When we design development projects, our objective is always to improve lives. Ideally, this objective can be achieved with minimal to no negative externalities. However, on occasion and even after careful consideration of the alternatives, direct or indirect adverse impacts on some groups cannot be completely avoided and must instead be responsibly managed to ensure that project-affected people are not worse off because of an IDB-financed operation. This is the case of involuntary resettlement.
Involuntary resettlement results when development projects displace people physically or economically without the option to refuse. Physical displacement refers to relocation, while economic displacement refers to the loss or restrictions on land use, assets and natural resources leading to loss of income sources, regardless of whether affected people are being physically displaced or whether their economic activities are formal or informal.
The effects of a poorly designed and executed resettlement process are arguably the most negative and consequential impacts that a community, household, or individual can suffer. In the worst case, an inadequate resettlement process may cause a household to be uprooted, left without proper shelter or jobs, and moved far from its support network and social life. Essentially, their world is turned upside down. And when consequences are not as severe, poorly executed resettlement can still leave a community feeling bitter and resentful.
For several decades, the IDB has had strict requirements for operations that entail involuntary resettlement, with the aim of protecting households and businesses so that their livelihoods and living conditions are, at a minimum, restored during the resettlement process. These requirements have been recently enhanced by the IDB’s new Environmental and Social Policy Framework (ESPF), now in effect.
Processes and principles for a successful resettlement
The new ESPF includes a dedicated standard on land acquisition and involuntary resettlement (ESPS 5), which describes how risks and impacts associated with land acquisition and involuntary resettlement must be managed, including the need to provide differentiated measures to ensure that vulnerable and marginalized people are not disproportionately impacted by the process.
Below is a summary of the process followed under the ESPF for the effective management of resettlement-related impacts.
- Screening: early in project design, determine if an operation will require temporary or permanent land acquisition or restrictions on land use or natural resources.
- Assessment: evaluate the nature and scale of impacts related to temporary or permanent land acquisition and restrictions on land use or natural resources. A robust demographic census is of key importance to determine the nature and scale of impacts on households and businesses and will be the foundation for monitoring that project-affected people receive appropriate assistance and compensation. It can also provide key information to determine the level of vulnerability of specific households and if they require special assistance.
- Impact management and compensation: once the nature and scale of resettlement impacts have been fully assessed, the key management measure for those impacts is the provision of resettlement assistance and compensation “packages”. The “packages”, which may include, for example, a new dwelling and moving assistance for resettled households, will be consulted on with the affected households and businesses, and included as part of the document guiding resettlement, commonly referred to as a Resettlement Plan.
A key principle for compensation is that everyone, regardless of their land ownership status, must receive assistance and compensation that, at a minimum, restores their living conditions and livelihoods. In practice, this means that houses and businesses should be resettled to contexts that are at least equal to where they moved from, in an area that provides a similar social network, public and private services, and means of income. This also includes protecting people that will be resettled from exposure to natural hazards or climate change risks.
Another key principle to resettlement is stakeholder engagement, which should start early in project design and continue until project closure. That means that households and businesses with the potential to be physically or economically displaced should have the opportunity to learn about the project from the onset, at a point in time when their views can still influence the project’s design and help minimize involuntary resettlement.
Differentiated measures for vulnerable and disadvantaged people and groups
The ESPF defines disadvantaged and vulnerable people and groups as those who, because of their status, may be more likely to be adversely affected by project-related risks and impacts and may have a more limited ability to take advantage of project benefits. A disadvantaged or vulnerable status is not the same in every context and, depending on national and local circumstances, may include people with disabilities, women, indigenous peoples, and people who are discriminated against due to their economic class, gender identity, sexual orientation, religion, race, color, ethnicity, age, language, and political or other opinion.
If there is a potential for people of disadvantaged or vulnerable status to be disproportionately impacted by involuntary resettlement, then differentiated measures must be put in place to prevent those impacts. For example, if people with visual disabilities will be impacted by resettlement, then specific measures should be provided to ensure that they are able to participate under equal conditions in the stakeholder engagement activities that provide feedback on the resettlement process. Among other measures, this could include the provision of documents in braille.
Resettlement is a complex process that requires a tailored approach for every project. People whose property or livelihoods are negatively affected by a project need to be consulted and should always receive fair compensation and assistance. While the burden of displacement may be unavoidable, resettlement should never leave communities worse off and should always strive to improve lives.
This blog post is part of a series about the IDB‘s new Environmental and Social Policy Framework (ESPF). You may also want to read: