The West Africa Gas Pipeline Project (WAGP) exemplifies the reemerging trend at the World Bank of big, high-risk projects that are purported to be big solutions to poverty reduction and income generation. The World Bank seems set on returning to a formula that has already been proven a failure: large scale projects that risk being destructive to the local populations the World Bank professes to help, the investors whom the World Bank continues to encourage, and to the environment.

The failure of the World Bank’s funding of so-called high risk, high reward projects in the oil, mining, and gas sectors is documented in a report commissioned in 2001 by the World Bank itself. Completed last year, the Extractive Industries Review (EIR) found that World Bank projects, far from fulfilling its stated mission of “poverty alleviation,” exacerbated already dire conditions for impoverished peoples, and miring their countries in debt. Despite the damning findings of the EIR, the trend towards increasing lending for such projects is reflected in another internal World Bank report released earlier this year, which calls for a shift in the bank’s operations from social spending to a return to large infrastructure projects.

The history of the World Bank and natural resource extraction is an ugly one. The most notable of example is the utter devastation of the Niger Delta that resulted from a World Bank project supporting the extraction of petroleum oil. Instead of providing Nigerians with a sustainable economy, the World Bank created the opportunity for Shell, Chevron, Mobil, Agip, and others to enter the Niger Delta and procure crude oil by any means necessary for their own profit, not for the benefit of Nigerians. What remains of the once productive Niger Delta is a community of impoverished people living amongst leaking and exploding oil pipelines, gas flares, air, soil, and water pollution, truck and tanker traffic, and oil runoff.

WAGP and the World Bank

The idea for WAGP originated over two decades ago as a proposal by the Economic Community of West African States (ECOWAS) for an economic policy that would create national capital as well as integrate West Africa into the global economy. Since its inception, WAGP has been transformed from a regional vision focusing on improving the local standard of living to a multinational project focused on increasing the profits of multinational corporations and investors.

The WAGP will be a 678 km gas pipeline transporting natural gas from Nigeria to Benin, Togo, and Ghana to be used for power generation and eventually industrial and commercial use. The pipeline will be laid largely offshore in a seabed 15 to 20 kilometers from the coast of all four countries. Although a large part of the pipeline itself will be placed offshore, it will come with tremendous social and environmental consequences to those living on the ground in the Niger Delta.

The cost of the pipeline is $590 million. The World Bank’s Multilateral Investment Guarantee Agency (MIGA), the agency responsible for encouraging foreign direct investment in developing countries by providing insurance to private investors, is guaranteeing the project for $75 million for twenty years while the World Bank’s International Development Association (IDA), the agency responsible for providing financial support to the world’s poorest countries, is guaranteeing the project for $50 million for twenty-two years. This provision by MIGA and IDA is the traditional indicator to foreign investors that the project is worthwhile for them financially and gives them an incentive to invest. Civil society organizations on the ground and their allies abroad called for the delay of the November 23, 2004 approval of the guarantees by the World Bank’s board because of serious environmental and social concerns regarding WAGP.

WAGP: Reminiscent of the Past

The existing and continuing devastation of the Niger Delta is a constant reminder of the potential consequences of the WAGP. The West Africa Gas Pipeline Consortium, the group of private companies responsible for the construction of the project, claims it will reduce gas flaring and the environmental risk associated with the construction of the pipeline, however, the consortium has failed to demonstrate in any clear and objective explanation how this will be ensured. The lack of concrete vision for the alleviation of potential problems with the pipeline is further illustrated by the failure to address the project’s potential exacerbation of conflict over control of existing resources in the Niger Delta and the project’s disproportionate benefit to the industrial sector rather than the impoverished populations of Nigeria, Benin, Ghana, and Togo.

These viable and pressing concerns are heightened by other gaps in the WAGP research – most critically, the failure to adequately consult with the local communities potentially affected by the project. The potential is high for the project to degenerate into a situation like that already prevailing in the Niger Delta where human rights abuses are normalized, restitution unaddressed, and despite all this, extraction continued.

Not the Whole Picture: WAGP’ s Incomplete EIA

Furthermore, the Environmental Impact Assessment (EIA) has been left incomplete and unsatisfactory. The EIA fails to include the upstream and downstream areas of the project that will be affected by the pipeline, referencing them only as secondary and indirect impacts when in fact they could be severely affected as a direct result of the pipeline. Upstream of the WAGP, the existing Escravos-Lagos Pipeline in Nigeria has not been taken into consideration – the EIA has never addressed the consequences of the proximity of the two pipeline projects on the local population.

The systems downstream of the WAGP that will be seriously impacted by the project due to runoff and potential water pollution have also never been considered. The purpose of the EIA is to evaluate all the possible environmental consequences of a given project and the outright exclusion of certain impact areas not only fails to meet the mission of the EIA, but also fails to do justice to the people whose lives and livelihoods risk destruction by the project.

Conclusion: Bad in Theory, Bad in Practice

The old prescriptive “live and learn” – implying that past mistakes will inform future decisions – fails to apply to the World Bank. After years of lending for large-scale projects attempting to achieve quick fix development solutions and subsequent years of increased poverty, displacement, environmental damage, and corruption, one would hope the thinking would change. And it has, outside of the IFIs: a new development thinking of local solutions to local problems is taking hold and as the potential grassroots empowerment it envisions is realized, the international financial institutions must take note.

Sadly, the WAGP marks the World Bank’s return to the past, failed ideology of jump-start economics that are as bad in theory as they are in practice. The “large-scale “solution, now notorious for failing to address the needs of local populations and the impacts of these projects on their daily lives, is making a comeback. The World Bank’s support of the WAGP proves that little confidence is merited for those hopeful of improvement in the practice of the international financial institutions. If one cannot learn from one’s mistakes, there is little reason to be hopeful for change in the future.