in some cases and
failed in others. These were: 1) political commitment expressed in policy and law; 2)
sound social analysis; 3) accurate cost assessment; and 4) effective executing
organisations and public participation. Except for the first factor co-ordinating and
implementing organisations are largely responsible for the 3 other, indicating that
their function and performance are crucial for the success or failure of resettlement.

Government agencies and bureaucracies often lack flexibility and with vertical top-
down structures that relates and communicates to a limited extent with their
counterparts in other technical departments at the same level. Given the integrated
and multifaceted nature of resettlement where many technical and social issues
come together, good co-ordination and co-operation is of vital importance.
Organisations specifically mandated to facilitate interaction between the different
government agencies and other organisations charged with implementation and
planning are therefore normally established.

Online Case Study: Resettlement structure for the Nam Theun 2 HPP, Lao PDR

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The Process of Social Impact Assessment (SIA), Module 7 15

7.3.1.4 Responsibility at Community Level

• Community and village committees play an important role as links between the
project and the affected population
• The community level committees are normally charged with the task of organising
the practicalities of resettlement
• At community level NGOs can play a role in acting as advisors to the affected
population in their negotiation with the project and the higher level resettlement
institutions

On of the most important tasks of community level committees is to function as a

contact point and channel of communication between the affected population and
project its associated resettlement institutions. They are especially important in
securing that planning and implementation are carried out in a participatory manner
as they have the task of organising and facilitating information and consultation
meetings. The members of community committees are normally selected by
consensus amongst the villagers.

In the actual implementation of resettlement the committees act as organisers and

facilitators on village level solving practical and logistical problems in co-operation
with the project and the other organisations involved in the relocation of people. They
have also the task of making sure that all households get the assistance they need in
terms of transport for their household items and other assets.

Local and regional NGOs may have a role to play at community level supporting the
villagers in their dealings and negotiations with the project. NGOs also have
grassroot experience and competence concerning participatory working methods and
can be a good facilitator during village level consultations. Finally, NGOs can be
engaged to carry out socio-economic surveys on behalf of the project and its
resettlement institutions.

Exercise for reflection: What are the mechanisms for establishing co-operation
between various government line agencies and independent bodies when
implementing a hydropower project in your country?

7.3.2 Special Aspects for Resettlement

7.3.2.1 Hybrid Institutional Arrangements

• It is sometimes useful and convenient to create institutions with participation from

both public ant private sector
• Such solutions can contribute to smoother implementation and to a regional
growth in the economy
• The World Bank is currently trying to promote more private sector participation in
resettlement

In most societies the public and private sector co-operates and complements each
other in varying degrees. The trend in western countries over the last decade has for
instance been to involve the private sector more and more in the delivery of social

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The Process of Social Impact Assessment (SIA), Module 7 16

services. In a resettlement situation it may also be useful to utilise the advantages

and synergism of a public – private sector co-operation.

The private sector can normally contribute with more efficient management and less
bureaucratic procedures while the developer (company) and the government can be
responsible for overall planning, monitoring of implementation and funding of
activities. There is also a sharing of responsibilities and roles between the
government and the developer. The developer may for instance employ well qualified
advisors and managers to work alongside government personnel in the executive
resettlement organisations.

It is an explicit policy of the World Bank to promote private sector participation in

development in general and projects involving resettlement is no exception. It is
however easier said than done, and to date there are no good and obvious examples
of this other than private companies acting as suppliers and private research
institutions doing surveys and social investigations. It is expected that private sector
involvement will be more emphasised in the future.

7.3.2.2 Grievance Mechanisms

• In connection with large projects involving compensation and resettlement it is an

established practice to institute grievance mechanisms that allow the affected
population to appeal disagreeable decisions
• Grievance procedures normally involve several steps with rights of appeal where
complaints can be taken to higher levels, the last stage usually being the local
courts

Grievance procedures are normally instituted to ensure that disagreeable decisions

in connection with resettlement and compensation can be appealed by people who
think themselves unfairly treated and insufficiently compensated. Generally there are
2 types of grievances that potentially can be raised: grievances related to
compensation for loss of land and assets, and grievances related to entitlements and
resettlement arrangements.

Grievance mechanisms involve several stages where complaints can be brought to

progressively higher levels. These levels may consist of permanent administrative /
political bodies, or of institutions created specifically to carry out resettlement. The
normal judicial system represented by the local courts offers a last resort of appeal
should the grievance mechanism fail to resolve the dispute to the satisfaction of the
claimant.

Online Case Study: Nam Theun 2 Grievance Procedure

7.3.2.3 International Panel of Experts

• Internationally recruited “Panel of Experts” (POE) are often used to provide

independent assessments and advise on social and environmental issues in
connection with large infrastructure development projects.
• The POE acts only on an advisory basis without any formal power to directly
interfere in the planning and implementation of projects

In connection with larger infrastructure projects it may be desirable to establish a

“Panel of Experts” which can give external guidance to the project management on
social and environmental issues. The Panel would normally conduct site visits

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The Process of Social Impact Assessment (SIA), Module 7 17

according to an agreed schedule, review plans and assess the progress of the
project implementation. Based on the periodical review visits the Panel will prepare
reports that include descriptions of observations, findings and recommendations for
improvements.

The main purpose of the panel is to provide guidance and advice to the project
management concerning operations - not to issue directives that the management is
obliged to follow. However, the project management normally would have to react to
the reports by commenting and explaining the critical issues raised by the panel.

Online Case Study: POE for the Nam Theun 2

Exercise for reflection: Outline measures to ensure transparency in terms of

laws and procedures for the development of a hydropower project.

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