Press Release
New Delhi | December 23, 2024
The Working Group on International Financial Institutions (WgonIFIs) is disappointed with the recent decision of the World Bank Board of Directors to approve $800 million for the Amaravati Capital City project, despite the Bank’s own Inspection Panel calling for investigations into it earlier, Andhra Pradesh High Court calling the Land Pooling Scheme prima facie illegal and non-compliance of the National Green Tribunal’s orders.
This project was first presented to the World Bank in 2017, when the Bank approved a loan of US $300 million. However, before the financing details were finalised, the political landscape in the state changed, and the project was shelved in 2019. Five years later, the same political party that proposed the project returned to power and sought World Bank financing again.
In 2017, local communities impacted by the project raised their concerns with the World Bank’s Inspection Panel (IPN), which submitted its Third Report and Recommendation in March 2019. The Panel’s findings highlighted significant issues with the project, particularly regarding the violation of the Bank’s Involuntary Resettlement Policy (OP/BP 4.12). These issues, including inadequate (and illusionary, as the Andhra Pradesh High Court has observed in its order of March 2022) compensation, lack of livelihood restoration, and the absence of necessary consultations, remain unresolved to this day.
The IPN’s 2019 Report made several critical recommendations, including the need for a thorough investigation into the alleged harm caused to local communities, particularly landless labourers who lost their livelihoods years ago.
The Panel also raised concerns over the LPS, noting that it had never been implemented at this scale and could set a dangerous precedent for future development projects. The adequacy of compensation, particularly whether it meets the replacement value, was also questioned.
The Andhra Pradesh High Court held the Land Pooling Scheme (LPS), under which the State government acquired lands from farmers, to be prima facie illegal. As a result of the flip-flop decisions of the State government in the choice of location of the capital city at Amaravati since the Bank considered the project in 2017, the farmers who gave up lands under the LPS have been subject to irreparable loss and in the absence of a formal statutory notification issued by Government of India under the AP Reorganisation Act, 2014 on the location of the capital city as on date, the farmers continue to face severe uncertainties in the matter of valuation of their precious lands.
The past 10 years have demonstrated the serious gaps in LPS. there were protests by Land Pooling Scheme (LPS) farmers on the streets for more than 1,600 days with over 500 criminal cases have been filed including on the woman LPS farmers. Despite this, the project is being pushed forward under an increasingly authoritarian political climate, both at the state and national levels.
Two crucial judicial orders pronounced by the National Green Tribunal (NGT) that the State government should put in place mechanisms for compliance with environmental norms in implementing the Amaravati project in a sustainable manner and another filed by others, requiring the State government to conserve the floodplains of River Krishna, both of which are yet to be complied with by the State government.
Over 170 representatives of civil society organisations, hailing from 17 countries had written to the Bank’s Executive Directors before the approval, calling to
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Defer approval of the Amaravati project and require further detailed studies, specifically in light of the Panel’s findings from 2019.
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Ensure strict adherence to the Bank’s policies, including ensuring meaningful, transparent consultations with all affected communities, before the project Is approved.
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Resist political pressures from the Government of India and take a courageous stand in defence of the rights of people, the environment, and the Bank’s stated commitments to sustainable development and social equity.
Despite this, the Board of Directors going ahead with the approval of the project reeks of disregard for the judicial system of the country, undermining its own accountability mechanisms and disrespecting the rights and concerns of the people.
The World Bank has a historically contentious legacy in India, marked by projects such as the Narmada Dam, the Singrauli thermal power project, the Tata Mundra coal plant, the Mumbai Urban Transport Project, and the Himalayan dams, among others. We warn that this project is poised to be yet another stain on the World Bank’s legacy, adding to its collection of missteps and misjudgments, leaving people and the climate to suffer for a long time to come.
We demand that, despite the approval, the Bank can still hold on to its lending until detailed studies are conducted, completed with the High Court and National Green Tribunal judgments and adherence to the Bank’s own policies vis-a-vis adequate consultation with affected communities and adequately compensating the people for their loss.