The Journal of International Policy Solutions

- 11 - Spring 2007 | Volume 7

Addressing the Social Impacts of Large
Hydropower Dams


SOPHIE NAMY
University of Washington
Jackson School of
International policy and
Daniel J. Evans School of
Public Affairs
Edited By Paul Schuler
KEY DEFINITIONS

Compensation: Alternative resources (land, property or money) provided to displaced people or others adversely
affected by a project as mitigation for losses suffered.
1

Dispossession: The deprivation of land, common resources, homes and other assets depended on for livelihood and/or
cultural practices.
Large dam: Defined by the International Commission on Large Dams (ICOLD) as a dam measuring 15 meters or more
from foundation to crest. Dams of 10-15 meters may also be considered large dams if they meet the following
requirements: crest length of over 500 meters, reservoir capacity of at least 1 million cubic meters, and maximum flood
discharge of 2,000 cubic meters per second.
2

Project-affected persons: People whose economic, social and cultural lives are negatively affected by construction of
dams, related infrastructure, or alteration of river flows and any ecological consequences. The term includes displaced
people, host communities, and downstream and upstream populations.
3

Social impact assessment: The processes of analyzing, monitoring and managing the intended and unintended social
consequences, both positive and negative, of planned interventions and any social change processes invoked by those
interventions.
4


THE CHALLENGE
During the 20
th
century large dams emerged as symbols of
modernity. Hailed for being an effective way to harness water
resources for food production, energy generation, flood
control and domestic use, dams became synonymous with
progress and economic development. Construction peaked
during the 1970s when an average of two or three large dams
were commissioned per day throughout the world. An
estimated $2 trillion has been invested in large dams since
the early 1900s,
5
justified by a range of projected outcomes
from poverty reduction to increased local water supply.
However, in recent decades dam projects have become mired
in controversy. Opponents charge that benefits have been
grossly overstated while the social and environmental costs
have been largely ignored.

In April 1997, the World Bank (WB) and the World
Conservation Union created the World Commission on Dams
(WCD) to conduct a rigorous, independent review of the
development effectiveness of large dams . . . and develop
internationally acceptable criteria, guidelines and standards
for the planning, design, appraisal, construction, operation,
monitoring and decommissioning of dams.
6
The final report
(2000), entitled Dams and Development: A New Framework
for Decision Making, drew from eight detailed case studies,
125 surveys, hundreds of consultations worldwide, and over
900 evaluative submissions.
7
While acknowledging the
historical contributions dams have made to economic growth,
it concluded that in too many cases an unacceptable and
often unnecessary price has been paid to secure those
benefits, especially in social and environmental terms, by
people displaced, by communities downstream, by taxpayers
and by the natural environment.
8


Although some efforts to curb the negative effects of dams
have been made, governments continue to embark on large-
scale hydropower projects without adequately considering the
social and environmental consequences. Clearly a need exists
to develop alternative frameworks for future projects. As a
primary financial backer of large dams, the Bank has an
obligation to take a lead in this effort. According to the
International Rivers Network, the WB has provided an
estimated $75 million dollars to support 538 large dams (as
of 1998) and remains one of the largest single sources of
funds used for large dam construction worldwide.
9

Recognizing that dams will continue to be built for
hydropower production, this analysis is an attempt to
evaluate policy alternatives that the WB can impose on its
borrowers to minimize the social impacts of dams.

ENERGY & INTERNATIONAL DEVELOPMENT
Energy supports all facets of human development, such as
providing for basic needs, assisting productive activities, and
facilitating effective health care. The United Nations
Development Program (UNDP) emphasizes the importance of
affordable energy in the developing world, citing improved
access to energy sources as critical for the realization of all
Millennium Development Goals
10
put forth by the United
Nations to improve living conditions for the worlds most
vulnerable populations by the target date of 2015. The goals
range from achieving universal primary education to ensuring
environmental sustainability
11
. Similarly, the WB argues that
energy shortages prevent growth by increasing the costs of
doing business, reducing productivity, and hampering the
development of industry and commerce.
12
Unfortunately,
due to increasing populations, urban expansion and global
economic growth, many countries find their energy supply far
outpaced by demand. In 2004, the United Nations
Symposium on Hydropower and Development estimated that
over 2 billion people are currently without electricity or a
secondary source of energy.
13
The total energy shortfall in
South Asia alone has been reported at 125 million tons of oil
equivalent, with demands expected to double before 2010.
14

As fears of an impending crisis gain legitimacy, finding
sustainable energy sources has become a priority for nations
worldwide.


