By Jiten Yumnam /
The World Bank (WB) and other international financial institutions (IFIs) have been involved extensively in financing development projects in India’s North East. This intensified especially since India adopted the Act East Policy in 2014. But as early as June 1991, India launched a comprehensive economic reform program in a time of economic crisis, the dissolution of the Soviet Union, and World Bank conditionalities. The World Bank supported US$ 500 million under its structural adjustment program and pursued economic liberalization and privatization of various sectors. Since then, various agriculture, energy, urban reform, forestry, and climate change and Covid 19 responses in India.
An overview of the World Bank financing in India’s North East
The World Bank is one of the leading International Financial Institutions (IFIs) involved in financing major infrastructure projects. Some of these projects are financed by the World Bank directly; others through financial intermediaries. In the latter, the International Financial Corporation (IFC), the private sector lending arm of the World Bank, financed several private equity funds and financial institutions. Energy projects and related infrastructure constitute a focus—from high voltage transmission and distribution lines, the rehabilitation and construction of dams, road projects, among others. Some of the notable projects include the following:
- Funding of dams in Sikkim: The International Financial Corporation (IFC), the private sector lending arm of the World Bank, has been financing large dams in the North East, such as the 500 MW Teesta VI Hydroelectric Project, and the 1200 MW Teesta III Hydroelectric Project. The IFC also financed US$ 3.19 billion for the NHPC (formerly called the National Hydroelectric Power Corporation) that is operating the 510 MW Teesta V HEP. The NHPC received investment from the IFC through the commercial banks Housing Development Finance Corporation, Kotak Mahindra, Yes Bank, and Industrial Credit and Investment Corporation of India. The NHPC also took a loan of Rs 4,500 crore from Power Finance Corporation and Rural Electricity Corporation, for reviving the Teesta VI HEP project in Sikkim.
- Dam rehabilitation in Manipur and Meghalaya: The World Bank has been funding the rehabilitation and improvement of dams in the States of Meghalaya and Manipur under Phase II of the Dam Rehabilitation and Improvement Project (DRIP). As part of the project, the World Bank is funding the rehabilitation for Singda dam, and the the Imphal Barrage and Khuga dam, in Manipur. It is also financing the renovation of four dams at a cost of Rs 441 crore in Meghalaya: the Umiam Stage-I dam (Rs 215.45 crore), Umiam-Umtru Stage-III concrete dam (Rs 73.10 crore), Umiam-Umtru Stage-IV concrete dam (Rs 77.42 crore) and Myntdu-Leshka Stage-I dam (Rs 75.03 crore) in Meghalaya. The Meghalaya Power Generation Corporation Limited (MePGCL) will undertake the project.
- Road projects and power distribution: The World Bank, on June 2014, approved a US$ 107 million credit for Mizoram State Roads II – Regional Transport Connectivity Project. The Bank funded the Assam Road Project from 2012 till 2018 to enhance the road connectivity of Assam, to improve its connectivity and regional integration. It also approved a US$ 470 million loan on 24 June 2016 to augment transmission and distribution networks in six states for the North Eastern Region Power System Improvement Project. The World Bank financed a major portion of the Rs. 8,150 crores of ambition for the projects.
- Lafarge mining in Meghalaya: The IFC, along with Asian Development Bank (ADB), and the German Investment Corporation (DEG, or Deutsche Investitions- und Entwicklungsgesellschaft). have co-financed limestone mining operations in Meghalaya state. The financial institutions co-financed with the Lafarge Group of France and Cementos Molins of Spain. The Lafarge Surma Cement Project, run by French multinational company Lafarge, received a loan of US$ 45 million from the IFC in 2003.
- Agribusiness in Assam: Since 2012, the Indian government’s Ministry of Development of North Eastern Region (DONER) and the North Eastern Council (NEC) have been implementing the North East Rural Livelihood Project (NERLP). It is a US$ 144.4 million-worth project supported by the World Bank. The NERLP is aimed at promoting the livelihood of rural communities over five years. In 2009, the IFC of the World Bank financed US$ 7.8 million to Amalgamated Plantations Private Limited (APPL) for tea plantations in Assam. The company has 25 tea plantations in Assam and West Bengal, with the Tata Group as its major stakeholder— 41 percent of the company shares are owned by Tata Global Beverages and 25 percent by Tata Investment Corporation.
