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Inter-American Development Bank Megaprojects: Displacement and Forced Migration

May 19, 2010 |

By Laura Carlsen, Michael Collins, Oscar Chacón, Paula Álvarez, Ricardo Verdum, Christopher Loperena

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Inter-American Development Bank Megaprojects: Displacement and Forced Migration 



I.             Prologue by Oscar Chacón

II.            Introduction by Laura Carlsen and Michael Collins

III.           The IDB in Mexico: Plan Puebla-Panama, Integration, and Displacement by Laura Carlsen and Michael Collins

IV.          IDB Policy in the Development of Agrofuels: Displacement and Palm Oil Cultivation in Colombia by Paula Álvarez

V.            Financing Megaprojects and the Affected Populations: The Cana Brava Hydroelectric Project (Goiás, Brasil) by Ricardo Verdum

VI.          IDB Financing, Enclave Tourism, and Garifuna Land Loss in the Bahia de Tela by Christopher Loperena

VII.         Report Conclusions by Laura Carlsen

I. Prologue

By Oscar Chacón

The displacement of communities and forced migration in our countries as a consequence of Inter-American Development Bank (IDB) projects is an issue of greatest importance, but one that is seldom addressed. Researchers from these countries have worked yet again on this issue and will present findings at the conference of the Inter-American Development Bank to be held from the 19th to the 23rd of March, 2010, in Cancun, Mexico.

For the National Alliance of Latin American and Caribbean Communities (the English acronym is NALAAC), an organization of communities of Latin American migrants who live in the Diaspora of globalization, displacement of communities and forced migration comprise the central issue. We in Latin American migrant communities are anxious to be partners in the construction of a future in which Latin American men and women can live in countries which offer conditions worthy of life and where our political, economic, and social needs will be well met. We dream, also, of countries where material well-being will be fully reconciled with environmental equilibrium, assuring us of long term sustainability. Precisely because this is the future we dream of, it worries us enormously that alleged development comes at the costs of displacement and migration.

The great changes which are taking place in the hemisphere imply a change in the use of the land in great parts of the territory. These changes tend to make it impossible to sustain the campesino economy because the construction of huge development projects [means] less capacity to generate jobs. There are two consequences of this type of development: in the medium and long term, there is displacement and forced migration for economic reasons. In the short term, the displacement is provoked directly by so-called projects of development.

The significance of infrastructure megaprojects financed by the IDB for the purpose of an elusive development has not been subject to analysis in regard to its impact on either internal or external migration. In the context of a global economy with fewer and fewer possibilities of absorbing displaced persons in new labor markets, the problems caused by these practices are more urgent than ever.

The lives of the people in the communities who have been the object of these studies have been severely altered, perhaps irreparably. Beyond the empathy and solidarity that their stories generate, we hope that this investigation helps to minimize the repetition of these practices. The human costs of these projects are difficult to quantify precisely, and it is even more difficult to imagine that they can be remedied satisfactorily.

The study which we now present to you is a collaboration between the NALACC and the Americas Program of the Center for International Policy. It represents the results, realized and broadened, of a line of investigation which seeks to produce knowledge of the function of transformational activities with the hope that they may help us to continue to define a new version of integrated fair and sustainable development for the long term for the pueblos of the American continent.

We thank every one of the researchers who have collaborated with us in this effort, and we hope that the collective value of these investigations will animate the pueblos of the American continent, including migrant populations, to play a more active role in monitoring, resisting (when it is necessary), and impacting the policies which emerge from our respective governments, as well as those that emerge from political bodies and multinational financial companies who say they are working on our behalf. The ultimate goal will continue to be the achievement of a healthier way of life, filled with a genuine sense of the realization of our personal and community aspirations, and at the same time, viable for the long term because of its full respect for the indispensable ecological equilibrium.

II. Introduction: IDB Megaprojects: Displacement, Destruction, and Deception

As the IDB meets in Cancun this month to celebrate its 51st anniversary, its governors are expecting a major birthday present—the infusion of millions of dollars into the bank portfolio to address the global economic crisis in the region.

But is the IDB prepared to lead the charge in efforts to relieve the suffering caused by the crisis and persistent poverty in the region? What does its track record tell us?

When civil society organizations affected by bank projects met last year at the bank’s meeting in Medellín, they presented damning evidence that the IDB had become a persona non grata in much of Latin America, and that its practices have had negative environmental, social, and even economic impacts on the region. More and more citizens have organized to protest projects financed by the IDB throughout Latin America, especially when those citizens belong to a community directly affected by IDB-funded displacement.

As part of the effort to evaluate IDB practices and recommend changes, the National Alliance of Latin American and Caribbean Communities and the CIP Americas Program decided to look at the often-ignored issue of displacement in IDB projects. The regional bank’s focus on the construction of large infrastructure projects has led to the displacement or planned displacement of thousands of communities throughout Latin America over the years. Despite IDB guidelines that mandate the avoidance of displacement due to its high human, social, cultural, and environmental costs, the bank has forged ahead with projects that cause massive physical displacement and forced migration of local communities. In many cases, the displaced are indigenous or afro-descendent communities with a cultural presence on the land that stretches back for centuries.

