I was in India a couple of weeks ago when the parliament had just passed the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill 2013. The Bill replaces the Land Acquisition Act 1894 which had been enacted during British rule and which has remained relatively unchanged despite some amendments over the last 120 years. There was much discussion about the relative merits of the Bill in the Indian press and among stakeholders, but what’s clear is that the rules of the game for involuntary resettlement, including definition of public purpose, compensation rates, rehabilitation, and overall due process have been enhanced. In cases where private companies acquire the land, the consent of 80% of those living there will be required. In cases where land is purchased for public-private partnerships, consent of 70% of residents will be required.
What’s happened in India is also happening elsewhere as governments grapple with the need to ensure that infrastructure development is socially inclusive and environmentally sustainable. ADB and other MDBs, have basically pioneered and defined international best practice in this area, and MDB projects have served an important demonstration and learning role. And as a result of collective efforts, MDB have been able to harmonize their own safeguard policy standards. Countries in the region ranging from the People’s Republic China to Lao PDR are now converging towards these common standards and this is happening at a faster rate than before. All countries have made at least some progress in environmental impact assessment, compensating people for land acquisition under eminent domain, and protecting vulnerable groups. Often with the help of ADB, almost all countries, and most recently Myanmar, are evolving their legal frameworks, policies and institutions to manage environmental and social risks of development. This intricate web of laws, regulations, institutions, and capacity, is what we have been calling “country safeguard systems”.
The strengthening of country safeguard systems is a central objective of ADB’s Safeguard Policy Statement. There are several reasons for this strong emphasis. First, and most importantly, enhancing country safeguards systems should be a development objective in its own right. A broader focus on safeguards at country and sector level can extend our development impact far beyond a ring-fenced project approach. This clearly makes sense given that the vast majority of infrastructure and other development to be financed in the future will not be subject to MDB safeguards.
Second, there is a clear recognition that divergence or discrepancies between national and MDB safeguard procedures are a major source of problems when it comes to project implementation. At the very least, better capacity and better alignment between the two processes is clearly needed. Many argue that the continued co-existence of two or more parallel and duplicative systems, is simply not efficient and is likely to be counterproductive in the longer term.
And third, where there is equivalence between borrower systems and ADB requirements, and where the requisite capacity exists, we could and should increasingly apply such systems to deliver on our own safeguard policy requirements. This would greatly reduce transactions costs and enhance country ownership, while also serving to provide opportunities to further uphold and reinforce the country system.
The journey towards strengthened country safeguard systems began some time back and will continue well into the future. It will require a lot of stamina, but it is a journey that needs to happen.