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FINANCE: New Pipeline a “Recipe for Disaster”, Locals Say

Emad Mekay

WASHINGTON, Apr 27 2006 (IPS) - Local communities in Nigeria are taking the World Bank before an internal auditor over claims that the lender neglected its duties and anti-poverty mission when it funded a controversial gas pipeline in the region, whose construction they say will harm the environment and area residents.

Twelve Nigerian communities said Thursday they were filing the complaint about the West African Gas Pipeline with the inspection panel of the World Bank, the investigative arm of the Washington-based public lender, charging the Bank with derelict conduct in carrying out necessary “due diligence” about the project’s impacts.

The 678-km pipeline, which would transfer natural gas from the Western Niger Delta to Benin, Togo and Ghana, is run by a consortium of oil giants led by ChevronTexaco and Royal Dutch Shell. It is set to be completed in May, and project officials said earlier this month that about 530 kms of pipeline have been laid so far.

In November 2004, the World Bank’s insurance arm, the Multilateral Investment Guarantee Agency (MIGA), approved 125 million dollars in guarantees supporting the construction of the pipeline. MIGA is the World Bank agency that promotes foreign direct investment in developing countries by providing insurance to private corporations.

The consortium is now seeking support from the European Investment Bank to help fund the 590-million-dollar project.

ChevronTexaco had originally requested the Bank’s involvement, indicating that it would not implement the project without mitigation of what the company perceives as “political risks” linked to natural gas sales to state-owned power companies in Ghana, Benin and Togo.

But the complaint by the Association of Host Communities in Lagos State filed with the three-member Inspection Panel of the World Bank says that by approving the funds, the World Bank breached its policies and safeguards on project supervision, resettlement, environmental assessment and economic evaluation.

“In Nigeria, oil and gas are at the heart of severe conflicts,” noted Asume Osuoka of Environmental Rights Action and Friends of the Earth Nigeria.

“Not applying social and environmental policies, as the World Bank did, is a recipe for disaster. Local people are now calling on the inspection panel and the international community to resolve the grave problems caused by the project.”

The complaint seen by IPS lists four major grievances. One of them is that locals received inadequate compensation, which came out to only 40 percent of the market rate for their land.

And contrary to the World Bank’s policy on full disclosure, not all stakeholders had access to details about the project, and the information provided was not understood by many people living in affected communities, the complaint charged.

They also argue that the Bank violated its own environmental rules.

“Although the majority of our community people are not landowners, the pipeline would pass very close to our homes, through routes our children take to their schools, routes our women take to their farms and to our fishing grounds,” they said.

The Bank had initially marketed the pipeline as a “flagship project in the push to accelerate economic integration in West Africa”.

But the claimants charge that the project fails to provide jobs for local people, and would contribute to global warming and do little to end dangerous gas flaring.

“We believe that the West African Gas Pipeline Project, if executed as presently conceived, would do irreparable damage to the land and consequently, destroy the livelihoods of the 12 communities,” the complaint says.

“We are disappointed with the complete inaction taken to address our concerns. We therefore think that this project will further impoverish the people of our communities,” it adds.

Environmentalists are particularly incensed by what they see as the Bank’s lax attitude, because the lender’s involvement in the West African Gas Pipeline was supposed to be a safety net to guarantee that the project would alleviate poverty.

“The current situation seems to indicate that the World Bank simply is not able to implement its policies and serve the poor,” said Janneke Bruil of the environmental group Friends of the Earth International in a statement.

The Inspection Panel will first look into the eligibility of the complaint to see if it merits a more serious investigation. If approved, the panel will conduct a probe that includes travel to the area and interviews with local residents.

“The four policy violations are really clear-cut. I am quite confident that the complaints are strong enough for the complaints to be eligible,” Bruil told IPS.

Under international law, local communities affected by World Bank projects cannot sue the Washington-based institution in any national court. The only option is to report the Bank to the inspection panel, whose members are appointed by the Bank’s board for five-year terms, and which will then issue a report outlining remedies.

The panel’s job is to ensure that the Bank adheres to its operational policies and procedures.

A representative from the World Bank was not immediately available for comment.