ASIA PACIFIC

PEOPLES’
TRIBUNAL
on
ADB
Maria Theresa Lauron
Editor

Manila

Asia Pacific Peoples’ Tribunal on ADB i

ISBN 978-971-0483-52-5

Copyright
© ASIA-PACIFIC RESEARCH NETWORK 2010
All rights reserved.

Asia-Pacific Research Network (APRN) holds the

rights to this publication. The publication may be
cited in parts as long as APRN is properly
acknowledged as the source and APRN is
furnishd copies of the fnal work where the
quotation or citation appears.

Comments and inquiries may be forwarded to:

Secretariat

3/F IBON Center

114 Timog Avenue
Quezon City, Philippines 1103
Tel: +632.927.7060 - 62
Fax: +632.927.6981
Email: secretariat@aprnet.org
Website: www.aprnet.org

Cover Photo: Koustav2007

Cover Design: Corona Dolot
Layout: Reileen Joy Dulay
Published by IBON Books

Published with the assistance of:

Primate’s World Relief and Development Fund (PWRDF)

Canadian Catholic Organisation for Development and Peace (CCODP)

Unitarian Universalist Service Committee (UUSC)

ii Asia Pacific Peoples’ Tribunal on ADB

 Table of Contents
Preface v
Programme 1

Testimonies 7

Debt

The ADB, Debt and Development 8

in the Asia-Pacific Region
(Sonny Africa, IBON Foundation, Inc., Philippines)

Debt and ADB Hegemony: Impact on Indonesia 14

(Dian Kartika, International NGO Forum on Indonesian
Development, Indonesia)

Water

Melamchi Water Supply Project 20

(Anuj Sitoula, Water and Energy Users’ Federation
of Nepal, Nepal)

On Dhaka Water Supply and Sewerage Authority 26

(DWASA) Project in Bangladesh
(Ahmed Swapan, Voices for Interactive Choice and
Empowerment, Bangladesh)

Agriculture

Debt, Food Crisis, and Extreme Poverty in Rural 31

Communities (Erpan Faryadi, Aliansi Gerakan Reforma
Agraria, Indonesia)

Asia Pacific Peoples’ Tribunal on ADB iii

 Table of Contents
ADB Loan for the Crops Brings Misery to the Farmers 46
(Hari Pratano, Tree Crop Smallholder Sector Project,
Indonesia)

Women

Lembar Fakta: Impact of ADB to women migrants 51

in Indonesia (Retno Diwi, Association of Indonesian
Migrant Workers in Jakarta, Indonesia)

Indigenous People

The Cordillera Highland Agricultural Resource 56

Management Project (CHARM) and the Indigenous
Peoples’ Policy of the Asian Development Bank (ADB)
(Jeanette Cawiding, Cordillera People’s Alliance,
Philippines)

Environment
Environmental Impact of ADB Projects in the Asia 60
Pacific Region (Suranjan Kodithuwakku,
Green Movement of Sri Lanka, Sri Lanka)

Scrap ADB’s strategy 2020 65

(Hemantha Withanage, Centre for Environmental
Justice/Friends of the Earth, Sri Lanka)

Verdict 71

Judgment 76

Annex: 79
Photos

iv Asia Pacific Peoples’ Tribunal on ADB

Preface
Since the inception of the ADB in 1966, there had been a continuing
list of negative impacts it has brought to the lives of the people in the
region despite its stated mission of facilitating development and improv-
ing lives of the people in the Asia Pacific Region.

Over the years, civil society organisations and peoples’ organisations

had produced systematic and scientific researches on the outcomes of the
ADB-funded projects across the region. Some of these studies have been
brought to the attention of the ADB but there has never been proper
redress of the substantive issues raised. Furthermore, there had been
a lack of an effective platform and mechanisms from within and from
outside the ADB to present the issues and concerns of the most affected
sectors of society with regard to the negative effects of anti-people poli-
cies and projects which ADB has been implementing.

Taking into account the need to create a space to examine the roles
and impact of the ADB on the issue of development, the Asia Pacific
Research Network (APRN) and its members from Indonesia, took the lead
to organise the Asia Peoples’ Tribunal on ADB to gather studies,
researches and testimonies from affected communities on the negative
impacts of ADB projects and submit these as evidences before a tribunal
of law experts, development practitioners and parliamentarians.

The APRN convened the Asia Pacific Peoples’ Tribunal in Bali,

Indonesia on May 2-3, 2009 as an alternative people’s event to the ADB’s
42nd Annual Governors’ Meeting. The objectives of the Peoples’ Tribunal
were the following: 1) To raise the voice of the people whose lives have
been impacted by ADB projects; 2) To question the legitimacy of the ADB
as a development agency; and 3) To promote a genuine and pro-people
development framework as the solution to the global and regional
economic and financial crisis.

The issues that were highlighted at the Peoples’ Tribunal cut across
debt, water, agriculture, women, indigenous people, and the
environment.

Asia Pacific Peoples’ Tribunal on ADB v

 Preface
Peoples’ organisations stood as witnesses and imparted testimonies
that substantiate arguments to the three charges brought upon the ADB:
1) the grants/loans given out by ADB contributed to the massive socio-
economic displacement of the people in the Asia Pacific region; 2) the
ADB supports dictatorial regimes thus it is equally liable in violating
political and civil rights of the people; and 3) the ADB imposes policy
conditionalities to the beneficiary countries in the Asia Pacific Region
which clearly violate the peoples’ sovereignty and their right to
self-determination.

The peoples’ verdict

After three days of hearing and deliberation, the ADB was pronounced
GUILTY for all the three charges along with the Governments of the
United States of America, Japan, Republic of the Philippines, Indonesia,
India, Bangladesh, Sri Lanka, and Pakistan for being jointly liable to the
vicious impacts brought by the ADB projects to the lives of the people.

First, the loans/grants given out by the ADB were not geared toward
the alleviation of poverty but were tied up with conditionalities that
promote liberalisation, deregulation and privatisation. Liberalisation had
been proven to be detrimental to domestic agriculture and industry while
privatisation and deregulation have rendered public utilities inaccessible
to the people and hindering public access to social and economic servic-
es, education, health services and food security.

The ADB projects were implemented without considering environmen-

tal and ecological safety, culture, indigenous knowledge and traditions of
the communities which were supposed to benefit from the projects of
ADB. The illegitimate debts incurred by the governments in the Asia
Pacific Region are passed on to the people through taxes and higher
prices.

Second, it was established that the ADB supported dictatorial and

authoritarian regimes responsible for widespread violation of civil and
political rights of the citizens. In areas where there are opposition to ADB

vi Asia Pacific Peoples’ Tribunal on ADB

Preface
funded projects, project proponents used threat, intimidation,
harassments and even killings to stifle the voices of the opposition.

Third, the people have accused the respondent of violating people’s

sovereignty and the right to self-determination. The evidence
submitted to the Asia Pacific Peoples’ Tribunal on ADB proved that
through the ADB’s Development Policy Support Program (DPSP), debtor
countries were compelled to adopt the policies imposed by ADB as
conditions for release of loans. It was also shown that ADB imposed its
will on the communities and indigenous peoples despite opposition and
without due regard to their culture and traditions.

The ADB and the respondent governments are GUILTY of gross,

widespread and systematic violation of the economic, social, and cultural
rights of the people in the Asia Pacific Region, which infringe the right of
the people under The Universal Declaration of the Rights of the Peoples
or the Algiers Declaration of July 1976; The Universal Declaration of
Human Rights of December 10, 1948; and The International Covenant on
Economic, Social and Cultural Rights.

Breaking to a higher ground on the campaign of the people on the ADB

The Asia Pacific Peoples’ Tribunal on ADB is an initiative which will

evolve to a higher level of campaign and advocacy bringing in the
broadest number of people and institutions altogether to systematically
hold the ADB and governments in all the catastrophic effects they brought
to the Asia Pacific Region.

The publication of the proceedings of the Asia Pacific Peoples’ Tribunal

on ADB is aimed to further accelerate the peoples’ campaign against ADB
and the respondent governments which have been given a guilty verdict
of the Peoples’ Tribunal.

The APRN would like to thank its members, the Institute for National
and Democratic Studies (INDIES) and the International NGO Forum for
Indonesian Development (INFID), for their initiative in organizing the Asia

Asia Pacific Peoples’ Tribunal on ADB vii

 Preface
Pacific Peoples’ Tribunal. Many thanks also to the International
Association of Peoples’ Lawyers (IAPL) for co-organizing the event. Like-
wise, APRN is also very grateful to the local co-hosts, the organizations
that prepared studies and testimonies, witnesses, jurors, the media, and
to all those who attended the 3-day trial and the succeeding people’s
action.

Thank you very much also to APRN’s partners for their support for this
project – the Primate’s World Relief and Development Fund (PWRDF),
Canadian Catholic Organisation for Development and Peace (CCODP),
Unitarian Universalist Service Committee (UUSC).

This book is intended to be distributed to reach the widest audience

from different civil society and peoples’ organisations not only in the Asia
Pacific Region but in the different parts of the globe. Furthermore, this
publication will be circulated among the media, government offices and
international institutions to strengthen our undertakings in obtaining
justice and genuine development.

The Board of Convenors

Asia Pacific Research Network
February 2010

viii Asia Pacific Peoples’ Tribunal on ADB

Asia Pacific Peoples’ Tribunal on ADB ix
x Asia Pacific Peoples’ Tribunal on ADB
Programme
Asia Pacific Peoples’ Tribunal on ADB
2-3 May 2009
Udayana University Faculty of Medicine Auditorium,
Denpasar-Bali, Indonesia

Organized by: Asia Pacific Research Network

International Association of Peoples’ Lawyers
Co-organized with: INFID and INDIES

DAY 1
8:00-9:00 Registration
9:00-9:15 Cultural Presentation
9:15-9: 25 Welcome Remarks Don Marut
Executive Director,
International Forum on
Indonesian Deelopment
(INFID)
9:25-9:45 Introduction of Presiding Judge
and College of Jurors
9:45-10:00 Calling of Case and Reading of Charges Ramon Bultron
Clerk of Tribunal
10:00-10:10 Appearances for the Prosecution
and Defense
Presentation of evidence and marking
of documents
10:10-10:25 Opening Statements for the Prosecution
10:25-10:40 Coffee break

DEBT
10:40-11:10 First witness - Testimony by Sonny Africa,
IBON Foundation, Inc.

Direct examination by
Atty. Jobert Pahilga and Atty. Rey Cortez
11:10- 11:40 Second witness -
Testimony by Dian Kartika,
International Forum on Indonesian
Development (INFID)

Direct examination by Atty. Jobert Pahilga

Asia Pacific Peoples’ Tribunal on ADB 1

 Programme
WATER
11:40- 12:20 Third witness- Testimony by Anuj Sitoula,
Water and Energy Users’ Federation
(WAFED), on the Kaligandaki Hydropower
and Melamchi Project in Nepal

Cross Examination by
Atty. Jobert Pahilga and Atty. Rey Cortez
12:20-1:30 Recess
1:30-1:40 Video Documentation:
Testimonies of victims of the Kaligandaki
and Melamchi Projects in Nepal
1:40-2:10 Fourth witness- Testimony by Ahmed
Swapan Mahmud, Voices for Interactive
Choice and Empowerment (VOICE),
on Khulna Jessore Drainage
Rehabilitation Project (KJDRP) and Dhaka
Water Supply and Sewerage Authority
(DWASA) Project in Bangladesh

Cross Examination by Atty. Antarini Rinno

2:10-2:55 Video Documentation:
Impact of the KJDRP, produced by the
Coastal Development Partnership (CDP)

AGRICULTURE
2:25- 2:55 Fifth witness-
Testimony by Erpan Faryadi,
Aliansi Gerakan Reforma Agraria (AGRA)’
Asian Peasant Coalition (APC)

Cross Examination by
Atty. Iwan Kurniawan and
Atty. Wisnu Broto
2:55-3: 25 Sixth witness- Testimony by
Mr. Ahmad Mamusa (village chief) of
Central Celebes
Indonesia on the Community
Empowerment Rural Development
Project

2 Asia Pacific Peoples’ Tribunal on ADB

 Programme
Cross Examination by
Atty. Iwan Kurniawan and
Atty. Wisnu Broto
3:25-3:55 Seventh witness- Testimony of Hari
Pratono (peasant) of Central Celebes
on the Tree Crop Small-holder Sector
Project (TCSSP)

Cross Examination by
Atty Iwan Kurniawan and
Atty Wisnu Broto
3:55-4:10 Snack Break
WOMEN
4:10-4:40 Eight witness-
Testimony of Retno Diwi
of Association of Migrant Workers in
Jakarta on the impact of ADB to women
migrants in Indonesia

Cross Examination by
Atty Antarini Arna

INDIGENOUS PEOPLES

4:40-5:10 Ninth witness- Testimony of Jeannette

Cawiding of Cordillera Peoples’
Alliance (CPA) on the CHARM Project
in the Cordillera, Philippines

Cross Examination by
Atty Jobert Pahilga and
Atty Rey Cortez
5:10-5:40 Tenth witness- Testimony by
Asar Torae of Central Celebes

Cross Examination by
Atty. Jobert Pahilga
and Atty. Rey Cortez
5:40-6:00 Presidium of Judges’ Initial Deliberation

Asia Pacific Peoples’ Tribunal on ADB 3

 Programme
DAY 2
8:00-9:00 Registration
9:00-9:10 Opening Remarks/
Recap of Day 1
9:10-9:20 Re-entry of Presidium of judges
and prosecutors

Call to Order
9:20-9:30 Appearance of the Panel of Prosecutors
Appearance for the Defense
Presentation of evidence and
marking of documents

ENVIRONMENT
9:30-10:00 Eleventh witness- Testimony by Suranjan
Kodithuwakku of Green Movement of Sri
Lanka (GMSL), on the impact of the
Upper Watershed Management Project
and the Southern Transport
Development Project to the environment
in Sri Lanka

Cross Examination
10:00-10:30 Twelfth Witness- Testimony
by Zuki Zuarma of FMN

Cross Examination by Atty. Antarini Arna

10:30-11:45 Coffee Break
11:45- 12: 15 Thirteenth Witness- Expert testimony by
Hemantha Withanage,
Centre for Environmental Justice,
on Strategy 2020 and ADB’s institutional
governance

Cross Examination by
Atty. Jobert Pahilga and Atty. Rey Cortez
12:15- 1:30 Recess
1:30- 1:10 Re-Entry of judges, jurors, prosecutors;
Call to Order

4 Asia Pacific Peoples’ Tribunal on ADB

 Programme
1:10-1:40 Submission of Documentary
and Real Evidence by the Prosecution

Summation
1:40-3:00 BREAK
3:00-3:30 Acknowledgment of Endorsers, Foreign
Participants and Organizers

Speak out
3:30-3:45 Promulgation of Sentence/
Reading of Verdict by Presiding Judge
3:45-4:00 Promulgation/Issuance Judgment/Call to
Action Termination of Trial Proceedings;
Processional
4:00-4:10 Closing Remarks
4:10 onwards Direct Action

Asia Pacific Peoples’ Tribunal on ADB 5

 Programme
Judge
Ms. Wardah Hafidz
Urban Poor Consortium Coordinator,
Recipient of the POSCO TJ Park Prize
and the Gwangju (Kwangju) Prize for Human Rights

Jurors
Mr. Antonio A. Tujan Jr.
IBON International Director

Ms. Zumrotin Susilo

International Organization for Migration
Former Human Rights Commissioner in Indonesia

Mr. Abdon Nababan

Director
AMAN

Congresswoman Liza Maza

Gabriela Women’s Partylist

Ms. Azra Sayeed

Roots for Equity, Pakistan

Prosecutors
Ms Antarini Arna
(Yayasan Pemantu Hak Anak)

Mr. Iwan Kurniawan

(Serikat Pengacara Hukum Progresif )

Mr. Jobert Pahilga

(International Association of Peoples’ Lawyers)

Mr. Rey Cortez

(National Union of Peoples’ Lawyers)

Mr. Wisnu Broto

(Serikat Pengacara Hukum Progresif )

Clerk of Tribunal
Mr. Ramon Bultron

6 Asia Pacific Peoples’ Tribunal on ADB

 Testimonies

Asia Pacific Peoples’ Tribunal on ADB 7

 Testimonies Debt
THE ADB, DEBT
AND UNDERDEVELOPMENT
IN THE ASIA-PACIFIC REGION
Presented by Sonny Africa
IBON Foundation, Inc., May 2009

The Asian Development Bank (ADB) was set up in 1966 and is the region’s main
international development finance institution and its third largest source of such funding
after Japan and the World Bank (WB). It has 67 member countries, 44 of whom it
categorizes as developing countries, including 19 members from outside the region in
North America and Europe.[1] The United States and Japan are by far the ADB’s most
powerful members and equally divide between themselves 31.2 percent of total sub-
scribed capital and 25.6 percent of total voting power. In turn, the 23 OECD member
countries in the ADB cumulatively account for 64.5 percent of total subscribed capital
and 58.5 percent of voting power. These dominant powers have ensured that the ADB
pushes their desired social, economic and financial policies including supporting the
investments and profits of their corporations.

The ADB declares its vision as an Asia and Pacific region free of poverty. Ostensibly
towards this end it has for the last four decades been providing loans, technical as-
sistance, grants, guarantees and equity investments for a wide range of projects and
programs. The ADB – on its own and in coordination with other international financial
institutions and aid agencies – has intervened significantly in the transport and commu-
nications, energy, water, agricultural and natural resources, finance and social services
sectors of underdeveloped countries across the region.

The reality however is that the ADB has greatly contributed to increasing and deep-
ening poverty as well as worsening the quality of life of hundreds of millions of people
in Asia and the Pacific. There are 3.5 billion people living in the region. It is home to an
estimated 550 million hungry and 1.7 billion poor people.[2] Yet these are likely even
serious underestimates as our individual country experiences will attest to. In any case,
two-thirds of the world’s poor and half its undernourished people are reportedly in Asia
and the Pacific. The region also accounts for 40 percent of children who die before age
5, 60 percent of those without safe water and 70 percent of those without access to
improved sanitation.

This persistence of poverty is tragic but unsurprising. The last decades in particu-
lar have seen economic and social policies systematically biased against the region’s
peasants, workers, indigenous peoples and other marginalized sectors and instead for
the benefit of foreign capital and domestic elites. The ADB has been among the most
consistent promoters of such anti-people policies as well as a major pillar of the region’s
debt and underdevelopment problem.

