World Bank admits Congo omissions

The World Bank has acknowledged a series of "omissions" in reforms it supported to promote the sustainable exploitation of the Congo rainforest, the world's second largest after the Amazon.

In a document obtained by the FT, the bank defends an overall policy against the claim of environmental activists that it is encouraging uncontrolled logging which could damage irreversibly the world's second lung.

The document was produced in response to an independent inquiry triggered by indigenous Pygmy communities in the forest who complained they were not consulted and that their livelihoods were threatened. The findings are due to be discussed at a World Bank board meeting on December 20.

In the document the bank recognises that an environmental impact assessment "should have been prepared", and that the programme did not sufficiently take into account the estimated 300,000-500,000 Pygmies who live in the rainforest. It also admits that plans to earmark parts of the forest for alternative uses were "dropped before it started". This was explained by tense relations with Congo's then environment minister, according to one bank official.

The World Bank made reforms to forestry management an important part of an overall emergency recovery plan when it re-engaged with the Democratic Republic of Congo in 2002 as a war in which millions died was drawing to a close.

The intention was to reorganise forestry concessions, many of them illegally allocated during the war and to "protect forests from appropriation from powerful interests for private gain".

Congo then had only 700km of paved roads, its public administration had collapsed and insecurity plagued swathes of the country, which had been plundered for resources by armed factions which later participated in a power-sharing government.

At the time the bank had to weigh up the benefits of attempting to assist in salvaging the state against the risks of involving itself with a less than perfect administration.

An area almost twice the size of the UK had been hived off as forestry concessions, a figure the bank says was reduced to 21m hectares when a moratorium on new concessions came into effect in 2002.

However, environmental activists including those from Global Witness, the natural resources watchdog which has just carried out a fact-finding mission with World Bank support, say there is a mismatch between the stated reform goals of 2002 and today's realities.

The moratorium was due to remain in place until the government had concluded a review - which it has yet to do. However, according to Reiner Tegtemeyer, a forestry expert at Global Witness, 70 per cent of all existing forestry licences have "either been issued or altered" since it came into effect.

"We have found there is complete anarchy in the provinces we visited. Everything comes back to the lack of controls. There is no reporting on forest production and often felling doesn't have appropriate authorisation," he added.

Environmental activists also claim that companies with no formal concessions are financing local felling of trees for export.

Responding to questions from the FT, the World Bank admitted that "the situation on the ground is far from satisfactory and that the reform agenda has been unevenly implemented."

The official added that the overall situation would be far worse if the bank had not engaged.

Logging probe

The International Finance Corporation, the World Bank's private-sector financing arm, is investigating allegations of environmental malpractice in Congo's forestry sector by a company it holds a stake in.

The IFC said it was reviewing allegations made by environmental groups against Olam, the Singapore-based global commodity trading house, in which the IFC holds $7.5m (EUR5m, £3.75m) in equity.

Greenpeace, the environmental campaign group, last month wrote to the IFC claiming that Olam sourced timber from "destructive and illegal" operations via subcontracting agreements with third-party suppliers involved in illegal logging.

The group claims that Olam facilitated logging operations by supplying equipment and personnel to third-party suppliers. The allegations have been backed up by other observers, including a forestry expert working under a World Bank fact-finding mission.

A spokesman for the IFC said: "We are aware of allegations regarding their timber operations in DRC [Congo]. We take such allegations very seriously and are reviewing the facts of the situation."

Earlier this year Olam returned its two forestry concessions to the Kinshasa government, and says no logging has been done under either licence. Olam says it wants to abide by a review of all concessions that has been continuing since a 2002 moratorium on timber licences.

The company denied it was sourcing timber illegally but said it was considering suspending its timber activities for three to six months while it reviewed its sourcing mechanisms.


edited:23/03/2009
uploaded:08/12/2007