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Spring 2007 | Volume 7 - 12 -
THE CASE FOR HYDROPOWER
After the initial capital investments are made, hydrosystems
have many advantages over fuel-burning energy sources.
Although not without greenhouse gas impacts, hydropower is
considered a relatively clean source of renewable energy
production. Once built, hydroelectric plants have low
operating costs and long service lives. At the World Summit
on Sustainable Development (WSSD, Johannesburg, 2002), a
commitment was made to increase hydropower production as
a means of addressing environmental concerns. Stphane
Dion, President of the United Nations Climate Change
Conference, argues that in our increasingly carbon-
constrained world, renewable energy forms, such as
hydropower and wind power, have the potential to meet the
economic, social, environmental, and sustainability criteria
demanded of our times.
15
Currently 140 countries have
hydropower facilities contributing to one-fifth of the worlds
energy supply.
16
However, two-thirds of economically viable
hydropower potential has yet to be tapped, and 90 percent of
this potential is in developing countries.
17


Although dams have existed for thousands of years, the past
century has witnessed a huge surge in large dam
construction, most notably in the developing world. Over
45,000 large dams have been built,
18
primarily to support
growing water and energy needs, and in light of the current
emphasis on sustainability noted above, this trend can be
expected to continue. Additional advantages are also widely
perceived. Considerations such as increased irrigation
capacity, regional development, job creation, enhancing
export capability and flood control often accompany decisions
to build dams. However, many dam projects have fallen short
of expectations, and unquantified social and environmental
costs have dramatically obscured traditional cost-benefit
assessments. Embarking on a large hydropower dam project
is currently a highly contested issue.

THE CURSE OF THE DAMMED?
During the past 20 years, a growing international movement
against dams has emerged, rallying behind the charge that
governments have notoriously ignored human and ecological
costs when beginning hydropower projects. The dangers that
dams pose to the natural environment have been widely
documented. The International Rivers Network (IRN) reports
that 60 percent of the worlds major rivers are dammed and
just under one percent of the worlds land surface has been
inundated by reservoirs worldwide.
19
The detriment to rivers,
wetlands and forests have been extensive, and led to
irreversible loss of species and ecosystems.
20
This paper,
however, centers its analysis on the social effects of
hydropower dam projects.

The WCD found that between 40 and 80 million people have
been physically displaced by dams worldwide.
21
A WB review
of projects between 1986 and 1993 estimated that 4 million
people were displaced annually by the 300 large dams (on
average) that were constructed each year.
22
This scale of
mass-displacement makes it imperative that the potential
impacts on livelihood, health, and traditional cultures be
carefully monitored and managed. Equity concerns are also
relevant. Displaced communities are frequently indigenous
people and other ethnic minorities whose voices have too
often been silenced by existing power structures. The most
commonly cited negative social impacts of dams are
described below:

Dispossession: The WCD reports that most indigenous
communities and other ethnic minorities faced with dam-
based development projects have experienced
dispossession and denial of their basic rights.
23
Most
obviously, the construction of dams and related
infrastructure leads to the loss of considerable areas of
agricultural land, forest, fishing grounds, grazing lands
and other resources on which impacted communities rely
for their livelihoods and cultural practices. Additionally,
downstream communities may be intricately linked with
the river system and surrounding wetlands. The WCD
further notes that alongside other negative impacts,
structural changes to river patterns are likely to
adversely affect agricultural, grazing and fishing
economies downstream and reduce land values.
24

Subsequently, the ecological consequences of dam
projects also have secondary effects on livelihood, food
security and traditional practices in nearby communities.

Although safeguards exist in international treaties such as the
International Labor Organization (ILO) Convention Nos. 107
and 169, as well as the WBs Operational Directive 4.20 on
Indigenous Peoples, in practice these agreements are rarely
binding. For instance, in direct violation of ILO Convention
107 (requiring states to recognize the right of ownership,
collective or individual, of the members of the populations
concerned over the lands which these populations traditionally
occupy
25
) to which India is a signatory, the WB-funded
Sardar Sarovar Project treated 70-85 percent of tribal oustees
as landless and subsequently did not provide compensation.
The backlash against the Narmada Valley Project has become
a focal point for much of the anti-dam movement. In its
entirety, the project is projected to cause the displacement of
1 million people, one of the largest displaced populations in
dam-building history. The Narmada Sagar and Sardar Sarovar
dams are expected to flood a total of 289 villages, submerge
865,000 acres of forest and more than 400,000 acres of
cultivated land.
26
The Three Gorges Dam on the Yangtze River
in China has also been highly contentious, planning to flood
an area of more that 632 sq. km and displace 1.4 million
people from their homes.
27