Dams and neoliberalism
The World Bank has been pursuing a neoliberal agenda in North East. On the policy side, a study commissioned by the World Bank in 2007, entitled, “Development and Growth in North East India: The Natural Resources, Water and Environment Nexus”, prescribed for the economic liberalization and free enterprises. In practice, World Bank financing has undermined Indigenous Peoples rights in the region. Projects such as roads, high voltage transmission and distribution lines, extractive industries, and the policy prescriptions guided and financed by the IFIs have undermined the free, prior, and informed consent. There are widespread concerns that the financing of the 400 KV high voltage transmission and distribution lines and the mega road projects by the World Bank in the North East will facilitate the construction of more than 200 mega-dams.
Dams such as Teesta III HEP, constructed with the help of IFC financing through financial intermediaries, undermined Indigenous Peoples rights to self-determination and to their resources in the Teesta River. Similarly, the IFC-funded Lafarge mining in Meghalaya meant arbitrary land acquisition that undermined traditional decision-making institutions. The land acquisition to support the mining companies also violates the Meghalaya Transfer of Land (Regulation) Act of 1971,[1] which was enacted to protect tribals from land alienation – the loss of control over such collective resources. The loss of agricultural and forest lands has deprived, for example, the Khasi people of their ancestral land and meager livelihood sources.
There are renewed concerns that the World Bank financing of the Singda dam and Khuga dam rehabilitation and renovation project will cause further threats to the land of the already affected communities. There is no guarantee that the renovation with World Bank financing can ensure the functioning of these dams. In 2013, villagers of Kadangband and Ireng villages objected to the government’s plan to expand the area for renovation of the dam and the development of a catchment area.[2] The Joing Action Committee against Forced Eviction of Singda Kadangband organized a protest on 22nd July 2013 resolving against any forced eviction and acquisition of their land.
Indigenous Peoples across the regionobject to the construction of mega-projects such as large dams, which are unsustainable. The dams are unsustainable as they lead to the loss of Indigenous Peoples’ land, with adverse environment impacts. For example, the enormous scale of blasting, tunneling, hillside cutting, and excavations to construct Teesta III HEP, Teesta V HEP and Teesta VI HEP made for a hazardous environment, and worsened the impacts of the 2011 Sikkim earthquake. The Teesta III HEP project, funded by IFC through financial intermediaries and NHPC, already caused massive loss of flora and fauna, and aggravated disasters in downstream areas of the dam. The use of heavy explosive materials in blasting hills for limestone has led to cracks on earth and drying up water sources in the Shella region in Meghalaya.[3]
The financing processes that involve the IFC lack transparency: information is not fully disclosed, especially in IFC funding of unsustainable energy projects through private equity funds and other financial intermediaries. Detailed impact assessments of dam renovation (such as Singda dam, Khuga dam, Khoupum dam, and the Umiam dams) are lacking. These realities deprived affected communities of access to the IFC’s supposed accountability mechanism.
Violating workers’ and peoples’ rights
The crucial gaps in World Bank-backed project processes also resulted to loss of workers’ lives and rights violations. Essentially, the IFIs are undermining their own human rights standards and safeguards, by virtue of their non-application and violations – from theWorld Bank-backed Teesta III HEP and beyond.
In the case of the 1200 MW Teesta III HEP project, authorities failed to undertake safety measures for workers. They also ignored the warnings of environmentalists on the hazards of building dams in a high seismic zone like the Himalayas. Several workers, as a result, were killed due to the collapse of tunnel and massive landslides brought by the 2011 Sikkim earthquake. The 84 MW Myntdu Leshka HEP in Meghalaya is a similar case – the flooding of dam and power station on 8 October 2009 claimed the lives of ten labourers of SEW Construction Limited.