8 Asia Pacific Peoples’ Tribunal on ADB

Testimonies
Asia has in recent years been heralded
as some kind of new and rising center of
economic prosperity and even of political
power. The region has supposedly seen
rapid growth and great structural transfor-
mation in the last three to four decades.
Asia’s share of global gross domestic
product (GDP) has been increasing and
has even been forecast to reach over 40
percent by 2015.
http://www.flickr.com/photos/qilin/2962053952/(Licensed under CC BY 2.
Yet the rapid economic growth record-
ed merely reflects greatly increased com-
merce and other economic activity whose
benefits have accrued to a few. Indeed
the last decades have also seen widening
disparities within and between countries
in the region. These are not accidental and
are the necessary result of the distorted
economic model pushed by the ADB,
among others, through its loans.
Over four decades of ADB lending has
resulted in vast amounts of debt used for
projects hurtful to people and
communities as well as harmful to the
environment. Loans have been used to
leverage policy conditionalities which have
made public utilities prohibitively
expensive, undermined social services
Asia Pacific Peoples’ Tribunal on ADB
Debt
of health and education, and destroyed
local agriculture and industry. There has
even been debt which was effectively just
borrowing to repay past debt. The ADB has
also provided loans to support
repressive governments, aside from
uncounted amounts which have been lost
to corruption.
The ADB’s lending has in short not
gone towards development. The people
of the underdeveloped countries of Asia
and Pacific region remain deeply indebted,
endure intensifying poverty, and suffer
economic backwardness. As it is, the
underdeveloped ADB member countries
had a combined foreign debt of US$344.2
billion in 1988 (39 countries) which
increased five-fold to US$1,635.2 billion in
2006 (44 countries). ADB loans constitute
a significant part of this debt and billions
of dollars go to debt payments for these.
ADB Lending
From 1966 to 2008, the ADB has
loaned US$143.5 billion for 2,147 projects
– comprising US$138.4 billion worth of
sovereign loans for 2,018 projects and
US$5.1 billion worth of non-sovereign
loans for 130 projects.
9
 Testimonies
By sector these loans went to
transport and communications
(24.5 percent), energy (19.9 percent),
agriculture and natural resources (11.9
percent), finance (11.6 percent), law,
economic management and public policy
(5.4 percent), water supply, sanitation and
waste management (5.1 percent), industry
and trade (4.0 percent), education (4.2
percent), health nutrition and social
protection (2.3 percent) and
multisector (11.2 percent). Grants in turn
totalled US$4.1 billion for 263 projects.
Debt
with 95 percent going to Indonesia (29
percent), China (24 percent), India (18
percent), Pakistan (13 percent) and the
Philippines (11 percent). The much smaller
amount of non-sovereign loans, or those
not backed by national guarantees, are
likewise concentrated albeit to a lesser
degree with 57 percent going to India (20

As of end-2007, the ADB’s biggest

cumulative borrower was Indonesia with
approved loans totalling US$21.1B
followed by China (US$20.2 billion), India
(US$18.5 billion), Pakistan (US$11.1
billion), Philippines (US$8.9 billion) and
Thailand (US$5.6 billion).[3]

In 2008, the ADB approved 86 more

projects worth US$10.5 billion – US$8.7
billion of which were sovereign loans and
US$1.8 billion non-sovereign.[4] The larg-
est borrower in 2008 was India (US$2.9
billion) followed by China (US$1.8 billion),
Pakistan (US$1.2 billion),
Indonesia (US$1.1 billion) and the
Philippine (US$940 million). There was
also US$528 million worth of technical
assistance for preparing and implementing
projects and supporting various advisory
and regional activities. There were also
49 grant-financed projects worth US$811
million.
As of the end of 2008, the ADB had
loans totalling US$56.5 billion comprised
of US$52.8 billion in sovereign loans total-
ling and US$3.7 billion in
non-sovereign loans.[5] Sovereign debt is
heavily concentrated in just five countries
DanChurchAid
percent), China (14 percent), Kazakhstan
(8 percent), Pakistan (7 percent) and the
Philippines (7 percent).
There was a total of US$12.6 billion
in principal repayments to the ADB in the
2004-2008 period, or an average of US$2.5
billion over the last five years.[6] Over
the same period, revenues from loans
and commitment charges in turn totalled
US$6.1 billion or an average of US$1.2 bil-
lion per year. These are aside from US$1.7
billion in debt service to the concessional
Asian Development Fund (ADF) for
particularly poor countries.
ADB Debt and Underdevelopment
The ADB and its loans have greatly

10 Asia Pacific Peoples’ Tribunal on ADB

Testimonies
contributed to the debt and
underdevelopment problems of the
people in Asia and the Pacific. Overall, the
ADB has used its lending as leverage to
compel retrogressive neoliberal economic
policies on the underdeveloped countries.
These policies sustain and deepen
domestic conditions of underdevelop-
ment: trade and investment liberalization
has undermined domestic agriculture and
industry; privatization has turned social
and public services into opportunities for
profit; and deregulation has unleashed
unbridled profit-seeking.
The debt owed to the ADB and other
profit-seeking creditors is however also a
direct and severe drain on the scarce
capital and finance of economies in Asia
and the Pacific. The most evident loss is
how national governments spend large
chunks of their budgets on debt servicing
at the expense of vital social services of
education, health and housing, by
privatizing public utilities and other
services, and by heavily taxing the people.
Neoliberal policies and the debt taken
together have caused deep hunger,
poverty, misery and deprivation for tens of
millions of peoples in the region.
ADB loans have been used to push the
privatization of power, water and health.
Policy changes have been imposed and
specific projects financed. The main ben-
eficiaries have been foreign
capitalist monopolies in the power and
water industry and their domestic big
business partners. Reducing public health
spending in turn has effectively freed up
resources for use in debt servicing.
In the power sector, the ADB’s first
Energy Policy Paper in 1981 justified
Asia Pacific Peoples’ Tribunal on ADB
Debt
private foreign capital as the key to
meeting large energy investment needs.
By the second 1995 Energy Policy its
policy of privatization was fully articulated
including dismantling state entities in the
sector, removing subsidies and charging
market prices, improving “efficiency”, and
supporting build-operate-transfer (BOT)
and joint ventures as key vehicles for
private investment.
The ADB has since its establishment
been giving loans to the water sector
and in the mid-1990s began a process of
sharpening its water policy culminating
in its Water Policy of 2001. This policy
declared that governments should cease
to be water service providers, that the
private sector is key to improve perfor-
mance and efficiency, and that treating
water as an “economic good” allocated
through market-based fees and charges
would ensure its conservation and
sustainable use. The ADB has since
provided substantial financial and
technical assistance in support of water
privatization.
The ADB has been involved in the
health sector since the late 1970s although
this has always been a small proportion of
total lending. Nonetheless the lending has
still been influential in those countries that
have been receiving this especially when
coordinated with other bilateral and
multilateral donors. In 1999 the ADB
came out with a Health Policy Paper that
explicitly prioritized “market forces” and
disparaged government intervention. The
Paper also sought to promote “innovative
financing schemes” as well as cost
recovery through user charges.
ADB loans have funded projects
11
 Testimonies
benefiting donor interests at the expense
of underdeveloped countries and local
communities. The case of infrastructure
lending shows this clearly.
Historically, more than half of ADB’s
assistance has gone towards financing
large-scale infrastructure projects
including power plants and grids,
hydropower dams, water and sanitation
facilities, highways, major bridges and
airports. These have often been packaged
as laying the foundations for growth and
for providing vital services to the people.
Less highlighted is how lucrative contracts
and consultancies have gone to nationals
of creditor countries, or how the
infrastructure has mainly served the needs
of big transnational firms operating in
the creditor country, or how the services
provided have been unaffordable or even
substandard. Project have also caused
sickness and death or outright displaced
entire communities.
ADB loans have also gone to support-
ing grossly undemocratic governments. It
has wilfully given loans to Asia’s worst dic-
tators such as in the Philippines (Marcos,
1965-1986; Arroyo, 2001-
present) and Indonesia (Suharto, 1967-
1998), as well as to various military re-
gimes such as in Thailand (1950-1983) and
Pakistan (1977-1988; 1990-present). These
dictators and regimes are
responsible for the killing, disappearance,
torture and abuse of human rights of
hundreds of thousands of people.
ADB’s Beneficiaries
In the course of all this the ADB has
meanwhile profited and continued to
grow. It has achieved consistent profit-
ability and has earned profits every year
12 Asia Pacific Peoples’ Tribunal on ADB
Debt
since its inception. It moreover categori-
cally declares: “ADB has never suffered
any losses of principal on sovereign loans
and maintains a position of not taking part
in debt rescheduling agreements.”[7] The
ADB’s net income has for instance been
rapidly increasing despite the global crisis
from US$570 million in 2006, to US$765
million in 2007 (34 percent increase),
and US$1,126 million in 2008 (47 percent
increase).[8] Its capital stock of US$54.9
billion in 2008 is even larger than the
respective GDP of itspoorest 33
underdeveloped member countries.
Conclusion
The ADB adopted a new long-term
strategic framework in 2008 called Strat-
egy 2020 with three declared agendas:
inclusive growth, environmentally
sustainable growth and regional
integration. It has been compelled to
acknowledge how the rapid growth in
the region over the last decades has been
neither inclusive nor environmentally
sustainable. The real intent however is
not so much to correct these but to give
the illusion of correcting these to be able
to continue pushing the ADB’s imperialist,
corporate and private sector profit-driven
agenda. “Regional integration” is likewise
not a genuinely development thrust for
the people but rather a repackaging of the
proven destructive trade and investment
liberalization agenda.
The ADB has done great damage to
the people’s welfare over the last four
decades and its so-called Strategy 2020
affirms that it is set to do further damage
in the coming decade and beyond. It also
focuses operations on five core areas of
specialization: regional cooperation and
integration, infrastructure, finance sector
Testimonies
development, the environment including
climate change, and education. This is a
lending policy framework that
unabashedly promotes big foreign
capitalist interests and private sector
profits rather than real poverty alleviation
and development.
The ADB is culpable in making the
lives of so many workers, peasants,
national minorities, lowly-paid
professionals, women and children in the
Asia and Pacific so unbearable. Meanwhile
the increased global economic turmoil has
made the demand for development and
dealing with such barriers in the region as
the ADB and its debt even more
imperative.
Holding the ADB accountable for its
past debt misdeeds is a first step towards
justice and putting a stop to their
destructive and anti-people operations.
Asia Pacific Peoples’ Tribunal on ADB
Debt
This would pave the way for the
repudiation of all illegitimate ADB debt
and their absolute and unconditional
cancellation. There must also be a return
of payments on these debts as partial
rectification of the long-standing injustice
of their unremitting servicing.
All these would also be the necessary
beginnings for a more democratic regional
development financing mechanism that
would genuinely help the people of the
Asia and Pacific region in their aspiration
for real progress. There must be true social
transformation and economic develop-
ment that rejects any dependence on for-
eign debt and that promotes the rights of
working people, genuine industrialization,
agricultural development, social progress,
economic sovereignty and self-sufficiency.
13
 Testimonies Debt
Debt and ADB Hegemony:
Impact on Indonesia
Presented by Dian Kartika
International NGO Forum on Indonesian Development (INFID)
March 2009

Introduction
on

Indonesia became a member of the Asian Development Bank (ADB) in 1966. The
country’s ADB membership was ratified by Law No. 8/1966 issued on 8 November 1966.

Since 1967, Indonesia has received aid in the form of financial and technical
assistance. During President Soeharto’s administration, Indonesia and ADB have entered
into 319 loan agreements and 27 grant agreements. From 1967 to March 2009, both
parties have agreed to a total of 847 loan agreements and technical assistance
contracts. Less than 10% of these agreements are in the form of grants (see ADB’s
website at www.adb.org).

Instead of assisting in the financing of development in Indonesia, ADB’s involvement

has brought about an assortment of problems for the government and the people of
Indonesia through public deception, political intervention, human rights violations and
instigating the povertization process in a systematic and extensive manner. ADB funds
therefore should more aptly be known as Financing for Human Rights Violations.

ADB and the Truth

1. Established in 1966, the Asian Development Bank (ADB) promotes itself as an
international development financial institution whose mission is to help developing
member countries reduce poverty and improve the quality of life of their people.
(ADB, profile).

2. In reality, ADB’s bylaw under the Agreement Establishing the Asian Development Bank
(EA-ADB) stipulates that the purpose and function of setting up ADB is to foster
economic development and boost investment as well as intensify foreign trade (articles
1 and 2). Not a single sentence in the bylaw explicitly mentions ADB’s goals in alleviating
poverty and improving the quality of the life of the people. ADB indeed is misleading the
public.

3. The report on a Special Evaluation Study on the Impact on Poverty

Reduction of Selected Projects: Perceptions of the Beneficiaries,
document code : SST: STU 2002-10, is an assessment of 92 agricultural and social
infrastructure projects in six countries namely Bangladesh, Indonesia, Nepal, Papua New

14 Asia Pacific Peoples’ Tribunal on ADB

Testimonies
http://www.flickr.com/photos/yeowatzup/933710864:
Licensed under CC by 2.0
Guinea, the Philippines and Samoa. For
these ADB-financed projects
implemented from 1980 to 1990,
Indonesia was the largest recipient of
loans. Study results revealed a sharp
rise in economic growth among debtor
countries but poverty rates were also on
an upward spiral. From random interviews
of 2,433 beneficiaries in Indonesia it was
found that 27% have cited experiencing
economic progress, 78% did not feel poor
and 22% were impoverished.
4. As an international financial institution,
criteria for ADB membership is that
countries must also be a UN member,
either part of the Economic Commission
for Asia and the Far East or other regional
countries and non regional developed
countries which are members of United
Nations or of any its specialized agencies.
5. This membership requirement should
be understood as ADB’s recognition of
UN’s presence and products. Recognizing
that each UN member country bears
certain responsibilities and obligations
to participate in ensuring world order,
Asia Pacific Peoples’ Tribunal on ADB
Debt
respect the Universal Declaration of
Human Rights and other international
legal instruments. In reality, ADB’s aid
to governments and the private sector
through loans, technical assistance, grants,
guarantees and investment has prompted
human rights violations. ADB at the very
least has allowed recipient governments
and the private sector to commit breaches
to human rights. ADB reports have also
provided clear indications on
infringements of human rights as well as
women’s and children’s rights.
6. Agreement Establishing the ADB
prohibits the institution to undertake any
form of political activity including
interventions toward the political affairs of
member countries (article 36). In truth, all
ADB activities are indeed political
activities. Matters related to economic
development are political issues with
either direct or indirect implications to the
constitutional accountability and
obligations of the government and the
state toward realizing the basic rights of
its citizens. This is even more apparent in
relation to ADB’s function as embodied in
point (iii) which seeks to assist countries
in the coordination of development plans
and policies aimed at achieving better
resource utilization, ensuring effective
economic development and promoting
the expansion of foreign trade (article 2
point iii). Intervention in development
planning and policy-making is a political
activity which will have a direct or indirect
bearing on the achievement of a country’s
development goals.
7. ADB’s political intervention imposed
during the 1997-1999 economic crisis
involved withholding the disbursement of
loans for the social protection of the poor
15
 Testimonies
and vulnerable groups in order to exert
pressure on the Indonesian government
to acquiesce and implement the Structural
Adjustment Program as well as to alter
tariff structures and increase
electricity rates in the midst of the
country’s economic and political turmoil
(see ADB document: Special Evaluation
Study of the Asian Development Bank’s
Crisis Management Interventions in
Indonesia, SST: INO 2001 -09).
8. ADB’s political intervention in Indonesia
was blatant and widely publicized in the
mass media. ADB’s demands for the
dissolution of the Development Audit
Agency and for a more effective Financial
Audit Agency (TEMPOInteraktif,
18 December 2004) also constitute as a
political activity.
9. ADB has brought about the massive
impoverishment of the people of
Indonesia and other Asian countries. The
Special Evaluation Study on Policy Impact
of Involuntary Resettlement, document
No. SSOTH 2000-8 mentions that from
1994 to December 1999, ADB has caused
713,230 people to become victims of
forced evictions in numerous countries in-
ter alia Bangladesh (88,663 people), Cam-
bodia (17,474 people), China (425,433
people), India (800 people), Indonesia
(50,793 people), Laos ( 1,819 people),
Malaysia (3,840 people), Nepal (3,717
people), Pakistan (1,850 people), Philip-
pines (8,268 people), Sri Lanka (11,600
people), and Viet Nam (98,483 people).
All 713,230 people are victims of various
projects in the transportation and energy
sectors; water supply and irrigation, urban
development, rural development infra-
structure and the environment. Victims of
forced evictions are mainly the result of
16 Asia Pacific Peoples’ Tribunal on ADB
Debt
projects conducted in the transportation
sector (566,512 people) for 17 projects;
the energy sector (64,850 people) for 9
projects; water supply and irrigation
(63,837 people) for 4 projects; urban
development (10,526 people) for 7
projects; rural development
infrastructure (6,372 people) for 2
projects; and the environmental sector
(2000 people) for 3 projects.
10. Forced evictions (ADB calls it
involuntary resettlement) that occur in
ADB projects are merely one of the many
human rights violations particularly on
the right to lead a decent life, the right to
equal treatment before the law, the right
to be free from discrimination, the right to
secure employment and a proper
livelihood, the right to personal wealth
and be free from arbitrary expropriation
and the right to personal security.
11. Forced evictions were carried out
without consultation with the victims’
community and informed consent, but
through manipulation and intimidation.
Land appropriation was arbitrary without
compensation or properties priced below
market rates. Victims were relocated to
resettlements without basic amenities
such as road access, water,
electricity, sanitation, schools, and
healthcare. People lost their livelihoods or
forced to change professions without any
support from the government and ADB.
12. Data and information are unavailable
on the number of women and children
victims and their special needs; from the
planning of the evictions to the
evaluation process. This lack of
information and situational description
only illustrate the extent to which the
Testimonies
needs and rights of women and children
are categorically ignored. This is a violation
of women’s rights as governed in CEDAW
(Convention on Elimination All Forms of
Discrimination Against Women).
The rights of children are also brushed
aside and their special needs are not taken
into account in cases of evictions. It is also
unquestionable that ADB projects have
infringed upon the rights of a child to grow
and develop as well as the right to be free
from discrimination and violence. Women
and children have become invisible groups
susceptible to all forms of human rights
violations. When in fact, ADB has declared
to the international community that it
embraces gender responsive policies
packaged in various publication medias as
Our Framework Policies and Strategies on
Gender Development.
13. Loan agreements and technical
assistance between the Indonesian
government and ADB overlook the
principle of jus cogens which states that
any international agreement is rendered
null and void when in contradiction with
general laws recognized and accepted by
the international community as an
international norm that is non-derogable.
Non-derogable rights include: (a) right
to life; (b) right to be free from torture,
inhumane or degrading treatment or
punishment (c) right to be free from
slavery or servitude; (d) right to be free
from imprisonment due to the inability to
fulfill a contractual obligation; (e) right to
be free from ex post facto laws; (f ) right of
equal recognition before the law; (g) right
to the freedom of thought, conscience and
religion.
14. ADB is authoritarian. As a legal subject,
Asia Pacific Peoples’ Tribunal on ADB
Debt
ADB is an organization with immense pow-
er and enjoys a multitude of privileges,
legal immunities and exemptions on tax
regulations as stipulated in the Agreement
Establishing the ADB (Chapter VIII on Sta-
tus, Immunities, Exemptions and Privileg-
es, articles 48-57). ADB declares itself as
a legal subject with immunity towards all
forms of judicial proceedings (article 50),
and the immunity of all ADB assets from
inspection, requisition, confiscation and
any other form of similar acts by executive
or legislature (article 51). All ADB archives
and documents in any location are
inviolable (article 52). All ADB properties
and assets shall be free from any form
of restrictions, regulations, controls and
moratoria (article 53). The privilege on
communications (article 54). Furthermore,
ADB provides immunities and privileges to
ADB staff and employees (article 55) and
exemption from national taxation (article
56). Any waiver of immunities, exemptions
and privileges shall only be appropriate for
the best interests of ADB (article 58).
15. ADB ignores the UN. Despite ADB’s
fundamental provision which states that
its members must also be UN members,
the Bank and also the Indonesian
government as an ADB and UN
member have ignored and failed to ratify
the Vienna Convention on the Law of
Treaties between State and International
Organization or between International
Organizations, signed on 21 March 1986,
henceforth known as the Vienna
Convention of 1986. This convention in
fact is an international instrument that
governs on the formulation of
international agreements between
international organizations and countries
or among international organizations.
17
 Testimonies
Access to Justice for Victims
Hundreds of thousands, and
probably even millions of people have
become victims of ADB-funded projects up
to the end of 2008.
There is however an absence of na-
tional or international procedure to
address the plight of these victims. Thus
far, victims have been urged to seek
redress from their respective governments
for the losses incurred from ADB projects.
Based on the legal and human rights con-
text, the “brain/mastermind”
behind all destructive plans, the instigator
of violations and acts of crime and the fi-
nancier of such offences should be the one
to be held accountable for the sufferings
of people who have become victims and
the resulting material and
non-material losses.
. financial institutions for the purpose of
For cases of human rights
violations caused by debt-financed
projects – more appropriately termed
Financing for Human Rights Violations
instead of Financing for Development
– victims have arrived at a dead end as to
ways in attaining justice.
Inaccessibility to justice is caused by the
following aspects:
1. Internal regulations of international
financial institutions excessively govern on
their immunities, privileges and
exemptions applicable to the organization,
leadership structure, personnel and staff
of the respective institution.
As stipulated in the Agreement
Establishing the ADB immunities include
imperviousness from judicial proceedings
(article 50); assets immune from all forms
of inspection, requisition, confiscation
18 Asia Pacific Peoples’ Tribunal on ADB
Debt
and any other similar acts by executive or
legislature (article 51); and immunity of all
ADB archives and documents stored in any
location (article 52). Article 53 on the
immunity of assets from restrictions on
the other hand, states that all ADB
properties and assets shall be free from all
forms of restrictions, regulations, controls
and moratoria. The privilege on
communications is regulated in article 54;
immunities and more privileges for ADB
employees in article 55 and tax
exemptions are stipulated in article 56.
These provisions are binding for all ADB
member countries; despite any errors
committed by ADB.
2. The presence of an international law
that regulates on international agreements
between states and international
organizations including international
preventing and protecting the people from
human rights violations; known as the
Vienna Convention on the Law of Treaties
between State and International
Organization or between International
Organization, signed on 21 March 1986,
hereinafter referred as the Vienna
Convention of 1986, is non-binding as the
minimum threshold of ratification has not
been met. The Convention will only be
binding after 35 countries have ratified the
document. At present only 26 countries
have ratified the Convention. In addition,
it shall only apply to parties of the
Convention both state and organization.
Indonesia along with ADB, World Bank and
IMF have not ratified the Vienna Conven-
tion of 1986.
3. The International Court of Justice (ICJ)
can function as an institution where
seekers of justice may lodge complaints
Testimonies
on various forms of breaches to national
laws. ICJ however only recognizes states as
parties in contentious cases.
4. International legal developments at the
UN level are discussed in the
International Law Commission (ILC) and
decisions are made at the UN General
Assembly. Several crucial developments
related to the implementation of the
international convention on agreement
laws, i.e. the Vienna Convention of 1969
and 1986, have drawn increased attention
in ILC sessions such as: Unilateral Act Of
States, Responsibility of International
Organizations, International Liability in
Case of Loss From Transboundary Harm
Arising Out of Hazardous Activities,
Responsibility of States for Internationally
Wrongful Act. Discussions beginning the
year 2000 to 2007 on the responsibility of
international organizations, have
encompassed responsibility toward illegal
agreements or regulations or
infringements as determined by
international law. Discussions have ar-
rived at an agreement that international
organizations (including the World Bank,
IMF, ADB and others) should not be at
http://www.flickr.com/photos/chucksimmins/2947854870/:
Licensed under CC by 2.0
Asia Pacific Peoples’ Tribunal on ADB
Debt
liberty to decide as they wish with total
disregard of international laws. Translating
this into concrete actions and enforcement
however requires hard work and a lengthy
process.
.
Justice for victims of debt-financed
projects should be easily accessible.
Several strategic measures to achieve this
among others:
1. Demand for the termination or
restriction of immunities, privileges and
exemptions governed in the charter or
statute of international financial
institutions. This includes pushing for
amendments to the Agreement
Establishing the ADB, if ADB is still
regarded as an international financial
institution that is relevant to this day.
2. Urge the Indonesian government and
parliament to ratify the Vienna
Convention on the Law of Treaties
between State and International
Organization or between International
Organizations of 1986, and demand that
the Indonesian government restricts
international cooperation only with
international organizations that have
ratified the Convention.
3. Push for reforms in the International
Court of Justice (ICJ) in order to open up
access to justice for victims of projects
undertaken by international organizations
including international financial
institutions.
4. Promote the formulation of various
regulations at the international level to
support greater transparency and
accountability from international
organizations including international
financial organizations.
19
 Testimonies Water
Melamchi Water Supply Project
Presented by Anuj Sitoula
Water and Energy Users’ FederationWAFED, May 2009