Cultural Alienation: The fertile soils of river valleys
have always been densely populated, giving rise to
some of the worlds most ancient civilizations.
Displacing these communities risks the loss of
valuable traditional knowledge systems and destroys
part of the worlds cultural heritage. The WB has
recognized that forced displacement threatens
traditional kinship associations. Moreover, the
abandonment of symbolic markers such as grave
sites and ancestral lands can sever linkages with the
past and undermine a communitys cultural
identity.
28


The physical landscape of indigenous communities is often
intimately linked to their social, cultural and political way of
life. For example, Survival International notes that the
Akawaio have invested the landscape with special
significance. It is an environment transformed by their
ancestors in conjunction with the mystic forces of the
universe . . . thus the landscape is dynamic, every part is
living, functional, has meaning and moral value (referring to
the Akawaio Indians of Guyana threatened by the Upper
Mazaruni Dam in the 1970s).
29
In its extreme form, the
involuntary resettlement of indigenous groups as a result of
large-scale dam projects has been deemed ethnocide. The
World Council of Indigenous Peoples in 1985 lamented that:

Next to shooting Indigenous Peoples, the surest
way to kill us is to separate us from our part of the
Earth. Once separated, we will either perish in
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- 13 - Spring 2007 | Volume 7
body or our minds and spirits will be altered so
that we end up mimicking foreign ways, adopt
foreign languages and build a foreign prison
around our Indigenous spirits, a prison that
suffocates rather than nourishes as our traditional
territories of the Earth do. Over time, we lose our
identity and eventually die, or are crippled as we
are stuffed under the name of assimilation into
another society.
30


Health: The World Health Organization (WHO) has
reported that the reservoirs created behind dams are
often breeding grounds for water-borne illnesses (such as
schistosomiasis, malaria, and cholera) and other
potentially toxic bacteria.
31
Numerous studies have
corroborated these health risks. For example, a study
undertaken in the Cote d'Ivoire documented significant
increases in schistosomiasis after the construction of two
large hydroelectric dams (from 14 to 53 percent around
Lake Kossou and from 0 to 73 percent around Lake
Taabo).
32
A study in Sri Lanka revealed that increased
outbreaks of malaria seem intimately related to
hydrological changes brought about by major irrigation
and hydroelectric schemes on the Mahaweli river,
exacerbated by the increased migration caused by
resettlement. The report concludes that this story is a
classic of health impacts overlooked in favor of
agricultural and industrial development.
33


Elevated mercury levels in fish downstream of dam projects
have also been documented, posing long-term health risks
linked to fish consumption. One study in Brazil found fish
mercury increases in Lago Manso, a hydroelectric reservoir.
The authors expected mercury levels to return to normal
within some decades, but warned that the reduced fish
populations downstream from the dam would most likely be
permanent because of decreased water flow. According to the
study, the risk of elevated mercury (Hg) concentrations in
fish has become one of the most important issues in
assessing the environmental impact of hydroelectric
reservoirs.
34


Finally, the stress of relocation and disruption of social
networks is also known to adversely affect health and well-
being. Women may be particularly vulnerable to the
resettlement process, as noted by the WCD report:
Compulsory resettlement is stressful because of the way in
which people are uprooted from homes and occupation and
brought to question their own values. Gender is an important
factor in resettlement. Women as marginalized entities within
marginalized communities are often forced to shoulder the
ordeal of displacement far more intensely.
35


Discrimination: In 1994, the WB acknowledged in its
Bank-wide Review of Projects Involving Involuntary
Resettlement that those resettled as a result of dam
projects are generally from the poorest and most
vulnerable sections of society.
36
The WCD Thematic
Review on Social Issues also concluded that due to
structural inequities and institutionalized racism,
indigenous populations and other minorities have
suffered disproportionately from the negative impacts of
large dams, while often being among those who have
been excluded from sharing the benefits.
37
As an
example, the Indian government estimates that over 40
percent of displaced people are from adivasis (tribal)
communities that represent only 6 percent of Indias total
population.
38
Moreover, dams may impose a
disproportionate cost to women who are often more
dependent on the common resources eliminated by
projects and/or more vulnerable to the social and cultural
disruptions that occur with relocation. Compensation
repayments are often distributed to men, further
complicating womens recovery. The WBs Operations
Evaluation Department noted in 1998 that dam projects
were largely oblivious to the gender aspect of
resettlement.
39


