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Down to Earth IFIs Factsheet Series

No 25, September 2002

IFIs in Indonesia

This series of monthly factsheets on International Financial Institutions (IFIs) will include information on the World Bank Group, the International Monetary Fund (IMF) and the Asian Development Bank (ADB), focussing on their involvement in Indonesia.

Indigenous Peoples Reject Bank's Indigenous Peoples Policy Review

Indigenous peoples from all over the world that have been following the World Bank's Indigenous Peoples Policy Review have rejected the review process and draft revised policy. The Bank's attempt to revise its Indigenous Peoples Policy is in danger of resulting in a weakened policy that does not live up to the internationally-recognized rights of indigenous peoples. In fact, the current policy is stronger than the draft revised policy in that provides certain safeguards for indigenous peoples that are not present in the revised draft. Despite pressures from indigenous peoples groups, the Bank plans to go ahead with the revised draft and will send it to the Bank's Board of Executive Directors for approval sometime in the late autumn of 2002. In the meantime, however, indigenous peoples have persuaded the World Bank to take part in a public roundtable discussion on the Draft Policy to discuss their worries in more depth. Indigenous peoples' organisations are requesting that the Bank gives clear assurances that the priorities and concerns that they raise in the Roundtable will afterwards be addressed in the final draft.

The World Bank is in the final process of revising its Indigenous Peoples Policy (OD 4.20). This revision is part of a larger Bank-wide process of converting policies from Operational Directives (OD) format into Operational Policies (OP) and Bank Procedures (BP) (both of which are mandatory), and Good Practices (GP) (which are advisory).

According to the Bank, the revision of the policy is to clarify ambiguities and processing requirements and to facilitate implementation. However, indigenous peoples and other civil society groups that have been following the revision process complain that their principal concerns and recommendations have not been addressed in the Draft Policy and that the proposed revisions are not clarifying ambiguities but are, in fact, weakening the usefulness of the policy itself.

Problems with the Substance of the Revised Draft Policy

The revised draft of March 2001 has been highly criticized for serious deficiencies that, if not corrected, will result in a much weakened policy. The deficiencies include:

Flawed Review Process and Public Consultations

In addition to the deficiencies in the substance of the revised draft, the review process itself has caused concern among indigenous peoples and campaigning NGOs tracking the policy revision. The Bank is planning to finalize the policy revision in late 2002. At the same time, however, the Bank's Operations Evaluation Department (OED) is conducting an implementation review of OD 4.20, due to be completed by April 2003. After much pressure from indigenous peoples organisations and advocacy NGOs, the World Bank finally acknowledged in July 2002 that the policy revision might benefit from the findings of the OED implementation review. However, the Bank has only committed to taking account of an initial draft of the implementation review. In August 2002, indigenous peoples activists wrote again to the Bank urging them to go one step further and await the full final report and enable a public discussion on its findings before finalising the new Indigenous Peoples Policy.

Since the beginning of the consultation process, Indigenous peoples organizations and NGOs have asked Bank staff how their comments would influence the contents of the final drat policy. The Bank has failed to respond to this basic issue by just saying that all public concerns would be "systematically documented" and included in the summary report of the consultations to be presented to the Bank's Board together with the final draft policy. There have also been serious criticisms by indigenous peoples representatives about the way that the Bank carried out its so-called "consultations" in 2001. Problems reported include:

A growing frustration with the whole policy revision process among indigenous peoples and NGOs has resulted in a rejection of the consultation process as well as the current revised draft. They feel that they have been so far been denied the opportunity to significantly shape the outcome of the revision process and that the Bank has largely disregarded their principal concerns and their recommendations on how to improve the existing policy. They point out that instead of acting on indigenous priorities, the revisions to the policy have mainly addressed the concerns of governments and proposals made by Bank staff. They consequently feel little or no ownership over the draft revised policy that is supposed to benefit them! The Bank's own guidelines on public consultation acknowledge such a feeling of alienation is likely to emerge where people judge that their time and energy have not influenced a process.

Further Call to the Bank

Indigenous peoples groups and NGOs continue to call on the Bank to adopt a new, more inclusive and equitable process in finalizing the revision process. They demand that the Bank delay the revision process until the OED Implementation Review of OD 4.20 is completed and the outcomes are incorporated in the revised draft. The delay of the process should also allow the Bank to take into account the results of the ongoing internal Bank review of its policy regarding the relationship between human rights and development. The incorporation of both reviews should involve indigenous peoples groups and NGOs.

In a face-to-face meeting between indigenous representatives and senior World Bank managers held in Washington, D.C., in July 2002, the World Bank finally accepted an invitation made by the indigenous participants to co-organise and jointly host a roundtable meeting with indigenous peoples' representatives to discuss their multiple concerns in more depth (the Bank had declined similar invitations for detailed dialogue for nearly a whole year prior to the meeting). This dialogue is due to go ahead on 17 and 18 of October 2002.

It is too early to say how useful this dialogue will turn out to be: the real test will be whether or not indigenous peoples are broadly satisfied with the final version of the policy which they want to be modified following the Roundtable to take account of their concerns.


Contact: Tom Griffiths of the Forest Peoples Programme

This IFI factsheet is published by Down to Earth, the International Campaign for Ecological Justice in Indonesia.

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