Our report studies IDB megaprojects in Mexico, Brazil, Colombia, and Honduras and what has been termed “development-induced displacement.” Based on the results of these projects on local communities, we find the use of the term “development” perverse.

In these case studies, the inhabitants of the lands to be flooded out, plowed under, or built on play an active role. In most instances, rather than passively joining the diaspora, they have organized to defend their land and call for the suspension or modification of bank-promoted megaprojects. They have been met with threats and assassinations from interests vested in the multibillion-dollar investments, but they are making their voices heard.

1. Mexican dams and hydroelectric projects. In Mexico, plans to build a giant hydroelectric project in La Parota, Guerrero—financed by the IDB as part of the Plan Puebla-Panama regional development scheme—were highly polemical from day one. Local residents, environmentalists, and international organizations against dam-building criticized the plan to flood a jungle valley and displace more than 25,000 villagers. The lack of consultation meant that local farmers discovered that their land had been expropriated for the dam project only when heavy construction equipment began arriving. Following protests over the lack of legally-required consultation, the Federal Electricity Commission (CFE) charged with the project began faking consultation and was successfully prosecuted for falsification of documents; it still faces accusations of crimes against the environment and building on land without permission. Legal problems mounted, residents refused to leave, and the UN and International Water Tribunal lambasted the Mexican government for the project, but the IDB continued to promote it.

In a similar case, the IDB also proposed financing a hydroelectric dam project called El Arcediano on the Santiago River. The project entails the complete disappearance of the Arcediano village and has received criticism from experts who cite the lack of consultation, environmental risks, health issues related to the quality of the water, the project’s cost, and displacement as key problems. Water pollution led to the death of an eight-year-old boy who died from arsenic poisoning after falling in the river last year. Residents ask why the bank proposes damming the river to deliver its poison waters to more people, instead of helping to clean it up.

The La Parota and Arcediano dams have both been recently suspended due to public protest. They have not been definitively cancelled and there is evidence that a new round of battles will take place soon.

2. Colombian palm oil and displacement of Afro-Colombian communities. Our Colombia case study analyzes IDB participation in the active promotion of palm oil production for agrofuels. In Colombia, armed conflict and palm oil are inextricably linked, since palm oil companies backed by powerful interests have been appropriating land from Afro-Colombian communities purposely displaced by violence. There have been documented assassinations of community leaders to force the sale of land for palm oil production and forced migration has been the tactic of choice for taking over peasant land to extend the palm production. The IDB promotes palm plantations under its “climate change” and development programs, lauding them as a “transformative opportunity” and a generator of investment, development, and employment in rural areas. The displacement impact has been ignored.

3. Brazil: dam displacement and the hazards of relocation. In 1999, the IDB funded a large-scale dam known as CH Cana Brava. The project led to a devastating change in the social and environmental make-up of the area. The project had the dubious honor of being the first dam constructed entirely by a private company under a neoliberal legal and institutional framework introduced by the Brazilian government at the end of the 90s.

More than 1,000 families in the local community—mostly migrants from northeastern Brazil and descendants of African slaves—were displaced by the megaproject. Many lost their lands and livelihoods. The IDB had a key role in the resettlement and negotiation process. Town meetings were chaired in the intimidating presence of the military police, and the bank tried to negate the important role of community leaders by taking a stance—along with its partners the Brazilian Development Bank (BNDES) and the company Tractebel—refusing to negotiate collectively with the community. Over a decade later and after many adjustments in the relocation process, more than 600 families have still not been successfully reintegrated into self-sustaining communities.

4. Honduras: tourism megaproject and displacement. An IDB-funded project at Tela Bay on the coast of Honduras is leading to the displacement of Garifuna and small farm communities. The coup d’etat in that country opened the door to interests ready to move full-steam ahead on this project, despite local resistance and studies showing severe environmental damage. This study analyzes levels of displacement involved in the tourist development and IDB compliance with its own guidelines on displacement.

A final note: Despite the IDB’s commitment to transparency, we found it difficult to locate certain documents and general information on controversial projects. Email inquiries went unanswered, important documents were taken offline, officers refused phone inquiries, and official project descriptions were often vague and misleading.

We also found that the IDB too often fails to enforce its own policy on key matters. The bank has a commitment to consultation, yet many of its projects lack the deliberation the IDB promises and that is required under ILO Convention 169 and other international law. The IDB has a commitment to monitoring borrowers’ projects, yet after providing the loan the bank often shows little interest in the consequences, particularly surrounding displacement.

Massive displacement of human populations and the disruption of communities cannot be dismissed as short-term collateral damage from the war on poverty. All available literature points to the continued or increased impoverishment of displaced communities, as well as the loss of their cultural, social, and environmental heritages. The IDB must end its silence, and publicly respond to the criticism and controversy that surrounds its projects. It must also abandon its single-minded approach to megaprojects, and explore other development and energy alternatives.