This disproportionate impact demonstrates that vulnerable
groups have been excluded from the decision-making process
to build dams and more general economic and political
participation in the societies in which they live. Moreover,
there is little indication that the benefits from hydropower
projects reach the minority populations who suffer the
greatest losses. As UNDP Senior Water-Policy Advisor Carlos
Linares remarks, Nobody has ever proven that the benefits
of large dams go to the poor . . . they may reflect well on
GNP and other macroeconomic indicators and increase
production, but that doesnt really give us any idea of the
equity aspects of large dams.
40


The standard cost-benefit analyses that typically precede the
decision to build large dams often ignore many if not all of the
wide ranging social impacts described above. Underlying
causes of these negative impacts include violations of
international treaties protecting the rights of vulnerable
groups, deep-seated structural inequalities reflected in a
variety of institutional practices that reinforce the
marginalized status of minorities, lack of accountability of
planners and implementing agencies to affected peoples, and
utilitarian ideologies that enshrine the greater common
good as the highest national priority.

DIVERGING PERSPECTIVES
While all sides of the debate agree on the need to consider
the social and environmental aspects of dam construction, no
consensus has emerged regarding how to incorporate these
issues moving forward. Critics charge dam projects of being
inequitable because the poor, other vulnerable groups and
future generations are likely to bear a disproportionate share
of the social and environmental costs of large dam projects
without gaining a commensurate share of the economic
benefits.
41
However, international organizations such as the
WB support dams because they believe the economic,
technological and social benefits are important for the
development of nations overall and that these advantages will
eventually improve the lives of all individuals.
42
With a global
imperative to increase renewable sources of energy,
hydropower facilities will continue to be built, especially in
many developing nations rich in hydro-resources. There is an
urgent need to develop policies that minimize the social
impacts of these projects so they can be implemented fairly
and cautiously for the benefit of everyone involved.

SHOULD THE WORLD BANK INTERVENE?
The WB has historically been one of the primary lenders and
financial backers of dam development projects. However, in
recent years there has been growing recognition that their
mission of poverty reduction is undermined when lending
activities disregard potential social and environmental
impacts. Dams are especially problematic because
involuntary resettlement often leads to a decreased standard
of living, as indicated by the WCD finding that
impoverishment and disempowerment have been the rule
rather than the exception with respect to resettled people
around the world.
43
The paradox of development-induced
displacement has been acknowledged by the WB, whose
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Spring 2007 | Volume 7 - 14 -
General Counsel reported in 1993 that the heightened risk of
impoverishment as a consequence of displacement runs
contrary to the banks goal of alleviating poverty through
developing the productive potential of the poor.
44
In 2001,
former President Wolfensohn responded to the WCD Report
by acknowledging the large cost that is sometimes paid to
obtain the benefits of large dams. He further emphasized
that the Bank is currently focusing more on financing dam
rehabilitation and safety than in supporting the construction
of new dams.
45


The WB does not have a singular policy that determines
whether it will finance a dam project. Rather, operational
policies related to environmental assessment, natural
habitats,
safety of dams, and involuntary resettlement guide the Banks
dam-related lending decisions.
46
In response to the
increasing demands on behalf of civil society groups and
donor governments that public funds are not used for projects
that commit human rights violations,
47
the WB has
implemented a series of policies in adherence to the
International Covenant on Economic, Social and Cultural
Rights. The Operational Directive 4.20 on Indigenous Peoples
(1991) that aims to ensure that the development process
fosters full respect for the dignity, human rights and cultures
of indigenous peoples
48
is one such example.

Bank policies have also been influenced by the WCD final
report. The Commission put forth a rights and risks
approach to assessing options and implementing dam
projects, highlighting the need to protect the rights of all
relevant stakeholders and take account of the risks that they
bear. The WCD offered seven strategic priorities and 26
specific guidelines for operationalizing the rights and risks
framework.
49
While the WB left the adoption of the proposed
guidelines up to implementing governments and/or private
developers (emphasizing that they provide guidance and
not a regulatory framework

),
50
the Bank has initiated a
Dams Planning and Management Action Plan to improve the
evaluation, implementation and operation of WB-sanctioned
dam projects.

However, inconsistencies between rhetoric and practice have
not escaped notice, and resentment towards the WB is
growing at the grassroots level.
51
It is imperative that the WB
uphold its commitment to poverty alleviation by ensuring its
lending decisions do not inadvertently impoverish affected
citizens. Moreover, it is important to recognize that disparate
impacts resulting from dam projects contribute to social
inequalities and threaten stability worldwide. As former WB
President Wolfensohn acknowledged, Only with poverty
reduction will peace be possible: an unequal planet will be a
planet of war and violence.
52
The WB is a powerful actor in
the arena of international development and must take the
lead in establishing explicit policies that are effective in
minimizing the social impacts of large dams.

