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Board wants Panel to investigate whether the Bank has observed its policies and procedures in the preparation of the China Western Poverty Reduction Project

WASHINGTON, September 17, 1999 - The World Bank's Board of Executive Directors on the September 9, 1999, authorized the independent Inspection Panel to conduct an investigation into the China Western Poverty Reduction Project. The memorandum containing the decision, taken on a no- objection basis, states:

On August 24, 1999, Executive Directors received a memorandum from the Chairman of the Inspection Panel entitled "Request for Inspection: China: Western Poverty Project (Credit No. 3255-CHA and Loan No. 4501-CHA) - Panel Report and Recommendation " (INSP/R99-6, dated August 24, 1999). In this memorandum, the Chairman requested (i) agreement of Executive Directors that "appropriate representation is not locally available" for purposes of eligibility of the requesters under paragraph 12 of Resolution 93- 10 and of Resolution No. IDA 93 -6 (Inspection Panel Resolution); and (ii) Executive Directors' approval of the recommendation that the Board authorize an investigation by the Panel into the matters alleged in the Request for Inspection. Board determination of the issue of eligibility of the requesters will require obtaining and considering additional information and the careful analysis of a number of important issues. This process is likely to delay investigation by the Panel. Consequently, in order to expedite Panel investigation, it is proposed that, pursuant to paragraph 12 of the Inspection Panel Resolution, the Executive Directors, acting as a Board, instruct the Panel to conduct an investigation into whether the Bank has violated one or more of the following operational policies and procedures of the Bank, with respect to the design and appraisal of the Western Poverty Reduction Project (Credit No. 3255-CHA; Loan No. 4501-CHA): BP 17.50 (Disclosure of Information); OD 4.01 (Environmental Assessment); OD 4.20 (Indigenous Peoples); OD 4.30 (Involuntary Resettlement); OP 4.09 (Pest Management); OP/BP 4.3 7 (Safety of Dams); OD 12.10 (Retroactive Financing); and OD 10.00 (Investment Lending: Identification to Board Presentation).

The Panel report concluded that (1) the Request met all eligibility criteria required under the Resolution establishing the Panel, except that the Board itself had to decide on whether external representation was appropriate. (2) the Request for Inspection and the Management Response to it "contain a wide range of conflicting assertions and interpretations about issues, the underlying assumptions, the facts, compliance and harm. The Panel therefore recommended that the Executive Directors authorize an investigation. In this case the Executive Directors, acting as a Board, decided to ask for an investigation based on the alleged Bank policy violations in the Request for Inspection.

The Panel's report was prepared in response to a Request for Inspection from the International Campaign for Tibet acting on behalf of people living in part of the project area -- Dulan Country in the Qinghai province of China.

The Requesters claim that if the Qinghai portion of the project is approved and implemented, it will affect the lives and livelihoods of Tibetan and Mongolian ethnic peoples in Dulan who will suffer potentially irreversible harm. Specifically, they maintain that the resettlement of the nearly 60,000 new migrants will directly and adversely impact 4,000 local people and will have indirect impacts on the entire county including a serious risk of escalation of ethnic tension and resource conflicts. The Requesters claim that the potential alleged harm is a result of failures or omissions in the preparation and appraisal of the project by Bank staff in violation of the Bank policies on Disclosure of Operational Information, on Environmental Assessment and Pest Management, on Indigenous Peoples, and on Involuntary Resettlement.

Copies of the Inspection Panel Reports are available on the Panel's web site and from the World Bank's InfoShop, Public Information Centers in Paris and Tokyo, and the Bank's field office in Beijing. In Washington: World Bank InfoShop, 1818 H Street, NW, Washington, DC 20433 tel.: (202) 458-5454; fax: (202) 522-1500