In Assam, in tea plantations funded by the IFC at Hattigor, Majuli, and Nahorani, six worker deaths were reported between 2012 and 2018. In its investigation report in November 2016, the Compliance Advisor Ombudsman (CAO) of IFC has confirmed violation of workers’ rights and recommended steps to address shortcomings in worker health and safety in the plantations.
The World Bank also funded tea plantation projects by the Amalgamated Plantations Private Limited, affecting more than 30,000 tea plantation workers and their families. A series of complaints called out violations of wage and labor laws, restrictions on freedom of association, poor hygiene, hazardous conditions for pesticide sprayers, among others. In 2013, organizations such as the People’s Action for Development (PAD) and Promotion and Advancement of Justice, Harmony and Rights of Adivasis (PAJHRA) filed a complaint with the World Bank’s Compliance Advisor Ombudsman (CAO).
The Khuga dam is also marred with human rights violations, targeting the dam-affected communities. On 16th December 2005, a combined force of Churachandpur police, 12th Indian Reserve Battalion, and 41st Border Security Forces indiscriminately fired at Mata Mualtam village. The firing killed three persons and injured 32 others.
Desist from plunder in North East India
The World Bank and other IFIs intensified their focus on financing infrastructure projects — ranging from road projects, high voltage transmission and distribution lines, energy, and extraction of natural resources — amid India’s Act East Policy. The policy prescription of the World Bank for an overt focus on financing infrastructure projects, the privatization of development, extractives, energy projects will reinforce the neoliberal development model. Such an overwhelming emphasis on corporate roles has and will intensify unregulated plunder of natural resources and the privatization of services, thereby impoverishing Indigenous Peoples.
World Bank financing has led to increased concern and resistance from affected Indigenous Peoples. Communities aggrieved by the World Bank intervened with Government and the World Bank through its accountability mechanisms. However, the weak justice and accountability mechanism of the Bank has disappointed many communities, which only strengthen their skepticism and resistance. There is stronger need to support Indigenous Peoples resistance to stop World Bank financing of unsustainable energy projects, especially large hydropower projects and allied infrastructure in North East India, such as the mega dams in Sikkim, Manipur, Arunachal Pradesh, among others.
Photo: Jiten Yumnam
The Bank should desist from financing dam building in the region, including through financial intermediaries, such as in Sikkim. It should stop financing the financial intermediaries that support dam companies’ construction of unsustainable hydropower projects. The initiative to renovate projects with the World Bank’s funding in Manipur and Meghalaya should not lead to the forced acquisition of community land and the obstruction of access to their traditional territory. The Indian government should consult the affected communities, both upstream and downstream of the dams, for any financial interventions on dams and desist from forced land acquisition that create harsh environmental impacts.
The involvement of the World Bank in the North East requires serious introspection on its relevance and implications. The geopolitical interest of both India and its allied country, the US, to counter the expansion of China’s Belt and Road Initiative in North East India and other regions in South Asia, loom behind the Bank’s financing of connectivity projects.
Implementing the supposed World Bank standards on Indigenous Peoples’ rights, environmental sustainability, rehabilitation, and resettlement remains another concern. The Bank should support development processes that uphold the wishes and aspirations of the Indigenous Peoples and that advances human rights, ecological integrity, as well as alternative model of energy and development in India’s North East. Peoples in North East India should strengthen broader unity and solidarity to expose the fallacies and implications of Bank financing, and expand campaigns and advocacy for the authorities and the Bank to stop profiting from the plunder and expropriation of peoples’ land and lives.
[1] Amended Act 11 of 1991
[2] Eviction order Notification no. 4/8/LA/2013com (Rev)) through the Land and Revenue Department, Government of Manipur, dated 28th May 2013.
[3] Proceedings of the Environmental Public Hearing in Respect of the Proposed Mining of Shale and Siltstone of M/S Lafarge Umiam Mining Pvt. Ltd, held at Shella, East Khasi Hills District on 18th January 2006, prepared by D.P Wahlang, Deputy Commissioner, East Khasi Hills District, Meghalaya.
Jiten Yumnam is a journalist, human rights advocate and environmental activist in the state of Manipur. He is from the Center for Research and Advocacy Manipur (CRAM)