CRITERIA FOR POLICY ALTERNATIVES
In order to minimize the social impacts of dams, effective
policies must strive to reduce or eliminate dispossession
(including loss of livelihood, land, common resources, and
other assets), cultural alienation, and health risks. As best as
possible, both primary and secondary impacts should be
considered. Based on the findings reported above, the
following criteria were established to guide policy
recommendations:
Effectiveness: The ability to minimize social impacts.
Just Resettlement: The degree to which basic rights are
respected throughout the resettlement process. In
accordance with the International Covenant on Economic,
Social and Cultural Rights, just resettlement should be
evaluated regarding efforts to maintain (or improve)
quality of life including: right to livelihood (Article 11);
right to adequate food, clothing and housing (Article 11);
and right to participate in traditional culture (Article 15).
Additionally, just resettlement includes attempts to
protect the integrity of communities, and sensitivity to
the gendered aspects of relocation.
Equity: The distribution of benefits and costs to the
project-affected peoples, emphasizing a Rawlsian sense
of justice as fairness rather than equal access. Special
consideration should be given to women, economically
marginalized communities and indigenous and other
ethnic groups who have been historically disadvantaged.
Accountability: The ability to ensure that
planning/implementing agencies follow through with the
specifications of the project, as well as the transparency
of the overall process.
Ease of Implementation: The likelihood that the policy
can be implemented in diverse contexts. This criterion is
expected to capture economic costs as well as other
administrative or political obstacles to implementation.
Because it is not possible to separately consider every
country where the WB has projects, this criterion
assumes the context of a political democracy.

POLICY ALTERNATIVES
Based on the literature reviewed and the 26 guidelines
suggested by the WCD, this paper proposes three approaches
to reducing the social impacts of large dams:

1. Induced Adherence to Projected Impacts
Approach: This policy is a two-pronged attempt to minimize
the social impacts of large dams. First, this policy mandates
that any hydropower project backed by the WB must include
a Social Impact Assessment evaluating both intended and
unintended consequences on project-affected people.
Second, mandatory monitoring of actual impacts must occur
on a yearly basis, with a reward/penalty for significant
deviations from projections.

Details: The initial social impact assessment must include
economic, cultural, and community implications of the
project, as well as a strategy for managing and monitoring
these impacts. Findings must be based, in part, on
consultations with the affected communities. Also, every
effort must be made to understand customary laws and
traditional management of the watershed in order to
accurately assess cultural impacts. This assessment must
consider directly affected oustees who will lose their lands and
livelihoods as a result of infrastructure or flooding as well as
downstream impacts, such as loss of fisheries, agricultural
land, drying up of wells, decline in nutrition, public health
concerns, etc. During this stage, baseline information to make
future comparisons must also be collected. The mandatory
monitoring should consist of periodic (once a year) re-
examination of impacts, also in collaboration with affected
communities. Should results be significantly higher than
projections, strategies to remedy the situation must be
immediately put into place and compensations made by the
government or private developer.

2. Social & Economic Insurance Strategy
Approach: This option ensures that the living standards of all
project-affected persons are not made worse off in any
tangible terms as the result of large dam construction. The
policy requires that dam projects backed by the WB include a
comprehensive resettlement plan to secure the genuine
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rehabilitation of all displaced people. Additionally,
compensation must be given to downstream populations
whose means of livelihood is adversely affected (for example
by the disruption to local fisheries, etc).

Details: Just resettlement is highly context-specific and this
policy requires flexibility to maintain (or improve) living
standards throughout resettlement. However, all cases should
begin with a needs-assessment of project-affected people,
and certain standards must be adhered to. Whenever
possible, land should be replaced by land, territory for
territory, and commons for commons. In accordance with the
International Labor Organization Convention No. 107, fair
compensation for property (either equivalent size/productivity
value or operative market rate at the time of purchase) must
be given even in the absence of a legal title. No distinction
should be made between landed and landless ousters, and
women should receive compensation equal to men. New land
must be allotted a minimum of one year prior to relocation to
allow the displaced to adjust to cultivating the land and help
the process proceed more humanely. Additionally, joint-title
must be awarded for married couples. Culturally appropriate
new housing should be provided that restores standards of
former dwellings, and if project-affected persons express a
preference for constructing their own housing (as is the case
among some tribal communities) they must be granted the
freedom to do so. Finally, every effort must be made to
relocate communities together in order to maintain the
integrity of social networks and kinship ties.

