The World Bank was aware of serious flaws in its $24.3-million land-titling project as early as October 2004, almost five years before it threatened to suspend funding because the project was excluding poor urban communities, according to a report released last week.
Troubles with the Land Management and Administration Project in Cambodia had become so severe that the Bank considered it a “problem” program by the time it was canceled by the government in September of this year, apparently in retaliation for the Bank’s threat to suspend funds over the urban poor issue.
In September, Boeng Kak lake community members filed a complaint to the Bank’s Inspection Panel in Washington, requesting an investigation into the LMAP program and alleging that the project “detrimentally affected” villagers by unfairly excluding them from the titling process.
According to the Bank’s response to the complaint, which was publicly released last week, the Bank had been aware of various problems with the administration of LMAP since 2004. Initially, the most serious issues with the project were in its land management component, which aimed to clarify the procedure for classifying different types of land ahead of issuing titles.
The Bank had underestimated the complexity and “politically fraught nature” of land management in Cambodia when it designed the project, causing development of the land classification procedure to move much more slowly than expected.
“Several opportunities were missed to restructure the Project. The need for Project restructuring…was identified at the [mid-term review] in October 2004 but never formalized,” the management report states.
The report said that at the time, the Bank was distracted from the need to restructure because it was, “absorbed by the Fiduciary Review and its revelations of corruption,” referring to a Bank review in July 2004 that found evidence of corruption and fraud in seven Bank-funded programs in Cambodia, including LMAP.
Further evidence of corruption at LMAP emerged later—specifically, that bribes were being demanded in return for granting titles to the public.
“In June 2005…good governance emerged as an important issue, with the Ministry [of Land Management] acknowledging that informal payments were being demanded and paid in the urban high-value areas such as Phnom Penh, Siem Reap and Sihanoukville, and in rural areas,” the Bank states.
The Bank’s funding for LMAP was temporarily suspended for about six months beginning in June 2006, and was only lifted after the Land Management Ministry agreed to implement measures to prevent the titles-for-kickbacks scheme.
Further problems with the LMAP program continued to pop up, but rather than addressing them directly, the Bank chose to focus its attention on the project’s more successful components, including reaching the goal of issuing 1 million land titles set out at the project’s launch in 2002.
“As the difficulty in achieving some of the far-reaching objectives of the project (such as the establishment of a fair and effective conflict resolution mechanism)…became evident, the focus of the project shifted and concentrated on the areas of maximum government ownership (particularly the achievement of the one million titles milestone),” the report states.
Overlooking the project’s shortcomings meant that they were allowed to snowball, culminating in looming evictions in Boeng Kak for some 4,000 families who were unable to get land titles.
In June 2008, Bank representatives paid a visit to Boeng Kak lake, where they were told that residents had not received land titles because the heavily residential area had been classified as State Public Land. According to the 2001 Land Law, people living on State Public Land do not have any possession rights.
According to the Bank’s report, “There is no evidence that a transparent, participatory and reviewable process was used to determine the classification of the land as State Public Land.”
However, by the time Bank representatives visited Boeng Kak and learned of its classification as State Public Land, the government had given the Boeng Kak area to a private property developer, Shukaku Inc, which is owned by CPP Senator Lao Meng Khin.
“Although some of the mission members had read press reports from January 2007 (18 months before) on a 99-year lease for that land to Shukaku, a private developer, no one, either from the Bank or the development partners, made the link between possible involuntary resettlements and the Project at that time,” the Bank report states.
After learning of the evictions of the Dey Krahorm and Group 78 communities earlier this year, the Bank belatedly commissioned a review of the land titling project, examining whether the LMAP project’s seven-year-old social and environmental safeguards—guaranteeing adequate compensation and suitable relocation sites for evicted communities—were being followed.
“Prior to 2009, however, the crucial issue of evictions from State land in titling areas was not examined in depth and the Task Team did not focus on the potential connection between specific land disputes/evictions and the titling activities under the Project,” the Bank management report states.
Only in August, a mission from the Bank reviewed the government’s adherence to the Bank’s guidelines for evictions and relocations in areas covered by the LMAP project.
“That mission’s report resulted in the decision by Management to inform the Government of its intention to suspend disbursements of the credit for non-compliance with the [resettlement policy framework], an action which was followed by the Government’s cancellation of the credit,” the report states.
After the World Bank’s involvement in the LMAP project was canceled on Sept 4 by the government, Prime Minister Hun Sen made a speech saying that the Bank had been too “bossy” and required “complicated conditions” for disbursing land titles. At the time, $19.8 million had already been disbursed for LMAP, and the Bank canceled the remaining funds of $4.5 million on Oct 9.
The Bank has since sent a letter to the government that acknowledged the cancellation of the funding, “but also reminded the Government of its legal obligations under the credit agreement,” which obliges the government to comply with the original social and environmental safeguards for areas covered in the titling project.
In a decision released last week, the Bank’s Inspection Panel determined that the complaint from Boeng Kak community members is eligible for investigation, but recommended that any investigation be delayed until March 31, in order to give the government time to respond to the Bank’s letter.
Despite the problems revealed in the report, World Bank spokesman Bou Saroeun defended the Bank’s administration of LMAP yesterday.
“World Bank took immediate actions when the concerns about the effectiveness of the project [arose] in regard to poor urban communities and about possible harm to project-affected people,” he wrote by e-mail. “The World Bank responded promptly by commissioning a review of the project, in particular as it related to resettlement, and started to engage with the Government in a dialogue on this topic.”
Mr Saroeun added that the “lessons learned” through the LMAP experiment would be applied to future Bank projects.
Nonn Theany, spokeswoman for the Land Management Ministry, said yesterday that she was unaware of any letter sent by the World Bank to the government after the LMAP program was canceled.
She added that the government made the decision to cancel the LMAP project after the Bank suggested a temporary suspension of funds.
“There was a request for suspension in order to review some problems, but the government said there was no need to suspend because it was already suspended once. The government didn’t want any more problems, and so they just canceled the whole thing,” she said.
LMAP Director Sar Sovann said he was too busy to comment when reached by telephone yesterday.
(Additional reporting by Prak Chan Thul)