III. The Inter-American Development Bank in Mexico: Plan Puebla-Panama, Integration, and Displacement

By Laura Carlsen and Michael Collins

1. Overview of IDB in Mexico

A) Portfolio

B) Plan Puebla-Panama/Mesoamerican Project

C) Megaprojects and Displacement

2.  Integrating Capital and Displacing People: IDB-Funded Dam Projects in Mexico

3.  Case Studies

A) La Parota

B) El Arcediano

4. Transparency Issues

5. Conclusions

6. Recommendations

1. An Overview of the Inter-American Development Bank (IDB) in Mexico

In recent years, the IDB has heavily financed projects in Mexico as a priority country. Four hundred ninety-three projects have been financed since 1993 and this intense activity shows no sign of letting up.[1] The IDB announced that it opened up $6 billion in credit lines for 2008 and invested in 40 projects in Mexico.[2] For 2009, Ellis J. Juan, representative of the IDB in Mexico, declared that “This is going to be the biggest IDB program in the region, along with the assistance planned for Brazil.” The IDB has stated that Mexico will receive $5 billion in loans over the next two years.[3]

A. Portfolio

This new financing for infrastructure, housing, and cash transfers to the rural and urban poor is in part a bailout from the effects of the economic crisis and rapid devaluation, but also part of a longer-term strategy. As other Latin American nations turned away from international financing institutions due to the political conditioning attached to their loans, a succession of neoliberal governments in Mexico turned that country into a veritable laboratory for the public-private financing of infrastructure that the IDB has been promoting for years. Several pilot projects, one to finance infrastructure projects directly through state governments (FORTEM) and another to draft new state legislation for private infrastructure investment, called Promotion of Public-Private Associations in Mexican States (Impulso de Asociaciones Público-Privadas en Estados Mexicanos—PIAPPEM), were announced in a Memorandum of Understanding signed between the Mexican government and the IDB in February of 2007.[4] These will be supported by further funds from Infrafund, an IDB project specifically to help prepare infrastructure projects.

At the signing of the Memorandum, Mexican President Felipe Calderon and IDB President Luis Moreno affirmed the centrality of infrastructure megaprojects to their shared concept of development. Calderon cited infrastructure development as the sine qua non of investment, stating, “Infrastructure is the best way to regional equality and justice. You can only truly fight poverty by growth and employment and the only way to generate jobs is through investment, which cannot be generated without the development of infrastructure.”[5] Moreno agreed, saying, “A robust and modern infrastructure is indispensable for competition and regional integration,” and noted that the private-public associations could mobilize as much as $8 billion in infrastructure financing between the state and the private sector over the next six years.[6]

B. Plan Puebla-Panama/Mesoamerican Project: Regional Integration, Investment, and Displacement

For the past decade the major vehicle for IDB financing in Mexico has been the Plan Puebla-Panama, later rechristened the Mesoamerican Project. This plan envisions a series of large hydroelectric dams, tree plantations, highway and electrical systems, etc. to link Mexico into the U.S. market and attract foreign investment.

The IDB’s gung-ho approach to financing megaprojects contrasts with the mounting public criticism that many of its infrastructure projects have generated. The uncritical commitment to large infrastructure projects as the central strategy of its Mexico portfolio is all the more startling given the bank’s usual attempts to keep a low public profile and avoid such controversies.

This strategy dates back nearly two decades when the IDB along with the Mexican government launched the overarching plan for changing land use and reorienting production in Mexico under the then-titled “Plan Puebla-Panama.” The plan generated massive public criticism, international organizing in opposition, and local protests due to its implications for the displacement of indigenous and peasant communities and widespread environmental damage. Planners went scurrying back to the drawing board—not to design a new plan but to design a new public relations strategy. After laying low for a period of years, the PPP was re-launched under its new guise of the Mesoamerica Project. This time around, transparency has been a major problem for citizen groups seeking to evaluate the plan, since after the public debacle with the PPP the IDB is careful not to specify which of its current and future projects come under the banner of Proyecto Mesoamerica, despite the fact that it is providing $1.3 billion in loans to the project.[7]

The question remains, in the midst of the name changes and shifting PR programs, what is the premise behind this kind of regional integration scheme? How does it affect the lives of the people who live and work in the vast swath of national territory included in the plan?

The Plan Puebla-Panama (PPP) was inaugurated by Mexican President Vicente Fox at the beginning of 2001, as an ambitious scheme for the integration of the Mesoamerican region into a region that starts at the state of Puebla in Mexico, passes through five states in Southern Mexico (Oaxaca, Chiapas, Guerrero, Campeche, Puebla), and the seven countries of Central America (Belize, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica, and Panama), and recently included Colombia. The IDB was a major backer of the PPP from the outset.[8] It planned a $4 billion dollar investment[9] in the regional integration project of what was originally conceived of as a $10 billion-dollar plan. Over eight billion has been spent to date.[10]

The stated goal of the PPP was to achieve the integration and development in the region within the context of what was viewed as an inevitable and desirable model of globalization. At the summit of regional leaders in 2004, it was defined as “part of a developmental strategy to strengthen economies and markets for interaction and the construction of a Mesoamerican regional identity, culminating in the inclusion of a globalized economy in the region.”[11] The PPP embodied the goals of developed countries (particularly the regional leader, the United States) and transnational corporations sought to draw Mesoamerican nations more tightly into the global economy as new markets, sources of natural resources, and a zone of cheap labor. It promised job-generating investment for the areas affected. The plan involved stimulating and deepening international economic activities such as import, export, and offshore investment and production by facilitating the north-south transit of goods and articulating investments in the zone via a modern, large-scale infrastructure.

