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

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By Marta Kasztelan

Today in Manila, Philippines, the internal watchdog of the Asian Development Bank (ADB) – the Complaints Review Panel (CRP) – released its investigation report of the Cambodian Railway Rehabilitation Project. In what some experts claim to be the “most damning“ probe into the ADB’s practices to date, the panel noted the bank must undergo a “mind shift“ in the way it treats people impacted by its projects.

The accountability body found that the regional bank failed to comply with its policies and procedures regarding the resettlement of over 4,000 families displaced by a $143 million project it funded to renovate Cambodia’s dilapidated railways.

The CRP‘s report came on the back of a 17-month investigation, following a complaint filed on behalf of affected families by Inclusive Development International (IDI) and Equitable Cambodia. ADB’s Board of Directors approved the recommendations and findings of the panel on January 31.

The panel found that families affected by the railway 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 ADB.” It went on to state that the policy breaches left a very large number of affected households worse off and impoverished.

Im Sam Euen‘s is one of the thousands of families displaced by the investment. The 58-year-old mother of four was forced to move to the Trapaing Anchanh relocation site two years ago. Her 10-person household received $800 dollars compensation and was shifted 28 kilometres away from Phnom Penh’s Russey Kao district, where she had lived since 1999.

“There was not much I could do with this money. Most of it was spent on the moving expenses and on transport for my children, on whom I rely for income, so they could get to work,“ she said.

It wasn’t long before her children moved closer to their workplace. With them disappeared the financial net and stability for the remaining family members, including grandchildren.

Struggling to make ends meet and with no employment opportunities in sight, Euen quickly fell prey to a local loan shark. One year after borrowing $1,500 from a private moneylender, she had to pay back $3,000. Because she didn’t have the money, Euen had to ask the same man to take out a $4,000 loan for her from a microfinance company, so she could pay him off. The result? The woman will soon become a renter in her own home.

She now hopes the ADB will help her out. And help it should, according to the CRP and to ADB’s statement published in response to the findings of the investigation. The panel made a number of recommendations for remedies, including establishing a $3-4 million “compensation deficit payment scheme“ and a debt workout scheme for highly indebted households, among others.

In an unprecedented move, the ADB released a statement last week admitting to its malfeasance. The bank recognised that displaced households were insufficiently compensated, and that it failed to fully comply with its own policies relating to consultation and communication with affected families. The funder also conceded to not having an appropriate grievance process, to delays in helping the evictees with income-restoration activities, and to deficiencies with some relocation sites.

It agreed that the compensation deficit, together with other deficiencies, should be rectified as soon as possible. The bank also emphasised its commitment to “immediately engaging with the Government of Cambodia and other stakeholders to prepare an achievable, time-bound action plan” that will be put together within 60 days.

Asked about details and possible costs of the implementation of the new action plan, a Communication Specialist at ADB, Karen Palmer, told Asian Correspondent the bank would be able to provide more information once it “had conducted consultations with the government and other parties“.

Even though human rights watchdogs have been raising concerns over adverse impacts of the project since 2010, the ADB never before assumed responsibility for the displaced people. Instead, it pointed the finger at the authorities, which are officially in charge of the resettlement process. Nhean Leang, the Undersecretary of State at the Ministry of Finance, who is also a member of the Inter-ministerial Resettlement Committee, could not be reached for comment.

In 2012, giving into pressure from rights groups, the ADB appointed an independent resettlement expert Professor Michael Cernea to conduct an examination of the situation. His report heavily criticised the resettlement process and concluded that the relocated people had been left worse off. Cautious of the waves these findings would create, the ADB never released Cernea’s study in its entirety. Only the report’s recommendations were made public, after the bank’s president decided “the harm that would result from the disclosure of the entire Report would be substantial, immediate, and likely irreparable, and outweighs the benefits of disclosure.”

