World Rainforest Movement

New IDB Policy on Indigenous Peoples: Was it Worth the Wait?

This August the Inter-American Development Bank (IDB) will finally catch up to the rest of the pack by putting into effect its first Operational Policy on Indigenous Peoples (OP-765). Joining the World Bank, the Asian Development Bank, the United Nations Development Programme, and numerous private banks, the IDB finally takes its place among the other international financial institutions that have adopted policies over the last decade and a half which recognize the undeniable link between indigenous peoples’ rights, sustainable development and poverty reduction. Indigenous peoples and their advocates are now asking themselves if the resulting policy was worth the wait.

Taking heavy fire for the devastating impacts on indigenous peoples caused by mega energy projects like the Camisea gas pipeline in Peru, the Caña Brava hydroelectric power plant in the Brazilian Amazon, and the Yacyretá hydroelectric dam project along the border of Argentina and Paraguay, in 2004 the IDB publicly announced that it would draft, in consultation with indigenous peoples, a non-binding “strategy” for development that would address indigenous rights and concerns. In one loud voice, indigenous peoples scoffed at the Bank and insisted that they would only consult on the drafting of a binding policy that would obligate the Bank and its borrowers to respect their rights. In the face of a strong and organized indigenous advocacy, the Bank folded.

From the Spring of 2004 until the Summer of 2005 the Bank reportedly conducted over 40 “consultation meetings” with indigenous peoples. These consultations were largely based on a “profile” of the intended policy (a narrative outline of sorts) and not on the actual policy text. These efforts were widely criticized by indigenous peoples. They claimed that relevant information was not provided sufficiently in advance to permit an informed dialogue. They claimed that their comments were not incorporated into the working documents and that members of the Bank-established “Indigenous Advisory Council” were marginalized from the final drafting process. Notably, when the Bank finally produced an actual policy text it was the subject of only one face-to-face consultation with indigenous peoples that took place in Costa Rica in August of 2005.

Under this cloud of criticism, on February 22 this year the Bank’s Executive Directors adopted a text and a new policy was born. In its own words, the policy proposes to usher in a new era of “development with identity of indigenous peoples” and to “safeguard indigenous peoples and their rights against adverse impacts and exclusion in Bank-funded development projects.” The policy contains several positive elements that demonstrate the advances that indigenous peoples (and their allies within and outside of the Bank) have made in terms of sensitizing Bank directors and staff about their needs and rights. For instance, the new policy includes a clear recognition of collective rights, a prohibition on forcible resettlement, and a prohibition on the financing of projects that exclude communities on the basis of ethnicity or fail to respect the rights of uncontacted indigenous peoples to live as they choose. The policy also recognizes the relevant jurisprudence of the Inter-American system, applies to all Bank-supported operations and activities (not just specific projects) and requires some form of prior agreement with indigenous peoples in cases of: (i) significant potential adverse impacts, (ii) commercial development of indigenous culture and knowledge resources; (iii) operations specifically targeting indigenous beneficiaries, and (iv) resettlement.

Several problems, however, remain in the Policy and will require close monitoring. These include: the non-applicability of the policy safeguards to land and resources where indigenous claims are still pending or in dispute; the limited recognition of indigenous juridical systems and customary laws; the omission of independent mechanisms to verify Bank and Borrower compliance; the absence of express language providing for indigenous peoples’ participation or control over decisions to create or designate protected areas; the failure to more broadly require indigenous free, prior and informed consent whenever a Bank-funded activity affects their lands, territories and resources; and the presence of a loophole (buried in two footnotes) that allows the Borrower to essentially satisfy its consultation and negotiation requirements by simply showing that the indigenous peoples in question are not interested in consultations or have agreed that more negotiations and agreements are needed in the future.

Perhaps the policy’s greatest weakness is that it contains so many nuanced terms, qualifications, and standards — particularly for the consultation, negotiation, and consent processes and the evaluation and assessment phases. These are then coupled with only promises in the policy that the Bank will later provide the guidelines, procedures, monitoring, and verification mechanisms necessary to operationalize and implement the Policy.

Consequently, the effectiveness of the new policy will largely be determined by the manner in which the Bank staff and its Borrowers interpret its provisions and implement the same based on various guidelines, procedures and mechanisms that have still not been developed or drafted. The Bank says that it is engaged in this drafting now and that by the end of August they will produce a source book of best practices, some internal IDB guidelines, and an internal implementation plan. The extent to which these critical documents will be made public during their drafting stage or count with the involvement of indigenous peoples in their elaboration is still unclear.

So, was the policy worth the wait? Unfortunately, we will have to wait and see.

By Vanessa Jiménez, Senior Attorney with the Legal and Human Rights Programme of the UK-based Forest Peoples Programme.

For a copy of the IDB Policy, see: (English) or (Spanish)