Another objective put forward was the stimulation of “regional cooperation to sustainably make the most of the riches and comparative advantages of the Mesoamerican region, rectifying the historic dearth of physical infrastructure and reducing the poverty index, and the region’s vulnerability to natural disasters.”[12] To date there has been no comprehensive evaluation of progress in these areas.

Plan Puebla-Panama was conceived of to confront two main challenges. The first was the obvious lack of benefits generated by the North American Free Trade Agreement (NAFTA) in Southern Mexico, where most of the country’s poor and marginalized population is concentrated. This flaw was widely recognized; the World Bank published a study calling Southern Mexico “the region not reached by NAFTA.”[13] The study proposed the region’s enhanced insertion into globalization via new infrastructure, foreign investment, and exploitation of natural resources. It ran directly counter to what indigenous farm movements had diagnosed as the problem—a lack of social equity and the pulverization of traditional livelihoods as a result of globalization.

The second challenge for the globalization agenda of governments in the region was the perceived need to open the Central American countries to foreign investment, especially to facilitate international exploitation of the abundance of natural resources in the region and to link these investments to the U.S. market.

The citizen-based movements that opposed the PPP claimed it would displace them from their lands and traditional livelihoods, either directly such as through expropriation for dams and other large projects, or indirectly by making it impossible to live off traditional productive activities such as farming, fishing, crafts production, or other activities common in the communities. The PPP had become the focus of a battle over land use and development plans that pitted the modernizers and their grandiose plans for remaking the region in such a way as to attract large investors, against communities that argued that the problem was not what they were doing, but the relations of power that kept them from gaining the benefits from what they were doing.

Surprising, the local movements won round one and just a little over a year after its spectacular launch, the PPP entered into a period of stagnation and a conscious decision was made to lower its profile. On the one hand, the plan did not obtain the international financing expected because of the post-9/11 economic crisis. On the other hand, the unexpected popular resistance movement in Mexico managed to stop infrastructure projects that threatened their communities, by building local opposition movements and creating an international network to educate the public. This proved to be such a headache to the Mexican government that in 2003, then-Mexican President Vicente Fox and the IDB decided to shelve the plan, removing official websites and vanishing it from public view and official discourse.[14]

Public criticism of the PPP caused the bank and the Mexican government to withdraw the major publicity campaign for the plan and go back to the drawing board in terms of how to sell the scheme for massive infrastructure development to a leery public. After much backtracking, in a 2002 meeting between the IDB and NGOs on the subject of the polemical Plan Puebla-Panama, IDB representative stated unequivocally that, “We won’t discuss dams because we won’t fund them. We won’t fund them through the private sector department either.”[15] Yet at that very point, the bank was providing financing for several hydroelectric projects in Latin America.

According to press reports, the IDB was very involved in the phase of trying to improve the PPP public image.[16] The bank contracted a public relations firm to try to dispel the negative image around the plan through the magic of Madison Avenue. It created social programs for local inhabitants, something that had been ignored in the original plan. However, these projects continued to be a tiny fraction of the total resources. For example, on Nov. 13, 2003 the IDB, other international finance institutions, and the eight countries involved signed a Memorandum of Understanding on agricultural and livestock and rural development to emphasize economic opportunities for the indigenous and “campesino” communities of the region, but it is unclear how the money was spent or what the results were.

In the period of dormancy, many integration projects planned for the PPP continued to advance under other names and through other government programs in order to avoid attracting the public protests that had accompanied the PPP in affected communities, and among indigenous people and environmental groups.

In April 2007, the new Mexican President Felipe Calderon, despite the protests of the local communities, re-launched the PPP in the state of Campeche as a “response to the challenges and opportunities that the international community faces.”[17] The main projects included were the construction of the Central American Electrical Interconnection System (SIEPAC) that involves a transmission line from Guatemala to Panama and the construction of 381 hydroelectric dams, and a Mesoamerican road network of more than 10,209 km. The Campeche meeting announced that the PPP was actively involved in 99 projects at a cost of more than $8 million.

In June 2008, the presidents of the member countries of the PPP met again in Mexico, and with the hope of finally shedding Plan Puebla-Panama’s image problem, they rechristened the plan the Mesoamerican Integration and Development Project, or “Mesoamerican Project” for short.

C. Megaprojects and Displacement

Social Displacement

Due to widespread recognition of the problem, the IDB developed guidelines in 1998 on involuntary resettlement.[18] The guidelines state that “The objective of the policy is to minimize the disruption of the livelihood of people living in the project’s area of influence, by avoiding or minimizing the need for physical displacement, ensuring that when people must be displaced they are treated equitably and, where feasible, can share in the benefits of the project that requires their resettlement.” The guidelines list two principles:

1) “Every effort will be made to avoid or minimize the need for involuntary resettlement” including evaluating alternatives using accurate estimates of the number of people affected, the costs of resettlement, the socio-cultural impact, and the vulnerability of the affected population. It concludes, “When a large number of people or a significant portion of the affected community would be subject to relocation and/or impacts affect assets and values that are difficult to quantify and to compensate, after all other options have been explored, the alternative of not going ahead with the project should be given serious consideration.”

