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ADB’s efforts to make good off to shaky start, audit finds

A woman prepares food at an ADB relocation site
A woman prepares food at an ADB relocation site last year. Scott Howes

ADB’s efforts to make good off to shaky start, audit finds

A review of the Asian Development Bank’s actions to remedy “major” failings in its provision of compensation and resettlement to thousands of families affected by a $143 million railway project it funded has found the bank failed to meet a number of its commitments.

The ADB’s internal audit of the project by its compliance review panel (CRP), begun in 2012, last year recommended the bank rethink its entire approach to dealing with the 4,000 affected families, which the ADB later admitted had become poorer as a result of resettlement, land loss and mounting debts.

The first annual review of its compliance with the audit’s recommendations, published on Monday, said that while “significant progress” had been made in five out of six areas highlighted in the review, “more effort is still required to bring the project into full compliance”.

The CRP noted that efforts to alleviate the debt burden of affected families “have not manifested on the ground as yet”, despite schemes, including one by the Australian Embassy, to reduce villagers’ indebtedness.

The ADB, AusAid and Credit Union Foundation Australia told the CRP that incomes were increasing and debts declining, but affected villagers reported only being able to pay back the interest on their debts.

The review also found that the bank’s “exit strategy”, announced in January, “seems akin to a strategy for transferring responsibility”.

“The proposed exit strategy also seems to ignore other means of promoting the ultimate objective of ADB’s Involuntary Resettlement Policy, namely to ensure that affected persons receive assistance so that they will be at least as well off as they would have been in the absence of the project.”

Errors in determining the value of lost property and income were found in a sizeable percentage of cases; however, a sample review found that many of the miscalculations had subsequently been corrected.

The identification of sub-par infrastructure at resettlement sites was “incomplete” and based on “inadequate consultation”, the audit said.

Eang Vuthy, executive director of Equitable Cambodia, which lodged the complaint with the ADB on behalf of the affected families, said the bank should follow through on its promises.

“I think the ADB has an obligation to implement the board’s recommendations, no matter whether the government cooperates or not . . . Now, we are seeing progress has been very slow,” he said. “We want to see ADB put more effort and resources to implement the recommendations. ADB has to closely monitor this on the ground, and they must have their own staff. You need to have people working full-time on this project. People are still suffering.”

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