The World Bank Group has indirectly financed projects that fuelled land grabbing, displaced thousands of people and caused deforestation and environmental damage worldwide. These are the findings of an investigation conducted by the human rights organization Inclusive Development International, which are summarized in the report “Unjust Enrichment: How the IFC Profits from Land Grabbing in Africa”. The report alleges that the World Bank’s private-sector arm, the International Finance Corporation (IFC), is supporting harmful investment projects by outsourcing its development funds to the financial sector. Through shadowy investments in financial intermediaries, such as commercial banks and private equity funds, the IFC has contributed to some of the most notorious land grabs in Africa, says the report, which was published on May 1 by Inclusive Development International, Bank Information Center, Accountability Counsel, Urgewald and the Oakland Institute. “Tens of millions of hectares of land on the African continent have been grabbed by foreign investors in recent years. This has led to loss of life, land, and livelihoods for millions, and threatened the very survival of entire communities and indigenous groups,” said Anuradha Mittal, Executive Director of the Oakland Institute.

The report followed the trail of IFC money and uncovered 134 harmful or risky projects financed by 29 IFC financial-sector clients. These projects are found in 28 countries and on every continent except Antarctica. In Africa, the investigation uncovered 11 projects backed by IFC clients that have transferred approximately 700,000 hectares of land to foreign investors. The projects include agribusiness concessions in the Gambela region of Ethiopia that were cleared of their indigenous inhabitants during a massive forcible population transfer campaign in the area and a gold mine in Guinea that led to the violent forced eviction of 380 families. In Gabon, Ecobank Transnational, an IFC financial-sector client, has financed oil palm plantations and processing facilities operated by the Singaporean company Olam. The project is being developed on a 300,000-hectare concession that local and international environmental groups warn threatens to destroy large areas of the Congo Basin rainforest, harming biodiversity and the livelihoods of thousands of people. According to one investigation, Olam’s plantations have led to the destruction of at least 19,000 hectares of rainforest and had adverse impacts on the land and resource rights of local communities.

In addition, export-oriented industrial sugarcane plantations in Sierra Leone and Zambia, funded by multiple IFC financial intermediaries, have been accused of grabbing small-holder farmland and displacing thousands of people, leading to declining incomes and food security. “These projects are antithetical to the World Bank’s mission of fighting poverty through sustainable development,” said David Pred, Managing Director of Inclusive Development International. “They also make a mockery of the IFC’s social and environmental Performance Standards, which are supposed to be the rules of the road for the private sector activities that the IFC’s intermediaries support.” IFC responded to some of the allegations in the report, stating that it has already exited investments in banks highlighted in the report, including ICICI and Kotak Mahindra in India and BDO Unibank in the Philippines. The IFC Executive Vice President recently announced additional improvements in the way IFC works by scaling back IFC’s high-risk investments in financial institutions, increasing its oversight of intermediaries and bringing more transparency to these investments. “We welcome the IFC’s new commitments to encourage a more responsible banking system,” said Pred. “However, rather than simply divest, we want to see the IFC work with its clients to redress the serious harms that communities have suffered as a result of the irresponsible investments that we have brought to light.” (ab)