The Melamchi Water Supply Project (MWSP) is an inter-basin water transfer project
aiming to divert 170,000 cubic meters/day of water (62 million cubic meters/year) from
the Melamchi river to Kathmandu valley through a 26.5 km tunnel, to quench the thirst
of the 1.6 million population of Kathmandu valley. This volume of water diversion will
be tripled by the end of 3rd phase from the Yangri and Larke rivers. The Melamchi river,
which is a part of the larger Indrawati river basin, that originates from the high
Himalayas, is located about 42 km to the northeast of Kathmandu.

Ratan Bhandari/WAFED

Cost of the project

The initial cost was estimated to be USD 464 million and revised upwards in 2005 to
USD 531 million. On January 2008 it was revised downwards to USD 317.3
million with a 32 percent (146.7 million) reduction from the original cost of USD 464
million.

Offense
• Violation of ADB’s own safeguards policies: involuntary resettlement policy,
environmental policy and accountability mechanism, including national law and policy.
• Violation of people’s human rights.
• Violation of Indigenous peoples’ right

20 Asia Pacific Peoples’ Tribunal on ADB

Testimonies
Conditionalities of ADB
• Privatisation of Nepal Water Supply
Corporation (NWSC)
• Management of the public water
management structure should be replaced
by a private operator.
• Full cost-recovery principle.
• Increasing water tariffs three-fold.
How peoples rights are violated
• Average river flow during the dry months
(March and April) is 3 cubic meters per
second. The proposed diversion rate of
1.97 cubic meters per second is slightly
less than the average dry season flow. The
prescribed release of 0.4 cubic meters per
second of water in the river after
diversion is insufficient to sustain
present and future water demand of
fertile Melamchi valley. The MWSP has
also failed to satisfy local people in terms
of how much water will be required in the
Melamchi valley for their livelihoods and
ecosystems, and how much water will
really be available for diversion.
• Loss of resources for agricultural
production.
• Loss of employment and loss of future
opportunity for development of other
rural enterprises based on water-use.
• Unequal distribution of benefits
between rural poor people at the
source and the affluent people of the
Kathmandu.
• Loss of productive assets due to
permanent acquisition of 80 hectare of
agricultural land by the project.
• Agricultural production on about 110
hectares of spring paddy and
nearly 15 traditional water mills (Ghatta)
along the Melamchi river are likely to
Asia Pacific Peoples’ Tribunal on ADB
Water
be adversely affected between February
to May due to the reduced flow in the
Melamchi river after water diversion.
• There will be loss of agricultural food
production, reduced food securityand
,
loss of employment and rural livelihood.
• The compensation package will not
provide any benefit to those who rent in
land for cultivation.
• There has been complete lack of
transparency and democratic process
in development and implementation of
Social Upliftment Programme (SUP) due
to which local people have totally rejected
SUP.
• Local people claim that 10 percent of the
income from the project should be
allocated for the development of the
Melamchi valley, which should be
controlled and spent by the locals but this
demand is not yet addressed.
• Free, prior and informed consent of the
local affected people before making
decisions is the fundamental essence of
public participation. The project has not
made sincere efforts to obtain public
consent by ensuring their effective and
meaningful participation in the decision-
making process. The project invited only
selected persons in a few public
consultations. Local NGOs and individuals
criticizing the project were neither invited
nor consulted.
• Disclosure of information is inadequate.
People have been fighting for basic project
documents for years but without any
significant achievement. Only little
information is available in local language.
Even these documents were made public
after making all decision on the project.
• Information in local language is not
available and there is lack of proper and
21
 Testimonies
authentic information.
• The project is not environmentally
sound. The construction of the 26.5
kilometer long tunnel through the
mountain will cause irreparable loss to
the surrounding environment. The whole
mountain range lies within the seismically
sensitive region. Natural disasters like
earthquakes and landslides may become
frequent and intense once the
construction work begins, since from
experience it is known that soil structure
in the region is highly unstable.
• Indigenous people are totally neglected
during project decision. They were neither
consulted nor their consent taken on land
acquisition, compensation and
resettlement.
• There is also no adequate study or
income generation programme for, over 50
Majhi families – a fish-dependent ethnic
group who will be displaced.
Exhaustion of remedies:
• Open letter to Melamchi Water Supply
Development Board (MWSDB), the
Government of Nepal and Asian
Development Bank(ADB) by WAFED on
June 27, 2003.
• ADB’s response to WAFED’s letter of 27
June 2003 on July 9, 2003.
• Joint letter to ADB by WAFED and
Melamchi Local Concern Group(MLCG) on
March 29, 2004 (In Nepali language).
• Response by ADB and Donors on
WAFED’s Letter of April 19, 2004 on April
27, 2004.
• Letter to Special Project Facilitator (SPF)
for the investigation of policy non-
compliance in the MWSP on May 1, 2004.
• Initial response by the SPF in the letter of
22 Asia Pacific Peoples’ Tribunal on ADB
Water
May 1, 2004 on May 11, 2004.
• Additional information to the SPF on
policy non-compliance in the MWSP on
June15, 2004.
• Additional request to the SPF on policy
non-compliance in the MWSP on June 21,
2004.
• The final SPF’s report on June 25, 2004.
• Letter to the SPF on decision to engage
in consultation process on July 7, 2004.
• Comments on the SPF’s Report by the
claimants on July 21, 2004.
• Letter to the MWSDB requesting for a
constructive dialogue on September 17,
2004.
• Response from the MWSDB on the
letter of September 17, 2004 on October
1, 2004.
• Letter to the SPF on disengagement of
the consultation with the SPF on
October 8, 2004.
• Letter to the Compliance Review Panel
of the ADB for the investigation of policie
non-compliance in the MWSP on
November 12, 2004.
• Report on Eligibility on the request for
compliance review on the MWSP by the
CRP on December 17, 2004.
ADB and the project responded to
most of the requests and demands but
with no clear opinion. SPF to some extent
accepted that there are some serious
issues which need to be considered and
have recommended for regular and
constructive dialogue with all the
concerned, but suggestions and recom-
mendations were never implemented.
Since the outcome of this effort was
unsatisfactory, a complaint was filed with
the Compliance Review Panel (CRP) for the
Testimonies
examination of information disclosure, re-
settlement, water, environment, forestry,
indigenous peoples, and poverty reduction
strategy.
The complaints helped improve the
belated release of some previously hidden
project documents and ensure better land
compensation deal. However, most of the
findings of the Accountability Mechanisms
were found ADB-biased with both policy
and procedural flaws in providing effective
remedies to victims.
Demands
• Release all project documents and
information in local language.
• Review and redo the EIA with
meaningful public participation to gain
prior informed consent.
• To apply exising ADB policy on
compensation and resettlement, water
and environment, including Nepali laws
and international human rights and
environmental obligations.
• Implement SUP only after direct and
meaningful involvement of local people.
• Respect and apply WCD criteria and
guidelines.
Kali Gandaki ‘A’ Hydroelectric Project
The Kali Gandaki ‘A’ (KGA) is Nepal’s
largest hydroelectric project, 144 MW,
built in the western region of Nepal with
conditional loans from the Asian
Development Bank (ADB) and the
Japanese Overseas Economic Co-operation
Fund (OECF), now Japan Bank for
International Cooperation (JBIC). Began in
1997 and completed in 2002, this project
is considered costly, compared to the
original forecast. The reasons are the
Asia Pacific Peoples’ Tribunal on ADB
Water
delays, the cost-over-run and corruption.
• The cost escalated from US $250 to US
$360 million by the time of completion.
• The civil construction cost was increased
by 67%.
• The ADB, instead of supporting cost
reduction measures, was mainly
concerned to ensure compliance with its
conditionalities and increases in the
electricity tariff.
Offense
• Violation of ADB’s own safeguards
policies, involuntary resettlement policy,
environmental policy and accountability
mechanism.
• Violation of people’s human rights.
• Violation of indigenous people’s rights
Access to information
• Only a few documents like the loan
agreement were available. Many of these
are of no use to local people, as they were
all in English, except for some small
information booklets.
• None of the documents were available
during the time of decisions.
• The non-availability of basic project
documents and information like the
feasibility studies, cost-benefit analysis
and Environmental Impact Assessment
(EIA) reports, as well as copies of contracts
even after the completion of the project.
• A lot of false promises were given to
the local people. They were completely
denied of critical project documents and
information. Even requests for information
by local elected bodies were repeatedly
dismissed.
23
 Testimonies Water
Public consultation/participation
•Some public meetings were held at the
KGA project sites and in a
five-star hotel in Kathmandu.
• The local participants at these meetings
were all selected under the influence of
project officials.
• Activists were prevented from attending
local meetings and presenting their views.
Those who made attempts to distribute
printed information had to face both
verbal and physical abuse and harassment.
• The project violated Nepali law Ratan Bhandari/WAFED
(Environment Protection Act and Rules) Trade Union Act.
and ADB safeguard policy while preparing • The local traditional village women were
EIA report by not having proper exposed to vulgar western culture and
consultation. lifestyle and were offered only low-level
and low-paid household work at the
The issue of local benefits residence of Impregilo masters.
• The project officials were even engaged • No letters of appointments or contracts
in creating pseudo local groups and were given to workers and labourers in
arranging fake letters of support to the
accordance with the Nepal Labour Act.
ADB.
• Hiring and firing were the terms and
• The local people were suppressed when conditions for them, in violation of all
they began to demand the promised jobs domestic and international labour laws
and effective implementation of social and
and standards.
environmental mitigation plans.
• Minimum basic pay and benefits were
• One unemployed youth who had joined
denied.
the protesting crowd was killed by police
• The Head of Impregilo once said that it
in the Impregilo office compound.
had no obligations to respect any
• About 32 local people demanding jobs domestic, international or the ADB rules
were charged under the Public Offense Act and regulations on labour and safeguard
by the local authority. They were set free
policies.
upon the deposit of their personal
property for bail. The charges were • The displaced people had no choice
dropped only after the completion of the but to accept whatever money was made
available for compensation. There was,
project.
and still is, no provision for the true
• The formation of independent unions representation of affected people in the
was virtually banned and genuine union land acquisition and compensation
leaders were fired for their activities,
processes.
violating Nepal Labour Act/Rules and
• Small number of Bote indigenous

24 Asia Pacific Peoples’ Tribunal on ADB

Testimonies
peoples were provided neither proper
resettlement, compensation nor
guaranteed jobs. Instead, they lost their
traditional livelihoods permanently. The
planned income-generation programmes
were also not adequately implemented.
• Some of the few houses built for some
Bote families do not have basic facilities
like electricity supply, toilet and water.
Even the houses are built so badly that
they could collapse at anytime.
• The project failed to release the agreed
amount of water downstream.
• The activists and media people were also
prevented from meeting local people and
visiting the project sites. In some cases,
armed police were used to arrest and
expel them from the area.
Remedies
• Several public meetings and protests
were organised by local people against
the NEA, the Impregilo and the ADB and
the government during the construction
period.
• The people even complained that ADB
officials were hiding from them to avoid
complaints, and that they were largely
relying on inaccurate internal reports to
judge project performance.
• The complaints made by the local
Village Development Committee officials
and other groups were either ignored or
poorly addressed.
• A Public Interest Litigation was filed at
the supreme court of Nepal by the local
people demanding benefit sharing for the
Village Development Committee.
• An application lodged at the
Commission on Investigation of Abuse of
Authority (CIAA) on August 2003 by
Asia Pacific Peoples’ Tribunal on ADB
Water
WAFED to investigate the corruption of
Kaligandaki A. CIAA has not yet provided
any information regarding its investigation.
• A case was filed at the Supreme Court of
Nepal regarding corruption on the project.
• A detailed complaint by the Water and
Energy Users’ Federation-Nepal (WAFED)
to the ADB in June 2003, and then a high-
level mission was sent to study the
problems. The Mission responded to
WAFED in November, confessing that there
have been serious violations of ADB
policies, and mitigation plans, and
promised compliance as soon as possible.
• The Mission also has agreed in a January
2004 meeting to continuously monitor
post-project impacts and develop
mitigation plans, as and when required.
But the progress is still unknown.
Demands
• Review the whole project performance
during the implementation of the project.
• Undertake post-project Environmental
and Social Impact Assessment including of
those directly and indirectly affected areas
that were not covered previously.
• Develop and implement various
measures to ensure that people are
adequately compensated for their losses
and to implement economic, social and
environmental programmes.
25
 Testimonies Water
On Dhaka Water Supply and Sewerage
Authority (DWASA) Project in Bangladesh
Presented by Ahmed Swapan
Voices for Interactive Choice and Empowerment (VOICE), May 2009

Dhaka Water Supply and Sewerage Authority (DWASA) Project

The ADB’s Dhaka Water Supply and Sewerage Authority (DWASA) Project
envisages eventual privatisation of the water distribution system. It makes
recommendations that bear the typical signs of gradually moving towards that
direction. But water privatisation has hardly benefited the customers of the private
water companies in developing countries, where operators are virtually stronger than
the host government. The following discussion focuses on different aspects water
privatisation and the Dhaka WASA project to be specific. It also draws upon experiences
from other countries.

Dhaka Water Supply Sector Development Project was aimed at rehabilitating the
age-old water supply pipelines. The Tk1,500 core project was funded by the Asian
Development Bank, and is scheduled for completion in 2013.

Many city dwellers are facing water crisis as they used to get dirty and stinky water.
Most of water supply/pipelines are age-old and leaked that cause the supply water to be
polluted and become stinky.’

Cracks often develop on the age-old pipelines and water leaks out of these pipes
resulting in loss of a huge amount of water, an official said, adding that 20 per cent out
of 40 per cent system loss of WASA water occurs due to leakages and cracks in
age-old pipelines.

Against the backdrop, DWASA in collaboration with ADB had undertaken the project
to rehabilitate the age-old water supply pipelines, stop water pollution through leakages
and ensure smooth water supply to city dwellers.

Currently, the length of the WASA pipeline network in the city is more than 3,000
kilometres with supplying water through around three legal and illegal
connections, according to WASA sources.

Of the total network, 15 to 20 per cent of the supply system is operated through
pipelines made of cast iron and mild steel while 2 to 3 per cent is made of
asbestos cement.