2) “When displacement is unavoidable, a resettlement plan must be prepared to ensure that the affected people receive fair and adequate compensation and rehabilitation. In the shortest possible period of time, that guarantees a (i) minimum standard of living and access to land, natural resources, and services (such as potable water, sanitation, community infrastructure, land titling) at least equivalent to pre-resettlement levels; (ii) recover all losses caused by transitional hardships; (iii) experience as little disruption as possible to their social networks, opportunities for employment or production, and access to natural resources and public facilities; and (iv) have access to opportunities for social and economic development.”

Under special considerations, the guidelines call for an “impoverishment risk analysis” when the project affects marginal groups, taking into account loss of employment, land, food security, means of production, social networks, and access to education. The study should include preventive measures that take into account gender, ethnicity, income, and other socio-economic factors. In the case of displacement of indigenous communities, the guidelines say that the bank will only support projects where (i) the resettlement component will result in direct benefits to the affected community relative to their prior situation; (ii) customary rights will be fully recognized and fairly compensated; (iii) compensation options will include land-based resettlement; and (iv) the people affected have given their informed consent to the resettlement and compensation measures. They call for community participation at each stage of resettlement design and implementation and compensation.

Environmental Displacement

In addition to social displacement, there is environmental displacement. In some cases, although the project itself does not displace communities, the environmental impact in effect does. For this reason no study of displacement and forced migration can be separated from the environmental impact. Most of the communities under study are indigenous or “campesino” communities that rely on a close relationship with the earth for their livelihoods.

In January 2006, the bank approved a new environment and safeguards compliance policy.[19] The policy “requires early and ongoing engagement with communities affected by a project and seeks community support before financing large projects.” The policy stipulates, among other things, that:

-          The bank will monitor the executing agency/borrower’s compliance with all safeguard requirements stipulated in the loan agreement and project operating or credit regulations.

-          All bank-financed operations will be screened and classified according to their potential environmental impacts.

-          The bank will require compliance with specified standards for Environmental Impact Assessments.

-          Projects will require consultations with affected parties and consideration of their views.

-          Bank-financed operations will include, as appropriate, measures to prevent, reduce, or eliminate pollution emanating from their activities.[20]

Nevertheless, as is demonstrated by communities in areas where projects such as La Parota were being performed, this policy has not been enforced.

The attitude of the IDB seems to be to finance the project and then look the other way, while citizens are left to deal with unresponsive or openly repressive agencies, like the CFE, that are charged with implementing the project.

2. Integrating Capital and Displacing People: IDB-Funded Dam Projects in Mexico

Michael Cernea states that:

“Forced population displacement is always crisis-prone, even when necessary as part of broad and beneficial development programs. It is a profound socioeconomic and cultural disruption for those affected. Dislocation breaks up living patterns and social continuity. It dismantles existing modes of production, disrupts social networks, causes the impoverishment of many of those uprooted, threatens their cultural identity, and increases the risks of epidemics and health problems.”[21]

The fundamental reason behind grassroots organization to reject the PPP projects was the threat of displacement of local populations that the projects entailed. The megaprojects funded by the IDB through Plan Puebla Panama and its subsequent incarnations almost all lead to some degree of displacement or forced migration. In some cases—particularly dam building, as will be discussed in the case of the La Parota and Arcediano hydroelectric projects below—the displacement is foreseen and direct. In others, the change of land use promoted by the projects either eliminates livelihoods or changes the environment in such a way that it can no longer support the communities that have lived there for years. For example, monoculture plantations promoted in the PPP, like eucalyptus or crops for biofuels, require far less labor than small farms so as land converts to this use jobs are lost and inhabitants are forced to migrate out. Large tourism projects that in many cases don’t even hire locally also tend to displace traditional livelihoods.

This is what experts have termed “development-induced displacement.” According to Michael Cernea, a World Bank analyst, the causes of development-induced displacement include water supply (dams, reservoirs, irrigation); urban infrastructure; transportation (roads, highways, canals); energy (mining, power plants, oil exploration and extraction, pipelines); agricultural expansion; parks and forest reserves; and population redistribution schemes.[22] The same author describes the principal risks as: landlessness, joblessness, homelessness, marginalization, food insecurity, increased morbidity and mortality, loss of access to common property, and social disintegration. In other words, nearly every critical aspect of human existence is potentially negatively affected by displacement.

Moreover, Courtland Robinson notes that development-induced displacement tends to exacerbate social inequality. “Not only is development-induced displacement a widespread, and growing, phenomenon, but evidence suggests that while the beneficiaries of development are numerous, the costs are being borne disproportionately by the poorest and most marginalized populations.” [23] Another author, Rajagopal Balakrishnan, went so far as to dub displacement and out-migration caused by development projects as “development cleansing,” saying that “(they) may well constitute ethnic cleansing in disguise, as the people dislocated so often turn out to be from minority ethnic and racial communities.”[24] Indeed, all the cases of displacement and forced migration analyzed in this paper most directly affect poor, indigenous communities.

