Press Release / June 15, 2006

World Bank Inspection Panel finds Slam Bank Forestry Project in Cambodia

A leaked World Bank Inspection Panel[1] report heavily criticises the Bank’s own forest management project in Cambodia for breaking internal safeguards, ignoring local communities and failing to reduce poverty, said international non-governmental organisation Global Witness today.
Cambodia’s forests covered 73 % of the country in 1971, but were decimated in the wake of the civil war by illegal and unsustainable logging. Local communities lodged a complaint with the Bank’s Inspection Panel in 2005, after it became clear the Bank’s five-year Forest Concession Management and Control Pilot Project had exacerbated an already dire situation.
‘’Ultimately, this project promoted the interests of asset-stripping companies and corrupt politicians over those of the rural poor,’’ said Simon Taylor, Global Witness Director. ‘’NGOs have been saying for years that the Bank’s approach to forestry in Cambodia would be environmentally and socially damaging, and the Panel’s report bears out these criticisms. Now Global Witness is calling for a whole-scale shift in the Bank’s thinking on forest management and dealing with corruption.’’

[1] The World Bank’s Inspection Panel was created in 1993 to increase the accountability of World Bank lending and to provide local people with a forum of last resort to enforce their rights under Bank policies and loan conditions.

“The findings of the Inspection Panel reveal the extent to which the Bank was prepared to break its own regulations in pursuit of project success.” Added Taylor.
According to the Bank Inspection Panel, the Bank broke its safeguard policies by:

• Failing to ensure adequate consultation of local people, and ignoring evidence of the negative impact more concession logging would have on the livelihoods of forest-dependent groups, notably resin-tappers.

• Not recognising that some of the areas put forward for industrial logging were also forests of ‘high ecological value’.

• Failing to ensure adequate detection of cultural and spiritual property in the forests.

• Not ensuring adequate supervision of the project.

“While we welcome Panel findings showing the deeply flawed nature of the project, the question now is what is the Bank going to do about it? Paul Wolfowitz has stated how important the Panel is for monitoring Bank performance and this is a test-case,” said Taylor. “If the Bank is serious it needs to ensure that those responsible for this debacle are held accountable and that other forestry projects in countries such as Democratic Republic of Congo are not recycling the same flawed approach. More broadly the Bank has to rethink the way it operates in highly corrupt environments such as Cambodia so that its efforts benefit the poor rather than local elites and dubious private companies.”

Since the launch of the Inspection Panel investigation the Bank has withdrawn its support of the logging concession system and its operators, advocating a range of alternative approaches to forest management with greater emphasis on the role of local communities.

“This belated u-turn on forest sector policy in Cambodia deserves to be welcomed, but we have yet to see these words turned into reality on the ground. We now need to see the Bank to put its political influence and in-house capacity behind a concerted drive to make sure that this more appropriate package of measures is fully implemented.’’ Said Taylor.

For more information and interviews contact: Eleanor Nichol on 0044 (0)207 561 6385

Notes to Editors:
1) Global Witness focuses on the links between the exploitation of natural resources and the funding of conflict and corruption. It is non-partisan in all its countries of operation. Global Witness has been co-nominated for the 2003 Nobel Peace Prize for its work in uncovering how diamonds have funded civil wars across Africa.
2) The request for inspection of the FCMCPP was sent to the Inspection Panel in February 2005 by NGO Forum on Cambodia, whom the plaintiffs have nominated as their representative. This request document can be downloaded from the Inspection Panel’s website, along with the World Bank management’s response and the Inspection Panel’s assessment of the request and its recommendations:,,contentMDK:20387088~pagePK:64129751~piPK:64128378~theSitePK:380794,00.html
3) The Inspection Panel is a three-member body created in 1993 to provide an independent forum to private citizens who believe that they or their interests have been or could be directly harmed by a project financed by the World Bank. For more details, see,,menuPK:64132057~pagePK:64130364~piPK:64132056~theSitePK:380794,00.html.
4) The briefing document by Global Witness which sets out in detail the case for investigating the FCMCPP was submitted to the Inspection Panel in February 2005 as part of the request for inspection. This document can be downloaded at
5) Resin tapped from various species of dipterocarp tree is an economically valuable commodity both within Cambodia and abroad. Recent studies estimate that at least 100,000 rural Cambodians derive part of their income from resin-tapping.