26 Asia Pacific Peoples’ Tribunal on ADB

Testimonies
AC and MS pipes, used in the supply
lines, are mostly around 40 years old while
CI pipes were installed during the British
period, sources said. Most of the age-old
AC pipes have lost its durability and the
MS pipelines have become rusty and weak
frequently causing leakages and cracks in
the pipelines.
WASA’s maximum daily water
supply capacity is between 160 crore and
170 crore litres against the demand for
more than 200 crore litres. Of the total
supply water, 85 per cent come from
underground source and 15 per cent from
surface water source. Apart from about
500 deep tube wells, WASA has four sur-
face water treatment plants at Sayedabad,
Chadnighat and Narayanganj.
(http://www.newagebd.com/2009/
feb/11/met.html#2)
Dhaka Water Supply and
Sewerage Authority was turned into a
public limited company under the
Companies Act 1994 that would allow
DWASA greater flexibility and autonomy
for private sector investment in expanding
its operations and maintenance.
As an intermediate approach it
suggests the water agency should become
an autonomous and commercial
organisation, which should not be
compelled to seek government approval
regarding its operations including service
delivery, tariffs or accepting private
investment.
The report recommends that
private sector involvement on a ‘Build
Own Operate and Transfer’ basis ‘whereby
the private party will operate the
established plant for an agreed number of
Asia Pacific Peoples’ Tribunal on ADB
Water
years with the surety of the sale of a given
quantity of water annually’. However, in
this case the report suggests that the given
quantity of water sales be guaranteed by
the government.
There are also recommendations
that water tariffs, for both residential
and commercial consumers, be increased
by 200 per cent from the current levels
by 2019 since tariffs would also have to
recover loans of the lending agency. This
is especially important since, although
the government would be borrowing the
funds at nominal service charge, below
one per cent, and would be liable to pay
back in a few decades, the water agency
would have to service the loans at 7.5
http://www.flickr.com/photos/28705377@N04/3860417179
Licensed under CC by 2.0
per cent and repayment would begin
within a few years after the project is
completed.
The report recommends that water
tariffs are high enough to service its debts.
Bangladesh is going through the classic
signs of full-fledged water privatisation,
which will presumably begin with Dhaka,
the most lucrative market for any private
operator. There has hardly been any
27
 Testimonies
attempt of the government to reclaim
water as a basic human rights, which then
falls upon the state to ensure
‘Conditionalities’.
By way of conclusion, here is the
complete list of ‘assurances’ that a draft
final report, completed in 2006, putting
forward recommendations for the Dhaka
WASA project of the Asian Development
Bank.
‘In addition to standard
assurances, the Government has given
the following Project specific assurances,
which will be incorporated in the legal
documents:
(i) The Government will provide
counterpart funds for the Project
implementation on time. The Project
Monitoring Unit (PMU) DWASA will make
timely submission of annual budgetary
appropriation request and ensure prompt
disbursement of appropriated funds
during each year of Project
implementation;
(ii) Before the loan Effective Date, the
existing training center at DWASA will be
revived by filling in all the vacant positions
with qualified training people from outside
DWASA;
(iii) The Government and DWASA will
ensure that it will not approve any
sub-project that involves significant
involuntary resettlement according to
ADB’s Policy on Involuntary Resettlement
(1995). The Government will further
ensure that all land and right-of-way
required for the Project will be made
available in a timely manner and adequate
compensations have to be paid to affected
people prior to any civil works contract’s
award. Any involuntary resettlement will
28 Asia Pacific Peoples’ Tribunal on ADB
Water
be carried out in accordance with the
Resettlement Framework (RF) agreed upon
between the Government and ADB, and
ADB’s Policy on Involuntary Resettlement
(1995). A Resettlement Plan (RP) will be
prepared for each contract involving land
acquisition or resettlement and will be
submitted to ADB for review and approval
prior to any related civil works contract’s
award. Draft RPs and updated draft RPs
will be disclosed to affected people prior
to submission to ADB for review and
approval;
(iv) To ensure that women benefit equally
from the Project and interventions avoid
gender bias, the Government and DWASA
will ensure that the Project will be carried
out in accordance with ADB’s Policy on
Gender and Development (1998) and the
gender strategy contained in the Gender
Action plan that has been prepared and
agreed between the Government and
ADB;
(v) The Government will ensure that
design, construction, operation and
implementation of the project facilities
will be carried out in accordance with the
environmental assessment and review
procedures and IEE for the project as
agreed between the Government and
ADB, and complies with the Government’s
environmental laws and regulations and
ADB’s Environment Policy (2002) and
Environmental Assessment Guidelines
(2003). Any adverse environmental im-
pacts arising from the construction, opera-
tion and implementation of the project
facilities will be minimized by implement-
ing the environmental mitigation and
management measures, and other
recommendations specified in environ-
mental assessment report. The
Government will ensure the satisfactory
Testimonies
DanChurchAid
International Rice Research Institute
preparation and implementation of the
asbestos management plan and other
safety plans, and that qualified and
competent personnel will be recruited to
carry out the work. The Government will
ensure environmental requirements will
be incorporated in bidding documents and
civil works contracts.;
(vi) Although the Project does not
envisage any adverse impact on
indigenous peoples, the Government and
DWASA will ensure the subprojects will be
prepared and implemented in accordance
with ADB’s Policy on Indigenous Peoples
(1998), in order to increase the quality
and access of water supply and sanitation
received by indigenous peoples;
(vii) The Government will cause each of
the zones to carry out a Project
Performance Monitoring and Evaluation
(PPME) program. The PIU in each zone will
be responsible for ensuring that a
comprehensive program for PPME
acceptable to ADB is carried out to
(i) examine the Project’s technical
performance; (ii) evaluate the delivery
of the planned facilities; (iii) assess the
achievement of the Project’s objectives;
and (iv) measure the Project’s social and
economic benefits;
(viii) Not later than six months as of loan
Asia Pacific Peoples’ Tribunal on ADB
Water
Effective Date, the PMU will conduct initial
baseline physical and socioeconomic sur-
veys and submit a detailed
implementation plan for monitoring
performance and for preparing benchmark
information to ADB, for review and
concurrence. Throughout Project
implementation period, annual PPME
reports will be prepared by each PIU,
consolidated by the PMU and submitted
to ADB.
The Asian Development Bank’s mas-
sive $838 million Dhaka Water Supply
Project is already underway, which it notes
would require substantial private
investment. The World Bank has also
confirmed it commitment to support the
water sector in Bangladesh along with the
Asian Development Bank and noted that
the sector requires about $8 billion
dollars’ worth of investment over the next
20 years. An obvious means, and
presumably the one preferred by both the
agencies, to finance the water projects
would be private investment gradually
pushing the water sector towards
privatisation.
The approach as planned by the
Asian Development Bank would be a well
concerted one as it approaches to address
all the areas of concern and duly remove
barriers. This includes the policy level
intervention where the agency will make
sure that the policy regime is made
sufficiently flexible and that it accommo-
dates private investment in the utilities, in
this case, water, if not allow private
operators to own water plants and
distribution systems.
Water is synonymous to life. But it is
also an integral part of cultures around the
29
 Testimonies
world. The universal right to water is
inherent in the value system of
societies. Although its economic value is
high, universal access to clean water must
continue to be an agenda of governments
and states, an obligation that must not be
linked with commerce. The Bangladesh
government, however, appears to have
already forgone that obligation. If
previous instances of water privatisation
are an indication, it will bode ill.
Water
3. Small Scale Water Resources
Development Sector II, investment is
34.00M USD
4. Secondary Towns Integrated Flood
Protection (Phase 2), investment is
80M USD
5. Emergency Flood Damage Rehabilitation
Project, investment is 180 ml USD
6. Flood Damage Rehabilitation Project,
investment is 104 ml USD

ADB loan in water sector:

1. Bangladesh Southwest Area Integrated
Water Resources Planning and
Management total investment is
28.10M US dollars
2. Jamuna- Meghna River Erosion
Mitigation Project, investment is
42.20M USD

30 Asia Pacific Peoples’ Tribunal on ADB

Testimonies Agriculture
“Debt, Food Crisis, and Extreme Poverty
in Rural Communities”
Presented by Erpan Faryadi
Aliansi Gerakan Reforma Agraria (AGRA), May 2009

QUICK FACTS ON AGRICULTURE AND LANDLESSNESS

• Indonesia’s total land area: 1,904,345 square kilometers (1973). Forest area in
Indonesia: 144.5 million hectares (1984, according to the Forest Land Use Consensus
Plan or Tata Guna Hutan Kesepakatan/TGHK).
• In 1993, 10.8 million farming households owned less than a hectare of land. By 2003,
this number had increased to 13.7 million, or an increase of 2.6% a year.
• In 1993, over half (52.7%) of the country’s farming households were considered as
poor; by 2003, the proportion was 56.5%.
• The number of families that make their living from agricultural activities increased
from 20.8 million in 1993 to 25.4 million in 2003, or an increase of 2.2% a year.
• Of the 25.4 million farming families recorded in 2003, 54.4% lived in Java, and the
rest (45.6%) in outer Java. Poverty among Javanese farming families rose from 69.8% to
74.9% during the period 1993-2003. In outer Java, the number of poor farming families
increased from 30.6% to 33.9% during the same period, representing an increase of
3.3% a year.
• In 2000, there were 1,887 plantation concession holders that held such concessions
covering 3,358,072 hectares, or an average of 1,780 hectares of plantation lands each.
• By 1970, 64 companies had received forest concessions covering some 8 million
hectares. From 1967 to 1980, 519 companies were given forest concessions covering 53
million hectares. As of June 1998, 651 companies had been granted forest concessions
covering 69.4 million hectares.
• The largest source of revenue to the Indonesian government for payment of
development needs, particularly up to the 1980s but continuing into the early 21st
Century, is from mining. Foreign companies such as Mobil Oil,
Schlumberger, Exxon, Caltex, Stanvac and others are large foreign interests that have
been sucking out Indonesian oil for dozens of years. The mining concessionaries – Free-
port McMoran (US) and Rio Tinto (UK and Australia) – are now planning for expansion of
their mining activity, including into the area of Lorentz National Park, a mangrove forest,
and other lowland forest areas. Freeport holds a license to mine an area of 2.6 million
hectares in West Papua. The target for national revenue from the mining sector in 2007
was Rp 5.74 trillion, an increase from 2006 when this figure hit Rp 5.58 trillion. This rev-
enue still depends on large-scale mining operations such as PT Freeport Indonesia
(a subsidiary of Freeport McMoran, US), Inco (Canada), Newmont Nusa Tenggara (US),

Asia Pacific Peoples’ Tribunal on ADB 31

 Testimonies
and Arutmin, which generated Rp 663 bil-
lion, Rp 154 billion, Rp 169
billion, and USD 25 million respectively.
Overview of Agricultural Development
in Indonesia
Indonesia’s agricultural develop-
ment has progressed in six phases. The
first phase was the revolutionary phase
(1945-1965), during which then President
Sukarno sought to develop agriculture by
nationalizing plantations and companies
formerly owned by the Dutch and Japa-
nese colonial governments. Until the late
1950s, food production had not increased
by enough to improve the conditions of
households dependent on farming. Rice
production and agricultural productivity
began to improve only after intensive pro-
duction was adopted broadly in the early
1960s as part of the Mass Guidance pro-
gram. The new intensification movement
gained momentum following the establish-
ment of demonstration plots, organized by
researchers and students at the Bogor
Institute of Agriculture with the
participation of farmers on the north
shore of Java.
The second phase was consolidation
(1967-1978). In this period, the
agricultural sector grew 3.4%. Growth
was primarily driven by the foodcrop and
plantation sub-sectors; rice production
increased by more than two million tons
during the 1970s, and productivity more
than doubled since 1963, to more than 2.5
million tons per hectare.
Three key policies – intensification,
extension and diversification – were
adopted during the second phase and
were supported by the ability to increase
production and productivity in agriculture.
32 Asia Pacific Peoples’ Tribunal on ADB
Agriculture
During this phase, a strong foundation for
high growth in the sector was established.
Great attention was given by the govern-
ment toward construction of infrastruc-
ture vital to agriculture, such as irrigration,
roads, and supporting industries, e.g.,
cement and fertilizer.
The third phase was that of high
growth (1978-1986). This period was a
significant one in Indonesia’s agricultural
economy. The agricultural sector grew by
more than 5.7%, because of an economic
development strategy that was based on
agriculture. Production of food, planta-
tion crops, fish, and livestock all increased,
with growth of 6.8%; research and
technological development played a key
role in this. The Green Revolution
program and technological advancements
led to an increase in productivity of 5.6%
and by 1984, the country had attained
self-sufficiency in food. Rice production
was correlated with improved living
conditions among rural communities.
Inspite of this, the Green Revolution
advanced largely via monoculture systems
– which were forced upon all regions, de-
spite their geographic diversity and differ-
ent bases of subsistence, e.g., corn, sweet
potato and other crops – making food se-
curity more susceptible to climate changes
and resulting in ecological degradation.
The Green Revolution also highlighted the
dependency of small-scale farmers and
farm workers on their landlords and
on expensive agricultural inputs, often
imported, such as seedlings, fertilizer, and
pesticide.
The fourth phase was deconstruction
(1986-1997). As a result of policies which
had been adopted previously, the agricul-
Testimonies
tural sector experienced
contraction during this period, with
growth as low as 3.4% per year.
Policymakers and economists neglected
agriculture until the sector was in serious
need of repair. The dark days of agriculture
grew worse with the introduction of tech-
nocratic economic policies which aimed at
a large-scale, though footloose,
industrialization strategy in the early
1990s.
Since the mid-1980s, several compo-
nents protecting industrial sectors had
been in place, contributing to
double-digit growth in the industrial and
manufacturing sectors. At that time, the
notion that Indonesia was already capable
of transfoming itself from an agrarian
nation to an industrial nation gained
currency. Policies which the government
adopted at the point were geared toward
channeling all the resources from the
agricultural sector to industry, because
the government believed that agricultural
projects could not produce results as fast
as industry or urban investments. A policy
of subsidizing industry by stabilizing the
prices of basic goods was adopted to
pander to urban workers. This policy led to
the destruction of farmers’ livelihoods and
the deterioration of agricultural
development in Indonesia.
The fifth phase was the crisis
Table 1. Growth in Agricultural Sector (% per year)
Asia Pacific Peoples’ Tribunal on ADB
Agriculture
period (1997-2001). In this phase, the
already struggling agricultural sector had
to face the impact of the crisis, namely
absorbing surplus labor from the
informal and urban sectors, and saving the
Indonesian economy. The dependence of
farmers on expensive productive inputs
from abroad—a consequence of past
policies—boomeranged on the farmers
when harvests failed because of droughts.
During the crisis, fertilizer subsidies were
withdrawn and imported rice—either in
the form of food aid or smuggled rice—
flooded the domestic market.
The sixth phase is transition and
decentralization (2001-present). This
period is very uncertain for both economic
players and the Indonesian agricultural
sector. Despite decentralization, agricul-
tural development has not moved forward
because of the lack of regional autonomy
and authority, which are essential to
formulating strategies based on compara-
tive and competitive advantages. Left to
regional governments, the agricultural sec-
tor is increasingly being neglected. A sum-
mary of the development path taken by
Indonesian agriculture can be seen in
Table 1.
During this phase of uncertainty,
President Susilo Bambang Yudhoyono has
propounded a model for agricultural
33
 Testimonies Agriculture
Notes:
• Growth statistics for the revolutionary period (1945-1965) are taken from several sources, including Booth
(1998), for food and plantation, and FAO for total agriculture.
• Figures for the modern periods (1967-2004) are calculated from GDP in the agricultural sector, from
publication by BPS and FAO (several years).
• Forest subsector is taken out of the calculation because of different characteristics.

Source: Calculated by Bustanul Arifin based on data of BPS and FAO, as cited in Sri Hartati Samhadi, op.cit., 16
August 2005, p. 50.

development that does not address issues vast number of landless farm labourers,
concerning land. Critics are saying that without doubt this 43% is dominated
seeking to revitalize agriculture without by farmers with small holdings and the
land reform program is like going through families of landless farm labourers, whose
the Green Revolution for the second time. children move to urban areas, living in the
dirty outskirts of cities and working as
Land Ownership and Distribution factory workers.
According to the 1983 Indonesian
Agricultural Census, on average each
farming family in Indonesia controls an
area of land of 0.98 hectare—in Java 0.58
ha and outside Java, 1.58 ha. The situation
had worsened by 1993 with an average
land ownership for the whole of Indonesia
of 0.83 ha—in Java 0.47 ha and outside
Java, 1.27 ha. This is the reality of land
ownership and control. The number of
gurem farmers (owning land of 0.2 ha or
less) continues to rise, from 9,532,000 in
1983 to 10,937,000 in 1993. The
percentage increase in the number of
gurem farmers was greater outside
Java, with a 33.4% increase or a total of
2,840,000 outside Java, and a 9.37% http://www.flickr.com/photos/roodee/3325923980/in/
increase or a total of 8,097,000 in Java. In photostream/ Licensed under CC by 2.0
fact the problem outlined above is
compounded by the ever increasing By the same token only 16%, or a total of
number of landless farmers or farm 4,421,746 farming families own on aver-
labourers. As shown in the 1993 age more than 1 hectare of farmland,
Indonesian Agricultural Census, 43% of a while this same group control 69% of total
total of 11,084,605 farming households farm land. If this data is classified into two
live in poverty, and of those who own groups – those controlling land of less
land, on average they control no more than 1 hectare and those controlling land
than 0.10 hectare. Although it is difficult of more than 1 hectare, this shows that
to determine from this census data the 84% of rural inhabitants control 31% of
total farm land, and the remaining 69% is

34 Asia Pacific Peoples’ Tribunal on ADB

Testimonies Agriculture
Table 2. Distribution of Agricultural Land in Indonesia, 1973-1993

Source: “Indonesian Agricultural Census 1973, 1983, 1993” (Central Bureau of Statistics).

Table 3. Comparative Accomplishments of Land Reform, by Political Regime

Source: Calculated by Erpan Faryadi from Utrecht (1969) and the Indonesian Government Report at ICARRD (2006

controlled by just 16% of rural inhabitants.
The summary of distribution of agricultural
land in Indonesia, during 1973 until 1993
(20 years) can be seen in Table 2.
Issues Affecting Extreme Poverty
The Abandonment of the Agrarian
Reform Agenda by the New Order Regime
(1966 to 1998)
The Old Order era (1962-1966) and
the New Order Regime (1966-1998) oper-
ated under the same legal framework
for implementing agrarian reform. But
while the former was able to make some
progress in redistributing land (as Table 3
will show)--even though it was ill-matched
against anti-reform forces--agrarian reform
under the New Order Regime was an utter
failure, in all respects—economic,
political, and social—because it was
reduced by Suharto to land administration