Principle 6 of the Guiding Principles presented to the UN Commission on Human Rights states that: “Every human being shall have the right to be protected against being arbitrarily displaced from his or her home or place of habitual residence,” and goes on to say that, “The prohibition of arbitrary displacement includes displacement in cases of large-scale development projects that are not justified by compelling and overriding public interests.”[25]

Despite criticism from non-governmental organizations and affected communities and the evident impact on displacement, the IDB’s funding for projects in Mexico has been welcomed wholeheartedly by successive Mexican governments that see the investments as a key factor in assuring a flow of credit and foreign currency to the country’s often fluctuating economy. Many Mexican companies, like BANSEFI, have benefited from the IDB’s lavish financing of private-public partnerships.[26]

However, it is becoming more and more apparent that local citizens affected by these multi-million dollar projects are mostly seen as obstacles in the face of top-down development. This section will study IDB-backed projects that have grave repercussions on Mexicans, causing displacement and forcing migration.

Mexico already holds the dubious title of the nation that expels more of its own people than anywhere else in the world. The model of economic integration locked in place under the North American Free Trade Agreement has led to a dramatic increase in out-migration because it displaces traditional livelihoods through imports, land use changes, and concentration. The PPP and projects funded by the IDB within the logic of NAFTA-style regional integration accelerate the process, while adding the direct displacement caused by infrastructure megaprojects.

The IDB has been a devout supporter of the NAFTA model in Mexico and its infrastructure investment is designed to support and extend the free-trade model as a path to development. An IDB report in 2002 noted, “Completion of a balanced and comprehensive FTAA agreement by 2005 is a crucial strategic objective for Latin America and the Caribbean. Such an agreement promises to provide more secure market access to North America, reduce trade diversion within the sub-regions, improve productivity, stimulate foreign direct investment, and strengthen cooperation with North America.”[27] When the FTAA negotiations collapsed in Mar del Plata because southern countries protested the lopsided advantages granted northern corporations under the agreement, the IDB continued to support the PPP as a form of infrastructure-led integration focused on economic integration among the Mesoamerican and Pacific Rim nations that had signed FTAs with the United States. The Campeche Joint Declaration erases any doubt about the relationship between Plan Puebla Panama’s integration and infrastructure plan and the NAFTA free trade model; one of the resolutions reads: “To respectfully urge the U.S. Congress to quickly approve the Free Trade agreements signed by the governments of this country and of Colombia and Panama.”[28]

The IDB’s latest publicly available Mexico strategy (2002-2006), has as one of its main themes “The integration of Mexico with the rest of North America through NAFTA is progressing well. Now the Puebla-Panama Plan proposes that regional integration be expanded toward Central America, emphasizing the role of the states in the south of Mexico.”

The IDB blindly continues to support infrastructure megaprojects despite the social costs and widespread public protest over the projects. The criticism that they benefit large construction companies and expel local populations has not been heard by the bank, nor do full studies exist to seriously evaluate this claim, which is a very serious one for development aims. The following cases demonstrate a strategy of shunting aside local populations, without applying even its own guidelines on displacement. It is our belief that both the IDB’s consultation process and criteria for selection of projects must be overhauled if the bank is to improve its much-maligned reputation and avoid damaging the lives and livelihoods of the very citizens it purports to benefit.

3. Case Studies


A. La Parota, Guerrero

Large-scale dam construction is among the most prominent and dramatic forms of displacement caused by development projects. A World Bank study calculated that in the dam-building frenzy of the early 90s, 300 high dams displaced over 4 million people.[29] Despite recognizing the problems involved in the massive displacement, the report concluded that displacement due to development projects was likely to increase over the coming decade.

The project entails the construction of a dam on the Papagayo river that would provide 900 MW of energy and drinking water to the Acapulco municipality.

The current financial commitments of the IDB to La Parota dam are not clear. In the 2010 list of projects appears this one to the CFE dated May 24, 2007:[30]

“Assistance to CFE on Environmental and Social Aspects of Hydroelectric Projects”

Project Description: The main objective of this TC is to assess CFE performance and management capability in dealing with environmental and social impacts of large hydroelectric projects through a practical approach that will consider the project as a pilot initiative. This assessment is a key element when conducting preparatory activities for the funding of potential CFE power generation projects.

The obtuse wording of this large (US$1,168,434) project seems to imply that the project funds an analysis of what went wrong in the attempt to impose the La Parota project. Without additional information, however, it is difficult to know for sure. The project was also listed in the March-April 2002 bulletin on PPP and IDB projects in these terms: “La Parota Dam. Storage of water from the Papagayo river, Guerrero, to produce 765 MW. Construction of a 162 meter high dam and installation of three turbo-generators.”[31]

Although officials have subsequently denied it, Plan Puebla-Panama originally included the construction of 381 hydroelectric dams to supply a regional electrical grid. Among them was a huge dam to be built in La Parota, Guerrero to feed the Acapulco resort area.[32] The 900MW dam on the Papagayo River would flood 17,000 hectares and displace, according to government estimates, some 2-3,000 inhabitants. However, local residents and non-governmental organizations estimate the real figure at closer to 25,000. The majority of those affected are indigenous farmers, who would see their lands and livelihoods taken in the name of development.