The sudden shift in ADB‘s stance was welcomed by rights watchdogs monitoring the railway‘s rehabilitation. Natalie Bugalski, Legal Director at IDI, said she was relieved to see the bank’s Board insist that the project be brought into compliance. But as she pointed out “the devil is in the detail“ and the ADB must ensure that “displaced families are fully compensated for all their losses and rehabilitated to their previous living conditions or better.”

http://asiancorrespondent.com/119352/internal-probe-adb-cambodia-rail-project-left-thousands-in-poverty/

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Cambodian aid project partly funded by Australia led to child deaths, report finds

A project partly funded by Australia to rebuild Cambodia’s dilapidated railway was deeply flawed, caused harm to thousands of impoverished people and contributed to the deaths of several children, an internal review has found.

Thirteen-year-old Hut Heap and her nine-year-old brother Hut Hoeub drowned in a pond in search for water after their family was uprooted from their home to allow work to begin on the rail project in May 2010.

A scathing review found the family and 50 others taken to a resettlement site were not provided with potable water, violating compliance of the Asian Development Bank’s rules on resettling people.

“Any reasonable person would conclude that the resettled people, including the children concerned, would resort to other sources of water in this situation,” a report by the bank’s Compliance Review Panel found. “It was foreseeable that an accident of this nature could happen,” it said.

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Fairfax Media reported in November 2010 that the children went to the eight-metre pond because there was no fresh piped water at the resettlement site in Battambang province. When Hut Hoeub fell in his sister tried to save him but they both drowned.

The 180-page report said the $US140 million ($156 million) project caused “direct, adverse and material harm” to thousands of evicted families.

The project is operated by Toll Royal Railway, a subsidiary of Melbourne firm Toll Holdings and its partner, Cambodia’s Royal Group of Companies, and financed by the Asian Development Bank and the former Australian development agency AusAid.

The report said another resettled child was killed when hit by a vehicle while walking a longer than usual distance home from school.

An estimated 4000 families, most of them impoverished, were forced from their homes to make way for the strategically important railway that will link Singapore and China through Thailand, Malaysia and Vietnam.

The report, released after a 17-month investigation, said there were major flaws when the Asian Development Bank designed the project in 2006. The report identified inadequate consultation with affected families, a lack of indexed compensation for them and replacement houses that were of such a poor standard that they did not improve the situation of the resettled families.

Formed in the 1960s to facilitate economic growth in Asia’s developing countries with the aim of alleviating poverty, the project in Cambodia actually drove families deeper into debt and poverty, the report said.

Resettlement sites were far from families’ jobs and there were “consideration inaccuracies” in inventories for the properties that families were forced to leave. Some families were given only $US200 to relocate.

The report said families should be given up to $US4 million in additional compensation. It said the bank’s staff must “undergo a mind shift” in their approach to future resettlement projects.

Mistakes were “particularly grievous” because they repeated many of the same mistakes made on a past road building project undertaken by the bank, the report said.

Human rights groups and non-government organisations have been campaigning for the bank and AusAid to do more for the families.

“It is an outrage that the ADB failed to act all these years while people fell into a spiral of debt and poverty after the resettlement plans it approved turned out to be disastrous,” said David Pred, managing director of the NGO Inclusive Development International, one of the campaigners.

In October 2012, 30 of the affected families filed a complaint with the Australian Human Rights Commission over what they said were breaches of basic human rights.

Following the report’s release the bank has promised to consult those involved in the project, including families, before working out a plan of action within two months.

AusAid, the agency responsible at the time for managing Australia’s overseas aid program, rejected criticisms of the project in 2012, saying it was “fully consistent with Australia’s international legal obligations”.

AusAid had provided $US23.5 million for the project in two tranches.

The agency was integrated into the Department of Foreign Affairs and Trade last year. A spokesman for the department said the Australian government supported the decision of the bank to bring the project into full compliance with its safeguard policies, as recommended by the review panel.

“Although Australia no longer finances works on the railway, we look forward to working constructively with partners responsible for implementation of the report’s recommendations,” the spokesman said.

Comment was being sought from Toll Royal Railway, which has a 30-year contract to build and run the railway.

http://www.smh.com.au/world/cambodian-aid-project-partly-funded-by-australia-led-to-child-deaths-report-finds-20140209-hvbqb.html