Asia Pacific Peoples’ Tribunal on ADB 35

 Testimonies
that benefited elite interests.
Landlord opposition was the major
stumbling block to the implementation
of agrarian reform during the Old Order
Era. The other constraints were lack of
political support for the program; weak
land administration systems; policy flaws;
lack of funding; and the unavailability of
agricultural lands for distribution.
In 1966, the anti-reform forces
wrested power from then President
Sukarno, and took over leadership of what
was to become the New Order Regime.
The agrarian reform program was revoked,
and the recipients of land under the Old
Order, and who were identified with the
Indonesia Peasant Front (BTI)—a left-lean-
ing peasant organization—became the
targets of attack by the military. In fact,
the land grabbing campaign launched by
the military was facilitated by records of
where land had been distributed, and to
which families.
One by one, the New Order regime re-
voked agrarian reform regulations. In 1970
it abolished the Land Reform Court, and
disbanded the Land Reform Committee.
However, neither regime ever at-
tempted to repeal or amend the Basic
Agrarian Law of 1960, whose provisions
are, on their face, quite progressive,
because their leaders knew that it would
trigger mass protests.
Dr. Sadjarwo, Minister of Agrarian
Affairs of Indonesia, has identified the fol-
lowing stumbling blocks in implementing
agrarian reform in Indonesia:
• The ineffectiveness of land administra-
tion made it difficult to determine how
36 Asia Pacific Peoples’ Tribunal on ADB
Agriculture
much land was available for distribution
under the agrarian reform program. This
opened up opportunities for many
deviations—wittingly or not;
• The public has not fully appreciated the
need for agrarian reform to complete the
country’s “revolution” for poverty eradi-
cation. Agrarian reform is blamed on any
pretext;
• Land reform committee members have
shown little interest in agrarian reform,
either because they are otherwise
preoccupied or because it goes against
their self-interest. This negligence on the
part of Committee members has been
blamed for the tampering of land
registration records, such that names of
registrants have been deleted from the
land lists, or addresses of registrants are
mixed up;
• Peasant mass organizations that are
supposed to provide support and oversight
are not sufficiently represented in land
reform committees at the regional level;
• The agrarian reform lobby is still not
strong enough to withstand the
psychological and economic pressure that
landlords can bring to bear on them;
• The Committee’s work of defining
priorities is hampered by the sheer num-
ber of impermanent tillers and changes in
government administration.
Plantations as the Colonialists’ Continuing
Curse on Indonesia
The operation of plantations
expanded rapidly and broadly under Dutch
colonial rule. During the revolution that
led to Indonesia’s independence in 1945,
Indonesian peasants took over control of
plantation areas. But following
negotiations between the Dutch and
Testimonies
Indonesian leaders, which resulted in the
transfer of power to the new republic, the
Dutch regained control of the plantations.
The reinstatement of the Dutch did not
last long, however, because of popular
outcry. All Dutch assets were seized by the
Government, including the plantations.
From 1966 to 1998—a period referred
to as the New Order Regime—the Army
was in control of the plantations. When
Suharto was forced to step down in 1998,
the policy in regard to running the
plantations remained unchanged.
However, in May 2003, during the National
Conference of Natural Resources
Management held in Jakarta, then
President Wahid made the uncharacteris-
tic declaration that a number of plantation
companies were guilty of grabbing land
from peasants. He demanded the return
of the lands to their former owners, as
well as the restructuring of the plantation
company. Unfortunately, Wahid met with
formidable opposition from plantation
owners, and the reforms he proposed
were never implemented.
The latest incarnation of the
plantation is what is euphemistically
referred to in Indonesia as the
“partnership model.” This is nothing more
than contract farming. During the
administration of Suharto, this model was
Table 4. Distribution, Control and Ownership of Plantation Lands, 2000
Source: The National Land Agency (BPN), Republic of Indonesia (2000).
Asia Pacific Peoples’ Tribunal on ADB
Agriculture
adopted in the World Bank (WB) funded
Nucleus Estate and Small Holder Scheme
(NES) Project, which aimed to attract
foreign investments in plantation compa-
nies in the country.
In such a “partnership model,” small
holders are hired by big corporations to
grow a specific crop that is designated in
a contract agreement. The company buys
the crop, provides some technical assis-
tance, credit, etc., and takes charge of the
processing and marketing.
The “partnership model” was
intended to defuse the tension between
the plantation companies and the
peasants, and thereby forestall peasant
resistance, by giving peasants the op-
portunity to get involved in the running
of plantations. The model was also a sop
to what the Government regarded as
“troublesome nationalists,” who remained
wary of foreign interests in Indonesia. In
truth, however, the model benefited only
the plantation owners and their foreign
investors.
Poverty enclaves that could be found
near Indonesia’s plantation areas show
that this legacy from the country’s colonial
past has done little to improve the
conditions of the poor.
37
 Testimonies
Table 5. Comparison of deforestation rate in different regions in Indonesia
Source: GOI and FAO, 1990, cited in Hira Jhamtani (2001), page 123; total calculations made by author.
Table 4 shows how much land is con-
trolled by plantation concession holders
and long-term lease holders. In
December 2000, 1,887 individuals held
such concessions covering 3,358,072
hectares, or an average of 1,780 hectares
of plantation lands each.
The expansion of plantations
areas has resulted in the rapid conversion
of forest lands. In 1996, the Government
allocated 9.13 million hectares of forest
lands in Kalimantan, Sulawesi, and West
Papua for the expansion of big palm oil
plantations. In March 1999, some 8.55
million hectares of forest lands were
earmarked for conversion into palm oil
and rubber plantations; of these, 4.6
million hectares have already been con-
verted. The biggest land conversions have
taken place in Riau Province, in Sumatra,
where 1.53 million hectares of forest lands
have been cleared to make way for planta-
tions.
Indiscriminate Awarding of Forest and
Timber Concessions
The rate of deforestation in Indonesia
38
Agriculture
for the period 2000-2005 was the fastest
in the world. During each of these years,
around 1.871 million hectares of forests
(or the equivalent of 300 football fields)
were lost EVERY HOUR! Table 5
outlines the rate of deforestation in
different regions in Indonesia.
This is largely attributed to the
exploitative practices of holders of forest
concession rights. It could be said that the
forestry sector has been offered up to the
big conglomerates that hold forest
concession rights, and to international
institutions to which the Government is
indebted. One timber company (Barito
Pacific Group) controls over 6 million
hectares—an area that is as wide as two
sizes of Great Britain country.
The Basic Forestry Law (Law No. 5)
of 1967 facilitated large-scale investments
in the forestry sector. Upon this law tak-
ing effect, the number of applications for
timber concession permits skyrocketed. By
1970, 64 companies had received forest
concessions covering some 8 million hect-
ares. From 1967 to 1980, 519 companies
were given forest concessions covering
Asia Pacific Peoples’ Tribunal on ADB
Testimonies
53 million hectares. As of June 1998, 651
companies had been granted forest con-
cessions covering 69.4 million hectares.
As a result of the Basic Forestry Law
of 1967 and Government Regulation No.
21 of 1970, all commercial forestry has
become the preserve of private investors
holding forest concessions. Communi-
ties that live in or around forest areas are
prohibited from cutting timber within
concession areas, and could do so only if
they have a permit from the
concessionaire. Conflicts between
communities and forest concession
holders have erupted.
Mining on Indigenous Peoples’ Lands
Article 33 of the 1945 Constitution
of Indonesia grants to the State exclusive
rights to the country’s mineral resources.
Law No. 11 of 1967, also called the Law on
Mining, provides that all mineral deposits
are national assets which are under State
control. These two laws have given the
State blanket authority to conduct its own
mining operations, or to assign the task to
mining concessions.
PT Freeport is a large mining company
based in the US that is mining for gold in
Irian Jaya. Freeport has been the subject
of protest actions because of the injurious
effects of its operations on i
ndigenous communities in Irian Jaya
(Papua) since 1967.
Freeport McMoran (US) and
Rio Tinto (UK and Australia) are expand-
ing their mining operations in to Lorentz
National Park, a mangrove forest, and
other lowland forest areas. Freeport is
licensed to mine an area of 2.6 million
hectares, which encroach on the lands of
Asia Pacific Peoples’ Tribunal on ADB
Agriculture
the Amungme, Ekari, and Komoro peoples.
The Amungme have filed a suit in a US
court demanding compensation for their
lands being taken away.
Actors Promoting Debts and Large-Scale
Land Acquisitions
Government
“In Indonesia’s history, no govern-
ment has succeeded in undertaking land
reform.”—Ahmad Erani, Indonesian
economist
Infrastructure development is
President Yudhoyono’s paramount
concern. The Infrastructure Summit
staged by his Government in January 2005
was indicative of Yudhoyono’s vision of
Indonesia’s future. Over 600 infrastructure
conglomerates and local enterpreneurs
participated in the summit. Yudhoyono
hoped to get commitments from the
private sector to fund two-thirds of the
country’s investment needs (or at least
USD 80 billion). The sectors identified as
key to Indonesia’s future development
were power, water and sanitation, oil
and gas facilities, information technology,
transport and logistics (highways, ports,
and airports). In support of Yudhoyono’s
infrastructure development plans, he
passed Presidential Regulation (Peraturan
Presiden or Perpres) No. 36 of 2005 to
relax regulations concerning land leases
and concessions. This provoked a howl
of protest and accusations that the law
would favor only the investors. In the
face of widespread criticism of this law,
Yudhoyono was forced to back down and
to cancel projects that were contingent on
flexible rules in regard to land leases.
Yudhoyono’s policies have not
39
 Testimonies
departed from those of Suharto. Both
leaders adhered to market oriented
development and liberalization policies.
Yudhoyono’s economic priorities are
reflected in his Government’s agrarian and
agricultural policies, namely the Revitaliza-
tion of Agriculture, Fisheries and Forestry
(RPPK) policies. These aim to revive the
agriculture, forestry, and fisheries sectors,
and thereby promote the recovery of the
national economy.
The RPPK outlines a number of poli-
cies, under a general strategy to revitalize
the agriculture, fisheries, and forestry sec-
tors, as follows:
• Reduction of poverty and unemploy-
ment, along with increasing the economic
scale of rural sector activities, particularly
through agrarian-oriented land manage-
ment and land-use planning; facilitation of
rural employment opportunities outside
of agriculture, including the development
of rural agro-industries; diversification
of rural sector products; development of
infrastructure; and developing the institu-
tions of farmers, fishers and agro-foresters
along with fulfilling their basic rights;
• Increasing the competitiveness,
productivity, value-added and
independence of production and
distribution in the sectors, primarily
through better agricultural practices;
developing new activities and multi-
products; increasing access to services,
and reducing or removing obstacles and
high economic costs to productive
activities; and protecting work activities
against unfair competition;
• A sustainable approach to use and
protection of natural resources, primarily
through conservation management and
an agrarian approach to land management
40 Asia Pacific Peoples’ Tribunal on ADB
Agriculture
and use-planning; along with encouraging
the development of activities, technology,
and institutions which are environmentally
friendly; and strengthening the rule of law.
The RPPK document is expected to be a
framework for the long-term—i.e., for the
next 20 years—but would be evaluated
every six months and renewed annu-
ally. A Committee on Revitalization of
Agriculture, Fisheries, and Forestry would
be created, and would be chaired by the
Minister for Economic Affairs. The Minis-
ters for Agriculture, Maritime and Fishing,
and Forestry would act as vice-chairs, and
members from other ministers, governors,
the Indonesian chamber of commerce,
and others, would be called on to partici-
pate as needed.
Multilateral Development Agencies and
Financial Institutions
Observers in Indonesia have noted the
increasing involvement of
multilateral development agencies (the
World Bank Group) and international
financial institutions (the International
Monetary Fund) in integrating free trade
and the allocation of agrarian resources.
This is exemplified by the process and
outcome of the Land Administration
Project (LAP). The LAP is a huge
undertaking of the Government of
Indonesia (represented by the National
Land Agency, Bappenas or the National
Planning Agency, and the Ministry for
Economic Affairs), the World Bank, and
Australian Aid (AusAid). For the first phase
of LAP (1995-2000), the World Bank gave
a loan to the Government of Indonesia in
the amount of USD 80 million. The project
would run for 25 years (1995-2020).
The LAP seeks to establish a “land
market” and to make the administration
Testimonies
of land more effective and efficient in
order to make land more readily available
for activities promoting capital growth in
the country. In support of this project, the
Government repealed the law on land
registration (Government Regulation No.
10 of 1961)—regarded as one of the
cornerstones of agrarian reform
implementation—and replaced it with a
watered down version (Government
Regulation No. 24 of 1997).
Henceforth, the supply of land in Indo-
nesia would be determined by the market.
This is expected to exacerbate the already
unequal distribution and control of land in
the country.
Moreover, big infrastructure
projects funded by the WB and the Asian
Development Bank (ADB), for example,
have resulted in violations of people’s and
peasant rights. The Kedung Ombo Dam
project in the Central Java province
(funded by the WB during Suharto’s
administration), the planned Jatigede Dam
project in Sumedang, West Java (to be
funded by China), and the Nipah Dam
project—which is one of biggest
infrastructure projects implemented in the
country, are a few of those projects which
are much reviled among the affected
communities.
The late President Suharto
welcomed foreign economic assistance.
The Suharto regime of New Order firmly
allied itself with the Western Bloc
during the Cold War era. As a part of the
containment policy of the Western Bloc,
Indonesia was rewarded with a massive
aid package. The design of the economic
architecture of Indonesia was made
collectively by the countries which then
Asia Pacific Peoples’ Tribunal on ADB
Agriculture
formed the Inter Governmental Group
on Indonesia (IGGI). This consortium was
formed by the European countries, the
United States, Japan, and multilateral
organizations such as the World Bank,
Asian Development Bank (ADB), that every
year gave the loans to Indonesia. The IGGI
was formed in 1967, just one year after
Suharto took the power in Indonesia.
The relationship between
Suharto’s regime and the donors’
community was so close that the state
annual budget was decided after the
IGGI meetings. President Suharto and his
economic team had very close relation-
ship with the donors, that the IMF and
the World Bank could easily orchestrate
the policy prescriptions and changes in
Indonesia.
The relationship was based on mutu-
alism. The donors were free and easy to
determine what they wished, while
Suharto and his cronies were free for
corruption without any objection of the
donors. The report from the World Bank
in 1997 and the testimony of Prof. Jef-
frey Winters in the US Senate exposed
that up to more than 30% of the foreign
aid, including the World Bank’s money,
were misused by Suharto and Indonesian
bureaucracy. The collapse of the economy
of Indonesia in 1997/1998 was partially
caused by the bad governance. Although
the program loans were aimed to install
better governance in the country, it turned
out to be creating and maintaining bad
governance.
Indonesia was the haven for the
donor agencies and their staff. BAPPENAS
– the National Planning Board – was aware
of this in later decade. On the side of the
41
 Testimonies
government of Indonesia, the ministries
preferred foreign loans rather than using
domestic sources since the loans will give
higher budget to the ministries. The more
the foreign aid, the higher the matching
funds allocated to the ministries, and the
more income they can earn. On the other
hand the staffs of the donor agencies try
to increase loans for Indonesia since they
will get more overhead costs. The more
the loans drawn by the government of
Indonesia, the more secure will their jobs
and their lifestyles be in the poor country
of Indonesia.
The BAPPENAS study suspected that
the foreign aid (loans, particularly) were
used more for project seeking that tends
to be rent-seeking of the government
staff and the staff of the donor agencies
rather than for promoting development in
Indonesia. In other words, Indonesia was
a victim of the unholy alliance of the Indo-
nesian corrupt bureaucrats and the “self-
seeking” staff of the donor agencies. The
increasing numbers of the poor people
living in misery and destitution have to pay
for the impacts of this alliance.
In its efforts to maintain Indonesia’s
economic growth, the multilateral or-
ganizations (especially the World Bank
together with the ADB) have urged the
government of Indonesia to deregulate
all its laws and implementing regulations
which may limit investment. The Land Ad-
ministration Project (LAP) is part this larger
scheme of deregulation. The existing
land acquisition process for large-capital
investment is perceived as inefficient and
cumbersome. The “new” orientation for
land policies is to develop an efficient land
market which is profoundly altering the
New Order’s policy for land acquisition.
42 Asia Pacific Peoples’ Tribunal on ADB
Agriculture
This theme has also become the current
land policy under President Yudhoyono of
Indonesia (2004-2009).
The Land Administration Project (LAP)
is USD 140.1 million project which is a co-
funded by the Indonesian government, the
World Bank, AusAid, and implemented by
the BPN (National Land Agency) in the
period of 1995-2000. According to the
World Bank’s “Staff Appraisal Report:
Indonesia Land Administration Project,
1994”, financing of this project constitutes
funding from Indonesia’s national budget
(USD 44.9 million or 32% of total project
budget), a USD 80 million loan from the
World Bank (57%), and a USD 15.2 million
(11%) grant from AusAid. This LAP project
is an initial phase of a 25 year scheme
called Land Resource Management and
Planning, where the ADB (Asian Develop-
ment Bank) later involved in 2007 through
the “Enhancing the Legal and
Administrative Framework for Land
Project”.
In the perspective of multilateral
organizations like ADB and World Bank,
the agenda to improve land resource
management in Indonesia is based on two
major concerns. The first is land acquisi-
tion, which is delaying several high-priority
urban infrastructure and rural develop-
ment projects and generating some social
tensions. These have raised concerns
within the government about the current
land acquisition process and land policy. A
second set of issues deals with spatial or
land use planning, since conflicting
demands for land from forestry,
agriculture, urban and industry, and
mining sectors have not always been dealt
with effectively under the current land
policy framework.
Testimonies
http://www.flickr.com/photos/roodee/3315491258/
Licensed under CC BY 2.0
DanChurchAid
These two concerns constitute the
main hindrance to the implementation of
projects funded by loans from the World
Bank and the Asian Development Bank
(ADB). The study (Special Study: a Review
of Post-Evaluation Findings in Indonesia,
November 1988, Doc.SS-6) on post-evalu-
ation findings observed that “Experience
shows that the implementation of a large
number of Bank-financed and World Bank-
financed projects across the sectors was
seriously affected by two major common
factors, namely land acquisition difficul-
ties…”
Conclusions
In the sixty years since Indonesia’s
independence, the agricultural sector
is known to have once been the “prima
donna”, or a leading sector in the economy
which contributed to nearly 70 percent of
GNP and job creation. However, the lack of
a long-term vision for national economic
development has weakened agriculture
Asia Pacific Peoples’ Tribunal on ADB
Agriculture
and has limited its role in the national
economy to that of providing for other
sectors (i.e., adjusting or following sector).
In the last decade, the majority of agri-
cultural, plantation, livestock and fisheries
sub-sectors have experienced a decline in
performance, and farmers are experienc-
ing serious poverty. Meanwhile, reliance
on imports of food and other agricultural
projects has increased sharply. Further-
more, Indonesia has become the largest
recipient of food in the world,
following the economic crisis period in
1998.
At the start of the 19th century,
Indonesia was the second largest exporter
of sugar in the world (behind Cuba); now
this is reversed, as it is the second largest
importer of sugar in the world. Whereas
there was self-sufficiency in rice
production in the past, now it must be
imported. The same is happening with
43
 Testimonies
other key food products, such as corn and
beans, along with horticultural products,
such as fruits, and tree crops such as
bananas, orange, durian, and mangoes.
Once, we could fulfill these needs
domestically, and still be able to export;
now, imported products are flooding the
markets, not only for consumption in
hotels, restaurants and supermarkets, but
also for everyday household needs. The
dependence on imported horticultural
products is increasing, along with growth
in the international supermarket chains in
large cities since 1990. In 2002, the value
of these imports reached USD 217 million
for fruits, USD 111 million for vegetables,
and around USD 0,824 million for
flowering plants.
Among plantation crops, there has
been a decrease in export market share
for almost all kinds of tea, except for green
tea, during the period 1997 to 2001. Bleak
conditions and diminished market share
are also being faced by other commodi-
dites, such as coffee, because of aging
crops, lack of attention given to the crops,
and decreasing productivity.
Why is this the case? One reason is
the numerous government policies which
are not favorable to farmers. For example:
policies which set an unattractive price for
purchasing foodstock (i.e., rice), the
continuation of rice imports, budget
allocations to agriculture at the bare
minimum, guarantees of gas supply to a
fertilizer industry which is losing out to ex-
ports, and the forcible removal of farmers
from their lands to make way for commer-
cial interests along with farmers’ losses
in disputes over water and other natural
resources.
44 Asia Pacific Peoples’ Tribunal on ADB
Agriculture
Rice self-sufficiency and food
sovereignty are critical, not only because
rice is a strategic commodity (not to
mention a politically important one), but
also because it concerns the national
interest, as a country with such a large
population which depends on rice as its
basic food. The interconnection between
self-sufficiency, food sovereignty, and food
security can only be realized if the
interests of farmers are not neglected.
Other macroeconomic policies also
were not friendly to agriculture. The scan-
dal over assistance to liquidity of the Bank
of Indonesia (BLBI scandal), which involved
high-ranking figures and other elites and
required Rp 600 trillion in banking reca-
pitulation, also victimized the agricultural
sector. International trade policies, down
to programs to strengthen the position of
exporters in agricultural products, were
even too discriminative. This policy inher-
ently weakened the bargaining position
of farmers at the local level as well as the
exchange value of agribusiness and the
agricultural sector as a whole.
The government also uses
violence to put down local resistance to
many state or corporate infrastructure
projects funded by multilateral financial
institutions, such as the ADB and the WB.
These infrastructure projects generally
infringe on the land rights of local
communities, particularly indigenous
peoples and peasants. Among the most
infamous infrastructure projects sup-
ported by the Government are the Kedung
Ombo dam project, in the Central Java
province (funded by the World Bank dur-
ing Suharto’s administration), irrigation
projects (funded by loans from ADB, such
as Tajum Irrigation Project as the first loan
Testimonies
from ADB to Indonesia and the first loan
for agricultural infrastructure), the Nipah
dam project (under Suharto administra-
tion), the planned Jatigede dam project in
Sumedang, in the West Java province (be-
ing funded by the Chinese government un-
der President Yudhoyono). Infrastructure
projects are Yudhoyono’s second priority
after the expansion of big-plantation areas
for bio-fuel energy.
Agriculture
implementation as well as the strategic
intervention most urgently needed in
Indonesia. From the beginning, peasant
protests and struggles have significantly
influenced the dynamics of Indonesian
people movements—even if many of them
had started out as a reaction to land
eviction brought about by the expansion
of capital in the rural areas, in particular,
and development activities in general.