Despite being several years in the works, it wasn’t until heavy equipment was sent in 2003 to begin clearing the land for construction that the indigenous and mestizo residents learned of the plan. The Mexican Federal Electricity Commission (CFE) began work on the hydroelectric project in La Parota on communal land held by the Nahuatl indigenous population of Cacahuatepec, Guerrero. The construction implied destroying a hill and stripping the area of trees and vegetation.

When it began work in 2003, the Federal Electricity Commission still had not obtained permission from communities or the required Environmental Impact Statement (EIS) from the Ministry of Environment. Later, despite testimony on the negative environmental impact of the dam, the Ministry authorized the EIS. The report foresees the flooding of 16 towns and the partial flooding of eight towns, resulting in the forced displacement of an estimated 14,756 inhabitants (many experts say it would displace 25,000 people).[33] Despite the risks, the dam project provides no water-basin management plan as required by the national waters law for protecting, improving, conserving, and restoring water basins, aquifers, rivers, and watersheds. It does not specify how to mitigate the effects of flooding 17,000 hectares of forest and farmland. Nor does it contain specific plans for relocation of the 25,000 residents, most farmers and Nahuatl indigenous peoples whose lives and culture are inextricably tied to the land. Moreover, the organizations claim that an additional 75,000 inhabitants will be affected by factors such as increased sedimentation and salinity. As mentioned, residents put the figure of directly displaced persons at around 25,000, currently living in 21 farming communities. They say the disparity between their estimate and the government’s is due to the fact that the government failed to include communities that would be indirectly affected by the water flow. In addition to the project’s underestimation of the human costs of displacement, technical experts have questioned the estimated $800 million project due to its extremely high social, ecological, and economic costs. [34] The need for the additional generating capacity is not substantiated beyond doubt and the lack of serious studies on environmental and social impacts and seismic risks raise further doubts about the dam. Inhabitants were not consulted about the project, in violation of OIT Convention 169 on the rights of indigenous peoples, UN guidelines on internal displacement, and the IDB’s own guidelines.

Felipe Flores, the spokesman for CECOP (the Council of Ejidos and Communities Opposing the La Parota Dam) and resident of one of the affected communities, Garrapatas, has first-hand experience of the fight to stop La Parota. “They came in the dead of the night in 2003 to set up their machinery and begin work. We only discovered what was going on later. We held an assembly with the three affected communities—Arollo Verde, San Jose, and Garapatas—to see what they thought of the project. Nobody wanted it, but the CFE didn’t care. They refused to give us any information.

“When I began to organize and protest, I became a target. We visited other local towns to drum up support, and suddenly several compañeros were put in prison, and some murdered. The first was killed on the way home from meeting on La Parota with the governor. On Dec. 8, 2009, I was personally threatened. Someone arrived at my door and told me I was the only one left. He said everyone else had been bought off or killed. I was told I was next.”

Pablo Romo of Serapaz, a Mexican organization that promotes peaceful resistance and has been closely involved in the campaign against La Parota, underlined the lack of consultation, stating that, “There was never any contact from the CFE regarding the project. It wasn’t until they held an assembly in 2007, four years after the project began, that the locals discovered what the plan was. Even then, without informing us in advance, the CFE decided to hold the assembly at 6:30 a.m. We had organized a pre-assembly march and we arrived at the assembly to find that we were locked out of the proceedings. Then, other local residents began to emerge from inside the assembly. They had been invited to attend early and ‘approved’ the project, having been bought off with bags of food. When we eventually got in, the locals were given a booklet that contained pictures of the new houses they were to be given. They hadn’t even asked the locals that were to be displaced about what type of house they wanted. Instead, the CFE consulted architects from Guerrero University. It was a joke!”

A local emerges from the assembly with a bag of food

After physically blocking the entry of the equipment to stop the destruction of their lands, local inhabitants formed the CECOP. The group, made up of 5,000 men and women from 39 villages, has blocked construction of the dam for five years, filed and won legal battles to demand adequate public input, and become a key figure in international forums on the environmental and social impact of mega-dams.

The organization has had problems obtaining precise information about the project. The government has not complied with requirements for public participation in decision-making and implementation of the project, the legal and regulatory systems have blocked many of their attempts to challenge imposition of the dam, and both state and federal government agencies have used force to exclude opponents from assemblies on expropriation. Through bribes and payments, the government has divided communities into violent camps of supporters and opponents of the project. Four people have been killed to date and several leaders imprisoned or harassed.

The lack of consultation was not just an affront to the local population, it was a violation of the law. Mexico is a party to the International Covenant on Economic, Social, and Cultural Rights (ICESCR) and other international and regional human rights treaties that oblige it to refrain and protect the population from forced evictions, defined in the ICESCR as “the permanent or temporary removal against their will of individuals, families, and/or communities from the homes and/or land which they occupy, without the provision of, and access to, appropriate forms of legal or other protection.”[35]

A Civil Observation Commission formed to investigate the case noted, “We are worried that the recommendations and observations of the UN Committee on Economic, Social, and Cultural Rights, specifically referred to in ILO Convention No. 169 on indigenous people, have not been adequately responded to.”[36]

According to a brief prepared by Amnesty International,[37] the La Parota dam megaproject raises concerns about the following human rights: right to information, right to effective legal remedy, right to genuine participation, international human rights law related to development-induced displacement, and violence and intimidation surrounding La Parota project.

