The Saga of Disrupting Social and Environmental Safeguards in the Southern Transport Development Project (Sri Lanka)

Background

The Southern Transport Development Project in Sri Lanka is a construction of a 128 km long six-lane expressway connecting Matara, a southern city in Colombo, the capital of Sri Lanka. While the primary objective is to spur economic development in the southern region and to significantly reduce the high rate of road accidents, the secondary objective is poverty reduction. Main financiers are the Asian Development Bank (ADB) and Japan Bank for International Corporation (JBIC). The project is implemented by the Road Development Authority (RDA). The project was in a controversy since 1992 and the ADB got involved in it in 1996. The EIA was approved in 1999. However, implementation was delayed due to strong opposition from both affected people and the National and International environmental/advocacy groups, due to safeguard violations.

Environmental and social Impacts

The road passes through four river basins and over hundreds of other wetlands. It also crosses many villages. Over 1,300 houses were demolished due to the project. Around 8,745 lots are planned to be traversed by the highway. Current estimate shows that 5,683 households of all categories will be affected. The project has already destroyed thousands of hectares of paddy fields and home gardens. It has blocked waterways leading to flooding in the region. The project has pushed the affected families to depend on the market by destroying their sustainable livelihood.

According to affected communities, the compensation issue has not been settled even though the project was approved seven years ago. They allege that the RDA did not conduct proper asset and land evaluation. As a result, this has pushed many of them into further economic vulnerability. Affected people have spent most of the compensation money to construct new houses, thus, leaving little resources for their sustenance. Even worse, many families have not been compensated for trees and crops loss due to the project. These were their major sources of income. Affected people, who have resettled voluntarily, experienced loss of earning, which forced them to spend their compensation on other things instead of new homes. The situation is further aggravated by the lack of basic amenities in the resettlement sites provided by the RDA.1

Cutting or clearing of very steep hills, rock blasting and dumping soil into the paddy lands have created serious soil erosion along the road trace. The filling of paddy fields with this loose soil has threatened livelihoods as it is now difficult to farm. The filling of wetlands without adequate drainage system is also very damaging as this could lead to flooding problems in the future especially during rainy season. Further, dust pollution is unbearable in some areas. Rock blasting and heavy vehicle movement further poses health risks to people who live near the construction site. While the ADB claims that additional environmental studies have been undertaken to address these issues, situation has remained the same.

ADB Safeguard Policy Violations

The Compliance Panel Report prepared in July 2005, in response to the complainants of the affected communities, concluded that, “there have been, at some time during the Project from project processing to its implementation, lapses of compliance with the following applicable ADB policies and operational procedures.”

Involuntary Resettlement Policy

A year after the ADB Accountability Mechanism’s Compliance Review Panel issued its final report on the Project, it has continued to violate ADB’s Involuntary Resettlement Policy. The CRP concluded that, “compliance with this OM Section has been problematic since the Board approval, with the significant shifts of the trace without public participation. The CRP is also concerned about Management’s inattention to independent monitoring and the need for supporting performance in the areas of compensation and resettlement.”

Local communities have been complaining of continued violations of various ADB safeguard policies, despite the CRP findings. Most of the affected communities expressed their dissatisfaction over (1) compensation procedures and amount, (2) land possession by the authorities for the project, (3) evaluation of assets, (4) living conditions in resettlement sites, and (5) transparency of both the ADB and RDA procedures.

Environment Policy

The CRP report produced in July 2005 stated that, “Management cannot be satisfied with the sufficiency of the Environmental Impact Assessment done in 1999 and the ensuing Environmental Findings Reports for the ADB section. Also, the Galle access road has not received an adequate review of its environmental impacts, and some stretches of the Final Trace well away from the Combined Trace need more attention. Public information and participation in the environmental review process has been inadequate since late 1999.”2 The complainants claimed that non-compliance by the ADB of its operational policies and procedures had impacted their lives negatively. They stated that the project implementing agency altered 40 percent of the original alignment of the highway leading to loss of homes, livelihoods as well as negative impacts on local ecology and wetlands. However, there has been no environmental monitoring for the project. While social impacts were prioritized due to the involvement of the affected communities, the environmental issues were not properly addressed.

After the ADB Board approved the CRP findings, the Bank’s South Asia Regional Department prepared a Course of Action. This laid out steps to bring the project into compliance based on the 15 recommendations of the CRP. In its October 2005 progress report, ADB Management informed the Board that it had started implementing remedial actions including the required additional studies on Supplementary Environmental Assessment, Income Restoration Program, and gender issues.

However, progress on the Course of Action has been considerably delayed. The CRP recommendations are yet to be implemented after nearly one year. Many affected people have not yet received full compensation. There has also been a lack of progress in the income restoration program. Moreover, details about the project and its implementation status, as per the Board decision, have also not been provided to affected people in local languages.

The Monitoring report issued by the CRP in July 2006 stated that the Management has fully complied with only three recommendations and partially complied with six specific recommendations. However, it also stated that the Management has not complied with three general recommendations and seven specific recommendations that include: “Management should require that all affected persons be fully compensated by actual payment before they are moved.”

The Panel also reported that “some of the affected people remain dissatisfied with specific impacts of the project. There are many potential reasons for these objections, ranging from highly specific issues such as construction-related cracks in buildings to broad anxieties related to the disruption of cultural norms such as the integrity of extended families in landholdings of historical significance.”

Lessons to Learn

Affected people believe that STDP and the violation of ADB Guidelines, Resettlement Implementation Plan (RIP) and Loan Covenants are inseparable twins. Since its inception, the project has been marred by interruptions due to infringement of project guidelines. Implementation arrangements and oversight processes have been far from adequate and have resulted in numerous instances of policy violations. The Road Development Authority (RDA) is now expected to complete the project by 2009.

On paper, the ADB safeguard policies are one of the best among the IFIs. But the Bank has been repeatedly criticized for their non-implementation. The recent CRP report on the Southern Transport Development projects stated that, “Management should review selected road projects as to how changes of scope may make the application of environment and resettlement policies more difficult.” The report further state “The Panel wishes to make clear that its intent in this recommendation was that ADB should assess the potential for weakening of application of safeguard policies when minor or major changes are made. It seems clear, in the case of STDP that the environmental safeguards were weakened with the changes of trace and stakeholders at each project stage until the Final Trace.”

The main reasons include the following:

· inadequate environmental impacts assessment during the design, lack of willingness to address the environmental issues due to vested interest;

· inadequate law enforcement in settling disputes over the affected environment at local level;

· inadequate human capacity, expertise and funds in the project monitoring and approving agencies;

· lack of clarity and disregard of ADB policies as well as local policies and how to implement them

· lack or transparency and public participation in project design and implementation,

· lack of binding of the contractors and subcontractors to environmental provisions required by ADB.

Bureaucracy is also one of the major problems in STDP case. It also shows that co-financing agencies have no clarity on how to implement safeguard policies.

(Footnotes)

1 BIC, NGO Forum on ADB and CEJ.“A Fact-finding Report on Status of Resettlement Implementation Plan.” June 2006. Therea.

2 ADB. “ADB Accountability Mechanism

Compliance Review Panel Annual Monitoring Report 2005-2006 to the Board of Directors on CRP Request No. 2004/1 on the Southern Transport Development Project in Sri Lanka(ADB Loan No. 1711-SRI[SF]).” Manila, 11 July 2006.