The Indonesian peasant movement References:

is demanding an end to state violence See further Sri Hartati Samhadi, in daily news-
directed at their sector, and the release of paper Kompas, 16 August 2005, p.50.
peasant leaders who have been thrown in
The Directorate of Monitoring and Evaluation
prison on the basis of anti-peasant laws. of Development Funding, BAPPENAS, The Study
At the same time, the Indonesian peasant on the Strategy of Performance of Foreign Aid
movement rejects the plan of the current Implementation. Jakarta, 2004. www.bappe-
government to repeal the Basic Agrarian nas.go.id
Law of 1960 (UUPA) by another law. The
draft law intended to replace the UUPA See Indonesia Land Resource Management
strongly favors the interests of imperialism and Planning, World Bank Report No.9591 IND,
and big landowners. It totally changes the 1991.
spirit and intent of the UUPA to carry out
See Occasional Papers Number 10 (Asian
agrarian reform. Development Bank, July 1994). Sutanu Behuria,
Some Aspects of Land Administration in Indo-
As a key strategy, advocacy to promote nesia: Implication for Bank Operations.
the agenda of agrarian reform must be
undertaken, especially among the rural
poor people. Among the peasantry, the
development of a strong and democratic
peasant-based organization is urgently
needed. The movements involving land
occupation and land redistribution, which
have taken place in the last 10 years in In-
donesia show that the pursuit of genuine
land reform is the main agenda and his-
torical mandate of the Indonesian peasant
movement.

For these reasons, then the

development of a strong and demo-
cratic peasant-based organization is a
very important agenda in agrarian reform

Asia Pacific Peoples’ Tribunal on ADB 45

 Testimonies Agriculture
ADB Loan for Tree Crops Brings Misery to Farmers
Presented by Hari Pratono
Tree Crop Small-holder Sector Project (TCSSP), May 2009

Background and Summary

In April 2007, more than 100 farmers from the Bengkulu province in Su-
matra held a demonstration in front of the office of the Ministry of Finance in
Jakarta. They demanded the cancellation of the credit payment that the farmers
should pay as part of the Tree Crop Small-holder Sector Project (TCSSP) because
the project failed and it brought misery to the farmers.

The said project came from an ADB loan which was approved in
November 1992 and amounted to US$ 135 million. The objective of this project
is to alleviate poverty by improving the income and employment prospects of
the rubber and tea smallholders and landless rubber tappers in the project area
by increasing their production through the introduction of improved crop
varieties and cultivation practices. In other words, it intends to assist the
farmers to plant good quality rubber and tea trees. The project ended in 2001,
and the ADB had reported in its Project Completion Report for TCSSP (PCR: INO
22290) in July 2002 that the project was rated as successful.

However, contrary to what the ADB has reported, the research of an NGO
in one of the project areas, Bengkulu, the testimonies of the affected farmers,
and even the ADB’s own assessment document showed that the project failed
because the funds were highly corrupted, the seedlings that were provided
were bad seeds so they cannot make money from it, and at present, the farmers
cannot get their land certificates that were taken by the authorities as collateral.

Project Overview

The Tree Crop Smallholder Sector Project (TCSSP) began in 1992/1993 and
ended in March 2001. The total planned budget of the project is US$ 225 mil-
lion comprising of $135 million from an ADB loan and the remaining $90
million will come from the Government of Indonesia. The primary outputs of
the project is to establish and maintain (1) approximately 75,000 hectares (ha)
of rubber plantations in South, East, and Central Kalimantan, Aceh and Beng-
kulu; and (2) approximately 20,000 hectares of tea plantations in West Java. A
total of 23 sub-projects will be develop, each covering an area up to 5,000 ha. It
also includes two pilot projects, one, to establish 10 small rubber tree nurseries
in Aceh, Bengkulu, South Kalimantan, East Kalimantan and Central Kalimantan,

46 Asia Pacific Peoples’ Tribunal on ADB

Testimonies
http://www.flickr.com/photos/rachdian/3874365534/
Licensed Under CC by 2.0
and two, to establish approximately 2,000
ha of drought-resistant tree crops in the
relatively dry provinces of West Nusa
Tenggara (NTB) and East Nusa
Tenggara (NTT). The executing agency of
this project is the Ministry of
Agriculture (MOA).
The Project has three components:
(i) Part A: Rubber and Tea Plantations.
This part involves: (a) land development,
re-planting, and the planting of new
rubber and tea trees; (b) construction of
roads and bridges, and upgrading/
construction of office buildings for certain
project management units (PMUs);
(c) provision of agro-chemicals and field
maintenance costs to participating farmers
through suitable credit arrangements; and
(d) provision of planting materials to the
participating farmers.
(ii) Part B: Pilot Project. This part
involves: (a) land clearing and construc-
tion of access roads and internal roads; (b)
perimeter surveys on the land that will be
used; (c) provision of planting materials
and agro-chemicals; and (d) provision of
extension, field maintenance, and project
management services.
Asia Pacific Peoples’ Tribunal on ADB
Agriculture
(iii) Part C: Support Services. This part
involves: (a) the provision of local training
and extension services to the participating
farmers and staff of the Directorate
General of Estates (DGE) and other
Government agencies responsible for
carrying out the Project; (b) supporting the
project administration and management;
(c) providing vehicles and equipment;
(d) inspection services, monitoring and
evaluation; and (e) consulting services.
To implement the project, the farm-
ers should have at least 1 ha of land. The
assistance is in the form of 500 seedlings,
land preparation cost, land certification,
and a loan for fertilizer and production
facilities. The credit has to be repaid in the
fifth year. For five years, the cost in main-
taining their trees will be reimbursed to
the farmers. This loan and credit scheme
will be administered by the respective
Project Management Units (PMU). Collat-
eral is not required, although the farmers
who have a land certificate (primarily
those in the transmigration areas) were
required to give their land certificate to
the PMU. In the Loan Agreement, the
interest rate of the credit to the farmers
was intended to be less than the average
rate of the Indonesian Central Bank, which
47
 Testimonies
is 16%. However, in practice, the interest
rate was fixed at 16%.
Debt and Repayment
As stated above, the appraisal of the
project cost is $ 225 million with a 25
years maturity date and 7 years grace
period. The ADB loan is $135 million, $73
million in foreign exchange and $63 million
in local currency. At the completion, the
total cost was $182.2 million; 106.4 million
of it was financed by the ADB.
An amount of $28.6 million (21%) was
cancelled from the loan during the
implementation.
The actual project cost is lower than
the dollar equivalent appraisal primarily
because of the local cost savings from the
depreciation of the rupiah against the dol-
lar. During the appraisal, the exchange rate
was Rp 2,000 to $1.00 while during the
implementation, the exchange rate rose
to over Rp12, 000 to $1.00 dollar. Aside
from this, the unit cost for civil works were
lower during the appraisal; replanting of
existing rubber and tea plantations did
not take place because MOA preferred to
open new areas because the preparation
is cheaper, only grasses and scrub trees
had to be cleared. Low cost also resulted
to lower wages for the farm labourers.
Project gone bad: Reason for illegitimacy
The project completion report (PCR)
for TCSSP reported that the project
achieved all of its development objectives
and met all of its physical targets, which is,
to alleviate poverty by assisting farmers to
plant good quality rubber and tea trees.
However, a study that was conducted in
one of the project areas, in the province of
Bengkulu, Sumatra, indicated otherwise,
48 Asia Pacific Peoples’ Tribunal on ADB
Agriculture
poverty in that area has not been
alleviated and the project had failed.
Another study in another project site,
Kalimantan, and one of ADB’s own
document also showed that the project is
not as successful as the PCR has claimed.
In Bengkulu, the initial target was to
plant 5,000 Ha of rubber in South Beng-
kulu. However, it expanded to 12,850 Ha
in North Bengkulu to compensate the area
reduction in South Kalimantan. At the
beginning of the project, the farmers were
enthusiastic to participate in this project
with the hope of getting a better income.
Many farmers in Bengkulu enrolled in the
project. But to the farmers’ disappoint-
ment, ten years later, during harvest time,
the trees only produce very little rubber.
According to the farmers, this was due to
the bad seedlings. They could only harvest
50 kg (total) of rubber per week at the
maximum and they sell it for Rp 2,000 to
Rp 2,400 per kg. (US$ 1 = Rp 9,000 ap-
proximately). Subsequently, most of the
farmers cannot pay their debts. Only a
very little amount of the debts were
collected (see Table 1).
While a case study on the project
in East Kalimantan also experienced a
problem on the seedlings so the rubber
production was not satisfactory, after
looking at the land quality, planting
season, and maintenance activities, the
project officers concluded that the prob-
lem might not be the seedlings. It was also
discovered that the seedling contractor
was using a grafting technique instead of
the correct method of inoculation.
As such, the study report concluded
that the TCSSP was designed and imple-
mented in the conventional top-down
Testimonies Agriculture
Table 1 Farmers’ Credit Payment Collected in Bengkulu

Source: P2BPR Bengkulu 2002 *) Excluding 16% interest

manner. The people did not participate
in the planning or monitoring, lack of
trust prevailed, and there was no effort to
control dishonest business practices. The
farmers were simply technology users;
there was no systematic improvement in
their knowledge on plantations.
As a result, the PCR reported that the
due debt (principal loan plus interests) and
the amount collected.
Because of the debt burden that they
carry and the other implications that go
with it, in December 2001, the farmers in
Bengkulu filed a complaint to the
Government of Indonesia (Plantation
Service). They asked the government and

Table 2. Due Debt Payments and Amount Collected (in millions of Rp.) – as of Dec 31, 2001

Source: ADB PCR: INO 22290

debt collections were very low in all of the
project areas. The approximate monthly
payment of each farmer is Rp. 60,000 – Rp
80,000 for rubber, and Rp 40,000 – Rp
50,000 for tea. Meanwhile, the estimated
appraisal of the monthly payments is
about Rp 111,200 for rubber and
Rp 39,250 for tea. Table 2 shows the total
the ADB to conduct a field investigation
and solve their problem. Both parties
obliged and sent their teams to review and
conduct a survey on the area. The re-
classification team that was formed by the
Governor of Bengkulu on March 12, 2003
concluded that 80% of the seedlings did
not match the standard seeds as stated

Asia Pacific Peoples’ Tribunal on ADB 49

 Testimonies
in the agreement. The review was then
reported in ADB document “Aide Memoir
of ADB Follow-up Review Mission for Loan
1118-INO: Tree Crop Smallholders Sector
Project”.
However, up to now, the farmers have
not yet received any compensation for
the re-classification that was promised
to them. Many of the farmers, particu-
larly the farmers from the transmigration
areas, could not get the land certificates
that they gave to the PMUs as collateral.
Consequently, more than 90% of farm-
ers became labourers in private Rubber
Plantation Companies (PT Air Muring, PT.
Agrisinal, PT Agromuko etc).
Agriculture
1986 Vienna Convention on Corruption
and Article 48 of the 1986 Vienna
Convention because of the error in the
document of the agreement. The parties
in the agreement knew that the project
failed but it was still reported as success-
ful. Both parties have ignored the fact that
the project has made the people live in
deep destitution.
Source of this fact sheet taken from:
ADB’s website
INFID working paper on Illegitimate Debt

Moreover, the case that the

farmers filed in the Court of First Instance
in Bengkulu proves that some of the
project funds were corrupted by the
authorities. The court’s verdict declared
that the corruption from the TCSSP
wherein the funds for drainage and road
building were corrupted has inflicted a loss
to the country and it had also caused a
deficit to 3,470 farmers by corrupting the
procurement of the seedlings, reducing
the fertilizers, purchasing equipment that
is below standard, and for withholding the
land certificates of the TCSSP participants.

The project basically failed, and has

brought misery to the farmers, who
have placed their future livelihood in the
plantation. The project failed because of
the corruption of the Indonesian govern-
ment officials and the sub-contractors.
Nonetheless, although it has been proven
in the court that corruption occurred in
the project, the project was still continued
and the ADB report even noted that it was
successful. This is against Article 50 of the

50 Asia Pacific Peoples’ Tribunal on ADB

Testimonies Women
Lembar Fakta :
Impact of ADB to women migrants in Indonesia
Presented by Retno Diwi
Association of Migrant Workers in Jakarta (ATKI Jakarta),
May 2009

Introduction
on

Throughout the years, ADB as well as the World Bank have done several studies on
migrant labor remittance.The study is based on the assumption about remittance po-
tency sent by migrant labor as one of potential sources for development. As a result, the
policies related to migrant labor tend to make the economic aspects related to remit-
tance as the top priority, though the real problem which requires urgent intervention is
the protection and rights acknowledgement.

Economic Importance behind Labor Migration

Labor migration becomes one of solutions to fulfill the requirement of low-cost labor
and to anticipate unemployment. Migration shall no longer be viewed as short term
solution to overcome economic problems, but must be viewed as part of strategy to
overcome economics crisis (both in overcoming unemployment and as the resource of
stock-exchange).

General Assumption of ADB, Other Donor Institution and Multilateral Banks on

Migrant Labor Remittance

• Remittances have become a major source of external development finance

• Remittances can accelerate private sector development
• Remittances are believed to reduce poverty, as it is the poor who migrate and send
back remittances.
• Safe migration can reduce the risk which happen frequently in the process of migration
and can produce maximum benefit for development.

ADB Intervention on Labor Migration

• PHI – Enhancing efficiency of overseas workers remittances (TA No. 37590), approved
in 2003, finished
• REG – Southeast Asia workers remittance study (TA No. 38233), exp. approval 10/2004
• PHI – Remittance and migration (TA No. 38283), expected approval 2005
• REG – Promoting safe migration for women and prevention of trafficking of girls and
women in the GMS (TA No. 37667), expected approval 2004

Asia Pacific Peoples’ Tribunal on ADB 51

 Testimonies Women
Several Facts on Labor Migration and Remittance Policy
• Labor migration is a process which has been done for long time. However, the
phenomenon of labor migration has risen dramatically since the 1970s.
• Generally, labor migration from Indonesian is done by women who come from coun-
tryside and work in low-skill, informal and harsh sectors.

The majority of Indonesian migrant labor work in the area are as follows:
o Asian is Pacific 3,083,645
o Mid-East and African 2,513,233
o North America 18,338
o Europe 8,881

Total on 2007 5,624,097

• Based on studies by international financial institutions such as the World Bank and
ADB the remittance sent by labor migrant is showing increase, year by year.

52 Asia Pacific Peoples’ Tribunal on ADB

Testimonies Women

• Remittance sent by Indonesian migrant labor to Indonesia is estimated as described in

the scheme below:

• The potential of remittances sent by migrant labor produces global initiative in the
form of Global Forum on Migration and Development (GFMD) which is formally ad-
dressed to look for useful interrelation between migration and development.

How does the Indonesia government protect the income of foreign exchange through
remittance receiving?

• The Indonesia government applies the policy on placement cost structure as a mode
to protect the foreign exchange income received from remittances of migrant labor. The
policies are as follows:

Asia Pacific Peoples’ Tribunal on ADB 53

 Testimonies Women
Law dan Official Cost Wage Reduction
Destination dan Real Cost Total
Country Oblige to Pay by
BMI
a. No. 158/D2PTKLN/ 12,944,500 15 bulan, Rp 20-30
XII/2004 (Taiwan) juta.
b. No. 650/D2PTKLN/ 3,865,000 3 bulan; Rp 5 juta.
XII/2004 (West
Malaysia)
c. No. 651/D2PTKLN/ 2,500,000 3 bulan; Rp 5 juta.
XII/2004 (East
Malaysia)
d. No. 652/D2PTKLN/ 5,310,000 7 bulan; Rp 15
XII/2004 (Singa- juta.
pore)
e. No. 653/D2PTKLN/ 9,132,000 7 bulan; Rp 21
XII/2004 (Hong juta.
Kong)
f. No. 654/D2PTKLN/ 4,295,000 3 bulan; Rp 6 juta.
XII/2004 (Brunai,
informal)
g. No. 655/D2PTKLN/ 4,470,000 2 bulan; Rp 6 juta.
XII/2004 (Brunai,
formal)
h. No. 659/D2PTKLN/ 7,275,000 2 bulan; Rp 3 juta.
XII/2004 (Bahrain)
i. No. 767/D2PT- 7,275,400 2 bulan; Rp 3 juta.
KLN/XII/2004 (Uni
Emirates)
j. No. 770/D2PTKLN/ 7,275,000 2 bulan; Rp 3 juta.
XII/2004 (Oman)
k. No. 771/D2PTKLN/ 7,275,000 2 bulan; Rp 3 juta.
XII/2004 (Qatar)
l. No. 443/MEN/ 8,830,000 n.a
TKLN VII/2005
(South Korea)
m. Saudi Arabia tidak ada data 3 bulan; Rp 4,5
juta.

54 Asia Pacific Peoples’ Tribunal on ADB

Testimonies
www.arkibongbayan.org
The Impacts of Migration Policy
in National and Global toward
Migrant Labor
• Policy on placement cost structure
makes Indonesian migrant labor
experience an overcharging in the form of
(1) wage reduction; and
(2) debt-bondedness.
• Policy of ‘safe and secure migration’
promoted by ADB and the World Bank
produces ‘one door migration’ policy
through BNP2TKI and PJTKI.
o Violate migrant labor rights to be
able to do direct hiring with employer.
o Generate discrimination to migrant
labor such as through special terminal for
Indonesian Migrant Labor (formerly ter-
minal III, now ‘Indonesian Migrant Labor
Registration Building’ or usually called
“terminal IV”)
o Produce the happening of
Asia Pacific Peoples’ Tribunal on ADB
Women
illegal migrant labor, especially for
migrant labors who have job experience
and refuse to follow the corrupt migration
procedure of Indonesia government.
• GFMD as global initiative supported by
multilateral finance institutions (The World
Bank and ADB) has given legitimacy for
labor commerce which is getting more
liberal in global scale.
• Focus on problems in remittances has
sidelined the fundamental problems caus-
ing labor migration, i.e. chronic poverty in
sending countries.
Demand the ADB, the World Bank, and
the government
1. Stop the promotion of labor export
policy.
2. Uphold migrant labor rights by
rescinding policy of high placement cost.
3. Implement labor migration policies that
promote and protect migrant labor and
human rights.
55
 Testimonies Indigenous People
The Cordillera Highland Agricultural Resource Management
Project (CHARM) and the Indigenous Peoples’ Policy
of the Asian Development Bank (ADB)
Presented by Jeanette Cawiding
Cordillera Peoples Alliance (CPA), May 2009

Strengths

The various evaluation reports conducted by the funders have judged the CHARM
project to be generally successful. All of its quantitative targets were met and most of
the immediate development objectives were seen to have been achieved. The project
received positive points for mobilization of target beneficiaries, relevance to government
and funders’ strategies, land tenure improvement, use of local knowledge and efficiency
in achieving its expected outcomes. Overall, the project had significant impacts in
promoting policy dialogue, partnership-building and introducing innovative approaches
to land tenure systems.

NGO and Beneficiary Mobilization

CHARM implemented a process-oriented approach, meaning that the project was

designed to mobilize the beneficiaries to participate in the planning,
implementation, monitoring and evaluation of the various project activities. A
noteworthy feature of CHARM is its effort to directly involve non-government
organizations, particularly in its community mobilization component. It contracted an
NGO consortium, the SUCCORED, to implement the participatory household and
community profiling activities, to draw up the BNRMP, to conduct social validation of
ongoing activities in the communities and to facilitate the process of community
mobilization.

Land Tenure Improvement

The project addressed the need of indigenous communities to secure their

ancestral land and domains through facilitating the issuance of various land tenure
instruments, specifically, the Certificate of Ancestral Domain Claims (CADC) issued by the
Department of Environment and Natural Resources (DENR) and the Certificate of Land
Ownership Agreement (CLOA) issued by the
Department of Agrarian Reform (DAR). When the Indigenous People’s Rights Act (IPRA)
came into force in 2001, the National Commission for Indigenous Peoples (NCIP) took
over the issuance of Certificates of Ancestral Domain Titles (CADT) and Certificates of
Ancestral Land Titles (CALT) over indigenous peoples’ areas.

