The Whirled Bank Group

The World Bank has been a major force in the destruction of the world's forests by financing logging projects, transmigration projects and dam projects. Criticism of its disastrous schemes in the Amazon, South East Asia and West Africa forced the Bank to adopt a new policy in 1991 that would prohibit lending for logging in primary forests in the hope of a curbing deforestation. Despite this, a January 2000 internal World Bank study showed that forest lending has not curbed deforestation or reduced poverty, despite a 78% increase in forest-related lending over the past 10 years. A new proposed policy released in 2002 has been criticized for opening the door to more deforestation.


In 1981 the Bank lent Brazil US$445 million for the Northwest Brazil Integrated Development Programme (POLONORESTE) to pave 1,500 kilometers of dirt tracks in the remote region of Rondonia which borders Bolivia. The newly modernized road allowed nearly half a million migrants to invade the forests and clear them for cultivation. By 1991 the destruction of Rondonia's forests had multiplied to ten times its original rate. The burning of the forest became a major focus of research as the single largest, most rapid human caused change on earth visible from space. 

Diseases spread rapidly. Malaria infection rates soared to 100% in some killed indigenous communities with over 250,000 people infected. Infant mortality rates reached 50% in some communities. In 1987 Barber Conable, the president of the Bank, said that POLONORESTE was a "sobering example of an environmentally sound project gone wrong."

In 1992 the Bank launched a new project, known as PLANAFLORO, to rectify these problems. Yet by 1996 deforestation a World bank inspection panel team found that deforestation had actually increased to "high historical levels" of nearly 450,000 hectares per year and as much as 90% of the forest loss is believed to be at the hands of illegal loggers





The International Finance Corporation (IFC), the World Bank's private sector arm, loaned millions of dollars to Congolaise Industrielle des Bois (CIB), a German company controlled by Bremen-based company Hinrich Feldmeyer, in the1980s for logging on a 480,000 hectare concession in Pokola, northern Congo. Pokola is just outside the Ndoki national park, a region the size of Belgium which is believed to be the only forest in the world that has never been inhabited by human beings.

CIB and other companies secretly invaded the unique forest to cut ebony, sipo and sapelli -- three highly valued timber species. The IFC quietly pulled out of the project in the mid-1990s after a former CIB employee told a local reporter: ''I was fired because I knew too much about the company.

The truth is CIB is devastating the forest in Ndoki. They cut down everything there is. Even ebony is felled. They use chemicals to camouflage the trees and trick the water and forestry officers,'' he claimed. The wood is trucked across the border to Cameroon from where it was exported to other countries. Similar World Bank projects afflicted other West African forests in countries like Guinea and Ivory Coast.


In the 1980s, the World Bank provided a US $500 million loan to move more than 3.6 million people from the densely populated island of Java to the outer islands of Sumatra and New Guinea. Half of the area settled was virgin forest, and most of that was land occupied by indigenous peoples. For every official migrant another two unofficial ones followed, according to the World Bank's own subsequent assessments.

This "transmigration" program increased poverty for both host communities and migrants, and worsened ecological destruction, An estimated 4% of the country's forests-3.7 million hectares-were felled to make way for transmigrants and their farming attempts. Unfortunately the forest soils of the outer islands are nutrient-poor, and the monsoon climate renders them highly vulnerable to erosion and depletion from runoff so transmigrants were beset by paltry crop yields, flooding, and plagues of insects, rats, and wild boars. In wetland and swamp areas, 40 to 50% of the settlers simply abandoned the sites.

Moreover, the transmigration scheme has done little to alleviate population pressures in Java, and has managed to simply redistribute poverty.


For more commentary on the World Bank’s forest policy, see the World Rainforest Movement's special bulletin on the World Bank



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