Moreover, the UN Commission on Human Rights has found that forced evictions are a gross violation of a range of human rights and that the International Covenant on Civil and Political Rights (ICCPR) and the American Convention on Human Rights (ACHR), contain protections of “freedom to seek, receive, and impart information”(31) and to “take part in the conduct of public affairs.”[38]

In regard to La Parota the brief by Amnesty International notes that as “a state party to International Labor Organization Indigenous and Tribal Peoples Convention (ILO Convention No. 169), Mexico is generally required to refrain from removing the peoples concerned from the lands which they occupy. As Article 16(2) of the convention states:

“Where the relocation of these peoples is considered necessary as an exceptional measure, such relocation shall take place only with their free and informed consent. Where their consent cannot be obtained, such relocation shall take place only following appropriate procedures established by national laws and regulations, including public inquiries where appropriate, which provide the opportunity for effective representation of the peoples concerned.”

The La Parota case has been presented to the UN High Commissioner on Human rights and the ICESCR has expressed concern:

“about reports that members of indigenous and local communities opposing the construction of La Parota hydroelectric dam or other projects under the Plan Puebla-Panama are not properly consulted and are sometimes forcefully prevented from participating in local assemblies concerning the implementation of these projects. It is also concerned that the construction of La Parota dam would cause the flooding of 17,000 hectares of land inhabited or cultivated by indigenous and local farming communities, that it would lead to environmental depletion, and reportedly displace 25,000 people. It would also, according to the Latin American Water Tribunal, violate the communal land rights of the affected communities, as well as their economic, social, and cultural rights.”(38)

The Special Rapporteur on the Situation of Human Rights and Fundamental Freedoms of Indigenous People included La Parota in the 2007 annual report:

“also victims of abuse and violations in Mexico are indigenous peasant farmers in the state of Guerrero who oppose La Parota dam project in their territory, which the state insists on carrying out without the population’s free consent. A court has instructed the government to desist from the construction of infrastructure works in this area until the conflict has been resolved through negotiation, but the authorities have ignored the injunction and are going ahead with road building as part of the dam project, to which many villagers are opposed.”

In June 2007, residents won an injunction based on a court finding that the local assemblies held to approve the project were not legally carried out. A statement from CECOP said that “The CFE and government had fabricated an assembly for landowners in which the expropriation of land and occupation by the CFE were supposedly authorized.”[39]

Previous large dam projects in Mexico that have displaced indigenous populations have been marked by corruption and failure to provide benefits to local residents. To this day, affected communities fight for promised compensation. In Latin America a growing movement has arisen to block large infrastructure projects promoted by the IDB and other international financial institutions because of the high social and environmental costs. CECOP quickly became a leader in the movement against large megaprojects and is an example and an inspiration to this movement. It sends out a message that it is past time to re-examine huge hydroelectric dam projects that cause irreversible damage to water systems, ecosystems, flora and fauna, and human communities.

Despite the fact that much controversy surrounded the La Parota project, it has continued to appear in IDB internal documents. In July 2009, a meeting on “Strategies, National Programs, and Industries for Climate Change: Opportunities and Challenges for Latin America and the Caribbean,” named La Parota as an ongoing approved project.[40] La Parota is mentioned in the meeting’s documents as a project in progress under the Mexican government’s national climate change program, part-funded by the IDB.[41]

In September 2009, the La Parota project was “postponed” by the CFE. The CFE claimed that in light of the global financial crisis, Mexicans were using less electricity and therefore it was revising its prognoses for future electricity demand.[42] Most observers deem the suspension and review a victory for the dam’s protestors. The CFE was involved in a lengthy and complex legal battle with the protestors, who criticized the project for, among other things, forcing displacement, causing environmental damage, and removing their water source. The CFE also remains involved in two legal processes concerning falsification of documents (relating to allegations that signatures approving the project were forged at “consultation meetings”), crimes against the environment, and building on land without permission. There is also a legal process against the author of the Mexican government’s environmental impact assessment, which approved the project.

The legal proceedings were not the only pressure that the CFE was under. A 2007 report by the UN demanded the immediate suspension of the La Parota project, stating that the project had not satisfied questions relating to the right to information, prior consultation and consent, and human rights. The report also highlighted the need to enforce the right to not be displaced, which is recognized in ILO Convention 169, Article 16,[43] and Articles 18 and 19 of the United Nations Declaration on the Rights of Indigenous People, which state:

“(18) Indigenous peoples have the right to enjoy fully all rights established under international labor law and national labor legislation. Indigenous individuals have the right not to be subjected to any discriminatory conditions of labor, employment, or salary.

(19) Indigenous peoples have the right to participate fully, if they so choose, at all levels of decision-making in matters which may affect their rights, lives, and destinies through representatives chosen by themselves in accordance with their own procedures, as well as to maintain and develop their own indigenous decision-making institutions.”[44]

The UN report also said that “they deem it necessary that the Mexican government has an exhaustive policy about the possible displacements as a result of development projects, which meets international standards.”[45] In response to the UN’s critique, the Mexican government stated that “The Federal Electricity Commission (CFE) and state authorities respectively have always insisted that the project will only be carried out if the comm

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