In July 2002, the project helped the NCIP issue a CADT to the Bago Kankanaey Tribe
of Bakun municipality in Benguet province covering 29,500 ha of land. It was the first

56 Asia Pacific Peoples’ Tribunal on ADB

Testimonies Indigenous People
http://www.flickr.com/photos/ijames/747842/
Licensed under CC by 2.0
CADT to be issued in the Philippines under
the IPRA. In March 2004, the project
facilitated the issuance of another CADT to
the Kankana-ey Tribe of Kibungan munici-
pality, also in Benguet, covering an area
of 26,400 ha. At the end of the project,
issuance of two additional CADTs for the
Buguias and Masadiit areas were being
processed by the NCIP.
Use of Local knowledge
An accomplishment of CHARM noted
by IFAD is the use of local indigenous
knowledge. The project integrated the
lapat system - anindigenous system of
forest management practised by the
Tingguians in Abra - into its reforestation
activities and in the Ancestral Domain Sus-
tainable Development and Protection Plan
(ADSDPP) of the Masadiit Tribe. The
traditional system effectively regulates the
harvesting and utilization of forest prod-
ucts, thereby protecting natural resources.
In addition, the NCIP was processing
the Ancestral Domain Sustainable Devel-
opment and Protection Plans (ADSDPP)
for six other areas including Bucloc in Abra
Province; Bakun and Kibungan in
Benguet Province; and Sagada, Sabangan
and Tadian in Mountain Province. The
Asia Pacific Peoples’ Tribunal on ADB
formulation of ADSDPPs as a precursor to
CADT approval was not initially identified
as a target, but it became a significant
output in the promotion of indigenous
peoples’ concerns.
Inter-agency coordination
In relation to how the executing and
implementing agencies worked together
and how ADB managed the project,
CHARM was seen to be efficient as it
served to facilitate coordination among
the different government agencies
involved. The regular coordination activi-
ties provided by CHARM, particularly at
higher levels, became important forums
for integrated action by the agencies ex-
tending beyond the project scope
Formation of active partnerships and
harmonization of bureaucratic processes
led to improved processes of the govern-
ment, particularly in relation to
land-titling.
Weaknesses
Delayed and Weak NGO performance
Planning activities were initially de-
layed because of problems with
contracting the NGO consortium to do the
household and barangay profiles and
community mobilization. This delay
affected the identification, scheduling and
implementation of subsequent project
activities and reduced effectiveness of
planning and participation by the com-
munity. Consequently, the preparation of
BNRMP by communities, which was
facilitated by the NGOs, followed rather
than preceded the development of
detailed workplans. Projects in the
different components proceeded even
without the final BNRMP, making the
57
 Testimonies Indigenous People
http://www.flickr.com/photos/kitoy/2943087641/
Licensed under CC by 2.0
incorporation of community priorities
impossible.
Weak community participation
Participation of barangay members in
planning and implementation was gener-
ally passive rather than active, tending
to take the form of representation by
political leaders in government processes,
rather than broad-based community
development processes. Decision-making
remained in hands of leaders and imple-
menting agencies, and decisions were
communicated to barangay members for
validation only
Inappropriate Strategies
The appropriateness of CHARM’s
strategy to promote commercial agricul-
ture for the market is under question. This
orientation of CHARM fails to consider
the fact that many of its target indigenous
communities are areas of traditional
subsistence production. CHARM encour-
ages the cultivation of cash crops - high
yielding varieties of rice, vegetables, cut
flowers and fruits – for the market. This
undermines traditional subsistence farm-
ing methods, threatens the existence of
indigenous varieties, and puts communi-
ties at the mercy of market price
58 Asia Pacific Peoples’ Tribunal on ADB
fluctuations.
Question of Sustainability
Immediate benefits from rural infra-
structure were felt as a result of the
construction of community irrigation
systems and domestic water supply. Better
access to market through improved roads
and bridges led to greater transportation
of available products. However, sustain-
ability of these infrastructure projects was
seen as unlikely due to several factors.
Most communities rely on traditional
methods of contributing voluntary labor
and in-kind materials for a community
project according to need. Making regular
contributions of money to a maintenance
fund for sustainability is alien and poses
a problem for the people due to the seri-
ous lack of cash. Maintenance of roads, a
responsibility of the barangay, also suffers
from lack of funds. In addition, the Cordil-
lera is susceptible to typhoons that often
cause floods and damage to infrastructure
projects. These factors reduce sustainabil-
ity of infrastructures constructed by the
project.
There is also the factor of weak
peoples’ organizations that are unable,
unwilling or uncommitted to continue the
reforestation, agricultural or rural
financing projects started by CHARM.
Who benefits?
In the final analysis, it is a question
of who really benefited from the project.
Project evaluations show that CHARM
was able to reach 82 target communities.
However, internal targeting to reach the
poorest inhabitants of these villages was
not fully achieved. Those who benefited
most from farm-to-market roads were
Testimonies Indigenous People
mainly the families living by the roadsides,
who are relatively better off. Participation
in trainings was largely confined to local
elites. Some increase in incomes through
agricultural support and services benefited
higher income families.
Conclusion
From the weaknesses of the CHARM
project mentioned above, it is
apparent that the Bank’s IP policy
elements were not fully implemented.
In particular, community participation
and free prior informed consent of the
community was weak and lacking in the
implementation of specific projects. This
consequently led to a disparity between
what projects were implemented and the
community’s priority needs or aspirations.
There were also projects such as refor-
estation, micro-financing and agriculture
projects that were incompatible with the
communities’existing traditional practices.
For example, some reforestation projects
did not fit in with existing land use and for-
est practices of the people.
Promotion of cash crop production
and introduction of modern high yielding
varieties of crops undermined the prevail-
ing subsistence production in the commu-
nity and led to the extinction of traditional
varieties of rice. There were thus unex-
pected negative impacts and consequenc-
es, which were not properly mitigated, nor
compensated for.
In addition, the project did not equita-
bly benefit the target beneficiaries. Rather,
the poorest inhabitants received less ben-
efit as compared to the elite or relatively
well-off in the community and those living
Asia Pacific Peoples’ Tribunal on ADB
near the roads and other infrastructure
projects implemented by CHARM.
Best Practice and Lessons Learned
1. Empowerment and participation of local
communities and people’s organizations
2. Promotion of traditional indigenous
practices of natural resource management,
community cooperation and consensus
building.
3. Productive partnerships among LGUs,
NGOs and peoples’ organizations
4. Protection of Land Rights as a neces-
sary component of any project affecting
indigenous peoples.
Recommendations
1. It is necessary for ADB to review its
policy and practice to be more responsive
to the conditions of indigenous peoples.
2. Conduct of initial social assessments
and formulation of indigenous peoples’
plans should actively involve the affected
indigenous peoples and ensure that their
particular concerns and issues are
addressed.
3. Use internationally developed instru-
ments and standards for the recognition
of indigenous peoples’ rights and in the
conduct of initial social assessments.
4. Relevance of ADB-funded projects to
the needs and aspirations of indigenous
peoples should be ascertained through a
process of free, prior and informed
consent with the affected indigenous
peoples.
59
 Testimonies Environment
Environmental Impact of ADB Projects
in the Asia-Pacific Region
Presented by Suranjan Kodithuwakku
Green Movement of Sri Lanka (GMSL), May 2009

It would be impossible to get accurate and first person information on specific

projects of the ADB in the entire Asia-Pacific region that would stand up to the scrutiny
of a tribunal. Therefore, I am going to look at two projects in Sri Lanka (The Upper
Watershed Management Project and the Southern Transport Development Project).

Upper Watershed Management Project (UWMP)

The issue: Serious damage to the environment, socio-environmental balance and social
stability

The victims:
• 4000 ha of forests in the catchment areas, 3000 ha of land designated for planting
trees for firewood, 1500 ha of land designated for planting trees for timber
• Families living in six AGA divisions comprising of over 60 villages.

The perpetrators:
• The ADB
• The staff of the UWMP with high levels of corruption on the part of its director
• Ministry of Environment and Natural Resources

The area:
The land area of the AGA divisions of Haldunmulla, Balangoda, Keppetipota,
Bandarawela, Nuwara-Eliya and Ella comprising 60 villages.

The time frame in which the damage occurred:

5th May 1998 to 31st December 2004

What happened?
The project had the following goals:
• To rehabilitate and sustainably manage and protect critical watersheds
• To improve incomes of project beneficiaries; and
• To facilitate establishing a medium and long-term watershed management policy

These were to have been implemented via the following:

• Launching a program for participatory rehabilitation and protection of forest
coverage through: replanting the forests in the catchment areas (4000 ha), planting trees
for firewood (3000 ha), planting trees for timber (1500 ha) and home garden plots
(1500 ha)

60 Asia Pacific Peoples’ Tribunal on ADB

Testimonies
• Establishment of a conservation
supportive sustainable agricultural unit,
• Capacity building of the organizations
who could support the launching of the
project: the implementation agencies
(IAs), Non- Governmental Organizations
(NGOs), etc.
• Skills development of members of such
organizations, beneficiaries and the staff
members of the Project.
However, the reality is as follows:
• New plantations and plant nurseries at
Haldummulla Divisional Secretariat area
• Failure of the Community Based
Organisation such as Environmental
Committees (some are not yet
established) to participate constructively
in the project work
• Government officers and the people of
the area had opposed the use of plants,
which are not endemic, such as Acacia, in
the area for replanting of forest. They had
lodged their protest against the selection
of such plants. The absence of a
consultative process in selecting trees has
lead to this problem.
• Failure to implement the participatory
fire prevention plan developed by the
Provincial Secretariat. (Provincial
Secretary too had commented in
committee meetings about the failures of
field officers to actively engage in
preventing fires as planned.)
• Failure to integrate the involvement of
the government officers: Grama Sewakas,
Samudri officers, field and provincial
officers, in the Project even after their
request.
• Failure to take action on the reported
irregularities taken place in the replanting
process by officers of the Haldummulla
Divisional Secretariat.
Asia Pacific Peoples’ Tribunal on ADB
Environment
Soil and small streams conservation
program in Upper watersheds:
Keppetipola and Hevanakumbura area
in the Welimada Pradeshiya Secretariat
division
• Project had failed to give correct
information about the soil conservation
on initially selected areas of the program.
Hence most of the work done in these
areas has failed or incomplete.
• The Project had not intervened in certain
areas where the soil erosion is very high.
However, the project has undertaken
conservation work in hilly paddy fields,
which are easily accessible, but has
neglected the hilly mountains, which
cannot be reached easily.
• Lack of attention and commitment on
the part of the staff to ensure goals are
reached
Transparency and Gender equality
• Outsiders and the higher ups of the
Project were unaware of the most of the
decisions taken at lower levels
• Beneficiaries were unaware of the mode
of measurements and payments made on
the lines of rocks and gravel they did for
the soil conservation program
• Beneficiaries were forced to sign on
blank vouchers with no indication of the
amount paid
• Some beneficiaries have received
payments several times for the same job
• For some lands no payments have been
made by forwarding various excuses
• No action has been taken on the
petitions forwarded by the beneficiaries
on various irregularities in the field
• Mobilisers who criticized the
irregularities within the field staff harassed
and discontinued from work by filing
incorrect information
• In Payments had not been correctly
61
 Testimonies
made according to area of land conserved
• A female field officer had paid more
money to a friend of hers for less work
done whereas some people who did good
work were deprived of payments.
• Most of the land in Erabadda-
Kepettipola area that came under the
jurisdiction of the Project had not been
taken for development
• Payments received by the big
landowners for making plots by leveling
with bulldozers.
• Officers of the Project collected bribes
by approving excess money for the work
done
• No action had been taken on the written
complaints made on these issues
• Sexual harassment of staff by senior
officers
Southern Transport Development Project,
Sri Lanka
The issue: Serious damage to the
environment, socio-environmental
balance, social stability and community
health
The victims:
• The environment along the entire 128
km trace of the southern highway
• All those living along the 128 km trace
and peripheral communities. However,
specifically, incidents related to flooding,
deaths and ill-health, land degradation,
livelihood trauma and compensation are
highlighted.
The perpetrators:
• ADB and Japan Bank for International
Cooperaion (JBIC)
• Contractors (Kumagai Gumi, China
Harbor, Taichi)
• The police
• The Road Development Authority
62 Asia Pacific Peoples’ Tribunal on ADB
Environment
• Ministry of Transportation and Highways
• Ministry of Environment and Natural
Resources
The area:
The entire trace of the southern super
highway comprising of the Colombo, Kalu-
tara, Galle and Matara Districts.
The time frame in which the damage oc-
curred:
2003 to date
What happened?
Environmental damage:
• Ignored the fact that the trace lies across
four watersheds and instead of building an
overpass, building large earthworks that
acted like dams that prevented rainwater
drainage resulting in widespread flooding,
loss of crops and livelihoods, loss of
property and damage to community
infrastructure in large tracts of land in
the Colombo, Kalutara, Galle and Matara
districts.
• Massive degradation of habitats of
endemic species along the entire trace
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Testimonies
•
http://www.flickr.com/photos/tro-kilinochchi/2759879558/in/photostream/
Licensed under CC by 2.0
Air and sound pollution due to
inadequate control of dust resulting from
project activities such as blasting, rock
crushing and earthworks building along
the entire trace
• Soil erosion due to ill-planned excavation
along the entire trace
• Earth slips due to excavation
• Contamination of ground water
• Decrease in the water table in areas
where marsh lands were drained causing a
drying up of wells in the area.
• Wetland and peat land in these areas
completely destroyed
Loss of livelihoods
• Small homesteads completely destroyed
• Paddy lands becoming fallow since
cultivation was impossible due to silting
of the land and sealing of natural drainage
channels
• Loss of small entrepreneur businesses
• Loss of lands where rubber and tea were
grown by small holders resulting in
massive economic loss
• Loss of income for inland fishermen due
to species depletion resulting from
highway construction over rivers.
• Loss of animal husbandry livelihoods due
Asia Pacific Peoples’ Tribunal on ADB
Environment
to loss of grazing lands
Compensation
• No compensation or inadequate
compensation given for acquired lands
• No compensation for those whose
homes were damaged due to rock blasting
• Market value for valuable lands,
livelihoods and support structures not
given
• Many people removed from the site
without any compensation at all
• Adequate compensation not given
for damage to homes, livelihoods and
infrastructure of families and individuals
temporarily removed from the site for
construction purposes.
• Compensation either minimal or not
forthcoming for those who were injured,
maimed or killed by activities on the
project such as rock blasting.
• No compensation for workers on the
STDP who were injured or maimed during
the course of executing their duties.
• Inadequate payment for construction
workers by the contractors with a rights
violation occurring due to non-payment of
a minimum wage for workers.
63
 Testimonies
Deterioration of health, increase in
diseases and death
• Minimal compensation paid to family of
a mother who was killed by a rock outside
the danger zone during blasting
• Minimal compensation paid to the family
of a child who was drowned in an
unmarked pit dug by construction teams
• Incidence of chronic respiratory diseases
amongst children and deterioration of
health of adults and older people in large
areas along the trace due to inadequate
suppression of dust and stone particulates
• Hearing impairment due to inadequate
control of sound
• Eye-sight impairment in infants due to
dust and stone particulates
Development aggression
• Police in cahoots with the contractors
constantly threaten community members
and families to prevent complaints
64 Asia Pacific Peoples’ Tribunal on ADB
Environment
• A widower was arrested when he com-
plained about lack of action on the part of
the authorities
• Lack of regard on the part of the
contractors to the legitimate complaints of
the communities living in these areas
• Cover up attempt by the contractor due
to negligence
• Compete lack of response on the part of
the Ministry of Environment and
Natural Resources and the Central
Environmental Authority to repeated
complaints made to them on
environmental damage of this project
Testimonies Environment
Scrap ADB’s Strategy 2020
Presented by Hemantha Withanage
Center for Environmental Justice/Friends of the Earth
Sri Lanka,May 2009

ADB’s Strategy 2020 was prepared in year 2007 prior to the global
economic crisis 2008. It painted a rosy picture and envisaged that the Asia-Pacific region
will be in a better situation by 2020. The report produced by the Eminent Persons Group
(EPG) in May 2007 which was endorsed by ADB President Kuroda suggests that “ADB
must change radically and adopt a new paradigm for development banking.” It further
stated that “the new ADB should help tackle issues critical to the further development of
a new “middle-income” Asia, by offering a more balanced blend of knowledge and finan-
cial assistance. To address the remaining pockets of poverty, its primary emphasis would
be on supporting higher and more inclusive growth rather than transferring external
aid resources. Functioning as a financial intermediary, the Bank would connect together
lenders and borrowers from within the region.” ADB’s Long Term Strategic Framework
(LISF) has identified (i) sustainable growth; (ii) inclusive social development; and (iii)
good governance for effective policies and institutions as the three core strategic thrusts
for the Bank’s interventions.

Poverty reduction became the ADB’s overarching goal in early 1999. However, the
experts suggests that it is unlikely to meet the Millennium Development Goals. On the
basis of the World Bank’s data, 45 percent of the world’s population or around 2.8 billion
people live below the ‘$2 per day’ poverty line; and more than 1.1 billion – more than
the total population of the developed world – below half of this income level. The World
Bank recently said that Developing economies are unlikely to meet a 2015 deadline for
the goals of halving extreme poverty and improving worldwide social conditions due
to the recent financial crisis. The World Bank estimates an additional 55 to 90 million
people this year will be trapped in extreme poverty, or those living on under $1.25 per
dollar a day. Therefore I believe this picture drawn by the strategy 2020 is not true.