As best as possible, calculations should be made for the loss
of livelihood and opportunities for both oustees and down-
stream communities. Reflecting this policys inherent
flexibility, compensation could be provided in creative ways,
for example by allowing affected persons to have the first
right to obtain employment in the project, or enforcing
preferential rates for electricity. Restitution could also be
made with cash, however only if cash transactions are
culturally practiced.

3. Cooperative Approach
Approach: This policy encourages wide-ranging local
participation of affected groups, spanning the life cycle of the
project (design, construction and monitoring). In accordance
with ILO Convention 169, this option also requires that the
free, informed consent of indigenous peoples is obtained
prior to resettlement.

Details: The requirement for this policy option is that a forum
exists to collaborate with affected people in every phase of
dam projects and that these individuals are aware of what is
planned and their right to participate. Every phase could
feasibly include conducting impact assessments, choosing
relocation sites, building replacement housing, establishing
just compensation, and monitoring outcomes. For this
participation to be authentic and effective, it must take place
within a timeframe that allows meaningful influence over
project decisions. Because the communities at greatest risk
must be heard, understood, and ultimately persuaded of the
projects benefits even to them, the goal is that developers
will have a built-in incentive to incorporate remedies and
mitigation measures into the project design.

RECOMMENDATIONS
The goal of this analysis is to uncover the most appropriate
policy for the WB to impose on its borrowers in order to
effectively minimize the social costs of large dam projects.
Although it is ultimately impossible to completely eliminate
the inequities between those upstream who are displacedor
otherwise adversely affectedand those who directly benefit
at the end of the power line, this paper puts forth three
options that help mitigate disparities. Trade-offs between the
criteria are inescapable, and unsurprisingly the alternatives
have varying degrees of success relative to effectiveness, just
resettlement, equity, accountability, and ease of
implementation.

The incentive scheme in Policy Option 1 is expected to
provide a high measure of accountability and be implemented
with relative ease (social impact assessments are an
established methodology and a substantial literature exists on
the subject). However, while dispossession and health risks
are relatively straightforward to quantify, the range of
impacts associated with cultural alienation are often
intergenerational, overlapping, and inherently challenging to
measure. Subsequently, the options overall effectiveness in
reducing social impacts is difficult to predict.

The Social and Economic Insurance Strategy outlines
culturally appropriate requirements for resettlement, including
compensation for opportunity costs. Accordingly, the policy is
likely to perform well with regard to effectiveness, just
resettlement, and equity issues. It is important to note,
however, that many tribal populations believe their land has
an incommensurate value. For example, the Ibaloy, a Filipino
ethnic minority group scheduled to be relocated by the San
Roque dam reservoir, explain that, It is not easy to destroy
our sacred burial grounds . . . We believe that[our ancestors]
are with us in their spirit as we are with them in our
traditional and cultural values. That is why no amount of
money will constitute a just price for their sacred graves.
53

This difficulty in assessing fair compensation for cultural sites
may complicate the implementation of Policy Option 2.
Moreover, if recent large scale dam projects can be used as
an indicator, governments are unlikely to incur substantial
resettlements costs (that may be prohibitive in the case of
massive displacement), especially on behalf of their most
politically and economically disenfranchised citizens.

Finally, to the extent that affected communities are truly
heard and their perspectives fairly incorporated into project
decisions, Policy Option 3 ranks highest in terms of overall
effectiveness. The policy is expected to perform well under
the just resettlement and equity criterion, however two
caveats should be noted. First, it is possible that communities
may not be aware of the economic value of their assets or the
potential health risks associated with dam construction. This
information asymmetry may undermine just resettlement and
compensation despite the requirement of obtaining free,
informed consent on behalf of the oustees. Second, political
and social realities present in much of the developing world
make it pertinent to consider the risk of coercion. The WCD
reported a high number of complaints regarding government
manipulation of the consultation process to try to engineer
the result that they sought.
54
For example the Himba
pastoralists, opposing the loss of their grazing lands due to
the Epupa Dam in Namibia, were met with heavily armed
policemen during an attempt to consult with lawyers.
55
Large
scale dam projects are often conceived as projects to fuel
economic development and modernization. This nationalistic
discourse threatens to make the needs of the most
marginalized communities even less audible. In light of this
evidence, this analysis recommends caution in trading off any
measure of accountability for greater effectiveness.

