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Inspection Panel Finds mixed results in Brazilian Amazon Project

​CONTACT: Eduardo Abbott

Telephone: (202) 458-5200

WASHINGTON, April 10, 1997 -- The World Bank today released the report of the independent Inspection Panel to the Board of Executive Directors on PLANAFLORO, a controversial natural resource management project in Brazil's Rondonia state financed with a US$167 million loan from the World Bank approved in 1992. The Board reviewed the Panel's report on April 3, and accepted its findings in full.

The project was intended to improve natural resources management and conservation in an Amazonian state that had experienced severe environmental damage, particularly through deforestation, during large-scale inward migration in the 1970s and 1980s. The project sought to introduce zoning that would distinguish between areas capable of sustaining economic activity from those requiring special protection due to ecological fragility or the presence of Amerindian indigenous peoples.

Delays in zoning and in financing protection of designated areas caused leading local NGOs and their international partners to request an inspection by the Inspection Panel in 1995. The Board recently asked the Panel to review the extent of progress during the last 18 months on a Plan of Action undertaken by World Bank management in reponse to the request.

The Panel's report recognizes the difficulties of carrying out such an ambitious, complex project in the frontier areas of the Amazon. The findings recognize progress during the last year in the supervision and administration of the project, particularly those resulting from the shift of Bank oversight to field offices in Brazil. The report notes that, after a delayed start of the project, "with Bank assistance significant improvements have taken place in PLANAFLORO administration at the technical and accounting as well as the managerial level."

It notes, however, that deforestation has continued at high historical levels, nearly 450,000 hectares per year, and recommends ongoing monitoring and control of land clearing as a priority for the project. The report notes the continuation of illegal timber cutting and settlement in protected areas, and urges effective enforcement action against this infringement of defined borders. It also finds little progress in implementing a sustainable health plan for indigenous people. Despite these problems, the review noted that the local people affected by the project consider its continuation preferable to ending World Bank involvement.

The independent Inspection Panel was established by the World Bank's Executive Directors in September 1993 to help ensure that the Bank's operations adhere to the institution's operational policies and procedures. Any group of individuals who may be directly and adversely affected by a Bank-supported project can request the Panel to investigate complaints that the Bank has failed to abide by its policies and procedures.