The key barriers identified in the EPG report are: rising disparities, unfinished
poverty agenda, environmental degradation, infrastructure bottlenecks, underdevel-
oped financial sector, regional and global integration, innovation and technological
development, and transformation of institutions. The Report cites that the most critical
among the challenges and risks facing the region seem to be: (i) poverty and low levels
of income and human development; (ii) the adverse impact of rapid economic prog-
ress on environment and natural resources; and (iii) the need for continued efficiency
and regional integration into the global economy. Therefore, these approaches will be
promoted through inclusive growth, environmentally sustainable growth, and regional
cooperation and integration.4

Asia Pacific Peoples’ Tribunal on ADB 65

 Testimonies Environment
The EPG Report
is quite confident
about its projection
of a fast growing
Asia-Pacific region
where most
Developing Member
Countries (DMCs)
would eventually
graduate to a middle
income level. It says
“By 2020 we envi-
sion a dramatically
transformed Asia Karl Ramirez/KODAO Productions
with more than 90
percent of its people their so-called development paradigms
living in “middle-income” countries. espousing liberalization, deregulation and
Meantime they expect about 800 million privatization. Resources in rural areas were
people will be still poor. taken away by big businesses without
providing just and adequate compensa-
Rapid economic growth has been the tion to affected communities. Moreover,
buzzword for most international financial these multinational companies have been
institutions (IFIs) over the past two de- known to exploit local workers (i.e. cheap
cades. This was seen as the only labor, underemployment, poor working
solution for the increasing poverty conditions). The poor were pushed into
incidence and magnitude in DMCs. While a landlessness and were stripped of their
handful of countries have become middle traditional access to their natural environ-
income countries, the rest of the low mental and resources.
income countries were caught in a debt
trap. Seeing that large-scale infrastruc- Multilateral banks like the ADB have
ture was viewed as the major catalyst for long peddled the fallacy that rapid
growth and development, most IFIs lent economic growth is the very means by
their money to fund such infrastructure which to reduce poverty in the region.
projects. However, resources depletion, The EPG Report’s 2020 projection of most
environmental degradation on top of DMCs graduating to middle-income status
natural calamities and the climate change supports the Bank’s assertion. It suggests
problem were not factored in the three major approaches for the ADB to
equation. wit: (i) promote inclusive growth;
(ii) facilitating environmentally sustainable
In most DMCs, poverty is due to the growth; and (iii) promoting regional (and
inequitable distribution of wealth that was global) integration.
the unwitting by-product of rapid growth.
IFIs facilitated the entry of multinational A report published by the New Eco-
companies and big corporations, through nomic Foundation (NEF) states that “analy-

66 Asia Pacific Peoples’ Tribunal on ADB

Testimonies
sis indicates that global economic growth
is an extremely inefficient way of
achieving poverty reduction –
particularly MDG1 – and is becoming even
less effective. Between 1990 and 2001, for
every $100 worth of growth in the world’s
income per person, just $0.60 found its
target and contributed to reducing poverty
below the $1-a-day line. To achieve every
single $1 of poverty reduction requires
$166 of additional global production and
consumption, with all its associated
environmental impacts. This approach is
both economically and ecologically inef-
ficient. It will be highly improbable to
reconcile the objectives of poverty
reduction and environmental sustainabil-
ity if global growth remains the principal
economic strategy.”
The inequitable wealth
distribution and income disparity are
major issues bedevilling low income and
even middle income countries. It goes to
show how unsuitable the market prin-
ciples and fundamentals that all these
economies are following at present. While
the ADB should not push for the opening
www.arkibongbayan.org
Asia Pacific Peoples’ Tribunal on ADB
Environment
up of market economies across the region,
it should also develop alternative
development models that would be
congruent to the socio-economic needs
and priorities of DMCs.
On the other hand, the deterioration
of the environment due to rapid industri-
alization is evident in fast growing econo-
mies such as China and India. Citizens of
these two countries along with those of
neighbouring countries are exposed to
environmental risks and hazards. Other
densely populated countries like Pakistan,
Bangladesh, the Philippines, and Indone-
sia have to resolve the growing problems
on exploitation of resources, pollution of
waterways, landlessness, air pollution, de-
sertification, and diminishing forest cover
among others. Furthermore, poor commu-
nities are now seen most likely to be most
vulnerable to climate and natural
disasters.
Privatization efforts for both pub-
lic utilities and management of natural
resources are likewise serious risks that
face the poor all over Asia and the Pacific
today. Under the guise of private sector
participation or public-private partner-
ship, privatization has denied the poor
rightful access to public services and
natural resources.
The issue of growing debt for many
small economies is another huge burden
to the poor since the latter suffer the
brunt of the repayment. With debt ap-
propriation high on most DMCs’ economic
agenda, the national budget for
basic social services usually gets cut. Un-
less the ADB devises a mechanism that
would release these countries from the
debt trap, the poor will never benefit
67
 Testimonies
from any Bank-aided social development
project. Conducting a comprehensive debt
audit or a restructuring of loan terms that
would be favourable to low income and
middle income countries would pave way
for the prioritization of delivery of basic
goods and services to their respective
citizenries over debt repayment.
Conclusion
As a multilaterally-tasked and gov-
erned institution, the Bank has to refocus
its banking role since it is one of the root
causes of the socio-economic disparities
and resources depletion problems that are
occurring in most DMCs. A delicate
balancing act between “banking” and
“development,” calls for a major change in
attitude and mindset in the ADB. Perhaps
the Bank can start by adopting a more
emphatic term like “improving the quality
of life of the poor” instead of using the
hackneyed term “poverty alleviation.” But
more than semantics, the Bank should
realize that ensuring “sustainable
livelihood for the poor” is the best way to
attack the poverty problem. In particular,
rural development should be planned
according to existing local situations/
conditions and with the meaningful
participation/involvement of communities.
Based from documented case stud-
ies and previous experiences, the ADB
has been found as not serious enough in
ensuring the meaningful participation of
stakeholders, especially the poor, mar-
ginalized, and vulnerable groups, both in
the formulation of national development
strategies and in the implementation of
its programs and projects. It is warranted,
therefore, for the Bank to improve its cur-
rent consultation processes by crafting a
68 Asia Pacific Peoples’ Tribunal on ADB
Environment
guiding policy or stringent implementing
guidelines that would ensure the par-
ticipation of affected communities, civil
society organizations and other relevant
stakeholders to an honest, no-nonsense,
no-holds-barred, robust, and structured
project-based or policy-related
consultations.
Going back to the findings of the 2006
MDG Report, most Asia and the Pacific
countries are behind meeting the MDGs.
Therefore, the Bank needs to realign its
soft loans in consonance with the MDGs.
Furthermore, it also needs to align its
soft funds vis-à-vis global commitments
that were made in international summits/
conferences like the Kyoto Protocol, the
Education for All 2015 and the 2002 World
Summit for Sustainable Development
Johannesburg Plan of Implementation.
Moreover, the Bank should end
conditionalities, particularly in the areas of
political and macroeconomic policies; and
put a stop to the practice of tying
development aid to the hiring of foreign
consultants, purchase of goods, and the
like. Further, the soft loans should be
progressively increased to support the
improvement of social services delivery
and pro-poor infrastructure development
programs for health, agriculture, educa-
tion sectors among others. The poorest
regions of DMCs should be given priority
when it comes to aid.
The infrastructure programs of the
Bank are driven not for the very
purpose of poverty alleviation but for
industrialization. Thus, the ADB should
assist governments to adopt a rights-based
approach to providing aid. This can be
done by respecting social development
Testimonies
http://www.flickr.com/photos/rita_banerji/500476241/
Licensed under CC BY 2.0
principles to guide Bank operations in all
sectors; at the same time upholding the
human rights of the poor, especially those
whose voices are at risk of being silenced
or marginalized vis-à-vis aid: women,
children, youth, indigenous peoples, eth-
nic minorities, and even non-citizens like
migrant workers.
In matters concerning the health sec-
tor, the Bank should honour affordable
health care and services as an uncompro-
mised right of every citizen of developing
nations. The ADB should not promote any
policy that would lead to the privatization
of the health care systems in DMCs, but
instead support projects that would
genuinely enhance health services for the
poor.
Concerning free education, it is the
only way out for the rural poor of the
poverty quagmire. Again, the Bank should
not advocate privatization of this sector.
It should support provisions for modern
educational facilities in formal and
informal education sectors in both urban
and rural areas.
Asia Pacific Peoples’ Tribunal on ADB
Environment
In terms of core labour standards, the
ADB has not sufficiently addressed this
issue. The continuous enhancement and
upgrading of skills as well as the
protection of and respect for the rights
of workers in ADB-funded operations in
DMCs should be paramount in the Bank’s
priorities.
Regarding the problem of corruption,
the ADB should not just stop at denounc-
ing all its forms and types, but should
consistently see to it that the guilty or err-
ing parties are given out stiff penalties and
punitive actions. This would demonstrate
the earnestness on the Bank’s part to
weed out corrupt practices in all its activi-
ties and operations.
For gender justice and empowerment
concerns, the ADB needs to assist coun-
tries to formulate an alternative frame-
work that would give utmost protection
to the rights of women in all aspects of
development, as well as identify a set of
indicators that would comprehensively
measure the impacts of its operations on
the welfare and well-being of women.
Absolute freedom from the oppressive
shackles of poverty is a dream of every
poor person. It is a paramount right of
every individual that should be recognized
and ensured by governments of develop-
ing economies and most especially by the
Asian Development Bank.
As a multilateral bank that depends on
public funds, the Bank should not gamble
away the future of the poor citizens of
Asia and the Pacific region to profit-ori-
ented financial entities with little regard
for the preservation of the environment,
conservation of natural resources, and
the protection of the rights of affected
69
 Testimonies
communities, minorities, and vulnerable
groups.Rather than promoting economic
growth, the ADB should adopt “sustain-
able livelihood” as a main principle to its
poverty reduction efforts in the region. It
is imperative that it focus more on locally
acceptable but successful development
models in DMCs. It should stop imposing
on DMCs to open up their economies in
order to produce goods and services for
the benefit of both the national elites and
developed nations.
Environment
Strategy 2020 is based on falls assump-
tions and was crafted before the present
crises. The Strategy 2020 is therefore not
acceptable. The ADB should scrap the
Strategy 2020 as its long-term strategy
framework and reconsider its strategy
based on the financial crisis, climate crisis,
food crisis we are facing today.
References:
Toward a New Asian Development Bank in a
New Asia,

Report of the Eminent Persons Group to The

Tasking ADB with non regional
President of the Asian Development Bank,
services is not a wise option. As studies March 2007
have shown, poverty incidence has not
changed; hence, assuming that poverty A note to support the stakeholder
will be resolved by 2020 is not only consultation on the Review of ADB’s Long Term
realistic but dangerous as well. Instead of Strategic Framework, 30 July 2007
abandoning its role as a development
bank, ADB should continue to strive in
providing services assistance to the poor
to alleviate them from poverty. The Bank
should continue to promote the rights
and welfare of the poor and marginalized
groups against globalization. As such, the
Bank should include the poor and the
marginalized in its economic development
models in order to fully realize its
socialized poverty-free Asia.

However, defending and promoting

the environmental and social rights of the
poor remain a big challenge to the ADB.
The ADB should not abandon its over-
arching goal, which is poverty reduction.
Instead of transforming itself into a knowl-
edge-based institution which runs counter
to its development mandate, the ADB
should continue to provide assistance to
DMCs to bridge the continuously rising
income disparity between the rich and the
poor in the Asia and the Pacific region.

70 Asia Pacific Peoples’ Tribunal on ADB

 Verdict

Asia Pacific Peoples’ Tribunal on ADB 71

 Verdict
ASIA-PACIFIC PEOPLES’ TRIBUNAL ON ASIAN DEVELOPMENT BANK
ADB: Development for the People or for Profit?
May 2-3, 2009
Udayana University Faculty of Medicine Auditorium
Denpasar-Bali, Indonesia

ALIANSI GERAKAN REFORMA AGRARIA

(AGRA), ET AL.,
Complainants

- versus - CASE NO. 01-2009

ASIAN DEVELOPMENT BANK, ET AL.

Respondents.
x------------------------------------------x

VERDICT

We, the college of jurors, after considering the evidence presented by complainants,
the peoples of the Asia-Pacific, hereby render our verdict as follows:

ON CHARGE 1:

As borne out by the evidence presented, it cannot be denied that the loans/grants
given out by the Asian Development Bank were NOT geared toward the allevation of
proverty. Instead, these funded projects contributed to the massive socio-economic
displacement of the people in the Asia-Pacific region.

These projects, which were silver lined as development projects supposedly

intended to alleviate the socio-economic condition of the people, were in fact tied up
with conditions that required debtor countries to adopt economic policies that
promote liberalization, deregulation and privatization. Liberalization had been proven
to be detrimental to domestic agriculture and industry, which contribute to the increase
in inequality, hunger, poverty, malnutrition, pauperization, displacement, migration and
unemployment. On the other hand, privatization and deregularization has rendered
public utilities inaccessible to the people and eliminated their remaining hope to gain
access to social and economic services, education, health services and food security.
Evidence were also presented that projects were implemented without due regard to
the environmental and ecological safety, culture, indigenous knowledge and traditions of
the communities which were supposed to benefit from this project, which in most cases
resulted in their cultural and economic displacement.

72 Asia Pacific Peoples’ Tribunal on ADB

Verdict
Additionally, infrastructure projects implemented through the ADB have resulted in
environmental disasters destroying homes, farmlands and the ecological balance. These
disasters affected the lives of millions of people and depriving them of their means of
livelihood.

The fact that such conditions are tied to all loans granted by the ADB, and the dis-
placements are evident in all communities where such project are being implemented
are indications that such incidents are not isolated but widespread, and that the same
time are systematically and knowingly imposed.

Respondent ADB is not the only one liable for such violation of the peoples’ econom-
ic, social and cultural rights. And the governments, corporations and all other respon-
dents are equally liable for such violation, because their cooperation are necessary for
the imposition of the conditions that adversely affected the peoples’ economic, social
and cultural rights.

Considering the evidence showing the illegitimacy of debts incurred by the govern-
ment but payment of which is shouldered by the people through taxes and higher prices;
evidence showing the impoverishment resulting from illegitimate debts and policies of
the ADB; evidence showing massive dislocation and environmental destruction; evi-
dence showing the destruction of agriculture of various countries; evidence showing
violation of the rights of the indigenous peoples, peasants, fisher folks and other mar-
ginalized groups; evidence showing massive displacement; evidence showing that ADB’s
policy on water and the privatization of water services including infrastructure projects
such as dams, roads, irrigation have caused considerable damage to people’s livelihood,
and destroyed the environment, we declare THE ASIAN DEVELOPMENT BANK and the re-
spondent governments, corporations and other respondents GUILTY beyond reasonable
doubt of GROSS, WIDESPREAD AND SYSTEMATIC VIOLATION OF THE ECONOMIC, SOCIAL,
AND CULTURAL RIGHTS OF THE PEOPLE IN THE ASIA-PACIFIC REGION, which infringe the
right of the people under The Universal Declaration of the Rights of the People or the
Algiers Declaration of July 1976; The Universal Declaration of Human Rights of December
10, 1948; and The International Covenant on Economic, Social and Cultural Rights.

ON CHARGE 2:

In its more than forty years of existence, the ADB knowingly supported dictatorial
and authoritarian regimes who are responsible for widespread violation of civil and
political rights of their citizens. The ADB closed its eyes on these violations, and con-
tinued to fund supposed development projects proposed by these regimes. The ADB,
therefore condoned these violations, and is likewise liable for such violation of civil and
political rights.

In areas where there are opposition to ADB funded projects, project proponents
used threat, intimidated, harassments and even killings to stifle the voices of the

Asia Pacific Peoples’ Tribunal on ADB 73

 Verdict
opposition. These are evident violation of the civil and political rights of the people.
While it is the host governments who initiated such acts, the ADB cannot feign
innocence, since these are evidently executed if not with their knowledge, through their
act of omission in not stopping the host governments from committing such acts, nor
imposed any sanctions against such governments. Thus, the ADB is equally liable for
these violations of the civil and political rights of the people of the Asia-Pacific Region.
The people have also shown by their evidence that the respondents have commit-
ted gross and systematic violation of the civil and political rights of the people of the
Asia-Pacific region. As such, we the college of jurors hereby declare that the Asian
Development Bank and the respondent governments GUILTY as such. The said act of
ADB infringe on the right of the people under the Universal Declaration of the Rights of
the People or the Algiers Declaration of July 1976; The Universal Declaration of Hu-
man Rights of December 10, 1948; and The International Covenant on Civil and Political
Rights of December 16, 1966,

ON CHARGE 3:

The PEOPLE have accused the respondent of committing violation of peoples’ sover-
eignty and the right to self-determination.

The evidence submitted by the people also established that respondent ADB,
through the Development Policy Support Program (DPSP), compel debtor countries to
adopt the policies imposed by the bank as conditions for the release of loans. Through
this process, the ADB defines specific policy outcomes and results as a condition, and the
debtor country is left with no recourse but to comply with such imposition and to adopt
the policy conditionalities of the ADB before the loan is granted. This constitutes a
violation of peoples’ sovereignty and their right to self-determination. It was also shown
that ADB imposed its will on the communities and indigenous peoples despite
opposition and without due regard to their culture and traditions.

The people have fully proven these facts. The witnesses they have presented and the
documents submitted were more than sufficient to show that indeed the respondents
are GUILTY for violating sovereignty and the right to self-determination of the people.

Prescinding from the foregoing, we, the College of Jurors of this Asia Pacific Peoples’
Tribunal on the Asian Development Bank hereby pronounces a GUILTY VERDICT for all
the three charges against the ASIAN DEVELOPMENT BANK, THE GOVERNMENT OF THE
UNITED STATES OF AMERICA, THE GOVERNMENT OF JAPAN, THE GOVERNMENT OF THE
REPUBLIC OF THE PHILIPPINES, THE GOVERNMENT OF INDONESIA, THE GOVERNMENT
OF INDIA, THE GOVERNMENT OF BANGLADESH, THE GOVERNMENT OF SRI LANKA,
and THE GOVERNMENT OF PAKISTAN, and hereby hold them jointly and severally liable
therefore.

74 Asia Pacific Peoples’ Tribunal on ADB

Verdict
SO DECLARED.

Abdon Nababan-Indonesia Zumrotin Susilo- Indonesia

Dr. Azra Sayeed- Pakistan Antonio A. Tujan Jr. - Philippines

Congresswoman Liza Maza – Philippines I Wayan Tirja Nugraha - Indonesia

Asia Pacific Peoples’ Tribunal on ADB 75

 Judgement

76 Asia Pacific Peoples’ Tribunal on ADB

Judgement
ASIA-PACIFIC PEOPLES’ TRIBUNAL ON ASIAN DEVELOPMENT BANK
ADB: Development for the People or for Profit?
May 2-3, 2009
Udayana University Faculty of Medicine Auditorium
Denpasar-Bali, Indonesia

ALIANSI GERAKAN REFORMA AGRARIA (AGRA)

ET AL.,

Complainants,

- versus - CASE NO. 01-2009

ASIAN DEVELOPMENT BANK, ET. AL,

Respondents.
x------------------------------------------x

JUDGEMENT

The undersigned presiding judge of the Asia-Pacific Peoples’ Tribunal on the Asian
Development Bank, considering the guilty verdict pronounced by the College of Jurors,
with the reservation to pen an extended opinion and judgment, do hereby promulgate
this JUDGEMENT, to wit:

i) The Asian Development Bank is ordered dismantled;

ii. Its policy on debt, privatization of water and public utilities, and other anti-people
policies were proven detrimental to the rights of the peoples to life, livelihood, dignity
and freedom from want and are hereby DECLARED illegal with no force and effect, and
are now deemed revoked;

iii) All illegitimate loans and obligations of the debtor governments is ordered written off
and repudiated;

iv). The Asian Development Bank and the government respondents are hereby ORDERED
jointly and severally liable to compensate and indemnify the victims’ of the violations
they have committed; to rehabilitate the economies of the countries and the livelihood
of the people they have damaged; and restitute the peoples of the environmental,

Asia Pacific Peoples’ Tribunal on ADB 77

 Judgement
material, personal, and moral damages that resulted from the implementation of the
immoral, unjust and inhumane policies. In addition, the Asian Development Bank and
the government respondents are likewise ordered to issue a sincere public apology to
the plaintiffs as well as to the other oppressed and exploited peoples of the world and to
cease and desist from implementing its anti-people policies and projects;

v) The appropriate charges be filed against the Asian Development Bank Defendants and
the respondents governments before the United Nations and its pertinent committees
and Special Rapporteurs, the International Criminal Court (ICC) under the Rome Statute,
the United Nations Human Rights Committee (UNHRC), the Organization of Islamic Coun-
tries (OIC) for the violations they have committed hereof. For this purpose, the Clerk
of this Court is hereby directed to prepare the necessary charges and that the same be
forthwith transmitted to the aforesaid agencies;

vi) The Governments of the defendant-states are hereby ADMONISHED for disregarding
the rights of its citizens to life, liberty, livelihood, dignity and freedom from want and are
ORDERED to withdraw their membership from the ADB and their support of its policies;
vii) The Asian Development Bank and the respondent governments are hereby
ORDERED to uphold the rule of law, respect the civil, political, economic, social and
cultural rights the people and desist from adopting policies or measures that restrict,
infringe upon or impair such rights;

viii) the individuals heads of states and governments are hereby ORDERED forcibly
ousted or overthrown from positions of power and perpetually and absolutely barred
from holding any public office; In the interim;

ix) The Asian Development Bank, respondent Governments of the United States and
Japan are ORDERED to desist from interfering in the affairs of the Asia Pacific Region;

x) The tribunal further ORDERS the creation of a legitimate and independent body to try
other crimes committed in furtherance of the policies imposed by the Asian Develop-
ment Bank; and

xi). The findings of this Tribunal may be invoked among solidarity groups and individuals
and in the international community to support the struggle of the peoples of the Asia
Pacific Region against the unjust policies of the Asian Development Bank.

Wardah Hafids
Presiding Judge

78 Asia Pacific Peoples’ Tribunal on ADB

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