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By on December 12, 2011 - CSR Blog

What is the involuntary resettlement by the IFC?

A resettlement is involuntary when it is performed without the grounded consent of the displaced individuals or if such individuals give their consent without having the possibility of refusing to be resettled. Involuntary resettlement may involve (i) physical displacement of people or communities, or (ii) a change in their means of subsistence.  The IFC’s policy applies to both situations.

All IFC projects involving involuntary resettlement are managed in accordance with the IFC’s Safeguards and Environmental and Social Performance Standards. The latest revision of these standards will come into effect in January 2012.

Economic displacement is the loss of income or a person’s livelihood resulting from land acquisition or obstructed access to resources (land and water, among others) that results from the construction or operation of a project or its associated facilities. Physical displacement is the actual physical resettlement of people, which entails a loss of shelter or productive assets, or the loss of access to productive assets.

The World Bank’s policy on involuntary resettlement applies to all possible situations of physical and economic displacement, regardless of the total number of individuals affected or the importance or seriousness of the anticipated effects.

Basic Principles of the IFC

The IFC applies the following basic principles to mitigate the negative effects of involuntary resettlement:

  • Involuntary resettlement must be avoided to the maximum extent possible;
  • All people affected should be compensated fully and fairly for lost assets;
  • Involuntary resettlement should be conceived as an opportunity for improving the standard of living of the affected people and it must be undertaken accordingly; and
  • All people affected should be consulted and involved in resettlement planning to mitigate the adverse effects and to cause the benefits of resettlement to be sustainable and satisfy the needs of the people involved.

Without appropriate planning and management, involuntary resettlement may give rise to negative long-term effects for project affected people. These potentially negative consequences reduce the positive effects of project development, damage the reputation of the company that carries out the project, and run counter to the IFC’s objective of improving the standard of living of people through the private sector investments it supports.

With appropriate planning and management, companies can augment the beneficial effects of development by improving affected peoples’ standard of living.  This can lead to goodwill on the part of affected communities and can help improve corporate reputation.

An information management system is a tool that helps project planners accurately record information related to affected people and their compensation.  It can also be used as a management tool that helps decision-makers determine the effects of the project on affected communities and aids them in developing community development, risk and resettlement plans.

The next blog entry will involve a discussion of Involuntary Resettlement Plans.

See also:
Ivoluntary Resettlement in Extractive Projects according to the IFC (part 2)

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