The WB has received increasing criticism throughout the past
decades for its pervasive preoccupation with new lending
56

that takes precedence over other considerations, in particular
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Spring 2007 | Volume 7 - 16 -
compliance with stated policies and international covenants.
Patrick Coady, a former Executive Director of the WB
legitimized this line of criticism in his public comment that no
matter how egregious the situation, no matter how flawed the
project, no matter how many policies have been violated, and
no matter how clear the remedies prescribed, the Bank will go
forward on its own terms.
57
Subsequently, whatever policy
is embraced, it must be enforceable and implementable in
order for the WB to be taken seriously in its mission to
alleviate global poverty. This analysis recommends that the
WB adopt the policy with the greatest ease of implementation
and strongest measure of accountability: Policy Option 1, the
Induced Reduction of Projected Impacts Policy. However, in
select cases where democratic nations have demonstrated
good governance and respect for the rights of their minorities,
the Collaborative Approach should be pursued. Finally, it is
also recommended that the WB seek out and adopt
complementary policies that aim to reduce environmental
impacts.

CONCLUDING REMARKS
This report has made clear that because of the severity of
social impacts suffered by impacted populations, a traditional
cost-benefit analysis is not an adequate justification for the
decision to build a large dam. For example, the potential
beneficiaries from electric power produced by the Saradar
Sarovar dam is estimated at several million compared to the
dispossession of between 100,000 and 400,000 individuals.
58

However, in the most extreme cases dispossession results in
the extinction of traditional cultures, and by the WBs own
calculations the cumulative effect of involuntary resettlement
is often that the social fabric and economy are torn apart.
59

Clearly the seriousness of sustained losses overrides the
balance of numbers in such cases. Fundamental human rights
cannot continue to be sacrificed in the name of national
economic interests, and as a principal lender of large-dam
projects, the WB must take a stand.

While evaluating options that redefine when and where
building large dams is appropriate falls beyond the scope of
this paper, the analysis presented goes far towards
developing policies that minimize the range of social impacts
once the decision to build has been finalized. The hope is that
in the near future the developing world will consist of just,
sustainable democracies, providing the right context for the
Collaborative Approach to be successful. However, until that
condition is met, by adopting the Induced Reduction of
Projected Impacts Policy, the WB has the opportunity to
safeguard the rights of vulnerable communities and
demonstrate its commitment to fighting poverty worldwide.



ENDNOTES

1
World Commission on Dams. Dams and Development: A New Framework for Decision Making. (London: Earthscan Publishers,
2000).
2
Patrick McCully, Silenced Rivers: The Ecology and Politics of Large Dams. (London: Zed Books, 1996).
3
Dams and Development: A New Framework for Decision Making.
4
International Association for Impact Assessment (IAIA), Social Impact Assessment International Principles. (IAIA Special
Publication, Series No 2, May 2003).
5
Dams and Development: A New Framework for Decision Making.
6
Gujja Biksham, Dams and DevelopmentA Call for Follow-up Action, (WWF Position Statement, February 2001), 1.
7
Denis Goulet, Global Governance, Dam Conflicts, and Participation. Human Rights Quarterly, Vol 27, (2005): 881-907.
8
Dams and Development: A New Framework for Decision Making, 28.
9
International Rivers Network, The World Banks Legacy: $75 billion has funded misery and destruction worldwide. [cited April
29, 2007] <http://www.irn.org/wcd/worldbank.shtml>
10
United Nations Development Program (UNDP), Energy and Environment. [cited December 11, 2006]
<http://www.undp.org/energyandenvironment/>
11
UN Millennium Development Goals. [cited December 11, 2006] <http://un.org/millenniumgoals/>
12
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13
United Nations Symposium on Hydropower and Sustainable Development, Bejing, China, 2004. [cited December 11, 2006]
<http://unhsd.icold-cigb.org.cn/memoire.html>
14
Speeches and Remarks, Robert Blake, USAID South Asia Regional Initiative for Energy Developing Energy Markets Seminar,
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15
Hydropower, An Essential Part of the Solution to Climate Change, 2005. [cited December 11, 2006]
<http://www.ich.no/Why%20Hydro/Adv_6.htm>
16
United Nations Symposium on Hydropower and Sustainable Development.
17
Hydropower, An Essential Part of the Solution to Climate Change, 2005. [cited December 11, 2006]
<http://www.ich.no/Why%20Hydro/Adv_6.htm>
18
Dams and Development: A New Framework for Decision Making.
19
International Rivers Network, Dammed Rivers, Damned Lies, 2003. [cited December 11, 2006]
<http://www.irn.org/basics/ard/index.php?id=wwf3.html>
20
Dams and Development: A New Framework for Decision Making, 31.
21
Dams and Development: A New Framework for Decision Making.
22
Ibid.
23
Ibid.
24
Ibid.
25
M Colchester. Forest Peoples Program: Dams, Indigenous Peoples and Ethnic Minorities (Thematic Review 1.2 prepared as an
input to the World Commission on Dams, Cape Town, 2000), 21.
26
Nguyen Thi Dieu. The State versus Indigenous Peoples: The Impact of Hydraulic Projects on Indigenous Peoples of Asia.
Journal of World History, Vol 7, No 1, (1996): 101-127.
The Journal of International Policy Solutions

- 17 - Spring 2007 | Volume 7

27
The United Nations, IRIN News.org. Running Dry: the Humanitarian Impact of the Global Water Crisis. [cited Dec 11, 2006]
<http://www.irinnews.org/webspecials/runningdry/55530.asp>
28
Smitu Kothari. Whose Nation? The Displaced as Victims of Development. Economic and Political Weekly, (June 15, 1996):
1476-1485.
29
Colchester, 25.
30
Ibid.
31
W Adams. The Social Impact of Large Dams: Equity and Distribution Issues (Thematic Review I.1 prepared as an input to the
World Commission on Dams, Cape Town, 2000).
32
EK NGoran et al. Changes in human schistosomiasis levels after the construction of two large hydroelectric dams in central
Cote d'Ivoire. Bulletin of the World Health Organization, Vol 75, Iss 6; (1997): 541-546.
33
Mde S. Malaria Wijesundera. Outbreaks in New Foci in Sri Lanka. Parasitol Today. Vol 4, No 5, (May 1988): 147-150.
34
Lars D Hylander et. al. Fish mercury increase in Lago Manso, a new hydroelectric reservoir in tropical Brazil. Journal of
Environmental Management. Vol 81, Iss 2 , (Oct 2006): 155-166.
35
Adams, 7.
36
Colchester.
37
Ibid, 8.
38
International Rivers Network, Dammed Rivers, Damned Lies, 2003.
39
Recent Experience With Involuntary Resettlement. Overview. Document of the World Bank. (Report No. 17538, 1998), 11.
40
The United Nations, IRIN News.org. Running Dry: the Humanitarian Impact of the Global Water Crisis. [cited Dec 11, 2006]
<http://www.irinnews.org/InDepthMain.aspx?InDepthId=13&ReportId=61050 >
41
Ibid.
42
The World Bank and the Environment: Frequently Asked Questions. [cited December 11, 2006]
<http://web.worldbank.org/WBSITE/EXTERNAL/EXTSITETOOLS/0,,contentMDK:20147675~menuPK:344193~pagePK:98400~pi
PK:98424~theSitePK:95474,00.html#5>
43
Leopoldo Jose Bartolome et al. Displacement, Resettlement, Rehabilitation, Reparation, and Development (Thematic Review
Social Issues I.3 prepared as an input to the World Commission on Dams, November, 2000), 16.
44
Dana Clark. The World Bank and Human Rights: The Need for Greater Accountability. Harvard Human Rights Journal, Vol 15,
(Spring 2002): 205-226.
45
News & Broadcast, World Commission on Dams Launches 'Landmark' Final Report
A new direction for future water and energy policy decision-making [cited April 29, 2007]
<http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20019197~menuPK:34459~pagePK:34370~piPK:34424~
theSitePK:4607,00.html>
46
The World Bank: The World Bank Position on the Report of the World Commission on Dams, December 2001 [cited April 29,
2007] < http://siteresources.worldbank.org/INTWRD/903857-
1112344791813/20424179/TheWBPositionontheReportoftheWCD.pdf>
47
Ibid.
48
World Bank Submission, Revised Draft Operational Policy/Bank Procedures Indigenous Peoples: Issues and Proposals, April
2005. [cited December 11, 2006]
<http://siteresources.worldbank.org/INTINDPEOPLE/Publications/20571164/Issue%20Notes.pdf>
49
Dams and Development: A New Framework for Decision Making.
50
The World Bank: The World Bank Position on the Report of the World Commission on Dams, December 2001 [cited April 29,
2007] < http://siteresources.worldbank.org/INTWRD/903857-
1112344791813/20424179/TheWBPositionontheReportoftheWCD.pdf>
51
Clark.
52
The World Bank: News Release No. 2002/013/S, Rule of Law Central to Fighting Poverty, (July 9, 2001).
53
Colchester, 44.
54
Ibid, 48.
55
Ibid.
56
Ibid, 48.
57
Ibid.
58
Goulet.
59
World Bank 1994, cited in Colchester, 24.